Friday free-for-all!

it’s the end of the week and that means its time for our regular weekend news round-up and open topic discussion thread. Here are a few recent links to kick things off:

Bubble talk reignites debate on house prices
Collapsed US housing bubble doesn’t destroy demand
Vancouver housing market set to underperform?
-BC prices set to rise?
Pizza delivery guy with real estate advice
The HST referendum numbers game

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

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fixue guy
fixue guy
9 years ago

@40 chip: Here's the other half of the equation, why the government is involved:

http://www.propublica.org/thetrade/item/in-u.s.-m

jesse
9 years ago

@chip: "It’s the rate of increase, not the current valuation that matters."

We'll have to disagree on the sustainability of using relative pricing to determine market value.

Best place on meth
Best place on meth
9 years ago

@604serf:

>>>People should be more scared of LAMB (Local Asian Money that’s BORROWED)…<<<

I'm also somewhat concerned with SPAM (Stolen & Pilfered Asian Money) that's finding it's way into Vancouver by the billions.

I don't like money launderers, especially foreign ones invading my city.

jesse
9 years ago

"And the best part; they wont notice the spelling error"

LOL you're awesome.

Devore
Devore
9 years ago

@Anonymouse:

Isn’t moi of 6 still technically a sellers market?

Traditionally yes, although patriotz will dispute the term "seller's market", but that is roughly when houses sit long enough for sellers start getting nervous.

Just pointing out I'd want to see a trend towards high MOI, at least a full month.

604serf
604serf
9 years ago

And the best part; they wont notice the spelling error

604serf
604serf
9 years ago

@rp1

BACON is coming soon. After the crash it'll stand for

Broke Ass Chinese that Owe Money!!!

rp1
rp1
9 years ago

@604serf: "People all over are still scared of HAM."

I'm looking forward to the bacon jokes if they get fried.

rp1
rp1
9 years ago

#42 @Girlbear: This guy made a pretty good case for the tipping point being a list/sell ratio over 2.1. It held true for Mission and Abbotsford.

http://americacanada.blogspot.com/2010/05/listing

604serf
604serf
9 years ago

Everyone is hilarious. People all over are still scared of HAM.

People should be more scared of LAMB (Local Asian Money that's BORROWED)….

That's what's propping this market up. The local Asians still maintain the cultural value of home ownership as defining success. Unfortunately, being in Canada so long, they have "Canadian" net worths….accumulated over years of frugal living.

Thing is, the first generation kids will spend it all…hahaha..suckers

Patiently Waiting
Patiently Waiting
9 years ago

@Van MD: I just love looking at the pricing history for condos over the last few years. No matter how much free credit is handed out, they can't stay above an average price of $500K, and its always falling back to about $450K.

This means nobody has made a dirty dime off a condo's appreciation since about 2006 (once you count inflation, transaction costs, etc.). And yet, Vancouverites are blissfully unaware of this fact.

So that is prime trolling material for any gathering of bulls.

patriotz
9 years ago

@Anonymouse:

Isn’t moi of 6 still technically a sellers market?

"Technically" there is no such thing as a "sellers" (or "buyers") market. The terms are subjective.

Van MD
Van MD
9 years ago

Been looking at paulb's website http://www.laurenandpaul.ca/MarketTrends.ubr in order to gather some info to "troll" the mainland chinese forum which is frequented by realtors/pumpers.

I especially like the juxtaposition of the median & average sales price (and the 3-week trend of falling median prices). I think it's no accident that other realtors (eg http://agentwill.com/weekly-stats ) only post the average sales price chart.

As for my personal living situation, I'm proud to say that despite family/colleague influences to buy, at 6pm today I'm signing a 1 year lease at a 23rd floor 5 year old sub-penthouse in Collingwood with gorgeous view of north shore mountains, 1375/month, 5 minutes drive to the clinic where I work : ) In Vancouvercondoinfo (and Garth) I trust.

Anonymouse
Anonymouse
9 years ago

@Devore:

Isn't moi of 6 still technically a sellers market?

Devore
Devore
9 years ago

@Girlbear: Sustained, 6 MOI means sellers will be getting anxious because their houses are not selling as quickly as expected, some will start to drop prices (have to sell) others will hold firm and let their listing expire. Buyers see building inventory, can be more picky, and can obtain larger discounts off asking price.

A 6 MOI at a point in time doesn't mean anything, weekly stats can be tipped easily either way by one outlier day.

Best place on meth
Best place on meth
9 years ago

@Girlbear:

This weeks stats are distorted by the 4 day week so that MOI is meaningless.

Girlbear
Girlbear
9 years ago

Agent Will stats showing 6 months of inventory for attached. Isn't that the tipping point?

Keeping An Eye On Th
Keeping An Eye On Th
9 years ago

@McLovin:

"That said, the length and strength of this boom has continues to surprise me."

Government intervention- monetary policy- real interest rates at less than zero

Government intervention- huge deficit spending on mega projects

Government induced private spending encouraging Canadians to leverage debts, to stimulate the sales of 2 x 4’s and stainless steel appliances, and turning basic shelter into a casino chip.

I think the length and depth of the bust, will continue to surprise you as well.

chip
chip
9 years ago

I'm hearing a lot about a new book called Reckless Endangerment by by business reporter Gretchen Morgenson. It highlights the massive govt involvement in the US property market. The criminal who led Fannie at the time, Jim Johnson — he later went on to help Obama vet his VP prospects — took home $100 million after manipulating earnings and inflating his bonus. No jail time for him because Fannie was exempt from normal securities oversight. In this review, the following jumped out at me: "By 2003, the government was involved in financing almost half — $3.4 trillion — of the home-loan market. Not coincidentally, by the summer of 2005, almost 40 percent of new subprime loans were for amounts larger than the value of the properties." http://www.washingtonpost.com/opinions/burning-do… The clowns at Worldcom, Exxon and other private firms all did serious time for… Read more »

McLovin
McLovin
9 years ago

As I eat my Eggo and drink my coffee this am (with Dora the Explorer softly playing in the other room) I can't help but feel very sorry for the groups of disgruntled would be buyers who are are finally throwing in the towels and buying. I had a conversation last night with a very astute lady who has been in the market for a 30 yrs + and saw 82 and 93 and even she is saying, "How can you be so sure its NOT different this time?" I can only give her facts and figures but of course I can't see the future. I must say, my argument has lost some crediability as I have been saying the same thing for a long time and other than a few months in 2008 I have been wrong. I don't… Read more »

chip
chip
9 years ago

@jesse:

"Funny, then, how this capital wasn’t bidding prices to current valuations, say, 5 years ago."

Huh? The market was flying in 2006. It's the rate of increase, not the current valuation that matters.

Best place on meth
Best place on meth
9 years ago

@painted turtle:

Whole teams of construction workers from China you say?

http://www.telegraph.co.uk/news/worldnews/asia/ch

jesse
9 years ago

@painted turtle: "people on a short term visa"

There are data on temporary migration here (PDF)

Sure maybe students have parents buy property to live in while studying but they either sell/rent on exit or become recast as immigrants. First quarter 2011 non-permanemt residents increased at the slowest rate since 2005. Immigration landings were at the lowest level in 20 years.

One quarter does not a trend make but that's still a significant shortfall to fill all those newly-built units coming online. I think recent rental market weakness, both residential and commercial, and anaemic migration numbers are no coincidence.

Ralph
Ralph
9 years ago

I would have to agree with Bank of Canada Governor Mark Carney when he stated (last fall) "While asset prices can rise or fall, debt endures". http://www.theglobeandmail.com/report-on-business… Japan had a historic credit bubble which burst around 1990. The following is a link to a long term chart of the Nikkei 225. Since 1990 it is down by approximately 75%. http://finance.yahoo.com/q/bc?s=%5EN225&t=my&amp;… The following quote is taken from an article in the New York Times which was written on Oct. 16, 2010: "OSAKA, Japan — Like many members of Japan’s middle class, Masato Y. enjoyed a level of affluence two decades ago that was the envy of the world. Masato, a small-business owner, bought a $500,000 condominium, vacationed in Hawaii and drove a late-model Mercedes. But his living standards slowly crumbled along with Japan’s overall economy. First, he was forced to reduce… Read more »

painted turtle
painted turtle
9 years ago

21% of immigrants are from China, but what about people on a short term visa?

For example, the number of Asian students seems to be increasing drastically at UBC.

I also remember seeing whole teams of construction workers from China, on short contract.