Lots of property to choose from
The news is getting out there about the rising real estate inventory in Vancouver:
“We are close to that level where the seller either has to discount or lower the price or take the listing off the market,” said local realtor James Wong of Sutton West Coast.
The Vancouver-based Malaysian who sells properties in the neighboring city of Richmond told Xinhua that not all sellers were desperate to sell and could possibly delist their properties.
“They just want to catch a good price for what is perceived to be the value of their home. But most of them at this point have already missed the peak,” said Wong.
Full story in the english version of Peoples Daily Online.
June 24th, 2010 at 8:22 am
Gordon C. Says:
And on July 31, you can tell us all how much more profitable the HST has made you.
Any expense dollars spent by a company that are HST eligible are now 7% cheaper, as they get the HST back.
Yes, if you only charge GST and now have to charge HST your customers are going to have to pay about 6.25% more than they did previously, but if this doesn't decrease your business, you're going to end up being better off with the HST recovered on the expenses you pay out.
June 24th, 2010 at 2:42 am
@Anonymouse:
And WHY are they looking to unload? Because they see a bust coming, of course.
These people are not going to delist – they are going to drop the asking price until they get a sale. THESE are the people who drive the market down.
VHB is correct – almost all delists are from people who were going to buy another property.
Huge number of price drops taking place in Vancouver BC | Vancouver Condo Info Says:
June 24th, 2010 at 2:23 am
[...] number of price reductions we’re currently seeing. Yesterday Paulb shared numbers that showed 232 new listings and 56 sales, but nearly 3 times that number of price changes at [...]
June 24th, 2010 at 12:04 am
@“A-Sharp” Accountant:
“-We have rich foriegners so it wont crash”
This is awesome that you posted this. Every city I’ve been in seems to have this mysterious and ambiguous group of out of towners that are running up the price. The funniest so far was Calgary had rich people from Kelowna and Kelowna had rich people from Calgary.
June 23rd, 2010 at 11:57 pm
@sluggo: I dunno, sure dave likely posts sometimes to “stir the pot.” At the same time he seems to be a good debater and good conversation typically ensues with his involvement (ex. look at this thread).
June 23rd, 2010 at 11:40 pm
WaPo gets it wrong. It's amazing how a reputable paper could print such garbage.
http://tinyurl.com/39asoax
June 23rd, 2010 at 10:16 pm
According to some of the regular posters at House Hunt Victoria, Victoria sales are cratering.
June 23rd, 2010 at 9:49 pm
Well, not much of a name;
You contradict yourself so many times through out this HST thread, its difficult to discuss this with you. I'm guessing (because I have to as you are unclear through out) that you sell retail products. Where the HST has a new affect is on service industries.
The accountant, the barber, the plumber, the real estate agent. They now will charge an additional 7 percent on their services in addition to the current 5%.
But somehow, in your world, they make more profit? Well, then by extension why not raise the HST to 50% and we will all be rich. Your retail business already pays PST and GST of 12 percent, and on July 1, you will pay 12% HST. So how has this made you more profitable? Afterall, clients will not want you not to raise the total price that they pay? Just as you think your suppliers will not increase the cost to you? Or maybe you think your suppliers will lower their price and you can just pass it all onto your clients?
Anyway you look at it, the HST will spike the inflation rate – wait and see. And on July 31, you can tell us all how much more profitable the HST has made you.
June 23rd, 2010 at 9:29 pm
Take a look at the weekly new home sales (US) graph at the link I provide below. A few weeks back, some of you bulls ridiculed the concept of "moving demand forward." Check out the last six months of the aforementioned graph and you'll see a textbook example. Why did sales spike in the first few months of the year? Government policies that were temporary in nature. What did this do? Well, the increase in sales were not the result of extra demand; they were the result of individuals who were always wanting to buy, finding it economically rational–following the announcement of the policy–to purchase before, rather than after, the policy deadline.
http://www.nakedcapitalism.com/2010/06/worst-home…
June 23rd, 2010 at 9:27 pm
Anonymouse,
CMHC insurance covers the lifetime of the mortgage. So underwater owners will still get renewals without extra cash (since the bank has no risk). If they sell and move up they will need to pay the difference to the bank as well as come up with a down payment for the new place.
June 23rd, 2010 at 9:23 pm
@“A-Sharp” Accountant: You'll enjoy this interview…Now's the "Absolute Best Time" to Buy a Home: Coldwell Banker CEO
Tech Ticker: "I have never heard you or anyone in the real estate industry warn people 5 years ago that prices look frothy. You've been in the business for 35 years. Was there anytime in those 35 years that you would have told people that now is NOT a good time to buy a house?"
Coldwell Banker CEO: "Uuuummm. No. But I have never been able to say that now is the BEST time."
HAHAHA!!!
June 23rd, 2010 at 9:20 pm
@Whitebear:
Let me guess… gold?
June 23rd, 2010 at 9:16 pm
@Anonymouse: From my vantage point, the catastrophe has *already* happened to Vancouver. We have the most unaffordable real estate in the world. It's costing the city in ways greater than just the cost of RE.
June 23rd, 2010 at 9:07 pm
@VHB: Oh I missed the context of move up buyers.
Since the topic today is about HST I have to say I've been getting a kick out of some of the developer advertising. I saw one ad along the lines of "hurry beat the HST" only to look at the prices and find that they were condos in the $300k range, in which case the implementation of HST has no impact. For a nanosecond my thought was "stupid developer" but then I realized the genius of it. Since a smart buyer would realize that the advertising was B.S. the developer was essentially targeting the dumb gullible potential buyers. These types of buyers are easier to sell to. Although I guess the HST would apply to any broker fees, legal and closing costs but I can't imagine this would add up to much on a new property purchased straight from the developer.
On another topic, perhaps someone can answer this. Let's say a buyer buys a $400k condo, gets a 3 year mortgage. 3 years later the mortgage comes up for renewal. Let's assume the value of condo falls to $350k and let's say due to a low D.P. and 35 year amort, the homeowner is in a negative equity position. When renewing the mortgage does the homeowner have to cough up cash to get themselves in a positive equity position (or even back up to 5%) or will the bank/cmhc renew "as is" if they are under water?
Same question if after 3 years someone is looking to sell and move up to another property. Do they now have to come up with enough cash to get them to 5% D.P. on the value of the new place they are buying?
I think the answer to the first question in particular will have implications on future prices. If homeowners have to cough up cash when renewing or moving up, there will be more distress.
June 23rd, 2010 at 9:05 pm
@VHB
As I’ve said earlier, if anything, the more despair the US housing market, as evidenced by today’s headline that new sales in the US dropped 33%, the more desperate the US administration will be. That’s why it came back to what the following author had to say.
http://tinyurl.com/343lg8t
Again, no one said this is the right approach but it’s logical to assume that desperate governments commit serious mistake that will haunt everyone for the foreseeable future.
The housing market over the years is all about the ballooning of debt. In fact, the drop of the US housing market coincides with the collapse of the higher powered money like the M2 or M3. And, the reason that housing still sucks so much in the US is because the money that bailed out the banks are still sitting as extra reserves, earning interests from the government. That’s why one has to pay attention to what a desperate government is capable of. What if the government loses patience and stop paying interest to the banks on those extra reserves? The banks will then lend that money out, multiplying the total money by 10x for the time being. (Fractional banking money multiplier effect)
That’s why I said if everyone is prepared for this scenario. It’s not about if bears or bulls will win the argument with respect to the Van housing market. It’s about thinking one step ahead, about how sinister governments are and how to protect your net worth if governments smokes its currency.
(My opinion: I am of the opinion that government will explode the money supply exponentially in the future. And nominal prices of housing may go up while real prices will drop 50% easily. And I believe I am prepared for this situation)
June 23rd, 2010 at 9:00 pm
Even creepy mansion sales are down!
http://tinyurl.com/36dfg8n
June 23rd, 2010 at 8:52 pm
BTW, today's 56 sales is the LOWEST daily sales figure this year in my records going back to March 2nd.
June 23rd, 2010 at 8:41 pm
@Anonymouse: You're right. My post was about move-up buyers.
June 23rd, 2010 at 8:38 pm
@realpaul:
Yes, Realpaul that's right. After 5 years of post-secondary education those parasites demand the outrageous sum of $45,009 to start teaching your children. Un-fucking believable! Greedy parasites! I'm mean, what with the paid overtime they all "claim" to be doing after 3pm they must all be making six figures! Ban teachers i say!
What's that? They don't get paid overtime? Oh, in THAT case i must respectfully disagree with your position on this one.
June 23rd, 2010 at 8:36 pm
Holy cow!
350 sales so far this week, will there be under 600 for the week (low 700s last 2 weeks)?
This would be a monthly rate of 2500 or MOI of 8!
June 23rd, 2010 at 8:36 pm
@oneangryslav2:
It's easy for all bears to say. Yeah, it's also easy for me to say in 2010. However, when you want to buy a certain house or condo to move up to, you want to get the maximum price you can get from the current house.
Psychologically, it's not that simple for homeowners to just lower the asking price.
June 23rd, 2010 at 8:20 pm
@VHB:
[quote]SO, what this means is that every single time one of these guys delists, there is a corresponding and commensurate decrease in the number of people looking to buy. The supply decrease is exactly offset by the demand decrease.[quote]
This argument does not hold for investors in multiple properties who are simply selling off properties and not looking to re-invest. Nor does it hold for sellers moving out of this market to another. There are probably a lot of listings out there from investors looking to unload. So there is no offset of supply and demand in these cases.
June 23rd, 2010 at 8:15 pm
@Not much of a name…: sorry man, you're out to lunch on this one. right now the PST collects roughly $6B a year in revenue in BC. This is going to jump to $20B a year in revenue, yes that's correct $20B. Trust me, I know this from an inside source. It's got f*** all to do with increased corporate taxes from lower input costs. It's a cash grab, plain and simple.
June 23rd, 2010 at 8:12 pm
Best 5 minutes you will ever read. the NAR writing research reports convincing americans (in 2005) that there will be no decline in Phoenix.
It's all there
-We have low interest rates so it wont crash
-We have rich retirees so it wont crash
-We have rich foriegners so it wont crash
-Price/rent and Price/income does not matter
-The economy is strong
-Buy now or be priced out forever.
Compare directly with Gregory Klump's analysis.
http://web.archive.org/web/20051126141240/www.rea…
The NAR was either using Jimtan's model, or was looking out of the wrong end of the telescope.
June 23rd, 2010 at 8:11 pm
@VHB:
[Quote]I enjoyed the back and forth with the anonymous 24 year old professional yesterday. Anyway. One bit he said deserved more scrutiny:
Two errors here.
1) **CMHC will keep up its lending practices during a bust.** No. CMHC, like all insurers, give you umbrellas on sunny days and take them away when it rains. Once CMHC posts its first big losses, they will tighten their lending criteria. Goodbye 5% downpayments. Yes, the horse will already be out of the barn, but they will be under huge pressure to ‘do something’ to staunch the bleeding of their balance sheet. Credit **tightens** in a downturn; it doesn’t loosen.
2) **it can’t happen because it would be a catastrophe; I don’t want it to happen**. Sorry, kid. What you ‘want’ is irrelevant to what will happen. Also, yes, it would be a catastrophe. That’s why we’ve been going on about it. But you know what? This ain’t Disney. Catastrophes happen."[/Quote]
================================
First of all, that wasn't 24 y/o professional who stated those arguments. I did. I'm pretty sure Professional Anonymous is no longer posting here after the nasty shit you guys directed his way for what were personal anecdotes and opinions that were no more unreasonable than the ones frequently posted here. It was funny, you all tried to make him look foolish but you only succeeded in revealing how mean-spirited many of you are.
Anyhoo, as to your arguments.
"Credit **tightens** in a downturn; it doesn’t loosen."
Really? Did it tighten during 2008 and 2009? There was a downturn and CMHC continued to roll and did not tighten lending criteria. The biggest recession EVER in world history and a serious decline in housing prices…and yet still no change to lending criteria to the point where easy lendiing even helped fuel a rebound. They tightened in 2010 AFTER the market rebounded (mostly to stem a continued bubble, at least that was the common theory).
My argument is that CMHC financing has helped to keep prices artificially high, I believe all of you here would agree with that. I am saying that the presence of CMHC delays or diminishes the downturn as long as they are backstopping the banks. Yeah, if there is a major economic catastrophe (not just a regular downturn) then all bets are off. Personally, I don't think it will get to that point. But I actually admit I could be wrong.
**it can’t happen because it would be a catastrophe; I don’t want it to happen**. Sorry, kid. What you ‘want’ is irrelevant**
What I "want" is irrelevant? Gee, no shit. Thanks for declaring the total fucking obvious. As for there being a financial catastrophe I'm not saying that it can not happen. I am saying I don't want it to happen. Unlike some people I am not a nasty misanthrope who wishes ill on everyone around me and prays for the financial destruction of my own country. I also recognize that in order to buy a property at a 40% discount, I will need (a) a job and (b) a lender to provide the mortgage. Both of those will be hard to come by if the Canadian economy crashes.
It amazes me some of you are SO SURE about what is to come to come. To the point that you will mock anyone who states a contrary opinion (or maybe you just like to mock people who make $100k?). Do you have a crystal ball? Because that crystal ball sure wasn't fucking working the last 10 years, was it? For people who have been so wrong, the fact that you guys are SO SURE that you will be right shows a serious lack of self awareness. Maybe Professional Anonymous will be wrong, I don't know. Maybe I will be wrong. But it amazes me that that the posters here can't even acknowledge the possibility that they also might be wrong.
June 23rd, 2010 at 7:52 pm
@Anonymous:
Nonsense! Had you lowered your asking price, you would have easily sold the place.