Friday Free-for-all!
Its time for our regular end of the week news round-up and open topic discussion. Here are a few stories I’ve noticed lately to kick off the discussion:
-Greater Vancouver average house price drops 8% from 2007
-Canadian house prices down, blame British Columbia
-Infinity Surrey condo tower: Anyone got $100 million?
-Victoria: development halts at $1.4 billion cappela condos
-Kelowna: 21 story condo development grinds to a halt
-angry condo owners seek stronger protection
-Realtors to host grow-op meeting
-The end is here for 40 year mortgages
-banks push locked-in mortgages
-CMHC buys $5 billion worth of mortgages from banks
-Conference Board of Canada: No recession in Canada
-Bank of Montreal: Canada can not avoid recession & deficit
-Vanoc: $48 million deficit for 2008
-Japanese shares market drops 11.4%
-Construction cranes nearly extinct in Miami
-Paulson: regulation bad! er.. regulation good!
Phew! So how’s everyone doing out there? Is it time to panic? Time to buy? Time to hide under the covers with your fingers in your ears? What are you seeing out there? Post your news, links and anecdotes here and have a great relaxing non-panic filled weekend!
UPDATE: The CBC Early Edition is putting together a story for Monday morning and would like to talk to anyone who invested in a development and is trying to get their deposit back, or those who have succeeded in getting their deposit back. Contact jennifer.chen@cbc.ca or elizabeth.hoath@cbc.ca if you have a story to share. Tell ‘em VancouverCondo.info sent you!
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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October 20th, 2008 at 11:48 am
“They are a LOT different from a stock broker:”
I’d say there is more similarity of a Realtor to a financial advisor than a “stock broker”, the latter of whom is more a technician and is prevented from offering financial advice.
Ask your financial advisor, should you have one, about commission disclosure of the specific funds and stocks they are selling. I would treat a home purchase with a Realtor with as much, if not more, skepticism as advice from a commissioned investment dealer.
October 20th, 2008 at 9:29 am
I was reading about the Quattro in Surrey, the one that burned down, and how they had a meeting yesterday in Surrey amongst developer, realtors, bankers and purchasers in . This will be an interesting project to watch as a market parameter.
In todays paper, one buyer stated he bought into this project based on brochures of having “Yaletown” in Surrey’s Whalley area (LOL !) but all he sees is addicts and fights. He requested a refund , but was told he can’t get his money back unless he sells.
Given the fire will obviously move all timelines forward, and people will not get any funds REfunded , I wonder how many will choose Plan B and simply walk and the whole thing falls into bankruptcy? I mean, for all intents and purposes…they are starting fresh with new construction like any other development, but there will also be a lot of desperate sellers of other completed projects. I’ll bet many will bail on Quattro and go bottom – feeding elsewhere .
October 20th, 2008 at 9:10 am
they are not much different than a stock broker
5. I can call my stockbroker and say “sell” and he will say “(clickety-click) Done.”
Liquidity, baby! Anyone out there wish they had a bit more liquidity right about now?
October 20th, 2008 at 9:10 am
Patriotz:
I appreciate your insight, and whatever expertise you have and collectively adding to the debate.
My previous take on realtors was on the theme that they promote a commodity, and their bread and butter is commission – based on both ends of the transaction ie Buying and Selling.
They will promote the given commodity in as positive a light as possible…Stock Brokers and realtors literally read out of the same sales manual . That’s the basics, they are very similar , the rest is just hair-splitting semantics .
It’s often not in their interest to be candid, but to promote things on the upbeat/positive light, that IS my point.
October 20th, 2008 at 8:52 am
It sounds like patriotz is in the equity business.
October 20th, 2008 at 8:18 am
they are not much different than a stock broker
They are a LOT different from a stock broker:
1. Stocks are sold on an open market with known bid and ask prices.
2. Stockbrokers do not negotiate selling prices. The market does that.
3. Stockbrokers are not paid on a % commission basis.
4. Stockbrokers are forbidden from making any representation about the future performance of stocks.
Those with more knowledge of the securities industry may add more.
Realtors are like used car salesmen, except a used car salesman would never claim that the car he’s trying to sell will be worth more next year.
October 20th, 2008 at 7:16 am
It’s too bad Canadians are so insular and have been brainwashed into thinking what happens elswhere won’t happen here. Having many relatives in the eastern U.S. we muse how what happens in the U.S. on mnay fronts eventually finds it way north to Canada … it used to maybe a 5-10 year delay lag. Now it is much quicker, like the border doesn’t exist.
Without trying to casting Realtors in a negative light….they are not much different than a stock broker simply promoters, they are promoting a commodity which in this case is real estate. It is their job to promote, not critique or criticize. One well known local realtor and I had a conversation re: the business, and he said that of his original class of approx. 30 realtors who graduated from the licensing program, only 2 were still practicing. Most of those that last probably have a lot more credibility, and a straight shooter is the one to seek out, moreso in these turbulent times.
October 20th, 2008 at 4:51 am
“Realtors are incapable of feeling silly. Read Tim Ayres’ response of 19 October on the 624blog (link above) to see what I’m talking about.”
Patriotz: Agreed, in general, Maggie, Rob, Aaron, come to mind. But in all fairness, there are those like Jeff, Paul, and the realtor below and I quote:
http://www.milliondollarjourne.....canada.htm
Get a grip, I’m a Realtor on the front lines in Victoria. I see the disaster that is slowly unfolding. Don’t fool yourself into believing that Canadian 40 years ams aren’t the American version of subprime. Rampant overbuilding, greedy speculators, and buyers that just ‘need to get in right now’. The writing is on the wall people
October 20th, 2008 at 12:56 am
Whomever wrote that crap on the Sooke blog is going to feel pretty silly for writing what he has and leaving an open forum…
Realtors are incapable of feeling silly. Read Tim Ayres’ response of 19 October on the 624blog (link above) to see what I’m talking about.
October 19th, 2008 at 10:25 pm
Whomever wrote that crap on the Sooke blog is going to feel pretty silly for writing what he has and leaving an open forum…
“You would have to be seriously dimb or delusional to think that prices can only fall 30% now that investor sentiment has changed, supply far exceeds demand, and the world is slipping into a recession.
We will be lucky to get out with only a 50% drop!
Especially in a backwater town like Sooke which had gone too high too fast.
Prices will go up again just give it 25 years or so…..”
October 19th, 2008 at 10:08 pm
Keeping an Eye on the Pimps:
Prices here in Victoria are not inflated beyond their sustainability. These $100,000 price drops are not going to happen.
Stop drinking the kool-aid. Commodity prices are tanking right now, especially Oil which is running at $75 a barrel, almost half of its high at $140. Canadian companies will be laying people off as consumers world wide, especially in the US, cut down on spending.
Home prices in BC can only go:
DOWN,
DOWN,
and DOWN.
October 19th, 2008 at 9:56 pm
“he nearly bit my head off.”
You are brave. It is very dangerous to do what you did.
It’s much like telling a gambler who has just won, that gambling is not a good thing.
Your friend has probably drank the Kool-aid,and actually believes:
http://642blog.ca/2007/12/27/s...../#comments
Why is the Canadian economy booming, while the United states is suffering? I’ve written about this before, but it’s worth mentioning again. I read this post on a local real estate bear blog which, while clever, is wholly inaccurate. What the bubble-blowers here in Victoria fail to note is that the reasons for our continued economic success here in Canada are not the usual Canadian success stories of manufacturing in Ontario and Quebec brought on by a favourable exchange rate. The rise of the dollar over the last 24 months and the expansion of our economy is driven by global demand for what Canada has to offer: minerals, resources, oil and gas, wheat, technology. This time around is different. Prices here in Victoria are not inflated beyond their sustainability. These $100,000 price drops are not going to happen. Not in 2008, anyway
October 19th, 2008 at 9:23 pm
http://www.canada.com/vancouve.....62d6ff28fb
October 19th, 2008 at 7:25 pm
Just had a conversation with a realtor friend of mine. When I suggested that things probably wont be better next spring (IMHO) he nearly bit my head off.
Tensions are rising…
October 19th, 2008 at 6:51 pm
Sounds like the reason Dave has so much time on his hands (enough time to try to run disinformation on several blogs at once)!
“The real estate boom lured many new real estate agents, mortgage originators, appraisers, home inspectors, and title and escrow workers. Now, the slowdown is hitting many of these same people the hardest, forcing them to cut back, find second jobs or change careers altogether.”
October 19th, 2008 at 2:45 pm
Interesting stuff re: Buffet and the Country Wide Financial ” rumour” , and the associated company which built luxury homes..
Re: old “pearls of wisdom” ….Sort of reminds me of why Wal Mart has ben so successful .
” You can become poor catering to the Rich $$$….
” You can become rich $$$ catering to the Poor ”
PS the hourly rate condo is probably a joke… way too obvious..much like when someone put the NDP Fast Cat Ferries on E-Bay.
October 19th, 2008 at 2:37 pm
Renting a place by the hour is perfectly fine. I keep an eye on this market segment .
October 19th, 2008 at 2:19 pm
“Buffett hasn’t been bulletproof lately. He invested in Countrywide Financial at the height of the bubble. Can uncle Warren tell us how did that one go?”
this says he didn’t. did he really?
October 19th, 2008 at 2:12 pm
Anonymous
There’s only one reason people rent a room by the hour. Normally it’s only the seediest of hotels that even have an hourly rate. Any working girl making a decent amount of money just gets a room for the night and uses it multiple times.
Yes I do know a bit about these things but it’s not what you think! My best friend in HS helped out at the motel his family owned which was cheap and near the working girls.
October 19th, 2008 at 1:48 pm
Buffett hasn’t been bulletproof lately. He invested in Countrywide Financial at the height of the bubble. Can uncle Warren tell us how did that one go?
October 19th, 2008 at 1:47 pm
ING news:
http://www.businessweek.com/ap.....TO7Q80.htm
October 19th, 2008 at 1:32 pm
Retirees flocking to Victoria.
Well, with the new tent city growing in Beacon Hill Park and their leader saying on the news their goal is to expand to parks in Oak Bay I am sure many retirees will be moving to Victoria in droves.
October 19th, 2008 at 1:18 pm
Shangra-Lai (sorry about the spelling) …. prediction it won’t be built
October 19th, 2008 at 1:07 pm
anybody need to rent a place by the hour?
http://vancouver.en.craigslist.....37220.html
October 19th, 2008 at 12:55 pm
jfk and fruitcake….
Do you two think alike, exist in parallel universes, or are you the same person, given you eerily similar posts ?
Fruitcake : who is L.H. Oswald
October 19th, 2008 at 12:47 pm
“Piddlesbby” is quite right about global investors fleeing Vancouver….they’d have to be nuts to buy into a market that is just starting to crash when nuggets can be found in the ashes in sunny Florida and Californaia wayyyy before the flames subside around here.
BTW, anybody hear about the cancellation of the $2 billion Kitimat project?….that would be a serious blow to our economy.
October 19th, 2008 at 12:40 pm
“Piddlesbby” is quite right about global buyers fleeing the Vancouver market….they’d have to be nuts to buy into a market that is just starting to crash, when nuggets can be found in the ashes of sunny Forida & California wayyy before the flames subside around here.
BTW, anybody hear about the $2 billion Kitimat project being cancelled?…that would be a serious blow to our economy.
October 19th, 2008 at 11:58 am
I’ve been checking out Coal Harbour rents – especially in the newly completed buildings. There seem to be a lot of re-posts from people on Craig’s List trying to rent their condos. I found this ad a little amusing. Somebody’s crapping their pants and trying not to lose a few grand in rent new month.
http://vancouver.en.craigslist.....;bedrooms=
October 19th, 2008 at 11:05 am
“UPDATE: The CBC Early Edition is putting together a story for Monday morning and would like to talk to anyone who invested in a development and is trying to get their deposit back,”
Anybody want to bet the story will end with the obligatory assurance from an” independent expert “such as Sommerville, Muir , Pastrick, or a rep from the developer business, that all will end well, and we are not like the USA?
Heck, we may be even treated with an honest opinion from Rennie himself. But I’m no fool, unless I hear from Bill Good and his guest professionals,that all is fine, I will not buy.
October 19th, 2008 at 10:56 am
http://seattlepi.nwsource.com/.....ource=mypi
Forgot to post link for Seattle story
October 19th, 2008 at 10:53 am
Real estate workers feel industry’s pain
“The real estate boom lured many new real estate agents, mortgage originators, appraisers, home inspectors, and title and escrow workers. Now, the slowdown is hitting many of these same people the hardest, forcing them to cut back, find second jobs or change careers altogether.”
Naturally this can’t happen in Vancouver. Seattle has so much more land than we do, and doesn’t have the Olympics, and of course it rains a lot there.
We have no subprime (how to explain farm workers and warehouse labours with 500k mortgages, is a mystery, that we are working through to explain).
October 19th, 2008 at 9:50 am
Somerville is saying that Vancouver normally commands price AND rent premiums relative to incomes.
This is certainly true enough — Vancouver has always drawn people from the Interior and from other provinces. People have been willing to pay a premium for its charms. And its good reputation was, imho, always well justified … until recently. Regrettably, Vancouver has changed in a way that I found so detrimental that I left the city that was my home for 20+ years.
These days, when I return to Vancouver to visit, I often wonder why I stayed so long. I think Vancouver’s charm is essentially gone. It’s reputation seems to persist, but that will fade soon enough. And when it does, the willingness of people to pay a rent or purchase premium will disappear.
Certainly, people will continue to move to Vancouver, but it has pretty much become “just another big city”. Rent and purchase premiums won’t be justified.
October 19th, 2008 at 9:40 am
“as long as owners take affirmative action and stay, prices won’t drop
Time to take another hit at this canard.”
To patriotz:
Thank you for explaining in layman’s terms the RE sales cycle. There is really no need to get into it further deeper than this. Remember, most players in RE are not educated & trained economists. Just regular folk who took a RE course. Yes, there are the marketers with BA’s, but they too had very humble beginnings.
I certainly don’t mean to offend anyone, in RE but if you are hurting right now and your commissions have disappeared, well, you should have practiced some succession planning. It’s SALES, and this profession you have your up and down years and anyone who sells in other industries knows this very well.
So take this time to upgrade your skills, network strategically, call on referrals and be truthful to your current client base. They will respect you and call on you when they are ready.
Listen to “patriotz”, this person is bang on with what is really going on in the RE market and explains what is needed for it to change. It’s going to be a while. The only potential buyers are domestic and it’s slim pickings. The Global buyers aren’t because either their currency has fallen or mostly they lost alot of $ in other investments. The last thing they want to do is buy a condo that is falling in value. I don’t think so. If anything they are selling and flooding the market. Remember supply and demand, well there is going to be a whole lotta supply going on for the next few years, at least.
October 19th, 2008 at 8:55 am
Seems like times are tough all ’round.
http://vancouver.en.craigslist.....21722.html
October 19th, 2008 at 6:44 am
In a review of the past several “boom – bust” cycles re: real estate, I think one consistent indicator of a bust is how the realtors and real estate board are quoted in the media.
Through gritted teeth they talk about a balanced market… ie prices have stabilized , supply meets demand etc. ie very coded slef serving language . It must be quite a shock for realtors when the sales and listings data rolls in and they start to realize the party is over,the market is tanking , but now they have to try to BS the public that all is well with their coded language. The facts are the facts, but over the past several cycles I have noticed the same flowery BS almost verbatim, then the sh*t usually hits the fan shortly after.
October 19th, 2008 at 4:47 am
“This credit crisis feels like 1974. I really hope it doesn’t behave like 1974, because while stocks did recover before the recession ends, inflation went through the roof and that it took 20 years for buy and hold stock investors to recoup their loses. Which means, those baby boomers who are either retired or close to retirement may find that retirement can become a challenge”
Big difference: personal savings rate was significantly higher during the ‘74 crash and most retirees had pensions or other guaranteed retirement schemes. Now these schemes are personalized and/or heavily invested in equity markets. Adding to this, housing has increased significantly in real terms in the 2000s, much more than the ’70s, and now is dropping way more in real terms.
The fear of default — the credit crunch — extends to individuals and businesses, not just banks. Hoping that restoring bank confidence will somehow “trickle down” to these banks’ individual relationships with customers is a huge leap of faith. This is the so-called “pusing on a rope” argument and, while the effects look like ‘74, I think it a very different beast this time.
October 19th, 2008 at 12:57 am
as long as owners take affirmative action and stay, prices won’t drop,
Time to take another hit at this canard.
Existing owner-occupiers don’t drive the market, because they almost always sell to buy another property. It doesn’t matter whether they stay put or not.
Market prices are determined by those who are buying and selling. Nothing could be more obvious really, but for some reason it has to be pointed out.
What matters is the marginal buyers and sellers – would-be new buyers and investors, current investors (especially the cash-flow negative ones), forced sales (estate, etc), and builders.
Once prices start falling (like right now), the marginal buyers dry up and marginal sellers increase, big time. Which means a big increase in inventory (like right now). And remember, many of the marginal sellers have to sell, but nobody has to buy.
The market changes from one driven by expectations of price increases to expectations of price decreases. Look out below.
October 19th, 2008 at 12:15 am
“And where is the money going exactly? Cash under the mattress? Now that’s an attractive risk/return LOL. If not, doesn’t the money end up deposited back in some bank somewhere?”
Still, even if the deposits are guaranteed it is a hassle and it may take months to get your money so the best thing to do is withdraw a 3 months supply of cash and keep it somewhere other than in a bank and this money would be about what one might need to keep going for 3 or 4 months. For most this would be about 5 to 10,000.00
October 19th, 2008 at 12:07 am
crabman….if you had a million dollars you’d leave it in the bank?
Did anyone here listen to me a couple years ago about buying gold and silver as a protection?
http://www.safehaven.com/article-11594.htm
While COMEX futures gold prices have fallen, the real price for actual physical bullion continues to surge as there are little or no sellers and nearly all are buyers. Shortages of small and midsized bullion coins and bars appear to spreading to the large bar market with reports of London Good Delivery Bars becoming harder and harder to buy, get hold of and take delivery of (especially in New York).
Futures prices are falling while gold prices for physical bullion are increasing with a surge in price of premiums for all coin and bar products. Investors do not want promissory notes or futures contracts rather the safety of physical bullion. Barclays analysts note that “There has been a swing from investors investing in gold in any form to investors specifically choosing to invest in physical gold.”
Unfortunately for those who didn’t listen no silver or gold in any decent size is available in any of the bullion and coin dealers in Vancouver or anywhere in Canada and the USA. Oh well. Next time listen to me rather than tell me I’m wearing a tin foil hat. The Comex price of silver is 9.35 USD today, down about half from last year. The price, if you can find any, of USA Liberty Silver Eagles on Craigslist in Seattle is now 22.00 to 26.00 USD !!!! Canadian silver maple leafs in Canada if you can find any are hovering in the 20.00 CAD range still in spite of the Comex price which incidentally no one cares about anymore as the Come has been discredited.
October 19th, 2008 at 12:01 am
Hey, its midnight!!!
October 19th, 2008 at 12:01 am
Hey..it’s midnite !
October 19th, 2008 at 12:01 am
Hey..it’s midnite !