Vancouver Price Drop Shopping Spree!!

Price drop shopping spree!

Yep, Vancouver house prices are dropping.  The REBGV benchmark price is down about 4 percent since May 2008.  I guess that means we only need another few percent to meet ‘equilibrium’ according to this recent Sauder study on overpriced Canadian real estate.

Interestingly enough that Sauder study compares asking rents from Craigslist, so another option to reach ‘equilibrium’ would be just to post a bunch of much higher asking rents on Craigslist. That way we wouldn’t have to deal with the indignity of dropping house prices.

In the meanwhile, potential first time home buyers watch prices drop and hope for affordability.

Got a better idea of what you could buy with that money?  Leave a comment below!

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greed
greed
12 years ago

Thanks Michael Randallbard. Great article. Took some time to digest.

greed
greed
12 years ago

Thanks Stagnate. So would you hold gold stocks or rather buys a Downtown Vancouver condo?

Carioca Canuck
Carioca Canuck
12 years ago

Tsur what…..

That still does not answer my question.

Anonymous
Anonymous
12 years ago

The Pope,

It sounds like your site is crashed again but not yet the market,comment sections are not opening.

with best regard from enternal "tu2" magic triple quad hard drive.

patriotz
patriotz
12 years ago

Also, your second link is not an Economist article.

I know it's not. It's just a citation. The article is pay-per-view at the Economist website. But I downloaded a copy while it was free.

I really don't know much about natural gas or other commodities. Really all I claim to know is that the net rental yield for RE has to be above the cost of borrowing money in the long run. That's all you need to know about this bubble.

arit
12 years ago

Anonymous,

Why are you anonymous?

How can we associate what you are saying to anything else you have said or will say? How should I take your comment?

Regards,

arit

alexcanuck
alexcanuck
12 years ago

neither really warned That's exactly what I mean. Yes, in retrospect you can pull out an article or two that DOES warn, but the overall tone was very complacent. The occasional article that DID ring alarm bells seemed to really stand out for me for me, but I almost put that down to my personal bias. Almost, but not quite, for which I'm relieved, gratified and in a much better financial position than if I wasn't such a pessimist. "Economic Miracle" and all that just didn't sit right with me! Also, your second link is not an Economist article. BTW, I do respect and value your opinion, Patriotz. Don't take this as criticism. I am generally in broad agreement with you. Now that I've buttered you up a bit…. Do you think natural gas is worth going strongly bullish on?… Read more »

Anonymous
Anonymous
12 years ago

Arit:

You're starting to talk like Rob Chipman! 🙂

RVW_0824
RVW_0824
12 years ago

Aleks says: "The headline is correct, though, the study was flawed. No way does Regina have a bigger drop, in percentage or actual dollars, than Vancouver. Whether the realtors are right that their market isn’t as inflated as reported, I have no idea. It’s possible that a flawed methodology like the one used could end up with results that are too high in some cases and too low in others." The UBC reports discounts each city differently. It takes expenses such as maintenance fees, etc. as a % of the purchase price. Given the historically high nature of these expenses as a % of historical prices – the Vancouver %'s are skewed to the low side and historically cheaper cities are skewed to the high side. So in Vancouver he starts with a low cost of capital % to use… Read more »

Anonymous
Anonymous
12 years ago

"BTW Friends of a cousin recently bought a house in Burnaby at $150K less than asking because the (desperate) seller had upgraded and was stuck with 2 mortgages longer than they had expected. Classic." 2 mortgages? Wow.. some are really expecting that others are going to make them rich. Being a cheapskate and frugalist to madness, I spotted this bubble 7 years ago. Not from having a degree in economics, but common sense. I questioned as to why people were expecting so much, I questioned why people were willing to pay. I asked around and asked who is making more money, no body did or knew anybody who got raises, only more expenses. I knew it did not add up. The papers were saying one thing, and for each month that went by, the news paper world segregated even further… Read more »

Tsuriel
Tsuriel
12 years ago

http://www.merriam-webster.com/dictionary/flint

with all due respect, mr. arit, flint is rock so you are splitting hairs with yourself.

That is why Freddie Flintstone is named Freddie Flintstone, get it? He worked in the quarry! 🙂

http://en.wikipedia.org/wiki/The_Flintstones

Well, you learn something new everyday!!! But don't forget about the God part! It is important to Tsuriel's name. Of course no God-fearing individual would just name their kid "rock", or "flint" to you. It has to have a greater meaning.

Oh, by the way, what does Arit mean?

arit
12 years ago

Tsuriel,

We were discussing Tsur, not Tsuriel. Tsur means flint, as in flintstone. Tsuriel means "My flint is God", literally.

The website you mention is slightly wrong, as it says

my rock (צוּר, Tzur)".

Where it should be flint.

Regards,

arit

patriotz
patriotz
12 years ago

Oh BTW, I don't believe that there is a "credit crunch" in the US. If credit were really hard to get, interest rates would be higher. not at near-historic lows. I think that's pretty self-evident.

What has happened is that lending standards have returned to some degree of sanity, which looks like a "crunch" compared to no standards at all.

patriotz
patriotz
12 years ago

I must say, I’ve read both the NYT and Economist for a long time, and neither really warned of the credit crunch or the property bubble. Wrong on both counts: Krugman, That Hissing Sound, NYT, August 8, 2005 "Meanwhile, the U.S. economy has become deeply dependent on the housing bubble. The economic recovery since 2001 has been disappointing in many ways, but it wouldn't have happened at all without soaring spending on residential construction, plus a surge in consumer spending largely based on mortgage refinancing. Did I mention that the personal savings rate has fallen to zero? Now we're starting to hear a hissing sound, as the air begins to leak out of the bubble. And everyone – not just those who own Zoned Zone real estate – should be worried." Economist: In come the waves, Jun 16th 2005 "The… Read more »

Tsuriel
Tsuriel
12 years ago

http://www.hebrewonline.com/hebrew_names/name.asp

Tsuriel mean God is my rock. What the h*** are you talking about? Freddie Flintstone!

jesse
jesse
12 years ago

arit is right. Tsur is short for Tsuriel and it is his middle name. His works stand for what they are, regardless of his name.

arit
12 years ago

Carioca Canuck Says:

September 10th, 2008 at 3:20 pm

Who on earth would name their child “Tsur” ? Genghis Khan maybe…….?

Actually it's a Hebrew name, means "Flintstone".

Everyday you learn something new.

Regards

arit

Alm
Alm
12 years ago

>>RVW_0824 Says:"Vancouver’s real estate market is over valued by 30% to 50% depending on location and type (single family, multi-family, downtown condo, etc.). Here is the link to his study. http://cuer.sauder.ubc.ca/download/rese … ercost.pdf" ———————– Didn't have a patience to read the whole article. But he does suggest 7-11% price drop for Vancouver market to be in equilibrium with rent. I understand there are several overlapping trends. 1) Pre-construction and other speculators – those that don't plan to invest for longer than 2 years. They will panic and trigger the sale-out, but not all of them will – and not in all the districts they represent a majority. People have accumulated a lot of cash lately in realtor's and development business or upon sale of their Asian or East-European condo (where prices shot up waaay more then in Vancouver in the… Read more »

Dosh
Dosh
12 years ago

Satv { 05.23.08 at 9:27 pm }

Do we have that mess of subprime here?do we have threat of terrorism here?do we have mass destruction from hurricanes?do we have BUSH here?

Dosh
Dosh
12 years ago

#

19

Dosh Says:

February 1st, 2008 at 2:27 pm

Well somebodies buying hughz – why does it matter where they come from? Maybe 25% of buyers are Albertans, maybe 50% is European. Who knows how accurate any of those numbers are? The demand is there, thats whats important.

alexcanuck
alexcanuck
12 years ago

http://tinyurl.com/5f5gqu "China has joined the United States, Britain, Spain and others on the list of nations suffering a real estate decline" NYT article. I must say, I've read both the NYT and Economist for a long time, and neither really warned of the credit crunch or the property bubble. They would mention the fears, and then get all reassuring and calm. I would get all flustered with my (un)common sense, gut feeling reaction to the ever-increasing debt loads, both consumer and corporate, and they would say not to worry, it's different this time. Somehow that never sat too well with me. They have both lost a LOT of credibility in my mind. Last fall I lost a bit thinking the Canadian markets would be hit harder, but it's all come back and more, I've ridden oil down from $142 to… Read more »

paulb
12 years ago

Where is the 2000 gold Mike?

Michael Randallbard
12 years ago

can someone explain the recent strength in the US dollar.

Maverick McCain" and the Resurrection of the US$

http://www.financialsense.com/Market/daily/tuesda

jrochest
jrochest
12 years ago

Oh, the Regina response is nothing. You guys should have seen the tempest in the Saskatoon media over the Merrill Lynch report, back in August. It was declared to be OVERWHELMINGLY wrong. Utterly utterly wrong wrong wrong wronger than wrong. By everyone: print, radio, TV. And those 1700+ properties on the market? That's just people testing the waters, they don't really mean to sell. And the fact that there were only 224 sales in August, a 44% drop from last August and the worst sales for August in a decade? It's just been a little rainy. And the fact that housing starts are falling? see above. And the fact that housing prices are falling? Seasonality! After all, prices haven't fallen in Calgary or Edmonton! They're stablizing! We have such a great economy! Everyone's moving to Saskatchewan! Whistlin' in the dark,… Read more »

condohype
12 years ago

The comedy is in the dissing, not whether the report is correct. I'm amused by the public trashing.