Friday Free-For-All!
It’s Friday! The end of another glorious summer work-week and the weekend is calling. This is when we do our regular end of the week news roundup and open topic discussion thread and as per tradition here are a few links to kick off the chat:
-Inventory Graph slowing
-Canada home price hits record
-US prices to median $149,300
-Vancouver plans new ‘Superroad’
-Sales dive in West Van & Richmond
-Capcom lays off 20
-BC deficit understated by $520M
-Oakridge plans to be a community
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So what are you seeing out there? Post your news links, thoughts and anecdotes here and have an excellent weekend!
July 27th, 2012 at 12:18 am 1
“In Singapore, Vitriol Against Chinese Newcomers”
http://www.nytimes.com/2012/07/27/world/asia/in-singapore-vitriol-against-newcomers-from-mainland-china.html
“These days, mainland Chinese get blamed for driving up real-estate prices, stealing the best jobs and clogging the roads with flashy European sports cars.”
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July 27th, 2012 at 12:44 am 2
Banks are at it again. Offering 5 year fixed rates at 2.94%, then releasing press statements claiming “RECORD LOW RATES”, trying to create panic buys from idiots who want to get that extra 0.04% from the last 2.98% mortgages. And it will sadly work for some really stupid people.
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July 27th, 2012 at 1:04 am 3
@ScubaSteve:
“it will sadly work for some really stupid people.”
Such people will hardly have stepped into the front door of their new home before it is worth less than what they owe on it.
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July 27th, 2012 at 2:24 am 4
I just bought a place in the US 25 yr mortgage 3.5% and wanted to do the same in Van West but its 8.75% RBC for a 25 yr mortgage and can’t do it (nor should I). But why?!
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July 27th, 2012 at 3:31 am 5
@No Noise:
You should be asking why you can get such a low rate for 25 years in the US and the answer is (as already pointed out) that Fannie/Freddie, which now have USG loan guarantees, are buying long mortgages to keep the rates down. In Canada long rates are set by the market.
This of course is another reason why RE should be cheaper in Canada than in the US – the mortgage borrower is facing more risk in the long term. But Americans have been cured of the “RE always goes up” illness and Canadians haven’t.
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July 27th, 2012 at 5:27 am 6
2 ScubaSteve Says: “Banks are at it again.”
I think it’s great as long as banks are 100% on the hook for the loan risk. It’s the way free markets should work.
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July 27th, 2012 at 6:58 am 7
@No Noise: “I just bought a place in the US 25 yr mortgage 3.5% and wanted to do the same in Van West but its 8.75% RBC for a 25 yr mortgage”
I would worry less about the interest rate than the capital loss about to occur to Van West. Who cares if you lock in a good rate for 25 years when the price drops in half.
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July 27th, 2012 at 6:59 am 8
Dragon’s Den star reveals why he’s still bullish on real estate
Hard to tell whether Croxon is really that thick about RE or it it’s just the reporter. About 1/3 of the article talks about his investments in Whistler, without mentioning that it has experienced the biggest bust of any market in Canada.
Why did he sell if he’s bullish? The market certainly wasn’t good to those who didn’t sell soon enough.
Well that might explain a few things.
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July 27th, 2012 at 7:35 am 9
Seems like the Mainland Chinese aren’t even liked in Singapore…
http://www.nytimes.com/2012/07/27/world/asia/in-singapore-vitriol-against-newcomers-from-mainland-china.html
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July 27th, 2012 at 8:28 am 10
@Anonymous: “I would worry less about the interest rate than the capital loss about to occur to Van West. Who cares if you lock in a good rate for 25 years when the price drops in half.”
If he is looking to lock into a 25 year term at a low rate, he probably doesn’t care about the short or medium term price outlook. An overpriced house, but financed at a very low rate, guaranteed for 25 years, just might make sense for some people.
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July 27th, 2012 at 8:44 am 11
@Bo Xilai:
I work several mainlad chinese. They are average people with average incomes. I like them better than the ones from HK.
Not all of them are millionares and corrupt. Also, there is a lot of bias agaisnt them from non-mainland chinese people. Even if they arent rich.
We’ll see whos been swiming naked soon enough and then there will be plenty of blame to give.
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July 27th, 2012 at 9:01 am 12
@No Noise: IIRC any loan in Canada longer than 5 years can be repaid in full after 5 years so there is inherent repayment risk for any loan longer than that.
The large spread for the 25 year loan shows the inherent risks of real estate that, if not covered, would kick out interest rates. That stated, commercial mortgages aren’t significantly higher than residential ones so there’s probably more to it than that. Anybody know?
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July 27th, 2012 at 9:17 am 13
@Bo Xilai:
Maybe the mainland Chinese aren’t liked in Singapore (or Hong Hong) because they’re obnoxious pricks.
“Wang Quancheng, the chairman of the Hua Yuan Association, the largest organization representing mainlanders, said the government was not doing enough to help integrate new arrivals, but he also blamed Singaporeans for their intolerance and said many were simply jealous that so many Chinese immigrate here with money in their pockets.”
“Singaporeans staged a rare public protest against new immigrants last summer after a family from China complained about the curry-laden odors wafting from an ethnic Indian neighbor’s apartment.”
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July 27th, 2012 at 9:27 am 14
I saw the trend slow down on inventory weeks before and mentioned it, people voted my comments down to foreclosure. I’m hoping for a correction too, but I try to stay as objective as possible. Not all news is going to be what you want it to be. If you choose to ignore it, you’ll always have half the picture.
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July 27th, 2012 at 9:41 am 15
@Anonymous: In the limited area I’m following most closely (certain upper level, North Van neighborhoods) detached inventory is down more than 10% in a couple of weeks, from 187 at the top to 168 today. But I realize that is too small a sample to draw broad conclusions.
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July 27th, 2012 at 9:42 am 16
@patriotz: Is there any way to finance a Canadian home in the US?
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July 27th, 2012 at 9:43 am 17
@Anonymous: “people voted my comments down to foreclosure”
They probably have you confused with another Anonymous.
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July 27th, 2012 at 9:48 am 18
I was talking to a couple of parents of kids in my sons swim club – they are both chinese, in their mid 40′s and have lived here for 10-15 years and their kids were born here.
The entire hour they were playfully bashing the new chinese people coming over, making jokes about them trying to sneak in the side door and swim for free (avoiding the $4 fee) while they spend $20 in gas driving their Mercedes over from Point Grey etc etc. They were joking around but their animosity was obvious. I just listened not quite sure what to make of the whole thing.
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July 27th, 2012 at 9:52 am 19
@An Observer: I have a couple of good friends from Taiwan and they say the same thing… Lots of underlying animosity.
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July 27th, 2012 at 9:55 am 20
On inventory – - don’t worry about the decrease right now.
Using my historical seasonal models, our inventory will stay flat to decrease slightly through the end of August. September and October will bring 1,000′s of new listings back to the market one more time. Throwing that into a quiet sales period will spike the inventory and we could see 20,000. This will likely push MOI over 10. We will be over 10 MOI on detached now anyway. Don’t be alarmed by the decrease in inventory, it is typical for the season and we should be paying more attention to the fact that sales are slowing and are trending still below 2008.
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July 27th, 2012 at 10:09 am 21
@Anonymous:
#14
A totally reasonable call considering Re listings always slow into the summer. This is the precursor to a beautiful run up of fall listings, which will surely drive prices south. Things are shaping up perfectly for the bear folk.
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July 27th, 2012 at 10:12 am 22
Immigration wise the batch of new comers now are more or less well to do.
They’ve made their money, usually on the backs of their fellow countrymen, and wanna get some of it out of the country.
In contrast to the ones who came over in the 70s or 80s.
Like my family, we were dirt poor and all 5 of use lived in a 1 bedroom apartment in Chinatown.
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July 27th, 2012 at 10:17 am 23
Continuing the topic of rents from the previous days post…
We been here for almost 4 years now without a rent increase.
In fact we had one rent decrease in 2009 and from checking rental listings, I believe we are paying 10% less than market value (which is already low compared to other “world-class” cities).
I don’t know why people have so many issues with renting.
The key is not to rent with amateur flippers.
Go with a proper management company.
Get a long term lease signed or go month-to-month.
And for gods sake, rent the appropriate type of accomodation.
If you have a family, rent a townhouse.
If you don’t want noisy neighbors, try the west end.
What I used to do in the past is walk my dog around late a night and look at the condos around the area we were looking at.
I take note of the units where there’s music, partying, people drinking and smoking and yapping away on the balcony.
You want to avoid renting next to these units.
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July 27th, 2012 at 10:30 am 24
Found this quote from a realtor in a post by a someone associated with Scam Good:
“As you are no doubt aware there has been a huge slowing in the market and predictions are that there will be a correction of approximately 25% on detached properties and up to 30% on condos. The other prediction is that we will not see any sort of recovery for another 2 years. How much of the above is true only time will tell. One thing I do know is that The Federal government has not helped by a) cancelling nearly 300,000 investor applicants who were already 2 years into their application process and b) Making it much harder to get a mortgage without proof of income and increasing the ratio of income to borrowing. This has directly affected the numbers of people looking to buy from outside our borders.
The other problem I have personally experienced is purchasers that bought properties I had listed have hit HUGE problems getting a mortgage, as banks would not appraise the property at what they paid for it even though it was sold on the MLS and in some cases at multiple offers! The appraisers told me they just don’t see the value in a lot of properties and want to make sure they do not over-value in view again of an anticipated market correction.
Good quality properties that are priced well are still selling and there have been some big sales, as you will see from my attached stats sheet. If you don’t have to sell then don’t, if you do then make sure you price it right, choose a Realtor who will promote it right and last but not least prepare now with photos, floor plans etc., so you can come to market as soon as there is a change – even if it is nominal.”
http://www.allur.com/blog/2012/07/is-the-canadian-government-killing-vancouver-real-estate
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July 27th, 2012 at 10:32 am 25
@Best place on meth:
“Singaporeans staged a rare public protest against new immigrants last summer after a family from China complained about the curry-laden odors wafting from an ethnic Indian neighbor’s apartment.”
Singapore has government-enforced integration. Every apartment building has a quota for Chinese, Malays, and Indians.
Seems the new arrivals feel that they are above this. Hospices here, curry there.
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July 27th, 2012 at 10:38 am 26
@Chem guy:
“Is there any way to finance a Canadian home in the US?”
There aren’t any legal restrictions on US banks lending on foreign properties AFAIK, but the mortgages aren’t eligible for Fannie/Freddie/FHA purchase or insurance.
Take it from there.
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July 27th, 2012 at 10:50 am 27
Cam Goods offices in East Van appear vacant, as does his website.
http://thekey.com/
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July 27th, 2012 at 11:21 am 28
@Patiently Waiting: “cancelling nearly 300,000 investor applicants who were already 2 years into their application process”
She (the realtor) is blowing this effect out of proportion. First of all, some were four years in. Due to political/bureaucratic inertia, they were secretly placed in a reject queue to be dealt with later. The majority of the 300ishK were never going to come to Canada. Those that do make it under the new system, will be understandably bitter about their experience.
But as far as whether we get less immigration, it doesn’t appear to be the case. Or at least, we don’t know yet.
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July 27th, 2012 at 11:22 am 29
@Patiently Waiting:
“The Federal government has not helped…”
I disagree. The government is helping me and thousands of others in the same situation by removing the artificial incentives that distorted this market in the first place. It’s not a day too soon.
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July 27th, 2012 at 11:22 am 30
@Best place on meth: #woot#
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July 27th, 2012 at 11:29 am 31
@Patiently Waiting: Actually, I should say “most” were in queue over four years. If she’s talking about the backlog wipeout, that didn’t effect people who applied only two years ago.
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July 27th, 2012 at 11:40 am 32
@Patiently Waiting:
This part of the link you posted is pretty good too!
“Oddly enough, I legitimately agree. I think that the Federal Government is directly curbing the growth in the real estate sector. Canada -Vancouver specifically- has been on the ‘hot spot’ radar of people from all over the globe. We have been ranked the best place to live, the safest place to live and have an economy that is second to none. A huge amount of our economy’s growth is based on our need to grow as a population. Currently, Canada’s population is dwindling and without the support of a strong immigration system, it will get worse.
I believe that if we focus on creating good quality jobs and giving young people quality education, we will attract higher salaries, bigger companies and housing prices will become less of a factor. It is common in most metropolis cities around the world to commute an hour to work. For some reason, we think we are the exception.”–Simeon Garratt
http://www.allur.com/blog/2012/07/is-the-canadian-government-killing-vancouver-real-estate
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July 27th, 2012 at 12:01 pm 33
@Best place on meth:
Singapore, Hong Kong, local swim club… How about Italy, Prato?
Resentment runs high. “You take someone from Prato with two unemployed kids and when a Chinese person drives by in a Porsche Cayenne or a Mercedes (Vancouver style) bought with money earned from illegally exploiting immigrant workers, and this climate is risky,” said Domenico Savi, Prato’s chief of police until June.
Part of the resentment is cultural: The city’s classic Italian feel is giving way to that of a Chinatown, with signs in Italian and Chinese, and groceries that sell food imported from China.
But what seems to gall some Italians most is that the Chinese are beating them at their own game — tax evasion and brilliant ways of navigating Italy’s notoriously complex bureaucracy — and have created a thriving, if largely underground, new sector while many Prato businesses have gone under. The result is a toxic combination of residual fears about immigration and the economy.
The situation has steadily grown beyond the control of state tax and immigration authorities. According to the Bank of Italy, Chinese individuals in Prato channel an estimated $1.5 million a day to China, mainly earnings from the garment and textile trade. Profits of that magnitude are not showing up in tax records, and some local officials say the Chinese prefer to repatriate their profits rather than invest locally.
The authorities also say that Chinese and probably Italian organized crime is on the rise, involving not only illegal fabric imports, but also human trafficking, prostitution, gambling and money laundering.
Tensions have been running high since the Italian authorities stepped up raids this spring on workshops that use illegal labor, and grew even more when Italian prosecutors arrested 24 people and investigated 100 businesses in the Prato area in late June. The charges included money laundering, prostitution, counterfeiting and classifying foreign-made products as “Made in Italy.”
In recent months, Prato has become a diplomatic point of contention. Italian officials say the Chinese government has not done enough so far to address the issue of illegal immigrants, and they are seeking a bilateral accord with China to identify and deport them. Some Prato residents suspect that the flood of immigrants is part of a strategy by Beijing to exploit the Italian market, though the Chinese government does not generally use illegal migrants to carry out its overseas development plans.
Much of the tightening comes from Prato’s new administration. In 2009, the traditionally left-wing city elected its first right-wing mayor in the postwar era, whose winning campaign tapped into powerful local fears of a “Chinese invasion,” and who seeks a broader European Union response to Chinese immigration.
“How can China leave a mark like this in the E.U.?” the mayor, Roberto Cenni, asked. “Noise, bad habits, prostitution. People can’t live anymore. They’re sick of it.”
http://www.nytimes.com/2010/09/13/world/europe/13prato.html?pagewanted=all
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July 27th, 2012 at 12:07 pm 34
@TPFKAA:
“The government is helping me and thousands of others in the same situation by removing the artificial incentives that distorted this market in the first place.”
Removing? They’re just rolled them back to what they were when the Cons took office in 2006.
Not counting, of course, today’s interest rates which remain much lower than then.
If they actually removed the incentives, i.e. got rid of government mortgage guarantees altogether and raised interest rates, prices would crash immediately.
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July 27th, 2012 at 12:12 pm 35
@An Observer: “I just listened not quite sure what to make of the whole thing.”
I think that’s true, the same country and wealth differences we see in any setting, be it Mainland China, Alberta, Qatar, Russia, New York, whatever; and one of the reasons why I am so against using the term “Chinese” without qualification.
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July 27th, 2012 at 12:19 pm 36
Okay, let’s pick this apart. It’s written by Simeon Garratt, a real estate entrepreneur who speaks Mandarin and Cantonese and specializes in Asian investment real estate (source: http://www.quora.com/Simeon-Garratt)
“I legitimately agree” –Odd use of the word “legitimately”–whether one agrees or disagrees one has the right to one’s opinion so any opinion one may espouse may be considered legitimate. How could one “illegitimately agree”? Maybe if one were under duress?
“I think that the Federal Government is directly curbing the growth in the real estate sector.”–New mortgage regulations getting in the way of the real estate ponzi scheme.
“Canada -Vancouver specifically- has been on the ‘hot spot’ radar of people from all over the globe. We have been ranked the best place to live, the safest place to live and have an economy that is second to none.” –So they go straight from talking about how the federal government wants to take gas out of the real estate bubble into the real estate pumping talk. It’s almost like suggesting the market is strong by virtue of the fact that we are in a bubble.
“an economy second to none” –Not sure if this refers to Canada as a whole or Vancouver as the author seems to be moving between geographic scales. Okay, let’s look up both. In terms of GDP per capita (which controls for differences in population), Canada ranks 12th among countries of the world. Rather than “none”, actually 11 countries have higher GDP per capita than Canada: Qatar, Luxembourg, Singapore, Norway, Brunei, Hong Kong, USA, UAE, Switzerland, Netherlands, Austria, Kuwait.
If we just want to think about Vancouver as a city, according to Pricewaterhouse coopers GDP ranking of cities, Vancouver ranks in 68th place (#1 is Tokyo, Japan) (Source: http://en.wikipedia.org/wiki/List_of_cities_by_GDP#List_of_cities.2Fmetropolitan_areas_in_the_world_by_GDP_.282008.29)
This does not qualify as “an economy second to none”.
“Currently, Canada’s population is dwindling” –This is what Statistics Canada has to say about Canada’s population:
“The population of Canada increased 5.9% between the 2006 and 2011 censuses, compared with a 5.4% increase during the previous five-year period.” (Source: http://www.statcan.gc.ca/daily-quotidien/120208/dq120208a-eng.htm)
“I believe that if we focus on creating good quality jobs and giving young people quality education, we will attract higher salaries, bigger companies and housing prices will become less of a factor.” –What does this even mean? How can housing prices become less of a factor? Prices (at whatever level they may be) are always going to matter. In terms of good quality jobs–if you look at all the headlines about tech companies closing down in Vancouver the prospects don’t look good.
“It is common in most metropolis cities around the world to commute an hour to work. For some reason, we think we are the exception.” –Justification for stratospheric property prices in the City of Vancouver because the working stiffs can just move out into the burbs. Take a look at the stats for the real estate market an hour outside of the City of Vancouver and say there isn’t a bubble there too.
I have to shake my head when I think someone who could write this crap has made cash hand over fist during this real estate bubble.
http://www.allur.com/blog/2012/07/is-the-canadian-government-killing-vancouver-real-estate
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July 27th, 2012 at 12:21 pm 37
New Listings 121
Back On Market Listings 7
Price Changes 81
Sold Listings 48
AS OF 12:21 PM
ALL LOWERMAINLAND
ONLY 3 PRE JULY 10TH
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July 27th, 2012 at 1:12 pm 38
Go Canada!!!!
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July 27th, 2012 at 1:21 pm 39
So we saw 10 year lows for June, and now it looks like we will see 10 year lows for July. Maybe we will see 10 year lows for every single month for the rest of the year? Sales look dismal. That article posted by the realtor indicates that banks and appraisers are starting to refuse to take on anymore liability. The govt rules will have more of an impact than anyone can imagine. No more free debt and unproven income. It only took 10 years…………..
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July 27th, 2012 at 1:23 pm 40
Found this quote by this realtor who shows graphs of areas that have been hit harder than others… Also he shows graph supporting that some areas have not been hit that hard
http://www.realestatevancouver2010.com/blog/2012/07/26/vancouver-real-estate-market-2012/
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July 27th, 2012 at 1:23 pm 41
Danny Boyle is killing it big time !
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July 27th, 2012 at 1:45 pm 42
#40 – - The information on that Realtor’s blog is not too bad. It is amazing how he gives info on one specific area and then all the comments come in looking for their area. That takes a lot of work and I wouldn’t do it.
The one comment I would make however is that when you get to a very small subsegment, there are so few transactions, it’s tough to get a statistically significant answer. But – I would agree that the entry level Kits SFH or townhouse market has not been hit that hard as it is at the very bottom of the West Side pricing and has always been a place where uninformed greaterfools would race to put their money. Hwever, with the recent rule changes, I would say the liquidity change and the $1.0M CMHC cap will impact the sales quite a bit.
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July 27th, 2012 at 2:05 pm 43
UBC has ballooned to 300 listings.
Someone must have sprayed the whole area with HAM-B-GONE.
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July 27th, 2012 at 2:11 pm 44
@Best place on meth:
Perhaps the hospice is progressing?
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July 27th, 2012 at 2:25 pm 45
@kansai92: “I don’t know why people have so many issues with renting…And for gods sake, rent the appropriate type of accomodation.”
Getting a decent place and doing your homework is the key to being a happy renter. When you hear people buying due to pressure from their wife, etc it is usually because they are living in a crap hole basement suit. For some reason the only alternative is to buy a place. They go from $500 per month rent to $3000 per month for a mortgage. They can’t seem to try spending a reasonable amount on rent to get a decent place but have no problem dropping it on buying place that will only depreciate.
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July 27th, 2012 at 2:33 pm 46
@Laibach:
Yes, the hospice is starting to take shape.
I saw a few ghosts hanging around watching the progress, they seemed quite nice.
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July 27th, 2012 at 2:38 pm 47
S&P revises outlook to negative on seven Canadian Financial Inistitutions…see attached link
http://www.theglobeandmail.com/globe-investor/sp-downgrades-7-canadian-banks/article4445550/?cmpid=rss1
Most interesting of the list of negative outlooks was Home Capital Group (no doubt the party which has the largest portion of its business in true no-doc, uninsured origination…and which has funded innumerable dodgy condo purchases). If the negative outlook turns into an actual downgrade then HCG may either end up clinging to the very last peg of non-junk credit rating … or may even be cast aside as junk. No doubt a downgrade would not sit well with the CDIC which insures HCG’s raising of GIC capital from the sheeple. Suffice it to say, the short answer is that credit just got constricted one more notch.
Also of note is that Central One is in the negative outlook pile. This is not a household name, but it ultimately backstops the credit union system … which is everybody’s favorite candidate for producing Canada’s first bank failure in the current real estate melt.
Happy Monday bears!
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July 27th, 2012 at 3:11 pm 48
I’m getting 701 SFH in East Van on public mls. First time over 700 this year. Still behind 2008 pace by **250** and just a hair under 2010′s inventory for late July. Should cross over 2010 in a week, but we won’t catch 2008 for awhile–SFH in East Van hit 1000+ in the Fall of 2008.
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July 27th, 2012 at 3:35 pm 49
some evidence sellers are capitulating, at least in terms of price if not value. this is for teardown.
2930 Allan NVan
Price Dates Features
Current Price $730,000 Listed May 22/12 Sqft Fin. 1,134
Original Price $875,000 Entered May 22/12 Sqft Unfin. 0
Jun 25/12 $775,000 Status Chgd Jul 26/12 Bedrooms 2
Jun 6/12 $799,000 Sale Date Jul 19/12 Bathrooms 1
Sale Price $705,000 Ensuites
Current $ Per Sqft Days on Mrkt 58 Kitchens 1
$ Sold Per Sqft $621.69 Total # Rooms 5
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July 27th, 2012 at 3:36 pm 50
Slow work day this Friday – so here’s the data mining thoughts for the weekend. There are several ways we can look at how the market is. I’ve come up with a couple new ratios that indicate a bit how the current momentum / sentiment is. It’s not scientific but it did generate some interesting stats.
Firstly, we know MOI which is inventory over monthly sales volume. The new ones I have are Price Change Ratio – The ratio of the number of price changes to the number of sales. And “Price Change %” which is the total number of price changes in a particular period divided by the total inventory. If you have large ratios in the price change area, it’s a sign of underlying weakness because where many more people are reducing price and few buyers are buying, there is large downward pressure.
Note that this is based on the past 2 weeks – thus it will not match July as a whole which has had a 27% decrease in sales in the second half of the month compared to the first).
First MOI – -
Richmond 23.7
Van-West 17.0
Pitt Meadows 15.8
West Van 12.9
Burnaby 12.9
Port Moody 12.4
Coquitlam 10.3
Ladner 9.1
Maple Ridge 8.3
Van East 8.0
Tsawassen 7.6
North Van 6.0
New West 5.2
Port Coquitlam 5.0
Second – This is the % of the total inventory which has had a price change in the past 2 weeks. Strange is that Port Coquitlam which has lowest MOI has highest rate of price decreases – perhaps this means they are pushing to get sales or is an indicator of current need to sell. Note that the most expensive markets have the lowest rate. Thus, it seems these are less motivated sellers.
Port Coquitlam 26%
Pitt Meadows 17%
Tsawassen 12%
New West 10%
North Van 9%
Burnaby 9%
Port Moody 9%
Van East 9%
Maple Ridge 9%
Ladner 8%
Richmond 8%
Coquitlam 7%
Van-West 6%
West Van 5%
Last, the ratio of Price changes to Sales. The higher the ratio, the weaker the market. Pitt Meadows had such few sales, it is not really statistically significant. Richmond however is very weak, as is Port Coquitlam and Burnaby. Van-West is also weak using this ratio.
Pitt Meadows 5.5
Richmond 3.6
Port Coquitlam 2.6
Burnaby 2.3
Port Moody 2.2
Van-West 1.9
Tsawassen 1.8
Ladner 1.5
Coquitlam 1.5
Maple Ridge 1.4
Van East 1.4
West Van 1.2
North Van 1.1
New West 1.1
So – After putting all of this together and using a proprietary weighting system, I have ranked the markest from strongest to weakest. Here is what I came up with.
1 New West
2 North Van
3 Van East
4 Maple Ridge
5 Coquitlam
6 West Van
7 Ladner
8 Tsawassen
9 Port Coquitlam
10 Port Moody
11 Pitt Meadows
12 Van-West
13 Burnaby
14 Richmond
Your winner is still Richmond – - very high inventory, slow sales, lots of price reductions. When the HPI comes out this month, Richmond should at least be down 2-3% from the previous month at least. I see West Van in the middle of the pack which is interesting but I would say it does not seem to have a lot of motivated sellers who have to sell and just genearlly has a naturally high MOI. North Van was always the star (along with Burnaby) – It just has not fallen quite fast yet as relatively low inventories mean people are not pressured to reduce prices yet.
All the best this weakend (sic) . . . . . . .
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July 27th, 2012 at 4:24 pm 51
@patriotz: Removing, rolling back : semantics.
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July 27th, 2012 at 5:02 pm 52
@Loon:
“Danny Boyle is killing it big time !”
But he forgot to put the bubble around the house.
Canadian low moments:
- CTV bimbo calls Tim Berners-Lee “inventor of the Internet”.
- Gordo
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July 27th, 2012 at 5:07 pm 53
@patriotz: “Canadian low moments:- CTV bimbo calls Tim Berners-Lee “inventor of the Internet”.”
Or another patriotz low moment?
Sir Timothy John “Tim” Berners-Lee, OM, KBE, FRS, FREng, FRSA (born 8 June 1955[1]), also known as “TimBL”, is a British computer scientist, MIT professor and the inventor of the World Wide Web.
http://en.wikipedia.org/wiki/Tim_Berners-Lee
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July 27th, 2012 at 5:09 pm 54
@Anonymous: Uh-oh, now you’ve put your foot in it…
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July 27th, 2012 at 5:16 pm 55
Web != Internet
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July 27th, 2012 at 5:17 pm 56
@Anonymous:
She probably had a CTV researcher to blame for putting her foot in it. But you did it all on your own.
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July 27th, 2012 at 5:23 pm 57
Yeah – how ridiculous. Everyone knows it was Al Gore!
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July 27th, 2012 at 5:41 pm 58
@Turkey: Nothing better than when snarky asshole trolls get something wrong.
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July 27th, 2012 at 5:42 pm 59
Pre July 10 sales are now only a few. Today there were only 7. Sales were pretty low but we’ll wait for PaulB to give us the numbers!!!
Thus, at this point, we can say that from this point forward, the new rules are affecting most sales. For the whole month only about 25% of the sales will have been for transactions after July 9. Thus, the true impacts are not really in the numbers yet. Today, the numbers are bad enough that we can predict that July 2012 will come in below July 2008 for sales.
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July 27th, 2012 at 5:48 pm 60
Latest Canadian household credit numbers (to the end of June 2012) from the Bank of Canada:
http://credit.bank-banque-canada.ca/householdcredit
Latest Canadian business credit numbers (to the end of June 2012) from the Bank of Canada:
http://credit.bank-banque-canada.ca/businesscredit
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July 27th, 2012 at 5:53 pm 61
@VHB: “Nothing better than when snarky asshole trolls get something wrong.”
Coming from VHB that is classic. Kettle meet the pot…
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July 27th, 2012 at 6:11 pm 62
Looking forward to end of week sales stats…
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July 27th, 2012 at 6:13 pm 63
@ScubaSteve:
I’m putting my bet on 74 today. +/- 10.
C’mon Paul, spin the wheel!
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July 27th, 2012 at 6:14 pm 64
@Best place on meth:
I have my bets on 60 sales today. It’s low, but hey, it’s Friday… might as well go for it!
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July 27th, 2012 at 7:21 pm 65
New Listings 167
Price Changes 109
Sold Listings 70
TI:19375
http://www.paulboenisch.com
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July 27th, 2012 at 7:28 pm 66
@paulb:
Thanks for the stats Paul. I was close with 60, meth was closer at 74. Unless we are playing Price is Right rules… in which case, I rule.
Sales fell off a cliff this week. This has to be one of the worst combined 5 days in a row ever for July. What is the 7 day moving average now I wonder? VHB?
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July 27th, 2012 at 7:30 pm 67
To be worse than 2008, we need sales on Monday + Tuesday < 204.
You can do it, Vancouver!
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July 27th, 2012 at 7:35 pm 68
@ScubaSteve:
“I was close with 60, meth was closer at 74″
Fuck that, we both win Steve!
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July 27th, 2012 at 7:36 pm 69
@VHB:
Thanks VHB! Weekly moving average as you said is 84. Sales this week were as follows:
86, 102, 103, 59, 70
It’s going to be a close call but I think it should happen.
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July 27th, 2012 at 7:38 pm 70
@Best place on meth:
Hell yes. And everyone else wins too. This may finally be the bubble collapse we’ve been waiting for and needed as a city for 10 years. It will be a long, hard and painful crash, but the city (and Canada) needs it. People can only live on a cloud for so long before it vanishes. Vancouver is about to get rocked hard.
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July 27th, 2012 at 8:31 pm 71
Perhaps many of the herd have finally grown tired of spending money they don’t have and/or the new (old) regs are returning this market to some semblance of sanity.
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July 27th, 2012 at 8:41 pm 72
Numbers are good today, but also I think it is also seasonally slow. A lot of people on holiday.
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July 27th, 2012 at 8:46 pm 73
@ScubaSteve: “Vancouver is about to get rocked hard.”
And thanks to the CMHC so is the taxpayer…
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July 27th, 2012 at 8:50 pm 74
“Numbers are good today, but also I think it is also seasonally slow. A lot of people on holiday.”
Not to point out the obvious, but that is why we typically compare July numbers with previous July numbers.
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July 27th, 2012 at 9:04 pm 75
@HAM Solo:
Re: Central One credit union. In my line of work, I have to say I’ve seen a number of really iffy mortgages being issued by credit unions, more so than the big banks (notwithstanding a bank which is known for high risk). Credit unions…this is where my client with the $50k a year job got his $900k mortgage-ouch! This sickens me…so much so I’m not keeping much of my money in credit unions. Sure, the BC government will reimburse 100% of your losses if they go bust, but who wants the hassle?
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July 27th, 2012 at 9:08 pm 76
Someone made money from the NEXEN DEAL
SEC Accuses Billionaire’s Firm Of Insider Trading In CNOOC-Nexen Deal
A trading firm controlled by Hong Kong billionaire Zhang Zhirong reaped more millions in illegal profits by trading on inside information about the biggest energy deal in recent memory, U.S. regulators say.
In a complaint released Friday, the SEC alleges Well Advantage Limited and other unknown traders in Hong Kong and Singapore stockpiled shares of Canadian energy concern Nexen in the days before Chinese firm CNOOC announced a $15.1 billion acquisition of the company July 23.
The SEC froze the assets’ of the traders in question after Well Advantage moved to liquidate its entire position in Nexen after shares leaped on news of the CNOOC takeover. Zhang Zhi Rhong, the SEC’s Enforcement Division says controls another company that has a strategic agreement with CNOOC.
“Well Advantage and these other traders engaged in an all-too-familiar pattern of misusing inside information to place extremely timely trades and profit handsomely from their illegal acts,” said the SEC’s Sanjay Wadhwa. “Despite the challenges of investigating misconduct in the U.S. by trading accounts located overseas, we have moved swiftly to freeze the assets of these suspicious traders and will hold them accountable for their actions.”
The complaint claims that Well Advantage and the other traders had nonpublic information about the CNOOC takeover when they loaded up on Nexen shares. “Well Advantage purchased more than 830,000 shares of Nexen on July 19 and had an unrealized trading profit of more than $7 million based on Nexen’s closing price on the day of the announcement,” the SEC says. The other unknown traders made $6 million by immediately selling nearly all their shares upon the deal announcement.
The SEC obtained an emergency court order freezing $38 million in assets
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July 27th, 2012 at 9:27 pm 77
@market stats:
Was there an extra holiday in July 2012 I didn’t know about?
Damn, I went to work!
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July 27th, 2012 at 9:45 pm 78
@Anonymous:
CMHC has reasonable reserves built up. Even if CMHC does suffer a huge amount of defaults and tax payers do get dinged, it doesn’t really matter. We’ve made more money off CMHC over the years than we will ever have to pay out.
For instance, let’s say CMHC defaults hard and the GST goes up to 7%. Well, we are back to where we were. Remember when the GST dropped from 7% to 6% in July, 2006? And then again from 6% to 5% in January, 2008? Those drops were partially made possible by the huge earnings from CMHC.
So worst case scenario, we go back to a 6 or 7% GST, just like where we were before. At least we all benefited from lower taxes for a few years thanks to revenue from CMHC. So no, there won’t be any doomsday. The homeowners out there like to try and claim there will be… I hear it often from people, “Home prices can’t crash, because if they do, then we all go into a depression, all our taxes will go up and we will all lose our jobs”.
It’s a very spiteful way of looking at things frankly. Homeowners experience record growth for 11 years, rape our economy, destroy businesses, and then prices go down a tiny bit and homeowners wish nothing but bad stuff on the rest of the population.
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July 27th, 2012 at 9:54 pm 79
@ george
Interesting data points on credit growth. It would be interesting to know the regional split (I suspect BC is leading the country in credit deceleration) as well as the recent history of these data series.
I seem to recall that in order to keep a bubble inflated, credit not only needs to grow nominally, but it needs to grow exponentially.
My guess is that whatever BC mortgage credit growth is this year, it is almost certainly less than recent go-go years. Possibly mortgage credit growth has gone negative sequentially in July.
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July 27th, 2012 at 9:59 pm 80
@patriotz:
Forbes describing the opening ceremonies:
“Tim Berners-Lee inventing the internet”
http://www.forbes.com/sites/anthonykosner/2012/07/27/london-olympics-the-most-embarrasing-opening-ceremony/
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July 27th, 2012 at 10:19 pm 81
@ScubaSteve: “For instance, let’s say CMHC defaults hard and the GST goes up to 7%.”
CMHC’s balance sheet is what, 500 or 600B? GST is $5B a point or so, isn’t it? If CMHc takes a 50 or 100B loss, hiking GST a point won’t cover it.
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July 27th, 2012 at 10:33 pm 82
@patriotz:
“This is Sir Tim Berners-Lee. He invented the internet. Blame him if you don’t like what you’re reading now.”
http://www.winonadailynews.com/sports/olympics/blogs/article_a21ff0ea-9a15-5acd-96c4-ea4ed0d7b746.html
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July 27th, 2012 at 10:43 pm 83
Why is the Friday-Free-For-All the most organized day of the week??
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July 27th, 2012 at 11:18 pm 84
http://business.financialpost.com/2012/07/26/why-consumers-are-unprepared-fo-the-next-financial-crisis/
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July 27th, 2012 at 11:21 pm 85
@patriotz:
The World Wide Web IS the Internet to the common man. Technically she was wrong, but when it comes to communicating so that the audience actually understands she got it right.
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July 27th, 2012 at 11:41 pm 86
@rp1,
I hope the next financial crisis happens soon, we need to clean out the system and start again by clearing out the malinvestment in real estate in Vancouver.
It’s sickening hearing people working in restaurants constantly telling me I should have bought and constantly ridiculing my decision to rent.
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July 28th, 2012 at 1:32 am 87
@VHB:
Hey VHB. CMHC’s balance sheet is $550b… but there is no way they would ever come close to defaulting on anywhere near that. Not even close by a mile.
For instance, if we look at the USA, as of just recently it was reported that 4 million homes have been foreclosed on, and 3.3 million more are “at risk” of foreclosing, and 11 million more are underwater (but unlikely to foreclose). That may sound shocking, but the US has 170 million homes according to a census. Now, obviously many of those homes are owned outright and don’t have insurance on them.
Anyways, even if CMHC had $50b in claims (unlikely), it wouldn’t happen all at once it would be over a period of 5-6 years. I’m not saying this is a good scenario, but overall, we need to realize we’ve benefited from CMHC’s revenue for years. Without CMHC, GST would likely still be 7%. It has been a pure money making machine, with virtually no defaults compared to profits, for years. That’s how insurance works. Some years good, some years bad.
In the end of course, we all do suffer… higher taxes because of Harper’s stupid policies and housing greed, but homeowners will face the brunt of it.
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July 28th, 2012 at 1:35 am 88
I forgot to mention that CMHC has something like $20b cash set aside. Apparently they can handle up to a 3% default rate without needing any additional funds. Apparently the worst crash in Canadian history has resulted in a 1% default rate. I wish I knew what the default rate was for the USA…
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July 28th, 2012 at 2:33 am 89
@ScubaSteve: “I forgot to mention that CMHC has something like $20b cash set aside. Apparently they can handle up to a 3% default rate without needing any additional funds. Apparently the worst crash in Canadian history has resulted in a 1% default rate. I wish I knew what the default rate was for the USA…”
Ask and you shall receive:
http://www.richmondfed.org/banking/markets_trends_and_statistics/trends/pdf/delinquency_and_foreclosure_rates.pdf
Prime 30 year fixed mortgages hit 6%. An overwhelming fraction were recent borrowers. These super safe mortgages where the borrower assumes no interest rate risk are not commonly available in Canada.
Adjustable rate mortgages, similar to Canadian mortgages, hit 12%.
Subprime, similar to CMHC low documentation and stated income mortgages, hit 25%.
So yeah, we may not have a US style crash. But cut those numbers in half and it will still be a major crisis.
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July 28th, 2012 at 2:38 am 90
@Anonymous: Sorry, those were delinquency rates. However, the foreclosure machinery in the US and even the land title system is FUBAR. Many people are still not paying. That won’t happen in Canada because the CMHC will cut cheques to banks that foreclose. The incentive in Canada will be to foreclose. Indeed, banks may even make good money flipping properties all the way down and collecting payouts from the government each time.
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July 28th, 2012 at 4:55 am 91
Monetary Madness
http://www.prudentbear.com/index.php/creditbubblebulletinview?art_id=10689
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July 28th, 2012 at 8:35 am 92
@ScubaSteve: “overall, we need to realize we’ve benefited from CMHC’s revenue for years. Without CMHC, GST would likely still be 7%. It has been a pure money making machine”
And where does that money come from?
If the CMHC were providing a useful financial service then indeed they would be contributing to economic growth. Instead, they are contributing to a bubble, which is harmful to long-term economic growth. They are backed by the government, so they can freely misprice risk. That is why they appear to be a money making machine.
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July 28th, 2012 at 12:42 pm 93
@Anonymous: The Internet historians here will notice the computer TBL was using during his show: a NeXT! That was truly awesome (and his tweet “this is for everyone”, even more so!). I was expecting more enthusiasm on the intertubes after watching it tho …
To me it was the most memorable moment of the whole ceremony. Followed by Muhammad Ali’s appearance.
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July 28th, 2012 at 12:46 pm 94
@ScubaSteve:
Sounds great in theory. However, I would gladly take GST at 7% and screw the CMHC. I’d spend considerably less in my lifetime with an additional 2% in GST than with the inflated costs of RE. Think about it, use 10% (I know, I know) inflated prices due to the CMHC. For that $500k condo I have my eye on would mean an additional $50k in price. That would mean I would have to spend $2.5M on taxable items with the additional 2% in GST in order to equal the higher price in RE.
Now do the same math with 15-30% overvaluation…
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July 28th, 2012 at 1:04 pm 95
@Vote Down The Facts: No, it’s just plain wrong. If a journalist claims Marconi invented Morse code or Henry Ford invented the paved road, they’re wrong. There’s a tremendous difference between the Web and the Internet and just because the average person can’t articulate it doesn’t mean it’s not important. This is hardly technical arcana and it’s totally fair to expect a journalist to get it right.
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July 28th, 2012 at 1:47 pm 96
@ScubaSteve: Didn’t the government just give them 60 billion in ’09 – The secret bailout as it’s been called?
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July 28th, 2012 at 2:37 pm 97
@Many Franks: “No, it’s just plain wrong”
You are just splitting hairs. Like any complicated invention it is made up of several parts that were previously developed. Really the internet starts with electricity, copper wire and a computer chip. There are 100s of inventions that went into the internet but the WWW is the most significant part of the internet for the average person.
Anyway the “invented the internet” commentary was provided by the opening ceremony organizers and was just read by the journalist. The content of the opening ceremonies is secret until it takes place and the TV broadcasters are given notes on what is taking place as it happens. The invented the internet was reported by several media outlets across the world. It hardly justifies patriotz calling the journalist on CTV a bimbo for it. Some people just have no class and I think that was the point of the discussion.
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July 28th, 2012 at 3:03 pm 98
S&P cuts ratings on seven Canadian banks
http://www.vancouversun.com/business/2035/cuts+ratings+seven+Canadian+banks/7005811/story.html
Standard & Poor’s Ratings Services has cut its outlook from stable to negative on seven Canadian banks, over concerns about unsustainably high home prices and consumer debt levels, according to published reports Friday.
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July 28th, 2012 at 3:21 pm 99
@Anonymous: All right, have it your way. The Internet was invented somewhere over a million years ago by the cave man who domesticated fire, in cooperation with Tim Berners-Lee, who was 14 years old when he sent the first messages via ARPANET, the precursor to the modern Internet. Hey, it’s the New Journalism!
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July 28th, 2012 at 3:41 pm 100
@ScubaSteve: Not so. The Canadian treasury has collected about 15 billion from CMHC over the last 20 years, it will probably have to pay out 40 billion in bailout $.
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July 28th, 2012 at 6:15 pm 101
99 Many Franks Says: “Hey, it’s the New Journalism!”
“Journalism” is more accurate. Yellow is no longer acceptable. A very recent article in a major financial publication tries to make the case that private enterprise and not government/military funding were behind the creation of the Internet. The relevance to the current debate in the American presidential race about the proper role of government is obvious, as is the timing. Fortunately the inventors are still alive to call out this revisionist political fiction as fertilizer.
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July 28th, 2012 at 8:43 pm 102
What only one post since 3pm? Is everyone Olympic twittering?
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July 28th, 2012 at 9:05 pm 103
@Many Franks:
Seriously, who cares? It was commentary during the opening ceremony for a sporting event – its not Discovery Channel. Most people these days dont seem to know the difference between the Internet and Facebook anyway.
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July 28th, 2012 at 9:29 pm 104
Ladies and gentlemen, any bets on the upcoming top excuse from Realtors for low sales in July/August? Right now for me it is a toss-up for me whether it will be the weather (regardless of what the weather is next month), or the summer olympics.
Perhaps they can point to the last summer olympics coinciding with a huge downturn in sales, too. As far as excuses go, the sheeple are sure to think that is not “baaa-d”.
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July 28th, 2012 at 9:39 pm 105
@Vote Down The Facts:
“Seriously, who cares?”
- you of all people should.. else it would be “Vote Down The Factoids” ; )
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July 28th, 2012 at 10:38 pm 106
Friend of mine in Richmond commented when he does renos he never bothers to pay for drywall removal, there’s always a demo going on within 2-3 blocks he can just dump it.
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July 29th, 2012 at 1:25 am 107
Richmond Detached July
1995 = 108
1996 = 117
1997 = 122
1998 = 86
1999 = 113
2000 = 96
2001 = 183
2002 = 154
2003 = 209
2004 = 129
2005 = 170
2006 = 97
2007 = 175
2008 = 92
2009 = 221
2010 = 107
2011 = 123
2012 = 54 (-56%) ***July 29
July 2012 Detached Active listings = 1182
Two more sales days to go, it looks like it will be the lowest July sales since 1995 for Richmond.
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July 29th, 2012 at 3:52 am 108
@Anonymous:
“You are just splitting hairs.”
Well then I guess you’d think it’s OK to say that Bill Gates invented the personal computer. Or that David Suzuki discovered DNA, or that Stephen Hawking invented quantum mechanics. I mean who cares who really did it, what matters is who gets the media coverage.
What surprises me is that a publication like Forbes seems to have let this go by without comment, when at the very least you’d expect any American – correctly – to belive that the Internet was developed by Americans, even if they don’t know the details.
By the way I was using the Internet back when TB-L was sitting on the Swiss-French border working on a good way to distribute papers about subatomic particles.
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July 29th, 2012 at 6:48 am 109
@Vote Down The Facts: “Tim Berners-Lee inventing the internet”
F’ing morons. Everyone knows that Mark Zuckerberg invented the internet!
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July 29th, 2012 at 7:12 am 110
MLS#V957524. 1318 Homer St.
Reduced 28k to $459k
Movement is afoot in the Y-town market.
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July 29th, 2012 at 7:45 am 111
I was following VHB and VCI before there was a bubble
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July 29th, 2012 at 8:23 am 112
@Crikey:
Considering that Toronto real estate agents blamed the TO land transfer tax (which has been in place since 2008 with no rate changes) for recent sales slowdowns I think pretty much any excuse they can pull out of their ass will suffice. Whatever excuse they use it will be repeated at by the mainstream media without any critical assessment.
I’m going with the fireworks being a distraction. And since there were only 3 nights instead of the usual 4 we are attracting less HAM to the westside. Also, events in Syria are somehow linked, don’t ask me how!
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July 29th, 2012 at 9:20 am 113
Sometime I ask myself, who is foolish enough to still be buying these days. This week I came across three friends who are lining up to become the greatest fools. One is in her late twenties and just started a job paying around 40K. She and her husband just got pre-qualified for their first place. They have never seen a housing market going down and seem to be very excited to be finally stepping on the wealth ladder and becoming full-fledged adults.
Another couple are in their early 30s. I’d peg their combined income at 60 to 70 K. Neither has a very secure job. They own a condo bought about five years ago and are moving up to a townhouse. They plan to rent the condo out. They don’t know if the rent from the condo will cover the mortgage payment on that, but they think it probably will. They’ve never tried being landlords before, and they plan to get started on that after they have moved into the new place.
The last guy just turned sixty. He has a successful but very small business, of the type that is hardest hit in downturns. He explained to me that, while most people are content to buy a house and build equity for retirement, they real key to wealth was using that equity to buy more property.
None of them are close friends so, other than mentioning to the townhouse folks that time was on their side in choosing a new place, as prices are starting to fall, I didn’t warn these folks. I feel a bit guilty, but then again, I don’t warn people who I see smoking that they are setting themselves up for cancer either. I jut don’t think the advice would be appreciated.
These guys are the people who are making it happen: ordinary folks with limited means, following the conventional wisdom by which they are surrounded.
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July 29th, 2012 at 9:36 am 114
@N: “These guys are the people who are making it happen”
Agree. They’re the ones signing, I don’t care how incompetent, nefarious, dishonest, and corrupt TPTB are, there is still free will.
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July 29th, 2012 at 9:42 am 115
I never thought I would actually hear the words spoken flat out. But, I did. “It’s different here!” and, “EVERYONE wants to live here; that’s why prices will never go down.”
This was yesterday afternoon at a Port Moody BBQ. People in their late 60′s-early 70′s.
So, the meme is still alive and kicking. (I think it’ll take quite a while time to steer public perceptions in the other direction).
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July 29th, 2012 at 10:08 am 116
@Boombust:
“EVERYONE wants to live here”…”This was yesterday afternoon at a Port Moody BBQ.”
BWA-hahahaha…HAhahaha
Oh…my gut hurts
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July 29th, 2012 at 11:05 am 117
@Dr. Nick Riviera:
“I think pretty much any excuse they can pull out of their ass will suffice.”
In all seriousness, we should start a Twitter feed called “ReasonsForRealEstateDownturn” or “ExcusesForRealEstateDownturn”.
With enough satirical/funny contributions, attention, and trending, it could help showcase Vancouver & Toronto realtor quotes as the farcical bullshiat that they are.
Then, when any of sheepleBear friends/coworkers harp on about how Vancouver real estate prices will never fall, we can nod in feigned agreement and (trying to keep a straight face) point them to this twitter feed for a list of great excuses for why local real estate has had a bad blip in the last while.
If such sheepleBears realize that their position is being widely ridiculed…is the butt of jokes (in a “trending” Twitter feed, no less!)… for at least some of them, it may be enough to actually have them reflect on things a little moreclearly.
At least half of the ridiculous/satirical contributions for such a Twitter feed could be taken directly from existing Realtor statements. To be sure, the other half of the contributions, the new, ridiculous ExcusesForRealEstateDownturn, would no doubt be co-opted by Realtors in due course.
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July 29th, 2012 at 1:10 pm 118
@ Crikey
Top 5 realtor excuses for July sales
- fabulous weather meant buyers were busy enjoying the BPOE
- European time zone Olympics caused people to watch sports during the critical 2-4 PM open house hours on weekends
- SO MUCH great selection and SO MANY places to choose from meant more work for buyers in finding their dream home
- Rumours of SPECTACULAR condo launches in the fall pushing buying decisions tp September
- HAM prefers to buy in 8th month of the year
- (and Bonus 6th excuse, used only by Dr. Goebbel’s Big Lie Realty Inc) Actually, July sales were better than expected
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July 29th, 2012 at 1:27 pm 119
@jesse: I agree to a point, however it’s difficult for people to make an educated decision when the vast majority of the information available is made so by the Nefarious, Dishonest and Corrupt (NDC) in collusion with their bought and paid-for cohorts in the MSM. Sure, there’s bear blogs like this one but so many people have been drinking the MSM cool-aid, and are pressuring friends and family to do the same, that the knowledge and understanding found in blogs like this is dismissed out of hand. Paradigm is a powerful thing and those who can pay for the privilege of directing it have the control. ‘Conventional wisdom’ is anything but; it’s merely a term used by the aforementioned NDC crowd to encourage people to part with their (borrowed) money.
Local and national news will continue to trot out ‘experts’ who will continue to tell people that all is fine and dandy; keep calm an carry on. As much as we want to deride others for their greater fool purchases, there’s still relatively little bear talk in the media compared to what the pumpers are pushing out. Add to that the nice shiny condo ads in every newspaper, the ‘news’ of presale sellouts still hitting the tv screens of households thanks to the likes of Global, it’s no wonder people are still buying. The only good thing to come of it is that we’re running out of buyers. I really think much of what we are seeing in the numbers is very much this.
The Vancouver market has spent the last ten years absorbing future sales thanks to a massive marketing scheme and loose federal regulations. Now we’re about at that future. Home ‘ownership’ is at or near all time highs. Combined with the Harper Cons reverting the rules back to the standard, there just aren’t enough new buyers out there to take on new stock, let alone to buy what already exists from the move-up types or the retiring boomers. Yet the prevailing information is still bullish. Until the information paradigm turns, we’re still going to see the strong ‘RE always goes up’ sentiment. It’s great the read the anecdotes about the change in sentiment, but it will take time.
In my opinion, it’s criminal that these RE/Mortgage ‘experts’, with every reason to continue promoting bullish ad campaigns and media coverage, are even allowed to offer advice on buying homes and getting mortgages. Our governments need to regulate this industry in much the same way they regulate securities. There’s too much at stake when we have the people who make money from these transactions also controlling the media message and allowing them to freely give ‘financial advice’. It’s disgusting and most definitely criminal.
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July 29th, 2012 at 6:56 pm 120
@Urbain: I’m not so wise to think that imposing regulations will be a permanent fix to Vancouver’s chronic boom-bust mentality; I cannot blame external influences for what as far as I can ascertain is a problem that in all cases involves an individual signing of free will on the bottom line. Then we get the populist dogma that governments are at fault for — what — allowing people to have free will?
I agree that regulations have a place but why should we be surprised when governments imposing these regulations let their citizens down and that the regulations tend to rot over time? I’m certainly not — I’m trying to find times in history where governments DON’T end up mostly disappointing aspirations. As far as I’m concerned, from what I see around me, especially in Canada, people have been given close to all the tools in the shed to figure things out for themselves, be skeptical of authority, and pave their own way. That some take the easy way out and blame their government does a disservice to those who have taken personal responsibility.
I don’t know about everyone else here but every conversation I have about investing and real estate will always find my point of view themed with taking responsibility for one’s actions. This will become more acute in the years ahead if real estate does enter a longer-lasting bear market. The worst service I can do the country is nod my head in acknowledgement the government is incompetent or corrupt, in my view it entirely misses the point.
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July 29th, 2012 at 7:29 pm 121
@jesse:
There is room for blame on both sides. The government created the moral hazard for the banks and it could be expected that the banks would do all they could to encourage people to act imprudently. The people in turn wre imprudent.
It is also reasonable for people to expect that government participation implies government sanction and government sanction means safety. If the federal government is insuring my loan for the bank, and the provincial government is giving the developer ten grand (through me), then it is not surprising if I feel that government smiles on my transaction. That doesn’t mean that I am without responsibility but in my opinion it does mean that some is shared by the government.
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July 29th, 2012 at 9:13 pm 122
120 jesse Says: ” I cannot blame external influences for what as far as I can ascertain is a problem that in all cases involves an individual signing of free will on the bottom line. “
You meant, of course, the bank officers who of their free corporate will designed, printed, advertised and offered signed mortgages to customers they wouldn’t touch ten years ago. They had the centuries of experience and the mathematical models to guide them on what constitutes a safe loan. Fair point.
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July 29th, 2012 at 9:27 pm 123
@N: “That doesn’t mean that I am without responsibility but in my opinion it does mean that some is shared by the government”
Of course culpability is shared with regulators but, from what I can tell from the evidence offered in history, it should be no surprise they can and will fall short. Individuals, save a few with sicknesses, are quite capable of making sound choices and many do. There seems to be no stratification in the frequency of how these choices are made; that is, I am convinced Canadians are more than capable of figuring things out regardless of education or class.
So we have two entities: a government that we should expect to have culpability, and citizens, some who have managed to handle their finances and not take some unhedged risk by hitting the Easy Button.
There are individuals who are to blame, there are media outlets and “experts” that are to blame, and there are governments that are to blame, yet I still find myself finding there is a healthy chunk of the populace who shoulders little, if any, of the blame, simply by NOT signing something that upon a cursory inspection has some mighty big risks. It’s not always magic or serendipity how they managed to do it; maybe there’s a lesson in there, and one I would not want to see lost when our fearless leaders start figuring out who to pillory.
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July 29th, 2012 at 9:33 pm 124
Meanwhile in Phoenix… Note the 2005 selling price folks, that kind of pain is coming to a neighborhood near you!
http://www.zillow.com/homedetails/5609-S-31st-Dr-Phoenix-AZ-85041/67781683_zpid/
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July 29th, 2012 at 9:55 pm 125
123 jesse Says: “Of course culpability is shared with regulators but, from what I can tell from the evidence offered in history, it should be no surprise they can and will fall short.”
Average citizens ‘shoodanone’ government policies we too good to be true? That perspective widely shared would certainly be in the best interest of the real estate industry and the CMHC.
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July 29th, 2012 at 10:18 pm 126
@fixie guy: Everyone is responsible for their own purchases. If they go broke, fuck ‘em. They should have made better decisions.
Anyone who watched what happened in the US and then made the same choices deserves exactly what they get, no matter what government policy encourages.
They can blame whoever they want, but if they want to find who is ultimately responsible they need to look in a mirror.
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July 29th, 2012 at 10:24 pm 127
@HAM Solo:
We should as a group put together the best top 10 list why real estate isn’t selling in Vancouver anymore.
For July only I will add “Chinese too busy watching doped up countrymen winning all events”.
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July 29th, 2012 at 10:33 pm 128
Was at a friends wedding last night, with a group of friends. One asked me if I am going to up-size from my current place to a bigger one. I said no, since market is crashing, and gave him most up to date stats -50% in sales compared to last year and -10% in price in last 5 months. Second friend turned around and said that there is no way it’s going to crash in Vancouver, since San Francisco never crashed. I was bit a buzzed from gin and tonic so couldn’t remember exacts stats for San Francisco. Then the first friend jokenly said that second one bought a third property not too long ago and waiting for it to be built.
At that point I told them that lets not talk about real-state since it’s an emotional topic and I didn’t want to upset anyone, and lets enjoy the wedding.
Had a huge hangover this morning, too much gin, never again.
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July 29th, 2012 at 11:33 pm 129
@SunBlaster:
Central Banker: Free Booze!
Average Person: Whoopie!
Central Banker: Whoa, hold up!
Average Person: Doc I’ve got a hangover! Help!
Central Banker: Have a shot of this!
Average Person: That’s better, but I ain’t doing too well.
Central Banker: Have another shot!
Average Person: Ugh! I think I’m going to-
Central Banker: One more!
Average Person: BLAAGGGHH!!!
Central Banker: Keep drinking, really!
Average Person: My liver is failing.
Central Banker: This is the only medicine we have!
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July 29th, 2012 at 11:55 pm 130
@SunBlaster:
Your friend is toast. It’s theses people that think “it’s different here” that I can’t wait to rub noses in it…
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July 30th, 2012 at 12:04 am 131
[...] Histats.track_hits();} catch(err){}; Inventory posted this update to detached sales in Richmond and it’s [...]
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July 30th, 2012 at 6:20 am 132
126 blamegame Says:” Everyone is responsible for their own purchases. If they go broke, fuck ‘em. They should have made better decisions.”
Don’t confuse my gist with sympathy or bailouts. Buyers get what’s coming to them. If that piece of shit in charge suggests taxpayers who saved instead of bought should ‘help’ buyers in trouble, I’ld consider emigrating.
What jesse infers however is that no matter the distortions and incentives from government and industry, buyers are solely responsible, simplistic reasoning that undercuts one of the fundamentals of free markets: maximizing returns. Hidden government stimulus assured housing performed that function spectacularly well for the last decade. You’re blaming the market for behaving like a market.
The federal government continues to this day telling voters and anyone who’ll listen that we’re different and Canadian housing isn’t in a bubble, contrary to the very same historical precedent you point to in the US and financial opinions world wide. You want to lay the entire blame on a plumber or clerk who didn’t check against the opinions of Nobel economists or the books of federal housing programs before buying a home, fill your boots. Whitewashing their actions guarantees those who enabled this bubble get to take advantage of basic human nature again once the dust settles. The only good it serves are the industry’s.
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July 30th, 2012 at 6:39 am 133
@fixie guy:
“The federal government continues to this day telling voters and anyone who’ll listen that we’re different and Canadian housing isn’t in a bubble, contrary to the very same historical precedent you point to in the US and financial opinions world wide.”
The reason the Cons are saying this (and the other parties aren’t calling them on it) is because it’s what the voters want to hear. We have a bubble because the voters wanted a bubble. No clearer lesson can be gained by the outcome of the election in 2011.
Ultimately you can’t blame politicians for saying and doing what it takes to get elected, you have to blame the voters.
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July 30th, 2012 at 8:22 am 134
133 patriotz Says: “Ultimately you can’t blame politicians for saying and doing what it takes to get elected, you have to blame the voters.”
Voters thought they were getting a healthy economy based on sound conservative fiscal policies. The got corporatism and a bubble. I’ll still put the bulk of the blame on the deceiver over the deceived, as I blame Enron and anyone who loads children’s milk with chalk dust no matter how greedy and selfish consumers are to want cheap milk and quarterly cheques.
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July 30th, 2012 at 9:49 am 135
@patriotz:
It might be useful step away from blame and look at it in terms of policy. If we think that the policy of backstopping the banks in order to flood the housing market with easy money is a bad policy, then we should be pointing that out.
Just because the population agrees with stupid policy does not mean we should not point fingers at the policy makers. For example, the vast majority of Americans supported the Iraq war, but that does not mean their is no point in criticizing the Bush administration.
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July 30th, 2012 at 9:59 am 136
@N:
“we should be pointing that out”
We’ve been pointing it out for seven years now and essentially all we’ve received in return is derision.
But far more important than anything we’ve been saying is the colossal bust in the US which every Canadian knows about. If people won’t pay attention to that they won’t pay any attention to anything.
Yes of course the Cons took advantage of the population’s greed and stupidity but as the saying goes, you can’t cheat an honest man because he doesn’t expect to get something for nothing.
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July 30th, 2012 at 10:20 am 137
@fixie guy: “simplistic reasoning that undercuts one of the fundamentals of free markets: maximizing returns.”
That’s not the point I’m making, I’m stating the focus should not be drawn from perfectly good examples of people managing their families and businesses without getting swept up in financial woe wrought by poor risk-return. The inevitable sob stories of people getting swept up in asset bubbles too grandiose to fathom, and blaming governments for producing inherently unstable financing guidelines, diminish personal responsibility and there are countless examples stretching from families with generations of accumulated wealth to single parents living hand-to-mouth who have managed to avoid taking the bait. I just hope whatever these people did or were advocating doesn’t get glossed over when TSHTF.
I will be blaming government like everyone else but I don’t think its ultimately the right thing on which to focus the lion’s share of attention.
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July 30th, 2012 at 11:22 am 138
@Kaul P: Listing for $459k? How is that possible? The seller bought the place last August for $474k per BC assessment. Why does he choose to lose $15k plus carrying costs like mortgage interest (or the interest income if he bought for cash), selling agent commissions, property taxes, insurance, legal fees? Wouldn’t he lose like $70k when all is said and done? Doesn’t vancouver RE always go up?
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July 30th, 2012 at 12:07 pm 139
@jesse: Perhaps the cure is education and a culture that’s more interested in facts, and looking past the marketing messages? I don’t understand why people aren’t embarrassed to “dumb down”. They will even defend their right to be dumb.
The discussion about who invented the internet (or even what “The Internet” is) is just another example. Very simple concepts, very simple facts.
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August 1st, 2012 at 11:00 am 140
[...] it’s an emotional topic and I didn’t want to upset anyone, and lets enjoy the wedding.” – SunBlaster at VCI 29 Jul 2012 10:33pm Share: This entry was posted in 01. He Said, She Said, 09. Delaying Buying and tagged Anecdotes, [...]
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