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Friday Free-for-all!

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Ah! The weekend!  Make it through the next week and you get a long weekend as your reward.  The end of the week is also when we do our news link round up. Here are a few stories I’ve noticed:

–Weakness in economy helps home buyers
–Construction workers to be drug tested after accidents
-Gas and food drive inflation higher
–Global economic confidence at lowest level since 2001
-The slippery issue of oil market speculation
-Bailouts for Fannie and Freddie?

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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condo abbotsford

Higher number of MLS listings is having a negative impact on the prices, everywhere…

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JB

Backlog of US homes for sale is worst on record

http://www.independent.co.uk/news/business/news/b…

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/dev/null

Keep in mind that getting another degree isn't always the best thing you can do for your salary. I graduated recently and now I'm earning about half of what I was before. (Although my situation isn't entirely typical.)

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patriotz

drachen, that quote was from sheepless. My point was the same as yours, that it is the median that matters.

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Anonymous

Aside:

For anyone who might have been waiting for the next chapter in Chris Martenson's "Crash Course", it was published on the 23rd, here:

Chapter Seventeen: Peak Oil

For those who haven't seen it, you might really want to check out the previous chapters, especially the ones immediately preceding, on bubbles and "fuzzy numbers". Fascinating stuff, IMHO.

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Drachen

Patriotz

"Actually, the average family income for Vancouver in 2000 was $70,000 ($75,000 for couples) http://www.bcstats.gov.bc.ca/data/sep/rd/reconinc…

Even if salary increases didn’t keep pace with inflation, the average now should be over $80,000 so the average family should be able to afford a $240,000 mortgage. Hope they have a big downpayment."

Median is $62,000 give or take a few hundred at the last statscan measurement. Median is a far better measure of what regular people can afford because it's not skewed by a small group of super-wealthy people. And Vancouver median family income is increasing far more slowly than inflation, it has been for some time, we're now four or five from the bottom of the 20 biggest Canadian cities for median income.

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James

Anecdotal report from the trenches. I was at a BBQ this weekend. 2 early 30s couples are in the process of selling both of their homes. They're the ones who got help from their parents to perform a flip and hopefully make enough for their own downpayment, you know instead of working for it and stuff like that. Anyway one got a fool right away to offer above asking but did not accept the offer. She thinks they'll be cleaner offers coming soon. The other one has yet to put the house on the market because they're just finishing up. Both have said they are planning on doing another flip! Everyone at the BBQ parroted the spin from what a month ago or whatever about the soft fluffy landing. This is actually a change from before with this group. A… Read more »

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umdesch4

Matt(112), are you sure tech workers are going for more degrees? My experience over the last few years is that my coworkers and I drop some saved up cash on certifications our employers won't cover, and BCIT-type courses we can take in the evenings, just to update and round out our skills. None of us have the time or money to invest in doing lap 2 on the university circuit…but maybe that's just my poor/lazy peer group. 😛

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umdesch4

About IT in Vancouver (and SAP BOBJ)

My experience with contracting is that yes, you will probably end up with a 6 month contract, but if you're good, and using a rare skillset, you end up geting your contract renewed a few times until you've been there for years…longer than most of the full-timers. It's rather funny actually, but stressful every 6 month while you're waiting to see if you'll get signed up for the next stint or not.

I happen to know someone who works in IT at BOBJ. 😉

So far SAP is saying there's no plan to shut down the Vancouver operation, and they're turning the whole BI PG into what they call a 'lab'. I expect there will be more info coming around Q1 next year.

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patriotz

Actually, the average family income for Vancouver in 2000 was $70,000 ($75,000 for couples)

It's the median income that is significant for housing affordability (with respect to the median residence), not the average. Having Jim Pattison or Bill Gates in your city does not help you buy a house.

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patriotz

That would also mean the supply of asian buyers will dry up (as well as Americans).

There have never been significant numbers of American buyers in Vancouver, and Asian buyers (I mean foreigners, not legal residents or citizens of Asian origin) are far fewer than people think.

I think foreign purchases from all countries amount to less than 5% of total.

See this study from Landcor which shows that 7% of condo purchases in the West End are foreigners (clearly % of all residences in GVRD is much lower):

https://www.landcor.com/market/reports/West_End.p…

It's the local buyers who have driven this bubble, just like in 1980/81, and the lack of local buyers which will bring it down.

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sheeplessinvancouver

Actually, the average family income for Vancouver in 2000 was $70,000 ($75,000 for couples) http://www.bcstats.gov.bc.ca/data/sep/rd/reconinc…

Even if salary increases didn't keep pace with inflation, the average now should be over $80,000 so the average family should be able to afford a $240,000 mortgage. Hope they have a big downpayment.

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matt

I don't think you'll see too many people buying if this global recession drags on for longer than 2009. Then the really big job losses will start to accumulate. That would also mean the supply of asian buyers will dry up (as well as Americans). When your average family income in Vancouver is around 60k and there is no growth in industry to speak of, the outcome is destined to be negative for the real estate market.

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sheeplessinvancouver

"Call me strange, but I consider spending an afternoon looking at open houses to be a fun time."

You've got lots of company. Wandering through open houses on the weekend seems to be peculiar to Vancouver. I've not seen the same attendance at them in other cities.

I agree that most people at open houses are just kicking the tires, checking out the decor or otherwise amusing themselves, but I don't think it was much different in the past. And, yes, people are holding back waiting for prices to go down. I think they call that pent-up demand. If prices don't go down by much, anyone have a guess on how long they will hold off buying? In my case, it's until interest rates start going up. The latest predictions by economists is between March and fall 2009.

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sheeplessinvancouver

"There’s been a steady decline in university enrollment ever since the echo boomers matured and are now starting to enter the workforce." Some of the echo boomers are still in high school. The peak of the baby boom in Canada was 1959, but if you account for immigration, the peak in population in that age group today would have been born in 1961. The echo boomers started coming into the world in the mid-1980s. I think that lasted until 1995 which would mean the echo age group is currently between 13 and 23. This would explain the enrollment decline in the elementary schools that the Lower Mainland has been experiencing over the past few years. It will be a few more years before this has an impact on university enrolment. A bachelor's degree is comparable to what a high school… Read more »

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condohype

Call me strange, but I consider spending an afternoon looking at open houses to be a fun time. Since I have no intention of buying, I don't bother wasting the agent's time — I just look. Lately I've noticed a lot of people doing the same. The thing is, nobody's browsing with the intent of making a purchase. They're just scoping out the goods. Speaking to the "regular folk" at these open houses, the conventional wisdom is that there's no point buying now because prices are heading lower.

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Re-diculous

Thought this was pretty good, albeit from a UK perspective

http://www.youtube.com/watch?v=v8GPgBM_crU

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sheeplessinvancouver

Here's some anecdotal stuff from my open house visits this weekend. I only stopped by two – both East Van fixer-uppers in the $700,000 to $800,000 range. The open houses were busy. At least a few seemed to be more than just looking. Both houses have been on the market for six or eight weeks. Both have been family owned for the last 30 – 40 years, but currently empty because the single occupant (owner or member of the owner's family) had moved on. One had obviously consisted of three or four rental suites many years ago. Both were approximately 100 years old. They were huge and needed a lot of work. The linoleum in one of them looked to be around sixty years old. The buildings themselves were solid which is more than I can say for anything built… Read more »

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matt

#104 read on, there's been a steady decline in university enrollment ever since the echo boomers matured and are now starting to enter the workforce. I doubt many labourers and baristas will be going back to get a BA or BSc due to a recession. Tech workers with BA or BScs are more likely to go back and get MBAs and other advanced degrees but I am unsure that it is enough to offset the decline of Bachelors' enrollments.

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arit

machiatto

I am in the medical domain.

Bizznitz

Funny you should mention them, I worked there for two years. Still have friends there…

Regards,

arit

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Bizznitch

Heard there's a hiring freeze on at Sage/Accpac.

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macchiato

Arit, What sector of IT are you in?

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macchiato

To James' point regarding IT projects underway, here is an NY Times article I came across today by coincidence:

http://www.nytimes.com/2008/08/24/business/24coun…

Gartner group, I am sure they've gotten it wrong before, about 8 years ago, and probably got it terribly wrong.

We'll see what happens this time.

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betamax

BTW, the word in the IT industry is “silent-alarm” aka freeze hire all across. No recession here?

I've heard from a few local tech insiders that they're being affected by the credit crunch in the US. Development money was easy to get the last few years, almost like the dot.com era again, but recently the US investment capital spigot has been turned off, and small-company hopes of being bought out by a bigger US company are fading fast. Some companies with shallow pockets and a high burn rate are going to run out of money next year.

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read on

matt Says:

August 23rd, 2008 at 3:44 pm

Where else do you all think we’ll see job losses in Vancouver? What large companies will run into problems? Perhaps Home Depot and Rona? That’s a toxic combination of retail and construction. Is there any chance that UBC or SFU will start laying off employees due to reduced enrollment?

****

Matt, Universities generally INCREASE enrollments during economic downtimes as more poeple choose to study rather than take construction jobs at 19, etc.

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