"Across B.C., the average MLS home price in September was down 7.4 per cent to $412,149 compared with the same month a year ago, the B.C. Real Estate Association also reported Wednesday. "

Is this the gentle dip that will quickly be preceeded by the next leg up?

I wonder how many mortgages were backed by equity on parents' RE or other assets and how that's going to shake out, especially as a lot of those parents are set to retire… well, maybe not retire anymore. Any insight?

The issue here is not downside risk, which is a function of the uncertainty of future earnings (rents in the case of RE), but detachment from fundamental value, which makes a fall in prices more certain the larger it gets.

An asset with an almost certain downside in price is not risky, because you can make money shorting it with a low level of risk. Risk has to be equal on both the long and short side. Unfortunately you cannot short Vancouver RE.

RE in a one-industry town is risky, because there is a real risk that local incomes, and thus rents, may be significantly reduced.

If an investment is guaranteed to return somewhere between 0.1% and 100%, it has 0 risk.

No it doesn't, because you can get more than .1% guaranteed from a risk-free investment (government bonds). If the lower bound of return on an investment is lower than what you can get from a risk-free investment, it is risky by definition.

The correction is inevitable and the upcoming post mortems will incorrectly blame the crash on coincidental events.

Yes, because then involved parties can claim that they were blindsided by unforeseeable events and thus are not greedy idiots after all.

The truth is otherwise.

Oct. 14 (Bloomberg) — Bond investors from Tokyo to New York are pushing 30-year Treasury yields to record lows in a bet that the financial market meltdown will turn inflation into deflation.

More and more talk that deflation might be a real possibility. I don't know what it means for sure. I took a savage bite this morning, lost all my gains from last week, but still sitting pretty over a month. I'm staying short, we still have a recession to admit to before a bottom is possible.

"It could be argued that the sub-prime crisis triggered the turning of the Vancouver real estate market"

All events we are now witnessing only serve to determine the speed at which things correct. The correction is inevitable and the upcoming post mortems will incorrectly blame the crash on coincidental events. I am pretty sure MickeyFinn understands this though.

Local quoted economists and the other assorted "experts" do not understand this one bit or are lying to the camera. I'm not sure who's worse, the idiot or the liar.

Even if (just for fun) we were wrong, there’s still a reasonable chance that we’re right, which is inherently risk.

Risk means uncertainty of outcome. Investing in Vancouver RE is actually less risky today than in, say, 2005. At that time there was a great deal less certainty as to whether the market would go up, go down, or stay the same. Today all indicators point down.

Risk is not likelihood of loss, it's uncertainty of returns. An investment which may yield a total return of from .1% to 100% is very risky, even though there may be no possibility of loss.

Dave/Rob

Speculating is when one can’t be sure of the outcome.

Where is the uncertainly?

The thousands and thousands of housing units under construction, the record high listings, the 50%or plus drop in sales, the steady price declines, aren’t subjective interpretations, they are facts.

There are three stages to any market correction:

1) the calamity that triggers it,

What was the trigger that started the US market decline in San Diego in 2005 or the decline in Alberta in 2007?

If prices exceed levels justified by rents and incomes, more housing will be built than people are willing and able to buy. This imbalance of supply and demand will cause the market to turn without any external stimulus. Bubble markets are pyramid schemes. There are only so many greater fools and they have to run out eventually.

People buying real estate right now must be retarded! No upside gain in the near future with lots for downside risk. Talk about stupid people.

Here is my opinion – I would strongly recommend that you think twice before purchasing a Millenium developed unit….my colleague purchased one, and has had nothing but trouble. Metrocan construction will not, I repeat will not fix your deficiencies, and have cut so many corners, there are problems with new units….and Metrocan is the same contractor used for the olympic village. If you see the millenium/metrocan partnership, then run the other way…

What am I talking about, well, my friends unit wasn’t properly plumbed, so feces and urine would leak from the top unit down to his living room. Metrocan’s response: This is normal. Millenium, What goes around, comes around!

Realize I did that I am biggest dumb and biggest stupid I was thinking price go up when really price go down and I stupidest dumbest for thinking you nutslaps don't know but nutslaps more smart than me I am biggest dumb.

I make big joke that north van realtor number wrong when price go down 13% and now big embarassed and biggest dumb I am.

“As regards the Vancouver real estate market bubble, we are still in the calamity stage. The global financial crisis has shocked the system and is just “one of the triggers” that has sent Vancouver real estate into it’s current downward spiral and you are fooling yourself if you think we’ve seen all the pain of the financial global crisis” But these two scholarly impartial experts disagree: http://www.reportonbusiness.com/servlet/story/RTG… “The U.S. housing collapse was a crisis brought on by overuse of subprime mortgages. Thus, Mr. Tal said, it's important to remember that its peak risky mortgages made up 5 per cent of the market in Canada, compared with 33 per cent in the U.S.” Don’t worry it’s different this time, here: “At 70 per cent, the equity Canadians have in their homes has also been increasing over the past decade, while in… Read more »