Friday Free-for-all!
Friday means open-topic time here at Vancouvercondo.info, so lets do a round up of some stories from the week:
-National housing boom has come to an end
-Rental restrictions dampen market
-Speculator tax a bad idea?
-No easy fix for affordable housing
-Investing for stagflation
-Oil above $140 a barrel
-How will gas prices affect real estate?
-Selling in a changing market: be patient
-Downtown is the place to be!
-BOC Speech on real estate & monetary policy
-Rising rates could slow US recovery
So what are you seeing out there? Post you news links, anecdotes and thoughts here and have an excellent weekend!
note: any conversation on real estate or economics is allowed, please keep it civilized. when posting articles please only quote pertinent points and link to the original instead of pasting the entire article here. Thanks!
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June 26th, 2008 at 11:02 pm
I’m sorry bulls, but this market will be in a freefall soon. Seriously, get out while you can!
June 26th, 2008 at 11:54 pm
My understanding is condo owner-occupiers want to discourage investors mainly because they have different interests regarding the upkeep of the buildings. I have no phobia against renters (being one myself) but if I had to buy in condo it would be in one that was only for owner-occupiers.
June 27th, 2008 at 12:15 am
“Invest in real estate. Though hard to sell in fractions and often lumpy in returns, it has been a good store of value over cycles of as much as 40 years, Mr. Gampel says.”
Idea for children’s book:
‘Mr. Gampel Encounters a Giant House-Lump’
(hedges have to be sensibly priced to start with).
June 27th, 2008 at 1:05 am
“First, central bank policies are different this time. They plan to resist inflation. Second, in the 1970s, workers, who had appreciably stronger unions than today, were able to pass through their costs of living in the form of wage increases. That set off a wage and price spiral. This time it’s different, central banks will fight inflation and accept some stagnation. And the unions now have much less power.”
The collective bargaining agreements of Metro Vancouver city union all expire around 2010-2012. Compounding Olympic project costs, higher food and petroleum prices, expect these unions to demand further wage increases that will result in the financial phenomenon explained by Ms. Croft.
Manufacturing unions may be much weaker but it certainly isn’t the case with government unions which exist as a stealth social welfare system for people unable to find work in the private sector.
June 27th, 2008 at 5:35 am
I wouldn’t be too worried about city unions, they don’t represent too many people in the big picture. Does anybody know when the teachers and various health care workers have their contracts expire? Both of them have an ax to grind with Gordo and friends, and it could get ugly next time.
Although if the joe taxpayer is feeling the brunt of the recession, these groups won’t get a lot of public sympathy.
June 27th, 2008 at 6:10 am
June 27th, 2008 at 6:11 am
“A B.C.-certified high school in China is creating a “Vancouver” resort on a lake near Shanghai, complete with its own Coal Harbour, Robson Street and Royal Yacht Club.”
http://www.canada.com/vancouversun/news … b402ebb296
“Sino-Canada high school describes Vancouver as the “city of heaven” with beaches, lakes, forests and a mild climate that make it the first choice for holidays and immigration. “
June 27th, 2008 at 6:27 am
June 27th, 2008 at 6:31 am
June 27th, 2008 at 6:59 am
June 27th, 2008 at 7:06 am
My coffee was close to being one with the monitor. Very funny stuff.
June 27th, 2008 at 7:43 am
Demanding and getting are two different things. Remember public sector unions have less bargaining power than their private sector counterparts, because when they go on strike it improves their employer’s financial position - the tax revenues keep coming in but the wages stop going out.
Add a protracted recession and the unions, both public and private sector, are going to get squat for some time, just like in the 80’s.
Oh yes and that’s bearish for BC RE.
June 27th, 2008 at 7:44 am
June 27th, 2008 at 7:52 am
And it’s better than going toe-to-toe against other cities for “world class” status!
June 27th, 2008 at 8:19 am
“Manufacturing unions may be much weaker but it certainly isn’t the case with government unions which exist as a stealth social welfare system for people unable to find work in the private sector.”
Huh? Put together a sentence that makes sense, please - or fine tune your thought. A public sector union is a “social welfare system?”
June 27th, 2008 at 8:23 am
Precisely. In fact govt. employees took a pay cut in the early 80’s because the alternative was significant layoffs.
June 27th, 2008 at 8:33 am
Here we got back to the above saying actually who ever come to visit downtown looks like they don’t like to go back that’s why now Vancouver is fueled by external dollars and high net worth individuals,During Expo 86.Population of downtown 40,000-We are now at a population of over 85,000.Population projections at 120,000 by 2020.Some people think we are not even world famous while robson street has it’s own slogan runing from decades called
“World famous shopping promenade worlds best Robson street”
June 27th, 2008 at 8:41 am
Vacationing in Chernobyl?
June 27th, 2008 at 8:44 am
June 27th, 2008 at 8:51 am
No other city in the world has artists on the street that will draw a beautiful charcoal portrait of you while you wait. I mean I assume this to be true, I’ve never been to another city. Why would I need to with all this culture here?
June 27th, 2008 at 9:19 am
June 27th, 2008 at 6:59 am
I think it’s now clear that the Vancouver real estate market is headed for another round of steady apreciation….I own twelve and I keep them empty and in pristine shape ready for the chinese investor.
James,
Good luck with you 12 properties. Let us know how things are going in a few months.
June 27th, 2008 at 9:44 am
June 27th, 2008 at 10:05 am
Housing drop looming in Canada?
http://www.globeinvestor.com/servlet/st … 7/GIStory/
Happy Canada Day!
June 27th, 2008 at 10:07 am
Housing drop looming in Canada?
“After months of holding fast to the view that Canada will not follow the U.S. into a housing decline, one economist is now raising the spectre of an overall drop in prices north of the border.”
http://tinyurl.com/4383vb
June 27th, 2008 at 10:08 am
June 27th, 2008 at 10:19 am
June 27th, 2008 at 10:25 am
“It’s a bit unnerving to see how Canadian performance is beginning to look like that of the U.S. two years down the line,”
June 27th, 2008 at 10:37 am
June 27th, 2008 at 10:44 am
June 27th, 2008 at 10:51 am
I thought that when people don’t buy houses, the price of houses goes down.
But some people here think the price will keep going up. What gives?
Some people say prices will stagnate. That would make sense if inventory also stagnated. But if you took economics 101 you know that supply going up with demand going down means lower prices. I mean, you learn that on the first day of university.
June 27th, 2008 at 10:53 am
For the simpler folks here (Krissh/Satv/Matt/Dave/Thumsup?warehouseworker1234) this means sell for whatever you can get today or lose hundreds of thousands of dollars in equity and thousands every month on “vacant pristine” or tenanted units.
June 27th, 2008 at 10:56 am
Agreed, but the trolsl here (it calls itself Krissh/Satv/Thumsup/Informer?browntown) it thinsk calculators are useless and economics is fake. He’s said all this stuff if you check the archives. He is eitehr kidding or just an idiot and it thinks increasing supply, lower sales, negative equity and negative cash flow are good things. Just ask it it posts the same incoherent jibberish everyday. See “The Krissh Post” in the forum section for a warning on this clown, whom the Vancovuer Sun called an idiot!
June 27th, 2008 at 11:14 am
Yeah well I have 1200 condos. chinese investor will pick mine over yours for sure since mine are in double super crazy mint pristine shape. So there.
June 27th, 2008 at 11:18 am
Uh huh. You wouldn’t be trying to unload a few properties, would you Tony?
Remember: don’t panic, but if you’re going to panic, be the first.
June 27th, 2008 at 11:26 am
Yes, but there also a litany reasons why the Canadian market is NOT different. Low interest rates fuelled a real estate boom not justified by fundamentals like income, it doesn’t matter that we didn’t have a subprime market like the US. Fact is, prices are just too high and can’t be supported by our incomes. Therefore prices have to come down. Simple. And as soon as prices start to stagnate, people will stop buying as there’s no reason to rush into the market. Worse yet, the masses are starting to get the idea that houses are overpriced, so no one’s going to buy until we see a substantial decline to affordable levels.
Confused-Exactly!!! I still don’t get those articles that point out high inventory, then say things like “but don’t worry, we stil project a 5% increase in prices this year” Sure, maybe THIS year as only the high-priced houses get sold, but what about next year when the prices have to come down as people NEED to sell?
June 27th, 2008 at 11:44 am
People continue to buy real estate in all markets, both up and down. Houses are still selling, just not at the rate they were in the last couple years which broke all time records. The drop in sales isn’t really surprising to anybody and most predicted in would happen this year.
I thought that when people don’t buy houses, the price of houses goes down.
But some people here think the price will keep going up. What gives?
Some people say prices will stagnate. That would make sense if inventory also stagnated. But if you took economics 101 you know that supply going up with demand going down means lower prices. I mean, you learn that on the first day of university.
The price of houses depends on many other factors as well. Assuming constant economic factors (e.g. interest rates, stable economy, employement, etc…), then the best way to predict the price appreciation (or depreciation) of real estate is to look at the ratio of total listings to sales. This ratio is better known as Months of Inventory (MOI).
In a tight market (~3 MOI), prices go up, in a balanced market (~6 MOI), prices remain stable and in a buyers market (~9 MOI), prices go down.
To the end of May, the MOI for Greater Vancouver was approximately 6, which is a balanced market. Assuming the ratio remains the same (i.e. ~6 MOI), then prices will likely remain stagnant.
Going forward, prices will be dictated by overall inventory and overall sales. Inventory and sales typically peak at this time of year and drop over the Fall. But once again, the important factor is the ratio. I predict that the ratio will get a little bit worse into the Fall (~7 MOI) which may cause a slight easing of prices.
June 27th, 2008 at 11:52 am
Elephant in the living room? What elephant?
June 27th, 2008 at 12:08 pm
Well it’s taught anyhow. Dave is living proof that you don’t necessarily learn it.
Dave
“Blah blah blah MOI blah blah…”
Umm Dave, MOI is a method to measure supply and demand… So you’ve essentially said, “Well no, it doesn’t just depend on supply and demand, it also depends on supply and demand!”
“To the end of May, the MOI for Greater Vancouver was approximately 6″
I plug in the numbers and get over a 9, what numbers are you using? Sales for may = 1758. Units on the market at the end of may = 17,000 or so.
By the end of this month we should see an 11 or so, so by your methods prices should start falling any day.
But honestly that’s a terrible method, sales fluctuate too much at different times of the year, even in the boom times of 2006 and 2007 the winter months were hitting double digit MOIs but prices didn’t fall then.
“Inventory and sales typically peak at this time of year and drop over the Fall.”
I like how you constantly ignore the fact that this is obviously not a typical year for either inventory or sales. Typically boats don’t sink so there shouldn’t have been any worries on the Titanic after it hit the iceberg right?
“I predict that the ratio will get a little bit worse into the Fall (~7 MOI) which may cause a slight easing of prices.”
As always your predictions come without any information to back them up, just like everything else you put out there. Did the Ouija board tell you that one or have you graduated to Tarot cards yet?
June 27th, 2008 at 12:21 pm
June 27th, 2008 at 12:30 pm
Of course condos will gain 5% a year forever (right Dave?) so, there’s your equity.
June 27th, 2008 at 12:33 pm
Whoopee!
June 27th, 2008 at 12:36 pm
THIS is the real thing!
http://www.videosift.com/video/Ultimate … se-Failure
June 27th, 2008 at 12:43 pm
DAVE: Answer this question with a one word answer (yes or no): Does increasing suppy and decreasing demand lead to lower prices in real estate?
If you spew any gibberish other than the one word “yes” or “no” answer we know you are a BS snake oil salesman. If you ignore the question, we know you are full of crap. Answer the question. I dare you.
June 27th, 2008 at 12:53 pm
June 27th, 2008 at 1:06 pm
June 27th, 2008 at 1:16 pm
Now, you answer my question with a straight “yes” or “no”. I dare you.
June 27th, 2008 at 1:17 pm
June 27th, 2008 at 1:19 pm
BTW, sales are down around 30%. How do you expect to sell “now”????
June 27th, 2008 at 1:30 pm
That being said, take what I and anyone else say with a grain of salt and complete your own research and come to your own conclusions.
Pope, never given you a proper shout out for the site, I love it. It’s my favorite of all the RE blogs. Keep up the great posts, TGIF!
June 27th, 2008 at 1:43 pm
The simplest math I’ve given people is this. Home today worth $600,000 I rent at $1,000 per month. 2 years from now Home drops by $100,000 to $500,000. In that 2 year time I spend $24,000 in rent. Net savings of $76,000 on principal…hmmm.. yea, renting is such a waste of money. Idiots. I have no more sympathy for people who can’t think for themselves.
I leave you all with this: “Most people would die sooner than think; in fact, they do.”