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 post for the weekend!
Here are a few recent links to kick off the chat:
-Vancouver sales decline 32%
-Vancouver drags down national numbers
-Time to panic
-Vancouver market cooling too quickly?
-Last September was a different season
-Realtors forced to change jobs
-What did Billy do wrong?
-HPI vs the San Diego bubble graph
-Policies will not make housing affordable
-House rich, lifestyle poor
-Condos best rented, not owned
-
So what are you seeing out there? Post your news links, thoughts and anecdotes here and have an excellent weekend!
October 19th, 2012 at 2:50 am 1
Re: Article in Vancouver Sun “Policies will not make housing affordable”
The entire rationale for these policies was that land in Vancouver is expensive because there’s a shortage of land, and that’s why Vancouver has an affordability crisis that City Council was compelled to address.
It seems City Hall didn’t understand the memo telling them that Vancouver was in a real estate bubble driven by easy and cheap credit, and that this was the real cause of rising prices.
I wonder if they’ll still be relying on the “shortage of land” explanation and “affordability crisis” excuse for using these policies when prices drop 40-50%, and there’s still a huge inventory of unused/unsold housing units?
Or if the developers will continue to build all these new luxury condos that have already been approved on the west side once they realize there are no buyers on the horizon?
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October 19th, 2012 at 3:00 am 2
One more link. From CBC’s “Anger In America” documentary:
http://angerinamerica.cbc.ca/#3-real-estate-crisis
Scroll to the bottom of the page for the video clip on Cleveland’s housing crisis solution – demolishing properties to artificially raise prices through scarcity. This is what I call punish the property instead of punish the idiots who overpaid because the bank gave them “free money”.
Also, fans of COC(CaucasiansOnCredit) blubbering, should have a look at the full documentary in the CBC player. Once again there is somebody complaining (like the woman in Ireland) about how they were somehow “forced into buying a ridiculously overpriced home”.
What I would like to see is a documentary called “Free Money Society”, where psychologists and economists interview people in Canada who take these loans with no practical intention to ever fully repay. They could investigate a number of theories, for example: (1) Is there some sort of Lemming effect, where the herd is doomed to march in lockstep right off a cliff? (2) Are these people so hopeless they can’t even imagine they will be alive and liable for their actions only a few years in the future? (3) Are these people too gullible or mentally incompetent? (4) Is there a debatable point where any of these people can legitimately claim they were tricked by a predatory lender or forced under duress to sign these contracts?
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October 19th, 2012 at 4:48 am 3
Banks must be able to fail without taxpayer bail-outs or else the next rescue will provoke “almost uncontainable” levels of public anger, Bank of England deputy governor Paul Tucker has warned.
Paul Tucker warns backlash to another bank bail-out would be “uncontainable”
http://www.telegraph.co.uk/finance/newsbysector/banksandfinance/9603780/Paul-Tucker-warns-backlash-to-another-bank-bail-out-would-be-uncontainable.html
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October 19th, 2012 at 5:11 am 4
October sales. Very strong relative to September’s. This is very unusual strength. I see on first pass four potential reasons:
1) A random occurrence
2) Prices have fallen enough to make mortgage payments more affordable all of a sudden
3) Rush of sales due to incentives and a closing off of financing terms before underwriting guidelines change
4) A renewed bout of investment dollars from somewhere else
The last time we saw such a large seasonally adjusted uptick was March 2011. That was the month before CMHC changed its insurance qualification rules. Not that I know much one way or the other but October 2012′s recovery has been remarkable (not too far below 2011/2010 but still pretty bad).
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October 19th, 2012 at 5:14 am 5
Banks must be able to fail without taxpayer bail-outs”@george: YES!
My post on the responsibility of borrowers isn’t a pass for financial institutions. Insolvent banks MUST be sent to bankruptcy court without bailout, have their debts unwound, and where feasible bank fiduciaries should be subject to criminal sanction.
RBC, I’m talking to you! RBC using their block trade facility (see link) for collateral and market avoidance must be prosecuted by Canada! Usury marketing of mortgages by RBC to Canadians should also be investigated.
It should be enough that if RBC’s CEO Gordon Nixon has Finance Minister James Flaherty’s number on the speed dial of the phone at his desk, RBC (or any other Canadaian bank) should be subject to scrutiny for political corruption. RBC, you don’t own Canada! Canada exists for the benefit of Canadians.
http://www.bloomberg.com/news/2012-04-02/rbc-sued-by-u-s-regulators-over-wash-trades-seeking-tax-benefit.html
Hot debate. What do you think?
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October 19th, 2012 at 5:33 am 6
@jesse: with 65 sales yesterday, I think it would be wise to wait until the end of the month before making a judgement on October’s market. We can’t call it a “very strong market” yet, even relative to September’s market.
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October 19th, 2012 at 5:38 am 7
@jesse: re: “October sales. Very strong relative to September”
Excellent question! The follow-up question that comes to mind is who are the sellers? Are they COC or HAM? Let me explain.
(1) HAM sellers. Caution and awareness. HAM knows this is a casino bet, just like the Macau Baccarat table. They close out their excess property at the bid and wait for another day when the eights (8′s) are smiling on their gambling beliefs.
(2) COC sellers. Ordinary assimilated Canadians of any race have property that is underwater and have suddenly changed religion because they see an even bigger world of hurt coming if they hold on for even one more day. They take the bid and change religion.
My sense of it is, the sales are mainly HAM gamblers who know their eights have run out.
http://www.google.ca/search?q=chinese+gambling+culture
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October 19th, 2012 at 5:49 am 8
@Anonymous: “We can’t call it a “very strong market” yet, even relative to September’s market.”
You can define strong any way you like but right now with 9 days left the trend is tracking to about 2k, or about 90/day. If we average 60 for the rest of the month that will finish Oct at 1700-1800, which is still about 20% above September’s. Further if that were to occur it would be different from the process variability seen in the past 2 years where sales were relatively constant through the entire month. I’m pointing out that daily numbers have tripped through what looks to me to be an abnormal sales event, is all. Maybe it’s noise.
Hot debate. What do you think?
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October 19th, 2012 at 7:11 am 9
@jesse:
When September sales were analyzed, the experts were quick to notice that there were only 20 working days that month, hence low monthly sales.
As luck would have it, October has 23 working days, so there… sales increase explained.
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October 19th, 2012 at 7:26 am 10
@vanpire: Averages for October were markedly higher than September. This is not a month end argument based on total sales days, the numbers are up on a daily basis. The only way October comes in at the same level as September on a daily basis is for sales to crater for the rest of the month. That would mean a departure from the normal pattern of October dailies.
I’m not sure if people are disliking the numbers or my analysis!
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October 19th, 2012 at 7:36 am 11
Unfortunately I think it will be continue to be challenging for BOC to raise rates due to non resource economic performance and related pressure to weaken the currency. Until those factors change there is little likelihood of official BOC rate hikes. That said ongoing tightening on housing credit from the Finance Minister, eg. CMHC, OSFI continues to be possible.
http://www.bloomberg.com/news/2012-10-19/canadian-dollar-falls-as-inflation-data-adds-to-rate-speculation.html
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October 19th, 2012 at 7:37 am 12
@jesse: “I’m not sure if people are disliking the numbers or my analysis!”
I think it’s your choice of words that people are disliking. Calling “very strong” a market with such low sales is not an accurate description of what’s really happening (especially after yesterday’s catastrophic sales), even if you mentioned “relative to September”.
Just my two cents…
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October 19th, 2012 at 7:47 am 13
@Makaya: Maybe lol, doesn’t change the data though. I’ll use more rational language next time
Hot debate. What do you think?
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October 19th, 2012 at 8:18 am 14
Yep, another example of Vancouver being on the same stage as Melbourne, New York, London, Paris, Hong Kong, etc…
“When Topshop opened its first Australian location in Melbourne last year, hundreds of ecstatic shoppers lined up overnight for an opportunity to be the next trend-setter.
It’s the same at the clothing retailer’s launches around the world: New York, London, Paris, Hong Kong. Wherever Topshop goes, fashionistas flock…”
Whoops, except Vancouver.
“…only a handful of shoppers turned out. At times, there appeared to be more staff than there were customers browsing the furry clutches, pink blush and sequined tops.”
I blame the rain.
http://metronews.ca/news/vancouver/408829/vancouvers-topshop-opens-without-the-stampede/
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October 19th, 2012 at 8:18 am 15
@jesse: It’s disappointing to see the downvotes; this site is stronger when we’re not selectively blind. I really appreciate the information you post.
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October 19th, 2012 at 8:25 am 16
Vancouver Sun: “Household debt headlines don’t tell the whole story”. (By the way, using Chrome, it’s easy to completely block/delete the paywall pop-up. I use a combination of AdBlock and Page Eraser plug-ins. I am not paying for that rag until their stories are consistently this good.)
Let me get that straight: Americans can write off their mortgage interest against income tax, which makes it easier for them to hold large debt. Canadians have run up a comparable household debt anyway. And this somehow makes us better?
…and they’re comparing Canada, pre-crash, to the States, post-crash. There may be a valid point here, but they sure ain’t making it.
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October 19th, 2012 at 8:26 am 17
@specialfx3000:
“When Topshop opened its first Australian location in Melbourne last year, hundreds of ecstatic shoppers lined up overnight for an opportunity to be the next trend-setter.”
Bad reception to Topshop in Vancouver because they don’t sell 100 dollar yoga pants.
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October 19th, 2012 at 9:01 am 18
@Turkey: Yeesh.
The debt ratio is up 1.6% (by the new accounting) last quarter. That’s a 6.6% annualized increase, at a time when debt ratios are already off the charts and Mark Carney is already pooping bloody nickles over it.
So net worth was revised upwards about 5%, while debt was revised upwards about 10%. Debt increased 1.6% last quarter, while net worth increased 0.9%. Yeah, great news.
That’s awfully meta, Vancouver Sun.
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October 19th, 2012 at 9:10 am 19
@Many Franks: disappointing to see the downvotes”
Hardly. It’s quite revealing on many levels!
Hot debate. What do you think?
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October 19th, 2012 at 9:20 am 20
Jesse, I count daily sales volumes up about 10-15% in October vs. September this year (so far), whereas the norm from the last 2 years was October about 5% higher vs. September.
It’s hard to know the reason for the bigger uptick this year, but looking at the area I follow (Tri-Cities), it seems like more sellers are getting realistic about the changing market and have dropped their prices in order to sell.
I guess we’ll see (or at least get some idea) how much of the increase in sales is being driven by price reductions when the price indices come out for October month end.
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October 19th, 2012 at 9:25 am 21
@Many Franks: The funny thing about my comment is that, in my view, it’s most likely quite bearish in the longer run. I’ll put it a different way:
1) Data indicate October sale rate compared to the September level is markedly higher. This is unusual.
2) This may just be noise.
3) One conjecture is that with upcoming mortgage rule changes we are seeing a similar effect to what occurred in March 2011 with sales surging only to fall again the next month
4) If this is the case that means future demand is in effect brought forward and will lead to lower sales later on. That will lead to more severe sales and price declines subsequent.
Or it could just be more “HAM”!
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October 19th, 2012 at 9:35 am 22
@jesse: During the US bust (2007-2009), bears were sometimes alarmed by freakish upticks in sales in various places. They turned out to be rounds of knifecatching. There’s been some fairly aggressive price reductions, so this may be happening. Don’t worry, these sales need to happen to set the new lower market prices.
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October 19th, 2012 at 10:13 am 23
http://money.ca.msn.com/video/?cp-documentid=3fbfeddb-5af2-4ba5-ad98-1b99f5aced9a
Interesting video with David Choi, President of Royal Pacific Realty. There were two parts that really stuck out for me.
6:15 – States that Chinese “investors” were not speculating since they weren’t using leverage to buy.
8:20 – Chinese will only buy when fundamentals make sense. They won’t purchase is locals cannot buy.
Hmmmm…..
Hot debate. What do you think?
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October 19th, 2012 at 10:41 am 24
For those wanting to read crappy Van Sun articles I have found a way, although a bit cumbersome, to get rid of the paywell modal aka “subscribe now” popup. These instruction are for chrome browser.
1. Command-Option-I. This will bring up the developer tools.
2. Click on the console button, the rightmost button.
3. There will be a little prompt looking like this > where you past the below.
4. Paste then hit enter: $(‘#gregbox-outer’).hide();
5. Paste then hit enter: $(‘body div:last’).hide();
You will have to do this on each page.
Enjoy
Hot debate. What do you think?
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October 19th, 2012 at 10:58 am 25
Regarding the sales bump in October, I think it’s a combination of freaking-out sellers lowering their prices plus the upcoming October 31 rule changes. Note that despite the fact that the “July 8″ changes have come and gone, the cash-back mortgage ban which was announced at the same time does not come into effect until October 31. You can still get one at TD for example:
http://www.tdcanadatrust.com/products-services/banking/mortgages/view-all-our-mortgages/5-cashback.jsp
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October 19th, 2012 at 11:05 am 26
@vanpire: here are the averagedaily numbers compared
This is taking total monthly sales divided by the number of working days in that month. 2010 saw a surge in October that was near the beginning of a large price runup in certain areas, especially in Richmond, Van West, and West Van detached.
So a “surge” of sales in October isn’t too out of line compared to at least 2010-2011, but still higher than I expected.
Looking at average daily sales is a much better way of comparing YOY sales data.
Hot debate. What do you think?
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October 19th, 2012 at 11:07 am 27
@Yalie: Yes, cashback mortgages are slated to end no later than October 31st but may occur sooner. I think National still offers them as well.
Hot debate. What do you think?
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October 19th, 2012 at 11:42 am 28
@Turkey: The amorous elk story you liked in the Sun is a Canadian Press wire story. Which you could find for free online pretty much anywhere.
The Sun is totally nailing itself into a coffin.
Hot debate. What do you think?
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October 19th, 2012 at 12:18 pm 29
Only two sales in October in the Vancouver SFH segment I am following:
V968617 sold for $90,000 below asking.
V974935 sold for $50,000 below asking
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October 19th, 2012 at 12:38 pm 30
The sales rate is still weak historically and given the terrible summer and pending rule changes probably some pent up demand. Fundamentally inventory/shadow inventory, sales rates(moi) and reported prices should remain the main indicators of where prices are headed, which is all that matters correct?
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October 19th, 2012 at 1:26 pm 31
@market stats: Yes, for fun I graphed average daily sales by month here going back to 2005. (Months are unlabeled.)
In perspective, 2012, even with the recent increase in sales activity compared to September, is still midway between 2008 and 2011/10. That’s not exactly good.
Hot debate. What do you think?
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October 19th, 2012 at 1:47 pm 32
I am not at all concerned about our October uptick.
http://en.wikipedia.org/wiki/File:Stages_of_a_bubble.png
If you believe that Vancouver housing is a bubble, you should expect a bull trap/return to “normal” phase during the early part of the blow-off. It’s part of the process. If anything, we should be glad it’s happening this fall instead of next spring. By March 2013 we should be fully into fear territory from the graph.
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October 19th, 2012 at 1:47 pm 33
And here is a “modified” MOI chart that looks at taking the ratio of for-sale inventory to 21X(average daily sales). This gives an MOI-like measure that adjusts for sales days and instead looks at the “flow” of sales through the month. The measure is plotted on semilog to better show the differences between years.
Look at the progression of the October numbers starting in 2009 (gonzo for price increases), then 2010, 2011, and now the (projected) 2012. It has been continually more and more difficult to sell in the fall since 2009. We’ll have to see what 2013 brings!
Hot debate. What do you think?
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October 19th, 2012 at 1:48 pm 34
@Patiently Waiting
I’m with you completely on the theory that higher (relative) sales are from people are taking advantage of falling prices and pent up demand. I am (very impatiently) waiting on the sidelines and have been since 2007. We want a SFH in the region for our growing family, and I am starting to get tempted by some opportunities where properties have already been reduced significantly and where an additional 10% discount off the present asking price gets into the realm of rent covering mortgage payments. Again this is only really possible for houses with suites in certain burbs, but nonetheless the discounts to date and potential for distressed sales / lowballs has got even got me perusing MLS again, and I read these bearish prognostications every day!
Hot debate. What do you think?
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October 19th, 2012 at 1:54 pm 35
@painted turtle: How are you finding out what they sell for?
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October 19th, 2012 at 2:33 pm 36
I couldn’t resist to post this picture here for your viewing pleasure.
Hope it makes your Friday a little bit brighter.
http://imageshack.us/photo/my-images/13/pricedrop.jpg/
PS I wrote about this price drop before but seeing it is much better than reading about it. I think we should start collecting price drop pictures =)
Hot debate. What do you think?
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October 19th, 2012 at 2:45 pm 37
New Listings 166
Back On Market Listings 2
Price Changes 106
Sold Listings 60
All Lower mainland
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October 19th, 2012 at 2:53 pm 38
72 Court Orderer for sale in lower mainland
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October 19th, 2012 at 2:58 pm 39
@jesse: re: Normalized Sales
THANK YOU for posting this! Behold the effect of “sell now or be priced in forever”.
This chart also demonstrates that the seller’s agent WILL keep every legitimate offer in the folder no matter how low.
@ArthurFonzarelli:
If you go around to every property you like and offer 50%, that offer will stay in the order book of the seller’s agent until the day the sale closes. Don’t underestimate this. The seller’s agent will keep your offer on file no matter how ridiculous it may seem at the time. Developers and others working from a pool of speculative financing will become particularly motivated when better opportunities for the money are on the horizon and there are no buyers. When that time comes, the seller’s agent would prefer to simply call you and close the deal instead of trying a still higher listing discount. You will be first in line.
Hot debate. What do you think?
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October 19th, 2012 at 2:58 pm 40
this
http://vancouver.en.craigslist.ca/van/apa/3293025549.html
or this
http://vancouver.en.craigslist.ca/van/apa/3312308784.html
that “RentItFurnished” company is such an f’ing rip-off, and this one isn’t even furnished.
Hot debate. What do you think?
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October 19th, 2012 at 3:11 pm 41
The reason for that little uptick is because motivated sellers are starting to panic. How the hell could they not panic after the biggest media blitz of dire warnings in…well, probably 30 years.
That should suffice to seriously reduce the dwindling number of fools before the snowball really starts to gather steam.
Hot debate. What do you think?
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October 19th, 2012 at 3:15 pm 42
@Not much of a name…:
“6:15 – States that Chinese “investors” were not speculating since they weren’t using leverage to buy.”
Like “bubble”, “speculation” gets redefined to suit the agenda of the speaker. The standard meaning is that investors are expecting to get a positive return on investment from selling at a higher price, not from earnings. It has nothing to do with leverage.
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October 19th, 2012 at 3:32 pm 43
@jesse: I, for two, am disappointed in the down votes on Jesse’s comments. This type of analysis is why I come to this site. I hadn’t noticed the strengthening numbers from Sept to Oct. Who cares how Jesse refers to them? To think that 18 people tried to get his comment into foreclosure is nuts.
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October 19th, 2012 at 3:33 pm 44
@painted turtle: They are gone off the MLS. Care to give us a hint as to where they were and what made them interesting enough to follow?
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October 19th, 2012 at 3:39 pm 45
4th avenue store closing update.
“Does Your Mother Know” (magazine shop 2100 block), papered the walls sometime this week
Hot debate. What do you think?
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October 19th, 2012 at 3:57 pm 46
@vangrl: Ugh, even at $1600 that place is overpriced forget that they will only do month-to-month as they are selling.
The gall of this owner to even list it for rent is amazing. At the current price they are renting at $2.462/sqft, our place is 23% cheaper, higher end, better location, and a 5 year lease!
Hot debate. What do you think?
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October 19th, 2012 at 4:10 pm 47
@mac: Completely agree re: downvoting jesse. I come here for market analysis, not mindless circlejerking over falling sales/prices.
Hot debate. What do you think?
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October 19th, 2012 at 4:10 pm 48
“To think that 18 people tried to get his comment into foreclosure is nuts.”
i think that readers are just not liking the slightly positive news, hence voting it down.. it’s like they “dislike” what he’s saying, not that he said it…if that makes any sense.
but some of the other “dislikes” baffle me, and I’m sure I’ll get a few right now:)
Hot debate. What do you think?
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October 19th, 2012 at 4:13 pm 49
@Chem Guy:
Seller is an idiot. Even on m/m a sitting tenant will take several % of the price.
Or maybe the seller is so strapped they need the cash flow until it sells. Well I guess that means the seller is an idiot too.
Hot debate. What do you think?
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October 19th, 2012 at 4:15 pm 50
not that I voting Jesse down, I didn’t, in fact I actually never vote any post down come to think of it, only up. I just ignore the ignorant “dislike” worthy posts..
Hot debate. What do you think?
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October 19th, 2012 at 4:22 pm 51
Here’s the answer:
http://www.thestar.com/news/canada/article/1274228–want-to-buy-a-plot-of-land-for-10-you-can-in-manitoba
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October 19th, 2012 at 5:00 pm 52
I didn’t vote his comments down either, but I am confused about the fixation on October’s numbers as compared to last month’s. That is something I’m used to reading about in the MSM. Why wouldn’t you be interested in trends by comparing YOY with past Octobers?
Hot debate. What do you think?
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October 19th, 2012 at 5:02 pm 53
re: Kitsilano apartment for rent
why would I pay 1600/mth rent for month-to-month lease of an (older and all-around not spectacular) 1 bedroom and put up with open houses/strangers passing by? seller must’ve lost their mind offering this sorta bllsht
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October 19th, 2012 at 5:09 pm 54
New Listings 171
Price Changes 106
Sold Listings 58
TI:18993
http://www.paulboenisch.com
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October 19th, 2012 at 5:15 pm 55
@paulb: methinks we’ll have another 19k party soon…
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October 19th, 2012 at 5:22 pm 56
Another Black Swan?
Even at the lows of 2008, I’ve never seen this happen.
SECOND time in a week for Richmond.
NO detached houses SOLD today!
New Listings = 9
Price changes = 6
Solds = 0
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October 19th, 2012 at 5:26 pm 57
I also think the down votes on Jesses comments are weird, but I assume they are a reaction to disliking the ‘positive’ news. The fact that his comments are still prominently displayed means reader moderation is working though. I also like being able to see the balance of up and down votes on comments now.
Hot debate. What do you think?
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October 19th, 2012 at 5:26 pm 58
@Inventory: Uh-oh. Huzzbah sell zero.
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October 19th, 2012 at 5:31 pm 59
There goes that “stronger” October.
Jesse,
We’re creeping back towards 19K again.
You told me this wouldn’t happen
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October 19th, 2012 at 6:17 pm 60
Inventory update 6pm
19,001
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October 19th, 2012 at 6:18 pm 61
@mac
Beautiful heritage-style 1/2 duplex in the heart of Cambie Village. Features 1,438 SqFt living area, 3 bedrooms, 2.5 bathrooms, & 1 parking. Classic style w/ excellent craftsmanship by Ted Seeburg. Boasting 9′ – 10′ ceilings, engineered oak & American walnut wood flooring, & crown mouldings. Luxury gourmet kitchen offers a large eating area and is outfitted w/ custom stained oak cabinetry, quartz countertops, & top-of-the-line appliances: Fisher Paykel, Five Star, & Blomberg. Bathrooms offer radiant heating, Kohler toilets, deep soaker tubs, & Incepa sinks. Steps away from shops, restaurants, transportation, schools, & all other amenities. Maintain peace of mind with Rain Screen technology and balance of 2-5-10 Warranty. Listed By: RE/MAX SELECT PROPERTIES
Aug 28 982 k
Sept 949 k
Oct 899 k
Sold 890k
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October 19th, 2012 at 6:24 pm 62
@JR subscribe online to a RE robot.
I use Gina Rossi private client services
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October 19th, 2012 at 6:30 pm 63
@Inventory:
WOOOOO!! Happy 19K everyone!!!
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October 19th, 2012 at 6:44 pm 64
And the way I see it, the Fed, ECB and global central bankers today fight a losing battle. The mountain of global debt, securities, and derivatives, along with this destabilizing global pool of speculative finance, just inflate larger by the year – and after each policy response. And the more outrageous the policy measures implemented to try to resolve each crisis, the more these desperate measures further inflate the global Bubble. Ironically, the ongoing assurances of central bank liquidity seem to ensure an eventual crisis beyond the liquidity capacity of central banks. Happy 25th Anniversary, you aged and ornery Credit Bubble. They’ll be reading, writing about and studying you for at least the next century.
http://www.prudentbear.com/index.php/creditbubblebulletinview?art_id=10721
Hot debate. What do you think?
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October 19th, 2012 at 6:51 pm 65
@raincity
I agree, I see nothing wrong with Jesse’s comments. I like stats and data it’s what most of us are basing our views on.
We know based on the data the housing market is unsustainable without cheap credit and even cheap credit will have it’s limits to what people can afford.
Thanks Jesse!
Hot debate. What do you think?
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October 19th, 2012 at 7:38 pm 66
One interesting side effect of a slightly stronger October, at least in comparison to September’s horrible results, is that the HPI is surely going to take a bigger hit this month.
Hot debate. What do you think?
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October 19th, 2012 at 7:39 pm 67
@ReadyToPop: Yes, of course. But real estate blogs are for myopic obsessive viewing of the real estate market. Taking it apart tranche by tranche like a Damien Hirst cow.
So I also want to know what’s going on month to month. Is it a blip or is it another version of what happened at the very end of 2008, when buyers rushed back into the market only later to be spurned on by insanely low interest rates?
I want to figure out what’s going to happen before it happens that’s why I come here. And that’s why I don’t want analyses suppressed by voting it into foreclosure by those that can’t bear bad news.
Hot debate. What do you think?
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October 19th, 2012 at 7:42 pm 68
@painted turtle: Mmmmm, mmmm. That is a nice find. Could you give me the address? I’d like to go take a look at it. Don’t worry, I won’t do anything creepy. I like the village. Could see myself living there once prices become reasonable.
Like or Dislike:
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October 19th, 2012 at 7:46 pm 69
@painted turtle: Actually don’t worry about the address. I found it. It’s on W 16th. In your opinion, is that a lot of money for W 16th? 1450ish square feet? How does it compare to 2008-2011 prices for this type of property. I’m assuming you’ve been watching the neighbourhood for a while.
Like or Dislike:
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October 19th, 2012 at 7:59 pm 70
@Inventory: There may be some folks trying to catch the knife but it doesn’t matter if one area like Richmond tanks as it will serve as the pulse check for the whole market. I can imagine the sheeps thought process now “hmmm, Richmond was the hottest market and now it is tanking, maybe I’ll just wait and see what global tells me to do”
Well-loved. Like or Dislike:
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October 19th, 2012 at 8:32 pm 71
Aug 28 982 k
Sept 949 k
Oct 899 k
Sold 890k
$300K too high.
Well-loved. Like or Dislike:
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October 19th, 2012 at 8:55 pm 72
@ReadyToPop: “confused about the fixation on October’s numbers as compared to last month’s”
There is usually a bounce in sales in October from September, only this year saw a larger bounce than has been the norm. That’s all; as I have stated multiple times the market is still weak by most measures, I was expecting it to be even weaker. I think a plausible explanation for the larger bounce is a rush to secure financing before rules change but as I mentioned it might just be noise.
Hot debate. What do you think?
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October 19th, 2012 at 9:12 pm 73
Alright, the next person that downvotes Jesse gets a smack in the gob!
Hot debate. What do you think?
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October 19th, 2012 at 10:33 pm 74
@mclovin:
$590 K for a duplex ? Still 300K overpriced.
Well-loved. Like or Dislike:
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October 19th, 2012 at 11:22 pm 75
@YLTNboomerang:
Regarding Richmond, my everbull friend insists that China is just now receiving news of the earthquake hitting Japan in March 2011.
Hot debate. What do you think?
14 
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October 20th, 2012 at 2:41 am 76
On Canequity website, it has average loan size for different cities:
http://www.canequity.com/british-columbia/vancouver-mortgages.htm
For Vancouve, Average Loan size: $278,462.00
http://www.livingin-canada.com/house-prices-canada.html
Average Vancouver housing price: $752,000
Does this mean most home buyers have large downpayment or perhaps helps from parents home equity?
Hot debate. What do you think?
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October 20th, 2012 at 4:25 am 77
@G:
It means most mortgage borrowers are trading from a property they already own or refinancing a property they already own.
The average applicant age is 39, which pretty much says the above.
Hot debate. What do you think?
9 
1
October 20th, 2012 at 5:44 am 78
Check out these “smart” “entrepreneurs” who maxed out their Vancouver mortgage to buy property in the US:
Going all in: Canucks max out their mortgage to buy in Brooklyn
“Meet Rodney Hynes and Thomas Hunt, Vancouver owners of a new brownstone in Brooklyn, N.Y.
“We’d like to thank the over-priced Vancouver real estate market for making it possible,” says Mr. Hynes, dryly…
They are a perfect example of Vancouver buyers who were initially reluctant to jump into the market, but once in, soon embraced the seemingly endless ride, as, year after year, the value of their home climbed. They were smart, or lucky enough, not to lock into a five-year rate, but instead went with a variable rate so low that they rapidly paid down a hefty chunk of their principal. It meant they were sitting with a lot of equity, and they became eager to use it towards another purchase.
You won’t hear the Suze Ormans of the world advising consumers to mortgage one’s home to the max. Most every money expert will tell the average middle-income earner to pay down the mortgage, not borrow further on it.
Mr. Hynes and Mr. Hunt had almost paid off their Vancouver home but chose to mortgage it to the max so they could own the brownstone clear title.
Mr. Hynes and Mr. Hunt say they have already endured shocked reactions from friends, of the “are you crazy?” variety…
“Canadians are very conservative, especially around matters of money,” says Mr. Hynes.
Says Mr. Hunt: “What’s interesting is when you go to New York and you’re doing what we’re doing, you see it’s as normal as can be. There are people from all around the world purchasing real estate, and being entrepreneurial about it.
“We’re not worried.”…
“There will be challenges every step of the way,” says Mr. Hunt. “Taxes are huge. Expenses are really high. Insurance is high. Water has to be paid for separately. We have to budget for maintenance.”
And the vacancy rate isn’t the same as Vancouver, adds Mr. Hynes. In an up-and-coming neighbourhood like Bed-Stuy, they say demand is so much lower that people might not show up for an open house on a rainy day.
However, compared to Vancouver, the New York market is a breeze, says Mr. Hunt.
“We spent two years looking for a house in Vancouver, and the fact that we survived a sellers’ market here meant we didn’t freak out about the New York purchase.
“The market in Vancouver was way more intense.””
http://www.theglobeandmail.com/life/home-and-garden/real-estate/going-all-in-canucks-max-out-their-mortgage-to-buy-in-brooklyn/article4623131/
Hot debate. What do you think?
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October 20th, 2012 at 7:09 am 79
@Anonymous:
That’s a price/rent of 103. Even given the higher property taxes in NYC, you can see that people buying “investment” properties at today’s prices in Vancouver are out of their minds.
Their big mistake wasn’t buying the NYC property, but mortgaging the Vancouver property rather than selling it. The mortgage appears to be uninsured. That means they are going to have a few issues with the lender if prices have gone down at renewal time.
Talk about not getting it. Record high consumer debt in Canada, yet people are supposedly conservative about money?
Well-loved. Like or Dislike:
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October 20th, 2012 at 7:41 am 80
Even in Paris it’s not different… Prices have gone down 3.4% in the last 6 month.
http://www.lefigaro.fr/conjoncture/2012/10/20/20002-20121020DIMFIG00313-paris-plus-forte-baisse-des-prix-immobiliers-dans-le-monde.php
Hot debate. What do you think?
18 
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October 20th, 2012 at 8:34 am 81
View for the trenches:
I bumped into a neighbour a few days ago who happens to develop smallish buildings. She mentioned that things are “slow” then a minute later used the term “dead”. She said for the time being she is no longer building condo’s but is going to be building designated rental units because of the incentives from the city and Province. She said she wanted to hurry because she feels there is a window that will close soon as many developers are thinking the same thing.
Well-loved. Like or Dislike:
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October 20th, 2012 at 8:47 am 82
@painted turtle:
Is that one from the row of heritage duplexes on 16th, 1 block east of Cambie that were constructed in 2008? I used to drive past there regularly when they were under construction. Finished to time it perfectly with the GFC. From memory, the initial sale prices were “from $885k” and later reduced to “from 835k”. If we’re talking about the same place, at $890k, that’s not a lot of appreciation since 2008.
Like or Dislike:
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October 20th, 2012 at 8:57 am 83
Peter Simpson rumbles on with a new bout of flatus. Let’s track who he would like to include in an ideal housing discussion.
Heavens, unbalanced reporting might misinform the populace. All right: so-called experts and bloggers are off the team. (That includes “real-estate experts”, Peter.)
All right, economists and pollsters are also cut.
So we’re left with a panel containing housing providers who like to talk to the uninformed. Hey, it’s almost like you’re a little hurt they didn’t just ask you, Peter.
As you like; a rose by any other name would smell as sweet.
Hot debate. What do you think?
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October 20th, 2012 at 10:06 am 84
@Many Franks:
Right, because people are so reliable when it comes to providing and interpreting data. Theory, research and analysis are for ivory tower latte sippers.
Hot debate. What do you think?
10 
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October 20th, 2012 at 12:09 pm 85
Curious what some of you guys think is reasonable value for place like this over next 2-3 year – assuming neither crazy hyper-inflation and 20% rates, nor global invasion by aliens:
http://www.realtor.ca/propertyDetails.aspx?propertyId=12515092&PidKey=1733079134
I see this place at $420K over next 2-3 years. $500K now. But I don’t see these types of decent houses in nice(ish) neighbourhoods under 45 minute commute from DT dropping under $400K ever. My take.
Hot debate. What do you think?
10 
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October 20th, 2012 at 12:19 pm 86
2 interesting tidbits.
I bumped into a realtor friend(was a long time entreprenuer that jumped onto the re In the mid 2000s).
I thought he would try to sell me, but the total opposite. He bluntly said wait and save your money, prices are sliding.
Good honest advice from a realtor and a friend I reckon.
Inlaws have a local re investment fund(commercial and mortgages banks wont touch).
They were all invited to an emergency meeting the other night. The fund is liquidating as it is no longer a successful business model due to the regulation changes.
So two very bearish points from two different perspectives. Time to put our hands up and go weeeeeeeee !?!
Well-loved. Like or Dislike:
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October 20th, 2012 at 1:37 pm 87
Monthly sales and inventory stats are out from BCREA. Here are the MOI calculations for September 2012. I have also included September 2011 MOI numbers in brackets for year-over-year comparison.
BC Northern
Inventory:2960
Sales: 296
MOI: 10.0 (8.3)
Chilliwack
Inventory: 1792
Sales: 153
MOI: 11.7 (12.1)
Fraser Valley
Inventory: 8652
Sales: 791
MOI: 10.9 (7.7)
Greater Vancouver
Inventory: 19513
Sales: 1536
MOI: 12.7 (7.5)
Kamloops
Inventory: 2173
Sales: 186
MOI: 11.7 (11.5)
Kootenay
Inventory: 3190
Sales: 155
MOI: 20.6 (15.6)
Okanagan Mainline
Inventory: 6272
Sales: 394
MOI: 15.9 (14.6)
Powell River
Inventory: 240
Sales: 23
MOI: 10.4 (10.1)
South Okanagan
Inventory: 1908
Sales: 125
MOI: 15.3 (17.2)
Northern Lights
Inventory: 256
Sales: 50
MOI: 5.1 (5.4)
Vancouver Island
Inventory: 6072
Sales: 430
MOI: 14.1 (10.9)
Victoria
Inventory: 4097
Sales: 400
MOI: 10.2 (9.2)
Provincial Totals
Inventory: 57125
Sales: 4539
MOI: 12.6 (9.3)
Outside Vancouver
Inventory: 37612
Sales: 3003
MOI: 12.5 (10.4)
The big story is the rapid deterioration of the Vancouver market, whose rate of free-fall has now passed light speed and officially attained ludicrous speed. At 12.7, MOI is up 40% year-over-year and an incredible 126% from its low point of 5.6 just 6 months ago. Hold on to your helmets, this could get bumpy!
Well-loved. Like or Dislike:
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October 20th, 2012 at 2:14 pm 88
The fund is liquidating as it is no longer a successful business model due to the regulation changes.
No the fund is liquidating because the 2nd and 3rd mortgages they have been taking are defaulting. These funds have been advertising 9-11% “safe returns backed by real estate” for years in the paper. Its all great when prices are going up but when they come down the tiny margin they have is wiped away and they are behind the banks when it goes to foreclosure.
I expect a lot of pain for investors in second mortgages in the months and years to come and the shuttering of shops like Alpine Credit and Capital Direct.
Well-loved. Like or Dislike:
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October 20th, 2012 at 2:22 pm 89
F said no more changes.
http://www.vancouversun.com/sports/Canada+done+enough+prevent+real+estate+crash+like+Spain+Flaherty/7421917/story.html
Hot debate. What do you think?
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October 20th, 2012 at 2:33 pm 90
@Aleksey: “F said no more changes.”
http://www.vancouversun.com/sports/Canada+done+enough+prevent+real+estate+crash+like+Spain+Flaherty/7421917/story.html
Only in Vancouver would that story be filed in the Sports section!
Well-loved. Like or Dislike:
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October 20th, 2012 at 3:08 pm 91
@Arthur Fonzarelli:
It has a legal suite, is walking distance from WCE and future Evergreen.
Probably good for $2500/month total rent soon if not now. I agree, I don’t see it going under $400K.
Hot debate. What do you think?
9 
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October 20th, 2012 at 3:12 pm 92
@Ralph Cramdown:
“Canada has done enough to
slowpump its housing market andpreventensure a crash like that seen in the United States or Spain, Finance Minister Jim Flaherty said on Saturday.”Well that’s would he would have said if he was honest.
Hot debate. What do you think?
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October 20th, 2012 at 3:19 pm 93
@Arthur Fonzarelli:
If it were possible to predict prices a couple years out with any certainty, getting rich would be easy. On the other hand, if you can tell us what comparable houses rent for, we can tell you what it is worth.
Hot debate. What do you think?
14 
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October 20th, 2012 at 3:29 pm 94
Went to an open house today in vancouver, kid you not…the RE agent was fast asleep on the couch. Crickets this is getting worse than I anticipated. Lol
Well-loved. Like or Dislike:
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October 20th, 2012 at 3:52 pm 95
Anyone have money at Genus capital?
Ouch… http://www.bcsc.bc.ca/comdoc.nsf/comdoc.nsf/webpolicies/F91A395AC432CE4E882579F4005F2532?OpenDocument
Like or Dislike:
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October 20th, 2012 at 4:22 pm 96
@Anonymous:
I thought the article was remarkable in that in Vancouver, buying an $800k property *might* give you gross rental income of $2000 a month, meanwhile, New Yorkers are willing to pay $7000 a month in rent to live in such a place! Wow!!! I recently inquired about a house for rent in my hood, was previously on the market for $800k this past summer, meanwhile the guy’s trying to rent it out for $1750 (“pets welcome”-read, it’s a dump and he can’t wait to sell it to a developer to be torn down). Big difference! But of course, Vancouver is a “world-class city” I guess we just don’t have “world-class salaries” to allow people to pay $7,000 a month in rent. I would say even $2,000 a month in rent is beyond many people in this city.
Well-loved. Like or Dislike:
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October 20th, 2012 at 4:45 pm 97
Went around Granville / 16th. The project there is a real – turd. Ugly, crowded townhouses with the walls directly on top of one of the busiest intersections of YVR.
There was a brochure around this site that sparked my curiosity, as there were no pictures or a view of the overall project, only single homes in isolation and interiors … mmmm now I know why … real place is ugly (too lazy to look for the link now …)
Marketing full of lies: tranquility (?) elite (?) close to jeweleries (? who buys considering how many jeweleries are close ?) …
At a price of +1 Mill. it seems intended to be bought sight-unseen in a RE fair in Asia probably … so you feel like you’re the elite that founded YVR … Once you look away from the emotional marketing, there’s nothing of value in all YVR RE.
Well-loved. Like or Dislike:
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October 20th, 2012 at 5:14 pm 98
@patriotz: @Arthur Fonzarelli:
$400K, all else being equal.
If a persistent price decline in turn causes (for example) a reduction in the likelyhood of finding employment at or above current wages, there would be further reductions in rental value as the rental value contribution to the property price demand curve moves demand to the left.
As well, increasing interest rates (risk free rate), would tend to move the supply curve to the right as (for example) investors substitute more interest bearing instruments to replace the lower yielding rentable property investments in their portfolio. Supply moving to the right lowers prices still further.
http://www.investopedia.com/university/economics/economics3.asp
There is also a momentum effect and herd behavior in the pricing market which tends to overshoot book value. Eg: everybody finally gets the message that buying real estate is dumb, and that becomes the new fashion. So, there are fewer buyers even if owning is cheaper than renting – nobody cares anymore. See the USA. Where are all those people living now? They somehow found somewhere else to live and rows of abandoned homes have to be demolished to keep prices from going to literally to zero.
If this is a bubble pop, all else being equal is probably not a good assumption. How low? Well, you might try taking the 8 month percent decline and extrapolating by that percent discount on the new value at 8 months, 16 months, and 24 months. For example say it is 20% in 8 months. Then, using this method, it will be 36% in 16 months and 49% in 24 months.
Well-loved. Like or Dislike:
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October 20th, 2012 at 5:32 pm 99
@ pricedoutfornow
I think I read that it’s a three unit property….maybe someone can clarify further.
Like or Dislike:
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October 20th, 2012 at 5:43 pm 100
Open house around 19th and Laurel.
A tear down, smelly, moldy, all appliance and bathroom from the 1950s. Empty, but a mattress ON THE FLOOR in one room. A squatter? No. “The owners divorced, they need to sell, so their niece sleeps here now and then. She is a police officer.’ ?!?!?
It was out of this world…
Price? 1.2 million.
RE agent: “but this is only land value.”
Me: “1.2 million for the land, and still we need to pay to put the house down? This is outrageous.”
Agent:”Look, this is a good price, it used to be priced @ 1.4 million”
Me, lol: “Come on, owners need a reality check. The market is crashing, they should review they expectations, don’t you think?’
He looked stunned.
Well-loved. Like or Dislike:
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October 20th, 2012 at 5:58 pm 101
@patriotz:
Right, I would agree 400K if it is old 5-10 years and of good quality.
Like or Dislike:
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October 20th, 2012 at 6:21 pm 102
@WOWSERS: Ya gotta snap pics and post ‘em
Like or Dislike:
5 
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October 20th, 2012 at 6:29 pm 103
The previously “sold out” The Met near metrotown just launched its “sky collection”. I thought it was “Sold out” half a year ago..
NEW RELEASE COMING SOON!
Following a sold out launch of THE MET tower suites within 3 days in April, THE MET SKY COLLECTION (38/F to 40/F) is scheduled for a private release in the near future. This collection is the very last of THE MET inventory, and with only 17 residences, these suites will be gone in no time. CONTACT US NOW to book a private appointment to discuss this purchase opportunity.
Well-loved. Like or Dislike:
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October 20th, 2012 at 6:34 pm 104
Hmmm seems all buyers were at a Metrotown today buying up all condos 269 of em in a presale release, as just seen on CTV , funny one of the principles of the developer stated these people are not buying based on speculation they aren’t going to go up in value , they’re buying long term. Wtf did he individually ask all 269 suckers?
Well-loved. Like or Dislike:
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October 20th, 2012 at 6:34 pm 105
“…[BC] bureaucrat spent $70,200 on rent in Vancouver…”
http://www.cbc.ca/news/canada/british-columbia/story/2012/10/19/bc-expenses-no-receipts.html
I really enjoy the anecdotes on this forum, so I thought others would enjoy this one.
As in: Aha! Now I know where that fictitious rental demand is coming from. It’s taxpayer money. Stop it now you jerky jerks. We need civil servants, not civil masters! In this case, $70,200 would buy a lot of one night stays in hotels. Is this a “mistress suite”?
Hot debate. What do you think?
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October 20th, 2012 at 6:57 pm 106
I think with all these presales, buyers are thinking that a couple years from now they will be worth more, the flip side is existing condo sales are suffering and only getting worse. !2013 is gonna be gong show, free entertainment folks.
Hot debate. What do you think?
16 
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October 20th, 2012 at 7:35 pm 107
@No Money Down: I think those are the ones. 400 block of 16th, on the North Side because of the odd number. I remember that pricing too.
Like or Dislike:
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October 20th, 2012 at 7:47 pm 108
We went to an open house today. A Kits townhouse that has been on the market for about 18 months. That’s the last time I toured it. It got “sold” a year ago (yeah, right!) and when we went today, it was just as empty with the same fake furniture. Gosh, that was nice of the seller.
Anyway, compared to a few years ago when you couldn’t get a question answered at an open house our conversation with the agent was insane.
US: Hi
Agent: Hi, would you like a brochure?
US: No thanks, everything is on the internet.
Agent: How did you find out about this open house?
US: The internet
Agent: Oh! OK. Ha ha. Have you been looking for long?
Me: Not really. Just since I was six.
Agent: Oh! Ha ha… do you need to move soon?
US: Need? We don’t need to do anything, really.
Agent: Oh but you’re looking. Because you came to this open house and you’re looking on the internet.
US: I guess so.
Well-loved. Like or Dislike:
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October 20th, 2012 at 7:49 pm 109
@mac
459 16TH AVE W
Duplex
Considering the noise and the pollution, I would not spend more than $500 K.
For the past two months, I noticed that:
(initial asking price) x 0.5 or 0.6 = price I am willing to pay.
Hot debate. What do you think?
10 
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October 20th, 2012 at 7:57 pm 110
@G:
I perused that website and couldn’t find any detailed information about what exactly they’re calculating. Do they include 2nd mortgages?
If Canequity originates a lot of 2nd mortgages then that would have an impact on the “average” loan size.
2 1st mortgages at 400K each, with one 2nd mortgage at 100K means an “average” mortgage of 300K.
Like or Dislike:
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October 20th, 2012 at 8:01 pm 111
Business is getting vicious as South Asian realtors irritate their friends and family.
“Look at Real Estate brokers. Every second South Asian has a family member or a friend in this business. I for one have one family member and several friends who have all solicited me for business asking when I intend selling. Every time I talk with any of them, they ask if I or any of my friends are moving or want to invest in real estate. I don’t have the heart to tell them that all my friends have realtors in the family. I am so afraid to move because I’ll then be forced to choose.
One person I know wanted to sell his home, found that it would be cheaper if he sat for the real estate exam and sell his own house and in the future soak up some business from his large family and friend circle as a part-time business. Recently he gave me his visiting card and I now have 51 cards from realtors. From what I hear, South Asian realtors are undercutting big time, reducing their own commissions in order to keep the business and with so many around and not enough business to pursue the job of a real estate agent full-time with the result, a significant number of South Asian agents have day jobs and show clients around evenings and weekends.”
http://canindia.com/2012/10/immigrants-working-for-less-delivering-less/
Well-loved. Like or Dislike:
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October 20th, 2012 at 8:29 pm 112
@Anonymous:
Re: 3 units, you’re right, my bad! I thought it said 3 bedroom. That’s what you get for reading while holding a fussy baby!
Still, shows you once again how bad the investment value is in Vancouver, compared with the US, even NYC for god’s sakes!
Hot debate. What do you think?
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October 20th, 2012 at 9:27 pm 113
Look at this patch of reds in the burnaby south attached:
http://byron.livefraservalley.ca/results.aspx?rid=320703659
Notably, 7478 Byrnepark Walk #421 has had price drops of $100k+
Hot debate. What do you think?
12 
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October 20th, 2012 at 10:13 pm 114
#84 @Arthur Fonzarelli: “Curious what some of you guys think is reasonable value for place like this over next 2-3 year”
http://www.realtor.ca/propertyDetails.aspx?propertyId=12515092&PidKey=1733079134
For me it’s getting increasingly difficult to say what the expected scenario should be. Should we compare ourselves to the US? Then 400k makes sense if rents aren’t going to fall. But Canada’s bubble is by any measure larger than the American one, and it seems like the median family here is more economically compromised simply because of how long this has dragged on. Our economy is much more reliant on commodities and China’s bubble than anyone would care to admit.
Question, what happens to Canadian house prices if:
a) Michael Pettis’ prediction comes true:
http://www.mpettis.com/2012/09/16/by-2015-hard-commodity-prices-will-have-collapsed/
b) The China bubble blows up
http://www.alsosprachanalyst.com/special/china-economy-hard-landing-and-life-after
c) Canadian banks curtail credit, having underestimated the problem
http://www.theeconomicanalyst.com/content/vancouver-housing-full-correction-mode-implications-canadian-banks
d) Canadian municipalities raise property taxes in line with their long term obligations, as developer fees vanish.
For young people who will be asked to pay for it all, I think that house looks a lot more like a liability than an asset.
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October 20th, 2012 at 10:54 pm 115
@pricedoutfornow:
I moved here from Brooklyn and I would bet you dimes to dollars that the brownstone in question includes three rental units (one per floor), which rent for a combined $7K. That would be pretty typical for the neighborhood.
Hot debate. What do you think?
19 
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October 20th, 2012 at 11:27 pm 116
The Developing Canadian Housing Crisis
An interesting quote from Mark Carney below. First he acknowledges the ‘bubble’. Second his goal is to deflate it and raising interest rates to do so is not off the table. If the recent changes don’t do it more tightening to come. The end is nigh.
http://moneytalks.net/pdfs/housingcrisis.pdf
Hot debate. What do you think?
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October 20th, 2012 at 11:48 pm 117
@Anonymous:
In this economic environment, there is simply no room to raise interest rates prior to the US doing so. But killing this RE bubble is easy: 20% down payments and no more HELOCs and it’s slaughtered.
Well-loved. Like or Dislike:
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October 21st, 2012 at 3:33 am 118
@oneangryslav2: I’m watching M2, and it’s “bubble on”:
http://credit.bankofcanada.ca/monetaryaggregates
Hot debate. What do you think?
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October 21st, 2012 at 9:57 am 119
@Patiently Waiting: Pradip Rodrigues is not representative of the South Asian community in Vancouver. For one thing, he lives in Toronto. A second think you’ll notice is his last name – Rodrigues. He is from Bombay, where as the vast majority of South Asians in the lower mainland are from Punjab region.
Hot debate. What do you think?
5 
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October 21st, 2012 at 10:17 am 120
@Aaaah:
“Pradip Rodrigues is not representative of the South Asian community in Vancouver.”
Representative in what sense? Ethnically, which seems to be what you’re concerned about, no. In the sense of trying to make a fast buck out of RE, I would say very much so, given a sampling of the realtors’ names you can see on For Sale signs, advertising, and the MLS.
Hot debate. What do you think?
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October 21st, 2012 at 10:22 am 121
oneangryslav2 Says:
October 20th, 2012 at 11:48 pm
“But killing this RE bubble is easy: 20% down payments and no more HELOCs and it’s slaughtered”
—————————————
Why stop at 20%?
Go to 25% minimum down payments and have CMHC reduce the maximum insurance from $1 million down to $500,000.
Hot debate. What do you think?
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October 21st, 2012 at 10:42 am 122
@Patiently Waiting: That explains why I received unsolicited pitches from two different source this week. Not r t r ds themselves, but helping a friend or relative, probably. Pitch: “Hey, I just found out there is this property near my house, a real bargain at $….. (exact list price), won’t last long, there aren’t many like it, a must see. I though you may be interested, should definitely take a look.” Reality: overpriced crap.
Very suspicious, same timing, almost same pitch and sudden interest in finding RE for me. I guess is not my welfare they’re concerned about.
Hot debate. What do you think?
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October 21st, 2012 at 11:03 am 123
Does PREC mean prick in the RE biz cause I sure thinks there’s correlation!
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October 21st, 2012 at 11:05 am 124
@patriotz: Yes, you could remove “South Asian” and replace it with any other ethnic group. Ethnic groups, religious affiliations and extended families play a huge role in real estate bubbles. This was also discovered in the 2007-2009 American bubble blogs.
Hot debate. What do you think?
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October 21st, 2012 at 11:10 am 125
@rp1
Hard to tell without seeing the location and condition.
I would say I would pay in the $200-$250k range.
If the location is really nice, may be $300.
Still half the price they are asking for…
The house I am renting is worth 1.2 million (land value only).
I would not pay $600,000 for this house since it needs major work in the foundations.
It is hard to estimate a house price without knowing the details.
Like or Dislike:
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October 21st, 2012 at 11:27 am 126
@Jack: “Go to 25% minimum down payments”
The banks will already lend with 20% down so the government has not control after that. Going to 20% simply eliminates CMHC insurance.
Like or Dislike:
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October 21st, 2012 at 11:29 am 127
@Patiently Waiting: “Ethnic groups, religious affiliations and extended families play a huge role in real estate bubbles.”
In other words people drive real estate bubbles.
Hot debate. What do you think?
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October 21st, 2012 at 11:34 am 128
For the first time in 30 years, Surrey school enrollment dropped as 267 less students showed up than expected.
http://www.surreyleader.com/news/175006171.html
A Sun story says anecdotes indicate the drop maybe a combination of fewer refugee landings and people leaving for Alberta.
As Pradip Rodrigues said, competition is now so intense that even new immigrants are finding it impossible to make ends meet. In Toronto and Vancouver, incomes have been driven way down in low skill occupations like delivery driving and used house selling. Immigrants are now going to the Prairies where jobs pay well and family housing is still within grasp.
Hot debate. What do you think?
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October 21st, 2012 at 11:41 am 129
Check out these price drops on Burnaby Mountain:
http://vancouver.en.craigslist.ca/bnc/reb/3354545981.html
1 Bedroom 505sf Original Price $269,900 Now $239,900 ($30000 Incentive)
1 Bedroom + Den 631sf Original Price $324,900 Now $276,900 ($48000 Incentive)
1 Bedroom + Den 665sf Original Price $342,900 Now $279,900 ($63000 Incentive)
2 Bedroom + Den 785sf Original Price $428,900 Now $374,900 ($54000 Incentive)
Well-loved. Like or Dislike:
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October 21st, 2012 at 12:00 pm 130
125 Anonymous Says:
October 21st, 2012 at 11:27 am
@Jack: “Go to 25% minimum down payments”
The banks will already lend with 20% down so the government has not control after that. Going to 20% simply eliminates CMHC insurance
————————————
“Go to 25% minimum down payments AND have CMHC reduce the maximum insurance from $1 million down to $500,000″
I was suggesting to also reduce max price of home from $1 million down to $500,000. This will take the risk out of the government (and taxpayers) and we can see if banks would like to take mortgage risk on their own. I notice some houses previously listed over $1 million are now listed at $999,000 or lower.
Hot debate. What do you think?
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October 21st, 2012 at 12:26 pm 131
@Jack: “I was suggesting to also reduce max price of home from $1 million down to $500,000.”
If you have 20% down CMHC insurance is not required no matter what the price.
Hot debate. What do you think?
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October 21st, 2012 at 12:26 pm 132
According to the chinese news website. Station Square was sold out in a few hours yesterday.
http://van.worldjournal.com/view/full_van/20565518/article-Station-Square%E9%A6%96%E5%B9%A2-%E6%95%B8%E5%B0%8F%E6%99%82%E5%94%AE%E7%BD%84?instance=bc_bull_left1#.UIQ-qq5eS5t.facebook
Like or Dislike:
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October 21st, 2012 at 12:28 pm 133
@Anonymous: Its about how they are influenced. The use of familarity and trust, along with social pressure, within tight-knit communities.
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October 21st, 2012 at 1:46 pm 134
@Jack:
Ultimately the risk comes from giving loans to people who would not be deemed credit worthy without the CMHC. I think any cap needs to be in relative terms, for example no CMHC insurance over a price to income ratio of 4. After all, if 5 is considered extremely unaffordable then 4 is still pushing it by traditional measures. Go ahead and insure someone for $1million, I don’t even care if they only have 5% down. They just had better make at least $250k/year (consistently) and be able/willing to prove it.
Hot debate. What do you think?
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October 21st, 2012 at 1:48 pm 135
Blog Dogs,
I was in the suburbs yesterday, where I sold a house four years ago…prices (asking) are 30% higher than when I sold (guess I sold too early)…prices make NO SENSE….things are not moving, the ask prices are high, and I imagine now with the new lending criteria, sheeple just don’t have the debt availability to hit the ask.
I think prices will (at a minimum) fall back to where they were four years ago (when they seemed high to me), and this will deflate egos and balance sheets alike.
I do think it’s underway, I do think we’ll see 19,000 (from PaulB), and I do think this market continues to take body shots.
I love rain on the weekends these days….I imagine that open house traffic is way way down.
Hopefully the realtors are offering cleaning services while they sit there and otherwise twiddle their thumbs….I also guess that the slight uptick in sales (which I’ve been expecting, as I bet prices are falling) are more in condos than SFH (can anyone shed any light on this, as it’s just a guess – thanks).
Hot debate. What do you think?
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October 21st, 2012 at 1:56 pm 136
@Anonymous:
“If you have 20% down CMHC insurance is not required no matter what the price.”
Not by the government. But the banks can require it, or demand a larger down payment. Which they are already doing in markets which they consider to be on the way down.
Hot debate. What do you think?
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October 21st, 2012 at 1:57 pm 137
@Patiently Waiting:
Goes for us palefaces too. Who do they get to sell all those timeshares in Mexico and the Caribbean?
Hot debate. What do you think?
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October 21st, 2012 at 2:22 pm 138
@G: re: Station Square sold out.
Google Translate Excerpt:
“…many Chinese residents, Saya Di said, building a 40-story apartment building, there will be no marked 4,13,14,24,34 floor, and other ethnic Chinese considered unlucky number of layers, so the actual 35-storey, completion in the fall of 2015.”
—
All lucky layers! Cannot lose! Completion year 2015, not the unlucky 2014!
Sellout is not surprising considering that “CMHC Gaming” is still giving highly favorable credit of 5-10 times funds on hand. Macau Baccarat casinos give only credit equal to funds on deposit in the gamblers bank. CMHC Gaming is now the preferred venue.
http://www.google.ca/search?q=chinese+gambling+fascination
Hot debate. What do you think?
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October 21st, 2012 at 2:26 pm 139
Hmmm…
Another condo project ‘sells out”
“Big Metrotown condo development sells out”
http://bc.ctvnews.ca/big-metrotown-condo-development-sells-out-1.1004146
Anthem/Beedie had been pushing Station Square big time in the local Chinese language media. Then again, it’s hard to know what ‘sells out’ really means.
Hot debate. What do you think?
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October 21st, 2012 at 2:37 pm 140
Anthem got rezoning approval for Station Square back in June 2011. They may have been signing pre-sale contracts since then (maybe even before), as this is common marketing practice. Many of those ‘buyers’ may have signed on before the ‘soft market’ made the news this spring.
Then again, perhaps Anthem cut it’s prices. I didn’t see any prices mentioned.
Hot debate. What do you think?
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October 21st, 2012 at 3:19 pm 141
It has been interesting to hear the various thoughts as to what the next tightening could be. I think we could use more tightening and think that the reduction of the CMHC mortgage insurance to a lower amount would be the best next step. I would go for $750,000. That’s still a serious amount of money but it would really take the liquidity out of the Vancouver market until the prices revert. As for maximum Loan:Value for non-cmhc- I think that 20% is fine. To really see where the market is however, we should reduce the maximum CMHC loan value to a lower amount.
However – Looks like Conservatives have stopped tightening as if they do it again, it will be too close to the next election.
What can you do really? We have a credit fueled market. Credit has to be reigned in to keep the value increases in check or to reduce them.
Hot debate. What do you think?
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October 21st, 2012 at 3:46 pm 142
“As Pradip Rodrigues said, competition is now so intense that even new immigrants are finding it impossible to make ends meet.”
Stats Canada has long considered immigrants among the poorest people in the country, along with single mothers. Rich immigrants are the exception.
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October 21st, 2012 at 3:47 pm 143
@Anonymous:
“Stats Canada has long considered immigrants among the poorest people in the country, along with single mothers. Rich immigrants are the exception.”
Not to Stats Canada.
Hot debate. What do you think?
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October 21st, 2012 at 6:12 pm 144
Talking to Vancouver house builder today, says we’ll still make $ on the house set to complete this Dec, asked if they are looking to build another…. Nope prices are headed lower it will be a few years before it makes cents. This coming truthfully from an honest friend.
Hot debate. What do you think?
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October 21st, 2012 at 6:40 pm 145
@patriotz:
“The earnings gap between recent immigrants and Canadian-born workers has increased since 1980, when men who were recent immigrants and had some employment income earned 85 cents for each dollar earned by Canadian-born men. By 2000, this earnings ratio had fallen to 67 cents, and by 2005 it was 63 cents. A similar trend has been seen among recent immigrant women, who by 2005 were earning 56 cents for every dollar earned by Canadian-born women. This earnings disparity was larger between recent immigrants and Canadian-born workers with university degrees.(97)”
Hot debate. What do you think?
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October 21st, 2012 at 6:48 pm 146
Saw a tidbit in the news today about anonymous institutional investors are getting turned off by Canada’s rejection of Petronas, BHP, and CNOOC takeovers.
Man this might actually be good as it’ll lower the demand for our dollar and let Carney raise interest rates without killing industry.
And seriously, international hedge funds want to buy our industries, how does that benefit us long term?
Hot debate. What do you think?
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October 21st, 2012 at 7:55 pm 147
Hidden due to low comment rating. Click here to see.
Poorly-rated. Like or Dislike:
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October 21st, 2012 at 8:08 pm 148
“our industries”: Do you own any of the company? If not, why would you think you have any say in the matter? Because you live in the country where the company is domiciled? You want to own a Canadian company, then buy it…
Hot debate. What do you think?
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October 21st, 2012 at 8:18 pm 149
I do own shares of Encana, Enbridge, and Nexen. So you could technically say that I own some of the companies that is being affected.
Of course I’ll benefit if the government allows the take over. I’m not interested in short term gain though.
Hot debate. What do you think?
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October 21st, 2012 at 9:38 pm 150
Any idea if sky-train helps the values? I’ve got a 2 bdrm unit that’s close to upcoming evergreen line station in Coquitlam, can’t decide if too sell it now or wait till 2014?
Seeing how there is bunch of 80′s units around locheed station under $200k something tells me sky-train doesn’t make much positive effect on values.
Like or Dislike:
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October 21st, 2012 at 10:18 pm 151
@Jack:
There is some sense to allowing smaller down payments of, for example, 10% for FTBs, but a max insured amount of 500 K, or even as low as 300 K, would not be unreasonable. That would cover FTBs making sensible purchases. It is ridiculous for a person to claim that, at the same time: they are in a position where buying a million dollar house makes sense; and they need government help to get the financing.
Like or Dislike:
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October 21st, 2012 at 11:06 pm 152
A friend was at the Station Square grand opening around 4PM and was told that the 1BR + 2BRs were “sold out” and only Studios & Penthouses were available. He was given a brochure but they would not give him the pricing on the remaining units. Needless to say, he did not believe that they were actually sold out and they were likely holding back units to “release” at a later date.
Hot debate. What do you think?
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October 22nd, 2012 at 3:55 am 153
@Tommy:
“Any idea if sky-train helps the values? ”
The massive bust of the early 80′s took place just after the first SkyTrain line was announced. The areas along the route took just as big a hit as anywhere else.
Yes SkyTrain does tend to increase values, but that has already been priced in today. That is, properties along the Evergreen line are already 10-20% (or whatever) higher than elsewhere, and if prices fall elsewhere, they will fall too. Maybe even more.
Like or Dislike:
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October 22nd, 2012 at 9:28 am 154
@Tommy:
It’s “Lougheed” NOT “locheed”.
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