Friday Free-for-all! Holiday Edition
Not only have you made it to the end of another work week, but you’re looking at a long weekend! Here’s a round up of a few news stories I’ve noticed this week:
-July 2008: Sales down, listings up
-Whistler is running out of Gas
-New Pattullo Bridge will have toll
-Bad realtors getting spanked
-CMHC expands bond program for banks
-GDP drop ‘a bit of a shocker‘
-Greenspan: US on ‘brink of recession‘
So what are you seeing out there? Post your news, links and anecdotes here and have an excellent long weekend!
note: any conversation on Vancouver, 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. Pasting a link will automatically create a clickable hot-link. Thanks!
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August 1st, 2008 at 12:14 am
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
August 1st, 2008 at 12:28 am
August 1st, 2008 at 6:47 am
(Purposefully misunderstanding) Recovery that soon? I don’t expect prices to be back to fundamentals until 2012 or so!
August 1st, 2008 at 8:17 am
August 1st, 2008 at 8:52 am
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 9:08 am
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 9:43 am
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 9:45 am
August 1st, 2008 at 9:50 am
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 9:55 am
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 9:59 am
Is there an echo in here?
http://vancouvercondo.info/for.....2&t=40
August 1st, 2008 at 9:59 am
August 1st, 2008 at 10:08 am
August 1st, 2008 at 10:20 am
How many is “a few”? 15?
Below inflation returns for anybody entering the market now. I know I’m convinced.
August 1st, 2008 at 10:37 am
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 10:40 am
August 1st, 2008 at 10:58 am
Ah you are a mischievous troll. My mistake.
August 1st, 2008 at 11:02 am
Recession Shmecession.
August 1st, 2008 at 11:12 am
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 11:17 am
August 1st, 2008 at 11:30 am
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 11:36 am
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 11:42 am
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 11:47 am
August 1st, 2008 at 11:47 am
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 11:51 am
“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 11:56 am
August 1st, 2008 at 12:11 pm
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 12:19 pm
August 1st, 2008 at 12:19 pm
August 1st, 2008 at 12:23 pm
August 1st, 2008 at 12:28 pm
http://www.theglobeandmail.com....._mostemail
August 1st, 2008 at 12:29 pm
August 1st, 2008 at 12:31 pm
August 1st, 2008 at 12:48 pm
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 1:11 pm
“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 1:12 pm
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 1:13 pm
August 1st, 2008 at 1:13 pm
August 1st, 2008 at 1:14 pm
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 1:14 pm
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 1:19 pm
“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 1:20 pm
August 1st, 2008 at 1:30 pm
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 1:39 pm
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 1:42 pm
August 1st, 2008 at 2:02 pm
“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 2:08 pm
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 2:19 pm
August 1st, 2008 at 2:28 pm
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 2:30 pm
That’s presuming interest rates don’t go up for the next 25 years and the building doesn’t require $140,000 per unit for remediation.
August 1st, 2008 at 2:31 pm
August 1st, 2008 at 2:34 pm
$600 per $100,000 =$3,000 mortgage
$250+ strata fees.
$500,000 rents for $1500.
Mortgage and strata = $3250
Rent = $1500
in order to put enough down to make that one neutral would need $325,000 and that’s if no GST or PPT is being applied.
And if you have $325,00 cash and put it into a GIC @3.7% at ING and use the $880 a month interest towards the rental and pay only $620 per month while waiting for the downtown condo market to drop 40%
August 1st, 2008 at 2:42 pm
“No they didn’t. If this is a 1989 style correction, then you should be out there buying up the town.”
You’re right, I got my crashes confused! The 40% drop was in the early 80’s.
August 1st, 2008 at 2:48 pm
I was mixed up too. Mostly because 1989-90 was a bump and not a correction. As I’ve said before we have not seen a proper price correction since the early ’80s. All of those increases will be lost over the next few years.
Dave will sputter and fuss over that but other than saying economics must obey the laws of physics and he decides which laws apply when and where he really hasn’t had a single counter argument. (I include the physics mumbo-jumbo because it was his only attempt, not because it means anything outside of his own deranged mind)
August 1st, 2008 at 2:48 pm
i’m an economist at SFU. as far as i know, none of my colleagues are involved in a project like the one you describe. do you think maybe you could give us a reference?
thanks.
August 1st, 2008 at 2:50 pm
$250 Strata
$500,000 rents for $1900
Mortgage + Strata = $2000
Rent = $1900
Leaning toward renting but not quite as dire as you make out.
August 1st, 2008 at 2:53 pm
If you can rent out a 600 sq ft unit for more than $1500 then you have a career in Property Management in front of you since you’re clearly better than anyone else who’s ever done it.
August 1st, 2008 at 2:58 pm
5: The winter games
4: Leaky condominiums
3: Marijuana & Heroin
2: Beautiful collapsing roads
and the number one thing people around the world think of when they think of BC (drumroll please)
1: Feet washing up on the beaches
August 1st, 2008 at 3:02 pm