On The Verge Of Setting New Records
Nobody made a point of it when I posted the October Stats release, and its time for a new post, so I’m going to post links to two graphs.
The first is the Average Price Graph for February 2008. Its pretty easy to say that’s when we peaked in average price terms.
The second is last month’s Average Price Graph. Its pretty safe to say that we’ve recovered everything we gave up after early 2008. Any new price gains will take us back into record territory.
What are the short term predictions, especially if we define “short term” as between now and the Olympics? Personally I see listings dropping, demand staying stable, and more price rises.
What about after the Olympics? We will see an Olympic Hangover? Will it mimic the market after Expo ‘86? (Prices rose after Expo ‘86, btw).
Thoughts?
84 comments
“Nobody made a point of it when I posted the October Stats release” And what does that tell you Rob? Its been a hot market for how many months now? We get it already!
Anyways, to answer your last question I see us stagnant then declining gradually after the Olympics. Certainly in sinc with rate hikes which are surely on the horizon. And what is your opinion Rob?
Why are rate hikes “surely on the horizon?” Fed’s Bollard today said the US may not raise rates until 2012 and OIS spreads are predicting about 2011 for an increase. You really think Canada will raise ahead of the US and send the Canadian $ soaring well above par? Canada has to wait for the US to raise and that’s not happening anytime soon. This market will likely continue higher for at least 1 or 2 more years.
IMHO it is obvious that we are going to have great RE situation as long as the rates are low. The variable at 2.15 % is very tempting
However, I’d rather have 6%, or maybe even 8% interest and $350k mortgage, than 2.15% variable and $500k mortgage.
slowly higher 1 or 2 more years, good call. baring some unseen event, but that’s always the case.
rates are a far 2nd to employment as a driver for real estate prices.
what’s happening with employment in BC? why would that impact anything?
Two very important differences between Expo 86 and 2010 olympics. The fair lasted for 5 months not 2 weeks and Vancouver Real Estate was undervalued and after we were exploited. The RE situation Vancouver is in now is overvalued to the extent where we are nearly the most expensive in the least desirable climate. Again pre Expo good value for money and apres Olympics what are you actually getting for the huge price tag. Bad investment.
Who cares about before or after Olympics. Why don’t you define “short term” as before and after the June interest rate hikes that will make the whole house of cards fall.
anon:
What it tells me is that a lot of people miss obvious things that are important and comment worthy. If you already knew that we’d re-reached the peak I apologize for telling you again. However, I have a suspicion that this creates a change – I’m just not sure which way. Does it make the market even more bullish or do new, even more dizzying heights make a correction more likely in the short term? Is it a stagnant saw off? Hence the request for opinions. Personally, I don’t know what it will do, but I still think crossing the bar is important.
Anonymous 5/6:
“rates are a far 2nd to employment as a driver for real estate prices”
Not sure I’d agree or that history around here proves you right. I’m hearing replays of all the median income and affordability arguments. Who’s buying, and how’s their empoyment looking? It may not be the same as general employment. Meanwhile, something stopped the correction before we even corrected. What was it? Most would say low rates.
disbelief:
Agreed, Expo was very different from the Olympics. My point really is that many remember the real estate market falling after the Olympics and refer to that memory as if it were actually the truth, which it isn’t. The danger of an Olympic hangover strikes me as real, but I’m a cracked crystal baller, so what do I know?
Ray:
” Why don’t you define “short term” as before and after the June interest rate hikes that will make the whole house of cards fall.”
Please expand.
Has anyone read the housing article in the Georgia Straight? Things seem to be humming along just fine.
http://www.straight.com/article-270305/vancouver/real-estate-bounces-back
“7 Disbelief Wed, Nov 18, 2009 | 1:25 pm
Two very important differences between Expo 86 and 2010 olympics. The fair lasted for 5 months not 2 weeks and Vancouver Real Estate was undervalued and after we were exploited. Again pre Expo good value for money and apres Olympics what are you actually getting for the huge price tag. Bad investment.”
Who said most of the buyers after Olympics are buying properties for investment? Once the Olympics are over, people who want a second property here will buy because they want a vacation home. Not because it’s a sound investment.
How many people do you know that buy vacation properties use metrics as a main factor in buying? They find a place they like, see if they can afford it and just buy.
The tiny slice of market (Upper Lonsdale) that I follow is right now critically short of properties under $900,000, but glutted with properties over $1 mil. 60% of the homes are over $1 mil when maybe 6% of the sales since Sept 1 have been over $1 mil. Right now you could buy a crack house for $800,000 or spend 25% more for something really nice. And all the buyers are opting for the crack house?? This is not a balanced market and I can’t believe there are many who are spending their own money in it. My prediction is that sales slow down between now and the Olympics due to the vanishing supply of homes that first-time buyers with 5% down can get with CMHC insurance. Prices will go up slightly, as all homes below $800,000 are subject to bidding wars. Higher priced homes will languish on the market, but not come down in price because their owners are hoping for wealthy foreign buyers lured by the Olympics. The spring market could go either way, depending on how the Olympics go (surge of foreign buyers or taxpayers on hook for massive cost overruns?). But eventually it will all crash horribly.
Barbara, intersting analysis, thank you.
I noted several more vacant retail spaces downtown today (not vs. yesterday, it had been a few weeks since I’d been to that area – Bute/Alberni area), does anyone make anything of the rising commercial/retail vacancy rate? What about the news about South Granville vacancy skyrocketing, does this play into things at all?
“does anyone make anything of the rising commercial/retail vacancy rate?”
In the US, commercial real estate is “the next shoe to drop”, according to Roubini: http://www.rgemonitor.com/blog/roubini/226654/. I also have been noticing the growing number of vacant store-fronts. I know that many insist Canada’s economy is completely different from the US, but I’m pretty sure they mean the same here as there.
Here’s a new record to eye: average detached moving over one million.
It could happen.
Rob
My point really is that many remember the real estate market falling after the Olympics and refer to that memory as if it were actually the truth, which it isn’t.
You meant after Expo to which to my memory is when we saw a rise.
I believe that was based mainly on the fact that we were good value and that is why we saw an increase.
SC
Where are all these stupid people coming from that can’t see much better climate for both weather and investment. Yeah I bet there are lots of investors that want to pay more than Hawaii prices and Beverly Hills prices for a little piece of a cold wet rainforest. If you truly believe that wealthy people want a little piece of heaven like that. There maybe some but not that many I can guarantee that.
The prices are too high and must come down. It is inevitable. This is a nice place but nowhere near the best place on earth. That always gives me a chuckle. Why would you want to pay more for your license plate to state such blasphemy.
Disbelief said:
“Where are all these stupid people coming from .. yada .. yada”
Let me guess.. priced out and bitter?
BELIEVE brother. Get on the wet-coast express and buy yourself a shoebox before its too late.
Mortgage rates falling….
http://ca.news.yahoo.com/s/capress/091118/national/mortgage_rates
“people who want a second property here will buy because they want a vacation home. Not because it’s a sound investment.”
So someone coming here for a week in February will look at the city and on a whim decide to drop 400 big ones on a condo. In the middle of winter where it’s too cold or wet to go outside, and where the ski hills will be jammed full of tourists or inaccessible due to security concerns. Yeah right. Foreign investors are and will remain the great saviour for propping up prices, even though a scant handful actually end up purchasing. The stats back me up — the vast majority of buyers are locals. Myth busted.
Sounds like an interesting spot on Global news at 6:00. Canada’s debt to hit 500 billion any day now. That’s a bit over $16 000 per person, babies and retired folks included. Add to that BC’s current debt anywhere from 40 billion to just under 100 billion (yes, I was a bit surprised by that) depending on who is counting what so $9000-22 000 each BC resident and I think we just may be looking at a problem looming. Incidentally, our provincial debt servicing, interest only, is $2.1 billion last fiscal year and is official figures.
I just hate it when the figures have such a wide range, I just don’t know who to believe. I looked at official BC figures, Statscan, Fraser Institute, The Tyee, CUC and others. I’m pretty sure the “official” figures don’t include a lot of so-called private debt that is nonetheless backed up by BC taxpayers. P3’s, BC hydro, BC ferries and so on. We as BC residents are expected to pay enough to those various entities to service the debt as well as pay the operating costs, we have no choice, so why is the debt so cleverly shuffled off the books we can see and hidden from freedom of information? Kind of a rhetorical question, I do know exactly why, but I don’t care for it too much.
Olympics Shmympics,
Let’s get this 5 ringed circus over with and get on with the crash.
Low interest rates won’t keep this Titanic afloat – just ask the Japanese. Thank god for all the buyers this year, there won’t be any left in 2010.
ABC
I am not a renter I am a west side homeowner. I have sold my investment home in Late 2005 and am waiting to buy a rental property when fundamentals make sense. Investors aren’t buying into the hype at least smart investors. Ask Rob how many investment properties he has bought in the last 5 years and ask why? It doesn’t make sense to buy a house with a suite. Why on earth would anyone buy a $400k shoebox in the sky unless out of fear. Stupidity.
Great post up by Matt Stiles at Futronomics. http://tinyurl.com/yjkhjo8
A large snippet
“If you start with faulty assumptions, your analysis is bound to have faulty conclusions. Right now the assumptions are that:
- Banks were always well capitalized – it was just a lack of confidence that put them in jeopardy – and now that confidence is restored, everything will be fine.
- The lack of confidence caused people to save money – thus dampening consumption from its “normal levels” – and with enough “stimulus” there will be a disincentive to save, spurring consumption and helping boost GDP
- There was not enough regulation – new derivatives and bank activities managed to circumvent existing regulations – and with bigger or newer regulations these activities will be brought under control
- Pay incentives for financial executives encouraged unnecessary risk taking – changing the incentive structures for executives will help eliminate excessive risk
- The lack of a resolution authority was the reason why more big banks did not fail – the creation of such an authority will ensure systemic risk is limited
- The present financial system serves a social purpose by providing access to credit which encourages growth and prosperity
All of these assumptions are false. And there are many others. The decisions being made now are based on these assumptions, and therefore their chance of success remains zero. Just as the avoidance of crisis was in 2007.
What are the real problems?
The problems noted above and their accompanying “solutions” have one thing in common: they disregard debt (credit) as any sort of problem. This should come as no surprise, because those who put forward their interpretation of the issues and those who seek to legislate solutions to them nearly all subscribe to economic ideologies that dismiss credit growth as potentially destabilizing for an economy.
But credit growth is the central problem. And the inability for credit to grow further is what caused the crisis. Again, this was a mathematical certainty to occur at some point. One needs only a calculator and 6th grade math to reach that conclusion. When credit growth is compounded at annual rates between 6-15%, it does not take long for the parabolic advance to reach a breaking point. We reached that breaking point when our debt servicing to income ratio began to rise faster than our incomes and the equity in our primary assets (homes). Credit expansion slowed and asset prices, which had already priced-in years of future credit expansion began to be re-priced to levels more in line with our incomes. ”
(Rob, oh Rob, where is bold, italic, block quote or anything to help out formatting?)
It’s a big post, lots more where that came from. I just hope Canada can learn from the disaster unfolding in the US and get off that path before we are doomed to that bad of an outcome. I have little hope, our beloved leaders seem to be bound and determined to head down that road but even faster so we can blast right through the mud pit that the US got stuck in. I consider it more of a brick wall than a mud pit, and good luck getting through that with more speed.
Re: the market – I don’t think the Olympics will have much effect on prices either way. Listings might rise as people who’ve been waiting to ‘cash in’, try to sell but there won’t be much downward pressure until the rates start rising (who knows when that will happen?). Until then I’d expect continued growth, but probably at a slower pace.
Barbara – Thanks for the interesting take on the N.Van market. I wonder if that’s a similar trend in other areas of Van? I’ve heard some anecdotal info that homes in the $800-900K range in the Main street corridor have also been selling with multiple offers, while more expensive properties close by on the west side are sitting longer.
re: 19 Barbara Sampson – shortage of homes under 1m in Upper Londsdale ? Will Vista Place help with that ?
sorry, re: 15, not 19
I would concur with barbara, in case of dunbar, PG and kistsilano. I am seeing the most prolific realtors (selling realtors) moving from dunbar and PG to kitsilano townhomes.
I guess, the trend is there – let see how this would work out.
On other observations, from AgentWill site, its easy to follow the list/sell ratio going 50% , 60%, 80%, 100%, 80% on weekly basis. This is very symptomatic trend, which I suspect matches well the recent statements from the BOC and Finance Minister that they would act on RE Bubble sooner then later. I am not claiming this is THE REASON for the list/sell ratio recent rocket launch, but have funny feeling that its more then coincidence.
Other observations – run into open house where the selling Realtor lives. He is living there for NUMBER OF YEARS and now is for sale. The place is not emptied yet – he/she still lives there. I guess he is scaling down (sarcastic) since the townhome is listed for 808K – what he is going to scale down into is beyond my logic. Gotta be upgrade, eh ? (riiight, not moved out yet)
wait and see, we are entering really turbulent times (next 6monts).
My forecasting – the sales would ease down to minimum, and stay there for next couple of months. Olympic would inhibit a lot of sales. After the olympic there would be some pickup on both ends (selling and listing) and depending on the current mood (economy) , it could turn up or down. The next breaking point is the summer.
Economy – too many people are calling for dip(correction) in the stocks – most of these people are quite smart in what they do. It seems to me that this dip with the low sales would not help the sales in the spring.
Came back to see if anything had changed, after stopping reading in disgust a few months back. Still the same sad, lonely voices:
The prices are too high and must come down. It is inevitable.
Thank god for all the buyers this year, there won’t be any left in 2010.
But inevitability, of course, isn’t an argument; and trying to spin bad news into good is, in retrospect, so typical of the arguments posted here and at VHB over the years.
Simply delusional. I’m sincerely sorry I listened to this BS for so long. I’ve paid the price: I’ll probably be a renter for life (unless my employer relocates to Terrace or something, ha ha), as I don’t feel like carrying a mortgage into my 70s; and my marriage has strained to the breaking point as my bear smugness has evolved to eating crow.
There will always be a reason that a crash is “just around the corner,” but it’s time to face reality.
You people are wrong.
I agree with Rob that surpassing the previous peak is an important emotional event. For many prospective buyers, headlines that real estate has reached an all time high can ellicit the fear of being priced out or, conversely, solidify beliefs of a pricing bubble. My question is what type of client is driving the current market? It’s too bad statistics aren’t availble for the percentage of buyers who are first timers, trading up or simply investing. During the Spring of 2008, it was noted that first time buyers had essentially abandoned the market.
I had an interesting discussion with a well heeled Asian real estate investor (tens of millions invested) a few months back. His belief was that as an investor, there were better opportunities in the U.S. real estate market over the long term. His views on Vancouver was that a correction would eventually occur and could be partly triggered by the exodus of large scale Asian investors to American markets that have retrenched and now offer better prospects for longer term returns than Canada. While Vancouver has a large Asian population, many large scale Asian investors have bought properties throughout the country over the last ten to twenty years. Rebalancing their portfolio is largely a business rather than an emotional decision. That said, it’s hard to say how reaching a psychologically important barrier of record all time prices will affect the local market.
In terms of inflation, I think we need to look at it on a broader horizon. As a buyer in the sports industry, I’ve seen increases in efficiency as retail has been consolidated and large chain stores kept prices down by vertically integrating with factories in China over the last couple of decades. With our prices decreasing to the point where we make pennies on the dollar for private label products directly sourced from factories, I can only see an increase in long term prices. The introduction of new labor laws in China and the rising costs of raw materials will in my mind lead to eventual price increases for consumerables. In our industry, we are already seeing an increase in wholesale prices from suppliers for next Spring. It will probably be early summer or Fall before the consumer starts to see inflation at the retail level but in our industry, we can already see it coming. Also, in our industry, there has been a lot of oversupply in recent years and companies are reducing the amount of inventory they are bringing in and weaker suppliers have declared bankruptcy. I suspect that what we are seeing in our industry may reflect what is happening in other industries across North America. From my point of view, inflation seems inevitable, but our worry is whether the consumer is willing or has the ability to pay higher prices. 2010 will definitely be an interesting year, but then again is not every year a year full of surprises?
Haven’t posted in a while. Prices are high and they might stay high for longer than people think. At some point, interest rates will have to rise – as all that money printing will mean higher oil prices which will trigger inflation. As unpalatable as it is politically to raise interest rates at some point it will happen and when that does, the correction will begin. The problem is that government has a vested interest in higher asset values because it allows money to be created as people borrow against assets and stimulate the economy.
Well.. if we assume that bulls expect the market to take off after the Olympics, bull sellers would want to wait to sell after the Olympics and bull buyers would want to buy (or have bought) before the Olympics (before the expected rise in prices). If we also assume bears expect the market to balloon in listings and prices to drop after the Olympics, they will wait to realize price drops before buying after the Olympics.
So if neither bulls nor bears are buying after the Olympics, then there would have to be a large influx of outside investors to buy up all the properties that will inevitably hit the market when bears try to realize their profits, no? Oversimplification perhaps, but the argument does make sense does it not?
Bears won’t be forced to sell to realize profits after the Olympics, so I don’t see much downward pressure there. If they list and they’re not getting the price they want, I presume they will just wait rather than drop the price.
Continued upward pressure will come from cheap money and the fear that it’s running out (rate hikes). But money probably can’t get any cheaper so I expect a moderating upward trend. Good point about the $1 mil barrier, curious if it’ll have any psychological effect.
doubter 29
How about instead of trying to lay your blame off, you grow a pair of balls, make your own decisions and live with them. Man up, because your lack of ownership could fill the Grand Canyon dude.
There are only 3 things you can do: buy, sell or wait. Obviously you and your wife didn’t decide on one of those choices TOGETHER and that’s a waaaaay bigger problem than whether you bought a house or not.
-
Ziggy @ 30, good point about global-scale investors looking to markets with more potential upside than Vancouver. I think carefully choosen properties in the states will provide a good return over the next decade. If I were one of these investors, I would have put my properties on the market in September to avoid the bad weather of Oct-Jan, the gridlock of Feb-Mar and the post-olympic instability after Mar. The lack of any effect in the markets caused by the potential flight of these investors probably speaks to the relatively small number of them in the local market. Further proof that this market is driven by locals (both live-ins and investors).
I’ve got a fair amount of my capital in cash in a couple banks waiting for a buying opportunity in both RE and stocks. But I’m nearing another $100K boundary and I need to find another bank to open an account in. Any suggestions for a bank that I can easily transfer money to online similar to ING?
In keeping with this thread’s theme, a cornucopia of resources for prognosticators (not to be confused with onanists)…
First up, Barry @ BigPic abstracts a ’worst case’ scenario concocted by one of Société Générale’s leading lights…
http://tinyurl.com/yfssx22
For the more detail oriented amongst you – here’s the actual report in PDF form (about 3MB)….
http://tinyurl.com/y9h5vuf
And from BenStein, a few pithy remarks on the difficulties inherent in forecasting (Ben is a much better actor than economist – but this piece was simply too good to miss)….
http://tinyurl.com/y8p67hc
And here’s an excellent little piece courtesy VOX… ‘Top-down versus bottom-up macroeconomics’
http://tinyurl.com/yk89vx7
And what compendium would be complete without Dr. Doom’s take?
… ‘While the United States may technically be close to the end of a severe recession, most of America is facing a near-depression’….
http://tinyurl.com/yagyh6p
Perhaps Dr. Doom is on to something…. From CalcRisk:
‘The MBA reports a record 14.4 percent of mortgage loans were either one payment delinquent or in the foreclosure process in Q3 2009. This is an increase from 13.2% in Q2 2009. ‘…
http://tinyurl.com/ydr7s2u
And this mornings last piece – not, strictly speaking, concerned with economic prognostication – but I’m sure most of you will be able to connect the dots. Thanks to Elizabeth Drew/Politico…
“A critical mass of influential people who once held big hopes for his presidency began to wonder whether they had misjudged the man. Most significant, these doubters now find themselves with a new reluctance to defend Obama at a phase of his presidency when he needs defenders more urgently than ever. ”
http://tinyurl.com/yaorc2x
A thought about average salaries vs average house prices: Should the average worker be able to purchase a house? That is to say, is home ownership a right or a privilege? Should we be concerned that the average worker can’t afford a SFH in Van West, or even a downtown apartment?
My 2 cents: prices will trend up, unfortunatley.
Builder’s pulled back in the nick of time.
HST will drive resale “frenzy”.
Maybe now’s a good time to buy and hold for a very short period, like a flipper on X! Buy a cruddy place now, redecorate, resell after HST. I mean if we think the bears are stupid, why not sell to them?
Just a thought.
Let the flaming begin….
A thought right back at you… If the average worker CAN’T afford an average domicile (note I didn’t say house), who is going to keep the market alive, and allow current owners to trade up, downsize, or cash out entirely and retire to somewhere that it doesn’t rain so darn much and RE is affordable so you can free up some money to eat well?
Bears won’t sell to take in profits because there are none to take. Do not foresee listings explosion.
Consumers need to prepare for higher mortgage rates next year: advisers
http://www.news1130.com/news/business/more.jsp?content=b1958699314999
VD# 39 — HST will drive resale “frenzy”
http://ca.news.yahoo.com/s/capress/091119/national/hst_homes
B.C. hikes threshold on HST new housing rebate to $525,000 from $400,000
I here a lot of talk about how CHMC is the Canadian version of American subprime so since I don’t have much to do in this never ending rainy place, I decided to go and apply for a mortgage to find out what is it all about.
First , an interesting link then below a simplified transcript of the conversation with the broker.
http://www.canadianmortgagetrends.com/canadian_mortgage_trends/2009/11/caamps-annual-mortgage-market-report—2009.html
I asked for a 5 /35 year fixed rate with min 5% down payement and 5/35 with 300k down as well as a VMR and wanted to know for how much money I would qualify.
First , don’t think I am going to buy anything here, it was just a time killing exercise, if anything the terrible never ending rain and dull lifestyle is making me to consider seriously going back home (too bad because summer was nice)
So after this disclaimer here are the figures I gave the banker ( those figures are imaginary and have no relation to my real revenue)
Gross annual income: 95k, Est. purchase price 800k
Expenses estimated by banker: Monthly heating costs $67; annual taxes $2500, loan/credit card monthly: $360
In case of 5/35 with 40k down he qualified me for loan of $538 842 monthly payment $2404 with 4.20 interest rate
In case of 5/35 with 300k down he qualified me for a loan of $798 842 with 2534 monthly payment with 4.2 interest rates
I asked to get a lower interest rate in the second case where I put a bigger down payment since the bank was not taking as much risk as with the first one.
Answer: we take more risk when you put a bigger down payment because your loan does not have to be insured by CMCH, so if anything your interest rate could be higher because the bank is taking more risk. We are not in the business of foreclosing homes and selling to get paid, we prefer when you have a CHMC insurance as our risk is much lower than when you have a pig down payment above 20% of purchase price.
I asked for a VMR then, he quoted me a 2.25% interest rate for 35 years and qualified for 665 000 loan with 5% down payment.
I asked if I could put a bigger down payement ?
Answer: No. We will not give you a VMR loan if it is not CHMC insured!
I pointed out the absurdity of the situation in his reasoning, with taxpayer taking all the risk and they making risk free profit but all he said was don’t try to fight the government.
So in the end, maybe the Canadian banks are sound after all. They are not keeping any loans on their balance sheets, all risk is taken by CHMC.
As I have stated before, contrary if cracks will appear on the real estate, it will start first on commercial properties and not residential. Or maybe commercial is also CHMC insured? Sorry for long post.
http://tinyurl.com/ydtachq
Minute 1:30ish has a very nice comment on price/rent ratios and the bubble in the US.
In link above, he says, “we’re going to see a devastating environment for hotels in 2010.”
Hmmm… 2010, tourism, disastrous vacancies, hotels, rings a bell….
#44
Great post.
Thanks German Guy, very interesting experiment. Now stop complaining about Vancouver!! You kept calling it WetCover (which was a bit boring) when you were over there, so it’s not as if you weren’t aware. And it’s just weather for God’s sake. Man up, as XB says.
Why don’t you go into the mountains, go skiing or snow shoeing or go into the wine region for a more classic Canadian winter or drive down to Seattle and see the Ghery building or visit Boeing or go shopping in Bellingham or take a Japanese cooking class or somesuch? It can’t be that bad can it?
hey Rob
now that B.C. hiked the threshold on HST new housing rebate to $525,000 from $400,000 (but only on the BC-PST portion?) how does this affect the federal GST portion? Say I want to buy a new home next August for $500,000.. what would be the total tax?
Thanks!!
GG 44:
Don’t be sorry! And don’t worry about the rain. Sometime in May we will get more than two days in a row without a downpour. Just take your vitamin D pills to prevent rickets and happy pills to combat SADS, repeat at the top of your lungs “this is truly the best place on earth”, forget all about the cultural and culinary aspects of Europe, buy a shoebox to huddle in and live on KD with what little remains of your money and you too can become a true Vancouverite.
Seriously, it is very scary indeed the risks being pushed onto the public purse so we can pretend the recession isn’t affecting us. This is going to come back and bite us.
48 ; I knew about it but we have a say, whatever woman wants god wants, and the summer was so nice. But I cant take this 24h rain and wind and in the mountains is not different, just came back from whistler. Its been rainning everywhere for 3 weeks now. But you are right, I am driving down to California in about two weeks just for the fun of it, it will be a change. And yeah, I am taking a boating course here, it is fun. ciao
GG/51,
There’s a lot of rain here, but we’re also lucky to have some beautiful places to watch it from. Find a small village on the west coast of the Island. Bring a slicker, a blanket, some soup, some wine, and some good books. Wallow in the wet until you find yourself having a good time.
(Oh, and the only reason to go see the Gehry building in Seattle is if you’re planning on accidentally starting a bulbous, ugly fire!)
The rain actually cleanses the air (the water sticks to dirt and pollutants and pulls them out of the air). One of Vancouver’s big appeals as a city is it’s clean air.
And water! Vancouver does have great water. Interesting that all the suggestions of how to enjoy the rainy aspect of Vancouver seems to involve leaving the city.. Just saying!
GG/44… Cheers for anecdotal!… This one’s for you (and it’s sincerely meant in the nicest possible way)…
http://tinyurl.com/y9pebc4
GG… afterthought… if that last one didn’t cheer you up… this one definitely will…
http://tinyurl.com/5mk6uk
50, that’s right, it never rains in Europe, nobody there lives in small apartments (and if you think 30 years is an “old” building here, you’re in for a shock over there), it’s all French men riding around on bicycles with onions around their necks delivering baguettes. All the apartments in capital cities are priced so that the average worker can afford them, and yes, there’s enough jobs for everybody. Oh, and public transport always works flawlessly
Have you BEEN to Europe, FTB? I think not. It is very hard to describe the difference there, but it is very different in a lot of ways. And taking your little lash-out at face value (rain getting to you?), I never said, and never would say that it is perfect there. I leave statements like that for BC residents desperately trying to justify having no disposable income left over, and dreading the results of the roof inspection.
Rain is great, makes things green and lush. Without rain you have a desert. Nice to visit, not so much as a home. But could be just as green with a lot less rain, especially this time of year. In Europe many, many people live very comfortably in small apartments, nobody needs rooms the size of meeting halls you never enter except to vacuum and inspect your “stuff” you never use anymore. Rarely are they AS small as we have here in many recent developments.
They don’t deliver baguettes, you pick them up at the boulangerie next to the charcuterie across from the grocer. Old buildings built to last and well maintained are fine and have have a character all too lacking here. Plumbing and electricity is, for the most part, perfectly adequate. Europe, although old, is by no means primitive. People live very well there. Rents (most people rent) are very reasonable. Right in the heart of the tony districts can be steep, but you don’t have to go too far out to find nice neighborhoods, and there will still be excellent restaurants and small shops to pick up all your daily needs within a short walk. Here you are doomed to fast food chains and driving to Superstore.
I sat in the line-up for the Port Mann after a 5-car pile-up for 1 1/2 hours returning from a call in Langley the other day, so your point about public transport is…? We ran into a problem with the trains in France, and were forced to spend some time waiting. I had a delightful conversation with a German couple to spend the time. Better than staring at the tail lights of the car in front of me. It works, it really works, and people spend less time commuting on average than here. We could learn a lot about how to enhance the quality of life from there. Instead we equate the size of the TV screen with enjoying a fine meal out conversing with friends or strangers eager to converse as friends do. I’m more used to it now, but my first time over was a real eye-opener.
And no, it’s not perfect, but some very important aspects are a lot closer to perfect than here and I am not so smugly insular to think we couldn’t possibly improve and that is not worth striving for. But hey, if living a lesser life and avoiding all thought that things could be better makes you happy…
Rob:
Here’s what I think. I think we are in a bubble. It’s hard to tell what might pop the bubble. I believe that it is so inflated, relative to both fundamentals like rent and income and to other markets, like those in the States, that it could pop without an external event like interest rate hikes. But it could also keep going up — a single tulip was worth the price of an entire estate at one time. Eventually it should correct. That could happen very quickly. I would not be surprised by anything.
[...] November 2009 · Leave a Comment This from Barbara Samson at robchipman.net 18 Nov 2009 1:45 pm [...]
Wow, 1 out of 7 homes in foreclosure:
U.S. housing crisis hits new level
http://www.theglobeandmail.com/report-on-business/us-housing-crisis-hits-new-level/article1370396/?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+TheGlobeAndMail-Business+%28The+Globe+and+Mail+-+Business+News%29&utm_content=My+Yahoo
[...] November 2009 · Leave a Comment This from Ziggy at robchipman.net on 18 Nov 2009 11:36 pm [...]
Let me tell you exactly what will happen. Read carefully. Take notes. Repeat after me.
The market is slowing right now. Sales are falling off a cliff. Sellers are beginning to get nervous. Prices will start to cliff dive over the next 6-15 weeks, down 10-12% by the end of March. And that’s just the warmup act.
Its going to be extrordinary – get your tickets now, hurry the show is beginning as I write.
Meltdown 2010
Unfortunate news….hopefully impacted folk are not carrying huge mortgages.
Anyone think unemployment in BC will crack 9.5% post Olympics?
Anyone noticing a ton of businesses going belly up these days (ie. For Lease vacated space..)?
VANCOUVER — Vancouver-based Washington Marine Group late Wednesday announced it is cutting its shoreside staff by 20 per cent as it struggles with the global economic recession.
The company, in a news release, said the decision follows from staff cuts in its shipyard and marine operations earlier this year. It provided no further information on the number of people who have lost jobs.
Washington Marine Group owns a variety of marine service companies including shipyards, tugboat and barge operators.
“With economic recovery still in the distance, the changes that occurred today with the various WMG offices, while very difficult and regrettable, were also necessary,” the company said in its statement.
Saw three Reduced stickers this evening.
Its coming, hard and fast.
Enjoy the ride muchachos.
how do you become a realtor in vancouver? do u need to take an exam or follwow any courses?
German Guy,
So you moved here because your wife is from here and wanted to come home? Or is she from over there and just thought Vancouver would be magical? Either way, life is supposed to be an adventure. Of course, adventures are better when the million dollar house you’re looking at on a grey day isn’t a complete dump. I wish I could help you but sailing sounds good and quite frankly, the Japanese food here is un-live-without-able after a few years of getting used to having it everywhere.
Wow,
I think HPs link to Garth interview is right on the money. “Frenzy” first and in advance of HST and then who knows where the panic will head. Either way, real estate in this town is defined by panic. Panic to get in and perhaps one day panic to get out!
Where? Where are the stickers. You live in my old neck of the woods so give me intersections and I’ll go see em.
rain haiku
rain loves the green moss
vd loves the sushi here
happy wet bear now
[...] 19 November 2009 · Leave a Comment Risk is being abnormally underpriced in the Canadian mortgage market. Despite the Bank of Canada’s call for prudence, there remains an apparent open invitation for buyers to overextend themselves. This from German Guy at robchipman.net 19 Nov 2009 at 12:44 pm [...]
My prediction:
* sales stay strong well into the Olypmics and for a few months after
* prices rise another 3-5% over this period at minimum
* interest rates rise 0.75% in March, with another 0.50% hike shortly thereafter
* sales start to slowly decline from March on, with an increase in the tempo of sales slowing from June on
* we see at minimum a repeat of the 14% decline that we witnessed in Spring/Summer/Fall 2008, but most likely a 20% fall when factoring in the recent price appreciation
* above price declines will start June/July 2010
In a time where recession is ending our company announced a 25 head cut to headcount, this is about 10% of local office. 5 of these jobs are gonig to India, and the rest are reductions.
Job Cust – I’m sorry to hear that.
MIA, it will be interesting to see how things unfold. I think the downside is greater. The HST grandfathering for new homes should supply some cushion through June as well, and help the construction trades for a while. But I wonder if things just aren’t so top heavy that the rise is done for good – we’ll see. Victoria prices got hammered in October (see http://www.greaterfool.ca today).
VD, saw another one this morning.
A very interesting ’harvest’ this morning!…
First up and decidely on topic – a CalcRisk compendium entitled, ‘A Few House Price Forecasts’…
http://tinyurl.com/ybdknv9
Much closer to home, a disturbing Tyee piece – ‘Welcome to the ‘Burbs, Meet the New Homeless’…
http://tinyurl.com/yfpyuem
And for those of you interested in GlobalMacro… try this piece from CNN/Fortune re: the ‘vig’ on UncleSam’s borrowings, ‘$4.8 trillion – Interest on U.S. debt’ (‘und counting’)
http://tinyurl.com/yj4xezk
Which – metaphorically speaking – ties in rather nicely with PaulKrugman’s NYT think piece, ‘The Big Squander’…
http://tinyurl.com/y8sn2jr
And finally (for the other ‘die-hard’ macro/political junkies here) - three very good pieces dealing, respectively, with US health care, Afghanistan and higher education… Have fun connecting the dots.
http://tinyurl.com/yee4szt
http://tinyurl.com/yaxswmf
http://tinyurl.com/yeanr3u
That last link is an example of ‘politics by other means’ - with a lead illustration that will look increasingly ‘familiar’ to YVR denizens in the run-up to Feb2010…
HP,
A video response to the Tyee article: http://tinyurl.com/kpnzfa
#58, I lived there for 30 years.
Global-Warming-SCAM-HackLeak-FLASH
http://tinyurl.com/ydow9wt
Global-Warming-REAL-Hack-Is-A-TempestInATeapot-ForTheLoveOfChrist-TakeResponsibilityForYourLifestylePeople!
http://www.realclimate.org/index.php/archives/2009/11/the-cru-hack/
HP:
Too many great links. I especially liked the politico one on “serious people” wondering if they misjudged Obama. Luckily the Ben Stein post comes in handy – as a “gimlet eyed” observer of politics I chuckle at the way a liberal who finally recognizes the obvious looks upon it as some sort of important accomplishment
Who can really be surprised that a guy who says he’ll bring the troops home, kill Osama Bin Laden deader than McCain will, can’t answer whehn life begins because “it’s above [his] paygrade, and who also says he’s at his best when he’s doing Jesus’ work turns out to be a…politician. (Don’t get me wrong – I like the guy and hope it all turns out well for him and that he ends up being everything everyone wanted him to be, but for right now its not health care, global warming or Aghanistan. Like Bush Sr. said so many years ago – “It’s the economy, stupid”).
Turkey:
C’mon now. Of course they’re going to deny the conspiracy and say that when scientists use the word “trick” its not really a trick, but let’s face it – denying the conspiracy simple confirms that it is a conspiracy. They’re busted!
I always knew it was a hoax, and I always knew that George Soros was behind it. I’m going to go buy a Hummer and run over some Priuses… Prium…Priii….whatever!
Prions. You know, like the ones in your head.
Today we (my hb and I) received in the mail a letter from RBC informing us that as of Jan 5 2010 the interest rate on our line of credit is going to be increased by 1%, “due to market conditions” and is not a reflection of our credit history. Since we owe big fat zero on our line of credit , I don’t care. But those who took money for DP from LOC, and I know a couple, will care a lot.
I think there are two opposing forces: one being the drop in interest rates, second being the general uncertainty in the economy (unemployment, V versus W versus no recovery). Given that our current interest rates are lower than at the peak in 2008, you might think that prices should go higher than the previous peak in 2008. However, it is probably fair to say both future expectations about the economy and current conditions of the economy have deteriorated since pre-peak 2008 times so this cancels some of the efficiency of the “stimulus”.
If you ignore the change in economy expectations and conditions, it is possible to calculate the present value of the lowered interest rates and put a cap on how high the second peak can go, assuming no major changes in economic conditions and expectations.
I would say a best case scenario is that the stimulus reaches its full potential and prices increase a bit more beyond the olympics, after which they will start to decline, assuming the economy does not recover in a V shape.
A worst case scenario is the economy doesn’t recover in a V shape and markets pick up on this early on, in which case, the correction may come as early as this holiday break.