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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September 5th, 2008 at 11:54 am
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.
September 5th, 2008 at 11:54 am
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.
September 5th, 2008 at 12:22 pm
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.
September 5th, 2008 at 12:43 pm
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.
September 5th, 2008 at 12:45 pm
September 5th, 2008 at 12:58 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.
September 5th, 2008 at 1:07 pm
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?
September 5th, 2008 at 1:10 pm
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
September 5th, 2008 at 1:13 pm
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.
September 5th, 2008 at 1:13 pm
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
September 5th, 2008 at 1:24 pm
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.
September 5th, 2008 at 1:29 pm
September 5th, 2008 at 1:32 pm
touche
September 5th, 2008 at 1:38 pm
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?
September 5th, 2008 at 1:38 pm
Dave — YOU”RE FIRED!
http://www.fotosearch.com/CSK006/pr26451/
September 5th, 2008 at 1:40 pm
http://www.fotosearch.com/CSK006/pr26451/
Dave — YOU”RE FIRED!
September 5th, 2008 at 1:45 pm
Housing corrections take several years, not months. Pastrick is either engaging in wishful thinking or he just doesn’t want to scare the sheep.
September 5th, 2008 at 1:50 pm
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
September 5th, 2008 at 1:51 pm
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?
September 5th, 2008 at 1:52 pm
Touche
September 5th, 2008 at 1:59 pm
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.”
September 5th, 2008 at 2:01 pm
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!
September 5th, 2008 at 2:05 pm
http://ocw.usu.edu/University_...../sheep.jpg
September 5th, 2008 at 2:12 pm
http://www.vpcollege.com/esl/affiliations.asp
September 5th, 2008 at 2:18 pm
“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).
September 5th, 2008 at 2:25 pm
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
September 5th, 2008 at 2:31 pm
September 5th, 2008 at 2:39 pm
http://www.cfgphoto.com/img6858.htm
September 5th, 2008 at 2:49 pm
http://www.healthline.com/blog.....786603.JPG
September 5th, 2008 at 2:52 pm
September 5th, 2008 at 2:56 pm
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).
September 5th, 2008 at 3:00 pm
September 5th, 2008 at 3:05 pm
“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!
September 5th, 2008 at 3:06 pm
http://www.cottage-cader-idris.co.uk/
If we don’t watch out he’ll have us climbing Mt. Snowdon catching flying diamonds.
September 5th, 2008 at 3:11 pm
http://img51.imageshack.us/img.....job6mg.jpg
September 5th, 2008 at 3:20 pm
September 5th, 2008 at 3:23 pm
http://www.ashie.com/sheeple%20copy.gif
September 5th, 2008 at 3:36 pm
http://www.pet-bliss.com/acatalog/rw23.jpg
YOU, TOO, CAN LEARN TO BE A SPINMEISTER:
http://makerfaire.com/pub/e/268
September 5th, 2008 at 3:52 pm
“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!
September 5th, 2008 at 4:02 pm
September 5th, 2008 at 4:32 pm
I’m glad we can all have fun as the market collapses around us.
September 5th, 2008 at 5:25 pm
September 5th, 2008 at 5:30 pm
“Very few Asian are buying here now,” he said. “And those that do are already local residents.”
September 5th, 2008 at 5:30 pm
September 5th, 2008 at 6:58 pm
September 5th, 2008 at 7:16 pm
no not yet if you graph the numbers will the bottom be “V” shaped or “L” shaped?
September 5th, 2008 at 7:31 pm
http://www.washingtonpost.com/.....03351.html
September 5th, 2008 at 7:42 pm
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.
September 5th, 2008 at 7:48 pm
“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.
September 5th, 2008 at 8:58 pm
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!!
September 5th, 2008 at 9:12 pm
September 5th, 2008 at 9:12 pm
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!
September 5th, 2008 at 9:14 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.
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..
September 5th, 2008 at 9:15 pm
“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?
September 5th, 2008 at 9:20 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.
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..
September 5th, 2008 at 9:26 pm
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
September 5th, 2008 at 9:28 pm
“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.
September 5th, 2008 at 9:38 pm
September 5th, 2008 at 10:21 pm
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.
September 5th, 2008 at 10:48 pm