FFFA! Bulls, bears & banter. Farewell 2012!

Hey, it’s not only the end of another week, we’re also heading into the end of the year! 2012 was an interesting time for Vancouver real estate as it peaked and sputtered, ending the year with prices and sales volume down. What does 2013 have in store? We’re going to find out soon!

Lets do our regular end of the week news round up post and open topic discussion thread.. and post any suggestions you have for year end topics in the comments here.

And now some recent news links to kick off the chat:

–The state of mortgage insurers
–The last private insurer
–Regulator targets bank risk in 2013
–The fight for deposits
–LePoidevin / Rabidoux talk video
–Down is the new flat
–Drivers licenses are too easy to get
–Computers get house prices wrong
–US: worst holiday sales since ’08

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

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Guest

painted turtle

3 years 8 months ago

http://business.financialpost.com/2012/12/27/dear-first-time-homebuyer-ottawa-wants-you-to-tread-carefully/?__lsa=3e81-40eb

Dear first-time homebuyer: Ottawa wants you to tread carefully
Your government is increasingly worried about you getting into the housing market, if you haven’t figured it out by now.

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Makaya

3 years 8 months ago

Bulls can rest assured, the market is not going to crash… Why the housing market won’t crash in 2013 The 12-month change in the Teranet-National Bank House Price Index has decelerated in recent months to 3.4 per cent, led by declines in Vancouver (-1.4 per cent) and Victoria (-1.7 per cent). Some people interpret this weakness as a sign that a housing crash has started – see, for example, the Canadian Business article “Canada’s housing crash begins.” I don’t see a collapse in 2013 for several reasons. One is the highly supportive monetary environment. I will spare you the rest… Read more »

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patriotz

3 years 8 months ago

They (the federal government) simply wanted to avoid setting up a scenario where they were an accessory to a crime, if you will, by enticing the unsophisticated or younger home buyer into a large asset purchase where if interest rates rose they could not meet their obligations,” said Mr. Soper Sort of sums up the article. Of course the federal government has been doing exactly what Mr. Soper claims it now wants to “avoid”. This article is just another in a series from the FP which pretends that the Cons are acting to “prevent” a bubble when they created it… Read more »

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Anonymous

3 years 8 months ago

….which pretends that the Cons are acting to “prevent” a bubble when they created it in the first place….

Yes, if only we had a good NDP government; they would have done things differently. Barf.

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Member

specialfx3000

3 years 8 months ago

Farewell 2012 as we welcome 2013 and the new assessments shortly. Things will get interesting as I have read quite a bit recently around selling x percent below assessment vs. the often absurd asking price. So, imagine a west side house that is currently assessed at $4M. With the recent slump, similar houses likely would have been sold recently in the $3.2 to 3.5M range. Now when new assessments come out, will this house be assessed at around $3.4M? With high inventory and low sales likely to continue, sellers will need to up their game, or lower their prices to… Read more »

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Anonymous

3 years 8 months ago

2004-2012 marked 8 years of bears being silly …and counting. Happy 2013 and may the new year bring you back from dreaming to reality. Another 4% rent increase is in the book unless you are locked in or having generous landlords.

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yvrness

3 years 8 months ago

specialfx: assesments are done in the middle of the year, which means they’ll be higher than current selling prices. Basically anything that sells now will be ‘below assessed value!’.

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UBC in Crisis Mode

3 years 8 months ago

specialfx3000 Says:
“With buyers bringing their freshly printed assessment numbers to the open house and offering 20% lower (or worse), we’re now at the 2.8M range.”

The problem is that there are very few buyers who can afford 2 M price, Yes, compared to 4 M it is a bargain. Unless more foreign buyers with ship load of cash (Not going to happen) come ashore, Vancouver’s housing market will crash.

Repeat: there is no soft landing. crash = hard landing

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Member

specialfx3000

3 years 8 months ago

thanks yvrness, I didn’t know that.

Nonetheless, the next assessment will likely be lower than the previous one and with assessment being the starting price to that many people are working from, right off the bat, the price will dropped.

Over the 10 years or so, each year’s increase in assessment had helped the roller coaster ramp upwards; well it’ll be just as effective on it’s way down.

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Anonymous

3 years 8 months ago

Re. #2

“Lol”? That’s your argument?

http://www.youtube.com/watch?v=NJjZ7Z05f5c

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gokou3

3 years 8 months ago

Re: #9 specialfx3000

I am not sure if the coming assessment values will be considerably lower than the current one. Like someone else mentioned, the assessments were done back in July. Even though the market was already weak, I don’t think it was showing broad yoy declines yet. I think assessment value trends generally lag the market. OTOH, the values shown in Jan. 2014 will probably show considerable decline.

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Many Franks

3 years 8 months ago

@Makaya: More from Larry MacDonald e.g. here, where he tut-tuts all of the concern about demographics and housing by finding and bludgeoning a false dilemma to death.

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Member

Ray

3 years 8 months ago

Five mortgage market predictions for 2013

http://www.theglobeandmail.com/globe-investor/personal-finance/mortgages/five-mortgage-market-predictions-for-2013/article6198466/

I agree with them all, except that rents will increase. With no capital gains expectation, those holding empty their investment property will certainly start to rent — increased supply. And for every new renter that was foreclosed on, there is always a bank-owned house left sitting. Sure, the bank might hold it in shadow inventory like the USA, but that can only go on for so long.

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Dumbest time in 30 years to buy RE

3 years 8 months ago

This market does not need excuses like assessment to drive it down. It will do so all on it’s own, thank you very much. We have never had more negative warnings from respected ecomomists (sorry Tsur), not even in 2008. Downsizing boomers will be anxious to bail before it’s too late, and it will take a long time for China money to go anywhere near BC. Bargains in the US would look much more appealing for any dwindling spare cash from Asia. Nor will continued rates be able to save the market, and god help first timers who got sucked… Read more »

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Crikey

3 years 8 months ago

No, the 2013 assessment will not reflect current markets conditions. Current market sentiment, fall in sale prices, was barely getting started in July 2012. Also, Makaya paraphrased: #1: “Monetary policies are hyper-expansionary, with interest rates at record lows and printing presses running like never before.” #2:”with so much monetary stimulus in the system, the price-to-income ratio should also be normalized by income increases.” Low interest rates and income increases essentially have a lot of difficulty co-existing. If everybody’s incomes increase measurably, many prices will go up to compensate. That means inflation. And how does the goverment fight inflation? By raising… Read more »

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painted turtle

3 years 8 months ago

Think twice before buying cheap decorations:
http://www.huffingtonpost.co.uk/2012/12/27/chinese-forced-labour-halloween-julie-keith_n_2370175.html?ncid=GEP

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VMD

3 years 8 months ago

New proposed regulatory changes to Canada’s international students program announced today.
http://www.cic.gc.ca/english/department/media/releases/2012/2012-12-28.asp?utm_source=bitly-eng&utm_medium=twitter&utm_campaign=generic
#1. Limit study permits to students attending designated institutions.
#2. Can work part-time off-campus
#3. CIC to have authority to verify current enrollment. (“Intent to study” no longer sufficient)

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patriotz

3 years 8 months ago

“there is always a bank-owned house left sitting. Sure, the bank might hold it in shadow inventory like the USA”

Nope, the incentive for the banks in Canada is to do the opposite. They have to sell the properties before they can make a claim to CMHC to get their principal back.

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Yalie

3 years 8 months ago

Nope, the incentive for the banks in Canada is to do the opposite. They have to sell the properties before they can make a claim to CMHC to get their principal back. And they’ve already demonstrated a willingness to drop prices aggressively to do just that. Have a look at “#2” on the Vancouver price drop blog: https://vancouverpricedrop.wordpress.com/2012/11/27/the-weekly-drop-november-26-2012/ This bank-owned property has been reducing its price by about 20k exactly once a month. They want to look like they’re making a best effort to get “market price”, while also making sure they hit the bid as soon as possible. I… Read more »

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HAM Solo

3 years 8 months ago

New Years wishes for 2013: 1 (For OSFI) Please make this the year when you stop being cheerleaders for ponzi schemes and start opening up the covers on the country’s shameless and seriously undercapitalized shadow-banking system. 2. (For the Minister of Finance) Tellingly, you asked recently whether the government should be in the business of guaranteeing repayment of bank loans. Make this year count, F, and make banks be banks rather than government subsidized loan brokers. 3. (For RE Pumpers) It’s time to melt into little oil slicks, but be ready to return in 100 years. 4. (For the great… Read more »

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HAM Solo

3 years 8 months ago

BTW, I didn’t add that hyperlink to the consumer credit site. I’ve been hacked.

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oneangryslav2

3 years 8 months ago

I would like to run some simulations, under a series of varying accompanying conditions, projecting the potential trajectory of sales, listings, and prices for greater Vancouver (broken down by municipality). In order to do so, I would like to have data such as those that can be found in the data tables of the monthly REBGV reports (see the link below) in an Excel (or txt) file. Before I start compiling the data myself, I wonder if there is somebody (or somebodies) already compiling a file of this type.

TIA

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oneangryslav2

3 years 8 months ago

Quick trigger finger. Here’s the link: http://www.hellovancity.com/wp-content/uploads/2012/12/REBGV-Stats-November-2012.pdf

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Author

admin

3 years 8 months ago

HamSolo: What link to a consumer credit site are you talking about? I only see the two posts from you in this thread and I see no link to any sites in them.

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Anonymous

3 years 8 months ago

….Think twice before buying cheap decorations:….

Shouldn’t we be buying more cheap decorations to help these folks get their notes out?

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HAM Solo

3 years 8 months ago

@ admin

The word “loan” near the end of pt. 2 in the post shows up as hyperlinked text on my PC. Sends me to a no-problemo auto loan site. Might just relate to gremlins on my PC as opposed to VCI.

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Guest

Bull! Bull! Bull!

3 years 8 months ago

Once again VMD delivers real info to the blog. His info puts to shame the arm chair economic commentary and pretty but useless graphs some think pass for real info.

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Author

admin

3 years 8 months ago

HamSolo: I don’t see it here, but if anyone else sees it let us know. you might want to run a virus check on your computer.

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Guest

yvrness

3 years 8 months ago

What’s going on over at http://vancouverpeak.com ? I see there’s a new forum there now – any news?

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Member

VMD

3 years 8 months ago

@bull #27
Time for my own armchair predictions for today’s stats:
Sales 40-50. Yesterdays jump in sales probably has something to do with realtors/MLS staff taking Dec 24-26 off, only to post all sales since last weekend on MLS yesterday.

1 more business day until listings floodgates open in 2013!

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Crasher

3 years 8 months ago

Just finished watching BNN Market Call Tonight with James Hodgins. He’s the chief investment officer with Curvature Hedge Strategies. He thinks the overall canadian real estate market will drop 20% to 30%, but he expects a 40% drop for Vancouver. He is actually shorting Canadian mortgage companies like Genworth. This is not some blogger exaggerating just to make a point, but a professional puting his money where his mouth is as well as his clients money. He firmly believes that real estate related industries will drag us into recession in the second half of 2013. I think we saw this… Read more »

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Troll

3 years 8 months ago

@VMD 84 sales so far today.

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Member

VMD

3 years 8 months ago

G&M: CMHC must stay in government hands
bit.ly/Wa7Y4o

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Member

patriotz

3 years 8 months ago

Third, and most important, the taxpayer would remain on the hook. Even if CMHC is private, the government would still pick up the tab if it goes bust. The private insurers simply resell their government guarantee and tack on a profit margin. Privatizing CMHC just creates another layer while the government remains the ultimate insurer. That’s all you need to read. As I’ve said myself, any CMHC “privatisation” would just be a smokescreen to hide a government bailout. The rest of the article ranges from obtuse to wrong. The author thinks it would be a good thing to try to… Read more »

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Village Whisperer

3 years 8 months ago

I see Tsur and Cameron have teamed up again in the Vancouver Sun to tell people prices aren’t coming down next year so you might as well buy now.

http://www.vancouversun.com/business/real-estate/Vancouver+real+estate+buyers+waiting+price+collapse/7754204/story.html?

This is the second time they have pounded this drum. You can almost smell the desperation as the Spring market approaches.

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Guest

3 years 8 months ago

@Village Whisperer

The problem is Vancouver Sun, not Tsur nor Cameron. Vancouver Sun chooses how to write their stories and pick who to quote from.

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ReadyToPop

3 years 8 months ago

The guidelines will essentially focus on the steps that mortgage insurers should take to prevent taking too much risk while insuring mortgages of home owners. According to Ms. Dickson, the housing market in Canada is continuously growing along with an increase in the household debt. Therefore, such measures need to be taken to prevent the looming debt burden on the economy and to remind creditors of their duties towards their lenders.

New Mortgage Insurance Guidelines Set to be Released in 2013 will Further Tighten the Real Estate Market

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paulb

3 years 8 months ago

New Listings 42
Price Changes 39
Sold Listings 90
TI:14226

http://www.paulboenisch.com

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pricedoutfornow

3 years 8 months ago

Was at the gym today, eavesdropped on two boomers having a conversation beside me. Buddy bought a 700 sq ft condo near the Olympic Village for $650k, due to be completed in 2014. Owns a house in New West, “hopes” he’ll be able to sell it to make the move. Says that area around the Olympic Village is “booming!” (is it? haven’t been down there in awhile, so I have no clue other than seeing a bunch of condos being built). Ah, those silly boomers! Think someone’s going to buy their New West house for $1.2 million so they can… Read more »

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mclovin

3 years 8 months ago

#6 “Another 4% rent increase is in the book unless you are locked in or having generous landlords” Ha ha ha ha – When was the last time a landlord could pass on a rent increase? Most people are easily able to negotiate decreases. A buddy of mine just dropped his rent from $2,700 to $2,300 just by asking. The landlord wanted to keep a good tenant. The only stipulation? Sign a 1 yr lease which he was glad to do. Good tenants are in short supply unlike good places to rent. Just imagine what it will be like this… Read more »

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Makaya

3 years 8 months ago

@ Anonymous #10 (December 28th, 2012 at 10:19 am) First of all, pick a name instead of cowardly hiding as an Anonymous. Second, I have described in great length my position and my predictions on RE here for years, as well as in two articles I wrote for GEAB, one in April and one last month. If you’re interested about what I think, drop me an email at fortunatefool00@gmail.com and I’ll be more than happy to forward you these articles. As a favor, I would ask you in return to provide all of us here your opinion on the current… Read more »

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An Observer

3 years 8 months ago

Did we ever get daily numbers for December 24 or is that considered a holiday day?

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VMD

3 years 8 months ago

@42
Troll did provide Dec 24 stats at
0 sale
10 lists

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Girlbear

3 years 8 months ago

How on earth could THIS be considered a “Vancouver Luxury Realty” home…??? Good God.

http://vancouver.en.craigslist.ca/van/apa/3502573319.html

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real_professional

3 years 8 months ago

At the time of the last federal election I sent this chart, which was published in the financial post, to a number of politicians….. I got nothing. One conservative on the north shore replied, yadda yadda vancouver is beautiful, yadda yadda immigration, therefore there is no bubble.

But the conservatives are to blame, that is for sure. They created the bubble. Everyone stood by and watched, but they created it.

http://www.pacificapartners.com/blog/wp-content/uploads/2011/04/Vancouver_Real_Estate.png

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Girlbear

3 years 8 months ago

From my last post just had to add, I love the part where she says available in “prestigious New Westminster”. Wow, I guess I am out of the loop on the prestigious hoods these days!

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market stats

3 years 8 months ago

Sales seems to have spiked last couple day maybe year end rush for agents to make quotas or something. But I would say the deals I have looked at have been reasonable markdowns to original lists and have largely languished for some months.

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Anonymous

3 years 8 months ago

Re. #41 Makaya, I have no doubt that you have some reasons behind your “lol” remark. But a one word “lol” rebuttal of an argument seems to assume a likeminded and uniform audience who all know and share your position. If the audience is a varied one and the forum a venue for genuine discussion and difference of opinion, “lol” without further elaboration makes no sense. Before I dedicate time to reading your articles, would you care to tell us what your track record of predicting the market has been in the last few years? If your record is, say… Read more »

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Aleksey

3 years 8 months ago

Anybody has an year-end stats?
In Vancouver Sun they claim that “Alongside sales volumes, the number of new listings has dropped.” I thought that listings were quite high this year and they are up comparing to previous years. Are they just lying providing wrong data?

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Aleksey

3 years 8 months ago

strike out “lying” from my question
didn’t know that html tags are not supported…

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Vancouver Condo Info

FFFA! Bulls, bears & banter. Farewell 2012!

Bubble? What Bubble?