Friday Free-for-all!
It’s Friday again and that means its time for another open topic friday free-for-all post. Here are a few stories from the week:
-Merrill Lynch: Vancouver houses 35% overvalued
-Van west median house sales price drops $298,500 since Feb
-Building permits take a plunge in BC
-BC economy losing some zip
-Revisiting the great Canadian housing myth
-Expensive? Just split the house down the middle
-Floating condos, just like Florida
-Want to talk about your money & retirement?
-US Stimulus effect fades quickly
So what are you seeing out there? Is it a good time to buy or sell? Post your news links, thoughts and anecdotes here and have an excellent 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 7th, 2008 at 11:38 pm
I discussed the stupidity of overpaying for an object/investment with a friend tonight. People only over pay when they truly believe that the price/value in the object they are buying will ONLY go up. When you break it down like that, God, it sounds so IGNORANT!
Watching this cycle truck along and everyone’s reaction to media, rhetoric, spin, propoganda, you name it, just reassures me that there is an Unthinking Majority in our society. Just like Serj Tankian sang about.
Here’s a youtube link in case you too are just tired of reading, take a break: http://www.youtube.com/watch?v=SEV_1xD8msk
BTW - I also recommend “Praise the Lord and Pass the Ammunition”. Cheers!
August 8th, 2008 at 5:40 am
August 8th, 2008 at 6:38 am
August 8th, 2008 at 6:58 am
http://www.bnn.ca/news/2660.html
Mostly Ontario and Quebec and 48,000 of them were part-time. Nonetheless, the drop is substantial.
August 8th, 2008 at 7:09 am
Vancouver’s Housing Hangover
http://www.reportonbusiness.co.....Blogs/home
some snipits:
“The likely result? A small price drop in the short term combined with a steep drop in sales volume, followed by a second wave of a bigger decline in prices as sellers finally capitulate. The Lower Mainland’s housing market looks to have been hit by the first, and headed for the second.”
“B.C.’s housing market woes are no Great Depression, but coming as they do on top of high energy prices, a wobbling forestry sector, and the lowest level of consumer confidence in a half decade, they may qualify as the Pretty Big Hangover.”
August 8th, 2008 at 8:19 am
August 8th, 2008 at 8:45 am
This will translate to a 22% reduction in the construction workforce over the next few years. During this housing boom, the unemployment rate dropped from ~8% to around ~5% in Vancouver - almost entirely due to construction. When this is over, what’s to stop the rate from going back up to 8%?
August 8th, 2008 at 8:49 am
The olympics.
August 8th, 2008 at 8:55 am
Just kidding, right? They will be over too. (Only 1 1/2 years away)
August 8th, 2008 at 8:58 am
No it won’t. It will be a welcome relief to most developers and most workers in construction.
Everybody has been working crazy hours and there has been a shortage of skilled labour. I think permits have to drop a lot further for there to be significant job loss implications. Let’s also not forget that there is a massive amount of work already on the books and a massive amount of infrastructure spending that doesn’t show up in those stats.
August 8th, 2008 at 9:20 am
I’m not even going to bother shooting you down all the time any more. We’ve been saying the sun would rise again and there’s the horizon beginning to get lighter by the minute but Dave is in his corner, eyes firmly closed, fingers in his ears saying, “If I don’t see it it’s not happening!” over and over, rocking back and forth like an autistic child.
August 8th, 2008 at 9:22 am
August 8th, 2008 at 9:29 am
August 8th, 2008 at 9:36 am
some of the construction finishing i’ve seen strikes as just the reverse of this
August 8th, 2008 at 9:42 am
August 8th, 2008 at 9:43 am
LMAO. Yes, those bubble-inflated profit margins and paycheques are such a pain to deal with. It’ll be a welcome relief to make a lot less money.
Enjoy your paycut!
August 8th, 2008 at 9:58 am
August 8th, 2008 at 10:04 am
One of the first questions you’ll ask yourself when you are looking at a new property to purchase is: What is this property worth? That is a different question then (sic): How much can I pay? And it’s still different then (sic): What can I get this property for? But all of those questions need answers before you put in an offer to purchase a new property.
I can only hope that standards have improved at UVIC and York since the highly educated duo received their degrees.
August 8th, 2008 at 10:20 am
August 8th, 2008 at 10:26 am
August 8th, 2008 at 10:35 am
John, Dave, RX… are you guys for real???
Quote from Austin Powers:
“why must I be surrounded by IDIOTS???”
August 8th, 2008 at 10:39 am
That is after all what makes this city unique.
The incredibly high number of stupid, greedy and uneducated people around here is what made this bubble possible.
Gasp!
August 8th, 2008 at 10:40 am
August 8th, 2008 at 10:40 am
My bad!
August 8th, 2008 at 10:40 am
August 8th, 2008 at 10:42 am
August 8th, 2008 at 10:46 am
.. or are we down to attacking spelling and grammar rather than content?
August 8th, 2008 at 10:47 am
Rich asians love cock fights, massage parlours and beating their filipina maids.
August 8th, 2008 at 10:49 am
August 8th, 2008 at 11:02 am
August 8th, 2008 at 11:03 am
John = Joker, 100%
Dave = Serious, although I doubt he believes much of what he says, it seems he has some ulterior motive for posting here.
RX = I don’t see what you guys have against him? I think that advice on David and Julie’s blog is excellent. I just think that if they’re purchasing places now they are either disregarding their own advice or they’re completely incapable of calculating fundamental value. However you should really be asking all of those questions (obviously if you cannot pay, no deal, if what you can get the property for is greater than what it’s worth, no deal). He phrases it very poorly but the essential idea is correct.
I do find it sad however that someone who’s been (supposedly?) university educated does not know the difference between, ‘then’, and ‘than’.
August 8th, 2008 at 11:05 am
it’s hard to be humble when you are perfect!
August 8th, 2008 at 11:05 am
Dave is very knowledgeable but overly optimistic and due for a rude awakening IMO ;^). John is just goofing around, and RX’s comment seemed completely reasonable.
August 8th, 2008 at 11:12 am
August 8th, 2008 at 11:15 am
However, with building slowing, I do expect that what is built, will be (should be) of higher quality. That said, expect layoffs of a large percentage of the construction workforce regardless. This will augment the growth in foreclosures.
August 8th, 2008 at 11:16 am
August 8th, 2008 at 11:25 am
rx’s justification of it — i.e. that many people are either ignorant or idiots or both — isn’t unreasonable, but it ignores the fact that such people have no business investing in highly leveraged assets. Anyone who needs such advice shouldn’t be buying, and the fact that they are and have been in large numbers is just a further instance of bubble-crazed fools rushing in.
August 8th, 2008 at 11:26 am
http://www.msnbc.msn.com/id/26087869/
August 8th, 2008 at 11:28 am
I feel judged…
Just joking!
August 8th, 2008 at 11:32 am
Or do you believe that if YOU already know something its no longer worth saying to others? Sounds like a recipe for an increase in future idiots to me.
August 8th, 2008 at 11:39 am
August 8th, 2008 at 11:44 am
When his Wife saw this she jumped in and tried to claim it wasn’t him and then he denied it like Bill Clinton denied having sexual relations with that woman. Who else has a vested interest in trying to keep the Vancouver Condo market alive? He’s suggesting that a slowdown in construction is good. This means incomes will drop for workers and the developers will be on the hook for land that they overpaid for and realtors who’ve dabbled in development are going to go bust.
How could that be good? I don’t know one realtor (and I know at least 100) who’s excited about making 50% of what they made last year.
The plus side is they can hop from one blog to the next in the hopes of somehow averting the catastrophy that will be real estate for decades to come.
Who else would repeatedly try to prop up the market?
August 8th, 2008 at 11:44 am
Oh! I know! How politically correct of you.
August 8th, 2008 at 11:45 am
August 8th, 2008 at 11:46 am
…and everything rolls downhill from there….. we.are.truly.screwed.
August 8th, 2008 at 11:48 am
August 8th, 2008 at 11:51 am
Attention anyone who makes $200,000 or more per year.
Hurrty up and buy now because next year a slew of people who make $300,000 per year will swoop in and buy your condo for 50% more than you paid.
What’s this?
You would rather rent it for 30% of the cost of mortgaging it and invest it in foreign equity while the Canadian Dollar is strong and the indexes are all low?
Read what John said above and get out there and buy!!!
What’s sad is that if an average person were to go to a brokerage in the hopes of opening a highly leveraged brokerage account buying nothing but oil futures the broker wouldn’t be allowed to let him take out $800,000 simply because he’d heard that “Oil only goes up” “It’s different this time” or the best one yet “the olympics!”
On the other hand any schmuck can walk in to a display suite and put 10% down on a condo future/assignment and then sit back and wait for the money to roll in, the salesman said it was a good idea? what’s the problem.
The salesman didn’t buy one for himself and gets a comission but he’s clearly got my best interests at heart, his website even says so!
August 8th, 2008 at 12:13 pm
I mean really, what recognizable cultural show can we produce for 2010?
Oh wait, I know! Bob Rennie can try to hawk some condos. Holy crap! this could be a Condo Hyping extravaganza like no other time-share presentation know to man. That’s what we’re good at! That’s it! We already have the machinations and talent to do this. In this we are truly world class. By then, we will be the bubbliest RE city that the world has known. The world will look and gasp in amazement. At the irony of it all.
And at the end of the 2010 Olympics, the olympic caravan will evacuate the red-faced global-village of Vancouver leaving landlords — amateur and commercial — crying out for tenants as they bleed their mortgage payments to the banks.
All this, just when you thought the 2 year decline in RE prices that started in 2008 would be over.
Vancouver RE will be kicked when it’s down like no other market has been kicked.
August 8th, 2008 at 12:25 pm
August 8th, 2008 at 12:41 pm
There’s only one Olympics that really stands out in history. Are you saying that the Vancouver Olympics will be remembered as the Munich Olympics of the new century?
August 8th, 2008 at 12:45 pm
All of the arguments in support of Vancouver’s real estate market are recycled. Nothing new under the sun. The reality of elsewhere will also be recycled here …. snap, crackle, pop … not a breakfast cereal but a description of the impending Vancouver real estate crash.
August 8th, 2008 at 12:51 pm
Ask anyone on the street today (how about your oh-so-cultural Robson st.) and ask people what Nagano or Lillehammer is (Jay Leno-style.
August 8th, 2008 at 12:54 pm
I don’t agree. In the past few years, developers have had a very difficult time keeping their projects on schedule and on-budget. A big part of delays has been due to shortage of skilled trades, partly due to high construction activity.
As you rightly say, developers will still continue forward and keep building. The ones that continue to do so will benefit from more labour being available.
As far as labour goes, you can only work 60, 70 or 80 hours a week for so many years. A lot of people in the trades have been turning work down so that they can actually have a life and not work every weekend. But, not everybody can turn work down because the developers expect people to work long hours to try and keep things on schedule. I think a lot of people will be happy to see a little bit of relief, while still being able to work a decent number of hours.
As far as layoffs go, you really should look into the demographics for some of the trades. For example, do you know what the average age of a bricklayer is? A big percentage of people in the trades are near or past retirement age. Not enough young people have been entering some trades and it has a LOT of people seriously concerned, if not scared. A slowdown will benefit the trades that have unfavourable demographics.
August 8th, 2008 at 1:02 pm
I have several major construction projects going on in my neighborhood and nobody works there on the weekend.
In fact they’re done shortly after 3pm every day during the week too.
Please check your facts.
August 8th, 2008 at 1:07 pm
http://www.bcstats.gov.bc.ca/pubs/pr_mproj.asp
This issue of the BC Major Projects Inventory lists 60 proposed new projects over $15 million reported for the first quarter of 2008, with available capital cost estimates totaling approximately $10.5 billion in potential new capital investment, if all the projects proceed. The list of proposed projects that are new to the MPI includes the $3.1 billion Skytrain Expansion Expo Line in Surrey, the
proposed $2 billion Bute Inlet Hydroelectric projects in the Vancouver Island region, and the $1 billion Roundhouse Mixed Use Development in Victoria. Twenty-six major projects started construction in the first quarter, valued at approximately $3.4 billion. Of note are the $1.5
billion Lakestone Resort Development in Lake Country, Okanagan Region, and the $600 million Dokie Wind Farm project near Chetwynd in the Northeast Region.
The available capital cost of all proposed projects listed in the MPI is estimated at approximately $91.2 billion, up from $75.2 billion last quarter.
August 8th, 2008 at 1:18 pm
Of course, that’s because they’re having trouble finding financing, but that’s similar to a worker shortage.
August 8th, 2008 at 1:22 pm
“They” were saying the same thing about programmers and other tech trades during the dot com boom, know how many jobs there were for entry to mid level programmers and techs after the bubble burst? The supply of talent in the pipeline spurred on by the bubble lead to a massive flood of qualified techies at exactly the wrong time. Same thing will happen with tradespeople, RE agents, mortgage brokers, interior decorators, landscapers, architects, mom and pop developers (hello!) etc…
Dave have a look at some news stories from Florida, California, Nevada, Arizona, etc… and see what happened to their construction trades person shortages after prices started falling. Then get back to me. Otherwise take your dog and pony show elsewhere, like RET. This blog has discredited the garbage you’re spewing years ago.
August 8th, 2008 at 1:24 pm
That’s a pretty big if…
August 8th, 2008 at 1:49 pm
August 8th, 2008 at 2:15 pm