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Canada is desperate to keep the dollar down below the US and is pinning its hopes on a US recovery ( ain’t happening) so that it doesn’t have to raise rates. Aussie and Norway have broken with the pack of the super indebted and have begun to reign in the inflation in real estate and consumer discretionaries ( food etc) but Canada is letting it all slide. Of course this is killing the savers, but who gives a crap about a bunch of old people.

I expect to be paying much more for my bunch of bananas before this is over. The 2% keynsian inspired target that Carney has been blabbing about should double the cost of goods and servives over fifty years . My grocery bill has doubled in the past two. Same for real estate and many issues. Farcical to assume we are going to end this well.

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Now go to your room or go upstairs and have mum cook you dinner.

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Or in other words:

http://www.moonbattery.com/arc....._wound.jpg

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Nevertheless. Is Lake O’Hara at the bottom of the Rocky Mountains? What is a dip and what is an actual “bottom”, I don’t think bottom can be called except in retrospect and it needs a few years to make sure it’s truly settled (in slow moving Real Estate anyhow). Saying “ha ha, see I was right!” in that prediction NOW is grossly premature (I’d wonder about other parts of your life in which you’re premature but I’m trying to keep it civil, at least on my end ).

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Sorry, but that isn’t the case. I made the following post three days after I start contributing to this blog:

June 16th, 2008 at 5:21 pm
Freako, put me down for 12 to 18 months of gains. In other words, if there is a correction, then I predict values will drop from 10 to 15% (nominally). So, if it breaks 15%, I will have been wrong.

I will further add that a correction of greater than 10% will only occur due to an external factor (e.g. higher interest rates > 1.5%, higher unemployment ~ + 2%, or a recession)

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What are you talking about here? You were wrong period. End of discussion, that you use it as evidence of how good your predictions are just goes to show how deluded you are.

“10% off-peak was the non-recession scenario. In that same post, I said 15% with a recession. Guess what… correct again…”

That’s the hedge I was referring to, originally you just said 10% but then later you revisited your prediction once the recession became inevitable.

“A bottom is a bottom… we hit one. With your dress, lipstick and dancing fantasies, I would expect you to know that.”

Wow, you must have an interesting time at the amusement park. So Lake O’Hara is at the bottom of the Rocky Mountains by your definition? Get serious.

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That would be like me saying you were wrong if prices were to correct 49.9%, even though it would be far closer to your original predictions than mine. Talk about splitting hairs.

10% off-peak was the non-recession scenario. In that same post, I said 15% with a recession. Guess what… correct again…

A bottom is a bottom… we hit one. With your dress, lipstick and dancing fantasies, I would expect you to know that.

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Good question. I think we need to differentiate between ‘been able to’ and ‘did’. With money being so cheap, some people likely keep their down payments low and money invested elsewhere. For the most part, first time buyers are not putting down more than say 10%. Trade up buyers probably exceed 25% for the most part. We should also keep in mind that a huge percentage of homes are owned outright.

Affordability will drop with higher interest rates (by definition). At the same time, higher interest rates imply a stronger economy which implies stronger wage growth. Even with this recession, average income is still climbing and at rates above inflation. I think the two are likely to be a wash going forward.

Have a look at the data. I think it will answer some of your questions.

http://www.rbc.com/economics/market/pdf/house.pdf

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No, but we can shoot the “entirely uncritical purveyor of RE BS”

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It’s strange that you would argue against a standard definition used for affordability. Don’t shoot the messenger.

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You… 50%+ drop… calling that for years… RESULT… NADA… Big fat zero

I didn’t predict that it would fall that far until Fall 2011 at the earliest with it being more likely 2012 or 2013.

“1. Listings Peak – I was off by only a few hundred listings. The reality is that I called the peak of listings. That opinion was quite divergent from most, including yourself, who claimed that listings would continue to grow.”

Wrong is wrong, you called a number and you were off. If you’d been 2 listings on your side of the prediction you’d no doubt be crowing about how right you were.

“2. Correction Magnitude – I called the SFH Vancouver bottom at $630k. It ended up hitting bottom at around $650k.”

You also predicted “Not more than 10% off of peak.”

“3. Timing of Bottom – In December I said the bottom would be reached WITHIN 6 months. The market turned around 4 months from that prediction.”

And I predicted that there would be a drop, an upwards correction followed by another drop and possibly ANOTHER upwards correction before the real losses begin. You are not right about bottom until things have settled out for a year or two, every market in the states and most worldwide had the same bounce after the initial drop.

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Why are you wasting your time arguing with these bearish fools? Get out there and start making boatloads of money on real estate. Get your hands on every last penny out there and leverage yourself to the max. I hear there is an opening at Concert. Since you are a genius, you should get the job, no problem.

@oneangryslav2:
Davey picked 1985 for his reference point in comparison to today. The BOC indicates that average residential mortgage rates in 1985 were about 12%. from ’85 to ’90 inflation was between 4% and 5% (4% in ’85). He has simply substituted high real interest rates in 1985 for high purchase prices (and near zero real interest rates) today. The comparison is bunk.

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Finally, despite the massive recent (5-7 year) increase in real estate prices (while income has barely kept up with inflaction during the same period), the affordability index is currently only 5% points higher than the long-term average. What is wrong with this picture? Part of the answer is that if you were to exclude the last 5 years or so, the average since 1985 would be less than 31%, but still does it not seem rather strange that skyrocketing prices and essentially stable incomes have not had a great effect on affordability?

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Let’s compare predictions…

You… 50%+ drop… calling that for years… RESULT… NADA… Big fat zero

Me…

1. Listings Peak – I was off by only a few hundred listings. The reality is that I called the peak of listings. That opinion was quite divergent from most, including yourself, who claimed that listings would continue to grow.

2. Correction Magnitude – I called the SFH Vancouver bottom at $630k. It ended up hitting bottom at around $650k.

3. Timing of Bottom – In December I said the bottom would be reached WITHIN 6 months. The market turned around 4 months from that prediction.

Sorry, but those are the facts.

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Proven wrong? Quite the opposite… I have done quite well with my predictions,
==================

Monday: I predict that I will never die.

Wednesday: Ooo, look. I haven’t died yet. I’m a frickin prediction genius! All hail me!

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As for your predictions, you are still 0 and 4 with one still hanging in the balance (well, truth be told you lost that one too but before your prediction was proven false you hedged). Yes… You’re about as accurate as Nostradamus (which is to say, not at all).

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Proven wrong? Quite the opposite… I have done quite well with my predictions, thank you. Feel free to read my posts from last Fall. So well that I might have to change my handle to Nostradaveus.

I am quoting REAL published data (as of Sep 2009). Who’s the one in denial?

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“For example, the average apartment in Vancouver currently has an affordability rating of 36% (based on average household income, 25% down, 5 year rate and 25year amortization). This compares to an average of 31% since 1985.”

In denial much? Get real man.

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Yet another fact, logic and mathematical filled post from Dave, wizard of wall street, who has so much money because of his incredible intellect and knowledge of the market that he can spend all day, every day here.

Remember that video in a couple years from now, ’cause that’s going to be me, rubbing it in your face.

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By affordability, I mean the total percent of income required to service real estate debt (mortgage, taxes, upkeep).

For example, the average apartment in Vancouver currently has an affordability rating of 36% (based on average household income, 25% down, 5 year rate and 25year amortization). This compares to an average of 31% since 1985.

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