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October 4th, 2008 at 11:18 pm
Bob Rennie is quoted in today’s Sun…
”That’s it. For a city like ours. . . We’re at a time when everybody is looking for fundamentals and nobody has better fundamentals than downtown, for the investor or the homeowner.”
God, this guy is the RE Energizer Bunny … just keeps on spinning and spinning and spinning…
People acutally listen to this nob :O
October 4th, 2008 at 11:14 pm
Rennie doesn’t “walk the talk”… he “stumbles the mumble”
He’s just like any good marketer. In politics it’s called spin.
October 4th, 2008 at 11:07 pm
It is a simple calculation of prices vs. rent. Where do you think is stronger?
October 4th, 2008 at 10:27 pm
I look forward to hearing this one.
somehow I suspect that’s one analysis that won’t be forthcoming
October 4th, 2008 at 8:40 pm
show me the money
Mr.Rennie walks the talk
he drinks the kool aid
if he said anything else
all hell would break loose
hoist on his own petard…..
October 4th, 2008 at 8:05 pm
downtown is the strongest fundamentals
Seriously?! Explain. Please.
Use numbers and stuff.
I look forward to hearing this one.
October 4th, 2008 at 7:38 pm
“Wrong fundamentals, Bob. Downtown has close to the worst fundamentals going.”
Actually downtown is the strongest fundamentals in the lower mainland no question.
October 4th, 2008 at 5:46 pm
speaking of downtown, will be interesting to see how sales pan out for the richards development (went on sale today). seems the aquilini’s are a bit late to the pre-sale party. at least the canucks are looking good, although i could see a recession putting some bite in canuck ticket demand.
October 4th, 2008 at 2:48 pm
>Vansanity Says:
>
>Along the same thought… the other day while on my way
>home, I realized that there are a lot of places in
>Vancouver that I could live in, but that I would never
>want to buy in.
You have around 20K selection from GVREB to choose from. Add to that the roughly 12K in Fraser Valley, and that makes 32K units in total – quite a number of selection for you to pick from
October 4th, 2008 at 2:21 pm
“nobody has better fundamentals than downtown, for the investor or the homeowner”
Wrong fundamentals, Bob. Downtown has close to the worst fundamentals going.
October 4th, 2008 at 2:19 pm
Bob Rennie is a sales guy, of course he is going to say the ‘fundamentals’ are good…what fundamentals is he talking about? Here are my fundamentals…what happens to the 30,000 construction jobs when the cranes come down…construction was our economy for the last 5 years and it is now at the end of the cycle…delfation and dark times ahead.
October 4th, 2008 at 1:52 pm
Bob Rennie is quoted in today’s Sun…
”That’s it. For a city like ours. . . We’re at a time when everybody is looking for fundamentals and nobody has better fundamentals than downtown, for the investor or the homeowner.”
http://www.canada.com/vancouve.....e06bf4e85d
October 4th, 2008 at 1:37 pm
Two words: “Months of Inventory”
Okay, maybe that’s three words.
Anyways, I was just checking out the “Listed versus Sold” graphs that have just been updated on Realtylink.org and the picture tells the tale (I.e. the September data is now included). I would encourage you to take a look for yourself.
For detached homes in West Vancouver it appears that there is something like 30 months inventory. For the West Side it is over 20 months. That’s a lot of inventory.
What also stands out is the stark difference between September 2008 and September 2007… active listings have doubled and sales have plummeted. Speaking of “plummeted…” that is a word that will be getting more use amongst Vancouver real estate agents in the near future.
October 4th, 2008 at 1:20 pm
Warren Buffett is investing in Goldman Sachs and General Electric.
ol’ Warren got a call from GE and decided within
10 seconds to invest $3 billion in GE w/o
referring to his board of directors……
I take longer to decide what kind of pizza I want for delivery…..
October 4th, 2008 at 1:05 pm
What happened? The $700b rescue plan was finally passed and the stock market fell!
As it has been pointed out, the bailout rescues the financial sector but foreclosures continue. Only a rescue of homeowners will slow the economic decline.
Moreover, the details of the bailout have not been unveiled. What price is the government paying for the toxic mortgages? Apparently, the money may not be spent till January!
Note that oil and gold are down. So, the financial crisis is abating. However, confidence in the credit markets has to be restored before a full recovery is possible.
As I pointed out, there will still be a recession to reckon with after the financial crisis. We have yet to see the cycle bottom.
Interestingly, Warren Buffett is investing in Goldman Sachs and General Electric. I posed this question weeks ago.
‘You will ask, ”You’re the guy who said that the trend is your friend. Why are you stock picking?”.’
Have a good weekend everyone.
October 4th, 2008 at 12:53 pm
What is the average IQ of people who get drawn into this BS?
October 4th, 2008 at 12:20 pm
“IN 60 YEARS WHEN THE NEXT BUBBLE APPEARS”
Make it 20…the public has a short memory.
October 4th, 2008 at 11:35 am
FINALLY, awareness of that inevitable recession seems to be kicking in…hard to believe it took so long.
Vancouver RE price drops will resemble an avalanche as the last few buyers get scared out.
October 4th, 2008 at 10:59 am
“Let’s not forget one thing: not everyone may have to sell, but nobody ever has to buy.”
Well said.
Along the same thought… the other day while on my way home, I realized that there are a lot of places in Vancouver that I could live in, but that I would never want to buy in. Where am at, for example, cheap, convenient, close to d/t, walking distance to the drive, etc. I saw a house for sale (8 months on the market now, btw) and asked myself, would I ever buy it? The answer was no, the thought of buying a home, for me, connects me to the area beyond what I’m comfortable with. Maybe I just take buying a home too seriously…
October 4th, 2008 at 10:38 am
I work for a large company and we’ve just been sent out a mass memo reminding us to use our corporate charge cards responsibly and to keep our accounts current. I’m thinking Amex (who holds the account) is starting to get a little nervous…
So am I–one of my coworkers is on a long-running project for the unit of Lehman Bros that was bought out by Barclays. Christ I hope they don’t start cutting out the IT spending along with the layoffs of the acquired employees.
That said, I saw an ad for getting my realtor’s license on a telephone poll. In two weeks, I could be well on my way to becoming the next Fay Leung. (except I’m not a woman–or Chinese; but goddamn I love crazy hats)
October 4th, 2008 at 9:22 am
Let’s not forget one thing: not everyone may have to sell, but nobody ever has to buy.
October 4th, 2008 at 4:20 am
There has been talk around local blogs about discretionary versus non-discretionary sellers and how much inventory there “really” is, the theory being that most people trying to sell are doing so on a lark but will revert to holding when they don’t get their price.
This person even have a brain? Its like saying buyers will not buy until selling price comes down. Buyers will just hold their bid low. Econ 100 anyone?
October 4th, 2008 at 2:01 am
The next 20 years will not be like the last 20 years.
It will be better.
NO MORE HUMMERS,OR TRADING UP THE BMW’S EVERY SECOND YEAR. NO MORE THINKING YOUR RICH WHEN YOU ARE NOT. NO MORE CELL PHONES WITH 50,000 OPTIONS JUST BECAUSE THEY ARE ARE THE LATEST TOY. YOU WILL SAVE YOUR MONEY BEFORE YOU BUY SOMETHING AND THINK TWICE BEFORE YOU NEED IT. NO MORE $7 COFFEE’S AND $200 DINNERS.
IN 60 YEARS WHEN THE NEXT BUBBLE APPEARS, IF YOU ARE STILL ALIVE, YOU WILL TELL YOUR GRANDCHILDREN TO SAVE THEIR MONEY.
THEY WILL TELL YOU THAT YOU’RE AN OLD FOOL THAT HAS NO CLUE.
October 3rd, 2008 at 11:55 pm
“I know someone who bought a couple years ago and sold this year. They are being trumpeted by some as geniuses for this move. They paid realtor, lawyer, etc.. and had pocketed $25K! Move over Trump! YET… “
These people should read Chapter 33, “Sixth Century Political Economy” of Mark Twain’s “A Connecticut Yankee in King Arthur’s Court” for a no-frills course on net income fundamentals.
October 3rd, 2008 at 11:53 pm
Take it for what its worth. In my circle, the perception of a lot of people I know, mostly connected to construction, has changed.
…t’ain’t the same no more…
….paradigm shift anybody?
October 3rd, 2008 at 11:32 pm
Through my work I have noticed a slow down with suppliers to construction developers. I have friends that are now worried about a slowdown, worried that their companies may be shutting down in 2009 because they don’t have further projects to keep them busy. They are genuinely scared.
I’ve also seen some developers getting anxious over their security deposits on their warranties. Some of you know that the legislated 2-5-10 warranty requires a security deposit, normally through a letter of credit. Just a different need from some developers to get their money back, nowadays, compared to the past few years where there was no such urgency.
Take it for what its worth. In my circle, the perception of a lot of people I know, mostly connected to construction, has changed. Where once there was a sense of never ending projects, today, there is worry about their job security.
October 3rd, 2008 at 11:21 pm
Bears don’t own real estate and instead rent and “invest” in the stock market
It’s been pointed out before but, er, bears repeating.
Nobody is a “bear” or a “bull”. People are only bearish or bullish about particular assets at a particular time. You are bullish about the assets you hold, and bearish about the assets you don’t.
An RE bear can be a stock market bull OR bear.
Since prices are relative, SOME asset has to be the right one to hold going forward. If the price of everything goes down. that’s cash.
I actually enjoy the straw bear arguments as it shows that the RE bulls know that they have lost the real debate and are trying to invent spurious ones.
October 3rd, 2008 at 10:31 pm
quoting john:
Fact #1) Bears don’t own real estate and instead rent and “invest” in the stock market which is currently down about 10% on the year at least. Looks like this was a poor choice.
What an outrageous generalization.
That’s like me saying Bulls take an advance on their five credit cards to purchase pre-sales in Quattro.
I started becoming bearish on Vancouver at the end of last year. But I do own real estate in some smaller towns out east. Appreciation is around inflation, but it’s steady and the tenants pay the rent and then some.
October 3rd, 2008 at 10:28 pm
Here’s what happens when you stretch too far in good times and make assumptions things won’t change. A story of foreclosure in Oregon:
http://www.getrichslowly.org/b.....reclosure/
October 3rd, 2008 at 9:01 pm
“can I just open a second ING account attached to the first one?”
“Any foot-dragging by CDIC on deposit holders of a failed bank would bring on a run on all other banks.”
I still see a benifit in having money spread out amongst different banks. You simply never know, if all your money is in ING and it goes down you will be at the mercy of the government of the day. Sure I agree that you are 99.9% likly to get all your money back in a few days but you may need it that day. Given that most accounts with that sort of balance are free I would spread it around. Personally I have 3 accounts all at different banks all well under 100k sadly.
October 3rd, 2008 at 8:32 pm
If one of your banks fails it’s quite likely that it will take most of a year for you to get your money back,
Most strongly disagree. Any foot-dragging by CDIC on deposit holders of a failed bank would bring on a run on all other banks.
If and when any failures occur in Canada, the model followed will be that of FDIC (small US banks fail regularly) where the bank will stay open under trusteeship or a quick takeover by another bank and all deposits will be honoured as usual.
If your response is “where will they get the money”, well they don’t call it fiat money for nothing.
October 3rd, 2008 at 7:08 pm
Alexcanuck, your comment was hung up in the spam que, I’m not sure why probably something to do with the link. If it happens again you could try running it through tinyurl.
October 3rd, 2008 at 7:01 pm
Read this. Carefully and slowly. Now come back and say your not a bit more scared.
I’ve been following this persons writings, he is very well-informed and connected. I believe him.
http://londonbanker.blogspot.c.....n-for.html
October 3rd, 2008 at 5:59 pm
The following post seems odd
“I know someone who bought a couple years ago and sold this year. They are being trumpeted by some as geniuses for this move. They paid realtor, lawyer, etc.. and had pocketed $25K! Move over Trump! YET… When I asked how much interest they had incurred during the time they lived there, we calculated their costs to be around $45K. Now… I’m not certain but a net loss of $20K and people think they have been wise, even my worst investments over the last few years didn’t lose anywhere near that amount… maybe $2K at the most! ”
So even in that scenario that you say they lost $20K, they had a place to live for those 2 years. The rent someone would’ve paid in 24months would be more then that.
October 3rd, 2008 at 5:18 pm
Has anyone tried the new mls.ca site? Overall it’s a HUGE improvement for what I want to use it for. I hope they keep improving it.
Still doesn’t justify high commissions though
October 3rd, 2008 at 5:09 pm
Wow, listening to John is almost as good as listening to David Lereah.
No, it’s better. And John would never quote the articles you quoted. Doom and gloom! We need cheer instead. Com’on John, post some good news for us all.
October 3rd, 2008 at 5:02 pm
Partisan Spectator, that sounds like excellent financial advice. I’m off to invest in beer. Happy weekend everyone!
October 3rd, 2008 at 4:53 pm
If you invested $1000 in FNM a year ago and sold today, the return would be $20.29.
Should you invested the same $1000 in a good beer (say $4 a bottle) and recycled all bottles, the return would be solid $25.
Happy weekend and reasonable investments to all
October 3rd, 2008 at 4:37 pm
I know someone who bought a couple years ago and sold this year. They are being trumpeted by some as geniuses for this move. They paid realtor, lawyer, etc.. and had pocketed $25K! Move over Trump! YET… When I asked how much interest they had incurred during the time they lived there, we calculated their costs to be around $45K. Now… I’m not certain but a net loss of $20K and people think they have been wise, even my worst investments over the last few years didn’t lose anywhere near that amount… maybe $2K at the most!
October 3rd, 2008 at 4:29 pm
Can the bailout work? Fat chance
It should be seen in the context of a decisive, coordinated effort by governments worldwide to manipulate stock markets higher by every means possible without regard to such niceties as fundamentals, the rights of shareholders or the laws of financial gravity.
http://articles.moneycentral.m.....hance.aspx
October 3rd, 2008 at 4:22 pm
Mickeyfinn, Another aggravating factor that caused those houses to be dumped (Granville to Arbutus particularly) was the change to how grow ops in rentals were treated.
There were quite a few Hong Kong owned rentals that ended up being sold in 99/00 because insurance started to exclude the damage and the city made the owners pay the cleanup costs. it seems trivial but it was the straw that broke the camels back.
It was a perfect storm but it’s going to look minor compared to what’s happening now!
Maybe the pink mcmansions around King Ed and Arbutus will go for $600k again??
October 3rd, 2008 at 4:17 pm
John: you forgot one more fact. Canada will be insulated from the rest of the world’s RE bust because we have oil, and that is why Re in Alberta is still appreciating double digit.
October 3rd, 2008 at 3:59 pm
I’M GLAD I SOLD WHEN I DID, I MADE OUT LIKE A BANDIT! LOL.
October 3rd, 2008 at 3:58 pm
Patriotz et al said, “the theory being that most people trying to sell are doing so on a lark but will revert to holding when they don’t get their price.”
Okay, I know I have been harping on this but I have pretty solid evidence that significant amounts of Vancouver real estate is owned by non-resident investors. A large segment of that is Chinese, Taiwanese, Korean etc. And again, you may be getting tired of me saying this but the Asian economies are being hit right now just like the rest of the world and their stock markets are down significantly from their highs (in fact, the Shanghai index has dropped the most of any major index and is off something like 70% from its highs.).
For me, this spells a true tipping point… it is this kind of investment real estate that could end-up being sold at “any price.” And as I previously mentioned, back in the winter of 1998/1999 some of the killer deals were had at the expense of speculators/investors who were “pinched” by the drop in the Hong Kong stock market in the fall of 1998.
In January 1999 – 1149 Connaught Drive sold for $540k… the tax assessment was like $900k and the asking price had been $880k
Also in early 1999 – 5809 Athlone Street sold for $588k… the tax assessment was also over $900k and the vendor had dropped his asking price multiple times within a matter of weeks as he tried to press for a sale.
I know because I was trying to bottom-feed on both of those places… I just didn’t have enough coin to end-up as the winning bidder.
Both of those are nice Shaughnessy addresses… and I believe it can happen again, albeit not at those prices but at perhaps 50% off from the highs we have just seen in the past year.
October 3rd, 2008 at 3:53 pm
23 Scullboy Says:
December 1st, 2007 at 2:36 pm
Satv:
You know the old saying: The game’s up when shoe shine boys/cab drivers are giving you tips.
I mean it’s true. At that point the wealthy (developers, banks) have collected their “bets” (multiple hundreds of thousands of dollars).
So then, the banks have a commitment from the lower classes to pay a set amount on a certain asset till the end of time.
The asset then loses value, till it’s worth oh… say half what the sucker paid for it.
Who comes out ahead?
Well the banks keep getting their mortgage payments, which are outrageously high.
the developer got his money, so he walks away ahead of the game.
However, the “investor” is left holding the bag. Yeah he’s got his condo….. but he paid twice as much as he can get for it now.
This leaves him with 2 choices:
1) Sell it at a loss and spend the rest of his life making up the difference.
2) Hanging on to it, which is basically selling his labour to the bank.
To put this another way: If those waiters and drapers are smarter then we are, why are the spending their lives serving food or measuring drapes?
I mean not to toot my own horn dude but I have a pretty respectable resume. My bank exec buddy has an even more impressive resume.
so joke number three is while window dressers and waiters are buying at the top of the market, my bank exec friend is saying “these people are going to get screwed”.
I think I’ll go with his advice. If I need to know whether to serve guests from the left or right, I’ll ask a waiter. If I need to know how to hang a window treatment, I’ll ask a draper.
Current score: 0
October 3rd, 2008 at 3:39 pm
John, 10% drop in the market, assuming you are long, well that sucks but at least you can cash out at any time and accept your losses. 10% down in real estate, well, one word: leverage. That 10% loss doesn’t come off the mortgage and if you want to get out fast you are going to have to drop a lot more than your neighbors.
I sold my townhouse in March 2007 (took 9 months on the market). The $/sqft I sold at was $869. Average listing for townhouses in the area is now $830/sqft, average selling is even lower. My place was 1897 sqft so that means my selling price today (assuming I could sell at average listing) is $74K lower. Taking the proceeds and putting it in a mix of high and low risk investments, only the high risk investments have dropped (down $30K) but the low risk have actually provided me with about $40K per year. So, doing the math: I have earned 60K less 30K capital loss for net $30K on top of the proceeds of my sale. Had I held on, I would have $74K + $30K or $104K less cash in the bank then I have now. I’m not even looking at the difference between my $2K/month rent today vs my $3K/month mortgage + $685/month strata fee.
Hmmm, was I dumb to sell?
October 3rd, 2008 at 3:27 pm
The MSM coverage of YOY decline is another major milestone. There probably are a few oblivious individuals who haven’t realized that the gig is up, but their numbers are dwindling FAST.
What do you guys think will happen to demand (and hence sales) next month (sales over the next few weeks have already occured and are just waiting for removal of subjects).
My guess is an even sharper drop in YOY sales, perhaps 60%. I mean who in their right mind would stretch affordability to this degree in a declining market? Only somebody who REALLY wants to own NOW, or who simply doesn’t care about money. Expect MOI to go to the moon at end of November. 18 MOI+ me thinks.
October 3rd, 2008 at 3:26 pm
BBY
Don’t worry that much (or worry, but for different reasons). If one of your banks fails it’s quite likely that it will take most of a year for you to get your money back, if not longer, in that time the other banks should have collapsed or not depending on their merits. Any surviving banks at that point are probably safe.
October 3rd, 2008 at 3:23 pm
“There are many stocks still making money”
Yeah the stock that paid a yield of 5% then drops 10% in value and still pays 5%. Sounds like a great investment.
October 3rd, 2008 at 3:12 pm
Why not short the market? So many people I know have been short all year and making bundles of money.