Disappearing ghost towns in the media

This is odd.  The Globe and Mail published an article about the condo boom titled “How condo boom threatens a ghost city phenomenon” and included the following alarming section:

“CMHC estimates that roughly 25 per cent of condominiums in the Greater Toronto Area are sold but sitting vacant — shades of Miami at the height of its collapsed condo bubble in 2007. Other analysts say the 25 per cent figure may be too low.

“This is the ghost city phenomenon,” Mr. Holt said.

Condo developers in Eastern cities such as Toronto, Montreal and Ottawa, appear to be rushing to sell and build units before interest rates start to climb, and the market crashes.”

But if you visit that link you’ll no longer find that text and the headline has been changed to “Housing starts shoot higher on back of condo boom” (although as of this writing the URL still shows the original title).  Why the dramatic change in tone?

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Anonymous
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Anonymous

@Best place on meth:

“If you’re sincerely interested in debate then tell me this – when was the last time inventory was at 18,000 in May?”

2010, when it peaked at below 19,000 for the year.

Anonymous
Guest
Anonymous

@offside: “they are the highest in the decade for crying out loud”

It’s the highest in May for a decade, by a very small margin.

Best place on meth
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Best place on meth

@Bull! Bull! Bull!:

Very good, so you’re thinking that we may be close to the peak already as in 2010 – even though sales are way below the 10 year average every month this year so far?

Bull! Bull! Bull!
Guest
Bull! Bull! Bull!

@Best place on meth: What’s different from now and 2010? Why are you guys getting excited about inventory numbers which are slightly higher than 2010?

The market has dealt with inventory like that before, tell me why it won’t do it again.

jesse
Member
@Bull! Bull! Bull!: “But inventories aren’t outrageous, and they aren’t growing at an outrageous rate.” If you mean that prices may not fall 20% in a year, well fine, but months of inventory, a strong signal of price movements, is already at 6 and likely to increase in the second half of the year unless sales start picking up. It’s not just inventory, it’s sales too and in my view sales are a more important component if only because a lack of them translates directly to empty pockets for the REIC and the economy in general. Look, the market is weak for this time of year. There is a good chance the weakness will extend into the remaining 7 1/2 months of the year. Population growth in 2011 was weak and that means sales in 2012 will be weak. Credit… Read more »
VHB
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VHB

@Bull! Bull! Bull!: Might require taking 175bps off the 5-yr again. That would be an interesting trick from current levels. http://www.bloomberg.com/quote/GCAN5YR:IND/chart

Best place on meth
Member
Best place on meth

@VHB:

You beat me to it, I was just going to mention interest rates plummeting starting in late April, 2010.

Other factors that are different today compared to 2 years ago:

*mortgage rules have been tightened
*credit is becoming less available as CMHC nears its cap
*sales have been trending lower since last fall
*Chinese money is drying up
*debt to income ratio has climbed higher

***public sentiment appears to be changing amid a loud chorus of “bubble talk”

Bull! Bull! Bull!
Guest
Bull! Bull! Bull!

Every year you people have your reasons, and every year you are wrong. And this year you have your reasons. None of which are a “slam dunk”. Slightly less population growth? A little higher interest rates? Debt to income a little higher? None of those things are positive for the market. But you can’t tell me at what level those need to be to turn the market, because every year you seem to think they are at that level.

It is reasonable, given the factors you’ve presented, to say you are over enthusiastic in your stance.

Of course, no one can predict the future. Maybe “this time is different”.

VHB
Member
VHB

@Best place on meth: But let’s grant the point that we all have cried ‘wolf’ a few times before. I’m as guilt as any.

Some might take that as evidence that the pack of ferocious wolves, fangs bared, staring us in the face must therefore be nothing more than an optical illusion since past cries of ‘wolf’ have proved false.

That’s fine. But me, I think the wolves are for real. So, ‘wolf’. Take that for what it’s worth.

Bull! Bull! Bull!
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Bull! Bull! Bull!

This is the point in the debate where you tell me that you don’t care because renting is economically the smarter thing to do.

VHB
Member
VHB

@Bull! Bull! Bull!: Again, the point is that we only have to be right once. And, moreover, the cost of being ‘wrong’ is that renters get to live more cheaply in rented abodes in the meantime. Sounds like win-win.

jesse
Member

@Bull! Bull! Bull!: “no one can predict the future”

Prices will be lower in 2015. Alas you are a troll and I bid you good day.

VHB
Member
VHB

@Bull! Bull! Bull!: yes, that is precisely true. Why is that a point of contention?

Mick Murphy
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Mick Murphy
Bull! Bull! Bull!: You are totally right, I wouldn’t listen to them either. But I would listen to who knows what they are talking about, has the training and background to predict these things, and has been right all a long: Tsur Somerville “This is certainly consistent with a correction,” said Tsur Somerville, director, centre for urban economics and real estate, Sauder School of Business at the University of B.C. “The first place you’d see that is in falling sales.” Real estate sales in April sunk to the lowest levels for the month since 2001. Ian Smith, PNG Email to a friend Printer friendly Font: “It’s a clear indication of a significantly weakening market on the sales side. But there’s no clear economic reason. It’s not like interest rates are going up dramatically or the economy has slowed dramatically. “People… Read more »
Bull! Bull! Bull!
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Bull! Bull! Bull!

@VHB: “Again, the point is that we only have to be right once. And, moreover, the cost of being ‘wrong’ is that renters get to live more cheaply in rented abodes in the meantime. Sounds like win-win”

Look at how quickly all the facts, figures, stats, and predictions collapse in the face of criticism.

Why do you talk about these things, when you admit they have no value?

You should have just down voted me. Don’t worry, you still have time. Some people still haven’t seen this discussion.

Firkin
Guest
Firkin

@Bull! Bull! Bull!: You’re comment ‘prices haven’t budged’ make wonder. At what speed do you expect prices to fall in a real estate market? I know stock prices can make big daily gains or losses, but real estate is not highly liquid. By the time it’s clear that prices are dropping it’s too late for any recent buyer in a market like this.

When prices start to fall they fall slowly and as you say no one can predict the future, just ask anyone in Vegas or Miami, I think they’re still waiting for prices to recover.

Firkin
Guest
Firkin

@Bull! Bull! Bull!: which facts, figures and stats have collapsed?

Makaya
Member
Makaya

@Bull! Bull! Bull!: “Don’t worry, you still have time. Some people still haven’t seen this discussion.”

I’ve actually read the whole discussion and I can’t still figure out the point you’re trying to make… So my questions to you:

– where do you think this market is going from now on? Is it going to appreciate, depreciate? By how much?
– is this a good time to buy? With current valuation, do you think RE is still a good investment?

Thanks in advance for your genuine answers…

Firkin
Guest
Firkin

BTW, I’m also voting tripple Bull up. because I want so see if he/she really wants to have an honest debate or just fall back on changing the subject and pointing out that no one has accurately predicted local housing market moves so far.

The ‘cry wolf’ analogy is very apt. In that story the boy (rightly or wrongly) warned of a danger over and over until nobody believed him. It’s as if repeating something that hasn’t happened yet makes people believe it’s less likely to happen, but as everyone know in the end the wolf comes and devours everyone.

The wolf will be fed.

Anonymous
Guest
Anonymous

@Makaya: Yes! please answer the questions Makaya posed instead of predicting the past.

registered
Member
registered

20 Bull! Bull! Bull! Says: “Looking forward to the down votes from the sheeple who aren’t interested in debate.”

Since in my case I never wrote any the things you claim, hope you agree with voting you down on principle. Your wide brush, avoidance of central CMHC issues (very different than 2010) and falling back on weak, navel gazing positions like “no one can predict the future” – which somehow you feel warrants predicting no change – justifies it to me.

Bull! Bull! Bull!
Guest
Bull! Bull! Bull!

@Firkin: which facts, figures and stats have collapsed?

Notice how VHB quickly abandoned his facts and figures and took a much more philosophical stance, about only needing to be right once?

That’s because he knows his facts and figures have ZERO predictive power. So why does you bring them out year after year? Your guess is as good as mine.

Best place on meth
Member
Best place on meth

@Bull! Bull! Bull!:

“You should have just down voted me.”

Done.

Benefit of the doubt repealed.

VHB
Member
VHB

@Bull! Bull! Bull!: Note: I did not abandon facts and figures. Kinda the opposite of the way I roll, actually.

Anonymous
Guest
Anonymous
Newsflash Vancouver BC May 10th 2012 Premier Christy Clark has confirmed that rumors are correct and on May 30th 2012, the City of Vancouver will be sold to Chin Lau-Fong 2nd undersecretary for foreign investment in Szechuan Province (official salary $35,000) for an undiclosed sum. “This is a great day for the Province. No more HST or even PST.” The official ceremony will be held at the Olympic Plaza where the Premier will offcially hand over the keys of the City to Mr Lau-Fong. At hand will be Mr Rennie and Mr Good who will be wafting the air with huge red fans to ward off the evil spirits of the almost dead. The event will be sponsored by Kinder Morgan and Enbridge. Mr Lau-Fong said he had already bought one street in West Vancouver for third son, and two… Read more »