OV Buyers sued for wanting out
What weird times we live in.. As people lined up to buy Olympic Village suites at firesale prices others are being sued for not wanting to complete their pre-sales agreements. A few years ago the lawsuits against pre-sale buyers went not only for their deposits, but for the difference in sales price of the unit as well. Fortunately for OV presales buyers they only seem to be going after the deposits, which are generally less than $100k.
In one of the lawsuits just filed, Port Coquitlam resident Cordelia Lins and her husband had put down $50,090 in May of 2008 for a unit they originally agreed to buy for $500,900. Problems with records make it difficult to determine the assessed value. Ms. Lin said she couldn’t say anything about the lawsuit because she was “in negotiations.”
Vancouver resident Gee Lim, who paid the largest deposit for a unit he originally agreed to buy for $1.4-million, did not answer his phone. He originally agreed to buy his unit in April 2008. Last July, the province’s land-assessment authority valued that unit at only $1.172-million.
The third buyer, who also put down his deposit in April 2008, has no phone listing at the Richmond address provided in the suit. Tian Qi had agreed to pay $516,000 for his unit in the Kayak building that is now being marketed. It was assessed at $504,000 by B.C. Assessment Authority last July.
Please note these are different cases than the six buyers who sued over building deficiencies, most of those cases have been settled. Read the full article over at the Globe and Mail
February 21st, 2011 at 11:44 pm 1
The Olympic Village isn't for everyone. It takes a special pallet to appreciate the aroma and texture of the cum stains in the Sydney Crosby suite, for example.
These buyers are realizing that their provincial tastes don't measure up.
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February 22nd, 2011 at 12:32 am 2
Can households withstand oil, food price shocks?
"Household balance sheets in both developed and emerging markets, Mr. Holt said in an interview, are not yet strong enough to withstand sharply higher energy and food costs.
..….
“This is getting much more reminiscent of 2008 by the minute as an oil shock is being imposed upon fragile recoveries, only to be met by central bank talk of taking the punch bowl away,” Mr. Holt said earlier in a research note."
from the Globe and Mail
a TSHTF moment for all you RE bulls..……
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February 22nd, 2011 at 12:55 am 3
@blueskies:
Oil price will only affect US and weaken its military and econiomic power,while China will subjugate US in next decade with a lightening strike once it has completed it economic and military build up.
Middle East will soon be falling into Muslim fundamantalists’ hands and tuned into a Islamic dictatorship in parliamentary disguise like the one as Iran. Once the whole region has completed its Talibanization,will u expect those Arabian be nice to US and its Cronies? Luckily,Vancouver is blessed with Chinese Money which wisely guided and channelled to Vancouver to supportted Van RE which in turn props up Canada economic;due to Van’s Chinese donminance,Chinese government is encouaging its citizens buying all sort of properties to establish a beachhead in future Canadian and Chinese alliance against American Imperialism .So I don’t see there is any minor downwad collectinon in this century and beyond.More and more Chinese will become permanent citizen and their RE interest will stretch beyond Vancouver and Toronto.Canadian should wisely switch its reliance to China instead of the falling Empire.It is the best time to invest in Van Condo.
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February 22nd, 2011 at 12:57 am 4
Forget just the deposits, these people should be sued for the difference as well. Put the message out there loud and clear that it's not a poker chip ( well it is) it's the purchase of a property. It's ok when they make money but if they lose money they want to just walk away? Don't think so, pay the piper losers.
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February 22nd, 2011 at 1:00 am 5
@blueskies:
Not so sure about that, if it tanks again they will drop the rates back down to zero and the stupidity starts all over again. Best thing that can happen to crush the market here is a booming economy ( worldwide) then rates will rise fast.
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February 22nd, 2011 at 1:00 am 6
I remember the stories about presales buyers being sued for the difference between the original contract price and lower market price when they tried to walk.. I wonder how many waited in lines for those units and tried to flip them on craigslist like the sovereign story.
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February 22nd, 2011 at 1:10 am 7
I don't understand why these people want to get out?? It's like trying to get out of claiming a winning lottery ticket! Haven't these people heard about the hot asian money, land constraints, bidding wars, March 18th deadline, great cap rates, world-class city status and that if they don't buy now they will be priced out forever??
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February 22nd, 2011 at 1:22 am 8
@Don Lapre:
Yeah really, with rich Asians lined up 7000 deep to buy in Vancouver why would anyone NOT want to be a part of of a real estate market that only goes up?
Or sideways.
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February 22nd, 2011 at 1:47 am 9
Am I misreading the article. It sounds like the recent media story of people buying in the OV was really Rennie's way of getting people to complete their original contract by reducing the contract price on average by 30 percent? So no or very few were "new" sales. Is this right?
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February 22nd, 2011 at 2:04 am 10
From last thread: Best place on meth Says:
February 21st, 2011 at 1:22 pm
"@vreaa:
I’m not so sure about the loonie coming down.
Did you see oil up $5.66 today? I wonder how that will affect our petro-dollar."
——-
And TODAY, oil up 9-10 percent,
but loonie is…..down (a smidge, 0.16%, against USD).
Deflationary wave coming, folks.
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February 22nd, 2011 at 2:07 am 11
…and Vancouver RE will be in the middle of the deflationary pack.
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February 22nd, 2011 at 2:13 am 12
@vreaa: Can you please explain how this translates into a deflationary wave?
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February 22nd, 2011 at 2:13 am 13
Blood bath in U.S. "Home prices may fall 20% more"-CNN. Coming to Vancouver soon.
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February 22nd, 2011 at 2:14 am 14
I'm wondering, does anyone have any idea on when we might start to see some real price declines on Vancouver real estate? So far any price declines have proved quite elussive.
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February 22nd, 2011 at 2:14 am 15
@VanRant: How do you know?
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February 22nd, 2011 at 2:17 am 16
@Don Lapre: "Haven’t these people heard about the hot asian money"
Read the article. They ARE the "hot asian money"!!!
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February 22nd, 2011 at 2:24 am 17
@900kCrackHouse:
When has always been the big question around here.
Let's just say all the markers are looking good for a crash starting this year and lasting 3-7 years. The greatest declines should be 2012 and 2013.
It will fall farther than most people would have believed possible, between 50-70%.
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February 22nd, 2011 at 2:34 am 18
Good news for Vancouverites.
Just heard on CBC radio that Rennie sold about 120 of the OV condos. He is now going to take some previously tagged for renting and sell those to.
No link yet.
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February 22nd, 2011 at 2:34 am 19
http://www.cbc.ca/news/canada/british-columbia/st…
Breaking News!!! (says CBC). Because in Vancouver, we have nothing else to talk about except real estate. Yeesh.
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February 22nd, 2011 at 2:40 am 20
@Patiently Waiting: "Just heard on CBC radio that Rennie sold about 120 of the OV condos"
Yesterday's post on this very blog was all over that. The MSM's normal sockpuppets take longer to get their stories straight than online forums and blogs. 8)
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February 22nd, 2011 at 2:42 am 21
@900kCrackHouse:
When has always been the big question around here.
Let’s just say all the markers are looking good for a crash starting this year and lasting 3-7 years. The greatest declines should be 2012 and 2013.
It will fall farther than most people would have believed possible, between 50-70%.
****
Yes, trust the opinion of the graduate student with no skin in the game. It is good to see that the ivory tower still teaches you to apply your pie in the sky analyses – 70% declines. Lol. That laugh made my day.
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February 22nd, 2011 at 2:46 am 22
@21 Dr. Reality Says:"Yes, trust the opinion of the graduate student with no skin in the game."
'Skin in the game' made all the difference in the rest of the world's RE markets. Look out your window once in a while.
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February 22nd, 2011 at 2:53 am 23
More pain in the US: Bob Shiller looking at 15%+ declines in the US, even after a 20% decline from peak. But don't listen to Shiller. He's never right.
Home Prices Slid in December in Most U.S. Cities
Canada doesn't have those problems: no foreclosure backlog, CMHC, and
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February 22nd, 2011 at 3:05 am 24
@vreaa:
Stagflation still looks likely, we have central bank policies promoting inflation and government spending propping up a weak economy.
Good read here:
http://www.safehaven.com/article/20055/if-you-can…
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February 22nd, 2011 at 3:19 am 25
@blueskies #2
“Household balance sheets in both developed and emerging markets, Mr. Holt said in an interview, are not yet strong enough to withstand sharply higher energy and food costs.
If oil prices continue higher as the arab world goes through major changes, that in itself should slow the economy, so interest rates won't be increased any time soon.
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February 22nd, 2011 at 3:23 am 26
@Best place on meth: Agree, stagflation a possibility… but will the "central bank policies promoting inflation" be able to overcome the deflationary effects of broadly crashing global RE markets, descending stockmarkets, unemployment, debt at limits, weak economies? (Rosenberg has good comment today on how US economy is so much weaker than MSM make out). And backlash against QE appears to be rising.
Thus deflation still possible/probable. (Significantly more probable than stagflation, IMHO).
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February 22nd, 2011 at 3:27 am 27
Anyone on Twitter? There is an RE discussion that happened this morning at 9 am by a lot of Vancouver RE types. Hashtag is #YVRREChat.
Would be good to get some balance there. Seems to be primarily RE Professionals leading the conversation. I'll monitor and remind everyone next week.
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February 22nd, 2011 at 3:33 am 28
23 jesse Says:"More pain in the US: Bob Shiller looking at 15%+ declines in the US, even after a 20% decline from peak.."
It's not rocket science, and even though you don't see it in the news as often Shiller still makes update versions of his famous graph available on his academic site:
http://img576.imageshack.us/img576/1210/shillerho…
The economic crater of Vancouver's collapse will be material for decades of scholarly work.
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February 22nd, 2011 at 3:34 am 29
@Dr. Reality:
Yes, I always trust the prognostications of those with vested interests in status quo. There are two sides to ever coin.
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February 22nd, 2011 at 3:35 am 30
What is it with all these "graduate student" references on this site? Are the bulls celebrating the triumph of the stupid?
Are they proclaiming that critical thinking is useless because if you use reason you will only miss out on real estate gains?
Guess what? The stupid and uneducated always loose. Look at all those loosers in the USA with underwater mortgages who said, don't think, just buy a house.
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February 22nd, 2011 at 3:37 am 31
@fixie guy:
But no one will give a shit about Vancouver. It is an insignificant place.
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February 22nd, 2011 at 3:40 am 32
@jesse: 50% is better than 30%, though not as good as 70%
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February 22nd, 2011 at 3:41 am 33
> 900kCrackHouse Says:
>February 22nd, 2011 at 10:14 am
>I’m wondering, does anyone have any idea on when we might start to see some real price declines on Vancouver real estate? So far any price declines have proved quite elussive.
I shook my magic eight ball spreadsheet. It says April. Year on year declines of 1.5% in April. (That's on the Van Board HCI Index price, btw. Not averages. *Definitely* not averages.)
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February 22nd, 2011 at 3:43 am 34
@31 WFT? Says:"….Vancouver. It is an insignificant place."
And tulips are an insignificant agricultural product. The 'place' won't be studied.
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February 22nd, 2011 at 3:49 am 35
Anecdote:
'Feeding Frenzy' in Richmond –
"45yr old house; 60×120 lot; Willing to Accept $950K 3mths Ago; Sold For $1.4M; Buyer 21yr old Kid In Car, On Phone To Parents In China"
http://wp.me/pcq1o-1T5
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February 22nd, 2011 at 3:59 am 36
This is a comment posted under the globe and mail story about the effect of food and oil shocks on canadian households:
We know mortgage rates will be rising, since they can’t fall any further, removing 1st time homebuyers, thus crushing the real estate market. We know that already 70% of Canadians own real estate, so there is no big pent-up demand. We know taxes will only increase in a country with an historic deficit and an exploding debt. We know idiot 0/40 then 5/35 down- payment/ amortization rules have allowed armies of people without money to buy houses. We know household and mortgage debt is extreme. We know the cost of living is rising and salaries aren’t. We know no data exists to support the argument of rich Asian immigration saving the housing industry, otherwise CREA would definitely publish it, and therefore it’s a myth. We know according to the IMF Canada has the highest housing prices in the world! We know the Boomers are house-rich, in need of retirement cash, and will soon dump.
And now we know more about Canadian lending standards from Business News Network (BNN) speaking with Neil Mohindra, Director, Centre for Financial Policy Studies, Fraser Institute concerning the CMHC Moral Hazard.
http://watch.bnn.ca/squeezeplay/january-2011/sque…
This is what really matters. The Bank of Canada and our Finance Minister has been telling the Canadian public that the housing party is over. The CMHC has almost a half trillion of debt on its books; CMHC is leveraged 10 to 1; that scares the living hell out of the Finance Minister and the BoC. You can't fight the BoC!
All this points to a declining housing market.
Buy low, sell high….now is the time to sell.
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February 22nd, 2011 at 4:06 am 37
It truly amazes me how these people think that since they made a bad investment decision that someone should compensate them. I don't see anyone backstopping my loses for buying a shitty investment, why do they think they should be any better. Unless there was a serious case of fraud here these people should accept their losses and move on.
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February 22nd, 2011 at 4:07 am 38
Spain is different market, but worth noting:
Housing market overhang traps Spaniards in debt
http://www.theglobeandmail.com/report-on-business…
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February 22nd, 2011 at 4:11 am 39
@900kCrackHouse:
The bar has already been set for quite some time by the convoluted workings of BCREA,municipalities and provincial bureaucrats.Vancouver itself has been promoted to become $1M average SFH for the last several years and only now we have seen the level of insanity that the RE people are trying to sell above that price point. I'm not sure what it will take for prices to start coming down as the new 'norm' has been ingrained in peoples' psyches.
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February 22nd, 2011 at 4:14 am 40
Short term, if the middle east continues to boil or we see an escalation of the Euro crisis, you're going to see reduced bond yields due to a flight to safety aka continued high RE prices. 5 year bond is down 13bps today alone, back to 2.63%. The risk is if we slip into stagflation due to an oil supply shock if the protests spread to Saudia Arabia or other major producers. Then H&F will really be in a tight spot and I would expect to see a serious RE correction as rates would have to be raised to battle inflation caused by rising food and energy prices. This risk would be mitigated a bit in relation to other economies by the fact that we're a petro-currency so our dollar should remain strong or even rise further.
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February 22nd, 2011 at 4:15 am 41
@Anonymous:
It might be different market even with lots of similarities but these words are kinda intriguing… could be different here though;)
"Most Spaniards have ended up feeling like losers after taking advantage of a mortgage bonanza in the housing market boom that burst in late 2007."
"There is an entire generation of young Spaniards with a millstone round their necks that will have to work their whole life to pay for houses now worth half what they bought them for," said Enrique Quemada, head of One to One Capital Partners.
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February 22nd, 2011 at 4:22 am 42
@mflat: thanks for the heads-up re the twitter chat.. we'll collate some of the discussion, for the record.
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February 22nd, 2011 at 4:23 am 43
I predict this to be a very bullish summer this year due to the strong spring sales and puff pieces like the one below that was just published.
—
The Liveability Ranking and Overview February 2011
Vancouver (Canada) sits at the top of the Economist Intelligence Unit's Global Liveability Ranking, a position that can only have been cemented by the successful hosting of the 2010 winter Olympics and Paralympics, which provided a boost to the infrastructure, and culture and environment categories. Harare (Zimbabwe) is the lowest-scoring city at just 37.5%. Despite hopes of elections in 2011, stability and healthcare scores of just 25% and 20.8% respectively highlight a bleak situation.
The Liveability Ranking and Overview assesses living conditions in 140 cities around the world. A rating of relative comfort for 30 indicators is assigned across five broad categories: stability; healthcare; culture and environment; education; and infrastructure. The survey gives an overall rating of 0-100, where 1 is intolerable and 100 is ideal.
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February 22nd, 2011 at 4:23 am 44
@Troll: We don't need higher rates for Vanc RE to crash. Global economic crises in 2008 bailed us out; it won't happen second time round.
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February 22nd, 2011 at 4:26 am 45
@International Slum Village: "The Liveability Ranking and Overview February 2011"
If you take a look, the liveability rankings are used, in part, by corporations to scale employee pay. Thus, it'd be used to give employees that are Vanc bound LESS pay!
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February 22nd, 2011 at 4:26 am 46
@Troll:
How about rich Chinese, can't they cushion locally whatever it goes around the world. Vancouver should be protected from any side effects I guess.
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February 22nd, 2011 at 4:30 am 47
@vreaa: Sure, it doesn't *need* anything. Why do bears always hang on this type of statement like a 'get out of jail free' card? Point is it's NOT LIKELY to crash until there is a contraction of money flowing into RE, either in the form of higher rates or a depressed economy. It's not rocket science, all this mumbo jumbo about changing buyer sentiment, it's not going to tip the scales and trigger a crash because people will keep doing what they have been doing as long as they can. Why change? They will when they're forced to change. Short term, current world events are bullish for Van RE, just like last year's Euro mini-crisis.
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February 22nd, 2011 at 4:36 am 48
#36 WFT? Says: "And now we know more about Canadian lending standards from Business News Network (BNN) speaking with Neil Mohindra, Director, Centre for Financial Policy Studies, Fraser Institute concerning the CMHC Moral Hazard."
Hilarious, exactly what I've been saying for years about the government's role in this fiasco. It's obvious to me that prick Harper sold us out to the banks but that's for academics to sort out. One interesting point that never occurred to me is the risk, and therefore the economic hit, in the US was spread out among the government, banks, and a number of other financial institutions. Harper's 'action plan' was to proactively centralize all the dispersed risk in the CMHC, and ultimately your pocketbook. His idiotic policies will go down as the largest deliberate transfer of taxpayer dollars directly to banks in Canadian history. A national traitor as far as I'm concerned.
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February 22nd, 2011 at 4:36 am 49
@WFT?:
Not so, you will come to realize one day the significance of the western Canadian provinces to be much more important than the east coast and the rise of Vancouver as a financial hub because of BC's strategic export capabilities in natural resources.
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February 22nd, 2011 at 4:41 am 50
#47 Troll Says: "Point is it’s NOT LIKELY to crash until there is a contraction of money flowing into RE, either in the form of higher rates or a depressed economy."
SOP. Suppress what doesn't fit into your narrative. Those are the only two options for contracting 'money flowing into RE'? Piss off, parasite.
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February 22nd, 2011 at 4:45 am 51
@fixie guy:
Hey Lloyd, nice analysis shit-fer-brains. Thanks for the insight. I could tell you the sky was blue and you'd argue, you add nothing to this blog except vitriol.
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February 22nd, 2011 at 4:45 am 52
"across five broad categories: stability; healthcare; culture and environment; education; and infrastructure."
so i guess housing affordability is not one of the criteria? nor incomes?
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February 22nd, 2011 at 4:49 am 53
#51 Troll Says: "I could tell you the sky was blue and you’d argue, you add nothing to this blog except vitriol."
Fascinating. The points I made blow your idiotic argument out of the water, and you agree they're obvious in a vitriolic manner while accusing me of being vitriolic. Is this 'abckwards' day?
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February 22nd, 2011 at 4:54 am 54
@fixie guy: Are you delusional? What points exactly did you make, cause you didn't bother to type them. You're arguing that incomes and credit are not the main drivers for RE in Vancouver? Really?
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February 22nd, 2011 at 5:01 am 55
@International Slum Village, "Vancouver (Canada) sits at the top of the Economist Intelligence Unit’s Global Liveability Ranking, …"
You're right, it's a puff piece. Toronto (97.2) scored only 0.8 points after Vancouver (98.0), and even Calgary (96.6) was high up on the list, sandwiched between Vienna (97.4) and Helsinki (96.2). Can't wait for my fellow Calgarians to start loudly proclaiming "We're a World Class City!" and "We're pretty much on par with Vienna and Helsinki!".
As we used to say in the very early 1960s, "bullshit baffles brains".
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February 22nd, 2011 at 5:04 am 56
@Troll: So if income is a driver of RE in Vancouver it looks like we're in for a correction. I'm probably not telling you anything you don't know, but income levels in Vancouver don't come close to being able to sustain the current prices. They haven't been keeping up with RE.
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February 22nd, 2011 at 5:14 am 57
Re: Liveability Ranking
I'm moving to Harare. Obviously being at the top of the Economist Intelligence Unit’s Global Liveability Ranking does not actually make a city liveable. I also don't think the Olympics really helped me, so it would obviously be a good idea to move to a city where there is absolutely no threat whatsoever that the Olympics will ever be held there. I'm also sure there are no Chinese real estate agents circling over Harare in helicopters. Harare here I come! No more fucking real estate speculators! See ya later Vancouver!
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February 22nd, 2011 at 5:19 am 58
True, Vancouver as a multiple of median income is outrageously expensive. But, less than 4 percent of the stock of housing sells each year. One would have to know the income levels of this minority to make a valid comparison. And I would suspect that you would find that this group does have the means for today's prices because someone is lending them the money. The weakness in the market is not new home buyers – its over used home equity loans.
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February 22nd, 2011 at 5:21 am 59
@RecallThemAll:
Then why were International & interprovincial exports in BC down 9% in 2009? 9% is a LOT. http://www.bcstats.gov.bc.ca/data/bus_stat/bcea/F…
BTW, BC Stats discontinued so many reports. Why in the heck is 2000 the most recent data for this: http://www.bcstats.gov.bc.ca/data/dd/handout/mans…
And check out this little number. Another discontinued one: http://www.bcstats.gov.bc.ca/pubs/bcbi/bcbi0611.p…
Check out figure 3. Imagine five more years of those trends.
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February 22nd, 2011 at 5:24 am 60
@Anonymous:
"So if income is a driver of RE in Vancouver it looks like we’re in for a correction. I’m probably not telling you anything you don’t know, but income levels in Vancouver don’t come close to being able to sustain the current prices. They haven’t been keeping up with RE."
I know that the average/median income in Vancouver hovers around $55-65K, but I'm wondering if there are any histograms or any other charts/figures which might demonstrate the "spread" of incomes? I had a look but couldn't find anything, perhaps somebody with better Google skills than me might have some luck. Would be interesting to know if there are two peaks in the data, suggesting a distinct population of "rich" people, or whether it follows a plain old normal distribution.
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February 22nd, 2011 at 5:35 am 61
OK, so here's something. BCStats gives the number of taxfilers in 2008 earning $15K+ as 1175760, $25K+ as 916930, $35K+ as 718810, 50K+ as 461440, and $100K+ as 109510, all out of a total of 1710310.
There's also :
http://www.ccsd.ca/pr/2003/censusincome.htm
Which has this to say about the 2003 census :
"After Toronto, family incomes were most unequal in Vancouver, where the bottom 10% had an average income of $8,700 and the top 10% had $205,200 on average. "
Not exactly what I was trying to find, though.
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February 22nd, 2011 at 5:41 am 62
@Anonymouse:
Income is only part of the equation, it's affordability which allows people to get into a 500k mortgage with a 50k income. At 35 years and 3.5% you would only need to cough up $2100/month. At 7% and 25 years you'd have to pay up $3500/month. Affordability changes with incomes, interest rates and mortgage rules, which way do you think we're headed (hint, income isn't growing)?
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February 22nd, 2011 at 5:46 am 63
@Anonymouse: I've done this research before and I know that in 2006/7, Vancouver had 18% of households making over 100K where in other cities it was only 13% of households over that amount. I've always thought, for that reason, that it makes more sense that our *stock* should have a greater number of high end units for inventory, whether they're Coal Harbour penthouses, Shaughnessy mansions, or Point Grey Edwardians. South-East moldy teardowns, however… not so much.
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February 22nd, 2011 at 5:53 am 64
@RecallThemAll:
People have been saying that since he 1890's. Hasn't happened yet.
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February 22nd, 2011 at 6:05 am 65
@joycer: It would be interesting to graph the maximum mortgage based on the median income in Vancouver going back to the 90's. Take all the changes to CMHC rules and interest rates and I'm sure it will match up nicely with the rise in RE prices.
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February 22nd, 2011 at 6:25 am 66
@Anonymous:
But what I'm interested in is the change in incomes as a driver. If current rates and incomes are supporting current prices (that's a controversial statement for bears I know) then I would be looking for a change in those as a pre-cursor to substantial changes in prices. In order to come to the conclusion that current incomes can't support current prices, you'd need to see some data showing worsening trend of the % of income to service current debt levels. Thanks to rock bottom interest rates and stable incomes I don't think that's the case.
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February 22nd, 2011 at 6:25 am 67
@Anonymouse:
A distribution in which there are two peaks (modes) is called a bi-modal distribution.
Income levels–individual and household–do not follow a normal distribution, which is why medians (rather than means) are the preferred measure of central tendency for income.
As for your question, the answer is "no" there is not a spike of "rich" people. Indeed, over the last 30 years in the developed world, the number of "rich" (relative to everyone else in the economy, that is) has fallen substantially. Concomitant with this trend, however, is that those who are rich are increasingly so possessing an ever greater proportion of the total income (and wealth).
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February 22nd, 2011 at 6:26 am 68
http://www.theglobeandmail.com/globe-investor/per…
"You talk about good versus bad debt. For instance, you don’t believe it’s a good idea to borrow for home renovations.
Even at the peak of the real estate boom, very few projects returned 100 cents on the dollar. In most cases, even then, you were taking a loss when you put money into your house. Now it’s clear, most renovation project won’t return more than 70 cents on the dollar even if you sell right away. I was trying to bring home the point that this is not an investment – you’re locking in a loss.
You’re the first personal finance expert I’ve spoken with in a long time that doesn’t believe borrowing to build equity in your home is good debt.
In general, a moderate amount of mortgage debt is good debt, because your house will grow in value over time. But we can’t go [in] with this idea that anything we do with home equity debt is good debt. You can overdose, you can overspend. If you want to do this project that will add some value to your home or make your life better, fine, but don’t borrow more than half. It’s also important to keep some of your home equity there for the real emergencies, where you simply have nowhere to turn in case your life completely falls apart. "
That is not what all those HGTV shows are telling us. Reno, flip, reno, flip.
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February 22nd, 2011 at 6:29 am 69
@International Slum Village:
I notice economy, employment, and housing affordability does not enter into the "livability" equation. Guess as long as healthcare is "free", and no one is seriously standing up for their rights, everything else just works itself out?
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February 22nd, 2011 at 6:37 am 70
"In general, a moderate amount of mortgage debt is good debt, because your house will grow in value over time."
She was OK in the preceding paragraph but this is nonsense. You cannot assume that any asset will appreciate a priori. Substitute "margin debt to buy dot-com stocks in 2000" and you'll get the point.
Good debt is debt that enables you to buy an asset that has a higher yield than the interest on the debt over the life of the asset. Period.
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February 22nd, 2011 at 6:37 am 71
@whydoItry: You can't judge affordability only by looking at the people who are buying. That's a classic example of begging the question. People who buy are far more likely to find their purchase affordable, no?
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February 22nd, 2011 at 6:53 am 72
Couldn't resist
Hey Da Mann and Renting (or rent boy) Jesse … wait for it, wait for it … right in the Gary Glitter!
read am and weep
screened based on sold price today.
#1 and #2 sold under LP
#3 through to # 13 sold OVER!!!!!!
#3 V870070 6076 Angus List Price 2,998,000 Sold Price 3,430,000
#4 V869448 2237 w37th Ave LP 2,398,000 SP 2,800,000
#5 V869100 4035 w28th Ave LP 1,988,000 SP 2683,000
shall I go on!!!
ps I posted this from an anonymouus gmail account in case you threaten me with exposure. I suspect I'm going to enjoy annoying you if I'm not busy toiling in the back yard or basement of my rat infested SHITBOX (your words). Don't worry I'll keep you up on all the depressing news!
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February 22nd, 2011 at 7:00 am 73
@patriotz:
I agree with the definition of 'good debt', but I think that comparing RE to .dot com stocks is a bit of stretch. There's a pretty good track record that RE at least keeps pace with inflation over the long term. Obviously the same can't be said for tech stocks. The two are in a different league all together.
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February 22nd, 2011 at 7:00 am 74
@Troll: I meant to say, "I agree with your opinion about the poor definition of 'good debt'"
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February 22nd, 2011 at 7:02 am 75
@Troll: The problem is that people are piling on debt, not saving and doing this at a time that rates have nowhere to go but up.
Once rates start rising it will be easy to show a worsening trend of the % of income to service debt. You made the point with this statement.
" Thanks to rock bottom interest rates and stable incomes I don’t think that’s the case"
Exactly…what is the result of stable incomes and rising rates?
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February 22nd, 2011 at 7:03 am 76
@XXX: Does this not show that people are listing their properties too low?
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February 22nd, 2011 at 7:04 am 77
You know the bears here knock the tactic of taking the listing off the market, and then waiting “for the market to return.” Well, for the past few years, that tactic has worked as per the previous email regarding LP vs Sold Price. Throw in the fact that house prices returned after their 2008 decent (yes, yes, cheap easy credit), and many bears will be waiting till Canada lands on the moon before they see any type of psychological shift that would facilitate price declines.
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February 22nd, 2011 at 7:07 am 78
@Anonymous:
You just repeated my point, that we need to see a change in rates or incomes before you will start to see a significant move in prices. With current world events, that increase in rates just got put on hold for a while longer.
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February 22nd, 2011 at 7:15 am 79
@Troll: You're right that the rate increases may not happen in the very near future. But…next month brings changes to mortgage qualification that have the same affect as interest rate changes. Don't worry, the rate hikes are coming, all while people pile on more debt. Those hikes will be coming sooner that people retire their debt.
BTW…it may not take interest rate hikes to bring Vancouver RE down.
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February 22nd, 2011 at 7:16 am 80
Sorry for getting that off my chest. I was pissed from the other day.
I guess they are listing them too low but I'm as DUMBFOUNDED as all you bears are at the prices. I wouldn't pay these prices unless you have a long time horizon or you can afford to lose some money.
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February 22nd, 2011 at 7:21 am 81
@XXX:
So what? These houses are sold for millions of dollars, and WHO CARES??? Can you afford it? No! Can I afford it? No! Not even if I won 6/49, I could not afford it, so what satisfaction do you get from these sales?
I am pissed off that we don't see any of the pretty Hollywood people living here, or any of the rock stars. The question remains : who are the buyers, if they are not politicians, rock stars, professional athletes, and CEOs. I can only guess – some anonymous & wealthy drug dealers or foreign entrepreneurs, who pay no taxes at all – cause they know how to make a buck.
We are not going to get to live any better because of those sales. We will not have decent roads, the food prices will only keep rising (and NOBODY talks about that problem in the media), and we all, ordinary working people, will only get poorer and poorer. You are going to realize that once you start trying to save the money for retirement. If ever…
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February 22nd, 2011 at 7:23 am 82
"There’s a pretty good track record that RE at least keeps pace with inflation over the long term. Obviously the same can’t be said for tech stocks."
Tech stocks have done a LOT better than inflation over the long term.
The problem is that you don't get long term returns for any asset class, regardless of how long you hold, when your entry point is during a bubble. Get it?
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February 22nd, 2011 at 7:24 am 83
@Indeed…:
Yeah. Just move. This place sucks, I agree. The answer is to go to a better place. There are lots of them out there.
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February 22nd, 2011 at 7:27 am 84
Indeed – is that North Korean for "I'm a loser!"
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February 22nd, 2011 at 7:50 am 85
@XXX:
"Couldn’t resist
Hey Da Mann and Renting (or rent boy) Jesse … wait for it, wait for it … right in the Gary Glitter!
read am and weep
screened based on sold price today.
#1 and #2 sold under LP
#3 through to # 13 sold OVER!!!!!!
#3 V870070 6076 Angus List Price 2,998,000 Sold Price 3,430,000
#4 V869448 2237 w37th Ave LP 2,398,000 SP 2,800,000
#5 V869100 4035 w28th Ave LP 1,988,000 SP 2683,000
shall I go on!!! "
I shouldn't really reply to this but here goes. First off what IS your point? That a few houses sold over list? No one ever denied that. To show that the prices are skyrocketing? Sold over list means nothing, what are the comparables. I can list a place for $1 and I bet it sells over list. We have proven over and over on here that listing LOW and getting a bidding war works, but it usually results in the "right" price for that property anyways
I never said your place was a shit hole. I'm the one who said I would take ANY shit hole on the westside over crap on the eastside. My argument was that there was no way in hell your place would rent for $5k a month if it was indeed a land value only property as you originally said.
But here is what gets me. What possesses someone who can afford a $2 million dollar home to come on an obscure housing blag to brag or gloat or whatever it is you are trying to do. You are either
A stupid
B extremely insecure
C shit scared of the massive debt you have bitten off and looking for reassurance or
D All of the above.
Seriously, if I could afford a $2 million dollar home on the westside and "life was good" I think I would have better things to do then go na nannnn anna naaaaaaaa on a housing blog.
What a tool!
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February 22nd, 2011 at 8:03 am 86
they're not the only one's wanting out of their deal
http://www.bclocalnews.com/richmond_southdelta/ri…
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February 22nd, 2011 at 8:05 am 87
@DaMann: You forgot E: Lying
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February 22nd, 2011 at 8:13 am 88
@vangrl:
This is priceless
"It’s nothing with me,” Wang said. “I cannot say something to you. I’m only a realtor. I cannot tell you much."
Never a truer word spoken. I can't tell you much, advise you much or do much of anything really, but I will collect my $20k cheque please. Professionals indeed….
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February 22nd, 2011 at 8:16 am 89
@vangrl:
it also tells me I would never buy from a non citizen either. I DID NOT KNOW THAT. That is scary new info to me!!!!
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February 22nd, 2011 at 8:19 am 90
#78 Troll Says:"…. we need to see a change in rates or incomes before you will start to see a significant move in prices."
Neither was required in the States, go back to trolling 4Chan.
FFS, quit feeding this dickhead.
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February 22nd, 2011 at 8:20 am 91
Anyone here know what the affects on our realestate and rents be in the following scenario?
a) 3.0 Magnitude quake hits the GVRD but leaves minimal damage
b) 5.0 Magnitude quake hits the GVRD
c) 8.5 Magnitude quake hits the GVRD
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February 22nd, 2011 at 8:27 am 92
-not that bright
-totally insecure (small penis, male pattern balding etc.)
-no net debt
And because I did rent for a few years in the hood I'm painfully aware of what it costs to rent a nice place. Had to buy b/c landlord decided to sell. From a purely financial modelling perspective buying is dumb. I can model cash flows. Can you model intangibles? – I can't. The brightest minds modelling almost brought the western world's economies to a halt a couple of years back. I CAN afford the risk associated with the purchase of the intangibles important to me (which ARE different for me than everyone else). Sorry for insulting you. You probably shouldn't have been included in the headline of my first list but there's a collective on this site who remind me of the Fonz admitting he wasn't right.
Promise I'll never read /write again – over and out for good!
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February 22nd, 2011 at 8:28 am 93
@SourLemon: See what a 6.3 did to Christchurch in NZ and now image what a 8.5 will do to Richmond! Still wanta pay 1.5 mill for a house?
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February 22nd, 2011 at 8:33 am 94
@VanRant:
8.5? Forget Richmond, the whole damn lower mainland would be F@#%^. Bridges gone, tunnels gone, these lovely towers they are slapping up by the day? No chance I would want to be in one, or on the city streets below with the raining glass.
Having said that, it wouldn't stop me from living here. It's something we all live with living here but we go on.
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February 22nd, 2011 at 8:42 am 95
@XXX:
The financial system nearly collapsed, because the models did not account for risk properly, especially counter-party risk, not because they didn't know how to price "intangibles".
I don't know to be a genius to know that, as you apparently do, that buying in Vancouver today is way more expensive than renting, period, even without having to pull out a calculator.
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February 22nd, 2011 at 8:43 am 96
@patriotz:
Come on, how much is Pets.com worth today? With tech stocks you have a significant risk that that they go to zero because the company goes under. That risk doesn't exist for most real estate. In that respect buying a single tech stock vs. buying a piece of RE are completely different animals. Get it?
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February 22nd, 2011 at 8:46 am 97
@fixie guy:
You're right of course, in the US people just woke up one day and thought, "Holy Shit prices are too high", panicked and began selling. There was no such thing as rising rates, balloon payments, and all kinds of other funky mortgage products which were resetting at much higher rates which affected affordability. I mean really, do you do any critical thinking or do you just parrot whatever bear lines suit your fancy? By the way, I loved you in Dumb and Dumber, funny stuff Lloyd.
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February 22nd, 2011 at 8:50 am 98
@DaMann
"it also tells me I would never buy from a non citizen either. I DID NOT KNOW THAT. That is scary new info to me!!!!"
AGREED!
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February 22nd, 2011 at 8:50 am 99
@Troll: Yes RE is different as it can go to negative! With stocks, the most you can lose is how much you paid for the stock and any interest on any loans you took out to buy the stock. With RE, when you lose and can't sell, you are liable for not only the loan and interest but also property taxes, utilities, insurance, maintenance, etc which can add up quickly.
Personally I view stocks as much safer because if at least if I lose, I know the max I can lose unlike RE.
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February 22nd, 2011 at 8:52 am 100
@vangrl: Seems to be that:
1) The lawyer should have really done his homework or else it's really the lawyer's fault.
2) CRA seems to be taking the easy route of chasing after the new owner rather than going after the culprit who is much harder to chase down.
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February 22nd, 2011 at 8:57 am 101
@XXX:
I am a loser? What are you? Twelve?
No, I am not a loser. I have a family, steady job, paid vacation – not one month but 30 working days, great benefits at work, extended dental and medical for me and my spouse, great pension plan, I travel three times a year to warmer and sunnier places. I pretty much have all I want except for a house. And I will not be able to buy a house in Vancouver at these prices – ever. But neither will you. And IMHO – you don't have a job either and have nothing of your own to show for. Other than dream about James Bond movies, hot babes and cool cell phones.
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February 22nd, 2011 at 8:59 am 102
@Troll:
So in other words, you're saying that you shouldn't put all your eggs in one basket. Why does that rule apply to tech stocks but not houses?
With a failed tech stock, you only lose your initial capital investment. When you buy a house with zero down and it falls in value by 30%, you end up owing hundreds of thousands of dollars. How is that less risky, exactly?
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February 22nd, 2011 at 9:00 am 103
New Listings 290
Price Changes 87
Sold Listings 209
12556
Lotta sales. Bring on March 18th.
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February 22nd, 2011 at 9:04 am 104
Do people know this? I certainly didn't
"That’s according to the Canada Revenue Agency, which pointed out that the end purchaser of these flipped properties could be held liable if the capital gains taxes aren’t paid."
"Alban Wang, a realtor for Amex Sunrich Realty, said it’s not his responsibility to tell the final buyer that he or she could be on the hook for paying the capital gains tax should the middle-man default.
"Under section 116 of the Income Tax Act, when a non-resident disposes of taxable Canadian property, the purchaser “is required to withhold 25 per cent of the purchase price…until such time as a certificate of compliance is obtained by the non-resident vendor.”
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February 22nd, 2011 at 9:07 am 105
@97 Troll: No, disingenuous low life parasite, the wildly inflated flow of liquidity into the real estate market came to an abrupt halt due to factors you might have have seen mentioned in the papers on your way to the comics. Your stack of question begging straw men demonstrates, once again, you're not even bright enough to be an entertaining troll.
Read a book jackass, and this time try to absorb more than the pictures.
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February 22nd, 2011 at 9:25 am 106
@fixie guy: See, you can't even come up with anything other than hate. No semblence of even trying to get your head around new facts. If in your mind the US market crash was triggered by factors other than affordability, that people just decided one day that RE was too expensive, by all means keep being delusional. BTW, are you going to make a sequel Lloyd?
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February 22nd, 2011 at 9:27 am 107
@Troll:
I wasn't talking about buying a single tech stock, jackass, I was talking about all of them collectively. You're so fixated on RE that you can't understand the difference in granularity between something costing $50 and something costing $500K.
The total return of the NASDAQ 100, since inception, has been 29% annually. And yes if you bought during the dot-com bubble you'd still be behind.
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February 22nd, 2011 at 9:29 am 108
@Yalie:
Apples and Oranges. Don't mix up buying with leverage with buying all cash, we're talking about the value of the underlying asset. Of course you can lose money on both assets. But my main point remains, a tech stock is intrinsically magnitudes more risky than RE.
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February 22nd, 2011 at 9:30 am 109
Man, some of you duds are like a dog with a bone. If only 4 percent of the population is buying why can it not just be a game for the upper income people – for now. Prices can really get stretched out when your at the high stakes poker table. Eventually the game is over and then its back to the two dollar tables. But right now, Vancouver real estate is in the semi-finals.
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February 22nd, 2011 at 9:36 am 110
February 2011 month-end projections
Days elapsed so far 16
Days remaining 4
5 Day Moving Average: Sales 178
5 Day Moving Average: Listings 285
SALES
Sales so far 2497
Projection for rest of month (using 5day MA) 710
Projected month end total 3207 +/- 152
NEW LISTINGS
Listings so far 4586
Projection for rest of month (using 5day MA) 1139
Projected month end total 5725 +/- 38
Sell-list so far 54.4%
Projected month-end sell-list 56.0%
MONTHS OF INVENTORY
Inventory as of February 22, 2011 12556
MoI at this sales pace 3.91
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February 22nd, 2011 at 9:39 am 111
Wouldn't Vancouver's rental stock be dramatically affected by a quake? Wouldn't real rents actually go up?
Wouldn't insurance be the saviour of those who bought a shoe box when the big one does finally hit? I mean, ICBC saved my ass when my car got rear ended. Forget finding a buyer/realtor. Insurance claim and voila no more condo headaches.
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February 22nd, 2011 at 9:43 am 112
http://chinaworker.info/en/content/news/1332/
What a mess
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February 22nd, 2011 at 9:45 am 113
@whydoItry: Oh yeah, only rich people buy Vancouver real estate. Come on, this is even dumber than the wealthy Asian hypothesis. Stop trying to come up with stupid excuses and fall guys. There's only one thing responsible for this bubble: cheap and easy money.
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February 22nd, 2011 at 9:48 am 114
@Troll: "if current rates and incomes are supporting current prices"
Actually we don't even know that. If it turns out people have been borrowing or drawing down their savings to sustain their spending habits (including mortgage payments) then it's not sustainable even with current income levels and mortgage rates.
BC has both negative savings rates and increased debt to income ratios. Not looking good…
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February 22nd, 2011 at 9:54 am 115
@Troll: "With tech stocks you have a significant risk that that they go to zero because the company goes under. That risk doesn’t exist for most real estate"
RE is pretty boring and frankly not that complicated to own, which is why its returns are typically lower than other risky investments. Stocks OTOH are a proxy for actual innovation and — lo — they return significantly better than RE in the long run on a total return basis. The fact people think it should be the opposite shows how crazy this bubble has become.
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February 22nd, 2011 at 10:01 am 116
#106 Troll Says: "If in your mind the US market crash was triggered by factors other than affordability…"
Lol. "The US became unaffordable", implying Vancouver affordability is A-OK. Now which VCI dimwit keeps arguing that? Your thoughts Dave?
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February 22nd, 2011 at 10:04 am 117
@Keeping An Eye On The Pimps:
HK ppls is in a way better position than colonial era and those complains are made by a bunch of western educated traitors who betray their motherland and fall into the trap of American back western media like CNN,CBC and BBC etc…
Once China finish American Imperialism,Chinese will turn their wrath to punish those inciters.Canada should join the future China dominated New World Order or the Nation will price out from the New World Order.Luckily Vancouver RE is under such Chinese blessing.
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February 22nd, 2011 at 10:10 am 118
@Extremely rich Van house owner.: you sound like hank's Asian neighbour from king of the hill
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February 22nd, 2011 at 10:15 am 119
Hmm…just viwed 3 more price reductions in Coquitlam on my VOW.
It's closing in.
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February 22nd, 2011 at 10:16 am 120
"@Extremely rich Van house owner.: you sound like hank’s Asian neighbour from king of the hill…"
Actually, he sounds like an idiot. Just ignore him.
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February 22nd, 2011 at 10:21 am 121
@DaMann:
As I was watching the video coming in from Christchurch, I started imagining the kind of damage that a severe earthquake in Vancouver could cause. I live in one of those towers of which you make mention so it's not only a thought experiment. But in the end, I've decided to take some necessary precautions and not fret about things over which I have no control. The "big one" could hit tomorrow or our a hundred years from now. It's all in Allah's hands.
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February 22nd, 2011 at 10:53 am 122
@oneangryslav2:
"I live in one of those towers of which you make mention so it’s not only a thought experiment."
I'd rather live in a new tower than an old house or apartment block during an earthquake any day of the week.
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February 22nd, 2011 at 11:10 am 123
^ I heard that wood frame buildings are very stable during an earth quake. I'd expect a two story wood frame house to be structure to be in during an earth quake. Have you heard different?
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February 22nd, 2011 at 11:42 am 124
Troll:
It is easy to compare a past bubble that has burst to a current bubble that has not. How did everyone feel about tech stocks in 1999? A bubble is a bubble. You are just looking at them from different points in the cycle.
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February 22nd, 2011 at 11:51 am 125
@XXX:
Yes we recall your ownership intangibles like kids walking to school or the ability to borrowing neighbors tools. There are so many you had to make them up.
You don't seem to be your usual chipper self today. What happened did your wife leave you for a renter who isn't forced to live in a tear down rat infested Dunbar dump?
There is only one intangible or advantage to owning. It is cheaper than renting. That intangible or advantage does not exist in Vancouver.
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February 22nd, 2011 at 12:04 pm 126
#100 – Good post. If you can't afford who can? Who is supporting this market? I know people making $250K but can't buy here b/c the places they want are 2.5 – 3,0 mil and we all know that is not asking too much. Those are places on the West side with a yard. Places any where else in the world would be in reach.
Another day another net 80. Ho hum.
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February 22nd, 2011 at 12:06 pm 127
Could you pls stop this earthquake thing, it wont bring RE prices down and it aint gonna happen in our lifetime most probably. It reeks of bear desperation only.
We know RE is extremely expensive here, and dont clearly understand why prices arent coming down and why sales are so strong.
If you have smth useful to bring to this debate, please do so, but take your earthquake bullshit on some other armagedon or maya2012 blog.
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February 22nd, 2011 at 12:24 pm 128
My company just laid off 80 well paid people. On average 75-80k a year jobs. Some with kids, condos, even houses. Some just bought recently.
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February 22nd, 2011 at 12:28 pm 129
4444444444::::Extremely rich Van house owner::::4444444444444444
4444 "curse now set for Extremely rich Van house ower" 4444
44444444444444444444444444444444444444444444444444444444444444444444444444444444444444444444444444444444444444444444444444444444444444444444444444444444444444444444444444444444444444444444444444444444444444444444444444444444444444444444444444444444444444444444 4444
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February 22nd, 2011 at 12:56 pm 130
My company just laid off 80 well paid people. On average 75-80k a year jobs. Some with kids, condos, even houses. Some just bought recently.
******
Field? Sector? Company?
Little more info please
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February 22nd, 2011 at 1:04 pm 131
@4SlicesofCheese:
Would you mind me asking which industry you're in?
Thanks.
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February 22nd, 2011 at 1:10 pm 132
Extremely rich Asian house owner is a laundramat owner on Main Street. Ignore him.
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February 22nd, 2011 at 1:18 pm 133
@Junius, "Extremely rich Asian house owner is a laundramat owner on Main Street. Ignore him."
Hey, I know that guy! But he really isn't the owner; he just likes to act like he owns the place. He has arguments with himself sometimes, which is … well … kind of weird.
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February 22nd, 2011 at 2:05 pm 134
Huge sales, MOI under 4 and bond yields heading WAY down. Looks like the bond market will take care of any effect of 35->30.
What a day to be Vanrod.
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February 22nd, 2011 at 2:26 pm 135
Off topic, but I loved the headline at Al Jazeera's English site:
US economics: One big Ponzi scheme.
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February 22nd, 2011 at 2:29 pm 136
@paradox, "Could you pls stop this earthquake thing, … it aint gonna happen in our lifetime most probably."
My wife is a geologist. If she bothered to read your comment, she would say you're hiding your head in the sand.
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February 22nd, 2011 at 2:47 pm 137
@ 139
I bet it has to do with an industry that is being hammered in Vancouver. Would this company happen to have anything to do with True Crimes HK?
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February 22nd, 2011 at 2:47 pm 138
i mean @ 130
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February 22nd, 2011 at 3:12 pm 139
city of Richmond official website:
http://www.richmond.ca/safety/prepare/howto/durin…
Earthquakes Are a Reality for Our Area
Drop Cover & Hold
Imagine that you hear a low, rumbling, roaring sound. The noise builds, getting louder and louder, for about ten seconds. Then WHAM! Theres a terrific jolt. You feel like someone suddenly slammed on the brakes in the car, or like a truck just rammed into the side of a building.
The floor seems to be moving beneath you. It's hard to stand up, or even stay in your seat. When you walk, it's like trying to walk on a trampoline or a waterbed. You need to DROP, COVER & HOLD.
…
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February 22nd, 2011 at 3:46 pm 140
Life must suck if that is a highlight for you.
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February 22nd, 2011 at 11:31 pm 141
@Keeping An Eye On The Pimps:
"What a mess"
Did you read that thing to the end? Does that strike as a reliable source of information?
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February 22nd, 2011 at 11:49 pm 142
Game development, Tech Sector, 137 guessed it.
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February 23rd, 2011 at 1:12 am 143
@patriotz:
I understand you think Van RE is over-priced and I agree with that, no need to get nasty about it. It's just a poor example to take her fairly sensible general statements about moderate amounts of mortgage debt (keeping it below 50% and presumably not buying an OV condo), and compare them to buying a few tech stocks on margin. There's too many differences to make any kind of useful comparison and it doesn't make a very compelling argument. It should be obvious that if your cost of ownership is higher than comparable rents then it's not a strictly speaking not a good investment. In addition, looking at capital gains, if you buy RE at a peak it may take many many years to realize a capital gain. For example if you bought in Van at the peak in '81 you'd have to wait until at least the '90s to see a capital gain.
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February 23rd, 2011 at 1:31 am 144
@paradox:
Earthquake bullshit? It's that attitude that's going to leave us all screwed when it hits.
What preparations have you made? Would you be able to sustain you and your family for 72 hours+, injuries and all? It's easy to ignore until you're burning the back deck for heat and chasing down rats for food. Good luck with that.
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February 23rd, 2011 at 1:35 am 145
@Renting: Watch that bond yield fall! WATCH IT!
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February 23rd, 2011 at 1:36 am 146
@Anonymous: #139
That City of Richmond earthquake page didn't say what to do if you're at an open house or in a pre-sale line up when a quake hits.
Otherwise it's a pretty good list.
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February 23rd, 2011 at 1:46 am 147
@Vanrod:
The way things are going, bears will have to wait until at least 2012 for the crash to begin. At least they'll have their reason for no crash after March 18th. Want to make sure they sleep well at night.
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February 23rd, 2011 at 1:47 am 148
That City of Richmond earthquake page didn’t say what to do if you’re at an open house or in a pre-sale line up when a quake hits.
Otherwise it’s a pretty good list.
*******
It doesn't matter what the site says. What PEP, the Provincial Emergency Program, plans on is the destruction of Richmond. Sorry, that is the reality when you knowingly live on marsh land below sea level.
With one nice quake, the majority of our "asian offshore buying" problem would be taken care of. If the big one hit, I honestly don't think that BC would miss this self-segregated community that has become a haven for corrupt chinese officials, grow-op operators, and those that wish to dump their dependents on the social welfare systems while keeping their tax dollars in HK and China.
Hell, if the quake doesn't come, just wait till sea levels rise a smidgen from climate change in 25 years. Problem solved.
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February 23rd, 2011 at 2:00 am 149
@Troll:
Silly bulls, do you really think rates falling is a good thing? It might keep those people with a million dollar crack shack from foreclosing but it won't keep prices from falling (see Japan, USA, Britain, Spain, …). Rates are falling because dooms day predications are starting to float around about arab revolt and oil shocks which history shows is a VERY BAD thing for our economies. Good luck getting more buyers under those circumstances.
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February 23rd, 2011 at 2:02 am 150
@Planner
I honestly don’t think that BC would miss this self-segregated community that has become a haven for corrupt chinese officials, grow-op operators, and those that wish to dump their dependents on the social welfare systems while keeping their tax dollars in HK and China
If this is the problem you say it is, then be sure to remember it next time you visit the polling booth….
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February 23rd, 2011 at 2:19 am 151
@Planner
I honestly don’t think that BC would miss this self-segregated community that has become a haven for corrupt chinese officials, grow-op operators, and those that wish to dump their dependents on the social welfare systems while keeping their tax dollars in HK and China
If this is the problem you say it is, then be sure to remember it next time you visit the polling booth….
****
Sorry, but Richmond is a "haven" whose problems fall under local, provincial, and federal jurisdictions. Good luck having a consistent approach by "voting" at the polls.
We are talking about the local government assisting the Province in tackling grow-operators, the Province and feds taking a stronger position on crime, the feds increasing RCMP resources for Richmond, and the feds changing tax laws and immigration policies.
There is a greater chance of an earthquake happening than having all orders of government approach the problem in a unified and consistent approach.
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February 23rd, 2011 at 2:39 am 152
We tenants have rights. Who will protect you as a condo owner?
http://www.cbc.ca/news/canada/british-columbia/st…
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February 23rd, 2011 at 3:02 am 153
So, if my fear comes true and the big one hits before the bubble bursting. Bears get bailed out from insurance correct?
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February 23rd, 2011 at 3:26 am 154
@Anonymous: HAHA thats what so funny about the opinions on this blog. Rates are rising..watch out RE is done. Rates are falling…watch out the world is ending. Sales volume goes down…the crash is starting. Sales volume goes up…."classic" bubble top.
Its just a 5 year cycle of contradictions, and throwing out the same dis-proven analysis over and over and over..
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February 23rd, 2011 at 3:53 am 155
@Vanrod:
The world economies were brought to their knees and that's why rates are at their current levels (it's a fact, not some kind of bear hype), or perhaps you've already forgetten the 20%, 6 month correction that happened. The causation is correct, poor economy = low rates.
If you don't believe that rising rates would kill this bubble, you're an idiot plain and simple. A return to historic norms like 7% would send listings through the roof while drying up sales.
Bulls aren't any better by the way:
Rates are rising: get in now, it's your last chance, buy now or be priced out forever!
Rates are falling: there's never been a better time to get a mortgage, buy now or you'll regret not taking advantage of these once in a lifetime rates.
Keep drinking the kool-aid buddy.
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February 23rd, 2011 at 3:56 am 156
@Vanrod:
Its just a 5 year cycle of contradictions, and throwing out the same dis-proven analysis over and over and over..
I don't get it what are you trying to do here? You sound like some mental pervert who is frequenting this site to get a daily dose of "different opinion" and then starts complaining about it. It's sick man, get a life.
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February 23rd, 2011 at 4:06 am 157
@Patiently Waiting:
"We tenants have rights. Who will protect you as a condo owner?"
The landlord owns the whole building. There aren't any owners in it.
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February 23rd, 2011 at 4:15 am 158
@Anonymous:
I know Garth is firing up his doomsday meter again today, but you need to step back and look a little more closely. Current falling rates are bullish for RE, especially when they are caused by 'flight to safety' like last year's Euro 'crisis' or today's fear of Arab revolt contagion. It's caused by fear, but doesn't really have significant immediate impact on our local economy. Libya's oil going offline is not going to cause a supply shortage. Now, as I said yesterday, if these events cause a wider supply disruption and oil stays high even in the face of a slowing economy and reduced demand then we run the risk of stagflation which would be very very bad. High inflation and slow economy. Then we've got serious rate hikes coming and RE would be crushed. That is not happening short term and may not happen longer term, so YES lower rates are good for RE.
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February 23rd, 2011 at 4:18 am 159
Remember Bears, GARTH IS FOR ENTERTAINMENT PURPOSES ONLY.
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February 23rd, 2011 at 4:28 am 160
@Anonymous:
"A return to historic norms like 7% would send listings through the roof while drying up sales."
I think we're a long time away from historic norms. But it works both ways, doesn't it? If rates increase then prices decrease, if rates stay low then "look at Japan" and prices still decrease.
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February 23rd, 2011 at 4:31 am 161
@Troll:
That argument only works until real estate isn't safe anymore, just ask an American.
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February 23rd, 2011 at 4:43 am 162
I don't get it. Looks like some units are only discounted 5%.
You would think with OV sales going nuts, why would presale buyers
try to get out of their contract and risk getting sued.
After all, it's only a minor price adjustment!
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February 23rd, 2011 at 4:47 am 163
#143 Troll Says:"For example if you bought in Van at the peak in ’81 you’d have to wait until at least the ’90s to see a capital gain."
Nice try, is there anything you don't get wrong? 2005, Chuckles:
http://cuer.sauder.ubc.ca/cma/data/ResidentialRea…
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February 23rd, 2011 at 5:03 am 164
I'll be damned, I just saw a house on the east side sell for $1 over asking.
Where the hell do people get all this extra money from?
Anyway, carry on worthless cheerleaders – see you March 19th.
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February 23rd, 2011 at 5:13 am 165
How do home owners like $100 oil? How does it fit with their huge mortgage payments?
Now how does renting for 1/3 the cost of owning sound?
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February 23rd, 2011 at 5:38 am 166
Wow looks like I hit a nerve. But alas I do agree with the sentiment, it is kinda lame to watch real estate numbers and mortgage rates on a daily basis. Glad I am the only one here who does that.
With that said this will be it for me on VCI. Good luck to all, and I sincerely hope your pot of gold is at the end of the next rainbow.
Don't worry, I won't let the door hit my ass on the way out.
Vanrod
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February 23rd, 2011 at 5:44 am 167
speaking of oil. i bought today at $96. will see in next few days if speculation on further unrest in Lybia is profitable.
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February 23rd, 2011 at 6:10 am 168
Interesting, though the question is how different it is really from other developments in terms of legal recourse in case of problems.
1.
Condo buyers beware
Tue, 22 Feb, 2011 8:47 PM EST – CBC.ca 2:59 | 2,646 views
A lawyer warns that it is unclear who would be on the hook for any problems at the former Olympic Village, the CBC's Eric Rankin reports
http://ca.news.yahoo.com/video/canews-22424922/co…
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February 23rd, 2011 at 6:19 am 169
Good post, however, some of the comments are quite interesting as well.
That is all that I am going to say.
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February 23rd, 2011 at 6:22 am 170
Over and over again I hear. When interest rates go up, prices will fall. Has anyone on this blog, plotted interest rates and prices? I'd be curious to see it there is a direct relationship between the two?
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February 23rd, 2011 at 6:24 am 171
@fixie guy:
Oh boy, here we go mixing up real and nominal again. Back to the textbooks Lloyd. We're talking about nominal gains here dog groomer. The original poster was comparing RE to tech stocks and other investments which are generally talked about in nominal terms. Nice try though, chortle chortle.
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February 23rd, 2011 at 6:53 am 172
@whydoItry:
Spam blocker won't let me post more than one link per post so, here is a chart of vancouver housing:
http://www.yattermatters.com/2011/02/vancouver-av…
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February 23rd, 2011 at 6:57 am 173
I wonder if the marketer has pulled Hong Kong style hype and dump on the OV.
In Hong Kong they’re star crazed, and so what the slime ball marketers do is they get a local celebrity to buy a condo so that they can get momentum.
The local celebrity buys at a high price, giving the project prestige, and at the same time setting a price range.
Naturally the celebrity is guaranteed a price the developer or a developer’s friend will buy it back so that the celebrity is guaranteed a nice profit for just using his or her name.
I’m not suggesting the pimps have used the celebrity card, but I wonder who has actually bought and how many units have been bought by the same person or company or affiliates to get momentum?
Disclaimer:
Just wondering, no proof, just speculation.
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February 23rd, 2011 at 7:16 am 174
@171 Troll Says: "The original poster was comparing RE to tech stocks and other investments…"
Sorry 'bout that, when you wrote '81 buyers saw capital gains by the mid-'90's I mistook it to mean '81 buyers really saw capital gains by the mid-'90's. Sorry for besmirching that virginal reputation for honest debate.
Best we not bring leverage into the picture then.
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February 23rd, 2011 at 7:32 am 175
@4SlicesofCheese: I didn't realize the layoffs topped 80 people, I thought it was less than that. Hmm strange that few companies other than RE related that would in reality boost our economy want anything to do with the "most livable place on earth".
@ Oneangryslav2, Anonymous: If you're curious, yes spot on – the gaming tech industry continues to dwindle. Latest victim: United Front Games located in Yaletown, makers of award winning Modnation Racers but closed down before True Crimes HK was released. I remember at this exact time last year Radical Entertainment had a substantial layoff as well – 90+ people. Good ol' Activision.
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February 23rd, 2011 at 7:47 am 176
@Keeping An Eye On The Pimps:
With Rennie's pumping of the 31 sales to insiders, you'll notice in the detail of some of the news articles that they weren't actual sales.
The insiders were allowed to "make offers" on the units, and he's commented that the sales aren't final yet, because they have to be accepted by the receiver (Ernst & Young).
In other words, the offers are below the new pricing, and E&Y has no obligation to accept those offers. So if I were an insider, I could have made a lowball offer on an awesome unit, knowing that if my offer was accepted, it's far enough below market value that even if accepted, I could flip for immediate profit. Who, given the opportunity, wouldn't make such a lowball can't-lose type of offer? (aside from the obvious ethical question of knowing that your lowball insider-offer would be used out-of-context to pump the development).
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February 23rd, 2011 at 8:01 am 177
@M-:
"(aside from the obvious ethical question of knowing that your lowball insider-offer would be used out-of-context to pump the development)."
For some inexplicable reason I just can't imagine any low life, scum bag, RE Pumping Flipping sons of bitches, lose any sleep over the ethical concern.
They would have to have a conscience.
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February 23rd, 2011 at 8:12 am 178
@Supersogs
Not closed down just "eliminated redundancies".
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February 23rd, 2011 at 8:28 am 179
"So if I were an insider, I could have made a lowball offer on an awesome unit, knowing that if my offer was accepted, it’s far enough below market value that even if accepted, I could flip for immediate profit."
If you make a bid on a publicly listed property and nobody outbids you, and your bid is accepted, it IS market value, by definition.
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February 23rd, 2011 at 8:54 am 180
Rennie has a discussion with protestors:
http://www.theprovince.com/videos/index.html?v=18…
He may not NEED to work, but he has a lot at stake in this marketing campaign.
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February 23rd, 2011 at 9:01 am 181
@Keeping An Eye On The Pimps:
Well, the news that 30 units sold before the public sales opened leaked out, uh yeah sure, about which Rennie was conveniently up in arms about, uh yeah sure. I think those sales, or whatever they were, were purposely leaked in order to confirm there is "insider" interest at these prices, and of course people want what other people are buying, especially if they're in the know. Marketing 101.
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February 23rd, 2011 at 9:19 am 182
@patriotz:
"If you make a bid on a publicly listed property and nobody outbids you, and your bid is accepted, it IS market value, by definition."
Theoretically, yes. But not always. If you were to list a house on eBay alone, for example, then you're restricting yourself to that sub-section of the market. So whilst the listing is public, you cannot really claim that the resulting sale price is a fair reflection of the market as a whole because not all potential buyers were participants.
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February 23rd, 2011 at 9:24 am 183
Huge day for bears today:
Listings: 486
Sold:42
At this rate, the crash might be here by the spring.
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February 23rd, 2011 at 9:27 am 184
@paradox: Are you sure the numbers aren't 444 listings and 44 sold? These aren't real numbers, are they? I'll wait for paulb to confirm.
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February 23rd, 2011 at 9:35 am 185
#184 oneangryslav2 Says: "These aren’t real numbers, are they?"
If they are it explains why Vanrod left in a hurry.
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February 23rd, 2011 at 10:06 am 186
New Listings 255
Price Changes 91
Sold Listings 172
12621
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February 23rd, 2011 at 10:23 am 187
"If you were to list a house on eBay alone, for example, then you’re restricting yourself to that sub-section of the market. "
By "publicly listed" I mean listing in a medium which is normally used by buyers and sellers of that item, who comprise the market.
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February 23rd, 2011 at 10:25 am 188
Hey Meth man….
How many OV condos did you buy ?
Saw that hot chick limo driver you have hubba hubba HUBBA (sezs bubba).
If you want to bail…..tell em that the toilet water isn't actually potable drinkable water(when you and Bob Rennie are on a binge)…..its rainwater that lord knows how many fauna have crapped in before YOU and Boobie get to crap in it.
Ugghhh!
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February 23rd, 2011 at 10:30 am 189
Doesn't Boobie Rennie HAVE to sell the OV condos like indentured servitude ?
Isn't he in line with the other OV creditors ?
He's there to sell his BRAND name( = soul )so he can get what's coming to him (multiple puns intended).
aka if Boobie not workee on sellee condoMs…Boobie not get payee to fundee art collection….broody herr !!!!
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February 23rd, 2011 at 10:35 am 190
173 Keeping An Eye On The Pimps Says:
February 23rd, 2011 at 2:57 pm
I wonder if the marketer has pulled Hong Kong style hype and dump on the OV.
In Hong Kong they’re star crazed, and so what the slime ball marketers do is they get a local celebrity to buy a condo so that they can get momentum
=================================
Local celebrities?
Hmmmm
Oh yeah
Pamela Anderson
PeeWee Herman
Robert (YVR) Dzienaski
Robert Pickton
Gordon (Soupy) Campbell
Warren Betanko
Where do I sign…???
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February 23rd, 2011 at 10:37 am 191
February 2011 month-end projections
Days elapsed so far 17
Days remaining 3
5 Day Moving Average: Sales 168
5 Day Moving Average: Listings 278
SALES
Sales so far 2669
Projection for rest of month (using 5day MA) 505
Projected month end total 3174 +/- 94
NEW LISTINGS
Listings so far 4841
Projection for rest of month (using 5day MA) 835
Projected month end total 5676 +/- 47
Sell-list so far 55.1%
Projected month-end sell-list 55.9%
MONTHS OF INVENTORY
Inventory as of February 23, 2011 12621
MoI at this sales pace 3.98
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February 23rd, 2011 at 10:48 am 192
Watch how many more developers try to sell their condo projects before Ides of March, when the NEW financing rules come into play.
I'll bet that developers that haven't got their zoning approval by the end of March will claw back big time.
Boobie Rennie has timed his OV sale to lure suckers in…that's obvious.
I think Boobie is like a Phoenix….the " phyrric plunge" looonngggg overdue.
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February 23rd, 2011 at 10:59 am 193
@dire straits:
I think it will be.
The situation in Libya is very uncertain at present and it looks to be a more drawn out situation than the one in Egypt. The fact that the Saudis feel the need to bribe their people to the tune of $36 billion speaks volumes as well. Iran has warships hovering around Libya. Mix it all together and you have a potential clusterfuck situation for oil.
There also isn't a lot of excess supply in the World that can be tapped in the short term. The Saudis claim they can ramp production up, but they have never shown it.
Markets hate uncertainty so up we go.
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February 23rd, 2011 at 11:10 am 194
@M-: "they weren’t actual sales."
Yeah I don't think that went unnoticed by many. I'll let that one slide (if it's true). As a taxpayer who has to pay off public debt, just this once I'll let the ends justify the means. Am I a bad person for having ruthless self-interest? I guess so…
Frankly all these S&M tricks are old hat. If people fall for them, that's their problem. If they were smart enough to religiously read VCI's and other cogent real estate blogs' comments, they'd be well aware of many of the various scams propagated by condo hucksters. To all commenters here who have offered insight into this over the years, thank-you.
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February 23rd, 2011 at 11:13 am 195
@VHB:
For listings we're going to blow away the best ever February by a mile.
Looks like we'll slightly surpass the best ever February for sales as well.
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February 23rd, 2011 at 11:14 am 196
@Dave: Libya is only about 2% of the world's oil production. The spike we're seeing is likely a short term effect as the supply chain reorganizes to compensate, assuming there is a longer-term disruption, as well as risk of political unrest propagating to other middle eastern countries. Political unrest there seems strangely correlated. (Note the king of Saudi Arabia making announcements of new and popular social service spending. Coincidental timing…)
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February 23rd, 2011 at 11:43 am 197
@Dave:
>>>Iran has warships hovering around Libya.<<<
They actually went to Syria, Dave.
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February 23rd, 2011 at 11:44 am 198
Dave,
I have exactly the same thoughts.
as of now oil in asia is trading around $99 so it went up since closing in NY.
Also, Opec’s spare capacity was of lower quality than Libyan crude. Hard to replace Lybian light crude. BTW I also do not believe that Saudis have any spare capacity. Their talk about making difference is just confidence game.
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February 23rd, 2011 at 11:48 am 199
@jesse:
Only 2%? That is huge for oil supply because oil is a relatively inelastic good. There isn't much surplus production available to make up for it in the short term. I bet we see $120/barrel before the summer.
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February 23rd, 2011 at 11:55 am 200
@dire straits:
Ya, I think the Saudis are bluffing on their production ability.
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February 23rd, 2011 at 12:04 pm 201
I read an article today with an interview with someone in the US , can't remember his name ( it was on Bloomberg) but he works in the oil industry. He commented that the oil reserves and gas reserves in the US are at a 10 year high, yes 10 year high. N America is awash in oil right now. Refineries are running at 81% which is the break even point. Essentially he was saying supply is fine, beyond fine ( for now) it's pure panic and speculation. There is no reason for a price surge what so ever.
If a Saudi farts, then oil goes up. It's ridiculous really. I wouldn't count on $120 oil unless shit hits the fan over there but I don't think it will get much worse but who knows.
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February 23rd, 2011 at 12:07 pm 202
@Dave:
"Only 2%? That is huge for oil supply because oil is a relatively inelastic good."
Dave, are you absolutely sure you understand inelasticity?
Are you sure oil is inelastic?
or is this another one of your versions of economic theory?
Also, are you related to this guy?
http://forums.castanet.net/viewtopic.php?f=50&…
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February 23rd, 2011 at 12:29 pm 203
@Keeping An Eye On The Pimps:
Or this guy:
http://cincinnati.com/blogs/politics/files/2011/0…
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February 23rd, 2011 at 12:31 pm 204
B.C. has Chinese Lotto
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February 23rd, 2011 at 12:34 pm 205
@DaMann:
Natural gas and oil are two different beasts and the overlap is much smaller than most would assume. They are not substitutes in the short or medium run.
Lots of natural gas in North America. US oil production peaked 20 to 30 years ago and they will never get those numbers back. Canada will still increase production and I believe Alberta can pump out another 2 mbpd within five to ten years.
World oil production hasn't gotten past 85 mbpd for the last 3 to 4 years. That's the longest period of time for which production was stagnant for like a century. That should be enough to make you consider that maybe we near peak production. I personally don't think we are at the peak yet, but in the short run, I don't think we are going to break 85 mbpd. Maybe in 5 years though.
Lots of demand is chasing those limited number of barrels.
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February 23rd, 2011 at 1:05 pm 206
@Keeping An Eye On The Pimps:
Sigh… Yes I am sure. Pretty basic stuff. It only takes a small shift in supply either way to have major pricing impacts. Trust me on this.
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February 23rd, 2011 at 1:17 pm 207
@Dave: "That is huge for oil supply because oil is a relatively inelastic good"
Ummm no not really. There are more than a few reserves on standby that are profitable at $120/barrel.
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February 23rd, 2011 at 1:30 pm 208
@jesse:
They aren't accessible in the short run. It takes times to bring that online and distribute it.
Look at the years leading up to the price peak in 2008. Production maxed out in 2005 at 85 mbpd and prices kept marching upwards. Where was that $120 / barrel oil production? Please show me on the production graphs.
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February 23rd, 2011 at 1:52 pm 209
@Dave: "Where was that $120 / barrel oil production?"
It's likely as simple as increasing shiftwork, or converting mixed-use wells to oil again. I tend to agree it's not that elastic. $120/barrel oil takes up way too much of GDP and I doubt it's sustainable without causing an economic slowdown. JMHO.
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February 23rd, 2011 at 2:06 pm 210
@jesse:
Yes, I think $120/barrel oil slows the economy before new supply at $120 can come to market. I think the data backs that up.
Oil prices are not good news for the economy. I think the Bull run in the DOW is getting long in the tooth and it will start looking for reasons to correct. This might be it.
Ironically, this might have a positive effect on Vancouver real estate because a slower North American economy means lower interest rates and the Alberta oil money will flow into BC.
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February 23rd, 2011 at 2:22 pm 211
@jesse: The thing with oil too is that there is A LOT of speculation in it now. It's not just based on supply/demand, but also investing and speculation.
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February 23rd, 2011 at 3:56 pm 212
#193 Dave Says: "Markets hate uncertainty so up we go."
That southbound left light to Oak from 12th, you never know about the damn thing. After five PM, sure, almost always an advance arrow. Before that? A crap shoot, depends on the number of cars behind you.
Markets hate any uncertainty, Vancouver RE going up for sure.
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February 23rd, 2011 at 5:35 pm 213
@Dave: "Alberta oil money will flow into BC."
I don't know about all of BC but certain cities, like Kelowna, have claimed to rely on Albertan buyers to snap up properties. What Kelowna needs is another recession to improve its real estate based economy… wait…
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February 23rd, 2011 at 5:42 pm 214
@Devore: "The thing with oil too is that there is A LOT of speculation in it now."
If you mean oil futures then yes for a few months prices can stay high. However that is future product they're trading, which has to be received and stored at some point. If demand were to drop off at $120/barrel like I think would happen, it's just not physically practical to hoard and prices will fall quickly.
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February 23rd, 2011 at 10:45 pm 215
Dave: "Crude's going to $120 guys".
VCI: "You are an idiot".
Reality: The next day crude hits $119.79.
Dave: "LOL, Sorry that I was off by $0.21"
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February 24th, 2011 at 11:44 pm 216
[...] 4SlicesofCheese at vancouvercondo.info 22 Feb 2011 8:24pm, and later – “My company just laid off 80 well paid people. On average 75-80k a year jobs. Some with kids, condos, even houses. Some just bought recently.” … “Game development, Tech Sector.” [...]
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