There were 245 listings yesterday, and 175 new sales, for a sell/list of 71.43%. Inventory was 11,367, and over 90s were 2,403 (21.14%).
Of the sales 21, or 8.57%, went over list. 8 were on the Westside, 1 was in East Van, 4 in Richmond, 3 in North Van, 1 in Maple Ridge, 2 in Coquitlam and 2 in Burnaby. Average list price was $584,823; average sales price was $8,825 (-1.69%) less, at $575,998. Average DOM was 35. The highest overlist was 24% ($362,000/10 DOM) while the biggest underlist was 15% ($20,900/17 DOM) or 5%($150,000/97 DOM). Longest DOM was 200 DOM, which sold for -2.61% off list. The average DOM for all sales with 100DOM or more was 138, and they sold, on average, for 2.96% off list.
There were 199 price changes. 18 (9.04%) were increases. Average original list price was $646,062; average new list price was $625,057 (-2.97%). Average DOM to price change was 50.
The Best Real Estate Anywhere! 
Thx Rob
I think we see 12,000 before month end.
Inventory is the same as last year at this time. 12,000 by November 1st may be a bit of a stretch unless sellers start to panic.
And why would they panic when buyers are still marching towards them like lemmings? And now that Cameron Muir has pointed out that you can put the 5% down payment on a credit card, we might see a bump in sales. I mean, who *doesn’t* want to pay 18% on their down payment?
/dev/null
You forget to factor in the Air mile points if you put the down payment on a Visa. Yeah!
I am waiting for the market to show some signs of a bearishness for quite sometime and check this blog frequently. But it never does! And I am getting bored. To h*ll with the RE market Vancouver. On the other hand, I should start a blog discussing how cheap it is to rent. Yeah!
Wake me up, when the prices go back to 2005 level as I am not that greedy. Good-bye
Rob.
Any reason for posting the numbers so early? Don’t the listings and sales keep getting tallied until 5pm?
To be fair to Muir his complete quote in the Sun was:
“There is still very strong consumer demand due to the economy. Rising wages mean that buyers are confident and this is underpinning the market,” said Cameron Muir, chief economist at the B.C. Real Estate Association. “There is also a strong mix of housing stock. This variety is helping buyers at the lower end get into the market.”
“Six out of 10 sales are multiple-family dwellings [such as attached houses and apartments]. There are also more financing options. Down payments are down to five percent, which can be put on a credit card,” said Muir.”
To me it looks like he was explaining why the market is still strong, (despite the widespread expectations of many that we’d be seeing a correction by now). His points are valid. (If anything, he’s neglected to say that buyers can buy with 0% down).
Pointing out that, price aside, its easier for people to buy real estate today isn’t the same as recommending that they put a huge downpayment on a 21% Visa card, get a huge 1st and a sizable 2nd so that they can live beyond their means. High prices have, without a doubt, led to the loosening of lending practices (for better or worse).
sorry, please delete my above comment… I forgot what day it is. 🙂
The bears continue to say the sky is falling but all I see is record sales and low inventory.
For prices to fall I think we need to see some sort of horrible event. People need to loose their jobs or something. A two month city strike didn’t seem to do the trick.
Another problem I see with the bear theory is that the majority of van re owners have large amounts of equity they are not willing to walk away from unlike the states.
Even if you bouyght in jan 07 you could see up to 50k appreciation on a 400k place. I’ve got to be in bad shape to walk away from that.
Rob
What do you think of the Pitt Meadows maple ridge area with the addition of the new bridges. Bear arguments aside.
To be fair to me, I didn’t say that Cameron recommended people do that, just that he pointed it out. Perhaps anyone who would consider doing this has already thought about it, but perhaps not.
new investor rob – why the requirement for a horrible event in Vancouver but not in the US?
And with respect to your equity example, how about someone who bought 30 years ago for 25K? Wouldn’t it still make sense for them to sell even if they missed a “peak” in price? And then how would that effect the next-door guy who bought in Jan?
(Both honest questions because I don’t know – not trying to be argumentative.)
Dev/null
The event can happen any where but the job loss must be local. That said I can think of some events that could cause job loss but we haven’t seen the effects yet. The dollar being the chief one in my eyes.
The person who bought 30 years ago is not like feal the pressure to sell like someone witha massive mortgage.
They can take there time. Thanks for being nice, this site great when we have real discussions
Rob thanks for the numbers and here is a funny skit about debt. Enjoy
http://consumerist.com/consumer/clips/snl-skit-dont-buy-stuff-you-cant-afford-252491.php
New Investor Rob,
There is a few areas where BC can hurt economically due to the higher Canadian dollar.
Lumber/Forestry (some layoffs already)
Tourism (big drop in U.S. visitors 2006 – 2007)
Film Industry (some cutbacks on productions)
Higher home prices eventually have an effect on personal spending, when we reach the breaking point, who knows. Hopefully, we don’t become as expensive as San Francisco.
Hopefully, we don’t become as expensive as San Francisco. In the burbs that is.
In fact nothing ‘BAD’ has to happen.
US prices peaked while the conomy was hot and employment was full and just as the Fed was raising rates, but well before they had reached their peak, from which they just dropped them in panic.
Prices can drop because they are too high, because people see it happening elsewhere or simple because the psychology changes.
“In fact nothing ‘BAD’ has to happen.”
So true, fish. But the meme continues to be that prices only go up while in actual fact, they’re going down as we speak.
I guess if some people prefer to believe the junk they read on this site, they do so at their own peril.
“Average original list price was $646,062; average new list price was $625,057 (-2.97%).” – Rob Chipman
And, why would that be? Rob?
new investor rob
October 3rd, 2007 at 5:03 pm
“The bears continue to say the sky is falling but all I see is record sales and low inventory.”
fish…see what I mean? Chump.
“Even if you bought in jan 07 you could see up to 50k appreciation on a 400k place. I’ve got to be in bad shape to walk away from that.”
The problem is you may have to wait longer than you’d like to sell for a profit. Not to say Vancouver will be as bad as some of the US cities now, but some stuff there has been sitting at 40% down from previous sale price for over 6 months now and still nobody wants it.
In a real estate “bear” market, liquefying a property can be a difficult and lengthy process. As long as you can wait or are willing to price to sell, no problem. Otherwise…
Comment by Ben Jones
2007-10-03 13:07:17
If you follow the Canadian reports, most really do think they are immune to price corrections. They have a lot of reasons, but the fact is prices are just too high for the incomes.
this from HBB, the big guy hisself!
He called this debacle more than two years ago.
Listen UP!!!!!
http://tinyurl.com/24fecz
for a good laugh!
“Average original list price was $646,062; average new list price was $625,057 (-2.97%).” – Rob Chipman
One other thing…a while ago, you said that “asking prices” were irrelevant and that only TRANSACTION prices mattered. If so, WHY even mention asking prices?
(Don’t stay up TOO late thinking of a “credible” reply now, y’hear?)
ZZZZZZZZZzzzzzzzzzzzz…
Oh, and while we’re at it, why don’t you include that “weighty tome” you produced several months ago about “the case for fundamentals”? That should be good for a follow-up…
Double ZZZZZZzzzzzzzzz…
that “weighty tome”
no! we don’t need anymore pseudo intellectual claptrap! this is a bear blog where the cut and thrust repartee reveals the philosophical underpinnings of our resident bears.
Muir and his comments are a joke. I’d like to see him put some money where his mouth is and talk some survivability statisticks of 5% down owners in the next 5-10 years especially with the U.S. RE fallout down south and the effect on the Canadian economy from the strong Canadian dollar.
This guy is so vague and detached from the average family income of $57,ooo. My economics buddy has a masters degree and is warning of a correction as well.
Mr. Muir is byast and detatched from society oh and don’t forget he’s probably a home owner and it’s hard to say something negative about your investment.
The article was nothing new from Muir. Talk about a straw man argument.
Shame on Lee for the report as well.
Kudos to a report that can show a stong data like today but also show some reference to possible future change.
Interesting how yesterday bears were celebrating and stating the end was upon us. Now not so much (except for the terminably boring Snick). Funny the difference a day makes
The most important number of the day…..
181 price decreases compared to 175 sales. Keep an eye on these numbers.
new invesror rob,
I think the city stike actually makes home prices increase in the short term. No inpectors/permits/sewers etc. for new construction, is actually sltalling the amount of new product entering the market. My 2 cents.
Snick: “But the meme continues to be that prices only go up while in actual fact, they’re going down as we speak.”
And the actual evidence is … where? MSM reporting again today that YOY price is up 12%, with the result that bears (myself formerly among them) have egg all over their faces yet again. My bet is that we will see the very same story next year.
Maybe if people here aren’t aware, don’t care, and/or aren’t directly affected by what’s going on in RE elsewhere (which, based on comments on this blog, is in some cases debatable), Vancouver really can be “different.”
I continue to have my doubts that there will be a correction here at all. I’m actually embarrassed now by the things I’ve been saying for years to friends and family about it.
Rob
You know that Cameron Muir was not being responsible at all with that credit card statement.
Sure he didn’t say…’do it’…he just said…’it could be done’…which to many unsophisticated investors/buyers is a subtle difference.
Also 5% down is a not reasonable amount either for the lender to be on the hook for 95% or for the borrower to have such little skin in the game.
Look at what is happnening in the US…all from crazy antics like that.
This just leaves us open to a US style crisis in the future…but obviously some could care less, and the Provincial consumer dept is one of them.
zed
October 3rd, 2007 at 9:17 pm
“I think the city stike actually makes home prices increase in the short term. No inpectors/permits/sewers etc. for new construction, is actually sltalling the amount of new product entering the market. My 2 cents.”
My concern would be more shoddy work!
Rob,
Muir is clearly shilling for real estate in that article. He mentions both that the consumer demand is still strong (stick) and that there is a strong mix of housing (carrot). To alleviate financial concerns, he points out, behind a very thin veil, that you can buy with zero percent down. The tone is clearly that one SHOULD buy now. No mention of the historic price run up, cyclical nature of the market, crappy affordability, etc.
If you can’t see Muir’s angle, you have been drinking too much of your industry’s bathwater.
O and Rob,
Re the DOM argument of a few days back.
Access to the information is restricted by the Board if they mandate it can only be released to the public if (a) that person works through a realtor and (b) the realtor has a business case to release the information. How exactly is that not restricting access? And do you not see that this gives realtors something more to sell their services? What exactly am I missing?
“Now not so much (except for the terminably boring Snick).” – vanreal
YOU”RE the one who needs palliative care.
In fact nothing ‘BAD’ has to happen.
US prices peaked while the conomy was hot and employment was full and just as the Fed was raising rates, but well before they had reached their peak, from which they just dropped them in panic.
Prices can drop because they are too high, because people see it happening elsewhere or simple because the psychology changes.
—————————————————————–
Didnt they completely saturate the market in the US though? Here, the supply listings are published every single day, and there’s absolutely nothing indicating an oversupply situation the bears are praying for.
And why is Mir being attacked by the blogs so violently? The guy has a track record now of being right. Meanwhile the bears have been nothing but DEAD WRONG
Rob, er Anonymous,
The bears have NOT been dead wrong. If you think this boom is different from any other, you’re right. The intensity and duration of it has been remarkable.
However, the bigger they are, the harder they fall.
Well, I suppose you are always right when you predict the future since it hasn’t happened yet.
Nice line of defence. Nice comeback.
“It will happen, I just know it”.
Fact is, you are so unreliable its ridiculous. You are so unreliable because you’ve been proven to be DEAD WRONG.
Doubter, i know a retired couple who for years were buying oil and gas income trusts—the ones with the highest yields. I told them for 3-4 years that they should get out, that the asset class was risky, and that it was foolish to put essentially all their net worth in a single high-flying asset (class). Guess what, they were right for 4 years (over which time I looked like a fool), and then they were wrong big time. Not all is lost— they got in so early that they didn’t lose money, but they made a miserable return on their capital and they would have been better off never having touched the asset class. Putting a small part of one’s net worth into a house/condo might be a fun and therefore worthwhile consumption of one’s capital. But all of one’s worth in this market? Or worse, leverage oneself into this market? It defies the principles of risk management.
I work in a manufacturing sector. I have an engineering degree and receive an average engineering salary, if there is such a thing. The revenues this year are going to be abysmal, as over 80% of our business is exports to the US. I got 5% raise last year, but my performance bonus this spring was reduced enough to off-set the pay increase… Cameron Muir is full of s**t.
On another note, there is a third new townhouse development just breaking ground across the street from where ai live (in South Burnaby) and a three bedroom units are advertised to start at $468,000 plus GST… I have no idea what the real price is going to be once actual pre-sales start.
Correct me if I’m wrong, but I think this is crazy…
Open letter to Santa.
Dear Santa. For you only some gratuitous advice as there are Less Than 90 DAYS To Christmas. In the last 5 days there have been over 1009 new listings in our area. At that rate by year’s end it will be in the many thousands, assuming a 90-day Listing Agreement. And that means come Christmas they will still be for sale, for sure Santa, in this slow stagnant market. So if you are thinking of buying in this area…(wink, wink), (don’t believe all that hot market numbers stuff Santa, it’s all bogus) Now, when you wiggle down the chimney with your sack full of presents, don’t worry that you hit the wrong house. The hopeful vendor will still be there.
“TORONTO — The Canadian dollar could touch $1.10 (U.S.) within three years if economic conditions hold steady, the Conference Board of Canada predicts.
An economist at the private-sector forecasting group says the loonie is most likely headed to the $1.05 to $1.10 range in either 2010 or 2011.”
If that is to be believed, Van and BC will see hits to tourism, forestry and the film industries. Actually, the dollar doesn’t have to go that high at all to impact those industries.
Real estate is local but we have a global credit bubble and this is just beginning to unwind. Everything rests on the party continuing but that
will be difficult to do in the face of tight credit.
Our affordability is so low it it barely measureable and the last gasp participants are getting in only by the narrowest of margins…(5% down on a credit card?!?)
when the pschology changes as it has in the US and soon in Britsin, Spain, Ireland, Australia and New Zealand, it will change here too in Lalaland.
Because we went up so high the downfall will be painful and protracted, at some point some bears
may even feel sympathy for any surviving bulls.
We will prevail!!
Rob,
There is no possible excuse, context or clarification that can mask the idiocy of Cam Muir’s comment “down payments are down to five percent, which can be put on a credit card”.
This guy is the Chief Economist of the BCREA – it’s embarrassing. Anyone defending such comments only damages their own credibility. Sometimes its better to just back away. Like the republican senators did in the recent Larry Craig incident.
it’s all good!
http://tinyurl.com/275676
The problems in the U.S. housing market should continue until at least the autumn of 2008, the Conference Board suggested.
my apologies for spelling errors in previous posting
damn good Americano this AM!
Ymir, are your US revenues down simply because everything is priced in depreciated US dollars? Or does your company have trouble competing for business against american companies because of the cheaper US dollar? Or is the US economy slowing down in your company’s business niche? Or something else? Thanks.
New investor rob:
We’ve bought for clients in PM/MR for years; the announcement of the bridge made it much more attractive to invest in the 200th street/Hammond area in particular, and we’ve done so.
dev/null:
I’m not quite sure, but doesn’t the re-setting of variouos exotic mortgages in the US (in addition to their mere existence) and the big jump in %i qualify as a major negative event there?
The equity walk away thing applies to people who face a choice between paying a demanding mortgage or being foreclosed on, as far as I can see. Someone with a big equity cushion can sell well after the peak, as you point out. This could translate into lots of investment condo sales, if, for example, we have increasing holding costs and falling values (if the future looks bleak, and its negative cash flow with no net tax benefit, but you can still sell at a profit, why not do it). That doesn’t mean that someone with a big equity cushion will sell just because prices are falling. There probably has to be something else to go with the price fall.
Fish/UTR:
Muir stated a fact. If speaking the truth is irresponsible because an “unsophisticated investor” might make a boo boo…um, are these unsophisticated people the some ones we allow to vote, pay taxes, drive, etc? C’mon. You really have to look between the lines for the hidden agenda in order to hammer the guy. Its similar to calling CREA forecasters shills because…they consistently under-estimate the strength of this market.
5% down is insured. The borrower pays for that insurance. The lender doesn’t lose. The insurer takes a calculated risk, an increasing amount of which is handled by the private market (and they want more). That more than answers the skin in the game argument.
CC: Consumer demand for housing and ownership is still strong, though, isn’t it? And doesn’t he really say that one reason that demand is still strong is because the lending industry has worked so hard to increase affordability? Do we all know who he works for? Yes. Do they have an iron in the fire? Yes. Who doesn’t? However, it seems to me that we’re pretty quick to hammer the truth we don’t like.
I’m really still having a problem with the all too common approach to debate that says “If you don’t see things my way its because you’re stupid” . The variation in this case is “I can see what Muir’s saying, and he’s clearly an irresponsible shill, but its really dangerous because other people who aren’t as smart as me and don’t recognize what will soon happen will be sucked in by his evil spin”. That’s not far off “Buyers buy today because they’re stupid”.
RE: DOM – you can’t get it on Realtorlink, apparently, but you can get it on VOWs, and on other platforms or through other venues, without any obligation to do business with the Realtor. You can argue that access is therefore restricted, but its kind of like saying you can’t buy a fridge at the park – you have to go to a store, and so access is restricted.
I thought (thought, didn’t state as fact) that the reason DOM dodn’t turn up on Realtorlink was due to the Board’s attempt to abide by privacy legislation. Chooch argued a) info isn’t private, b) its an advantage to Realtors to keep it under wraps, and therefore c) restricting access is a business case decision.
I argue that a) the public can get the info b) its in the interest all buyer’s agents to get the info out c) Realtors don’t keep it under wraps, as the Board has found a way for them to share it other than on Realtorlink and d) in many cases the Realtor is obligated, by law, to provide the info.
I guess what I see you missing is that you can get the info with no obligation to use a Realtor, and that Chooch’s definition of personal privacy protected info varies from the Board’s (and the Board has stated, publicly, that it restricts publication (without a valid business case) of that information (sales prices before completion) in writing, publicly, citing consultation with the Privacy Commissioner. If anyone really think the Board is lying about the consultation, call Derrick Penenr at the Sun. He can write the expose 🙂
Ymir:
Muir is full of shit because I am not getting as much money as I think is required to buy here…meanwhile in other news, developers aren’t slowing down and sales are increasing.
Do you see a little “Let’s shoot the messenger!” going on? 🙂
As a comparison, Washington NWMLS showed 720 new listings and 697 price reductions on existing listings compared to 275 sales closed. Maybe not exactly apples-apples but you can see what a difference there is in new listings to sales compared to Vancouver BC area.
Seattle is in trouble for sure; Vancouver will have to wait a while I think.
Rob, I think others have argued quite successfully that the subprime mess didn’t cause the housing market to drop. Once prices did stop appreciating and start to drop, however, people holding toxic mortgages couldn’t sell or refinance their way out of them. The problem was that the entire house of cards (so to speak) was relying on a perfect storm of good conditions.
So, I disagree that resets were the cause of the turnaround in the US. But I’m willing to be convinced otherwise. 🙂
Until then, I’ll believe that things could turn here without job losses or another economic shock, which is what niRob suggested would be required.
/dev/null
I think I’m going to say we pretty much agree – “Once prices did stop appreciating and start to drop, however, people holding toxic mortgages couldn’t sell or refinance their way out of them. The problem was that the entire house of cards (so to speak) was relying on a perfect storm of good conditions”
I won’t deny that if we have a perect storm we’ll be in doo doo. But isn’t that the same as saying we need some kind of negative event? If the economy continues to be strong, holding costs don’t go up, and housing demand remains strong, how bad can it get? One of those things changes and it becomes a different story.
Jesse:
Great number for comparison. Thanks. Like MOI, numbers from another area are great to put things into perspective.
Re: trigger event for a downturn, at some point won’t sheer unaffordability itself be the equivalent of a drastic economic shock as the net result in both cases will be that few people are in a financial position to buy houses?
On the other hand, recently spoke with two couples who are looking to buy now. Both have relatives who, if not wealthy, own their houses and are co-signing. Both couples are cognizant of downward risk, but see it as 20 – 30%. They are hopeful market will go up another 10 – 20% in the meantime to offset that loss. Also, if you look around, there actually are properties out there that are, if not inexpensive, comparatively good deals. In any case, they plan to raise their kids in these houses so they are in it for the long haul. So for some people, it can make sense to buy now. I think they are taking a risk but, hey, I have a lot of risky investments in stocks and commodities, too. We all make our own choices. The whole financial structure of the world as we know it could unravel without a safe haven. But as the Boss sings on his new album: “We’re living in the future and none of this has happened yet.” C’est la vie.
“Of the sales 21, or 8.57%, went over list”
This number has dropped quite a bit, it used to be sitting around 13% – 19%.
The list/sell ratio has been going up and down lately, a few days it is bearish looking, then it looks more bullish for a few days.
Jesse,
I also wonder if Vancouver will track like Seattle. The inventory in Seattle is increasing, homes are taking longer to sell and foreclosures are up 2.5% over last year.
I personally know a person in Seattle who has had his home up for sale for four months. Lots of lookers, but no offers even with price reductions.
Bank of Canada knows its role in credit crisis
http://tinyurl.com/33cva6
On the dollar, David Longworth, deputy governor of the Bank of Canada, said there would never be a point when keeping the currency down would take priority over meeting its 2% inflation target.
Northern Ally:
I guess my question is: if high prices are the cure for high prices, can’t there just be a plateau? If $100 is the absolute top, and I bought yestarday for $99.50, and prices have stopped rising, will I sell at a loss if I can continue to hold? That’s why I think we need an additional event of some sort.
Coco:
I think that comment about a 2% inflation target is supportive of my view that CBs think they can manage inflation. I think that the BoC also knows that its too small to really control currency values. You’re right, over-lists are markedly down, yoy.
August inflation came in at 1.7% due to lower gas prices. Oil has gone up since then and whether inflation has risen in September because of higher oil prices remains to be seen. David Longworth also warned of increasing home prices again during his speech, so it is looking more and more likely they will hold the interest rate for October.
As the higher dollar churns its way into the economy later in the year, I can see 25 bbp drop maybe in January.
Oil’s gone up, but gas has come down (dollar’s up, right?) I’ve also heard two separate comments (one originating in the BoC, I believe) along the lines that the credit crunch is not going to be as devastating as thought, and that the worst is behind us. Those two in tandem make me agree with you that %i will stay stable in October.
“Economists see easing credit crunch and little chance of US recession”
One should not count all their subprime chickens before the majority of them hatch.
I have an offer on a property with a counter. 3.2% off list price so far.
It was priced sharply.
Gone are the days when the counter was only a thousand or two off asking price.
Mark Carney, 42, a senior official in the federal Finance Department, will be the next governor of the Bank of Canada, replacing the retiring David Dodge in January 2008
Rob, a plateau would happen if everybody could afford to hold and the economic state of potential buyers also remained stagnant. But in an over-extended market, some people will have to get out quickly even if there is no macro level “trigger.” People get divorced, job transfer, lose job, disabled or dead wage earner, teaser rate expires, can’t make the 18% interest payments on that credit card down payment, can’t carry the empty rental suite, etc. These people have to price to sell and they pave the way down. I’ve heard housing prices decribed as “backward” looking, that is, people’s expectations of price is based on what prices did the previous 4 quarters. When buyers start seeing prices declining a little, their expectation becomes that they should decline a little more, and a little more. And so on. Not a scenario for a crash, perhaps, but a few pebbles rolling downhill in this way could eventually cause a landslide if and when a bigger “trigger” does hit.
NA:
What exactly are you saying? That the traditional must sells will drive the market down? They’re balanced by the traditional “must buys”. (Divorce sells to just married, downsizers sell to just had another kid, lost my job sells to just got transferred here, etc).
If they don’t drive the market down, and it doesn’t become harder to hold properties (recall I said “I can continue to hold”) why should the market actually fall much at all? All things being equal, not much will change. All things don’t stay equal, as we know. Inflation comes, economies slow, liquidity evaporates. But we have seen prices plateau and stagnate within narrow bands before.
That’s not a prediction that we’ll see a plateau. Its a contention that we need a significant event to change the direction of this market. Pebbles rolling down a hill may be a sympton, but they don’t cause the landslide.
“Both couples are cognizant of downward risk, but see it as 20 – 30%. They are hopeful market will go up another 10 – 20% in the meantime to offset that loss.” – Northern Ally
Seems like a stupid risk to take…AND line someone else’s pockets in the meantime.
Wow I caught flak from both Rob and Snick–is that a first?
NA:
You must be doing something right! 🙂
There is no such thing as traditional “must buys” when rents are low. People who need accommodation in a market that they feel to be unfavorable just rent. Also, if the raise and plateau pattern you describe were possible, we’d have seen it before.
Rob,
I am hoping for Muir to grasp the fact that people, although still buying, maybe overstreching themselves. Take this into account and maybe speculate on overall risk of future correction if possible, since allot of mortgages are ammortized over 40 years and have little hope for being paid of in 5.
In other words if inflation or strong Canadian dollar hurts our economy then the chance of tighter future credit and higher rates will suppress RE values pushing the overstreched Zero Downers to the curb.
Do you get it Rob? Is telling people to be carefull.All Muir states is facts of today and yesterday and doe’s not consider to warn for tommorow.
Conscience is what I am looking for. BTW if homes still rise I am not priced out and I am happy full the bulls. Oh ya and if property drops and bulls begin to sell then they become bears!! HA!
“Conscience is what I am looking for.” – The Unthinkable Renter
Well, you’ve come to the wrong place.
Any realtor is concerned with making a sale. As with the stock market “Dow Theory”, they assume that everything is “priced in”.
So, if you show up at an open house and sign on the dotted line afterward, it is “assumed” that you can afford what you’re getting yourself into.
Caveat emptor, chump.
“I am not priced out and I am happy full the bulls. Oh ya and if property drops and bulls begin to sell then they become bears!! HA!”
Wha?
VAB:
Good point. It might be a comment on the nature of this market that I overlooked that obvious point. In most markets people who, for example, need more room, buy up, and don’t rent up. A lot of that has happened in this market as well (swollen equity on the 2 bedroom means you can still buy the 3 bedroom, even if its gone up in price), but you’re right: the motivation to leave the market is somewhat stronger.
UTR:
Do you think that Mr. Muir isn’t aware that people are stretching to buy? Does this make what he’s said untrue?
Are you really hoping that he’ll stop stating uncontroversial bits of information (demand remains strong, there is a lot of variety, affordability challenges have led to the creation of new purchasing options) and instead speculate on the future? And specifically, speculate along the same lines that you’re speculating along?
Two times you question whether someone who isn’t saying what you say “understands” whatever it is you want them to understand. Trust me, Muir and I both get it. My point is simple: Muir states some facts, and is called irresponsible because he might cause people less informed than you or fish to do something that may or may not be beneficial to them. Then you wonder “Don’t these guys understand?”
Now, if prices rise and you’re not priced out, great. But tell me this: if Muir says “Market is still strong, there is lots of variety and lots of financing options, but…things might go south, our economy may fail, you may lose your job, you might borrow now, but not get financing at a rate you can afford later, and house prices may plummet”…and then prices don’t plummet, and a young family can no longer get into the market, tell me: was Muir more responsible because he speculated?
Snick:
“So, if you show up at an open house and sign on the dotted line afterward, it is “assumed” that you can afford what you’re getting yourself into”.
I generally try to ignore your posts, but this one is valuable. A good Realtor does not assume a buyer can buy. He does some sort of qualification. A listing Realtor who a) advises a seller to take an offer from a buyer who can’t complete and b) didn’t take action to qualify the buyer some way is breaching his agency responsibility to the Seller.
Still, Rob, I kinda see Snick’s point. My wife and I were looking last year. First, we got pre-approved for an absurd amount of money. We told our realtor (well-known and well-regarded) what we were comfortable spending. So what did he do? Kept sending us MLS listings and sending us on open houses for properties at the pre-approval price limit. It’s not like there was a dearth of properties in our comfort zone. We got the sense he was subtly trying to coax us up, not unlike a car salesman luring you with extras. In the end we got sick of the whole process, hence, we’re happily renting today.
Also, glad you agree with VAB. People are “must buy” only in the same way that they “must have” stainless steel appliances and BMW SUV’s. Maybe in that sense–real estate as the apotheosis of our consumerist culture–not surprising to see absurd housing prices have such staying power in a boom town like Vancouver.
“I generally try to ignore your posts…” – Rob
Likewise, I’m sure. I try to only respond to some of your readers who have lost their way.
After all, someone has to do it.