Friday Free-for-all!

Hey! The weekend is nigh!  Lets do our regular end of the week economic news roundup and discussion, here are a few stories to kick off the conversation:

Homeowners ignore Olympic rental license requirement
Olympic Village $132 million over budget
Mixed residential and industrial zoning not ideal
Vancouver condos not such a bad idea
The great BC real estate bust
BOC focus on consumers worries analysts
Canada needs to cool bragging?
US: Dead government walking (pdf)

So what are you seeing out there? Post your news links, thoughts and anecdotes here and have an excellent weekend!

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So you heard from people. Watch the rental rates skyrocket at the last few days before the Olympics begin. There will be a mad scramble for accommodations.

There are so many bears here it's unbelievable. You people think it's all about the Olympics. There are so many new immigrants ready to scoop out properties here at any cost. It's unfortunate that some of you don't own a place, if you do and decide to put up a for sale sign on your house, you'll have people lined up ready to bid up the prices.



Yeah – I have friends trying to let their condo – which overlooks the Olympic village – and the company they lsited with failed compeltetly to do so, despite continual reassurances.


I heard a story on CBC Radio this morning warning would-be landlords to Olympics visitors that the riches they'd dreamed about may remain but a dream. This was with Cecilia Walters and she interviewed someone local–who runs a company that helps place visitors in private accommodation–and this gentleman (whose name I failed to catch) claimed that expected room rates have fallen 50%.

So, while landlords had believed that they could get about $600/night for their condo/apartment, they should only expect about $300/night. I think that even this is wishful thinking for most. I've also heard from people who work there, that some local hotels–Richmond, Burnaby, Coquitlam–have many, many rooms to spare during February.


Whoops, I added "At the same time affordability is dropping as the BOC begins to raise rates and some borderline mortgage owners are forced to sell because they can no longer make payments." to the wrong section, I meant that to be at the end of Spring 2010.


@Purp: My predictions are as follows: Spring 2010 there is a listings boom as people who have been holding out for the post-olympic rush of foreign investment finally sell, prices stagnate or fall somewhat while inventory skyrockets, by the end of summer prices are falling decisively. Fall 2010 prices continue to fall while listings remain above anything we've seen up until now although many are taken off the market in the hopes that they can be re-listed to sell (at a lower price) in the spring. Spring-Summer 2011 prices continue to fall, people around Vancouver who have been stubbornly refusing to admit that real-estate can and does go down suddenly realize they were wrong, in the rush for the exits listings boom and prices begin to drop like a stone (until 2011 I do not foresee really big drops, here… Read more »


Krikey, double post, sorry.


Nice to see the fools are being dragged into the story kicking and screaming. Denial becomes increasingly uncomfortable doesn't it. One fool at a time, thats all it takes.


"This unraveling may not occur for a while, as easy money and excessive global liquidity can push asset prices higher for a while. But the longer and bigger the carry trades and the larger the asset bubble, the bigger will be the ensuing asset bubble crash. The Fed and other policymakers seem unaware of the monster bubble they are creating. The longer they remain blind, the harder the markets will fall. "

PS, good to see the clowns are still following the story. Awareness changes attitudes, one fool at a time.

nothing to read..

I read the paper and they said it will burst on Nov. 6 at 4pm.. better double check with a realtor.


It's clear this market is still wildly overvalued, however it's been chugging ever upwards in obvious defiance of fundamentals and bears' analysis for quite a few years now, so what bursts the bubble and when? People who need to make future RE plans (rent/buy) want to know! Predictions?


Looks like the realturds will actually have to start working a bit harder!!!!


"all the mega-projests such as EXPO 86, the Alex Fraser Bridge, Northeast Coal, The Expo Skytrain line, BC Place Stadium…"

Oh, and don't forget the Coquihalla Highway.


"Longer Looking Says: November 1st, 2009 at 11:34 am Boombust: I vaguely remember it as I was really young. A lot of good that did us." The 1976 UN "Habitat Forum" featured all kinds of exhibits/displays from downtown all the way to Jericho. In one of the old Jericho aircraft hangars, they boasted about having the longest bar in the world. (So much for our Islamic visitors…te he…) I remember seeing delegates wandering around town in their "native dress" whenever possible. A friend of mine managed to get ahold of the cardboard furniture that was part of the Gov't of Canada display at the Courthouse fountain. Although it was a little "stiff" to sit on, it looked great in his second floor suite (overlooking the daily traffic jams) in that old building that is still on the corner of Davie… Read more »


Fall in rent in most US metropolitan areas From the WSJ via Calculated Risk: ".. Equity Residential said new tenants in the third quarter paid 9% to 10% less rent than the previous residents. … Denver-based UDR is offering renewing tenants a flat-screen TV, new carpet, kitchen upgrade or, $300 in cash. … Some landlords have also become more open-minded about tenants with credit issues involving home foreclosures." AND "Note: REIT BRE reports tomorrow and their CEO always some interesting comments. "I think it is shaping up there is another leg down in terms of market rents and effective rents and that will be somewhere late this year or early [next] year where I think all the operators will move their rents down to basically handle the late stage of this recession." BRE CEO, Aug 5, 2009" Of course,… Read more »


"meaning the U.S. government will lose the $2.3 billion it sank into CIT last year to prop up the ailing company"


If I was a US taxpayer/voter, I would be so so happy today…

What's another 2.3 billion?

No Longer Looking

@Boombust: @nonymouse:

I tried to find whatever I read the bust to boom ratio. For some reason Peter Schiff comes to mind, but when I google it, I find nothing.

I did find an IMF essay from 2003 that says RE busts are twice as long as equity busts (typically 2.5 years). So to end the topic, the bust will last 5 years, minimum.

But first… it must begin.


When the crash does return 'for real' (summer 2010?), I'm anticipating a fairly rapid fall over about 2 years (30-40%), with demand seizing up and hot money speculators getting out. This will be followed by perhaps 5 years of slower grind down, well past 50%-off pricing, as all the 5 year mortgages reset (at much higher rates, forcing sales) and the boomers start getting out.

(The only way this trajectory could be different is in hyperinflationary circumstances.)

One ugly consequence is going to be the wrecked retirement plans of those who have almost their entire networth in their primary residence.

I suspect I'll buy a house from one of the earlier boomer-bailers in about two years time.

No Longer Looking

@Boombust: I vaguely remember it as I was really young. A lot of good that did us 😛

No Longer Looking

@nonymouse: Agreed. Assuming the pop occurs post-Owelympics in 2010, we will have had a run-up of 8 or 9 years. So look for the next run-up starting around 2018-2019 (after all those years of falling prices, and having friends and family go through hell). Jeez, I'll be an old man then. 🙁 Wanderlust is returning.


Oh, and of COURSE we hosted the 1976 United Nations "Habitat Forum".

Anyone remember the giddiness over THAT?

I do.


One more thing about this Olympics nonsense…

As I have said before, all the mega-projests such as EXPO 86, the Alex Fraser Bridge, Northeast Coal, The Expo Skytrain line, BC Place Stadium… didn't do anything to energize the housing market in the early '80's.

So, how some people believe a TWO WEEK EVENT (and the structures are now all built!) is going to prop up an economy that is getting weaker by the day, is beyond me.

Dumb and dumber.


@ Vansanity I was under the impression that many bubbles are symmetrical in nature.


"I remember reading somewhere that in real estate the bust is typically twice as long as the boom."

Interesting that you bring this up. I remember reading the exact opposite.

I also remember Warren Buffett saying that 20% off the top is guaranteed after ANY boom.

Hmmm…so that, coupled with "the premium" extra prices people have paid, looks like a supernovae blow-off to me.

And, sooner than "most people" think.

Baaa, baaaaaaaaaa!



An initial crash, perhaps. But when you consider the number of renewals that will come up between 2011-2014 with rates higher, it will go on and on…

I remember reading somewhere that in real estate the bust is typically twice as long as the boom. If that trend is true, we're looking at a 20 year bust. Think about that for a minute, that means RE won't see an upwards trend until around 2030! People with plenty of "skin in the game" better hope and pray that is not the case and I'm just an idiot on some blog.