Friday free-for-all!
It’s the end of another workweek, and that means it’s time for our regular end of the week news roundup and open topic discussion. Here are a few recent links to kick off the chat:
-Shine comes off the housing boom
-BC real estate prices set to dip
-Fraser Valley real estate flattens out
-Fraser Valley stats on housing analysis
-Business Insider: Vancouver is nuts
-In Vancouver ‘affordable’ means $1600 / month
-Negotiating 101: Landlord edition
-Woodwards affordable units open
-Some Americans just stop paying mortgage
-China’s property market freezes up
So what are you seeing out there? Post your news links, thoughts and anecdotes here and have an excellent weekend!
June 4th, 2010 at 2:56 am 1
Come down to Granville Island on Saturday for the 13th annual Plywood Cup!
http://www.granvilleisland.bc.ca/event/plywood-cu…
http://www.progressbc.org/cpc2/plywoodcup.cfm
Between 1-6 pm watch 14 teams try building a boat in 90 mins out of 2 sheets of plywood, some nails and a roll of duct tape that has to cross the water and get back without taking a bath.
Have fun, enjoy the BBQ and help raise funds for a local special education preschool for children with language based learning difficulties and the Multiple Myeloma Cancer Research Foundation.
http://www.facebook.com/pages/The-Vancouver-Plywo…
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June 4th, 2010 at 3:48 am 2
Shine comes off housing boom:
Yet another guy who doesn't get it. Owners in the US only stopped paying mortgages years into the bust, when they realized their properties were underwater. The US bust happened because the market ran out of buyers. Just like the Toronto bust of the early 90's as well, which was plenty "violent", and which Mr. Tal seems to have forgotten. And all other busts.
Try 2030, because the boomers have now become net sellers of RE. This bear market will last until the last of them have sold their houses.
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June 4th, 2010 at 6:47 am 3
@patriotz: "Canadians will keep paying their mortgages by cutting back on other discretionary expenses"
Hah! I remember that same line of logic when the US bubble started to burst. Only problem was that when people got in financial trouble, they were pragmatic. They paid their credit cards first, because the Visa puts food on the table.
The bank was second or third, because you don't get evicted on Day 1…
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June 4th, 2010 at 7:14 am 4
Check out some of the commnets on the Business Insider story. The denial with some folks is unbelievable. They say things like "do some research" and "price increases can last forever" in the same post. Really?? They're like mindless drones just spewing all the rhetorical "reasons" for price increases. Who ever spiked their koolaid really did a fucking number.
I posted on the last thread… I'd really like to know what our current inventory is at. Not just the dailies. Thanks in advance!
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June 4th, 2010 at 7:24 am 5
Vancouver stats out yet?
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June 4th, 2010 at 7:33 am 6
"Canadians will keep paying their mortgages by cutting back on other discretionary expenses."
I am having a hard time believing that Mr. Tal can't connect the dots between the relationship between a decline in 'other discretionary expenses' and an economy based a great deal on consumer spending.
I guess it is just to difficult for him to see the connection between a decline in discretionary expenses leading to a decline in the overall economy which in turn leads to a decline in earning power which in turn leads to a decline in people's ability to make their mortgage payments. Is that really that difficult to understand?
Is it really that difficult to comprehend that that's how we go from a virtuous cycle to vicious one? I guess they don't teach this in the school of economics.
patriotz' No. 1 fan
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June 4th, 2010 at 7:39 am 7
In British Columbia employment dropped 10,000 and Price Edward Island reported a decline of 1,900 in May.
HMMM Best Place on Earth and PEI only places where employment DROPED! (For word challenged bulls that means unemployment went UP!)
PEI…. That would be Paul moving back to Vancouver I think!
http://tinyurl.com/34r2j7q
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June 4th, 2010 at 7:53 am 8
@Strataman: OOps wrong link
http://tinyurl.com/36tujwy
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June 4th, 2010 at 8:11 am 9
Actually I think Tal is completely right about this. People will cut back on anything and everything to hold onto their personal residences.
What Tal doesn't get is that busts are not brought on by owner-occupiers defaulting. Mortgage defaults are always very low at market tops. Anyone who can't make their payments can simply sell. Busts are brought on first by a lack of buyers, and next by investors bailing. Every single owner-occupier can sit tight and it won't make any difference. Only well into the bust, as we see now in the US, do homeowners quit paying or walk.
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June 4th, 2010 at 9:05 am 10
I found this on the net. I think its worth reading:
Last month 9,500 Toronto families sold their homes. While that happened 19,000 others decided to bail. Sales fell. Listings exploded.
So now it’s official. In all of the country’s most frothy, gaseous, bubblicious markets – Vancouver, Calgary, Edmonton and the GTA – we have reluctant buyers, startled sellers and shocked media. Sales collapsed by up to a third in May, while across the country tens of thousands of houses a week streamed onto the market.
Will this be the big one?
Yeah, probably. Because with crimson in the water, the media’s decided it’s a story, and industry sycophants are running hard to catch up. My fav quote of the week comes from Phil Soper, head of Royal LePage: “I’m actually glad to see things cool a bit, because it’s gotten to the point where it’s difficult for many buyers,” he told the Globe.
This is the same relentlessly pumping Soper who, on April 8th said, “The first quarter of 2010 continued where 2009 left off, with more Canadians enthusiastically participating in a rejuvenated residential real estate market… Expect house prices to continue to rise, but the rate of appreciation should ebb steadily, month by month, throughout the remainder of the year, as balance returns to the industry.”
Of course, if you were a property virgin 60 days ago looking for guidance from the head of the largest property company, and decided to buy because he said prices would rise all year – just at a slower rate – congratulations. You just learned about ethics.
Fact is, all kinds of industry rodents will be scampering off the HMCS MLS over the coming weeks. This is what happens when bubbles burst. They get all over your shoes and your pants. It’s wicked messy.
Like the Kelowna agent who said: “It’s just like someone turned off the tap. You’d think all the buyers sent each other e-mails agreeing not to buy anything for a little while.”
Or bank economist Benny Tal, who said: “The correction is starting,” suggesting real estate “stagflation” will last until 2015.
Comments like that help lead people around by the nose. They reinforce perceptions. They get the herd prodded and spooked. They hasten the inevitable. They move us a little closer from the second stage to the third, and should send off a clear signal that the impact of this real estate recession could be devastating to middle class wealth.
That’s been the result Stateside. Waves of foreclosures in which dodgy borrowers were quickly wiped out have been replaced by negative equity and strategic defaults. Now more than a quarter of all homeowners are under water – owing more than they own, and through no fault of their own. The market simply tanked so much the value of their homes sank below the amount of their mortgages. So decent, credit-worthy, employed people – millions of them by last count – have made the decision to stop paying. Despite the inevitability of being kicked out after a year or two, they figure this is the sound financial move.
And in Canada?
Across most of the country, that’s no option. Pay the mortgage or you’ll not only lose the house, you’ll also be responsible for the mortgage, plus costs. Cough it up, or bankruptcy remains as the sole route out. It will be interesting to see, in a country where folks like Phil Soper, CMHC and the banks encouraged tens of thousands of people with no money buy homes, how many choose that road.
Of course, this gathering property storm is but the start. Benny Tal might be technically right about it taking five years to correct, but in saying so he ignores the next nuke: those pesky, house-rich, sha-na-na Boomers. By 2015 millions of these geezers will be entering retirement and realizing you can’t sell off a bedroom every time you need cash to live on. Especially in the burbs. When gas is $5 a litre.
Some months ago I said this time would mark a sea change for most of us. The age of the house and the GIC is done. The definition of security’s about to change, plus the meaning of risk. As American families have found, real estate can destroy wealth. As we’re all to learn, money runs out.
Best learn that now.
The latest numbers show the average Vancouver house just dropped by $45,000.
In Calgary, cocksure cowboy realtors have flaccid combs after sales plunged 20% in May. Listings surged by more than 30% and the local cartel scrambled to blame interest rates, stock markets, mortgage regulations, Greece and the snow.
In Edmonton, they’ve apparently given up. Sales plopped by 26% in the last four weeks, and the chief realtor says the local market ‘peaked a little early this year.’ He called it ‘relaxed.’ Cialis, 911.
And across Canada, the Canadian Real Estate Association is in full damage control mode, telling reporters about ‘rapidly changing market conditions’ and (wait for it…) falling prices.
Here’s how CREA’s economist, Gregory (‘Don’t call me David Lereah’) Klump put it, as he accelerated into reverse: “With interest rates soon expected to rise, Canada is widely believed to be entering a typical demand-driven downturn due to recent prices increases and rising interest rates. A downward trend in national sales activity combined with an increase in listings will result in a more balanced market. In keeping with the return of a balanced housing market and typical demand-driven housing market cycle dynamics, prices will remain stable.”
Love that. Demand-driven downturn. Buyers are exiting in droves, thanks to higher rates and simple unaffordability, leaving greedy vendors and voracious agents in their wake.
In turn, that means prices will fall along with sales, and this is but the start. If you want any more proof, flip back a few screens on this blog to review the latest projections of some major banks which came to the obvious conclusion the jig’s up. When the mortgage guys do that, you know it’s dead meat.
This is the pattern I expected. Listings surge first. Sales dive second. Prices crumble third. And it has happened for the reasons laid out. Higher rates. More taxes. Too much debt. Insane prices. How this is actually coming as a surprise to anyone is a surprise to me.
Seems to me the odds are growing for a long decline in residential values. Sure, the world is volatile, unpredictable and damn scary some days. But of greater consequence is the sad and sorry state of personal finances – which I touched on here yesterday. So long as families are saving nothing, spending 98% of what they make, facing massive retirement deficits and struggling with record levels of mortgage and household debt, then why would they be buying houses when interest rates, taxes and inflation are going up?
Face it, we’re tapped. Orgy’d out. Looking for our boxer shorts and car keys. Tomorrow, laundry and remorse.
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June 4th, 2010 at 9:12 am 11
Anon: 1) give linkage when you post stuff. That was lifted straight from Garth 2) don't post long articles. Just snippet and link. Thnx
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June 4th, 2010 at 9:22 am 12
BC unemployment rate up from 7.3 to 7.5
Vancouver unchanged at 7.5
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June 4th, 2010 at 9:32 am 13
@Best place on meth: The Vancouver unemployment stat is for 3 month moving average. See page 43 (a href="http://www.statcan.gc.ca/pub/71-001-x/71-001-x2010005-eng.pdf">here (PDF). Unemployment in Vancouver CMA rose to 7.6% compared to 7.2% from the month previous.
They also say population growth is 2.5%. That's on the high end of historical data.
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June 4th, 2010 at 9:32 am 14
"A CMP survey in April suggested that 49% of mortgage brokers are considering exiting the brokering industry in the next 12 months. That’s a stunning proportion compared to just 5% who responded similarly last year."
http://vancouvercondo.info/2010/06/friday-free-fo…
When the ship starts to sink, the rats leave the ship first…
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June 4th, 2010 at 9:33 am 15
Just for fun yesterday I was browsing the MLS for townhomes in Surrey. Some of the places for sale have photos with snow and Xmas trees in them. When was the last time it snowed in Surrey? So, a lot of these places have been for sale for at least six months now. It's definitely a buyers market in the valley.
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June 4th, 2010 at 9:36 am 16
Here's an interesting read about denialism:
http://www.newscientist.com/article/mg20627606.10…
It's mainly talking about vaccine/evolution/climate denialism, but most of the arguments hold VERY true for talking to real-estate bulls:
From the article:
"It is this sense of loss of control that really matters. In such situations, many people prefer to reject expert evidence in favour of alternative explanations that promise to hand control back to them, even if those explanations are not supported by evidence.
All denialisms appear to be attempts like this to regain a sense of agency over uncaring nature: blaming autism on vaccines rather than an unknown natural cause, insisting that humans were made by divine plan, rejecting the idea that actions we thought were okay, such as smoking and burning coal, have turned out to be dangerous.
This is not necessarily malicious, or even explicitly anti-science. Indeed, the alternative explanations are usually portrayed as scientific. Nor is it willfully dishonest. It only requires people to think the way most people do: in terms of anecdote, emotion and cognitive short cuts. Denialist explanations may be couched in sciency language, but they rest on anecdotal evidence and the emotional appeal of regaining control."
Does that sound like any bulls you know?
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June 4th, 2010 at 9:43 am 17
http://www.canadianmortgagetrends.com/canadian_mo…
Wrong link.
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June 4th, 2010 at 9:45 am 18
@Anonymous:
That's Garth Turner. His posts are an entertaining read everyday.
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June 4th, 2010 at 9:56 am 19
@paulb.:
Garth is a lunatic. He sells fear.
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June 4th, 2010 at 10:01 am 20
I see theres a lot of hype in the unemployment numbers. lets not forget, these are 'seasonally adjusted ' numbers, not actual boots on the ground. The economists say' well hypothetically we have 'X' number of new farm. forest, fishery and tourism jobs being plugged in. Realistically these numbers will be adjusted down when the actual figures of EI applications come through, even though its damned hard to get these from the government. These hedonic 'ghost jobs' are weather dependant, market related and conditions reliant items that the economists have designed to 'average' the employment picture. Its not realistic to believe anything they state.
a) there are fewerr tourists than ever
b) industry is declining
c) forests are a dead zone for jobs
d) fishing ditto
e) small businesses stats are dismal as personal bankrupcies are spiking
f) nat gas is dead
g) construction is already decling as the RE ,market tanks ( which by the way has been 90% of GDP last Quarter eh?)
h) oil sands are still curtailed
i) big floods on the prairies, farmers forecast a wipe out.
j) Olympics have swirled down the toilet.
k)stimulus spending over as Canada gets the wagging finger from the IMF.
Frankly I think we're looking at a government that thinks we're so stupid, because it controls the media as the biggest adveriser, that we'll listen to anything and bark like trained seals if they throw us a spun story about how we're # 1.
They hope they've spent their way out of the global downturn, and so far they've managed to keep people spending themselves into the 148% debt trap that the advertisers have set up. But is the economy really humming? Says who?
http://www.edmontonjournal.com/business/Alberta+u…
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June 4th, 2010 at 10:02 am 21
Dave is a lunatic. He sells stupidity.
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June 4th, 2010 at 10:05 am 22
@Dave: Professor Bull agree with statement "He sells fear". Garth is all about selling fear to sell books, survival equipment and his latest project, financial advice for retiring boomers. He is over the top. He may be insane. But there are nuggets of wisdom in his posts. To be read with caution.
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June 4th, 2010 at 10:07 am 23
@JordanClark: Come on bulls, if you have money left over from rent, help some kids. Please don't blame them for housing bubble.
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June 4th, 2010 at 10:16 am 24
KWL
"Just for fun I was browsing for townhouses in Surrey"
WTF – have to sgree with superduperbulltime there are bear losers on this site. When I get board I look for properties in Chelsea the Sixth arrondissement or Palermo Soho. Just sayin.
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June 4th, 2010 at 10:17 am 25
@Professor Bull: Plus Garth is very good at making up letters. They always go like this, "Dear Garth, my wife and I make $150,000 a year. We have no savings and we saw a nice house for $1M and would like to buy it. What should we do?"
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June 4th, 2010 at 10:18 am 26
Garth is a failed politician – 2 strikes. If he dressed up in postal clothes I'd be running for cover!!!!
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June 4th, 2010 at 10:24 am 27
"Now more than a quarter of all homeowners are under water – owing more than they own, and through no fault of their own."
This is one of my pet peeves. A quarter of all homeowners in the United States are NOT underwater, a quarter of all mortgage holders in the United States are underwater. I believe the percentage of homes owned free and clear in the U.S. is 48%, so .52 x .25 is 13% of all homeowners are underwater. So at 130 million households, 16 million mortgages are underwater, which is a lot, but is also closer to being factually correct than stating 32 million are underwater.
Keep in mind that in the United States, the traditional dream has always been HOME ownership, meaning the mortgage totally paid off, which has been confused in Vancouver and twisted to a dream of MORTGAGE ownership. Yes, one can lead to the other, but they are two distinctly different states of being. Vancouverites have a dream of trading mortgages up so they can climb the property ladder.
I think the single dumbest piece of business journalism i have ever read in my life was the Vancouver Sun article that stated Vancouverites had the highest net worth because they had the highest mortgages.
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June 4th, 2010 at 10:32 am 28
Sorry I was so fixated on spelling arrondissement correctly. bored not board.
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June 4th, 2010 at 10:36 am 29
Excellent example of 'fun with numbers' and how they gov fudges the facts
http://urbansurvival.com/week.htm
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June 4th, 2010 at 10:54 am 30
@SuperSmartBull:
Dude stop pretending you and Prof bull are a different person. We all know it's you. Posting within a couple minutes of each other an replying to yourself doesn't fool us. Besides, I caught you writing "Prof" at the front of your post, obviously a typo which you meant to type in the name.
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June 4th, 2010 at 10:55 am 31
@XXX: Most bear are loser unlike professor bull belief system. There is no bear type #1 who like economist analyst only type #2 who brood in dark basement with tiny paycheque and nothing else.
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June 4th, 2010 at 10:56 am 32
SUPERSMARTBULL is an oxymoron
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June 4th, 2010 at 11:03 am 33
XXX: let me be more explicit. I was looking up townhomes in Surrey because a relative sold theirs in Surrey in October. So I wanted to see if some of the same units in the area were still for sale and if so had they lowered their prices. The answers: Yes some units are still for sale from October and no they haven't lowered. There you happy?
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June 4th, 2010 at 11:03 am 34
@Dave:
I'm sure that in 2006 you would have thought Peter Shiff was selling fear. In fact, you would have fit in perfectly with the smirking goons in that video who were mocking him over his predictions of a US housing bust.
What are you selling Dave?
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June 4th, 2010 at 11:06 am 35
Supersmartbulls*&t and Prof Bulls&^t
I read Garth regularly. 2 points:
You should read everything on the net with caution…duh!
I read a letter to Garth that sounded like my buddy. It was and it was printed verbatim and it was real circumstances.
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June 4th, 2010 at 11:08 am 36
Jimbob: those posts are from trolls. When you argue with trolls you are doing the devils's work.
Reading troll responses is more irritating than the initial troll post because your response begets yet more troll posts.
Jimbob, please don't feed the trolls.
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June 4th, 2010 at 11:12 am 37
@dothemathgarth: OK listen up, lesson in economics. You are mixing up cause and correlation again. High mortgage does not cause high net worth, but they are correlated. Rising prices mean net worth is increasing. Maybe one day when bear type 2 jump up and down when Armageddon comes then that net worth will disappear. But for now take your medicine and study to be like bear type 1.
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June 4th, 2010 at 11:13 am 38
Reading trolls is like driving by a car wreck, you can't help but slow down and look.
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June 4th, 2010 at 11:13 am 39
@Reasonfirst: I read your post with caution. It does not pass smell test. I know a friend of friend who write to Garth….
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June 4th, 2010 at 11:14 am 40
Here is something mildly bullish: population growth seems relatively high, on the order of 2.5% YOY. Of course unless rents increase pronto it won't mean much for current homeowners.
If you're worried about supply, I see enough condos under construction in the metro area to keep in migration happy for some time, when we include a small fraction of existing units for sale.
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June 4th, 2010 at 11:16 am 41
@Kid Fynnland:
Lol, it's just funny that he is posting under different names and replying to himself.
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June 4th, 2010 at 11:17 am 42
Rennie cuts prices 40percent in Kelowna.
See http://somethinghaschangedatinvue.com.
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June 4th, 2010 at 11:20 am 43
Why do you guys continue to refer to MLS as “real estate porn”?
Myself I feel sick to the stomach when I surf mls.ca
The prices are obscene and most properties are run down pieces of turd.
You want real estate porn? Check out zillow.com
The Miami section would give a dog a bone.
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June 4th, 2010 at 11:22 am 44
KWL
Dude, it's worse than I thought – "you have a relative in Surrey?" Cousin, wife, Both?
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June 4th, 2010 at 11:39 am 45
Real estate go down like two dollar hoe in east hasting.
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June 4th, 2010 at 11:45 am 46
Long time lurker, first time poster, and I'm looking for a little help. I'm hoping to convince my Dad to sell an investment condo he has in Kelowna. I'm looking for the most recent chart of Total REBGV Inventory, as I think that chart best sums up the RE picture (with inventories growing faster than in 2008). This chart but with recent data: http://4.bp.blogspot.com/_sDCKFPKKvO0/S8f6BS_xsfI…
Can anyone point me in the right direction?
Thanks
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June 4th, 2010 at 11:49 am 47
@Kid Fynnland:
Kelowna is infected with the measles outbreak too! Just check out the damage on MLS-by looking at condos for sale and narrowing down the price (otherwise it won't display as there are about 800 condos for sale in this fine city) It's just insane…a newly built-condo (close to the invue) has 32 units for sale, another one by the bridge has 28?? I don't even think the ones for sale by the developer are even on MLS. It's looking much like a bloodbath in Kelowna. Rents have dropped as well, looking at property management site I see that it's possible to live in the Dolphins on the lake in a 2 bed-2 bath for $1250 a month. I know someone who is cash-flow negative AND underwater on her condo out past the dump (yes, GREAT location!)
Kelowna=Canada's Miami, I suspect.
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June 4th, 2010 at 11:52 am 48
Wow – have a look at the "price examples" link from Rennie's Kelowna condo:
"Invue's past success in the presale market, with 56 of 92 units sold, proves that people wanted a premium location, deluxe homes with the finest furnishings and incomparable amenities. The developer has taken back 30 units and now you have the incredible opportunity to purchase one of 66 units being offered at unprecedented prices."
So the developer has "taken back" 30 presale units? Out of 56? In other words, more than half the presale buyers walked away from their deposits, and are about to be sued for the 40% difference between the current price and the original price.
Ouch.
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June 4th, 2010 at 11:53 am 49
XXX: Sucks being a realtor/troll these days I guess hey? Lots of time on your hands I see?
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June 4th, 2010 at 12:08 pm 50
From CMHC annual report I see that they had planned 3.9 billion of retained earnings for 2009 which turned out to be 2.5 billion. What is alarming is that despite this decrease in retained earnings, they have set aside 6.4b of retained earnings in 2009 for capitalization as against 5.3b planned. And around 7.3b are planned to set aside for 2010. That much for their confidence in the market. $500b insured mortgages and 6.5b (or 7.3b – if you want to pick 2010 planned figure) of capital to serve it. Mere 1.3% (or 1.45%) when they have been insuring more than 40% of high risk mortgages for past few years. Wish me luck guys as this is my money at stake.
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June 4th, 2010 at 12:15 pm 51
Bull will be like Supra in head on collision with big truck. Only bit and piece like sweet and sour pork on pavement.
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June 4th, 2010 at 12:17 pm 52
@jon23: Look to the left at the list of recent forum topics on this page, the "total inventory for all REBGV" topic always has the most recent charts.
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June 4th, 2010 at 12:18 pm 53
http://www.vancouversun.com/Metro+Vancouver+real+…
May numbers. Detached -1%. Attached/Condos – flat.
Anyone have a link to full stats package?
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June 4th, 2010 at 12:21 pm 54
Don't expect the REBGV to to have the balls to publish the month over month price drop for May….they only do that when prices are up.
They'll give us the usual crap that prices are still up year over year blah blah blah….and We'll have to do our own math to figure out the May price drop.
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June 4th, 2010 at 12:24 pm 55
So BC loses another 10,000 jobs 'officially'? Hey those are only the jobs number that couldn't be squished down into the liar bucket.
http://thetyee.ca/Blogs/TheHook/BC-Politics/2010/…
There are thousands more newbies on the welfare rolls because of EI weeks running out. Out migration is huge and the beginning of the downturn has only begun. The entire BC economy was running on the free intrest rate scam. Its scary that there is a single person that is buying in todays crumbling market. Forced selling is just around the corner and prices will drop precipitously.
Bye Bye specuvestors. My huzba try sell treeeeeeeeeeeeeeeeee. I try sell treeeeeeeeeeeeeeeeeeeeeeeeeeeeee!!! ooooooooo I no feel so good, gonna barf. Mista Rennie you lie so bad. You bad man……very bad man, bluuuuuuurrrrrrrrrrrrrpppppp.
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June 4th, 2010 at 12:33 pm 56
So is this supposed 5% mom drop in may for house real? I don't think so. I don't think we have moved away from the million mark. Dont know why other bears are celebrating a 1% drop as per Vancouver sun article….
1% drop is pathetic…at this rate it will be two years of declines before we eat away the 20% increase in 2009/10…
glad I am a bear…not
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June 4th, 2010 at 12:40 pm 57
don't buy a benchmark home, buy a real one that has dropped 5% (or don't buy, even better).
no one out there is talking bullish anymore.
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June 4th, 2010 at 12:42 pm 58
REBGV Stats are out:
April Detached Benchmark: $818,403
May Detached Benchmark: $810,175
Bulls, you HAVE LOST $8228 this month and there is more for you TO LOSE! Can you say BUSTED? Say it with me:
BUSTED, BUSTED, BUSTED, BUSTED, BUSTED, BUSTED, BUSTED, BUSTED, BUSTED …
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June 4th, 2010 at 12:42 pm 59
KWL
As they used to say in London "just taking the piss mate!"
Not a realtor although I'm a little confused with people who blame them for bad decisions!?! Do you blame Starbucks for making you buy a 5$ cup of joe? … I Consider myself an informed, realistic bear. My view is for a 15% correction by Christmas followed by another 15% drop over the following four years. Sold my place almost 3 years ago when I moved here and have been renting ever since. Family wants to buy and given the right opportunity in the next year I'm o.k. with it. I was fortunate to live in a large city with reasonably comparable prices that I entered (by fluke) at the bottom ie late Xmas 1994 in T.O. I was lucky and had a great pass and I'm all right with giving some back. I was so close to nailing it until Flaheraty/Carney, banks, CMHC BS – whole other email!!!!
I look at RE as a depreciating asset/consumer good. Strictly speaking, if your looking at RE as an investment it may be the WORST time to buy. For me, I don't mind overpaying if it enhances my family's enjoyment of life. You can't take it with you.
Honestly didn't mean to offend you I just having a little fun. If it makes you feel any better I had an uncle who ran for the NDP.
Have a good weekend
cheers
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June 4th, 2010 at 1:01 pm 60
Unbelievable. I can't believe what I just read in today's Globe and Mail (BC Section-sorry I don't have the online link). Girl in Burnaby,newly married, trying to sell the condo she bought two years ago. Current price is $259k. What did she pay? $269k. WHAT??? This is absolutely unheard of around here-selling a condo for LESS that what you paid, a mere two years ago. Jeez. Things really HAVE changed haven't they? Sign of things to come? I sure hope so. Plus with stories like this hitting the MSM, I'd bet more potential buyers are going to be willing to sit on the sidelines. There's never any rush to buy when prices are going down, or flat.
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June 4th, 2010 at 1:02 pm 61
@FLYING HIGH IN APRIL, SHOT DOWN IN MAY: Sinatra, I know you like to do it your way but best to read first before posting. Monthly price drop given in release.
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June 4th, 2010 at 1:18 pm 62
@Anonymous: Here's the link to that condo story, say what you want about the seller of the condo but at least she put conditions on her offer for the New West place. I know several people who have recently bought without subject and are sitting on two places thinking they'll get a flood of offers…
http://tinyurl.com/233q2so
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June 4th, 2010 at 1:21 pm 63
hahahah bears…
you party over a 1 percent drop? lol
so much for your 5% monthly drop…
guess Larry's numbers dont jive – 5% my ass..
oh well, at this rate, it will be another 5 or 10 years before the declines line up with the start of the bull run
enjoy the sidelines for another 5 or 10 years…
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June 4th, 2010 at 1:23 pm 64
@XXX:
(My view is for a 15% correction by Christmas followed by another 15% drop over the following four years)
Another bear who is suffering from shit incontinence.If there was ever such a RE glut,Armageddon would happen in Vancouver.
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June 4th, 2010 at 1:26 pm 65
@Vancouver2010Meltdown: House price still up 19% YOY Bear. For little bear like you this is lot of money for big bull like me not so much.
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June 4th, 2010 at 1:27 pm 66
@Bullshit Bear Stats:
Yeah, like it's really going to continue at the same rate indefinately. This is the beginning of the end for you, that is what we are celebrating.
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June 4th, 2010 at 1:31 pm 67
@superduperbulltime:
Too bad you won't be able to sell.
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June 4th, 2010 at 1:33 pm 68
@Jim Bob: Ned, I know you have confusion, mixing up people on this blog. But time for lesson. Do not get excited and have party from one month stats, too much noise in data. Always look for trend. Trend right now is not bearish. Having fake party and hangover from this data just makes bears look bad. Thank you.
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June 4th, 2010 at 1:35 pm 69
Re: Condo article
It is too bad people are too dumb and greedy not to lower their price to market value.
Janz: "If you really, really need to sell, people are putting their prices at rock bottom. But we don’t want to go too low.”
Well if you don't get enough sense your place will never sell and continue to drop in value and you'll be stuck in that condo. But the lower hers goes for the lower the one she wants goes for too.
If you calculate how much it has cost her to live in that condo for the 2 years, I bet it is an astronomical amount.
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June 4th, 2010 at 1:38 pm 70
@Professor Bull:
The stats and trends are clearly similar to 2008.
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June 4th, 2010 at 1:41 pm 71
They are many bearish trends out there many more than bullish. Employment, Housing starts, Auto sales, Retail sales, Listings up , sales down. You don't have to search for a bearish trend, Bullish however a little harder to find and manipulate to suit. The trend for Real Estate in Vancouver is down. Not even Rennie himself would argue that.
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June 4th, 2010 at 1:41 pm 72
Folks, the REBGV stats package has been released!
http://www.rebgv.org/sites/default/files/REBGV%20…
The $45,000 drop in detached homes has been confirmed. Woohoo!
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June 4th, 2010 at 1:44 pm 73
Jackass – Larry was quoting AVG PRICE not HPI.
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June 4th, 2010 at 1:45 pm 74
@crashcow: $48,730 is the precise MoM drop!
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June 4th, 2010 at 1:52 pm 75
@Bullshit Bear Stats:
Yup 5 percent in Vancouver. Going by your logic, that's 60 percent in one year. Time to file for bankruptcy.
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June 4th, 2010 at 1:57 pm 76
@Jim Bob: Well bear if 2008 repeat followed by 2009 boom most bull will like situation. Will this happen? Probably. Will silly bear sit on thumb trying to pick bottom and get stinky finger? Yes.
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June 4th, 2010 at 2:05 pm 77
@Disbelief: Very good, you have identified many bearish trends. But price trend is not bearish. It is now flat after long rise. Maybe change to bearish soon. Have party then. No one likes someone who is pre-mature. Professor Bull feel bad because Jim Bob cannot read a chart properly. I have failed him as professor.
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June 4th, 2010 at 2:06 pm 78
@paulb fan: What is CMHC's equity position? Retained earnings for a couple of years doesn't tell us much about how at risk they are of going insolvent due to increased defaults.
CMHC has been collecting fees for a long time without much downside for their balance sheet. Government sponsored insurance is a great racket (look at ICBC). The question is what they've done with the surplus.
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June 4th, 2010 at 2:08 pm 79
Bear on stinky finger…. LOL…..
Honestly you guys, you have to admit that superduperbulltime is hillarious.
Keep it up buddy.
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June 4th, 2010 at 2:15 pm 80
Nice package!
Pretty much what was expected. It may have only been a 1% price drop overall but there will be bigger chunks to come.
Still, we're a month or 2 ahead of the 2008 pace where the top came in May and was matched in June before the first drop happened in July.
3156 sales divided by 9800 realtors comes to…….
0.32 sales each.
Looks like it's back to Safeway for a few of them.
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June 4th, 2010 at 2:16 pm 81
Ugh. The average is much more variable than the benchmark that partially adjusts for quality. If you're looking for a decent gauge of how prices have changed, use the GVREB benchmark; better yet, use the Teranet HPI when it comes out in 3 months' time.
We often forget that, through the HPI, Vancouver and FV have a very decent gauge of house price variability from month to month very quickly after the data are available. Look at blogs from other cities (like Victoria or Toronto) and they're still arguing half-blind over medians and means until the HPI comes out 3 months later. Vancouver should consider itself lucky in that respect.
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June 4th, 2010 at 2:18 pm 82
Exit Strategy for those in trouble:
A neighbour of mine was a builder when Vancouver specials were in vogue. He got caught in a market shift and told me what he had to do. The prices wer dropping, so he had to "chase the amrket down ". By that he meant that if the average price drop was say $10,000 for similar product, he cut his price by $12,000. He didn't want to be the fat part of the bell curve, he wanted to stand out in the crowd and get the hell out.
One has to sense the market is turning and minimize the loss, not hold out in a delusional belief that it will turn around.
I think its pretty clear this market has run out of gas, and given it was running on fumes anyway, history will not only repeat itself, it may be precedent setting.
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June 4th, 2010 at 2:29 pm 83
Benchmark is controlled by the bandits. I would prefer the Teranet three months from now. AVG over the course of a year if the sample area isn't too small is actually quite accurate and sometimes gives a more immediate feeling for whats happening on the ground. I agree that over a month or two its nots so good but don't completely discount it.
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June 4th, 2010 at 2:33 pm 84
Don't worry bulls, you aren't losing $ unless you sell.
So just hang on to the properties for another 5 years.
What do you mean "but it's negative cash flow"?
Sorry man, can't help you there. Can you say *FML*?????
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June 4th, 2010 at 2:38 pm 85
@jesse:
Whatever your views of ICBC itself, car insurance is for real. Car accidents are uncorrelated – a car accident in one part of the city or province has nothing to do with any other, nor are they appreciably correlated with the general economy, and payouts are predictable and premiums can be calculated to meet them. Because of this ICBC really doesn't need to keep much reserves other than to meet day to day cash flows. No black swan event is going to cause everyone to crash their car.
Mortgage "insurance", like all bond insurance, is a fraud. Mortgage defaults are highly correlated for obvious reasons, and there is no reliable way to calculate either default risk or required reserves. This is precisely why only the government offers it (Genworth is backed by the government). The same applies to employment insurance, although people seem to better understand it's not really insurance but a social welfare program.
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June 4th, 2010 at 2:41 pm 86
Any numbers for today? End of week inventory?
Where do we stand?
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June 4th, 2010 at 2:54 pm 87
Just read a fascinating post by Richard Floria that the Atlantic Monthly, which was ostensibly about the changing car culture in the United States, but meandered to make illuminating connections amongst a variety of factors, including housing. Here's an interesting tidbit:
http://www.theatlantic.com/national/archive/2010/…
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June 4th, 2010 at 3:04 pm 88
@jesse: total equity for 2009 was 9.2b as against planned 9.8b and they plan it to be 9.9b for 2010. So, a big chunk of equity is in the retained earnings set aside.
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June 4th, 2010 at 3:12 pm 89
You'd think that Larry Yatakoski realtor dude might have been averse to blow us away with that "average" price drop if bencmark numbers are more indicative.
I don't care if it's average, mean, median or mediocre, a 5% monthly price drop is #%*@!$ing AWESOME!
And that's only a warm-up for the June and July massacre.
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June 4th, 2010 at 3:17 pm 90
F*ck the Gov't and anything connected to it, they are all a bunch of lying whores. Their noses have grown so long, they put anteaters to shame. Gov't is on spin cycle, don't get sucked in wit any of their BS. Our own Gordon Campbell is likely to bail before the next election.
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June 4th, 2010 at 3:20 pm 91
@paulb fan: and @patriotz: So where did CMHC's past retained earnings go? Into government coffers, investments, or did they not make earnings in past years? I'm trying to figure out, assuming past earnings were retained, what CMHC's balance sheet would look like.
If, for example, CMHC transferred retained earnings to the government, one could argue the government is de facto assuming capital for future payouts.
Yes, ICBC is a completely different payout distribution but the principle remains: if enough capital is retained for expected payouts plus a margin, even if payouts are time-correlated, it's still a profitable business. A bit of a sidebar, but the BC government took some of ICBC's retained earnings recently.
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June 4th, 2010 at 3:25 pm 92
Sign of things to come. Changes to credit cards minimum payments to hurt debtors' pocketbooks.
http://tinyurl.com/37uqarh
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June 4th, 2010 at 3:30 pm 93
# 87 oneangryslav:
Good quote, and I fully agree.
I think we are caught between the boomers and the current crop of owner wannabees. By that I mean the boomers have had it so good, their housing was bought cheap , appreciated and they felt they earned/deserved it. Throw in the good pensions many of them have….life is good.
Now we have a generation that has no knowledge of past recessions and sucked into the credit is both good and cheap.
What I foresee is on par with a party from Europe I met who told me that affordability(then) was out of reach for most, but good wages allowed them to rent and still have a good lifestyle ( ie go on holidays ).
I think we will see a transition where parties will see the headache of ownership and want more freedom…ie the European model will migrate to the New World.
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June 4th, 2010 at 3:32 pm 94
@letron.zz:
I just burst out laughing reading the tales of woe from those clowns.
Especially the one who put $40K in renos on her credit card and now will have to pay a measly 1% of her balance plus interest each month instead of interest only.
Suck it up debtors, the free ride is over.
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June 4th, 2010 at 3:32 pm 95
May’s Wilting Flower, average Vancouver house price dropped by about $45,000 last month, latest "Greater Vancouver Monthly Real Estate Statistics 2006 – 2010" interactive charts
http://canadabubble.com/charts/634-greater-vancou…
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June 4th, 2010 at 3:46 pm 96
Jesse – according to CMHC's annual report:
"Within the Public Accounts of Canada, the annual consolidated Net Income reduces the government’s annual deficit; the consolidated Retained Earnings and Accumulated Other Comprehensive Income reduce the government’s accumulated deficit."
In other words, since the CMHC is a crown corporation, any profit or loss it makes gets added to the federal government's annual profit/loss (i.e. surplus/deficit), and these accumulate over the years to affect the government's total debt.
Technically though, the retained profits are still held on the CMHC's books (rather than the federal treasury's books), but since the CMHC is a defacto part of the government hook line and sinker, this is a difference that makes no difference.
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June 4th, 2010 at 3:52 pm 97
@Yalie: So where exactly did CMHC's earnings go? Into general revenue or is there some separate account? I'm asking because I don't know.
It sounds like, from a certain POV, the government should be backstopping CMHC because it benefited from its past earnings.
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June 4th, 2010 at 3:56 pm 98
@jesse: I dont think CMHC had much in their coffers prior to this current boom, seeing their insurance explosion. A cursory look at the report does say that they can pay dividend to the Govt of Canada but nothing beyond that. No dividend has been paid IMO. This is all they have.
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June 4th, 2010 at 3:59 pm 99
While this story is hilarious
http://www.thestar.com/business/money911/article/…
it does give an insight to where the '148%' of debt that Canadians are carrying has accumulated. The debt people are carrying as they try to overcome the monthly deterioration of their 'lifestyle' due to skyrocketing mortgage and intrest charges has led to this beggering of the population. Talk about 'eating the seed corn' dudes, this is not going to end well.
Ben Tal says 'Canadians are going to cut back on discretionary spending to pay the mortgage'. What 'discretionary spending' are you talking about Ben? These people are already maxed out on their creidt cards just to eat !!!!!!! These are not people who have overspent on lobster dinners in Hawaii, these are peoples whose debt has increased monthly as lines of credit get maxed out. Does anyone think that the teaser rates of 1.99% were ever meant to last? They know these people are maxed out and bound to fuck up, its like fishing for a company like Visa. They already know when you apply for a new card its because you've maxed out the others. Did these guys think they were getting away with something when they put 40 grand on the card?????
This is so funny to watch.
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June 4th, 2010 at 4:19 pm 100
what the hell happened to inventory? come on man you have made us crack fiends…
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June 4th, 2010 at 4:32 pm 101
Patriotz,
Correlation does not invalidate the concept of insurance. Bond defaults are correlated, but that does not mean insurance is invalid or a fraud. The issue is whether or not you have meaningful counterparty strength, or if your counterparty is someone who has all of their exposure concentrated such that the insurance has no value.
The large bond insurance companies failed because they were poor at managing risk. That does not mean all future monolines will fail, and it does not mean that bond insurance is a fraud. There are a lot of people who got paid out on a lot of credit default swaps who are very happy they purchased the insurance.
Banks take on a comparable risk to bond insurers, because they are essentially accepting credit exposure. The concept of lending money is not a fraud just because the risks lenders accept are highly correlated. As I said, bond insurance, in the form of monolines, failed because monolines did a very poor job of underwriting the risks they were taking.
Government is not the only entity that will go out and accept mortgage risk or provide mortgage insurance; however, market pricing would be significantly higher than government pricing. I could open up a mortgage insurer tomorrow, but I would not because I evaluate all loans based on a combination of cashflow and collateral (of the underlying asset, not the individual), whereas current home loans are underwritten solely on the basis of collateral, which is highly volatile. The cashflow of the underlying asset does not have the same correlation, and therefore if you underwrote the loans, or the insurance, based on the underlying cashflow as well as collateral then you would not have such meaningful losses in default.
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June 4th, 2010 at 4:33 pm 102
GLOBE AND MAIL – "SHINE COMES OFF HOUSING BOOM – The abrupt shift from a sellers’ market to buyer's market"
http://www.theglobeandmail.com/report-on-business…
Every day that passes more and more media outlets are quick to jump on this new bandwagon.
No longer is it speculation on what's going to happen – it's come to the media saying it's here.
It's been a while since so many articles were out to the general public that doesn't involve information and quotes from the always trustworthy CREA. Finally those who don't follow blogs and hard evidence facts and information can see what we've been seeing for the past few months.
Loving all the RE "experts" in cooler talk discussions now – revolved around all these new articles seen by all the general public – what we already knew here months ago.
Word is going to spread fast.
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June 4th, 2010 at 4:33 pm 103
Jesse – the earnings are held in a separate account, technically. Every year, earnings are "set aside for capitalization", and invested in various cash-equivalent instruments. However, when the federal government presents it's annual budget, it includes these earnings in it's surplus/deficit numbers. So last year, for example, the CMHC reported net income of $931 million. This was put aside "internally" in the CHMC's account, but still included as an accounting item in the federal budget.
Again, it doesn't really matter if the money is technically "held" by the CMHC or directly by the federal government. Since the federal government owns the CMHC outright, it directly assumes all of it's profits, losses, assets, and debt, and includes them in the total government financial statements.
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June 4th, 2010 at 4:41 pm 104
From the GM article…
“It’s just like someone turned off the tap,” said real estate agent Paige Guernsey, who works at Coldwell Banker Horizon Realty in Kelowna, B.C. “You’d think all the buyers sent each other e-mails agreeing not to buy anything for a little while.”
Hasn't the "whole tap turned off" statement been used before, in the 81-82 bust and the 90s malaise? Seems this saying has been around before and once again it emerges to describe the RE bubble. I think that it will be repeated again in the coming months, followed by a quizical look, and a "who knew this was going to happen"….
That is when every bear should say, "I KNEW – why do you think I sold my house and/or am renting? "
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June 4th, 2010 at 4:46 pm 105
@Anonymous:
That "little" is going to last a little longer this time. Say, hmmm, a decade? LOL
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June 4th, 2010 at 5:16 pm 106
@paulb fan: Some cursory digging indicates the retained capital is for the most part cumulative. I don't think much has been taken out of their balance sheet. But it's not fair to compare the total outstanding gross liability since all assets will have some residual value: CMHC is on the hook for the difference between loan amount and eventual recovery price. We can't directly compare mortgage insurance to other insurances without taking this into account.
The growth in MI and insured MBSs in the past year, when prices were already above fundamental value, is disturbing.
Here is a thread for those who are really interested:
Does CMHC have big enough reserves?
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June 4th, 2010 at 5:23 pm 107
I had a little fun scooping up my first post-Olympic bargain. A foot and a half tall stuffed Quatchi at 60% off. Not a RE purchase mind you, but it had the same sense of schadenfreude that rewards bargain hunters of all types.
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June 4th, 2010 at 5:24 pm 108
New Listings 287
Price Changes 181
Sold Listings 214
not sure if thats all
18,500
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June 4th, 2010 at 5:39 pm 109
Cheers! Still slow inventory growth. I am officially disappointed!
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June 4th, 2010 at 5:46 pm 110
Attention Bulls:
I'm looking for a used BMW so let me know when you're ready to sell.
Would like a 650i but will settle for a nice 5 series. When you or any realtor buddies decide or should I say "must sell" let me know.
Sold my place a couple years ago and have been renting this wicked condo in Dunbar saving tons of dough. The mortgage on this place is $3800.00 & I'm paying less than half of that for rent:)
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June 4th, 2010 at 5:51 pm 111
REBGV charts updated with May data:
http://vancouvercondo.info/forum/topic/rebgv-may-…
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June 4th, 2010 at 5:53 pm 112
@domus:
Still lots of fools "taking advantage" of low interest rates. I know two couples that just bought. I just keep my mouth shut.
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June 4th, 2010 at 6:10 pm 113
Funny how suddenly it can become obvious that when the party is over, it just cannot be revived by a few desperados in denial.
The media is only starting to jump on the bandwagon now that it has cleared the last "low rates" speed bumps.
Those low rates that drove prices to absolutely insane levels may actually turn out to be the catalyst for an even bigger crash than what may have been possible in 2008.
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June 4th, 2010 at 6:16 pm 114
Provincial government gets into thr RE pimping game by suggesting that families with children under 18 defer paying property taxes. This is such anbvious sham sceme that suggests that buyers can free up a few extra hundred dollars a month and keep supporting unrealistic pricing.What it does is entice families with young children to speculate on property they could not normally afford. I note that they have to have 15% 'equity' in the property to qualify. What happens to the refi process when the market goes down 15% as even the most sanguine of experts is predicting? Not only will there cash strapped families have to come up with extra cash to requalify but the government will force them to pay the tax defferal at the same time. Double whammy, unless of course you think that real estate can never go down…….? At the top end, you've already lost 50 grand this month and those figures are historic with a cascade of negative data pouring in. What if you start losing 50grand a month all the way into your mortgage term? If you have to defer your tax, chances are you have little extra dough outside the minimum. Question, where is the dough going to come from? Will you send grandma back to HK to the blowjob parlours in Kowloon….little sister…..the kids????????? Pimps…..they're the same everywhere.
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June 4th, 2010 at 6:19 pm 115
Realtors will be looking for new job after fired from McDonalds for overcooking frenchfry. Overcooking market or french fry are bad for long term employment.
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June 4th, 2010 at 6:24 pm 116
How does anyone keep their mouth shut when some idiot you know just drop 750000 on house cloverdale just for view morons
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June 4th, 2010 at 6:28 pm 117
@Starving Artist:
I do too. When I heard I was speechless. I wouldn't say anything nasty of course, why pour salt on a wound.
This market crash won't be without casualties, some of which are friends, perhaps family. But I have warned those close to myself and I am ready and waiting to buy for a more reasonable price.
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June 4th, 2010 at 6:33 pm 118
@Anonymous: Most bear never buy since they broke loser. So yeah bear MAY be right for a few month like 2008 but never buy. Bear no woman sleep with loser bear no hope of owning or kids.
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June 4th, 2010 at 6:34 pm 119
@ReadyToPop: Wow bear no more blow up doll for you.
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June 4th, 2010 at 6:44 pm 120
@Anonymous:
Hey, haven't you heard? Sellers are going to do the same thing.
I've been told by many a cheerleader that if they don't get the price they want they'll just form a little union, stamp their feet, pull their listings and refuse to sell.
I truly hope they do.
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June 4th, 2010 at 7:09 pm 121
@ReadyToPop: Where did you buy that, I'm looking for my 4 year old? Thanks.
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June 4th, 2010 at 7:28 pm 122
@NO-LYMPICS: No doubt we'll see a transition to people preferring renting over owning. Costs of owning a depreciating asset are very high in an environment where prices are mostly stable. Add interest costs, property taxes, routine maintenance, emergency repairs, upgrading, updating, fixing, replacing and finally transaction costs upon selling (to realize the paper gains), and you're looking at some very steep carrying costs. People REALLY need to do the math before buying, and look well past their mortgage date, past the amortization date even.
Of course, some will prefer to pay the higher costs to obtain certain tangibles and intangibles that come with ownership, but even they too must realize the costs and be comfortable with them.
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June 4th, 2010 at 7:33 pm 123
Does anyone know the profit margins for vendors/developers?
I mean, in that condo article the couple is agonizing over having to lower by 10k, but we're already seeing 30% drops in Kelowna and Victoria. At some point recently, MAC Bulk was giving out 50% deals. Presumably they were not losing money. They're obviously prepared to offer deep discounts, and will drive the price declines, what with so much of prime location and high end appointments, how can resales compete?
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June 4th, 2010 at 7:59 pm 124
@Devore: "Presumably they were not losing money."
No. Their costs have already been sunk. All that remained is to sell off the inventory. They got the best price the market could bear. Their costs don't determine their selling price.
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June 4th, 2010 at 7:59 pm 125
@Bullshit Bear Stats: Do you know median prices are up in May? $809,640 compare to April $806,514. and you know Paulb has been talking about reduction since three month's? Agent says that a higherend sales can keep the prices up but he don't know that same type of sales on can keep the prices down artificially.What is Rebgv Index? It is just a reflection of property sales that hit in perticular months and years.Basically it means nothing because Vancouver real estate never goes down.It has built in magnetics that can suck the falling iron back up towards moon.
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June 4th, 2010 at 8:16 pm 126
@Run Buddy Run:
God damn you're a fucking idiot.
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June 4th, 2010 at 8:18 pm 127
@Anonymous: Did i fuck your sister by mistake?
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June 4th, 2010 at 8:20 pm 128
You know what's funny? I've been reading (mostly lurking) on this blog for five years now, waiting for the imminent crash. Sold my place in Kits in 2006, thinking it was all going to be over soon.
Now that it looks like nothing can stop it, I have finally stopped caring. Oh, the irony.
Got to thank the pope and the rest of the regulars for having the fortitude to carry on here (Appreciate the blog everyone. Keep it up!), but as for me any schadenfreude that I would have felt five years ago is offset by the overall economic troubles we're going to be faced with once this crash really gets going.
Nice that we will all finally be doing some bargain hunting down the road, but what I really want to know is what is going to be our next growth industry, and and who is building it? What's the word on the street there, oh blogosphere?
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June 4th, 2010 at 8:30 pm 129
@XXX:
"I look at RE as a depreciating asset/consumer good. Strictly speaking, if your looking at RE as an investment it may be the WORST time to buy. For me, I don’t mind overpaying if it enhances my family’s enjoyment of life. You can’t take it with you."
Good news…..You CAN take it with you if you ask to be buried in the back yard ???
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June 4th, 2010 at 8:33 pm 130
@MIracle:
Our next growth industry will be foreclosure specialists, bankruptcy trustees, marriage counseling, repo men, suicide hotlines, crisis counseling and moving companies.
I'm investing in all of them.
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June 4th, 2010 at 8:35 pm 131
I can't believe that G&M article about the chick trying to sell her Burnaby condo. This chick realizes that she drank the kool-aid two years ago and now what is she now trying to do? Buy a condo for twice as much money in a massive development in New West!! Sweetie, you took a 10% hit on a $200k condo, imagine how its going to feel taking a 20% hit on a $450k condo two years from now! Unbelievable. Not enough kool-aid in the world for this chick. What compounds the stupidity is that she is in her early 30's and recently married. Chances are she's going to breed in the next few years and will want to list that condo so she can buy a house. Does she think that a condo in new west purchased during a period of historically low interest rates is going to hold its value in a declining market? The best thing that could happen for her is for her condo to NOT sell and for this deal to fall through. She's probably too stupid to realize this though.
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June 4th, 2010 at 8:59 pm 132
Agent Will is sounding pretty bearish. link
"
This time, I believe, it’s different.
We have no more interest rate reductions to give. In fact, rates just went up 0.25%. 5 year Fixed rates (the best rats you can get without having to be qualified at the higher posted rate) sit at 4.39%, an increase of 0.50% from a few months ago. This impacts affordability greatly. Additionally with the new mortgage rules affecting anyone who would like to take advantage of the variable rate and anyone who would be using a basement suite for additional income qualifying, well, money is just not as easy to get as it once was.
We also have near historic highs in prices (near because the peak was actually over a month ago). In 2008 when we hit these highs the market slowed dramatically. People, local and foreign, simply have no more to give."
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June 4th, 2010 at 9:08 pm 133
@VancouverGuy:
Bond insurance i.e. Credit Default swaps although technically not fraudulent (not illegal) in many many cases were fraudulent in intent, and contributed greatly to the credit crisis (read Yves Smith – ECONNED).
The CDS market (being an insurance market) suffers from the same problems that the real insurance market suffered from when it started up in England several hundred years ago, namely you could take out insurance on someones house even if you didn't own it or have any interest in it – other than to see it harmed. Parliament there eventually had to restrict insurance to persons with an insurable interest because of widespread fraud.
Cheers.
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June 4th, 2010 at 9:19 pm 134
Agent Will have got only one listing,It would be better if Agent go for vacations.It seems like listings start disappering from the market.It would be better if he watch FIFA LIVE during vacations.I will watch it in Vancouver in high definition.
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June 4th, 2010 at 9:31 pm 135
Did'nt know there were so many deaf, blind and illiterate people around here (at least 214 today alone). Obviously they're not getting the message that started out as a whisper and has turned into a mighty roar that prices are set to plunge.
Can't imagine what planet they're from.
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June 4th, 2010 at 10:33 pm 136
@hombre:
I wonder if it's 214 buyers that haven't heard the news, and 214 sellers that have, and accepted below list.
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June 4th, 2010 at 11:00 pm 137
Here is my little insider story.
My family are renting a house on the West Side and in January my amateur landlord put the house for sale as "financial conditions changed". My family kindly agreed to show the house once a week to potential buyers. At the beginning showings were active and once we had seven parties to wander around. By the end of April there were one or two viewers per week. In May – zilch – nothing – no showings and no call from the realtor for four weeks. Yesterday I inadvertently bumped into the guy in downtown and asked him what's going on. The realtor said "you can't believe but there was not a single call for this house for 30 days". I told him that there is no reason for dejection because it is different here and maybe all the potential buyers are flocking to Johannesburg to snap some properties during FIFA World Cup and then will be back home. To say that he was stunned is to say nothing.
And another little story.
When 6 months ago I sold my 2br townhome and rented a 4br house for less than cost of "ownership", almost all my friends and colleagues were looking at me as at a leper. God knows what they were talking about me when I did not hear…
Every Friday four of us go for lunch together and every Friday since becoming a mortgage-free I have been heavily pressured for not taking advantage of low rates blah-blah-blah. I tried to reason my move and educate them, but helplessly.
And it happened.
Today at lunch, there was a lengthy discussion about BP barbarism, BC politics, schools, hockey, soccer, cars, whatever. Real estate – not a single word. Wow, I said to myself.
Coincidence? What do I know.
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June 4th, 2010 at 11:09 pm 138
From the Business Insider article i really liked this comment from a reader. Don't know how to link to a specific comment so here is his comment in its entirety – it's quite long.
Sukh on Jun 2, 2:24 PM said: The reason the average sale price for detached home price is so high is that there are many homes sold in the $4 million to $7 million dollar range.
Even without these pockets, housing is very expensive in Vancouver based on the incomes that the vast majority of Vancouverites actually earn. The reality is, the majority have been in their homes before the bubble began, and with lower interest rates, they have been able to make ends meet. But, to do so, they have had to sacrifice the need to put aside savings for retirement. This has been justified by the belief that their homes would be their retirement plan. Many may know that this is not realistic, but one tends to believe what they need to believe to get by, and nobody wants to dwell on the reality that they must know will exist if their dreams of ever-rising house prices were to come crashing down.
Unfortunately, home prices will decline more than most people can (or want to) think possible.
Vancouver, and its suburbs, have no major industry or corporate head offices to be the base to help employ the 98% of its population that isn't independently wealthy. The economy is being held up by the residiential construction boom. Government spending may pick up some of the slack, but that will not even come close to offsetting the slowdown in construction that has resulted from Olympics construction coming to an end.
As most homes here are built by individual general contractors, these homes will continue to be built because, what else are these people going to do to pay their own bills? So, even after the market has long run out of willing and able buyers, homes will continue to be built.
The reality is, even though, deep down, many of these builders know that we are in a bubble, they are stuck in a catch 22. And this is isn't just the general contractors, but also the tradespeople who are being forced to become general contractors and build spec homes because that is the only way they can keep themselves employed. So, they take the equity out of their homes and continue to add to the inventory of spec homes.
This way they at least keep themselves employed. They have no other option as they still have monthly bills to pay. They just hope that they will be lucky enough to at least sell the spec home they are builiding for at least what it cost them to build it. This allows them to continue to draw an income, unfortunately, it is drawn againt their own personal residences, homes they have borrowed against to finance the spec homes they are building.
What other option do they have? They can't just quit and say its too risky, I'm going to look for a job elsewhere and just become somebody else's employee. There are just no other jobs for these people to move into. As people lost jobs in other industries, they moved into construction. Now, there is nowhere else to go.
So, just like what has happened in the US, there will be an overbuilding of homes, and prices will fall to levels much lower than what it currently costs to build them. And because there will be an inventory overhang, even if these homes are all bought as "investment properties", the reality is, there will be a high vacancy rate, so these "investment" home owners will be undercutting each other to steal tenants from one another.
On top of that, the city of Vancouver is going to need more tax revenue, so they will not just raise property taxes, but they will probably raise them even more for rental property.
Yet the landlords won't be able to charge rents that covers their costs because not only is there an inventory overhang, but tenants can only afford to pay so much of their income for shelter costs. If need be, you will see more and more renters either doubling up or moving back with family. This just increases the pool of rental properties. How long can these rental property owners afford to have these properties sit vacant?
So, if an average family in Vancouver makes $60,000 a year in income and they can afford to pay 40% of that for shelter costs, that works out to $2,000 a month. When things finally bottom out, this level of rental income will justify a home price of around $400,000 a year at most. This valuation is based on what the property can generate in income based on a renter's ability to pay and the operating costs of the owner of the home which include mortgage interest, property taxes, insurance, and repair and maintenance.
Yes, some of these homes will have an upper floor and a lower floor that can be rented out separately, but all that does in increase the inventory overhang of rental units.
And this assumes that family incomes don't drop dramatically, which unfortunately, they are very likely to do, especially for the percentage of the population actually looking to rent. Because the reality is, many of these people will be looking to rent because they have lost their own home because they couldn't afford to continue to make the payments after they lost their job.
This is how an economy clears itself out after a period of living above its means through ever-rising personal debt levels. Sooner or later, it all all comes crashing down. When personal debt levels stop increasing, the economy stops growing, and the debts people took on with the belief that there would always be an income to make the payments from, can no longer be serviced and are eventually defaulted (after all savings and unemployement benefits have been exhausted).
We start all over again, but the good news is that there will be a home for every citizen, based on what they can afford to pay. That is the luxury that an inventory overhang provides for society. With homes now in place at levels people can afford, the economy can start to grow again, focused on producing actual goods of value that can be exchanged in the economy, thus putting people back to work.
Read more: http://www.businessinsider.com/chart-of-the-day-v…
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June 5th, 2010 at 12:56 am 139
@patriotz: "Car accidents are uncorrelated."
Except in this case:
http://www.youtube.com/watch?v=oC6GIbg9tvo
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June 5th, 2010 at 1:02 am 140
@Anonymous:
I can't find that article on the Burnaby condo bought @269k, asking now for $259k. But I came across this:
Owners of leaky condos face 'double whammy'
By Doug Ward, Vancouver Sun May 14, 2010
Read more: http://www.vancouversun.com/technology/Owners+lea…
D I N G
Owning a leaky condo is like owning a sinking boat
except that the province and the professionals profit from the condo owners' misery.
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June 5th, 2010 at 1:12 am 141
@MIracle: "Nice that we will all finally be doing some bargain hunting down the road, but what I really want to know is what is going to be our next growth industry, and and who is building it? What’s the word on the street there, oh blogosphere?"
I don't think anything is on the horizon. If it were, recovery would be in sight. That's why there is no recovery, otherwise you'd readily be able to point to an industry leading us out. Things are too volatile, and crisis episodes are popping up everywhere, it's impossible to tell.
Next big thing? My money's (on paper) on nanotech
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June 5th, 2010 at 3:19 am 142
"Today at lunch, there was a lengthy discussion about BP barbarism, BC politics, schools, hockey, soccer, cars, whatever."
Did the supposedly BP barbarism (ie, risky drilling in deep water offshore because federal regulations prohibit drilling in shallow water closer to shore) connect at all to the part of the conversation about cars, as in those things that move because people put an oil product in them?
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June 5th, 2010 at 3:50 am 143
@chip:
That is simply untrue. In fact the USG had been issuing shallow water drilling permits in the Gulf right up to a few days ago.
http://www.firstenercastfinancial.com/e_news.php?…
"Just the facts, ma'am".
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June 5th, 2010 at 7:22 am 144
For an interesting insight into RE boom and bust cycles and human psychology, visit "Real estate timing.com" (Robert Campbell).
Once you scroll past the sales pitch, at the very bottom of the pare is a "Free Preview"…click on it and read about the cycle of booms and busts.
Uh oh. Look like we're entering "STAGE FOUR"!
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June 5th, 2010 at 7:37 am 145
@Anonymous: Good story!
So she bought the place in 2008 at $269,000 current list price at $259,000. Let's assume they put down $30,000 and borrowed $239,000 with an OVR mortgage, they may have paid around $1,100/mo (I'm being conservative). Strata fees, we'll be kind and say $100/mo and property taxes say $50/mo. I won't even consider maintenance and utilities, uber-conservative.
$1,250 x 24mo = $30,000. Add that to the $10,000 she's losing on price drop IF she gest $259,000, less fees, etc… this is a $40,000(+) investment LOSS in 2 years! Way to go Trump!
I've heard a few stories like this. I had a friend who sold their place and pocketed cash and was all happy. Once we calculated the carrying costs for the time owned we saw that his "investment" actually lost him $25,000 net… AND that was just in mortgage payments. We didn't factor in property tax, strata fees, maintenance or utilities. So realistically they lost over $30,000(+).
They're quick to tell me that paying rent is a waste meanwhile over the last 2 years my housing costs (rent) total about $20,000 or 8% of our household income. So who's in a better financial position 2 years later? AND they laugh at me when I talk about my stocks earning 30% since 2008. And I'm liquid!
People are so short-sighted about real estate it's not even funny. When you want to talk about how much the true cost of owning is, they never want to go there. Pathetic.
I mean I want to eventually own a home one day, maybe here, maybe elsewhere but the cost has to make sense.
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June 5th, 2010 at 8:08 am 146
Stages of denial:
1) If I sell now I will get a positive return after expenses
2) If I sell now I will sell for more than I bought it for
3) If I sell now I will still have positive equity
4) If I sell now I will go bankrupt but this is a long term investment. Markets go up and down
5) Oh f$&@ it.
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June 5th, 2010 at 8:21 am 147
@Miracle: mining is one growth industry for BC. Several big (20 year plus production) mines have completed the environmental assessment process and are set to come online: Mt. Klappan, Red Chris, Galore Creek, etc., and these are just a few in northwestern BC.
Just because heavy industry isn't local to Vancouver doesn't mean it isn't there.
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June 5th, 2010 at 8:36 am 148
@cgh: Not sure all those will come on line. Capex is ENORMOUS and will be tough to raise the money in this environment.
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June 5th, 2010 at 8:45 am 149
@Vansanity:
The 40k isn't a total loss because she enjoyed the utility of shelter. She probably would have "lost" 24k renting a similar property. Sure, it was a bad investment, but not quite as bad as your figures (conservative as they are admittedly) suggest.
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June 5th, 2010 at 8:58 am 150
@Vansanity:
1 – Ulsterman's right that you need to add imputed rent to the return
2 – Subtract Realtor fees
3 – Some (but not much) of the mortgage payments go towards 0 return savings which should be accounted for.
4 – To be completely fair, she should account for any additional time spent managing the property.
5 – She was somewhat lucky, which not everyone is, and this will result in some return "for free"
There's no denying many are not doing the accounting properly. The real pain comes when they have no choice but to calculate everything because they're out of money.
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June 5th, 2010 at 9:31 am 151
@VHB:
How nice of Agent Will to cover off every point that many of us have been making here for at least the last 3 months, while he was still a rabid market cheerleader.
He's a little late to the party and his insight is worthless at this point.
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June 5th, 2010 at 9:46 am 152
@Boombust:
That last double top in the San Diego market looks a lot like ours.
http://www.realestatetiming.com/sandiego.html
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June 5th, 2010 at 10:41 am 153
The RE pimps have gone silent in the media this weekend….capitulation, diahearra….strategy meeting? I expect we will see another blitz soon to suck up the stupid, the weak minded, the uninformed and the gullible newcomers off the bottom of the barrell. I also expect to start seeing the standard sucker ploys like the vacation package and the new car thrown in to hide the true price of the deal.
Meanwhile Trudeaus vision of a fucked up country where everybody stays an outsider is coming back to bite the self same Liberals in the ass. When the liberals decided to make Canada a haven for disgruntled refugees instead of a country of citizens they set up the mess we have today. Personally I think Trudeaus greatest dream was to water down the Canadian loyalties of the second world war generation so as to finally set up the separation of Quebec and he was relying on the support of a new immigrant population who didn't know Canada and was told to keep their own culture and not learn English or assimilate so that the culture of Canada was unimportant. Now we have the children of those immigrants wondering where their loyalties lie and find themselves without a country to call their own. The Liberal Party had a great time parcelling the country into tiny constituencies of immigrants who relied on the government for handouts and would vote Liberal for the free goodies and all the country got in return is a population of economic refugess who have no affinity to this country.
http://communities.canada.com/vancouversun/blogs/…
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June 5th, 2010 at 10:53 am 154
The may report is there, they just made it a little difficult to find:
http://www.rebgv.org/monthly-reports/may-2010
It is interesting that they made note that prices increased yoy in may, but did not report the price drop mom.
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June 5th, 2010 at 11:16 am 155
World Class New York has waterfront condos for $400's
1/3 of much bigger, corporate head office and financial hub like Vancouver.
http://www.crystalpointcondos.com/?utm_source=nytimes.co...
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June 5th, 2010 at 11:23 am 156
"Did the supposedly BP barbarism (ie, risky drilling in deep water offshore because federal regulations prohibit drilling in shallow water closer to shore) connect at all to the part of the conversation about cars, as in those things that move because people put an oil product in them?"
A very insightful comment! But of course your question was rhetorical. I'm quite cynical about peoples inability to make connections.
In fact, people generally don't connect dots. Their lives are driven by appetite, not thought. The average person thinks that when you say, "oh, you should be more philosophical about it", you mean, "you shouldn't think about it so much". To do "philosophy" means "don't think", lol.
Years ago Bertrand Russell (in "Skeptical Essays") wrote a short piece entitled "On being modern-minded", in which he observed that the modern-minded man didn't really want to be any kind of real pioneer, but rather wanted only to "think first what is about to be thought" and to "do first what is about to be done" (or words to that effect), in other words, to be seen to be ahead of the crowd.
No wonder we're in such a mess!!
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June 5th, 2010 at 11:29 am 157
Hi Patsan,
Thanks for your little insider story.
Here's another one:
An aquaintance and her sister lost their elderly mom in January, and decided to put her clear title older house in Burnaby on the market after all the formalities of the estate. They got several appraisals from realtors during the olympics and decided to list after the distraction of the games.
They received an offer the first week, along with a backup with a couple of subjects. They rejected both as there seemed to be a lot of interest. Unfortunately, the interest began to peter out in April and has now dried up entirely, despite a price reduction that is now below those 2 offers.
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June 5th, 2010 at 11:53 am 158
@nojoy: I want to thank everybody for these anecdotes. I'll have one to pass along shortly as well as my sister and her husband are putting their Coquitlam home up for sale in a couple of weeks time. I've been gently pressuring them to get the home listed as quickly as possible (for all of the reasons we've discussed on this blog).
I'm genuinely confident that the house will sell quickly as it's in a decent area, the house is in good shape, and my sister and brother-in-law are well aware of the nature of the market and will price and consider offers accordingly. They have the added benefit of sitting on a pile of potential equity and have not taken any money out of the home and will, therefore, have little incentive to want to squeeze every potential dollar out of the list price.
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June 5th, 2010 at 12:32 pm 159
Good luck with that angryslavs.
Never underestimate the danger of a falling market.
Bin there done that, and got slaughtered.
Tried to sell a house in 1990 after studying the hell out of the market, and thought I knew it all.
Got a bunch of appraisals, and instead of going for the highest one, I listed below the lowest.
Finally got an offer that really sucked, so I countered by a tiny little bit as I thought the market couldn't possibly go any lower.
Big mistake as I lost the sob, along with the opportunity to come up with the capital for another "once in a lifetime" investment.
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June 5th, 2010 at 12:56 pm 160
Just curious oneangryslav, not that I think it's too late to sell (because the market has a long ways to fall), but why didn't they list a couple of months ago?
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June 5th, 2010 at 1:37 pm 161
@joeblow:
They had been hoping not to sell at all, but finally realized about a month ago, due to mitigating circumstances, that they have to sell. It's taken them a while to make some mostly cosmetic renos and other improvements to the house. They're almost finished now.
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June 5th, 2010 at 3:28 pm 162
#157 nojoy:
I've noticed that similar phenomenon, regardless of what you try to sell. When any item is first advertised, that is when the offers come in. The offers mysteriously dry up after the first go around. With respect to real estate, if they dry up after the initial listing, that is a strong sign it is becoming a buyers market. Buyers aren't THAT stupid, even they may sense the market is turning.
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June 5th, 2010 at 3:43 pm 163
One other phenomenon to note is the First Time Buyers ( FTB's )
IMHO, the " normal progression " has been disrupted by the bogus economy created by artifical low interest rates (and the CMHC). FTB are an important catalyst/driving force in the RE market, a crucial link in the chain.
I think the system has lassooed and hogtied a huge pool of FTB's, who will be underwater and bitter, leaving a black- hole economic void that won't prime the RE pump. That will result in a trickle up effect that will affect those boomers who felt major entitlement.
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June 5th, 2010 at 3:52 pm 164
@Best place on meth: Interestingly San Diego prices rebounded exactly the same time as Vancouver did in 2009, only they rebounded 15% up after falling 50% from peak. Vancouver rebounded 15% after falling 10% from peak.
Step changes in mortgage rates seem to change relative, not absolute, prices. Vancouver's "double top" was San Diego's "dead cat bounce" but they amount to the same thing: marginal buyers with myopic rear view mirrors.
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June 5th, 2010 at 3:59 pm 165
# 159 sluggo:
Good point:
I also remember the 1990 era….and RE was literally frozen.
I think the rationale was the Gulf War, Red China actions (which scared Hong Kong investors), and other global events.
However, the world events now are increased instability, Europe seems to be a basket case ready to implode. "no balls" Obama is showing how useless he is via the BP oil spill fiasco.
The only law is chaos will rule !
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June 5th, 2010 at 4:20 pm 166
I am really not seeing the CRASH. It's just merely an adjustment with the RE market here.
I am more and more doubtful the CRASH we have been waiting for won't happen.
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June 5th, 2010 at 5:32 pm 167
all the same little bears are still here angry at the world !
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June 5th, 2010 at 5:50 pm 168
@Jun: You got it! I DOUBT that the crash WON'T happen!
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June 5th, 2010 at 7:00 pm 169
@patriotz:
The facts are that while there is some shallow water drilling almost all of the Pacific and Atlantic coasts are off limits to drilling, as is most of the Gulf along the Florida panhandle.
"The Atlantic and Pacific coastal waters are almost entirely undeveloped, with even surface exploration work banned since the 1980s. The restrictions came as states worried about the environmental and economic impact of a spill from an offshore platform.
Huge quantities of natural gas and some oil were discovered in the 1970s and 1980s in shallow Gulf of Mexico waters off the Florida Panhandle, before the then-President George H. W. Bush put the eastern Gulf off limits. " http://www.rigzone.com/news/article.asp?a_id=6354…
So the facts are that the Feds do prohibit drilling in shallow waters (not all but most) and this has forced oil companies into deeper, riskier water.
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June 5th, 2010 at 7:23 pm 170
@chip: "So the facts are that the Feds do prohibit drilling in shallow waters (not all but most) and this has forced oil companies into deeper, riskier water.
Nope. Shallow drilling is still allowed, at least up until the end of April. Larger companies are tending to concentrate on deep water drilling because it is much more capital intensive but much more lucrative as well.
The shallow water drilling is competitive and typically smaller companies with low overhead crowd out the big companies that usually have higher overhead.
Oh BTW, guess who was a major subcontractor on the platform? Haliburton. Haven't heard much press on it, though.
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June 5th, 2010 at 7:31 pm 171
@chip: Yes many, but not all, areas of the US coastline are off limits to any drilling. I disagree that if more shallow drilling were allowed that deep sea drilling would go away. There is too much money at stake to ignore it.
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June 5th, 2010 at 7:38 pm 172
chip – why are you raising the drilling question? A politician would have to be out of their mind to propose drilling within near sight of the Florida coast. Simple public reaction would mean that their jobs would be gone.
Do you have an interest in oil and gas exploration?
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June 5th, 2010 at 7:46 pm 173
Earlier this week I posted the number of search results when searching for rentals on the Vancouver Craigslist with the search term "Metrotown". To recap, last year at this time there were about ~450 results. A month ago there were around ~850. Earlier this week there were ~960. I checked today and the number is 1000. I think Craigslist may max out at 1000 results, cuz that seems to be a very convenient round number. Earlier in the day it was 998.
Anyhow, that's how one real time rental market indicator is performing.
Now I'll have to limit my "Metrotown" queries to the Burnaby/New West region of the Vancouver Craigslist site. With that refinement, there were 709 rentals listed a few minutes ago.
Run, amateur landlord, Run!
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June 5th, 2010 at 8:03 pm 174
@ulsterman:
I think people aren't really going to realize how much they've lost in real estate until they sell the property and come away with $0 in cash from the transaction, or worse, have to cut the bank a cheque for the balance of the mortgage. Then we'll hear the sob stories, which may be two years away, given how long it took the US market to eventually CRASH. I remember hearing things like "buyers strike" from around 2005-2007, when things finally went into steep declines. Or can we hope for a quicker crash here?
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June 5th, 2010 at 8:38 pm 175
@Jun: I am really not seeing the CRASH. It’s just merely an adjustment with the RE market here…
I must agree with you, the most of the news and latest development in the city support your theory, for example this one:
B.C. loses 10,000 jobs in May, bucking national trend
Read more: http://www.vancouversun.com/business/loses+jobs+b…
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June 5th, 2010 at 8:44 pm 176
West Vancouver detached prices up by $26,000 Larry's half mustache from right side seems to be disappeared.
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June 5th, 2010 at 8:54 pm 177
More land discovered in Vancouver! Looks there there are about 4,000 more condos coming to SE False Creek.
http://vancouver.ca/olympicvillage/about.htm
Unless they approve an increase in building heights to allow for more…
http://vancouver.ca/commsvcs/southeast/heightrevi…
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June 5th, 2010 at 9:51 pm 178
Just visited the 2300 Kingsway open house (along with others). First thing I noticed was the huge sign that said "If you lived here, you would be home by now (LOL)". Yes, LOL was in the quotation marks!
About 15 cars in the parking lot. The first unit we saw on display, 547 sqft, 278k. Asking the salesperson there about the buyer demographics, he said mostly asians who live in the area. When asked about investors vs live-in owners, he said it was about 50/50. Lots of sold signs on the board, I believe 38 units remaining.
* 22-storey tower with 197 units
* 8-storey tower with 138 units
To be completed mid 2013.
Since the Hills failed in 2008, this one might get completed.
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June 5th, 2010 at 10:04 pm 179
@manx:
See those units,even on a so good area,are sold in a flash.Who said,Van RE will a 40% down in few yrs? Chinese community is the main pillar of support.Van RE is a safe and prudent investment.
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June 5th, 2010 at 10:10 pm 180
@Run Buddy Run:
Concrete evidence that dispels disinformation fabricated by bears to create fear among undecided buyer.
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June 5th, 2010 at 10:13 pm 181
@jesse: @ulsterman: Points taken.
I think you both got the gist of what I was trying to illustrate. Real estate as an investment comes with a number of associated costs, none more than interest.
In that particular case, yes she enjoyed the property as a shelter which should equal something, but selling the property for $10k less than she paid doesn't equal a mere loss of $10k but much more.
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June 5th, 2010 at 10:15 pm 182
@Anonymous:
They should have found a good Job or more education to qualify a mortgage;their plight and anger are self inflicted.Compare to other major cities,Van RE is dirt cheap and affordable.Don't be angry and find a real job instead of penny begging here.
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June 5th, 2010 at 10:23 pm 183
Housebuyer: says
"Compare to other major cities,Van RE is dirt cheap and affordable"
Financial Post: says
"Vancouver not only has the least affordable housing of 28 markets measured in Canada, but of 272 metropolitan markets ranked in Ireland, the U.K., New Zealand, Australia, the U.S. and Canada, according to statistics compiled by the Winnipeg-based Frontier Centre for Public Policy." and adds that it is “unprecedented in modern history,”
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June 5th, 2010 at 10:28 pm 184
@Best place on meth: BPOM, Agentwill is a scumbag and so he would remain. Amen!!!
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June 5th, 2010 at 10:37 pm 185
@BBY:
Lots of basement suites for rent and EXPENSIVE too! Who would pay $1300 for a basement suite anyway? Is housing that short in this city? I didn't think so…we're looking for a NICE, NEWER place near Metrotown, went to a couple open houses of decent places but there were LOTS of people also looking, lots of competition for the non-basement suites. I suspect many of the new condos (former amateur landlords) have listed them rather than try to rent at a loss. At this rate, I may have to raise my first child in a one bedroom apartment! lol! Oh well…it's doable I guess ;p
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June 5th, 2010 at 10:47 pm 186
@jesse:
Back of envelope calculations tell me that at 150,000 per house, all they need is 60,000 houses to wipe out their entire equity. that is a sheer 15% drop in vancouver detached, and 60,000 seems like an uber pessimistic number for simple reason that the construction employment is vancouver alone since begining of this boom has shot up by more than 110K. All those people made $50 an hour and worked for 80 hours a week and bought multilple houses. Then we have realtors, mortgage brokers and other whole bunch of businesses totally relying on real estate. I would be surprised if CMHC needs anything less than 25b from the taxpayers. Interesting times.
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June 5th, 2010 at 10:57 pm 187
China PBOC clobbers real estate market and sales plummet 70% in May.
"Beijing’s efforts to deflate the real estate bubble include measures that restrict pre-sales by developers, curbs loans for third-home purchases, doubled mortgage rates, and lifted down-payments to 50% for second-home purchases. Property sales in Beijing, Shanghai and Shenzhen fell as much as 70% in May as developers delayed sales following government tightening measures. A tax on residential real estate has been submitted to the Chinese central government for review."
http://sirchartsalot.com/article.php?id=134
Some very tight sphincters among the Dim Sum crowd.
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June 5th, 2010 at 11:21 pm 188
@BBY: I just ran the "Metrotown" query in real estate and came up with 253.
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June 5th, 2010 at 11:43 pm 189
@paulb fan: Not all CMHC loans were made in Vancouver and you're assuming the full loan principal is outstanding at the time of default.
I don't know their net exposure to second/third tier loans and HELOCs. These are typically subordinate — and often collateralized against a temporary and inflated equity position — and thus would hit CMHC's balance sheet in a much more severe way.
Don't get me wrong, I think CMHC has taken a huge risk with their lending practices. But it will take a lot more than 60,000 claims to render them insolvent. CMHC's true act of evil is, through their lending catalysts, making housing LESS affordable for Canadians. As much as we like to rip into Flaherty and Carney, I think this irony has not been completely lost on them.
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June 6th, 2010 at 2:43 am 190
@Vansanity:
Interest is not an associated cost of RE. It's the yield on a fixed income investment. A house and its mortgage are two different investments, the former owned by the buyer and the latter owned by the lender. The fact that most people borrow money to buy houses does not mean the two are necessarily connected for RE. Lots of people borrow money to buy stocks too, but that does not mean that interest is an associated cost of stock market investing.
A given stock has the same return whether the buyer borrows to buy it or not and a given house has the same return whether the buyer borrows to buy it or not. What's different is the return on the portfolio, i.e. the stock/house plus the short position in fixed income.
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June 6th, 2010 at 3:49 am 191
"help us"
"we have to sell this week"
http://vancouver.en.craigslist.ca/pml/reo/1777618…
and what is this "regular price" these people refer to?
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June 6th, 2010 at 7:05 am 192
New capital gains tax on spec homes in Britian will kill the idea of RE as an investment. Really bad news for current owners.
http://www.thisislondon.co.uk/standard/article-23…
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June 6th, 2010 at 7:21 am 193
@jesse: I dont think 150K is the total value of the house in the vancouver and yes I am aware that CMHC does not handle vancouver alone. Since our prices are way outta the whack, what I want to say is that, in my opinion, most of the people going for foreclosure may end up with at least 150K in losses (I would assume a much higher number as we progress through years). Just imagine even the houses in Surrey are selling for more than 600K, and most of the people have added practically zero equity in the last 2-3 years.
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June 6th, 2010 at 7:50 am 194
@tim: Go here to get your list of 1000 units in Metrotown:
http://vancouver.en.craigslist.ca/search/apa?quer…
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June 6th, 2010 at 8:53 am 195
@realpaul:
Slight correction: it will kill the idea of RE as a speculative investment, i.e. one for which returns are based not on rental income but on selling for a gain. For those who want to invest for rental income, it's good news. It's a sign of how warped things have become that people don't think of the latter, which is the only fundamentally sound kind of investing, as investing any more.
Everyone should read the article. The claims that increased CG taxation will makes rents go up is absolute BS. It's the worst kind of scare tactics from the RE parasites.
The claim that fewer properties will be for rent if landlords leave the market is nonsense. The reason is simple: if landlords decide to sell, who are they going to sell to? Think about it.
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June 6th, 2010 at 9:02 am 196
Interesting article at Irvine Housing Blog on "Buying and Selling in a Declining Market"
http://www.irvinehousingblog.com/blog/comments/bu…
It's long, but it has some strategies for turning the tables and putting pressure on sellers. Here's a bit of a summary:
1. offer 10% below ask
2. if the owner rejects, make new offer the following week at 11% below ask.
3. if owner counter-offers, withdraw offer and make new one at 11% below.
4. if seller's realtor suggests there are other offers (usually a lie), withdraw offer and let him explain to his client why he lost the only offer.
Basically, make the first offer your top price, and then lower it 1% at every negotiating opportunity. Not sure I could do it in real-life, but I love the idea! I think we'd have to be in full-crash mode for this to fly.
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June 6th, 2010 at 9:13 am 197
@patriotz: Patriotz, really? How long have we been blogging on here now? 4 years? You're going to give me a lesson on the mortgage and the home being seperate? Thanks, I had no idea.
Again the POINT, in case you missed it, was the price of the home does not reflect the true hit to the owner's bottom line. That's it. It's not "rocket surgery". And yes, before you correct me, I meant rocket not brain. Thanks.
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June 6th, 2010 at 9:21 am 198
Apparently we now have "High" interest rates:
http://www.news1130.com/news/local/article/62986-…
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June 6th, 2010 at 9:24 am 199
@Vansanity:
Well yes it does. That's what the buyer is paying. When the buyer is getting is fundamental, i.e. rental value. The difference is what the buyer is losing.
Financing costs are a red herring as the buyer is losing the same amount regardless.
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June 6th, 2010 at 9:30 am 200
VRENGD.
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June 6th, 2010 at 9:30 am 201
MLS LISTINGS DOWN SALES UP.
BP claims cap now catching about 10,000 barrels per day
Real estate board of greater Vancouver mls sales up by 48.5% this week,867 sales compare to 562 sales last week.
Sorry bears not a Max winner,The next jackpot will generate winner for 50M and 20 winners for $ one million each.Run Buddy Run.
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June 6th, 2010 at 9:31 am 202
@Woodrow:
Look, there are TWO things you can do to save money on your mortgage according to that News1130 article. That's right – TWO things.
>>>Bank of Montreal's Carolyn Heaney says within in the next couple of years we'll see more increases in the prime lending rate, so people may want to consider a fixed rate mortgage. "Let's say we take an average 30 year and reduce it to 25, how much interest can we potentially save off on a $200,000 mortgage? The answer to that is roughly around $53,000."
Heaney explains another thing people can do is cut their amortization by five years, from 30 to 25. She says potential homeowners can save over $50,000 on a $200,000 mortgage.<<<
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June 6th, 2010 at 9:44 am 203
@patriotz:
Patriotz is absoultely right. To leapfrog from his idea…
Probably "THE" most often made mistakes are revolved around the confusion of interest/principal, financing, D/E mix, etc. This confusion leads to a lack of comparability from RE to other investments for the average person with average math skills.
How many times have you heard: "This property is a good ivestment if you put "XXXXXX" down". In terms of yield, that makes literally ZERO sense.
Investments are judged first by yield, second by cash flow. cash flow really is only important from a liquidity or flexibility standpoint.
The most effective way to evaluate investments (simplistically speaking), is to use the NPV (or IRR is also suitable) method. A basic explanation, with a litte accounting throwh in, would entail that:
1) Monthly expenses are netted out against revenues, and a yearly "property income" is determined.
2) This net amount is treated as an inflation adjusted annuity, and brought back at an appropriate discount rate. If you find that there are separate components that you feel will change at a faster or slower rate, then separate them and calculate them on their own.
3)Somewhat separate from the investing decision is the financing decision. Now we have to factor in the cost of capital for the entire purchase price (plus assiciated initial outlays). We are not concerned with the monthly "mortgage amortization" in NPV analysis. Money has a time value at any given point in time. If you wish to separate the components of debt(easy to determine) and equity (requires a litte thought) and assign individual costs to them, then a Weighted Average Cost of Capital can be determined.
Having said that, most will be happy to just assign to their cost of capital a percentage that lies between 2 numbers:
1) The yield on a GIC
2) the cost of secured debt
Once the entire purchase price has been interpreted through the cost of capital and the payments have been brought back in time to the present (do not adjust for inflation), this amount can be subtracted from the original number to arrive at Net Present value. If it is positive, then you are good to go. If it is negative, then you are not.
Just wanted to mention this because people often strictly associate RE investment as compared agianst mortgage payments.
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June 6th, 2010 at 9:46 am 204
In my previous post, I should have said "Inflation adjusted Perpetuity", not annuity.
My bad
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June 6th, 2010 at 10:01 am 205
@“A-sharp” Accountant: It's an important point that how an investment is financed doesn't change the investment's future cash flows. But… if I can borrow money on the cheap — even if for a time — it increases my total return, no?
I think the biggest mistake is extrapolating low financing costs over the asset's entire life (in this case decades) and not thinking what perpetually low borrowing rates mean for future cash flows.
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June 6th, 2010 at 10:13 am 206
@jesse:
You are right. Yes it does.
It is reflected in the "cost of capital" component in that it reduces the amount that is subtracted.
Keep in mind two things.
1)Cost of capital is best matched to the leng of expected investment holding time. ie, if you want to hold an investmet for 15 years, that is where you look on the yield curve. Ie, a homeowner should not be making long term investing decisions based on a 5 year rate.
2) Equity does indeed have a cost.
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June 6th, 2010 at 10:19 am 207
I simply cant imagine the quality of life after you pay 70% of your income for the housing costs. Those folks must be on the brink of starvation.
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June 6th, 2010 at 10:33 am 208
I just wonder…. are there any realtors that can be called respectable on this board? People have ripped I think all of them here. Do any of you respect any of them?
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June 6th, 2010 at 10:57 am 209
@Anonymous:
I had a realtor who sold my place in a weak market for $6000 total commission at a price that blew my mind.
He will die with my respect
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June 6th, 2010 at 11:05 am 210
I'm wondering 'where is the outrage?' Why are the normally screaming mad enviornmentalists dead silent about the oil catastrophe? Why are the ones who are supposed to be mad still calling it 'a spill' choosing the lesser of several more descriptive adjectives?
http://www.vancouversun.com/news/spill+hits+pelic…
I have a theory and some people won't like it. I am starting to think that the enviornmentalists and the usual suspects have gone dopey on this issue because it's being seen as a big black eye for Obama. The usually vociferous lefty's are so concious of how bad this makes their limp dick leader look that they have decided to keep shut even in the face of the worst disaster in history. Thousands of miles of coastline and uncounted thousands of marine life denizens are being wiped out and they're suspiciously silent? Why? Gotta be a reason. Is it, as I suspect, political. Has Greenpeace and the WWF decided to take one for the team on this? Disgusting. From the enviormentalist perspective this disaater in the Gulf, which Obama has said nothing about while frittering away out of the media is bigger than Haiti, it is bigger than Iraq, and you can hear a fat girl fart from across the room. Very suspicious.
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June 6th, 2010 at 11:20 am 211
If little Manhattan has this many ( officially almost 10,000) condos sitting empty that Buisnessweek speculates may be pushed into the rental market, then how many 'ghost condos' are sitting idle in the most overbuilt condo capital of the known unaffordable world ….Vancover? I would suggest just as many and more from the anecdotal reports we get from tower dwellers who complain that their buildings are 90% empty and 100% sold.
http://feedroom.businessweek.com/index.jsp?fr_sto…
With the squeeze on in China, prices and sales plumetting here, and more inventory coming on stream while rates go up nad personal debt exceeds any in any G20 country, is it feasible that rental inventory will go up in never never land?
I think we're going to be seeing a lot more Craigslist ads that say 'Ihave to sell……….help me.'
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June 6th, 2010 at 11:36 am 212
@Anonymous:
>>>are there any realtors that can be called respectable on this board?<<<
Very few, possibly 1 or 2.
Most realtors are douchebags, plain and simple.
In fact, there should be a prefix for realtors and real estate marketers similar to Mr. or Dr. and that prefix should be Dch.
As in Dch. Rennie spoke today of foreign investors in the Vancouver real estate market or Dch. Muir said we are entering a balanced market.
Seriously, just the fact that they trademark the word Realtor, a "profession" that requires 5 weeks of education by correspondence shows what kind of douches they are.
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June 6th, 2010 at 11:45 am 213
Dch.
LOL
BPOM cracks me up, quite often. Thanks.
—
Another thing:
Thanks to posters, and to The Pope, for the many interesting anecdotes throughout this Friday thread.
I'll be popping them up on VREAA over the next couple of days.
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June 6th, 2010 at 12:22 pm 214
@ "A-Sharp" Accountant
"He will die with my respect"
Jesus, man, I am not fond of realtors either, but by God, you don't need to kill him!
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June 6th, 2010 at 12:28 pm 215
@bridgeman: That was my first thought as well!
Strataman
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June 6th, 2010 at 12:51 pm 216
@realpaul: "I’m wondering ‘where is the outrage?’ Why are the normally screaming mad enviornmentalists dead silent about the oil catastrophe?"
Hanging their heads in despair? Let's face it, environmentalism (and science) has lost. Nobody cares. I'm surprised we don't have adverts telling us that oil is good for the birds. I'm sure there are plenty of people who would go on repeating it.
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June 6th, 2010 at 1:18 pm 217
Hard not to agree with BPOM's take on realtors.
Surely, to seriously embrace "professional" status after a 5 week correspondence course must be a joke even among their own members.
Wile some of them have honed their skills as bullshitters extraordinaire, most are probably too dumb to understand that.
Both can be found in abundace on the Johnny Horton blog where the sneaky ones are hiding behind anonymity, and the dummies are still striving for recognition.
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June 6th, 2010 at 1:36 pm 218
@rp1:
Well the environmentalists haven't been ignoring BP, as you can see from this:
http://www.greenpeace.org/international/en/multim…
If people are getting the impression that environmentalists don't care, I would suppose that's because the media are ignoring them. Whether that's a deliberate strategy or just the media's usual dumbness I don't know.
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June 6th, 2010 at 2:23 pm 219
I seriously doubt the enviros are so shocked and despairing they're keeping quiet.
If you like conspiracies, you might say the government is telling media to keep a lid on the greens, because such publicity would force their hand to take over the containment and cleanup job. Once they take charge of it, they will become responsible for it in all senses of the word, and they know it, so they want to distance themselves from it as much as possible and let BP keep making its own rope. They will ride in to the rescue eventually.
But the lack of environmentalist outrage is mystifying either way.
–
Back to RE, I wonder what the REAL condo vacancy rate is? With an owner, but unoccupied, not on market and not rented? With all these "investment" owners unable to sell their units to anyone at break-even, will they start becoming unwilling amateur landlords? Many people said we're going to see a marked increase in rental availability in the next 1-2 years, along with the corresponding rent price decreases, but just how many new units could we be looking for?
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June 6th, 2010 at 3:09 pm 220
@rp1: From the enviros I know, you are right. They are despondent, they have given up, and may even see the whole situation as beyond repair.
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June 6th, 2010 at 3:35 pm 221
@realpaul: How could you compare our lovely city,Vancouver with a dead one like Manhattan;Vancouver is a sought-after destination for wealthy Chinese officials and immigrants from all round the world.
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June 6th, 2010 at 3:43 pm 222
BP, Enviros and outrage…..
People get tuned out with too much negativism.
Most enviro groups have been outed as major corporations themselves, simply seeking donations.
I think the BP spill is so massive, people are just helpless. I saw local jurisdictions saying they were ready to take action , but feared they were overruled by other bureaucracies.
Obama gave BP far too much time….he should have had a contingency plan in place and then taken charge. I think this disaster will have far reaching effects on local economies. Maybe terrorists will now target oil platforms simply for the dramatic effect.
Goes to show you how useless the political elite is when the going gets tough.
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June 6th, 2010 at 3:44 pm 223
Thee is nothing magical about Vancouver….its simply over-rated and due for a wake-up from its trance.
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June 6th, 2010 at 4:09 pm 224
Can we stop talking about BP and the oil slick and focus on Real Estate? There are many other forums to rant about what they should or should not have done. Lets focus on douche bag realtors!
McLovin
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June 6th, 2010 at 4:11 pm 225
70% of Americans now think that real estate is a dangerous investment and you could loose money. Ask those 70% of Americans what they thought at the top of the market? I bet you anything they were all frothing at the mouth bullish on real estate just like 98% of the brainless idiots in this country also just like when Nortel was over $100 per share, people could’nt wait to buy more. We are dealing with a market that is about 20% based on fundamentals and 80% sheer stupidity. The stupidity could be poked and prodded in the past by the gov but even that has exhausted itself and we are a long way from election time. In other words the gov is screwed.
The increasingly rare bull on this blog keep saying that the Canadian correction won’t be as bad as the US because of recourse lending. Here is an interesting little fact for you: Florida, Ohio, Georgia, New Jersey, Michigan, Illinois and Nevada are all in the top 10 in forclosures and sales price decreases and they are all recourse states so you can see clearly that not only did it not do anything to stem the tide it may have even made it worse! The term “walk away” implys something intentional whereas the term “foreclosure” is a little voluntary don’t you think? Recourse lending just means that if you don't pay the bank won't fuck around, you're house is gone and sold. If you think about it in those terms recourse lending is going to exacerbate the situation to the downside.
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June 6th, 2010 at 4:14 pm 226
Double dip expected to show up as early as next month say John Mauldin. Stimulus didn't work ,the simultaneous release of positive jobs numbers on either side of the border was a sham.
http://www.frontlinethoughts.com/pdf/mwo060410.pd…
And now what? They tried zero rates, they tried give aways, the national debt is already getting attention from the IMF, personal debt is beyong anything in recorded history, house prices ditto. Whats left? Jacked up taxes and more subsidies like free daycare ( free up a few hundred a month to keep unrealistic prices up), deferred property taxes 9 another few hundred a month to prop up sky high monthly payments). I'd bet there is a hail mary coming out of the cunts in Victoria because of the shellacking their getting from Bill Van Der Zalms 600,000 man army of Hated Tax Objectors.
Is it the straw that finally breaks the camels back or will the government cynicism reach even higher by plunging the taxpayer into further debt with some kind of insane giveaway like 'no mortgage payments until 2015' like the Brick and the Car Jockeys to support Gordons buddies, the real estate pimps. Isn't it funny how many people love the idea the 'you can drive away without paying'. How stupid are those people, doesn't anyone know what APR means? I expect to see something even worse come down the pipe that 'free condos for unionista's'.
Besides the obvious politics of that scam why wasn't the MSM reporting the story of how the poverty protestors broke up Bob Rennies opening day at the OV party? Theres a new National Post series coming to 'expose corruption in the union driven social housing arena' watch for it. The reporter finds that instead of helping the poor, the union pigs from the city and special intrests were wallowing in the trough slopping up all the goodies for themselves. The forst installment was yesterday regarding the Woodwards building fiasco.
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June 6th, 2010 at 5:02 pm 227
How far will prices have to fall before it will be socially acceptable to feed realtors to lions and bears in the new suped up stadium downtown?
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June 6th, 2010 at 5:07 pm 228
@realpaul:
I never believed for one single minute that there was any recovery. Our government spent borrowed money to buy a little positive GDP and sold it to us as growth. Same with the US, they even had one giveaway after another to try and get people spending.
Now the stimulus is running out and were sinking again, only we're much more in debt after the fools in power sold out future generations.
After the next financial crisis there's going to be blood spilled, don't be surprised to see bankers hanging in the streets.
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June 6th, 2010 at 5:18 pm 229
real paul is right. It is sick how the biggest enviornmental catastrophe in history, even bigger than chernobyl is being ignored. And I think his theory is right.
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June 6th, 2010 at 5:20 pm 230
@“A-sharp” Accountant: "He will die with my respect"
Well, for me, my respect would also depend on HOW he sold it.
I'd still take the money, though.
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June 6th, 2010 at 5:42 pm 231
@other ted:
Got nothing on the Aral Sea.
Actually the whole ex-USSR is a catastrophe.
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June 6th, 2010 at 6:05 pm 232
Was at the Vancouver Resource Conference today and someone in the audience asked Danielle Park about Cdn Real Estate and Vancouver in particular…long story short, she thinks the market is substantially over-valued particularily in Vancouver…although she didnt give a %, she has recently mentioned 20% over-valued in Canada and Vancouver worse off…she closed off by saying we aren't different here.
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June 6th, 2010 at 6:10 pm 233
@Chincy: I registered to hear her speak but was unable to attend. Thanks for the anecdote
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June 6th, 2010 at 6:30 pm 234
@Chincy: Danielle Park was in vancouver. Must have been lineup around the block full of horny bears
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June 6th, 2010 at 6:40 pm 235
Patsan, remember if the owner sells the property and evicts you, he (or she) owes you one free month of rent… It's the law… They have to give you two months notice and you can move it up a month if you want to, and they still have to give you the free month.
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June 6th, 2010 at 11:59 am 236
[...] Miracle at vancouvercondo.info 4 Jun 2010 8:20 pm – [...]
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June 6th, 2010 at 7:07 pm 237
Peter Pan that is not correct. A landlord who sells a property "owes" you three months notice and nothing more.
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June 6th, 2010 at 7:08 pm 238
Just looking at stats on Zillow, the US crash still has no end in sight and most areas continue to fall in price. Nationwide prices are down 0.3% mom and 3.8% yoy.
The highest priced metro area is San Jose, with a detached price of $617K. The median household income there is $80K.
In metro Vancouver, the benchmark detached is $810K – 31% higher. The median household income is $60K – 25% lower.
The devastation that will take place here is going to be a sight to behold and one for the storybooks.
http://www.zillow.com/local-info/
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June 6th, 2010 at 7:17 pm 239
Last word from me on oil. Worst environmental catastrophe ever? Check out this graph and see for yourself. It's marginal in the grand scheme of things.
http://www.newsrealblog.com/wp-content/uploads/20…
This doesn't even include the spills during WWII, when the deliberate sinking of oil tankers led to spills on an almost daily basis for years.
Spills aren't even the biggest source of oil in the oceans:
"Between one-third and one-half of the oil in the ocean comes from naturally occurring seeps. These are seafloor springs where oil and natural gas leak and rise buoyantly from oil-laden, sub-seafloor sediments that have been lifted close to the earth’s surface by natural processes."
It disperses, gets broken down by bacteria (it's a derivative of plant matter after all) and the oceans recover quite nicely thank you.
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June 6th, 2010 at 7:54 pm 240
Peter Pan,
I have a signed lease agreement that ends on Novemeber 30. According to the BC Tenancy Act, "a landlord may end a tenancy… by giving notice to end the tenancy effective on a date that must be, if the tenancy agreement is a fixed term tenancy agreement, not earlier than the date specified as the end of the tenancy."
I hope that my landlord knows that and he needs to try to find an investor buyer who would pick up the lease. If he gets a buyer who wants to live in the house, than the landlord would probably have to oil the wheels to get me out.
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June 6th, 2010 at 7:55 pm 241
Asian markets getting pounded….again…
http://finance.yahoo.com/intlindices?e=asia
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June 6th, 2010 at 7:58 pm 242
@chip: Concentration over time matters.
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June 6th, 2010 at 8:12 pm 243
chip – you didn't answer my question. Your comments on oil – are they out of personal interest, or another agenda?
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June 6th, 2010 at 8:28 pm 244
Long time lurker… infrequent poster, looking for some advice/reality check:
My family and I sold our yaletown condo in June 2008 and are renting downtown while we wait out (for) the crash. With a new addition to the family, we are thinking of moving up from a 2 bed to a 3.
Our household income is 125k, we have no debt and a substantial amount of savings (400k) for a downpayment.
Here is my question: Is $3100 / month too much for us to pay for a 3 bedroom condo downtown? I know the rule of thumb for shelter is 30-40%. But that is usually quoted for costs of ownership, not 'throwing your money away' renting.
The budget says we can swing it, but I'm looking for some validation here, or a reality check that tells me it's way too much. We currently spending $2400 month for a 1200 sf 2 bed. The $3100 place is nicer, newer, and 1500sf.
Thanks for any advice!
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June 6th, 2010 at 8:29 pm 245
When food costs rise here people apply for another credit card and pretend its not happening. Its another piss off when milk cheese meat bread eggs pasta rice ketchup etc etc go up 40 to 50% but the government uses the local uncaring attitude as a lever to screw on new taxes and fees because people here are entirely complacent. Its another fallacy of debt and the ability of government to lie away the facts about inflation.
But……..when this same inflation is exported into the third world where people have no credit cards and pay day loans this 50% annual food inflation is causes direct and immediate starvation.
http://news.yahoo.com/s/ap/20100607/ap_on_re_as/g…
We are watching the government create this runaway inflation here by its subsidy of intrest rates and debasement of value. The wealth effect creates a peter pan world for massive numbers of people who think they're getting ahead as they waych their real estate appreciate 20++% every year while they turn their heads away from the fact that the cost of living is rising even faster.
The fact that your 'average' Canadian now carries 148% of debt points to the effectiveness of the governments propaganda. Even with real estate riches the average person is hurtling towards poverty. It's like watching a class room of retarded kids trying to do simple mathematics when you know its completley beyond their grasp. 100% plus 100% equals a million!!!!!! yeahhhhhhhhhh!! Did I get it right teacher? Yes Johnnie, buy another condo, it's worth a million dollars cause we say so.But teacher says little Johnny, my bananas cost $50 dollars a pound. Thats OK johnny don't look at that, look at the granite counter tops instead.
And when Johnnie goes broke he walks away. But when the same reality is walking the aisles of a market in the third world…….its a differant story.
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June 6th, 2010 at 8:30 pm 246
Just to clarify… I think the condo is 'worth' the asking rent.
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June 6th, 2010 at 8:43 pm 247
Ooh, our favorite garage apartment is still available, and the price is reduced by a whole $100!
http://vancouver.en.craigslist.ca/van/apa/1775897…
Please, won't someone rent this gorgeous studio and help a landlord pay his mortgage. Please note! It comes with an under-house bin for your comic book collection!
"In the backyard, under the owner’s house, there is also a very large roll away storage bin that is exclusively for renter use (3ft X 9ft X 3 ft deep). This bin is off the ground and comes with a lock. "
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June 6th, 2010 at 8:44 pm 248
@girlbear:
Godzilla rampaging through Asian capitals again!
Aiya!!!
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June 6th, 2010 at 8:52 pm 249
@rubberduckie:
The owner of the precious little laneway shack sounds snotty.
We could have a little fun if everyone here e-mails her asking if it's still available, then don't respond to her.
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June 6th, 2010 at 8:59 pm 250
@Best place on meth:
Good lord! Shanghai stock market now at 52 WEEK LOW!
Thank god they just broke for lunch – carnage paused for noodle break.
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June 6th, 2010 at 9:02 pm 251
Hello I am a long time lurker on theis blog but seldom have commented. I have a two part question for the collective blog "brain trust".
1. I currently rent a house on the Island where I have been for the last 3 1/2 years. My landlord mentioned that they where thinking of listing the property. I am on a month to month rental agreement. What sort of notice are they required to give me? She is a realtor and I am sure she sees the market declining and she has decided to sell. My spouse is exerting all sorts of pressure to buy a house so that we don't have to move into another rental. You all know the drill here.
2. When I look at listings in my target area here in Nanaimo in my price range there are currently 45 listings and have been 9 sales since 1 January 2010. if we calculate 1.8 sales per month then we have 25 months of inventory and should see negative pressure. Is this correct?
Any collective input would be appreciated. Thanks in advance.
Thanks in advance.
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June 6th, 2010 at 9:05 pm 252
They sound snotty so we should all harass them? Settle down.
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June 6th, 2010 at 9:28 pm 253
I think it's 2 months' notice but I would ask your landlord to limit the showings and ask for a discount in rent. If they want the place spotless for a showing they can hire a cleaner for you. You pay decent money for the rental and if they want to infringe on your normal course of life, they can pay for it.
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June 6th, 2010 at 9:39 pm 254
Oh NO! House hunters parked in front of my condo building
http://www.youtube.com/watch?v=pCVbyY2ZTjA
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June 6th, 2010 at 9:39 pm 255
@Island Dude: Hey Island Dude, here's a link to the Residential Tenancy Act. It covers off everything you need to know. All renters and landlords should be well versed in this.
http://www.bclaws.ca/EPLibraries/bclaws_new/docum…
It's 2 months or less if you agree to it. Here's the quote:
"Subject to section 51 [tenant's compensation: section 49 notice], a landlord may end a tenancy for a purpose referred to in subsection (3), (4), (5) or (6) by giving notice to end the tenancy effective on a date that must be
(a) not earlier than 2 months after the date the tenant receives the notice,"
Here's subsection (5)a referred to above:
"(5) A landlord may end a tenancy in respect of a rental unit if
(a) the landlord enters into an agreement in good faith to sell the rental unit,"
Cheers! Tell your wife to chill.
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June 6th, 2010 at 9:43 pm 256
@Best place on meth:
Shanghai Exchange means nothing really. Its the Hang Seng that matters…ooops they ain't doing so well either.
Seems like gold is the ONLY thing holding its value. it can go down to 800.00 and still be in a bull market. As Europeans worry about the € they flock to real money, gold.
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June 6th, 2010 at 9:48 pm 257
@Veej: Aren't you giving an edge to Vancouver real estate automatically? Yes Buy Vancouver real estate or else Americans and Britishers,and Europeans will countinue to stack their money on Vancouver real estate.
USA and their Real estate prices are history because it use to be just Bin Laden and Professor Robert Shiller who have killed American Psychology.Now a days Every Single bloggers,Movie Director,Tonz of scientists and NASA itself are killing their country with Meteor Bombs,Volcanic Eruptions,Tsunami,Natural Disasters,and Global Warming.
Good time to invest in Vancouver because we don't have team of mentally ill organisation called The Wall street coverage on Van R.E.
We don't have son of bitch Motley Fool,He does not live in Vancouver,We have only VHB the old time loser.Run Buddy Run.
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June 6th, 2010 at 9:49 pm 258
What keeps Bob Rennie and Home prices up?
http://www.youtube.com/watch_popup?v=6NPF0A_vGC4
anyone figure this out?
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June 6th, 2010 at 9:58 pm 259
@No More Gordocracies: yeah, their is a high tension steel bar planted in the base, that comes up through the heel of his shoe, up the back of his pants leg and supports his buttocks and back. He's essentially sitting in a high tech minimalist reclining chair that is INSIDE his clothes.
Very neat.
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June 6th, 2010 at 9:59 pm 260
their = there. obviously. didn't proof read it.
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June 6th, 2010 at 10:11 pm 261
@Best place on meth: BPOM, you have one of the best sense of humors I have seen. Look forward to your comments.
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June 6th, 2010 at 11:07 pm 262
@Best place on meth: They couldn't finish their soup because it kept filling up with tears?
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June 6th, 2010 at 11:49 pm 263
@Best place on meth: I'm sure the laneway house people are average enough, and I don't think they're crazy to try "testing the market" with a higher price then coming down.
However, I think that on Craigslist, the more effort you put into a coherent listing (i.e. more than 2 sentences), the more harm it does you. Makes you sound desperate and implies the unit is overpriced.
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June 6th, 2010 at 5:20 pm 264
[...] June 2010 · Leave a Comment Patsan at vancouvercondo.info 4 Jun 2010 11 p.m. [...]
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June 7th, 2010 at 9:19 am 265
Thanks to Vansanity and Jesse for the input.
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