Wednesday Numbers (by Chan)

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Filed under Daily Numbers

54 responses to “Wednesday Numbers (by Chan)

  1. Anonymous

    I’m wondering why Tuesday’s inventory was not posted, but the rest of the days are.

  2. Priced Out

    A drop of 500 in two days. That is huge, much bigger than last year when listings only dropped about 200 from Oct 30- Nov 1. I wonder why so many dropped this year?

  3. Jeff

    I don’t see inventory as a major factor as the demand is also lower. Those who need to sell will relist.

  4. Grin and Bear It

    Jeff, you’re a RE agent. What’re your observations? A slow down? Less demand? Prices decreasing?

  5. blueskies

    jeff:

    what do you know about Pomaria?

    seems to be a lot of $1m+ listings, are these moving?

  6. vomitingdog

    This reflects exactly what I’ve been seeing out there. Certain VW $$$ houses/duplexes/apts that sat on the market from the end of August to September began getting snapped up by mid-October at their outrageous prices. It’s as if the market decdided to accept the new price high.

    I think the people working the numbers are bogged down with all the new listings, etc. At least that’s what I’ve noticed on the private client services website I have access to through a realtor–everything seems late.

    I predict the market will be on fire once again come February.

  7. Jeff

    the market is a strange animal… it slows down for a few weeks, then becomes busy again, then takes another rest. prices are rising. buyers are price sensitive. Pomaria has nice finishes and high ceilings… I’d buy there if prices were 50% lower, it’s new so the inventory will need some time to sell off and it also competes with the Icon and other new buildings in the area.

  8. Priced Out

    Again, I’m convinced that more inventory is off the MLS this year. Its being sold directly through the developers or is held in assignments.

    Over the winter, it will be interesting to see what happens with all these empty units in newly completed buildings. In some cases they are asking ridiculous rents that I doubt anybody is accepting. In New Westminster, they are asking as much for a new two bedroom rental condo as it costs to rent a four bedroom house ($1500-$1700 month). You can rent an older but fixed-up two bedroom apartment in New West for less than $1000.

  9. robchipman

    Anonymous:

    It was just a miss, either by me or by Chan. I shoot her the raw data and she posts it, and she’s still getting used to the numbers (they aren’t as rivetting to her as they are to the blog number junkies). But, we’ll try to get better!

  10. Anonymous

    Priced Out,

    Sounds like some investors thought that the horse pushes the cart when it comes to rents. They will discover otherwise. The rental market is tight, but not that tight. Also renters tend to be less picky about new vs used, as maintenance is the owners problem. There is no justifiable reason for their expectation. Flippers make terrible landlords.

  11. VAB

    vomitingdog, invetory dropped because listings were pulled, not because the places sold. You just have to to look at the buy-sell numbers.

  12. Kanpar

    Money left in the best saving account earns 5% interest per year.
    On the other hand inflation eats 2% of its purchasing power per year.

    Then you will be left with a 3% return, on which you have to pay taxes. At 40% bracket, your real return will be
    3% x (0.6) = 1.8%

  13. Rogie Vachon Yo!

    Could something like this happen in our own sweet little backwater?:

    NY ATTORNEY GENERAL SUES FIRST AMERICAN AND ITS SUBSIDIARY FOR CONSPIRING WITH WASHINGTON MUTUAL TO INFLATE REAL ESTATE APPRAISALS

    See:
    http://www.oag.state.ny.us/press/2007/nov/nov1a_07.html

  14. Joe just Joe

    Acutally you’d pay tax on the 5% so (5%*60%) means you’d keep 3% before inflation, depending on which numbers you use your either increasing wealth at 1% year or not gaining at all.

  15. coco

    B.C. sawmill shutdowns are coming, analysts predict

    http://tinyurl.com/2s5rjo

  16. coco

    Loonie may loose some of its shine when Canadian banks start reporting Q3 earnings with some subprime writedowns at the end of November.

    BMO said to have the biggest U.S. SIV exposure, will report first on November 27.

    Lots of rumours swirling that CIBC underreported their subprime exposure and it could actually come in between 1/2 billion to 2.6 billion, instead of the 330 million they mentioned previously.

    National Bank will take a good hit too.

    Royal has a little exposure, but certainly not as much as the above mentioned banks.

  17. coco

    Who, in the real world, can afford to live here now?(Vancouver)

    http://tinyurl.com/35ph3k

  18. coco

    BoC injects 330 million today and leaves another 330 million for tomorrow too.

  19. coco

    Canada’s Dollar Falls From Record High as Growth Concern Increases

    http://tinyurl.com/34vbyn

  20. chip

    The latest numbers for Calgary are out at http://albertabubble.blogspot.com/ and they’re showing prices are back to where they were in March after a drop of 10% in the last three months.

    Things can change quickly.

  21. Jeff

    where can you bank your cash for 5%?

  22. notbearnobull

    these guys are deposit brokers…check here for high rates.

    http://www.gicdirect.com

  23. jeff

    You can get great rates through your bank but you need an investment account (e.g. ‘investdirect’ online banking account through RBC, HSBC, TD, etc.)

    RBC’s rates are up to 4.9% for 5-year GIC’s :
    http://www.rbcinvestments2.com/actiondirect/remote_fixedrates.html

    I just transferred to HSBC and am not sure how good their rates are yet. Regular ING direct GIC’s are near 5% too I think.

  24. Anonymous

    Places are definitely not being listed on MLS that are for sale. I know of several, this was brought up a week ago on vancouvercondo.info and I checked the MLS listings against Re-Max. I’m sure it’s the same for other realtors.

  25. Jeff

    Must be exclusive listings. Perhaps the seller wants to pay only 1/2 the commission. The seller might want to save on commission and the Realtor might offer the option of listing exclusively (non MLS). Bad for the seller as this limits the exposure of the property to practically a FSBO.

  26. coco

    What a difference a day makes. Canadian dollar hits a high of ********* 107.22 *************

    Currently trading at 106.91

    Canadian October employment came in at 5.8% the lowest in 33 years.

  27. coco

    Jeff & Anonymous,

    I noticed some listings in my area that are for sale, but not on MLS too. The listings eventually appear on MLS again but not until the next month begins. Not sure what that is all about, it is like they are trying to avoid having to much inventory listed in a single month or the realtors are slow to renew the expiries. It does look weird though.

  28. coco

    That should be unemployment rate came in at 5.8% not employment.

  29. coco

    Why Canadians Shop in America
    Though the loonie’s worth more than the greenback, Canadians head south for deals—and gripe about the high prices at home.

    http://tinyurl.com/yrjxyp

  30. chip

    Yes, wonderful job growth, and in a typical Canadian fashion look where it’s occurring, according to the CTV:

    “The service sector continued to elevate the nation’s employment level with the highest gains in health care, social assistance and public administration.”

    All three of those segments are government jobs.

  31. blueskies

    http://tinyurl.com/yv9l56

    wsj:

    The worry is that a huge financial edifice that is built on top of the now-shaky mortgage market could weaken, potentially causing lenders to tighten up on loans and slowing the economy.

    and they should be scared…….

  32. chip

    US payrolls double forecasts. Interesting where their job growth is coming:

    “Service industries, which include banks, insurance companies, restaurants and retailers, added 190,000 workers last month after gaining 127,000 jobs in September.”

    Not just private sector, but the embattled financial services segment to boot.

  33. coco

    Ontario election skews job figures too.

  34. ceejay

    coco..I dumped the AC stock. I’m trying to figure out what to do with our HUGE dollar. Rather than RE in BC, a vacation looks good. Maybe Hawaii. But ya still gotta fly there.

  35. Tony Danza

    ceejay, Just fly out of Seattle, I usually pay 50% less to fly out of there than I do from YVR.

  36. Brian

    Unemployment in Canada has fallen to a 33 year low as the economy added 63,000 jobs last month. The market doesn’t seem to care that the majority of the jobs were created in the public service sector (government) and that the manufacturing sector continues to bleed.

    http://tinyurl.com/34gr6h

  37. ceejay

    Tony D: I hate that Seattle drive. The border thing. Which is why buying WA. RE is problematic. Who wants a cottage it takes 4 hrs to get to from Vancouver? There is nexus, but you can lose if for a piece of fruit in your trunk. The hassle factor is important to consider.

  38. observer

    i will probably get flamed, but has anybody followed california? i have bene following 3 properties in the orange county area. (realtor showing to me, and i have been mulling them).

    property one 360k in april, 355k in sept, 290k in aug, 270k now!

    property two 260k in jan. 160k now. (many price decreases)

    property three 290k in sept, 250k now.

    crazy, but i am still waiting. and slowly converting money to USD (gotta lock in the low rate). they lowered rates in US too, so i can get a good mortgage 30 yr fixed < 6%.

    cheers

  39. robchipman

    Anonymous wrote:

    “Sounds like some investors thought that the horse pushes the cart when it comes to rents. They will discover otherwise. The rental market is tight, but not that tight.”

    There is some truth to that. A high purchase price requires higher rents, so motivates the buyer to up rents, but the buyer can’t get those rents unless there is a line up of tenants. Tenants get caught between two fires: rising rents and the limits of their incomes. You can borrow to buy easily. Its tougher to borrow to pay rent, so you could argue that rental affordability has fewer safety valves. About all a renter can do, when faced with lack of supply and higher rents, is rent less or inferior space, get more income, or do without something else.

    Its an old truth that is often ignored: the market doesn’t care about your personal situation.

  40. jesse

    “i will probably get flamed, but has anybody followed california? i have bene following 3 properties in the orange county area.”

    There are some neighborhoods in OC (and other areas) that are dying. Their prices are dropping much faster than areas with more stable ownership. I would not use these areas as a benchmark for the market overall and certainly would be wary of neighborhoods with larger than average aggregate region-wide price drops.

    Buyers are wary of these diseased areas for good reason, despite some Realtors’ suggestions that it’s simple psychological blockages causing buyers to hold off. Fun on the way up. Sucks on the way down.

  41. jesse

    “About all a renter can do, when faced with lack of supply and higher rents, is rent less or inferior space, get more income, or do without something else.”

    Rob, very true. I would add that renters can start to share space (a corollory to renting less space) so the market is not unreasonably stiff. Rents rising is also (obviously) indicitave of people being able to afford it.

    As a sidenote, renting from someone who is cash flow negative has added risk. Certainly it is in the interest of renters to do a background check on the landlords as much as the other way round. This is not to say you should pay more rent to prop up someone who made a bad financial decision; just be careful who you rent from.

  42. coco

    “About all a renter can do, when faced with lack of supply and higher rents, is rent less or inferior space, get more income, or do without something else.”

    Or….move to another city where the cost of living is not so high. One of the reasons people can’t find help anymore, younger people just can’t afford it and are moving away. Highest immigration rates were to Manitoba, so I guess those high housing prices and high rents take their toll.

  43. Brian

    jesse,

    Renter to do a background check of landlord for what?

    do you do a credit check from who you are borrowing money?

  44. coco

    See a lot of rentals advertised….now $$$, now reduced to $$$.

  45. robchipman

    Jesse:

    I only point this out because I think there is a common assumption that neg cash flow investors are a result of lack of cash.

    In my experience that isn’t the case. Someone who can qualify for a high ratio, neg cash flow income property probably has a pretty good income and pretty solid asset base. The neg cash flow is likely discretionary and a tax consideration (defer income tax today in order to pay capital gains tax later) and investment consideration (increased leverage).

    Can neg cash flow guys get into trouble by being over-extended? Sure. That’s a direct contravention of my rule of only buying what you can hold, of course, but that’s a risk tolerance issue and therefore a personal choice. Lenders will arguably lend you more than you should borrow. As you point out, a tenant may suffer as a result. The tenant may be served with an assignment of rents (pay your rent to the lender or else) and may later face foreclosure fallout (when the Supreme Court says get out you don’t get to go to the RTB; on the other hand the lawyers involved generally try to accomodate the tenants, as its in their interests).

    Anyway, neg cash flow does not necessarily equal over-extended.

    Here’s the rub: when you try to rent from me I’ll do a backgound check, with your permission, including a credit check. If you ask me for info on the owner I’ll decline to provide most of what you would want (a simple function of confidentiality/fiduciary responsibilities to my clients). How do you propose to do a background check on the owner as a potential tenant?

  46. jesse

    “Renter to do a background check of landlord for what?”

    You want to have a reasonable expectation that they won’t foreclose during tenure. It’s not a one-way business agreement. If the landlord wants to withhold this information that is their right but I would ask what s/he has to hide and it seems reasonable to have some assurance of financial stability.

  47. jesse

    “How do you propose to do a background check on the owner as a potential tenant?”

    It may seem silly, but ask for previous tenant references. Someone who has rented the place for the past several years is likely in a reasonably comfortable equity position, as of today anyways. Rob, out of curiosity, is it even possible to do credit check on a landlord?

    Your point about neg CF not necessarily being indicitave of financial volatility is valid but as a tenant I cannot tell either way, hence the risk.

  48. robchipman

    Jesse:

    If you’re a member of a credit bureau you can do a credit check on anyone who consents.

  49. Tony Danza

    I couldn’t imagine if a potential tenant asked to do a credit check on me, NEXT!! Maybe if the rental market was soft. There is protection in the RTA for tenants if the landlord loses the house, you would probably get to live a couple months rent free!

  50. jesse

    “I couldn’t imagine if a potential tenant asked to do a credit check on me”

    Yeah, it is pretty far-fetched but I think it does highlight there are considerations both ways. “Free rent” during foreclosure has some obligations relating to accepting responsibility for maintenance and accommodating the foreclosure process.

    Asking for previous tenant references I have heard of. In a tight market landlords can ask a lot and a potential tenant asking for references would be laughed at; I’m guessing in a loose market it could turn the other way.

  51. e

    Is la jolla a diseased area in California too? There are considerable drops there too!

  52. e

    actually realtor called me. san francisco property 760k (sold in 2006 for that much) now 560k. tempting, but should wait!

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