Friday April 16th Free-for-all

Well, it’s the last weekend before the new CMHC rules come into effect, anyone out there going to any open houses?  Lets do our regular end of the week news round-up and open topic economic discussion post.  Here are a few recent stories to kick things off:

-Housing may have peaked
-Home sellers rush to market in record numbers
-Sharp increase in number of BC mortgages in arrears
-Canadian sales, listings and prices all rise in March
-House listings hit March Record
-The big one: earthquake or RE market collapse?
-Canada housing bubble: Its not different this time
-Frustrated couples crackshack quiz targets million$ homes
-Vancouver spent more than $550 million on winter games
-James Chanos on Chinese real estate bubble.
-US foreclosures surge, on pace for 1 million this year
-S.E.C. accuses Goldman Sachs of fraud

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

308 Responses to “Friday April 16th Free-for-all”

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    Starving Artist Says:
    1

    Last! (reverse order now…)

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    patriotz patriotz Says:
    2

    Busiest March ever for Canadian housing listings

    Homeowners across the country are frantically planting “for sale” signs on their lawns this spring, hoping to sell at the top of the market before higher rates and tougher mortgage qualification rules temper the housing sector's incredible recovery.

    A wave of supply hit Canada's housing market in March, with nearly 100,000 new listings. It was the busiest March on record for listings, according to the Canadian Real Estate Association (CREA).

    The data suggest buyers entered the market to sidestep tougher mortgage qualification requirements that went into effect on Monday, as well as to avoid new taxes being introduced in Ontario and British Columbia this summer.

    All hands abandon ship! ABANDON SHIP!

    Uh – where are the lifeboats?

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    patriotz patriotz Says:
    3

    From the otherwise worthwhile "Canada's Housing Bubble: It's Not Different This Time":

    Likewise, for Vancouver or other Canadian cities, it cannot be said that there is a real estate bubble just because prices have run up

    Wrong. If you have a substantial runup in real prices with declining real rents, it's a bubble.

    Period.

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    Keeping an Eye on th Says:
    4

    Open letter to Mark Carney and Jim Flaherty:

    You are both azzholes.

    Greenspan can claim he was senile, i.e as per Encarta:

    forgetful, confused, or otherwise mentally less acute in later life

    What are your excuses?

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    Kite towards moon Says:
    5

    Canada avoids worst of the Great Recession: StatsCan

    Vancouver, which saw prices increase by 22% in the last year,to continue to have strong growth:CeoPoll

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    superboomtime Says:
    6

    Final weekend before huge rush come into market. Good time to buy before hot money floods in bear. Everybody know that new mortgage rule like throwing match on gas can. New rule make FTB and investor more confident in market bear.

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    Wreckonomics Says:
    7

    @patriotz: Thats what he's saying. You can't simply declare a bubble because prices rise, as long as incomes and rents are rising at the same rate.

    As he also points out, Vancouver is way out of sync with economic fundamentals making it the bubbliest of the bubble markets. The only way to make money on Vancouver realestate is to find a more foolish gambler to sell too (or be the middleman in the transaction).

    Like or Dislike: Thumb up 0 Thumb down 0

    @patriotz:

    Bubbles don't last for 25 years. Real rents have been declining for about that long and real prices have been rising for even longer. Some bubble.

    Like or Dislike: Thumb up 0 Thumb down 0

    patriotz patriotz Says:
    9

    @Wreckonomics:

    Thats what he’s saying. You can’t simply declare a bubble because prices rise, as long as incomes and rents are rising at the same rate.

    Well no that's not what he's saying.

    Likewise, for Vancouver or other Canadian cities, it cannot be said that there is a real estate bubble just because prices have run up. That logic is linear and simplistic.That is too easy a hurdle to earn the bubble label. Rather, it is the herd mentality and the belief that somehow “this time is different.”

    He's saying that to declare a bubble you have to look at "mentality". Well no you don't. The numbers speak for themselves, i.e. the "linear and simplistic" logic is all you need. Mentality is an explanation for buyer behaviour underlying a bubble, not a criterion for determining one.

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    Morning everyone, Pope I hope you don't mind but I created a blog post last night and want to share it with everyone here. Back later with some numbers. Come on 16k!!!

    This is the link:

    http://paul-northvancouverhomes.blogspot.com/2010

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    sluggo Says:
    11

    While most of my speck builder buddies got out of Dodge early in 2007, a couple of them started new projects last fall in a last ditch effort to catch some of those low mortgage suckers.

    Now, these guys aren't idiots. Their livelyhood depends on trying to anticipate economic trends, demographics, and interest rates. Well let me tell you, with rates starting to shoot up, they're absolutely scared s..tless, and working 24/7 in a mad scramble to complete before the market gets flooded with new listings.

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    Honkytonk Man Says:
    12

    My realtor buddies tell me that the market is HOT HOT HOT!

    Too many buyers to handle even if they worked 24/7.

    HA HAw HAw HAW

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    Don Lapre Says:
    13

    Thirteenth!!!!

    Like or Dislike: Thumb up 0 Thumb down 0

    @paulb:

    Paulb, in your blog you said, "The interview with Will Dunning (mortgage salesman) really irked me when Will blatantly denied a real estate bubble by concluding that since there has been no speculation (funny because Finance Minister Jim Flaherty disagrees) and there has been no risky lending (Canadian subprime problem) there is no bubble, thus we can all chill out."

    Dave – Obviously you disagree in that you think speculation and risky lending has been occurring. Can you point me to some data to support it?

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    joycer Says:
    15

    @Dave:

    Don't waste your time paulb, he's been here long enough to read the posts that would answer his challenge to you… just trolling!

    Your time is much better spent posting the daily stats (THANKS!!!).

    Here is some troll therapy for the bears. If we hit 16K today we're going to need it!
    http://www.youtube.com/watch?v=FMEe7JqBgvg

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    For Dave: Survey by Remax
    http://www.canada.com/nationalpost/financialpost/

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    @paulb:

    How is that speculation? You can't call every investor a speculator. I can't believe Re-Max would print that. Got anything else?

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    Boombust Says:
    18

    I am STUNNED by the number of auto-update listings flooding into my mailbox from my VOW realtor.

    Yesterday, I received 20 and last night, I received another 21…all for SFH in the Tri-cities area.

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    patriotz patriotz Says:
    19

    @Dave:

    You can’t call every investor a speculator.

    An investor with negative cash flow is a speculator by definition, and every investor in Vancouver today has negative cash flow, when opportunity cost on the down payment is included (and even when it isn't for 90%+ of them).

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    bums up2 Says:
    20

    LOL Dave.

    "Got any data to support that?"

    "Whoa whoa whoa I mean got any data I'll like?"

    Yes, one could argue that indeed every investor in Vancouver is a speculator. Rents being low as they are (relative to prices) means properties have negative cap rate. The only "investors" willing to touch that are going to be speculators hoping for price appreciation / greater fools to recover that loss.

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    Paul Kedrosky, on his site 'Infectious Greed' calls us

    'Vancouver: The Last of the Really Great Real Estate Bubbles'

    http://paul.kedrosky.com/archives/2010/04/vancouv

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    @patriotz:

    Opportunity costs have nothing to do with it. You have to evaluate each investment on its own.

    Lot's of investors buy with negative cash flow. They know that rents will catch up and they know they are building equity. I know lots of people who plan to own for a long time even though they have negative cash flow at the start.

    Your definition is faulty. Try again.

    My definition of a speculator is somebody who buys and sells within a short period of time, or somebody who buys a block of pre-sales with the goal of selling later. The first metric is tracked, but it only works in hindsight. The second metric isn't measured, but if it was, it would be a good gauge of speculation. I do know that some new developments have high levels of speculation while others do not.

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    kabloona Says:
    23

    paulb:

    Many thanks for getting your website cranked-up again! Good graphs and of course the pics of the $1+ million "mansions" are priceless…..

    Welcome back…. :-)

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    Dave:

    Opportunity costs have nothing to do with it. You have to evaluate each investment on its own.

    What the hell does that even mean?

    Come on Dave, you're not even funny anymore.

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    @kabloona:

    Thanks, feel free to post any comments and/or critiques on my blog if you like. I miss the glory days. lol

    http://paul-northvancouverhomes.blogspot.com/

    And… they're off!

    New Listings 4

    Price Changes 5

    Sold Listings 3

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    Anonymous Says:
    26

    @mino4: If you have nothing constructive to say just go for walk outside.

    Like or Dislike: Thumb up 0 Thumb down 0

    Wreckonomics Says:
    27

    @Dave: I think you just had your ass handed to you on a plate. You know there's a problem when the people selling the product say the market is driven by speculation.

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    Anonymous Says:
    28

    If there is no bubble, or prices never go down, why are there so many sellers right now? (and there will be even more) Wouldn't investors want to hold on? The mentality is definitely changing… FAST.

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    @bums up2: Agree.

    One can argue that ALL purchases in Vancouver since 2005 ?, 2003 ??, have contained a spirit speculation in that a growing percentage of buyers would NOT have bought if they knew that prices would stagnate or simply increase at the rate of inflation. This also applies to seemingly conservative purchases of primary residences.

    Everybody has been speculating on unrealistic ongoing price increases.

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    Gordon C. Says:
    30

    A bubble is irrational behavior by purchasers. If the sales to new listings ratio is showing a balance between supply and demand, but prices continue to escalate over several economic quarters that would be a bubble.

    An investor will buy real estate when the rents do not cover the operating and mortgage costs as long as there is a reasonable expectation of increasing rents and/or through efficacy of management to reduce costs. This is a far better way to make an informed decision to purchase than to use the price/rent ratio – which would be like using a meat cleaver to cut a cake. In most cases, it will work for homogeneous properties, its just not precise enough. The price/rent ratio will not work for waterfront, acreage, properties with surplus land, properties with views or properties affected by adverse influences, like a highway.

    Not all bubbles burst immediately. In my opinion, Vancouver has had a series of "bubbles" but either costs have decreased or rents increased to stave off a collapse in the prices.

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    paulb fan Says:
    31

    @paulb: yayyyyyyyyy, paulb is back, paulb is back. I am doing crazy dance on streets. The fun begins. Quick guys, somebody start with those monthly projections – KopyrightKlepto, Canadian anybody?

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    Absinthe Says:
    32

    @Dave: "They know that rents will catch up".

    Do they? Inflation adjusted rents have been pretty steady. In fact, you just suggested in comment #8 that rents have been declining, yes?

    Are you suggesting that RE in this climate is a non-speculative investment because in 10 years, an investor might be "breaking even" in terms of rent paying their mortgage?

    Imagine a universe where the value of the house is guaranteed to go down or even simply not appreciate in nominal terms. Does it still make sense as an investment?

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    VRENGD Says:
    33

    Another "bubble or not debate"? That debate is over. The collapse is forming right now. A listings explosion is always the prelude to a price implosion. Everyone knows it.

    The question now is what are the possibilities for government intervention to stop the collapse once it gathers steam? There will be a lot of screaming from the RE industry and speculators once prices decline about 20%. What could the government do to pump the market again?

    Possible government intervension is the only risk to the bear case.

    I for one think that the government is out of bullets and can't to a darn thing. Anyone have a contrary view?

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    Linked from the Vancouver Sun front page:

    http://www.househunting.ca/buying-homes/story.htm

    Last Gasp for Housing

    "But there are indications the market has reached the peak with nowhere to go but down."

    I hope the devil has a nice pair of ice skates.

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    Royce McCutcheon Says:
    35

    Could someone please point me to the site where trends in rent numbers for Vancouver (and/or the Lower Mainland) are posted? I'm pretty sure I've seen it posted before, but I can't recall where exactly. Much appreciated.

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    reapaul Says:
    36

    The propaganda campaign goes on in Canada only DELAYING the inevitable.

    The wave of ALT-A's in the US is starting to build. The numbers eclipse the Sub Primes by a factor of 3-1.

    http://news.yahoo.com/s/ap/20100415/ap_on_bi_ge/u

    Fed tells us 'don't worry, it's only debt'. I'm sure glad I don't have any. Bwahahahahahahahahaha.

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    Loonie down 1.25% today;

    Possibility of a top in the general markets.

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    Boombust Says:
    38

    Does anyone have any idea how much HELOC money has been pulled over the past few years?

    This was a bellweather sign for the US market…but I have never seen stats for Canada.

    Further to my post at #19, I have never seen so many listings sent to me. Not even in 2008 when inventories skyrocketed.

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    Gordon C. Says:
    39

    It appears that people on this blog do not like speculators.

    Why?

    Do speculators not have spouses, children, mothers and fathers. If you cut a speculator will they not bleed.

    If it were not for speculators who invested in untested technologies where would our society be? Speculators take on a bigger risk than investors, so why should they not be compensated more? And praise the speculator, for without them who would be taking the big loss coming in real estate.

    I say praise the speculator, give onto him your wine and fruit of your loins. And beware of the false profits who bedazzle us and lure us with rents, prices and bubbles as they seek to entrap us in the bowels of investordom. For to speculate is to reach out and grasp, what to the investor, is the unattainable.

    Go forth – and speculate

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    Strataman Strataman Says:
    40

    @VRENGD: Yeh I have a contrary view unfortunately, being very much a bear. I think if things go South the government will use our tax dollars (the frugal taxpayer) by saying something like this " we will allow $20,000 tax deduction for first time buyers" or something to that effect. And guess what? Not a one political party will argue! Do not underestimate the one goal of politics, election! That applies to both the governing party AND the opposition parties.

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    Kite towards moon Says:
    41

    "Possible government intervension is the only risk to the bear case."

    what about listings collapse that is above to begun?

    Hey bears,

    Do not rely on listing status,realtors are busy selling their listings,They will start removing that sold junk begining October 1,2010.

    On otherside:Goldman Such draged down entire stock market now stock investor have no other place or cap to believe other than Vancouver real estate,Virtually poised to never go down: VRENGD.

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    Gordon C

    I'm all for speculators too … just don't bail them out or help them with my taxpayer money like we are doing now. Just sayin.

    Like or Dislike: Thumb up 0 Thumb down 0

    squidly77 Says:
    43

    Vancouverites read this https://secure.preschoicefinancial.ca/cgi-bin/Web

    It looks like its 10% down now.

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    @Strataman: That is what they did in australia, so there is a precedent for it.

    However, the big Canadian budget deficit may prevent the dolling out of juicy tax cuts.

    It would make more sense to do something like increase the home buyer withdraws from RRSP's by another $5,000. This has the benefit of makeing it look like the government is doing something while really having no impact of government revenue or the market.

    How many first time buyers in indebted BC even have money in their RRSP's to withdraw? The savings rate is -7% here.

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    David Chalmers Says:
    45

    @vreaa: Paul Kedrosky used to be a lecturer at UBC and I'm sure he couldn't afford to live here. Sour grapes me thinks. But I suppose it's human nature.

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    Strataman Strataman Says:
    46

    @VRENGD: That would be nice if they worried about the deficit but they would argue the increased deficit is "temporary" as the economy is showing signs of growth (false growth) but that's neither here nor there. I could actually see a bidding war!! :-) Conservatives $20,000.00, Liberals $25,000.00 NDP $30,000 (+ and extra $5000.00 for union members). Okay I'm cynical but can you blame me? :-)

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    Not much of a name.. Says:
    47

    @squidly77:

    Didn't the CMHC remove the price ceiling limits in about 2002-2003?

    Just another change in policy that helped juice the market. It would be amazing where prices would be if mortgage rules were the same as they were even a mere ten years ago.

    I'm sure one could track the price changes with mortgage rule changes and there would be a very large correlation between the two.

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    David Chalmers Says:
    48

    I've often been puzzled by the anger that is on display here. On one hand the posters deride the high prices. So why bother to own? Heck why bother to comment on real estate at all? There is more to life than owning, but the insistent commentary is contrary to this notion.

    Perhaps the government should step in and benchmark house prices to some defined standard of the "average" income, "average" individual. That way, there would be no need for so much schadenfreude. This anomie is making me uncomfortable about some of you that live in my hometown.

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    David Chalmers Says:
    49

    @David Chalmers: Heck why not throw a riot or two?

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    Not much of a name.. Says:
    50

    @David Chalmers:

    Probably not sour grapes. My brother is a Phd in genetics and has said to me many times that there are many top researchers who would love to live hear but don't based on two factors.

    1. No jobs for them (many of them are in Toronto or the US)

    2. High priced RE

    So…they can work and make more money elsewhere and buy cheaper RE.

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    The scene: Legend Coronet Realty, May 3rd 2010

    The players: Rob and Aaron

    Rob: [staring blankly out window thinking of Sarah Palin] mmmmmmmmmmm.

    [cellphone indicates text message.]

    Aaron [via text message] hey rob can u pls call me on cell. not getting calls-cell broken? thnx

    Rob [dials Aaron's number]: Hey Aaron. Is this working?

    Aaron: Yes. Well I wonder why I'm not getting any calls?

    Rob: My phone's not ringing either. I was thinking it might be the competition bureau's fault.

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    Raincouver Says:
    52

    Re post #12.

    Just look at it. They're wandering over from RET. The bulls are flailing now. Even they suspect something bad is in the mail and they're fighting to ignore it.

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    (continued)

    Aaron: My tummy hurts

    Rob: There, there, little one. It's nappy time

    Aaron: Can you tell me more about the competition bureau, uncle Rob? That always helps me sleep.

    Rob: Well, see, there are these pillars . . .

    EXEUNT

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    squidly77 Says:
    54

    7. I heard that there is an upper limit to the price of a house I can buy with a small down payment?

    Not any more. As of September 2003, CMHC removed its price ceiling limitations. For the purposes of qualifying for CMHC Mortgage Loan Insurance, CMHC does not have a limit on the purchase price of a property.
    http://www.cmhc-schl.gc.ca/en/corp/faq/faq_006.cf

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    patriotz patriotz Says:
    55

    @David Chalmers:

    Heck why bother to comment on real estate at all?

    For starters, because the global RE bubble and bust (the latter just starting here) has been responsible for the biggest economic crisis and likely the longest recession since the 1930's. That matters to every one of us, whether or not we have any aspirations to buy a house at any price.

    Is that good enough?

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    Johnny_O Says:
    57

    After visiting my friend in Richmond we were talking about how he is fighting with 3 of his neighbors about parking issues on the street with all the comings-and-goings of their 'guests.' I didn't want to put him on the spot to get in trouble, but I have a request from all you bloggers. If someone else sees the same situation with these 'mini-motels'in your neighborhood can you please call CANADA CUSTOMS AND REVENUE AGENCY on these tax-dodgers. Is this what Vancouver has become?? A freakin motel city to support its $1M shacks!?!

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    Absinthe Says:
    58

    @David Chalmers: I comment because jobs I've worked, and good friends, have left this city for family homes elsewhere; others have bought and are afraid of being trapped.

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    Starving Artist Says:
    59

    @Boombust:

    Does anyone have any idea how much HELOC money has been pulled over the past few years?

    This was a bellweather sign for the US market…but I have never seen stats for Canada.

    I agree, there is very strong correlation with size of second liens and the decrease from peak. It is also jamming up the US system to deal with first mortgages because 2nd lien holders want to get paid (and writedowns would cost the big 4 banks many billions). Just look at Texas; tight rules on HELOCs, and very little bubble & subsequent bust.

    All I can find is this:

    http://www.greaterfool.ca/2008/04/12/the-sad-desc

    Surprise, no public data. We are really kept in the dark and fed lots of manure here in Canada. But I would be very surprised if people weren't using HELOCs on their PR to leverage into investment properties. The… what is it, hubris? willful ignorance? as we follow the USA down the EXACT SAME PATH is truly astounding. Hoocoodanode?

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    No Longer Looking Says:
    60

    Me: He lowered my rent almost 5%.

    Guy I work with: So…

    Me: Well that's never happened before. Not in many generations, anyhow.

    Guy: Oh, I've seen it before.

    Me: Really?

    Guy: I'm from Detroit.

    (true conversation)

    Like or Dislike: Thumb up 0 Thumb down 0

    @No Longer Looking: Maybe you are overpaying by 20% and he gave you 5% off to keep you in his moldy dungeon

    Like or Dislike: Thumb up 0 Thumb down 0

    Gordon C. Says:
    62

    Oh don't get me wrong XXX.

    CMHC should not be in the business of guaranteeing real estate investors/speculators. Guaranteeing the investor/speculator propelled prices up as it increased the participants that can make bids and encourages hoarding of real estate. This was an extremely bad decision made by the government and still is not in the best of interest of the Canadian people. Many times in the past, the government has tried to stimulate the real estate market in order to stave off a recession. And every time they have only succeeded in bringing forward future demand which only amplified the fall in prices because of the drought of prospective buyers. For the next couple of years we will be asking ourselves how low can house and rent prices fall. At the same time energy costs and house taxes have to increase. Most home owners have been so giddy about their increase in wealth and lower mortgage rates that they have not been watching their other house costs escalate.

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    David Chalmers:

    A loose collection of anecdotes regarding the social effects of the RE bubble:
    http://vreaa.wordpress.com/category/14-social-eff
    And this doesn't even begin to get into the broader damage that 5-10 years of massive misallocation of resources causes.

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    @Starving Artist: Lots of bits and pieces of HELOC/RE_ATM info around, but nothing really summing it up.

    Remember the G&M article below? Pity we don't have a Vancouver analysis.

    From the Globe and Mail 28 Jan 2010 1:16 pm -

    How much do your neighbours owe on their mortgage?
    http://www.theglobeandmail.com/report-on-business

    extracts -

    No. 17

    Purchased by Dave and Chloe in January, 2004

    Paid: $1,284,912

    Mortgage: $300,000 (five years, 4.89%)

    In 2009, the couple took out a second mortgage for $600,000 (“on demand,” prime plus 7%)

    No. 37

    Purchased by Rebecca and Domenic in December, 2006

    Paid: $1,129,948

    Mortgage: $730,000 (five years, 5.25%)

    In 2009, the couple took out a second mortgage for $500,000 (“on demand,” prime plus 6%). A third mortgage was secured in November, 2009, for $580,000 (“on demand,” terms unknown)

    No.18

    Purchased by Geoffrey (all names have been changed) in April, 2004

    Paid: $1,440,059

    Mortgage: $1,275,000 (five years, 0.24% below prime)

    Monthly payment: $6,555.17

    In 2005, Geoffrey took out a second mortgage for $4 million (five years, prime plus 5%), secured by 200-plus acres of property north of Toronto.

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    Raincouver Says:
    65

    Gordon C. Says:

    Oh don’t get me wrong XXX.

    CMHC should not be in the business of guaranteeing real estate investors/speculators. Guaranteeing the investor/speculator propelled prices up as it increased the participants that can make bids and encourages hoarding of real estate. This was an extremely bad decision made by the government and still is not in the best of interest of the Canadian people.

    Gee. Do 'ya think? Maybe we can get you on 'Jeopardy'.

    Your special area of expertise would be The Bleeding Obvious.

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    David Chalmers Says:
    66

    @vreaa: Thank you for the anecdotes. But what broadly are the social issues? We are talking about housing, not neccesarily owning housing. If owning a house is such a financially untenable project, why bother talking about it and making a fuss? Are there not more valuable things to do?

    I feel like real estate is an immensely large waste of time for this intelligent community of posters. Surely your energies would be better spent on an entrepreneurial, social, or artistic venture? I don't see anyone here advocating housing for the poor for example.

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    Anonymous Says:
    67

    "Not any more. As of September 2003, CMHC removed its price ceiling limitations. For the purposes of qualifying for CMHC Mortgage Loan Insurance, CMHC does not have a limit on the purchase price of a property."

    hey squidly, doesn't that link you posted earlier sort of imply there's a limit now of 250,000 if dp is 5%?

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    higher_faster Says:
    68

    it clear to me that the market has resumed it's up trend. people in vancouver take the advatange of higher and higher home prices. how can you do it? it starts with a condo and then as your life progresses you move to the small house and then to really big house.

    mainland china wants to move here. they have 11.9% gdp growth. everything is growing. this is the greatest time in human history and bears are getting left behind.

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    Bubble Lad Says:
    69

    @vreaa:

    I think we can all take a perverse sort of pride in knowing that Vancouver was (despite all its "world class" hot air aside) the LAST PLACE ON EARTH to clue in to the worldwide RE bubble.

    I mean, I always knew Vancouver was isolated, provincial, and clueless, but MAN!

    On the other hand, there's an absolute perfection to the whole mess, as the guy who INVENTED subprime RE financing was from Vancouver!

    Gimme a "K", "A" "R" "M" …aw, forget it.

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    Bubble Lad Says:
    70

    @vreaa:

    What always blew my mind was how much people in Vancouver have their very self-image wrapped up in real estate: what neighborhood they live in, how much their house is worth, the toys they managed to get loans to buy based on the value of their home.

    I guess feeling "special" for buying crap you don't even need is easier than developing an actual personality?

    I think that's why you get so many frantic bulls on this site: it's not their house you're running down, it's THEM.

    That's the truly sad part: this has become PERSONAL for so many people, and when they (inevitably) get wiped out financially by this downturn, the social cost is going to be enormous, and that's no joke.

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    Bubble Lad Says:
    71

    @Gordon C.:

    The Amazing Bubble Lad will now predict the financial future of Canada for the next decade:

    (holding envelope to forehead)

    "You will pay more and more for less and less…"

    Thank you!

    (I also do children's parties).

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    Anonymous Says:
    72

    @higher_faster: As do their Bedbugs apparently!

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    Gordon C. Says:
    73

    Well Raincouver, its only become bleeding obvious to you now because someone has told you what to think. But, one day you may have a thought of your own. I hope it doesn't die of loneliness.

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    Chincy Says:
    74

    Saw this quote today which i thought was quite insightful for our times…

    "People spend money they don't have to buy things they don't need to impress people they don't like."

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    Gordon C. Says:
    75

    Not true bubble boy, not everything will cost more and more in the future. Somethings, including real estate, will cost less. It's only if you want to heat your home and put food on the table that will cost you more. But, if you don't believe me, go out and buy your new ipad today.

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    boomingVancouver Says:
    76

    I always find it amazing how many bears make the strangest assumptions. It goes like this:

    1) I can't afford to buy a home/condo so it must be overpriced

    2) I can't afford to buy a nice car so anyone that can must not be able to either and are leveraged to the hilt

    3) I can't afford to buy nice things and so those nice things are either actually worthless or again the person who bought them must be in debt big time

    Just face it bears. You have a shitty job and should have paid more attention in school and yes I would like another glass of water. Thanks again.

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    Wreckonomics Says:
    77

    On one hand the posters deride the high prices. So why bother to own? Heck why bother to comment on real estate at all?

    this is nonsensical. Not many here are "bothering to own" with prices as they are, but that doesn't mean they never want to own. If you want to own, but only at a price that makes sense, why wouldn't you comment on the market and try to learn as much as possible?

    And the big issue has already been pointed out to you by others. When these corrections happen they don't only hurt the speculator, you only need to look south to see how that works.

    I think the big question is this: if you're comfortable with today's prices and not at all worried about a market crash, why are you wasting your time commenting on a site where the majority disagree with your opinion and are showing you data that points to risk?

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    patriotz patriotz Says:
    78

    @boomboxVancouver:

    1) If I can afford to rent something but cannot afford to buy it, it must be overpriced.

    2) It costs more to rent (rent not lease) a car than to buy one. How come? Figure this out and you will understand (1).

    3) Consumption and investment, and thus consumer prices and asset prices, are two different things.

    There's your education in bubbles in 3 easy steps.

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    joedub Says:
    79

    @Bubble Lad: @Bubble Lad:

    That sums it up perfectly! I think we'll all soon come to realize how unimportant real estate is.

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    oneangryslav2 Says:
    80

    @boomingVancouver: I am assuming you're not trying to be a comedian, and what you've written is a genuine representation of your sentiments. With that prefatory caveat in mind, I've got to say, are you kidding me?

    Nobody can have read this blog for even a few days and believe any of your three points (well, nobody with even a modicum of reading and thinking ability.)

    1. I would venture to say that of the bears who post on this site regularly, a greater percentage of us can afford to buy than is the case in the general population. I can afford to buy very much, thank you. I have chosen not to because renting provides much better value for my money. And it's not even close.

    I have two colleagues–let's call them Mr. Bull and Mr. Bear.

    Mr. Bear has about $200,000 that he could put toward a down payment on a house in Vancouver. He has chosen not to because he also understands economic fundamentals.

    Mr. Bull, on the other hand, about two months ago was able to come up with a 5% down payment on an admittedly nice place in east Vancouver. He readily admits that he and his wife will be just scraping by in order to make the mortgage payments, with a mortgage-helper suite in the basement. The suite s currently unfinished, and they exhausted all of their savings on the down payment. They are recent arrivals from the United States–Washington, DC area–and had hoped to fund the completionrenovation of the basement suite via the differential in the exchange rate between the US and Canadian dollar as the funds. Big mistake; the loonie and the greenback are now at par. So, they're now scrambling to get a second mortgage. They take possession on May 1st.

    But I guess they're now home owners, and Mr. Bear and I–who are lowly renters–are just losers.

    I can afford to wait until prices make sense. If they don't, then I'll never purchase real estate in Vancouver. Big deal.

    "Just face it bears. You have a shitty job and should have paid more attention in school and yes I would like another glass of water. Thanks again."

    Beep! Wrong answer! I have a BA from UBC, a Master's degree from a European university, and a PhD from an Ivy League school in the United States. I have won an international award for best book published in 2007 in my field. I think that have paid plenty of attention in school over the last couple of decades.

    2. I could easily afford to drive around in a leased Lexus

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    oneangryslav2 Says:
    81

    @oneangryslav2: Oops! Pressed submit before I had finished editing. I was going to address the "can not afford a car" comment, but my post was already too long.

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    Wreckonomics Says:
    82

    @boomingVancouver: I can tell you just came here to shit on the rug, but I just thought I'd point out for the benefit of other new visitors that we've talked about demographics here before, and the people reading this site come from a wide range of places including government, the banks, finance, EA and other game companies, medical, high tech, you name it.

    Many of us have above average household incomes (not suprisingly since local incomes tend to be so low). We can afford to buy, but we're not interested in overpaying. We've watched the "different here" argument blow up in the face of buyers in bubble markets around the world and some of us have lived in Vancouver long enough to watch it happen right here more than once before. We don't buy the economic fantasy you're trying to sell.

    You're going to have to get your own glass of water.

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    Wreckonomics Says:
    83

    @oneangryslav2: aw.. You beat me to it! :D

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    Gordon C. Says:
    84

    Eventually all of us will die, and all the wealth we will have accumulated will be once more dispersed. (that bleeding part is for you raincouver) And all of our friends will say "he had a really nice house" and then -fight over the proceeds of the Will.

    I suppose you have to ask yourself – are these the kind of friends that you want? Or a more telling question. Is this the kind of friend you are to them? If faced with the question of helping your step daughter through university or buying a home in an upscale neighborhood – which would you choose? I have worked for some obscenely wealthy people and watched the staff stroke their egos, only to rip them apart once they have left the room. And I also remember my pensioned grandmother splitting her groceries with her grand daughters family that were having harder times than she. A house is not a home, but you can have a home without owning a house (dig deep on this one raincouver, it will only hurt for a little while)

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    David Chalmers Says:
    85

    @Wreckonomics: As per your question, the reason I am commenting is out of altruism. Perhaps I am treading into waters not amenable to such a thing, but having lived in a number of European cities where real estate is beyond the reach of wage-earners, the question has to be asked, why bother? There is so much more to life. And no I am not a property owner.

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    Bankerman Says:
    86

    The Vancouver crash has already started. The masses are not aware of the huge tidal wave that is going to hit this market in a matter of days. There are simply too many resources allocated towards housing employing too many realtors, lawyers, bankers, construction, etc. The rising price level provided a massive ATM to the economy as debt piled up and the false weatlh allowed for those to buy cars, restaurant meals, etc. Now, the final act will be the financial wipeout of the working poor, middle class. Same story that has played itelf out many times over in real estate markets around the world. Hey, Spain's boom went to bust now they have unemployment north of 20%. CMHC will have to write off in excess of $200 billion in debt to be added to our national debt due to ill flawed decision making by a handful of government idiots.

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    Bubble Lad Says:
    87

    @Bankerman:

    That's the frustrating part: even if you WERE responsible, and WEREN'T one of the idiots buying overpriced RE you couldn't afford, you're STILL going to have to take a bite of the sh*t-sandwich because the economy as a whole is going to take it on the chin.

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    Anonymous Says:
    88

    boomingVancouver comment is one of the most stupid post I have ever read for a long time.

    I got cash in 2 banks enough to buy a condo or townhouse in cash. I paid for my van in cash (no lease) and I took vacations with my family 2 to 4x a year. I got zero debt and I worked at home managing my own personal fund trading stocks. I got a masters degree in Business. Most of all, I am a proud renter for 5 years because it is a lot cheaper to rent than to own and maintain an overpriced house. Moreover, I earned more from my investments than have it locked up in real estate.

    I will buy when the time comes but definitely not now when housing prices are toppish and on its way down. I believe other bears are in the same position as I am waiting for the drop for sure will come this year.

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    DaMann Says:
    89

    Numbers? :-)

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    boomingVancouver Says:
    90

    All your replies to my comment just proves how insecure you really are bears. Oh I'm so educated and have so much money in the bank etc etc etc. Sure you are.

    Why do you tools assume that if you own real estate and have nice things you must be broke? That's probably the #1 dumbest assumptions I've ever heard in my entire life. I could go into details about how much cash I have etc but I'm not a loser bear who needs to feel important by bragging anonymously on the interwebs about things that are not even true. And hurry up with that water.

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    IgnoreTrolls Says:
    91

    boomingVancouver = troll .. ignore, they go away.

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    Starving Artist Says:
    93

    @Bankerman:

    There are simply too many resources allocated towards housing employing too many realtors, lawyers, bankers, construction, etc.

    And that in a nutshell is why I am interested in the Vancouver RE bubble. Not because I want to buy – I'm a very happy renter – but because bubbles are really misallocation of resources. When the bubble pops, it will hurt everyone.

    Take a look at BC Stats. Almost all of our employment growth in the last 10 years has been in construction and related (agents, architects, etc). Chanos says half of China's annual GDP growth is construction. It's a ponzi scheme based on luring FTBs with teaser rates. And like any other pyramid scheme, it's the last of the greater fools who get burned the worst.

    Interesting that Chanos said the Chinese RE bubble is being fueled at least in part by overseas Chinese, and mentioned Vancouver especially. I wonder if an RE correction here could have implications for China RE, when everyone expects it to be the other way around. If China construction falls, commodities will tank, and Canada will be in a world of hurt.

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    @Anonymous: No wonder…

    boomingVancouver is typical undereducated semi-retard whose life biggest objective is to "own" marble countertop, SS fridge in a shoe-box condo and used BMW with extras. Guy whose maximum accomplishment is to sit at the Earls and watch the hockey game while thinking how well he does.

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    Regarding our new troll boomingVancouver:

    From his nickname we learn he believes "Vancouver Real Estate Never Goes Down". As we all know, these are the people who are heavily invested in RE, thinking it's a sure thing.

    As lately the media started to mention the "b-word", namely bubble, all our "boomingVancouver" friends started to feel a cold sweat in their back. Maybe, just maybe, they are going to lose everything.

    So they find this blog, and behold, a bear cave! "It's their fault", "It's their fault", they think.

    So they end up embarrassing themselves with sentences like:

    "Just face it bears. You have a shitty job and should have paid more attention in school and yes I would like another glass of water.".

    Do not worry, as soon these type of "investors" are going to be in the news saying stuff like "Who could have known?", "The realtor promised" and "It's not fair".

    Regards

    arit

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    Starving Artist Says:
    96

    @boomingVancouver:

    Why do you tools assume that if you own real estate and have nice things you must be broke?

    Because every home owner I talk to talks about how much their RE is worth, and doesn't subtract their debt. Math is hard…..

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    reknab Says:
    97

    As of Monday all new deals cmhc AND conventional for terms of less than 5 years, Heloc's and variable rate mtgs will have to qualify at the 5 year posted rate at my big 5 bank.

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    Anonymous Says:
    98

    Dear Real Estate Agents,

    Please inform your clients that there are many listings. If they don't start lowering their price now, they will not be able to sell. You will not be able to make your commission. Agents, make some money before the rush is over.

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    lorem ipsum Says:
    99

    Don't hold your breath – I've seen some properties in Ireland (another place that was different, just like Vancouver) that have been on the market for over two years without dropping their prices. Sellers get incredibly attached to the peak value.

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    space889 Says:
    100

    @Johnny_O: uhmm…are you sure it's motel not a by the hour Japan's style love hotel?

    Like or Dislike: Thumb up 0 Thumb down 0

    New Listings 275

    Price Changes 92

    Sold Listings 148

    15,822 total inventory.

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    Fresh Says:
    102

    @paulb:

    Hi PaulB,

    Is the current inventory at 15,822 correct?

    If I'm not mistaken, end of Wednesday was posted at 15,789 and end of Thursday at 15854. Since last night to now listings still far exceed sold, how come the total inventory dropped?

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    Fresh Says:
    103

    @paulb:

    Hi PaulB,

    Is the current inventory at 15,822 correct?

    If I'm not mistaken, end of Wednesday was posted at 15,789 and end of Thursday at 15854. Since last night to now listings still far exceed sold, how come the total inventory dropped?

    Thanks!

    Thanks!

    Like or Dislike: Thumb up 0 Thumb down 0

    I guess a bunch of listings expired? The numbers are still coming in but the 16k party will have to be next week I think. :(

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    northeast canuck Says:
    105

    @lorem ipsum

    I moved from the UK last summer where exactly the same thing happened. No one would drop their prices, and this is generally still the case. They all think their houses are worth 2007 prices. The result is a totally moribund, dead-as-a-doornail housing market. It's terrible. No one can move.

    Let's pray that doesn't happen here, it's incredibly frustrating.

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    Lorem and northeast:

    You're right, and the bears who are dreaming of a quick crash *need* to explain hwo we get through the 'housing market chicken' stage so quickly. Sure, listings and MOI will surge and prices will start to drip down.

    BUT, if people don't HAVE to sell, they won't.

    So, bears, why will people HAVE to sell. Here are some reasons:

    -specuvestor can't find tenant / can't paymortage with rent

    - regular DDT (death divorce transfer)

    - interest rate spike (but how long until it affects people??)

    - macro unemployment problem–can't pay mortgage

    - china bubble pops causing hot money to go home.

    What will lead people to HAVE to sell? Without a compelling argument why, it may be a slow road down.

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    northeast canuck Says:
    107

    I know quite a few people in England who were totally screwed and had to sell. One property even went to auction but didn't sell. Then interest rates dropped and all of them still have their homes. It was interest rates, and interest rates only that prevented a total meltdown there. They were a couple of years ahead of Vancouver in the housing cycle at the time.

    I believe it will be a combination of things, interest rates being the trigger and demographics sustaining the fall. But although I may "dream" of a crash I think the reality is that it is going to be a long, painful drawn out process – both for buyers and sellers. This is the reality in the UK at the moment.

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    oneangryslav2 Says:
    108

    @VHB: I think that this is a fair question. Isn't the market price the price at which the most recent unit has sold? IF that's the case, then I can see the condo market dropping dramatically, even while the price for SFHs remain sticky. This, of course, will have an impact on SFHs as many have used the equity in their condos as the foundation for moving up into SFHs.

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    Chilled Says:
    109

    @VRENGD:

    VRENGD Says:

    April 16th, 2010 at 9:59 am

    …………..I for one think that the government is out of bullets and can’t to a darn thing. Anyone have a contrary view?

    ++++++++++++

    Yes;

    1) the feds will extend the spring rush by passing a bill in the H of C that extends spring until December. December 2015, that is.

    2) Federal and Provincial legislation will declare 'Realturds' as a protected species. It will be a federal offence to not do what they say.

    3) Revisions to the Bank Act will allow financial institutions to treat Canada Deposit Insurance much like a "reverse mortgage." Savers will have their monies removed and applied to their neighbours mortgages.

    4) A National Holiday called "Real Estate Day" will be implemented and you will only be eligible if you are underwater.

    There are many more things the feds can do, don't be so damn pessimistic! :)

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    New Listings 333

    Price Changes 111

    Sold Listings 152

    Only the listings are still pouring in.

    Like or Dislike: Thumb up 0 Thumb down 0

    @oneangryslav2:

    The opposite seems to be the case during corrections. Condos hold their value better than SFH's.

    Like or Dislike: Thumb up 0 Thumb down 0

    @oneangryslav2:

    If anything, prices are going to be sticky for everything on the high side because all the marginal owners and speculators would have jumped shipped 1.5 – 2 years ago.

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    Chilled Says:
    114

    Not much of a name… Says:

    …………….. My brother is a Phd in genetics and has said to me many times that there are many top researchers who would love to live hear but don’t based on two factors.

    1. No jobs for them (many of them are in Toronto or the US)

    2. High priced RE

    So…they can work and make more money elsewhere and buy cheaper RE.

    ++++++++++++++++

    What a shame. I can't think of a place that needs more genetic research into the probable biological causes of distorted perceptions and the resultant detachment from reality, than Vancouver. We all know what the psychological results are. Left unchecked, surely genes will mutate in mass. Could you imagine a city of Supraboys and Daves?

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    @oneangryslav2: Good point. It only takes one new sale to reset the 'market' price. BUT, the point is that other sellers will refuse to accept the market price and stick to their 'wishing' price unless forced to sell. People don't *willingly* sell a house that is underwater or has lost a few hundred K of market value.

    BTW, my concern about this is pretty much SFHs. Condos are so specu-saturated that there will be plenty of need to sells.

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    @VHB:

    Then why do condos hold their value better than other classes during the correction?

    The answer is that condos are the most affordable class of real estate.

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    Best place on meth Says:
    117

    @Gordon C.:

    >>>It appears that people on this blog do not like speculators.

    Why? Do speculators not have spouses, children, mothers and fathers. If you cut a speculator will they not bleed.<<<

    Damn right they'll bleed, and the more the fuckers bleed the better.

    I'm sick and tired of the greedy pigs in this city treating homes like stocks. May they all end up living under a bridge where I can easily find them and throw things at them.

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    @Dave: premise is batshit crazy wrong.

    Like or Dislike: Thumb up 0 Thumb down 0

    I have to agree it will most likely be a long slow road down. Get comfortable, save your money, and join the Schadenfreude.

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    Best place on meth Says:
    120

    Larry's numbers for the evening, another great day for the real estate collapse.

    Hopefully Paul B will update them later as these are not likely final.

    Vancouver East & West*

    New Listings – 117

    Back On Market Listings – 1

    Price Changes – 30

    Sold Listings – 58

    Vancouver All Areas*

    New Listings – 330

    Back On Market Listings – 8

    Price Changes – 108

    Sold Listings – 149

    *Attached & Detached @ 04/16/2010 18:47

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    @VHB: Frenzies feed on themselves – on the way up and on the way down. There is no logic to support prices here. Conversely there isn't a lot of logic to explain the extent prices have dropped in the US. Before the correction here that began in 2008 was arrested by free money, there was no shortage of people wanting to sell, in addition to those who had to.

    I suspect that the herd mentality is going to make this next correction particularly ugly.

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    @David Chalmers: "I don’t see anyone here advocating housing for the poor for example."

    We have enough advocates of housing for the poor, like the Vancouver Sun for example. Buy a house at market peak -> become poor.

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    @Best place on meth:

    How is that bearish? The ratio is in balanced territory.

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    The Ant Says:
    124

    @VHB: "quick is a relative term, and housing markets move slow. By other market examples I expect prices to fall relatively sharply for two years then slip for several years after that.

    In the US bubble markets dropped about 30% – 40% in the first two years and then kept dropping at a slower pace after that.

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    New Listings 345

    Price Changes 112

    Sold Listings 152

    Inventory number won't update but should be close to 15,900. I am sure inventory will check it out later.

    Bad Lieutenant time for me. :)

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    @The Ant: The US market had the 1% teaser rates that adjusted upwards, neg-am with big adjustment dates etc. Whatever you want to say about our housing market, we don't have those kinds with 'baked in' selling pressures.

    for people to puke up their houses we will need more than a massive MOI. Maybe a 4% BoC rate and 8% posted 5-yr rate would do it. But my point is that high MoI isn't going to do it on its own. There needs to be something that makes people sell the home their children grew up in.

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    Best place on meth Says:
    127

    @Dave:

    It's the nearly 200 gain in total inventory, Dave.

    Are you paying attention to anything that's happening out there?

    Would it help if I used puppets?

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    ReadyToPop Says:
    128

    Here's some bear fun for a Friday.

    <a href="http://news.google.ca/archivesearch?pz=1&cf=all&ned=ca&hl=en&q=listings+surge&cf=all&quot; rel="nofollow">Google News Archive Search For The Terms "Listings" and "Surge"

    Interesting bump on the blue graph around 2005…RTP

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    Best place on meth Says:
    129

    @ReadyToPop:

    Here's one of my favorite searches from the land of vacancies.

    "Immediately" as in "available immediately", as in "sitting empty", as in "not making a fucking dime for the dude holding the mortgage".

    http://vancouver.en.craigslist.ca/search/apa?quer

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    ReadyToPop Says:
    130

    @Best place on meth

    :-)

    Like or Dislike: Thumb up 0 Thumb down 0

    Ooooh this is fun

    http://news.google.ca/archivesearch?q=vancouver+b

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    ReadyToPop Says:
    132

    @ paulb

    :-o

    Like or Dislike: Thumb up 0 Thumb down 0

    @Chilled: "Could you imagine a city of Supraboys and Daves?"

    Imagine?

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    CashRichRentPoor Says:
    134

    I'm renting a place for $1650.

    If I was to buy it;

    my current monthly payment at 3% would be

    $2700

    rate jumps to 6%

    and id be paying:

    $3400

    I think I rather pay a higher rate on a smaller mortgage…

    than a historically *forever* low rate on a monster loan..

    wait and see :)

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    Kite towards moon Says:
    135

    I think bubble is a bussiness a medium of debate for oppositions around the world.Specially Vancouver must stay in bubble because worldwide investors have guts to invest here in Vancouver real estate.I think Bubble is a most powerful tool for real estate board it will always creat listings for board and keep the prices neutral so people can buy and sell often to keep their bussiness going.Bubble is also very important for media,Somewhere some markets must be forming a bubble so ,if you are tired of hearing bubble in Vancouver or Canada they will take you over to China then USA then UK for little change.I think David Chammer makes a good case.I believe real estate is not that expensive, in ten year with two jobs one could atleast buy two condo or a house. so what's the point of spending 10 year of equal time that could have spent on working another option to make money so you can afford.What makes debate that long for 5% bargain?.On the bears blogs the story begin with bubble and end with bubble.So someone is in bubble either bears or market,Lots of bears have bought a place last year through Gavin's anecdotal.Let's see how many bears are still there,Hello?

    952 sales for the week compare to 776 sales last week,good numbers.

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    Raincouver Says:
    136

    Gordon C. Says:

    April 16th, 2010 at 12:57 pm

    Well Raincouver, its only become bleeding obvious to you now because someone has told you what to think. But, one day you may have a thought of your own. I hope it doesn’t die of loneliness.

    That's OK, Skippy. Don't bother taking the moral high ground. Some of us have followed this debacle longer than you have. Probably a lot longer.

    Everyone has pretty much agreed that CMHC is a bad actor, it's been covered on this forum at length. In fact the topic has been ridden hard and put away wet.

    You don't need to further expound on what speculative ventures they 'should' and 'should not' cover.

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    oneangryslav2 Says:
    137

    @VHB:

    There needs to be something that makes people sell the home their children grew up in.

    People who have owned their homes long enough to have witnessed their children growing up in them will not be setting the market price for real estate in the near future. They bought at least 15 years ago.

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    Raincouver Says:
    138

    >"Best place on meth Says:

    Here’s one of my favorite searches from the land of vacancies.

    “Immediately” as in “available immediately”, as in “sitting empty”, as in “not making a fucking dime for the dude holding the mortgage”."<

    Wow. That's a fair bit of empty RE. I just ran into a similar thing; looking to move to the Island. Three really nice houses we would like to rent. All vacant. Sweet.

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    Gordon C. Says:
    139

    One of the common buyers for investment grade properties are insurance companies. The insurance companies are self financing and buying for the income stream and not future appreciation. The difference is that while human investors have a finite life span, the insurance company could hold the property for a hundred or more years and ride out the ups and downs of the markets. The insurance companies want a stable income stream and currently a 4 or 5 percent return with the potential of increasing rents is more appealing than leaving the money in a GIC or bonds.

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    old kitsie Says:
    140

    Just checked Bloomberg and apparently China has passed, effetive immediately, new lending standards to slow the housing bubble. The goal is to decrease lending by at least 22% – one new regulation that will affect Vancouver is the new requirement of 50% down for second properties. Many immigrants to Vancouver own more than one property, all heavilyleveraged – won't be happening now. (I am, of course, speaking of those that retain residency and business relationships with the Mainland. They would be the ones borrowing money at home – China).

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    @boomingVancouver

    nice troll bV, well played my friend, well played

    Like or Dislike: Thumb up 0 Thumb down 0

    Ultraman Says:
    142

    “You will pay more and more for less and less…”

    Thank you!
    (I also do children’s parties).

    In consideration to the fact that much will be paid from borrowed money, maybe you should explain to the kids the concept of taxation without representation. That should quickly wrap up the party and let you go home early.

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    Partisan Spectator Says:
    143

    Spotted today on MLS:

    "Excellent for any first time buyers, or family with young kids, or if you would like to downsize."

    Wow, methinks, that is an interesting sale pitch, unheard before and for a three bedroom house of 1600 sq.f.

    I have always been educated by realtors that people are only upsizing.

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    @VHB: Agree to not be holding our breath re quick drops.

    Regarding who'll be selling, shouldn't we add to the list the various holders who are waiting/expecting to cash in?

    They range from local specuvestors, to foreign holders, to local boomers whose retirement is dependent on their home values.

    All of these players may try to head for the exits once they get a whiff of significant price drops ahead.

    Impossible to quantify, but they could speed the rate of price drops.

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    Absinthe Says:
    145

    @David Chalmers: I have done a buttload of work regarding housing advocacy. You know what really sucks? Doing that in a bubble, where the crummiest holes on the planet are seen as prime real estate and purpose-built rental doesn't really make a lick of sense because renting (even to regular income earners) is a shitty return on investment.

    Trying to find funding in a climate where a million dollars is "reasonable" for a building with code issues built in 1910 that will need another $150K poured in. Or trying to convince landlords to do their homework before they evict and reno because they believe they can fill 2bed suites at $3K…

    What you've got in places like Vancouver Condo info is understanding and discussion of the actual forces in the market. EVERYONE doing ANYTHING about housing should understand these things – and *only* the bears are talking about the reality of the financial picture.

    When mainstream economists explained away 20% jumps in RE prices on the strength of part time and retail job creation, they didn't see the hurt of the retail worker renting from a landlord who suddenly dreamed of gentrification. Or the stable working class communities that saw eviction, flipping, teardown, boomboxes, all built with the dream of Easy Big Money.

    The market does, will, correct – but the 50% of people below the median, those who don't have any money as insulation, are in the tires on the market vehicle: they feel the grind and bumps of off-roading right away.

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    @VHB: "People don’t *willingly* sell a house that is underwater or has lost a few hundred K of market value." & "There needs to be something that makes people sell the home their children grew up in."

    Urgent fear of loss of future financial security will do it.

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    well, the first leg under the sales engine is removed in a few days

    then, gradually the pool of low rate buyers dries up, as the mad rush to the entrance wanes

    listings pile up and the sheeple take notice (in about a month)

    then, panic sets in

    same formula every time

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    Joshua Says:
    148

    So what's the total inventory for the night?

    Is "Inventory" posting this somewhere else too?

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    Imagining that no one will sell for less than peak value is misguided. Not everybody paid those prices. How many people have lived in their house for 10-20 years? I know quite a few. For these people 20% off peak prices is still winning the lottery. They can downsize or move to Florida or get assisted care or do whatever they want to do.

    Now obviously they like their houses because they weren't tempted to trade up, or they just hate debt. But either way, what is going to stop them? Sometimes life calls for a change! Especially as you get older and stairs get hard, etc.

    Bulls are dreaming if they think that nobody will sell. The majority will sell when it makes sense for them to do so, and recent buyers will stubbornly cling to their position as they go deeper underwater. A lot like bears actually, but fundamentals are on our side…

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    I agree with most of what RP says.

    "The majority will sell when it makes sense for them to do so"

    Yes, exactly. They are not in a rush to sell. No panic; no crash in a few months caused by these guys.

    Yes

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    Canonical Says:
    151

    Check out this listing? How overpriced is this bears? What are the fundamentals on this?

    http://www.greggbaker.ca/10711-30031011-west-cord

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    asalvari1 Says:
    152

    re: sticky prices

    it wont happen.

    Fortunately, sticky prices have one big enemy – Realtor.

    Essentially, no Realtor would spend time trying to market (sell) property that has no chance of selling. If the owner is stubborn, the listing would eventually expire.

    Sticky prices would happen if the owners list directly on MLS. There are some relaxing rules to it, however majority of the listings are still controlled by realtors and go with full agency these days. We will see some resistance, but the prices will not get stuck in limbo.

    Second reason is that Vancouver is easy come easy go mentality – we have raised the prices for 20% in one year, previously they were falling with 4% monthly. Whoever believes that the owners would form an union to keep the prices elevated is delusional. Mostly the behavior is "save me, and who cares for the rest"

    Third reason is that I am seeing some properties lowering the price for 12% in the last year. Actually most of the lowering happened in the last month or so. Yes the initial price was astronomical, current is unreasonable. And that happens while the market reaches the highest watermark.

    Whoever hopes for sticky prices, I really wish him well, but also suggest to plan for the worst – approx 2% per month slide.

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    Inventory Says:
    153

    ************* 1/1/2010 / 4/16/2010 / % change

    Bowen Isld 46 / 105 / 128.26%

    _Bby East 68 / 149 / 119.12%

    _Bby North 345 / 724 / 109.86%

    Bby South 362 / 671 / 85.36%

    Coquitlam 531 / 1085 / 104.33%

    Van.&Gulf 215 / 261 / 21.40%

    ___Ladner 65 / 153 / 135.38%

    MapleRidge 575 / 962 / 67.30%

    _New West 262 / 565 / 115.65%

    _North Van. 412 / 891 / 116.26%

    OutofTown 105 / 74 / -29.52%

    _Pitt Mead 121 / 190 / 57.02%

    _Port Coq. 237 / 439 / 85.23%

    PortMoody 213 / 419 / 96.71%

    _Richmond 893 / 1715 / 92.05%

    _Squamish 402 / 486 / 20.90%

    Sunshine C. 656 / 1017 / 55.03%

    _Tsawssen 98 / 179 / 82.65%

    __Van East 767 / 1344 / 75.23%

    _Van West 1396 / 3031 / 117.12%

    _West Van 386 / 618 / 60.10%

    __Whistler 569 / 744 / 30.76%

    _____Total 8724 / 15822 / 81.36%

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    Wanderlei Says:
    154

    @Inventory:

    Thanks inventory!

    That's quite the coincedence – paulb posted inventory at exactly 15822 too at around 5pm earlier today. We noticed that even though listings were still coming in much more than sales, the inventory was getting slightly less.

    That seems to be case yet again with your latest update – do you also think this is due to expired listings?

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    patriotz patriotz Says:
    155

    @oneangryslav2:

    IF that’s the case, then I can see the condo market dropping dramatically, even while the price for SFHs remain sticky.

    And just who are SFH supposed to sell to? A very large number of entry level SFH are sold to people trading up from condos. Take away their equity, and you've knocked down the SFH market too. Also a drop in condo prices provides an extra incentive for empty nesters to sell their SFH and downsize.

    A lot of people on this board also seem to have forgotten that in the mini-bust of 2008 SFH in Van West and West Van saw the fastest and largest declines.

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    patriotz patriotz Says:
    156

    @Canonical:

    Check out this listing? How overpriced is this bears? What are the fundamentals on this?

    Here's the most expensive suite for rent at 1011, it's bigger than the one for sale, but let's use it just to be on the safe side:

    http://vancouver.en.craigslist.ca/van/apa/1691941

    Price/rent = $4,950,000/$12,000 = 412.5.

    Price/rent for a condo should be 120 at the very most, therefore it's overpriced by a factor of over 3, probably more like 4, since Craigslist asking rents (especially at the high end) are usually well over market.

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    patriotz patriotz Says:
    157

    @VHB:

    I agree with most of what RP says.

    “The majority will sell when it makes sense for them to do so”

    Yes, exactly

    No.

    It should be self-evident that it makes the most sense to sell at or near the top of the market, but only a tiny minority of sellers can and do sell high. For RE, stocks, or anything else.

    Should be, "the majority will sell when they REALIZE that it makes sense for them to do so".

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    observer Says:
    158

    @rp: rp makes a good point. It is better to have fundamentals on your side. Unfortunately, the banks and governments have been ignoring fundamentals the past years, aiding and abetting with easy credit via CMHC.

    If you buy with high p/e ratio, the only thing holding up your price is market psychology and speculative forces like easy credit, all of which can easily turn on a dime. The only other factor is supply and demand but we have too much supply and more is coming. On the demand side, typically what governments and banks would do is loosen credit standards to increase the pool of FTB and ownership ratios, but exactly the opposite is now happening because of the fear of a variation of subprime crisis hitting before next election.

    The situation is so similar to mass drug addiction. Easy credit makes owners happy because the value of their property goes up from the increased demand from FTB. But unless owners actually cash that in, it is only a paper gain. True, they can turn this into an ATM using helocs but this is only a temporary high. Eventually the drug wears off, but everyone gets addicted to the easy credit and life style.

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    @Wanderlei:

    Ya thats not right. That search function is not working. Searching the slow way found a number of 15,845.

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    painted turtle Says:
    160

    http://www.realtor.ca/propertyDetails.aspx?proper

    a "luxury" duplex for $2,118,000 on leased land on a very noisy street. "Move in in Spring 2010." The funny thing is: the picture shows that construction work is still going on, and… there are 110 homes for sale in that neighborhood.

    Rushing to the exit or beating the HST?

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    patriotz patriotz Says:
    161

    @painted turtle:

    Mind-boggling. Compare to this larger townhouse:

    http://vancouver.en.craigslist.ca/van/apa/1661839

    Price/rent = $2,118,000 / $4800 = 441.25

    Overpriced by a factor of 4. Remember the property goes back to UBC lock, stock, and barrel at the end of the lease.

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    Interesting anecdote from robchipman.net archived at VREAA:

    “While I KNOW this house is extremely expensive and likely at the top of the market, we bought it. Wish us luck, we may need it!”

    http://wp.me/pcq1o-JQ

    A Bear Who Bought…

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    Boombust Says:
    163

    Another 21 SFH listings from my VOW auto-updater last night for the Tri-cities.

    Amazing! (but, not really)

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    anonymous Says:
    164

    @old kitsie:

    link to bloomberg article: China’s Rules to Curb Property ‘Madness’ Will Take Effect Now

    http://www.bloomberg.com/apps/news?pid=20601087&a

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    @anonymous 151: "China’s central bank pledged to immediately implement new lending rules to cool real-estate speculation and one of its policy advisers said the market is having its “last madness.” "

    I don't like the look of those storm clouds…

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    The Ant Says:
    166

    @jesse: I don’t like the look of those storm clouds…

    I do! :D

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    Best place on meth Says:
    167

    FINAL WEEKEND BLOWOUT SALE!

    EVERYTHING MUST GO BY APRIL 19!!

    HURRY IN BECAUSE ON MONDAY YOU WON'T QUALIFY ANYMORE!!!

    SPECIAL BULK CONDO DEALS FOR RICH ASIANS!!!!

    THEY'RE NOT MAKING ANYMORE LAND!!!!!

    DON'T MISS OUT!!!!!!

    Like or Dislike: Thumb up 0 Thumb down 0

    @Best place on meth: Good point meth. I was just saying the same thing in the forum.

    ONLY TWO DAYS LEFT TO BUY OR YOU WILL LIVE A SAD HORRIBLE LIFE. BUY TWO JUST TO MAKE SURE!!!

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    Keeping an Eye on Th Says:
    169

    That’s right folks, hurry , hurry, hurry, they won’t last long.

    Every billionaire in the world has seen Vancouver on tv during the Olympics, and now wants to move here.

    But just in case you miss the deadline, please see your mortgage specialist. They have creative writers on staff and can help you qualify (we charge a small processing fee) (T4 Slips, letters of reference, slightly more).

    After a couple of years Vancouver prices will be much higher; you will have equity, and be able to requalify for lower rate.

    But hurry , hurry , hurry, they don’t make any more land, Mark Twain and Bill Good say so.

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    I like planning in advance…Halloween 2013, I'm dressing up a vulture.

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    reapaul Says:
    171

    Has everyone seen this? Its still funny though.

    http://www.vancouversun.com/Gallery+Crack+shack+m

    My wife and I always laugh when we see these Chinese Lemming rushes. It has to be the culture. Any time 'a thing' gains in the communities popularity perception they, as a group, rush in and fall over each other to all be in the same thing at the same time. One year it's Hello Kitty, then a particular car, or hair style, now real estate.

    Hey Soupnut ! are they putting something in the Dim Sum ?

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    reapaul Says:
    172

    #142 OK, you hit on something there. We have a lot of new comers who have been taking out loans in China and bringing the proceeds to Canada in cash. The Airport customs have been reporting an increase in non English speaking landed immigrants with suitcases full of cash coming in. The majority have no intention of paying the cash back in China because they know they can hide behind the Canadadian passport and never be extradited for the fraud. Ain't we lucky to be attracting such stellar citizens?

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    Gordon C. Says:
    173

    @Raincouver: Would you like help moving!

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    Wreckonomics Says:
    174

    Can anyone point me to an current version of the Vancouver real house price graph like the cuer sauder UBC one?
    http://cuer.sauder.ubc.ca/cma/data/HousingPrices/
    Unfortunately that one only goes up to 2007, I'm looking for a real house price graph thats more recent than that.

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    @Wreckonomics:

    http://paul-northvancouverhomes.blogspot.com/ top of my post, just click it.

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    Wreckonomics Says:
    176

    @paulb: Thanks paul, but that's a nominal price graph, I'm looking for inflation adjusted real prices. Unfortunately I'm not terribly 'mathy', so I don't know how to convert the nominal to real prices. Anyone know how to do that?

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    @Wreckonomics:

    Why bother? Nominal prices are better to use.

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    @reapaul:

    That pretty much describes every culture. Quit being such a negative nelly troll Paul.

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    Mold City Says:
    179

    Dave is right on this one – EVERY culture jumps on trends and creates bubbles, it's hardly limited to one race. The americans caused the US housing bubble, the dutch caused the tulip bubble and Vancouverites caused our bubble. I wish people wouldn't vote down reasonable comments just because of who made them.

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    Wreckonomics Says:
    180

    @Dave: Better to use for what?

    I like real prices because they're more 'real'. If you prefer nominal prices does that mean you happily put cash under your mattress in the eighties to save for retirement?

    I live in a world with inflation and think its reasonable to look at assets in those terms.

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    VanRod Says:
    181

    @reapaul: Sounds like you and your wife and arrogant racists

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    Anonymous Says:
    182

    @Wreckonomics, This one goes to 2009

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    Bizznitch Says:
    183

    Rental units selling slowly…..the rot continues.

    http://www.timescolonist.com/news/victoria/Rental

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    elvince Says:
    184

    The Current on cbc will make a show on the housing bubble this week. Probably monday. It should be in the archive after the show:

    http://www.cbc.ca/thecurrent/

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    Uhh ohh! Somebody pointed out a difference between cultures. Time to play the race card.

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    Royce McCutcheon Says:
    186

    @Starving Artist: Thanks!

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    Royce McCutcheon Says:
    187

    @Not much of a name…:

    I'll echo this. My wife and I each have a PhD in the health research sector – and we both did very well in terms of research productivity, publications, connections, etc. I only finished recently and not too long ago I interviewed for jobs here where, with a straight face, I was told my starting wage would be 40k. Keep in mind these positions requested a PhD. I've since found a line on something a little better and the wife is doing well, but we could do MUCH better in TO, Cali, Boston, etc. I think the cheque is in the mail on this RE correction, but if things don't turn down enough and the gov't doesn't make sensible decisions, we aren't long for this city (for example: I know it's glib, but we will be forced to leave if gov'ts prop up economic hurt from RE losses by cutting things like research funding). I'm betting that, over the long term, other talent will be heading for the exits if things don't sort out.

    I'm starting to think that the best case scenario now is to rip the band-aid off quick and then let the healing begin.

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    reapaul Says:
    188

    #181 VR Thats what all the Liberal deniers say when they want to hide the truth. First , attack the source and then deny the truth. Way ta go my brainwashed leetle petunia. You should join the politically correct police force and start zapping the Polish immigrants at the airport.

    I pity the generations whose own sensibilities were crushed when the Federal Liberal Party decided it was going to carve up the country by using mass immigration as a weapon rather than as an economic model. People growing up in the 70's and 80's under the Trudeau Liberal have had the party line sensibilities shoved down their throats to replace any common sense they may have developed as they matured.

    Now, you jerk yourself off with catch phrases every time the 'wrong thing' is said publicly. Its wierd that the small minded jerks offs who haven't a single thought to claim as their own hop up on the 'correct' bandwagon like barking seals whenever their cue is called.

    If you were at all aware of the greater world around you then the political gong wouldn't sound off in yout head and drive you into fits of slathering monkey masturbation frenzy. And yes, when it comes to people of your obvious cretinism, I do feel somewhat superior.

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    Vancouver has had bubbles long before "Asians" were a significant part of the population, such as the boom in the early '80s. Look at who's buying at current prices — it's not exclusively first-generation immigrants by a longshot.

    Wanting something for nothing is a universal trait.

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    Limey Says:
    190

    What should the ideal Price/rent ratio be for a SFH in Vancouver? It was mentioned before that for apartments it should be at the most 120 – is there a general guide for houses? In fact and links to property evaluation matrix's would be great!

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    Best place on meth Says:
    191

    Speaking of Asians and real estate, remember this guy from the 80's?

    http://www.youtube.com/watch?v=jYqDS9i8zJw

    Some of his best quotes:

    # "Are you man enough to get off your lazy American ass and go to Vu’s seminars?"[1]

    # "A lot of your friends will tell you, 'Don't come to the seminar. It's a get-rich-quick plan.' Well, tell them, it is a get-rich-quick plan because life is too short to get rich slow."

    # "Tom Vu says his system is different than other experts'."

    # "Okay. You've seen me make a lot of money. You've seen my students who are average people make a lot of money. Isn't it about time for you to go out and make a lot of money?"

    # "I will not tolerate other immigrants."

    # "There's two kinds of work in America: hard work and smart work. Which one are you doing now?"

    # "This is not a country club! This is my house!"

    # "Are you afraid to ask your Boss for the day off to come to my seminar? Well then you don't deserve to be rich"

    # "Today I'm gonna show you how to drive a sports car. First, you need a lot of money!"

    # "Don't listen to your friends. They're losers!"

    # "Do you think these girls like me? NO, they like my money!"

    # "You are not significant! Leuf! Me judge!"

    # "At first I got lots of discouragement from friends and stranger who are loser! You know what these people kept telling me? They kept saying, 'Well Tom Vu, you a crazy nut, here you are, a poor immigrant, poor minority, speak no English, no contact, on and on, and you trying to be rich in America! You crazy, man! Look at people out there! They smarter than you are, they not even rich! Who are you to try?' And you know what? I have to keep telling these people every time, I kept saying, 'You are loser! Get out of my way! I make it somehow!'"

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    patriotz patriotz Says:
    192

    @Limey:

    Houses should not be over 150. Reasons for the difference:

    1) Houses have land which does not depreciate. Practically speaking all of the condo's value depreciates, thus a greater yield is needed to offset this.

    2) Lack of owner control with a condo. Major funding and maintenance decisions are out of your hands which increases ownership risk. This means BTW that condos should have a lower price/rent than multi-unit rentals. Absurdly, they are over twice as high, and multi rentals themselves have excessive price/rent these days.

    Houses got all the way down to 100 in the mid-80's but that was with 12% interest rates which I don't see returning.

    Price/rent of 150 is a gross yield of 8% which is a cap rate (net yield or return to capital) of about 6%, which is the historical norm for mortgage rates during times of low inflation.

    BTW that's for a house with a suite if this is common for the neighbourhood. Houses without suites will get bid up (i.e. higher price/rent) because of the potential suite revenue.

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    Just admit it Realpaul, you are a racist.

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    Anonymous Says:
    194

    nope, nothing has changed. still same bears bittering about not being able to own.

    Like or Dislike: Thumb up 0 Thumb down 0

    @Limey: "It was mentioned before that for apartments it should be at the most 120 – is there a general guide for houses?"

    It depends upon the property but detached houses typically have a higher ratio. If a property is a teardown likely to be built into a duplex upon sale, the price-rent ratio will be significantly higher. This is part (but not all) of the reason why the "mansions" on the westside have crazy low rents compared to their prices. For areas farther out that won't be densified soon or for new properties that are fully "suited up", there will be some, but not much if any, premium.

    From an analytical point of view, total the maximum value of potential positive and negative cash flows from rents, construction, and maintenance/taxes, and discount it to the present at about 8% or so. I posted something on this here last year.

    For the westside older style 3br bungalow + basement, I'd say 200X but what do I know.

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    Patriotz makes the good point about condos having more depreciation and risk to strata problems, hence lower price-rent ratios.

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    Lord Huggington Says:
    197

    Does the speed at which banks deal with foreclosures impact how quickly prices drop when a bubble bursts? We've talked in the past about how quick prices dropped in the States, but at the same time a number of banks were really dragging their heels when it came to dealing with a lot of foreclosures, and are only getting to them now because the government is making them. If the foreclosures in the US were dealt with swiftly, would it have forced down RE prices even faster there? That in mind, would banks in Canada plow through foreclosures relatively quick by comparison? I'd imagine that the answer to that is "Yes" since they can just foist the problem on the CMHC. I can't see a reason why they would want to doddle with them. If things play out that way, would that help to accelerate price drops for RE in Canada in comparison to what has been going on in the US?

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    Vancouver Not Realizing Full ‘Real-Estatic’ Potential –

    “I asked her about the rising listings. She said Vancouver is a real estate city and is under supplied with realtors. They can’t write the offers fast enough. She said money is huge and if you can warm a seat, you can make six figures.”

    http://wp.me/pcq1o-K7

    [breathless] I have an idea, why don’t we ALL become realtors, then sales would be ten times as high, prices would be 85% higher, and we could all accumulate and sell condos to each other and retire rich!

    When people are even saying that anybody who can “warm a seat, can make six figures” there is absolutely no doubt as to where we are in the market cycle. -vreaa

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    Best place on meth Says:
    199

    @vreaa:

    Bwaaahaaaahaaa, she's is so full of shit like every other cheerleader in this diseased city.

    There must be at least 5000 realtors in greater Vancouver and they can't handle more than the 100-200 sales per day we've been seeing lately?

    This has become a mental illness now, it's actually not funny and I shouldn't be laughing at these people.

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    @Best place on meth: "This has become a mental illness now, it’s actually not funny and I shouldn’t be laughing at these people."

    hahahahaha

    Similar to my experience reading that quote… this is now too much.

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    Gordon C. Says:
    201

    The price rent ratio is known as the Gross Income Multiplier in real estate appraising. As per the Appraisal of Real Estate Second Canadian Edition Chapter 22, subsection 16. The appraiser is cautioned that:

    'The properties analyzed must be comparable to the subject property in terms of physical, locational and investment characteristics. Properties with similar or even identical multipliers can have very different operation expense ratios and, therefore, may not be comparable for valuation purposes.'

    As an appraiser who uses the GRM in valuation of real estate on a routine basis, I would state that the use of a GRM for single family residences, or single unit condominiums while appearing to be reasonable on paper, is inaccurate and unreliable. Appraisers DO NOT use a GRM or Price/Earnings ratio to value houses. The GRM is used for properties with 3 or more self contained suites. Properties that are bought for their income producing properties – not for home ownership.

    Furthermore, according the the Appraisal Institute of Canada there are the following types of value other than Market Value:

    Use Value ie a manufacturing plant designed around a specific assembly process – think Titan Missiles

    Limited-Market and Special -Purpose Properties

    Like a Potash Mine

    Investment Value

    The value to a specific investor

    think of buying out your competition

    Going-Concern Value

    think – purchasing a business

    Assessed Value

    What the government does as per legislation

    NO WHERE, is there defined a "Fundamental Value"

    It does not exist.

    Everyone is entitled to their opinion, but this is fact there is no such thing as fundamental value in real estate and the use of a GRM or Price/Earnings ratio is incorrect for home ownership units. Find me a published source that states otherwise.

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    painted turtle Says:
    202

    Yesterday, a colleague of mine was sitting in my office and said :"Prices is Vancouver will always go up." She is in her 50's and owns a condo.

    I asked her to sit down and look at a few charts.

    The interesting part is that in 10 min I could see her going through the 5 stages of grief:

    1-Denial

    2-Anger

    3-Bargaining

    4-Depression

    5-Acceptance

    She finally said, with panic in her voice: "I should put my condo for sale right now! And move into my cousin's basement for a while."

    I asked her why, since she bought the condo 20 years ago, she is happy there, and intends to spend the rest of her life there. Her answer was: "Can you imagine the money I might lose?"

    I then thought of Patiotz, and how you do not own any money until you have sold an asset.

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    @painted turtle: what charts did you show her? What was persuasive?

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    @painted turtle: I'd imagine that your colleague was persuaded by your argument and not the charts themselves, as most people look at the charts and say "Prices in Vancouver will always go up.”

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    The “Can you imagine the money I might lose?” response to falling prices will bring 'pent up sellers' into the market, but impossible to guess how exactly that will effect the shape of the downward slope.

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    Anonymous Says:
    206

    "There must be at least 5000 realtors in greater Vancouver and they can’t handle more than the 100-200 sales per day we’ve been seeing lately?"

    according to their annual report 08-09, there are 9580 licensed realtors in the rebgv. their president, coincidentally, was/is? named Dave.

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    bums up2 Says:
    207

    I doubt that: the price graph is pretty persuasive to anyone who's ever seen a bubble before. A woman in her 50's should be able to spot it just fine.

    Painted Turtle probably showed here the "you are here" graph from your old website, VHB :D

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    The Ant Says:
    208

    @bums up2: Where is that 'you are here' graph these days. Have you done an updated version VHB?

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    Yalie Says:
    209

    I've also tried (usually in vain) showing people the price history graphs in Vancouver. A major problem with this approach is that many people look at the graph and say "See, look how much prices have gone up! I don't see why they should go down."

    I find it instructive, at this point, to show them a similar graph of recent prices in LA, Phoenix, San Diego etc:

    http://www.arizonarealestatenotebook.com/wp-conte

    …and then ask them if they think Vancouver is that much better than San Diego in terms of weather, mountains, ocean, etc.

    This usually causes the lightbulb to go on.

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    painted turtle Says:
    210

    1)I said : "Are you sure prices are going up?" and I showed yattermatters last charts for Cambie and Main. She was frowning.

    2) She shouted: "It is different here" so I told her that people in Miami and California all had good arguments to say it was different there too.

    2.1)Then she mentioned "the best city on Earth" and I told her that rankings are for expats, not for people looking for a job and needing to buy a home.

    3) Then I showed the graph on Paulb's site. She opened big eyes and whispered "there is a problem."

    I mentioned how much our household makes (she said "that's way above average") and I said that with two kids, I was thinking of buying a 3 BDR place. Then I went on the MLS and showed her what we could get for 3 times our yearly income… nothing!

    4) She said: "But all rich Asians want to invest here."

    so I told her that if I were a rich Asian, I would rather buy 3 houses likely to go up in California than one house likely to go down in rainy Vancouver. She said:"Yes, I would too."

    5) I showed how much I spend in rent for an excellent neighbourhood and how much interest I would pay on interests only for the same place, and she said: "Sure, there is no point for people like you to buy." Then she said "but real estate is a great way to invest." I answered: "Of course, if you buy at the bottom and sell at the top. I have done it a few times in the past and elsewhere, but I would not do it in Vancouver in 2010."

    6) She was starting to give way. So I showed the comparison of house price/income in several countries, and showed that at 9.6, Vancouver is the most expansive city of all. She said:"Wow! More than London? More than New York?" I think that is the point where she started acceptance.

    7) Then I showed the Agent Will's inventory graph and reminded her of what happened in 2008. She said with a sad look: "so, it is going to be like 1980 then… I knew so many people who went under then."

    The funny point is that when she started thinking of selling, she also said she should take the money and settle down in… a cheap and warm part of the US.

    What I found funny is when people assume that putting a property on the market is the same as selling…

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    tomvu Says:
    211

    Bear never make it rich living as landless peasant loser. Bear I can show you how to make it rich if you get off ass and stop being stupid.

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    Furlong is Paranoid Says:
    212

    Germany To Add To Goldman's Headaches, Prepares To Sue Firm

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    april 19th looms

    pre-rate hike rate seekers will dwindle in the weeks ahead

    buyers will get nervous regarding rising inventories

    specuvestors will shit their pants regarding rising inventories

    prices will crash down, with the first 20% happening with lightning speed

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    @tomvu: Bear never make it rich living as landless peasant loser.

    Dude, you must fix your teeth, clean up your mouth and stop to eat dogs. Your bad breath goes through the network, it stinks like shit. I had to restart my computer.

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    Boombust Says:
    215

    @painted turtle:

    I don't even bother anymore. Haven't for a LONG time, in fact.

    Explaining to people what is really going on in the RE market is a waste of time, for the most part.

    People will do what they will do.

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    elvince Says:
    216

    But San Diego, New-York or London don't have something that Vancouver has: A hockey team that can make the playoff, and with weird green-pajama-wearing fans. That's gotta be worth paying 1000$/sq feet for a shoebox in the sky.

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    Unfooler Says:
    217

    Saturday night playoffs in Vancouver the scalpers were taking a loss a adundace of tickets available, seems everyone blew their wad on the Olympics and with chump change left in peoples pockets they are passing on entertainment.Likely saving to make the next mortgage payment. I sold my place a couple weeks ago in 1 day! Ladies and gentlemen sell when the prices are high before the buyers run dry. As Mr. T would say Don't Be a Fool!

    Enjoy folks we are about to go a one heck of a waterslide ride!

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    Anonymous Says:
    218

    @post 201

    I don't have a dog in the fight but a quick search turns up this.

    "The fundamental value of a house is the present value of the future housing service flows that it provides to the marginal buyer. In a well-functioning market, the value of the housing service flow should be approximated by the rental value of the house."

    http://tinyurl.com/y3lw8yt

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    Listen crew, people know that Canada has an immigration policy and a fiat money system. Stu knows the new ethnics all want his land. Stu knows this means Westwood plateau land has an airtight diaper. Stu knows this could be the year for the Canucks. The crash was a 1982 one nighter.

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    I think a graph of Vancouver "you are here" prices superimposed over a graph of San Diego or Miami "they are here" prices would do the trick.

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    Anonymous Says:
    221

    #211,

    i thought bears are the smartest? they can type a lot.

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    Limey Says:
    222

    Jesse and Patriotz – thanks for the info.

    Gordon C. – I take your point about the price/earning ratio being inaccurate for home ownership. I was running the numbers on houses we know in North Van – friends of ours just bought it for $950,000, but the house only generated $2500 in rent – X150 that would put the price at $375,000 – a 60% decrease. Do you think that's realistic, or just a bear daydream?

    If I'm looking at buying a house just like this – what price do I hold out for on the way down?

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    patriotz patriotz Says:
    223

    @Limey:

    I think we will see a rapid decline of about 40% over the next two years. After that there will probably be a much slower decline over many years. I do think we will see 150x rent again, but due to (slowly) increasing nominal rents that does not mean nominal price will come down by 60%. It does mean that real prices will come down by 60%.

    Note the proviso that Jesse gave, if a neighbourhood has viable potential for densification (I mean rezoning) price/rent will remain higher as the land value will reflect the future denser use.

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    patriotz patriotz Says:
    224

    @Limey:

    I was running the numbers on houses we know in North Van – friends of ours just bought it for $950,000, but the house only generated $2500 in rent – X150 that would put the price at $375,000 – a 60% decrease.

    Further to this, look at the much-reported house of Tim Geithner in Westchester County (just outside of NYC):

    http://www.zillow.com/homedetails/32-Maple-Hill-D

    Geithner was unable to sell at $1.5 mil and now rents the place out for $7500/month. Zillow thinks it would sell for $1.3 mil. Using the same price/rent, your friends' house in North Van would go for $433K. And house prices in metro New York are by no means at bottom.

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    "there is no such thing as fundamental value in real estate and the use of a GRM or Price/Earnings ratio is incorrect for home ownership units"

    So prices are based on what? What someone else is willing to pay? There will always be people who are willing and able to pay a premium to own. It doesn't mean that they aren't overpaying for the right to do so.

    Prices used in appraisals are very different from determining a property investment's value. Sometimes there are few properties in a neighbourhood that are rented out but that's no excuse to use current prices as a measure of investment potential. There needs to be grounding.

    I have no doubt that it is worth it for CURRENT BUYERS to pay a high price for a specific property. What annoys me is them jawboning at some party about how their purchase was a good financial investment. It wasn't.

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    painted turtle Says:
    226

    For the past 4 years, bulls were bragging about the money they were making will bears were fighting back with sound educated arguments.

    When the market will be on its way down, bear will be ecstatic that the market is back to reason, but I am wondering what SOUND arguments the bulls will find to explain that the market always go up. Saying "I win the lottery every morning and you don't, you idiot" will not work anymore.

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    Jansu Says:
    227

    Bear once, bear forever?

    I have been, unfortunatley maybe, a bear since four years in vancouver. I just got a little bit of cash and I am thinking of investing into "something" on the safe side like mutual funds or so. My only fear now is that we the RE market GOT to crash in the next year(s) or so. So if it is clear for that investing in RE is a poor idea I m wondering if investing in Canadian based mutual funds is a bad idea too. Do you think that a RE crash could take the Canadian economy with it? I m thinking instead to invest into US mutual funds. They already cleaned a big chunk of their dirty laundry…

    Any though?

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    patriotz patriotz Says:
    228

    @Jansu:

    Do you think that a RE crash could take the Canadian economy with it? I m thinking instead to invest into US mutual funds.

    I think a Canadian RE crash (which is now inevitable) will result in a double dip recession here. However I think double dip or not south of the border, both US and Canadian stocks are too expensive now. I'm not buying and the last thing anyone saving for a house should do is buy into the stock market. The assets are much too correlated. You don't want your stocks and RE to be down at the same time.

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    Gordon C. Says:
    229

    Jessie, market value is not based on what someone pays for a single property. Market value is the collection of recent sold prices of similar properties to the one you are looking at to buy. That collection of prices will fall within a range of values with most of the data centering around one price point. The prices of these sold properties are economic indicators of market value. So, a single property that sells outside of this range of value would not be considered at fair market value.

    A range in value allows for the different motivations of the buyers and sellers. For example, if the seller is under duress and desires to sell the property quickly they may elect to sell at the lower end of the value range. This would be a type of forced sale or quick sale because the property is not being exposed to the market for a reasonable time to affect a sale.

    Conversely, a buyer could sell at the high end of the value range, by what they include in the sale or offering favorable terms to the buyer. Developers do this, by offering a high price but a long closing date.

    For valuing strata and single family homes, typically only two approaches are used. The market approach as briefly explained above and the cost approach which I hope is self explanatory. A third approach known as the Income Approach is rarely used on homes, and if it is, then only as a cross check to the final estimate. It is highly unlikely that you will find an appraiser concluding a value on a GRM or Price Earnings Ratio for a single family home or condominum. The body that governs appraisal practice in Canada, the Appraisal Institute of Canada, would likely consider disciplinary action against that appraiser for doing so.

    As for there may be little or no comparable sales in the neighborhood. Allow me to explain that this is generally the case, except for new subdivisions, of all appraisals assignments. The appraiser has to make adjustments to the comparable sales and that includes allowances for location.

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    patriotz patriotz Says:
    230

    @Gordon C.:

    There are only two meaningful valuations that can be applied to any asset:

    1) Market price, which is what you can sell it for, and

    2) Fundamental value, which is what the asset returns to you from its earnings if you never sell it.

    And in Vancouver RE today (1) is more than double (2). Which means the current market is a Ponzi scheme.

    "Price is what you pay, value is what you get"

    - Buffett

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    stagnate Says:
    231

    limey says:

    Gordon C. – I take your point about the price/earning ratio being inaccurate for home ownership. I was running the numbers on houses we know in North Van – friends of ours just bought it for $950,000, but the house only generated $2500 in rent – X150 that would put the price at $375,000 – a 60% decrease. Do you think that’s realistic, or just a bear daydream?

    it's not realistic, there's too much demand for the land. 90% of the world's real estate the land is worthless because supply exceeds demand. 100/150 would be the appropriate rent multiplier dependant on inflation and other macroeconomic prospects for that 90%. unless there's a credit crunch of mammoth proportions a ratio of less than 300 on north van sfh's is a near impossibility.

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    Globello Says:
    232

    To understand just how devastating higher rates wiil be to the housing market, first you need to understand that those insanely low rates that interrupted our crash were not only the lowest EVER, but a desperate reaction to the worst financial mess the world has seen in modern history.

    To hve rates double in a year wouldn't even bring them back to the 5 year norm.

    In the meantime, other fundamentals like unemployment, demographics, and affordability have deteriorated even further.

    At least potential sellers seem to be paying attention.

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    joycer Says:
    233

    @painted turtle:

    Prepare yourself to hear a lot of this:

    down 5%

    "There's never been a better time to buy"

    down 10%

    "There's never been a better time to buy"

    down 15%

    "There's never been a better time to buy"

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    Juicy post from Larry Y:

    http://www.yattermatters.com/real-estate/double-h

    Looks like Realtors are getting scared

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    Here's another example of the circular thinking fueling the bubble:

    This from Peter Pan, via e-mail to VREAA, 18 Apr 2010 3:09 pm -
    http://wp.me/pcq1o-Kg

    "An early 30s administrator in our downtown Vancouver office asked us if it was a good idea to buy a house with no money down. She pulls in 35-40K maximum and her husband is underemployed slinging coffee. We said "Generally no, because of the risk in involved". I added that rates were going up and she could be easily left with negative equity. Last Friday, she revealed her latest plan as she scanned the maps on the MLS website. She and her husband were going to "flip" a property to come up with the downpayment for a house. After all, she has a cousin who is a carpenter. She didn't mention how she was going to come up with the downpayment for the flip."

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    Kite towards moon Says:
    236

    Gordon C is right and the forced sale value will pick up the price of next unit located next to it by square feet.It means, if any owner intentionally choose to sell their unit on lower price the market value for the unit will go up, quick profit for buyer of that unit unless there was not a bulk sale in the same floor.

    Weekly stats here

    Listings up by 4%

    Sales up by 24%

    Sell list up by 8%

    Painted Turtle,What type of argument would you like to use from april 20th? weekly stats.

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    girlbear Says:
    237

    @Kite towards moon: Totally expected the last week before the new rules kick in.

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    Best place on meth Says:
    238

    IT'S THE FI-NAL COUNT-DOWN!

    http://globaleconomicanalysis.blogspot.com/2010/0

    >>>The number of re-sale houses on the market in Canada hit a record in March, with the new supply helping ease price pressures in the market, the Canadian Real Estate Association said.

    Some 97,663 properties were listed for sale on the Multiple Listing Service in March, that’s 20% higher than the previous March record set in 2008, CREA said.

    A total of 233,402 new listings have come on stream since the beginning of the year, and that’s more than any other first quarter on record, it said.

    The association said that while demand remains strong, there are signs the market is cooling off from the record-setting pace of the fourth quarter.<<<

    That is exactly how the bust started in the US: record units for sale with demand still strong. A few short months later demand collapsed while supply soared.

    Mike "Mish" Shedlock

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    buff_butler Says:
    239

    @Gordon C.:

    What they are referring to is a property whos price is likely to payoff in a reasonable amount of time as a simple rule of thumb. Various major riets (i know of 2 personally) that use this however I think the numbers are slightly higher. This is valuing a property from an investment perspective. You’re referring to property valuation from an appraiser perspective. Now think about this, there is a huge difference. One doesn't give you a good judgement on whether the property is a good investment one does not. An appraiser is not meant to make a value judgement on a property, only to say what price a property will sell at now. An investor will make that same judgement only their goal is to say what the property will sell at in the future + revenue collected – expenses; so to argue they are the same I think your being disingenuous.

    Fundamental value I’m not sure is the correct term but the idea likely can be derived from a concept known as net present value.

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    Gordon C. Says:
    240

    As Patriotz has said:

    "there are only two meaningful valuations that can be applied to any asset:

    1) Market price, which is what you can sell it for, and

    2) Fundamental value, which is what the asset returns to you from its earnings if you never sell it."

    One of the assumptions to Fundamental Value is that you never sell the property. But that is not realistic and a one reason why you should not compare what a renter pays to rent a home to the price a buyer pays to live in a home. There is no pot of gold at the end of the rainbow for the renter. And that future value of the asset is always changing depending on peoples expectations. If prices are going up at 15% a year that pot gets massive if property values are falling, that pot can go negative. The fundamental value does not account for this market force or the anticipated return on the home owner's equity.

    The other good reason, is that they are different markets. The renter is generally not under the same motivation as a prospective home buyer, and may not be in a economic position to purchase a home. When comparing properties it is important to keep the type of prospective purchaser in mind when selecting comparable sales. You don't compare a retirement rancher to a multi-level property because they appeal to different target markets. If you do, your analysis may be way off. The same for renters and home buyers as they are not competing for the same rights to the property. The renter wants to use and enjoy the property. The home owner wants to use, enjoy and sell the property.

    I understand that people desire some semblance of normalcy in this crazy real estate market but you don't have to borrow concepts from the financial world. The concepts and principles of real estate already exist, defined and established in real estate appraising.

    And no, you can not compare a New York house to a Vancouver home in order to get a price/rent ratio that should be so basically obvious.

    But why do you even want to derive a fundamental value? It has no validity in estimating property values?

    Perhaps, you want a gauge of when it will be a good time for you to purchase a home. Well, that depends on YOU, not a fundamentally unobservable value.

    The forces you should be looking at are social trends, economic circumstances, government controls and regulations and environmental conditions. These are the factors that influence value. When you see changes in these factors that influence value then you can anticipate the change in market prices.

    Or simply just count the for sale signs in your neighborhood.

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    joycer Says:
    241

    @Gordon C.:

    "The forces you should be looking at are social trends, economic circumstances, government controls and regulations and environmental conditions. These are the factors that influence value. When you see changes in these factors that influence value then you can anticipate the change in market prices."

    Well said, you'd have to agree then that interest rates, the end of government purchases of mortgage securities, household debt levels, ballooning inventory and the CMHC's new policies favour a correction in housing prices.

    Oh, and don't forget to add RICH ASIANS to your list!!!

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    Gordon C. Says:
    242

    "Good" investment "Bad" investment are subjective words. Obviously whats good to you may not be good to me. The only one that can judge if its a good investment or not – is you. And, there certainly is an investment value.

    Investment value represents the value of a specific property to a particular investor based on that person's (or entity's) investment requirements. Which may have no relation to me or you.

    However, having said that. It's a place to start. Identify your personal requirements and set a goal. When that property reaches that goal, make your purchase. In that way it will be a good investment for you. You may want to revise that goal over time, as your personal circumstances change.

    So someone may set a goal of buying a home when it reaches 150 times rent. That's good – that's their goal. But my personal circumstances are different than that person – and so is my goal. I would suggest that we stop looking over our shoulder to see what the other guy is doing and start looking forward to see where we are going.

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    oneangryslav2 Says:
    243

    @Gordon C.: Wow! Is there now a Journal of Post-Modern Investing? I haven't read so much b.s. since my first year of graduate school.

    So someone may set a goal of buying a home when it reaches 150 times rent. That’s good – that’s their goal. But my personal circumstances are different than that person – and so is my goal.

    I don't understand what you mean by this. My goal is not to buy a home when it reaches 150 time rent; my goal is to buy when it is a better value than renting. Historically, in Vancouver, that means buying when the price/rent ratio for SFHs reaches about 150.

    So, if your goal is not to buy when it is better value than renting, what is your goal? And I don't mean throwing out a numericl value (i.e., X time rent) but on what financial/philosophical basis are you basing your buy/rent decision?

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    Gordon C. Says:
    244

    Yes, people are jawboning at parties saying how great of an investment their home has been.

    There just talking about appreciation, they haven't realized any profits. It's the same as when I open the paper and read about my stocks, until I sell I haven't made anything. Pat them on the back, tell them "way to go buddy – can you spot me a twenty" I feel anyone who is crass enough to speak of how much they have should have some of that wealth taken away. Hit them up for a donation and send them pamphlets for third world countries that need help. Shame them.

    Ever wonder why the truly wealthy – keep their mouth shut.

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    Anonymous Says:
    245

    Can anyone tell me what is honestly the best prediction of price percentage that houses will fall in the coming year. Cause people tell me that house prices have gone up 20 percent since peal of 2008 and that that's all it will correct?

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    Gordon C. Says:
    246

    Well oneangryslav2, you got yourself a goal.

    My goal for buying is not to purchase until the interest rate is near 10%, so that I can give myself a self directed RRSP mortgage.

    And don't you mean your only year of graduate school?

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    @oneangryslav2: @Gordon C.: Wow! Is there now a Journal of Post-Modern Investing? I haven’t read so much b.s. since my first year of graduate school.

    hahaha

    "Investment value represents the value of a specific property to a particular investor based on that person’s (or entity’s) investment requirements."

    Like or Dislike: Thumb up 0 Thumb down 0

    @oneangryslav2: @Gordon C.: Wow! Is there now a Journal of Post-Modern Investing? I haven’t read so much b.s. since my first year of graduate school.

    "Investment value represents the value of a specific property to a particular investor based on that person’s (or entity’s) investment requirements."

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    Gordon C. Says:
    249

    Onceangryslave said:

    "I don’t understand what you mean by this. My goal is not to buy a home when it reaches 150 time rent; my goal is to buy when it is a better value than renting. Historically, in Vancouver, that means buying when the price/rent ratio for SFHs reaches about 150."

    When market prices fall, there is a reasonable chance that market rents will also fall. So you may have to revise that goal as one is tied to another and you don't want to be end up a vacillating vassal.

    Perhaps you might want to set a goal such as your monthly payments not being greater than 30 percent of your gross income.

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    Gordon C. Says:
    250

    Anonymous said:

    "Can anyone tell me what is honestly the best prediction of price percentage that houses will fall in the coming year. Cause people tell me that house prices have gone up 20 percent since peal of 2008 and that that’s all it will correct?"

    Your going to have to watch the momentum of the market, we are entering an interesting point in the marketplace. The bet is that we will be seeing prices come down after April. However, strange things happen when politicians feel they might lose their jobs.

    The first indication of a price drop in the last slip in prices were anomalies in the marketplace. Tales of people who had their home up for sale for a couple of months but no offers, yet the stats were showing a different story. Last week I came across such a property, no offers and even more telling no lookers! Stories like that are scary to home sellers, because that's what happened to some of them in the 80's.

    Back then inventory shot up – then inventory fell.

    As those people who did not have to sell, took their homes off the market. That only left homes under duress, such as estates, divorces, court sales, re-locations, etc. Properties that had to be sold in 90 days.

    Then the market was like Cher without her makeup on.

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    patriotz patriotz Says:
    251

    @Gordon C.:

    . It’s the same as when I open the paper and read about my stocks, until I sell I haven’t made anything.

    I make money on my stocks every month, without selling.

    Guess how?

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    @Gordon C.: "The forces you should be looking at are social trends, economic circumstances, government controls and regulations and environmental conditions. These are the factors that influence value."

    It's important to understand why these factors influence value. It's because they are indicators of future income gains which are typically closely tied to rental appreciation. A property's fundamental value is not some abstraction based upon macroeconomic events, it is based upon providing a return on capital which is tightly connected to rents and incomes. Appraisers don't use this because they need to appraise based upon market value. A look south of the border shows how out to lunch some of these market-based appraisals turned out to be.

    All your explanations about how to value properties complicate the issue. You are trying to justify piss-poor returns on capital based upon what in aggregate is next to impossible to achieve: rising incomes and rents with an economy highly dependent upon real estate and construction for its GDP. I read this on US blogs four years ago.

    If I'm making a 40 year investment I need to understand why real estate has value at all and, based upon what real estate prices do over generations, using what your next door neighbour is willing and able to pay is nothing more than a hope.

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    oneangryslav2 Says:
    253

    @Gordon C.:

    And don’t you mean your only year of graduate school?

    Wrong answer.

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    oneangryslav2 Says:
    254

    @patriotz: Exactly. Sometimes it seems as though nobody who began investing after about the mid-1990s has ever heard the word dividend, let alone know what it means.

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    Gordon C. Says:
    255

    Stagnate Said:

    "it’s not realistic, there’s too much demand for the land. 90% of the world’s real estate the land is worthless because supply exceeds demand. 100/150 would be the appropriate rent multiplier dependant on inflation and other macroeconomic prospects for that 90%. unless there’s a credit crunch of mammoth proportions a ratio of less than 300 on north van sfh’s is a near impossibility."

    Demand isn't fixed. Demand is dynamic. Raise the interest rate to 10 percent and watch demand dissipate. It is not impossible for supply to exceed demand in Vancouver. In fact, it happens at least once a decade in Vancouver. Just as this market was unpredictable on its way up – so will it be on its way down. You will never know the bottom, until its past. And then we will have years of flat nominal prices – who wants to buy in that market. Why not wait a little longer, build a bigger down payment and get prepared for the next up cycle.

    I mean it really sucks when your buddies are going to Thailand and your late with your payments and you still have 23 years to go on the mortgage. Sure you can go to Thailand when your fat and fifty but its not the same.

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    Gordon C. Says:
    256

    Jessie said:

    "If I’m making a 40 year investment I need to understand why real estate has value at all and, based upon what real estate prices do over generations, using what your next door neighbour is willing and able to pay is nothing more than a hope."

    You can't throw out centuries of proven economics because you don't like them.

    The simple answer to your question why real estate has value is because YOU think it does and so does your neighbour and your neighbour's neighbour, etc., etc.

    You can buy a condominium that does not allow rentals. Since you can't rent the condominium what's it worth? Well, under fundamental value would that be nothing?

    Or because you neighbor wants it more than his neighbor its worth one dollar more that what the second neighbor offered.

    So you have to ask yourself in 40 years from now, in the year 2050 will real estate have value?

    I'm guessing it will.

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    patriotz patriotz Says:
    257

    @Gordon C.:

    It is not impossible for supply to exceed demand in Vancouver. In fact, it happens at least once a decade in Vancouver.

    Supply always equals demand at the market price, by definition.

    The situation where supply of RE appears to exceed demand arises because the asks for RE (MLS) are visible but the bids (people who want to buy at some price) are not. If more than the usual number of people are asking over the market price – usually because the market price has fallen and they don't want to face up to it – and properties don't sell, you appear to have "excess supply". You don't. A property where the ask is above market is not really for sale.

    If you had a "buyer's MLS" where people could list their bids in a similar way, there would always appear to be "excess demand", since there are always more people willing to buy at some price than people willing to sell at some price.

    Excess supply in RE really only exists where the number of dwellings exceeds actual or potential (kids moving out, etc) households. And this is certainly the case in some markets in the US, Ireland, etc.

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    buff_butler Says:
    258

    @Gordon C.:

    "You can’t throw out centuries of proven economics because you don’t like them."

    Isn't this what your doing? You seem to be nit-picking peoples arguments and taking them for absolute word without any flexibility or creative thinking. This is kind of the funny part about finance and investing; both parties thing the other side is missing information and will always disagree. Part of being a successful investor is putting the probabilities in your favor and not on chance. Having said all that what exactly are you trying to accomplish here?

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    Gordon C. Says:
    259

    Patriotz said"

    Excess supply in RE really only exists where the number of dwellings exceeds actual or potential (kids moving out, etc) households. And this is certainly the case in some markets in the US, Ireland, etc.

    Yup, that's it. Household formation takes a dive. Fewer households are being created, the moving vans are moving more people out than in, people are buddying up, moving back to mom and dad's home, staying in relations because they can't afford to leave, condominium complexes converted to rental housing, big holes in the ground and abandoned foundations of buildings not to be built for the next decade.

    Yup, that would be it.

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    patriotz patriotz Says:
    260

    @Gordon C.:

    Yup, that would be it.

    No it's not. Those people moving back with their parents are doing so because landlords will not adjust the rent downward, i.e. landlords are asking too much and are not finding renters.

    Excess supply of housing exists only when dwellings cannot be sold or rented at any price. That is completely different from owners refusing to sell or rent at market price and letting properties sit empty.

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    Wreckonomics Says:
    261

    @Gordon C.: Investment value represents the value of a specific property to a particular investor based on that person’s (or entity’s) investment requirements. Which may have no relation to me or you.

    you're kidding right? What your talking about isn't investing, it's buying something because you want it. When most people speak of an 'investment' they're talking about something that will give them gains later on.

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    Open house report:

    I checked out a house in N Van today that my wife and I have always liked. It was sold for 900k a few years ago and now is on for 1.4M after a reduction in early March from 1.5M.

    In defence of the seller the house has had extensive renovations and an extension. Now after 300 days on the market they still have not sold and are probably too late to salvage any profits.

    I asked the agent how the price reduction impacted the activity. She told me they had received offers but couldn't come together on price. I am curious how far apart on price? 100k, 200k? I bet the seller will be kicking themselves for waiting so long to negotiate a sale. They supposedly flip homes so this one may be a lesson learned. They are eager to sell now too.

    As far as activity, pretty good I guess. There was someone leaving as we came in, and coming as we were going. This is an extremely hot area though, so it's to be expected.

    Look forward to hearing what anyone else has experienced today.

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    Gordon C. Says:
    263

    buf_butler said:

    "Isn’t this what your doing? You seem to be nit-picking peoples arguments and taking them for absolute word without any flexibility or creative thinking. This is kind of the funny part about finance and investing; both parties thing the other side is missing information and will always disagree. Part of being a successful investor is putting the probabilities in your favor and not on chance. Having said all that what exactly are you trying to accomplish here?"

    Dude, I'm just blogging.

    Some people have asked me a direct question and I'm trying to give my point of view. After all, real estate appraising is what I do. If you want to make it a private site, fine. If I were you, I wouldn't feel threatened, the negative numbers show that the majority are in tune with you.

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    Keeping an Eye on Th Says:
    264

    R.I.P

    1980 to 2010

    The Great Canadian Housing Bubble

    It's down to a trickle of Chinese believers showing up at open houses with paint faded 1997 Honda Accords with doilies on the head rests.

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    Gordon C. Says:
    265

    "you’re kidding right? What your talking about isn’t investing, it’s buying something because you want it. When most people speak of an ‘investment’ they’re talking about something that will give them gains later on."

    I'm not kidding maybe you should as the people who wrote it

    source: The Appraisal of Real Estate 2nd Canadian Edition, Second Printing 2005

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    Gordon C. Says:
    266

    Patriots Said

    "No it’s not. Those people moving back with their parents are doing so because landlords will not adjust the rent downward, i.e. landlords are asking too much and are not finding renters."

    You lose your job, it doesn't matter how much your landlord drops the price

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    Unfooler Says:
    267

    Open Housing Today: I checked out a few, all 3 were vacant, each time i told the agent my story that i just sold and was "looking" but in no hurry to buy, each one asked are you going to rent? As if they saw right thru me, all of them seemed to have no confidence in anything. I asked one if he was seeing a turn the page in a downward way and he got all defensive saying the markets are not headed down. I saw this in 2008 and this time its here to stay.

    Happy Sunday folks!

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    Gordon C. Says:
    268

    Jessie Said:

    "It’s important to understand why these factors influence value. It’s because they are indicators of future income gains which are typically closely tied to rental appreciation. A property’s fundamental value is not some abstraction based upon macroeconomic events, it is based upon providing a return on capital which is tightly connected to rents and incomes. Appraisers don’t use this because they need to appraise based upon market value. A look south of the border shows how out to lunch some of these market-based appraisals turned out to be."

    Note: I'm taking the entire paragraph not just one sentence. I'm not nit picking.

    The problem with your statement is the word "tightly" change it to loosely and it would be more accurate for single family ownership. It would be tightly, if we were talking about investment grade properties like the Bentall Centre. But sadly, uncle Vic's manufactured home in South Surrey just doesn't cut it as an investment property.

    The rental market is imperfect too, especially when it comes to single family homes. Do you really know what the house across the street will rent for? More importantly can you prove it? There is no mls system that shows realized rents. What if your guess is off by 20 percent. Instead of $2,000 it $1,600. Times that by 150 its either $300,000 or $240,000. What if the factor isn't 150 but is 200, then its $300,000 or $400,000. What if you not right on either? Who determines these rents and factors? Realtors? Appraisers? Bankers? CMHC?

    ugh. That's it, I'm going to watch the Treehouse channel now.

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    Raincouver Says:
    269

    "paulb says…

    I checked out a house in N Van today that my wife and I have always liked. It was sold for 900k a few years ago and now is on for 1.4M after a reduction in early March from 1.5M.

    Look forward to hearing what anyone else has experienced today."

    To be fair, Paul, probably most posters here aren't looking at properties in excess of a mil. But, I could be wrong and there might be tons of people sitting on wads of cash. Maybe I'm just out of touch with reality – that happens a lot when you live in vancouver.

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    Gordon C. Says:
    270

    Patriotz Said:

    "If you had a “buyer’s MLS” where people could list their bids in a similar way, there would always appear to be “excess demand”, since there are always more people willing to buy at some price than people willing to sell at some price."

    Now that would be COOL!!!!

    You can do that with Hotel rooms. I think its called Ibid or hotel.com

    I bid $400,000. So what did I get?

    Well Gordo, you just bought yourself a bachelor suite in Chetwynd along with a loaded revolver.

    And no, this is not meant to dis Mr. P. It's a joke like what's the difference between a magician show and a chorus line. One is a cunning array of stunts.

    Okay, found the car keys, I'm gone.

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    Boombust Says:
    271

    "Okay, found the car keys, I’m gone." – Gordon C.

    Hope you're not drinking and driving!

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    @Raincouver:

    I hear ya. We can't afford that home either but my wife wanted to look as we have always admired it. And hey, if the market gets absolutely murdered… :)

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    @Gordon C.: "Well, under fundamental value would that be nothing?"

    Don't be silly. You must know what imputed rent is. I don't know how you invest but unless there is a way of converting a property's value to a cash flow, imputed or fungible, I have no idea how to ground valuations any more than what someone else is willing to pay, and that's a cop out in my book.

    Anyways, enjoy the warm weather and best of luck in your endeavours.

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    @Gordon C.: Memo to Gordon C: People aren't voting you down because they don't appreciate contrary arguments or they don't like appraisers. They're voting you down because you are presenting yourself as a know-it-all, arrogant prick.

    Why don't you bring some positive attitude to the table; contribute to this online community rather than speak down to it?

    Here's a question for you, from your area of expertise: How much pressure is on appraisers to make sure that dealmakers 'get their price' and the deal goes through? Do the more pliant appraisers get more business because of this, or do the 'by the books' appraisers do just fine? Do banks/CMHC pay close attention to the quality of appraisals, or do they just care that someone has signed off on it?

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    Best place on meth Says:
    275

    Went out for a most enjoyable drive this fine sunny day and was amazed at all the "Open House" signs littering the sidewalks.

    I've never seen so many in my life, not even at the factory where they make "Open House" signs.

    I'm still wiping away the tears of joy.

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    Vansanity_ Says:
    276

    Gordon C – When people are discussing "fundamental valuations/ratios" such as price:rent or price:income, are in regard to affordability not market value or prices.

    Prices are set by the market – what someone is willing to pay. The ratios illustrate that prices are out of touch with affordability. Which, historically, leads to a "correction". Note the term correction is commonly used by appraisers in real estate. The term implies that prices are incorrect or wrong, I digress.

    So I have to ask, what are you going on about? Are you saying that "fundamental valuations/ratios" like price:rent and price:income aren't in your appraisal textbook so therefore they're meaningless or do not exist? If so, thanks… I guess.

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    AnonymousAA Says:
    277

    We went to an open house today (just one, though I was a bit surprised to see all the open house signs up everywhere!) We got to the condo we were looking at in New West, the realtor was at the front door awaiting arrivals, looking bored out of her mind. Condo was HUGE, over 1700 sq ft, 3 beds plus den…price is a recently reduced $369k. Wonder why it hasn't been snapped up. Asked the realtor how long it's been on the market, she cagily replied "Awhile..but it's only been a month at this price" Too bad the strata fee is $500/month, which might be the killer of the deal for some. Anyway, the realtor asked us if we just started looking and asked if we have financing. She said we should get the financing ASAP as she hears banks are becoming more stringent in their income requirements-more documentation required. Interesting. So I guess I can't lie anymore and say I have an unreported side business which generates $10k/month? lol

    I don't see how things can go up from here.

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    Best place on meth Says:
    278

    @Vansanity_:

    I believe Gordon went to the park to chase squirrels.

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    Absinthe Says:
    279

    @Gordon C.:

    As far as I can tell, to sum up your argument, you're suggesting: "watch the market and that will tell you what the market says the current value is."

    Which, to me, is almost as useful as suggesting that if you look out the window you can see what the weather's like.

    When you say this: "Who determines these rents and factors?" then that's easy.

    RENTAL is a business. It's easy to look at and plan for the business like for *any other business area*. Rental is serving a demographic, and those demographics are known, which means that the market tolerances are known. And once you know the market tolerances, you have a pretty complete picture of your competition, and the market saturation within a given price point – jeez, it's even MORE predictable than demand and market price point for Polly Pocket dolls or restaurants, because people need houses and they need to have some percentage of disposable income left over.

    Rents are a knowable factor because *rents are tied to incomes*. A city cannot have most of its rental above a certain tolerance line because people cannot spend all of their disposable income on housing. If you are, for example, trying to rent your 2 bedroom suite out for $2750 in Vancouver, (nopetsnosmokingmaturerentersnopartiers), you are competing with a crapload of other places for a small pool of people capable of renting that space.

    Only 18% of Vancouverites make more than 100K per year, for whom your suite is considered "affordable". There will be some other non-zero percentage of people who will shack up six to a suite, and another non-zero percentage of people who will spend up to half their gross on housing, but these people will have trouble passing your (necessary) credit check at that price point.

    So you can find an upper limit and a range of prices per square foot in a given local market – knowing that people will share and double up on the low end – and you CAN understand who your customer base is. *People cannot take a loan to pay the rent* – or if they do, by spending money on credit cards, that ability is capped. Which is why we all care about things like debt to income ratio: available credit can skew what the market is doing, but it has the effect of reducing people's FUTURE spending ability. Yikes!

    Any rental market will have tiers, and based on census data, you can easily, publically, produce a pretty good picture of the market demographic.

    Market research: even landlords can haz it.

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    ReadyToPop Says:
    280

    Short selling, which has been around since at least the late fifteenth century, disturbs many investors because it is a contrarian play. It is the investment for those who don’t want to goose-step with the crowd. It is for those who are automatically suspicious of the great authorities in our lives—the regulators, the central bankers and the companies that we are told are sure things. But this public criticism of those who don’t want to go along with popular sentiment has been going on for many years.

    The Function of the Short Seller

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    Here is an interesting bulletin from a Vancouver lawyer regarding the new mortgage rules and their effect on pre-sales.

    http://www.harpergrey.com/assets/attachments/105….

    Pages 4/5 have a few different scenarios. They get pretty severe with a 15% market drop.

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    Gordon C. is debating in good faith. I don't know he's necessarily incorrect but I disagree that owner-occupiers are subject to different market forces than investors. There is too much overlap for them to be decoupled.

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    @paulb: That's scary stuff; I hadn't considered what happens to presale buyers under the new rules much. IMO anyone paying current prices for a typical presale contract gets what he or she deserves. Good find and +1.

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    Best place on meth Says:
    284

    Shanghai market getting a beating Monday morning.

    http://finance.yahoo.com/q?s=%5ESSEC

    AH YAH!!

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    Absinthe Says:
    285

    @re: appraisal:

    … One last thought based on Gordon's idea that you're looking at a range maybe as big as 100K based on not being QUITE sure what a given property might rent for. Yep, that's true, especially given things like possible duplex zoning on one lot and not the other, which would affect the price and not the rent. Or, as it may be, the property's transit accessibility: important for the middle and lower classes. Or whether or not it allows pets – there's an extra $150/month right there.

    There's still a pretty good feel for what in the aggregate properties should look like when spread across the population.

    $1 million dollars as an average simply ain't it.

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    tincup Says:
    286

    Open house report:

    I didn't get out much this weekend because of Daddy Duty, but conveniently my neighbor put his house on the market and has had open houses every weekend for the past three or four weeks. Traffic today seemed pretty light, with only a few young families stopping in. From the other reports here, it seems I was wrong about the rush of panicked buyers. Looks like people have already backed away from buying. My neighbors house must be a disappointment for most people, as the MLS writeup is ridiculously exaggerated with realtor-speak. It's described as "immaculate" when they don't even bother to clean the dog's nose-prints off the windows, among other things.

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    Best place on meth Says:
    287

    @paulb:

    Wow Paul, that is brutal.

    I hadn't even considered this effect on pre-sales and 15% down could happen quickly, by the end of summer.

    The more I think about it, the more it seems that Flaherty came up with these new rules with the intent on having the maximum effect of screwing Vancouver real estate in particular.

    After all, they never win many seats around these parts.

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    buff_butler Says:
    288

    @Gordon C.: This wasn't the goal of the post. I realise I worded it poorly, sorry.

    Also, to give credit where credit is due; I didn't know about holding your own mortgage in an rrsp:

    http://www.milliondollarjourney.com/holding-a-mor

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    Rob Chimpman Says:
    289

    Holly toledo Gordon C! there is an old Arab saying along the lines that those who do tend other people's sheep, tend to lose their own flock.

    Why bother with this blog. You have yours. Are you tired of the MLS argument?

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    Inventory Says:
    290

    The stats updated today.

    ************* 1/1/2010 / 4/18/2010 / % change

    Bowen Isld 46 / 105 / 128.26%

    _Bby East 68 / 152 / 123.53%

    _Bby North 345 / 732 / 112.17%

    Bby South 362 / 682 / 88.40%

    Coquitlam 531 / 1088 / 104.90%

    Van.&Gulf 215 / 262 / 21.86%

    ___Ladner 65 / 153 / 135.38%

    MapleRidge 575 / 965 / 67.83%

    _New West 262 / 567 / 116.41%

    _North Van. 412 / 899 / 118.20%

    OutofTown 105 / 74 / -29.52%

    _Pitt Mead 121 / 191 / 57.85%

    _Port Coq. 237 / 440 / 85.65%

    PortMoody 213 / 422 / 98.12%

    _Richmond 893 / 1717 / 92.27%

    _Squamish 402 / 489 / 21.64%

    Sunshine C. 656 / 1019 / 55.34%

    _Tsawssen 98 / 182 / 85.71%

    __Van East 767 / 1348 / 75.75%

    _Van West 1396 / 3055 / 118.84%

    _West Van 386 / 629 / 62.95%

    __Whistler 569 / 753 / 32.34%

    _____Total 8724 / 15924 / 82.53%

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    Inventory Says:
    291

    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 17, 2010 = 15,924

    April 19, 2010 = 16k??? Party!!!

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    @paulb: WOW. For a 500K condo presale with a 15% deposit, before now you wouldn't need to bring any more cash to closing because you could just finance the rest.

    NOW, you'd have to bring $30K since they only finance 80%. MOREOVER, if the market price declines by 15%, you would have to bring $93K to the closing.

    So, Mr. specu-vestor says 'bring 93K to closing??? I'd rather just walk away from my 75K deposit.'

    Well, as we know from 2008/09, the developer can go after you for any difference between the contract price and the price the developer eventually gets from the knife-catcher who buys the stinking condo turd mess.

    Oh, baby. This will be so fun to watch . . . can't wait for the next CBC bleeding heart story about the 'hard done by' flippers . . .

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    @VHB: There will be no knife catchers. We know how this played out for many in 2008 — developers renegotiated with balking presale buyers on the sly.

    Here's another term to look up: "judgment proof". That lawyer in paulb's link can tell presale buyers all about it for what I'm sure is a reasonable fee compared to the alternative.

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    Gordon C. Says:
    294

    Wow! so many questions, so little time.

    Firstly, I don't have my own blog, if I did then I would know how to make those cool indents and italics. Although I do enjoy reading Garth and sometimes replying.

    When I'm saying watch the market, I'm saying that the market place has a momentum. Rarely will a market go from 15 percent appreciation to a drop of 15 percent, unless an outside source, like government intervention, is corrupting the market. So you will see the market go from 15 to 10 to 5 to 0 to -5 percent. Watched over a couple of months or quarters you will a good indication of where the market will be in 6 month or a year or two years from now.

    I don't understand the rental argument. That rents are tied to income and therefore tied to home prices. If you make a low income, you would share accommodation. If you are one of the lucky 18 percent that make over a 100K that does not mean you would rent at the maximum rent. I would think most of these high income renters would be "squirrelling" (couldn't pass that one by) their money away. Nor do I think that people rent the same type of property that they would buy. You can have a tight rental market with rising rents but a weak residential market with stagnate prices or falling rents.

    Which Vancouver has had several times. I've lived in places for years without a rental increase while prices have been going up. Now that prices seem to have crested, I get my first rent increase. Most landlords increase rents when their costs are going up not because house prices are going up. If they refinanced at a lower rate, their costs have gone down.

    As for being an arrogant prick, well there is no shortage of this demonstrated on this blog by a lot of the other contributors. I mean really "my first year of graduate school" paaalease.

    Do pliant appraisers receive more work than non pliant? I suspect that this would occur much to the same degree as in any other businesses. Do some doctors write letters to the WCB and embellish their patients illness? Does your accountant bend those CRA rules – just a little?

    However, unlike other professions, the Appraisal Institute of Canada is set up to protect the public's interest. Unbelievable isn't it – an organization that protects the public's interest over the appraisers. So when an appraiser is found in conflict we are disciplined. And it aint a $100 buck fine and a slap and a wink telling you not to do it again. For example if you appraise a building that you have an interest in – thats a suspension. If you commit fraud that information is handed over to the RCMP for criminal investigation and even if you are found not guilty by the courts, the Professional Practice investigates and can still expel you.

    So why am I blogging here today. Well I've been reading this site for more than a few months now and I see the same old top dogs bullying the newbies and I thought well its a Sunday, how about I throw my hat in the ring and see what happens. Ouch, the rapier kitty claws on this blog!

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    @Gordon C.: "Rarely will a market go from 15 percent appreciation to a drop of 15 percent, unless an outside source, like government intervention, is corrupting the market."

    I suppose I will have to agree that a swing from +15% appreciation to -15% appreciation in a few quarters is a rare occurrence. I admit, if I were an appraiser, I wouldn't know how to value a property under those conditions. I also admit I'm not an appraiser.

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    Limey Says:
    296

    Gordon C. I'm enjoying your perspective. It's good to mix up the discussions in here.

    For shits and giggles, can I put you on the spot and ask you what your predictions are for the next 2 years? Give us a breakdown on how you think things will pan out.

    It will be interesting to hear, especially on April 19th (Vancouver housing doomsday?)

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    Are you ready for the 16K party? Consider this your invitation.

    Time: Maybe Monday, maybe Tuesday

    Place: here

    Attire: Come as you are, but come ready to PARTY!

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    patriotz patriotz Says:
    298

    @Raincouver:

    To be fair, Paul, probably most posters here aren’t looking at properties in excess of a mil.

    Oh I think quite a few are looking. But when they get around to buying them they'll be paying a lot less than a mil.

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    300! w00t!

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    Anonymous Says:
    300

    @Gordon C.: "Most landlords increase rents when their costs are going up not because house prices are going up. If they refinanced at a lower rate, their costs have gone down."

    Landlords raise rent when they think can get away with it. It has nothing to do with house prices, landlords expenses, or even what the tenants can afford.

    My landlord has faced increasing taxes, a new roof, and a new clothes drier in the last year, but has DECREASED our rent by almost five percent. Why? Because he was afraid we would move to get a better deal and he can't easily replace us with other quality tenants at this time. All the increases in costs are coming out of his pocket alone.

    And refinancing is not even a factor for those landlords who own outright or nearly so. There is no connection between mortgage rates and rent increases.

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    patriotz patriotz Says:
    301

    @Anonymous:

    Indeed no correlation between house prices OR interest rate and rents:

    http://cuer.sauder.ubc.ca/cma/data/ResidentialRea

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    [...] also looks like today will coincidentally be the day we get our 16,000th place put up for sale. Share RSS 2.0 comments feed. leave a response, or trackback from your own [...]

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    No Insight Says:
    303

    Well, I posted this on PaulB's site but, of course, he deleted it. Maybe it will receive more respect over here. I'm trying to understand the appeal of PaulB in these circles. He was (WAS) a realtor locally here who decided it was just too rich for him and ran off to the East Coast where he could get his palace on the water for the same price as a crack shack here, right? Now, all of a sudden, he is back. Though he is not a realtor anymore and is instead going to school. So he comments on the market with ZERO insight as he is not in the field and so many here eat it up. Why?

    Seems to me he failed as a realtor here and I guess he failed as a realtor in the East. Gavin, the guy who took over for him for a while did 5 deals (or at least worked with 5 clients) from the old PaulB site so it couldn't have been all bad being the Bear's realtor.

    So can someone explain to me why a Garth Turner wannabe and a realtor never will be is so popular?

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    Gordon C you state previously :

    "For valuing strata and single family homes, typically only two approaches are used. The market approach as briefly explained above and the cost approach which I hope is self explanatory. A third approach known as the Income Approach is rarely used on homes, and if it is, then only as a cross check to the final estimate. It is highly unlikely that you will find an appraiser concluding a value on a GRM or Price Earnings Ratio for a single family home or condominum. The body that governs appraisal practice in Canada, the Appraisal Institute of Canada, would likely consider disciplinary action against that appraiser for doing so."

    I usually welcome juniors into the profession with open arms but reading some of your thoughts in this thread, I must respond. I would suggest that you stop throwing around excerpts from your Busi 330 entrance level appraisal text because to be honest, there are readers here who would possibly be under the impression that you are an actual working appraiser. Or worse, that your knowledge is somehow representative of an accredited member's.

    For reference, I have been in the business for the better part of the decade and cut my teeth completing several thousand residential appraisals before moving into the industrial / commercial side of the business. If anyone has questions related to appraisal, I will try to chime in.

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    Gordon C. Says:
    305

    I am an appraiser and that is my real name. But, I do challenge whether you are what you imply. As an accredited appraiser would never try to muzzle an open and free discussion on real estate. And an accredited appraiser would NEVER use their professional designation as an acronym on a blog in an attempt to berate another appraiser because that is unprofessional.

    Your taking pot shots from a concealed position. You're just a sniper.

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    Gordon,

    For you to suggest that the cost approach is appropriate for the valuation of a typical strata property pretty much says it all. Go run that one by your mentor and see what they say.. if you are getting this information from your mentor, I am being totally honest when I say think about finding another.

    The "cost approach" included on a typical CRAL form is an afterthought and serves only to illustrate a general demarcation of land vs building for the bank underwriter and is almost never relied upon to determine value in the case of a detached property, let alone a strata interest. Further, I have never, even once in my life, seen anything resembling an income approach applied to a single-family property, even as a validation of the direct comparison approach.

    The only thing in question is whether your mentor actually signs off on the types of theories you are proposing on these boards.

    And where exactly do you see me trying to "muzzle" the discussion? I love the discussion and find that many of the arguments proposed resonate with me, since I happen to think property values in the Lower Mainland are stretched beyond any semblance of rational thought. What I take exception to is you holding yourself out as some type of representative of the AIC. The words you typed and which I quoted are flat out misleading and inappropriate, end of story.

    Hope to see you at the meeting Thursday, even candidates should vote.

    Cheers and honestly, nothing personal.

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    Wow Gordon, got anything to say about that?

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    Gordon C. Says:
    308

    Are you even following the thread of this conversation. Do you even read this stuff, before you come out shooting at the hip.

    You're a twit, not an appraiser.

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