Builders stop building in a bubble?

Markoz left this comment in yesterdays thread, but it got held up in moderation because it had more than two links:

My wife works at a bank and her boss sent a link to this BIV article entitled, “Nobel economist housing bubble formula shows Vancouver resistant.

Here is a copy of my response (unfortunately the charts I clipped won’t paste into the comment section):
His theory (as presented by the article’s writer at least) is that builders are smart enough to stop building before/when a bubble pops. I’m not sure if he means that a slow down in building is a precursor to a bubble popping or if he means that when sales drop so do housing starts. In Vancouver, housing starts only dropped off significantly well after sales did in 2008.

Vancouver sales began to tank in March or April of 2008.

Residential property sales in Greater Vancouver totalled 2,997 in March 2008, a decline of 16.3 per cent from the 3,582 residential sales recorded in March 2007, and a decline of 25.7 per cent compared to the 4,033 sales in March 2006.

The Real Estate Board of Greater Vancouver (REBGV) reports that residential property sales in Greater Vancouver totalled 3,218 in April 2008, a decline of five per cent from the 3,387 sales recorded in April 2007, and a 3.8 per cent drop from the 3,345 sales in April 2006.

VANCOUVER – The Greater Vancouver housing market continued its re-balance between sales and listings last month. The Real Estate Board of Greater Vancouver (REBGV) reports that residential property sales in Greater Vancouver declined 30.7 per cent in May 2008 to 3,002 from the 4,331 sales recorded in May 2007.
All of the above is from the REGBV website: http://www.rebgv.org/monthly-reports?month=May&year=2008
It just kept getting worse:http://www.huffingtonpost.ca/2012/07/04/vancouver-home-sales-10-year-low_n_1649539.html

“This summer, sales went off a cliff,” added Somerville, who is director of the centre for urban economics and real estate at the Sauder School of Business at the University of B.C.:http://www.canada.com/vancouversun/news/business/story.html?id=e6e0c211-fddd-413b-9a94-3564e20567d8

The financial crisis did not start until Lehman Bros failed on September 15, 2008.

Here are the housing starts specs:

Apparently our builders aren’t as smart as the Nobel Laureate. Starts for all types of homes stayed above the average for 2004-2008 till the end of 2008. They plummeted after the fact. Perhaps the writer is putting his own spin on what Smith said. I wasn’t there so I don’t know.

The other thing to note is that the writer never actually asked Smith if he thought Vancouver was in a bubble. He did a follow up interview with him but seems to have avoided asking the question directly. He says, “Using Smith’s formula for housing bubble-burst scenarios, B.C. and Vancouver do not appear threatened, despite record-high prices in the latter. B.C. housing starts this year are up 3.1% from 2013 and forecast to rise a further 1.4% in 2015, according to Canada Mortgage and Housing Corp.” Why not just ask him what he thought instead of making a supposition?

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Bullwhip29
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Bullwhip29

China’s PBOC cuts interest rates for first time since 2012

Girlbear
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Girlbear
@57
Guest
@57

Yawn…as usual the article is all commentary no facts.

@59
Guest
@59

“Sidewalks that end for no reason, or only exist on one side of the street.”

OMG cross the street to walk on the other side?

Judging by the success of the Canada line I think a lot of RIchmond residents disagree.

Shut It Down Already
Guest
Shut It Down Already

“Seriously, if you live in a condo on #3 Road why would need to drive for shopping, restaurants, fun?”

Richmond isn’t very walk-friendly. Sidewalks that end for no reason, or only exist on one side of the street. Intersections where you can’t cross on all sides. Large distances between crossings. Traffic light cycles that take forever. Oh, and sprawl. Lots of sprawl. Can’t say much about #3 specifically, but if I lived in Richmond I’d consider car ownership to be compulsory.

George
Guest
George

Just scanned comments on that zerohedge article. Best comment is this play on The New Colossus poem that appears on the Statue of Liberty — a poem highly symbolic of the role of immigration in settling North America. Written by someone posting under the name medium giraffe:

“Give me your corrupt, your crony, your oligarch masses yearning to launder money free,

The criminal masterminds of your destroyed environment and police state.

Send these, the pampered, the private jet setter to me, I open my hands to your golden yuan.”

http://www.zerohedge.com/news/2014-11-20/caught-tape-how-children-chinese-oligarchs-live-it-socal#comment-5472608

George
Guest
George

Caught on Tape – How the Children of Chinese Oligarchs Live It Up In SoCal

http://www.zerohedge.com/news/2014-11-20/caught-tape-how-children-chinese-oligarchs-live-it-socal

@patriditz
Guest
@patriditz

“The “5000 year old culture” line was just made up by the Chinese so they can feel superior.”

Well they are superior to you in every way. Chinese are smarter, richer and have more than you will ever have. There is a reason the government panders to them and could care less about you.

@3P
Guest
@3P

You better wash your hands or you will get Cancer. LOL!

bullwhip29
Guest
bullwhip29

while we’re on the subject, does this look familiar? (aside from the prices, of course)

welcome to “Richmond”, California complete with palm trees and nearly 365 days/yr of sunshine
http://www.businessweek.com/articles/2014-10-15/chinese-home-buying-binge-transforms-california-suburb-arcadia

Shut It Down Already
Guest
Shut It Down Already

Nobody talks about inventory anymore?

bullwhip29
Guest
bullwhip29

sorry, forgot to add the link…
http://www.youtube.com/watch?v=sH8sSKwS_gU

bullwhip29
Guest
bullwhip29

@ #38

doubtful. it’s just not in their dna. while the kiddies might enjoy the partying and what not that goes on up there, their wealthy parents have better things to do with their money than buy an overpriced condo next to a ski slope (yes, that’s even compared to vanc prices). imho, they’ll drop a million on fancy sports cars before giving any thought to scooping up a ski chalet in what i think is a completely overhyped, overrated and overpriced little winter village

Boombust
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Boombust

Patriotz,

So true. I visited Mao’s mausoleum in June while I was in Beijing; they treat him like a god…

I must say, though, he DID look a little wan and pekid.

Son of Ponzi
Guest
Son of Ponzi

#47
“let your teeth turn yellow and rot”. Now that’s racist.
Also, I can see a moving coming “The Dentist of NottingHAM”

patriotz
Member

@47: “I may not come from a 5000 year old culture”

Nobody does, except perhaps some tribes living in the Amazon or New Guinea.

The “5000 year old culture” line was just made up by the Chinese so they can feel superior.

Now the point could be made that a recognizable Chinese culture has existed since around the time of Confucius, but you could say the same about places like India or Iran.

I also find it amusing that the Chinese still see fit to honour the megalomaniac who tried to destroy their traditional culture and did a pretty good job of it.

3P
Guest
3P

@@guy

You must be Chinese. Maybe you were distracted by the double 4s on my post ( ooooh! Scary fours! ) or maybe you were taken out of your grade 3 class for ESL, but either way you have no idea what you are talking about.

I may not come from a 5000 year old culture, but I like to think the modern world has something of value to contribute. Like “the GERM theory of diseases” for example.

http://en.m.wikipedia.org/wiki/Germ_theory_of_disease

Now if you want to keep believing your silly oriental mumbo jumbo be my guest.

@SOP
Guest
@SOP

“First a basement dentist, now a acupuncturist with Hep”

Yes just do what the British Canadians do. Don’t go to the Dentist at all. Let your teeth turn yellow and rot.

No wonder they don’t go to the dentist in the UK:

“22,000 dental patients recalled over HIV and blood-borne virus fears amid concern over Nottingham dentist”

http://www.independent.co.uk/news/uk/home-news/22000-dental-patients-recalled-over-hiv-and-bloodborne-virus-fears-amid-concern-over-nottingham-dentist-9855184.html

@44
Guest
@44

“Any traditional chinese medicine practitioner knows that disease isn’t caused by germs”

Actually anyone with more than a grade 3 education knows disease is not caused by germs.

3P
Guest
3P

Any traditional chinese medicine practitioner knows that disease isn’t caused by germs but by yin, yang, qi, xuĕ, zàng-fǔ, meridians so don’t need to worry about unsanitary needles. There’s no such thing.

Son of Ponzi Says:
November 20th, 2014 at 2:49 pm 21

First a basement dentist, now a acupuncturist with Hep

Ditchmondite
Guest
Ditchmondite

I also noticed they very aggressive ask for care cards now.

An acquaintance, chinese with accent, was in a car accident. Medical staff were very aggressive and condescending with her trying to get her care card which she didn’t have.

I hear a lot of people dine and dash, so to speak, on their medical bills back to the homeland.

Ditchmondite
Guest
Ditchmondite

@Son of Ponzi

Last few times I went to the doctors office I saw a lot of people loosing their cool with patients and on the phone due to language problems.

@SOP
Guest
@SOP

“Chinese Doctors don’t go into Oncology”

Strange why there are so many doctors with Chinese names working at the BC Cancer agency?

http://www.bccancer.bc.ca/HPI/SON/Council/Council.htm

SOP you are such a racist loser.

Loon
Guest
Loon

Translink get ur act together, 2 broke down buses in one day, c’mon !

@29
Guest
@29

@World is awash in money
@Wow

Oracle is back with new handles! I thought you were going to retire till the new year. Don’t you Surrey house wife’s have better things to do?