Crumbling real estate markets in BC

Ben Rabidoux over at The Economic Analyst has a post focusing on the falling markets in Vancouver and Victoria.

As VHB points out the last two years saw 2 & 3 days in February with daily sales under 100.  We’re now 5 sales days in and we’ve seen 3 sales days under 100.

Sales better pick up in the remaining 15 business days or the market is at risk of having a worse february that 2009, the worst year in recent memory.

We’re not hearing much about it in the local media, but the real estate market in Vancouver is seeing rising listings, sagging sales and dropping prices.

Over at Vancouver Peak 604x points out the lack of reasonable reporting on this topic in the local media and brings up the topic of conflict of interest.

He’s put together a form letter with contact info for the broadcast standards council.  Here’s an excerpt:

We all remember the false and misleading behaviour of the news media during the technology “bubble” of the late 1990s and early 2000s. In both the US and Canada many people lost substantial sums of money due to the cheerleading of certain media outlets. After the dust settled it was found that many of these media outlets and “economic correspondents” had conflicting interests – owning the stock of companies they were actively reporting on and actively pumping.

The same is happening today in Canada with news reporting of the current real estate market. Many reporters and news organizations, most notably Vancouver’s branch of Global TV (CTV network), are delivering hyped up media and false/misleading reports on the status of the real estate market in BC. I believe this is also true for CTV’s Toronto reporting. A defining characteristics of such coverage is (i) one-sided reporting (i.e. “prices are about to take off”), and (ii) interviews with real estate agents and staff of real estate companies who have a clear conflict of interest in the current market. The behaviour goes beyond sensationalist headlines designed to boost circulation and sell ads – these news correspondents appear to be actively pumping the market for personal gain.

Read the full post here.

 

 

 

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Joe Q
Guest
Joe Q

The market is getting so bad its almost scary. Yikes.

Q
Guest
Q

I think this is awesome. Some lady down in Florida filed papers to claim “Adverse Possession” of the vacant, foreclosed house right next to her house. She then rented the house out for $1500 per month. The lady (who is a writer for a Florida newspaper) collected $13,500 in rent for a FREE house before she was arrested for identity theft. But it sounds like she is going to fight the charges based on Florida’s Adverse Possession laws which go back hundreds of years and allow people to lay legal claim to unoccupied real estate.

http://www.palmbeachpost.com/news/news/crime-law/cops-say-west-palm-woman-rented-out-neighbors-fore/nWGRF/

Q
Guest
Q

@Joe Q

I say bring it! I’m not scared of a real estate crash at all. I think the prospect of real estate prices that go up year after year for eternity and never-ending waves of HAM washing ashore to be far scarier than any real estate crash.

Bull! Bull! Bull!
Guest
Bull! Bull! Bull!

“As VHB points out the last two years saw 2 & 3 days in February with daily sales under 100. We’re now 5 sales days in and we’ve seen 3 sales days under 100.”

why do people entertain such useless statistics?

VHB
Member
VHB

Actually, we have only had 4 days so far in February, so we are at 3 out of 4.

LocustLand
Guest
LocustLand

What kind of loser RE bull spends ALL day every day lurking around and posting useless crap on a RE bear site?
A) RE agent with absolutely nothing better to do and is in denial
B) recent specu-vestor who is now crapping his pants
C) HAM sponge who is wondering where all the HAM went
D) and most humorous – all of the above

Anonymous
Guest
Anonymous

Argh…hate how realtors are pumping Teranet’s Canada-wide gain of 3% in 2012.

Groundhog
Guest
Groundhog

@LocustLand

I enjoy having Bull! Bull! Bull! around as it reminds me how ridiculous people sound when then try to argue against the risk of a crash in Vancouver.

The funny thing is, the most credible bullish arguments on this site (or anywhere else for that matter) have come from people like Jesse and VMD when they’ve listed out scenarios that could possibly be bullish.

RealktyCheck
Guest
RealktyCheck

40% drop here?

Hahahah. You got to be insane!

A $600,000 house in Surrey with 2 basement suites dropping to $360000??

I’ll buy them all well before that price. The rental income of $3000 a month will provide a stable income after the mortgage is paid!!

An Observer
Guest

Good luck getting financing for the rental when all of your equity has been destroyed plus it is easy to say “when house abc gets to price xyz then it is an obvious time to buy”. The problem is that when house abc gets to xyz price there will be no appetite for real estate at all, much less as an investment. Oddly enough when this feeling of disgust towards real estate occurs it will be a good time to buy

UBC in crisis mode
Guest
UBC in crisis mode

I think CRTC should be involved in investigating the misleading media:

http://www.crtc.gc.ca/RapidsCCM/Register2.asp?lang=E

DaMann
Member
DaMann

“40% drop here?

Hahahah. You got to be insane!

A $600,000 house in Surrey with 2 basement suites dropping to $360000??

I’ll buy them all well before that price. The rental income of $3000 a month will provide a stable income after the mortgage is paid!!”

Wonder how that rental income will look like at 5-6-or 7% interest rates? Bloody hell people are thick. The only reason why that house in Surrey is “worth” $600k right now is because the borrowing costs are pretty much free right now. Let’s see how these clowns manage to hold on when rates start going up. I know people that are on the EDGE of their affordability limits right now because they maxed out as much mortgage as they could at 2.85% variable rate! LoL they are screwed.

Short'em High
Guest
Short'em High

@RealktyCheck

What if there are no renters in Surrey for your “bargain” acquisition? What if a 40% drop results in a knock on effect of massive layoffs and people simply move back to wherever they came from?

The dream of getting something for nothing on a “sure thing” will evaporate before your eyes. This IS what happens of course. People will “buy the dip” and get wiped out.

So, please DO buy all you can afford. The more money committed, the more there is to bleed out… When the time comes, whatever you made in the past (or saved on rent) will be a drop in the bucket compared to what is taken out by those who know more than RE.

Bull! Bull! Bull!
Guest
Bull! Bull! Bull!

@LocustLand, @Groundhog

personal abuse doesn’t advance your argument.

N
Guest
N

@RC

You might, but then you have to make sure all the suits are tenanted, fix the boiler etc. (or pay a management company to do so). It might work out to be a good investment, but if prices don’t go up, it won’t be a great investment. Books like Rich Dad Poor Dad were premised on getting people to make these kind of investments which, at the time weren’t popular because they take a lot of work and there is quite a bit of risk involved. Real estate is a lot less sexy when the price isn’t going up.

Bag it and tag it
Guest
Bag it and tag it

Love the form letter. One thing I’d add is the conflict on interest media outlets have with their main source of advertising revenue.

gokou3
Guest
gokou3

“40% drop here?

Hahahah. You got to be insane!

A $600,000 house in Surrey with 2 basement suites dropping to $360000??

I’ll buy them all well before that price. The rental income of $3000 a month will provide a stable income after the mortgage is paid!!”

You assume rent to stay the same in that situation?

Yalie
Guest
Yalie

40% drop here?

Hahahah. You got to be insane!

A $600,000 house in Surrey with 2 basement suites dropping to $360000??

I’ll buy them all well before that price.

Indeed you will.

I always wondered who exactly are those people who buy on the downward slope of a real estate bubble, oblivious to the fact that the bottom is still well off. I think we now have the answer.

Q
Guest
Q

Vancouver’s 10 Worst Rental Buildings:

http://www.vancouversun.com/news/metro/Photos+Vancouver+worst+rental+buildings/7928879/story.html

Even one building on the West Side made the list: 104 W. 11th Ave.

Democrass
Guest
Democrass
The comment below by Q is a sad example of how so many Canadians think that criminals are awesome. It’s the cultural trait behind the fact that there have been essentially no white clollar crime prosecutions and convicions in Canada. It’s also why judge’s scentences are habitually law and the reason why if you are scentenced to 4 years, you get out in 4 months. “I think this is awesome. Some lady down in Florida filed papers to claim “Adverse Possession” of the vacant, foreclosed house right next to her house. She then rented the house out for $1500 per month. The lady (who is a writer for a Florida newspaper) collected $13,500 in rent for a FREE house before she was arrested for identity theft. But it sounds like she is going to fight the charges based on Florida’s… Read more »
Many Franks
Guest
Many Franks

@Democrass: If she successfully manages to claim adverse possession and has the paperwork to back that up, I’d say there’s plenty to admire about it. If it’s a low-grade Craigslist rent scam, then yeah, lock her up.

Q
Guest
Q
@Democrass: The article I linked to does not say the woman was convicted of any crime. All it says is that she was charged. She remains innocent until proven guilty. And she may have a sound legal defense is Florida’s adverse possession laws so what she did may in fact not be criminal. So it’s slanderous for you to portray her as a convicted criminal. Far from being criminal, squatters’ rights have a long history in English Common Law (from which Canadian and American legal systems are based) that goes back centuries. The notion that the people who are occupying, using, improving, investing in, farming, cleaning, maintaining, even paying property taxes on otherwise unclaimed, unoccupied, unused property gives people legal claim to property has a long history in our legal system. These principles are partially what underpinned the colonization of… Read more »
Q
Guest
Q
I think Chicago is going to have a hard time loving Canada pretty soon. The first four items on this list are about to disappear: “Other reasons Chicago admires Canada: -Our banks are stable. -The housing market “never went pop.” -Debt and spending have been kept at more reasonable levels. -The “gold-rush-style energy boom.” -The loonie trades at par with the U.S. dollar. -Prime Minister Stephen Harper’s “ambitious trade agenda.” (However, the editorial notes that many Americans have never heard of him). – Half of the Chicago Blackhawks are Canadian. “Land of the north, Chicago is calling to you,” the piece concludes. “Calling your sesame bagels, smoked meat and Tim Hortons double-doubles. Calling your low rates of gun crime, and universal health care. Calling your oil, especially your oil. We hope some of that Canadian good fortune rubs off on… Read more »
RFM
Guest
RFM

For links to all of Ben’s recent presentations, go to:

http://vancouverpeak.com/Thread-Ben-Rabidoux-says

Democrass
Guest
Democrass

Here is Garth Turner’s take on what is happening in Vancouver (BC) right now:

What’s happening now in BC is the slow-mo correction this blog’s warned about for a few years. It won’t follow the US shock-and-awe model of 70% craterings within a year or two. There will not be millions of foreclosures, or weekly auctions of unwanted homes on the courthouse steps. Rather, sales slide a bit, then slide a lot. Prices flatline before easing lower in a long and cascading arc with an unknown bottom. Local real estate boards will do all they can – as they are now – to mask the trend. No politician will address it. The media will fudge. The best hope is that the losses and disappointment stay silent, lest private hurt goes postal.

http://www.greaterfool.ca

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