The Village Selling Well
This blog has highlighted many of the stories surrounding the Vancouver housing market with a bearish tinge. But often I find myself cheering for the other side, most notably with the sad state of affairs over at the Millennium Water Village at False Creek development, where thaumaturgist Bob Rennie and a maniple of marketeers have been tasked with selling the remaining units to recoup some of the money the City borrowed to complete the project. I provided some estimates of projected losses a few months ago, based on average price per square foot. Hoodsurf provides the quicksheet of the approximate pricing.
Well wonder of wonders, it looks like the opening weekend was a stupendous success. The BC forum/Gong Show Realestatetalks has filled in some anecdotes from the front lines. Apparently over 70% sold over the weekend with an additional waiting list of 100.
Is this a bullish sign for Vancouver? Well I don’t know about that. A look across the water from the development yields well over 1000 condo units for sale. Here’s a map search of a small smidgen of the downtown core courtesy MLS map search:
Why aren’t these units selling? Was the Village at False Creek well-priced, or was it simply the red “30% off” stickers on the unit doors? What we do know is that there are now over 100 fewer people who will be available to buy these units already for sale. The weekend was marvelous for showing, a crisp sunny weekend, and that couldn’t have hurt.
It’s useful to pay attention to the tactics employed by Mr. Rennie, including
- Withholding specific price information, only ranges
- Pre-selling certain units to “insiders”, giving the pricing some semblance of acceptability
- Blitzing the print and TV media in the week leading up to the event
- Telling City Hall to go into a room and talk to nobody
Heavens knows what went on behind closed doors…
I commend Bob Rennie for ostensibly pulling this matzo ball out of the fire, at least in part. The discounts were significant and apparently “aggressively priced” compared to comps. That certainly helped, along with his ability to tap into the local media and his many years of experience punting real estate. In my view, based on cap rates alone, even at current price the development is significantly overpriced, as are most if not all condos in Vancouver these days.
This development was facing off the taxpayers of Vancouver — and the public services it offers — versus individuals who can afford to buy expensive real estate. In speculative bubbles like this one, for me it’s not about who wins and who loses, it’s the depraved entertainment of seeing wild animals fight over scraps of meat. But on this specific occasion, I was rooting for Bob from day one and, for today, to him I tip my hat. Well done.
Sincerely,
A bearish blogger
February 20th, 2011 at 10:16 pm 1
"the village" sort of appropriate. First thing comes to mind is the cult tv show the prisoner. The prisoner was imprisoned in "the village" if he tried to leave a giant bubble captured him. This show is a good metaphor for the madness of the Vancouver bubble. It seems like the prisoner we can't escape this madness and there is no answer to it.
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February 20th, 2011 at 10:25 pm 2
All I can say is "Go Bob Go." Sell, sell, sell.
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February 20th, 2011 at 11:38 pm 3
Either way the taxpayer will be bailing. Now we get to do it in a few years through the CMHC when these people walk.
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February 20th, 2011 at 11:47 pm 4
Here's your source of all that "investment" money from China. You think he is the only one?
http://www.vancouversun.com/news/Chinese+governme…
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February 20th, 2011 at 11:58 pm 5
Frances Bula, Vancouver Globe and Mail commentator, on CBC –
“This is a city where we’ve built our economy, and many of us have built our personal lives, on speculating on real estate. Even our own houses, we pay crazy prices for them, in the expectation that prices are going to rise, not because our incomes can in any way cover them.”
http://wp.me/pcq1o-1RK
Comment:
Almost every Vancouver RE purchase has a speculative component, even if it is most often coated in a veneer of wholesome innocence. The willingness of locals to borrow vast sums of money, and to use that money to bid up RE prices, has driven our bubble. As Bula implies (and as we have long argued) stratospheric prices would not have been paid by people who didn’t expect ongoing limitless price appreciation. This speculation, by all buyers, is a far, far more important engine to our bubble than other commonly touted phenomena, such as, for instance, foreign money.
See the VREAA ‘Spot The Speculator’ collection for numerous relevant examples.
Q: What happens to speculative demand when prices start dropping?
A: It evaporates.
Q: What happens to speculative holdings when prices start dropping?
A: They becomes supply.
[hat-tip Froogle Scott for spotting Bula's statement]
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February 21st, 2011 at 12:38 am 6
#2: True, Eddie, but there's a big difference between being on the hook as a taxpayer on Vancouver's behalf and being on the hook federally. All things being equal, I'd rather the OV debt was "transferred" to federal rather than having it hobble the city.
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February 21st, 2011 at 1:00 am 7
Between the Burnaby development selling out, and the OV, it seems this was quite the bullish weekend.
Just insanity…going to be an interesting year..
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February 21st, 2011 at 1:07 am 8
@WBC: "You think he is the only one?"
Come on you can do better than that! You get +1 for FUD, -10 for not putting this into context. How many Chinese multi-millionaires are required to keep prices high?
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February 21st, 2011 at 1:08 am 9
Investor bloodbath:
http://www.theglobeandmail.com/news/national/brit…
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February 21st, 2011 at 1:09 am 10
@sj: It does look bullish. But when you look at the Sovereign, why are there so many people that want to buy pre-sales? Speculation perhaps…easy flip?
As for OV, it probably comes down to consumer psychology in that the buyer is getting a "great deal". Look, it's 30% off. It's cheap.
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February 21st, 2011 at 1:12 am 11
@WBC:
Harper and his government will likely welcome corrupt Chinese party officials with open arms as long as they bring cash when they should be hunting him down like a dog and sending him back to face execution.
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February 21st, 2011 at 1:23 am 12
The weekend's events do not bode well for bear dreams of changing buyer sentiment to commence a correction. Joe6P sees a hot market and an improving economic picture and will continue to buy. Crazy stats this month too, highest listings by far in the past decade but also the highest sales, even though we were told there were no more buyers left. On the interest rate front, inflation looks tame so no VRM increases anytime soon. This market is going to remain stagnant and uninteresting for a few more months yet bears, pushing us to a greater than 1 year flat market, making bears impossibilities possible.
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February 21st, 2011 at 1:23 am 13
Face it bears, you will be wrong AGAIN this year!
I already start to hear "this should be an interesting year" which means "shit, this is more bullish than I expected," soon to turn into "Fall 2011 is when prices will decline", which really means, "shit, I am wrong again for 2011 so I will push it back to fall and then revise my prediction for the crash of 2012."
What don't you get after banging your heads against the wall for years? Geez, economic fundamentals have been flushed out the pipeline for years. You always fail to account for immigration and cultural shifts, where the ethnic majority of vancouver residents now pool their resources for RE and whose kids live at home for years and then paying huge down payments. The "living on one's own" and "renting before buying" approach of the once ethnic majority here cannot compete with the new ethnic majority. Sorry folks – it is what it is and you best deal with it.
Plus the fact that everyone now has basement suite, so the "average family income" stat is bogus.
Maybe you all should have listened to Dave since he has been the ONLY poster that has been right for YEARS!
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February 21st, 2011 at 1:24 am 14
@sj:
Buyers are bullish by definition. Someone is always buying, so someone is always bullish.
Doesn't mean prices are going to go up does it?
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February 21st, 2011 at 1:29 am 15
Another Sovereign flipper on Craigslist:
http://vancouver.en.craigslist.ca/bnc/reo/2225739…
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February 21st, 2011 at 1:31 am 16
@Time's A Changin', "Maybe you all should have listened to Dave since he has been the ONLY poster that has been right for YEARS!"
In the interests of full disclosure and so that we might understand your post in all of its complexities, I am compelled to ask< "Are you and Dave in a relationship"?
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February 21st, 2011 at 1:36 am 17
@raggedyrenter:
Gotta love this:
As if they gave a rat's ass about the previous buyers. Both the receivers and Rennie have a fiduciary duty to the city and Millenium to get as much money as they can from the property. That's all.
The term "fire sale" really means nothing in objective terms as properties always sell for market price if the seller is putting in a reasonable sales effort.
I think Rennie was really directing his words to present and future buyers who may have the misconception that the sellers have any real control over the selling price. "Don't worry, be happy and buy".
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February 21st, 2011 at 1:37 am 18
@southseacompany: That's the same guy who posted the other craigslist flip attempt (PostingID: 2224133573).
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February 21st, 2011 at 1:40 am 19
Troll; Times A Changin'; other breathless pumpers:
Frantic speculative activity is not predictive of future price action.
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February 21st, 2011 at 1:40 am 20
#9
Investor bloodbath:
http://www.theglobeandmail.com…..le1914780/
****
Hmmmm – look at the names of those trying to get out of their OV pre-sales….
I guess the Chinese gambling and speculating mentality only works if prices go up…
When prices go down, well. then its time to bail eh?
Given the significant impact of Chinese buyers on the Metro market, things could get very interesting once the worm turns…
Perhaps they should just claim they need to get out of the contract because of the presence of ghosts and dying people and the cultural affront these impose on them…
Then maybe the PC City would let them out…
Too bad that one has been used up…
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February 21st, 2011 at 1:41 am 21
This bear market is only occurring in Vancouver, Burnaby, and Richmond. The rest of metro has seen slight to moderate reductions in prices over the last year. So, to some extent, the correction IS happening, just not in three places. This video seems to sum things up well:
http://www.youtube.com/watch?v=q3qK1AI5bmo
Then there's the rest of BC….
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February 21st, 2011 at 1:42 am 22
@patriotz:
If developments are selling out in February, it shows there is still strong demand and a high level of confidence in the market.
I guess your bear case requires that buyers just run out at some point. The problem with that theory is that demand remains high and we will see feel the lack of new inventory due to the construction slowdown a couple years ago.
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February 21st, 2011 at 1:43 am 23
In other news, Vancouver is once again ranked the most livable city in the World.
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February 21st, 2011 at 1:56 am 24
@raggedyrenter: "Investor bloodbath:"
The "call option" isn't turning out to be much of an option after all. The howled cries of the failed flipper.
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February 21st, 2011 at 1:57 am 25
@Dave: But I'm sure somehow it's magically less livable for renters who enjoy those lovely 2% cap rate condos for half the price of the mortgage…
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February 21st, 2011 at 1:59 am 26
@Dave: "we will see feel the lack of new inventory"
Tell that to the 1000+ units for sale downtown! It's only February 21st remember.
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February 21st, 2011 at 1:59 am 27
Have some friends who are staying in Palm Springs and have gotten a huge eye opener as to what happens when the buying finally stops. The condo unit they are staying at (which is a nice place with great pools etc) are being abandoned more and more by the month and the remaining condo holders have just had their monthly strata fees jacked $400 a month to compromise for those who walked.
On top of that is the number of ghost malls abandoned to move into trendier ones down the road, it is the reality of a real estate bubble still reeling 5 years later with no end in sight. This is going to be so ugly when the wheel stops. Watching this Bosa bullshit is the pinnacle. Asians controlling our housing destiny is the epitome of being Canadian.
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February 21st, 2011 at 2:04 am 28
@vreaa:
Well, actually it kinda has been for almost a decade, regardless of whether you agree or not. So until we see a marked change in capacity to buy or willingness to buy I don't think you should be expecting much change on the price front. But by all means, keep rationalizing away any bullish news you hear.
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February 21st, 2011 at 2:09 am 29
@Dave:
>>>The problem with that theory is that demand remains high<<<
Beware the 18th of March.
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February 21st, 2011 at 2:18 am 30
@Dave:
Um, buyers did run out at the original asking prices for the OV. That's why they were put on sale for 30% less.
There are always buyers, the only question being how much they are willing to pay. The bear case is that if prices are out of proportion to rents and incomes buyers will inevitably run out at those prices.
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February 21st, 2011 at 2:36 am 31
I don't think you could hold Bob Rennie or any other real estate agent to the level of a fiduciary. Clearly Rennie and all agents profit from the sales and I think all of them would make deals that while profitable to the city, may not be absolutely in the best interest of the city or its taxpayers. I think the interest of a real estate agent can be in conflict with a seller. The role of a real estate agent is to facilitate the trade between a buyer and a seller. Clearly this role can be performed, while not having to maximize the sale price or provide the best terms to either buyer or seller. In fact being held to the level of a fiduciary may be counter productive to the job of selling the village condos. The agents primary objective is to make a sale and this means that they may not be fully acting in favor of either the buyer or the seller and may actually hold their interest above those of others.
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February 21st, 2011 at 2:41 am 32
Yes bear all prediction for 2011 wrong again just like all prediction for 2010. Only difference is all hope lost in February this year last year it took till April. Bear this year might be good year to re-evaluate life. Girls in Vancouver don't like renter this is proven. Most gay guy don't like renter either ask skullboy. You don't like rain anyway bear so pack it up and go. We don't need this many coffee server in Vancouver already too many with HST decline. Other city like cowtown coffee server is serious profession. Time to do it bear.
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February 21st, 2011 at 2:45 am 33
@silly_bear:
All these coffee servers in Vancouver must be making good money.
According to Mike Stewart and his mortgage broker sidekick, the average person in Vancouver makes $50K.
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February 21st, 2011 at 3:00 am 34
Chinese official flees to Canada with 14 million:
http://www.vancouversun.com/news/China+official+f…
I'm sure the guys in Vancouver, plunking down the cash he brought over in a suitcase for a swanky house on Vancouver's West side.
I wonder how much of this money entering Canada and going into real-estate is corrupt. I'm guessing at least half of it minimum.
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February 21st, 2011 at 3:07 am 35
Did you see Mike Stewarts and the other guys face when they calculated how much people will be able to afford with the new rules kick in.
Its priceless, it is like they just realize, shit, no one can buy anything with 240. That is with their calculation of average 50k per year salary.
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February 21st, 2011 at 3:12 am 36
Doesn’t seem much of a feat to me; 30% off, and for all intensive purposes, with free financing to boot
No marketing genius required, just a compliant local media, and lots of Kool Aid,
Heck, Dave could have sold a few this weekend,even without the helium balloons.
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February 21st, 2011 at 3:44 am 37
Dave, did you notice how silver took an escalator up in the last 3 days? Since Thursday 12% up. Besides physical I have leveraged ETF so it went 25% up for me. In the last 3 days 30k profit. Never in my life made that easy money. Unbelievable. Happy, happy, happy
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February 21st, 2011 at 3:47 am 38
28 Troll Says:"@vreaa:Frantic speculative activity is not predictive of future price action.
Well, actually it kinda has been for almost a decade…"
Well, it kinda did in the US too, uh-huh, uh-huh…
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February 21st, 2011 at 4:11 am 39
@southseacompany: that 388sf closet in burnaby would be $300K after closing costs!!! no bubble here, keep blowing into the balloon.
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February 21st, 2011 at 4:17 am 40
@WBC:
Looks like he may have lost most of it gambling…
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February 21st, 2011 at 4:26 am 41
@Dire Straits: You sounds exactly like a Vancouver home owner!
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February 21st, 2011 at 4:35 am 42
Vanrod: "Dire Straits: You sounds exactly like a Vancouver home owner!"
Actually I am a renter
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February 21st, 2011 at 4:38 am 43
@Dire Straits:
Congrats! Good stuff. Careful because silver can be volatile.
I think it's being pulled up by oil and the Libya situation in the short term. Over the long term, the normal trend will take hold. I'm still think $45 in 2 to 3 years..
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February 21st, 2011 at 4:53 am 44
yes, you are right about volatility. tomorrow i will cash the ETF profits and wait for pullback once dust settles.
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February 21st, 2011 at 5:03 am 45
@Troll: "But by all means, keep rationalizing away any bullish news you hear."
–
Not rationalizing anything away, just pointing out that a frantic weekend of pumped pre-sales for a building planned to complete in 2014, where the majority of buyers appear ready to flip, is hardly reason to assume that the rest of 2011 will be nothing but price appreciation.
Massive amount of 'contradictions' in the market at the moment; lots of hectic interest.
Most important feature, perhaps, is the narrowing of the market (rest of BC, most of LML, dropping; market darlings still selling). This occurs at the end of bubbles. (eg see Nifty Fifty; Tech darlings; US Housing bust; etc)
We still think there is an excellent chance of a deflationary wave this year, affecting emerging markets, all stock markets, commodities, and, yes, Vanc RE. The loonie will come down, too.
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February 21st, 2011 at 5:06 am 46
@crashcow:
"that 388sf closet in burnaby would be $300K after closing costs!!!"
How? There'd be no HST to pay, and no PTT for a first-time buyer. Even if they couldn't get the PTT exemption it'd still only be $3K. And maybe another $1000 in legal fees?
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February 21st, 2011 at 5:12 am 47
@whydoItry:
"The role of a real estate agent is to facilitate the trade between a buyer and a seller. Clearly this role can be performed, while not having to maximize the sale price or provide the best terms to either buyer or seller."
Usually a buyer and a seller will have different agents. Or are you referring to Dual Agency?
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February 21st, 2011 at 5:22 am 48
@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.
With the middle east ablaze, who knows how high both might go.
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February 21st, 2011 at 5:46 am 49
Funny how Mike Stewart and his mortgage crony fail to realize that the new amortization rules only means one thing: lower prices. They're trying to spin this as BUY NOW before the rules change. Any idiot with a high school diploma should be able to deduct that this puts downward pressure on prices. Obviously Realtors aren't at that educational level.
http://www.mikestewart.ca/blog/2011/02/07/new-201…
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February 21st, 2011 at 5:46 am 50
@4SlicesofCheese:
The thing that really gets me is when they use the shorter ammortizations and higher rates as a reason to get in now. Isn't there at least one economist willing to stand up and say these forces are deflationary since it effects all participants in the market.
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February 21st, 2011 at 5:54 am 51
@Best place on meth: "Did you see oil up $5.66 today"
If oil climbs and stays above $120/barrel, we're in for a double-dip recession and outright deflation. Prof. Hamilton over at econobrowswer puts forward some compelling arguments to support this.
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February 21st, 2011 at 5:59 am 52
I am sure after the big rally to beat the march deadline for the 35 years morgages, a new rally will start to beat the upcoming interest rate increas by BoC in June.
i wont be surprised to see much higher prices this summer.
We have been going through these rallies for some time now and the demand seems to be still there.
As things stand today, it seems much easier to rationalise the bulls case than bears. The psychology of high prices is engrained in people's heads here and it will take a long time to change that.
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February 21st, 2011 at 6:03 am 53
And I thought "village idiot" was always meant to be used in it's singular form.
I guess it really is different here.
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February 21st, 2011 at 6:07 am 54
@jesse:
Recession, absolutely.
Outright deflation? With oil being such a large input cost to nearly everything we buy, what about stagflation?
It could be the 70's all over again.
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February 21st, 2011 at 6:24 am 55
BPOM: stagflation, that's what I'm thinking….they'll continue accomodative monetary policies as long as possible but if energy costs rise, then what? Pull the rug out and jack interest rates? Not likely with Harper aching for that majority government…..
Back to the 70s, baby!!!
Jesse: have you read Jeff Rubin's book? He gets a lot of flak from the anti-GW kooks, but his arguments are well reasoned and recent events in the middle east are proving him to be somewhat prescient. Oil doesn't have to go very high to put a serious crimp in global growth rates….and without economic growth how will all those well-educated but under-employed Arab kids ever have jobs?
Disclosure: I'm long the (Canadian)oil companies…..
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February 21st, 2011 at 6:44 am 56
The problem: Saskatoon has gotten too expensive for the locals.
The solution: Use taxpayer dollars to help people buy homes!
http://www.ctv.ca/CTVNews/Canada/20110213/saskato…
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February 21st, 2011 at 6:51 am 57
@crabman:
Good grief, when will they learn. That will push prices higher, morons. Has anyone ever heard of just waiting!!
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February 21st, 2011 at 7:24 am 58
@mflat:
Because in Realtor-LaLaLand, prices NEVER go down. Never, ever, ever. That is simply beyond the realm of possibility to Realtors. Oh, except in America. And Ireland. And Spain. And Britain. (have I missed anywhere?)
But never in Vancouver. Never!
(PS-except of course, if you're a presale buyer of Olympic condos.) But ya. Never!
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February 21st, 2011 at 7:29 am 59
Seems like that craigslist flipper got rid of the two 1 brs already
Only the studio left.
http://vancouver.en.craigslist.ca/bnc/reo/2225739…
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February 21st, 2011 at 7:31 am 60
@crabman:
Well at least there's one academic in Saskatoon who's willing to state the obvious.
Unlike here.
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February 21st, 2011 at 7:38 am 61
@paradox:
It sure does. Polls showed that a majority of Americans still thought that RE prices were rising well into 2007.
RE busts are caused by not enough buyers willing and able to pay the current price, not a change in psychology.
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February 21st, 2011 at 7:58 am 62
Pettis on Chinese inflation
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February 21st, 2011 at 8:12 am 63
A question to all of you….
I was reading that in the US, the average amount of equity is now 2.6% or so. I think this is on Garth's (www.greaterfool.ca) latest entry. That blew my mind!
I remember just a few years ago hearing "well, even a significant price drop won't affect the broader market because you have all these people that own their houses outright. Most of the boomers are in good shape because they bought years ago, and now have small mortgages". Fast forward a few years, and the average person, including all these rich boomers has about half of a 5% downpayment worth of equity!
Any idea where say a 25% drop in Canadian RE would leave the average homeowner's equity?
I know we have lots of rich boomers (and Asians) as well, and I'm sure that we (being prudent Canadians) would never take a HELOC out (sarcasm).
KK
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February 21st, 2011 at 8:23 am 64
@Krazy Kanuk: Here is a post on CalculatedRisk on negative equity in the US. The US has experienced about a 25% drop in prices nationwide from their peak in 2006.
The "Curse of Negative Equity"
Note, of course, that this only applies to those with mortgages (2/3 of homes in the US). Not all homeowners have mortgages (just ask Rich Asians!!! LOL).
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February 21st, 2011 at 8:26 am 65
Not many sales today.
The OV circus and yard work must have kept the buyers away.
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February 21st, 2011 at 8:32 am 66
paulb. (or other Realtor), do you know if a buyer Realtor gets a commission for a client buying from developer stock, does that get registered as a sale on MLS even if the unit's not listed?
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February 21st, 2011 at 9:14 am 67
New Listings 297
Price Changes 100
Sold Listings 178
12496
And yes they do Jesse
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February 21st, 2011 at 9:18 am 68
How many day's MA to use
February 2011 month-end projections
Days elapsed so far 15
Days remaining 5
5 Day Moving Average: Sales 166
5 Day Moving Average: Listings 289
SALES
Sales so far 2288
Projection for rest of month (using 5day MA) 832
Projected month end total 3120 +/- 175
NEW LISTINGS
Listings so far 4296
Projection for rest of month (using 5day MA) 1445
Projected month end total 5741 +/- 74
Sell-list so far 53.3%
Projected month-end sell-list 54.3%
MONTHS OF INVENTORY
Inventory as of February 21, 2011 12496
MoI at this sales pace 4.01
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February 21st, 2011 at 9:28 am 69
@64 jesse Says: "Note, of course, that this only applies to those with mortgages (2/3 of homes in the US). Not all homeowners have mortgages (just ask Rich Asians!!! LOL)."
Bless those who paid cash, for they'll get screwed in real time and won't be a future drain on the taxpayer.
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February 21st, 2011 at 9:28 am 70
@mflat:
I really wish it were true that any idiot could figure this out, but sadly my experience has proven otherwise.
I don't know why, but for some reason it doesn't matter how intelligent, educated, or mathematically inclined someone is: when it comes to real estate, it's like they've suddenly taken crazy pills. Case in point – I was having lunch with a friend who's an extremely successful (and highly paid) corporate lawyer, who's looking to buy a house soon. This is one of the smartest guys I know, and he deals exclusively with corporate finance and securities law.
He mentioned that he's in a rush to find a place soon, because "interest rates are likely going up and that's going to increase monthly payments". I mentioned that higher interest rates would mean lower prices, but he countered with "sure, but that still means the monthly payment will be the same either way". So he figures it's still better to buy now.
So one of the most intelligent, financially-savvy guys I know can't figure out that it's better to pay a lower price with higher rates than a higher price with lower rates, given the same monthly. And this guy deals with billion-dollar securities all day long.
There really is no reasoning with people over real estate. I have had similar conversations with several other people, and it never seems to make a difference. When someone has made up their mind to buy a house, all they want to hear is reasons why they should do it.
Maybe people just need to learn the hard way. Sadly, they're about to.
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February 21st, 2011 at 9:52 am 71
@paulb.: Yet another big day for VANROD
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February 21st, 2011 at 10:00 am 72
@Yalie:
Not a good idea to mention ms by name you may be aiding the POS with getting his name out.
Also you can't use reason when someone is horny on RE.
It's like trying to tell a gambler to stop gambling when he is winning.
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February 21st, 2011 at 10:00 am 73
@Yalie:
Not a good idea to mention ms by name you may be aiding the POS with getting his name out.
Also you can't use reason when someone is horny on RE.
It's like trying to tell a gambler to stop gambling when he is winning.
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February 21st, 2011 at 10:04 am 74
I was at many open houses in east van this week end and saw no shortage of buyers. Many houses already have sold stickers which convinces me to beleive that there will be no crash in vancouver real estate, ever! MARCH 18 will have no affect on the market at all. I have been waiting it out for the last 5 years and am finally giving in and am going to buy!
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February 21st, 2011 at 10:17 am 75
@patriotz: "RE busts are caused by not enough buyers willing and able to pay the current price, not a change in psychology."
I dunno, patriotz…
The change in psychology pretty much comes with the territory.
All part of the same feedback loop on the way down.
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February 21st, 2011 at 10:24 am 76
@lost hope bear: Congratulations, LHB! Just make sure that you've bought a decent place–a heritage-type house, even–and please put in a few hundred thousand in renos–the roof, drain tiles, kitchen, new heating system, etc.
Then I'll buy it from you in a few years for a huge discount.
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February 21st, 2011 at 10:31 am 77
LOL, keep dreaming, aren't you tired of being wrong?
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February 21st, 2011 at 10:31 am 78
@kansai92:
I have to disagree with you, kansai, and agree with patriotz. Human (individual and mass) psychology is the effect, changes in facts on the ground are the cause.
Mass psychology allows individuals (and collectives) to suspend reality for a while (hence the delayed reaction) but eventually the evidence becomes so overwhelming–the loan officer at the bank informing you that your mortgage is now larger than your home's assessed value–that psychology changes. In the absence of changes on the ground, there is no reason for psychology to change.
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February 21st, 2011 at 10:34 am 79
@lost hope bear:
Please explain to me how I am wrong? I'm currently renting at about half the cost compared to paying a mortgage. I just had the landlord replace my carpet and curtains. Cost to me? Zero. Oh, and while the work was being done I was out enjoying myself at a public lecture.
Aren't you supposed to be out house-hunting?
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February 21st, 2011 at 10:45 am 80
Thats fine enjoy yourself as wiil I. Well your wrong as in the correction you are predicting has not happened and if it does why would I have to sell? Look, I understand your points and your logic makes sense but thats the the problem, the market tells a different story.
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February 21st, 2011 at 10:48 am 81
@Yalie:
It's weird human nature, just like in those tv ads running right now for RSP's commenting how much time people spend doing things like reading gossip but then they are too busy to pay attention to their finances. I think people are generally lazy and would rather believe the BS the "experts" are feeding them than take the time to research themselves and potentially develop a contrarian view.
I personally love the NAR's mission and feel it is a pretty good place to send people who trust REALTORS (R):
National Association of Realtors
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February 21st, 2011 at 11:29 am 82
@YLTNboomerang:
>>>The term REALTOR® has come to connote competency, fairness, and high integrity resulting from adherence to a lofty ideal of moral conduct in business relations. No inducement of profit and no instruction from clients ever can justify departure from this ideal.
In the interpretation of this obligation, REALTORS® can take no safer guide than that which has been handed down through the centuries, embodied in the Golden Rule, “Whatsoever ye would that others should do to you, do ye even so to them.”<<<
Haaaaa ha ha ha ha……..
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February 21st, 2011 at 12:05 pm 83
@lost hope bear:
I was at many open houses in van west this week end and saw a shortage of buyers. Many houses without sold stickers which convinces me to beleive that there will be a crash in vancouver real estate, giv'er! MARCH 18 will have an affect on the market. I have been waiting it out for the last 5 years and am finally giving thanks!
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February 21st, 2011 at 12:06 pm 84
Still the average property tax bill on those condo's will only make the available for offshore investors.
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February 21st, 2011 at 12:29 pm 85
@oneangryslav2: Actually, Patriotz himself implicitly implies market psychology is what changes as well. He says able and *willing* to pay. "Willing" means to me that even if people could afford to buy they would not. Isn't that a change in psychology over what we see now?
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February 21st, 2011 at 12:30 pm 86
Watch Live……Christchurch Devastated, many trapped
http://www.abc.net.au/news/abcnews24/
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February 21st, 2011 at 1:18 pm 87
@lost hope bear:
I'm going to have to keep an eye on you, as you know I have been keeping an eye on the pimps for some time, and I must tell you your story doesn't add up.
It sounds like something Dave would make up, it's a bit infantile.
Why would a real bear be prowling open houses?
Why haven't you posted here in the last 5 years?
And you wanted to be the sheriff?
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February 21st, 2011 at 1:27 pm 88
Another day Another net 100
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February 21st, 2011 at 2:17 pm 89
OV marketing seems to be in full swing, teaser prices, crowded openings, hints at sell outs, and limited inventory remaining. Possibly it's true, possibly it's hype. Eyes wide open.
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February 21st, 2011 at 3:04 pm 90
@McLovin: Bingo. We have an orgy both of sales and new listings right now. This will continue until the 18th of March. The important thing is the growth of total inventory–THAT will be the post-March 18th hangover. So long as we keep accumulating inventory, things will be interesting.
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February 21st, 2011 at 10:19 pm 91
@Anonymous:
No, what I meant is that as the ownership rate increases the market runs out of people who are willing to buy. I didn't mean that people who were previously willing to buy change their minds (although they may become unable to buy as prices increase).
It's not until prices are down 20% or more that people get the message and start thinking that buying is a bad idea. Of course buying is a better idea at 20% off the top than at the top – people get it wrong both on the way up and on the way down.
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February 21st, 2011 at 11:08 pm 92
"Home prices hit post-bust lows in most big cities"
>> Home prices in a majority of major U.S. cities tracked by a private trade group have fallen to their lowest levels since the housing bubble burst<<
http://www.google.com/hostednews/ap/article/ALeqM…
Of course we can't draw a comparison, after all US does not have oceans, mountains,and Asians.
But it does have David Lereah, but then again we have RealtyRadio98, and The Vancouver Sun- Rennies Marketing Arm.
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February 21st, 2011 at 11:47 pm 93
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 encouage its citizens buying all sort of properties to establish a beachhead in future Canadian and Chinese alliance against American Imperial agression.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.
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February 22nd, 2011 at 1:20 am 94
@Extremely rich Van house owner.:
…..Oil price will only affect US and weaken its military and econiomic power,while ……..
Can someone translate that for me: I'm, afraod I don't speak moron.
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February 23rd, 2011 at 6:05 am 95
[...] at vancouvercondo.info February 21st, 2011 at 5:28 pm – “I don’t know why, but for some reason it doesn’t matter how intelligent, [...]
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February 23rd, 2011 at 10:13 am 96
New Capital Economics report out about the Canadian economy and the fallout of the housing bust which they assert is now inevitable.
http://bit.ly/erqHmc
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