Friday Free-for-all!

Well you made it to the end of the week and the end of the month. We’ve been blessed with a break in the rain for several days now and the weekend is here! It’s time to do our regular end of the week news round-up and open topic economic discussion. Here are a few things going on in Vancouver BC and around the world:

Home ownership isn’t for all
Top 10 effects of new mortgage rules
Mortgage broker says new rules could leave some homeless
BC house prices too high by National and Global standards
NHLers burnt on Bear Mountain, RCMP investigates
BC child poverty results in deaths?
US housing has room to fall
Housing double-dip accelerating
US foreclosures spread to formerly safe areas
UK home values fall on demand drop
Australia braces for rising interest rates

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

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Keeping On The Pimps

http://www.thestar.com/business/personalfinance/a

"Toronto housing economist Will Dunning. “There was a large element of speculation in the U.S. that has not been present in Canada."

Yeah, ok Will no problem: Did Will mention his connection with:

Canadian Association of Accredited Mortgage Professionals, which represents brokers and others in the industry.

Renting

@ulsterman: Sorry to blow a hole in your theory, but in fact i DID sign a one year lease. I said sign a 3 year or 5 year lease and renew prior to it expiring. So, i guess i wasn’t trying to have it both ways as you so thoughtfully put it. Then why are you whining about it. You had flexibility as that was the agreement you made with the landlord from day 1 with the one year lease reverting to month to month thereafter. You signed the agreement and could have asked for a different agreement or sought a different place to rent with terms you want. WRT a new roof. You need to be pretty unobservant to be a homeowner and not have an understanding that your old roof will need replaced in XXXX years. You can… Read more »

Rocker guy

@Best place on meth: @patriotz: The latest Planet Money Podcast on NPR has an interesting analysis of the post bubble by two different economists. There are some good ideas in the US on how to slowly get rid of Fannie and Freddie (aka CMHC South) – like gradually changing the amount that they can insure until there is no advantage anymore to using the govt

[…] at vancouvercondo.info January 29th, 2011 at 1:45 pm – “The intangible benefits to owning brought into sharp focus: This morning I got the […]

Devore

@ulsterman: You could have signed another lease when the first one expired. If you desire a stable housing situation, you have to make it happen. If the landlord doesn't want to give you another lease, then you have lots of time to prepare for the change. Moving is stressful and disruptive, but so are financial difficulties resulting from high cost of housing, such as are known to break up marriages and make people do other unexplainable things. And by all indications, renting for middle class households is affordable in the city.

Ulsterman

@Renting: Renting: Sorry to blow a hole in your theory, but in fact i DID sign a one year lease. Thereafter it reverted to a one-to-month and there wasn't a ton i could do cos it was the landlord's right – sure i could have threatened to move and maybe i should have. I lived there another 18 months before the recent notice. So, i guess i wasn't trying to have it both ways as you so thoughtfully put it. WRT a new roof. You need to be pretty unobservant to be a homeowner and not have an understanding that your old roof will need replaced in XXXX years. You can plan. Rarely does your roof phone up on a Saturday morning and say that it will need to be completely replaced within 8 weeks. The point is that being… Read more »

Spec

@Best place on meth:

highlarious…Mclister brokers McMortgages with his McWife. How sweet. They better have a Mcbackup plan for income.

444 444 444 444 444

@VHB:

"So, for the month the gain will be around 2K units. That is a fairly steep accumulation of inventory. That is not 'normal'. It is far beyond the regular seasonal January gain."

Yes, this makes sense since I cast the curse.

4444

jesse

@AG Sage: "The number I usually see tossed around by professional landlords to compute cash flow is to assume 70% occupancy"

Where, in Detroit? I've talked to a few local pros (well, they've been around the business a few decades, anyways) and they state Vancouver vacancy rates are about 5-7% or so. I don't know why anyone would assume 30% vacancy rate. Budget for 30% to ensure adequate reserve fund maybe, but assume…?

Indeed

@Girlbear: The pathetic furniture shown in many expensive listings (unless they're staged) is the surest sign of both the speculative component of most house purchases and the resulting lack of disposable income available to purchasers.

It's bizarre to see "$2 million" houses with huge unfurnished spaces, furniture from Ikea (or, worse, The Brick), mattresses without frames or boxsprings, etc. People are buying houses way bigger and more expensive than they need or can afford because they figure they'll be worth way more next year.

VHB

Inventory gains in January 2006: +448 2007: +537 2008: +2008 2009: +1406 2010: +2456 2011: > +1800 Figuring out the near-term direction of the market is as easy as comparing current sales to current inventory. If there are >6 months of inventory, prices will fall a bit. If there are <6 MoI, prices will rise a bit. January and Feburary typically have big upward price pressure. That's because there are buyers out there, but not all the inventory taken off the market at the end of the previous year has found its way back. (I've seen them–these are guys in such a rush to get in, they leap at whatever crap inventory is posted in January. The right time to buy is summer or late fall when you can find someone with a languishing listing who is desperate. But I… Read more »

Anonymous

@Anonymouse: “I don’t mean to be repetitive here, but downtown condo inventory has increased by 30% since the start of this month. What’s the hell is going on”

I didn’t notice you asking when it dropped almost 70% last year. I don’t mean to be repetitive here.

__________

psst – he's being sarcastic, dummy.

Best place on meth

@Anonymouse:

Well, first of all that's a lie as the drop was 55%, not 70%.

Secondly, and much more importantly, it took 6 months to drop that amount while it only took a little over 3 weeks to increase by 30% and that's probably why I didn't ask – because it was moving so slowly then.

As a cheerleader I expect you distort the truth as much as possible and even flat out lie from time to time, and that probably explains why you were called a prick by another poster here.

Anonymouse

@Best place on meth:

"I don’t mean to be repetitive here, but downtown condo inventory has increased by 30% since the start of this month. What’s the hell is going on"

I didn't notice you asking when it dropped almost 70% last year. I don't mean to be repetitive here.

AG Sage

@Renting: The number I usually see tossed around by professional landlords to compute cash flow is to assume 70% occupancy. Since you will be providing 100% occupancy, there should be some room there for bargaining.

Best place on meth

And over in mortgage broker land, this douche appears to be praying for interest rates to stay artificially low forever if possible.

http://www.canadianmortgagetrends.com/canadian_mo

Best place on meth

I don't mean to be repetitive here, but downtown condo inventory has increased by 30% since the start of this month.

What's the hell is going on?

jesse

@patriotz: "Did they keep insuring in Alberta in 2007-9 (20% decline) or BC in 2008-9 (15% decline) ?"

If we're talking about a 20-30% national decline the thought of insuring mortgages with huge systematic downside will start raising alarms, especially at CCPA and taxpayers' federations. That is, the number of assets under insurance will shoot up just as CMHC's reserve starts eroding. All this during a time when the government is trying to elicit a balanced budget.

How will the government handle the CMHC bottomless pit if prices start declining significantly? Is there an endgame they can't escape?

Girlbear

sorry, typo, should be "browse" 🙂

Girlbear

Every time I brouse through Vancouver MLS listings – and look at the God awful furnishings – I am reminded of how little disposable income these owners must have…

vreaa

@patriotz: re the Seattle link.

Thanks for this.

Note: sold 2001 for $623K

Listed Jul 2010 for $925K, now down in steps to $799K.

It's quite something to browse the Seattle listings.

Vancouver appears to be valuing it's comparable properties at twice the price of Seattle (or more!).

Devore

@Renting: I think people forget that as renters do have many options, lots of freedom, as well as consumer power (they have the cash landlords crave). When looking for a house, you hire a knowledgeable agent, an inspector, you look at dozens of places, you arrange financing, and put in conditions into a thought out offer. You should similarly be doing the same amount of work when looking for a rental. Interview your potential landlord. Make sure the place will suit your long term goals. Don't just sign up for the first place that's vacant. Real landlords, the professionals, not the ones that had no choice, love long term renters. They provide stability and predictable income. They also tend to be better quality, take better care of the place, don't agitate the neighbours, etc. In other words, they're "professional" renters.… Read more »

Less Anonymous

@Anonymouse: Even if you sign a lease the BC Tenancy Act allows you to move out after giving 2 months notice.

That is not true. Two months gives more time for the landlord to find a replacement tenant, but if they are unable to you will still be responsible for paying rent till the end of the lease term:
http://www.tenants.bc.ca/ckfinder/userfiles/files

Renting

@jesse:

You get a discount by signing a long term lease? From what I’ve seen that’s hit and miss. Too many LLs want the option to sell free and clear

Obviously if the landlord wants the option to "sell free and clear" it is not a good choice for someone who wants to stay long term. If I was looking for a place and the landlord told me that I wouldn't bother with it. Chances are he will sell or at least try which in itself is an inconvenience.

There are plenty of rentals out there that the landlords plan on holding the property long term as a rental and yes they will often even discount the rent if a long term lease is signed.

patriotz

@Best place on meth:

Here's what almost the same price gets you in the very best part of Seattle:

http://www.redfin.com/WA/Seattle/4817-NE-41st-St-

But it has no 8's in the price, and only one 8 and two 4's in the address, so I'm sure the "rich Chinese" wouldn't be interested.

Fantastic lake views from this 4 BR, 2.75 BA, home in the heart of Laurelhurst. Huge Trex deck is made for entertaining! Main level offers 3 bedrooms and 2 full baths, including a suprising master suite w/ 5-pc BA & private deck access. Downstairs family/bonus room has been sound-proofed & wired. .. ready for first-class media room or band practice! 4th BR, 3/4 BA, huge laundry & kitchenette could make MIL, or?? Oversized 2-car with extra storage space and workbench.