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
Boo
9 years ago

@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
Vancouver Blues
10 years ago

Nikon D3000

Vancouver Blues
Vancouver Blues
10 years ago

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
House buyer
10 years ago

@buffates:

Why a pathetic liar

Canayjun
Canayjun
10 years ago

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
Mr. Beasley
10 years ago

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
10 years ago

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
10 years ago

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
10 years ago

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

Inventory
Inventory
10 years ago

************* 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… Read more »

patriotz
10 years ago

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.

patriotz
10 years ago

@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
No More Gordocracies
10 years ago

#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 »

Spec
10 years ago

"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
Drachen
10 years ago

@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
No Longer Looking
10 years ago

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.

paulb fan
paulb fan
10 years ago

@paulb: Those sales numbers surprise me like nuts. Had thought that past April 19 it should drop like a stone. I wonder what it would have been in absence of those new rules. The market is still balanced till we see those drop in sales.

No More Gordocracies
No More Gordocracies
10 years ago

Please re-post the photos of the signs with the bubble stickers on them but simply photo shop the photo to remove the agents name and phone number. That should do it. And I would ignore threats because they don't have a legal leg to stand on. You are simply posting a photo you saw. You aren't condoning anything. We see photos of graffiti on the news every day. Why isn't the mainstream media sued for showing illegal activities?

jesse
10 years ago

@Animal Spirit: Re: mortgage fraud. Wow. One occasionally has to wonder if that's symptomatic of a larger problem. Maybe Gordon C. can comment on this; it sounds like some lenders were cutting corners on appraisals Countrywide-style.

jesse
10 years ago

@Vanguy: What is the bond market telling us?

That the TSX and the CAD exchange rate took a beating today.

jesse
10 years ago

@Neptune: "Expect price drops by August"

I wouldn't be surprised if the benchmark peaked in April. If you think sales are going to falter, year-over-year price drops in August is about right.

House buyer
House buyer
10 years ago

jEEEE………….. SHAMELESS AND DELUSIVE BEARS ARE IN RAGE AGAIN BECAUSE THE USUAL UP TREND OF VAN RE. THEY ARE JEALOUS AND IN FRUSTRATION DUE TO NEVER-ARRIVED PRICE COLLAPSE. WHAT HAVE GONE WRONG WITH YOUR HEADS GUY;THE SAME OLD BORING ARGUMENT HAD BEEN SAID SINCE VICTORIAN ERA . POTENTIAL BUYER BEWARE OF BEAR'S BLIND FAITH AND DON'T FOLLOW THEIR TRAGIC MISTAKE.BUY NOW AT THIS

AT FAIR PRICE BEFORE ALL THOSE CHINESE RICH AND FAMOUS GULP UP PRECIOUS VAN RE CHOP SIU.

Vanguy
Vanguy
10 years ago

Remember last week and the news was 'mortage rates on the climb' and RBC hiking, yada, yada.

Since then, the 10yr bond is down 10 basis points to 3.92%.

What is the bond market telling us?

VHB
VHB
10 years ago

@paulb: No 17K tonight? No problem. We'll cross that threshold with a coffee in the morning. Maybe I'll add something extra to my coffee to celebrate. Mini-party!

paulb
10 years ago

New Listings 456

Price Changes 238

Sold Listings 187

16,981

Nope, no 17k tonight folks but close… The sales numbers, although below the ridiculous number of price drops, are still really strong. However, the pace of new listings is tottaly nuts!