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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March 30th, 2009 at 7:19 am
First…
March 30th, 2009 at 7:56 am
Corus must be worried about declining revenue from real estate advertising. I wonder if they have considered the potential liability of providing investment advice with no disclaimers as to the inherent risks involved. Since they also recieve revenue from real estate industry advertisers, there’s also no disclosure of their obvious conflict of interest.
As prices continue to decline in Metro Vancouver, it would be interesting to see if anyone is able to put a class action lawsuit together against these “public advisors”.
March 30th, 2009 at 8:20 am
Heard the same messages on Team 1040. Sports Radio for God’s sake.
I did a little searching online about Corus, read through their prospectus and could not find any real estate investments. There were a number of odd categories that I couldn’t figure out, but we were talking about $700K in each.
After I heard it I wrote a big long rant on here about how I am sick and tired of the MSM. They’re in it for profit, therefore can not be trusted and that is just sad.
March 30th, 2009 at 8:34 am
“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 president
When FDR said this, the cost of buying a house was less than half the cost of renting. Turning renters into homeowners was part of his strategy of increasing disposable income to stimulate the economy.
The situation today, of course, is the exact opposite.
March 30th, 2009 at 8:47 am
Quatchi:
I wonder if they have considered the potential liability of providing investment advice with no disclaimers as to the inherent risks involved.
Not even developers and realtors themselves are prohibited from touting the investment potential of the properties they are selling, never mind third parties. Remember “the smart money gets in early”?
No lawsuit against these guys is going to go anywhere.
March 30th, 2009 at 9:16 am
Well they’ve convinced me, anyway. I just have to get my wife to buy three and I’ll be right behind her.
I hope this works out better than it did the last time we ended up on TV…
March 30th, 2009 at 9:27 am
These are also quite frequent on CFOX (also Corus owned).
My favorite ad (independent or REBGV funded?) is the one that states “there are some crazy deals out there”. Crazy good or crazy bad? Interesting choice of words
March 30th, 2009 at 9:46 am
Jason:
Well there’s another Vancouver institution (formerly the great LG-FM) that has completely pimped itself out. Imaging JB Shayne doing the voiceover for one of those ads. The mind boggles.
March 30th, 2009 at 9:50 am
Good Morning Everyone,
Just some anecdotal observation:
Lots on westside continue to sell at quite high prices (which i wouldnt pay) even on buy streets. prices on westside are not going down as much as i thought, even on busy streets. However lots are sitting on the market much longer (on busy streets)
Talked to a banker at a major leading financial institution he said that he thinks we are at a bottom and that he will be buying in the fall.
Talked to a seasoned builder yesterday and he also thinks now is a good time to buy. However he added that prices might go down a little next year.
Talked to a framer and he said that trades are starting to compete against each other for work, so contruction cost should go down.
Question: do you guys think that we might be forming a bottom or do we still have a long way to go?
March 30th, 2009 at 10:12 am
Anonymous:
Question: do you guys think that we might be forming a bottom or do we still have a long way to go?
A bottom?
10 months after the market top?
With the layoff parade just getting warmed up both here and in the US?
With an avalanche of pre-sale defaults to come?
With an avalanche of foreclosures to come after that?
With the cost of ownership still way above rent?
With no US market at bottom yet after over 3 years of declines and price/income lower than Vancouver in every one of them?
I don’t think so.
March 30th, 2009 at 10:14 am
Happy time for everyone as Obama take over GM! Coming soon to every company. Good time to buy condo since Obama taking over everything. Just like home for rich asian where government control your life.
March 30th, 2009 at 10:18 am
#9 The market is closer to bottom now than it was at the beginning of the year. Down ~30% for building lots and contractors bidding 20% lower.
It will go down quite a bit more as the aging population need to fuel their retirement by selling their largest asset.
Since this same aging population will have all the money it is unlikely that they will be replaced by anyone affluent enough to purchase a “crazy deal” $900k lot on the westside even with construction costs down 20%
If your banker decided to buy this year (and how he’ll do it on $50k a year is another story) he’d be paying $200+ per sq/ft even with 20% off and that is double what it would have cost him to do it in 2002.
So in 2002 this same banker did not buy that building lot for $575K to build at $100 per sq/ft but now thinks it’s a good time to buy at $900k plus $200 sq/ft
If this banker did buy this year would he make anny money selling in the next 50 years? Unlikely.
Would it be cheaper than if he’d done it in 2007? Yes
Would his building costs be double that of someone who bought and built in 2002? Almost.
If the person who built in 2002 is feeling pinched financially and sells today would he be willing to accept a bigger drop? Yes since he can then by one of these “crazy deals” condo’s and still have cash in an economy where Cash is Undoubtedly King.
These wealthy aging folks have lost 20-40% on their rrsp’s, rrif, and investment accounts. The car they are driving will sell for at least 20-40% less than it would have previously (even with the crazy low prices last year due to the exchange rates) so the big asset left to sell is the house that was purchased for a fraction of what it cost today and actually costs a lot for upkeep.
The wealthy aging population sells, the median income is `$45k, the Asian markets are down harder than North America’s, Vancouver has a lot more supply coming and no new buyers entering the market.The Justice System will be reworked and some of the drty money will be taken off the table, Vancouver’s reputation takes a big hit due to property crtime, HIV, Hep C, poorest postal code in Canada being exposed to the world or Vancouver getting as much exposure as Salt Lake City or Turin and Vancouv erites realizing they were scammed into buying overpriced speculative property in order to fleece a supposedly rich foreign investor, jobs fall of a cliff with no new condos and less infrastructure leading up tot he olympcis.
Laborers who thought they were clever for buying $400k one bedrooms realizing they’ve been duped and could have rented the same unit (across from a homeless shelter at robson and cambie) for $1000.
March 30th, 2009 at 10:25 am
It bugs me that Harper has been saying Canada will put up 20% of whatever the USA props up GM/Chrysler (I note the DOW is currently plummeting b/c Obama said the “B” word. I hope they go under).
20 %! We have 30 million people and they have 300 million. My math skills may be a little fuzzy but..
Are Ontario voters really worth that much?
Enjoy your large white SUV’s America! 20% paid for by the true north strong and free..
Now get your submarines out of the arctic (you too Russia).
March 30th, 2009 at 11:14 am
Anonymous: Good Morning Everyone,
Just some anecdotal observation:
Since you’re speaking anecdotally…
In Kits, I’ve seen a lot more sold signs recently than I expected to see, for sure. But I’ve also been seeing a lot of for sale signs hanging around for extended periods of time, and I’ve seen several with ‘reduced’ stickers on them. I’m lucky I didn’t have to look the word up in a dictionary, considering how the market used to be around here. I swear real estate agents used to drive a sign into the yard, go for a coffee, slap a sold sticker on the sign, look at their watch for a minute, pull up the sign and move on to the next house.
I have no idea where the bottom is in Vancouver, but I don’t see any evidence that we’ve hit it yet.
March 30th, 2009 at 11:15 am
Anonymous re; 12
i didnt say the banker was going to buy on the westside, i said he told me he was likely to buy somewhere in the fall sometime.
anyways i still think lots on westside are too high, but they are selling
March 30th, 2009 at 11:28 am
The quote from Roosevelt is wrong.
It’s supposed to say
“Real estate can not be lost or stolen. Nor can it be carried away. Purchased with common sense, PAID IN FULL, and managed with reasonable care it is about the safest investment in the world.”
Got it? PAID IN FULL.
March 30th, 2009 at 11:30 am
Canada produces about 20% of Big 3 cars.
Just reviewing a chart from MISH on California real estate prices. The same will ultimately happen in BC.
April 2007 California average price at $597,640
February 2009 California price at $247,590, down $350,050 or 58.57% in 22 months.
Those are the facts Jack! BC with all of these service, construction job economy is identical to California in many ways. Kiss good bye the price level, this dead cat bounce here in BC will be over by June.
March 30th, 2009 at 12:05 pm
Bilbo, thanks for the correction, I had to check but your right! That makes this all the more interesting.. Now why would they omit the “paid in full” from the middle of that Roosevelt quote hmmm?
March 30th, 2009 at 12:40 pm
Roosevelt was talking about ‘real estate’ which means property assets. A condo is not technically ‘real estate’, it’s an ‘air space right’. Floating concrete coffins are a really bad idea, and CKNW should be ashamed of themselves for this campaign of idiotic cheerleading. Who do they represent? Why the propaganda? Have they been forced to take sides? The position they’ve taken doesn’t make sense. It seems to me like a ‘Hail Mary’ desperation tactic. Are they having to suck up to thier advertisers to such an extent that they are willing to burn the listening public? It’s an incredibly stupid tact if I were asked.
March 30th, 2009 at 12:46 pm
And in 2-3 years when your down payment is lost, the interst rate on the teaser or low rate mortgage goes up 2-4-6%, the bank won’t refinannce because of negative equity, etc, etc, etc…..will Corus Radio write you a cheque and bail you out ?
March 30th, 2009 at 12:47 pm
And in 2-3 years when your down payment is lost, the interst rate on the teaser or low rate mortgage goes up 2-4-6%, the bank won’t refinance because of negative equity, etc, etc, etc…..will Corus Radio write you a cheque and bail you out ?
March 30th, 2009 at 1:18 pm
Good thing my browser comes with a VultureBoy BS translator. Decided to put in the text to see what came out:
“Metro Vancouver Homes today are more affordable than any other time in the last three years.”
Translation: Metro Vancouver Home prices have fallen a heck of a lot over the last year.
“Mortgage rates are at an all-time low.”
Translation: Unemployment is increasing, the economy is failing and the central banks don’t know what to do.
“Could this be your time to invest in real estate?”
Translation: Now is a terrible time to invest in real estate. We are so freaking scared that all we can do is shamefully beg you to help out the industry by buying.
March 30th, 2009 at 1:38 pm
The stock market is falling? What happened to the Supraboy guarantee?
A rally does wonders for the psyche and complexion. People have short-term memories, which is good for the sanity of relationships but not for investing and many forget that only on March 9th did the S&P 500 close at a low of 676, having fallen by 56 percent from the 2007 peak. The current 20 percent market turn around is stunning. However, to base this on anything but a technical bounce and a bear market rally is false and smells of denial. The spin on the housing numbers is laughable and the new Private-Public Investment Program leaves much to be desired. Moreover, whatever happened to those stress tests? You know, the government acting as psychiatrist to the bi-polar market? Instead, the government has prescribed lithium and decided that the talk therapy is for the client’s family, and not the client. This week will show us how strong this rally really is in the face of the Case-Shiller numbers coming out, it’ll be the last few days before the end of the first quarter, and the unemployment numbers are out on Friday with another 500,000+ jobs lost on tap. Get the meds ready because it is going to be a volatile week.
March 30th, 2009 at 1:45 pm
CBC is cutting 800 jobs.
Othere radio stations is doing whatever they can to get some money to survive, even it is dirty money. “pay me i’ll say what you want me to say”
March 30th, 2009 at 1:48 pm
19 suckerpunched Says: “… A condo is not technically ‘real estate’, it’s an ‘air space right’..”
I totally agree with this. One example may clarify the actual situation.
A medium range SFH in Port Moody, 4 beds, 2 baths, 2400sf in a 7200sf lot sells right now for 500K to 550K (of course, if you could find a buyer). That’s 69-76 $/sf for the lot and 208-229 $/sf if you consider the full cost applied to the house only. The lot is usually assessed quite higher than the house, therefore even if your house is totally destroyed the lot will retain a good proportion of the value.
A house does not have strata fees, property taxes are around 2,500$ and city services at around 650$ for a total of 3,100$. Maintenance costs may vary a lot, or course, but you have the choice of doing yourself parts of it. It is very unlikely that you will be hit with a 20-60K bill for “envelope repairs” and if it happens, you may spread the repairs in time to reduce the impact. So you may need another 2,000$ a year to keep your property in good shape.
Total ongoing costs: 5,100$/year.
Now compare it with a 1000 sf condo in Newport Village. You need to pay between 300K to 500K (low rise/high rise, 10 year old/brand new, etc.). So you pay 300 to 500 $/sf and got no lot at all. Strata fees range from 350$ (old units) to 200$ (new units), and property taxes go from 1600$ to 2000$/year. So your carrying costs may be in the range 4000-5800 $/year. This does not include any assessment.
So, what the heck do you get for 400$/sf (average) and carrying costs similar to a house 2.4 times bigger?
AIR, and not very much of it!
Holy gosh, this is expensive air!
March 30th, 2009 at 1:50 pm
With the new unemployment numbers coming out as well as all other stats for March the governments and real estate whores are spinning the trial balloons wildly trying to get ahead of reality. So, do you think they tell you the truth? It’s hard to understand how many people rely on these screw ups for information when they have been proven to be liars MOST of the time.
I allmost have to wonder if there is a ‘LIARS SCHOOL’ out there when you look at the history of official organizations. has anyone wondered how the RCMP can so consistently deny the truth and get away with it. Is it an ‘old boys’ collusion? It has to make a thinking person wonder.
The unemployment numbers are coming out this week and the pre fill is ugly. For example look south, why, because they actually publish information that can be extrapolated into the CDN economy due to our very similar economic model.
Finding the True Unemployment Rate: Is the Government Listening to Financial Bloggers? Bureau of Labor and Statistics now has Annual U-6 Data for Individual States. California U-6 Rate for 2008? 13.4 Percent.
“Many long time readers know that I have had issues in how the media and government report the unemployment numbers. It is sugarcoated, put in a silky dress, and has lipstick before it is dished out for everyone to eat at the happy days buffet. The good news is that recently the media has been catching on and using the wider measure of unemployment (not always), normally recognized as the U-6 data in the Bureau of Labor Statistics releases since this provides a more accurate assessment of the unemployment situation for the average person and family. That isn’t necessarily the big news. One of the main data points that I have been searching for is the U-6 data for individual states. The BLS as of March 16, 2009 now has the annual data for states including U-6.
As you are aware, the national employment figures are calculated via the Current Population Survey (CPS) that samples 60,500 eligible households. However, for state sub-samples the data can range from 600 to 4,000 households depending on what state is being surveyed. We still don’t have monthly data at the BLS regarding individual states but having the annualized data does help us arrive at a more accurate level for unemployment. What we are finding is that we are approaching Great Depression levels of unemployment.”
Unemployment numbers in Canada like CPI etc, is fudged by vested intrests and leaving a lot of Canadians perched on the edge of an information precipace.
March 30th, 2009 at 1:55 pm
addendum
Bureau of Labor and Statistics now has Annual U-6 Data for Individual States. California U-6 Rate for 2008? 13.4 Percent.
March 30th, 2009 at 3:03 pm
Massive layoff coming at the company that I’m working at right now. Fortunately, I’m a contractor so I don’t care. I’ve worked for 3 companies in the past 3 years as a consultant and witnessed 3 layoffs already.
The question I have is that when I was going to open houses in the West Side over the weekend, why are there so many excited buyers? Where do they get their money? I’ve seen quite a few more sold signs this month than in February. Is this a dead cat bounce?
March 30th, 2009 at 3:11 pm
Supraboy, just curious, what industry do you work in? Is this a big company?
Thanks,
March 30th, 2009 at 3:29 pm
This is a big company. I work in the IT industry. The previous 2 companies I worked for had a decent size also.
My last company had 2 rounds of layoffs. They went from a size of around 60 people down to around 25 now.
March 30th, 2009 at 3:31 pm
Yeah, things are looking pretty ugly. Are we talking hundreds of people in your current layoff? Looks like we might hit the 10% unemployment in Canada too…
March 30th, 2009 at 3:55 pm
More layoffs and not surprisingly OUTSOURCING to the Phillipines. The minimum wage is still too high to do buisness in Canada for Convergys.
Convergys Corp. will eliminate 275 jobs at its call center in Winnipeg, Manitoba, while opening three new call centers in the Philippines.
The Canadian jobs were eliminated because the company lost a customer service contract that the Winnepeg center had been handling, according to a story in the Winnipeg Free Press. Convergys employs about 1,000 at the center, one of 13 it operates in Canada, according to the story.
In the Philippines, Convergys will open three new call centers April 1, creating 2,900 jobs, according to a Filipino television station. The centers are located in Cebu, Quezon City and Laguna.
A move by Microsoft for it’s laid off employess ” to apply for jobs in India’ was never met with much intrest. Microsoft never did clarify if they had expected thier American and canadian layoffs to apply for Indian jobs at indian wages and benefits.
Sun Making Deep Job Cuts This Week, Analysts Say
James Niccolai, IDG News Service
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Close Monday, March 30, 2009 12:20 PM PDT
Sun Microsystems will lay off several thousand workers this week in a follow-up to a restructuring plan announced a few months ago, analysts said on Monday.
The job cuts may include 25 percent to 50 percent of Sun’s customer-facing staff, including direct sales and professional services employees, according to a research note from Wedge Partners, a financial analyst company.
Such a move would make Sun more reliant on channel partners to sell its products.
Sun announced in November that it planned to lay off 15 percent to 18 percent of its workforce, or up to 6,000 employees, in an effort to reduce costs by US$700 million to $800 million annually.
In January it confirmed that it had laid off 1,300 workers as part of that plan, and the cuts this week appear to be a continuation of the same effort, said Ryan Hunter, an analyst with Wedge Partners
http://www.pcworld.com/busines.....s_say.html
March 30th, 2009 at 4:03 pm
Nielsen Cuts 1,600 Jobs, for those who know many market research people are working in Canada. This is additional fallout to the growing layoffs in the MSM industry. Couldn’t happen to a nicer bunch of people.
http://adage.com/article?article_id=135647
March 30th, 2009 at 4:08 pm
Don’t forget that the previously announced layoffs at giants like Bell and Telus etc are now kicking in. The severance packages will be decimated by the tax man and a whole lot of people are going to find themselves behind the 8 ball. I’d cut the death of a thousand cuts time frame down to about 50.
http://www.itbusiness.ca/it/cl.....p?id=49358
March 30th, 2009 at 4:24 pm
Realty can’t be lost or stolen – insert american president well I guess they didn’t have “Eminent Domain” in FDR’s time. But truth be told prices in Vancouver have fallen, but the term “fallen” shouldn’t be used, the honest term is “corrected” as Vancouver real-estate has been overpriced for a number of years now, and will continue to correct itself.
March 30th, 2009 at 5:09 pm
Disinflation revealed in the collapsing economies of Europe. Spain, which had a very similar cubble to canada is an example which possibly shows us the furture of prices here.
Credit Suisse analysts added that they believe the correction in housing prices in Spain –down 9% annual in February vs. 10.8% in January — is just beginning, and prices are still high with some banks now offering 100% financing to an individual to purchase a house if developers cut prices by 20%. “This is, in our view, a big problem. A 20% (or 30%) discount does not mean anything if the properties are overvalued by let’s say 50%,” Credit Suisse analysts said.
To boot, they added that the average Spanish family now needs 7.2 years of combined salary to buy a house (more than 9 years in Madrid), versus the subprime threshold of 4 to 5 years in many countries and 3 years in the U.S.
the economic picture in Spain is bleak, with the economy reeling from the effects of not only a global recession, but the complete collapse of its housing market, a nearly sole driver of the economy in the past few years. The country has the worst unemployment in the euro zone, reaching 14.8% in January,
http://www.marketwatch.com/new.....5C853F7%7D
It would appear that housing has become so expensive ( like here) that no one can afford it anymore and prices ( no matter the record low % rates) are going to have to come down to historic afforadility norms. This seems to be a very scary prospect for our developers ( who lose money now) but the people who are going to benefit the most from this mislabelled ‘deflation’ is the average buyer/citizen.
March 30th, 2009 at 5:27 pm
“Talked to a banker at a major leading financial institution he said that he thinks we are at a bottom and that he will be buying in the fall.”
I’m a banker myself with one of the Big Five and I’ll tell you my co-workers are very bright people and good at their jobs, but complete morons when it comes to opinions on the real estate market. Did I mention I work in real estate development finance? Sad but true.
March 30th, 2009 at 5:34 pm
Well finance is finance, and if the property values are dropping in many places then it’s natural that they have to drop here. I know that BC is thinking that the 2010 Olympics is going to somehow bring up everyone’s income, when what people are in for is 8% tax hikes above and already over-priced home in the metro Vancouver area. Coupled with job loss, and a credit shortage then you know like Spain and the U.K. 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.
March 30th, 2009 at 5:36 pm
Denialisrampant:
Spain, which had a very similar cubble to canada is an example which possibly shows us the furture of prices here.
Just one quibble – the correct analogy to Spain is not Canada, but just BC by itself. As are US states like Florida.
We’re world class!
March 30th, 2009 at 7:12 pm
patriotz:
#39 Classic typo..”cubble” indeed LOL , should ( of course read bubble), and yes I meant to say that BC had the same dynamic as Spain in so many ways. Dependant on tourism, retirement, construction, service industry ‘purported’ lack of available land etc etc.
In many cities big and small and in country towns the sudden growth in unemployment has forced many Spanish people back into the pre bubble agricultural jobs and that has created a lot of friction because they are now forced to compete with immigrants doing farm labour jobs that Spanish abandoned. The boom time economic facade of easy tourism and service jobs has vanished like a perfumed Rennie fart into the ether, reality has set in, and it stinks.
Is this quote from the Credit Suisse analyst not eerily similar to the whole scene in Vancouver? It’s uncanny, almost word for word and blow by blow, they are experiancing exactly the same crap. It’s amazing that people here haven’t woken up and started hanging the pimps in the town square. I think the unendingly evil complicity of the local media is to blame for blinding the sheeple who continue to get suckered.
The Quote
“Credit Suisse analysts added that they believe the correction in housing prices in Spain –down 9% annual in February vs. 10.8% in January — is just beginning, and prices are still high with some banks now offering 100% financing to an individual to purchase a house if developers cut prices by 20%. “This is, in our view, a big problem. A 20% (or 30%) discount does not mean anything if the properties are overvalued by let’s say 50%,” Credit Suisse analysts said”.
I doubt the Spanish news papers and radio are spewing out ” Happy days are here, Buy Buy Buy !!!!!!
Where can I get a good Pitchfork these days?
March 30th, 2009 at 7:29 pm
Another cruise ship line cuts back its sailings, moves to Seattle
Another cruise line is trimming its sailings from Vancouver for 2010 and more cruise lines are expected to follow suit, which could cost the area $120 million in economic losses.
Holland America, owner of the Volendam and its sister ships, is replacing 20 seven-day sailings between Vancouver and Seward, Alaska, with 10 14-day sailings between Seattle and Anchorage, the company announced Monday.
Starbucks announces first-ever Canadian closing in Richmond, B.C. – I suspect we’ll soon see the second, third, fourth and fifth-ever starbucks closings coming soon.
March 30th, 2009 at 7:31 pm
I work in Finance and with people who deal in numbers all day every work day. Also, completely, inexplicably clueless about RE. I put it down to the social factors at play — the mob does not like a contrarian, and some people do not have the interest/fortitude to step away from the mob, will not even consider the math involved because they do not want to be contrarian. Period. Oy.
March 30th, 2009 at 7:48 pm
By most metrics it is probably not a good time to buy. Except the Madoff metric, which says it’s always a good time to buy, as long as you get out before it isn’t.
March 30th, 2009 at 7:54 pm
VanBanker: There are lots of two face champions like you in the big five that’s why people are switching over their mortgage to financial finder at 3.50% 5 yr closed mortgage.I think you should bring your chair over here,FF will take care of the customer who are lining up to finish the deals.
March 30th, 2009 at 8:35 pm
How is that the first starbucks ever closed in Canada? Wasn’t there 4 starbucks, one on each corner, at Robson and Thurlow? Now there are 2. What happened to the other 2? Is there a difference from an owner closing vs. Starbucks corporation closing one? Is that what they’re talking about?
March 30th, 2009 at 9:03 pm
1st Starbucks I saw close in Vancouver happened on Denman Street, maybe it just “moved”.
March 30th, 2009 at 9:36 pm
Anonymous, i too remember the Starbucks on Comox and Denman. Just after that one closed the big one on Davis and Denman opened. I’m guessing that it just moved to the better location.
March 30th, 2009 at 10:03 pm
observer Says:Reply to this comment
March 30th, 2009 at 7:48 pm
By most metrics it is probably not a good time to buy. Except the Madoff metric, which says it’s always a good time to buy, as long as you get out before it isn’t.
———————
Actually, I think the Madoff metric says:
It’s always a good time to buy, using someone else’s money, and then giving it your wife, before you get caught.
March 30th, 2009 at 10:10 pm
You’re using the real Madoff metric (I was using the nominal one).
March 30th, 2009 at 10:33 pm
I am also working for one of the big five banks. I have the same feeling just like Vanbanker. I have co-worker still think the price never went down much because they checked BC assessment. The value only slightly off. They are thinking within a couple of year, the real estate will fly again. I asked them “DO YOU BELIEVE MONEY GROWING ON TREES?”, they would say no. Then I asked them “Why do you believe money growing on your house?” The real estate is the biggest Ponzi scheme, now we are running out people so we see prices going down every where.
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.
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 10:51 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 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 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 12:34 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 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 6:53 am
I will buy when newer 3 bedroom condos in good neighborhoods are selling for $ 150,000 lol
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 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 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 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 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 10:39 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 10:41 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 10:48 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 10:53 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 10:55 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 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 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 11:26 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 11:28 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 11:30 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 12:33 pm
Maybe these are flickers of light from the beginning of the tunnel?
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 12:38 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 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 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 1:56 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 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 3:13 pm
Mr. Bear, they actually track both.
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 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 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…..
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.
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.