There were 205 new listings yesterday and 137 sales, for a sell/list of 66.83%. Inventory hit 11,348, while over 90s reached 2,445, or 21.54%.
As rep tryouts begin and summer winds down are what are we going to see? Are we at a top? Will this global liquidity crunch become a spiral downward? That’s the question on everyone’s minds. I’m confident that we won’t see catastrophic losses in either the equities market nor in the local real estate market, but that’s probably based as much in my innate optimism as anything else.
I’m not hesitant to recommend good buys these days, but I examine the potential downsides with clients at length. I think we’re going to have some tough slogging for a little while in equities (even if, as we’ve seen so far, buyers return after each mini-crash). The classic scenario with the bear in equities is that after he leaves you uncover your head, look around, and see him coming back. That alone tells me that we haven’t seen the end of the recent volatility.
That can be both good and bad for real estate. Stocl market volatility combined with lower priced, stable and safe real estate and cheap money means price appreciation for real estate. What does stock market volatility mean for expensive real estate? Because, after all, that’s what we have to offer equity market refugees. Right now, if you got out of equities prior to the recent volatility, would you move to real estate or stay in cash and risk some short term losses to inflation?
Listings haven’t been as strong as they were in the past, but sales are also slowing. Cold this market simply chug to a lower level and see price stagnation? Intersting times indeed.
The Best Real Estate Anywhere! 
Neat article in Time that defines a bubble very simply as follows;
“Whenever the price people will pay today depends on the belief that other people will pay even more tomorrow, you’ve got a bubble. It takes only a slight letdown in those expectations to send the whole delightful, self-feeding process into reverse.”
Here is the link.
http://www.time.com/time/magazine/article/0,9171,1655723,00.html
And check out this article in theNYTIMES today: US median house prices down, which contradicts the widely held belief that there couldn’t be a nationwide slump…
http://tinyurl.com/3cbyo3
The thing that amazes me is how SOME people still cling to the belief that Vancouver is “different” or that what is happening in the US will not happen here.
What then, explains why OUR prices rose in tandem with THEIR prices?
Why do these same people fail to understand that it also works in reverse?
I also find it interesting how, in the Miami area, there is a whole breed of lawyers who now specialize in getting people out of their pre-sale condo contracts.
Funny, isn’t it, how those buyers didn’t have a problem with those same contracts when prices were RISING?
Another good quote from that Time article (http://www.time.com/time/magazine/article/0,9171,1655723,00.html)
“And even if you don’t take out a second mortgage, you can still fantasize about what the house is worth. Fantasies of real estate prices have long been a staple of middle-class conversation.”
Snick said:
“The thing that amazes me is how SOME people still cling to the belief that Vancouver is “different” or that what is happening in the US will not happen here.”
Yesterday I saw a story on CNN about a young lady who got a mortgage down in the US. She makes $33k a year before taxes and had a monthly mortgage payment of $1,335. The interest rate was set at 10% for the first year with the promise that it would probably fall to a lower rate. The rate never fell, but rather went up and now she is losing her place.
There are thousands of people in this exact same situation throughout the US.
Our real estate market will cool, but honestly how many people do you know in Canada that have mortgages like that. I would say this is a very big difference between our two markets (Canada & US).
Rob- that is about the most bearish post I have read to write.
I am glad you are confident though, I have no idea how this will play out with respect to liquidity.
“I would say this is a very big difference between our two markets (Canada & US).” – Coq_Mike
So then, in your opinion, what explains the runup in prices? Surely not fundamentals.
And, if not fundamentals, it must be psychology.
That has now changed.
but honestly how many people do you know in Canada that have mortgages like that.
let’s narrow that question to Vancouver and change “mortgages” to “mortgage helpers”…
a subtle variation on “exotic” financing
i’m looking for 2 signs:
….. vendor pays closing costs
and vendor financing cause the real deal is tougher to get
“Our real estate market will cool, but honestly how many people do you know in Canada that have mortgages like that.”
When the swamp is finally drained, I’ll bet we’ll see a lot of sludge.
Rob, as I have mentioned before, there is no way that Canada can escape the U.S. meltdown. The U.S. is our largest trading partner and more importantly, the U.S. media often OVERWHELMS Canadian media.
Canadians often find out quicker and in much more media volume, what is happening down in the U.S. versus what is happening home at Canada.
At the end of the day, all markets, be it real estate or stock markets, are decided by psychology. When you have the entire U.S. media churning out doom and gloom headlines, that doesn’t bode well for Canadian real estate investors, does it?
Remember, Canada’s real estate boom of the last several years was simply following the U.S.’ lead. Now, the U.S. is leading downwards … will Canada follow?
Gadwin
Coq_mike “Our real estate market will cool, but honestly how many people do you know in Canada that have mortgages like that. I would say this is a very big difference between our two markets (Canada & US).”
I don’t think Canada in general has a problem, only places like Vancouver, Edmonton and Calgary. I also don’t think it is subprime mrgages as much as persons buying above an average income affordability. Even our banks generally look at only two maybe three years income if they are doing their due diligence. Currently a construction worker in the before mentioned cities can easily make $60 to $80 grand a year. Problem is construction work is fickle, and on top of that if you are in housing construction as opposed to oil sands development you are in effect working yourself out of a job. Some might say well at those wages they only need a few years, and then they can pay it off. I was in construction a lot of my life and I can tell you the frugal construction workers (who would put their extra earning in principal pay down) are few and far between. I never started saving for a rainy day until I started my own business, even though I made megabucks. Hindsight! Take the construction income out of Vancouver and you will see unemployment reaching 10 %. Just how many condo’s can we build? Currently we are looking at 10,000 completions in the next few years (see restevens numbers ).
http://vannumbers.wordpress.com/
So your statement is true except I think we are in worse shape here because we have no underlying economy, that is distinct from housing speculatio other than our established ports, soon to die movie industry (Canadian dollar parity), and collapsing tourism (border controls).
Snick:
The run-up in prices was caused by demand as we all know. I am sure some of this demand was fueled by desire (psychology) and doing the numbers (fundamentals) for others. I am not sure what drives all those buyers.
When you look at the US housing market, it was just such a house of cards.
Blueskies makes a good point, but I still think control on loaning people money is a lot tighter here in Canada when compared to the US, probably will get even tighter now.
“When you look at the US housing market, it was just such a house of cards.”
And ours wasn’t? C’mon!
C_Mike
The fact that foreclosures were rare with rising prices should be obvious that the biggest reason for foreclosing is declining prices. Decling prices will certainly fuel more foreclosures, but prices in the US started declinig (during a healthy economy) only because they had surpassed all reasonable levels.
With V having achieved top, 2nd, or 3rd ranking as North America’s most unaffordable city, depending on which report you read (I think one had it as low as No.6), it must be ever more difficult to claim that we’re different.
This is probably the closest Rob has come to acnowledging a possible top and recommending caution. Anything less could invite ridicule. To suggest that any market can defy all fundamentals and continue to grow only because it has done so for the last couple of years has to be the shallowest of arguements.
The longer a healthy correction is delayed, the more severe and unhealthy it will be, and I think we’re way beyond any kind of a soft landing.
“Rob, as I have mentioned before, there is no way that Canada can escape the U.S. meltdown.” – Anonymous
Your words are falling on deaf ears, I’m sure.
if your mortgage helper tenant is a construction worker…… do you have a Plan B?
Strataman:
I agree with your comments. I think that we will have a correction here in Vancouver. I just think our reasons for a correction are not completely the same as in the US as you point out.
Some say our correction is going to be a melt down or catastrophic collapse and I just can’t see the reasons for it such a strong portrayal.
>As rep tryouts begin and summer winds down
>are what are we going to see? Are we at a top?
>Will this global liquidity crunch become a spiral
>downward? That’s the question on everyone’s
>minds.
>…
>Listings haven’t been as strong as they were in
>the past, but sales are also slowing. Cold this
>market simply chug to a lower level and see price
>stagnation? Intersting times indeed.
Rob, are you saying the slowing sales for Vancouver in August is directly attributable to the U.S. and world media coverage of the liquidity and subprime crisis in the U.S. over the last several weeks?
Gadwin
“Some say our correction is going to be a melt down or catastrophic collapse and I just can’t see the reasons for it such a strong portrayal.”
And, if someone had told you 3-4 years ago what a crappy house in East Van would fetch, could you have imagined that?
Probbly not in a million years.
Life is full of surprises!
“Rob, are you saying the slowing sales for Vancouver in August is directly attributable to the U.S. and world media coverage of the liquidity and subprime crisis in the U.S. over the last several weeks?”
He probably ain’t sayin’ nuttin’.
Coq_Mike
“Some say our correction is going to be a melt down or catastrophic collapse and I just can’t see the reasons for it such a strong portraya”
This is an opinion and guess because that’s what all of us our doing, but I think probably we are looking at between 50 and 30 % correction from prices today. If we could (and it might happen) have some bankrupt condo projects so supply was lessened it would alleviate recent buyers from a major investment down turn. The more of these condo’s we keep building the less chance there is of prices dropping a mere 30 %. Keep in mind if you bought 5 years ago you are fine. So its not a catastrophic collapse for them; the five year ago people. Now 3 years is marginal and the last year?Well I would bail now. (I bailed two years ago still happy with that although if I was a fortune teller I would have waited a year). We are all guessing as to timing, anybody who says differant is wrong even if they are right in the end. Somebody always wins the lottery eventually no matter what the odds!
By the way I know one couple who has a $50,000 line of credit based on paper equity in their home. That is a Canadian Sub-prime mortgage. They don’t have that money unless they sell and move way the hell out of Vancouver. And they were talking about increasing it! Arrrggghhh!
“Keep in mind if you bought 5 years ago you are fine.”
Yeah, like if you bought a winning lottery ticket for $2, but lost the ticket before you could collect the prize money, you’d tell your friends you lost $2 🙂
Blueskies:
Unless you count the PTT as a closing cost, they aren’t huge. I haven’t seen any hints of them being included as a vendor responsibility. The only angle I can see it to shift more of the burden to the mortgagee (the lender). We’re already doing a lot of that. In fact, mortgagees already give 110% mortgages. Can you see another advantage to the vendor eating closing costs that I’m missing?
VTBs have been in demand as long as buyers haven’t had as much as sellers want (in other words, forever), but the nuts and bolts problem that I see is that the VTBs that can be given generally have to be huge to make a difference. In other words, you’re willing to pay $500,000 if you can give me $$350,000 and I give you a VTB for $150,000, but the competition just steps up and pays the $500,000. Why would I give you the VTB? To make it worthwhile the competition has to drop his offer price quite a bit.
I’ve done a fair amount of VTBs, but they’re much easier when they’re small, interest rates are dropping, and values are rising. Right now money is still cheap (I know bloggers say its tough to get a mortgage now, but I haven’t seen that yet).
Gadwin, Snick:
There are a couple assumptions I can’t quite swallow whole. First, the idea that Canada’s real estate prices moved in tandem with, or followed the US. As far as I can recall, Vancouver took off long before the rest of Canada, and the East has more or less lagged while the West has taken off. In other words, we don’t have a homogenous Canadian market. Second, I kind of recall some investor clients of mine talking about North San Diego county long before we took off here. That might show that we follow some US markets, but not that we move in tandem. Last, the term “meltdown”, whether in regard to RE or equities, might be a little severe.
Strataman:
“…if you are in housing construction as opposed to oil sands development you are in effect working yourself out of a job”. You’ve obviously never heard the argument that leaky condos = built in obsolescence…:-)
Crasher:
“This is probably the closest Rob has come to acnowledging a possible top and recommending caution.” That’s just plain inaccurate. You’re reading Snick more than you’re reading me. Take a look at some posts from last fall. I’m in the same position as always: I don’t know what’s coming, other than change, and you have to prepare for the worst.
In point of fact, fundamentals have improved since last fall, in that we’re getting better rents.
Gadwin:
“…are you saying the slowing sales for Vancouver in August is directly attributable to the U.S. and world media coverage…?”
No. People obviously get their information from some sort of media, by and large, but remember, a lot of people I know also get their information from work. Its not “inside” info, but people who lend money, or sell debt, or sell lumber, or collect on bad bank loans tend to see the world through those lenses. Personally, I watch stocks every day. I know what the Dow and TSX have done during this volatility, and I know, for example, what GE has done. Does that mean that “media” coverage influences me? Maybe. Except that on any given day you can find both pessimists and optimists in the business section. In fact, there are people arguing that US sunbelt destinations are a good buy for near future Canadian retirees. Do the math – there is some validity to the argument.
Both listings and sales are slowing in August. However, I expect to be involved in at least two multiple offer over list situations before Tuesday, so don’t turn the lights out on this very strong market just yet. I’m also holding onto my own properties.
Snick:
“…if someone had told you 3-4 years ago what a crappy house in East Van would fetch, could you have imagined that…”
We certainly imagined the kinds of gains we’ve seen, and recommended a lot of buying at the time (and we did a lot of buying at the time, frankly). Imagining is different from predicting or gauranteeing, of course, so we made use of discipline. It goes without saying that there are a lot of more risk tolerant people than us who made a hell of a lot more money. They more than imagined the gains that you’re talking about. They actually bet on making them, and they were right. Those facts are self-evident. Not even you can deny them.
Don’t confuse what you think you know with what you actually know. Give a little credit where credit is due.
As strataman points out, we’re all guessing about the future. CREA has had to revise their predictions of price growth upwards yet again. How different, really, is CREA from the bears who have been calling for a meltdown for months (no, wait, years)? Not very different, really. The blog bears and CREA were both guessing, and both have been consistently wrong (although CREA at least got the direction right). We’ll all be right someday, clearly, and that day may be soon, but let’s not fool anyone. We’re all still guessing.
anyway prices won’t drop ’cause we’re all panic-locked…….
anonymous “Yeah, like if you bought a winning lottery ticket for $2, but lost the ticket before you could collect the prize money, you’d tell your friends you lost $2”
Good!!! I gotta use that! 🙂
now we’ve subprime issues in canada..still we are different from US…so sick
http://www.reportonbusiness.com/servlet/story/RTGAM.20070824.wrcredit25/BNStory/robNews/home
Some of Canada’s biggest subprime mortgage lenders are pulling out of areas of the business, at least temporarily, indicating that problems in the commercial paper market have spilled over to affect some Canadian consumers.
China/Hong Kong banks will take big losses on subprime. Investors that will take these losses probably own so called “investment” properties in Vancouver. Do you really think they will want to hang on to these properties if their net worth is falling in Asia?
Fear of housing prices falling, credit crunch, recession, etc. Home buying psychology could be shifting into hoard cash – bad things are starting to happen.
Affordability walls have kicked in – prices have gone up too fast and interest rates have done the rest.
Preapproved buyers dried up.
If I worked for any Canadian company that invested millions in illiquid commercial paper that was exposed to subprime and the company may lose millions; I may start to wonder about my future job security/pension plan, etc. and put off large purchases until the problem is sorted out.
“China/Hong Kong banks will take big losses on subprime. Investors that will take these losses probably own so called “investment” properties in Vancouver. Do you really think they will want to hang on to these properties if their net worth is falling in Asia?”
But isn’t it supposedly “RICH” foreignors that are buying up their investment properties (with cash) in Vancouver to diversify their holdings?
For these rich folks, a drop in their banking investments is only a paper loss. Why would they sell when the market is down? Would they not buy more when the market is down?
Has anyone noticed whats up in Mission BC. Starting 2008, city to double in size. Silverdale area, phase 1
600 of 1400+ ac to build 2000 homes. Land in the development Rezoning area selling for around $150,000 per ac. with house and more.
Has anyone noticed whats up in Mission BC. Starting 2008, city to double in size. Silverdale area, phase 1,
600 of 1400+ ac to build 2000 homes. Land in the development Rezoning area selling for around $150,000 per ac. with house and more.
“For these rich folks, a drop in their banking investments is only a paper loss. Why would they sell when the market is down? Would they not buy more when the market is down?”
I would cite the Japanese ongoing recession. Before it happened they were very evident in Vancouver. Rarely see them now, at home holding down the fort!
Strataman wrote: I would cite the Japanese ongoing recession. Before it happened they were very evident in Vancouver. Rarely see them now, at home holding down the fort!
—————————-
These rich foreignors aren’t rich enough to weather a downturn?
Doesn’t everyone want to be in Vancouver?
“Doesn’t everyone want to be in Vancouver?”
Don’t make me laugh. Many people have not even heard of Vancouver. And I’m not just talking about dumb Americans.
“Many people have not even heard of Vancouver”
That may be so, but you only have to have “some” people to hear about Vancouver.
If it’s not the foreignors, then who’s buying up all the property in Vancouver, especially those in the $1 Million and over category?
Hey, I’ve “heard” of lots of places.
For example, I “heard” that Turin had the Winter Olympics not that long ago…
Didn’t make me hop on a plane.
Snick,
If it’s not the foreignors, then who’s buying up all the property in Vancouver, especially those in the $1 Million and over category?
Coco:
“If I worked for any Canadian company that invested millions in illiquid commercial paper that was exposed to subprime and the company may lose millions; I may start to wonder about my future job security/pension plan, etc. and put off large purchases until the problem is sorted out”.
I can’t believe that, coco. You have always struck me as more of the “glass is half full” type. When did you become so negative? 🙂
Anybody hear about Vancouver’s City Hall’s strikers leaving the picket line for other jobs?
Vancouver City Hall is losing valuable labour!!! 🙂
It will be inflation then!
I always thought it would be either high inflation or asset price collapse to cause a realignment. See this Bloomberg article:
http://tinyurl.com/2e76j6
“I can’t believe that, coco. You have always struck me as more of the “glass is half full” type. When did you become so negative?” – Rob
Coco probably became a tad “jaded” after reading all the BS on this site.
Snick,
If it’s not the foreignors, then who’s buying up all the property in Vancouver, especially those in the $1 Million and over category?
Losers…in the end, that’s who.
My high School reunion is coming up so I’ve been talking to a few of my old buddies that I haven’t seen in years.
Many are in the trades and have done extremely well in the last few years. Better than my university educated friends. My trades friends were also more likely to strike it lucky in the housing sweepstakes, having bought 3-5 years ago.
So they are the lucky ones…you’d think. Truth is once I get talking to them and scratch beneath the surface, they aren’t happy. Long hours, high debt (probably refinanced), punishing commutes (from way out in the Valley), little time with family, very stressful lives.
One of my old buddies is cashing out and moving to his hometown in the interior and, when said that at a recent gathering, everyone agreed its the smart thing to do now. Next, I heard some interesting comments indicating concern about continuing appreciation. Nobody was saying the bottom was about to fall out. No. But there was a general consensus that this is a good time to cash out…especially if you can move to a place where you have the kind of normal family life we enjoyed growing up in Vancouver decades ago. Another home-owning friend then announced he is seeking a transfer to Winnipeg.
I miss the Vancouver of the 70s and 80s. It used to be a fun, laid-back place to grow up in.
“What does stock market volatility mean for expensive real estate?”
Hi Rob,
I think another question is: Are we truly looking at independent financial “systems” (i.e. liquidity markets, stock markets and real estate markets) or is just one big blob?
Another question in regards to the current situation might be: “How is US real estate effecting international money market liquidity and how will this effect vancouver real estate?”
I think that at one time real estate was largely independent of international (or even national) events and actions. But this has changed and I think the lesson of the last few weeks is that all three “systems” are inter-twined and dependent on each other to a level that was never publicly acknowledged before. (For instance, who would have expected that junior mining companies in BC would be effected by sub-prime housing in the United States?)
This ultimately may be the beginning of the un-raveling of the events that started with the dot com fiasco in 2000. After all, Greenspan “fixed” that problem by making money cheap and available, where it ran to a safe haven – real estate… seven years later we see real estate valuation graphs that look eerie similar to the nasdaq graphs of the late nineties.
http://www.affordablevancouverhomes.com/4a_custpage_416.html
http://en.wikipedia.org/wiki/Image:Nasdaq_historical_graph.svg
What does it mean for expensive real estate in Vancouver?… who’s to say for sure… but, as referenced in the comments in this thread – Vancouver has lots of real estate investors and it is likely a few of the newer, or less established, or more speculative will be effected.
Most everyone admits that risk is being re-evaluated world-wide right now. A likely outcome from this will be that money will be harder to come by and more expensive to borrow. This will have far reaching effects on the Vancouver real estate market as well as the broader BC and Canadian economy in my opinion.
(Remember the references to the “new economy” that we used to hear in the late ’90s? That was replaced by “real estate never goes down” mantra of the mid 2000’s as everybody piled on to the double-digit annual gains that were “guaranteed” in real estate. I cannot say how this current episode will turn out but I sense a bit of a similarity between my real estate owning friends in Vancouver in 2007 and my Nortel owning friends in 1998… which is probably not good).
p.s. I’m a long time reader but this is my first post – I really enjoy your blog and thanks for posting the numbers.
Anyone know the possible reasons for a court-ordered sale? Divorce? estate dispute? bankruptcy? foreclosure?
hey snick is your real name chicken little? The sky is falling. The sky is falling.
Although some people miss the Vancouver of the 70’s and 80’s, many others like the fact that Vancouver is finally turning into a real city.
Rob,
I did use the words “if” and “may” and “wonder” in my statement, which are really neither negative or positive words. Consider it hypothetical.
The idiots over at Forbes think our real estate is overpriced:
http://tinyurl.com/2qwfsf
They should have read Rob’s blog, would have set them straight on how the fundamentals do work in Vancouver!
Great work with this forum Rob.
As someone who is more concerned with stocks than real-estate, the following comment of your raises red flags:
“That can be both good and bad for real estate. Stocl market volatility combined with lower priced, stable and safe real estate and cheap money means price appreciation for real estate.”
I agree with this in an abstract sense: eg, the Y2K tech bubble and associated stock market loss drove some people into real estate. That market volatility was associate with tech—-And tech HURT afterwards. For years after recent comp sci grads with below average grades were very much underemployed.
Now the current losses stem from the US subprime market. Because the source of market losses is housing (rather than, say tech) then we have a totally different situation. Real estate can only be expected to increase with market volatility if housing has nothing to do with the market volatility. This is plainly not the case now, although it was with the tech bubble.
So prices might go up, but it won’t be inflows from scared market participants. Those participants see residential real estate as the source of their paper losses. And so will not be in much of a mood to compound their losses further by buying housing directly.
abc:
I don’t think we’re disagreeing much. At the time of the dot.bomb we saw cheap, stable real estate and cheap money. Stock market volatility was good for RE in that scenario.
We don’t see the same thing now. Right now we have cheap money and expensive real estate. Also, the jury is out about whether real estate is stable and safe. That, of course, is where we disagree: I say the jury is out, you say the jury is going to give (or is giving) real estate a thumbs down. We’ll see.
You can argue that the problem right now arises from housing, and you’d be right, although it really comes from bad loans on US housing (in other words, bad debt rather than bad housing, although that is a bit of hair splitting).
The problem that results is global, and is a clearly a debt problem. People have to be asking “What kind of crappy debt did you sell me, and how did you manage to convince me it was good debt, and how did you sell me so much of it?” In other words, you could argue that the problem is debt, not housing, and certainly not non-US housing.
How will we decide who’s right? Clearly, te market will tell us. If we see continued volatility in the equities market, without the emergence of a clear bear market, and we don’t see housing price collapses here, then real estate will still be attractive to people fleeing volatility, despite your idea that the volatility came from housing.
On the other hand, if equity market volatility turns into a bear market, and that translates into housing price losses, your thesis is proven. We’ll need time to see. Your read certainly has merit, that’s for sure, and could come to pass.
That said, if equities go bearish, and housing goes bearish, what will investors do? How long will they stay in cash? Are there other options for them?
“That said, if equities go bearish, and housing goes bearish, what will investors do? How long will they stay in cash? Are there other options for them?”
Yes Rob. Preservation of capital. I am sure you remember that concept.
Investors who have got used to relentless appreciation stocks and RE, may be in for a nasty few years.
“At the time of the dot.bomb we saw cheap, stable real estate…” – Rob
Yes, as opposed to the overpriced stuff we see today.
Rob said “That said, if equities go bearish, and housing goes bearish, what will investors do? How long will they stay in cash? Are there other options for them?”
There is a clear distinction between credit and cash. If investors have so much cash, there wouldn’t be credit crunch problems. Same thing with people buying houses these days. Do they really have so much cash that they all just pay off their houses with cash or do most them take out a mortgage with high ration? I see more of the latter.
If high leverage is common place, then the next thing in question is how long can job situation stay good? Because as soon as job market starts to slow down (I am not even mentioning deterioration), the condition of high leverage is pressured. And I think we are at the point where experienced investors who actually have cash are on a “wait and see” mode. One of such person is, of course, Warren Buffet.
correction, “high ration -> high ratio”.
Three news stories today that indicate trouble in Western Canadian real estate markets
1. The Province… money section, heading “Credit Binge Increases Risk” from Edmonton perspective
2. Calgary Global TV news , third story 5 Pm news cast, Calgary housing average selling prices drop in July from 439k to 435k and August to 430 k and listings double in August 07 vs 06
3. Not really news but interesting comments by a “realtor” on SaskatoonOnline .com that Aug 20-24 was slowest period seen in some time, “fell flat”, don’t ever remeber it so slow.
Just last week I read in one of the nationals a feature on “everyone wanting to live in Saskatoon.
Next ……..
Canadians looking south of the border for affordable housing.
http://tinyurl.com/2hedbt
Annon:
“Do they really have so much cash that they all just pay off their houses with cash or do most them take out a mortgage with high ration? I see more of the latter”.
I can’t dispute what you see, but I just wrote two offers that did not require mortgages. In other words, the buyers have the cash to purchase. I won’t say everyone, or even most people, are in this position, but there is a lot of money still around, and probably more than some people suspect.
Snick:
You’re repeating yourself (we’ve seen the top, that place would have listed for way more a few weeks ago – you were saying that last Fall) and you’re repeating me (real estate today is no longer cheap). If you can’t do better than that stop using up cheap bandwidth, ‘kay?
Hypster:
The Saskatoon comments are very interesting, I agree. Stoon is a great place, but still…I think the time to buy there was 18 months ago, and (unless you’re a long term holder and have good management there) the time to sell is now.
coco:
Thanks for the link. This is the second time I’ve seen MSM articles about buying oppurtunities in the US.
Conversation in our office lately consists of:
What do you think of the real estate market?
Should I sell my investment/extra properties?
Real estate doesn’t seem to going up as it has in previous years, is it time to sell?
I can buy two properties across the border for what one would cost me here, do you think I should buy in the U.S.?
Should I buy a U.S. foreclosure? So and so just picked one up for a song in California.
Quite a different tune from a few months ago when everyone was talking about how much their real estate appreciated and how much more it was going to go up this year. I wonder what happened? Is your water cooler conversation, whistling a new tune too, or is it just the office I work in so far?
Rob: “…I just wrote two offers that did not require mortgages..”
Hi Rob, would you be so kind to enlighten us all with a bit more details. I know out of country buyers can not take out a mortgage against a house in Canada unless they meet a much higher down payment requirement. Many of them just borrow money from their own countries against their assets there. Are the two potential buyers who didn’t need a mortgage Canadian residents? And if so, wow, I am very impressed and puzzled at the same time. That would be a lot of faith in Canadian RE. A faith that I lack completely. And puzzled because of the use of cash of such amount in RE and not in other forms of investment.
“You’re repeating yourself (we’ve seen the top, that place would have listed for way more a few weeks ago – you were saying that last Fall) and you’re repeating me (real estate today is no longer cheap). If you can’t do better than that stop using up cheap bandwidth, ‘kay?” – Rob
Quit making “non-realtors” out to be idiots; you’re the biggest phoney of all.
“And puzzled because of the use of cash of such amount in RE and not in other forms of investment.” I think I have said this before, if you are from or reside in certain countries, a home here may be considered a safe haven. I know a number of cash only buyers (notice I didn’t say investors). I know these people personally from a variety of countries. They didn’t buy to make money; but rather to have a place to fall back on. A lot of them won’t even bother to rent, but will furnish the place complete with clothing. That said those places are generally high end, and I have yet to meet someone like that who bought a 1 bedroom condo. I don’t think we will see other than a flatening of prices on the high end ($800,000+), but willl see a remarkable decline in prices on units proportional to their relative cost in this market. One bedrooms are likely to loose most if not all of their (todays) equity.
Priced Out,
Circumstances vary on “court ordered” sales. Usually it involves a family disput over money put into a house and not paid back, split of divorce assets, etc.
A court ordered sale is a suggestion from the court that the property be sold to solve the dispute. I know someone who was going to put an offer on a court ordered sale house and the owner withdrew the house from the market completely. They found a way to pay back a sibling who originally put money into the house.
coco:
You describe a portion of court ordered sales, but you’re a little off. A court ordered sale is not a suggestion that the house be sold to resolve a dispute (any court order is a little stronger than a suggestion 😉 )
“court ordered” has 2 meanings. It accurately describes what has happened once the Master (a level lower than a judge, but still very enforceable) orders that the proerpty be sold as he directs.
Court ordered is also used to loosely describe properties where an interested party has acquired a conduct of sale. This allows the interested party (usually a lender, but certainly it can be a spouse or business partner) to list the property with a Realtor. The Realtor then generates offers, secures the lender’s (spouse, business partner’s) agreement, and triggers a court date. The Court, however, decides which offer will be accepted, and makes an order to the effect.
It is possible for the various parties to make an agreement resolving their differences prior to the court date, and the Court will generally accept that.
The majority of court ordered sales, are, in my experience, foreclosures.
Annon:
The two buyers are from here.
Snick:
I’m not making anyone out to be an idiot. You’re doing a good job of that on yourself, however.
I think snick should chill out on his comments towards Rob. This is the only site where one can have a rational conversation about real estate anymore. Thanks Rob
Snick: “Coco probably became a tad “jaded” after reading all the BS on this site.”
I guess he’s one of the few people who bothers to read most of your comments. 🙂
My friends offer on the court ordered sale listing was a little different. Father passed away, sibling put money into the house, sibling wanted money back from the Mom, went to court. Court ordered sale was to list the house to resolve the debt before their actual court date which was four months later.
My friend questioned whether the court was going to deal with the offer they were going to put in. The owners realtor confirmed any offers would be dealt with the owner directly if they were before the actual court date.