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FFFA! Inventory, History, Taxes and Hype!

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Hey, It’s the end of another work week in the province formerly known as the best place on earth!

Let’s do our regular end of the week news round up and open topic discussion thread for the weekend.

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

–Inventory chart updated
–Found a clue!
–Bidding wars in a slump?
–Historical price/rent to ’84
–EA closing vancouver studios
–Loophole for the PTT
–The Hong Kong tax treaty
–Canada vs US fundamentals
–Ready for the next global slowdown?
–Island foreclosures
–Silverstoned

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

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healthy dinner recipes

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income brackets

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Short'em High

#117. Good find. The party is over!

I wonder if those home debtors saving their last few dollars of credit realize that cutting back local consumer spending is self defeating from the standpoint increased unemployment and higher rental vacancy rate.

Now starts the vicious cycle of participants endlessly reducing consumption to make debt payments. Ironically, this will tend to reduce the property value they felt was making them rich enough to spend borrowed dollars in the first place.

At some point it becomes futile to live in the city solely for the purpose of paying off a home debt prison that will never again be worth what was spent on it.

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YLTNboomerang

“raising questions about the Vancouver market”

http://blogs.theprovince.com/2013/04/27/loads-of-canucks-playoff-tickets-available-raising-questions-about-vancouver-market/

I throw out another reason nobody is buying Canucks tix, declining housing prices makes buying expensive non tangible goods with the heloc unattractive.

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BWilson

I think we should note that in 2001 there were 19 sales days in April, so we’d actually be below 2001 levels on a sales/day basis.

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Short'em High

@#111. A reminder for Canadian Fonzi Scheme buyers. The next unemployment report from Statscan is due on Friday May 10 at 5:30am Vancouver time. A second consecutive bad unemployment number will be attracting the sharks – not just the one telling us they’ve got Canada in their sights from the pages of the Globe and Mail. All of them! It won’t matter how many rental suites a residential property has if prospective tenants can’t find work and markets know that real collateral is very weak in Canada. It also won’t matter if a property is 1 million or 100 million. Those millions will be tossed around like a wine cork in the ocean when markets catch wind that collateral is weak and the bubble has finally popped. Hedge funds have been waiting years for the Canadian paper wealth destruction bonanza.… Read more »

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Turkey

@VDTF,

You see a “mortgage helper”, but perhaps the buyer wanted a “granny flat”?

“Granny flat” is exactly what would happen. This place was a screaming disaster, with mold and structural problems. It needed to be knocked down and rebuilt, and if you tried, I’m not sure the city would issue you a permit.

BC assessment says $721.7k, with the comment “Property has more than one structure; Property Details are for main building only.” The listing was for $839k. Is that glorified toolshed worth $120k, plus financing costs, plus the enjoyment of your backyard?

I appreciate the alternate perspective, but this is not the right hill to die on.

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Vote Down The Facts

You see a “mortgage helper”, but perhaps the buyer wanted a “granny flat”?

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Turkey

@vanpire, I’ve got a similar story from Strathcona. A few weeks ago, a SFH with a musty old “laneway shack” in the backyard sold after about a week on the market. Asking price was $839k. (Is anyone able to look up the selling price? The listing is V997565, address 545 Atlantic St. Photos here.) Treating a “mortgage helper” (basement suite / laneway potential) as a bonus seems profoundly backwards to me. The additional income potential (usually exaggerated, and without expenses) results in a higher asking price, and in return, the lucky new owner is forced to play landlord for whoever passes for a tenant these days. If I were buying, I’d be looking for somewhere with *no* secondary suite potential to avoid sort of wishful thinking. But, hey, if the new owners want to heap their money in the backyard… Read more »

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vanpire

I can tell you what IS selling. I was looking at a listing for a 4 br townhome on the Surrey/Langley border and contacted the realtor to arrange a viewing. Wanted to compare it with brand new developments in the area – this one was 4 years old, no tax and priced alright, but nothing spectacular. It did look like new from the pictures though, didn’t seem to be lived in at all. But, I was too late, as it turned out the place sold with no subjects the day before, after being listed for only a couple of days. In the meantime there are hundreds of similar units in that area that sit forever. So what gives? Well, firstly the strata allows for rentals and secondly this one unit had a “rare” fourth bedroom with full bathroom and a… Read more »

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Short'em High

@#109. The ones that are hoping are those who often post anonymously on this forum. Canadians holding Nortel stock couldn’t get enough Nortel news until it was clear that game was over and never coming back. http://www.cbc.ca/gfx/images/news/photos/2009/01/14/nortel-13yrs-cbc.jpg It takes a long time for factual news to spread and displace euphoria inducing hype. People don’t want to come down from a high, let alone admit they were fooled or pressured by friends, family, or media into a binding agreement which will lose money for decades – in other words, a mortgage on an overpriced property. This problem is much worse for those with family pressure from roots in a pre-industrial culture. These cultures place an unrealistically high premium on land property and you can read present day rationalizations for their antiquarian beliefs almost every day on this forum. Just click through… Read more »

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bon jovi

this morning had coffee in the new espresso bar in Regina. they had papers from all across country. picked up Saturdays Calgary Herald out of cuiriousity . holy cow.. not one but two sections of Real Estate news, ads and propaganda material.
I counted …30 pages of Real estate “news”. 1 page of sport, 3 business and 1 culture related pages and 30 pages of Real Estate garbage. There is no hope for us.

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DamienC

Interesting stats. No bad news (like in 2009), we benefit from very low rates, yet we face very low sales.
People are just not buying that much. We would need real good news to lift the sales number like great salary increase across the board etc.
Will that happen?

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VHB

Apr-2013 Total days 21 Days elapsed so far 19 Weekends / holidays 7 Days missing 0 Days remaining 2 7 Day Moving Average: Sales 113 7 Day Moving Average: Listings 230 SALES Sales so far 2242 Projection for rest of month (using 7day MA) 226 Projected month end total 2468 NEW LISTINGS Listings so far 5219 Projection for rest of month (using 7day MA) 460 Projected month end total 5679 Sell-list so far 43.0% Projected month-end sell-list 43.4% MONTHS OF INVENTORY Inventory as of April 26th, 2013 17685 MoI at this sales pace 7.17 April norms year sell list sell/list 2001 2253 3556 63.4% 2002 3785 5215 72.6% 2003 3095 4139 74.8% 2004 4106 5665 72.5% 2005 4043 5731 70.5% 2006 3345 4452 75.1% 2007 3490 5724 61.0% 2008 3218 7010 45.9% 2009 2963 4649 63.7% 2010 3512 7648 45.9%… Read more »

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patriotz

Not bad, but…

The first step is easy. We take the $1.5 million price and subtract it from the net price I think I’d be able to sell it for in 10 years.

The first step is wrong. You can’t assume any sales price a priori. You have to simply compare ownership cost (including capital cost) with rental value. That’s the return you get from the house, as opposed to the return you get from who you eventually sell it to – whatever that turns out to be.

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renters rule

Interesting essay on possessions, including RE, and costs of same.

http://moneytalks.net/topics/personal-finance-and-real-estate/8677-the-cost-of-possession-introducing-a-new-concept-in-financial-planning.html

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DamienC

Anonymous:
“The posts aimed at Realtors–> they probably hav paid off homes andcould switch carreers at a moments notice if needed.”

Switch to go back to Starbucks?

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$25.00 Gift Card

@Poor Rennie #102

$25.00 gift card was offered to first 1000 visitors. I got mine. I was there at 10:30 a.m. There was line of 75 people in front of me.
The line was moving fairly quickly. I got in and within half hour. Inside the showroom maybe about 50 people. I DID NOT SEE A SINGLE PURCHASE CONTRACT BEING WRITTEN. Lot of lookee loos and free loaders like me. 90% chineese, 5% east indians, 5% whitees.

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Poor Rennie

Anyone know how the sales launch went today at the Wall central Park today?

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Anonymous

The posts aimed at Realtors–> they probably hav paid off homes andcould switch carreers at a moments notice if needed. You guys are waiting for a crash…hahahhaha.. Think about that for a moment
!

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Anonymous

And also,

regarding abbottsford, no crash gonna happen there.

Realtors are buying every home less than $400,000 because rent carries the mortgage—> upstairs $1400, downstairs $600.

Can you Bears acknowledge that until interest rates spike or massive job losses happen, you guys are the fools. Vote me down all you want….you know it to be true….so naive!

A few months ago you thought inventory was going to spike. WELL IT ISN’T. WATCH AND SEE!!!

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Anonymous

Vanpire,

That credit card balance is for current month. Many people, myself included, put everything on the cc to earn points/airmiles etc. We pay it off at the end of the month.

Don’t read too much into that.

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rp1

Interesting site:

http://www.torontocondobubble.com

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Ski, Golf & Sail

Vanpire, yes – it’s wrong. Averages don’t work like that.

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vanpire

“TransUnion Canada found that Canadian average credit card debt was down one per cent year-over-year at an average of $3,573″

Is that for every man, woman and child? Including seniors, newborns, the incapacitated, the incarcerated, the disabled, the homeless…
If so, we are in some really deep shit indeed.
Look at it this way – we are a family of five and have no cc debt whatsoever.
So the family next door owes over $37K… unless my math wrong. Is it???

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