Friday Free For All!
Every Friday we do an end of the week news round up here at http://vancouvercondo.info and have an open topic discussion to share thoughts on the local market and global economy. Anything related to real estates and economics is welcome. Here are a few stories I’ve noticed this week to get us started:
-Politics and the Vancouver affordability crisis
-Agent Wills Realty Reality check
-Vancouver auto thefts on the rise
-Steeper drop in Canadian house prices
-The Canadian deflation threat
-National Bank: US faces year long recession
-Bush concerned about financial crisis
-30 Year deregulation era dies sudden death
-Financial crisis enters dangerous new phase
So what are you seeing out there? Post your news, links, thoughts and anecdotes here and have an excellent 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 19th, 2008 at 3:12 am
This article is worth reading a year later. See Somerville make a complete jackass of himself. He can’t even get his facts straight - he claims there were no nominal declines from 1994 to 2001, when the data at his own business school clearly shows otherwise.
But while Somerville expects to see a lower rate of price increase, he says, “Nobody credible has predicted a price decline.”
“This is the biggest national bubble that the US has seen in over a century.” This is “not a sustainable situation,” claimed Shiller. Then he directed his attention to Vancouver. The bubble was especially extended in “glamour cities and glamour vacation areas,” he warned, and “Vancouver is the most bubbly city in the world.” - April 26,2005.
Instead, prices could become “sticky.” “People are reluctant to lower prices, so instead, they just let them sit.”
What a strategy! Just don’t drop your price and the market won’t fall! How come nobody tried that south of the border?
And scroll down and read the brilliant rebuttals by working slog and incredulous.
September 19th, 2008 at 6:40 am
If he said 1993 instead of 1994, his statement would have been correct.
September 19th, 2008 at 7:57 am
September 19th, 2008 at 8:00 am
Could a scenario like that unfold in Canada? How would you feel about paying income tax if you knew it was going towards the banks who were willing players in the housing bubble?
September 19th, 2008 at 8:00 am
September 19th, 2008 at 8:10 am
New MLS residential listings in August fell 22 per cent from July on a seasonally adjusted basis, the second largest month-over-month decline in 25 years.
RECORD BREAKING FALL IN UNEMPLOYEEMENT RATE
It doesn’t matter what political parties you belongs to but you can not ignore this single fact that unemployement rates are 33 year low.
RECORD BREAKING LOW INTEREST RATES
Very simple to say interest rates are low
ROCK SOLID REAL ESTATE PERFORMANCE(VANCOUVER)
As seen on tv news papers etc global economy collapse same time there was and there is one and only option and that is vancouver real estate vritually poised to stand tough even in economy or real estate down turn.
SOLUTION AND RESULT FOR VANCOUVER
“THE BEST PLACE ON EARTH”.-rentsareupandcoming
September 19th, 2008 at 8:21 am
September 19th, 2008 at 8:28 am
September 19th, 2008 at 8:34 am
http://tinyurl.com/5djfjn
Many people who have below a 620 beacon score, may have challenges finding mortgage financing in the near future. After Oct 15, at least one applicant on a high ratio mortgage application MUST have a minimum 620 beacon score at all insured lenders.
the next leg down!
September 19th, 2008 at 11:14 am
Farham, Que. — Stephen Harper is urging Canadians not to panic in the face of the U.S. financial crisis and continue spending on consumer goods to keep the economy humming.
“Canadian consumer spending has been a rock that has sustained this economy and we anticipate that this will continue,”
see… bears have it all wrong… all that saving is not going to help… he says we should be spending more … pardon me while i gag
September 19th, 2008 at 11:15 am
http://www.theglobeandmail.com.....hColumbia/
September 19th, 2008 at 12:29 pm
I posted a couple weeks about some odd price raising in a couple townhouses, in particular, v710116 (now v732147). This dog started at 635,000 then went through multiple small price drops to 594,900 in August before re-listing in September at 659,900. I called WTF and speculated that they were prepping for another drop but wanted it to look bigger… wait for it… tada! Now listed at 549,000.
Nice job trying to fake a 65,000 price drop John Samus (the agent)http://www.johnsamus.com/ I particularly like his line “You never get what you deserve, you get what you negotiate… do not wait to buy. buy then wait”
I’m thinking of setting up a viewing for the place, make him think I’m really serious, eat up a bunch of his time, get the owners antsy, see if he’ll reveal the pricing history, if not, I’ll “discover” it myself and tell him what he can do with his tactics…
September 19th, 2008 at 12:33 pm
Speaking of wasting someones time by requesting showings.
Who better deserves it than some ignorant and arrogant tool who taunted the bears weeks before the market started tanking as bad as the rest of the bubbliest cities in the world?
September 19th, 2008 at 1:39 pm
September 19th, 2008 at 2:20 pm
September 19th, 2008 at 2:49 pm
To all the bulls who say “prices can’t go down because the economy is strong”, I would say “the economy will weaken because the housing market is tanking”.
http://wwwedd.cahwnet.gov/Abou.....200809.pdf
September 19th, 2008 at 3:04 pm
The housing market is not ‘tanking’. It is undergoing a mild correction and will likely level off sometime next year.
The total value of major projects on the books in BC has NEVER been higher. In fact, it continued to grow in the last quarter. Even if some of those projects don’t go ahead, it is still a lot of work on the books. You also need to consider the aging demographics of the construction industry. Unemployment rates in construction can remain stable even in the face of decreasing total employment.
September 19th, 2008 at 3:08 pm
I say throw on more residential construction projects in the lower mainland. More condos. More homes. More townhouses. That pesky law of supply and demand will kick in at some point.
September 19th, 2008 at 3:37 pm
How will it “level off”? Which of the causes of the current price declines will vanish “sometime next year”?
You sound like hot air to me.
September 19th, 2008 at 3:38 pm
September 19th, 2008 at 3:47 pm
Great! I just shored up the economy by booking 16 condo buildings to be built on my block. Magic!
September 19th, 2008 at 3:51 pm
mild being no more than 5%+/- off peak prices (April 2008)
otoh Sept 08 “correction” may be -5% YOY
all by itself….
whistling past the graveyard Dave…..
September 19th, 2008 at 4:01 pm
But, nominal declines need not fall that amount as inflation can increase fundamental values over time. If we assumed 2% inflation per year, then nominal prices could remain at current levels and fundamental values would naturally catch up.
Mr. Market… The law of supply and demand will tell you that lower prices result in lower supply (i.e. less people selling) and lower prices stimulate higher demand (i.e. more people wanting to buy). Thus, the current price declines naturally change the dynamics of supply and demand. No other factors need to be changed. If you look at past housing cycles, you will see that bull markets add growth over a period of 6 to 7 years, are followed by relatively fast (12 to 18 month) corrections and finally by flat markets (~5 years). We are about 5 months into this correction. Thus, the expectation of level prices next year is reasonable when compared to past trends.
September 19th, 2008 at 4:03 pm
“The total value of major projects on the books in BC has NEVER been higher. In fact, it continued to grow in the last quarter.”
In my thinking, that very fact is the single biggest reason why the real estate market in Vancouver is going to collapse so sweetly into its own black hole like a certain 150-year-old Wall Street investment bank.
For about the past five years there has been a mania of contruction in the Lower Mainland which has resulted in our current bubble. Included in the past five years sales has been a certain degree of speculation. Adding thousands of additional housing units onto the pile over the next couple of years sounds to me like a recipe for a collapse in prices.
In the Southern US the oversupply of houses was driven by financially unrealistic credit practices. Here in Vancouver the oversupply looks like it will come from the success of past speculation and the fact that developers working individually in the pursuit of profits will collectively oversupply the market.
September 19th, 2008 at 4:19 pm
The list of major projects is not limited to residential housing construction. It covers all types of projects including industrial, commercial, institutional and government. Have a look at it yourself. It also only includes projects over $15 million, which ignores a huge portion of the construction market (e.g. your plumber).
September 19th, 2008 at 4:27 pm
September 19th, 2008 at 4:27 pm
In just three years, that adds up to the entire population of Port Moody, North Vancouver and Mission combined. That’s a lot of real estate!!!
September 19th, 2008 at 4:37 pm
I don’t know what you are on, but i would like double of that, probably make my dreams sweater and the reality lighter. Maybe the same stuff you’re smoking can be used to buy the 8 houses in one block on the street i am currently renting. I don’t know about the UBC experts you are quoting but one thing for sure is that the school in BC is not that good as the locals believe. You get your own conclusion, but ir won’t be a mild correction. 30% down will look like a breeze 3 years from now, when the bottom will be at aroun 50%
September 19th, 2008 at 4:37 pm
This is anecdotal, but I was recently looking at condos in The Tapestry complex on 12th and Heather in Vancouver. It’s a nice looking building with a great location and the suites have a style reminiscient of mid-century modern. The project completed in February and when I was looking in July there were still tons of units being rented by the speculators that had bought them (and who had taken possession like five months earlier). What was immediately apparent was the fact that the rents did not justify the price of the units. The implied returns suggest that the only justification for owning one - as an investor - is the promise of future capital appreciation. But capital appreciation does not seem to be in the cards. Therefore, it seems to me that the prices have to drop and substantially so in order for the economics to make sense.
It also seems to me that capital is free to move around the globe pretty easily these days. So why invest in a condo in Vancouver with a cap-rate of like “2″ when you could invest elsewhere in Canada, or the U.S. or anywhere else for that matter and make a significantly greater return.
From my own personal experience, anytime people start reciting a mantra of reasons as to why basic economic principles - such as the need to earn an appropriate risk adjusted return - no longer apply it is time to head for the exit.
As more and more investors recognize that they should be hitting the exit attempt to do so then the fun will start. People get just as pessimistic on the way down as they get optimistic on the way up. You’ve heard of irrational exuberance… well, I am looking forward to irrational despondence.
September 19th, 2008 at 4:42 pm
“Most expensive False Creek North condo is the Penthouse at 1000 Beach, now down to $14,800,000 from $18,200,000. Least expensive $334,500 for a 530 sq-ft l bedroom. Too many list price reductions to count!”
September 19th, 2008 at 4:46 pm
September 19th, 2008 at 4:49 pm
Why pay $489,000 when it can be rented for $1550, not only do you save $2,000 per month you avoid a $250,000 haircut.
Also since that building is so heavily speculator owned you have to wonder if the maintenance will be performed, if it isn’t the new home warranty is void!
September 19th, 2008 at 4:50 pm
September 19th, 2008 at 4:56 pm
No Dave is heavily invested in
“W” An intellectual property
you know be bold or move to the burbs…..
with a soft landing and plateauing prices
it is all good!
September 19th, 2008 at 5:04 pm
September 19th, 2008 at 5:20 pm
If you’re going to listen to an economist, why not listen to someone who has actually been correct about the dot-com and RE bubbles? Robert Shiller called both correctly, and says that “Vancouver is the most bubbly city in the world.”
http://www.theglobeandmail.com.....ry=shiller
September 19th, 2008 at 5:23 pm
September 19th, 2008 at 5:24 pm
September 19th, 2008 at 5:27 pm
September 19th, 2008 at 5:45 pm
September 19th, 2008 at 5:45 pm
So if you take american news as an example. The news has a local vested interest to report crap to the people where as say overseas organizations may have the opposite. A similar reasoning can be applied to your local eonomists. Especially because local economists are typically polically motivated.
As this whole thing worsens the media (and dave
lol) will continue to “revise” there negative predictions.
September 19th, 2008 at 6:14 pm
September 19th, 2008 at 6:49 pm
In just three years, that adds up to the entire population of Port Moody, North Vancouver and Mission combined. That’s a lot of real estate!!!”
And they’ll all be rich asians in search of the best cafes downtown!!!! woo hoo!!!!
September 19th, 2008 at 7:00 pm
Oh wait - there is! It’s called Real Estate… and I am.
September 19th, 2008 at 7:20 pm
He does research that isn’t funded by local developers.
September 19th, 2008 at 7:31 pm
Actually, the population of North Van is over 120,000…. so that annual increase in population is about a quarter of the population of North Van alone…. you’re a tool.
September 19th, 2008 at 7:42 pm
September 19th, 2008 at 7:47 pm
http://en.wikipedia.org/wiki/N....._Columbia_(city)
September 19th, 2008 at 7:58 pm
http://www.suntaijiquan.com/Ta.....om_Day.JPG
September 19th, 2008 at 7:59 pm
September 19th, 2008 at 8:36 pm
and the district?
September 19th, 2008 at 8:43 pm
38Anonymous,
He is not saying it anymore because we don’t make it anymore in vancouver,stop calling shiller for help,he is stuned by threats,Charlie,Katrina,and now IKE jolt him big time.
$6 billion storm? Ike delivers economic punch the bang hit *Lehman* we don’t make disasters in Vancouver that’s how professor learn’t his lesson.
22 oziijjiizo,
there was almost 18% month over month drop In port moddy area because of extreme acceleration upward in the past but over all gvrd specially vancouver droping nothing except listings.
Crabman,
If you need a job go anywhere you will find this notice everywhere,help wanted,now hiring,boom is over still hiring?why?.and most of those notices are not for construction industries isn’t it funny,Crabman?
September 19th, 2008 at 9:12 pm
I am not a retarded warehouse worker who bought three properties I am just a bored 19 year old female and I am so ugly I can’t get a date so I troll with the 4chan crew.
what’s 4chan? well we go to websites and ask or say really dumb things to inflame the blowhards in the group.
I know the market is overvalued byt a ratio of three to one, do you really think I’m so dumb and would consider homeless people to raise my children? It’s true I have sex with homeless men but that is because I am so ugly I cannot do any better, hey you have to admit that the part about thinking that we were running out of land was good wasn’t it?? I saw that in a newspaper clipping from the last bubble in 1981.
September 19th, 2008 at 9:16 pm
Can you provide a reference pls?
September 19th, 2008 at 9:30 pm
Care to supply a picture?
I’m really curious just how ugly you are…
September 19th, 2008 at 9:41 pm
September 19th, 2008 at 10:07 pm
Dave doesn’t need references, he just goes with his gut. Truthiness is his thing.
September 19th, 2008 at 10:12 pm
1) Prices will not fall until after summer.
Wrong.
2) Prices will not fall more than 5%
Already past 5%
3) Inventory will peak in summer.
Still going up!
4) Inventory at the end of september will be lower than in mid June (19,500 or something like that).
20,578 and rising, we’d need to lose a huge amount of listings at the end of the month for him to be even close.
So Dave, you’re quite the authority on the subject aren’t you? Why should we listen to the head of the Yale economics department and the top bubble economist in the world when we’ve got Dave?
September 19th, 2008 at 10:30 pm
September 19th, 2008 at 5:27 pm
Has Schiller ever been to Vancouver? What makes him the authority on our local market as opposed to the local economists who have followed and lived in our market for years?”
Why don’t you go fuck yourself?Or let the realtors fuck you?
You whore!
September 19th, 2008 at 10:39 pm