Who wants to throw in the proverbial towel?

December 10, 2013 admin

Bull! Bull! Bull! had a question in yesterdays comment section, but as usual it was quickly voted down.

Not to worry, we’ll highlight it here:

@vancouvercondo.info
@VMD
there is always a lull in posts during xmas. that lull would provide you a good opportunity to retire from the vancouver bear scene.
most people stop posting during the holidays. all you have to do is not start again. thus you, and this blog would simply fade away.
it seems like a dignified to end your mission. you were wrong. that’s ok. just accept it and fade away into the winter sunset. VHB has already done it. maybe your time is coming too…

Not sure why this was also addressed to VMD, but what do you think? Are you readers getting tired of the Vancouver real estate market yet?

Should we set the site on fire and walk off into the sunset? As suggested we could just shut down for the holidays and never come back.

The only thing that gives us pause is that this commenter also seems to desire rain over dry cold weather. Sorry, can’t agree with that one!

But what do the rest of you think? This site is getting long in the tooth and hey, there really has been no dramatic house price crash yet. Does the current situation prove we’re wrong? It’s only been 19 months since the peak of house prices here and the theoretical buyer of a 2009 condo has only lost $35k.

Time to call it quits?

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Member

patriotz

2 years 9 months ago

The current situation proves that we are right. Anyone buying when the cost is so much higher than renting is making a bet on continuously rising prices, and that bet has now been losing for some years. Even on houses.

Whether prices crash to historical multiples and then increase with inflation along with rents, or prices stay flat and rents rise with inflation to restore historical multiples, the person buying today loses the same amount of money in the end.

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Free-bird Tuesday

2 years 9 months ago

http://www.financialpost.com/m/wp/news/blog.html?b=business.financialpost.com/2013/12/09/consumer-confidence-nears-year-high-as-canadians-put-faith-in-rising-house-prices&pubdate=2013-12-10

Uh oh…it looks like bull bull bull will be using the HELOC to buy little Timmy his train set. This is what we call the “wealth effect” where everyone is in la-la land because they think their house is worth a million bucks so they spend spend spend. But the reality is that we’re just twice as much in debt.

I vote that we set bull bull bull’s Corolla on fire : )

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Member

Don Lapre

2 years 9 months ago

I would argue that even if you disregard all of the financial discussion on this blog, it has a lot of appeal as simply a window into the sociological aspects of the Vancouver market. The near total obsession of a single asset class to the exclusion of all others. A city where most people are “all-in” on their bet, with most decisions being made with little financial acumen. An experiment, that if Bull^3 is right, could re-write decades-old economic wisdom, documenting the first time that the group proclaiming “this time it’s different” (with respect to asset prices detaching from fundamental… Read more »

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Bo Xilai

2 years 9 months ago

You know the old investment maxim… The market crashes when the last bear has thrown in the towel…

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Johnny-boy

2 years 9 months ago

Well we have been wrong for a long time as cheap money has poured into this city from locals and off-shore alike. Bubbles take their own time to burst. The stock-market kept going up even after Bears Stern went bankrupt and only collapsed after the Lehman debacle. So far the local housing market has been like teflon and nothing stocks to it. The small correction we have seen so far is nothing compared to the tripling that came before it. However unless we are to become the Hong Kong of the west coast, then we must get a rebalancing some… Read more »

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koozdra

2 years 9 months ago

This is the best time to be a bear. I liked the media’s portrayal of our situation as a Wiley coyote moment. We’re over the cliff but not aware of the sheer force of gravity acting on us. Listings are down because sellers still think things are going to turn around. When the realization dawns, down we go. Just like the bulls love to point out, a broken clock is right twice a day. They seem to think it’s an argument against warning people. To me it means that they admit that a crash is imminent, they just don’t like… Read more »

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Member

Many Franks

2 years 9 months ago

Personally, I wonder why we’re headlining a troll. As for me, I’ll be here until the housing market in Vancouver resolves itself into some kind of sanity; it’s a point of major curiosity. Meanwhile I’m in a stable, affordable housing situation so I’m perfectly happy to watch. The Bank of Canada has come out with some extremely clear language on debt and housing. From Bank of Canada says housing, debt still pose stability risks: “In Canada, the high level of household debt and imbalances in the housing sector are the most significant domestic vulnerabilities to address,” the central bank said… Read more »

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Doomcouver

2 years 9 months ago

Bubbles usually go on longer than anyone could have predicted. Canada is the most house-horny country on the planet probably, so it’s no surprise we have such an epic bubble. We might even break some records when it pops I’d bet. Regardless there will be a paradigm shift one day. A 70% ownership rate when it’s this expensive is lunacy. It’s just the trigger and the timing that are impossible to predict. I would guess when mortgage rates finally return to normal it’ll pop. But it could just as much be unemployment. Found this article this morning: http://www.ctvnews.ca/business/kellogg-s-to-close-london-ont-plant-and-lay-off-500-workers-1.1582962 Another one… Read more »

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Member

mac

2 years 9 months ago

I’m not so stubborn as to refuse to admit Bull Bull Bull has a point and a gracious way to exit. My link yesterday shows Robert Shiller affirming that there is no way to be sure something is a bubble except in hindsight. So far, there is no hindsight for this market, frustrating as that may be, it does not conform to our wishes. Perhaps condos will sink but land, not so much.

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Spacemonkey

2 years 9 months ago

On the radio they said iterest rates are up again.
I rent a house worth 950.000 for 1600. only lived there for a year. Do the math bull bull bull

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mosesupposes

2 years 9 months ago

I admit that I thought the market would be down a lot more than it is by now. But I still 100% believe we’re heading for a 20% or more drop. My theories on why the drop has not yet occurred: 1. The power of cheap money. 2. A social acceptance of taking on massive amounts of debt. 3. “Hot” markets in other Canadian cities (in particular Toronto) that create a broader sense of “real estate is a good investment”. 4. An incredibly influential real estate industry that manages to maintain a constant stream of “real estate is good” stories.… Read more »

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Member

Many Franks

2 years 9 months ago

@mosesupposes:

Where I differ from some Bears is I’m not really looking forward to the crash. It is going to have an absolutely terrible impact on Vancouver. Like it or hate it, real estate is the economic driver in Vancouver and when it goes down, it’s going to get really ugly.

I think Vancouver will greatly benefit from a correction. If you head south along Puget Sound through Seattle and down into Portland, I think you can see much of what Vancouver could gain if the cost of living were to relax somewhat. Real estate NEVER makes a good economic driver.

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YobiKanobi

2 years 9 months ago

“I think Vancouver will greatly benefit from a correction. If you head south along Puget Sound through Seattle and down into Portland,”

yeah right 50 mil can’t even feed themselves with all the new found prosperity from the low RE prices. and Detroit is booming with their $2.99 houses.

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Blah!

2 years 9 months ago

Amazing what difference a year can make. Last year the glee and excitement over the impending Hindenburgh style crash was palpable. This year, … not so much.

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Romeo Jordan

2 years 9 months ago

as most of you know, i threw in the towel a few years ago and sold at a modest loss. all because of some hot chick with big bazongas….

never again!

unless they are huge. i’m a sucker for huge bazongas.

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Atomic Frog

2 years 9 months ago

How can anyone say that a crash for the condo market not coming in Van? I work in the Newton area in Surrey. There are TONS of new condos and townhouses building there and based on my observation there are brand new condos that are selling for more than one yr with multiple price reduction. There is new townhouse development on 142 st and 60 ave that build at an extremely fast pace. All of these is a sign that the developer wants to get the building done ASAP to sell it and get back the money that got tied… Read more »

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Son of Ponzi

2 years 9 months ago

# 16
“the developers should work together”.
Remember this is a competitive cut throat business.
Until now there was enough room at the trough, but now with a glut of developments driving prices down it’s everyone for themselves.
What will suffer is quality of workmanship.

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Member

patriotz

2 years 9 months ago

@11: “Flaherty has repeatedly tried to bring the market down and has demonstrated annoyance at his inability to do so.”

I know I’ve commented on this before but I will keep doing it.

Ever since becoming MoF in 2006, Flaherty has been trying to keep prices as high as possible. He has backed off on the extreme stimulation (e.g. 0/40) only because he was warned that if prices became too extreme a crash would be inevitable.

Every regular on this board knows that if the federal government stopped guaranteeing mortgages prices would crash 50% or more overnight.

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Member

patriotz

2 years 9 months ago

@16: “I just feel sorry for all those buyer who bought last yr and saw the developer cut prices by 20K every 6 months”

You need to understand that the people who are responsible for the falling prices are the ones who bought for excessive prices. Developers simply sell for whatever they can get.

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cris

2 years 9 months ago

atomic frog.

I agree the price is softening, but when is the crash coming, you ask? You know the answer to that if you know when the Fed will stop/taper QE. But I talked to Ben, he said he didn’t know, let alone anyone else.

Even prices are sky high, but very few people are late on their mortgages. (200 foreclosed/mo?)

Maybe we will have high price forever. It is close to “forever” as is, relative to the life span of a family.

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Guest

UBC in crisis mode

2 years 9 months ago

Will this flipper make money:

Land bought for $1,600,000 in March, 2012 (assessed at $1,674,000). Now brand new place for $2,780,000:

http://www.realtylink.org/prop_search/Detail.cfm?MLS=V1038182&REBoards=All&From=MLS

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VMD@work

2 years 9 months ago

It seemd like my little jabs a few days ago drew someone’s attention. Looks like it’s worth repeating: “the phrase “There is always next year” now applies more to RE bulls than bears. Greater Vancouver SFH has failed to reach its peak in May 2012 again for 18 months now. There is always next year.. Greater Vancouver SFH HPI is currently at June 2011 levels Greater Vancouver condo HPI is currently at January 2008 levels Didn’t the Realtors say RE will appreciate with inflation? What happened? I guess there is always next year…” – I also wonder if my comments… Read more »

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Snake

2 years 9 months ago

Tenants of New Westminster apartment building living without heat

Brady asked the landlord for help, but was only given a small space heater.“She said to me — in her words — you pay $900 because there’s no heat. I don’t really know what to say to that.”

http://globalnews.ca/news/1019822/tenants-of-new-westminster-apartment-building-living-without-heat/
—————————————–
The landlord is cold heartless motherfuck*ng asshole watch the interview

PS:if she is single she could always snuggle at my place

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Snake

2 years 9 months ago

country’s richest are earning more but paying less in tax

https://www.google.ca/search?q=The+country’s+richest+are+earning+more+but+paying+less+in+tax&oq=The+country’s+richest+are+earning+more+but+paying+less+in+tax&aqs=chrome..69i57&sourceid=chrome&espv=210&es_sm=122&ie=UTF-8#es_sm=122&espv=210&q=The+country%E2%80%99s+richest+are+earning+more+but+paying+less+in+tax&tbs=qdr:d

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Bull! Bull! Bull!

2 years 9 months ago

@VMD

you make a soft landing sound like it’s something scary! you doomers sure have a flair for the dramatic!

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Mick Murphy

2 years 9 months ago

Olympic Village residents steamed over busted heating

http://metronews.ca/news/vancouver/879575/olympic-village-residents-steamed-over-busted-heating/

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Member

mac

2 years 9 months ago

ROMEO YOU MADE MY DAY! Thank you for being honest, finally. Sometimes minor financial losses are worth the motor boating. Remember when Chipman tried to make you admit that he could have got you a better price if you paid him to negotiate for you? I think that’s when I dropped off the Chipman site. Too frustrating. Up is down and down is up but I said all along that it could go down but it will go up. F*eck it. Agents are so annoying. It’s hard to take the idea that you could walk into an open house and… Read more »

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Member

mac

2 years 9 months ago

Mick Murphy, In the Olympic Village that block is apparently the worst. Lots of problems in what they call Parcel 10. There is no problem with the heating system, the problem is with who manages the heating system. A lot of cheapos and short cuts going on. They get someone in who knows how to make it work–they charge for it–and then when it’s working well they let them go and hire some regular plumber who is a novice to this complicated system and Kaplooeeey, it busts, or even worse, it explodes and leak down into a number of suites.… Read more »

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aa4

2 years 9 months ago

I remember back in 1997 when dotcom stocks were in an insane bull market. Companies were trading at 80 times forward year revenue projections. Well.. the NASDAQ quadrupled in price from 1997 to 2000. Ultimately the crash did come and most of the investors lost 100% of their money.. see Nortel. Now those 3-4 years 1997-2000 probably seemed like an eternity to bears waiting for their chance to buy in. This is also a good learning experience in markets.. just because a market has doubled compared to historical norms like income or rents.. does not mean the run is over,… Read more »

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Spacemonkey

2 years 9 months ago

On the radio they said iterest rates are up again.
I rent a house worth 950.000 for 1600. only lived there for a year. Do the math bull bull bull.
Also have boomer family members who bought a house for under 300 in Vancouver ten years ago and tell us in our mid 30’s it wasn’t easy and you have to start small they have no idea.
Should I buy a leaky 600 sf condo for 300?
No I am going to ether leave this town,country,province or rent in this town for life.

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Bull! Bull! Bull!

2 years 9 months ago

@Spacemonkey

if you can rent an entire house in vancouver for $1600, then you should do so.

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Melba

2 years 9 months ago

….Olympic Village residents steamed over busted heating….

Not sure what the problem is. The heating system uses zero energy – what could be more environmentally friendly than that? The fact that it produces no heat is only a minor issue.

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Snake

2 years 9 months ago

BC: ICBC’S REJECTED VANITY LICENCE PLATES

http://taxpayer.com/blog/bc–icbc-s-rejected-vanity-licence-plates

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Atomic Frog

2 years 9 months ago

#20 1. All I can see is that if you buy in VAN in the last 5 yrs, you are either in red or a just merely break-even return. (well includes property taxes/insurance/inflation misc etc) 2. Ever since the financial crisis in 2K9, the stock market has a much better return; easily 20-30% (well this is my experience only, i am too lazy to look up the real figure). It is not JUST how much money you lose, it is how much money that you could have made but miss out due to buying a property. If you add 1… Read more »

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born a Vancouverite

2 years 9 months ago

@ 21 UBC in crisis I see lots of newish houses in that area for cheaper than that one. Considering it is near the corner, I think they are testing the market. I won’t feel any sympathy if they lose big $ on their flipping attempt. By the way, nothing says 2011/2012/2013 more than horizontal mounted clear cedar siding. Lots of houses built with this same feature – a maintenance feature at that. I grew up in Vancouver. What is that siding going to look like in 5 years without yearly treatment? It will be grey with a hint of… Read more »

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mls watch

2 years 9 months ago

@ I am throwing away the towel. Our household is making three time the median Vancoucer household income. We do not like the stress of stratas and do not want to pay 700K for a box in the sky. Every open house I go to for a SFH in my price range is below average quality in neighbourhoods that do not attract me at all. A small house in a neighbourhood I like (i.e. West of Fraser St) will NEVER be affodable, even after a 20% drop. Realtors treat us like s..t because we ‘are not realisitc.’ Most of all,… Read more »

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cris

2 years 9 months ago

Atomic Frog.

I have no problem with the Stock market outperforms RE. In fact, it is a better sign of a healthy economy. I am just saying no one knows a RE crash is happening soon enough in any meaningful time-frame for a young family. Not those developers you said in your post, not BB.

Developers always build fast, nobody ever complains if they receive their money back sooner, especially builders here have a very some share of the market. No one has the power to control the level of inventory, not even Ploygon, not Interacop.

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BWilson

2 years 9 months ago

Deutsche Bank just came out with a global house price presentation. Canada is the most overvalued in the world at 60% overvalued using a combination of price/rent 88% overvalued and home price to income which suggests 32% overvalued. Vancouver is much more overvalued than Canada as a whole as we all know. For their median price to income table Vancouver was the single most expensive city in the world (based on their selection of 18 global cities (including London, New York, Sydney, etc.) Homeownership rates have also gone up in Canada more than anywhere else in the world. It’s not… Read more »

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Atomic Frog

2 years 9 months ago

#37 It is a matter of perspective. All I want to say is that if you have bought a VAN property in the last 5 yrs, it IS a crash to those ppl. It should feel like a crash if you factor in all the money that you could hv made by not buying a VAN property and buy sth else (like stocks) If you are waiting for a 20% crash in order to buy, my question is why bother? If the current VAN real estate market drops 20%, how can anyone be sure that it will NOT drop any… Read more »

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cris

2 years 9 months ago

“It is a matter of perspective. All I want to say is that if you have bought a VAN property in the last 5 yrs,” A Townhouse in E Van has probably gone up 20% since Summer of 2008. ” I can easily use the money that I could have spent on this house now and make a bigger return in the next 5 yrs (stocks). ” If you are a license professional, that statement that could put you alot of legal trouble, couldn’t it? Is it a crash or not, does it really matter? It matter to me, cause… Read more »

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Snake

2 years 9 months ago

The Gates Foundation’s hypocritical investments

http://grist.org/climate-energy/the-gates-foundations-hypocritical-investments/?utm_source=facebook&utm_medium=update&utm_campaign=socialflow

2012 tax returns for gates foundations
http://www.gatesfoundation.org/~/media/GFO/Who%20We%20Are/Financials/2012%20BMGFT%20990PF%20PUBLIC%20DISCLOSURE%20FINAL.pdf

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Blah!

2 years 9 months ago

“I rent a house worth 950.000 for 1600. only lived there for a year. Do the math bull bull bull.”

That’s a great deal, Spacemonkey. Hold onto it as long as you can, because I don’t think it is typical. I rent out a $850 to $900 K house in North Van for $3300. Had a choice of several great applicants willing to pay that and probably could have gone higher.

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Member

patriotz

2 years 9 months ago

@42: ” I rent out a $850 to $900 K house in North Van for $3300. ”

Now that’s more like it. Gross rental yield 4.7%!

🙂

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Blah!

2 years 9 months ago

patriotz, if you’re saying this is not a great investment, I totally agree. I’m not bragging about this; just saying that Spacemonkey’s deal is not the norm for a tenant.

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born a Vancouverite

2 years 9 months ago

I periodically look at Craigslist to see what a laneway house on the westside of Vancouver rents for. Owners are asking $1800 to $2300 per month for a 2 bedroom place for 750 sq ft (which is on the larger size). These are asking prices and they increase to $3000 for a furnished laneway. Does anybody know what the owners actually get in the way of rent as some of these have been on Craigslist a while. I don’t know how Mayor Moonbeam thinks this creating affordable housing for families since they are way too small.

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wut?

2 years 9 months ago

OK… I’m going to say what everyone else is thinking….

Spacemonkey is paying 1600 for half of a house not the entire house.

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wutwut

2 years 9 months ago

OK… I’m going to say what everyone else is thinking….

Spacemonkey is paying $1600 for half of a house not the entire house.

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Guest

mls watch

2 years 9 months ago

Craigslist tells you what landlords wish they could rent for, not what the median rent is.

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bluechipbear

2 years 9 months ago

Hang on to the towel.
Saving and waiting here…..personally making far more progress that way right now than if I was saddled with a mortgage. Also gives me the opportunity to wait it out for a better market. The true “bubble” is in credit and cheap money, and when that pops…..

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RaggedyRenter

2 years 9 months ago

Amateur landlords probably think their unit is one-of-a-kind special palace, but in reality there are probably a lot of similar units for rent in the area. The last time we’re looking to move, I checked out craigslist, and sent out e-mails to 5-6 unit. I was courteous, explained who would stay in the unit, my employment status , income, list of reference etc and I asked for a lower price (The units are listed from 1600 to 1750). I asked for $1400. Most are willing to budge, I got anywhere from 1430-1550. I ended up renting an older rental building… Read more »

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Who wants to throw in the proverbial towel?

Bubble? What Bubble?