patriotz
Member
You're disappointing me Vibe... I have my fingers crossed it's just flattening because lots of people are out to beat the HST
Out to beat a tax that does not apply to resale properties (which are the vast majority of listings) and thus will require the prices of new properties to adjust downward.
Yes that's consistent with the logic that buyers have been showing.
@patriotz: one beats the HST on legal and Realtor fees. Not huge $ for many but, depending on how leveraged buyers are, that's enough to make a difference. I agree, though, I think the HST is a whole lot of nothing when it comes to prices for a long while and could even be net positive once the dust settles.
VHB
Member
Here is my projection for MOI for the rest of the year. This is a fairly conservative projection. If we had higher interest rates, a double dip recession, another financial crisis, a china bubble burst, or whatever, things would look worse than this.
In the table below are my projections for inventory and for sales. I compared the annual patterns of inventory and sales to previous years and made a wild-@ssed guess. The 'avg' column is the 2006-2009 average for monthly sales.
INVTY AVG Sales PROJ Sales PROJ MOI
June 18,500 3,720 3000 6.2
July 18,500 3,223 2500 7.4
August 19,000 2,848 2400 7.9
September 20,000 2,654 2300 8.7
October 21,000 2,705 2300 9.1
November 19,500 2,300 2000 9.8
December 15,000 1,756 1500 10.0
Here is the MOI in a chart.
moi-projections-june2010.jpg (35.9 KB, 2 downloads) 1 year old It's worth considering how much inventory needs to be wiped off before prices will stop falling (let alone go up). It's looking like August and the rest of the year will be lackluster for sales. To stave off further price drops, inventory will need to drop by around 40% to bring MOI below 6 again unless sales start picking up pronto. Not necessarily impossible but who knows.
bearishbull
Member
Total inventory down to 15962.
We know sales have dropped off a cliff so the good news is that the inventory number is falling because people are taking their properties off market.
The bad news is that they can afford to. As long as variable rates don't rise people who have locked into a variable or even have an open mortgage will feel no pressure to sell.
5 year rates have dropped back down to 3.79% which I really don't understand, because this time the Federal government is not buying the crappy mortgages off of the banks. I know the bond market dictates fixed rates indirectly, but I'm surprised the Canadian banks are not charging a higher premium in light of all the risk factors.
I'd like all of your comments on what would happen to Canadian real estate if the US (NOT Canada) experienced a hyperinflationay event next year.
VHB
Member
"I'd like all of your comments on what would happen to Canadian real estate if the US (NOT Canada) experienced a hyperinflationay event next year. "
Why on earth would you expect a hyperinflationary event next year. Excuse my french, but that is pretty much impossible. We are threatened with inflation, not hyperinflation.
Tony Danza
Member
I'd like all of your comments on what would happen to Canadian real estate if the US (NOT Canada) experienced a hyperinflationay event next year.
How about your comment on what to expect if the deflationary forces at work in the US continue or worsen for the next 5 to 10 years?
The story is DEFLATION, there is no inflation and definitely no hyperinflation on the horizon for the US or Canada.
bearishbull
Member
I see biflation in the US with a real possibility of hyperinflation.
1) The smart money is actually starting to short US bonds. Apart from Pimco and the banks who's buying them? Not China anymore...
2) THe US cannot continue to roll its debt with more debt indefinitely and definitely not at 2.5% for a 10 year treasury.
So when the shit hits the fan and US Treasuries are dumped the US dollar will tank. If you see a spike in commodities the same day as a significant drop in the US dollar index then you know something big is afoot.
At the same time, I beleive we will continue to see deflation in the US housing market because we haven't gone below the trendline for home prices yet.
Also in Canada I expect the Bank of Canada to print more money to keep our loonie "competitive" with the tanking US dollar. This will also lead to bond rates increasing in Canada which will lead to 7% 5 year mortgages again.
Gold is in a bubble and will continue to be as will silver. Buy it now not because it has intrinsic value but only because there will be greater fools buying it in the future. Also vs. real estate I think it is a great trade right now. Sell you Vancouver real estate and buy some physical gold / silver and buy agricultural land in the valley if you find a deal. Not because it's going to be the end of the world and you'll need to grow your own food, no. Buy farmland simply because food is going to get more expensive.
Biflation.
More expensive food and energy (inflation). Less expensive homes and a general unwind in debt stemming from foreclosures (deflation). Salaries flat or at least well below inflation. Unemployment stagnant or getting worse.
That's how I see things.
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