Yes, there’s a housing bubble

Painted turtle pointed out this article in the Vancouver Sun: Yes, there’s a housing bubble in Canada – but only in three cities.  You read that correctly.  The Vancouver sun printed an article calling the Vancouver market a bubble.  I hope Beelzebub has some of those left over Olympic mittens.

According to a national study released last year by Pitney Bowes Business Insight, the average household income level in Calgary topped $113,000, while the average in Edmonton exceeded $90,000.

Vancouver was well behind both Alberta cities, at $82,300. That’s about $2,000 higher than Windsor, Ont., which has some of the lowest house prices in Canada. Toronto boasted average household incomes of $101,400.

Let’s look at it another way.

When U.S. house prices got to their most extreme levels during the U.S. housing bubble, the ratio of average household income levels to average local house prices got to 10 times or more in overheated markets like Los Angeles and Phoenix.

In Vancouver, the average detached bungalow now costs roughly 11 times the typical average local household income level, based on the data above.

Read the full article at the Vancouver Sun website.

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117 Responses to “Yes, there’s a housing bubble”

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  1. 117
  2. Bears Take It To The Streets – “Vancouver Housing Bubble Ready To Pop!” Signs In Downtown Core « Vancouver Real Estate Anecdote Archive Says: Reply to this comment

    [...] members of the public, trapped in disinformation bubbles, for whom this will be news. Thanks to  nonymouse (at vancouvercondo.info 29 Apr 2010 10:24 am) who broke the news of the posters and, at our request, forwarded these photos. [...]

    Current score: 0
  3. 116
  4. Kite towards moon Says: Reply to this comment

    @Is Kite is Good:Home ownership is not a bussiness,however,buying a place to live or as investment will begin with ability to carry monthly expenses and the extent of loss you can take in any other circumastances.There is no advice to switch over your target,Your current circumastances and financial future will help you decide to click on the cost of home or apartment areawise.If you feel comfortable then buy if not then just rent a place.I think it's good to buy re-sale home instead of new homes for efficiency purpose.Homeowner as seller will have it repaired for you and you would be able to run inspection.The service response to national home warranty programme is like you are talking to somebody who is dead but somehow they will pick up phone to secrew you up further.

    Current score: 2
  5. 115
  6. Neptune Says: Reply to this comment

    @paulb:

    Close to 400 sales, that's massive.

    Current score: 1
  7. 114
  8. doug r Says: Reply to this comment

    @Summer: Why, yes:
    http://thedailybite.files.wordpress.com/2009/10/f

    Current score: 1
  9. 113
  10. “Last night “it” happened to me. Out at dinner with several sensible, professional, well-paid collegues. Conversation drifted to RE and house prices… “ « Vancouver Real Estate Anecdote Archive Says: Reply to this comment

    [...] April 2010 · Leave a Comment bhtbg at vancouvercondo.info 29 Apr 2010 10:26 am [...]

    Current score: 0
  11. 112
  12. “Today I saw someone had posted a home made poster on a telephone pole on Denman street that loudly proclaimed that the real-estate bubble was going to pop in Vancouver.” « Vancouver Real Estate Anecdote Archive Says: Reply to this comment

    [...] April 2010 · Leave a Comment nonymouse at vancouvercondo.info 29 Apr 2010 10:24 am [...]

    Current score: 0
  13. 111
  14. “It is not just the Chinese doing the speculative buying, I know of Whites, Indians, Filipinos, Koreans and other races doing the same thing. Flipping houses using borrowed money and living a materialistic life with fancy cars, bags etc.” &laq Says: Reply to this comment

    [...] LY at vancouvercondo.info 29 Apr 2010 10:59 am – [...]

    Current score: 0
  15. 110
  16. Is Kite is Good Says: Reply to this comment

    Kite, I have a pre approved mortgage but act fast I needs, but with all these rich asians coming i need your help.

    Where should I buy tomorrow?

    Hurry I am running out of time. I am approved for $570k so please give me some options.

    Also if I move to a house I want to get maximum rental potential so please help me with future rental needs. I want ot rent ot a bitter bear and makes maximum cash!

    Current score: 3
  17. 109
  18. Absinthe Says: Reply to this comment

    @ulsterman: 58K in 2005. 2007 (last reporting from StatsCan) – 66K. I imagine it's not up much from that, but I could be wrong.

    But yeah, even still, dollars are being stretched. And credit maxed.

    Current score: 1
  19. 108
  20. Animal Spirit Says: Reply to this comment

    could be seeing the final push from the April 19 deadline – everyone would want things to close prior to the weekend and May.

    Current score: 0
  21. 107
  22. Matt Says: Reply to this comment

    Check out how they're dealing with oversupply in Ireland:
    http://www.belfasttelegraph.co.uk/breaking-news/u

    " A Green minister in charge of planning rules has backed plans to bring in the bulldozers to tackle massive oversupply of property.

    Ciaran Cuffe, appointed to the job in last month's reshuffle, said he supported selective demolition as some loans taken over by bad-bank Nama will be so worthless buildings may have to be flattened.

    "

    Current score: 2
  23. 106
  24. ulsterman Says: Reply to this comment

    $58,000 median household income?!? How do families live on that kind of income in the Lower Mainland? Baffling.

    We live in such a bizzaro-world here. We have supposedly wealthy enough to bid average houses over $1m, yet we can't keep schools open for a full school year. Curiouser and curiouser…

    Current score: 18
  25. 105
  26. Dan in Calgary Says: Reply to this comment

    The Ottawa Citizen has a story announcing that, according to MoneySense magazine, Ottawa has been chosen as the best place to live in Canada! Shhhhh! Don't tell anyone that owns real estate in Vancouver; they won't be able to handle it; their future financial and emotional well-being depends on them believing that Vancouver is the best place on earth to live, and that everyone wants to move here.

    Current score: 7
  27. 104
  28. Drachen Says: Reply to this comment

    @PJ:

    Sales lag by about two weeks. We're seeing the pre-April 19 rush to buy still playing out.

    Arranging a mortgage doesn't happen overnight and there's details like inspections and such that can be built into a contract so the sale isn't final until all the conditions are met. That's when it's recorded, not when it's signed.

    Current score: 13
  29. 103
  30. Drachen Says: Reply to this comment

    @Anonymous:

    "What is the historical months of inventory for this time of year?

    Does anyone have a link"

    http://agentwill.com/weekly-stats/

    http://vancouvercondo.info/forum/topic/total-inve

    The first only goes back to 2008 but has a wider variety of stats, the second starts in 2006. The reason for the inconsistency in numbers is they're using different regional boundaries.

    Current score: 0
  31. 102
  32. PJ Says: Reply to this comment

    I can't believe hos strong sales are still even after the April 19th deadline.

    Current score: 3
  33. 101
  34. JR Says: Reply to this comment

    Hey Paul

    I don't know for certain but that looks like an extremely high level of sales. Is this still largely a pre-April 19th rush?

    Current score: 6

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