332 Responses to “Friday Free For All!”
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June 13th, 2008 at 8:07 pm
I agree. The past is the past and nobody can change the past. What matters is the future.
If you are buying for a primary home and plan to own for many years, then trying to time the market is likely a fools strategy. Worrying about a 10% correction over a long time horizon is pointless. History suggests that the next bull market will more than make up for it.
However, going forward… sitting on the sidelines for an extended period (again 12 to 18 months) will likely cost you.
I don’t need 10 houses… just one… I already bought it. I don’t really care what the market does.
June 13th, 2008 at 8:01 pm
That still makes me right 96% of the time.
BFD. The issue is whether you and the other bulls are right now.
Get it?
Like I say, get out and buy, pal. Buy 10 houses. Right now.
June 13th, 2008 at 7:56 pm
“You buy a house in nominal prices and pay back your loan in nominal prices. Inflation works in the purchasers favour.”
You just uncovered the secret to eternal wealth! Debt! No free lunch, dude. There’s a reason why mortgage and rates and bond yields are higher than inflation. Good luck with those salary increases, though.
June 13th, 2008 at 7:29 pm
You sure showed me patriotz. A one year window in 25 years? OK, I’ll give you that year and 1994 as well. That still makes me right 96% of the time.
How long have you been sitting on the sidelines? Honest.
June 13th, 2008 at 7:28 pm
Thums down-2. Did you forget to take your lithium again?
June 13th, 2008 at 7:24 pm
Hey Satv, What , no comment about todays Global news? Come on, lets hear your side of this.
June 13th, 2008 at 7:22 pm
If you can afford it and your life situation is stable, then it is always a good time to buy
You’re saying that it was a good time to buy in 1981 before a 45% nominal drop and major recession?
Bwahahaha.
All I can say is that if you think it’s a good time to buy now, get out and buy, sucker. Let’s keep that excess supply flowing.
June 13th, 2008 at 7:22 pm
umdesch4 Says: Can somebody explain to me how that graph plus-this graph-and this graph.
Umdesch4,
Housing stats are not that many when it comes to months and years of completion, for your kind information those are already sold.
Resale Inventory:Paul b is not a rebgv himself so we don’t really have to accept those fake numbers unless we get direct access to their official site because there is no official to take the question. anyway for your kind information you will be surprised in few months to look for the same numbers,those resale listing does not make much difference because those are already under owners care.
Drachen actually nothing for you but yeah if anybody else need more information how to read the graph please contact my math teacher BDK and for discription of the graph please contact my english teacher SOFIA but that graph it self explain every thing what bear don’t like to see and hear Strataman actually nothing.
June 13th, 2008 at 7:17 pm
Nuts? Nope.
Have a look at slide 52. The years that dropped were generally smaller than the prior years gains. The only exception to this was the 95 correction, which gave up about 18 months.
http://www.bcrea.bc.ca/economi.....hCheck.pdf
If you ignore the small blip in 1992, prices went up for 10 years between 1985 and 1995 (see slide 37).
My point is that if you sit out of the market for more than 12 to 18 months, then the past corrections would predict your timing was bad.
You mortgage amount drops over the term you make payments… dummy. It doesn’t increase with inflation.
June 13th, 2008 at 6:55 pm
Lead story on Global BC… Foreclosures are up!
http://www.canada.com/globaltv/bc/index.html
June 13th, 2008 at 6:38 pm
Dave “Let me explain…If you go back through all the data in the last 40 or 50 years, you will see that most corrections have given up about 1 years worth of gains.” Your joking right? Anybody who can read a chart or spreadsheet can see that your statement is nuts, you generally gain around 3.5% – 5% across two decades so if you gain 15% one year you gotta make up – 12 % some other time in a year. And your kidding about mortgages that don’t go up with inflation right? Nobody who buys a place can be that stupid!
Can they? 
June 13th, 2008 at 6:29 pm
Ummmm.. no duh Drachen (RE: real estate =/ stocks)
Was that not my point (i.e. the correction being proportional to the rise)? In the case of Vancouver real estate, my review of the data has shown that the market usually only takes back 12 to 18 months of gain.
That’s not the BOC policy. The policy is to target inflation AT 2% and keep it between 1 and 3%.
My point (and you keep missing it), is that inflation exists and will continue to do so. That means, the total amount of your mortgage goes down in inflationary terms.
June 13th, 2008 at 6:22 pm
Here’s a link to the Global TV piece:
http://www.canada.com/globaltv/bc/index.html
June 13th, 2008 at 6:19 pm
As far as technical terms / theme songs, I still prefer my my favorite David Bowie song “Turn and face the strange c-c-c-changes”
June 13th, 2008 at 6:17 pm
Dave
“If you go back through all the data in the last 40 or 50 years, you will see that most corrections have given up about 1 years worth of gains.”
Umm we’re talking about Real Estate here, not stock markets or anything. In Real Estate as with most commodities the prices tend to fall the inverse amount they went up in the bubble.
You really don’t know anything about this stuff do you? Do you know how the BOC sets the key interest rate? Their mandate is to keep inflation below 2%, if inflation rises or looks like it will rise they raise the rate. When inflation is low they can lower the rate.
June 13th, 2008 at 6:07 pm
Burden, don’t be a dummy.
Of course inflation and interest rates are correlated. All I said is that they are two different things.
If inflation runs at the rate is has in the last 5 to 10 years, then interest rates will likely remain stable. That means when you renew, your monthly mortgage costs are the SAME in nominal dollars. In the meantime, your wages have gone up (say 15%).
June 13th, 2008 at 5:57 pm
Foreclosure property lawyer (credible local expert) also said he didn’t become a convert bear until October/November when business started to pick up. Also said he is hiring staff (more than one) because he needs help to keep up.
I wonder how many “speculator trifecta’s” are out there – 0 down, 40 yr amort, and variable rate mortgages.
Too the moon Alice, too the moon!
We should set a date place to “out” ourselves … us Bears that is … A year from now? When the Sun admits the market is down X%?
Bear costumes? We’ll invite all the disgraced pimps …. it’ll be fun!
June 13th, 2008 at 5:50 pm
Here’s the executive summary for satv/thumsup or whatever he’s calling himself today
“He said that it’s unlikely that Vancouver will see exceptionally high office towers because the business market in Vancouver isn’t strong enough for that. Vancouver has no head offices and much of its office space goes to companies leasing relatively small amounts of space.”
NO HEAD OFFICES
BUSINESS MARKET ISN’T STRONG ENOUGH
RELAX YOUR BRAIN MUSCLES AND SELL BEFORE IT’S TOO LATE!
June 13th, 2008 at 5:50 pm
What do you think about this one, “Beeeeeeeeeeeeeeeeeeeeeep!” As in, “flatline” the market is dead! Not as catchy, I admit.
June 13th, 2008 at 5:47 pm
I don’t like stealing other people’s lines, but there is a technical term that one of the posters uses which describes the current situation very well.
tick tock, tick tock, tick tock
June 13th, 2008 at 5:29 pm
I hope you all caught Global News tonight at 6pm. Here was a recap in case you missed it, it will probably be on their site later.
1) Foreclosures up at least 50% in Vancouver YOY (local expert believes the US type crash is coming);
2) Mortgage rates on the rise.
Gave me goosebumps. The first story had a bit on a home that the owners had 2 mortgages and could not keep up any longer. They bought it for $700,000 (+) it was assessed at $719,000 last year and through foreclosure sold for $580,000.
Nothing to see here, we’re back to normal now. Carry on. Buy buy buy! LOL! Have a great weekend! Hopefully we get some sun in June-uary.
June 13th, 2008 at 5:23 pm
“Obviously, more and more of the bike-path highway costs are going to be shouldered by today’s Vancouver property owner.”
I agree. Why would any business locate in Vancouver? You force your employees to live a 40 minute commute away. You force them to pay through the nose in gas. Hardly an attractive employment proposition. You pay outrageous real estate prices. Expect more business to go the way of microsoft.
June 13th, 2008 at 5:23 pm
inflation and interest rates are two different things.
You really don’t see the connection between the two?
Good luck with your investments fella!
June 13th, 2008 at 5:19 pm
Inflation causes interest rates to rise. This is called a causal connection. It is logic. I can see how you would miss that …
June 13th, 2008 at 5:06 pm
Burden, inflation and interest rates are two different things.
Try again…
June 13th, 2008 at 5:01 pm
Sorry, what about me?
The fact that I just bought a house (against all common sense), or that I think there’s going to be a correction coming, and it’ll probably be substantially more than 10% (especially for condos in downtown Vancouver) ?
June 13th, 2008 at 5:00 pm
City planners recognize the need for business! Oh what an insight. The planner even admits there is little demand for office space.
I wonder why!
I can only shake my head. We have chased out all the large firms such as Microsoft so that primarily Mom and Pop stores are left to pay “business taxes”.
Obviously, more and more of the bike-path highway costs are going to be shouldered by today’s Vancouver property owner.
While we can only hope things don’t play out like Montreal 1976, I am beginning to fear the worst in terms of local taxes.
June 13th, 2008 at 4:54 pm
“Who cares about ‘real prices’? I haven’t heard of anybody buying a mortgage that goes up with inflation. You buy a house in nominal prices and pay back your loan in nominal prices. Inflation works in the purchasers favour.”
You must be joking!
Unless you have a 40 year fixed rate, which is likely not the case, your interst rate resets every year or two or five or seven as your mortgage term ends.
If inflation is higher in the future, your rate will be higher when your mortgage term ends. That is how banks protect themselves against inflation. That is why rates are rising now, incidentally.
Therefore, inflation does not work in the buyer’s favour. You pay higher intesrst rates when you refinance.
Did the bank forget to tell you this?
June 13th, 2008 at 4:52 pm
Have fun trying to time the peak.
I don’t need to time the peak to know this: my family income is above the supposed average in this city and will only buy me a small shitty condo unless I’m willing to go for a forty year loan and put my financial future at risk. There are many other places where I can earn more and pay less for housing. I like Vancouver fine, but I’m not opposed to moving away.
At present I see no reason to buy here, do you? I’m talking about right now with the market the way it currently is.
June 13th, 2008 at 4:49 pm
Stagnate:
This is what prices did in the 1990′s according to the Sauder graph. If this is what you call stagnation, then bring it on! I’d call it a bust,, by the way. But who cares about sematics. You can call it a the age of aquarius if you want.
1991- $360k
1995 – $500k
2001 – $380k
June 13th, 2008 at 4:45 pm
Who cares about ‘real prices’? I haven’t heard of anybody buying a mortgage that goes up with inflation. You buy a house in nominal prices and pay back your loan in nominal prices. Inflation works in the purchasers favour.
June 13th, 2008 at 4:32 pm
the bust in the early 80′s gave back 75%, no correction, that was a bust precipitated by 20% interest rates. in the 90′s the market was choppy, but could be best described by the word stagnation.
June 13th, 2008 at 4:27 pm
Sorry Dave. This is the happiest I’ve been regarding Real Estate since I moved back to Vancouver from the US in 2005.
I agree it’s foolish to time any market. But it’s also foolish to purchase an asset you can’t afford.
I also think there are many real estate investors in California, Florida, and Nevada that currently wish they’d only given up 10%. Wasn’t Los Angeles off 19% YOY last month? If you only put down 5%, 19% kinda hurts. San Diego 20.5% off. Las Vegas 26% off….
June 13th, 2008 at 4:18 pm
Im looking at real rather than nominal prices.
June 13th, 2008 at 4:16 pm
“Let me explain…If you go back through all the data in the last 40 or 50 years, you will see that most corrections have given up about 1 years worth of gains. If (big if) we have a price correction anytime soon, it will probably only give up 1 year (i.e. 10%)”
This is completely wrong. Look at the graph on the Sauder website (link below). The busts in the early 80′s and late 1990′s gave back at least 75% of the gains made during the boom. Where do you get your misinformation from?? Post a link to back up your statement.
http://cuer.sauder.ubc.ca/cma/.....couver.pdf
June 13th, 2008 at 4:13 pm
burden of proof: true enough, but consider umdesh. then consider that for every one burden of proof there are nine umdesh’s.
June 13th, 2008 at 4:05 pm
Here is a comment from the CBC story. Hilarious!
“How can this be – I was told that real estate only goes up in price and this boom was different from the last one in that it would never stop.
With house prices going up at 45% per year forever, I was hoping to sell mine in about ten years and buy Australia.
I guess I’ll have to invest in energy stocks now as I heard the price of oil is going to $1,000,000,000,000,000 per barrel in 2010.
Best regards
Born Yesterday”
June 13th, 2008 at 4:04 pm
Vanguy, if that’s the happiest you have been in a LONG time, then you obviously bet wrong.
Let me explain…If you go back through all the data in the last 40 or 50 years, you will see that most corrections have given up about 1 years worth of gains. If (big if) we have a price correction anytime soon, it will probably only give up 1 year (i.e. 10%), assuming history to be a guide. Have fun trying to time the peak. Best case, your gain in 10%.
If you have been sitting for more than a year, then chances are you will have made a bad decision in hindsight.
Trying to time real estate is stupid when it is for your primary home (IMO). If you can afford it and your life situation is stable, then it is always a good time to buy. Investment is a different matter.
June 13th, 2008 at 4:03 pm
I heard Concord has slowed construction at their Cooper Pointe development… Trying to help slow the tide of inventory?
June 13th, 2008 at 3:59 pm
And, while I’m in coco mode, CBC has the story as:
Canadian real estate boom over, statistics indicate
http://www.cbc.ca/money/story/.....house.html
I’ve been looking for that headline for a long time. Feels almost like VE day.
June 13th, 2008 at 3:48 pm
Wow! 1000 listings in 9 days….and so many units yet to complete. This is the happiest I’ve been in a long time…
Not even 40yr amort, and 5% down can stop this thing now…the train has definitely left the station.
June 13th, 2008 at 3:13 pm
“a large percentage don’t like renting under any circumstances.”
Unless owning makes no financial sense. We are currently seeing a rush to the exists because capital appriciation is basically at an end. Negative cashflow, no prospect of capital gains = no reason to own. What comes next is the standard bust with prices falling in the double digits.
June 13th, 2008 at 2:44 pm
true enough burden of proof, but a large percentage don’t like renting under any circumstances. shelter being a necessity they have to go one way or the other.
June 13th, 2008 at 2:41 pm
And yet, in the middle of that wonderful doom-and-gloom article, we *STILL* get quotes like:
“However, we believe that the sector will remain in reasonable shape, and will avoid any U.S.-style housing correction.”
I guess the word “reasonable” is pretty broadly defined.
June 13th, 2008 at 2:18 pm
Rob, Satv: this one is for you,
From one of the Pope’s links:
http://www.newstatesman.com/ec.....ng-british
But the truth is that you can hardly give these flats away. A two-bedroom flat, bought for £215,000 in September 2005, recently sold at auction for £79,000; another went for £86,000. Nine others did not sell at all. “Live the dream,” said the promotion for these developments; wake up to the nightmare of negative equity.
But your theory is that negative cash flow and negative equity is a good thing right?
And the shortage of land thing….
June 13th, 2008 at 2:09 pm
I should say “the greatest capital inflows to mutual funds IN HISTORY happened in February (could be wrong about the exact month) 2000, the month before the stock markets crashed.
June 13th, 2008 at 2:09 pm
“a big issue is to what extent a change in psychology affects demand.”
Where asset prices are concerned the psychology of demand is that the higher prices go, the more demand there is. Yes, this is paradoxical but it is true. Most people are stimulated to buy by rising prices because they fear missing the boat.
It is a fact that the greatest capital inflows to mutual funds happened in February (could be wrong about the exact month) 2000, the month before the stock markets crashed.
Who wants to buy an asset that is shrinking in price?
June 13th, 2008 at 1:54 pm
lynchfan, indeed at 5-10% correction levels it would bring more potential buyers into play. developers will have cut back on new product because of the uneasy downside risk. inventory will stabalize or possibly shrink. that may be it. it is a given the real estate industry will spin it as the perfect time to buy. the potential buyer are out there, a big issue is to what extent a change in psychology affects demand.
June 13th, 2008 at 1:36 pm
Markets with the largest decreases in sales: Saskatoon (-37 per cent), Edmonton (-35 per cent), Calgary (-33 per cent), Greater Vancouver (-31 per cent), Regina (-28 per cent).
Yes but were not first!
June 13th, 2008 at 1:29 pm
“And we made the national news! In that link dingus posted we’re in both the top listings increase and top sales decrease. Go Vancouver!”
It really, really, is different here.