Thursday’s Numbers

I took a little time off work last night and can report that Billy Gibbons hasn’t lost a step. 35 years, same three guys, same three chords.  I told someone there I’d seen them twice in the 70s and I don’t think he believed me 🙂

 Anyway, short numbers: 255 new listings and 125 sales, for a sell/list of 49.02%.  Listings aren’t skyrocketing, but those are low sales numbers. 

Inventory hit 11,338, while over 90s hit 2,479, or 21.86%.

What’s the word on the “real estate street” about the credit crunch?  Some people don’t know about it. Some aren’t worried.  Some people I spoke to who workin on-line brokerage think we’re going to see some big waves in the next 90 days.  A banker I know is taking a wait and see attitude before re-investing after selling.  Another client is moving ahead with purchasing rental property with acceptable numbers.  In other words, it is the topic of the day, but feeling is very mixed.

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38 Comments

Filed under Daily Numbers

38 responses to “Thursday’s Numbers

  1. Snick

    “Some people I spoke to who workin on-line brokerage think we’re going to see some big waves in the next 90 days.” – Rob

    Meaning?

  2. robchipman

    Snick:

    You know exactly what the meaning is. They think debt will get sold for 60 cents on the dollar. Those are big waves.

    Here’s your response:

    “Well obviously there will be waves. Anyone other than me who sees that is a nincompoop. Its obvious. And, anyone who disagrees with me is a nincompoop who should be in jail”.

    (Did I get that right? 🙂 )

  3. Snick

    “They think debt will get sold for 60 cents on the dollar. Those are big waves. ”

    Yes. A tsunami of sorts. Did I get that right?

  4. robchipman

    Yeah, Snick, you got their fears right. The point it that they may or may not be right.

  5. jesse

    The old adage is that markets climb a wall of worry. Until they don’t.

  6. househunter

    Lumber processing is down 10% this year because demand from US Housing has dropped off. Crude is dropping in price. Those are big hitters in the economy. The credit squeeze is another thing that is making people feel uneasy. Time will tell if this hits our local real esatate market. Its seems like nothing has hit us for years…could this instability correct this insanity … it might but it won’t be over night.

  7. Captain Credit Crunch

    If there was ever a event to sway RE Investors this will be it. From here to Dec. if housing doesn’t let up don’t expect it to. I don’t remember ever hearing some much Neg. press on R.E. and credit in general. Either this starts a exit it to the doors or just a ripple in the pond. Stay tuned……..

  8. DOC

    Is this the equivalent of “kicking them when their down” and is it worst than a no doc loan?

    http://tinyurl.com/2fsa3s

  9. Snick

    “The point it that they may or may not be right.” – Rob

    Oh, I’m sure they’re right.

  10. Al

    Citizens Bank’s comments on this issue:
    “It will take two or three more months for the sub prime/ credit debacle to make its way into economic reports, namely; consumer confidence, employment, durable goods, GDP etc.
    Equities have given back some of their gains from the past few sessions as several key ananlysts came out yesterday and started tossing around the R word (recession- though rate cut would be an acceptable answer).”

  11. Snick

    “From here to Dec. if housing doesn’t let up don’t expect it to.”

    There is ALWAYS a price correction after any boom. We are in one right now.

  12. A

    With the high prices, credit crunch news, etc happening, there still appears to be lots of activity.

    In the past 2 weeks, 3 people at my workplace have had real estate transactions:

    1) One bought a newer home (principal residence)
    2) One sold principal home and moving family to live in parent’s basement and “waiting for market to correct” to buy bigger home
    3) One sold principal home and traded up for newer bigger home

    Different situations and outlook on real estate, but still transacting.

  13. An

    “From here to Dec. if housing doesn’t let up don’t expect it to.”

    You must mean YOY as surely things will slow down approaching the winter.. the interesting time will be next spring.. if we see another 10-15% increase people who bought early this year will already have a 30% cushion when there’s a correction..

  14. rentingsucks

    CMHC has opened up the credit floodgates recently. See the fudge thread on mohican’s site if interested. Basically if you have good credit, no debts and at least 5 percent down you will be allowed to borrow up to 44 percent of your gross income to service your mortgage.

    I ran the numbers and I can nearly afford prices where I want to live. The question is do I want to afford. The money left over at this level is pretty skimpy. If everything stays the same I’d probably be OK although my lifestyle would be low on frills. If it doesn’t I would be in a world of hurt.

    I think this explains the recent inventory drawdown and also puts us in more serious jeopardy. We don’t have subprime per se but borrowing more than you can afford is effectively the same thing. Also note our interest rates do reset normally after about 5 years depending on your mortgage term.

    How many people here would borrow at 44 percent of their gross income?

  15. tkmongoose

    ZZ TOP rock!

  16. fish

    Actually to show we are a fair and balanced….July new home sales in the US went up a tad from June…about 2.8%.

    (though I expect these to be revised down in due course…and August’s numbers wont be pretty at all with all the turmoil)

  17. Snick

    (though I expect these to be revised down in due course…and August’s numbers wont be pretty at all with all the turmoil) – fish

    Very likely.

  18. Strataman

    Vancouver, Canada
    P/E: 28.61
    Vancouver has one of the lowest rental yield rates of any city measured, at 3.19%, despite high prices. Across Canada, despite the same tax system, the effective annualized return rate resulted in a much better P/E of 16.31. Owners need to be aware that such a large spread keeps the rental market strong and the market for sellers more stagnant. The pool of buyers remains relatively small as renters can get the same property at significantly less cost and invest the difference.

    http://tinyurl.com/yovtcl

  19. coco

    People are just starting to talk about subprime. Personally, I don’t think everyone knows about or quite understands the implications of this problem yet.

    Royal Bank has 1.2 billion of subprime exposure, but we will not know more details until the next quarter because they are calling it nominal.

    Consider subprime like a unknown cockroach infestation. You don’t know how many companies have an infestation problem, you don’t know the extent of the infestation and you don’t know what it will cost them to battle their infestation in the end.

  20. coco

    Next shoe to drop in the subprime woes…. credit cards.

    http://tinyurl.com/3addhu

  21. coco

    In addition to Air Canada & Air Transat, I mentioned previously about being involved in illiquid commercial paper. More Canadian fallout: NAV Canada, the Ontario government, Greater Toronto Airport Authority and Ontario Teachers’ Pension Plan, have millions tied up in the commercial paper market too, in some cases, these millions have now become completely illiquid.

    60 Canadian money market mutual funds are on a watch list for potential liquidity problems. Canada’s top five banks (RBC, CIBC, Scotia, BMO & TD) do not have money market exposure to the “illiquid” asset type.

    Bank of China has 8.965 billion worth of subprime exposure. Hong Kong bank 1.6 billion.

  22. WoodenHorse

    Actually to show we are a fair and balanced….July new home sales in the US went up a tad from June…about 2.8%.

    Yes fish, but let’s look at that in a measure that means something. Year over year. Note that this is the second July with negative numbers.

    http://tinyurl.com/36pcv9

  23. WoodenHorse

    Sorry…..here’s a preview URL

    http://preview.tinyurl.com/36pcv9

  24. Anonymous

    “Vancouver, Canada
    P/E: 28.61”

    Well, since we have “The Best Real Estate Anywhere!” and Monaco has a P/E of 74.07, clearly prices here should be 159% higher… even more if you consider how much better our RE is than the stuff in Monaco and factor in potential for increasing rental prices (how many renters are spending 44% of gross income for rent?)

  25. Annon

    I really enjoy the links to good articles here today. 🙂

  26. The unthinkable "Renter"

    I got a rare opportunity to talk with my employer last week. A Billionaire 🙂 He can’t believe how much the loose lending has bumped up the price of homes!

    It’s the fear factor of the average consumer being priced out which causes a frenzie.

    He bought an investment apartment block, was offered an amount he couldn’t refuse and SOLD it!

    Psycology plays an imense roll in this run up.

  27. Jay

    Blueskies, good post and thanks! That is good news because I want back in the market. Making a buy right now would be insane so a correction (significant) would be very welcome!

  28. Coq_Mike

    It’s amazing how blogs, internet, cable T.V., and radio can now pump out bad news 24 hours per day.

    You just have to wonder how helpful all this information actual is?

    I started buying real estate 16 years ago. If I did not have this experience I think I would probably be to afraid to ever do a deal. Stuck waiting for the news to turn positive.

  29. fish

    Wooden horse- you are right YOY the drop is 11%.

    However I wanted to show that we don’t just concentrate on bad news 🙂

    Here’s another place for numbers. which I have been following:

    http://vannumbers.wordpress.com/

  30. TI

    fish

    I did a simple counting.

    Wow the total of units is around 8200. This is really a huge supply.

    The correction in Downtown will certainly be much worse.

  31. fish

    OK guys- draw the curtains, lock the doors and above all keep this to yourself…..

    Fish is ready to call the top.

    I think we are seeing buyer exhaustion and will likely see some ‘have to’ sellers drop prices in the next month or two.

    Could I be wrong…you betcha.

    There could be ‘an event’ in Taiwan/China/Iran/Saudi/Europe/Korea and the rich could come flocking over to buy safety.

    But if not I think we have seen the highs and a gradual decline is coming.

    This comes from talking to realtors, bankers, developers in the last few weeks.

    They could be wrong and so could I.

    Good luck. You can open the curtains now.

  32. Coq_Mike

    fish:

    If you are right what will it mean?

  33. News Flash

    “I did a simple counting.

    Wow the total of units is around 8200. This is really a huge supply.

    The correction in Downtown will certainly be much worse.”

    8200 over 4 years in downtown (mid 2007 to 2010) is about what we have seen over the past 4 years (2004 to mid 2007) and prices have doubled.

  34. Snick

    “I think we are seeing buyer exhaustion and will likely see some ‘have to’ sellers drop prices in the next month or two.” – fish

    Where have you been? Asking prices are being reduced and NEW listings are being priced lower.

    For example, a fairly decent-looking house came on the market on Brunette St. in Coquitlam just the other day. It is in VERY nice condition and has a two bedroom basement suite.

    Price? 459K…you wouldn’t have seen THAT a few short weeks/ months ago.

    So, wake up.

  35. fish

    Coq-mike

    If it plays out as I mentioned, It will mean you have the opportunity to bargain a price down.

    Not more than that yet.

    RE will come off the boil, and those that have to sell, will be more reasonable and the realtors will less likely to throw out stupid numbers and then reduce it $300K (18%) like the example I gave in a previous post.

    My friends just sold their place for almost $1 m . Listed at 1.28M last year. Dropped to over a Mill this srping. They had to sell. Took a second back from the buyer for 200K to make it happen.

    So whoever tells you RE is still red hot is not accurate.

  36. tqn

    “My friends just sold their place for almost $1 m . Listed at 1.28M last year. Dropped to over a Mill this srping.”

    it was over priced at the first place. Your friend could list as high as he wanted. But ultimately, the buyer made the offer, and if your friend accepted it, then that was the value of the property!

  37. robchipman

    Fish:

    Two multiple offer situations in the last two days. It is still a hot market.

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