Welcome!
VancouverPeak.com- jesse and Makaya are now friends
- jesse replied to the forum topic Sandbox. in the group Housing Data
- jesse posted an update: CMHC starts, completions and under construction in Vancouver […]
- The Ant started the forum topic BC Population Growth in the group Housing Data
- jesse and The Ant are now friends
- jesse and wreckonomics are now friends
- wreckonomics posted an update: New Year, New HPI. ”Selection Broadens and Demand Eases to […]
- Best place on meth and admin are now friends
- jesse and Best place on meth are now friends
- jesse replied to the forum topic February 2012 Daily Numbers in the group Housing Data
Wordpress theme by Abhishek Tripathi of Mediawick Digital Solutions
June 21st, 2008 at 9:11 pm
The great majority of Canadians have no net assets outside of their houses and pension plans. None.
WTF. If you have a house and an income that’s not enough? Holy Hanna! What next?
Considering that 3/4 of the planet lives on $2 a day or less, that looks like somewhat of a high-class ‘problem’.
June 21st, 2008 at 9:01 pm
OT, one of original posts…
Real estate pounded by skyrocketing gas, food
Most basic of household finances putting the squeeze on housing sales
Derrick Penner , Canwest News Service
Potential homebuyers are becoming worn down by rising fuel and food prices
In the words of Ralph Cramden – Hardy Har Har.
Potential homebuyers aren’t becoming worn down by the the obscene prices of real estate, oh no. It’s actually fuel and food that’s taking down the housing market.
Thank gawd for the internet so we can save these pearls of wisdom for future generations.
June 21st, 2008 at 8:55 pm
I’m confident there is a sizable amount of people with mortgages that fall under the same umbrella.
Are you joking? Canadians are carrying record levels of debt, and BC has a shocking -8% savings rate.
The great majority of Canadians have no net assets outside of their houses and pension plans. None.
June 21st, 2008 at 8:53 pm
Is now a good time to INVEST in real estate?
Like many things… it depends.
There are still some good deals out there with good cap rates. Pretty much nothing in downtown Vancouver, but if you look outside you can find it.
Nice try at guessing my profession, but once again the speculation is wrong. Definitely not a realtor.
June 21st, 2008 at 8:41 pm
“You absolutely MUST be a realtor, because that sounds so Chipmanesque, it is eerie.”
Freako, I came to the same conclusion;, I wonder, if this guy will soon start to explain the Chipman Theory of how Negative Equity and Negative Cash Flow is a sound investment strategy.
June 21st, 2008 at 8:09 pm
My opinion is that it is always a good time to buy if you: a. can afford it; b. plan to own for a least a moderate term (5 years); c. have economic stability; and, d. have found a product you desire. If you meet all those metrics, then a potential downturn has no effect on you. Rather, things get better over time as inflation increases your wages and as you build equity.
You absolutely MUST be a realtor, because that sounds so Chipmanesque, it is eerie.
Let’s rephrase the question:
Is now a good time to INVEST in real estate?
June 21st, 2008 at 8:06 pm
Thanks for the kudos Warren. It definitely takes patience.
Patience? As in “it takes these thick bears some time to grasp my well reasoned arguments? Isn’t that a wee bit condescending?
I will be looking forward to your commentary is RE implodes all around us.
June 21st, 2008 at 6:32 pm
Me2:
I agree the 19,000 listings nor is the 25,000 starts quite the right number to consider. I think you are trying to say that the new stock of properties is not growing fast enough to accommodate population growth (i.e. new stock of people) assuming we remain at same density levels of 2.2 people per unit.
I looked at mohican graphs (see post in May) from cmhc which says that there were about 19,000 units completed in 2006-2007 (hopefully I am reading them correctly). The Vancouver population grew from 2,221,613 in 2006 to 2,249,725 in 2007 (estimates from gvrd) for an increase of 28,112. Assuming an average of 2.2 people per unit as you suggest gives capacity for 41,800 people, suggesting supply outstripped population during the period 2006-2007.
June 21st, 2008 at 6:07 pm
I could buy now, easily, but I dont think it is a good time to buy or I could word it:
Yes now is not a good time not to holdoff or how about: yess its mine! all mine! my money that is, not the banks, not some specuvestor hoping for the lottery..uum a buyer i mean.
June 21st, 2008 at 6:00 pm
And yes it’s pretty about 10 days a year.
Yes, Parksville is pretty around that time frame but it’s the other 355 days of fog/rain where it cannot to be confused with California/Hawaii/Arizona/Mexico.
Just because it happens to be in ‘Canada’ doesn’t make it special anymore.
June 21st, 2008 at 5:30 pm
I don’t know about others but in my circle of friends/acquaintances we all have mortgages but with no need for them. I have been investing the banks money the last 5yrs because the interest charges is less then what I’ve been averaging on investments. If interest rates begin to climb I simply cash out my investments and become mortgage free again pocketing the difference I’ve made. I know we’re not in the majority here but it is quite common. I’m confident there is a sizable amount of people with mortgages that fall under the same umbrella. Weather they’ve borrowed from the bank to invest or they’ve been investing their money instead of paying off their mortgage instead. As it currently doesn’t make sense to pay off a debt that’s being charged less then you could earn.
June 21st, 2008 at 4:47 pm
hey nutslap! yeah don’t worry about my credit entials! flip that superstar nutbagger! yeah just package up rocket for trucking to launcher!
June 21st, 2008 at 2:58 pm
Krissh/Browntown/thumsup/informer/dumhead
Please provide a clear list of your credentials as to why you have expertise in anything to do with Vancouver other than lifting boxes.
June 21st, 2008 at 2:53 pm
I’m BluesMAN, not BlueSKIES, just for the record
I’m a first time poster hence the confusion. No hard feelings.
Thanks to all here for your enlightenment over the years, btw.
At the auction there was only one bid from the Richmond room of about 50 people (probably half of those were involved in the sale). Only one lonely bid from an elderly gentlemen. When he didn’t bid a second time the auctioneer asked him why he wasn’t bidding again and he replied “Prices are too high”.
The auctioneer really tried to pump the bids with comments like “Prices are only going up”, “You’ll never get a deal like this again”, “You’ll go home and regret that you didn’t bid on these units”… and so on. Ad nauseum.
LOL
June 21st, 2008 at 2:43 pm
hey, blueskies, they paid way too much.
I was in the Parksville area recently, and I can tell you there are for sale signs everywhere, for miles in either direction of the Island Hwy. literally thousands, some of the signs have been there so long the grass and weeds are starting to cover them.
I wonder if the buyers know the economy in the area is based on bed and breakfast businesses, and tax right off schemes, seems everyone there is a “consultant” working out of their house.
And yes it’s pretty about 10 days a year.
June 21st, 2008 at 1:58 pm
Hey folks,
I just went to the auction at River Rock Casino in Richmond where they were auctioning the 5 condos from Parksville (Onyx at Craig Bay) and the bidders were either at the Richmond location, a Parksville location, a Calgary location, on the internet or submitted a bid by proxy.
It turns out the first unit listed at $545,000 went to a Parksville bidder for $480,000 (12% haircut), the next one listed at $535,000 went to a bidder for $380,000 (a 29% haircut), the next one listed at $435,000 went for $350,000 (20% haircut), then next one listed at $425,000 went for approx. $325,000 (memory failed on that one–approx. 23.5% haircut)and the last one listed for $425,000 went for a mere $280,000 (a 34% haircut).
Two went to Parksville bidders, two to Calgary and one to an internet bidder.
June 21st, 2008 at 12:53 pm
hey nutslap, schillers know less about vancouver than you nutbag! maybe he miss all the immigration from miami! yeah when all the talk get bad maybe bottom is in! rocket going up!
June 21st, 2008 at 12:34 pm
POST #79 Anonymous said:
Retail sales rebound
http://www.cbc.ca/money/story/.....etail.html
Inflation is up to 2.2% from Aprils 1.7% a difference of 0.5%.
The story shows 0.6% rise in retail sales.
Hmmmm, too easy to figure this one out.
June 21st, 2008 at 12:19 pm
As to realtor Dave (or are you Dave Learyhay?),
The biggest indicator to me is market psychology, which right now is dismal.
I make it a rule now to not ever bring up RE and participate in discussions on it as I have been hammered for it the last three to four years. This makes conversations about RE genuine, and not influenced in any way by my thoughts on it as I am simply a listener.
There has not been one positive comment on real estate this year so far, other than from those who have unloaded property and are thanking their lucky stars.
This is a far cry from even just last year where comments were of the positive variety.
June 21st, 2008 at 12:11 pm
Is this the evidence you were talking about Krissh?
http://www.theglobeandmail.com.....ry=shiller
June 21st, 2008 at 12:05 pm
Bottom line: houses appreciate with inflation in the long run. That’s it.
Not quite Booya. =)
There is property taxes that must be paid. There are repairs, maintenance, etc. The interest on your HELOC if applicable. The interest on the mortgage. Lost interest/investment income on the outgoing monies. etc, etc, etc.
If this is factored in, then the costs most probably are negative to inflation in the long run.
June 21st, 2008 at 11:57 am
The US is already rebounding
Would that be the same US that has just recorded the biggest YOY % decline in prices ever, including the Great Depression?
What’s your definition of “rebound” anyway?
June 21st, 2008 at 11:23 am
hey nutslaps! i check with government they confirm still have printing press and halocopter! next bubble-figuring out how to make more land! ha ha ha lunch time! dave hand drachen lunch again!
June 21st, 2008 at 11:21 am
“I’d pretty confident that most of them are occupied by someone, so where will they live after they sell?”
Yes most, but a significant minority are vacant. Just check VOW. I’m only guessing but I wouldn’t be surprised if at least 30-40% of units on the market are vacant. It would be interesting to an investigation on VOW to see what the percent really is. One thing I noticed is some listings say owner or tenant occupied but the pictures show empty rooms.
June 21st, 2008 at 11:12 am
Shiller, I might add, is arguably the world’s foremost authority on the global housing bubble. He has not only proven that house prices track inflation, but also correctly identified the US housing bubble and predicted the ensuing crash we are now seeing.
He is also on record as saying that Vancouver is “the bubbliest city in the world”.
Is that enough data for you?
June 21st, 2008 at 11:01 am
So let me get this straight Richard there are 19000 units for sale plus 25,000 more under construction so that means there’s a huge oversupply?
The 25,000 under construction won’t complete in any given year, mult-family units take 2-3 years to complete. Let’s be generous and say we have 10K completions a year. That can house 22k new people at the standard 2.2/household. Population is increasing at a higher rate then that. Even if the population percentage increases aren’t at all time highs, the number of actual increases is still very high.
So we’re still back at 19K on the market, are you assuming all those units are empty? I’d pretty confident that most of them are occupied by someone, so where will they live after they sell? They will either have to buy or rent somewhere, so in your best case scenario they all decide to rent and not buy, that would put some downward pressure on prices temporarily, but upward pressure on rents which in the long term will put upward pressure on prices.
June 21st, 2008 at 10:58 am
“I haven’t seen data to suggest that real estate only performs at inflation. Not even the worst of the bears in this forum believes that.”
Have a look at this graph from Yale economist Robert Shiller:
http://en.wikipedia.org/wiki/I.....ig_2-1.png
Look closely at the red line: it shows inflation-adjusted house prices for the last 100 years. Aside from a dip between the Great Depression and WW2 and the insanity of the last 5 years, and you can see that prices have not exceeded inflation in all that time. This graph goes to 2005, the top of the US market. Anyone with an open mind could see that it was predicting a massive crash in the US, which – tada! – is now happening.
Bottom line: houses appreciate with inflation in the long run. That’s it. There is no added value in a house, unlike a stock which is backing a company that is actually producing something.
Van Man has it right: “Apple Inc and RIM both come to my mind. “Homes” DO NOT increase in their intrinsic value, they never do.”
June 21st, 2008 at 10:33 am
“Whereas renters lease into a community and have no desire to plant or associate themselves in the community.”
I don’t know where you got this from. Renters actually have time to volunteer, or just be out and about, because they aren’t mortgage slaves.
One thing I notice about homeowners is how quickly their world shrinks to their property (always doing this and that around the house). I was actually like that too when I was a homeowner. Even if you aren’t renovating, the house and lawn are always demanding your time.
“There’s nothing wrong in being renters and if you don’t have kids, there’s not a huge necessity to buy.”
Hmmm you seem to suggest renters care less about their communities.
I spent the first eight years of my life in rentals, and I seem to have come out alright. Around the ages of 5 to 7, I lived in student rental housing at UBC. What a great place to be a kid. Friends everywhere and so much to do.
June 21st, 2008 at 10:24 am
anonymous #120
Are you seriously going to trust Dave?
No, what he is saying does not fit with what i am seeing.
Now is not the time to buy….
I know i should not be playing with the troll but they look so cute when you dress them up like a realtor…. awwww
June 21st, 2008 at 10:20 am
Hillary
“I haven’t seen data to suggest that real estate only performs at inflation. Not even the worst of the bears in this forum believes that.”
Well the data is there but only a moron would believe in limitless exponential appreciation. It’s simply not possible without an infinite money supply.
Let’s do some simple math (something you apparently have a lot of trouble with).
A house costs $100,000 in real dollars today. It appreciates at 1% above inflation for 1,000 years. Oh look it would cost 2 million dollars! I think we can agree that $100k housing is for the decidedly poor yet they’d have to be a millionaire (in today’s dollars!) in 3008 to afford their run down trailer home!
Is that clear enough for you?
June 21st, 2008 at 9:59 am
blueskies
Are you seriously going to trust Dave?
Based on Dave’s very first post #21, the person has severe flaws in math let alone economics.
Per Dave: “… Secondly, the condo market has gone up 10% in the past year. In order for developers to lose out, the market would first have to drop at least 10 to 15%.”
More accurate calculations would be: If something has gone up 10%, it needs to go down only 9.1% to return to the base level.
Thanks, Dave. Your first post helped me skip all your further vain attempts and save my time.
June 21st, 2008 at 9:50 am
Agreed Van Man.
Too bad that’ll whizz right over the peoples heads who need to understand it the most.
Dave you’re wrong:
The retarded warehouse worker will be unable to obtain a mortgage, unable to carry the $2,000 spread between a rental if he could get a mortgage (his Mum co signs for mortgage or what have you) and he walks away losing the 20% deposit. If you can now pay 80% of the original price then there has been no appreciation and there are lost opportunity costs too. A buyer who manages to get out now could start investing in the next bubble , Green Tech.
I’m talking about sub average buyers who’ve overextended themselves buying pre sales that have not completed yet with the intention of flipping” and making “easy money”
Don’t try to turn this around and talk about developers.
June 21st, 2008 at 8:11 am
3 RE anecdotes from my workplace:
#1) A self-proclaimed ‘flipper’ has been trying to flog a SFH in Pt. Moody for the last six months. He finally took it off the market 3 weeks ago. He made no price reductions cause he can’t afford to; he ‘owns’ a BMW M3, a Harley and a ’08 f150, and he was working on his taxes at work and he had borrowed extensively from his RRSP to just maintain his ‘lifestyle’) When I asked him if his house had sold he replied that he wa taking it off for a couple of months and he’s going to put it back on when the Market ‘heats up’ again. In the meantime, he is trying to rent it out because he kicked out the previous tenants to do some renos before selling. No luck there either; few calls, and very little interest.
#2)Two guys I work with bought an older townhouse together in North Burnaby for a quick flip. They felt that it was underpriced and with a few quick reno’s and some sweat equity, they could turn it over for a tidy profit. After a kitchen and bathroom reno, they put the POS on the market for 60,000 more than they paid. Open house after open house the thing just sat. They took it off the market, and decided to do a major gutting of the rest of the place, and then rent it until things heat up again. They are a little worried because the strata is one unit away from reaching the rental limit. They are just hoping that they can get the reno finished before someone else in the complex decides to convert their place to a rental.
#3)Another dude sold his house Pt.Moody, just up the Hill off the Barnet for the High 900′s. They bought a lot in coquitlam and are in the midst of building a new hoouse, which will be worth 1.3 million (his estimate). The builder is building a spec home beside their lot, which he plans to sell. The guy I work with is watching that closely as he wants to buy a Porsche 911 with a HELOC ( if the hose sells for significantly higher than his estimate of his homes worth, then, by extension, his home is worth a lot more money and he can aford the car) Well the other house is sitting. Interestingly, this guy and I were talking with a consultant that we use from Santa Barbara; He bought his house for 1.2 million two years ago, and it overlooks the pacific and is just gorgeous. When my workmate heard that, I think he started to understand how f’ed up things are when homes in Coquitlam are more expensive than homes in Santa Barbara!)
Interestingly, I do not think RE is a poor investment at all, and I have done well buying and selling homes over the last ten years. Presently, I rent in Vancouver and own a nice home in a small town just outside Penticton that is known for its boutique wineries. I am not a cranky Bear, just someone that feels that RE in BC is headed for a serious downturn. We’ll keep our house because it really is our Principal Residence, and it has been paid off for some time now. Would I buy in this market? Not a chance.
June 21st, 2008 at 7:49 am
PUMPKIN SHILLS ALL OF YOU!!!!!
June 21st, 2008 at 7:10 am
……………………………….
……………………………….
,,,,,,,,,,,,,,,,,,,,,,,,,,,,,
””””””””””
………….
[[[[[[[[[[[[[[
Dave:
Real interest rates are still near or below zero, the natural rate of unemployment is still near or below zero, our borders are still open to the rich foreign investors, the mountains, the ocean, the tropical weather-still here, the crime free society, the best place on earth, the Olympics are coming, and Bill Good is still on the radio pimping real estate;however,the listings are piling up.
I think we are headed for a meltdown much more severe than the US , UK , Spain, ect is experiencing now, and much worse than the previous crashes we have had in Vancouver before, but I would like to hear your theory why it’s different this time.
June 21st, 2008 at 7:06 am
I agree with what Dave had to say on his last posting and that is, homes is a good buy and only if you are willing to stay in it for longer than 5 years. There are home expenses like taxes, repairs, carrying costs and interest charges that are unlikely to be recouped during the 5 year tenure, except during this boom period. People buy homes, not because they are buying a piece of architecture marvel or land. They are buying into a community and they have already planned to plant their roots for awhile. Whereas renters lease into a community and have no desire to plant or associate themselves in the community. I think some people on this blog here are content to be renters. There’s nothing wrong in being renters and if you don’t have kids, there’s not a huge necessity to buy. However, there’s a positive inclination in buying a property close to retirement where most people tend to be less mobile than when they were younger.
Having said that, I think Dave is unaware that any bubble is basically a mad chase of one type of asset by old money, new money and borrowed money. This is not an undocumented symptom. In the USA, the Federal Reserve of San Francisco keeps track of it and what it found was that, after the last recession and the last stock market crash, it literally took about 6 years for equity transferring of one asset class (financials, stocks, bonds) to another asset class, real estate. Rich people knows this. It happened from the mid 1960s to 1974. It happened again from the last 70s to early 80s and happened again during the mid 90s and then the early 2000s. In fact if you look at Nasdaq and the general PEs of multinational corporations today, they are priced lower than they were in the early 1990s. Why, because all those money that pushed PE prices higher in the late 90s with Nortel, Global Crossings, etc all went to RE. Guess what, in 2006, the tide has turned in the States and American REs began a downward fall. The housing price index (HPI) shows this. But at 500 to 600 in some states, it will have a long way to fall I believe since it took 20 years to go from 100 to about 220 in most States. Whereas, since 2001, we had risen from 100 to about 250, a 2.5x HPI index increase, which is not that far fetched considering that some American states like Hawaii for instance went up at that same rate multiple as well. Our market is about 2 years behind of the Americans.
Here is the problem. Once our fascination with RE has withered like we did with Nortel and Global Crossings, there will be a massive exodus of speculative money from RE into some other type of hot asset. Nobody knows what it will be, but I can bet rich people like Warren Buffett has already had some dips in it. You will know what it will be and then, more people will be cashing in their chips to buy into this hot new asset class.
It’s inevitable. That’s what happened to the mid 90s RE market. People like Garth Turner promoting reverse mortgage to use the released equity from their homes to buy Nortel and JDS Uniphase in Canada. In fact, the TSE index were controlled by these 2 corporations out of 498 or so companies. That’s the power of so much concentrated money. It’s really funny that in 1992 when Nortel was just a tad of $18, we were the few ones that bought in. We were the few ones that sold them at $128 and made some handsome profit too. Let me tell you the reason why nobody bought Nortel at $18. It’s the same reason very few people bought homes during 1983. The news was so negative, nobody in the right mind would touch any of these asset classes with a 10 foot pool. Dave, you will see this a deja vu phenomena of this again.
You said, inflation increases your wages overtime as you build equity. But you are forgetting that you are building your equity in only 1 asset class. If you are really building equity while inflation is rising, then homes and stocks would rise in tandem. They don’t and history has bear this out. I think it’s dangerous for you to make false assumptions based on fruitless facts. Yes, inflation will increase your wages because the company you work for has directly or indirectly improved their intrinsic value. That’s the beauty of corporations. They make better widgets or produce unique services that can charge you any price they want. Apple Inc and RIM both come to my mind. “Homes” DO NOT increase in their intrinsic value, they never do. Warren Buffett said that.
If ever any asset class that would increase, it would be those multinational corporations that have cash rich war chests that are going to be fairing better in the new business environment of tight credit lending practices. With PE ratios so low, it makes sense to make prudent investment choices.
Houses or homes (whichever you like to call them) are only good as shelter. They are never good as investment properties unless you buy them dirt cheap like you do in 1983 or any of the time line in BC that had depressed home prices. I have never met anyone who said they are extremely happy with their home purchase when they bought them at the top. Most of them are happy once they finished paying the mortgage. Like a marathon runner who’s just happy just to cross the finish. That’s the feeling.
Do not forget that a home is just 1 asset class. You never put everything in one basket, but that’s exactly what most people do anyhow. So what happens if you’re close to retirement and you had little or no savings? You will tap into your home equity to invest in something else. I think that’s going to be the next trend. Out of RE asset class and back into the equity asset class.
By the way, Warren Buffett was called a bear during the internet boom. He refused to buy any of those telecom companies. Now, who’s the wiser?
I like to also address any of Dave’s flawed perception of public and private companies.
Public and private companies are actually the same. There is no difference between both of them, except in the way they report to the creditors or shareholders.
Companies obtain financing through multiple sources of medium. If a company obtains financing through banks and private venture capitalists, they are considered semi-private since while they only have to respond to these private entities, these entities are not always private. Hedge, venture funds and banks all have shareholders they have to report to, and in any financial reports, undoubtedly they will have to report the complete accounting. New accounting rules, after the Arthur Anderson fiasco, has tightened so much that what used to be a one volume of Encyclopedia Britannica for each company has ballooned to multiple volumes which will contain these kinds of information.
Public companies obtain financing through the sale of common/preferred shares and or corporate debenture. Shareholders of these companies have certain, but sometimes limited voting rights. Sometimes, these voting rights can be messy like the current battle between the Biovail founder and its current board through a proxy fight. Blue form vs yellow form or who’s telling the truth. One claiming the company has no new products in the pipeline and the other claiming full pipeline of the past. But it’s interesting to note that, many big companies like Pfizer and Merck have few in any new products in their pipeline and their current existing pipeline are patent expiring as generic makers can make these cheaper. That’s why their shares have been depressed for SO MANY YEARS! Shareholders so no mercy to companies that just sit by on the sidelines and have no new products all all in the pipeline.
However, private companies fair no better either. Private companies have to deal with banks or private investors and these guys are just as merciless as shareholders. Banks have to respond to their shareholders too and to pay these rich dividend to them, it demands that all their loan businesses much perform.
So, I don’t agree with you that private construction companies can just sit by during a downturn and continue to burn cash. In fact, that’s exactly what the Japanese construction companies did the opposite. Even during the RE deflation period, cranes were dotting the skyline of Tokyo building different kinds of dwellings. If you sit by and do nothing, sooner or later your loans are going to be called for. Either you file for bankruptcy or you continue on running your business. Do you see Toyota or Honda sit by the sidelines and stop making cars just because gas prices could go to $2/L or more?
Not a chance. In fact, they’ve been the fortunate ones with a vision to build hybrids. Selling well in fact and depressing the SUV prices in the process. Remember that 8 years ago, SUVs were all the rage? Now, you can pick up a SUV or a gas guzzler at prices that you couldn’t even dream of getting. But would you buy one today?!? That’s the same question you’ll be asking in 1983 about homes.
Here’s the fear. Since builders need to keep building to stay themselves solvent and their employees employed, it means that they will continue to build homes that the market wants. Who knows? They might build lower cost homes — there’s a high demand for them. If they do, you know what’s going to do to existing stock — depress them even more.
June 21st, 2008 at 5:38 am
Yes, it is true in nomimal terms. But in real terms, prices do not change in the long run. Real estate only appears to “appreaciate” because people do not understand inflation. If I have 2X what I had before, but everything costs 2X as much, I haven’t gained anything.
Why is this so hard to understand?
Booya, you have gained equity and that inflation just cut the real value of your mortgage in half.
I haven’t seen data to suggest that real estate only performs at inflation. Not even the worst of the bears in this forum believes that.
June 21st, 2008 at 5:17 am
Someguy said: “Or it isn’t and you guys just can’t deal with it. The US is already rebounding and Vancouver hasn’t even went down yet. Enjoy paying rent.”
Do you have any proof of a US rebound? Everything that I have seen points to worsening conditions in a housing market bust that rivals only the great depression in magnitude.
June 21st, 2008 at 2:01 am
My opinion is that it is always a good time to buy…things get better over time as inflation increases your wages and as you build equity.
Classic realtor-speak throughout, all premised on continued appreciation that won’t continue much longer.
Also, too bad wages aren’t keeping up with inflation.
June 21st, 2008 at 12:18 am
I always liked the “Flippers in Trouble”-style blogs, and often visit these two:
Sacramento Area Flippers In Trouble
Phoenix Flippers In Trouble
One thing I noticed looking at the Sacramento sales and listings history, is that prices are almost back to 2003 levels.
Googleing for “flippers” I stumbled on this new site.
Victoria Area Flippers In Trouble
It might be interesting to keep an eye on its contents, as well as congratulate and encourage its author
June 20th, 2008 at 11:36 pm
ahhh Dave. The amount of time you have spent preaching on the local blogs lately is staggering. It’s a fine example of just how much time you local Realtors have on your hands these days.
June 20th, 2008 at 10:40 pm
One thing I recall from reading stories about the Miami condo disaster was when people canelled their pre-sales, developers would applying their deposits towards the price for any unsold units, effectively undercutting the rest of the market by whatever the deposit was.
Complete BS. Developers sell at the market price regardless of their financial situtation, because that’s the best price they can get, by definition.
This is just a line that the developers were peddling to make buyers think they were gettting “instant equity” buying below the market price because the developers were giving them the benefit of the forfeited deposits. Well they weren’t.
June 20th, 2008 at 10:29 pm
when developers start having trouble selling product at the needed price point they will cut back new offerings. existing product, current construction, etc will be mopped up over time by demand. it won’t be a boom time environment but the demand/supply dynamic will be consistent. 5-10% correction from the adjustment. don’t be bitter towards dave; prepare to either sharpen your pencil, rent long term with a plan, or buy a shovel.
June 20th, 2008 at 10:18 pm
“99.9% of people who have ever bought real estate in Canada have made gains.”
It always amazes me to read things like this. Yes, it is true in nomimal terms. But in real terms, prices do not change in the long run. Real estate only appears to “appreaciate” because people do not understand inflation. If I have 2X what I had before, but everything costs 2X as much, I haven’t gained anything.
Why is this so hard to understand?
June 20th, 2008 at 10:12 pm
“You said, “25,000 more units under construction”. How in the hell can you or anybody not get this doesn’t represent NEW product?”
easily. first of all, the post you were responding to wasn’t even talking about the same numbers you’re talking about. says 19,000 on sale. 25,000 under construction. big supply. you say no it’s not. show completed unoccupied units. big deal. won’t stop the 25,000 from coming on stream. i don’t care if there are only 500 (or whatever number that’s supposed to be) completed and unoccupied. 19,000 + 25,000 is still big. you say it’s not, because you’re talking about something else.
another way to put it. other guy was talking hockey then you start talking baseball. so yes, you lose muppets like me when you talk like that. i’m just not as fast as you are.
and you can WTF all you like. though i wouldn’t recommend it. somebody might come along and wash your mouth out with soap.
June 20th, 2008 at 10:05 pm
Enjoy paying rent.
I’ve got a buddy who’s trying to decide if he wants to sell his condo right now.. He’s made great returns on it, but what if he misses out on more appreciation? plus he’s just found it cost’s $16k in commission to sell and that takes a chunk out of his gains.
Made me feel glad I have cash, savings and investments that aren’t all in one thing.. plus if I have the problem he has (place too small, doesn’t like the neigborhood) I can move without ‘cashing out’ all my investment. I was suprised after all the news about the ‘booming market’ that his gains all-in where less than my savings and investments over the last 5 years.
So did I miss out on the boom? Yup. And you know what, I think I’ll miss out on the bust as well.
June 20th, 2008 at 10:04 pm
but i am seeing with my own eyes:
price reduced and then another
and tomorrow i expect to see another one it is worth waiting to see another reduction the next day….
June 20th, 2008 at 10:01 pm
Enjoy paying rent.
actually rent is a form of being noncommittal
you can up and leave at short notice….
a 40 year mortgage would prevent any
changes on a short notice…you are stuck
June 20th, 2008 at 10:00 pm
the answer i was looking for was:
no now is a good time to wait
tomorrow will bring lower prices
Maybe it will, maybe it won’t. The fact is that the norm is for real estate to go up in price. In the last 30 years, we have only had about 5 or 6 negative growth years. The negative growth years did not go down nearly as much as the periods that real estate went up.
Tomorrow may bring lower prices, but the future will definitely bring higher prices. Basically 99.9% of people who have ever bought real estate in Canada have made gains.
If you think you can beat the market and time things right, then all the power to you. I have to say, that I have heard that line more than a few times though in the last 5 years.
June 20th, 2008 at 9:56 pm
Or it isn’t and you guys just can’t deal with it. The US is already rebounding and Vancouver hasn’t even went down yet. Enjoy paying rent.