Friday Free-for-all!
It’s open topic time here at Vancouver Condo Info – Here are a few stories I’ve noticed this week:
-As home prices fall, it’s time to rethink real estate
-British Columbia: Leaky condos to leaky schools
-BC homebuyers ‘sitting on their hands’ in buyers market
-Vancouver leads drop in Canadian house prices
-Realtors unfit to serve on council?
-Rennie: It’s all about the consumer
-Craigslist a haven for crooks?
-Vancouver bedbugs doubling each year
-Canadian productivity: longest slide in 2 decades
-Canadian buyers run to the USA
-Lehman a Lemon?
-US Fed holds emergency meeting on market
So what are you seeing out there? Post your news, links and anecdotes here and have a great sunshine filled 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 15th, 2008 at 8:09 am
Everything in finance is relative to everything else. to say it another way, there is no hitching post in the financial universe. The value of cash relative to stuff will skyrocket and the value of stuff relative to cash will plummet. This will reach rediculous levels before reversing to norma.
September 14th, 2008 at 11:42 pm
When four of the strongest bank in America are on the verge of collapsing: I m shit scared…
September 14th, 2008 at 10:08 pm
As the stock market continues to soar in the US the housing market in Canada will follow. It’s evident that rich asians and albertans have sold out of the TSX and will put that money into condos in Vancouver. That’s the last safe bastion along with SUVs and boats. I also think that wiskey is a good investment and so I’ve been building up a stock of single malt.
September 14th, 2008 at 10:08 pm
Thanks, Patriotz. You ROCK, TOO! Excellent explanation. So I don’t have to worry about missing the cash bubble now. I can sleep easy tonight. Wish I could say the same for all those who are long in the stock market:) G’night folks, and think of what the employee from Lehman interviewed on CNBC said, hey put it all into perspective, it’s not 9/11. We’re all alive and well and life will go on.
September 14th, 2008 at 10:06 pm
Approximately 10.7% of the province’s annual output and more than 10% of the province’s employment is driven by residential construction.
This from the provincial government report on the Leaky Condo Crisis I.
And note that report is from 10 years ago, during the rule of the evil Glen Clark and the late 90′s RE minibust. How much higher do you think that figure is today?
September 14th, 2008 at 9:58 pm
So to be a bubble people would have to pay me way more for my cash than they are willing to pay me now. Vancity is only paying 3% or so on term deposits.
A term deposit is a bond, not cash. You have an asset bubble when the market price of an asset is more than it is really worth, or in other words when the yield on that asset is too low. So you have a bond bubble when bond prices are too high, i.e. interest rates are too low.
If the term deposit rate went up to, say, 10% without a corresponding raise in inflation expectations, that would be a bond antibubble aka bust, not a bubble.
You cannot have a bubble in cash because cash has no time value by definition. Nobody is going to pay you $20 for a $10 bill.
September 14th, 2008 at 9:18 pm
Garth: Van Eeden stopped publishing his explorer picks some time earlier this year, then went almost all into bullion, then changed his money supply calculations and calculated that gold was worth $760, all in time for gold to plummet to <$750. Pretty impressive, although the timing was a bit lucky (as I’m sure PvE would agree). He is, however, predicting that the true ‘value’ of gold will continue to inflate with the money supply, which means about 8-12% pa.
Regarding “Do you have any other good places to read?”
I use fallstreet.com as a good portal (and a bit of sensible commentary) with a skeptical edge.
Also like some of what you find on itulip.com
patriotz: agreed, deflation & inflation not mutually exclusive. But it is worthwhile considering the overall effects on liquidity/money supply, esp when deciding on the big investment question: Cash or gold? (or various surrogates of each).
September 14th, 2008 at 7:31 pm
“Osoyoos realtor Carol Youngberg said the 497 figure does not include units for sale in unfinished buildings such as the Indigo condominium development and the Watermark Beach Resort and that with those units included, the number of available properties in Osoyoos could be close to 700.”
Interesting:”the Indigo condominium development”
Isn’t that the one Bill Good’s buddy Neil was pimping on the same radio station?
Something to do with last chance, waterfront, best place on earth etc.
September 14th, 2008 at 7:02 pm
squidly77 YOU ROCK, MAN!
September 14th, 2008 at 6:51 pm
Holy cow, Batman.
September 14th, 2008 at 6:11 pm
lehman bros is gone
merril lynch is gone
AIG needs to raise 50 billion over night
the centre cant hold its blowing apart
allon cnbc live
hang on comrades we are in for a rough ride
September 14th, 2008 at 3:36 pm
interesting take on American “Alt-A” mortgages….. can’t happen here folks!
http://tinyurl.com/4lrcxy
About 3 million U.S. borrowers have Alt-A mortgages totaling $1 trillion, compared with $855 billion of subprime loans outstanding, according to Inside Mortgage Finance
September 14th, 2008 at 1:48 pm
Hey folks,
Not to swing things too far off topic, but I was just googling around and stumbled across this beauty:
Residential construction activity in British Columbia is a key component of economic growth, employment, and income. Construction is BC’s second largest industrial activity, in terms of value and employment. Approximately 10.7% of the province’s annual output and more than 10% of the province’s employment is driven by residential construction.
This from the provincial government report on the Leaky Condo Crisis I. Leaky Condo Crisis II is currently underway, but if you want to read more, check this out!
http://www.qp.gov.bc.ca/condo/index.htm#contents
September 14th, 2008 at 1:45 pm
Mr. Market:
Ok, let me explain my confusion about cash as a bubble. A bubble is when people are paying way more for an item than it’s true value. However, due to inflation, people holding cash are getting paid less not more than the value of their cash. So to be a bubble people would have to pay me way more for my cash than they are willing to pay me now. Vancity is only paying 3% or so on term deposits. Also, due to a rising cost of living I my cash is not buying as much as it did last year in terms of gas, food and rent. So what am I missing here? How and when can I participate in the cash bubble?
Thanks in advance for your explanation.
September 14th, 2008 at 1:39 pm
This market is getting ugly. The number of “For Sale” signs across the city is astonishing. Ironically, it will probably only get worse by next year.
September 14th, 2008 at 1:33 pm
Mr. Market:
How can cash be the next bubble? Do you mean that someone who has cash will win big from an increase in interest rates; buying power of deflated assets; both or none of the above?
Please explain. Thanks.
September 14th, 2008 at 1:06 pm
“What is better than cash?”
Short positions on the stock market are a good way to raise cash right now because cash is the next bubble.
September 14th, 2008 at 1:01 pm
Barclays just walked out of talks to aquire Lehman, the NY Times is reporting that Lehman is headed towards liquidation:
http://www.nytimes.com/2008/09.....ref=slogin
September 14th, 2008 at 11:58 am
Richmond will make Osoyoos seem like a tight market soon.
The taxes in Richmond are driving Commercial and Industrial businesses out of Richmond while at the same time they are planning to increase the population by 50% by 2020 without building any new bridges.
The RAV Line is expected to absorb 6% of the traffic.
When the buzz wears off Richmond will seem even worse than Downtown Vancouver as far as being overbuilt, which is saying a lot because Vancouver is seriously overbuilt.
Imagine how foolish one would feel for paying $458,000 for a one bedroom. Unless you plan to stay in your suite and never go anywhere.
Just checked building digger and there are flippers trying to get 20% more than they paid one year ago! I have to laugh at their greedy, ignorant expense.
September 14th, 2008 at 11:53 am
“P.S what a joke –oil is 100.00 a barrell and gas prices are the price when oil was almost 150.00 a barrell-so much for affordible suburbia!”
Ike was just a blip.
Crude dropped again today:
http://www.reuters.com/article.....sinessNews
I’m looking forward to Monday
September 14th, 2008 at 10:24 am
Garth:
Here are some websites you might find interesting:
http://howestreet.com/
http://globaleconomicanalysis.blogspot.com/
http://thehousingbubbleblog.com/index.html
You probably already know about them, but maybe some others don’t. They are not all on investing, but there are some good audios and videos on howestreet and it’s full of links and Mish’s globaleconomicanalysis site is a good one if you are more technical like me
hehe.
What do people in general think of Howestreet.com? I would be interested to know.
September 14th, 2008 at 10:07 am
TOWN OF 3000 PEOPLE HAS INVENTORY OF 500-700. THAT WOULD BE ONE UNIT FOR SALE FOR EVERY 4-6 PERSONS, MAN, WOMAN AND CHILD.
Another juicy tidbit from anonymous on PaulB’s blog:
“Osoyoos realtor Carol Youngberg said the 497 figure does not include units for sale in unfinished buildings such as the Indigo condominium development and the Watermark Beach Resort and that with those units included, the number of available properties in Osoyoos could be close to 700.”
http://www.osoyoostimes.com/pM.....6_0_1_0_M1
Anonymous Anonymous said…
Todays news from global news
#1–speculaters in osoyous can`t give their investments away,prices dropping fast,town of 3000 people has inventory of over 500 units.
#2–A little story about wages,debt,and inflation–average wage in BC in 1986 19.61 an hour—–average wage in BC today 19.69 an hour
Consumer debt at all time high,household debt at all time high, inflation since 1986–food up 79%–housing 46%(I don`t know where they got that number from) –clothing up 60%–fuel up 60%-Anyways they always under estimate inflation so I would double all those inflation amounts.
I will stick to my prediction of declining house prices in BC of 3% a month for the next year and flat prices for a decade, unless minimum wage goes to 20.00 an hour with all other wages following suit,the party is over.
P.S what a joke –oil is 100.00 a barrell and gas prices are the price when oil was almost 150.00 a barrell-so much for affordible suburbia!
Anonymous said…
http://www.osoyoostimes.com/pM....._0_1_0_M14
link to article about osoyoos:)
September 13, 2008 5:39 PM
September 14th, 2008 at 9:54 am
Good Sunday morning all,
I found this informative little nugget over at PaulB’s site:
Anonymous RJB said…
“Anyone have any thoughts on whether the Fannie/Freddie bailout will actually slow foreclosures in the US and what downstream impact might be felt (if any) in local price deflation?”
Foreclosures will continue at the same pace. Alt-A and Jumbos are next.
Good overview of the next wave
http://www.youtube.com/watch?v=pmeBSWI9sF8
September 14th, 2008 at 4:20 am
rentah: I think we are on the same wavelength. I first saw Paul van Eeden at a resource conference in 2003 or so. He is great, but has stopped publishing the free stuff on his website. I also read everything from the people at http://www.sprott.com. They have predicted pretty much everything that has happened, although unfortunately their funds don’t reflect that fact. I also read the boards at http://www.prudentbear.com, for some discussion with a little more colour.
Do you have any other good places to read?
September 13th, 2008 at 9:01 pm
When these two pimps start talking double digit and no rebound in sight, it means an outright crash of greater than early 80’s.
Bingo. Add Somerville and you get the Three Stooges.
inflation or deflation?
Not “or”. “And”.
Consumer price inflation and asset price deflation.
Oh and stagnant nominal wages and declining nominal payrolls too.
September 13th, 2008 at 8:32 pm
Yeah, there’s tons of selection out there, but is it any wonder not much is selling? Theres ONE house listed in east van for under $500k and its a pink pimple looking place in renfrew. It’s going to take a while for sellers to understand the gravy train has gone off the rails, the only stuff selling is going for under list by people that really need or want to sell.
September 13th, 2008 at 3:27 pm
There sure is a lot of selection out there.
September 13th, 2008 at 2:17 pm
http://www.canada.com/victoria.....38193917ff
“In Greater Victoria, the number of homes for sale — 4,657 — is at its highest level in a dozen years.
Provincially, total listings climbed to 58,445 in August, up by 61 per cent from August 2007
Helmut Pastrick, Central 1 Credit Union chief economist, said this week that median housing prices in Greater Victoria could decline by 10 to 15 per cent by 2009.
Muir said, “If market conditions that have prevailed over the last three or four months continue to the end of the year, then it would be reasonable to expect prices to come off by around 10 per cent.” He added, however, he is continuing to watch the rate of new listings to assess their effects on future prices.”
Usually what both of these pimps would say, (if they anticipated a 20% to 30% correction), that there might be a slight pull back of 1% to 2% in price, and a 5% decrease in sales volume until the market starts its inevitable and constant rise.
When these two pimps start talking double digit and no rebound in sight, it means an outright crash of greater than early 80’s.
September 13th, 2008 at 2:01 pm
iyou, you’re so right and people are finally starting to realize it.
There are also thousands more rental units coming to downtown Vancouver right as the labour market starts to soften.
$1700 for L’Hermitage? (788 Richards) That might work today but what about when TV Towers, Raffles, Cosmo etc. all hit?
Spectrum 1-4 still has units that haven’t been rented out and it’s been almost a year. Realistically who’s going to rent on the bad side of downtown? From what I can see it’s relativelly high paid industry (restaurants and clubs) people who can afford the rent, the downside is they get off at 4am and most people don’t go straight to bed after work.
I also predicted that first time buyers would be vacating their rental units creating a situation where you have an exodus of renters and an influx of rental units.
I know it’s different here but imagine if you were paying $3300 in mortgage and strata every month and couldn’t even get $1500 in rent would you.
A)Raise the rent this is a world class city.
B)Lower your asking price, it’s better to bleed $1700 a month for 25 years than $3300.
September 13th, 2008 at 1:54 pm
Mr Market, crabman, islander, et al.
You guys are all getting at THE most crucial question: inflation or deflation?
Whatever your position on this shapes your investment approach, so it’s very important.
The RE meltdown (US, global) raised concerns of deflation, but a number of things suggest that inflation still has the upper hand:
- Money supply: The exact definition of money supply effects estimates a lot. Commentators that I respect (anybody know Paul van Eeden?) still calculate marked increase in money supply: 8% pa in US and a whopping 13% here. Recent slowing but still massive annual increases.
- Bailouts: Fannie & Freddie, Lehman, etc. The US is showing no appetite for allowing anything to fail, and lots of appetite for ensuring liquidity.
- Helicopter Ben: No 1930′s on his watch.
So the recent crash in ‘things’ is likely a massive correction.
We’ve discussed this (and predicted it, I might add), on other local RE blogs.
FWIIW, I’m now heavily back into gold stocks, and I think last week may have seen a bottom for them. (Very volatile sector. Only approach with seatbelts and Gravol.)