July 2008: Vancouver prices ‘deflating’
Deflate. That’s the word the Vancouver Sun is using in their report of July sales data from the REBGV:
The so-called benchmark price for all property types in Metro, excluding Surrey, hit $556,605 in July, down 2.1 per cent from May.
“We’re seeing more price reductions in properties listed on the market, which is a levelling impact on the housing price increases experienced at the end of last year and into the first quarter of 2008,” Dave Watt, president of the Real Estate Board of Greater Vancouver, said in a news release.
The numbers from out in the Fraser valley are in as well and looking at least as bad. The Surrey average detached-home sale price is down six percent from June. As Mohican brings to our attention Chilliwack saw the average house sales price drop 9 percent last month and is now negative year-over-year.
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mohican Says:
August 5th, 2008 at 4:32 pm
Well, here we go folks. The downward slide begins in earnest. I think ‘earnest’ is somewhere near Surrey.
Year Over Year price declines are on order for next month methinks – in the Fraser Valley anyway.
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jesse Says:
August 5th, 2008 at 4:39 pm
For you Westside wannabes:
VW detached
Jun $1,456,122
Jul $1,390,585
-4.5% MOM, or 65 big ones.
Chump change, my dear sir.
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Ultraman Says:
August 5th, 2008 at 4:41 pm
Alleluia!
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DaveD Says:
August 5th, 2008 at 4:42 pm
6%? So we’re already over halfway to the commonly cited “maybe a 10% reduction” figure.
It had better level off pretty darn quickly.
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Dave Says:
August 5th, 2008 at 4:45 pm
That’s a pretty high decrease for Surrey.
The 1% declines in the other markets doesn’t surprise me and is in-line with my prediction for an approximate 5% decrease for the second half of 2008.
I would speculate that the high price of gas has removed a lot of buyers from considering Surrey and the Fraser Valley. I predict any drops in those markets to be higher than Vancouver, Burnaby and North Van, which have better transit options.
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Not Mathy Says:
August 5th, 2008 at 4:49 pm
Only a $65,000 price drop on the west side? Pshaw! I guess thats almost enough to keep you in lattes and Lulemon pants for a year, but you can’t paint a latte, and you can’t take out a line of credit on lulemon pants. believe me, I’ve tried.
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jesse Says:
August 5th, 2008 at 4:52 pm
5% YOY is a significant figure for recent flippers because that is roughly the break even point including transaction costs.
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bcubbins Says:
August 5th, 2008 at 4:55 pm
The numbers from out in the Fraser valley are in as well and looking at least as bad.
Did you mean to say “at least as good”??
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Dosh Says:
August 5th, 2008 at 4:57 pm
Good for people looking to buy, but none of you are buying are you?
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JB Says:
August 5th, 2008 at 5:03 pm
Hundreds of banks will fail, Roubini tells Barron’s
http://www.reuters.com/article.....0720080803
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Drachen Says:
August 5th, 2008 at 5:03 pm
Dosh
“Good for people looking to buy, but none of you are buying are you?”
None of us are buying NOW that would just be plain stupid. We’ll wait until prices correct to a reasonable proximity of market fundamentals and we’ll laugh at chumps like you all the way to the bank.
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bdk Says:
August 5th, 2008 at 5:23 pm
Again I am writing to question Dave’s motives.
If you really live in Victoria what are you doing on a Vancouver Condo blog other than vainly spreading disinformation?
Are you purposefully hoping someone will believe your spin in the hopes they will go bankrupt? Or are you trying to sell something?
That was nice of your Wife to deny your identity.
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Strataman Says:
August 5th, 2008 at 5:44 pm
Dosh “Good for people looking to buy, but none of you are buying are you?” Of course not!
My three adult kids now believe me and are SOOOO happy they are sitting with their downpayments…impatient yes but now they are believers, I said wait three years and pick whatever you want at 40+ % off! And they are gonna! 
Me Proud!
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Vansanity Says:
August 5th, 2008 at 5:48 pm
I love reading the comments below the article! Check out C22’s if you haven’t already.
Not Mathy – You’re “not facty” either. I used white out, technically not paint (I sniffed, no high), anyhoo, I “painted” my latte this morning whilst on the phone… so get your facts straight. You CAN paint your latte! It’s a stock, that you can’t paint, although I hear they actually used to give paper as representation of the stocks and you can paint them too… so…ya, not sure where to go with that…and so on and so forth.
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Dave Says:
August 5th, 2008 at 5:48 pm
BDK, if you read the prior thread you will see that Pope has already confirmed that I have nothing to do with ‘Dave@revnyou’ or ‘the source’.
I only recently moved to Victoria and have always lived in the GVRD prior to that. I am not selling anything. I am not working on anybody’s behalf. I am simply sharing my informed opinions on the real estate market.
This will be my last post on the subject. I think Pope is getting impatient with these silly conspiracies. Let’s stick to the discussions. If you have something intelligent to contribute, then please do. Otherwise, please crawl back to your cave (rented).
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Strataman Says:
August 5th, 2008 at 5:51 pm
Dosh one of them might be your neighbors in three years and you can go to the Strata meetings together and insist on increased fees for more amenities that the newer owners (at 1/2 the monthly mortgage payments) can easily afford!
Isn’t it great to look forward to new cash flow positive blood in your neighborhood? 
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condohype Says:
August 5th, 2008 at 6:06 pm
Why is it when talking about price drops the media sounds like they’re talking about erectile dysfunction? “Deflating” prices? A “softening” market? It’s pathetic.
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bdk Says:
August 5th, 2008 at 6:34 pm
“I am simply sharing my informed opinions on the real estate market.”
Is PR spin “informed”
Next thing you’ll be claiming tobacco has never killed anyone.
Why don’t you stick to the cafe’s in Victoria and keep your dumb ideas to yourself.
The Pope didn’t confirm that you are not the same person. You could be posting at home and at the cafe or from work but more likely than not you’re at a cafe since Mortgage Broker/Rookie investors don’t have much to do these days.
Say hi to Julie for me.
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blueskies Says:
August 5th, 2008 at 6:59 pm
I am simply sharing my informed opinions on the real estate market.
typo!
that should read:
“ill informed opinions”
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Strataman Says:
August 5th, 2008 at 7:00 pm
“like they’re talking about erectile dysfunction?” Judging from couples I know who are recent home buyers I would say there is a lot of “erectile dysfunction” at the moment!
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blueskies Says:
August 5th, 2008 at 7:23 pm
strataman:
a “flaccid” investor?
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Patiently Waiting Says:
August 5th, 2008 at 7:33 pm
Now that the smart money has sold:
“$325 MOVING SALE ASSIGNMENT -NON PROFIT,FOR SALE!!! (NORTH BURNABY)”
“BRAND NEW 1BED.+DEN. AT BRENTWOOD GATE,EXCLUSIVE AREA WITH NICE COMMUNITY AROUND..
CLOUSE TO THE HWY,UNIOVERSITY AND COLLAGE AND MALL IS EXCELENT PLACE FOR LIVE.
THIS NICE APARTMAN HAVE EVERYTHING:2BALCONIES,1 PARKING SPOT,STPORAGE,IN SUITE LOUNDRY,GAS FIRE PLACE,STINLESS STILL AND GRANITE COUNTERS,694SQ/FT.
PLEASE REPLAY FOPR MORE INFO.
PAY NOW SOME,AND RST BEFORE YOU MOVE THIS OUTUM….”
http://vancouver.en.craigslist.....35645.html
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crabman Says:
August 5th, 2008 at 7:47 pm
Otherwise, please crawl back to your cave (rented).
Don’t you mean our “soon-to-be-underwater-flipper” subsidized cave?
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blueskies Says:
August 5th, 2008 at 7:58 pm
STINLESS STILL
satv is that you?
tell me it ain’t so!
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Bluesman Says:
August 5th, 2008 at 8:13 pm
Woohooo!!!!!!! I ain’t got the blues no mo’
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M- Says:
August 5th, 2008 at 8:18 pm
So much for the theory about the Westside being unable to drop due to demand, desirability, and rich affluent buyers!
Vancouver Westside SFH median prices:
July ‘08: $1,326,500
June ‘08: $1,549,000 (DOWN 14% MOM)
July ‘07: $1,415,000 (DOWN 6% YOY)
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Patiently Waiting Says:
August 5th, 2008 at 8:20 pm
“For you Westside wannabes:
VW detached
Jun $1,456,122
Jul $1,390,585
-4.5% MOM, or 65 big ones.
Chump change, my dear sir.”
Really? The numbers I see for Westside SFH median are:
Jun $1,549,000
Jul $1,326,500
-$222,500 or -14.4%
Am I reading it right?
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Patiently Waiting Says:
August 5th, 2008 at 8:22 pm
Oh OK, M- found the same thing
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M- Says:
August 5th, 2008 at 8:38 pm
Heh, I beat you by two minutes, PW!
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/dev/null Says:
August 5th, 2008 at 8:39 pm
Benchmark versus median…
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M- Says:
August 5th, 2008 at 9:06 pm
REBGV SFH average prices:
July ‘08: $828,781
June ‘08: $904,167 (DOWN 8% MOM)
July ‘07: $831,195 (DOWN 0.3% YOY)
Peak: Feb ‘08: $920,643 (DOWN 10% off the peak)
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Dave Says:
August 5th, 2008 at 9:14 pm
Where are you getting your numbers M?
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M- Says:
August 5th, 2008 at 9:16 pm
Dave: I’m getting them from PaulB’s monthly stats on his website (nvcondos.ca), and from this month’s REBGV statistical release:
http://agentwill.com/statistic.....the-rebgv/
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John Says:
August 5th, 2008 at 9:20 pm
You would be insane not to buy a condo right now! This is probably the best time ever to get into this market especially with the new mortgage rules coming soon. I don’t think you’ll ever see such a great selection and such competetive prices for this world class city. Once the Olympics come and everyone snaps up condos you’ll be sorry.
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M- Says:
August 5th, 2008 at 9:38 pm
Taking the Westside SFH median a little further, it looks like the peak was Feb 2008.
Vancouver Westside SFH median prices:
July ‘08: $1,326,500
Feb ‘08: $1,625,000 (DOWN 18% off the peak)
(Note: I’m missing westside median data for Aug 2007 through Oct 2007; it’s possible there could’ve been a higher peak in there somewhere)
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Raincouver Says:
August 5th, 2008 at 9:44 pm
John says..
You would be insane not to buy a condo right now! This is probably the best time ever to get into this market…
I feel your pain, buddy.
Sometimes irony just doesn’t cut it, eh?
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islander Says:
August 5th, 2008 at 9:55 pm
This will be my last post on the subject.
And then he posts again 3 1/2 hours later.
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Dave Says:
August 5th, 2008 at 10:01 pm
Islander, I can only assume you are lacking in the reading comprehension department. The three key words that you didn’t pick up on were, ‘on the subject’. The subject in this case should be pretty evident. Let me know if you need help figuring it out.
If you have something useful to post, then please feel free to contribute. In the meantime, go back into your cave with bdk.
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jesse Says:
August 5th, 2008 at 10:01 pm
We can discuss ad nauseum benchmark vs median vs average. The latter two are inaccurate because they do not quality adjust. The benchmark is down 4.5% MOM and even more from the peak. We can infer the methods used, though opaque, have some semblance of mathematics behind and I doubt they are using cooked numbers. Note the benchmark was down June-July ‘07 as well (but not by much).
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scullboy Says:
August 5th, 2008 at 10:02 pm
John:
I love your posts. You are absolutely brilliant. Keep it up dude. You’re like the antithesis of Krrrrish…
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stagnate Says:
August 5th, 2008 at 10:07 pm
everyone and their dog would like a vancouver west side house but the very high end of the market weakens quickly. people retrench and the high end loses its move up buyers. i had the peak for the market in november, overall a 5% decline with another five percent baked in the cake based on current numbers. demand/supply/economic conditions are a bit clouded currently but should be a clearer picture by mid/late september.
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Gorky Says:
August 5th, 2008 at 10:25 pm
John,
Gosh what an enlightenment – of course people who visit for the olympics buy a condo here just in case some day they come back to Vancouver.
Kids, pack up we’re moving to Vancouver, after all they hosted the olympics.
Obviously I snappped up a condo at every vacation location I ever went to as they all happen to be on the ocean and very beautiful.
As scully mentioned, keep it up Johnboy you’ve got it all figured out
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scullboy Says:
August 5th, 2008 at 10:31 pm
It just occurred to me…. think of all the fun we could have if we went out and infected other blogs/ comment sites (Vancouver Sun, Chipman’s numbers) with John – like comments.
Glorious chaos
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John Says:
August 5th, 2008 at 10:32 pm
The upper crust in asia DO buy homes in every city they visit. It’s like the equivalent of the snow globe you buy on your trips to the Walmart in Blaine every now and then. Then there’s the Albertan oil patch workers who just go crazy and buy all kinds of property and toys everywhere they go. They’ll all be coming to the olympics. Sure, Toronto is staying home because they’ve stopped making cars and selling oil futures but down in the heartland things are good.
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stagnate Says:
August 5th, 2008 at 10:40 pm
that is really solid humour. i thought browntown’s post in the last thread was post of the day but i’m changing my vote to post 44.
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cashisking Says:
August 5th, 2008 at 10:40 pm
Watch what happens to the price of oil to see what will happen to RE prices in Vancouver … It had a 118 handle today down from a high of 147 … do you remember 147 – “we’re running out of oil, price is going to 200 (250 if your the russian oil minister)” … remember tech stocks … stock market is just much more liquid/quicker
Everyone can spout all the stats they want but this market is in for a big correction … split hairs with benchmark (remember your source – russian oil minister?!?) or median prices (inflation adjusted – do you believe CPI?!?) but look at the big picture and remember that it’s never different.
ps buy the HOD – Beta Pro ETF …. I just wish I could short VCR RE
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cashisking Says:
August 5th, 2008 at 10:45 pm
And no I’m renting after being in the market for 14 years and selling last summer … 8 bidders – the good old days!!!!
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condohype Says:
August 5th, 2008 at 11:06 pm
Global TV just reported that real estate prices across Greater Vancouver have dropped! I can’t believe it. It must be a lie. If only someone could post a screen capture to prove it.
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wolfey Says:
August 5th, 2008 at 11:18 pm
john…
I am going to try to put this politely. rich people, regardless if they are Asian or not are rich for a reason. They are good with their money. Why invest in Van or Canada when it is so much cheaper to buy in florida. or Arizona…etc RIGHT NOW. They aare at least 30% less than Van and there is way more selection. true Van does have mountains but Have you compared florida beaches to Vancouvers’ . There are many beach volleyball/ surfing tournaments( such as NKF Pro Am Surf Tournament…AVP Next/Wilson Beach volleyball National Championships, sept-October 2008)
thru a large portion of the year..even the famous Fort Lauderdale spring break. Do you have any idea the amount of revenue generated in those areas? How many such tournaments are held in Vancouver beaches…please tell me. There is only 1 Beach v-ball event @ kits for 2 whole days not even 2 monthes.
Vancouver is anice place but it’s not the best place in the world. I ‘m suprised no one has sued on thr basis of misrepresentation. So just open your eyes and smell the BC BUd because that really is our major export here in BC
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Re-diculous Says:
August 5th, 2008 at 11:23 pm
…I’m watching to see when Bill Good assembles the RE experts to see how they are going to spin this…I think Bill’s on holiday’s curently, so it’ll probably be within a day or two after his return
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jesse Says:
August 5th, 2008 at 11:56 pm
B.S. Good(rich) will point to summer doldrums and an improving US economy that will bolster prices in ‘09. Shall we take bets on what black swan he and the other “experts” will cite when prices are down YOY?
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wolfey Says:
August 6th, 2008 at 12:02 am
Hi John… Just so you know Iam telling the truth. Here are some Condo listings in Florida
http://fortlauderdale.condo.co.....h_Featured
http://miami.condo.com/Condo-F.....=MapSearch
http://jacksonville.condo.com/.....=MapSearch
http://palmbeach.condo.com/Con.....h_Featured
http://miami.condo.com/Condo-F.....h_Featured
Agreed some condos are overpriced but they just experienced a housing bubble that is now deflating.I ‘m sure most bull/ bears would pick these up in a snap if they were in the vicinity. Of course you would rather buy a$ 300 k plus 500 sq ft condo in downtown because we are the best place on earth.
personally i’ll take the emerald isle…pay in cash
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Gadwin Says:
August 6th, 2008 at 12:14 am
The median price for a SFH detached dropped $28,500 from $527,500 in June to $499,000 in July in the FVREB (http://www.fvreb.bc.ca/statist.....200807.pdf).
For the REBGV, benchmark price of a SFH detached dropped by $12,489 from $765,654 in June to $753,165 in July (http://agentwill.com/statistic.....tatistics/ for June stats, and http://agentwill.com/statistic.....the-rebgv/ for July stats).
Soft landing? LOL. Down 28K in one month for the FV doesn’t seem like a “soft landing” to me!
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andrew Says:
August 6th, 2008 at 5:31 am
@ Wolfey
True dat. Rich people didn’t get rich by buying overpriced goods, be it cars, companies, consumer goods, investments, or real estate. They get rich by buying things for less than they will be worth in the future.
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not cameron Says:
August 6th, 2008 at 7:22 am
… “prices are not under as much upward pressure…”
Right. Got it, Cameron. So will we see a 1% or a 2% decline before fantasy land returns to the market?
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Anonymous Says:
August 6th, 2008 at 7:23 am
Be nice to Dave, guys. I want him to still be around when prices have dropped his approximate 5% decrease for the second half of 2008 (that’ll be August), and continue on down. His spin is truly gifted, bass-ackwards but gifted. I find it hard to believe he is truly an impartial observer, too familiar with the talking points of the RE industry, and too willing to ignore refutations of his “facts”. Too literate and RE knowledgeable to be to be just ignorant and naive. Hey, Dave, be careful, you don’t actually BELIEVE the stuff you spout, do you? Do you know why SUCCESSFUL drug dealers don’t take drugs? Easy to make money selling kool-aid, but don’t drink it yourself!
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Re-diculous Says:
August 6th, 2008 at 8:23 am
Spin du jour:
http://www.canada.com/vancouve.....59df91719b
“Cameron Muir, chief economist for the B.C. Real Estate Association, said he doesn’t believe that there was a housing bubble that has now burst, but said there has been a change in the cycle….” interesting, he doesn’t deny there may be a bubble, he just doesn’t believe it.
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not cameron Says:
August 6th, 2008 at 8:25 am
Further to my earlier comment (#53), the distinguished Mr. Muir was on CBC’s Early Edition today preaching that the results from July are merely a summer slowdown. Nothing to worry about – economic fundamentals are sound, so move along folks.
Cameron: No one is disputing that the economic fundamentals are sound. The fundamentals were sound during the dot com era as well – sounder, in fact. But that didn’t stop overpriced stocks from correcting. The fundamentals are sound in San Francisco too, and yet the bottom has fallen out of their market.
Could someone please get these bloggers onto the CBC…
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blueskies Says:
August 6th, 2008 at 9:23 am
john:
rich people aren’t stupid
and stupid people don’t get rich
which succinctly explains your current position.
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Vansanity Says:
August 6th, 2008 at 9:57 am
John IS right!
In fact, we should be putting every last dime we have into condos in Beijing right now!
I wonder if it’s too late to get in on all the previously discovered places like Turin, Athens, St. Lake City, Sydney, Nagano, Atlanta, and Lillehammer? Too late? What am I saying? Time to get in!
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Jim Says:
August 6th, 2008 at 10:17 am
This Vancouver realtard is telling us now is the time to buy and that w can get in on “Hot Deals” Yup… they’re hot. Guess who is going to get burned…
http://vancouverrealestateblog.....ate-market
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blueskies Says:
August 6th, 2008 at 10:57 am
jim:
in memory of Jean Gibsons much beloved blog i posted a comment on this blog site…..
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Mr. Simpleton Says:
August 6th, 2008 at 11:11 am
Mwahahahahaha…Mwahahahaha…Mwahahahaha…
Sorry, I just had to use my favourite quote from Austin Power’s… Seems to fit so well.
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John Says:
August 6th, 2008 at 11:48 am
You people are hilarious. We have a slight decrease in sales volumes and you’re calling it a bubble? Vancouver is one of the top destinations in the world for people to visit. Most who come dream of owning property here and the rich Albertans and Asians know this. They’re smart smart people especially the Albertan oil patch workers. These are the cream of the crop and they rise to the top.
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Rob A. Says:
August 6th, 2008 at 11:52 am
I think that Vancouver will have a soft landing, especially downtown because it is a desirable place to live.
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bdk Says:
August 6th, 2008 at 11:57 am
John and Rob A. are right!
It’s not that $600,000 is too much for a one bedroom downtown or a 1500 sq ft townhouse in Ditchmond.
The real reason no one is buying right now is because all the Rich Asians are taking time off from buying red hot Vancouver condos to watch the Olympics!
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scullboy Says:
August 6th, 2008 at 12:08 pm
Vansanity:
I hear there are simply TONS of deals to be snapped up in Sarejevo.
And John, I adore your posts. It’s a fine line between tragedy and farce. Somehow you’ve managed to tango on the razor’s edge with a skill that would make Colbert green with envy. Kudos buddy and thank you.
Rob:
Yes, downtown is a desirable place to live. You’re probably too young to remember the Airport movies (the originals, not the sequals) but there’s a memorable moment when the plane is plummetig to earth and poor, poor Karen BLack, who played the stewardess, is screaming into the pilot headset “THERE”S NOBODY LEFT TO FLY THE PLAAAAAAAAANE”
THAT is the landing we’re heading for. The fools have all been locked in. There are no more buyers left. Some can’t afford it. Some won’t pay those prices. And some just aren’t in a position to make the commitment to living here permanently.
Enjoy the soft landing. I’ll be drinking mai tais sitting a safe distance away.
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Drachen Says:
August 6th, 2008 at 12:08 pm
Guys. 2 things.
1) John is just yanking your chain, unlike some of the others he doesn’t believe a word he’s saying.
2) The “rich people don’t get rich by being stupid with their money” argument is BS. It may be true for some or even most rich people but there is a significant portion of multi-millionaires who simply inherited or became wealthy more through luck than planning. You can’t assume that all rich people invest cautiously because the evidence is overwhelmingly against that proposition (you have to look no farther than the ‘High Rollers’ in Vegas who don’t blink at losing 20 million in a weekend to see the truth in this).
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Drachen Says:
August 6th, 2008 at 12:15 pm
By the way, a better counter argument for the “rich foreigners” argument is;
Landcor land registry keeps track of where land purchasers are from. Their tracking shows that fewer than 5% of purchases made in BC are from non-BC residents. In addition fewer than 2% of purchases are made from non Canadian residents. This small fraction may help cushion the fall slightly and it may help keep the bubble afloat longer but it is not enough to overcome the basic market fundamentals that apply to the other 95% of the market indefinitely.
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scullboy Says:
August 6th, 2008 at 12:19 pm
Drachen:
Your argument (2) can be summer up in 2 words:
Paris Hilton.
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bdk Says:
August 6th, 2008 at 12:20 pm
And don’t forget if you can’t sell to a rich asian right away you can always rent it to a poor renter who can’t rub two pennies together for $15,000 per bedroom. In fact rich asians love renting property for triple the market rate as much as they like buying it.
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toe-4 Says:
August 6th, 2008 at 12:27 pm
I’m going to have a little happy moment when we hit neg. nominal YOY (real YOY is negative for a lot of places).
Still, I have to admit to being a bit chuffed that Squamish (!!) is up 29% from last year. Yeah, ok, nice place in the summer, but 2200mm of rain is a lot of wet the other nine months. There’s so much (over) building there, and the number of for sale signs puts North Van to shame.
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Brian Says:
August 6th, 2008 at 12:47 pm
On a serious note regarding Olympics and long-term economic impact.
Beijing has been subjected to a continuous negative stream of press for the past six months regarding pollution. It’s right after Darfur and Rawanda on my list of places to visit now. Torino was slagged in a similar manner. How will the international media paint Vancouver? It will be interesting to see if we get hammered as hard as Beijing on a key political issue, such as homelessness. It could potentially decrease tourism demand for the “Best Place on Earth”.
Who here is more likely to visit Beijing? Less likely?
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Dave Says:
August 6th, 2008 at 12:52 pm
Squamish and Whistler are often considered to be countercyclic to the Greater Vancouver market. It doesn’t surprise me that Squamish is up while other markets are down.
There is a lot of new construction in Squamish to be sure and part of it is due to the limited amount of room available to develop in Whistler. I think these markets will do just fine going forward and will likely outperform the GVRD and FV. The upgrades to the S2S also make commuting from Squamish more feasible than before, but this may be off-set by current gas prices. The Olympics argument for real estate is often talked about and I believe that it will have a positive effect along the S2S corridor. However, I do not believe they will have any measurable impact on prices within the GVRD itself.
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richard Says:
August 6th, 2008 at 1:03 pm
cam muir was on the news a little earlier. he said re will be flat for a couple of years. prices will be down some months and up some months, is what he said. at least he’s not saying it’s all up up up…
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rx Says:
August 6th, 2008 at 1:06 pm
Interesting point Brian – The homeless situation is definately something Vancouver needs to deal with, that and the HIV rate in the downtown eastside being as bad as Botswana. We’ve got a lot of problems with mental health issues as well.
I read a lot of news out of the US and other countries and I’ve noticed Vancouver and BC being in their news a bit, but its usually for the sensational stuff like feet washing up on beaches and people getting attacked with a hammer downtown.
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Mr. Simpleton Says:
August 6th, 2008 at 1:10 pm
“at least he’s not saying it’s all up up up…”
Which was what he said not long ago.
Let’s see how many times he will “adjust” his market predictions looking forward from now… sheesh!
Farking shills, I hope they all rot in hell.
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bdk Says:
August 6th, 2008 at 1:12 pm
Brian, I would never have gone to China before but once I heard they were having the Olympics I took the first flight out of here to buy property there.
The same thing will happen here, rich Bulgarians will be flying here in droves to get a piece of the best place on Earth!
A long established chinese realtor (Old Timer) told me asians are selling in Vancouver to retire in China but I don’t believe him. He had a few $$$$ listings that he sold and said the buyers were mostly corrupt oil families but seriously what would he know about being asian or rich asian retirees?
Obviously he was just telling me the market was going down so I wouldn’t buy anything and he’d have more product to sell to his rich asian clients.
Besides what would I know about the downtown condo market I only live and work in real estate downtown.
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patriotz Says:
August 6th, 2008 at 1:22 pm
cam muir was on the news a little earlier. he said re will be flat for a couple of years.
It is not possible for prices to stay flat at bubble valuations and Muir knows it. Bubble valuations require increasing prices to compensate for the operating loss.
Muir is really expecting a bust. This is what the usual suspects always say when TSHTF.
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Matt Says:
August 6th, 2008 at 1:38 pm
There may be some truth to the bull’s conventional wisdom that downtown vancouver prices may not change. I would say that prime real estate in Coal Harbour or any of the very best buildings (location wise) may not see much change in price. As an example, in the UK, real estate prices are collapsing everywhere except in central London. Rents however are collapsing at the upper echelon of the market.
I would say that anyone who bought property in the Fraser Valley is fucked. Who in their right mind would pay more than 300k to live in a shithole like Chilliwack?
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Anonymous Says:
August 6th, 2008 at 1:42 pm
Matt “or any of the very best buildings (location wise) may not see much change in price” Would you consider Yaletown a best location? They are down 10-12% from last year in buildings I am familiar with.(The ones actually selling, not just listed).
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Ultraman Says:
August 6th, 2008 at 1:52 pm
The next illusion:
My building is different; it won’t go down in price.
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bdk Says:
August 6th, 2008 at 2:21 pm
Ultraman,
My building might leak a little bit but only for a little bit and then it will stop leaking.
Another thing that’ll happen with all these broke specuvestors is they’ll defer maintenance at strata meetings which’ll void their building envelopes warranty and then they’ll have to pay for the repairs themselves which’ll be fine for the 1% rich offshore investors but the overleveraged (Like Dave and his wife Julie who constantly post disinformation on this blog) rookie investor/rookie commercial mortgage brokers will be filing bankruptcy faster than you can say………
BEST PLACE ON EARTH!
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Matt Says:
August 6th, 2008 at 3:03 pm
I’m trying to offer a balanced perspective. You know, shine some light into the echo chamber. No I wouldn’t consider Yaletown to be prime real estate compared to say, a penthouse in Coal Harbour with an unobstructed view of the North Shore mountains. A Coal Harbour property has the advantages of being closer to Stanley Park as well as several blue chip law firms’ offices. If you were a partner in one of these firms, which would you choose?
What are the actual facts about prices of Coal Harbour real estate?
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jesse Says:
August 6th, 2008 at 3:04 pm
“It is not possible for prices to stay flat at bubble valuations and Muir knows it. “
Cam Muir is paid to spin things so as to improve buyer confidence and increase revenues for the RE industry. I commend him for attempting to do his job to the best of his ability. I hope his next tenure of employment will not have credibility as a requirement.
Other local “experts” have no obvious ties to a real estate lobby group and they still misuse and ignore data to claim the market is healthier than it really is. These are the ones I have even less respect for. Cam has little credibility left in my books but I’d expect nothing less, given his job.
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jesse Says:
August 6th, 2008 at 3:09 pm
“A Coal Harbour property has the advantages of being closer to Stanley Park as well as several blue chip law firms’ offices”
It definitely does. Coal Harbour has some great features and is in a great location for many but why then is the price-rent multiple so high? The renters in this wonderful location are not willing to pay to cover the ownership costs. Apparnently the view of the North Shore is worth less to renters than owners.
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TraderPaul Says:
August 6th, 2008 at 3:11 pm
I think there will be a lot of homeowners and investors under water in the next few years, but this won’t be fully reflected in the way of price reductions because the average person tends to “hang on to their losses” much the same way long term investors in the stock market will hold onto an unfavorable issue through a bear market rather than try to time a bottom. Its human nature not to sell at a loss, because then that loss becomes “realized” and not just a paper loss. Hard to quantify the exact effect on prices, but I think it hides a deteriorating market. I have friends who are recent buyers and their attitude is simply “as long as the market is not lower after 25 years” then they’ll be happy. That’s a long time.
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Matt Says:
August 6th, 2008 at 3:23 pm
How has the credit crunch not hit Canada yet? This utterly blows my mind.
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Dave Says:
August 6th, 2008 at 3:42 pm
I have friends who are recent buyers and their attitude is simply “as long as the market is not lower after 25 years” then they’ll be happy. That’s a long time.
And that’s a perfectly reasonable attitude. If they plan on living there for a long time, then why worry about prices? Home ownership is more than just an investment.
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Druid Says:
August 6th, 2008 at 3:52 pm
Hmm … on average Canadians change houses every seven years … how are you friends different TraderPaul? They will not have children in the next 25 years? They will never change jobs in the next 25 years? Smells like raltor BS – prices don’t matter so buy now and pay as much as you can.
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jesse Says:
August 6th, 2008 at 3:53 pm
“Its human nature not to sell at a loss, because then that loss becomes ‘realized’ and not just a paper loss. “
If they are not selling they are not making the market price. The ones that need to sell will determine what buyers will pay, not sidelined owners and not sidelined bitter renterbears.
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John Says:
August 6th, 2008 at 3:56 pm
BREAKING NEWS
Morgan Freeman has just been pronounced dead after a car crash in a 1997 Maxima. Morgan owned many many vancouver condos and was a classic car collector.
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jesse Says:
August 6th, 2008 at 4:01 pm
“on average Canadians change houses every seven years …”
Hey Druid, I have often wondered about that stat. Look at sales figures for Lower Mainland: around 40-50K per year on average. There are about 1M dwellings. The math doesn’t seem to work out, for owner-occupiers anyways.
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bdk Says:
August 6th, 2008 at 4:02 pm
Coal Harbour is great.
A real life example of a condo “investor”
Paid $500k one year ago.
With $125,000 down
Mortgage=$375,000= $2250 per month mortgage +$225 strata=$ 2,475.
Rent= $1400 (less 1/2 rent to the property manager for finding the tenant)
Loss per month is $1,075 plus that $125,000 could be generating $625 a month in a GIC =$1,700 loss per month to subsidize the tenant.
Now factor in that this “investor” will get $480,000 if he can actually sell it plus he’ll have to pay “Dave” $18,400 in realtor fees for having the receptionist put it on the multiple exchange.
So he’s lost $1,700 a month and on paper hisequity has gone down $3,200 per month for a cumulative loss of $58,800 in a year.
Of course the class of renters in Coal Harbour is quite good and you can expect to have a couple with a combined income of $120,000 or higher if you rent to a prostitute or drug dealer.
If demand ever goes up Coal Harbour is positioned well as 1/3 to 1/5 of the units are empty and speculator owned. If that supply dries up there are thousands more units about to complete in the $700k+ range which are also owned by unsophisticated speculators from the suburbs who’re just waiting for those rich Australians, or Bulgarians, or Indonesians or…..
Why not invest today? Put up your life savings on a speculative and highly leveraged investment Dave says it’s a good idea and he’s clearly not biased at all.
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Aleks Says:
August 6th, 2008 at 4:17 pm
Speaking of renting, the other day my fridge died. In addition to buying a new fridge and having it delivered the next day, our landlord let us put a bunch of stuff in his fridge to keep it from spoiling. It was pretty great all ’round.
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Ultraman Says:
August 6th, 2008 at 4:17 pm
TraderPaul said,
“Its human nature not to sell at a loss, because then that loss becomes “realized” and not just a paper loss.”
Not so sure about that, the more volatile markets become – the more emotional investors become about their investments.
Contrary to sound investing principles, investors tend to increase their purchases when the market is at its highs
while redeeming during market downturns.
This is quoted from “Cycles of Market Emotions” by TD Mutual Funds and I seriously doubt that homebuyers are anymore rational that mutual funds buyers since essentially they are the same people.
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Dave Says:
August 6th, 2008 at 4:26 pm
Why not invest today? Put up your life savings on a speculative and highly leveraged investment Dave says it’s a good idea and he’s clearly not biased at all.
Again, home ownership is more than just an investment. A home is also a place to live and love.
If you can find something you like, plan to live there for a reasonable period of time and can afford it, then in no way are you a speculator. If you are always trying to time the market, then you ARE a speculator. Nobody knows where the market will end up. It could only moderately correct and stagnate, it could drop by double digits, or it could even go up next spring. All these things have happened before. But, it is almost a guarantee that prices will go up over the LONG term.
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Drachen Says:
August 6th, 2008 at 4:38 pm
Dave
“If you are always trying to time the market, then you ARE a speculator.”
Don’t time the market price the market. Right now prices make no sense so buying is dumb.
“Nobody knows where the market will end up.”
Speak for yourself. I know within a 10% margin of error where the market will end up.
“Blah Blah Blah…. All these things have happened before.”
None of them have happened while fundamental values were so far below market values.
The market is dropping like a stone Dave. At what point do you admit you were wrong?
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jesse Says:
August 6th, 2008 at 4:42 pm
Dave: “Again, home ownership is more than just an investment. A home is also a place to live and love.”
Very true. At this point the intangibles of homeownership limit many to a small condo or a plot of land far from where they work. The third option is renting a nice place, far more than could even be possible by owning at today’s prices. The downsides of renting is more acceptable than what would have to be sacrificed to own an inferior property.
For such people there is not much else to lose by renting and speculating on price drops or simply migrating elsewhere.
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Dave Says:
August 6th, 2008 at 4:45 pm
The market is dropping like a stone Dave. At what point do you admit you were wrong?
I have yet to be wrong. I was right on the way up for the last 7 years. Incase you forgot, my future predictions to date are:
- approximate 5% drop in prices this Fall;
- a flat market for 2009 (+/- 5 to 10% of end of 2008 prices); and,
- less than 18970 listings in Greater Vancouver by October 1st.
I will admit I am wrong on a particular item when it is shown to be wrong.
How many years have you been wrong now?
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Anonymous Says:
August 6th, 2008 at 4:45 pm
An ice cold coke to go with the popcorn in my airconditioned (got a unit dirtcheap) computer cinema (<$550 rent with view) enjoying the bubblelicious show.
Maybe go for a dip later, after an iced coffee..(home made <25cents) It feels good not being broke. It feels good not to have to work my ass off. It feels good I followed this blog. I luuv my spot now, my home – no mortal mortages. Freeeedom!
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JJ Says:
August 6th, 2008 at 4:50 pm
Dave,
Just to clarify 5 % drop in prices this fall;
Surrey house prices dropped 6% in one month
(does this mean you are wrong?)
Of course you are going to give some spin of average, benchmark, medien, condo, house until you spin the numbers to your assessment.
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Dave Says:
August 6th, 2008 at 4:56 pm
Surrey is in the Fraser Valley so it doesn’t count. The Valley is going to get hit with bigger drops for a number of reasons.
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arit Says:
August 6th, 2008 at 4:56 pm
Dave:
“Again, home ownership is more than just an investment. A home is also a place to live and love.
If you can find something you like, plan to live there for a reasonable period of time and can afford it, then in no way are you a speculator. If you are always trying to time the market, then you ARE a speculator. Nobody knows where the market will end up. It could only moderately correct and stagnate, it could drop by double digits, or it could even go up next spring. All these things have happened before. But, it is almost a guarantee that prices will go up over the LONG term.”
So why should I worry about all that? Why?
I’ll keep renting a 3 bdr TH for 1000 CAD. Forever if I have to (I cannot be kicked out). My TH is MUCH bigger than any condo I could afford. And I have no headaches. The difference is saved religiously.
BTW:
We saw a few open houses this weekend,for giggles, here in Richmond.
Brand new 4 bdr TH from developer: 565$
SAME Brand new 4 bdr TH from flipper next door: 535$
Another brand new 4 bdr TH from developer, bigger: 625$. In a very nice 91 unit NEW complex.
60% units sold in that complex, said the hot young lady. arit et family took pictures of all the SOLD signs in the complex for future Sticker-Flicker comparison.
The hot young lady also said that her parents bought a house for 27,000 and sold for 200,000, Real estate is always a good investment (“as long as you are not a flipper” – she actually said that).
We replied that if she could guarantee such return in that same complex I do have my checkbook with me. She could not, unfortunately. Too bad.
We told her we shall wait ‘a bit more’ until house prices come down. She said it’s not a good idea since IF prices come down, the selection will not be as it is today.
I preferred to shut up at that stage, not to embarrass Mrs arit and the three little clones.
Regards,
arit
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Thought Id heard it all Says:
August 6th, 2008 at 4:57 pm
A home is also a place to live and love.
A place to love? I thought I’d heard it all. I’m supposed to have a meaningful, personal relationship with an inanimate object? Dave, you need to get a life, and develop a meaningful relationship (love: filios, agape) with another living entity, human if possible.
Now I have to admit that “a home is a place to love” is in fact used in realtorspeak; here, emotive words that engender visions of motherhood and apple pie are used to sell things that in fact lack these qualities. It’s a cheap trick that works on anyone who lacks intelligence.
I note also that Donovan’s song “I love my jeans” was quite popular in the 60s, but (a) he wasn’t really serious, (b) he used it in a different context, and (c) you had to be stoned to really appreciate the lyrics.
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Anonymous Says:
August 6th, 2008 at 5:05 pm
John Says: “They’re smart smart people especially the Albertan oil patch workers. These are the cream of the crop and they rise to the top.”
Oil patch workers = smart smart people. WTF? I’ve been trusting financial advisers all these years…I knew I should have been trusting high school drop outs when it came to financial decisions. I’m going to ask my hair dresser about where she thinks the price of oil is going tonight.
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tokyob Says:
August 6th, 2008 at 5:09 pm
man…vancouver’s weather sucks….and especially in the winter…if vancouverites think that people visiting the games in 2008 are gonna want to pick up a condo because vancouver is the best place on earth….gimme a break..i will be raining everyday during the games…that is the climate there….i love real estate and i have a number of investments in it…but to assume that vacation goers might wanna buy a condo is simply a stretch for me…i love vancouver…but in july, august and september only…
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Drachen Says:
August 6th, 2008 at 5:12 pm
Dave
“How many years have you been wrong now?”
None, we’ll see how your predictions stack up against my perfect record.
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Druid Says:
August 6th, 2008 at 5:26 pm
“on average Canadians change houses every seven years …”
Hey Druid, I have often wondered about that stat. Look at sales figures for Lower Mainland: around 40-50K per year on average. There are about 1M dwellings. The math doesn’t seem to work out, for owner-occupiers anyways
============================================================
jesse,
Could you show me the contradiction? I don’t see it.
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jesse Says:
August 6th, 2008 at 5:29 pm
“- approximate 5% drop in prices this Fall;
- a flat market for 2009 (+/- 5 to 10% of end of 2008 prices); and,
- less than 18970 listings in Greater Vancouver by October 1st. “
Dave, you are bold to make predictions like these so good on you. Instead of % numbers can you put a dollar amount? I’m not sure if you’re measuring GV benchmark, average, median, SFH, condo, what? And 5% from what value exactly?
I too will make a prediction, in all fairness. I predict detached GV benchmark to be $550,000 or less in 2012. For this year, detached GV benchmark will be $710,000, as measured in the 2008 year end GVREB press release. Sounds like this is close to your estimate.
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jesse Says:
August 6th, 2008 at 5:37 pm
“Could you show me the contradiction? I don’t see it.”
1M dwellings but only 5% change ownership every year (some owner-occupied, some rentals). That means it takes many more years than 7 for dwellings to turn over. Note I think 65% or so dwellings in Vancouver area are owner-occupied.
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John Says:
August 6th, 2008 at 6:58 pm
It’s clear that this market is going nowhere but up. I’ve heard people claim that houses in vancouver are no longer affordable but I just found the perfect example of affordable housing in this great city. Here’s a luxurious home in East Vancouver for only $650k and some change. Any reasonably successful couple could afford this place. Here’s the MLS number : V718363. I’m probably going to look at it later on in the week for investment opportunities.
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qwerty Says:
August 6th, 2008 at 7:28 pm
jesse,
I love how you are avoiding the main point made by druid – very few people stay in the same house for 25 years. In fact, some people might be highly motivated to sell due to job relocation, divorce or even death of a spouse. Thus buying at the peak of a bubble is risky.
In any case, I would love to see your reasoning as to why exactly the seven year stat is incorrect. So far you have just thrown around a bunch of numbers without any logic to connect them.
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TonyL Says:
August 6th, 2008 at 7:38 pm
I fail to see the logic in the following comment: “Buying real estate is a good investment as long as you plan on living in it for the next 15 years. Dont time the market.” So, as long as you can afford the mortgage payments and dont plan on moving for 15 years, it is a good idea? How about the fact, that if you are faced with overwhelming evidence of an impeding decline in prices, it is a terrible idea to buy, no matter how long you plan on living in it. The simple difference is how long you make the payments (amortization period). Buying at todays prices = 40 year mortgage. Buying in one year = 25 year mortgage. It doesnt matter how long I plan on living in the home, it matters how long it will take for me to pay off the home.
Which is the better scenario: A) Buy today for 600K, in 15 years home is worth 600K, or B) By next year for 400K, in 14 years home is worth 600k? Hint; it will take longer to pay one mortage then the other….
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exx Says:
August 6th, 2008 at 7:54 pm
Any reasonably successful couple could afford this place. Here’s the MLS number : V718363. I’m probably going to look at it later on in the week for investment opportunities.
And best of all, it was recently reduced $20K! 50 DOM, it’s only a matter of time until somebody snaps it up at this rock-bottom price!
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Gorky Says:
August 6th, 2008 at 8:08 pm
on Johnboys MLS number : V718363
I wonder why they don’t show a shot of the exterior of the house. From looking at the interior shots it felt like traveling back in time.
But hey, at least the realtard looks professional on his crappy blurry profile picture completely stoned slurping a coke. I’ll go to the open house, maybe I can buy some good weed off the guy.
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exx Says:
August 6th, 2008 at 8:14 pm
Here are several REBGV charts I’ve never seen before. Some go back to the early 90’s, others ~mid 90’s.
Royal LePage REBGV Stats for July 2008
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Anonymous Says:
August 6th, 2008 at 8:39 pm
TonyL
Daver has a website
revnyou
He is saying this crap because he is desperate for business
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anonymousted Says:
August 6th, 2008 at 10:15 pm
I know this is a bad pun, and I hope I don’t offend. And I hope the woman in question gets better. But talk about a bear market. A woman selling her house on westwood plateau got mauled by a bear. I believe the listing is mls number V706030 .
The morbid part of me looked it up. I have to say vancouver real estate doesn’t make much sense. Her house is listed at $778,000 in a posh area. While for the same money you can live in east van. Go figure. Anyways I hope she gets better.
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bcubbins Says:
August 6th, 2008 at 10:18 pm
Druid, Jesse and qwerty, the “people move every 7 years” stat comes from the Census question on mobility. If you go to…
http://www12.statcan.ca/englis.....GID=838071
…and select Vancouver, you see that of 2,076,590 people in Vancouver, 352,165 of them, or 1 in 6, moved within the previous year. Exclude the new immigrants to Canada and you’re left with about 1 in 7 people moving in the previous year. No doubt though that renters move more frequently than homeowners.
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sheeplessinvancouver Says:
August 6th, 2008 at 10:24 pm
Anyone know if prices are going down in other parts of Canada?
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Michael Randallbard Says:
August 6th, 2008 at 10:30 pm
BBC REPORT….BEST TO WALK AWAY FROM MORTGAGES AND STICK IT TO THE BANKS…..GOT GOLD?
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Swirlyman Says:
August 6th, 2008 at 10:32 pm
Where is Krrrish? Must have his hands full attempting to turn the psychology by posting on the higher-volume blogs…
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zzbear Says:
August 6th, 2008 at 10:43 pm
I have friends who are recent buyers and their attitude is simply “as long as the market is not lower after 25 years” then they’ll be happy. That’s a long time.
They are forgetting about all the interest they will pay in 25 years, plus inflation. I would hope my place would have doubled in 25 years just to break even.
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scullboy Says:
August 6th, 2008 at 10:47 pm
Swirly,
Krrrish has to go out and drum up some business for his mom, now that he won’t be making zillions of dollars off his crap TransVestite Towers condo. I don’t know what that woman’s going to do when the construction workers go home…. her client base will dry up!
It’ll be back to the Tijuana donkey show I suppose.
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Re-diculous Says:
August 6th, 2008 at 10:53 pm
An very interesting post, I thought, on Garth’s Greater Fool regarding “Average Price” in a bubble vs. a declining market – they are not the same even though the RE board would clearly like us to believe that they are:
———————-
Let’s say 100 houses sell in a bubbly real estate period. Fifty sell for $500K. Another 50 sell for $400K. Avg is $450K. Only the people who saw those houses know their condition, but I can tell you that in a bubble almost any manner of junk sells at full price. By “full” I mean a listing price arrived at by comparing the listing with recently sold houses in the vicinity with similar attributes (sq ft, # BRs, # baths, etc.).
Then let’s say we enter the post-bubble phase. We get 120 listings. 60 at $500K and another 60 at $400K. Of the 60 at the higher price, only 30 sell, but they’re the 30 that have been properly maintained over the years. The other 30 falling-down pieces of junk do not sell and the vendors, not wanting to believe the market has tanked, cancel the listing instead of reducing their price.
At the lower end, of the 60 listed at $400K, 30 sell to first-time buyers because in recent times $400K has represented the floor in prices and these houses are still better than living in a leaky condo or rat-infested basement. The other 30 falling-down pieces of junk do not sell because there aren’t enough buyers engaged in panic buying anymore. The vendors, who bought for a quick flip, cancel the listing and rent out the dump instead of reducing their price.
Avg: Still $450K.
So, we have listings up, sales down, but a steady average price that the board can spin in the media.
As the bubble completely deflates, quality property still sells, albeit at reduced prices, and junk doesn’t sell. So the average sale price goes down. But that STILL doesn’t tell the whole story.
What the public doesn’t see (but I do, having access to all listings for the past 20 years) is the number of cancelled or expired listings, where vendors reduced their price time and time again but could not unload their property.
These de-listed properties do not show up in any average because they aren’t counted as SALES. But the attempt to sell those properties was no less real for those vendors.
So an average sale price of $450K in a boom is not the same animal as an average price of $450K in a bust. One average represents the price on everything including junk that never had a dime put into it. The other represents the average price of houses that required an enormous amount of renovation and maintenance.
An average price decline of 40% (say) tells you that the BEST properties are off at least by that much. What it doesn’t show is that the average price decline for crappy houses can be infinity (no sale, no market value established). Look at the $1 house listings in Michigan for an example of what I’m talking about.
If the board wanted to publish numbers that offered a more honest insight into market conditions, it would publish the average LISTING price.
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arit Says:
August 6th, 2008 at 11:10 pm
Re-diculous:
That was a very interesting post. Indeed.
So what can I understand from it regarding someone like us who wants to build their own house? Wait for a piece of crap in a great location and demolish it for the land?
Regards,
arit
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jesse Says:
August 6th, 2008 at 11:30 pm
“I love how you are avoiding the main point made by druid – very few people stay in the same house for 25 years.”
I did not say that the 1 in 7 moving was incorrect, only that the number of sales per year is very very low compared to the total number of dwellings.
I’ll go through it again in more detail: there are about 1 million dwellings in the Vancouver area. Only 50,000 or so sell any given year. Therefore 1 million dwellings divided by 50,000 sales means that on average a dwelling sells only every 20 years, assuming all these dwellings are able to be sold (some but not a lot are purpose built so are never sold).
Let’s go a bit further. 65% of dwellings, or about 650,000, are owner-occupied so let’s guess and say 75% of sales in any year are to owner-occupiers. This means 650,000/(0.75*50,000) = 17 years on average between owner-occupied sales.
bcubbins is likely right: rentals have much faster turnover. Many people in apartment rentals and basement suites rarely stay more than 2 years so the renters skew the 1 in 7 stat lower than owner-occupiers by themselves.
I am trying to resolve the low annual sales turnover with the 1 in 7 stat Druid mentioned. If your math is different please share. I think using Druid’s cited statistic to infer that owner-occupiers move every 7 years on average is not correct.
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buff_butler Says:
August 6th, 2008 at 11:31 pm
“Anyone know if prices are going down in other parts of Canada?”
sheeplessinvancouver,
Yes,
Calgary SFH -9.8% avg YOY, -6.2 med YOY
Calgary Condo -6.9% avg YOY, -9.0 med YOY
Edmonton SFH -11.3 avg YOY, -9.7 med YOY
Edmonton Condo -8.6 avg YOY, -11.5 med YOY, Some areas are -20%
Toronto, Sales are down and listings are up
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Vansanity Says:
August 7th, 2008 at 6:34 am
More news to get your growl on:
Canada’s Building Permits drop 5.7% [But I thought construction was sustainable!]
http://www.bloomberg.com/apps/.....fer=canada
Manitoba and Saskatchewan to lead Canada’s growth, not BC or Alberta [Does this mean rich Manitobans will be flocking to buy overpriced BC real estate? Yes.]
http://www.cbc.ca/canada/story.....rowth.html
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Vansanity Says:
August 7th, 2008 at 7:02 am
^ BC’s Building Permit values fell by 6.1% in June compared to May.
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andrew Says:
August 7th, 2008 at 7:24 am
@ Dave
I have been bearish on the Vancouver housing market since 2004. You might say that i have been “wrong” about housing until now.
However, I think that most bears on this site have not been saying specifically that house prices will crash on x date, but that house prices in Vancouver are detached from fundamentals, and thus like any other asset, can be classified as overvalued.
I have been saying that RE in Vancouver is detached from fundamentals for 5 years, and thus, that particulur asset class is overvalued and like all assets will eventually be corrected to the fundamentals. I have been right for those 5 years, and I will continue to be right until the prices are in line with fundamentals.
That the rest of the world only now begins to embrace that view does not mean we were wrong for 5 years.
I think you are misinterpreting what the bears on the site are really saying.
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Mr. Simpleton Says:
August 7th, 2008 at 8:08 am
Within a square mile of where I live (Burnaby, near Royal Oak station) there are HUNDREDS upon HUNDREDS of new units being built – from almost completing to just starting.
Viable businesses have been expropriated, doctor’s offices and preschools have been demolished, places that provided employment and services are gone, replaced by medium/high density cardboard CRAP. The sad part is all this land is (or was) owned by City of Burnaby, which has now sold it to the highest bidder, disguising it all as their “development plan”.
There is no new infrastructure, no new schools, no new stores – just condos. I used to be able to simply walk to the bank, now I have to drive to the new location… How does it make sense? How does it make the community better?
How about sustainability, reducing carbon footprint and all this stuff?
This is utter bullshit and it should be deemed criminal.
This bubble is no accident and there are clearly several culprits on all levels who should be held accountable for what is happening, and what’s worse, what will happen soon.
Our communities are being destroyed, the standard of living is gradually being lowered and all this is adorned by flashy and meaningless marketing drivel, from realtors, developers and all levels of government.
This is the biggest scam to date and only a few are making REAL money on it while everyone else is living the (doubtful) fantasy…
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Mr. Simpleton Says:
August 7th, 2008 at 8:19 am
I guess what I’m trying to say is that even this whole thing crashes, the prices plummet and the market regains its sanity What are we going to be left with? It will be a sad, sad legacy of half-finished projects, cut trees, paved parks, dust and concrete everywhere…
Modern-day slums with tar paper torn and flapping in the wind, with broken windows and full of looters stealing copper wire… Half-finished streets and big advertising banners bleached by the scorching sun, as all the old trees are gone and there is nobody there to plant the new ones…
Way to go People, way to go.
I guess in the end, you’ll get what you deserve.
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Drachen Says:
August 7th, 2008 at 8:28 am
Andrew
“I think you are misinterpreting what the bears on the site are really saying.”
I think he understands perfectly well. He’s just creating a straw man to tear down. Dave is a fairly smart cookie, he understands how argument works and he consistently uses tricks and gimmicks to support his argument because he has no facts or intelligent analysis that support his case.
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arit Says:
August 7th, 2008 at 8:38 am
Mr Simpleton
Within a mile of where I live (Richmond, near Ironwood) there are HUNDREDS upon HUNDREDS of new units being built – from almost completing to just starting.
I am with you on “the biggest scam’. It’s a scam. A transfer of wealth.
For what? A cardboard condo? A cardboard condo? for 500,000$?
At least, when I bought that bridge a few years ago, I got ONE day of collecting aggresive toll with my gun before they took me away!!!
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Drachen Says:
August 7th, 2008 at 8:44 am
Scullboy
You know, I appreciate most of your comments here. You often have intelligent and witty things to say.
But…
I’d rather read Krrish’s idiotic posts than your juvenile posts detailing the sexual habits of him and his family. Could you give it a rest?
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Dave Says:
August 7th, 2008 at 9:40 am
There is no new infrastructure, no new schools, no new stores – just condos. I used to be able to simply walk to the bank, now I have to drive to the new location… How does it make sense? How does it make the community better?
How about sustainability, reducing carbon footprint and all this stuff?
This is utter bullshit and it should be deemed criminal.
School enrolment has dropped in Burnaby for a number of reasons. We simply don’t need more schools at present or in the near future. No new stores? There are plenty of new stores in Burnaby. What area are you referring to?
Densification is one of the most sustainable things we can do and Burnaby is a great example of how it has been successful. Many of the new high rises have been constructed around SkyTrain stations, which has pushed transit use numbers up significantly. It has served to take thousands of vehicles off our roads.
Burnaby has a massive amount of green and park space (25% by area), much of it connected by corridors!
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Bluesman Says:
August 7th, 2008 at 9:46 am
Mr. Simpleton: You are absolutely right, and the politicians who are focusing on such issues as building little huts in people’s back yards are barking up the wrong tree. They can’t see the forest (city) for the trees (backyards).
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DaveD Says:
August 7th, 2008 at 9:52 am
“This is utter bullshit and it should be deemed criminal.
This bubble is no accident and there are clearly several culprits on all levels who should be held accountable for what is happening, and what’s worse, what will happen soon. ”
Plenty of new arrivals will soon discover why BC has always had the reputation for being the home of fraudsters and criminals. The global credit/real estate bubble just gave them a new feeding ground for a few years.
Plus they are *never* held accountable.
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Bluesman Says:
August 7th, 2008 at 9:52 am
Dave: And WHY do you think schools are closing? Might it be connected to the fact that you and many of your generation cannot AFFORD to have children? That you will be stuck forever after in your little cardboard box? So instead of nurturing our own population Canada Immigration has chosen to bring in TEMPORARY workers???? Do you ever think about these things or is it just that times have changed so much that you have no idea about how life COULD be in Canada? I have a hard time understanding your excitement over highrises as opposed to multifamily complexes.
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Bluesman Says:
August 7th, 2008 at 10:15 am
Dave: Please answer for me a straightforward question: What would happen to the plant kingdom if the flowers were all plucked off the plants and not allowed to make seeds? Please answer to the best of your ability.
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Anonymous Says:
August 7th, 2008 at 10:39 am
http://www.canada.com/vancouve.....7441799933
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VanTOVan Says:
August 7th, 2008 at 10:50 am
According to this report in the G&M http://tinyurl.com/5hgh3c the jig is certainly up.
Spinmeisters will trumpet the following
The country is not facing an outright bust because credit “excesses” haven’t been as extreme in Canada as they have in other countries such as the U.S., he added in a report titled, “Peaked: Canada’s housing market in depth.”
but the bears will growl back with a deafening:
In B.C., Vancouver’s and Victoria’s housing markets are now up to 35 per cent overvalued, he estimates.
Now that’s a number I like to hear!
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Bubble Lad Says:
August 7th, 2008 at 11:04 am
Saskitoba Rules! BC and Alberta running the world just seems like a distant memory now…from failing hands we throw the torch…
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Mr. Simpleton Says:
August 7th, 2008 at 11:12 am
Dave, you have no idea how wrong you are. I have three teenage children and all of them were forced to take classes in leaky, moldy portables because the schools in the area are so overcrowded.
Burnaby South Seondary (which is a new school btw) has been relieved somewhat after Byrne Creek High was completed, but it’s still way above capacity while it needs a total building envelope reconstruction. Sadly the project has been pushed over year after year as the schoolboard has no money necessary to pay for the work… So where the hell is all the money going that the city got from developers by selling the once useful and productive land in my neighborhood?
Lining someone’s personal pockets, I guess.
If you’re new to the area (and soon hundreds if not thousands will be) you cannot get a famliy doctor, because there are none available… I know of one clinic servicing the entire neighborhood and the waiting lists are pathetic!
Dave, please stfup and come back when you have something constructive to say… or at least something that is true.
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Anonymous Says:
August 7th, 2008 at 11:45 am
Dave, in post #138 lost any remote shred of credibility he might have otherwise possessed. Obviously he hasn’t set foot in Burnaby, at least not in the last decade or so that I’ve been there. Yeah, there’s a new strip mall out on South West Marine, in the middle of absolute nowhere (unless you work in the industrial park at Glenlyon Parkway), that incidentally resulted in the removal of around a square km of forest parkland. Oh, and Middlegate mall actually looks like something now, if you feel like making that drive… But otherwise, Burnaby is going down HARD.
Yes, Mr. Simpleton, there was a time around a decade ago where I would have loved to buy in Burnaby, and near Royal Oak would have been a reasonable target. Not anymore. Too much stuff has been removed/shut down/replaced with disposable condo construction projects.
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umdesch4 Says:
August 7th, 2008 at 11:45 am
Dave, in post #138 lost any remote shred of credibility he might have otherwise possessed. Obviously he hasn’t set foot in Burnaby, at least not in the last decade or so that I’ve been there. Yeah, there’s a new strip mall out on South West Marine, in the middle of absolute nowhere (unless you work in the industrial park at Glenlyon Parkway), that incidentally resulted in the removal of around a square km of forest parkland. Oh, and Middlegate mall actually looks like something now, if you feel like making that drive… But otherwise, Burnaby is going down HARD.
Yes, Mr. Simpleton, there was a time around a decade ago where I would have loved to buy in Burnaby, and near Royal Oak would have been a reasonable target. Not anymore. Too much stuff has been removed/shut down/replaced with disposable condo construction projects.
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umdesch4 Says:
August 7th, 2008 at 11:47 am
(sorry for the double post…Pope, please feel free to delete the anonymous one)
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Drachen Says:
August 7th, 2008 at 11:48 am
Mr. SImpleton
“So where the hell is all the money going that the city got from developers by selling the once useful and productive land in my neighborhood?
Lining someone’s personal pockets, I guess.”
This is just another example of how the bubble has hurt people and why it simply needs to die now for the good of all.
Here’s how it works. Residential, Commercial and Industrial properties are taxed on different scales (I think Commercial and Industrial are lumped together in some municipalities).
Residential properties are always paying the lowest taxes. Commercial and Industrial properties pay significantly higher property taxes (double or more what residential pays). So as C and I properties are converted to R it becomes harder for the city to maintain cash flow without scaring even MORE business away to other regions.
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Re-diculous Says:
August 7th, 2008 at 11:50 am
VanTOVan
Thanks for the report, however, was unable to open your link. Here it is again:
Housing activity set to wilt:Merrill
http://www.reportonbusiness.co.....m_mostview
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Chris Says:
August 7th, 2008 at 11:59 am
35% OVERVALUED!!!!!!
Hey Gang,
Here’s a Globe & Mail article published today that features an interview with a Merrill Lynch economist stating Victoria and Vancouver are about 35% overvalued! Great to get an economist’s opinion outside of Cameron Muir (BCREA Chief Real Estate Cheerleader).
“Housing activity set to wilt: Merrill
TAVIA GRANT
Thursday, August 07, 2008
Canada’s housing market is entering a “sustained downturn” amid excess supply and as higher prices deter new buyers, an economic report said Thursday.
As a result, house price appreciation will stall, with Western markets “most vulnerable to outright declines,” according to Merrill Lynch economist David Wolf. He expects home builders to pull back “substantially” in response.
The country is not facing an outright bust because credit “excesses” haven’t been as extreme in Canada as they have in other countries such as the U.S., he added in a report titled, “Peaked: Canada’s housing market in depth.”
But some markets in Saskatchewan and British Columbia now appear to be overvalued, he said. Mr. Wolf calculates fair value using variables such as current prices, affordability and long-term average valuations.
Mr. Wolf is most concerned about Saskatchewan, where the doubling of house prices in Regina and Saskatoon over the past two years “has led us to estimate that these markets are now close to 50 per cent overvalued.”
In B.C., Vancouver’s and Victoria’s housing markets are now up to 35 per cent overvalued, he estimates.
Markets in Alberta, meantime, have become slightly less overvalued in the past year.
The rest of the country looks “better balanced,” he said; housing in Toronto is at essentially fair value.
Slowing activity and moderating prices will likely dampen both inflation and economic growth in Canada. Mr. Wolf sees cooling residential investment knocking 0.6 percentage points off real gross domestic product next year, as consumer spending also eases.
The housing slowdown could cut overall inflation by 0.5 percentage points by the end of next year, he said.
© The Globe and Mail”
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richard Says:
August 7th, 2008 at 12:26 pm
waterfront condos. Only 182K 1 bedroom, but the annual fees start at $12K. apologies if this has already been posted…it’s from yesterday’s news.
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VancouverBanker Says:
August 7th, 2008 at 12:59 pm
” I have yet to be wrong. I was right on the way up for the last 7 years. Incase you forgot, my future predictions to date are:
- approximate 5% drop in prices this Fall;
- a flat market for 2009 (+/- 5 to 10% of end of 2008 prices); and,
- less than 18970 listings in Greater Vancouver by October 1st.”
I could see a minimum 5% drop this fall, but 2009 is going to be a 15% decrease minimum, followed by a similar decrease in 2010. Look at Vancouver historical real estate busts and educate yourself.
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VancouverBanker Says:
August 7th, 2008 at 1:39 pm
“Densification is one of the most sustainable things we can do and Burnaby is a great example of how it has been successful. Many of the new high rises have been constructed around SkyTrain stations, which has pushed transit use numbers up significantly. It has served to take thousands of vehicles off our roads.”
In theory, I agree with Dave on this point. Densification is good, but obviously it can be mis-managed by moron bureaucrats. For example, if an area is high-density residential only instead of mixed use, that can cause alot of problems.
I don’t know much about the Burnaby market so I can’t comment on some of the counter-arguments people have made. However, I do think locating condos around Skytrain stations is great, and should continue to be encouraged in every city of Greater Vancouver. Not everyone can have a SFH anymore, and people had better get used to it.
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Mr. Simpleton Says:
August 7th, 2008 at 1:59 pm
I do not disagree with densification.
I’ve been to many cities in Europe where “densification” is a simple reality and nobody even uses that term over there, not anymore.
However what I would like to see is a park, a school, a pizza place or a cafe thrown in inbetween all those condos. Or how about a walkway to take you dog out? A bench where you could sit and play a game of chess…
There is NOTHING like that around where I live.
While in Europe the very opposite is true.
And the fact that condos in Europe have double brick service walls between the units and floating concrete floors which makes the noise from your neighbors nonexistent. Here entire three-story buildings are made up of cheapest 2X4 lumber and chipboard combination resulting in resonant boxes where you can clearly hear your neighbor fart each time they had some Mexican food for dinner.
Truly and utterly pathetic.
If that what our version of “densification” means then I think we’re getting a short end of the stick.
Please don’t tell me this is good for us.
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scullboy Says:
August 7th, 2008 at 2:37 pm
I’ve been out to a few stops in Burnaby. While densification is good, the planning there seems to be exactly nil.
There are few sidewalks, and it’s very difficult to get from many skytrain stops to decent shopping, for instance.
There seems to be no “mixed use” at all. It’s either ALL condos, or HONKIN’ big malls. It’s not like around Davie and Denman, for instance, where there are a lot of highrises, but also lots of smart little shops and restaraunts.
As got the G&M article, I’d posit it’s about spot-on. I owned a condo on the waterfront there. It was possible to get a nice place for basically the average salary. When I sold, I sold for an amount that was moderately over what I had paid when I purchased. I’d guess the value of my place went up at about the same rate as inflation.
I don’t know about Vic, but Van’s way overpriced. It’ll take quite a while for the idea to sink in because real estate investments are emotional investments. All those people who thought they’d make an easy 100K aren’t going to give that idea up easily. It’ll be a few months before the REAL panic sets in.
Oh and Drachen, just for you I’ll lay off. Krrish drives me nuts and frankly I was hoping if I was graphic enough, he’d go away.
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buff_butler Says:
August 7th, 2008 at 2:38 pm
“a flat market for 2009 (+/- 5 to 10% of end of 2008 prices);”
You consider -5 flat? and im assuming the 10 relates only to the upper bound growth.
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Vansanity Says:
August 7th, 2008 at 2:39 pm
I remember not too long ago, Statscan saying the reason inflation was so low was, part in parcel, due to the strength of the Canadian Dollar. Now, others corrected me before saying that regardless of the dollar we’ll import inflation and I agree with that.
With inflation rising (imported and domestic, if you will) and our dollar currently declining $0.9497 USD as I write this, will we see an amplified result the next time we get the CPI numbers? I assume so. It will be curious to see how the numbers look and what Statscan’s rhetoric is over the next 6 months or so.
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Vansanity Says:
August 7th, 2008 at 2:43 pm
Chris – Beauty find! If you look at the Vancouver Housing Chart adjusted for inflation, with the long term trend line, we are almost exactly 35% over it right now. Usually when the market “corrects” in over does it, will we eventually see a 40%+ drop from the top over the next couple years? We definately could.
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Dave Says:
August 7th, 2008 at 2:51 pm
I could see a minimum 5% drop this fall, but 2009 is going to be a 15% decrease minimum, followed by a similar decrease in 2010. Look at Vancouver historical real estate busts and educate yourself.
I suggest that you take a second look at that data and reconsider your conclusion.
I can only assume you are basing your opinion on the 1981 crash. Let’s look at that one in a little more detail and compare to our current run-up. Nominal house prices roughly doubled from 1975 to 1980! They then went on to double again in the course of one year! In comparison, our current run-up started in about 2001 and values have gone up by about 230%. So, our current boom has been longer in duration and was less in magnitude. Last year prices went up only 10%, in contrast to 100% in 1981. I would suggest that the magnitude of the correction is proportionate to the magnitude of the run-up.
Let’s take that supposition and apply it to subsequent corrections. The next correction occurred in 1991 after 5 to 6 years of gains (~210%), in which prices dropped 6.5%. In the prior year (1990), prices had gone up at a breathtaking 33%. After that mild correction, prices then went up for another 4 years (for about another 50% appreciation in nominal prices)! Nominal prices then dropped 17% (peak to trough) over the course of 4 years.
In 1981, the correction only took back 3 quarters of nominal gains. In 1991, it took back 5 quarters of gains. In 1996, the correction took back about 8 quarters of gains.
And of course, you can’t assume that everybody transacts at the peak or at the trough. So, the actual correction that individuals potentially incur is smaller. I would suggest that a six month moving average is a better metric to gauge corrections. When you do that, the 1981 correction gave back 27%, the 1991 correction 1% and the 1996 correction 12%.
To summarize, your predictions are outside the range of prior corrections, while my predictions are right in line with them. The best analogy for our current price correction would be either 1991 or 1996. Our run-up falls length and magnitude is somewhere in between the two. It seems reasonable to me that the correction would also fall somewhere between the two (i.e. between 6 and 17%).
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Dave Says:
August 7th, 2008 at 2:54 pm
There is NOTHING like that around where I live.
Maybe that’s because you rent. When you buy a place, you get to live near the amenities that mean the most to you.
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Drachen Says:
August 7th, 2008 at 3:10 pm
Dave
“our current run-up started in about 2001″
Says you. Saying it started in 2001 is to ignore fundamental analysis. Are we going to do another round with your “Voodoo Economics”?
Since the rest of your argument is based on that one questionable assumption the whole deck of cards comes down.
Weakest argument I’ve seen from you yet Dave.
“In 1981, the correction only took back 3 quarters of nominal gains. In 1991, it took back 5 quarters of gains. In 1996, the correction took back about 8 quarters of gains.”
You know what the above tells me above all else? Measuring falls in “quarters of gains” is not useful, 3, 5, 8? Unless you’re proposing that there’s a pattern and our next fall will be 16 and after that 32?
Funny thing though, if you look at crashes in terms of fundamentals you can go all around the world and find that after a real estate crash things return to +/-10% of a reasonably calculated fundamental value? Why don’t you like using fundamental valuation Dave? Could it be that, although it is the most accurate method of predicting how big a correction will be, it doesn’t agree with what you want to be true, so you ignore it?
And before you go and tell me that valuing assets on their fundamentals is not the most accurate method you’re going to have to explain how Warren Buffet (who uses exclusively fundamental valuation to make his investment decisions) is so damn rich then.
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Re-diculous Says:
August 7th, 2008 at 3:41 pm
Thought I’d really annoy myself and listen to the Bill Good show via the Audio Vault at 9:00 today talking about RE. Show was hosted by Michael Campbell and had Ozzie and 2 recreational property developers (Mark Sager and someone else). The really surprising thing was that Ozzie was the LEAST irritating of the 4, but irritating nevertheless.
…oh, BTW, the consensus that prices are not going to come down is that British Columbia is an really nice place to be…ie. “Best Place on Earth” arguement.
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Re-diculous Says:
August 7th, 2008 at 3:49 pm
Wow..great follow up article in the G&M to the Merrill report:
“The Great Canadian Housing Myth”
http://www.theglobeandmail.com.....WBmarkets/
Couple of gem portions:
“Meanwhile, what looked like a reasonably priced market now seems pricey. The ratio of house prices to rents is now 25 per cent above the average. The ratio of house prices to incomes is also a troubling statistic: It is now about 4:1, meaning that the average house price is four-times the average household’s annual income. During the previous cyclical peak, in 1989, the ratio topped out at 3.2:1. Even more troubling, the U.S. market topped out at 3.9:1 in 2006, just before doom set in.”
and
“Does this imply a nasty drop in the months ahead? His best guess is that house prices will flat-line nationally, which implies that some regions of the country will suffer. Regina and Saskatoon, in particular, appear to be 50 per cent overvalued (hint-hint); Vancouver and Victoria are 30 to 35 per cent overvalued.”
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Drachen Says:
August 7th, 2008 at 3:51 pm
“the consensus that prices are not going to come down is that British Columbia is an really nice place to be”
Uh huh… And it doesn’t bother them that prices ARE coming down? To paraphrase an old Chinese proverb;
The person who says it can’t happen should shut his mouth when it does happen.
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richard Says:
August 7th, 2008 at 3:57 pm
“Maybe that’s because you rent. When you buy a place, you get to live near the amenities that mean the most to you.”
????? so if you rent a condo downtown where all the cafes are, you don’t get to live near the cafes? as opposed to if you buy a condo downtown where all the cafes are, then you get to live near the cafes??? makes no sense whatsoever.
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beta Says:
August 7th, 2008 at 4:08 pm
Dave – Just as in ‘81, the housing market correction will be combined with a recession in the general economy. Only this time, debt levels are far worse. Prices will plunge.
I laugh when these people who couldn’t foresee prices falling now try to tell us where the bottom is. They have zero credibility.
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David Says:
August 7th, 2008 at 4:11 pm
The ratio of house prices to incomes is also a troubling statistic: It is now about 4:1, meaning that the average house price is four-times the average household’s annual income. During the previous cyclical peak, in 1989, the ratio topped out at 3.2:1. Even more troubling, the U.S. market topped out at 3.9:1 in 2006, just before doom set in.”
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bdk Says:
August 7th, 2008 at 4:22 pm
I have a better question.
Who cares what Dave “thinks” he’s either and idiot or he’s intentionally spreading disinformation because him and his wife Julie are bored sitting around the coffee shop in Victoria.
This is a guy who thinks you can’t use amenities if you’re renting? Maybe next they’ll be parkades where you can only park if you own your vehicle, not if it’s leased. Or maybe the amenities in a strata will be restricted to those who’s names are on the title?
It’s funny Krissh disappeared when Dave arrived, perhaps they are one and the same?
Both are useless when it comes to answering questions they don’t want asked and just babble back a bunch of gibberish. Either he’s a moron or he’s of average intelligence and trying to deceive people into believing now is a good time to enter the market, he’s confirmed that he’s on several blogs at once all day ,accidentally, and he also accidentally posted his email and website. Which he has adametly denied was him and his embarrassed hick wife also tried to dispute it was him.
Geez why would that be?
If someone accused me of being Bill Good I wouldn’t repeatedly deny it. It’s obvious REV N YOU and “Dave” is the same tool
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Anonymous Says:
August 7th, 2008 at 4:32 pm
AHA! your secret is out. BDK is Bill Good!
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curious lurker Says:
August 7th, 2008 at 4:43 pm
hey bdk, what’s dave’s website? I’m not really sure how to find it (and I don’t even know which blog he accidentally posted it on)
thanks!
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Drachen Says:
August 7th, 2008 at 4:49 pm
David
“The ratio of house prices to incomes is also a troubling statistic: It is now about 4:1″
What are your source numbers David? I come up with 10:1 using the median family income from Statistics Canada and the benchmark price for Vancouver housing set by the REBGV. I don’t exactly know how much the median differs from the benchmark and there’s really no way of telling, but 10:1!!! Even if benchmark is off of median by 50% (doubtful) your 4:1 is way off.
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Drachen Says:
August 7th, 2008 at 4:53 pm
Curious Lurker
The website that was posted likely only belongs to the person using the handle “Dave@revnyou.com”, Pope says the IPs used by him, Dave and The Source are all different so it’s probable that they are not the same person.
The website for Dave@revnyou.com is http://www.revnyou.com (what a shock!)
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blueskies Says:
August 7th, 2008 at 5:05 pm
It seems reasonable to me that the correction would also fall somewhere between the two (i.e. between 6 and 17%).
dave:
i notice again you fail to address the affordability issue…a 17% drop does not bring prices in line with the rental income metric
and you fail to take into account the sales volume drop in the last two months
ie.-43% and -45% and August is looking like maybe -50%…….
i actually don’t expect you to answer as your credibility is already severely compromised.
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Re-diculous Says:
August 7th, 2008 at 5:14 pm
Drachen,
I think he was referring to the story I posted in #165 with the 4:1 house price to income ratio. However, The article was refering to Canada as a whole. Agreed, Vancouver is more like 10:1
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scullboy Says:
August 7th, 2008 at 6:01 pm
It’s quotes like this:
“Maybe that’s because you rent. When you buy a place, you get to live near the amenities that mean the most to you.”
that make me seriously consider leaving Vancouver. I’ve never seen a city where property owners had this kind of insufferable arrogance. You get boneheads like krrish strutting around like they’re Donald Trump.
On the upside I’m REALLY going to enjoy the slow motion decapitation (I don’t think we can call it a haircut any more ). The fools are strapped in. We hit the top of the ride a couple of months ago. We’ve juuuuuust passed the peak but the cars haven’t quite picked up speed. THe laughter is slowing and the screaming is about to start.
I can’t fucking wait.
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alexcanuck Says:
August 7th, 2008 at 6:07 pm
So if 4:1 means a possible bubble, and the States was 3.9 just before the end, and we are 10:1, it means ……a soft landing?
I heard some of the Bill Good show’s guests. The phrase “A well balanced and impartial panel” doesn’t quite fit. Sounds like Dave.
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browntown Says:
August 7th, 2008 at 6:17 pm
hey bagslaps! only 10-1 ratio? depression style levels considering only house land is now picton farm! hey draken, income ratio now 1000-1 for you! ha ha bdk look for next show at tv towers “the next leg up!” browntown sell you the whole seat but you’ll only need the edge!! yeaaaahhh
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bdk Says:
August 7th, 2008 at 6:55 pm
Browntown, are you talking about all the crazy drug addicts that hang out around TV Towers? Or do you mean we should watch as you lose all your money for decades to come? Either way it’ll be fun to watch you flail around in your wheelchair spouting nonsense.
Scullboy, why are you worried about renting versus owning?
Who cares what some douche bag mortgage broker named Dave and his hick wife Julie or some semi retarded warehouse worker with multiple personalities think? They are losers and always will be. What matters is enjoying life, getting laid, traveling. Not holding a mortgage on some ridiculously over priced crappy condo that’ll go down for decades to come.
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Drachen Says:
August 7th, 2008 at 7:02 pm
Wow, there’s a lot of anger here today. Some people who lose out will definitely deserve it but most of them are just naive and a bit greedy.
Like I said to The Source though;
Think of Bankruptcy as an opportunity to reorganize your life, de-clutter, consider the lessons you’ve learned and generally be Zen.
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arit Says:
August 7th, 2008 at 8:00 pm
bdk,
Are you an author? You should give it a try….
Regards
arit
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browntown Says:
August 7th, 2008 at 8:01 pm
hey bdk, i check georgia straights, still 18 “lifestyles” left at 1212 howe! i have your income ratio at 2:2! b-rennie can take your call this month, don’t wait for 1212 howe 2. yeah!
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Strataman Says:
August 7th, 2008 at 8:52 pm
browntown quote “hey bdk, i check georgia straights,” “Did you know you can get this for free ,,,the straights? I was havin trouble keepin up with my Van Sun subscription” “sorry gotta go nother shift at 7/11 oh me I am so damn well off it hurts! ” unquote!
Some are real intelligent yah know..don’t judge just on what you hear HERE! Yes I Know Scullboy you think I’m a goodie two shoes !
Sorry All; just noticed that brown streak wasn’t able to get his hole message out, I like to help street people.
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Thums up2 Says:
August 7th, 2008 at 9:01 pm
BULLS CAN EASILY GET THROUGH,SOURCES ARE GETTING HEALTHIER.
(spectrum jump to $2500 one bedroom)
“Wow, there’s a lot of anger here today. Some people who lose out will definitely deserve it but most of them are just naive and a bit greedy.”-Drachen.
Drachen,
Greed is not in the market real bulls are holding the commands,Congratulation to more than 2000 smart buyers who just had catch the r.e. wagon.
Strataman,
you and your sons are very good renter with good credit history and supportive income to pay rent on timely manners thanks for being responsible citizens and please refer some one in your circle here we got beautiful offering $3500 / 2br – 2bed Ocean and Mt view condo PostingID: 787627478-Smart buyers and fool sellers will be countinue……..
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Chincy Says:
August 7th, 2008 at 9:11 pm
#161…Dave, now also take into relationship current income levels now and then…the bottom line is affordability…hey but goodluck to you, hope you make a million.
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Strataman Says:
August 7th, 2008 at 9:26 pm
thumbsup “(spectrum jump to $2500 one bedroom)” Is that all? From what I have seen in those Towers you can make a lot more then that. The penthouse in Tower 3 is rented to call girls for three times that in sq.ft price. (For real)! Send me money and I’ll give you the Website!
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Lager not Logger Says:
August 7th, 2008 at 9:49 pm
Maybe that’s because you rent. When you buy a place, you get to live near the amenities that mean the most to you.
You’ve got to be kidding me. Dave, you normally seem to debate in good faith, but this makes me doubt your sincerity – it’s such a blatant troll line. You say the outrageous just to get a response it appears. There are very few buildings in the lower mainland without renters, and I know of no neighborhood that is ‘renter-free’.
In either case you choose to live near the ameneties that mean the most to you. Arguably it’s actually a lot easier to up and move as a renter if you find that the neighborhood you’re in lacks amenities.
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Lager not Logger Says:
August 7th, 2008 at 9:53 pm
Oh and Drachen, just for you I’ll lay off. Krrish drives me nuts and frankly I was hoping if I was graphic enough, he’d go away.
I appreciate this as well – the family insults get repetetive and it seems to me thats exactly the kind of reaction he wants. Lets just enjoy the peace while it lasts.
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Dave Says:
August 8th, 2008 at 6:23 am
You know what the above tells me above all else? Measuring falls in “quarters of gains” is not useful, 3, 5, 8? Unless you’re proposing that there’s a pattern and our next fall will be 16 and after that 32?
It is a very useful observation. What it tells you is that real estate corrections occur relatively quickly compared to the bull market that preceded them. None of our recent corrections has given up more than two years of gains. On average, it would be around 5 quarters. If we use that rule of thumb, then perhaps our correction will be on the order of 10 to 15%, but not 30% like many are calling for.
Why don’t you like using fundamental valuation Dave? Could it be that, although it is the most accurate method of predicting how big a correction will be, it doesn’t agree with what you want to be true, so you ignore it?
There is nothing wrong with using fundamental values. There are lots of different ways of doing it and lots of different assumptions that go into it. You also need to project where we are going to be in a couple years, rather than looking back. And you can’t just cherry pick the market that suits your analysis (e.g. looking at worst case).
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Dave Says:
August 8th, 2008 at 6:32 am
i notice again you fail to address the affordability issue…a 17% drop does not bring prices in line with the rental income metric
Affordability, rent to price and income ratios are three different measures.
With respect to affordability, how do you think prices got to where they are? The reason is that current prices were affordable to purchasers. The only other way that affordability gets driven up in an unsustainable way is through speculation. But, as I have demonstrated before, there is only a minor amount occurring relative to prior booms (e.g. 1980).
I don’t have time to comment on the other two measures at the moment, but can if you would like to see my assessment.
and you fail to take into account the sales volume drop in the last two months
ie.-43% and -45% and August is looking like maybe -50%…….
I don’t understand what you are trying to point out here. Please clarify what your comment relates to.
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mln Says:
August 8th, 2008 at 8:08 am
“The only other way that affordability gets driven up in an unsustainable way is through speculation. But, as I have demonstrated before, there is only a minor amount occurring relative to prior booms (e.g. 1980).”
Minor amount of speculation. Really.
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Drachen Says:
August 8th, 2008 at 10:54 am
mln
“Minor amount of speculation. Really.”
He hasn’t demonstrated anything before. He’s run out of arguments so he keeps bringing up old ones that were completely shredded by users here and on NVCondos. He has a bad habit of taking discredited arguments and re-hashing them as though they were solid. He’s even taken arguments that have been shown to be completely false one place and within hours of being disproven he’s taken those same arguments to a different forum, hoping for a dumber audience I suppose.
His “Speculation” argument is based around some highly questionable statistics that completely fail to actually represent the actual amount of speculation. In fact I can guarantee that the number he likes to cite is less than the actual amount of speculation.
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rx Says:
August 8th, 2008 at 11:00 am
Wasn’t there supposedly little or no speculation happening in California and Florida before the crash -at least according to all the official sources and talking heads? If you’re paying much more for a place than its rental value you’re speculating.
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Dave Says:
August 8th, 2008 at 12:30 pm
His “Speculation” argument is based around some highly questionable statistics that completely fail to actually represent the actual amount of speculation.
It’s not an argument at all. It’s simply the best statistic that is available from MLS data. I readily admit that it doesn’t capture the entire market because pre-sales aren’t recorded as transactions on MLS.
I have asked numerous times for somebody else to provide a better metric and to date, nobody has. Rather, commentary provided by others on speculation are purely anecdotal, which is basically useless.
In the meantime, the level of speculation, as defined by multiple MLS transaction for the same unit within a six month period, is a low percentage of overall activity in the marketplace.
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Drachen Says:
August 8th, 2008 at 12:49 pm
Dave
So, essentially what you’re saying is you’d like to use a number you know is false to support your argument and we should all just ignore the man behind the curtain?
When you’re busted using your known false statistic you simply point at others and say, “Some of them used numbers that have even less support.”
Just because other people use an argument that is ‘more wrong’ does not make your argument any better. It just makes you look like a five year old pointing fingers.
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Dave Says:
August 8th, 2008 at 1:16 pm
Drachen, all real estate statistics would be false if we were to apply the standard you suggest. All of the standard metrics are just an approximation of what is really happening in the market.
The metric for speculation is useful, but not perfect. It is akin to using the data for rental rates and occupancy. Although not absolute measures, such metrics are very good for demonstrating trends and good for comparing with past data. For example, we know that occupancy rates are lower today than they were five years ago. I don’t think anybody would debate that. However, some may take exception of the published rate of 0.5% (or wherever it is now) and argue it is really higher (or maybe lower). Similarly, the volume of units flipped (something speculators do), isn’t that high and is much lower than the 1980 crash. It also peaked out a few years ago and has been declining since. I am not sure why you would want to discount such useful information.
Again, I have yet to hear a better metric for speculation. Feel free to publish your Craiglist index.
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Lager not Logger Says:
August 8th, 2008 at 1:49 pm
I readily admit that it doesn’t capture the entire market because pre-sales aren’t recorded as transactions on MLS.
So in other words our speculation stats don’t look too bad since they don’t take the most speculative sector into account?
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Drachen Says:
August 8th, 2008 at 2:42 pm
Dave
“It is akin to using the data for rental rates and occupancy.”
Which you have argued in the past are invalid. Essentially you’re using data which you would argue was invalid if someone else was using it against you. Thank you for the clarification on your duplicity. The case for the ’speculation’ statistic is far weaker than the argument for using rental rates an occupancy I might add.
Lager not Logger
“So in other words our speculation stats don’t look too bad since they don’t take the most speculative sector into account?”
The statistic is really misnamed, it’s called ’speculation’ and Dave likes to pretend that it has a real world value for measuring speculation but it really only covers cases where there were two completed transactions on an actual property (not one in development) within a six month period. Speculation cannot be measured that way.
How many people do you know who have “investment” properties they’re not planning on selling until after the Olympics or similar distant point in time?
How many people are buying a place to live in for the rest of their lives on the assumption it will appreciate significantly over the years?
How many people do you know who ‘flip’ assignments?
I think it’s entirely debatable that 90-99% of people buying residential property in Vancouver right now are speculators.
Dictionary.com says a speculator is:
“someone who risks losses for the possibility of considerable gains”
Using that definition ANYONE buying property that is above it’s fundamental value is speculating and therefore 100% of the Real Estate sales in Vancouver over the past few years have been speculative (with the possible exception of a few cases where family/friends sold a property at a huge discount as a ‘gift’).
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islander Says:
August 8th, 2008 at 5:21 pm
And then he posts again 47 minutes later.
Dave, you may have OCD.
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islander Says:
August 8th, 2008 at 5:47 pm
At the end of the day, Dave can spin all the stats he wants. I can cherry pick MLS, too, and make the numbers say whatever I want them too.
On the way into the bank today to cash a commission cheque, a guy maybe 40 walks up to me (after seeing my logo on my vehicle) and says, “How’s the market?”
Before I could answer he says, “Nightmare, eh?”
So we strike up a conversation. He’s builds fences. He sees the slowdown. So does my wife, the landscape designer. So does the guy who does my graphic design.
Anecdotal? Sure. But so was “we gotta buy now or we’ll never get in” or “the market won’t go down here. Victoria is different.”
Man on the street knows.