Buyers market is a silly way to put it

What does ‘Buyers market’ mean to you?

Is it a market in which the buyer has lots of choice or gets a reasonable price?

..because they aren’t the same thing.

Now that prices are dropping from their record highs on Vancouver real estate, we’re seeing the term ‘buyers market’ bandied about in the media a lot.  And with a huge number of places for sale and actual transactions falling to a 10 year low there’s lots of choice.

But prices are still near record highs!

Real estate is a slow illiquid market, it takes LOTS of time for trends to move through.  Just take a look at the USA, there are some people thinking they’ve hit bottom in some markets after SIX YEARS of falling prices.  Don’t expect deals within a few months, or even a few years.

Real estate marketers will use the term ‘buyers market’ a lot in the coming years, because they make money off transactions.  If it’s not a good time to sell it must be a good time to buy right?

There is one nice thing happening with the shift in the local market though: the Vancouver Sun is starting to publish a bit more variety when it comes to RE market opinion:

Investors in stocks wouldn’t consider a drop in volume to be a buyer’s market in the absence of price changes. The adage that volume precedes price instructs investors to be patient. There’s no compelling reason for real estate buyers to act differently.

Bravo Vancouver Sun, Bravo.

104 Responses to “Buyers market is a silly way to put it”

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    Bo Xilai Says:
    1

    I’ll know it’s a buyer’s market when Able Auction is auctioning off real estate agents’ repossessed E-Series Mercedes and the 7 series BMWs…

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    patriotz patriotz Says:
    2

    Since prices are always determined by the buyers, it’s always a buyers market.

    The only difference is whether prices are determined by smart buyers or stupid buyers. We are still in stupid buyers mode, by a mile.

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    CanuckDownUnder Says:
    3

    Not sure how this got past the editors but it looks like Melbourne real estate might not be so hot after all:

    “Property analyst Mark Armstrong predicted appreciation would be slowest for home owners in outer suburbs, who could see negative to zero growth in values for as many as 20 years.”

    And there’s more!

    “Lots of baby boomer parents who have made money out of property gave sage advice to children to pour their money into bricks and mortar because prices double every seven to 10 years. Young people who were sold that lie will find it very difficult to escape and it’s a tragedy.”

    But wait you say, Australia has prudent lending standards!

    “Despite the stockpile of a record 55,290 unsold homes in Melbourne in June, many developers are still offering 100 per cent finance, with no deposit to buyers.”

    Read more: http://www.smh.com.au/money/home-owners-face-repayment-disaster-20120709-21qp4.html#ixzz207vvJnk9

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    patriotz patriotz Says:
    4

    @CanuckDownUnder:
    Despite Because of the stockpile of a record 55,290 unsold homes in Melbourne in June, many developers are still offering 100 per cent finance, with no deposit to buyers.”

    That’s better.

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    specialfx3000 Says:
    6

    Another hit to our local economy.

    http://www.cbc.ca/news/business/story/2012/07/09/qlt-job-cuts.html

    “Vancouver biotech firm QLT is cutting 146 jobs.”
    That apparently translates to about 66% of their workforce.

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    Piklishi Says:
    7

    Just like they say ” it is buyer’s market only if money is no object”

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    Ralph Cramdown Says:
    8

    I think it’s reasonable to characterize this as a buyer’s market, regardless of price/value. The meaning of the term in R.E. has traditionally been “Who’s got the negotiating power?”

    You could ask another question: Are the auctions on the courthouse steps in Florida right now buyer’s markets? The deal is: Certified cheque or draft for the entire amount, proof to be provided before bidding, all properties as is and where is, no conditions. Some amateurs have been known to buy worthless second liens when they thought they were bidding on firsts.

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    joe_blown_away_by_high_housing_costs Says:
    9

    Globe and Mail’s “summer of dread” article forgot to mention the popping the real estate bubble in Canada. Economic woes in every country of the world except for the bleeding obvious one right here in Canada are discussed.

    http://www.theglobeandmail.com/report-on-business/economy/summer-of-dread-dashes-recovery-hopes/article4398661/

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    Consider some of the drivers for local RE prices. “Buy now” urgency, amateur investment (45% DT, 33% Van West and East, 56% UBC) on the part of those who have only known price increases, free money with liberal qualification and ridiculous terms, builders of all types going full blast with no perspective on supply/demand metrics down the road, wealthy immigrants etc. etc.

    While many of these dynamics feed on themselves on the way up, they will tend to cascade on the way down. There were markets in the US that saw the greater majority of their decline within the first 18 months, notwithstanding they are still dribbling down years later. I can see no compelling argument for a slow decline in Vancouver but many for a shorter term, significant drop – still like watching a train wreck from the driving edge, but a much faster derailment than many imagine.

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    Happy July 9th, everybody!

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    Anonymous Says:
    12

    @Bo Xilai: …I’ll know it’s a buyer’s market when Able Auction is auctioning off real estate agents’ repossessed E-Series Mercedes and the 7 series BMWs…….

    Never goingt to happen! They’re all leased! Just another peice of the swim trunks that will float away when the tide goes out.

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    joe_blown_away_by_high_housing_costs Says:
    13

    Check out this bullish comment from kidcanuck1 over at Globe and Mail:

    “I’m always leery of widespread predictions by pundits and so called “experts” because they usually don’t happen. It’s true that if one looks at traditional measures of affordability, housing prices are way higher than they should be. However, there are other factors these days that may be more important in the determination of current prices:

    -The foreign element. It’s very clear that there has been a huge foreign demand for housing in Canada’s major cities. We all know about the Chinese appetite for Canadian real estate, but if the Euro implodes there will be significant flows into properties from Europeans as well, looking to put investments in “safe” currencies. It’s hard to beat Canada on that score currently.

    -Interest rates. A $500K mortgage at 5% for 5 years costs about $2500 a month. This is not an onerous amount to carry for most working people who want to own a house, especially when there are 2 incomes. No matter what one says about rental costs, renting a decent house will set you back more than that with no hope of accumulating equity. It’s difficult to see rates rising in the near future.

    -Alternative investments are highly uncertain these days with deteriorating economic conditions world wide and stock markets gyrations stemming from massive manipulations of both “too big to fail” bank traders and central bankers. There is little retail investor confidence in stock markets.”

    http://www.theglobeandmail.com/globe-investor/housing-bubbles-messy-and-unpredictable/article4399058/comments/

    -Massive monetary stimulus everywhere which should eventually translate into higher inflation although this will continue to be partly hidden by the statistical games played by most countries’ statistical agencies. Most people have a grip on what their cost of living and they know better.

    All these forces will probably hold significant real estate price declines at bay for now. In fact, they may continue to push the market up for some time.

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    fixie guy Says:
    14

    13 joe_blown_away_by_high_housing_costs quotes: “I’m always leery of widespread predictions by pundits and so called “experts” because they usually don’t happen…”

    For a decade+ the overwhelming majority of pundits and so-called “experts” hailed an ever-rising and stable Canadian housing market, and the ‘reasoning’ provided is straight from the real estate pundit playbook. kidcanuck1 is a hypocrite and none too bright.

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    ArthurFonzarelli Says:
    15

    In agree ent with Ralph…generally it connotes bargaining power at present prices. But it is misleading because it doesconnote good “value” which most of us agree is not the current situation.

    According to Global “News” this morning we aren’t even in a buyer’s market…the drop to 25 years won’t have any impact. This, from somebroker whom I have never heard of. I loved his comment, in essence: nothing to see here, might slow things for a couple of months but then we wil return to…ummm… (he pauses) our umm normal trend. End quote. No facts, no logic, just happiness that it isn’t a big deal and will all be “normal” soon.

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    Anonymous Says:
    16

    @JR: “I can see no compelling argument for a slow decline in Vancouver”

    Except the fact that is what we are seeing right now. We will see how much impact the new CMHC rules will have and if things fall off a cliff in the Fall (no pun intended). A European financial criss should also speed things up. I suspect the first 20% drop will come within a year and then another 30% in the next 3 to 4 years after.

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    Anonymous Says:
    17

    @joe_blown_away_by_high_housing_costs: “if the Euro implodes there will be significant flows into properties from Europeans as well, looking to put investments in “safe” currencies.”

    Yes sure kind of like in 2008 when the US imploded. What we saw was US investors exit from Canadian real estate (Whistler, Okanagan, etc.) and a collapse in real estate partly fueled by this. The strong relative Canadian currency is a negative for foreign real estate investment not a positive. Funny how people get these things backwards.

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    Anonymous Says:
    18

    @joe_blown_away_by_high_housing_costs:

    Since when CAD is considered a safe currency? If something happens to the Euro zone, the USD, Japanese yen, or Swiss fran are still considered to be the safe currencies. Not commodity price dependant CAD.

    If you are a European, why would you want to own real estate in Canada? Health care? Democracy? Education system? Political stability? Human rights? Climate? Their needs aren’t the same as those of Chinese.

    US (Hawaii included) looks a lot more attractive right now.

    $2500 IS a lot of money for most people unless you are a two professionals with no kids. This kid should do some math to figure out how much income is needed to afford $2500. On top of housing costs, you still need set aside money for other things, such as RRSP, car, kids, trips, etc…

    I must say this kid has never managed finances himself.

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    Makaya Makaya Says:
    19

    Coming back to the debate yesterday “when do we know prices start dropping?”, we have today a clear indication that this is happening in Vancouver today.

    Check out the latest post of Vancouver Price Drop.

    #5) Address:# 110 721 HAMILTON ST, Uptown, New Westminster

    July 07 V960713 $189,900 $-60,000 -24%

    Comment: Last June the unit #107, which has an assessed value of $15K less than this unit, sold for $212K

    Assessment: $211,800

    Here we are folks, get your popcorn, it just accelerates from here…

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    Not much of a name... Says:
    20

    @Makaya: I’m seeing similar things in NV at the moment. Condos that I’ve been watching (that have been sitting for quite some time) are now starting to show downward movement in prices. Particular ones that have caught our eye are now asking under assessed. These are units that are about four years old and are now at about the same price they were when first purchased (including taxes and closing). We looked at a unit yesterday and the last thing the realtor said was “the vendors are motivated”. Interesting times indeed.

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    Anonymous Says:
    21

    @Makaya: “Coming back to the debate yesterday “when do we know prices start dropping?”, we have today a clear indication that this is happening in Vancouver today.”

    I suspect we will see a lot of price drops over the next couple of weeks. Realtors will be pushing for price reductions using the new CMHC rules as justification to push their client into lowering their asking price. They will also push clients into accepting lower offers. Realtors have to eat and those that don’t do this wont be making any sales.

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    Best place on meth Says:
    22

    @CanuckDownUnder:

    ““Lots of baby boomer parents who have made money out of property gave sage advice to children to pour their money into bricks and mortar because prices double every seven to 10 years.”

    Selfish boomers are now using their kids as cannon fodder to keep their own property values inflated.

    Assholes.

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    Who's Laughing Now? Says:
    23

    This was, by far, the greatest weekend of opens yet! Empty opens! Lowered prices! Great to see smiles finally wiped off of smug boomer faces, whose ongoing rhetoric has continued to say, if we (gen X) just worked a little harder, we would have what they have, too. The boomer on the news recently with the house listed at $2 million for two months that has not yet seen an offer? Ha ha ha. Should have cashed out earlier. On the north shore, have seen the condo prices here fall an average of $20,000 since the mortgage tightening rules. To the North Shore realtor that, only a year ago told us not to bother putting in a low offer because, quote, “we have a busload of interested Chinese” – HA HA HA. To quote the writer of an article printed right before the mortgage tightening, in regards to complaints about affordable housing for gen xer’s, “SUCK IT UP”.

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    patriotz patriotz Says:
    24

    @Ralph Cramdown:
    “The meaning of the term (buyer’s market) in R.E. has traditionally been “Who’s got the negotiating power?””

    The buyers, all the time, because somebody always has to sell, but nobody has to buy.

    You might not have bargaining power because someone else may be willing to pay more than you. But that means you’re not the buyer, someone else is.

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    gokou3 Says:
    25

    @Makaya: Went to an open house at a burnaby condo yesterday. When we buzzed the unit, no one answered. Called the realtor, was told that the owner was showing the unit himself. Buzzed a few more times before being admitted. Found out that the owner was actually taking a nap. Apparently we were the only visitors with the house opened for over an hour by then. The unit was overpriced compared to similar units in the same building. No wonder even the agent didn’t show up.

    Oh, there’s another open house at another burnaby condo from 2-4pm. We saw the agent left at 3:30pm, apparently too bored. What a professional of good work ethics.

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    patriotz patriotz Says:
    26

    @Best place on meth:
    “Lots of baby boomer parents who have made money out of unrealized capital gains on property”

    That’s better. But not for them.

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    gokou3 Says:
    27

    One more open house i want to mention. A townhome in south burnaby. Originally listed for $619k in early June. Cut price twice and now $40k lower — but is only inline in terms of $/SF with other units in the same complex. We found out from agent that the owners are a retired couple who has bought another place already. I guess they are motivated to sell. Agent said there had been 6 showings since the latest price drop and is confident that he will get a sale this week. I will cross my fingers for him — NOT.

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    This might be good for a laugh and put things in perspective when industry experts peg Vancouver at 15% overvalued…

    http://vancouverpricedrop.wordpress.com/2012/07/09/apparently-vancouver-is-15-overpriced/

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    Anonymous Says:
    29

    @an observer:

    LOL, how about 150% overvalued!

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    Dan in Calgary Says:
    30

    @VHB “Happy July 9th, everybody!”

    For some stupid reason there were fireworks last night here in Calgary. More than your usual backyard celebration. Louder, longer. Couldn’t figure out why. Perhaps whoever-it-was were ushering in July 9th!

    Should we all write our MPs and suggest July 9th hereinafter be known as National Housing Awareness Day?

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    French_In_Exile Says:
    32

    There is a new development in East Van, on Hastings, right across the street where I live (Alba it’s called). The sales office and the presentation suite opened on July 7. Sales are starting on July 10 (why the rush? lol.). Almost NOBODY showed up… The sales guy I was talking to seemed a bit desperate…

    Sweet sweet times we are living right now…

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    specialfx3000 Says:
    33

    @specialfx3000:

    Earlier this morning I posted QLT’s downsizing news.

    On this same day, another Vancouver based BIO company, Cardiome, announced an 85% reduction in their workforce. Not sure how many people that translates to.

    http://news.yahoo.com/cardiome-pharma-cut-85-percent-jobs-135428364–finance.html

    I would imagine these Bio companies had good-paying jobs that are now disappearing.

    Definitely not the time for anyone to be over-extended and debt-laden; Jobs are being pulled under people’s feet at fast and furious pace.

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    Teddybear Says:
    34

    I was utterly disgusted when I saw this V960287 at http://alturl.com/zu3zr

    why? Just a few months ago this suite was sold for about 320k and this a-hole want this much money now???? For one bedroom???? I don’t know how the listing agent can show his face to anyone! Disgusting, despicable greedy sob! Yuck!!!

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    Makaya Makaya Says:
    35

    @Teddybear: Well, this is a candidate for future Vancouver Price Drop posts. Just be patient…

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    specialfx3000 Says:
    36

    @Teddybear:

    Why don’t you set up a few appointments to get them all excited but don’t show up. Then finally, set up another one and show up and offer 319k with lots of subjects just in case they accept. Or transpose the ‘3’ and the ‘2’ and low-ball them at 230K.

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    gokou3 Says:
    37

    @specialfx3000: Regarding QLT & Cardiome, I am told by my friend who works in this field that they are among the biggest players in the local scene. Oops.

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    @Teddybear: some dum-ass flipper about to get burned!

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    Vote Down The Facts Says:
    39

    @Teddybear: “why?”

    The description implies they did lots of renos. Not enough to justify an extra $100K, mind.

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    @Vote Down The Facts: dum-asses!

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    Vote Down The Facts Says:
    41

    @Dan in Calgary: “For some stupid reason there were fireworks last night here in Calgary. More than your usual backyard celebration. Louder, longer. Couldn’t figure out why. Perhaps whoever-it-was were ushering in July 9th!”

    100th anniversary of the stampede. You say you live in Calgary?

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    fixie guy Says:
    42

    24 patriotz Says: “You might not have bargaining power because someone else may be willing to pay more than you. But that means you’re not the buyer, someone else is.”

    Over-simplification risks a tautology. The seller selects the buyer. Buyers compete, hence the bidding wars. The overall market determines the pool of buyers, explaining the impact of, for example, mortgage policies on prices. To my knowledge there are no pure ‘stupid buyer’ schools of economic thought in academia.

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    Anonymous Says:
    43

    @Teddybear:

    No matter how much reno was done, I wouldn’t pay that much money for the ground floor suite on that particular building in West End.

    What a terrible investment…

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    By the way. A while ago, I posted the my grams listed here east van special for $1.2 million. (assessed Value)
    It sold! here is the MLS listing. MLS# V950797 – Sold for $950,000.00
    only 2 offers, both low-balls.

    She was MOTIVATED to sell, took the first low-ball and RAN! Like I had said, bought in 1950-somthing for $6500.00 and lived there 56 years… not a bad investment.

    The listing is gone but info still can be found.

    Good on ya Grama! I feel bad for the 30-somthings couple with kids that have thrown away their life on that east-van S-hole that needs a ton of reno’s.

    I hope they are like all the big-shots(the posters at Garth’s site) that makes $250k + LOL

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    Mick Murphy Says:
    45

    http://www.news1130.com/business/article/380961–vancouver-housing-market-coincides-with-chinese-economy

    Vancouver housing market coincides with Chinese economy
    Chinese immigration peaked in 2005 matching a peak in existing home sales

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    Chem Guy Says:
    46

    @Makaya: “Below assessment” eh? BC Assessments were made last week on July 1st. We are just starting to see prices slide so what will be interesting is whether assessments will go up, down, or flat. I’m predicting flat which will likely be an awakening moment for many homeowners who eagerly open their envelopes to “see how much they’ve made” (at least in their minds) and find out that housing doesn’t always go up.

    By the time assessments are published, I’m willing to bet that no house will be listed above assessment again for at least 5 years.

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    patriotz patriotz Says:
    47

    @Vote Down The Facts:
    He forgot to add the smiley for the humour impaired.

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    random321 Says:
    48

    V959658 Asking price is $2,490,000. Description: “Tenanted occupied with $1,665 rental income at month to month base.”

    Wow, that’s the craziest price to rent I’ve seen.

    Also, does it drive anyone else crazy that it’s nearly impossible to find a MLS description that doesn’t contain grammatical or spelling mistakes?

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    French_In_Exile Says:
    49

    @Mick Murphy: Well, may be those who doubt that HAM is the reason behind these inflated prices might want to reconsider their position…

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    gokou3 Says:
    50

    @French_In_Exile:According to article, “Chinese immigration peaked in 2005 and “was matched by a peak in existing home sales.” 2005 is definitely not a peak price or sales volume if I recall the stats correctly. I am not sure how the conclusion that “There is a clear correlation between Chinese immigration and real estate activity in Vancouver” is drawn.

    Besides, correlation may not be causation. Note also CMHC’s insurance cap zoomed from $100B to $600B from 2006 to 2012 (again if i recall correctly). I would say the correlation is much stronger there.

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    ZRH2YVR Says:
    51

    Well – Looks like the “Spike” in sales volume from the new mortgage rules has shown up a bit. One thing that I have noticed however is that there is a significant slow down of SFH sales while there has been a significant spike of condo sales. Sounds like those most affected by the rule changes have moved their purchase decisions immedeiately forward. The reporting of these sales should now trickle in over the next 2 weeks and be evident in the July numbers.

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    Vote Down The Facts Says:
    52

    CPP Investment Board to plough $1bn into Australian real estate:

    http://business.financialpost.com/2012/07/08/cppib-australia/

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    Vote Down The Facts Says:
    53

    @random321:

    Looks like that place sold in a week: http://www.julialau.ca/Properties.php/Details/521

    “July 2nd, 2012 I just finished uploading this House for sale, 4564 1ST Ave W, Vancouver West, British Columbia”

    “July 9th, 2012 I just sold this House at 4564 1ST Ave W, Vancouver West, British Columbia Point Grey.”

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    van_coffee Says:
    54

    VDTF’s:

    I was also going to post that.

    Julia Lau should be in Playboy. Ymmmm.

    VC

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    joe_blown_away_by_high_housing_costs Says:
    55
    Vote Down The Facts Says:
    56

    @van_coffee: “Julia Lau should be in Playboy. Ymmmm.”

    Don’t get too excited. According to WaybackMachine that photo is at least 2 years old ;)

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    van_coffee Says:
    57

    VDTF:

    Don’t worry.

    I am sure that is a highly modified photo on top of a highly modified face. This is a Chinese Real Estate agent after all…..I am not sure if there is a more vain combination.

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    random321 Says:
    58

    @Vote Down The Facts:
    Looks like that place sold in a week: http://www.julialau.ca/Properties.php/Details/521

    Interesting, thanks. I guess with a rental yield like that, investors must have been lined up around the block for a chance to buy it.

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    Vote Down The Facts Says:
    59

    @random321:

    I imagine some kind soul here with MLS access could probably tell you the sale price..

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    French_In_Exile Says:
    60

    @random321: Not to mention that it was priced 300K below assessment.
    Crazy!

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    French_In_Exile Says:
    61

    @gokou3: No matter how you interpret these numbers, the truth remains that the past decade saw a soaring number of immigrants (who are mostly from Asia, for various reasons) as well as a soaring RE valuation.

    I’m not being rac!st or anything, I’m just pointing out the obvious: Canada is one of the most (if not the most) open countries in the world. If I were rich and living in a poor country, and wanted to protect my money, I’d invest that money where it would be welcomed and would make babies: to Canada or the USA. Western Europe would be a nice destination too but if don’t intend to become a resident, I’d be taxed to death.

    The reason behind the current RE slowdown in Vancouver is manifold:
    – China’s economy slowing down
    – RE valuation totally maxed out
    – RE in the USA bottoming out (it makes more sense to invest there NOW more than ever): http://blogs.ft.com/beyond-brics/2012/06/12/chinas-capital-flight-us-real-estate-edition/#axzz1ziwiz51r
    – And the new mortgage rules that will certainly discourage LOCAL RESIDENTS(chinese, canadians, europeans, whoever) in going into too much debt. That would not impact overseas investors. But as I pointed out above, they don’t have any reason to invest in the Lower Mainland when they can go to the USA or even to other places in Canada with a lot more upside potential (Quebec comes to mind).

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    market stats Says:
    62

    @ZRH2YVR “spike”

    It would seem that this spike is good news. The weak credit buyers loading up while they can, while the stronger credits who could buy SFH’s are staying away. So the volumes and average prices hold up for another month while this data gets reported, and then what?

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    chilled chilled Says:
    63

    Is this not a buyers market???

    http://www.breyers.ca/product

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    Boombust Says:
    64

    I see that “financial guru” Michael Campbell was on the Global TV early News at 5.

    It wasre: the local/national RE market…he’s in full CYA mode,natch.

    So affable. Such an intense furrowed brow! Creep.

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    gokou3 Says:
    65

    @French_In_Exile: I am not saying your suspicion that HAM is a factor in the current inflated market is wrong, but my comment asserted that the article’s conclusion is illogical and contradicting. I do agree that Canada is one of the most desirable country to be for immigrants.

    However, I am doubtful that immigrants putting their money into 2nd, 3rd, nth residences is related to “protection of their money”. Their money would be pretty well protected if they just leave it as cash in a canadian bank (just as a simple example; i know banks can go bankrupt but let’s go too far).

    There’s no need to buy more than one residence other than as investments / speculations vs. protection. If this line of thinking is true, one can very well make the case that when the market turns, these investors / speculators will pull their money out faster than the locals.

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    kansai92 Says:
    66

    Vancouver losing many high paying jobs like game development, biotech.
    Meanwhile the only business opening up are No Frill’s and coffee shops.
    Talk about an economic wasteland.

    Like or Dislike: Thumb up 0 Thumb down 0

    French_In_Exile Says:
    67

    @gokou3: I mentioned protecting money,but also allowing it to make babies :). Investing, in short.

    I do think that the more conservatives investors will hold onto their stock while the more aggressive will just cash out (i.e. more inventory, i.e. lower prices i.e. ‘correction’) and go somewhere else. Just what we are witnessing right now…

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    Anonymous Says:
    68

    @kansai92: “Vancouver losing many high paying jobs …”

    Don’t worry! According to this excerpt from an MLS listing (on the price drops blog), Richmond has lots of great jobs!

    “Investors should take note!!” … “heart of DT Richmond!! Effluent Richmond is the Pacific Gateway to Canada, and with its well-educated and skilled work forces, attracts myriads of mega multi-national business establishments.” …

    “Effluent” Richmond is right… Does Dollar Giant count as a “mega multi-national”? Which “well-educated” member of the “skilled work forces” wrote this?

    Like or Dislike: Thumb up 0 Thumb down 0

    I don’t have any bear food for y’all today but I notice there are still scraps on the plate that you’re leaving behind, uneaten.

    Everyone is so busy with the rule changes that they’ve forgotten to drool over the angst, cost and potential price drop from the Condo Depreciation Reports that will become (mostly) mandatory come December 2013. I imagine by the next spring market, condo owners will be busy spending additional money they didn’t have compiling a list of expenses no buyer wants to contemplate.

    In fact, should the market remain frigid, it’ll be a short-cut for buyers to ask for discounts based on upcoming repairs–all before getting to the accepted offer/inspection stage. That’s a nice reversal on the ‘bring your inspector’ mantra from realtors.

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    Vote Down The Facts Says:
    70

    @kansai92: “Vancouver losing many high paying jobs like game development, biotech.. Meanwhile the only business opening up are No Frill’s and coffee shops.”

    What’s it’s losing in games, it’s gaining in film production and digital effects.

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    @mattymatt123:

    Over 65 years I caclulate an annual rate of return of just under 8%. That excludes all transaction costs and maintenance costs. A not bad investment. But some investments could have done better than that (the S&P index for example).

    And she is selling at the peak. Imagine if she had sold at another time.

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    New Listings 278
    Price Changes 195
    Sold Listings 158

    TI:19053

    http://www.laurenandpaul.ca

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    @Vote Down The Facts:
    “What’s it’s losing in games, it’s gaining in film production and digital effects.”
    Consider this:
    Labour Market Monitor: British Columbia
    May 2012.
    BC’s economy has cooled. The province’s gross domestic product will grow by only 2.3% this year, down from 2.9% growth in 2011. Several negative indicators are impacting the economic forecast, such as a weakening housing market, cooling Asian demand for our exports, and moderate US economic growth. However, there are still some positive trends: condo construction is up 32% from last year, and employment improved by 1.6% in March compared to March 2011.

    Lower Mainland losing film industry jobs. The local film industry is losing an estimated 2,000 jobs and over $80M in investment due to the X-Men Wolverine movie franchise relocating to Australia. The decision was driven by a one-time $13M cash incentive that Australia offered to Twentieth Century Fox to offset the higher value of the Australian dollar. Lower Mainland representatives say the Vancouver film industry remains competitive and should be able to make up the shortfall as other productions move in. Nevertheless, the decision is a blow for Vancouver which has hosted three X-Men movies since 2003. (Business in Vancouver, April 30)

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    patriotz patriotz Says:
    74

    @b5baxter:
    You’re looking only at capital appreciation and neglecting yield (rental value). Prior to the bubble era (1980’s forward) that would have been around 6%, lower since. Total return probably around 12% p.a.

    Over the same period the S&P total return increased about 500 fold or 13% p.a.

    And of course Vancouver RE is at the top of the biggest bubble ever, and the S&P isn’t.

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    Anonymous Says:
    76

    Just saw tonight’s CBC news.

    All I can say is…

    Hey Cleveland, Toronto and Vancouver will be joining you real soon…

    Like or Dislike: Thumb up 0 Thumb down 0

    Told-you-so Says:
    77

    And now, a resolution to the Friday night limerick:

    I’d like to give thanks to paulb
    For posting his stats diligently
    We bears endure waiting
    Upon hearing you stating
    Listings equalling 19053

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    patriotz patriotz Says:
    78

    Amber Dykstra of Edmonton sped up her home-buying plans by a year when she heard about the mortgage rule changes. She finalized her 30-year mortgage on Monday just before the rules were tightened.

    “The difference between a 25-year and a 30-year amortization can be $200 or $300 a month,” she told CBC News. “That can be the difference between eating soup and real human food.”

    That’s just for the first 25 years Amber. Then for the next 5 years the person who takes out the 25 year will have a paid for house while you will still be making the full payments.

    But you’re going to be rich by then anyway right?

    http://www.cbc.ca/news/business/story/2012/07/09/bmo-mortgage-housing.html

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    Boombust Says:
    79

    “Hey Cleveland, Toronto and Vancouver will be joining you real soon…”

    Whaddabout Detroit? Huh?

    Campbell was flapping his gums again on Global News at 6.

    Maybe his brother can get him a job in London?

    Then! We! Won’t! Have! To! LOOK AT HIM ANYMORE!

    Such a failure. Can you imagine trusting your $$$$ to THAT guy?

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    Anonymous Says:
    80

    Neighbour had an open house this Saturday. Nobody showed and the Realtor was sitting on the deck furniture yapping on her phone for hours.

    This is in Squamish….gateway to the Olympics or whatever BS copy they can make up to make it seem better than a logging camp on steroids.

    The SQ market is done…you can see the desperation…

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    Buy’ers’ market is one where the buyer has the advantage in negotiations. Price and inventory are not necessarily connected to it, but likely are, at least on trend.

    Vote down, CPPIB investment: wow, nothing like buying at the top.

    And thanks Paul!

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    ReadyToPop Says:
    82

    “Large banks are all offering money, but no one is taking it,” said a Shanghai dealer quoted by Reuters. This is more or less what happened in Japan in the 1990s, what is happening in Europe now. It is what happened to half the world in the 1930s.
    The World Bank says China still has plenty of scope for fiscal largesse – cutting taxes and boosting spending – so it should at least avert full depression. If only the West were so lucky.
    But at the end of the day, the country is bursting with industrial over-capacity. As Caixin reported recently, eight of the ten largest shipyards did not receive any new orders in the first five months of the year.

    China heads for a deflationary shock

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    Waiting to exhale Says:
    83

    Here is another tidbit from the front lines:

    I have a co-worker who just bought a brand new $1.5 million McMansion out in Port Coquitlam last week. Her husband works for the government full time while she works part time (also with the government) and they have three young children. I know that they just got an inheritance the last few months and that is why they decided to upgrade to this McMansion.

    I asked her today if the purchase of her new house is dependent on the sale of her current one. She said “No, but if I don’t sell we will be heavily in debt.” I then asked, “What if you can’t sell it before you have to move into your new house?” She responded “We won’t sell unless we get the price that we want.” I then stated, “I don’t think right now is a good environment for selling a house.” She gave me a blank stare as I walked away.

    I find it amazing people feel that they should be able to demand a certain price whenever they sell their home. It was possible maybe last year but don’t people read the news, look at the stats, or notice the real estate trends for the last couple of months. I mean these are university educated people and they believe they can sell their house “at a price we want” without even considering the possibility that they will not be offered a price that they deem acceptable. I wonder what will happen if they can’t sell their home in the next few months.

    It will be interesting to see what happens in this case and I will report back whenever there is an update to this situation.

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    Anonymous Says:
    84

    @patriotz: “And of course Vancouver RE is at the top of the biggest bubble ever, and the S&P isn’t.”

    I agree with you on the first part but not so sure the S&P won’t give back around 50% of its value over the next couple of years too.

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    Anonymous Says:
    85

    @patriotz: “The difference between a 25-year and a 30-year amortization can be $200 or $300 a month,” she told CBC News. “That can be the difference between eating soup and real human food.”

    Good thing people can afford the mortgages they are taking out. As long as your budget can allow for ‘real human food’ after making the mortgage payment all is good. I feel sorry for everyone who buys going forward with the new rules. It will be soup only 3 meals per day.

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    Anonymous Says:
    86

    @ReadyToPop: “Large banks are all offering money, but no one is taking it,”

    AKA pushing on a string.

    Like or Dislike: Thumb up 0 Thumb down 0

    Navin R. Johnson Says:
    87

    @Waiting to exhale:

    Observation about your friend…

    Smokin’ some great hootch…

    Like or Dislike: Thumb up 0 Thumb down 0

    Dan in Calgary Says:
    88

    @Dan in Calgary: “For some stupid reason there were fireworks last night here in Calgary. More than your usual backyard celebration. Louder, longer. Couldn’t figure out why. Perhaps whoever-it-was were ushering in July 9th!”

    @Voting down the facts: “100th anniversary of the stampede…”

    Yup, I knew there would be a stupid reason, lol. Definitely not a fan of the Stampede — it’s not much more than a party. Ushering in new mortgage rules is a better reason to party.

    Like or Dislike: Thumb up 0 Thumb down 0

    good-format Says:
    89

    Someone rushed to buy before the rule changes

    http://www.cbc.ca/news/business/story/2012/07/09/bmo-mortgage-housing.html

    Amber Dykstra of Edmonton sped up her home-buying plans by a year when she heard about the mortgage rule changes. She finalized her 30-year mortgage on Monday just before the rules were tightened.

    “The difference between a 25-year and a 30-year amortization can be $200 or $300 a month,” she told CBC News. “That can be the difference between eating soup and real human food.”

    Like or Dislike: Thumb up 0 Thumb down 0

    Disbelief Says:
    90

    89 The last Greatest fool has now purchased!!! Good now time to let the air out of that over stretched giant balloon sized bubble!!!
    I have a question What happen to the 0/40 guy that puchased 4 years ago and now has to refi at 25 years? Or will he get grandfathered in a 35 year amo next year?

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    midnite toker midnite toker Says:
    91

    @good-format: but … soup IS good food, the dead Kennedys told me so.

    Like or Dislike: Thumb up 0 Thumb down 0

    don’t forget to celebrate the back-to-19k party… : )
    https://twitter.com/GreaterfoolVan/status/211343846842449920/photo/1/large

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    #82 @ReadyToPop: “The World Bank says China still has plenty of scope for fiscal largesse – cutting taxes and boosting spending – so it should at least avert full depression.”

    This is wrongheaded. Chinese households have savings. They need it to survive. The way to boost the Chinese economy is to provide a better social safety net so that some of those savings can be spent. The suggestion to “cut taxes and boost spending” sounds like a line from zombie Ronald Reagan.

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    Vote Down The Facts Says:
    94

    @VMD: “The local film industry is losing an estimated 2,000 jobs and over $80M in investment due to the X-Men Wolverine movie franchise relocating to Australia.”

    2000 lost jobs from that project? Unlikely.

    But that’s besides the point. For every Radical that closes theres a Pixar, Digital Domain, or Industrial Light & Magic that opens its doors.

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    #78 @patriotz: “That’s just for the first 25 years Amber. Then for the next 5 years the person who takes out the 25 year will have a paid for house while you will still be making the full payments.”

    Stop making Amber sound rational. I think 5 years of full payments is easily worth 25 years of eating “people food”.

    Like or Dislike: Thumb up 0 Thumb down 0

    #76 @Anonymous: “Hey Cleveland, Toronto and Vancouver will be joining you real soon…”

    I’m sorry, no:

    http://www.youtube.com/watch?v=ysmLA5TqbIY

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    Another Vancouver game studio closure. They had a bad reputation, but it will still hurt a bit:
    http://www.vancitybuzz.com/2012/07/rockstarvancouverclosed/

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    Anonymous Says:
    99

    @Vote Down The Facts:

    Please. If you know about the studios that have opened up recently, then you should also know that ILM has stated they’re only here for two projects, and that the going is only as good as the tax credits we’re firing at these companies.

    The gravy train is not permanent – just look at New Mexico, London or LA to see what happens when another government – like Australia – offers better incentives.

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    Anonymous Says:
    100

    @Vote Down The Facts: ….What’s it’s losing in games, it’s gaining in film production and digital effects.
    ….

    I guess he’s referring to Vancouver’s other ‘film’ productions, you know, the one with titles like: ‘Raiders of the Lost Arse’ and ‘Harry Prodder and the Philosopher’s Bone’.

    Like or Dislike: Thumb up 0 Thumb down 0

    Greatest Fool Says:
    101

    Holy Shite it is almost midnight. Is there still time to get a 30 mortgage? My mortgage broker isn’t answering the phone.

    Like or Dislike: Thumb up 0 Thumb down 0

    New Listings 363
    Back On Market Listings 17
    Price Changes 226
    Sold Listings 215

    ALL LOWER MAINLAND

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    and so it begins... Says:
    103

    It is midnight…. “the 30″ is no longer!! Nite all!

    Like or Dislike: Thumb up 0 Thumb down 0

    Just because there is a glut of product on the market because a mass of people saw dollar signs and listed, doesn’t mean it’s “time to buy.” Unfortunately, people get caught up in this propaganda and end up rushing out to buy, creating demand again and…low and behold, we’re in an upswing of sales again.

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