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!

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Starving Artist
Guest
Starving Artist

Last! (reverse order now…)

patriotz
Member

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?

patriotz
Member

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.

Keeping an Eye on th
Guest
Keeping an Eye on th

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?

Kite towards moon
Guest
Kite towards moon

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

superboomtime
Guest
superboomtime

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.

Wreckonomics
Guest
Wreckonomics

@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).

Dave
Member

@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.

patriotz
Member

@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.

paulb
Member

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

sluggo
Guest
sluggo

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.

Honkytonk Man
Guest
Honkytonk Man

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

Don Lapre
Guest
Don Lapre

Thirteenth!!!!

Dave
Member

@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?

joycer
Member
joycer

@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

paulb
Member
Dave
Member

@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?

Boombust
Guest
Boombust

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.

patriotz
Member

@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).

bums up2
Guest
bums up2

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.

vreaa
Member

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

Dave
Member
@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… Read more »
kabloona
Member
kabloona

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…. 🙂

mino4
Guest
mino4

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.

paulb
Member

@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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