Waiting for the right price

Paulb and paintedturtle pointed out this article in the Globe and Mail – Housing Affordability: the great quandry.  Why there’s time to wait for the right home at the right price.

The one city to worry about if you’re a homeowner is Vancouver, where normal mortgage rates would have resulted in the typical household spending 78 per cent of its income to carry a bungalow, just shy of the peak level.

History shows that it’s impossible to accurately predict short-term movements of house prices – markets regularly overshoot rational levels both on the way up and the way down. What we can say is that based on current affordability, if house prices do continue to escalate, at some point they’re almost certain to correct back down.

That means there’s no rush to buy and time to wait for the right home at the right price – and that for the next while at least home buyers should evaluate houses as places to live rather than on their potential for appreciation.

Ok. I see what’s going on here.  The Globe and Mail has worked themselves into a jealous rage because our properties are worth so much and are trying to talk down our market.  It won’t work guys.  We know better than that, we evaluate property purchases based on how much a month they cost with record low interest rates and pencil in 12% increase in prices each year.  Everybody knows prices never drop in Vancouver.

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Boo
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Boo

@vreaa: Don't even bother to click on this. It is an completely unresearched piece of cr*p by someone (vreaa) who like the sound of his own voice, but is too lazy to do any work to actually have anything to say.

Vancouver Blues
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Vancouver Blues

Nikon D3000

Vancouver Blues
Guest
Vancouver Blues

Blame on our Liberal goverments whoes does not care for it own citizen, let the chinese oversea ruinning the real estate of Vancouver, they will continuied to jerj up the price , making tonn of profit … at the end they will profit the cash and run . The local citizen are the people will be servely hurt . What about your

childen in the next 10 years even they are professional making good wages still can not affort to buy a Condo in Vancouver then, sad case .

House buyer
Guest
House buyer

@buffates:

Why a pathetic liar

Canayjun
Guest
Canayjun

The greatest amount of sales activity typically occurs just before the market starts to drop. So I would actually expect there to be one last selling/buying frenzy before sales plummet. What is happening in the RE market now is very closely similar to what happened in the late 80's. I'm seeing quite a few price reductions happening in Langley, and a lot of relists too, as well as a ballooning number of listings. So, one last spurt of activity, then a massive increase in listings, followed by price reductions, slumping sales figures, then a steady decline in prices over the next few years. It may only be happening in Langley right now, but you can be sure this will spread to Vancouver in the next few months.

Mr. Beasley
Guest
Mr. Beasley

Regarding April 19th and price dropping rapidly,don't count on it, mortgage brokers and bankers have been working around the clock to pre-approve people and pushing them to sign before the HST.

It will take several months for the new rules to take much affect, on FTB, flippers will have a harder time.

vreaa
Member

Fuel From Flippers:

2009 Aug $511K + Renos = 2010 May $799K Ask

http://wp.me/pcq1o-PC

Perhaps the most important piece of information from this example is that one of the buyers pushing up prices in Aug 2009 was a flipper looking to make a quick couple of hundred thousand dollars. -vreaa

vreaa
Member

From the Mortgage Fraud story:

"This alleged fraud illustrates how weak and ineffective the controls are in our banking system."

Huh? haven't we been told we have the soundest system in the world?

crabman
Guest

If you want to block out ads while blocking the roller coaster, check out Adblock Plus.

patriotz
Member

@painted turtle:

So it is unacceptable to put a tiny sticker on a FOR SALE sign, but it is perfectly ethical to sell an overpriced home to an over extended family…

Well yes it is, just as it’s perfectly ethical for me to sell my collection of KISS records for $1,000,000.

Because nobody has to buy a house any more than anyone has to buy the records.

There is only one cause for RE bubbles and that is buyers who are willing and able to pay too much. A house cannot sell for more than someone is willing to pay for it.

No More Gordocracies
Guest
No More Gordocracies
#60 Gork YES! This is totally right. What gives realtors the right to pollute our neigborhoods with their signs? Did you know that many condo complexes don’t allow realtors to put signs up in front of their property? This proves that it is not legal for realtors to put signs on public property because if it were legal then realtors would sue the condo committees for not letting them put signs up. If the industry wants a war then we should get some lawyers and sue some of the realtors who break the signage laws. There has to be some rules in the sign bylaws that these realtors are breaking http://vancouver.ca/commsvcs/BYLAWS/sign/sign.htm like see Sec 11.3.1 which may over rule Schedule A 1.a.1 If someone legally versed in the sign bylaws can post the particulars of what can and can’t be… Read more »
Neptune
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Neptune

@paulb:

400 listings day, well done all you sellers.

Pent up listings from 2009 are being unloaded for the post Olympic locust swarm of buyers from Asia.

I’m officially calling this bubble market dead as of today. Expect price drops by August.

bubbly
Guest
bubbly

@painted turtle: It’s also perfectly acceptable to give billions of tax payer dollars to failed banks, set up a permanent bailout scheme (CHMC), cheat on mortgage applications and lie to potential buyers about multiple competing offers. But report on some funny stickers and you are in big trouble.

Wanderlei
Guest
Wanderlei

@paulb: I have to admit I’m now addicted to inventory #s so I need to ask – according to my calculations is it correct that we are just past 17k again now? 🙂

paulb
Member

New Listings 433
Price Changes 228
Sold Listings 165

Animal Spirit
Guest
Animal Spirit

Fraud – who’d a thunk?

http://www.cbc.ca/canada/calgary/story/2010/05/04/mortgage-fraud-bank.html

Any over under on when a similar story comes out for BC?

Anonymous
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Anonymous

The rollercoaster idea was great, but putting it on this page permanently isn’t. Having it rolling on my screen ad infinitum, and not being able to turn it off or navigate away from it makes me nauseous.

Neptune
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Neptune

@NO-LYMPICS:

or it can mean your sample data is too small.

Listings and sales #’s are a better indicator of market direction right now.

Boombust
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Boombust

“It’s because Rob is such a good masterbater, he gets caught up in his own BS fantasies.

Even though I CAN’T STAND the guy…I think you’ve gone a little too far.

Madam Maggie Chipman
Guest
Madam Maggie Chipman

“vomitingdog says:
May 4, 2010 at 2:18 am
“Life is too short to be engaged in an unprofitable and soul destroying business, so we only do business with people we like.”

That’s an unusual statement Rob, why did you include this in your all important about us section? What are you trying to say to prospective clients?”

It’s because Rob is such a good masterbater, he gets caught up in his own BS fantasies.

Inventory
Guest
Inventory

************* 1/1/2010 / 5/4/2010 / % change

Bowen Isld 46 / 105 / 128.26%

_Bby East 68 / 160 / 135.29%

_Bby North 345 / 735 / 113.04%

Bby South 362 / 748 / 106.63%

Coquitlam 531 / 1124 / 111.68%

Van.&Gulf 215 / 265 / 23.26%

___Ladner 65 / 156 / 140.00%

MapleRidge 575 / 1021 / 77.57%

_New West 262 / 584 / 122.90%

_North Van. 412 / 976 / 136.89%

OutofTown 105 / 69 / -34.29%

_Pitt Mead 121 / 184 / 52.07%

_Port Coq. 237 / 455 / 91.98%

PortMoody 213 / 440 / 106.57%

_Richmond 893 / 1896 / 112.32%

_Squamish 402 / 499 / 24.13%

Sunshine C. 656 / 1068 / 62.80%

_Tsawssen 98 / 201 / 105.10%

__Van East 767 / 1489 / 94.13%

_Van West 1396 / 3363 / 140.90%

_West Van 386 / 692 / 79.27%

__Whistler 569 / 750 / 31.81%

_____Total 8724 / 16980 / 94.64%

patriotz
Member

BTW those of you who don't like the animated rollercoaster, do a Google on "IE turn off animated GIF", or "Firefox turn off animated GIF", etc. and you will find some simple instructions.

Did it myself a long time ago.

Specuskeptic
Member

"It takes a couple of weeks for them to filter through, all the contractual conditions have to be met for it to close and the numbers don’t go up until it’s closed"

Probably correct. Have to admit, it's got me at the edge of my seat. Interesting if nothing else. Best be prepared for a slow, brawling, roundhousing, knock 'em down, drag 'em out decline if sales keep within reach. There seems to be a split in bear county regarding what the decline will look like…

Keeping the powder dry might be a longer job than originally thought.

Drachen
Member

@No Longer Looking:

My theory on the continued sales is that we're still seeing the bargain hunters who were avoiding the new CMHC rules.

It takes a couple of weeks for them to filter through, all the contractual conditions have to be met for it to close and the numbers don't go up until it's closed.

No Longer Looking
Member
No Longer Looking

My theory about continued high volume of sales: BABYBOOMERS.

My parents are boomers, and what's interesting is their peers are moving both up and down in the market. A couple of downsizing friends of theirs sold their SFH to someone else my parents happened to know who were selling their condo. In this case, boomers moving up and boomers moving down. You don't need FTBs to drive sales.

I get why 60-somethings downsize. Its more of a mystery why they'd buy more house at that age. Its a strange generation.