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Friday Free-for-all!

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158 Comments

You made it to the end of another week! Lets do our regular end of the week news round up and open topic discussion thread for the weekend, here are a few recent links to kick off the chat!

–Closer to paid off means more expensive to escape?
–Low income and no savings? Vancity says buy a house!
–Election to kill spring rate hike?
–Anecdote on retirement planning through real estate
–Shaw lays off 500, 90 in Vancouver
–Hot Asian Money will prevent Irving California market collapse (2007)
–8 Shocks about to hit Global markets
–Catalytic Converter thefts rise with precious metal prices
–A new collapse for US housing
–Portugal may need US $99 Billion bail out

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

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Westside Hag

Most people around here would rather have their houses be "worth" less money than have their neighbourhoods sterilized by foreign money.

There are some people who are delighted to be cashing out, but many of us are raising families, want to know our neighbours and have a half decent sense of community.

Not to mention that some people have to sell b/c they can't afford the constantly escalating property taxes.

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No Money Down

@Best place on meth:

I'll get photo, just had my crappy old phone with me. I agree it's really sad.

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patriotz

@Best place on meth:

That of course is exactly what happened in the US. Only a few months after Time Magazine's famous cover in 2005, prices started falling in San Diego. Not because sentiment had turned – that remained bullish right into 2007, or because of foreclosures – they were still well below historical norms – but because it is simply inevitable that if price/rent and price/income are above sensible levels the supply of housing will outrun the supply of capital to buy it. There is only so much dumb money.

That is the root cause of all RE busts, everywhere.

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Devore

@jesse: Are you saying Vancouver is a provincial city in a backwards country?

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pricedoutfornow

@Best place on meth: "They will only stop when they are forced to ie their numbers have greatly thinned and they can't borrow another nickel." I'm seeing this already in BC areas outside of Vancouver (Okanagan, for example). I know about half a dozen people who are hugely maxed out on mortgage credit there, though I'm sure a few of them would LOVE to keep buying houses (because life is a game of monopoly, don't you know?), they're completely maxed out. There's no more credit left to be had. And things are starting to get tight with their rental properties (repairs coming up, tenants moving out etc). Since the rates went up last year, there's less cash flow (not that there was much to begin with!), combined with a lot of cheap rentals flooding the market (anyone want to rent… Read more »

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Anonymous

@Best place on meth:

Hope your right, looking forward to seeing the April stats/sales without the pre Mar 18th effect.

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Best place on meth

@Anonymous:

>>>Buyers will only stop when psychology shifts<<<

Cart before the horse. It's the act of buyers stopping that causes the psychology shift.

We're now there, not because buyers have smartened up or decided enough is enough. God no, Vancouverites are the dumbest people on earth and can never get enough. They will only stop when they are forced to ie their numbers have greatly thinned and they can't borrow another nickel.

With years of future demand pulled forward, ownership at an all time high and mortgage rules tightened we're now at that point.

All that's left is turning a slow bust into a fast and brutal one by higher interest rates.

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bubbly

@Best place on meth: "It’s actually too late for a buyers strike as we’re now out of buyers."

If we are really (almost) out of buyers, then now is the BEST time for a buyers strike, because it's efect would be the strongest in an already vulnerable market.

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Anonymous

@fufu: ….is that called progres or just sad thing?…..

Ya, it's amazing how much, 'progress' has ruined this damn city!

I finally took a walk around 'value-less' village on False Creek today. I'm amazed at all the concrete and paving stone. Do ya think they maybe missed Joni's point? What an eyesore!

.

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jesse

@No Money Down: The story of empty houses is nothing new to Vancouver, only now it seems to be spreading. I was visiting Penang Malaysia a few years ago and went on a tour of some of the more affluent parts of the city given by a local resident. He knew the areas well as he is in the construction business and interfaces with most of the more affluent businesspeople on the island. I was surprised to see how many of these upscale places (basically the equivalent of West Vancouver mansions) were vacant or inhabited only part of the year. Most of the owners were either locals who had business outside of the city/country or foreigners who have manufacturing/testing businesses locally. Most of the owners were from Taiwan, HK, Korea, or Japan. These places would sell for around RM$5MM ($1.5MM)… Read more »

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Anonymous

@Best place on meth:

I wouldn't be so sure about that. Until people stop believing that these prices are sustainable and are in fact dangerous they will keep gorging on debt. Buyers will only stop when psychology shifts. For many of us on this forum, it's already happend. We're still in the minority as noted by the office and family anecdotes written here daily about being picked on for renting and "throwing your money away".

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Best place on meth

@Anonymous:

It's actually too late for a buyers strike as we're now out of buyers.

Should have done this 3 or 4 years ago.

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Anonymous

Buyer's strike, what a novel idea. Now who has the social media know how to get this thing moving in Canada?

http://www.greaterfool.ca/2011/03/27/strike/

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Girlbear

@No Money Down: That's one of the saddest posts I have seen. That man is older (he said lived there for 60 years) so maybe change is hard for him. Saying that, I am likely less than half his age and I feel the same way…

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paulb.

@No Money Down:

Poor soul with his 2+ Million for a tear down.

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Best place on meth

@No Money Down:

If you get a chance, take a photo of that sign.

This is something that should be passed around to show what's become of Vancouver.

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fufu

"There is no community here anymore. I am moving to small town on the west coast of Vancouver Island to find the community that I used to know here.”

is that called progres or just sad thing?

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No Money Down

On West 1st in Point Grey about a block from Jericho beach (3800 block) there is an old bungalow with a new SOLD sign. Attached to the sign is a note from Bob, the owner. To paraphrase:

"I owe the neighborhood an explanation. I've lived here for 60 years. All the old bungalows are being knocked down and giant houses built. I don't know anyone in these new houses, and I don't even see people living in them. There is no community here anymore. I am moving to small town on the west coast of Vancouver Island to find the community that I used to know here."

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patriotz

@jesse:

The question is more how someone on a median income (in China) can hope to save for a median house.

IMHO those terms don't mean too much in a country which had an orthodox Communist economy a generation ago and which today has huge discontinuities in the labour and RE markets (both for ownership and rental). I think the majority of the population still lives in out-of-market housing. Try googling "housing tenure china".

I don't think anything other than price/rent for a given property would be very meaningful.

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jesse

@chip: "buyers have to put down at least 50%"

When I refer to the "secondary" market, I'm referring to loans from individuals and person-person lending. The question is more how someone on a median income can hope to save for a median house. With current valuations I don't see how the middle class can afford them without borrowing or investment by another party. For example, if their families chip in, affordability drastically improves.

@fixie, when I state "does not compute" what I mean is that if property is unaffordable based on incomes, people need the cash upfront to buy. But if borrowing is restricted, people cannot use their future high earnings to pay for the property. They either have massive savings or are getting money some other way. Both are effectively borrowing.

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UnagiDon

Two great stories from NPR. (Listen to the radio story — it is not the same as the text article.) http://www.npr.org/2011/03/27/134623259/pursuing-… "Psychological change… a lot of young people are turned off to ownership… young people just aren't as eager as previous generations to rush into buying a house… some economists say that individuals and the economy as a whole would be better off if we had more renters… we don't really need an ownership society as much as we need an innovation society, one where workers are flexible and willing to move wherever there is a job opportunity. So you're saying owning a home could slow you down? … If you're a renter, it's easier to pick up and move if you find a better job, or a promotion opens up in another city. In the end, that's the American… Read more »

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Best place on meth

I've added a category in the forum which will be the weekly stats from Agent Will.

It looks a bit fuzzy so if anyone knows a clearer way to post other than the screenshot I took, please let me know or feel free to add weekly numbers yourself.

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chip

@jesse:

"There is a large secondary RE investment market in China so the mortgage stats aren’t quite comparable."

For a second property China buyers have to put down at least 50%. In Beijing, people can't buy a third property even if they pay all cash.

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Disbelief

I was talking with my friend yesterday. He wants to get into a house of his own and states that there are Japanese coming into the Vancouver market and will prop up the sales. I am in Arizona and have been for months so am a little out of touch with whats going on in Vancouver. Here in Phoenix 26th and 27th are Canadian days at the Robson(housing development) where they have Timmmy Ho's and Canadian beer and they advertise on the radio and the TV.

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fixie guy

#131 jesse Says:" Does not compute!"

Only if you choose to perversely reason from a position of equivalence between the current economic conditions in China and Canada.

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