Bob Rennie has a plan: Tear down the leaky stadium and replace it with (hopefully non-leaky) condos.
He estimates the land BC Place sits on is worth anywhere between $250 million and $400 million, depending on the kind of density the City would allow. “So if you look at that value and what the province and the City could do with that money elsewhere, there’s just no return in owning it as BC Place so that you can have the Pope or the Queen come every 10 years.”
How far will oil prices drop, and what effect would that have on our local real estate market? There is a theory that part of what has driven our market is wealthy Albertans profiting from high oil prices buying up BC real estate.
Oil is now down to around $55 per barrel from a peak of $77 in late august. In the last week alone prices have dropped $5.
There’s an article on MSNBC today about the lower oil prices, some of the factors behind them and predictions for the future.
There a few oil analysts who believe oil prices could be headed for a much bigger fall â€”especially as heavy investment in new production during the recent price run-up begins to bring a big increase in supplies to market. Even at $55 a barrel, that investment in new production will remain strong, according to Peter Beutel, who follows the oil market as president of Cameron Hanover.
â€œWe will find a lot more at these prices,â€ he said. “A proven barrel of oil is how much you can get at todayâ€™s price. I believe we have that a lot more oil on this planet than people believe. And we are going to find it over the next few years.”
Beutel thinks oil prices could fall as low as $20 a barrel in the next 4 to 8 years before beginning to rise again.
So anyone think there’s a chance in hell of seeing oil at $20 a barrel in the next 4 to 8 years? And what sort of effect would that have on our real estate market? I could see lower gas prices (along with improved roads) possibly driving demand in the suburbs, but I wonder what sort of effect lower gas prices would have on the income side of the equation, particularly if there’s anything to the ‘rich Albertan’ theory.
Take a look at this chart and tell me if it looks like a bubble to you:
What does this graph show you ask? Thats the number of ‘bad news’ bearish bubble blogs focused on the BC / Lower Mainland / Vancouver real estate market over the last couple of years.
1) March 2005: Vancouver Housing Blog
- – the original and still the key source of data on Vancouver housing bubble info and economic analysis.
2) Nov 2005: Rob Chipmans
- – not actually bearish, but I give him half a point for being somewhat open to the naysayers and sharing data.
3) June 2006: VancouverCondo.Info
- – Hmm.. Hey that’s me! You are here.
4) Oct 2006: Vancouver Unrealestate
- – Solipsist brings more humor and a personal touch to the realm of those who just want a home to live in but aren’t willing to pay double the rent value for it.
5) Dec 2006: BC Housing
- – “uncertain buyer” just sold his house and is watching prices slide down for the last few months. He’s looking for indicators that its a reasonably good time to buy in the interior.
6) Jan 2007: Financial Planning and Personal Sanity
- – A financial planner / home owner in langley examines the downside of the BC market with a focus on graphing past market data and drawing connections to the current market.
All of these blogs are updated regularly, most every day or two. See that upswing in the last four months? Clearly this growth is unsustainable – it looks like we have a ‘bubble blog bubble’.
I will say one thing though: With all this focus on the Vancouver market anyone doing the most minimal research should not be caught off guard if real estate prices continue to drop for quite some time.
Now if you’ll excuse me, I’m off to make the big bucks. I got a tip about an internet startup that will be selling pet food online. Looks like a sure thing!
Last summer with all the rush to ‘buy now’ and steadily increasing prices in the Vancouver real estate market there was a prediction about house prices in 2010. Essentially someone took the rate that price were going up at that point and extrapolated out at the same rate to hit the prediction of an average house in vancouver going for one million in 2010. I must admit I also got swept up in the excitment with my bold prediction of condo prices reaching an average of THREE MILLION DOLLARS.
Unfortunately for us soothseers prices have actually been flat or dropping month after month since last summer, and its starts to get harder to see how we could ever hit that estimate.
So what are the conditions that could cause prices to shoot up again to hit that 1 mil in 2010 extrapolation? I’ve come up with a few:
1) Oil hits $4,096 per barrel. Flush with cash, the Alberta government buys a house in vancouver for every man, woman, child and house-pet in the province, whether they want it or not.
2) The Canadian government starts printing more money. LOTS more money. A loaf of bread costs $80 bucks and the fifty dollar coin is introduced into circulation.
3) Vancouver incomes double in the next year and more than half of them come with a rock solid 10 year contract and a lifetime supply of free bread.
4) Local real estate marketers develop a ‘mind control ray’ that convinces people they must ‘buy now or be priced out forever’. The ray also convinces banks and lenders to hand out loans that are 15x stated income.
5) Demand from planet Zegnbar skyrockets. The Zegnbarian exchange rate is so favorable that a Zegnbarian toenail clipping is worth about $460,000 CND.
Thats about all I can come up with on this Monday morning. Have I missed any?
Well, I’ve gone and done it. I’ve turned off anonymous comments. Everyone is welcome to sign up for a blogger account and post away under a user name – You will of course remain anonymous, you just won’t be called anonymous. If you’re posting at the Vancouver Housing Blog, Vancouver Unrealestate, BC Housing or Mohicans new blog you already have an account that will work here.
Reductimat, wannaget2calgary, anonymous and all others that requested I get rid of anonymous comments: you were right and I was wrong. Its very hard to track a conversation happening between a bunch of anonymous posters and we were getting too many insults going back and forth. Can’t we all just get along?