House prices drop below 2007 levels
exx just posted this link, looks like its worth its own post. The Vancouver sun is reporting that the house price drop in September was big enough to bring us below 2007 levels in most markets across the Lower Mainland. Prices in Greater Vancouver have dropped 5.8% since May and are now 1.6% lower than September 2007.
The year-over-year price changes vary by market from up 3.6 per cent in Richmond where the benchmark was $$754,481 to down 20.4 per cent in Port Moody where the benchmark was $619,891 in September.
Total sales of all property types recorded through the Multiple Listing Service were 1,585 across the REBGV area in September, down 43 per cent from September a year ago.
REBGV September new listings, meanwhile, were up 29 per cent to 6,142 from the same month a year ago.
“After five years of unprecedented increases, housing prices are beginning to realign,” Dave Watt, REBGV president, said in a news release.
Any thoughts or comments on this news?
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Dosh is a weenie Says:
October 2nd, 2008 at 1:06 pm
August 2nd, 2007 at 2:07 pm
whats with the obsession with the US market? last i checked we were in a different country. i know we do some trading with them, but geez, lets get real!
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Dosh is a weenie Says:
October 2nd, 2008 at 1:07 pm
Dosh said this in February but denied it since:
February 11th, 2008 at 10:36 am
wonder what happens if the U.S. drags Canada into a recession.
Not going to happen. IF the US goes into recession it might have an effect back east, but Vancouver is different, our customers are all over the world and we’re not manufacturing widgets. We are a cultural center like New York or London as much as some of the bears here hate to hear that.
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betamax Says:
October 2nd, 2008 at 1:14 pm
“After five years of unprecedented increases, housing prices are beginning to realign,” Dave Watt, REBGV president
And by “realign” he means “implode”.
“the consensus view remains that our local housing market is underpinned by solid economic fundamentals”
And by “solid” he means “fantasy”. I heard that chestnut many times in the US, and we all know how that story ended…
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Anonymous Says:
October 2nd, 2008 at 1:22 pm
hey, the article quotes a dave (president of the rebgv)! you don’t suppose that’s the dave that’s been posting here, eh? probably not, but you never know…
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Mr. Market Says:
October 2nd, 2008 at 1:31 pm
Average prices in greater vancouver are down 13% from the peak of February, 2008. This market has gone bust.
There are still irrational types that think that RE prices will rebound any day now, even during the worst financial crisis since the great depression. Such a view is rediculous beyond words.
We will be down a total of 25% from the peak by March 2009.
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Reknab Says:
October 2nd, 2008 at 1:34 pm
I work for a Big 5 bank here in Vancouver at our Western Canadian Approval center and I can tell you there have been a lot of recent changes in our lending practices…
Gone Are
-High Ratio Heloc’s
-40 year amortization
-0% down
-5% cashback without 5% down coming from client
-No more discount on closed VIRM mortgages, typically these were anywhere up to -.9% off prime
-No more discount on Open Virms (prime)
-No Open Virm for Non Resident Investors (Heloc was never permitted in these cases)
-No more lending on appraised value for purchases
Leave a Comment
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john Says:
October 2nd, 2008 at 1:52 pm
Stock market goes down 6% in a day. Condos and SUVs are solid investments. Big deal this year some condos have dragged down the average so what. The long term condo and SUV market looks really good.
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Ed Says:
October 2nd, 2008 at 2:10 pm
My favourite comment on CR today – this will probably be a similar story with Vancouver’s SOLID FUNDAMENTALS
Our financial system is sound.
Our financial system is sound.
Our financial system is sound.
Our financial system is sound.
Our financial system is sound.
Our financial system is sound.
We may not have an economy on Monday.
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gah Says:
October 2nd, 2008 at 2:35 pm
Hmmm, Dave says that things are “beginning to realign”. Does he care to tell us when he thinks that the realigning will end, or how much realignment he expects there to be?
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Eren Says:
October 2nd, 2008 at 2:37 pm
i was going to buy a condo from John, a sfh from Dave, a semi from Tinktom since re is solid investment. too bad, i could not get the credit from the banks.
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Eren Says:
October 2nd, 2008 at 2:39 pm
any credit for me? i used to be working for xxx re dev. company.
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Drachen Says:
October 2nd, 2008 at 2:50 pm
Gah
“or how much realignment he [Dave] expects there to be?”
Dave says it won’t fall more than 5% from peak before rebounding. Yet another accurate prediction from the master of “voodoo economics”.
I think he’s since revised his prediction to no more than 10%. Wait a few months for the revision on the revision.
Seriously though, he’s missed 4 for 4 predictions;
1) Inventory will peak in summer.
2) Inventory will be below 19k on Sept 1 (Paul’s numbers, the actual number was nearly 20k)
3) Prices will not decline during the summer.
4) Prices will not fall more than 5% (revised to 10% after 5% was exceeded).
He hasn’t made a single prediction about the market that has been accurate so far but he refuses to admit his model may be wrong. This proves that he is either deeply irrational or pushing a market view he doesn’t actually believe in.
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Gadwin Says:
October 2nd, 2008 at 2:51 pm
May detached benchmark: $771,250
June detached benchmark: $765,654
July detached benchmark: $753,165
August detached benchmark: $737,985
September detached benchmark: $726,331
Hey, what’s the trend?
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Dosh Says:
October 2nd, 2008 at 2:55 pm
I see someone is obsessing over what I said and then claiming I denied it. When did I ever deny saying that, and better yet, whats your point? Are we in a recession that all of the news media is keeping secret from us? Are you saying I’m wrong that eastern Canada gets the worst of any slowdown in the US? You should try offering up your own arguments instead of just repeating my comments.
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bdk Says:
October 2nd, 2008 at 2:59 pm
Quite a few coal harbour listings ,for rent, are showing up.
For the new stuff I’m seeing people asking
$1650-1900 for a one bedroom (ritz, shangri la, sapphire) and up to $6500 (for a big unit at 2 harbour green) if any of the buildings are going to get $3/sq ft it’d be harbour green 1 or 2.
It’ll be interesting to see how many folks actually rent these mediocre ones and luckily if they don’t act quick enough there are hundreds more coming.
There should also be some first time buyers vacating rentals in the surrounding buildings such as classico & palladio.
A tanking economy and $3/sq ft rentals… time will tell how well this works out for all these astute non bitter owners who may have to move into their parents basement in order to stay afloat.
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Keeping an Eye on The Pimps Says:
October 2nd, 2008 at 3:31 pm
“Although our economic fundamentals remain solid, it’s fair to conclude that the U.S. financial situation is affecting consumer confidence here,” Kelvin Neufeld, president of the Fraser Valley Real Estate Board said in a press release.
Kevin: You are an idiot.
The type that you, and the rest of you RE pimps, have been fleecing, aren’t deterred buy what is happening in the US or the rest of the world.
They believe that the benchmark price will be over 1 million in Vancouver by 2010.
Something about a world class city, the strong economy, and oh yes, we ran out of land about the time the communists were to take over Hong Kong.
My suggestion to you and the rest of you pimps is to stick to the story:
The market is just taking a breather, besides; RE is a long term sure investment which can’t loose.
And get Pastrick, Muir, and Tsur, on the Bill Good show as soon and as often as possible.
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Drachen Says:
October 2nd, 2008 at 3:44 pm
Dosh
The fact that you’re upset by someone resurrecting your old words shows that you’re embarrassed by what you’ve said in the past. If you’re embarrassed by what you’ve said in the past then even you must be coming to realize that you didn’t have a clue what you were talking about.
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Deja "I didn't say that" Dosh Says:
October 2nd, 2008 at 4:01 pm
2 Dosh Says:
March 4th, 2008 at 11:54 am
Keep on dreaming. If you can buy real estate now but are afraid you should get in while you can. Every time you post one of these stories its like you dont notice the really obvious fact that this news is not about Vancouver and not about Canada. Your stretching for bad news in other countries while real estate here continues to be a rock solid investment.
Current score: 0
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Skye Says:
October 2nd, 2008 at 4:05 pm
@Reknab: So you work for a big bank and you’re just now stopping those lending practices? That means before this year, you were offering all those things, and there are tons of owners out there with those terms. They are in BIG TROUBLE. Can’t wait to buy some condos when the fire sale happens.
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Anonymous Says:
October 2nd, 2008 at 4:08 pm
Just drove by the condo site in Surrey…police cars and yellow tape everywhere.
A CBC reporter posing in front of a camera/tripod/cameraman talking into
a fluffy mic with the complex behind him. Traffic jam as lookie-loos
try to take a tour around the side streets, only to encounter more yellow tape.
The charred crane is still standing. Couldn’t see much of the burned section.
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Deja "I didn't say that" Dosh Says:
October 2nd, 2008 at 4:10 pm
35 Dosh Says:
January 8th, 2008 at 12:57 pm
The facts are these:
despite a downturn in the US market Vancouver is as robust a market as ever, in fact prices have NEVER been higher than they are now. Complaining about that is like wishing you could still use a payphone for dime. Its simple. Stop throwing your money away, get into anything you can afford NOW and watch your asset grow.
Current score: 0
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Deja "I didn't say that" Dosh Says:
October 2nd, 2008 at 4:12 pm
Dosh Says:
January 8th, 2008 at 4:25 pm
Yeah? Well show me a better investment. Even the most dismal forecasts from real estate economists are predicting at the very least a 4% increase in property values. I expect we’ll see a lot higher than that, but if I only get 4% appreciation I won’t be crying in my beer.
Current score: 0
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Deja "I didn't say that" Dosh Says:
October 2nd, 2008 at 4:17 pm
15 Dosh Says:
April 9th, 2008 at 12:54 pm
Why is this big news? A 25% chance of anything is pretty low, they’re predicting that theres triple the chance that a global recession will not happen.
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VanTOVan Says:
October 2nd, 2008 at 4:25 pm
Who knows… when the savvy assignment-flippers start burning down their buildings prior to completion that should be bullish for condo inventories.
Any room in the back of the turnip truck, john?
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Let's berate Dosh! Says:
October 2nd, 2008 at 4:28 pm
38 Dosh Says:
September 24th, 2008 at 8:20 pm
Anonymous, at least put a name to your post so we can berate you if you’re wrong on your prediction of maintenance fee increases.
Current score: 0
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Dosh Says:
October 2nd, 2008 at 4:53 pm
Deja, your a clown. whats your point? that some of my predictions were off? so what? Real estate is a long term investment. Your probably one of those idiots who predicted a 50% drop and prices are down less than two percent from last year. Anyone who bought in 2006 or before still has lots of equity built up.
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bearette Says:
October 2nd, 2008 at 5:07 pm
Dosh is a troll. Don’t feed the troll.
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VancouverBanker Says:
October 2nd, 2008 at 5:11 pm
Lots of developments coming unglued now. Talked to one major developer today that said he has at least ten calls a week from amateur players who have run into trouble and are looking for equity.
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Dave Says:
October 2nd, 2008 at 5:22 pm
Banker, why would an amateur player go to another developer as opposed to a secondary lender? Developers aren’t in the business of loaning money.
Or did he or you mean to say they are looking to get bought out by a major developer?
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YLTNBoomerang Says:
October 2nd, 2008 at 5:35 pm
So at the end of the article, Kelvin Neufeld, FVREB says:
“People are closely following what’s happening south of the border, they’re watching the financial markets and in some cases [are] delaying big-ticket purchases that they feel aren’t essential right now.”
This is an article on real estate right? So is he saying that the “big-ticket” purchases that are not essential are homes? Can I interpret this as “Speculators are nervous and not buying homes to flip”?
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BDK Says:
October 2nd, 2008 at 5:59 pm
I know it’s mean to laugh at retards but I am enjoying having a laugh at dosh the douche’s expense.
Whatever dosh says do the opposite because he’s wrong 100% of the time.
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MickeyFinn Says:
October 2nd, 2008 at 6:15 pm
I love it!
I’ve got myself a comfortable chair and I’ve made some popcorn now I’m just going to take a seat by the side of the tracks where I will enjoy a great view of the train wreck that will soon be the Vancouver real estate market.
It’s already out-of-control and barreling towards the station… oh yeah and the massive number of completions projected for the next eighteen months is going to add so many more cars to the train.
Chugga-chugga woo woo!
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markx Says:
October 2nd, 2008 at 6:34 pm
If this YOY benchmark price drop doesn’t get revised up, September 2008 will mark the “point of no return” in this historical RE bubble of BC. Now it’s a matter how WHEN it will crash back to where it started, and whether it will overshoot by any large margin. I can see two waves of crashing. We’ll see prices back to levels that support current rent level by next year this time, and back to where it started after Olympics, which is when manual labor wage and rent will start cracking. Oh, all the condo completions will really push the rent down.
By the way, if NDP wins the provincial election next May, we’ll be back to pre-bubble levels before Olympics. Not saying NDP is bad, it’s just the market psychology.
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Deja "I didn't say it" Dosh Says:
October 2nd, 2008 at 6:38 pm
Dosh Says:
October 2nd, 2008 at 4:53 pm
Deja, your a clown. whats your point? that some of my predictions were off? so what? Real estate is a long term investment. Your probably one of those idiots who predicted a 50% drop and prices are down less than two percent from last year. Anyone who bought in 2006 or before still has lots of equity built up.
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Deja "I didn't say it" Dosh Says:
October 2nd, 2008 at 6:40 pm
dosh Says:
December 30th, 2007 at 4:18 pm
So you don’t know when is a good time , but you do know now is not a good time? Where does your knowledge end?
And as far as affordability goes thats an individual thing. How do you know that there aren’t millions of people earning over $100k per year here? The more you have on hand the less of a big deal ‘affordability’ becomes.
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patriotz Says:
October 2nd, 2008 at 7:36 pm
I can see two waves of crashing. We’ll see prices back to levels that support current rent level by next year this time, and back to where it started after Olympics
That doesn’t make sense, we haven’t seen rent equivalence since the beginning of the bubble in 2001.
If this bust moves at the speed of 81-83, and it looks like that may happen, we will see rent equivalence and a probable nominal bottom around this time in 2010.
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rent king Says:
October 2nd, 2008 at 7:41 pm
no way, real estate is cheap now. Look in the newspaper, tons of deals. The market goes up starting next spring.
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Dan in Calgary Says:
October 2nd, 2008 at 7:49 pm
Deja, your a clown. whats your point? that some of my predictions were off? so what? Real estate is a long term investment.
Oh, no, he’s brought up the “Real estate is a long term investment” argument. Oh dear, we have not yet been immunized to his bullet-proof reasoning. What do we do now? Panic, panic! Panic!! WIDWIDRICSAS! (“When in danger, when in doubt, run in circles, scream and shout”).
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Dan in Calgary Says:
October 2nd, 2008 at 7:51 pm
Chugga-chugga woo woo!
Shouldn’t this be “Boom chugga-chugga, boom chugga-chugga, boom chugga-chugga woo woo!”? It’s been a long time since I watched Barney and friends.
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browntown Says:
October 2nd, 2008 at 7:52 pm
hey nutbags! hey Dan, yeah i believe you’r in calgary. yup believe it.. only 200 day until stampede! i like pancake! ha ha reverse land making machine busy in tar sands! ha ha
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MickeyFinn Says:
October 2nd, 2008 at 7:53 pm
Patriotz said, “If this bust moves at the speed of 81-83, and it looks like that may happen, we will see rent equivalence and a probable nominal bottom around this time in 2010.”
I did a little armchair technical analysis of the average price graph of real estate prices for the REBGV (y’know, the one that goes back to 1977) and I came to the exact same conclusion… namely, that we are not likely to see the bottom until well into 2010. Don’t get me wrong, I’m as impatient as the next bear and I’d like to think it would happen faster.
My guess is that we will see prices retract about 50% from the high that was reached in February 2008 but that it will take close to 30 months from February to reach that low.
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Reknab Says:
October 2nd, 2008 at 8:05 pm
“@Reknab: So you work for a big bank and you’re just now stopping those lending practices?”
Yes, and we have been offering these for years! I have shaken my head in disbelief many times over the years over the things we have approbed, unbelievable. Not that I condone it, it was out of my control.
Also for “self employed” people, or anyone who said they were, we would pretty much give them anything at 65% LTV.
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betamax Says:
October 2nd, 2008 at 9:28 pm
Dosh: Anyone who bought in 2006 or before still has lots of equity built up.
bwahahahaha! Gotta go back two years already, and this thing’s just begun to tank. How long before we’re comparing to 2004, 2003, 2002, 2001?
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No downturn in decades to come Says:
October 2nd, 2008 at 10:08 pm
Thums up2Thu, Oct 2, 08 at 10:47 PM
NO DOWN TURN IN DECADES TO COME
Because of some new sfh in port moddy price acceleration was extreme last year as there is no new project that same acceleration is coming down at huge amount 18 percent in september and huge amount again in october. As far as rebgv concern they have no math to disclude or include acceleration that does not make sense but in reality there is no one paying extra and no one is paying less.
Conclusion:In reality prices are not falling specially in Vancouver.and the link is below……. http://www.canada.com/vancouve.....f9e144aead
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Drachen Says:
October 2nd, 2008 at 10:17 pm
Betamax
“How long before we’re comparing to 2004, 2003, 2002, 2001?”
1987! (that’s around when we last saw rent equivalence Patriotz)
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bcubbins Says:
October 2nd, 2008 at 10:17 pm
“After five years of unprecedented increases, housing prices are beginning to realign,” Dave Watt, REBGV president, said in a news release.
Hey, even Dave Watt acknowledges that this is just the beginning……
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patriotz Says:
October 2nd, 2008 at 11:06 pm
1987! (that’s around when we last saw rent equivalence Patriotz)
I don’t think so, some properties – condos in particular – were rent equivalent in 2001-2002 and I have seen postings from buyers to that effect.
Remember interest rates were a lot lower in 2001 than in 1987.
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Drachen Says:
October 2nd, 2008 at 11:27 pm
Patriotz
Oh right, I don’t believe interest rates really affect fundamental value significantly though…
I understand why you do, I just disagree.
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patriotz Says:
October 3rd, 2008 at 12:15 am
We weren’t talking about fundamental value, which is based on estimates of future rents, expenses, and interest rates, but about rent equivalence at time of purchase, which is a fact (you either have it or you don’t).
Fundamental value of course depends on interest rates over the long run, as that is what is used to discount future earnings. If you were able to borrow money in perpetuity the discount rate would be known, but it must be estimated.
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markx Says:
October 3rd, 2008 at 7:02 am
OK, I mean rent equivalent based on CURRENT market rent, that is rental places that don’t take a month of full time searching to find at today’s vacancy rates. Even after adjusting for inflation, rent has risen since 2001, and faster than income, due to increasing labour participation rate. That’s why I say rent equivalent by 2009, which would put us at 2005 prices.(I’m giving myself a bit of a margin here. Don’t want to say when in 2005.) After 2010, there’s really no bottom to prices, as there won’t be much of a bottom for rent.
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Nutty Professor Says:
October 3rd, 2008 at 1:05 pm
Wait a minute…
“Gone Are
blah, blah
-0% down”
Then:
“-5% cashback without 5% down coming from client”
Isn’t that 0% down?
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cashking Says:
October 24th, 2008 at 2:17 am
The irony of this for non-owners may be that when prices are finally low enough to buy in again (2010 perhaps), low interest rates will probably be no longer available. For those renting and gloating, I think you’d better get used to renting for some time to come as owning will be out of reach. Oh well, at least you can enjoy your investment returns in the meantime (not).
As a home owner that has made 80% on my RE investment over the last 5 years, I can’t complain about losing perhaps 20-30% on a house in kits. My wife and I are still considering selling and renting at this point (slightly over the peak), but we enjoy our home too much. We’ve lucked out.
Look, I think we’re all in for some tough times, at least those with a life (kids, careers, money). Don’t wish for upper/middle-class economic disaster too much – it’ll take down everyone else too. I also feel that it’s not fair that we are forced to bail out the banks at times like these, but can we really afford to cut off our own legs. We’re in it together – whether you like it or not.
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Anonymous Says:
November 26th, 2008 at 5:27 pm
Dosh Says:
October 2nd, 2008 at 4:53 pm
Deja, your a clown. whats your point? that some of my predictions were off? so what? Real estate is a long term investment. Your probably one of those idiots who predicted a 50% drop and prices are down less than two percent from last year. Anyone who bought in 2006 or before still has lots of equity built up.
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day Says:
November 29th, 2008 at 10:49 am
house prises in lower mainland will fall about 190000.00 to 200000.00,below the city assessement 2008.Becouse city don’t buy houses,and buyer’s already lost money in stocks.Rent dont carry mortguage anymore,foreclousers are up,we are in RESSASION,we are loosing jobs everyday.Everything have to come down and economy have to restart again from the bottom.
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day Says:
December 5th, 2008 at 8:06 am
never mind 2010.Lower mainland house prises are going to drop by 50% in 2009.We will be in 1995 level again.