Friday Free-for-all!

It’s that time of the week again, lets do our regular end of the week news roundup and open topic discussion thread for the weekend!

Here are a few links to kick off the chat:

Doors shutting on first time buyers
How many realtors is enough?
Vancouver RE plunges
Families leave BC
Housing affordability?
Moodys warn on Canadian debt
Sales/list Sept 2010-2011
Great new source for data
Toronto sales drop 12.5%
Kleptocrats flee china

So what are you seeing out there? Post your news links, thoughts and anecdotes here and have an excellent weekend!

Sort by:   newest | oldest | most voted
Vancouver
Member
4 years 2 months ago

Where am I… Is this real life..? ok now… I have two fingers..no..four fingers… I can’t see anything… arRHHH!! I feel funny… had I been trolling this forum?
last thing I remembered? why I was having a cool-aid drink that the awfully nice realtor made for me.. Wait a minute…

sorry jesse, I always knew you were right. It’s just that I have this inferiority complex condition.. I get this uncontrollable urge to cynically, forcefully disagree with all the facts.. so that people will stop and pay attention to me… for once…

ScubaSteve
Member
ScubaSteve
4 years 2 months ago

Updated September sales graph. Comparing this month’s sales/listings to 2011 and 2010.

http://i50.tinypic.com/2j5yrg4.gif

bubbly
Member
bubbly
4 years 2 months ago

How many realtors is enough?

This is how it looked south of the border: http://ow.ly/dx5nP

The REALTOR® bubble has popped there, it will pop here too.

bubbly
Member
bubbly
4 years 2 months ago
Re: “Kleptocrats Are Fleeing China” More than a million public servants have sent large sums abroad. Stealing like this is the norm in post-communist countries. Most often, politically connected “experts” are nominated into top management positions in state owned enterprises where they keep signing business “deals” with phantom entities until the companies are completely hollowed out. The less sophisticated thiefs simply take cash and flee. Politically, there is no will to do anything about this because 1) Most of the thiefs are insiders, 2) It is (supposedly) believed that this looting is an inevitable part of the transformation to market… Read more »
VMD
Member
4 years 2 months ago
Anecdote: Chinese realtor asking “Can any mortgage expert enlighten me: Which banks can still allow mortgage application to go through without requiring proof of income (and also not self-employed) ? Higher down payment requirement is ok. Btw, assume the applicant is not a recent (<5 years) immigrant" – that realtor had contacted RBC, BMO, CIBC, HSBC. However he was told it may or may not be approved (case-by-case basis). – a BMO mortgage advisor recommended him to try BNS – another recommended RBS – looks like realtors are finding potential (local/non-HAM) buyers/investors having difficulty getting mortgages approved, since they don't… Read more »
patriotz
Member
4 years 2 months ago
Eric Lascelles, chief economist at RBC Global Asset Management, approves of most of the rule changes, but said there is a risk that they are being overdone to compensate for ultra-low mortgage rates. “I wonder if the drop from 30 to 25 years amortization might be regretted in a decade when interest rates have normalized and 25-year-olds are being told they cannot make mortgage payments past the age of 50, even though they expect to work until 65,” he said in an e-mail. What a tool. Not only does he think that this is a bad thing rather than a… Read more »
patriotz
Member
4 years 2 months ago

From Mish:
Baby Boomers and Strategic Defaults

22% made the mistake of tapping retirement accounts before walking away and another 16% considered doing so but decided against it. 63% never considered it.

I wonder if the stats will be similar here. Declaring BK before drawing on RRSP’s is the smart thing to do, since they are protected in bankruptcy.

If you follow the link “Foreclosure Stats” at the bottom you will see that some of the leading states for strategic defaults are recourse. So much for the argument that this is a deterrent.

zotitap
Guest
zotitap
4 years 2 months ago

@patriotz: ” I wonder if the stats will be similar here.”

Your wondering interests me very much patriotz. May i wonder this alnog with you? Perhaps we can have a heated discussion about this hypothetical situation? Its been my experiance that such discussions are time well spent.

Crikey
Guest
Crikey
4 years 2 months ago

@zotitap:
“Perhaps we can have a heated discussion about this hypothetical situation? Its been my experiance that such discussions are time well spent.”
Okay, who went and pissed on zotitap’s cereal this morning?

Yes, zotitap, statistics don’t matter one bit. It never makes sense to study or pay attention to them.

It is a much better use of your time and money to listen to frenzied word of mouth, Global TV, local Used House Salespeople, and the Vancouver Real Estate Board. Just ask anybody trying to sell property in Vancouver today.

Dan in Calgary
Guest
Dan in Calgary
4 years 2 months ago
From the “Vancouver RE Plunges” link above, I found another link to Vancouver housing market primed for correction: BMO, and there I learned there was absolutely no problem at all with price stability in Vancouver, because all we need is historically-low interest rates and wealthy immigrants continuing to pour into the city: “BMO senior economist Sal Guatieri says a correction in Vancouver will likely be less severe than previous ones”, explaining that “if interest rates stay low and wealthy immigrants continue to pour into the city, prices could stabilize sooner than in past downturns”. Whew. Crisis over. Time to move… Read more »
zotitap
Guest
zotitap
4 years 2 months ago

@Crikey: You’re right, someone pissed in my corn flakes, so I missed breakfast. But than you for giving me a straw man and false dichotomy for me to eat this morning.

Vancouver
Member
4 years 2 months ago

School started three days ago and I already got 3 detentions and 2 spankings by my mom. They tell me to stay schoolin’, not trollin’. Maybe they’re right.. Maybe that’s why I don’t got no friends..

Not much of a name...
Member
Not much of a name...
4 years 2 months ago

@patriotz: It seems that 25 year olds did just fine prior to 2006 when amortizations were the same as they are now. It’s amazing how many people have a short memory.

Vancouver
Member
4 years 2 months ago

guys I am on meds now. can’t believe I said all those horrible things.
I won’t say anything unless I have something good to say now. If I forget my meds, I might log on as Anonymous. So please vote him into oblivion. Peace!

Troll
Guest
Troll
4 years 2 months ago
Well bears, looks like the low sales trend has legs and the inventory is remaining elevated. Just as I predicted. This will lead to further price weakness, though no crash or falling off a cliff. Pleaes don’t extrapolate one month of data into an annualized total. Next thing to watch for is to see if we’ve got a lot of potential buyers on the sidelines. Let’s see if we get a sales bump as prices fall as ‘bargain hunters’ swoop in. If they materialize then we’re looking at potentially a long slow period of stagnation or prices drifting slightly down.… Read more »
fixie guy
Guest
fixie guy
4 years 2 months ago

@15 Troll Says: “If they materialize then we’re looking at potentially a long slow period of stagnation or prices drifting slightly down.”

Or a dead cat bounce. Maybe collapsed markets elsewhere can offer guidance.

jesse
Member
4 years 2 months ago
NOMURA: In The Last Two Days, China’s Stimulus Policy Has Changed The Chinese government announced on 5 and 6 September that it had approved 25 subway lines and 13 highway projects in June, July and August. Since April, it has also approved several other infrastructure projects including several airport and energy projects. The government also announced the investment amount approved for most of the projects, which total RMB848bn. We estimate the amount approved for all approved projects (including those for which the government did not announce a specific investment amount) totals about RMB1trn, which is 2.1% of 2011 GDP. The… Read more »
Not much of a name...
Member
Not much of a name...
4 years 2 months ago
@Troll: Next thing to watch for is to see if we’ve got a lot of potential buyers on the sidelines. Let’s see if we get a sales bump as prices fall as ‘bargain hunters’ swoop in. If they materialize then we’re looking at potentially a long slow period of stagnation or prices drifting slightly down. If these buyers don’t materialize then this is a much more ominous sign for the near future. Why would “potential buyers” swoop in when prices are essentially the same as they were a year ago (according to the REBGV HPI)? What has changed in the… Read more »
Dave
Member
4 years 2 months ago
@fixie guy: I think a good gauge of market stability is looking at the number and percent of first time home buyers in Greater Vancouver. If the level is healthy, then the market will support itself and I wouldn’t expect too much of a price correction. But, if first time buyers stay out of the market, then prices will decline until they come back. I haven’t checked those numbers for a year or two, so I don’t know where it sits. The market is slow right now and I don’t expect much to happen until next spring. If we have… Read more »
joe_blown_away_by_high_housing_costs
Guest
joe_blown_away_by_high_housing_costs
4 years 2 months ago

Hong Kong not allowing foreigners to buy real estate at two new developments. If Vancouver did this, it would be called racism.

http://www.bloomberg.com/news/2012-09-06/hong-kong-to-restrict-sales-of-apartments-at-two-sites-to-locals.html

Anonymous
Guest
Anonymous
4 years 2 months ago
@Dave: Dream on. I’m in the ‘first time buyer’ camp, with an excellent income (120k/year), decent DP, and I have no interest in buying into this market. Many of the people in my generation are shunning home ownership, and appreciate the flexibility and freedom that renting provides. We’re also acutely aware of the fact that we can rent for significantly less than buying in Van. Also, many of my friends that tried to make a go of it in Vancouver have left for Alberta, or gone to work in the US. Better pay, cheaper housing. This isn’t just anecdotal, as… Read more »
fixie guy
Guest
fixie guy
4 years 2 months ago

@19 Dave Says: “I think a good gauge of market stability is looking at the number and percent of first time home buyers in Greater Vancouver.”

I take it you mean that as ‘potential’ first time buyers. If they have access to mortgages it might be a valid point. Big question mark there.
The first timers who already bought however will be among the most vulnerable. That combination of lowest down payments, highest leverage, early-career wages and future obligations like child rearing will put them squarely in front of the bus.

Dave
Member
4 years 2 months ago

@Anonymous:

A lot of people make that choice and a lot of people don’t. The reality of the last 4 years is that first time buyers have been active in the market, which is in contrast to your anecdote. Let’s see how the numbers look over the next six months.

jesse
Member
4 years 2 months ago

@Dave: “I actually think the current slow market and likely price correction over the Fall will bode well for next Spring in that lower prices and sideline buyers will come back.”

A rational conclusion unfortunately applied to an irrational situation.

TPFKAA
Guest
TPFKAA
4 years 2 months ago
@Not much of a name…: “Why would “potential buyers” swoop in when prices are essentially the same as they were a year ago (according to the REBGV HPI)? What has changed in the year? Why would these people not wait for further price reductions?” I know a family whose landlord is selling their long term rental next summer. They have a downpayment and decent income, but have been holding off for prices to fall to a more reasonable level. The landlord selling is forcing their hand somewhat, and they are toying with the idea of buying and settling for a… Read more »
Best place on meth
Guest
Best place on meth
4 years 2 months ago

@joe_blown_away_by_high_housing_costs:

It’s all part of Hong Kong’s new “anti-locust” policy.

We should adopt something similar here to avoid all those messy extraditions of kleptocrats.

Not much of a name...
Member
Not much of a name...
4 years 2 months ago

@Dave:

The reality of the last 4 years is that first time buyers have been active in the market,

How do you know? You state in a different post that…

I haven’t checked those numbers for a year or two, so I don’t know where it sits.

I would question how many first time buyers are left if home ownership rates have risen to about 70%.

TPFKAA
Guest
TPFKAA
4 years 2 months ago

@TPFKAA: …especially if the owners of rented-out properties rush for the exits and start listing homes, it may flush out the last renters with money and force them to participate earlier into the price decline than planned.

Dave
Member
4 years 2 months ago
@fixie guy: I think that’s a hard case to make. You are implying that ‘vulnerable’ means market correction. First time buyers are always going to be more ‘vulnerable’ than long time owners, but it doesn’t follow that they are vulnerable in the strict sense of the definition. Our banks are conservative and have become even more so with the recent mortgage changes. People aren’t being given money unless they can support their mortgage payments. The only things that will make new owners vulnerable in aggregate would be an economic crash or significantly rising interest rates. In the case of the… Read more »
Not much of a name...
Member
Not much of a name...
4 years 2 months ago

@TPFKAA: Sure there will some in a similar situation where they feel that now is the time to buy. However, your example I don’t think fits into what Troll was describing as the “bargain hunter” waiting to “swoop” in.

Dave
Member
4 years 2 months ago

@Not much of a name…:

30% of activity. That’s still strong. If it drops to 10 to 15%, then you have a case to make.

http://www.vancouversun.com/business/real-estate/Metro+Vancouver+prices+remain+high+home+sales+slow/7196807/story.html

Anonymous
Guest
Anonymous
4 years 2 months ago

@Troll: …..Next thing to watch for is to see if we’ve got a lot of potential buyers on the sidelines. Let’s see if we get a sales bump as prices fall as ‘bargain hunters’ swoop in….

With both home ownership and debt both at all time high levels, how many ‘bargain hunters’ can there be out there?

Anonymous
Guest
Anonymous
4 years 2 months ago

@joe_blown_away_by_high_housing_costs: “Hong Kong not allowing foreigners to buy real estate at two new developments. If Vancouver did this, it would be called racism.”

Na, in Vancouver it’s call Cam Goodism.

Troll
Guest
Troll
4 years 2 months ago

@Not much of a name…:

Why would these people not wait for further price reductions?

Because not every buyer subscribes to bear logic, we’ve seen it time and time again in the Vancouver market. This is a big blind spot for many bears, hoping for rationality in an irrational arena. Seeing how the market behaves after a 5-10% drop will give us a lot of insight into sentiment and availability of cash/credit.

Best place on meth
Guest
Best place on meth
4 years 2 months ago

@Dave:

That’s very nice that the first time buyer segment remains constant at 30% of the market, but does it really matter when total sales are down 30-40% from a year ago and down at 14 year lows?

Net result is still 30-40% less first time buyers.

Not much of a name...
Member
Not much of a name...
4 years 2 months ago

@Dave:

30% of activity. That’s still strong. If it drops to 10 to 15%, then you have a case to make.

But, but, but…

The article said that the 30% level of activity of FTB is stable. Does this mean that the level of FTB a year ago was at 30%? If so, then that means that the FTB activity has also dropped a considerable amount. Not good.

Troll
Guest
Troll
4 years 2 months ago

@Anonymous:

With both home ownership and debt both at all time high levels, how many ‘bargain hunters’ can there be out there?

home ownership and debt have been at all time highs for years, so that’s really a useful indicator of short/medium term market movements is it?

Colt
Guest
Colt
4 years 2 months ago

Check out the CKNW audio Vault from sept 6 @ 12:45pm.It has one of REBGV guys on spining the latest numbers.
http://www.cknw.com/news/audiovault/index.aspx

VMD
Member
4 years 2 months ago

@Best place on meth:
going on right now:
Hong Kong protests over “patriotic chinese national education”
total lockdown on news of this protestby Chinese government.

– signs read “don’t brainwash our children” “protect our children”
– they can protest all they want, but who can fight against being assimilated into the Collective?

Anonymous
Guest
Anonymous
4 years 2 months ago

@zotitap: I totally agree. There is a lot of good hypothetical wondering on this blog. In fact, they’ve been wondering for years what will happen “when the market crashes”, like “will wage garnishments take a big chunk out of the economy?” and that kind of stuff. Very interesting!

Dave
Member
4 years 2 months ago
@Best place on meth: Take what you want from the number. It is what it is. If you are trying to make a case that people can’t afford to buy, then I would expect to see that in the first time homebuyer numbers. As long as first time home buyer activity is strong, like it is at present, then I really don’t expect to see much in the way of price decreases. That’s not to say we aren’t going to see declines over the next half year. We will. But, my expectation would be for moderate decreases with a pickup… Read more »
Not much of a name...
Member
Not much of a name...
4 years 2 months ago
@Troll: Because not every buyer subscribes to bear logic, we’ve seen it time and time again in the Vancouver market. This is a big blind spot for many bears, hoping for rationality in an irrational arena. Seeing how the market behaves after a 5-10% drop will give us a lot of insight into sentiment and availability of cash/credit. I guess how you describe a “bargain hunter” is different from me. That’s why I posed that question. I really wouldn’t classify someone who is buying at price reductions of 5-10% a bargain hunter. Maybe it could come down to semantics, but… Read more »
Dave
Member
4 years 2 months ago

@Troll:

I don’t subscribe to the irrational buyer theory. Stick with the affordability theory and you will be right far more than not.

zotitap
Guest
zotitap
4 years 2 months ago

@Anonymous: Truly, vancouvercondo.info is a wonder full place!

Anonymous
Guest
Anonymous
4 years 2 months ago

@zotitap: Yeah, for example, it makes me wonder what these people DO for a living, … if anything.

Anonymous
Guest
Anonymous
4 years 2 months ago
Dave, in 2008 when the great recession took place, the GOC pumped billions of dollars into banks, took housing debt off their balance sheets and dropped rates to historically low levels. They also extended amortization. All in an attempt to stabilize the rapidly declining housing market. It worked. Unfortunately, we are mirroring the downturn, without the desire on the part of the GOC to amp it up again. I believe they know they went too far, and are trying to do the right thing, now, and deflate the asset bubble. Carney’s comments about housing being an inherently unproductive place to… Read more »
Makaya
Member
Makaya
4 years 2 months ago

The troll index says it’s a low sales day today…

Brian
Guest
Brian
4 years 2 months ago

This isn’t the stock market. Prices won’t drop overnight. In my new townhouse complex on west side, we have about half of units that people were trying to flip. Sellers don’t want to lower prices (I suspect they were bought by the developer when no presale buyers bought those units). It’s been almost a year and they still refuse to lower prices. Inevitably, if the developer runs out of money, building things with no one buying, they will be forced to drop prices.

Vancouver
Member
4 years 2 months ago

@Anonymous:
anything’s better than trolling.
looks like you forgot your meds today.
I can recommend you my shrink, best out of the dozens I’ve had.

Poll: Death Penalty Extradition
Guest
Poll: Death Penalty Extradition
4 years 2 months ago

@VMD:

Canada should allow death penalty extraditions for serious financial crimes to former/current communist jurisdictions in those cases where Canadian officials are certain of the facts. EG: Theft by fiduciary or insider trading of cross listed company etc.

Vote up or down.

wpDiscuz