One bubble down, one to go

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.

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

I put two pieces of bread in the toaster
when 1 got stuck I used a fork…..

wowee!!

I can safely say the market is toast
….. put a fork in it 🙂

Anonymous
Guest
Anonymous

“our bloating inventory and collapsing sales while pointing out that Toronto sales are up 11% year over year.”

We know Toronto is the center of the universe and gets government attention much more than Vancouver. This might spur more drastic measures for the upcoming CMHC changes in the works. Imagine Vancouver will already be in free fall when these CMHC changes come into play. This correction could be much faster and more severe than many around here have predicted.

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

Honest question, will you feel as good about the bubble popping when you see that it’s caucasian baby boomers and generation Y’ers who get hurt and not money laundering corrupt HAM?

pricedoutfornow
Guest
pricedoutfornow

@Anonymous:

Yes, I think we all noticed how the bubble talk really started in earnest when things heated up in Vancouver. I hope the crash is quick and severe. Save us from years of slow declines, where the talking heads are interviewed on Global saying things like “this is the bottom” and “the market is recovering”. Ugh.

patriotz
Member

@Bull! Bull! Bull!:
Could you explain to us how the amount of money you make or lose on a house (or any other investment) depends on your age or race?

As to your question, I will be delighted to see the kind of people typified by Jon Ferry and Pete McMartin get burned. Just because someone looks like me don’t think that I’m going to have any sympathy for him.

pricedoutfornow
Guest
pricedoutfornow

@pricedoutfornow:

I mean “heated up in Toronto” It’s too early.

registered
Member
registered

3 Bull! Bull! Bull! Says: “Honest question, will you feel as good about the bubble popping when you see that it’s caucasian baby boomers and generation Y’ers who get hurt and not money laundering corrupt HAM?”

No ore so than when I see people undergoing surgery or chemo, especially to remedy well known consequences of poor life style choices. Painful as the cure may be the alternatives are much worse.
Speaking of cancers, when your industry descends to that contemptible level of emotional manipulation, really, who would argue against harsh remedies?

patriotz
Member

Housing market jitters keep lid on Genworth’s share price

If the Canadian housing market tanks, Genworth would be left with lower earnings as it covers loan losses from homeowners who default.

“Generally speaking, people would say that real estate prices in this country are sky high and unlike the U.S., haven’t come down to earth,” observes Martin Braun, president of money manager Adaly Investment Management Corp.

Well someone out there is doing some thinking. And remember – the taxpayers are holding the bag for 90% of Genworth’s obligations, and the stock market still doesn’t like them.

Anonymous
Guest
Anonymous

@patriotz: “And remember – the taxpayers are holding the bag for 90% of Genworth’s obligations”

The 90% guarantee kicks in after shareholders are wiped clean. I doubt shareholders care much about it.

Anonymous
Guest
Anonymous

@patriotz: “Could you explain to us how the amount of money you make or lose on a house (or any other investment) depends on your age or race?”

He never said that it does. He used the word “hurt”.

Obviously a younger person has more time to recoup their losses, whereas a boomer who was relying on their equity for retirement will suffer more (having already passed their peak years of income generation).

As for a rich foreigner who buys a place sight unseen for millions of dollars on cash and has no intention of living there, should I draw you a diagram?

You need to start reading what people are saying rather than focusing on trying to appear smarter than them.

patriotz
Member

@Anonymous:
As fixie pointed out, what he said was a bunch of manipulative crap. I don’t have to “try” to “appear” smarter than the poster.

As to what you said, it was the locals who drove prices up and it’s the locals who will take the hit going down. They are the authors of their own misfortune. I don’t see any reason to feel sorry for them just because some rich person can afford to take the loss and they can’t.

Two self-righteous bear-bashing posts on this thread already. I can smell the fear.

b5baxter
Member

New inventory graph at: http://vancouverpeak.com/groups/inventory-graph/forum/topic/inventory-graph/?topic_page=2&num=15#post-2437

After marching in lock step with the 2010 trend inventory has decided over the last few days to chart a new course.

Over the last month the average daily increase was:
55
At this rate we will reach 19,000 in 1 days (Jun-08-12)
At this rate we will reach 20,000 in 20 days (Jun-27-12)
and 25,000 by September 26, 2012

Thanks PaulB for the numbers!

Troll
Guest
Troll

@b5baxter: Reposting yesterday’s post from ZRH2YVR:

Seems that REBGV is posting some sales late in the evening now so the PaulB numbers are not showing all the transactions. For June 5 there were 141 sales and June 5 there were 157 sales. Quite a difference from what was there when PaulB posted.

We are not quite on the trend to come below 2008 unless the sales start to slow a lot. Where we are seeing a large volume increase is in East Van attached. Otherwise, most other areas are lower than 2008 however including right now Van-West condos.

So it looks like June has not begin as slowly as Paul’s numbers show. YatterMatters has correct numbers from yesterday.

jesse
Member

@Anonymous: “As for a rich foreigner who buys a place sight unseen for millions of dollars on cash and has no intention of living there, should I draw you a diagram?”

The biggest lesson here, in my view, is that showing no emotion is the best thing you can do for those in self-inflicted financial hardship. Choosing financial winners and losers based on morality is dangerous.

Navin R Johnson
Guest
Navin R Johnson

Do folks in here think we’ll reach 25,000 listings at some point this year?

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

@patriotz: “Two self-righteous bear-bashing posts on this thread already. I can smell the fear.”

That’s a very strange perception. I don’t understand why you revert to a “us versus them” attitude. Not what I expect from a rational, thinking person.

As to my ‘manipulative’ question, anti-HAM sentiment exists on this message board. I just wonder how anti-HAMers will feel when the damage is done to Mr and Mrs Woodcock and not Mr and Mrs Wong.

patriotz
Member
DaMann
Member
DaMann

@b5baxter:

Love your numbers and appreciate the work. But you can’t extrapolate the days to reach 25000 listings as we all know listings fall off at a certain point and don’t keep piling on through to October.

DaMann
Member
DaMann

@Navin R Johnson:

Not a chance. In fact I don’t think we will hit 20k. I wish we would but I don’t think we will. I can say with almost 100% certainty we won’t hit 21k ( I would like nothing more than to be wrong on this). People keep saying the crash is here, bubble is popping. I don’t see ANYTHING that leads me to believe this. The message is not in yet. There will be no more price increases but I also don’t think we will see much of decreasing prices yet either. Without help from interest rates I see a sideways market for the next few years ( once again I hope I’m wrong).

registered
Member
registered

16 Bull! Bull! Bull! Says: “I just wonder how anti-HAMers will feel when the damage is done to Mr and Mrs Woodcock and not Mr and Mrs Wong.”

What does your wondering have to do with the real estate market? Want to bet everyone but you knows the answer? Start with 4, ask for help on the big words:
http://www.cassiopaea.com/cassiopaea/emotional_manipulation.htm

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

@fixie guy: “What does your wondering have to do with the real estate market?”

Isn’t it obvious? I’m wondering how people feel about the housing market participants. I not sure why you need that explained to you.

It seems my question touched a nerve. I didn’t expect such bizarre reactions. I apologize if I upset anyone. I won’t talk about it anymore.

Todd
Guest
Todd
@Bull! Bull! Bull!: As to my ‘manipulative’ question, anti-HAM sentiment exists on this message board. I just wonder how anti-HAMers will feel when the damage is done to Mr and Mrs Woodcock and not Mr and Mrs Wong. Sure anti-HAM sentiment exists, but I’m sure not in competition for multi-million dollar homes so they don’t concern me. The people buying the normal family home in Vancouver are not HAM. The people who’ve driven up prices in Vancouver are debt riddled locals and many of them are real-estate crazed boomers. Most of them have done very well, but I know several boomers who look to be doing well and have lots of real estate but are just scraping by. Hopefully they have a contingency plan in place if real estate doesn’t work out to fund retirement, but I won’t cry for… Read more »
b5baxter
Member
@DaMann: In 2008 listing did not peak until October. It is certainly possible for that to happen again. After all, listing are already higher than they were in 2008 for this time of year. And if I remember right interest rates were falling during the spring and summer of 2008. I don’t think that is going to happen again. I am not making any predictions that we will reach 25,000 in September. I am only pointing out that IF the current 30 day average continued we would. It is a big “IF” However I am curious to know why you think this year will be “better” than 2008 given the fact that: 1. We are already at higher inventory levels than in 2008. 2. Interest rates can not go down like they did in 2008. 3. The federal government is… Read more »
rp1
Guest
rp1

#15 @Navin R Johnson: “Do folks in here think we’ll reach 25,000 listings at some point this year?”

I think we’re topping out now. If not, soon. The question is whether sales pick up, and if so, by how much. I’m sure the lousy weather has postponed househunting for some. We could have a “hot market” for a few weeks, with the media touting “reduced prices” and “bidding wars”.

WFT?
Guest
WFT?

@rp1: “I’m sure the lousy weather has postponed househunting for some.”

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.

wpDiscuz