Friday Free-for-all!
It’s Friday and that means it’s time for our regular end of the week news round up and open topic economic discussion thread! Let’s hop to it with a few recent stories to kick of the chat:
-Developers push wave of presales into slowing market
-Fairmont Residences price chops 40% – Rennie slashes again.
-10 worst first time homebuyer mistakes
-Central Bank lowers forecast, raises interest rates
-BOC rate increase to have little effect on real estate
-Once again the Irish are leaving home
-Boston luxury condos at big discount
-UK house prices to drop 20% by 2012?
-14 charts for the Chinese housing bubble
-US Home sales drop 5.1% in June
-
So what are you seeing out there? Post your news links, thoughts and anecdotes here and have an excellent weekend!
RSS 2.0 comments feed. Both comments and pings are currently closed.
July 23rd, 2010 at 2:27 am
“The expected increase of the overnight lending rate by the Bank of Canada on July 20th 2010 will have little effect on the housing market, says Peter Kunt, one of Canada’s top mortgage brokers.”
Ah Peter, I just love these kinds of statements that show that not only do you pricks miss the spirit of the BoC’s intent to cool consumer spending but at the same time publicly defy the Bank and challenge them to do even more until the your arrogance is smashed and your back is broken.
These were the same kinds of statements that provoked the Bank of Australia to continue to raise rates over and over with the express purpose to kill housing speculation and in an effort to drop homes prices even in the face of strong protests from rich homeowners.
Read:
“Australia’s central bank underlined its determination to reduce monetary stimulus on Tuesday when it lifted its benchmark interest rate from 4 to 4.25 per cent, its fifth such rise since October.”
“Ready for a fall
June 7, 2010 – 12:53PM
Rates are on hold but the housing fire could already be out.”
“The renowned value investor and founder of global investment management company GMO, Jeremy Grantham, says both the British and Australian housing markets should decline by about 40 per cent. If they don’t, he says, it will be the first time in history that a bubble has not behaved in such a way.”
All those quotes are from:
Australia Raises Interest Rate To 4.25%
http://www.housepricecrash.co......pic=144506
So Mr Kunt, please keep these comments a coming because the your precious housing market is like the big zit on your shoulders……and the BoC has one of the pins that will pop it.
Buh Bye Peter
July 23rd, 2010 at 2:33 am
June Unit sales
1995 = 1997
1996 = 2424
1997 = 2315
1998 = 1775
1999 = 2446
2000 = 2033
2001 = 2914
2002 = 2768
2003 = 3643
2004 = 3642
2005 = 4485
2006 = 4064
2007 = 4336
2008 = 2478
2009 = 4319
2010 = 3046
July = UNITS = %Sales to listings
1995 = 1978 = 42%
1996 = 2100 = 39%
1997 = 2303 = 46%
1998 = 1816 = 44%
1999 = 2181 = 58%
2000 = 1710 = 48%
2001 = 2737 = 73%
2002 = 2759 = 67%
2003 = 4140 = 88%
2004 = 3114 = 62%
2005 = 3825 = 88%
2006 = 2802 = 61%
2007 = 3955 = 76%
2008 = 2215 = 34%
2009 = 4197 = 80%
2010 = 1637 = 49% *** July 22
July
“NEW” unit sales
YEAR= UNITS = %Sales to listings
1995 = 296 = 37%
1996 = 442 = 45%
1997 = 350 = 38%
1998 = 311 = 61%
1999 = 298 = 76%
2000 = 205 = 52%
2001 = 288 = 87%
2002 = 221 = 69%
2003 = 488 = 110%
2004 = 343 = 79%
2005 = 724 = 134%
2006 = 445 = 80%
2007 = 503 = 70%
2008 = 215 = 36%
2009 = 441 = 74%
2010 = 96 = 25% *** July 22
July 23rd, 2010 at 2:38 am
Recovery short lived as market slumps again
By Graeme Powell
Updated Tue Jun 1, 2010 1:53pm AEST (Australia Eastern Standard Time)
“The Perth housing market has slumped again just 12 months after showing some signs of recovery in the wake of the global financial crisis.
People who have been trying to sell their homes have reported that not one person has turned up at the home open……
…..Mr Airey says any signs of life being shown by housing markets across Australia have been stopped stone dead by the rate rises.”
http://www.abc.net.au/news/sto.....915162.htm
So just like potassium nitrate could cause impotence, rising interest rares will deflate Mr. Peter’s housing hard-on.
July 23rd, 2010 at 5:36 am
From the 10 worst homebuyer mistakes:
Agents, even with “ethical rules,” only get paid if someone buys. If that’s not a fundamental conflict of interest I don’t know what is.
July 23rd, 2010 at 6:16 am
@jesse:
You’re being too kind.
Substitute “car salesman” for “Agent” and you’ll see how ridiculous this is.
As you pointed out, RE agents’ ONLY incentive and ONLY professional skill is getting a sale. The very idea of a buyer hiring a RE agent is absurd. If a buyer wants someone to negotiate in his interest, he should hire someone whose profession is to represent clients’ interests in an uncompromised manner. Such as a lawyer, which a buyer needs anyway.
When I buy, I intend to go straight to the seller’s agent and tell him that if he wants to sell to me, he will have to give me the buyer’s agent’s split of the commission – because I’m my own agent.
July 23rd, 2010 at 6:25 am
“For consumers looking to enter the real estate market, Kinch has some good news. “We should see a summer slowdown that is typical of any summer market. Prices should see a mild correction of 2-3%.”"
“Peter Kinch is the author of The Canadian Real Estate Action Plan: Proven Investment Strategies to Kick-Start and Build Your Portfolio (Wiley; June 2010) and the founder of The Peter Kinch Mortgage Team and the PK-Approved Dominion Lending Centres network of brokers across Canada.”
I think Peter, is trying to tell us that we better hurry and buy.
Peter of course is an objective professional observer, and if he calls for “a mild correction of 2-3%.”, you can be sure there has never been a better time to buy.
July 23rd, 2010 at 6:59 am
@patriotz: Why not just pay a Realtor an hourly or fixed rate like a lawyer or home inspector? Or is that too out of the box?
July 23rd, 2010 at 7:21 am
@jesse:
Why would I (as a buyer) hire someone whose training and career experience are oriented solely toward making a sale and collecting a commission? Would anyone hire a car salesman on an hourly or fixed rate to help them buy a car?
July 23rd, 2010 at 7:24 am
Spot The Speculator #6
“I plan to live there, renovate everything I can, then sell in a year. I have a close friend who has been doing this for a living.”
http://wp.me/pcq1o-177
July 23rd, 2010 at 7:43 am
@patriotz: “Would anyone hire a car salesman on an hourly or fixed rate to help them buy a car?”
If their ONLY remuneration comes from giving me good advice regardless of what I buy, and they have a reputation to consider, then yes. Maybe it’s a bad comparison, but I have a family friend who is a mechanic. I went used car shopping with him and he gave me unbiased advice on which cars to consider buying and how much to pay.
While I would never trust anyone in Vancouver to give me advice on how much to pay for a piece of real estate (due to what I consider to be an inherent and surprising general misunderstanding of how it is valued), I would still accept and pay for seasoned advice on building quality and contract negotiation and terms.
July 23rd, 2010 at 7:43 am
@jesse:
There are some agents with speciaized knowledge…but on a general level, it seems to me like the value they provide is access to the MLS data.
that is the core of the value they provide. The main problem with this, is that many people do not see the $10,000 value in a database search. Because of this, realtors have added a lot of things into the package that do not actually provide value.
Do I need someone to drive me around?
Am I not really truly capable of negotiating my own sale?
From my perspective…someone who has and will continue to justify every hour charged on a cost/benefit basis…I cannot help but wonder how the hourly rate model would allow realtors to make much money, since the part that actually has value is a fairly quick and simple task.
July 23rd, 2010 at 7:44 am
@Inventory:
June sales were down 30% year over year.
July sales will be down closer to 50% year over year.
I may have to call up some of my favorite real estate agents just so they get to hear the phone ring.
July 23rd, 2010 at 7:51 am
@“A-sharp” Accountant: “the part that actually has value is a fairly quick and simple task.”
Well then they get more clients. A lawyer doesn’t make $10K per client but has many more clients. And yes that means fewer Realtors on the buy side.
On the sell side, as I think you have agreed with in the past, there is good reason to have a commission structure.
July 23rd, 2010 at 8:00 am
Ronald Coase was an economist in the 30s who came up with the CoaseCost – the theory that the real cost of anything is in it effort to organize. The CoaseCost of real estate transaction use to be quite high because it involves an agent manually searching through listings.
We’re at a point right now where the CoaseCost has dropped dramatically thanks to the Internet, but realtors have managed to keep charging high rates based on walling off access to the data.
This wall is leaking like a seive right now and I think many Realtors are about to be blindsided by the collapse of this wall. Many will be shocked when the value of their labor is rebalanced to it’s actual value.
July 23rd, 2010 at 8:04 am
@Goodnight Moon: “but realtors have managed to keep charging high rates based on walling off access to the data”
They charge high rates because buyers keep paying them. Why? Yes, because they have previous sales information at their fingertips and buyers don’t know how else to get it (there are ways of course). But that premise is based entirely that buyers care what some other idiot just paid for a house. If the price you are willing to pay is based upon spot market rates, you’ve already lost.
July 23rd, 2010 at 8:34 am
@“A-sharp” Accountant:
Don’t forget the annual picnic invitations, and gift basket when you make your purchase/sale!
July 23rd, 2010 at 8:42 am
I think it’s fair to say that there are some RE agents out there that are better than there peers. Agents that are more successful, sell more units, make more money, and are just generally more skilled than the competition.
by that reasoning, there must be SOME value in an agent that is good at his/her job; for a buyer OR a seller.
If agent A is better at his job that agent B, then there’s a good chance that he’s better at it than me as well. That doesn’t justify the ridiculous commissions they get, but to completely write off that entire profession as useless seems a little ignorant. Even if it does only take a 6 week course to get certified.
As a first time buyer, I’m guessing an agent that has participated in a couple dozen RE transactions is going to have at least a little insight into the process that I do not.
I think we’re entering a market where buyers and sellers, with the help of a lawyer, could start getting creative with agent contracts. Consider as a buyer a 12 month contract for $10K, you show me at least x units within my criteria per month, manage the communications with the other agent, booking the appointments, send me the addresses and times, yada yada yada. You get a $5K bonus if I buy (so, you’re going to put as much downward pressure on price as you can, to entice me to make the purchase).
Everyone hating on agents are talking about how their interests aren’t in line with your own, and that you’re smart enough to do it yourself. But you’re dumb enough that you worry about getting sold on a shitty deal by your OWN agent? really?
July 23rd, 2010 at 8:43 am
I agree with what has been posted here; the services rendered by a real estate agent working on the buy side are completely disproportionate to their commission. That is saying something, given that the sell side commission is completely out to lunch in the first place.
You are actually more likely to achieve a discount on the price if you enter the transaction without an agent. Although I like the idea of telling the selling agent you want a real estate commission, it’s unlikely to happen.
What I would do is tell the selling agent that the final price is to be discounted by the amount that would have been payable to the buying agent. In this manner, you can count on the selling agent to act like a typical selling agent (ie greedy and selfish, representing themselves first and foremost at all times).
Because they would continue to double end the deal, they would be much more likely to try and convince the owner to drop the price. We all follow the logic.. a double ended deal at a slightly lower price would be better for the SA than would be a single sided deal at a slightly higher price.
For those who are truly unsure of broader market conditions, there are many reputable appraisers out there who could give you an UNBIASED and comprehensive evaluation of current market conditions for a fraction of what a buy side commission is.
July 23rd, 2010 at 8:45 am
http://www.businessinsider.com.....z0uQ1DvJ00
Interesting article about the China bubble… so Vancouver.
July 23rd, 2010 at 9:13 am
@AACI:
“Disproportionate” is not the right word. It’s not a matter of proportion, its a matter of direction. The right words are “negatively incented by their commission”.
RE agents are paid a % of the sales price. Thus the incentive of the agent is to get the highest possible price. The interest of the buyer is to get the lowest possible price.
The interests of buyer and seller are opposed. Would you hire a lawyer to defend you in a lawsuit if he was being paid a % of the damages awarded against you?
How hard is this to figure out? What is it about RE that makes people throw common sense out the window?
July 23rd, 2010 at 9:14 am
@Goodnight Moon:
Great post.
I cannot wait until the data is opened up, if it is opened up.
July 23rd, 2010 at 9:20 am
I find it interesting that the ratios. Say 7 / 3.5 % hold up even as properties get much more expensive. I have seen homes sell for over 8m with the same commission structure as a 300k condo or a 1.5M home. The agents get to divide up literally hundreds of thousands in commissions on the most high end homes and the mktg costs and skill involved are about the same.
July 23rd, 2010 at 9:20 am
@DigginOut: Everyone hating on agents are talking about how their interests aren’t in line with your own, and that you’re smart enough to do it yourself. But you’re dumb enough that you worry about getting sold on a shitty deal by your OWN agent? really?
we’re not worried about being sold on a bad deal. We would just as soon skip them altogether since we indirectly pay thousands of dollars to have them. We do not see the value.
July 23rd, 2010 at 9:21 am
Munir Sheikh has resigned as chief statistician for Statistics Canada. Sean Kilpatrick for The Globe and Mail
In a public rebuke of Ottawa, head of respected agency rejects assertion that voluntary survey can replace mandatory one: ‘It can not’
http://www.theglobeandmail.com.....le1647348/
Accurate statistics is important for many decision making processes. Just look at what happened to Greece when their gdp was miscalculated. We had some of the best in the world, up until now. The populist argument is that census data collection is intrusive, but one has to weigh the inconvenience against the greater benefits. The correct response would have been to fine tune the questions on the census rather than remove the mandatory data collection aspect, which is essential for accurate statistics.
July 23rd, 2010 at 9:23 am
@patriotz: Would you hire a lawyer to defend you in a lawsuit if he was being paid a % of the damages awarded against you?
A quote for the ages.
July 23rd, 2010 at 9:23 am
@patriotz:
If a sellers agent makes 2 1/2 % on a $1M he gets $25k. He only makes $20k if it was $800k. Two sales at $800k he makes $40k. RE agents are only interested in number of sales, the price isn’t as important, seller or buyers agent.
July 23rd, 2010 at 9:26 am
In the “hot” market hiring the agent while looking to buy is supposedly to your advantage – they laim to have first hand, immediate access to newest listings and in times of bidding wars having access to new offerings as they come up has its appeal.
However, when the market is slow and you can wade through all the stale MLS listings yourself in comfort of your living room (or a nearest Starbucks lounge) I cannot possibly see a reason why anybody would seek help from a “professional” when looking for a house. What is it they have that we don’t?
July 23rd, 2010 at 9:29 am
@patriotz: “What is it about RE that makes people throw common sense out the window?”
I think it is the myth “RE only goes up”.
The wealth a few people have accumulated flipping properties has completely blinded vast population in their 20s and early 30s, and there is no room left for common sense. Those FTBs do not know what life without debt looks like and they do not know any better than to max out their CCs grocery and shoe shopping, they have no savings and all they have seen in the past 10 years is talk, talk, talk about RE…. It is in human nature to wish to have a home in which you will be on your own, but common sense is gone – therefore, we have waaay overpriced leaky condos in which strata councils skin you alive with their bylaws and incompetency, or million dollar houses which force you into having tenants, and depending on them for mortgage payments.
It is like invasion of body snatchers!!!
July 23rd, 2010 at 9:53 am
@Patrioz
Although there is the obvious reality that the commission structure puts the interests of the buying agent in juxtaposition with the interests of their client, my point about proportion was not a reference to this. It was in reference to the magnitude of their compensation, which is disproportionate to their service (as it should be delivered in principle.. unlikely as that is). I agree with what you are saying though.. the entire structure of real estate agency is ridiculous.
The other fellow made the valid point.. variance of 20, 50 100k per deal is of negligible interest to either agent relative to the volume of deals done. I don’t think it’s accurate to think that a buying agent is trying to pump up the price in order to maximize his commission.. the difference is usually nominal to them. Velocity of deals is their primary driver.
Not sure if your point about “common sense” was directed towards me.. I am assuming that it wasn’t.
July 23rd, 2010 at 10:08 am
@ “A-sharp”
Fair enough, if you’re an individual that has experience with RE transactions. I’m just saying if you’ve never purchased RE, or have only done it once or twice, it’s ignorant to think that you’re as skilled/experienced/qualified as someone that has done it 20 or 30 times.
I think if you go to a flat rate commission (most people have a pretty good idea how much they’re going to spend, so it should be easy to get close), you significantly reduce the agents interests being contrary to your own.
If you know I’m going to pay you $5K if I buy, you’re going to try your hardest to find me a deal that I’ll take. Sure, you’re still just wanting me to buy, whether it’s in my best interest or not, but that’s covered by caveat emptor. Any conflict of interest wrt pricing gets reversed because the lower the price you can negotiate for me, the more likely I am to buy the property.
Seems like a pretty simple contract amendment, to solve the conflict of interest that so many here use as the case for discounting the value of services that an agent provides.
July 23rd, 2010 at 10:15 am
I have long advocated the hourly rate for realshit services ( such as they are). Knowing exactly what a realtard does for a sale is little more than the counter person at 7-11 promoting a new pizza topping I suggest no more than minimum wage through an agency that sells a package of information and paperwork. In reality the tranaction is worth no more than $200 when you consider the average 5 hrs a realwhore spends actually working on an individual listing or sale. Why should one individual vendor subsidize months in between sales> The MLS is entirely computerized and takes less than minutes to extract data. At most two or three hours are spent driving across town opening doors. Shouldn’t it be like a tax preparation service fee? Say….average $65 flat flee or up to ‘X’ amount for customized services that the individual chooses to pay for?
Frankly I’m suprised that people have not revolted against the MLS monopoly. The RE Boards act with quasi governmental arrogance and have blustered the local governments into listening to what is essentially an illegal practice…..bizarre. Write your MP’s….again….As we have seen with the police files, public opinion has forced change if it is strong and consistent.
What I would like to see is disclaimers on real estate advertising disguised as news ( as they do in the US under Consumer Prtection Laws) so that more people would be made aware of the ‘pump and dump’ reality of real estate marketing.
July 23rd, 2010 at 10:31 am
@AACI:
No not at all, I was thinking about the public, not anyone on this forum, which is the last refuge of common sense.
I agree that the seller’s agent, while incented in the right direction, is not incented in the right proportion or amount. The fixed commission (i.e. on the first 100K or whatever) should be lower (or even zero), and the marginal commission should be higher. IOW if I was selling a house listed for $450K, I would pay the agent 10% of any amount over $400K. That’s an incentive that really means something.
pixie chick:
In other words hiring an agent (who is already being paid by the seller) gives you first opportunity to pay too much. Wow where do I sign up?
July 23rd, 2010 at 10:31 am
Oh no, not the real estate agent commission debate again… this is why I bailed on the Chipman blog.
July 23rd, 2010 at 10:39 am
@DigginOut:
How exactly does that work in the interest of the buyer? Doesn’t the guy have just as much incentive to talk you into paying more as to talk the seller into accepting less? Shouldn’t an agent who is truly working on the interest of the buyer advise the buyer not to buy at all if good value cannot be found?
Would you pay someone $500 to find a car for you to buy, payable only if a sale is made?
July 23rd, 2010 at 10:40 am
Flat fee MLS listing available in US for less than $400;
http://www.bostonfsbo.net/mlslistingservice.htm
Hadn’t seen something for flat fee viewing of the MLS yet though.
July 23rd, 2010 at 10:53 am
A gem of convoluted bafflegab from the BOC gov. Up is down….down is up he says. Now that inflation is ‘moderating’, he’ll raise intrest rates. I thought higher rates were designed to contain inflation. Wow…..and we pay this bozo 450 grand plus plus chauffeured limo and great digs.
http://www.thestar.com/article.....rate-hikes
July 23rd, 2010 at 11:18 am
Isn’t it possible to get sold information from the BC Gov website?
Granted, you’d probably have to pay for it.
All sales get registered with Land Titles office, no?
July 23rd, 2010 at 11:20 am
Don’t be too hard on the agents, their days are numbered anyway.
Based on current sales, only 1 in 5 agents will get a paycheque this month – on average.
Let’s hope the other 80% socked some money away during the good times and didn’t blow it all on something stupid – like overpriced real estate.
July 23rd, 2010 at 11:36 am
Re: Chinese bubble. Some here have speculated that when China’s RE bubble inevitably bursts, this will cause even more mainland Chinese buyers to prop up the Vancouver market. They apparently will need to “park their money someplace else”.
What a load of crap.
I used to live in London, and the locals who’ve lived there for decades used to tell me about the huge influx of Japanese in the mid 80s. They were buying up everything in sight the affluent North London suburbs. For a while there were whole streets of shops and services with Japanese signs catering to the new immigrants. Since the Japanese property bubble burst in the early 90s, almost all of them have sold and moved back to Japan. There is barely any sign of them today.
Many of the corrupt Chinese officials driving up prices in Van West will likely face the same fate: their investments in China will crash, and they will have no choice but to sell their properties in Vancouver too. After all you can’t “park your money somewhere else” if you can’t sell your overpriced Beijing apartments first.
July 23rd, 2010 at 11:39 am
Deflation comes to Canada:
http://www.cbc.ca/money/story/.....-fall.html
July 23rd, 2010 at 11:54 am
HSBC are still advertising 5 year fixed/closed mortgages for under 4%. Are the banks somehow absorbing the 0.25% hike in order to keep things moving?
July 23rd, 2010 at 11:55 am
@patriotz: If you have very particular requirements and needs, and limited time, you may want to hire a buyer agent, be it for a car or a house. If a purchase is complicated, an agent will handle legal details on the buyer’s behalf.
I don’t like agents being paid % of sale price commission. I don’t like buyers agent paid by seller as a % of sale price. I don’t like agents being nothing but sales bimbos not even able of performing basic legal tasks, which they refer to a notary or lawyer, at my additional expense. The conflicts of interest, for the buyer and seller agents, are blatant, and no amount of “ethics” will correct the situation.
The change to a sane environment starts with compensation, and everything else will flow from that, ultimately resulting in changes to how we buy and sell houses. The situation we have today is ludicrous.
July 23rd, 2010 at 11:59 am
@Anoymous:
It’s the bond market that determines fixed rates, not the BOC.
Carney moves the variable rates.
July 23rd, 2010 at 11:59 am
I wonder if anybody has ever tried negotiating a commission with a realtor such that the money they make is proportional to the discount received off the listing price? Right now it seems odd that somebody acting on behalf of the buyer stands to gain more as the deal their client get worsens.
July 23rd, 2010 at 12:00 pm
Inventory,
I am feeling particularly daft at the moment, but for the life of me cannot figure out what you mean by “new” unit sales.
Are you distinguishing between “new” (as in never been occupied) and existing home sales?
If that is the case, your data would seem to imply that existing home owners pricing expectations (assuming it is lower prices translating into higher sales) are being adjusted more quickly than developers.
Very interesting.
July 23rd, 2010 at 12:05 pm
@Best place on meth:
That’s no deflation. It’s a shift in products from high end to low end along with shrinking margins.
CPI was up year over year at 1%.
In any case, I thought the big boogeyman here was the expectation of massive inflation and higher interest rates. I didn’t buy that line then, nor do I now. Welcome to the new world of low inflation and low interest rates.
Deflation isn’t in the cards. The Fed will print as much money as needed to keep prices stable or rising.
July 23rd, 2010 at 12:06 pm
@specialfx3000: Only a 12.4% yoy price increase? What a bunch of amateurs.
The money pouring into property has created a worrisome asset bubble in [Chinese] housing, which rose 12.4% year-on-year in May…
July 23rd, 2010 at 12:07 pm
@Dave: Sorry realturd but the expectation is deflation with rising interest rates. How did you get to be so stupid?
July 23rd, 2010 at 12:10 pm
@Dave:
>>>The Fed will print as much money as needed to keep prices stable or rising.<<<
Doesn't matter how much money they print if nobody wants to borrow it and spend it. And these days, nobody does.
It's the velocity of money that matters, not the quantity.
July 23rd, 2010 at 12:17 pm
@Best place on meth:
There are options beyond just expanding the money supply and increasing lending. You don’t need to lend to increase asset prices. All the fed has to do is buy assets with printed money. They will do it if they have to.
July 23rd, 2010 at 12:18 pm
@Tony Danza:
Dummy, nobody but dummies have that expectation.
July 23rd, 2010 at 12:21 pm
@Dave: OK Dave please explain why you believe that only dummies would have that expectation.
July 23rd, 2010 at 12:24 pm
@Dave:
>>>All the fed has to do is buy assets with printed money. They will do it if they have to.<<<
What do you mean "if they have to"? That's what they've been doing – it's not working.
Didn't work for Japan either.
July 23rd, 2010 at 12:24 pm
The Van Sun article in the first link is pretty weak. The writer doesn’t ask WHY developers pushed pre-sales from the March to June period. The reasons were:
1. Getting ahead of the HST; and,
2. Capturing as many pre-approved buyers prior to the expected increases in interest rates.
Developers basically pushed their marketing a little earlier in the game than is typical.
July 23rd, 2010 at 12:28 pm
#5 Yalie, it was recently announced that a property tax inventory in Shanghai would be introduced to bolster sagging land sale revenues of which the city is reliant on. Bejing official quashed that request. It is speculated that the reason for doing so was because it would have exposed the holdings of party officials whose wages could not support such holdings/investments that the have…..ie: corruption is rampant in the party and much of the bribe money for land deals has gone into percentage holdings of party officials in complexes. The top brass are reliant on the RE tripwire act because much of their bribe money is tied up in real estate but they can’t sell because it exposes them as being corrupt. They have been borrowing against the ‘equity’ and that is shinking fast leaving the officials between a losing portfolio and the firing squad. Its very interesting.
July 23rd, 2010 at 12:31 pm
@Best place on meth:
To my understanding (and I am far from an expert), the Bank of Japan did not purchase hard assets. Their approach to deflation was quantitative easing and purchase of bonds and securities.
I am talking about purchase of hard assets.
July 23rd, 2010 at 12:31 pm
@Dave:
Well, I guess the entire bond market, which is predicting deflation is a bunch of “dummies”.
Most people call the bond market “the smart money”.
July 23rd, 2010 at 12:35 pm
@Dave:
If the fed printed money to directly buy assets, that would expand the money supply.
July 23rd, 2010 at 12:39 pm
@Best place on meth:
And when Google starts putting real estate listings on gogles maps, earth and street views, that is the end of the MLS monopoly and the only thing keeping realtors in business.
July 23rd, 2010 at 12:42 pm
patriotz Says: “RE agents are paid a % of the sales price. Thus the incentive of the agent is to get the highest possible price.”
Not really. Recent research, as popularized in Freakonomics, suggests otherwise. The incentive of the agent, assuming they have work to fill the week, is to maximize income/effort. Getting the seller a market price takes much less effort than, as a clear example, getting 25% over market, thus leaving the agent free to pursue other clients at a much higher rate of return for time spent. In a mad market such as Vancouver has been for a decade it’s a no brainer.
The result, which found no welcome in the real estate industry, was realtors statistically got significantly more on a like-for-like basis when selling their own properties than they did for clients. The reason is obvious and natural, 100% of extra earned selling personal property went into their pockets as opposed to the percentage when it’s a client, returning multiples higher return/effort.
Truth is probably more likely to be that in a market which sees realtors struggling to find time in the week to handle clients they’re better served undercutting market prices, shifting the balance from quality to quantity.
July 23rd, 2010 at 12:42 pm
@Dave:
Which hard assets are you referring to, Dave?
The Fed already bought all the mortgages in the U.S.
And all the bonds.
And several large banks and insurers by default.
Will they be buying gold next?
What’s a hard asset?
July 23rd, 2010 at 12:43 pm
@VRENGD:
By expand the money supply I was referring to lowering interest rates to spur borrowing.The point here is that the Fed can create inflation if they want it by doing things other than cutting interest rates.
July 23rd, 2010 at 12:48 pm
@Best place on meth:
Actual real estate, rather than the underlying mortgages. Add gold to the mix. Anything.
Bernanke said he would drop free money from helicopters if he had to. These guys believe that burying hidden money throughout the country would spur economic activity.
The printing press will win out. The only thing that can stop it is overthrow of the Federal Reserve system.
July 23rd, 2010 at 1:00 pm
“The printing press will win out. The only thing that can stop it is overthrow of the Federal Reserve system.”
Or economic principles. Blame politicians for spreading it perhaps but the notion an economy is an infinitely malleable thing that governments can tweak at will is fantasy. See CCCP. At best they time shift it a la Keynes, at worst they destroy it a la South American dictators.
July 23rd, 2010 at 1:58 pm
A Bookworm and A Pig Talk Gastown Rent
http://www.youtube.com/watch?v=gOwkUfZ4_dU
July 23rd, 2010 at 2:01 pm
@Dave:
“The printing press will win out.”
Since you are talking about the might of the American printing press, why has the Fed’s printing press been loosing since 2008? Real Estate prices are still falling in the US. Did the Fed deliberately decide to make RE prices fall? I think the more likely explanation is that the Fed can’t control asset prices.
July 23rd, 2010 at 2:14 pm
@VRENGD:
Because there is still inflation and the economy is growing. If the economy starts to shrink again, then the printing presses will get started again.
July 23rd, 2010 at 2:36 pm
Dave says the government will begin buying ‘hard assets’. I too would like to know what ‘hard assets’ they could buy…copper mines? The definition of inflation is the increase of M3, they have done that to death…the result has been monumental debt purchases of bond issues, which at this point can never be paid off, even with taxes at 100%. A house valued at a million means nothing when a bananna costs $50. Its the value of the currency not the value of the product we should all be concerned with. Zimbabwe found that out when toothpaste was being sold at a trillion dollars per tube. The money printed devalues every dollar in circulation, this doesn’t boost the economy, it reduces purchasing power and increases government revenues through higher proportionate taxes. I guess Dave lives with his Mom, she does all the shopping and buys the video games.
July 23rd, 2010 at 2:55 pm
A family member used to say unions have outlived their uselfulness.
Now, sub in “govt’s”.
Time for a tea party, Boston style…..
The general public ares simply sheep, being manipulated by the menage’ a trois of politicians, beauracrats and vested interests.
July 23rd, 2010 at 3:05 pm
#55 realpaul
The elephant in the room is a communist gov’t appearing to be a free enterprise gov’t.
It’s simply an on/off switch.
They can manipulate the truth to a certain point…..but the danger is the longer they try to delay reality, the bigger the collapse. The ripple effect will be unprecedented.
July 23rd, 2010 at 3:14 pm
@realpaul:
If I was Bernanke, I would buy you a new brain with the printed money.
July 23rd, 2010 at 3:36 pm
Regarding the “14 charts for the Chinese housing bubble” article, I would like to add another very important one.
It shows total residential housing values in relation to GDP.
http://www.howestreet.com/arti.....e_id=14074
It’s Japan circa 1990 all over again.
July 23rd, 2010 at 3:43 pm
@fixie guy:
Yes really. A sales commission is ipso facto an incentive to get a higher sales price. That realtors may be motivated by other considerations not to put in maximal effort to maximize price does not change this.
As I have already noted, the present commission structure is far from an optimal incentive. The fixed commission should be much smaller or eliminated, and the marginal commission should be much larger.
July 23rd, 2010 at 5:03 pm
New Listings 163
Price Changes 109
Sold Listings 116
July 23rd, 2010 at 5:44 pm
#71 A (hole) but you’re not Bernake are you….you’re a nobody. In fact you are a self described nobody, yapping at people with opinions and having none of your own .
You can tweeze your eyebrows and yoga lick your hemmeroids to go along with your no balls and monkey masturbating pencil dick anonymous status. Now take off your moms shoes and gtf outa here.
July 23rd, 2010 at 5:48 pm
@patriotz:
Short-term, of course the realtot is better off taking the first offer that comes along. A bird in the hand is better than 1.02 in the bush. Also, a realtot’s time has nonzero value so they will want to move on to the next sale. Why get a higher price at all? Long term, a happy seller might lead to referrals.
July 23rd, 2010 at 5:54 pm
Still think that inflation isn’t a factor? Man you’re slow.
“While several factors are involved, these changes were fueled by the decline in the value of the dollar. Since AIER first published “How to Invest Wisely,” the dollar has lost nearly 90 percent of its value and there is no end in sight. To buy what $100 purchased in 1947, a family today would need $972. In the last 20 years alone, since 1990, the dollar’s value has fallen some 65 percent, a phenomenon that could accelerate as we come out of the recession and the effects of the government’s recent spending-spree sink in.”
http://news.yahoo.com/s/csm/20100723/cm_csm/315827
July 23rd, 2010 at 6:10 pm
@realpaul:
“A house valued at a million means nothing when a bananna costs $50. Its the value of the currency not the value of the product we should all be concerned with. Zimbabwe found that out when toothpaste was being sold at a trillion dollars per tube.”
On Craigslist…….Real money for sale cheap LOLOL.
https://post.craigslist.org/manage/1859900706/hegyx
July 23rd, 2010 at 6:20 pm
“That has to be a concern to a central banker when you see that kind of debt growth,” said Derek Holt, a Toronto-based economist at Bank of Nova Scotia’s Scotia Capital unit.
Canada Consumer Debt Signals Rate Increase
Need I say more? …RTP
July 23rd, 2010 at 9:13 pm
The problem with the chinese real estate market bubble is that you never know when it will burst. Forget about the statistics coming out of the government that it was showing a slowdown since April due to the mortgage tightening regulations. I would like to show you it’s not the case with this article.
http://blog.sina.com.cn/s/blog.....0kvg1.html
The above is a prominent scholar among the bloggers in China. You cannot take chinese statistics at face value because there is always the discord between the central gov in Beijing and the local governments in the different cities and regions. It’s well known that the central government can’t enforce its will on the local governments if such policies are detrimental to the livelihood of the local governments. Taxation is not as prevalent in China as the IRA in the US or Revenue Canada in Canada and the only way local governments can make lots of money is either
1. invite investments into building infrastructure such as highways, industry complexes, etc.
2. participate in real estate development.
The 2nd has grown into prominence especially in the last 5 years. There were just so much money to be made redeveloping the old cities. The local governments are in bed with the real estate developers.
And if you read the above link, you will realize that the local government is not reporting those high-end real estate sales, down-playing transactions in a bid to fool the central government that its policy of restricting mortgage since April is having an effort. And the central government is already showing cracks in its determination to crack down the real estate bubble in the last week when several manufacturing indicators exhibited a slowdown. One particular chart in the 14 charts regarding the chinese housing bubble is the participation of the State owned enterprises (belong to the local governments) in the bubble. These state owned enterprises now capture a significant share of the real estate activities, bidding housing higher and higher. It’s no wonder it’s the case since the money are public money and they are freed to play this “musical chair” as long as it lasts. Bubbles are known to last for some time before it bursts.
Unfortunately, you just can’t deny the fact that quite a number of SFHs on the West side have been purchased by those folks who sold the houses back at home in Shanghai or wherever. Those folks have no concern with the price they pay here in Van since it’s all about diversifying and getting the money out of China. That means if your goal is to wait for bargains on the West side buying a nice SFH, you sure need to be prepared to compete with those folks. As long as the bubble in China lasts, buying a nice SFH on the West side at 40% off is like a dream.
July 23rd, 2010 at 9:16 pm
#79 ReadyToPop,
Thanks for the link.
“Debt can’t grow to the sky,” Carney said. “Rates are extraordinarily low. That won’t always be the case…”
I wonder how many of the folks with huge mortgage debt will cope if mortgage rates go up to the 7% or 8%?
July 23rd, 2010 at 9:26 pm
@Best place on meth:
Nobody except governments! Both borrow and spend. Although we (ie. US) is faaaar from direct debt monetization, and will probably never go there. We’ll see historic levels of austerity first.
July 23rd, 2010 at 9:33 pm
Leaving one popped bubble to go to another that is popping now…oh dear
http://www.theglobeandmail.com.....le1649063/
July 23rd, 2010 at 9:43 pm
@No More Gordocracies: Maybe you should remove your email address from that listing, seeing as you gave out your private edit link!
July 23rd, 2010 at 9:50 pm
@No More Gordocracies: Incidentally, the largest denomination notes ever issued were in Hungary, not Zimbabwe, the CL seller is misinformed. The famous picture you see of a man sweeping paper currency off the street into a gutter is from the Hungarian hyperinflation period.
http://www.tomchao.com/hb14.html
July 24th, 2010 at 1:06 am
@GB:
Leaving Ireland and coming to vancouver? That’s awesome, the more the merrier. Time to renovate the garage with two more suites. So many fools renting in this city.
July 24th, 2010 at 5:26 am
Prices will go down: twitter.com/squidly77
July 24th, 2010 at 6:15 am
@VultureBoy:
Well because they get paid more if they get a higher price. That’s what a sales commission is for.
You’re also missing that there are only so many sales. A realtot can increase his number of sales only by taking them from another realtot. So “moving on to the next sale” is zero sum over all realtots, i.e. it does not increase their income. Getting a higher price from a buyer does.
Again, I’m not claiming that the present commission structure is an optimal incentive, or even a good one, but it IS an incentive.
July 24th, 2010 at 6:20 am
@Devore:
Au contraire, most of the “recovery” in Canada since 2008 has been driven by increasing consumer indebtedness, aided and abetted by government. In other words the Cons have been offloading stimulus spending onto the consumer to make their own books look better. The numbers speak loud and clear.
But that party is coming to and end as we speak, and the outcome will be the same as south of the border.
July 24th, 2010 at 8:08 am
@patriotz:
The added incentive for a realtot to get a higher price is insignificant. Freakonomics suggests realtots only get a few percent more on there own properties. That’s significant for the seller, but immaterial to the realtot. She would want a 100% chance at an immediate 10k commission, over a 90% chance at a future 10300 commission. Every time.
A full time realtot might use available time to drum up business or take a vacation. A part timer might wait tables. Your zero sum argument is entirely irrelevant.
July 24th, 2010 at 8:37 am
Developer ‘Affordability’ Spreadsheet
“To think that they’re now encouraging secretaries and coffee baristas to take out loans for $175,000 blows my mind!”
A reader who borrowed 2.3 times annual income to buy in Kitchener, Ontario, in 2006, marvels at how locals here in BC are being tempted by developers to borrow 5.8 times income in 2010.
http://wp.me/pcq1o-17e
July 24th, 2010 at 9:21 am
@VultureBoy:
Nope. It is very relevant. The likelihood of the realtor in question selling any home is completely dependent upon the number of other realtors in the market.
July 24th, 2010 at 9:38 am
Ha! Beasley pre-sale buyers are already trying to get out:
http://vancouver.en.craigslist.....22011.html
I particularly love this line from the ad:
Whoa! an apartment in the *corner* of the building – I’ve never seen one of those in *all of Vancouver*! Where do I sign up?
July 24th, 2010 at 9:59 am
@GB:
LOL And she’ll bra-fit here too, however not plus size ladies but skinnny Asian ESL students, and all that for minimum wage. She’ll have to find roommates, who knows – she might catch a few bed-bugs too, and she’ll definitely enjoy this best place on earth watching every penny she spends on food. And before the vise expires, she’ll go back to Ireland, at least there her “dole cheque” can cover her rent and food.
July 24th, 2010 at 10:07 am
The chinesse are buying the undervalued resource/manufacturing assets in US — not whole companies but as shareholders. The US isn’t buying any hard assets — they are still trying to patch their economy back together.
July 24th, 2010 at 10:11 am
What’s this?
A house in Vancouver on a normal sized lot for $388K?
“It sits on a 33′ x 113′ lot which has a right of way that affects its development potential and, therefore, is priced accordingly”
I have no idea what “right of way” means but can it affect the price that much?
http://www.mls.ca/propertyDeta.....Id=9765412
July 24th, 2010 at 10:36 am
#83 GB, This white bitch better not apply for any Canadian government jobs. Whites have been told not to apply. Better she should be an illiterate slacker from Somalia than an educated white cunt. Canada doesn’t hire whites. The criteria for federal government employment is , immigrant, coloured (any), refugee ( phony or not), lesbian ( preferablly), french speaking ( if no english thats OK) ….just anything but born in Canada with children to feed. We prefer someone whereupon we can assuage our eternal guilt.
http://www.freedominion.com.pa.....p?t=133195
July 24th, 2010 at 10:44 am
#96 BPOM, a right of way is a title encumberance which allows someone or something a right to access or develop ( pipes, lines, grates, laneways etc etc etc) across or on your land. You are disallowed the opprtunity to affix some structure or foundation that would impede that ‘right’, such as a fence, building, appurtenance ( pool) etc. Rights of Way and easements are common encomberances on urban properties ( and many subdivision) that many people don’t realise can limit the development and value of their property. Naturally, the 2 week real estate exam doesn’t teach the realshit salemen the finer points of law so many unwitting owners get stuck with new hydro boxes in the front yards, expanded sidewalks that eliminate the front yard or find their back yard has disappeared for the sinking of a high power line running across the rear of the property. “I’ve heard realtards say ‘oh thats nothing” but of course all real estae salespeople are ignorant liars.
July 24th, 2010 at 11:02 am
@realpaul:
So it’s a shitty deal then.
Thanks realpaul for the explanation.
July 24th, 2010 at 11:20 am
Is it just me or have Realpaul’s rants grown more vicious and angry?
July 24th, 2010 at 11:28 am
Wonder why so many Koreans are wanting to ‘escape to Canada ( or anywhere else) legally or otherwise. How would you like to have NK crazies constantly threatening ‘sacred retaliation’ on your downtown?
http://www.nationalpost.com/ne.....story.html
Isn’t communist NK atheist? Whats this nonsense about war bein ‘sacred?’?
McLovin, if the truth is ugly , don’t blame me. The federal government ruling barring a white single mother from employment based solely on race is whats really ugly and nasty and vicious and shitty in so many ways. If you don’t like the truth pal…… crawl under your bed and don’t go outside…its ugly out there….especially if you’re white, have children to feed, were born in this country and thought you had some civil rights as a Canadian citizen.
July 24th, 2010 at 11:37 am
Yalie good find!
I have condensed the sales ad below because it think it is very important to show all the people with their heads in the ground that Vancouver condo’s have already dropped 15-20% even if the official numbers don’t show it:
This is it! An affordable opportunity to own in beautiful downtown Vancouver in Yaletown at way less than original purchase price. Suite #1405 at the “Beasley” highly sought after “E” plan and originally sold for $547,900. We are offering it for sale at an incredible price of $459,000(assignment of contract).
Completion date is set is on target for a November 2011 completion. If you would like more information. please don’t hesitate to call or email Glen at the numbers below or visit my website at www,seemoreresults.ca. I was also one of the original sale people on this development. I look forward to hearing from you.
Wow, 20% off the original purchase price only bought a year ago. I love how this guys was one of the original sales people! What is he telling his buyers now? “Sorry but your 5% down is gone and you are 15% underwater and you won’t be able to move in for over a year!”
I wonder if this guy bought this himself to flip and now sees the writing on the wall and is trying to get out at any cost?
People please can’t you see? I know 99% of the people posting here are Bears but if some of you lurkers are FTB’s or unsure please don’t jump in things are going to get very ugly. Its not different here, its not different this time, this market is already dead the average person just doesn’t know it yet. If you are looking actively just take two months off to enjoy the summer and resume your search Oct 1st I am pretty sure you will be glad you did.
July 24th, 2010 at 11:42 am
Realpaul I do agree with much of what you say, however if you toned down the language and the venom your points would come across much more articulate and informed. When people hear words like “cunt” they just turn off and think the message has come from an uneducated crackpot. (which is not my opinion of you)
July 24th, 2010 at 11:48 am
Yalie #93, thanks for the link re: the Beasley
Originally $547,000, asking price now $459,000
I wonder how many other lucky pre-sale purchasers/flippers are trying to get out. At least this guy knows when to hold and when to fold and when to run…..take his $88,000 loss now, rather than stay in and potentially increase his loss.
July 24th, 2010 at 11:54 am
#103 I disagree, the complacent sheeple need a good smack in the mouth to wake them up. How can anyone not call the Canadian government a cunt? Its a case of ‘if the shoe fits wear it’ when it comes to the type of bullshit i report. I called the Djikanski murder a ‘murder’ a year before the court came out and agreed with me and was soundly told that my language was too strong, that the cops were innocent 100% of the time. Buddy…in my view, the reason there is so many ‘cunts’ in government , shitting on our civil rights, is because people in this country are so meak and feeble that the government has grown to think that Canadians enjoy being fucked.
July 24th, 2010 at 12:10 pm
US banks holding more foreclosed properties off the market than are currently for sale. They think that prices will plunge even further if they release the ghost inventory of houses priced over 300K into already falling markets where sales are off some 70%. Think US real estate is a good deal? Think again.
http://www.realestatechannel.c.....s-2868.php
July 24th, 2010 at 12:42 pm
Can you seriously not see the distinction here?
July 24th, 2010 at 12:43 pm
And it’s Dziekanski
July 24th, 2010 at 12:48 pm
@Jimmin and McLovin:
I’m not so sure the selling is taking a loss. Remember that Amacon managed to pre-sell all the units at the height of the mini-meltdown of ’08/09 by slashing prices by 20%. They even retroactively applied the new prices to previous buyers:
http://www.cbc.ca/canada/briti.....ml?ref=rss
I wouldn’t be surprised if the contract price isn’t actually 547K. That’s probably the “original price” before Amacon’s 20% discount. 20% off of 547K is 437K. I suspect that’s the current contract price, which means the 459K he’s presently asking for would net him a small profit.
But maybe I’m just overly suspicious. No respectable REALTOR(tm) would be that deceptive with their ad copy, would they?
July 24th, 2010 at 12:58 pm
@McLovin:
McLovin Says:
July 24th, 2010 at 11:42 am
Realpaul I do agree with much of what you say, however if you toned down the language and the venom your points would come across much more articulate and informed. When people hear words like “cunt” they just turn off and think the message has come from an uneducated crackpot. (which is not my opinion of you)
++++++++++++
Stop being such a fairy. There’s a kazillion moderated blogs online where you can stay in step with the masses and partake in group speak to your hearts content. RP’s rants are refreshing.
July 24th, 2010 at 1:30 pm
@realpaul:
Lighten up rp, a video rebuttle by Louis CK (comedian)
http://www.youtube.com/watch?v=TG4f9zR5yzY
July 24th, 2010 at 4:17 pm
A, still don’t agree to see it as temorous , homourous or anything other than blatant PC CUNT reverse discrimination against a whie woman who has the qualifications for a government job, has two kids ( single mom) probaly went to expensive night or college classes and has a student loan for same, and is being told that she can not apply because she’s white. Thats the reason she was given for being rejected, this fact is not in question.
Now, I want all the PC CUNTS to line up and tell us why some shithead from anywhere else who has contributed nothing to this country, whose religion, culture and social values made their own homelands such shitholes that they had to flee to Canada ( and most likely they are on the losing side of retribution from the harrassment their own tribe perpetrated against another), whose countries, societies and religions shit on civil rights, womens rights, freedoms of any kind…and we’re supposed to ‘save a job’ for them over Canadian citizens who have done everything right by this country?
There is nothing in those cultures, societies or religions that has anything to offer this country. If there was any redeeming qualities to anything in Somalia, Pakistan etc etc etc , these people wouldn’t be here would they? So why do we want to hire an extraordinary number of these medieval savages into government jobs, what can they contribute. Do we want Islam and the head sacking of women….what about stoning? How about female mutilation. How about hanging children, beheading…is this the type of influence that Canada is trying to introduce into Canadian society? Lets shut down the sewers and be like the Islamic countries….great idea. And yet, the government says no to a white single mother whose crime it seems is to have been born white and pay taxes her whole life. Fuck you if you think this is OK.
July 24th, 2010 at 4:29 pm
@realpaul: Is this a real estate blog or the grumblings of a nut case?
July 24th, 2010 at 6:00 pm
Realpaul – do you have a link to a source or story about the single mom?
July 24th, 2010 at 6:01 pm
I’m no expert on the Gulf Islands, but is everyone trying to get off Saltspring all at once?
http://www.mls.ca/map.aspx?&am.....;curView:0;
I didn’t think they even had this many people on the island.
July 24th, 2010 at 8:19 pm
Vancouver (Pansy) Police attack girl with cerebral palsy. Way to go with the heroic act against a defenseless disabled girl. The cops have pulled out the ‘she tried to grab my gun’ defense ( as always) but they got caught lying again as the video evidence exposes the savage and brutal attack for what it was, a fucking bully whose ass was still hurting from his boyfriends nightstickfucking the night before and he took it out on a truly defenseless disabled girl.
http://www.youtube.com/watch?v=CX3nTOBt9mI
The asswipe , Jim Green, supposedly an advocate for the people of the DTES sucks major cock by later saying “Oh I hope it was all a misunderstanding. No Jim, you fucking pansy, it was an arrogant loser with a badge who thought he could get his jollies by molesting a helpless disabled girl.
#114 A , The link about the white woman refused work because she’s white has already been posted. It has also been on every news channel, radio and blog. Are you pinned under a rock and can’t get up?
#113 Vanrod, Dear Petunia, you’re obviously incapable of understanding the linkages of value in the social context. Crawl back into your PC dress and do the naked for the cruisers, the adults are talking.
July 24th, 2010 at 8:44 pm
What the Beasley CL ad fails to point out is that none of the units at the Beasley actually sold at the ‘original purchase price’.
The Beasley was the condo that MAC Marketing Solutions repacked in a ‘pass it on’ campaign in March 2009. During the 2009 downturn, Amacon supposedly spent months negotiating with their contractors, suppliers and trades.
Amacon announced that they had reviewed the construction costs they could save and decided to pass on the savings to the pre-sale buyers of The Beasley and any new buyers.
Reductions ranged from $100,000 – $250,000 off the original purchase price.
Buddy claims he is cutting $88,000 off the ‘original purchase price’.
Seems to me it is still being sold above the price that was ultimately offered to buyers in March of 2009 when the building ‘sold out’.
July 24th, 2010 at 8:56 pm
@Best place on meth: Meth, thanks for pointing that out. Holy crap. I had no idea.
July 24th, 2010 at 9:02 pm
Patchouli crop failure?
July 24th, 2010 at 9:27 pm
@fixie guy:
Ok, THAT was extremely funny.
July 24th, 2010 at 9:59 pm
Holy crap, that Saltspring Island map is astonishing.
July 24th, 2010 at 10:20 pm
@Best place on meth: Boomers who bought decades ago trying to ensure their retirement riches. We’ll see how well that works.
July 24th, 2010 at 10:25 pm
Re: Salt Spring Island. It sure looks like the days of real estate speculation are over. Maps like this can be found all over the province, soon we will have to call in the Centre for Disease Control to take care of our measles outbreak across the province. At this point in time, I personally know several people who are trying to sell places, lower mainland, Kelowna and Calgary. None has had any luck, all listed since the spring. I think this is (finally) it, what we’ve all been waiting for. Bring it on!
July 25th, 2010 at 5:13 am
Great data on US cities here. This is for Seattle:
http://www.altosresearch.com/r.....ate-market
My favourite:
“The average property in SEATTLE as of July 25 2010 has been on the market for about 140 days.”
140 days! That’s longer than Phoenix but Miami still comes in at a painful wait of 202 days.
July 25th, 2010 at 5:13 am
@anonymous:
They’re really not “trying” to sell, and they don’t need any “luck”. There is only one reason why these properties won’t sell – the owner is asking too much.
July 25th, 2010 at 8:39 am
Another myth is about to get busted.
“The marijuana business holding up prices”
I have always thought some pot money went to real estate, but not enough to keep the bubble afloat.
Will Vancouver go bust now that Oakland is open for pot business?
July 25th, 2010 at 9:44 am
This site is becoming a magnet for a few right-wing racist crack-pots. It is drowning out the excellent posts on real estate and is sad to see. Many of us come here for intelligent discourse.
Not sure what the answer is, maybe an automatic removal of a post which attracts 5 negatives or maybe removal for inciting hatred, that is the decision of blog owners.
However pretty soon it will drive people away like it did at the VREF.
July 25th, 2010 at 10:03 am
“However pretty soon it will drive people away like it did at the VREF.”
Do you mean RET? It had problems well beyond the occasional right wing crank. Intentionally poisoned, to my mind. BTW, for incomprehensible reasons someone voted you down. I pushed it the other way.
July 25th, 2010 at 10:08 am
@chip:
Great site, they even have their own proprietary index:
“One of the unique market statistics provided in the Altos Market Reports our proprietary “Market Action Index” (MAI).
I’ve also come up with my own market indicators tailored specifically to Lower Mainland real estate.
Wealthy Asian Index (WAI)
No More Land Composite (NMLC)
It’s Different Here Average (IDHA)
Best Place Indicator (BPI)
All four measurements are based purely on what real estate industry people disseminate to the public via TV, print and radio, not on any real facts or data.
I’m still tweaking the figures and will make them available in early fall.
July 25th, 2010 at 10:27 am
@frank:
If we were to have a negative vote removal system, it will be important to not vote people down just because they have an opposing view.
Yes, I know this is obvious, but the fact is, there have been a few examples of bullish arguments on this blog that have been voted down without due cause IMO.
July 25th, 2010 at 11:03 am
Wealthy Asian Index (WAI)
No More Land Composite (NMLC)
It’s Different Here Average (IDHA)
Best Place Indicator (BPI)
Pure gold.
Re: Other-agenda focussed crackpots. A third button aside from up or down titled “off topic” or “irrelevant” or “troll” would address the issue A# brings up I think. It is a shame though. Garth’s blog also attracts crackpottery for some reason – some of the same ones as here. Sad, lonely, angry, disenfranchised people who have no audience elsewhere.
July 25th, 2010 at 11:12 am
@specuskeptic: When you have a relatively popular contrarian non-mainstream public outlet, it tends to attract an element that is even more extreme. Oh, the TEOTWAWKI doomers and crackpots have their sites, but there they’re just talking to themselves. This gives them a chance to spread their wisdom and message. This is the kind of person who is not willing to put in the time to create, build, market, grow and nurture their own brand, and would rather use somebody else’s.
It’s fine in a small quantity, to be honest, brings a diversity of opinion, especially when they are capable of reasoning, and have something on topic to contribute periodically that may make you look at things differently.
July 25th, 2010 at 11:20 am
@specuskeptic:
“Garth’s blog also attracts crackpottery for some reason.”
The reason may be Garth himself, who was sharing squirrel recipes with his readers just over a year ago.
Garth should list his #1 hobby as “stocking up for Armageddon”.
July 25th, 2010 at 11:29 am
@Supraboy:
“The more the merrier, the deeper the better!” is exactly what your mum told me last night while I did her in that same garage of yours.
July 25th, 2010 at 11:44 am
Today is open house day! If anyone happens to drop by one and engage the highly trained Realturd in conversation please share their experiences.
BTW does anyone know what the total inventory is?
July 25th, 2010 at 1:12 pm
@McLovin:
Here’s 100 open houses to get you all started.
http://www.mls.ca/map.aspx?&am.....;curView:0;
Remember, be safe out there. And no double-deckers please.
July 25th, 2010 at 2:45 pm
well, i went out to that 388,800 house in vancouver east. there is a sewer running under part of the house. new construction on it would be restricted, hence the lower price. the place was packed. i’d guess it will sell pretty quickly.
another place i was at i asked the realtor what % of his clients put 20% down or more. he said a lot of his clients where overseas so they put down 35% or more due to regulations. so i asked what about the locals, and he said locals usually put 10% down. asked why he said they would rather eat the penalty and invest the rest of the money since rates are so low. i also asked how’s business and he said its “busy”. am i inclined to believe him, well…
July 25th, 2010 at 2:52 pm
Classic example of an excess of greed and a shortage of talent. Dubai was rich when credit flowed, the emirate now struggles under a crushing debt. residential prices are off 60% and falling continually, rents are failing, infrastructure can’t be maintained and power blackouts are common in the energy rich state. Cars are simply abandoned at the airport as foriegners flee before they can be imprisoned for debts asd many are underwater on their loans.
http://www.propertywire.com/ne.....74288.html
This is a fact worldwide, deflation has hit. In the weaker economies it is obvious, for the higher taxed regions we are on lifesupport, but we know whats coming. How long can people here continue to pay ever escalting taxation to governments that want to push the notion that ‘its differant here’. I see the government here in an all out fight to control the message, so far a majority of idiots are drinking the kool aid.
July 25th, 2010 at 2:56 pm
Open house day?
Screw that, I’m off to the beach. Enjoy the weather all (as it will be miserable again in a month or two).
July 25th, 2010 at 3:23 pm
Re: Saltspring etc.
I see this as another RE canary in the mine.
You hvae a combination of those who drove up the price, the family cabin has been inherited by squabling family members, as well as probate fees and capital gains, and everything in between. Then you have the Islands trust, etc.
These paradises lose their appeal after a while.
July 25th, 2010 at 4:04 pm
@frank:
“This site is becoming a magnet for a few right-wing racist crack-pots.”
Not to be pedantic but it’s a myth that one has to be right wing to racist. The BNP is picking up support in the UK from disaffected Labour supporters while the KKK and France’s Le Pen are backed mostly by economic nationalists.
In fact you will find most racist parties also favour more state control over the economy, price controls, restrictions on imports etc.
Basically, the whole right wing – left wing definition breaks down under any scrutiny. They should be junked as political adjectives.
July 25th, 2010 at 4:11 pm
@Best place on meth:
It’s a shame the WHTO* index is now defunct. I always found that one a sure bet for confirming prices were about to explode.
*WHTO – We Have The Olympics
July 25th, 2010 at 4:17 pm
Holy is this fool in for a world of hurt.
http://www.realestatetalks.com.....fe0b5cea98
Thinks he can flip a 200 to 250K condo in this market in a years time.
I knew BC bud is good, but THIS good?
Constantly amazed at how many amateur flippers there are.
Take one guy I know. Buys a fixer upper house for 650.
Spends every weekend for 6 months fixing it up.
Figure he spent about 60 thou more in materials.
He sells this thing for 730 and he thinks he’s made money?
OMFG. Punch this thing into Excel you idiot.
Realtor takes 50. Interest is another 10.
He tied up his downpayment 6 months.
Ya buddy, congrats on losing 6 months of your life and over 40 thou.
We need more flippers like you operating in this market.
July 25th, 2010 at 4:41 pm
chip said: Basically, the whole right wing – left wing definition breaks down under any scrutiny.
The Political Compass attempts -with some success I think- to fix things.
July 25th, 2010 at 4:59 pm
@logic:
“Enjoy the weather all”.
Indeed I will. Summer in Vancouver is always the 3 best weeks of the year.
July 25th, 2010 at 5:21 pm
Wow Grampy you’re in rare form today. By that I mean you’re especially fucking crazy. For a guy who claims that other cultures have nothing to offer Canada you sure seem to hate your own country and particularly Vancouver.
Tell me something Grampy, if all those brown cultures are violent and homophobic, and you yourself are violent and homophobic (which clearly you are) then what makes you any better then them?
And more importantly if you hate Canada, BC and Van as violently as you obviously do then why on earth are you still living there?I mean plainly you hate:
Unions, government workers, immigrants (at least the ones not willing to work for pennies in place of unionized workers), city hall, and gays and lesbians. So…. who don’t you hate, exactly? Who exactly do you see as contributing to society except for you yourself?
It’s one thing to bitch incessantly Gramps, it’s another to find good in the world, a feat you’re plaingly not capable of accomplishing.
In the end I wasn’t happy in Vancouver, so I left and found a better life somewhere else. YOu can call me whatever names you like, you horrible black – hearted old bastard, but I made my choice and I’m happy.
Why don’t you do the same?
July 25th, 2010 at 5:25 pm
#141 Chip, don’t forget the PC cunts and all the other truth deniers whose agendas require the world to stick its head up its ass so that they get their way. The PC assholes knee jerk reaction is to call everyone a right wing rascist when the truth becomes uncomfortable. They call this style of ad homonim attack ‘the fall back position’. From memory it was used successfully against the Canadian population by Ottawa Liberals when the population was in direct disagreement with the insane policies of the Trudeau Libs.
Trudeau and Lalonde overcame the objections by creating hundreds of small constituencies in southern Ontario and stuffing them with new immigrants beholden on them for welfare and promises. Trudeau came out west once and got ridden out on a rail because people here were much more aware of the political scam that hw eas trying to pull over on them. He did manage to create a Liberal seat in South Vancouver using the immigrant dumping strategy with the radical terrorist Sikhs as his willing allies. They tried again with Chinese but they turned on him when they realised what his tax policies would do to their fortunes. The PC cunts have never grown further than the bastions of the union halls since in the west, with the exception of the super flakes in teaching positions at the Universities. Politically the PC’s are well entrenched but are slowly being moved aside by a balanced national democracy.
The PC cunts of today grew up drinking this PC kool aid in the union run schools resulting in the brainwashing and indoctrination of a subset of assholes who support the labels and diatribe that has been stuffed down their gullible throats. To me, its as if I’m living millions of years ago, listening to the dinosaurs stumbling into the tar pits. In a generation we’ll see a Canada for Canadians. It will first take washing the PC cunts out of Ottawa and the senate to finally get rid of the crazy ideas of the seventies Liberal Party.
July 25th, 2010 at 5:28 pm
#146 Scullery maid, it seems you’ve taken you’re head out of the shithouse for a minute. Is this your coffee break? I told you…wear a mask when you clean the restaurants crapper, the fumes are turning you into an asshole.
July 25th, 2010 at 5:29 pm
#142 chip Says:
It’s a shame the WHTO* index is now defunct. I always found that one a sure bet for confirming prices were about to explode.
*WHTO – We Have The Olympics
—————————————
Sure, the WHTO index still exists, but it’s a negative one:
WHTO — We HAD the Olympics.
Now we HAVE to pay for the party.
Provincial government has so far introduced the following tools to pay for it: HST, on-line gambling. There’s gotta be more coming….Yikes!
July 25th, 2010 at 5:36 pm
John Hussman does it again, with his piece “Betting on a Bubble, Bracing for a Fall”
http://www.hussmanfunds.com/wmc/wmc100726.htm
July 25th, 2010 at 6:18 pm
@Bilbo Bloggins:
More sheep to the slaughter. I have been reading of another developer wannabe who made money in an up market but has never seen a real down market. They’re all experts til the shit hits the fan, as it’s doing now.
To quote the kid, “it will be a learning experience”. You got that right junior, a very large one.
July 25th, 2010 at 6:34 pm
@Jimmy:
Actually you would be referring to the WHTO-OF index, otherwise known as We Had The Olympics – Oh Fuck
July 25th, 2010 at 8:25 pm
I visited a friend at the Polygon highrise, “Nahanni” in Port Moody earlier today.
A friend has rented a unit there for the past year at $1600.00/month. (Brand new last August).
I had to laugh when I saw an ad posted for a suite for sale on the front door of the building. The owner offered it for the measly sum of $510K “today only”. (“Discounted” by about 30K, I think).
The WHOLE Nahanni/Sahalee/Klahanie area is crawling with 20 – somethings who are bunkin’ to save $$$ (and bonkin’?) in the units that failed to sell.
“Massive” flips that flopped. Oh well.
Did I say massive?
July 25th, 2010 at 11:48 pm
First off just ignore Realpaul, he does not live in Vancouver or in a condo and has nothing to say about condos. He lives in Richmond (just like that Gold guy randalbard, the yellow fever guy) and has nothing to add to any conversation. This is a fellow who hates the world and found this blog and posts. He/She has nothing to offer to the board except intolerance, narrow minded, right wing rhetoric, possibly from a lifetime of inadvertently inhaling solvents at work?
July 26th, 2010 at 5:12 am
@chip:
That’s called “fascism”. Not what most people, especially leftists, consider “left-wing”.
No it doesn’t. Left-wingers are those who advocate more equal distribution of wealth and equal rights for the dispossessed. Of course there are many different ways to try to do this, but that’s what they have in common. People who try to associate other attributes are trying to discredit them by association.
July 26th, 2010 at 5:22 am
Wow Grampy, great posting there. Way to reinforce your reputation. As I said before feel free to continue to call me whatever names you like. It’s pretty clear when you don’t have a reasoned or rational response you resort to scatological references and a fair amount of homophobia. I suspect the “care” you feign for women, the elderly and children is just a screen to allow you to spew hatred while feeling self – righteous.
I find the ugliness you constantly spew from your soul fascinating. Do you come here because it’s a safe space? I can’t imagine your wife (if she’s still around and didn’t run for the hills long ago) would put up with a fraction of the behaviour you exhibit here unless she’s as horrible as you. I imagine your kids are pretty tired of hearing you rail on and on about immigrants and unions, particularly since chances are good they have a lot of immigrant friends, even (dare I say) a refugee acquaintance or two.
So why DO you have such ugliness in your soul Grampy? You seem to have money and to have done fairly well for yourself, yet clearly you have a great deal of ugliness and rage built up internally. You clearly have a need to spread that rage and ugliness far and wide. You hate so many people and groups it’s astonishing.
Part of it has to be greed. It’s pretty clear you got yours and you want to keep as much wealth as you can. In that, you are no different from the greediest flipper or realtor. Hell, I suspect you could give Rennie a run for his money. Actually your homophobic and scatological rage toward Rennie smacks of jealousy. Do you hate that he’s wealthier then you or are you just another closeted old man who missed his chance to be with another guy?
That would certainly explain a lot.
So what’s it all about Grampy? If you’ve done so well for yourself, why do you feel the need to express yourself in such an astonishingly ugly way? Do you not know any better? Is it pathological? Is it early onset Alzheimer’s? Are you angry you missed a chance to be openly gay?
I’m dying to know.
July 26th, 2010 at 11:56 am
Wow, Toilet cleaner, Sigmund Freud of the shithouse brigade….do you think anyone gives a fuck for you? Admitting that ‘you had some problems in Vancouver that forced you to move’ is any indication. Yapping at your betters is just making you look more like an ass. I detail contemporay topics…. you just whine. Moving out was good….thank you…we have more than too many dipshits out here. Stay gone dipshit.
July 26th, 2010 at 1:32 pm
Good Work Realpaul you’ve ranted against someone else but it does not explain what you are doing posting on this blog.
It’s about Vancouver Condos!
Not seniors hanging out at the food court at 9am, drinking coffee, talking about how great the Socreds were before going to the library and then Ricky’s for a late Dinner at 2:30pm, giving you enough time to get home for wheel of fortune and jeopardy starting at 7pm
Woodwards building is empty! Rents are dropping, more speculative units are entering the market as cheap rentals. L’Aria on Robson has already dropped to the $1300 for BRAND NEW, so watch for vacancies to swell in the surrounding buildings as people upgrade to better and cheaper units. Watch for a flood of units at the Mondrian, Pinnacle, Miro, Gallery, YTP, Savoy etc. etc. as anyone paying $1300 can go brand new now.
It won’t be the tenants that ruin these buildings it’ll be the amateur landlords who’ll fail to screen the tenants or turn a blind eye to bad things (like old men from Richmond coming to get the cut rate massage from a girl who he’d prefer were deported)
July 26th, 2010 at 1:34 pm
And you better hope the cops don’t come to deport realpaul.
In fact someone should campaign to have him deported, he’s too much of a drain on our resources and I pay taxes