Friday Free-for-all!
Well it’s back to school time and the air is getting a chill to it. What’s happening in our local housing market and economies around the world?
-Drop in home sales causes economic problems
-Economic problems cause drop in home sales
-House sales in Vancouver ‘went off a cliff‘
-August ‘08: slowest month for real estate since 1998
-Yaletown Sofa closes outlets, seeks new line of credit
-Buyers see hope in Lower Mainland real estate crash
-Victoria prices slide, listings at 12 year high
-Bank of Canada holds interest rates steady
-TSX slides on oil price drops and economic fears
-Whistler shipping-container home plan collapses
-is the Florida market nearing bottom?
So what are you seeing out there? Post your news, links and anecdotes here and have a great weekend!
note: any conversation on Vancouver, real estate or economics is allowed, please keep it civilized. When posting articles please only quote pertinent points and link to the original instead of pasting the entire article here. Pasting a link will automatically create a clickable hot-link. Thanks!
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Mr. Market Says:
September 4th, 2008 at 8:54 pm
The market is toast.
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Mr. Market Says:
September 4th, 2008 at 8:54 pm
The market is dead.
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Mr. Market Says:
September 4th, 2008 at 8:55 pm
Van RE is already down 10% from the peak in February. The graph is on the front cover of the Sun.
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Mr. Market Says:
September 4th, 2008 at 8:56 pm
Millions have already been lost and hundreds of millions will be lost in Van RE before the end of the year.
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Mr. Market Says:
September 4th, 2008 at 8:58 pm
If you have an inventory of property you were hoping to sell for capital appriciation, you are going to loose BIG money. You wont be able to sell. Get use to those big mortgage payments and annoying tenants.
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JB Says:
September 4th, 2008 at 9:04 pm
Scramble for cash as central banks dry up
http://business.timesonline.co.....656321.ece
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browntown Says:
September 4th, 2008 at 9:30 pm
hey nutspanks! browntown is back to tell you listen up foo better call rennie resales before next leg up! real estate solid like rock! can you smell what the bdk is cooking! “lLlLlLlLlLlL” yeah!
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Re-diculous Says:
September 4th, 2008 at 10:38 pm
Still anxiously waiting for Bill Good to sssemble the “real estate experts” to talk about the state of the market. They haven’t been on for quite a while now….I wonder why. I will continue to monitor and report back when they decide to come out from their hiding spot.
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patriotz Says:
September 4th, 2008 at 11:07 pm
Drop in home sales causes economic problems
Well no, the drop in home sales is the result of an economic problem, not a cause.
The problem of course being that houses are too expensive. When house prices return to normal levels the problem will go away.
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condohype Says:
September 4th, 2008 at 11:10 pm
“Co-owner Pauline Sandland, who, along with husband Zane Lowell, founded [Yaletown Sofa] in 2005, said in a telephone interview that the stores were closed only for inventory-taking. If there was no answer, staff were out getting food, she said.”
Out for food? That’s hilarious. You know, I went down to A&B Sound on Seymour this week. Apparently they’re “out for food” too.
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patriotz Says:
September 5th, 2008 at 12:22 am
Greenspan is spouting it again:
http://www.globeinvestor.com/s.....5/GIStory/
“Mr. Greenspan envisions the formation of a group akin to the Resolution Trust Corp. to step in, take a troubled company into conservatorship, wipe out the equity, impose some charge or “haircut” on its debts before guaranteeing them and then selling its assets. The RTC was created in 1989 to deal with the aftermath of the savings and loan crisis. It disposed of the assets of failed savings and loans and then went out of business.”
Utter crap. A debt is either guaranteed by the government (like FDIC deposits) or it isn’t. RTC did not compensate uninsured creditors of the S&L’s. It just distributed the net assets of the S&L’s to them.
If you loan money to a private sector entity and it can’t repay you, that’s your problem.
There’s plenty more to go after, but I’ll leave it to someone else.
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Marky Mark and the funky bunch Says:
September 5th, 2008 at 5:38 am
yaletown sofa is nice example of the overall problem in Vancouver……..absolute greed. The company tried to grow too quickly, over extended itself and eventually found it couldn’t keep the core business going.
I can never knock people for trying to run their own business, but they made the faulty flaw of not saving for a rainy day……kind of seems ironic in a place like Vancouver.
The same thing is happening right now with amateur real estate investors in Vancouver who thought it was wise to take out mortgages on several units, never anticipating that the party might come to an end.
I guess all those naysayers weren’t so stupid after all.
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condohype Says:
September 5th, 2008 at 7:33 am
Rennie’s was just on the Early Edition with Rick Cluff. Caught the end of what he said. Here’s his take — paraphrased, not transcribed — on the impact of the 2010 Olympics on local real estate:
“I don’t think we quite understand that branding yet. But look, only a few months ago we couldn’t pronounce Beijing. Look at what’s going on in Vancouver. Everybody gets mad when I call us a world-class city. Yes, we’re not Paris… but it’s a very special place to be. Think about what happened after Expo. Going past 2010, there’s gonna be a lot of pressure that’s been unheard of.”
Condo King Bob also used the term “correction” a few times and gave a statistic about how 92% of the local population lives paycheque to paycheque.
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Thums up2 Says:
September 5th, 2008 at 7:43 am
NO DOWNTURN IN DECADES TO COME WOW!THANKS 2 IMUNE SYSTEM-IT WORKS.
*Job market rebounds as economy adds 15,200 workers in August,*Rent$3500 / 1br – Brand New Live/Work Townhome in Central North Burnaby,*Yoy prices are up,*Interest rates are low sweet deals out there*job growth and*population growth through*migration,which support the*housing market, are in*positive territory,while *smart buyers and _fool sellers will be countinue ladies and gentlemen welcome to “THE BEST PLACE ON EARTH”.
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Mr. Beautiful Says:
September 5th, 2008 at 8:07 am
$3500/ month for a 1br in Burnaby? Thats hilarious! Are you going to rent it thumbs? Because if you are I can get you a better deal, I have a 1br in Burnaby I can rent you for twice that!
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Mr. Beautiful Says:
September 5th, 2008 at 8:09 am
Markymark, nice point about the irony of not saving for a rainy day in a place like Vancouver, seems to be a bit of an epidemic.
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Anonymous Says:
September 5th, 2008 at 8:12 am
you have to think about it? places are going on snap shot!!! the question remain same as yours,ARE YOU WILLING TO PAY?or downgrade your self in STINKY CHICKEN SHACK??hint,Interest rates are low???
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Martin Says:
September 5th, 2008 at 8:20 am
The fact that our downward RE cycle is starting relatively late compared to places like the U.S., Spain, the UK, Hong Kong, etc. and just as the the worldwide economic slump is worsening, I get this feeling the “correction” will be huge.
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Anonymous Says:
September 5th, 2008 at 8:21 am
But look, only a few months ago we couldn’t pronounce Beijing.
Who couldn’t pronounce Beijing? Dude! Beijing has more than 8 times the population of Metro Vancouver and more than 28 times the population of Vancouver itself. If you never heard of Beijing before the Olympics you probably don’t know the difference between the summer and winter games and are really excited about our ‘world class status’.
By the way who’s moving to Beijing or buying property there now that you’ve heard of it?
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Martin Says:
September 5th, 2008 at 8:23 am
A prominent real estate developer recently told me that we will see a short term and shallow correction but that prices can’t really drop too far because the cost of construction has increased so much. In other words, prices can’t go below what it costs to build. Does that make sense to any of you? It seems to me the cost of land, construction materials and labour will go down as the RE market softens.
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VHB Says:
September 5th, 2008 at 8:25 am
I heard that Rennie interview. My favourite part was when he said “it’s all about supply.” If only Rick could have had Mohican’s under construction graph or Mohican’s MOI graph to whip out. Oh well, can’t really do that on radio.
No wait. My FAVOURITE part was the music that was playing as they moved on to the next interview. Did anyone else catch it? It was ‘Pop goes the world’ by men without hats. (youtube)
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VHB Says:
September 5th, 2008 at 8:26 am
Martin: Bass Ackwards. The cost of construction is high because there is so much construction. Once construction falls off, costs will come down. As Rennie says, it’s all about supply.
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VHB Says:
September 5th, 2008 at 8:27 am
Martin: Sorry–to clarify, you’re right the developer is bass ackwards.
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Gwailow Says:
September 5th, 2008 at 8:35 am
I watched the Olympics on TV and really enjoyed them. I couldn’t pronounce China before the Olympics let alone Beijing. That said, I have always enjoyed Chinese food, especially sushi. I am know thinking of buying a rustic Hutong (they talked all about them on the CBC coverage) and restoring it to its original character. Who doesn’t want a Hutong in Beijing? Do you think some Japanese bank will give me a motgage?
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john Says:
September 5th, 2008 at 8:42 am
I just bought another couple of assignments off of someone who obviously has no clue what they’re doing. I got both for under $5000. I’ll make a killing. This person basically gave me $100,000 easily. It’s right in East Van, perfect location.
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condohype Says:
September 5th, 2008 at 8:54 am
VHB, yeah, “Pop Goes The World” was the closing music to the Rennie interview. I’ve noticed that CBC’s used it a few times following interviews with real estate people.
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VHB Says:
September 5th, 2008 at 8:55 am
Hey condohype. That music makes me think of my youth. Oh Erika Ehm where are you now?
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Dave Says:
September 5th, 2008 at 8:56 am
Martin, I think there is some truth to what the developer is saying. VHB, the quote provided did not state that construction prices would necessarily hold. Rather, it appears the statement was that housing prices cannot sustainably remain below replacement cost.
I have speculated on this before as well. With an increasing population like we have in the GVRD and with limited land available, I think the cost of construction can definitely provide a price basement.
I don’t think construction costs can really fall that much. The employment market is still strong and unemployment is low. They aren’t making more land and it is increasingly more difficult to find good places to develop within the city. The time and costs for permitting are not going anywhere. The cost of materials may ease because global commodity prices have dipped and there will be less residential construction. That said, the list of major projects planned for BC has never been higher, so there is still a lot of work on the books, which means high demand for materials and labour.
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Bluesman Says:
September 5th, 2008 at 9:00 am
If you go to this link to cbc’s early edition and click on Fri you should be able to find the interview between Ricky and Rennie. The audiofile is not updated yet for today, so you have to keep trying until the technician’s get today’s version uploaded. Go CBC techies!!!
There is also an interview with Tsur Somerville at the beginning on the news section. The interviewer starts out by saying how Tsur will tell us why it is now better to rent than own, but in the actual interview Tsur starts tripping over his tongue and reverses the point 180 degrees by declaring that renters aren’t disciplined enough to save the difference between renting and owning and therefore owners come out ahead in the longrun. Go Somerville!!! wink wink
http://www.cbc.ca/earlyedition/
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ReductiMat Says:
September 5th, 2008 at 9:14 am
Dave, you stated, “I don’t think construction costs can really fall that much.”
How much is the most you think they will fall?
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Dave Says:
September 5th, 2008 at 9:20 am
ReductiMat, it would take a lot of work to provide an intelligent answer to that because are so many factors to consider.
Intuitively, I would say 10% would be a lot.
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Bluesman Says:
September 5th, 2008 at 9:22 am
I do believe that Ricky Cluff is married to a realtor, NOT THAT THERE’S ANYTHING WRONG WITH THAT wink wink.
http://www.homelifewhiterock.ca/carolcluff/
I’ll never forget Ricky’s lament one dark moldy rainy morning last winter when he pondered out loud on the early edition “I wonder when the real estate market is going to pick up again…”
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patriotz Says:
September 5th, 2008 at 9:39 am
I think the cost of construction can definitely provide a price basement.
Indeed it does, providing a city is growing (i.e. not Detroit, etc).
So how much of the price of a house is construction, and how much is land? No floor on the cost of land. And as pointed out above, construction costs, both labour and materials, fall as demand falls.
How much do you think it really costs to build a house in a soft market? Check out prices in 2001, and even then land was still a big chunk of the price.
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dingus Says:
September 5th, 2008 at 9:41 am
From a Canaccord Capital Newsletter I got today — the commentary is startlingly frank:
‘”Buyers See Hope as Home Prices Decline: August saw property markets continue dramatic turn.” – The Vancouver Sun headline story yesterday. Metro Vancouver detached home prices fell about 4.3% from May through August, while the typical apartment prices fell 3.9% and townhouse 3.2%. Greater Vancouver residential property sales activity in August dropped 53.7% from August 2007 and 47.7% from August 2006. New listings dropped 1.7%, likely a function of some sellers giving up and pulling their properties from the market. “In August, properties on average remained on the market longer than we’ve seen in recent years,” said the Real Estate Board of Greater Vancouver’s president, whose organization published the data. “As the market heads into traditionally more active fall season, we have begun to see property listings recede and prices moderate.”
Sorry, but seasonality has nothing to do with it when both August 2006 and August 2007 activity remained extremely strong but this year it has been decimated in half. Bubble psychology and unafordability is where these so-called experts should be focused on. Not seasonality, not the specious argument that the Olympics will keep the market strong until 2010, not the obvious fact that Vancouver is a “world class city” (along with dozens and dozens of others that rain less). Forbes took cap rates and then flipped them into P/E rates. The worst was Monaco at 74.07x, followed by Rome at 50.51, Paris at 37.45, Madrid at 30.30, Los Angeles at 26.88, and then Vancouver at 26.81x. This contrasts to the Canadian average of 16.31x, they found. “Vancouver has one of the lowest rental yields of any city measured, at 3.19%, despite high prices. Across Canada, despite the same tax system, the effective annualized return rate resulted in a much better P/E of 16.31x. Owners need to be aware that such a large spread
keeps the rental market strong and keeps the market for sellers more stagnant. The pool of buyers remains relatively small as renters can get the same property at significantly less cost and invest the difference.” especially if prices continue to fall.’
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beta Says:
September 5th, 2008 at 9:53 am
I don’t think construction costs can really fall that much. The employment market is still strong and unemployment is low. They aren’t making more land…
3 faulty cliches in three sentences. Bravo! John would be proud.
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patriotz Says:
September 5th, 2008 at 10:00 am
this year it has been decimated in half.
Now there’s one for the malapropism hall of fame!
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Anonymous Says:
September 5th, 2008 at 10:03 am
Beta,
Don’t you see projects were coming to halt that’s mean you must pay high prices to buy otherwise no one making it any more.
When bears are whining for $737k benchmark are you willing to buy $20 millions worth of parking lot?Developers are not social workers they are willing to develop land on profit not on loss so construction cost move is null and void here.
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jesse Says:
September 5th, 2008 at 10:12 am
“No floor on the cost of land.”
QFT. In some cases, and not just Scottish castles, the cost of land can go negative.
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from the past Says:
September 5th, 2008 at 10:17 am
VHB & Condohype:
Salespeople keep trying to pump up the volume by saying that Vancouver is just like heaven and the market should recover with or without you, but some are trying to safety dance their way out of pre-sales contracts.
Unfortunately for them buyers keep saying “I still haven’t found what I’m looking for”. Is this just a sign o’ the times? The bills remain to be paid in full and overstretched speculators may start singing “Its the end of the world as we know it”
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dingus Says:
September 5th, 2008 at 10:18 am
“this year it has been decimated in half.”
liked that too. Worthy of Yogi Berra.
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Vansanity Says:
September 5th, 2008 at 10:23 am
Some of this dialogue is just hilarious!
Prices will hold because they need to cover construction costs, haha!! So now prices will be dictated by the seller and not the market,sorry those days did exist, but are long gone! Who cares about supply and demand. It’s about construction costs! Let the developer add a little profit and overhead and bam, price set, house sold. Whatever. Fundamentals are back, I know it’s new for a lot of bulls out there because this market was acting on speculation and hype not fundamentals, so welcome to Economics 101, you’re first lesson will bite you in the A!
I got so annoyed yesterday by another huge koolaid drinker who last year stated “prices will never go down, you should look at buying a place in abbotsford or chilliwack because you’ll never afford in vancouver or burnaby”, uh huh, sure. Then yesterday told me that prices are coming down as he knew they would!!! After I picked up my jaw from the floor, I was so pissed, here’s a classic example of a sheeple trying to now use the front page of the Sun to illustrate his point, ha! Easy to go along with the crowd!
I told him, the difference between us is you make “predictions” by looking in a rearview mirror, I make them looking through my windshield. Like many of you, I have been rediculed for over a year by saying this was coming and it was inevitable, against sheeple like this guy. They scoffed and laughed and used the same old propaganda they heard on the radio and newspapers against me. Anyway, now they are all on board, f*** these sheeple don’t get it!
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Drachen Says:
September 5th, 2008 at 10:33 am
Dave
“Rather, it appears the statement was that housing prices cannot sustainably remain below replacement cost.”
You have it backwards too, what you should be saying is, “Replacement costs cannot remain below housing prices.”
Construction is not three times as expensive (in real dollars) as it was 20 years ago, housing is. From that it’s pretty easy to tell that the “construction costs” argument is just a dodge by slick Willies and Daveys.
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bdk Says:
September 5th, 2008 at 10:40 am
Construction costs will fall once the labourers go back to making $10/hr and the Carpenters revert back to the $33/hr range.
The reason the salaries escalated so quick was due to the whole bubble (supply and demand) that led to homeless people making $15/hr sweeping.
The fact that the once highly paid but now out of work construction workers cannot afford their multiple properties, boats, and cars will not help sustain the market either.
Furthermore once the jobs which pay double and triple the historical norms evaporate some of the transient workers will move on and stop paying the inflated rents that are being charged right now.
1.falling rent.
2.falling income.
3.dramatic increase in available labour.
4.drop in all commoditiy prices.
5.signifigant increase in available units for sale.
6.a lot of unemployed wanna be realtors like Dave sitting at the coffee shop spouting off on blogs that everything is fine.
This will mean developers will go bankrupt and owners of these inflated assets will collectivelly absorb the massive losses just like the rest of the world.
Try and spin it any way you want Dave but you’ll be back working as a parking attendant in a year
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Anonymous Says:
September 5th, 2008 at 10:41 am
Jesse,Drachen,
there are lots of sides of market issue is whether your lines worth applying on vancouver,think before you write.
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Bluesman Says:
September 5th, 2008 at 10:46 am
Ok, The audiofile of the Tsur Somerville and Bob Wennie interviews are up at cbc’s early edition site.
Go to http://www.cbc.ca/earlyedition/
click on Fri
Somerville is at
3:40
Wennie is at
1:20:45
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john Says:
September 5th, 2008 at 10:47 am
The reason why prices have not fallen and cannot fall is because this is the best place on earth and contruction costs are still high and the rich asians know this. Pretty soon I will be quitting my job as nail gun repairman and will be a semi-retired real estate investor and real estate agent to the stars.
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Anonymous Says:
September 5th, 2008 at 10:52 am
“3.dramatic increase in available labour.”
That’s so funny when idiot don’t know the retiring age.
“1.falling rent.”
I wish that’s true but it’s totally apposite
“2.falling income.”
Did some one say vancouver is not a new york?yes when it comes to pick pocketers stealing your salary vancouver is not a new york.
“5.significant increase in available units for sale.”
what happened to Raffle,Elan,Spectrum etc. isn’t that was same idiot telling other the same story.
I BDK……confirm i will be cheering up in 2010 just like the rest of the world thanks every one have good weekend.
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Anonymous Says:
September 5th, 2008 at 10:59 am
Speaking of developers, does anyone know if Peak Ventures in whistler is any good? I know someone looking for a custom builder.
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pinocchio123 Says:
September 5th, 2008 at 11:01 am
I’m actually curious how many ordinary people did make it out big this time. And I don’t mean someone who “upgraded” to a bigger house and a bigger mortgage because of paper equity.
I mean someone who was smart enough to buy plenty when it was cheap and sell it all at the top and retire with all the REAL money they made on this insanity on some island somewhere…
How many REAL millionaires did this boom create?
And I’m not counting the real estate agents or developers. Just ordinary homeowners turned speculators.
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Bluesman Says:
September 5th, 2008 at 11:05 am
At the end of the interview Ricky says “Bob Rennie, real estate developer.”
To which Rennie interjects: “I AM NOT A DEVELOPER!!! nnnot that there’s anything wrong with that….”
ROTFLMAOAOAOAO
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pinocchio123 Says:
September 5th, 2008 at 11:05 am
Anonymous #47… WTF?
Are you one of those idiots hired by RE industry to pollute local blogs with your drivel?
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bdk Says:
September 5th, 2008 at 11:18 am
#51 it’s just krissh spouting his usual incorrect and incoherent ramblings.
Personally I’d advise you to ignore any superstore warehouse worker with no comprehension or common sense if I were you. Even the Vancouver Sun called him an idiot!
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john Says:
September 5th, 2008 at 11:19 am
The fact that so many of you spend so much time talking about real estate proves the market is in good shape. What’s even better is you all claim to have money ready to buy. When the time comes I will gladly sell my condos to any of you. I won’t give you a special bear discount but I will guarantee you first crack at list price.
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Drachen Says:
September 5th, 2008 at 11:29 am
Err, in post 42 I mean “Above” obviously.
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jesse Says:
September 5th, 2008 at 11:31 am
“issue is whether your lines worth applying on vancouver”
Incomes and supply overhangs cannot adjust fast enough to price in higher construction costs. Buyers have lots of other choices in the meantime. Your fight is obviously with the new reality, not bloggers like Drachen and me.
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read on Says:
September 5th, 2008 at 11:32 am
john,
why sell at list price if you are so confident?
retard
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Drachen Says:
September 5th, 2008 at 11:34 am
Pinocchio
“smart enough to buy plenty when it was cheap and sell it all at the top”
The word you’re looking for is not “smart”. Warren Buffet is a smart investor, you won’t catch him riding a bubble like that.
Is it “smart” for someone to gamble their life savings in Vegas and win a million dollars? Bubble speculation is gambling, make no mistake, the only difference is that nobody breaks your legs when you cheat the game.
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jesse Says:
September 5th, 2008 at 11:36 am
“I won’t give you a special bear discount but I will guarantee you first crack at list price.”
Haha, that’s funny, even for you, john. Give me the bear discount and I’ll go above asking.
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patriotz Says:
September 5th, 2008 at 11:40 am
renters aren’t disciplined enough to save the difference between renting and owning and therefore owners come out ahead in the longrun.
Seriously? It doesn’t matter whether they save the difference or spend it – the renter is getting what they want from their money. It’s a consumer choice. The renter is better off than the owner simply because they are paying less for the same shelter.
What a clown.
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Burden of Proof Says:
September 5th, 2008 at 11:49 am
“They aren’t making more land…”
Of course they are. What do you think a highrise is?
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Burden of Proof Says:
September 5th, 2008 at 11:54 am
Vancouver prices are already down 10% from the February peak. Obviously the collapse has begun. and the graph was on the font page of yesterday’s Sun.
10% in six months is a fast decline. If you have not already sold your investment units, I know a good bankruptcy lawyer. You’ll need him six months from now.
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jesse Says:
September 5th, 2008 at 11:54 am
“The renter is better off than the owner simply because they are paying less for the same shelter.”
The other comparison is a renter with no financial control to a buyer still wasting money and going BK (or taking out HELOC on the CA). I also loved Tsur’s comparison of CA of housing and the stock market, neglecting taxes, dividends, and rents. What brilliant financial advice, O Sage Sommerville.
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Dave Says:
September 5th, 2008 at 12:22 pm
“They aren’t making more land…”
Of course they are. What do you think a highrise is?
And how often do they add stories to an already completed structure? How many empty lots in the City are zoned for such development?
How many new single family lots or neighbourhoods were created west of the Port Mann in the last few years?
Our population is increasing and the demand for land can only grow over time.
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jesse Says:
September 5th, 2008 at 12:43 pm
“How many new single family lots or neighbourhoods were created west of the Port Mann in the last few years? “
How many in the last 30 years in Vancouver proper? It’s already priced in, less a risk discount. Even still, if the densification will happen too far in the future it’s so heavily discounted it only adds a very tiny amount to the current value of the property.
Gentrification, or the three Ls of real estate, which is what you are hinting at I think, is another story. We know real wages are flat (even in Vancouver proper) so on average prices are not affected but individual neighbourhoods can be. Like densification, many neighbourhoods have this already priced in but maybe not.
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Strataman Says:
September 5th, 2008 at 12:45 pm
Dave “And how often do they add stories to an already completed structure? How many empty lots in the City are zoned for such development?” Dave in case you haven’t noticed they tear down structures and build highrises. Looking out of my den right now I see five lots that have demolished old structures (viewpoint corner of Richards and Pacific) and new towers are in construction. I can count from this one view point well over 24 lots already zoned for high rise that still have single or two story shacks on them. In this area there is at least triple potential sites as to what is already being developed.
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Burden of Proof Says:
September 5th, 2008 at 12:58 pm
Dave,
What do you think about RE being 10% from the peak alreadey? The graph is on front cover of yeterday’s Sun in case you missed it. (SFH went from Low $900’s to low $800’s in only six months!)
We have already exceeded your mild correction prediction haven’t we?
The market beginning to collapse.
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chip Says:
September 5th, 2008 at 1:07 pm
Interesting story in the FP today. Oil sands costs have jumped over 30% to $85 a barrel. With oil at $106 a barrel and under continued pressure it looks like a lot of marginal projects are going to suffer.
Ask yourself too where Canada’s economic future lies. Energy makes up a third of our exports in a world where the medium-term trend is clearly nuclear and solar. Will the Canadian economy be ready in 2015?
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jesse Says:
September 5th, 2008 at 1:10 pm
“I can count from this one view point well over 24 lots already zoned for high rise that still have single or two story shacks on them.”
The same principle applies even without zoning. A bungalow on a large lot is torn down and a 3 story house with suites, or a duplex in some neighbourhoods, is erected in its place. This isn’t creating land, it’s making the land more productive.
If 50 years from now these places are torn down and Rennie Specials are erected it shouldn’t affect things much today since the incomes must soon support the prices. Future gains are meaningless if you don’t have the ability to carry it.
I hear they’re building a 600 story highrise in Ladner in the year 2200. Buy now before it’s too late! john will give you first crack
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Dave Says:
September 5th, 2008 at 1:13 pm
Dave in case you haven’t noticed they tear down structures and build highrises. Looking out of my den right now I see five lots that have demolished old structures (viewpoint corner of Richards and Pacific) and new towers are in construction. I can count from this one view point well over 24 lots already zoned for high rise that still have single or two story shacks on them. In this area there is at least triple potential sites as to what is already being developed.
Oh, I have noticed. Not too many of those properties are for sale, not too many have the right location along with a myriad of other reasons why developers have a tough time finding good lots. Aany developer and they will tell you that.
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Bluesman Says:
September 5th, 2008 at 1:13 pm
Here is a chart of the tsx for the past 3 years (just change the time frame to 3 years and click draw chart). If you had 100,000 dollars in the tsx Sept/06 and cashed it in today you would have made 3% a year ($6,000).
If you had bought a condo for $100,000 in September 2006, you would have made how much? $376,500 give or take – $333,398 = $43,102. $43,102/2 = $21,551 per year, or a total of $21,551/$333,398 = 6.4% per year. If you take say 20,000 of that for realtor fees, closing costs, etc. it brings you down to 3% per year. The same as you would have made on the tsx or in a regular GIC at Vancity. In fact, two years ago the 18 mos. GICs at Vancity were at 4.7%. Go figger, Dave and all you other real estate pumpers out there.
http://cxa.marketwatch.com/TSX.....CA%3aISPTX
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Dave Says:
September 5th, 2008 at 1:24 pm
What do you think about RE being 10% from the peak alreadey? The graph is on front cover of yeterday’s Sun in case you missed it. (SFH went from Low $900’s to low $800’s in only six months!)
We have already exceeded your mild correction prediction haven’t we?
The market beginning to collapse.
That’s one set of data. Most people seem to stick with the HPI which is off about 4 to 5%. So no, we haven’t exceeded my prediction of 5% in the Fall of 08, but will undoubtedly exceed that shortly.
What do I think of it? Prices have dropped more quickly than I would have anticipated. I would have expected a greater lag time between inventory (measured as MOI) and price changes.
Pastrick just stated that we are about halfway through this correction and that things should stabalize sometime in 2009, within 6 to 9 months from now.
If you are a first time buyer, then this is all good news because things are a little more affordable and there is lots of selection. I would recommend such people get their finances in order and start getting familiar with the type of product they would like to purchase. The end of the correction may not be that far off.
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Dave Says:
September 5th, 2008 at 1:29 pm
Bluesman, that’s a lot of ifs. You can ‘what if’ anything into whatever you want it to say, but it doesn’t mean a thing.
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Bluesman Says:
September 5th, 2008 at 1:32 pm
Dave: IF you are a first time buyer, then this is all good news…
touche
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jesse Says:
September 5th, 2008 at 1:38 pm
“Pastrick just stated that we are about halfway through this correction and that things should stabalize sometime in 2009, within 6 to 9 months from now.”
That wouldn’t be the same Pastrick that predicted up to 10% price gains in 2008 and a up to 7% in 2009, would it?
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Bluesman Says:
September 5th, 2008 at 1:38 pm
Here’s a picture of Dave.
Dave — YOU”RE FIRED!
http://www.fotosearch.com/CSK006/pr26451/
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Bluesman Says:
September 5th, 2008 at 1:40 pm
Here’s a picture of Dave:
http://www.fotosearch.com/CSK006/pr26451/
Dave — YOU”RE FIRED!
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beta Says:
September 5th, 2008 at 1:45 pm
things should stabalize sometime in 2009, within 6 to 9 months from now
Housing corrections take several years, not months. Pastrick is either engaging in wishful thinking or he just doesn’t want to scare the sheep.
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Bluesman Says:
September 5th, 2008 at 1:50 pm
Dave said: “things should stabalize…”
Dave, is English your second language by any chance? Your first language wouldn’t happen to be Klingon — er I mean Clingon, would it? hehe
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pinocchio123 Says:
September 5th, 2008 at 1:51 pm
“Pastrick just stated that we are about halfway through this correction and that things should stabalize sometime in 2009, within 6 to 9 months from now.”
Dave, you must realize that you are seriously damaging your credibility when you use quotes like that.
You do want people here to take you seriously, don’t you?
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Dave Says:
September 5th, 2008 at 1:52 pm
Bluesman, my statement isn’t conditional, it’s just phrased that way. Lower prices are good news for all first time buyers.
Touche
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condohype Says:
September 5th, 2008 at 1:59 pm
Forbes said it best last year when they listed Vancouver as the 6th most overpriced real estate market in the world. They also said it makes sense to rent and invest the difference. But hey, not like Forbes is written by people who know anything about investing.
Don’t believe me? Read it for yourself:
“P/E: 26.81 – Vancouver has one of the lowest rental yield rates of any city measured, at 3.19%, despite high prices. Across Canada, despite the same tax system, the effective annualized return rate resulted in a much better P/E of 16.31. Owners need to be aware that such a large spread keeps the rental market strong and the market for sellers more stagnant. The pool of buyers remains relatively small as renters can get the same property at significantly less cost and invest the difference.”
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Vansanity Says:
September 5th, 2008 at 2:01 pm
Dave is grasping at straws. Let him. His opinion, unfortunately for him, won’t make a flying f*** of a difference to what’s going on. Live in denial all you want Dave, I’m sure you’ll be like the rest of the sheeple that will jump off the wagon once its so in your face you’ll have already gone through all the stages (denial, anger, etc…) until you finally reach acceptance and then start claiming you saw this coming all along and that you were never wrong.
In the end, who cares? You’ll have a bunch of anonymous bloggers quoting your BS from months past… who will care? You? Obviously not.
You don’t have to try so hard, sheep have a herd mentality. The vast majority on this blog are not sheep, they’re free thinkers and have come to their own realization through due diligence and their own analyzation, so move on. Blah blah, who cares what you say, you are just full of it like the rest of the sheeple out there. The thing I hate is how you all pull 180’s without a flinch when the data is up against you. God I hate sheep. I’m boycotting wool from here on. You hear that? F*** you sheep!!
I’m becomming scullboy! Just jokin man, I enjoy your rants! Must be all the beers I downed at lunch.. work shmerk it’s time to start the weekend!
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Bluesman Says:
September 5th, 2008 at 2:05 pm
Here’s a photo of the illogical Dave:
http://ocw.usu.edu/University_...../sheep.jpg
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Bluesman Says:
September 5th, 2008 at 2:12 pm
Dave: Ever thought of upgrading?
http://www.vpcollege.com/esl/affiliations.asp
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Drachen Says:
September 5th, 2008 at 2:18 pm
Bluesman
“Dave, is English your second language by any chance? Your first language wouldn’t happen to be Klingon — er I mean Clingon, would it? hehe”
Not Clingon, Clinton. He’s just like Hillary, he’ll say anything to make his case and ignore anything that runs against him and even when he’s absolutely lost he still keeps slinging the mud in the hopes that an asteroid laden with diamonds will smash into the Lions scattering diamonds all over Vancouver and raising real estate prices by billions of dollars (if he hasn’t proposed the diamond asteroid theory yet it’s just because he’s not imaginative enough to have come up with it).
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Bluesman Says:
September 5th, 2008 at 2:25 pm
Drachen said: “…even when he’s absolutely lost he still keeps slinging the mud in the hopes that an asteroid laden with diamonds will smash into the Lions scattering diamonds all over Vancouver and raising real estate prices by billions of dollars (if he hasn’t proposed the diamond asteroid theory yet it’s just because he’s not imaginative enough to have come up with it).”
LOL HEHEHE wooooooohoooooo you made my day, Drachen.. bwahahahaha I can just see Dave running around catching the diamonds as they scatter from the lion-shaped pinatas!!! woohooohoooo. But of course he won’t catch any. But lucky for him a few will stick to his wool. But then he won’t be able to reach them with his mouth so a passer-by will be the lucky winner!!! hehehehe
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Dave Says:
September 5th, 2008 at 2:31 pm
Drachen, we don’t need an asteroid to hit Vancouver for us to strike it rich. This province is LOADED with resources. We have everything anybody could possibly want right here in our own back yard. We have massive amounts of lumber, water, oil, natural gas and coal. And not only that, we are sitting next to a province with one of the largest sources of oil in the world!! We have a highly trained and skilled workforce. We sit next to the world’s largest economy and are at peace with them. And to top it off, we own the closest ports to Asia, which is where world growth is heading. Aside from a little less rain, what more could you possibly want?
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Bluesman Says:
September 5th, 2008 at 2:39 pm
Dave’s fleece:
http://www.cfgphoto.com/img6858.htm
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Bluesman Says:
September 5th, 2008 at 2:49 pm
Dave is beginning to “tick” me off!
http://www.healthline.com/blog.....786603.JPG
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Vansanity Says:
September 5th, 2008 at 2:52 pm
http://www.eratelock.com/images/b_sheeple.jpg
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jesse Says:
September 5th, 2008 at 2:56 pm
“We have a highly trained and skilled workforce.”
That’s interesting because average salaries are much lower in BC than in other jurisdictions. For people as highly trained and skilled as ourselves, we aren’t doing very well on the revenue side. Luckily we don’t need decent money to live in the Best Place on Earth (TM).
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stagnate Says:
September 5th, 2008 at 3:00 pm
the land shortage coupled with population growth is a real issue here. no one should be puzzled why vancouver real estate prices are the highest in north america. nonetheless there is a soft science component to real estate which will dictate the depth of the correction. it is interesting to see the bulls and bears out there in a frantic spin battle for the soft science component.
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pinocchio123 Says:
September 5th, 2008 at 3:05 pm
Dave said:
“what more could you possibly want?”
How about a black plague to rid us of all the idiots out there?
Oh wait, there is one coming… and it’s getting closer…and closer…and closer.
I won’t shed a single tear for all the sheep that will get slaughtered. Not one!
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Bluesman Says:
September 5th, 2008 at 3:06 pm
Don’t worry kids. According to Dave we have a STABAL economy.
http://www.cottage-cader-idris.co.uk/
If we don’t watch out he’ll have us climbing Mt. Snowdon catching flying diamonds.
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Bluesman Says:
September 5th, 2008 at 3:11 pm
Don’t let them give you a snow job, folks.
http://img51.imageshack.us/img.....job6mg.jpg
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john Says:
September 5th, 2008 at 3:20 pm
Why such hate towards wise investors? I can understand somewhat the frustration you poor renters have not being able to afford a home of your own but why hate the wealthy owners like me? If I can do it you can do it too!
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Vansanity Says:
September 5th, 2008 at 3:23 pm
oh john, you are the man. We’re not worried, soon many speculators/owners will be just as “poor” as the rest of us.
http://www.ashie.com/sheeple%20copy.gif
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Bluesman Says:
September 5th, 2008 at 3:36 pm
Don’t let them pull the wool over your eyes:
http://www.pet-bliss.com/acatalog/rw23.jpg
YOU, TOO, CAN LEARN TO BE A SPINMEISTER:
http://makerfaire.com/pub/e/268
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Drachen Says:
September 5th, 2008 at 3:52 pm
Dave
“we are sitting next to a province with one of the largest sources of oil in the world!!”
Mexico sits next to the wealthiest country in the world. I guess they must be pretty wealthy huh?
“blah blah, natural resources, blah blah port close to Asia”
And these are such new discoveries that real estate prices are just rising like crazy NOW! Nobody knew that BC had lumber 50 years ago! It came as a total shock to the residents to find out in the late ’90s (when globes and atlases finally made it to our little backwater) to discover that ASIA was nearby, I mean ASIA who knew!
Wait a second… If Asia is over there…
The Earth must be ROUND!!! I’ve just made the discovery of the century!
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Rob A. Says:
September 5th, 2008 at 4:02 pm
LAMO, I’m glad I got out at the top
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mohican Says:
September 5th, 2008 at 4:32 pm
LMAO – you guys are funny.
I’m glad we can all have fun as the market collapses around us.
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Dave Says:
September 5th, 2008 at 5:25 pm
I’m glad I bought at the bottom.
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Anonymous Says:
September 5th, 2008 at 5:30 pm
As for the size and cost of the gestating Three Harbour Green, “That depends on what we get from buyers at Number Two,” Wong said.
“Very few Asian are buying here now,” he said. “And those that do are already local residents.”
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ted Says:
September 5th, 2008 at 5:30 pm
Yes Dave, its always better to buy while prices are low instead of when they are high, but how long do you expect this market to be falling for? They’re more than two years down in the US and still falling, It looks like better deals will be popping up there before they pop up here.
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bearette Says:
September 5th, 2008 at 6:58 pm
So when should bears make the leap? When’s a likely bottom? Any guesses? Is 2 years from now, say, Sept. 2010 too late to jump in at the best price for SFH? Could we be close to bottom then? Or could we be on the upswing already? Just trying to get my plan in order … powder is already bone dry…
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blueskies Says:
September 5th, 2008 at 7:16 pm
r could we be on the upswing already?
no not yet if you graph the numbers will the bottom be “V” shaped or “L” shaped?
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JB Says:
September 5th, 2008 at 7:31 pm
Fannie Mae, Freddie Mac to be Put Under Federal Control, Sources Say
http://www.washingtonpost.com/.....03351.html
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patriotz Says:
September 5th, 2008 at 7:42 pm
the land shortage coupled with population growth is a real issue here. no one should be puzzled why vancouver real estate prices are the highest in north america
Well OK, what I’m puzzled about is that Vancouver rents are the same as Toronto and way, way lower than places like San Francisco and New York. Shouldn’t the supply/demand issues affect rents too? Oh and remember all advertised rents are uncontrolled.
When’s a likely bottom? Any guesses?
Just as Vancouver RE lagged the US on the way down, it will lag the US on the way up. The BC economy is far too tied to the the US housing market.
No way are we going to see a bottom before 2011.
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patriotz Says:
September 5th, 2008 at 7:48 pm
From #105:
“The value of the company’s common stock would be diluted but not wiped out while the holdings of other securities, including company debt and preferred shares, would be protected by the government.”
This is gift from US taxpayers to shareholders and debtholders of Fannie/Freddie and is probably the biggest government handout in history.
Given the foreign detbholdings (particularly China), it’s probably one of the biggest foreign aid programs as well.
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The Van Man Says:
September 5th, 2008 at 8:58 pm
Home prices will not fall below current construction costs need not look any further than Kitsault, BC, the town that Phelps Dodge built for around 50 million dollars in 1980 (250 million in today’s dollars) with new homes, apartment buildings and the works only to be abandoned after the 1982 recession and the collapse of the molybenum prices.
http://www.kitsault.com/history.html
Maybe the respondents here have a rather poor memory of the incident during the 1980s, OR many of the respondents here are young and arrogant never experienced and lived through a nasty recession type of crowd..
You guys will get your chance, yes you will get your chance.. Only the experience will teach you how to be humble and be afraid, very afraid..
Speaking of the town itself, it was bought by an India born investor for 5.7 million dollars, not even a fraction of what it’s worth in today’s dollars. Nice place though if you look at the gallery — the place is still in the 1980’s time capsule!!
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John Says:
September 5th, 2008 at 9:12 pm
Thankfully Vancouver is the best place on earth and is not dependent on any one industry. Add to this the large numbers of rich asian investors and you get a booming housing market which will last forever. Asia has an unending supply of rich immigrants who want to come to the best place on earth.
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The Van Man Says:
September 5th, 2008 at 9:12 pm
Dave said:
What do I think of it? Prices have dropped more quickly than I would have anticipated. I would have expected a greater lag time between inventory (measured as MOI) and price changes.
Pastrick just stated that we are about halfway through this correction and that things should stabalize sometime in 2009, within 6 to 9 months from now.
Me said,
Explain to me why things will stabilize in 2009? If prices continue to stabilize, then you are telling me that Vancouver and Canada as a hole is not suffering from the ill-effects of an incoming global recession. And that we are immune.
Let’s see. We are a resource based country. In a recession, people cut back on spending and infrastructure building.
So, Dave is telling us that there really is no recession in the United States, Britain and the rest of world and the 50% hair cut in the Chinese stock market is just a bloody lie, generated by computer graphics.
Good, I like this idea. No recession anywhere..
I hope you’re not smoking pot!
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The Van Man Says:
September 5th, 2008 at 9:14 pm
John said:
Thankfully Vancouver is the best place on earth and is not dependent on any one industry. Add to this the large numbers of rich asian investors and you get a booming housing market which will last forever. Asia has an unending supply of rich immigrants who want to come to the best place on earth.
Me said:
Curious mind wants to know, what are the other industries that Vancouver have? You seemed to have all the info — I do to. Let’s compare notes shall we..
You first..
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Thums up2 Says:
September 5th, 2008 at 9:15 pm
Patriotz says
“The renter is better off than the owner simply because they are paying less for the same shelter.”
That’s wrong at one time tenents are ok in the next run they must increase their income according to market condition otherwise they must down grade them self and if they are unable to find affordable place the must apply for susdized housing or else they must leave the city or go on the street.
Moral to the story if you don’t know economy or real estate don’t make fool of your self or some one else.
Did you call him clown?hello?
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The Van Man Says:
September 5th, 2008 at 9:20 pm
Stagnate said:
the land shortage coupled with population growth is a real issue here. no one should be puzzled why vancouver real estate prices are the highest in north america. nonetheless there is a soft science component to real estate which will dictate the depth of the correction. it is interesting to see the bulls and bears out there in a frantic spin battle for the soft science component.
Me said:
Read my Kitsault report.. It’s not soft science, it’s hard science.. Remember that this town was built specifically for people who are used to the amenities of the south, available in the harsh environment of the North. It folded in the midst of the 80’s recession. When this population moved out of this town and re-populate other towns, did it bring the extreme depressed house prices back to pre-bubble heights?!?
Nope! Did it bring hope during the nasty 80’s recession at that time? Nope. Sounds like you’re way too young to remember this. But that’s ok, you’ll have your chance and you’re going to know what it feels like to be in a depressed housing market..
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John Says:
September 5th, 2008 at 9:26 pm
Vancouver’s industries in order of importance
Political activism
1) Asian investing
2) Paper manufacturing
3) Nail gun repairs / forklift operations
4) Tourism
5) Hospitality
6) Beer making
7) Video games
9) Construction
10) Skying
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Anonymous Says:
September 5th, 2008 at 9:28 pm
Vanman says
“you are telling me that Vancouver and Canada as a hole is not suffering from the ill-effects of an incoming global recession. And that we are immune.”
Vanman if you did not read today’s headlines you should have read comment #14 NO DOWNTURN IN DECADES TO COME WOW!THANKS 2 IMUNE SYSTEM-IT WORKS.*Job market rebounds as economy adds 15,200 workers in August.
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greed Says:
September 5th, 2008 at 9:38 pm
John, where does growing dope and gangsterism fit into your category. Bud is BC’s biggest export.
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freako Says:
September 5th, 2008 at 10:21 pm
In other words, prices can’t go below what it costs to build. Does that make sense to any of you?
It seems to me the cost of land, construction materials and labour will go down as the RE market softens.
That is right. Think about it. Why does a new condo in Portland cost a third of a new condo here? Please don’t tell me that labour and materials is three times higher here. The argument is flawed on so many levels. The adjustment will happen, as you suggest, in LAND. Second, this is not cost plus. Building costs are NOT directly linked to market prices. What rising costs may do is discourage new construction, which will reduce supply, but given the size disparity between new construction and existing stock, it WILL NOT provide some type of price floor.
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stagnate Says:
September 5th, 2008 at 10:48 pm
vanman, if the population here starts to decrease for any reason that will put significant downward pressure on real estate values (rents too). for now i can’t see population decrease happening, the economy here is weakening, but appears to be weakening accross canada and similar competing jurisdictions. i don’t understand the rest of your post 113 but thanks for your input.
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John Says:
September 5th, 2008 at 10:57 pm
There’s no proof weed is exported from BC to anywhere.
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patriotz Says:
September 5th, 2008 at 11:18 pm
i can’t see population decrease happening, the economy here is weakening, but appears to be weakening accross canada and similar competing jurisdictions.
A decrease is unlikely, but the historical pattern is that during recessions BC’s population growth slows to virtually zero. The main reason is that BC has among the most transient populations of any province (Alberta is like this too) and during hard times people stop coming and many from elsewhere go home. Better to be with your family and friends when times are tough – especially when you can live in their basement.
Given the disproportionate size of BC’s RE sector today, a halt in population growth would be even more damaging for employment and RE prices than in past recessions.
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stagnate Says:
September 5th, 2008 at 11:36 pm
i think we’re going to see a lot of eastern canadians go home, but a higher percentage of the immigrant population coming. not sure how the numbers will shake out on it.
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Anonymous Says:
September 5th, 2008 at 11:46 pm
So stagnate and patriotz are not moving and those who are moving they are unknown wow just wow just be on the blog you will be stone with inflation,stagflation,economy downturn,job loss and blah blah do we have doctor for these patients let me call 911 hey most of chaps please get ready for ride.
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Re-diculous Says:
September 6th, 2008 at 12:12 am
This is so good it has to be seen again:
“Real Estate Predictions for 2007″ done in 2006. I laugh at the smugness of the two Real Estate champions….I wonder if they feel stupid now?
http://www.youtube.com/watch?v.....re=related
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patriotz Says:
September 6th, 2008 at 12:49 am
i think we’re going to see a lot of eastern canadians go home, but a higher percentage of the immigrant population coming
This has not been the case in the past, and I don’t see why it would be the case in the future. In fact immigration drops off Canada-wide during recessions, and it’s not hard to understand why – people are going to be more reluctant to move if they’re going to have trouble finding work.
I also think the recession will hit BC harder than any other province which I think will lead to a decrease in BC’s relative intake. This was certainly the case in the mid-80’s when BC was hit much harder than Ontario.
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The Van Man Says:
September 6th, 2008 at 6:32 am
Anonymous,
The “No Downturn In Decades To Come” mantra seemed to be sung by a lot of people when boom times were close to busting. Remember Harry Dent, the author of the DOW the roaring 2000s and how he predicts no downturn in decades to come for the internet boom of the century. That wasn’t that long ago — say about 10 years ago!! In the 1990s, Mr.Dent forecasted the DOW to reach up to 35,000 to 40,000 by the year 2000 and beyond (we are now at 13,000). Recently, he forecasted the DOW to be 20,000 in 2009. The guy never gives up — if you are wrong, you keep forecasting your numbers lower to make it look like you are right all along.
What Mr. Dent had demonstrated is the difference between extreme optimism (No Downturn For Decades mantra) and extreme pessimism. Extreme optimism is always followed by extreme pessimism. That’s simply human nature. Just look at our Boxing day sale with hoards of people lining up, each wanting and clamoring on top of each other trying to get bargains, with the believe there are bargains out there. But then, you look at the returns line the next few days and you see people with buyer’s remorse, returning items they don’t need, because they bought them based solely on emotion. This cycle exists for centuries.
I read somewhere that there were a larger proportionate of millionaires created after the great depression, or following any major recession. Our last nasty recession in the 1980s had brought some people’s lives for the better. It certainly did for us with our Kelowna investment. In a recession or depression, people with cash has a better position in terms of bargaining power compared to those who borrowed heavily in the boom times. In a recession, banks will only loan money to people with a good credit history — those for borrowed heavily earlier in the boom times would probably had their credit history shot coming into the next recession. And recessions of any asset class market typically last for a very long time. During the late 60s to early 80s, the stock market virtually ran flat and the real estate market of the early 80s after the crash and during the recession period was flat and gloomy. The best times to buy any asset class is when people shows “EXTREME PESSIMISM” . When I see articles depicting that our economy will be in the doldrums for years, RE will stay low for years, then people with cash will begin to consider deploying their cash reserve to buy. People with no cash and no prospect of borrowing money from the bank has no way to buy cheap property during a downturn.
This is the same deal happening with major US corporations and the Nasdaq. They are down, but nobody’s buying lots to prop them up as high as the late 1990s.
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The Van Man Says:
September 6th, 2008 at 6:58 am
Stagnate,
Basically what I’ve illustrated on post #113 was that, population grows on top of existing population because of the prospect of jobs. But population growth alone is not a harbinger of inflated asset prices to come either.
If you look at the Great Depression of the 1930s, there were a lot of transient migrants moving from states to states prospecting for work, but it did nothing to the local real estate market. Most of these migrant workers had lost all their savings through either a RE or stock market crash, so they are in no position to buy properties even if prices are so cheap.
BC is no different. Our economy is booming with construction related work that entices people elsewhere to come here. But are these affluent migrants who bring with them a load of cash? Not so as some studies had found. In fact, studies upon studies had shown that new migrants bring less and less of their capital savings, unlike the immigrants of the earlier decades.
But what population growth brings is the potential for banks to loan money to new clients. What happens today is that, people does not need cash to buy a home. In fact, when we went out to buy our new van off the car lot many years ago with cash, apparently this is a foreign concept to the salesman. He thought we were joking.
We were not. In fact, he said he had rarely seen someone buy a $50,000 car with cash in Vancouver — though his deduction of this logical could be flawed. Nonetheless, it is very uncommon for people to have that much cash around to buy a car off the lot. What’s the most common outcome for most people is they buy the car with little or no down payment and then finance the rest through credit.
So what do you need?!? You need people, lots of people to do this. Increased population growth is a harbinger of easy credit like car dealerships, because apparently the days of people buying a car in full with cash is over.
What controls the individual power to get credit? It’s is through the credit agency like Equifax or Transunion. They keep detailed records of you, score you and analyze you.
You need a new population of people with good credit to buy things. That what population growth means to us these days — new lines of credit to tap into. Suckers to fool to get into mortgages and car loans that they pay beyond their means.
Make no mistakes. A recession does not depress debt nor deflate debt. Even if asset prices fall, debt don’t. If the population that borrowed this debt can’t pay it back, then the credit history of that population will be toast. It will take years for them to rebuild the history again, so even if you have a huge population of distressed people moving into another community with better job prospects, you are not going to save the other community’s asset prices either. That’s my post #113 and that is happening in the US right now. People do move often in the states for jobs, but you can’t raise home prices if these people who are moving have shot to hell credit history..
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Vansanity Says:
September 6th, 2008 at 7:42 am
Lol – John, what the hell is skying? Was that skiing? I was hoping you made up an industry of staring up at the sky. Which reminds me, you forgot a one… “panhandling/squeegee-ing” one of BC’s most lucrative industries!
You’re welcome.
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Strataman Says:
September 6th, 2008 at 7:47 am
http://www.theonion.com/content/atlas/
Great data on why Canada is different, John will like this!
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SurreyJoe Says:
September 6th, 2008 at 8:06 am
Interesting article in the Sun this morning about Shangri-La. Says that occupancy of homes scheduled to begin in the fall with hotel scheduled to officially open in January 2009. I thought schedule was that hotel was to open first and condo’s would be completed about a year later. Can anyone clarify schedule for completion?
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Global Landlord Says:
September 6th, 2008 at 9:19 am
Extraordinary.
I had heard about this website from some colleagues here in the London. I was highly sceptical when they described the level of ill will towards, and mockery of, home buyers on this board and had to see for myself.
Markets rise and fall. Some people buy homes in which they intend to live for many years and could care less about short or long term value trending. Some people buy homes to speculate and lose or win. This is no different to when people buy shares, bonds, precious metals or art. Some people get lucky in markets and some do not.
So why the extraordinary degree of Schadenfreude apparent on this website? I am unaware of this degree of bitterness and vitriol towards investors in any other asset class in any other market. I would be very interested to know what underpins this sentiment in Vancouver?
Best wishes
GL
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The Bulls are so trite Says:
September 6th, 2008 at 9:31 am
Global Landlord:
It is extraordary that you should be so concerned about the degree of Schadenfreude on this blog.
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patriotz Says:
September 6th, 2008 at 9:38 am
So why the extraordinary degree of Schadenfreude apparent on this website?
Because of the Schadenfreude dished out in the other direction for the past half dozen years – from the owners against the renters.
What goes round comes round.
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patriotz Says:
September 6th, 2008 at 9:40 am
Oh, forgot to add:
If you think this sentiment is unique to Vancouver, you haven’t been looking very hard.
Try this for a start:
http://thehousingbubbleblog.com/index.html
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Global Landlord Says:
September 6th, 2008 at 9:40 am
Bulls are so trite:
One sees what you have done there. Brilliant.
Perhaps some of your more enlightened chums might care to answer my query more substantively.
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Global Landlord Says:
September 6th, 2008 at 9:45 am
Patriotz:
Understood. Similar issues here in London but not anything like the glee when markets turn.
And I have not been, nor do I intend to, seek similar examples of such attitudes. Just curious about the nature of the beast in Vancouver.
Thanks.
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blueskies Says:
September 6th, 2008 at 9:59 am
GL:
2 points:
1. RE is the end all be all over here
2. If you have any questions see point #1
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Lager not Logger Says:
September 6th, 2008 at 10:04 am
GL- Vancouver has a history of ponzi scheme style asset bubbles and market crashes. We saw house values drop in half in the early eighties recession and our local stock market was notorious as the home of penny stock scams.
The difference between real estate bubbles and something like the tech bubble is that when people speculate on homes it affects local families directly. Compared to a city like London incomes in Vancouver are very low. Most people here live with a negative savings rate, so even a small fluctuation in house prices can drive some into bankruptcy.
Those that see prices as over-valued get frustrated when it seems so obvious comparing rental prices to home prices that its all speculative. There are a lot of people here that just want to buy a home to live in and sometimes express their dismay angrily when so-called experts say things like ‘nobody could see this correction coming’ when it should have been obvious to anyone with an understanding of 5th grade math.
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Bluesman Says:
September 6th, 2008 at 10:12 am
GL: So why the extraordinary degree of Schadenfreude apparent on this website?
Hello old chap: I’m sure that when you take some time to read through the blog the answer will come to you.
p.s. How many “investments” do you have in British Columbia, if you don’t mind my asking? And where would they be located? What was the purchase price and what is the current value, if I may be so bold? Do you have investments in London, too, and how are you faring with them?
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punface Says:
September 6th, 2008 at 10:51 am
GL – I’m from the UK and have seen London blogs expressing very similar sentiments to what you see here. Google away!
Also, I’ve never been very bitter, mostly because I feel confident my shrewd maneuvering through this bubble will have set me up for life.
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Patiently Waiting Says:
September 6th, 2008 at 11:52 am
GL is a troll. Similar sentiments exist everywhere a bubble exists. This is city and blog are not unique, and he knows it.
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Anonymous Says:
September 6th, 2008 at 11:54 am
Vanman,
seems like you like to see downturn and recession only that’s why you had skip from real estate to tech,dow,nasdaq and vanmansharemarket.
I have notice some student riding sky elevator in p.n.e. they were ok going up screaming while coming down but happy at the end of ride they were all fine and safe.
It’s about real estate here specially vancouver real estate next year vancouver out of gvrd aren’t you living in the best place i am proud to call you the best vanman on earth just drop your tech,nas,dow,catch the r.e.wagon right away.
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bdk Says:
September 6th, 2008 at 1:15 pm
Satv/Krissh/thums/browntown is that the best you can do?
Even when you try you’re still an illiterate fool and you still haven’t brought a single relevant point except incoherent rambling about how affordability, calculators and supply and demand don’t matter because you think it’ll continue upwards forever.
Your points are about as valid as the crazy junkies that hang out in front of TV towers.. actually you’ll make a lot of friends once TV towers opens because that place is homeless junkie central!
“the best time to buy is when the market peaks and I really believe it” Thumsup
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Recession Optional Says:
September 6th, 2008 at 2:00 pm
Real estate crashes do not necessarily require a recession.
There was no huge rise in unemployment, or interest rate hikes when the bubble burst in the US.
There was no economic shock to Alberta when the slide started.
And we are in the early stage of a massive crash in Vancouver, without high unemployment.
When you get a bubble bursting just as the economy is getting sluggish- well that’s when the 50% price drop in prices may be just the BEAR minimum.
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mold city Says:
September 6th, 2008 at 2:02 pm
There’s no proof weed is exported from BC to anywhere.
judging by the price some have been willing to pay for tiny condos all indications are the majority of it is smoked right here.
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Patiently Waiting Says:
September 6th, 2008 at 2:11 pm
The bottom calling begins:
Helmut Pastrick of Central 1 Credit Union (formerly Credit Union Central of B.C.) says home prices are down roughly four to 5% from their peak earlier this year.
“I’m saying a 10% decline from top to bottom, from peak to trough,” he said. “It could be more, I’m not ruling that out at this point.”
Pastrick said he therefore expects a similar drop of at least 5% on top of what has occurred so far before prices stabilize some time in 2009.
“I think it will continue for another six months and potentially 12,” he said of the declines.
http://www.bclocalnews.com/tri.....89594.html
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The Van Man Says:
September 6th, 2008 at 2:31 pm
Anonymous said:
seems like you like to see downturn and recession only that’s why you had skip from real estate to tech,dow,nasdaq and vanmansharemarket.
I have notice some student riding sky elevator in p.n.e. they were ok going up screaming while coming down but happy at the end of ride they were all fine and safe.
It’s about real estate here specially vancouver real estate next year vancouver out of gvrd aren’t you living in the best place i am proud to call you the best vanman on earth just drop your tech,nas,dow,catch the r.e.wagon right away.
I say,
It’s interesting when people brings up the word “Schadenfreude”.
Let me get one thing straight.. We do not enjoy seeing other people suffer from their misfortunes or buying distressed properties from them either. In contrast, we like helping people through UGM (United Gospel Mission) using our modest profits by putting kids through summer camp. We believe that giving them the confidence and the tools necessary to survive in the society is better than giving money straight.
I was broke once, sold most of my cherished possessions to others at discount prices — I used to call them vultures. Now, when we buy distressed shares or properties from financially challenged people, we are called vultures.
We are all adults ladies and gentlemen! We all make choices, whether they are right or wrong, it is your choice and you need to accept it. By accepting the choice in defeat is the only way to move forward. Recessions are in a way a method of cleansing the weak, so the strong will survive. Do you think for a moment that Warren Buffett is a nice guy?
Yes he is in a sense that he will buy out businesses that are profitable, but selling at depressed prices. He buys when it’s cheap. Do you think he’s going to be nice to shareholders that bought at the top and needs to be compensated in full? Our government, however, subsidizes weak businesses to artificially keep workers employed. Japan does this often and look where it brought them. It is this artificiality of the economic cycle (the boom cycle) that will eventually collapse.
It is not too uncommon that a lot of people had made money during a recession or a depression. History will bear this out, but we know we are not the only ones in BC. There are way many smarter investors out there, probably lurking here to gauge the sentiments of the current RE market.
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Greely Says:
September 6th, 2008 at 4:09 pm
Alot of people make light of John’s responses, but he makes alot of good points. There truly is an endless supply of folks from Asia AND the rest of the world who have an abundance of money to spend on our ,comparatively, cheap RE. They fall in love with our city at first sight and can’t wait to bugee jump at the Capilano river. I mean last week, I was going to shell out a few hundred bucks on a fishing guide to take me out and catch a salmon. On the way out to the river there was a guy selling them for $20 out of his truck! I saved hundreds!! Where else could something so lucky happen. If that ain’t the best place on earth, I dunno what is.
Think about it, once global warming kicks into 2nd gear, rising water levels will make most of the land in the Fraser flood plain virtually inhabitable… making even LESS land to live on in the B.P.O.E. and skyrocketing prices along the way.
I do have an issue with John’s industry of Vancouver list. Political activism is mostly done on a volunteer basis, placing it far behind ecstasy manufacturing on the list.
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Macronomics Says:
September 6th, 2008 at 4:34 pm
Global Landlord,
That’s like the pot calling the kettle black.
UK’s housing bust has just started and will get pretty nasty over the next few years.
Have you seen all the blogs and websites with so-called ill-will towards homebuyers?
Don’t paint us with one brush.
99% of the folks here may have ill will towards the speculators and flippers.
We have nothing against J6P who got swept up in the storm, especially in the past 2 years or so.
I, for one, hope the deflation happens gradually.
A lot of lives and families will be crushed RE continues at it’s current pace (4.3% in 3 months!).
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Macronomics Says:
September 6th, 2008 at 4:36 pm
Correction for Post #150
I meant negative 4.3% in 3 months.
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Dosh Says:
September 6th, 2008 at 5:22 pm
#
12
d_oush Says:
November 29th, 2006 at 10:16 am
Why does anyone even care what is happening in the US market? They are a different country, We are not them.
Its as simple as that.
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Krrrrrriiiisssshhhhhh Says:
September 6th, 2008 at 5:24 pm
Price up=development cost(nevergoesdown)
Sales=price up
price down=no sales
Price up =lots of seller
no buyer
Price down=lots of buyer
No Seller
people sell to make profit if there is no profit who will sell
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Krrrrrriiiisssshhhhhh Says:
September 6th, 2008 at 5:37 pm
don’t be misguided about vancouver your expectations were never been recieved since when ever to what ever, nor that is going to be ever after.hey krrish can I have glass of water?thanx.
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Anonymous Says:
September 6th, 2008 at 6:00 pm
“We believe that giving them the confidence and the tools necessary to survive in the society is better than giving money straight”.
Vanman,Shelter is one of the necessary tool as well now if some one jump in to say we can rent it then please jump to comment #114.
“in the next run they must increase their income according to market condition otherwise they must down grade them self and if they are unable to find affordable place they must apply for subsdised housing else they must leave the city or go on the street.”#114
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blueskies Says:
September 6th, 2008 at 6:13 pm
There truly is an endless supply of folks from Asia AND the rest of the world
according to the Landcor data out of country buyers constitute 2.7% of all buyers…. this includes rich Haitians and wealthy Bulgarians ….grasping at straws methinks
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Thums up2 Says:
September 6th, 2008 at 6:21 pm
In response to some key point by Recession Optional
Q1.
“Real estate crashes do not necessarily require a recession.There was no huge rise in unemployment, or interest rate hikes when the bubble burst in the US.”
A1.
That’s right in usa but there was alternate reasons for the crash as threat and threat of natural disaster got connected with subprime
Q2.
“There was no economic shock to Alberta when the slide started.”
A2.
That’s right but there are other reason that can make you lough that was extreme accelration of 89% in 2006,59% in 2007 while accelration in vancouver is only 10-15% that’s supported by the real math.If i was one of the buyers that time in alberta i should have proudly discount the next buyer atleast 59% and how much slash are you talking about?did you say 10% please smile you are on vancouver condo.
Q3.
“And we are in the early stage of a massive crash in Vancouver, without high unemployment.”
A3.
You can grasp some point from answer 1 and 2 that would be answer 3.
Q4.
“When you get a bubble bursting just as the economy is getting sluggish- well that’s when the 50% price drop in prices may be just the BEAR minimum.”
A4.
I wish you were employeed and resident of usa.
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bdk Says:
September 6th, 2008 at 6:50 pm
Thums/Krissh/Browntown etc. STFU!
http://vancouvercondo.info/for.....3&t=48
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Michael Randallbard Says:
September 6th, 2008 at 7:11 pm
Bob Rennie
http://www.youtube.com/watch?v=dbI5K0AzNHI
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Michael Randallbard Says:
September 6th, 2008 at 7:15 pm
Bill Good, Helmutt Pastrick and Cameron Muir
http://www.youtube.com/watch?v.....re=related
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jesse Says:
September 6th, 2008 at 7:30 pm
Schadenfreude? I call it salivating before a really good feast. Don’t anyone say we’re a cruel society. We have bankruptcy laws to rescue the destitute from a lifetime of servitude. Hardly cruel. Consider bears the generous few that enable these poor souls to move on with their lives.
If you think buying assets at firesale prices is cruel, by all means, lead by example and pay book value for them — there are a few condos on sale right now at book value. Wait any longer and the poor owner will be in the red. Lead us down the glorious path of righteousness, good shepherd.
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squidly77 Says:
September 6th, 2008 at 7:52 pm
calgary herald sept 06-08
“According to Battistella, active listings on the MLS (multiple listing service) of concrete buildings built in the past five years is around 80 per cent, and the standing inventory of finished, but unsold, units is something like 60 per cent.”
oh boy its started
the great calgary condo crash has begun
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squidly77 Says:
September 6th, 2008 at 7:55 pm
Vancouver your next..
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squidly77 Says:
September 6th, 2008 at 8:09 pm
calgary high rise condos have no lights on at night
because calgary has so many stupid and uneducated realtors and stupid spec buyers the city has done this
posted signs to stupid people to stay away as we have our share already
please carry on to regina..they are running out of land there..its gonna be the next new york city
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jesse Says:
September 6th, 2008 at 8:18 pm
Do we still call it Schadenfreude if I say the Lord’s prayer before signing the purchase agreement at 40% below today’s asking prices?
Dear Lord, thank you for this meal I am about to receive…
Dude’s gotta eat, after all.
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Top 1% of Vancouver Realtors Says:
September 6th, 2008 at 9:34 pm
When virtually all of Andrew Hasman’s Actives are labeled as either NEW LISTING or NEW PRICE, that tells you something:
http://www.andrewhasman.com/ActiveListings.php
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Vancouvers #1 Realtor Says:
September 6th, 2008 at 9:41 pm
When 36.5% of Malcolm Hasman’s listings are reduced, that tells you something:
http://www.malcolmhasman.com/index2.html
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Brittanny Says:
September 6th, 2008 at 9:42 pm
Thums up2 ———- Your an idiot. Are you blogging from a mental institution? Learn how to speak resonable English and then come back to this blog you friggin moron!
Brittanny
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patriotz Says:
September 6th, 2008 at 9:43 pm
A lot of lives and families will be crushed RE continues at it’s current pace (4.3% in 3 months!).
Who, apart from people directly employed in RE (realtors, construction) and speculators who are betting their futures on RE? RE has always been a boom and bust industry and these people have to take the bad times along with the good.
If you’re talking about people who bought at inflated prices, either they can afford the price they paid or they can’t. If they can’t, it’s they’re own fault. If they can, they thought the property was worth what they paid at the time they bought, so what difference should it make how much someone is willing to pay them for it in the future (i.e. the market price)? I don’t care how much someone is willing to pay me for my car.
You’re also talking as though the upcoming RE bust is some act of God like an earthquake, when of course it’s a direct consequence of the inflated prices, which are due solely to buyers being willing to pay them. IOW the bust is the fault of the buyers.
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Anonymous Says:
September 6th, 2008 at 9:46 pm
you friggin moron Brittanny
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Krissh Says:
September 6th, 2008 at 9:56 pm
Picked these up from Squidly’s post at the Alberta housing blog, http://albertabubble.blogspot.com/:
Edmonton Real prices down more than 15% and Calgary’s Nominal prices down more than a few percent:
http://cuer.sauder.ubc.ca/cma/.....algary.pdf
http://cuer.sauder.ubc.ca/cma/.....monton.pdf
So there, Brittany!
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Brittanny Says:
September 6th, 2008 at 10:08 pm
Patriotz——— Nice, refreshing, intelligent common sense comment.
Thums up2 ——- Dimwit ala maximum
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squidly77 Says:
September 6th, 2008 at 10:12 pm
HELP HELP HELP..I am outta cash
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squidly77 Says:
September 6th, 2008 at 10:23 pm
dose anyone growing up aspire to be a realtor
nope..they are all failed individuals that can do nothing else.. basically unemployable losers..watch out mcdonalds employees they will gunnin for your jobs soon
i wouldnt trust them in my home..do you ?
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Drachen Says:
September 6th, 2008 at 10:40 pm
I haven’t been here all day, just thought I’d rewind to earlier and point out that Global Landlord is a troll.
Nobody in England actually throws that many clichéd “englishisms” into such a short space. Whoever wrote that has been watching too many Grey Pupon commercials.
If you actually wanted an answer GL, it’s because the housing bubble negatively impacts our lives. Most of us here would like to buy but cannot afford to lose a half million dollars or so to depreciation and we’re sick and tired of waiting for affordable housing.
It is not however the only investment that causes this kind of anger though, market speculation in food crops has been partly to blame for the food crisis and rioting in places like Haiti (you won’t see us throwing a Molatov Cocktail through Rennie’s windows any time soon as much as we’d like to). Energy speculation nearly destroyed California’s economy and is behind the spike in Oil prices, both of which caused much anger (and would cause a lot more anger if there was more awareness, but it’s easier to hide than housing I suppose)…
Last of all, the Schadenfreude you mention belongs to the speculators. When the market falls it is good for most of the people, bubble markets will only ever benefit a small handful of people. We have nothing to be ashamed of, desiring circumstances which benefit the many over the few.
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islander Says:
September 6th, 2008 at 11:32 pm
Squiggly and bdk and patriotz: you’re economic illiterates at best and mentally ill at worst.
You hate realtors, who nobody is forced to use; a fact you fail to acknowledge because your hatred gives meaning to your pathetic lives.
You hate developers, without whom we wouldn’t have homes; or do you three think houses just arise out of primordial muck, to be anointed by city planners?
You hate construction workers, without home your parents’ rat-infested basement would not get built in the first place, much less repaired or renovated.
You have a pathological hatred of a group of people. Just as an exercise, replace “realtors,” “developers,” or “construction workers,” with “Irishmen,” “women,” or “handicapped people,” you get the idea.
You’re sick.
If you think for a minute that a collapsing real estate/construction/renovation sector is anything but a disaster for the wider economy – and your meager standard of living – you’re not very smart, either.
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patriotz Says:
September 6th, 2008 at 11:59 pm
Flip not selling islander?
A collapsing RE sector is exactly what BC needs. This province needs to get back to a positive savings rate and an economy based on tradable goods and services, not a debt-based Ponzi scheme.
So do the US, UK, Ireland, Spain, etc, need I add.
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Matt Says:
September 7th, 2008 at 12:06 am
Global Landlord,
I’ve wondered the same thing on this blog and received an equivalent amount of emnity in responses. Lately though it seems that the posts have gotten less arrogant from the bears as I think a few of them are beginning to clue in to the reality that economics does not discriminate by a buyer’s personal buying strategy. The conceit of Vancouverites, bull and bear is about to face a new global economic reality that I daresay will knock them down a few notches on the bragging pole.
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patriotz Says:
September 7th, 2008 at 12:22 am
the reality that economics does not discriminate by a buyer’s personal buying strategy
Oh it doesn’t does it? You mean I’d be in the same position today if I’d put all my money in Nortel shares in 2000 versus putting it in, say, Potash Corporation?
What planet are you from?
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betamax Says:
September 7th, 2008 at 1:31 am
Squiggly and bdk and patriotz: you’re economic illiterates at best and mentally ill at worst.
Gee, that sounds kinda…hateful.
You hate realtors
You say that like it’s a bad thing.
You hate developers, without whom we wouldn’t have homes; or do you three think houses just arise out of primordial muck
True. Before developers, people were forced to live in muck. Dry-cleaning bills were horrendous.
You hate construction workers
No, I once was one, but I could start to hate them if you think I really should…
You have a pathological hatred of a group of people.
Don’t hate the haters. They’re victims too.
Just as an exercise, replace “realtors,” “developers,” or “construction workers,” with “Irishmen,” “women,” or “handicapped people,” you get the idea.
LOL. Really LOL. I’m still chuckling after reading it again.
And I already disliked Irishmen, because I tried that Irish Spring soap and it dried out my skin.
You’re sick.
Doc, your bedside manner needs work.
If you think for a minute that a collapsing real estate/construction/renovation sector is anything but a disaster for the wider economy – and your meager standard of living – you’re not very smart, either.
Actually, my job — unlike your own in the RE industry — is recession proof. Bring on the apocalypse, I want to buy a bunch of second-hand trucks, Harleys, and plasmas on the cheap.
LOL. All the trolls have become moralists. Too funny.
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Dapo Says:
September 7th, 2008 at 4:38 am
Islander,
Get hypocritical much? Nice hate filled rant about, er, hate filled rants. Give your head a shake, man. And as has already been stated, a collapsing real estate sector is exactly what this country/economy needs. Relax and welcome the real estate enema you are about to receive. It will all be better in the end. So to speak.
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jesse Says:
September 7th, 2008 at 6:59 am
“The conceit of Vancouverites, bull and bear is about to face a new global economic reality”
Why can’t you be magnanimous in defeat? Most people will be fine despite the new global economic reality. My bet is a greater percentage of bears will be fine compared to bulls so my chances, though not 100%, are better in the bear camp. Beyond that, a handful of bears will be more than fine to the point of it almost being obscene. Hey, you never know.
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How to foreclose in U.S. Says:
September 7th, 2008 at 7:15 am
http://www.mortgagereliefformula.com/recourse/
Is this the new start-up industry coming to a neighbourhood near you soon kooky canucks?
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SurreyJoe Says:
September 7th, 2008 at 8:51 am
Interesting article in local paper talking about Helmut Pastrick’s market forecast. He now says market could fall another 5% for a market correction of 10% total.
Here’s an excerpt from the article:
“He says the signs of an impending drop were present a year ago when realtors first began to report declining sales.
‘That always raises a red flag that housing prices will be responding’ he said.
Going back even further, he added, sales began to plateau in 2005, an early signal the hot market would not keep climbing indefinitely.”
So Pastrick has been bearish all along! Who knew?
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JR Says:
September 7th, 2008 at 9:08 am
Re: Post #183
And so on the part of the usual economist suspects, the rearview mirror analysis begins, while pedalling backwards. If they’d restricted themselves to post mortems, which they’re far better at, and engaged in less forward- looking cheerleading, a host of lemmings could have avoided their imminent tumble over the precipice.
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jesse Says:
September 7th, 2008 at 9:33 am
“So Pastrick has been bearish all along! Who knew?”
I actually think Pastrick is starting to get it. His rearview mirror is basically an admission that he f’ed up and he’s looking for reasons why. You can think of it as hypocrisy but another alternative is that he merely drank the wrong Kool Aid and kept poor company. I still like the guy — don’t know why, really — but have doubts he will ever really figure it out.
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jesse Says:
September 7th, 2008 at 9:49 am
Link to SurreyJoe’s article
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Anonymous Says:
September 7th, 2008 at 9:55 am
“but have doubts he will ever really figure it out.”
That’s right i don’t think anybody else know better economy and real estate other than Muir and Somerville pastric is just reading a graph created by Sommerville,pastrics occupation also give him rank 3-3=0
Sommerville and Muir hold reliable positions “those who are waiting for drop will be disappointed”-Cameron Muir.
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ReductiMat Says:
September 7th, 2008 at 10:09 am
Matt, you stated, “…and received an equivalent amount of emnity in responses.”
Matt, there are some ridiculous, over the top bullish posts on this blog too. I could equally state that for every one of my posts there’s an equivalent amount of bullish hubris. However, seeing as my position does well without any strawmen, I choose to ignore those and focus on messages with substance.
However, I’m sure we can both agree that it’s tougher to pontificate from up on high without straw.
One last point, though you seem to not want to believe it, there are people here who are neither bull nor bear.
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Anonymous Says:
September 7th, 2008 at 10:20 am
Reductimate you are wrong do you know why?
#152Dosh Says,153Krrrrrriiiisssshhhhhh Says:
154Krrrrrriiiisssshhhhhh Says: 171Krissh Says:
and lots more of them are posted by one and only idiot bear BDK.
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Anonymous Says:
September 7th, 2008 at 10:43 am
# ThumbsUp Says:
November 4th, 2007 at 8:17 am
BACK PACK FOR BEARS
Expect the average single-family home price to hit $900,000 in Greater Vancouver next year as new jobs and new people moving in keep the city a seller’s market,
Vancouver’s average home $900,000 in ‘08
#
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ThumbsUp Says:
November 4th, 2007 at 8:22 am
49
robs numbers Says:
November 4th, 2007 at 11:57 am
Expect a lot of comments from Satv. He is getting quite a shellacking on his blog.
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THANKS FOR THE STUPIDITY Says:
September 7th, 2008 at 10:48 am
this is what satv think why we are diffrent from others.
Most Dangerous “bubble”formation and avoiding tools
1. INTRESTS RATEs:people buy property by keeping in mind intrests rate,but when governments or banks hikes intrests rate to control inflation thats type of cheating with previous emotion,that scare all the buyers and investors,prices of property is not big deal because intrests rates help people to decide the size of monthly payments.
CANADA : its good for canada that we have already seen the bubble blast its easy to protect our country by monitoring our condition now and we will be able to keep strong hold.
2.HURRICANES:When people see their homes are being drowned into water,flooding or in natural disaster that spoil the intrests to keep stability in confidence,and does not make futuristic approch.
CANADA:we are not experiencing firm or predicted natural disaster as seen in USA every year or so.
3.TERRORISM:state of terrorism scare, unlikely hold people back’ from buying anything because nature of attack and place can not be predicted where,when,why,what.
CANADA:we have very less threat or not at all because of our governing attitudes and foreign policy.
4.DEMAND:that is easy to figure out from inventory if units are selling or piling up(some time inventory pile up if reward is higher to sell).
CANADA:we have firm future projection and there is no reason seen so far why not there won’t be demand in future.
5.OVER SUPPLY:when lots of projects are on tracks but none of them have a gap in completion dates,that congest the out flow,if their is gap in completion dates,unless the next project complete temp investors or flipers can bail them self out on timely manners.
CANADA:there are lots of projects and lots of them has been completed successfuly for example freesia almost resold with in 1 year after.completion dates are vary from each other and so far there is no heavy listing of assignments after sold status.
6.RATES OF UNEMPLOYMENT/RATES OF PAY:increase and decrease in both of them change the level of mental strength.
CANADA:unemployement rates are down to 33 year low and rates of pay are picking up.
7.ECONOMY:When both fedral and provincial governments have budget surplus that can convince investor from world-wide and their is always hope for future tax cut which benifit the public directly.those are a great sign of strong economy.
CANADA:our economy is hot
8.BEST LIVEABLE CITY STATUS:Crime rates,weather condition,security,safety,transportation,transit system,and street levels play vital roles in ranking city in numbers or make them best liveable city.
CANADA:we have 2 best liveable cities and other are also nice and beautiful just these 2cities are metro so they have edge over others
9.POPULATION:stable status or merging ahead stats if those are in down turn trend thats not good for the city or country.
CANADA:population is firm and increasing projection is at higher rate
10.SERVICES:thats the most important part type of services and timing to travel,dine out delivery pick up,etc,etc,help decide the future of places..
CANADA:we have 24hrs conceirges,resturants and bars till late night and home delivery services we have electrics buses and sky-trains,etc,etc.
11.LAND:structure of area where the boom,if the land structure is avialable that increase the hope for more houses can be built and lots of land is avialable in the city or the country in similar situation.
CANADA:we have boom only in 10 to 12 cities in Vancouver all projects are being built in parking lots.
12.SUBPRIME:Our governments,economists,and financial institues are aware of all this the are very confidents sp does most of people about it ,there are more than 25% subprime case in USA compare to population thats lots and lots.
CANADA:we have less then 5% and compare to population and booming cities those are very less,less,and less.
Canada is newly built country then the rest of world our street levels highways and airports have stuning future,transit system is absolutely faboulous.services are remarkable,living standard is best.Health care and whistler squamish is a plus point for Vancouver and Canada as well.
Australia also have a similar situation like canada so their pop did not hurt big time as usa or japan hit.
Happy Thanks Giving Weekend Every One.
Drachan,
Happy “Thanks”I mean thanks giving day……….
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STUPID I AM Says:
September 7th, 2008 at 10:56 am
September 17th, 2007 at 5:15 pm
How in the world will the provincial government’s surplus
(Which is just another name for over taxation) going to prevent a real estate crash?
SURPLUS:is a forever green song for bc government already invested in lots of projects,after 10 will be time to make profit.
going to prevent a real estate crash?
that is sickness for “poor”bears so I think government can not prevent that,for “bulls”their is no crash so government have no issue of that kind.
” Vancouver Re will always go up”
don’t you know that’s already up 125 per cent in last 5 year.and will be countinue……
here is a cut out list for condo market for METRO VANCOUVER
2007: $314,471 (+7.2%)
2008: $327,163 (+4.0%)
2009: $341,116 (+4.3%)
2010: $352,800 (+ 3.4%)
2011: $365,491 (+3.6%)
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ME BIGGEST DUMB Says:
September 7th, 2008 at 10:57 am
when you think you are right,you should have reverse those trend when more people are coming to vancouver.instead people should be leaving from Vancouver if our city is expensive,inflation is higher or counter tops are expensive,people should not be coming to Vancouver.easy that way
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Anonymous Says:
September 7th, 2008 at 11:02 am
foreclosures hit Manhatten:
http://www.nytimes.com/2008/09.....ref=slogin
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Time Says:
September 7th, 2008 at 11:07 am
#190 bdk said:
#48 ThumbsUp Says:Expect the average single-family home price to hit $900,000 in Greater Vancouver next year as new jobs and new people moving in keep the city a seller’s market,
Vancouver’s average home $900,000 in ‘08
BDK,
Thums up was right http://www.robchipman.net/blog.....eGraph.pdf
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Anonymous Says:
September 7th, 2008 at 11:11 am
# browntown Says:
June 27th, 2008 at 6:03 pm
hey confused, yeah confused alright, i think you confused self with dracken! you like rockets? must be draken transgendered! ok nutknobs if land supply go down and more people go to the land can price go down! well maybe but i want yes or no slappys!
#
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blueskies Says:
June 27th, 2008 at 6:20 pm
For the record, browntown cracks me up.
yes! an erudite satv with a scatological bias…
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Anonymous Says:
September 7th, 2008 at 11:11 am
Thums up2 Says:
June 27th, 2008 at 10:57 pm
WHERE IS SUPPLY?
In housing sector supplier is not a single largest producer of housing units- A developer for one location is a supplier of atleast 300 units,A home owner is a supplier of single unit with lots of choices to manage the small supply.If unit does not sell on current market prices there are lots of alternate to keep it going.
houses are not like tomatoes or milk canes,houses does not expire over hundred terms periods.
What brings down the prices in housing sector? those reasons are:Income,Affordability,Inflation,Interest rates,
employement conditions,Socio economy and political environment,nature,weather condition,floods,huricanes,
threats,way too much over supply.
From the Income Groups we need only 25,000 new people to take the prices trend ahead,if we don’t find 25,000 new people to carry over the trend-we already have 25,000 people who own those units.
There is not even a case that we don’t have many people to support further growth, we do have those higher income people- some who wishfully sitting out of market and some who intentionally sold their homes to buy again later.
We don’t have any other internal or external reason to help crash the market.some one will bait those sitting out idiots later on the blogs but so far to make vancouver housing crash we must get over supply of new homes not the resale homes.
“We don’t have over supply of new homes that’s why vancouver real estate does not carry bubble in it”.-mind it
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Anonymous Says:
September 7th, 2008 at 11:12 am
# browntown Says:
June 27th, 2008 at 11:09 pm
hey jesse nutslap! leave the 2% for your milk cowboy! land, milk and oil’s are more expensive than wage growth, even bdk’s! use government polution divedend cheque for downpayment at 1212 howe cowslapper!
#
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Brittanny Says:
June 27th, 2008 at 11:18 pm
Thums up2: You are a close minded fool with your head up your ass. I will laugh at your future misfortune, you deserve it.
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Anonymous Says:
September 7th, 2008 at 11:14 am
Court filings show that some of these apartment owners have well-paying jobs as lawyers, professors and bankers. Their Facebook pages feature them at parties with friends, and their LinkedIn bios list prestigious careers and educational credentials. And they live at tony addresses like the Wall Centre, The Residences on Georgia, Harbour Green and the Shaw Tower
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Anonymous Says:
September 7th, 2008 at 11:17 am
Dosh Says:
July 1st, 2008 at 6:59 pm
I don’t think we need to make a really big deal about this – listings are up and sales are down, but so what? Markets change all the time. Even IF we were to track the US market it’s been more than two year for the US markets to fall where they are today and thats not been that far. Do you really want to wait for more than two years to buy when there are so many good option on the market right now? Even IF prices were to fall you’d probably pay more on rent while you wait than you’d lose in a correction.
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Krish Says:
September 7th, 2008 at 11:28 am
“We all live in the moment here. When things are good, you don’t think that things could get bad.”
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betamax Says:
September 7th, 2008 at 12:14 pm
Message to bulls who have now become hypocritical moralists and apologists:
You were wrong, wrong, wrong, and you’re not nearly half as smart as you thought you were.
Hope you have some savings, because you’re going to need them. Buh-bye.
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Anonymous Says:
September 7th, 2008 at 12:38 pm
Betamax,
you did not produce any relevent point other than that your sister is realtor same as paul who published fake numbers.
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betamax Says:
September 7th, 2008 at 12:41 pm
Who cares, it’s over. Get it? Time to start looking for a new job. Tim Hortons and Walmart are always hiring.
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Patiently Waiting Says:
September 7th, 2008 at 12:42 pm
Fish has East Van MOI at 72 weeks.
http://fishre.blogspot.com/
Up until now, East Van has been strengthened by buyers who were priced out of West Side/North Shore. It had been a strong area, and now its the weakest. This is BIG.
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Patiently Waiting Says:
September 7th, 2008 at 12:54 pm
Bobcats squat in foreclosed Cali house.
http://www.latimes.com/news/lo.....6826.story
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bearette Says:
September 7th, 2008 at 12:56 pm
Yes, like Beramax says, it is well and truly over. I think it’s funny we’re still arguing about how over it is. There is no point. The bulls will fight it right up until their foreclosures. Lets ignore them, they are now utterly irrelevant.
It would be truly interesting, I think, and more educational, if us long-standing 2005, VHB-era bears started talking amongst ourselves about how best to take advantage of just how over it is. I think that would be way more constructive. And useful. Let’s just shut out the noise of bulls-in-denial and focus our energies on strategizing amongst ourselves — sharing advice and tips about how we are going to carve up the Vancouver real estate market carcass between us and to our best advantage.
Topics like how to low, low, ow-ball. How to buy without a realtor. How to spot the trough. What to look for in a home to make sure its built to last, not built by a boom-era crack-smoking teenager with a hammer. Which areas will fall least during a prolonged downturn after the initial 2008-2010 drop. Investment properties: a good investment at 50 per cent off 2008 prices? Etc.
Any takers?
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betamax Says:
September 7th, 2008 at 1:04 pm
Patiently – LOL. Great article and pic, thanks.
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betamax Says:
September 7th, 2008 at 1:15 pm
bearette — good points. These guys are standing on the deck of the Titanic and quibbling about how fast its sinking and if their fellow passengers are ‘nice’ enough. The “hater” post below, for example, hypocritically reeks of fear, loathing and flopsweat, and such types are better ignored.
I don’t have ready answers to your questions, but I’ll start thinking along those lines and doing some research, particularly as I expect to buy within 3 years.
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squidly77 Says:
September 7th, 2008 at 1:32 pm
#176 islander you have it backwards..its your dislike of anyone who dose not believe in your delusions that real estate always goes up.. you simply do not like posters that post bearish comments or opinions regarding real estate and any time your opinions are opposed you feel like you have been personally attacked..
try posting a pro canuck comment on a flames blog the day of a big game and see what you get thrown back at you
in other words know where you are
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ellery Says:
September 7th, 2008 at 1:45 pm
Matt,
“I’ve wondered the same thing on this blog and received an equivalent amount of emnity in responses.”
I’ve never seen anyone be rude to you. I have seen some very thoughtful and earnest replies to your comments (ie from jesse). Your own comment in this thread is deliberatlet provoking, so you’re hardly reaching across the fence yourself. I tend to assume touchy people are overleveraged and panicked, but maybe your just naturally rude?
“Lately though it seems that the posts have gotten less arrogant from the bears as I think a few of them are beginning to clue in to the reality that economics does not discriminate by a buyer’s personal buying strategy. ”
You have an amazing capacity to completely miss the point. The primary thing Vancouver Housing Blog/Financial Planning & Personal Responsibility/Vancouver Condo Info (the 3 main “bear” sites locally) have stressed is that the sun doesn’t shine forever and when the rain comes you had better be prepared. In boomtimes, leverage is your friend. In recessions it can destroy you and deplete your wealth. Therefore, the advice has been: do not overleverage, instead save for the rainy day. To say that everyone is in the same boat in case of an economic downturn is ridiculous. Mohican from Financial Planning & Personal Responsibility is the perfect example. He recently bought when a deal that met his criteria came along. He got a substantial reduction in price from his neighbours who bought a couple of years. Will he be in the same boat as his neighbours during a downturn? Not if he has less leverage working against him.
Troubled recessionary time are when millionaires are both made and bankrupted. They are, in fact, NOT a time when everyone has the same economic outcome, even if they are an *unpleasant* time for all.
I know some people who bought more house than they could afford within the last 12 months and others who have borrowed an enormous amount against the sudden increase in “equity” of their property. These people will not be in the same position as people who have been conservative with the amount of leverage they have taken on, people who bought 7 years ago, people without debt and, especially, people with substantial savings. For the record, I am saddened that some people will be hurt, especially friends and family.
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squidly77 Says:
September 7th, 2008 at 1:50 pm
.i do not regard realtors as professionals only they do.
is it not a vocation ?
real estate boards do not provide a public service they service only themselves and there paying members.
care to dispute that ?
its the one rotten apple that makes them all look bad.
the boisterous and nauseating ones and the ones that spin spin spin.
the ones that claim more affordable homes will hurt the economy where as in Calgary’s place unaffordable homes are strangling the economy as no one can afford to live here
no doubt Vancouver will end up the same way.
do you know that realtors and spec buyers make up less than 1% of any given cities population
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alexcanuck Says:
September 7th, 2008 at 2:49 pm
Listen to Bearette. (206) Some good thoughts there. Possible future topics? To start it off:
Would it be feasible to combine two adjacent shoebox units in a strata building into one livable place? Or would that simply not fly under strata law?
For either investment or residence purposes, what makes for a good building? Some buildings will become hellholes, leaky and moldy, filled with drug labs, flophouses, “escorts” and crackheads. Absentee, cash-strapped owners resolutely voting down any attempts to change matters. Any decent people fleeing and being replaced by more lowlifes. Others will be great, with families, good maintenance, courtesy and blockwatches . It will take years before it is obvious which is which. What are the clues, and are any buildings clearly set on a path already?
Any advantage to buying an entire floor for investment? Strikes me you may be able to attract a better tenant if they perceive a security and livability advantage from knowing any current/future neighbour will be subject to the same criteria as they were. (One advantage to being a renter is that when confronted with the neighbour from hell it is MUCH easier to toss in the towel and move.) Real estate is often a good investment, and in the few years following a monumental crash can be a great one. We are sitting on a wad of cash, and need appropriate vehicles for it.
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Patiently Waiting Says:
September 7th, 2008 at 3:06 pm
Rent before you commit to buying. You can test a building or a neighbourhood. For stratas, you probably will get some more insight into who owns and what problems they face. Personally, I doubt I’ll ever buy a condo.
I will buy a piece of land, even if it just has an old shack on it. When the market crashes, building or renovating will be a lot cheaper.
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freako Says:
September 7th, 2008 at 3:09 pm
His rearview mirror is basically an admission that he f’ed up and he’s looking for reasons why.
That is a very very weak admission. A reader who didn’t know better gets the impression that he called it right.
Here is a cross post of my recent RE Talks post on this very article:
We have tried to dissect Pastrick’s model in the past. I have always been of the opinion that he does little if any proper fundamental analysis (ie. price to rent etc), but rather tries to correlate/extrapolate a number factors to future price movements. He may well think that these factors are “fundamentals” but they really aren’t in the direct sense. Clearly he has zoomed in on recent economic condition and prevailing interest rates as key determinants of future RE prices. The problem is that he sees these conditions as absolutes that can drive near double digit price growth PERPETUALLY. In other words, as long as rates stay low and the economy is strong, prices will go up 10%+ a year. Yeah right.
This is a very foolish way of looking at things, but is the typical mindset of a statistical modeler (as opposed to a financial analyst). There is simply no effort made at UNDERSTANDING the actual MECHANISMS that drives RE prices, but rather a shotgun approach of simply correlating a plethora of data points and thinking that this will tell the future. It probably does, until it doesn’t. If there is one factor HE SHOULD HAVE TRIED TO CORRELATE, it should have been that high price/rent multiples generally means that RE will underperform (and vice versa). Essentially a case of not seeing the forest for the trees.
It is pretty clear that he is myopic about the “low rates, strong economy means higher prices” mindset. In March, he said: “Lower mortgage rates, a tight labour market, high income growth and rising in-migration all point to continued high sales volumes and price rises, according the CUCBC’s chief economist Helmut Pastrick.” No mention of affordability, price/rent etc. And now that his forecast has been completely invalidated he says: “Pastrick says it’s a different type of real estate downturn from what’s been seen before. Past triggers – like dramatic spikes in mortgage interest rates or high unemployment – aren’t present now.”. He pretty well admits that his entire model is based on these two factors. No wonder he is surprised. I think he should audit a financial analysis course or two. Perhaps Tsur could sit in as well, working in Henry Angus building and all.
Apparently his “model” has been expanded upon, because now affordability factors in: “Instead he attributes the drop to prices that had risen too high – beyond the affordability levels for first-time buyers “. That was the case in March as well (when prices were higher), so why would he think that prices could pile another whopping 17%? Clearly he was OBLIVIOUS to affordability concerns a paltry six months ago.
And in the past few years, we criticized the fact that his B.C. economic forecasts ignored U.S. housing melt down. First, he called for U.S. soft landing. Then he neglected to factor in economic consequence, of the OBVIOUSLY under way bubble collapse. Apperentaly, his “model” is now hip to some of these events: “coupled with consumer angst about everything from high oil prices to the U.S. economy and the real estate market meltdown there.
Overall, there is absolutely NOTHING forward looking about his analysis. Pure extrapolation of past condiditons. Zero connection of dots. Carl Gomez on the other hand …
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JR Says:
September 7th, 2008 at 3:48 pm
What I find so incredulous about our local economists is their apparent aversion to examining the most basic of economic principles; supply and demand.
Why haven’t they ever commented on an all time record number of units under construction, combined with an significant supply of un-rented completed units, against a long-standing anemic rate of population growth? How could they possibly assume that the supply of first time buyers would never dry up when all of them know that the affordability envelope had long since been pushed beyond the breaking point. The degree to which speculation has fueled this boom would be no surprise to them, nor would the fact that prices became totally detached from achievable rents some years ago. Why then, when virtually all of them were predicting a significantly lower level of appreciation, could they not project waning investor enthusiasm and a coincidental move to divest on the part of the more highly leveraged speculators?
Moving beyond the simple supply versus demand syndrome, are they that out of touch that they really believe that Sub-prime and ALT-A mortgages were the cause of the US meltdown rather than the most well publicized effect? Where are the economists in this part of the world who can tell it like it really is a la Chris Thornburg: “prices are dropping because they got too freaking high”?
This stuff isn’t complicated, but breaking it down to its most basic levels appears to be beyond the comfort level of our local economic pontificators. I suppose you can’t blame them for not wanting to start a stampede to the exits. I have little sympathy for them now, however, given their complicity in fueling the fires in the first place.
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Strataman Says:
September 7th, 2008 at 4:44 pm
alexcanuck “Would it be feasible to combine two adjacent shoebox units in a strata building into one livable place?” Yes that is possible and done quite often. I have worked with 5 such combination’s. Generally the strata’s will allow total inside remodeling as long as you stay away from various utility risers within the units, such as gas,sewer water and fire systems.If you want to relocate your access points to utilities such as that you will be required to submit engineered plans, which have to include a study of the complete building system. One set of units did that and they paid well over $40,000 for engineered drawings and performance guarantees accepted by the strata. They also had to deposit $50,000 with the strata for 10 years the assumption being if a building system fails the problem will be assumed to be the renovators until proven otherwise and the exploratory work would be the owners cost. Usually they will insist that outwardly in the hallways it remains identical. You will not be able to remove a door to the hallways or change their appearance. The door may be sealed off and finished inside but must remain the same on the hallway side. They will not allow relocation or changing of windows,siding, or balconies, as that is building envelope.
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alexcanuck Says:
September 7th, 2008 at 5:19 pm
Thanks Strataman! So one can remove the superfluous kitchen and just leave the hookups buried in the wall? (Properly finished and blocked, of course!) Are interior walls ever removed completely to give one big room? Two single bedroom units to become one double size living room with kitchen expanded and two “stock” bedrooms. One would need the correct mirror image units to begin with, natch. Any known published or online resource for this idea?
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arit Says:
September 7th, 2008 at 5:55 pm
BEARETTE BEARETTE BEARETTE
Hey, I am a taker! Your idea is right-on. We have already started to scatter info here and there. We talked building materials and insulation, leaks, condos. But we did not save the information anywhere.
Bearette,
Please see if you can open this link
http://docs.google.com/Doc?id=dkz3q3b_20dk779w9h
If it works for you, and you approve of it, we could all store our information there, in the
“Vancouver Bear Bible 2008″. That way we can have a central knowledgebase to benefit from.
care to try it out?
Let me know if you cannot access it.
Thanks in advance,
arit
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Nothing has changed, but the market tanked Says:
September 7th, 2008 at 6:10 pm
>>>>>>>>>>>>>>>>>>>>>>> Problem: >>>>>>>>>>>>>>>>>>>>>
Sales have fallen off the cliff:
Let’s do a diagnostic:
Interest rates:
Real rates are still at record lows, possibly below zero
Can’t be interest rates-check
Unemployment:
Some good paying jobs are disappearing, but still unemployment is low
Can’t be unemployment-check
Best place on earth:
I still hear this, nothing changed there-check
Land scarcity:
Well you know what they say: “ Vancouver is hemmed by mountains , ocean, and the USA”
no change there-check
The Olympics:
There coming in 2010, no change there-check
Grow ops
No change-check
Rich Jet set all want to live here
I still hear this, no change-check
Oh well I can’t figure it out, perhaps a highly trained professional on the Bill Good Show might be able to explain it.
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JR Says:
September 7th, 2008 at 6:49 pm
I don’t expect an interview on the Bill Good show however were I ever to be invited as a high-priced expert, I would say that sales are falling off a cliff because prices are too freaking high, and sales will continue to fall off a cliff until prices are freaking reasonable.
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TraderPaul Says:
September 7th, 2008 at 8:48 pm
A few posters talked about cost of construction affecting real estate prices in the coming years. I believe, and someone please correct me if I’m wrong, that right now it costs around $120-$150 per square foot to build a condo with above-average finishing in Vancouver (this doesn’t include cost of land.) This weekend I saw some ads for condo projects in Langley and Abbotsford advertising 1br units for around $150k. I think these projects more accurately reflect the cost to build. This may be the direction the market is headed in for few years, i.e. developers start marketing more affordable condos that even the “average working joe” can afford.
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Stock Message Board Says:
September 7th, 2008 at 10:56 pm
This blog is EXACTLY like a stock message board. There are pumpers, and there are bashers, but the most logical post i’ve read was the one that talked about P/E ratios of real estate. Which should be the ONLY way you talk about RE if it’s an investment.
If you can’t rent your place out for at least what the mortgage is worth, then you are buying completely based on speculation and not real value. Warren Buffet never invested in something he didn’t understand, and I don’t understand the value of a property if you can’t rent it out for MORE than what the mortgage is worth!
I am sooooo glad my ex bought a place with her fiance last year three months after we broke up. She’s LONG on the housing market, but the last 4 years have been strictly a momentum play. Fundamentals are returning to properly valuate homes! Ha ha!
Her life savings are probably wiped out already in the depreciation of the value of the house.
People say they don’t play in the stock market. Buy a house and that is exactly what you are doing. It’s a low risk stock, but you are essentially buying on margin. Stop talking about buys or sells, it’s more bid and ask these days. Values of real estate, charted will look like what happened to Etrade in December 2006 (look up the chart)
Buy it with every last bit of monthly income you have and you’d better pray that it just goes up and up and up.
Me, my net worth has increased 40k since she left me.
God bless God! He works in mysterious ways. I’m starting to understand.
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house mouse Says:
September 7th, 2008 at 11:11 pm
Those bob cats better not move into my house.
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Anonymous Says:
September 8th, 2008 at 7:58 am
#224,
You can’t rent your investment and you can not borrow risk to invest in stock market but in real estate you can buy millions of dollar mortgage because some or whole part of borrowed money justify by number of people living in side,sorry your girl gone wild but as a owner she is smart buyer it could be possible that you were trying to convince her to invest in stock market.
#224 if you find another girl make sure you don’t repeat your mistake.
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bearette Says:
September 8th, 2008 at 6:25 pm
Nice move arit. Great idea. I will go and procure myself a google account to log in. Would Van Condo like to host such a Bear Bible? What say you VC?
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The Pope Says:
September 8th, 2008 at 11:25 pm
Bearette & Arit, I will certainly host a bear bible here. I’m working on a portal page which would be a good start but unfortunately there’s this think called ‘work’ thats keeping me from getting that done. A wiki is one option, its just a question of whether it would be usefull and used.