Friday Free-for-all!
It’s Friday! Time for our end of the week news round up and open topic discussion for the weekend. Here are a few things I’ve noticed lately:
-Global News Video: Vancouver house prices to drop 30% by 2011
-BC house prices to drop additional 18% in next two years
-501 Pacific: levy passed for $1.4 million exterior maintenance (PDF).
-Exx: Recent price-reduced sales compared to assessed value
-BC is ‘a terrible place to commute‘
-Loonie plummets to four year low
-Text of Premier Campbell’s statement on the economy
-VANOC prepares for economic uncertainty
-Olympic village in good financing says CEO
-Buy an embarrassing license plate, win hockey tickets!
-BOC: Canada on verge of recession
-US land slide to affect Canadian market
-Whitehouse warns GDP number ‘not good’
-Greenspan ’shocked’ by credit crunch
-US foreclosure activity up 71%
So what are you seeing out there? Post your news, links 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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October 23rd, 2008 at 10:33 pm
I haven’t read a news report that didn’t thrill me this week. We got, like, one failing condo project a day. Christmas is early this year for us bears.
October 23rd, 2008 at 11:23 pm
Here’s the video to Thursday’s Global story. The media, as expected, is squeezing the air, much of which was their own, right out of this bubble.
On a separate note, my coworker listed his place at the end of August. His asking price was exactly 07 assessment despite his Realtor’s request to go 4% lower. A month later and no bites, he had lowered it the 4%. Now, almost 2 months later, he is reducing it another 10% for a grand total of 14%. He was initially hopeful and greedy, saying that IF he received any offers, he wouldn’t consider anything <2%. Now he’s hoping for ANY offer. I wish him luck, he will need it.
Nikkei closed -9.6%, DOW premarket now down 358. Yikes.
October 23rd, 2008 at 11:28 pm
Greenhorn’s Global TV news report (hat tip exx) is well worth a watch. Pastrick is calling for 30% peak-to-trough drops. That, for people counting at home, is about a 45% change in forecast in 6 months. Pastrick’s stock just took a pounding! LOL
Remember this?
Pastrick is blaming the unforeseen global slowdown, not — duh — high prices, for Vancouver’s impending woes. Even if you end up with the right answer you still need to show your work. And from what I’ve seen Pastrick gets an E for effort.
October 23rd, 2008 at 11:29 pm
Global News…….. “because of the global credit crisis real estate prices may fall a further 18%…….blah,blah,blah. Yeah, had nothing to do with greed and affordability. We need an independent news station that I can watch with out the bias of ad dollars.
October 23rd, 2008 at 11:42 pm
Congratulations bears, somehow you got the local news sounding as negative and gloomy as you always are. Vancouver is a beautiful city no matter what house prices are, you’d all probably do well to keep that in mind.
October 23rd, 2008 at 11:49 pm
Just caught the Global TV piece. Woohoo… gotta love it when the media finally arrives at the party… better late than never… (or should I have said “finally arrives at the funeral.”)
Vancouver’s outrageous real estate prices are toast… if the news media is reporting that we will see a 30% decline then it’s probably going to be more like 50%.
I love it. This is gonna be like shootin’ fish in a barrel!
October 23rd, 2008 at 11:50 pm
You are right. Vancouver is such a beautiful city. Such an absolutely stunning city that one could almost forget entirely about the fact that the housing market is deflating. For those of us who thought the city took a rather pretentious turn after that whole real estate bubble began, this is something to feel cheerful about. Maybe I can enjoy the beautiful city without having to overhear Starbuck’s baristas discussing their plans to retire off the massive profits they will receive on the sale of their downtown condo. People may actually have to develop some more interesting pursuits…
October 23rd, 2008 at 11:53 pm
“Vancouver is a beautiful city no matter what house prices are, you’d all probably do well to keep that in mind.”
I’ll keep that in mind today, tomorrow, and 4 years from now when I buy at 40% off today’s list price.
October 24th, 2008 at 12:08 am
I love reading the comments on some of those articles. The ignorance of most people just blows me away. Stubborness and greed will slowly make way for fear and panic. Once the properties of their neighbours finally start selling for less and less, all the prices will start to drop off a cliff. Either that or these people can leave their properties on the market indefinately while their interest payments slowly eat away at all their ficticious profit margins.
Who would’ve thunk that real estate is an illiquid investment that carries inherant risk with borrowed money? Oh ya… we thunk it.
October 24th, 2008 at 12:08 am
-Global News Video: Vancouver house prices to drop 30% by 2011
Well, blow me down. Never thought I’d hear anything like that from global. Ever.
I thought the Olympics would build a StarWars shield around us – making us untouchable.
Who knew?
October 24th, 2008 at 12:19 am
Dosh Says:
October 23rd, 2008 at 11:42 pm
Congratulations bears, somehow you got the local news sounding as negative and gloomy as you always are.
Wow, it’s the dosh. Aren’t you a little worried, dosh, that the anon guy will start dredging up bullshit you’ve been saying for years and quoting you on it?
Or are you just trying to add to the archives?
October 24th, 2008 at 1:29 am
This is the day, my friends. Once you’ve got Global BC calling it a burst bubble with a Ted Chernecki coverage that makes fun of past exuberance, you know the party’s over and done. Goodbye condo boom! Thanks for the laughs and crappy architecture.
October 24th, 2008 at 5:39 am
We haven’t hear from our own Jennifer “its a balanced market” Podmore Jones in a while. She’s back on page H3 of the Sun saying “It’s neither a buyer’s nor a seller’s market”. She needs to get out of the office a little more and talk to a few sellers.
October 24th, 2008 at 5:39 am
Whoa, check out the front page of the Sun!
October 24th, 2008 at 7:14 am
Traders nervous …. very nervous
http://money.cnn.com/2008/10/2...../index.htm
October 24th, 2008 at 7:31 am
The MSM are half right, they’re finally getting it. They’re still presenting things in a way so as not to evoke panic, no surprise there. Forecasts are conservative on the way down. On the way up? Well, you all remember “+15% per year forever and ever, Amen”.
Amen indeed.
It makes me sick thinking of the number of times I heard “buy now or be priced out forever”. The number of arguments I had over this topic with friends and family all demanding that I go buy. For the rest of you who never had any doubt this market would turn, pat yourselves on the back, soon we will be bargain hunting for RE, my friends.
What will we do with all the extra time not blogging about it? I shudder at the thought!
October 24th, 2008 at 7:35 am
Did anyone read that 501 special assessment link?
I had a hard time believing that someone would go through life with a name like “Bunny”!! But beyond that, I found it really interesting that 181 people in a 295 unit tower bothered to show up to deal with this assessment. That tells me there’s a 40% foreign-ownership/apathy factor at play in this one building.
I also like how the they call the meeting at the end of September, but the total amount (on average about $6000-$7000 per unit) is due in less than a month! Fine, they offer you 10 month payment plan, but that’s still a $600-$700/mo unexpected luxury car payment!
Ouch.
And the solution seems to be rather short-term. Spray-on silicone sealant?! Gives your building that nice rubbery feel instead of that solid concrete feel. Forget the market, I’m investing in engineering companies in town. I betcha they’ll be making money for the next 20 years fixing up all these leaky condo’s!!
October 24th, 2008 at 7:58 am
Just heard the Portress group was able to saty afloat by acquiring new financing. I am curious how many others will be so lucky if they too had Billions in debt. I’ll be if Fortress didn’t have Whistler Blackcomb (aka 2010 Olympics)in its portfolio it would be toast. Maybe a smart move by Fortress as a strategy ?
I wonder how many other projects they have in BC. beside Whistler BlackComb, Millenium Village, the Evelyn,…. as only the Evelyn was cancelled.
October 24th, 2008 at 8:13 am
Someone needs to send this
Sun article to Dave:
Vancouver’s housing history suggests prices can drop sharply and suddenly and take many years to rebound.
gasp!
October 24th, 2008 at 8:23 am
Post # 17:
Good point….the comprehensive topic of Condo’s is much more than just “supply and demand” market forces…its the long term liability such as the potential for having “leaky” as an adjective.
The perfects storm is having it depreciate both in value due to market forces AND then further depreciated via costs incurred to fix. Dubious investment at best these days.
October 24th, 2008 at 8:32 am
From the Sun article:
“Vancouver’s housing history suggests prices can drop sharply and suddenly and take many years to rebound. Deflate today’s average price of $759,000 to factor out inflation and the real price comes to $193,689, suggesting an annual appreciation of 5.6 per cent if you held your property from 1975 to the present.”
This is not new information. It’s just a realty check for those folks who have not seen ups and downs of the real estate market.
Like a guy going into a casino and going on a winning streak…at some point the winning streak ends and returns turn negative.
October 24th, 2008 at 8:38 am
tRy this link:
http://thetyee.ca/Mediacheck/2008/10/24/CanWest/
Asper Nation media empire is apparently collapsing.
US ownership of Canadian media soon?
October 24th, 2008 at 8:39 am
tRy this link:
http://thetyee.ca/Mediacheck/2008/10/24/CanWest/
Asper Nation media empire is apparently collapsing.
US ownership of Canadian media soon?
October 24th, 2008 at 9:05 am
I find that my SUV survives the commutes just fine and dandy. I like a big comfortable commute away from the scurge on the buses and sky train. So many aweful diseases and filth on public transit I find that it’s wise to stay away. Anyway real estate wise things are still good. I’ve been getting good deals on condos. I’ve got a friend in Osoyoos who wants me to look at his investment condo up there should be fun. Osoyoos is the Hamptons of Vancouver.
October 24th, 2008 at 9:10 am
US ownership of Canadian media soon?
Not so sure about that. Even Goldman Sachs wouldn’t want to control of a dog company.
October 24th, 2008 at 9:17 am
Montery:
I’m on the board of my condo building, and we always struggle to attract people. The people are generally in the buildings, they just are apathetic as you suggest. In our buildings we’re probably 10% absentee owners. That’s not to say that we don’t have a much larger immigrant population, as immigrants probably make up 65-70% of our owners.
At our last AGM, we needed to make some substantial assessments due to some seriously terrible budget estimates made by our now fired property management company. We had about 40% turnout, which was by far a record.
Oh and FYI, a family member works for a building envelope engineering company. Contrary to what you might think, their business is DOWN lately. The increase in leaky condos lately is not nearly enough to offet the loss of new construction.
October 24th, 2008 at 9:33 am
I find that my SUV
so…you are now down to a single SUV?
not much of a portfolio is it?
what are the possibilities that you don’t really own it?….. maybe your main asset is leased?
oh well you can always sleep in it.
October 24th, 2008 at 9:36 am
strataman:
if you are lurking…. can you give us the low down on spraying the exterior of a building with silicon?
is this a desperation move in light of winter approaching?
October 24th, 2008 at 9:56 am
Building restoration? The biggest racket out there. I am seeing buildings undergoing their 2nd attempt at restoration.
Spraying a building with silicon as a fix ?
I’d like to have sold them a bridge too LOL, except I think these poor people have met another modern-day snake oil salesmen and have been abused enough.
October 24th, 2008 at 10:13 am
V2V, I have seen the article and the new predictions from Credit 1. The new estimates are a recognition that the credit crisis situation is going to affect our economy negatively. I think that is driving the real estate market more than anything (e.g. affordability). Buyers are fearful about current economic uncertainties (e.g. jobs, savings, gas prices) and do not want to make big purchase decisions. Once these issues work themselves out, then prices should level off. In the meantime, demand will build up and supply will drop (fewer completions).
October 24th, 2008 at 10:25 am
Dave, you are correct that eventually demand will build up and supply will drop. Will the appropriate measure for this be in months, years or decades?
October 24th, 2008 at 10:32 am
Thank you Pope. I estimate that reading your blog (among other housing blogs) has saved me hundreds of thousands of dollars + interest.
October 24th, 2008 at 10:35 am
ReductiMat, it doesn’t take long for prices to bottom out in real estate. Construction starts will drop quickly, but will also pick up quickly once prices stabilize.
October 24th, 2008 at 10:47 am
Dave’s predictions of mediocre price “corrections” have been proven wrong again. In my estimation, Dave is the “wrongest” person on this blog.
October 24th, 2008 at 10:50 am
Call me, Dave (you bad boy).
October 24th, 2008 at 10:55 am
Dave, months, years or decades?
October 24th, 2008 at 10:58 am
Dave’s right. It won’t take long for prices to bottom out.
It’s just that the bottom is a long, long way down. If you own a house in Vancouver, good luck. It’s gonna be horrendous.
October 24th, 2008 at 11:24 am
So far Dave hasn’t been right about a single thing.
He is either an idiot or was intentionally running interference and trying to bring in business for him and his wife. Either way he deserves to be minimized.
———
October 24th, 2008 at 11:26 am
The sad part of all of this is the fact that instead of RE bulls reassessing their worldview (much like Greenspan has had to do) the RE pumpers in Vancouver will blame the credit crisis for the downturn. Realistically, this market was already headed down before most people had even heard of a credit crisis. The fact that projects are being cancelled is actually long-run bullish for RE in Vancouver. Most true bears (like me) would have liked to see all of those projects complete. However, most will view it as bearish and it will simply increase the negative sentiment WRT RE, consequently extending the timeline for a recovery.
Don’t listen to people like Dave; I know many of them and they are the same as the Lehman Bros. employees that were saying all was copacetic when they were crashing and burning. I would say half of the people in my office of 56 have one or more investment condos in the LM, and the talk around the water cooler is get the f*ck out while you still can. Sentiment has changed boys and girls and the downside is steep and ugly….
October 24th, 2008 at 11:42 am
Dave, if you are serious, you are deluded, seriously. You have lost your grip on reality.
October 24th, 2008 at 11:42 am
It’s over specuvestors. All the developers are running for the hills! The developers deal with buyers everyday and right now, all the developers can’t find any buyers! CUT YOUR PRICE AND CASH OUT NOW BEFORE IT IS TOO LATE!
October 24th, 2008 at 11:42 am
How old is 501 Pacific, I would assume less than 5 years? It looks pretty new. No warranty on the construction? What happened to the new building codes since the North False Creek condos? Just wondering.
“Call to order, Bunny has the gavel”
October 24th, 2008 at 12:46 pm
The Olympics (if we even manage to put them on) are only going to be a sideshow to the economic and social changes that are about to hit poor, deluded BC. This province is so far out of the loop and off the map. Only a true BC’er could keep denying the RE bubble well after the rest of the world has already crashed, picked up the pieces and moved on.
I’d like to propose a new motto:
“BC…we’re so far behind, we think we’re ahead!”
(does “the best place on earth” have an exclamation point at the end? just asking)>
October 24th, 2008 at 12:46 pm
Neighbour of mine works downtown. Says one 300 unit project had a pre-sale recently. It had 3(THREE) offers period …OFFERS, not sticker price , let alone a bidding wars.
Ouch !
October 24th, 2008 at 12:54 pm
Richmond’s Olympic Oval funding was dependent on selling adjacent public land.
Recall the developers paid over $ 120 Million.
The land has been pre-loaded immediately WEST of the Oval. Olympics starts in approx. 16 months.
Given the economy is tanking, wanna bet the pile of sand sits there before and during the Olympics and becomes an absolute eyesore?
Priceless, a perfect symbol/testament to this sick joke of 2010 Olympics and this bogus speculative orgy.
PS
Now: just to get the perfect camera angle and print T -Shirts ….
October 24th, 2008 at 12:59 pm
no-lympics, i agree with you on the oval lands, but at least the oval is better than the old rv park that was there.
i can sum up the past few weeks with one word: hahahhahahahahahhahahahahhahahahhahahahahah
October 24th, 2008 at 1:15 pm
Maybe No-lympics can comment on (and maybe I misheard this) that no one is allowed to see the details of most of the financing of the Olympics – things like bids and costs…
bueller…bueller…anyone…anyone…
October 24th, 2008 at 1:16 pm
Poooo: Is that an evil laugh or a quasi benevolent one .
I am just wondering if they( Richmond ) have some sort of voodoo financing. A few weeks back someone said that re: Vancouver’s Olympic village (being built by almost- bankrupt Fortress) that Vancouver wouldn’t see a penny till every unit was sold.
The RV park was simply a prop to make Richmond thankful it wasn’t Surrey,(y’know, a potential Trailer Park Boys set).
October 24th, 2008 at 1:17 pm
PLease Nolympics … which one?
October 24th, 2008 at 1:18 pm
So far Dave hasn’t been right about a single thing.
Dummy, I have been right about a lot of things. Firstly, I was right to buy at the very start of this market (in 2001). Did you? Secondly, I predicted the market would top this year. Did you? Or have you been calling for the sky to fall for years?
I predicted prices would start declining in the Fall, but was only a few months off. As far as the downside goes, we haven’t yet passed my original predictions made earlier in the year. That said, I am more bearish now considering the world financial situation.
Overall, that’s a pretty good track record.
Meanwhile, you hide under ‘anonymous’ posts.
October 24th, 2008 at 1:18 pm
Jacksun the 501 is 7-9 years old. They were pre selling it in 1999/2000 (they were $120k for the smallest units) and construction was underway and it was and still is a nice building.
The HPO requires developers to have a minimum new home warranty of 2-5-10 but this 501 report looks like it’s considered maintenance (the developer provides a maintenace manual to the strata, whether the strata follows it is another story read “lord of the flies” if you want to know how stratas work).
Someone on here might know whether the 501 has an existing new home warranty in place, there would be discussions about claiming in the strata minutes if it is.
It’s strange that the 501 was able to get such a high amount of rent for such small units, some owners managed to get 500 sq ft rented for $1350…
October 24th, 2008 at 1:21 pm
Awesome Global New video – “It can’t go down, it’s not possible.” Who is that twerp and what rock is he hiding under right now.
Still, it would’ve been sweeter if they Rick-Rolled it at the end of the video…
October 24th, 2008 at 1:22 pm
Good one Dave.
There is an archive of everything you’ve said and the only person who’s been more wrong than you about everything is Dosh.
Who wants to post some of Dave and Dosh’s dumber comments?
October 24th, 2008 at 1:29 pm
Dave
“it doesn’t take long for prices to bottom out in real estate.”
Again with the sweeping statements that completely lack a factual basis. I presume again you’re only willing to accept information that is on the Vancouver graph, in spite of the fact that there’s only one other bubble to properly compare this one to and that other bubble doesn’t have anything similar to this one in the run-up.
Japan took 10 years to hit bottom. Most US cities have been falling for 2-3 years and are still on a downwards slope.
Honestly how do you manage to shovel so much crap?
October 24th, 2008 at 1:30 pm
“i agree with you on the oval lands, but at least the oval is better than the old rv park that was there. ”
Actually, I have to disagree. There was a pretty nice little walk along a path by the RV park to the dike, laden with blackberry bushes and trees. Now, we have a massive, ugly structure that dwarfs the office buildings located nearby. I also give the RV park 1/100th the probability of sliding into the fraser, as compared to that ugly skating oval.
October 24th, 2008 at 1:31 pm
Bubble Lad:
Very funny you say that.
I had read a book called ” Lords of the Rings “, by a couple of investigative reporters. Thyey trace the Olympic mafia , ie the circus that follows the Olympics like Kling-Ons and sucks dollars out of host cities.
A colleague of mine and I were very cynical when Richmond stole the Olympics from Burnaby. We thought…WTF? how can you take on a project and not know what the hell you were going to build and at what cost ? We contacted VANOC and asked them how this is possible ie to buy a pig in a poke? The Oval went from about $80 Million to $180 Million . Vancoc never gave us a straight answer, just a bunch of BS.
Richmond basically said they will take on the Oval, and worry about the rest later.
What happens is the host Olympic City (of each venue)takes on the fiscal obligation with a blank -cheque. It effectively abuses its citizesn to be the “bank” and obligates them to pay for every penny. Normally, a Local Gov’t would have to go to referendum for items that exceed its annual budget. Somehow, the City scared up enough coin “supposedly” so no borrowing is needed.
What is more interesting is that Richmond has recently made the Olympic Oval a corporate entity with a board, and also hired someone to run it . Unless I am mistaken, that a classic way to hide as much as possible, which I am sure is their main intent.
October 24th, 2008 at 1:33 pm
“Honestly how do you manage to shovel so much crap?”
Drachen, it is called ‘practice’.
October 24th, 2008 at 1:35 pm
bearette:
Please clarify what you mean by “which one”?
You want a T Shirt ?
I have Bob Rennie(aka future T – Shirt King) working for me now.
October 24th, 2008 at 1:38 pm
Dave
“I was right to buy at the very start of this market (in 2001).”
I have a friend who won $5,000 in the lottery, was he “right” to buy a ticket or lucky? Of course he’s not holding on to the ticket in the hope that it might increase in value though… You on the other hand have a good chance of gaining nothing (or even losing money) when all is said and done.
“I predicted the market would top this year.”
So did most of us, very few people on the blogs called 2007 or earlier, but you weren’t here then… And you only called this year for tops after inventory spiked.
You also predicted that inventory would peak in summer.
and that prices would not decline more than 10%
and that oct 1 would see lower inventory than June 20.
October 24th, 2008 at 1:43 pm
CUT YOUR PRICE AND CASH OUT NOW BEFORE IT IS TOO LATE!
It’s already too late…
October 24th, 2008 at 1:45 pm
I’ve removed the smallest level of down-rating text because its being used to vote down unpopular views rather than just to remove spam and off-topic comments.
October 24th, 2008 at 1:49 pm
Jesus…I’d be laughing about what no-lympics says if I wasn’t busy crying.
I’ve heard that municipal politics is the last bastion of true, old school corruption – but Vancouver has raised it to an art. If anyone ever gets serious about asking questions here…about the olympics, real estate, drug money, esl degrees, zoning and development…there would not be a shovel big enough in the whole world.
October 24th, 2008 at 2:00 pm
Bubble Lad:
Rent “Gangs of New York ” and read up on Tammany Hall.
What you have hear is true …Local Gov’ts are the most crooked and corrupt entities in the totem pole pecking order of the 3 levels of Gov’ts. They live on the myth ” these are your neighbours” , they live in the same City,…ie you can trust them as opposed to MLA’s or MP’s.
Most of our Council’s should be forced to watch the video of Saddam Hussien’s hanging or Romania’s Cauecescu’s firing squad exit . The Province has empowered Local Gov’ts via the Community Charter and other legislation to be literal unnaccountable dictatorships who get away with murder.
Heres’s some homework: Speak to a Council member (or Mayor ) on a topic… you will often see a 1.0 watt light bulb above their head. That’s often why they pick them to run ….pupetts !!!
October 24th, 2008 at 2:01 pm
beta, its not too late to cash out and make money if you bought in 2001 or so. You won’t get as much as you would have last year, but if you price sharply you’ll get more than you’ll be able to get for years to come!
October 24th, 2008 at 2:19 pm
How bad is it getting out there? Well, a fellow I work with has NEVER worked a single overtime shift in the last 10 years. Why? Cause his wife is a mortgage broker and she WAS the true breadwinner in the family (2x’s his barely 6 figure income!). They just moved into a 1.3 million dollar home in Coquitlam around the time that the sh#t really started hitting the fan in the credit markets. Now, he can’t work overtime enough; to everyone’s astonishment, he is unabashedly grabbing every shift he possible can.
That’s how bad it’s getting out there…..
October 24th, 2008 at 2:23 pm
>Now, he can’t work overtime enough; to everyone’s
>astonishment, he is unabashedly grabbing every shift he
>possible can.
That couple sounds like a foreclosure case waiting to happen. Alberta foreclosures are already increasing at a rapid pace:
http://www.canada.com/reginale.....fca45193d4
It’s just a matter of time until BC joins Alberta in the sharp rise in foreclosures
October 24th, 2008 at 2:33 pm
I own in the 501, I bought a presale in April 1999. It has been a monumental task getting the maintenance spending passed, I think it that was the 4th meeting (I only went to the 1st and send my vote in by proxy), and it only passed by a few votes, here are some of the reasons:
1. You need 75% to pass a special assessment, not just a majority.
2. As others have said, you’re lucky to get 50% of the people to even show up.
3. The developer (Amacon/Onni) still owns about 20 units in the place, including the commercial units which all get a vote. They send reps who vote down essentially any spending. You can draw your own conclusions on why they object to this particular project.
Building codes changed in about 2002, after the 501 was built. There is some minimal issues that are being addressed, and where appropriate, materials are being updated to the newer standards.
An extensive report was commissioned and prepared about a year ago, that recommended this amount of maintenance. It was quite detailed and didn’t reveal anything horrifying. But that being said, doing anything on a 300 unit apartment building is not cheap. The construction downturn should allow for lower labour costs.
Overall the building is in great shape, and is in a great location. I miss living there (too small for my current situation), but I’ve had no problems renting for good dollars.
Bunny is Funny, but Van Condo is the 3rd management company we’ve had, and so far the best by a long shot.
October 24th, 2008 at 2:36 pm
Just to add a little to what bdk said, it seems like this is “catch up” maintenance that was never done by previous stratas. Getting things through thick-headed owners is another matter entirely. I know many of the people there are still original owner-occupiers, but still argue against every nickel and dime of their huge investment.
Once the report is out there, would-be buyers can see that you ignored a professional report on maintenance and price their offers accordingly.
October 24th, 2008 at 2:57 pm
yes the walk along the dyke was very pictureqse, sp? the road alignment was so much better before, then again, it doesnt really work from a planning point of view. yea who knows if it will slide in the water, doubtful though. aspac will likely remove the sand before the 2010 olympics and some trees, grass, benches will be planted on the site prior to the olympics coming. yea richmond is very being very secretive about the oval, but it may be that they want it to be a seperate corporation in order to turn a profit and develop lands around the oval because they own about two more parcels and will likely develop it themselves – you heard it here first. Since you all know that cities are suppose to be non-profit right?
October 24th, 2008 at 3:05 pm
Thanks for that insight, Warren. +1
October 24th, 2008 at 3:18 pm
Nolympics, this one:
Neighbour of mine works downtown. Says one 300 unit project had a pre-sale recently. It had 3(THREE) offers period …OFFERS, not sticker price , let alone a bidding wars.
Ouch !
October 24th, 2008 at 3:19 pm
Agree with Jesse – Thanks Warren, always good to hear the inside scoop.
October 24th, 2008 at 3:22 pm
Looks like some US markets have already starting rebounding.
See link below.
http://realestate.yahoo.com/pr.....9kLW5ld3M-
October 24th, 2008 at 3:24 pm
It’s amusing to see that global news report and read the front page article in the Sun today, it all sounds so familiar. Its as if the MSM has been taken over by RE bubble bloggers, bringing up previous crashes, mocking faulty predictions and showing scary charts. Welcome to the club MSM!
Its also funny to see the blame being put on ‘the credit crisis’ just as many here predicted a year or two ago that it would be.. no real mention of ‘affordability’ or out of hand speculation.
October 24th, 2008 at 3:27 pm
Pooo:
The parcels the City of Richmond still owns will be leased out, so they say. Good point you made, Aspac’s pre-load has done its job (ie soil compaction), and they will likely move the sand and put in some sort of temporary landscaping if Aspac puts this on hold.
There was a previous doomsday report by the soil engineers re: the Oval’s location, but now gathering dust somewhere.
BTW: Local Gov’ts are NOT “Non profit”, when they need money they can pimp and rezone a chunk of land to the highest value faster that you can switch on a light. The empowering legislation allows them to set up quasi- Private Corporations . Richmond appointed approx. 12 directors (usual token local mafia) and made the City the sole shareholder. The building ain’t GM Place or BC Place, so I am curious why they have such a corporate structure for a glorified skating rink. I highly doubt that in post Olympics this will be any sort of cash cow, quite the opposite. This building will have no future as a speed skating oval…this from reliable sources.
QUESTION: Any of your fellow posters with more knowledge on these types of legal maters that can explain what Richmond is trying to do?…In my view they are using this as a means to avoid disclosure and under guises of business confidentiality and blowing smoke up the ying yang.
October 24th, 2008 at 3:30 pm
“1.3 million dollar home in Coquitlam”
There is a phrase you should never hear.
October 24th, 2008 at 3:34 pm
“Dummy, I have been right about a lot of things.”
hey dave, how about coming clean and telling us exactly what it is you do for a living? it might help us understand where you’re coming from.
October 24th, 2008 at 3:53 pm
I’m the one that posted about one of the union employees working as much OT as he can. The interesting thing is, we just did some hiring and the last OT sign up sheet is full and that is IT for the rest of the year.
Agreed that you shouldn’t hear “1.3 million dollar house” in reference to anything sold in Coquitlam. Interestingly, we had a consultant from Santa Barbara working for us up until we put all major capital work on hold. He bought his house in the hills above Santa Barbara with a view of the Pacific, pool etc for the same amount in ‘06. Hmmm, let’s see, a McShack in Coquitlam for 1.3 mil or a house in Santa Barbara?????
October 24th, 2008 at 3:54 pm
I’ve gotten into the habit of tracking the total number of single family homes listed for sale on the West Side… and they have been rising. (Okay so I admit that I am wasting time on the job… sue me).
Looking at prior years data, you would typically expect listings to decline in October and yet they are remaining basically where there were at the end of September (after dipping in the first week of October they are now climbing again). Last year for example, listings declined about 18% from September to October.
It seems to me that there is one fundamental reason for this anomaly from prior years… no-one is buying anything… at all.
Okay, maybe there’s two reasons… the other reason is that fear is creeping into the minds of local real estate holders and some are trying to get-out before the decline…
sorry, TOO LATE!!!
October 24th, 2008 at 3:58 pm
Coquitlam had the “Street of Dreams” a while back…(mid 90’s? )Seem to recall many were up in the Million dollar range . I wonder what they are selling for now ?
October 24th, 2008 at 4:22 pm
Dave and his wife are mortgage broker/real estate investor realtors.
He accidentally posted his email address in the website box.
They’ve since removed some of the personal information from their website and his wife tried to deny it was him.
The problem is only one person has the name “Dave” reserved on here.
October 24th, 2008 at 4:24 pm
This is what would happen if a legitimate second “Dave” tried to use the same name:
“The name you provided belongs to a registered user. Please login to make your comment.”
October 24th, 2008 at 4:26 pm
Bearette;
My source said the project is in Yaletown ,approx 300 units, and built by a reputable builder. Due to confidentiality he can’t say any more (and can’t identify it).
October 24th, 2008 at 4:31 pm
Dave, If you are not hiding behind anonymity, then IDENTIFY YOURSELF. What ails you, man?
October 24th, 2008 at 4:32 pm
This is what would happen if a legitimate second “Dave” tried to use the same name:
you are not suggesting the first “Dave”
is illegitimate are you?!
October 24th, 2008 at 4:46 pm
These conspiracies are laughable. It is so improbable that two people with the name Dave have posted on this blog?
Just because the other Dave posted his email address in a response is not evidence that we are one and the same.
Firstly, if that was the case, what would be the point of denying it? The other Dave is quite public with his blog. If he was trying to post with fake identities, then why use his own first name?
Secondly, Pope already dispelled this myth by checking the IP addresses and confirming they were unique.
Thirdly, I offered to meet anybody in person to confirm I am not the other Dave, but nobody took me up on it.
As far as what I do and who I am… I prefer to keep that to myself. I have only posted under the name of Dave. If VHB identifies himself publically, then I will.
October 24th, 2008 at 4:59 pm
Dave, then you are just as anonymous as anonymous, so STFU.
October 24th, 2008 at 5:00 pm
Just because someone posts from a different ip address it does not make him a different person, Dave. So STFU.
October 24th, 2008 at 5:04 pm
Dave, how will meeting someone in person prove that you are not the other Dave? Please provide your logic. How will we know the person meeting us in the parking lot (“YOU”) is the same person who posts under the name “DAVE”? How? Please inform us of your method.
October 24th, 2008 at 5:26 pm
Does it really matter whether this Dave is the same Dave as the other Dave? This Dave is the one who is wrong about things and later claims to have been right about them. Who cares whether he’s a realtor or a mortgage broker or an escaped mental patient (or all three)? The important thing is that he gives devastatingly terrible advice about real estate.
October 24th, 2008 at 5:28 pm
Dave
You need a hot cup of reality. There are a number of other factors that will lead to decline in real estate. Given the present economic situation, foreign investment, a key driving force in Vancouver re, is down 50 percent and will get worse as investors need to remain liquid. The demise of the 40 year mortgage,tighter lending policy, and a collective realization that we have been paying way too much for re. And people had better hope that the 160 billion in HELOC loans don’t get recalled – that would be very ugly.
We were manipulated into believing that re would keep going up in value for ever. It simply can’t.
Oh, and i bought my place in 1996. Recently sold and will be keeping ‘a close eye on the market.
October 24th, 2008 at 5:29 pm
Sarah is correct about “Dave” being registered. I just tried.
I have no problems believing they are different people. Why is this even an issue?
I do have a feeling Dave doesn’t really believe the BS he spouts, he just uses these boards to practice his spiel on. He did admit to being a Realtor while flirting with Sarah at two in the morning. Does his wife know? Anyway, after a round or two with Drachen he has a fine sense of what argument will get little Mrs Nesting Instinct to insist that they buy right now, over the objections of Mr Practical Logical. Logic rarely works over emotion!
I feel so used and dirty at the thought of Dave honing his malarky here. Eww!
October 24th, 2008 at 5:43 pm
hey Alexcanuck, i think you were too much of a wussie to handle a correction. The poster on the other blog is right, you’re a tough guy want to be.
October 24th, 2008 at 5:50 pm
I used to receive credit offers in the mail, from several banking institutions, every day. Offering me anywhere from $10,000-$100,000 of credit if I “qualified”. Most of the lower amounts(>$50,000)were prequalified, call and activate type deals.
I just realized today that I haven’t seen one, not one piece of mail offering me credit for the last 3 weeks!!!What’s happened?!? Have you all noticed this?? Are you like me?? Did you once get hounded with phonecalls and letters offering you credit and now… nothing, not a peep. I mean it’s no surprise, but it is very telling at the same time.
October 24th, 2008 at 6:00 pm
Alexcanuck-Dave is outnumbered 25 to 1, it’s safe to for a Dave comment!
October 24th, 2008 at 6:10 pm
too much of a wussie to handle a correction.
Account #1 The house money. Up 4.25% That we don’t play with.
Account #2 RRSP’s I play with. Up about 40%.
Account #3 RRSP’s I don’t play with. Up about 4%.
Account #4 Non-RRSP’s About flat. I tried to catch some falling knives and lost all my gains. Not too much there, and flats pretty good this year, I hear!
Account# 5 Tiny left-over, I just didn’t bother to touch it. Down 35%. Probably a mirror of your RRSP.
All in order of size
OK, I admit it, I’m a wussie. At least I have the balls to make up a name!
October 24th, 2008 at 6:15 pm
“As far as what I do and who I am… I prefer to keep that to myself. I have only posted under the name of Dave. If VHB identifies himself publically, then I will.”
I’m not really interested in who you are as in what is your real first name and real last name. I’m more interested in what you do. I don’t care if you are this dave or that dave, except insofar as the other dave is arguably a realtor. I just want to know if you have this thing called “conflict of interest”.
by the way, i rather think comparing yourself to VHB is pointless. He’s got more credibility than you do…
October 24th, 2008 at 6:20 pm
Dave, then you are just as anonymous as anonymous, so STFU.
Are you really that dumb? Anybody can post under Anon. There is only one Dave.
October 24th, 2008 at 6:28 pm
Here is the only registered Dave’s response to Sarah’s question of Sept. 20/08 about whether she should by a downtown condo.
Dave Says:
September 20th, 2008 at 7:07 pm
Sarah, thank you for your question. It comes across as troll bait, but I will answer it nonetheless. I would have believed it without the word extensive.
There are more things to consider than just price and they all depend on your personal situation. Every market is a good time to buy for somebody.
In the short term (over the next year) I am expecting further price decreases. In the medium term (4 to 5 years) I am expecting a flat market and of course I am bullish long term (past 2014). We will probably end the year down 7%-8%. I originally predicted 5%, but the declines started faster than I anticipated. I expect 2009 to maintain the negative declines and I think they will level off sometime in the second half of the year with declines of about 1% per month. We are about 4% down so far and probably have another 6 to 11% to go, which is around $20 to $40k off the current price of the unit you are viewing.
I would presume that you are a first time home buyer as you are buying a 1 BR. I would guess you probably pay around $1000 in rent per year. So, knock off a year of rent and your marginal savings might be $10 to $30k.
But that’s only price. There are obviously lots of other factors. If you like the area, like the unit, can afford your mortgage payment and plan to live there for a long time, then you will come ahead financially in the long term. If you try to time the market, then you are basically a speculator. The good news is that in the long run, you win.
Current score: 0
October 24th, 2008 at 6:30 pm
Nobody is saying Dave is not Dave. But he is STILL anonymous. Are you really that dumb?
October 24th, 2008 at 6:36 pm
If only one Dave can post and it’s locked to Dave@revnyou then Dave must be Dave.
Dave are you denying that you are Dave Peniuk?
Are you denying being a realtor?
Are you denying that you just got your mortgage brokers license?
Are you denying being wrong about everything you’ve posted?
October 24th, 2008 at 6:37 pm
Quite the opposite, which is why “Dave” is just as anonymous as “anonymous”.
October 24th, 2008 at 6:51 pm
From Daves website
“About Dave Peniuk & Julie Broad
As if being newlyweds and real estate investing partners wasn’t enough – we’ve decided to do adventure races together too! So if we’re not at work (where we both work in the real estate industry in Vancouver)”
October 24th, 2008 at 6:59 pm
Hello Mr. Pope, is there any chance of having a review of what the experts have said in the last year?
You know a trip down memory lane, regarding the scientific and unbiased report which was published in the Vancouver Sun something about the myths regarding RE in Vancouver and how it was an infallible investment.
We could throw in a few links with quotes from Pastrick, Muir, Robyn Admanche, and I forgot who it was but it was a realtor who pumped North Van and claimed the region was “ bullet proof” .
Perhaps we can top it off with some insightful quotes from Tal, Holt, and Tsur.
Of course no review would be complete without quotes from Phil Soper, or Flaherty
Carl Gomez, Craig Alexander, and Tony Joe.
October 24th, 2008 at 7:02 pm
kaeotp: That is a great idea!
October 24th, 2008 at 7:03 pm
If only one Dave can post and it’s locked to Dave@revnyou
Where do get this from? Was “Dave” registered at the time of revnyou-Daves posting? Do you have access to The Pope’s computer? Don’t derail a good thread, please!
Treat Dave the person with the respect another human deserves. Treat his crazy and dangerous ideas about the state of Vancouver RE with the contempt they deserve. Only way he will learn. Public mockery actually works quite well in getting a person to adjust their thinking. I like that idea about pulling up some of his early “predictions” to laugh at. But let’s not get too vicious just because it’s “fun” to join in the bullying.
October 24th, 2008 at 7:14 pm
Yawn… Anon, what’s the point of bringing up that post. I called for a 15 to 20% correction in it. Last time I checked, we aren’t there yet.
October 24th, 2008 at 7:19 pm
Alex, how is calling for a 15 to 20% correction crazy and dangerous?
Funny how people here don’t attack posters who predict a downside difference of the same magnitude from their own prediction. It’s very telling about how insecure many are in their analysis. Wishful thinking perhaps?
October 24th, 2008 at 7:19 pm
Dave: the point of the post is that Sarah asked you to give her advice if you were a REALTOR, and you did. So implicitly you are a realtor.
October 24th, 2008 at 7:22 pm
Anon, that is not true. Her question was not conditional on my being a realtor.
October 24th, 2008 at 7:46 pm
Sarah asked you:
You are a realtor, right?
October 24th, 2008 at 8:00 pm
Anon, a realtor I am not.
October 24th, 2008 at 8:20 pm
Of course no review would be complete without quotes from Phil Soper, or Flaherty
Carl Gomez, Craig Alexander, and Tony Joe.
Carl Gomez is my hero. Seriously. He deserves some credit for going out on a limb about the Vancouver market.
October 24th, 2008 at 8:26 pm
I am a realtor
October 24th, 2008 at 8:27 pm
“Yawn… Anon, what’s the point of bringing up that post. I called for a 15 to 20% correction in it. Last time I checked, we aren’t there yet.”
refresh my memory… was that the prediction you made to correct your earlier prediction? you know, the one you wanted to be on record for since your first recorded one was incorrect?
October 24th, 2008 at 8:27 pm
Yes, gomez is a hero of sorts. Kept me in my right mind when everyone was saying buy, buy, buy. Remember Vancity’s motto back then “I want, I want”….
October 24th, 2008 at 8:29 pm
Remember when Vancity was pumping mortgages for “friends to share”…
October 24th, 2008 at 8:51 pm
Anonymous:
I certainly do. It was the exact moment (just after I moved here) when I realized the RE market was f**ked and everyone who had bought in was wayyyyyy too stupid and greedy to see what was coming.
I’m told I have an evil laugh in real life…. several of my friends want me to hang out and frighten the neighborhood children oh Haloween…. so….
Muaahahahahaahahahahahahahahahahahahahahahahahahaha!
Scream suckers scream, it’ll do you no good. That’s it pretties….. run! Run for the exits! It’s too late, you’re already dead!
Muahahahahahahahahahahahahahahahahahahahahahahaha!
October 24th, 2008 at 8:51 pm
Welcome to the “Dave Hour”
Guesr host “Dave”
Sponsored by “Dave” and friends
(oh s-h-o-o-t me
p-l-e-a-s-e )
October 24th, 2008 at 8:54 pm
hey scullboy
…and Don’t forget the flying monkeys
ahahahahahahahahhaaaaaahhhhhhaaaaaaahhhhhhaaaaa
October 24th, 2008 at 8:59 pm
lotsa “bear blog”
he said she said tonite…..
whatsa matter
market too scary to talk about?
BOO!
October 24th, 2008 at 9:00 pm
I remember when my co-workers were all bidding on houses in 2006. One was so stressed because she and her husband kept being outbid. One day she finally had the highest bid and she was flying for a good year and a half. Pouring money into her new house. About half of them bought new houses in 2006. They were all so giddy. And now, as someone said, the thrill is gone. Two have been trying to sell since May this year with no luck. When I ask people at work how they are now they just say “Good”. No smile, no dancing, no excitedly telling me about how they are “business people”. Just “Good”.
October 24th, 2008 at 9:04 pm
Dave { 10.21.08 at 4:16 am }
Yes, I am a realtor. I try to deny it, but it’s getting harder and harder to suppress.
Posted on Rob’s blog a few days ago.
Crazy because of how breathtakingly wrong you were when you started posting.
Dangerous because of what listening to people like you can do to a young persons financial future.
October 24th, 2008 at 9:17 pm
Freako, you might want to revist Gomez’s constant flip flop.
He primed the pump as well.
“Canada’s red-hot housing market is on a solid foundation because there is very little evidence of speculative activity,” says Gomez. “While a modest cooling is in the cards this year and next, there are a number of misconceptions about the state of this housing market and where it’s going.”
http://realtytimes.com/rtpages.....bubble.htm
and:
http://www.realestateinvesting.....Bubble.pdf
I will admit he was not as shameless as Tsur,Patrick, or Muir.
October 24th, 2008 at 9:31 pm
It’s a safe bet Dave is a realtor and Alexcanuck is a wussy. Dave is only outnumbered ten to one right now, better keep quiet Alex, we know you don’t like stress.
October 24th, 2008 at 9:34 pm
Next F*cker that gives me a negative score I will FORECLOSE on and repossess their Beamer…ahahahaha
October 24th, 2008 at 9:39 pm
anyone mentioned the pier in north van? ctv news says work’s stopped on it. something like half a dozen towers and a national maritime centre. developer and mayor says it’s just a temporary thing while they iron out subdivision problems and they are not in any financial trouble. oookay…
October 24th, 2008 at 9:45 pm
i saw a CBC news crew interviewing the site foreman at Concord Pacific Erikson tower
on False Creek…
getting the news out….
good on ya!
October 24th, 2008 at 10:38 pm
“Scream suckers scream, it’ll do you no good. That’s it pretties….. run! Run for the exits! It’s too late, you’re already dead!
Muahahahahahahahahahahahahahahahahahahahahahahaha!”
This is very interesting to read because not long ago scullboy bdk and strataman had great advice for people to invest in stock market rather than real estate so you three and those who took your advice are already
Muahahahahahahahahahahahahahahahahahahahahahahaha!”
Buy real estate today and pay off your mortgage quickly you guys are four year older than you were before !!!!!T!h!i!n!k!A!b!o!u!t!I!t? did your friend tell you that?
October 24th, 2008 at 10:40 pm
Geez guys, do a search for “Dave” in this thread, actual posts by the guy are outnumbered at least 10 to 1 by people speculating.
He’s just some blowhard who thinks he’s a lot smarter than he actually is. It really doesn’t matter what he does for a living, he’s the intellectual equivalent of a mama bird, he just sucks in information and regurgitates it (unlike Krrish, who provides us with the stuff that comes out the other end).
Here is everything you need to know about Dave.
1) He thinks he is some kind of genius.
2) He is not a genius, most likely he has a slightly above average IQ.
3) He loves getting attention, which is why he makes such an effort to be in a place where he can disagree with virtually everyone (probably was ignored a great deal by his parents in his formative years, remember that kid in your class who stuck up his hand all the time but didn’t really have anything intelligent to say, that’s Dave).
4) In spite of what he says, he’s not here to help us find the path to true real estate enlightenment. (see #3)
5) He is somewhat educated, either college or university.
6) He is probably suffering from either obsessive compulsive disorder or something similar which causes him to ignore the possibility he could be wrong and to shut out any information that contradicts what he wants to believe.
7) He has said openly that he will admit to being wrong (and hopefully throw in a few mea culpas and some grovelling) if prices fall more than 20% below peak, so let’s all hope he’s still around for that joyful moment (although I suspect he’s likely to drop out of sight around -16%).
I can’t think of anything else that matters.
October 24th, 2008 at 10:51 pm
Hey Drachen, how are your stocks doing, about the same as Dosh’s condos? As a cash is king kind of person I find it a bit moronic to relish a downturn in any market, can you not be humble enough to just think ( I told you so) rather than gloat on a daily basis? Me thinks you need a life.
October 24th, 2008 at 11:02 pm
Dave’s a smart dude, he can get people talking pretty easily. It’s hard to imagine life now without Dave, we’d be a bunch of bears sitting around with our ING statements in hand.
October 24th, 2008 at 11:04 pm
About half of them bought new houses in 2006. They were all so giddy. And now, as someone said, the thrill is gone. Two have been trying to sell since May this year with no luck.
Why are they trying to sell? Maybe because they couldn’t really afford the 2006 price and were counting on price appreciation or higher salaries?
No bubble here.
October 24th, 2008 at 11:34 pm
I do believe they were counting on appreciation. Salaries are the same.
October 24th, 2008 at 11:41 pm
A small anecdote on leaky condos: I’m renting a Yaletown condo and moving in next month. The owner has mentioned that they are currently in the process of replacing a window or two… and the building is only 3 years old.
October 25th, 2008 at 12:08 am
cuba
“I find it a bit moronic to relish a downturn in any market”
Well, you’re not really thinking things through then.
The real problem is the bubble. It’s been hurting buyers and sideliners for years. The only fix is a crash and it just so happens a crash was inevitable, the sooner the crash happens the less damage it does…
So, you tell me, who’s the moron.
October 25th, 2008 at 12:13 am
Allure Townhomes Give Away Weekend
We will make you a deal you can’t refuse.
Been reading the blog for awhile…thought I’d contribute this nugget….
http://www.facebook.com/pages/.....9756295077
October 25th, 2008 at 12:41 am
I do believe they were counting on appreciation.
Buying an asset for expectations of appreciation rather than value of use or earnings is the definition of a speculative bubble.
October 25th, 2008 at 1:16 am
“Remember when Vancity was pumping mortgages for “friends to share”…”
I’d love to hear some stories about how those turned out
October 25th, 2008 at 2:09 am
I have a question I have been pondering and talking about with my finance buddies. Its a growing problem that has gotten 0 attention. North american governments are very reactive instead of proactive in downturns
What role do you guys think the baby boomer generation will play in this whole mess?
Do you think its active now or will it be a problem in say 10 years? I ask this because although the workforce can be seen as contracting it will not be at its worst until 12 years from now.
Better then talking about how dave likes his toast
October 25th, 2008 at 2:11 am
“I’d love to hear some stories about how those turned out”
You will. Just wait until the news is full of repossession sob-stories. It’ll take a few more months for that to happen, but it will.
October 25th, 2008 at 2:16 am
jack (137)
Thats a good post. I dont know anything about the area specifically however I looked it up on the map and its right in between two highways…
majestic? oh yes!
Also there using facebook so these could be likely candidates for liquidation.
October 25th, 2008 at 3:22 am
What role do you guys think the baby boomer generation will play in this whole mess?
It has been well documented that most boomers do not have nearly enough assets in pension vehicles to fund their retirements at the level to which they have been accustomed.
Surveys have also found that many boomers are counting on selling their houses to provide funding for their retirements.
Connect the dots.
October 25th, 2008 at 7:12 am
Drachen, I would be willing to bet that you are describing yourself with those predictions. Psychologists call this projection. I would also be willing to bet that you are a deeply insecure person, which explains why you have to lash out negatively so frequently. You will notice that I treat people with respect and do not denigrate them in an attempt to make myself feel better. You on the other hand do the opposite.
October 25th, 2008 at 7:56 am
The current downturn in the stock market is really not at all hard to fathom. After all, the majority of companies in the index has been trending downwards, PE wise, for 8 long years before this crash. Ever wonder why so much money had gotten into real estate?!?
I had said this before in previous posts and I will say it again that today, major US corporations are even cheaper in valuations. Mr. Buffett has been buying some and in fact, this is not his first. In the late 70s, when there was another crash, he had been buying undervalued stocks and had made double digit gains for his shareholders for 20+ years, while the index was essentially going nowhere until 1993. Having said that, the Nikkei index had been doing just back after the late 80s bust for 19 years, also essentially going nowhere and still down.
A clip of 20 to 30% in share prices should be a kin to a Christmas sale on that HDTV you’ve been wanting to buy. And yet, while we think nothing about sale prices on consumer items, we cry and cringe and make a big deal when the stock market plummets by just 30 to 40% In our lifetime, we had seen and experienced sometimes a 60-80% meltdown in our portfolio in individual stocks. If you want an example, check Pilgrim’s Pride now at $2 and something change. People used to pay $20 to $30 each share before the crisis happened. That’s a drop of 90% for the second largest chicken producer. Did we all stop eating white meat?!? In fact, chicken is less fatty and healthier.
There are other myriad examples of US corporations that sell good products, but are just hammered down to oblivion.
History has shown that the stock market is always a precursor to what will the economy do in the next 6 months or so. It is also a precursor to an economic upturn where stocks can go literally up 100 to 200% after a crash. The reason for this is in its liquid form.
Real estate is illiquid, so the drop is quick initially in the next 2 or 3 years or so and then sort of trend downwards very slowly and painfully. For Vancouver, this particular boom has been spectacular, but the downfall will equally be as spectacular. Mark my words — it will become very painful and nasty as today’s homeowners I suspect are less loyal to their homes than previous generations. Today’s workers are spoiled by good work benefits because of poor employee retention — plenty of jobs everywhere. When the downturn hits and when jobs gets more difficult to find is when people will start pondering if they either want to keep paying into the expensive mortgage or walkway. I don’t really think that if people are used to a carefree and unattached lifestyle, then all of the sudden you are forced to sit in a jail deprived of your freedom you are so used to and be able to just suck it up. You are basically forcing people to save, when if fact, they are spend junkies for so long. It will require a major shift in their mindset, which will become a difficult adjustment for some. But adjustments will come as it did in many last booms of the past and bust that followed.
All I’m reading here is that, people welcome a recession or a depression since now, home prices will drop to a point that they can now afford. There’s a saying that a rising tide raises all ships. A falling tide does the opposite..
During a downturn in Japan, the only people who would maintain a reasonable amount of spending were those who are employed by the government, or industries that are relatively recessionary proof. You need to think that getting a job in a recession is going to be much tougher and you’ll be competing with hundreds of job seekers who have equally or more qualification than you do. So unless you are in this position, you will never experience the pain. When people reached that stage however, I don’t think they’ll think about buying a house than putting food on the table and paying rent.
Especially when you start seeing home prices trending down year after year for years like the Nasdaq, you’ll think nothing about homes unless you decide to plant your roots firmly and permanently in Vancouver. So, it all revolves around your job security.
Today, you need to think about how secure is your job. Sure, you might not get a raise next year, but at least you’ve got a paycheck. Most government workers need not worry I think.
October 25th, 2008 at 8:06 am
Sure, Dave. You are so wonderful. There’s another psychological condition called DELUSION.
October 25th, 2008 at 8:13 am
Dave, I thought we had talked about this. Please stop insulting people. People will accept you better if you stop it with the personal attacks. To say
“I would also be willing to bet that you are a deeply insecure person, which explains why you have to lash out negatively so frequently. You will notice that I treat people with respect and do not denigrate them in an attempt to make myself feel better.”
is simply demonstrating your delusional psychosis. I have an opening today so it’s best if you come in around 2 pm.
October 25th, 2008 at 8:16 am
Dave said:
Yawn… Anon, what’s the point of bringing up that post. I called for a 15 to 20% correction in it. Last time I checked, we aren’t there yet.
I say:
Dave knows real estate is an illiquid asset, so he knows it takes time to drop. It is this period of time that he hopes people will be convinced that there is no drop at all and hopefully come back and fuel back the bubble. It’s a kin to someone that keeps trying to throw matches into a dying fire deprived of oxygen and fuel and telling you that, yes like Tom Hanks on the island with Wilson by his side, I will make “fire”!
In order for real estate to realize real loses, you need people to start selling and buying homes. Prices can’t drop if there are no buyers. If you have an imaginary 1 million dollar home that can’t be sold, it’s still valued the same. If you drop prices down to say $800,000 and it got sold, then that is your realized price. But ofcourse, the neighborhood gets the same hair clip too. So unless you’ve got buyers who buy, prices may stay stagnant for years.
With the US however, the foreclosure rates are increasing and that is very healthy to the correction phase. It is speeding up the depression of prices so buyers are willing to buy at a higher discount to the dollar, which helps restore the equilibrium of market pricing reality.
Vancouver, however, is a different beast. It had for years, except in the 80s downturn, resisted extreme drastic price reduction. That’s why, Tom Vu’s seminar which attracted many people in the late 80s that came out, tried it and failed mostly. Drastic price reductions are what is healthy which restores equilibrium to market pricing reality. Ofcourse, it’s not all that good to the sellers, but this is something the market has to do.
We may revisit the 80s style correction in our RE soon enough because of several factors that are now working against home owners. Retiring baby boomers, negative savings rate which may force strapped home owners to forced sale and bleak job outlook.
It’s brave for Mr. Gordon Campbell to try and save construction jobs by offering infrastructure programs for them. But then again, Japan had done this many years ago and yet, it did not help one bit, because what the politicians do not realize is that, when the fire is burning out, you can’t throw more matches in and hope it lights up again. You need either oxygen or fuel, ie easy credit and buyers that have all but dried up.
October 25th, 2008 at 8:27 am
Hey Dogs:
I still stand by what I said:
1) Better to lose half your savings in a stock market dip then half the value of a Vancouver property when the bubble pops. Do the fucking math.
2) If you have an emergency you can cash your stock in a matter of days and gain liquidity, though you may have to accept a loss on investment. Of course, you can claim that loss on your taxes.
Yeah I’m four years older then I was then. Guess what? In that four years I’ve discovered I *hate* office jobs and I’ve decided to change careers. Since the cost of my penthouse apartment is a whopping $850 / month (seriously) I can afford to live on my savings for a while until I finish school.
How many Vancouver real estate moguls can manage that?
You’re supposed to invest your savings you fucking moron, not borrow money from the bank to purchase an asset that’s STILL going to cost money to own!
Wow, my language is a little salty this morning. Well, I’m off to play with knives at school. If any of you need a professional chef, let me know.
October 25th, 2008 at 8:28 am
Some stay polite and call Dave wrong. Some aren’t polite as they call Dave wrong. Some just aren’t polite to anyone, don’t care about right or wrong. Not many left to call him right, now that Bill God, er, Good has stopped pumping RE.
The market doesn’t much care, but has already called Dave’s earlier predictions wrong, and will soon be calling anyone who listened to his type in the past 3-5 years “Poorer, Poor, Underwater or Bankrupt.”
With no politeness at all.
October 25th, 2008 at 8:45 am
Right on, scullboy. I’m looking at a career change and going back to school, and I’ve never been so thankful to be a renter with money in the bank.
People are now going to discover how homoanership can remove their ability to escape the rat race and build a better life. Its a trap.
October 25th, 2008 at 8:47 am
Alexcanuck: You are so right. The market doesn’t lie. p.s. I like your name!
October 25th, 2008 at 8:55 am
Dave
I was just trying to help you out buddy, I’m tired of seeing all the crazy speculation about you.
FYI, my IQ = 155 (yes I’ve been tested)
I don’t see what you could have found very insulting in the rest of that (is college educated an insult now?) nor do I see how any reasonable and intelligent person could think I was describing myself. The fact that you’re feeling insulted that I said you have an above average IQ says something about your personality though (OCD anyone? insecurity about your intelligence?).
October 25th, 2008 at 8:56 am
Hi folks, I am Dave’s therapist and I would like to apologize for his behavior. You must understand that he is a realtor, and it is very common if not a requirement for realtors to suffer from a condition called delusional psychosis. They also tend toward narcissism. I am trying my best with Dave who I try to see for an hour a week. Most of my realtor clients, once they come to the realization that they have the delusional condition, due in part to the industry’s cult-like characteristics coupled with their own sense of insecurity and greed, will quit the profession and go on to try another career. We are seeing this happen in large numbers now because the market is forcing them to acknowledge reality and it is becoming more and more difficult for the delusional condition to grow and flourish. Please be patient as there are only so many therapists to go around and we are extremely busy these days with stressed home-sellers, stressed recent home-buyers and laid off construction workers and their families. Take care and remember that having financial security is the best cure for mental distress.
October 25th, 2008 at 8:56 am
“I still stand by what I said:”
fuck off
forbes list of dummers like you just got disapear the only wealth they have got left is their real estate you fucking idiot no body is idiot like you- no fucking body.
how do you like this math?fucking dum head
October 25th, 2008 at 8:59 am
Anyone else notice this one didn’t sell? (Bet they appreciated the showing on the Global article!)
V712572
967 BEATTY ST
155 days on market
$467 per square foot
Showings Friday October 24th 5-7 PM and Saturday October 25th 11-1 PM. Offers will be presented on Saturday October 25th by 5 PM. Don’t miss out on this great opportunity.
October 25th, 2008 at 9:09 am
Drachen: A bit of free advice — not a good idea to publicize your IQ. The average is 100 and 70 represents developmental delay. The standard deviation is 15, so 99% of the population fall between 70 and 130. To say that you are more than 3 standard deviations above average makes you, well, deviant in a way. It’s kinda like someone saying they have a penis the size of a baseball bat — we just don’t want to hear people bragging.
http://tinyurl.com/2nv4t2
October 25th, 2008 at 9:11 am
Re: Carl Gomez.
In 2005 he actually crunched some detailed numbers and said the following:
“However, there is little justification for the double-digit pace of condo price growth beyond speculation (see below) suggesting that these properties may be at the heart of a potential housing bubble in Vancouver.”
“Meanwhile, condo prices in Vancouver have been accelerating well ahead of what would be implied by the user cost of capital. In fact, even allowing for a generous 5 per cent ownership risk premium, the current rate of condo price appreciation is still about 10–15 percentage points faster than what it should be, suggesting that Vancouver’s condo market may now be at its most overvalued point in years. What is responsible for this situation?”
October 25th, 2008 at 9:13 am
More Gomez from the same 2005 report:
“Thus, the only reasonable explanation for the outsized pace of price growth in Vancouver’s condo market is due to heightened expectations of future capital appreciation or put simply, speculation. For example, the user cost of capital suggests that a current condo “investor” in Vancouver is likely to be willing to accept below-fair-value rental yields since they assume that future price appreciation will cover the loss. It does not matter whether such an “investor” plans to flip the property in six months, one year or two years. All that matters is that an investor’s decision to buy has been predicated on expectations of significant future price growth – the exact definition of a price bubble.
Potential homeowners are also capable of such speculation if they are willing to purchase a condo whose costs of ownership are greater than the cost of renting a comparable property. Again, this potential homeowner has made the decision to buy based on the belief that significant capital gains in the future will offset any losses incurred by not renting currently. ”
October 25th, 2008 at 9:20 am
Van Man speaks the truth.
So much of the trauma and shock around this inevitable downturn is not people going broke, it’s people’s precious LIFESTYLES being threatened:
Baby Boomers realizing they may not be able to retire at the age they wanted, live the way they did when they had steady income, travel around the world etc(you know all the crap they show in those “freedom 55″ commercials) – and their kids who (through no fault of their own) have been spoiled rotten by a boom economy and have come to expect a coddling job market and promotions, new cars, new clothes, vacations, and owning a house in your twenties or early thirties (all debt financed naturally).
Economies cycle. Get used to it.
October 25th, 2008 at 9:26 am
looks like satv is back, only with a different name and he’s left his english mangler behind. very clear case of why we need the invisible tiny text feature.
October 25th, 2008 at 9:28 am
The bubble was fuelled by discouraging saving, printing money, and creating debt.
Now the people are fed (pun intended), the myth, that if you discourage saving, by lowering interest rates further, and encourage more debt, that somehow things will right themselves.
Oil is priced in the $60’s, down from the $140’s, copper, trees, and basic materials prices have crashed, the $cad is down by 20%, good paying jobs are disappearing, and being replaced by $15.00/hr jobs.
Most people I know still can’t connect the dots; they think the housing troubles are just in Detroit, I was at a social gathering earlier this week, and the general consensus was that Vancouver RE might only appreciate 4 or 5% for the next couple of years, but should resume its upward trend thereafter.
Bill Good, and his financial panel of experts, has done an incredible job of mass hypnosis.
October 25th, 2008 at 9:28 am
FYI, my IQ = 155 (yes I’ve been tested)
And you call me the blowhard?
I am not so insecure that I feel I need to post my IQ or defend my intelligence.
October 25th, 2008 at 9:32 am
Please, folks, excuse Dave’s aggression. It is part and parcel of the realty check he is experiencing during this difficult time in his career.
Dave: I’ll see you at 2 then?
October 25th, 2008 at 9:55 am
I remember visiting one of my friends who lives in Van West in the Spring of 2006. She and her family had been experiencing extreme financial difficulty due to health issues (the family breadwinner had suffered a debilitating accident). Well, on the day of my visit she had just returned from the bank and she was exuberantly dancing around exclaiming how wonderful the world was — how beautiful her neighborhood is, and so on and so on. It almost seemed like she had taken a euphoric drug of sorts. Well, apparently the bank is not treating her as well anymore — the family home of 25 years is up for sale.
October 25th, 2008 at 9:58 am
Economist article on China’s property crash
My favourite tidbit:
The Chinese press says that in September around 100 homeowners in the eastern city of Hangzhou stormed into the offices of Vanke, a big developer, to demand compensation for falling prices.
Didn’t take the Chinese long to learn the Whiny School variety of capitalism, did it?
October 25th, 2008 at 10:10 am
Here’s some bull facts for you :
1) The stock market has tanked completely. If you were a RE bear and invested in the stock market congratulations you lost 5-10 years of your life. Good job.
2) Real estate remains one of the best investments out there. I own many condos and SUVs and it’s truly the best thing that’s ever happened to me.
3) Credit cards and lines of credit are like modern savings accounts. If you don’t borrow at these rates you’re a fool.
4) Rich asians are still rich. They were the ones who sold their stocks before the RE bears did. Now they’re buying condos. Meanwhile bears are still hungry.
October 25th, 2008 at 10:20 am
I took a mail order IQ test once, i paid for the more expensive one as it guaranteed a higher number. Smart people like cartoons.
October 25th, 2008 at 10:23 am
As for the discussion of stocks versus real estate, most people lose less on stocks than on real estate. The majority of people that purchase real estate will get a mortgage of some sort – that is, they need to borrow. When you borrow money for a mortgage, that is equivalent to going on margin for stocks in a long position.
Ironically, most people don’t go on margin for stocks – they simply buy it with cash and hold (ie. think of all the mutual funds people own). Thus, if you include the real estate you own as part of your portfolio, then almost everybody’s portfolio is heavily weighted in the real estate they own.
For instance, somebody that owns a $1 million dollar house may only have $100K in stocks. Now if stocks go down by 50%, this person loses $50K. But if real estate goes down by 30%, this person loses $300K.
Unless you buy on margin, stocks can only ruin your current net worth. Real estate on the other hand will ruin your life 20 years down the road.
For those specuvestors that are stuck watching their property values plummet, they will be paying for their mistakes 20 years down the road. If you’re a specuvestor, you need to cut price and get out of the market now because you know at heart, you’re losing that much more money as the real estate market plummets.
October 25th, 2008 at 10:55 am
Wow lots of Internet Tough Guys in here. IQ scores? Come on people. It seems like these interesting times bring out the worst in people. Drachen, how’s the air up there on Mt. Olympus? How do you tolerate us plebs and mouth breathers every day?
And on the topic of Dave, he has a point of view, point out he’s wrong and move on, or ignore him. Who cares what he does? If he has an agenda it will show through. Certainly nobody on this blog is going to influence the Metro Vancouver RE market in any real way.
October 25th, 2008 at 10:57 am
Gadwin,
you did not get the fact straight go attend the world summit where top leaders are trying to figure out how to put diapers on stock investor while home owners still own their house watching crunch on their high definition television.
Also get these fact straight your math is wrong and self designed watch the forbes list next year only bill gates has managed to survive some how with his fakely claimed secure vista (still you need nortan as before),every one else is bleeding wake up dum head try to under stand whats going on around you basement hat.
October 25th, 2008 at 11:06 am
Most government workers need not worry I think.
In the early 80’s govt. workers were forced to accept a 10% pay cut rather than the govt. laying off 10% of the workers.
So they all kept their jobs, but a 10% cut hurts — and a similar cut now would really hurt, when people have no savings — i.e. they spend all they make and more.
October 25th, 2008 at 11:10 am
Guess when this was said:
“The continued strength of the real estate market is a reflection of the economic vitality seen throughout the province. With overall wages on the rise and unemployment in decline, buyers and sellers are left with a healthy and strong climate in which to operate,” says REBGV president Brian Naphtali.
http://www.realtylink.org/what.....?news=0108
Just keeping an eye on the pimps.
October 25th, 2008 at 11:17 am
post 167 john,
Will you stop with the rich asian thing. That is so sterotypical. Not all asians are rich some have very modest incomes. Just becaause they haave Mc Mansions…doesn’t mean rich . They could be leveraged to the hilt. We live in a consumerist society…it’s not what we need it’s what we want now!
The very fact that you think SUVs are good value shows your apitutude for investment. It depreciates in value once you drive it off the lot. You might want to check howw much your Plasma/ LCD Tv is worth now. You probably can’t get whaat you paaid for it. Same as your SUV.
Condos are nice…good intrinsic value but still susceptable to demand and supply…there is an whole lot coming into the market in 09-10. The developers try to time it to hit the olympic crowd. There is no way they can retain there curreent value with such a vast supply and continually increasing credit restrictions.
Credit cards a modern savings accounts…haave you seen the % they chaarge. Don’t pay your credit card for a few months . See how much you aare hit in extra payments. It’s an convenience.
I ‘m aam asian by the way…like every other ethnic group there is rich and poor..
But I probably just wasting my time. You believe the beach culture/ quality here is equivalent to the US california, Daytona, Venice…etc
good luck with that
October 25th, 2008 at 11:20 am
“Tony Joe, Victoria Real Estate Board president, responded by saying that there are pockets in the U.S. where the housing market is healthy.
If there is a bust in Canada, “There’s going to be insulated places in the country and with all the attributes that Victoria has, of all the places in the country, we are probably best-insulated,” Joe said yesterday.
In its favour, the capital region has a diversified economy supported by government, tourism, military, retirees, technology and education. Forecasts of net migration of 3,500 this year, plus the shortage of rental housing, further insulate this region, he said”
Just keeping an eye on the pimps,who saw nothing wrong with speculating,hyping and pumping out of reach,from the average joe, a basic human need, such as housing.
October 25th, 2008 at 11:22 am
Anyone who bought a house at the very top of the bubble in 1981 looks like a genius today. Assumption being they handled the negative cash flow for a few years. They’re not making any more land here, keep in mind peoples.
October 25th, 2008 at 11:36 am
stu: that’s a BIG “if”.
October 25th, 2008 at 11:37 am
stu: that’s a BIG “if”. and the question is — will they look like geniuses tomorrow?
October 25th, 2008 at 11:39 am
stu: did you pass your IQ test? e.g., did you get more than 70?
October 25th, 2008 at 11:40 am
“They’re not making any more land here, keep in mind peoples.”
That is so true, and everyone should know how fast land wears out, and that it is virtually impossible for people who own a lot of land to get involved in municipal politics and get the land rezoned for development.
It is also true super rich foreigners buy up whatever miniscule land supply we have in British Columbia, and they get it towed to Asia and we never see the land again.
October 25th, 2008 at 11:42 am
stu: anyone who bought a house at half price after the 1981 crash is even more of a genius and didn’t have to go through a world of hurt for the past 20 years to pay for it.
October 25th, 2008 at 11:43 am
I understand what you guys are saying, nonetheless i think real estate is a good investment, generally the cash flow gets better over time. I’m not big on stocks, contrary to what many think stocks are not a good inflation or deflation hedge.
October 25th, 2008 at 11:46 am
Stu: sorry to say, but you sound a bit ill informed.
October 25th, 2008 at 12:06 pm
Anyone who bought a house at the very top of the bubble in 1981 looks like a genius today.
Because they broke even (in real terms) after 25 years? You need to raise your standards of what “genius” means.
No more land? Thank god Canada has an ample supply.
October 25th, 2008 at 12:17 pm
At the top of the boom in 1981 west side bungalows were going for the unheard, incomprehensible amount of 300,000 dollars. The eastern outpost of Coquitlam was under contstant logging to build new subdivisions, Coquitlam was being transformed from untouched rain forest to single family housing for those growing families looking for a rural experience.
October 25th, 2008 at 12:19 pm
stu: do you live in Coquitlam by any chance? Westwood Plateau perchance?
October 25th, 2008 at 12:23 pm
stu: Have you ever thought of writing a book? Sounds like you’ve got one in there (wink, wink).
October 25th, 2008 at 12:25 pm
Is Stu just another John trying to take the blog off topic? It looks like satv is trying a bit harder but he’s still an idiot.
If a townhouse can’t sell for $467 / sq ft in yaletown how are the specuvestors going to get double that for all the new units that are about to go up for sale?
We have a shortage of renters and buyers here but otherwise everything is great!
October 25th, 2008 at 12:26 pm
Stu: come clean now — how many WP condos are you trying to unload?
October 25th, 2008 at 12:27 pm
Ha Ha, I’m relatively new to this blogging technology, it is a bit fun. I can see why the kids wonder around pounding their blackberries all day.
October 25th, 2008 at 12:31 pm
Prices can’t drop if there are no buyers.
There are always people who are willing and able to buy.
There are also always people who have to sell due to death, divorce, relocation, etc.
The point where the number of buyers equals the number of sellers is called the market price.
There will always be sales because there are always people who have to sell.
October 25th, 2008 at 12:55 pm
Stu: nice cop-out. When in doubt there is always the airhead response “I’m just new here”.
October 25th, 2008 at 12:58 pm
At the top of the boom in 1981 west side bungalows were going for the unheard, incomprehensible amount of 300,000 dollars.
That’s right, and a few years later the same houses were selling for 150K. I know a guy who bought one.
October 25th, 2008 at 1:02 pm
Don’t worry son, I’ve seen a lot of water go under the bridge, I’ve forgotten more than you’ve learned. There are some excellent condos available on the plateau, highly recommended.
October 25th, 2008 at 1:06 pm
Stu: you’re not really a blogger until someone calls you a dumbass, so here goes: “Dumbass Stu!”
October 25th, 2008 at 1:08 pm
Oh, and Stu, another you need to know is not to be sexist. This is the internet, not a masonic lodge!
October 25th, 2008 at 1:10 pm
Stu: I hear marijuana use is bad for the memory. So sorry.
October 25th, 2008 at 2:30 pm
STu says “I’ve seen a lot of water go under the bridge, I’ve forgotten more than you’ve learned” Okay Stu doubt you’ve seen much in the way of water, and all of us don’t have Alzeimers (yet), the thing I notice most is that my generation (the boomers) are pretty well a bunch of idiots! Easy gravy times, big wages no responsibility, kinda proud of my kids trouble is they will and have to be twice as smart as me! There is no good deals out here nary a one, wait three years and pick whatever is on the market up for 70 % less then today!
October 25th, 2008 at 2:55 pm
Don’t know if someone posted this already, but more good news bwahahaaha
http://www.ctvbc.ctv.ca/servle.....lumbiaHome
October 25th, 2008 at 4:14 pm
RE #199
I’ve been waiting for these stories of fraud to come out in the MSM. Tales of peoples foolishness and fraudulent real-estate dealings marks the death of a bubble.
(if you needed any more signs)
Look for a paper called “historic turning points in Real Estate” Robert J. Shiller. It touches on the similarities in a bunch of cases reflected by the kind of stories told.
October 25th, 2008 at 4:46 pm
My wife and I were talking about the turnaround with respect to Global TV News.
I think the RE heavies are leaning on them to change their slant. This way, John Q. Public will give up cluttering the housing with overpriced stuff that isn’t even moving.He’ll see that there has been a sea-change. (Even Global is saying it’s so!)
What agency/realtor can make any money when nothing is selling?
So, instead of “breaking legs”, we have “Breaking NEWS!”.
October 25th, 2008 at 4:50 pm
from the comments of http://www.ctvbc.ctv.ca/servle.....lumbiaHome excellent link.
Make up a name so we know who you are if you’re posting finds like that!
“linz
Re: Province investigating condo developer Onni.
This story is a testament to the negativity you spread on a daily bases. The fact that these condo developments are not been completed is a huge benefit to the people that bought in. Every one of these buyers will have their down payments returned to them. They have all purchased at the height of the market. If the project was to go ahead they would be living in the condo while watching the value of them fall. Instead they will get refunds and can buy in at a lower price in the future. Your reporting on this does not tell this side because it is a positive aspect. This is exactly why people are tuning off the lame ass negative crap you produce. It is lame of you Shannon Patterson to think of yourself as a reporter when you cannot look past your limited perspective and your stations need to create some sort of controversy where non really exists. If I was one of those buyers, I would be thrilled. Think of all the money I would be saving. Shame on you all.”
John, take note: that’s what good satire sounds like.
October 25th, 2008 at 4:52 pm
Dave,
You ID isn’t even 55. Do you even know what it takes to have an IQ of 155. You are full of shit.
October 25th, 2008 at 5:06 pm
Shiller said it is psychology that pops a bubble, and I have to say the psychology in this town has changed!
October 25th, 2008 at 5:07 pm
Sorry, my link was anon 199. Meant to give credit, messed up HTML
October 25th, 2008 at 5:18 pm
Anon, try reading the thread again. I wasn’t the one posting my IQ.
October 25th, 2008 at 5:26 pm
Re: Post # 126
So far (24) Foreclosures (and a few Beamers to be repossessed).
October 25th, 2008 at 5:33 pm
Dave, we had a good session today. Try to stay on track now. Behavior modification is not easy, but if you are mindful small changes can add up. Be a good boy, now. Good luck!
October 25th, 2008 at 5:36 pm
Dave you start out your post #163 by stating:
FYI, my IQ = 155 (yes I’ve been tested)
October 25th, 2008 at 5:40 pm
Wow, looks like Krrrrish has grown himself a new personality:
fuck off
forbes list of dummers like you just got disapear the only wealth they have got left is their real estate you fucking idiot no body is idiot like you- no fucking body.
how do you like this math?fucking dum head
Does anyone want to comment on the irony or krrish mis – spelling “dum”? Krrish buddy you normally don’t swear like that…. and I notice you’re not saying “real estate goes up forever” or anything like that.
Something wrong, buddy? Is your condo losing value? is your six-figure warehouse job not paying as much?
Gosh buddy, I feel really bad for you. I mean you must have thought you were going to retire off the value of that condo. I bet you thought the thing would go for at least as much as a midtown Manhattan loft.
Ah krrish, I have been waiting fir this moment for two long years. Believe that I am sincere when I say stick around. Post often. Vent your anger on here.
I wanna read aaaaalllll about it.
October 25th, 2008 at 5:47 pm
Dave you start out your post #163 by stating:
FYI, my IQ = 155 (yes I’ve been tested)
Anon, the reason that part is in black is because it is a quote from Drachen. Go back in the thread and see for yourself.
October 25th, 2008 at 5:48 pm
Dave, all of the post is black.
October 25th, 2008 at 6:02 pm
Hey Stu:
If you’ve forgotten more then most of us know, you might wanna pile on the ol’ ginko biloba because your last few posts have me thinking your last name might be “pid”.
I can’t believe I’m the first one to use that line.
You might want to consider how much interest someone would have paid over 25 years on a $300,000 dollar mortgage. Did you factor in the cost of borrowing money to pay for the asset when you said real estate’s a good investment? No? How about taxes? Repairs and renovations?
Somehow I doubt you’ve forgotten more then I know. God I hate arrogant boomers. I really want to see most of them eating dog food in the street.
Except you, Strata. YOu seem pretty cool.
October 25th, 2008 at 6:56 pm
Found this over at condohype:
# condohype Says:
October 24, 2008 at 7:30 pm
BREAKING NEWS! The B.C. Superintendent of Real Estate has launched an investigation into Onni’s disclosure practices connected to V6A.
October 25th, 2008 at 6:56 pm
I recommend three things:
be carefull with today’s marijuana
don’t cook using aluminum pots
take some risks in life
Scullboy, I’m here to help son, open your mind the ass will follow.
October 25th, 2008 at 6:58 pm
Stu, the relationship between aluminum and alzheimer’s was not scientifically substantiated. And it’s longterm use of marijuana that causes memory loss, not just the new stuff.
What kind of condo’s are you holding? Anything interesting?
October 25th, 2008 at 7:09 pm
Sorry son, i cannot banter at this time, the Canucks are doing fan appreciation night. 82 and 94 seem like ages ago. One of the few things i remember. ha ha
October 25th, 2008 at 7:16 pm
Stu: you’re creepy.
October 25th, 2008 at 7:36 pm
Yes, the ass does seem to be following those of us with open minds.
Seriously though, Stu-pid…. is there some sort of window – licker support group that is handing out this blog’s URL? Do you, Krrish, Dosh and Rob all know each other? It is like a Tuesday night thing?
If you’re here to help, could you just please…. you know… fuck off? And can you take Krrrrish with you?
That would be very helpful.
October 25th, 2008 at 8:01 pm
Shiller said it is psychology that pops a bubble, and I have to say the psychology in this town has changed!
I have to disagree with this. In Alberta the market turned at the very same time oil prices doubled. Hard to blame psychology for that.
Bubbles pop because supply outruns demand. Doesn’t matter what people think.
The change in psychology happens later, when people notice that it has become hard to sell and/or a general economic downturn hits. It took from the market top in April to today for psychology to change here. During the 80’s bust it took a whole year from the market top in 1981.
October 25th, 2008 at 8:25 pm
Patriotz:
Here are some old articles on Shiller’s theory:
http://tinyurl.com/5gnnuc
http://tinyurl.com/5gk2zg
He basically stated that it’s psychology (feverish greed) that builds the bubble and lack of confidence (fear) that crashes it.
October 25th, 2008 at 9:16 pm
I would say that fear is always present in the later stages of a market decline, and fear is sufficient to precipitate a market decline, but fear is not necessary to precipitate a market decline. People may still expect price appreciation but simply not have the money to buy, or everyone who wants to buy may have already bought.
October 25th, 2008 at 9:32 pm
Anon #221
If we want to impliment professors analogy/theory there won’t be better time than what we are experiencing these days but recent released report suggest that luxury market in vancouver countinue to defy market trend so shiller have no idea other than maybe or maybe not nobody takes responsibility,lynch did not took so does global news all of them same word may fall,may catch,may follow,following is second example which also defy what shiller got in his improper halloween dress.
“Uber-prime” real estate still hot in London
known as the “super-” or even “uber-prime” slice of the market and typically priced upwards of 20 million ($37 million) pounds — is still far ahead of supply.
And, fuelled by oil and commodity prices which are adding to the wealth of emerging market millionaires, the appetite is showing no sign of slowing under the weight of the credit crunch that is crippling average homeowners, lenders and businesses.Professor deserve some rest now.
Nobody!!!!!
October 25th, 2008 at 10:41 pm
CONGRATULATIONS EVERYONE
I just watched the Global Video and want thank everyone here for their persistence in the face of constant hype, illogical arguments, detractors trying to wear us down and every other kind of capitalist propaganda imaginable but the truth has prevailed finally. People here who tried to expose this BS “Vancouver is special” hype should sit down pat themselves on the back and celebrate. I wish someone would organize a part somewhere and invite all of those who in any way fought this fine battle even if in their own ways. There is room for all kinds in the fight (including gold bugs LOL) and I have to say I am beside myself with pride in this group.
To the evil real estate and building industry in BC that profited from the misery of our own local people and marketed our homes to foreign investors I can only think of one thing to say..F.O.A.D
October 25th, 2008 at 11:30 pm
and every other kind of capitalist propaganda imaginable
Good post but I will quibble with this. Real capitalism means investing to produce income (real goods and services), not buying something just because you think you can sell it to someone for more later.
The real capitalist propaganda has come from the critics of the bubble, not its apologists. What you are talking about is pseudo-capitalist or casino economy propaganda. Which is something different yet again from anti-capitalist or socialist propaganda.
October 26th, 2008 at 12:00 am
Has anybody put together a list of all the canceled or ‘on hold’ condo projects in BC, or an updated Vancouver condo supply list? Just off the top of my head I think the following projects have been put on indefinite hold in the last month or so:
Ritz Carlton – West Georgia
Evelyn – North Van
V6A – Downtown East Side
Skytower – Surrey
Capella – Victoria
Lucaya – Kelowna
Am I missing any?
October 26th, 2008 at 12:47 am
Agents dropping out of real estate business
“The longer we see markets at the current level of sales, the more chance we’ll see a decline in the number of realtors in the province, as some realtors choose to take early retirement or choose to hang up their licences due to lack of business,” says Muir.
From my experience, this means less strippers/realtors and more realtors/strippers. Yikes! Just kidding, you can’t just become a stripper. There are standards.
October 26th, 2008 at 7:16 am
Hmmm:
Baby Boomers started about 1946.
So the lead edge is about 62 years old. Many of them used the stock market and real estate as investment vehicles to secure their retirement. Ouch !
Given it takes about 6-8 years for the economic cycle to rebound, I can forsee a lot of grief for these old boomer hippies who can’t really wait. I am not sure the economic system will ever rebound to the heights the boomers once had or came to expect .
The negative trickle down effect ?…here we come. !!!! Not that I am not sympthetic, but then again their excesses may have lead to them being authors of their own demise.
Ah, well light up a joint…it worked before, right?
October 26th, 2008 at 9:03 am
“had a zero (or better) “house price gap.” Canada emerged as one of these, with average house prices 2 per cent less than the fundamental worth. ”
Yes, indeed, figures don’t lie but liars can sure figure, according to this:
http://www.theglobeandmail.com.....y/Business
Canada’s housing prices are undervalued by 2%.
That’s right folks, housing prices in Canada are 2% less than what the fundamentals would support, so let’s all go to the bank Monday, and get a 700k mortgage so we can buy a crack house on Hastings and Victoria.-The Best Real Estate in the Best Place on Earth.
The IMF says it’s a good deal, and Globe reports it’s true.
October 26th, 2008 at 9:51 am
Gregory Klump, CREA’s chief economist, said both Calgary and Edmonton are now “much firmer markets” than just a few months ago.
Hurry, hurry hurry, get yours today before they run out of land in Calagary and Edmonton
Don’t let it be said that Gregory didn’t warn you!
http://www.edmontonsun.com/New.....1-sun.html
October 26th, 2008 at 9:55 am
Your right Exx more realtors will quit or find second jobs. IMO we will not see realtors exiting the business as fast as in the prior busts because now realtors are allowed to have second jobs. This was only implemented a few years back. Without it there would be an absolute flood of agents leaving the business. All of my colleagues are stressed out and they should be.
This bust will go down in history.
October 26th, 2008 at 10:01 am
Ted, you’re missing a few from the Eden group. They had Sophia, Montgomery Estates, and Elyse.
Chandler Development lost H+H and Garden City Tower to bankruptcy.
Also there was Riverbend in Coquitlam, that was one of the first that I remember.
October 26th, 2008 at 10:11 am
Ted – regarding list of cancelled projects. My bet is the list is a lot longer than that. Projects are either too small to make it on the radar screen or the developer doesn’t want to publicize the cancellation for fear of hurting current sales in earlier phases of projects.
My guess is there a few developers who are using cancellations/deferment as a tactic to renegotiate contracts. They know that with many projects nearing completion that if their project were put out to bid today costs would be much lower than a year or so ago.
October 26th, 2008 at 10:58 am
Keeping an Eye on The Pimps,
Could you please also write your name in french because some poster did not understand your motive and you have nail down three after you.
Anyway thanks for the link it works as eye opener still more to come.
October 26th, 2008 at 11:06 am
think these guys will be very busy over next three years. They take over a lot of development projects that go belly up.
http://www.bowragroup.com/
October 26th, 2008 at 11:08 am
Yet another reason to fear stratas. When someone else in your building runs into trouble, you could end up paying the bill.
http://tinyurl.com/5a5rr3
October 26th, 2008 at 11:52 am
Are strata liens senior to the mortgage? The article doesn’t say. For sure nothing is senior to property taxes.
But what has me shaking my head is that the condo owner didn’t know that the strata could lien the assessments against the condo. Well hello folks – you don’t really own that condo at all, just a share in a corporation.
October 26th, 2008 at 12:13 pm
Old pearl of wisdom re: Realtors and a career in Real Estate
” You can’t make a living….but you can make a killing ” .
Prety much explains it.
Get lucky during the boom , get frustrated when its over, move on. When they recruit em’, its often not due to demand, but high attrition rate. Most know F*ck all re the product, simply promotional embellishments and stretches of the truth.
One ex realtor I met in my travels (who since converted to the trades) said he was once the top realtor in his area, but found everyone nipping at his heels, trying to take him down and his title/crown .
However his honesty was refreshing,,saying he is not selling your house , anyone can sell your home, he is selling himself….ie him selling himself as a commodity to you to get HIM to sell your home. I agree, and he was very candid about that.
October 26th, 2008 at 12:22 pm
Cancelled projects list….???
I agree there must be lots of them. In my view, anyone that has met a given Local Gov’t approval (ie passed 4th reading)BUT has not proceeded should be on the “cancelled project list”.
In hindsight, there were earlier warning signs, and based on:
(i) labour shortages, high costs for labour and materials ie blown budgets
VERSUS
(ii)now it is credit ” outages ” and ” customer shortages ” .
The former was likley a precursor to the latter…ie the writing was on the wall it was all heating up out of control towards a major climatic meltdown.
October 26th, 2008 at 12:50 pm
Our landlord is at our house right now looking to make some repairs. She is in a panic to sell the house. The reason from what I can understand is that her investments/ investment incomes have declined and she needs a cash injection fast. She doesn’t seem to be taking into account the direction that real estate prices are heading.
I wonder how many other landlords are watching their stock market investments decline and putting their homes on the market to make up for those loses? And how is that going to affect inventory / prices?
October 26th, 2008 at 12:52 pm
Our landlord is at our house right now looking to make some repairs. She is in a panic to sell the house. The reason from what I can understand is that her investments/ investment incomes have declined and she needs a cash injection fast. She doesn’t seem to be taking into account the direction that real estate prices are heading.
I wonder how many other landlords are watching their stock market investments decline and putting their homes on the market to make up for those loses? And how will this affect inventory/prices?
October 26th, 2008 at 12:55 pm
I found Dave’s prediction… I remembered making my own prediction based on his prediction. You can see clearly that he predicted 12-18 months of gains, in the following post:
June 16th, 2008 at 5:21 pm
Freako, put me down for 12 to 18 months of gains. In other words, if there is a correction, then I predict values will drop from 10 to 15% (nominally). So, if it breaks 15%, I will have been wrong.
I will further add that a correction of greater than 10% will only occur due to an external factor (e.g. higher interest rates > 1.5%, higher unemployment ~ + 2%, or a recession)
As far as the upside, if prices appreciate more than 10% to 15% in the next two years, then I will have been wrong.
And what is your number on both on the upside and downside?
holgs Says:
June 16th, 2008 at 9:06 pm
Sorry to join in the gang up. Dave, I see what you did here:
I will further add that a correction of greater than 10% will only occur due to an external factor (e.g. higher interest rates > 1.5%, higher unemployment ~ + 2%, or a recession)
You know that a correction will cause much greater than 1.5% higher unemployment, right?
If the estimate of 1/6th of new jobs in construction is true, then what of the remaining percentage is
- mortgage brokering
- real estate sales
- furniture sales
- electritical
- harley dealers
I personally know a bunch of people my age (~30 years) that are in construction or real estate. Probably a good 20-30%, of my camping buddies are in to that field. And all of them own at least one home.
My prediction is this, one year from now, unemployment will be on the rise due to housing sales tanking and prices beginning their downfall, and you will come back here and point to the job losses as the reason, rather than a consequence, for the downturn.
I predict that my prediction will be 100% true (+/- 2%) within the next two years.
Oh, and I also predict it applies to other “educated bulls” such as Muir and Pastrick.
October 26th, 2008 at 1:00 pm
BTW, I amgiving myself a pat on the back for my dead-on prediction about Helmut. Didn’t he just come out and say that house prices are falling because of an external event (the financial turmoil.)?
Oh, and I also predict it applies to other “educated bulls” such as Muir and Pastrick.
October 26th, 2008 at 1:26 pm
I found Dave’s prediction… I remembered making my own prediction based on his prediction. You can see clearly that he predicted 12-18 months of gains, in the following post:
Nice find, but you took it out of context. The 12-18 months of gains refers to the amount of the correction. That is, past corrections have generally removed this amount of gain.
I also pointed out that an external event, such as the current banking crisis, would add more downside. From what I recall, nobody here predicted the events that have transpired the last couple months.
October 26th, 2008 at 1:33 pm
Dave: Looks like you already lost, buddy. Pay up.
October 26th, 2008 at 1:37 pm
Nice find, but you took it out of context. The 12-18 months of gains refers to the amount of the correction. That is, past corrections have generally removed this amount of gain.
Sorry, but you were CLEARLY referring to months of GAINS. Please see below (you took a pounding on that thread too.)
Dave Says:
June 13th, 2008 at 8:07 pm
…However, going forward… sitting on the sidelines for an extended period (again 12 to 18 months) will likely cost you.
Dave Says:
June 13th, 2008 at 8:43 pm
Yes, I believe prices will be higher 12 to 18 months from now. I think we will have a couple 5% years and perhaps a small drop after that. Overall, mostly flat.
Dave Says:
June 13th, 2008 at 9:21 pm
Noname, I never said a drop wouldn’t occur. I am basically predicting a flat market for a number of years going forward. What I am saying is that IF a drop does occur, it will likely be relatively shallow (i.e. giving up less than 10%).
And now for the punchline…
Dave Says:
June 14th, 2008 at 11:22 am
…No doubt that prices are currently high by most metrics (price to rent, price to income, affordability, etc…). If you look at all those metrics you will find that they are similar to the prior peaks. That suggests to me a potential correction would be similar to past behaviour.
But, I think things are different than before…
October 26th, 2008 at 1:53 pm
“Canada’s housing prices are undervalued by 2%.” Sounds entirely reasonable. But remember thats the average across Canada. Vancouver is likely equal to Britain or possibly Ireland, Alberta to the US, Ontario (with the exception of Toronto) is probably 0 and Quebec and the Maritimes well below -2. Great link! Watching the Pimps!
October 26th, 2008 at 2:03 pm
I also pointed out that an external event, such as the current banking crisis, would add more downside. From what I recall, nobody here predicted the events that have transpired the last couple months.
Dude, you have NOT been listening. We have ALL been predicting this, many of us put our money where our mouths were by shorting stocks in homebuilders, banks, CRE, etc. Your problem was you jumped into this blog in June 2008 without reading ANY of the previous posts and started with all of the arguments that have already been debunked on countless other bear blogs, which led to one of the longest threads in history.
In that one thread, I found the following three statements from you: (paraphrasing)
1.) It’s different here.
2.) A permanently high plateau is possible (you said it had happened before)
3.) They aren’t making any more land.
You are covering your ears and screaming “la la la” while the rest of us are screaming at you about fundamentals, systemic risk, etc. You’re probably going to want me to go back and look up all those posts as proof, but why bother. They’re all there for you to see, right there on the allknowing googles.
vancouver.condo.info
mish
calculatedrisk
thehousingbubbleblog
patrick.net
VHB (RIP)
House Hunt Victoria
Victoria’s Truth
And many, many more…
My prediction still stands, though. I predicted that you would use “external events” as an excuse, and I gave 100% certainty. And you just did it. I win.
QED.
October 26th, 2008 at 2:10 pm
Either you aren’t good at reading comprehension or you are deliberately lying. Look at the quote you referenced. Look at the key words, ‘in other words’, which refers to my prediction on the magnitude of the correction. The market went up about 10 to 15 percent in the proceeding 12 to 18 months.
Read the thread again, I said the market would be +/- 10%.
October 26th, 2008 at 2:26 pm
The Vancouver RE pimps aren’t bad forecasters, or bad economists.
They knew, eventually they could write off their lies to some external event.
They are trained economists, and as such they would have had enough knowledge after their first economics course to know that this would not end well.
Re prices in Vancouver were propelled by hype, and the magic of interest rates which were kept artificially low, and below inflation by the central bankers.
Had Vancouverites somehow become so productive, that the average incomes of 250k/ yr, could be justified, then the current prices could be supported.
But debt supported high prices through artificial ultra low interest rates will always collapse, always have, always will-yes even with the Olympics.
October 26th, 2008 at 2:50 pm
Dave, I didn’t insult you, why are you insulting me? My reading comprehension is fine, I am not lying. I copied and pasted from your posts. You said you predicted prices to be higher in 12-18 months. Period. End of story. You are changing history.
Now, as for “nobody here predicted this.”
Come on!
This is why this whole thing is so interesting to us bears. It’s the reason these blogs exist. It’s not just housing. It never was. It was a global credit bubble the likes of which this world has never seen.
In 2005 I made a buddy of mine quite angry when I told him subprime loans were fooked. Was I a genius? No. Credit bubble. Global.
Follow the trail:
- IT bubble crashes in 2001
- Interest rates lowered to record low levels
- People fed up with stocks buy “safe as houses” houses
- Housing bubble begins…
- Credit is expanded like never before. All over the world. Everywhere. Seriously, everywhere.
- Carl Gomez sees no bubble in Vancouver in 2005 (I remember reading the TD bank report and getting pissed, as all the bulls were using it as proof that there was no bubble.)
- Later on that same year, Carl Gomez flip flops and suddenly he sees Vancouver’s price growth as “unsustainable.” (I remember this because my name on RET after that day was “CarlGomezSeesABubble”)
- Yes, in 2005 we were predicting the Canadian bubble would crash along with the US bubble crash, and yes, we were wrong for 3 years.
However, I (we) were always certain that it would happen. 100% certain.
Because this was The. Biggest. Credit. Bubble. Evar.
In terms of timing, you know what my “excuses” are?
1.) I didn’t predict the government intervention that occurred just as prices were leveling off in 2006 (introduction of 0/40 loans and CMHC)
2.) I had no idea about the irrationality/stupidity of crowds and mortgage lenders. I remember a sign posted in a window of Capitol Coast Savings: “If you can fog this glass, you’re approved!” I wish I had taken a picture.
You can talk all you want about technical analysis, fundamental analysis, price to rent, price to income and the amount of immigration to Vancouver and land in Vancouver, but this isn’t a local phenomenon. Even though by all those measures this is a local bubble…
Problem is, this is and always was a global problem.
This is a once in a lifetime event.
This, my friend, is macroeconomics, and macroeconomics doesn’t care about how many rich Asians are moving to Vancouver or how much land is left.
We’ve been trying to tell you this, but you haven’t been listening. I’m sorry, but you can’t use the “unexpected” financial crisis as an excuse, because the financial crisis is an outcome of the burst of the global credit and housing bubble. Unfortunately, you haven’t been with us long enough to understand that bit.
Dave, before you write a snarky reply… Stop and think about this for a minute. Think about all of the posts that you haven’t read on vancouver.condo.info, prior to you joining our bear cave in June, 2008. This blog has been around for years, and plenty of bulls have come and gone before you showed up. We’re all still here.
Right now, you have the opportunity of a lifetime to change your life forever. Should you buy yen? Gold? No banks left to short, but what about CRE? Perhaps some mall owners? (SPG, maybe?) What will the boomers be selling in the coming years? Harleys, maybe? Boats? Houses?
Kinda scary, but it’s not too late to get prepared.
October 26th, 2008 at 2:58 pm
Holgs, that is the most brilliant post ever! You nailed it and you deserve some sort of Pope prize:)
October 26th, 2008 at 3:04 pm
Yes, bravo on #251!!!
October 26th, 2008 at 3:23 pm
holgs “Think about all of the posts that you haven’t read on vancouver.condo.info,” Yeh you should think of that; in fact coming onto the blog when you did sort off indicates an addiction to cool aid which apparently you were weaned off of suddenly so you started to think…sort of!
And that lead to a desperate attempt to legitimize yourself to family and friends…not us we could care less! cause we know where its going (and always have give or take a year) and you haven’t even now the faintest idea. What yoou write is what you want to happen what bears write is it’s gonna happen irregardless of what we prefer that is a non issue to a bear, and some bears do not like whats happening cause they see a lot of shit ahead where innocent people get hurt JUST LIKE DURING THE BOOM, where honest people couldn’t afford housing and the drebs of society could! 
:-)
October 26th, 2008 at 3:33 pm
Hey thanks for the kudos guys!
One more, and then I’m off to bed…
Dave said:
From what I recall, nobody here predicted the events that have transpired the last couple months.
Not to toot my own horn or anything, but I myself summarized the source of the crisis in 2005, and I can prove it.
by CarlGomezSeesABubble on Thu Aug 11, 2005 5:22 pm
One final note…
I am supposed to be working but have been spending far too much time perusing the housing news. There is a LOT of bad news right now, especially in the US (and here, by proxy.) Fannie Mae (giant lender propping up the housing bubble) in trouble, 80% of purchases using interest only loans in some US areas, people speculating in unusable land in west texas, insiders in home builders dumping stock, the NAR chief stating the prices have peaked, 50% bankruptcy increases in a few months in some areas, REITs and HB stock nose diving, the record low savings rate that is mirrored here (people refinancing and spending ALL of the newly financed money), “wealth effects” from housing keeping the economy afloat, huge increases in sales listings and unsold inventories, etc, in the last few months. I work for a tech company and EXPECT to lose my job to layoffs some time in the next few years when the global economy crashes along with the US’. The sooner our bubble pops, the better off we’ll be when it happens (fewer people losing everything.)
England and Australia have already peaked… The US is nosediving big time, historically, we’re next!
A bit early, I admit. Since that time I’ve gotten married, switched jobs twice, and now live in Sweden. Still got my bear costume though. I’m still scared out of my mind, and expecting to be jobless soon. 50% of my employer’s business is Saab, Volvo Cars, and Volvo trucks.
Us bears didn’t want this crisis to happen… We just knew it would happen.
October 26th, 2008 at 3:38 pm
Holgs:
Well said, I think you read my mind, bang on.
REAL money talks Bullsh*t aka FIAT money walks.
TIP: Look up “Fiat” Money on Wikipedia
It reminded me of a family frined who had Nortel stock, and sold just in time !!!!,(but ironically had to to pay for their share a leaky condo repair).
Listening to Alan Greenspan (Green scam?)speak was truly amazing…(barffff!!!)he seems to BS the rest of us to think the system he was a major player in could self regulate, when example -after -example showed it was ripe for abuse, going back to the S & L scandles years ago. Now he woke up?
The dot.com bomb took many down, the powers that be had to rig another fiscal russion roulette.Now that Real Estate is down the toilet , their only other option(RE) has gone boom with a big mushroom cloud…they have run out of options.
Head for the hills!!!
October 26th, 2008 at 5:08 pm
Seeing that Barack Obama appears to be leading in the polls…
Would that be bearish for the US economy?
I wonder what the spillover effects would be here?
October 26th, 2008 at 5:09 pm
Holgs:
I know what you mean about being scared, I lost my own job back in June. The trick really is preparation. You’d be amazed how cheaply you can live, and you can still enjoy life on the cheap.
Don’t worry pal, as long as you aren’t shackled to a house, you’ll be all right.
October 26th, 2008 at 5:36 pm
” From what I recall, nobody here predicted the events that have transpired the last couple months.”
I’ll add to what Holgs said.
I clearly remember 2005 (Tim days, I think) on VHB suggesting that the ‘external event’ would be US Housing or along the lines of housing will crush housing.
We all had theories of how this would play out … many of us called a shitstorm and discussed various outcomes, the fact not everyone might have predicted with certainty how the shitstorm manifests is besides the point, it happened.
I’ve been an avid saver over the last few years and I’ve been in cash this whole time knowing something bad was going to happen. Nit pick all you want, it happened and I called it and I put my money where my mouth is and look forward to paying cash for a pad in the near future.
October 26th, 2008 at 6:03 pm
skullboy, I lost my job this month. There, I said it. I’m of two minds on the situation – I can now focus my time on things that are meaningful to me, but it has been a hit to the ego, even though it was lack of work and not job performance that led to my situation.
I’m on the same page as you on the savings aspect. Essentially I prepared for the fact that economies don’t always boom, and that sure does away with a huge amount of stress. My savings could allow me to live for years if I had to, even if I didn’t have EI. I’m not sure how my coworkers with huge mortgages and debt are dealing with this situation, but I do feel sorry for them.
October 26th, 2008 at 6:13 pm
More good news in the funny papers
BWAHAHAHHAHA
http://www.canada.com/vancouve.....ed1aed4aca
October 26th, 2008 at 6:16 pm
Hey, I am getting a deja vu of reading Ben Jones’ blog in 2006. Eerie feelings. The internet is amazing, isn’t it? We wouldn’t have been experiencing such as deja vu without the internet. It was as if I had lived through the California/Arizona/Florida crash in cyberspace and now it is happening around me for real.
October 26th, 2008 at 6:21 pm
ant: what kind of business are you in?
October 26th, 2008 at 6:58 pm
Ant:
Just remember: You are not your job, and you are not your stuff. It’s a cliche, but twice now I’ve been hit with considerable misfortune. In the last year I’ve come pretty close to losing everything.
You know what? Losing that crappy job was the best thing that ever happened to me. My manager was weak and ineffective and the director she reported in to was an incompetent sociopath. The company itself loves to drown its employees in green and purple kool-aid but once you take a step back and really look at how they do business and how they treat their employees, you come to realize they are monsters. In the month after I lost my job there, several of my friends lost theirs and they all had similar stories.
Losing my job was difficult at the time but quite honestly I’ve come to realize it’s the best thing that could have happened to me. I lost something I didn’t really want anyway.
I know at least one of my former colleagues reads this blog regularly, and I sincerely hope he smiles when he reads this.
Ant, if you have money saved up then you are truly free. Take a month or two to do whatever makes you happy. Then figure out how to make money at that. Trust me, you can.
October 26th, 2008 at 7:06 pm
Seeing that Barack Obama appears to be leading in the polls…
Would that be bearish for the US economy?
Compared to McSame?
Get serious.
One of Obamas economic advisors is Paul Volcker BTW.
October 26th, 2008 at 7:10 pm
Guys i’m hoping the market crashes soon, I’m getting a bit ahead of myself.
October 26th, 2008 at 7:13 pm
Crisis moves to Gulf Arab nations
Kuwait moves to prop up bank after losses on Gulf stock exchanges.
http://tinyurl.com/6orzdl
October 26th, 2008 at 7:13 pm
holgs, post 251
Well said, I too was a bear man from 2003-2006. I just could n’t believe people buying realestate within minutes of seeing it…no inspection…no negotiations. One bidding war after another. The constant drumming of the olymoics are coming…yopu’ll be priced out… rich asian are now all coming here.
In 2007, I finally caved..even though I saved a lot by renting, I was going to borrow from parents to put a down payment on a condo or T/h. But under advisement from my uncles, friends a little older than I, to carefully research the areas and places to live.
as I did those things…I looked at the crappy selections and housing history, it really wasn’t financially feasible to buy…rent was so much cheaper than buying. The interest from the money I saved thru stocks, bonds and GICs over the years almost covered my entire annual rent; therfore my salary was going to me as opposed to going to interest from a bank. My uncles told me on the 90s and 80s which they both made mistakes and how similar the realesate speak it was then…I’its different now”…yeah the bubble is bigger.
I even bidded on a place luckiliy I chose a good house inspector….No way was I going to buy w/o… but that was the atmosphere …rush . Of course the place was crap…didn’t buy. Now I seriouisly grateful for my family and friends who kept me from making an huge mistake.
Personally I am appauled by the sheer arrogance of most realtors/ mortgage brokers calling themselves profeesional. Buy now before it is to late…maybe you can afford it now but what about later when % rates are higher…or maybe don’t buy at all right now…you don’t need it with your lifestyle Doctors warn you about the consequnces of surgery…they’ll say don’t do it and why.
even lawyers…telll you about your chances in winning a case ie ” You might want to settle this out of court” even if means less money for them.
I spoke to many realestate people and not once did I hear don’t buy it …or you are buying to much..
so sad…I ‘m sure some are good out there but so many are bad. Thank you everyone for keeping it real…I hope the next generation can learn from this and remember ” Don’t need to regulate banks…are u kidding…there are regulations for toothpaste and it’s only $1.79″
October 26th, 2008 at 7:23 pm
scullboy: What type of job did you have? What are you doing now. As I recall you are the knife thrower, right:)?
October 26th, 2008 at 7:31 pm
I spoke to many realestate people and not once did I hear don’t buy it …or you are buying to much..
How many times does it have to be said….
ALL Realtors work for the seller, NOT the buyer!
October 26th, 2008 at 7:37 pm
Oh yes, lest we forget the old Vancouver Housing Blog that got us going.
HAIL TO VHB!!!
October 26th, 2008 at 7:39 pm
I can’t stop thinking about Dave.
October 26th, 2008 at 7:49 pm
i was laid off as well. it was a mixed blessing, the bureaucracy there was neverending, foolish managers who only want to hire yes men and women to keep the political class happy.
October 26th, 2008 at 7:58 pm
poooooo: what line of business were YOU in? This deja vu feeling is because of reports of layoffs. Haven’t heard of anyone getting laid off in Vancouver it seems surreal. But yeah, the layoffs and foreclosures and bankruptcies started in the US in 2006 and that is what is giving me the feeling of deja vu. Reading Vancouver Condo Info is now like reading Ben’s Housing Blog except two years later. Heady, isn’t it?
October 26th, 2008 at 8:12 pm
#255
Thanks, holgs, for that trip down memory lane. I remember reading your posts back then and enjoyed the catchy name in reference to Gomez.
Three years after the fact, along comes Dave, stating nobody here predicted the events that have transpired… Such chutzpah from a johnny-come-lately.
Thanks again, holgs. You just torn an extra oriface for Dave.
October 26th, 2008 at 8:25 pm
275 posts… this site has suddenly become significantly busier.
October 26th, 2008 at 8:33 pm
Dave, I didn’t insult you, why are you insulting me? My reading comprehension is fine, I am not lying. I copied and pasted from your posts. You said you predicted prices to be higher in 12-18 months. Period. End of story. You are changing history.
Mea culpa.
The post you initially referenced was taken out of context. In that post I predicted the magnitude of a potential correction. That’s all I was trying to point out.
Yes, I initially predicted a flat market with some upside. Once the sales to listings ratio dropped, I changed my estimates and predicted price declines in the Fall. I was also wrong on the start of the declines. I would have anticipated a time lag, but we didn’t get it. Perhaps the cause is more readily accessible information for buyers.
I stand by my statement that most posters were not predicting the financial meltdown that we just experienced. I didn’t read your prognostications from three years ago, nor is that a reasonable expectation on your part.
October 26th, 2008 at 8:36 pm
I *hate* long blog comments, but just for git and shiggles here is an old post of mine. A propos someone saying that no one predicted the US meltdown and its impact on Vancouver. Hoocoodanode??
I’m off on the timing of some of these things, but the ‘bad’ scenario at the bottom looks pretty frickin’ prescient.
–
Monday, February 13, 2006
Where is the US market going and why does it matter?
The US housing market is clearly starting to fall. I’m sure even our resident bulls will acknowledge this fact. (Of course, it could never happen to Vancouver . . . )
As we’ve often discussed here, this will affect prices in Vancouver through (at least) four channels:
1. Exports: US demand for BC exports (like wood for houses) will decrease.
2. Credit markets: As the risk premium gets reintroduced to credit markets, Canadian banks and bonds will be affected.
3. US investors: Some have said that US investors have been active in the Vancouver condo market. At best they’ll stop buying; at worst they’ll sell Vancouver to pay off their losses elsewhere.
4. Psychology: tear-jerker stories of families losing their houses will be all over the US media. Oprah will do shows on it. This will affect the beliefs that real estate ‘always goes up’.
Let’s dig into a bit more detail about how this will all play out in the US, thinking about the implications for Vancouver as we go along. The Vancouver parts will be in brown.
Before I begin, let me stress that this is just my best guess about how the next few years will play out. Maybe, because of ‘internet time’ it will happen more quickly. Or, maybe some big positive thing will happen to avoid this whole mess. I don’t know. But the following represents my best guesses as to how it will look.
1. Through most of 2006, inventory will reach staggering record levels in many cities as buyers and sellers play a game of chicken. Transaction volume will plummet. Only those who have to sell (death; divorce; job transfers etc.) will sell. No real impact on Vancouver.
2. As 2006 progresses, HELOC and MEWing will decrease. That is, the home equity ATM will turn off. This has supported the US economy in recent years. It will shut off because a) house prices stopped growing so no more equity to extract and b) for those who still have equity, most will see the writing on the wall and not MEW themselves to death. No direct impact on Vancouver.
3. By late 2006, a recession will hit the US. This will be driven by a) consumption drop relating to point 2) above and the fact that the huge increase in housing-related employment will start to reverse itself. If the US economy catches a cold, Vancouver will be affected. Olympics and mountains will not save the economy. Construction projects will mitigate the losses, but there will be losses that need to be mitigated.
4. As we head into 2007. the trickle of ‘creative’ loan conversions from the ‘teaser’ rate period to the ‘full’ rate period will become a flood. (Around 1 trillion or 12% of outstanding mortgages in 2007.) The game of ‘chicken’ will be over as many very motivated sellers dump their houses on the market, or go into default. Transaction volume picks up and prices head down down down. We’ll be in full ‘Oprah’ territory here, with lots of mass media coverage of the meltdown. Will Vancouverites be able to cling to the belief that ‘Vancouver is different’?
5. The US subprime market dries up. No one is willing to buy the loans in the secondary market, so the loans stop being made at the retail level. If you can’t borrow a cool million with a no-doc neg-am loan anymore, then who the heck will buy the million dollar bungalows in the OC and San Diego anymore? At some point, I wonder if any of this would make the CMHC reconsider the ‘zero down’ mortgages that they now insure?
6. By mid-late 2007, we start seeing serious foreclosure action. It takes a long time (maybe 12 months so I’ve gathered) for a mortgage in default to work its way back onto the market as a foreclosure. This will cause another wave of forced sales as the mortgage holders do not want to hold onto these houses. The US recession will have Canada dragged into recession at this point. Oil prices will be down as the US economy sucks up less of the stuff and the supply side that had been digging and drilling with visions of $100/barrel oil comes on the market. In short, commodity price falls hurt us. Yes, some BCers make video games. But more of them do commodities. In either case, the export market is the US.
7. The yield curve refinds its steepness. Maybe the Fed starts moving short rates down. However, the long end will go up. It is currently propped up by large purchases of bonds by hedge funds and foreign purchasers. Maybe not as much for treasuries, but for MBSs and other credit instruments, the long yields will see the reintroduction of something that the ancients used to call risk premiums. What happens to Canadian interest rates? I think we will see a reintroduction of some slope to the yield curve as well, but not as extreme as the US. There is some possibility that Canada bonds will be seen as ‘quality’ and we will be the beneficiary of a ‘flight to quality’. Of course, there is also the possibility that a run on US bonds carries over to being a run on any North American bond. I don’t know.
I put the odds of 1. through 7. happening at better than 50/50. If this happens, I think it will have a big impact on Vancouver’s housing market – especially by 2007. However, you might disagree. I guess it depends how resilient local factors are to changes in these external factors.
The really scary stuff comes in what might happen after 1. through 7. I don’t have a crystal ball and I don’t want to be overly gloom-mongering [Ha! A little too late for that, VHB!
] so I’ll lay out three scenarios, ranging from more sunny to downright depressing. I really don’t know which will play out; maybe some mix of the three. In any case it’s interesting to think through the scenarios before deciding on which is most likely.
Here are the ‘good’ ‘bad’ and ‘ugly’ final scenarios:
Good
As more and more foreclosure and defaults go through the system, those who hold mortgages (banks, MBS holders, hedge funds, foreign central banks and institutions) take a big haircut. Maybe some minor small banks fail, and losses are large elsewhere, but the system takes the hit and survives. The US dollar goes down and long bond yields go up, but the recession works its way through and a new stronger economy emerges; one not focused on trading houses to each other with money borrowed from China. In short: tears are shed, but the sun comes up in the morning.
Bad
The wave of foreclosures and defaults leads to the failure of some major financial institutions. Maybe Fannie and Freddie go into arrears and Uncle Sam has to bail them out. Millions of homeowners forced to sell their houses at firesale prices. Major recession. This leads to problems with the Chinese economy. It goes into recession, but not too badly. Overall, this recession will be one to remember, but it isn’t the end of the world.
Ugly
The wave of foreclosures and defaults leads to cascading bank failures. Financial markets seize up. The US dollar plummets; long interest rates spike in an attempt to keep someone buying US denominated debt. We’re talking depression and maybe worse. China sees its exports slow to a trickle since the US isn’t buying so much anymore. What happens when you have 1 billion people angry at the lack of jobs and economic stress? Maybe the Chinese government creates a diversion to keep their citizens’ minds off the economic difficulties . . . ouch.
Ok, this is an extreme scenario. Let’s just say that I’m not burying gold coins and gathering canned food and ammunition at this point.
Conclusion
In this post, I’ve laid out my views on what will happen in the US. How much of this will affect Vancouver is difficult to say, but if any of this comes to pass then it can be safely said that the external environment will not be staying constant over the next 5 years.
October 26th, 2008 at 8:42 pm
Dave “I stand by my statement that most posters were not predicting the financial meltdown that we just experienced. ” Actually Dave I was, as have many others. Mish is one of my longest and favorite bloggers, and so far has been 100% right. You have been reading his blog since…??? I have never thought that Vancouver was in anyway at all unique, and could not understand why in the last two years with the American example laying at our feet we (people like you) believed that Vancouver or Canada was in anyway even a teeny bit different. However I have to take those words back, the Americans didn’t have the advantage of a most important trade partner going belly up two years previous…we did, so we are different…we’re way stupider!
October 26th, 2008 at 8:43 pm
Oh, and Dave? In case you are wondering whether this was actually posted in public or whether it was on my bathroom wall, the answer is that it was posted on my old blog at van-housing.blogspot.com. The stat counter on the site says 2,434,509, so I think a few people saw the post. Guess you weren’t a loyal reader back then . . .
October 26th, 2008 at 8:49 pm
Congrats VHB. That was a very accurate prediction.
Can I ask at what point you thought the RE market was overvalued and what your initial predictions for the turning point were?
October 26th, 2008 at 8:51 pm
Dave: the financial meltdown was a given by the 2005 peak of the housing bubble in the US, and it had been discussed ad nauseum by so many bloggers over the past 3 years that it was just taken as a given by the time you came along in your diapers. Give it up, chump.
October 26th, 2008 at 8:52 pm
Actually Dave I was, as have many others.
I didn’t say ‘ALL’. I said ‘MOST’.
October 26th, 2008 at 8:55 pm
I called it a ‘bubble’ in spring 2005. I didn’t claim that Spring 2005 was the top; just that present pricing was unsustainable. So, by the Freako metric, I will be ‘right’ if prices retreat to Spring 2005 levels for whatever that is worth. My prediction was for a retrenchment to pre 2004 prices within 5 years.
October 26th, 2008 at 8:55 pm
Real estate is still seen as an excellent investor by anyone who knows what they’re talking about. I know lots of 30 something rich successful people and every one of them has bought more and more condos on my advice. Their parents are saying the real estate market is crashing but it’s not true. Only RE bulls and old people don’t believe in the magical qualities of Vancouver real estate and SUVs. I’m also considering getting into the mini van market now that VW has released one. Young people in Vancouver cannot resist VWs.
October 26th, 2008 at 9:04 pm
Like skullboy, I watch with interest the machinations that goes on in the company I work for. I hear of, and indeed, have seen immediate terminations. Someone shoes up for work on monday morning, and by monday noon, they are GONE.
It’s spooky. Like they never existed in the first place.
In an environment like that, I fear for my corporate life. I too am stockpiling my savings and am prepared to make a dash for Central America if I have enough saved up.
October 26th, 2008 at 9:05 pm
VHB, then why didn’t you buy in 2005?
October 26th, 2008 at 9:11 pm
What type of companies do you people work for where the layoffs are happening? Other than forestry, this is news to me. Sorry to see it happening.
October 26th, 2008 at 9:12 pm
VHB, then why didn’t you buy in 2005?
Now, Dave, we KNOW you are retarded!
October 26th, 2008 at 9:19 pm
Ontario (with the exception of Toronto) is probably 0 and Quebec and the Maritimes well below -2.
I don’t buy that. There is no place east of the Lakehead where prices are substantially below rent equivalence, and many where they are above. Ottawa is above, though not by a lot, and St.John and St. John’s have seen mini-bubbles. There are districts in Montreal that are overvalued although in general it is fairly priced.
There is NFW that Canada in aggregate is undervalued. Yes there are many places that are fairly valued, but that does not balance the overvaluations in BC, Alberta, Saskatchewan and Toronto, which together have over 1/3 of Canada’s population and probably closer to 2/3 of its RE valuation.
October 26th, 2008 at 9:27 pm
Alexcanuck, Dave’s outnumbered 25 to 1, it’s safe for a Dave comment!
October 26th, 2008 at 9:31 pm
hey nutslaps! before we can chat crash we need to talk about land making machine! canuck buck drop just absorb exess froth!
October 26th, 2008 at 9:39 pm
“This, my friend, is macroeconomics, and macroeconomics doesn’t care about how many rich Asians are moving to Vancouver or how much land is left.
We’ve been trying to tell you this, but you haven’t been listening. I’m sorry, but you can’t use the “unexpected” financial crisis as an excuse, because the financial crisis is an outcome of the burst of the global credit and housing bubble. Unfortunately, you haven’t been with us long enough to understand that bit.”
Holgs,
Are you shooting the pigeons in dark? man oh man it sounds like you have said something in past and achieved your prediction,would you mind applying your achievements on Vancouver Real Estate?or you just want to run across the border?you like kudoos eh?no matter from where they come from?like from bears or bulls!!!!!
Only person ever been close to his words is VANMAN nobody else from BEARS,Nobody!!!!!all these vhb,pop,freako,drachen sorry if i miss some name but yeah you never been right nor you ever going to!!!!!
Vanman with best regard from
vrengd.
October 26th, 2008 at 9:46 pm
“I called it a ‘bubble’ in spring 2005. I didn’t claim that Spring 2005 was the top; just that present pricing was unsustainable. So, by the Freako metric, I will be ‘right’ if prices retreat to Spring 2005 levels for whatever that is worth. My prediction was for a retrenchment to pre 2004 prices within 5 years.”
Professor also called it first in 2005 but what’s your point you and holgs not producing what you found out of your prediction would you please explain what you mean to remember your prediction explain it?
October 26th, 2008 at 9:50 pm
Dave:
What type of companies do you people work for where the layoffs are happening? Other than forestry, this is news to me. Sorry to see it happening.
Times are tough in the mining exploration sector. Everyone either (a) has no money to pursue projects; or (b) is scared that (a) will happen to them sometime soon. My original thought was this would be limited to junior explorers and that cash-rich producers would be ok, but I suspect that even the senior producers are carrying a lot of debt on their balance sheets. Drastic drops in commodities prices don’t help. Lots of mines shut down and exploration is the first cost-area to be crimped down on (always). Mining – exploration – finance and associated are a big sector in Vancouver.
October 26th, 2008 at 9:51 pm
yeah VHB and others need to googles “fiat money”! nothing to fears but fears itself! yeah! browntown predict this posting will get shrinkage! not in 2005’s now!
October 26th, 2008 at 9:54 pm
Why didn’t I buy in 2005, Dave? Because my capital was employed in strategies aligned with my predictions. Shorting the snot out of banks and builders; avoiding commodities (that one hurt for 2007-08, but feels better now!), and generally making myself wealthy. What have you been up to, mate?
October 26th, 2008 at 10:05 pm
post 270 Patriotz
The realtor won’t tell the seller ” don’t sell now” you can sell for higher later….
he/ she really only represents himself
October 26th, 2008 at 10:08 pm
Ukraine Gets $16.5 Billion Loan From IMF; Hungary Next in Line
http://tinyurl.com/66zgt2
October 26th, 2008 at 10:14 pm
M- the Sophia, H+H, etc were projects that went into recievership, but were still completed (the sophia ads are getting desperate ‘buy now at rock-bottom prices’..yeah, right) So maybe I should split my lists:
WORK ON HOLD OR CANCELED:
FINANCIAL TROUBLE / RECIEVERSHIP:
I’m sure there are many I’ve missed, We need some sort of Vancouver Condo wiki so we can keep an up to date list of all these.
October 26th, 2008 at 10:20 pm
Ok, the one thing i find strange is how people like VHB, Holgs and Alexcanuck are allegedly so successful, but insecure to the point where they have to look for reassurance about their status on the internet? Something doesn’t add up.
October 26th, 2008 at 10:26 pm
From what I recall, nobody here predicted the events that have transpired the last couple months.
I think it would be silly to expect anyone to predict an exact sequence of events, but many here (notably VHB) have predicted this whole thing with a remarkable degree of accuracy. In fact I think the majority of people here who thought through the housing ponzi scheme saw it ending very badly. Of course a year or two ago people talking about a bunch of huge banks failing, a gigantic US bail out scheme and shockwaves rolling through global markets would have been dismissed as an out of touch doom and gloomer.
It wasn’t any supernatural ability that led to these prediction it was simply connecting the dots. The problem was that there was no motivation for those making a living off the boom to connect the dots, and they were the ones with the loudest voice in the media.
October 26th, 2008 at 10:29 pm
insecure to the point where they have to look for reassurance
That’s a weird comment. Since when does enjoying a debate have anything to do with insecurity?
October 26th, 2008 at 10:32 pm
Ted,
you have lost your tail
in boom similar to what vhb and holgs did.
October 26th, 2008 at 10:36 pm
“It wasn’t any supernatural ability that led to these prediction it was simply connecting the dots. The problem was that there was no motivation for those making a living off the boom to connect the dots, and they were the ones with the loudest voice in the media.”
Exactly the same way Dave has a big mouth. Dave — you have one mouth and two ears….use them.
October 26th, 2008 at 10:37 pm
It looks like the Fed is getting ready to cut interest rates to below 1%.. That whole approach worked so well for the Japanese, why not give it a shot?
http://www.msnbc.msn.com/id/27389328/
October 26th, 2008 at 10:39 pm
Regarding post #301, you always know that when it gets to the ad hominem, the argument is, for all intents and purposes, OVER.
October 26th, 2008 at 10:48 pm
first i heard of vhb shortin’ banks…
I’m with him on the Van RE call, have been fer a good while, and that looks to be coming true, but geez the “capital was employed in strategies aligned with my predictions” turn of phrase gives me the shivers.
That’s MBA consultant forked-tongue speak, junior.
October 26th, 2008 at 10:56 pm
It looks like the Fed is getting ready to cut interest rates to below 1%.
Yes, just what the US housing market needs, more consumer price inflation with stagnant nominal wages and falling payrolls.
October 26th, 2008 at 11:05 pm
post 270 Patriotz
The realtor won’t tell the seller ” don’t sell now” you can sell for higher later….
Realtors are not investment advisors for either the seller or the buyer. They are commissioned salespeople. It is the seller’s responsibility to decide whether to sell and what the minimum price he accepts will be. It’s the realtor’s job to get the seller the higher possible price in the current market.
October 26th, 2008 at 11:33 pm
By the way, somebody else has started posting from my pseudo… Obviously a bull. Dave, maybe?
The short posts were not me. I was sleeping soundly.
Anyway, Dave. I know I left out your “possibility of a correction” from your prediction, so here is your prediction in a nutshell.
Dave basically predicted in June, 2008:
High likelyhood of gains for the next 12-18 months, with a slight chance of a mild correction of less than 10%. A correction of more than 10% is unlikely but could occur if interest rates spike or unemployment rises more than 1.5%.
How’s that for reading comprehension? Oh, on that topic:
Dave, to answer your question of why VHB didn’t buy in 2005, he stated it in his answer to you.
“I thought housing was overvalued in 2005″
Finally, Ted, totally agree. I don’t take credit for being a genius or anything. I was following the same blogs as everyone else, and participating in the same discussions. This was all about putting 2 and 2 together.
I recently tore Garth a new one in one thread because he was taking credit as the only one calling for a correction when his book was released. I see his blog as a blog for beginners; he doesn’t play nice with the rest of the blogosphere. None of us can take credit as a financial geniuses… This was all about connecting the dots (and wasting our lives reading the internets.)
October 26th, 2008 at 11:36 pm
…(and wasting our lives reading the internets.)
here here!
October 26th, 2008 at 11:44 pm
It was hard, eh, resisting all the hoopla over the past 4 years. I spent so much time reading blogs, following Freako, VHB, dingus bingus boongus, you name it and I followed it. And then sales declined in Spring of 2006 and we thought that was the Finale and everyone started to celebrate only to have to keep plugging for 2.5 more years.
I am exhausted. But hey, folks we did it. We resisted the mass hysteria.
Congratulations to all!
October 26th, 2008 at 11:54 pm
Dave Says:
October 26th, 2008 at 9:11 pm
What type of companies do you people work for where the layoffs are happening? Other than forestry, this is news to me. Sorry to see it happening.
I’m in Gothenburg Sweden, where we have Volvo Cars, Volvo Trucks, and Saab. Manufacturing centers for each of them, and in Volvo’s case former headquarters (owned by Ford) and headquarters respectively. As has been detailed on CalculatedRisk and Mish in the last couple of days, all three companies have started laying off, but they are starting with the factory jobs.
This city is full of “underleverantörer,” or suppliers, to the automotive industry, so the layoffs will be hitting with force later this year.
I am on a big project which has nothing to do with the automotive industry, but that will be over sometime early next year and at that point… ?
The layoffs and predictions of housing prices falling here have only started in the last few months, and of course at this point they’re also only predicting 10-15% off. I’ve been a bear among bulls since we moved here… The media here is the same as the media everywhere else. They are extrapolators, not predictors.
October 27th, 2008 at 2:53 am
I wasn’t laid off, but left a corporate job as the company became mean and stupid. Scullboy described my former workplace so well that I wondered if I worked with him
Seriously, when you get out of bed each morning, do you look forward to your workday? Anyone who answers, NO should stop wasting their life. Money is secondary to a lot of things.
October 27th, 2008 at 5:38 am
Wow, go away for a couple of days and look at the fireworks!
Dave
I think you’re missing the point in blogging. Yes most of us did not predict the global financial meltdown (most of us is a very bizarre way of phrasing it by the way, it’s like you’re hedging your bets (again)). Sites like this are about sharing information and pooling our resources. However I think most of us did agree with those who predicted the meltdown.
I think the problem you’re having grasping all this is that it was predicted in the blogs way before you started hanging out here. By the time you arrived on the scene it was old news and people weren’t talking about it much any more because it was just an accepted fact that there was a good chance of a financial meltdown caused by loose lending standards and bundling of mortgages.
October 27th, 2008 at 6:51 am
On the news recently wee (2) so called veteran Realtors:
In an UPward market, they were rather critical of BUYERS who ” wouldn’t pay the market price ” which translates into wouldn’t get into a bidding war (and a possible lost commission).
In a DOWNward market,they were rather critical of SELLERS who would not lower their asking prices. This also translates into a possible lost commission.
So, the Realtors , in essence , are admitting they try to play the middle, have it both ways, yet blame their clientele , whether it be the BUYER or the SELLER when things go wrong.
October 27th, 2008 at 7:28 am
By the way, somebody else has started posting from my pseudo… Obviously a bull. Dave, maybe?
No, I have only posted under the name of Dave.
October 27th, 2008 at 7:33 am
Dave, to answer your question of why VHB didn’t buy in 2005, he stated it in his answer to you.
“I thought housing was overvalued in 2005″
He said he thought the ‘bubble’ started in spring 2005.
He answered my question… his capital was deployed elsewhere.
October 27th, 2008 at 7:40 am
What have you been up to, mate?
I bought in 2001 and moved up in the market a couple times during that period, from an apartment to townhouse to house.
Other than that, just working away doing what I do. And keeping myself fit.
October 27th, 2008 at 8:15 am
Dave said:
He said he thought the ‘bubble’ started in spring 2005.
We obviously have different interpretations. As I read it, 2005 is when it
VHB said:
I called it a ‘bubble’ in spring 2005. …present pricing was unsustainable.
I’ll keep this short. Just because VHB called “bubble” in 2005 doesn’t mean that’s where it started in his opinion. Pretty sure that’s how it was meant, anyway, but maybe that’s my horrible reading comprehension popping up again.
I gotta give you credit man. There are a lot of incoherent idiotic bulls here, but you’re not one of them. We tend to pile on you but that’s only because you actually represent the “reasoned” arguments of the bulls in the MSM, in our families, and amongst our friends. A bunch of my friends and family have expressed the same sentiments and used the same arguments as you to explain away the housing bubble,
If I could guess why you get so many replies on this blog, I would guess that us bears are projecting our families and friends onto you (since you seem fairly normal and intelligent) and forcing on you the opinions that we don’t express to our family and friends (because we’d rather stay friends with them, whereas you are just some anonymous Dave guy.)
So kudos to you for allowing us to practice our bearish arguments in the echo chamber that is vancouver.condo.info!
I called it a ‘bubble’ in spring 2005. I didn’t claim that Spring 2005 was the top; just that present pricing was unsustainable. So, by the Freako metric, I will be ‘right’ if prices retreat to Spring 2005 levels for whatever that is worth. My prediction was for a retrenchment to pre 2004 prices within 5 years.
October 27th, 2008 at 8:18 am
I should have previewed that last post first. Apparently it’s not only my reading comprehension that sucks, but the comprehensibility of my writing.
October 27th, 2008 at 8:29 am
Holgs, my expectations have changed. I expect the market to continue downwards with a 15 to 20% correction. I’m not sure that would qualify me as a bull, but most would prefer to label me as such because their expectations are more pessimistic than mine. I agree with you that I am ‘bearing’ the brunt of pent up emotions of many here. That’s why nobody takes exception to those who are calling for massive devaluations. For example, I could post that I expect an 85% correction and nobody would call me on it.
The financial crisis obviously throws a big unknown factor into any of our predictions. If the economy gets really bad, then housing will continue on downwards. There are some positive signs in the US that housing is bottoming out. Once that happens, the US economy can start to recover.
I still firmly believe that there are lots of positive things in the economy and especially here in BC.
October 27th, 2008 at 8:54 am
There are some positive signs in the US that housing is bottoming out.
None whatsoever. Sunshine and moonbeams. A brief uptick in sales as knife-catchers buy foreclosures promises nothing.
Kudos for changing your mind; at least you’re not a fundamentalist. As for people’s reaction to you here: people remember their first impressions and those take a while to change.
And here and elsewhere in the blogosphere, people have been predicting current events pretty accurately for a couple of years now; though your ego may not enjoy the idea that many others saw more clearly than you, it’s true.
By all means believe in positive things, but don’t bet on them in the current economic climate; it’s a sucker’s bet.
And staying fit is an excellent goal, for its own value as well as the fact that medicare is soon going to collapse under the weight of old boomers and obese young. Or is that too negative?
October 27th, 2008 at 9:01 am
Dave why a 15-20% retraction in prices?
I’m curious why it would stop at 20%.
October 27th, 2008 at 9:19 am
van-zee, past corrections have given up about 12 to 18 months of gains. That would be the approximate percent correction if history repeats itself. Of course, this all hinges on the economy. If we have a prolonged recession, then I would expect prices to continue their march downwards.
Conversely, if things start looking good in the Spring, then I would expect prices to flatten out.
October 27th, 2008 at 9:24 am
I’m curious why it would stop at 20%.
If RE drops anymore than 20% Dave will be underwater on his primary investment, er I mean residence.
October 27th, 2008 at 9:42 am
Dave, I also want to give you kudos for taking part in the conversation and for the most part remaining civil and reasonable. I disagree with a lot of your views, but I appreciate the debate.
It seems like your changed expectations of a further 15-20% drop in prices here is exactly in line with most media reports, bank & economist predictions. Do you work for a bank or realty company? CMHC? Just curious.
Although I personally believe house prices in Vancouver are likely to fall much more than 15-20% overall, I don’t believe they will fall 85%.
The whole point of the argument against viewing real estate as an ‘investment’ at this point is that its a leveraged investment, so even if house prices only fall 20%, that represents a 100% loss of down payment for most people.
The other thing to consider is the way that percentages can appear on an emotional level much more comforting than they are. If you have an investment that gains 100% it only has to lose 50% to go back to zero gain.
October 27th, 2008 at 9:44 am
Has anyone run the numbers on how many ‘months of free rent’ the drop from the peak represents so far? I think it was Freako that mentioned this idea – which stats would you compare to get a fair number for this?
October 27th, 2008 at 9:50 am
“I gotta give you credit man. There are a lot of incoherent idiotic bulls here, but you’re not one of them.”
Holgs,
That’s why you did not show up with answer and you choose to sit with dave a another bear wow just joe holgs long way to go buddy the way you have disappeared in the past more shots are coming towards you again i can give you some credit to construct good argument but contents are missing buddy you are just a bear not a man.
Market in alberta fell into sellers market again in Vancouver dozens of projects are down to halt new supply and no new seller is adding their list in mls tell your micro economist friend only few more moments are available to find good deal also tell him and dave that Vancouver Real Estate Never Go Down.
October 27th, 2008 at 10:00 am
That would be the approximate percent correction if history repeats itself.
When was the last time we had a global asset bubble, followed by a global financial crisis, followed by a global recession Dave?
You’d better hope history doesn’t repeat itself.
October 27th, 2008 at 10:03 am
Dave
“I could post that I expect an 85% correction and nobody would call me on it.”
Patently false, I have been called on it several times when I’ve said 60-70% is entirely possible (which I still stand by of course, notice I haven’t revised my position three times to keep up with the changing situation) 85% is ridiculous.
“past corrections have given up about 12 to 18 months of gains.”
There is only one correction on the graph you ALWAYS use. The others are just bumps on the path. Given that you have an N of 1 (even if you were allowed the others without argument you could call it an N of 4) that means that statistically you simply don’t have enough information to make that call. IF we were to propose that your N of 4 was accurate, but it turned out you were out to lunch on this current situation that would mean 20% of the results fell outside of your prediction, so the best you can claim with that method is a 80% probability you’re correct and that’s before you ignore the fact that this is a bubble of epic proportions and you ignore the fact that fundamentals have never been so out of line in this market and you ignore the fact that every other city which was in a similar position to Vancouver’s a few years ago didn’t even pause to blink at 20% on the way down.
October 27th, 2008 at 10:05 am
Nice one VHB, I clearly remember your ‘possible scenarios’ post. I probably even thought some of your predications were exagerrated, I was wrong.
October 27th, 2008 at 10:26 am
There are some positive signs in the US that housing is bottoming out.
I agree with Dave on this one, here are the peak-to-current drops in the Case-Shiller index in US bubble cities. I had to estimate the current CS number based on the May values, adjusted using the drop in asking prices since then from http://www.housingtracker.net.
Las Vegas -46%
Phoenix -42%
Miami -41%
Los Angeles -36%
San Diego -36%
San Francisco -28%
Washington DC -28%
Might not be absolute bottom for these cities, but it’s getting close IMO.
October 27th, 2008 at 10:42 am
Hey guys, new thread.
Van housing never goes down: You’re being ironic, right? Even if you weren’t, you’re a funny guy. Keep the “hits” coming.
October 27th, 2008 at 2:00 pm
The “DAVE” show
Starring “Dave” and his assorted cast
Season # 3 out soon on DVD and Blue Ray
Order now and we will through in your choice of Nobel Laureate Economist’s advice FREE :
(PS: Sorry, but due to predicted global credit crisis, no cheques or credit cards, debit or CASH $$$$ only , unless you live in Dubai )
October 27th, 2008 at 2:22 pm
Anon 269:
I was an IT project manager for a large telephone company. I’m not a knife thrower, I’ve just changed to a culinary career, so I’m *playing* with knives, not throwing ‘em.
I figure in good times or bad, people have to eat and I’m a gifted cook. Why not make some money?
They are trying to keep the whole layoff thing quiet, I hear. The company I worked for had a very large strike a couple of years ago and ever since they’ve been quietly shipping jobs offshore. They claim it’s because there aren’t enough people interested in call center jobs. Let’s all pause a moment and consider the plausibility of that argument, shall we?
They are accelerating the offshoring. They’ve farmed out QA and product development. Rumour has it there will be massive layoffs around the end of November.
Monterey: That’s precisely how it happened. It reminded me of a Kubric film. I had asked for some emergency leave because my apartment lease was up and I only had about 10 days to find something new. The HR guy asked me to put the information into a bulleted Powerpoint list. Seriously.
I refused and insisted on a face to face meeting. That morning, I walked into a plain white room with a single table, and three chairs. My manager and the HR guy were sitting at two.
My manager said “We’ve decided today that we’re going to terminate our employment agreement with you. Here’s your package, and we wish you the best.” They slid a plan brown envelop toward me and walked out the door, without another word.
Then some woman came in and said “Hi, I’m a termination consultant. I wanted to ask how you’re feeling right now.”
The fact that she walked out of that room without a broken nose speaks volumes about my restraint, IMO.
I heard from my colleagues that it was just as Montrey said …. it was like I never existed. Needless to say they’re freaked out. I’ve heard the same story from friends who were
God, I’m glad to be out of that environment. It was a nightmare. I’ve never met managers as incompetent and venal. I’ve never seen a company so poorly run. Every day I check their stock on my Mac, and laugh. All their gains from the last 5 years have been wiped out, which means many of the employees have lost a great deal of money. Some of them are close to retirement. Many thought I was stupid for saying local house prices here were just plain silly, and a price crash was approaching. I’m pretty sure they were counting on their company stock and the value in their homes to fund a comfy retirement.
Well… who’s laughing now? I can literally watch their nest eggs collapse between the stock price and the value of their homes. When the time is right, that company will axe all of those people too, all the while trying to keep up the appearance of being family friendly and good to their employees.
Hopefully when my business starts up, I can purchase their homes from foreclosure then burn ‘em to the ground… just for fun.
Yeah I’m a jerk but I cheerfully admit it. I hope those people can learn to like the taste of dog food.
October 27th, 2008 at 8:23 pm
Well Scullboy,
Sorry to hear about the shocking way you were laid off.I don’t know what I would do if that happened to me. It is amazing that you were able to recover from it so fast.
I’m glad that you are just playing with knives and not throwing them:)!!
Well, I look forward to hearing about your restaurant in the future. In the meantime I hope you enjoy your life. It sounds like you are happier now. What did you cook up today?
October 27th, 2008 at 8:25 pm
Scullboy,
HR meeting seems to be very nice treat remember when you use to hunt for krrish2 from 8.30 to onward and use to go home by sayin”AH FINALLY”like cat had really nice meal every day after work by saying all this i mean lucky they did not fire you by monitoring your performance for productivity or else it could be actually the reason behind your termination.
Then you say their stocks are falling badly remember in your second post you say that you are stand by your words to advice people further to invest in stock market opppsss.
I just want to say don’t ever hunt for him he is with you all the time walking stalking from CHILKO to further anyway wish you good luck and please only use blogs in your free time take no tension because some one say real estate vancouver never go down so just relax.
nobody!!!!!
October 27th, 2008 at 10:25 pm
Thanks Anon,
The peculiar part about all of this was the timing. Essentially I had to liquidate everything. Luckily I liquidated before everything crashed, so at least there was more then enough to live on for a while. Funny how that works out. If they’d kept me on longer, I would only have about half as much available cash.
Life has a funny way of working itself out. I think I owe a lot of it to the voices of reason here and at VHB’s old blog. Thankfully I knew what was going to happen and while I couldn’t make money by shorting stocks etc, at least I was ale to cushion the blow. If I owned a home now I’d be *screwed*. Instead I think I can dig up the money to start a business.
A *lot* of people are about to go through what I just did. I can’t imagine dealing with all that *and* one (or more) mortgages on one (or more) properties losing value daily.
To VHB, Mohican and the Pope: Thanks so much, and may I offer you the highest compliment any Vancouver blogger can offer:
Your excellent analyses and concise observations were worth every moment that I spent pulling my hair out over Krrish’s stupidity.
October 27th, 2008 at 10:50 pm
Sophia,
Shhss man,Sophia do you know what ever happen with you guys at other end you never come to report back to confirm things,let me line things up here for you bdk strataman and other.
Most of Occupations are based on oppertunity not really on education.(what are you cooking sophia do you know how to make lasagna)next Hey krrish2 buddy you are a warehouse worker!
Remember you had a shot on waitress,window drapers,taxi drivers etc.
Sophia no matter what it did not took life to learn a lesson only 1 year GIRL no wonder you stop calling him warehouse worker hey krrish2 did you see that?.
Anyway “he never wish you anything bad” said his mum.
Good Luck for the future his billow(beauty).
October 28th, 2008 at 1:35 am
Jesus Krrish, I can never figure out what the hell you are talking about.
And by the way where exactly are you from? Forgive me but there’s no way you were born in this country. I’m guessing somewhere in Southeast Asia based solely on the fact that according to Wikipedia:
Krrish is a 2006 Bollywood science fiction superhero film directed by Rakesh Roshan. Released on June 23, 2006.
Based on that I’m guessing Indian, Sri Lankan or Pakistani and given the cultural makeup of Vancouver I’ll bet India.
Am I right?
October 28th, 2008 at 11:17 am
Sophia,
You should check the language title i was trying to find out more info from 8 but “teletubbies bye bye.”-he said
http://www.dreamgate.com/teletubbies/bye.jpg
October 28th, 2008 at 11:25 am
I am a teletubbies real estate never go down just ask Johhhnn