Revised downwards

The BC Real Estate Association has released a revised forecast predicting that house prices in Metro Vancouver will drop 14% in 2009.  Condohype beat me to the punch on the basic math:

Here’s the spin-free version: The BCREA expects the average home value in Greater Vancouver to decrease $7,147 a month, every month, in 2009.

Given that the BCREA is forecasting the average home price here to drop by more than $85,000 this year, real estate isn’t looking like the most stellar investment oppourtunity.  Of course, with interest rates incredibly low the security of a GIC isn’t going to be a big earner and things aren’t looking too great in the stock markets either.

So my question to you is this: What do you want out of 2009 and where will you be putting your cash?  Will you be satisfied to simply minimize losses, or will you be making riskier moves in an effort to get your money working for you?

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truthin'adverti
truthin'adverti
11 years ago

truthin’advertising:

So as predicted we've got another soft wood lumber negotiation style political wrangle on the plate. I'm glad Stock is awake and realises that this ain't over by a long shot

http://www.vancouversun.com/Business/American+bat

truthin'adverti
truthin'adverti
11 years ago

NO -LYMPICS: The legal weasel words are piling up. The propaganda machine is in full mettle and the story out of the Whitehouse has changed again, 4 times in as many days. Now the 'compromise' solution is to only enact protectionist laws that can be re-interpreted. Brilliant. We should have learned our lesson with the soft wood lumber treaty negotiations and WTO rulings which continue to be a win for Canada in the press but a big fat loser on the ground. The big industry unions and many other lobbies are fighting for this. Watch the American news feed, they are lining up. They will tangle it up in new guidelines and measurements, they will ban certain sized and type products and change the specs on others so that they do not fall under the auspices of the existing treaties.… Read more »

truthin'adverti
truthin'adverti
11 years ago

NO -LYMPICS: The legal weasel words are piling up. The propaganda machine is in full mettle and the story out of the Whitehouse has changed again, 4 times in as many days. Now the 'compromise' solution is to only enact protectionist laws that can be re-interpreted. Brilliant. We should have learned our lesson with the soft wood lumber treaty negotiations and WTO rulings which continue to be a win for Canada in the press but a big fat loser on the ground. The big industry unions and many other lobbies are fighting for this. Watch the American news feed, they are lining up. They will tangle it up in new guidelines and measurements, they will ban certain sized and type products and change the specs on others so that they do not fall under the auspices of the existing treaties.… Read more »

NO -LYMPICS
NO -LYMPICS
11 years ago

Re Obama: Tough call… One can get elected as the fresh new face aka "change" sorely needed…but it's what happen after one gets elected that counts. One is up against the status- quo, old boys club etc. but more importantly the backroom clique(Fill in the blanK___)that worked hard to get them elected and now its payback time. Obama in my view actually "lost" by being voted into the shittiest job on earth that could exist at this point in time under these conditions ,….namely "President of the United States". The Wall Street and Bankster whores who created this mess were given keys to the bank and stuffed their pockets AGAIN ??? DUH!!! ….couldn't see that coming? Then Obama's top picks for key posts look a wee bit tainted. He will now have to come across as a tough prick with… Read more »

truthin'adverti
truthin'adverti
11 years ago

patriotz: So, the "ploticians" are speaking out of both sides of thier mouths, whats new about that. I say it's a done deal that is going to be sold in disguise. You disagree. We agree to disagree. You're desperation to be correct musn't attract many adult conversations. Obama is lying incompetant as is being proven by the facts since a bit of the Obama mania has worn off the US media. he's so far up the ass of the trade unionists that got him elected that his presidency will see more pork than ever before. This guys been manufactered as 'the anti-bush' but that doesn't mean that anything in the world of realpolitic USA is going to change. The backroom wags the dog not the other way around. Heres a release put out just a few days ago ( compared… Read more »

patriotz
11 years ago

kingroland:

Cash pays interest because it MUST, in order to make people willing to hold onto it in the face of inflation.

Dead wrong. Interest has been charged on loans for as long as people have been lending money, and that includes periods when there was no inflation, and when we were on the gold standard.

Interest is charged on loans because of the time value of money. Money has a time value because it can be used to buy capital, and capital yields future income. Also people have a preference for present consumption against future consumption.

If you don't understand this you understand absolutely nothing about economics.

kingroland
kingroland
11 years ago

Aleks: "In order to make money on gold, you must time the market correctly – exactly what every investment advisor worth talking to will tell you not to try to do." People who rail incessantly that "Gold has no earnings", "Gold's real return is zero", and "Gold is a zero sum game" are missing the point. Gold is money. Pure and simple. It is not an investment, although many people try to treat it as such. It has been money for thousands of years. It will in all likelihood be money a thousand years from now. Cash pays interest because it MUST, in order to make people willing to hold onto it in the face of inflation. Gold pays no interest (no "earnings") because it does not need to, because its value is self-adjusting for inflation. The fact that Gold… Read more »

MrBear
MrBear
11 years ago

It would appear that at least TD Waterhouse is reading VCI, and taking my musings very, very seriously!*

Losing sleep? Don't stash your money under the mattress advises TD Waterhouse

"Under the mattress? In the freezer? In the cookie jar? Canadian investors report they are anxious about finances, but stashing money in different places throughout the house is never the best investment strategy."

Thanks for the tip, mam. Apropos of nothing, how's your portfolio doing these days?

*Yes, I'm kidding. Duh.

patriotz
11 years ago

Jason:

So why does everyone keep saying “Cash is King"

Because if every other potential buyer is in debt or unable to borrow, you can name your own price?

Because the nominal price of what you want to buy is going down?

Ya think?

patriotz
11 years ago

truthin’advertising:

Obama has just signed a protectionist trade bill that will screw tens of thousands of Canadian workers and companies out of jobs and trade.

Speaking of truth, why don't you stop lying:

"The rescue plan has been approved by the US House of Representatives and is under discussion in the Senate this week, which could sign it off before the weekend.

But in TV interviews on Tuesday aimed at drumming up support for the stimulus package, Mr Obama said he did not want to include measures that would signal protectionism at a time of declining world trade."

http://news.bbc.co.uk/2/hi/business/7868799.stm

buff_butler
buff_butler
11 years ago

Supraboy:

The closest equivalent would be REITs. Some are regional but I dont think their are any BC only REITs. Other options would be:

-as jesse said short the developer (though I can't think of any publicly traded ones).

-short materials used to build the properties if you are bearish on starts (not a good idea).

realpaul
realpaul
11 years ago

NO -LYMPICS:

Right you are. My take was that it was the old 'false shortage scam' making it look like there was a lot of action and draw in a sucker thinking 'theres only two left".

I think after the project dragged on someone got thier course of construction loan chain yanked. None had sold it 'just appeared that way'. I would have loved to be a fly on the wall to listen to the realtor telling prospective buyers that it was " now or never', "get 'em afore they're gone", they're selling like hot cakes". LOLOLOL, thwse bastards need a whipping, maybe they're going to get one, metaphorically speaking , of course.

MrBear
MrBear
11 years ago

Dave: ING Groep to sell C$1.75 bln stake in ING Canada

Oops.

"The news comes about a week after ING Groep announced it would take a 2008 loss of 1 billion euros, tap into 22 billion euros of Dutch state loan guarantees for its troubled loan portfolio and slash 7,000 jobs."

A cash-stuffed mattress strategy is looking better by the day…

NO -LYMPICS
NO -LYMPICS
11 years ago

realpaul: Simple: SOLD (which we have discussed before) is a poorly – defined term. SOLD should mean completion of the sale and title transferred …..which implies all funds owing from the Purchaser transferred to possession of the Seller. However, it seems SOLD is currently defined as any yokel that has a minimum downpayment and claims he can complete. This current type of bogus "SOLD" creates the herd mentality ie " See its SOLD buy now or be priced out either (i) forever or (ii) when the Canucks win the Stanley Cup ……whichever comes FIRST ". That project you mentioned dragged our forever…not sure why…but sounds like a lot of purchasers they allegedly "SOLD" to have bailed. I remember back in the late 1990's an ex greenhouse site just down the road where they put up 5-6 McMansion…they were complete about… Read more »

realpaul
realpaul
11 years ago

NO -LYMPICS: yea you're right I got the street wrong, I was thinking of Blundell. There is a group of those same split lot new houses that were built on the west side of Blundell at Gilbert ( I think) , theres about 8 new homes. A few months ago when they were nearing completion 6 were posted as SOLD, but when I was by there recently there were 6 posted FOR SALE and two posted as SOLD. What do you think is up with that? I think I have a good idea too. As far as the rezone on this type of density I don't think it's a bad idea, it certainly gives the new home buyer in Richmond some choice. I don't know about the 'sociological study ' idea though, every one should know that one never puts… Read more »

NO -LYMPICS
NO -LYMPICS
11 years ago

realpaul

No…that isn't an ALR area.

I was describing both sides of Williams Road between #4 RD and #5 RD. Behind them is more of the same(SFH subdivisions). The Williams road lots are approx. 66 ft. X's 100 ft …then were cut in half to create 2 lots.

realpaul
realpaul
11 years ago

NO -LYMPICS:

Aren't the lots still connected to the blueberry fields behind them? I think the zoning remains ALR. I may be mistaken. Thin lots but really deeeeeep. I think I know the property and it seems to me that the set back on the new construction is non conforming , typical of ALR zoning. A family situation maybe?

NO -LYMPICS
NO -LYMPICS
11 years ago

Realpaul: Thanks. I don't think one has to fear it ie the "Temple Bank" discussion …..in fact one should give them credit for savviness. There is a strip of land in Richmond on Williams Rd between #5 Rd. and #4 Rd. that was allowed to divide 66' lots in half and build two homes. The builders lobbied for this increased SFH density, based on lack of land dedicated to SFH, and McMansions were getting to be less in demand. One prominent Indo Canadian realtor lobbied hard and one can see the whole mile + long strip converted to homes on 33 ft lots. I drive that strip frequently and see the same basic groups building almost 95 % of these homes and they have it down to a science. However the entire RE market has collapse including this niche'. These… Read more »

truthin'adverti
truthin'adverti
11 years ago

truthin’advertising:

It was Warren G. Harding who introduced the Smoot-Hawley Act sorry. heres a great article on the after effects

http://www.marketwatch.com/news/story/buy-america

realpaul
realpaul
11 years ago

Dave:

thats fine until someone asks for thier money back.

Aleks
Aleks
11 years ago

Gold actually has a slightly negative return over the long term, because you either have to secure it, insure it, or risk it getting stolen.

It is a purely speculative investment because it is a zero-sum game. In order to make money on gold, you must time the market correctly–exactly what every investment advisor worth talking to will tell you not to try to do. Much like poker, there are people who can make money that way. Odds are, though, that you are part of the vastly larger number of people who will lose.

Anonymous
Anonymous
11 years ago

thanks realpaul re; post 74

good information, keep it coming

Dave
11 years ago

NO-LYMPICS, I doubt the 'temple banks' are very leveraged, if at all. I bet most of the money put into such developments was cash. So, I am not so sure about the prospect of bankrupcy.

realpaul
realpaul
11 years ago

NO -LYMPICS: I've got into real big trouble outing that topic in the past. However it does look nasty for the huge contingent of GVRD local ethnicities who propellled themselves lock stock and barrel into the SFH construction racket. Most of the proposed infrastructure projects referanced today by chief swill dispenser Gordo the Magnificent involve trade skills not held by home building trades persons. I know of whole families that are out of work because of the specialization to drywall, paint etc., from grandpa to second cousin, zero income, and waiting for EI to kick in. As one labour pundit put it, " It will be very hard to retrain these workers due to the general lack of basic education". I read that , I didn't say that. As far as the 'temple banks' are concerned , they have a… Read more »

realpaul
realpaul
11 years ago

Anonymous:

SOL – Standard of Living