Housing sales hit 20-year low
Sorry to end the love-fest that is the last post, but the news waits for noone. Today the Globe is reporting that Housing sales hit a 20-year low.
The selloff in real estate has morphed beyond a correction of overheated individual markets into a broad national slump, with prices posting their worst decline in nearly 20 years in November.
In the face of a collapse in consumer confidence, the number of resale homes sold in Canada plummeted by 42 per cent year-to-year to 27,743, the lowest level since January, 2001.
I haven’t followed Benjamin Tal’s comments as close as most here, but I’m guessing his tune is changing somewhat:
This is clearly a market that is extremely risk averse, and this is not the ninth inning of this game, this is just the beginning. I think that any hope of a quick turnaround … is misguided.
Housing sales hit 20-year low as real estate slump widens
-ReductiMat
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December 16th, 2008 at 9:59 am
First…
December 16th, 2008 at 10:07 am
I don’t believe this is about consumer confidence – in the absence of constant and dramatic appreciation in prices, it simply makes no economic sense to buy a house or condo right now.
December 16th, 2008 at 10:43 am
I posted this in the last thread, but as many people won’t look there and I think the topic is worth addressing I’m re-posting here.
Dave
“Let’s then pick the closest bottom to our current boom which was 2001 when prices were $360k. That would give 6.7% per year, which is higher than my estimate. Again I believe my original numbers went back to the 50’s.”
So then you’d say it’s reasonable to expect that house prices in 2031 (I presume that’s condo at 360k?) will be 1.3 million? Over which time median wages should increase about 50% or so. Is that about right? By 2051 it would be nearly 5 million and wages would have about doubled from now. Yeah that sounds reasonable, a family with an income of 120k living in a 5 million dollar condo (rolling eyes). After all that’s only 41 times their annual income right? They should be able to pay it off in a few thousand years if they eat nothing but dirt, buy nothing and walk to work.
[All numbers are based on 2001 which is the point in time Dave chose wage increases are based on average Canada wide salary increases for the last half dozen years (which is better than the Vancouver number and likely better than we'll see for the next while with the looming recession and all)]
December 16th, 2008 at 10:53 am
Sorry reposting.
***CHHC TO BACK NEW CLASS OF MORTGAGE*****
Another large segment of potential buyers waiting on the sidelines. This group, previously excluded from the RE market due to discrimination by lenders will be snatching up homes in the spring when the CMHC will start backing a new class of mortgage; The FFCHL (Family Feline and Canine Housing Loan)-also dubbed the “Sub-Prime-Sub-Human Mortgage”. Apparently many pets have been chomping at the bone, or sack of catnip, to flee the nest. These new loans, requiring only declared potential future income, will allow them to finally join the ownership society.
The mortgages will be backed by a special fund derived from a one-time, retroactive to 1983, 5000% tax on pet sweaters and booties.
December 16th, 2008 at 10:57 am
Drachen, do you really think the average condo was $360k in 2001? Give your head a shake. That number was the average for SFH in Greater Van.
Thirty years of 5.5% appreciation would be a five fold increase, or roughly $1.8 million for a SFH in 2031. Average prices in 2008 broke $900k. I don’t find it that hard to believe prices would double the recent peak to $1.8 million in 23 years.
December 16th, 2008 at 11:13 am
Dave
Oh, you’re revising your 6.7% number then?
I thought you said the recent peak was “abnormal” why are you now referencing it to calculate what might be normal?
So you think that 1.8 million dollars is reasonable for a family earning 120k per year? 15 income multiples?
Since you insist on being obtuse I’ll drag the time line further. You think it’s reasonable for a family earning 160k in 2061 to pay 5.25 million for a house? Don’t you see housing prices cannot go up faster than wages indefinitely?
Wage in 2101 would be 434k and housing prices would be 76 million, 175 wage multiples. Don’t you get that this is simply not sustainable?
December 16th, 2008 at 11:23 am
In 2002, the average price of a single-family detached bungalow in Greater Vancouver was $285,400. Source: RBC Financial Group Housing Affordability Index, 2002. Unfortunately I don’t have a link; the old reports aren’t kept online.
December 16th, 2008 at 11:40 am
I never used 6.7%. I thought it was pretty clear to those with basic reading comprehension that I used 5.5%.
The family that is able to buy a SFH in GV in 2031 will have a much higher income than you have assumed.
I don’t think anybody would take technical analysis and assume trends will continue for the next century. The point is that for the last 35 to 50 years houses prices have traded within a certain range. This trend will continue until it no longer continues. Assuming one cycle at a time is the only way you can apply it. I think it would be safer to assume that you will still be living in mommy’s basement at that time.
December 16th, 2008 at 11:42 am
Common sense dictates that if you can rent a place (including heat and hot water) for 1/2 the price of “buying” it (not including heat and hot water) then it is a no-brainer to rent.
I think the only people left who have not bought within the last 2-3 years are the ones with logical skills.
Realtors are going to have a little bit of an exercise in frustration trying to get people like us to buy now when we look around at all of our depressed friends and colleagues who either bought within the past few years or took out home equity loans and now they have to pay it all back with interest.
December 16th, 2008 at 11:59 am
Two years behind California. Price capitulation make be quicker here though, as buyers realize they can buy elsewhere for less.
December 16th, 2008 at 12:01 pm
Oops. “may be quicker”.
Preview is my friend.
December 16th, 2008 at 12:04 pm
Dave
“The family that is able to buy a SFH in GV in 2031 will have a much higher income than you have assumed.”
So what you’re saying is that eventually home ownership will only be for the extraordinarily wealthy? Remember condos will be going up at the same rate and will also be unattainable for median income families eventually.
“I don’t think anybody would take technical analysis and assume trends will continue for the next century.”
Well if it isn’t good at predicting the future reliably then what’s to say that now isn’t the time things shift to a different curve? If it won’t work for the next century when exactly will it stop working? Now? 20 years from now? 99 years from now?
You know your system is broken, you’ve admitted that much, but you still think your system works in the short run? What good reason do you have for believing that?
December 16th, 2008 at 12:15 pm
I think it would be safer to assume that you will still be living in mommy’s basement at that time.
That ad hominem is invariably used by people with no viable argument. Thanks for outing yourself.
December 16th, 2008 at 12:17 pm
If it won’t work for the next century when exactly will it stop working?
Drachen, Dave has addressed this already: “This trend will continue until it no longer continues.” Which apparently can only be determined in hindsight.
December 16th, 2008 at 12:18 pm
Dave … R u Katie from “Horton Hears a Who”
http://www.youtube.com/watch?v=xJkaKAIl_Fc
December 16th, 2008 at 12:35 pm
Fed funds rate almost zero.
woof.
December 16th, 2008 at 12:46 pm
betamax
His world is not quite the same as yours and mine. In his world he never insults others, he is sweet and perfect and always right, always the victim of the slings and arrows of others. He whines about the insults he receives a lot and in his whining inevitably he tries to demonstrate how stoic he is, never retaliating, never instigating and of course never whining about it. Think of him as a Messianic figure, the Jesus of Vancouver Real Estate, if you will, and you’re pretty close to getting inside his head.
December 16th, 2008 at 12:48 pm
Local Gov’t with financing problems due to RE collapse
Story:
” PoCo forced to borrow $25M for Coast Meridian Overpass
http://www.bclocalnews.com/news/36078504.html
QUOTE:
The current economic slowdown has forced the city of Port Coquitlam to dip further into debt than anticipated in order to pay for the Coast Meridian Overpass.
The city, originally expecting to have to borrow $6.2 million, will now need the full $25 million it’s allowed to borrow by the Municipal Finance Authority to pay for the project.
Several funding sources the city was counting on have either not panned out or have been delayed, including $13 million expected from land sales that have yet to be completed.
PoCo’s chief administrative officer, Tony Chong, said the global economic meltdown has forced the city to implement its contingency borrowing plan. “We are following through on a fallback strategy,” Chong told The Tri-City News Friday. “When we first walked into this… nobody would have any idea about the financial meltdown. It is a bit fortuitous of the financial folks [staff] to at least anticipate some of these things.”
The contingency loan, Chong said, was always a possibility and was presented during an open house on the project last year.
How quickly the city can pay back the borrowed money depends on several factors.
A part of the funds budgeted for the project depended on the sale of the old Port Coquitlam works yard, as well as several smaller properties the city holds.
Chong said those deals, and the $13 million that would have come from their sale, have been delayed. But he said he’s confident the deals will close and the city will receive the money it expects from the sale.
Another $5 million in development cost charge revenues has also been delayed after several residential and commercial projects, including Townline Group of Companies’ City Walk project on Mary Hill Road, and some Dominion Triangle development, were put on hold.
Once the housing market picks up again, Chong said the city will receive those funds, which will immediately go toward paying down the $25-million debt.
When the real estate market is expected to turn around is up for debate, according to Townline’s director of residential development Bob Pearce. He said the company is re-evaluating every area of its operations, including its Port Coquitlam project.
Whats that saying about a bird in the hand….?
What are these people smoking ?
PoCo citizens : Can you say SOL and Up go your taxes?
December 16th, 2008 at 12:56 pm
I think it would be safer to assume that you will still be living in mommy’s basement at that time.
Wow. Tell me you didn’t just go there. I thought you were doing a good job of remaining level headed, but the non-buyer as living in parents basement insult is sooooo 2007. You need a new one, how about “yeah, well at least I have equity to lose!”
..unless of course you bought in the last year, then you aren’t losing equity, you’re just losing money and going further into debt on an asset that is rapidly devaluating.
Tell me again why I’m a sucker to have cash in the bank?
December 16th, 2008 at 1:09 pm
Personally I’d rather live in my parents basement and inherit the house in a few years as opposed to being a moron and spending $500,000 on a condo that will cost thousands more every month than rent and be worth about $45,000 in 2031 and cost $10′s of thousands in special assesments and levies (I’ve been there)
Dave is obviously a realtor but not very good at it and clearly a bit on the slow side
December 16th, 2008 at 1:43 pm
Did anyone listen to CKNW Christie Clark yesterday? Guest was Tony Gioventu of condominium home owners association. Talking about special assessments and how no one can afford them, and the stratas typically have less than 25% of what they need in the contingency funds. People, especially new, absentee and investor owners, refuse to vote for needed repairs, leading to emergency patch jobs and far more extensive (expensive) repairs down the road.
Not yet posted in CKNW archives, I will try to find it once it’s up.
How about an “official” invite from the Pope for Tony to do a guest post here? Have you had any contact with Tony, Your Eminence?
December 16th, 2008 at 1:44 pm
To cover all bases….
Just name the next Bob Rennie Condo Project
The “Mommy’s basement”.
December 16th, 2008 at 1:53 pm
285 000 dollars sounds like a fair deal for SFH…lived here 15 years and remember what it was like before the boom …no jobs :<
December 16th, 2008 at 1:55 pm
Post # 21:
That is exactly what I was seeing in my crystal ball.
Perhaps a future topic?
New projects in need of an initial contingency fund or Older projects with low or depeleted ones ?
How many of these projects not only have unsold units( hence far less than 100% resident or any ownership) but how solvent are the current strata owners?
One may get a great deal on condo via a desperate owner, perhaps a foreclosure / bankruptcy, but what OTHER liabilites do you incur…ie such as YOUR perhaps continually adjusted pro-rata share of the contingency funds.
OR If the building is only 50 % sold and the developer has gone bankrupt…what would those strata fees look like over time?
December 16th, 2008 at 2:29 pm
“I never used 6.7%. I thought it was pretty clear to those with basic reading comprehension that I used 5.5%.”
You said both, actually. You say so many things that you ultimately say nothing except “buy now or be priced out forever”. You can’t be bothered with links, graphs or specific data, and I no longer can be bothered with you.
To me, this whole situation isn’t a game. People like you have helped bring our economy to a place of great instability through massive over-leverage and an over-reliance on an unsustainable real-estate-based economy. It has damaged more than our finances, but also has made the city uglier and I would add has also hurt the fabric of our society, pitting everyone against each other: sucker-throwing-away-rent vs. greater fool. Globally, this really sucks for the environment, too. I am honestly angry with people like you and I don’t really find it entertaining to watch various posters attack your spin. The more I think about it, the more I disapprove of giving you centre stage by making you a guest poster. By all means, bring in the bulls, but someone with a good, new, point, not this old wishy-washy hype.
I actually trust Rob Chipman because I know who he is and where he comes from. So if I am interested in the pro-real estate blog, I’ve already got one.
I have limited amounts of time, so I’ll be spending it over at the other site where jesse and the others seem to be, as well as calculated risk and hbb.
Thanks so much for hosting this Pope.
December 16th, 2008 at 2:36 pm
Dave:
you are arguments are compelling. in afct, they are blatantly wrong. And you risk to force a stupid purchase on a few gullible readers. Shame on you.
December 16th, 2008 at 2:37 pm
Oh, dear, I must apologize. I have realized that this is a new thread with a new post with an actual story attached.
This doesn’t change my frustration with Dave, but I didn’t mean to sound quite so much as if I was stomping off, but rather that I will just be skimming past the posts marked “Dave” after this, and I do recommend those other sites to new readers, who may want a broader picture of what’s going on.
Anyway, thanks, Reductimat.
December 16th, 2008 at 2:37 pm
Compellingly wrong, that is….
December 16th, 2008 at 2:57 pm
I vote for Dave to be banished from his privileges to post!
December 16th, 2008 at 3:02 pm
I still like Vanzee’s insightful comment vis a vis the disconnect between price and affordability being the root cause that created this whole mess. Lower intrest rates therefore will not create a bottom for the condo market. Supply is far in excess of demand. Bottom line, lower intrest rates now will not create new buying, quite the opposite. Prices must come down in line with the average persons ability to pay.
The manipulation of intrest rates by the Federal Government is what started this whole fiasco. Prices simply got far too high. The bulk of excess sales were pure speculation. The price correction is not deflation. It is a healthy realignment ofthe economic relationship between developers and purchasers.
The specuvestors are screwed and why should anyone care? The wholesale dumping of inventory is inevitable due to speculators not refinacing alligator investment condo’s simply because the cash flow to service deby equation doesn’t work for them. From a tax/investment perspective, taking a loss is the only rational avenue. Every CA will be recommending this strategy in the next two years. The sooner the better. Most of these loans need $3000 per month in debt service while average rents are $1250. I/R=V , the simplest equation in real estate and it will either make you or break you.
This is a centipede recession with many shoes yet to fall.
December 16th, 2008 at 3:05 pm
Reductimat, thanks for this post, sorry to go off topic on it!
Dave, you can’t say I didn’t warn you that no matter what you posted the argument would be ripped apart. You managed to stay away from insults, but then you choose to use the ‘mommys basement’ insult? Seriously?!? Way to burn up any shred of credibility you had here.
ellery does a good new bullish point exist? If it does it would be interesting to see. Now that the fed has cut rates to almost zero will that do the trick, or is North America simply setting itself up to be the next Japan?
It’s alarming that sales have hit a 20 year low across the Nation, not just in overpriced markets like Vancouver.
December 16th, 2008 at 3:11 pm
PM now warns Canadians about pending Depression
http://www.breitbart.com/artic....._article=1
December 16th, 2008 at 3:23 pm
Inflation still increasing in Canada , falls in US
http://www.globeinvestor.com/s.....2/GIStory/
Household wealth in canada is falling sharply
http://www.globeinvestor.com/s.....6/GIStory/
This does not make for a compelling story.
December 16th, 2008 at 3:25 pm
From the G&M article:
“The big difference is interest rates, which remain at historically low levels. The resulting low mortgage rates should help homeowners, and moderate this downturn, Mr. Tal said.”
Hmmm… last I checked, most mortgages in Canada are financed over a period of 5 years. Interest rates ARE at historic lows, but that only means that they have nowhere to go but up. Put these two facts together, and we may just have a tsunami of underwater mortgages coming up when over-leveraged homeowners start to refinance at much higher rates in a couple of years.
Nice to see how Mr. Tal manages to spin an upcoming financial catastrophe as a good thing, though.
December 16th, 2008 at 3:29 pm
Posted this in the last thread but thought it was a really neato animation so I thought I would post it here too… (wish I could hotlink so it would show up in the comment… sigh.)
Dave, per your argument that boomers outnumber millenials.
This one’s an animation about demographics in Canada; one even realtors can understand (no reading… Yay!)
So no strawmen about this being from the states, doesn’t apply here, yada yada.
You were wrong AGAIN. Fessup!
http://www.footwork.com/pyramids.asp
Also, here’s a great one that is about the states… Hmmm, something seems eerily similar about the Canadian animation and the one Chris Martenson uses….
http://www.chrismartenson.com/.....mographics
(well worth it, if you haven’t seen it yet…)
PS: Here’s a tip. You should focus on the arguments that you can win. When you pulled the boomers outnumber millenials crazy talk and then followed up with on the other hand, maybe the boomers will go buy another condo in the city nonsense to counteract my grounded-in-fundamentals boomers will sell to survive their retirement argument, what did you think would happen?
December 16th, 2008 at 3:37 pm
If you were holding your breath for a smooth recovery in 2009, exhale now. It ain’t gonna happen.
http://www.globeinvestor.com/s.....6/GIStory/
December 16th, 2008 at 3:42 pm
“does a good new bullish point exist?”
I’ve been wondering that. Prior to this summer, the bulls had facts (prices relentlessly climbing) on their side, while the bears simply had argument (fundamentals blah blah blah) but little else to show for it. Now the bears have both.
The bull “case” up to this summer was simply, and effectively, based on what was actually happening. Prices will continue to rise because prices are continuing to rise. Greater fools rushed in in order to keep from being priced out, or lose 10s of thousands a month in appreciation. Now, without that appreciation … why buy, again?
So what is the bull case? I haven’t dredged through the Dave hate-fest of the past couple of posts, so I’m not sure exactly what his argument is.
I think the only bull case to make is that the recession won’t be as bad as predicted or as hard on BC as some folks think, that employment will remain relatively robust, incomes high and household formation and net migration will continue to be brisk. The post – Olympic slump has already been priced in. Demand for units currently under construction has already been addressed through pre-sales. Rental rates will support amateur landlord-owners of those presales because the economy won’t be as bad as predicted. Prices will remain sticky enough on the downside to ride out any softness in the economy. Sales may slacken, and inventory grow, but sellers will choose to take their units off the market rather than sell for far less than their expectations.
Sounds awfully hollow doesn’t it. You could drive a truck through each one of those points.
Perhaps there should be a post with a contest for the best “bull” case…
December 16th, 2008 at 3:46 pm
Dingus
“I’m not sure exactly what his argument is.”
I’ll respond with your own words.
“Prices will continue to rise because prices are continuing to rise.”
He uses a bit of obfuscating mumbo jumbo but that essentially is his argument.
December 16th, 2008 at 3:50 pm
Dave take a deep breath and read what you’ve written.
Pretend it wasn’t you that wrote it and imagine you are a buyer.
You have a blog full of people who’re at least half intelligent and then there’s you and browntowns anti intellectual, incorrect gibberish.
How smart do you feel now?
What are you still doing here? No one cares what you think and you’ve done nothing but been wrong.
December 16th, 2008 at 3:58 pm
Yeah take the units off the market and rent them for 1/3 of the carrying costs and wait until until another 2,500 units hit the market in 2009 driving rents even lower.
Hmmm
Okay hold for 25 years and lose $2k+ every month until it’s paid off?
Wait until buyers default and start selling for fire sale prices and then follow like a sheep?
December 16th, 2008 at 3:59 pm
Here is my attempt at a bull case:
This time it is different, and that is not a joke.
Ben Bernanke is a student of the Great Depression. He is utterly determined to stop the fall in assets, all assets, using government intervention (call it socializing the losses if you will.)
Just today the US has entered ZIRP. That was the last bullet in the interest rate gun, and time for Benny to pull out the bigger weapons.
Everyone knows about Benny B’s big “dropping money from helicopters” speech waay back in, what was it, 2002? Will he really do it? It seems that he fears deflation more than inflation, so he very well could (metaphorically, anyway).
I will just tack on that our Canadian politicians have no qualms about simply copying every move in the US – with the adoption of our own subprime (0/35-40 and CMHC insurance) and with the recent bailout to the tune of more money per capita than the US’ 750billion bailout. Without government, the fundamentals are fooked.
In summary: here is the bull case. The government really wants the tax payer / saver living in mom’s basement to take it up the a** to prevent any kind of asset price fall and could pull out every big gun in the arsenal, short of actually dropping money from helicopters, to prevent them from dropping.
Hyperinflation is always a possibility… There is no limit to the amount of money printing that CAN happen, and we already know that a lot will have to happen due to the fact that CHMC already backs a huge percentage of Canadian mortgage loans and CHMC bonds have an implicit government guarantee.
The bull case is the possibility of hyperinflation. There is no psychological reason for prices to rise in the next 15 years, and no fundamental reason either, BUT very high inflation due to government bailouts can work its own magic.
Of course, I still think deflation should happen (fan of mish here) but ya never never know, do ya?
December 16th, 2008 at 4:08 pm
“ellery, does a good new bullish point exist”
well, not that I’m aware
I’m just saying that I appreciate the idea of new/other/bullish ideas, but I’ve watched Dave derail threads here and on PaulB, primarily getting involved in games of tit for tat, and rely on his opinion and very fudge-y analysis that is often numbers out of thin air or vague references to old posts that “we can go look up ourselves” since he can’t be bothered. I find the way he engages in conversation to be very manipulative and it rarely concludes in a real point. I think Rob Chipman is a fair counterpoint, because he relays actual data and has a set of coherent opinions which I can follow (I know not everyone agrees).
There are plenty of ranty bears on here who spout off without backing, but as it is socially unacceptable to go on rants about real estate, I figure they need a place to let of steam, and bear blogs provide a great outlet (since many things have been so thoroughly discussed and analyzed you can rant without explaining every point). However, there has been a group of posters on here who appear to have a genuine interest in analyzing data and numbers, and it has built into a meaningful conversation. When Dave is around, it dissolves into playground-time.
The other thing, is that I come on here to see alternatives to what I can find in the MSM. I do not automatically distrust all MSM, but I do suspect a bias based on ad revenue. It’s certainly not like Dave’s POV has been poorly represented in all available media sources (Lawrence Yun still gets quoted seriously in the American press, and they are almost 3 years into a crash).
Anyway, it’s your baby, and you found him appropriate. I didn’t really mean to get so caught up in the whole thing, I just wanted to be clear about why I said what I said (since you asked).
December 16th, 2008 at 4:09 pm
Holg#41, forgive me if I’m wrong but are you saying that hyperinflation is a good thing for the real estate market?
The Spanish figures are interesting because Spain is in economic parallel to Canada.
http://www.bloomberg.com/apps/.....refer=home
December 16th, 2008 at 4:13 pm
I should clarify what I mean by “rise in the next 15 years.”
I mean that prices will not be at the same level as they were at the peak of 2008 within the next 15 years.
I actually have a keg of beer riding on that prediction, so I did actually put my money where my mouth is on that bet
December 16th, 2008 at 4:18 pm
Is an off-hand comment about mommy’s basement really that offensive to people here? Really? Is it even 1/10th of what has been thrown at me? The question of what prices will be in 100 years begged for the sarcastic response.
December 16th, 2008 at 4:25 pm
Hi Paul,
Holg#41, forgive me if I’m wrong but are you saying that hyperinflation is a good thing for the real estate market?
I was only trying to present a bull case. I am a bear…
I think hyperinflation is bad for everything; but in hyperinflation, a loaf of bread can be worth more than a house is today (in non-inflation-adjusted dollars) within only a few years, so obviously houses would go up in “dollars” too.
The Spanish figures are interesting because Spain is in economic parallel to Canada.
Spain is probably the one of the most screwed places in Europe. I am bearish, but I don’t think Canada will actually have it as bad as Spain or Ireland. There were unbelievable numbers of foreign speculators in Spain (no numbers handy, sorry) whereas I think almost all of our speculators were local, contrary to what all the bulls were claiming.
Ireland, there’s no reason to get into it. Let’s just say all other bubbles pale in comparison.
This was a global bubble though, and it seems to be a “who can announce the biggest bailout” competition right now. The US is buying up mortgages, and the CDN government’s collection of assets classified as “other” is now at ~40% (oct, 2008) compared to 0% only a few months ago.
Are we competing with Golden Sacks’ level 3 assets yet? Whoopee!
December 16th, 2008 at 4:34 pm
Hello Dave,
Is an off-hand comment about mommy’s basement really that offensive to people here? Really? Is it even 1/10th of what has been thrown at me? The question of what prices will be in 100 years begged for the sarcastic response.
Please provide proof, from the coherent bears that you have some respect for, of these insults which you speak of. I don’t remember seeing any from the educated bear crew. Let’s not derail the whole thread though… 5 examples will do – equal to or worse than the “you live in your mom’s basement” cliche.
Browntown’s nutslaps don’t count – he’s a bull.
December 16th, 2008 at 4:34 pm
“Is it even 1/10th of what has been thrown at me?”
Nice argument.
December 16th, 2008 at 4:39 pm
What has been thrown at you? That you’re wrong, and have been wrong about everything you’ve said as far back as anyone can remember? Because that’s not actually an insult, if you know what the word means.
December 16th, 2008 at 4:53 pm
“Mommy’s basement” is the favorite insult of the pair of dongkeys heehawing you know where. It isn’t as bad as their use of obscenities like *fcuk* and on posters’ mothers. I wonder why Rob did not ban Tomchimp and JohnHaw?
December 16th, 2008 at 4:54 pm
Douglas Grey of:
http://www.homebuyer.ca/making.....investing/
was just interviewed on CBC radio and he said home prices have declined in the vancouver area over the past 6-9 months and people should not list their property unless they really need to sell because prices might increase again after 2, 3, 4 or 5 years.
The interviewer asked several times how much real estate prices have declined and after a few avoidant comments Gray finally choked out “2-3%”. Huh?
December 16th, 2008 at 5:01 pm
Holg #46, The numbers speak for themselves. I am suggesting apparent similarities between the two economies exist based on published facts. It’s nothing personal I assure you. Figures don’t lie and liars can’t figure, I think the old adage goes.
The Spanish finance minister refers to speculation by foriegn buyers affecting the market. I offer this by way of the Vancouver parallel.
“Ms. Kniffen said about 40 percent of Cascadia Pacific Realty’s clients were Americans. Most are interested in buying bigger houses in and around Vancouver to use as second or even third homes. The market has thrived to the point where more affordable housing has been replaced with high-ticket units, many used only part-time.
“It certainly has been a cause of concern,” said Brent Toderian, the director of planning for the City of Vancouver. “Some Vancouverites have expressed concern with having to compete with infrequent users — or second-home buyers — in a very expensive marketplace. It’s often been a source of tension and debate within the city.”
Holg, i am suggesting that as the situation deteriorates in the US, China, S. Korea, Britian ( vancs biggest foriegn contingents) etc., that more spec condos will not be purchased and that inventory will be dumped onto the market. I saw a show the other night that looked at the sales of personal items being dumped on the market. This included art works, wine collections, jewellery to raise cash as asset values plunge around the world etc., why should a Vancouver condo be any differant.
I was in Singapore recently and the number of redunacies is causing a huge flood of people whose fortunes have changed suddenly to sell their watches and other jewellery to pawn shops at rock bottom prices to raise cash. This is not anecdotal it was published in the Straits Times newspaper. Singaporeans are not coming to Vanc to buy condos it would appear if they are having to sell their furniture because of sudden job losses.
December 16th, 2008 at 5:18 pm
Hi Paul,
You bring up a real estate agent stating 40% foreign buyers. Where is your documented proof?
My argument is that the foreign buyer myth in Vancouver is provably false. Very very provably. We need to get paulb here for confirmation, but there never were significant sales to foreign buyers.
My argument is also that Spain very provably had foreign buyers – mostly from the UK, buying “cheap” real estate with the strong pound. Now that the pound has crashed, and the market in Spain has crashed, what happens?
Two bets!
1.) I owe you a 24-pack if you can prove there were more foreign RE speculators, per capita, in the city of Vancouver than the entire country of Spain. Vice versa if I’m right (you owe me a keg.) I’m going on my gut here.
2.) I owe you a keg if, within the next 5 years, the Canadian RE market crashes, peak to trough, relative to our own currency less than the Spanish market crashes in their own currency (the Euro.) Vice versa if I’m wrong. IE if CDN houses drop more in CDN dollars than spanish houses drop in Euro, I pay you. This includes the market peaks though.
Is it a bet?
December 16th, 2008 at 5:41 pm
I owe you a 24-pack if you can prove there were more foreign RE speculators, per capita, in the city of Vancouver than the entire country of Spain
To be fair, you should compare the coastal areas of Spain that were popular with foreign buyers to Vancouver. Most inland villages were ignored, just as Moose Jaw never really got onto Singapore’s “A”-list.
I actually knew a Korean party-girl, (friend of my wife’s friend), rich parents, big allowance, no responsibilities or job, owned places here, Miami and California. Her parents got wise early, made her sell “her” condos, and yanked her back home. That’s two years ago. They didn’t get rich by being stupid.
December 16th, 2008 at 5:55 pm
Hey alex you beat me to my question by mentioning Korean party girls.
Are permanent residents or new Canadians who’re living here off the fortunes of their parents ,who do not live here,considered foreign buyers?
If Asian and East Asian Canadians and their extended families money from abroad count then Vancouver and Richmond have a huge percentage of foreign buyers.
I know a bunch of Koreans too and was told a year ago that they weren’t coming here anymore because L.A. was cheaper, they had a bigger community and the weather was nicer.
But that is another topic altogether.
December 16th, 2008 at 6:03 pm
Good point bdk, Many who hold dual passports don’t show in any stats as “foreign” buyers, yet have little or no commitment to Canada, and have very opaque finances here. As soon as the tide turns they can easily disappear, and have to dump their properties. I don’t think anyone knows, except anecdotally.
December 16th, 2008 at 6:04 pm
Korea’s economy and housing market is taking body punches worse than Vancouver… and devalued currency rubbed into the cuts to make it mor painful
December 16th, 2008 at 6:08 pm
Hyperinflation:
it will kill savers who hold cash. In the short term it will provide a clean slate for debt, giving a kickstart to consumption/investment.
In the long-term it will mean higher interest rates (because you can’t fool savers twice, at least not just immediately after) and lower asset values. House prices will then suffer, just as well.
Just think about this: bubbles in the US started to happen when inflation was ‘credibly’ tamed and nominal/real rates went low for prolonged periods. Cheap cash and leverage induce asset prices to grow. But what if lenders stop believing in ‘credibly’ low inflation: long-term everybody lose when you let the inflation genie out of the bottle.
Of course, politicians are short-term agents…..
December 16th, 2008 at 6:51 pm
hey vancouver comrades your bust is on now
i posted my opinions on the ecomomy and bailouts on the bubleblog and fool blog
just in my humble opinion
auto bailouts are useless
the problem is not building the cars..its selling them
theyll just keep building cars into oblivion
subsidizing the forestry industry is useless..its not that they pay there employees to much
its the lack of people buying the lumber
they will keep building lumber inventories into oblivion
all they are doing is kicking the can down the road..the problem will still be there only it will be much bigger
the problem is high priced real estate..people spend so much of there disposable income on shelter
that that they can not buy the products that other industries produce for example autos and lumber
the economy has been destroyed because of over priced homes
the prices must come down fast
addition to the post above
consumers have hit the wall world wide they have simply run out of money to keep the ponzi game alive
every thing is over built
to many cars to many houses to much of every thing
this was painfully obvious to me
we are going to have a major recession for sure
taking our medicine will be nasty
but take it we must
and we are going to have to accept the fact that we will have much less for a few years maybe longer
and yes many many people will lose there homes
the REIC have destroyed the world wide economy
all the crap bailouts that the NDP and Liberals want wont solve a thing..nothing
December 16, 2008
December 16th, 2008 at 7:11 pm
Rents still seem high. I have searched Yaletown and I don’t see a big % drop in rental rates. So all the foreigners that hold Vancouver real estate aren’t selling on mass.
December 16th, 2008 at 7:19 pm
Dave: “The question of what prices will be in 100 years begged for the sarcastic response.”
The far-off future was used to demonstrate how ridiculous your predicted appreciation of 5.5% per year off into the indeterminate future is.
Property prices cannot increase at a rate greater than wages forever– that’s mathematically impossible. Well, impossible if people have to pay interest and principal payments. Prices have been increasing at greater than inflation for much of the Boomers’ adulthood.
I contend that we’ve hit the practical limit of that effect– prices have risen beyond a sustainable point, and that the Boomers’ reign of ever increasing asset values has come to an end. With the smaller generations following behind the boomers, there won’t be much stimulus to allow rising numbers of owners to exist. Without an ever-increasing number of buyers for a limited amount of land, land values cannot increase.
December 16th, 2008 at 7:35 pm
Hyperinflation (or just a lot of inflation) is the only way that I can see real estate going up next 5 years, or not falling significantly. However, the loss of jobs and just general money disappearance going on makes it seem impossible not to crash anyway (as Patriotz likes to point out). I do think people are waking up to the idea of credit being in real dollars, not little bits of paper you can reshuffle forever..
Unfortunately, as I watch the US Fed cut rates down to the bone, I worry we will follow their lead. Obama has Volker in his cabinet, which makes me wonder if they will wind up taking the other tack? We often seem to follow several years behind the US in our policies.
Inflation vs. deflation or both. This is going to get confusing.
December 16th, 2008 at 7:45 pm
M – one word for you friend
“immigration”
December 16th, 2008 at 8:05 pm
I’ve been tracking Yaletown rentals intently for what seems an eternity now.
For the first time in, well, ever, I’m starting to see BIG pricing drops.
One three bedroom started at $3,500 a month, then over the course of the next two months dropped to $2,600 before it was taken off the list.
Take a look at all the Coopers Pointe rentals Prompton’s trying to rent. Some have been on there for close to two months and even with 25% cuts, still no takers.
Furthermore, for the first time on the Prompton sheets, I’m seeing, “Offers Accepted” (what, they never were before?).
What is going to happen in the Spring? When the great Rush of ’09 starts, I wonder how that will affect the rental market.
December 16th, 2008 at 8:08 pm
Inflation vs. deflation or both
Can’t have both, except sequentially. They are opposites, as long as you’re talking inflation/deflation in it’s true sense, that is, as a monetary phenomena. Price increases, as most people think of inflation as, are only a result of, not the meaning of inflation. Prices are subject to many different influences, inflation being only one.
For instance, inflation has been masked for many years now by price DECREASES from productivity gains, off-shoring, cutting out the middle-man, tightening margins, and so on. That has allowed wages to be eroded in real terms, as inflation marched on, but was deliberately disguised by fun with numbers by the Government.
To be true inflation we need to see wage increases at the same pace, and that just ain’t happening!
December 16th, 2008 at 8:39 pm
Anon #63: What’s this about immigration? Metro Vancouver’s population growth rate was a whole whopping 1.3% per year from 2001-2006.
http://www.metrovancouver.org/.....Facts.aspx
December 16th, 2008 at 8:53 pm
consumers are tapped out.they cant work anymore ot hours
they can no longer support the auto industry and the housing industry and the electronic goods making industry
and the oil industry and the banks and starbucks
consumers need to relax and just try and survive
we have given all that we can give dudes
December 16th, 2008 at 8:56 pm
I contend that we’ve hit the practical limit of that effect– prices have risen beyond a sustainable point, and that the Boomers’ reign of ever increasing asset values has come to an end. With the smaller generations following behind the boomers, there won’t be much stimulus to allow rising numbers of owners to exist. Without an ever-increasing number of buyers for a limited amount of land, land values cannot increase.
What effect? And how do you define and measure it?
If you want to talk about valuation, then I would suggest affordability is the number to consider. Affordability, has traded within a moderate range (generally between 1.5 to 2.5). You make it sound as if affordability has gone well above historic norms. It hasn’t.
Smaller generations? I was wrong that Millennials were bigger in size than the Boomers, but they are fairly comparable in size. On top of that, we have positive immigration rates. And yes, 1.3% is still a lot of people. And yes, we do have an ever increasing population and a limit of available land.
The other way that land values increase is through inflation.
December 16th, 2008 at 9:05 pm
“Affordability, has traded within a moderate range (generally between 1.5 to 2.5).”
can you explain what that means? i don’t get it. what is this 1.5 and 2.5? and how is affordability traded? or is there some other more suitable word for that?
December 16th, 2008 at 9:14 pm
The term ‘affordability’ in real estate has a specific meaning and is a commonly used term. It is simply the ratio of income to carrying costs (payments + interest). Let’s say you made 50k per year and paid out 25k in carrying costs. The affordability ratio would be 2.0.
For the last 32 years (as far back as the data goes), the affordability ratio was mostly (say 90% of the time) between 1.5 and 2.5. The lowest point was actually at the peak in the 80′s.
The low affordability at the past peak is nothing new. We’ve been there and done that. Each time real estate came back to make new highs.
December 16th, 2008 at 9:15 pm
Judging from the your intellect Dave you are the most likely to be living in your Mums basement.
browntown or john would be much better at guest posting because at least they’re funny.
December 16th, 2008 at 9:19 pm
browntown or john would be much better at guest posting because at least they’re funny.
good plan!
the nutslap chronicles!
or:
the SUV as an investment vehicle
December 16th, 2008 at 9:24 pm
A lot here would have thought prices couldn’t go higher in 2006. We now have 2006 pricing, lower interest rates, lower income tax and gst tax, etc. Basically real estate is more affordable now. Prices could go back up. There is a limit to how long people want to occupy a basement suite. Momentum argument? this is a new era friends.
December 16th, 2008 at 9:25 pm
Beautiful explanation of the inflation/deflation issue by Martin Wolfe on tomorrow’s Financial Times. This is all you need to read to understand the problem.
‘Helicopter Ben’ confronts the challenge of a lifetime
http://tinyurl.com/6sy76f
This article is exactly what I have been posting about for the past few months.
December 16th, 2008 at 9:26 pm
very true anonymous because there clearly are no alternatives to living in a basement suite.
1,143 sq ft at Shangri La for $2200 is one…..
December 16th, 2008 at 9:29 pm
Hey Domus your link wanted money to read it but here’s a another one that doesn’t (at least yet)
http://www.businessspectator.c.....mp;src=sph
December 16th, 2008 at 9:48 pm
Dave, your sentence structure, word usage, and idioms sure could get you identified as a certain realtor of blog notoriety.
Strangely enough the BS you spit out was used to rationalize word by word the bubble I the US, yet the bubble popped.
Land shortage, mushrooming population, rich boomers, rich immigrants, everybody wants to live here, have gone bald and have no more traction at the apex of the hysteria.
Dave stop peddling this nonsense.
In the aftermath of the deleveraging which is underway, no matter how good the metrics, may seem compared to now, not many will have the financing or the inclination to gamble with RE in Vancouver.
December 16th, 2008 at 9:56 pm
Holg, dude, don’t have a cow.
“Ms. Kniffen said about 40 percent of Cascadia Pacific Realty’s clients were Americans” is a direct quote from the company not my writing fiction. Look it up on their web-site. Look for quotation marks in my posting . They are these sqiggly things “”"”"”"”"”" on either side of an enclosed grouping of words. Ex: The dog said “Woof” at the mailman. Woof is the direct quotation.
Are you saying that Americans weren’t buying the cheap Canadian Peso and getting 50% off all their purchases. This is the reason why Americans were buying here.
I don’t drink, but I like Korean party girls. How about one of those instead of the beer. 19ish, slim. Stand her on any corner in Yaletown for me with a sign around her neck saying “Korean Real Estate Investor”, she’ll be impossible to miss as I suspect she’ll be the only one in the city.
If you’d care to do some research I think you’ll find that the Spanish statistics are very similar to Canadian. You can also look at Australia and see the same similarity. And don’t you find it amusing that the people there were as stupid as the people here?
December 16th, 2008 at 9:56 pm
ReductiMat,
Congratulations at your first ever post it took lots of hat tips from the pope in the past between strataman disappeared some where and scullhead lost her job,k financial never returned back to report how he is doing in rental unit a great son who encouraged his parents and pushed them in rental unit as well.Dave congratulations to you as well it was a hit but i don’t wear any hat i tip cowboys hat to you and reductimates how ever VRENGD.
December 16th, 2008 at 9:57 pm
hey Pimp, one piece of advise friend-find out what helicopter Ben said today. You’re peddling yesterdays news.
December 16th, 2008 at 9:59 pm
The term ‘affordability’ in real estate has a specific meaning and is a commonly used term. It is simply the ratio of income to carrying costs (payments + interest)
GVRD median household income? About 62K
Median SFH? 750K
Mortgage payment with 25% down? At 6% 3595.71/mo
or 43,148.52 per year.
Leaving a bit shy of 18,000 for EVERYTHING else!
Back to you, Dave.
December 16th, 2008 at 10:03 pm
Sorry, that’s a bit shy of 19,000. Extra grand for the car repair. You’ll need it.
December 16th, 2008 at 10:11 pm
Dave
“The question of what prices will be in 100 years begged for the sarcastic response.”
Well it got the desired answer from you. You admitted your system will not work over that timetable. You avoided answering the obvious follow up question however, so I’ll ask again. If your system is broken in the long run what’s to make anyone believe it’s going to work for even a few more years? Why do you so oppose the idea that your system could be in the process of breaking right now? If, as you say, your system is good now, when does it break? At what time between now and 100 years from now does it fail?
Many many problems with your thesis Dave and, as always when cornered you simply ignore the issues.
Stop sidestepping the issue and dragging it to ‘affordability’, that word is simply a dodge used by the real estate salespeople to justify ridiculous prices.
December 16th, 2008 at 10:18 pm
Dave
“Is it even 1/10th of what has been thrown at me?”
See post #17
It’s certainly more than 1/10th of what I have thrown at you. I’ve been practically defending you on occasion here. Not your ideas, they’re complete trash, but there’s no need for people to insult you on things that don’t relate to your intelligence, your personality or your hygiene.
Actually there’s probably no valid reason for anyone here to insult you based on your hygiene either, I just threw that in there because I like saying things in threes.
P.S. I find it quite amusing that you take my gentle teasing seriously. As I’ve said before your personality shows on the page, you read like a book (a bad book, Danielle Steel or someone like that, real pulpy crap that’s only good for a long transatlantic flight or an epic bowel movement).
Merry Christmas!
December 16th, 2008 at 10:38 pm
“Can’t have both, except sequentially.”
You could have monetary inflation with simultaneous deflation in some markets or vice versa, as I understand it.
December 16th, 2008 at 10:46 pm
Squidly,
if one closely reviews your last babblings…er, I mean…post, it is quite apparent that you reveal….. absolutely nothing.
Can you try again and actually make a point this time??
John
December 16th, 2008 at 10:46 pm
I just don’t get how significant inflation can happen at this point.
Maybe the gubmint will mail $1000 gift certificates to every Canadian every month for the next several months. That would be about $33 billion a month.
The gift certificates can’t be saved and have to redeemed at a car dealership/real estate office/furniture store/Future Shop before they expire at the end of the month.
Anyhow, I’m tired. Must go to bed.
December 16th, 2008 at 10:51 pm
Domus,
thank-you for the link. I have been following with interest (uh, no pun) various inflationary and deflationary scenarios for awhile, and I still find it the most challenging aspect to understand. Once you get past the basics, the scenarios become complicated and pretty interesting.
From the link:
“Is deflation a realistic likelihood? Core measures of inflation strongly suggest not. But one measure of expected inflation – the gap between yields on conventional and index-linked Treasuries – has collapsed to 14 basis points. Moreover, yields on 10-year US Treasury bonds are already where Japan’s were in 1996, six years after the latter’s crisis began.”
“…as explained by the great American economist Irving Fisher in the 1930s, ‘debt deflation’ – the rising real value of debt as prices fall – then becomes a lethal threat.”
If anyone is interested there is a nice list of various scnarios and bank reactions in that article: recommended!
December 16th, 2008 at 10:58 pm
ooh, one more bit from the article:
“Once inflation returns, the central bank will need to sell assets into the market, to mop up the excess money it has created in fighting deflation. Similarly, the government must reduce its deficit to a size it can finance in the market. Otherwise, deflationary expectations may swiftly turn into expectations of above-target inflation. This may also happen if the debt sold in efforts to sterilise the monetary overhang is deemed beyond the government’s ability to service.”
this is what I have been wondering will happen, and I also wonder if we will see the housing market continue to deflate while inflation could ramp up again, and how that would last. I feel like there is so much banking and governmental manipulation that a strict Austrian school-style scenario might not happen? If anyone has an idea about this, I would be really curious to learn more.
December 17th, 2008 at 12:48 am
@alex. 82
19k? You’d probably want to use some of that pay your taxes, EI etc. I’m pretty sure the 62k stat is gross income.
December 17th, 2008 at 6:43 am
read on:
Yeah, that’s right! Forgot that bit about taxes. So you can’t even afford to live KD and value village style.
But you’re not hurting as bad as Dave, who just had his Beemer repossessed. Poor Dave, someone go buy a house from him.
December 17th, 2008 at 7:54 am
GVRD median household income? About 62K
Median SFH? 750K
Mortgage payment with 25% down? At 6% 3595.71/mo
or 43,148.52 per year.
Leaving a bit shy of 18,000 for EVERYTHING else!
Back to you, Dave.
Prices are going lower than $750k.
Why pick 6% for your mortgage rate? It isn’t very hard to get 5%, so that brings it down to $3,250 per month, or $39k per year. It’s even easier to go lower than that with a variable rate mortgage, but I think people are safer looking at 5 year rates.
Most people who buy SFH in GV are not first time home buyers. Many go in with more than 25%, but I have no idea what the median down-payment is. Do you?
Median incomes do not necessarily translate into the median SFH buyer. Actually, the two demographics are probably worlds apart. Clearly a student working at Subway or a low income renter are not the demographic looking to buy a home. So why we think that the median income is somehow representative or even useful as an affordability measure? People who buy homes do it in their highest income earning years.
And why should we think the entire population will be able to buy a home? Do the math and look at our density. It’s not possible. At this point in time, perhaps only the top the top 1/2 or 1/3 of earners can afford a SFH. So again, the median income is useless for your scenario.
And finally, you have not accounted for mortgage helpers. What percentage of homes have them? 10%, 25%…???
December 17th, 2008 at 8:01 am
Prices are going lower than $750k.
If you had stopped there you’d finally be right about something!
December 17th, 2008 at 8:57 am
On the topic of affordability or as some may prefer
“affordability”.
http://www.canada.com/vancouve.....f1&p=1
December 17th, 2008 at 9:02 am
I found this posting on the Greater Fool site. I guess it’s not only realtors who are feeling the pain but appraisrs, too. I wonder how home inspectors, mortgage brokers and real estate lawyers (the non-bankruptcy type) are doing right now.
” #8 Gordon C. on 12.15.08 at 8:21 pm
As for the “WET COAST” of Canada, it really sucks to be a Real Estate Appraiser. Sales activity is at the lowest point in ten years. That puts us back to pre-boom times which were a flat half dozen years. Prices are declining and in my city at a rate of 2 percent a month or roughly 25 percent a year for single family homes. Condo prices have rolled back to the Q1 prices of 2007. As for properties with 5 or more suites, there is no market for them and multi-family properties have stopped selling.
Lots of calls for divorces and I expect requests for court ordered sales to accelerate by Q2 2009.”
December 17th, 2008 at 9:52 am
Re MILLENIUM Development in Nanaimo
WEB EXTRA: Hotel developer asks city for five-month delay
http://www.bclocalnews.com/van.....42384.html
QUOTE:
The developer has asked Nanaimo city council for more time to begin construction on the 180-room hotel adjacent to the Vancouver Island Conference Centre.
Council is scheduled to meet Wednesday night in a special open meeting to discuss the proposed new terms.
In a letter to council dated Dec. 15, Millennium Nanaimo Properties president Shahram Malek says his company is still committed to the project and has invested “significant time and resources” even though it has missed several contractual deadlines that should have seen construction begin last summer.
QUOTE:
In his letter, Malek offered the City of Nanaimo some incentives as a “gesture of goodwill,” adding that Millennium is now ready to obtain a development permit after two failed attempts.
One of those incentives would be to give the city $50,000 per month starting from Jan. 31 to pay for each monthly extension, though that money – up to $250,000 – would be refunded once the hotel is complete.
What makes this interesting is that Nanaimo, like Vancouver, had a bit of a purge after the civic elections , the common thread being deals with Millenium.
However, I think Millenium is simply delaying the inevitable in Nanaimo, given they had to borrow $100 Million from City of Vancouver to complete the Olympic village. Can’t Nanaimo see the obvious, it is getting the wool pulled over its eyes ? Unfortunately, Gov’ts, especially Local Gov’ts , are basically whores that will take any legal bribe they can, like Milleniums $50,000 per month offer to buy or rent ” False Hope”.
I see Millenium playing the new councils in both Vancouver and Nanaimo like fiddles, despite all the bluff and bluster of the new Councils who got elected on the platform of “Dammit we will get to the bottom of this “.
Egos and legacies are on the line….regardless of who is in power and when…the taxpayer always lose when these bad quasi P-3 deals are signed.
PS: Stay tuned for a major move by Millenium on the “new” Vancouver Council, and moreso based on what happened with Madoff’s $50 billion Ponzi scheme . I’ll bet Ladner and Sullivan are breathing a major sigh of relief they ain’t Mayor for the next 3 years.
December 17th, 2008 at 10:14 am
I was wrong that Millennials were bigger in size than the Boomers, but they are fairly comparable in size. On top of that, we have positive immigration rates.
Dave what happens to our economy when productivity declines by say 1%? It’s bad right? With the Boomer generation winding down we’re going to see a declining population. What effect do you think that has on an economy? Oh and you’re right about immigration but guess what, most of the immigrants coming to Canada are Boomers! You’d think that a real estate agent might have even a cursory understanding of the demographics of the market they work in! Maybe you slept through the “Demographics 100″ component of your rigorous realtor training seminar?
December 17th, 2008 at 10:20 am
Dave
“Most people who buy SFH in GV are not first time home buyers.”
And those people don’t impact the market significantly. Sell 1 home to buy another and the net market impact is essentially 0. For the market to keep going upwards it needs to feed on new buyers and home ownership is at record levels.
But enough of you changing the subject and avoiding my question.
You’ve admitted your system of market prediction is broken over the long run. You’ve said your system works fine for the last 50 years but will fail over the next 100.
At what point between now and 100 years from now does your system fail?
What makes you believe the system is still working now if you know it will fail eventually?
Your system of market prediction is 0 for 4 right now in predicting recent trends, that, coupled with the fact that you know it will not work forever doesn’t tell you that maybe now is the time it fails? Really?
You’ve said in the past that you don’t purposely dodge questions yet twice you’ve avoided this one (in spite of your name being in bold at the top). How about an answer Dave?
December 17th, 2008 at 10:21 am
#95 Lily pad. Thank you for the insight into your market niche. Much appreciate getting professional real time info without a sales or personal agenda spin attached. Keep us up to date please.
December 17th, 2008 at 10:31 am
I personally know of 7 homeowners now that are going to re-list in the spring when “the maket recovers”
Kinda like: “IF I CLOSE MY EYES YOU CAN’T SEE ME”
December 17th, 2008 at 10:31 am
that is market, sorry
December 17th, 2008 at 10:52 am
Dave what happens to our economy when productivity declines by say 1%? It’s bad right? With the Boomer generation winding down we’re going to see a declining population. What effect do you think that has on an economy? Oh and you’re right about immigration but guess what, most of the immigrants coming to Canada are Boomers!
Do you understand what productivity is? You are not using the term correctly. Productivity is simply a measure of output per unit of work (e.g. one hour). The size of the work force doesn’t enter into it.
I can only presume you are referring to a drop in overall economic output due to a decline in the workforce. I doubt that our economic output will drop. Firstly, there are lots of workers coming behind the boomers. Secondly, our population is still growing. Thirdly, many boomers will remain in the work force in part time or consulting roles. Remember, they are an active bunch.
And finally, I would predict that should the workforce drop in size, productivity increases would likely make up for it. It’s a global economy and outsourcing services and products is easy to do. That will allow our workers to take on roles that generate higher GDP per work (i.e. higher productivity). But, I am not a macroeconomist so this is just a hunch on my part.
December 17th, 2008 at 11:18 am
Do you understand what productivity is?
Yes.
You are not using the term correctly.
How did I use the term incorrectly?
The size of the work force doesn’t enter into it.
Where did I say that it does? I simply said that it’s detrimental to an economy to have negative growth, am I wrong?
I also said that it’s detrimental to an economy to have an aging population. I’m talking about the effects of the Boomers aging and expiring on real estate values. But outsourcing will save us, thank you Jeebus!
December 17th, 2008 at 12:19 pm
Where did I say that it does? I simply said that it’s detrimental to an economy to have negative growth, am I wrong?
It sure isn’t what you wrote. Your commentary was all within one paragraph implying that you considered a declining population would result in declining productivity. Convenient that you change your interpretation after having it explained. GDP growth and productivity are two different concepts. You were confusing the two.
In any case, yes negative growth is detrimental to an economy.
December 17th, 2008 at 1:30 pm
Paul, dude… You seem to be getting too emotional about our little bet here…
I don’t think you understand that I am one of the biggest bears around. I am not predicting roses and chocolate bars for real estate!
Perhaps our economy is somewhat similar to Spain, that could be, industry wise. I am not disagreeing. My point was simply that they have more foreign speculators per capita than we do (ours were a myth!)
I am also not disagreeing that this burst is going to be unfrickinbelievable in scope!
“Ms. Kniffen said about 40 percent of Cascadia Pacific Realty’s clients were Americans” is a direct quote from the company not my writing fiction. Look it up on their web-site. Look for quotation marks in my posting . They are these sqiggly things “”””””””””” on either side of an enclosed grouping of words. Ex: The dog said “Woof” at the mailman. Woof is the direct quotation.
Let’s not get too pedantic here, mmmkay? I understood that was a quote from an RE agent, which is exactly why I ignored the hell out of the quote and asked you for a REAL stat, not something imaginary from the RE fairies.
Dude, it’s your own fault that you chose to use an RE agent as your proof that there are more foreign speculators in Vancouver than in Spain!
Is the bet on or off? Where are your numbers? Do you want to call a truce, or do you want to share a keg in 15 years?
December 17th, 2008 at 3:30 pm
Paul: Re #95
That posting was copied from the Greater Fool site. I am not the one who wrote it. I will continue to post any similar stuff I find.
December 17th, 2008 at 5:25 pm
As promised… Tony Gioventu of CHOA (Condominium Home Owners Association) as heard on the Christie Clark Show, CKNW. Starrt about halfway through hour two. This link should be hour 2 only, just go halfway through. Immediately
after some relationship fluff.
Well worth a listen.