FFFA! Mortgage Rates, Sales, Averages

It’s that time of the week!

Friday Free-for-all Time!

This is when we 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:

YOY prices drop for the 12th month
BC home sales hot in July
Strata depreciation reports
Mortgage rates up
VCI Cliche hunt
Markets face ‘major slowdown’
Ottawa in mortgage mess of own making
Condo price drop in action

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

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SkiBum
Guest
SkiBum

My wife and I are looking for the perfect freehold house in whistler to move our family into right away.
We’re looking just under the $1,000,000 price.
We want a big yard
Big deck
Mountain View
6+ bedrooms (including suite rooms)
3000+ sq. ft.

We’re already pre-approved, we’re just looking for that perfect deal to come along.
So if you’ve got a great property and want to sell it drop us a line.

we’re not into condos, timeshares, duplexes or townhouses.
email me at 6vkst-4005134962@hous.craigslist.org

Burnabonian
Guest
Burnabonian

@SkiBum

I literally have the deal of a lifetime for you.

How it works is you rent the same place for way less than what you carrying cost on a 0.x million dollar mortgage would be. Put the savings in your RSP.

Then four years from now you buy a better place for half a million.

This is an especially good deal if you’re the kind of person who likes retiring earlier, not being foreclosed on due to the property being underwater, and not having a stressed out wife who slowly comes to the realization that your family’s net worth has fallen below zero and it will take 5-10 years before you can claw your way back *up* to being only as penniless as a hobo begging for change on the corner.

PM me for details!

Randy Randerson
Guest
Randy Randerson

Not sure if Skibum is being facetious or not.

Loon
Guest
Loon

Joke of the day:

Why is Vancouver real estate like having a penis ?

Because only 50% of the population should have one !

Seriously folks, our bubble just got a blast of pure oxygen for extra flammability.

Newcomer
Member
Newcomer
Burnabonian
Guest
Burnabonian

@Randy Randerson

Apparently not

http://whistler.en.craigslist.ca/reo/4005134962.html

Looks like he’s just astorturfing. He should have taken a moment to find out what the blog is about before spamming it.

He could have saved a few hundred thou…

Many Franks
Member

In today’s news: Canadian House Prices Soar, Marking Possible Return Of Overheated Market; meanwhile, Flaherty cooled the housing market without dousing it. Finally, early reports suggest that reporters are just a bunch of guys who have learned how to type.

Best place on meth
Member
Best place on meth
franko
Member
franko

It’s hard to be sympathetic towards FTBs who insist on ignoring reality.
The message from equity markets couldn’t be clearer that we are facing the biggest shift in int rates in more than a decade, and I have even less sympathy for those who refuse to understand what higher rates will do to RE.

I’ll go as far as hoping that the rush from pre-approvals accelerates.
So, go ahead SkyBum, buy that place in Whistler. But don’t stop there. Try to scrape up enough for a DP on a condo in Van as well, and tell your friends to get out there and buy, buy, buy.

The change in market mood should be quite dramatic when buyers start to realize that the line of pre-approved buyers is about to come to an end.

Randy Randerson
Guest
Randy Randerson

@Best place on meth

Looking forward to the BoC bond yield treading up. I have my popcorn ready and will enjoy the fiery death by thousand mortgages that follow.

Not to mention that I can buy some bond once things normalize.

VMD@work
Guest
VMD@work
@Burnabonian’s Nice post yesterday re: expensive Timbits analogy. With regards to “Don’t time the market”, I think this “truism” applies more toward the type of investment that allows buying in small quantities over time (dollar cost averaging), i.e. stocks. In RE however, when pumpers say “Don’t time the market,” it’s akin to your stock broker telling you “anytime is a good time to borrow 5x your annual pre-tax income to invest in a single stock (something like Rona), with a P/E ratio of 40, negative outlook, and $40,000 commission to sell. Unless you have the means to purchase a few properties every year for the next 10-20 years, you can’t “dollar cost average” property investment (unless you’re looking at REIT, but that’s stocks). You have to do your homework and time your “single largest leveraged purchase in your life”.
Best place on meth
Member
Best place on meth
Anonymous1
Guest
Anonymous1

YIELDS IN PERSPECTIVE (5 Yr):

Prior to 2008 —> 4% + (…and housing booming)

Summer 2010 –> 3.25% (housing booming)

Summer 2011 —> 2.50% (housing booming)

2013 Low —> 1.2% (housing stable)

NOW —> 1.98% (Housing supposed to implode because of this?)

Lets not be G Turners on this blog and skew stats. Hopefully the trend to higher rates is sustained without gov interference.

China Boom
Guest
China Boom

I’ll fix your analysis for you:

Prior to 2008 —> 4% + (…and housing booming) + super high prices.

Summer 2010 –> 3.25% (housing booming)+ even higher prices.

Summer 2011 —> 2.50% (housing booming)+ even higher prices.

2013 Low —> 1.2% (housing stable)+ the highest prices ever

NOW —> 1.98% (Housing supposed to implode because of this?)Yes because prices are super high.

Best place on meth
Member
Best place on meth

@Anonymous1

Correct, falling yields led to higher prices.

Now complete this sentence:

Rising yields lead to…….

franko
Member
franko

re: Post #9

Meant to say: the change in market mood should be quite dramatic when “sellers” start to realize that the line of pre-approvals is about to come to an end.

The fact that prices haven’t gone up despite the recent buying panic from pre-approvals should be a clear signal to sellers to take any reasonable offer before it’s too late.

oneangryslav2
Guest
oneangryslav2

@Anonymous1 13

You conveniently left out the year 2009. I’ll bet that was just an oversight. Guess what the yield on the 5-yr bond was in the early part of that year?

Two concepts you also may want to understand are

1) ceteris paribus (and how not everything has been the last few years). In other words, even though the 5-yr today stands where it was in the 1st quarter of 2009 (in fact, in December, 2008, the yield on the 5-year was as low as 1.69%), does ceteris paribus apply?

2) Marginal theory. This is very important in economics and a more thorough understanding of this may just save you from losing a lot of money.

Best,

Anonymous1
Guest
Anonymous1

Post 14, 15:

In most places in the lower mainland where HAM and Indian money are not factors, prices are at the same level as in 2008. Like Abbotsford, Maple Ridge, Pitt Meadows, etc.

So falling yields did not result in higher prices in these areas. However, yields really had no bearing on prices during the huge run-up from 2002-2008.

Anonymous1
Guest
Anonymous1

post 17:

C’mon….lets not make this into a GT blog.

Yield was left out for 2009 because of the financial shock. There was too much volatility even between days, let alone months.

Brian Ripley
Guest
Brian Ripley

As evidenced by continued falling prices in the big housing related ETFs (including the Guggenheim AlphaShares China Real Estate ETF (TAO)), I would say that cash buyers are reacting much faster to the recent rise in yields than physical buyers of real estate. Here is a chart of 6 ETFs and 2 independent analysis (Bob Hoye and Chris Kimble): http://www.chpc.biz/2/post/2013/08/housing-recovery-update.html

Many Franks
Member

@Anonymous1:

Yield was left out for 2009 because of the financial shock. There was too much volatility even between days, let alone months.

Thesis: “When I exclude outliers, everything looks pretty normal.”

VMD@work
Guest
VMD@work

@Anonymous1
1. first, you neglected to mention what CMHC did from 2001-2008.
Here’s a refresher.
2. declining rates (first variable, then fixed) brought demand forward.
Speculators and people who should’ve spent few more years saving for downpayment were enticed into the market. Short term gain for Long term pain.
3. What do you think Government of Canada can/will do to control rising Cdn bond yields? If anything, GoC will continue to try to de-risk itself, making banks manage more risk themselves.

Leo
Guest
Leo

http://www.latimes.com/business/realestate/la-fi-hotprop-20130728,0,4829102.story

Actors Goldie Hawn and Kurt Russell sell their Balinese-inspired Malibu beach house, for sale or lease frequently since 1995, for $9.5 million.

… listed two years ago at a high of $14.749 million.

price drop $5-1/4 million

Leo
Guest
Leo

‘The revival of luxury spec homes illustrates a growing divide in the global housing market, where cash-rich investors have the edge over people who need a mortgage in every segment of the market.

“Luxury real estate is the new global currency,” Jonathan Miller, president of New York-based appraiser Miller Samuel Inc. said in a telephone interview. “They’re building the world’s most expensive safety deposit boxes.” ‘

http://www.bloomberg.com/news/2013-08-16/l-a-s-trophy-homes-starring-in-sequel-for-luxury-market.html

SkiBum
Guest
SkiBum
@Randy Randerson, @Franko Definitely not being facetious, I’m seriously looking at it. Yes I’ve posted similar requests on craigslist (it seemed to make sense) I am exploring all avenues to try to find a good place in whistler to live with my family for 5 to 10 years. The #1 reason I’m getting out of lower mainland is overheated market. The #2 reason is the rain in winter. The #3 reason is I have no serious reason to be in lower mainland Either way I need a place to live, I have 4 kids under 10 etc. We’re currently renting and we want a spot to call our own for 5 to 10 to 15. FWIW, I’ve been following this blog a long time. I’m just at a place in my life where I need to do something. We’ve considered… Read more »
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