Can’t burst a bubble that isn’t there
Some people are freaking out about a housing bubble in Vancouver.
Relax.
Tsur Sommerville of the UBC CUER Sauder school of business says there is no bubble and I bet the developers who sponsor the school would agree.
So it’s unanimous, no bubble.
But if you want a giggle check the spelling on the URL.. Sponsers? well I guess they study economics, not spellonomics.
Anyways, Tsur says no bubble in Vancouver.
“You can’t burst a bubble that wasn’t there,” said Somerville. “But you can have prices above where they should be and it not be a bubble.
“A bubble isn’t just defined by high prices,” he said.
Somerville identified a housing “bubble” as conditions akin to what was happening in 2007.
“It didn’t matter what the condo looked like or what it’s going to look like or who was building it, people were lined up around the block and snapping it up,” he said. “They were saying, ‘I’ll take 12, please.’ That’s more of a bubble environment.”
So there you have it. We had a ‘bubble environment’ in 2007, but right now there is no bubble because very little is selling so we’re safe from a bubble that could burst. We have prices that are above what they should be, but no bubble.
Read the full article in The Province.
September 12th, 2012 at 12:14 am 1
What a retard. Seriously, where did he go to school?
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September 12th, 2012 at 12:41 am 2
“Somerville identified a housing “bubble” as conditions akin to what was happening in 2007.”
So he actually defined a Vancouver RE bubble! One that DIDN’T burst, amazingly. (How can a bubble that doesn’t burst be defined as a bubble? Circular, I know.. that’s exactly my point)
Let’s see if he’s luckier this time around
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September 12th, 2012 at 12:46 am 3
http://www.ivo-welch.info/oped/ethics.html
–quote–
What is worse is that many academics (economists and otherwise) will defend almost any behavior in exchange for money. This applies especially but not only to large firms that are in the business of providing expert witnessing advice (such as Charles River Associates, Lexecon, etc.) They see themselves not as economic experts whose task it is to provide the court with expert advice, but as economic experts whose task it is to provide the lawyers that hire them with the best economic arguments to defend any behavior.
From “The Inside Job”:
http://www.youtube.com/watch?v=8lHvTKzfu8Q
Hilariously, and on camera, this one gets caught in a lie about the title of a paper he wrote that is central to justifying unethical behavior in the 2008 financial collapse. He then suggests the title of the paper was a typo and he actually had the opposite position on the question.
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September 12th, 2012 at 1:54 am 4
You can only identify a bubble in retrospect. He gave example for 2007 was a bubble. And it’s a bubble because 2008 prices retracted. Now in 2012, the price are even higher than 2007, but it is NOT a bubble. Why? because the price hasn’t retracted significantly yet.
So in simple words, it’s “prices dropped significantly” vs “prices going to drop significantly”. Canucks won the Stanley cup vs Canuck is going to win Stanley cup
The reason the forum quote something “Can’t burst bubble in when there isn’t” in a title in VCI (where more people are bearish), just to encourage more people to reply with emotions.
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September 12th, 2012 at 3:08 am 5
Just another economist who has lost his balls after 10 years of bubble-hell and doesn’t even know what is going on anymore. He has waited for a bubble for so long, it finally comes, and he is clueless. This is a hellish prediction for him to make. He will look foolish a year from now.
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September 12th, 2012 at 5:44 am 6
this summerville guy kills me
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September 12th, 2012 at 6:12 am 7
@G:
“You can only identify a bubble in retrospect.”
WRONG. Many, many commentators identified the bubble in the US and elsewhere in 2005.
http://www.economist.com/node/4079027
If investors are willing to buy properties which carry an operating loss because they think they can come out ahead later selling for a higher price, that’s a bubble NOW by definition.
Somerville, Rennie et al are just playing Humpty Dumpty and inventing their own definitions of “bubble”. The latter even came out and said that investors cannot break even on costs but are expecting capital gains, and then said there was no bubble by his “criteria”.
Rennie’s job is simply to sell condos of course, but Somerville has a responsibility to his university and the taxpayers of BC, and it’s shameful that he’s been able to continue to spout this nonsense without being called out on it by the academic community.
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September 12th, 2012 at 6:43 am 8
AHA! I knew it. I always knew Tsur Sommervile is the credible academic expert and that Yale Professor Robert Shiller has no clue what he was talking about when he refers to Vancouver’s bubble
Seriously, How can local media give this guy any forum at all??
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September 12th, 2012 at 6:59 am 9
I would like to find some quotes from Sommerville in 06/07 where he claimed no bubble…..DOH
Yup, I missed it last time, but now that prices are 20% higher, no bubble now.
What a Dolt!!!!!
Dave#1
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September 12th, 2012 at 7:17 am 10
@Anonymooose:
From his own web-site.
here’s where he went to school:
Hebrew University, Jerusalem, Israel
B.A., Economics and East Asian Studies, 1986. Graduated with Honors, Faculty of Social Sciences Dean’s List.
Harvard University, Cambridge, Mass.
Ph.D., Economics, 1994; A.M., Economics, 1991.
Here are the courses he teaches:
Teaching – Courses
Commerce 307 – Real Estate Investment
Commerce 408 – Real Estate Development
Here is his web-site:
http://strategy.sauder.ubc.ca/somerville/
If there was anyone talking his own book, then it would be this guy.
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September 12th, 2012 at 7:24 am 11
@frank: Really, I would never take his courses. I would be broke in no time. The students should be aware, Omg.
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September 12th, 2012 at 7:28 am 12
@G: “You can only identify a bubble in retrospect.”
Come on. That is like a doctor saying you can only confirm you have a terminal disease until after you die. If any other professional used the same criteria Tsur is using we could never forecast anything until after the final outcome takes place.
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September 12th, 2012 at 7:55 am 13
But “best place on Meth” with his Grade 8 education says it’s a Bubble…How can such a genius be wrong?
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September 12th, 2012 at 8:14 am 14
Obviously not the intent, but the Merchants of Bullsh*t like Tsur are doing society a service.
I like to think of it as Psycho Analysis Economics Therapy Gratis.
Consider the poor fool prodded by Global who has mortgaged his and her future for a leaky fungus crammed box.
They need Tsur, or Prozac; it’s temporary relief,and it’s cheap.
The indebted slaves can get some relief,when they read the Province for free at coffee break.
Not fair, I know, the pimps will blame it on an unforeseen “Black Swan Event”.
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September 12th, 2012 at 8:15 am 15
“But real estate is crashing everywhere”….Don’t think I’ve ever seen a bigger gathering of dummies in one place before.
http://www.heraldsun.com.au/realestate/buying/australians-help-fuel-london-housing-boom/story-fndcuqbl-1226471438591
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September 12th, 2012 at 8:20 am 16
who cares about the spelling. armchair economists and stupid bears just dont know they have been making fun of themselves for too long already. it’s about time for them to move back to the cage.
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September 12th, 2012 at 8:25 am 17
@Glen Livet:
actually, as Frank noted, Tsur is a very capable academic – see his CV for his refereed publications, and note he was smart enough to get in and complete the Harvard PhD, and tapped on the shoulder to head up Sauder Real Estate. Like it or not, UBC business and economics is well-regarded and has a number of leading academics. And comparing his statements to Shiller is a moot point, particularly when Shiller himself stated he really didn’t know much at all about Vancouver when he made the bubble statement.
The fact is that Tsur has the credentials, publication record and education to be considered an expert in the field of real estate economics
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September 12th, 2012 at 8:27 am 18
Courtesy Mish:
http://globaleconomicanalysis.blogspot.com/2012/09/canadian-exports-collapse-expect-plunge.html
Now you might ask, if we are running such a big trade deficit, why do we have such a high dollar? The answer is that the high dollar is not being supported by trade but by Canada borrowing from foreign lenders. When foreign lenders loan CAD to Canada, they have to buy CAD first on the currency markets and that props the exchange rate up. That’s how the huge growth in consumer debt has been financed.
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September 12th, 2012 at 8:35 am 19
@watcher:
Somerville knows perfectly well that there is a RE bubble in Vancouver by the accepted financial definition, he’s simply spouting BS to the public to serve the agenda of his cronies in the RE business.
I note that Somerville teaches a course in RE investing. This means RE investing by people who actually know what they are doing, i.e. REIT’s and similar businesses, and I have no doubt that he teaches the accepted industry metrics, by which anyone “investing” in a house or condo in Vancouver today would be considered out of his mind.
But it seems that his peers seem unwilling to judge him by what he says to the media.
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September 12th, 2012 at 8:35 am 20
A rebutal of a case only comes if the case is present or perceived to be present, thus a rebutal is a good indicator of the case existance or majority of observers perceiving its existance.
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September 12th, 2012 at 8:40 am 21
@watcher:
Anyone who’s ever watched a movie about an impending terminal disaster knows this:
Never, EVER let the general population know the meteor is about to hit the earth.
That creates panic and makes it difficult for the Government officials, VIPs and all sorts of Sponsors to safely board those Big Ships they have prepared ahead of time. And I hope you all know continuity of Government rather than well being of its subjects is paramount, so desperate times = desperate measures and so on…
In the meantime have the happy music play just a little bit louder and make all the Talking Heads you have at your disposal talk about how meteors never really hit the Earth, so not to worry folks, nothing here to see.
And no, I’m not being sarcastic.
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September 12th, 2012 at 8:44 am 22
I’m actually a Realtor and I want prices to drop about 10%-15% because things will boom for us once that happens…keep up the good work guys.
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September 12th, 2012 at 8:47 am 23
@watcher:
Granted, Tsur looks very nice on paper. Unfortunately, the media is not doing a good job of examining the question of what weight should be assigned to the predictions of experts in quasi-scientific fields such as Economics.
Such “experts” do not actually have an objective model for subjective questions. Well regarded academics in high visibility fields related to personal finance will always have conflicted financial incentives. Almost universally, they will tend to provide interpretations of the data which are of the most benefit their own careers.
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September 12th, 2012 at 9:09 am 24
Here is the syllabus for Commerce 307 at UBC in 2010.
Commerce 307
Term project:
Notice when Tsur is asking something from the students he sounds a lot like the people on this forum? Obviously, any student who submitted a paper based on the kind of “analysis” that Tsur gives to the media would get an F.
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September 12th, 2012 at 9:10 am 25
I’m with Tsur. Have you ever seen an ultra-slow motion video of a balloon popping or a bubble bursting? At the beginning, there’s an expanding hole, but the shape is still mostly intact. Because of the hole, it isn’t a bubble, lacking a contiguous surface. That’s where we are now.
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September 12th, 2012 at 9:19 am 26
@BurnabyRealtor:
“drop about 10%-15% because things will boom for us once that happens…”
Ummm, yeah, the only places that are selling right now are already down at least 10-15% from the peak.
But what a good sport you are! Glad you’re so keen on prices going down, because the downward trend has only just begun. I sincerely hope you have some other job to tide you over for the next 3-5 years until the the bottom is reached.
Yes, eventually there will be a boom again, one day. Nobody is denying that. It will be a loooooooooong time coming, though.
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September 12th, 2012 at 9:23 am 27
Tsur, you dumb F.
No high prices don’t indicate a bubble.
High prices, record low interest rates, zero economy other than FIRE, rents that fall below other “world class” cities.
These things point to a bubble.
Turn in your professor’s badge and go join Cam Good/Muir.
*shakes my head*
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September 12th, 2012 at 9:24 am 28
What a jackass…“It didn’t matter what the condo looked like or what it’s going to look like or who was building it, people were lined up around the block and snapping it up,” he said. “They were saying, ‘I’ll take 12, please.’ That’s more of a bubble environment.”
I agree with Sewer that we were in a bubble in 2007. Problem is that we’re still in that same bubble…did he think that everything reset in 2008 and now we’re in normal conditions? 2008 was a blip. The big difference between now and 2008 is that the 2008 crash occured because of external forces. At the time there were still loads of fools with their finger on the trigger, but had the rug pulled out from them because financial markets seized up. Once The Cons stepped in with a bit of stimulus, these fools were more than eager pull the trigger.
This time, save for some tightening by The Cons, the bubble has been allowed to run its course and the supply of fools has been thoroughly exhausted.
God help anybody that graduates from that school. Sewer is as Sewer does.
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September 12th, 2012 at 9:26 am 29
@gokou3: So, when people say “the bubble” can’t end with a slow deflation or stagnation they’re really just talking semantics? Because, by definition, if it doesn’t pop it wasn’t a bubble to begin with?
Well, if that’s the case, I’m with Tsur; it might not be a bubble. Prices are skyhigh and various ratios out off whack, but I don’t think a sudden pop is inevitable, in which case its not a bubble.
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September 12th, 2012 at 9:29 am 30
@watcher:
Actually there are lots of academics with great credentials who have no clue what they are talking abot. There are profs who still say there is no climate change, of course a large number of them seem to live off grants and bursaries from the oil industry.
This guy is teaching RE investing and his dept is sponsored by the RE industry.
As to comparing him with Shiller, IMO he isn’t fit to clean Shiller’s shoes. Shiller uses mathematically formulas to back his arguments, has developed a housing index- the Case-Shiller index, is highly regarded and teaches general economics.
Tsur has tenure which means right or wrong he will be there for a long time.
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September 12th, 2012 at 9:31 am 31
Tsur isn’t stupid unethical probably, lack of morales probably.
He just doesn’t want to bite the hand that feeds him and his family and forgo that cushy lifestyle just to help some poor schmuck struggling to finance a home.
If the real estate market crashes, fewer people will want to invest it and fewer realtors will take his courses which would probably affect his lifestyle.
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September 12th, 2012 at 9:37 am 32
The changes to our immigration system are more significant than any of us realize. So much has happened that we can’t even begin to guess the cumulative effect.
There are ton of news articles lately, all with bits and pieces of information and commentary. Its forming a “big picture” but its still quite hazy. I think the goals of the Conservatives are to direct most immigration to the Prairies and away from Vancouver/Toronto, along with finishing off the Liberal Party (Conservatives perceive, rightly or wrongly, that the Liberals let the immigration system go haywire because it was in the interests of the Liberal Party).
Check this article:
According to Sohn, it took eight to 12 months for his clients to obtain Canadian citizenship a few years ago. He now warns them it will take two years or even longer if there’s any kind of investigation. The longer wait times can actually contribute to the problem of citizenship fraud, he said.
“The longer people have to wait, the more frustrated they become. The more tempted they are (to cheat the system),” said Sohn, emphasizing the need to balance stronger enforcement with processing efficiency.
According to the Immigration Canada website, it took 21 months to process 80% of all citizenship cases between April 2011 and March 2012.
http://vancouver.24hrs.ca/News/local/2012/09/10/20186221.html
They have doubled or tripled the amount of time it takes to become a citizen.
The article continues:
Vancouver immigration lawyer Richard Kurland said he has already received email from lawyers in Asia seeking his assistance in the wake of the crack down.
“It seems a chord has been struck,” said Kurland, who believes the lawyers represent Asia-based clients who falsely claimed to be residents of B.C. on their applications for citizenship or permanent residency.
“I think one way (for them) to go is in exchange for no criminal charges, a voluntary relinquishment of citizenship. That will save everyone a ton of money.”
This will have a chill effect that goes way beyond those directly effected by the immigration changes. There is going to be a lot less “false Canadians” claiming fake residency in Canada while continuing to work overseas. Goodbye HAM.
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September 12th, 2012 at 9:41 am 33
Sommerville is a serious academic with impressive credentials. Are you guys incapable of responding to what he says without ad hominem attacks? He is not stupid, and there is no indication that he is unethical or that he is being disingenuous and serving the interest of Sauder sponsors. He just happens to disagree with you. Now, deal with it without the name calling and insults.
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September 12th, 2012 at 9:45 am 34
@patientlywaiting….wouldn’t less immigration mean less competition for jobs thus higher wages making Vancouver even more desirable?
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September 12th, 2012 at 9:47 am 35
For fun, I found these comments form Sewer back in 2007:
Tsur Somerville, director of the centre for urban economics and real estate at the University of B.C.’s Sauder School of Business, said the signals are consistent with the over-all market slowdown that has been expected. He added that the rising inventory “is not consistent with gross oversupply” that would trigger a correction in the market. However, Somerville said a market slowdown is needed at this point, because too much real estate is becoming unaffordable for too many people.
He added that changes in mortgage terms that allow for 40-year amortization periods have helped reduce monthly mortgage payments for some buyers, which has helped the market.
“At some point even that plays itself out,” Somerville said. “There are price points that people just cannot enter at, so it isn’t a place to get a lot of growth.”
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September 12th, 2012 at 9:47 am 36
Boy, I sure am glad we don’t have this kind of thing in Canada anymore. Anyone feel like spending $49 for a night of comedy and reporting back on whether he’s even vaguely aware of regulatory changes?
Given that floor tickets to tonight’s Roxette show (Glass Tiger opening!) are $100 a pop tonight, I’d say $49 is a deal for the right kind of masochist.
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September 12th, 2012 at 9:54 am 37
When we’re talking about bubbles we should be talking about speculation, and I think this recent post from Calculated Risk, and the one linked that he wrote in 2005, are must-reads:
http://www.calculatedriskblog.com/2011/12/research-new-paper-on-role-of-investors.html
In the 2005 post he states:
There is little doubt for me that fundamentals are out of whack. What Tsur Somerville is stating is that “speculation” is not occurring so there is no “bubble”. What I think may be amiss here is that speculation did occur, and was held in stasis for 4 years with cratering real rates and opening the barn door to 100% mortgage loan underwriting during GFC. The speculative excesses are still with us, the participants have simply been given a stay.
Calculated Risk concludes:
“Rapid changes in the mortgage lending industry” occurred in Canada in the form of lower interest rates through the 2000s and changes to amortization rules kicking them out to 0-40, then slowly relinquished to 5-30 for low-ratio and 5-25 for insured. The underwriting of loans via a 100% government backstop certainly helped to lower spreads.
The “regulatory oversight” was true in the US and I don’t see the same severity in Canada. That stated, recent moves in Canada by OSFI indicate oversight is now being bolstered and they’re not finished. Despite Canada’s “sound” banking oversight, banks are still looking like my dog after I come home and there’s garbage on the kitchen floor. Dogs do what dogs do, and I don’t blame her for being a dog.
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September 12th, 2012 at 10:00 am 38
@jesse: This is what I mean! A carefully considered and argued response that does not resort to name calling and insults, and one that actually makes an effort to come to terms with what Tsur is really saying.
Good job jesse.
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September 12th, 2012 at 10:04 am 39
“Vancouver immigration lawyer Richard Kurland said he has already received email from lawyers in Asia seeking his assistance in the wake of the crack down.
“It seems a chord has been struck,” said Kurland, who believes the lawyers represent Asia-based clients who falsely claimed to be residents of B.C. on their applications for citizenship or permanent residency.
“I think one way (for them) to go is in exchange for no criminal charges, a voluntary relinquishment of citizenship. That will save everyone a ton of money.”
SWEET!
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September 12th, 2012 at 10:06 am 40
Well thanks @Anonymous, that couldn’t have come from a nicer guy than you.
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September 12th, 2012 at 10:07 am 41
@Anonymous:
Let’s say I go to the local dealership to look at some used cars. I bring along a friend who’s also an experienced mechanic. The used car salesman shows me a 99 Chevy and my mechanic goes through a list of things wrong with it: shoddy brakes, leaking oil filter, bad transmission. Tells me if I buy today it will cost me thousands in repairs over the next few years.
Then the used car salesman brings out a mechanic from the dealership’s own shop. This guy has “impressive credentials” – 20 years experience fixing cars, a degree from the Benz institute of car repair, etc. He gives the vehicle an impressive-looking multiple point inspection that takes over an hour, concluding that the car is just fine, no problems here.
Are you saying this mechanic “just happens to disagree” with mine and that there is “no indication that he is unethical or serving the interest of his employer?”
Are you seriously that daft? Or do you have your own personal interest in keeping this bubble afloat?
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September 12th, 2012 at 10:13 am 42
@Anonymous:
Commerce 307 says you have to identify two prices…
Did any student in Commerce 307 ever identify that the maximum rational profit maximizing price is in fact 50% of the present list price? Reading the 307 syllabus, it would seem the whole course is slanted to positive real estate appreciation irrespective of real inflation rates, local wages, rents, irrational beliefs among the ignorant masses and so on.
The whole idea of this course apparently is to develop marketing collateral materials which justify higher and higher prices! Tsur obviously is not a behavioral economist like Shiller or even a particlarly unbiased person. Apparently, his course, Commerce 307 is an instruction manual on how to exploit rising real estate prices. Is there a different course on how to exploit declining real estate prices or any course in this “school” exploring the question that persistently declining prices might also be a possibility?
This is further to Patriotz’ remark:
Here is the syllabus for Commerce 307 at UBC in 2010.
Commerce 307
Term project:
This assignment is an investment analysis of the potential purchase of an income producing real estate asset. You must prepare a written report that provides the critical analysis for whether:
your firm should acquire the asset at the listed price. In doing so bear in mind the following:
a. While your firm is a major real estate investor for pension funds, your analysis should be based on the attractiveness of the property as a stand-alone asset, i.e. ignore any portfolio or corporate objective issues.
b. You are trying to ascertain whether the price makes sense for the asset in question. As part of an acquisition analysis you will also have to idenitfy the maximum price you would pay for this asset
c. Defend your decisions relative to both of the prices.
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September 12th, 2012 at 10:15 am 43
@Anonymous:
If that means you have some disagreement with what I’ve said about Somerville, I look forward to your critical analysis. As Tsur himself expects of his students.
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September 12th, 2012 at 10:17 am 44
@Yalie: I don’t have time to discuss this in any detail, but I just don’t buy your analogy. Academia has ways to enforce standards and integrity that don’t seem to be found in your car dealership analogy. To an academic, reputation is everything.
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September 12th, 2012 at 10:18 am 45
Canada Housing Bubble
100% without a doubt, Canada is in the midst of an immense housing bubble. The Canadian bubble outlasted bubbles in China and Australia. Because it did, I get taunts from Canadian readers all the time.
I received one just yesterday. It went something like this “So Mish, where’s your Canada Housing Collapse?”
The answer, as always is “I don’t know”. That said, bubbles pop by definition. Moreover, the longer the bubble lasts, the bigger the implosion.
Australia is in the midst of a big property bubble collapse, a big retail collapse, and a big export mining collapse all at the same time.
Canada will follow suit at some point and given taunts out of the blue, now is as good a time as an
Read more at http://globaleconomicanalysis.blogspot.ca/2012/09/canadian-exports-collapse-expect-plunge.html#rWpixJV5EKvwtp2s.99
http://globaleconomicanalysis.blogspot.ca/2012/09/canadian-exports-collapse-expect-plunge.html
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September 12th, 2012 at 10:29 am 46
@Jay..Yeah…Australia is collapsing…Where do you morons come from?
http://vendoradvocacy.com.au/melbourne-real-estate-august-2012-2/
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September 12th, 2012 at 10:35 am 47
@Anonymous:
Good point. There is absolutely no evidence of an academic – especially an economist – whoring himself out in exchange for personal financial gain. Reputation and academic standards are just too darn important to these titans of integrity.
Oh wait, what was that link posted just minutes ago?
http://www.youtube.com/watch?v=8lHvTKzfu8Q
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September 12th, 2012 at 10:49 am 48
Yeah..China is collapsing too…lol…What a bunch of dolts.
http://emergingmoney.com/china/chinese-real-estate-xin/
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September 12th, 2012 at 11:00 am 49
@Anonymous: “To an academic, reputation is everything.”
No. Being funded is everything (especially in Sauder).
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September 12th, 2012 at 11:05 am 50
Yeah..Retail collapse in Australia..look out the world is ending..metal midgets.
https://mninews.deutsche-boerse.com/content/australia-june-retail-sales-trend-growth-accelerates
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September 12th, 2012 at 11:06 am 51
@Yalie: True, there are bad apples in academia, and perhaps I overstated my faith in academic integrity. As for the Mishkin clip, you should also consider Mishkin’s response, found here:
http://blogs.ft.com/economistsforum/2010/10/the-economists-reply-to-the-inside-job/#
He correctly points out that the situation in Iceland in 2006, when he wrote the report, was very, very different from the situation in the run-up to the collapse in October 2008. A lot happened in between, including a significant weakening of the regulatory controls of the financial system, with the banks systematically recruiting all capable regulatory staff with huge salary offers. The “typo” is a big egg on Mishkin’s face though.
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September 12th, 2012 at 11:19 am 52
@Anonymous:
Good link. And since we’re all for full disclosure, here’s the filmmaker’s reply to Mishkin’s blog post, also in the FT:
http://blogs.ft.com/economistsforum/2010/10/the-director-of-inside-job-replies/#axzz1UJ5C49lj
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September 12th, 2012 at 11:21 am 53
@Makaya: And to get funded you typcally need a reputation and respect, including peer-reviewed publications etc. You can ruin it all by selling out. For some academics, selling out is sufficiently profitable to give up your academic standing, but most of them don’t get such lucrative deals and therefore have to maintain their credibility.
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September 12th, 2012 at 11:22 am 54
@Many Franks: There’s a good thread on redflagdeals about this scam.
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September 12th, 2012 at 11:30 am 55
Digital Domain files for bankruptcy
http://www.thestar.com/business/article/1254942–digital-domain-files-for-bankruptcy
How many work in their Vancouver office?
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September 12th, 2012 at 11:38 am 56
@Yalie: Another good link. Thanks. It is clearly debatable whether Mishkin in fact sold out or wrote an honest report, based on the best information available to him at the time. It is also debatable to what extent this is relevant to Sommerville, other than to suggest that some academics can be bought and we can’t assume they all have integrity. I’m willing to concede that.
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September 12th, 2012 at 11:39 am 57
Bubble deniers, they’re so funny – especially when they’re speaking in tongues in an attempt to baffle us with bullshit like the Tsur and Muir comedy act.
Or Sherri Cooper calling it a balloon, not a bubble.
Doesn’t matter what they say anymore, there is nothing they can do for this market.
They deserve all the respect that any snake-oil salesman would get.
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September 12th, 2012 at 11:42 am 58
@Anonymous:
If you talk about science or social science, you may be right (although… see how the tobacco industry infiltrated academics a few years back or the oil industry more recently), but your argument doesn’t stand up for (most) business schools where reputation is built on how connected the school is to the business (and political) world. Nobody cares about “comsumer behaviour while buying condoms” research when you can have the CEO of Pfizer (or Lululemon btw lol!) or the Premier of BC to come and talk to your class (my own experience at Sauder)…
And how do you get so well connected? By pleasing the hand that feeds you, not by biting it…
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September 12th, 2012 at 11:56 am 59
37 jesse Says: “A bubble requires both overvaluation based on fundamentals and speculation. It is natural to focus on an asset’s fundamental value, but the real key for detecting a bubble is speculation … Speculation is key”
Splitting speculation from mortgage regulations is a critical error in logic as the latter creates the opportunity for the former. They’re deeply intertwined. How is the willingness to pay overvalued prices explained without speculation? When prices are rapidly rising buyers are more willing to bet on the expectation they’ll continue to rise, justifying the additional cost.
‘The “regulatory oversight” was true in the US and I don’t see the same severity in Canada.”
The airwaves have been full of offers for cash back mortgages for years, effectively zero down loans. The oversight obviously had loopholes sufficiently large to render regulations irrelevant.
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September 12th, 2012 at 12:02 pm 60
@Anonymous: “Sommerville is a serious academic with impressive credentials. Are you guys incapable of responding to what he says without ad hominem attacks? He is not stupid, and there is no indication that he is unethical or that he is being disingenuous and serving the interest of Sauder sponsors. He just happens to disagree with you. Now, deal with it without the name calling and insults.”
Come on Tsurd, get back to work.
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September 12th, 2012 at 12:18 pm 61
“Bubble Deniers”…lol. My house is almost paid off in the time you guys have been saying it’s a “Bubble”…It’s pathetic. If you like paying rent for the rest of your life pay rent and stop complaining.
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September 12th, 2012 at 12:21 pm 62
@Anonymous: Got me, dammit. So off I go to write that report about how you can’t go wrong buying in Richmond, Brought to You by Remax, Your Friendly Neighborhood Realtor.
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September 12th, 2012 at 12:22 pm 63
@Johnny:
“My house is almost paid off in the time you guys have been saying it’s a “Bubble”.
Congratulations, you bought a house way back when it made sense.
Let’s see you buy another one now.
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September 12th, 2012 at 12:24 pm 64
It’s been a f***ing bubble of colossal proportions. And now it’s blowing apart. We know it, lying pond scums Sommerville and Muir know it, “real” economists know it, the government knows it, and even the scheming MSM now acknowledges it.
I can’t believe the twisted verbal gymnastics these no-conscience arseholes spew just to keep the deceipt rolling a little longer. Wouldn’t it be nice if Tsur and Cam were forced to deal individually and personally, on a face-to-face basis, with each poverty-stricken owner who bought into their shameless bullsh*t hype jobs when the foreclosures begin in earnest. Bastards.
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September 12th, 2012 at 12:29 pm 65
“Way back when”….yeah the neighbourhood was pretty shitty as well with drug dealers and hookers…now there are nice shops and restaurants and cafes and skytrain close by…the market might stay weak but the prices will never go back to what they were.
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September 12th, 2012 at 12:29 pm 66
@Best place on meth: I’m curious, in your opinion, when did it last make sense to buy in Vancouver?
I bought a modest East Van house in 2003, beating multiple offers, despite some of my colleagues calling a bubble at the time. I would be almost mortgage free by now if I hadn’t upgraded in 2008 (which I now regret). In your view, did it make sense to buy in 2003?
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September 12th, 2012 at 12:30 pm 67
@Johnny: Love the renter hate. For every homeowner who doesn’t have to sell there’s a renter who doesn’t need to buy.
I wasn’t able to make any open houses yesterday, went straight from scuba diving to yoga to sushi. Didn’t have to rush home to fix anything either.
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September 12th, 2012 at 12:35 pm 68
Tsur is such a big dummy! Conflict of interest! His track record is so much worse than that of the bears on here! VHB, get out your graphs, keep telling us how the market is going to crash, like you have been, for the last 6 years. How’s that place you bought working out for you? How much has it gone up in value?
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September 12th, 2012 at 12:36 pm 69
@Anonymous:
Of course it made sense to buy in 2003, prices only started going up 1 year earlier and 1 year doesn’t make a bubble.
Nobody was calling it a bubble in 2003.
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September 12th, 2012 at 12:39 pm 70
@lee…I don’t hate renters but those thinking an economic collapse in Canada is somehow a good thing are delusional. With interest rates so low and going to remain low a mortgage is nothing…my co-worker rents a run down house for $1900.00 a month..$300.00 more than my mortgage.To each his own…living somewhere nice costs money and always will no one lives “Cheap” in the urban centers.
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September 12th, 2012 at 12:43 pm 71
@Best place on meth: Yes, some people were. Open houses were absolute madhouses. You had to bring your home inspector to the open house so you could make a no-condition offer in order to stand a chance. I remember one colleague actually selling that summer because she thought the madness just couldn’t last and she would be able to buy again much cheaper a few months later. I think she is still regretting that move.
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September 12th, 2012 at 12:45 pm 72
@Lee: “Didn’t have to rush home to fix anything either.”
Add this to list of false arguments, alongside “Homeowners can’t afford to go on vacation, only renters can”.
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September 12th, 2012 at 12:51 pm 73
@Vote Down The Facts: Stating that it’s a false argument doesn’t make it one. Had a co-worker have the water heater go while he was on vacation. Another was late due to what he called a ‘plumbing emergency’. Yet another had to leave to get a large trench dug in his yard very quickly.
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September 12th, 2012 at 1:00 pm 74
@Vote Down The Facts: You or anyone can’t prove it’s true or false. It’s just a general opinion.
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September 12th, 2012 at 1:04 pm 75
The sad thing about this bubble is when it pops, there will be many personal fortunes wiped out, families broken up, economy destroyed, Country debt increased and Tsur will still teach at Sauders.
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September 12th, 2012 at 1:08 pm 76
@frank: Lesson one is pay off the academics in his sylabus for would be developers no doubt!
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September 12th, 2012 at 1:09 pm 77
I spent close to 15 years working in academia at a major research university, and if I can tell you one thing about it is just because someone is a PhD, or a professor, or a department chair, does not mean they know what the f#$% they are talking about or you should listen to them. Many, such as this guy, along with the professor in Georgia who got $10 million from BP to flip flop on the damages of the oil spill, will say whatever it takes to keep their benefactors happy. They are like politicians who pollute young minds.
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September 12th, 2012 at 1:12 pm 78
@fixie guy: “Splitting speculation from mortgage regulations is a critical error in logic as the latter creates the opportunity for the former”
You are quoting a quote from McBride. My analysis is based on his definition, and by his definition we are in a “bubble”.
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September 12th, 2012 at 1:15 pm 79
#66 @Anonymous: “I’m curious, in your opinion, when did it last make sense to buy in Vancouver?”
2005 was exuberant. 2006 and onward has looked like a bubble to me. It’s important to remember that for most of 2004, and all the way back to 1993 the Canadian dollar was under 75 cents US. Does anyone think that’s normal? It doesn’t look normal in historical terms. So Canada was in a funk and the US was running hot. Now it’s the other way around. From this perspective some overvaluation is normal.
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September 12th, 2012 at 1:49 pm 80
I also bought my first home in 2003 and also had > 10 offers on the home we bought after missing out on a couple of other homes with multiple offers.
The term bubble has different meanings to different people. 2003 felt a little “bubblish because homes were all selling quickly with multiple offers and the home prices had gone up quite a bit over the previous few years. However, it wasn’t until mid 2006 or so where fundamentals like price/rent price/income starting getting completely out of hand.
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September 12th, 2012 at 1:54 pm 81
I don’t know why people assume Ph.D’s are always noble and ethical. Let’s see… medical doctors also take a lot of schooling (4 years undergrade, 4 years medical school) and they can be some of the most unethical people you will ever find. They will sell anything for the right amount of money, whether it’s Proactiv or Mr. Miagi’s magic back massaging wand, or Doctor Chow’s super duper weight loss formula. Doctors will also defend anyone in court for the right amount of money, no matter how discipcable the crime. You can always find at least one doctor to defend someone.
PhD’s are the same way. A lot of people don’t know, but Ph.D’s live there ENTIRE CAREERS with three goals:
1) Get published. No matter the cost.
2) Get grants/funding. No matter the cost.
3) Get tenure. No matter the cost.
Those are the 3 golden rules for a Ph.D. holder. They could care less about academia. And once they get tenure they could care less about teaching or ethics in many cases. This prof has obviously bought into what he is selling since he teaches real estate investment and like most professors he wants a nice big house to show off to all his friends. I am unaware of ANY PROFESSOR IN THE WORLD who does not have a wine cooler in their house somewhere, along with the usual granite counters, pot lights under cabinets, crystal chandelier, stainless steel fridge, etc. These guys are stuck up pretentious morons.
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September 12th, 2012 at 2:08 pm 82
@gokou3:
Don’t be ridiculous. Are you seriously claiming that all homeowners are constantly rushing home to repair things? Or that none take vacations?
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September 12th, 2012 at 2:09 pm 83
@ScubaSteve: Loudmouth ScubaSteve, true to form and full of incoherent BS.
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September 12th, 2012 at 2:11 pm 84
What year did VHB start his blog?
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September 12th, 2012 at 2:13 pm 85
@Anonymous:
“Yes, some people were (saying there was a bubble in 2003).”
Well some people were saying Elvis was alive too.
The issue is whether people were saying there was a bubble based on the criteria we use in this forum. The answer is no.
So let’s not hear “if I’d listened to people like you I wouldn’t have bought”.
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September 12th, 2012 at 2:13 pm 86
@Ted:
2005, the Year of the Bubble.
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September 12th, 2012 at 2:13 pm 87
@Ted: Such lines of enquiry are not welcome on this blog.
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September 12th, 2012 at 2:14 pm 88
@patriotz: What year did he buy a place?
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September 12th, 2012 at 2:17 pm 89
@Vote Down The Facts:
Your straw-man argument [I din't know anybody who claims that "only renters go on vacation"] statement is not similar to Lee’s at all. If somewhere were to actually say what you claim they have said, they are demonstrably (and empirically) wrong. On the other hand, it is absolutely true that renters (by definition, since they don’t own their place or residence) have no (or very minimal) obligation to spend time or money on home maintenance.
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September 12th, 2012 at 2:22 pm 90
@Best place on meth: “Nobody was calling it a bubble in 2003″…I don’t think I called it a bubble back in 2003, but I did tell my friends that were buying back then that it was the early stages of a bubble. There was panic buying back then, and the last time I had seen that type of frenzy was in the early 90′s and that crashed too.
One of my friend’s that bought back then did very well on his condo…now owns a $2M place in WestVan and is leveraged to the tits. In a year or two all the equity he gained since 2K3 will be wiped out. Bubbles have a way of wiping out anybody that gained from them with blind luck. The same friend made a lot of money in the tech bubble, thinking he was a genius along the way…only to get his ass handed to him in the end.
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September 12th, 2012 at 2:22 pm 91
@Anonymous I distinctly remember walking around downtown in 2001 and seeing condo ads saying: “Buying is cheaper than renting!”
So when that happens again and developers are having difficulty selling, it’ll probably be a good time to buy.
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September 12th, 2012 at 2:27 pm 92
As usual Patriotz, BPOM and Anonymous have nothing better to do but troll this blog. However, they have gotten tired of being foreclosed on all the time so instead they have tried to learn how to insult people without it being obvious. If they manage to get a post through foreclosure with a subtle, hidden insult, it must make their day.
Must be super low sales today.
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September 12th, 2012 at 2:30 pm 93
I meant VDTF, not BPOM. What would I do without the comical posts of BPOM?
Meanwhile I’ll continue to “vote down the facts”… because apparently that’s what we do on this blog.
Anyone have any predictions on sales today?
Single digits?
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September 12th, 2012 at 2:35 pm 94
@patriotz: No, I won’t say that. You guys do like your ratios. 2003 may not have had the whacky ratios, but it definately did have the element of speculation, with people feeling this strong push to buy and to stretch their budgets as far as possible to “get into the market” before it got out off reach. I was terrified at the time but in retrospect glad I went for it.
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September 12th, 2012 at 2:36 pm 95
Wow there are a lot of angry bulls here. How did this little blog get all this attention? Why do they even care what we think?
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September 12th, 2012 at 2:36 pm 96
My new response to bubble deniers:
“Vancouver’s real estate prices are now 2-3 standard deviations above historical fundametals like price-to-rent ratios. Can you name one real estate market anywhere in the world that has not seen a significant correction in that situation?”
And then wait for an answer.
Maybe there is such a market. After all I do know some university professors that don’t have wine coolers and granite counter tops.
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September 12th, 2012 at 2:39 pm 97
@Bag it and tag it: As per Patriotz’ comment, I will admit that when I was telling people back in 2003 that we were heading for a bubble I wasn’t basing it on any criteria such as price/rent, etc… I didn’t even know much about CMHC and changes to the mortage rules. Experience told me that historically any time there’s been panic buying, be it real estate or stocks, eventually it crashed.
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September 12th, 2012 at 2:40 pm 98
@McLovin: Nobody cares what you (or ScubaSteve or UnagiDon) think. We come here to see what jesse and some of the others have to say, ’cause they’re actually smart.
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September 12th, 2012 at 2:42 pm 99
@McLovin: they dont care what you think. they just wanna ridicule you only!
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September 12th, 2012 at 2:43 pm 100
@Ted: “What year did VHB start his blog?”
you missed another question: what year did vhb buy his place and fold his blog?
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September 12th, 2012 at 2:45 pm 101
troll index says very low sales today…
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September 12th, 2012 at 2:58 pm 102
@Scuba
I agree with you about the 3 goals of academics. Most of them were turned into mad people by a crazy pressuring system that prevents one from taking the time to think.
However you are wrong in thinking they are rich: many profs with families who can hardly make ends meet, here in Vancouver. Go to the UBC housing website and see for yourself. You describe a reality that is 10 years old.
I know academics in several field. I do not wish to stereotype, but in terms of trends: the more you hear about someone, usually the least research they do. Those who are really fond of research are usually quite, competent, and do not have time/energy to work their way into academic fame.
Net result: the last physics Nobel prize was given to organizers/managers, not to those who did the science.
I am always suspicious of an academic who is all over the media.
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September 12th, 2012 at 3:05 pm 103
@Makaya: “troll index says very low sales today…”
Either that or Tsurd Sewervill finally got an internet connection.
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September 12th, 2012 at 3:11 pm 104
@Vote Down The Facts: Where did you see the word “constantly” in the preceding arguments? Don’t try to slip it in my mouth.
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September 12th, 2012 at 3:17 pm 105
look guys, yeah, it’s true that he’s been wrong for half a decade. it’s also true that whenever the market looks a little bad he reappears in an obvious attempt to cash in on his reputation, only to disapear once the market improves.
and it’s also true that VHB bought a place. it’s you have to remember he bought a place because it was personally the right decision for him and his personal situation to make, persionally. economics is a very personal thing. you have to understand that. we should be happy that a bear, one of us, is making good money on his place. good for u VHB! you’re one of the good guys!
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September 12th, 2012 at 3:30 pm 106
@Painted turtle:
Professors do quite well at UBC.
http://www.vancouversun.com/news/public-sector-salaries/advanced-search.html?appSession=431320068619371&RecordID=&PageID=2&PrevPageID=2&cpipage=1&CPIsortType=asc&CPIorderby=Remuneration
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September 12th, 2012 at 3:33 pm 107
@gokou3:
Lee implied it with “I wasn’t able to make any open houses yesterday, went straight from scuba diving to yoga to sushi. Didn’t have to rush home to fix anything either.”, and you didn’t exactly disagree. In fact you said “You or anyone can’t prove it’s true or false”.
I also know renters who have to “rush home”, for example because their landlord expects their tenant to be at home to let repairmen in. But of those I know ever who have to “rush home” I’d say 99.99% of the time it’s related to their family (i.e childcare issues), and not their residence itself.
If homeownership is such a drag, why are most of you so desperate to climb aboard?
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September 12th, 2012 at 3:34 pm 108
@Best place on meth: Still can’t quite afford the average westside SFH (with affordability defined per Demographia)?
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September 12th, 2012 at 3:37 pm 109
@gokou3:
Correct, even with the top 100 UBC profs all making over $245K they still would have a hard time buying a west side house.
Only communist party bureaucrats officially making $12K a year can afford those.
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September 12th, 2012 at 3:49 pm 110
@Vote Down The Facts: Lee implied it with “I wasn’t able to make any open houses yesterday, went straight from scuba diving to yoga to sushi. Didn’t have to rush home to fix anything either.”, and you didn’t exactly disagree. In fact you said “You or anyone can’t prove it’s true or false”.
You are not making sense, period. I could have broken down your senseless mumblings point by point, but why bother. Not that the house prices will drop any faster or slower anyways.
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September 12th, 2012 at 4:05 pm 111
@Vote Down The Facts:
“If homeownership is such a drag, why are most of you so desperate to climb aboard?”
Aren’t the people who are most desperate to buy a house (or anything else) those who are willing to pay any price?
Isn’t the person who is willing to pay the lowest price the least desperate?
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September 12th, 2012 at 4:20 pm 112
I am finally moving out of my essentially rent controlled, family owned, properly managed rental after many years. Needless to say, it has been a great run.
I am moving to Vancouver Island and I am concerned about renting a place that is also for sale, particularly since Vancouver Island is in the midst of their bubble bursting.
Does anyone know of a way of verifying whether the rented place is also for sale? I have all the addresses of the homes for rent, but need to know how to make sure they are not for sale.
I am not going to subsidize someone’s home while they try to sell it.
Any help would be most appreciated!
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September 12th, 2012 at 4:28 pm 113
@Island Bound:
Usually just googling the address will bring up MLS listings.
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September 12th, 2012 at 4:33 pm 114
Guys! The bulls are going crazy with their trolling! That must be a sign the market is going to crash. I don’t think anyone has made such an observation in the 6 years this blog has been up. Sept 12/2012 is the day before the market crashed. Mark it down!
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September 12th, 2012 at 4:44 pm 115
Why such a hard-on for Tsur, bears? Someone has to be the Lawrence Yun of Vancouver. Why not him?
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September 12th, 2012 at 4:46 pm 116
@Island Bound: Use the information to both i) get yourself a better deal, and ii) determine how honest your potential new landlord(s) is(are).
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September 12th, 2012 at 4:55 pm 117
@patriotz: “Isn’t the person who is willing to pay the lowest price the least desperate?”
No, but nice try.
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September 12th, 2012 at 5:20 pm 118
@Vote Down The Facts: “If homeownership is such a drag, why are most of you so desperate to climb aboard?”
Read much? Too funny.
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September 12th, 2012 at 5:38 pm 119
@Best place on meth:
Here’s how much Tsur made in 2010/11. probably more this year. Wonder if they will roll his salary back if he is wrong and people believe the ‘no bubble’ speak and lose money.
That’s right he has tenure. Never to be removed.
ame Somerville Tsur
Title Assoc Professor (tenure), The Sauder School of Business
Agency University of B.C.
Sector Universities and Colleges
Remuneration $243,810
Expenses $8,670
Year 2010/11 Fiscal Year
Notes
You can search remuneration for this individual for other years through the Advanced Search page.
Where this individual ranks…
137 out of 3679 people at University of B.C.
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September 12th, 2012 at 5:46 pm 120
78 jesse Says: “You are quoting a quote from McBride. My analysis is based on his definition, and by his definition we are in a “bubble”.”
How does that relate to erroneously differentiating between loose mortgage policies and speculation?
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September 12th, 2012 at 5:52 pm 121
Freako, BDK and AlexCanuck packed it in 2009. Bubble theory was dead they knew it nutslaps.
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September 12th, 2012 at 5:54 pm 122
Love seeing such a large # of foreclosed comments. So many imbeciles whose hopes & fantasies getting crushed by reality.
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September 12th, 2012 at 5:58 pm 123
@Anonymous: “Name Somerville Tsur
Title Assoc Professor (tenure), The Sauder School of Business
Agency University of B.C.
Sector Universities and Colleges
Remuneration $243,810″
So can he afford to buy a SFH on the westside? Maybe yes if he did so many years ago. Definitely not now.
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September 12th, 2012 at 5:59 pm 124
@crashcow: Sort of like being bear in 2004! ha ha
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September 12th, 2012 at 6:00 pm 125
some how I doubt that’s Tsur’s only income, if he runs the real estate courses those are probably independent of UBC
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September 12th, 2012 at 6:21 pm 126
@jesse: “Speculation is key”
The part you and Sewer miss is pretty much everyone who is buying real estate is speculating. They are speculating the price will rise making their purchase make financial sense. You don’t need to buy a presale in order to speculate on real estate.
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September 12th, 2012 at 6:34 pm 127
New Listings 294
Price Changes 141
Sold Listings 80
TI:18838
http://www.paulboenisch.com
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September 12th, 2012 at 6:51 pm 128
Looks good for a 19K party on Friday. I think we can expect continued inventory growth through end of month, but it will slow in October. Good shot at 20K this month, but not much higher than that in October.
What the hell was Chipman talking about with that ‘inventory has peaked’ stuff from last week?
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September 12th, 2012 at 6:53 pm 129
@paulb: Being the conspiracy theorist that I am…I’m thinking the board purposely held back sales last Friday (50), so they could break the double digit streak on Monday…
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September 12th, 2012 at 7:10 pm 130
Foreclosure isn’t even necessary.. the subject itself takes care of the obvious.. NO bubble!!!
bahahahahah
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September 12th, 2012 at 7:17 pm 131
@paulb: HOLY SH!T
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September 12th, 2012 at 7:20 pm 132
New Listings 370
Back On Market Listings 20
Price Changes 164
Sold Listings 121
ALL LOWER MAINLAND
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September 12th, 2012 at 7:23 pm 133
Everyone downtown keeps telling me prices are firm.
Is this true?
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September 12th, 2012 at 7:46 pm 134
Aargh, damn that one day of over 100 sales…
Wtf, Craigslist used to be such a great venue for buying and selling
“Hello Seller,
I will like to
buy this item so withdraw the advert from Craigslist. I will
be paying via PayPal.
I am away on a business trip and I’m new on
Craigslist so i don’t want to buy what isn’t good.You should
get back to me with the total price you want to offer it including
shipping cost to my child in China.All I needed from you now is the
total price, including shipping cost to china with your PayPal
account so that I can transfer the fund immediately.
I am very serious about buying it.I can assure you of getting
your money asap.
I hope to read from you soon.”
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September 12th, 2012 at 7:50 pm 135
@Vancouver: “Everyone downtown keeps telling me prices are firm. Is this true?”
It is true for places that are not selling. The ones that are selling are going for about 20% lower than those with the firm prices.
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September 12th, 2012 at 7:50 pm 136
@Anonymous: jesse, Tsur, and Calculated Risk. Maybe you need to type a post what Calculated Risk, one of the most respected economics bloggers in the US, “missed”. There’s a submission form you can fill out.
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September 12th, 2012 at 7:51 pm 137
Speaking of Craigslist ..
http://www.vancouverobserver.com/blogs/realestate/vancouvers-west-side-real-estate-not-time-sell-yet
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September 12th, 2012 at 8:45 pm 138
@best place on meth
Of course, old folks are doing well. Closer to the baby bppmer generation. But these are not the faculty with little kids. If you work in, let’s say, geography, make between $80,000 and $110,000 and your wife is at home because it is less expansive than daycare, then there is no way you can afford a house on the west side with “a wine cellar,” as Scuba mentioned in his post. I am not saying they are needy people, just saying there are middle class and not making a lot more than some policemen/nurses. The vast majority has been priced out if the West side for a long time. So, yes, apart from Communist Party officials who make $500 a month, no one can afford West side prices
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September 12th, 2012 at 9:02 pm 139
Tsur the mole.
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September 12th, 2012 at 9:09 pm 140
Some of us even read the housing blogs (and have since VHB’s). “Professor” is a diverse group to generalize about. Many (like me) aren’t paid at all by the university for our time. And, for the record, I rent.
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September 12th, 2012 at 9:31 pm 141
@ScubaSteve,
“PhD’s are the same way. A lot of people don’t know, but Ph.D’s live there ENTIRE CAREERS with three goals:
1) Get published. No matter the cost.
2) Get grants/funding. No matter the cost.
3) Get tenure. No matter the cost.”
I have a PhD (Microbiology) I know a lot of people with PhDs. You don’t know sh*t about people with PhDs.
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September 12th, 2012 at 9:41 pm 142
“Statistics Canada is being urged to change the way it calculates housing costs in its inflation reports, with critics saying its current method could be fuelling a housing bubble.
In a report released Wednesday, the C.D. Howe Institute, one of Canada’s leading policy think-tanks, argues that house prices have risen far faster than has been captured by Statistics Canada in the past few Years.”
http://www.vancouversun.com/business/all/StatsCan+urged+change+inflation+measurement+capture+true/7233338/story.html
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September 12th, 2012 at 10:25 pm 143
@Dan in Calgary:
Looks like I struck a nerve. Face the facts Dan, that’s the goal of most PhD students. Are you suggesting PhD’s don’t try and get published? Don’t want tenure? Don’t want grants/funding?
Let me put it real simple for your microbiology ass. If you don’t get those 3 things you’ll be collecting food stamps and be just another PhD driving a yellow cab in downtown Toronto.
Once your acne clears up and you finally get a job doing research (doing whatever microbiologists do), you’ll be expected to get your research published in JOURNALS. And the universities RANK journals. If you get your research published in a top tier journal, that’s the fastest way to tenure. You know all those, don’t pretend it isn’t true.
You better go now, someone just called a cab at Finch and Jane. Look for the group of three drunk guys with no shirts on. When they puke in your taxi on the way home your microbiology degree might come in handy to determine what that orange crap is all over your cab and how you can clean it up (bleach is your friend).
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September 12th, 2012 at 10:28 pm 144
You heard it here folks. 20% off list price for the properties that are selling. Please use this blog for the authority on the market.
46 idiots agree and counting
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September 12th, 2012 at 10:30 pm 145
Sewer is a complete waste of skin, but I’m more mad at the media types who lazily continue to interview the same, ignorant, conflicted ass clowns.
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September 12th, 2012 at 10:56 pm 146
ScubaSteve, you seem to be becoming more and more of a douch with every post.
What’s your deal you cunty little fuck?
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September 12th, 2012 at 11:11 pm 147
relax Dan… you might blow a brain cell
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September 12th, 2012 at 11:11 pm 148
@Anonymous:
$243K is a lot of money for Tsur. He is an Associate Professor. Anyone think Sauder may be over-paying their faculty a tiny bit?
I am sure there are extra fees for interviews, consulting etc
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September 12th, 2012 at 11:14 pm 149
@ScubaSteve: You are so incredibly ignorant. I know hundreds of PhDs and only a few fit your stereotype.
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September 12th, 2012 at 11:26 pm 150
@Anonymous: “@Vancouver: “Everyone downtown keeps telling me prices are firm. Is this true?”
It is true for places that are not selling. The ones that are selling are going for about 20% lower than those with the firm prices.”
That is what is happening in our building. There are units that have been for sale for most of the year and have not sold because they have held firm on their price. The ones that have sold are down about 15% from a year or two ago.
I just can’t get over the inventory numbers. I think Ben pointed this out in one of his articles in that we are comparing the numbers now to 2008 winter, forgetting what was happening then.
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September 12th, 2012 at 11:29 pm 151
@ScubaSteve: “You better go now, someone just called a cab at Finch and Jane.”
LOL!
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September 12th, 2012 at 11:35 pm 152
@Vancouver: “You heard it here folks. 20% off list price for the properties that are selling. Please use this blog for the authority on the market.”
No, not 20% off list price. 20% off the price on those “firm” priced places you were talking about. You must be a graduate of Tsur’s program.
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September 13th, 2012 at 12:19 am 153
Anonymous – you are an idiot. What are you talking about?
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September 13th, 2012 at 3:34 am 154
Rough estimate of Sept MOI (using estimated month-end official inventory/sales #s)
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September 13th, 2012 at 6:22 am 155
VHB, how much money has your “personal” decision to buy a house made for you? Aren’t you glad you bought a place?
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September 13th, 2012 at 6:23 am 156
Do Jew guys think turd will be a laughing stock?
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September 13th, 2012 at 7:33 am 157
Sales and MOI from around the country. Anyone have a source for inventory in Ottawa or K-W? My Google-Fu isn’t working for it. Even Calgary which is rolling in sales relative to last year is on the warning track for MOI.
Vancouver -31% 10.7 MOI
Quebec -26% 12 MOI
Victoria -17% 10.9 MOI
Ottawa -14% (Total inventory not provided)
Hamilton-Burlington -13% 3.2 MOI
Edmonton -11% 5.2 MOI
Montreal -7% 10.8 MOI
Kitchener-Waterloo -4% (Total inventory not provided)
Calgary 16% 6.3 MOI
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September 13th, 2012 at 8:42 am 158
@Anonymous:
The should cut Tsur’s salary to $60,000. If he doesn’t like it, he can move to Prince George and teach at UNBC. lets test him to see how much he loves the BPOE.
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September 13th, 2012 at 9:22 am 159
Vancouver Real Estate: Pillar of Sand and Fog
For starters, Rennie suggests that if we “fence off” the west side and Richmond areas that have “nothing to do with the local market” and disregard the top 20 per cent of the condo market, the Metro Vancouver picture starts to look a lot more affordable.
According to Rennie, the reason our market is stable is that aging baby boomers sit atop a mountain of equity which has increased in value by some $22 billion in six years. These house-rich boomers will start to sell their existing properties, move into condos and help their kids buy homes.
“That’s going to be a lot of money moving around the region,” Rennie said, “and that shows me a lot of buyer support.”
Did you notice what just happened there? Suddenly the top end of the market, which supposedly has “nothing to do with the local market” is now a pillar supporting the rest of the real estate value chain.
http://www.huffingtonpost.ca/sandy-garossino/bob-rennie-vancouver-housing-condo_b_1875828.html
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September 13th, 2012 at 9:24 am 160
New inventory graph up at: http://vancouverpeak.com/groups/inventory-graph/forum/topic/inventory-graph/?topic_page=3&num=15#post-2574
Inventory is still below 2008 but higher than other years. Current inventory is climbing at one of the steepest angles we have seen all year. If the trend we have seen in the last 7 days were to continue we would see 19,000 in two days and 20,000 by the beginning of October.
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September 13th, 2012 at 10:00 am 161
@Trader Joe: #158,
it’s upsetting that he is right, isnt it!
well, he is working in the school of business for a good reason, while the rest of the armchair economists hang around here.
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September 13th, 2012 at 10:04 am 162
@Anonymous:
Those who can do. Those who can’t teach.
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September 13th, 2012 at 10:11 am 163
@VMD:
So this is shaping up to be a WORSE year than 2008!!!
That’s crazy. It’s absolutely mind-boggling that we are seeing such a drop off in sales/prices during what is supposed to be a ‘good’ time economically.
Perhaps things aren’t good after all, they’re ‘Tsur-good’.
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September 13th, 2012 at 10:30 am 164
looks like there is going to be a big rush to the exists very soon! can’t wait to see the sorry slobs and crying lindas on GlobalTV. that includes you VHB. enjoy your negative equity, sucker.
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September 13th, 2012 at 10:35 am 165
@Bally: Well I’m not sure we’re seeing both a drop off in sales and prices. Sales, absolutely, but I’m not sure about the pricing data.
I actually find it mind boggling that with month after month of terrible sales, new listings continue to ask for crazy prices.
Honestly, every time I look at the new listings I laugh out loud several times.
Who is advising these people? I guess it takes a long time to realize your East Van house isn’t really worth $1.4 million or your 1150 square foot “penthouse” in Yaletown will never get $1.35 million or that no one is going pay $1.5 million to live in an average house in sleepy North Van.
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September 13th, 2012 at 10:38 am 166
I’m glad VHB@Anonymous: I’m also glad that VHB is going to get burned. First, he steers thousands of people wrong with his naive and undecated opinions. Then, he goes and buys a place, while continuing to advise people to do the opposite.
VHB’s negative equity is pure justice.
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September 13th, 2012 at 10:58 am 167
He’s wrong when he told people to not buy a place. He was wrong for years. Then he bought a place exactly when he shouldn’t have. He was wrong again, and he will continue to be wrong. He’ll probably sell his place at the bottom of the market and move to another city, lol. VHB, always wrong and always talking out of both sides of his mouth.
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September 13th, 2012 at 11:04 am 168
The schemes and scams in the Peoples Republic of Ponzi are collapsing.
http://www.bloomberg.com/news/2012-09-12/shadow-bankers-vanishing-leave-china-victims-seeing-scams.html
You can’t trust anyone in that thoroughly corrupt shithole.
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September 13th, 2012 at 11:18 am 169
@anonynous
I went to an open house and the Realtor told me how hard it was to convince the seller that the house was not worth 1.6 million any more. The seller threatened the agent to get another agent if they did not agree on this asking price. So the realtor was basically wasting his day doing an open house, just to prove the seller that the market has turned.
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September 13th, 2012 at 11:24 am 170
@Anonymous:
Real Estate Religion and Vancouver Real Estate Church is the most rigid and the most powerful one. It will take time for believers to come to sense. People fight, die, blow themselfs with explosive, stay stupid, etc. for a relegion sake. Similar goes here but fortunately with less demage and limited casulties.
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September 13th, 2012 at 11:24 am 171
@Painted turtle: “I went to an open house …”
Are you looking to buy, or is this just some sort of obsessive compulsion?
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September 13th, 2012 at 11:31 am 172
Here is a first person account of what is going on in China:
http://www.prospectmagazine.co.uk/politics/mark-kitto-youll-never-be-chinese-leaving-china/
“Once you’ve purchased the necessary baubles, you’ll want to invest the rest somewhere safe, preferably with a decent return—all the more important because one day you will have to pay your own medical bills and pension, besides overseas school and college fees. But there is nowhere to put it except into property or under the mattress. The stock markets are rigged, the banks operate in a way that is non-commercial, and the yuan is still strictly non-convertible. While the privileged, powerful and well-connected transfer their wealth overseas via legally questionable channels, the remainder can only buy yet more apartments or thicker mattresses. The result is the biggest property bubble in history, which when it pops will sound like a thousand firework accidents.
In brief, Chinese property prices have rocketed; owning a home has become unaffordable for the young urban workers; and vast residential developments continue to be built across the country whose units are primarily sold as investments, not homes. If you own a property you are more than likely to own at least three. Many of our friends do. If you don’t own a property, you are stuck.
When the bubble pops, or in the remote chance that it deflates gradually, the wealth the Party gave the people will deflate too. The promise will have been broken. And there’ll still be the medical bills, pensions and school fees. The people will want their money back, or a say in their future, which amounts to a political voice. If they are denied, they will cease to be harmonious.”
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September 13th, 2012 at 11:40 am 173
@VHB:
“Once you’ve purchased the necessary baubles, you’ll want to invest the rest somewhere safe, preferably with a decent return—all the more important because one day you will have to pay your own medical bills and pension, besides overseas school and college fees. But there is nowhere to put it except into property or under the mattress.”
I chose property. I hope I don’t live to regret my choice! It’s not my fault, my significant other made me do it guys! She carries my balls in her purse! You would have done the same! PLEASE STILL LOVE ME!
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September 13th, 2012 at 11:43 am 174
Adding a bit to what Painted turtle Said…
I have a cousin that is a Realtor, and no he is not a slim ball. He well aware that the market had lost touch with reality a couple of years ago, and is up front with his clients. He sold all of his properties a couple years ago and now rents.. maybe he was a little early but hey hind sight is 20/20.
He works with buyers and sellers. Right now he is advising buyers to avoid purchasing if they can, of course some still see the need to purchase since “renting is throwing away your money” (sic)
He enjoying the slower pace right now and still does work with some sellers that price for the market but he turns down listing fairly regularly now. If the person does not want to price to sell now, he recommends they find another realtor. He believes the prices are on the way down and does not want to chase the price down.
Price for the market or be priced out of the market forever.
Cheers
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September 13th, 2012 at 12:03 pm 175
@Best place on meth: from your article http://www.bloomberg.com/news/2012-09-12/shadow-bankers-vanishing-leave-china-victims-seeing-scams.html, I found this tidbit interesting:
So from my calculations, that’s a price drop of about 85% per square foot. Ouch. Is “Erdos” a different spelling of the “Ordos” city that has had many articles about the ghost city they’re building?
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September 13th, 2012 at 12:05 pm 176
@Anonymous: “Who is advising these people? ”
Professionals, supported by two-week academic credentials!
Makes you wonder who’s the bigger moron: the ‘Professional’ or the suckers they deal with.
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September 13th, 2012 at 12:15 pm 177
@Anonymous: It took 12 -18 months for a general awareness of price declines in Australia. I don’t see any reason for Canada to be any different.
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September 13th, 2012 at 12:19 pm 178
Those who wonder why prices are still insane in many areas despite rising inventory, a seemingly huge shift in public perception, and the reality of a popping bubble, just have to look south to see how this plays out.
This is a rather extreme example, but I remember this one hunk of land in Lake Havasu City, AZ. I remember it because I’d bought and flipped a few properties in the area during the crazed runup of the early 2000s, and at one point was thinking about this one. Anyway, it changed hands in 2005 for $114,000. It was put up for sale three years later, even while the bubble was exploding all around (and especially in Arizona), for approx the same price. Now, *that’s* sticky.
End result: I was down there last winter and happened to drive by this particular property. There was a For Sale sign on it once again. Except *this* time is was priced at $15,000. One-seventh of its previous sale price.
As I said, this is a seriously extreme example, and certainly the differences between Havasu and the Bestest Best Place on Earth are obvious. Still, my point is that we’re just in the opening act of the crash. Many more acts are to follow. Look at the Okanagan – they’re already well into Act 2 or 3, and prices up there are now way off the peak. But it took awhile, as it will here.
IMO, this winter will deliver not only eight straight months of rain, but also a hard dose of pricing reality to homeowners who somehow still believe their shacks and 700-sq-ft boxes are somehow tickets to an early retirement.
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September 13th, 2012 at 12:19 pm 179
@b5baxter: 2011 continues to be the model for 2012, looks like. That would peak the year out at (eyeballing here) 19800 or so…
Without an existencial crisis, seasonality will continue to rule.
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September 13th, 2012 at 12:26 pm 180
Larry commenting on the state of the market:
Thos damn bear bloggers…
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September 13th, 2012 at 12:32 pm 181
@Makaya: Larry says “It is fair to say that human behavior is at times shaped by invisible forces which lead us to behave in ways that may not be in our best interest”
How trite, but no more trite than stating prices are too high, I suppose. Sounds like witchdoctor talk to me.
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September 13th, 2012 at 12:50 pm 182
@J: “I have a cousin that is a Realtor, and no he is not a slim ball …”
So, … is he a fat ball?
[sorry, I couldn't help myself]
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September 13th, 2012 at 12:58 pm 183
Looks like rates will remain very low for at least 3 more years. Doh! you bears jinxed yourselfs AGAIN
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September 13th, 2012 at 1:04 pm 184
So the Nordstrom thing is official now. Looks like they’re not opening until 2015, so they must be planning a pretty significant renovation of space Sears is currently occupying.
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September 13th, 2012 at 1:08 pm 185
@Conrad:
Are you saying we can wait for the price to continue to drop over the next few years, while still enjoy today’s rates when we vulch?
Sweet.
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September 13th, 2012 at 1:10 pm 186
@Conrad: Look what the housing bubble did to Japan, 20 years of low interest rate. US is following closly. Look out Canada, your bubble is popping next.
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September 13th, 2012 at 1:20 pm 187
@Conrad: “Looks like rates will remain very low for at least 3 more years. Doh! you bears jinxed yourselfs AGAIN”
So you’re telling us not to expect anything to change with Van RE?? Oh well, I guess we’ll have to be satisfied with historically low sales, high inventory and 15% annual price declines.
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September 13th, 2012 at 1:20 pm 188
@Conrad: “Looks like rates will remain very low for at least 3 more years”
This does not necessarily translate to house price strength. The problem comes when equity ratios weaken.
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September 13th, 2012 at 1:30 pm 189
Economist Justin Wolfers on “da stream”: “What does QE3 mean for you? Now’s the time to buy a house. If you’ve got one, then refinance. Now.”
(He’s referring to the US)
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September 13th, 2012 at 2:19 pm 190
Ha-Ha – Slime not Slim of course… I don’t write good some time
Back to school for me… maybe I can get a spot at the Center For Kids Who Can’t Read Good
Lol
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September 13th, 2012 at 2:55 pm 191
@jesse: Actually, there are already bidding wars in Seattle, San Francisco and Southern California.
Seattle for example. In King County, there is only 3000 listings, way down from 10k 2 years ago. How can’t you not have bidding with such a low inventory?
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September 13th, 2012 at 3:00 pm 192
Rates remaining low is great news! Are there any markets out there whose housing bubble collapsed and rates went up? It seems like the bubble pops and rates go down ala Japan and US. So anyone who held off buying gets the triple bonus of lower prices, lower rates and more savings. Amazing.
By the way, the average Canadian house price is now 95% higher than in the US despite having more land and a much smaller population.
What could go wrong?
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September 13th, 2012 at 3:05 pm 193
@gordholio: Totally agree. Sellers have to go through one more, things-will-be-back-to-normal spring market. I follow some nicer 2-beds on the market. They’ve been at the same price for over two years. YEARS! And just now the sellers are deciding to knock off 3-5%.
One that I’ve observed from afar is a court-ordered sale for the past 6 months. They went down from 678K to 624,900. That was over a month ago. The guy upstairs, same unit, is at 718K. Denial is a strange thing. Another interesting one is in a building where a large chunk of units are still owned by Rennie himself. All the units that come up are consistently over market value. And go through minor and major reductions. This has been the case for years.
One 2-bed unit in this building has been at 628K for 1 1/2 years. Just now it’s down at 598K (good luck with that). Then there are two identical PH units. One came on at almost 900K and the other 850ish. The 850-ish one obviously had a realistic seller and they dropped prices quickly down to the 750 mark where the same unit sold four years before–or at the bottom of the trough in 2008. That didn’t do it and they dropped down to 725K. Now it’s either sold or off market. I see no reference online to any sales so, I think they dropped out and are going to hold out for… you guessed it… the things-will-be-back-to-normal spring market.
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September 13th, 2012 at 3:14 pm 194
@Makaya: Larry is such a realtor. A little food for the bears. A little food for the bulls. Whatever it takes to bring in new clients.
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September 13th, 2012 at 3:34 pm 195
@Makaya:
Larry’s speaking in tongues now as well.
Hey real estate people, it’s really simple – prices got too high and you ran out of buyers. Mortgage tightening killed off any chance of a rebound.
Deal with it.
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September 13th, 2012 at 3:36 pm 196
Is the Nordstrom opening at Sears?
I see “Now Hiring” signs on the sears doors. Could someone else be moving in there?
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September 13th, 2012 at 3:42 pm 197
I do find it slightly strange when sellers lower prices by 3-5%. It’s an asking price, and so I’ve never felt the slightest hesitation about offering less than the asking price by that amount. I don’t tend to think that offering a serious low ball bid to a homeowner is likely to work (maybe to a financial institution). I view asking prices as ballpark estimates of the value of the house to the seller. 10% or more seems like a meaningful decrease in an asking price.
As for Larry, and the opinions of the coffee talk great minds — they specialize in selling houses not estimating or understanding demand. I’ve often been amazed when I talk to realtors at how little they understand about mortgage credit markets. Since they tend to know very little about credit factors, they are left with behavioural shifts in demand. It’s pretty much the only reasonable explanation given the observed data on stable employment and incomes.
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September 13th, 2012 at 3:51 pm 198
Experts predict Vancouver condo crisis will hit Calgary… leaky condos that is … misleading title by CBC
http://www.cbc.ca/m/rich/canada/calgary/story/2012/09/13/calgary-condos-thursday.html
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September 13th, 2012 at 3:53 pm 199
So Bernanke announced QE3, and in the same way that the Fed could never unwind its balance sheet, it appears highly unlikely that they can ever decrease the flow of money used to fund asset purchases. We are moving farther and farther away from a market economy, and I don’t think we’re going back to one, at least not with these currencies.
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September 13th, 2012 at 4:06 pm 200
Girlfriend’s stepdad sold exactly at the peak, and is renting from the new owner. (!)
He is now looking at places in xxx, a smaller town where prices are half and he can own some acreage.
Of 7 they viewed, 4 were foreclosures.
Here’s the interesting part: He stated that the 4 were in foreclosure because the loans had been “called” by banks, *not* due to default on payments. The properties were underwater, and that was enough to cause the banks to call in the loans and thus trigger foreclosure.
He had to visit a courthouse to make an offer, with a judge presiding in an effort to “get the most value” for the bank.
How often does that happen? Did this perhaps take place because the properties in question (acreages) were not principal residences?
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September 13th, 2012 at 4:13 pm 201
@Burnabonian:
“Here’s the interesting part: He stated that the 4 were in foreclosure because the loans had been “called” by banks, *not* due to default on payments. The properties were underwater, and that was enough to cause the banks to call in the loans and thus trigger foreclosure. ”
Fascinating. Is this the OSFI rules starting to bite at the banks? OSFI has demanded they tighten up on things like the loan-to-value measures. Underwater places score pretty poorly on loan-to-value!
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September 13th, 2012 at 4:17 pm 202
Just to be clear about the foreclosure sale — this is in Canada or a recourse US state I presume. In which case the judge is there to get the most value for the former owner since they are liable for the remainder owing to the bank. The bank’s incentive is a bit different and depends on the financial health of the owner. They are looking at the foreclosed house as a present-value payment and a risky bond serviced by the former owner. Without recourse, the bank is perfectly able to judge itself what prices to accept.
How judges decide on acceptable prices in the coming few years will likely be very interesting.
As for how prevalent foreclosure is, the current rates are pretty low in Canada I believe. The mortgage-in-arrears rates are around 0.4% in BC. See
http://www.cba.ca/contents/files/statistics/stat_mortgage_db050_en.pdf
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September 13th, 2012 at 4:28 pm 203
Here is the PDF of the new B-20 OSFI guidelines.
http://www.osfi-bsif.gc.ca/app/DocRepository/1/eng/guidelines/sound/guidelines/b20_e.pdf
See page 9:
“The LTV ratio should be re-calculated upon any refinancing, and whenever deemed prudent,given changes to a borrower’s risk profile or delinquency status, using an appropriate valuation/appraisal methodology.”
Also, banks had to demonstrate they had a business strategy to set their limits for things like LTV.
“FRFIs should adhere to an appropriate maximum LTV ratio (for various types of mortgage transactions). The maximum LTV ratio may be determined by law or based on current and expected market conditions, as well as other risk factors that may impact borrowers’ ability to
service their debt and/or lenders’ ability and cost to realize on their security. Section III of this Guideline outlines public disclosure requirements for LTV ratios.”
So, after this OSFI thing came down, I suspect banks sat down and wrote out a more prudent set of lending guidelines that wouldn’t get them slapped down by OSFI. LTV is a big part of those guidelines–OSFI really focused on it. Maybe the plan for Burnabonian’s friend’s bank lays out that mortgages for LTV’s outside some tolerance threshold have to be ‘called’.
Just speculating about how this works, but those OSFI rules (not to mention the CMHC ones!) are really starting to bite out there, I think.
When we hit 19K (and 20K soon enough!) my glass will be raised in honour of OSFI B-20!! I love B-20 so much I think I’ll get a tatoo…
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September 13th, 2012 at 5:20 pm 204
New Listings 287
Price Changes 116
Sold Listings 91
TI:18931
http://www.paulboenisch.com
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September 13th, 2012 at 5:23 pm 205
@paulb: Looks like 19K party tomorrow!
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September 13th, 2012 at 5:26 pm 206
@T: “I see “Now Hiring” signs on the sears doors. Could someone else be moving in there?”
Maybe they’re looking for temp staff to get them through their final days of sales. Any of their existing staff with common sense would have secured new jobs for themselves elsewhere already.
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September 13th, 2012 at 5:28 pm 207
Just barely behind the 2008 pace now (1585 sales in 2008).
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September 13th, 2012 at 5:34 pm 208
@VHB:
The banks are calling the loans because acreages are the most volatile of properties, since swings in RE prices are mostly in the land and there’s no rental value to speak of. They want to get out while they can still get something.
I assume the loans are uninsured – I’m quite sure that at 80% LTV on a circa 2008 purchase, pretty much any Interior acreage would now be underwater. Banks don’t care if insured mortgages are underwater. The OSFI changes first floated would have required the banks to call even insured loans, but Flaherty quashed that. You don’t want to go down in history as the guy who forced mortgage-paying homeowners onto the street.
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September 13th, 2012 at 5:45 pm 209
@shriller:
You can see that the market peaked in Alberta in mid-2007 just by looking at the foreclosure stats. The forclosure rate hits bottom at the price peak – as it does in every market.
BC is more complicated as metro Vancouver saw a bottom and rebound in early 2009 while the rest of the province has been declining since 2008, except Victoria since 2010. But the rate is now over 3 times what it was in mid-2007, almost all foreclosures being outside metro Vancouver for now.
These numbers speak the loudest possible rebuttal to those who say that a low foreclosure rate means a price decline is unlikely.
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September 13th, 2012 at 6:45 pm 210
@shriller: “How judges decide on acceptable prices in the coming few years will likely be very interesting.”
My understanding is once it goes to court with an offer the highest bidder gets it.
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September 13th, 2012 at 6:47 pm 211
@Burnabonian: “He is now looking at places in xxx, a smaller town where prices are half and he can own some acreage.”
Why is the town (xxx) a secret? There is not much credibility to your story if you can’t tell us where you are talking about.
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September 13th, 2012 at 6:59 pm 212
New Listings 376
Back On Market Listings 8
Price Changes 158
Sold Listings 131
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September 13th, 2012 at 7:02 pm 213
@VHB: “Is this the OSFI rules starting to bite at the banks?”
From what I’ve heard there was some initial uptake at the beginning of the year with respect to “stated income”, now the brunt of OSFI’s guidelines are going to be implemented from about August of this year through to the spring of 2013. It will be a staged rollout and each bank has its own schedule.
My gut feel is we won’t have seen all of the effects until mid-2013.
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September 13th, 2012 at 7:51 pm 214
I’m amazed by Yatters writing style. He makes all sorts of declarative statements and asks many seemingly rhetorical questions, but I have no idea what he is saying. It can’t be easy to always strike that balance just right.
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September 13th, 2012 at 8:21 pm 215
What does the blog think the effect of qe3 will be?
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September 13th, 2012 at 8:43 pm 216
#215 @GNFINGR: “What does the blog think the effect of qe3 will be?”
For the middle class: a net loss of income and savings. For financial speculators: party on!
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September 13th, 2012 at 8:45 pm 217
@Anonymous
@Burnabonian: “He is now looking at places in xxx, a smaller town where prices are half and he can own some acreage.”
Why is the town (xxx) a secret? There is not much credibility to your story if you can’t tell us where you are talking about.:
The only city in Canada that has 3 letters xxx is Ayr, ON.
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September 13th, 2012 at 8:45 pm 218
http://life.nationalpost.com/2012/09/12/dont-wait-too-long-to-get-into-gta-condo-market/
Says the mortgage company…
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September 13th, 2012 at 9:06 pm 219
@Anonymous: That’s a hell of a name your parents saddled you with.
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September 13th, 2012 at 9:17 pm 220
@GNFINGR: The DOW and precious metals up, US Real estate up, Canadian miners and oil & gas up, CAD up vs USD (that would further depress Canadian manufacturing. Watch out Ontario!), longer lines at costco Bellingham.
I think there is a bag of money to be made for the savvy investor:
-get long US stocks and precious metals
-get long Canadian miners and oil and gas
-get long US real estate (Canadian real estate will be further depressed as all the money will move into the aforementioned asset classes)
-plan for shopping trips south of the border
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September 13th, 2012 at 10:28 pm 221
huge sales day again!
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September 13th, 2012 at 10:31 pm 222
@220 @ 216I hope you are right and it doesn’t slither into cdn real estate!
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September 13th, 2012 at 10:37 pm 223
@Anonymous: “Why is the town (xxx) a secret? There is not much credibility to your story if you can’t tell us where you are talking about.”
Complete fabrication. Just as I suspected. Don’t people have better things to do.
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September 13th, 2012 at 11:22 pm 224
@AfroFrancophone: How does money “move into” an asset? It’s not like the money disappears. Kinda an important detail.
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September 13th, 2012 at 11:31 pm 225
@Mort: I said as much right on his blog. vangrl jumped all over me. I think he exited highschool around grade 9 and took the 2 week realtor course and has been one ever since. Absolutely horrible writer. No idea how great of a realtor he is. Probably not bad since he’s been one since grade 9.
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September 13th, 2012 at 11:38 pm 226
B.C. government freezes hiring, management salaries as natural gas revenue falls
- the new BC finance minister got to work pretty fast..
VICTORIA — The B.C. government will immediately launch a new round of major cuts because of a three-year, $1.1-billion hit to provincial revenues caused by plummeting natural gas prices, Finance Minister Mike de Jong announced Thursday.
Speaking to reporters, de Jong promised an immediate hiring freeze across government and a wage freeze for public sector managers, including those at schools, universities and health organizations. He also signalled a possible ratcheting-up of the already tense negotiations between the province and its public sector unions.
“Call these austerity measures — they are designed to immediately curtail spending in areas where government has some discretion,”
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September 14th, 2012 at 12:45 am 227
beginning of month inventory rise that’s all kids!
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September 14th, 2012 at 9:37 am 228
@ Anonymous 210.
Of course the judge will take the highest price on offer. But since offers don’t arrive simultaneously, the real question is how long will a judge deliberate? Suppose you low ball by 50% and are the only offer. This is private information and no third-party is supposed to see your offer. What should a judge do? Accept your offer? Or wait for a higher offer to potentially arrive? Hold a auction?
I ask, because about 10 years ago a colleague of mine, whose spouse worked in a Bank, told me that his spouse received an email every Friday of properties foreclosed by the bank. The employees were given first dibs on submitting offers which then went to court. As long as they didn’t low ball too much below the assessed or appraised value the offers were accepted. A number of the Bank’s employees became landlords.
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September 15th, 2012 at 12:36 am 229
@shriller: story from the moon again.
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October 1st, 2012 at 6:33 am 230
Nice article! Great post about Can’t burst a bubble that isn’t there! “Can’t burst a bubble that isn’t there” – interesting title Scott. I appreciate you sharing this with the rest of us Scott.
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