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Friday Free-for-all!

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It’s Friday again and that means it’s time for our regular end of the week news roundup and open topic discussion thread! Here are a few recent links to kick off the chat:

–Property investor, definitely keep your day job
–Mortgage pullback hints of housing crisis
–Ottawa leans on banks to tighten lending
–Canadas housing market: look out below
–Flaherty ‘concerned’ over mortgage lending
–Canada Gov exposure to mortgage lending raising alarm
–Is this what Januarys housing report looks like?
–Underused labour and pending housing bubble a problem for Canada
–US 30 year locked in mortgages hit new record low
–China limits foreigners housing mortgages

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

On a side note we’re still beta testing VancouverPeak.com as a forum replacement. It will likely replace the old VCI forum soon, so you if you’re a forum user here you may want to take a look at how it works over there. That site is registration by invite only, but if you registered for an account here before the end of January you’re probably already registered there.

VancouverPeak.com has a lot of functionality that is lacking in the current forums including uploading of txt, xls and other file formats. In addition to the forums, you can create discussion groups and new forums there and edit documents in each group.. this is similar to a wiki functionality, but with a more user friendly editing interface.

Try it out, feedback is welcome.

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Guy Smiley

Press release is out now too and is repeated on the statistics page. I understand the problems using the median and mean, but i miss them already.

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Guy Smiley

Please forgive my ignorance, but I was just looking at the HPI figures from MLS on the REBGV website, and i'm totally confused. What exactly do the 1 month and 6 month averages a measure of? They are listed as 11.3 and 36.2 for detached in the gva in this report. And 1, 3, and 5 year measures at -0.1, -0.2 and -0.3 respectively. These don't seem to jive with the explanation of HPI formulas.

Has HPI always been registered trademark?

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Anonymous

#141,

who the f*cked care a post from halifax!

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jesse

Rich Toscano aka piggington: A Lost Decade-Plus for San Diego Home Prices

While it was an interesting ride, point-to-point, real San Diego home prices have gone nowhere for 11 years.

VancouverIsDifferentVancouverIsDifferent

VancouverIsDifferentVancouverIsDifferent

VancouverIsDifferentVancouverIsDifferent

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scullboy

Greetings from Halifax, Looks like I won't be on the East Coast much longer. I was offered an excellent job in Toronto and I start on Monday. Toronto isn't my favorite city by a long shot, but it's an excellent job and let's face it, you can put up with a lot if you're making bank. 🙂 You know, I've rented and owned in a few different cities now. I get why people buy, I really do but the last 6 years have taught me a really important lesson: In turbulent times, only the flexible will survive. I'm gen X and this is exactly the opposite wisdom my Boomer parents tried to instill. I think I only really earned their respect when I bought a home in Toronto, even though I'd had quite a succesful career before then. Times became… Read more »

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Anonymous

then you should have moved to calgary instead becoming an armchair economist in ottawa.

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patriotz

@Patiently Waiting:

RE prices in Calgary peaked in 2007, have fallen over 10% since then, and continue to fall.

Similar schemes were found during the bubble in the US. What you end up with is bankrupt "homeowners", and the sponsoring governments holding debts that they cannot collect.

The only winners are the RE developers who get to sell crappy housing without having to drop prices enough to get buyers on the open market.

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paulb.

@Seller:

Over asking by >150k! Was listed at 1.3M. Well priced homes at this price point will sell quickly… even in the over supplied Westside Mkt. feel free to email me if I could be of any help. I can forward you the sales history and listing sheet if you like.

paulboenisch@gmail.com

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Best place on meth

@Seller:

3071 west king edward sold for 1.465, asking 1.299, 9 days on market.

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pricedoutfornow

@Patiently Waiting:

I know a guy who bought there recently. The unit he bought is old and rundown. So far he's had to spend a lot of money on repairs and maintenance (new hot water tank, for example). Think he may be suffering from buyers remorse. It's been less than 6 months.

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Seller

Happy Sunday! Curious to know what did 3071 west king edward just sell for? I have a similiar home and thinking it time to list!

Thanks for any answers!

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patriotz

@Raging Ranter:

"Without knowing the prices of the houses and the rents being charged, I can’t answer your question."

I told you that there is a bubble, which means that price/rent is excessive. That's all you have to know.

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YLTN @ Work

CNY spending not looking so good in the motherland:

http://www.bloomberg.com/news/2012-02-05/china-s-…

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Patiently Waiting

Shared equity programs are the latest scheme for affordable housing: "In Calgary, however, those earning between $53,000 and $80,000 can apply to the city-run Attainable Housing Calgary Corp. for a free downpayment, said spokeswoman Tara Cooney. Homebuyers who qualify for a mortgage and have a $2,000 downpayment would receive, in one example, a five per cent downpayment of $11,000 as a forgivable loan for a $220,000 home in an Attainable Housing complex, leaving them with a $207,000 mortgage. When they sell, they would forfeit one-quarter to three-quarters of any earned equity to Attainable Homes, said Cooney. For instance, if they sold after four years and the home rose to $254,700, the couple would keep 75 per cent of the $45,700 equity, or $34,275. The remaining 25 per cent of the equity would remain with Attainable Homes, which uses it to… Read more »

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Anonymous

@patriotz:

Which group of households is wealthier than before, the owners or the renters?

Trick question…nobody is wealthier at the time of the sale. It just juggles the numbers on the balance sheet.

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Raging Ranter

@ Patriotz,

Without knowing the prices of the houses and the rents being charged, I can't answer your question. Anyway, I understand the point you made in your previous posts, and I'm not arguing with it. Changing prices don't mean any wealth has changed hands. Got it. Wealth doesn't transfer until transactions take place. Got it.

You remind me of the wife of a friend of mine. I can be in complete and total agreement with her on every single point, and she'll still find a way to turn it into an argument. 🙂 This horse has been beaten well past death.

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patriotz

@Raging Ranter:

Suppose there's a small town with 100 owning households and 100 renting households. There's a bubble. 10 owning households decide to sell. 10 renting households buy their houses. The 10 households selling become renters.

Which group of households is wealthier than before, the owners or the renters?

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Raging Ranter

@ Patriotz, I agree. No point splitting hairs. Of course no wealth transfer takes place without a sale. No transaction, no transfer. When I say rising/falling prices represent a wealth transfer, I am assuming that numerous transactions take place. Regardless of price, there will be buying and selling, renting and letting. It is through those transactions that wealth is transferred. But it is the price relative to prior periods that allows us to determine which way the wealth is flowing.

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AG Sage

Toronto prices, especially Condo medians, look like they are inexorably sliding downward.

http://worldhousingbubble.blogspot.com/2012/02/to…

It's only two months of decline in the detached, but it's a lot of data and a pretty low noise line… But hey, F C or whoever, might try to go for the save. One never knows.

(I don't have medians any farther back than the chart, just fyi)

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jesse

@danm: Wasn't integration with mainland China one of the reasons for exodus of the early 1990s, in part to Vancouver? Sounds like "the barbarians are at the gates" but instead of wearing Chairman Mao issue fatigues they wear Gucci and Prada.

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jesse

@patriotz: That was hammered home recently talking to someone moving stateside. Buying REO is cheaper but can take months and is no sure thing it completes. If you're renting this is less a concern.

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patriotz

@Raging Ranter: "Changes in price do not represent an increase in wealth. They represent a transfer of wealth from one group to another." No. Changes in price in themselves do not represent a transfer of wealth between owners and non-owners. It's sales that represent a transfer of wealth between buyers and sellers. That is, a sale of an asset for more than fundamental value (i.e. rental value for RE) is a transfer of wealth from the buyer to the seller, and a sale for less than fundamental value is a transfer from the seller to the buyer. Also, changes in rents represent a transfer in wealth between owners and renters, because rent is the price of shelter and renters buy shelter from owners. But a change in price does not represent a transfer of wealth without a sale. Without a… Read more »

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Raging Ranter

@Patrioz:

You are correct. I was trying to make the point that rising home prices aren't "good" any more than falling home prices are "bad". Changes in price do not represent an increase in wealth. They represent a transfer of wealth from one group to another. There is therefore nothing inherently ethical or economically beneficial about rising home prices in the long term. It only feels as though there is in the short-to-medium term.

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patriotz

@Raging Ranter:

"As a non-owner who plans to buy someday, I will benefit from falling home prices, just as surely as you benefited from rising prices."

Homeowners don't benefit from rising prices unless they SELL. Believing otherwise is the fallacy that leads to the home ATM.

Non-owners don't benefit from falling prices unless they buy. But logistically, it's a lot easier for a non-owner to get in at the right time than for an owner to get out at the right time.

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danm

@118 – at least my mandarin is improving Says:

At least the Hong Kongers don’t have to worry about being accused of racism.

It's very sad and tragic to watch how far Hong Kong has come in the last 9 years since SARs only for their landlord China to take it away from them. The time frame to watch is the run-up to 2017. 30 year mortgages may be unobtainable due to all leases ending when the 2047 handover occurs.

Hong Kong can't remain as it is now. They have to live together with the mainlanders they despise or emigrate. If they choose to leave, Vancouver may be a possible destination as it was in 1997. If that's the case any housing correction could be an excellent buying opportunity.

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