FREE BEER!

All over BC the decline in real estate is in full swing. When you’ve got more sellers than buyers it takes a little extra to stand out.

And when that extra is FREE BEER! it does stand out.

Allen has had his three bedroom condo on the market for just over a month and says only two prospective buyers have stopped in.

“I have two houses, one in Kelowna and one in Kamloops and I just can’t afford to keep both going.”

The condo located on Springview place in Kamloops, was being rented, but after the tenants moved out and the house went on the market, Allen knew he had to be creative or he could be stuck paying two mortgages.

“I was sitting around thinking, this house is a real pain, it’s not getting nearly as many views as I would like. How am I going to attract people to this house? Well I was drinking a beer at the time and I thought why not just give away beer for a year.”

Allen hopes the free beer initiative will be the final push to get people thinking about buying.

“This place is geared towards students, and that is who I am marketing with this campaign of free beer for a year.”

Here’s the full article.

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Jim
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Jim

@32

From what I have seen from browsing the academic literature, academic economists seem to care most about impressing other academic economists. Dispensing advice to the public is probably tertiary.

They seem to really have a bent for developing complicated models demonstrating ‘neat’ theorems from various branches of applied mathematics. It’s like half of them would be engineers, but for the fact that they don’t like getting their hands dirty and actually building things. That discipline attracts odd types.

(I delve into economics as a computer scientist, since much of the work on rational choice, game theory and the like is applicable to systems engineering and AI)

jesse
Member

“Prices decline as a result of recessions”

Recessions occur for a multitude of reasons, and when an economy is heavily dependent on construction and real estate it doesn’t take too much brainpower to figure out sector exposure and cause and effect. Or at least I thought.

Anonymous
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Anonymous
According to the article, Pastrick claims “Prices decline as a result of recessions, not the other way round.” That may be true when prices are historically normal (inline with rents and incomes). Prices typically only decline below normal in a recession or with some other economic trigger. The problem with their analysis is we are in a bubble and prices are not at normal levels. To return to normal levels we don’t need anything as has been shown in other markets around the world. Kind of like the Nasdaq crashing in 2000. It was not about a major economic event which would normally be required to crash the stock market if it was fairly valued. The Nasdaq was in a bubble and nothing is required other than running out of greater fools to pop a bubble. Of course an economic… Read more »
Missed the train
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Missed the train

Free beer and … Free money ! Some bank are coming back with the 5 years at 2.99%. Is that the lowest ever ?

Apocarypse Mao
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Apocarypse Mao

@ 900kCrackHouse

We are down 12% on average SALES price. That is different from overall average price.

There were a lot of high end homes selling in early 2011, so, of course, the average price of what was being sold went up. That did not mean that overall average home price went up, overall remained flat. This, year, no high end sales, so average SALES price is down 12%, rest of market still fairly flat, as it has been for last 2-3 years.

Don’t get the two figures confused. Bulls have made many uninformed or misleading statements due to the difference. Bears shouldn’t have to.

If your looking to buy, don’t think you’ll be saving 12% from last year. At least not yet. It’s taking a while for the high listing/low sales news to sink in with most sellers.

Yalie
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Yalie

@Best place on meth:

This makes Helmut a liar or an idiot.

Wait…could he possibly be both?

Actually, he’s more accurately described as a bullshitter. Yes, that’s an actual term according to philosoper Harry Frankfurt.

Bullshit can either be true or false but bullshitters aim primarily to impress and persuade their audiences, and in general are unconcerned with the truth or falsehood of their statements (it is because of this that Frankfurt concedes that “the bullshitter is faking things”, but that “this does not necessarily mean he gets them wrong”). While liars need to know the truth to better conceal it, bullshitters, interested solely in advancing their own agendas, have no use for the truth. Thus, Frankfurt claims, “…bullshit is a greater enemy of the truth than lies are”

http://en.wikipedia.org/wiki/On_bullshit

Best place on meth
Member
Best place on meth

The Helmut says:

“However, most home buyers are existing homeowners and some are renters or other first-timers with principal residence their main motive, not greed or speculation.”

So he’s saying that the two motives of principle residence and greed/speculation are mutually exclusive and buyers must be in one camp or the other which is absolutely false.

This makes Helmut a liar or an idiot.

Wait…could he possibly be both?

900kCrackHouse
Guest
900kCrackHouse

I wonder how far housing will fall before the local real-estate boards index actually shows a decline. We are down 12% on detached houses and they still show up. Maybe once we are down 30% they will show -5%?

frank
Guest
frank

@Patiently Waiting:

It was a foolish program to start with. How is anyone ‘investing’ when they just leave a big chunk of money interest-free with the government. Heck Government bonds are almost interest free now anyways.

If we are going to sell our citizenship to the rich, why not just auction it, or set a One Million price tag. Rich Russian or Chinese want to leave, sure, that will be $6 Million for the family please….

Repeated 1000 times. We are getting the same people anyway, may as well make some serious money!

vangrl
Member
vangrl

“Anyone have any thoughts about recreational properties, more specifically Whistler? Our house there has dropped 35% since 2008. Would love to sell but not sure this is the time…”

this is a commenter on Rob Carrick’s latest facebook post “Is it a bad thing if housing prices fall some?”

what i want to know is, why have they not talked about the massive hit that Whistler has seen, or am i missing something? i don’t recall hearing anything about this in the news.

but on another note, don’t you just love the bearish sentiment wafting through our cloudy drizzly sky:)

patriotz
Member

@crabman:

According to the article, Pastrick claims “Prices decline as a result of recessions, not the other way round.

The biggest post-war bust in Vancouver started in spring 1982, a full year before the recession of spring 1983.

As well there was no recession preceding the long decline which started in 1994.

This guy is unreal.

Anonymous
Guest
Anonymous

@Anonymous:

“Sewerville: “rapidly falling house prices are not the most common way for real estate markets to bring them-selves back into equilibrium”

So now he impliedly admits that the market is out of equilibrium. He was only able to figure that out after the average price dropped 12% in a year. Now his only disagreement is with how “rapid” (a vague term) the decline will be.

How useless can you get?

Dave
Member

@Al:

Where does it say 4 months? I said $800k for the term of the lease. Doubtful the lease was only 8 months.

Devore
Member
Devore

“So I was drinking beer…” is how all the best ideas begin!

shriller
Guest
shriller
I wouldn’t be so hard on Tsur. He’s expert at making unverifiable claims. Who knows when a market is in equilibrium for instance? Maybe based on his definition, his claim is accurate. As for the meme regarding bank economists and predictive abilities. It’s sort of like taking medical advice from the technologists. And as for economists on TV, do we really take our psychological opinions from Dr. Phil? Most academic economists don’t study housing prices and so aren’t experts. And, possibly because they have reputations to protect, they don’t like to be interviewed on subjects that they haven’t studied in detail. But equally I’m sure that a large number, if asked privately, would point towards Shiller for opinions. And his view on Vancouver is pretty well known. The problem is that the news cycles these days are not `conducive’ to… Read more »
crashcow
Member

“A bubble occurs when exaggerated expectations of future prices increase unusual demand either by people who fear being priced out of a market or by investors hoping to make a lot of money fast. A bubble is a self-fulfilling prophecy for a while, as successive rounds of buyers push prices higher and higher. But the willingness to pay higher and higher prices is fragile: It will end whenever buyers perceive that prices are no longer going up. Hence bubbles carry the seeds of their own destruction. Only time is needed for bubbles to end.”
– Robert Shiller

Anonymous
Guest
Anonymous

@vangrl: Sewerville: “rapidly falling house prices are not the most common way for real estate markets to bring them-selves back into equilibrium”

OK sewerville,

So the rapidly falling house prices in most countries (incl. US, UK, Ireland, Spain, Australia, China, South Africa) are supposed to be abnormal?

And the rapidly increasing house prices we had were normal?

Effing idiot.

Makaya
Member
Makaya

Check out the latest inventory graph from Larry’s blog:

Amongst the three real estate boards the past month saw a total of 1,308 listings added to the total of 27,744 homes for sale. As of June 01, 2012 Vancouver alone accounted for 17,835 of that total for an increase of 15.3% above June of last year.

Anonymous
Guest
Anonymous

@vangrl: ..unless you speed up your perception of time, then the drops seem very sudden.

http://vancouvercondo.info/coaster

SpanishBombs
Guest
SpanishBombs

@N: At least two in Calgary tried it, but it was only $1000 worth of free beer:

http://www.toptenrealestatedeals.com/real-estate-news-headlines/150-free-beer-with-home-purchase/

They got inspiration from the same deal in Chicago. I also seem to remember a similar attempt for a house in or near Hope BC last year.

vangrl
Member
vangrl

does this guy have any idea how much of a raise normal peeps have to get to bring the fundamentals back to the norm?

“Somerville said rapidly falling house prices are not the most common way for real estate markets to bring them-selves back into equilibrium. More commonly, prices will stay relatively flat while other measures – such as income levels – catch up, or prices will decline very slowly, Somerville said.”

Read more: http://www.vancouversun.com/business/Home+price+drop+could+mean+less+spending/6773895/story.html#ixzz1xhiFT2Lc

crabman
Guest

“Against the motion: Helmut Pastrick”

According to the article, Pastrick claims “Prices decline as a result of recessions, not the other way round.”

Is this guy aware that US prices peaked in the Spring of 2006 and the recession started in Dec 2007? At the start of the recession, the Case Shiller composite was already down 15%. Is he uninformed or lying?

Spade
Guest
Spade

Is it really surprising that this Doak joker make that claim about RE?

The first thing that pops up on a google search of Doak is this:

“Jim Doak, Asset Manager, Compares Tax Hike On The Rich To Ethnic Cleansing”

Clearly, this guy is a sensationalist moron….

vangrl
Member
vangrl

oh dear, Jim Doak is crying on BNN about all the bearish news on real estate lately

He’s saying that all the owners that could potentially lose out on capital gains from being too scared to buy a Toronto condo, should get together a class action lawsuit against Flaherty, Carney etc.. to recoup that money. He thinks if that became a possibility that it might stop these bearish predictions.

WTF can you imagine flipping that table, and having all the recent home owners sue the bullish analysts, real estate agents etc.. when (not if) this market goes down…..what an idiot.

Anonymous
Guest
Anonymous

Re: TD’s forecast for a 15%+ additional price decline

Earlier in the year, my gf somehow got the genius idea to buy a second condo. I repeatedly showed her what a terrible risk/reward that decision carried, but her house lust was too strong for her to budge. Fast forward to this month when she has lunches with her banker friends. All of them independently tell her their uncensored outlook: that their best case scenario is a further 15% decline in prices. The effect? She went from wanting to double her exposure to real estate to eliminate it completely and rent – all over the span of 6 months. I can personally tell you that market psychology is undergoing a tectonic shift.

Real estate. The most emotional of asset classes.