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April 20th, 2010 at 12:31 am
Mar 1, 2010 = 12255
Mar 2, 2010 = 12324
Mar 3, 2010 = 12459
Mar 4, 2010 = 12670
Mar 5, 2010 = 12775
Mar 8, 2010 = 13019
Mar 9, 2010 = 13244
Mar 10, 2010 = 13439
Mar 11, 2010 = 13551
Mar 12, 2010 = 13609
Mar 15, 2010 = 13755
Mar 16, 2010 = 13779
Mar 17, 2010 = 13870
Mar 18, 2010 = 14042
Mar 19, 2010 = 14103
Mar 22,2010 = 14258
Mar 23, 2010 = 14312
Mar 24, 2010 = 14322
Mar 25, 2010 = 14446
Mar 26, 2010 = 14558
Mar 29, 2010 = 14635
Mar 30, 2010 = 14721
Mar 31, 2010 = 14679
Apr 1, 2010 = 14,667
Apr 6, 2010 = 14,832
Apr 7, 2010 = 14,915
Apr 8, 2010 = 15,221
Apr 9, 2010 = 15,399
Apr 12, 2010 = 15,462
Apr 13, 2010 = 15,595
Apr 14, 2010 = 15,779
Apr 15, 2010 = 15,858
Apr 16, 2010 = 15,822
Apr 19, 2010 = 16,088
April 20th, 2010 at 12:06 am
Well, you can’t steal a march on Garth Turners blog tody, as usual he’s right on the money. The timing of a macro is hard to pin down and market cycles, especially those held up by a sleazy government incentive program can have a way of deceiving the impatient and the young. But macro trends never lie and always come around, ain’t never been one fail.
My antique crystal balls are telling me that we’re in for a nice ride. It is not only in Canada that rates are rising, they are in China as well. A 10% drop in prices will wipe out 90% of the specuvetors.
There an old saying in the RE trade “First and fastest , last and least.” meaning that if you take the urban center as the ‘epicenter’ of a market you have the sharpest spikes in price at the center but also the most extreme drops in price when the market tanks. The market farther out of the price and proximity rings will react much more slowly, last to rise and less volitile in price fluctuations.
However I am goinf to go out on a limb and say the dreaded phrase “This time it’s differant”. Why? Because in a traditional market the buyers were proving up a higher percentage of the overall equity in the fringe markets and lowering the risk, where as this time the borrowing has been much more frenzied and misunderstood throughout the spectrum this time and now EVERYBODY has taken out unsustainable mortgages which makes them ALL speculative. Lets face it …5% down is not a downpayment.
I see major moves down in all markets as intrest rates rise. Look for another round of dead duck condo flippers very soon.
April 20th, 2010 at 12:05 am
@Don Lapre:
No.
I don’t think so, but even if there were, that is not the same as shorting the market. Index options trading is making a bet with someone about the future direction of the market. IOW you would have to find someone to bet with who thinks the market is going up. With stocks you can do that because the underlying asset is liquid in both the long and short directions so the option can track the asset. With RE you can’t. Everyone who would be interested in trading such options in RE would likely be a bear, so there would be no bulls to bet against.
April 19th, 2010 at 11:48 pm
ReductiMat:
I agree but the main reason why rents have been so low around town in relation to what housing costs are is due to the constant building that has gone on for the past 10 years.
Take the supply away, demand will go up. Rent prices are like everything else, higher demand, higher prices.
Of course, it is almost impossible to say with any certainty, what the housing supply actually is because no one has taken the time to make serious efforts at finding out. I agree, if there is an actual huge glut of overbuilding that has occured than you will of course be correct.
My own anecdotal evidence is that most of the buildings in DT/FC/WE and CH are mostly full with the exception of the higher priced units >1M. Most people in the rental pool are looking to rent basic 1/1 or 2/2 that are moderately priced in the < 2k/month price range.
Lastly, I do not expect that many folks here in Canada will default on their loans as we did not have the lending practices here that they did in the USA. Most homeowners will sit still that will only contribute to further stagnation in the markets, and not just real estate.
April 19th, 2010 at 11:34 pm
@vanhattan:
Vanhattan, people can’t get a loan to pay for rent. Unless people start making more money, rent will not go up.
And you needn’t worry about vacant rentals. We should have the next ten to fifteen years covered with this recent build-up.
April 19th, 2010 at 11:13 pm
I am a long time reader of this blog but never took the time to post until today.
I have never quite understood why so many people get so giddy when the market seems to be headed down? For myself, a homeowner, I am more than happy to see the real estate scene here stablize but to crash? Not sure why so many want it to crash? I have plenty of friends who live in the USA and trust me, the housing market crash has not done any of them any good, realestate owner or renter. All are doing much worse than they were several years ago.
Anyways, I think the new mortgage rules are a mixed bag of good and not so good but I really don’t think that the unintended consequences of these new rules have been thought out very well.
A few thoughts;
If real estate investors (as defined by their RE not being occupied by the owner)are driven out of the market, and it looks like they will be, new construction will surely take a huge hit.
I fully expect RE prices to decline somewhat over the next year or two…..but once the market absorbs all the ‘extra’ housing units available, which is anybodys guess, housing demand will start to pick up, and due to lack of new housing being built in the next few years, will once again drive up RE prices. If this holds true then rental prices will also start to increase. I say this because there is currently, and hasn’t been to my knowledge any real incentive for rental housing to be built by large developers. The proof is that there has not been any large rental buildings put up in decades and the private sector has provided nearly all new housing stock in this area.
So yes, prices are way to high and they will start to come down but eventually they will head back up due to lack of supply. The main difference I see with the next upward movement in prices….say in about 3 years, is that unlike today, rental prices will also move up, perhaps even more than housing prices.
The bottom line is that the fed surly has popped this bubble, but doubt they have seriously considered the consequences of their actions say 3 years up the road.
I also personally believe that this economy is entirely way too fragile for the fed to stomp on it in such a severe way. With increased interest rates, the CAD will start trading much higher than it currently is and there goes the rest of the exports that are already considerably down. Also, Canada is producing far too few jobs as it needs to create to maintain the employment/un at a constant or lowering percentage….
My job is not in anyway connected with the ‘real economy’ however most peoples jobs and careers are. I just hope all the bears in the room are confident that they can ride out potential unemployment if the housing bubble goes crash instead of slowly letting off steam and if it brings down the rest of the fragile enconomy down with it.
April 19th, 2010 at 11:10 pm
@Bystander: Thanks but i don’t drink.however, you keep your drink and your scores,those are the only few items you will ever take away from this forum.
April 19th, 2010 at 11:03 pm
@Kite towards ground:
No need to be rude, have a drink on me, tonite. There will be plenty of time ahead of us for blood, sweat & tears and maybe something else…
April 19th, 2010 at 10:54 pm
@VHB:
“We”
Are you even Vancouverites?
there is no mother fucker on earth ever born to put his city in pain,however it’s not even 11 o clock yet, so hold on to your breath.
April 19th, 2010 at 10:51 pm
@VHB:
Great, let’s drink to it. Cheers!
April 19th, 2010 at 10:49 pm
Is there any practical way to short the canadian housing market? Are there any options trading based on the teranet indices?
April 19th, 2010 at 10:45 pm
@Bystander: Yes. The bubble popped at precisely 8:01am this morning, when Rob Chipman asked the gimp Aaron to fetch his messages and Aaron said, “But uncle, there aren’t any!”
The sound of the burst bounced from Hastings and Boundary in a northward direction until it hit Mount Seymour. It reverberated, growing in strenght. Now headed back south, the growing wave of sound rebounded off the ‘W’ building in gastown, bidding a hasty retreat northward. Growing, ever growing in magnitude. Again North! It was a deafening roar. The gentle forest creatures in the approaches to Grouse looked up from their morning activities to see what was coming. They shuddered as it passed and bounced off the mountain and again headed South. The crescendo was deafening. Off the Shangri-La it went and returned north, quickening and gathering in strength. From there, to Cypress, and from there passed quickly over West Van across English Bay toward the promised land–Van West. Across spanish banks, up the hill, through Point Grey it roared. Rippling across Kerrisdale; racing to southlands and marpole; passing quickly over the airport and from there out to sea and then . . . .
silence
April 19th, 2010 at 10:45 pm
Conservatively speaking, lets just say the market only crash by 40%, how many people will be in negative equity?
April 19th, 2010 at 10:44 pm
From Garth Turner at greaterfool.ca:
[regarding the hidden cost of a $600,000 mortgage with a prime VRM]
“At 2.25% (on a 25-year amortization), over five years you will pay $62,076 interest on this mortgage. At 5%, the interest payable mushrooms to $140,450. So, while mortgage rates hike less than 3%, the interest burden soars by 126%, costing an additional $15,674 per year.”
—
Remember that Elvis Costello song ’5 Gears In Reverse’ ?
April 19th, 2010 at 10:43 pm
@Best place on meth: Did he pee in your coffee?
April 19th, 2010 at 10:38 pm
@VHB:
Bravo! lol, great post.
April 19th, 2010 at 10:33 pm
Long way to base camp!
April 19th, 2010 at 10:32 pm
http://www.russianclimb.com/ma.....summit.jpg
April 19th, 2010 at 10:32 pm
@VHB:
Are you saying the housing bubble actually popped today as we speak?
April 19th, 2010 at 10:23 pm
Ladies and Gentleman. We have just witnessed the most exuberant blow off top in Vancouver housing history.
In the US, things kinda just whimpered to a close in 2006. Listings grew; sales tapered off. Eventually, prices started to drop.
But, there was no single day; no month when you said THIS IS IT.
We, on the other hand, have just experienced a concisely identifiable top.
April 19th.
We shall remember this day. For it is on this day that the citizens of Vancouver have begun to take their city back from the pumpers, the speculators, and the charlatans.
As of today, Vancouver again will have a future.
But first, there must be pain. Let the pain begin so that we may live again!
April 19th, 2010 at 10:22 pm
Well said, Danielle Park, CFA, LLB
A rational voice in a largely irrational world.
http://www.cbc.ca/thecurrent/2.....2010.html#
Clip #2
April 19th, 2010 at 10:19 pm
10:18pm UPDATE
16,088
April 19th, 2010 at 10:17 pm
@Anonymous:
Chimpman is a fucking idiot.
April 19th, 2010 at 10:13 pm
Woah, I feel like I woke up in ’08. Paul/Inventory, you guys rock!
I was on the elevator a few days ago and a girl I work with got in on the next floor. Her husband also used to work with us and is a huuuuuge hockey fan, so I asked her if they watched the game (the one where the canucks won, sigh…) and she said “No we didn’t! We were busy looking for a condo to buy!” I was stunned, I didn’t think anything could stop him from watching playoff hockey. Today I found out they bought a place over the weekend, just before the deadline. WHEW!!!
April 19th, 2010 at 9:59 pm
Jeremy Grantham – “If they do not go back to the old trend line price multiple of family income, which is what should drive house prices, it will be the first time in history that such a bubble has not broken.”
Extracts from FT.com interview:
http://wp.me/pcq1o-KA
April 19th, 2010 at 9:51 pm
@Anonymous: Yes, calling robbie a chimp is insulting chimps. Message taken. hahaha.
April 19th, 2010 at 9:50 pm
327 listings make the canucks loss almost tolerable.
We’l get em next game with 527 listings.
April 19th, 2010 at 9:50 pm
@paulb fan: oops, pls ignore my grammar. Its all in excitement you see. LOL.
April 19th, 2010 at 9:49 pm
@paulb: Hi Paul, you are the “Bear God”. Dont pay attention to assholes. Their desperation is showing up. Did you notice the change in Tommy’s tone on RET. Now he has brought up a property which he has not sold in last 4 months to show that he is being fair and rationale.
Unlike them, nobody is “uber bear” here as suggested by those of the clowns at RET. We are bunch of rational people and so we remain.
April 19th, 2010 at 9:46 pm
I think sales are still gonna remain high till the end of the month, we haven’t run out of all the retarded FTB’s yet.
All the specuvestor’s are dumping their inventory right now.
April 19th, 2010 at 9:45 pm
Paulb fan, please don’t insult chimps.
April 19th, 2010 at 9:42 pm
@Anonymous: Chipman is a chimp pretending to be human. So dont bother.
April 19th, 2010 at 9:42 pm
yeaah jesse paulb ahead of his time! paulb looking good nice haircut! maybe cut it as chippendale!
April 19th, 2010 at 9:36 pm
“Unfortunately I don’t have good numbers for the bears tonight. In fact, V-Dog’s words should be ringing in more than a few ears”
According to Chipman, it’s bad news for the bears.
can anyone square this circle please.
April 19th, 2010 at 9:35 pm
“Who is going to pay his bills till 14?
A just question for ALL Realtors.
April 19th, 2010 at 9:32 pm
oh yeah nutslaps! larry working paulb turf! paulb dont give up next leg coming! some nutslap hire u in 2014! you have car?
April 19th, 2010 at 9:29 pm
kite your a total loser
April 19th, 2010 at 9:28 pm
“paulb, I’d making you my realtor in 2014. We’ll vulch together, in style.’
Who is going to pay his bills till 14 ?
April 19th, 2010 at 9:27 pm
So, how much will this do in the economy?
Consumer sentiment has in large part been driven by the wealth effect of appreciating housing. Give the media around a month to catch on and then when the average joe figures out that their place isn’t worth as much as they thought, people will slow down their spending – big time.
Better hope that our resource industries start doing well, or the current deficit isn’t going to seem like much.
Unfortunately for the politicians, voter sentiment follows consumer sentiment, so watch out there too.
April 19th, 2010 at 9:24 pm
Today I met this guy who just bought a condo and says to me:”I am glad I bought a month ago, it was a really good time to buy, unlike now”
?!?!?!?!??!
April 19th, 2010 at 9:23 pm
Girlbear,
Any change in listing price and sold price stand for nothing as long it is different than market price.Imagine a units assessment value is $100,000.Once owner is ready to sell he will call the listing realtor.The listing realtor will assess the unit market value at $150,000.Owner is agree to sell on that prices but did not recieve enough response compare to other units.Listing realtor will approch back to sellers to change the prices.Perticular unit will process through same type of provision at the time of offers, buyers and sellers will throw those changing offers on each other to setup final prices.Even if unit sell for $100,005. unit prices are up despite 50k down from the listing prices.You can check any realtors stats there is always a margin of minus 1-2% in listing vs sold prices but avarage prices are up in monthly rebgv stats.
Larry is looking for response since Paulb is back,Larry got oppertunity in Paulb’s absence.Larry is just trying to impress bears and buyers but what about Paul? Real estate board and their team always at work!Run buddy run!
April 19th, 2010 at 9:17 pm
as much as i’m enjoying this, i still think we will see some very solid sales numbers in the days ahead
sip your celebration drinks, don’t start pounding the crystal just yet – but keep it on ice, the real party starts at 20,000!
April 19th, 2010 at 9:17 pm
Wow is no insight’s name ever bang on?
This clowns messages keep getting more nasty as the days go by. He must feel pretty threatened by what I have posted. Pathetic.
April 19th, 2010 at 9:13 pm
Can you say good bye to future demand? Bye, Bye!
How about Bye, Bye to pre-sale line ups? Bye, Bye!
What about all the specu-pigs? Bye, Bye!
F##k’n stupid people rushing to buy right now! WTF.
April 19th, 2010 at 9:10 pm
paulb, I’d making you my realtor in 2014. We’ll vulch together, in style.
April 19th, 2010 at 9:07 pm
@No Insight
When one doesn’t like the message…shoot the messenger.
April 19th, 2010 at 8:58 pm
@No Insight:
disgruntled realtor?? I love realtors “cat fights”.
April 19th, 2010 at 8:52 pm
Now I just watch from the comfort of my rental unit ($780 a month new condo) that sold for 280k.
…but if you run into my landlord tell him I’m paying his mortgage off for him.
I sold my paid off townhouse (similar market value as the place I’m renting)and with my money invested I will rent mortgage free (assuming 3% raise annually in rent price) for the rest of my life with a fair amount of extra monthly cash flow.
LOL it seems backward…but in order to get cash flow from a property, you have to sell yours and take the equity out. Then you can invest in a favorable investment and rent for much less, or on the flip side, you could rent a much nicer home with the earnings from the same equity, even on an after-tax basis.
April 19th, 2010 at 8:50 pm
Van. real estate: stick a fork in it..it’s done!
April 19th, 2010 at 8:41 pm
@No Insight: I’m all for free speech but that type of comment has no place on this blog.
I’m sorry you’re so angry. Where’s that smile? I know you can smile! Come join the party at the 16K party lounge! Everyone’s invited and there’s no cover charge!