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August 1st, 2008 at 2:28 pm
What is 15% off the average Vancouver house price in dollars?
Well if you take the standard 1 million vancouver special and pay $6,000 per month mortgage plus $4500 in property tax and pretend it’s a perfect year (best place on earth after all) and there is only $1000 in maintenance that puts you at around $6,500 per month plus you’re losing $12,500 in “value” as the price slides 15%.
Alternativelly you can rent an identical house for $2200 a month, which saves you over $4,000 per month and the $150,000 hair cut for the year.
Furthermore it’ll be worse this time, it’s different here, it’ll be worse than Florida when the banks stop writing mortgages on specuvestments unless the buyer has the 50% (or what have you) to make it a neutral cash flow proposition.
August 1st, 2008 at 2:19 pm
What is 15% off the average Vancouver house price in dollars?
August 1st, 2008 at 2:08 pm
“If this is a 1989 style correction, then you should be out there buying up the town.”
Prices fell 15% nominally from 1989 to 1990. You should be out there waiting until the -15% correction happens, then “buying up the town”. If you believe in a 1989 style correction.
August 1st, 2008 at 2:02 pm
Dave
“No they didn’t. If this is a 1989 style correction, then you should be out there buying up the town.”
A) Yes, they did, stop dragging your BS nominal dollars up. It just shows your ignorance of Economics.
B) Affordability is WORSE than 1989 so the correction is likely to be greater.
C) Right now Affordability is the most bullish of markers because of low interest rates. Other, more accurate, methods of determining the fundamental value of real estate are much worse.
What no response for me on the Japan thing? I guess you’re tired of being shot down all the time huh? Did you ever raise a point that wasn’t refuted in short order?
August 1st, 2008 at 1:42 pm
Yes bdk, you’re right. I wish we could put rockets under the lower mainland and blast off from this filthy planet, to be finally free of sarcasm.
August 1st, 2008 at 1:39 pm
I spent a week in NS in the summer of ’02. Beautiful place, Cape Breton in particular. But the roads — cracked from repeated freezing/thawing suggested the area might be less charming in the dead of winter.
But if you’re going to live there, Halifax would be the place to live. Nice city. Could be the 2nd best place on earth!
August 1st, 2008 at 1:30 pm
Well, here is the latest RBC housing affordability report. Affordability in BC is now worse than it was in 1989. What happened back then? Prices fell 40%.
No they didn’t. If this is a 1989 style correction, then you should be out there buying up the town.
August 1st, 2008 at 1:20 pm
No disrespect to our noble blogger, but the quality of comments in here has gone way down while the name-calling has gone way up. If there’s one think that bothers me more than the insane rantings of thumbsup2, its the sarcastic “humour” of all the bears, who post something stupid and add nothing to the conversation.
August 1st, 2008 at 1:19 pm
Mold City
“I’ve seen angry posts from him/her before, but not in this thread.”
Him… And I doubt you have. I’ve been involved in online discussions like this for 20 years now, I’m no longer angered at other people’s ignorance, but I do enjoy stirring the pot and provoking people
August 1st, 2008 at 1:14 pm
Hey Raincouver,
How did you like NS? it’s quite beautiful from about May to November and if you’re ok with snow, it’s beautiful in the winter too.
Interesting about the empty four lane highway and lack of tourists. When I was a kid we’d go to the Cape Breton Highlands National Park (voted 2nd most beautiful in the world by the National Geographic society BTW). I remember we would be the *only* people there who were locals. It was *always* packed with tourists.
There have always been a lot of outsiders buying up property there, and who wouldn’t? I mean if you’re a wealthy foreigner the value for the land is incredible, considering (a) it’s on a coast (b) it’s extremely beautiful and (c) It’s an extremely short ferry ride to Bar Harbour, Maine.
But damn, if there are no tourists in Nova Scotia, which is a great place to visit and normally very cheap, I can’t imagine what the rest of the country is going through….
I’m seriously starting to consider Halifax as viable. As Jesse said, it’s about tradeoffs and I’m becoming convinced that living in a large spacious VIctorian home and not hearing the phrase “best place on earth” may be worth some cold and snow….
August 1st, 2008 at 1:14 pm
Mold City, c’mon you’re posting from prison.
Hahaha. WTF? I’m not even sure what that’s supposed to mean. Effective trolling requires a subtle touch dude, you’ve accomplished the ‘getting a reaction’ part, but the really impressive trolls can do it without people noticing they’ve been trolled. I’m sure you’ll get it though, practice makes perfect!
August 1st, 2008 at 1:13 pm
P.S. Sorry for interrupting with data/statistics/history (with links). Feel free to carry on referencing vague/mysterious reports and making baseless claims!!
August 1st, 2008 at 1:13 pm
Source, what is the source of the SFU study? I’d like to read their findinds.
August 1st, 2008 at 1:12 pm
the source said:
Some of these posters have made predictions based on nothing beyond some referencing to California.
Dave said:
It’s pretty similar to my outlook in that I think we will have slightly declining prices this Fall (say 5%) followed by a flat market. I differ in their assessment in that it is likely the flat market would continue for longer than one or two years, which I base on past trends (i.e. a flat market typically exists for 6 to 7 years).
Well, here is the latest RBC housing affordability report. Affordability in BC is now worse than it was in 1989. What happened back then? Prices fell 40%.
August 1st, 2008 at 1:11 pm
the source
“Mold City, c’mon you’re posting from prison. They should cut internet access to you and Clifford O.”
Ahh there’s the anger! Have you ever heard of transference?
Dave
“He has yet to provide an example of other multi-decade asset bubbles.”
Nobody ever asked.
Japan, post WW2 to 1989 both the Tokyo Stock Exchange and Real Estate but also in other assets.
There, that took all of 20 seconds.
August 1st, 2008 at 12:48 pm
thesource, your observations are dead on in that outlandish predictions by bears require absolutely no reference, while any prediction that is slightly bullish is always viewed as being unsupported.
To give you some background, Drachen believes that we are in a multi-decade housing bubble. He has yet to provide an example of other multi-decade asset bubbles.
August 1st, 2008 at 12:31 pm
Anonymous, that is a good post, i like it. The SFU crew does tons of this stuff, some formal, some informal.
August 1st, 2008 at 12:29 pm
Mold City, c’mon you’re posting from prison. They should cut internet access to you and Clifford O.
August 1st, 2008 at 12:28 pm
This SFU housing study?
http://www.theglobeandmail.com....._mostemail
August 1st, 2008 at 12:23 pm
Where was Drachens anger? I’ve seen angry posts from him/her before, but not in this thread. That comment seemed completely calm and reasonable to me, unless asking questions is a sign of anger.
August 1st, 2008 at 12:19 pm
This is somewhat comical, the SFU work is not a big deal and i definately did not anticipate the interest here. Some of these posters have made predictions based on nothing beyond some referencing to California. I think we need to get the Dharma Initiative involved.
August 1st, 2008 at 12:19 pm
Please link to the SFU report or any information on it.
August 1st, 2008 at 12:11 pm
I like the blog conspiricy theory but i don’t believe it.
Some of the real estate bears here have all sorts of conspiracy theories. If you stick around, you will probably hear quite a few.
Like I said above, the SFU report wouldn’t be received well amongst some bears. And of course, the messenger gets shot.
August 1st, 2008 at 11:56 am
Drachen, i thought Jesse was angry but you take the cake. Just because blogging is anonymous is no escuse to post idiotic rants. Pull yourself together.
August 1st, 2008 at 11:51 am
the source
“Jesse, real estate will lag inflation for as long as can be reasonably projected based on current criteria.”
I guess that’s one way of putting it. “lag inflation” kind of implies it will be close to inflation however. Is 20% or so below inflation “lagging” or just plain dropping like a stone?
“Jesse, hate the message not the messenger.”
This implies that you’re delivering factual information. If the messenger purposely spins the message, ignores relevant data and misuses irrelevant data then I think he should be despised.
I note that you have not provided a single shred of evidence for any of your claims. Just who are these mysterious people at SFU that nobody here (in spite of our interest in the subject) has heard from before? Where is their report? What does it actually say? What were their methods? Do they have a history of making accurate predictions or they just industry shills? For that matter what’s your connection to Real Estate? An agent? Owner of multiple properties? Or just an interested party? Do you have some kind of education on the subject (doubtful, you don’t seem very well educated period)?
August 1st, 2008 at 11:47 am
“Get your rent money together for today? Good, don’t be so angry.”
Nice. I was referring not to your message, which may indeed have valid points, but your insistance of not providing any links or any hard numbers other than vague words about changing data, a few this, the forseeable that. WTF does that all mean anyways. Good day to you.
August 1st, 2008 at 11:47 am
I’m a student with sizeable debts, i couldn’t afford real estate regardless. There is no such thing as a good or bad market, if values go down a seller’s loss is a buyers gain. Society has nothing to gain either way. BDK, you have the bear spin down pat but no numbers/substance behind your predictions. I like the blog conspiricy theory but i don’t believe it.
August 1st, 2008 at 11:42 am
And how is the US going to get out of this ‘mess’? They are going to continue devaluing their debt. They will continue to print money and keep interest rates low. They won’t have the guts to raise interest rates unless inflation really becomes a big problem.
Our dollar can’t go much higher relative to the US than it already has. Thus, we are unlikely to be sheltered from their inflationary monetary policy.
Inflation favours hard assets and it favours those who are indebted.
August 1st, 2008 at 11:36 am
20% DROP in the next 12 months is the best case scenario.
40% DROP could happen too.
the “source” if you actually own a studio are you prepared to
A) Pay $2,000 more per month in mortgage as the unit drops in value $2,500-5,000 per month?
B) Pay the honking remediation costs when the building leaks while paying $2,000 more to live there in the first place.
Alternativelly you can be like the rest of the “investors” who try to be smart by voting against the engineers maintenace plan to save money short term (“I’ll have sold this to a rich asian before the problems arise”) and causing further damage leading to even worse investor sentiment and leaving a bunch of fools stuck with an asset that’s lost 40% of it’s resale value and bleeds $2,000 per month. Awesome! Anyone who doesn’t buy today is above average intelligence.
Anyone who disputes this is most likely a Kinko’s employee being paid an extra $8/hr to run interference on blogs (yes you Dave/source) by some hard up realtors.
August 1st, 2008 at 11:30 am
“real estate values are likely to lag the inflation rate for a few years.”
seeing as how we are facing a tightening credit market and subsequent drying up of cash we are facing a global deflationary period…..
energy will cost more as will food and health care but RE and motor vehicles and baseball cards will drop in value…..
flat lining values is just wishful thinking.
August 1st, 2008 at 11:17 am
Jesse, hate the message not the messenger. Get your rent money together for today? Good, don’t be so angry.
August 1st, 2008 at 11:12 am
Vansanity who cares about the U.S. or the rest of the world.
Vancouver de coupled from the economy.
It’s different here (compared to the rest of the world) and it’s different this time.
August 1st, 2008 at 11:02 am
US: Indymac files for bankruptcy protection; jobless rate highest its been in 4 years at 5.7%; starbucks cuts 1,000 jobs (including one of the locations under Steven Colbert’s desk!); GM largest losses in company’s history.
Recession Shmecession.
August 1st, 2008 at 10:58 am
“real estate will lag inflation for as long as can be reasonably projected based on current criteria.”
Ah you are a mischievous troll. My mistake.
August 1st, 2008 at 10:40 am
Jesse, real estate will lag inflation for as long as can be reasonably projected based on current criteria. Economic circumstances could change favouring hard assets again, but can’t see it at this point.
August 1st, 2008 at 10:37 am
I just came back from two weeks in Nova Scotia. In spite of the equity locusts from western Canada buying up property, there are tons of places for sale. And that’s only on the main roads, who knows how many places for sale off the road?
Tourism is seriously down. Americans aren’t showing up like they used to, and there are absolutely no Alberta or BC license plates showing up … it used to be common they say.
It’s pretty darn strange when you have a four lane divided highway … and you’re the only vehicle out there. Ghost town.
August 1st, 2008 at 10:20 am
“real estate values are likely to lag the inflation rate for a few years.”
How many is “a few”? 15?
Below inflation returns for anybody entering the market now. I know I’m convinced.
August 1st, 2008 at 10:08 am
There is no market crash! The recovery is happening as we speak! God willing our property will be worth a billion times more in just one months time! The infidels with their charts are trying to deceive you! There is no other investment than real estate!
August 1st, 2008 at 9:59 am
I’m not into bear of bull spin. The numbers are what they are. Take note or go back to sleep.
August 1st, 2008 at 9:59 am
I will see a recovery at the end of this year for Vancouver housing market.
Is there an echo in here?
http://vancouvercondo.info/for.....2&t=40
August 1st, 2008 at 9:55 am
California is still going up and if it doesn’t continue to shoot up it might plateau for awhile while the rich people clear customs and then it will go up some more. There might be a year or two of slight (5%) gains but it will never go down for the following reasons.
1.Water.
2.Rich People.
3.High Paying Jobs.
4.Nice Climate.
5.Large immigrant populations.
6.Hollywood.
7.Arnold.
8.The 1984 Olympics
Buy now or be priced out forever. If you don’t buy now there is no way you’ll ever be able to lock in at these great prices, why not invest? You could make 20%
August 1st, 2008 at 9:50 am
think we will have slightly declining prices this Fall (say 5%) followed by a flat market.
LOL. It’s comedy central here this morning.
I heard the ‘flat market’ call in the US a year ago, but that’s not how booms of this magnitude bust.
Do you really think talking up the market on bear blogs is going to have any effect on the market? It’s not. Get a real hobby, like needlepoint or scrapbooking.
August 1st, 2008 at 9:45 am
Dave, it was a group borrowing from business admin., econ., mathematics, computer science, etc- they kept the focus on hard number crunching. Their work is taken into consideration by developers and other parties with a vested interest. They focused on the near to mid term, there was no point trying to project too far out based on the criterias being used.
August 1st, 2008 at 9:43 am
a respected group of mathmeticians [sic] up at SFU crunched the numbers
LOL. You mean they added stuff up and made linear projections based on past data? Wow, only university “mathmeticians” can do that!
real estate values are likely to lag the inflation rate for a few years. They may even turn negative for a year or two.
LOL. Oh, they’ll lag alright, by double digits.
‘the source’ is just krish/thumbsup without the ESL filter.
August 1st, 2008 at 9:08 am
I’m not sure how credible a group of mathematicians are in predicting real estate markets. Are you sure they are not economists?
In any case, I don’t think many bears here will take solace in that assessment. If anything, most bears here would consider that to be a bullish prediction.
It’s pretty similar to my outlook in that I think we will have slightly declining prices this Fall (say 5%) followed by a flat market. I differ in their assessment in that it is likely the flat market would continue for longer than one or two years, which I base on past trends (i.e. a flat market typically exists for 6 to 7 years).
August 1st, 2008 at 8:52 am
$6.55/hr!
That must mean they were only making $2 before because wages have tripled and fundamentals are sound in California. Rich people all want to move there, they have high paying jobs, nice weather, the low U.S. dollar means it’s cheaper for rich people from elsewhere.
California prices are going up for decades to come!
August 1st, 2008 at 8:17 am
Good news for bears, a respected group of mathmeticians up at SFU crunched the numbers on household development, in-migration, development trends, etc; real estate values are likely to lag the inflation rate for a few years. They may even turn negative for a year or two. Interest rates are a bit harder to predict but are expected to maintain a fairly tight range. You can ignore your realtor for now, real estate values should be stable and affordibility will improve.
August 1st, 2008 at 6:47 am
“I will see see a recovery at the end of this year for Vancouver housing market.”
(Purposefully misunderstanding) Recovery that soon? I don’t expect prices to be back to fundamentals until 2012 or so!
August 1st, 2008 at 12:28 am
I will see see a recovery at the end of this year for Vancouver housing market.
August 1st, 2008 at 12:14 am
More bad economic news in California.
Arnold is laying off 22,000 state workers and also reducing many of the remaining 200,000 state workers to minimum wage of $6.55/hr.
Brutal!
Layoffs set for 22000 California state workers