FFFA! Price! Decline! How low?

Hey! You made it to the end of another work week!

Now it’s time for us to do our regular end of the week news roundup and open topic discussion thread for the weekend.

Here are a few recent links to kick off the chat:

How low will house prices go?
Banks see slowing mortgage growth
Vancouver prices soften
13k party time!
Bad time to be a realtor?
Pricing property in a falling market
Majority want to invest but cant afford to
Goodbye Waldorf
Sales sunnier outside Vancouver
A relaxing 80 minute drive
Gov loses student loan info

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

Sort by:   newest | oldest | most voted
R
Guest
R
3 years 3 months ago

So I wondered… Am I the only person who finds it more convenient to use open houses to check out different condo buildings and layouts in an area I’m thinking of renting in than actually troubling property managers/tenants?

Sometimes I even get given snacks!

(I’m a buyer, possibly, if SFH prices fall ballpark 50-60% in the next few years. Otherwise I’ll just move to Seattle.)

real_professional
Member
3 years 3 months ago
Hello realtor, my old friend I’ve come to talk with you again Because listings softly creeping Reduced home values while I was sleeping And the retirement that was planted in their brain Still remains Without the sound of buying In open houses I walked alone Narrow driveways of faux cobblestone This listing even claims the street lamp Toronto, Vancouver? One’s cold, one’s damp When my eyes were stabbed by the flash of a reduced sign That split the neighbour’s spine And touched the sound of crashing From a yellow helicopter I then saw Thirteen thousand listings maybe more People looking… Read more »
Loon
Guest
Loon
3 years 3 months ago

My 2 year old farted this morning. Said it was a bubble. Brilliant!

Q
Guest
Q
3 years 3 months ago

It turns out the maple leaf on the new plastic $20-bill is not a Canadian maple leaf. It is a leaf from a Norwegian Maple, which is considered to be an invasive species in Canada.

http://www.cbc.ca/news/canada/ottawa/story/2013/01/17/ottawa-foreign-maple-leaf-irks-botanists.html

Many Franks
Guest
Many Franks
3 years 3 months ago
Some ugly stats on Canadian consumer behavior: As of last September, Canadian households were in debt to the tune of $474 billion. That equates to one and a half year’s net income per household. In British Columbia, the average household consumer debt was $38,837 (the highest in Canada). Remember that this does not include mortgage debt. We have car loans, personal loans, lines of credit, and credit cards. Although most of us are managing to stay out of serious trouble, we are not doing all that well overall. About half of us with credit card debt either always or often… Read more »
Left already living in San Diego
Guest
Left already living in San Diego
3 years 3 months ago

23 degrees and sunny here in San Diego.
Are you still enjoying golfing, sailing and skiing on the best place on earth, all at the same day?

gordholio
Member
3 years 3 months ago

#2, real_professional: Awesome, just awesome.

YLTNboomerang
Member
3 years 3 months ago
Can anyone explain to me why REIT’s are doing so well if we are in a bubble? I’m the biggest bear around and I get that many of them are solid because they are focused on commercial RE but I’m hearing more and more about them focusing on residential properties. I get that there are still cashflow positive properties in the middle of Canada but as more cash flows into these organizations eventually they are going to have to buy where the inventory is (TO, VC, etc.) and where there is no way they can be +ve. Even if these… Read more »
Troll Feeder
Guest
Troll Feeder
3 years 3 months ago

Real Professional, that was amazing. Can you archive that on vancouverpeak? If you don’t I will. Any musicians reading this that want to perform that? I’d love to hear it.

crashcow
Member
3 years 3 months ago

real_professional,

Nicely done!

Someone did a similar one for stock brokers:
http://www.youtube.com/watch?v=0ufxcMqsZpM

“Hello Wall Street my old friend
I’ve come to beg for business again
Monthly payments slowly creeping
Just sold a car I thought I was keeping”

Groundhog
Guest
Groundhog
3 years 3 months ago

@YLTNboomerang

Investors seeking yield in a ZIRP environment

Short'em High
Guest
Short'em High
3 years 3 months ago
YLTNboomerang Says: January 18th, 2013 at 9:18 am … if we have a RE crash, do they have to mark their assets to market? No, but the market will mark and certainly overshoot on the price of their debt instruments, equity shares, and credit default derivatives… What RE flipper bulls fail to realize about their trading in physicals is that there is no possibility of creating a hedge or protective trailing stop order. Flippers are going to lose all their gains and more. With REITs at least there is a 50/50 chance of getting out without losing your shirt. You… Read more »
Patiently Waiting
Member
Patiently Waiting
3 years 3 months ago

Reading the complaints in this Craigslist post would make you think of some rat-infest 70s building off a bad part of Commercial Drive:

http://vancouver.en.craigslist.ca/bnc/hou/3524540722.html

Well, its actually about a Burnaby condo building completed only last year.

Building today’s slum today.

Affinity by Bosa.

patriotz
Member
3 years 3 months ago

“Even if these guys are positive, if we have a RE crash, do they have to mark their assets to market?”

They mark their assets to market on the balance sheet every year, but that doesn’t affect their earnings. REIT’s buy properties for income not speculation.

As Groundhog said that real problem with REIT’s is that the people who buy the units (i.e. the stocks) are paying too much for them. There is nothing the management can do about that.

elvince
Guest
elvince
3 years 3 months ago
@YLTNboomerang 2 things will influence how much profit a (correctly operated) REIT makes: interest on its debt and rent revenue. Obviously, if interest rates rise too much, REITs will suffer, but some of them got into really long term mortgages at low rates, so they do have their bets somewhat edged on that front. The rent revenues can fluctuate, and this is mostly how you find out which REIT is better managed. Vacancy rate can kill profits pretty fast, but then again, many commercial or office buildings are leased for many, many years. Most companies don’t want to move all… Read more »
TPFKAA
Guest
TPFKAA
3 years 3 months ago

@ Real Professional:

That’s some seriously funny shit!!! (And funnily serious too).

Well done.

chilled
Member
chilled
3 years 3 months ago

Left already living in San Diego Says:
January 18th, 2013 at 8:24 am

23 degrees and sunny here in San Diego.
Are you still enjoying golfing, sailing and skiing on the best place on earth, all at the same day?

===========

Say hello to Kalluk, Tatqiq and Chinook for me, OK?

stompy
Guest
stompy
3 years 3 months ago

Re: #13

“Unit 7 0 6 is an illegal factory, also managed by A D V E N T . Mr. Stompy upstairs owns a 247 factory. He does his laundry after 11pm, sleeps at 3am EVERY night and wakes up at 4am.. constant noise and stomping!”

Sounds like a brothel?

Anonymous
Guest
Anonymous
3 years 3 months ago

…What a douche! I’ll bet his calculator is still in the package..

Ya, but not because he couldn’t use it. It’s because he couldn’t figure out how to open the package.

trash crash alert
Guest
trash crash alert
3 years 3 months ago
Looks like we are on the BUST cycle: Billionaire investor George Soros has been an active promoter of the relevance of reflexivity to economics first propounding it publicly in his 1987 book.[1] He regards his insights into market behaviour from applying the principle as a major factor in the success of his financial career. Reflexivity is discordant with equilibrium theory, which stipulates that markets move towards equilibrium and that non-equilibrium fluctuations are merely random noise that will soon be corrected. In equilibrium theory, prices in the long run at equilibrium reflect the underlying fundamentals, which are unaffected by prices. Reflexivity… Read more »
Groundhog
Guest
Groundhog
3 years 3 months ago

@trash crash alert

Alchemy of Finance?

Short'em High
Guest
Short'em High
3 years 3 months ago
Attn: REIT pickers, finance accounting believers, and high ratio book experts. How does one pick a REIT that won’t gap down one day by 50% and never come back? Is there an unstated assumption here or is this forum simply a hangout for a different sort of irrational believer? One thing that surprises me (maybe I shouldn’t be surprised), is when RE stock advice is posted on this forum, nobody ever mentions a stop loss exit price/percent. What we do see are endless remarks about accounting practice, management genius/stupidy and so on. It is remarkable that some who consider physical… Read more »
Bull! Bull! Bull!
Guest
Bull! Bull! Bull!
3 years 3 months ago

@real_professional that’s genius.

if that song was submitted to a crowd sourcing site i would help fund it with some of my vast real estate profits.

i want to see that sung on youtube by a professional musician someday.

Anonymous
Guest
Anonymous
3 years 3 months ago

…which is considered to be an invasive species in Canada….

Though you were referring to Realtors for a minute.

gokou3
Guest
gokou3
3 years 3 months ago

US policymakers didn’t foresee their “US-style” housing crash. Will our counterparts do any better?

http://finance.yahoo.com/news/fed-missed-warning-signs-2007-183654997.html

Anonymous
Guest
Anonymous
3 years 3 months ago

#6 Left already living in San Diego
enjoy while you can, cuz in a few years, SD will be under water like NY during Sandy.

Anonymous
Guest
Anonymous
3 years 3 months ago

Patiently Waiting.
Are they still peeing infont of your doors?

Anonymous
Guest
Anonymous
3 years 3 months ago

Woo hoo, Vancouverites. It’s time for Dine Out Vancouver again. Go out and spend more money after maxing out your credit cards last month.

Seriously, I don’t get why we get excited about $38 menus (or $28 for that matter). Let’s say each orders ONE glass of wine ($7-8), with taxes and tipping, it’s close to $120 for two.

Not much of a good deal, is it…

We are such a bunch of suckers…

elvince
Guest
elvince
3 years 3 months ago
“It is remarkable that some who consider physical RE risky because of the likely and sudden price gap (crash), think little of the same problem in RE stocks. ” I think this was more or less aimed at me. I don’t consider physical RE risky because of the sudden and likely price gap (crash). I think it’s a sure loss because it doesn’t turn a profit and won’t for the lifetime of the building (if bought at current Vancouver prices). Some REITs are turning a profit as we speak. See the difference here? Profit. Earnings. Making money, not burning it.… Read more »
VMD
Member
3 years 3 months ago

Having followed local Chinese RE forums for a couple years, I’m surprised by the lack of bullish pumping in 2013. There is Zero talk on Chinese New Year “HAM” buyers so far this year, which is quite unusual. Even the perma-bulls are either staying silent or saying “it’ll get better next year.”. None of them are publicly predicting a spring turnaround of Van RE market.

Guess we can file this under “qualitative observation”

I’m betting on subdued CNY sales this year, where “HAM” will be more focused on selling than buying. We’ll find out in less than a month.

HAM Solo
Guest
HAM Solo
3 years 3 months ago
@ patriotz REITS, in theory could have to write down assets, based on their accountant’s view, but point taken, a distribution cut would probably send them tumbling well before they actually wrote down their office towers and commercial properties. IMHO, REITs will lag the housing downturn and so may not be fertile ground for shorting for some time. Before REITs go down, you need the problems in housing to spread to the broader economy and even then there will be a lag between a weaker rental market for office and commercial space and moves by the REITs to reduce their… Read more »
VMD
Member
3 years 3 months ago

Sub-550k Richmond SFHs showing up on MLS
11407 Kingcome ave
Asking 548,800
Assess 666,600

11251 Kingsbridge Dr
Asking 549,800
Assess 637,300

Ziggy
Guest
Ziggy
3 years 3 months ago
I dug a bit deeper to get more information about the number of dwellings in Vancouver. The 2011 government census data indicates the following: Vancouver population: 603 502 Apartments Over 5 Stories: 70 270 Apartments Under 5 Stories: 87 430 Total Apartments: 157 700 What we know: 1) BC Hydro account usage data from 2006 and 2007 was used to classify condominium units as “empty” if their electricity usage levels were below a threshold of 75 kilowatts (Kw) of electricity per month or 100 Kw per month. When the use threshold is 100 Kw per month, the estimate of empty… Read more »
gokou3
Guest
gokou3
3 years 3 months ago

Re #32

“Sub-550k Richmond SFHs showing up on MLS
11407 Kingcome ave
Asking 548,800
Assess 666,600

11251 Kingsbridge Dr
Asking 549,800
Assess 637,300”

Two properties 80m from each other. Can’t help but think they are owned by same HAM “investor” now in distress.

mclovin
Member
mclovin
3 years 3 months ago

Good Garth post today about Kelowna

http://www.greaterfool.ca

mclovin
Member
mclovin
3 years 3 months ago

This may have been posted a few days ago but worth the read. Reality has clearly set in.

http://www.theglobeandmail.com/news/national/due-to-a-steep-sales-drop-vancouvers-home-prices-have-softened/article7398676/

patriotz
Member
3 years 3 months ago

“I don’t consider physical RE risky because of the sudden and likely price gap (crash). I think it’s a sure loss”

Exactly right. Investment risk means difficulty in evaluating fundamental value – i.e. in figuring out an appropriate price to pay relative to estimated earnings.

RE in Vancouver is not any more risky than it ever was, just a lot more overpriced.

paulb
Member
3 years 3 months ago

New Listings 215
Price Changes 58
Sold Listings 54
TI:13289

http://www.paulboenisch.com

UBC in Crisis Mode
Guest
UBC in Crisis Mode
3 years 3 months ago

These two ladies, mentioned in the Globe and Mail article “West-side Vancouver sellers holding out for deep-pocketed buyers”, made millions (if not tens of millions) from Chinese buyers.

http://www.theglobeandmail.com/news/british-columbia/west-side-vancouver-sellers-holding-out-for-deep-pocketed-buyers/article7381772/

It does not matter much if their clients are holding up or not, they are not staving, which cannot be said for other realtors (11,000?).

http://sydneydeng.mlslink.mlxchange.com/?Page=3602957

mclovin
Member
mclovin
3 years 3 months ago

14K Party by the end of the month!

Can anyone provide the Jan month end inventory for since 2008?

Can someone also provide the peak listings inventory and the month in the last several years? Did we ever get over 20,000?

Ralph Cramdown
Guest
Ralph Cramdown
3 years 3 months ago

“How does one pick a REIT that won’t gap down one day by 50% and never come back?”

I’ve got a better idea. Pick 100 different dividend payers that PROBABLY won’t blow up. When one of them does, say “c’est la vie,” while continuing to invest the excess profits from the remainder into more payers.

Bag it and tag it
Guest
Bag it and tag it
3 years 3 months ago

30 VMD
I agree about your prediction for HAM and CNY. I think the HAM boom last few years was fueled by the corrupt getting out of China before regime change. Now I think most HAM will want to wait at least a year or two to get a feel for the new regime before trying to flee….and when they do, I’m sure they’ll go somewhere with stable RE and not Van.

VMD
Member
3 years 3 months ago
Here are the sale stats so far in Jan: Year Sales YoY% 2013 713 -14% 2012 816 -23% 2011 1054 - If we don’t count the first day of January from both ’13 (possibly aberrant # due to spill-over from Dec 31, when no sale was recorded on MLS) and ’12, then we actually have 617 vs 771 = -20% YoY sales decline. Last January sales picked up around Jan 19. Avg daily sales Jan 1-18 was 60/day, while Jan 19-31 was 100/day. We can expect an uptick in sales starting Monday, but I doubt we’re going to average 100… Read more »
Groundhog
Guest
Groundhog
3 years 3 months ago

@Mclovin,

Heres last year:

paulb. Says:
January 31st, 2012 at 10:41 am
New Listings 278

Price Changes 88

Sold Listings 112

TI:13442

AND:

paulb. Says:
February 1st, 2012 at 11:11 am
Whoa…

New Listings 305

Price Changes 74

Sold Listings 38

TI: 13368

Just picked these up from the comments sections and took a quick read through them…..Everyone thought these #’s were pretty horrible last year, this years #’s are shaping up to be a bit lower.

Groundhog
Guest
Groundhog
3 years 3 months ago

Also, hardly any month-end expirations last year.

YLTNboomerang
Member
3 years 3 months ago
Thanks for all the info on REiTs, my thought process for inquiring was thinking about potential short options in the future. I made the decision last year only to invest in industries I am directly involved in as I’ll likely see trends before joe investor. I don’t invest in tech stocks, random high dividend yield co’s, ETF’s or Garth’s preferred (though I have bought a tonne of the debt my employer has issued). I am obsessed with RE and bubble watching so figure with my new 2012 strategy I really need to proffers the best way to profit from the… Read more »
YLTNboomerang
Member
3 years 3 months ago

Can anyone recommend any good advisors who have a strategy to profit on the downside? I don’t have the time and sense to effectively manage a net short position on Canadian RE (and don’t feel comfortable playing on the short side with more than 10k). I’m fine with fee based and am prepared to invest about 100K into a well developed short strategy.

real_professional
Member
3 years 3 months ago
@YLTN Boomberang: THIS IS NOT ADVICE JUST THOUGHTS: honestly – lots of people claim that they know how to short the Canadian consumer. One recent anti real estate advisor was suggesting shorting banks. In my opinion it is way too early – difficult to isolate the real estate exposure – and if you look at XFN.TO, it wouldn’t have been the best strategy, quite the opposite. What everyone has to remember is that the Canadian consumer is actually not very Canadian at all. A Canadian gets into his/her Honda (HMC), drives to Safeway (SWY), buys a latte at Starbucks (SBUX),… Read more »
VHB
Member
VHB
3 years 3 months ago
Total days	21
Days elapsed so far	13
Weekends / holidays	5
Days missing	0
Days remaining	8
7 Day Moving Average: Sales	56
7 Day Moving Average: Listings	249
SALES	
Sales so far	713
Projection for rest of month (using 7day MA)	451
Projected month end total	1164
NEW LISTINGS	
Listings so far	3010
Projection for rest of month (using 7day MA)	1990
Projected month end total	5000
Sell-list so far	23.7%
Projected month-end sell-list	23.3%
MONTHS OF INVENTORY	
Inventory as of Jan 18, 2013	13289
MoI at this sales pace	11.41
jesse
Member
3 years 3 months ago

January to April aggregated

year sell  list ratio
2006 12243 18030 68%
2007 11634 19270 60%
2008 10710 22616 47%
2009 7407  16529 45%
2010 10850 24405 44%
2011 12221 23138 53%
2012 9816  23207 42%
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