Quick Numbers

Sorry, all, but I’ve been very busy.

Today there were 99 new listings and 145 sales, for a sell/list of 146.46%.

Yesterday there were 116 new listings and 102.59%.

Wednesday there were 211 new listings and 160 sales for a sell/list of 75.83%.

Couple tidbits:

Does anyone remember last year’s benchmark prices? Like from about July to February? 

Popeye:  What kind of profit did the REBGV make last year?  What sort of dividend did they pay shareholders?  Are there shareholders?  I’m just curious if you could help out, and figured that, what with you insightful analysis and all, you probably had some answers  🙂

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138 Comments

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138 responses to “Quick Numbers

  1. Snick

    “Does anyone remember last year’s benchmark prices?” – Rob

    Why? Were they, let me guess, LOWER?

  2. BBY

    Pretty well break even for the last three days then with 426 listings 424 sales for sell/list of 99.53%.
    If you include Monday’s numbers (but not tuesdays because they weren’t listed) we get 640 sales, 578 listings for sell/list of 90.31%. Roughly even but just a little bearish. Tuesday’s numbers could easily make it bullish even.

    Had to derive yesterday’s missing sales numbers using some math…

    Thanks for you work Rob

  3. Anonymous

    Snick and -A-, let me guess ? Same IP address ? hehe

  4. Jeff

    Rob:
    I checked my spreadsheet on benchmark prices…
    good catch… prices were flat for the period you mention and then took off between February-August 2007…
    therefore… flat prices since August 2007 may not be a sign of a turning market.

  5. coco

    Jeff,

    Last year Fraser Valley Real Estate followed a similar trend. But, if the price drops continue it is on a different track compared to Vancouver proper.

  6. deb

    Given that listings come a good while after sales on the timeline, this makes some sense. Who really would be putting their place up for sale now unless they really had to.

    I imagine the new year will be flooded.

  7. News Flash

    “I checked my spreadsheet on benchmark prices…
    good catch… prices were flat for the period you mention and then took off between February-August 2007…”

    Same thing as in 2004 and then we had a record 2005 of over 20%. There were numerous calls for Sep 2004 being the top. Maybe it is different thist time?

  8. Domus

    Newsflash,

    yes it is different this year. The world around you has changed quite a lot. If you don’t see it, you are blind.

    This time is very different from 2004 and 2005. Can you pick the hints?

  9. Jeff

    I have always said that the party keeps on going until it stops, and when it stops, well everyone knows the rest. Wait for it.

  10. VAB

    We all know that we see a down tick in these months, the question is whether it keeps on going down this time. With the US, the Loony, the Writers Strike, Alberta, England, Commercial Paper, etc. there is good reason to expect this to be the breaking point. Of course, as soon as you have sustained YOY decline the game is up and the spiral starts turning in the other direction.

  11. Snick

    Anonymous
    December 7, 2007 at 11:55 pm
    “Snick and -A-, let me guess ? Same IP address ? hehe”

    Not so, mon ami. As with Marx and Engels, we arrived at the same conclusions entirely independent of one another.

  12. robchipman

    BBY:

    Most people feel that a balanced market is much more in the 50% sell/list range. Its not uncommon to find people who feel that in a balanced (or a somewhat inaccurately named “normal”) market more listings don’t sell than do sell. A 90% sell/list is really not even close to a bear neighbourhood. Keep an eye on the market and you will see continued sell/lists in the 50s, and DOMs in the 90 plus area. I don’t know when, but it will happen. We are still, despite rumours to the contrary, in a bull market.

    Anonymous:

    Snick and -A- have different IPs, email addys and providers.

    Deb:

    “Given that listings come a good while after sales on the timeline, …”

    I don’t follow. Where are you starting your timeline?

    Jeff:

    “I have always said that the party keeps on going until it stops…” I agree with you. That’s kind of like one of Michael Campbell’s cliches – “A trend is a trend until it stops being a trend”, but its probably more accurate and informative than a lot of other statements about the market. The fact is that the market can defy logic for extended periods of time. Most of us have seen that happen before.

    You can’t lose money selling at a profit, so exiting this market now, as an investor, isn’t necessarily bad. Buying based soley on continued appreciation is probably unwise. Neither of those statements precludes increasing prices for next year.

  13. ObserverX

    “You can’t lose money selling at a profit, so exiting this market now, as an investor, isn’t necessarily bad.”

    Huh? What happened to the “buy and never sell” spiel? The preacher has converted to a new religion???

    I guess it must be a sign …

  14. -A-

    Rob, under how many different handles do you post?

    I post only under 1 name.

  15. deb

    what I mean to say is that sales have been set up quite a while ago, say in November or even October and are just now completing. That makes sense, a good time to sell.

    But December is a hopeless time to sell isn’t it, so it would make sense that listings are very low.

  16. Jeff

    deb:
    I’ve said before that maybe Rob’s sales numbers are up to 2-weeks off because sales require subjects to be removed and then the real estate board to process the sale. The completion is not necessary. The sale is reported within about 2-weeks of the sale happening.
    I don’t think 2-weeks is enough to worry about given that markets can take years to correct.

  17. News Flash

    “yes it is different this year. The world around you has changed quite a lot. If you don’t see it, you are blind.”

    The only difference is these fundamentals are even stronger:

    – the booming economy
    – declining inventory
    – low rental vacancies
    – rent increases well above inflation
    – forecast 50,000 net migration to BC
    – interest rates declining
    – the Olympics 2 short years away
    – construction costs and bottlenecks limiting new inventory

    You can wish as you like. The fundamentals say no price declines coming anytime soon. If you can’t see that you are more than just blind.

  18. blueskies

    The fundamentals say no price declines coming anytime soon.

    the lack of price declines will lead to less sales due to the affordability factor, lower sales volume will trigger increased listing inventory thus leading to lower asking prices…..

    the cure to the disease is in the disease itself…
    blindness notwithstanding.

  19. blueskies

    a good credit system primer
    for the willfully blind……

    http://tinyurl.com/2fv9xs

  20. coco

    Time for everyone to have a good laugh….

    http://www.elfyourself.com

    Take your photos, turn yourself, family and friends into dancing elves.

  21. robchipman

    ObserverX:

    I can’t see the confusion. On a personal note, I’m not selling. For most investors, in most circumstances, I’d recommend holding, and that includes now. You can crystalize profit and take advantage of big gains on real estate without selling, obviously.

    However, if, like Blueskies, you sold this year you’ve probably booked a profit. Is that bad? Not necessarily. Is it the best thing to do, or the smartest thing to do? That depends on your individual situation, hence the “not necessarily”.

    -A-:

    I don’t post under a handle at all. I post under my own name. I invite you to drop by my office at mutually convenient time to verify this, provided you agree to post the results. I’ll even buy you a cup of coffee. You can wear a paper bag over your head or take any other measures you’d like to maintain your anonymity.

    I don’t care if other people post under multiple handles (and as I recall someone with the same IP as you and similar opinions has posted under different handles from time to time). What I don’t like are false allegations that can’t be backed up with any facts.

  22. jesse

    “The only difference is these fundamentals are even stronger:”

    On the flipside:

    – Record poor affordability.
    – Credit is becoming more difficult to obtain, especially if banks have more writeoffs to deal with, and regardless of the posted mortgage rate.
    – Unemployment cannot go much lower.

    You may be right that the fundamentals you mention are here NOW, but what many think about is if things will be worse in the next 5 years that would warrant them holding off purchasing a property right now. But don’t let that stop you.

  23. More specifics on jobs last month, of the 26 000 new jobs last month, 12 400 were in construction.

  24. News Flash

    All nice cliches but not true…

    “- Record poor affordability.”

    Affordability has been worse when you factor in interest rates. And with the huge amounts of cash sitting on the sidelines just in the blog alone it could support the market for years to come.

    “- Credit is becoming more difficult to obtain, especially if banks have more writeoffs to deal with, and regardless of the posted mortgage rate.”

    CMHC sets the standards for mortgage credit. Lending standards have loosened not tightened. You can now buy with 0% down.

    “- Unemployment cannot go much lower.”

    So???

    “You may be right that the fundamentals you mention are here NOW”

    There is nothing indicating any of the fundamentals I listed will change other than bears wishful thinking. CMHC has forecast the same. Once the fundamentals change housing will react. Until that happens we are in a bull market.

    ” but what many think about is if things will be worse in the next 5 years that would warrant them holding off purchasing a property right now.”

    It doesn’t look like it is happening now. Very strong numbers for November. But yes that is called pent up demand and will support the market in the future.

  25. blueskies

    pent up demand

    i’m willing to bet the demand is not “pent up” just due to the fact there are 50% speculators in the market…. speculator demand is fake demand, it can disappear overnight.

    you just need that endogenous event to trigger the rush to the exit.

  26. News Flash, the assertion originally made was that things are different this year over 2004/2005, you said:

    “The only difference is these fundamentals are even stronger.”

    Then you make a list, I guess from the top of your head, since you don’t post any sources, making your points weaker than some of them already sound.

    Stronger ‘booming economy’, this in light of the BC Gov’t lowering GDP growth expectations (http://tinyurl.com/28b43p , GDP down: http://www.bcstats.gov.bc.ca/data/bus_stat/bcea/bcgdp.asp), this week, who are you trying to kid. You post ‘the Olympics 2 short years away’ as a strong fundamental, that’s a pretty big reach.

    Some may also consider the turmoil in world financial markets and general all around economic uncertainty and volatility, another reason why things are shakier this year. Also, the US housing market going from overdrive to sh#$house.

  27. News Flash,

    Original assertion made:

    “This time is very different from 2004 and 2005.”

    You say, yes, the fundamentals are strong and list BC’s ‘booming economy’, as a being stronger now.

    Please explain, do you have the GDP numbers, you talk a lot without referencing any data?

  28. blueskies

    data? who needs data
    when ya got hot air?

    psychology rules!
    greed for the greater good!

  29. paulb

    -A- = owned

    Nice work Rob

    P.S -Newsflash… watch what happens to our “booming economy” over the next few months.

  30. There is nothing indicating any of the fundamentals I listed will change other than bears wishful thinking.

    Google Carol Taylor (BC Minister of Finance) . I heard her on CBC Radio revising the forecast for BC, and she was not talking about milk and honey.

    Interestingly, I think that this boom is killing itself. Lack of skilled trades, and escalating costs in construction have killed both major (Teck Novo, or whatever, gold/copper/silver mine), and minor (Elyse and the townhouse project) projects.

    The Sun publishes big red arrows downwards because there is no more spectacular appreciation, and sensation (of any kind) sells papers. The RE ads in the papers will soon be overtaken by bankruptcy specialists.

    This has been an incredible time for people to make money, but it has also “hurt” a lot of people (and quite a few on the horizon), but like all spectaculars, the lights will be turned down, and the sweepers will come in.

    It will end – Rob has said that all along. This is it, I believe. There are a lot of factors (sub-prime, ABCP’s, banks losing billions, CMHC off it’s rocker, rate cuts when there ought to be hikes, BoC and other central banks propping up private banks, a dysfunctional Parliament, record levels of income required to service debt, negative savings rates, property taxes set to double and more, anything else?) that did not exist in the last 5 years or more. It is time to pay the piper, and we all know who calls the tune.

  31. $fromA$ia

    Wooohoo, lets hear the spider bark!!!!

  32. doubter

    So here’s a question. I may come into some money early next year. This might change my situation almost overnight from “completely priced out” to “possible buyer.” However, then there’s a very large decision to make. Is the market actually going to correct, as some have been forecasting (and as I completely believed until about a year ago)? Or will it continue to be resilient and defy the odds in the face of all external pressures (cf. the name I’m posting under)? I know that people alway say to buy what you can afford and forget about it, but it seems silly if we really are at a precipice. I know there’s probably nothing new to add to all the bear and bull arguments. Maybe it’s just that I hadn’t considered the market from this perspective before, and thought I wouldn’t be able to. Thoughts? Even some advice on when to hang on until (e.g. ‘if prices haven’t actually started falling by June 2008, then buy’)? I’d really like to be a home owner but don’t want to kick myself after I’ve lived in a place for six months.

  33. blueskies

    my call: wait
    ya can’t lose if ya don’t bet.

  34. deb

    I am also waiting. I have been waiting for longer than I thought I would, but we will still continue to wait until we see prices that we like. We are optomistic that it will happen.

  35. ObserverX

    We’re waiting too, despite the fact that we could buy something outright right now. Why? It’s cheaper to rent and we didn’t work hard to get to this point to blow it for the sake of an extra couple of years of a warm fuzzy feeling. If at some point rent vs. buy becomes comparable and prices still haven’t come down, we’ll buy then.

  36. deb

    we sold our condo in december 06, obviously too soon, but that money is ready to buy something when we see a deal we want in a smaller town.

  37. Pearl

    When I see year over year returns of less than 8% for six consecutive months then I’d view the market as done.

  38. jesse

    “CMHC sets the standards for mortgage credit. Lending standards have loosened not tightened. You can now buy with 0% down.”

    Check your facts. Lenders set standards on lending. CMHC sets standards on insurance. A lender will not sign a loan agreement if it knows it will default, even if it’s insured. They would make 0 money on it plus would have to administer the fallout, which puts the deal thousands of dollars in the red when it’s all said and done, even after insurance remittance. Insurance is meant as a floor on losses.

    I don’t think lenders have really tightened all that much yet, but if/when they do, you will see it first-hand in Rob’s inventory and sales numbers.

    “- Unemployment cannot go much lower.”
    So???”

    So…. it can go higher. There is huge leverage built into the market as a result. Unfortunately, if you see the unemployment statistic go higher, it will already be too late.

    “Once the fundamentals change housing will react. Until that happens we are in a bull market.”

    I’m glad we agree! The trick is to find the “fundamental” that precedes price drops. From experience in the US, high inventory precedes price drops, but if you’re trying to sell even that fundamental is too late. Other “fundamentals” changed before the high inventory, including poor affordability. I don’t think affordability in GVA has been much worse than now; maybe a bit better by 1-2% compared to May of this year, but in historical terms it is the highest ever, tied with ’89.

  39. Annon

    I find it sad to hear people talk about Olympic as the savior of our boom. Apart from the fact the Olympic is just pure entertainment and that nothing is really gained from of it (so what if you can ski the fastest or if you can skate in the prettiest style? what do we get out of that?), it’s a lost cause. No city has made net profit from being a host city.

    And the labour shortage is just a joke. When you have 500 Starbucks serving a population that only needs 50 Starbucks, of course you could run into labour shortage. This goes for all retail stores and industries.

    The credit crisis and corporate profit issue will lead to job losses. When expansion plans are reduced/removed, the future for our economy is less than encouraging. And here we are still worried about not being able to afford a house.

    Just look at how BoC stated “…our primary concern is inflation …” And while inflation didn’t go down at all, there goes a rate cut. BoC tries to divert people from real cause (credit crisis) by saying this provides relief for auto industry as if a mere .25% cut can change US auto giant’s decision and add more work in Canada.

    And if those 12k jobs added were related to Olympic construction, I’d be really concerned about the true health of our economy.

  40. abc

    doubter, if you are looking for some interesting analysis on early signs of a market turn you should review all of Fish’s posts on his blog (http://fishre.blogspot.com/). A couple things he mentions to look for is an increase in months of inventory starting in the spring and to watch the periphery (surrey,mission, chilliwack, etc). Price drops could be expected after the MOI increase and may take a few years to work themselves out.

    I’m waiting and will not be putting a large part of my net worth into something which is so overpriced relative to rents. Good luck on your decision.

  41. deb

    Here is an interesting aside. I posted on craigslist that I am looking for an overnight stop in Vancouver, a room in a house or apartment for days when my husband and I come to Vancouver for work. I got quite a few replies, some from people who do this for a business, some from people with nice homes, but a few from people who have the condo up for sale and are looking to make a few bucks while keeping it more or less vacant.

    For the traveller to Vancouver this has got to be the cheapest way to get a decent room.

  42. Strataman

    DEB “but a few from people who have the condo up for sale and are looking to make a few bucks while keeping it more or less vacant.” There is literally hundreds of condo’s available for short term rent. Be as choosy as you want. Also almost all will drop substantially in asking rent price (often 30 %) (It’s definitely a renters market). Remember though weekly daily rentals are often technically against condo by-laws and as a rule you will get no service or rude service from concierge staff who do not like doing hotel type concierge duties and are under instructions from strata councils NOT to do those type of services.

  43. Coffee? no Thanks

    “I’ll even buy you a cup of coffee. You can wear a paper bag over your head or take any other measures you’d like to maintain your anonymity.”

    No thanks, I won’t fall for that one.
    I come into your office with a paper bag, you call the police claiming armed robbery, I go to jail and you and Satv/Thumbsup, hit on my girlfriend while I am away.

    -A-


  44. So, where are we now?

    Attn: Doubter, Please don’t waste a perfectly good lump of money by buying anytime before at least Autumn, 2008. Can you wait that long? Buy a term deposit with tha money. Capital preservation should be the most important thing on your mind for the next 9-12 months. If you squander the moula, we’ll be forced to re-name you “Mr/Ms Easy-come-easy-go.”

  45. Jeff

    deb:
    How long did you anticipate waiting?
    I expect to wait 3-4 years…
    18 months of slow declines, followed by 18 months of steep declines, followed by 18 months of small declines…
    it’s in those final 18 months of the decline cycle that you might want to buy… that is, if price is the most important consideration in home ownership.

  46. deb

    well we have been waiting awhile, and I must admit, getting a bit tired of house and petsitting, but we have lived in some lovely places.

    I expect to buy something in a small town in the next 4 months, but who knows? As long as we can housesit and pay no rent it is not much of a hardship.

  47. Jeff

    prettywoman:
    great graph… where do you think we are?

  48. Jeff

    deb:
    house sitting? how do you get that gig?

  49. deb

    word of mouth. We have been in 12 homes in 12 months up and down Vancouver Island and on the Sunshine Coast, checking out where we want to live next.

  50. blueskies

    a veritable parade of “i told you so”‘s:

    http://tinyurl.com/yr7882

    good Sunday read

  51. robchipman

    -A-

    There’s nothing to fall for. I’m not trying to trick you into anything. You don’t have to wear the paperbag. You can even send a proxy if you like. In fact, we can do it somewhere other than my office, if you’d like, and you can buy the coffee. All we need is internet access.

    You asked a question. I assumed it was asked in good faith, and that you would like the truth, even if it conflicts with your prejudices. To that end I’m providing you with an opportunity with only one obligation: you truthfully report what you find.

    Maybe I made a bad assumption. You’re the one who can confirm or disprove that.

    Jeff:

    Interesting timeline of declines. A couple questions occur to me. First, why 18 months slow decline, then 18 months steep declines, then 18 months of small declines? That’s almost 5 years of downward movement, and quite a bold prediction. What’s the thinking? Second, why buy only in the last of the three 18 month periods? The reason I ask is wrapped up in abc’s comment about the current market and the way its “overpriced relative to rents”; I’m guessing that abc would say that rather than market time you should look at income relative to price. Any thoughts on that? In other words, can it be smart to buy on the way down rather than waiting for the absolute bottom of the trough?

  52. -A-

    Rob

    I suppose we will have to leave it at a stale mate, I believe you and most of your industry’s mouthpieces have no more scruples than a swine, and are perhaps unwitting perpetrators of a cruel marketing sham.

    Naturally, I must emphasize it is only an opinion, based on stringing together many recent developments in other real estate bubble markets.

  53. robchipman

    -A-

    Its not a stalemate at all. You’ve done what I wanted, and my goal is accomplished. If you had accepted my offer (which still stands) you’d be fantastic verification. By declining my offer you’re really just proving that you prefer your uninformed opinion over the truth. I win both ways.

    The amusing thing is that you don’t know, for certain, that looking at my private information wouldn’t prove your point, but you’re still afraid to call my bet (which is not surprising). You’re not willing to be proven right if there’s a chance that you could be proven wrong. You won’t make any substantial effort to stand up for or test your beliefs.

    I think that speaks volumes about your credibility. Finding the truth, no matter how simple, doesn’t seem to be your thing.

    Again, the offer: you, or a proxy, at a time and place of your choosing that is mutually agreeable to us, meet at a place with internet access. You can see a) all the IPs connected to my comments b) search those IPs and see if there are any other handles c) look at how the daily numbers are calculated. The only requirement is that you truthfully report your findings. I’ll meet you just about anywhere in the Lower Mainland, at just about any reasonable time.

    The offer is open to other blog readers as well. Take a look, report the truth.

  54. deb

    Hey mice at high noon. I love it. Too bad your offer wasn’t accepted.

  55. Jeff

    Rob:

    Given all information available and the current US decline… the time frame seems reasonable. During a decline, I think sellers are in denial in the first year plus, then the real price declines happen in the next year plus, and then in the final stage while buyers wait for a bottom the sellers that need to sell must offer their properties at even lower prices.

    It’s in the final stage that I think most people are calling a bottom. During this stage, prices will most likely be at more fundamental values. I personally believe that it should be cheaper to own than rent because of the associated risks, costs, mobility factors, etc.

    No one can call a bottom, so it might be smart to buy earlier on the way down. Also, as you know, there are other reasons to buy a home other than price and making money.

  56. blueskies

    During a decline, I think sellers are in denial in the first year plus, then the real price declines happen in the next year plus, and then in the final stage while buyers wait for a bottom the sellers that need to sell must offer their properties at even lower prices.

    with a ‘hard’ credit atmosphere i think the initial slide will be quite sudden and quite deep.
    no easy money and a lot of scared speculators.

    the buyers will blink because they’ll need real money, no 100% mortgages.

  57. robchipman

    Jeff:

    Fair enough. If the last of the three stages is where the fundamental values turn up then we’re looking for the same place. I’d recommend buying just about anytime the income justifies it, though, and I’d be less concerned about the timing.

    Still, 54 months before we reach fundamentals seems like a bold prediction. Time will tell.

    “I personally believe that it should be cheaper to own than rent because of the associated risks, costs, mobility factors, etc”. Does that often occur, anywhere? What’s the difference between the times and places it does occur and the ones where it doesn’t? I’d think its one thing: demand.

  58. $fromA$ia

    Anybody read Ozzy Jurocks take on 2008 in the West Coast Homes + Design Magazine? I picked it up at the Royal Bank.

    Page 72. Titled Valley of Uncertainty.

    Blue Skies, Annon, coco, Have any takes on his mumbo jumbo talk.. He doe’s mention “unreported inflation”…..

  59. Strataman

    “but a few from people who have the condo up for sale and are looking to make a few bucks while keeping it more or less vacant” Strange that isn’t the world I live in (which is Vancouver West). Nobody I work with in property management and believe me they number well over the hundreds, are wanting to keep a place vacant. More like “do you know anyone who might rent for a few months? ” And always we are really negotiable, send them our way! 🙂 Search Craiglist (furnished rentals downtown) you won’t have any trouble!

  60. deb

    well I don’t know that they want to keep the place vacant, I am just guessing. Maybe they have tried to rent the place out, I don’t know, just a small sample.

  61. BBY

    If we begin the correction in 2008, I suspect that the Olympics will definitely spur the steep declines in 2010 spring as the Olympic caravan evacuate Vancouver alot quicker than they trickled in preceding the games. All the construction workers, Olympics staff, related services, media circus, team support, and the few spectators; Gone. Just vanished.

  62. blueskies

    U.S. housing data lifting markets

    http://tinyurl.com/24oxd2

    mining for good news…. no…. really!

  63. Strataman

    “U.S. housing data lifting markets” Makes sense actually; a lot of developers have slashed homes to liquify so I would imagine astute buyers are picking these places up. I certainly would if I lived there.

  64. Brittany Spears

    U.S. “Pending house sales” up .06%?
    Wow! The market is returning with a vengance!

    I wonder if that stat my be a caused by massive auctions of forclosures?
    My prediction is for a .25 point basis cut tommorrow by the Fed.
    Anymore than that would “panic” the U.S. stock market.
    Sooooo many fingers in the dike right now. The inevitable will be prolonged until the election (maybe).
    Keep your eye on the ball because every effort possible will be made to create a diversion.

    Example: NEWSFLASH Jan. 11, 2008.
    “Seven nukes that were lost recently somehow fell into the hands of Iranian terrorists (the CIA). They were launched form an unidentified location in the Atlantic ocean (the USS…). Luckily they barely missed the US eastern seaboard and hit Cuba. US troops have been sent to protect (invade) Cuba. The United States and its “pending” allies declare war on Iran ( “Oil City”).
    Stock markets take a temporary dip and then soar to new levels based on the economic war machine.
    Americans chant “Bush! Bush! Bush!. Republicans( back room boys bank cartel) voted in for another term. Cheap waterfront vacation homes available in Cuba & Iran. 0% down, 100 year terms available. Pass the popcorn.

  65. coco

    UBS 10 billion dollar subprime writedown foreshadows more pain for banks

    http://tinyurl.com/37vwt7

  66. coco

    $fromA$ia

    I have not read the article you mentioned, but if I come across it I will let you know.

  67. coco

    China Headlines….

    Expert predicts weakening of Canadian economy
    Xinhua, China – 6 Dec 2007
    The weaker demand for Canadian exports by the United States will result in a weakening of Canada’s economy starting from the fourth quarter of 2007.

  68. paulb

    OTTAWA, Dec. 6 (Xinhua) — The weaker demand for Canadian exports by the United States will result in a weakening of Canada’s economy starting from the fourth quarter of this year, Bank of Canada Governor David Dodge predicted Thursday.

    The weakening will continue into the first half of next year before a recovery later in 2008, Dodge said in front of a parliamentary committee.

    Dodge, who has been the Central Bank governor for the past seven years, will retire next month and be replaced by Mark Carney, now deputy governor.

  69. coco

    U.S. writer’s strike talks broke down, B.C. layoffs pending January 2008 if strike continues.

  70. Dignan

    “U.S. writer’s strike talks broke down, B.C. layoffs pending January 2008 if strike continues.”

    Layoffs have already started, shows in B.C have dropped from 40 to 5 since this summer. Each show has approx 300 employees and spends 2-10 million a month in the province.

  71. Grin and Bear It

    Looks like other regions are showing a slowdown. This is a link for the Valley.
    http://www.canada.com/vancouversun/news/story.html?id=99ead9f0-b662-4fe7-b4e2-3333c92d9a3d

  72. Jurock

    Pending Sales of Existing U.S. Homes Rose in October (Update1)

    Dec. 10 (Bloomberg) — The number of Americans signing contracts to buy previously owned homes unexpectedly rose for a second month in October, suggesting the slump in housing may become less severe.

    http://tinyurl.com/2p64ua

  73. Anonymous

    Morgan Stanley joins Merril in saying Recession is US in now likely.

    http://www.bloomberg.com/apps/news?pid=20601087&sid=aFW130UXQBpk&refer=home

  74. robchipman

    Last week I wrote and Chip replied:

    ” “I’m under the impression that most observers recognize that the US is in a recession now, and we just have to wait for the numbers to confirm it.”

    To be in a recession the US would technically need to have two quarters of negative growth.

    Yet, the last quarter was a sizzling 4.9%.

    And so far for this quarter, productivity growth in November was over 6% — the best number since 2003, while the services sector (about 90% of the economy) continued to expand and the new jobs number for last month was triple analysts’ expectations.

    The US is going to slow, no doubt, but the recession isn’t here, if it arrives at all”.

    The US isn’t in recession yet, as Chip pointed out, but I think its clear that fear of a recession is common, as paulb’s link and other stories in the MSM indicate.

    When the fear is clear and present, what actions can we anticipate being taken (remember Bush’s move on sub-prime re-sets)?

  75. Brian

    B.C. housing starts remain strong

    VANCOUVER — British Columbians started construction on 3,718 new homes in November, which puts the province on pace to add 43,600 units to its housing stock by the end of the year, Canada Mortgage and Housing Corp. reported Monday.

    http://tinyurl.com/2rpbeu

  76. WoW

    Come on Rob, admit the truth (well, if you believe it to be the truth) – the market is showing definitive signs of slowing/cool down – can you at least admit that, even if in your view/it may be seasonal? Is the Alberta weakness starting to move West?

  77. Dyugle

    Well the BOC rate cut theory that I posted a while back has a buy side as well as a sell side. Buy after the BOC has been cutting rates for a full year. A hike or extended pause (at least 5 months) in the middle means you have to wait for them to start cutting again and then wait for a full year of cuts. This will not get you in at the bottom of the market but it will keep from buying in at the tops. I also have recently come into some money and will be watching the market and the BOC very closely for the next year.
    Good Luck.

  78. robchipman

    WoW:

    I think you’re assuming that I say what some other people think I say. You should probably pay a little more attention to what I actually write.

    First: I don’t put a huge store in seasonality. I think the rule, long term, is folowed as much in the breach as in theobservance. Currently the market is strengthing (short term), according to the daily numbers.

    Second: From a longer term viewpoint the market is weakening. That’s clear. YoY price growth is less. That alone qualifies as a weakening market.

    Third: High prices are the cure for high prices, and the market will change because it always does. That’s the truth, we’re seeing it, and its what I’ve said for, well, forever. “Admitting” the truth really doesn’t enter the equation.

    Fourth: I don’t think the US real estate market or the Alberta real estate market really effect us (which is not the same as saying that sub-prime related US recession doesn’t effect us; clearly it does). If Alberta or US weakness moves here its simply a case of our market showing the same symptoms as their market, not of their market causing our disease (and I’m not saying that you’re arguing the opposite – I’m just re-stating one of my views).

    I think we need to worry about US recession and any big shocks to our commodity economy. Happily (perhaps) the US is also very concerned about recession and the sub-prime fallout. They are taking some extraordinary action (as are others). In that respect we live in very interesting times.

    With the emergence of China and India, and a swelling of the global consuming population, we may buck the historical trend that has tended to grind our economy under the US’s. That’s purely speculative, but if our current dual economy emerges with a new, workable business model (hew wood, draw water, supply high quality products and let things like the Auto Pact hit the dustbin of history) we may actually succesfully break away from our over dependence on the US while still enjoying the benefits. Again, that’s all speculation.

    What does that mean for our market?

    First, for continued price growth we need a combination of a stronger economy, cheaper money, and more demand for housing. We’ve had all three in spades for a few years now, but as has been pointed out with employment, when it can’t go much lower the chances of it going higher seem increasingly likely.

    Second, for stable to stagnant real estate values we need a good economy and housing demand. Sales volumes can plummet. Interest rates can go up a bit. But we need to keep people here who need housing (if they’re not buying they’re renting).

    Third, if we see a big recession and higher interest rates, we’re in trouble.

  79. Tony Danza

    “With the emergence of China and India, and a swelling of the global consuming population, we may buck the historical trend that has tended to grind our economy under the US’s.”

    Rob I recently read an article (will post later) that said for every 1% drop in consumer demand from Europe or North America, China will see a 4.75% drop in their exports and nearly a full point drop in GDP. Granted this is only an estimate but I think highlights the precariousness of any argument that we’ve decoupled in any way from the US.

  80. Tony Danza

    From the FT, “Decoupling dies as half the globe hits crunch”

    http://tinyurl.com/3a428z

  81. blueskies

    good article TD

    Spreads on Euribor – the rate used to price mortgages in Spain, France, Italy, and Ireland – reached 93 basis points last week, a new record.

    this ands the spreads on LIBOR are the things to watch.

    we are nowhere near any solution to this mess!

  82. blueskies

    snick:

    find out the price history of said listing.
    i would be interested in knowing what it was worth in 2000-2001 before the madness started

  83. robchipman

    Sorry blueskies, but when Snick says things I don’t like I’m deleting him (and its not his comments about the market that get him axed).

    If he supplies the address I’ll let the post stand.

    I think I asked you this before, but if so please refresh my memory. Why do you care about 2000-2001 prices? Why not ’96 or ’90, for example?

  84. blueskies

    i remember 2000-2001 well, the prices i paid then were within the realm of reason ie cash flow positive with 25% down.

    apts in Yaletown were $250 sq.ft.

    maybe i’m being nostalgic or maybe i’m expecting the market to revert to those magical prices 🙂

  85. Snick

    blueskies (and Rob, as if you didn’t know) FYI,

    The house I mentioned earlier that has a basement suite, that went from an ASKING price of 498k in July to a SELLING price (after TWO reductions) of 405k is lecated at…

    1558 Shaugnessy St. in Port Coquitlam.

    The MLS #V666454

    Happy now, Rob?

  86. Domus

    Quick question (off topic, sorry): any reader over here is short on banks/financials ?

    I am really curious about it: today there was a sequence of really bad news (UBS writedowns for 10 billions USD, WaMu in deep troubles, MBIA close to downgrade, Bank of America liquidating a cash fund, Societe General having to bail-out a SIV) and yet financials did not get hammered, in fact they went slightly up.

    Could denial be more obvious? Answers please…..

  87. Jeff

    Snick:
    try again pal… that place does not exist

  88. Annon

    Domus, your question is for sure not off the topic regarding RE in general. Again, the devil is in the detail.

    http://tinyurl.com/2sgcjw

    In short, UBS and a couple of other banks got cash infusions through selling of either common stocks or other assets. This allows some banks to maintain their AAA rating as a bank. This is important because if that AAA status is gone, so goes their ability to get more money and breaches many terms on current debts – this means they have to liquidate to come up with enough cash in order to make their lenders comfortable.

  89. Jeff

    Snick:
    my apologies I’m a condo guy so I forgot to look under detached and by the way the ML# is V660454.

  90. blueskies

    domus:

    my impression is the bad news is already priced in and when it is quantified you have a market price rally. i know little about the markets, if you can’t run with the big dogs you have to stay at home on the porch (and blog)

  91. Jeff

    Domus:
    The Fed is cutting rates tomorrow. 25-50 bps. Look for market reaction after the 2:15pm announcement.
    Banks are going to get killed in the next 6 months… right now there is minor speculation keeping them afloat.

  92. Annon

    Domus, just in case this wasn’t clear in my previous post, the infusion of cash to help some banks maintain their AAA status is the good news.

  93. WoW

    Rob, thanks for your detailed reply. You’ve been consistent and rationale with all of your comments, since I started following the blog. That said, I can’t really discern your outlook – seems like a lot of if, when, and hows…perhaps that’s fair, if that is how you see it. That said, as a future buyer of a low to mid-seven figure home (for cash), I do feel that we need to look for leading indicators, as if we ‘bears’ (read: rationale buyers) want to support our view on waiting things out, we can’t wait for the job losses, recessions, etc. – we need to make our decision based on leading indicators. I.E. US house price decimation (following years of ‘its different this time’), Alberta (easily the strongest economy in Canada RE weakness (which seems to be persistent, don’t you think?)), our economy being predicated on construction employment (if RE construction softens – then what are the supporting pillars in this economy?), UK (ten year RE upswing) heading into a slippery downswing, and consumer confidence waning (I was just in London, everyone (EVERYONE) was crowing about how much their houses have gone up – even the shoeshine boys and cab drivers – this is a leading contrarian indicator – same thing here in Vancouver – when everyone (well, almost everyone) is excitedly making mulla, and crowing about it to everyone they meet – the end is close at hand)…and to me, the most important factors are the P/E multiple – they are negative (cap rates are extremely low), also, and most important to me – and…ITS NEVER DIFFERENT THIS TIME – NEVER, NEVER, EVER NEVER.

    Rob, thanks for giving all of us a place to share thoughts, and for your detailed and thoughtful responses. I’ve met many realtors (and other salespeople), and few of them seem to be more than stuffed shirts, smiles, fake tans and verbally committed to ‘helping people realize the dream’, yadda yadda yadda…whatever that’s worth. When I do buy, and I hope its not to distant into the future (after a, say, 25% price drop), I’m using the services of the most thoughtful/knowledgable realtor I’ve come across. I look forward to working with you – once this becomes a BUYERS market.

  94. Domus

    So, there are two views about banks/financials:

    1) the risk is already priced in;

    2) expect a further deterioration.

    I am with the second view for a reason: if you look at any index of banks/financials, we are still above levels registered before last August seizure. Something’s gotta give……

    There is always a 3rd option, though: banks are going to fail, but they are rescued at the last minute by an industrious government appealing to the greater good (and paying with tax payers money – both directly and in terms of time/resources employed to fix things).

    Have you ever thought about this one: we live in a version of capitalism where there are private returns and public losses…..

  95. Annon

    Domus, that’s exactly what I have been trying to tell people. But most of them are just “well, life seems to be ok… we have jobs, can afford things …” In a way, it’s ok because most of them won’t understand the real implication until things become really bad. So we can wait for things to get really bad and maybe all of a sudden more people are impacted and are motivated to try and set thing right. I don’t know if it’s just laziness or ignorance but it’s the way it is right now.

  96. ObserverX

    “… but it’s the way it is right now”

    I think it has ever been thus.

  97. whybuywhenucanrent

    Doubter–

    2 scenarios–

    Outlying areas: go to http://www.zillow.com and track real estate prices for Merced, CA for the last ten years. Prices peaked in early 06 around 325K, are now down to $225K. (The 2002-2006 portion of the line is incorrect, it was a steady climb, steepening in 2005, but house values didn’t “double overnight” as the graph shows)

    Just for kicks, look at 3134 Gary Ave Merced CA 95340 — sold for $360K in Jan ’06, now for sale at $200K. Down almost 50% in 2 years!

    Vancouver proper. track prices for San Francisco for the last ten years. Hit $825K in late 2005, has stayed there ever since.

    But, Zillow’s #s can be deceiving. Look at 1466 23rd Ave San Francisco CA 94122 . It sold for 900K in Dec 05, zillow values it at 1.1M, but it’s for sale for $750K. Only down 17% in 2 years.

    So, if Vancouver is anything like California you could lose your shirt if you buy some overinflated property in the Fraser Valley that doesn’t have historic high value. But if you buy something in Vancouver proper you might only lose your shirt, not go bankrupt.

    My physiotherapist was buying houses in California a while back, then was frantically selling them in fall ’05. One in Merced lingered until winter ’06 and he cut the price twice before it sold. Now, just 2 years later, he’s back in CA buying foreclosures. I can ask him about the Vancouver market if you’re interested :^)

    Whybuywhenucanrent!

  98. coco

    A friend of mine sells collectibles on Ebay. (these items are highly collectible and always sell well) Should I tell what the U.S. consumer is doing lately? The same thing I noticed in NY during the after Thanksgiving sales…..looking, looking, looking, not buying much or nothing at all.

  99. coco

    Bloom is off the boom in Alberta’s formerly red hot economy. Pockets of trouble starting to appear all over once you look past the oilsands

    http://tinyurl.com/2pwx4e

  100. coco

    “Some observers, however, note that people’s perceptions of wealth and economic security may be clouded by strong economic conditions in the present and little consideration has been given to what could lie ahead.”

    “Global warming has led to a surging population of the Mountain Pine Beetle, for example,” said Lawrence Berg a professor of community and culture at the University of British Columbia.”

    “Some suggest these beetles will have destroyed 90% of BC’s forests inside 10 years which could cripple the economy in B.C. but people don’t think about that.”

  101. coco

    Subprime mess gets murkier at CIBC

    http://tinyurl.com/3x5wkh

  102. Anonymous

    Dodge sees loonie in mid-US90 cents

    http://tinyurl.com/2gqyo8

    But he repeated in his speech that the credit crunch – along with a weakening U.S. economy – continues to pose a threat to Canada’s economy.

    “These tighter credit conditions have come as financial market difficulties have intensified over the past few weeks and as bank funding costs have increased globally,” he said.

  103. coco

    Credit crunch crashes private jet market

    http://tinyurl.com/33jr8h

  104. coco

    Vancouver employers expect a solid hiring climate for the first quarter of 2008 — with 35 per cent expecting to hire more workers, while just 10 per cent plan to reduce their workforce, according to a Manpower Inc. survey.

    http://tinyurl.com/3b9a93

    The remaining employers expect to maintain current staffing levels or are unsure of their hiring projections.

  105. ceejay

    I was trolling this morning for mutual funds on the CIBC website. I took a look at euro index, and clicked the link for top holdings in the fund. There weren’t any. The manager is 100% cash and short term securities. That’s a bit scary…

  106. coco

    “With the emergence of China and India, and a swelling of the global consuming population, we may buck the historical trend that has tended to grind our economy under the US’s”

    a little too optimistic there given the numbers…..

    76% of Canadian exports go to the U.S.

    70% of the U.S. economy is consumer driven
    (highest in the world)

  107. coco

    ceejay,

    CIBC is financial trouble.

  108. ceejay

    Coco: no doubt. But for a fund manager to go with 100% cash or cash equivalent….either he/she expects the market to tank…or maybe those assets are being “reinvested” in CIBC securities…

  109. blueskies

    maybe those assets are being “reinvested” in CIBC securities…

    the banks’ hunger for capital and a solid cash position won’t improve the credit markets, even if there is a rate reduction today…….

  110. househunter

    coco wrote:

    “a little too optimistic there given the numbers…..

    76% of Canadian exports go to the U.S.

    70% of the U.S. economy is consumer driven
    (highest in the world)”

    -I agree. We are too linked into the US. In a way I think weakening consumption could give us a boot in the butt to find new markets. Status quo will keep us intertwined. We need to a backdoor escape and that is via diversifying our trading partners. I ASSUME that the deep pockets in our country are attempting to get into newer, emerging markets. At least I hope they are. That would make our commodity based economy more stable than before. My 2 cents … I’m not an economist as you can see.

  111. coco

    Ceejay,

    Higher cash positions in mutual funds other than the typical 2% – 5% range is a signal of financial turmoil or missed buying opportunities. I would lean towards financial turmoil in the credit markets for higher than average cash positions.

  112. househunter

    Edmonton’s real estate prices are still dropping according to http://www.edmontonrealestateblog.com. But they have tonnes of jobs and more coming. I’m tempted to get into that market because fundamentals are much better than ours. I will be waiting until spring to see if their inventory starts to decline. Right now its very high and as a result the $ are doing down. Any thoughts on buying rental property over there?

  113. coco

    CIBC now rumoured to lose 3 billion in future subprime writedowns.

    Future Northern Rock?

  114. coco

    Canada supplies more crude oil to the U.S. than Saudi Arabia and Iraq combined.

    Canada supplies 85 per cent of American imports of natural gas.

    Canada supplies one-third of the uranium used in commercial reactors in the U.S.

    Last year British Columbia exported $31 billion in goods alone, the equivalent of more than 17 per cent of provincial domestic product, and that doesn’t include services which currently make up three-quarters of the economy.

    “Over 60 per cent of those exports went to the United States, your largest export market by far,” he told the board of trade.

    “Every year, around the clock, about $2.25 million in exports cross the border from British Columbia into the United States, exports that create tens of thousands of well-paying jobs.”

  115. paulb

    Househunter

    Don’t use our market as a basis for ‘fundamental values’

  116. coco

    Exports (2006)

    British Columbia to:

    Mainland China 1,485.9 billion

    India 345.9 million

    Hong Kong 199.2 million

    Japan 4,706.8 billion

    U.S. 20,463.6 billion ***

  117. coco

    B.C. is very dependent on the U.S. for its exports. This is why finance minster Carol Taylor downgraded growth in 2008 for B.C. twice already and raised concerns that growth could be downgraded once again if the U.S. goes into recession.

  118. coco

    Between 2002 and 2006, the United States’ share of Canadian exports fell from its peak of 84% to 79%. During the first seven months of 2007, this share declined to 76%.

    Canada is very dependent on the U.S. for its exports too.

    U.S. sneezes hard enough, we will catch a cold.

  119. coco

    Forest products account for 40 per cent of the B.C.’s total exports

    followed by:
    Mining
    Fisheries
    Energy

    In 2006 housing was the driving force behind the BC economy.

    BC economy is also very dependent on tourism.

  120. Annon

    Just got out of my RBC Select Choices Balanced Portfolio. Could be a mistake if the holiday season retails sales turn out to be really strong…

  121. coco

    Annon,

    A lot of Christmas sales 30% – 40% already and U.S. price matching to fend off cross border shopping. Retailers will need volume to make up for lower prices. Will they get it is the big question.

    I noticed that retailers ordered about 50% less Christmas stock (decorations, trees, lights, etc) this year compared to last year. A lot of it is on sale 30% to 40% off and doesn’t seem to be moving very well. Not sure if that is due to the cross border shopping craze or if the BC consumer is actually slowing down?

  122. blueskies

    TSX almost 100 points down on 25 basis point drop…… not happy?

  123. jesse

    “Not sure if that is due to the cross border shopping craze or if the BC consumer is actually slowing down?”

    Does it matter? With either scenario, local businesses are in trouble.

  124. Tony Danza

    househunter wrote:

    “-I agree. We are too linked into the US. In a way I think weakening consumption could give us a boot in the butt to find new markets. Status quo will keep us intertwined. We need to a backdoor escape and that is via diversifying our trading partners. I ASSUME that the deep pockets in our country are attempting to get into newer, emerging markets. At least I hope they are. That would make our commodity based economy more stable than before. My 2 cents … I’m not an economist as you can see.”

    The problem with a resource based economy is that you are selling commodities and any cost above the cost of extraction of the commodities makes you less competitive. The reason most of our commodities and manufactures go to the US is the low cost of transport. If you had to ship the same commodities to Europe or India or anywhere else you would lose any competitive advantage you have over countries like Russia or many in eastern Europe (or Oceania, Africa, etc…) who are much closer to those markets. Not to mention most countries have a huge labour cost advantage over us.

    Get used to Canada being subject to the ebb and flow of the US economy, it will be that way until we move away from a commodity based economy.

  125. Annon

    coco, thanks for the input. If that’s the case, I suppose a move to cash is a good thing. For sure the market is moving a lot since August this year and it does not seem things will improve significantly soon. I think I park in some income funds for short term.

  126. Tony Danza

    Annon wrote:
    “Just got out of my RBC Select Choices Balanced Portfolio. Could be a mistake if the holiday season retails sales turn out to be really strong…”

    “I think I park in some income funds for short term.”

    Your bank/investment advisor must love you, nice churn!

  127. Annon

    Tony Danza, it’s a self-directed account with no administration fees. So I don’t know if they are making more money from my tradings than they would otherwise. Commission is free if positions have been held for more than 3 months and this is my case too. I think it’s important to know that when market moves a lot, commission fees are not important at all when you need to sell to protect your capital that is significantly higher.

  128. Annon

    and also I meant to say “I think I WILL park in some income funds”.

  129. Priced Out

    Rob,

    Have you ever personally paid extra for real estate because you felt sorry for the seller?

  130. robchipman

    Priced Out:

    I wouldn’t use the term “felt sorry for”; I think you’re referring to my comments about slashing hard on price when buying. Personally I don’t tend to push hard for low prices (and I’m talking about stuff I buy for myself). I get an idea of what I think its worth, and if the seller is asking close to that I pay it. Its very simple negotiation and two of the places were bought on a handshake with the paperwork completed afterwards. In other words, I didn’t feel sorry for the sellers, but I didn’t grind the crap out of them, either.

    (One of my tenants is an elderly woman on a fixed income and I haven’t raised her rent in years. I don’t feel sorry for her, but she probably needs the money more than I do, so I leave it. Given increased taxes, strata and special assessments I’m probably losing a little, but CRA helps me on that score. Does that count?)

    I have seen sellers sell to a buyer for less than they wanted to receive based on compassion for the buer. I’ve also seen sellers sell to one buyer for less than they would accept from another buyer based on non-monetary factors – its far from uncommon. The money is only one part of any deal. Why else pay a kid on the street corner $5.00 for some chocolate covered almonds?

    If money (as in cash) is your prime motivator as a buyer, and its also the seller’s prime motivator, you’ve got a challenge. But, if one of the parties will accept a lower price for some sort of non-monetary or non-cash consideration it becomes easier to make a deal where both sides win.

  131. Priced Out

    I know a few long-time renters who are renting below market. There is a certain value to a tried and true renter, especially one who is easy to get along with. As you say, this also helps your taxes.

    We’re not talking $5 boxes of almonds, but $500,000 boxes for people. I don’t think you are any more willing than I am to part with four or five figures without a tax receipt.

    This is a market where the buyer has to minimize the damage if they choose to buy. When I buy, I’ll happily make an affordable donation to the Sally Ann. Thats after I save every penny I can on the purchase.

  132. robchipman

    Priced out:

    You’re hearing, or disagreeing, with things I haven’t said. When you’re buying or selling a house you don’t get a tax receipt. All my tenants are tried and true, and easy to get along with, or they cease being my tenants. I give a discounted rent to one because they need the money more than I do and I can handle doing it. I feel better knowing that I’m giving her a break even though it costs me cash. I think its a good trade. I’m not unique that way, trust me.

    Here is what I am saying: deals live and die on more than just the cash. Anyone who thinks that you’re limited to only the cash will lose a lot of deals that could come to fruition as win-win deals. Some people value non-cash considerations more than cash. I’ve seen it time and again. Its why buyer agents (good ones) try to personalize buyers (bad ones just fax the offer).

    You may not be one of those people. If so, concentrate on cash for you, and non-cash for the other side. You’ve got more chance of success. If you’re dealing with your mirror image, you’ve got a challenge. If you’re dealing with me, you might be able to get a low price. If you want to slash hard, successfully, deal with someone more like me and less like you.

    If you think everyone is motivated by the same thing…well, you’re sorely mistaken.

    I am curious: I don’t know you, or what you do, and I wouldn’t make assumptions about your spending habits unless you gave me a hint. Clearly, you’re motivated by cash when you buy (or at least you think you are).

    Now, you don’t know me either, aside from what I’ve shared with you. You do know, for example, that I own several rental properties that I could sell at a profit now, but I’m holding, and they arguably have low returns. You probably know that I’m renovating a house in North Van, and doing it myself, and building it on a custom basis, rather than building and seling a spec house and making a large tax free profit. Based just on those two things, why would you conclude that I’m less willing than you to part with a few grand for whatever? You can even say I’m stupid for doing what I do, but you can’t disagree that I recognize a cash advantage but still go the other way.

    Tell me this: if you knew that the seller was a widow or an orphan, and you knew that you could get them over a barrel and save yourself a buck, would you do it? After all, that’s pretty much what you’ve said, right? And I’m not saying there’s anything wrong with it. But not everyone does it.

  133. Priced Out

    First, I probably wouldn’t even know much about their personal circumstances. What I’ve learned from being involved in couple of real estate transactions, is RE agents rarely disclose some details unless both parties actually want them shared.

    Its pretty much impossible to have a seller over the barrel in this market unless they bought very recently and overpaid, or they blew hundreds of thousands of dollars in equity. Neither are my problems.

    The only way they could end up “over a barrel” is if I had used some devious method to gain their personal information, somehow prevented other potential bidders from knowing about it, and then manipulated the situation so they were forced to sell way below market. I wouldn’t do that, even if I could.

    If at some future date, in a extreme buyers marker, what if I were the only bidder to free a widow or orphan from a huge burden at a difficult time? I imagine I’d do them more of a favor by negotiating my optimal price and buying the house than if I said “I’ll walk away from this because I don’t want to ‘hurt’ them by buying their house at such a cheap price.”

  134. Priced Out

    If I wasn’t living in such an expensive city, I would probably have other considerations. However, I have to be entirely practical. There is no other choice.

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