Markets change

Yes, markets change and so do ‘expert opinions’. And what a difference just a few days can make! Housing markets change at such a glacial pace that they miss out on the exciting daily ups and downs of the stock market, but the flip side is that once they start to slide it can take years for them to hit bottom. You don’t have to look further than our closest neighbor to the south to see an example of this slow downward slide.

This gradual change makes it all the more remarkable that a local housing market ‘expert’ would be singing two different songs within the space of just a few days. Thanks goes to Condohype for pointing the evolving marketview of Cameron Muir:

Skeptics take heart, because I already know what you’re thinking – its the wonders of vague wording: a couple of per cent does not equal a ‘substantial decline’, so this is not a reversal. And maybe you’re right, except there’s this small point: how many years do we have to suffer declines of ‘a couple percent’ until ‘affordability picks up’? Particularly with a global economic slowdown, a local economy coming off a boom and new mortgage rules that require more fiscal responsibility from buyers? Would a sharp shock to the market that quickly restores ‘affordability’ be a worse scenario than 10 years of slow equity leakage?

In June the REBGV benchmark price for a house dropped by about $5500 to $765,654. From that starting point a drop of just ‘a couple percent’ is a loss of more than $15,000 a year. Of course now that these predictions appear to be changing on a weekly or even daily basis, perhaps we’ll be hearing about the next leg up soon.

Thanks again to Condohype for the tippage.

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Anonymous
Anonymous
12 years ago

you prove to be the dead brain idiot #90

scullboy
12 years ago

Mr. Simpelton:

There has never been a more useful idiot that SatV. As long as he's capering around here gibbering you know the rest of the sheeple are generally unaware. Once he puts it all together in his head, we'll know the fools are running screaming for the exits. 🙂

Thums up2
Thums up2
12 years ago

Mr. Simpleton,

I suppose to make fun out of your post but i heading for work you know once my friend want to rent a unit and he found one ad in cragslist that says"one bedroom appartment is available immidiately"he got sick e mailing the poster for two weeks he just wanted to know where is it?how much is rent?now you are coming up with "demand and supply???"anyway those rules are included in the posts so cheer up!

Mr. Simpleton
Mr. Simpleton
12 years ago

It is amazing how you guys keep your cool reading the fucking drivel that comes from Thums Up2…

I cannot help but to think that every second Real Estate Agent in this godforsaken place must be like like him… and that answers a lot of questions about "how this could have happened?"

Supply and demand… extremely stupid customers require extremely stupid agents.

crabman
12 years ago

I’m confused about that last post.

Has there ever been a satv/krissh/thumbsup post that wasn't confusing?!?

patriotz
patriotz
12 years ago

He wants to sell to downsize

In that case he should just go ahead and sell, because it's better to downsize at a higher price than a lower one. And prices have a lot lower to go.

But for the love of God he should not buy the new property before the sale on the old one completes.

If he can make an offer on the new property without subjects he will have a tremendous advantage in a slow market.

Anonymous
Anonymous
12 years ago

scullboy

Via
Via
12 years ago

Who the hell is Sofia? Mother Teresa? Pregnant?

I'm confused about that last post.

jfk
jfk
12 years ago

patriotz,

He wants to sell to downsize, but mostly to cash in, and buy back in at a discount in a year or two….just like me, but I sold last fall.

Thums up2
Thums up2
12 years ago

"So thumbs, let’s get this straight," O-ho That's how it goes up(thums up) "You’re saying the people on the sidelines and sellers are stupid?" That's correct i would say wishful side liners not those who got no choice other than renting,from the sellers who are selling their principle residence but plan to live rest of their life in the same city. "Only buyers are smart?" That's correct as well because the pace of economy is at bottom low so does interest rates for buyers this is the best time to bargain with sellers than at any other time and best time to bargain with banks for interest rates than at any other time,this is the best time to exit from renting units because rents are start catching fire and the Vacancy rate in metro vancouver getting close to zero percent… Read more »

crabman
12 years ago

jfk,

Sounds like you've done your job. It's probably best to butt out at this point, the rest is up to him.

Check out this guy. Bought a flip last Aug for $430k. Now he's trying to sell for $459k. He's spent at least $20k so far in carrying costs, and realtor fees should be another $20k. If he gets his asking price, he we be out about $11k + $2k for each month it is on the market.

Looks to me like a flipper rushing for the exit!

patriotz
patriotz
12 years ago

Why does he want to sell? To move up to something bigger, or to downsize, or to move out of town, or -gasp- wait out the bust and buy cheaper, etc?

Makes all the difference in the world.

jfk
jfk
12 years ago

A ggod friend has been talking for some time about selling.

The problem is that he's not quite ready because of a few family complications….daughter is getting married in a few weeks and whife has been too preoccupied with that. Then he started talking about a couple of small fix-ups and window dressing after the wedding.

They purhased the house in 2003 when it was about 15 years old. I think I've almost convinced him that prices have already started to fall, and not to waste any more time.

Anyway, I think it's time for me to butt out. Any opinions?

Anonymous
Anonymous
12 years ago

Is there a way to block two thumbs? This individual is bad for the health of the people. There is a relationship between poverty and bad health.

whos john
whos john
12 years ago

can anyone point to one major US realty firm that predicted price drops before they started?

A better question is "can anyone point to one major US realty firm that acknowledged price drops as early as a year after they started?

whos john
whos john
12 years ago

well i thought he was pulling our legs. but now i think that john is satv posting without a babelizer.

crabman
12 years ago

From LA Times article above:

the statewide median home price last month was $328,000. The statewide median home price peaked in May 2007 at $484,000.

32% down from the peak and still falling…

Will you still be solvent when it happens here, satv/krissh/2thumbsuphisass? (P.S. satv, I'll be able to buy back in for 20-30% less than I sold, AND I've been paying about $1500/month less while renting!)

Also from article:

The decline is being driven by … a growing willingness by sellers to accept less for their homes.

Now THAT is stellar journalism!

Actually, it's being driven by affordability. As in, Calfornians weren't able to afford them, so the price had to come down.

patriotz
patriotz
12 years ago

“Deceleration in the growth of housing prices largely offsets the expected acceleration of food prices,” the report explained.

Complete nonsense. Houses are assets, not consumables. Nobody has to buy a house, any more than they have to buy stocks. House prices have nothing to do with the cost of consumption, i.e. cost of living.

One might just have well have said that the bear market in stocks in the 70's offset the increase in the cost of consumables.

Barf.

scullboy
12 years ago

So thumbs, let's get this straight,

You're saying the people on the sidelines AND sellers are stupid? Only buyers are smart?

What in God's name was your mother huffing when she had you?

blueskies
blueskies
12 years ago

California’s median home price plummets in June

In June 2010 you could use this with Vancouver substituted for California….

John: please stop self-medicating

satv: please start self-medicating

JB
JB
12 years ago

California's median home price plummets in June

http://www.latimes.com/business/la-fi-housing18-2

Via
Via
12 years ago

Canadian Press: Has Canada slipped into recession without anyone noticing?

"Canada is within a hair's breadth of slipping into a technical recession, economists said Wednesday, a day after the outlook for the North American economy soured sharply."

M-
12 years ago

Crabman:

I'm left speechless. I hadn't imagined that they'd calculate OOH costs like that. They calculated it the same way one would rationalize current prices– "it's stupidly expensive, but hey, it's going up so much every year, I can't lose". I suppose this means that as prices begin to drop, inflation rates will appear to soar as those capital gains turn to losses, and as the rate of return on competitive investments climb, which will feed in to cause mortgage rates to rise, which feeds the cycle.

Ouch.

crabman
12 years ago

When housing prices were soaring, there was no reflection of it on inflation. So now, conversely, housing prices decelerate and somehow offset any price increase in food prices as well as a direct reflection on core inflation. Something doesn’t add up. Vansanity, I did a little more digging, and I think I see what's going on. (Someone correct me if I wrong) The formula used for Owner Occupied Housing (OOH) is as follows: UC = rM + iE + D + RC − K UC: User cost M: Mortgage debt E: Equity in the home r: Mortgage interest rates i: Rate of return on alternative assets D: Depreciation RC: Recurring costs K: Capital gains (or losses) Source. So, appreciation is subtracted from OOH costs! This looks to be the reason for the low OOH cost inflation. So when prices fall… Read more »

Thums up2
Thums up2
12 years ago

#54, Never mind what crabman has to say because he has sold his condo in greed in 2006(at homer street) by the time he just assumed that market will crash in near future then he will be able to buy on low prices again but he is so much disappointed. Now when ever he sees buyer on the street he run behind buyers to stone them becuase he can't wait too long.Do you Want to know why? here is a list of reasons Manufacturing is up,Construction is still booming,Bank holds rates steady due to extremely healthy economy,Real estate prices steady,Economy growth rates prediction is higher,housing future is healthy.Rental yeild is going up,interest rates are low. Buy only if you can manage monthly payment for the term there is no advice for flippers.buying advice is for the buyers to buy principle… Read more »