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August 23rd, 2010 at 10:18 am
Nice post Blue Acorn. Pretty much spot on. However, while that might be the median income for your neighborhood it’s well above Vancouver’s. 30% is very optimistic.
August 23rd, 2010 at 1:33 am
@exWestEnder: @exWestEnder: Well said. We have the similar experience like you guys. My wife and I have lived in China, Hong Kong, Taipei, London and LA, and have travelled to many places (she’s a travel writer). Vancouver is one of the most humanistic places. No it’s not perfect, especially for its lack of meaningful culture and a strong creative industry but Vancouver is a very livable space. It’s a bridge between the old world (Europe) and the new world (N. America) and the East and the West. Vancouverites are not the easiest bunch to befriend with but overall they are accepting. The food scene is great and the outdoors are awesome.
However, its housing price is purely not justifiable. It’s so high that it’s hurting the city’s future. Young and economically actively people can’t afford to live here. When most of the disposable income is sucked up by rent/mortgage payments, there is very little left to be spent on other things: travelling, cultures, fashion, eating out, etc. This can’t be good for BC’s economy. Right now, we are renting in Kits. Most people on my block are either folks who bought at least 10 years ago or earlier, or their parents put down a big down payment for them, or senior doctors, or lawyers (partners) or hockey players. We are the only renter here and my wife has told me a few times how she gets the renter treatments: not being invited to neighbourhood parties etc. I shrug most of the time and insist there’s nothing wrong with renting and we can’t afford to buy a bungalow for $1.6M and even we do it doesn’t make financial sense. Cities like NYC, Hong Kong, London and Paris have a huge financial service industry, cultural industry and bubbling creativity. Vancouver is a great town but is not the best place on earth. There is not such thing.
No we don’t need a big place: just somewhere around 800-900 sqf will do as we have a kid. But we are not prepared to pay $600K for one in Vancouver and we don’t want to travel 2-3 hours a day to work. So we rent. And yes, Vancouver’s housing price needs to drop for about 30% to make sense. We belong to the median income bracket ($85K – $100K) and if we can’t afford to buy a decent size condo, this can’t be a good sign?!
The three levels of governments have a lot to do to grow the economy sustainably, rather than pumping the housing market up. The Feds can limit the amortization period to 20 years, the province can build better public transit and encourage investments to creative industry to make the city even better, the cities can change zoning to increase density, especially for the west side, and all along major routes permitting high-risers (like 20 stories and up). The price will come down immediately (but not collapsing) with the minimal negative impact to the economy.
So, what do you guys think our governments should to do to manage our housing market and our economy better as the direct consequence?
August 23rd, 2010 at 1:14 am
@Just saying: ha ha turds.
This blogger said Winnie Chung is wanted in Taiwan for frauds related to sale of a Vancouver house without the owner’s consent
http://gb.udn.com/gb/blog.udn......ks/4344985
Mad,mad,mad Vancouver real estate.
August 22nd, 2010 at 11:04 pm
Just finished reading a ridiculous article in the Sun trying to adress myths as to why real estae can’t go down. the two year old that must of wrote it says its because we are running out of land. I can’t think of any other city with over a million people that has a lower population density. That has to be the biggest myth that keeps on getting repeated.
August 22nd, 2010 at 10:56 pm
Just got an e-mail from one of Ozzie’s henchmen..
What is going to happen to Real Estate?
Find out at…
Outlook 2011
Real Estate Conference
PREMIUM TICKET PACKAGE – $147 *(+hst)
…or, I could just read the hard data and news presented on this blog daily and come to a much much more accurate conclusion…for free! hmm…
August 22nd, 2010 at 10:49 pm
What housing bubble?
http://blog.andyharless.com/20.....ubble.html
August 22nd, 2010 at 9:45 pm
I love how it advertises stainless steel appliances and right there smack in the kitchen (great location, NOT!!) is a white washer/dryer combo. Liars.
August 22nd, 2010 at 9:13 pm
I used to hear all the time from our RE agent in Victoria – someone just called from Germany and they want to buy property – Cash! He said it about 3 times to us. He also said it to the press (Times Colonist if you can call it press). He was the President of the RE Board – yup someone from Germany just called me today to buy property – cash!
I wonder what he is thinking now.
August 22nd, 2010 at 9:05 pm
@The Pope:
It’s Monday in Asia.
August 22nd, 2010 at 9:00 pm
@Best place on meth: Writing it now, but it’s not monday yet is it? Are you so excited you can hardly sleep?
August 22nd, 2010 at 8:34 pm
@Sour Grapes:
As a non Chinese non Asian who’s not into numerology married to a non-Chinese Asian also not into numerology with a non Chinese half Asian child just learning to count on fingers, I have only one thing to say.
Time for a new topic.
Pope?
August 22nd, 2010 at 8:25 pm
@Sour Grapes:
Ah, I think it has become ridiculous. At this time and age we, Canadian residents, should be able to call it as it is, without fear of offending anyone. Why should anyone be offended by their own race or ethnicity, or when others acknowledge it…
August 22nd, 2010 at 7:41 pm
@Best place on meth: As a non-Chinese Asian, it always irritates me when people say “Asian” when they mean “Chinese”. (It’s particularly irritating when a Chinese person says it to me.) Not all of Asia is into numerology, and of those who are, not all of them see anything significant about the number 8. I may look a lot like the Chinese majority in Vancouver but they know I’m not one of them – the least everyone else can do is keep in mind that I’m not one of the horde, either!
August 22nd, 2010 at 5:28 pm
@George the Third:
Whoa! Big money! Big money!
I never understood the strategy either. I can see retail stores doing it, so they can say such and such is under $x dollars ($x – $0.01), but how does that work for something you are paying 100s of thousands for? I find it insulting actually.
August 22nd, 2010 at 5:21 pm
Just the math.
August 22nd, 2010 at 5:06 pm
@George the Third:
By George, you’re right, $112 it is!
Please disregard my entire post!
August 22nd, 2010 at 5:00 pm
$650,000 – $649,888 = $112.00 not $12.00.
August 22nd, 2010 at 4:41 pm
@Teddybear:
It’s not $650K, its $649,888. It may only seem like $12 difference to some, but that $12 will attract Asian buyers to the listing like bees to honey. Or bees to laneway houses.
http://www.mls.ca/propertyDeta.....1986432591
Sarcasm off now. Seriously, don’t Chinese people look at this type of pricing and just laugh at the desperation and stupidity of the seller and agent?
The must be getting insulted by now.
August 22nd, 2010 at 4:20 pm
Just came back from several open houses in Vancouver DT, and noticed that some realtors are pulling an old trick: at 1255 Seymour St the realtor was not in the lobby, so crowds would gather in front of the building and wait for realtor to come downstairs. The intention obviously is to create a sence of “urgency” as if there were crowds of people looking to buy 650k for 860 sq.ft condo. There were a few Chinese coples, one guy did not even want to go upstairs. He was just laughing at the price and sent his wife up. We did not want to go, no point of heckling the realtor now, will come back in a month or so though.
Across the street – another open house, at 1228 Seymour, falsely advertized as 2 bdr. (it was one bedroom and den) priced at 509k with property assessment of 375k, there was only the realtor in the suite. The realtor played “I don’t know how much money is in the contingency fund, and I don’t know how much is the most recent property assessment”. Funny, since the MLS # is in the low 82′s.
They are still fighting inevitable very hard.
August 22nd, 2010 at 3:59 pm
Wyng Chow, a former real estate reporter for The Vancouver Sun, is accused of receiving a “secret benefit” from a property developer. Chow was fired from the paper in December over this issue, after 32 years at the publication.
http://www.hidelinkonline.com/.....JlbmVmaXQv
” However, Graham claimed that all reporters know that certain
things are unacceptable, including making up facts for stories,
stealing someone else’s work, and writing about someone who is
providing a financial benefit to the reporter. ”
Just saying
August 22nd, 2010 at 3:31 pm
@oneangryslav2: Ha! And there’s another mistake, but I won’t fix it. Anyone need a copy editing job?
My sister and her husband have had the same realtor since 1992, which is when they purchased their first house and they’ve been satisfied with his work to this point. September should be interesting.
August 22nd, 2010 at 3:17 pm
@VHB: Another way to look at it is from the POV of those directly involved in the REIC. Low inventory isn’t necessarily a good thing. It’s all about the sales — for Realtors, developers, mortgage brokers, home inspectors, banks, etc. Fewer listings doesn’t increase sales when new speculators aren’t appearing; how can it?
From that perspective there is what amounts to an ongoing recession in these industries. I also think the Olympic GDP boost is still showing up in Vancouver as money sloshes around for another few months. This is a waning effect and I wouldn’t be surprised if that’s part of the reason Vancouver and FV have fared better than other parts of the province. I think given how severe the housing recession is in other parts of the province there will be a shift in government spending away from GV/FV in the coming months. Any look outside of the Lower Mainland shows much more severe conditions than even 2008.
August 22nd, 2010 at 3:16 pm
@oneangryslav2: I should really proofread prior to clicking submit. Let me try this again:
“How any idiot, especially one who passes himself off as a expert on the real estate market, can say that a there is something called a “normal” real estate [market], let alone that in a “normal” one prices go up 10% annually, is beyond me. I guess I can’t stomach the thought of whoring myself out on television.”
August 22nd, 2010 at 3:05 pm
@VHB: “1. The ‘rush for the exits’ by specuvestors happened in the spring.”
I doubt it. From what I have seen there were significant de-listings in the downtown area where investors make up a huge portion of total sales. I know of people who pulled their places off the market and have tried to rent them out instead.
2. There hasn’t been much mortgage stress
Yes. Rates are significantly lower than this time in 2008.
“3. The ‘move up’ market has frozen.”
Yes. Low sales, high inventory, and de-listings are not independent of each other.
“4. …taking their place off the market”
Sure and I’m not convinced all of them are renting them out. I wouldn’t be surprised to see an influx of short-term tenancy in downtown units (common for some Asian investors) or them just being kept dark until 2011. Getting renters is a pain if you want to list the place in 6 short months, compared to the income.
The truth is the majority of properties that have been listed aren’t selling. Why?
August 22nd, 2010 at 3:05 pm
@oneangryslav2:
And I would add that Tsur pimping RE is more egregious than Lereah, at least Lereah had the balls to be out of the closet; on the other hand Tsur , plays the unbiased academic.
Shameful,
August 22nd, 2010 at 2:54 pm
oneangryslav2, not enough kitchen and too much sun? Recommend your sister find a new realtor. She can tell this one not enough brains and too many excuses.
August 22nd, 2010 at 2:16 pm
@crashcow: Here’s an update in the “My sister’s house in Coquitlam is on the Market” series:
To recap–relatively nice 4BR, 2BA house in a good area of Coquitlam–Harbour Chines. It’s been on the market since about June 15th. There have been multiple showings and a few open houses, but not a single offer yet.
It turns out that the one problem (according the the real estate agent) is the kitchen–no stainless steel appliances, no marble counters, and it’s a bit too small. In a market that’s slowing down, this is the type of issue that will prevent your house from being sold. Had the house been up for sale prior to the April 19th mortgages policy change, I’m sure it would have sold.
It turns out that the real estate agent believes that September will draw out more potential buyers. His reasoning? It’s too nice out, so people are enjoying the weather. If his attitude is indicative of that of the rest of his colleagues, we could see a surge of new and re-listings in September.
We’ll see…
August 22nd, 2010 at 2:05 pm
Joeblow, regarding “Dan, kindly elaborate. Accusing me of being ignorant is less effective than simply giving a coupe of examples and show me where I’m wrong. Got any?”
Well, you got up my nose, didn’t you, and I took you to task, and now you want me to justify myself? Does that somehow surprise you, that you got up someone’s nose with your comment? Silly me; I supposed that was your goal!
Your ignorance was self-evident in your broadly offensive statement about Canada, which included Canada’s history. And now you want me to educate you? ROTFL. Your broad claim merited only a broad rebuttal.
But let me try a more positive approach, and appeal to you to look for yourself, because examples of what’s “good” and “great” about Canada abound, especially in stories from the past. Go to the library. Read something. Learn something about Canada. Speak to people whose families have lived here for many generations. Speak to people whose families came here in the 1800s and early 1900s. Like the history of the United States (which you somehow approve of) Canada’s history is a story of hardship and overcoming. Many, many Canadians of different cultures have a great deal to be proud of, especially for their ability to “endure”, to build, to create, and to serve others. (Others have lots to be ashamed of).
I insist, however, that the burden is on you to educate yourself, assuming you’re interested in something other than a verbal p*ssing match.
(P.S. I didn’t call you “ignorant” as your retort suggests. I said you were “patently ignorant of Canada’s history” … that means you are “unknowledgeable” or “uneducated”.)
August 22nd, 2010 at 1:19 pm
I wonder if Tsur has a book coming out? I was just looking at Amazon to see comments in 2005 before the US bubble popped regarding David Lereah’s 2005 book on real estate:
ARE YOU MISSING THE REAL ESTATE BOOM?: The Boom Will Not Bust and Why Property Values Will Continue to Climb Through the End of the Decade – And How to Profit From Them
________________________________________________
Here is the Amazon Review from 2005:
“Although some economists believe that the real estate market may be headed for bubble territory, Lereah disagrees, arguing that continued low interest rates, a healthy boomer population, and the “boomer echo” of next-generation buyers should keep the market healthy for at least the next 10 years. But he says that in order to profit from this sector you should invest now.”
________________________________________________
Here is the review by two other real estate experts in 2005:
“An invaluable book . . . Today’s real estate markets are booming and Lereah makes a convincing case for why the real estate expansion will continue into the next decade. This book should prove to be a truly practical guide for any household looking to create wealth in real estate.” —DEWEY DAANE, FORMER GOVERNOR OF THE FEDERAL RESERVE BOARD OF GOVERNORS
“An important book, whether you agree with the author (as I do) that housing will remain an excellent investment or are convinced that home prices are poised for a plunge, David Lereah lays out a compelling vision of housing as a continuing positive investment—and how you can profit from real estate if you already own the home you live in, are looking to move from rental housing to an owner-occupied home, or want to use real estate as an investment.” —DAVID BERSON, CHIEF ECONOMIST, FANNIE MAE
________________________________________________
And here is the review of an unknown reader who nails it in 2005:
“For me, this was more comic relief than any scholarly analysis. The author has a vested interest in the bubble not bursting, and he’s selling his soul with this book to prove it.
He spins webs of demographics and interest rates, but he never ever addresses the core issues that determine housing values. What is lost here is that housing in itself creates no value, its value is completely predicated upon peoples ability to pay for it. Ergo, housing prices for the last 100 years have tracked income remarkably closely, that is, except for the last five years. Historically, the ratio of housing price to annual income has been 2.1, with very little variation. In many parts of the country, this ratio is now approaching 10.5! Can you say “major correction?” Further, the amount of leverage used to buy homes during this boom has been increased to absolutely unprecidented levels. Even during the last boom of the late 80s/early 90s, the standard was still 30 yr fixed and 20% down. Not anymore. Last year, less than 15% of borrowers put down 20% or more! Further, the 30 yr fixed has been replaced by the IO, or interest only loan. See now, we have the same borrower capable of bidding 30-40% more for a propery without any better credit or ability to repay. Neat trick, but sadly, Lereah at no point addresses any of these fundamentals.
Our stock/housing pattern appears remarkably similar to the one Japan had 20 years ago. First the stock market busted. Right after, the real estate market rallied, and it busted too. The current Japanese real estate market is in a 14 year slide to date, and houses are going for roughly their 1980 value.”
_________________________________________________
I am sure Vancouver is different because as Tsur states our land is water and the US which is not developable. Hang on, since the US is not developable why did their bubble pop? And Japan has some water if you draw a circle as Tsur does in his analysis. I guess we will have to check with Tsur. I am sure the Vancouver Sun will ask that question next week in part 2 of why real estate will never decline in Vancouver.
August 22nd, 2010 at 1:14 pm
@Keeping an Eye on The Pimps: Here’s an oldie but a goodie (from December 31, 2006)…
http://www.youtube.com/watch?v=60CLQse27p8
Why don’t these shows bring these people back for a retrospective. The childish mocking of Schiff by Adkins and Morgan is priceless. Note the opening statement by seemingly coked-up Adkins:
How any idiot, especially one who passes himself off as a expert on the real estate market, can see that a there is something called a “normal” real estate, let alone that in a “normal” one prices go up 10% annually, is beyond me. I guess I can’t stomach the thought of whoring myself out on television.
P.S. Although Schiff called the housing market crash correctly, he’s been wrong on other calls of his–particularly the strength of the US dollar and his call for hyperinflation.
August 22nd, 2010 at 1:13 pm
The Vanc sun article of such ridicule is the bow shot of the whores….they plan to belittle all argument by labeling all contrary opinions as ‘myth’. They must have hired the RCMP on this….deny deny deny deny until public opinion is taken in a new direction……its a childish response to realiity but then again they have the most to lose. I was wondering how they’d try to counter the facts….they were off the braodsheets for over a week without a peep and I suspected they were developing a media strategy….well here it comes. They have stated that they will issue a series of articles in the coming weeks using this Cayo whore and trot out all the usual suspects ,pimps, whores and liars. Of course the real estate boards and sales reps are going to be lining up……as well as the credit union pimps and developers reps from UBC and the national organization. What we will never see in the local rags is opinion other than what has been bought and paid for. As I have said before….looking for truth in the Vanc Sun is akin to looking for your breakfast in the toilet.
August 22nd, 2010 at 1:12 pm
@Dan in Calgary:
Dan, kindly elaborate. Accusing me of being ignorant is less effective than simply giving a coupe of examples and show me where I’m wrong. Got any?
August 22nd, 2010 at 1:04 pm
@VHB: Next month’s activity will be very interesting to watch, especially listings. Like you said in point #4, I expect there to be growth in new and re-listings as sellers hope for a market rebound in the Fall.
I don’t see a Fall rebound in sales, although there is definitely less yard work. Of course, there is also the Sept 8th rate announcement. Sept should give us a good indication of our trend rate going forward.
August 22nd, 2010 at 12:19 pm
magazine covers as contrarian indicators:
TIME, June ’05 (2 months before end of US boom)
Georgia Straight, Nov ’09 (5 months before end of YVR boom)
August 22nd, 2010 at 12:08 pm
Addendum:
http://www.time.com/time/speci.....51,00.html
25 people to blame: check out the full list.
Whose names will be on our list?
August 22nd, 2010 at 12:00 pm
I recall watching an American TV show on housing just before the bubble burst.
The debate was between the “it’s not a bubble, it’s different this time” supported by David Lereah and a group of mortgage lenders, and the other side who claimed” it’s a bubble the fundamentals can’t support these prices” argued by Shiller.
The David Lereah argument was entirely the same as that being made by Tsur.
The rest is history.
August 22nd, 2010 at 11:57 am
We are on pace for the 2nd worst sell/list and sales totals cine 2000. (The worst being 2008.)
Like in June and July, listings are running quite a bit lower than normal. This is pulling down the overall inventory number–and fellow bears, we must call this for what it is, which is not good for faster price declines. There’s no putting lipstick on the overall inventory pig.
Why are new listings so low? Understanding this will allow us to understand whether this trend will continue in the Fall.
Here are some possibilities:
1. The ‘rush for the exits’ by specuvestors happened in the spring. We ‘stole’ new listings from the summer with our super high listings in the spring.
2. There hasn’t been much mortgage stress–either because of income problems (job loss etc.) or because of mortgage rates (which have stayed low).
3. The ‘move up’ market has frozen. This means that people stop looking and stop listing their house; supply and demand both move down.
4. Hordes of people are taking their place off the market to wait until next year (or the fall) when prices will be ‘better’. We should see evidence for that in the rental market, and this means that we can expect a big flood of new listings next year.
Which of these makes the most sense?
August 22nd, 2010 at 11:48 am
Here are the projections for August end of month numbers, given what we have seen so far this month.
Days elapsed so far 14
Days remaining 7
Average Sales this month 104
Average Listings this month 190
Projected Sales 2186
Projected New Listings 3996
Projected sell/list 54.7%
August 22nd, 2010 at 11:43 am
I’ve lived in a lot of major cities (New York, Toronto, Rome, Tokyo, Paris) and I have never see a city with so much unused and underused land as Vancouver: lawns, farms, scrub lots, empty fields, parking lots, laneways, etc. And as you move away from the city itself into the valley and the south it is just plain rural. The notion that there is any kind of land shortage here is laughable to anyone who has ever visited a city with a population of more than five hundred thousand.
August 22nd, 2010 at 11:37 am
@vreaa:
Sewer Sommerville says: The higher the population of a city, the higher the house prices.
Really, you fucking idiot?
The population of LA, Houston, Dallas, Phoenix and San Diego are far higher than Vancouver. Where are their high prices?
Conversely, you worthless cheerleading moron, Abbotsford has a small population but very, very high prices. AND PLENTY OF LAND!
Same with Kelowna.
Why is that, Mr. Sauder School of Bidness economist man?
August 22nd, 2010 at 11:23 am
There certainly are “myths” that need to be debated, such as:
1. Historically, Vancouver house prices do fall significantly after huge price increases that lead to high unaffordability and then prices here have become more in line w/ standard affordability measures comparable to other cities in Canada (i.e. around 37.5%-40% of income for housing costs) after huge price run ups (see early 1980s after the crash and mid-1990′s) – see RBC Affordability studies showing the historical numbers. http://www.rbc.com/…/house.pdf
2. If immigration of rich to Vancouver has been so predominant and that normal business cycle swings do not affect these people, why did Vancouver prices tank so much in so short a time in summer, 2008 – fall, 2008 – i.e. 25% drop in price of benchmark West Side SFH – see the graph at the bottom of this page from the Real Estate Board of Greater Vancouver: http://www.rebgv.org/housing-price-index
And, in the past few years, immigration and population growth has been below historically high levels of the early 1990′s. Vancouver had more than twice the immigration during the early 1990′s (during the Hong Kong exodus – and those were rich Chinese). We are at about 1.7% population growth for BC right now which is low to average, historically. See BC population growth amd immigration numbers: http://www.central1.com/…/ec … 2%20BC.pdf
3. There are far more densely populated cities with far less developable land (i.e. Manhattan, London, UK) that suffer significant prices declines after bubble pricing. And Vancouver house and condo prices have now actually caught up to and in some cases surpassed these city’s prices (an unprecedented event) in absolute terms and relative to incomes and wealth. See also the latest Demographia 2010 Study ranking Vancouver as the most “Severely Unaffordable” city out of all worldwide cities it ranks (including London, UK, NY etc…), which is also unprecedented, yet our geography (as cited by Tsur Sommerville et al) has remained constant throughout time: http://www.demographia.com/dhi.pdf
4. Comparisons to Other North American Cities:
Here is some more data from the rest of North America (i.e. the US) that shows that stark contrast with Vancouver and how truly out of wack Vancouver house prices have become, even on a “worldwide” scale (keep in mind that the avg. sale price of a SFH in ALL of Greater Vancouver, from Maple Ridge to West Van is around $1.0M).
These are examples of so-called “unaffordable” cities in the US – less than HALF the price of Vancouver (in great, “worldclass” cities like San Francisco, LA etc.).
money.cnn.com/…/index.html
5. What $1,0M buys in the US:
Another example of the stark contrast with Vancouver, $1.0M buys mansions in the US, but in Vancouver it is a very mediocre home. See for example, the brand new luxury hi-rise 2 bedroom, 2.5 bath condo in NY for $1.0M, 1,350 sq.ft. – that’s only $740/sq.ft.. In Vancouver, even in the downtown eastside (Woodwards) was going for as high if not higher (i.e. $800+/sq.ft.). Olympic Village condos are being priced in the $1,000+/sq.ft. and the Fairmont Waterfront luxury condos hit $2,500/sq.ft. according to Bob Rennie.
http://www.cnbc.com/…/38453550
6. Historical Vancouver House Prices Statictics:
This is a great source for Vancouver housing market historical stats on prices, rents etc..from the Sauder School at UBC (where Professor Sommerville teaches and researches):
cuer.sauder.ubc.ca/…/van_res.html
Note the periods of significant nominal and real (ie. inflation-adjutsed) price declines persisted in Vancouver after periods of high unaffordability (i.e. after the early 1980′s and early 1990′s). So, Vancouver is not immune to the laws of economics.
The Vancouver market has recently slowed down considerably – is this a sign the overheated, out of wack prices (even on a “worldwide”scale) are taking a toll and, in reality, Vancouverites (not rich foreigners) are the vast majority of buyers that are stretched to the max after a frenzy of irrational buying financed by ultra-easy money/credit? Then again, as the rest of the world and the US examples have shown, it is impossible to predict the timing of the end of a bubble….but when it happens it can be devastating.
August 22nd, 2010 at 10:59 am
Some great stories on this thread and we’ll be archiving them at VREAA over the next few days. The Sun article is interesting from numerous POV, not least of all Andy Yan’s opinion.
But one can’t resist commenting on the Sommerville quote/argument:
—-
“The Land Is Water” and other bullish arguments
http://wp.me/pcq1o-1eM
Tsur Sommerville, of the UBC Centre for Urban Economics and Real Estate, shows long term bullish insistence, largely based on the ‘ongoing overwhelming demand’ argument. It emerged most recently as the following convoluted statement [Vancouver Sun, 21 Aug 2010] -
“Depending where you draw the circle, 70 per cent of the land isn’t developable. It’s mountains or water or the United States. The higher the population of a city, the higher the house prices. If we lose 70 per cent of the land, our metropolitan area of two million will have the same house prices as a seven-million metropolitan area. Because people have to commute the same distance.”
[The argument is bizarre, and fallacious. Let's extend this: If we lose 90%, a population of 6ooK; if we lose 99%, a population of 60K; etc... By this reasoning, the smallest community perched on the minutest piece of the most undevelopable terrain in the world should also have the land prices of a large metropolitan area. But who'd want to live there? If you do buy the argument that geographical restrictions limit the growth of a young city (in this case, Vancouver), and it thus never develops the industry, the activities, or the appeal of the larger metropolitan area, why should its land prices rise to those of the metropolitan area? -vreaa]
August 22nd, 2010 at 10:54 am
I agree, let it blow up on it’s own.
You sound like a beggar writing those letters.
“Please, please lower your price!”
Think they really give a shit?
When it hurts, they’ll lower the prices and the more that do it at the same time the more spectacular the blow up will be.
August 22nd, 2010 at 10:36 am
“Hi again,
I recently suggested sending a reasoned email, based on logic, comparables, etc. to the marketing managers of real estate developments suggesting that the only “perk” that is important to sell the development is a lower price”
Not a good idea. Leave it alone. It will blow up on it’s own, and it will be much more spectacular.
August 22nd, 2010 at 10:02 am
It will be a while before we have a story like this in Canada, but Canada always catches up with the States sooner or later.
http://www.npr.org/templates/s.....amp;f=1001
August 22nd, 2010 at 9:54 am
You know, it should really be all about happiness.
I think a lot of the Vancouver – trashers are just pissed off because the RE marketing machine has been relentlessly pumping RE = happiness. They’ve spent 10 years telling Van residents they SHOULD be happy because of the Olympics, mountains, stanley park etc. Then they convinced residents that only Van homeowners are happy. People bought it hook line and sinker. Think of how many amateur landlords strut around and consider their tenants as landless peasants. In any other industry customer service is paramount but in terms of Van rentals, customers are supposed to suck it up and accept whatever mouldy residence they can find.
It’s going to take a good 5 – 10 years for the whole real estate bubble to unspool and during that time what defines happiness in Van is going to change considerably.
Speaking as a guy who loved Van but left, I say figure out what REALLY makes you happy, then go and do that thing. I found several great employment opportunities, an excellent residence at a great price, good friends, a great sport (rowing) elsewhere.
I guess I’m saying do what makes sense for you. If you live in Vancouver and you hate it, find happiness somewhere else. If you’re a bear and you expect things to return to normal in Van any time soon, well…. you might want to take a second look. It’s going to be years before prices fall into line, and that’s the sad truth.
August 22nd, 2010 at 9:09 am
Hi again,
I recently suggested sending a reasoned email, based on logic, comparables, etc. to the marketing managers of real estate developments suggesting that the only “perk” that is important to sell the development is a lower price.
The first email I sent was to a strata developer asking for more “up to date” pricing. The first one I sent I got a reply that “there is a lot of interest at the current prices”, and if I wanted lower prices I’d better get used to the idea of buying an old unit somewhere else. I chuckled to myself, thinking, “she would be bragging about sales if the price was already right”.
A couple of weeks later, I revceived an email from her that she was planning to:
1) include HST
2) drop the prices by 10k (280k initial ask)
This is a substantial decrease in price. Initially, these requests may cause them to be standoffish, but if you co-respond in good faith, you will probably be brought up at the next managers’ meeting.
She could have thrown in a “yaris and and all inclusive”, but in this case, she started in the right direction. I believe that my quick email may have been a slight “balance tipper” that caused the developer to choose concessions that result in a change to the comparables.
SEND THESE EMAILS!
ARGUE REASONABLY with lots of quotes that can be brought in front of decision makes.
Repeat after me:
We do not want “perks” we want lower prices
We do not want “perks” we want lower prices.
August 22nd, 2010 at 9:05 am
@jesse:
Total items CPI is up 0.0%, that’s awfully close to deflation.
BC is struggling and lagging the rest of Canada.
August 22nd, 2010 at 8:14 am
“When the economy is performing weakly, immigrants still come,” Muir says. “This not only bolsters our population, but also housing demand.”
And: “Our immigrants tend to be the cream of the crop,” Muir says, citing statistics showing 55 per cent of Canada’s investor immigrants come to B.C., mostly to Metro Vancouver
It is not my intention to knock the immigrants, but the reality is that they mostly come from 2nd an 3rd world countries.
They don’t come from France, Germany , England, or the US. They come mainly from………..
As for investor immigrants, please give us some details, or do they want to keep it quite that the bulk of invensting is in a “everything for a dollar” store, which gets sold off to another “investor immigrant” as soon as the time requirement is met.
August 22nd, 2010 at 8:10 am
If anyone travels to some major Chinese cities, be a dear and do the old “count the lights on at night” test on some apartment blocks there.
At Least Half of Apartments in Shanghai, Beijing Are Vacant, Daily Reports
Property. Safer than a bank. Safer than gold.