Open Topic

FFFA! mortgage rates and buyer fatigue

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154 Comments

It’s that time of the week again!

The end of the week is when we do our regular news round up and open topic discussion thread for the weekend. Here are a few recent links to kick off the chat:

–Young Canadians pessimistic about owning
–10th best large city in Canada
–Inventory graph updated
–Canada plans limits of mortgage insurance
–Feds ok $50b for private mortgage guarantees
–40 most expensive on the sunshine coast
–Tough challenges for Richmond sellers
–Debt man lectures on debt
–The price of luxury defecation
–Something rotten in the state of Denmark

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

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Landbaron

@149

I too went to some open houses over the weekend, no more busy than any other sunny March day. Mostly looky loos out for fun like myself.

I also noticed a lot more open houses than years past and realtor signs filled the street corners! I actually think some of them were moving others to have a better street view.

I’ve never seen so many desperate realtors and I’ve been in and out of real estate for (only) 13 yrs. Right now I’m out…

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Spec

@N “That’s a good point. For the undisciplined, a house can be a the opposite of forced savings. I know a few people who owe absurd amounts of money because they were able to borrow against their house. And when prices go down, they will have less than zero.”

Anyone in the market for a boat, a Bimmer, or any number of luxury items will also be rewarded for their patience…..

Perhaps we’ll see open house/garage sale combo-events.

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Anonymous

Today, in one of the east van open houses, the home was empty, but the filthy carpets (cream colour, or dirt, i could not tell) were still in place. there sat mrs RE agent, chatting with Chinese investors. no one else. the SMELL of mold was SO strong, I closed the door after a one second peak, and left. Mrs RE ran after me: “come in, we are open!” I replied ” sorry, but the smell is….” She did not look surprised ” ok!” she said, going back inside to take care of HAM.
She had not even made the effort of ventilating the tear down before the open house… wtf?

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N

“Much cheaper. I used to think the “forced savings” argument of homeownership was a valid one. For spendthrifts, it forced them to save money. Financial innovation has ruined that with the availability and proliferation of HELOCs.”

That’s a good point. For the undisciplined, a house can be a the opposite of forced savings. I know a few people who owe absurd amounts of money because they were able to borrow against their house. And when prices go down, they will have less than zero.

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crashcow

@133 Anonymous

“A huge segment of the vc.info doomers hysterically latch on to these things.”

There are a few posters here that resemble the macro gibberish of mish & zerohedge – just note those handles and skip their posts. This site has some high quality posters that make it worth reading (including paulb, VHB, b5baxter, VMD, zrh, etc).

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Anonymous

Went to several open houses in east van. A lot more busy than i expected.

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Anonymous

@battle with an idiot
@groundhog
I love the why rent when you can buy argument that realtors make. I just throw this one back at them: why buy food when you can grow your own? The answer to that (rhetorical) question seems obvious, but when you think about it the answer is the same as why you would rent over owning in this market. I get shelter for cheaper than owning and I don’t have any of the hassles or risks of owning.

My parents bought a home when interest rates were 20+% and every renewal they made rates had dropped and the debt they purchased in 1970s dollars was being paid off with much higher 1980s incomes. We’re at the opposite end rates and incomes now.

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midnite toker

Wow How long does it take the average condo buyer to save $30000?

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Anonymous

What’ll happen first bears? Vancouver housing corrects, or the Canucks win the Stanley Cup?

Here’s a hint, neither one will happen.

This city’s slogan should be: “there’s always next year.”

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Groundhog

@Anonymous1

“Groundhog, it is different here.”

Perfect

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Anonymous1

Groundhog, it is different here. Where in the world can you go to a first world country, leave your spouse and kids there that will get free health care, free education, and free child benefits because of low income. Furthermore, both sets of parents and grandparents can come along. The husband can continue to work overseas and avoid Canadian Taxes. After 3 years all the adults except the husband can apply for citizenship. After 3 years, the family can go back to their motherland and choose to come here if they want to. It’s all economics. So it is different here because there is no other country on the planet except Canada that allows for this. I was thinking of starting a company in India whowould recruit families with a net worth of >$10,000,000. Give them a presentation and let… Read more »

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mac

I’ve just heard that Rennie has applied to the City to reduce SOME of the remaining OV condos by 20%. Has anyone seen any substantiation of this in the media?

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Anonymous

In her mind, real estate has only every benefited people. When asked what about the 1/4 underwater in their mortgage in the US, she responded that everyone did short sales; that the banks wipe out the difference between assessed value and what they own; give the owners back that money after the sale so no loss to the homeowner; and that you only have a blip for 2 years on your credit.. As a result, there is no risk, and real estate always goes up.

—

I think that the rules around the credit blip being only 2 years changed and I am pretty sure the banks do not give you back the original equity because hey, lets all go with short sales then….

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Groundhog

“Because it’s cheaper. That’s the bear case in three words. Seriously.”

Much cheaper. I used to think the “forced savings” argument of homeownership was a valid one. For spendthrifts, it forced them to save money. Financial innovation has ruined that with the availability and proliferation of HELOCs.

If someone is trying to make a long-term financial case for ownership, there isn’t one right now.

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Groundhog

@Battle With An Idiot Here are US and Norway home prices going back to 1890 you’re looking for http://www.frbsf.org/publications/economics/letter/2012/el2012-19.html I’ve also seen charts with Australia and the Netherlands going that far back, same thing. Sounds like the salesman you’re dealing with has all her talking points down pat. Aside from all the math and everything involved in rent vs. buy comparison, some people just don’t get that renting has it’s pros, and ownership has it’s cons. As a renter I don’t have to deal with any repairs and maintenance of the house itself and appliances. Dishwasher breaks? No stress whatsoever. My utilities, internet, cable, are all taken care of by someone else, I never have to deal with customer service reps. Don’t like my neighbourhood? I can move with little costs involved. I can go on and on, but the… Read more »

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patriotz

“If it does get approved and it involves losses to depositors”

The banks are insolvent and cannot pay back their depositors. If the banks fail, insured depositors become creditors of the Cyprus government and uninsured depositors become creditors of the bankrupt banks.

Just like in Canada and the US as a matter of fact. Well not quite just like, the Cyprus government might not have the resources to pay off the insured depositors because they can’t print money like we can.

But why can’t people understand that in a situation like this it’s absurd for all depositors to expect to get all their money back?

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patriotz

She also fell back on the same tired arguments – “you have to lives somewhere, why pay rent”

Because it’s cheaper. That’s the bear case in three words. Seriously.

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Groundhog

@Anonymous1

Recordbreaking for the month or ever?

For some reason I doubt what you are saying, maybe because I’ve been hearing similar things since November. Maybe this time is different.

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Groundhog

What is the deal? Has it been approved by Cyprus parliament? If it does get approved and it involves losses to depositors, how does that fare for banks in other Eurozone countries? Who in their right mind would keep deposits in banks in Spain, Greece, and Italy?

Glad the problems solved.

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Battle With An Idiot

Fellow Bears, I must apologize in advance for the lengthy comment, but I sure could appreciate some help here. Had a stubbornly long debate and argument with a realtor (used house salesman) the other day, and even when confronted with rational economic arguments, fundamental analysis, stats, and historical cases, she was unable to see the light and fell back on her own personal experience and did the tangential dance to the extreme. She also fell back on the same tired arguments – “you have to lives somewhere, why pay rent” why aren’t the feds going after consumer debt since it has such a high interest rate; Canada has the best banking system in the world; banks will only lend up to 43% of your income, etc” My personal favourite – She claimed Statistic Canada stats (debt to income ratios) were… Read more »

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Anonymous1

Record breaking tentative sales day…just got off the phone with a Cent21 broker who I have known for a long time.

These sales will show up in stats in a few weeks. I guess the weather did it today.

If this keeps up, a correction is only gonna happen in our dreams.

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Anonymous

Cyprus has a tentative deal. The sky isn’t falling. When will people learn? Brinkmanship is game the politicians play. Fiscal gap, debt ceiling, sequestration, etc, etc. We’ve seen this countless times before.

It’s just infotainment pron for the uninformed. Not surprising a huge segment of the vc.info doomers hysterically latch on to these things.

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patriotz

“It’s the only fundamental that is based entirely on fact…”

Prices and rents aren’t facts?

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space889

– regardless of how much of that $2M is in land redevelopment potential, the fact they are describing a teardown as a desirable home in Vancouver is a major problem in my view! Add in the fact that they claim the price to income ratio on that home is 10 means that a family making $200K+/yr, likely in top 5% of family income in GVRD, should be happy and desire a teardown is also a major problem. I simply can’t see how any normal people can really claim with a straight face that this means Vancouver is cheap! Or even paid shills because it is getting beyond ridiculous.

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@get armed

Oh shut up. This isn’t ‘Merica. Canada is a caring nation and I trust our government to take care of us.

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