Happy New Year / Site!
Well, that was 2012. The real estate market peaked in Vancouver at about the half way point and started heading down.
As we head into 2013 we’ll be watching the market with interest – some of the stats right now are looking as bad as the crash of 2008.
Unlike 2008 we’re now looking at a tighter credit environment and rock bottom interest rates. It will be interesting to see if there are any more rabbits in that hat.
Thanks to everyone who has taken part in the VCI community this year and your patience with our recent down-time. We’ve made a number of changes around here to hopefully avoid a similar occurrence in the future.
We’ve also split off VancouverPeak.com from this site and that forum is now running proper forum software which should work much better than the half-way solution we had running before. Blogs are great, but there is some information which is better served in the discussion forum format.
Things like tracking stats or user generated conversations that can carry on beyond a daily thread are where forums shine, so we invite you to check out the new site at http://vancouverpeak.com
Unlike the previous incarnation registration is open to everyone, but we’ve instituted some automatic user pruning policies that you should know about. Newly registered accounts have 24 hours to activate their membership via the automated email you will receive after registering. Please leave at least one human comment within 2 days of registering or your account will be automatically deleted.
We had some good threads on the old site, and we’re manually going through the database and trying to restore the good ones, but it’s a slow process. If there’s anything specific you would like us to focus on you can leave a request in the comments.
Thats about it for now, hope you had a good 2012 and here’s to a Happy New Year!
December 31st, 2012 at 1:46 am 1
I am going to add my rental anecdote to this thread and hopefully others can confirm or reject its conclusion based on their own experiences.
Until November this year I rented a one bedroom apartment in Vancouver West for $1290. 3 months ago I received a rent increased that sent the rent to $1340 (maximum allowable by law). As I didn’t really like the apartment to begin with I decided that instead of haggling with the landlord for a lower rent I am just going to move out and rent in a different complex. The apartment I was moving out of was initially listed for rent for $1400. No takers. A month before I was to move out it was dropped to $1350 and within a couple of weeks it was dropped back to my initial $1290.
Finally the new tenant that accepted the offer also got 3 months free parking ($150) and a free locker ($10/month). Which in my mind is equivalent to a $1270/month deal… but allows the landlord to claim the apartment is rented for $1290.
As for me I am currently renting (what I consider to be a better) one bedroom apartment for $1240.
So even though the landlords might think they can increase the rents the reality, at least in this case, is that they can barely keep them from dropping.
Mind you these are not your run of the mill amateur landlords but a large property management company. They realize that if they were to miss one month of having the unit occupied it would translate to a loss of ~100/month from whatever rent they can get from the new tenant. So they quickly adjust their ask price accordingly.
On last observation. Before I left I bumped into one of my neighbors who also indicated they were planning to move to a cheaper complex because their rent was going to be increased to unacceptably high prices next year.
I’m not sure what the situation is for SFH. More anecdotes are welcomed.
Thanks to all for contributing to this website.
Happy New Year!
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December 31st, 2012 at 4:00 am 2
Here’s my rental anecdote:
My spouse and I are renting the main floor (the landlord–single–lives downstairs) and finished attic of what is meant to be a SFH in East Vancouver a few blocks south of the PNE.
According to my measurements, we have just under 1000 sq. ft. on the main floor and about 400 sq. ft. in a finished attic, which we use mainly for storage and as an extra bedroom/play area for visiting friends and family. We pay $1400/month for a rent of $1/month/sq. ft. plus heating (natural gas) and electricity, which in total runs to aout $75/month on average for the year. In addition, we’ve got a fantastic 500 sq. ft. back deck, which is wonderful during the summer.
Our one-year move-in anniversary is coming up next month and I suspect the landlord won’t even consider raising the rent. His friends tell us that he often tells them that we’re the best tenants he’s ever had (which included a retired hockey player who at one point in time was considered amongst the best players in the NHL during the height of his career) and the changes we’ve made–painting, some minor renovations, etc–have increased the visual attractiveness and, thereby, the potential rental and resale value of the home.
I looked up the assessed value of the home a couple of days ago, and it is listed at $685,000. So, we’re renting at least a $500K space for just about $1/sq.ft. Not bad.
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December 31st, 2012 at 4:35 am 3
More trouble brewing at the Olympic Village. Condo owners are opposed to the proposed opening of a new pub. These people sound extremely NIMBY. Another article talks about concerns the pub will bring down property values. If owners at the Olympic Village are concerned about property values, I think they have much bigger problems than a local pub. Property values are falling because the bubble is deflating, not because a pub wants to open up.
http://www.vancouversun.com/travel/Battle+brewing+over+Craft+Beer+restaurant+planned+heritage/7758404/story.html
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December 31st, 2012 at 5:55 am 4
Monkeys in a controlled experiment exhibit immunity to evidence by repeating the financial mistake of trading away a loss(rent) in preference for the choice with lower mathematical(expected) return.
The highly repeatable experiment shows that a small and unlikely chance of getting ahead of their peers overwhelms any caution or benefit calculation in the decision.
The experimenter also reported that the same community of economically trained monkeys was rife with theft and bereft of savings.
http://www.youtube.com/watch?v=DUd8XA-5HEk
The working hypothesis is that humans involved with buying and holding overpriced RE have the same cognitive deficit as lower primates. In other words, they are exhibiting monkey behavior.
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December 31st, 2012 at 7:46 am 5
What a joke this city is! Vancouver can’t even stay up late enough to ring in the new year! Public New Years Eve gathering at Robson Square ends at 9pm. Vancouver is counting down the New Year at 9pm so that we are in sync with Toronto and New York! I guess people are too tired from working so hard to pay those massive mortgages to stay awake til midnight to ring in the new year. Then again, most of the transit system here shuts down by 1am so it’s probably not a good idea to have a big gathering of people downtown that ends after midnight. Just goes to show what a pathetic city this is. There is absolutely no comparison between New York and Vancouver other than the fact that Vancouver rings in the new year at the same time New York does.
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December 31st, 2012 at 8:11 am 6
@ G I feel your anger! Best thing to do in Vancouver is stay at home, I learned that by the late 90. Weather here sucks for New Year and the events are lame.
@short em high…. great post thanks for sharing
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December 31st, 2012 at 9:43 am 7
Inventory – December 31, 2009: 9,880
Inventory – December 31, 2010: 10,739 (+8.7%)
Inventory – December 31, 2011: 12,069 (+12.4%)
Inventory – December 28, 2012: 14,226 (+17.9%)
Based on this, I think it’s fair to conclude that 2013 is going to a horrible year for Vancouver home prices.
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December 31st, 2012 at 10:16 am 8
“Finally the new tenant that accepted the offer also got 3 months free parking ($150) and a free locker ($10/month). Which in my mind is equivalent to a $1270/month deal… but allows the landlord to claim the apartment is rented for $1290.”
Claim to who? All that matters is they just lost money and caused a bunch of extra work for themselves. There is also potential new problems with noise or late rent with an unknown tenant. Landlords often gamble that a tenant will accept a rent increase to avoid the hassle of moving. Good on you for not accepting it.
Personally I live in a newer condo in downtown owned by a amature landlord based in the US. Going on 4 years now he has not ever increased my rent. I send him 12 new cheques once per year and that is all I hear from him. My net rent after maint and property tax is $1400 per month for a assessed value of 800k. He paid more than that as a presale in 2006.
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December 31st, 2012 at 10:28 am 9
So tired of the bull posters who can’t put together decent thoughts, or even sentences, but endlessly say that VCI contributors are “sad” or “miserable” for having been wrong for as long as the blog has been going. Yes this is a bear blog, but how the hell do they know what bear posters have been doing in RE all these years? Many posters here have owned, or maybe even still own (probably strictly owner occupiers). Just sayin, some bubble believers have done very very well in RE with thanks to the ongoing discussion and data provided by this excellent blog and others. If you are in the RE market and haven’t been paying attention to these blogs, quite likely you are getting badly burned in the RE market right now..
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December 31st, 2012 at 10:35 am 10
Does anyone know a good data source for what rental costs in the various areas of Vancouver are or should be based on property type? What’s listed on Craigslist is one way of course but from what I’m hearing on here is that a lot of CL listings are out of whack and with falling home prices I would think rental prices should be falling – would be great to have some data/graphs to monitor the rental situation in Van.
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December 31st, 2012 at 11:22 am 11
Hidden due to low comment rating. Click here to see.
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December 31st, 2012 at 11:46 am 12
@No Noise: It’s not perfect, but padmapper.com has some of the features you’re looking for.
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December 31st, 2012 at 11:54 am 13
@ BBB…
Oops…that was a slip.
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December 31st, 2012 at 12:01 pm 14
Thanks Many Franks!
and
@ BullBullBull
Thanks too for a perfect example of nonsensical writing!
Not worth bothering to try to understand what you are saying or responding. All that needs to be said is that the bubble is bursting and you know it..
Hot debate. What do you think?
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December 31st, 2012 at 12:12 pm 15
Hidden due to low comment rating. Click here to see.
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December 31st, 2012 at 12:19 pm 16
@Many Franks
Padmapper.com is awesome – love how they give %above/below median rents for the neighborhood. Could use more listings, hopefully it really catches on or teams up w CL. Not sure exactly how it works yet..
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December 31st, 2012 at 12:23 pm 17
Here are a few stats to enjoy
1) 10% of properties listed for sale right now in Vancouver West (and Vancouver East) were purchased in 2011
2) 28% of those in Vancouver West would currently sell at a loss if they received asking price
3) 18% of properties in Vancouver West and 14% in Vancouver East are now listed below assessment
Shaughnessy and Arbutus both have 29% of current listings having been purchased in 2011 and combined 30% of listings are below assessment. That first number is pretty mind boggling…
77% of the downtown listings that were purchased in 2011 and relisted currently will sell for a loss if the seller gets asking price. Kitsilano is 63% and Yaletown is 50%.
2013 should be interesting, have a happy new year!
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December 31st, 2012 at 1:25 pm 18
Here’s another cool stat. 100% of the HAM degenerate gamblers are going to disappear once the banks start asking for that negative equity to be paid off.
And yes, some pay cash, but if you were a HAM degenerate gambler and stupid white folks are climbing over each other throwing credit at you, are you telling me you wouldn’t take it?
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December 31st, 2012 at 1:51 pm 19
Slow day at the board so far. No sales recorded yet, a dozen changes and a couple dozen new listings.
Barring a busy afternoon, we are looking at sub 1150 sales for December. ~25% below last year and ~40% below 10 year median. New listings will finish around 1350. ~15% below 2011 and 20% below 10 year median. Sell to list of 87%.
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December 31st, 2012 at 1:57 pm 20
@No Noise: Padmapper aggregates listings from many sources, including Craigslist. If something is on CL but not Padmapper it’s probably because it couldn’t be mapped based on what was provided in the ad.
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December 31st, 2012 at 2:01 pm 21
Troll
A couple of dozen new listings on NYE?? That surprises me. Interesting.
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December 31st, 2012 at 2:49 pm 22
While we are posting rental anecdotes, I just renewed my lease for another year.
< 10 year old house in Marpole ~ 3,800 SF / three stories. Very nice house, 3 car garage. Separate nanny quarters. Too much space for us.
Owner and his agent were happy to rent to us for another year with no increase. "Owner has no intention of selling……."
Happy new year everyone and look forward to more of the same in 2013.
VC
Hot debate. What do you think?
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December 31st, 2012 at 3:23 pm 23
real professional said:
“Weather here sucks for New Year and the events are lame.”
B..b..but you can go the beach and skiing on the same day!
Lol, I can’t believe people are still pitching that garbage. The only time of year that you can do anything that resembles skiing near Vancouver, its beaches are cold, dreary, wet, and totally uninviting. And vice-versa, for the few weeks that the beaches are half-decent, nearby ski hills are guaranteed to be barren.
So why do the RE pumper idiots insist on trumpeting that nonsense? I don’t know if it speaks less of the lying pumpers, or any overly trusting buyers who believe verbatim what a salesman is saying.
Hot debate. What do you think?
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December 31st, 2012 at 3:27 pm 24
so i was out on 4th with my friend today, and my friend ran into one of her friend’s mom. Their conversation quickly turned to the mom saying how she tried for a long time to sell her house last year with no luck, that she only received one ridiculous offer, and that she was willing to go down to assessed value, but NO WAY IN HELL was she going to accept an offer below assessment, so she pulled the listings.
Her place is in the Dunbar/UBC area. This is a family that has owned their house for at least 15 years and made a substantial profit….talk about looking a gift horse in the mouth (whatever that means)
Happy New Years!
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December 31st, 2012 at 3:30 pm 25
“you can go the beach and skiing on the same day”
Never heard that one before. It’s usually “ski, golf, and sail” – which is true.
Hot debate. What do you think?
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December 31st, 2012 at 3:36 pm 26
“Public New Years Eve gathering at Robson Square ends at 9pm. Vancouver is counting down the New Year at 9pm so that we are in sync with Toronto and New York! I guess people are too tired from working so hard to pay those massive mortgages to stay awake til midnight to ring in the new year.”
There’s no real estate angle here. It’s a kids event, hence the early countdown – there will be one at 7pm, too!
“The New Year’s celebration gets underway at Robson Square. Free live stage celebrations from 4pm – 10:30pm, 2 early countdowns at 7pm and 9pm with glow sticks and noisemakers for the kids.”
http://www.robsonsquare.com/events
Hot debate. What do you think?
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December 31st, 2012 at 3:41 pm 27
“Their conversation quickly turned to the mom saying how she tried for a long time to sell her house last year with no luck”
What were they going to do if they had sold the property?
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December 31st, 2012 at 3:47 pm 28
Happy New Year!!!
New Listings 16
Price Changes 27
Sold Listings 0
TI:13892
http://www.paulboenisch.com
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December 31st, 2012 at 3:52 pm 29
@Vote Down The Facts
“you can go the beach and skiing on the same day”
“Never heard that one before.”
You have got to be kidding!
Hot debate. What do you think?
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December 31st, 2012 at 3:57 pm 30
“You have got to be kidding!”
Nope, not kidding – seriously never heard it. Like I said, the only ones I’ve heard involve skiing, sailing, and golfing and various permutations thereof- never sunbathing on the beach!
Hot debate. What do you think?
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December 31st, 2012 at 3:57 pm 31
@29 Groundhog:
I agree with VDTF on this one. The standard pitch, which is true on more than a handful of occasions at various times throughout the year, is that one can ski and play golf (or go sailing, which is a bit of a stretch) on the same day.
Hot debate. What do you think?
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December 31st, 2012 at 4:03 pm 32
@24 Vangirl:
Since they haven’t yet sold, they have made exactly zero profit. They are currently sitting on unrealized capital gains, but they will be one of many families over the next few years who will come to personally understand the difference between the two.
Hot debate. What do you think?
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December 31st, 2012 at 4:05 pm 33
Hmmmm…. I’ve heard ski/beach before s.. And it would be possible if the local mountains have a large snowbase going into spring and we have an early hot spell. Uncommon though.
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December 31st, 2012 at 4:09 pm 34
“Since they haven’t yet sold, they have made exactly zero profit. ”
They have almost certainly made a profit, namely paying less per month in aggregate than if they had rented a comparable property.
Maybe not if they had bought around the top in 1994, but for sure otherwise.
Hot debate. What do you think?
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December 31st, 2012 at 4:17 pm 35
@Patriotz
Help me out here, but aren’t you conflating consumption and investment? How does one make a “profit” on a consumable (the cost of shelter, in this case) good?
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December 31st, 2012 at 4:42 pm 36
Christmas gathering with in laws and their families. So discussion around the table starts about upcoming ski trip. My family politely turned down the invitation few months ago but we did not specify the reasons at the time. So anyway now the question from the family was why we don’t come. They put us on the spot because my kids were present at the table. And my kids love snow activities like any other kids. So my wife mumbles something and I see that they insisting on us coming. I was so pissed of so I reply that the ski trip does not fit in our yearly budget. We were on ski trip last year and this year we wanted to go to hot vacation and in our budget there is enough money just for one trip. Silence and Blank stare around the table. Budget, what is the word budget?
And I said that they probably also keep the budget and they would understand. I tried to be polite because I knew that they don’t keep budget. They don’t have RRSP, they don’t have or even know what TFSA is, They HELOC and Credit everything from presents to cars and vacation. They make OK money but boy they spent like drunken sailors.
Also this christmas my wife and I decided that we do not participate in Christmas gif exchange with family. I am sure that caused huge commotion among my wife’s family. It is just waste of money. I mean my wife have two sibling and their 5 kids and then my wife parents …WTF I would need 2k just to buy useless gifts. I said to my wife I don’t want to participate in this sick ritual. I am not cheap but I think that family gift exchange is just plain stupid.
Anyway, I could not wait for family gathering to be over and head home. I
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December 31st, 2012 at 5:17 pm 37
Speaking of skiing / sailing etc, southern California has several ski hills between Los Angeles and Palm Springs. So you could theoretically golf, ski, scuba dive, surf, sail, suntan, AND watch a Stanley Cup-winning NHL team all in the same day, if you really wanted. Probably explains why their real estate never crashed.
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December 31st, 2012 at 5:32 pm 38
@36 I had a similar conversation with a friend of mine about the budgeting and his answer was: and what if you save, when you die you want take the wealth with you. He d rather borrow as much as he can and enjoy it because thd credit is cheap. Why not right…with this mentality I don’t know how far the economy is going. It will be too late when people will realize that they can’t live in debt anymore and that time has come.
Happy New Year to all of you!
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December 31st, 2012 at 5:44 pm 39
#25 Vote Down The Facts
“Ski, Golf, Sail at the same day” is true and exactly why I came here.
Being from inland found out that snow is pretty wet here and skiing/snowboarding at local mountains less fun that at Big White for instance. Can’t say much about golfing, but windsurfing/sailing is not what I expected too. I find winds around Vancouver not strong enough and not consistent at all which is crucial for these activities.
Don’t get me wrong, I love it here, but Vancouver is very overrated.
Hot debate. What do you think?
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December 31st, 2012 at 5:55 pm 40
How about that? A shut-out to end the year.
Hot debate. What do you think?
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December 31st, 2012 at 6:00 pm 41
Here’s a post from Paul B exactly one year ago tonight…
So Paul I have to ask – did you end up buying or not?
Hot debate. What do you think?
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December 31st, 2012 at 6:06 pm 42
Vote Down the Facts (#31) said: “Nope, not kidding – seriously never heard it.”
Lesse, where do I start with this one?
As recent as the thread just previous to this one (message #140), a poster named “Vincent C.” wrote, “I was googling Vancouver condos and came across this site. What a loud of bs all of u are. Maybe you haven’t noticed but we live in the best city in the world. You can ski and go to the beach on the same day and everyone wants to live here. ”
Mind you, he sounded a bit like a troll, if only because it sounded like he was satirizing what RE bears sound like — including the very typical “best in the world” and oft heard “ski and go to the beach in the same day” schtick.
Still don’t believe me? Plenty of websites mention this garbage.
Try, for example, the “About.com” site’s entry on the Vancouver -> Life Outdoors page:
“From our beautiful beaches to our snow-capped mountains, Vancouver is an outdoor paradise, which is why the outdoor lifestyle is so important to Vancouver culture and Vancouverites, as well as a main attraction for travelers and visitors. There are few places in the world that offer such a wide variety of outdoor activities: in Vancouver, you can play at the beach, golf and hit the slopes all in the same day!”
http://vancouver.about.com/od/sportsrecreation/tp/Vancouver-Outdoor-Activities.htm
Sure! You can play on the beach in winter, if you don’t mind bringing an umbrella, boots, and warm jacket, lol.
And there are other sites where that comes from. Seriously can’t believe you’ve not heard this before.
Hot debate. What do you think?
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December 31st, 2012 at 6:13 pm 43
@Piklishi “I had a similar conversation with a friend of mine about the budgeting and his answer was: and what if you save, when you die you want take the wealth with you”
these kind of people a lost cause. Let me tell you this story. Of my wife sibling was NHL-er for brief time. Enough to get signing bonus, around 1 mil..plus he was paid for about a year two way contract so lets say he made another 600-700k. Do you know how much he saved from that period? ZERO. He only has house paid ..worth it maybe 400k and that’s all..all other money is gone and you think he learned anything about budgeting? Nope.
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December 31st, 2012 at 6:16 pm 44
Thanks Crikey,
I could have sworn I heard this saying repeated throughout most of my life. But then Vote Down The Facts said its not in fact what the saying is. As he only sticks to strictly facts, I assumed it was case closed when VDTF stated it.
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December 31st, 2012 at 6:21 pm 45
Sell-list at about 30 percent below normal is a big wow. Sales horrible. Listings below average too, though, suggesting no rush in people needing to sell because of job loss or mortgage unaffordability.
We’re set up for a steady fall. For a quicker fall, we would need to see a big increase in ‘need to sell’ people, which I don’t see yet.
The regular flow of ‘need to sell’ people will be enough to drag the market down, but that’s a slower process than if you have a flood of ‘need to sells’ which happens when interest rates spike or unemployment spikes.
Happy 2013 to all!
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December 31st, 2012 at 6:22 pm 46
Among other sites, here is an immigration services company ‘trolling’ their potential clients about Vancouver:
“Within a few minutes from the downtown core, you can enjoy activities such as a walk amongst the Cedar trees in Stanley Park, skiing on the North Shore, or a stroll along the beach. You can ski, swim, and play golf in the same day.”
Yes, people will be ‘swimming’ on Vancouver beaches tomorrow, for about 5 to 10 seconds on average. It is called the Polar Bear swim. Guess they forgot to mention that part?
http://www.globalnetworkassociates.com/indexv20.html
Hot debate. What do you think?
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December 31st, 2012 at 6:29 pm 47
Thanks Groundhog,
I assumed everybody else had heard that one for years as well, like I have.
I should have included examples to begin with – I blame my lapse on the sunstroke I have from too much exposure to the Vancouver sun recently.
Hot debate. What do you think?
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December 31st, 2012 at 6:57 pm 48
“a friend of mine about the budgeting and his answer was: and what if you save, when you die you want take the wealth with you. He d rather borrow as much as he can and enjoy it because thd credit is cheap.”
1/ when getting older this guy is going to find it gets harder to work, maybe also harder to find a well paid job.
2/ One gets used to spending, and will have a hard time becoming frugal or wise b/c of ingrained habits/lifestyle and aquired pride.
3/ He is selling off his possibility to retire earlier.
4/ So when is credit going to become expensive? And when it becomes expensive, does he have a plan for that? Actually crunched some real numbers?
5/ If he can’t live within means now, how is he going to handle it when credit is expensive?
6/ No, he cannot take it with him, but looking at stats, the chances are that unless you do something actively about your retirement funds, you will eat generic cat food, and that is not by choice.
Being old, unable to work, with health issues, living in poverty is a horrible situation, in my opinion a tragedy.
7/ In counselling they tell people they may have to be their own mother or father at times, somebody that will love you, regardless. I think people need to be their own daughter or son too, that will look after them when they get old, are you a good daughter/son to yourself as in preparing yourself for years when you are not able to work anymore. And a house in old age may not be so fun..
Just my 2 bits.
Hot debate. What do you think?
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December 31st, 2012 at 7:17 pm 49
craigslist is bombarded with stupidly expensive “rent it furnished” postings.
I honestly think that amateur landlords see these adds and some set their rental prices based on these. Some of these rentals are ridiculous, I mean who rents a one bedroom alley house for $2800??
Hot debate. What do you think?
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December 31st, 2012 at 8:12 pm 50
Supposedly you can tell the health of a horse by looking at its teeth, so a horse buyer would look a horse in the mouth to check it out. Happy new year folks.
Hot debate. What do you think?
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December 31st, 2012 at 8:33 pm 51
Be sure to mention this fact to the trustee of the ultimate bankruptcy. Debts created where there is evidence of no intent to repay cannot be discharged in bankruptcy. Ideally, the high flying debts of today can be recovered in perpetuity over years of garnished wages after the bankruptcy.
While it is satisfying that such people are forcibly made to pay their debts, the more important effect is that credit is properly allocated in the future so that the transaction value of money ceases to be distorted by easy lending. These people need to be tapped out and stay tapped out until they actually produce something of economic value.
Hot debate. What do you think?
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December 31st, 2012 at 9:04 pm 52
Hidden due to low comment rating. Click here to see.
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December 31st, 2012 at 9:15 pm 53
“On last observation. Before I left I bumped into one of my neighbors who also indicated they were planning to move to a cheaper complex because their rent was going to be increased to unacceptably high prices next year.”
That’s normal. Landlords know people don’t like moving, best odds of getting a rent increase are from existing tenants. New tenants have the same options as existing tenants, but theirs are easier, so they have more negotiating power. If you get a rent increase that puts you at or above what you think market value is, it’s always worth it to negotiate it. Unless of course you want to move anyways, then the unrealistic landlord will lose at least one month rent.
Hot debate. What do you think?
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December 31st, 2012 at 9:32 pm 54
@zerodown
Fancy meeting you here… Now go to gravatar.com and set up your avatar, you have much to teach the real estate bulls.
Happy new year
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December 31st, 2012 at 10:13 pm 55
……“you can go the beach and skiing on the same day”
Never heard that one before. It’s usually “ski, golf, and sail” – which is true……
It’s true! Only in Vancouver can you ski in the rain in the morning, golf in the rain in the after noon, and sail in the rain in the evening.
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December 31st, 2012 at 10:14 pm 56
I mean who rents a one bedroom alley house for $2800??
Nobody. That place has been for rent for months. I’m in Van temporarily and needed a furnished place. I started looking about four months ago and saw that place. I’ve been in my new place for almost two months and that place is still listed. There’s a reason: it’s not worth it.
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January 1st, 2013 at 12:34 am 57
I have been running on the beach and, looking up at how inviting the snow on he mountains seemed, decided to head up there in the afternoon. It is nice, and it is unusual. I do a lot of sport and all my athletic friends (who are basically all transplants) agree that Vancouver isan excellent place for it.
As for looking a horse in the mouth, I believe the thing you are supposed to be judging is the age.
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January 1st, 2013 at 4:17 am 58
“How does one make a “profit” on a consumable (the cost of shelter, in this case) good?”
By buying an investment (the house) that provides the consumable (shelter) that they would have used anyway for less than the market price of the consumable.
Suppose instead of buying their own house to live in they kept renting house A from someone else and bought an identical house B and rented it out for more than their ownership costs. You’d say they were making a profit on house B, right? The taxman sure thinks so.
Now make house A = house B.
If you have a problem with the word “profit” for their own house, use “they got a positive return from buying the house because they have more money in pocket than if they were renting the same house”. Same dollars, simply different label.
Hot debate. What do you think?
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January 1st, 2013 at 5:26 am 59
Canadians expect home prices to rise. All of the realtor talk about a spring surge looks to be impacting consumer confidence. I don’t believe this means anything from a forecasting perspective.
http://mobile.bloomberg.com/news/2012-12-31/nanos-poll-finds-canada-consumer-confidence-rises-on-real-estate.html
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January 1st, 2013 at 6:13 am 60
@real_professional:
Ooh the Nanos Economic Mood Index went from 101.0 in November to 101.9 in December. Does that even mean anything? An Economic Mood Index sounds like a statistical construct in which numbers are put through so many machinations as to be rendered almost meaningless.
Also, maybe they called a few more optimistic people in December. People in financial trouble and overleveraged homeowners sitting on depreciating assets still, by and large, went out Christmas shopping this year. Most people didn’t come to their senses and say no presents this year for Christmas. People do Christmas shopping regardless. But they have to try to justify to themselves that they can afford it. So they convince themselves that their economic prospects are better than they are. They take the more positive view during Christmas because they don’t want to let angst over property values ruin their holidays. Then they worry about the bills in January. So it’s not surprising there was a slight uptick in the economic mood of Canada in December. People deluded themselves into thinking things are better than they are in order to justify the orgy of consumption that is Christmas.
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January 1st, 2013 at 9:25 am 61
Hidden due to low comment rating. Click here to see.
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January 1st, 2013 at 9:36 am 62
Ah! What could be more Vancouver than waking up on new years day and sipping a coffee while reading bear blogs? Happy 2013 everyone!
Well, of course there’s the ‘running out of land’ and ‘bears will wait forever’ thing. As long as my rent covers more housing than could be purchased for the same number of dollars I’m happy doing that. I’m not ‘waiting’ I’m living my life.
Please tell me where I can rent a car for less than the cost of owning and I’ll be all over that deal as well. If it makes you happy you can call that ‘waiting’ as well.
Hey! I think I have a business idea for you. You buy a brand new car and take responsibility for all registration costs and maintenance and I’ll rent if from you for about half what you pay each month. Sound good?
Sounds good to me!
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January 1st, 2013 at 9:56 am 63
New assessments are available on the http://evaluebc.bcassessment.ca site
Hot debate. What do you think?
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January 1st, 2013 at 9:58 am 64
@ Troll feeder
yes, but if you own your home your coffee would taste better and you would have friends that are always laughing and never wear a watch, like in beer commercials. There is so much more to home ownership than just cost and a roof over your head. You will appear taller and in better shape, women will smile at you more, and people will laugh at your jokes.
Now go, sip your sub standard and owner subsidised coffee…. you will likely find it bitter much like your land-”lord”
Hot debate. What do you think?
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January 1st, 2013 at 10:11 am 65
@ anon
Couldn t agree with you more. bullish sentiment is a good thing for bringing about a real estate correction, once sentiment is extremely bearish real estate will have reached rock bottom and one should buy because upside shocks are likely to exceed downside shocks. And, at that point, price multiples vs history and comparables are more likely to scream “cheap”. it is contrarian at extremes.
Note; on tablet hard to type
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January 1st, 2013 at 10:50 am 66
Just checked BC Assessment… condo I sold for $470K in 2008 only assessed at $522K. 11% paper gain… and that was last year’s assessment… minus transaction cost, I wonder if buyer would even break even.
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January 1st, 2013 at 11:07 am 67
@Troll Feeder
Car2go
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January 1st, 2013 at 11:10 am 68
Just had a look at BC Assessment and some of the 2013 numbers appear to be posted already (I could be wrong and I guess tomorrow will be for sure) and are in line with recent drops. A sibling of a colleague works for BC assessment and has hinted that the 2012 assessments were way higher than current reality. I know very well from personal experience. I would think they are trying to be as current as possible but that won’t make the taxman happy at all..
Hot debate. What do you think?
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January 1st, 2013 at 11:20 am 69
Regarding assessments, remember that this is based on June 2012 so if you follow this link which shows HPI from June 2012 and look at the “1 year change” column, that should be a rough estimate on how much your property changed
http://www.rebgv.org/home-price-index?region=all&type=all&date=2012-06-01
Most SFH’s will be up and most townhomes and apartments will be flat but if course it is very regional. Next year’s assessment is going to be down across the board since we’ve already clocked in 6 months of fairly sharp drops
Hot debate. What do you think?
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January 1st, 2013 at 11:31 am 70
Back here for the new year into sub zero temperatures.
Other than spending time with friends and family,this city sucks big time. The Christmas atmosphere is here no more.
The city has undergone a cultural and demographic transformation beyond belief.
I hope it is for the better.
Sometimes I feel like driving in the soulless boring suburbs of New Delhi or Beijing. And those suburbs have rapidly grown and encircled the whole city now, Vancouver is such a bore!
All the jokers who think skiing golfing and sailing on the same day in Vancouver, have done none of them separately, let alone together. They are just repeating the real estate propaganda they hear endlessly on TV and radio. It works indeed.
I come here for skiing , but to do that you have to go to Whistler where you have decent infrastructure(…if you can afford the outrageous prices and restaurant rip off’s at every corner).
Sailing and golfing, you really cant plan it in advance, because no matter how you try the weather will always screw up your plans. You cant even plan 3 days in advance a barbecue party because the weather sucks big time here.
Vancouver has to be the most overrated city ever.
I think it is overrated only by the vancouverites, obsessed with Mercer’s survey that for some reason puts it on the top most livable cities. In fact, nobody cares about Vancouver outside BC, in the developed world.
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January 1st, 2013 at 11:34 am 71
An Observer said: “if you follow this link which shows HPI from June 2012…that should be a rough estimate on how much your property changed”…”Most SFH’s will be up and most townhomes and apartments will be flat”
Sorry, don’t trust the “MLS Home Price Index”, don’t give it any merit.
Nevermind that it is the MLS HPI, which in itself is enough to make me doubtful, but there is too much confusion and questioning about the obfuscated methods they use… and the need for this over previously existing methods.
In US, do you know what the legal repercussions there were when a real estate board admitted it had “accidentally” been releasing incorrect stats for many months, double-counting sales, etc, etc? Absolutely none.
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January 1st, 2013 at 11:39 am 72
Vancouverites are so debt-laden, they can’t afford to golf, ski, or sail.
But you’ll find them at the dollar store and at the local Hong Kong cafe eating a $4.95 meal with milk coffee at 3pm.
Hot debate. What do you think?
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January 1st, 2013 at 12:36 pm 73
@ No Noise.
FYI: BC Assessments are based on july 1st valuations.
And higher property assessments do not mean property taxes automatically go up. They are set by municipal budgets and are pro rated by a ‘mill rate’. If the municipal budget remains the same, then there will be no tax increase.
Hot debate. What do you think?
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January 1st, 2013 at 1:08 pm 74
BC Assessment 2013 is out.
Another 10% increase (Van West)! Those flippers did this. Maybe this is the peak number for this area, until 2020 -:).
Hot debate. What do you think?
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January 1st, 2013 at 1:12 pm 75
@Crikey, it doesn’t matter if you don’t trust the HPI (I still have doubts as well), just saying that it is a pretty good estimate in terms of how your assessment might change for each property type in different areas. I own a SFH in Burnaby and the assessment increase matched exactly what the HPI increase was for the year.
Interesting that this is going to ensure that just about nothing, anywhere sells above assessment in the coming year.
Hot debate. What do you think?
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January 1st, 2013 at 1:53 pm 76
As 2013 comes into focus there have been some great comments on this and other blogs on what 2013 will bring. I have a few thoughts on the downside of 2013. This isn’t anything new, other commenters have dealt with this already but I’ll throw my thoughts out there fwiw:
1) Credit conditions will be tighter. OSFI B20 will be in full force. Vancouver will, going forward, require LTV derating because prices are seen as potentially being weak over the coming years. Longer loan terms with mid-range LTV will either be admonished or be charged a premium. As well we will have the full spring selling season with new 25 year MI caps. The government has instituted a cap on total IIF and lenders will have to find other ways of securitizing their loans. Vancouver exposure in particular will be watched by analysts in various pools. There are upsides in the coming year, however, with interest rates very low right now and lenders are looking pretty much everywhere to lend. I don’t have a solid estimate of the impact as lending is notoriously obfuscated and the transactions complex, but the move from 30-25 years is about a 10% impact, and the other Vancouver-specific measures around risk management will add to this impact.
2) Population growth is weak. The weakness in 2012 was in part due to lowering population growth. That trend looks to continue in 2013. I did a quick analysis of sales and population growth correlation and sales tend to lag by about a year. That is, when people move to a place they tend to buy within a year. That effect alone, in my view, contributed to at least some of the weakness in 2012 (ie slowing population growth in 2011). 2013′s sales, therefore, will be weak as well if not weaker. Population growth in q3’12 was about 10,000 less than q3’07.
3) Completions are slated to increase in 2013. CMHC-surveyed completions lag starts by about 12-18 months or so. Starts look to have crested in Q2-Q3 of 2012. Completions will be increasing through most of 2013, all else equal. That will add to dwelling supply compared to 2012. There will be about 5,000 more completions in 2013 than at the nadir in ’10 (I forget the exact #)
4) Income qualification in 2013 will be more difficult. 2012 was a sh!tty year for many commision-based salespeople in FIRE. Banks will likely be looking at sales volumes carefully in 2013, and may be de-rating income qualification criteria for those they see are at higher risk of having FIRE-related income impairment in the coming years. That will be mortgage brokers, Realtors, and other real estate marketers and resi construction activities. That will cause additional pressure by way of attempting to liquidate some RE-based assets to supplement incomes as well as constricting future RE-based purchases. Total sales in REBGV in ’12 were down about 30% from 2009.
Those are items definitively to the downside and different from the last mini-crash in 2008-2009. There may be some upside factors for 2013, and we should be on the lookout for these. I’ll share my thoughts on this a bit later, but feel free to chime in with your downside and upside thoughts on the coming year.
Happy new year, just over one month to go until the next new year!
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January 1st, 2013 at 4:31 pm 77
Happy New Year Vancouver!
http://www.vancouversun.com/news/Rate+hikes+increases+higher+user+fees+ring+2013/7758542/story.html
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January 1st, 2013 at 5:09 pm 78
One of my New Year’s resolutions is to encourage the inevitable bail-out talk that will start coming later this year to focus on fairness in addition to mere expediency.
A bail-out of sorts will definitely arrive in Canada because there isn’t a scenario that involves literally millions of high LTV borrowers and 20-40% price corrections that doesn’t involve the failure of the entities backstopping the financial risk.
I realize I am playing the game a couple of steps ahead, but it would help if everyone started thinking a bit about where the puck is going. And where it’s going, in my view, is to a closed door discussion between H and F about how much cash is printed up by the BoC to bail out the CMHC, the Genworth creditors, the various banks, the credit unions etc.
The dopes who run those outfits, and their stockholders and bondholders, have lived high on the hog by accelerating the demise of Canadian economic well-being through writing mortgages that should never have been issued. In a truly unfair world, they may mostly emerge unscathed when tshtf.
I for one hope it is different this time. Why not put the ignorant cleaning ladies with $400K mortgages at least on par from the point of view of bail-outs as the MBA bankers who were in positions of power and who should have done more to stop the madness. Why dispossess young families in Surrey for financial incomptetance while propping up the far more incompetent (and evil) credit union directors.
The fairest solution of all is to bail-out no one. Let the dust settle where it may. But if we are going to go down the path of printing up billions from thin air, why should the money prop up the responsible organizations and their weasly managers? Give the money to the people.
Hot debate. What do you think?
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January 1st, 2013 at 5:31 pm 79
“One of my New Year’s resolutions is to encourage the inevitable bail-out talk that will start coming later this year”
Your timetable is way off. Toronto and most other markets just peaked and the great majority of homeowners won’t even be aware that prices are falling come the end of 2013.
Prices in the US peaked in early 2006 and the bust really didn’t become common knowledge until 2008.
As to what the PTB are going to do, that’s always been pretty clear IMHO – honour their obligations to the lenders and let the borrowers hang up to dry.
Hot debate. What do you think?
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January 1st, 2013 at 5:43 pm 80
@ p
If the CMHC runs out of capital, there are no formal obligations to fund it…one would have to get created on the fly. If VanCity becomes insolvent, there is no law that says it has to be recapitalized.
These are the future discussions to which I am referring. And if we start seeing big double digit drops in HPI type measures later in 2013, I suspect people will start talking about bailouts of the banks. Call it a hunch. Check back with me Jan 2014.
Hot debate. What do you think?
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January 1st, 2013 at 6:30 pm 81
I also agree that bailout talks are way off in the distance. This ship is going to be sunk and you’ll still have Tsur and Cam and the rest of the fools claiming that things are flat with buyers dreaming if they expect prices to drop.
The HPI in Van West is down over 10% in 7 months which is probably up there with the most dramatic 7 month drops anywhere and they are still claiming no price drops and a soft landing…
Hot debate. What do you think?
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January 1st, 2013 at 6:37 pm 82
Cost of Vancouver home ownership rises while valuations drop – double ouch!
“In Vancouver, homeowners will pay about three per cent more in 2013 on their property taxes and utility bills..”
http://www.vancouversun.com/news/Rate+hikes+increases+higher+user+fees+ring+2013/7758542/story.html
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January 1st, 2013 at 7:02 pm 83
@ An Observer
It sure doesnt help anyone face reality when every homeowner in BC gets their letter shortly from BCAssessment which apparantly, and as you have said, was based on July 2012 valuations. But we’ll all know by spring/summer 2013 exactly how bad things are..
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January 1st, 2013 at 7:16 pm 84
@ no noise
Or, how about translink fees jumping 10% as of 2013. Happy New Year, someone tell Translink what CPI change is.
http://metronews.ca/news/vancouver/493042/translink-celebrates-2013-with-fare-increase/
So a typical homeowner wakes up in their depreciating home, pays extra muni tax to keep that home, spends 10% more to ride the bus or is tolled to cross a bridge just to get to a job where wages have been stagnant
Hot debate. What do you think?
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January 1st, 2013 at 7:34 pm 85
Oh yes, anecdotal remarks I found interesting. I had lunch today with some family, one person owns a limo company: He said business was very slow last year, nothing like previous years. Another owned a restaurant, said business dried up, although complained about competition. Finally, another owns a big rig for local shipping. His story was most interesting as as he does mainly intermodal shipping from the airport, air freight of consumer goods that come into Vancouver. According to him, work has been very slow for months now. He said, the goods that he transports can be anything from laundry detergent to fruits to electronics – if shipments aren’t coming in then demand forecasts by business is down or inventories are full.
Hot debate. What do you think?
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January 2nd, 2013 at 9:35 am 86
….I have been running on the beach and, looking up at how inviting the snow on he mountains seemed, decided to head up there in the afternoon. It is nice, and it is unusual. I do a lot of sport and all my athletic friends (who are basically all transplants) agree that Vancouver isan excellent place for it. ..
Yes, isn’t it sad that there are no other places in BC with snow. And running, well, that’s actually illegal in most places. Paying 5 times the national average to live in a place were one can see view mountains 3 days per year; where do I sign up?
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January 2nd, 2013 at 1:57 pm 87
“Why dispossess young families in Surrey for financial incomptetance while propping up the far more incompetent (and evil) credit union directors.”
Sure, make the banks/credit unions do their share, but are young families really that incompetent? Hmmm.. I think they are regular people too and can be just as greedy and want want want.
Why not dis possess? Can’t they rent? If you bite off more than you can chew, you will choke, better to spit it out now, even kids know this.
I see people that are supposed to be “poor” and “uneducated”, but they are sailing through the web and can find out anything they want, they own the latest in apps/gadgets etc.
Yes, not a degree in economics, but I dont think that is an excuse for chucking out some common sense, surely people must have some of that. I cannot get around, just can not, how one can just throw ones hands up in the air and say “i dunno”.
If you want a nation of mental midgets, just let everybody off the hook, if you want to progress, responsibility must be taken by each and everyone, including young families, or a system will crash.
Instead of saying poor me, they tricked me, the question should be asked, so what is my role in this, what could I have done differently to avoid this, what do I need to to do solve this, etc. We can not directly control the behaviour of the banksters, but we can control our own.
Anyways, this is not going to sit well with many, so I am hiding under the snow barrier.
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January 2nd, 2013 at 1:58 pm 88
@HAM Solo #78
“encourage the inevitable bail-out talk that will start coming later this year”
Not sure about the timing of the massive talk (2013 sounds a bit early to me) but I totally agree with you on spreading the word about the Great Canadian Bailout we are facing. I am doing that for a few months already.
The good thing is that you don’t have to scare off people revealing your RE bear identity when talking to your friends (home owners or renters, doesn’t matter) about this. No need to use terms like “housing bubble”, we can operate with buzzwords like “easy credit”, “unbalanced budget”, “spending habits” instead.
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