Friday Free-for-all!

It’s the end of another work week and that means it time for the free-for-all!  This is our regular weekend news roundup and open topic discussion thread.  Here are a few recent links to kick off the chat:

Tiptoeing towards sub-prime
Get ready for more bidding wars!
Carney hints at rate hikes
Is Carney actually driving?
Vancouver might get a new tower
Want to RE blog for G&M?
Higher learning in Whistler
Translink puts on the brakes

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

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blueskies
Guest
blueskies

I am predicting a slow sales day on Sunday due to the hockey game on the tube.

CanuckDownUnder
Member
CanuckDownUnder

@blueskies:

I am predicting a slow sales decade. This goose is cooked.

blueskies
Guest
blueskies

on a side note:

Yesterday there was a real estate
exam held at the Vancouver Convention Centre

……total of 400 newbie fresh virgins
soon to be sacrificed on the altar of REIC
commerce

the question in 2 years:

what were you thinking?

Mick Murphy
Guest
Mick Murphy
vangrl
Member
vangrl
classic rebuttal on a few comments regarding this article! “SC_Guy 7:41 AM on 4/20/2012 @sinner69 6% is the ‘normal’…in what world? the ‘normal’ is more like 3-4% on the HIGH end. You can’t include the ridiculous rates of the 80’s, because that will never happen again. The central banks won’t allow it because the global economy couldn’t handle it. Take your fear mongering elsewhere…please. @MikeD5 You too. The average drop was $90K? Don’t believe so, but even if it were, the average sale price was well north of $1M….so……..your point? All you bubble pushers are 1d10ts, plain and simple. Yes, there are many places in North America that have real estate bubbles, or real estate that moves on a boom-bust cycle. Vancouver is NOT one of them. What part of “they aren’t making any more land’ and ‘supply & demand’… Read more »
registered
Member
registered

@4 Mick Murphy: The author describes himself on his Twitter account as “Financial-services reporter at Bloomberg News in Toronto. Best dad ever. Amateur comedian.” An article about Canadian banks distancing themselves from sub-prime that doesn’t mention recent changes at the CMHC certainly supports the latter.

jesse
Member

@fixie guy: “doesn’t mention recent changes at the CMHC certainly supports the latter”

Yes. And there is more to come.

VHB
Member
VHB

I’m mostly in the camp that says we aren’t going to see a huge jump down in prices in the next few months in the absence of some kind of credit market or unemployment shock.

That said, VW SFH inventory is 884. Last time that hit 1000 the west side saw a 20% drop. So maybe that is just a local market thing, but I can’t see VW SFH prices holding up when there are 1000 of them on sale.

patriotz
Member

@VHB:
Agree, I don’t see a big dive in the near future.

Given how the byelections went, it’s intriguing to ponder the outcome of an NDP win next year. NDP-bashers notwithstanding, I don’t foresee a Bill Bennett-era bust, but it could well tip things to a Glen Clark-era slow decline. And we all know that if prices go down just 15% and stay there an awful lot of people in the city are going to be toast.

BBM
Guest
BBM

@VHB: Prices in Van West are not holding up. For example, I saw a price drop on 1406 West 40th Av this week that puts it $1.1m below what it was listed for last year, about $725K below what comparable properties were selling for last year, and about $350K below assessed value.

If the price drops another $1.1m from here, I might even consider putting in a low-ball offer.

Makaya
Member
Makaya

@VHB: Price are already dropping. Have a look at this comment over on Vreaa’s blog. Someone is tracking automatically price changes in the lower mainland and his findings are very interesting. He has identified cases where asking prices have dropped by up to 40%.

http://vreaa.wordpress.com/2012/04/19/borrow-to-get-ahead-people-are-notorious-for-looking-at-the-glass-half-full-or-pretending-things-arent-happening/#comment-34751

yvr2zrh
Member

Tidbit of the day.

Greater Vancouver Average price down a lot this month. We should be 15% off the Feb peak by end of April in Detached.

VHB – re: the 884 units. See my post from a couple of days ago on VREAA. There are three markets in Van West- One is not selling at all, one is selling slow and one has no inventory and is moving very fast. Question is – what happens to homes over $3.0 million – Eventually they have to come down and that will move the prices.

jesse
Member

@zrh2yvr: I think the new build market is overbought. These units were built because the plans were cheap, the permits are easy to shuttle through City Hall, and it’s easy to find construction labour and material supply chains who know how to build them quick and (relatively) cheap.

Of course these are not $3MM houses; almost anyone looking objectively can see that; now that the US is gaining popularity again, the difference between a Vancouver property and a California property likely leaves even the most nouveau of riche thinking twice before buying.

Anonymous
Guest
Anonymous

@patriotz:

Agree, I don’t see a big dive in the near future.

VHB says “I’m mostly in the camp that says we aren’t going to see a huge jump down in prices in the next few months in the absence of some kind of credit market or unemployment shock.”

Nice to see you guys have finally come around to what I’ve been saying for a year.

Anonymouse
Guest
Anonymouse

@VHB:

“That said, VW SFH inventory is 884. Last time that hit 1000 the west side saw a 20% drop. So maybe that is just a local market thing, but I can’t see VW SFH prices holding up when there are 1000 of them on sale.”

Last time we saw 1000 inventory there were other factors in play that were scaring the pants off people.

Anonymouse
Guest
Anonymouse

@blueskies:

“the question in 2 years: what were you thinking?”

If they’re planning on being full-time realtors, I’d agree with you. But I’ve often considered the possibility of getting the training, because firstly it doesn’t seem like a big commitment or expensive, secondly because it means I could buy/sell with reduced commissions (because I was act as the agent), and thirdly it’d have an alternate means of generating income if I ever needed it.

Not sure if you have to pay some sort of annual membership fee to keep your license active, though. Does anybody know?

jesse
Member

@Anonymouse: “Last time we saw 1000 inventory there were other factors in play that were scaring the pants off people.”

Ah yes the old global financial meltdown angle. Inventory had been building for the entire year 2008 with relatively few words in the media about extreme distress in equity markets until September. I’m having a hard time with the causality.

bike
Guest
bike

“Last time we saw 1000 inventory there were other factors in play that were scaring the pants off people.”

and somehow you think global economy is in better shape then in 2008?
next time CB will not have even have the luxury of trillions dollars in stimulas.

jumpin in
Guest
jumpin in

Developers finance C. Clark’s campaign.
Her government offers tax rebates for buyers of new properties.
How is this different from CORRUPTION?

I cannot wait to see her out.

registered
Member
registered

8 VHB Says: “…. we aren’t going to see a huge jump down in prices in the next few months in the absence of some kind of credit market or unemployment shock.”

That almost implies prices are somehow justified. It wasn’t one event ballooning the market and it won’t take one large shock to return it to normal. The fed is rolling back all the little – many nearly invisible, no surprise – policies that inflated the supply of credit available to the housing market. Banks are already backing away. Many pricks will be deflating this balloon.

jesse
Member

@jumpin in: I disagree with the tax credit too, but if it makes you feel any better, there are parts of the province that are hurting bad in terms of new construction sales and arguably they need a boost of some sort. It’s not all fine and dandy out there…

chills
Guest
chills

@blueskies:

“Yesterday there was a real estate
exam held at the Vancouver Convention Centre”

Ahhh…..that explains it. I was in the neighbourhood and was sure I smelt crayons.

jesse
Member

@fixie guy: “Banks are already backing away”

I think a better way of putting the argument about how a shock is required to send the market lower is that a credit event is a certainty, not a possibility. Prices are simply too high for the incomes; credit is inevitably pulled when prices fail to rise enough to cover the bad debt.

Australia is just finding this out.

patriotz
Member

@jesse:
“there are parts of the province that are hurting bad in terms of new construction sales and arguably they need a boost of some sort.”

How about… lower prices! So more people can afford to buy?

patriotz
Member

@fixie guy:
“Many pricks will be deflating this balloon.”

And a lot more pricks will be deflated.

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