CKNW: Now is a good time to buy
I’ve heard a few interesting ‘public service messages’ on news / talk radio station CKNW 980 lately. I’ve transcribed them below, see if you can detect the subtle pro-real-estate investment message they’ve subliminally inserted:
Thursday March 26 – 9am – audio vault time 5:44
It’s time to get off the fence. If you’ve been waiting for the right time to buy your first home, that right time is right now. Home prices in Metro Vancouver have dropped dramatically. Home mortgage rates are at an all-time low. First time home buyers are eligible for up to $750 dollars in tax credits. The real estate window of oppourtunity is wide open. So make your move today because your white picket fence can’t wait forever. A message from Corus radio.
Friday, March 27 – 9am – audio vault time 28:15
(cue majestic horn music)
“Real estate can not be lost or stolen. Nor can it be carried away. Purchased with common sense and managed with reasonable care it is about the safest investment in the world. ”
Franklin D Roosevelt, former US presidentMetro Vancouver Homes today are more affordable than any other time in the last three years. Mortgage rates are at an all-time low. Could this be your time to invest in real estate? A message from Corus radio.
It’s nice to know that CKNW cares about my financial well-being, but when did they start offering investment advice through public service announcements? And if prices being lower than any point in the last three years makes local real estate a good buy, does that make General Motors stock a super-duper-extra good buy, since it’s currently priced lower than it was 30 years ago?
update: Reader Bilbo Bloggins points out that CKNW cut out part of the full Roosevelt quote, which is as follows (omission in bold): ..”Purchased with common sense, paid for in full and managed with reasonable care…”
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April 1st, 2009 at 1:52 am
Anonymous:
Agree. There is simply no scenario which supports current prices. Zero inflation is actually the scenario which results in the smallest price declines, with both deflation and inflation resulting in larger drops.
April 1st, 2009 at 1:14 am
patriotz,
Don’t forget that when the economy gets better, interest rate will start rising. With prime back up to 6-7%, many people cannot afford their payments. I don’t think the real estate market will recover for at least 10 yrs.
March 31st, 2009 at 7:17 pm
“By 2000 the condo was above the original selling price. And then “rode the bubble” to an outrageous price. The condo went through foreclosure last year and sold in February for less than the original price in 1990! Adjust that return for inflation …”
Who cares what the ‘REAL’(inflation adjusted) value is….people only care about todays’ value ’cause their paid in today’s dollars!
What frickin’ loon…..
March 31st, 2009 at 4:58 pm
Dave: You’re right – I just verified it myself. The CMHC offers “rental apartment condominium units” stats based on telephone surveys.
So it will be very interesting to see where we sit with rental rates this fall. I’m not betting against increased rents, myself. Who would be moving from renter to owner in this market? Well some people, obviously, but most of us renters aren’t happy to do that knife catching trick.
March 31st, 2009 at 3:26 pm
Rental asking prices are down 35% and I’ve negotiated them down even further.
Dave is just a ficticious anecdote himself who has never been right about anything and has nothing to say.
If anyone here listened to him last summer they’d be out $150k!
When you see a post from Dave click the down arrow and move along, there is no value to reading it’s crap.
March 31st, 2009 at 3:13 pm
Mr. Bear, they actually track both.
March 31st, 2009 at 3:07 pm
Dave: Next Fall, CMHC will do their survey and my guess is nominal prices will still be up.
You and your anonymous sparing partner could both be right. CMHC tracks purpose-built rentals exclusively, does it not? Hollyburn is unlikely to drop rents substantially, and will probably raise them on current tenants on the assumption that people would rather pay a bit more than move. So there is your official CMHC rent increase. Investors renting out individual houses or condos are an entirely different category though, and this is where the real rental softness appears to be. There was that one Shangri-La posting here a few months back at just under $2/sf, for instance. That is Vancouver’s new hotness for cheaper than much of Hollyburn’s old and busted. But CMHC won’t notice.
March 31st, 2009 at 1:56 pm
observer:
#73 Observer, maybe those flickers of light are reflections coming off the fools running up the tunnel who are wearing mirrors on the backs of thier heads due to thier inane propensity to constantly look backwards. Getting closer you may see a few bumper stickers which read ” Don’t follow me , I’m lost”.
Obviously the deniers and the whoreish MSM believe that you can be herded when afraid. They seem to think that by sending out counterindicatory farts of nonsense gas that you may somehow stop believing what you see and instead start believing what they would have you believe.
The facts prove that the real estate market is in a death spiral. There are many parties whose survival depends on your not believing that. They are desperatley trying to disuade you thinking clearly and so obfuscate the facts and spin the stories into ridiculous disparate nonsense. It’s an attempt at sewing confusion, they believe it may work long enough to get themselves out the jam they are in.
We are in a war, they want you to lose.
March 31st, 2009 at 1:34 pm
One question to all those who say now is a good time to buy-
Who will pay the mortgage after layoffs?
Yesterday saw in CBC about real estate prices in different parts of US. Florida- 2yr old 4 bedroom house with swimming pool down to $95000 from $350,000. There was another town near Detroit where foreclosures were selling for few thousand dollars (5000-20000).
When there are no jobs, no one can afford mortgage, condo fee, taxes, insurance.
Lets wait until the job front gets better-then decide whether to buy or not.
March 31st, 2009 at 1:20 pm
Anon, willing to put money where your mouth is? How much do you want to bet that I am closer to being right than you are? Next Fall, CMHC will do their survey and my guess is nominal prices will still be up. I have a hunch that rental rates will be closer to my estimate than yours.
March 31st, 2009 at 12:38 pm
Vanbanker, go look at the units and ask how low they will go.
Flatiron asking rents were $3,000 a month and aren’t even renting at $2,200 so do your research and bring competing listings.
When talking to the landlord write the actual lowest price on the sheet and flash it to the next landlord you see.
The Landlords are desperate, the economy is in the toilet and they are losing money so fast they just want to cut the bleeding.
Show up with references and cheques and tell them you are ready to make a deal and you can probably get a 2 bedroom for $1600.
March 31st, 2009 at 12:34 pm
Rental asking prices are down 35% and I’ve negotiated them down even further.
Dave is just a ficticious anecdote himself who has never been right about anything and has nothing to say.
If anyone here listened to him last summer they’d be out $150k!
When you see a post from Dave click the down arrow and move along, there is no value to reading it’s crap.
March 31st, 2009 at 12:33 pm
Maybe these are flickers of light from the beginning of the tunnel?
March 31st, 2009 at 11:30 am
Denialisrampant:
Even Dr. Doom himself (Roubini) thinks we have seen the worst of the contraction and that there is light at the end of the tunnel.
March 31st, 2009 at 11:28 am
Anyone thinking we had hit bottom just keeps getting blown away by the facts. In between statistics releases the press and the real estate whores push thier silly stories as to how things have turned, bottomed, improved etc etc, and the the truth comes out, BAMMMMM!!! The fact is that the downturn is ACCELERATING !! with no bottom in sight. Until house prices are at or below the average persons ability to pay as per the income/price ratio prices HAVE to FALL. Vancouver is still prices at 9+ X earnings it is not sustainable as we have seen in the dearth of sucker sales and the velocity of the slowdown.
WASHINGTON – Home prices sank by the sharpest annual rate on record in January, and the pace continues to accelerate, but there were a handful battered metro areas where price declines slowed, according to data released Tuesday.
The Standard & Poor’s/Case-Shiller index of home prices in 20 major cities tumbled by a record 19 percent from January 2008. It was the largest decline since the index started in 2000. The 10-city index dropped 19.4 percent, also a new record.
http://news.yahoo.com/s/ap/200.....ome_prices
March 31st, 2009 at 11:26 am
VanBanker:
Sounds like wishful thinking to me. 20%? Not a chance.
Rents for new condos have been growing at about 4-5% the last few years. A lot of RE bears will quote anecdotes about falling prices and I have no reason to disbelieve them. That said, I am not inclined to believe that anecdotes demonstrate the real trend. And, I have yet to see anybody produce real data showing that rents are falling. If you look at past trends in the last 35 years, you will see that prices never dropped in nominal terms.
March 31st, 2009 at 11:04 am
“ Lenin was certainly right . There is no subtler, no surer means of overturning the existing basis of society than to debauch the currency. The process engages all the hidden forces of economic law on the side of destruction, and does it in a manner which not one man in a million is able to diagnose. ”
Probably that bit? (That’s silly. Lenin – and even more Marx – were great thinkers, so many non-communists will find some merit in their ideas. Marx foresaw the rise of the multinational corporations, for example, and that would be valid information for a budding trade unionist OR a budding industrial titan.)
But he’s obviously criticizing socialist policy (and what he’s saying could be applied to now):
“In the latter stages of the war all the belligerent governments practiced, from necessity or incompetence, what a Bolshevist might have done from design . Even now, when the war is over, most of them continue out of weakness the same malpractices . But further, the governments of Europe, being many of them at this moment reckless in their methods as well as weak, seek to direct on to a class known as “profiteers” the popular indignation against the more obvious consequences of their vicious methods.
These “profiteers” are, broadly speaking, the entrepreneur class of capitalists, that is to say, the active and constructive element in the whole capitalist society, who in a period of rapidly rising prices cannot but get rich quick whether they wish it or desire it or not . If prices are continually rising, every trader who has purchased for stock or owns property and plant inevitably makes profits…. Business loses its genuine character and becomes no better than a speculation in the exchanges, the fluctuations in which entirely obliterate the normal profits of commerce….
__________________
Sounds like now…speculation instead of real production. It’s not good for a functioning free market, and we’ve been tricked into organizing our economy around cheap condos!
You could substitute “flippers” for “profiteers” and replace “war” with “bubble” and reprint that!
March 31st, 2009 at 11:02 am
Vansanity:
0.9 is bullshit as was pointed out this morning when it was announced that CDN GDP shaank 3.4% in the 4th Q of 08 alone, annualized thats 13.6% and far higher than the GOC forecast of -3% ( and a laughable 3.8% 09 rebound) and worse than even the Parliamentary Budget office forecast of -8.5%. Bottom line, no matter how it’s spun out by the MSM whores et al , the truth comes out eventually proving that it’s much worse than they’re letting on.
“Millan Mulraine, economics strategist at TD Securities, said “there is no getting away from the fact that the Canadian economy is in the depths of a rather profound economic recession, and from the evidence so far this year, it clearly appears that the economy may have taken a dramatic turn for the worse.”
Many economists have lowered their outlook for the first quarter of this year to reflect a contraction in GDP of between six and nine per cent. The economy shrank 3.4 per cent in the fourth quarter of 2008.”
http://www.vancouversun.com/bu.....story.html
March 31st, 2009 at 10:55 am
Anybody been watching prices for 2-bedrooms for rent? I’m looking to move: something ~ 1,000sf, preferably near Stanley Park or Wall Centre areas. I’ve noticed 2-beds in brand new buildings are around 2000-2200/mnth right now. Anybody think they will drop to 1600-1800 range or is this wishful thinking?
I’m keeping myself on a tight budget as I’m looking to buy a 50′ lot on the west side once prices bottom.
March 31st, 2009 at 10:53 am
patriotz:
Just one quote from the above:
“If a man is compelled to exchange the fruits of his labors for paper which, as experience soon teaches him, he cannot use to purchase what he requires at a price comparable to that which he has received for his own products, he will keep his produce for himself, dispose of it to his friends and neighbors as a favor, or relax his efforts in producing it.”
Sounds like something out of Atlas Shrugged, doesn’t it?
March 31st, 2009 at 10:48 am
Vancouver Economy To Decline: Conference Board
The Conference Board of Canada says Vancouver’s economy will shrink 0.9 per cent this year, the first time it’s declined since 1987.
Great time to buy indeed.
March 31st, 2009 at 10:41 am
thanks, Patriotz!
I am stuck in a waiting room for the next hour, so I can get a little more education while I wait.
Commanding Heights is great. Good find!
March 31st, 2009 at 10:39 am
patriotz:
Forgot to add, the passage where Keynes quotes Lenin as describing inflation as a destructive force against capitalist society, is often quoted out of context by idiots on the Internet who claim that Keynes was a Communist. Google it and see.
March 31st, 2009 at 10:34 am
ella:
One thing that Keynes and Friedman did have in common, which is not widely appreciated, is that both were great foes of inflation. Keynes was also much more of a free marketer than his present day “critics” (I use quotes because they rely mostly on straw man arguments) imply.
Keynes’ treatise of 1919 is a classic and probably later came to the attention of Friedman:
http://www.pbs.org/wgbh/comman.....ation.html
Keynes is often viewed as an economist who tolerated and supported mild inflation as an unfortunate byproduct of sustained, managed, economic prosperity. Yet this excerpt from The Economic Consequences of the Peace, written just at the end of World War I, makes clear how fully he understood inflation’s potential to destroy the fabric of society. It is also prophetic regarding the fate of all government attempts to control the price of goods by force of law.
March 31st, 2009 at 10:16 am
PS. I don’t even remember which thread I did this on, but sorry for calling John Maynard Keynes “Milton Keynes” – I mix up names very easily. Even my friends’ names.
For the record, my opinion (rambling):
John Maynard Keynes: fascinating, brilliant, problematic. member of the Bloomsbury group, so that’s exciting. A lot of contemporary “Keynsian” economics is actually pretty removed from his actual theories (for example, he didn’t tell politicians get central banks to micro manage interest rates on a daily basis). Paul Krugman is a Keynsian. I like Paul Krugman .
Milton Friedman: His whole Chile thing gives me the creeps. Libertarian. Reagan/Thatcher free market will fix everything…kind of reminds me of true-believer neo-cons where the ideas are very inflexible and must be adhered to 100%. I think his ideas are important, but you can’t apply it wholesale to an economy and expect it to magically work. Too rigid for me. (I am biased against those University of Chicago characters.)
Let’s face it. No economic “model” really works in real life, because people are too irrational to stick to a plan.
March 31st, 2009 at 9:23 am
*sigh*
condohype is closing shop. VHB, Paul B are gone…I didn’t foresee a bust in bubble blogs, though now it seems obvious
Probably I won’t turn to CKNW to fill the gap in my morning news routine.
March 31st, 2009 at 8:15 am
islander:
Barely although in a balanced market depreciation of the air space and common property will roughly equal appreciation in the small “land value”. Condo prices should stay the same in a healthy market…and that where they will go.
On another topic we haven’t even started yet!
http://www.nytimes.com/interac.....APHIC.html
Strataman
March 31st, 2009 at 8:06 am
http://www.bloomberg.com/apps/.....refer=home
Home prices in 20 US cities dropped 19% in January (most on record).
“At this point it doesn’t look great for the near term,” Robert Shiller, chief economist at MacroMarkets LLC and a co- creator of the home price index, said today in a Bloomberg Radio interview. Still, he said, prices “can’t keep declining at this rate forever.”
“Once under way, the pace of expansion is likely to be subdued for some time.”
March 31st, 2009 at 6:53 am
I will buy when newer 3 bedroom condos in good neighborhoods are selling for $ 150,000 lol
March 31st, 2009 at 3:04 am
Easy come, easy go. But that’s just coastal southern California – not a special place like Vancouver.
http://www.calculatedriskblog......-1990.html
The featured 2 BR 2 BA condo sold for just under $100 thousand new in 1990. It went into foreclosure during the early ’90s California housing bust, and was resold in 1995 for $33,000.
By 2000 the condo was above the original selling price. And then “rode the bubble” to an outrageous price. The condo went through foreclosure last year and sold in February for less than the original price in 1990! Adjust that return for inflation …
March 31st, 2009 at 12:34 am
55,
Even studio,Out of more than 10k condo listings there are only 2 studio for sale.Nobody wants to sell their 400 sq.ft.chicken shack and these greedy brokers think that prices will fall to bring new customer and high interest rates to raise their commissions.
March 31st, 2009 at 12:23 am
Suckerpunched, real estate IS a bundle of rights. So a condo is real estate. Might not be a great investment, or even a wise way to spend. But it IS real estate.
March 31st, 2009 at 12:13 am
“If this dimwit actually read the assessment, they would notice that it’s an estimate of market value on July 1,2008.”
It also shows the edging sales prices after July till October.
“I have the same feeling just like Vanbanker.”
If you want to see the real show at your branch,reduce and match interest rates with low five banks,Do you think buyers will pay you the premium just because you are big five or they will look for more bargain somewhere else? In your own words ““DO YOU BELIEVE MONEY GROWING ON TREES?”,If banker think like that the buyers must hunt for low interest rates and you have nothing to offer go check out at Canadian mortgage rates check what big five and bottom fives are offering? Good to have this 37,42,and 50 empty handed on this thread,All three of you should check the sales numbers then think about it where did the buyers go for mortgage?
March 30th, 2009 at 10:51 pm
Noname:
I have co-worker still think the price never went down much because they checked BC assessment. The value only slightly off.
If this dimwit actually read the assessment, they would notice that it’s an estimate of market value on July 1,2008.
March 30th, 2009 at 10:48 pm
Cristhian:
home prices will fall but it won’t be affordable to anyone because you’ll need a sufficient amount of income to be even considered for a loan.
If house prices aren’t affordable to anyone, who is going to buy them? And remember most sellers have to sell.
House prices must fall until they are affordable, and that means to traditional multiples of income and rent.
March 30th, 2009 at 10:45 pm
A huge Ponzi scheme happened here in Canada. A famed “Chinese Buffet” in Toronto promised 1% return EVERY WEEK and 260 people believed him and gave him $60 million. Now he only got $1450 left in the account. When all those investors found out the truth, some of them still want to give him more money to play in the stock market to try to make up the loss. Five investors went to the police.
The Chinese population is huge in Vancouver. If so many people believed 1% per week return, including many lawyers, accountants, doctors, many of them will believe real estate will fly very soon.
I am a Chinese myself.