18 Karat Gold Friday Free-for-all
Hey, guess what? You’ve reached the pot of gold at the end of the week. This weekend is your chance to buy an almost new condo touched by elite athletes. If those don’t catch your fancy there are lots of other options out there for your consideration.. looks to be around 18,000 listings in the REBGV now, and that doesn’t even include Surrey. Lets do our regular end of the week news round up:
-40% off prices key to rebound in Kelowna
-Olympic condo prebuyer protests
-2 bdrm house and lot, 30 minutes to Vancouver $154k
-Police probe massive Alberta mortgage fraud
-Vancouver best business tax climate
-Statscan: Recession was quicker, not worse
-MPs refuse to let Auditor-General review their expenses
-US ramps up probes of banks
-Pretending to live in the lap of luxury
-The bailout game
So what are you seeing out there? Post your news links, thoughts and anecdotes here and have a golden weekend!
May 14th, 2010 at 1:57 am 1
FLIPPER IN TROUBLE
http://www.6717000.com/mls/V826577-803-1833-crowe…
# 803 1833 Crowe St, The Foundry
LIST PRICE $799,000
"Owner's paid $830,000 plus Property Transfer Tax plus GST."
If you have any questions, the owner is just a few blocks up the street. Look for a guy wearing a sandwich board.
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May 14th, 2010 at 2:19 am 2
The way I see it for people buying RE is the same outcome as car leasing. In the end the Vancouver owners of RE will have spent decades paying to lease their homes and will never be able to show that they own something outright. The banks are acting like car leasing companies.
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May 14th, 2010 at 3:21 am 3
@Anonymous:
LOL. What the property sells for IS market value. Lines like this are as sure a sign of a bust as daffodils are of spring.
And looky here, there's an IDENTICAL unit for rent for $2650/month and "open to offers":
http://vancouver.en.craigslist.ca/van/apa/1718733…
So the "below market value" list price of $799K is a price/rent of just 300! Wow better buy now!
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May 14th, 2010 at 7:34 am 4
Totally off topic. Yesterday, I dropped my son off at school and was in the process of driving my daughter to her school. I have to cut through Dunbar to do this. I was driving East on 35th Ave and went buy three construction sights. I counted the big shiny pickups 6 + 5 + 3 = 14. They all looked nicer than my car (except one), and I drive a fairly nice car. I've been looking at pickups to purchase as my daughter is involved in an activity where owning one would make sense. These trucks retail for 50k+.
If that doesn't tell you something about the RE market you've got your head so far ….
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May 14th, 2010 at 7:40 am 5
Lmao, I hope olympic village cleaned up the cum stains from the previous owners: )
But seriously, why would you buy those, they aren't even in downtown vancouver.
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May 14th, 2010 at 7:41 am 6
Canada is a dump, can't get full skype or google voice here
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May 14th, 2010 at 7:57 am 7
Has property speculation constructed too many properties in Vancouver? How large is Vancouver's shadow inventory of empty condominiums that are being held for re-sale? The number of properties for sell in Vancouver is around 17,000, could there be another 18,000 empty condominiums in the city too!
How could any government from the municipal to the federal level not be looking at this as the mother-of-all tax grabs. The government created these prices and the government and the tax payer can benefit from them as well.
The UK will be increasing taxes on non primary dwellings in April of 2011, so could Canada. This could mean lower prices for prospective home buyers. The more speculation in a city, the greater the fall in prices. Ironically, it will have been the speculator that created affordable housing.
Its time to cull the herd.
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May 14th, 2010 at 8:36 am 8
The developer should have paid the protester back as there's so much publicity it will most likely hurt sales. Too late now I think.
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May 14th, 2010 at 8:48 am 9
“There seems to be a public appetite just to be assured by someone like Sheila Fraser … because people just don’t believe politicians anymore.”
Bingo! The political class should always be treated with suspition, and therefore should be doing everything to assure the public that they are acting as they should. Any public official supporting this non-audit obviously has something to hide!
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May 14th, 2010 at 8:57 am 10
Another way of looking at purchasing a $799,000 suite that rents at $2,650 and using the same calculation is the pay back period. In this case the pay back period is 300 months or 25 years.
Mortgage costs, taxes, strata fees and other expenses are not included in this calculation. But neither is appreciation in property value, increase in rents, surplus land or non typical amenities such as water frontage.
The 300 months or 25 years shows the risk people are willing to take, they are betting that appreciation and rent increases will more than counter the expenses of holding the property in order to reduce that pay back period.
Typically North Americans are short term holders of property, generally moving every 10 years or less. A pay back period of 25 years is ludicrous by North American standards. I don't know about European or Asian standards, but by the standards of where we live, a pay back of 25 years is way way out there.
But, this is a very rough rudimentary way of assessing whether to buy an asset or not, the proper way would be to include all those items above that were excluded which is boring.
But heh if you wanna gets stars….
"Fu..ing right dude, I say 18,000 by Monday or I shave my cat"
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May 14th, 2010 at 9:00 am 11
When I grow up I want to be a "house fluffler" too!
I bet that human house staging will make its appearance in Vancouver in the upcoming downturn. This could be a potentially great business opportunity for the enterprising type. 0.75% of the houses selling price, and the rental income paid! Not a bad deal.
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May 14th, 2010 at 9:00 am 12
Ever notice how posts fade to a faint trickle on the Johnny Horton blog just after a HUGE listings spike?
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May 14th, 2010 at 9:14 am 13
Where is this Johnny Horton blog?
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May 14th, 2010 at 9:15 am 14
The administrators (if they ever had any) could have saved the "Johnny Horton" site by banishing the perverts while they still had a chance.
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May 14th, 2010 at 9:20 am 15
Hey Bob Arctor,
Ya don't wanna go there without a gas mask and hip waders.
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May 14th, 2010 at 9:20 am 16
Gordon C
Your theory would be correct if you could lock in a mortgage for 25 years in this country. As it stands now, while mortgage rates may stay low for longer than most bears think, at some point they will be higher – maybe significantly.
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May 14th, 2010 at 9:23 am 17
There are 18,000 listings in the REBGV!!!
Be sure to head over to our party in the forums. $10 cover for bulls
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May 14th, 2010 at 9:29 am 18
Re: "2 bdrm house and lot, 30 minutes to Vancouver $154k"
Yes but really it would be worth three times as much if you could get CMHC insurance on it.
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May 14th, 2010 at 9:29 am 19
Sorry DDDD,
It was only by coincidence that the pay back period was the same as a 25 year mortgage. The pay back period actually calculated to 25 years, 1 month and 15 days.
The amortization or renewals do not form any part of this rough pay back method.
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May 14th, 2010 at 9:32 am 20
A couple of weeks ago a study suggested that Canadians were going to have to start giving things up in order to pay their debts. I would have suspected 'Granny Bashing' to be on top of the list.
http://www.nationalpost.com/news/story.html?id=30…
I have seen the phenomena many times over the course of my time. Maybe I'm just a cynic and I look for these things. I used to buy and sell a lot of RE 'back in the day' and can't count the number of basement dwellers who suddenly becamse RE entrepeneurs when grandma died. They started talking as if 'they'd made the money instead of admitting that 'grammy' had put a roof over their heads. Wankers all.
I spend a lot of time in Hawaii and see the granny bashing behaviour growing more than ever before. Suddenly the 'kids' who can't afford a holiday 'cause they work sooooo hard' are leaching off Mom and Granmoms to take their sorry asses and the yard apes to Hawaii for a holiday with Grandma picking up the tab.
I also have worked inside estate sales where warring children are suing their mothers, brothers suing sisters, adopted kids suing estate etc. The RE thing really brings out the best in people. I used to work in a ploy where I would adjust the settlements to the price of a new Camaro and then mention that fact. You would be suprised as to how many took the deal. I called 'having Camaros's in their eyes.What a bunch of wankers.
So, after they've 'foregone' the groceries, the kids education, the RRSPs RESP, after school sports, they're dumping granny off like an unwanted pregnancy . Most likely granny already signed over the house on the agreement that 'the kids' would take care of her until she died 'in the bosum of her family'. I have witnessed this personally and knew the sick fucks that did it. After Grandma had bought them a house and reno'ed a suite in the basement the 'kids' dumped the old broad in a local shithole nursing home ( believe me you don't want to end up in one) and she was dead in about 24 months.
Such is the state of Canadian society eh? Greed and stupidity is rampant. The yound people have all turned into whining little cunts. And you all wonder why I refer to this place as a shithole?
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May 14th, 2010 at 9:33 am 21
We hit 18,000 already!
So that cat keeps it fur once again.
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May 14th, 2010 at 9:45 am 22
@realpaul:
I don't know who's voting you down, but your post is sadly true.
I have heard anecdotal stories as well, kids do nothing more than spend their parents' money on cars, clothes and just going out and partying.
I think this younger generation is going to learn some hard lessons.
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May 14th, 2010 at 9:56 am 23
This blog is great. If somebody states a fact which you don't like, rather than try and form a coherent argument against them you can just childishly suppress their views by voting them down. That way everybody gets to sit around and agree with each other all day long.
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May 14th, 2010 at 10:06 am 24
Oh yeah nutslaps! Get your mouse button ready to vote down another post! Scullboy where are you now? And remember bear vancouver-condo-town never go down!
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May 14th, 2010 at 10:24 am 25
@paulb: Celebration! This market is cooked! Next stop, 19,000!
Price softness to appear soon. Let's see how badly the Millennium development flops……Rennie will want to make it look a sa a great success, but in this climate it is hard to make lies fly.
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May 14th, 2010 at 10:25 am 26
@nustlapper:
The mental states of these trolls, bulls, ho's are facinating. They know in advance that their stupid posts get thumbed down and yet they take the time to sign on to a forum to enter these posts.
Guess it's like RE. The writing is on the wall and yet they go buy tree for themselves and tree for their cats. Guess they'll enjoy seeing their investment flush down the toilet as well.
Interesting bunch indeed.
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May 14th, 2010 at 10:38 am 27
@realpaul:
Have to agree with you, people here have become greedy, spoiled, self-centered, entitled to everything and downright disgusting.
This city has become a real estate cesspool, the crash needs to be brutal to cleanse the sick mentality that has taken it over.
And the sad thing about that listing in Point Roberts is that a comparable house across the line in Tsawassen would be priced 3 times higher.
Bring on the crash.
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May 14th, 2010 at 10:39 am 28
@specialfx3000: I try to put myself in their position, if I was a really happy confident homeownwer I would never visit a blog like this. However if I had a very strong insecurity complex I would constantly seek out someone to argue with to try and justify what I have already accepted as a really really stupid move.
Other bears question? If you were bullish and totally confident would you ever visit this blog?
Poor old nutslaps!
Pope; Ask the bears if they turn bullish and are full of confidence would they be here like nutslaps?
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May 14th, 2010 at 11:02 am 29
Re: The Human Staging — “We don’t let just anyone do this,” said Mr. Scott. “There’s pretty rigorous screening involved. You can’t have a criminal record, you need good credit and you can’t be a slob.” — LOL, That's "rigorous" screening?
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May 14th, 2010 at 11:02 am 30
20,000 by month-end? then a drop (month-end drop) and slow build to new record high (23,000 plus) by late June?
Holy cramolly…
I don't see how prices are not softer for the month of May – thoughts?
Looks to me like sales will be lower than last month…and with the rampant price reductions, this should be a factor as well
PaulB any updates on the Fraser Valley?
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May 14th, 2010 at 11:09 am 31
The listings surge as of late has been nothing short of spectacular – what a ride! Let's hope this train doesn't slow down anytime soon. The worrisome fact, however, is that sales are still considered strong. Don't get me wrong; I'll take 150-200+ net listings every day – But it's taking a very high number of listings to achieve this.
Many people have asked on this site in the past couple of weeks – "The listings are great, but why haven't the sales really slowed down? Especially after the April 19 rule changes." It was expected by most that sales would tank after the stricter lending rules – it's slowed, but by no means tanked. Here's the reason and type of buyer who's keeping the sales afloat:
MORTGAGE RATE LOCK, SLIGHT PRICE DECREASES used by the BUYER who had no intention to max out on borrowing
Let me explain: You can walk into any bank and get a minimum 90-day mortgage rate lock. This is a fact: there were a huge number of people upon hearing of rate increases go in to get a mortgage rate lock good for 90+ days. So let's say for example 2 months ago a 5-year fixed was 3.75%. Some banks informed there would be increases to their rates to 4%, so a herd of would be buyers rushed in to secure their rate at 3.75%, good for 90 days. Fast forward 2 months to today, and let's say the 5-year fixed is now at 4.25%.
A would be buyer might have seen a desirable condo at $530k 2 months ago but decided it was too expensive. Today, given the listings surge and incredible amount of price drops, the buyer could purchase that same condo for $500k. If they've been in the market long enough, they've probably become jaded to the overinflated price and think –
"WOW, rates are 4.25% today but I have my 3.75% locked in but only good for another month. That condo I saw 2 months ago for $530k has dropped to $500k and I still get to use my excellent locked in mortgage rate – what a deal!!
Yes buddy, a deal if you compare it what it was listed at. So instead of paying $150k too much for it, you'd only be paying $120k too much for it – quick, get on that deal.
The next question is how does the April 19 stricter lending practices come into play in this situation? Well, the answer is it doesn't. The GREATEST FOOLS are already out of the market – those who insisted on taking "advantage" of lower mortgage rates and took "advantage" of being able to borrow as much money as they possible could. Those buyers, past April 19, are no more.
This current crop of buyers – not the GREATEST FOOLS but FOOLS nonetheless, are somewhat more fiscally responsible. After all, not all buyers out there intend to borrow as much as possible and stretch to themselves thin to the breaking point. The example I gave above, that person could've qualified under the old rules for $650k but under the new rules only $550k. However, if they set their budget to $500k in the first place to not max themselves out, the April 19 lending rules made no difference to them.
While the greatest fools are already a lost cause, these people can still be saved! Put down your 90 day rate quotes – you don't need to use just because you have it. The amount of RE price drop in the coming months will total to more than any mortgage rate increase. Would you rather be the bull that with a fantastic mortgage rate (well, fantastic for only 5 years) that bought a 500k condo or be the bear that with a higher mortgage rate (after 5 years its all even again) buys the same condo for 400k?
Enough said.
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May 14th, 2010 at 11:10 am 32
"The writing is on the wall" or "Fly on the wall"
It's an investment firm that scare the investor to sell at low so the can buy then sell someone else on high.Specific 3000 you are such an idiot to repeat fly on the wall,It's so cheap like motley fool type of bitch.If fly on the wall suppose to construct something good the bulls should be using it first along with month over month price increases.
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May 14th, 2010 at 11:19 am 33
1BD $485k
http://www.realtor.ca/propertyDetails.aspx?proper…
I currently rent an identical unit in the same building for $1400.
Don't forget to subtract the $250 condo fee and say $100 property tax from that rent when you calculate the carrying cost
.
I know for a fact that the cheapest presale price on any unit for this building was $360k.
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May 14th, 2010 at 12:01 pm 34
1 Says said:
"20,000 by month-end? then a drop (month-end drop) and slow build to new record high (23,000 plus) by late June?
Holy cramolly…
I don’t see how prices are not softer for the month of May – thoughts?"
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The asking prices don't change automatically, the listing agents have to go back to their client and grovel for a price reduction and risk losing the listing. Go back three times to get price reductions, you don't look very professional anymore and the clients take the home of the market. Thats what we saw around June of 2008. Which meant that the sellers that were left were on average more motivated. If the government had not stepped in with lower rates, the herd of sellers would become more and more motivated and the slide in prices could have continued.
Vancouver prices may have followed those of Seattle.
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May 14th, 2010 at 12:03 pm 35
@Anonymous:
The property is returning $1050/month to the owner. The standard return (cap rate) that commercial RE investors want is 8%, thus to them the property would be worth 1050*12/.08 = $157,500. And that's not allowing for contingencies like assessments, maintenance, lost rent, etc.
Seriously. Things are that nutty.
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May 14th, 2010 at 12:10 pm 36
@Gordon C.:
"I don’t see how prices are not softer for the month of May – thoughts?"
Well, we already had month over month price declines in April compared to March. Softer prices are already here. The trend will continue and we will see another MOM price drop.
Prices are dropping right now, people. There is no need to wait for drops. They are here. Enjoy.
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May 14th, 2010 at 12:16 pm 37
@Supersogs:
Sucking demand from the latter part of the year now, is just setting up for a faster drop. This is fun!
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May 14th, 2010 at 12:16 pm 38
Shwing
New Listings 111
Price Changes 54
Sold Listings 28
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May 14th, 2010 at 12:19 pm 39
Wow, the inventory rate of change is actually getting *steeper*.
Are we going to hit 20,000 by June or July?
2008 is going to look like a cake walk compared to the second half of this year.
Year aligned charts: http://vancouvercondo.info/forum/topic/rebgv-apri…
Markets getting pounded around the world. Stimulus spending trailing off. Sovereign debt jitters. Mother of all asset bubbles in China. Here we go next leg down. I just liquidated a bunch of positions and I'm going to see what happens.
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May 14th, 2010 at 12:22 pm 40
Albertans will soon be drifting west in search of work.
Death nail on Alberta's door step
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May 14th, 2010 at 12:32 pm 41
Total REBGV inventory as of May 14th:
2007 12,571
2008 16,714
2009 14,946
2010 18,067
Shwing again
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May 14th, 2010 at 12:38 pm 42
@paulb: can we get 19K today? just kidding. Guess greed has no limit and yes I am greedy.
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May 14th, 2010 at 12:38 pm 43
A TALE OF TWO SELLERS that I know personally:
One is a couple in thier 50s who bought a house in Shaugnessey in 2005 for $2,000,000. It is now listed for $6,800,000 – based upon the list price for similar houses in the area.
Another is a couple in their 30's who bought a small bungalow on Ontario street in 2004 for $450,000. Wanting to list for $1,200,000.
This is a 300% increase in five years. It is a similar story for many properties in Vancouver. Prices have risen 300% in five years.
But, of course, this is not a bubble. I mean, how could you draw that conclusion? Prices are obviously based on the fundamentals.
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May 14th, 2010 at 12:39 pm 44
A little condo in Van or a big house in Hawaii…. HHHmmmm?
http://honolulu.craigslist.org/big/reb/1731649648…
http://honolulu.craigslist.org/oah/reo/1731442302…
Tough choices!
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May 14th, 2010 at 12:51 pm 45
@Starving Artist:
We are going to hit 20K in the first half of June if not earlier. This pace is of epic proportions, it is almost like adding one Woodward's building each day to the market. At some point it will take over the speed of building the stock in last several years.
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May 14th, 2010 at 12:58 pm 46
Hey Grampy Tinfoil,
Thanks for posting that article on granny dumping, it certainly made me smile. The Boomers climbed the ladder, then pulled it up behind them cause…. you know…. the rest of us young'uns are lazy and undeserving. They gleefully slapped "I'm spending my kids' inheritance" bumper stickers on their cars, never considering what was going to happen sooner or later the money was going to run out.
It's gonna be sweet, sweet schadenfreude to see them turning up in emergency rooms with notes pinned to their jammies.
For every "cunty kid" out there, there's an evil old bitch who deserves to be dumped on the side of the road. Sorry… but it's true. I know because my paternal grandmother is one of 'em.
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May 14th, 2010 at 1:05 pm 47
@scullboy: What I've noticed is it runs in the family, no grampa/granma dumping, smart hard working kids, evil gramma evil kids !
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May 14th, 2010 at 1:09 pm 48
" Exclusive condominiums worth millions of dollars go on sale Saturday at the former Olympic athletes' village in Vancouver, but one disgruntled owner is trying to warn potential buyers to beware.
Leo Chen is one of about 260 people who purchased condos before the Millennium Water development was actually built. The remaining 474 units go on sale on the weekend. "
======
Good for this guy…..
They say dying rats leave a smell to warn others.
Even though he may be SOL, he is using his democratic right to warn others. The only difference is he bought a pre-sale, whereas others can see the finished product. However, almost twice as many units are UNsold as their are sold….and the market is diving.
The HST will kick in soon, and unless mistaken, the purchases will have to be concluded before JULY 1. I just wonder if they can be classified as " used " given they were already inhabited .
Regardless, I think the Olympic village will prove to be the biggest RE debacle In Vancouver History. COV must have a contingency plan to extricate themselves and cut their losses. I hope they don't try the old "we'll rent them and hope the market goes up". Having Mayor Gregor and his whacko lefties in power can assure the public of something that will surpass the Fast Ferry debacle. Maybe they will put a bike lane down the hallways of the Olympic Village.
Finally, I am curious what warranty is still in place….the project was handed over in Oct. 2009, that's over 6 months ago. Given the COV is the developer…..it may hide behind the Local Gov't Act that lawsuits against local gov'ts must be filed within 6 months of the issue being identified.
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May 14th, 2010 at 1:16 pm 49
High listings are great but do not correlate to price changes. Mohican showed that an MOI of 7+ leads to price drops. We are around 4-5 at the moment.
Perhaps we should have MOI parties instead: 6 8 10 … ? Just a thought.
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May 14th, 2010 at 1:17 pm 50
The property is returning $1050/month to the owner. The standard return (cap rate) that commercial RE investors want is 8%, thus to them the property would be worth 1050*12/.08 = $157,500. And that’s not allowing for contingencies like assessments, maintenance, lost rent, etc.
—————————
Well it wouldn't be a Cap Rate then. There is no "standard cap rate" of 8%. If your a commercial investor you will want a high Cap Rate for an industrial property leased to a single tenant, but you will take a low Cap Rate for an updated 20 suite apartment building. The cap rate is essentially "risk" the riskier the property the higher the cap rate. One of the measures of risk is liquidity. The typical condo can be sold in under 30 days – thats low risk. A commercial investment may take a year and would have a higher risk – not the same – can't compare them – end of story – get out of my office.
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May 14th, 2010 at 1:24 pm 51
@Superfly:
This is when the MOI starts shooting up. I wouldn't be surprised to see 7 early next month amd 20k listings could even happen before June 1st!
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May 14th, 2010 at 1:25 pm 52
@Superfly:
As long as total listings keep rising, MOI will rise as well – assuming sales don't rise along with it.
And they're not.
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May 14th, 2010 at 1:28 pm 53
paul
do you think realtors are taking note of the listings surge and are starting to communicate this to sellers?
do you think that sales pace is slowing and that May could print well below last month?
interesting times. are prices falling?
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May 14th, 2010 at 1:31 pm 54
@Eddie:
Cindy Wild. Thats a built-in porno name! Sorry if off topic..
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May 14th, 2010 at 1:34 pm 55
my view is that fraser valley moi will be 9+ within a month or so and vancouver above 7 shortly as monthly sales slip below 3,000 units
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May 14th, 2010 at 1:40 pm 56
@Superfly: I think we could have MOI parties As WELL. No sense wasting all this beer…
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May 14th, 2010 at 1:42 pm 57
@domus:
Millenium weekend = lots of tire kickers; few buyers.
The sun will always bring out people (who doesn't love a party?). It's what happens when it rains, that matters…
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May 14th, 2010 at 1:45 pm 58
Absinthe, now you're talking.
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May 14th, 2010 at 1:49 pm 59
@NO-LYMPICS:
Doesn't even come close to Vander Zalm giving away the Expo lands.
That was the biggest economic blunder ever committed by any level of government in BC, hands down.
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May 14th, 2010 at 1:50 pm 60
Steve keen debunks the myth of a housing shortage. It is NOT all about "supply & demand": http://www.debtdeflation.com/blogs/2010/05/11/is-…
He writes about Sydney, but the same arguments apply to Vancouver.
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May 14th, 2010 at 1:55 pm 61
MOI could easily top 6 for this month. 19,000 listings and just under 3200 sales is all it takes. That is the magic inflection point based on Mohican's numbers.
We are all in the back of the roller coaster watching that front car disappear over the crest of the first big hill. You know the feeling…the one in your stomach. I hope you are buckled in.
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May 14th, 2010 at 2:03 pm 62
18,080
Mar 1, 2010 = 12255
Mar 2, 2010 = 12324
Mar 3, 2010 = 12459
Mar 4, 2010 = 12670
Mar 5, 2010 = 12775
Mar 8, 2010 = 13019 **
Mar 9, 2010 = 13244
Mar 10, 2010 = 13439
Mar 11, 2010 = 13551
Mar 12, 2010 = 13609
Mar 15, 2010 = 13755
Mar 16, 2010 = 13779
Mar 17, 2010 = 13870
Mar 18, 2010 = 14042 **
Mar 19, 2010 = 14103
Mar 22,2010 = 14258
Mar 23, 2010 = 14312
Mar 24, 2010 = 14322
Mar 25, 2010 = 14446
Mar 26, 2010 = 14558
Mar 29, 2010 = 14635
Mar 30, 2010 = 14721
Mar 31, 2010 = 14679
Apr 1, 2010 = 14,667
Apr 6, 2010 = 14,832
Apr 7, 2010 = 14,915
Apr 8, 2010 = 15,221 **
Apr 9, 2010 = 15,399
Apr 12, 2010 = 15,462
Apr 13, 2010 = 15,595
Apr 14, 2010 = 15,779
Apr 15, 2010 = 15,858
Apr 16, 2010 = 15,822
Apr 17, 2010 = 15,924
Apr 19, 2010 = 16,088 **
Apr 20, 2010 = 16,305
Apr 21, 2010 = 16,340
Apr 22, 2010 = 16,496
Apr 23, 2010 = 16,579
Apr 26, 2010 = 16,741
Apr 27, 2010 = 16,846
Apr 28, 2010 = 16,866
Apr 29, 2010 = 16,918
Apr 30, 2010 = 17,039 **
May 3, 2010 = 16,799
May 4, 2010 = 16,980
May 5, 2010 = 17,089
May 6, 2010 = 17,200
May 7, 2010 = 17,368
May 10, 2010 = 17,437
May 11, 2010 = 17,598
May 12, 2010 = 17,719
May 13, 2010 = 17,922
May 14, 2010 = 18,080 **2pm
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May 14th, 2010 at 2:05 pm 63
Bear chance of greek bailout success unlikely since greek pay no tax. Since Euro going to crash and gold not safe, stock market rigged by do-over glitches only thing left is vancouver condo. Once this become clear to investor worldwide Vancouver boom 2 will begin.
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May 14th, 2010 at 2:07 pm 64
Anon:
I'm *REALLY* screwed then, both grandmothers are evil like you wouldn't believe. I imagine there are a few posters here who consider me evil.
On another note, looks like I'll be returning to Vancouver soon….. for business. I got interviewed in record time (less then 5 days from hearing about the job to the final interview). 25% of my time will be travelling to Toronto and Vancouver.
That's just the way to enjoy those cities, as a visitor on someone else's dime!
I apologize for the off topic post but I was wondering if anyone had heard of studies comparing quality of life with city size. How big is too big? How big is just right? I'm finding it very easy to gt around Halifax because everyone seems to know everyone else. You ask people if they know of any career opportunities and the next thing you know, you're getting an offer. This definitely didn't happen in TO or Van, where you have to navigate huge HR departments and hundreds of other applicants to find job.
Info, anyone?
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May 14th, 2010 at 2:09 pm 65
As much as we are elated about listings and sale numbers, we are almost at par with last week. Here is a comparison
This week so far we have (excluding today) 1629 listings and 677 sales; just 315 and 124 short of last week (comparing with Rob's numbers). And 315 / 124 could be today's numbers, give or take.
So, for this mania to end, we MUST see lower sales. Lets see what next week brings.
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May 14th, 2010 at 2:13 pm 66
Bears, your not addressing the elephant in the room…the continued strong sales numbers! What about all those posts about sales collapsing after April 19th? all those formulas for how much less everyone can afford? All garbage like usual?
Listing are easily pulled. There are obvious large numbers of people asking outrageous prices. When the reality sets in that the market is solid but not hot, they will pull most of these listings.
SALES. thats where the rubber meets the road.
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May 14th, 2010 at 2:21 pm 67
@Primus: So is it your contention, Primus, that the bubble psychology is still well in place and therefore sales will continue? Almost *every* bear will agree with the quote that the market can stay irrational longer than a person can stay solvent, and mania took this one up a second leg, taking us all by surprise.
Trying to convince anyone that there isn't something seriously broken about real estate valuations in Vancouver, however, is as silly as pissing into a gale force wind.
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May 14th, 2010 at 2:24 pm 68
Why….You little backstabbing prick:
How come you are always kissing my ass, begging me for $$$ to buy pre-sale Vancouver condos ?
PS I am evicting you from my basement…..supraboy and nutslaps cheques at least don't bounce.
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May 14th, 2010 at 2:25 pm 69
Primus –
You're right. For now.
But the trend is my friend, and the trend is going the other way.
Cheers,
VC
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May 14th, 2010 at 2:26 pm 70
@Primus:
The same can be said for sales. They can stop. Look at 2008 for where 2010 is headed. It looks like deja vu. Only time will tell which side is right, but I'm guessing we will see a slide in prices. When that starts I think the momentum will keep it going for a while.
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May 14th, 2010 at 2:27 pm 71
I understand where Steve Keen is coming from. The misunderstanding people have is that prices are going up because there is a shortage of housing. No, house prices are going up because there is a shortage of LISTINGS. Housing is a desirable asset that you buy and retain. So, although prices are going up, you don't list your home because it creates a feeling of wealth in you – and that feels good. Which is different than pork belly stocks – no emotional attachment.
However, when the worm turns and house prices fall, you lose that cozy feeling and you list. Maybe because you're totally in debt from the HELOC and you realize that it is much harder to earn $50,000 than to put it on your line of credit which just disappeared as your house value fell.
The only way to find out if Vancouver has an over supply is to test the market and that happened in 2008. If we were not in an over supply position, then prices would not have fallen in 2008. All that government intervention has done over the last two years is bring demand forward robbing the market of future sales that would have stabilized prices. 2008 was the Canary in the coal mine.
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May 14th, 2010 at 2:40 pm 72
@Primus:
"Listing are easily pulled. There are obvious large numbers of people asking outrageous prices. When the reality sets in that the market is solid but not hot, they will pull most of these listings."
This ain't 2008 son. Interest rates are going up baby. The only thing that is going to get pulled this time is your wang.
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May 14th, 2010 at 2:40 pm 73
@Gordon C.:
Well said.
And why have we had a shortage of listings in the past?
Because everyone wants to sell at the top, and nobody knew exactly where the top would be.
Now we know.
Cue end of rollercoaster video.
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May 14th, 2010 at 2:43 pm 74
Gord C,
I would simply say that 2008 was the end of the bull market. Prices had got out of line with fundamentals and they began their inevitable correction.
However the drop was stopped by emergency interest rates and the crazy relaxation of the CMHC rules. This brought the market back and further feed the "it is different here" market of invincibility crowd. In other words, it created the current bubble.
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May 14th, 2010 at 2:48 pm 75
@Primus: My contention is that we do not have a bubble.
Are you fucking serious when saying there isn't a bubble in Vancouver, ahhh. After all I can't believe there are still talent like yourself around trying to contribute to meaningful discussion.
On the second thought you've got me actually, you are just kidding and trying to be funny, sorry my bad.
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May 14th, 2010 at 2:48 pm 76
@NO-LYMPICS:
London 2012 was a debacle about a month after they won the bid, and conceded that the true budget would be over triple their original estimate.
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May 14th, 2010 at 2:55 pm 77
@Best place on meth:
There is never a "shortage of listings", because nobody ever needs to buy.
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May 14th, 2010 at 2:57 pm 78
#43 V. The old adage 'first and fastest, last and least ' applies in spades to your examples. It has always been the case where properties at the epincenter of a market have the greatest range of volitility because the speculation factor is greatest. naturally people in Shaugnessy have a bit more leverage to play around with as opposed to Jeo Buttface the Carpet Laying King in Aldergrove. However, look at whats happened historically, the price of the highest priced properties fall like a stone in a crash market while Aldergrove tec away from the concentric center of the market dip and slide over a longer period of time. Mr.Buttface has more skin in the game, locks in , and is less leveraged. Don't forget that most inheritance case don't become brilliant entrepeneurs until after grandma dies. They tend to mix the kool aid with bathwater and are most likely to be left high and dry, ergo the mass dumping at the climax of the big swing towards a bearmarket. In the valley their will be people who lose their homes but in the epicenter there are a higher percentage of people who get wiped out.
The malcontent Newfie frycook hates his nana, what a suprise. Dude , when your own family hates you, you really have a problem. What do you do, pay a crackwhore to like you by the minute? Maybe Newfie wasn't far enough away to escape your problems? Hmmmmmm very telling. Couldn't get a job in Vancouver at the busiest time in history for west coast kitchen staff? Hint hint? Can't afford to live here or there? hint hint. Change your name to Mel….short for Mel-content. Lets have a big come back, show us why you didn't just quailfy for the losers club.
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May 14th, 2010 at 3:00 pm 79
MW flyers were overflowing the garbage bin in our mailroom when I went down to collect my mail last week. Another resident who just threw out his MW flyer smiled to me and said: "They must be desperate to stuff all mail boxes in our building with this pos."
Early this year a very troublesome resident vacated his apartment owned by his parents. He mentioned that he had bought a house. A few weeks ago, he and his family moved back in to the apartment that remained unsold. There were some remarks going around including "can't afford the rising mortgage rate". Of course I stayed out of others business.
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May 14th, 2010 at 3:02 pm 80
@LostInLotusland:
Does "staying out of others business" include posting everything you know about the subject on a public message board?
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May 14th, 2010 at 3:08 pm 81
@Primus: A quick guess; April 19th generated a lot of sales up to the cutoff day. Now you have move up buyers which seem to be tapering off. Also, I wouldn't call those sales numbers super strong but that’s just a matter of perspective (hopefully not affected by your portfolio
). You bring up a reasonable point though. Realistically, we might not see major price drops until fall if this trend continues.
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May 14th, 2010 at 3:11 pm 82
Re "Inventory"
Didn't BC Hydro once do a study re ghost condo and proclaim that "only" approx. 17,000 units were sitting unused / empty ?
If that is true….what % of them were bought for speculation? …I doubt most of them are sitting as 2nd homes.
Regardless, thanks INVENTORY and PaulB for the numbers…they are truly enlightening.
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May 14th, 2010 at 3:11 pm 83
@Anoymous:
… meaning I'm not interested in his pecuniary situation.
FYI I'm not a property-less bear.
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May 14th, 2010 at 3:15 pm 84
Primus, regarding "they will pull most of these listings."
… and they will wait?
… for what?
… for the market to "recover"?
Oh-kee-doh-kee!
Myself, I can't imagine holding on to an "investment" condo for 20 years, which is roughly how long it took for the market to recover after the 1981 crash in Vancouver, and a similar crash at the same time in Calgary.
Well, probably they'll decide to rent their property out, which will be really good for Vancouver's rental market. (Calgary's rental vacancy rate more than doubled between Fall 2008 and Fall 2009.)
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May 14th, 2010 at 3:17 pm 85
Just found out that my next door neighbour and his GF are moving out of my apartment.
He is a finance officer at CIBC and has only been living in Vancouver for 2.5 years (came from the Prairies). We had several discussions about how overpriced RE was, how a lot of his customers fudged their self-employment income, and how aggressive the banks were in pursuing loans.
He is paying 1100 for a 2 bedroom, partially renovated, top floor unit 3 blocks from the beach in Kits, with one of the best views of the city (almost 180 degree).
He told me that they are moving in at the end of June. When I put on my fake "congratulations" he was already on the defensive, and mumbled that he was "not looking but just found something" and that "it was just time to buy."
The sad thing was that there was zero enthusiasm in his statement – none whatsoever. Not even a smile. He just had a resigned look on his face as if he knew it was a bad time to buy, but the social pressures to buy were simply insurmountable. He is moving into a one bedroom condo in the West End…
This is pretty sad as he has bought at the absolute peak, knowing that it is the wrong time…
I cannot wait still this city's RE takes a beating so that people stop feeling pressured to buy in order to feel "secure", "mature," and that they are "moving forward with their lives" (and yes, no one has to buy, but being a bear with a significant other in this city requires big cajones)
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May 14th, 2010 at 3:17 pm 86
Forgot to add my name to the last post (at 3:15)
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May 14th, 2010 at 3:25 pm 87
Is anyone else noticing a lot more commercial/retail 'for lease' signs around town?
A year ago there was little; and what there was went quickly. Not now. Just what I'm seeing. Anyone else seeing the same?
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May 14th, 2010 at 3:29 pm 88
@LostInLotusland: "There were some remarks going around including “can’t afford the rising mortgage rate”. Of course I stayed out of others business."
Considering average rental yeild (perhaps I'm a little biased), if you pay full cash pays an epic 0.20% above the gov can 5yr at its peak 1 month ago.
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May 14th, 2010 at 3:30 pm 89
"Didn’t BC Hydro once do a study re ghost condo and proclaim that “only” approx. 17,000 units were sitting unused / empty ?"
This was covered last year I believe.
http://vancouvercondo.info/2009/05/the-empty-cond…
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May 14th, 2010 at 3:39 pm 90
@buff_butler: my only point is that the bears are going nuts on this board like they have won the war. Not so fast. Price follows sales volume, which is still decent. Its very easy to write up a listing contract. Also, very easy to pull it.
Will sales flounder? Why? Not april 19th (So I guess the market isn;t fueled by VRMs)….Higher Rates? Vancouver has had huge sales volume in the past with higher rates than today. Higher unemployment? thats not the trend right now, the unemployment rate is falling
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May 14th, 2010 at 3:41 pm 91
@NO-LYMPICS: Hmmm you watchin me? I have been over there this last week is good money won't say more except this. So far I have three green buildings (heat pumps the world renowned ground source energy type.
When they build these they put in a back up system which is a standard heating system the idea being that in case of a SHORT TERM failure they can use this inefficient system for a few days until the renowned Green LEED system is back up on line.
Heh Heh Heh! Well so far in all three sites the backup system works 90% of the time and the main system 10% of the time. The utility bills are killing a couple of stratas.
Cause? Buy one get one free Engineering Services!
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May 14th, 2010 at 4:00 pm 92
@buff_butler:
I didn't want to have direct interaction with that troublesome guy especially when we're living in the same building. So I don't really know the extent of mess he's in as he had preciously flipped in Richmond and Downtown and moved in and out a few times before. The last thing I want is someone knocking habitually at my door to borrow $500 because he can't get to the bank.
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May 14th, 2010 at 4:06 pm 93
@Poor Smuck: "Social pressures"… you mean the GF demanded a nest or she'll leave!
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May 14th, 2010 at 4:10 pm 94
New Listings 240
Price Changes 132
Sold Listings 70
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May 14th, 2010 at 4:25 pm 95
18,113
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May 14th, 2010 at 4:29 pm 96
Primus,
You said, "the unemployment rate is falling".
Two points. Really, are you sure? Keep your eyes on the needle over the next 6 months. It is flatsville out there.
Secondly, do you really think employment and job increases will offset rising rates, HST and other taxes that are going up. Do the math – every 1% interest rise increase mortage payments 10%. If rates push up 3% over the next 2 years as most people predict do you see employment income rising at an equivalent amount? Not going to happen.
Affordability is eroding. Prices go down.
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May 14th, 2010 at 4:34 pm 97
seems clear to me that sales are decelerating and MOI is pounding higher.
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May 14th, 2010 at 4:47 pm 98
@ Inventory and PaulB – Fantastic numbers
Let's all not forget there are still many upcoming pre-sales rolling into the market – this weekend, May 15th alone we'll see the Olympic Village, Affinity Tower 2, Jewel Tower 2, and so on and so on.
For those developments that are selling "phase 2's", I'm very curious to see what the pricing will be set at. Will it be the same as their respective phase 1's? Or will it be lower? This reflects what the developers think they can get away with. I remember visiting a few of these sites previously and the RE agents on site all pressured "better buy this phase as phase 2 will be surely more expensive". Yeah good luck with that.
Now I know these pre-sale contracts won't count towards inventory, but it surely will affect choice. This grizzly roller coaster can go two ways, both a fun ride:
1) Roller Coaster takes the left fork: these new pre-sales sell decently well – effectively taking away even more fooled buyers from the shrinking buying pool. As mentioned in my previous post, the only buyers left are the ones who secured good mortgage rates and feel the need to use it or lose it – attractive to them since prices have begun to lower (only in comparison of course to the prices they originally saw) If these pre-sales take away from this buying pool, who's left to chip away at the runaway train of inventory?
2) Roller Coaster takes the right fork: these new pre-sales have trouble selling. If that happens, word will spread fast – did you hear? nobody is buying – then the incentives will start coming. If pre-sale units start coming with huge incentives, the competition sitting in inventory will have to adjust.
The end of the ride is the same result. How we get there is the fun part and these new pre-sales that keep coming onto the market will surely serve as a indicator.
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May 14th, 2010 at 4:51 pm 99
#96 Strataman:
You ARE THE MAN !!!
They built a new high school near us and used geo- thermal. I know one of the school districts plumbers and asked him how it was going. This guy just rolled his eyes in disgust.
Your Olympic village story makes me ROTFLMAO
THE best heating system is going to the Sally Ann/Value Village….buy used clothes cheap….(recycle) and add/remove layers of clothes as required.
ALL new hi rise buildings are POOR in energy efficiency, the floor -to- ceiling exterior glass is THE WORST….best they can acheive is an R-3 energy rating, as opposed to a closed insulated wall = R-12.
Its interesting that , as you imply, they anticipated failure on the primary system and had a back-up system in place…I have never heard of such a ludicrous thing.
BTW, the LAST Space Shuttle is being launched ….it will have a spy satellite payload that will be tracking you Strataman LOL.
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May 14th, 2010 at 4:53 pm 100
There's a "For Rent" show on HGTV now. It caught my interest because there's a family selling to rent (I have no idea where) because the cost of ownership sunk 'em.
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May 14th, 2010 at 5:02 pm 101
You know what is fun during a RE meltdown? Searching with the term "reduced" on Craigslist! If you are really feeling evil, search for "desperate" and "motivated"
I tried this during 2008, and it was amazing to see the number of units that had reduced their prices…
At first, it was about 100 or so, but by the summer it was 1000 plus as craigslist only posts a maximum of 1000..
I suspect the same will happen in the coming months…
This time around, I am going to add "help" and "please" (as in please help me) into my search parameters…
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May 14th, 2010 at 5:21 pm 102
Primus: prices don't follow sales volume. That may be folk wisdom among realtors, but it is not fact. Prices follow MOI. See Mohican's <a href="http://3.bp.blogspot.com/_GcUKDFoCTBk/S8_xKxm2JWI/AAAAAAAAAJA/QmHRQCfrbpM/s1600/GVREB+HOH+and+MOI+March+2010+semilog.jpg" rel="nofollow">graph. It is a very tight fit.
When MOI >6, prices drop. Easy as that.
We're on pace for about 3200 sales this month. Not bad. But inventory is set to hit about 19200. Coincidentally, that is a MOI of 6.
Goodnight.
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May 14th, 2010 at 5:25 pm 103
"The sad thing was that there was zero enthusiasm in his statement – none whatsoever. Not even a smile." – Poor Smuck
Well then, he's pretty stupid, isn't he?
(Not that I believe this "story")
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May 14th, 2010 at 5:26 pm 104
Oh, and while you're at it, what direction are sales trending? That's right, down. What direction is inventory trending? That's right, up.
Fun thing about the MOI number. It is really leveraged for small changes in sales. Try plugging in 2000 sales with 22000 inventory. Walk that through Mohican's chart. Good, how does that feel?
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May 14th, 2010 at 5:32 pm 105
@Boombust:
Boombust poor boy, you are totally wrong. Not only stupid people buy during the market peak it happens sometimes to inteligent people to make mistakes but at least they are aware of them instead of going around and prancing like clowns.
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May 14th, 2010 at 5:33 pm 106
Assuming that inventory is going to continue increasing is as dumb as assuming prices are going to continue increasing.
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May 14th, 2010 at 5:33 pm 107
@Poor Smuck:
I see they're all downtown condos that have been "reduced".
Those amateur investors will soon be reduced to tears.
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May 14th, 2010 at 5:38 pm 108
Oh Grampy, you're so funny. Like most evil old people (hint hint there Grampy, I'm also talking about you) she hates *everyone*. She's an evil old racist just like so many in her generation… you included.
I clearly remember her claim that the Vietnamese boat people came over on an ocean liner, then jumped onto those rickety old boats jut offshore so people would feel sorry for them. She once called a bunch of black guys "darkies" in a parking lot. They were *big* guys too. I kept praying they'd take her out.
When you go on one of your demented little rants you just sound just like her, Grampy.
Personally I think the Inuit had the right idea. Once you're too old to be of use to anyone, you just go for a nice long walk in a blizzard and don't come back. If it were up to me we'd do that to most of the Boomers. I'm constantly amazed how they managed to suck all the resources from their parents, then turn around and suck all the resources out of their children and STILL they expect their pensions, to support them in their dotage, and for the next generation to pay wildly inflated prices for their former hippie digs.
"Newfie Frycook?" Jesus you're old Grampy. every Newfie I ever met was warm, openhearted, generous, hospitable to a fault and ridiculously fun and funny. That stereotype predates Newfoundland's entry into Confederation. Just how old are you? Does God remember when you were young?
And the frycook thing, yeah that's devastating all right. Last weekend I cooked for a former premier, as a favour (his wife sustained an injury and was having trouble getting around). I've become well known here for applying French techniques to traditional recipes here.
I don't mind you insulting me Grampy but could you at least do a better job of it? "Newfie Frycook" just doesn't have the zing it did back in the '40s.
Frankly I'd rather be a frycook making an honest living in a place like Newfoundland then be a demented, greedy, youth hating, conspiracy theory addled, fecally obsessed, foul mouthed, irrationally angry racist old fuck in Vancouver.
Just sayin'
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May 14th, 2010 at 5:39 pm 109
"@Boombust:
Boombust poor boy, you are totally wrong."
Sorry, chum. The story is too contrived.
And, as IF I should feel some pity for somebody who moved here only 2.5 years ago from the Prairies and can't afford to buy. Soooo SAD!
Don't be a dunce.
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May 14th, 2010 at 5:40 pm 110
@Anoymous: I actually don't assume that. (See here.
Again, the fun thing about MOI is that the denominator really leverages things. Sale will fall in the summer compared to now. Even if we stick at 20K inventory, that gives us a really juicy MOI when you have 2K or even 2.5K sales.
I'm afraid you are flailing, and failing. It's over. Get used to it. Believe me now or believe me later.
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May 14th, 2010 at 5:54 pm 111
Sorry to disappoint BB, but the story is true…
Take it or leave it, I really don't care…
Of course you question the validity of the story as to contrived, and then add credibility to it by saying that you should not feel sorry for the guy from the Prairies…
Just pick one or the other next time..
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May 14th, 2010 at 6:04 pm 112
#112 scullboy:
Another classic scullboy rant.
Atta boy…chip off the old block.
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May 14th, 2010 at 6:11 pm 113
@Kid Fynnland: Is anyone else noticing a lot more commercial/retail ‘for lease’ signs around town?
Man, no kidding! I'm down near Granville Island and in the area bordered by Granville, Burrard, Broadway and the water there is literally at least one building per block up for lease or sale. I've never seen this many of them, are other areas seeing volume like this?
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May 14th, 2010 at 6:12 pm 114
@Supersogs:
So the Vancouver market is screwed either way. The only way to go is down down down.
The irrational greed and stupidity ruled Vancouver for the last 7 years. The only thing people talk about the rent, condo, pre-sale, Rennie…
It's time for sanity, it's long overdue.
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May 14th, 2010 at 6:13 pm 115
474 olympic condos on sale tomorrow. Uh, ya…good luck with that.
New Listings 282
Price Changes 144
Sold Listings 73
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May 14th, 2010 at 6:22 pm 116
Well we sure know how to oush the frycooks buttons now don't we. Sure thing doofus, i had dinner with the king of Sapin last night and nobody saw me either. Bwahahahahahahahahahahahahahahaa too easy.
Meanwhile, ho hum. I just watched the top reporter at Global do a walk through and cheesy showcase of the OV site. Hey, since when did the Boobster start lisping????? WTF????? I know the boobster, have for years (and years) but dumped the prick off my invite list when he left his lovely wife and kids for the bum boy. But LISPING BOB? Holy Christmas, what makes a 60 year old man start lisping? Anyone (except Skullery Maid who'd know this one) If the last nail wasn't in the coffin of an independant media in Vanshitsville it just got hammered down. An entire threee minute infomercial disguised as 'news'.
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May 14th, 2010 at 6:27 pm 117
@Scorched Earth: I spend a lot of time at the Harbour Centre downtown and stores are going under left and right there. I've been told that the homelessness situation really killed retail there as they used to be open until 9:00 pm on many nights, but were forced to begin closing at 6:00 because of all of the break-ins–mostly by homeless–at the Food Court on the lower floor.
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May 14th, 2010 at 6:36 pm 118
18,156 nuff said
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May 14th, 2010 at 6:37 pm 119
@oneangryslav2: IF this is happening, then why did the UE rate drop in April? I've been seeing the retail vacancies too, but it doesn't line up with the UE rate dropping.
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May 14th, 2010 at 6:38 pm 120
@paulb.: thanks paul. are we done for the day?
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May 14th, 2010 at 6:39 pm 121
Gosh Grampy….. racist, pig ignorant, miserably unhappy *and* homopobic. You're a charmer all right, and a pretty good representative of your generation.
Let me guess, your first and second wives left you years ago, right? First love chewed her own arm off to avoid waking you as she made her escape the morning after you lost your virginity?
Worse yet, still unable to cobble together a decent insult. For heaven's sake can't you be a little creative? Tedious stereotypes are so… mid-20th century
I swear it's worth running for office just to introduce a bill cutting off benefits for the old and feeble.
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May 14th, 2010 at 6:42 pm 122
Last night when I was going through the old threads to get the sell/lists from every day it was funny to read the ones from March. We would get all excited by a day with 100 sales and 250 listings because the sell list was all the way down to 40%. Now we routinely get these days under 40%–and with monster list totals.
We forget just how messed up this is. During the boom years, the sell/list in May was 80% or more. We're at 40% or so for May.
The numbers are speaking to us, loudly and clearly. Only some have their ears open, though.
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May 14th, 2010 at 6:42 pm 123
@VHB: The article I read suggested the jobs were in manufacturing, forestry, fishing, mining and gas – what if BC's UE rate dropped overall but not as dramatically in Vancouver?
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May 14th, 2010 at 6:50 pm 124
@VHB: apparently 18,156 have their ears open
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May 14th, 2010 at 6:51 pm 125
@VHB: Good question. I don't know if anybody closely analyses Canadian UE statistics. I certainly don't and, therefore, don't know if the numbers are real or if the decrease was caused by seasonal or demographic adjustments. Part-time jobs? I have no idea. I'd like to know.
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May 14th, 2010 at 6:53 pm 126
@VHB:
Last May the sell/list was 88% west side and 76% east side.
http://www.sebastianalbrecht.com/vancouver_real_e…
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May 14th, 2010 at 6:55 pm 127
@paulb.: man, i love what those olympic condos are going to do to inventory! with those 474 units, we'll celebrate 20,000 a little sooner
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May 14th, 2010 at 6:55 pm 128
The MSM needs its own downsizing….
The print media is simply ads with a few token stories.
Now that CanWest hs been sold off, get rid of one of our Vancouver papers…sick of the trees sacrificed for condo ads.
Once the condos stop selling, watch the media contract.
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May 14th, 2010 at 7:11 pm 129
@VHB:
Ya I think so.
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May 14th, 2010 at 7:33 pm 130
@patriotz:
The Olympic Village doesn't even come close to Expo for waste of taxpayer money. The Olympic Village was a one time cost. We have been paying money into the Expo lands for 25 years now. And then factor in the opportunity cost of selling the land for its true value. HUGE.
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May 14th, 2010 at 7:33 pm 131
************* 1/1/2010 / 5/14/2010 / % change
Bowen Isld 46 / 113 / 145.65%
_Bby East 68 / 176 / 158.82%
_Bby North 345 / 810 / 134.78%
Bby South 362 / 835 / 130.66%
Coquitlam 531 / 1199 / 125.80%
Van.&Gulf 215 / 269 / 25.12%
___Ladner 65 / 154 / 136.92%
MapleRidge 575 / 1106 / 92.35%
_New West 262 / 619 / 136.26%
_North Van. 412 / 1061 / 157.52%
OutofTown 105 / 68 / -35.24%
_Pitt Mead 121 / 203 / 67.77%
_Port Coq. 237 / 497 / 109.70%
PortMoody 213 / 470 / 120.66%
_Richmond 893 / 2040 / 128.44%
_Squamish 402 / 516 / 28.36%
Sunshine C. 656 / 1108 / 68.90%
_Tsawssen 98 / 210 / 114.29%
__Van East 767 / 1593 / 107.69%
_Van West 1396 / 3558 / 154.87%
_West Van 386 / 742 / 92.23%
__Whistler 569 / 805 / 41.48%
_____Total 8724 / 18152 / 108.07%
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May 14th, 2010 at 7:35 pm 132
For comparison peak of inventory 2008
************* 1/1/2008 / 9/30/2008 / % change
Bowen Isld 33 / 84 / 154.55%
_Bby East 81 / 224 / 176.54%
_Bby North 299 / 1002 / 235.12%
Bby South 321 / 981 / 205.61%
Coquitlam 503 / 1550 / 208.15%
Van.&Gulf 114 / 196 / 71.93%
___Ladner 69 / 209 / 202.90%
MapleRidge 557 / 1177 / 111.31%
_New West 303 / 741 / 144.55%
_North Van. 324 / 1064 / 228.40%
OutoTown 188 / 327 / 73.94%
_Pitt Mead 138 / 183 / 32.61%
_Port Coq. 258 / 663 / 156.98%
PortMoody 225 / 586 / 160.44%
_Richmond 887 / 2639 / 197.52%
_Squamish 270 / 516 / 91.11%
Sunshine C. 540 / 1060 / 96.30%
_Tsawssen 99 / 226 / 128.28%
__Van East 722 / 2117 / 193.21%
_Van West 1234 / 3978 / 222.37%
_West Van 324 / 790 / 143.83%
__Whistler 382 / 701 / 83.51%
_____Total 7871 / 21014 / 166.98%
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May 14th, 2010 at 7:37 pm 133
My friend works for the government. This week, they announced 38 lay off out of a crew of 80… Who says unemployment rate is decreasing and that all is for the best in the best of all worlds?
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May 14th, 2010 at 7:42 pm 134
@VHB:
And 40% is balanced. That suggests no major shift in prices. High lists and high sales. That's the story.
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May 14th, 2010 at 7:46 pm 135
@painted turtle:
The employment situation is improving. Jobs are being created and unemployment is going down. BC is leading the way. I am personally extremely busy right now. If I could clone myself, I would.
Turtle, government needs to change. It's too big, too inefficient and very ineffective. Does anybody really think we have a functional bureaucracy? It needs a major transformational shift. But nobody seems to have an appetite for that so I think cutting the size and budget of government is the next best thing.
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May 14th, 2010 at 7:53 pm 136
@Dave.: "cutting the size and budget of government is the next best thing"
Yes, let's start from the CMHC! It should be abolish it! That's cutting a big chunk of government liabilities!
Dave, I never thought I would agree with you, but please tell me you agree with me!
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May 14th, 2010 at 7:55 pm 137
Take it easy scullboy. Real estate is not the only thing that has gone wacky for so long. $75 – $160 per person for a home-style meal in Steveston Village.
http://tinyurl.com/299u94h
Hope things will work out fine for you eventually.
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May 14th, 2010 at 7:58 pm 138
Just had a look at the MLS for White Rock… completely covered in red dots!!!
Also incredible listing in New Westminster for the condo towers by the river.
I sell tree and me huzbund sells tree.
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May 14th, 2010 at 7:59 pm 139
Not so long ago I was poo-pooed for saying inventory would rise to 20k by end of may. Anyone still doubt that?
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May 14th, 2010 at 8:07 pm 140
I agree about the CMHC. They seem to be struggling trying to find a mandate. Their role is far different today than what it was created for to begin with. And you can bet it is now bloated with jackass bureaucrats that try to build little fiefdoms by lobbying for a budget to solve the issue of the day. Climate change is a good example of this. I bet every single Ministry has staff that work on Climate Change issues. I bet half of them spend their time in conferences trying to learn about things they have no clue about. The other half they spend in meetings together creating position papers about what was learned. Useless.
We need mortgage insurance and other financial rules around housing for reasons clearly shown in the US. But, we don't need the CMHC to manage such a system.
The change I speak of will occur. The question will be whether it is forced upon us for lack of choice (financial crisis), or whether we adjust and keep ahead of the curve. Government consumes too much of our economy and produces too little for what is invested. With an aging population and growing entitlements, profound shifts are going to be required.
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May 14th, 2010 at 8:15 pm 141
Well said, Dave.
"With an aging population and growing entitlements, profound shifts are going to be required."
And this is the crux of the problem with the social democracy model in Europe and increasingly in the US today. No amount of bashing speculators, tweaking EU rules or stimulus spending and bailouts will alter this fundamental fact.
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May 14th, 2010 at 8:21 pm 142
Dave. said: …CMHC. They seem to be struggling trying to find a mandate.
I was curious about this a while back, so I decided to look up what their mandate was. I was surprised to find that, in spite of what it says on their website, they don't actually have a legal mandate. They are 100% subservient to the government of the day. And these days the government has been reduced to the Prime Ministers Office.
Which explains, I guess, why they would go way out of their way to feed a housing bubble, grossly over inflating home prices, while declaring that they are all about housing affordability.
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May 14th, 2010 at 8:24 pm 143
NO-LYMPICS said: ALL new hi rise buildings are POOR in energy efficiency, the floor -to- ceiling exterior glass is THE WORST….best they can acheive is an R-3 energy rating, as opposed to a closed insulated wall = R-12.
Ever heard of cold climate low-e windows? R value is not everything. This ain't the 70's anymore.
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May 14th, 2010 at 8:29 pm 144
@elvince:
>>>Not so long ago I was poo-pooed for saying inventory would rise to 20k by end of may.<<<
Well, the sellers are still poo-pooing but it's in a different context now.
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May 14th, 2010 at 8:37 pm 145
Amateur landlords are so darned funny.
http://vancouver.en.craigslist.ca/van/apa/1740355…
(see last line)
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May 14th, 2010 at 8:40 pm 146
Here is this week's total:
sales: 750
New listings: 1911
sell/list: 39.2%
Given that there are effectively 4 work weeks this month, and that two are gone, we are half way through.
Total sales are about 1557 and total listings are 3771.
This would mean we will have sales of around 3100 and listings of 7500.
These are inventory/paulb numbers, so they include land and multi-unit.
Going back, I only have attached+detached+apartment, but just for fun, here are those sales totals for the past few Mays.
May 2006: 4297
May 2007: 4331
May 2008: 3002
May 2009: 3524
So, sales are set to come in somewhere around 2008's level; much lower than other recent years.
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May 14th, 2010 at 8:41 pm 147
Chip, I don't think there is a problem with the concept of social democracy. Our system allows us to manage our affairs as we see fit. I see the problem being that we have inherited a form of structure and management that is no longer effective. And it continues to grow like a cancer.
How many programs and budgets in government are zero based? How many programs are designed to phase out of existence once a certain task is accomplished? Pretty much none. Our government has a top down command and control structure that is like the military, except the people at the top are a bunch of tits, unlike military leaders who I have higher respect for. We need a recon-pull structure. When a need is identified by the public, it is quickly and effectively acted on by a team of people that form for that particular task. And once done, those people go on the merry way to something else.
I am not saying we change the entire government overnight. Let's start small and see if ideas like mine work. Let's take the best ideas and role it out across government. It will take years, but it's better to change now while we have options than to have changed forced upon us. Either way, it's coming.
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May 14th, 2010 at 8:42 pm 148
@VHB:
I think the only question that remains is, how quick and dirty will this crash be?
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May 14th, 2010 at 8:44 pm 149
The Province claims one of three National Newspaper Awards won by Canwest
http://www.theprovince.com/Province+claims+three+…
No wonder the idjits at CanWest love the realturds so much; commonality. Both industries present fiction as fact and pat each other on the backs, handing out meaningless awards to one another. A circle jerk by any other name remains a circle jerk.
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May 14th, 2010 at 8:47 pm 150
In the 9 working days between May 3rd and May 14th, we added 1352. This is a pace of 150.22 a day. If we do the same pace of 150.22 over the 10 remaining working days in May, we will wadd 1502 more units.
Today's count is 18152. Adding 1502 gives us 19654.
So, if we get some more 500+ listing days we might actually have a shot at 20K in May. But I suspect we'll more likely settle around 19.5K. If it makes you feel better, then you are free to dream of 20K!
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May 14th, 2010 at 8:54 pm 151
Oh. One last thing. If you take our projected inventory of 19654 and divide it by our projected sales of 2*1557=3114, you get a MOI of 6.31. This is into the RED zone according to the Mohican model!
AND, May is on average the biggest sales month, so sales are almost guaranteed to be lower here on out. As I mentioned before, try seeing what the Mohican model spits out when sales are 2K and inventory is 20K. It's juicy, my friends. Real juicy.
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May 14th, 2010 at 9:03 pm 152
Dave, to be clear, when I criticize social democracy it's not to rap democracy or some such.
Social Democracy is the catch-phrase used to describe where most of Europe is today, and where the US is going tomorrow; sometimes defined as "the belief in a gradual transition from capitalism to socialism by democratic means."
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May 14th, 2010 at 9:24 pm 153
"…and then add credibility to it by saying that you should not feel sorry for the guy from the Prairies…"
Yeah. Right. Just like I should feel sorry for some 22 year old who gets off the bus from Ontario, lands up in the DTES and screams about his/her/its need for "social housing"?
ANYONE who has only been here for 2.5 years and feels ENTITLED to BUY a place, CHEAP, while oher people, notably, the ones who were BORN AND RAISED here…
You obviously don't get it.
Buggar off. I know what I'm talking about, and you don't. So there.
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May 14th, 2010 at 2:28 pm 154
@Absinthe: My contention is that we do not have a bubble. Maybe got a bit ahead of ourselves in the last year. But overall Vancouver and Canada will be one of the best places to live and invest in the foreseeable future.
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May 14th, 2010 at 2:30 pm 155
New Listings 176
Price Changes 103
Sold Listings 47
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May 14th, 2010 at 9:32 pm 156
@paulb.: It will be interesting to see how this echo correction plays out. Without the ability to drop interest rates further, my guess is that the descent to historical price/rent ratios will continue where it left off in 2008, chopping off 35% off peak prices.
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May 14th, 2010 at 9:36 pm 157
All good stuff VHB, but we talkin bout the same planet as the Silverman gang on the JH blog???
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May 14th, 2010 at 9:39 pm 158
I hate to fan the flames of the "wealthy asians" debate, but found an interesting article about RE investors in China:
http://www.foreignpolicy.com/articles/2010/05/13/…
From the article:
Maybe these wealthy Asians really do make up a small part of the Vancouver market, but if they tend to leave their "investments" vacant in Vancouver like they do in Beijing, that would certainly explain a lot of the the upward price pressure due to the units effectively being removed from the housing stock.
Just a thought.
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May 14th, 2010 at 2:40 pm 159
Primus,
Where the rubber hits the roadkill you mean, don’t you?
First of all, remember that many people pre-qualified prior to the rule changes. Many of them knew enough to wait a month or two for inventory to rise.
Secondly, there is nothing left to support the market. Prices are already falling. Within months it will be obvious even to you that there was a bubble.
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May 14th, 2010 at 9:41 pm 160
Some graet analysis by VHB. I miss your blog buddy. How about getying it going again.
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May 14th, 2010 at 9:41 pm 161
@chip:
Fair enough. It's not how I define or understand the term. I have the same concerns about the growth of government. I think we can achieve the same social and societal outcomes by changing government.
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May 14th, 2010 at 2:42 pm 162
@patriotz:
Provincial and Federal Gov’ts are literally legislated to pull bad moves….and yeah, I agree Vander Zalm’s Expo Land deal was terrible.
However Local Gov’ts are legislated to run balanced budgets. The ” Olympic Village ” is a scam for every Olympics….London’s 2012 is already a debacle.
The COV should have sold the land to the highest bidder, and not maintained ownership of the land. The COV could have dove in later if need be. COV citizens can be assured that this will not have a happy ending…especially with that goofy Council they have now.
Maybe our expert”STRATAMAN” can advise, but all that ” Go Green ” shit in the Olympic Village has already cost a built – in premium (overhead),and such “tech” is also not cheap to fix, and their merits are often overblown anyway.
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May 14th, 2010 at 9:53 pm 163
@Yalie: Ms. Wang is a speculator in the purest sense of the term. The most common error of being a speculator is not knowing when to get out of an asset before everyone else does, that's why very few speculators make money in the long run. Most will make a lot of money and only to lose it again.
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May 14th, 2010 at 10:00 pm 164
Yup, looks like we are headed into negative price changes with the current inventory build up. It has pushed MOI into the 'red zone' of stagnation / price declines. Once MOI goes over 6, then we are clearly in a 'buyers' market where the buyer has most of the negotiating power.
A MOI of 8+ will really cause prices to fall quite quickly. I think we will end up with a MOI of 10-12 this years sometimes unless sales really plummet like in 2008.
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May 14th, 2010 at 10:04 pm 165
International people or local both of them work hard.World wide market is divided into two category,Bears and Bulls.Once my girl friend told me if you smoke cigrette you will have a smoking heart and if you eat sugar you will become my sweet heart.So the bottom line is if you buy home you will become home owner and if you buy drugs you in the matter of fact will be hasting street owner.
Hey boombust shut the fuck off buddy and get a real time nut slapping job. people who invest here they also keep the economy and your job up.
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May 14th, 2010 at 10:08 pm 166
@Yalie:
I hope that business woman doesn't mind watching those 3 "investments" sink 31% in one month. Because that's exactly what just happened to "commercial residential real estate" in Beijing.
It's such a herd mentality.
How many times have I watched this play out, and I'm only 32. People start making money in stocks, they hear stories, they flock to the stocks, run out of buyers, hit a top and watch it drop. The smart money doesn't get too greedy, they get in early and out early, while they count their profits. The herd follows, they get in late, get greedy and don't get out in time, counting their losses, licking their wounds.
Then, failing to see the error in their herd following ways, they don't take ownership for the poor choice, they get turned off by the investment or asset class. They look for another… here comes real estate, this scenario is what happened post tech-bubble, for those unfamiliar.
But, it happens in every investment, every asset class. Over and over and over again, people just want to ride that wave of easy money.
The problem for the majority of people is that when they all jumped to real estate as their main investment, they're doing it with borrowed money. Just like any experienced trader will tell you: leveraging money to play on an investment is risky. The public has seen prices rise in real estate so fast for so long, and has bought the hype of "it will never go down" and boom, you've got the mother of all bubbles, in one of the most expensive asset classes on earth, with the majority of it in borrowed funds.
Sooner than later "negative equity" is going to be part of the herd's vernacular, probably in China too, I reckon.
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May 14th, 2010 at 10:23 pm 167
In December 2008 moi was higher,sales were only at 750 sales, sell list ratio was only at 21% but prices went up 2% month over month.Those who think price will ever fall is a plainly bearish head for decade and and Mohican,Paul,and Vhb.They were all there like tampax.
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May 14th, 2010 at 10:32 pm 168
@scullboy: Hi yah Scullboy wow you in a sheet mood ..moving back goin home and this is your result? Granny is to blame? Sheesh! You will come back cause that is who you are.
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May 14th, 2010 at 10:33 pm 169
@Vansanity: Careful on that Beijing prices dropping by 30% in a month number…. I looked into that a little further and really only one article on it…one that seems to have a few issues re translation…meaning it would seem they meant volumes not prices…
Don't vote me down on this for the sake of it. I amm a huge Van real estate bear. But I do try to get the facts straight.
If anyone can find more proof of this supposed 30% price decline, I would be happy to be wrong.
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May 14th, 2010 at 11:00 pm 170
18,166
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May 14th, 2010 at 11:38 pm 171
Wow, Millennium Water goes on sale tomorrow? People must have been lined up for days, cause, well, that is what happens when a new development starts selling units in Vancouver… right?
That is, unless all the crazy demand has dried up and no one wants to buy. Houses and Condos in Vancouver are like iPods; If you don't have one by now, you probably just don't want one.
This market is so ridiculous, it really isn't funny anymore. The reason that more than half of Vancouverites think that prices only go up here is because they have only been here for 10 years (or less) and have never seen anything other than the boom.
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May 14th, 2010 at 11:55 pm 172
dave says:
The Olympic Village doesn’t even come close to Expo for waste of taxpayer money. The Olympic Village was a one time cost. We have been paying money into the Expo lands for 25 years now. And then factor in the opportunity cost of selling the land for its true value. HUGE.
that's for sure, even 25 years ago peoples knew the expo lands sale was short sighted to a mammoth degree. the olympic village is going to end up being a huge rental project. i expect the sales campaign to bomb out, there are way too many negatives with it for the money they're asking. at some point massive government reflation will come, the city can look to get rid of it then.
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May 15th, 2010 at 12:04 am 173
happy renting says about the cmhc:
I was curious about this a while back, so I decided to look up what their mandate was. I was surprised to find that, in spite of what it says on their website, they don’t actually have a legal mandate.
i've mentioned this before, long before the cmhc was on the radar of joe bear nutslap. the cmhc is a cash cow for the government with no official mandate, no scrutiny, and in fact no liabilities. the cmhc is a defacto department of the central bank, ergo huge reflationary powers; no need for objective reserves. the premiums they collect from mortgagees is pure gravy.
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May 15th, 2010 at 12:13 am 174
@hombre: silverman is an asshole and like every asshole he stinks.
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May 15th, 2010 at 12:16 am 175
@Scorched Earth: Yes, "for lease" signs are everywhere from Dunbar to Abbotsford. Residential was not the only mega-bubble. Increasing vacancies (due to a lousy economy) reduce cash flows (for debt serviceability) and eventually bring down values. This environment of super low cap rates won't hold. And when it busts, it's going to do a tap dance on landlords and their lenders.
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May 15th, 2010 at 12:22 am 176
@Dave.:
No we don't need mortgage insurance. Mortgage insurance, like all bond insurance, is a fraud. You cannot insure against systemic risk like debt defaults. That's the reason Canada's last truly private mortgage insurance company (MICC) went broke decades ago, Fannie/Freddie, AIC etc. south of the border more recently had to be bailed out, and all mortgage insurance in Canada (and south of the border) is now supported by the government.
What we need is simple. Limit banks to lending 80% of fair value of RE (not inflated market value), and let the buyers get the remaining amount any way they want, as long as it's not from a bank. They can borrow from non-bank lenders, or (gasp) save a down payment.
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May 15th, 2010 at 12:31 am 177
@VHB: 1) New business start-ups funded during low interest rate environment (esp. restaurants/cafes), post dot.com crash, led to higher rents. Higher market rents then pushed out older businesses at renewal time. 2) Landlords who bought/built high, have not dropped their "asking" on lease rates – yet. 3) With new condo/mixed developments popping up everywhere, a lot of new "retail" space suddenly became available recently. 4) Where were most of the new jobs created recently?
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May 15th, 2010 at 12:59 am 178
@supersogs
I have to agree with you… I've been planning to buy a place over the past year, but haven't pulled the trigger because the prices are so absurd, but I happened to go into the RBC branch right before the mortgage rates increased, and was offered a 3.75% 5 year rate good for 90 days. I actually seriously looked hard for a place, but I still couldn't come to a justification of the pricing, so I stopped looking after a week. Some of the places I had on my watch list actually came down in price over the past month, so I can see how people might get lured into buying right now. Anyhow, once this 90 day locked in mortgage is up for everyone (July), I think the sold numbers will decrease a lot more than the current weak percentages… At the time, the mortgage broker told me he completed over 100 applications in one week on his own, so I can only imagine how many people did lock-in and purchased, or are about to purchase at these crazy prices…
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May 15th, 2010 at 1:24 am 179
Patriotz: You can insure against systemic risk like defaults. There are a number of ways to do so, and to the extent you face counterparty risk, it is then a question of evaluating the credit of the counterparty. Bond insurance is not necessarily a fraud if you have evaluated the credit of the counterparty under severe downside scenarios. Bond insurance is just valueless if the counterparty is not truly diversified and has insufficient capital.
The government does not need to interfere in the market by limiting the extent to which banks can lend. Banks, however, should be forced to actually evaluate the credit of the borrower by accepting the risk themselves, rather than shunting it off to the government. Because of the government's guarantee of bank deposits, the banks should be subject to regulation, but arbitrary regulation like "80% LTV" is not the answer. The best answer in reality would be to get a market price for deposit insurance and then charge banks market rates dependent on the risk of the banks themselves to punish them if they took excessive risk.
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May 14th, 2010 at 7:48 pm 180
Wonderful numbers today as well. I am getting spiled!
The funny thing is that so much new inventory is coming online over the next 6 months, with several new completions, that 18,000 might look like a low inventory stock in September!
Prices might start adjusting from the bottom up, with small condos dropping first. But the whole domino will unravel in due time.
Welcome to the city of the “Best crash on earth”. Enjoy the show, it took a while but it is finally here.
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May 15th, 2010 at 4:52 am 181
@girlbear:
Well, perhaps, you're right. But the article that I read was the same that Mish's blog quoted and it actually gave the difference of prices per square foot (yuan:meter ratio to be more precise). That's pretty specific, nothing volume related about that.
Keep in mind that bubbles are like bullies: the bigger they are, the harder they fall.
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May 15th, 2010 at 5:56 am 182
@strataman:
Is that really you, 'cause that post smelled a little more like Kite.
No actually, I'm not in a sheet mood. I'm a born sheet disturber though and reminding ol' Grampy that (a) he's crazy and (b) he's going to die soon is free entertainment.
Granny's evil but she's *always* been evil, I just never bothered to mention it. Most of the elderly I've encountered are, though. Like Grampy, most of 'em are homophobic which is why I dislike them as a group.
Turning that kind of attitude back around on 'em is my way of educating them about the effect of their small minded way of thinking. It rarely works because hey… they're old. They're cranky and angry, they're self righteous and their minds are frozen and the rarely learn anything new. Still, a guy has to try.
I'm quite looking forward to travelling to Van on business. For all of Grampy's disparaging Van as a shithole, it isn't. It's a beautiful city and it can be lots of fun. There's a reason people love it after all.
The best way to enjoy Van right now is as a visitor with an expense account, however. It's just stupid expensive otherwise.
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May 15th, 2010 at 7:16 am 183
Re: Beijing Prices falling
http://www.capitalvue.com/home/CE-news/inset/@100…
My guess is it has a lot to do with the new property taxes in Beijing, and the recent gov't edicts tightening up lending.
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May 15th, 2010 at 7:17 am 184
stagnate said: cmhc is a defacto department of the central bank
I would not agree with that. The National Housing Act says that CMHC does whatever the government wants. CMHC does not answer to the Bank of Canada.
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May 15th, 2010 at 7:48 am 185
@Happy Renting:
That's exactly right. More formally, CMHC is a policy arm of the government, like other Crown Corporations such as Via Rail, Export Development Canada (and formerly Petro-Canada, CNR, etc). Its directors answer to the federal cabinet.
The Bank of Canada is independent of the cabinet (well it's supposed to be) and its mandate is set by Parliament.
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May 15th, 2010 at 8:03 am 186
@paulb.:
How Quick and dirty? That is a great question Paul…although It reminds me of my very first accounting professor…talking about T-accounts as a "quick and dirty" method of making back-of-the-napkin calcs. Everytime he would say that, someone in the class would snicker.
Anyway…back on topic.
We know from world history that bursting bubbles are roughly symmetrical around their peaks. I would consider the true peak to be in 2008 just from a cost of capital standpoint. Based on this, You could extrapolate that we may be nearing the the end of the ride in 2015-16; after a series of low double-digit price drops.
We know from more recent history that Vancouver Real estate has cowboy style volatility. What happened in 2008 was nearly unprecedented in recent RE busts (at least on a North American scale). If we extrapolate that trend, we may point to a bottom close to 2012. The USA has already paved the way for what a RE bust looks like. We may thus simply accept their precedent as an inevitability.
If I could have my cake and eat it too, the price drop would be about -8% a year until the later half of the year. Prices would be back in line with fundamentals, and there would be limited blood on the streets. (I am trying to build a career after all).
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May 15th, 2010 at 8:09 am 187
Stop to ask yourself:
"If I had to wait until 2017 before prices made sense would that make me unhappy/impatient"?
If you answered yes, then you are carrying the "virus". (barring a few exceptions based on necessity of ownership)
While this above attitude is the norm now, we will not be reaching our RE bottom without this attitude being diminished greatly. All of us bears had better watch that we do not get sucked into the societal pessimism when it is truly a great time to buy.
I've rented, I've owned 3 homes. I can now honestly say that either option represents a roof over your head and monthly cash outlays. I have worked to remove the social construct of "unless you OWN it you cant REALLY enjoy it" out of my mind.
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May 15th, 2010 at 8:24 am 188
@“A-Sharp” Accountant:
No that's not looking at it correctly. The damage is already done which someone buys at an excessive price – the damage becomes apparent to the buyers when prices fall, but the buyer has committed to excessive debt and payments right from the time of purchase. The longer it takes for prices to reach sensible levels, the more people will buy high, and the more damage will be done.
The optimal scenario for economic recovery is a quick bust like in 1981-82.
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May 15th, 2010 at 8:31 am 189
@VHB: "IF this is happening, then why did the UE rate drop in April? I’ve been seeing the retail vacancies too, but it doesn’t line up with the UE rate dropping."
———
All here who love numbers should get David Rosenberg's daily posts, often has some great figures and charts. Essential reading.
Here's Dave 7 May 2010:
Canadian employment surged 108,700 in April, but unfortunately it does not pass the proverbial sniff test
ONE LOPSIDED CANADIAN JOBS REPORT
Let’s get all the headlines out of the way first. Canadian employment surged 108,700 in April, which exceeded the consensus by a factor of four, in what was the largest increase since January 1976 (and back then, employment rose another 100,000 in the following three months). The increase was 8% at an annual rate, which is the sort of runup we see every five years or so. The labour force participation rate rose to 78.2% from 77.9%, the highest since May 2009. The employment rate (employment-to-population ratio) spiked to 61.8% from 61.5% — the highest since this time last year. The jobless rate dipped to 8.1% from 8.2% — back to where it was a year ago when everyone was talking about Armageddon.
This report, unfortunately, does not pass the proverbial sniff test. And, it’s not just because 60% of the gain was in part-time jobs. It’s the sector split. Fully 100% of the job creation took place in three sectors that account for a mere 20% of the employment pie, and also largely reflect what had (“had”, not “is” or “will be”) been supporting the economy — the housing sector and all the ancillary activity that goes along with it.
Construction employment rose 24,400;
Business, building and other support services surged 31,300;
Financial and real estate added 10,500 jobs; and,
The “other service” category soared 29,000.
Right there we have 90% of the employment gain in these housing-related areas that account for barely more than one-fifth of the employment pie. Tack on the 20,000 job gains in “information, culture and recreation” and what we have is an employment report in which a quarter of the economy posted job growth and the other three quarters actually recorded a loss of 6,500. There were actually outright declines in many sectors, including export-oriented areas such as transports/warehousing (-4,900) and manufacturing (-20,600). Historically, when we see headline employment rise this much, both in absolute terms and relative to the consensus, manufacturing payrolls are up 95% of the time; but not in April 2010.
The veracity of the data must be called into some doubt when headline employment posts its fastest gain in 34 years while the manufacturing sector records its largest decline in 10 months. Besides, if there was truly that much labour demand and that much of a tightening in the jobs market, why were wages barely unchanged last month? Average hourly and weekly earnings were up a tepid 0.1% MoM and have barely budged since January.
If I was at the Bank of Canada, the one chart I would make sure Mark Carney saw is the one showing the average duration of unemployment, which jumped to a 10-year high of 19.3 weeks from 15.4 weeks a year ago (see below). And, another story beneath the veneer is that the number of Canadians who were working part-time because they could not find a full-time position due to “business conditions” rose 10%, or by 19,000, over the past year to stand at its fifth highest level on record.
In other words, it may be best to fade today’s seemingly buoyant headline.
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May 15th, 2010 at 8:41 am 190
@Primus: "Will sales flounder? Why? Not april 19th (So I guess the market isn;t fueled by VRMs)….Higher Rates? Vancouver has had huge sales volume in the past with higher rates than today. Higher unemployment? thats not the trend right now, the unemployment rate is falling"
—
The critical 'tipping point' will come when falling prices themselves become a reason for increased inventory AND for reduced sales.
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May 15th, 2010 at 8:48 am 191
@patriotz:
You are right. The hangover remains regardless of how it deflates. A dollar of debt is a dollar of debt no matter how you want to look at it.
I'm talking about attitude, which is also important but in a different way. The truth is the same, but the message is a little different. A couple years at 30% down vs a long stream of gentle declines is the same net position at mortgage renewal time, but it will attract less GOVT attention/intervention on the way.
Maybe I am being delusional in that I would love this correction to sneak in as unnoticed as possible. Just an asset/fundamental valuation alignment like any other in history.
Again…having my cake and eating it too.
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May 15th, 2010 at 8:56 am 192
@“A-Sharp” Accountant:
Federal government attention will, as always, be focused on Toronto. The GTA may well see a long slow decline. BC is far past that point, and there is nothing the BC government can do about a bust, although they might offer some window dressing for the sake of appearing "concerned".
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May 15th, 2010 at 9:13 am 193
Inventory: Thanks for this post. Very helpful data!
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May 15th, 2010 at 9:13 am 194
What happens to the oly village condos today for the stats? If unsold, will these show up shortly in the system as inventory? If sold, do they show up as sales right away?
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May 15th, 2010 at 9:51 am 195
Three points – caveat I'm a bear
1) Most the people I know who owned several properties before 2008 didn't reload or have manageable levels of inventory. In 2008 they put all their places up for sale knowing that they only had to sell 2 of 6. Also before 2008 you bought before you sold – now you sell before you buy.
2)LT interest rates are probably going to stay low for a much longer time than people had originally thought – look at the rally in the long end of the yield curve. I suspect we will have a lost decade similar to what Japan experienced for the past 20 years. I KNOW what that has done for their RE prices!!!
3) If anyone goes down to millenium I'll be the other white guy. Actually Their might be a few happy subsidized gov't employees wondering around. What's next for the local gov't – stock promotion of junior gold plays Mongolia.
Just sayin.
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May 15th, 2010 at 11:33 am 196
I think that they will see lots of traffic at the OV but mostly looky loos yearning for some free entertainment. They probably have some free refreshments and you can see where world class athletes slept. If you look close you might even see Rock and Roll rennie in his goofy suit and sneakers. Sounds like a fun afternoon….. Not
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May 15th, 2010 at 11:45 am 197
#158
Oh boom boom, you are such a bitter little bear…
You almost sound as old and grumpy as Realpaul, but your posts indicate your youthful angst…
Its a shame you have some much anger and hatred in all your posts…it will eat you up one day
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May 15th, 2010 at 11:48 am 198
@paulb / inventory:
Any new listings today? pls pls pls tell me yes.
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May 15th, 2010 at 1:12 pm 199
Yep, can't wait for the Olympic Village sales stats after the weekend. Could be a real canary in the mine re the condo market.
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May 15th, 2010 at 1:51 pm 200
According to CBC radio today, lots of people buying condos at the Olympic Village. Don't know if I really believe them. Though given what's happened in the market over the past 6 years, anything's possible.
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May 15th, 2010 at 3:03 pm 201
re Olympic Village:
I persoanlly don't care if it sells out or sits empty. I wouldn't touch it with a 10 ft pole. If people are stupid enought to buy a Gov't funded project being sold by Boob Rennie, they deserve everything that comes to them.
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May 15th, 2010 at 3:15 pm 202
Took the kid to Playland today, not busy at all is a tell tale economic barometer. Never in my life have I seen such a large accumulation of fat broads with tattoos. (Well, maybe when Surrey gives out free cake on Canada Day.) I kept thinking Ricky and Bubbles would turn the corner at any moment. Tomorrow, hang out in West Van for the pure enjoyment of being around people who bath and have teeth.
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May 15th, 2010 at 3:25 pm 203
We're a local company that does business around the globe.
Well how many deals and where?????????????
We leverage our knowledge and skills to deliver the kind of service we'd expect to receive.
Leverage your knowledge?????? What to find mortgage brokers in the phone book????????
We tailor services to fit all kinds of people and situations.
Like no down payment no problem????????
We're comfortable using the internet and sharing knowlege.
Here we go again…knowledge…..qualifications please??????
We've got lots of experience.
Experience at what???? Finding an open house???
We'll share it with you to create a long term relationship based on friendship, trust and mutual respect, and when we do we'll all profit.
Trust???? Pumping deals like the reno and flip you are trying to unload????
Life is too short to be engaged in a soul destroying search for nothing more than profit, so we only represent buyers, sellers and investors that share our values.
Values, what values do have, give an example.
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May 15th, 2010 at 3:33 pm 204
What rent would you get for a 2br, 1000sf oly village place? Can anyone suggest a comparable from Craig's List?
I'm guessing that it would be hard to find a lot of tenants willing and able to pay anything more than 3K. Market price might be 2500K. Unless I just don't 'get' the oly village premium.
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May 15th, 2010 at 3:49 pm 205
Just got back from the Millennium Waters. Here are some thoughts:
-the water views are very average. A cloudy green pond does not constitute waterfront in my eyes.
-lots of Asians, but I heard a lot of Cantonese speakers (ie. Not "hot" China money)
-definitely lots of native English speaking folks too. (There are greater fools in all walks of life)
-didn't see Leo Chen and his sandwich board, I was hoping to get his autograph
-there was a lineup to write up contracts!
-Bob Rennie and his shoes, gotta love that
-lots of Gays. Was it Pride week? seriously..
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May 15th, 2010 at 3:57 pm 206
@girlbear:
I came across an article regarding that purported 30% drop in prices in Beijing. Some dude (he was a developer though
speculated that those numbers were highly skewed because sales of some of the ultra luxury apts were frozen, thus quickly reducing the average price. Here's the article:
http://business.asiaone.com/Business/News/Story/A…
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May 15th, 2010 at 3:59 pm 207
@VHB:
$3000 for OV, are you kidding?
$2800 gets you a 3BR townhouse in the west end.
http://vancouver.en.craigslist.ca/van/apa/1742458…
$2000 for Rennies pile of shit is more like it.
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May 15th, 2010 at 5:04 pm 208
@ibought3: Which explains why Bob was speaking with a lisp on Global the other night – what are the odds that the marketing plan is partly to the gay community -and Bob was doing his part.
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May 15th, 2010 at 5:10 pm 209
@Best place on meth: Still, let's for the sake of argument give him 3K / month rent. If you want an 8% gross yield, which is equivalent to 12*1/0.08=150 times monthly rent, that gives you a value of 450K.
Haven't I heard that list prices are around $800/sf? So, a serious investor would likely need around 50% off list prices to make it a decent investment, on a yield basis. Of course, if your plan is to offload it in two years for a capital gain, then . . .
If you think 8% is a reasonable gross yield, then to justify $800K for the place you would need a rent of $5333 a month.
On the other hand, if you think 3K a month is the most rent you will get, you would have to be happy with a gross yield of 4.5%. If meth is right and you would only get 2K rent, that would be a gross yield of 3%.
Not that this is new to any of us–we've been making these calculations for years. The point of these calculations is that the ONLY reason that anyone would EVER buy these turkeys is because they expect prices to go up, not for yield. And that means that as soon as prices stop going up–even if they go sideways–there will be no buyers. But we already know that . . .
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May 15th, 2010 at 5:22 pm 210
@VHB:
Agree VHB
When the sexiness of Cap gains is gone, all that will be left is boring ol' white-potato yield…
8% ROIC is minimum for a moderately risky investment, even at these historically low capital costs.
If interest rates creep up into the 5-6% range, then expected rates of return must go up more as well.
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May 15th, 2010 at 5:38 pm 211
You mean, …like……there is a correlation between gay people and waterfront condos ?
Anyway…Richmond is getting a real boner about ASPAC planned waterfront condos near the Olympic Oval. A letter to the editor stated that Richmond residents know full well of the noise from the airport near this site and will avoid these .
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May 15th, 2010 at 5:59 pm 212
@VHB: VHB, if you look at page 11 of the report from city staff to Council concerning options for affordable housing at the Olympic Village (found here: http://vancouver.ca/ctyclerk/cclerk/20100422/docu… you will see that staff estimate the market rent of a 2 bedroom, 906 sq. ft. unit at $1,902/month.
In case you think the affordable housing units aren't nearly comparable to the Millennium Water product, staff also think they can sell 2 bedroom, 906 sq. ft. units, once stratified, for between $543,000 and $724,000 to retail purchasers. You can see this on the same page.
The same report notes that an institutional investor looking for a mere 4.5-5% cap rate would pay 40% less than retail purchasers. Crazy stuff.
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May 15th, 2010 at 6:07 pm 213
Global news just reported on the condo sale. No mention of units sold or how many are under contract. Big lineup was largly consisting of games workers wanting the free london drugs gift card.
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May 15th, 2010 at 6:07 pm 214
@The Insider: Thanks for that. Great stuff.
To be clear, the case I set out was trying to err on the side of caution. The point I was trying to make is that even if you make overwhelmingly optimistic assumptions about expected yield or expected rent, the only way you would ever buy these things is because you think a greater fool will take it off your hands in the future. If you make more realistic assumptions(e.g. 1902/month rather than 3000/month rent), the numbers become nuttier still.
**IF** the market floor will be set be yield-seeking investors, then prices for these things would have to drop by 50 to 70%.
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May 15th, 2010 at 6:13 pm 215
Field Report of Millennium Water
May 15, 10
I woke up this morning with a massive hangover. Wow, what an 18K party that was! But with the weather so nice today, I decided to checkout my first open house in a long time to get a feel for what's happening in the trenches. And not just any open house, and entire open village. Little did I know how much of a treat it would end up being.
On the way to Millenium Water, I passed by an abnormal quantity of For Sale signs. I kept asking myself how Rennie is going to pull off a 474 condo sale when inventory is exploding and sales are faltering. But soon after I walked into the gates of the Olympic Village, I knew I had stepped into a dream world of magic.
If Vancouver ever had a ground zero for Irrational Exuberance, Millennium Water is it. And if Bob Rennie is ever the King of anything, it’s hype. The man has carefully orchestrated a circus of clowns, bands, tents, treasure hunts and euphoria. When bands are cheering on lined up speculators and the King himself is handing everyone cookies, what is being witnessed is the last “hurrah” of a heavily inflated market.
I lined up to view a condo and couldn’t help but overhearing what the herd was chanting. One of my favourites was, “I don’t know if I like this area, but I love the wave pattern on the wall.”
I followed the crowd into a staged 1 bed, 2-den condo at slightly over 1,000 sq. feet. I overheard some lady asking an agent the price and he replied with a straight face:
“One-point-three-million.”
The lady’s jaw dropped, she shook her head, and moved on. I couldn’t contain myself and had to keep the conversation going.
- Me: “The miracles of record low interest rates. So that’s roughly $1,200 per sq. ft?”
- Agent: “Yes, but I’m also selling units down the street for $500 per sq. ft”
- Me: “So why, in your opinion, does this place come at a $700,000 premium?”
- Agent: “It’s an opportunity to be a part of this famous community and the proximity to the water.”
- Me: “Not only are you asking for an outrageous premium, you’re doing it at a time when there are over 18,000 units on the market, CHMC rules are tightening and mortgage rates are climbing.”
- Agent: “You should then really consider the units we have listed down the street.”
So I followed the yellow brick road down the street and into another Rennie building called “The Maynard’s Block.” And sure enough, studios were priced at half a million.
Buy now, or be priced out forever.
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May 15th, 2010 at 6:39 pm 216
Am I too poor or those people in Millennium Waters just too rich? 1.4 million for a 2 beds condo? kiss my azzz
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May 15th, 2010 at 6:47 pm 217
@VHB: Oh, I understood what you were getting at. The prices are absurd from the perspective of expected yield, as is the case with nearly all residential real estate in this city at the moment. But people in Vancouver don't worry about yield, at least not yet. A great example of this is in this month's issue of Vancouver Magazine. The cover story is called Ditch the House: Living with Less. As you might expect from Vancouver Magazine, the story is essentially a pump piece for condos, consisting of interviews with six condo-loving condo owners. The telling part? Three of the six owners specifically cite massive appreciation as the reason they love their condos so much. Heaven help them.
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May 15th, 2010 at 6:50 pm 218
http://www.cbc.ca/canada/british-columbia/story/2…
1,2,34… we dont want your condo whore, 5,6,7,8 Rennie's the one we all hate.
what do we want? AFFORDABLE HOUSING. when do we want it? AFTER THE CRASH.
Make love, not condos. Peace out.
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May 15th, 2010 at 7:04 pm 219
Anybody knows what are the strata fees like for the Olympic condos? I would bet astronomical given the "green" nature of the development (double pipes, power co-gen, etc).
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May 15th, 2010 at 7:14 pm 220
@crashcow:
Great work, crashcow.
Just a few follow-up questions.
Were there really 35 actual Olympians in attendance and were they decent ones or the really crappy ones from sports nobody watches?
Which unit was Ashleigh McIvor included in?
Did you get your limited edition pin?
What was the ratio of wealthy gay Asians compared to non wealthy gay Asians?
Did anyone actually buy a unit or was everyone there because they can no longer afford to pay for entertainment of any kind?
What was the Paralympic medal display like? Breathtaking?
Was there anyone in the line-up other than the people with the Blue Jackets?
I thank you in advance.
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May 15th, 2010 at 7:47 pm 221
@Best place on meth: To tell you the truth, I didn't bother with the whole tourist treasure hunt. So I didn't collect a pin, see many olympians or paralympic medals.
The guy inticed with the "wave pattern on the wall" was some gay dude.
I asked an agent if these units will be put on MLS soon and she replied saying "eventually, but we did receive some offers today."
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May 15th, 2010 at 7:48 pm 222
crashcow:
Thanks for the tour of Rennieland…ROTFLMAO !!!!
The poor bastard actually had to do some work ?
Sounds like Rennie's satff was sticking it up the ying yang of the COV by playing the old bait and switch by referring Maynard's block
The whole thing smacks of desperation.
You'd think Mayor Gregor would be there with Rennie handing out chickens and bicycles.
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May 15th, 2010 at 8:50 pm 223
@VHB:
Here is a larg unit in the OV, 1150 sqft – asking price $2580/month.
http://vancouver.en.craigslist.ca/van/apa/1736628…
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May 15th, 2010 at 9:21 pm 224
@Best place on meth:
Ha ha, that's the place sandwich board guy Leo is trying to sell for $799,000. It is in the Foundry building at 2nd and Crowe, not the Olympic Village.
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May 15th, 2010 at 9:27 pm 225
@Anonymous:
Oh, on Friday Patriotz found an identical Foundry unit for rent on Craigslist asking $2650 obo. That's now down to $2500.
http://vancouver.en.craigslist.ca/van/apa/1718733…
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May 15th, 2010 at 9:32 pm 226
@Anonymous:
But the title of the ad says it's in the Olympic Village.
I guess Leo is misleading people – where did he learn to do a thing like that?
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May 15th, 2010 at 9:36 pm 227
Mish on Canada and "it's different here: http://globaleconomicanalysis.blogspot.com/2010/0…
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May 15th, 2010 at 9:54 pm 228
Lol, don't miss a piece of history. Sort of like how the olympic condos in Calgary are worth less than the condos in the communities around? The initial high from the olympics will get some people to buy, but nobody will care decades later. The Calgary ones did go bankrupt at one point, but still nobody cares about the 1988 Olympics anymore to keep the price up. In he long run location is always more important than hype.
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May 15th, 2010 at 10:03 pm 229
I just saw, on the CBC news, that the opening day celebrations at the Olympic Village were paid for by the taxpayers of Vancouver. Gregor Robertson seemed to feel quite comfortable not only giving Bob Rennie the opportunity to be the listing agent but also to pay $30,000 towards an "opening day" party so that Bob could make his millions.
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May 15th, 2010 at 10:16 pm 230
@crashcow: Bear reason Millenium Water worth so much more is olympic athlete stay in every one and also korean glass was used. When you use Korean glass you use quality. The other reason bear is that it was government built. When you buy something that was built by the government you know it's quality and worth 3 times as much.
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May 15th, 2010 at 11:11 pm 231
Mansour, great link to Mish's.
As he clearly says, Canada is worse than the U.S. AS MOST DEBT IS PASSED DIRECTLY TO THE CENTRAL BANK/GOVERNMENT THROUGH THE CMHC.
It is unbelievable how few people are familiar with this scam, but this is why mortgage rates for low collateral borrowers in Canada are crazy low and why the principal you can borrow is huge: banks collect the return in good times and unload the junk to the CMHC in bad times.
The system is crazy and in dire need of serious reform. Next time you vote, remember about this.
Abolish the CMHC! Write to your MPs.
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May 15th, 2010 at 11:15 pm 232
Superboomer
And all Rennie's gay buddies will buy all the remaining units at the OV because gay people have dual income and no kids so perfect equation for get rich quick. These morons are all the same always grasping at some new demographic that are going to make all this overpriced garbage get absorbed.
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May 15th, 2010 at 11:21 pm 233
"The system is crazy and in dire need of serious reform. Next time you vote, remember about this"
I think it will be a cold day in hell before any party runs on a platform of abolishing the CMHC. The whole scheme is just a bit too complicated for the average voter – not to mention the instant 60% drop in home values if it went through wouldn't sit too well with homeowners and their paper profits.
Don't worry, in the end it will happen regardless. Mr Market will always have his way.
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May 16th, 2010 at 2:38 am 234
Agent Will's May 15 weekly update is out..
http://agentwill.com/weekly-stats/
40% Sell/List (trending down for 3 straight weeks)
the Total Listings curve has no sign of slowing down. A week or 2 more weeks of stats will tell us if we will party like it's.. 2010 : )
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May 16th, 2010 at 3:04 am 235
And even in the US some people still don't get it:
Building Is Booming in a City of Empty Houses
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May 16th, 2010 at 9:32 am 236
Even Rennie states that it will take 2 years to sell all the OV units.
http://www.canada.com/business/Vancouver+Olympic+…
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May 16th, 2010 at 9:45 am 237
John Longfur was at the circus yesterday and indirectly credited the Village for helping Canada's athletes bring home a record haul of gold medals.
http://www.news1130.com/news/local/article/55485-…
It was from this Village the Canadian team was able to mount their campaign to win the gold medals by any country in Winter Olympic history."
_________________________________________________________________
Seems like it was all looky-loos, not much buying interest. Well Rennie, that's what happens when you provide people with a circus.
>>One man News1130 chatted with said he wasn't sure he was going to buy anything today. "Price is always an issue of course, I don't think we'll be buying a $10 million penthouse."
>>Others said they wouldn't mind living there but just aren't in the financial position to move out of their current home.
_________________________________________________________________
Even Rob Chipman was in attendance:
>>One protester was demanding people not buy any suites. "Let us resist these life destroying political and economic practices".
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May 16th, 2010 at 9:50 am 238
@Best place on meth:
Yeah, and all the fudge packer has to do is sell one a year to make more money than the average bear. What a scummy industry.
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May 16th, 2010 at 9:57 am 239
For paulbfan
29 listings and 4 price drops yesterday. lol
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May 16th, 2010 at 10:27 am 240
Protest shuts down Olympic Village condo sale.
http://ca.news.yahoo.com/s/cbc/100515/canada/cana…
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May 16th, 2010 at 10:40 am 241
@Best place on meth: The best thing about this is that Rennie is so tightly interwoven with this project now that he will WEAR it. When the city is still holding hundreds of these things and market value has plunged, what will Rennie say then? "Keep holding until the market comes back up."
The visibility of this project will be the end of Rennie.
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May 16th, 2010 at 11:13 am 242
"The visibility of this project will be the end of Rennie"
VHB, this may be the beginning of many guest appearances by Rennie on the Bill Good Show.- (a hard hitting truthful award-winning unbiased program)
Rennie will be "grilled by random callers" with questions regarding the return on investment to the taxpayers, to which he will have honest to goodness answers, confirming to taxpayers and home owners alike, that this is the best place on earth and they should call their realtor to explore the possibility of become an investor.
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May 16th, 2010 at 11:14 am 243
"The visibility of this project will be the end of Rennie"
VHB, this may be the beginning of many guest appearances by Rennie on the Bill Good Show.- (a hard hitting truthful award-winning unbiased program)
Rennie will be "grilled by random callers" with questions regarding the return on investment to the taxpayers, to which he will have honest to goodness answers, confirming to taxpayers and home owners alike, that this is the best place on earth and they should call their realtor to explore the possibility of become an investor.
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May 16th, 2010 at 11:58 am 244
Interesting:
Australia Tightens Foreign Property Ownership Rules
http://www.businessweek.com/news/2010-04-24/austr…
Too bad this issue isn't even debated here.
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May 16th, 2010 at 12:14 pm 245
Reading the Province re: the olympic village…
Looks like mostly lookie loos attending. For Boobie to admit this will take 2 years to sell is waving the white flag. What private developer woould be able to hold on that long ? Even more reason to hold off buying.
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May 16th, 2010 at 12:16 pm 246
#211 NO. Right on. The glass and steel flat fronts of the proposed Richmond development will shake rattle and roll whenever a plane takes off or lands. Thats about every three minutes between 6am and midnight. Nice location? Not. Currently the rumble of the take off shakes homes in the adjacent neighborhoods. I really don't know how poeple stand it. I had the fortune of being out there one day and standing in guys front yard when a plane took off. It was like I'd gone deaf and could only see the guys lips moving. Will they change the flight path to cap the suckers when the marketing kicks off?
http://www.vancouversun.com/business/Vancouver+Ol…
Booby Lisper captulates and says that the OV does not servive the local market, its just too expensive he admits. Well, thats says it all doesn't it. As I've often said 100% is everything. When any product is priced beyond the average persons ability to pay that market has to correct. The phoney free money is causing our governments to get a public finger wag from the IMF, the days of phoney juice are over. meanwhile Booby Lisper snakes 30 large from greggy the idiot king for a party at OV opening? Isn't the reason a real tard gets the big commish is so he can cover the cost of advertising? What is the deal here? Is it all net net to the Lisper?
Hey Bobster, an MLS listing shouldn't run for more than 90 days before a change of realshit signs. Whats this crap about taking two years to sell the OV? Moron. Did anyone come up with a medical or psychological reason why a once straight guy with a wife and two kids can start lisping when he goes over to dark side?
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May 16th, 2010 at 12:25 pm 247
#154 C. Recognizing the 'circle jerk' relationship between the media nad the advertiser is the first step to shaking off an addiction to the nonsense that we get bombarded with everyday, great post
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May 16th, 2010 at 12:41 pm 248
@lowermainlander:
The Oz government is diverting attention from the real culprit – itself. Like in Canada, the government promotes higher RE prices through its own policies. Oz has a time-honoured tradition of scapegoating foreigners for its home-grown problems.
The way to get lower prices in Oz is the same as here – eliminate all government programs that promote home ownership, impose a speculation tax, and limit bank lending on RE to 150x rental value. Prices would drop by 50% overnight.
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May 16th, 2010 at 12:50 pm 249
Why is there a popup on Agent Will's site stating that listings are at very very low levels? Seems a little misleading to me with 18,000+ properties on the market.
At what level would this be removed: 25000, 50000 … ?
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May 16th, 2010 at 1:05 pm 250
2010 REO COLLAPSE ANNECDOTE
My father in law is a CGA. In the last week he has had several of his old clients come in asking for help. They bought plots of land in Surrey to build spec homes and make easy money.
Now they cannot afford their mortgages. Refinance rates are too high for them. One guy asked my father in law to be a guarantor on the morgage. He said, no, of course.
Another guy asked him to produce documents to falsify his income. Father in law said no.
People are desperate. Prices are falling and on on top of that, they can't afford their mortgages. I love it.
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May 16th, 2010 at 1:12 pm 251
Take the 18166 closing inventory from Friday. Add the 29 units paulb mentions were listed on Saturday. that takes us to 18195. There are 10 business days left in the month. That means we need 180.5 NET new listings a day on average over the next two weeks in order to make 20K. Tough, but not impossible.
Also note that there is often a mini-spike in expiries on the 15th of the month, so the hill might be even harder to climb.
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May 16th, 2010 at 1:26 pm 252
@Superfly:
Agent will likes to update his front page once every 2 years, that's why.
I believe he still has 2 headlines proclaiming "Bank of Canada cuts rates" and "Bank of Canada cuts rates again".
They're from 2008.
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May 16th, 2010 at 1:43 pm 253
@NO-LYMPICS:
It doesn't have to take 2 years to sell, and Rennie knows it.
Hundreds of downtown condos are sold every month. The OV could sell out in a month simply by undercutting the competition, and for far greater proceeds than selling into a 2 year bear market. Every realtor in town knows this.
And I think that's why Rennie is saying this. The other realtors, and speculators, in the city are VERY afraid of the city unloading the OV quickly on the basis of price competition, and leaving their own clients to sell into a bust. Now if Rennie is going to do the job that the city is paying him for that's exactly what he'll do, but he can't say it. He doesn't want to be blamed for the rush to the exits.
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May 16th, 2010 at 1:52 pm 254
I agree that Millennium Water may well prove to be Rennie's downfall: too much product built at far too high a cost coming on the market at the wrong time.
I have a question for VHB. You called the Vancouver housing bubble about five years ago. You underestimated how long it might last, but you were probably the first person to attempt to identify it to the public. If you are finally vindicated this year in your analysis, will you unveil yourself to the public? I, for one, would like to know who you are.
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May 16th, 2010 at 2:42 pm 255
@VHB:
What about the 474 new units from the Olympic Village? Those should push us a little closer, even if not all of them languish or steal sales from elsewhere.
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May 16th, 2010 at 2:59 pm 256
The fact that these condo's didn't sell out, with people lining up around the block is telling enough of the current market conditions.
The death of pre-sales in Vancouver. What a pity. Can't wait till interest rates start to rise.
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May 16th, 2010 at 2:59 pm 257
# 253 @patriotz:
Oh, no disagreement…the OV could have a fire sale.
However, because its tied to Gov't,it gets political.
It was the OV that took down the last City administration, and with the Civic elections in 2011, unsold condos could take down the current COV administration.
The problem Boobie has is that he has spread himself too thin, and believed his own press. He will have too many divided loyalties, between the private developers and the COV.
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May 16th, 2010 at 3:00 pm 258
@Drachen: Here is what Agent Will has to say on that. In response to a question about the OV condos going on MLS he says:"Only what the developer/marketer elects to put on the MLS and then they would be doing so only as a marketing ploy (have a couple of units floating out there). Developers don’t usually put on more than a few, if any, listings on the MLS."
So, from this, I think we can guess that neither the sales nor the listings will go through the MLS. According to Will, completed units don't typically go through MLS, except for a couple of 'teaser' units to keep some visibility.
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May 16th, 2010 at 3:02 pm 259
Inquiring mind would like to know how you will get your bargain SFH in Vancouver West if average price really drops 20% going forward. Everyone agrees that housing prices are set by the buyers and sellers. Prices drop because there are must-sellers who are willing to sell at a lower market price and buyers attempting to low-ball an offer. But, if a significant amount of SFHs in Vancouver is held by financially capable folks with zero or insignificant mortgages attached, they can sit and wait out the crash. That means a significant shrinkage of the inventory when a downtrend takes hold.
http://www.mingpaovan.com/htm/news/20100516/vap1h…
Here is a piece of news by Chinese media reporting on the Millennium Water Open House event yesterday.
"There were a significant presence of Chinese investors yesterday…"
"Bob Rennie said, "Judging by the last 3 month activities in Van West, more than 50% of SFHs priced above 1.5M were purchased by Mainland China Chinese. There are no denying of their financial strength…"
That comes back to my original inquiry. If houses in Van West is increasingly falling in the hands of affluent Chinese from Mainland China, that will gurantee a shrinkage of supply in a downturn in Van West. Those folks definitely have the capability to wait out the downturn. Supplies will be minimal on Van West. How can we, as real estate bears, get to pick our favourite SFH in Van West then if supply will be so limited?
Again, I am talking about Van West specifically.
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May 16th, 2010 at 3:09 pm 260
@Whitebear:
I believe the theory goes that "investors" may pull out at the first sign of trouble.
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May 16th, 2010 at 3:14 pm 261
@Whitebear: "How can we, as real estate bears, get to pick our favourite SFH in Van West then if supply will be so limited? "
Limited? In 2008 there were over 1000 SFH for sale in Van West. As of Friday, there were 737 for sale, following the exact same trajectory as 2008. There may indeed be plane-loads of chinese guys buying up the westside. But even they can't buy them fast enough to stop the rise of inventory.
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May 16th, 2010 at 3:25 pm 262
Whitebear,
VHB beat me to it.
I'm sure there were more offshore Asians involved in Vancouver RE in 2008 than now. If the're indeed rich, they didn't become rich by being stupid. There have been several references to articles in China warning that Vancouver is about ready to pop….and with the bust in China itself, they will be more like to dump their Vancouver holdings to cover their margin calls on the home front.
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May 16th, 2010 at 3:35 pm 263
Why did Rennie say it would take 2 years to sell out the OV?
A) There were very few sales at the grand opening.
B) The pool of wealthy Asian buyers he's been hyping is running dry, or was a myth to begin with.
C) The units are ridiculously overpriced, even by inflated Vancouver standards.
D) He's seen inventory ballooning at an alarming clip coupled with rising interest rates and it has him scared shitless.
E) All of the above.
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May 16th, 2010 at 3:53 pm 264
At ths point, I think it's just conjecture to say "….and with the bust in China itself, they will be more like to dump their Vancouver holdings to cover their margin calls on the home front". What if they aren't as margined as you think. Let's travel back to the 2008 Autumn. The inventory has exploded in earlier months, reaching 20k in Oct 2008. You can easily get bargains 20% off peak-price. Would you wait for further drop? Or would you buy then? Of course, in hindsight, you should have bought and you would have captured 25% profit by now. IMO, it's like a blackbox and there are couple of unknowns that clouded your decision back then.
1. You don't know how financially leveraged those Chinese investors really are. They may be, or they maybe not.
2. If they are financially leveraged, what is the percentage among the chinese investors that purchased over the last few years?
There is no denying that inventory reached 1000 during 2008. It plummeted in subsequent months in 2009 because of strong inflow of money from Chinese investors. How financially strong are those new investors? Are they leveraged? That will signal how much more inventory will there be when the downturn takes hold in the next couple of months. These are all unknowns that will determine how severe the drop going forward will be in Van West. Is 20% drop enough like we had in 2008? Or we'll be dropping more this time? Or, we just flatline because chinese investors do not have leverage at all.
I believe there is foreign exchange control in Mainland China and chinese doesn't trust its own banks. They will use every opportunity to transfer money elsewhere given the opportunity, at least to diversify what they have. If they really have a margin call, I believe the house in Vancouver would really be low on their priority list to liquidate.
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May 16th, 2010 at 3:58 pm 265
Rennie has been on the record as saying that the luxury market is pretty much saturated and that he was looking to develop more affordable options. The selling over a period of two years just seems like a plan not to saturate the market.
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May 16th, 2010 at 4:04 pm 266
@hombre: Hombre, lots of stupid people are able to get rich, I have personally known a few in my time. The difficulty for these people seems to be staying rich, often much more difficult than becoming rich in the first place.
The Vancouver RE market has provided a perfect conduit for the stupid rich to return to their roots…
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May 16th, 2010 at 4:19 pm 267
So, let me get this straight…the Chinese super rich dudes bid the price up so high that only othe super rich dudes can afford to buy.
OK sign me up, I'm buying, anybody have Rob's # handy?
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May 16th, 2010 at 5:12 pm 268
whitebear: "It plummeted in subsequent months in 2009 because of strong inflow of money from Chinese investors"
I submit that a .25 BOC rate had a bit more to do with it than that mythical beast. If only there were a words to describe such a thing as the "Chinese Investor" or "Hot Money"….. oh yeah. RED HERRING!
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May 16th, 2010 at 5:44 pm 269
interesting read:
Net-Worth Obsession
http://tinyurl.com/imrich-imrich
this would appeal to both the bear camp and
the totally irrational bull camp……..
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May 16th, 2010 at 6:58 pm 270
Wisdom?????
Have these elites gone this far off the rails in their thinking?
The tax paying Canadian little-guy ultimately pays for this wreckless crap halfway around the world, and he has the audacity to call it "wisdom"? Meanwhile he's been shamelessly punishing savers who are the bedrock of Canadian society with below inflationary returns, ultimately to bail out the elite. Where are the opposing voices? For all I know, the NDP and the Liberals agree with this stupidity.
Greece bailout shows wisdom after slump: Flaherty
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May 16th, 2010 at 7:11 pm 271
@hombre:
Certainly more offshore money. Landcor recorded more foreign sales in both numbers and dollar terms than purchases. So that means that, at least recently, foreign buyers/owners have been having a net negative impact on our market, not a positive one.
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May 16th, 2010 at 7:36 pm 272
II have made parallels in the past on this blog between the U.S. and Canada bubbles. However, I don't seem to be able to fully understand why some of you care so much and seem to be preoccupied with the up-to-the-minute minutia of daily residential real estate listings on the Multiple Listing Service in Vancouver? When standing inventory reaches a point where it falls outside of long-run equilibrium (whatever that may be the case for Vancouver, but typically in excess of 9 to 12 months), and continues in that direction something's got to give. Increasing standing inventory means that demand exceeds supply which according to standard economics theory means that the price has the decrease (in the absence of an increase in demand (and not quantity demanded) in order to reach market equilibrium.
In the case of the housing market, that something is prices. It would only then that you will see sizeable price reductions in housing occurring. Potential future interest rate increases will only tend to exacerbate the trend, but could also greatly affect its rate of change depending on a number of internal and external factors.
The way I see this unfolding in Canada is a 12-36 month price adjustment window, followed by multiple years afterwards of flat (or negative when adjusted for inflation) housing prices. Housing from the stand point of the individual Joe Blow has always been an expense in the past and not a retirement investment prospectus.
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May 16th, 2010 at 7:49 pm 273
Dear god, it's carnage on the Asian markets this morning!
Wealthy Asians dumping stocks left, right and centre!!
Mythical wealthy Asians dumping Vancouver real estate left, right and centre!!
GODZILLA STOMPING THROUGH THE STREETS OF TOYKO, SHANGHAI AND HONG KONG!
Aiya!!!!
http://finance.yahoo.com/intlindices?e=asia
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May 16th, 2010 at 7:51 pm 274
a bit of political football with the OV of course, the current civic government doesn't want to be stained with any fallout from selling at a loss. they would actually get more political mileage out of renting and holding. i anticipate Bob R has a huge commission structure and if he sells some so be it. marketing these condos as upscale is a bit of a joke, most of the units are one beds with little or no view, and of course the view is overated there to begin with. this is sort of opposite politically from the fast ferries situation, where the most efficient thing to do would have been to keep them in service even if they were expensive to fix/maintain. of course the liberal government got a long term political payout by saying they had to be dumped at any cost. and they did so.
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May 16th, 2010 at 7:57 pm 275
@San Franciscan in Vancouver: "I don’t seem to be able to fully understand why some of you care so much and seem to be preoccupied with the up-to-the-minute minutia of daily residential real estate listings on the Multiple Listing Service in Vancouver? "
Speaking for myself:
a) I'm a data nerd
b) housing markets move SO SLOWLY compared to other financial markets. It's like watching paint dry. The 'dailies' are the only data stream we get. Need more data. Need more data. Gotta feed the addiction.
c) our numbers obsession enrages the local bulls. After taking their taunts for so many years, I'm happy getting a little pleasure that way. If that makes me a small person, so be it. I'm good with that.
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May 16th, 2010 at 8:44 pm 276
@San Franciscan in Vancouver: I agree, it is pretty meaningless in the big picture, but for some reason it's just SO FUN!
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May 16th, 2010 at 8:48 pm 277
@Best place on meth: Nikkei down 2% closing in on 10,000.
It'll be interesting to watch Europe's start in a couple of hours.
I figure it'll level out to another week of market manipulation up or flat, but maybe, just maybe we'll see the world finally get really spooked. And if that happens, Van RE will tank faster than we all think it would.
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May 16th, 2010 at 8:54 pm 278
@VHB: Hey VHB, I appreciate the 'data nerd' work you are doing on the charts in the forums. It's nice to see the movement on a smaller scale than monthly.
Are you using a public spreadsheet to keep the data in such as gmail spreadsheets? It would be nice to see your data.
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May 16th, 2010 at 8:54 pm 279
@San Franciscan in Vancouver: I'd have to agree with spitfire and VHB.
Also, I'm not going to be interested in buying for some time (we've got a way to go before I'd begin to care.) To me, the vector of the market is what's interesting, b/c it's affecting so much more in my circles in Vancouver right now than the simple question of where and how to house oneself.
It's a bit like sitting on the beach, watching the tides. Any given tide won't give you a good picture of whether the sea level is changing, but watching it can be satisfying in and of itself for other reasons, and it's informative over time.
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May 16th, 2010 at 9:04 pm 280
@Whitebear: Rich Asians was one of the reasons for the run up in RE in Bakersfield California too along with everyone wants to live here, and they're running out of land. Speaking of which, they were saying that Vegas was running out of land too:
http://www.city-data.com/forum/las-vegas/24911-la…
Don't believe the hype.
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May 16th, 2010 at 9:05 pm 281
Video footage of the OV…all I heard was carnival music looping the entire clip…
http://www.ctvbc.ctv.ca/servlet/an/local/CTVNews/…
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May 16th, 2010 at 9:15 pm 282
That's a pretty fast and furious fall in the Asian markets. Those near-vertical lines down are never a good sign. Watch out below tomorrow!
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May 16th, 2010 at 9:17 pm 283
Vancouver reminds me so much of San Diego 3-5 years ago. They even had a similar stupid slogan "America's Finest City", which they have since dropped (after the real estate plummeted). At least they had the modesty to limit their slogan to their own country…we take on the world with our "Best Place on Earth" thing.
Home prices were ramped up huge. I recall a friend (who's parents lived in a very very dodgy area of Chula Vista) selling their house in 2006 for $700k! They would be lucky to get $300k now.
And, ya, everyone wanted to live there…75 degrees year round, beautiful coastal city, wealthy Latin and european (and yes even Asian) money coming in, never rains, real estate only goes up, everyone getting in the real estate game – get in now or be priced out forever, running out of land…blah blah blah…
Downtown San Diego – residential towers went up like weeds – built by the same Vancouver development families as the ones who build here.
It was utter real estate mania there.
Anyhoo, we all know what happened there. Guess they didn't run out of land afterall.
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May 16th, 2010 at 9:32 pm 284
@girlbear: I agree with everything you said in your post, but have to correct you on one detail: the slogan "best place on earth" refers to the province (BC), not the city of Vancouver. I've seen this myth repeated here on several occasions. In fact, I don't think the city has a slogan.
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May 16th, 2010 at 9:39 pm 285
@oneangryslav2: You are correct – thanks for the heads up. It is BC's slogan. Still embarassing and arrogant though…
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May 16th, 2010 at 9:47 pm 286
@girlbear: I forgot to add that San Diego also resembles Vancouver in that neither has any serious financial center to speak of.
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May 16th, 2010 at 10:02 pm 287
I personally enjoy all the inventory fun and games.
Thanks to all who contribute.
And it will be breathtaking if that chart simply keeps going up.
We're getting close to unchartered territory now.
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May 16th, 2010 at 10:14 pm 288
Shanghai down 3% now.
Dow futures down >100.
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May 16th, 2010 at 10:18 pm 289
@San Franciscan in Vancouver: “I don’t seem to be able to fully understand why some of you care so much and seem to be preoccupied with the up-to-the-minute minutia of daily residential real estate listings on the Multiple Listing Service in Vancouver? ”
To VHB's reply, I'd like to add that our apparent obsession may not seem mature or rational to some, but it doesn't have to be. By analogy, consider that the various New Year's eve countdowns to midnight, which take place around the world, aren't rational, but we take part in them and enjoy them. New Years' is fun because we look forward to a new start. We humans need new starts on a regular basis.
On this and other blogs, many of us have — as a group — been watching and discussing the numbers for three or four or more years (!!), with a clear view of reality and the firm knowledge that a bubble was forming and growing. We know it will pop, we haven't known when, and we're still waiting.
The inventory numbers are our version of a New Year's eve countdown. At the moment we are hopeful that we're very, very close to midnight, which is when the bubble will pop. When it does, it will be louder and more spectacular than a New Years' eve fireworks display, and will be the biggest "fireworks" Vancouver has known in many, many decades. Indeed, given the immensity of the Vancouver bubble compared to others around the world, it could be the biggest housing "fireworks" the world has seen in recent history.
We're looking forward to the fireworks, and the ensuing party. Not everyone will think these fireworks are pretty. Many of us have tried to tell our friends and family, usually to no avail. Although this makes us sad, the destructive housing bubble madness must (!) end. The consolation is that the ones who will be hurt the most are those who were the most greedy … we lack sympathy for these people.
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May 16th, 2010 at 10:35 pm 290
Anyone notice the 'VCI mystery index' on the left sidebar? I'm tingling with excitement for the Pope to uncover the mystery!!
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May 16th, 2010 at 10:38 pm 291
The VCI Mystery Index is awesome…Thanks Pope!
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May 16th, 2010 at 10:39 pm 292
@spitfires
Here is the data for the inventory charts.
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May 16th, 2010 at 10:53 pm 293
@VHB: @Anonymous: You've seen the rollover info?
Thanks, but I can't take credit – the same mystery c0der that gave us the excellent comment rating system has bestowed this gift upon us. It's in very early beta testing and may be a while before its ready for primetime, so don't be surprised if it disappears in the short term.
If you'd like to get a beta testing link so you can check it out before it goes full time live you can PM me in the forum, I may be sending out links for testing purposes in the next week.
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May 16th, 2010 at 11:06 pm 294
@girlbear: For a couple of years, Richmond's slogan was "Better in Every Way". Now they've toned it down to "It's all Here," or something along those line.
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May 16th, 2010 at 11:11 pm 295
Hey Dan in Cowtown. I was hoping you could squeeze the word "fireworks" in a few more times. That way, boomtime might be able to pick up on it. Where's that asshat at anyway? Is his absence a sign?
Good assessment BTW.
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May 16th, 2010 at 11:22 pm 296
@M-: I think the new slogan is "Below the waterline"
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May 16th, 2010 at 11:24 pm 297
@VHB: Neat! So both 'Space' and the 'Erickson' have one fifth of the building on the market? Wow. How old are those buildings?
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May 16th, 2010 at 11:28 pm 298
Shanghai down 3.8%; Dow futures down 126…
At this rate, they'll be down 10% by morning! (kiddin')
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May 16th, 2010 at 11:30 pm 299
@vreaa: Damn! What a crazy collapse in Shanghai!
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May 16th, 2010 at 11:38 pm 300
More than 4.2% down in Shanghai now. Tomorrow should be interesting when North American markets open.
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May 16th, 2010 at 11:40 pm 301
Commodities imploding! Massive buying opportunity for rich Chinese?
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May 16th, 2010 at 11:43 pm 302
Trees are a commodity! I buy tree, huzzbah buy tree!
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May 16th, 2010 at 11:48 pm 303
Speaking of trees.. Suprise! The Province chops down the trees at Robson Square, nobody at city hall saw it coming:
http://www.vancouversun.com/City+caught+unaware+t…
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May 17th, 2010 at 12:29 am 304
@vibe: Thanks for the charts Vibe!
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May 17th, 2010 at 1:19 am 305
Further local Chinese MSM news.
key points: Many Chinese immigrants are not the typical "rich" kind, they need mortgages too. Chinese MSM's are becoming less bullish (I wouldn't call them bearish yet), starting to tell people to watch-n-wait.
1. "How to buy/sell RE in this chaotic time?"
http://van.worldjournal.com/view/full_van/7415246…
(use http://translate.google.com/#zh-CN|en| for rough translation)
and I quote:
"I've seen people bringing a Vancouver West house they bought in March on sale in April, with a mark-up of 200k. I've also seen many people in Burnaby marking up their properties by 200k since their purchases in 2009. 'Reasonable prices' are very hard to come by these days "
"Many buyers are becoming cautious. Many people cancelled their offer or were unable to obatin mortages. Recently I have seen many realtors receiving offers but unable to reach a sale"
"Most obviously, newer immigrants who landed within 5 years cannot offer a high enough down payment; older immigrants who landed more than 5 years ago do not have high enough incomes to qualify for mortgages"
"In this current climate, people who have cash at hand should not hurry to buy. They should wait for good deals and aggresively negotiate for lower prices."
(written by a bearish Chinese realtor "Ya Ya Su": http://tw.myblog.yahoo.com/suya790 )
2. "Will RE price in Greater Vancouver go down?" – by same author
http://tw.myblog.yahoo.com/suya790/article?mid=15…
"Mortgage rate is climbing. There are lots of inventory on the market, maybe even exceeding demand. Will house price decline?"
"… one interesting case among the price cuts is a new condo near Canada Place. A unit on 25F initially asked for $959k suddenly slashed its price by $100k to $859k, after only 40 days on the market. If the owner anticipates RE to go up, would he have cut the price tag?"
"Smart buyers should wait for good opportunities to present. You should wait for situations where desperate sellers offer significant price cuts."
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May 17th, 2010 at 2:02 am 306
Hi everyone! Great site, I've been following for a few weeks now an decided to get in on the action.
I was living in Calgary at the height of their crazy boom (2006/2007) and decided that renting and hoarding gold was a better option than tying myself down to an oversized mortgage.
We made a choice to move to either Vancouver or Sydney, and are in Sydney for the time being. Prices are just as bad here, same excuses for why the prices are so high – no land, rich Asians, etc – but really it's cheap money and government stoking the fire with housing grants.
A big difference though is you can actually sit on cash here. Bankwest is currently paying 6.15%, ING 6.25% for savings accounts. Nobody is actually saving money so banks are crawling over themselves to attract domestic deposits.
A little carnage in the markets here today, 3.1% drop was the worst performance of the past six months.
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May 17th, 2010 at 3:20 am 307
@oneangryslav2:
Of course the city has a motto (not sure what the difference is really) which you can see on the coat of arms: "By sea, land, and air we prosper".
But perhaps it should be updated: "By RE, debt and drugs we appear to prosper".
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May 17th, 2010 at 5:31 am 308
"A big difference though is you can actually sit on cash here. Bankwest is currently paying 6.15%, ING 6.25% for savings accounts."
How can I get me some of that!!
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