The tipping point?

March saw listings grow like crazy and April started off with a bang adding close to 500 listings on April 1st alone. The growth in inventory is being mirrored by a growing number of people who appear to be seeking out more information on a Vancouver housing bubble – traffic on this blog has nearly doubled in the last couple of months.

The following comment was posted just before the weekend by GregK71 regarding the growing number of bullish comments here and on other blogs.  I suspect it may sum up the way many readers feel about the current state of the Vancouver real estate market and its likely future:

The bulls on this and other RE blogs absolutely see the writing on the wall going into Q3 and Q4 2010, and beyond. They’re not blind. Arrogant, yes. Foolish, perhaps. Blind, no.

Oddly enough for a group of people apparently content and smug in their asset class, bulls never turn down the chance for a satisfying faeces toss on blogs like VCI. They’re coming here to convince themselves to keep on believing house prices only ever go up. And it’s worked like a charm.

Now, although it doesn’t always seem to come across in their posts, bulls understand market forces. They’ve made money in RE. Big money. Like bears, bulls too sense danger. In their gut, bulls comprehend irrational exuberance. Heck, they’re the ones who’re listing their presales and resales en masse, soon to push listings onward to 25,000 and beyond.

Bulls know this thing’s running on fumes. Bulls know the time is short. Bulls know there’s no such thing as running out of land when you can build up. They know these things.

They also know the Kool-aid is starting to taste a bit, um, funny.

Vancouver bulls, you’ve had an amazing run. You’ve defied the fundamentals for longer than many thought humanely or economically possible. It’s been unreal. It’s been absurd.

To those of you over-leveraged on severely overpriced Vancouver real estate: relish these final few weeks on the upside. You may have a month and a half.

But the tipping point is here. It’s visible. It’s shocking. And it can’t be put off with another rate cut, loosened restriction, extended am or exotic mortgage product. That deck is exhausted.

The process just getting started ends only with utter revulsion and complete contempt for the asset class. Needless to say: it’s going to be a long, long way down.

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Bernoulli
Bernoulli
10 years ago

Check out this post that deconstructs the bears:

http://vanhousingbull.wordpress.com/2009/08/04/mo

GregK71
GregK71
10 years ago

Just wanted to say how honoured I was to have my first-ever post on VCI singled out for further discussion. So you're not left wondering, I'm actually not a resident of Vancouver but have been following the conversation here for some time now. I have visited your fair city on several occasions, and have certainly enjoyed my time there. As far as I'm concerned, the Rest of Canada is watching you guys because the Vancouver area is Canada's canary in the RE coalmine. (Not too long ago, some would have argued Calgary, but that horse already left the barn.) The pattern is simple: the fissures develop beneath the feet of damp Vancouver residents before spreading eastward to infect other urban centers. This was the precisely what started in spring 2008 before Carney saved the economy. I remember it well. And… Read more »

Anonymous
Anonymous
10 years ago

"Starving Artist" & "Jewelzy":

Newbie here – where are you getting the 'shoddy construction at Spectrum' reference? I know someone that bought there last fall – was wondering why those places were so much cheaper than others of it's ilk.

And yes, Pacific Palisades Hotel is being renovated into apartments – a friend of mine works there & the last ballroom function is in two weeks.

Jim Bob
Jim Bob
10 years ago

Where are you getting the daily inventory numbers from?

IgnoreKiteTroll
IgnoreKiteTroll
10 years ago

JWayne … kite is a troll, he uses the faux-ESL technique to troll, it's quite obvious when some of his posts are nonsense and another seems almost native speaker level. Show offence, f£$% him! The only people more retarded than him are those who take him serious and answer his posts.

JWayne
JWayne
10 years ago

No offense Kite towards Moon… but I can't understand what you're trying to say.

Clarke
Clarke
10 years ago

I was sure we had reached the tipping point in the summer of 2008, and ended up being amazed how many legs this mania had.

In the last few months, I have also been surprised at how many new buyers I have run into, and it has been painful to act happy for them. I wonder how many of these new buyers will still be so excited in the next 6 to 12 months.

Kite towards moon
Kite towards moon
10 years ago

JWayne Says: "My circle of information isn’t just realtors and bank associates – its educated from all sources and haven’t been wrong yet."

Good man,So first of all they had to cinvince you to exit then to your neighbour,later they will convince you to buy then they will convince your neighbour to buy.JWayne,Go sit with three mens,Strataman,Damman,and Crabman.They are here since five years,four,and three years and still counting………

painted turtle
painted turtle
10 years ago

By 2015, the residential real estate sector will decline as Boomers retire and downsize. This will be somewhat offset by a demand for country homes. New family formation will decline, resulting in reduced demand for new housing. In sum, demographics will negatively affect the residential real estate brokerage sector. The forecast is for a slow decline that will place pressure on the realtor’s value proposition, push for service innovation, and place downward pressure on agent fees.

from http://network.nationalpost.com/NP/blogs/fpcommen

Mansour al-Hallaj
10 years ago

The situation around RE (and the bigger picture) is a pure magic warfare.

In the red corner, weighing in 800 pounds, main stream media, political establishment, and industries with vested interest. They keep chanting "What you see is good and getting better. Act now to make things better sooner. Look at our shiny ads, look! Don't wink!"

In the blue corner, weighing a bit less in terms of circulation numbers, media and people who think to themselves "This can't be happening for long. It's like defying gravity."

The magic part about this clash is that the outcome is defined in the heads of the audience. It's self-fulfilling.

TL,DR: When everyone knows what "RE" stands for, reason doesn't work – it's all about faith.

Kite towards moon
Kite towards moon
10 years ago

painted turtle, I think your are totally misrepresenting yourself,You think you work so hard and 72% home owners are not working so hard.you are accusing someone else for just being in your position.You are not working hard to buy a house, may be it is hard work after all, but writing your favourite lines in hope for crash looks easy to you. Imagine you or your parents have spend big chunk of money on your education,When you got a job you are trying to settle up your life.You find it hard to believe rental situation that is so expensive and buying a place to live is more expensive,however,with your hard work you manage to borrow a mortgage for yourself,You just have bought a place for yourself and few days later you go online to search what other people are doing… Read more »

painted turtle
painted turtle
10 years ago

superboomtime,

I think you should tour the US giving conferences about economics, especially in those places where people had to sell their home for less than half price.

superboomtime
superboomtime
10 years ago

Bears everyone agree that stock market over long term always go up and so does real estate. Same goes for rent. So it only makes sense to buy. Over long term impossible to lose money buying but renting you always lose no matter what. Always remember bear Vancouver real estate never go down Now circle around and vote this down.

not much of a name
not much of a name
10 years ago

Anon 77…

I would rather be a bear "dreaming" of falling prices rather than a bull praying that they don't.

Chilled
Chilled
10 years ago

painted turtle Says: April 5th, 2010 at 10:37 am ""I would be excited by a real estate burst in Vancouver. Why? I am not excited to see people lose their money or their homes, I feel sad for them. I am not sure I would buy a home if prices crashed even 40% (for several reasons). I am excited because for ten years I felt it was amoral that people would make more money speculating on houses than working hard. Speculators were making home prices more and more unaffordable, meaning working people had to go deeper and deeper in debts. The impact of this moral shift could be felt everywhere. Students did not value education any more, over extended families were going through traumatic experiences, people were losing sleep over buying a home, the streets were full of people who… Read more »

Anonymous
Anonymous
10 years ago

dream on bears, dream on!

sipping pina-colada
sipping pina-colada
10 years ago

true. I have not eaten so much chocolate in my life in the last 2 days!!

so Dude the board must be pretty religious and takes this holiday seriously after taking Friday and Monday off.

VRENGD
VRENGD
10 years ago

A month or so ago I predicted that the price of the Vancouver average detatched would hit $1,075,000 in around June or July before prices started to fall.

At that price and at the rates before the big jump, the 2008 monthly payment limit would be reached once again. At that point prices would begin to crash.

Well rates went up and lending is going to get tighter. Prices won't likely get to $1,075,000 before crashing. I'd say we have another six weeks of price appriciation before we hit the cieling and the market drops like a ton of bricks.

paulb
paulb
10 years ago

Dude the board is not open today.

Board not open = no listings added.

Best place on meth
Best place on meth
10 years ago

Leave Inventory to enjoy his Easter long weekend in peace.

We're all feeling good after lots of food, drink and chocolate Baby Jesus'.

sipping pina-colada
sipping pina-colada
10 years ago

"Inventory" buddy, first you get hooked us on your stats and then leave us dry 🙂

we want more 🙂

let's get this party rolling!!!

not much of a name
not much of a name
10 years ago

If using lineups at LV stores as a guage for the strength of RE, Japan must be booming. On a recent trip to Hawaii, the Japanese were tripping over each other in the store.

Hansen
Hansen
10 years ago

Supraboy at the business trip in HK giving a fast blow to those in lineups.

Supraboy
Supraboy
10 years ago

Crybaby scullboy is still here weeping. Go check the stock markets, it rocketed to new highs. The same goes for all of you. I'm in Hong Kong now and all I see is people spending and lineups are getting longer at LV and Chanel stores. Feels good to see the Canadian dollar on par. You bozos still think the real estate markets will tank? Better check out asia before being a bear.