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September 13th, 2008 at 11:52 am
I have a saved search in the multiple listing service website that I look at every weekend. For the longest time there’ve been only four listings returned, based on my search criteria of “$175,000 to $300,000 located in False Creek, Mount Pleasant and Fairview”. Suddenly there are seven listings in my neighborhood this weekend. See for yourself:
http://tinyurl.com/mls-ca
Of course they’re all still way overpriced in terms of fundamentals, so I’m more than happy to keep renting here, but it’s nice to see things are moving in the right direction. When I bought my house in Portland back in ’93 I paid $55,000, which seemed like a lot of money to me at the time–and bank acted like it was a lot, too. How times have changed, no? Anyway, back then it was cheaper to have a mortgage than to pay rent. That used to be the reason for buying a house. Imagine that. According to Zillow it’s currently worth $330,500. That’s down from the zestimate high of $353,000 earlier this year, but still six times what I paid for it. And yes, I still own it, and yes, it’s paid off (how could it not be paid off?! Please everyone don’t hate me. I had no idea things would turn out this way….)
http://tinyurl.com/pdx-cheaper
But getting back to Vancouver, I’m paying $925/month for my 1-bedroom, a price that includes heat and water. A block away there’s a similar-sized place for sale for $305,000. Last week in the Straight it was advertised for $314,000, and promoted by the realtor as an “investment” property. Who in their right mind is buying this kind of bullshit any more? With 10% down and a 25 year mortgage, and adding in property taxes and maintenance fees, you’re looking at paying almost double what the rent would be. And that too for a property that’s falling in value! Never mind the mega-Victorian on the corner that’s on the market for $1.9 million: 5200 square feet, fully rented for $5200/month, which is less than half what the mortgage would be, not counting taxes and what must be horrific upkeep costs. HELLO?!
September 12th, 2008 at 11:35 pm
Yay, 20k!
September looks set to break all inventory records.
September 12th, 2008 at 11:15 pm
Everyone wants to get into the Vancouver market, including rich bed bugs that are looking for second homes.
September 12th, 2008 at 9:04 pm
Purchasing power is another matter and islander had posted that as long as the printing press keeps rolling and fiat money is produced so will the current depreciation value of your paper money.
As jesse has pointed out, stocks and RE are getting cheaper, not more expensive.
Note again that consumer price inflation and asset inflation are two different things. Rising consumer price inflation is correlated with asset price deflation (and consumer price disinflation is correlated with asset price inflation).
September 12th, 2008 at 7:09 pm
Cash is not king because cash itself represents only the faith other people have about the issuing country and it is in a form of an “IOU”. If it’s a $20 Canadian legal tender, it’s 20 dollars as long as the Canadian government and the BOC are solvent. Purchasing power is another matter and islander had posted that as long as the printing press keeps rolling and fiat money is produced so will the current depreciation value of your paper money. This is beyond your control and that is why, smart people never lay their cash around doing nothing. They always make sure the money is generating some cash flow for them. This is the underlying basis of investing. You invest your money to generate positive cash flow, because money borrowed specifically to invest in asset classes that are or has the potential to become income producing can be tax deductible and also a good hedge against inflation. If it’s generating positive cash flow, it’s usually able to match inflation.
That is why there will always be a lure for smart investors out there lurking in the midst, waiting for the opportunity to buy assets, be it RE or equities at really depressed prices in the hopes of generating future positive cash flow or gain.
This time I think will not be any different from any other times either. It happened in the mid 70s, in the 80s, in the 90s and in 2000s.
But here’s the problem why very few people will become rich. It is because, everybody talks about buying properties after the bust and yet, some of our friends who did talked about it after the 90s bust never even lay their fingers on any of the properties they want to buy. Instead, they deployed most of their capital towards the dot.com stocks. Why?
Because that was a sure fire way to make money. Our RE at the time wasn’t a sure fire way anymore. It wasn’t a momentum play, because unlike Nortel, Vancouver RE then didn’t just go up and up and up after the 90s bust. It went side ways and then down.
There is no such thing as a sure fire way to make money investing, though you will see no short of people out there trying to sell you books to convince you otherwise. Investing is about doing your homework, going against the tide and taking some calculated risks. Most importantly of all, it’s really taking a leap of faith because, you are taking that risk not knowing that it will pan out. And a lot of smart investors had been through that road many times. No one becomes a smart investor without loosing some money him or herself. Even the great Warren Buffett got burned a few times — that’s how he got smart.
On the contrary, many wannabe smart investor try to claim a perfect score — I always know how to invest anything that makes money , and I can time the market and I never loose any money in any of my investments! Heard this mantra before?!?
We’ve met some of these people over the years though, including a seminar with Tom Vu. We now know what his full of!
Don’t fear this coming global recession. If it comes it comes. Be in cash if you wish, but eventually things will get better because the smart money will begin to be deployed and depressed assets will be bought and then eventually appreciated. The key to the next bubble is, what is the next asset class that will go up and if this is the case, all the money that were in our RE will eventually gravitate towards that next asset class in a few years time and a new bubble will form.
C’est la vie mon ami!
September 12th, 2008 at 6:08 pm
Bailouts Will Push US into Depression: Manager
http://www.cnbc.com/id/26656750
September 12th, 2008 at 5:13 pm
Re Post #29
Real estate higher in 2015 than today? – perhaps.
Condominiums higher in 2015 than today? – hell no.
Condos will not reach the price they are today until well into the next bubble…when and if it happens.
No one should confuse a condo with real estate. They are two very different things.
September 12th, 2008 at 5:12 pm
What do you expect the sorry losers at the Province to say about craigslist. It is eating their advertising revenue.
The biggest crroks run the financial companies they don’t need craigslist.
This is just a way to smear c/l and frighten people to paid advertising. As anywhere- Buyer beware.
Oh by the way, do you where Eron Mortgage company got their clients from (and then stole their dough) paid advertising in the local papers!
September 12th, 2008 at 5:08 pm
I’m selling some, at only 110% above face value. If nobody buys today my price will go up to 115% tomorrow so get in now before you’re priced out forever!
my local friendly bank will sell it to me for $108 but only if i give them the key to my house…… i am sorely tempted
you have to pay if you want to play
September 12th, 2008 at 4:54 pm
Yay! More of Thumsups comrades are coming.
The difference is they are renting because they are intelligent and can read
September 12th, 2008 at 4:27 pm
I work next to Microsoft in Richmon…when they moved in their sign said “Welcome to Canda”…obviously a good first step
By the way, I’ve been told that the only reason that they have the Vancouver office is because it’s much easier to immigrate workers to Canada. Which explains why every person I’ve talked to from there is either East Indian or Russian.
I’m outta here…it’s Friday and the sun is out so time to hit a patio.
September 12th, 2008 at 4:09 pm
So who’s cheering for 20k tonight? I don’t remember what the previous inventory peak was but if today sees listings like the last two days I think we could set a new record.
September 12th, 2008 at 4:00 pm
“Too true. The local papers should be ashamed of themselves for their pandering to real estate shills.”
And let’s not forget a certain talk show host/tv anchor, who pushes, pimps and pumps every chance he gets.
September 12th, 2008 at 4:00 pm
oziijjizo
“everybody will be hoarding cash ’cause there is no alternative….. get yours today!”
I’m selling some, at only 110% above face value. If nobody buys today my price will go up to 115% tomorrow so get in now before you’re priced out forever!
September 12th, 2008 at 3:41 pm
“Cause I mean, gosh, if you can’t trust a CONDO MARKETING COMPANY for honest advice on buying real estate who can you trust? Thanks Mr. Rennie, glad the papers are publishing your unbiased expert opinion!”
Too true. The local papers should be ashamed of themselves for their pandering to real estate shills.
September 12th, 2008 at 3:26 pm
I guess if ‘its different here’ there must have been many CONDO MARKETERS in the USA two years ago warning people that the market was about to crash and that it might be a good idea to hold off buying just for a bit.
Cause I mean, gosh, if you can’t trust a CONDO MARKETING COMPANY for honest advice on buying real estate who can you trust? Thanks Mr. Rennie, glad the papers are publishing your unbiased expert opinion!
September 12th, 2008 at 3:15 pm
You cannot have a bubble in cash. It has no fundamentals.
everybody will be hoarding cash ’cause there is no alternative….. get yours today!
September 12th, 2008 at 3:14 pm
Thums/Rob
Microsoft just wants an address on this side of the border, just in case those gun blazing idiots get themselves into much trouble they can ship from Canada.
September 12th, 2008 at 3:02 pm
Gah,
Preety sad to say that we need more doctors,more hospital because your link shows the bussiest ever scene every where also a statement “We’ve got a lot more routes. We’ve got more service in September than we’ve ever rolled out, and we’re going to continue to grow,” he said.
Other side Microsoft is coming Vancouver- the place of action best place to be,Vancouver British Columbia the “Best Place On Earth”.-Bill Gates.
September 12th, 2008 at 1:48 pm
“Cash is no place to be, Mr. Market.”
Crap. I have loads of the stuff. You are saying there must be a better place. I’m listening.
“But with 400-point market drops and an imploding real estate market unfolding before our eyes, there’s suddenly nowhere to turn.”
So the stock market and housing are dropping compared to cash. Glad we cleared that up.
There’s nowhere safe for our money. That is the tragedy that is unfolding.”
I give up, islander. What is better than cash?
September 12th, 2008 at 1:40 pm
Mr. Rennie should probably buy those 20,000 listings on MLS.He can probably afford it. Then he should sell them in 2015. I think this would be a good idea and a thsmart thing for him to do.
September 12th, 2008 at 1:15 pm
The following is from a piece on Bob Rennie in today’s Globe and Mail Real Estate section.
Experts like Mr. Rennie and Mr. Beasley predict that post-Olympics, owning property within Vancouver city limits will be beyond the means of most people.
“I think that there is a huge emerging issue of affordability for average folks to live in the city,” says Mr. Beasley. “I don’t think any part of Vancouver is going to stay easily affordable.”
Mr. Rennie agrees: “I think between now and 2015, that I would buy today.”
September 12th, 2008 at 1:13 pm
“Bonds are a risk in a low interest rate environment. Cash is being inflated into worthlessness (wait till they bail out Lehman Bros. this weekend). Gold can’t get any traction.”
Gold (along with just about every other asset) is deflating at the moment. We’re in precisely the opposite situation from a currency glut right now – the credit contraction means cash is king.
September 12th, 2008 at 12:50 pm
Today, Canada’s inflation rate is 3.4 per cent, unemployment is six per cent and a five-year mortgage can be had for under six per cent (if you shop around.) The economy is still growing, although just barely. These conditions do not suggest a housing market collapse like that of 1981-82 is imminent.
Boy that’s a relief.
BTW, what were the inflation rate, unemployment, mortgage rates, and economic growth rate in the US two years ago?
September 12th, 2008 at 12:43 pm
The article from Van-zee’s link (#22) mentions the Forbes article from last summer. It rated LA and Vancouver as the 2 most overvalued North American RE markets with virtually the same rental yield. Since then, LA has dropped 30%. I believe that would put us firmly in the lead!
islander,
I don’t think central banks are creating money they way you think they are. In the US, for example, the monetary base has been growing at less than 2%. Also, with the price of oil, gold, stocks, RE, etc dropping, cash is becoming more valuable, not less.
September 12th, 2008 at 12:17 pm
http://www.nytimes.com/2008/09.....ref=slogin
Here is a great article about China’s OLYMPIC real estate boom…..err…sorry….OLYMPIC real estate BUST.
September 12th, 2008 at 12:06 pm
Care to compare reading lists, Kabooba?
Cash is no place to be, Mr. Market. Central banks are creating money by the double digits each year. Whatever you’ve got in the bank, it’s purchasing power is dramatically shrinking regardless of what’s happening today or this week to the cost of a loaf of bread or a gallon of gasoline.
The long term trend of printed money is toward a value of zero. Most people didn’t raise a ruckus when the assessed value of their homes kept increasing, or their portfolios were steady. But with 400-point market drops and an imploding real estate market unfolding before our eyes, there’s suddenly nowhere to turn.
Bonds are a risk in a low interest rate environment. Cash is being inflated into worthlessness (wait till they bail out Lehman Bros. this weekend). Gold can’t get any traction.
There’s nowhere safe for our money. That is the tragedy that is unfolding. That is the problem we face in this election cycle. We’re ALL circling the drain.
Start asking your local candidates some tough questions. Take responsibility for your lives.
Sitting around blaming realtors or developers for failing to be astute enough to pick up a copy of your favorite investment book at the public library is trite, childish and impotent.
If you think having thumbed through one starter-level investment book makes you an economist, or that selling at the peak makes you a real estate genius, I hope for your sake that your blanket of misplaced smug keeps you warm at night.
Because in a way, that IS socialism.
September 12th, 2008 at 12:05 pm
Response to #12.
You say cost for producing oilsands is $85/barrel.
Research shows that it takes 1 barrel of input to produce 3 barrels in the oilsands.
If the $/barrel is dropping, doesn’t that mean costs are also dropping?
So your $85/barrel doesn’t jive.
September 12th, 2008 at 10:58 am
“The rest of us, lemmings who bought during the frenzy and bid up the price of dumpy asbestos-filled bungalows that are worth less than they were six months ago, rue the day we placed a call to a real estate agent.”
This is all just happening too fast.
http://tinyurl.com/3o4ekx
September 12th, 2008 at 10:34 am
Methinks those dim-witted realtors are going to have a lot more time on their hands…..maybe they could try reading “The Intelligent Investor” in between workouts at the Fitness Centre.
September 12th, 2008 at 10:27 am
The next bubble is in cash.
You cannot have a bubble in cash. It has no fundamentals.
You are talking about price deflation.
September 12th, 2008 at 10:22 am
I jumped into the conversation and started to introduce concepts such as rent/buy and rent to income ratios and I got the feeling that these had never been considered by them. I laughed when they asked if I was a socialist!
Yep, nothing like talking about the fundamental principles of capitalism to get you labeled a “socialist”.
Capital is not “something you make money on by selling it for more than you paid for it”.
September 12th, 2008 at 10:19 am
I had bet on inflation, but right now that approach is not working out so well.
Consumer price inflation and asset price inflation are two different things. Asset prices are generally correlated with each other, but consumer price inflation is actually correlated with asset price deflation.
September 12th, 2008 at 9:25 am
10Thums up2 Says:
September 12th, 2008 at 7:55 am
B C Transit has increased the size of their buses by 20 feet to tackle the incresed number of generation still making more buses, otherside rents are up and coming $8700 / 5br – WATERFRONT LUXURY – POOL – DESIGNER KITCHEN – SPECTACULAR VIEWS.
tUMBS thisis true but also more bus assidents CBC BUS ACCIDENTS SPIKE http://www.cbc.ca/canada/briti.....ouver.html people in hospital and broken leave town and sell homes as accidents worst place on earth for passengers and inventory going UPUPUP!!!
>”I think vancouver overpriced sell now to get extra monkey before price crash like nutslap on forehead”TSUR SOMERVILLE
September 12th, 2008 at 9:22 am
Hey Krisssssssh
How many pre-sales have you bought in the last six months?
September 12th, 2008 at 9:20 am
Garth,
Take a look at HOD. It’s a bear oil ETF.
September 12th, 2008 at 9:17 am
The real estate bubble is over. The next bubble is in cash. That means deflation in RE, equities, debt, commodities with a corresponding increase in the value of cash.
Stuff is going down and money is going up.
September 12th, 2008 at 9:07 am
For some reason there’s one poster here who gets LOTS and LOTS of attention, consistently taking the comments off topic. Some of you seem to take this joker seriously even though he/she is OBVIOUSLY just trolling for responses. So in an effort to keep the comments more on topic I propose the following:
1) Only reply if you feel his/her posts make sense and need a rebuttal, and only then if you’re going to address the topic. Replies that simply say ‘you’re an idiot’ are obvious and just add to the noise.
2) Don’t get sucked in by the fake ESL grammar, its too inconsistent and phony – it’s only there to try to draw out racists.
3) Post evidence of obvious trolling here and then link to this post instead of repeating the same stuff in the blog comments.
I enjoy reading the comments on this blog for information and opinions, but not for trolling and flame wars. If you need any proof that ‘Krrish’ is toying with you here’s a comment he posted on the majority avoid buying story:
Quote:
The “EMILE’S”problem is not a place or income their problem was they were disconnected from their parents for that they have to spend atleast$1600 per month to baby sit their kids
I don’t know if you have a same problem the best thing in this case is if people can find likewise friends they can fix their schdule or buy a decent home and accommodate a single elder or find a decent looking homeless person.
Do you really believe anyone would honestly suggest ‘a decent looking homeless person’ as a childcare solution? Get real.
Posts: 1 Krrish posts under other names as well including “TIME” “SATV” “Browntown” “Informer” and “Thums Up”. I must admit to having a certain amount of fascination with this character. Mostly they just junk up the blog comments and seem to be trolling for replies and I thought it was somebody faking the character, but they’ve been at it for so long and so consistently that now I have my doubts. Wouldn’t a normal person have gotten bored of this game a long time ago?
September 12th, 2008 at 8:24 am
Those productivity numbers are very worrying. Productivity is the main driver for wealth creation.
This is compounded in the short term, by a significant selloff in commods and a slumping real estate market. In the medium term, with oil sands costs already up to $85 a barrel, the economic future is looking a lot gloomier.
September 12th, 2008 at 8:14 am
Bear market conditions continue to improve. Sales are rising and listings are dropping as people realise what a beautiful place Vancouver is. I was at the beach yesterday and there were still lots of young people excited to be there and most were clearly interested in real estate investment, there were no bears around at all. After the beach I went to my nail gun repair shop and a co-worker announced he had just bought a condo. I bought another boat and am looking to invest in another SUV this weekend now that gas prices are up in Toronto.
September 12th, 2008 at 7:55 am
LOTS OF PREVIOUSLY SOLD OUT OWNERS ARE RE-ENTERING IN THE MARKET
After few months of desperation lots of previous owners who sold their unit in fear of crash are re-entering in the market,They had join the “smart buyers”to correct their mistake which ended up paying realtors and reducing prices for realtors desire,most of them found same fact that realtors convinced them to reduce the prices so they can make their sales easy.on a side note some of idiot bloggers like the one previously called himself BTK who generate multiple personality as ampa,btk,bdk etc look what did he do in the past.
February 4th, 2008 at 2:39 pm
113 btk Says:
I don’t mean to sound like a know it all but I wrote a long tangent about this last week. More recently Spectrum 1,2,3,4 and a few other buildings just flooded the market.
With thousands of units completing downtown in the next 18 months the rental market is already soft and will get even softer!
Six Month Later
September 9th, 2008 at 6:02 pm
48 Condohype Says: Judging from this Craigslist ad, the market’s at equilibrium. Man, what a gong show. The owner’s asking $3000/month for a one-bedroom at Spectrum.
While smart buyers and fool sellers will be countinue they had also decide to be aware of fool bloggers like bdk that way they don’t have to download their millions of dollars property.
same time they want to keep their eyes on realtors like paul b who published fake numbers under the rebgv banner which does not match with official statement.
B C Transit has increased the size of their buses by 20 feet to tackle the incresed number of generation still making more buses, otherside rents are up and coming $8700 / 5br – WATERFRONT LUXURY – POOL – DESIGNER KITCHEN – SPECTACULAR VIEWS.
>”I don’t like to force people about what to do next but they should learn a lesson from Mohican- once he has learned a lesson that bulls on the blogs spin the wheel right”.Todd Bertuzzi
September 12th, 2008 at 7:31 am
time is on the bears’ side…. patience
September 12th, 2008 at 7:19 am
A socialist? So, what if you were?
September 12th, 2008 at 7:09 am
So I was in the fitness centre yesterday and overheard a RE discussion. One guy was still quite bullish saying that what’s currently going on is only temporary and that things wil be back to return to “normal” (i.e. good old appreciation days) by December ! I couldn’t resist ! I jumped into the conversation and started to introduce concepts such as rent/buy and rent to income ratios and I got the feeling that these had never been considered by them. I laughed when they asked if I was a socialist!
September 12th, 2008 at 2:18 am
As a saver, I was hoping to pick up a nice house in a few years, but right now my investments are losing value at a rate much greater than the houses. There is a big debate in the investment bear community about inflation vs. deflation. I had bet on inflation, but right now that approach is not working out so well.
Maybe I should just stick a wad of cash in a mattress (full of bed-bugs?).
September 12th, 2008 at 12:22 am
We may see another 20K party by tomorrow or next week. Inventory has been skyrocketing this last week.
Specuvestors, your time is up. You are the weakest link. Good bye.
September 12th, 2008 at 12:04 am
If the bedbug problem increases to become noticeable for visitors — or global media — during the 2010 Winter Games, that might be good for an additional 2% to 3% decline in housing prices as the crash bottoms out in 2012.
September 11th, 2008 at 11:26 pm
Hey, it’s not even Friday in Vancouver yet… Hee hee hee!
September 11th, 2008 at 11:09 pm
The world is flat. Real estate prices are just taking a breather.
September 11th, 2008 at 11:07 pm
The median price tracked by Landcor across B.C. was $417,780 in the second quarter of 2008, compared with $414,794 in the first quarter, and $380,018 in the second quarter of 2007.
“To me, that’s a positive,” Nielsen said of the median sales figure, which indicates people haven’t lost a lot of equity in their properties.
And the title of the story is … BC homebuyers are “sitting on their hands”. Gee. I wonder why they would do that?