FFFA! The middle class Canadian consumer bubble

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

And do you know what that means?

Friday-free-for-all time!

This is our regular end of the week news round-up and open topic discussion thread for the weekend, here are a few links to kick off the chat:

What a housing bubble bust looks like?
Half of Canadians want to buy property
..But 33% are living paycheck to paycheck
Worst May in more than a decade?
Economy shouldn’t rely on consumer debt
150,000 real estate jobs will be lost
How to profit as Canadian bubble bursts
Keep your skills up to date
Sentimental sentiment of anecdotes
Van $1.5 mil vs Carmel Cali $1.5 mil
Flaherty saves us from a housing bubble!
What does the middle class look like?
Broker says don’t worry, buy now

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
Guest
Bull! Bull! Bull!
2 years 8 months ago

Will HPI be up for another month? Why do people keep ignoring the month after month price increases? Do the American crash graphs show these characteristics?

Guest
Anonymous
2 years 8 months ago

Did cases chiller change their measurement part way through? Or did the NAR? I’m curious,are there many other price indexes that tossed their old system and came with a new one like the REbGV did?

The HPI lost its value with they threw away the ability to compare to historical values beyond a year or two.

Guest
Anonymous
2 years 8 months ago

China PMI sucked. Big slowdown again, hard commods weak, but don’t worry, a weakening Chinese economy means a rush to real estate. Or not.

Guest
Bull! Bull! Bull!
2 years 8 months ago

“The HPI lost its value with they threw away the ability to compare to historical values beyond a year or two.”

Bears don’t question the hpi when it is going down. But when it goes up its a fraud. Another example of bear logic.

You can’t be wrong for a decade without serious flaws in your ability to reason.

Guest
Cory
2 years 8 months ago

More good news for retailers on Robson Street… An American long weekend is about to start and the main road that brings American tourists up to BC has had a bridge collapse! I guess there won’t be too many American tourists in Vancouver this weekend. “Officials in Washington are warning motorists ahead of the U.S. holiday weekend to avoid the area where a bridge collapsed on Interstate 5 north of Mount Vernon last night…Detours have been set up to try to ease the congestion, but drivers have been told to expect major delays. Officials are urging drivers to avoid the… Read more »

Guest
Anonymous
2 years 8 months ago

Dear VCI readers, do you like constant trolling from “you’ve been wrong for ten years” and “enjoy your basement suite, losers” commenters? Take a page from central banks around the world and promise to vote down with absolute certainty any comment that is designed to elicit anger. Do it hard, and do it consistently. Trollers whose comments are voted down within minutes will give up and go away. But you need to promise to do this and show them you mean it, or they won’t take you seriously. I’m all for free discussion but not trolling. If the comments are… Read more »

Guest
Bull! Bull! Bull!
2 years 8 months ago

Sounds like the bears are starting to become fearful and desperate.

Its just like 2009 when all of their hopes were dashed.

What’s that feeling deep in the pit of your stomach, bears? You know its there. That feeling that you might be wrong yet again. That gnawing and sickening sensation that you missed your last chance and are priced out forever.

Will you ever be able to look your wife and children in the eyes knowing that you missed your final chance?

Guest
bullwhip29
2 years 8 months ago

Taking a look in one of the key neighborhoods in Rmd, I noticed something very strange. As of a couple of days ago, there were > 40 detached homes for sale in Terra Nova. Most of these have been sitting there collecting dust for 6-12 months (or longer) This morning, that number suddenly dropped to 11 (according to realtor.ca and mls.ca). Anyone care to chime in on this? Was this due to: – a massive wave of buyers suddenly appearing out of nowhere post-election? – a coordinated effort on part of all these disgruntled sellers to cancel their listings en… Read more »

Guest
Anonymous1
2 years 8 months ago

From what I see, there is no fear in the market right now. Inventory is not going to spike. As soon as the mainstream media highlights the fact that inventory is lower than last year, buyers will jump in.

Calgary market is going insane. Record low inventory and some are saying prices are going up by $1000 a week rite now. Same thing happening with detached houses in Toronto.

Guest
Left already living in San Diego
2 years 8 months ago

Here is a small reminder that yet another shitty weekend weather coming up for the best place on earth.
Enjoy, and dont forget to go skiing, golfing and boating all in the same day of course.
I will go surfing with the kids.

Guest
Seafair dweller
2 years 8 months ago

#8 bullwhip29

You’re right, this is very weird. My guess as to why the listings have mysteriously disappeared is that there was a data error which removed the older listings. Houses have “dropped off the map” in Seafair too, but the “for sale” signs are still on the lawn.

Anyone else hear anything?

Member
Absinthe
2 years 8 months ago

Bullx3 ~ My husband and kids are pretty happy in our rental house within cycling distance of work that we could never have afforded otherwise. My husband is especially happy with the nest egg we’ve put away, and some day, my kids will be happy with their RESPs. We’re doin’ pretty dang well, thank you, for median income earners in this expensive city.

Guest
CullBull
2 years 8 months ago

“Anyone care to chime in on this?”

Judging by the strong sales numbers of this month, likely all those properties sold.

As always, the answer is in the data.

Guest
Bull! Bull! Bull! @ Absinthe
2 years 8 months ago

I guess that people still read my posts despite the down votes. And congrats on accepting your status as being priced out forever.

Guest
VHB INDEX
2 years 8 months ago

The VHB index indicates that the market will increase for another 3 years. When he stops posting, you know that he has concluded that the bust won’t happen. Then he goes into hibernation until the next minor price adjustment. And then he disappears when the bear hopes are dashed yet again.

Member
Absinthe
2 years 8 months ago

Bullx3 ~ I have been priced out forever, by any sane financial management strategy, for pretty much the whole time I’ve had a down payment. That’s why I’m on this site: when the choice became “house poverty for family of four in a purchased 2 bedroom in Port Moody” vs. “responsible savings and a family of four in rental house with yard in Vancouver”, I thought something smelled funny in real estate. Still stinks, and will continue to stink, until prices adjust.

Member
Absinthe
2 years 8 months ago

( Bullx3 ~ Mostly, though, I thought I’d represent for mama bears. )

Guest
Kalamazoo
2 years 8 months ago

Go to New Jersey and order Scotch on the rocks at a restaurant and they give you rubbing alcohol mixed with caramel colouring!

http://www.cbc.ca/news/business/story/2013/05/24/business-new-jersey-alcohol.html

Guest
Real Estate Pimp
2 years 8 months ago

Re: Terra Nova and Seafair listings.
Yeah, definitely Data error.
I usually check the Steveston listings, which are usually around 60, and now they are down to 11, too.

Guest
Real Estate Pimp
2 years 8 months ago

Hey, Bulls.
Just checked with a Realtor about the data problems with the MLS listings.
He says the system has crashed because of the flood of new listings.

Guest
2 years 8 months ago

RE: Nearly half of Canadian homeowners eager to buy property – “However, Mr. Guatieri said that in the detached home markets in Vancouver and Toronto, affordability remains an issue and high prices are forcing buyers into the condo market.” This week I did an income approach study of a Vancouver Condo to see what the investment results would be with different down payments. My conclusion is that there are two worlds and the world that is buying real estate in bubble cities like Vancouver is made in part of people who do not have employment or financing concerns or care… Read more »

Guest
Real Estate Pimp
2 years 8 months ago

Hey Bulls,
If things are so peachy, how do you explain this?
GUARANTEED RENTAL INVESTMENT until 2020.
– monthly rent guaranteed until 2020
– free rental management until 2020
– strata fees paid by the developer until 2020
The developer pays your strata fees and you receive a cheque every month until 2020.
ELLIOT in New West.

jesse
Member
2 years 8 months ago

“the flood of new listings”

Flood? In Richmond?

Member
vangrl
2 years 8 months ago
Guest
pricedoutfornow
2 years 8 months ago

What’s up with the rental market? Have been looking for awhile, haven’t been ready to make a move until now. Just my luck, it seems like there’s quite a bit of supply but the prices seem to be astronomical! Are there really that many people out there who are willing and able to pay $3000 or $4000 for a whole house? Is this just the spring market with landlords trying to get what they can out of spring and summer movers, should we just wait it out until fall/winter? If prices stay this high think we’ll just have to stay… Read more »

Member
mac
2 years 8 months ago

Here’s a true story. I’ll call it 20 REASONS THIS COOL SPRING MARKET SUCKS FOR BULLS–Or how I learned to stop worrying and love the bomb! 1. We sold at the last peak. 2. You know what happened after that…housing skyrocketed. 3. We missed that. 4. Our half-house is now worth 165K more than when we sold. Ouch! 5. It was in a neighbourhood we hated. We decided to move every 2 years to try out neighbourhoods before we bought again. 6.. We moved. First into a crazy-expensive dream apt (condo) for a year. Unbelievable view. 7. We wanted to… Read more »

Member
mac
2 years 8 months ago

Pope,

Don’t reprint my story as a header. Let’s just keep it in the comments section, please.

Guest
dyugle
2 years 8 months ago

Bullwhip, it must be a data error.
I look at the Vancouver west side.
The S.F.H. for sale dropped from 977 yesterday, to 232 today.
I have seen this happen before. It will be fixed as soon as their members find some of their listings missing from the MLS site.
Hey trolls check your active listings on MLS; they might not be there.

Guest
Anonymous
2 years 8 months ago

….Here is a small reminder that yet another shitty weekend weather coming up for the best place on earth…

Vancouver has the best view of clouds in the world.

Guest
Turkey
2 years 8 months ago

@pricedoutfornow, Sites like Craigslist are misleading. Remember, they’re a repository of asking rents, and asking ain’t gettin’. The problem is, lots of listings are priced to carrying cost (i.e. mortgage payments), not market rents. The market doesn’t care if nobody will pay your mortgage, but that doesn’t stop people from asking anyway. There’s also a tendency for otherwise sane landlords to consult Craigslist for comparables when pricing new rentals; they get stuck in the same trap. When an asking price is reduced to match market rates, it becomes occupied, and invisible. Meanwhile, the unreasonable postings keep piling up. The overall… Read more »

Member
Not much of a name...
2 years 8 months ago

@BBB 1

Why do people keep ignoring the month after month price increases?

Why do people keep ignoring the year over year price decreases?

Guest
gokou3
2 years 8 months ago

“It will be fixed as soon as their members find some of their listings missing from the MLS site.”

I am sure the REALTORS are bummed that their listings disappeared just before the weekend open-house opportunities. Not that those would bring much hope anyways.

Guest
bullwhip29
2 years 8 months ago

Looks like the MLS data has been fixed (although none of the photos are posted yet). Some hack definitely screwed up big time. Had one of deleted listings been my own, I’d be pretty pissed off.

Guest
Anonymous
2 years 8 months ago

“Its just like 2009 when all of their hopes were dashed.”

Aren’t condo’s in some area’s below 2009 prices?

Member
victoria
2 years 8 months ago

So exciting for Victoria – and this was addressed to Me!!!!!!

Private pre-auction event – Flipping Victoria with stars of the hit show flipping Boston. I can get a free I pad and a free MP3 player and a behind the scenes DVD. I have been chosen to attend this seminar.

I will be able to become part of our fast growing network of re investors, make remarkable profits off invesntories of distressed properties and implment quick cash strategies ….. and access private money to invest in my RE deals.

What a great day!

Guest
George Soros
2 years 8 months ago

While I think Bull x3 and Troll provide little but spam they do bring up a point. Things are slow and prices are trending lower but they are not crashing. I for one think as long as you can get a 5 yr mortgage at 2.9% you will not see prices crash. There are too many financially illiterate people who confuse payment with affordability. These are the low to zero net worth people who lease a new car every year and save nothing. They have bought into the cult of Real Estate and believe prices can go up in excess… Read more »

Guest
bullwhip29
2 years 8 months ago

@ George Soros
Prices are down YoY, but have flattened out and turned slightly higher in the last three months. Of course, it remains to be seen if this is just a spring blip or a longer term trend with some legs. I agree that rates are going nowhere for the foreseeable future. Now that the powers that be have tightened, they have some ammo going forward if it ever becomes necessary to relax the rules again.

jesse
Member
2 years 8 months ago

“There are too many financially illiterate people who confuse payment with affordability”

I know it’s hindsight, but someone who kept their marbles, and rebalanced & reinvested a simple portfolio through the GFC — and rented instead of owned — has so far been doing not so poorly.

Guest
George Soros
2 years 8 months ago

Is Bull x3 right? I got these avg prices off Yatter’s site. You be the judge. Attached 2008 $888K 2009 $831K 2010 $955K 2011 $1.20K 2012 $1.10K 2013 $1.15K An impressive jump of 29.5% or 5.9% per year. After inflation a growth of approx 3.4% per year. Detached 2008 $507K 2009 $480K 2010 $542K 2011 $573K 2012 $581K 2013 $549K A much less impressive growth of 8.3% or 1.7% per year. After inflation a growth (oops I mean loss) of approx. 0.8% per year Apartments 2008 $420K 2009 $394K 2010 $445K 2011 $483K 2012 $445K 2013 $417K A loss of… Read more »

Guest
CullBull
2 years 8 months ago

“In my opinion we will not see any big price drops until rates go up and that could be a long time”

So you might as well buy. No meaning full correction in prices for the long term. Let inflation eat away at your debt. This is a rational decision. I can’t believe that bears would call buying in such an environment a bad decision.

Member
Not much of a name...
2 years 8 months ago

@George Soros

If you look use the REBGV HPI, the numbers are even less impressive. From the April 2012 report, they show the following the five year comparison.

Detached – up 15.0%
Attached – up 2.0%
Apartment – down 2.4%

Guest
CullBull
2 years 8 months ago

When we talk about not being able to look your wife and children in the eye, we are talking about detatched SFHs. Those numbers speak from themselves: 2008 $888K 2009 $831K 2010 $955K 2011 $1.20K 2012 $1.10K 2013 $1.15K We are talking about houses. I for one have no interest in communal living in a shit box in the sky or having my wife an kids in one. If you are stuck raising your family in a condo, then yes, you should be ashamed of your self for being wrong and not buying a house a few years ago. That… Read more »

Guest
Real Estate Pimp
2 years 8 months ago

Jesse @23
“flood of new listings in Richmond”
I know, Freudian slip.

Guest
Bull! Bull! Bull! @ Real Estate Pimp
2 years 8 months ago

Hey real estate pimp,

If things are so bad why do grasp at every metric except the one that matters, price?

How many months of consecutive price increases have we had?

Keep hope alive bears.

Guest
mosesupposes
2 years 8 months ago

“If you are stuck raising your family in a condo, then yes, you should be ashamed of your self for being wrong and not buying a house a few years ago.”

The contest for most obnoxious comment of the day is over! Congrats CullBull! You should be proud.

Member
DaMann
2 years 8 months ago

@Mac “We now know: no condos for us. We will get a 1/4, 1/3 or 1/2 house on the westside.” This is exactly how I feel too. Absurd prices aside, when you compare the two, I can’t fathom how anyone would rather own a condo over a 1/3 of a house or whatever. Much nicer streets and often with a yard and the houses are not leakers, and to make matters even better, maintenance fees of $120 ish. It’s a no brainer for me. If I had a gripe with the way they are carving up these houses are the… Read more »

Guest
Real Estate Pimp
2 years 8 months ago

Triple bull.
Prices are a trailing indicator.
Sales are a leading indicator.
Sales fall first, then prices. Capish.

Guest
Real Estate Pimp
2 years 8 months ago

Daman,
Agree, never understood the fascination with the number of bathrooms.
Probably just another marketing ploy, like the granite counter tops which I hate.

Guest
VMD@work
2 years 8 months ago

@cullbear42
I’m renting a 50k/year.

Landlord told me last year he will wait for “a better market” to sell his several recent-builds. I highly doubt he could fetch $750k by now; by next year, maybe more like $700k.

He’s still got a mortgage to pay (showed me the papers when signing lease).

I wonder how his recent RE ventures will affect his standard of living..

Guest
N
2 years 8 months ago

“As long as they can buy a place for $460 per $100,000 borrowed its hard to see prices reverting to their historcial norms.”

Even at those rates, the monthly payment on a bungalow still takes 83% of the average household income. That’s hardly a bargain. Over the past 20 years, a bungalow has usually taken up less than 60% of average household income. So while current low rates are part of the story, they do not justify current costs. The only thing that justifies current costs is belief in future appreciation. Take that away and the picture will rapidly change.

Member
mac
2 years 8 months ago

Bull, Bull, Bull,

Is your only point that those who didn’t bet on SFH on 2008 have lost face? And can’t admit it? Are you looking for some contrition from bears that all their charts and graphs didn’t help them predict this? If so, have at it. But the real estate market is considerably bigger than that. No?

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