Friday Free-for-all!
It’s the end of the work week and that means it’s time for the Vancouver Condo Info end of the week news round up and open topic discussion. Here are a few links and stories that have come to my attention this week:
-Thank you VHB & everyone who’s contributed to the Wiki!
-Guess the next 3 years: Vancouver Condo Games
-Tips on how to be a home-buying vulture
-2 mortgage brokers in Duncan say there is no housing bubble
-Would-be homebuyers may want to wait
-BC mills take downtime in “world awash in pulp”
-Spectrum landlord, ambassador to the world
-Video: Tom Barracks economic outlook
-What will work to kick-start global economies?
-Ottawa chops $4.3 billion, predicts small surplus for 2009
-US sinking deeper into recession, dragging Canada with it.
-US home prices hit 2004 levels, predicted to get worse
-US commercial mortgage crisis looms
-Chinas economic crisis worsens
-Affordable places to ride out the downturn
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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November 27th, 2008 at 11:07 pm
He moved out prior to listing his property, expecting a quick sale. Now he’s 3 months into paying both a rent and a mortgage, and has applied for a line of credit to help cover his costs.
Will he reduce his price more? Initially he told me he would reduce to $299K to make the price more psychologically appealing, but he stands unwilling to reduce further at $309K. I guess he hit his own psychological obstacle. I asked him why he decided not to go any lower, and he basically said “It’s worth $309K” and he’s unwilling to “chase the market down and sell his property for less than it’s worth”.
What if it doesn’t sell? Apparently he’s willing to stick to this price all the way to Spring, and if all else fails he will become a “reluctant landlord”. For now, he awaits an offer. Any offer.
November 27th, 2008 at 11:10 pm
Guess what action is required by bears and sitting out sold out buyers?
November 27th, 2008 at 11:33 pm
Market turns around when sell list ratio goes up above 35% btw are you guys trained for Olympic marathon?
November 27th, 2008 at 11:38 pm
There was, of course, only one thing to say in reply, so I said it: “What do you mean ‘we,’ white man?”…
About those precedents: Why did so many observers dismiss the obvious signs of a housing bubble, even though the 1990s dot-com bubble was fresh in our memories?
http://www.nytimes.com/2008/11.....ugman.html
November 28th, 2008 at 1:26 am
I’m a generally polite person so I didn’t laugh in the agent’s face.
This isn’t the first time I’ve heard this kind of poorly thought-through logic. But as a real estate bear I love hearing it every time.
Some stock traders make this same mistake. Rather than admitting that their investment has fallen and selling their shares for what the market will bear when their gut tells them that the “party is over,” these individual investors choose to hold and wait for the market to improve. The fault in their logic is that invariably lots of other investors are trying to do the same thing. The effect is that all of these investors acting individually cause what is known in the stock market as “over-hang.”
Over-hang is a large inventory of shares that really just wants to be sold. Over-hang has the effect of killing the market slowly for two reasons… first, if and when the asset’s price starts to rise there is a seemingly endless supply of people who will sell into the rally… which has the effect of killing a budding rally just as it starts. Second, if an asset’s price doesn’t rally for an extended period of time, some of the investors who are attempting to remain patient invariably give up and sell. In the market it is referred to simply as investor fatigue.
Either way over-hang will kill a market… slowly.
How many times have you heard someone say something like, “I’m going to take the property off of the market until the spring.” Guess what, your not the only investing genius that thought of that idea! Surprise, there is going to be a tidal wave of properties hitting the market in the spring. And since prices will continue to slide into next spring that is just going to cause even more of a train wreck at that time.
Oh yeah baby, this gonna be good.
November 28th, 2008 at 1:33 am
Listings: 3067 (-13% yoy)
Sales: 923 (-69% yoy)
Sell/List: 30% (-54 pts yoy)
MOI: 21.1 (462% yoy)
Actives: 19507 (76% yoy)
Avg Price SFH $753,967 (-7% yoy) (-9% mom) (-18% from peak)
http://www.realestatetalks.com.....p;start=45
Paulb’s stats: http://www.northshorepropertie.....?aPageId=8
We are at 21 MOI and sales may not exceed 1000 units for September. Average price for a SFH is down -9% MOM! This is truly a real estate meltdown in Vancouver of epic proportions.
November 28th, 2008 at 7:18 am
November 28th, 2008 at 7:34 am
“Speaking of which, why not make two offers at the same time on two competing properties, and then let that fact be known (through your agent) to the vendor? That will add even more pressure to the poor guy, as he tries to figure out what he must do to save the deal, and give you what you want. This may be cruel and unusual, but just consider it payback for all those multiple-offer situations greedy vendors placed buyers in during the bubble years.”
I’ve asked this before, too late in a thread to get a response. (Or I’m just a bore, being politely ignored!)
(Romeo and others interested in tower life listen up.)
Would a “subject to” in an offer worded something like this be legal?
“Subject to none of the other identical units for sale in this building, who have in hand the same offer, returning with a lower acceptable price.”
It would, of course, need to be very carefully worded. You don’t want to end up with purchasing multiple units by accident. The intent is to promote a multiple bid situation in reverse.
November 28th, 2008 at 7:37 am
“The grim economic forecasts attributable to the global financial crisis caused household confidence to plummet this fall,” Desjardins said. “This climate of uncertainty also contributed to the ongoing decline in the number of existing homes sold, which is down 12.6 per cent in Canada since the start of the year, and down 26.5 per cent in Calgary and 29.2 per cent in Vancouver.
it will be very hard to spin this in a positive fashion….. not that some may really try….
November 28th, 2008 at 7:45 am
Well, the way I look at it, your friend has made money over the 7 years (unlike others who bought at or near the peak and have now lost money ).
It isn’t clear if this is his principal residence, but I will assume it is.
Good decision are often based on analysis which is based on patterns.
This VCI Web - Site is a no - holds barred venue for everyone to submit RE data and discuss it. All I see is bad news…contrarian views are delusional.
RE is cyclical, and in my experience it takes years for the RE cycle to re-load and re-boot. In my view, I have not seen anything like this one… and I think the indicators are that it will get worse, based on there is neither any realsitic chance of rebuilding what has been a bubble and no stability(ie no stop in the decline)
In my view, I foresee an RE”Tsunami”…if you recall the Tsunami is based on a massive displacement below the surface resulting in a wave action that literally appears out of no where when it crashes the shore. We will see sales now via the absolutely desperate,specuvestors etc. and this will set some sort of market benchmark.
However I predict we will see a tsunami wave of selling soon by those who are the ” hope ’springs’ eternal ” types, the old “sell in spring” myth…which will be those who have denied and delayed the bitter reality and may be in an even greater sense of panic. These types may be holding on and funding a losing proposition when selling NOW may be the most cost effective move.
My advice is don’t get greedy, there may never be a rebound to their peak price…take the profit and run…and that profit will be less and less as each day passes.
November 28th, 2008 at 7:45 am
good point!
one point that was mentioned was
subject to vendor paying all closing costs
and property transfer tax…
if your opening salvo contained
multiple contingencies you
could have the vendors feeling defensive
and slightly off balance…..
maybe i should ask rob to write up
a “stink bid” offer…
November 28th, 2008 at 8:03 am
November 28th, 2008 at 8:27 am
The 2oo suites of social housing development at Little Mountain that was recently closed. Holborn (the Ritz Carleton developers )were to be the developers.
http://www.canada.com/theprovi.....b53fab782f
This 2000 unit condo Project is now on hold…a year behind schedule,….and people want these social housing units re-opened.
PS: I seem to recall Holborn bragging it had private $$$ to fund the Ritz - Carleton…their delay was due to minor changes. Uh Huh…
November 28th, 2008 at 9:05 am
He suggested to find three properties you like, don’t get emotionally attached to any of them, and just start lowballing. If none of them take your offer move on to the next three properties that you like.
My real estate agent asked me after the second property owner turned down my lowball offer: “Are you really serious about buying?” heeheehee
The third time I made a lowball offer I was successful. The offer was 17% below asking (140k/169k) and after negotiations I ended up purchasing for 12% below asking (149k/169k).
In 1998 there wasn’t as much overbuilding as there is now, so it didn’t make sense to bid on three units in the same building, but now there are so many empty units in new buildings I would say “Why not”? If you want a place get out there and start lowballing. (Except these days I would start at 50% under asking instead of 17% below.
November 28th, 2008 at 9:18 am
http://www.househunting.ca/buy.....09c4a8c5cf
QUOTE:
Seeing Obama reaching the White House is affecting the Valley’s real estate market, according to Kyle.
“With the U.S. election being over and done with, we’ve noticed a change here. The phone is ringing off the hook. It’s almost like a switch has been turned on. November is traditionally the busiest month for refinancing and this is also a great time to buy a house. The money’s available and the rates are good,” she said.
A realtors (yes a REALTORS !!!!) rebuttal to the above
QUOTE:
“Gord - a RealtorTue, Nov 18, 08 at 07:25 PM
If you haven’t been paying attention, sales are way down since the economic meltdown with listings continuing to pile up. Until the buyers return in force, the listing surplus will keep pricing on a downward trend. When listings come down and some good news hits the airwaves, the floor will shore up quickly. Until then, there WILL be bargains and for buyers, it is the best conditions in several years for picking up a bargain. Don’t wait until it turns around if you are looking for a deal! ”
My own experiences is that the Island and other rural areas tends to attract local retirees (as opposed to off - shore money). Many of these have cashed out their family homes, buy newer and cheaper homes/condos on the Island, and still left with money in the bank.
We were in Duncan this summer for a few days,.., and they have a mega WalMart, REVY etc…as part of a massive commercial redevelopment. However, I don’t see much industry to attract new blood…it seems to be much like many communites and ESPECIALLY the rurals ones….they rely on Real Estate pimping . Now the mortgage brokers quoted amay be correct…in the short term, and perhaps people will still see a big differential in selling in the mainlands / GVRD areas and buying over there on the Island.
However, how long can that type of bubble last??, given it still requires a differential in prices “there” vs. “here”.
The other thing people should note is that often those that retire over there often have to move back to the City,…good health care for seniors is often at a premium
and not readily available in these more rural areas.
November 28th, 2008 at 9:22 am
Don’t you think its a bit early. Maybe in a year or so?
November 28th, 2008 at 9:30 am
November 28th, 2008 at 9:31 am
November 28th, 2008 at 9:33 am
November 28th, 2008 at 9:36 am
“a land making machine”
November 28th, 2008 at 9:39 am
It is worth exactly what someone is willing to pay, not a penny more. Why is such a simple idea lost on so many folks?
I know someone trying to sell their apartment since spring, bought for $265K in 2007, listed for $329K because that’s what it was “worth” based on the last sale and some bad realtor advice. Today it is at $285K with no buyers in sight. I wouldn’t be surprised if it sold for far less than he paid, unless he waits until spring, then it will sell for even less than that!
November 28th, 2008 at 9:41 am
PS Maybe the (2) will meet ?
November 28th, 2008 at 9:49 am
So, if I want to buy a place for $400,000 (listed price at $800,000 now), I could lowball now for 400,000 and pay 40,000 down and have a 360k mortgage
OR
I could wait one year and save 24,000 more while renting and then pay 64,000 down and have a 336k mortgage. The second strategy would reduce my mortgage by 24,000 or 48,000 (p&i) over the life of the mortgage (26,640 net savings after rent).
If I wait a year I also have a chance of getting a 60-70% discount off today’s listing price.
November 28th, 2008 at 9:56 am
Unless there is some new caselaw out there it won’t fly - that is, of course, only if someone sues on the outcome and fairness of the bidding process…
November 28th, 2008 at 9:57 am
November 28th, 2008 at 9:57 am
plus the vendors get to experience the
“Spring From Hell” 2009 listing disaster.
sort of like a motivational seminar
‘cept it’s free!
November 28th, 2008 at 9:59 am
November 28th, 2008 at 9:59 am
Buy stock in “Armaggedon Inc.”
Global economic depression will result in global turmoil .
Countries will have high rates of unemployment, be more protectionist ,….and also start restricting immigration.
With low birth rates in most Western Countries…, there will be less demand for Real Estate, a glut will appear and that is the equivalent of a “landmaking machine” .
PS How many of you are aware that many of those Monster Houses they built starting in the 1980’s are quickly turning into rooming houses ? A neighbour of mines most serious offer (a few months ago when the market was still hot) for his $1 million + monster home was from an Asian lady doing “the Math ” and she figured that the rental of each room would cover a lot of the financing. (In fact, loopholes in many City Bylaws actually allow for this..ie they are not technically illegal suites). The old Shaugnessy area of Vancouver has several Mansions that are actually rooming Houses coverted after the 1930’s Depression/WW II and still used as such to this very day.
History does tend to repeat itself.
November 28th, 2008 at 9:59 am
Absolutely! Why would it be illegal to tell multiple sellers that you’re offering a lowball to all of them and first one to accept gets the sale? You can put any legal subject you want into an offer, and this is no more ‘unfair’ than the multiple bid situations during the bid. Markets change, we all knew this, if a seller didn’t.. well… You know what they say about a fool and his money.
November 28th, 2008 at 10:36 am
Because he’ll be able to buy an identical property for a far bigger discount in 2010. No way is this market going to bottom before then.
November 28th, 2008 at 10:52 am
November 28th, 2008 at 11:09 am
Mickey,you mean you like to buy at high?
November 28th, 2008 at 11:10 am
November 28th, 2008 at 11:11 am
A few years ago I spend some time in Guatemala and Nicaragua. Both places have a really, really low cost of living. I was paying $150 a month for room and board. Not much work, but at that price, one can be on sabbatical for a couple of years while things work themselves out.
November 28th, 2008 at 11:37 am
Take off the pimped premium…ie the gouge included in the price due to a hot market.
Exclude the premium aid for labour and materials. Material prices have collapsed. Labour costs likely will too soon .
Call you insurance company and get a quote for ” replacement costs”
Keep in mind that anything bought now has that ” ewww its old or used….” facet to potential buyers in the future.
Do that sort of number crunching in your bid.
I am not in the market, but if I was I’d wait quite a while…(the old gut feeling we AIN’T seen nothing YET ). Real Estate is simply a commodity like anything else.
November 28th, 2008 at 11:42 am
You forgot to add on interest and taxes for the same period to the cost of buying now.
November 28th, 2008 at 11:43 am
Please bears tell me I am not dreaming. This is turing out a lot better than I had even imagines and its only been 6 months. But dont worry greedy ones, the market will recover in the spring when every specuvestor and his/her dog list their property in a better market! Ha, I predict reality will set in after the spring and then the real slide will begin. Might go buy that big screen TV for my rental, figured I saved $1,000 today by not being a greedy specuvestor and paying $4,000 a month for a house that costs me $1,700 to rent!
November 28th, 2008 at 11:54 am
Thanks for keeping me on track. It’s so haaaaaaaaard to wait. I love shopping! But you guys are right. Patience will pay off BIG TIME!
November 28th, 2008 at 12:15 pm
November 28th, 2008 at 12:23 pm
Re: Stink bid
November 28th, 2008 at 1:01 pm
“Save up to increase the downpayment while the actual purchase price continually goes down… sounds like good strategy to me .
PS Maybe the (2) will meet ?”
——————————–
That is exactly our “Plan A”!
Regards
arit
November 28th, 2008 at 1:07 pm
“Spring From Hell 2009″
Ooooohhhh! I am liking that term! Liking it a lot!
I have a feeling it is not the last time we hear it.
Kudos and register it, so you can make as much money as I did with “Sticker-Flicker”!
Regards
arit
November 28th, 2008 at 1:43 pm
1.You don’t mind paying 50% more than you could pay in six months.
2.You just can’t bear to have proud owners looking down at you simply because you don’t want to go bankrupt like them.
3.You want to pay for your own paint and maintenance.
4.Get in on the special assesments that’ll start popping up real soon. If you don’t somebody else will!
Get out there and buy right away or risk having way more selection (who wants more choice?) and a lower price (who wants all that pesky money) plus the realtors really need the comission to pay for their leased BMW’s
November 28th, 2008 at 3:22 pm
November 28th, 2008 at 3:35 pm
This is a low ball bid of a stock that has had terrible news come out.
In this case everybody said it would drop 25% and it did but rebounded and some people were able to catch this rebound. They also caused the price to drop further harder than would normally have happened.
November 28th, 2008 at 3:36 pm
November 28th, 2008 at 4:11 pm
Call me nuts but I think being up front with clients builds long term relationships more than scamming them once and alienating them forever. A happy customer tells four people and an unhappy one tells twelve so imagine how many they’ll be telling after 35 years of overpaying for a worthless condo.
November 28th, 2008 at 4:14 pm
We have already established that there is a land making machine and you still owe me for opening your eyes to this invention.
November 28th, 2008 at 4:23 pm
November 28th, 2008 at 4:27 pm
November 28th, 2008 at 5:07 pm
WHAT A GREAT TIME TO BUY!
Lower Prices + Low Interest Rates = HUGE SAVINGS!
The Media Reports Prices Will Drop Approx 10% in 2009.
This Is Based On NEW Homes NOT RESALE Homes!
Current Inventory Is HIGH BUT Volume Is DROPPING!
Do You Want To Look Back To Today and Say To Yourself
“I Wish I Would Have Bought That Place When It Was Only?”
Rates (& Resale Prices) Are Predicted to RISE Spring 2009!
I keep waiting to hear “Worthington Ford in Federal Way–the ONLY way! Open til Midnight every day”(for those of you that recall those great commercials from the 80s)
November 28th, 2008 at 5:11 pm
http://vancouver.en.craigslist.....12265.html
November 28th, 2008 at 5:33 pm
I found this buy/rent calculator over at Alberta Housing Blog. Hat tip to Gloria.
The calculator accounts for the possibility of negative appreciation, but unfortunately does not allow for variation in interest rates over the life of the mortgage.
November 28th, 2008 at 5:34 pm
Just google nyt buy rent calculator and you will find it at the top of the list.
November 28th, 2008 at 5:38 pm
November 28th, 2008 at 5:45 pm
hairstylists, warehouse workers and postal workers figured it out.
November 28th, 2008 at 5:47 pm
November 28th, 2008 at 7:28 pm
Let’s all answer Norm King’s ad…all show up…and beat the…%$* &*# #@& (well ya get my drift)
November 28th, 2008 at 7:40 pm
We already knew this from last week. Now we have the name.
November 28th, 2008 at 10:33 pm
Broken down: 7 days were in the $615-685K range, 8 between $720-795, 2 between $845-870, 1 at $927 and 1 at $1.06mil.
If it wasn’t for the one day this month with a $1mil average, we’d be at $738,486. The last two weeks came in at $737,750.