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July 5th, 2010 at 1:01 pm
This site is basically the only place on the internet that people can get informed on the ponzi scheme that is Vancouver real estate. It would be a shame if all this drivel drives away people who legitimately want to decide about buying or not. I say ban some of the worst offenders not because they are bulls, but because they are trolls
July 5th, 2010 at 1:00 pm
Do not feed the trolls. If you don’t like Pope’s implicit commenting policy, start your own blog.
Time to be merry! The 18K Inventory Party the Sequel is coming up very soon!
July 5th, 2010 at 12:52 pm
can anyone explain whats up with this “supersmartbull/superdupersmartbull” guy and he wastes all of his day making worthless posts on this site?
July 5th, 2010 at 12:23 pm
3) Do you think that the intended dilution and cheapening of this site by these guys is working?
While I don’t believe there is a nefariously plotting cabal of nogoodniks, there is a confluence of interest in keeping the bubble going as you indicate. I’d love to know what skin superbull and his sockpuppets have in the game.
July 5th, 2010 at 12:23 pm
@Superfly: Your tin foil hat has hole. Maybe make new one with double foil.
July 5th, 2010 at 12:16 pm
Mike:
“There are a few on this site who are ruining the discussion. This place used to have some pretty insightful discussions.”
Here are a few questions for you and the regulars to ponder:
1) Do you think CREA / RE developer wants every prospective purchaser googling Vancouver Bubble to come to this site and scare themselves out of buying?
2) Do you think anyone would persist with extremely frequent postings (voted down and ridiculed) without an ulterior motive?
3) Do you think that the intended dilution and cheapening of this site by these guys is working?
July 5th, 2010 at 12:15 pm
There are no soft landings in a world of Low yield.
If properties Cashflowed strongly at today’s prices then we would not be calling this a bubble.
July 5th, 2010 at 12:02 pm
@Mike: It’s been tried before banning bulls. Eventually the bears start attacking each other and then posts and traffic tail off, and the bulls are brought back. It’s a cycle like real estate. A lot of the bull posts are funny if you have a sense of humour.
July 5th, 2010 at 11:57 am
@superduperbulltime:
“Not one bull post ever voted up.”
When it comes to Vancouver real estate there is no such thing as bulls, only worthless cheerleaders.
Stop whining.
July 5th, 2010 at 11:57 am
@Junius:
……Van Gogh’s paintings are unique and scarce AND widely regarded as genius. Therefore they are extremely valuable. There is no comparison between this sort of value and 99.99% of Vancouver Real Estate (I can’t think of the 0.01% but I allow for it!)……
And, let’s call a spade a spade: absolutely no one on the planet would buy a Van Gogh at current prices if they didn’t believe that it was going to appreciate in value – oddly enough, just like the current crop of morons who buy RE in Vancouver – the irony being that those morons would be much better off pitching in to buy a Van Gogh!
July 5th, 2010 at 11:50 am
@Mike: This site losing steam like non-steroid TDF racers up Alps not because of bull comments, but because nothing left to say for bears. Bears have given all reasons for crash and discussed 40 times in last 5 years. Still market going up and still bears talking. And bears not open to other view, just like Maradonna will never like Pele. Maybe Mike thinks groupthink is same as insightful discussion? Bears think RE market is simple. Bull/Bear and Crash/About to Crash. But just like picking FIFA winners, not that simple. Only simple thing is rent cheque due every month.
July 5th, 2010 at 11:48 am
…in reference to ….”I am neither a cheerleader for madly buying real estate nor an advocate of a wait-and-see attitude.”
July 5th, 2010 at 11:44 am
I am not a [racist, homophobe, sexist, etc.] but those [racist, sexist, homophobic epithet] are ruining this [country, neighbourhood, etc.]
Up is down, black is white, doubleplusgood muthafuckas!
July 5th, 2010 at 11:36 am
@Mike: Bear anytime anyone post bullish viewpoint it voted down faster than FIFA worldcup goal kick. This blog is bear circle jerk only. Not one bull post ever voted up. This blog about loser bear feeling better about being wrong for many year.
July 5th, 2010 at 11:35 am
“Value is forever” = WIN!!!
Great title, Pope, but I doubt even James Bond and the entire British Secret Service could save us now. The sharks with laser beams on their heads are upon us. Save yourselves!
July 5th, 2010 at 11:32 am
“A Bullish perspective is welcomed, but these guys are completely wasting time and space.”
And skin.
July 5th, 2010 at 11:29 am
G: I quantified the change in purchasing power for a family income of $100k and various rental rates at various interest rates. It’s not an absolute figure like 25% because it is so dependent on the relationship between original household income and the rental earnings of the unit.
See link: http://pissmeoffvancouver.blog.....asing.html
July 5th, 2010 at 11:20 am
Uh oh bear listing drop off cliff as price climb again and mortgage rate plummet. All sign point to real estate take off like Lance up alps. Does it mean that bear wrong again? How could bear be wrong so many time? What bad luck bear.
July 5th, 2010 at 11:09 am
Says the hilarious developer:
“I AM NOT A CHEERLEADER”.
So Nixonesque. Shake those jowls, buddy.
July 5th, 2010 at 11:04 am
Is it possible for the administrators of this site to block the IP addresses for Supersmartbull and a couple others?
There are a few on this site who are ruining the discussion. This place used to have some pretty insightful discussions.
A Bullish perspective is welcomed, but these guys are completely wasting time and space.
July 5th, 2010 at 10:59 am
Come on Bears, feel the value. Bear don’t, but bear small number, just like skinny kid in pool get sloshed around by fat kid doing cannonball. Prices going up anyway. This market like Twilight vampire, coming back from dead. V stands for Value not Vancouver Condo, just like diamonds are forever. Where diamond prices in last 100 years? That’s right, up and to the right. Bears, take advantage of buying opportunity before crazy spree after FIFA final game. Maybe also time to buy diamond to say sorry to wife for living in basement for past 5 year. Also, take her for ride on bike to beach to listen to Jaz (but not Jazz, because you can’t afford it)
July 5th, 2010 at 10:50 am
@Delusional Bears:
I agree. Vancouver real estate will go a lot higher from here. In one year, people will be paying $2,000,000 for those westside bungalows that currently list for $1,200,000. Two years from now we will be at $3,000,000 for those bungalows.
Any bears who think this won’t happen, look at the last 5 years. You’v been wrong. I’ve been right.
July 5th, 2010 at 10:45 am
Brief translation of developers promotional article.
“It’s different here”.
“Vancouver is special”.
July 5th, 2010 at 10:41 am
@G:
I think to some degree you’re right, which is what the new rules were intended to do. But make no mistake, CMHC rules cannot permanently keep prices high. Changing the rules merely reduces the risk of significant economic fallout.
July 5th, 2010 at 10:33 am
10,000 ++ on the ‘waiting list’ for subsidized housing? $45,000 per year and can’t live in Vancouver? Whats happening with that law suit that found that huge numbers of social housing units at cheap subsidized rents were filled with civic workers? Still active at last glance.
http://www.vancouversun.com/bu.....story.html
It appears that the socialists want to fill their pockets while screwing the poor. Is the fallacy of ‘we’re #1′ in an ‘international city’ really just a ruse by the city council to drum up revenues, that are going into spirally wage and benefit demands. Selling the housing stock to foriegners has depleted the stock for those who live here…and why? Is it to hoist the nasty hypocrite socialists closer to their visions of financial grandeur without actually deserving the lifestyle they covet?
In the US we see what national socialism is doing to the ‘value’ of housing stock while ‘unionism’ and ‘community organizing ‘ reigns supreme.
And Fry Cook/Shithouse Swabber… I agree with you for once…survival of the fittest….excellent idea.
July 5th, 2010 at 10:18 am
@Gordon C.:
Why don’t you give us your definition of “speculative bubble”, as it appears to differ from ours.
Also note that exactly 3 years ago was the market top in Alberta. Prices have still not come back to that top, and prices in Calgary/Edmonton (with similar rents and higher incomes) in 2007 were lower than those in Vancouver.
Do you think that Alberta was in bubble in 2007? If not, why did prices go down? Note that the price of oil kept rising until summer 2008.
July 5th, 2010 at 10:00 am
@Gordon C.:
Do you have stat to back up claim? I don’t think this jive with average buyer and the 35yr crowd. Wishful thinking good though. But it did not work for Argentina. Ask Run Buddy Run.
July 5th, 2010 at 9:46 am
@Gordon C.:
Prices will fall until the risk makes sense for the price paid. Though on the way those who don’t reassess (read: understand) the risk will be burned.
Here’s food for thought: what’s going to happen to those who took out long term debt 3 years ago when there was, according to you, no speculative bubble? They may not have thought they were buying with speculation but it turns out they did.
July 5th, 2010 at 9:46 am
How much have the new CMHC rules affected real estate sales?
In many places, YOY numbers are down as much as 20-30%. Investors can no longer put down 5% on properties, it is a lot harder to buy a home with a suite (affordability down 25% on one analysis I saw), and certain buyers must qualify under fixed term rates instead of variable.
I think it has had quite a bit of impact.
July 5th, 2010 at 9:43 am
@Delusional Bears: You don’t have to wait for crash. Last week crazy chicken bear actually said the INCREASING price is sign of crash because greatest fools paying too much. You can’t win against bear logic, magic 8-ball always point to crash.
Bear always trying to predict FIFA hifi outcome based on one corner kick, just like housing market.
July 5th, 2010 at 9:13 am
@Rob A.: I had a great time this weekend hanging out in David Lamb park ( former Yaletown Live City Olympic site), enjoying the great jaz music. Downtown is definitely where the action is. That`s what I call value”!!
I totally agree with you.* And when I think “jazz”, I automatically think Vancouver!**
* given that you define “action” as “overpriced shoeboxes”.
**given that you defined “jazz” as “lack of foresight”, or alternately “Vancouver” as “Montreal”, “New Orleans” or “New York”.
July 5th, 2010 at 9:10 am
I finished reading “Ship of Fools” last night, about the Irish boom (and then crash). One interesting study done by an economics professor at Dublin University detailed the pattern of crashes. Nothing new here, he pointed out how a “soft landing” as touted by government and the media never happens after a bubble. And why not? Well, if prices are expected to level off, speculators suddenly realize that it no longer makes sense to hold onto that negative cash flow condo, thus there’s a rush to the exits.
He also points out that when prices aren’t rising, there is no panic to buy, especially when renting is far cheaper than buying. He points out “For 2000 euros per month you can pay a mortgage on something in a muddy field on the wrong side of Celbridge, or you can rent a 1 million euro house in southeast Dublin, close to the Dart line and surrounded by good schools. Once people put off buying in favour of renting, prices will not stabilise, they will crash.” Hm…that’s exactly what I figured when renting a condo for at least $1000 less than what it would cost to buy (even with $50k down). When more people in Vancouver start to realize prices aren’t going up, I expect we’ll see more turn to renting, fewer sales, then a crash.
July 5th, 2010 at 9:09 am
So June numbers for the SFH are up (I am cherry picking just like the bears, and will ignore condo values)!
But wait, didn’t they decline last month (despite the increase in attached and condos last month), and that was the signal for the collapse of the market? Didn’t a bunch of yobs go on record and state definitively that the collapse had begun?
So a 69% list/sell ratio this week is bearish is it now?
So the expiration of a 1000 plus units is bearish is it? That declining inventory is bearish?
I know, I know bears…I “just have to wait” to see the “collapse of the Vancouver market”
I know – you waited for the market to collapse after the Olympics; after the expiration of the April 19th mortgage rules; you are waiting got the collapse following the implementation of the HST….
You bears sure do a lot of waiting….I guess it helps you rationalize your wrong predictions for the past 8 years…
July 5th, 2010 at 9:05 am
Bear always dismiss expert opinion. Well look around you bear. Are you really expert in real estate? How could you be expert since you rent shithole basement with mold growing? This blog like big TDF crash right near finish line. Everyone expect big name sprinter to win but Cavendish crash out like girl, Frarar taken out by retard and Italian has been win. Everyone expect frarar or cavendish to duke out but italian win instead which is what happen everytime for your prediction bear. You lose everytime.
July 5th, 2010 at 9:04 am
Speculative bubbles can occur when you use short term financing to purchase a long term asset during a recessionary period.
During a recession, people cut back on expenditures and become adverse to risk. Most prospective purchasers become unwilling to take on long term debt and reduced the time to pay back debt. For a house, that meant a prospective purchaser was now only willing to take on a house debt for 15 years, rather than 20 or 30. (This is NOT the amortization period, this is the time that a prospective purchaser wants to become mortgage free)
Go back three years, BC was not in a recession and people were willing to take on long term debt. People felt good about their future and the housing market was not in a speculative bubble. Which is different from today, as consumer confidence falls due to social, economic and political factors.
And thats what is happening to prospective purchasers. They are becoming less and less willing to take on long term debt. The potential buyer is still willing to pay $2,100 per month for a home – but now they want the home paid off faster, and that causes prices to decline.
It is simply the “Time Value of Money”
That doesn’t mean that our prices will fall back to three years ago, that does not in itself correct the bubble. Prices will fall until people reassess the risk in purchasing real estate.
That could be a pay back period of under 10 years, as opposed to around 30 years today. A time when once again the social, economic and political fundamentals of real estate are again positive.
July 5th, 2010 at 9:04 am
#8 patriotz and #13 “A-Sharp” Accountant,
Clearly I agree with you both. I do appreciate Mr. Schouw’s attempt to build distinctive real estate in an otherwise highly commoditized market. I believe that he believes his arguments are salient.
What I find interesting is that he starts by trying to differentiate Vancouver Real Estate and perhaps his Real Estate from the global marketplace then slides into a standard supply and demand argument.
Van Gogh’s paintings are unique and scarce AND widely regarded as genius. Therefore they are extremely valuable. There is no comparison between this sort of value and 99.99% of Vancouver Real Estate (I can’t think of the 0.01% but I allow for it!).
The scarcity we now face is in affordability and a sustained quantity of cheap debt. As affordability erodes it will take prices with it. It is now inevitable.
July 5th, 2010 at 8:53 am
The value of an article that plays the population growth card is nill. Sure, metro Vancouver population may be growing at a rate of 50,000 per yer but in Vancouver population growth has been minimal. Between 2001 and 2006 according to Stats Can Vancouver’s population increased by 32,370. That works out to an average of 6474 new people in the city each year. I would expect this trend to continue.
When I can buy the $440k one bedroom 600sqf condo that is for sale in the building next to me for less than $175k than I’d consider that good value.
July 5th, 2010 at 8:50 am
@Junius: “Price is what you pay, value is what you get.”
And what you get is an asset that under performs other investments by almost every measure…at least at these prices…
July 5th, 2010 at 8:47 am
If the author really believed what he was saying, why would he be selling any of his inventory?
July 5th, 2010 at 8:33 am
Totally off topic but even in movies, people are stupid. Watched Brooklyn’s Finest yesterday (pretty good movie) and in it, a good cop was doing bad things because he wanted to secure a down payment towards a new home as his pregnant wife was getting sick from the mold in the house that they are living in.
He is a religious man and felt really guilty about what he was doing (the bad things) but yet he could not get himself to getting the family out of that place and perhaps rent?
I know it’s a silly movie but the point is, home ownership is regarded as ‘the only option’ and anything else is just not good enough. And in the case of the movie, it was important enough for a good person to do immoral things. Sad thing is, self-caused pressue happens in real life as well.
July 5th, 2010 at 8:29 am
I had a great time this weekend hanging out in David Lamb park ( former Yaletown Live City Olympic site), enjoying the great jaz music. Downtown is definitely where the action is. That`s what I call value”!!
July 5th, 2010 at 8:16 am
For some reason, the words “value is forever” attracts all kinds of weird spam. Go figure.
July 5th, 2010 at 8:16 am
@Junius:
I will put the point a bit more concisely and bluntly.
The writer is denying there is such a thing as objective value for RE. There is – it’s the market rent.
In denying objective value, he’s claiming that price doesn’t matter, which is what all bubble deniers say.
Well price does matter. Excessive prices are the cause of all asset busts.
July 5th, 2010 at 7:42 am
Warren Buffet once wrote, “Price is what you pay, value is what you get.” I think this is where Jamie gets his thesis from. However the article doesn’t really convince.
There is no question that we often value things well beyond their functional value. Look at art, for example. Or even diamonds or other rare jewels. However even in these purchases there is an implicit sense that there is a strong potential resale value as others will see things these same way or more so in the future and the piece will appreciate as so many do.
The problem with using this comparison to Real Estate is that it overstates the premium people are willing to pay. If I buy a penthouse in Grace for $10 million am I not presuming that there is another buyer out there that would do the same when I want to sell? Or at least $9 million so I get my enjoyment for years followed by only a 10-20% loss on my property?
His problem is that he is not selling anything something unique enough to provide the value he is writing about. Prices are set by a comparative. Comparatives include properties in Coal Harbour and down the block from his. Never mind around the world in better climates and more worldly cities. He is not creating the value – or enough of it – to make the case.
The type of value he is discussing requires both uniqueness and scarcity. In the Real Estate world this is reserved for the very rare estates around the world in the many millions of dollars. It does not apply to fancy condos in Vancouver. There is always something newer and better coming next year.
July 5th, 2010 at 7:33 am
As a developer you are only worried about risk. What are the odds the market could tank once I commit a ton of cash over X amount of time and will I possibly go bankrupt if they don’t sell. That is all a developer truly cares about. The rest is just BS.
July 5th, 2010 at 7:00 am
I read it but then I realized I already read it in Rich Dad Poor Dad. This
Guyguy says all sorts of stuff but can’t figure out how to cogently tie them back to his thesis: that prices will go up in the long term. (At least I think that’s what he was saying.)But one thing is certain. Shouw is reading local blogs like this one. He’s just in denial what the crappy sales numbers really mean for the market and his livelihood.
July 5th, 2010 at 6:47 am
“jedi developer” – that’s comedy gold!
July 5th, 2010 at 6:38 am
He never defined value. He just talked about it like it is the force or something. Jedi developer can see the future apparently.
July 5th, 2010 at 5:35 am
They have no fucking idea what value is. They keep thinking value is price, but it isn’t. Price is what you pay (or receive) for something, value is what it’s intrinsicly (sp?) worth. That’s a rookie mistake that invalidates anything they could possibly write afterward. Thinking that price equals value is also the mistake that leads to those inflated RE prices imho.
July 5th, 2010 at 4:13 am
Of course, the seller – of anything – is primarily concerned about the price he receives for what he sells. It’s the buyer who is concerned – or is supposed to be concerned – about value, which is utility (measured by market rent in the case of RE) compared to price paid.
And the Alice in Wonderland logic follows from this.
“Price is what you pay, value is what you get”
- Buffett