Canada, foreclosure, opinion, predictions, prices, supply

As oil, so goes Real Estate?

64
64 Comments

Over at the CBC Don Pittis notes that what goes up can also go down.

Specifically, he notes that in the oil market there were a number of ‘experts’ with access to detailed data and analysis, yet seemed to be as surprised as anyone at the drop in oil prices.

Canadas housing market is of course a completely different beast, and we don’t really lack for ‘experts’ noting that prices are a bit out of sync with reality.  When the Finance Minister speaks up and the Bank of Canada estimates that real estate is as much as 30% overpriced nationwide that’s not exactly ‘without warning’.

Pittis notes another key difference between oil and housing is of course the liquidity of the market:

This is one example of how housing is different from oil. While oil trades on big, well-informed central trading desks by large corporations, housing is a market made of individual, many of whom have only bought and sold a house once in their life.

Partly because of that, housing is an illiquid market. Unlike stocks or oil, you can’t just sell a house at today’s price and get out. You have to go through the long process of finding another individual who wants to buy your exact house at a price at which you are willing to sell.

In previous housing downturns that has meant a stock of overpriced houses builds up because buyers are unwilling to pay the price sellers expect.

At that point, prices in the market are set by people who have to sell immediately and will take the price offered. Sudden divorces. A new job across the country. A death in family. People who can’t afford to keep up their payments. Overpriced properties waiting for their price actually fall in value while the seller waits.

Read the full article here.

64 Comments
newest
oldest most voted
Inline Feedbacks
View all comments
Westside Realtor

Hey Whistler or bust, I own batter as well. I was speaking to the price of oil and it’s implications on capex cuts and therefore job cuts and economic fallout. When Repsol pays a 60% premium in cash for Talisman it shows you how the baby went out with the bathwater. So I am not debating that. I think oil will fall lower, before recovering, as the oversupply will get worse near term simply due to the trajectory of projects in motion. That said I think that huge cost cuts are coming (which will ultimately balance the market) and in the interim will impact employment in Alberta in a big way. The Saudis/opec could announce production cut backs tomorrow which would out a big bid under oil, I just don’t think they have brought Iran and Russia fully to heel,… Read more »

0
0
bobwestsiderealtor

Marco, here’s one for you:

http://vreaa.wordpress.com/2012/10/22/sitting-with-equity-and-eager-to-use-it-they-purchased-the-three-unit-brownstone-in-the-up-and-coming-area-of-bedford-stuyvesant-for-725k-by-re-mortgaging-their-vancouver-house-for-around-80-p/

Two years later the above exhibit is no doubt making out like bandits. Their cash flow positive Brooklyn investment continues to throw off cash and both the NYC and Vancouver property will have appreciated in value.

Why are we to think that your astute observations are any less accurate than the former VREAA?

0
0
Marco

Thought this New York Times article was very revealing on China’s slowing housing Market.

http://www.nytimes.com/2014/12/19/business/international/in-china-housing-market-pressure-to-sell-hesitation-to-buy.html?_r=0

This paragraph really stuck out to me:
“Now he estimates that the price of his family’s apartment has dipped to $85,600 from 90,000. “If I had extra money, I would definitely buy a second apartment right now for investment purposes,” Mr. Cao said. “Some people are waiting for prices to drop further, but what if prices go back up? You would have lost the opportunity.”
There is a 13-18 month oversupply of unsold properties reported, this could be higher.
Seems Chinese with money put most of it into housing as investment. HAM that have bought here undoubtedly have investment properties back home. You do the math.

Cheers.

0
0
Whistler or bust?

And…oil has broken back to the downside. WSR My Baytex was up 6% today. WSR please stick to fabricating tales of HAM and leave oil and investing to others. I have a question, why do you cheer the decline of HAM so much? If you are indeed a Realtor you make money when a transaction happens so you should want activity. As a Realtor you don’t care about the “customer” you care about the sale. You are not an advisor but a sales person. Sales people don’t cheer the decline of their biggest market. You are a fat phoney and everyone here knows it. That said, it has been so boring around here most people are probably looking forward to your pretend posts. You will act as if you never read this post as you do to any critical posts.… Read more »

0
0
space889

@53 – There is a difference between sticking up for someone and understanding why someone might be at upset of the actions of others.

You obviously can’t understand the difference. It’s all we are right and you are wrong, pure black & white for you. You simply can’t understand why other people might have different opinions from you and that understanding the difference and pointing out those differences to 3rd party dosen’t mean agreeing with the other party.

btw, for a woman just wanting to get through life with some respect and dignity without caring about politics and such, I fail to see how North Korea is worse than the Arabic countries where woman can’t go to school, have virtually no rights, and basically prisoners in their own home.

0
0
quid-pro-quo

International League for Human Rights presents whistleblower Edward Snowden and journalist Glenn Greenwald with journalism prize

0
0
logic

Guys, it’s North Korea; who gives a crap? They only exist as a state so that other countries can laugh at them.

0
0
paulb

New Listings 40
Price Changes 15
Sold Listings 88
TI:12036

http://www.paulboenisch.com

0
0
|Boombust

#52,

Tedeastside is an idiot. He doesn’t actually KNOW anything.

0
0
Yunak

@29

There must be a way to send that garbage back for recycling.

0
0
...

from wikipedia…

>International human rights organizations assess North Korea as a category of its own[1] with no parallel in the contemporary world[2] when it comes to human rights violations.[3][4][5]

despite this space889 feels the need to stick up for them. because an insulting movie justifies threatening to blow up theaters full of people and violating the privacy of thousands of employees. free speech be dammed.

0
0
Shut It Down Already

You do realize that the USA ranks amongst the top 5 source countries for immigrants coming to Canada?

0
0
Son of Ponzi

Americans and Canadians always had contemporary villains in their movies.
The Nazis, the Russians, then the Arabs.
Can’t have any Asians, because halve the population is Asian.
The good thing is the next war will be fought by computer hackers.
No people will be killed, but the collateral damage will be huge.
First ones to be targeted are the high speed traders.
Move your money out of stocks.

0
0
space889

Did the assasination succeed in Manchurian Candidate? Was it filmed by a powerful Communist country that could actually carry it out?

0
0
space889

– Geez…you are dense…

The premise of the movie has nothing to do with where it was filmed. Geez…Lord of the Rings and Hobbit are all about Middle Earth and it wasn’t exactly filmed in Middle Earth was it? Nor did they employ authentic orc, elf, darwve, or hobbit actors.

I said the premise of the movie is about North Korea opening up to the West like giving interviews by its leader to Western reporters. And what’s the reward to opening up? Your leader gets assasinated. That’s the premise of the movie and its not hard to see North Koreans get worked up over this.

0
0
patriotz

@46: “Do any of those movies have a communist spy doing the assasination? ”

Manchurian Candidate for one. See it, great movie.

“this movie is about taking advantage of North Korea opening up to the West”

You think it was filmed in NK or something? And anyway NK has actually become more closed under Baby Kim than under Middle Kim. Unless you count visits by that clown Rodman.

0
0
reasonfirst

Poor taste Says:
December 18th, 2014 at 9:53 am 39

“Imagine if the roles were reversed”

You don’t need to imagine, NK’s attempt are hilarious:

https://www.youtube.com/watch?v=VWrG7jzEZio (a dream about destoying America)
https://www.youtube.com/watch?v=CJoQOQHQ8oA
https://www.youtube.com/watch?v=2bEL2jlEt9o

0
0
space889

@StupidityCheck – Do any of those movies have a communist spy doing the assasination?

Another point, this movie is about taking advantage of North Korea opening up to the West which is what US keep telling them to do, and the reward for doing this? Have their leader assasinated. This is just poor taste.

Lastly, US has the ability to do this kind of thing with impunity to other countries, but not vice versa. That could also explain such reaction from certain groups. What do you think Germany/UK/France would feel if there is a movie about removing their president or equivalent simply because US don’t like him/her?

0
0
space889

also, there still hasn’t been any hard evidence that North Korea did this, aside from US government making assertions they did without any proof. And if North Korea really did it, do they really have the ability to actually carry out the threat?

As for stifle to free speech, etc, it is the theatre chains that pulled the release because of legal liabilities more than anything else. If you want to blame someone, blame the lawyers and American justice system, moreso than the hackers threat.

0
0
space889

@43 – if you really believe that, I got a bridge to Vancouver Island made out of gold to sell you. You just need to send me $10K security deposit first.

Geez…one look around the post-WW2 history and you can see that US and pretty much all the civilized countries are only out for themselves with themselves defined as the 1% + political class. There is no “we” in international politics.

0
0
...

east asians see the world in terms of collective ethnic pride and nationalism. they know who ‘we’ is and who ‘they’ are.

n. americans have attempted to shed such barbaric perspectives and develop more modern and rational systems.

when dealing with, or living in n. america they can enjoy great benefit by accepting all the benefits our inclusive tolerant equal societies give them but not reciprocate. we see this as exploitative, “finding loop-holes”, etc. but to them it is the rational strategy.

and we have no defense. our system only works if everyone plays by the same rules. but we no longer have the will to ensure that. now, we have to adopt their culture just to stop being exploited.

0
0
StupidityCheck

@39 – We don’t have to “imagine” what the response would be.

http://www.screenjunkies.com/movies/genres-movies/action/10-best-president-assassination-movies/

0
0
Mortgageslave

@39 – pssst, it’s a movie. go rant on IMDB!

0
0
history

I live on Vcr Isl and have no problem whatsoever saying No to money, whatever the race of the individual. But, more importantly, i say No to govt welfare money. Now with this outta the way, thankfully i wont need to learn another language or learn to kowtow (am i spelling this right, grasshopper?)

The point is we are heading for a deflation, where all the debt lovers will be scrambling for cash from all sources, sacrificing their morals, values and ethics to get there hand on the filthy lucra, borrowed because (the definition of debt) they think their future utility is worth more. Well, they are going to find out that maybe it isn’t.

0
0