Something between a US crash and soft landing

According to this article in the Financial Post signs of a Canadian housing downturn are everywhere.

They don’t pull many punches as they discuss the national home sales decline, overvalued housing and semantics:

Let’s not argue over whether Canada is the proud owner of a pretty pink housing balloon or a black bubble because either way, they both can pop.

They report some interesting numbers that the general public is likely not aware of. Did you know that housing related industries currently make up 27% of the Canadian economy? For a little bit of perspective that compares to 24% of the US economy at the height of their housing bubble.

Then of course there are the predictions for the future:

“Overall, we think existing home sales will continue to decline with negative implications for the elevated level of home building and broader knock-in implications for domestic demand growth,” David Madani, an analyst with Capital Economics, wrote in newsletter Friday.

And Mr. Ben Rabidoux, what do you think?

“Typically when you have a distortion in the economy, it is rarely painless to rebalance it. We’re in for a relatively painful period.”

Read the full article here.

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UBC in Crisis Mode
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UBC in Crisis Mode

Wow, so many properties list / re-list, become “Old Inventory”:

http://vancouverpricedrop.wordpress.com/2013/04/07/old-inventory-april-7-2013/

renters rule
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renters rule
good-format
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good-format

I meant we should have 17K party in 3 or 4 days.

good-format
Guest
good-format

We should have 18K party in 3 or 4 days.

Joe
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Joe

My favorite work for free is at the Olympics. We pay for the party few can afford to go to, and then serve the oligarch.
Puppets.

paulb
Member

Our MLX system is down so no numbers tonight. Will catch up tomorrow.

TI:16742

http://www.paulboenisch.com

Short'em High
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Short'em High

@BWilson. Good point. News releases could be taken down or even edited to reframe current events in a rosier light. Along those lines, in addition to rebgv.org, there are some other data sources. @jesse and others appear to get their inventory data from: http://www.bcrea.bc.ca/news-and-publications/news-room/news-releases Another poster on this forum maintains a cache of RealtyLink releases going back to 2001: http://greaterfoolvancouver.blogspot.ca/2011/10/2011-rebgv-stats-pdf.html From @jesse’s preliminary work on MOI, defined as Inventory/Sales, it looks like MOI is the answer to faked stats or narratives that frame data in a biased way. @jesse has empirically demonstrated how present MOI and subsequent price change are linearly related. Therefore, well validated numbers for sales and inventory are needed for as many years as possible in order to make progress on a price prediction model. I am glad you posted your data because it narrowed down where… Read more »

Landbaron
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Landbaron

@42

Are you employed with iGATE??

Best Newfoundland jobs
Guest

Great weblog right here! Also your site lots up very fast! What web host are you the use of? Can I am getting your affiliate link in your host? I wish my web site loaded up as quickly as yours lol

Anonymous
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Anonymous

“I don’t see the problem with unpaid internships honestly.”

I agree 100%. People have a choice to take the internship or not. I bet a lot of people with no experience put in a couple of months work for free and then were able to gain a good paying job after. If I was looking to enter a new field of work I think it would be great to have an opportunity to gain hands on experience in a job I otherwise couldn’t get.

bon jovi
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bon jovi

@Many Franks
here is interview with Elisabeth Warren that put little more light on reasons for bankruptcy in US. But it is applicable to Canada as well.
http://www.commonwealthmagazine.org/Voices/Conversation/2003/Fall/Bankruptcy-expert-Elizabeth-Warren-says-that-housing-and-education-not-restaurant-meals-are-driving-twoincome-families-to-the-edge.aspx

Anonymous1
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Anonymous1

JR Post#20: You are ambitious but you lack wisdom. Consider your statement, “I’m not sure why people feel so entitled to get paid without having skills.” and then consider this: In India, you can hire a well educated, skilled person for about 10 dollars a day. That is enough to eat. Why? there is such a population explosion that you have every tom, dick, or harry trying to get their kids educated. There are just too many educated and skilled kids but not enough jobs. The real kicker is that those that manage to get a good job will never be able to buy and afford the land that they sleep on. Never. They are priced out forever, because they have the HAVES there and then the REST. You may eat your words in this lifetime. Oh, and for those… Read more »

Anonymous
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Anonymous

@JR, “I’m not sure why people feel so entitled to get paid without having skills.”

This is such a preposterous statement I wonder if it was said tongue in cheek.

BWilson
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BWilson

@ Short’em. I don’t have a data set of inventory. I only took the time to create my own record of sales data out of paranoia that the REBGV would start to take it down as the correction takes hold!

Landbaron
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Landbaron

@Many Franks

Holy cow, I mean it’s sad for the kids and all, but holy cow! Student loans plus paying all the bills with a credit card, along with two kids and a mortgage??
And I thought the people on ‘Till Debt do us Part’ were bad with money! Unreal.

Many Franks
Member
Active Member

I recently heard the sad story of Kyla Hanington on the CBC. She’s a single mom, two kids, no work experience, going to University — and she got herself a 40-year, no-money-down mortgage. OK, bankruptcy is an awful thing to go through, but what the hell did she think was going to happen? And what was the lender doing giving her the mortgage? (Don’t bother, I already know the answer. It was insured.)

This is why you need to pay attention in math class, kids.

Short'em High
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Short'em High

@BWilson. Food for thought. Using the REBGV data you posted the other day here is real estate “season” for each year. A season is defined as the calendar days from end of minimum sales month to the end of maximum sales month. Note that since min month is calculated on the months from July to June and you have no 2002 months, the 2003 min month could be wrong. [FYI, for this table I am using tab delimiters and surrounding with HTML PRE tags in case @ADMIN was reinstated PRE tag functionality on the forum.] YEAR MIN_MO MIN_SALES MAX_MO MAX_SALES DAYS 2003 2003-01-31 1966 2003-07-31 4023 181.0 2004 2004-01-31 1954 2004-03-31 4371 60.0 2005 2005-01-31 1700 2005-05-31 4434 120.0 2006 2006-01-31 1924 2006-05-31 4297 120.0 2007 2006-12-31 1686 2007-05-31 4331 151.0 2008 2008-01-31 1819 2008-04-30 3218 90.0 2009 2009-01-31 762… Read more »

patriotz
Member

@20:

The law in BC says that employers have the choice of paying someone minimum wage (or more) or not hiring them.

If an employer wants to participate in a legitimate practicum program with an educational institution (for which pay is not required), that is also their choice.

What they don’t have a choice about is picking and choosing which laws apply to them, any more than you or I do.

Anonymous
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Anonymous

“Pricedoutfornow, principal repayment is not an expense.”

the guy tried to be smart, let him be. there is 5 yr mortgage to be had for 2.88%; he claimed 3.09%. but, psst, dont tell him, otherwise, he will cry to his mama.

Landbaron
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Landbaron

Lots of posts today Bull. I have the day off, what’s your excuse?

Bull! Bull! Bull!
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Bull! Bull! Bull!

obviously fake story gets 18 up votes. the echo chamber is strong in the bear cave.

jb Says:
April 8th, 2013 at 11:59 am 22
My wife and i went to about 10 open houses yesterday. We only saw two other couples the whole time. It’s very slow business for the realtors.

Vote Down The Facts
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Vote Down The Facts

Pricedoutfornow, principal repayment is not an expense.

Landbaron
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Landbaron

Closed down a Visa RBC account today over the phone.

Judging by the very thick and oddly unusual accent (this coming from a Vancouverite), their telephone operations have been outsourced as well…

pricedoutfornow
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pricedoutfornow

Like my post on VREAA today, I also went to a few open houses this weekend. In no case did the numbers ever make sense to buy rather than rent. Another example: down the hall from us there’s a 2 bed condo for sale (similar to the one we currently rent). The asking price is $478,000, at 10% down, 3.09%, 25 years, the mortgage is about $2000/month, never mind strata fees, property tax etc. We rent for $1350. For $2000 a month you could pretty easily find a house to rent in our area. And since we moved in almost 3 years ago, condo prices in our area have barely budged-I might even say they’ve gone down a tad. I honestly don’t know why anyone would buy. We even went to an open house for a townhouse yesterday-it was over… Read more »

Vote Down The Facts
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Vote Down The Facts

“I love how you see ‘flat’ prices in condos as a ‘stable’ investment”

You’re confusing investing with speculating.