Friday Free-for-all!

It’s Friday!  Take off your pants and do the happy dance!

Agh! No, wait!  Metaphorically.  Please sir, put your pants back on, this is a family restaurant.

Anyways, it IS the end of the week and do you know what that means? It’s time for another end-of-the-week news round-up and open topic discussion thread.  A little thing we like to refer to as the Friday Free-for-all!  Here are a few recent links to kick off the chat:

Canada prices up, Vancouver falls again
Inventory graph (March 29th 2012)
The boomer trigger
New budget slashes $5.2 billion
Ottawa to toughen CMHC oversight
This rant brought to you by Gordholio
TD: don’t worry about the banks
Banks tighten condo lending on bubble fears
The 3-inch condo is here
Vancouver seeks more market housing
Storm clouds form over Vancouver market

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

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george
Guest
george
“We are about to find out that economics and finance has a far bigger impact on your life than politics, and if you don’t believe me let me finish with a very clear declaration, and hold me to this, come back at me years in the future. The sovereign debt problems along with the costs of an aging population are going to revamp society in the most profound way, and the part that worries me, that includes violent social unrest, and those who don’t understand it are just going to be road kill along the way.” Michael Campbell (the brother of former B.C. Premier Gordon Campbell) made the above statement on his “Money Talks” radio show last Saturday on radio station CKNW in Vancouver, B.C. If anyone wishes to listen to these words for themselves click on the following link… Read more »
patriotz
Member

@george:
This jackass has just discovered that our debt-based economy is a house of cards after having having pumped the RE bubble for the last decade?

Totally shameless. And still his newfound doomsaying doesn’t include being openly bearish on RE.

blueskies
Guest
blueskies

scary words…….

“engineered soft landing”

…….a lot of people will be reaching
for the Charmin

yvr2zrh
Member
A thought about the dynamics of a growing inventory. As we go into the end of March with a record seasonal inventory level, I thought it would interesting to share a thought on how the inventory levels will progress over the next 6 months. These periods are significant as it is seasonally when we get some of the higher listing volumes while sales typically are strong then taper into the summer. The higher inventory levels get, the harder it is to grow them. Inventory seems to have a contant rate of expiration/terminations. This rate is approx 2.5% of the inventory per week. There are also 2-3 major expiration days where listing contracts tend to end. This is September 30 and December 31. As the 2.5% expiration rate stays constant, we need to have weaker and weaker sale/list rates and higher… Read more »
Dave
Member

@george:

Stop worrying about what talking heads say. It’s always worth hearing an alternative viewpoint and considering it, but take comments like that for what they are.

Fear mongering has become a cottage industry since 2008.

It the battle between Ratings and Reality, Reality will win out every time.

Dave
Member

Here’s another Reality… the crash didn’t come. Here we are almost four years after the worst financial crisis in a century and things are ticking along just fine.

Higher inventory numbers are not going to portend a crash. Rather, the higher inventory numbers that we are seeing are just the market looking to find a balance. It suggests that prices are a little rich right now and may adjust downwards.

The only thing that is going to cause a crash at this point are drastically higher interest rates or another financial meltdown. Both are unlikely.

Anonymous
Guest
Anonymous

@Dave:
Hit those bears right on their balls;Chinese money and National power is invincible.

Jersey Boys
Guest
Jersey Boys

Dave,
what is your take on the current turmoil in secondary home markets like whistler/okanagan? Could we look at them to be as isolated markets that they are not affecting the rest of the market for primary residence?

registered
Member
registered

6 Dave Says:“Here’s another Reality… ..things are ticking along just fine.”

Emergency interest rates, unsustainable, anything but ‘fine’.

“Higher inventory numbers are not going to portend a crash….It suggests that prices are a little rich right now and may adjust downwards.”

Trust me?

“The only thing that is going to cause a crash at this point are drastically higher interest rates or another financial meltdown. Both are unlikely.”

Just like the US, where it wasn’t higher rates or a financial meltdown? You do understand it was toxic assets tied to housing that caused the meltdown, right?

Dave
Member

@Jersey Boys:

I think markets have a level of connectivity between. I don’t think the primary and secondary markets are completely isolated from one another. The secondary market is definitely suffering and it’s pulling the primary market down in areas when it has a larger component (e.g. Okanagan).

People just aren’t buying second homes. There might be lots of reasons for that but I think it’s mostly a market confidence thing. If the economy is doing well and people have increasing wealth, then they start to think about vacation homes. We aren’t back at that point again.

Dave
Member
@fixie guy: Low rates aren’t sustainable? This is not unprecedented in economic history. My position isn’t really that contentious. Let’s remember, trillions of dollars agree with me, not you. Let’s assume my premise of rates remaining low is true and we don’t have another economic meltdown… What could possibly cause the market to crash? In the US it was rising rates and rising gas prices that eventually exposed the low quality debt. The difference here was that we didn’t have the subprime lending problem. I would also argue that our housing markets and mixes are quite different. The US housing crash was really a Florida, Nevada, Arizona and California event. The markets that crashed had large inventory levels in areas that are relatively easy to build and expand product. That’s not the case for Canadian where we have a large… Read more »
logic
Guest
logic

Dave, so you are suggesting Van will have a Seattle style correction.

Fine by me, price have dropped there significantly.

Dave
Member
@logic: Not at all. I suggested that one can’t make a comparison between the US housing crash and the Vancouver market. If you wanted to do that you would have to start by using Seattle or New York as a comparative and build a case from there. Such a case would have to include subprime lending, which was still present in Seattle. You would have to consider that Vancouver has one freeway versus the multi-level freeways that run right through Seattle’s downtown. I’m not making the case because I don’t think it’s really there. I’m just helping Fixie Guy make it. I content that the Vancouver market is flat and that prices are not going to deviate significantly from where there are at present. Whilst I predicated a flat market recovery in 2008, I did not anticipate prices to sustain… Read more »
Dave
Member

Hey Pope, how about that exemption on foreclosing my name?

I am polite and cordial, my posts are interesting, and I have a terrific track record.

As to the rest of you voting down… it’s bad karma. Considering divergent opinions is an important thing. Worst case, you walk away with a more informed opinion.

You might not like me and what I believe, but let’s be honest… I am worth listening to. I have more access to this industry than any of you posting here.

Trust me on this.

patriotz
Member

@Dave:
“Let’s assume my premise of rates remaining low is true and we don’t have another economic meltdown… What could possibly cause the market to crash? ”

Specuvestors selling because price appreciation has ended and they can only cover 1/2 of their expenses from rent, even with historically low interest rates?

Plus exhaustion of the new buyer pool?

Just maybe?

Anonymous
Guest
Anonymous

@Dave: …People just aren’t buying second homes…..

But I thought that the world was full of rich people that were buying second homes in Vancouver?

Not much of a name...
Member
Not much of a name...

@Dave: You forgot to add…

I’m sexy and I know it…

jesse
Member

@Dave: “There might be lots of reasons for that but I think it’s mostly a market confidence thing.”

Confidence
That word
If not for that word

Dave
Member

@Anonymous:

I never made the case that foreign buyers drove this market.

Anonymouse
Guest
Anonymouse

@Dave:

“Considering divergent opinions is an important thing.”

Not for anybody here.

curious lurker
Member
curious lurker
Thank you Dave for returning to the site and spouting more useless drivel with the purpose of confusing people. Let’s stick to what’s important. The rise in the real estate market in Vancouver and Canada in the last decade is due to loosening lending standards, and lowering of interest rates. We went from a 25% downpayment system all the way down to 0%, and interest rates have dropped continuously. We are at a point were the down payments have gone back up to 5%, (though technically with cash back it’s effectively 0%) and interest rates will not drop. There is no more stimulus available. The BC Government is throwing in some tax incentives, quite similar to what Australia did to keep their bubble inflated. The growth in real estate prices is over. Sales are in the toilet, and total inventory… Read more »
UnagiDon
Guest
UnagiDon

@Dave: “Trust me on this.”

If I had a penny for every time you said that, I could have bought a West Side SFH long ago. =)

Dave
Member
@patriotz: Your definition of ‘specuvestor’ includes everybody that purchased in the prior ten years. Mine is somebody who buys and sells in a short period with the hope of making a profit on the flip. I don’t think there are many such people using my definition. We are seeing a flood of listings coming from landlords trying to cash in. The time to have done that would have been in 2009 or arguably 2010. I think that would have shaken most of those people out. It’s your case to make. If you are going to make it, then back it up with some numbers. Got any? RE… New buyer pool exhaustion. Absolutely that can cause a market correction. The market needs to have new buyers of course. At present, they keep coming. The numbers of holding up just fine. The… Read more »
WFT?
Guest
WFT?

“Let’s assume my premise of rates remaining low is true and we don’t have another economic meltdown… What could possibly cause the market to crash? ”

Ask an American. USA crash started well before the 2008 crisis and probably caused the crisis.

WFT?
Guest
WFT?

When responding to posts by Dave, please refer to him as “Dumbass Dave”.

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