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January 3rd, 2010 at 2:14 pm
“Both lenders and borrowers became convinced that house prices would only go up,” Bernanke said. “Borrowers chose, and were extended, mortgages that they could not be expected to service in the longer term. They were provided these loans on the expectation that accumulating home equity would soon allow refinancing into more sustainable mortgages. For a time, rising house prices became a self-fulfilling prophecy, but ultimately, further appreciation could not be sustained and house prices collapsed.”
http://www.marketwatch.com/sto.....2010-01-03
It’s only a matter of time.
Gravity always asserts itself, even if the Vancouver Sun says it’s different here.
January 3rd, 2010 at 1:23 pm
Feeding trolls just gives them what they want.
January 3rd, 2010 at 1:20 pm
Rich asians have small penises. That is why all asian women want to marry a white guy.
January 3rd, 2010 at 11:47 am
I want the teranet index to confirm it, but it sure looks like we’ve taken out the previous top:
http://www.yattermatters.com/r.....cember-09/
If that’s the case we’re in for one heck of a show, but most bubbles are symmetric in time. Could the declines drag out for a decade?! I might want to leave even if there is a crash this spring. As per #33, there are some very nice places in Southern California right now. 550k for a 4000sf mansion on 8 acres on the top of a hill?
January 3rd, 2010 at 11:36 am
http://www.nytimes.com/2010/01.....al.html?hp
January 3rd, 2010 at 11:30 am
A nice recap on “What is a Bubble” by Irvine Housing Blog:
http://tinyurl.com/yzzgx8t
He hits on all the usual arguments as they relate to Irvine, California, and it sure sounds familiar. My favorite excerpt:
“Of course, since housing markets are dominated by amateurs, a robust price analysis is unnecessary. [xiii] Even a ridiculous analysis, if aggressively promoted by the self-serving real estate community, provides enough emotional support to prompt the general public into buying. There is no real fundamental analysis done by the average homebuyer because so few understand the fundamental valuation of real property. Even simple concepts like comparative rental rates are ignored by bubble buyers, particularly when prices are rising dramatically and such valuation techniques look out-of-touch with the market.”
January 3rd, 2010 at 11:14 am
Well what do you know, I think Bernanke is finally saying something worth listening to. Better late than never:
http://www.theglobeandmail.com.....le1417433/
And I agree – IMHO the key to the housing bubble in the US in the previous decade – and the Canadian bubble which continues today – was not low interest rates on guaranteed debt (i.e. deposits, Treasuries) in themselves but the detachment of risk from mortgage lending which lead to mortgage rates which were out of whack with the actual risk of default.
As for “dubious mortgage practices”, how about qualifying people for payments based on today’s interest rates which everyone knows are going up, soon? Or accepting levels of down payments which are virtually certain to leave buyers underwater in the near future? Are you listening, Mr. Flaherty?
January 3rd, 2010 at 10:38 am
@doug r, I do sometimes look south and sigh. But I also take a perverse Canadian pride in being able to endure cold winters.
It would be quite a sight if Vancouver started getting door-crasher type prices on large, terraced properties with outdoor pools and water views. Not quite that crazy a fate for us, I imagine, but a guy’s gotta dream.
Since when did seeing people buy stuff at the mall constitute evidence of anything other than the mere existence of consumption in a non-specific sense?
January 3rd, 2010 at 10:34 am
@Meat Robot:
Wiped out from what? The 20somethings with their 0/40′s and 5/35′s put SFA on the table and will lose little. They will file for bankruptcy, keep whatever pension assets they have, won’t be able to borrow for 7 years (which is a good thing, not a bad thing) and should be set to get back into the market at reasonable prices when they are able to get a mortgage again.
The people who are really going to get hosed are the boomers who cosigned for their kids, or bought investment properties believing that this would give them the life of the rich and famous after retirement. They will never be able to recover and are likely to have to sell their own houses which they bought back in the 80′s at reasonable prices. Which BTW is one of the reasons I don’t see any recovery from the upcoming bust within a generation.
“Welcome to Wal-Mart”.
January 3rd, 2010 at 8:38 am
@Mold City:
“Wow. What other industries get to write ads as articles?”
All of them. If you pay enough for advertising the papers will happily accept your news release as a contribution to their fine publication… Smaller TV news shows will do the same for you if you know the right people to ask too (I presume radio as well but I don’t have any direct experience there). And of course very small newspapers are just happy to have free material to fill the pages so they don’t look too closely at bias and such, you don’t even have to pay them (in the form of advertising in their rag) to get your “story” published.
I’d say it’s a sign of the times, newspapers being forced out by internet and such but it’s been going on for decades.
January 3rd, 2010 at 1:33 am
so many suckers out there, its unbelievable ..
suckers born every minute is true…
January 3rd, 2010 at 12:38 am
Gosh Supra, did you drive your BMW or your Ferrari to the mall?
January 3rd, 2010 at 12:37 am
there seems to be a big flood of Iranians, Arabs and Australians in town. I made plenty monies blowing them all.
January 3rd, 2010 at 12:30 am
I was in metrotown today, there seems to be a big flood of Iranians, Arabs and Australians in town. I haven’t been there in ages. Today, I’ve seen reality at work as the influx of immigrants are here to stay. These aren’t your typical working class immigrants, they came into the mall in droves and walked out with a handful of new clothes and whatever they can get their hands on.
If you feel like voting this down, you are the one in denial. Just go to the damn mall yourselves and find out. Don’t listen to that “I live in a box ‘scullboy’” spew his nonsense. Now he’s in halifax and realized that he’s also priced out over there. Welcome to 2010 boys and girls.
January 2nd, 2010 at 10:49 pm
@rp: Wow. What other industries get to write ads as articles? And what was with all the runtogetherstringsofwords?
January 2nd, 2010 at 8:44 pm
There’s the crack, it’s high quality…and oh, the pipes are over there. Addictive? Of course it is! I know you can stop as soon as you’ve had too much. I’ve laid it out here for your utmost convenience, and by the way, please don’t use too much of it.
January 2nd, 2010 at 7:29 pm
@Meat Robot:
Take heart, there’s nice stuff out there that’s not frozen….
http://www.bubbleinfo.com/2009/12/30/chevy-tv/
January 2nd, 2010 at 7:07 pm
@joycer:
You know, instead of forcing illegal suites underground maybe some cities could loosen up the rules a bit. Landlords get responsibilities (and rights) and so do Tenants! Even a bit more tax revenue to pay for more even enforcement.
January 2nd, 2010 at 6:04 pm
Just keep repeating it over and over again renters. There’s no place like home there’s no place like home. Then put your fingers in your ears and say na na na na when everyone is saying that real estate only goes up. Continue to drown your sorrow in the pubs downtown you sick little losers. Meanwhile I cash your rent cheque and head to Vegas for some gambling. It’s fun being a winner. How is it being a loser… bears?
January 2nd, 2010 at 5:27 pm
“As the city continues to mature into its world-class role, increasingly desirable to prospective residents from all continents, home ownership and rental will become less affordable, especially in the urban core. Local real estatewilllikelybeincreasinglywealth driven, as opposed to income driven.”
———-
OMG. Does he really believe the crap that he writes?
January 2nd, 2010 at 5:02 pm
Buy now or be priced out forever, as Vancouver prices are now “wealth based”. Where does wealth come from? Why real estate of course
http://www.vancouversun.com/sp.....story.html
January 2nd, 2010 at 4:51 pm
Don’t worry about posters like rich asian.
I suspect rich asian is not really asian. Asians are generally modest and respectful people, rich asian sounds like a redneck who somehow fell into a fortune.
Karma does exist and if you lead your life by insulting and being disrespectful to others, life will get you back one day.
January 2nd, 2010 at 1:03 pm
Hear ye girls and boys,, I’ll give you some leads of Vancouver real estate in 2010.
These condo buyers lining up in Hanzhou are flying in to Vancouver by the plane loads n now that ADS treaty is signed between China and Canada.
http://news.backchina.com/2009.....67033.html
http://news.backchina.com/2009.....66800.html
Ming Pao’s most important news on the first of January, 2010
Lai Chang-xing declares 2010 a boom year for Vancouver real estate
http://www.mingpaovan.com/htm/...../vaa1h.htm
January 2nd, 2010 at 12:43 pm
I don’t know about you guys, but I get a real sense the reckoning is coming. The first domino to fall will be Flaherty’s curtailing of mortgages. I’m personally hoping for a 25/15, but realistically I suspect he’ll go for a 30/10. Good enough. Next domino will be BoC moving us away from the zero bound. It’s horrible to think about so many young couples starting their financial lives wiped out, but years of patience will finally start being rewarded for the prudent.
Having lived on the prairies and in the maritimes, I can agree with the commenters above. Those were great times, and you both sound very happy. For me, for better or worse, Vancouver is where my heart belongs. If the dominos somehow magically don’t fall, I guess I just will be priced out forever. C’est la vie. I’ll just figure out how to factor a lifetime of renting into my financial plan. I’m probably an oddball, but the ownership premium doesn’t have much salience for me.
And Richasian, dude, don’t be hatin’.
January 2nd, 2010 at 10:57 am
I wonder when the municipalities will start going after “landlords” with rental suites in their single family homes? A friend that teaches in Surrey at a brand new school (just opened its doors) says there is already 4 portables because the city didn’t realize just how many rentals were in the area. It would seem like a politically unpopular move, but if the city needs to raise taxes everyone would complain about that vs. raising taxes on the individuals out there that are already abusing the system. I can’t tell you how many homes I see on MLS/craigslist that say illegal/unauthorized suite right in the description. Maybe we can help speed up the correction by reporting them?
January 2nd, 2010 at 10:42 am
Now that BC Assessment is up I can see how much my friends paid for their houses. All I can say is…WTF?? It’s astonishing, where did they get the money to buy these houses?? Did they win the lottery and not tell anyone?
Oh never mind, it’s just the good old CMHC windfall-free money for all!
January 2nd, 2010 at 5:53 am
#20 @Wreckonomics: I don’t have any data to back this up, but I think a moderate uptick in sales could lead a recovery. Developers would see that and start increasing new construction. Or the price of materials and labour could drop so that new homes are much cheaper to build. Or both.
That hardly happened in Vancouver though. Prices are so far out of whack that the only thing that matters now is the interest rate. We’re in total bubble territory. It’s not logical for people to take out mortgages they can barely afford, when the average rate over their term is expected to be much higher. That’s not a calculated risk, it’s foolish, like betting the next three coin flips all come up heads.
January 2nd, 2010 at 3:04 am
@#21 – I’m sure ‘richasian’ is who he says he is
Buy Land, Sleep, Wake Up, and Make Money
http://www.chinastakes.com/200.....money.html
If you’re searching for examples, look no further than jimtan and thompson
January 2nd, 2010 at 2:04 am
Anonymous,
1. “How big?”: in height, organ-size or mental-maturity? Respectively: Average, above average, below average.
2. “Richasian is a white dude”: This tells me that you, anonymous, are a very nice person who, like most other nice people, tend to think other people are nice also.
Your rational is “He is a white guy trying to give a bad name to Asians”. I wish you were right, but you are not. He is actually a Canadian born Asian. You are welcome to prove me that he is white using facts, but not with politically correct logic as I do not subscribe to political correctness. I am also below average nice.
Best regards
arit
January 2nd, 2010 at 1:21 am
@arit:
How big are you? By the way, Richasian is a white dude.
January 2nd, 2010 at 12:22 am
@rp: Yes, but he’s talking specifically about home sales or else the reporter got it completely wrong and is misquoting him.
January 1st, 2010 at 11:37 pm
#17 @Wreckonomics: Residential investment (new home construction) is one of the first things to recover. See
http://www.calculatedriskblog......order.html
Home prices are typically another matter entirely.
January 1st, 2010 at 11:18 pm
The funny thing about the Dublin bust is that it went bust even though Dublin had huge immigration levels (everyone wants to live here argument) and it had lots of well-paid jobs (you know, those things Vancouver has virtually none of) provided by large American and Japanese companies using the country as their European foothold/base.
Clearly those silly Irish didn’t “will” prices higher by thinking positively and focusing on their Specialness.
January 1st, 2010 at 10:42 pm
@rp: Thanks for the link RP, but I need help with this:
.
Helmut Pastrick is saying that housing markets are traditionally one of the first sectors to recover after a downturn? Seriously?!?
Shouldn’t the Chief Economist of Central 1 Credit Union know that housing markets are often one of the LAST sectors of the economy to recover?
WTF? Even here in Vancouver, when house prices crashed in 1981, they didn’t start to appreciably rise until 1988 and it TOOK MORE THAN 20 YEARS for real prices to break even with the previous peak. Compare that to the TSX – it bottomed in 1982 and by 1988 it had doubled from the trough.
Look I understand how Joe-Blow doesn’t understand this stuff, they see low rates and hear that ‘real estate never goes down’ (despite all the real world examples to the contrary), but an ECONOMIST?!?
They should know better.
January 1st, 2010 at 10:10 pm
Has anyone checked the current BC Assessment?
Several people report that the assessed values in their streets have dropped.
January 1st, 2010 at 9:58 pm
Actually I had very nice New Year celebration for the first time in the last 15 years. This year I have celebrated my first New Year in my new city, Regina. New Year Eve bash started with two sets of hockey games (Fin-Swe, CZE-Rus) at the World Junior’s. Packed arena and superb quality of games – priceless. And cost – just $20 a ticket.
After the games there was New Year’s party in the next-door Exhibition Center.
Two Music Bands, lot’s of friendly people, reasonably priced drinks…fantastic feeling. I have not experienced that fuzzy New Year feeling for 15 years in Vancouver. Vancouver is totally impotent in regards to any public celebrations.
Yes it is very cold here (-26 C today) but Prairie people have very warm hearts. And you just get used it to the cold.
January 1st, 2010 at 9:47 pm
“Falling home prices appear to be behind us”
http://www.vancouversun.com/bu.....story.html
To anyone who wants to own property but can’t stomach being half a million in debt – time to move.
January 1st, 2010 at 7:26 pm
Hey RichAsian
Thanks dude, I did in fact come to terms with my financial situation. I realized costs are too high and salaries are too low in Vancouver, so I moved somewhere much, much better.
For those of you who are following my adventures, last night was amazing. I had some friends over for a great four course deal…. everything was organic and locally grown. Then we went over to another friend’s house and stayed up till 5 AM having drinks and hanging out. There’s nothing like a good ol’ fashioned Nova Scotia house party!
The best part is my friends and I can all afford large, detached placed here in Halifax, so I didn’t have to deal with any drunken douchebags in elevators or paper thin walls.
As I was walking home I admired the gorgeous blue moon and thought to myself that I would probably not have a chance to see it in Vancouver thanks to the fog and rain.
I find to my great surprise I like winters WAY better here! I like watching the snow outside the window. It’s colder but not nearly as damp. It’s far more pleasant. Who would have thought?
January 1st, 2010 at 7:19 pm
Hey richasian,
Your empty and ignorant comments fall on deaf ears.
I can tell you this. I’m not asian, have no university degree, never had family hand me money, am in the top 1 percent individual income earners in the country, under 40, work 9 to 5, maxed out on RRSP, enough savings to retire and buy a condo on. Oh yeah, I rent also.
The point here is not who can afford to own, but rather who has the intelligence not to. Apparently we all know which category you fall in.
January 1st, 2010 at 6:43 pm
@Anonymous: Thanks for the video, anon. Why can’t we have any fun in the greatest place on earth????
Here I am still dealing with idiotic landlords waiting for the bust.
After the O limp ics are finished, who will bet that the msm will start chanting — just wait everyone — they are going to come — they are just packing up there things — and the nonsense will drag on….
Happy New Year Everyone!! I hope you hang in there during 2010 when the curtain is finally drawn on this charade. Hopefully you’ll still have a sack of cash and laugh your way to prosperity — if only you can hang on to your jobs!
Thanks again Pope!
January 1st, 2010 at 5:08 pm
Watch world cities celebrated 2010 New Year
http://www.youtube.com/watch?v.....r_embedded
http://www.youtube.com/watch?v=bIn3qg-6R-k
Last night I heard faint isolated fire crackers in my hood or was that ‘richasian’ taking out a druglord in a disputed territory.
January 1st, 2010 at 4:08 pm
Richasian,
“Maybe this year you’ll finally come to grips with your financial situation.”
My financial situation is just fine, thank you. I have cash in the bank, which is a whole lot more than I can say for my friends who recently purchased homes. What do they have, oh right, a mountain of mortgage debt, as well as credit card debt from being suckered into furnishing the new house. And if interest rates go up as they’re predicted to, they’re screwed.
Thanks for being so concerned though!
January 1st, 2010 at 3:53 pm
richasian? Unlikely. Little dogs bark when they’re terrified.
January 1st, 2010 at 3:14 pm
COWARD-RichAsian,
2010 will be the year where your Real Estate Agent Card will be your demise, as you run out of greater fools.
The lease on the Mercedes will force you to provide ramen to your gold digger wife, who will dump you for a man with a visible organ.
Keep us updated, someone here may have a job for you, for 8 bucks an hour.
Best regards,
arit
January 1st, 2010 at 2:54 pm
Happy new year you scum sucking renters!!!!!!! I hope 2010 brings continued misery as you watch from the sidelines in your crappy rental! Maybe this year you’ll finally come to grips with your financial situation.
January 1st, 2010 at 12:57 pm
Happy New Year All!
Here’s to a future that includes sensible property values and a life lesson to speculators about putting all your eggs in one basket.
..until the next bubble comes along.
January 1st, 2010 at 12:03 pm
That’s one artistic statement and visual impact from our local artist. I’ll be down there soon to snap photos.
Happy New Year to The Pope and all. And thanks for letting me vent here once in a while to keep my sanity going.
January 1st, 2010 at 11:57 am
from the Seattle article:
“Oversupply of rentals
Insiders expect even fewer new starts in 2010. More than 5,000 new apartments were completed in King, Snohomish and Pierce counties this year, Gardner said, “so there’s going to be an oversupply.”
And when the market does recover, he added, landlords will meet any demand for new condos by converting apartment buildings. “We are not building any more condos. Period.”
……….
Jim DeLisle, a University of Washington professor of real-estate studies, said he fears a 40 to 60 percent drop in commercial real-estate values from their 2007 peaks.
…………
Still, the big picture is less than rosy. Gardner, the economist, said most of his work a few years ago was for developers exploring the feasibility of potential projects.
Now, he said, his clients are mostly lawyers and banks, looking for ways to salvage financially troubled properties: “We haven’t done any feasibility work in a year.”
Commercial real estate won’t recover until after the rest of the economy does, insiders agree. “We need jobs to get this thing moving again,” said Opus Northwest’s Parsons.
King and Snohomish counties have lost nearly 100,000 jobs since employment peaked in early 2008. It would take at least 36,000 new ones just to fill 90 percent of Seattle’s vacant office space, Parsons estimates — and the city accounts for only half the region’s vacant space.
………
But he doesn’t expect commercial real estate will return to anything approaching normal until 2014.
The outlook has dimmed considerably since early 2008, when the recession hadn’t hit Seattle hard yet. Many insisted then that Seattle’s real-estate market would piggyback on a strong local economy and escape the downturn relatively unscathed.
“About a year and a half ago, we thought we were different,” DeLisle told one recent forum. “Nobody is really different.”"
“Nobody is really different.”
“Nobody is really different.”
“Nobody is really different.”
“Nobody is really different.”
January 1st, 2010 at 10:23 am
Art and RE?
We’ve thus far seen Bob Rennie’s installation of Martin Creed’s “EVERYTHING IS GOING TO BE ALRIGHT” on an office building in Gastown possibly miss the mark.
Now comes a DIRECT HIT from artist Reece Terris, whose work ‘The Western Front Front – Another False Front’ subversively comments on the Vancouver RE Bubble, and wittily uses Construction as its medium.
For images and discussion:
http://tinyurl.com/ykrm7ve
January 1st, 2010 at 12:53 am
Already the new year here. Happy new year. Good riddance to 2009. The five bubbles to burst in 2010 article was interesting and it got me thinking. This year was the one that summed up the decade. We knew the economy was fake and the printing of money fueled massive bubbles in real estate and possibly comodities. and in 2008 we learned how precarious our situation was, but what happened in 2009. How on earth did they manage to fool people into believing everything was fine again. Maybe I am looking at things through the prism of canadian real estate and the tsx. But I would have to say this was the year where nothing seemed to be real. The markets, the news reporting we are out of the recession. I would call this the worst year of the decade as there was no excuse. After 2008 there should be no one left who should be saying we coudln’t see this coming. But sadly 2010 I believe is the year we will hear the phrase “no one saw this coming the most”
Happy new year