Friday Free-for-all!

It’s Friday and that mean open-topic time! Here’s a round up of recent news stories:

House prices drop nation-wide, Calgary leads with -10% YOY
-Western Canadian markets hit hard by housing downturn
Market correction not a calamity
-Buy our BC home, we’ll give you cash
-Dreams of proper compensation for a huge inconvenience
Olympic fever and the post games let-down
New mortgage rules: Ignorance breeds contempt
US foreclosures up 55% in July
Higher inflation brings lower standard of living
Home owners in denial about realty value?
-Another buy one new home get one free offer

So what are you seeing out there?  Post your news, links 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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Anonymous

"People who had cash in the 1930’s did it too, big time."

Maybe, if they had all their cash stored in a mattress at home.

Great Depression. People panicked, there was a run on the banks to withdraw savings. You were only allowed to withdraw 10% of your savings. Banks couldn't give out loans either during that time. Many banks went bankrupt and people lost their savings too.

Vansanity

LOL – Oh Jesus, where will the markets turn? – Regardless of that, as you said it IS a nice summary of all the events leading up until now. Plus it gives some insight on the "doom and gloom" in the US as a comparison.

I can't say I took any of what was written as religious sentiment or propaganda, not that you're implying as much. 🙂

Bluesman

Maybe the article was written especially for us "fundamentalists"!

Ignatius

Vansanity,

The Trumpet article you mentioned is certainly a nice summary of several recent news stories. However, the name of the journal, the ads on the website and the opening reference to Noah's Ark should have tipped you off to the religious bent – and it is quite bent! – of the article. !!ARE WE IN END TIMES?! Of a real estate bubble, perhaps.

Vansanity

Wow, there's plenty of reading out there tonight:

"B.C. consumers keep their heads above water despite rising debt"

http://www.canada.com/vancouversun/news/business/

One thing they don't note is that BC's lumber industry has contracted where construction expanded. No mention of the sustainability of the current construction levels, or lack of.

"Canada's Home Inventories Rise Amid Cooling Demand"

http://www.economicnews.ca/cepnews/wire/article/1

I found this interesting too: "Electrical Wiring in BC Sub- Par"

http://www.canada.com/vancouversun/news/story.htm

Vansanity

Hey Pope, here's a really well written piece by an American on our current economic situation and how it compares with the US: http://www.thetrumpet.com/index.php?q=5434.3734.0… "Canadian Countdown: Flood of Job Losses Coming? A recent report from investment bank Merrill Lynch says house prices in Canada are clearly in bubble territory, with cities in the West especially so. The economic analysis, titled “Peaked: Canada’s Housing Market In Depth,” warns home prices are heading for a sustained downturn. “We’re most concerned about Saskatchewan, where the doubling of house prices in both Regina and Saskatoon over the past two years has led us to estimate that these markets are now close to 50 percent overvalued—a level that our research denotes as the beginning of the ‘extreme’ zone where bust risks rise materially,” said the report (emphasis mine). After Saskatoon and Regina, the most overvalued… Read more »

van-zee

Dollars to donuts there are more gangsters in Westvan than the DTES.

Anonymous

Blueskies, do you honestly think the multi billion dollar industry is supported by a few lost souls on the DTES?

If I were a pusher, I think I would target a different crowd, perhaps Realtors,and flippers.

Some West Van Stock Brokers and their GF have the bucks as well.

blueskies

….as always

http://tinyurl.com/downtowneastside

The Downtown Eastside has always been the centre of Vancouver's hard drug trade. In fact, Canada's first drug prohibition law originated here, introduced a century ago after Mackenzie King investigated compensation claims stemming from the 1907 anti-Asian riots in Chinatown and Japantown. Some of the claims happened to come from opium manufacturers and King became especially alarmed when he learned the opium scourge was spreading to white women and girls.

VHB

Hey pinocchio,

Just make sure you get your posting name right when you're visiting the webcam girl's site–if you get that wrong you might not have a wife for long!! 😉

scooter

Oops, posted under my wife's name. She is going to kill me now…

scooter

VHB said:

"Pinocchio, you have much more interesting friends than I do!"

No, not really – they just small-time scam artists mostly.

Except maybe the girl who's got the webcam going on on her site.

BTW, did you guys ever look at the "erotic" services section on craigslist? It's farking amazing, all theses girls selling themselves to the highest bidder. No wonder Yaletown was voted the sexiest place ever. All these condos must have been bought up by hos and their pimps, I guess.

New York and London have nothing on us, we have a thriving erotic services industry!

Keepin an eye on the

Interesting things one learns frequenting the RE blogs. For example, group behavior.

I noticed that when one specific poster is not posting discourteous comments on Rob’s blog, some of the regulars, even the polite ones, kick it up a notch and hurl unflattering ,although truthful insults at Rob.

It’s as though It creates a vacuum.

Rob doesn’t want to talk about the Rupert house anymore, although at first he thought it was great for exposure, it seems now he would rather move on with a new subject.

Any bets if you guys don’t stop posting about the Rupert house, he will change the thread to some esoteric subject?

alexcanuck

Superman: I'm getting awfully interested in that deflationary camp myself. As long as there is no confusion with price inflation of things you use: food, oil in all it's forms, clothing, and so on. That's completely different than inflation as a monetary phenomena, until lately fueled by credit expansion. Ever so convenient for governments worldwide, as all this money created out of thin air by the shadow banking system drives the economy so nicely, yet doesn't have the bad effects as simply printing the money would. After all, it isn't real money, because it is all going to be paid back (with interest) and disappear again, so it doesn't have the immediate effect on prices like is on display in Zimbabwe right now. The trouble starts when the debt defaults, then the imaginary money disappears alright, but from the wrong… Read more »

patriotz

Patriotz – You in the Deflationary Camp then?

Just as in the early 80's, asset prices (RE and stocks) will fall and CPI will continue to rise. Wages will go nowhere nominally and total nominal payroll will fall due to reduced work hours.

So what would you like to call that?

Inflation/Deflation is not a single phenomenon, it can and does move in different directions on CPI, assets, and wages.

It goes without saying that if you're saving cash to buy a house only RE price inflation/deflation matters.

VHB

Pinocchio, you have much more interesting friends than I do!

jesse

"Every single person I know who bought real estate within the last couple of years are “subsidizing” their income in some illegal or questionnable way."

I'm sure this was the case in the US as well. Didn't help many of them one bit. Renting out your basement when you lose your framing job(s) … Bzzzzzz!!!! You're still in the red. All this under the table stuff was around in 2000 as well and property prices were much less.

pinocchio123

Every single person I know who bought real estate within the last couple of years are "subsidizing" their income in some illegal or questionnable way. It's either through unauthorized rental suites, cash jobs paid under the table/cheating on taxes while self-employed, porn websites, growing/harvesting/dealing pot, or being employed in real estate (the latter one being the worst of all IMHO 🙂

I think the times of an honest canadian are gone.

I seriously do not know of anyone who got (and stayed) in the market through honest to god work recently.

SuperMan

cash does just fine, because you can buy stuff cheap that other people don’t have the means to buy.

Patriotz – You in the Deflationary Camp then? I have one foot in there as well, with the other foot undecided.

e

many friends of mine got mortgages in canada when only holding jobs for a month (i.e. new hire and still under probation). was effortlessly and prime-0.90% too. (some were also CMHC-backed too). all were max out mortgages too. (but 25 year).

jesse

"thank heaven for good ol’ “honest” canadians eh!" I don't have a sense for how "honest" Canadian loans are. It could be the problem is more subtle, where someone thinks they have higher long-term income than they do. A perfect example would be a construction worker or Realtor in San Diego, where in 2005 looking at their past 5 years of employment showed a stable and well-paid applicant. 2006 hits and all of a sudden there's little to no work and this great looking salary used for stated income is useless. I wonder how far back lenders in Canada go to check how stable employment income is. My guess is less than 5 years and the banks own economists are pretty much oblivious to any massive downturn in employment in construction/RE. Probably a more apt description is "La la la… Read more »

Bizznitch

Where's the well paid jobs in Vancouver? Most of the jobs there involve working at McDs etc.

blueskies

'Liar loans' threaten to prolong mortgage crisis

http://tinyurl.com/liarloans

Many homeowners with liar loans are stuck. They can't refinance because housing prices in those markets have nose-dived, and lenders are now demanding full documentation of income and assets.

thank heaven for good ol' "honest" canadians eh!

Bluesman

Vansanity: Here's your BNN ABCP update:

http://watch.bnn.ca/monday/clip84090#clip84105

Real Estate Bull

Canadian Real Estate Market Says:

"Bob Dugan, the chief economist for CMHC said high employment levels, rising incomes and low mortgage rates will keep the housing market relatively solid this year.

"Increased competition from the existing home market, coupled with the elimination of the pent-up demand that built up during the 1990s, will exert downward pressure on housing starts, which will decline to 194,000 units in 2009 from 215,000 in 2008," he said."

Sure OK Bob Dugan, you're the economist, I suppose the downward presssure on housing starts won't also translate on downward pressure on prices.

The good thing about the egg head economists, is that they can't lie very well.