Friday Free-for-all!
It’s the end of the week and that means it’s time for another open topic economic discussion thread and news round-up. Here are a few stories to kick off the chat:
-Mortgage industry says mortgage rules are too tight
-BC high end rural real estate comes crashing down
-Housing: A bug in search of a windshield
-US home price drop now exceeds great depression
-Fired city electrician speaks on Olympic Village
-The Economist: Olympic hangover, up false creek
-Looney drives Canadians to US malls.
-Hey! Who rearragned the kyes on my copmuter?
-RRSPs: love ‘em or hate ‘em?
So what are you seeing out there? Post your news links, thoughts and anecdotes here and have an excellent weekend!
January 24th, 2011 at 12:52 am
@vreaa:
Here's the link – http://www.reuters.com/article/idUSN2212125420110…
January 23rd, 2011 at 3:27 pm
@grant: Actually it does tell us something very important. It tells us that the pool of remaining buyers can only go up to $400K. Most people prefer single house over townhouses so if paying extra $100K would get you a bigger place and your own land and backyard, most people would go for it if they had the money. As well it also gives bigger bang for the buck. The fact that the $400K TH has lots of buyers but a similar condition house priced at $500K doesn't would seem to mean that the remaining buyers can't afford to go up to $500K.
January 23rd, 2011 at 2:39 pm
How many guys here are excited at the prospect of all those cheap blow jobs you'll be betting when all those mortgages start to default in Yaletown.
January 23rd, 2011 at 1:47 pm
@oneangryslav2:
.. which brings me to an idea for an article (for someone informed and eloquent to write) – a sort of meta-fiction of how that kind of thing would unwind, how long it would take, how Meagan would try to counteract it, etc. etc. Who's got the digital quill and ink at hand?
January 23rd, 2011 at 1:36 pm
@Vansanity: And there it is…until "investors" like Meegan are wiped out financially, this bubble will not pop.
January 23rd, 2011 at 1:35 pm
@Vansanity: Do you have a link to that Reuters/Carney article? thanks!
January 23rd, 2011 at 1:09 pm
Here's a comment I found on a Reuters article about Carney's warning to Canadians to reduce debt before interest rates return to normal, insight into the mind of the average real estate speculator:
Meagan wrote:
Talk about raising rates all you want. Until I see rates start to rise I’ll continue borrowing to buy more properties. So long as I demonstrate I can make the payments, banks are willing to accommodate. It’s actually gotten easier now that I backstop through CMHC rather than my other properties. This strategy has been working for ten years now. With the way governments are printing currency my property values have no where to go but up. A few more years and I’ll be retired and still under 40. Thank you Mr. Carney.
January 23rd, 2011 at 12:28 pm
That interview with the ex-Vancouver electical engineer is enlightening. The city will go to no end to cover things up and make themselves look good. Also, whenever I see Penny Ballem mentioned she always seems to be lying about something.
January 23rd, 2011 at 12:27 pm
@Best place on meth: I suspect that this whole story may be just a publicity stunt to jump start the new selling season.
January 23rd, 2011 at 12:23 pm
"Is “Douglas” lucky in Chinese culture?"
Actually, Douglas start with "D" the 4th letter of the alphabet, bad, very very bad.
January 23rd, 2011 at 12:00 pm
@bubbly:
Seriously thought, there are plenty of nice west side houses available for 1.6 million and many more coming on the market each day. Really nice houses as opposed to that disgusting squalid dump.
But there were none for sale bordering Douglas Park.
Is "Douglas" lucky in Chinese culture?
January 23rd, 2011 at 11:51 am
@Best place on meth: "I wonder what those people who paid 500K over ask for a tear-down are thinking right now?"
They are going to offer the house to other sophisticated investors for $2,000,000. 200 people will bid and the house will sell for 3 million. 1.5 million gain in less than a month. Rinse and repeat and by the end of the year the tear down will be worth one hundred-million-gazillion dollars.
To the moon!
January 23rd, 2011 at 11:23 am
@VHB:
Was the gain in January 2008 really 2008 units? That's an odd coincidence.
Anyway, although there is a fairly high gain so far, it's not Armageddon by any means, is it? Sometimes my faith in the second coming of affordable housing in Vancouver really wavers.
January 23rd, 2011 at 10:57 am
I wonder what those people who paid 500K over ask for a tear-down are thinking right now?
************
Tell you what they are thinking….
"Ha, ha, stupid Canadians…I just laundered 1.6 million of my illegal Chinese proceeds of crime….boy these Canadians will turn a blind eye to anything"
and
"I don't care if the market goes down 20 or 50%, I just bought my way into Canadian citizenship."
January 23rd, 2011 at 10:44 am
I wonder what those people who paid 500K over ask for a tear-down are thinking right now?
January 23rd, 2011 at 10:37 am
@VHB:
Of course we don’t know how dry and shallow is the pool of greater fools, but at some point, we have to run out of them.
*************
yawn…been hearing this statement since 2007…..
January 23rd, 2011 at 10:26 am
@VHB: I like the positive attitude!
January 23rd, 2011 at 10:17 am
@VHB:
Of course we don't know how dry and shallow is the pool of greater fools, but at some point, we have to run out of them.
January 23rd, 2011 at 10:10 am
after best place on earth, best real estate on earth, here is the best healthcare on earth :
http://tinyurl.com/4h37qnw
January 23rd, 2011 at 9:03 am
At the end of Jan 4th, we had 9435 units in inventory. I don't have the Dec 31st or start-of-day Jan 4th numbers, but let's go with that.
We now have 10786, for a gain of 1351. Here are the gains for the previous 5 years in January:
2006: 448
2007: 537
2008: 2008
2009: 1406
2010: 2456
So, yes, we always see inventory gains in January. But, we are on pace for a year more like 2008 or 2010 here than 2006 or 2007. At least as far as the first three weeks of data go.
January 23rd, 2011 at 6:49 am
“The agreement says that the bubble country can force banks to increase their minimum tier one capital ratio – a key measure of bank strength – by a maximum 2.5 percentage points (from the global minimum of 7 per cent to up to 9.5 per cent). A bank based in another country that does 20 per cent of its business in the bubble country would then receive a proportional surcharge of up to 0.5 percentage points”
http://www.ft.com/cms/s/0/2b455e94-1cee-11e0-8c86…
This could be why our leprechaun Flaherty is talking tough and taking steps to curb debt.
We are in a credit bubble, and he wants to keep it quiet.
January 23rd, 2011 at 2:29 am
White-Hot Sentiment –
"People want to get in. They want to get in bad"
Transcription, stills and discussion of the CBC National news piece on recent Vancouver sales
http://wp.me/pcq1o-1LL
January 22nd, 2011 at 11:49 am
Last weekend we looked at a Coquitlam townhouse for $400k. 8 years old and nice condition. It had an endless stream of viewers and 3 offers by end of day.
That same day we drove 3 blocks west and looked at a Coquitlam detached for $500k. A bit larger, newly renovated, with a real back yard. The place was empty and the realtor desperate to create interest.
So what do these contrary anecdotes tell us about the market today? ABSOLUTELY NOTHING.
January 22nd, 2011 at 10:53 am
There was an open house in my (downtown) building today. New listing. 1 bedroom condo, asking about $675/sqft. There seemed to be a fairly steady stream of people attending. I saw the agent take about 10 people up in the elevator to show them the suite.
January 22nd, 2011 at 10:08 am
Just took a browse through my auto-updater and what do I find?
Lots of west side sellers are raising their prices.
January 22nd, 2011 at 9:41 am
@105 4SlicesofCheese: 15% drop from the 1994-10 peak. You know, that short period between HKers no longer fleeing under the belief the Mainland would shut down business, and this newest round of Western real estate bubbles. A bit like what a market not distorted by moronic, unsustainable, vote pandering federal policy would look like.
January 22nd, 2011 at 8:13 am
@patriotz
Yeah flat as in going from 55 in mid 90s to 68 in Dec of 99.
Compared to 68 in Jan 2000 jumping to 154 in Oct 2010 based on Teranet Vancouver index numbers.
January 22nd, 2011 at 8:00 am
@McLovin:
Great leadin with Peter Schiff. In case you haven't heard of him, watch this:
http://www.youtube.com/watch?v=2I0QN-FYkpw&fe…
Compare what Schiff said about the US then to Canada now. And the nonsense from the US cheerleaders to Soper.
January 22nd, 2011 at 7:13 am
@4SlicesofCheese:
They weren't flat, they went up from 1990 to 1995 and then went down 15% from 1995 to 2000 (and were up over the decade as a whole). But I guess they're too timid to admit even a mild downturn in the recent past, even though they might get away with blaming it on Glen Clark.
January 22nd, 2011 at 6:59 am
From the FP – Home ownership isn't for all
http://www.financialpost.com/news/Home+ownership/…
I really like this:
One industry veteran paints a bleaker picture from the trench.
“We’re no different from Americans, that’s for sure,” says John Cocomile, a broker with GreedyMortgage.com in Toronto. He says of 100 first-time homebuyers he arranged mortgages for in the past three years, 95 of them took the longest amortizations possible.
Can the roaring coming down the tracks get any louder? Seriously?
January 22nd, 2011 at 6:05 am
@fixie guy:
>>>Trust me on that, deal with it.<<<
Idiots with catchphrases should be voted down immediately, no questions asked.