FFFA! debt! sales! developers! buyers! $350k!

It’s that time of the week again!  Lets round up the recent news links and have our open topic chat thread for the weekend.  Here are few recent links to kick things off:

BC overboard in debt
Conditions favor buyers
Fewer hoops for developers
What $350k gets you
Teranet index is out
MOI / price change update
Bottom Calls!
Transit drives condo demand
Skytrain spread poverty
Fleeing debt for Canada
CMHC Tweets!
Island sales steady

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

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patriotz
Member

@Con-Rad:
” If you are making life choices based on prices correcting in 3-4 years ”

What life choices, apart from buying a dog? You seem to hold the common attitude that renting is somehow putting your life on hold. Well it isn’t.

I don’t regard buying a house as a life choice, but an investment choice like buying a stock. Whether I buy or rent doesn’t affect my lifestyle at all, except that renting is cheaper.

patriotz
Member

@RaggedyRenter:
“I was referring to the CMHC mortgage rule changes over the years and how it affects how much money you can borrow.”

Yes I know you were. The point is that ultimately the market always wins over government intervention in the market.

Extend and Pretend
Guest
Extend and Pretend

http://www.theglobeandmail.com/news/news-video/video-chinese-highway-built-around-a-house/article5587125/

I wish Canadian Government officials had the same level of concern about the national debt impact of unbooked mortgage insurance obligations as Chinese officials do about the rights of these particular home owners!

Extend and Pretend
Guest
Extend and Pretend

@RaggedyRenter: re: “…a spouse or partner with who you are going to settle down with. If they or you have unrealistic expectations…”

Ding ding ding! Right on the nose. People need to figure out if they think they are above average, they are probably below average. If you think you are something special, you are probably are NOT. If you’ve somehow shacked up with somebody who is obviously out of your league on the promise of your “above average” marketing materials, then be prepared for a let down!

The Government doesn’t owe you the keys to a dream home because you think you’re special and you’ve tricked somebody more attractive than you deserve into believing the same lie.

Con-Rad
Guest
Con-Rad
@RaggedyRenter: But that’s the thing raggedy renterbear, even with a large dp there is going to be some capitulation compared to other investments if this low rate thingy persists. Say you are saving and have an investment option returning 7% in the long run. If rates stay low for an extended period that could mean prices are elevated due to lower wacc. I will either never buy property because it returns a measly 5% with future rate risk or I say F&$& it and buy for personal reasons knowing I am losing 2% long term. This is a potential reality for an extended period. Even cash only buyers are knowingly throwing money into the toilet. This is in part what negative real interest rates means. Maybe I can look at it another way, going back to a Jesse comment. How… Read more »
RaggedyRenter
Guest
RaggedyRenter
@Con-Rad: “As for bears. If you are making life choices based on prices correcting in 3-4 years, just be prepared that one of this blog’s best commenters said that the bottom may not be in for some time. He didn’t mention Vancouver, he was referring to Canada in general. Maybe Vancouver will “crash” but the argument is that low rates can keep prices higher for longer than high rates would. That does not bode well for those looking for bargain basement discounts. I’m trying to be realistic and I hope bears realize how long a time a correction might take. This is for your benefit, especially if you have a spouse or partner with who you are going to settle down with. If they or you have unrealistic expectations on when prices will be low enough for you to buy… Read more »
Anonymous
Guest
Anonymous

@ con rad

the houses i am following are currently dropping their prices by 30 000 dollars now and then. this is one year of rent. so, yes, i can wait a very long time…

Extend and Pretend
Guest
Extend and Pretend
@GNFINGR: re: “South Surrey today” The sellers should try something more realistic like $288K, the practical value of a small new house in the middle of nowhere. OR, they could offer to bury gold bars under the small patch of lawn to make up the difference between practical value and CMHCasino chips value. The real question to ask is how much the same house costs in WA within a similar suburban neighborhood. If that’s not the real question then, then why not pay $1788K? It’s the Government’s money after all, right? Everyone is entitled home ownership at any price, so why not? In related news Canadian National Debt Hits $600B $1.2 Trillion It’s actually $1.2 trillion after you add (properly) the $600B CMHC insurance obligations for all the overpayed home purchases like those stupidly overpiced Surrey homes. I’ve no doubt… Read more »
rp1
Guest
rp1

#13 @mac: “Rosie not uberbearish on housing:”

Well that settles it. Name one call he’s gotten right in the last 3 years.

GNFINGR
Guest
GNFINGR
We were in South Surrey today, and stopped in at a new development of single detached homes in Elgin along 32nd ave. The first place we looked at had just been reduced from 818k to 788k. Nice, but no yard. When I explained we didnt like it because of the lack of yard and that we were going to look at another place she went on about making sure to lowball. She said she was trying to get the developer to reduce the place to 750, and when I asked if they would accept 700 she seemed to hint they might. She carried on that she had no idea how low prices were going to go! Seemed genuinely concerned. Next place we visited was previously listed at 860, just had price changed to 899 to include HST. The realtor at… Read more »
WantToBuySoonBut
Guest
WantToBuySoonBut

read yattermatters today, Camfruckmeyer has some interesting bullshit comments.

Confucius
Guest
Confucius

@Con-Rad: @Con-Rad:

I’m sorry to hear that a crash would hurt you. As bears should make plans for all scenarios, you should plans for a crash as well. The market will always come back, maybe you could plan to make it through some lean years, or think about different careers.

WantToBuySoonBut
Guest
WantToBuySoonBut

Looks like the scumsucking realtors will have to start begging the sellers to hit the bid soon!

It will be an ugly winter. Prices will fall more.

Spring will be a shitshow.

Con-Rad
Guest
Con-Rad
@N: No it’s not a “crash”. My business is related to housing transactions. A “crash” will cut transactions to a point where I will miss my payments. I will be forced onto EI. Those are the facts. A 5% drop per year like this year is manageable for me. Not great but it’s not curtains. As for bears. If you are making life choices based on prices correcting in 3-4 years, just be prepared that one of this blog’s best commenters said that the bottom may not be in for some time. He didn’t mention Vancouver, he was referring to Canada in general. Maybe Vancouver will “crash” but the argument is that low rates can keep prices higher for longer than high rates would. That does not bode well for those looking for bargain basement discounts. I’m trying to be… Read more »
RaggedyRenter
Guest
RaggedyRenter

@patriotz:
I was referring to the CMHC mortgage rule changes over the years and how it affects how much money you can borrow.

Anonymous
Guest
Anonymous

@vanpire Winnipeg as appreciated even more than Vancouver in relative terms. Owning is now way more expensive than renting even in that windy cold city.

patriotz
Member

@RaggedyRenter:
” I told her politely that ultimately the government gets to decide how much you can borrow via rules and regulation.”

No ultimately the market does, and that also goes for how much governments themselves can borrow.

patriotz
Member

@RealityCheck:
“Inflation helps those with debts.”

Those who have debts AND have interest rates locked in long term AND have salaries that keep up with inflation.

VHB
Member
VHB

Thanks to PaulB for the daily numbers. I split Friday’s double-reporting into Thursday/Friday by simply cutting the sales and listings in half.

Here is how things are shaping up for November:

Nov-2012	
Total days	21
Days elapsed so far	15
Weekends / holidays	7
Days missing	1
Days remaining	5
7 Calendar Day Moving Average: Sales	84
7 Calendar Day Moving Average: Listings	111
SALES	
Sales so far	1247
Projection for rest of month (using 7day MA)	503
Projected month end total	1750
NEW LISTINGS	
Listings so far	2027
Projection for rest of month (using 7day MA)	667
Projected month end total	2694
Sell-list so far	61.5%
Projected month-end sell-list	64.9%
MONTHS OF INVENTORY	
Inventory as of November 23, 2012	17117
Current MoI at this sales pace	9.78

Here are November norms:

year	sell	list	sell/list
2001	2614	2697	96.9%
2002	2555	2638	96.9%
2003	3018	2955	102.1%
2004	2486	3234	76.9%
2005	2938	3271	89.8%
2006	2358	3168	74.4%
2007	2883	3377	85.4%
2008	874	3022	28.9%
2009	3083	3653	84.4%
2010	2509	3030	82.8%
2011	2360	3222	73.2%
Mean	2516	3115	80.8%
median	2555	3168	84.9%

Lest anyone be deluded, 1750 sales and a 65% sell-list are brutal numbers for November. In my PCS, the only stuff that is selling is the deeply discounted stuff. Should start turning up in the HPI soon.

RaggedyRenter
Guest
RaggedyRenter
News from the playground. None of my friends are having a good time with their RE purchase. One is trying to sell to move to a bigger house but the market is so soft he’d lose money from his pre-2008 crash purchase. He’d probably lose about 10% in commission and sale price, but he came in with 25% equity (parent’s). I advised him to sell and rent but he won’t “give asset away to pay for someone else’s mortgage”. Three put their condos on the market, withdrew them after 2-3 months due to no interest at a break-even price and are waiting to sell next year “when the market recovers”. Another bought and rented away her apartment in Surrey. Same unit in the building was featured recently in Vancouver Price Drop. LOL. One is leaving Vancouver to another province but… Read more »
Many Franks
Guest
Active Member
Many Franks

My last comment got hung up in moderation. But since he’s green-lighted ad hominem argumentation, I wanted to point out the remarkable similarity between Cameron Muir and world gurning champion Tommy Mattinson.

N
Guest
N

@Con-Rad:

“What I’m hearing from you is that persistently low rates will engineer a “landing” with prices falling by no more than 10% per year, and likely less.”

Over any more than two years, prices dropping 10% per year is not a landing it’s a crash. Look at the US data. It didn’t happen over night, it just seems that way because it wasn’t getting media attention until prices were already a long way down.

RealityCheck
Guest
RealityCheck

Vote Down facts:

Todays 25 yr term — 14.5% paid off at 3% rate.
——————— 15.3% paid off at 2.5% rate.

Lets make one thing clear. I’m not a pumper or associated with the RE industry in any way.

Just came to a realization that anyone who took the advice to buy before 2009 (buy or or never)…will laugh away the rest of their lives. Why? Because of inflation.

Inflation helps those with debts. Even at 3% annual rate, the adjusted for inflation mortgage debt gets cut by 1/3rd in 13.5 years, even if you don’t pay down any mortgage principal.

For those with 40 year mortgages taken out in 2006, there may be a silver lining. They keep pushing back their debt…”inflating it away”.

N
Guest
N

@patriotz:

That was my point, but interest rates are low in absolute terms, which is what people look at.

Vote Down The Facts
Guest
Vote Down The Facts

@RealityCheck: “After a 5 year fixed term, approximately 15% of the mortgage balance is paid off.”

It depends on the amortization.