Archive for the ‘USA’ Category

Vancouver a graveyard for job seekers?

Wednesday, April 16th, 2014

There’s been some discussion lately about the temporary foreign worker program (TFW) and whether Canada needs to import workers, skilled or unskilled.

This of course brings up the debate: companies say they can’t find people to fill positions, workers say thats just because you aren’t paying enough.

Is there something special about Vancouver that enables lower wages to be paid or are is it not true that Vancouverites tend to be underpaid?

Atomic Frog had this to say:

Here are some of the facts that I know of

Highly skilled and highly in demand workers do not stay in Vancouver. You get paid higher in another city and cost of living is likely lower than living in Vancouver. Local companies ALWAYS have problem hiring qualified applicants and if this snowball, they cannot stay in business for very long or be very competitive in their sector. What kind of industry is doing very well in Vancouver anyway these days? Movie industry? Mining? Tech? I work in the local IT industry for the last 20 yrs. I saw all kind of IT ppl who came to town, found a job and eventually left town after a couple of yrs because they had found a much better paying job in another city.

As a result, Vancouver is considered to be a graveyard for job seekers. Even for those who have a job, local salary has been stagnant for yrs. Without a steady stream of local workers who should see their annual salary go up steadily every yr, it is very difficult for this local property bubble to continue.

There are many cases in other parts of the world where property value goes up and stay there. Main reason being foreign investor, but the locals also keep making more money over the yrs. Prices that were higher five yrs ago may not seem to be that high for those cities. However, can we say the same thing for Vancouver?

Do you know skilled workers that have sought better career opportunities outside of Vancouver or are you and your coworkers properly compensated and happy to stay?

Chuck Norris and Vancouver Facts

Monday, July 29th, 2013

Bubble blind Canadians are amazed at the asking price for the Dallas home of Chuck Norris.

Yes, Vancouver, there are places you can get a decent home for $1.2 million.

You’d have to make do with just 4 bedrooms and 8 bathrooms in just over 7,000 square feet.

There’s a theater, a gym, a pool. You know, the basics.

Chuck Norris House

 

Of course, what it doesn’t have is Vancouver.

And for those that don’t know, here are a few Vancouver facts courtesy of reader crikey

Vancouver fact #20:
In Vancouver you can ski, surf, swim, and spend eight hours in the Emergency Room waiting to see a doctor to treat your hypothermia — all in the same day!

Vancouver fact #56:
Vancouver’s property salepeople’s tears can cure cancer. Its a shame that none of them will ever have reason to cry, since Vancouver home prices are only ever going to go up.

Vancouver fact #106
Vancouver could shrink its abundance of rainy days if it *really* wanted to. But Vancouver chooses to allow so much crummy weather every year because it is being ironically hip.

Vancouver fact #66
Children in Vancouver seldom bother to buy chewing gum. There is no point do doing so, because everybody knows that some fundamental laws don’t apply to Vancouver, bubbles cannot ever form in Vancouver.

Vancouver fact #27
Vancouver is home to the greatest Wizards in on Earth! Harry Potter and Gandalf look like rank amateurs compared to Cam Good, a Wizard/salesperson who once put a group of Vancouver property salespeople in a yellow helicopter and magically transformed them on the evening TV news into well-monied overseas investors scouring the city for purchases. More recently, the Wizards at ‘MAC Marketing Solutions’ took two unrelated employees with different nationalities
and magically turned them, on various leading nightly TV new broadcasts, into sisters whose wealthy parents were buying into the condominium market — from the selfsame building MAC was marketing!

(more…)

TD defends Canada from Krugman

Monday, June 24th, 2013

Why is everybody picking on the Canadian housing market lately?

US economist Paul Krugman was one of the latest to say that we’re at risk for a housing market collapse.

An economist at TD bank couldn’t let that stand though, and was there to defend our delicate reputation.

“Largely owing to a continued low interest rate environment, mortgage interest costs as a per cent of personal disposable income have fallen despite the sharp rise in the debt-to-income ratio,” she added in her report.

“Meanwhile, while mortgage delinquency rates in Canada and the U.S. were similar during the 1990s, the per cent of mortgages in arrears 90 days or more in Canada is about a third of what they were in the U.S. leading up to the 2008-2009 crisis.”

Ms. Petramala cited the “riskier lending practices” in the U.S. between 2002 and 2007, and the tighter restrictions now in place in Canada.

Of course the reason ‘tighter restrictions’ are in place now in Canada was because they had become rather loose.  And as Patriotz points out, mortgages arrears are a trailing rather than leading indicator.

The TD spokesperson is ignoring the fact that the US housing bust started in 2006, when mortgage arrears were at historic lows, not in 2008. Mortgage arrears are a lagging indicator of falling prices.

Lots more “it’s different here” for your enjoyment.

Read the full article in the Globe and Mail.

Learning from the neighbors

Monday, May 6th, 2013

There’s another one of those semantics question articles in the Financial Post:

Canadian Housing: Bursting bubble or gentle landing?

Here’s one chunk of that article with a few asides that always seem to be missed:

Lewandowski believes Canada will not suffer a U.S.-style housing crash simply because policymakers had the benefit of watching it happen next door.

“What we experienced here in the U.S. with housing markets and regulators goes directly to the attitude and changes the minister of finance has made in Canada. A regulator who is being proactive is taking Step One in making sure the housing market doesn’t find itself in a bubble,” Lewandowski said.

So often it seems that ‘bubble’ is used as if it refers to the collapse in prices. It doesn’t. The ‘bubble’ is the inflation of prices beyond reason. By the time the collapse comes the damage is already baked in, falling prices are a correction of the problem, not the problem itself.

Both Bank of Canada Governor Mark Carney and Finance Minister Jim Flaherty have been on the march against a housing bubble for years, aware how low rates and loose lending standards in the United States ignited a boom and bust there.

Well, Carney and Flaherty have definitely been ‘warning’ of consumer debt levels for a while, but government policies like following the US into 40 year zero down mortgages didn’t help to prevent a housing bubble.

The central bank has held rates low since the global financial crisis because growth remains tepid and global woes weigh on Canada’s export market, and Canadians can find a five-year mortgage rate below 3%.

Meanwhile in the states you can lock in to a 30 year mortgage for 3.35%. In fact, while house prices in the US were correcting, interest rates were falling as well.

But the government’s gradual tightening of rules for borrowers — a firm admission that the market was hotter than anyone was comfortable with — has taken some steam out of the market, and economists, like Carney, seem to believe a soft landing may be at hand.

“We’re encouraged by the fact the level of housing starts has come down to slightly below demographic demand, as we see right now, there’s still more adjustments to go,” he said in testimony to Parliament last week. “We’re encouraged by the evolution of house prices in a number of markets. We’re on the path to a balanced evolution of the household sector and we all have to continue to be vigilant.”

Ok, we’ll continue to be vigilant then.

Zombie foreclosures

Tuesday, April 2nd, 2013

Here’s a weird scene from the aftermath of the US housing bubble…

You’ve all heard of underwater mortgages, but have you ever heard of a zombie foreclosure?

There are more than 300,000 properties in the US where the owner has abandoned the property but the bank never completed a foreclosure.

What does this mean?

Reuters revealed the plight of people who walked away from their homes not realizing that their names remained on the deed and that they were financially liable for taxes and other bills related to the abandoned property.

In some cases, homeowners vacated after receiving a notice from the bank of a planned foreclosure sale, only to find out later the bank never followed through.

Zombie properties can be easy to spot as they deteriorate into neighborhood eyesores and havens for criminal activity.

Read the full article here.

Vancouver house prices ‘flat’ like San Diego

Wednesday, February 6th, 2013

b5baxter updated his crash curve graph over at Vancouver Peak.  This is what he posted in the comments section on this site:

Latest REBGV HPI imposed on my price drop model:
http://vancouverpeak.com/Thread-Crash-Curve-Graph?pid=389#pid389

The HPIs continue to show remarkable correlation to the model.

I know some people feel that the bubble is “popping” very slowly here. But so far at least it seems to be following the same trend we saw in US cities that saw a 40% drop in prices.

If it continues to follow that trend we won’t have to wait 7 years to see bottom – just a little over two years.

…That’s right. The current rate of price declines in Vancouver that some have described as ‘flat’ is actually falling at the same rate that US bubble cities fell at their peak.

Yes We Have No Bubble Trouble.

Tuesday, January 22nd, 2013

For all of you worried about a ‘housing bubble’ just stop and read this article:

No Housing Bubble Trouble.

At the national level, what could possibly kick national home prices downstairs? There is nothing to suggest massive job loss ahead or a huge oversupply of new homes. That leaves only the dubious assumption of a big increase in mortgage interest rates as the trigger for any nationwide decline in home prices. But national housing prices did not fall in the past when mortgage rates rose to twice their current level.

Oh, wait.. Sorry that’s from the Washington Times in 2005 and refers to the US market.

This is the one I meant to point to:

No Bubble, No Trouble.

A housing slowdown in Toronto and Vancouver could affect consumer confidence in regions with strong economic fundamentals like Calgary, Edmonton and Halifax, adds Don Campbell, best-selling author of Real Investing in Canada. But rather than a sharp decline, you’re more likely to see slower rates of price appreciation and home sales, says McKellar. “Overall the economy of Canada compared to other countries is still doing very well,” he says. “Housing markets are a function of the economy. Not the other way around.”

Hat-tip to Patriotz and Many Franks for the article links.

 

 

Flaherty won’t ‘stand by’ in recession

Thursday, November 8th, 2012

The more things change the more they stay the same.

The president is back in the white house and there’s rumbling of a fiscal crisis again.

Flaherty has said he’s not going to take another recession lying down.

Finance Minister Jim Flaherty and Bank of Canada governor Mark Carney both pledged Wednesday to take action to support the economy if a shock from the U.S., or Europe, threatened to once again plunge the country into recession.

“We are a pragmatic, sensible government. If our economy goes into recession because of an external shock from the United States or the eurozone, or both, we will take steps to stimulate the economy,” Flaherty told the Commons finance committee in an evening session.

“What we have done before we will do again. We will not do exactly the same thing again…but we are not going to stand by and have the Canadian economy slip deep into a recession with high unemployment.”

Chinese buyers move to the USA

Wednesday, July 11th, 2012

If you’re wondering why we haven’t heard as much about wealthy chinese buyers lately as prices drift down in Vancouver, maybe it’s because they’re moving to the USA.

“California has always been popular with Asian buyers,” he told beyondbrics. “But whereas before it was mainly buyers from Taiwan, Hong Kong and Japan, now we are seeing more mainland buyers visiting.”

Reasons for purchases vary, say those who have dealt with overseas Chinese buyers. Some are buying because they want to emigrate or they have children who will go to school in the US. More and more Chinese millionaires are looking to settle in the US or at least secure residency rights.

 And why would they be buying in the US as opposed to Canada?
Others buy because the numbers add up: the renminbi is relatively strong against the US dollar and property prices are cheap compared to Australia or Canada.
But it’s not supposed to work like that!  Wealthy people aren’t supposed to look for good deals..
Are they?
Read the full article on ft.com

Big banks facing home credit risk

Tuesday, May 22nd, 2012

A new report issued by US ratings agency Fitch says that fast-rising home prices and record levels of household debt pose a threat to the credit portfolios of Canadian banks.

The agency examined the exposure of Canada’s six largest banks to mortgage risk and found that household debt fuelled by mortgage credit expansion in Canada is the largest threat to credit profiles.

“These are quite high levels of debt for households and the movement in house prices, we don’t think this is sustainable in the long term,” said report author Fabrice Toka, senior director at Fitch.

The six banks have a combined $730-billion in mortgage exposure and an additional $182-billion in home equity loan exposure, the report noted.

High unemployment or interest rate shock “could aversely affect the ability of leveraged homeowners to meet their mortgage obligations,” the report said.

The risk testing scenario looked at drops of 1 to 10% and sees CIBC and RBC as the most exposed to mortgage value risks. The debt-to-income ratio in Canada is currently higher than it was in pre-recession US, but Fitch points out that there are structural differences in our housing market.

Here’s the full article in the Financial Post.

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