Afraid of falling prices? Just don’t sell!

There’s a funny comfort meme in the media now that house and condo prices are falling.

Its a strange interpretation of ‘supply and demand’ that says if demand is dropping dramatically we’ll just cut back on supply to match and prices will stay stable.

Soft landing here we come!

There are a number of talking heads in the media espousing this viewpoint at the moment and If you don’t think about it too hard it kind of makes sense.

Here’s just one recent example:

Don Lawby, chief executive of the Century 21 Canada, and a charter member of the club that doesn’t see home prices dropping anytime soon, can’t see any desperation from sellers.

“The economy continues to be okay, people have jobs, interest rates are low,” said Mr. Lawby. “Historically, anytime when prices dropped it was tied to high unemployment and interest rates. It’s not the case today, people are not forced to sell, they are staying with their price.”

If people don’t have to sell, then they’ll just take their homes off the market and there’s one less property on the supply side right?

..Of course if you start thinking about it a little bit it doesn’t make as much sense. As Patriotz points out:

..most discretionary sellers are planning to buy another property, so if they decide not to sell they are also deciding not to buy.

So for those of you keeping score, that’s one less seller AND one less buyer. Kind of cancels itself out doesn’t it?

The other point that has been repeated ad nauseum but always seems to get ignored in these articles: the seller that doesn’t sell has zero affect on the market.  The ONLY activity that affects the market are the sales that take place and what price the exchange happens at.  That sale then sets the comp price for all neighbouring properties.

So what really drives the market?

What buyers are willing and able to pay for their desired property from buyers who either need or want to sell.

In a falling market buyers are willing to pay less, because they aren’t completely stupid.  They know it doesn’t make sense to bid high on a purchase that is falling in value each month.

And how fast are Vancouver property prices falling right now?  Apparently even faster than the US bubble markets were falling at their peak.

So there’s that.

But possibly even more important is the buyers ability to pay.  Even if someone really wants to buy that million dollar house and thinks it’s a great deal they might not be able to.  If the credit isn’t available that sale will not happen.

Recent moderation in the mortgage market will have some effect here as we return to the historical standard 25 year amortization on CMHC insured mortgages.  As CMHC hits it’s mortgage cap it is also pumping less credit into the housing market now than it has been for the last few years.

Every time you read another expert talking about the lack of a ‘trigger’ to cause a collapse in the housing market it’s worth thinking about what the trigger in the US or Spain or Ireland was.

The US housing market started to collapse in 2006.  2 years later financial markets collapsed.  The ‘trigger’ for the US real estate collapse was simply this: House prices were too high.

 

 

176 Responses to “Afraid of falling prices? Just don’t sell!”

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    Keeping An Eye On The Pimps Says:
    1

    There has to be a trigger?

    How about the fact that interest rates have been driven down artificially to the tune of about 2,000 basis points in the last twenty years, and that can’t be repeated going foreword?

    That stimulus would have to be replaced by productivity gains, and translated into much higher wages.

    Good luck, with an aging and unproductive work force.

    And, I note on the Greater Fool blog that pimpette Sherry Cooper, has sold her house, does anybody have any details on this?

    Well-loved. Like or Dislike: Thumb up 36 Thumb down 1

    I remember this same meme back in 1981.

    A friend had just purchased a townhouse in Port Moody. At his house-warming, everyone was lauding him on his purchase. They were also commenting on how “lucky” he was that he could actually “buy” because so many others were shut out of the market because prics simply would not budge.

    Well, prices “budged” alright.

    Well-loved. Like or Dislike: Thumb up 51 Thumb down 0

    The Predictator Says:
    3

    “Its a strange interpretation of ‘supply and demand’ that says if demand is dropping dramatically we’ll just cut back on supply to match and prices will stay stable.”

    Better tell all the developers to stop building because there is already lots of supply in the pipe line coming to the market in the next 3 years.

    Well-loved. Like or Dislike: Thumb up 44 Thumb down 0

    RealityCheck Says:
    4

    What about the 50,000 people moving into Metro Vancouver each year? They sold somewhere else to buy/rent here.

    Hot debate. What do you think? Thumb up 8 Thumb down 15

    “the seller that doesn’t sell has zero affect on the market. The ONLY activity that affects the market are the sales that take place and what price the exchange happens at.” — The fact that MOI is correlated with price changes should tell you that the number of sellers (whether they sell or not) absolutely affects the market.

    Hot debate. What do you think? Thumb up 11 Thumb down 6

    “The fact that MOI is correlated with price changes should tell you that the number of sellers (whether they sell or not) absolutely affects the market.”

    MOI is a metric of how many properties don’t sell because the owner is asking above market (note: NOT a metric of how long properties that do sell take to sell). It’s correlated with price changes because in a falling market many owners will ask above market because they expect prices to keep going up.

    People asking above market – whether $1000 or $1,000,000 – don’t actually affect the market unless they are willing to drop the price to what someone is willing to pay. If they’re not the property is not really for sale in the first place.

    Hot debate. What do you think? Thumb up 19 Thumb down 7

    Anonymous Says:
    7

    ……What about the 50,000 people moving into Metro Vancouver each year? They sold somewhere else to buy/rent here……

    Maybe the 75,000 leaving Vancouver every years snap them up at bargain prices.

    Well-loved. Like or Dislike: Thumb up 37 Thumb down 8

    RealityCheck Says:
    8

    Post #7

    Give your head a shake. Metro Vancouver is not losing 25,000 people a hear. Wishful thinking will not make it true.

    Hot debate. What do you think? Thumb up 25 Thumb down 27

    @RealityCheck #4

    Why do you think they had something to sell?
    Even if they had, prices in their country of origins could be so low that you wouldn’t beleive.
    For one I didn’t sell anything when I came to Canada. I know that 80% of my friends (all recent immigrants) hadn’t sold anything before they came here.

    Hot debate. What do you think? Thumb up 10 Thumb down 0

    @RealityCheck #8

    I don’t know how many people Metro Vancouver is losing, but according to rent vacancies in my neighborhood the dynamic is negative. It feels like more people are leaving than coming these days. It was opposite before Olympics.

    Well-loved. Like or Dislike: Thumb up 30 Thumb down 3

    specialfx3000 Says:
    11

    @Reality Check,

    You still think people from outside of Canada are still coming in via yellow helicopters and suitcases full of money to save Greater Vancouver?

    Those from within Canada can’t even manage credit card debts nevermind the million dollar mortgages.

    http://www.news1130.com/2013/01/14/many-cdns-will-need-a-year-to-pay-off-credit-card-debt/

    Hot debate. What do you think? Thumb up 16 Thumb down 3

    UBC in Crisis Mode Says:
    12

    New Year, new listings: Point Grey

    Four beautiful houses came on to the market in the last 7 days. Do they HAVE TO sell?

    4583 W 16TH AV, $2,288,888
    4680 W 2ND AV, $4,280,000
    4098 W 11TH AV. $4,480,000
    4545 W 9TH AV , $2,598,000

    Well-loved. Like or Dislike: Thumb up 31 Thumb down 3

    pricedoutfornow Says:
    13

    “I don’t know how many people Metro Vancouver is losing, but according to rent vacancies in my neighborhood the dynamic is negative.”

    Yes, there sure are a lot of places for rent in my neighbourhood too! We went to a couple viewings of rentals this weekend, it is amazing how the rental market has changed. We want to stay in the same neighbourhood, and a few years ago when we looked there were so many people lined up to rent our place, we never actually thought we’d be fortunate enough to live here. Now, it seems like we’re the only people actually looking at these prime properties-yesterday we looked at a really nice SFH that is renting for $1800- a FULL HOUSE in Vancouver for $1800-newly renoed, big yard etc. Note-these houses sell for just under a million, yet you can rent it for $1800! What a steal. It really didn’t seem like there were too many people interested in the house, I know in prior years there would have been hoards of people looking. Still taking our time though…hopefully the situation doesn’t change by the spring when we actually plan to move.

    Well-loved. Like or Dislike: Thumb up 49 Thumb down 3

    Not Ready To Be Slave Says:
    14

    @RealityCheck #4

    there are 2 big groups

    1. chippest possible rent consumers
    2. people that are ok to live with the parents or other people

    because prices are high these two groups are intersect sometimes, so the nubbers have very little effect on the rental market

    Like or Dislike: Thumb up 1 Thumb down 2

    Many Franks Says:
    15

    From Whistler real estate: a bargain?:

    Whistler real estate prices are better than prices in the Lower Mainland, which, despite doom-and-gloom forecasts, have held steady compared with the rest of the country.

    That basically summarizes the article: innuendo about the Vancouver market set against half-hearted reassurances, then Whistler served up as a glowing alternative just “a relaxing 1:20 drive away”.

    Hot debate. What do you think? Thumb up 16 Thumb down 0

    Vote Down The Facts Says:
    16

    “yesterday we looked at a really nice SFH that is renting for $1800- a FULL HOUSE in Vancouver for $1800-newly renoed, big yard etc. ”

    Is it on craigslist or wherever? Can we see it?

    Hot debate. What do you think? Thumb up 21 Thumb down 3

    Ben Rabidoux Says:
    17

    Not sure why “Reality Check” got voted down for stating the obvious. Vancouver’s net population growth is not -25k annually. There is still growth….it’s slowed significantly from the recent peak, but there is still growth.

    Maybe the down votes were because RC was a wiener about how s/he stated it, but we should probably be careful about voting down statements that are clearly true, regardless of how much of an ass-hat the commenter may be.

    Well-loved. Like or Dislike: Thumb up 65 Thumb down 5

    There are dozens of townhouse developments in Surrey with unsold inventory and MUCH more to build in upcoming releases.
    I know because I follow some of them closely.
    I don’t think they can simply decide not to sell.
    I bet they wish they could though…

    Well-loved. Like or Dislike: Thumb up 30 Thumb down 2

    Re #17: Ben, I agree. I think we should compare net new population vs. net new unit completions (new builds vs. demolition). I would guess that the latter is greater than the former.

    Hot debate. What do you think? Thumb up 9 Thumb down 2

    We were out in Port Coquitlam yesterday.
    Enormous condo towers proclaiming ‘introductory pricing.’ Huge swaths of forest stripped for cookie-cutter condos marching up the hillsides. You know what it reminded me of?
    Parts of Riverside County California in 2005. They even are using the same names for some of the developments………..‘Mosaic” Huh?
    The day can’t be far off when people who bought there realize the jobs are an hours’ drive away, that their 5% down didn’t guarantee any return, ever, and that they shouldn’t have bought that Jetski!
    Atmosphere feels the same too.
    And I was there in Riverside County California in 2005, selling my property like crazy. Those who didn’t are now history, as writ large in southern California from 2006 to the present.

    Well-loved. Like or Dislike: Thumb up 43 Thumb down 5

    @Troll: “The fact that MOI is correlated with price changes should tell you that the number of sellers (whether they sell or not) absolutely affects the market”

    More likely that there is always a normal mix of those who need to sell within those who are trying to sell, and they are competing over fewer buyers, hence the more aggressive discounting.

    Note that as MOI gets higher its “power” diminishes — price changes are slightly less sensitive with higher MOI. Or put another way a 1% change in MOI at an MOI of 5 has a larger impact on price than a 1% change in MOI at an MOI of 10.

    Hot debate. What do you think? Thumb up 14 Thumb down 0

    Bull! Bull! Bull! Says:
    22

    Hidden due to low comment rating. Click here to see.

    Poorly-rated. Like or Dislike: Thumb up 9 Thumb down 25

    No Noise Says:
    23

    Local gangsters are killing each other again – 8 suspicious homicides in the past 24 hours:

    http://blogs.vancouversun.com/2013/01/13/scan-bc-reports-shooting-in-surrey-sunday-night/

    (btw that link – the Real Scoop – is probably the best local gang related crime blog)

    Yup, Best Place On Earth (Meth) for sure. And the publicized violence can’t be good for home values. I would think it will just get worse as the economy stumbles, job losses result, and there’s less disposeable $$$ for the gangs to share. And of course that also means less $$$ laundered through local home building. Furthermore, when marijuana is eventually legalized that will be the biggest hit to gangs/laundered money and a necessary boost to govt coffers (which will be main reason for legalization – not just here but around the world – surprisingy, its already started in the relatively conservative USA).

    Hot debate. What do you think? Thumb up 22 Thumb down 4

    Vote Down The Facts Says:
    24

    No Noise – wow, some of the comments under that article make YouTube look highbrow!

    Like or Dislike: Thumb up 4 Thumb down 1

    No Noise Says:
    25

    @24

    Yes I know – there’s a ton of garbage to sift through (which is telling in itself) so you can really get a feel for a certain sector of the local population – the dialogue between Kim Bolan and the bloggers is the most accessible – I’m sure police are reading this blog very closely..

    Like or Dislike: Thumb up 4 Thumb down 1

    No Noise Says:
    26

    The site is actually less useful as a blog than it is for current info on the local gang crime scene – just the reported articles.

    Like or Dislike: Thumb up 3 Thumb down 2

    As we go into the 2013 Real Estate year, a new stat would be interesting to track.

    We hear of the latest buzz line in that the way the market will stay up is through people just not selling and removing listings. One thing we can see from a listing is who the occupier is – either tenant / owner / vacant. I would go to say that “Vacant” and for sale is a fairly motivated seller. Maybe not desparate but someone who has made the decision to sell.

    I have a list of stats which I will post tomorrow (it’s late here and I have to run) – but before then – what percentage of the properties for sale do you think are vacant? What would be a high percentage?

    I will post the breakdown tomorrow.

    Well-loved. Like or Dislike: Thumb up 27 Thumb down 3

    pricedoutfornow Says:
    28

    @yvr2zrh

    That would be a good stat, we are currently checking out the rental market in contemplation of a move come spring, and are astounded (or maybe not) that so many of these places that are listed for rent on craigslist are places that didn’t sell over the summer-we are fairly blunt about it when we view the place, we ask the landlord innocently “Oh, are you planning on selling anytime soon?” and they often fess up that the place was for sale in the summer but they didn’t get the price they want so now they decided to rent it out(usually this means they already bought another place, usually a SFH, and are now stuck with two mortgages and getting more desperate by the day as the money drains out of the bank account while holding two properties). I feel sorry for these people, often young families, but usually they are asking way too much in rent, and also they plan to try to relist in a year (we don’t want to sign a lease of less than 2 years). Seems to me they are up the creek with no paddle.

    Well-loved. Like or Dislike: Thumb up 35 Thumb down 0

    No Noise Says:
    29

    BCREA released sales stats for 2012 – ave. BC home down 8.3%.
    I guess we can assume values have dropped at least this much but perhaps more..

    http://www.bcrea.bc.ca/news-and-publications/news-room/news-releases/2012-12-statistical-release

    “At least half of the 8 per cent decline in the BC average home price was the result of fewer luxury homes selling in Vancouver and fewer overall Vancouver home sales relative to the rest of the province in 2012.”

    Hot debate. What do you think? Thumb up 16 Thumb down 0

    HAM Solo Says:
    30

    Something I have noticed recently, which hasn’t got that much press, is the steady rise in the size of the Bank of Canada’s balance sheet. I’m afraid I can’t upload the chart, but basically the BoC balance sheet was $50B before the GFC, immediately expanded to $80B and then was shrunk down to $55B by late 2010. (These asset purchases in addition to the CMHC’s purchase of ~$100B in mortgages from the Cdn banks are credited with rekindling Canada’s housing boom/bubble in 2009).

    Recently, that is since mid-year 2011, the asset purchases have re-started (they say they are buying Canadian gov’t bonds across the yield curve). And there have been perhaps $20-$25B of unsterilized QE purchases by the Bank of Canada since then, with much of that coming lately. And the way this works in theory is that the BoC buys bonds from people like OMERS and BCIMC, who turn around and buy other riskier assets (hello REITs). It sort of explains to a degree why MacLeans magazine can be worried about obvious problems in the housing market while the market has been fairly sanguine about it.

    Is this news we can use? Not sure. However, it does sort of help explain where the money is coming from that is propping up the marginal buyers of RE. Could be that some of the effect of QE has been to help channel money into “consumer credit” organizations — the kind that advertise they help homeowners on the radio. Could also be that some of the money is backstopping commercial real estate investors who are making apparently suicidal land purchase decisions even now in the Vancouver core (does anyone who even reads the Vancouver Sun believe you can earn a development margin building condos in Vancouver starting today??)

    Happy to hear other perspectives. This is the part of the elephant that this blind man can see.

    Hot debate. What do you think? Thumb up 14 Thumb down 2

    Vote Down The Facts Says:
    31

    I like the way that the yellow Development Application sign pinned to the side of the social services building at Seymour and Helmcken says “Public hearing not yet schedualed”. Yes, “schedualed” – not “scheduled”. Correct spelling on a huge sign like that is obviously too much effort these days.

    Hot debate. What do you think? Thumb up 19 Thumb down 5

    “what percentage of the properties for sale do you think are vacant? What would be a high percentage?”

    50%

    Hot debate. What do you think? Thumb up 11 Thumb down 0

    Bag it and tag it Says:
    33

    HAM Solo, Patriotz, etc…
    Was there ever consensus on what is the best financial company to short?
    Was it Home Capital Group?

    Like or Dislike: Thumb up 3 Thumb down 1

    HAM Solo Says:
    34

    @ bag/tag

    I think Genworth MIC has the highest probability of going to zero, just because of the leverage inherent in its model (100:1 insurance in force to equity ratio, with maybe 70% of the insured loans being loans that CMHC wouldn’t insure).

    Home Capital Group, Canadian Western Bank offer exposure to uninsured Canadian sub-prime, to varying degrees. Could also go to zero under a scenario where the gov’t is slow to bail-out.

    I would hold gold instead of cash as collateral on the theory that some kind of bail out will ensue from the crack-up…and that the effect will be to devalue the C$ against currencies that can’t be magicked out of thin air.

    Hot debate. What do you think? Thumb up 8 Thumb down 4

    I have a legitimate question re: last mini-correction of 2008.
    Does anyone remember (or have data on) what were the average price drops for Fraser Valley attached, if any?
    I didn’t pay attention to Surrey/Langley at the time, sorry…
    Your help is much appreciated.

    Like or Dislike: Thumb up 3 Thumb down 0

    Anonymous Says:
    36

    …Give your head a shake. Metro Vancouver is not losing 25,000 people a hear….

    Give your own bucket a tilt. There’s no way 50k are coming here every year either. I believe current net migration to BC is negative.

    Hot debate. What do you think? Thumb up 23 Thumb down 5

    Atomic Frog Says:
    37

    Here is a what I found out on the weekend:

    I have been looking for a new rental place in Burnaby, saw a very nice SFH asking for $1800 a month, I am currently paying $1100 for a large basement suite in Van now. Talked to the owner and he admitted that the house was being sold for over a yr. I later checked the price of the house in both BC Assessment and realtylink.org. The estimate is 1.2M and he has been asking for 1.13M since Mar of 2012.

    Not sure if he bought and moved to another place, but the house I saw was vacant. It is about only 3 yrs old. A very nice looking house

    Hot debate. What do you think? Thumb up 21 Thumb down 3

    BC reader Says:
    38

    OT Those of you that have moved away from BC and are renting, have you found you are still getting frequent inspections by landlords/management companies in other provinces? It seems excessive in BC, is it really so bad here overall that insurance needs them? Doesn’t seem sustainable ……

    Like or Dislike: Thumb up 2 Thumb down 0

    No Noise Says:
    39

    @28

    I finally get what’s happening. Non owner-occupiers (speculators) who refuse to face reality and lower prices, are renting their places until prices recover (which won’t happen). So reduced sales listings = increased rental listings. I know, so obvious. This will continue as long as listings/sales continue to be way down. Great time to be a renter..

    Well-loved. Like or Dislike: Thumb up 26 Thumb down 0

    No Noise Says:
    40

    I guess even owner-occupiers who would otherwise sell/buy/move/rent have a negative effect on rental prices as long as they are standing still because there’s no transition period – all those places which would otherwise be in a transition phase are instead maximally rented (rental suites, moving in with parents, etc, etc).

    Like or Dislike: Thumb up 3 Thumb down 0

    patriotz patriotz Says:
    41

    ” Non owner-occupiers (speculators) who refuse to face reality and lower prices, are renting their places until prices recover (which won’t happen). So reduced sales listings = increased rental listings. I know, so obvious.”

    Obviously not, since the properties were rented out all along.

    Hot debate. What do you think? Thumb up 6 Thumb down 8

    No Noise Says:
    42

    @41 Patriotz

    Ok well lets say that the speculators homes are maximally rented – instead of sitting empty trying to sell or in that transition period between previous occupation to next occupation

    Like or Dislike: Thumb up 1 Thumb down 0

    UBC in Crisis Mode Says:
    43

    An interesting new (?) site (by the owner):
    http://comfree.com/

    Here, now are the 5 worst housing markets in 2012
    1. Halifax, Nova Scotia – Down 36.2%
    2. Vancouver, British Columbia – Down 31.7%
    3. Sherbrooke, Quebec – Down 28.5%
    4. St. Catharines, Ontario – Down 26.2%
    5. Fraser Valley, British Columbia – Down 24.5%
    And the 5 best housing markets in 2012
    1. Saint John, New Brunswick – Up 18.1%
    2. Calgary, Alberta – Up 17.6%
    3. Windsor, Ontario – Up 14.9%
    4. Saskatoon, Saskatchewan – Up 11%
    5. Winnipeg, Manitoba – Up 6.8%

    Well-loved. Like or Dislike: Thumb up 21 Thumb down 1

    No Noise Says:
    44

    and all the new completions which arent selling are being added to rental stock.

    Hot debate. What do you think? Thumb up 7 Thumb down 3

    ArthurFonzarelli Says:
    45

    I think the significant number of de-lists and people “waiting it out” that began in earnest last summer won’t start to show up in inflated listing volumes until after the spring market. There were still strong listing and decent sales #s up until late spring 2012, so not a lot of de-list activity then. In light of the low (re)listings from summer 2012 to present, I think it will take one or two seasons (spring and/or fall) of people de-listing or not re-listing before they capitulate.

    One thing’s for sure, the longer they put off listing en masse the bigger the hairball. Or perhaps a better analogy is a “soft landing” on water. If you jump into water from 5 feet up, the water feels kinda soft and nice. If you jump from a 100 metre high bridge, water’s surface tension gives it the impact density of concrete.

    And I think we’ll see a 300+ listings day this week.

    Hot debate. What do you think? Thumb up 13 Thumb down 3

    RealityCheck Says:
    46

    Hidden due to low comment rating. Click here to see.

    Poorly-rated. Like or Dislike: Thumb up 18 Thumb down 26

    RealityCheck Says:
    47

    Hidden due to low comment rating. Click here to see.

    Poorly-rated. Like or Dislike: Thumb up 11 Thumb down 34

    HAM Solo Says:
    48

    @ RC

    I have to say, it’s nice to read the writing of a more educated bullish poster. Kind of like the smart guy in the gang who says, “boss, we got to get our story out there…people are believing the bears, an’ that’s bad for bidness.”

    I agree with Reality Check that the buyers who are left must either be big believers in long-term inflation or be the type that thinks more about what the minimum monthly payment is than the full economics of ownership.

    That being said, it would be a strange world where housing which has already outperformed other capital asset classes by 2-3x over the past decade…would do well in an inflationary time without first suffering a massive correction. Inflation ought to cause interest rates to rise, and that ought to blow up the affordability equations of all those BMW-leasing, latte-sipping minimum payment types that RC must be involved in selling condos to.

    Well-loved. Like or Dislike: Thumb up 29 Thumb down 5

    $1.325MM overhauled Vancouver Special close to Nanaimo St.
    http://www.theglobeandmail.com/life/home-and-garden/real-estate/spiffy-vancouver-special-takes-a-while-to-sell/article7160452/

    Zinc, oak, quartz, and a wine fridge. Yeah…

    Hot debate. What do you think? Thumb up 13 Thumb down 3

    Many Franks Says:
    50

    Reality Check:
    Yes, there is some groupthink here just like on any blog. Keep in mind, though, that you can only measure the active voters on a thoughtful but countercultural post. Plenty of us can read and appreciate them without voting in either direction. (I rarely vote.) I think it’s a mistake to assume that up/downvotes are entirely characteristic; there’s a selection bias there.

    I disagree with the way you’re calling Ben out. He’s being informal, not unprofessional. This is an informal venue.

    Well-loved. Like or Dislike: Thumb up 28 Thumb down 2

    @RealityCheck

    You had me until your last sentence. I’m annoyed by flippant references to Nazi Germany.

    Well-loved. Like or Dislike: Thumb up 26 Thumb down 4

    @ #46

    1) You are of course right. This is more important for most families. Unfortunately for the bull case, there are very few families left in a position where they can actually carry the mortgage payments required in Vancouver. If there were, you would see sales leap in response to the lowered prices. For a long time now, the only people who can afford these prices are those with a huge DP and/or huge salary. Those people are now in desperately short supply.

    Hot debate. What do you think? Thumb up 10 Thumb down 1

    RealityCheck Says:
    53

    Hidden due to low comment rating. Click here to see.

    Poorly-rated. Like or Dislike: Thumb up 6 Thumb down 24

    New Listings 274
    Price Changes 67
    Sold Listings 63
    TI:12819

    http://www.paulboenisch.com

    Well-loved. Like or Dislike: Thumb up 147 Thumb down 1

    @#51 Agree. Close the thread.
    http://en.wikipedia.org/wiki/Godwin's_law

    Hot debate. What do you think? Thumb up 12 Thumb down 4

    vancouverguy Says:
    56

    “Agree. Close the thread.”

    Rather the reverse is true — it should be suspected that the comparison was made with the intent to kill the discussion — and thereore the thread should continue. But we should hold the commenter who made the reference to have acted in poor form with the likely intent of ending the thread. Read the details of Godwin’s law that were previously referenced at Wikipedia

    http://en.wikipedia.org/wiki/Godwin's_law

    “It is considered poor form to raise such a comparison arbitrarily with the motive of ending the thread. There is a widely recognized corollary that any such ulterior-motive invocation of Godwin’s law will be unsuccessful.”

    Hot debate. What do you think? Thumb up 13 Thumb down 3

    real_professional Says:
    57

    Bloody hell! Less than 25% sells to list – this is almost getting to the point where it is just rude to point out the facts to the bulls.

    Wait a second, they were generally unsympathetic during the run up … so carry on, point out the facts all you want.

    Well-loved. Like or Dislike: Thumb up 54 Thumb down 6

    @#56
    Point taken. I am reminded of Calvinball…
    I am happy to see the thread continue however my preference would be without the bitchy navel-gazing by both ‘sides.’

    Viewed this for fun over the weekend:
    http://vancouver.en.craigslist.ca/van/apa/3531428461.html
    About three other people viewing, none for long. Used to be four signs out front, two are ‘off the market.’ Three times heard the young saleswoman say “a *Very* good deal.”

    If you have to say it…

    Hot debate. What do you think? Thumb up 9 Thumb down 1

    Seemingly, many of these Realturds graduated top of their class – at the Warsaw School of Economics. I’m planning on utilizing their strategy and lowering my grocery costs, by not eating. I’ll get back to you on this. Maybe.

    Hot debate. What do you think? Thumb up 17 Thumb down 4

    “The problem with web based blogs is that they concentrate like-minded thinking”

    I upvote the comments containing data and downvote Dave. If the ‘problem’ with this blog is getting you down, you can always try other mediums, or better yet start up your own balanced blog and show us how it’s done. You are free to advertise it here once it’s set up.

    Well-loved. Like or Dislike: Thumb up 39 Thumb down 5

    Jan-2013	
    Total days	21
    Days elapsed so far	9
    Weekends / holidays	5
    Days missing	0
    Days remaining	12
    7 Day Moving Average: Sales	50
    7 Day Moving Average: Listings	234
    SALES	
    Sales so far	494
    Projection for rest of month (using 7day MA)	605
    Projected month end total	1099
    NEW LISTINGS	
    Listings so far	2040
    Projection for rest of month (using 7day MA)	2808
    Projected month end total	4848
    Sell-list so far	24.2%
    Projected month-end sell-list	22.7%
    MONTHS OF INVENTORY	
    Inventory as of Jan 14, 2013	12819
    MoI at this sales pace	11.67
    

    Well-loved. Like or Dislike: Thumb up 56 Thumb down 2

    Just got contacted by local Chinese newspaper Epoch Times (free dailies at restaurants/stores) for my 2013 RE outlook.

    How bearish should I get?
    Probably not tooo bearish to keep my piece from getting published in the first place..

    Well-loved. Like or Dislike: Thumb up 33 Thumb down 4

    Old School Says:
    63

    @ realitycheck #4

    Is your 50k net migration a forecast or based on a factual historical trend?

    Some recent facts:

    – BC net migration past 12 months was 32k

    – BC population growth is slowing at 0.35% Q3’12 vs 0.58% Q3’07

    – For the first time in years (this millennium?) BC interprovincial migration was negative (Q3)

    http://www.statcan.gc.ca/pub/91-002-x/2012003/t330-eng.htm

    Well-loved. Like or Dislike: Thumb up 27 Thumb down 1

    “the effect will be to devalue the C$ against currencies that can’t be magicked out of thin air.”

    Such as…?

    Like or Dislike: Thumb up 3 Thumb down 4

    Best place on meth Says:
    65

    Heh heh…..Ben said “asshat” and “weiner”.

    Now THAT’S my kind of economic analysis.

    Hot debate. What do you think? Thumb up 24 Thumb down 7

    Ben Rabidoux Says:
    66

    @Ham Solo

    I’ve charted the growth in the BoC balance sheet in this post (see point #5)

    http://theeconomicanalyst.com/content/10-canadian-housing-and-economic-trends-watch-2013-part-1

    All of the growth is indeed due to purchases of GoC bonds. The exact motivation for doing this is up for debate, but it is worth noting the maturity schedule of outstanding GoC debt (also highlighted in the post). Perhaps a pre-emptive move to ensure that funding costs remain low as that glut of maturing debt is refinanced????

    @Reality Check
    I’ve addressed all of those questions on my blog at various times. I’ll leave it to you to do the searching. I’m not about to hijack a thread to engage in a discussion that I doubt you’re really interested in having.

    Well-loved. Like or Dislike: Thumb up 30 Thumb down 4

    Groundhog Says:
    67

    @Devore

    Gold

    Like or Dislike: Thumb up 4 Thumb down 2

    No Noise Says:
    68

    @VMD

    Epoch Times must know you are a bear no? Expecting or even preferring a bearish piece? I see a motive there..

    Like or Dislike: Thumb up 2 Thumb down 4

    @VMD: Tell them: “50% drop. minimum. It’ll be epoch!!”

    Hot debate. What do you think? Thumb up 16 Thumb down 5

    patriotz patriotz Says:
    70

    “Do you really believe inflation (if you believe official stats) will stay at 2-3% range over the medium term (10 years)? ”

    Depends on what kind. Wage inflation? That’s the best it will do – regardless of how much consumer prices go up.

    Figure out the implications for RE.

    Hot debate. What do you think? Thumb up 13 Thumb down 5

    Sell-list so far 24.2%
    Projected month-end sell-list 22.7%

    Not sure what these were in 2008 but this has to be close.

    Hot debate. What do you think? Thumb up 7 Thumb down 4

    @mclovin

    year	sell	list	sell/list
    2001	1225	3395	36.1%
    2002	2248	3626	62.0%
    2003	1966	3810	51.6%
    2004	1954	3039	64.3%
    2005	1697	3360	50.5%
    2006	1924	3471	55.4%
    2007	1806	4067	44.4%
    2008	1819	4675	38.9%
    2009	762	3700	20.6%
    2010	1923	5147	37.4%
    2011	1819	4801	37.9%
    2012	1577	5756	27.4%
    Mean	1727	4071	42.4%
    median	1819	3755	47.5%
    

    Things normally pick up a bit in 2nd half of January, so it is likely the 7day moving average projection is going to underpredict both sales and listings for January end of month.

    Well-loved. Like or Dislike: Thumb up 21 Thumb down 1

    Best place on meth Says:
    73

    @mclovin

    Sell/list came in at 28% last January.

    It picked up the last 2 weeks.

    Hot debate. What do you think? Thumb up 9 Thumb down 4

    No Noise Says:
    74

    @VMD

    The Epoch Times should be open to your dissenting opinion:

    http://en.wikipedia.org/wiki/The_Epoch_Times

    Like or Dislike: Thumb up 4 Thumb down 3

    pricedoutfornow Says:
    75

    @Vote Down The Facts

    http://vancouver.en.craigslist.ca/van/apa/3542242736.html

    Actually is a really nice house, 3 bedroom SFH (no suite), not a tear down.

    Hot debate. What do you think? Thumb up 8 Thumb down 8

    First 9 working days of the year: sell, list, %

    2011: 637 1943 33%
    2012: 515 2438 21%
    2013: 494 2040 24%
    

    Well-loved. Like or Dislike: Thumb up 26 Thumb down 5

    real_professional Says:
    77

    http://mobile.bloomberg.com/news/2013-01-14/housing-is-hong-kong-s-biggest-issue-as-chief-sets-policy-goals.html

    Curbing home prices has become a major election issue.

    Leung may look to Singapore as he sets his policy goals. Seeking to battle record home prices, the island state’s government Jan. 11 announced measures that included higher stamp duties for home-buyers.

    Hot debate. What do you think? Thumb up 7 Thumb down 5

    real_professional Says:
    78

    That last link was in regard to hing kong housing

    Like or Dislike: Thumb up 3 Thumb down 5

    Deliverator Says:
    79

    21: @jesse:Note that as MOI gets higher its “power” diminishes — price changes are slightly less sensitive with higher MOI. Or put another way a 1% change in MOI at an MOI of 5 has a larger impact on price than a 1% change in MOI at an MOI of 10.

    Simple math. A 20% increase (1/5) in MOI is bound to have a greater effect than a 10% increase (1/10). Now, what happens with similar percentage increases, I wonder? I suspect the same would hold true, but at a slower rate of decay.

    Hot debate. What do you think? Thumb up 6 Thumb down 6

    Romeo Jordan Says:
    80

    You ninnies.

    Don’t you realize.

    It has begun.

    Hot debate. What do you think? Thumb up 13 Thumb down 14

    Achilles HELOC Says:
    82

    BCREA 2012 summary. Average BC home sales price down 8.3% from 2011. Oh Cameron Muir tries a bit to spin it half-heartedly, but this is massive. PTB pretty much acknowledging province-wide bear market underway with data to back it up.

    http://www.bcrea.bc.ca/realtor-education

    Hot debate. What do you think? Thumb up 11 Thumb down 2

    RealityCheck Says:
    83

    Let’s see how this comment is voted…

    Most posters on this blog want a 50% crash primarily so they can BUY at what they think is a reasonable price based on past statistics and income.

    Vote up or down.

    Hot debate. What do you think? Thumb up 35 Thumb down 28

    Groundhog Says:
    84

    @realitycheck

    I do plan to buy when prices correct but if they dont I’m fine with renting forever.

    I more want prices to decline so in the longterm we can have an economy with a solid foundation built on productive assets. This bubble has been a drain on society in many ways.

    Well-loved. Like or Dislike: Thumb up 36 Thumb down 4

    specuskeptic specuskeptic Says:
    85

    I’ll buy when it’s cheaper than renting. Check that reality.

    Well-loved. Like or Dislike: Thumb up 46 Thumb down 3

    FlipFlop Says:
    86

    I’d like to buy, but will only do so at a price that makes sense, so I’m waiting unitl I can start looking at homes I like thathave price/rent ratios that come in around 130 (I’d probably go to 150 if I find a place I really like).

    Hot debate. What do you think? Thumb up 12 Thumb down 4

    I have noticed that recently the foreclosed articles cannot be read on my smartphone. The Click Here to see does not seem to work on android. Luckily some of them get enough up votes to be seen.

    High prices cause people to leave the city to start families, cause young people to live at home too long…
    Bad for the local economy.

    Accidental Landlords can be bad for renters.

    Homes are for living in, not for speculating.

    Hot debate. What do you think? Thumb up 21 Thumb down 2

    Achilles HELOC Says:
    88

    @ RC

    Personally, I use this blog to figure out where the property market is before the MSM figures it out. That will provide me the opportunity to make trading profits (short or long) on securities related to Canadian real estate. I don’t need anyone (ever) to tell me that now is a good, bad or indifferent time to buy.

    Hot debate. What do you think? Thumb up 13 Thumb down 4

    Disbelief Says:
    89

    My Sister and her husbah were trying to sell their house they had it for sale for 3 months and didn’t even get a lowball offer. The price wasn’t too bad (relatively speaking of course) and was where the realturd said they should be. They just stated that the market seemed to be a little cool right now and they would just relist in the spring when the market should be much better. Flowers and sun and BLOOD IN THE STREETS!!!!! Yeah good luck with that…. Catch a falling knife.

    Well-loved. Like or Dislike: Thumb up 29 Thumb down 3

    patriotz patriotz Says:
    90

    “My Sister and her husbah were trying to sell their house”

    What were they going to do if it had sold?

    Like or Dislike: Thumb up 3 Thumb down 0

    patriotz patriotz Says:
    91

    “Most posters on this blog want a 50% crash ”

    I don’t expect a 50% (nominal) crash. I think Vancouver would see a 50% crash only if there’s a serious debacle in the real economy, which I don’t want.

    Hot debate. What do you think? Thumb up 12 Thumb down 5

    As this blog appears to be rolling to the next day soon, I may repost.

    For now – here are the thoughts on Vacant properties for list. Essentially, accross REBGV 19% of listed SFH are vacant and 31% of attached/apartments are vacant. So – 50% as the comment from Jesse is higher than actual but not completely out of reach for apartments. Some variations are noted.

    SFH Vacant stats (number/%)(in order or highest to lowest)
    Richmond 175 – 24%
    Van West 148 – 23%
    North Van 55 – 21%
    Port Coq – 22 – 21%
    Whistler – 39 – 21%
    Van East – 87 – 20%
    Burnaby – 71 – 20%
    etc . . .

    For Apartment/Attached, the following are the vacant properties
    Whistler – 177 (42%)
    Maple Ridge – 94 (34%)
    Van West – 522 (34%)
    New West 110 (33%)
    Van East – 169 (33%)
    Burnaby – 261 (31%)
    Richmond – 298 (31%)
    North Van – 115 (30%)


    So, even if you have people who just want to hold back, why would they when there is cash outflows to carry the property and the future outlook is for price decreases?

    Those who just hold off selling, where they are actually living in the unit, and are waiting for prices to increase, are bound to die living in that unit.

    Later today, I will post my predictions for the 2013 market based on my model. What is really helpful is the MOI/monthly price change graph. That has been a really good indicator of price movements. Thus, I will post the projected MOI movements for 2013 and then we can see where the prices fall. It is important to know that listing volumes are down from last year. This is sufficiently so that we may see 2013 inventory intersect the 2012 inventory possibly at the end of the Spring and then track 2012 for the rest of the year.

    This will be interesting to watch because once we are down 10-15% from peak prices – how can they continue to say things like prices are flat and this is a soft landing? I would say any decrease of 20% from the peak is not good as you immediately remove even more move-up buyers and put 1000’s of people underwater immediately.

    Well-loved. Like or Dislike: Thumb up 55 Thumb down 0

    Anonymous Says:
    93

    Hidden due to low comment rating. Click here to see.

    Poorly-rated. Like or Dislike: Thumb up 7 Thumb down 15

    Anonymous Says:
    94

    @RealityCheck # 83

    Even if prices in van dropped 50%, I still could not afford it. I am okay with being a renter my whole life.

    I want prices to fall 50% or more because I hate what this bubble has done to my city– in terms of the economy, society, and sense of place. Those three have all been degraded by the bubble. Economy suffers because companies can’t afford to open up here because of high cost of land. Society suffers in so many ways: higher socioeconomic inequality, more polarized society, racial tension, intervene rational tension (boomers v gen y). Sense of place suffers as old buildings with character and history are demolished to make way for ugly condos.

    Well-loved. Like or Dislike: Thumb up 41 Thumb down 2

    Anonymous Says:
    95

    “intervene rational tension” was supposed to be “intergenerational tension”. Damn iPad autocorrect!

    Like or Dislike: Thumb up 6 Thumb down 3

    patriotz patriotz Says:
    96

    “Social science offers a great deal of analytical tools and insights for our real estate bubble.”

    Your whole post can be summed up in three words:

    “Fundamentals don’t matter”.

    We’ve heard this before, and we know where.

    Well-loved. Like or Dislike: Thumb up 29 Thumb down 3

    Anonymous Says:
    97

    Hidden due to low comment rating. Click here to see.

    Poorly-rated. Like or Dislike: Thumb up 6 Thumb down 14

    Anonymous Says:
    98

    Can we please quit all the whining about getting ‘voted down’. Some people have such low self esteem they cry themselves to sleep at night if their post gets more down votes than up votes.

    Hot debate. What do you think? Thumb up 27 Thumb down 9

    Anonymous Says:
    99

    Just to clarify, I am not complaining (in posts #97 and 93) about being voted down per se. The issue for me is more about the range of viewpoints and types of information that get discussed on this blog. It’s not that my self esteem can’t take seeing my comments voted down. It’s that when comments are voted down, they get foreclosed on and you can’t read them (unless you take an extra step to click to read the foreclosed comments). I feel that most of my knowledge and what I can contribute to this blog is devalued because it is not quantitative analysis of real estate financials. So most of the time, I simply don’t post what I am thinking because I know it will be misunderstood and voted into foreclosure. So I read the blog, I gleen knowledge and insight from reading this blog. I greatly appreciate the statistical analysis of market fundamentals. I incorporate everything I learn from VCI into my understanding of Vancouver real estate. And for the most part, I keep my own knowledge and my own insights to my self because I know most people here do not appreciate/understand where I am coming from. My insights are actually very bearish. The ideologues of this site should love what I have to say because I am so bearish. But unfortunately, they just don’t understand me. It’s like we speak two different languages.

    It’s not whining about getting voted down. It’s more of a lament about the missed opportunity. This blog could be enriched and have a better and more thoughtful discussion of real estate, if we could get rid of some of the group think element.

    Hot debate. What do you think? Thumb up 11 Thumb down 10

    RealityCheck Says:
    100

    Hidden due to low comment rating. Click here to see.

    Poorly-rated. Like or Dislike: Thumb up 0 Thumb down 10

    I really wish people would stop using anonymous. I never know if you’re schizophrenic, different people or just come to a blog to argue with yourself. I generally skip past posts from anyone using anonymous. Pick a name, it’s not hard.

    Well-loved. Like or Dislike: Thumb up 27 Thumb down 2

    Group Masterbator Says:
    102

    Yeah. I want to see a 50% crash.

    Hot debate. What do you think? Thumb up 13 Thumb down 3

    you guys listening to BNN?

    it seems that everyone that’s at all involved in Real Estate has jumped on the “prices will not go down to what you’re hoping for because people don’t have to sell and won’t, and prices (not sales) are a better indication of what’s happening (not going down)” bandwagon

    this is all I’m hearing these days, again it feels like an inside decision to pump this info

    listings are down a bit, but not that much.

    If this means that all those empty condos and new builds are going to be rentals rather than listings then are rental market is going to be sweet! and i agree with the consensus this week that there does seem to be a lot more rentals on Craigslist these days.

    Well-loved. Like or Dislike: Thumb up 23 Thumb down 0

    The main (only?) group that doesn’t have to sell are:
    the lemming speculators

    The groups that have to sell, or have very strong pressure to sell:
    people moving far away (eg. work transfer),
    people divorcing,
    dead people,
    people who must upsize (eg. bigger family),
    people who need to downsize (eg. kids have moved out),
    people who have lost a job,
    people who want to live in a better area (eg. better income)

    Like others have said, it is the latter set of groups that will set the prices.

    I actually hope that the lemming speculators don’t realize the predicament they are in until all the others have had a chance to sell, after prices have inevitably fallen far, far lower.

    That would not only teach speculators, and the public, a lesson in Vancouver RE that would last decades to come, but also simultaneously mean the RE pumpers are hurting themselves with their current “nobody has to sell” campaign. If there is one thing you can count on with Vancouver RE pumpers, it is short-sighted idiocy.

    Well-loved. Like or Dislike: Thumb up 21 Thumb down 0

    asalvari1 Says:
    105

    Please correct me if I am wrong in any way, but…

    .. I remember last year (2012, jan) as :

    “Chinese are coming to buy our houses, quick, get ready!”

    – there were many interviews with realtors on this matter
    – there were people listing their houses at astronomical numbers, hoping for success.
    – we knocked out ourselves discussing this for long time.

    I am trying to say that last year, the listing flood started early, due to get ready for Chinese new year, when the HAM was expected to land in Vancouver. There were number of reports on why it did not materialize later..

    I guess this year people expectations are moderated, and they may opt to list a bit later.

    Well-loved. Like or Dislike: Thumb up 29 Thumb down 0

    the people that I know who are either listing or are already listed are:

    1- pregnant couple living in 1 bedroom- have to sell

    2- family member who just got a green card and is moving to the sun- has to sell

    3- a friend (not the smartest friend) who bought a townhouse in the westside before selling his house on the North Shore – desperately has to sell.

    4- a friend who bought a place in Calgary, renovated for a flip, and is now trying to sell, it’s been listed and sitting empty since August!- really wants to sell.

    I personally don’t know of any scenarios where someone I know has the ability to just take their place off the market and wait it out (whatever “it” might be)

    Well-loved. Like or Dislike: Thumb up 40 Thumb down 0

    “Bearish arguments that are constructed along these lines are not well understood on this blog and are often voted down”

    Maybe what you perceive as “group think” is an admonishment of qualitative arguments. The pedagogy here is “numbers”. You have found what you need that cannot be offered here on other mediums.

    I also resent the pejorative “bean counter”, but don’t ask me to quantify how much.

    Well-loved. Like or Dislike: Thumb up 21 Thumb down 1

    @yvr2zrh #92:

    Could you kindly inform us of your method in determining the listing vacancies? I am quite surprised of the 20%+ SFH and 30%+ for attached. When you first posed the question, I thought if the number is greater than 5-10%, we are f–ked. Now we are f–ked twice or thrice…

    Hot debate. What do you think? Thumb up 10 Thumb down 0

    @vangrl: Interesting anecdotes, and (3) made me realize that my previous list was incomplete. I missed noting that even speculators — *especially* speculators are the ones often forced to sell.

    An update to the working list (anything missed?)..

    ——————–
    Don’t have to sell:
    ——————–
    Dumb but well-monied lemming speculators
    People comfortably living in and paying off their homes (obvious)

    —————————————————
    Have to sell, or have very strong pressure to sell (aka – “the incoming price setters”):
    —————————————————
    broke lemming speculators (e.g. time’s up on the LOC, loan renewals)
    people moving far away (eg. work transfer),
    people divorcing,
    dead people,
    people who must upsize (eg. bigger family),
    people who need to downsize (eg. kids have moved out),
    people who have lost a job,
    people who want to live in a better area (eg. better income)
    Smart speculators (yes, as rare as leprechauns)
    (Coming in the next year or two:) people who can’t afford the rise from historically low levels interest rates

    Anything overlooked?

    Hot debate. What do you think? Thumb up 13 Thumb down 0

    Best place on meth Says:
    110

    There is a long list of people who have to sell, yet a completely empty list of people who have to buy.

    Sorry real estate cartel, you lose.

    Well-loved. Like or Dislike: Thumb up 45 Thumb down 1

    4444 4444 4444 4444 Says:
    111

    Just say no to low prices.
    But here is the catch:
    I put the curse on, set in in motion on the 4th day of the 4th month in 2012.

    Now if you can wait for 44 months for the bottom, be my guest.

    But be warned, prices will not be at this level again until 2044.

    Tick tock tick tock

    Like or Dislike: Thumb up 8 Thumb down 1

    yvr2zrh Says:
    112

    #108

    Each mls listing is flagged as tenant owner or vacant. Lots of owner are actually vacant but are HAM owned or 2nd property so it is likely even higher. I was shocked to see how many. This market is really screwed up.

    I have more stats coming including a statistical price prediction. I will post more later but I’m seeing prices at end of 2013 at December 2009 levels.

    Well-loved. Like or Dislike: Thumb up 38 Thumb down 0

    VanRant Says:
    113

    Thanks yvr2zrh,
    I often suspect all the unlit condos around Yaletown and the LM are speculative driven. Haven help Vancouver when the market crash big time.

    Hot debate. What do you think? Thumb up 19 Thumb down 1

    Anonymous Says:
    114

    ….There is a long list of people who have to sell, yet a completely empty list of people who have to buy…..

    I don’t have to sell! I can deplete all my savings and RRSPs before I have to sell to ensure that I really am bankrupt.

    Hot debate. What do you think? Thumb up 17 Thumb down 0

    HAM Solo Says:
    115

    What would it take to send Genworth MIC stock to zero?

    From Q3 Report:

    Insurance in Force: $294 Billion, with a B
    Shareholder’s equity: $2.9 Billion

    Amount of Insurance on high loan-to-value properties in British Columbia: Not disclosed.

    Estimate of above:
    -BC proportion of Canadian population: 13%
    -BC avg home price $514K as factor of national average: 1.46x
    -Therefore approximate weight of BC in MIC’s insurance book: 19%
    -Therefore amount of British Columbia mortgage insurance in force in Genworth MIC’s book: $55 Billion

    What would it take for BC to wipe out all of Genworth MIC’s equity:

    – Say 25% of BC high LTV mortgages fall into foreclosure = $14B
    – Say the market falls 30%, but there was 5% original equity in the MIC insurance customers’ properties.
    – Loss = 25% x $14B = $3.5 Billion …more than equity of $2.9B. MIC would be insolvent.

    ___

    We don’t even need to think about overbuilding Toronto condo’s, $800,000 McMansions rolling in tumbleweeds in the 905, fraudulently over-lent condo developments in that centre of financial propriety that is Montreal, or Ottawa’s record low sell-list ratios and burgeoning for sale inventory. We can do it all by ourselves in BC.

    That OFSI allows this company, whose insurance liabilities are subject to a 90% federal government guarantee, to not only pay, but raise its dividend, given what is happening to house prices, is absolutely shocking. Won’t be long now. The fuse has been lit.

    Well-loved. Like or Dislike: Thumb up 26 Thumb down 0

    Fraser Valley Stats: as of Jan 15
    Sales down 34.4% YoY
    Jan 2013: lists 1035, sales 187
    Jan 2012: lists 1210, sales 285
    Source: Garth’s blog

    Well-loved. Like or Dislike: Thumb up 34 Thumb down 0

    Anonymous Says:
    117

    @Jesse #107

    “Maybe what you perceive as “group think” is an admonishment of qualitative arguments. The pedagogy here is “numbers”.”

    Yes, I think you are correct. My point is when you admonish qualitative information, you close yourself off to a great deal of knowledge. I believe qualitative and quantitative methods have something important to offer to the conversation so I like to move between both. I think VREAA does a great job of combining qualitative and quantitative info. Qualitative anecdotes are front and centre over at VREAA but they can still talk about numbers.

    Sorry about the term ‘bean counters’. You are correct to say that is a pejorative. I didn’t mean to be disrespectful. I’m just trying to talk about how people with different kinds of expertise like to approach the same topic in a different way.

    Like or Dislike: Thumb up 2 Thumb down 1

    Lorenzo Cavanaugh Says:
    118

    Yes, buyers have a lot of control on prices. But, they compete against each other! Buyers are their own worst enemy. There are enough properties out there for all of the buyers. Yet, if one person bids – that attracts others to bid against the first potential buyer. I mean you feel like saying “piss off – find your own property”

    Like or Dislike: Thumb up 2 Thumb down 3

    I saw an amusing commercial yesterday from the BC government showing a bunch of dominos falling with the global financial crisis and when the dominos landed on BC the BC domino stayed standing. Maybe showing someone kicking a can down the road would have been more appropriate.

    Well-loved. Like or Dislike: Thumb up 31 Thumb down 0

    @Lorenzo Cavanaugh

    Buyers only compete against each other when they believe that they are underbidding on the property. They don’t mind making a higher offer because they believe the real value of the property is (or soon will be) even higher than what they are offering. That is, the house is priced at a million, but they believe it will be worth two million in ten years time, so they don’t mind paying 1.5 million. In their heads, they are still making a half a million dollars. In a falling market, you don’t get that unless the house genuinely priced below market.

    Like or Dislike: Thumb up 5 Thumb down 0

    painted turtle Says:
    121

    @Lorenzo Cavanaugh
    I am so sick of this market that I have no intention to over bid.
    I would rather rent for ever than overpay a penny to speculator.
    This, too, is part of market psychology.

    Hot debate. What do you think? Thumb up 15 Thumb down 1

    Anonymous Says:
    122

    On the topic of group think/quantitave vs qualitative:

    I think something important to consider is that the bear/bubble argument is in the process of going mainstream. There are more people who are bears today than 5 years ago. I bet the stats for VCI web page visits show that many more people are visiting this site today than 5 years ago. This is because people are waking up to the reality that real estate prices don’t go up forever and that Vancouver really isn’t the best place on Earth. Not all these recent bear-converts are going to be quantitative thinkers who analyze MOI, price to rent, etc. People will have their own individual (qualitative) experiences that lead them to understand that we are in a bubble and prices are unsustainable (even if they don’t phrase it like that). As the bear argument goes mainstream, you are bound to have increasing ideological diversity within the bear camp. People from across the political spectrum are going to realize that we are in an unsustainable bubble. So I think part of the tension here is that the old blog dogs want to keep a pretty narrow frame on the discussion (just talking numbers) whereas the recent converts are going to think about things in a way that less relies on statistics and more relies on personal experiences/anecdotes/qualitative info.

    To me, the title of this blog–Vancouver Condo Info–makes me think this is a site where we discuss INFORMATION about Vancouver condos. To me, information includes both quantitative and qualitative. Maybe, if the admin just wants to restrict this blog as a place to discuss statistics/quantitave info only then that should be made more clear.

    Like or Dislike: Thumb up 5 Thumb down 4

    YVR2ZRH: “I was shocked to see how many. This market is really screwed up.”

    I wasn’t. This has been my experience when viewing properties. Often properties are listed as occupied but are “sparsely” occupied (ie little to no furniture) or staged. Opening the cupboards provides verification of true occupancy.

    I don’t know if this is more prevalent now than when the market was tighter.

    Hot debate. What do you think? Thumb up 13 Thumb down 1

    Best place on meth Says:
    124

    @JR

    “Maybe showing someone kicking a can down the road would have been more appropriate.”

    A burning condo tower would have sufficed.

    Hot debate. What do you think? Thumb up 16 Thumb down 2

    Chem Guy Says:
    125

    @yvr2zrh #92
    Whistler has the highest vacancy, not suprising, but this reminded me of this place that I lived at during the 2010 Olympics.

    6151 Eagle Drive

    http://www.whistlerrealestate.ca/whistler-residential-property/detail.aspx?id=4623

    The place is under a court ordered sale for $935,000. We rented it for business furnished during the Olympics for $20K/month. The house is unbelievable in it’s finishings yet $935K gets you a shack in Van…

    BC Assesment on this place is $1.15M. The place was listed for $3.5M after the olympics.

    Hey Vancouver, you can expect this next!

    Well-loved. Like or Dislike: Thumb up 34 Thumb down 1

    “My point is when you admonish qualitative information, you close yourself off to a great deal of knowledge.”

    If you mean it’s possible to lose perspective looking only at numbers, I suppose so, but the real danger is, in my view, losing perspective by ignoring the data.

    Well-loved. Like or Dislike: Thumb up 25 Thumb down 3

    Anonymous Says:
    127

    @JR

    Regarding the BC Government commercial showing falling dominoes:

    Yes, I chuckle every time I see that commercial. The BC hubris of that commercial is appalling. The falling dominoes are supposed to represent economic problems. In that commercial, dominoes from around the world and then across North America are all falling into each other. The last domino left standing is BC and it doesn’t fall. It seems to be saying, economic problems are, by definition, external to BC. BC cannot have any home-made economic problems (like a real estate bubble, for example). All the risks to the BC economy are external to the province. As long as the government doesn’t let those external economic shocks affect BC then BC will be fine. It is simply impossible for the government of BC to be the author of BC’s economic woes. This thinking seems to be somewhat in line with the recent MSM meme that real estate won’t crash unless there is some external catalyst (interest rates, unemployment) to bring about the crash.

    Well-loved. Like or Dislike: Thumb up 23 Thumb down 2

    Anonymous Says:
    128

    @Jesse

    “If you mean it’s possible to lose perspective looking only at numbers, I suppose so, but the real danger is, in my view, losing perspective by ignoring the data.”

    Of course, you think that way! You are a quantitative thinker. That is your epistemology/world view. That’s fine.

    But not everyone sees the world primarily in terms of numbers. I need not repeat the epistemological debate between quantitative and qualitative that has gripped academia for at least the past 30+ years. Suffice to say that a great many people have been trained by our universities to analyze things from a qualitative perspective. There are quantitative thinkers and qualitative thinkers. Both have something valuable to contribute. And DATA itself can either be quantitative or qualitative.

    Hot debate. What do you think? Thumb up 10 Thumb down 10

    Anonymous Says:
    129

    @Jesse

    “losing perspective by ignoring the data”.

    It’s telling that you consider data, by definition, to be quantitative. That right there shows your quantitative world view. Universities offer entire courses on QUALITATIVE data analysis.

    Hot debate. What do you think? Thumb up 5 Thumb down 8

    patriotz patriotz Says:
    130

    “To me, information includes both quantitative and qualitative.”

    Sure it does, and nobody on this board has any problem with people reporting their own personal anecdotes about the rental or sales markets or what have you.

    What we have a problem with is people who think that subjective parameters, which is generally what people mean when they say “qualitative”, can trump the numbers. That is a classic argument of bubble deniers. Being able to golf and ski on the same day is not an input to a sustainable price/rent.

    Hot debate. What do you think? Thumb up 18 Thumb down 3

    patriotz patriotz Says:
    131

    “Universities offer entire courses on QUALITATIVE data analysis.”

    How about giving us a link to one so we know what you’re talking about.

    Hot debate. What do you think? Thumb up 14 Thumb down 3

    And DATA itself can either be quantitative or qualitative.

    Sure, and sometimes qualitative data is the best you can do because that’s all you’ve got.

    But let’s call a spade a spade for a second: quantitative data trumps qualitative almost every time, if you have the choice. If you don’t believe that, go watch a poker game between a statistician and a guy who bets entirely “on his gut”, and see who wins.

    Hot debate. What do you think? Thumb up 21 Thumb down 2

    Anonymous Says:
    133

    Hidden due to low comment rating. Click here to see.

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    Anonymous Says:
    134

    @Yalie

    “If you don’t believe that, go watch a poker game between a statistician and a guy who bets entirely “on his gut”, and see who wins.”

    Going with your gut is not the same thing as relying on qualitative info. You are completely misunderstanding what the word qualitative means if you think it means relying on gut feelings or some sort of sixth sense.

    In a poker game, qualitative info would be things like how the guy across the table smirks everytime he gets a good hand, how the guy likes to make big bets when he is bluffing, ie. learning to read body language to see if someone is bluffing.

    My point is that quantitative and qualitative both have something important to offer. The very best poker player would combine both–counting cards and knowing the statistical odds of getting different cards PLUS being able to read people and determine whether they are bluffing. Now that is a poker player who is going to clean up at the table!

    Hot debate. What do you think? Thumb up 6 Thumb down 8

    Anonymous Says:
    135

    @Patriotz:

    Here is a link to a graduate level course outline at UBC on qualitative data analysis:

    http://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=5&ved=0CE8QFjAE&url=http%3A%2F%2Fedst.educ.ubc.ca%2Fsites%2Fedst.educ.ubc.ca%2Ffiles%2Fcourses%2F504%2520outline.2011.doc&ei=SdL1UOyPCs7xigLE7IDoCw&usg=AFQjCNGn2UI8gBUf_NrtT48_erZfwoWUJw&bvm=bv.41018144,d.cGE

    Just google the terms “qualitative data analysis ubc” –you will see all sorts of courses and discussion groups and software programs. If you are actually doubting that qualitative analysis even exists then you are truly embarrassing yourself and showing the limits of your knowledge.

    Any outsider reading this discussion and looking at how the comments are being voted on, absolutely would see that this group is plagued with group think. What I am saying is not all that radical. I’m just about as neutral as Switzerland in the quantitative vs qualitative debate. I’m saying both epistemological positions offer something important.

    You guys are the radical ones when you say that quantitative trumps qualitative and when you doubt that qualitative data analysis even exists. I actually didn’t know you guys were that narrow minded. I’m a bit shocked. You write like intelligent people buy you seem like you haven’t set foot in a university in more than 20 years.

    Hot debate. What do you think? Thumb up 12 Thumb down 16

    Anonymous Says:
    136

    By the way, my comment #127 about the falling dominoes was entirely qualitative analysis. Right now, that comment has 8 up votes and no down votes. So I guess there is hope for this blog yet.

    Hot debate. What do you think? Thumb up 4 Thumb down 11

    “Both have something valuable to contribute. And DATA itself can either be quantitative or qualitative”

    “Qualitative” data only stands up when gathered using proper design of experiment. Social science, one would think, includes properly applying the scientific method. Not sure what your beef is.

    Hot debate. What do you think? Thumb up 12 Thumb down 2

    shriller Says:
    138

    @ Patriotz,

    I’m of the opinion that SFH could fall 50% nominal but I don’t think the same is true for condos or townhouses which I don’t think have appreciated as much since 2008. But even here I anticipate a 30% or greater fall. Of course the devil is in the timing and I don’t have a good timeline forecast going forward. It’s more of a steady-state analysis.

    I suspect that the withdrawl of CMHC stimulus via NHA-MBS securitization of bank mortgages and increases in the (effective) property tax to offset less income from development will disproportionately affect the SFH market. Either that or services from city hall will contract and make the amenity value of the SFH lower.

    And I am rather worried about the BC economy going forward. The HST debacle, falling revenues and rising costs are going to squeeze the government. And I don’t see an export sector ready to expand which I suspect will be the policy focus of the Feds. Since households are saddled by debt I don’t see an engine of growth. Sadly, I don’t think the next decade is going to be BC’s time to shine. Alberta, Ontario, and the Prairies are better placed.

    But it’s been a nice party for those invited.

    Hot debate. What do you think? Thumb up 13 Thumb down 2

    Ludvig von Mises Says:
    139

    You guys should know that economics has never been just about numbers. There have been efforts to make it so for a very long time, but a number of thinkers have argued that it is not possible.

    See e.g. von Mises in 1933: https://mises.org/epofe/c2sec8.asp

    To predict the direction of the Vancouver real estate market based exclusively on your ratios and charts is impossible.

    Hot debate. What do you think? Thumb up 10 Thumb down 9

    Anonymous Says:
    140

    “By the way, my comment #127 about the falling dominoes was entirely qualitative analysis. Right now, that comment has 8 up votes and no down votes.”

    Great. Now you won’t have to cry yourself to sleep tonight.

    Hot debate. What do you think? Thumb up 9 Thumb down 4

    Ludvig von Mises Says:
    141

    Here is another article you might want to look at, about behavioral economics.

    http://www.acacia-avenue.com/…/1304424872IJMR53(2)Gordon_fpp.pdf

    Like or Dislike: Thumb up 3 Thumb down 3

    Groundhog Says:
    142

    “You guys should know that economics has never been just about numbers. There have been efforts to make it so for a very long time, but a number of thinkers have argued that it is not possible.”

    Ditto. Behavioral Finance was “invented” in the early 90’s, but historically before the early 1900’s economics was far more a social science. The last century many have attempted to turn it into a physical science all about about numbers and laws but it really hasn’t turned out too well I must say. The economics they teach in schools is a very small subset of what is actually out there.

    There are now trends moving towards the more social science aspects of it (ie. behavioral finance).

    Hot debate. What do you think? Thumb up 10 Thumb down 0

    patriotz patriotz Says:
    143

    “Here is a link to a graduate level course outline at UBC on qualitative data analysis:”

    It is obvious from the list of topics that it is aimed at sociological/anthropological fields and is completely irrelevant to an area such a finance where you have hard numbers on asset prices and earnings.

    Hot debate. What do you think? Thumb up 13 Thumb down 2

    patriotz patriotz Says:
    144

    “To predict the direction of the Vancouver real estate market based exclusively on your ratios and charts is impossible.”

    People predicted the US crash using exactly the same methodology as we use.

    What’s so special about Vancouver?

    Well-loved. Like or Dislike: Thumb up 23 Thumb down 2

    patriotz patriotz Says:
    145

    Hat tip to happy renter at HHV:
    Whistler real estate: a bargain?

    Could it be that Whistler has become more than a ski and party destination, and is now a place to hang your hat year round?

    Move over Squamish, they’re now selling Whistler as a commuter market.

    And who is the writer?

    Kerry Gold’s Summary

    Feature writer; freelance journalist; ghost writer; author; business writer; real estate writer; pop culture columnist; music and entertainment specialist; news reporter; working on another book.

    The plan is to continue writing for newspapers, magazines, and on-line. As well, I’ll continue writing ghost projects, especially autobiography and memoir.

    Who better to pump BC’s newest ghost town.

    Hot debate. What do you think? Thumb up 8 Thumb down 2

    Anonymous Says:
    146

    A while back there was a post about some immigration policy that was recently cancelled. It involved immigrants giving the Canadian government a lump sum of money for a few years and in turn they were granted some rights. Does this sound familiar? If anyone recalls those details I would appreciate seeing that again.

    Like or Dislike: Thumb up 5 Thumb down 3

    Best place on meth Says:
    147

    I am absolutely confident that there will be at least 35 sales today.

    No doubt about it.

    Well-loved. Like or Dislike: Thumb up 23 Thumb down 2

    Ludvig von Mises Says:
    148

    Hidden due to low comment rating. Click here to see.

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    Not much of a name... Says:
    149

    @LVM…

    If you focus exclusively on numbers you might well lose sight of “qualitative” change, such as change in values and attitudes which affect the market you are trying to predict. I’m not saying that has happened in Vancouver, but it might, and you would likely miss it.

    But these “qualitative” changes do not negate the simple fact that it is more expensive to buy than rent.

    Hot debate. What do you think? Thumb up 13 Thumb down 2

    Ludvig von Mises Says:
    150

    “But these “qualitative” changes do not negate the simple fact that it is more expensive to buy than rent.”

    True, but that doesn’t mean a thing if, for dog knows what reason, there has been a strong cultural shift toward valuing home ownership. Again, I’m not saying that has happened, but it could, and if you focus too hard on the price/rent ratio you would miss it.

    Hot debate. What do you think? Thumb up 10 Thumb down 14

    Not much of a name... Says:
    151

    So what? Should people continue to overpay for RE just because everyone else is doing it? I’ll stick to my numbers, thanks.

    Hot debate. What do you think? Thumb up 19 Thumb down 3

    Groundhog Says:
    152

    Being mostly a quantitative, numbers driven person I have to say….There is room for both, and both are equally important.

    Now wheres PaulB with numbers?

    Like or Dislike: Thumb up 7 Thumb down 1

    Bull! Bull! Bull! Says:
    153

    The swiss guy delivers another great post! Ask your self… in these 4 pages of comments, how many are worth reading? H

    Hot debate. What do you think? Thumb up 7 Thumb down 14

    Island Guy Says:
    154

    Hoping for some help with the price to rent ratio for my place….

    The 2012 assessment on the 3.5 bedroom, 2 bath, renovated, half acre place with waterfront views on the Island is $490,000…

    I currently pay 1300 in rent….yes, I am on the Island and not in Vancouver.

    I believe that on a monthly basis, the price to rent ratio is 376, or on a yearly basis, 31.

    Its my understanding that if the monthly ratio is 150 or less its good to buy, and if the yearly is 15 or less its better to buy…

    Just trying to get a sense if I have a good deal or not. Any comments would be extremely appreciated!

    Like or Dislike: Thumb up 5 Thumb down 1

    Yeah, good deal. Even if your rent was double it would be a good deal for you to rent instead of buying.

    Just consider his return. It’s likely around $10K/year after property tax, maintenance etc. On $490K that’s roughly 2% before tax. Even with double the rent it’s under a 5% before tax return

    Like or Dislike: Thumb up 5 Thumb down 4

    Bag it and tag it Says:
    156

    154 Island Guy
    Your price/rent ratio indicates that you are smart to be renting that place and not buying. The price/rent won’t tell you if you’re getting a good deal on your rent though. That can only be done by analyzing comparable rentals in the area.

    Hot debate. What do you think? Thumb up 8 Thumb down 5

    pricedoutfornow Says:
    157

    Couple people I`ve also seen who “need to sell“- they bought a SFH before selling their townhouse, and after listing over the summer with no sale, decided to rent the place out. I live in the same neighbourhood as both of these-1 I see still looks pretty vacant to me (blindd drawn in all windows whenever I walk by), the other looks like he`s back to advertising on craigslist-3 months later-except now his rental price is $300 MORE than what he originally wanted! Great strategy…looks like neither has had any luck with selling or renting…tough luck, I know they are both young families. Guess they should have sold before buying a SFH but some bloody realtor convinced them we live in such a `prime area`they would get whatever freakishly high price they asked for. Sad.

    Hot debate. What do you think? Thumb up 21 Thumb down 4

    Vote Down The Facts Says:
    158

    “To predict the direction of the Vancouver real estate market based exclusively on your ratios and charts is impossible.”

    Predicting the direction is quite possible, it’s just the timing that’s incredibly hard. Markets can remain irrational longer than you can remain solvent, or whatever.

    Well-loved. Like or Dislike: Thumb up 21 Thumb down 1

    New Listings 266
    Price Changes 55
    Sold Listings 61
    TI:12961

    http://www.paulboenisch.com

    Well-loved. Like or Dislike: Thumb up 119 Thumb down 0

    Achilles HELOC Says:
    160

    Well, you can lead a horse to water, but you can’t make him buy an overpriced condo

    Hot debate. What do you think? Thumb up 13 Thumb down 1

    goingdown Says:
    161

    This realtor started a blog about prices dropping. What do you think his objective is?
    jefffeaver.wordpress.com

    Hot debate. What do you think? Thumb up 7 Thumb down 5

    “Being mostly a quantitative, numbers driven person I have to say….There is room for both, and both are equally important. ”

    Definitely room, and value, for both. Numbers tell us Vancouver has been overpriced since 2005 at least, but it still continues to be so, even more so, 7 years later, although prices and prospects seem to be sloping down, for the second time now, so clearly something the numbers are not capturing is at work. Like Austrian economics, the numbers are right, but the timing seems elusive and predictions are not bearing out in the real world, which is the second critical component of any economic analysis. Emotions, public opinion, sentiment, momentum, are all very important in markets.

    I am a value investor at heart, so I am happy with numbers. When something is undervalued, it is attractive, when it is overvalued I sell it, regardless of its supposed prospects for future growth, being in the realm of speculation, because there are plenty of other undervalued opportunities to invest in instead, so I do not worry about “missing out”. The fools can play musical chairs, chasing that last dollar until the last second. However, it is still an interesting game, as is the “qualitative data”. But the “qualitative data” should say something useful, beyond “well, here I am”, which is most of the running out of land/everyone wants to live here/always goes up/etc stories end up being.

    Take “lots of people coming to lower mainland in 2012″. Ok, that’s great. Oh, 50,000? But tells me nothing on its own. How does that compare to the last 10 years? How many are outbound (ie, net gain)? How many households is that? What age bracket? What socio-economic status? Temp foreigners (lots of native Russians, Serbians and Indians with contractor badges milling around my office)?

    At VCI we have a wealth of background and historical information to draw on to make those connections with new quantitative data. New month’s sales and listings come in, we can plug that into the 10+ year chart. The other kind of data, not much context. Some of Jessie’s most interesting comments have had to do with immigration numbers and employment. Obviously it is a very powerful driver in real estate. New people have to either buy a house or rent one. Those leaving are vacating a unit, or have to sell their house asap. Everyone else is just trading houses between each other. But we don’t have much of that kind of data, little granular historical numbers, and not much experience in the lead/lag time. Official releases are quarterly or annual, while PaulB posts daily sales numbers, so more frequent and timely updates would have to come from insiders, if they are collected real time at all.

    Last week someone posted a link to a story about a moving company, Atlas I think it was, showing the flow of where their trips originate and terminate at, and the western Canada blob was a net-out. That was interesting, but that was just a tiny snippet. What are we to make of that? Will there be a follow up story next week? month? quarter?

    Like or Dislike: Thumb up 5 Thumb down 1

    604 Receding Gains Says:
    163

    When does negative sentiment (which is seeping into most media) turn into panic and resulting spike in listings? We haven’t seen that yet.

    One theory: Financially stressed owners/sellers are staying cool right now and relying on their savings and HELOCs to carry mortgage debt. But let’s say they don’t blink and continue to either list at a high price or not list at all. As soon as this money runs dry then they basically switch into delinquent owner status. So there is one statistics for us to watch – a spike in mortgage delinquencies (instead of a spike in listings).

    Next comes the foreclosure notice and forced sale. That takes another 90 days or more in BC (maybe 180 days) so this could all take a long time to play-out before we see high-profile foreclosure news.

    Once we start seeing foreclosure statistics creeping up then negative sentiment will surely shift to fear and an urge by distressed owners to sell quickly – crashing prices. Other non-stressed owners presumably sit tight and simply ride out the decline. It is those owners on the edge who will lead the panic and crash prices.

    And Boomers? That’s a wild card. Most aren’t going to be financially distressed so they may just sit there like frogs in boiling water as this market evaporates around them. A nice image.

    Who knows. I’m just kicking around ideas on a blog….

    Hot debate. What do you think? Thumb up 11 Thumb down 4

    ReadyToPop Says:
    164

    The way Jim Flaherty sees it, his July changes to Canada’s mortgage rules are having the desired effect on the housing market.

    “Well, yeah,” the finance minister told The Globe and Mail. “I don’t mind prices coming down a bit, too.”

    Jim Flaherty on home sales dive: ‘I don’t mind prices coming down a bit, too’

    The question I’m asking is, why they were allowed to get so high in the first place?

    Hot debate. What do you think? Thumb up 19 Thumb down 0

    Romeo Jordan Says:
    165

    Hidden due to low comment rating. Click here to see.

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    BRITTANNY Says:
    166

    Dead Cat. No bounce.

    Hot debate. What do you think? Thumb up 8 Thumb down 3

    @goingdown
    This realtor started a blog about prices dropping. What do you think his objective is?

    How about you being honest (I know it’s difficult for a realtor) and telling everybody it’s your blog? I can see you’ve been promoting it on Garth’s blog as well…

    Hot debate. What do you think? Thumb up 10 Thumb down 3

    Anonymous Says:
    168

    Devore: “so clearly something the numbers are not capturing is at work. ”

    It sounds like you have not been paying attention. There have been many quantitative changes including CMHC rules, interest rates, house hold debt levels, ownership rates, etc that have pushed prices higher and now trending lower. There is no mystery to what is happening. It looked pretty similar in other real estate bubbles around the world.

    Like or Dislike: Thumb up 4 Thumb down 2

    Anonymous Says:
    169

    “This realtor started a blog about prices dropping. What do you think his objective is?
    How about you being honest (I know it’s difficult for a realtor) and telling everybody it’s your blog? I can see you’ve been promoting it on Garth’s blog as well…”

    LOL so obvious.

    Anyway Jeff if you want to attract people to a blog you will need more than one post. Try providing insider information around here and you might get some hits.

    Like or Dislike: Thumb up 7 Thumb down 2

    RealityCheck Says:
    170

    Hidden due to low comment rating. Click here to see.

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    BLISTINGAGENT Says:
    171

    CBC National leading with a story on how house prices are staying high while sales crater.

    Like or Dislike: Thumb up 3 Thumb down 1

    BC Stats released their population estimates for BC CMAs and census agglomerations. There are two interesting graphs to consider:
    http://twitpic.com/bvmall
    http://twitpic.com/bvmbl0

    The first is population changes as measured mid-year, updated to 2012 for major CMAs and the rest of BC. The second is under construction for major BC CMAs, updated to November 2012.

    Vancouver CMA has seen an increase in under construction and has bucked the trend when it comes to population growth in 2012 compared to the rest of the province. This should not be surprising. As under construction increases, this will be a draw for those seeking construction and related employment.

    Vancouver population growth has remained relatively robust through 2011-2012 compared to the early part of last decade. This has been at the expense of the rest of the province that has been hurting on the RE front, with sales, starts, and under construction in a prolonged malaise.

    I have surmised that the weakness in 2012 was in part due to lower population growth into BC and Vancouver. This has some validity based on the data, but looking at the city-specific data again I’m surprised at how little Vancouver CMA population has dropped relative to other areas of the province and relative to the nadir in the early 2000s. Vancouver CMA starts look to have peaked and under construction will start peaking soon as well. That will likely mean, once under construction starts to drop, jobs will start drying up and population growth will start to drop further. That will be a further headwind for prices unless something comes to fill the void.

    I’d appreciate others’ thoughts on this.

    Like or Dislike: Thumb up 5 Thumb down 2

    Island Guy Says:
    173

    Reality Check

    “For those touting the its cheaper to rent than buy…consider:

    Well, in year 1, 50% of your payment is going towards paying off principal, in year 16 majority of your payment is going towards principal, in year 26 you can leave a paid off house for your kids.

    A Renter would have nothing after 26 years. His/Her kids would have to start from scratch with respect to housing.”

    Well, I may be an anomaly, but with just under 300k in the bank and solid job prospects going forward, I am not really concerned about a “brick and mortar” legacy for my kids. I am focusing on giving them a nice portfolio for them to manage and grow.

    My kids will learn the freedom of liquidity, and the importance of vultching on good investment opportunities. My wife’s parents vultched in TO in the 90s after watching their soon to be neighbour’s home values halved, and I will pass on the importance of following such opportunities.

    My wife’s parents are now retired early, because they followed fundamental analysis and invested at the right time in both the stock market and real estate. Of course, if they had followed the whole “renting is throwing your money away” and followed the herd, they would still be trying to make up for their loses.

    Lets get this straight – I will buy, when the numbers look right. Unfortunately, the legacy of the recent buyers will be one of financial ruin for their families.

    Of course there is a lesson there for their kids – life is simply too short to make all the mistakes yourself, so learn from the mistakes of others.

    Well-loved. Like or Dislike: Thumb up 23 Thumb down 1

    Groundhog Says:
    174

    @RealityCheck

    “A Renter would have nothing after 26 years.”

    Ha!

    Like or Dislike: Thumb up 8 Thumb down 1

    604 Receding Gains Says:
    175

    @Jesse

    The macro data isn’t detailed enough. I’ve seen CMHC data that breaks down demand for housing by type and links this to age demographics. the conclusion was immigration was essential otherwise the natural rate of growth and inter-provincial migration would not be enough to sustain housing demand (ie household formation would drop).

    Like or Dislike: Thumb up 2 Thumb down 1

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    Days missing	0
    Days remaining	11
    7 Day Moving Average: Sales	49
    7 Day Moving Average: Listings	238
    SALES	
    Sales so far	555
    Projection for rest of month (using 7day MA)	535
    Projected month end total	1090
    NEW LISTINGS	
    Listings so far	2306
    Projection for rest of month (using 7day MA)	2620
    Projected month end total	4926
    Sell-list so far	24.1%
    Projected month-end sell-list	22.1%
    MONTHS OF INVENTORY	
    Inventory as of Jan 15, 2013	12961
    MoI at this sales pace	11.90
    

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