Friday free-for-all!
You made it to the end of another work-week in paradise. Lets do our regular friday round up of economic news and open topic discussion thread! Here are a few links to kick things off:
-Charts updated, not as bad as 2008 yet
-The lower mainland real estate dip
-Plummet caused by confused buyers?
-Buyers exit Toronto market
-Video: Vancouver ‘buyer market’ news
-VREAA: only a flesh wound
-Police bust $12 million mortgage fraud
-Fence-sitter threat-o-graph
-US housing: still flooded
-Chinese banks stress test for 50-60% house price drop scenario
So what are you seeing out there? Post your news links, thoughts and anecdotes here and have an excellent weekend!
August 8th, 2010 at 7:27 pm
@Anonymouse:
I was not doing the numbers 10 years ago because I was already a homeowner, but I recall that other posters on this board have said it was possible to buy some properties in Vancouver at rent equivalence (at time of purchase) until about 2003. Compare the prices and interest rates then to now.
I did not consider price declines to be inevitable in Vancouver until 2005 and until then I would have bought if I had been in a position to buy. That seems to be the viewpoint of most other bears, and it was around that time the bear blogs started appearing.
August 8th, 2010 at 2:28 pm
@McLovin:
Realtor wants to make a sale.
He knows the state of the market.
So he tells his seller drop the price.
Whilst at the same time he tells his buyer nows a great time to buy.
Wham, double commish!
Thank u ma'am
August 8th, 2010 at 2:24 pm
@“A-sharp” Accountant:
Why was his/her reasonable statement voted down? Because groupthink is not endemic to bulls, that's why.
August 8th, 2010 at 2:07 pm
@Keeping an Eye on The Pimps:
Tsk tsk. How about debating the merits of my arguments instead of resorting to sarcasm?
No interest in buying right now. Prices are too high. Shame on you for pimping.
August 8th, 2010 at 1:16 pm
@anon:
I totally understand your sentiment. I miss my condo I sold a few years ago. It was fun thinking about what kind of improvements I could do for the condo. Now I look at my small kitchen and the bathroom that needs some upgrading in my rental suite.
Yeah, I am jealous of my friends who bought condos and enjoy living there. Buying a condo is a very emotional thing. A lot of times, emotions override rationales. I can probably buy something if I wanted to, but like you, I refuse to buy right now. I try very hard not to be taken by my emotions to become a home owner again in this market.
You are not alone.
August 8th, 2010 at 1:10 pm
View from the trenches.
A friend of mine has a beautiful custom house with a unique lot in Maple Ridge and I have been pressuring him to sell for months. He finally put it on the market and was "shocked" to find that what I had been saying was true. His Realturd (who is a top guy out there) told him the market was "dead" prices had dropped "at least 5% from the high" and that he shouldn't be surprised if no one comes in to see it for at least two weeks. He got an offer (subject for 30 days so I told him get a back up ASAP) and has a few other people poking around.
I am not surprised because his house could be in a magazine. What I am surprised about is that the Realturd was straight up about the state of the market. The question is is he telling the same story to his buyers?
August 8th, 2010 at 1:02 pm
RealPaul you are a strange duck. I think a lot of what you type is BS which is why you don't want to give too much information about your background or age as you are afraid people will put the pieces together. It sounds like you have a varied and extensive background so I am assuming that you are at least 50. As to what you do, I have no idea.
August 8th, 2010 at 12:58 pm
@bumncream:
Are you related to fecalpaul?
@oneangryslav2:
That's what happens as men get older, they spend more and more time talking about that great dump they had.
@realpaul:
Is this your handiwork?
http://www.poopreport.com/
August 8th, 2010 at 12:50 pm
I just had a revelation! I think that fecalpaul is actually this guy's dad: http://twitter.com/shitmydadsays
There's some really funny stuff in there.
"You're gonna run into jerk offs. But remember, it's not the size of the asshole you worry about, it's how much shit comes out of it."
"The universe does not give a fuck about you. You are a speck in its shit."
"Fucking Radio Shack. It's a wonder they even know how to use a bathroom and don't just walk around all day with shit in their pants."
"The dog don't like you planting stuff there. It's his backyard. If you're the only one who shits in something, you own it. Remember that."
"Your brother brought his baby over this morning. He told me it could stand. It couldn't stand for shit. Just sat there. Big let down."
"Don’t focus on the one guy who hates you. You don’t go to the park and set your picnic down next to the only pile of dog shit."
Interestingly, this guy's father is 74 years old, so he probably isn't fecalpaul. But I think that older men has a fixation on feces because they can only do it about once every two weeks.
William Shatner will be starring in a new show on CBS this fall inspired by this guy's twitter messages.
August 8th, 2010 at 12:45 pm
Prices will fall every month going forward for at least two years.
I see prices falling 2-3% this month.
Wipe your bum with that, why don'tcha!
August 8th, 2010 at 11:00 am
@Anonymouse:
Anonymouse, seems to me you are ready to buy.
And as they say in the business, the best time to buy was yesterday, because you know there not making any more land.
You can bank on that, Bill Good said that Mark Twain said it first.
There are approximately 10,000 Realtors available at this time that aren’t too busy.
No down payment – no problem
Bad credit- no problem
No credit history –no problem
No verifiable income – no problem
Your local RE Agent is a qualified professional who can overcome such minor obstacles to the dream of ownership.
A referral to a trained Mortgage Broker will see the barriers to entry will be overcome, heck; they can set you up with a place with an already built mortgage helper.
August 8th, 2010 at 10:42 am
A friend of mine just bought a condo…70k down…270k purchase price.
I am very happy for them. I think they will lose their 70k equity in the next 3 years but they wanted to buy and I have no doubt that they will be able to carry the mortgage even through expected rate increases. I will admit, I am even a bit jealous because they now have a place that they can make their own without thinking:
"do I really want to put out money on a place that isn't permanent?"
That is something that I think every time I look at my cramped kitchen, or my outdated bathroom…but I won't put money into a property that isn't mine.
I wouldn't buy in this market at these prices. If prices come down, which I believe they will, then I will buy what I can afford. If they don't come down then I will not buy. There are places in the world where the average person wouldn't dream of being able to own a home for the simple fact that it is so far beyond their reach. I don't think that Vancouver is one of these places, but at the moment the pimps are pretending it is.
August 8th, 2010 at 10:09 am
@patriotz:
August 8th, 2010 at 10:07 am
#243 Mc Curious, Realpaul is an avatar whose purpose is to slice through the bullshit like a doctors scapel would through a nasty carbunkle. He exposes the spin of the liars and shitbags who think they are above the law and smarter than the people. Some people find the truth refreshing and are happy to have someone speak up and say whats on the majority of peoples minds. Realpaul communicates the truth in the hope it will be diseminated publicly( and it sometimes works from what I hear around town and from the broadcasters producers) so that the antiseptic light of day burns the cunts who do their best to rip off the people. Stay curious my friend…..just because you're not paranoid….doesn't mean they're not after you. Realpaul is …..everyman.
August 8th, 2010 at 10:01 am
@Anonymouse:
Comparing this real estate insanity to buying a car doesn't work.
I can buy the same car in any neighborhood in any city in Canada for pretty much the same price.
Nobody will ever bid up the price of a car out of sheer emotional distress.
If they sell out of the car I like, I just have to briefly wait until they make more of them.
It is FAR more expensive to rent a car on a monthly basis than to buy it, real estate is the opposite.
Sorry, but buying a car actually makes sense. Buying real estate doesn't.
August 8th, 2010 at 9:57 am
@Keeping an Eye on The Pimps:
If you go buy rent vs. buy cash flow calculations (and judging by a lot of posts on this site, many of you do), THEN YOU WILL NEVER BUY IN VANCOUVER. I've been here 20 years doing rent vs. buy calculations and its always been cheaper to rent. Even during the market doldrums (height of the leaky condo era), it was cheaper to rent. And where did that get me? Fucking nowhere. Now I have to go the SPCA to get a fucking cat so my beehive owning landlord is happy!!
At least I have the modesty and circumspection to admit I was dead fucking wrong. And I also recognize that not everything is about a spreadsheet with numbers on it. There is real danger in harping on the details and not seeing the big picture.
I am bearish but I have real problems with the tunnel vision and arrogance from many posters on this site. You are practically gleeful about a crash THAT HASN'T EVEN HAPPENED YET. Its bordering on delusional.
August 8th, 2010 at 9:51 am
"There will always be an ownership premium."
Given the cultural/ethnic mix I would agree.
Particularly because we have huge representation of Anglo Saxons, who would pimp their mothers for a piece of real estate, but that said, what would a reasonable ownership premium be?
And that didn't prevent previous crashes did it?
August 8th, 2010 at 9:48 am
@Anonymouse:
I have never said that.
Keep those straw men coming.
BTW vulgar language is a poor substitute for a reasoned argument.
August 8th, 2010 at 9:43 am
FIXING THAT LAST POST
@patriotz:
1. You can be a condescending prick sometimes.
2. Stop acting like such an investment guru. Like the rest of us, you’ve missed out on the boom. It amazes me that you can say we’ve been better off renting the last ten years vs. buying. Talk about delusional. Just admit you’ve been wrong for fucks sake.
3. Vancouver RE hasn’t been in line with investment fundamentals for a long time. You constantly think RE returns to the fundamentals of rent. For as long as I’ve been in Vancouver, it has always been cheaper to rent than to buy, and it will probably always be this way. There will always be an ownership premium. So by your own argument, you admit you will never own real estate in Vancouver. Which makes me wonder why you visit this blog.
August 8th, 2010 at 9:40 am
@patriotz:
Yes, but the article in the Financial Post that we were discussing was about real estate as an investment. That’s why I found it bizarre that they didn’t mention fundamentals. Get it?
I could also try to explain to you why investors determine the price of RE in the long run, but I don’t think you’d be interested.
Is there an audition for the Wizard of Oz going on or something?
1. You can be a condescending prick sometimes.
2. Stop acting like such an investment guru. Like the rest of us, you've missed out on the boom. It amazes me that you can say we've been better off renting the last ten years vs. buying. Talk about delusional. Just admit you've been wrong for fucks sake.
3. Vancouver RE hasn't been in line with investment fundamentals for a long time. You constantly think RE returns to the fundamentals of rent. For as long as I've been in Vancouver, it has always been cheaper to rent than to buy, and it will probably always be this way. There will always be an ownership premium. So by your own argument, you admit you will never own real estate in Vancouver. Which makes me wonder why you visit this blog.
August 8th, 2010 at 9:40 am
@Anonymouse:
You don't have to, because the people who rent out cars aren't idiots who are willing to take a negative cash flow in the hope that they can sell the car for more than they paid for it.
Get the point? A residence is the only personal use asset that ordinary people buy that is prone to bubbles. If you want to avoid buying during a bubble and losing a lot of money, you have to analyze it as an investment. If you don't care about losing a lot of money, well just go ahead and pay today's price.
August 8th, 2010 at 9:30 am
@ BPOM
Of course its an emotional decision.
I've never done a cash flow analysis or rent/buy calculation when buying a car. It makes no economic sense to own a car. Its guaranteed to depreciate. Negative cash flow. Financially, I would be better off taking transit and renting a car when I needed it. Or even car-sharing.
I don't care. I want my car. I want it for emotional reasons. I want it for lifestyle reasons. I am willing to take the financial hit to have it.
How many of you own a car? Are you dumbasses for having a car?
Same for a lot of other things in life. They don't make financial sense but we want it anyway.
Most people will be in the housing market for 30+ years. They feel justified in their purchase (even when prices are high) because they think they can weather the market ups and downs over time.
August 8th, 2010 at 9:28 am
Anonymouse Says:
August 8th, 2010 at 4:39 pm
"Fact is, most Canadians aspire to home ownership. You can dispute the logic and merit of this as much as you want but for most it is the Canadian dream: get married, have kids, buy a home, retire, etc."
Good one.
But who is arguing that point?
Most of the bears don’t think it’s never a good idea to buy, we just think it’s a bad idea to buy when prices are too high. (by about 50% or more at this point in Vancouver).
Fact is most American’s dream : get married, have kids, buy a home, retire, etc. but it didn’t stop the bubble from popping did it?
Fact is most Canadian, aspired to home ownership in the past, but it didn’t stop previous real estate crashes did it?
Anonymouse, I don’t think you are foolish, I just think you think the rest of us are.
August 8th, 2010 at 9:20 am
@Anonymouse:
Yes, but the article in the Financial Post that we were discussing was about real estate as an investment. That's why I found it bizarre that they didn't mention fundamentals. Get it?
I could also try to explain to you why investors determine the price of RE in the long run, but I don't think you'd be interested.
Is there an audition for the Wizard of Oz going on or something?
August 8th, 2010 at 9:13 am
And here is Ian Watt's sane and decent twin.
http://www.youtube.com/watch?v=muslzJP6NPw
This guy may actually be ok to do business with, and possibly even safe around children.