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Significant discounts in the Okanagan

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The boom has gone bust inland and we’re starting to see more and more of these news stories about it.  Jimmy pointed out this link to some coverage over at news 1330:

Advertised prices on many new developments are down between 20 and 30 per cent, six-figure savings in some cases. And if you really hunt, developer Matthew Hay says deeper discounts can be had.

He says too much inventory was built up before the recession hit, and the newly imposed Harmonized Sales Tax is not helping the market either. “So now not only is there a surplus of product on the market, but you’ve got a whole buyer demographic that is nervous, cautious, sitting on their wallets, waiting to see how things shake out.”

Some of the developers are offering incentives on top of the discounts like covering the HST, or the GST. Hay says some developers are desperate to sell and that is putting downward pressure on the Okanagan market.

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fixie guy

I learn something every day.

Debatable. You need the infusion of credit subprime in part permitted to cause that kind of rapid appreciation. That it collapsed when the tap was turned off I thought to be obvious by now. The extent of Canada's 'subprime' – low/no interest 35-40 years terms to the marginally qualified – has been hashed on various RE forums for years. Either way it's the same infusion of cash into the RE system, the same crazy appreciation, and the same collapse when it's shut off.

Clearer? Any other straw man arguments you want to toss out there?

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Newcomer

@fixie guy:

"Nope. You need subprime for high prices."

So I guess Vancouver must have an awful lot of subprime. And I guess all the other bubbles, like the Vancouver 80s bubble, were caused by subprime. I learn something every day.

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fixie guy

Newcomer Says: The prices themselves were what produced the instability and the collapse. You don’t need subprime for instability and collapse. All you need are hight prices. Nope. You need subprime for high prices. High prices alone didn't cause the problems, the discover that high risk subprime had been bundled and resold as AAA debt poisoned the credit system and ground it to a halt. Once historically cheap and free flowing credit – including subprime loans – dried up the writing was on the wall for housing. Anyone pulling a Glenn Beck about 'elive socialists' really needs to read a detailed account of the history. Recommendation: 13 Bankers. In the US all administrations since about Nixon worked hard at dismantling the financial regulations and protections imposed after the Great Depression and reaped the natural reward of bending over for Wall… Read more »

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Newcomer

@patriotz:

Right. The main problem with subprime was that it was one of the factors that put undue credit into the system, which inflated prices. The prices themselves were what produced the instability and the collapse. You don't need subprime for instability and collapse. All you need are hight prices. And we got 'em.

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patriotz

@Jonathon: It shows that people can afford to keep their homes, and won’t sell in a down market. Exactly what everyone has been telling you…we don’t have subprime here. That was the gasoline on the fire in the states The Big Lies refuse to die. One, housing busts are never caused by owner-occupiers having to sell their homes (other than for the usual reasons like death, moving, etc). They start when the market simply runs out of buyers, and accelerate when speculators ("investors") start bailing. Owner-occupiers start defaulting only toward the end. Two, the bust in the US had nothing to do with "subprime" lending, which accounted for a minority of mortgages in most markets. The bust in the US, like all busts, was due to prices simply being too high in relation to rents and incomes. Regardless of what… Read more »

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bubbly

@chilled:

It isn’t “airy fairy socialism” that got the world in this mess, it was unfetted capitalism and improperly regulated financial markets, under primarily ‘CONSERVATIVE’ governments. You’re not paying attention.

I nominate your post for the most ignorant of the day.

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jesse

Exactly how many sides does an "Okanagon" have anyways?

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chilled

http://vancouver.en.craigslist.ca/rds/apa/1857549…

This would be cool. Kinda like living in the desert similar to Mohamar Quadafi.

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admin

@McLovin: Hah! All that money, today google ads made a good six bucks here. Not bad, but Robin Leach won't be visiting anytime soon. Coincidentally, I did spend some time this evening looking into graph/ stats plugins to see if we could rig up a simple system for pauls stats, but it will only work if it's as simple as posting a comment and I'm not sure if he's even interested in doing that. There is no shadowy cabal here trying to keep pauls stats out of the light. c0der also did some work on the CULT index and I believe that's working now, but only time will tell. The code was fixed days ago, the delay in updating on the site is my fault. Believe it or not everything doesn't happen automatically here, it's a labor of love and… Read more »

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metalhead

….and no apostrophe.

Hells Angels

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Newcomer

“It isn’t “airy fairy socialism” that got the world in this mess, it was unfetted capitalism and improperly regulated financial markets, under primarily ‘CONSERVATIVE’ governments. You’re not paying attention.”

And England? They were under a pinko government where the state accounted for 50% of GDP. Did they perhaps have a bit of a bubble and maybe a of a financial crisis too.

It's all very simple. If the state steps in to make borrowing easy, people borrow and you get a bubble. It's not like the capitalists aren't involved. There is nothing corporations like more than a rigged market. But it's the commies who come out in favor of rigging the markets time and time again.

If you want efficient pricing, the market has to be free. If you don't want efficient pricing, that's another story.

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McLovin

Why doesn't the person who is making all the money off of this site give Paul B his own stats on a column on PG 1 and fixed the condo index?

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McLovin

Another net 100. Ho hum. Is this the new normal?

100 net new daily

1% of total inventory dropping their prices daily?

Honestly, I respect the bull opinion on this site as I never saw the 2009 bounce back coming but how can even the most bullish person see anything but disaster coming?

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vibe

Devore, The paradox of thrift says that saving money during a recession is bad because it decreases economic activity at the precise moment when it is needed most. What you don't seem to realize is that Keynes assumed that savings have been accumulated during the good times. You could just as easily talk about a paradox of extravagance, where people spend too much when times are good. The point is that when money is easy to get people spend too much, and when money is hard to come by they save, exacerbating the problem. Keynes' theory isn't meant to increase overall economic activity but merely to smooth out the ups and downs. Yes the government would dampen private sector gains but also the losses. The point is to avoid bubbles as well as busts. Dropping interest rates and cutting taxes… Read more »

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Anonymous

@Devore: The problem with gov't stimulus is it's difficult to know when to stop it to allow private investment to take over. Right now it looks like it's too soon to remove it as unemployment is still relatively high, though the only way to tell is to stop it for a time and see what happens. It's back on life support soon unless private investment picks up (the engine turns over).

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G

I think PaulB should get his own spot on the front page to update his dailies, he deserves it and it would be easier for people to find. Could also include MTD and projections.

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chip

@chilled: "It isn’t “airy fairy socialism” that got the world in this mess, it was unfetted capitalism and improperly regulated financial markets, under primarily ‘CONSERVATIVE’ governments. You’re not paying attention." Good grief. Obviously you're not aware that the govt-backed companies Fannie/Freddie held or guaranteed 59% of all subrime and Alt-A loans in the US, and they were encouraged to do so by a Congress that oversaw them. When asked about risk they were incurring, Dem. Housing Committee member Barney Frank famously said he was "willing to roll the dice." The implied government guarantee to these loans created what was perhaps the biggest market signal in economic history. The worst case scenario on the bailout required for Fannie/Freddie is now $1 trillion. As for the failure of regulation all of these loans along with the credit derivatives that insured them, they… Read more »

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Devore

@oneangryslav2: Keynes also said people saving money is bad, ie paradox of thrift. Where did he think investments and loans come from, the tooth fairy?

There is so much more to an economy than aggregate demand. It's like measuring an economy solely by its GDP. In theory, GDP = C + I + G, but what makes anyone think G(overnment) is able to stimulate or produce aggregate demand at all? Do they have a long history of picking winners? Or would they just spend money on politically favored projects? And does not G get its money from C and I anyways, by necessity decreasing C and I in the equation?

Keynes handed governments and voters around the world a loaded gun in the form of his economic theory.

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Best place on meth

@Argentina Zero:

Oh great, superduperbullshitter has a new persona.

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Argentina Zero

@chilled: Those are tact to bring crowd from the bears,There is a lots of hype that amzn fall 15% to 104 while profit is up by 46% that will bring all the bears in the market to spin demand and supply rules.I think bears love that catchy headlines to tick the market up.

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chilled

@realpaul:

It isn't "airy fairy socialism" that got the world in this mess, it was unfetted capitalism and improperly regulated financial markets, under primarily 'CONSERVATIVE' governments. You're not paying attention.

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chilled

@Jimmy:

Jimmy Says:

July 22nd, 2010 at 5:48 pm

Developers push wave of pre-sales into slowing market

http://www.vancouversun.com/Me…..story.html

+++++++++++++++

I wonder which Canwhip Global employee(s) get their pee pee whacked for publishing that article.

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Argentina Zero

@bumncream: Real estate stats comes through the gauge from the type of properties that get sold in any perticular time,It does not mean that sky is falling.

You are standing close to higher interest rates and high prices surrounded by hst.If you believe in upturn or downturn it will not make any sense to you because vancouver real estate, Rock solid heart touching thus far it will never go down.

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chilled

@vibe:

vibe Says:

July 22nd, 2010 at 4:47 pm

Based on Agent Will’s stats 482 units were removed last week, and he looks at a smaller area than PaulB. So there you have it.

+++++++++++

Yeah, those units showed up on Craigslist rentals. You can currently rent an apartment in Vancouver if you have a quarter horse as a pet.

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bumncream

paulB, incredible.

What are YOUR thoughts with respect to where we are now and how things will unfold?

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