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November 27th, 2009 at 2:15 pm
@Drachen:
I am glad to see your agreement that my predictions have been good to this point. We can agree on the future once we get there.
November 27th, 2009 at 2:09 pm
@Dave:
You keep pointing to that post as if it were some sort of proof. All it proves is you’re not wrong yet, but we’re predicting the future here, I can predict that the sun won’t set tonight and keep pointing at my prediction all day long and it doesn’t mean I’m right.
November 27th, 2009 at 2:05 pm
@Drachen:
Not me. I am not a professor or an academic. I also don’t have a PhD. Nice try.
November 27th, 2009 at 1:59 pm
@Dave:
“Read the initial question by Drachen and my subsequent response. Out of the park…”
Oh, I see. Patriotz and the rest of us are “in the park” when we use logic and science to discuss the future possibilities of real-estate, you “hit it out of the park” so you’re not even trying to come from a real-world fact-based perspective, you’re just making up crap like you’re on another planet. Is that what your metaphor meant Professor Giles?
November 27th, 2009 at 1:59 pm
@Drachen:
Wrong? Read em and weep:
http://vancouvercondo.info/200.....e-yet.html
November 27th, 2009 at 1:55 pm
Hey Dave, I just found a paper you might enjoy by some guy at UVic;
“Finite-Sample Properties of the Maximum Likelihood Estimator for the Poisson Regression Model With Random Covariates”
That’s pretty much up your alley isn’t it?
Oh and one of the authors is named Dave and his “specialities” are Econometric modelling; Forecasting; Applied Statistics… That’s the sort of stuff you’re constantly yammering about isn’t it? Coincidence?
David Giles
November 27th, 2009 at 1:53 pm
@patriotz:
Is your reading comprehension that poor?
Read the initial question by Drachen and my subsequent response. Out of the park…
November 27th, 2009 at 1:49 pm
@/dev/usr/:
The sarcasm wasn’t lost on me, but his initial point was correct; things will stay the same until they no longer stay the same. ‘The same’ in this case is real estate affordability. Patriotz and Drachen have been going on and on for years that prices were too high. In the context of Vancouver real estate, they are not.
November 27th, 2009 at 1:41 pm
@scullboy:
why is this moron still posting here when he no longer belongs to Vancouver? I think he should just STFU and get on with life. This guy is like a dumb blonde being dumped by a rich man and she couldn’t get over it. She has to find a way to get back at someone but have no power to do so unless she spreads her legs to her nearest customer. This is what scumboy is. A loser who doesn’t want to toss in the towel and move on with his sad sack life. Go grab yourself a hockey stick and play some pond hockey there. Did you already diss the locals there the same way you diss people in Vancouver? Or are you already starting your new round of complaints in Halifax about how crappy and useless the city is. How are those so-called multicultural restaurants there? Did you get served a kebob with raw pork in it? Go to your local store and open up a can of sardines, at least Nova Scotia has good sardines and hopefully, you won’t be complaining about that.
November 27th, 2009 at 1:41 pm
@Dave, if I understand correctly, property prices could double from their current levels as long as that new price set is within “a range of affordability”. So it comes down to the definition of “a range of affordability”. Now I`m going to go out on a limb and say that you would argue that if prices are going up, people are buying and, therefore, real estate is considered by those people as being affordable. Once people stop believing that real estate is not affordable, they stop buying and the prices will stop going up. In this case, they will retract until a new range of affordability is found which should be almost immediately (since if a property is affordable at $X and not affordable at $X+1, once the price returns to $X and it is affordable, prices will stop heading down).
So two questions:
1. How would you explain sustained price drops (as seen in many markets the world over) since the above argument proves that prices shouldn`t drop much at all before returning to the range of affordability?
2. If Vancouver prices are affordable to the citizens of Vancouver, would those same prices be considered affordable to another population with similar net worths, employment opportunities and incomes in a different market? Can you suggest an example?
November 27th, 2009 at 1:39 pm
Dave, i think dev/null/ is making fun of you when saying this:
“In any case he(Dave)’s taken a bold and firm stand with his opinion. To paraphrase: Things will stay the same if things stay the same. However, if things change then things will change.”
November 27th, 2009 at 1:35 pm
Dave, what I “got” is that once again you’re being intellectually dishonest. Your attempt at an argument, what you “have said all along” is: If A then A. If B then B. Heads I win, tails you lose.
Sorry if it wasn’t clear I was being sarcastic. Maybe Drachen’s easy pitch bounced off your helmet?
November 27th, 2009 at 1:33 pm
@Dave:
Are you really that dense or do you just think we are?
Prices are not “objects”, they are the intersection of two functions, namely supply and demand. In addition, these functions differ between the short and long run, which means that you can have deviations from long-run equilibrium (bubbles and busts) which correct themselves without any external factors.
In other words, completely contrary to your analogy, price movements (either up or down) don’t tend to move in the same direction, but bring about their own reversal, or correction as it’s usually known.
Thus the constant real price trend of RE in the long run. So just how far off that trend are we today? Take a look.
http://cuer.sauder.ubc.ca/cma/.....couver.pdf
November 27th, 2009 at 1:29 pm
@Dave:
“Nice try, but you threw me an easy pitch and I hit it out of the park.”
Ahh, I see, you’re being deliberately ironic. Now I get you. Actually that makes a lot of sense, if I think back at everything you’ve written on here and I imagine what would be the OPPOSITE of your position it would be right about 90% of the time. So you are a genius, just an inverted one.
“Real estate has traded within a range of affordability for at least the last 40 years. Expecting it to stay within that range is a reasonable expectation.”
Of course it is, but Real Estate is also at a near record level for affordability with a record LOW prime rate. We all know prime will go up and affordability will worsen when it does. According to YOUR logic that means that real estate prices will drop and if you want to use a 40 year average to point to WHERE Real Estate will come to a rest I’d say you’re on the high side but far closer to the mark than anything you’d said in the past.
So, as near as I can figure you’re calling for a 25-35% drop now for prices to return to a relatively “normal” affordability level once interest rates kick up a few points, if rates go up more housing will fall further. That’s quite a ways out of line with what you’ve said in the past.
I believe your recent line is prices have fallen as far as they will fall and we’re set for future stable moderate increases for the foreseeable future right? So, are you sticking to your guns or is this new position the one you’ve decided to take?
November 27th, 2009 at 1:11 pm
Does anyone know of any statistics about how many apartments/condos (rental stock) are rented out for the month of the Olympics?
I’m wondering if I should look for a better apartment in January, during the slow winter months, or wait until March.
I want to live in a nice place but not pay top dollar. Selfish, I know.
November 27th, 2009 at 1:02 pm
@Drachen:
Nice try, but you threw me an easy pitch and I hit it out of the park.
/dev/null gets it. You don’t.
Real estate has traded within a range of affordability for at least the last 40 years. Expecting it to stay within that range is a reasonable expectation. We are not outside of the range currently, so expecting a price correction because ‘prices are too high’ is wishful thinking at best. Based on current incomes and current housing costs, the price of real estate is well within historic norms. I’m not sure why you struggle with this reality.
I didn’t bring my credentials into this. You did. I don’t feel the need to state what they are, nor what my IQ is. I simply refuted your point that Garth has more economics education than me. He doesn’t. You can choose to believe that or not, but I am certainly not going to send you my transcripts.
November 27th, 2009 at 12:39 pm
Well now, Drachen, Dave might have a point. It certainly does appear that the RE market in Vancouver exists in a vacuum, lacking any gravitational attraction to reality.
In any case he’s taken a bold and firm stand with his opinion. To paraphrase: Things will stay the same if things stay the same. However, if things change then things will change.
Sorry to say but I really think he’s backed you into a corner with that. Only time will tell if his elegant thesis proves correct. (If so he’ll be sure to come here and point it out).
November 27th, 2009 at 12:36 pm
Well, it finally happened, I just got downsized…I look at it as a great opportunity to re-invent myself, take a holiday, enjoy the slopes etc. as guess what? I have no mortgage, no car payments, only rent; having sold my townhouse 2 years ago, I reckon that the proceeds of that sale and my severance should allow me to maintain the same monthly cash burn for about 9.5 years!
Of course, I would like to buy a house some time when prices get back to normal so I wouldn’t burn through all my savings but had I decided to hold on to my place I would be in a pretty precarious position right now.
Helloooo Whistler!
November 27th, 2009 at 12:25 pm
Dr. Dave PhD, Port-au-Prince School of Voodoo, Animal Husbandry and Economics.
That’s my guess.
November 27th, 2009 at 12:16 pm
@Dave:
“An object at rest tends to stay at rest and an object in motion tends to stay in motion with the same speed and in the same direction unless acted upon by an unbalanced force.”
That’s a perfect example of how observing many different objects can tell you something about one particular object yes. That’s exactly the kind of reasoning I’m using and you are not. Are you trying to provide me with a better analogy or something?
Or are you saying that Vancouver Real Estate bears has more in common with an inert object than it does with all the other markets in the history of the world? Is that really what you’re trying to say here? Are you trying to say that a real estate market has mass and inertia? How much mass? How did you measure it? If it hit you in the head would it hurt?
Get off it, come back when you can be serious because that’s a terrible joke.
If you want to bring your credentials onto the table you’re going to have to tell us what they are because I have a hard time taking your word on anything.
November 27th, 2009 at 12:01 pm
good one, Dave, quoting Newtons Law here. What is it that you’re trying to tell us with this, oh genius?
‘an object in motion tends to stay in motion with the same speed and in the same direction unless acted upon by an unbalanced force’
First off, you realize that there is no system without influence of a unbalanced force. So no object, at least in our universe stays in motion with the same speed and in the same direction. Please let us know if you think otherwise, maybe you got the perpetuum mobile going in you basement.
If you’re trying to make an analogy to market forces with this comment, then you should for starters realize that there is always at any time unbalancing forces at work (good or bad ones – market self or government), and certainly we have major unbalancing forces at work in Canada.
November 27th, 2009 at 11:44 am
Why does everyone here seem to think the gov’t is doing this “blindly”? They knew what they were doing in the US and they know what they are doing here.
Privatize the wealth…
…socialize the risk.
There is one world government here…now. You are just going to have to go through a tough time to want it.
Time to talk about this.
November 27th, 2009 at 10:46 am
I don’t like the metaphor because there isn’t one. You provided an analogy.
How about Newton’s First Law? An object at rest tends to stay at rest and an object in motion tends to stay in motion with the same speed and in the same direction unless acted upon by an unbalanced force.
In this case, real estate will continue to act as it has unless acted upon by an external unbalanced force. That’s basically what I have said all along.
You brought up the whole credential thing in the Garth post above. And now, you don’t like this discussion?
November 27th, 2009 at 10:37 am
To me, it is a simple fix. The government needs to scale back CMHC lending to the traditional model. The banks have already done this which is why so any new mortgages are CMHC approved. If the population can afford housing at the current price levels without the “finacial innovation” of a 5% down and 35 year amortization, then so be it. If not, prices will adjust back to the whatever level the buyers can afford with a traditional mortgage (i.e. 20% down and 25 year am).
It is bad for society as a whole to encourage the population to take on more debt than they can afford. All you have to do is look at the US for an example. It is outrageous to me that we have the benefit of seeing what loose lending standards have done in the US, Spain, Ireland, Dubai, England etc and yet our government is blindly heading down the same path.
November 27th, 2009 at 10:32 am
@Dave:
Ok, you don’t like the metaphor (because it proves you wrong).
Tell me of one instance where comparing something to it’s self gives you a better idea of where that object is headed than comparing it to similar objects that have been studied in the past. Any scientific, mathematical or related field will do, just find me a reputable source that backs you up.
An N of 1, as you ought to know if you have any education at all, is useless for comparative or predictive purposes.
Worse yet, you’re not just saying something about economics in general based on your study of a single subject you’re saying things about the future of that subject based on it’s history and ignoring the fact that every similar subject that’s had a similar history has had an outcome very different from the one you predict.
If my analogy is flawed at least explain HOW it’s flawed.
Your argument, if I may summarize, in this instance seems to simply be you saying, “I’m right and you’re wrong, I don’t need to provide facts or evidence because I’m right and you’re wrong. Aside from which you’re probably a Physics professor at SFU.”
I expect more cogent reasoning from Oscar the Grouch. But then perhaps you’re a distant cousin of his? You certainly have the appropriate attitude.
November 27th, 2009 at 10:29 am
FYI
My friend works at HSBC and they just laid off ALL of their “Premium Wealth Mgmt” staff yesterday.
I don’t think this bodes well for the ‘rich Asians will save the market’ theory….
November 27th, 2009 at 10:15 am
@bums up2:
Where’s the metaphor?
November 27th, 2009 at 10:04 am
@Drachen:
No, I can confirm that I have more business and economic education than Mr. Turner. Knowledge? Who knows. He could have me beat there. I have no way to measure or compare. I believe he is a fearmonger and a sensationalist. Usually those types know more than they let on and don’t really believe the crap they spew. If I judge him purely on his words, then well… I think he’s a dummy.
Stupid analogy. It’s not even worth responding to beyond giving you a zero on your assignment.
And what type of scientist are you professor Mark? Serious question. Your ‘intellectual chip on your shoulder’ is quite evident to me. My guess… chemistry or physics. Probably the latter. You probably work in research somewhere in Burnaby. SFU perhaps? Am I getting warm?
November 27th, 2009 at 9:46 am
(In reference to Drachen’s post, #18)
November 27th, 2009 at 9:45 am
That might be the first successful “argument-by-metaphor” in the history of the internet. Kudos!
November 27th, 2009 at 9:41 am
Images of the Bob Rennie “EVERYTHING IS GOING TO BE ALRIGHT” sign are now archived, with extracts from the BC Business Magazine article discussed here 2 months ago.
“EVERYTHING IS GOING TO BE ALRIGHT” (“Or NOT?”)
http://tinyurl.com/yg2vcyt
November 27th, 2009 at 9:40 am
I have serious doubts that prices are actually “rising”. If they are, why do I see Price Reduced and New Price signs on every corner? And why Rob Chipman’s numbers consistently show sales prices below asking, week after week? I have a sneaky suspicion that MLS changed the way “benchmark” prices are calculated to create an illusion of a slower fall. And when the fall really slowed down due to the low rates, their new formula resulted in an illusion of rising prices.
November 27th, 2009 at 9:37 am
Dave (#68 last thread)
“Who cares if he agrees with you or not? Do you really need the validation of a fearmonger?”
I suspect he has more education and far more knowledge of the way Canadian markets work than you do Dave.
“Again, I thought you didn’t believe in graphs. Strange that you are now trying to predict the future off one.”
Ok, here’s the difference, I’ll put it in an analogy so you can understand.
A man feels chest pains, he goes to see his doctor.
In the first case his Dr. is Dr. Dave. Dr. Dave looks at the man’s history and says, “Well it can’t be anything serious, you’ve never had any serious medical conditions your whole life! Go home and you’ll be fine!” (Comparing a graph to it’s self)
In the second case he sees Dr. Drachen. Dr. Drachen looks at the literature, the man’s age, his fitness level, cholesterol etc. Then he compares him to a study done on men in a similar situation and says, “Wow, good thing we caught that, you have a lot of indicators for a serious heart condition, let’s get you on medication and have your heart checked out right away!” (Comparing one graph to many similar graphs)
So… Which doctor would you rather see? Now do you see the difference between what YOU do with graphs and what I (and scientists and doctors and REAL economists and physicists etc.) do with graphs. One is SCIENCE the other is charlatanism.
November 27th, 2009 at 9:14 am
I’m sure when city makes a killing on olmypic village condos it will re-open conservatory and zoo, plus will have millions and millions left over to open new facilities. If the condos they own there are so valuable why not take out a loan to keep great family-oriented facilities open? Ahh, screw the kids.
November 27th, 2009 at 8:50 am
rp thanks for pointing out that article about the farm at stanley park and the conservatory. I just recomended those places to a friend who is taking their family to vancouver this summer. I haven’t been to the conservatory in years but it is on my list of things to do in vancouver. Its funny on one hand Vancouver is this “resort city” where everyone wants to come to. Yet anything that makes it attractive to tourists will soon be gone. Thanks housing bubble for ruining some more of the city.
November 27th, 2009 at 8:47 am
The Dubai issue illustrates that no one knows what other financial landmines exist in the economy. Fundamentally, nothing has changed since last year, but yet some people seem to think we got off almost scott free.
November 27th, 2009 at 8:31 am
@rp: I think Vancouver could use a Palm Jumeirah.
Why not, after all Dubai has a false false creek. Looks like they beat us to the real estate crash though.
November 27th, 2009 at 8:27 am
@SuperDoomsDayBear: Don’t get your hopes up, posting comments here isn’t going to change the irrational exuberance that locals have for RE. There was no shortage of bubble blogs in the US, and who paid attention to those?
The very few that benefited from the US housing bust maybe, but nobody else. Certainly not the lenders, the media or the throngs of buyers. Bubble blogs are about sharing information, not about altering the inevitable.
November 27th, 2009 at 7:59 am
@scullboy: Thanks for the update, I read the comments for anecdotes like this and the guy who’s unemployed brother was able to get a 300k CMHC mortgage. Some of the obcenities and arguments are funny, but when pissing contests take up the majority of comments it gets pretty boring.
November 27th, 2009 at 7:48 am
http://www.theatlantic.com/doc.....ity-gospel
May I humbly submit that Vancouver’s civic religion is essentially the same, without the theological trappings.
November 27th, 2009 at 4:49 am
I thought I’d cross post this comment here, in case any of you are wondering how life in another Canadian city stacks up to Vancouver
I’ve heard it said imitation is the sincerest form of flattery, therefore I’d like to take a moment to thank the poster who tried to post as me.
I think a few well chosen obscentites can shock people, which is why I post the way I do. Your average Vancouver bull is probably the most smug and complacent creature on the planet. Why not try to shock them?
We all made the points we wanted to make years ago. What’s the point of trying to change the mind of a guy like supraladyboy? Absent additional debate the only reason for posting is the shock value. Bulls like supra aren’t smart enough to engage in rational discourse anyway. They are only really good for target practice.
So far Halifax has been awesome. The restaurant scene is amazingly diverse. There aren’t any huge companies locating head offices here but the city benefits from a phenomenon I had not heard of before: nearshoring.
A lot of companies do not want to farm out jobs to places like china or India. It’s too hard to keep an eye on the quality of the work and the time difference is prohibitive. They can often realize significant cost savings while keeping quality high by sending work to a closer location.
It’s my understanding that the Maritimes have benefitted considerably from this. Several relatives are working in call centers at well paying jobs for large banks and insurance companies. The company I work for has 500 employees and handles IT infrastructure for a surprising variety of national and international companies.
While it’s true that taxes here are higher overall prices seem to be quite a bit lower. Some things like bananas are a little mote expensive but others are surprisingly cheap and if you substitute local products for imported ones then things get very cheap indeed. Local artisinal cheeses are way cheaper the say Salt Spring Island cheeses. Same for lamb and haddock (which substiutes brilliantly for halibut). Atlantic salmon isn’t as good as pacific but apparently pacific salmons about to go the way of the cod anyway.
Lobster is 5 bucks a pound and my friends were very amused at my reaction.
a friend of mine has a Kenyan husband and 2 kids. Her husband is still trying to get his career started but they were able to buy a small home not far from the place I hope to rent. They paid in the 300k range. Bear in mind this isn’t a semi detatched or a condo. It’s a sfh on a small lot.
So yeah taxes are a little higher here. Big fucking deal. Overall prices are so much lower that you still end up living a much better lifestyle.
Oh yeah and you don’t have to pay bc a monthly fee for health services, which also saves money.
Best of all, because it’s smaller it’s way easier to network which makes it a lot easier to find work. I’ve already had 2 companies offer me jobs if I decide to leave my current one.
Life here isn’t for everyone. The pace is a lot slower. Supra would absolutely hate it. There aren’t a lot of flashy cars on the streets and ostentious displays of wealth are mocked and scorned, and Maritimers have a keen ability to identify and mock the absurd. There’s a reason that “united breaks guitars” guy was so successful. Google it if you are unfamiliar. Mary Walsh just got big press for punking Sarah palin too, and let’s not forget Rick mercer punking George Bush. We are very good at getting under the skin of self important jackasses. That’s probably why I love tormenting supra so much. He’s just so irresistable.
anyway that’s life here. If any of you have questions just ask
November 27th, 2009 at 4:31 am
I think it’s really funny that middle class people on Vancouver trying to put a roof over their heads are derided as “poor” or “stupid” or “lazy” by people like Sddb. It’s as if in vancouver the sole determinant of wealth is whether or not you own a piece of real estate. That’s a pretty scary attitude when you stop and think about it. It says a lot of scary things about the psychology prevalent in the city and it says even scarier things about the underlying economy. It goes a very long way toward explaining the current buying frenzy. As far as buyers are concerned if they don’t make that purchase now they will be “poor” forever in the eyes of their families and friends.
Never mind that they just took on a massive debt they can just barely afford to service and if any little bump in the road occurs they will end up in very deep trouble.
Well, I guess that’s the new Vancouver lifestyle for you. Glad I’m out of it.
November 27th, 2009 at 2:28 am
Thanks for this info Thompson! But this does not help the bear situation in Vancouver. We need drastic price reductions atleast 50%. The more the better. Poor people deserve a chance too!
November 27th, 2009 at 1:44 am
There is no need to do that SDDB. I heard the Chinese/Taiwanese/Hongkongers are dumping their real estate investment in the US and renunciating their US citizenship, because IRS are going after their not or under-declaring their worldwide assets. They’re heading for Vancouver to the glee of CHMC et al.
November 27th, 2009 at 1:25 am
I have a great idea…let’s all post negative things about Vancouver and scare all the Stupid Bulls into selling their condos and houses. Then we all pray that the market will finally crash so all the poor and lazy people can buy a Yaletown condo or SFH. We can do it bears!
November 27th, 2009 at 1:23 am
Bail them out with oil money, need to pump more oil so oil goes down. Don’t bail them out, banks go down. Or firesale RE assets. RE goes down. One way or another, something goes down. Repeat and rinse with next Dubai. Sooner or later next Dubai is Vancouver RE. This is your economy on drugs. Any questions?
November 27th, 2009 at 1:17 am
It’s sad to hear about the conservatory and farm. You never get things like this back once they disappear. It just gets replaced with a bunch of commercial crap. Here’s to all the people complaining that parks, etc, are just a money pit: most of your cherished businesses are just money pits too – that’s why a lot of them fail each year. Why must everything follow that model? These places are interesting and unique. They’re not trying to sell you anything. And it costs each person what, 30 cents per year?
You are too cheap, Vancouver. You spend too much money on overpriced crap to fulfill selfish desires, and complain about pennies spent for the benefit of the public and the city as a whole. If they keep this up the downtown will get very depressing just as all the 5/35′ers have a little toddler they might want to take somewhere. Waterfront parks are nice and all but they are pretty boring and too cold in the wintertime. The conservatory is somewhere you could go with your kid. You’ll regret it if it disappears.
November 27th, 2009 at 12:47 am
And here I thought Dubai was building all that crazy crap with oil money. Turns out Abu Dhabi has the oil. I think Vancouver could use a Palm Jumeirah. Remember, we are a world-class city! We are competing with Dubai!
November 27th, 2009 at 12:30 am
I’m #2 I tink
November 26th, 2009 at 11:30 pm
I’m #1 I tink