Friday Free-for-all!
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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August 21st, 2008 at 10:23 pm
“SOLD” to the “highest” bidder. BC Bud the “highest” THC content in the world. OOPS,new I should not have smoked that with realtor John Dough. Dang, on the hook for 40 years, shoulda waited until after October 15!
August 22nd, 2008 at 12:11 am
Have any companies started laying people off yet? I heard a game company in Vancouver chopped a significant portion of their workforce.
August 22nd, 2008 at 12:38 am
Radical Entertainment just laid off half their staff – over 100 people:
http://www.canada.com/vancouve.....fe733f8f3f
There is no shortage of jobs at other game companies though; most of these guys should find another local job fairly easily.
August 22nd, 2008 at 8:17 am
From my experience, speaking with residential real estate developers, lenders and speculators, it is now widely accepted the market is in a downward cycle. I guess that’s not a revelation given that even Helmut is now calling for a 10% decline. So, the question becomes how much will the market drop? Obviously now one knows the answer for sure but if I was a betting man I would say at least 30% over the next two years.
August 22nd, 2008 at 8:31 am
Many in Beijing were counting on a tourism bonanza, but it didn’t happen. In Vancouver it would be a totally different story, right?
http://www.latimes.com/busines.....1747.story
August 22nd, 2008 at 8:47 am
Partisan Spectator, I’m just waiting for statistics on the tourism industry for the past year. I don’t think they’d be very healthy given the price of fuel and inflation.
August 22nd, 2008 at 9:36 am
re: realtor story
http://tinyurl.com/chilliwhack
A Chilliwack realtor gunned down in his car late Wednesday was closely associated with the notorious United Nations criminal organization,
August 22nd, 2008 at 9:42 am
Many in Beijing were counting on a tourism bonanza
Mostly they seem to be getting bad press for air pollution, faking documents and arresting old ladies who apply for permission to protest eviction from their homes. We should be doing something about our problems here at home – the ‘highest property crime rate in North America’ and the ‘HIV infection rate as bad as Botswana’ is bound to get us some negative press.
August 22nd, 2008 at 9:56 am
From Blueskies link:
Gordon’s slaying comes just a month after another UN realtor, Elliott (Taco) Castaneda, was shot to death in Guadalajara, Mexico
Geezus! Who knew realtor was such a risky profession.
Do the police confiscate houses purchases with ‘the proceeds of crime’?
August 22nd, 2008 at 10:04 am
Construction workers to be drug tested after accidents.. You mean they aren’t already? WTF? Anyone whose walked by a construction site knows cigarettes aren’t the only thing being smoked.
August 22nd, 2008 at 10:06 am
In addition to Radical laying off workers, Riptown (or Fiver Media) has also made redundant 100+ workers. I also hear that Business Objects will soon be packaging off most of the downtown Vancouver operations, except for Sales and IT Operations. Going to be a lot of stretched mortgage payers soon!
August 22nd, 2008 at 10:56 am
What a gong show!!
Smoking trades people.
Shootings.
Layoffs.
WCB looking for ways to avoid paying claims.. duh.. testing AFTER accidents..lol, not before??
Vancouver is different..
Weakness in economy helps buyers..? really?
Gas prices drive up inflation.. Well, were they thinking it was going to get cheaper..?
Stretched mortgage payers: I think they were stretched when the tip of the pen on the paper with oh so fine print.
Yesterday I had a mature woman bitch about me parking my gas miser too close to her new fancy SUV at the 7-11 store..
gee..i wonder if she was a real estate agent.
Maybe it will be safer if I leave BC for a while, let em slug it out between them.
August 22nd, 2008 at 10:58 am
Partisan Spectator: “Many in Beijing were counting on a tourism bonanza, but it didn’t happen. In Vancouver it would be a totally different story, right?”
Of course it will be different, we have the WINTER Olypmics! Who doesn’t love the excitement of curling? Or the freezing rain at that time of year to show off the beauty of Vancouver?
August 22nd, 2008 at 11:05 am
a mouse –
I don’t think you’re going to be the first (or last) to leave this sinking ship. With no other industry besides one imbecile flipping his crap condo to another (even stupider) imbecile – we’re screwed!
Will the last person out of BC please turn out the lights? (we’re a Green province, don’t ya know).
August 22nd, 2008 at 11:09 am
We should be doing something about our problems here at home
We could always go for the Chinese solution: mobile execution vans.
August 22nd, 2008 at 11:42 am
Everything is great here in the best place on earth. I talked to a nail gun repairman yesterday and he said he’s got 5 condo assignments up for sale. Lots of interest in them from rich asians and albertans. He says business is good too. No slowdown in site for nail gun repairmen on the east side.
August 22nd, 2008 at 11:55 am
Regarding Drug Tests:
I used to bike through the Olympic Village construction site. Along the cement dividers (blocking off the bike route) it was not uncommon to ride through a cloud of pot smoke. You would see them sitting there, lighting up. Terrible!
August 22nd, 2008 at 11:57 am
Also, when you’ve got big brokerage firms like Canaccord with a no hire/no salary raise FREEZE you’ve got to wonder where things are headed.
August 22nd, 2008 at 12:07 pm
http://www.canada.com/calgaryh.....de18ff4022
Calgary is starting to see it now….a 650 unit two tower downtown high rise was halted today. “Higher costs” is the story….but the bank has the file….hmmmm…..another hole in the ground I have to watch out for.
August 22nd, 2008 at 12:10 pm
“no hire/no salary raise FREEZE”
This, in the face of 3.4% inflation? So confusing.
August 22nd, 2008 at 12:32 pm
Mold City:
Realtor is indeed a very risky profession. If you are a realtor and you are singing cock-&-bull stories about real estate going up-up-up to one of you clients who is a representative of a mafia boss that is not highly improbable in Vancouver. Finally they buy. Cash deal. Few months passed. Suddently the market goes down and it happens that cash is needed back. Oops. The realtor tries to offload the property(ies) – no luck. But the owner is expecting fat profit…
I leave it here for guessing and speculating what would be happening next…
… maybe realtors are still eligible for professional malpractice liability coverage in such cases?
August 22nd, 2008 at 12:56 pm
Jesse, yeah inflation for stuff other than income. Inflation is wiping out wage gains:
http://www.canada.com/theprovi.....5ed2a88402
The Bank of Canada will be comforted that its core inflation rate, which excludes mortgage-interest costs and certain volatile energy and food prices, and which it monitors for underlying price trends, remained at 1.5 per cent.
However, Shenfeld said the low core inflation rate is of little comfort to most consumers.
“If you don’t drive, don’t have a mortgage payment, and don’t eat fresh produce, you’re in luck,” Shenfeld said. “But the typical Canadian has all of those costs.”
August 22nd, 2008 at 1:29 pm
I think detox is going to be the next big boom – think of all those drugged up out of work construction guys who won’t be able to afford their daily fix, let alone their shoebox condo mortgage and big, shiny truck payments. Given comments over the years by realtors in the media, most recently the “bulletproof” guy, clearly a number of agents have been smokin’ something too & clearly hanging out in dodgy company…
This is all going to end badly. Too bad we put all our social services funds for detox beds and treatment programs into Olympic infrastructure… perhaps we can convince the NIMBYs in Richmond to let us refurbish that speed skating oval after the games…
August 22nd, 2008 at 1:33 pm
mk-kids
Are you suggesting that the Federal Government was going to send B.C. money for detox beds but instead diverted it towards the Olympics?
August 22nd, 2008 at 1:35 pm
“Inflation is wiping out wage gains”
The wage pie remains the same size but consumer prices are increasing. Corporate revenues can slice the pie any way they want, it still isn’t getting any bigger.
August 22nd, 2008 at 1:38 pm
I think detox is going to be the next big boom – think of all those drugged up out of work construction guys who won’t be able to afford their daily fix
A friend of mine in construction is worried about exactly this. He says there are many functioning addicts out there because they’re making $60-80k, and he wonders how they’re going to function when they no longer can support their habit.
August 22nd, 2008 at 2:26 pm
“he wonders how they’re going to function when they no longer can support their habit.”
He’s worrying about what happens later? Let’s all hope workmanship and the ability to wield a nail gun don’t require sobriety.
August 22nd, 2008 at 2:39 pm
I am now even more confused…
I hear sentences like
“making $60-80k”
and
“condo mortgage and big, shiny truck payments”
Is 60-80 considered a high salary?
I don’t know…. I make a bit more than that, the wife brings in some more (sorry modesty, anectodal value needed), and I drive a 1992 car, and rent our place. We cook all our food from scratch.
I don’t see how 60-80 covers new truck + house + marijuana. And my Excel sheet has all my expenses and incomes down to the penny.
I have a slight suspicion that the abovementioned construction worker doesn’t have his Excel sheet up to date…
Living IS expensive.
Best regards
arit
August 22nd, 2008 at 2:45 pm
I only make 50k and I own over 20 condos and many SUVs and boats. It’s all about credit cards.
August 22nd, 2008 at 2:46 pm
Super quick calculation for abovementioned 80k construction worker:
80K
After taxes
60K
Per month
5k
Truck payment ~500
4.5k
Mortgage for 600,000 condo ~2500
2.0 k
Marijuana ~300
1.7k
communications (cell,TV, cable, etc) ~300
1.4k
Food, alcohol, fun and restaurants ~800
0.6k
gas for truck ~400
0.2k
Insurance for truck ~200
0.0k
Matches for marijuana ~0.05
Negative monthly expenses…
No money for toilett paper.
Regards
arit
August 22nd, 2008 at 3:06 pm
“maybe realtors are still eligible for professional malpractice liability coverage in such cases?”
If they are I am sure they all carry Errors and Omissions insurance.
August 22nd, 2008 at 3:23 pm
hey arit, you need longer arms and shorter pockets cheapo! suprised you shelled out for internet access! ha ha you’r missing a penny! ha ha
August 22nd, 2008 at 3:42 pm
“These arrogant, stupid wanna be investors who bought at TV Towers thinking they’d make money are the stupidest form of humans on earth” – Bob Rennie
Arit, don’t let the idiot make fun of you for being smarter than him, he’s just mad that he believed the salesman and spent all his money on a unit at TV Topwers that’s already worth $20,000 less than he paid and will clearly drop at least $2,000 every month for decades.
Hey Krissh, did you see they can make land? You really should invest in a brain or just go away
August 22nd, 2008 at 3:43 pm
p.s. Drachen realtors pay monthly fees that include Error and Ommisions insurance.
August 22nd, 2008 at 4:12 pm
yeah inflation for stuff other than income.
Flat income + consumer price inflation = RE price deflation.
Don’t forget that folks.
August 22nd, 2008 at 4:21 pm
who’s krissh?
August 22nd, 2008 at 4:26 pm
Krissh/Satv/Browntown/informer/nutslap is all the same retarded troll who posts ridiculous comments here that don’t make any sense.
August 22nd, 2008 at 4:26 pm
#79 browntown
“pls check with government to see how land making machine invention is coming”
Your the nut bar believing they aint making any land remark. What is old will be torn down and made new. The government and big business has land to sell when they want to. Finally Canada is the second largest country and our population is very low.
The coming decade will be different, all markets will change.
August 22nd, 2008 at 4:29 pm
Browntown
Krissh
Satv
Informer
whatever other nutjob names he comes up with is all the same fool:
http://vancouvercondo.info/for.....3&t=48
There has been debate as to whether he’s an idiot with multiple personalities or just some bored guy pretending to be an idiot with multiple personalities.
August 22nd, 2008 at 4:32 pm
Real Estate Bull { 08.22.08 at 3:30 pm } Hi Rob, the gang at Vancouver condo are asking for Satv/Krissh, I suspect they won’t hear from him.
Seems funny he/it disappears the same time you do.
You aren’t by chance posting under different handles are you?
Your comment is awaiting moderation.
August 22nd, 2008 at 4:36 pm
My bet Satv is Rob,as per above post I tried to post on his blog, but he has a moderation flag on my ip address.
August 22nd, 2008 at 4:41 pm
“According to a recent report estate agents are the professionals that currently lose the most sleep, which many find unsurprising given the state of the housing market and the effects of the credit crunch. Estate agents have reported very low sales figures, and with housing sales having plummeted over recent months there are reports that thousands of estate agents could end up losing their jobs as a result of the situation.”
http://www.realestatebull.com/
August 22nd, 2008 at 4:41 pm
hey #38 nutster, costs money to tear down and build anew! yeah try buy fed land in hope and commute to bdk’s tower! sorry land making machine needed, even bdk did some research! don’t be jelous of browntown! ha ha
August 22nd, 2008 at 4:57 pm
Hey John, I am a nail gun repairman myself. Very, very busy and profitable work. Life has indeed been good to me and the missus. I too have several condos under contract. Mine will have really nice shiny kitchens and so I’m pretty sure I’ll be makin profits. Nice shiny kitchens are the key. Yup, pretty much irresistable. I’m going to stage them with a wok on the stove to bring the Chinese who will want to live here during the 2010 games. I hear they have Olympic fever. I just hope they don’t wait until London 2012. I figure the market will peak here about 2010 a few days before the Olympics.
August 22nd, 2008 at 5:38 pm
*yawn… wish this whole process would pick up… between Mats Sundin and the real estate market… I’m bored. Off to play soccer now, enjoy the weekend!
http://www.canada.com/calgaryh.....f1de8f0f5b
“Layoffs strike Calgary’s once-booming homebuilders”
Blah, blah, booms aren’t sustainable, blah blah, here comes the bust.
August 22nd, 2008 at 5:48 pm
Browntown,
“hey arit, you need longer arms and shorter pockets cheapo! suprised you shelled out for internet access! ha ha you’r missing a penny! ha ha”
Hey Browntown,
I agree with you. I AM cheapo.
You did not explain yet how you can have “all of the above” on 80k. Do you mind?
Regards,
arit
August 22nd, 2008 at 6:02 pm
Martin, John,
With the risk of wasting valuable electrons, I will try to address your common sense… I admit not being overly optimistic.
Think about added value. We all come here to read valuable information and share our own. You, John, and now you, Martin, chose the ‘sarcastic’ way. Which is funny.
But what value do we get from your posts? What do I know after reading your posts that I did not know before?
Even simplistic posts like “I walked my dog today in New Westnabymond and saw 23 ‘For Sale’ signs in 30 minutes” have value, as ‘reports from the trenches’.
If you have absolutely nothing to share, you could comment on other people’s ideas. That also has value, as other people do look for feedback.
But the constant rethoric a la parrot is just wasted scren real estate. Nobody gains anything from it, except maybe a few laughs, which are OK I guess, but I can also get them at Julie Gobson’s site (when it returns).
Best regards,
arit
August 22nd, 2008 at 6:08 pm
C’mon Arit, as much as I agree with you on the state of housing prices in the GVRD I think you’ve been blinded by your own bubble-induced rage. Not all construction workers are knuckle-dragging intellectual neanderthals. And not every construction worker has mortaged a $600k condo (ridiculous statement), pays $500 a month for their truck and $400 a month on fuel. Christ, most of the guys I know drive a POS or get a ride from a co-worker if they’re not taking transit. And in case you haven’t noticed, there isn’t exactaly a marijuana shortage in BC driving prices through the roof. Your budget is absurd.
Perhaps you might open your eyes a little and consider NOT painting whole swaths of a workforce with the same brush in your apoleptic fury at the blue collar worker.
August 22nd, 2008 at 6:16 pm
Pardon Me,
“I think you’ve been blinded by your own bubble-induced rage”
I think you totally mis-understood my post. I claimed that this budget is NOT possible. This situation CANNOT be happening. I actually agree with you. And in order to prove that, I drew a budget with the abovementioned claims showing that clearly they cannot be true.
So, to summarize: The claim of 80k construction workers with expensive condos, new shiny trucks and Marijuana cannot be true.
I would guess that, out of those who make 80k, SOME have condos, SOME have trucks, SOME have pot, and some have all of the above with debt.
Is it clearer now?
Regards
arit
August 22nd, 2008 at 6:30 pm
“apoleptic fury at the blue collar worker”
If you only knew my past… LOL! you would not be saying that.
I assume you meant ‘epileptic’.
Regards,
arit
August 22nd, 2008 at 6:37 pm
Pardon Me, calm down and smoke a joint!
I too walk past the Dodge Superduty Diesels and Hemi 300C’s at the construction sites. If you think that these guys aren’t enjoying their big pay day now then you’re nuts.
One carpenter told me he made the same wage from 1973 until the last five years when his wage doubled (+overtime he’s making 6 figures).
To Give you some credit his daily driver is a mid 90′s caravan. He figures the majority of his co workers are alcoholics and have kids etc.
It looks like Arit and Pardon Me are saying the same thing.
$60-80K is a high wage and yet it won’t even buy a poorly built condo outside a homeless person camp like TV Towers (which will easily drop 80% in the next decade).
August 22nd, 2008 at 8:42 pm
Arit:
I think he meant “apoplectic”, which means “get so mad you think you’re gonna burst a blood vessel”
Imaging being trapped in a room with Satv. Thumbs and / or Rob A. for a week. That would drive you to an apoplectic rage.
August 22nd, 2008 at 8:59 pm
apoplectic
“get so mad you think you’re gonna burst a blood vessel”
That is value added to me, a new word. Thank you.
August 22nd, 2008 at 9:23 pm
I worked a few years in construction and the only guys I saw sparking up on site were roofers.
No carpenter I EVER worked with would so much as drink a beer before tools were rolled up. It’s too dangerous.
Maybe I worked with different cats, but that’s my experience.
August 22nd, 2008 at 9:33 pm
There’s a lot of general labourers on construction sites. You know, the guys hired at those storefront offices. I bet this is the source of the pot smoke more than the trades.
August 22nd, 2008 at 10:13 pm
“In addition to Radical laying off workers, Riptown (or Fiver Media) has also made redundant 100+ workers. I also hear that Business Objects will soon be packaging off most of the downtown Vancouver operations, except for Sales and IT Operations. Going to be a lot of stretched mortgage payers soon!”
Backbone Entertainment just let go a bunch of people too. There’s a lot of software engineers and artists looking for work right now.
If EA continues it’s slide, expect a round of layoffs early next year.
August 22nd, 2008 at 10:53 pm
I heard blastradius was doing some downsizing as well – unless the economy picks up we’ll lose some decent paying tech jobs all over.
August 23rd, 2008 at 1:35 am
Can anyone shed some light on why all these game companies and media companies are getting rid of workers? Is it generally a symptom of a global recession?
August 23rd, 2008 at 4:41 am
It’s a sign of a consumer recession, when J6P runs out of spending money. Any number of indicators show it has arrived in the US in force.
You can also have an investment recession, where business spends less money on new facilities and new products, which is what the dot-com bust of 2000 was.
The upcoming recession actually looks like a combination of consumer and investment (new RE is investment). A double whammy.
August 23rd, 2008 at 8:31 am
Basic stuff, government prints cheap money, which somehow has to be fed into the real economy by way of ultra low interest rates (lower than inflation).
Greater fools borrow the money to buy inflated assets; inflated because it’s faster to inject cheap money into the economy than to build homes, and so for a couple of years there are more fools with money than homes.
Eventually the artificially inflated demand is met with an actual oversupply of homes is created as is the case now.
The crash is in the early stages. It’s not different this time. It never is.
The Real Estate Pimps have pulled it off again in Vancouver, and they will pull it off again in 20 years or so.
August 23rd, 2008 at 8:42 am
For a good laugh check out this link:
http://www.canada.com/montreal.....50e553fc43
An economist /RE /Mortgage pimp explains why it’s different in Canada.
But of course it is not, is the commentator stupid or a liar?
August 23rd, 2008 at 9:08 am
In the Ruins of the Housing Bust, the Price of an Illusion
“How long will the economy have to pay the price for that illusion? The experience of Merced, which rose higher and fell faster than nearly anywhere else, suggests that recovery from the national real estate debacle will be painful and protracted.
In the three years since housing peaked here, the median sales price has fallen by 50 percent. There are thousands of foreclosures on the market. The asking prices on those properties are so low that competitive bidding, a hallmark of the boom, is back.”
Yep, the big five-o. Can’t happen here of course.
August 23rd, 2008 at 10:43 am
“Can anyone shed some light on why all these game companies and media companies are getting rid of workers? Is it generally a symptom of a global recession?”
Low-cost entertainment isn’t affected by recessions and depressions.
Radical laid people off because their parent company, Vivendi, merged with Activision to become Activision Blizzard. The new Activision Blizzard wants to focus on games with mega-hit potential, and they didn’t believe Radical’s games all had mega-hit potential. So, Radical canned the projects Activision Blizzard stopped funding.
The high Canadian dollar has an impact on Canadian game companies, especially in Vancouver. Most of the games made in Vancouver are not original IPs. The publisher owns the IP and picks the development studio they believe will do the best job in developing a product using the IP. The developers are completely dependent on the publisher supplying the IP and the money to keep the studio running. If the Canadian dollar is low, the Vancouver studios are more attractive to American publishers because the costs are much lower. Same thing is true in movie and television production.
EA laid off about 100 people in Vancouver in 2005 when their stock took a big dip. Their stock has been stagnant for years, but is on a steady decline this year. If it continues, I expect to see them layoff another 100 or so people in Vancouver (cancelling Yaletown studio is a prime candidate).
August 23rd, 2008 at 11:01 am
Vancouver’s still a pretty good job market for software developers even with the game layoffs. Most guys in the business of writing games aren’t all that attractive to business software houses. C++ just isn’t used much outside of mass produced software like games and operating systems etc.
I’d say the IT sector is one sector that will do fine in this whole thing which is cool since I work in the industry. Most business apps are about making an enterprise more efficient and saving them money. That’s not exactly the number one thing to slash.
IT isn’t really deep into construction. Few construction firms use any kind of software other than the shrink wrapped stuff. Banks and investment firms usually have a back office shop of some sort but they’re not into huge projects and all that stuff is run out east anyway. Same deal with retailers.
August 23rd, 2008 at 11:20 am
Here is a clip from BNN on the gaming industry…go to 15:33 minutes.
http://watch.bnn.ca/#clip47152
August 23rd, 2008 at 11:23 am
James, I am in ‘the biz’ too, but I think you are being a tad optimistic. You have the 100 video game jobs + 100 jobs at fiver media (a Java development shop), ok, maybe absorbable. But, if SAP Businss Object ‘rationalizes’ its workforce and does away with most development in Van., I think this would be a huge supply shock to absorb. Can anyone confirm how many hundreds of employees SAP BO has? A lot of these jobs would be in the 70-100K range, which is actually in the upper deciles of earners.
I also think that ‘business apps’ or any IT that is not revenue critical would for many companies be one of the first considerations for a budget cut.
August 23rd, 2008 at 12:21 pm
“Yep, the big five-o. Can’t happen here of course.”
From what I’ve been reading, some areas in California and Florida have passed six-o. Three years ago, most outspoken bears wouldn’t have dared suggest this. This is making it hard to guess the bottom for Vancouver.
August 23rd, 2008 at 12:23 pm
I’d be surprised if SAP left Vancouver, wages here are cheap compared to the US. Also, most IT projects underway or maintenance gigs are revenue critical to businesses.
August 23rd, 2008 at 12:42 pm
From the LA Times re. Olympic let-down in Beijing (edited here for brevity):
“Many in Beijing were counting on a tourism bonanza, but it didn’t happen.
Li Qiang…expected his Sichuan restaurant, a couple of miles from the Olympic village, to be packed with tourists during the Games. But it’s been unusually quiet. One day this week, business was so slow that Li let two of his seven staff members go home in the middle of the lunch hour. Three others sat in the corner watching television.
“Everybody thought the Olympics would be great for business,” he said. “It turned out differently.”
Many owners of small restaurants, hotels and shops in Beijing are wearing long faces this summer, especially those who poured their life savings into buying businesses or sprucing up their shops ahead of the Games.
Apartment owners, too, had hoped to cash in on the bonanza, with some jacking rents up to five times normal levels, according to the official New China News Agency. But of more than 20,000 apartments posted for short-term rent, only 8,000 were leased during the Games, it said.
“Business is a little better because of the Olympics but not a whole lot,” said Zhang Yanjuan, a saleswoman at a shop selling fake Polo and Abercrombie & Fitch shirts…”Everybody said that when the Olympics come, we would make a small fortune. But everybody was wrong.”
August 23rd, 2008 at 1:11 pm
“‘Everybody thought the Olympics would be great for business,’ he said. ‘It turned out differently.’”
So short-sighted. We all know the Olympics will pay back in tourism revenue for decades to come after the world sees what a great place Vancouver is. This comes from watching the biathalon and speed skating. Add to that all the rich Asians that will come just for the Olympics and decide to move here with all their money. I can’t think of a better time of year than February to showcase Vancouver and all it has to offer, especially the beaches. Ski one minute, go for a dip in the ocean the next.
August 23rd, 2008 at 1:22 pm
But of more than 20,000 apartments posted for short-term rent, only 8,000 were leased during the Games, it said.
And remember folks, that’s the summer Olympics, the big one. How many do you think will be rented out here for 2010?
August 23rd, 2008 at 1:23 pm
James, if you look up US IT wages on salary.com you’ll see that with the dollar near par, Canadian IT wages are pretty much equivalent, if not higher.
August 23rd, 2008 at 1:51 pm
Jesse, February, June, it doesn’t matter, we have the best real estate anywhere.
August 23rd, 2008 at 1:58 pm
What really bugs me about this whole Olympic lie is that the most vulnerable will pay the price.
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?
August 23rd, 2008 at 3:52 pm
Le Grand Mensonge,
Can you expand, please?
Wow, things are sure heating up. And across the country it seems. These are very interesting times. The shocking thing, for me at least, is that I still know people that are seriously in the market to buy. I’ve tried to talk them out of it but they simply aren’t willing to listen. They seem to have fallen for the line of BS that renting is throwing away money and that owning will be the financial and emotional manna they have been waiting for. I’ve given up trying to be honest, any mistakes they make are their own fault from here on in.
August 23rd, 2008 at 3:54 pm
James, Biff, I believe Biff is correct at least in the area I know, software development, wages look to be around the same in the US as here with the dollar where it is. New York will certainly be more and possibly a couple other markets, but most places are probably similar wages to Vancouver.
James said:
“Also, most IT projects underway or maintenance gigs are revenue critical to businesses.”
This may be true. But, certainly, if the company is based around delivering a product or the product is the core revenue generator for the company, it’s hard to cut. But we’ve just seen 200 let go in this case, who were working on revenue generating products. I personally had a sendoff Friday for a colleague let go from a ‘maintenance gig’, American parent company called and ordered layoffs (not in Van).
but I was originally commenting on what you said here, which was related to companies using IT for non-core needs:
James said:
“Most business apps are about making an enterprise more efficient and saving them money. That’s not exactly the number one thing to slash.”
My point here was that if a business is simply consuming software X and required Developer Y to maintain for some non-core need, then these are ripe for cutting back.
If you are talking about local companies like SAP and Pivotal and the products they produce, I would say in a global downturn, the use of their products around the world might certainly be scaled back around the world, leading to layoffs in Van.
August 23rd, 2008 at 4:25 pm
“But, certainly, if the company is based around delivering a product or the product is the core revenue generator for the company, it’s hard to cut.”
Historically tech has been one of the most cyclical industries around. Maybe this time it’s different.
August 23rd, 2008 at 4:33 pm
I have to chime in with one point. A major point of difference between Canada and the US is the fact that we do not have an ‘at will’ form of employment relationship here. For local development studios that operate by fulfilling contracts with publishers, that may not make a difference. But for companies that are actually foreign-owned, it does. At will employment is much less risky and far more predictable from an employer’s standpoint, which is why so many american firms try to use employment contracts that try to replicate the concept here in Canada. (alas for them, the courts don’t take kindly to that).
Even if wages are a bit better in Canada, some companies may not like the idea of having too much latent uncertainty on the human resources front.
This could be a factor in some of the layoffs. I’m not sure, but I thought it was worth mentioning.
August 23rd, 2008 at 5:00 pm
BS Expert Realtor Says:
“Jesse, February, June, it doesn’t matter, we have the best real estate anywhere.”
The sad part is, that’s not that far off from the truth, if price alone were to equal “best” or “greatest ” for example. We’re in for a treat.
August 23rd, 2008 at 6:00 pm
Are there any readers here that work in the IT industry in Vancouver? I had thought of moving out there a few times but housing was just to expensive to make sense.
August 23rd, 2008 at 6:10 pm
“Even if wages are a bit better in Canada, some companies may not like the idea of having too much latent uncertainty”
This is true to some extent though often satellite offices have a difficult go of it in terms of lobbying for new projects (not just existing ones). You generally need to bring something more to the table than status quo or the costs and inefficiencies of the remote office are not justified. Nokia basically shut down their San Diego office but kept the Vancouver one; so much for latent uncertainty.
As a comparison, ask a company with employees in Germany how easy it is to lay someone off there.
August 23rd, 2008 at 6:20 pm
Price Vancouver never goes downward because any earth making machine. I buy towers tv in order to obtain the rich but market it goes downward so now I idiot
August 23rd, 2008 at 6:32 pm
thanx to bring that forward.anybody should have been ask me frankly. I work for westfair,loblaw,and pc.for bc’s number one billionaire galen weston(canadian)number 2.I get my pay cheque after tax so no scam.
August 23rd, 2008 at 6:38 pm
If us mkt. stay up while they are dealing with terrorism,Vancouver will fly high over mountain.Do you think us will help canada to grow up so they decide to fight terrorism till 2010.So when we have a potential to grow heven high some one is holding our legs like wrestler,what will happen as soon us will with draw from Iraq and Afghan their economy will climb the chart right away but till that time Vancouver will cross 2010(opportunity to grow)then this same no people will bite their nails while looking at us mkt. up BEWARE OF US do not loose golden chance.
Vancouver is beautiful city of the world.Peaceful most advance awesome buses and skytrain convenient,pullution free ,lots of beach,mountains,night life, very creative and cost of living is very high(ICBC and HYDRO is hard to handel monopoly)There is no country in the world have street like Canada world is very congested but not canada these all facts gives Vancouver real estate to grow more as prices over here are still very cheap compare to Chicago,New York,Central London,Hong Kong,Bombay,and New Delhi people have a chance to fill the gap I am sure Vancouver will go up to $1000 squire feet very soon only its taking time to convince people because something new is happening first time people need time to digest
August 23rd, 2008 at 7:44 pm
Historically tech has been one of the most cyclical industries around.
Tech in Vancouver actually did well during the 1982 recession because of the boost from the introduction of the IBM PC a year before. I mean software for the broad market, not IT departments of local companies.
But the 1982 recession was quite local (western Canada, SW US).
August 23rd, 2008 at 7:54 pm
buff_butler
“Are there any readers here that work in the IT industry in Vancouver? ”
Yes, a few… How can we help?
Regards
arit
August 24th, 2008 at 1:10 am
Hi arit,
Thanks for your reply,
I had been looking for developer contract positions in vancouver to start out but they seem to be hard to come by for durations over 6 months (aka anything useful). Is the preference out there for salaried positions or is it just the head hunter companies i’m dealing with? If this isn’t the case who do all the government agencies list with? Also the gap between salaried and contract seems quite small wich is strange.
Currently im in edmonton and anyone with ~5 years experience secure a very good contract for 1-2 years. Vancouver doesn’t seem to be the case despite the “olimpic hype”.
Thanks,
buff_butler
August 24th, 2008 at 2:49 am
My neighbor just dropped the price of his house by 10% again. His house has been sitting on the market for 4 months now with no takers. It’s the third reduction he has made since listing his house on the market. This market seems to get worse by the minute.
August 24th, 2008 at 3:19 am
buff_butler,
I come and go in Van and can answer …
1) “developer contract positions in vancouver to start out but they seem to be hard to come by for durations over 6 months”
Yes, Van is not a good contracting market. More likely contract-to-hires, but these especially probably don’t pay good rates.
2) “Is the preference out there for salaried positions”
Yes, this is also true in my experience. I’ve worked at places that hate contractors.
3) “Contracting rates”
With the exception of a few bigger companies and some desperate gov’t projects, rates suck so bad that it’s often not worth it to contract.
August 24th, 2008 at 3:29 am
buff, you said:
“Vancouver doesn’t seem to be the case despite the “olimpic hype”.”
But, this is the hilarity, even you have the impression that Olympics will bring some economic miracle, you smell the hype .. but would you really believe the Olympics would create non-related jobs in business software development?
The same thinking is responsible for a good chunk of the housing appreciation we saw.
August 24th, 2008 at 8:29 am
Vancouver Crashes Yet Again:
Check your facts re; governments print cheap money. That is a common misperception, during the current “economic miracle” they didn’t have to, instead slashing regulations to allow the “shadow banking system” to create the imaginary dollars to enable this debt-fueled expansion. A lot of those dollars are currently sloshing around the economy, but are supposed to be paid back to entities such as China, Saudi Arabia, large private equity, and so on. This will never happen, only debate left is whether the imaginary dollars disappear via debasement (monetary inflation, as distinct from price inflation) or by massive defaults.
Either way out is painful, and will thoroughly piss off whoever holds that long-term debt, and may well involve the Government starting to print dollars, but up to now has been a very clever shell game, with one real dollar pretending to be under a hundred different shells at once. Borrow and spend! Great way to have a party, and as long as money is being loaned at an ever-increasing rate the party continues. That credit door slammed shut a year ago, (perhaps you’ve heard of the credit crunch?) and I don’t know the next chapter. I’m pretty sure it’s not pretty, but it hasn’t been written yet.
August 24th, 2008 at 8:41 am
The whole 2010 thing had a lot of the same boosterism as the RE bubble. In both instances, most of the same people convinced that RE only goes up were soundly convinced that 2010 would launch us into an economic nirvana.
August 24th, 2008 at 8:45 am
Denninger writes a great rant, and his latest is about a debt-fueled party drawing to it’s ugly end.
http://tinyurl.com/3g4ofg
Canada is in much better shape, but only by comparison. And if you think events in the US don’t affect us….. You want to buy some flipped pre-sales?!
August 24th, 2008 at 9:16 am
http://tinyurl.com/3nmegw
Mish has a great report on what really happened to the Chinese business and RE investors during the games.
Calgary and Montreal got nothing…..so did Beijing. But Vancouver “is” different….right ?
August 24th, 2008 at 9:24 am
Alexcanuck: Great summary of the credit shell game. There’s commentary in this weekends globe that helps put the US ‘fiscal gap’ of $70 trillion into perspective:
http://www.reportonbusiness.co.....Blogs/home
To earn $70-trillion in profit, you’d need 1,723 companies the size of ExxonMobil; $70-trillion would be equal to the annual sales at 1.35 million Wal-Mart stores. That’s not the size of the U.S. government’s debt, though. It’s the shortfall between its projected future revenues and what it plans to spend (in today’s dollars).
The US, by the way, is the big country to the south that buys 75% of our exports. Their financial melt-down will burn us bad.
August 24th, 2008 at 10:10 am
There’s some excellent discussion of the Olympic myth over at Mish’s blog, including mention of Vancouver – http://globaleconomicanalysis......-bust.html
August 24th, 2008 at 10:11 am
most of the same people convinced that RE only goes up were soundly convinced that 2010 would launch us into an economic nirvana.
Not so! The bubble blowers are under no illusion as to the nature of bubbles. They get paid by boosting, and most are safely out of it by the time the bubble pops. It is naive bubble participants that get burned.
August 24th, 2008 at 10:31 am
“Vancouver, London, Chicago Take Note
Similar disappointments are what Vancouver 2010 and London 2012 have to look forward to. Chicago 2016 (a hopeful) should take heed but it won’t. Chicago may be in better shape because the recession is likely to be over by 2016, but I still doubt it would be worth the expense
Many will suffer, few will benefit. Vancouver in particular is unlikely to be prepared for such an outcome. All that glitters is not gold.”
not so fast vancouverites
August 24th, 2008 at 11:02 am
There are no more “price reduced” in the Fraser Valley RE ads. Now “NEW PRICE” seems to have replaced it.
August 24th, 2008 at 11:29 am
BuffButler
Contracting is not so popular around here. The big contracts are usually exported to India. In the serious companies most employees are full-time or contracted before hired.
BTW, the word in the IT industry is “silent-alarm” aka freeze hire all across. No recession here?
Regards,
arit
August 24th, 2008 at 12:00 pm
#97
Many will suffer, few will benefit. Vancouver in particular is unlikely to be prepared for such an outcome. All that glitters is not gold.
Thanks for the link squidly. Mish is always on target.
August 24th, 2008 at 12:21 pm
AlexCanuck
your response to “the same people convinced that RE only goes up”
“Not so! The bubble blowers are under no illusion as to the nature of bubbles. They get paid by boosting, and most are safely out of it by the time the bubble pops. It is naive bubble participants that get burned.”
Yes, but those people you’re speaking of are not convinced that RE only goes up, they’re just pretending. The ones who are convinced are the suckers who own 2 or more properties and are planning on retiring in the next 10 years or earn a wage far less than is needed to maintain their mortgages.
August 24th, 2008 at 12:52 pm
“Yes, but those people you’re speaking of are not convinced that RE only goes up, they’re just pretending. The ones who are convinced are the suckers who own 2 or more properties and are planning on retiring in the next 10 years or earn a wage far less than is needed to maintain their mortgages.”
BINGO!!!!!!!!!
“they’re just pretending”
Exactly and they make a lot of money at it, radio talk show hosts,TV anchor, RE get rich quick seminar pimps,and also, (we won’t name names,)a slimy, slithering, cagey realtor/blogger,who get’s tons of free advertising from us bears.
August 24th, 2008 at 1:41 pm
Denninger rant:
Canada may be in better shape, but here in BC we have a -7 or -8% savings rate. Its probably worse in the Vancouver area.
Back in the 80s recession, most people actually had savings, along with much less debt. We also had a stronger social safety net. IIRC At one time EI (UI) covered 80% of wages. Now its usually about 50%.
So my guess is a recession equivalent to 1982 would have much more dire consequences this time. You can let your imagination run wild as to how bad it will get.
August 24th, 2008 at 2:04 pm
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.
August 24th, 2008 at 2:54 pm
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.
August 24th, 2008 at 3:18 pm
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.....ref=slogin
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.
August 24th, 2008 at 3:20 pm
Arit, What sector of IT are you in?
August 24th, 2008 at 3:38 pm
Heard there’s a hiring freeze on at Sage/Accpac.
August 24th, 2008 at 4:47 pm
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
August 24th, 2008 at 5:05 pm
#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.
August 24th, 2008 at 5:40 pm
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 since 1980.
I expect they’ll sell, maybe for $50,000 or so off the asking, to one of those young couples wandering about with their kids in tow looking for an extreme home makeover.
August 24th, 2008 at 10:35 pm
Thought this was pretty good, albeit from a UK perspective
http://www.youtube.com/watch?v=v8GPgBM_crU
August 24th, 2008 at 10:44 pm
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.
August 25th, 2008 at 12:17 am
“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 diploma was twenty years ago. Most jobs require some post-secondary education (whether it’s needed is another story). People returning to school to get second or graduate degrees are adding to the enrolment. International students also make up an increasing proportion of the student population. The latter pay higher tuition fees so post-secondary institutions love them.
Technology will have a bigger impact than enrolment levels. Once it becomes acceptable to deliver lectures and classes completely online, there will be less need for lecturers, etc. But with a good proportion of their employees nearing retirement, the likely scenario at post-secondary institutions is lower employment through attrition.
August 25th, 2008 at 1:15 am
“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.
August 25th, 2008 at 2:37 am
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.
August 25th, 2008 at 5:10 am
Actually, the average family income for Vancouver in 2000 was $70,000 ($75,000 for couples) http://www.bcstats.gov.bc.ca/d.....onincl.pdf
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.
August 25th, 2008 at 5:18 am
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.pdf
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.
August 25th, 2008 at 5:22 am
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.
August 25th, 2008 at 7:47 am
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.
August 25th, 2008 at 8:01 am
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.
August 25th, 2008 at 8:42 am
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 few months ago these people said that real estate would never ever slow down and prices could never fall.
August 25th, 2008 at 9:38 am
Patriotz
“Actually, the average family income for Vancouver in 2000 was $70,000 ($75,000 for couples) http://www.bcstats.gov.bc.ca/d.....onincl.pdf
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.
August 25th, 2008 at 10:54 am
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.
August 25th, 2008 at 11:32 am
drachen, that quote was from sheepless. My point was the same as yours, that it is the median that matters.
August 25th, 2008 at 2:24 pm
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.)
August 25th, 2008 at 5:35 pm
Backlog of US homes for sale is worst on record
http://www.independent.co.uk/n.....08689.html
August 26th, 2008 at 10:16 am
Higher number of MLS listings is having a negative impact on the prices, everywhere…