Friday Free-for-all!

Yeah! It’s friday and that means it’s time for the sun to shine and for us to do our regular end of the week news round up and open topic discussion thread. Here are a few recent links to kick off the chat:

Updated inventory graph, still climbing!
2 experts debate the bubble
Blame Canada? Blame Europe!
Nokia shutting down Burnaby
Why low and stable prices are good
Will sunshine bring a tear of joy?
‘Rodeo drive north’ going south
Van West tilting at windmills
West Van sales party over
OECD: Canada suffering Dutch Disease
Bubble fears a boon to alternative lenders

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

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Dave
Member
Active Member

First. Wake up you bums.

Anonymous
Guest
Anonymous

@Dave: yeah,instead of spreading fear and resentment those bear bums should find a job and settle down.

patriotz
Member

@Anonymous:

First they ignore you.
Then they laugh at you.
Then they fight you.
Then you win.

Gandhi wasn’t talking about bears and housing bubbles of course, but it applies equally well.

Dave
Member
Active Member

@Anonymous:

Shouldn’t you guys be happy right now? High inventory. Slowing sales. MOI creeping up. Global economy driving for a cliff. You should be voting me up to keep me around for some gloating later, right?

Dave
Member
Active Member

@patriotz:

Almost works for me. The only difference was that you guys didn’t ignore me at first.

patriotz
Member

@Dave:
The difference is that we are going to win and you are going to lose, because we only have to be right once.

Trust me on this.

Joe_Blown_Away_By_High_Housing_Costs
Guest
Joe_Blown_Away_By_High_Housing_Costs
N
Guest
N

@patriotz:

Dave’s a Realtor, isn’t he? If so, he has won many times over. It is perfectly possible to make money out of a bubble. Unless Dave is holds a lot of leveraged property, when alll this is over, he will have done better in the al estate market than I ever will.

Many Franks
Guest
Active Member
Many Franks

@Dave: Careful, there’s another one of those from Pauly Shore with a slightly different ending.

patriotz
Member

@N:
I meant lose the argument. It’s the marks who will lose money by and large, rather than the sharks.

Joe_Blown_Away_By_High_Housing_Costs
Guest
Joe_Blown_Away_By_High_Housing_Costs
Loon
Guest
Loon

Yatter Matters has the most scariest table I’ve seen all year:

http://www.yattermatters.com/2012/06/who-is-buying-those-vancouver-homes/

Summary: the majority of FTBs are local, young families putting down 25% or less. HAM is 3-4% if that (an urban legend essentially).

Scary but we suspected this all along. The source data is REBGV (and realtors) so take it with a grain of salt. Overall it looks balanced so have some Free Beer it’s Friday !

Joe_Blown_Away_By_High_Housing_Costs
Guest
Joe_Blown_Away_By_High_Housing_Costs

Propaganda on how the bubble bursting and resulting economic carnage is the fault of the Euro Zone. It’s not often a Vancouver Sun article talking about Canada/Vancouver talks about the prospect of mortgage defaults and uses the term “bloated house prices”:

http://www.vancouversun.com/business/2035/Euro+crisis+could+cross+ocean+Bank+Canada/6787247/story.html

Anonymous
Guest
Anonymous

“Summary: the majority of FTBs are local, young families putting down 25% or less. HAM is 3-4% if that (an urban legend essentially).”

Yes I can never figure out how so many people got sucked into that HAM was driving the market.

I was surprised by 35% to 40% of the market being first time buyers. If the recent media reports of a bubble and declines in prices gets through to this group the market is toast.

bum
Guest
bum

N: “Dave’s a Realtor, isn’t he?”

i think he works for developers.

Many Franks
Guest
Active Member
Many Franks

@Loon: I wonder whether that kind of survey wouldn’t be very susceptible to inherent bias in the data. For example, how likely would an investor be to respond to a voluntary survey vs. a first-time buyer? What do response rates look like depending on where the survey was sent?

While I also suspect that HAM numbers are overstated, I would expect foreign-investor-non-English-speakers would be a very unlikely demographic to respond to a voluntary survey.

silverfish city
Guest
silverfish city

@Anonymous: It’s easy to see why people think it’s HAM: go to any open house in North Van, West Van, East Van (mostly), Burnaby or Richmond. Nearly everyone there will be Chinese.

The difference is, it’s not “HAM”, it’s recent immigrants for whom buying a house is an absolute priority, no matter how they get the money or who they have to borrow it from.

Genuine HAM are offshore investors with lots of cash, and they tend to buy condos and really expensive houses. There probably aren’t many of these.

Dave
Member
Active Member

@N:

If the market were to crash, you can rest assure that I will feel it.

VMD
Member

@Loon:
Deals collapsing due to financing? % of realtors saying YES:

Jan/12  23%
Feb/12  22%
Mar/12  29%
Apr/12  41%
May/12  40%

hmmm.. is this a trend I see?

N
Guest
N

@patriotz:

“I meant lose the argument.”

True enough. I was just saying to a family member who was mocking me for having been wrong on Vancouver real estate for the last six years that I have, in fact, been right the whole time because it has been true, the whole time, that VAN RE is a bad deal and that prices will go down drastically. They have trouble getting their head around that.

MrV
Guest
MrV

Don’t know if this has been discussed yet, CREA is out with the average price data for Canadian homes:

http://crea.ca/content/national-average-price-map

Average price, May 2012 to May 2011 (Y/Y % change):

Canada -0.3%
Toronto +6.4%
BC -12.9%
Vancouver -11.9%

Turkey
Guest
Turkey

@Many Franks: Quoth Larry’s post,

“Each month the Real Estate Board of Greater Vancouver sends out a buyer demographic survey to members who have made at least one sale in the preceding 30-day period.”

That suggests the responses are from REALTORS®, not buyers… and since we’ve been arguing that REALTORS® benefit from overstating HAM’s effect, these numbers should be skewed (if at all) in the other direction. But — this is a survey, and I’m not so paranoid to imagine REALTORS® lying en masse to their own leadership.

3.7% foreign investment strikes me as a pretty small number. It’s just more evidence that Vancouver will reap what it sowed, without a legitimate reason to blame the foreign menace.

Dave
Member
Active Member

@patriotz:

I don’t agree. Using your rationale, prices have been too high since 1983. Prices will never rewind that far. The history of this market shows that a correction normally only gives up 12 to 18 months of price gains. We just had our once in a decade correction and that’s roughly what it took back.

I do think that prices are headed down this Fall and that might continue until next Spring. But, it will only be a pullback, not a correction. As with the 2008 downturn, I am sure you won’t take jump into the market.

N
Guest
N

@Many Franks:

The survey was completed by real estate agents, not by the buyers, so the buyer’s background would not impact survey completion rates.

N
Guest
N

@Dave:

Well then, Dave, I would suggest that you sell now, or be priced in forever. Trust me on this 🙂

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