Festival of light goes dark.
As if it’s not bad enough having the BC Real Estate Association announce their forecast of a 14% price decline on your downtown condo, now you won’t even be able to watch the fireworks in English Bay from your balcony:
The HSBC Celebration of Light, the summer fireworks festival that has attracted thousands of people to Vancouver, will not proceed this year due to a lack of funding.
The Vancouver Fireworks Festival society said Wednesday in a press release that the not-for-profit society has been unable to retain and add enough sponsorship to meet the event’s $4 million budget.
“It has been an exceptional 18-year event — the largest of its kind in the world — and it is a credit to our many exceptional sponsors that we kept the event going year after year. However, the current financial situation makes it impossible for us to continue.”
At least you can take some comfort in the fact that you still live in the “Best Place on Earth”.
February 5th, 2009 at 6:13 pm
Disbelief:
Too bad thats not how it works. if you could make that happen you'd be a hero to a lot of people
February 5th, 2009 at 4:47 pm
The developers on genuine owner/occupier are going to be left with the deposits and then will sell for market value. You can't get money from a pauper. When you ain't got nothing you got nothing to lose…
February 5th, 2009 at 4:19 pm
patriotz:
"Do I have to say it again? Back when people used actual gold coins for money, lenders charged interest. Got that?"
Apparently my earlier post was over your head. Let me try again using grade school language.
The point is not whether charging interest is a new phenomenon. Nobody is claiming that. The question is whether charging interest has always been necessary.
Lenders charge interest for a variety of reasons. To guard against credit risk is one. To make a profit, if the lender engages in lending as a business venture, is another. And to protect his principal against inflation is yet another.
The risk of inflation eroding your principal is a modern day phenomenon after the advent of fiat paper money. However, the desire to make money, and the risk that the schmuck who borrowed your money may not pay you back, has been around since the beginning of time.
You conflate all these types of risk when you summarily conclude that "people have always charged interest, even when gold coins were used for money". If you are not concerned about credit risk or making a profit, you do NOT need to charge interest when lending someone your gold. On the hand, even if you are not concerned about credit risk or making a profit, you STILL need to charge interest if you are lending someone your cash. This is because cash is vulnerable to depreciation over time due to inflation, and you will be essentially giving money away if you do not charge interest on your cash.
In Greek and Roman times, people either stored their gold/silver in their homes or sometimes in a vault at the temple. People felt the temple was a good place to park some of their wealth because it was solidly built, public, and associated with a deity. When they parked their gold at the temple, the temple did NOT pay you interest on your deposit. Why should they? The temple was not a lending business, and if anything, they were offering depositors a service by holding their gold.
On the other hand, money changers and loan sharks DID offer loans, on which they charged interest. Oftentimes a lot of interest. But this was to earn a profit and to compensate them for the risk of default.
So once again, absent a profit motive or credit risk, gold does not NEED to pay interest. On the other hand, even absent a profit motive or credit risk, cash generally MUST pay interest, because cash is vulnerable to inflation.
I should note that the reaction I get when I talk about gold and the monetary system today is much like the response I got when I told people 3 years ago that the real estate and financial markets were going to crash. Nobody wanted to hear it, just like nobody today wants to believe that our currency system is unstable. It was Shopenhaur who said that all truths pass through three stages. First it is ridiculed. Second it is violently opposed. Third it is accepted as self-evident.
February 5th, 2009 at 3:57 pm
Skye:
Very funny vid, Patrick is in total denial or he's desperate and trying to be 'salesman' and wants to cover the 3000 p/m he owes Re Max for his desk fee.
It would seem that he can't differentiate the real from the unreal e: rental picture on Craigslist in Vanc. There are plenty of asking prices above the $3000 p/m for one & 2 bedrooms , that doesn't mean they're renting or have any hope of getting it.
There was a place exactly like that that he must have driven by a few moments before he plugged in asking 3500 p/m for a 2 bedroom in Richmond, still for rent sadly for patrick.
February 5th, 2009 at 12:40 pm
Skye: That's a very funny video, I couldn't help but leave comments on that. If realtors really believe the stuff they're saying then they're in worse trouble than I thought.
February 5th, 2009 at 12:21 pm
NO -LYMPICS: You mean like this guy?
http://www.youtube.com/watch?v=TwxyLnJTT4I
February 5th, 2009 at 10:58 am
scullboy;
Another great post !
Maybe the best analogy is the BCREA beams this BS into the microchip planted in the heads of realtors.
In hindsight,..the worst possible demogrpahic is a realtor say late 20's to mid 30's in age…has no clue what a real recession was like , programmed to feelings of entitlement, and THEN getting gobsmacking blindsided by "the mother of all recessions" aka edge of a depression. Some of us were at least inoculated a bit having experienced a few .
Its like being on the Titanic , parked in a sheltered bay and still smoked by the iceberg ie "where the F*ck did THAT come from" ?
February 5th, 2009 at 10:46 am
Patriotz:
" But rest assured, the developers will not let anyone get away without either an out-of-court admission of damages – which may then be released for a nominal amount – or a court judgment. NFW."
Yes agreed, even if it is simply going through the motions to have this formally and legally acknowledged. Then closure can occur .
I envision other phenomenon…condos will be much like perishables…I can't see inventory sitting for the sake of sitting and hoping for a market turnaround . Clear the decks and move on…things like stratas need closure and certainty re: ownership and strata fees,or else new problems may evolve from unresolved ones.
February 5th, 2009 at 9:05 am
realpaul:
that should be
so FEW people think to consult a lawyer
February 5th, 2009 at 9:00 am
NO -LYMPICS:
The fact is that these trust accounts are not very secure at all. There is a long history of 'trust accounts' getting raided. Signing authority is held with the principal, if they decide to remove monies from the account there is no one looking over thier shoulder. Ideally it would be best to use a lawyer and have trust monies lodged in the lawyers account. But so people think to consult a lawyer before purchasing real estae. Stupid, stupid ,stupid.
Todays news isn't looking good.
Tolko Indudtries, another wood mill is shutting down plants and idling more workmen in the interior. Bad news for towns like Armstrong.
Seniors in the Okanogan are seeing thier real estate equity dissapear as is talked about in Garth Turners blog today. This is a continuum of bad news for the population as it has been a horror show for senior investors for the past few years with record low intrest rate returns, government tax grabs killing the income trust stream, bonds at record lows, the stock market crashing, and not the last step down for many, seeing thier property values plummet down 50% or more. It's all pretty sad, and getting worse by the day.
"In fact, the news from TD’s economists could not be more grim than it was this day. The bank’s Derek Burleton, a guy I know well as a moderate, was saying we should expect at least 300,000 more jobs to be trashed this year. That number equates to about 3 million in the United States, surpassing the 2.6 catastrophic jump in the unemployed there in 2008. Jobless people don’t buy cars or houses, and they scare the hell out of the rest of us. There but for the grace of God….
The perfect storm."
In the US theres no let up, 626,000 jobless claimants thus week, and growing exponentially.
And of course building permits are down. Even hotel room occupancy in Hawaii is down to 2001 levels at 58% and creating waves of unemployment, although it easy a bit easier to be poor when it's warm all the time and the fruit falls off the trees.
George Ure's blog at urban Survival is right on the mark today.
http://www.urbansurvival.com/week.htm
And I see that ONNI has stepped up and ostarted sueing all the flippers it has on the books
http://www.vancouversun.com/news/Developer+sues+b…
It's shaping up to be a really nice day, not!!!
February 5th, 2009 at 8:55 am
Slightly off topic (but pretty relevant I think),
I ran into a realtor friend of mine. He was just sh*tfaced drunk. I asked how HE was doing and he said (and I quote) "The market is terrible. NOTHING is moving. But it's a great time to buy! My partner and I found this *blablablablabla* (I kind of tuned out because I didn't really care).
I think BCREA must beam talking points directly into realtor's head with some kind of chip or something. They all seem to say exactly the same reality defying things.
It's friggin' weird.
I think all realtors are in different stages of grief. My buddy's in denial. A lot of the window – lickers turning up here are in the anger stage. I think we're all going to giggle when they get to bargaining, but acceptance is still a long, long way off.
February 5th, 2009 at 8:49 am
NO -LYMPICS:
However, the operating definition is “blood out of a stone”.
Yes, of course that's what I was talking about regarding out of court settlements. If the buyer has no assets to go after, there is no point in pursuing an expensive court case.
But rest assured, the developers will not let anyone get away without either an out-of-court admission of damages – which may then be released for a nominal amount – or a court judgment. NFW.
February 5th, 2009 at 8:42 am
patriotz:
True:
However, the operating definition is "blood out of a stone".
We are not talking about a market whereby the odd party has financial problems and the legal mechanism get triggered.
We are literally talking about "stones(ie purchasers) with little blood" that put minimum down and were highly leveraged.
The RE club pass was simply beleiving the realturds mantra of
—Vancouver Real Estate Never goes down
—Buy now or priced out forever
—We have mountains and the ocean and the Olympics is the exclamation point.
The developers and lenders now know they let far too many parties into the market by bypassing basic fundamentals. There is nothing really left to go after if thes eparties went 0/40 type of financing. Or go right ahead and play Snidely Whiplash, take these parties to court, and they will end up homeless or worse…download even more cost to society.
Hence some common sense and sanity must prevail. All it would take is a few parties to connect the dots and place the blame in the laps of Gov'ts Banksters and Developers for faciliting this mess to foster their own agendas which has ultimately impacted us all, given WE ultimately subsidize it, one way OR the other.
Extraordinary times require Extraordinary solutions.
February 5th, 2009 at 8:10 am
Re/Max offices, broker investigated
Provincial watchdog launches probe and freezes bank accounts after financial irregularities alleged
http://www.thestar.com/Business/article/582576
QUOTE:
The Real Estate Council of Ontario has frozen bank accounts and is investigating accounting irregularities at three Re/Max Executive Realty Inc. offices and its head broker.
The council issued a freeze order as part of its probe and is "taking all appropriate action with respect to Re/Max Executive Realty Inc., and its broker of record, David Seto," according to a public advisory issued by the council on Monday.
The Star was unable to reach Seto yesterday, and the council did not return calls seeking comment.
When a prospective home buyer gives a deposit to a real estate agent, those funds are held in a trust account until the deal closes. Those funds, which typically are insured, are then used to pay the balance of the purchase price, as well as commission to the agent.
The council regularly audits these trust accounts. It's not clear how customers would be affected by the freeze order on the accounts.
==
Start of a trend?..and how secure are these deposits?
February 5th, 2009 at 8:06 am
20% rent reduction:
On Jan 23, they wanted $4,350.
On Feb 4, they lowered the rent to $3,500.
Of course, if you don't like saving money, you could always buy the place for $1.5M.
February 5th, 2009 at 7:49 am
NO -LYMPICS:
One comment I had read was that persons in such dilemnas should simply go back to the developer and negotiate a new price, such as current market price.
IMHO, the developers are not going to consider letting any properties go to the pre-sale buyer for less than the contracted price. It would establish a dangerous precedent. Remember also that the banks financing the project have a lien on the property and if the developer settled for less than the contracted price it would impair the banks' position.
Why would they agree to drop the price to the pre-sale buyer to market, when they can sell for market (by definition) and go after the pre-sale buyer for the deficiency?
Settling out of court for damages to the developer is of course a different issue. But the developers are not going to settle for any outcome other than a finding, or admission, of damages against the pre-sale buyer.
February 5th, 2009 at 6:51 am
post # 50 Noname:
Interesting dilemna.
The financing has been lowered based on current assessment.
Whose fault is that ?
Regardless, one can't get blood out of a stone. A Vancouver lawyer( Peter Ritchie ) has already enlightened us as to the court costs.we are talking tens of thousands of dollars before they even get through the courtroom door.
One comment I had read was that persons in such dilemnas should simply go back to the developer and negotiate a new price, such as current market price. See where it goes. Both parties want to maximize their gain and minimize their loss.
The Developer has to see the writng on the wall..they may be in a litigious mood now…in some deluded belief that the old price will be achieved or the market will turn around, but when the floodgates open…it will be utter chaos.
"A bird in the hand…."as the saying goes
February 5th, 2009 at 12:33 am
realpaul:
Gold Compared to the Canadian dollar since 1999
February 4th, 2009 at 11:55 pm
Always liked the fireworks, it was free mindless fun and that's a commodity in short supply. Damn shame, but I won't lose any sleep over it.
February 4th, 2009 at 11:17 pm
Easy- by asking market price. The pre-sale contracts give the developer the right to unload the properties as expeditiously as possible, and then go after the original buyer for the deficiency.
I tell you one sector that won't be hurting is litigation and bankruptcy law.