Canada, debt, economy, prices

One bubble down, one to go

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The Vancouver real estate slow down is making news all over and people are now wringing their hands over Toronto.

This Financial Post article talks about our bloating inventory and collapsing sales while pointing out that Toronto sales are up 11% year over year.

..and yes, there’s yet another warning from the Bank of Canada:

“Although economic growth in Canada was slightly slower than expected in the first quarter, underlying economic momentum appears largely consistent with expectations. However, the composition of growth is less balanced. In particular, housing activity has been stronger than expected, and households continue to add to their debt burden in an environment of modest income growth.”

The warning is apt. Rosenberg said if the Bank of Canada felt the need to re-establish parity between short-term rates and its inflation target it would have to raise the rate 100 basis points.

“That wouldn’t cause a recession, but it sure would be painful for many households,” leading to more loan defaults and less spending growth.

If you can’t afford a 100 basis point increase in rates you probably shouldn’t be taking on too much debt.

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Vancouver mortgage loans & rates

I think this is a really good site. You definitely have a fabulous grasp of the subject matter and explain it great.

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Anonymous

@mac: Yatter’s at 95. Who knows what the Chipper is smoking, but add up paulb.’s or Larry’s numbers for the month and we get very close to REBGV totals.

I think at one point, through the endless screams and inane babble, Rob said he includes parts of the Fraser Valley. But it has been so long nobody can remember any more.

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VMD

(last post of the day, I promise)
Chinese Forum Trending Thread:
“Recently 3 of my (Chinese) friends sold their houses… What’s interesting is they all switched to renting!! They see a housing downturn coming up and plan to buy a nicer house at a cheaper price later!! OMG OMG Really??”

-market psychology turning… rush for the exits 3..2..1?

http://translate.google.com/translate?sl=zh-CN&tl=en&js=n&prev=_t&hl=en&ie=UTF-8&layout=2&eotf=1&u=http%3A%2F%2Fforum.iask.ca%2Fshowthread.php%3Ft%3D571280&act=url

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VHB

Here’s your June norms. 40%; 50%. It’s all crap compared to previous years.



year	sell	list	sell/list
2002	2689	3850	69.8%
2003	3525	4301	82.0%
2004	3501	5594	62.6%
2005	4333	4742	91.4%
2006	3951	5460	72.4%
2007	4244	5533	76.7%
2008	2425	6546	37.0%
2009	4259	5372	79.3%
2010	2972	5544	53.6%
2011	3262	5793	56.3%
Mean	3516	5274	66.7%
median	3513	5496.5	72.4%
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Todd

@market stats: I’m going to go ahead and do the unthinkable and defend a realtor.

What’s the problem with relisting instead of a price drop? Presumably the property would be new to anyone who isn’t familiar with it already and they would judge its asking price on its own merits.

Or is there some wicked evil spell that relisting casts that makes people pay stupid prices?

It seems to me that those who pay stupid prices always want someone to blame, but its them alone who must take the blame.

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VMD

@mac:

Don’t be discouraged by the current June 1-7 S/L ratio of 43.3%
Last June, the end-of-month S/L ratio was 56.3%
That’s a difference of 13%
(unfortunately, I don’t have access to paulB’s June-Nov 2011’s daily stats #’s, to do day-by-day Sales/Lists comparison YoY)

fyi
May 2012 S/L= 41.2%
May 2011 S/L= 56.9%
difference of 15.7%

So far June’s S/L ratio is still much worse compared to last year.

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Patiently Waiting

@mac: “I thought things were even slower in the valley.”

I wouldn’t assume that.

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mac

@Selma Bouvier: Super duper agree with you.

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mac

@mac: Good lord I am tired. Look at all my spelling mistakes. Sheesh.

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mac

@VMD: Well I am surprises to see the S/L ratio go up then! I thought things were even slower in the valley. You are correct, though, he lists 97 sales for today in Vancouver only. But doesn’t list the solids. That’s my boy Robbie. Wonder what he’ll be spinning in the fall.

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Selma Bouvier

Pfft at the economist in that FP article saying that the “bubble has burst”. When houses in Van East are selling at $1 million plus, there is still a bubble! It is still too premature to state that this insanity is over.

I agree with a lot of what Da Mann has said today. I don’t see there being a sudden fall in prices. This particular brew of Vancouver Koolaid is spiked with heroin and crack. It will take a long time for the addicts to wean themselves. I also agree with him that a slow deflate is probably the best treatment to kill the addiction. A sudden decrease might just spur future users who have been waiting on the sidelines.

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VMD

@mac:
Chipman’s: “June 7, 2012 Vancouver real estate sales statistics for the REBGV, the FVREB, and both boards combined.”

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mac

@VMD: Chipman’s stats for June 7th:

New Listings 372
Price Changes 261
Sold Listings 173
Sell/list 46.51%

Can someone remind me why there is such a discrepancy. I don’t want to get super excited over 29% s/l when it’s really closer to 50%. Plus, the more stealth-like the decline now, the more assured it is later.

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HAM Solo

One more sleep to 19K.

Nuh nuh nuh nuh, nuh nuh, nuh nuh nuh nuh, nineteen!

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mac

@rp1: That’s the one. @Anonymous: Obviously not if that’s not what they’re doing. But as we don’t know what they do with 100% of their money (and neither does CRA despite supposedly having the right to tax them) there’s almost no point in imagining what this opaque group of people would prefer or not prefer to do.

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VMD

@market stats:

I don’t know how he does it (some computer programming magic?), but the guy at VancouverPriceDrop compiles “Recycled Listings %” stats which may be interesting to see which areas have the highest ratio of unsuccessful but motivated sellers.

“Recycled Listings: stats showing how many new listings are actually recycled listings that had been previously pulled. ”
http://vancouverpricedrop.wordpress.com/2012/06/07/recycling-stats-june-7-2012/

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market stats

there you go paulb himself again avoiding price change with relists

V955480

Great to get the data from paulb but shows how the obfuscation of data will act to influence transactions and prices. Someone may buy this thinking it was just listed and not languishing, or do you think the buyers realtor would tell them? I’m giving low odds on that.

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Patiently Waiting

@VMD: Yes, it seems the “immigration industry” took on a life of its own in the last few decades, and desperately needed a crackdown on its self-serving greed. No doubt recent immigrants are cheering as loudly as anybody. 🙂

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Todd

@VMD: That looks normal, no big late night entries eh? I think the small discrepancy is because paul includes vacant land in his count.

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Patiently Waiting

CMHC home buying and renovating survey

http://www.cmhc.ca/en/corp/nero/nere/2012/2012-06-07-0815.cfm

For both 2011 and 2012, Vancouver is dead last for renovation intentions. Renovation activity in Vancouver dropped steeply from 2010 to 2011.

The changes to home equity lending hit home here in debt city.

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VMD

fyi larry’s stats
Vancouver All Areas*
New Listings – 236 (paulB: 240)
Sold Listings – 95 (paulB: 97)

*Attached & Detached – Date: 2012/06/07
Time: 21:27 Pacific

today no late-listings I suppose..

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Anonymous

@WFT?: …..The weather is always lousy in Vancouver. July and August are the only nice months and its always been that way. Coming from a born and raised Vancouverite…..

That’s not entirely accurate: the first half of July generally bites as well. Summer in Vancouver lasts from the 3 week of July to the last week in August. Sometimes, you get lucky and September can be nice but that’s only occasionally the case.

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Anonymous

@Bull! Bull! Bull!: …It seems my question touched a nerve. ….

Hmmmmmm,isn’t it time to do some cold calls? Just remember: you’re not selling RE, your selling yourself! You’re not selling RE, you’re selling yourself! You’re not selling RE, you’re…..

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Anonymous

@patriotz: “Three”

I post tree, my husbah post tree. 🙂

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Anonymous

@mac: “If they get 100 million out. And lose 25 million. They still have 75 million in the West.”

Would they not prefer to have 100 million in a bank account over 75 million in real estate? Investing it in things other than real estate would be much more liquid and easier to move.

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