The going wisdom is, that as homes rapidly depreciate, the "wealth effect" is lost and these homedebtors stop buying consumer goods, thus hurting the local retail economy.

But in my experience — four friends with expensive homes in West Van, now down 20 – 25 per cent — negative equity won't affect their spending because all four couples were maxed out on their resources to even be in those homes to begin with; they have not been spending like good little profligate consumers since Day One. So where is the loss? I suspect Vancouverites as a group have been so overly invested in their inflated homes that they have not been big spenders on anything else for some time. Indeed most stats show Vancouverites' spending lags that of places like Calgary and Toronto.

So — could the Great Real Estate Implosion in Vancouver co-exist with a merely flatlined local economy with no real consumer-led recession to be seen here?

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http://www.vancouverreflections.com/2008/10/21/fi…

I'm not saying it isn't going down, but I have a hard time believing it's falling that fast.

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If the story is true, let's hope the MSM picks it up. Sounds like a great leader. Remember: you heard it at VCI first.

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Well he is actually, but he has still been right about a lot of other things.

That's one reason I read his blog actually. If someone with such a different macro perspective from me agrees with me on things like RE we must both be right.

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Nov 20 $538,500

Nov 19 $510,000

Nov 18 $536,000

Nov 17 $585,000

Nov 14 $785,000

Admittedly, low sales volume makes analysis difficult, but the trend is showing. A month ago a sub-$600K day was rare. Three months ago a sub-$700K day was rare, and sub-$600K never occurred. When do we hit our first sub-$500K day?

These are the prices that are selling now. Only a few $M places sell to the uber-rich. And there are very, very few of those. And they're not gonna buy in East Van. It's gotta be the most difficult and painful thing for the east van flipper to realize this.

The realtor.ca website listings map shows listings all over the place and it's the end of November.

And yet the denial continues. I've got a colleague who scoffs EXACTLY like Peter Schiffs critics do when I foretell a big crash. Of course, he did buy his first condo in Yaletown this Spring.

The Peter Schiff video (again):
http://www.youtube.com/watch?v=2I0QN-FYkpw

BTW I love the way Peter's first critic is some arrogant economic advisor by the name of "Art laffer" As in "Laugher". Reality surely is stranger than fiction…

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Toronto has its own Maggie

http://www.thestar.com/Business/article/540073

"Toronto Real Estate Board president Maureen O'Neill."

"I think we're into a real consumer confidence problem. All the economic fundamentals are sound, but people are watching CNN and having a wait-and-see attitude. When they're listening to all the bad press they're bound to, we have kind of a collective herd mentality.

"People will start to buy again, and we'll see the numbers go back up."

Yes, everything would be just fine, if the media stopped reporting the bad news.

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LOL. Well said, except that Mish is not a lunatic gold bug. Mish called this deflation/meltdown/crash/whatever you call it very, very well. Mish is well worth listening closely to, unlike our least favourite lunatic gold bug.

And Mish is NOT calling for gold to the mooon!

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Now which one of you posted this on Craigslist? Abbygirl?

http://vancouver.en.craigslist.ca/reb/927875816.h…

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http://www.youtube.com/watch?v=2I0QN-FYkpw

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