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Holiday Free-for-all!

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It’s that special time of year again, have you been naughty or nice?  Either way you’ve earned some holiday time and we hope you’re enjoying (or soon to be enjoying) that time.  Go ahead, grab a strong drink, we won’t judge.

Here’s our regular end of the week news round up and economic open topic discussion thread for the Christmas weekend.  Whether you’re freaked out deep in debt, or jealous of the trappings of those who are, we hope you have a relaxing weekend.

And if you have to occasionally sneak away from the family and argue with a stranger on the internet, we’ll be here for you.  Here are a few recent links to kick off the chat:

– Could a US style collapse happen here?
– IMF says Canada on course, but risks ‘elevated’
– BC immigration ‘surged’ by 10% last summer
– Canada’s housing market among the best
– Stock market ‘best since 1928’
– is saving money bad for Canada’s economy?
– sell the condo, move east and retire early
– should you give your 5 year old cash for Christmas?
– Got a grand? Get a house.

So what are you seeing out there?  Post your news links, thoughts and anecdotes here and have an excellent weekend!

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Anonymous

You could be leaving just when things are about to get fun…

BTW @ 200K a year you should be able to save a crazy amount of

money and still rent….something doesn't sound right….

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vanhattan

Hi Guys, I have been reading these real estate blogs here in Vancouver and have never found the advice to be useful as most of the comments ignore the reality on the ground bears and bulls alike. Here is my situation. I moved here in 2005. I could not find a 'decent' place to rent that would accept a very well behaved dog so we decided to buy a condo of a whopping 889 square feet. We hated the condo and paid more than 3x what our gorgeous home with 22 foot ceilings, 1/2 acre treed lot with more than 3x the square footage cost. (sold our 3,000 sf home for 330K, bought our 889 sf condo in Van for 377K). The purchase and shock of living in this shit hole almost cost me my marriage. F*ck, even the dog… Read more »

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penguin

In the late 70s and very early 80s didn't the market increase more than double then corrected 40% So it can lower 40% but that was a very fast jump up and faster correction a blip I think it was over a 2 or three year period. Once it corrected it started climbing immediately Check out the charts it did not take long to recover Do you know what the interest rates were like then? Inflation then What are you investing then while awaiting the RE correction? Too bad I cannot buy a Put option on my house if I could I would but houses are not stock. So I will HOLD and ride out this Potential correction. When the US real estate market first corrected a lot house went up for sale then when they didn't sell owners took… Read more »

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Renting

Even if you compare YVR to the USA: in the USA it has corrected 30% not 50%

Tell that to people in Vegas, Phoenix or Miami. Some areas are down more than 50%. The US correction is far from over. It still has a few years to play out and will go down more.

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Renting

@penguin: Established people with equity are not going to panic sell your argument falls short when you do not consider the emotional attachment with a home Are people in the US and Japan different? Were people in the 80s in Vancouver different? Is this emotional attachement that all real estate owners have a new thing that only applies in Vancouver today? Would the same thing not have prevented every other real estate crash? Everyone does not have to sell. We only need a small percentage to sell and the house of cards collapses. Maybe you are not one of the small percentage, but your property value will be effected the same. I wouldn’t want to live in a rental unit where the landlord cannot afford the simple repairs and maintenance required because of their negative cash flow. Most rentals are… Read more »

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penguin

I agree housing is over valued in the YVR area it appears we disagree on the amount of correction possible So for me to make an argument its required that I need to have footnotes – LOL But for your argument its trust me in the future YVR RE will be cheaper than rent Good luck with that When I first bought in the late eighties my monthly cost were much higher than the rent I was paying. Ditto for my parents in the early 1960s ditto for my cousins in the 1970s and early 1980s It was cheaper to buy than rent during the late 1990s then the market corrected up perhaps a overcorrection but that remains to be seen Tell me another time when you could buy cheaper than rent? Again I ask you bears that have greater… Read more »

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fixie guy

113 penguin Says: "I did say you could create a positive cash flow on YVR real estate during the 1990s but that is not the norm for the last 50 years.

Ah, all of between 5 or 10 years of 50, again without any more proof than 'I said', ignoring the first and second half of that decade were very different markets, and without expanding on how one small micro-economy breaks with the rest of the world and subsidizes renters for nearly half a century. Next time just use the short form: trust me.

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Anonymous

Morgan Stanley economist Gerard Minack said in a report earlier this year that Australia’s market is overvalued by at least 40 per cent.

“There’s a word for a financial asset that is overvalued by 40 per cent, so let’s use it: housing is a bubble. Buying an asset that’s overpriced never ends well.”

http://www.theglobeandmail.com/report-on-business…

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penguin

Best place on meth Says:

December 27th, 2010 at 1:59 pm

:

Why would you compare a city of 2 million to a country of 300 million?

My answer – it appears all you bears do so that was my point LOL

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Patiently Waiting

From family conversations over the Holidays, I felt less isolated as a bear this year. Long-time owners are wondering whether they should cash-out before its too late. In my little universe, sentiment seems to be changhing.

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other ted

Sentiment has changed. I have talked to people who bought during the 2008 downturn who believed in the infallability of Vancouver real estate who are now selling. They are worried that they might not get an offer. I told them just lower the price and they will there are still fools out there. Sentiment is changing fast, this might start correcting faster than people think.

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Best place on meth

@penguin:

Why would you compare a city of 2 million to a country of 300 million?

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penguin

I did say you could create a positive cash flow on YVR real estate during the 1990s but that is not the norm for the last 50 years Of course if you could buy Real estate for cash perhaps then you could create positive cash flow.

Ill clarify it has not been the norm in YVR RE to create positive cash flow on a mortgaged property

Even if you compare YVR to the USA: in the USA it has corrected 30% not 50%

Just stating the way it is now but if the greater than 50% correction occurs in YVR I stand corrected

What do you bears think we should do for investment- Hold Cash? Stock Market? Gold?

Tulips?

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Keeping An Eye On Th

"A 30% correction is the best you can hope for (or fear of) this is just my opinion as unlike some of you I dot the crystal ball that foresees the futue."

No penguin, it has nothing to do with crystal balls, and wishful thinking, or black magic.

We bears don't operate with the same apparatus as you fools.

Remember in the USA your ilk turned to the St Joseph figurines to get sales?

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Anonymous

#110 penguin Says:"For the last 50 years it has been rare to buy Vancouver real estate and create positive cash flow."

Prove it. Owners have been subsidizing renters at a loss for 50 years across flat, declining and appreciating markets?

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penguin

For the last 50 years it has been rare to buy Vancouver real estate and create positive cash flow. The last time was the mid to late 1990s when the market corrected close to 30% in some areas especially the condo market. The current increase of YVR RE prices happened after that bear market Established people with equity are not going to panic sell your argument falls short when you do not consider the emotional attachment with a home You are correct owning a home requires a higher labor factor but that is what creates this emotional bond Even the simple act of painting a room gives the true feeling of ownership building a deck or creating a play area for your children satisfies a basic human need. If it was all about dollars more of my neighbors would be… Read more »

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blueskies

http://tinyurl.com/greatlandlordstory

would a realtor go to this length?

methinks not……..

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Best place on meth

@scoop:

Very nice, I'm not sure if "crashflow" was a Freudian slip on the realtor's part but with 9 bedrooms it has undeniable flophouse potential.

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Bear Patrol

@penguin: "at what point would you buy Vancouver Real Estate"

Bear Patrol buys 50% off or pockets difference. True bear not care either way if this never occurs.

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fixie guy

#90 penguin: Awesome, another exposition that explains why Vancouver prices wont drop that completely ignores any explanation of why they rose. CMHC, federal emergency rates, speculation; bah humbug. This is Vancouver dammit, not a regular city. Carry on.

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Best place on meth

@penguin:

>>>I give vancouver RE a HOLD recommendation just ride out the coming bumps and pay down your mortgage<<<

I take that to mean DO NOT BUY and I'll second that.

I'll buy when prices have fallen precisely 48.6%.

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Rainiest place on de

Penguin:

I know it doesn't bother you because you have a small penis, but a lot of guys say your mother's vagina is always dry these days.

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Renting

@penguin: Will a US style collapse happen in Vancouver? Possibly but probably not. In my “hood” very little movement in ownership in my case 8 years owe about 50% of the ORIGINAL price so probably have over 60% equity in the present inflated price. It does not matter what past movement was but what will it be? There will always be sales in any neighborhood regardless of peoples equity. The fact people have equity will allow them to sell at reduced prices, where someone without equity cannot sell. Your neighborhood with all that equity may be the hardest hit as a percentage drop. A 30% drop in price would not cause me or any of my neighbors calling a realtor in panic to sell. All you need is the same amount of sellers but fewer buyers. There will be fewer… Read more »

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scoop

At what point would you buy this instant crashflow investment?

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oneangryslav2

@penguin: …at what point would you buy Vancouver Real Estate after a 30% drop? a 60% drop? a 90% drop? NEVER? For me, it's not as simple as waiting until some magic number is hit and then stepping in. First and foremost, even though Vancouver is my hometown (my family mostly lives here as well), there is always the possibility of taking a job in another province/country. As for the mathematics of buying a home, it will depend upon a combination of price drop, relative rents, interest rate levels (which would affect the opportunity cost), tax levels (i.e., if the GofC were ever to introduce a mortgage-interest deduction on income taxes, that would certainly factor into the equation). So, it's not nearly as clear-cut as you picture it to be. I do know one thing, however. Being a renter has… Read more »

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