Don’t say ‘bubble’
The term is all over the news right now: Canadian Housing Bubble.
All because some nerds at the CCPA issued a report saying the six largest Canadian markets are in bubble territory.
Even the trust-worthy local Vancouver Sun is obscured by dark clouds and using headlines like “Vancouver real-estate ‘bubble’ an accident waiting to happen“. The Globe and Mail has pretty pictures charting different scenarios of home price collapse and there’s more coverage at Canadian Business Online.
The steep rise in house prices in so many cities points toward an “accident waiting to happen,” Macdonald said.
In the past 30 years Canada’s housing market has undergone three bubbles. Bubbles occur when housing prices increase more rapidly than inflation, household incomes and economic growth, according to the report.
Each of Canada’s previous bubbles was punctured by only a one per cent rise in interest rates over two years, Macdonald warned.
It would take only a one per cent to 1.25 per cent mortgage rate increase by Canada’s big banks to cause a housing crash similar to the one the U.S. is grappling with, he added.
Vancouver saw housing bubbles in 1981 and 1994 and another one burst in Toronto in 1989. In Canada’s other major markets — Calgary, Edmonton, Ottawa, and Montreal — prices remained stable from 1980 to 2001 at around $150,000 to $220,000 in today’s dollars.
“The concern today is all six major markets, not just Vancouver and Toronto, are out of that comfort zone,” Macdonald said. “All six major markets now have an average price of over $300,000.”
Judging by the recent signal to noise shift in the comments section on this blog, some people are getting a bit edgy about all this negativity. Even the CMHC is predicting falling sales and dropping prices for pete’s sake!
But take heart! There’s good news – a conflicting report from the C.D. Howe institute says no problem, there’s little likelihood of a national Canadian housing bubble.
..and if there isn’t a US style national housing bubble, then there can’t be a housing bubble here in Vancouver right?
Also! August is over and I hope you got all that yard work done because there are some houses out there to buy. We’re breaking records for low sales this month of new units in Vancouver West as well as units in Port Coquitlam and Maple Ridge.
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September 1st, 2010 at 2:40 am
August sales down -36%
Aug
1994 = 2159
1995 = 2326
1996 = 2141
1997 = 2096
1998 = 1589
1999 = 2002
2000 = 1805
2001 = 2659
2002 = 2558
2003 = 3413
2004 = 2570
2005 = 3800
2006 = 3092
2007 = 3493
2008 = 1611
2009 = 3496
2010 = 2236 down 36% ***Aug 31
Unit sales August
2009 = 2010 = %change = area
5 = 4 = -20% Bowen Island
38 = 40 = +5% Burnaby East
195 = 118 = -39%% Burnaby North
189 = 137 = -27% Burnaby South
290 = 130 = -55% Coquitlam
7 = 7 = 0% Islands-Van. & Gulf
36 = 22 = -38% Ladner
196 = 109 = -44% Maple Ridge
133 = 84 = -36% New Westminster
234 = 143 = -38% North Vancouver
41 = 23 = -43% Pitt Meadows
117 = 59 = -49%% Port Coquitlam
84 = 54 = -35% Port Moody
480 = 336 = -30% Richmond
37 = 31 = -16% Squamish
77 = 57 = -25% Sunshine Coast
39 = 36 = -7% Tsawwassen
388 = 229 = -40% Vancouver East
801 = 512 = -36% Vancouver West
80 = 61 = -23% West Vancouver
20 = 42 = +110% Whistler
September 1st, 2010 at 6:58 am
So what does the CCPA propose? An orderly unwind of the bubble of course. I guess any organization with “policy” in its name will look to policy to solve a problem. Good luck with that one.
September 1st, 2010 at 7:43 am
The August numbers are a disaster for the realwhores. The reaction from the ‘industry’ has been predictable…deny deny deny. Bwahahahahahahahahahahahha…it couldn’t happen to a more deserving group of parasites.
I have a request though…..realwhores….leave the McD’s jobs for the kids…you’ve done enough damage.
September 1st, 2010 at 7:43 am
While crash is a once in life time experience in every single person’s life,It’s fun to read this word bubble everyday.
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If you have to choose a highway in your life from the multiple routes,5 north interstate Vancouver BC is the road to be taken.
September 1st, 2010 at 7:49 am
@realpaul:
Yatter reports the average being extremely close to the Million mark again.
http://www.yattermatters.com/2.....more-20375
I’m very interested in the median numbers that I think would tell another tale.
September 1st, 2010 at 7:50 am
@House: Agreed.
For an ‘orderly’ unwind, you need a lot of things that ain’t gonna happen; not least of which is an ‘orderly’ supply of buyers over many years willing to take on still very overvalued assets that are steadily falling in price.
September 1st, 2010 at 8:03 am
The article states, “In Canada’s other major markets — Calgary, Edmonton, Ottawa, and Montreal — prices remained stable from 1980 to 2001 at around $150,000 to $220,000 in today’s dollars.”
From realtor Mike Fotiou, I found that “During the early 1980′s boom/bust, Calgary average house prices peaked at $110,184 (Total MLS) in January 1982. Prices bottomed out in November 1984 at $68,322 – at 37.99% drop.”
I don’t have numbers for Edmonton, but assume that Edmonton had a similar experience since the province of Alberta (not only Calgary) has a history of boom/bust cycles. In any case, the article’s claim that prices remained stable is a load of crap.
September 1st, 2010 at 8:18 am
Uh oh bears, average price back at $1 million. This is not start of crash. Bears wrong in timing again.
September 1st, 2010 at 8:22 am
Dear SuperSmugBull,
You live in a fantasy.
“Do not argue with an idiot. He will drag you down to his level and beat you with experience.”
That pretty much sums you up.
September 1st, 2010 at 8:24 am
@Junius: Please Junius go back to Garth site and argue with yourself, you are embarrassment to bears.
September 1st, 2010 at 8:25 am
I’m an American living in California. So to say the least I’ve seen firsthand what a housing bubble inflation and deflation looks like. I just looked up some numbers and the median home prices in Canada.
Vancouver was $638,000.
Toronto was $409,000.
Calgary was $382,000.
The median income in Vancouver is around $80,000, or a 8.1Xs annual income to cost of housing ratio.
The median income in Toronto is $51,000, – also around 8X’s annual income to cost of housing
The median income in Calgary is $82,363, or around 4.6X’s annual income to cost of housing.
At least in the US and I imagine similarly so in Canada and elsewhere a healthy housing to income ratio is determined to be around 3X’s median annual income. Thus if that be the case Vancouver is around 2.5 times that amount and so too is Toronto with Calgary being somewhat moderately over the 3X’s median income number.
We saw this occur in the US- particularly in California where I live where at the peak the multiplier was around 6X’s median income in places like San Francisco.
September 1st, 2010 at 8:27 am
Junius II,
What are you doing off of e-harmony? Won’t your cybergirls miss yo?
September 1st, 2010 at 8:49 am
ts561rs,
You are high on your income estimate for Vancouver and low for Toronto.
The average household income (meaning dual incomes when available) is under $70,000 and declining. I think your house price estimate is low as well.
The Vancouver number is north of 9.0 putting the market over priced by at least double the historical average.
September 1st, 2010 at 8:51 am
Junius II,
I am still waiting for something original from you. I guess if you have to copy someone else’s moniker you can’t achieve that. I know expecting something intelligent is too much to ask for.
September 1st, 2010 at 8:59 am
Junius ,
Thanks for the correction. I’m not as familiar with Vancouver or Canada as much. But I will say we’ve been hearing about Canada’s bubble for awhile. That and Australia’s. One article I read put Vancouver and Sydney AU as running neck and neck in regards to lack of affordability. As mentioned, at the height of our bubble one of the most expensive cities in the US was San Francisco. Interesting because in many ways I’ve heard its similar to Vancouver: Desirable weather… high-tech jobs, etc etc. Yet in SF the income to housing ratio got to a little over 6X’s income at the peak and yet Vancouver is at 9X’s.
I’m not familiar enough with Canada’s mortgage, lending, and financial industries to know how this bubble compares to ours. But that multiplier seems high.
September 1st, 2010 at 9:00 am
The thing about ‘averages’ in real estate is that they don’t give you the details of the sample. There are far fewer sales (40%)so the numbers of the averages are skewed widely by the few sales that are taking place. It only takes one bozo who wins the lottery or drifts in with drug money from China, India or the Kootneys to skew a sample of sales in any particular micro market . Averages, as we all know are the opiate of the realwhores, in fact they mean nothing. One million dollar sale in a sample of ten sales where nine of the units sold at 100,000 make the ‘average sale value 190,000……not a very accurate measure of the market is it? Yet the realtards, with all 5 weeks training in real estate economics, constantly quote the ‘averages’ when few knopw how the stats are complied or what they mean.
September 1st, 2010 at 9:07 am
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……..(‘(…´…´…. ¯~/’…’)
………….”…\………. _.·´
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Shouldn’t that message be for Rob Chimpman?
September 1st, 2010 at 9:14 am
that middle finger drawing is awesome
thanks so much
I think I’ll be able to email it to several people a day
September 1st, 2010 at 9:17 am
One question I had was ( and in advance I apologize for my ignorance of Canadian geography) but if you lived somewhere like Vancouver where its really expensive, are there many 2nd-tier cities with cheap prices? For example, during the bubble houses were around $600,000 in the San Fran Bay Area but nice house in Dallas could be had for $120,000. Both major cities. Both with healthy economies, but with grossly different costs in living. In many ways its still the same, which is why my wife and I are probably moving elsewhere in the next few years.
As far as how our bubble in the US deflated, it began with a recognition of the bubble, then slowing sales, then the fantastic crash once all those exotic low interest loans began to fail and the foreclosures began. That said… I have to say that while prices fell dramatically in the far-flung burbs and less than desirable areas, prices to this day in even semi-desirable areas here are still pretty high. For example houses in the Bay Area city I live in were maybe $620,000 at the peak and are now maybe $500,000 now. In other words- cheaper but still overpriced. But prices have basically stayed flat for 3-4 years so far and show no signs of moving.
September 1st, 2010 at 9:19 am
#13 Junius, right…statscan has BC wage (family type) in the most recent cencus at $65780. I agree that this is in decline due to increases in immigration and the job loss stats building since the onset of recession and the growth in welfare. The numbers are going to be worse now that housing is grinding to a halt, especially in the private sector…..82% of the economy.
A back of the napkin ( anal retentive realpaul haters who think that beating me with nuances and minutea please chime in) calculation has the disposable after tax income of this tax bracket at a tad over $44,000.
This makes the traditional price/earnings ratio of a SFH in Vancouver 22.72 times earnings ( based on a one million dollar ‘average for a SFH)……not the 9-10 times that is being oft quoted by the whores. They have tried to hide this fact that the ratio is and always has been based on SFH’s and not the catbox condo’s which they use instead to disguise the horrific reality. The price/income ratio as quoted in all other markets ie ‘the US’ is always based on the SFH and not the ‘condo’ alternative…..smoke and mirrors again from the realwhores eh?
Apples to apples its worse than they are letting on by a factor of 2…..but that number wouldn’t be very good for public consumption would it…sssshhhhhhhhhhhh the realwhores don’t want you to know.
http://www40.statcan.ca/l01/cs.....8a-eng.htm
September 1st, 2010 at 9:23 am
@ts561rs: In Canada the government is underwriting all the high ratio loans, which is now virtually every loan, so the bubble extends to every major city and is even in some smaller towns. Vancouver is just by far the craziest place. Real estate is a large part of the city’s identity.
September 1st, 2010 at 9:25 am
The average is a surprise, but cannot be considered bullish as a standalone statistic.
As mentioned above, it is volatile depending on the sales mix. Particularly in a city such as Vancouver which has such a high percentage of properties priced between $1 Million to $2 Million.
You could simply have a number of higher-end properties falling in price and being sold, while lower priced properties remain sticky. This is common given seller psychology – and as the market for high-priced properties is more sensitive than lower priced ones.
If it is found correct by the REBGV, and then confirmed by the Median and more importantly, by the Benchmark, then it is a day for the Bulls.
September 1st, 2010 at 9:29 am
Canada vs Ireland and the world…an excellent study..if you have the time to read it.
http://theautomaticearth.blogs.....anada.html
September 1st, 2010 at 9:31 am
I just looked out of my window and I think I saw a flying realtor!
September 1st, 2010 at 9:36 am
I guess this guy watched the news last night:
v848057
Just listed the townhouse at $699,900
Last listed March 13 2009 to June 8 2009 for $649,000
I don’t have the prior sales record (no MLS access anymore) but am guessing the seller bought at the peak in 2009 and is now pricing just high enough not to take any losses. Too bad identical units have been listed recently at $678/sqft (still way to high IMO) vs. the current listing of $715/sqft.
When will people learn that to sell in a “buyers” market you need to price at or preferably BELOW market value!
Anyway, I’m going to enjoy watching this sucker hold out for too long and end up taking a loss when they sell for less than they could of now if they just priced competitively; greed and karma baby!
September 1st, 2010 at 9:37 am
San Fransisco down ~20%? I don’t think so, June 2010 Case Shiller below:
http://img831.imageshack.us/im.....prices.gif
And like the rest of the US market once the impact of the emergency stimulus dissipates it has much more ‘whocoulddaknown?!’ room left to fall.
September 1st, 2010 at 9:41 am
@Nero:
I’m actively watching “higher end properties” downtown (waterfront townhouses) and let me tell you, they are not selling. In fact, as I stated the other day, the average waterfront townhouse is on the market for a year before it sells!!! This isn’t something new though as mine took 8 months to sell in 2006 when real estate was still moving fast.
As for price drops, they seem to occur every 6 months; I wonder if people are even living in these units or why the agents bother to list other than to make it look like they are high roller’s to other potential clients.
September 1st, 2010 at 9:47 am
Yes… we in California all saw that Schiller report about a rise in prices in San Francisco. Only problem is that those numbers were for a period where there was not only a national tax incentive of $8,0000, but an ADDITIONAL California tax cut of $10,000, thus almost $20,000 in incentives. Both of those are gone. Every indication shows prices falling from there on out.
September 1st, 2010 at 9:49 am
Sales down 36% yoy but still 28% higher than in 2008 during the price correction. Interesting yet so boring at the same time, gotta love RE.
September 1st, 2010 at 9:53 am
“One question I had was ( and in advance I apologize for my ignorance of Canadian geography”
How uniquely American of you.
September 1st, 2010 at 10:00 am
How uniquely American of you.
Like I said- I admit my lack of knowledge of Canadian geography. I wouldn’t expect Canadians to know the ins and outs of the US either- like knowing the wonders of Greensboro North Carolina or Paris, Tennessee.
September 1st, 2010 at 10:11 am
My parents live in Queens Park, New Westminster. Four years ago, a neighbour (a friend of my parents) died and her decent-quality house was sold by her estate.
My parents wondered who their new neighbour would be. Months and then years went by, and nobody moved in. Speculation in my family was that it was owned by a wealthy Hong Kong family as one of those escape-pod houses in case of trouble in the homeland. It seemed like a fair explanation, even to me.
Zoom ahead to the present. This house has been totally empty for four years. It hasn’t even been rented, and could fetched (as a very conservative estimate) at least $2000 rent. Its within a short walk of a respected elementary school.
The other day, we noticed renovators working on the house. My parents asked a well-connected friend about the house and were told it is a owned by a local realturd and has been for a few years. No rich Asians involved.
My Dad was curious so he talked to the renovation workers. This house is not being fixed up to be sold. It was originally supposed to be ripped-down for a new house. It is now being renovated to be RENTED OUT :^O
That realturd must have deep pockets to leave a decent house in a nice area empty with no rental income for FOUR YEARS. I don’t understand…
September 1st, 2010 at 10:13 am
Ha Ha! Prices are up! Listings are down. Sales down but the MOI continues to fall. Maybe Dumb Bear not realize it not matter how few sales there are when there are few good homes for sale. Buyers smart bought in dip. Now dip is over and that make Bear go crazy. What will Bear do to explain fantasy now?
Dumb Bear.
September 1st, 2010 at 10:16 am
This is Bear reality: Fantasy is that bubble will pop but reality is melting away fantasy. Dumb Bear will soon drown. Rent cheque due today, Bear! Pay up!
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September 1st, 2010 at 10:17 am
Sorry. Bear Art failed to load properly.
September 1st, 2010 at 10:18 am
Why that not load?
September 1st, 2010 at 10:21 am
@BadNewsBears: We have a winner! The biggest loser on the internet! You have WAAAAAYYYY too much time on your hands Mr. Loser! Summer is almost over, if you hurry you may still get to see what we the living refer to as “a girl in a bikini”. Quick, turn off your Mom’s computer and find your way out of the basement (for god sake man, put on some pants)
September 1st, 2010 at 10:26 am
Man this blog is like a throwback to 2005 in California. There were a LOT of housing blogs and they were full of both types of people- those who said there was no bubble and those who said there was. There are a lot fewer now because the bubble did in fact pop.Thus there’s less to talk about.
September 1st, 2010 at 10:36 am
check out van sun article by craig Mcinnes “A Home you like, can afford trumps the market”. Front page below the fold. He argues that even if prices are high low interest rates make things affordable. he then compares the interest paid on a 3% mortgage FOR 25 YEARS to a 6% rate. where in canada can you lock in a rate for 25 years?! the ignorance is incredible. The pumpers are panicking.
the article is available online too.
September 1st, 2010 at 10:36 am
This morning @ 7:00 AM I deliberately watched the “GLOBAL Canwest” TV news because it’s sponsored by REMAX and as a result, they are the biggest RE pumper channel in my neck of the woods (Calgary) except for HGTV of course…….
The anchor said that “yesterday there was a report that Calgary and Canada may be in a housing bubble and prices may drop by 30-40%”………there was no explanation for that statement, no conditional analysis of our market, etc……they cut straight to the parade of talking heads…..
First, the stereotypical CMHC liar, and then and a bunch of commentary from “the experts” (read: commission paid realtors) telling us that there was nothing to see here, everything will be OK, keep buying, all RE is local, there is no distressed market, all you are going to see is just a few distressed homeowners (DUHHHHHH…..a market consists of the people who buy the things, not the actual items themselves)….etc….etc….
ROTFLMAO……!!!
September 1st, 2010 at 10:37 am
@ts561rs: Are you seriously equating Paris, Tennessee to Vancouver as similiar in that foreigners may not know much about them?
Come on.
September 1st, 2010 at 10:39 am
[I'm posting again for visibility]
For anyone who wants to automatically ignore foreclosed comments, I have posted instructions in the forums at http://vancouvercondo.info/for.....d-comments
I think this will make the blog more usable for many, and likely help steer the trolls away.
September 1st, 2010 at 10:43 am
@ts561rs: Are you seriously equating Paris, Tennessee to Vancouver as similiar in that foreigners may not know much about them?
Come on.
No… Not at all. I’m familiar with major Canadian cities on par with what I expect anyone would be with any major city around the globe. Its just the the initial response I got was your typical ” Oh- another stupid American who knows nothing about Canada” remark. I had already premised my comment with an acknowledgment of my lack of knowledge pertaining to minor Canadian cities… in much the same way I imagine Canadians are also lacking in their knowledge of minor US cities.
Either way, this is a fruitless argument.
September 1st, 2010 at 10:43 am
People need to get their heads out of their asses. NEWS FLASH a lot of the US and most of the world not only don’t know much about Vancouver if at all, but they don’t give a shit either. It’s just a city in one of the most under the radar countries on the planet ( not bashing here, love Canada and Vancouver, just a fact)
Stop bashing the American, makes us look like a bunch of idiots.
Stick around ts561rs , it’s nice having someone here who experienced directly the bubble down south
September 1st, 2010 at 10:46 am
@KopyrightKleptoKlutz Why you want to “ignore” foreclosed comments? Is it because they remind you of foolishness on your part while staring at mirror make you feel better? Bear foreclose comments here because Bear does not like truth. The honey bubble is bears fantasy and getting to it make bear feel good even if each and every time they do it stings them.
Dumb Bear.
September 1st, 2010 at 10:51 am
@ ts561rs, not all Canadians have a stick up their ass about Americans. Sorry about the rest.
Agree with the impact of the incentives, didn’t know the Guvernator did his part on top of it. The rest of the year will be a very interesting but removal of the federal market distortions are the best thing that could happen to either nation to get us back on track globally.
September 1st, 2010 at 10:51 am
@ts561rs: Howdy pardner, welcome to bitter DougieDog Downer Blog. Please use sparingly, many bear here have abandoned careful analysis and instead use this blog to complain about everything in Vancouver, city worker pay, tipping, rude people, bad weather, and lack of nice beach. They generally show complete disdain for fellow Vancouverites and are not representative of average Vancouver resident.
Question, why is an American living in California interested in Vancouver Condo Info?
September 1st, 2010 at 10:55 am
“Stop bashing the American, makes us look like a bunch of idiots.”
Gee, wouldn’t want to do THAT!
Stick up for them all you like. And their foreign policy too, while you’re at it.
September 1st, 2010 at 10:59 am
@KopyrightKlepto: Thank you SO SO much KK!
September 1st, 2010 at 10:59 am
@Boombust:
Holy crap, now we have to bring foreign policy into this? Man, some people have some real issues when it comes to all things American. There are lot’s of things I can complain about when it comes to the US, but I’d rather talk realestate and ts561rs can have some good insight into bubbles and the mentality of them.
September 1st, 2010 at 11:05 am
why you mad? If prices are going up why dont you spend your time buying more condos?
September 1st, 2010 at 11:06 am
“And their foreign policy too, while you’re at it.”
Hey, don’t confuse the policy with the individual. For instance, do you want to be held responsible for Canadian housing policies?
September 1st, 2010 at 11:08 am
@SuperSmartBull: I think I would feel I’ve wasted my life if I spend 12 hours a day including weekends trying to obstruct a free discussion forum instead of going out and having fun occasionally
September 1st, 2010 at 11:09 am
Does anyone have any stats on the number of new housing/condos built in the BC lower mainland in the last 10 years? We should be able to compare the number of new homes/condos vs. the increase in population and see if there has been more homes built compared to people moving here. According to these articles the under-supply of homes is only getting worse but there are never any numbers to actually back it up.
September 1st, 2010 at 11:10 am
“And their foreign policy too, while you’re at it.”
Hey, they’re the ones who can vote for idiots like Bush, et al.
Sarah Palin anyone?
Talk about a brainwashed nation.
September 1st, 2010 at 11:12 am
@buff_butler I don’t buy condo. I buy houses and building. Buying one condo is for fool. Owning whole building and collecting your rent and laundry change is for champion. Owning land is for champion. Owning sliver of land under leaky building is quickest way to poor-house… maybe even quicker than just renting.
Think like monopoly! Buy houses and then upgrade to building. There is lesson for you bears.
September 1st, 2010 at 11:16 am
Jonathon Says: According to these articles the under-supply of homes is only getting worse but there are never any numbers to actually back it up.
Isn’t that all you really need to know? Don’t get sucked into what’s apparently becoming a standard industry ploy of making unsubstantiated claims that are left for others to disprove before moving to the next. Slot “not enough homes” with “only driven to church on Sundays” until you see proof.
September 1st, 2010 at 11:23 am
@buff_butler: ya, but you would own a condo in Vancouver! thats a fair and reasonable trade is it not?
September 1st, 2010 at 11:31 am
I think once Vancouver shit head owners get their teeth kicked in by the market forces and start eating canned tuna and macaroni salad on a daily basis my life will finally be complete. Would I ever buy a house in Vancouver? No way pal I’m not stupid. Renting is way cheaper in the long run and Vancouver is just too shitty a place to ever own a piece of.
September 1st, 2010 at 11:36 am
If I like a post, will mark it as FORECLOSURE.
That way the post gets more attention.
I like bears here do that for my post
heheheh
September 1st, 2010 at 11:42 am
@ts561rs: Don’t worry, there’s no shortage of Canadian idiots too (as the bulls on this blog attest).
September 1st, 2010 at 11:47 am
@buff_butler:
Haha, good comment, nice irony. Isn’t it bears who want to block all bull comments? That is not free discussion. Bears here see all opposing view as Realtor or troll.
Why do bear need free discussion here anyways? They already ‘know’ how everything play out with Van RE market.
September 1st, 2010 at 11:52 am
@Patiently Waiting: “his house has been totally empty for four years. It hasn’t even been rented”
There are a few vacant houses around, though it’s much more common for condos to be vacant. I’ve seen the same thing in Asia, where condos and even large houses are bought and just held vacant for long periods of time. In many cases it’s not a major burden, as upkeep fees and council taxes aren’t outlandish. One owner I know has a multi-million dollar property on a large lot that sits vacant. He originally bought it for his extended family to live in, but they were too busy speculating on other properties to move in with him LOL.
I’m convinced property is treated much like a bank account with relatively high annual fees. I think that’s a mistake.
We’ll be finding out how strong the stomachs of these owners are in the next few years.
September 1st, 2010 at 11:54 am
@SuperSmartBull: If you don’t like this forum then why don’t you go away? The internet is full of sites where you can post pics of animal genitalia. So many options, so much free speech.
September 1st, 2010 at 12:01 pm
@jesse: “I’m convinced property is treated much like a bank account with relatively high annual fees. I think that’s a mistake.
We’ll be finding out how strong the stomachs of these owners are in the next few years.”
I’d guess those fees are going to increase in the next few years if housing construction slows down. City councils are going to need more property tax revenue.
September 1st, 2010 at 12:03 pm
@jesse: Related anecdote, when we were travelling in Turkey a few years ago, the country was dotted with vacant, half built homes. According to locals, people use homes as a hedge against inflation, which was very high in the past. When people get a chunk of money, they build a wall or install windows or whatever rather than put it in a bank or mattress. They plan on finishing the house for retirement. Also interesting is that rooftop solar hot water heating systems are very common there. At a couple grand a pop and a 5 year payback, I’m surprised they’re not more prevalent here.
September 1st, 2010 at 12:08 pm
@Purp:
You sorta need sun for them to work
September 1st, 2010 at 12:15 pm
@jesse:
You’d be amazed at how many empty/abandoned houses there are in Vancouver. You can’t walk more than a few blocks without seeing one or two. And it’s not like they’re in crappy ‘hoods. I live in Kits, and just around the corner from me are at least two that no one has lived in for years.
I think they go largely unnoticed because everyone in Vancouver drives everywhere, so they just go whizzing by. But if you ask a neighbor you usually get the same “it’s owned by overseas Chinese” story. If this is true or not is impossible to tell without doing a title search.
What the real story is, is anybody’s guess.
September 1st, 2010 at 12:16 pm
I heard the premiers brother Mike on the radio today talking about why the BOC shouldn’t think about raising rates….all because real estate would suffer…..because the RE market in the US is still too soft….as if low rates have juiced the US market?
Point being…pimps like Mike and his brother are both politically tied to the developers who financially support them. The very narrow perspective of ‘real estate is the entire economy’ is of course at the heart of the BC Liberal economy. Low rates have not stopped the bubble prices bursting in every other jurisdicton….the pimps bring up ‘deflation’ when we all know that term does not relate to real estate in any way…prices have moved unrealistically high due to a manipulation of rates and criminally loose lending standards….it didn’t help the economy at all, the rates only served to fill the small time developers pockets, otherwise commercial real estate vacancies and corporate profits are at all time lows.
What we do have is rampant consumer price inflation in food, energy, housing, tax, fee’s, insurance, transportation, credit and debt…that is whats really got to be bothering the BOC…we face a total collapse of the economy if debt increases past 100%….and we’re damned close to that now in aggregate. Like it or not the government has to slow things down so that consumer prices are reigned in. The flip side of ‘housing deflation’ is the increasing value of all commoditities now that the pendulum has swung away from RE sector investment and the knowledge that papering over the issue isn’t working. The Chinese sure get this…I’m sure Carney and the boys do too.
Debt is cheap for the government, it buys its own bonds and mitigates the effects of the debt thats piling up, but that currency is becoming increasingly worthless and Canada has been twice warned by the IMF to cut back, it can’t do that if savings continue to go up and spending ( revenue) contuinues to plummet. Real estate prices are the least of the BOC’s problems right now….the local pimps that are neck deep in the real estate shit want to lobby the opposite….they have more to lose. They don’t want to publicly admit that real estate is dead and will be for at least a decade or more.
I think the BOC will throw the Realwhores under the wheels….the market in BC means little to the political whores in Ontario. But it doesn’t stop there…read this….
http://gonzalolira.blogspot.co.....appen.html
September 1st, 2010 at 12:18 pm
@ jesse. I see quite a few houses in the Oakridge area that are furnished but appear permanently empty. Never any cars or people, packages sit on the porch for weeks, never any garbage out, lawns are dead and the yard work typically very rough.
September 1st, 2010 at 12:20 pm
@Patiently Waiting: “City councils are going to need more property tax revenue”
They already are scrambling. Look at them falling over backwards trying to appease developers’ demands for zoning and by law changes to meet the “obvious” housing shortage.
Permit revenue was extremely lucrative in the past few years for cities in the LM. Increasing property taxes above inflation is likely the answer for many cities, including Vancouver proper whose rates are low compared to other cities of similar size. But I’m pretty sure that’s going to be coupled with reduced staffing, lower wage increases, and reduced services, as we started to see in 2009 and earlier this year.
September 1st, 2010 at 12:22 pm
@ realpaul. Do home prices factor into Canadian CPI calculations? I thought they used a rent equivalent number, which since rents have risen anywhere close to the speed of home prices means a collapse of the purchase market would have minimal impact on CPI, and hence on measured deflation.
September 1st, 2010 at 12:23 pm
I know a guy who owns 16 houses. He’s a professional renovator and works part time at McDonalds too just for the discount. Anyway he told me yesterday he’s having trouble unloading some of his completed “projects”. Times are tough he said and he’s thinking he might have to work full time at McDonalds!
September 1st, 2010 at 12:30 pm
@Bubble Lad: “You’d be amazed at how many empty/abandoned houses there are in Vancouver. “
Probably not! I think this is a form of so-called “shadow inventory” that will contribute to the supply of dwellings beyond what is reported by under construction and for sale inventory stats.
The other thing to watch is a high level of under-utilized housing as the children of baby boomers have left home. I’m convinced there are many bedrooms unused that amounts to a significant amount of inventory that will start coming on the market (and probably has started).
Looking at the population data from established suburbs like Coquitlam and Burnaby show a population decrease in the past 10 years, almost certainly due to younger generations leaving home. Eventually that gap needs to be reconciled and, with prices increasing in the past few years, there has been little incentive for these older owners to sell. If prices drop, there will be more urgency to sell and downsize.
In short, units under construction and for-sale inventory doesn’t tell the whole story of available housing stock. There are what I’m sure are tens of thousands of under-utilized and vacant properties around that will be pressured into full capacity in the coming years. That will keep inventory higher than in past years.
September 1st, 2010 at 12:39 pm
…..As mentioned, at the height of our bubble one of the most expensive cities in the US was San Francisco. Interesting because in many ways I’ve heard its similar to Vancouver: Desirable weather………
Only a scuba diver would find Vancouver’s weather desirable.
September 1st, 2010 at 12:46 pm
http://www.vreb.org/mls_statis.....stics.html
Victoria 45% drop in sales. whooooooooo hoooooooo hooooooooooo
September 1st, 2010 at 12:50 pm
@Purp: …..
Also interesting is that rooftop solar hot water heating systems are very common there. At a couple grand a pop and a 5 year payback, I’m surprised they’re not more prevalent here. ……..
Just move to Vancouver this morning?
September 1st, 2010 at 12:51 pm
Extracted from Mike Fotiou’s blog regarding his preliminary stats for Calgary:
“The month-end average price for SFH was $445,617 … down 4.1% from July and down 1.9% from August 2009. The median was $395,000 … down 1.25% from both last month and the previous August when it was $400,000.
There were … 867 transactions, … down 32% from the 1277 in August 2009.
The average price of a condo in August was $286,384 … down 1.6% from July, but up 1.1% from August 2009. The median … dropped month-over-month to $260,000, … down $8k
Sales were down 42% year-over-year ….”
—
The big changes are in sales volumes. Prices will follow. People simply can’t buy, or are becoming cautious, or are beginning to see the light. The sentiment is changing in many markets.
September 1st, 2010 at 12:56 pm
@paulb fan: Victoria SFH MOM: -4.6%! MOI > 10! Wow, Slaughtersville.
September 1st, 2010 at 1:24 pm
Looks like Muir is still spreading his kool-aid, this time in Business in Vancouver, a publication I generally look upon in a favourable light.
http://www.bivinteractive.com/.....p;Itemid=1
September 1st, 2010 at 1:27 pm
@D. Bone: Obviously you don’t understand the technology. They are a low cost solution to supplement a gas fired heater with a pretty decent payback. You don’t need year round sun to make them work. Plus they are ‘green’, and a good hedge against future nat gas price increases. There’s a few around town, but not many.
Thanks for the snark though, appreciated.
September 1st, 2010 at 1:31 pm
http://www.yattermatters.com/2010/09/rewind/
I guess the real estate board will be coming out with GREAT NEWS this weekend, as average prices increased and have gone back to almost the million dollar mark.
So much the collapsing market in the most “unaffordable city.” Oh well, perhaps in another decade prices will have declined to the point where mere mortals can afford the paradise that is Vancouver.
Oh little bears, once again you had your premature ejaculation party over rising inventory and falling prices. It must be so hard to see prices go back up in August!
You guys have so much Schadenfreude that you keep jinxing yourselves.
Waiting for the 2015 “inventory parties”…lol
September 1st, 2010 at 1:34 pm
Looks like all those realtors coming out saying things are fine are right once again, eh bears?
All those news stories about a bubble that you were hoping would stampede the herd will be discredited once again little bears. So close yet so far…
Prices back up…
lol
September 1st, 2010 at 1:41 pm
@Keep Waiting: Yeah the numbers are looking great for the handful of houses that sold last month. Too bad for the owners of the thousands that didn’t.
September 1st, 2010 at 1:49 pm
#72 FG, real estate prices or rents have no place in the official CPI says the BOC, they’re too ‘volitile’ to track. Funny enough they say that about everything…gas, taxes. fees. energy, transportation, food etc etc that you use every day……instead the CPI consists of stable items like imported T-Shirts, computer keyboards, paint, machinery….and everything else that the consumer doesn’t consume on a regular basis. You ask “Why do they call it the ‘consumer price index’ if they don’t count anything that consumers consume?” You need to take a number to ask that question.
The price of these supposedly non volitile consumables is then wrung through a complex geometric model referred to as ‘hedonic measurement’ which further strips any fluctuations out of the ‘CPI’…this is how the BOC can always count the inflation number as between zero and one.
Don’t try to get an answer as to why the prices at the grocery store are doubling and tripling, gas is doubling, taxes are doubling, bus passes have doubled, etc etc etc……you’re a bad man if you’re questions bite too close to the bone. The official version is ‘ there is no increases in the cost of living in Canada’…..housing is not in a bubble….” shut up and stop listening to people like realpaul…they’re radical shit disturbers and we can’t have people thinking for themselves.”
September 1st, 2010 at 1:51 pm
Nice avg home prices from Yatters website again, bears, you are starting to look just plain silly.
September 1st, 2010 at 1:56 pm
I get a kick out of these guys asking the BOC to stop raising rates… the threat of rising rates was one of the Reaturd biggest weapons. “Buy now before rates rise”. Without that sense of urgency, what is going to stop buyers from waiting until they see if they got a raise or a bonus before deciding to buy?
September 1st, 2010 at 1:57 pm
@Jeff: Are you just trolling or do you really not understand the nature of the real estate market, and the effect of significantly lower sales on the mix of property being sold. There were people like you on the US-based housing blogs during 2005 and 2006 who also mocked bears during an analogous point in the RE cycle there. Be glad you didn’t purchase then.
September 1st, 2010 at 2:01 pm
Nice to see that the math challenged bulls are so clueless as to how to calculate ‘averages’. This latest release of ‘data’ is little more than a pimp shot trying to push back the tide of a grim reality. Whats really funny is that there are people still buying the top of the bubble as the market collapses…these are the ‘biggest losers’….every unit sold is another loser who had his head up his ass too long. What has actually happened is that everyone who bought a property in the past sixty days has lost money………………thats something to celebrate.
September 1st, 2010 at 2:02 pm
Last month average price drop $50K, bears party.
This month average price go up, bears logic filter short circuit and try to explain that average price not reliable indicator.
Too funny bear. SSB try to explain why not trust month to month average price data too noisy and better to stick to Teranet 3 month rolling average. But bear only want to cherry pick data.
September 1st, 2010 at 2:05 pm
@5 Vancouver BC: I remember making funny pictures with symbols in grade 8 and that was a long time ago.
September 1st, 2010 at 2:17 pm
Benchmarks, baby. Benchmarks.
September 1st, 2010 at 2:24 pm
@SuperSmartBull: “SSB try to explain why not trust month to month average price data too noisy”
How are you supposed to do that if we all filter your “Foreclosure” posts?
I happen to agree with you though. Using averages to measure trends is close to pointless unless it’s filtered up the wazoo. Even then its response is way too delayed to be useful compared to Teranet and the GVREB HPI.
September 1st, 2010 at 2:24 pm
hey !
I liked the fuck you middle finger drawing !
I sent it to a few realtors..
but they didn’t share my enthusiasm..
Hey “jesse”
where are thse abandoned Kits houses you mentioned?
I’m looking for a new rental as my place is getting bulldozed. THe owner is going to through up a 2 story clapboard piece of junk. nice timing.. I hope they lose their shirts
I figure 2-3 more years of renting before I decide to buy in Kits or swallow my lumps and do a forced move to the burbs
I am hoping Van becomes known as the Vegas or Phoenix of Canada !
September 1st, 2010 at 2:29 pm
@jesse: Trolls bait, you bite.
Let’s start voting down all responses to the Trolls. That way, they too will disappear by way of Kopyright Klepto’s method to hide Foreclosed posts…
Stop feeding the Trolls!!
September 1st, 2010 at 2:37 pm
@SuperSmartBull: I agree with your point, and as someone who knows statistics, I’ve exceedingly aware of basing conclusions on a few observations. The other issue here, however, is the problem with using averages to assess the nature of the real estate market, particularly during periods of significant changes.
September 1st, 2010 at 2:38 pm
Thx realpaul #85, no need to convince me the CPI calcs are a cynical puppet show. My fave is substitution. “When steak becomes unaffordable, as long as people can sub hamburger it doesn’t mean prices are rising.” Makes no sense to me either but I’m sure some Muir or Tal type got paid handsomely for that pearl.
The upshot though seems to be that since housing isn’t a component of CPI it doesn’t make much sense to cry deflation when it crashes, at least not in official government stats.
September 1st, 2010 at 3:14 pm
@KopyrightKlepto: Listen son, is there some sort of button Stu can push to make the foreclosed comments bigger? An older fart like Stu gets sore eyes, nothing to do with the internet porn that keeps popping up. Stu notices the brighter kids here get the lower scores, in life going against the grain is a predictor of future success. Does not apply to Vancouver real estate though.
September 1st, 2010 at 3:20 pm
Every blog needs a troll who refers to themselves in the third person
September 1st, 2010 at 3:35 pm
FFS please stop replying to these morons. Superstupid claims everyone was dancing to a $50K decline and people jump to the bait. Mod these attention starved pinheads back down the sewer they crawled from.
September 1st, 2010 at 3:40 pm
CTV is drinking the VCI kool-aid!
http://www.ctvbc.ctv.ca/servle.....lumbiaHome
LOL!
September 1st, 2010 at 3:45 pm
@ts561rs:
What you are overlooking is that Dallas did not bubble as much as SF not because it is a “second tier” city, but because they have vastly different land management policies. In Texas, they can build pretty much where they need to, whereas in SF (and Vancouver) “they’re not making any more land”.
When demand was high in Dallas, developers had plenty of land available for construction to quickly mop up the excess demand, as a result housing prices have not risen nearly as much there.
September 1st, 2010 at 3:52 pm
@Purp: …..
Bone: Obviously you don’t understand the technology…….
I’m sure the technology has improved vastly, but in a city where the average temperature is about 10 degrees C, and where it’s cloudy and rainy for 11.5 months a year, a 135 year payoff is more likely than a 5 year payoff.
Now, you want to build a solar cooler? It’s called an open window and the payoff in Vancouver is about 7 minutes.
September 1st, 2010 at 3:52 pm
Here is Garth’s response to my tamer comment on his site. Apparently higher prices of sold homes skew the market when you have low sales. So does that mean that lower prices of sold homes skew the market when you have low sales and the average price declines, making it unreliable? Cannot have your cake and eat too…
*********
I guess the real estate board will be coming out with GREAT NEWS this weekend, as average prices increased and have gone back to almost the million dollar mark.
So much the collapsing market in the most “unaffordable city.” Oh well, perhaps in another decade prices will have declined to the point where mere mortals can afford the paradise that is Vancouver.
*****************
This is part of a predictable pattern. Average price always increases as total sales decline and higher prices skew the market. Wait and see. — Garth
September 1st, 2010 at 3:57 pm
“Apparently higher prices of sold homes skew the market when you have low sales. So does that mean that lower prices of sold homes skew the market when you have low sales and the average price declines, making it unreliable? Cannot have your cake and eat too…”
that is just the nature of the equation. anybody who argues with mathematical truths is an idiot. ergo, you are an idiot.
September 1st, 2010 at 4:03 pm
Bears looking increasingly foolish. One dumb report that mirrors bear fantasy gets mentioned and it gets posted here. Bear cheers! Same report goes to first MSM and gets mentioned again here. Bear cheers! Same silly “think Tank” (what is that? a few people sitting around table have drink is also think tank, no?) goes to CTV and…. Bear Cheers! But it is all same report. Same Tsur Sommerville says same fantasy popping reality and… Bear jeers!
This goes round and round.
Only reality is listings dropping, MOI dropping, and Prices UP!
Bear is now mad that fantasy not reality.
Dumb Bear.
September 1st, 2010 at 4:10 pm
@BadNewsBears:
Hmmm…there seems to be an element missing from your list. I wonder what that could be, silly realtor? Here’s a hint: three words–first word starts with “much”, second word starts with “lower”, third word starts with “sales”.
September 1st, 2010 at 5:00 pm
A reminder from ‘Patz’ on Garths site as to where this ‘data’ comes from when the ‘experts are trotted out to tell us how things really are in the real estate universe.
“From the Sauder website:
UBC Center for Urban Economics and Real Estate
Director Tsur Somerville
The Centre, established in 1988 with the financial support of the Real Estate Foundation of British Columbia, supports research and education in real estate and urban economics at UBC. … The Centre works actively to integrate the academic work of UBC students with the professional community through internships and targeted research papers.
—-
Not likely to pee on the industry that supports one’s studies.”
Aren’t all the ‘experts’ speaking on behalf of the orgs and assoc’s tha rep for salesmen, banks, credit unions and developers????????? Has there been a single objective person interviewed by the local media. The market is crashing…….do you expect a commissioned salesman to say anything other than “She only goes up by God”. C’mon media pimps…..is this ‘big stick approach’ ever effective?
BTW….FOI release today shows the depth of the HST bullshit and the Campbell Liberals………You’ve got to read this…just hitting the news wires.
http://www.vancouversun.com/Go.....story.html
They had the HST on track months before the election. The internal documents suggested months before that the HST will shitkick the people and the unemployment numbers for at least five years after implementation….read on….its a doozy!!!
September 1st, 2010 at 5:28 pm
What you are overlooking is that Dallas did not bubble as much as SF not because it is a “second tier” city, but because they have vastly different land management policies. In Texas, they can build pretty much where they need to, whereas in SF (and Vancouver) “they’re not making any more land”.
Its a bit more complicated then that. Yes- SF has land use restrictions and heapin’ helpins’ of not in my backyard politics which means houses are kept unnecessarily precious. But one of the core reasons prices are so high in places like SF and not in TX is the difference in property tax regulation. In California we have something that was passed in 1978 called Proposition 13. It basically put a cap on taxes. Long story short we have an absolute ton of old people living in huge old houses that are worth a million bucks yet they pay taxes for what it was worth in 1978- probably a small fraction of that. Thus the natural supply of homes is interrupted by this.
In TX there are rather steep property taxes and they are-like most states in the US- progressive. In some districts of TX- like Austin for example- the tax is set at 3%. That’s rather high. So if I bought a typical $150,000-$200,000 Austin house, I’d be paying something like over $4,500- $5,000 a year just on property taxes and that amount will only go up with time. As a result prices are somewhat stabilized because there is a consequence to higher prices. In california the problem is that there is zero consequence, especially if you’re older. A quick glance at the median age of most SF Bay Area shows that about half of the population is at least in their 60′s.
September 1st, 2010 at 5:43 pm
New Listings 189
Price Changes 104
Sold Listings 94
September 1st, 2010 at 6:15 pm
@KopyrightKlepto: #42
That’s awesome, thank you!
My page is completely cheerleader/douchebag free!
September 1st, 2010 at 6:20 pm
Hey ‘inventory’: if you’re out there, it would be great to have the historical September sales so we can get ready to watch the September 2010 numbers come in.
September 1st, 2010 at 6:30 pm
For what it is worth, here is the projection for month-end totals based on one day of data.
Days elapsed so far 1
Days remaining 20
Average Sales this month 94
Average Listings this month 189
Projected Sales 1974
Projected New Listings 3969
Projected sell/list 49.7%
In 2008 and 2009 the numbers looked like this:
sales listings sell/list
2008 1760 6142 28.7%
2009 3559 5746 61.9%
September 1st, 2010 at 6:44 pm
I just had to re-post this comment someone else made on the CTV site:
I can’t agree more.
When food prices go down it’s not considered bad news.
When airline fares go down it’s not considered bad news.
When tuition fees go down it’s not considered bad news.
Why oh why is it such aweful news when home prices go down? Oh right – because the 70% of people who “own” property want to sit back in their La-z-boys, enjoying their granite/stainless/plasma/cranteeny lifestyles, all the while getting rich without actually doing any real work. All at the expense of the next generation who has to pay for it.
In other words, self-centered greed, pure and simple.
September 1st, 2010 at 7:10 pm
OV Condos on Global News tonight. only 1/3rd of 700+ condos are sold, Rennie was quoted as saying they will start offering to pay the HST or 2 years maintenance fees in September to entice buyers. Also, none of the social housing suites are occupied. Place looks like a ghost town.
September 1st, 2010 at 7:10 pm
@Yalie: Absolutely! House prices falling to where they are affordable again is a good thing.
September 1st, 2010 at 7:13 pm
@VHB:
28.7 S/L, ahhhh those were the days
I did a radio and TV spot for CBC in November 2008 when sales had tanked from 2880 to 850 and the average price dropped 10% in one month. I wonder what fall 2010 will bring?
Anyone see the Global OV story at 6pm? Watching the report on the anemic OV sales while Rennie vowed to include 2 years maint. fees made my week.
September 1st, 2010 at 7:14 pm
@Purp:
And the vast majority of the sold 3rd was waaaaayyyyyy back in pre-sales.
September 1st, 2010 at 7:20 pm
@Purp: re OV condo not moving. When is council going to wake up and realize they need to drop the price fast or they’ll lose even more money? I think they’re getting bad advice or ignoring good advice. I’m not sure which is worse.
September 1st, 2010 at 7:30 pm
@House: 50% off and they would drum up some excitement.
September 1st, 2010 at 7:31 pm
@House: I bet they are ignoring good advice. For all his warts, give Rennie credit for knowing how to price and move condos. Remember the Kelowna ones he offered for 40% off? He’s not afraid to be aggressive on price when necessary.
I’m pretty sure that the VV guys are too scared to realize a loss so they will extend and pretend.
September 1st, 2010 at 7:32 pm
@House:
Here’s a personal example of why home prices getting back to affordable levels are a good thing for not just the first time but also all the move-up buyers:
We own a townhouse in Port Moody. Quaint and humble, but paid off and the area is super nice. We’d like to move up to a house, as the family got bigger etc., but to get what we’d be comfortable in we need to take another $400K mortgage on top of what our place is worth. When we bought it, we paid 1/3 its current value but we only needed $150K more to get a house we liked. Couldn’t afford it at the time and clearly cannot afford it right now!
If the crash comes, sure out townhouse will tumble, but so will the house next door we want!
This is seemingly such a simple concept, but people here do not understand it… they are much too happy getting enslaved for life and pay hundreds of thousands of dollars in interests to the banks.
W H Y ???
September 1st, 2010 at 7:45 pm
Perhaps something to mention in order to maybe lend some possible future insite into what a bubble pop might look like in Vancouver, again, perhaps my experience with the bubble in San Francisco in the nearby environs would be useful.
Our bubble peaked around 2006 overall and probably 2007 for the most expensive parts of the area- places like Palo Alto, a Silicon Valley city renown for being outrageously expensive- and San Francisco itself. Sales had been gradually slowing since late 2005. I’d say the crap hit the fan in a dramatic way in late 2007, early 2008. That was when the full extent of just how crazy things had gotten and all the CDO values began to take a dump. By early 2009 prices for the area had fallen around 35-40%.
That sounds like a lot. But this is what happened. The outlying areas- cities that are like an hour away like Stockton- or the crime-infested areas like parts of Oakland and others like it, along with lower income areas took a HUGE hit. Small houses in bad neighborhoods or far-flung exurbs had been selling for $500,000 at the peak. Those prices dumped to what they had been before, as in $150,000 or less. Some houses in Stockton are going for $75,000 these days.
On the other hand the “nice” areas like San Francisco, Berkeley, Palo Alto, and so on fell a lot less. As in more like maybe 15%. What fell the most in those areas was the lower to lower middle level housing.
I guess what I’m saying here is that yes- I too desperately wanted priced to fall and fall hard. A 50% cut would’ve meant more reasonable prices. I make a pretty decent income and even at a 50% haircut that still meant a $300,000 house. Not exactly dirt-cheap. The cold reality is that yes- priced even in the nicer areas fell. But prices are still at what I’d call stupid levels. As in $500,000 for anything remotely desirable. Prices might fall further since there’s now talk of a double-dip and unemployment is still awful. But prices are stubbornly high even now. It will probably always be at a level that is mostly unacceptable, at least for me.
Thus we’re likely moving in a few years out of state. We’re thinking Texas or North Carolina. Apparently a lot of younger families are doing the same. Those 2 states are the biggest gainers in the US and why not? Their housing prices are affordable.
Anyway, I just thought you all would find that interesting.
September 1st, 2010 at 7:59 pm
Haha! Dumb American Bear wants to compare crime and poverty infested Oakland with Vancouver. Worst part of Vancouver, aside from tiny DTES, is still very nice area. So Dumb American Bear has now shared with you Dumb Canadian Bears not to expect more than 20% dip.
I know San Francisco. They have big China town. It is famous and every one I know has been there and been disappointed. While it looks good and has much history the food is no where the match of Vancouver or Richmond. Still, SF house price is very high. Economy in toilet and condo price still high. Weather not better than Vancouver and house price stay high. Traffic terrible and house price stay high. No goodbeach and hous price stay high.
Lesson for Dumb Bears here. House Price stay high. But maybe house price drop to dirt cheap in crappy neighbourhoods with crime like Whalley.
September 1st, 2010 at 8:03 pm
I wonder if KKK’s firefox code can be edited to eliminate RealPaul and BPOM. If there are any insane fools on this board it is them. They spew hate and anger.
September 1st, 2010 at 8:05 pm
@ts561rs: Thanks for posting your observations. It’s good to get firsthand perspective from the US.
Let’s face it, SF is a very desirable place to live, and I’d guess incomes are quite high there (full disclosure: one of my clients is a SF-based company, although I live in Vancouver, and they pay a LOT more than other US and Canadian clients I’ve had). High incomes, combined with what you wrote earlier about California’s bizarre property tax caps, may in part account for SF’s sticky high prices, I don’t know.
What about the ‘burbs that aren’t so far out as Stockton, like Danville or Benicia? I assume they’ve held their values as well.
September 1st, 2010 at 8:11 pm
“But this is what happened. The outlying areas- cities that are like an hour away like Stockton- or the crime-infested areas like parts of Oakland and others like it, along with lower income areas took a HUGE hit. Small houses in bad neighborhoods or far-flung exurbs had been selling for $500,000 at the peak. Those prices dumped to what they had been before, as in $150,000 or less. Some houses in Stockton are going for $75,000 these days.”
__________________________________________________
Watch out Surrey! This could be you in 3 years.
September 1st, 2010 at 8:12 pm
I think the RE prices will start to crash the moment prices stop rising, simply because of the high percentage of investors in the market, low rental yields, and dependence on perceived price appreciation. So although rises in mortgage rates would certainly do the trick, that is only one of many downside risks at the moment.
September 1st, 2010 at 8:16 pm
@Purp:
Furthermore, the city is losing $300K per month by not having any tenants in the rentals. How is that for managing our finances?
The mayor’s response to the 2/3rds of units still for sale was “it’s a tough market out there”.
Yes, it is mayor. Yes it is.
It’s so tough that Rennie has offered to do the dishes and housecleaning of anyone who buys before the end of the year. For 6 full months. Bedtime stories for those with kids as well.
Just to show what a tough market it is this nasty East Van hovel was just listed in a poor market but the owners are feeling optimistic nonetheless.
See the last photo.
http://www.mls.ca/propertyDeta.....=-36890298
September 1st, 2010 at 8:27 pm
“I bet they are ignoring good advice. For all his warts, give Rennie credit for knowing how to price and move condos.”
Yes I am sure Rennie has been telling them to slash prices for a while. Any good salesman is able to convince the powers that be to price the product correctly. That is how you make sales. The realtors still around in a few years will be those who convince their clients to price the product correctly. It will have nothing to do with marketing. All the marketing in the world will not sell the OV at it’s current prices and Rennie knows that. The problem with dropping prices is it likely means bankruptcy for the developer. It will take the city to step up and call the loan and force the issue. My bet is this will be after the next election.
September 1st, 2010 at 8:32 pm
The other thing I wonder about the OV is will the retailers show up? Is there anyway Urban Fair, London Drugs or a private liquor outlet can make money in a ghost town with no residents? My guess is the lawyers for the retailers are trying to get them out or delaying the lease until the place is occupied.
September 1st, 2010 at 8:41 pm
@Purp:
re: Solar Hot Water systems.
One reason that you don’t see as many systems here is that the initial costs for the systems are higher for two reasons:
- the systems here require freeze protection which isn’t required in Mediterranean countries.
- our building codes require closed loop double walled heat exchangers whereas in some areas they use single loop systems without heat exchangers.
So the cost for a system installed is closer to $7,000-$8,000 (minus the $2000-$3500 rebates currently available). And with our cheaper energy costs the payback is more like 10-20 years.
But still a good technology. I will install one on the home I buy after the 30-40% price correction we are starting to experience.
September 1st, 2010 at 8:52 pm
So here is sit in my City owned rental in the OV, been here a few weeks now and have seen, heard and witnessed what this place is all about…. rush job construction, and fool can see the flaws inside and out, poor management, and what looks to be some serious design flaws in the HVAC system. Fortunately for me its priced well as rental, and i have the place to myself for the most part. The future is dismal at best here.
Over & Out!
September 1st, 2010 at 9:01 pm
Those ‘warts’ Rennies sporting may be an advanced case of CLYMIDIA…..I’d watch what I touched in the OV show suites. Funny how that popped into the mayors head and let slip as he backpaddled away from the OV like a closet queen from a blind date with a woman…..something Freudian about two gay guys channeling each others ‘issues’. Yuck!
September 1st, 2010 at 9:06 pm
And now for your daily laugh!
My wife received this on Facebook that someone posted to all his “friends”
He had written:
“Looking for a buyer/invester for a 2bed 2 bath 948 sq ft condo in the heart of Pitt Meadows. Message me FAST if you are interested in hearing details about this opportunity for a 25% return on your investment in one year with little or no risk!
Looking for $25k-$35k additional equity injection for a one year hold. ”
My wife responded:
“_______ you do realize the bubble has burst and we are now in a real estate decline?”
To which he answered:
“I’m assuming your comment was in regards to my assertion that a potential investor could make 25% return on their money with little or no risk in one year in this particular real estate deal. Since the current owners of this unit already have around $60,000 in equity in this unit and a potential renter lined up for the unit at approx $1400/month, in the case of the market going the wrong way during the one year hold, the owners are guaranteeing the additional investor’s equity and 25% profit with their own equity in the deal and are prepared to sign a notarized document/contract to that effect. Therefore in the case that the market does NOT improve and start increasing (as most indications from the Pitt Meadows area have indicated for awhile now that the area is ready to recover and grow steadily —in fact the Province stated two weeks ago Pitt Meadows as the 6th best growing community to invest in in Canada), the current owners plan on ensuring the new equity partner gets their funds returned in full (even with 25% profit) and they take all the losses.”
Wow I really hope this guy does rope in some poor unsuspecting person. What good is a notarized contract if you have to sue to get it and likely sue someone who is broke.
September 1st, 2010 at 9:08 pm
I mean DOES NOT rope in someone
September 1st, 2010 at 9:15 pm
re: Solar Hot Water systems.
New Westminster will soon require a rough for these systems in all new construction.
I’ve caught a female crackhead peeing on the front yard of my rental twice in the last month; perhaps the city can issue a new by-law to require front lawns to have a urine heat capture system to preheat hot water tanks too!
September 1st, 2010 at 9:24 pm
@Yalie: “Doom and Gloom”
Real estate is seen as a healthy indicator of our economy by CHMC and friends.
September 1st, 2010 at 9:26 pm
@D. Bone: wrote “…but in a city where the average temperature is about 10 degrees…”
ambient air temperature has little affect on solar hot water system (especially evac. tubes).
I have seen a system on a cold clear January day in Vancouver deliver water that needed to be mixed through anti-scalding valve because it was too hot.
September 1st, 2010 at 9:34 pm
BMO cuts mortgage rate to spur home buying
“Bank of Montreal has chopped its benchmark five-year mortgage rate, aggressively throwing its weight behind what many are calling an increasingly wobbly housing market.
“It’s a great time to buy a home,” Martin Nel, a senior BMO official, said in news release announcing the change. He added that people who take advantage of the offer will benefit.
“If ever there was a time to buy, it is now,” Mr. Nel said.”
September 1st, 2010 at 9:40 pm
@McLovin: That facebook story sounds a lot like a scheme my partner heard about through the REIN. 25% return with no downside? Maybe true but the way it’s set up it’s taking advantage of a desperate homeowner. Based on what I’ve heard coming out of REIN, they’re making baby Jesus cry on a regular basis.
September 1st, 2010 at 10:22 pm
#140 B, the BMO obviously doesn’t get it…its not mortgage rates that are detering people from affording real estate…its the fact that prices are too high and need to come down by at least 50% ( and more) to match fundamental demand ie the price – income ratio common in all western economies. 9 X’s earning for a condo and 22 X’s earning for a SFH in Vancouver make no sense at any rate.
What has happened is that a high number of suckers have been attracted unwittingly into the RE market…..the BMO assuredly that the sucker pool is dry and is making this pronouncement for public relations purposes…they can’t create more suckers than already have screwed themselves…..like any classic ponzi scheme they’ve run out of willing particapants….no…it is not a grteat time to buy…..anyone who has bought real estate in the past 90 days has already lost money.
What segment of the population is BMO appealing too…they’ve drained the youth pool….do they think that middle age and elderly are going to start buying treeeeeeeeeeeeeeeeeeeeeeee !!!!
Nope, I think its all part of the corporate profile and nothing to do with buying real estate..they know this markets baked at zero intrest……its cooked, fried, julienned…..done.
September 1st, 2010 at 10:29 pm
@Best place on meth:
Thank you so much as well KK!
If we all don’t respond to the trolls, they will now start to disappear
September 1st, 2010 at 11:26 pm
KK for undisputed VCI champion. Could it be that I’ll never have to scroll past a comment by SSB ever again? I’m misting up.
September 1st, 2010 at 11:31 pm
Today’s anecdote: Since I was going to do some yard work early this evening, then realized that I’m a renter so Instead I went down to Granville Island for an orientation seminar for the upcoming Vancouver Fringe Festival.
Anyway, after the seminar we lined up for volunteer passes and t-shirt and I was standing in front of a pleasant young lady with whom I began to make conversation. She’s a recent SFU graduate in English and works for a real estate development firm on the creation of specification brochures for purchasers. She could be as young as 22, but looked to be in her mid-20s and we started to talk about the real estate market and I mentioned that I would not buy in this market as it is due for a major correction. She tepidly agreed then blurted out “my fiance(e) and I just bought a condo off of Commercial Drive.” There you go, someone who just graduated from uni and not a few months later is a real estate “owner.” Are there any FTBs left to prop up this market? I was about to inquire about the particulars–how old her fiancee is, is this a first-time purchase for either or both of them, etc., but circumstances intervened.
P.S. I may have another installment of “My Sister is trying to sell her house” over the next couple of days. Stay tuned.
September 1st, 2010 at 11:50 pm
Sept
1994 = 2241
1995 = 1951
1996 = 2217
1997 = 2050
1998 = 1755
1999 = 1955
2000 = 1761
2001 = 2241
2002 = 2555
2003 = 3468
2004 = 3006
2005 = 3505
2006 = 2583
2007 = 2852
2008 = 1620
2009 = 3632
2010 = ???1200-1500???
September 2nd, 2010 at 12:01 am
dumb bears
September 2nd, 2010 at 8:35 am
ts561rs
“In TX there are rather steep property taxes and they are-like most states in the US- progressive. In some districts of TX- like Austin for example- the tax is set at 3%. That’s rather high. So if I bought a typical $150,000-$200,000 Austin house, I’d be paying something like over $4,500- $5,000 a year just on property taxes and that amount will only go up with time.”
I am Vanncouver born and currently live in Austin(21 years). We own a $400K SFD on a greenbelt in the hills and paid $8400 for property taxes last year. That is 2.1% not 3%. Sure, property taxes are high because Texas is one of the few states that does not have a state income tax. The funds for public services have to come from somewhere. Also, property taxes are income tax deductible.
September 2nd, 2010 at 10:47 am
@rob_: …
I have seen a system on a cold clear January day in Vancouver deliver water that needed to be mixed through anti-scalding valve because it was too hot…….
No doubt. But, how many clear January days do you think there are (or any other month between September and July for that matter)?. If you don’t know the answer to this, you just moved here.
September 2nd, 2010 at 3:01 pm
@D. Bone: said “…days do you think there …”
Enough to produce over 10 GJ of hot water heating on an annual basis.
Enough to reduce your domestic hot water heating bill by 40-60% on an annual basis.
Enough to save a couple hundred dollars a year.
And there are more sun hours annually here than in places like Bonn, Hamburg and Tokyo even though Japan and Germany are the top nations for solar photovoltaic generation capacity.
September 3rd, 2010 at 9:34 am
@r_: …
Enough to produce over 10 GJ of hot water heating on an annual basis…..
9 3/4 GJ of which happens in the 2nd week of August in Vancouver.
Enough to reduce your domestic hot water heating bill by 40-60% on an annual basis.
……
In Phoenix maybe.
Enough to save a couple hundred dollars a year…..
The needle just broke in my BS meter. (Considering my hydro bill for all of last year was about $700, you’re telling me that water chillier (in Vancouver case) will save me a couple hundred a year? Get Real. Oh, wait, I get it… You sell these systems. Wow, what a parallel discussion to Realturds!