Friday Free-for-all
It’s the end of the week! Time to do our weekend open topic discussion post. A brief round up this week, I’ll add more later if time permits. Here are a few stories I’ve noticed lately:
-Families are being priced out of Vancouver
-Back to boom
-TV networks tune into housings new reality
-TSX down for fifth time in six days
-US home resales decline 2.7%
So what are you seeing out there? Post your news links, thoughts and anecdotes here and have an excellent weekend!
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October 1st, 2009 at 10:53 am
@crabman:
Not it’s not, because the buyer of the (CMHC-insured) securitized mortgages is not exposed to default, nor is the middleman (the bank). Thus there is no damage to the financial system upon default of the mortgage – only to the taxpayer. I’m not claiming there’s no damage, only that it’s manifested much differently.
October 1st, 2009 at 10:36 am
Insanity has returned. I’m in a trade-up situation with mortage almost paid off. 50K-100K overbids with no subjects is the norm in my area of interest.
September 28th, 2009 at 8:03 am
@patriotz:
In Canada the lenders are offloading risk to CMHC. Seems to me the effect is the same as US securitization. Lenders are making risky loans then selling them to some sucker, and all these bad loans are inflating a huge housing bubble. The only difference is that our sucker is CMHC!
September 28th, 2009 at 12:42 am
How’s the highend condo market doing?
http://www.vancouverreflection.....do-market/
September 27th, 2009 at 9:52 pm
BB said: “In the “Nahanni” open house, Polygon reps were trying to flog ten unsold units priced in the low 500K range, while another group, represented by a realtor, sat forlornly in the lobby trying to unload their two “investments” in the 449K range.”
Units appear to be designed to rent out and attract small time part time landlords who are more in the begging than choosing position when it comes to tenant selection. Look at the layouts. Do they say “Newlywed couple, young family” or “College roommate wanted”?
September 27th, 2009 at 8:41 pm
@crabman:
Virtually all the ones that matter (the risky ones) are CMHC insured. The securitization involves no transfer of risk since CMHC continues to guarantee the principal. The real issue is the assumption of risk by CMHC at the time of the mortgage loan, not the subsequent securitization. The taxpayer would have the same exposure in any case.
This is completely different from the US where securitization was used to offload risk from the lender to marks around the world.
September 27th, 2009 at 7:26 pm
“Because the guy who buys low and sells high gains wealth at the expense of the guy who buys high and sells low.
Isn’t that obvious?”
Duh.
So true. But guess what? Some people STILL don’t get it.
September 27th, 2009 at 7:21 pm
@No Longer Looking:
If CMHC determines that you do not have the assets to make it worthwhile for them to come after you, they will sell the debt to a collection agency who will hound you to death until you either pay up (possibly by wage garnishee) or declare bankruptcy.
If you get foreclosed and you have any assets other than the usual personal possessions, rest assured you will lose them.
September 27th, 2009 at 7:19 pm
I was snooping through a brand new complex in the Newport area of Port Moody today.
In the “Nahanni” open house, Polygon reps were trying to flog ten unsold units priced in the low 500K range, while another group, represented by a realtor, sat forlornly in the lobby trying to unload their two “investments” in the 449K range.
If they had taken the time to look on “Realty Link”, they would see identical units for sale in the 340-385K range.
A buyer really must do “due diligence” or else be a REAL chump!
By the way, there wasn’t much action. I think most people know the jig is up.
September 27th, 2009 at 7:15 pm
@bums up2:
Because the guy who buys low and sells high gains wealth at the expense of the guy who buys high and sells low.
Isn’t that obvious?
September 27th, 2009 at 7:13 pm
@NO – LYMPICS:
Then why aren’t rents higher? And why have jurisdictions with no land use restrictions (like Phoenix and Florida) seen similar price increases to Vancouver?
The answer: there is no shortage of supply of housing. Prices (but not rents) are being inflated by easy credit and stupid buyers, just like in every other bubble market.
September 27th, 2009 at 7:10 pm
“The strata corporation must enforce the bylaws and has a duty to collect the funds.”
And rightly so.
However, after reading this excellent post, is it any wonder that some people choose to rent?
Far less “complicated”, in many respects. And, when the market corrects substantially, less expensive.
September 27th, 2009 at 5:37 pm
Strata must act if owner doesn’t pay fees
http://www.househunting.ca/hom.....608019d830
Dear Condo Smarts: Three owners in our strata have not made payments on a special levy that was due at the end of February this year. They each owe roughly $9,000, and our suites currently sell for around $325,000.
Our property-management company has placed a lien against the strata lots, but has advised us not to proceed with a court-ordered sale as we are told the judge would be very unlikely to force a sale.
Part of the problem is our manager is afraid of one of the owners.
If we can’t go to court, how do we get money from these owners?
– N.B., Surrey
Dear N.B.: If a strata lot owner has not paid his strata fees or special levies, the Strata Property Act gives you substantial authority to protect the strata interests, and also to ensure those funds are collected.
Take this chronologically. On Feb. 28, the special levy was due. Those units that missed that deadline should then receive a demand notice advising if they do not pay the amount within 14 days, the strata corporation will be entitled to file a lien against a strata lot.
Once that period has expired, the strata council then needs to decide when a lien will be filed, if the owner is not co-operative in providing payment. The lien provision is there to ensure the strata corporation can collect the money, and it takes a priority over other items such as personal debts and mortgages.
The cost of filing the lien is also included in the lien amount the person owes.
If, at that time, the owner is not co-operative, the next step is to proceed with a court application for a forced sale of an owner’s strata lot.
Depending on a number of conditions, and with the advice of legal counsel at this point, you will decide on what the appropriate time and amount are for proceeding to the application for sale.
According to Stephen Hamilton, a lawyer in Vancouver, “Most strata corporations would consider proceeding to court for the application when the amounts reach $2,000 to $5,000, or a long period of time has passed for the amount owing.
“While most of the costs are recovered, the strata corporation does have some cost associated with court fees that may not always be recovered.”
Don’t wait for the owner to go into bankruptcy or, worse yet, lose their asset because of proceeds of crime, tax evasion or long-unpaid family maintenance requirements.
In such a case, your strata corporation might not be at the front of the queue to get paid what it is owed.
The strata corporation must enforce the bylaws and has a duty to collect the funds.
=====================
So…..
I wonder how much of this will be going on when the market crashes…
Neighbour against neighbour…
Welcome to the best of quasi-socialist living.
September 27th, 2009 at 5:26 pm
59 !(EconomicsDegree)
Re ALR:
The ALR was created in 1972, ironically about the same time the world entered inflationary times that have run unabated since then.
When you limit supply, demand and hence prices rise.
IMHO, prices have not met fundamentals since 1980.
However, in the last 10-25 years multi – family has dominated the scene and that’s why Bob Rennie is rich, he foresaw this years ago. Urban “affordability” is now relegated to going vertical. However, even this has gone rather high end as developers and greedy local gov’ts act in collusion to squeeze every dime they can. People are now literally forced /shoehorned into strata living and that quasi socialist nightmare.
The ALR has evolved into a land bank thats benefits a select few who profit from the artificial shortage. It’s not much different than how DeBeer’s does business.
September 27th, 2009 at 2:12 pm
rp /ignore
September 27th, 2009 at 1:52 pm
@asp:
#71, The diversity of culture and tax nuance though self evident does not explain away why Vancouver has so many homeless, crackheads, starving seniors, mentally ill without care, native peoples drained of spirit, and youth careening down the highway to hell known as Vanshitstains city streets.
Why is this such a persistent issue that Vancouver explains away with bicycle paths and silly games? You would think that in such a small town there would be more concern not less than that of a major metroplois where myriad issues such as homelessness can get buried.
It isn’t an anomaly in Vancouver to have these huge numbers of disposessed, its Whalley, Aldergrove, Mission , Chilliwack, DTES, Kelowna etc etc etc., it is in evidence everywhere in the GVRD, it is not at all here? Why???????
Is it because VST-zone has no culture? Its really night and day, there are no (zero) people living on the street in any of the countries I have visited over the past month, none. What is so differant about Vancouvers people that has the denial of this problem so ingrained that an entire population can ignore it and even justify ‘them and us’?
I have been attacked bringing up the fact that Vanshithouse pours close to one billion liters a day into our ‘pristine’ supernatural enviornment, more than any other modern city. This is proven in court documents filed by our own Ministry of F&O of the CDN the Federal Government. And yet the deniers are so far gone that they freak when it confronts them in words that make it uncomfortably obvious. Do the people of Vancouver have a denial complex so severe that every issue that interferes with the kool aid propaganda of ‘we’re number one’ it must be violently attacked before the world rights itself?
Like #72, we all know that the RCMP kills more citizens than any other jurisdiction in the western world. Thats just a fact. BC leads this grisly statistic. But when it is made public the deniers, like yourself begin to howl their protestations…..wierd.
If Europeans are taking care of the people who are in need does that by extension infer that Vancshithole doesn’t give a shit. The differance is fairly startling. In the past thirty days there have been no police-citizen murders in a population of over 300 million….wierd.
September 27th, 2009 at 1:34 pm
Well, I havent thrown myself into the fire sea of mortages, house ownership, or fancy lifestyle. I am so lucky that I don’t have the consumer addiction or high demands/expectations, so I live modestly, very modestly, and no complaints.
What I am now focusing more on, since I know the economy is not going to get better etc, how to avoid getting taken advantage of those that have had no restraints on themselves in the “i want iwant i need i must have” department. How to avoid getting sucked in by sob stories, how to gracefully say “no”. I am all for helping other people, but not those that have been selfish in their spending. Those need to learn a lesson, not me.
Any suggestions?
One of my ideas would be to refer them to sites about how to be frugal.
Another idea is to complain how hard it is to get by and how much debt I have (which I dont)..
For every sob story, have your own pseudo sob story.
This sounds cheap, but I have found if you have something nice, somebody will try to steal it. If they find out that you have money, they will try to “borrow” it..
It it pitiful how some behave.. sigh.. instead of living within means and have reserve funds, many seek to gold dig, borrow, live off credit and somehow some shadow somewhere is going to pay for it.
I feel this is where the situation is at. Housing market is like the titanic, going to a long time to sink, with a lot of squeaking, screaching from metals bending, windows blowing out.. meanwhile the orchestra is still playing pretty music (media) to calm the passengers.
I am not afraid of the housing market anymore, I know what it is doing. I am afraid of the desperados that will come crawling out of the wood work. Those are the ones I have to be careful to avoid.
September 27th, 2009 at 11:10 am
scullboy I can make the same observation in Calgary. 6 months ago it was unheard of eating out on Friday without reservations, unless you were willing to wait a couple of hours. I can walk into any restaurant and get a seat on almost any day. Sadly in Calgary there aren’t any good restaurants where you really want to.
September 27th, 2009 at 11:04 am
Just to clarify a couple of things:
When I said the Poit Grey cafe owner said business is down, she was speaking about her regular customers, who all said the value of their investments like RRSPs were way down. Although technically they haven’t lost money because they haven’t sold anything there’s a severe psychological drag when you look at your RRSP statement and there’s a big drop.
Since I’ve been working in the food and beverage industry I can also tell you that in almost every decent restaurant in town, business is down about 40%. That’s also the opinion of the staff at the culinary school I attended, and they have a program to get people from school into the industry.
So except for those Dim Sum places in Richmond (and trust me after working in kitchens I can tell you you DO NOT WANT TO EAT THERE), the restaurant business in Van is taking a beating.
September 27th, 2009 at 10:57 am
Don’t agree Asp taxes have nothing to do with it. Its all about culture. In fact homelessness was mostly a first world phenomenum. In the third world you have a lot of poverty but its different than here. A poor farmer may share his house with twenty others but he still has a home.
In many European countries crime and homelessness are on the rise but in more traditional countries they are still lagging us in those areas. Eastern Europe and southern europe as a whole was more traditional. Of course its the sign of the times and they are changing. Also with economic migrants flooding their shores there is a new class of homeless. People who are poor with no homebase.
September 27th, 2009 at 9:05 am
“The RCMP murders of mass numbers of citizens”
–
PR, more groundless libel.
September 27th, 2009 at 8:21 am
@realpaul:
The reason you don’t see so many crack heads in European streets is because they pay higher taxes then we do here.
And their governments are actually smart about how they spend the money. Europeans get great value for their tax dollar.
September 27th, 2009 at 8:18 am
“the condo he rents in the Bosa development at Granville and Seventh (a place he’s likely to be staying a while longer, since he says he can’t afford to buy here)”
Brent Toderian makes $178,000 a year as City of Vancouver planning director. And finds that paying rent is better then buying a condo.
http://www.vanmag.com/News_and_Features/Mr_Big
September 27th, 2009 at 8:08 am
@other ted:
Many people are surprisingly naive when it comes to the cynical and largely destructive policies of our own government. Its as if peoples sense of right and wrong is offended by the idea that our own governments could be working a cross purposes to the benefit of the citizenry.
The classic misdirection principles used by governments ( and corporations)to play on peoples nationalistic sympathies and sense of home safety cause such disonance that people are wholly disrupted by the horrible examples which are so often caught in the public forum.
Examples of the rape of the enviornment are overcome by advertising ‘the supernatural’ enviornment. The RCMP murders of mass numbers of citizens are countered by the sensation of history and ‘the musical ride’. Vote rigging in newly created ethnic constituencies is rammed through with very public fights over ‘racism’.
Public service workers hold your kids and mail ransom and its ‘inconvieniance’. Taxes are the highest in the western world, wages are the lowest and the CRA tax man imprisons more Canadians over non compliance than the Dickensian sheriff. Lets face it, the Canaidian population is jello.
BTW, I have been in four Euro cities in the course of the past month. I have seen no (zero)crack heads in the streets or enjoying free public transpotation, no homeless, crazies, mentally ill or vagrants or impoverished seniors laying in the streets and an abscene of panhandlers all of which will cause any European visitors to Vancouver to take notice. No clusters of youth smoking dope on the street corners under the care not eye of the police. Not one rat or roach have I seen, not one, unlike Vancouvers legions of pests. Not a single Hotellier apologizing for the infestations of bedbugs , again, very unlike VancDenial.
The Europeans have an intense interest in the Native Indian culture and peoples. Any coming to VanShithouse will be angered by the reality those people have to bear on the streets of VanDenial/shitstain. The press is sure to make this a focal point of their coverage.
September 27th, 2009 at 7:26 am
Barney Frank comments on US financial regulation:
Since 2007, over 90% of Canadian mortgages have been securitized. Good thing we aren’t making the same mistakes as the US!
http://americacanada.blogspot......nment.html
September 27th, 2009 at 7:17 am
spain that was a good blog. Has many good links.
Real Paul good post #64. agree with what you said “Canada is also seeing a steady decline in productivity due to the crazy dollar policies which have hamstrung entrepeneurial manufacturers while favouring union intensive industries based in vote rich Southern Ontario tied to the US supply chain.”
That is why I almost find the bear/bull argument for real estate irrelavent.For me I am bearish on all of Canada not just real estate. The standard of living for employees of crown corps or government workers is fine but for the private sector it has gotten worse and worse.
September 27th, 2009 at 2:27 am
Re: Spain
There is a great blog following the situation in Spain with lots of data and analysis: http://spaineconomy.blogspot.com/
September 27th, 2009 at 1:56 am
Green shoots my ass say the unemployed.
“In June, unable to keep up with his mortgage payments, Mr. Jones sold the home in a hurry, in a slumping real estate market. The sale came at a considerable loss, forcing him to absorb tens of thousands of dollars on the mortgage. He now continues to make monthly payments, albeit smaller ones than before, on a home he doesn’t live in. “I was falling so far behind that they were going to take it anyway,” he said.”
http://www.globeinvestor.com/s.....5/GIStory/
September 27th, 2009 at 1:44 am
@other ted:
This is an excellent article. It points out the facts of what happenes when the BS can no longer be shoveled over reality. Our governments are sweeping the headlines with news of ‘shovel ready projects’ that the taxpayer is just itching to see. As we see from the Spain article, the money will eventually run out when the deficits are so high that they overwhelm GDP to such an extent the economy implodes, dragged down by debt service.
“The credit boom masked a steady decline in productivity over the last decade. Spain’s unit labour costs have risen by about 30pc compared to Germany.”
Canada is also seeing a steady decline in productivity due to the crazy dollar policies which have hamstrung entrepeneurial manufacturers while favouring union intensive industries based in vote rich Southern Ontario tied to the US supply chain. We are paying through the nose for this wrong headed policy as unemployment and social welfare benefits claw back more revenue than is being brought in. So much so that the Government is having to resort to QE to create money for internal spending that it simply doesn’t have. This game of silly buggers was keeping the CDN economy going sideways ( as evidenced in the wage parity stats 10 years) when the US economy had the ability to absorb the production , but the game is up now, as evidenced in the real employment numbers and economy showing negative growth over several consequtive quarters. Back to back negative growth is in fact the dictionary definition of a recessionary enviornment.
The spin about ‘everything being fine’ and ‘the recession is over’ is all just bullshit. The excellent posting regarding the 500 resumes for a restaraunt position are a case in point. The denial in Vancshitstain is wildly funny.
I am back in Britian from the continent ( in Bristol) and have made a concious effort to view any signs of advertising in travel cos or news sheets or information ( never mind interest) in Vanc 2010 Olympics, sorry, there just isn’t any.
September 26th, 2009 at 11:53 pm
Rp are rents high because of land shortages or because Vancouver is a desirable place to live? Put another way, if land restrictions were looser would rents fall or would population growth increase or both? Last I checked units were being built at a rate faster than population growth. ALR restrictions don’t seem to be slowing down construction.
September 26th, 2009 at 11:09 pm
Spain tips into Depression.
http://www.telegraph.co.uk/fin.....ssion.html
That is depression not recession. Who would think that a booming economy based solely on real estate speculation could end up like this.
September 26th, 2009 at 10:06 pm
Rents are pretty high. Not anywhere near as crazy as prices, but they do seem a little high.
September 26th, 2009 at 9:47 pm
@patriotz: Asset prices, whether they be stocks or houses, are not a source of income and do not represent real wealth. That’s because the money the seller of the asset makes is at the expense of the buyer. No wealth is created by an asset sale.
[...]
[F]or RE just as well as for stocks [...] buy low, sell high.
Why would you buy low and sell high when no wealth is being created by the transaction?
September 26th, 2009 at 7:44 pm
@NO – LYMPICS: “it is a fraud perpetuated on the general public and is one of the main reasons housing costs are so high.”
If the ALR produces a shortage in housing, why aren’t rents higher?
September 26th, 2009 at 2:38 pm
How is population growth going? I had a look at the Wiki because i was curious about the effects of the downturn on net population growth. Is it true there is a big slowdown from India and China? If so, why? If anyone has info, links on this, i would be really curious to see them.
September 26th, 2009 at 2:31 pm
@realpaul: G&M perils of jobless recovery story
500 resumes = 500 free shifts = 50-100 days partial wage savings. I guess they are still paying kitchen staff but it wouldn’t be a bad start for any new business!
Time to name and shame these shoddy operations. I don’t want to pay to eat in that type of establishment. Perhaps they’ll give me a free taster meal so I can decide whether or not to go back another time?
September 26th, 2009 at 2:11 pm
40 X RennieWhereRU?
You are correct, the land South of Steveston Hwy and East of #5RD was in the ALR, but was removed years ago. The ALR is a scam, it is effectively a land bank which local gov’t often abuse for a number of reasons. What the ALR is is a long stroy to explain, but suffice it to say it is a fraud perpetuated on the general public and is one of the main reasons housing costs are so high. Given the majority of people in greater Vancouver live in multi family, what has happened is people lives and fates are controlled by Local Gov’ts and a cabal of deep pocketed developers who effectively force people to live in higher density and all the quasi socialism that strata living brings.
Olga Illich would be the aunt of the FG developer Rick Illich, son of Milan Illich, owner of Progressive Construction.
The Illich family basically made their fortune developing raw land into subdivisions, and their last big venture was Terra Nova , which was in the ALR. This ended up as mostly SF homes with some higher density.
Since then, City of Richmond has gone into high density and the Illich’s company nor any other has any more big parcels of raw land left and is basically into site servicing (roads, sewers etc.), and Rick Illich has his own company “Townline” that builds multi- family.
September 26th, 2009 at 1:44 pm
Re: Illich and Fantasy Gardens.
My understanding is that a portion of the overall site is in the ALR, and that Illich is donating the ALR to the City as part of the usual legal bribery in such deals , given it is useless to him and probably wouldn’t be allowed out of the ALR. Also, I seem to recall that all the Fantasy Gardens site was in the ALR, but VanderZalm somehow had the portion he built on removed and even built without permits. The remaining ALR portion is being used as the sites gardens.
In essence, the old owner Tan Yu pased away and his family sold it. However, the site is zoned botanical garden and gas station…so the slimey part is that the current zoning does not support residential, and I think it is a terrible location for residential; given the current traffic at #5 Rd and Steveston is terribly managed and often in gridlock.
Olga Illich was not a Councillor, she was an MLA in Richmond but did not run again.
I was reading a story by Frances Bula about how the 60 storey Shangri-la was built, it took a bunch of gifts, donations etc to convince the COV to approve it. Obviously, after all was done, the developer felt there was still a profit to be made.
The Fantasy Gardens concept dies quickly and has been a bit of an eyesore. Illich saw an opportunity . However, I really don’t like these deals which fall outside the current zoning and OCP because how does one audit them so that there is a net benefit to the City ?
What happens is the developers and the City get too cosy and seriously stray from any sense of fair play and professionalism and form an exclusive club where the bribery benchmarks keep changing.
September 26th, 2009 at 1:38 pm
Time for bears to rest for the winter and let events unfold. Been getting a certain number of “I told you so’s” lately coming from people I advised not to buy who bought anyway last year. What’s startling is that people here have learned no lessons from what we saw south of the border. At this point, there are two macro things that can happen and neither are good for house prices. The first is that the economy will improve, in which cases interest rates will rise. That will make those monthly payments to spike up and decrease demand/force some people to sell and deter ohters from buying. The other scenario is that the economy will get worse, in which case unemployment goes up, cash flow goes down and people are forced to liquidate assets. So what’s the macro scenario that pushes house prices up? Anyone? Bueler?
September 26th, 2009 at 12:46 pm
perhaps I am naive but I feel more and more unsettled by the obvious way the gov’ts of the western world (G20 lets say) are telling the people one thing and doing another. Perhaps gov’ts always do this and I haven’t been paying attention or perhaps they are doing it to such a degree that I have finally become wary.
it seems to me the canadian gov’t, for instance used to be mostly honest.. but now I don’t believe a word finance minister flatherty and BOC gov Carney are saying.
I understand that by saying the recession is over and the real estate market is sound they mean to bouy up consumer confidence and improve our situation but a large part of me feels that 50 years from now people will look back and see that the gov’ts lied to their own people (perhaps with good intentions) but just made it worse.
I want the truth (I don’t think I’m a conspiracy nut). Just tell me, I can take it. the economy is in the crapper and we’ve got to do x y and z to get ourselves out of it. don’t lie to me with a straight face and do the opposite..
September 26th, 2009 at 12:40 pm
http://ca.news.finance.yahoo.c.....-says.html
takes the cake
another remax ad presented as news
September 26th, 2009 at 11:26 am
#49 Anon, thx for clearing that up.