Forecasts for 2012 housing market.

A very sensible forecast from Tsur Sommerville:

“We start off by saying I have no idea,” Somerville told the Georgia Straight in a phone interview. For him, forecasting is a risky business because “you’re wrong more often, even if you’re intelligent”.

An economist who earned his PhD from Harvard University, Somerville said that he prefers to evaluate what others have projected for the new year.

“The general trend seems to be that it’s going to be a slower market than 2011, and I think the combination of lingering economic unease and uncertainty is consistent with that,” the UBC academic explained. “The other thing is 2011—if you take away Richmond, the West Side [of Vancouver], and West Vancouver—was not some amazing prices-going-through-the-ceiling kind of year. In general for most places, things are going to look like 2011. Maybe a little bit slower.”

Asked about the biggest risk to the market, Somerville responded: “The economy, the economy, and the economy.”

Full article in the Georgia Straight.

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chilled
chilled
8 years ago

@Jim:

As academics, what was/is your parents position on immigration, foreign students and trade? Probably the same as academia in general, right?

Jim
Jim
8 years ago

@Annonymous

I grew up in Kerrisdale and Point Grey. My parents were teachers turned psychologists and university professors who made a solid middle class living. We are talking moderately well remunerated professionals here. They could afford to buy a house. Things started to surge pricewise in the early 90's, if I recall.

And those areas have been ruined, to a large degree. Ugly McMansions and immigrants who don't care to get to know their neighbours.

One of the most important aspects of a neighbourhood is community, and communities are in short supply in Vancouver.

Devore
Devore
8 years ago

@Troll:

REBGV benchmarks down 12% in 2011.

Good call.

It is, according to Dave. Well within the Flat Range(tm).

patriotz
8 years ago

@space889: "However the main point is how many people actually know/realize that’s the way things is?" People are living in a dream world with regard to every aspect of RE. Who's fault is that? Theirs. What are you singling out CMHC for? Are they trying to keep their terms a secret? There are people whose job it is to explain contractual obligations, they are called lawyers, and everyone buying RE should hire one. As I've said, CMHC is enough of a welfare scheme as it is, changing mortgage insurance so that the borrower has no obligation to repay would go beyond stupid to utterly insane. Mortgage insurance is not needed to buy RE. You can put up a sensible down payment (which I've always done) or try to get non-bank financing (which is scarce these days, I wonder why). Or… Read more »

0x13
0x13
8 years ago

Recently I had an informal talk with a friend who works at one of the big Canadian banks. I asked him if he noticed any changes in the mortgage business. He said it's still going strong. Interestingly though he also mentioned that he noticed an interesting phenomenon. Based on his day to day readings of a range of clients mortgages it seems individuals with mortgages about as high as $300k were actually making progress towards paying the principal. However if the mortgage was $600k or higher (most of the time this resulted from clients rolling in other kind of debt into their mortgage payments) the principal appears to have remained at the same level for the last 2-3 years. He noted that these $600k+ clients appear to be paying the principal over the years but after a while they ask… Read more »

CMHC says alls well
CMHC says alls well
8 years ago

http://www.vancouversun.com/business/CMHC+issues+

if they say so, it must be. We have high debt, but we have no problem as long as there is no problem – thats how I summed it up.

WhatProblem
WhatProblem
8 years ago

Chinese like Manhattan as well…At least the Chinese have a positive view of the future. http://www.scmp.com/portal/site/SCMP/menuitem.2af

ulsterman
8 years ago

@Annonymous: You are correct when you say the nice parts of Van have always been expensive. But they weren't always THIS expensive vs local incomes. A few examples from memory from when i lived over there back in 2001: (1) A ground floor studio for sale on Maple St just north of Cornwall – sold for about 130k. (2) The odd shaped brown (wood styling) house on Arbutus overlooking the basketball courts at Kits Beach – listed for 999k. (3) The house that i was evicted from (1954 West 11th Ave – nr Maple St) was sold to a developer after about 9 months on the market for mid 6's. It was a large house on a big lot that had been divided into 5 suites. The rent was cheap – i think total income was only about 3,500. It's… Read more »

Anonymous
Anonymous
8 years ago

@Annonymous: ….For a few months in the Summer I challenge anyone to pick nicer places to live anywhere in the world…..

Psssst: everywhere is nice in the summer. That's why folks everywhere like summer.

I think you should upgrade from a bicycle so that you can see a few more places. Good grief.

jesse
8 years ago

@DEFAULT NAMEe: I was off on the price range but nailed the "rich Asian" thing. The US economy continued to improve but is a slow improvement. I missed the interest rate drop. Good thing my bonds didn't 😉

I'll have to think hard about 2012. Greece defaulting is all I am predicting right now…

chilled
chilled
8 years ago

@DEFAULT NAMEe:

"How did everybody do on their predictions for 2011? Here’s the original thread:"

I predicted RealPaul would be appointed to either Governor of The Bank of Canada or Minister of Immigration or Minister of Labour.

Fortunately I was wrong.

Troll
Troll
8 years ago

@DEFAULT NAMEe: BPOM said

REBGV benchmarks down 12% in 2011.

Good call.

Stan
Stan
8 years ago

@DEFAULT NAMEe: "But you might as well argue over who the best actor is."

Alek Baldwin obviously.

Victoria
Victoria
8 years ago

My husband would move to Barcelona in a heartbeat and I would move to Dublin.

It all depends what you like. Big cities, little cities. Snow, no Snow. Warm climate, skiing. LA or New York. Small Towns, Mountains and Beaches. Shopping, Restaurants, Fashion, Art. Outdoors, camping, bike riding. Big city pulse – small town calm.

We are all different.

N
N
8 years ago

@Annonymous:

"Uh Oh…American market looks to be improving."

Improvements in the US RE market will work towards removing the pressure that holds interest rates down south of the border (and hence all over the world). Rising interest rates will not be good for the Canadian RE market.

VMD
VMD
8 years ago

looks like another light trading day

from Larry's site:

Vancouver All Areas*

New Listings -35

Price Changes – 12

Sold Listings – 54

*Attached & Detached – Date: 12/29/2011 Time: 16:29 Pacific YatterMatters.com

(same time last year we were seeing approx 77 sales and 51 listings)

N
N
8 years ago

@Ouch that hurts:

"I believe rent is 2100ish. Still no bids or showings on the 699 price point, so my guess is there will be a reduction coming in spring."

Thanks, OTH.

When there are no more fools left, prices for places like this are going to have to go back 100 times rent. I find the case of condos particularly mind-boggling because, while a person can argue that, if you buy a SFH, the lot value will eventually exceed the purchase price (even if that eventually is 100 years the future), condos are inherently a depreciating asset, like a car or a refrigerator, it take a special kind of crazy to pay a million bucks for a depreciating asset that brings in 2100/month.

Victoria
Victoria
8 years ago

Anon 26,

It is subjective. I live in Victoria – I don't like it and I know people who love it. I lived in Paris 15 years and really miss it. My husband misses New York and we both miss London.

I know people who moved back to Winnipeg because they miss it.

It depends what you like. I lived in Leaside in Toronto and loved it. Great shopping, great restaurants. Not as amazing as Paris though.

My husband would move to Barcelona heartbeat and I would move to Dublin. It all depends.

Anonymouse
Anonymouse
8 years ago

@Not much of a name…:

"But based on that logic, the majority of the year there are other places that are nicer to live"

It's futile to argue about which places are nicer or better than Vancouver as it's totally subjective. Somebody who doesn't ski might not give a damn about the mountains, whereas others may not like the beach. Each to their own. Suffice to say that many people like it here. But you might as well argue over who the best actor is.

Annonymous
Annonymous
8 years ago

Well you could live in Mount Pearl,NFLD…But there's no Summer at all..;-)
http://homes.point2.com/CA/Newfoundland/Greater-S

Not much of a name..
Not much of a name..
8 years ago

@Annonymous:

For a few months in the Summer I challenge anyone to pick nicer places to live anywhere in the world.

But based on that logic, the majority of the year there are other places that are nicer to live…I bet many at a discount compared to Vancouver. Just sayin'…

Anonymouse
Anonymouse
8 years ago

@asdf:

The cost structure for the insurance is listed on the CMHC website. It's usually added onto the amount borrowed.

Anonymouse
Anonymouse
8 years ago

How did everybody do on their predictions for 2011? Here's the original thread:

http://vancouvercondo.info/2011/01/2011-please-te

asdf
asdf
8 years ago

A couple questions about CMCH insurance:

1. How much does it cost as a percentage of the total mortgage?

2. Is it payable up front when you buy, or in installments over the life of the mortgage?

Thanks in advance!

space889
space889
8 years ago

@patriotz: That's the technical correct way of how CMHC insurance operates. However the main point is how many people actually know/realize that's the way things is? Taking REIN for example, the 5% down CMHC back mortgage is one, if not the preferred way of buying investment properties because it allows people to buy with very little money down. How many of those REIN members who buys 1 property every 1 or 2 months actual realize that if things go south and they get foreclosed on, they are actually liable for all the shortfalls? Same with all those newly minted condo and TH first time buyers who paid 5% to 10% down? Lastly, the way CMHC insurance operates where the premium payer is actually responsible for any shortfall CMHC suffers to me means that it is really not an insurance product.… Read more »