Friday Free-for-all!
It’s time for our end of the week news round-up and open topic economic news discussion! Here are a few stories I’ve noticed lately:
-BC Housing starts leap up from record lows
-Vancouver 2nd quarter resale house prices up -barely
-RBC: Housing in BC becoming more affordable
-Homeless make camp after Granville shelter closure
-BC Post razor-thin surplus
-Budget officer predicts 100,000 job losses this summer
-CIBC Predicts return of bulls after summer
-RBC sues former Calgary employee for inflating RE values
-Canadian exporters still hurting
-Rambling thoughts on Canadian house prices
-US markets may return to normal in 2012
-Why not to expect second half recovery
So what are you seeing out there? Post your news links, thoughts and anecdotes here and have an excellent weekend!
RSS 2.0 comments feed. Both comments and pings are currently closed.
July 13th, 2009 at 1:13 pm
Based upon this famous graph I think we’re at about Autumn 2007 in Vancouver, based upon a 10% decline -
http://1.bp.blogspot.com/_nSTO.....-10-10.png
Which is 18 months behind the USA. Sounds about right.
July 13th, 2009 at 11:54 am
wells fargo sues itself over mortage. too funny.
July 13th, 2009 at 11:25 am
Maui prices down almost 50%. Blood running in the streets. Financial mayhem. read all about.
http://www.mauinews.com/page/c.....tml?nav=10
Isn’t that where all the rich people go to retire. How can there be so many foreclosures. Can it happen here. You betcha!!!
July 13th, 2009 at 11:08 am
Bearette:
I’m waiting to buy myself. Prices have come down around 10% and although things have been selling this spring it is mainly due to low short term interest rates.
Unemployment is rising and the likely hood that interest rates begin to rise IMO is high. Affordabilty is only sorta there with the low rates and double income. With job losses mounting and rates likely to rise, my money is betting that a longer real estate bear market is on the way. We’ll see I guess, stranger things have happened, but everything that I see points to the end of the boom in BC RE.
As for what the end of the boom will look like I have no idea…lower prices, stagnate prices or something else that I never even thought of…who knows. I’m looking forward to seeing what happens in the fall however….
July 13th, 2009 at 9:55 am
Hmm,
I’ve been MIA from the Van real estate scene and these blogs for quite a while. Busy with life. Still a bear circa 2005 and Vance’s blog, still waiting. But I need some schooling to get up to date. Anyone willing?
Are prices really up in June? Is this truly a mini bull market in an ongoing bear market, or are we at the end of the bear run and should I be ready to jump? I’ve got dry powder counting on post Olympic lows… but you have to be ready to adapt. What’s the sentiment here from longtime bears? Are you holding or folding?
All I want is to get the lowest price possible for a N. Van SFH in the next two years. Are we there yet?
July 13th, 2009 at 9:45 am
davers:
What just happened (the US) was more like a return to normal…. Thingshad inflated prices, then they deflated, with a bit of overshoot perhaps
Prices in the US have not gotten back to normal yet, never mind overshoot. Real house prices, price/income and price/rent are still above historical norms in almost all US markets, which is why Robert Shiller (among others) is predicting that US house prices will continue to fall for over a year, particularly in cities like Seattle and New York that were late for the bust.
And historical norms are just that – not market bottoms during recessions.
July 12th, 2009 at 9:23 pm
I also agree with an earlier post re: Campbell…..
He will do a Bill Bennett ( ie who quit after Expo 86 ) and not seek another term. I’ve never voted NDP but Campbell and his ilk don’t warrant the ” anybody but NDP ” free ride.
His legacy seems to be “taxpayer” as cash cow for mega projects that 99% of the population never has a say in .
I’ll bet Campbell regrets his ” election every 4 years ” legislation….but he is still free to resign any time.
Geronimo !
I’ll predict a new Provincial Liberal leader shortly after the 2010 Olympics are over.
July 12th, 2009 at 9:00 pm
Re: “Future buyers” ? ;
Check the demographics
My own observations seem to lay out the following picture:
Current SF homeowners, in metro Vancouver, by and large and regardless of ethnic background, are in their mid to late 50′s and older . In the next 10 -15 years, when these people pass on or downsize, what demographic group will be able to sustain market prices ?
Those in their 30′s to 40′s, again regardless of ethnic background, seem to be buying multi-family units.
Will there be less demand for SF, and more demand for multi-family as 2 ( both young and old ) groups compete for the cheaper(=) downsized product ?
As I’ve said in previous posts, too many monster houses, which historically end up as rooming houses.
I don’t think the current FTB have the same desire to buy SF as past generations.
Add to that a primed , pimped and pumped up faux economy doing a Thelma and Louise over the cliff at a dead cat bounce coming to a ” boom ” near you (inevitably)….,= run on garbage bags as body armour at Costco for ” shit -hit- the -fan ” economic prediction .
July 12th, 2009 at 8:40 pm
Crediting or blaming “Rich Asians” for the price of real estate is a form of dangerous racism. There was a time when people openly talked about “Rich Jews” and look what happened.
What happened over the last few months, is we finally created our own true Sub-Prime class. Not having much of this was something that made Canada different from the US. Well, no more. We have finally managed to squeeze these marginal buyers into home ownership they can’t possibly afford in the long-run.
In theory, our sub-primers could last 5 years or whatever is the term of their mortgage. But they don’t have any skin the game and have no other assets. So they will walk as surely as American Sub-primers walk once they realize they are paying back-breaking mortgages on over-priced and declining properties.
Now where is that popcorn…here it is…(munch munch)
July 12th, 2009 at 7:22 pm
observer:
#24, I call the ethnic shopping crowd at the open houses ‘family day’. Everybody takes the kids, the grandparents and the dog for a day out. They go to open houses, cheap dim sum and then for a walk in the the mall. They don’t buy anything they just walk around. It’s just a cultural thing, its the same in Asia except its for the free air con. These are not ‘park’, ‘picnic’ ‘fishing’, hiking’ or exercise’ people. they are basically mall rats. Its a third world thing.
You see that none have shopping bags and none are buying houses either. If you look at the stats from every area the bulk of sales have been sub-500K, meaning FTB’s.
The myth of the rich Persian is a joke, so is the joke about the rich Chinese. The sales stats simply don’t back up the story. The spring bounce was FTB’s , sub 500K with no money down.That market has been squeezed dry. Even if interest rates came down again it wouldn’t matter. The games been played, no one is left on the field.
July 12th, 2009 at 3:32 pm
The mythical foreign buyer, immune to the pangs of economic woes will save our RE market. I’ve heard this one before. I think it would only be true if we get a jump in immigration of wealthy immigrants. But things are in a steady state right now as far as I know. Besides, this economic downturn is pretty much global, so I doubt if anyone will be immune.
Vancouver is a good place (certainly not the best but not bad either), but what do these immigrants do after they arrive. If our economy isn’t diverse and robust enough, basically it is a dead end for the immigrants and their children. Hardly the foundation for continued growth.
So just keeping on building the condos. Encourage the RE based economy to the detriment of everything else. Eventually the condos will go empty (if not already).
July 12th, 2009 at 3:02 pm
Quality FTB’s are pretty much spent, but, 70% of current shoppers/buyers are asian.20% are persian/foreign mixed.
These stats are not able to be found because of racial issues, priv protec etc, Realturds will tell you at open houses who is looking and who is buying, specifically on the West Side & North Shore.
The current pricing in desireable area’s is still far too high for LOCAL buyers, which explains most purchasers ethnicity? I predict a very slow downward pricing over the next few years for detached houses in the most sought after area’s.
Vancouver’s prices are declining, unfortunately, very slowly!
Wait?, Watch?, Buy? You decide!
July 12th, 2009 at 12:58 pm
Bond yields seem to be heading lower recently, signaling possible mortgage rate cuts, presumably due to green shots becoming yellow weeds. It’s an interesting cat and mouse game. Will the house get clobbered by a jump in mortgage rates or will it wilt away as unemployment slowly siphons off the pool of quality FTB’s.
July 12th, 2009 at 12:14 pm
No Longer Looking:
Very astute reckoning dude. My banker pal says the same thing. The re-fi biz died after the interest rate squeeze was done and the FTB’s have dried up as a finite commodity. Theres no one left to buy. Pyramids come crashing down when you run out of suckers. This is a case in point.
Funny thing was though how the desperate junior builders got sucked in. When the hype was at its most furious the ethnic builders who hadn’t seen a deal for six months rushed back in thinking it was safe again. These are the guys who have joined the ranks of ‘the greatest fools’ because they’re building inventory into a dead market. Building apps shot up just as the spring bounce crested, oops, too bad.
July 12th, 2009 at 12:06 pm
RickyG:
You can pick up a standard contract form in most stationary stores. Can’t find it there, go to a notary or lawyer, they’ll give you one hoping you’ll bring the completion filing back to them.
You have plenty of sign blancks to stencil on a ‘for sale’ sign. You can buy ‘house for sale’ signs and arrows. Ads on Craigslist are free. Ads in the local papers can sometimes be useful, except most of the respondants will be real tards looking for FSBO’s to list. Don’t fall for that. Tell them you’ll give them an ‘exclusive listing’ for 24 hours to bring specified clients over. make a deal for $1500 to 2500. Don’t fall for the ‘multiple listing bs’. If you’ve got a good product it will sell itself.
If they balk , throw them out. Don’t listen to the sales pitch about adding the commission on top of the asking price because when the listing gets stale you’ll be harrassed with ‘price reduction talk’.
If you live in a very well travelled area, you can do your own open house. Again you’ll get the blah blah from Real turds. Kick them out. If an agent comes with a client who wants to purchase they’ll try to twist you into paying full commish. Don’t fall for it. Squeeze the tard !!!!! If the client wants to buy the house he’ll bother the tard, not you, the tard will have to fold or lose everything. $2500 max. Don’t back down.
Pick up a ‘Terms and Phrases’ book at the bookstore while you’re there to add into the contract. They have all the standard terminology.
Don’t go for a ‘subject to everything under the kitchen sink ‘ deal. Accept no completion further out that 90 days, subject to financing. No subject to sale deals. Thats fraught with risk.
It’s really easy to sell your own place. I used the ‘squeeze the turd’ ploy in my last deal. The client wanted the house but I wouldn’t pay the tard. He kept trying to shift their attention to other places but they wanted mine. The tard balked and bitched but I just held out until he accepted the deal $2500 and F-off. Saved myself $12K on a $400,000 deal. Figure your own commish @ 7% of the first $100K and 2.5% on the balance. It really adds up.
Don’t be impatient, even if it takes a few months to sell your house, think of it as 4 or 5 thousand dollars a month you’re making by not using a “real-thief”.
July 12th, 2009 at 4:09 am
This bull run in a bear market is over. Stats at this site indicate it peaked in June and is now quickly cooling:
http://agentwill.com/weekly-stats/
Thousands to FTBs who had sat on the sidelines have now bought. They are only an FTB once. Now they have bought, the noise of crickets will now commence. Any slight increase in prices will be now be reversed.
Demand is now exhausted for a long time.
See, it wasn’t so bad.
July 11th, 2009 at 11:04 pm
Hi, anyone have info on how to sell your own house with out an real estate agent?
it’s a 4800sq ft home(8000sq feet lot) in Steveston built in 1993. how much commission would I save by selling it without an agent? is it worth it doing myself?
July 11th, 2009 at 8:33 pm
quick question,
where does the provincial government get the money from? I mean, if they are allowed a certain amount from the federal government’s budget, and they collect another amount from taxes and what not, if they have a deficit, meaning they spend more than they take in, who finances that extra money? the banks?
July 11th, 2009 at 8:16 pm
Rates dropped almost 1 percent since January (but recently went up). That correlates to 8% increase in prices according to the model. Unemployment went up too as you say but I think unemployment takes longer to show up in prices because there is a lag (until EI benefits and savings if any run out for instance).
July 11th, 2009 at 1:58 pm
observer: Unemployment has been rising since January and prices have increased by about 5%. I think the correlation he established is over the long term.
July 11th, 2009 at 12:46 pm
If mike’s model on housing blog holds up, the increase of unemployment from 7.6% to 8.1% last month will correlate to a 5% decrease in prices in the near future.
July 11th, 2009 at 11:12 am
No Longer Looking:
It was Vaughn Palmer the political correspondant that came up with the ’2 -3 billion’ deficit number yesterday on the CKNW interview yesterday. he’s usually fairly astute but hard to the left in his reporting, so take what he says with an aspirin as well.
The reporters were saying that Colin Hansens body language wouldn’t shut down when they tried to hammer an exact number out of him. It was tacitly agreed that one billion is a dream and unrealistic. The deficit is currently much higher and its a matter of what is going to be cut not when. The public service unions got suckered when they agreed no to strike during the Olympics.
The public sector is going to get a slashing and theres nothing they can do about. Thats why I spoke of a union backlash after the big O. I also stand on my prediction that Campbell will resign soon after the games. He has been poking around Ottawa and he has been spoken about as a national candidate. What a whore. I almost puked when I heard the panel of CBC news whores suggest his viability. Watch for it.
The Parliamentary Budget Officer is forecasting 700,000 NEW unemployed NEXT year. That is on top of the 450,000 of 2009. This takes the unemployment number in Canada to 2 Million ++. And, if you consider the welfare numbers, the self employed who can’t collect EI who are going broke, the underemployed who haven’t been able to work full time, the unemployed who’s EI weeks have run out, the unemployed that the government has renamed as ‘self employed’ you have a much larger number.
The 16% number is already very public in the US by economists who take EVERYTHING into account. In fact thay information is also available through the US Dept of Labor on thier web site. Good luck getting anything like that quality of information in Canada.Follow the Urban Survival sight or the MISH economics site for good information on these little reported facts.
So….NO, I’m not kidding. It’s WAY worse than the official numbers admit to. In fact we have another Glen Clark ‘fudgit budgit’ on our hands right now. This was well reported in the Friday issue of the Province. The LIBS have been caught red handed lying about the unemployment numbers, the welfare numbers and the budget shortfall numbers. FOI docs show that they had conspired not to release information during the last election.
Believe theses clowns about anything? No effing way!!!!
July 11th, 2009 at 9:12 am
Ten Truths about the Real Estate business that a “professional” would never dare tell you… taken from on online list with further discussion (see link below). The most important one, of course, is #10..
1. “Your open house is really just a networking party for me.”
2. “My fees are negotiable.”
3. “Think you’ve had no offers? Actually, there’ve been several.”
4. “I’m not obligated to keep my mouth shut for you.” [ie: "If you are fool enough to tell me, I will let me seller client know exactly how much you are willing to pay"]
5. “Sometimes I forget whose side I’m on.”
6. “I know zilch about zoning.”
7. “I won’t let termites—or pesky inspectors—kill a deal.”
8. “I sometimes forget I’m not a lawyer.”
9. “My website is a dead end.”
10. “You can probably do this without me.”
Taken from the article at:
http://www.smartmoney.com/spen.....-tell-you/
Really, in this day and age, Realtors splitting 5% of a sale for their fees and office costs… are a stoneage concept, which is long overdue to go the way of the horse and buggy.
July 11th, 2009 at 12:17 am
2 to 3 billion, eh? That was my gut feeling. I know a lot of people like to trash the cushy public sector, but I understand BC has had a lean machine (even under the NDP) since the budget slashing of the 80s. The cuts will have to come from real services, for the most part. Health and education can’t escape these cuts.
“Next year the unemployed numbers are said to double.”
Are you serious, over 16%?
I’m going to have to eat a lot less at restaurants. Its my one area of excessive spending right now. My plans for this summer are to spend some quality time with my BBQ. Mmmmmm homemade burgers and salads.
July 10th, 2009 at 9:06 pm
More real tards than sales. Bwahahahahahaha
Maui reports ‘dreadful market’ with sales down 57% !!!!!! Ain’t that where the rich people go? After all Conde Nast just voted it the best island in the world.
“Halfway through 2009, Maui’s real estate market is nearly 57 percent of the size it was in the same period last year.
From January through June 2008, 989 single-family homes and condominiums sold in Maui County. For the same period this year, 560 homes and condos sold, according to statistics released Wednesday by the Realtors Association of Maui.
If the same rate of sales continues through the second half of this year, there will be fewer house and condominium sales for the whole year – about 1,120 – than there are real estate agents on the island, about 1,300.
Commissions, based on 6 percent of the sales price, are off even more. The total value of closings in the first half of this year was $405 million (not counting undeveloped lots). In January to June 2008, the total was $911 million.”
http://www.mauinews.com/page/c.....tml?nav=10
Me thinks the real tards will be cannabalizing their young. I expect we’ll see the same thing her when the ‘phoneymomey’ money machine runs out o’ gas. The deficits federally and Provinacially are expanding like gas bubbles in my lower intestine after a trip to Taco Bell.
I expect to see a big splat of diharrea coming out of Campbell and Flarhety soon enough. They have admitted to the balloning deficit her in BC, as it was forecast this morning on CKNW at 2 to 3 Billion. That is NOW folks, not after the O-show. Program cutting or big balloning deficits hidden until after the party. That would sink the Libs for a decade. It would be Glen Clark all over again.
The feds have an election coming up soon enough. IGGY doesn’t want to play right now because they don’t want to step into this mess, but the deficit balloned way past 50 yesterday and it’s a fact that they are out of money NOW. With a minority government a major deficit would fracture the CONS and the LIBS will sink them for sure. That means debt fighting. That means money raising. That means higher interest rates or higher taxes. Its a devil and the great blue sea scenario. I’m betting on the Feds stepping out of the real estate game by this Fall. It’s killing them.
Both levels of government have had their fingers crossed for a quick recovery. That is not happening. They keep advertising a recovery and keeping interest rates super low to sucker you out of your cash but the recovery isn’t shaping up. They’ve done everything but the economy keeps collapsing.
They’ve beaten down the seniors by offering less than nothing on savings in order to get them to spend the money instead of saving it, but the wily seniors have learned not to be suckered and are holding on to their cash.
They are trying to get you and I to think that cash is trash and you have to spend spend spend , but its only the young and the stupid who have done so. The majority are still on the sidelines.
Next year the unemployed numbers are said to double. That s going to be a very tough PR sell. With inflation raging it will be harder than ever to keep the secret from the public even though they have fairly rigorous control of the media. People are still noticing that every thing is shooting up in price almost weekly now. I go to restaurants who’s menu pricing goes up at least monthly.
Governments always shore up their balance sheets on the backs of the citizen, never by aggressive cost cutting. Save your money, the shit storm is still coming.
July 10th, 2009 at 2:39 pm
This is incredible, how can they even stop people from saying what they want, where they want. The people of Vancouver should file a class action lawsuit after the olympics against VANOC, IOC for this. This world is disintegrating right before our eyes. They say they’re doing this stuff for security.
“Those who sacrifice essential liberty to purchase temporary safety deserve neither liberty nor safety.”
-Ben Franklin
July 10th, 2009 at 1:23 pm
JD:
Apparently they (Nortel &GM )say they are going through with the sponsorship deals but they have curtailed the usual huge entourage that would have accomapanied the cash to the games.
Whether the money actually makes it out of banckruptcy court is still up in the air. Personally I can’t see how any judge would allow that. I have to think that there is some skullduggery going on behind the scenes with money being ponied up by governments hidden inside the loans deals. Very crappy dealing for the ethics committee.
BC Judge calls IOC “a discrimininatory body” in her ruling aginst them today re: the ski jump girls, but has to allow them to cut the girls out due to loopholes and technicalities.
At the same time the Judge calls out VANOC as a ‘disreputable’ organization in the same ruling.
I heard a top RCMP official on CKNW radio this AM saying that free speech would not be allowed during the games…that any groups or individuals attemping to express their freedom of speech or assembly would be subject to persecution, during the games and in the lead up to the games.
OH CANADA, what have got ourselves suckered into.
You would think that our legislators would be having at this NAZI trying to abolish the Charter on the public airwaves but…not a call from any except the NDP critic, kudo’s to her.
Whats more important to you, a commercial success of an Olympic party for an elite group or your basic human rights in this country?
Does Campbell think that this is his springboard to National politics or a senate seat? He gets the prize while the nazi fucks are beating the homeless? Doesn’t remind me of the Canada any of us wants to live in.
July 10th, 2009 at 1:20 pm
Now Obama can rename GM Place after his dog. That would be an improvement.
July 10th, 2009 at 11:52 am
London 2012 has dumped Nortel as a sponsor because they could no longer provide what they promised. This will cost the london organizers an extra 19.4 million USD in revenue:
http://www.theglobeandmail.com.....le1213992/
So Nortel and GM are toast, but they’re still sponsoring our local games? Gee, I wonder if these companies would do better if they just focused on the business of providing products people want?
July 10th, 2009 at 9:40 am
The worst is over?
http://www.vancouversun.com/bu.....id=1774362
Not likely ..
July 10th, 2009 at 8:10 am
Oh, you gotta love this.
The Feds are calling the folks who have run out of EI weeks ‘self employed’ now. Instead of stating the fact that 47000 new jobless claims hit the books they have tried to ‘adjust’ the number down by renaming them. This 47000 is HIGHER than economists were predictiong ( as opposed to what the Van Sun said this AM)because it doesn’t include all the people who’s weeks have already run out , those no longer looking for work plus the burgeoning welfare case load or the ‘self employed people who are going broke and/or have entered personal bankruptcy.
This is what you get when you have no media except a few advertising flyers masquearading as newspapers.
What a joke.
http://www.theglobeandmail.com.....le1213423/
July 10th, 2009 at 8:05 am
I’d better jump in before I’m priced out forever! Oh wait. I forgot. I’ve been priced out for years now. All that good news in the press made me forget.
July 10th, 2009 at 12:33 am
The EDC forecast will scare the crap out of you. Energy, forestry, and autos down 40% from peak. Note that forestry fell about 30% last year (in BC at least).
July 9th, 2009 at 11:41 pm
I love the “US markets may return to normal in 2012″. What just happened was more like a return to normal. That’s why it is called a correction. Things had inflated prices, then they deflated, with a bit of overshoot perhaps. If they are thinking 2006 was normal they could be disappointed.