Silly Math for Speculators

If I had a nickel for every time I had to endure some property investor telling me about how much money they made, I’d have enough to buy a condo in Phoenix. But just for fun I decided to run some numbers on a stereotypical flipper and what conditions s/he would require to make a “profit” on a flip. Before beginning, remember the mindset: opportunity cost stays in the textbook — what is being measured is whether or not the flipper has more money in a year than when he bought. So we can calculate the approximate profit of a flipper, assuming he bought a year ago and sold today. The profit reaped is therefore:

Profit = Sales Price – Purchase Price – Interest – Expenses + Rent – Sales Fees

Sales Price – Purchase Price = Pi*(1+a),  (where Pi is purchase price and a is annual appreciation)

Rent-Expenses = Pi*CR, (where CR is the cap rate (generously about 5%))

Sales fees = Pi*f, (where f is the sales fees from a sale (say about 3%))

Interest = Pi*LTV*i, (where LTV is the loan-to-value ratio and i is the mortgage rate)

It is approximated, for simplicity, the loan is interest-only (which is reasonable with a 35 year am). We sub:

Profit = Pi*(a + CR – f – LTV*i)

To achieve a positive return, a+CR-f-i*LTV > 0; solving for a,

a> LTV*i – CR + f

So we have a required capital appreciation to ensure the flipper makes money on paper, a huge psychological barrier needed to elicit a sale. We can plot appreciation versus LTV for various interest rates, assuming 5% cap rate and 3% closing costs:

So what do the numbers mean? Well at current interest rates of 4%, a flipper requires capital appreciation of 1.3% to ensure he doesn’t lose money. I ran the numbers with a 3% cap rate (typical of some detached dwellings and some condos):

And assuming the flipper keeps the unit vacant:

If the unit is at 3% cap, the 20-1 leveraged flipper requires a 3.8% annual appreciation; when the unit is held vacant, this increases to 7%.

This cursory exercise shows how leverage with low earnings requires continued capital appreciation to stave off a paper loss, a case made clear when analyzing the simple case of a flipper with a 1 year tenure under various scenarios. When interest rates go up, the required capital appreciation increases at a time when we expect increasing costs of capital to weigh heavily on upward price movement. With high leverage, interestingly, it is an absolute necessity to have prices increase, even for those with variable rate mortgages at around 2%.

136 Responses to “Silly Math for Speculators”

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first

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patient renter Says:
2

Only a matter of time until this is the headline in the Globe and Mail:

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Flip Flop Says:
3

I would think an increase in over ask closes indicates that more buyers are cashing in (the ones with significant equity from the runup), and are deciding there's no need to piss around over a few grand.

Set it low, let the market drive it up close to market value and bank your profits. This tends to be what happens at the top of a run-up. No need to be greedy when you've alread doubled your money.

Assuming that number isn't BS anyway.

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Don Lapre Says:
4

Why on the first graph is the Y-intercept <-2%? If cap rate is 5% and closing costs are 3%, at a 0% LTV should it not be -2%?

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Well, Vancouver Sun just shut down the I'm ahead with renting and investing difference into stocks bear arguments for the bears. Vancouver housing has done better than TSX and with leverage means even bigger return.

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actually I think the analysis is far too complicated. Most people don't bother thinking about the selling cost or severely under-estimate it when they buy for a flip so that needs to come down. As well unless it's a pre-sale flip most flippers will either sell right away after completion or rent out for a year and then sell. In the latter case they consider the interest, strata, etc to be paid by the rent and any shortfall is basically principle repayment which is as we all know "forced savings". So really the entire equation/formula for determining gains for a flip for most people is really just:

sell price – purchase price.

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@Don Lapre: I'll rerun the #s and update.

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@space889: It has only outperformed if you're able to sell and capture the gains. Otherwise, all you have is a more expensive house, and possibly more debt through the modern wonder of the HELOC and refinancing.

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@Devore: Oops, premature posting.

Only capital gains count, because (in Vancouver anyways) rents have been largely flat for years, so you're just getting terrible yield if you've invested for income.

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patriotz Says:
10

@Devore:

It has only outperformed if you’re able to sell and capture the gains.

That's true of any asset if you're comparing total returns.

The real point is that if asset X has outperformed other assets on a total return basis that means it's time to sell it, not time to buy.

Duh.

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@Don Lapre: I updated the graphs but the pics in the posts aren't updating. Click on the graphs for the real deal. thx for catching that.

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@space889: "So really the entire equation/formula for determining gains for a flip for most people is really just: sell price – purchase price."

Well then your circle is even more lowbrow than mine! All the people I talk to know full well about closing costs and factor it in.

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space889 Says:
13

@Devore: I don't think most people care about that. They just compare the estimated market price versus their purchase price and any gains is as good as cash in the bank. After all, the banks have been drilling into our head that home equity = cash.

It's true that no gains are really gains until it's cash in your hand but that's really just a very minor detail in most people's mind. For the average people, you have to keep it very simple because critical thinking is hard and far too much work!

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space889 Says:
14

@jesse: The question is how much do they estimate it to be? I know people knows about selling commissions and such, however I believe that most people severely under estimate the actual dollar amount until they actually see the amount on the cheque they write to the realtor. I could be wrong but most people I know have really bad estimation skills.

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Best place on meth Says:
15

Math is hard, way too hard for flippers.

Flippers just wanna' flip.

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Manna from heaven Says:
16

BC's debt to income ratio stands at 160%

How will I ever be able to afford that tear down crack shack on the West Side when I'm competing against overleveraged idiots. Now, before some cheerleader chimes in and says that I should lower my sights, I'd like to add that I'm an accredited investor (more than \$1 million in liquid assets) and routinely make in excess of \$200,000 a year. Please don’t think that I’ve shared that information for the purposes of bragging. My financial situation and my inability to purchase a dump clearly illustrates the absolute absurdity of this market and anyone who wishes to defend it.

Tempted to buy some waterfront on the coast and say the hell with it! I could fish, harvest clams, mussels and oysters, and forage for berries. Doesn't sound too bad.

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Not much of a name.. Says:
17

@jesse: I agree with space. Most people just look at the "profit" in their RE as sale price – purchase price. That's 100% pure profit. All you have to do is follow RET to know that. All other expenses are immaterial to these people. If people truly looked at the numbers, why would they be buying RE in Vancouver right now?

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fixie guy Says:
18

Hot off the press, another view on Canadian returns:

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Shouldnt:

Sales Price – Purchase Price = Pi*(1+a)

Actually be:

Sales Price – Purchase Price = Pi*(a)

As you later stated in:

Profit = Pi*(a + CR – f – LTV*i)

I completely agree with you that most dont see the bigger picture which includes the (CR – f – LTV*i). Those who say "you are throwing your money away on rent" never see the LTV*i and lots of landlords have a hard time keeping CR > 0 regardless if they factor their own time in or not.

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Best place on meth Says:
20

@SD92129:

It actually goes like this:

Phase #1 – collect condos

Phase #2 – ???

Phase #3 – PROFIT!!!

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I think it goes one step further. Most can't get their heads wrapped around the "???", so they just think it is:

Phase #1 – collect condos

Phase #3 – PROFIT!!!

They figure that nothing needs to happen between 1 and 3 and that 3 is pretty much the inevitable outcome of 1. A lot of people are going to learn that they are playing with real money.

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Best place on meth Says:
22

What really stands out from that TD report (other than the obvious insanity of BC'ers having a 160% debt-income ratio and -4.2% savings rate) was that the debt servicing ratio has held fairly steady over the last 10 years.

The thing is that interest rates have dropped by half over that time.

What happens as interest rates rise, and god forbid even go back to where they were in 2001?

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@SD92129: "lots of landlords have a hard time keeping CR > 0 "

Cap rate doesn't include financing. It is simply (rent – expenses)/PurchasePrice. I think it's true that many landlords have negative carrying costs but that's OK in their books if appreciation eventually offsets their current cash outlays.

Imagine what happens when capital appreciation reverses.

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Anonymous Says:
24

OK – Here's some context for my post yesterday. The database is not too friendly so I only did it for detached houses.

% Solds at or above asking – February

2001 7%

2002 17%

2003 16%

2004 23%

2005 16%

2006 27%

2007 21%

2008 22%

2009 7%

2010 29%

Now I hesitate to publish this next number beacause of the grief I got yesterday but here goes:

2011 32% (February Month-to-Date)

The 26% from yesterday was for all property types. And people – it took me over an hour to do this so please don't shoot the messenger.

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@Not much of a name…: "All you have to do is follow RET to know that"

I don't think following RET for a baseline of reality is valid.

All I can state is that people I know who are thinking of SELLING calculate sales costs. I can agree with you that some people BUYING don't care about sales costs, but I was interested in the other side: what required price is required for a flipper to enjoy a no-loss exit?

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@Anonymous: "please don’t shoot the messenger"

So to be clear this is for entire REBGV?

Still, I would expect prices to increase until mid-spring at least notwithstanding the mix of over/under bids. Overlist/underlist doesn't tell us too much, only that Realtors don't have a good handle on the market, or there are very specific areas that are selling very well. If the market were really hot, total sales would be higher.

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Best place on meth Says:
27

>>>The 26% from yesterday was for all property types.<<<

You may have checked all property types but I haven't seen a single condo sell over ask so I'd say that number is pretty much all detached.

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Patiently Waiting Says:
28

@Anonymous: 2005 and 2009 had a very low percent and turned out to be hot markets. Meanwhile in 2008, the year of the mini-crash, it was much higher. Interesting.

Thanks for the stats. Further investigation seems to indicate "% Solds at or above asking – February" doesn't tell us much about the market.

Like or Dislike: 0  0

Patiently Waiting Says:
29

@space889: I'd like to see a similar analysis since 2006 as it would show something much different. Before 2006 I was a raging bull, so this story lacks meaning to me.

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@patriotz:

That’s true of any asset if you’re comparing total returns.

But we all have to live somewhere, as the saying goes. Selling a house you live in is nothing like selling some stock.

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fixie guy Says:
31

@24 Anonymous Says: "OK – Here’s some context for my post yesterday."

Great, if potentially misleading, info. Quite a few posts here and elsewhere noted bid up properties that went to market priced below local comparable sales. Do your numbers measure demand or sales technique, and consistently across the entire time series?

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Anonymous Says:
32

@ Patiently Waiting – Here's the benchmark for detached houses in Greater Vancouver. In Feb 08 prices were still rising. In Feb 09 they were one month from the bottom.

2008-01 742,490

2008-02 761,342

2008-03 764,616

2008-04 771,321

2008-05 771,250

2008-06 765,654

2008-07 753,165

2008-08 737,985

2008-09 726,331

2008-10 695,962

2008-11 666,525

2008-12 648,421

2009-01 659,638

2009-02 653,452

2009-03 649,342

2009-04 675,268

2009-05 680,320

2009-06 701,384

2009-07 711,702

2009-08 732,656

2009-09 741,632

2009-10 749,808

2009-11 757,209

2009-12 766,816

Like or Dislike: 0  0

Good morning bloggers. After scrimping and saving for a downpayment for the past 5 years – we are of the traditional 20pct downpayment 25 year mortgage mentality, only to have house prices run up faster than we could save we have decided to give up on Vancouver. Don't get me wrong the city is wonderful but the cost of living and opportunities are not here for the average or even above average blue/white/grey collar working class.

When we went look at houses every one has mortgage helpers and basement suites. To me that's not right. Single family detached houses turning into tri-plexes and 4-plexes. That is what is driving up house prices. City council should approve more multifamily and higher density house all over the city.

For the past while I been working with a recruitment firm and last night I accepted a job in San Diego. The salary is about 10pct higher with health plan and 2 weeks of paid vacation. We will rent first and then later look to buy a house for around 320k. With the lower living costs, my wife can afford to stay home with the kids. My parents and inlaws will come visit us every few months and will probably stay a few weeks at a time especially in the winter.

Some pundits will say good riddance and maybe that we are complainers and so forth. This is not a pity attention getting post. I do this to say there are options out there. Why take the narrow view to say this is the only nice place to live – the world is a big place. If Vancouver wants to be a rich man playground so be it.

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@SDBound: Good for you! Its funny, my wife and I have been having this exact conversation. I was recently in San Diego for a conference – it was November, and I had some time to stroll around on the beaches in my short sleeves, gorgeous and sunny. When I got home, we pulled up some real estate pages and marveled at what we could buy for <\$400K. She is pregnant, and it sure would be nice if she could stay home with the kids, while I work, and still have more money every month…

Only thing I didn't like about SD was that it is a huge naval base…

Good luck!

Like or Dislike: 0  0

Anonymouse Says:
35

Isn't mortgage interest on an investment property tax-deductible as a "reasonable business expense"? But then any gain in value for a non-primary residence attracts Capital Gains Tax?

Like or Dislike: 0  0

Patiently Waiting Says:
36

@Anonymous: Aren't sales prices a lagging indicator?

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Best place on meth Says:
37

@SDBound:

Congratulations, you're making an excellent move.

I would dump Vancouver in favour of San Diego in a heartbeat if it was feasable.

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@Joshua:

Actually the naval base is an anchor for the local economy. Most of the military drills are out in the ocean if you worried about noise. The prospect of having a small mortgage or no mortgage is very enticing for my family. I am just one of those type that hates debt.

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@Joshua:

So the Marine bases dont bother you? (Pendleton, Miramar)

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Patiently Waiting Says:
40

@SDBound: My wife and I are discussing Ontario. She has lots of family there, and I have many old friends from University who went to TO for their careers. If Ontario continues to grow while BC shrinks, we will go. Its more about our limited job market than housing prices, really.

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patriotz Says:
41

@Devore:

But we all have to live somewhere, as the saying goes. Selling a house you live in is nothing like selling some stock.

That's right. If you're not indifferent between owner-occupancy and renting the unrealized gains from your house are effectively unrealizable, even on an individual basis.

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I would dump Vancouver in favour of San Diego in a heartbeat if it was feasable.

Maybe VCI can start up a collection so you can leave.

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@SDBound:

I think "anchor" is a bit of an overstatement. Just from the top of my head:

High tech: Qualcom, Nokia, Sony, HP, Intuit, Cisco, motorola,

Biotech: Pfizer, J&J, Takeda, Novartis, Amylin, Vertex, Celgene,

Defense: Raytheon, Lockheed,

Universities: UCSD, Scripps, USD, CSSD, SCSM

Hospital Systems: Scripps, UCSD, Kaiser, Sharp, Navy

Tourism: cruise ship port, seaworld, zoo, legoland, animal park

And the first 3 catagories are R&D and production facilities, not regional offices.

One thing they do lack is water. The whole state for that matter.

Why the need to buy? If you need mobility, buying down there maybe an anchor. Of course, having equity will allow you more mobility, but at a cost.

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Best place on meth Says:
44

@Troll:

That in a nutshell is why Vancouverites are so fucking stupid.

You honestly think that if someone doesn't believe this is the best place on earth then there must be something wrong with them. You're so offended that we don't worship the place like the rest of you glue-sniffers.

It's a kool-aide drinking cult here. La la land.

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@SD92129: Not that it means much bug according to Demographia GDP per capita for San Diego is \$46K, Vancouver is \$32K. Maybe San Diego having a significant hi-tech presence has something to do with it.

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Dan in Calgary Says:
46

@BPOM (who was writing to Troll), "You honestly think that if someone doesn’t believe this is the best place on earth then there must be something wrong with them."

I'll go further. If it were correct to say that Vancouver is the best place on Earth, then we would all have to recognize that we have really, really, really f**ked up and destroyed the rest of planet Earth.

So, Troll, why don't you take a vacation and get a new perspective? No, the old KOA (ParkCanada now?) RV park by the Tsawassen ferries doesn't count. You actually have to leave the lower mainland, preferably North America. If you want suggestions, I'm sure your fellow bloggers would be happy to offer suggestions about where you could go.

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Anonymous Says:
47

But wait, we have the best weather, beaches, scenery, rich foreigners buying our limited land which is limited by geographic constraints and the ocean… oh, not Vancouver, I was talking about Florida, or was it San Diego? I can't remember but it won't make a bit of difference here just like it didn't down there.

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@SD92129:

@SDBound:

RE: Rent vs Own in San Diego.

I would definitely recommend renting vs buying for at least a year. After a year you'll have a much better idea if you'll be happy in SD long term, plus you'll have a better idea about which location you prefer.

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@IT__Pro:

and…you'll pay cheaper. Prices will keep going down for many years to come.

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Best place on meth Says:
50

San Diego prices still dropping.

They're 1/2 of what they are in Vancouver.

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@SD92129: didn't you read the last sentence in my post? The marine base bothers me. I understand SDBound's POV regarding it being a driver of the economy, etc… just don't like that much military in my face… I'm sure I could get over it though. I'm also a surfer, and the surfing options down there make me drool…

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@Best place on meth: Hey fucknuts, I didn't say it was the best place on earth. You're the one who said you wanted to leave remember? So either we make it happen by collecting some money so you can realize your dream. Or you can just shut up, quit your fucking whining and just grow up and make do like big boys and girls. Your mindless daily whining and moaning about everything about this city are getting really tiring. Here's a challenge, tell me 3 things you like about Vancouver, see if you can bring yourself to do it.

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CashedOut Says:
53

Word on the street is that UnitedFrontGames has had their largest contract cancelled. Over 170 people at that studio were billed out to that project.

Another sad day for the Vancouver video game industry. I would expect to see significant layoffs in wake of this.

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@Dan in Calgary: WTF is wrong with you bears? BPOM said he wanted to leave, let's all pitch in and make his dream come true. Nothing wrong with that.

By the way, I've done a lot of travelling all over the world, so don't patronize me son. I recognize this city for what it is, a very nice comfortable safe city to live and raise a family, but with real estate prices that are too high. So most sane adults make decisions about what they want from life, make compromises, and then they just get on with it. They don't endlessly whine about everything and everybody here and turn everyone into a caricature of a bull realtor. That's just a sign of mental illness.

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@Anonymous: Thank you for posting that. The only reason people were 'shooting' you was because they didn't know if you were credible or trolling with fake numbers. Please pick a name (it can be Fred or whatever) other than anonymous. Then you can build your credibility and people will vote you up to paulb levels if you keep posting numbers.

We are number hungry here. We are number whores. Feed us, please!

Like or Dislike: 0  0

Best place on meth Says:
56

@Troll:

>>>Here’s a challenge, tell me 3 things you like about Vancouver, see if you can bring yourself to do it.<<<

No, I don't perform on command for angry, worthless trolls.

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@Best place on meth: But I'm serious, how do we help you to realize your dream of leaving Vancouver? I'd like to help. Really. The city will be a better place for it.

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In all fairness, the "best place on Earth" thing is meant to apply to all of BC, not just Vancouver. And for me it really is (other than Vancouver, ironically), given my outdoor sports avocations.

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@SDBound: Sounds Amazing from your description. You may have forgot to mention having to take your young family to a state/city that has a real bad crime, and gun problem. A state and municipal gov't that is essentially bankrupt. Cops in your new community are being cut on a monthly basis. The whole social safety net in that community is declining rapidly.

Just saying, you get what you pay for in life. No way around that one unfortunately.

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fixie guy Says:
60

#56 Best place on meth Says: "No, I don't perform on command for angry, worthless trolls."

There's a roving gaggle of biotches infesting local forums who live for the reaction: here, RET, the now-dead Discover Vancouver, and a few others. Horton, Instigator, Semven, the names appear again and again and the drama always the same. They can make this place feel like a town with two surnames.

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Just Love Vancouver Says:
61

>>>Here’s a challenge, tell me 3 things you like about Vancouver, see if you can bring yourself to do it.<<<

Ooh…I can do that…

1. The feeling of safety I get knowing that we have some of the highest property crime and gang violence rates in North America. I take comfort in the fact I get to put bars in my windows and have the same opportunity to be shot in high end restaurants like Quattra as other law abiding gangsters.

2. The pride I get from knowing that we don't actually need engines of productivity and wealth generation here to sustain our high standard of living, such as those pesky manufacturing, finance, or biotech industries. Hey, hemp used to be a staple of economies for decades, so what is a little illicit weed production and distribution if it funds my latte sipping, Louis Vutton bag buying, McMansion living

3. The sense of community and inclusivity I get walking around self segregated ethnic enclaves. I love the looks of "what are YOU doing here" from residents who gladly eschew the values and languages of the country that they supposedly wanted to become a part of.

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Anonymouse Says:
62

"Word on the street is that UnitedFrontGames has had their largest contract cancelled. "

There's an announcement on their website.

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Just Love Vancouver Says:
63

@SDBound: Sounds Amazing from your description. You may have forgot to mention having to take your young family to a state/city that has a real bad crime, and gun problem. A state and municipal gov’t that is essentially bankrupt. Cops in your new community are being cut on a monthly basis. The whole social safety net in that community is declining rapidly.

Just saying, you get what you pay for in life. No way around that one unfortunately.

**********

Or, you could pay a million dollars to live in this wonderful place where: we have zero property crime or game violence and where 26 people don't get gunned down in a two week period; where the city is not struggling with massive Olympic debts and cutting services or increasing property taxes; and where are police are never in the paper for drug possession, assault, drinking and driving, and murder.

Yup…who would want to pay 1/2 the costs of Vancouver RE in an American community that has the same problems as Vancouver

Clearly, he must be crazy…

y half for the same house to live in a community with the same problems…

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>>>Here’s a challenge, tell me 3 things you like about Vancouver, see if you can bring yourself to do it.<<<

No, I don't perform on command for angry, worthless trolls.

Didn't think you could bring yourself to say something positive. Nuff said.

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@fixie guy: Uh oh, here comes dumber to join his buddy BPOM. Now we just need McLovin to show up and we've got the trifecta!

Same question to you broken guy, which bear camp are you in? You like the city just think prices are too high, or you hate everything and everyone just like your buddy BPOM?

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Best place on meth Says:
66

@cgh:

>>>In all fairness, the “best place on Earth” thing is meant to apply to all of BC, not just Vancouver.<<<

Totally agree, BC is an amazing province.

Ironically though the cheerleading comes exclusively from people in Vancouver, the most over-rated, over-priced city on earth and the worst part of BC.

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Three things:

– Genuinely nice people, who are thoughtful, considerate, caring and tolerant (with the notable exception of people on real estate blogs)

– Natural beauty, from the incredible North Shore hiking, skiing, boating and climbing locations to the flowers throughout the city

– The Asian restaurant scene, which is easily one of the best in the world

If you are not a fan of any of these things, then I can see how you might be happier elsewhere.

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Anonymous Says:
68

……

Congratulations, you’re making an excellent move.

I would dump Vancouver in favour of San Diego in a heartbeat if it was feasable.

……

Amen brother!

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Enough with the real Says:
69

Ok we all know the " bulls" are the nut bar realtor and possibly the brain dead side kick;

He made a mess of his blog and now he is foaming at the mouth.

He is obsessed, and needs the attention.

Just ignore the nut.

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Best place on meth Says:
70

@N:

>>>Genuinely nice people, who are thoughtful, considerate, caring and tolerant <<<

Are you kidding me?

As for the natural beauty and Asian cuisine, that can be found in abundance in other cities which have much better people living in them.

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@N:

"The Asian restaurant scene, which is easily one of the best in the world"

Ha ha ha

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hello.

since we are on the topic of maths. i thought i would try something very non scientific.

heres what i did, went to mls – found 2 cities (vancouver and kelowna) created more or less similar map zoom scales and looked at the number of items for sale.

here are some screen caps:

kelowna: http://imgur.com/BV3tv.png
vancouver: http://i.imgur.com/DcD0g.png
————————————-

some numbers:

kelowna: 1328

vancouver: 2502

population kelowna*: 106 707

population vancouver*: 578 000

data maybe somewhat inaccurate as the selected area included bits of north vancouver. i guess my point is kelowna has many units for sale.

anecdotally – dont bubble collapse on the outskirts first before moving inward.

ps. i dont do math for a living (obviously).

cheers,

s.park

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Anonymouse Says:
73

"Ok we all know the ” bulls” are the nut bar realtor and possibly the brain dead side kick;"

Declare the opposition a realtor and you can lazily ignore addressing any of their arguments. The easy out…..

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Anonymouse Says:
74

"where 26 people don’t get gunned down in a two week period;"

Statistically, Vancouver is still safer than most North American cities. We've went over this a few weeks ago. So there have been a couple of high-profile incidents here, doesn't mean that Vancouver is unsafe relatively speaking.

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Enough with the real Says:
75

Ok nut bar do you deny you are the realtor/blogger ?

Also you making a big deal of the sales over list ; is it not a sales strategy to under price to drum up interest?

It' s too obvious who you are,and you should get some treatment, you owe it to your staff and family.

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Very Wealthy Vancove Says:
76

My friend it is happening in US not Vancouver;instead,100% of those Vancouver mortgage are way above water hundred feet and many of them,I presume over 70 to 80% are high above the moon.Stop putting us in American shoe coz Vancouver is a Chinese dominated City and its RE are well secured by Chinese.The pre-sale units on Wellington and Kingsway are being chased by Chinese.U will see thousand of Chinese lining for the pre-sale event.Don't miss the boat to patch up your miss opportunity.

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>>>>>>>Genuinely nice people, who are thoughtful, considerate, caring and tolerant <<<

Are you kidding me?<<<<

My cities before here were Tokyo, Rome, Paris and New York, which are admittedly some of the most impatient and aggressive first world cities out there, and this may tint my view. Also, I live in East Van, so I don't see much of Vancouver's least desirable residents. But yes, even after nearly five years, I continue to be shocked by how nice everyone is.

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@N:

"Genuinely nice people, who are thoughtful, considerate, caring and tolerant"

I can easily name 10 things I love about Vancouver… BC, limitless!

I can also think of a lot of negative things as well, first and foremost the people! Vancouver HAD the reputation of being "laid back" and maybe it used to be, but for some reason the myth continues and people think it's still the case. But it surely isn't.

For the MOST part ( obviously there are nice people here or I wouldn't live here) the people are rude, self centered, shallow, uptight and don't give a rats about the city history or it's future.

As my wife says " Vancouver is so busy trying to be relaxed it's uptight"

I truly do love this city, but no, it's not the greatest place on earth and the RE is maybe worth 50% of it's value and the people are certainly NOT it's asset!

Like or Dislike: 0  0

fixie guy Says:
79

#74 Anonymouse Says: "Statistically, Vancouver is still safer than most North American cities. We’ve went over this a few weeks ago. "

BC's 2010 Crime Severity index is 60% higher than Ontario's, and since the Vancouver CMA and the Golden Horseshoe define the lion's share of each province's population do the math, LSoS. Among the provinces only Manitoba and Saskatchewan top it.

Like or Dislike: 0  0

asian cuisine with extra MSG and all imported food from polluted Asia!

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Anonymouse Says:
81

"Ok nut bar do you deny you are the realtor/blogger ?"

Yes, I deny that I'm either a realtor or a blogger.

Like or Dislike: 0  0

Anonymous Says:
82

I wanted to see how the "% sold at or above asking" ratio correlated through the recent downturn and recovery and these are the results. 1st column is date, 2nd is Greater Vancouver detached benchmark price, last is the % sold at or above asking (detached houses). Comments? Is this a useful stat to track?

2008-01 \$742,490 22%

2008-02 \$761,342 22%

2008-03 \$764,616 22%

2008-04 \$771,321 21%

2008-05 \$771,250 18%

2008-06 \$765,654 13%

2008-07 \$753,165 9%

2008-08 \$737,985 8%

2008-09 \$726,331 9%

2008-10 \$695,962 8%

2008-11 \$666,525 5%

2008-12 \$648,421 8%

2009-01 \$659,638 4%

2009-02 \$653,452 7%

2009-03 \$649,342 8%

2009-04 \$675,268 13%

2009-05 \$680,320 16%

2009-06 \$701,384 21%

2009-07 \$711,702 20%

2009-08 \$732,656 23%

2009-09 \$741,632 29%

2009-10 \$749,808 26%

2009-11 \$757,209 27%

2009-12 \$766,816 23%

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Anonymouse Says:
83

"BC’s 2010 Crime Severity index is 60% higher than Ontario’s"

I should've said American and not North American. Canadian cities on the whole, including Vancouver, are safer than American cities.

Like or Dislike: 0  0

pricedoutfornow Says:
84

@spark:

Kelowna DOES have a lot of units for sale. One interesting thing I noted today, Big White alone has 128 or so units for sale (condos, obviously). I don't think these are included in the units for sale from your screen shot, because they are outside the map. 128 units for sale! This seems like a lot to me, for a small ski resort, which is only open 4 months a year. Believe me, I've been there in the summer and it's all closed up. There's been talk of trying to make it a "year round resort" with a golf course, but they have water issues in that area, so I really doubt this is going to fly.

The cheapest unit you can buy is \$58k. I wonder if this would be cash flow positive as an investment? Hm (not that I would buy, well, maybe if the units are priced at \$15k).

Like or Dislike: 0  0

@N:

– Natural beauty, from the incredible North Shore hiking, skiing, boating and climbing locations to the flowers throughout the city

How about some real jobs, better schools and affordable access to all those amenities that actually make society accomplished and happy. One can't eat flowers from parks or live in mountains and beaches neither to make living while hiking and boating. Get real douche and don't sell to us that realtor crap about skiing, boating and high-end living.

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painted turtle Says:
86

@Very Wealthy Vancover House Owner Says:

Wellington and Kingsway? What are you talking about? Which project?

My friend just inquired about "the Social" pre-sale on Kingsway and Main. No line up there. The company was putting huge pressure on him to buy.

Also, some condos at UBC have been for sale for eons. A few years ago, all projects were sold out in the pre-sale phase. Yes, mostly to Asian buyers (and FYI, not only Chinese but also Koreans). But now some finished buildings are still looking for buyers, and sit empty, hardly any light in the evening. And developers are building more of them. Oversupply? Possibly…

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americanwhoknowsbett Says:
87

@Anonymouse

"I should’ve said American and not North American. Canadian cities on the whole, including Vancouver, are safer than American cities."

That is horseshit.

Like or Dislike: 0  0

…Vancouver is a Chinese dominated City and its RE are well secured by Chinese…

Are Chinese banging you on a regular basis too? Is that reason you are so excited?

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Extremely rich Van h Says:
89

Wellingdon Bosa project.Don't be late or it will all be bought up by mainland Chinese.Hurry up for the pre-sale.

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painted turtle Says:
90

Numbers…

Jeff is single, and 55. He makes %4100 a month.

A realtor is pushing him to buy a condo with a \$450,000 mortgage. The bank is happy to lend the money. Amortization period? Well… Jeff's life expectancy is 75.

10 years down the road, Jeff will likely retire, and his pension plan will give him \$2500 a month, in the best case scenario. Can someboy explain to me how his is going to make his mortgage payments then, when inerest rates will likely be higher? Are we looking at monthly payments of \$3000 a month?

Will he be able to resale his tiny 1bdrm condo with still \$300 000 of unpaid principal? Will he be underwater and end up a a poor retired babyboomer?

What is the realtor's responsability?

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Extremely rich Van h Says:
91

@Kosta:

Chinese are rich enough to bang all white girls in the world man.

Like or Dislike: 0  0

Unless that place is cheaper to buy than rent, he would be a complete moron to buy. But the city is full of them so I expect him to be signing the papers any day now.

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fixie guy Says:
93

#91 Extremely rich Van house owner. Says:"Chinese are rich enough to bang all white girls in the world man."

You do write like someone who has to pay for it. Beware the traps. Or not.

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patriotz Says:
94

You likelihood of being a victim of violent crime in both Canada and the US depends almost entirely on your social group. It's not a random thing.

Property crime of course is completely different – you can't prevent your house from being broken into by choosing the right friends. And Vancouver is at or near the top in North America for property crime, particularly for "better" neighbourhoods.

Like or Dislike: 0  0

@Vanrod: No one said San Diego is the best place since slice bread. All cities have bad parts that people best to avoid. Even in Vancouver I have been mugged at the local park and my late grandma knocked down on the side way two blocks from home as her purse got snatch. Truth is the recession is still hurting down there but it sector specific. Some industries are still looking to fill jobs.

To others thanks for concerns – we plan to rent first for at least one year. To make sure the job is stable and we like the area. My job starts Mar 7, in the meantime I have some paperwork to go through for the visa.

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Anonymouse Says:
96

"That is horseshit."

Then I suggest you read the stats that we were discussing a few weeks ago. Just calling something horseshit isn't an argument.

Like or Dislike: 0  0

@Anonymous: "Is this a useful stat to track?"

It depends on how much time it takes. It looks to be correlated with price changes. That is, list prices are "sticky" on the way down so overlists will be less common in falling markets. Note how overlists were still occurring in the deepest depression of the 2008-2009 downturn. Obviously some Realtors won their purple hearts in those dark days.

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Anonymouse Says:
98

@patriotz:

"You likelihood of being a victim of violent crime in both Canada and the US depends almost entirely on your social group. It’s not a random thing."

So that must mean that those cities in the US with higher violent crime rates have a lower class of citizen than Vancouver, too. Either that or your claim is nonsense.

Like or Dislike: 0  0

@SDBound: Best of luck down there. Definitely gorgeous part of the world

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New Listings 326

Price Changes 55

Sold Listings 204

11700

Like or Dislike: 0  0

__________

New Listings 326

Price Changes 55

Sold Listings 204

11700

__________

Like or Dislike: 0  0

re MSM"

Friend told me to call CKNW re a good story…of course this would be contrarian to what the guest they had on said, but at least another view.

CKNW part of the "C whore us" network …..sent me a read receipt that said UNopened….they didn't even open it.

Fuck..this town's media is bought and sold

Like or Dislike: 0  0

Extremely rich Van house owner. Says:

February 9th, 2011 at 4:54 pm

@Kosta:

Chinese are rich enough to bang all white girls in the world man.

==================

Remember with two you get egg rolls….. and no tickee no (money)laundry

bwaaaahhhahahahahahahahahahah

Like or Dislike: 0  0

Patiently Waiting Says:
104

Still, the problem was never a lack of customers, it's the high cost of rent. Antique mall owner Tim Garrett said he was paying \$15,000 per month for the 18,000 sq. ft facility, which is located at the back of the Clover Square Village at 17700 — 56th Avenue in Surrey. But he said the mall's owner wanted to nearly double the rent, so the mall is closing.

"Our business has been very successful, and we continue to be successful," said Garrett.

"But when they're going to put in [huge] rent increases in front of us … we'd have to have an excellent year just to pay the rent, you know?"

I'd love to know if this space is filled by someone else. I've seen numerous examples of businesses moving due to rent increases (often to nicer spots) and then the space staying empty ever since. These are not re-development lots AFAIK so this dysfunction is puzzling.

Don't the landlords miss the rent cheques? Personally, I've lost a couple of places that used to be in walking distance so it does piss me off.

Like or Dislike: 0  0

Anonymous Says:
105

@painted turtle: The taxpayer, through cmhc will make the mortgage payments to teh bank when he cannot do so.

Like or Dislike: 0  0

Dan in Calgary Says:
106

@Troll, "… don’t patronize me son."

I'm not patronizing you. I'm pushing your buttons. But it's not challenging enough, so I'll probably stop now.

Like or Dislike: 0  0

Patiently Waiting Says:
107

Speaking of media whores, did anyone else watch Global news tonight? Some realshits filled a helicopter with rich Asians and flew over White Rock.

Like or Dislike: 0  0

Best place on meth Says:
108

Hey Tom Vu,

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Boombust Says:
109

"Speaking of media whores, did anyone else watch Global news tonight?"

Yup. Saw it. Then I immediately switched to CTV. Also, I can't stand that Chris Gailus' accent.

Sounds like a Seattle newscaster.

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Best place on meth Says:
110

I saw it too.

The first thought that came into my head when I saw realtards and rich chinese in a helicopter had to do with surface-to-air missiles.

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February 2011 month-end projections

Days elapsed so far 7

Days remaining 13

5 Day Moving Average: Sales 137

5 Day Moving Average: Listings 270

SALES

Sales so far 1044

Projection for rest of month (using 5day MA) 1786

Projected month end total 2830 +/- 627

NEW LISTINGS

Listings so far 1966

Projection for rest of month (using 5day MA) 3507

Projected month end total 5473 +/- 461

Sell-list so far 53.1%

Projected month-end sell-list 51.7%

MONTHS OF INVENTORY

Inventory as of February 9, 2011 11700

MoI at this sales pace 4.13

That's a strong day on both sides of the sell list.

These are the kind of numbers I expected to see in the run up to March 18th. Lots of panicky buyers and lots of seller eager to find their own personal greater fool.

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Boombust Says:

February 9th, 2011 at 6:37 pm

“Speaking of media whores, did anyone else watch Global news tonight?”

Yup. Saw it. Then I immediately switched to CTV. Also, I can’t stand that Chris Gailus’ accent

======

Suggestion:

Call him 'Gay l' ass"

WTF is the Global gig from Richmond Oval the Olympic village

If you get too close to a black hole..you get sucked in

bwahahaahahahhahahahahahaahaaaaaaaaaaaa

Like or Dislike: 0  0

Anonymous Says:
113

………

Speaking of media whores, did anyone else watch Global news tonight? Some realshits filled a helicopter with rich Asians and flew over White Rock.

……………….

Maybe they were showing them a new place they could jump from when the market tanks in a few months?

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Anonymous Says:
114

……

@Kosta:

Chinese are rich enough to bang all white girls in the world man.

……

Wonder if the grils would notice they're getting banged?

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114 Anonymous

6 inches is this big

> <

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Anonymous Says:
116

B.C. most financially vulnerable province: TD

"[The] vulnerability index is not a predictor of the future," TD economists Craig Alexander, Derek Burleton and Diana Petramala said in the report. "[But] based on our analysis, we find that households in British Columbia, Alberta, Ontario and Saskatchewan are the most vulnerable," they said.

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Anonymous Says:
117

Flaherty warns of even higher mortgage rates after this week's jump

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Best place on meth Says:
118

Excellent. Higher interest rates hurt Vancouver the most.

The higher, the better.

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painted turtle Says:
119

@DaMann: Good guess!!! Jeff signed the sale papers today. However, he resisted slightly the realtor and went for a less expansive, but ground floor, condo unit.

Jeff has been seeing that Realtor "friend" for month at the local pub, and little by little, that realtor turned a happy renter into

a potential buyer… The details of the story remind me of someone being manipulated by a drug dealer.

Like or Dislike: 0  0

I'm really happy for meth man.

After getting 1000K over list of one of his 20 Drummond Drive homes….he was able to bang one of those HGTV broads who pimped up one of his mansions to flip, thus drive up the average sales price.

Then he donated proceeds to unmarried Mothers fund..to help them get a start

The meth man need on Order of C ……man..vote up if you agree, I have lots of connections (+ air miles ) to make it a slam dunk.

Like or Dislike: 0  0

Re Cloverdale Antiques mall.

" sigh"

I remember when tht mall had the BC car museum…then the vindictive 1990's NDP Gov't auctioned off the entire collection.

Cloverdale area is a hot bed for antiques…like the auto mall model

Was in Cloverdale this week and see Red Barn antiques is down to the old building.

The antique mall was cool.

I don't know WTF the landlord is thinking….I'm gonna bet they will regret the antique mall leaving..bet it stays empty a loooonnnggg time.

F*ck the greedy pricks

Like or Dislike: 0  0

I walked around the Olympic Village 2 weeks ago.

Aquilini offerd to buy it ????

At 75% off its still a rip off….kick the tires befiore you even comment. Its pure shite…..and BTW the warranty is probably long gone.

The lobby doors to each strata building are UNlocked….they are so desperate for customers.

Go and prove me wrong.

My predicition is Mayor Moonbeam wants the price to absolutely tank so they can turn this \$ Billion dollar fiasco into social housing….

Like or Dislike: 0  0

@SDBound 33

Each to his own. Remember you're not just moving to San Diego; you're moving to America, where even their most left-wing Democrats are to the right of our Tories. No health care. The death penalty. Crazy gun laws. Crazy right vs left battle going on all the time. Crazy religious nuts everywhere. Nice enough for a visit but I'd rather rent in Canada than buy in America, which is what I'm doing right now.

Like or Dislike: 0  0

americanwhoknowsbett Says:
124

@Joshua

"The marine base bothers me."

Well, aren't you just a precious little snowflake.

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Anonymous Says:
125

Please google people with small penis to confirm what kind of people have the smallest penis.

Like or Dislike: 0  0

Brown Cow Says:
126

Although East Indians have the smallest penis. We know how to use it well.

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Extremely rich Van h Says:
127

It doesn't matter as long as their hole are stuffed with Chinese money that's all they and Canada concern

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Globello Says:
128

Robert Shiller, Financial Post and Edmonton Journal, Feb 8, 2011:

"Canada looks to be headed for a big drop in house prices.

Calgary and VANCOUVER are the biggest possible bubbles in Canada."

Kinda surprised that nobody has picked up on this.

Like or Dislike: 0  0

Anonymous Says:
129

Please google people with small penis to confirm what kind of people have the smallest penis.

……

Like or Dislike: 0  0

@americanwhoknowsbetter: I'm American too, assmunch. Doesn't mean I enjoy aircraft carriers and F16's.

And that's Dr. Snowflake to you.

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SDBound Says:
131

@john:

I'm sorry john but you sound like someone who watches too much programming on CNN. Many large companies have heathcare coverage included. At my employer you even get to "bank" your health benefits dollars. Instead of billing \$300 on glasses every year, I can put that allocation aside and get laser eye correction paid for later on.

Like or Dislike: 0  0

Anonymous Says:
132

Some financial analysts warn that the dramatic, decade-long run-up in house prices reported Tuesday by Re/Max (house prices climbed an average of 6.82 per cent every year from January 2000 to December 2010) will become a distant memory in the years ahead, possibly even calling into question the post-war mantra that buying real estate is a sure-fire investment.

Scotia Capital economists Derek Holt and Gorica Djeric said in a note: "This reaffirms our view that the Canadian housing market, which led the country out of the recession, will moderate through 2011, acting as a drag on the economy."

"Even though mortgage interest rates are expected to rise later this year, they will still be within short reach of current levels and remain supportive for housing market activity,” says Crea’s Chief economist Gregory Klump. “Strengthening economic fundamentals will keep the housing market in balance, which will keep home prices stable."

Says CIBC chief economist Avery Shenfeld: “I don't think we're going to reverse all the gains, but we are likely to take a bit of a haircut on prices. Houses prices remained high because interest rates were so low.

Like or Dislike: 0  0

last line Says:
133

and the last line of the article is the best:

“Home buying is an incredibly important decision,” says Karen Kinsley, CEO of CMHC. “It should be your home first and an investment second. It doesn’t matter if mortgage rates are 21 per cent or three per cent. The bottom line is you’ve got to make sure you can afford what are getting into.”

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patriotz Says:
134

What's so good about it? Kinsley is saying that fundamentals (e.g. price, interest rates, implicitly rental value) don't matter as long as you can afford to buy. As VHB put it, he can afford a \$10,000 pencil, but that doesn't mean it's a good idea to buy one.

I very much regard buying a house as an investment decision, which is exactly why I'm not buying. I can get a much better return on my money somewhere else.

Like or Dislike: 0  0

[...] from heaven at vancouvercondo.info February 9th, 2011 at 9:26 am- [After referencing BC's 160% debt to disposable income ratio:] “How will I ever be able to [...]

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[...] at vancouvercondo.info February 9th, 2011 at 11:18 am- “After scrimping and saving for a downpayment for the past 5 years – we are of the [...]

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