Vancouver housing zeppelin

Even with all the recent warnings of a housing bubble that is no longer limited to just Vancouver and Toronto, you’ll still find lots of media coverage that dismisses bubble talk or explains it away as an ‘ownership premium’.

It’s not difficult to see why this is – there are thousands of people who’s incomes depend upon the housing market.

Whether its condo marketer Bob Rennie or a random realtor, they all have their day to day income tied to the health of the real estate
market and conveniently are given ‘expert’ status and quoted by the local media.

That makes an article opener like this all the more shocking to newspaper readers:

Is there a housing bubble in the Lower Mainland? Housing zeppelin is more like it. Bubbles, after all, are soft and cute and harmless. Zeppelins, conversely, hurtle into the ground, spewing flaming wreckage in all directions. And that’s precisely what we’re about to witness in Metro Vancouver.

That’s the intro to a rather dramatic editorial written by Gord Goble and published in a number of local papers.

Sort by:   newest | oldest | most voted
rp1
Guest
rp1

You can’t say all zeppelins are bad. Led Zeppelin was pretty good, even if they stole their best songs. Also, where is the Rocketeer?

Hugh G Rection
Guest
Hugh G Rection

“Real Estate & housing are not terrific investments. Most suggestions otherwise are a huge lie, perhaps The Great Lie. The Lie is perpetrated most in the commercialization of the “American Dream”: a white, picket fence for every man, woman, and family. Non-income-producing, residential real estate is broadly a money pit. For long-term holding periods (5-20 years), the value of this real estate is severely eroded by its cost of carry, including Taxes + Insurance + Maintenance”

http://thebuttonwoodtree.wordpress.com/2012/05/11/real-estate-the-great-lie/

patriotz
Member

you’ll still find lots of media coverage that dismisses bubble talk or explains it away as an ‘ownership premium’.

Laughable when you consider that a bubble, by definition, is when buying is more expensive than renting.

registered
Member
registered

@2 Hugh G Rection: Those are all secondary, ultimately the reason no asset can permanently appreciate in real value – the only metric that counts – is it’s mathematically impossible. The easiest way to make it immediately obvious is pick any yearly percentage increase you want and calculate the cost of a home going forward against the median hours of worked required to purchase it. Hitting 100% of your work year doesn’t take long.
A quicker way is to guesstimate what your home/land value would be in 500 years and compare that with 500 year old homes in Europe.

patriotz
Member

@fixie guy:
The real problem with the argument is that nothing is inherently a good or bad investment. What makes something a good or bad investment is its present price versus future earnings. RE was a terrific investment in the 1930’s because it was really cheap. You don’t need a degree in finance to understand that a house is a good buy at 3x annual rent.

patriotz
Member

A great rebuttal to the “builders won’t build at lower prices so high prices are here to stay” argument:

New home construction picks up in Las Vegas

Vegas is of course down over 60% from peak.

Anonymous
Guest
Anonymous

@Hugh G Rection: speaking like a true renter! oh, wait, you are one!

Anonymous
Guest
Anonymous

@patriotz:

By whose definition?

Anonymous
Guest
Anonymous

@patriotz: “A great rebuttal to the “builders won’t build at lower prices so high prices are here to stay” argument”

From the article:

“The single largest impact has been houses under $200,000,” Beville said. “Homes in the $130,000 to $190,000 (range) are getting a lot of love.

New houses for 130K. And the builder still makes a profit. It is amazing how markets quickly adapt.

Crash Crowley
Guest
Crash Crowley

@rp1:

What do you mean Led Zepplin stole their best songs? I’ve never heard that. Please ellaborate or post a source with some more detailed information. Thanks.

Anonymous
Guest
Anonymous

hey ZRH2YVR,

I’m sorry i should have been more clear regarding PH7 108 cordova, any way you can see what the last selling price was? It sold in 2009-2010, the info might not be available to you because I think it was a new unit at the time, and I’m not sure if all these new condos are even listed in the MLS

thanks in advance for your help

Makaya
Member
Makaya
Monday morning laugh… re:Whistler Here is what “Realestock blog” was saying about Whislter RE in Feb 2010: Real Estate Value In Whistler Best In 9 Years For people expecting the real estate prices in Whistler to drop after the Olympics, I’m afraid you’re going to be sorely disappointed. (…) Those looking to step into the Whistler market for the first time under the notion of a lower price, may be disappointed. Whistler homeowners receive good cash flow from renting their properties out most of the year and as such are not as motivated to sell as homeowners in other areas. Whistler is considered to be near the bottom end of pricing when compared to other resorts such as Sun Valley and Aspen, with price adjustments as low as they were in 2001-2002. “The mistake many people make when they look… Read more »
registered
Member
registered

@10 Crash Crowley: Most already knew about the Dixon/Wolf stuff, but enough for a 6-part series? LoL:

http://www.youtube.com/watch?v=JyvLsutfI5M&feature=related

Anonymous
Guest
Anonymous

@Crash Crowley: “Please ellaborate or post a source with some more detailed information. Thanks.”

Just google it. I just did and it is shocking how so many of their songs were ripped off. You can listen for yourself. I am big Zep fan and never knew.

registered
Member
registered

@5 patriotz: A science background biases me towards Occam’s big razor. If permanent appreciation is impossible in principle the rest is icing.

Yalie
Guest
Yalie

@Anonymous:

New houses for 130K. And the builder still makes a profit. It is amazing how markets quickly adapt.

Or you can build a 500 sq foot dog laneway house in Vancouver for a mere $270,000 (land cost not included), which will help “ease the path to ownership”.

http://www.vancouversun.com/business/Laneway+eases+path+ownership/6561891/story.html

Anonymous
Guest
Anonymous

@Yalie: you dont even own a dog house to live in. poor soul!

Yalie
Guest
Yalie

@Anonymous:

@Yalie: you dont even own a dog house to live in. poor soul!

Awww, why you be hating on me? Is it because, despite the free publicity in the Vancouver Sun, you still can’t rent out your new laneway house at anywhere near your absurd asking price of $2,200 / month?

http://vancouver.en.craigslist.ca/van/apa/3028091311.html

suspectum
Guest
suspectum
Even renting seems unsafe lately: we looked at a $1000/ month top level suite in PoCo(2 party house, long-time renter on bottom, landlord living 10 miles away) a few weeks ago. The landlords were a middle-aged couple, claimed to be stable, living nearby, so always available, looking for long-term renters. We asked for a few days time tot hink it over and got aggressive txts and calls within 30 minutes of leaving the showing, such as “we got more parties looking, we really need to sign tonight”. This put me off a bit (I also didn’t like the house too much, there was a security chain on the internal bedroom door…makes you wonder!). We are now seeing the house for sale online with “investor alert” as the headline. It seems the friendly long-term landlord couple were just looking to lock… Read more »
patriotz
Member

@Anonymous:
“By whose definition?”

Well how about the Economist?

Investors are prepared to buy houses they will rent out at a loss, just because they think prices will keep rising—the very definition of a financial bubble.

They used it to identify the global housing bubble back in 2005, so it works pretty well, wouldn’t you say?

http://www.economist.com/node/4079027

Anonymous
Guest
Anonymous

@patriotz:

And what about owner-occupiers?

patriotz
Member

@Anonymous:
“And what about owner-occupiers?”

They pay the same price as investors, because the seller doesn’t care which they are selling to.

Duh.

SamanthaD
Guest
SamanthaD

Hello Dears,

All set to be wrong for another year?

s.park
Guest
s.park

i really get a good laugh out of homes listed on mls.
when one of the pictures you use to sell you home is:
– the floor
– washer and dryer nestled in a nook
– partial view of neighbours yard

it means ‘crap’
link: http://i.imgur.com/axeug.jpg

shikko
Member

@Hugh G Rection:2, fixie guy:4

“It is difficult to get a man to understand something, when his salary depends upon his not understanding it.” – Upton Sinclair

I think that sums up the desire to deny any bubble.

wpDiscuz