Wednesday and Thursday Numbers

There were 74 new listings today and 112 sales, for a sell/list of 151.35%.  Inventory was 9,345, while over 90s were 2,845 (30.44% – a definite high!)

Yesterday there were also 74 new listings and 89 sales, for a sell/list of 120.27%.

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376 Comments

Filed under Daily Numbers

376 responses to “Wednesday and Thursday Numbers

  1. Those numbers just kind of make me laugh. Am I going crazy do you think?

  2. Jeff

    2008 forecast:

    I love it… 2008 is going to be another great year for Realtors… properties are going to be selling like hotcakes… the smart money will be exiting the market like gangbusters selling to every last sucker in town. I plan on making a killing again.

    The first half of 08 will see flat prices… by the end of the year the market will be down 10% in price and this bull run will be over. I plan on travelling the world for 6 months (November 08 – April 09) while everyone is in denial and confused. Then I’ll be back to sell people out of a spiraling down market.

  3. Mightymouse

    Go! Mortgage rates! Go!

  4. -A-

    With such a high sell to list ratio, I would imagine prices are going through the roof.

    Rob, there must be a lot of bidding wars and sales well over list price right?

  5. Mightymouse

    Rob’s numbers (Friday, December 22, 2006)
    “There are 9,825 active listings in my target area, of which 3,191, or 32.48% have been on the market at least 90 days.”

    Let’s not get our knickers in a twist! Things look allot like they did last year…

  6. AmPa

    mwahaha! It is all going to plan.

    The prices will rise forever. It can no longer be stopped.

  7. Strataman

    AmPa ” It can no longer be stopped.” Nope your right it could be (unlikely) but possible that there are unlimited greater fools,. You might win! 🙂

  8. blueskies

    mwahaha! It is all going to plan.

    some plan:

    uptick in CDN mortgage rates despite a quarter point cut in BoC prime

    massive negative sentiment from south of us

    warnings from our own gov’t of a slowdown

    metro Vancouver inventory overhang and they just keep on building

    newly minted landlords discovering the joys of being on call to some low brow tenant that insists on having their rent subsidized.

    running out of greater fools to keep the party going…….

  9. News Flash

    “With such a high sell to list ratio, I would imagine prices are going through the roof.”

    I agree

    “running out of greater fools to keep the party going”

    Sales and inventory tell a different story.

    Sorry if those comments hurt your feelings A, Domus & abc. Don’t worry, if I see you in the school yard I won’t pull the ball away just as you are going to kick it…again!

  10. mike@gmail.com

    Inventory is dropping like a jumper with rocks in his pocket off of the lion’s gate.

    What’s up with that?

  11. News Flash

    “mwahaha! It is all going to plan.
    some plan:
    uptick in CDN mortgage rates despite a quarter point cut in BoC prime”

    Last time we saw an uptick in rates (early summer) the market went crazy with the pre approvals trying to get in before their 90 day rate guarantee expired. Combined with low inventory and it looks like another hot spring market.

    Don’t you bears EVER learn.

  12. Johnnyrent

    Actually News Flash, I think some of us bears have learned from history, which while not repeating itself exactly, always rhymes.

    Remember what Rob says and what has been played out in almost every other heretofore impervious market in this Continent. Markets always change, and the cure for high prices is high prices. In other words, in historically frothy markets like Vancouver, prices will keep climbing until they drop off a cliff; ergo the market will have changed. Your time to learn will come – longer than many of us predicted, but sooner than you think.

  13. Domus

    Johnnyrent,

    I like the way you think (and the way you write it…..).
    Was going to write exactly the same, but couldn’t have said it better.
    This market has shown more resilience than ever before. I guess the downside will also be something to remember.

  14. bearette

    Slimy realtor of the year award goes to Jeff.

  15. coco

    Harper Rejects Debt Bailout, Putting Pressure on Canada Banks

    http://tinyurl.com/2r2ozk

  16. coco

    Dwelling: The Housing Market
    Will 2008 bring the downturn?

    http://tinyurl.com/ypobn9

    “Alberta and British Columbia are now full of swagger, apparently convinced that economic swings are things of the past, that our boom will continue forever because of Asian demand for the raw things we pump, mine or cut down.”

  17. coco

    B.C. hit hard by rising loonie

    http://tinyurl.com/ywwjzn

    (refresh if you have a message…article is no longer available….link is kind of touchy)

  18. blueskies

    Western Canada is too blessed and optimistic a place

    leavened with myopia and hubris…..

    but pain is a great concentrator, some of these lessons will never be forgotten

  19. blueskies

    from the article:

    Western Canada is too blessed and optimistic a place

    leavened with myopia and hubris…..

    but pain is a great concentrator, some of these lessons will never be forgotten

  20. coco

    Can you afford to buy a house in your city?

    A worldwide survey says forget about Vancouver and Victoria, consider Winnipeg and Regina—and Kansas City and Buffalo are reasonable too.

    http://tinyurl.com/2hzvru

  21. coco

    The International Monetary Fund revised downward its 2008 economic growth forecast for Canada on Wednesday due mainly to the slowing economy of the United States, its largest trading partner.

    http://tinyurl.com/244r3l

  22. coco

    On the economic slowdown: Easy to be queasy

    After seven years since Canada’s last slowdown, will 2008 be a year of decline? And how should Canadians prepare for the possibility of a weak economy?

    http://tinyurl.com/2hapy6

  23. blueskies

    coco: good mining today!

    from the Victoria TC article:

    Pastrick said. “Relying more and more on our domestic economy makes us a bit more vulnerable because at some point you would think there’s enough infrastructure and housing to accommodate needs. Lack of export growth really does limit our economic performance.”

    this one is a keeper

  24. coco

    Blueskies,

    Not mining, just economic news that passes by, sometimes good….sometimes not so good.

  25. coco

    Canadian Economic growth tops forecasts

    http://tinyurl.com/3d8lpn

  26. blueskies

    complacent canadians complaining re: climate change?

    http://tinyurl.com/2h5hxk

  27. Newcomer

    “Can you afford to buy a house in your city?”

    Brilliant! Vancouver way less affordable than NYC and just slightly more affordable than London England, both of which are at the peak of their own crazy booms. That makes such total sense.

  28. whitebear

    Who cares if there will be an economic slowdown. It only affects the Eastern provinces. The western provinces will continue to be buoyant since oil will keep going up and the mining sector (especially the precious metals) in BC will carry the day forward. If anything, a recession in the Eastern provinces is beneficial to the western provinces since it will prompt the central bank into another reckless course of money printing. The game is to position yourself under the helicopter for the newly minted dollars.

  29. Jeff

    bearette:
    dumbest person of the year award goes to you.
    I guess you want prices to go up forever so that it costs more to buy what you want. Do you also want the price of cars, milk, and bread to increase?
    Wake up stupid.

  30. D

    Okay, I’m perplexed. How is it that inventory is dropping, and sell/list so high, yet over 90s are up?

    On another note, if the U.S. situation was precipitated by the subprime mess, what does that mean for Vancouver, where we don’t have such lax lending practices?

  31. Jeff

    D:
    are you kidding us?

  32. blueskies

    no he’s not!
    he’s in jolly ‘ol England
    http://tinyurl.com/2ejx4m

  33. blueskies

    if the U.S. situation was precipitated by the subprime mess,

    the collapsing house of cards is what precipitated the subprime mess, and eventually the credit bubble …..

  34. Jeff

    “experts kept expecting prices to tumble, but it wasn’t until recently that they dropped substantially, according to Mark Zandi, chief economist for Moody’s Economy.com. “There has been a sea change in seller psychology since the subprime shock this summer.”
    http://money.cnn.com/2007/12/19/real_estate/steeper_price_slump/index.htm?postversion=2007122109

  35. Strataman

    D “where we don’t have such lax lending practices?” CMHC taxpayer quaranteed loans, if banks can’t lose why would they care about qualifications to pay? If you lent to some one you knew was a high credit risk would you not lend the money if the government of Canada quaranteed or co-signed?

  36. BOBBYBEAR

    A person who uses CMHC…and gets no downpayment, no principal, 40 year mortgage…is that investing or gambling?

  37. ryan dobos

    Inventory is dropping because there are fewer listings at this time of year due the holidays, coupled with expiring listings that will probably be relisted in the new year.

    Over 90’s are increasing as there are fewer buyers coupled with overpriced listing’s.

    -A-
    December 20, 2007 at 7:06 pm
    With such a high sell to list ratio, I would imagine prices are going through the roof.

    Rob, there must be a lot of bidding wars and sales well over list price right?

    sales take a few weeks to process and if you look at the number of sales, 112 and 89 I dont agree that prices are going through the roof

  38. robchipman

    Johnnyrent:

    The market will change, and the cure for high prices is high prices, but my feeling is that the market is very complex. We part company when you say: “…prices will keep climbing until they drop off a cliff;” I’m not certain that the correction we see will be crashlike or clifflike. I beleive others here share that opinion, as in, slow decline in ’08, faster in ’09, moderating into a trough in ’10, etc, or those who forecast a stagnant market. I wouldn’t be too surprised by any development.

    Bearette:

    Nice shot. You get the The Joke Went Completely Over My Head award. Read a few of Jeff’s other comments. I think his tongue was so firmly in his cheek that he looked like a Toblerone commercial.

    Coco:

    Nice chart, and interesting numbers, but have you ever been to Kansas City? Trust me, Vancouver is different when we come to that 🙂

    On a serious note, if the problem becomes serious do you really believe the gov’t won’t either underwrite or require some sort of bailout? This has been a news item for only a short period, so a rejection by Mr. Harper now seems way to early to bank on. Lots of exposure in Quebec, which is swing vote central. I know he likes to stick to his guns, but that story merits close watching.

    D:

    Good stuff sells fast (like hotcakes); inferior product sits. There is a dif between todays buyers and those of yesterday, in that today’s are well aware of value (they have access to the knowledge and prices require them to sharpen pencils). I know this from pushing buyers on listings I’m trying to sell. At the same time buyers today do not see the world the way many on this blog do. Well priced listings get multiple offers and generate lots of interest. You can’t ignore that fact.

    Strataman:

    I think you know that even with a CMHC insured mortgage the bank loses somewhat. It reduces the pain, yes, and relaxes lending, yes, but its not quite like the US model. Many would agree that US lending was downright crazy without going so far as to say Canadian lending is reckless. I think our pain will come from the US lending fallout, not our own lending chickens coming home to roost.

    Bobbybear:

    JMHO, but a person buying a principal residence isn’t investing in 99% of the cases anyway; they’re choosing an alternate method to pay for their housing.

    Buy a rental with 0% down, 40 year am? If the numbers work, why not? There is an element of gambling, yes, but long term, not as much as short term. The rub, of course, is a 0% down that has numbers that work. If you see one don’t buy it. Call me instead :-)!

    -A-:

    Nice to see you’ve dropped the “pimp, chimp and gimp”. I’m not surprised to see that you’ve avoided the fairness in insult swapping question.

    What surprises me is that a guy who assumes he’s so smart can ask such simplistic questions. Sales are strong, as daily numbers show, but not astounding compared to, for example, last summer. With strong sales and growing over 90s just about anyone could figure out that those listings that do sell would demonstrate the characteristics of a strong sales market. From start of business yesterday to right now we’ve had 147 sales. 14.29% went overlist. DOMs for overlists was 16, vs. 40 for all sales, and price dif was +2.00%, vs -2.29% for all sales. That said, we won’t know what prices did this month until early January, and as I’ve already written, I expect to see price retreat for December.

  39. Strataman

    ‘”sales take a few weeks to process and if you look at the number of sales, 112 and 89 I dont agree that prices are going through the roof” IMHO these listings and sales are smart money getting out. Dumbmoney is waiting till April! 🙂

  40. jesse

    “On a serious note, if the problem becomes serious do you really believe the gov’t won’t either underwrite or require some sort of bailout? ”

    Governments hate bailouts because they annoy some as much as it makes others happy on moralistic grounds . That and it costs taxpayer money and that pisses off others that would not otherwise care. In the end, if they cost real money, they tend to alienate more than they end up appeasing. Governments still do them but the details make them mostly extraneous.

    Half the conversations I have are about how RE prices are “crazy”. Some say it will continue and others say it will drop but almost everyone agrees they’re “crazy” (whatever that means). Whether this is perception or reality is one thing. But if prices started to fall again after a massive runup I think most could justify it and IMO most would have a hard time paying for bailouts for those that bought at the peak with high leverage, shaky income, whatever.

    If credit/house price problems spread to Canada, watch for a “bailout” that has no major financial impact on the government’s books and therefore no major financial impact on the fallout.

  41. Priced Out

    “most would have a hard time paying for bailouts for those that bought at the peak with high leverage, shaky income, whatever.”

    These people can walk away.

  42. jesse

    “These people can walk away.”

    They can but many have bought a “home” and will not give it up easily. Also “walking away” is not without consequences.

    But I’m sure many in the US are wishing people would walk away more than they are! 🙂

  43. Jeff

    I got some more sleep… I will play nicely now.

  44. WoW

    Jeff, Rob – what are your expectations for Jan – will we see a massive runup in listings – or will the process be more gradual?

    I realize this is guesstimation, but you are in the biz, so perhaps you have a sense of it….

  45. Priced Out

    I heard that people walked away in the 80s, so unless the laws have changed, I can see it happening again. Even more this time because you’ll more people who are more underwater. We’ll see a lot of people who will be six figures under and falling. Its hard to imagine consequences worse than that.

  46. WoW

    AmPa – how is this good for the RE market? Its different here, right? We don’t need locals to buy RE, just rich folks from overseas, right?
    Ya, right!

    B.C. consumer confidence dips
    B.C. leads cross-Canada plunge in consumer confidence
    Michael Kane, Vancouver Sun
    Published: Friday, December 21, 2007
    Consumer confidence is down across the country with the most significant plunge occurring in British Columbia, the Conference Board of Canada said today.

    The board’s monthly survey shows confidence plummeted 11.2 points on the West Coast where consumers are the least likely to say this is a good time to make a major purchase such as a house, a car, or other big-ticket items.

  47. WoW

    Hey, AmPa

    If someone took out a 40year mortgage, with zero down, in September, and is now down 5% (say, 8% with realtor costs), should they flip it for a profit now, or wait until spring?

    Please, your insights are most invaluable. Your logic – well, that’s another story…

  48. mk-kids

    Don’t forget folks that Rob’s numbers nor the MLS show new inventory which seems to be tanking. REBGV released their starts/ completions stats and they tell a different tale. Mohican’s has posted the stats (and some predictions!) on his site:
    http://langley-financial-planning.blogspot.com/

  49. hello

    it’s good to know that both bears and bulls agree that canada also has a problem now

  50. hello

    From canada is different to BC is different to Vancouver is different to westside is different, that takes time but finally they are all the same, believe or not..

  51. blueskies

    and just when you thought it was safe to go outside….. more collapsing RE in the hood:
    http://tinyurl.com/2xdqaa

  52. Robert

    Hi All,

    I just moved from LA California to Vancouver and see economic conditions are more favorable North of the border.

    Here, there is an inflow of immigrants, who bring their money and skills. There is a strong labor market, shortage of skills and a buoyant job market. Also There is no sub-prime mess in Canada.

    Personally, I do not a RE meltdown in Vancouver. Please convince me otherwise if I should delay purchasing a residence here.

    What are nagging and crying for RE meltdown here. What are the reasons? Am I listening to bunch of loosers here?

    Thanks

  53. A Looser

    Looser is as looser does.

  54. WoW

    You should buy Robert, clearly you are a born winner. I’m surprised that you are doubting yourself.

    40 year mortgages with zero down (and fierce competition between lenders to get dollars into borrowers hands) have been the norm here for centuries, and therefore have not had an unusual impact on our RE. In addition, spending for the Olympics is something we do all the time, so don’t look at all the infrastructure spending (or related tax bills) as unusual. It won’t impact a born winner like yourself. Thankfully you left that mess in the US behind you, all that nagging talk about fundamentals, and overbuilding, and sub-prime. Do you work in CIBC’s structured finance department?

  55. robchipman

    Jesse et al:

    I’m not talking about government bailing out Vancouver area real estate value losers. I’m talking about the ABCP losses, with much of the exposure in Quebec. The government won’t do squat about the real estate market here.

  56. Johnnyrent

    Rob

    The cliff comment (as in dropping off) is relative to the time perspective. Looking at a chart three years from now, it may look cliff-like. Over the short term it will be more of a gradual slope.

  57. jesse

    “I’m talking about the ABCP losses, with much of the exposure in Quebec.”

    Hey Rob – a bailout is certainly possible. I don’t know how widespread ABCP is held by Quebec voters specifically. My feeling is the Tories are in tough in Quebec regardless of the size of any bailout or other pork products they dream up. Also if the bailout is focused on Quebec it has the potential of backfiring in swing provinces like Ontario and the Maritimes (and to a lesser extent BC). Also a vote-pandering bailout will not help the overall credit market as I bet most of the stuff is held by voters in non-swing ridings.

    That said, I wouldn’t be surprised if you’re right 😉

  58. robchipman

    Jesse:

    I think its extensive in Quebec (the original planned solution was called the Montreal Plan or something, I believe,with Purdy Crawford et al) Additionally, the Caisse apparently has huge exposure. The fact that the PM is saying he won’t do a bail out indicates that the problem is big enough here to get put on his agenda by his advisors. It may end there, but recall that Bush took some action earlier in the month in a related fashion.

    You’re right that the Tories are in tough in Quebec – I think Quebec is everyone else’s (Bloc, Liberals, even NDP) to lose before its the Tories to count as anywhere near safe, but with the West and Quebec they can govern, just like the Libs did with Ontario and Quebec. (On the other hand, this minority is going nowhere in the near future, so why should the Tories risk something huge to gain a few seats?) Only time will tell.

    Johnnyrent:

    For cliff I think ’81/’82. Half value lost inside a year. I don’t think we’ll see that. I’m feeling now the way I did last year at this time: really questioning if we’ve reached the top.

  59. blueskies

    Am I listening to bunch of loosers here?

    yea we lost out on affordable accommodations
    but by all means buy in…. always looking for a greater fool… mebbe you could start a diary to keep track of what your gains and losses will be..

  60. tqn

    The greater fool theory has been around since the run up. Really, are only fools buying houses, and smart money sitting on the sideline, or scaring getting into the market, or renting with million of cash in the pillowcase? Can’ t say it doesnt happen at all, but, it’s something to think about!
    Have a good winter break, everyone. And yes, that includes you, -A-. 🙂

  61. Snick

    “Am I listening to bunch of loosers here?”

    Are you for real?

    Doubt it, myself.

  62. $fromA$ia

    RE is a good investment long term.

    Maybe over the next 70 years instead of 30.

    There will be a dip ahead, it might take decades to recover to todays values.

  63. Snick

    “I’m feeling now the way I did last year at this time: really questioning if we’ve reached the top.”
    – Rob

    The “top” has come and gone and even you know it. Quit being so cagey.

  64. Domus

    One word of warning for the bears:

    lately I read more and more comments implying that in 1 year it will be possible to buy homes for cheap in Vancouver. However I believe that, as the way up lasted years and moved incrementally, so will be the way down, at least to a certain extent.

    So let’s do some numbers:

    in California there were 3 to 4 years with average appreciation between 10 and 15 percent. There was a 6 months interval with flat prices and then the downside started. Now we have many areas with negative year on year price growth. Probably, based on what I read, the discount over the least 12 months is about 10%, excluding inflation. I think this is just the beginning. Nominal prices will go down at least another 12 months over there. Then they might settle and stay flat for the next couple of years, letting inflation eat the difference.

    So, if you really want to buy at the bottom, do not expect the bottom to arrive before 3 to 4 years from now. Housing cycles, as many posters have said before, are slow train wrecks. You know where things are heading but it takes a long time to get there.

    I would still not advise people to buy right now in Vancouver: risking to be wrong (as it happened with my horrible timing skills in the past) I would say that we have already hit the flat (zero-appreciation) patch. This will probably last through the Spring and Summer and will be accompanies by decreasing volumes of sales. In late summer 2008 I would expect to see initial cuts on nominal prices. By the Spring 2009 it will be clear that the market has turned: prices will go down more substantially. If this turns out to be not too far off, then the first real ooprtunities to buy at a substantial discount in good areas won’t happen before the late summer 2009. By the time the Olympics hit town, there will be plenty of good business to be made.

    As you see, this is for the patient ones…..but then again, what isn’t in life?

  65. paulb

    The rebgv numbers are up on my new webiste.

    We have daily, weekly and monthly numbers for the entire REBGV. Updated every day. It is not perfect but will improve with time.

    Also inventory charts for each sub area in the REBGV. These go back 3 years each. If your interested please come by. It will be interesting to see where the inventory goes in the new year.

    http://www.northshoreproperties.ca

    Come say hello on my blog. It won’t be like this place but I will try to add some content.

  66. Domus

    good stuff paulb……it’s strange to put a face on a blogger……

  67. robchipman

    Paul -nice work!

  68. Johnnyrent

    Rob

    Agree, I don’t expect an 81/82 type crash. I expect something in the 30% range over three to four years with most of that occuring in late 08 through early 10. My two bits worth.

  69. Domus

    Johnnyrent:

    including inflation, I expect the real adjustment to be well in excess of 30%. Usually adjustments are proportional to the szie of the run-up. This was a big one by any measure.

    I do agree with the timing. No large savings before Summer 2009.

  70. -A-

    “Personally, I do not a RE meltdown in Vancouver. Please convince me otherwise if I should delay purchasing a residence here.-Robert”

    Robert, there has never been a better time to buy in Vancouver, and in fact there is a very narrow window of opportunity to buy at these bargain prices.

    You are not the only Californian immigrating to Vancouver, in fact (and it may not yet be reflected in the official stats just yet), 35,000 RE investors from California alone, per month, have been pouring their money into Vancouver’s white hot real estate market.

    A truly diversified and buoyant economy, tropical sunny weather, coupled with the fact we are a world caliber IT, and financial center makes it a logical destination for the US Real Estate Refugees.

    Don’t waste time on blogs Robert, get moving this weekend and buy what ever you can possibly afford.

    You may not have a buying opportunity like this again.

  71. blueskies

    You may not have a buying opportunity like this again.

    also it is free advice, and you know what that is worth, from anonymous sources on the internet.

  72. -A-

    oh go on Blue…. I am not so “anonymous”

    But don’t you agree, that this is the best place on earth, and a good time to buy?

  73. Anonymous

    Coc wrote:

    “On the economic slowdown: Easy to be queasy

    After seven years since Canada’s last slowdown, will 2008 be a year of decline? And how should Canadians prepare for the possibility of a weak economy?”

    http://tinyurl.com/2hapy6

    I enjoy your postings Coco, both positive and negative. Thanks.

    I couldn’t understand why this one had such a negative headline when it had such positive observations about BC.

    For those who didn’t follow the link here are some of the more positive lines.

    “One thing to note is that economic growth will differ across the regions. The greatest impact of a U.S. slowdown will be on Ontario and Quebec; the resource-rich economies of both the East and West will continue to prosper from high commodity prices, even if those prices are weaker than today’s.

    Some good things in 2008 will help keep the Canadian economy chugging along at a low to moderate pace. Well-timed federal and provincial tax cuts will put money into the hands of consumers and businesses. Somewhat lower interest rates will make it easier for Canadian households and businesses to finance investments and spending on consumer durables. While 2008 will not be a great year, it will not likely be a repeat of 1990, when we had our last significant recession.

    Prospects for long-term world economic growth are pretty good as Asian economies continue to grow exceptionally over the medium term, driving up demand for Canadian commodities.

    So, if anything, the year 2008, going into 2009, will be a hiccup. The longer-term outlook will be far more positive.”

    Thanks again Coco, keep em coming.

  74. Geezer

    Sorry, that last post to Coco was me. I don’t post anonymously or under different names.

  75. blueskies

    But don’t you agree, that this is the best place on earth, and a good time to buy?

    great ambiance but better to rent…..
    save your pennies for a real buying opportunity

  76. News Flash

    Robert:
    “Personally, I do not a RE meltdown in Vancouver. Please convince me otherwise if I should delay purchasing a residence here.

    What are nagging and crying for RE meltdown here. What are the reasons? Am I listening to bunch of loosers here?”

    Most of the people here have been around posting the same thing for years on various blogs. Some have been sitting out since 2003 (or 100% appreciation) waiting for the RE market to collapse. Others have sold principle residences waiting for years for the crash that has not come. Quite sad actually. They only way they feel better about themselves is to deny what has happened and is happening around them. Many resort to insults and name calling when the strong fundamentals are pointed out to them.

    Are they losers? Well I guess it depends on your definition. Likely just people so risk adverse they cannot tolerate anything more risky than a GIC. They are so concerned at buying at the “peak” or before the “bottom” most will never buy real estate and continue renting or living in their parents basements. The real estate market in Vancouver has been volatile over the past 30 years and many people just don’t have the stomach for it even though it has been incredibly profitable for those that hold long term.

  77. blueskies

    Likely just people so risk adverse they cannot tolerate anything more risky than a GIC.

    speaking of risk averse…. today i checked out the cost of adding armour to our 2000 Dodge Grand Caravan…. it seems you can HELOC for funds but you’ll need a fair chunk of change.

    4 run flat tires…wow! the price of a small condo in Saskatoon…. who knew?

  78. WoW

    I lost out on buying nortel at $60, it doubled from there – before falling to 50cents.

    By the way, some of us losers have packed their leveraged monies into gold, uranium, copper, oil – things with basis supply and demand fundamentals – don’t worry, when rates go up, we’ll pay cash – at pennies on the dollar relative to current prices.

  79. A Looser

    You know, its funny how nasty the bulls are here. Why aren’t they just laughing and counting their money? Must be some nagging doubts and unlying insecurities leading to the desire to lash out.

  80. News Flash

    JR: “Actually News Flash, I think some of us bears have learned from history, which while not repeating itself exactly, always rhymes.”

    You thought you learned form history. You sold your principle residence 2 years ago and the market is still rising. Time for another history lesson although this one is going to be expensive for you.

    “Your time to learn will come – longer than many of us predicted, but sooner than you think.”

    I will take my chances on going against yours and the other bears preditions. After all you have yet to call ANYTHING right. If the future rymes with history it will be more of the same.

  81. WoW

    Robert – yes, you should be outbidding on all the multiple bidding wars you get into this weekend – get in now, before we run out of land! This is a once in a lifetime opportunity for a born winner like you, with your American know-how, this market will be a cinch to make money in. Yippeekiya – go get ’em tiger!

    I hope you win all the multiple bidding wars you get into, you American’s don’t like to lose, and America has NEVER had a year of national price declines in their RE – oops, I mean, HAD never, until recently – but its different here, we’ve never been hit with a real estate cooling, ever never ever never – the mountains, ocean and glaciers make us immune, as you are aware, being the brainiac that you are.

    Hmm – has gold gone up in the past 5 years? How about uranium? Is oil up 50% this year? Don’t worry, you leveraged brainiac, you can’t lose, and leverage only magnifies your gains, not your losses – your American, remember!

  82. blueskies

    You sold your principle residence 2 years ago

    ya can’t lose money taking a profit…. any old fool knows that…. and you can’t time the market….. everybody knows that.

  83. blueskies

    go get ‘em tiger!

    yes indeedy! from California? where RE is roadkill?

    didja know that the Lions Gate Bridge is for sale? have i got a deal for you!

  84. Johnnyrent

    Newsflash

    Finally a point on which we can agree; the volatility of Vancouver’s real estate over the past 30 years.

    Volatile markets by definition experience large ups and downs. This is the most protracted run up in Vancouver’s history and so it follows that a correction is due and that it is imminent – not today or necessarily next year but in the overall scheme of things, still soon.

    Some of us, like me, sold our homes, but happily and despite the market’s recent melt down, the gains made in investments after tax and after incremental costs to rent have kept pace with or have exceeded the gains that might otherwise have been made on keeping said house.

    There is in my view a high probability that my gains will increase significantly over the next two to three years. In the meantime, I rent a house well beyond my comfort level to purchase and much greater in value than the house I sold. There’s no risk aversion here and thus far, no losers. I don’t by any means think I am alone.

    What I think is sad is the unfailing belief in real estate prices always going up and the failure of the masses who do not learn from history or who are not old enough to remember it. This was the house of cards, if you’ll forgive the pun, that the US real estate melt-down was built upon at all levels.

    Right now its hard to be a contrarian about real estate in Vancouver. I suggest it will be even harder for some to acknowledge that the party is over when it ends.

  85. -A-

    Btw Robert, a good place to buy is in the vicinity of the caption picture Rob has posted at the beginning of this thread.

    The southeast corner of Victoria and Hastings has an elementary school; the concerned parents of the children who attend the school have to comb the neighborhoud every morning to pick up the discarded soiled tampons, condoms and hypodermic needles from the night activities which take place there during the night.

    Welcome to Vancouver.

  86. Anonymous

    “Who cares if there will be an economic slowdown. It only affects the Eastern provinces. The western provinces will continue to be buoyant since oil will keep going up and the mining sector (especially the precious metals) in BC will carry the day forward”

    Your theory is flawed. If there is an global recession or economic slowdown, there is a decreased demand for oil and gold. Prices fall because demand slows, jobs are lost.

  87. coco

    B.C. consumers may be looking to put off big purchases

    Vancouver – Consumer confidence is down across the country with the most significant plunge occurring in British Columbia.

    http://tinyurl.com/3x2fsd

  88. coco

    U.S. Banks abandon ‘Super-SIV’ fund

    http://tinyurl.com/2svp52

  89. coco

    Dodge Says Risk of Recession in Canada `Higher’

    http://tinyurl.com/382dy2

  90. coco

    Canadian credit crunch woes….

    The Bank of Canada is leaving C$347 million in the Large Value Transfer System on Friday and plans to leave C$250 million in the system on Monday.

  91. A Looser

    The big drop in consumer confidence seems like the beginning of the end.

    But what do I know? I’m a looser.

  92. Domus

    Why do i always agree with Johnnyrent….?
    Again, perfectly delivered and clear as a mornign sky….

  93. Geezer

    Coco wrote:
    “Dodge Says Risk of Recession in Canada `Higher’

    http://tinyurl.com/382dy2

    Hey Coco, how come you left out the rest of his statement?

    He also said “The risks are clearly higher than they were six months ago,” Dodge, 64, said in an interview shown on the Canadian Broadcasting Corp. Still, “the baseline is, one should expect slowing, but not a recession.”

    You weren’t trying to put a bearish spin on it were you?

  94. News Flash

    “This is the most protracted run up in Vancouver’s history and so it follows that a correction is due and that it is imminent”

    Why? Every protracted run in every market must come back to it’s starting point? If so investment in any market would be useless unless you are a market timer. Very few who have become wealthy through investment have done so timing markets.

    “not today or necessarily next year but in the overall scheme of things, still soon.”

    I do agree somewhat. Yes the market will come down at some point. Right now from the fundamentals I don’t see next year. I could of course be wrong but I don’t think so. We can revisit this time next year. I think I had the same discussion last year and the year before with others.

    “Some of us, like me, sold our homes, but happily and despite the market’s recent melt down,”

    Which melt down is that? The market you sold in which was a west side home is up 30% plus since you sold – no?

    “the gains made in investments after tax and after incremental costs to rent have kept pace with or have exceeded the gains that might otherwise have been made on keeping said house.”

    Good for you if you did it. Considering a principle residence gains are not taxable, the transaction costs on selling and the equity markets have been flat or down for the past 12 months I applaud you on your investments. Where did you invest your money? You have received abnormally high returns to beat what you would have received from holding a west side home considering capital gains/taxes, transaction costs from selling, and current equity market conditions. It must be a highly speculative investment.

    “There is in my view a high probability that my gains will increase significantly over the next two to three years.”

    So real estate markets are the only ones which return to the starting point of any run up? Where is your money now that has such a high probability of gains over the next 3 years? The markets you invest in are immune to recession and will go up forever? Even though your gains, if true, indicate they are speculative.

    “In the meantime, I rent a house well beyond my comfort level to purchase and much greater in value than the house I sold.”

    Fine, again do the math on your investments, rent, transaction costs, taxes and I highly doubt you have been better off renting.

    “What I think is sad is the unfailing belief in real estate prices always going up”

    You mistake always for the near term which we are commenting on for the most part. You said your investments will “in my view a high probability that my gains will increase significantly over the next two to three years”. Does that mean your investments will always go up? No it means based on the information you have in the next 2 or 3 years there is a high probability they will go up. Again I am interested to hear what those investments are that will buck the global armageddon you and others have predicted as imminent.

    “and the failure of the masses who do not learn from history or who are not old enough to remember it.”

    So the investments you have chosen have never gone down in history? Why are they different this time? You only invest in things that have have never had weakness in their history? You must be in the GIC forever crowd although the returns you claim to have had do not come from GIC’s.

    “Right now its hard to be a contrarian about real estate in Vancouver. I suggest it will be even harder for some to acknowledge that the party is over when it ends.”

    Could be, but lets wait for that to happen first. As we have seen in the US even with everything negative coming forward most markets are still just flat or down a few points over the last year or two. Hardly “falling off a cliff”.

  95. AmPa

    Wow, while I was reading the comments I this page, I was also counting the dough (proceeds) from my last condo flip.

    Well, the bear posts here were long, but damn I’m still not finished counting!

    But I’m not all greed. I tell you, I count 30 bears here. I’ll donate $30 to any charity of your choice. Just name it. This being Christmas and all.

    Happy holidays, and be nice to your landlord.

  96. blueskies

    Happy holidays, and be nice to your landlord.

    good idea! seeing as how he’s subsidizing my rent to the tune of a couple of hundred bucks a month…that’s the least he deserves.

  97. -A-

    “Why? Every protracted run in every market must come back to it’s starting point? If so investment in any market would be useless unless you are a market timer. Very few who have become wealthy through investment have done so timing markets.”

    Newsflash, I’m surprised you overlooked some of the basic assumptions of Asset Pricing Theory.
    Most capital assets appreciate over time relative to the economic output.

    As an example, if you purchased a leaky condo (in the area of Rob’s picture, Hastings and Victoria,) back in 2001,it might have housed two, perhaps three drug addicted prostitutes, in 2007 it still houses only tw0 or three prostitutes.

    With other investments, at least what I hold, the share prices have gone up because sales and profits have been going up as well.

  98. vanreal

    A Perhaps you should know what you are talking about before opening your big fat mouth and spewing out your incompetent diatribe.

  99. Domus

    Newsflash said:

    “Why? Every protracted run in every market must come back to it’s starting point?”

    Not exactly to the same point, but somewhere close: using data for th past 200 years (!) Shiller has shown that North-American REAL house-prices have a very small rate of return, somewhere in the range between 1 and 3% per year. Around this historical trends there are obviously large swings, and we are at the top of an upswing at the moment. We are guaranteed to go back below average for a while. That is a certainty, unless the worl has suddenyl changed between 2003 and 2007.

    “Could be, but lets wait for that to happen first. As we have seen in the US even with everything negative coming forward most markets are still just flat or down a few points over the last year or two. Hardly “falling off a cliff”.”

    Again, you are wrong. Nominal prices are already down roughly 6% nationally. A 6% down is roughly equivalent in absolute terms to a 12% up (it’s like this: if an asset appreciates 100%, it has to go down by only 50% in order to be back where it started from). On top of that you should allow for some very large inflation in the US: the CPI measure including energy and food is up to 4% annually. You already have that 16% of national appreciation has been eroded in 12 months. In addition, prices are going lower everywhere.

    Conclusion: if you had waited instead of buying in places like California you could have afforded something substantially larger/better/in a nicer location. Does it lokk that people who bought in the US 12 months ago locked in a great deal??

  100. -A-

    Sometimes I get the feeling, some people on this discusssin board just don’t like what I post.

  101. blueskies

    -A- you need a thick skin to survive

  102. Domus

    -A-, I like your posts….although I think my real idol is Johnnyrent….the closest thing to VHB!

  103. WoW

    AmPa – congratulations (sincerely) on your condo flip profits. When someone makes money, and I haven’t (in a simple hypothetical model), I tip my hat to them, as they saw and took an opportunity that I misread. Ultimately, successful investing is measured in gains and losses. I have misread this market, I could have made millions if I had played it differently (mind you, I’ve done well in other investments, and sold 19 (yes, nineteen) homes that family held long for the past few decades about 16 months ago (yes, too early – left lots on the table – in hindsight). So, good on ya for your win. That said, I’ve amassed a small fortune (like yourself, I’m assuming) by looking for opportunities. I base my decisions on simple, fundamental cash flow analysis. I have lots of financial eduction, but most of it is gobbldygook as complexity can be reduced to simple analysis of historic norms, trends, supply/demand fundamentals, etc. When I look at all the condos under development, and all those farms in Abby getting developed, I see supply, not demand (well, I do understand that demand is driving the supply decisions) – in any event, as Rob has quite aptly put it, the cure for high prices is high prices (ie. in the US there was RECORD home building to meet RECORD demand, has demand slowed, the market has CRACKED (and dude, it is not EVEN CLOSE to the bottom there), and the ripple effects of the sub-prime mess will be felt globally for YEARS. The teflon markets, like NY, Cali, and London have all CRACKED. Markets like Vegas are down 50% in some areas. So, as demand has fallen and supply comes on stream, prices have to fall to clear the market. I expect the same thing here.

    Me, the renter….hmmm. The house beside me just sold for 3MM. The house down the street is listed for 5.9MM (I doubt you live in the same type of neighbourhood that I do, but I could be wrong, don’t take offense). I pay a fraction of ownership costs to RENT this place. If prices fall (I mean, continue to fall, as they have been falling these past few months – which is probably what caused you to flip your condo, (or perhaps your moving onto your next pre-build), then the OWNER of this house owns the losses and the extreme cash flow negatives of the costs of ownership, and he loses, I gain (in relative terms – and let me tell you, in most global RE markets over the past year, this has been the case) – if prices start to climb again (I say again, as they have been falling lately, if you haven’t noticed), then I lose.

    So, in agreement with you, it comes down to results. Lets see how the future unfolds – enjoy the Holiday Season.

    Best Wishes.

  104. WoW

    Coventree foundering
    CanWest News Service
    Published: Saturday, December 22, 2007
    TORONTO — Coventree Inc. nudged closer to the abyss Friday, informing investors that its main business unit is no longer viable and that it is considering selling itself or folding up shop entirely.

    No sub-prime in Canada – right! Tell that to CIBC shareholders (ya, I know its related to some of its US exposure – but don’t worry, sub-prime only comes to light when house prices fall – won’t happen here, its different here (well, until the last few months anyways)
    Coventree was Canada’s biggest sponsor of non-bank, asset-backed commercial paper (ABCP). That $35 billion market froze up in mid-August when buyers balked suddenly due to concerns the underlying assets might be affected by subprime mortgages in the United States. The company’s stock has been in a free-fall ever since.

  105. -A-

    Vanreal:”A Perhaps you should know what you are talking about before opening your big fat mouth and spewing out your incompetent diatribe.”

    That’s not a nice thing to say, but nonetheless, I am open to learning:

    Please, correct me where I am wrong.

    a) Hastings and Victoria has a high proportion of prostitutes and IV drug users.
    b) Most capital assets appreciate over time relative to their economic output.

  106. Annon

    Hey guys (bulls and bears),

    Does any of you guys know what happened to mutual funds? The stock market closed with triple digits gains on Friday and yet this fund, RBC Select Choices Balanced Portfolio, dropped almost 10%. I was puzzled by this drop and called my other friends for confirmation and apparently their portfolio dropped despite the market ended higher.

    WHAT HAPPENED? PLEASE SHINE SOME LIGHTS?

  107. coco

    Geezer,

    I post article headlines, if I have time I may post a paragraph from the article too. Your bearish spin is just your bearish spin. I have stated numerous times I’m not really bearish or bullish, you can find value and make money in any kind of market. Although, in a “raging bull” market you have to be more careful what your investing in, as the downside can hurt if you overextend yourself financially and the economy slows or enters a recession.

  108. A Looser

    BC retail sales increased at double the national rate from Sept to Oct.

    Nationally 0.1%
    BC 0.2%

  109. coco

    Weaker sales in Ontario bring retail sales down across Canada

    http://tinyurl.com/3678bq

  110. coco

    Stagflation scourge haunts some

    http://tinyurl.com/2cyutj

  111. Annon

    coco,

    Thanks for the link. My question was why after the Friday’s market close with triple digit gain, it dropped almost 10% from Thursday’s price. Unless you are suggesting that the price adjustment didn’t propagate to this particular fund until Friday? I was trying to find out if anything big happened in the financial market on Friday. The RBC Select Choices Balanced Portfolio has over 50% in stock market. So naturally when stock market rises, this fund rises as well.

  112. blueskies

    I was trying to find out if anything big happened in the financial market on Friday.

    is it possible the banks holdings are now mark-to-market?

    did the mutual fund have other bank holdings that are now treated as suspect?

  113. NotBearNoBull

    Annon,

    I think you should relax a bit, RBC S.Choices B. Portfolio did NOT drop 10% in one day.

    Verified from:
    http://www.globefund.com
    http://www.rbcadvisor.com

    Also, this fund’s 3yr std. deviation is +/-4.62% & beta=.49 of Index…so NO way it dropped that much.

    Here’s probably what happened, a year-end distribution was paid to you which decreases/drops the share price of the fund.

    Merry Christmas and enjoy some turkey.

  114. bearette

    Jeff:
    Get off the crack.
    I think you are slimy because you are predatory, not because prices are destined to fall. That’s good news.
    Realtors. (Shiver.)

  115. blueskies

    predatory?! kinda heavy..no?

    reptilian type predator?

    or more like raptor?

  116. Jeff

    bearette:
    maybe we should meet for coffee and I guarantee you in just 15 minutes you’ll pick me to sell your next property.
    let’s try not to have a long discussion about who’s buying.

  117. Annon

    NotBearNoBull,

    Morningstar.ca says it dropped 1.14 to 10.53, this is 9.77% drop from last Thursday’s price.

    http://www.morningstar.ca/globalhome/quicktakes/fund_overview.asp?fundid=6183

    On my RBC’s web account, I got quote on the same fund, dropped 1.3846 to 10.2863, this is 11.8% drop from last Thursday’s price.

    I no longer own this fund but my morningstar.ca still tracks this fund and they both show similar decline.

  118. Domus

    This is straight from Calculated Risk (this blog is good, even Paul Jrugman mentioned it recently at his Google seminar in Palo Alto):

    http://calculatedrisk.blogspot.com/

    This is an extract: “I mention the Radar Logic data, because according to Goldman Sachs, the Radar Logic futures data is forecasting a price drop of 11% over the next year, and close to 25% over the next 3 years for the 25 largest MSAs.”

  119. Annon

    blueskies,

    I found CIBC and this is closest to what I would consider risky ones.

    Top 10 Holdings % of Net Assets

    Canada Govt 5.25% 01-06-2013 1.4
    Bk Of Nova Scotia (CD) 1.3
    Canada Hsg Tr No 1 4.05% 15-03-2011 1.3
    CIBC (CD) 1.2
    Royal Bank of Canada 1.2
    Canada Govt 01-09-2011 1.1
    Toronto-Dominion Bank 1.1
    Manulife Financial Corporation 1.0
    Canada Govt 5.75% 01-06-2033 0.9
    Canada Hsg Tr No 1 3.55% 15-09-2010 0.9

  120. NotBearNoBull

    Annon,

    The RBC fund price dropped as I VERIFIED again through RBCadvisor website = “for advisors only” that a distribution was paid to fund holders Dec 21 which reduces the share price proportionately (I hope this gives you enough of a hint of my background)…have a good weekend.

    Let’s get the discussion back to real estate now.

  121. Annon

    NotBearNoBull,

    Is that distribution worth around 10%? Otherwise, I see money eaten away by layers of management fees.

  122. Skeptic

    Hi Wow, you’ve got me beat. I can’t figure out where abouts in the Fraser Valley you could possibly be living that has houses valued at $3M and $5.9M. 🙂

    Where I live, prices aren’t falling. They may do but they haven’t started falling yet.

  123. WoW

    Skeptic – I’m in Vancouver (West). Renting. Just did a walkabout – many for sale signs. That said, there is a lot of overseas money here, many many houses are owned, but emptied (but very well manicured). I am not sure if we have any slowdown here (my friends in the British Ppties have indicated prices are falling there), I would assume/hope that price declines will creep in from the Valley, that is my general thesis. Only time will tell, but fundamentals are as stretched as I can see them going. Merry Xmass.

  124. Mullet

    Question for WoW: Where are you seeing all these for sale signs? The only ones I’m seeing have sold stickers on them. There are only 19 listings in Dunbar right now according to realtylink.org, Point Grey 22, Kits 26. Just curious.

  125. Mullet

    Sorry…I should clarify those numbers are for houses only.

  126. blueskies

    There are only 19 listings in Dunbar right now according to realtylink.org, Point Grey 22, Kits 26.

    “ghost listings” for sale with sign but no official MLS number, maybe over 90 days, almost certain overpriced….. like some wandering demented FSBO wraith

  127. robchipman

    -A-

    “Sometimes I get the feeling, some people on this discusssin board just don’t like what I post”.

    “That’s not a nice thing to say…Please, correct me where I am wrong.”

    When you characterize the residents of an area as “crack addicted prostitutes”, it’s probably received as an insult by people who live there (the majority of whom, by far, are not IV drug users or prostitutes). That shouldn’t be too much of a surprise. To be fair, you also referred to residents there are concerned parents, but that doesn’t exactly balance the slur.

    WoW:

    If you’re living in a rich part of town you’ll always rent for a fraction of ownership costs. That’s the nature of the beast. Owners (for whatever reason) pay a premium to own that stuff, and rent it simply to offset some costs. I doubt tht you’ll ever get much Westside or Northshore stuff to generate good numbers. That doesn’t make RE a bad deal. When run of the mill suburban stuff doesn’t make sense, well, that’s a different story.

    $fromA$ia:

    A little decorum, please.

    Snick:

    Same as above.

    Blueskies:

    Post a few addresses of these ghost listings and we’ll confirm whether they’re MLS or exclusive (fwiw, its contrary to the RESA for a Realtor to advertise a property without a valid listing contract)

  128. A Looser

    “When run of the mill suburban stuff doesn’t make sense, well, that’s a different story.”

    Based on my run of the mill suburban rent, its a different story than.

  129. -A-

    Rob, how did you get from?
    Please, correct me where I am wrong.
    a) Hastings and Victoria has a high proportion of prostitutes and IV drug users.
    b) Most capital assets appreciate over time relative to their economic output.
    To this?

    When you characterize the residents of an area as “crack addicted prostitutes”, it’s probably received as an insult by people who live there (the majority of whom, by far, are not IV drug users or prostitutes).

    Does the area which you depict in your caption not have a disproportionate number of hookers and IV drug users?

  130. Newcomer

    As a matter or record, crack is not use intravenously. The whole point about crack is that it is _smokable_ cocaine.

    Also, I’m not sure that I agree with the rich-area = no-cash-flow idea. I lived in a posh area of of NYC and my unit cash flowed very well and, come to think of it all of my friends for whom I knew the numbers lived in cash flowing or cash flowable apartments, including those on the Upper East Side, which is one of the poshest neighborhoods on the planet.

    Now that I think of it, one of the places I checked out a few years back in Kits was a really nice place right on the beach and the rent was 2100 for the top suite. I was kind of stunned as to why it was so low, so I asked the guy and he said that it has been at that number for years because it covered the mortgage.

    Look at London, England. The whole city cash flows (or did until about six months ago).

    In conclusion, there is no evidence to support the theory that good locations should not cash flow.

  131. Mullet

    Blueskies…”ghost listings” seem like a bit of a stretch. If my listing expired I imagine I’d ask the agent to remove the sign.

  132. blueskies

    I see debt people.

  133. Newcomer

    >>I see debt people.<<

    Scary. Like these (http://tinyurl.com/28p78b) maybe? Hey, if you are walking away from your mortgage, why on earth would you keep making your credit card payments. It’s worth noting that CBs are taking credit card debt as collateral for short term loans. Somehow or another it seems like the who economy is doing the equivalent of circular kiting.

  134. WoW

    I lived in nyc (mid-town) and it for sure was cash flowing.

    Mullett – the area of my walkabout yesterday (and today) encompassed roughly granville and 41st to 54th and all the way west to Arbutus (big area, but I drive it too). Nice area, a bit sterile is some ways (very few people walking about). That said, I can EASILY count more than 19 for sale signs in that area – come by and have a look. And the for sale signs have FEW sold signs on them and have been up for months, by and large. They may be ghosts, I wouldn’t know. Some of the big listing agents include something goldman, manyee lee, steve kwan and winnie yu I think. Dave levee too. Anyways lots for sale but definitely for the well heeled set and a bit of a stretch for my budget.

    In any event I could be wrong in my thesis, I’ll stick to it.

    Rob – you may (or not) be right about the economics of the prime area. I’ll overpay, but not by 40+percent. If that makes me a forever renter, so be it (I don’t plan to rent forever), but I do plan to be very rich one way or another. Look forward to meeting you when I start looking. Happy Holidays.

  135. coco

    Annon,

    Nothing big happened in the market Friday, it was just a Santa Claus rally.

    2008 will bring higher subprime writedowns and contagion into other areas like credit card defaults, etc. It will be very messy and volatile.

  136. coco

    A lot of Canadian bank mutual funds are weighted in financials. Of course, due to subprime writedowns, financials are the least appealing sector right now. Your mutual fund may have dropped in value depending on the level of exposure.

  137. coco

    Canadian ABCP pact sets stage for trading

    Purdy Crawford’s committee unveils agreement as impatient investors threaten lawsuits

    http://tinyurl.com/2go5ug

  138. coco

    Canadian dollar rises trading at 1.0115

  139. coco

    Surge in oil prices could sow seeds of their own destruction, by crimping growth

    http://tinyurl.com/ysysap

    “The cure for high prices is more high prices,” said Tim Evans, an analyst at Citigroup Inc., in New York. (sounds familiar)

  140. coco

    Okay, I wasn’t dreaming when I started to see mortgage rates rise before any official announcement in the media.

    Posted rates as of December 21, 2007

    http://tinyurl.com/2orp6

  141. coco

    So much for the BoC providing liquidity and lowering interest rates. Crunch, crunch.

  142. coco

    I would not be surprised to see mortgage rates rise again. (bond yield has been rising combined with credit crunch)

  143. coco

    Have a Merry Christmas everyone!

  144. blueskies

    coco:

    hoho!

    leaving us on a high note?
    mortgage interest rate wise 🙂

  145. Anonymous

    Rob,

    I see that Aaron Best still has that shack listed on King Albert St. in Coquitlam for 510K. The listing date is Nov. 15.

    What gives? Whatever happened to all those “multiple offers”? Did they all fall through?

    Will he be advising the owners to drop the price any time soon?

    Do keep us posted.

  146. Annon

    Indeed, Merry Christmas to all bulls and bears.

  147. robchipman

    Newcomer and WoW:

    What kind of rents were you seeing in NYC and London when those places cash flowed? I ask because I’ve never really seen a time when the Westside/West Van (and now, increasingly the whole North Shore) worked very well from a pure numbers point of view.

    Another question for the two of you: if we don’t look at it geographically, but in terms of price, I think its safe to say that here, if you buy an expensive rental, you get less return than if you buy a cheaper rental. In other words, a $200,000 1 bedroom around, say Hastings and Victoria, will bring in $900/month, but a $400,000 downtown may not get $1,800, and a $600,000 may not get $2,700, as a rule. The higher the rent, the smaller the pool of potential renters, and the more value the renter gets for his buck. I have line ups for tiny places at $1,300, but a 2 bedroom at $1,700 may take a while. Did you see that in NYC or London?

    Snick:

    I’ll update you on King Albert shortly.

  148. WoW

    Hi Rob – hmm, you’ve caught me a bit there, my place was paid for by the company i worked for, so I’m not totally sure. That said, I met a number of multiple (large scale) ppty owners and did some calcs with them, and certianly they flowed positive. These were not necessarily the high-end, more mid-range places, the types young professionals would rent (vs. the v. well heeled set). You may have a point, and when I went looking for my rental, I had a price range and was pleasantly surprised at how much the selection (not in volume, but in quality (location/features/etc.) improved as I moved up in as little as $250 increments (ie. from, say, $2500 to $2750, etc.). So you may have a point, and I may stand corrected. Certianly where I rent most if not all pads would be massively cash flow negative. 6 years ago, before the BOOM (aren’t most BOOMs followed by BUSTS – or just in the US, UK, Spain, etc. – anyways, I’ve been surprised by the strength in the local market, I won’t shy away from the fact that I’ve been WRONG in terms of WHEN I thought things would turn – I remain convinced it WILL (if it isn’t already turning), but only time will tell, and I am able to see factors which could keep things firm at these prices, so guess I’ll have to make a few bucks either way in my day-to-day activities to butress my purchase, whether at these prices, higher prices or lower prices – its going to be expensive no matter what…that said, and back to my banter, 6 years ago or so, the places where I’m at now I beleive would have come close to being cash flow positive, if not full carry. Today they are not. Is the Shangai family plunking $3MM down on a place that is more for insurance (ie. political strife/currency restrictions/etc. in China) concerned – NO, i don’t think so. But, not all the purchasers are like this, and markets turn, in my opinion, by changes at the margin that become inflection points for the market as a whole. I remain highly interested in watching events unfold this spring.
    Rob – I think I’m addicted to your blog!

    haha – enjoy the holidays everyone and best wishes to bulls, bears and dummies alike for 2008.
    Cheers.

  149. confident

    coco, thanks for recent rates post… I got quite a shock as I had not noticed rates for awhile. Things have really changed from a couple of years ago, yet prices haven’t responded. Strange, I think. I don’t understand why rates are climbing yet BOC rates are dropping. (Or at least I thought they were, as inflation is under control more or less.) Could rates rise further? and why?

  150. Popeye

    I would like to wish everyone on this site
    A Very Merry Christmas and a Happy and Prosperous
    New Year.

    From me, Popeye the Sailor,
    my girlfriend, Olive Oyl,
    And our little girl, Sweet Pea.

  151. Snick

    Anonymous
    December 24, 2007 at 9:47 am
    Rob,

    I see that Aaron Best still has that shack listed on King Albert St. in Coquitlam for 510K. The listing date is Nov. 15.

    What gives? Whatever happened to all those “multiple offers”? Did they all fall through?

    Will he be advising the owners to drop the price any time soon?

    Do keep us posted.

    Good!

    (Why did my post say “Anonymous”?

  152. $fromA$ia

    Excuse me, I don’t see any cracks in the RE market yet?

    Feed me please.

  153. blueskies

    Feed me please.

    OK here’s some troll food

    http://tinyurl.com/2eq3b5

    The committee then turned to Canada’s big banks, and asked them to collectively provide roughly $2-billion in support. But some of them haven’t signed on yet.

    our made in Canada credit problems are no where near over.

  154. blueskies

    http://www.katkam.ca/

    a more serene look at west side real estate

  155. blueskies

    Feed me please.

    http://tinyurl.com/2hvvwc

    “Rate of credit card default seen surging as fallout from the subprime meltdown is spreading.”

  156. $fromA$ia

    YUM YUM, Thanks for the B.S. , B.S. 🙂

  157. tqn

    Happy Boxing day, everyone.
    By this time next year, the same posters will still be posting same types of doom and gloom links, nothing has changed after so many years.

  158. $fromA$ia

    Moses told his people about the flood, that wasn’t cyclical.

    Confusious said: Wise man pull your head out of that pigs ass you’ll be able to see and hear.

  159. blueskies

    the same posters will still be posting same types of doom and gloom links,

    ummm…there is no doom or gloom, the universe is unfolding as it should.

    of course RE will collapse but that is not gloomy, it is required to return things to normal

  160. blueskies

    “I am worried about the U.S. housing market and what it does to consumer confidence,” said Mr. Flaherty. “It’s not just subprime, it’s much bigger than that. We can expect reduced demand (in the U.S.), which is going to hurt exports, particularly the auto sector and forest products.”

    http://tinyurl.com/32m52r

  161. blueskies

    NEW YORK — U.S. home prices fell in October for the 10th consecutive month, posting their largest monthly drop since early 1991, a widely watched index showed on Wednesday.

    “No matter how you look at these data, it is obvious that the current state of the single-family housing market remains grim,” said Robert Shiller

    http://tinyurl.com/yqnm6f

  162. domus

    tqn, just a few interesting posts today at Calculated Risk. Have a look:

    http://calculatedrisk.blogspot.com/

    You might be in for a surprise: the greek used to call your attitude “hubris”…..

  163. tqn

    domus,
    life too short to be worry and scare about everything – some healthy people are even scared to drink filtered water and eat brown bread!

  164. domus

    what’s a care for you is a joy for the next guy. Now now…..it is Christmas, stop being selfish…..

  165. blueskies

    hmmm filtered water and brown bread would make an excellent diet for a new home buyer…..

  166. domus

    One question: do you think that people buying homes today will claim to be hard-done-by and ask for government bail-outs one year from now? I really wonder…..this is what’s happening in the US…..

  167. $fromA$ia

    As long as Vancouver is cheaper than Shanghai there will be ongoing price purchases. Cmon guys we’re beyond the momma and poppa scenario.

  168. blueskies

    who warned of a completely new attitude by Americans to their homes amid fears that as many as 20 million householders may “walk” from them, further deepening the crisis.

    http://tinyurl.com/2z8met

    rather surreal numbers… no?

  169. Strataman

    $fromA$ia
    December 26, 2007 at 9:16 am
    “Confusious said: Wise man pull your head out of that pigs ass you’ll be able to see and hear.”
    So? are you stuck in there?

  170. blueskies

    strataman:

    any scoops on Elan?
    another flipper city like Spectrum?

    how about L’herimtage en ville?

    tia

  171. Dmello

    blueskies

    Take a look at H+H in Yaletown. A family friend who works very close with the development is warning that it could be a flipper disaster this spring if sales are not strong. He estimates that close to 80% of the pre-sales were sold to flippers and very few were able to sell last year. Prices on these units dropped an average of 5-10% in the last 4 months of 2007.

    I cant figure out why people are not buying these up like crazy… I mean, $900 a square foot for cheap build quality and no view? Surely people don’t want to walk the 3 blocks up to Elan for $750 square foot, better build quality and great views….

  172. Snick

    “Strataman
    December 26, 2007 at 4:24 pm
    $fromA$ia
    December 26, 2007 at 9:16 am
    “Confusious said: Wise man pull your head out of that pigs ass you’ll be able to see and hear.”
    So? are you stuck in there?”

    He also said, “Man who fart in church sit in own pew.”

    So? Are you stuck in there?

  173. Annon

    “The prominent New York University economist Nouriel Roubini, who is predicting an extremely hard landing for the US economy and an acute recession, said on television that Wall Street’s latest rises represented a “sucker’s rally” and stated the nation was in its “most severe liquidity crisis for 50 years”.”

    http://tinyurl.com/2yarj2

  174. Anonymous

    If you kick old sh!t, it begins to smell.

    Markets are cyclical but yvr is different.

    Strata man and Snick I can see both sides of the fence. My head is not in the ass at all.

    If you guys are right wing RE worshippers or hmmm…maybe wanna be RE tycoons get your head out of that ASS.

  175. WoW

    Sad, sad day for Pakistan, and for democracy and women’s empowerment in that part of the world. Lasting repercussions I fear, all of this senseless violence just makes me ill.

  176. Markets are cyclical, housing is a market

    Thanks WOW, how will this affect YVR Real Estate?

    Or maybe I should get my head out of the pigs ass.

  177. WoW

    Well, if you want to see how things are going to unfold, from a YVR RE perspective, and you want to experience all the emotions, excitement and thrills going forward, I suggest you leverage up on these 40year, nothing down (but not called subprime, ya know!) mortgages, get a bunch of cashflow negative properties, and enjoy your long-term rewards. Ya, didn’t think so – perhaps its a chicken and not a pig, how does it smell?

  178. Mightymouse

    “Sad, sad day for Pakistan, and for democracy and women’s empowerment in that part of the world. Lasting repercussions I fear, all of this senseless violence just makes me ill.”

    Yes. I prey this horrific incident will have the reverse effect for the people behind her execution. Benazir Bhutto is now a martyr, her convictions will be known by many more because of this tragedy.

  179. WoW

    Mightymouse – I agree, to an extent. Although we are a ‘world away’, all of these types of events serve to set us back. I don’t know much about her personally, or her politics, or if she would be better for PK than others – but regardless, how can a democracy have a hope of taking root and flourishing in an environment such as exists there and in other places.

    I thank my maker that I was born and live here, what a wonderful place. We should never take our way of life for granted. If I’m forever priced out of the market due to the desirability of VCR, so be it, I’d rather be ‘house poor’ and enjoy our political/social structure than otherwise.

    Anyways, to all, best wishes during the Holiday Season, and for the New Year, bulls, bears and pigs, whatever.

    Cheers.

  180. Anonymous

    WoW said,

    Sad, sad day for Pakistan, and for democracy and women’s empowerment in that part of the world. Lasting repercussions I fear, all of this senseless violence just makes me ill.

    Markets are cyclical, housing is a market said,

    “Thanks WOW, how will this affect YVR Real Estate?”

    “Or maybe I should get my head out of the pigs ass.”

    Pakistan has nukes. If a democratic government doesn’t get elected the next government may get mad at the U.S. and shoot a nuke over. Since Vancouver is so far away from the border, no need to worry about any miss calculations of one landing here accidentally.

  181. A Looser

    “what a wonderful place”

    Can you drive down East Hastings and say that?

  182. Newcomer

    Actually, yes. A large part of what you see on East Hastings is tolerance.

  183. blueskies

    local agents who deal in luxury condos report that an informal list of Trump reservers trying to unload units is already floating around – some estimate it reflects 30 percent of the tower. These agents believe many of the sellers won’t be able to get the price they committed to paying for the unit and some may have to walk away from their deposits.

    http://tinyurl.com/2vw94f

    is there any anecdotal info on “walkaways” in good ‘ol Vancouver?

  184. $fromA$ia

    I need to see some local crack s guys.

    Where are they. I’ve taken my head out to have a look around.

  185. paulb

    You don’t look for cracks in late Dec Asia. Come knockin in a couple months to see whats what.

  186. A Looser

    For a second there, I thought Asia was looking for a dealer.

    For crack, drive down East Hastings.

    For cracks in real estate, drive down the Lougheed Hwy in Burnaby. All those condos are going on the market in the Spring…and there is more to follow.

  187. A Looser

    Newcomer,

    All I see is wasted lives. Sad.

  188. WoW

    Bullish for YVR RE?

    London is not Vancouver, its not a world class city/destination, like here – have you been to London?

    Mortgage approvals down
    CanWest News Service
    Published: Friday, December 28, 2007
    LONDON — U.K. mortgage approvals dropped 44 per cent in November from a year earlier as higher borrowing costs and concern that home prices have further to fall deterred buyers, a British Bankers’ Association report showed. Banks granted 44,811 loans for house purchases, compared with 79,367 in November 2006, the London-based BBA, which represents the U.K.’s biggest banks, said Thursday.

  189. coco

    Canadian economy to suffer hangover in 2008 as party winds down

    http://tinyurl.com/3ay7og

  190. Strataman

    $fromA$ia
    December 27, 2007 at 9:39 pm
    I need to see some local crack s guys.
    Look no further then Craiglist Rentals. Investors cannot rent their units. See all the units “available now” so empty. See units fully furnished at same price as unfurnished 4 months ago. Se offers of free 1/2 months rent. See change from “will show at XX:XX: to please phone to arrange viewing at your convenience. This has never happened in December to this extent. I suspect their are over 1000 vacant money losing units in Vancouver downtown alone.

  191. coco

    Gilbert-based ReMax 2000, #1 of the Phoenix area’s largest real estate brokerages, has shut down its 13 offices, putting 350 agents and 20 other employees out of work.

    http://tinyurl.com/287qd5

  192. Newcomer

    If this story from the NYT has legs, people will soon be pining for the days when it was just a subprime crisis.
    http://tinyurl.com/3dxhbh

  193. WoW

    US New home sales hit 12-year low
    Annual rate of 647,000 marks worst level since April 1995 after a 9% drop in November.

    Hey, what is the bullish spin on this for YVR RE?

    Come on, ye bulls – how is this good for us?

  194. $fromA$ia

    Ya, but US crunch doesn’t phase Vancouverites or imigrants.

    I want to see more local crack.

    Craigs list is good, any more strong evidence?

    I notice Rob has nothing to offer, not even what his verage clients mortgages are.

    I NEED MORE LOCAL CRACK!

  195. coco

    Newcomer,

    Your unable to tinyurl New York Times articles, you have to have a subscription. You can read New York times articles by googling the headlines though.

    I’m taking a guess that this is the article you were trying to link. If you google this headline you can read the entire article for free:

    This is the sound of a bubble bursting-new york times

  196. WoW

    Edmonton friends are indicating that everyone they know who is selling a house (moving, moving up, bought a place and need to sell theirs, etc.) are having trouble getting good offers – market has stalled appreciably.

    Apparently there was a documentary on TV last night on Vancouver RE, highlighting how the pre-sales/flipping activity has started to stall out and leave specuvestors hanging out there more than in previous years – did anyone see this (I did not, will try to get a link to this)???? Could it be that we are seeing Crack s in YVR RE? Please, tell me it ain’t true!

    Rob – how has the market been the past week – guess its all moot, due to the holidays – when do you see listing activity to start for the spring, does it usually start in early Jan, or is it somewhat gradual going into the spring?

  197. WoW

    I’m hearing more and more comments on lack of movement in Surrey and Langley markets (tons of for sale signs, fewer sold signs than in the past – a sense that the market has definitely slowed) – can anyone else comment on what they are seeing in the valley? The vancouver sun article said Mission has 10 months inventory – is that a lot, and is it impacting the local market trends/buyer mood/behaviour?

    thank you.

  198. blueskies

    It was the greatest credit party in history, made possible by a new financial architecture that moved much of the activities out of regulated institutions and into financial instruments that emphasized leverage over safety.

    ….from the NYT article

    hmm my coffee tastes funny

  199. Strataman

    “any more strong evidence?”anecedotal unforunately but a close friend who is an appraiser says their company is appraising condo’s at 2005 prices resulting in some sales failures. Some sort of instruction from their bank customers. He had 6 this last week that fell thru because appraisal was less then asking substantially. I have no idea how relevant this is at this point.

  200. Newcomer

    Coco,

    You do not need a subscription, you just need to be signed up (it’s free) and, if you are, the TinyURL link works fine. The headline for the article I was posting was:
    Credit Crisis? Just Wait for a Replay

  201. WoW

    Jeff – given a quickly deteriorating situation in the US/ alberta/fraser valley – how do you see the first few months of the year unfolding in vancouver RE market? thanks.

  202. blueskies

    big crack!!

    satv has vamoosed!

    uh oh!

  203. WoW

    Jeff – what do you think of this – could it happen here? I mean, with all of our offshore buyers, and the Olympic dream in 2010, we are immune to these types of issues, are we not – I mean, come on, they are not making any more land here, like they are in Edmondon, right?

    What, me worry?

    EDMONTON JOURNAL Dec. 26, 2007.

    QUOTE-
    Edmonton-area investment firm Hendrickson Financial Inc. warns that the National Association of Realtors continued to say that “the bottom has been reached” in most of their monthly releases during the year, while in fact home sales figures were revised lower every month.
    …………..
    An Edmonton realtor said that back in May “listings were gold,” but now “buyers are gold.”
    ……………
    Hendrickson Financial notes that “it is evident that home buyers in Edmonton and Calgary who bought in the spring of 2007, with less than five-per-cent down payments, already have less equity in their homes than the balance owing on their loans.”
    END QUOTE

    Does this mean that the info that I got from Realtors was wrong – that it was not a good idea to hold on to my property in Edmonton?
    Portfolio manager Harland Hendrickson adds: “We firmly believe that we will see real estate prices continuing to move down in Edmonton as well as in all North America over the next year or two at least. This is not the time to be holding onto investment real estate.”

  204. blueskies

    This is not the time to be holding onto investment real estate.”

    this is our new mantra for ’08

    holding leveraged RE is toxic.

  205. WoW

    Friend of a friend bought a pre-sale in Langley. Paid $250k. Listed for 296k – no offers for 100 days (not a one). Reduced price to 271k – let’s see what happens. Good chance he’ll end up losing money on this – who woulda thunk it, eh? I thought this was a sure-fire way to make money, without risk.

    Jeff – whadda you think? Could it get worse from here, or have we hit the bottom and will we now move dramatically and rapidly to new higher highs?

  206. Dude

    It’s the worst time to buy now. Everyone knows that, bigger the boom, bigger the bust! Vancouver is going to have a big drop. It’s going to be pretty sad for those with negative equity when their home price falls below what they owe the bank. Should they just walk away from the mortgage? It might be the best solution.

  207. WoW

    Dude – how do you see things unfolding over the next 3-6 months?

  208. Snick

    “Jeff – whadda you think? Could it get worse from here, or have we hit the bottom and will we now move dramatically and rapidly to new higher highs?”

    This is a joke, right?

  209. blueskies

    we will retrace these prices in 2022 Oct 15 3:00 PM

  210. Mullet

    Anybody make some nice capital gains for 2007 shorting US homebuilders and lenders?

  211. Dude

    WoW, I think the R/E market will dip a bit. Prices are normally sticky downwards. When listings starts to sit around for 100 to 150 days on the market with no decent offer, prices will start dropping. I think the big dip is going to be at the end of 2008 and in early 2009.

  212. $fromA$ia

    Nice Dude, we can expect RE housing correction to go along with our 2 week olympic farce that people are actually paying money for those new licence plates.

    Thats looks like it could be a fairly nice crack.

  213. A Looser

    Dude, is it a big drop or drop a bit? You’re confusing me.

  214. whybuywhenucanrent

    Walking away from mortgages–

    The links posted yesterday are about concerns that America’s middle class will simply “walk away” from their homes if they have negative equity.

    Can they do this without filing for banktrupcy?
    What are the ramifications?
    If, for instance, you bought a house in Seattle for $400K, zero down, and it drops to $300K in value, you’d just send the keys to the mortgage holder and move out, no ramifications?

    Sounds like the US will be in a world of hurt. All those folks who are sitting on negative equity homes with crushing mortgage payments are due to turn in their keys and sign a rental lease on the house next door for half the monthly payment…

    Am I reading this correctly?

    Whybuywhencanrent?

  215. A Looser

    My understanding is the affects of “walking away” vary from State to State. What I’d like to know is what happens in Canada?

  216. M-

    Whybuywhenyoucanrent: here’s a link to a Calculated Risk post where they discuss recourse vs. non-recourse mortgages:
    http://tinyurl.com/39vvwj

  217. Crabman

    From the LA Times: Realty reality: Housing prices are headed way down

    In 2002, the median price of a single-family home in Los Angeles was $270,000 and the median homeowner’s income was $65,000. With a $50,000 down payment, the annual cost of that house (taxes, insurance and payment on a 30-year fixed-rate conventional mortgage) would add up to about 33% of the median household’s income — just under the 35% mark that the Federal Housing Administration calls the upper limit of “affordable.” By 2006, the cost of that same house doubled, to $540,000 — pushed by unbridled speculation fueled by unparalleled access to mortgage capital. But median income rose a paltry 15%. So today that same set of costs come to 60% of gross income…. Prices must and will fall. Probably 25% to 30% from their peak.

    So, with the median home costing over 70% of the gross income in Vancouver, I guess the pain should be even worse here? Or will our great weather (unlike LA) keep us going up?

  218. Snick

    Yeah! What about THAT, Rob!

  219. whybuywhenucanrent

    M wrote::
    > here’s a link to a Calculated Risk post where they
    > discuss recourse vs. non-recourse mortgages:
    > http://tinyurl.com/39vvwj

    Yes, that’s the one I was referring to. It doesn’t mention filing for bankruptcy, so I guess you don’t have to. Surely you’d take a nasty hit on your credit score, though, and since they don’t mention that. I guess I’m wondering what else they don’t mention–anyone here know more about US lending/walk away practices?

    And it sounds like historically lenders haven’t gone after other assets, like wages or other property. But. They could.

    It would be easy to find out in Canada, just read the fine print on your mortgage, or walk into a bank and ask for a sample mortgage contract. Anyone want to report?

    Whybuywhenucanrent?

  220. A Looser

    The consequences for walking away can’t possibly be worse than paying 70% of your GROSS income on a depreciating asset. I’ve lived most of my adult life without using credit, and on a modest income. Its very easy to do.

  221. Snick

    And, what about that shack on King Albert?

  222. whybuywhenucanrent

    > The consequences for walking away can’t possibly
    > be worse than paying 70% of your GROSS income
    > on a depreciating asset.

    Unless you’ll pay for it in any case–like
    1) You have $200K in mutual funds you don’t want them to come after, or
    2) You make $120K/yr and they’ll garnish your wages.

    Depending on how the mortgage contract is written, they might get their payoff whether you’re in the house or not. And if they have to go through $20K in legal fees to do it, that’s just money down the drain. Might as well sit on the house, pay the mortgage if you can.

    again,
    Whybuywhenucanrent?

  223. blueskies

    this would make a great movie!

    “Flipper Bloodbath”

    set in Fantasy-land-by-the-Sea
    (AKA Vancouver)

    executive producer RobChipman

    you’ll never want to go into that basement suite again

  224. blueskies

    strataman:

    “any more strong evidence?”anecdotal unfortunately but a close friend who is an appraiser says their company is appraising condo’s at 2005 prices resulting in some sales failures. Some sort of instruction from their bank customers. He had 6 this last week that fell thru because appraisal was less then asking substantially. I have no idea how relevant this is at this point.

    this is huge! very relevant. if the banks get really cautious this will bite.

    for instance Elan…. 2005 prices is what they were purchased at pre sales now they have to sell at that price? holy crap batman!

    very relevant i want to hear more!!

  225. whybuywhenucanrent

    Here’s more on the Jingle Mail, including a ditty to be sung to “Jingle Bells”. I’m sure this will become big news south of the border in the next year as people face up to the reality of mortgages they simply can’t pay.

    Copy and paste as one link (I found it one link downstream from the tinyurl above).

    http://krugman.blogs.nytimes.com/2007/12/20/
    jingle-mail-jingle-mail-jingle-mail-eek/

    again,
    Whybuywhenucanrent?

  226. Annon

    “… Some sort of instruction from their bank customers …”

    Sorry but this isn’t clear to me. So the banks indirectly imply that the appraisers should raise the appraisals or the banks are just rejecting all mortgage application if the appraisals are less than the asking price? If it’s latter, than it does not make sense. Why can’t the asking price be higher than appraisals? If anything, banks can just lend (asking price – appraisal + required down payment) where required down payment is a good/safe percentage of appraisal value. No?

  227. Strataman

    Annon “If anything, banks can just lend (asking price – appraisal + required down payment) where required down payment is a good/safe percentage of appraisal value. No?” I believe what he was saying is the banks were saying exactly that what you said, and the buyers couldn’t come up with the differance. He says most of his appraisals are done for the 25% down group (for whatever reason I don’t know why). I guess the point is the banks are lending 75% on their own appraisal period the rest is the buyers. He hasn’t seen fall thru sales in the past three years , because of this so it appears to be banks not allowing a drop in downpayment %. Nother thing he said is that now they kind of have an industry black book on particular buildings, differant appraisals for roughly the same unit, price degraded by number of non residents in building. We only talked while in line at the theatre so we didn’t get too deep! 🙂

  228. Strataman

    “price degraded by number of non residents in building” oops I meant nonresident owners as in renters, not absentee second home owners.

  229. blueskies

    strataman:
    again great info, now if some mortgage banker type could weigh in this would make a great new thread…. hello rob? anybody home?

  230. Strataman

    blueskies; the way I understand it is thus, condo asking price $50K appraisal comes in at 400K. Bank says we’ll lend you 300K thus downpayment would equal 100K + 50 K or 150 K. That means a 33% down payment right? The appraiser didn’t say if it was due to insufficient funds that the sale failed or that the buyer maybe got cold feet buying something that had to gain 50 K to break even. Yes it would be great if an anonymouse appraiser or bank mortgage officer joined this thread.

  231. Strataman

    asking 450K oops again

  232. blueskies

    yes that is how i understand it..
    3 options:
    vendor lowers selling price
    buyer adds cash
    vendor offers financing

  233. Jeff

    The market has been so (too) strong.
    Watch for a (possible) dramatic pullback in 2008.
    January-March (1st quarter 2008) could see a 10% immediate hit to prices.

  234. blueskies

    could see a 10% immediate hit to prices.

    which would roll back prices to what date?

  235. WoW

    I’m wondering how many agree with Jeff, that the next few months ahead could show a dramatic pullback? Any other thoughts on this? Could we see 10% declines from here in the next 150 days?

    Rob?

  236. News Flash

    “a close friend who is an appraiser says their company is appraising condo’s at 2005 prices”

    Then he is not appraising properties. He is telling the bank what the 2005 value was. An appraisal is the current market value, not one from years past.

    The bank of course has the right to not lend more than X% of appraised value. Why not just say we will not lend more than 50% or what ever of the current market value? Anyone who has ever been in either end of a loan knows this. The lender can choose what % they will finance of an asset based on various risks. For the bank to ask an appraiser to give them some false number makes no sense. For the appraiser to give some false number makes no sense.

    You did manage to suck in blueskies with your story though.

  237. News Flash

    “Any other thoughts on this? Could we see 10% declines from here in the next 150 days?”

    No, but we could easily see 10% up in the first 5 or 6 months.

  238. News Flash

    With all these US links posted over the holidays I can only assume two things:

    1. The bears didn’t get what they wanted for Christmas…again.
    2. The numbers coming out soon will be very bullish.

  239. whybuywhenucanrent

    Like it or not, I think it’s shaping up to be another red-hot winter for most housing in Vancouver. The burbs may stall out, but if you scan the MLS listings for houses, inventory is way down. There’s very little for sale. Anything attractive moves fast.

    I’d bet $$$ that a turnaround will come, it will burn lots of folks who didn’t want to be speculators, they just wanted to own a place to live.

    But it’s not arriving just yet. Too much $ is still flowing in from elsewhere, too much Olympic-sized hype, and these new 40 year zero down mortgages are market-helium.

    Again,
    Whybuywhenucanrent?

  240. coco

    Regarding bank appraisals….. most people are unaware that banks will require an appraisal for all properties priced 750k and up, even if you are getting 100k loan and have a huge down payment now.

  241. coco

    Strataman,

    Re: appraiser….is this Fraser Valley condos they are appraising or where? Some of the prices in the valley are pretty soft in some areas.

  242. Strataman

    coco; he works vancouver, burnaby,new west and coquitlam.
    newsflash; My understanding is they are working on historic sales prices, most of what he is doing is stuff that sold two years ago by contract and is now being sold on MLS so they are using the contract prices until they see a pattern. He says established buildings such as Azura, Aquarius, Kings Landing etc have a history and are holding value at 2007 prices. (Because I asked on these which I am particularily interested in). New buildings with over 40% investor owners are the ones he is talking about. I did say I don’t know if this is relevant given the time of year it is.

  243. coco

    Loan losses will rise by as much as 27% for Canada’s banks in 2008, says Citigroup analyst Shannon Cowherd. But the losses come off the back of historically low levels.

    The biggest headwind for Canadian banks is likely to be further fallout from the U.S. subprime contagion, Ms. Cowherd says.

    “For 2008, there will likely be additional writedowns and capital ratio reductions,” she says.

    The Citigroup analyst says earnings will not recover until 2009.

  244. coco

    One can only wonder when Canadian banks start writing down higher subprime losses next year, if mortgage interest rates will rise once again.

  245. coco

    U.S. home price plunge in 2008 may prompt home builders bankruptcies

    http://tinyurl.com/2pzcbp

  246. Popeye

    The sheer volume of rentals listed on Craigslist indicates the inability to sell units snapped up by the speculative craze of the last three years. There were no less than 900 rentals in the month of November alone. For these investors and speculators alike, this has become plan “B”, meaning “I can’t sell it, might as well be a landlord” to cover the month-to-month costs attached to the investment.

    To be sure, these costs are high, in the order of hundreds and even thousands of dollars per month, and more if the property is encumbered by a mortgage.

    This is a sure sign of trouble.

    Now, Mr. newsflash, see if you can shoot this down.

  247. Crabman

    No, but we could easily see 10% up in the first 5 or 6 months.

    So we go from being 50% overvalued, to 55% overvalued. Just that much more painful when the correction comes. And Vancouver goes from record low affordability to even worse affordability? http://www.rbc.com/economics/market/pdf/house.pdf

  248. Crabman

    S/B from 50% overvalued to 65% over…

  249. Annon

    ” … Now, Mr. newsflash, see if you can shoot this down.”

    Personally I wouldn’t worry about News Flash, his knowledge is limited to the last 5 years of stellar RE growth in Vancouver. But my impression is that most readers here want to learn a more realistic long term view.

  250. $fromA$ia

    Canada Bank mort rate is increased, lending rate decrease, less money lent by lender for mortgages.

    Looks like a Canadian CRACK.

    Also looking at US downturn of the ten US places most hit most if not all were in California and Florida while I am sure in places not so popular had modest price increases.

    In GVRD, I find Vancouver homes to be undervalued compared to the rest of the Lower mainland. I think either all the outlying municipalities will hit a decrease or Vancouver homes may bump up.

    It the ripple effect. If Vancouver, I say east Van is what I am looking at, prices don’t get in line then I am sure prices will correct. How much is a crap shoot in a crack house.

  251. $fromA$ia

    Comments please.

  252. blueskies

    leading bear indicator:

    satv has disappeared……
    buh bye!

    newsflash will fold his tent fairly quickly and drag his broken down camel back into the desert……..

  253. Strataman

    “newsflash will fold his tent fairly quickly and drag his broken down camel back into the desert……..

    not nice blueskies, newsflash lays awake at night doesn’t sleep, he’s leaveraged to the hilt, counting the days till May till he can flip and finally have some equity. Have some Xmas spirit! The poor guy is young and nieve! 🙂 He thinks this is a “normal” market cause he’s never seen otherwise!

  254. $fromA$ia

    Camel toe inspector’s from the middle east, what can I say.

    SATV is BLING BLING

  255. blueskies

    OK i’ll take one of the nasty things i said back

    heading out with our uber-realtor this pm for a look around should be innerestin’ will report back……

  256. -A-

    Looks like Rob can’t handle the truth so he edits the poignant truth pointers.

    But, month end is just around the corner, and his badly inadequate and bruised conscience will get some numbing yet one more time.

    I can just picture Rob stepping out of his tax deducted car, making his way up the slime and fungi buttressed unsafe stairs of the dilapidated east end crack house to pick up the rent cheques.

    He composes himself, and thanks his lucky charms, that the conflicting emotions will need only to be endured for a short while.

    He is disgusted by the dog mess on his shoes, and the guilt from living off the avails of the aging couple who pay him 80% of their income for sub standard shelter, and the part time hooker and single mother who is high as a kite, but still reminds him that there is still not heat in the child’s bedroom.

    Number please Rob. Love your blog keep up the good work.

  257. Priced Out

    “We’re a big boy now,” Bob Rennie said of the Ritz-Carlton prices. ‘As locals, we’re always going, “It’s a bubble, it can’t last, we can’t take it.’
    ‘But foreign eyes look at our city completely differently.’

    F11, today’s Vancouver Sun

    I could say a million things, but I gotta run. Have fun.

  258. Snick

    “Bob Rennie said of the Ritz-Carlton prices. ”

    Soon enough, they will be Ritz Cracker prices for those cracker boxes he’s still a’shillin’.

  259. Snick

    A, some further observations…

    And, as Rob turned, he espied a piece of fluff on Aaron Best’s new suit. He deftly picked it off and growled, “Ya gotta keep up appearances, you schmoe!”

    (Aaron was, off course, still in Coquitlam desperately trying to flog the house on King Albert St. and had merely lent the suit to Rob.

    His latest showing was for a couple in their early twenties who were eager to “get into the market” because, “the Olympics were coming”.

    Aaron reassured them in earlier conversations the “he would see what he could do”.)

    With Aaron coincidentally on his mind, Rob speed dialled Aaron and beseeched him, “Whaddabout that shack on King Albert, anyway? Snick’s on my ass again! You tryin’ to make me look like a fool?”

    Aaron replied, “But, what about that new suit?”

  260. -A-

    Rob, you are always challenging the bears to drop by your office for a cup of coffee and to show the “truth”, so here is a challenge to you….

    Give us the list of the houses / suite you manage or own.

    Just so that we know you abide and conduct your business within the ethical philosophy which you imply.

    Got something to hide?

  261. -A-

    snick do you want to set up a blog where we can document this, so that if Rob edits we can still communicate?

  262. Whybuywhenucanrent

    $fromA$ia–

    I don’t think incremental rises in interest rates is likely to be the straw that breaks this camel’s back.

    The camel’s back will probably break at some random point, there will be a change in mindset, and all of a sudden the wind will be out of the market. Then it will take another year or two to start to sink. I have no idea if it will be sooner or later.

    Are you comparing Vancouver Eastside to, say, Burnaby or New West? Houses in Vancouver proper do seem to be a future blue chip investment that will weather the fall better than condos or outlying houses. There will always be an endless supply of places to build condo towers, but the percentage of housing units as houses will always be declining, giving them a slight brace against a falling prices.

    It’s a matter of price compression. Where are relative prices different than historic averages? If you figure Vancouver eastside is relatively lower than the burbs compared to historic trends, then maybe it is a good time/place to buy.

    But anyone would be nuts to put $ in this market, the downside is so great, the upside is zilch unless the market **stays** red hot for **a while**. If you want to make money, short a bank.

    Again,
    Whybuywhenucanrent?

  263. Newcomer

    The way I see it is that Vancouver is, as has been said, “the bubbliest place in North America.” It’s not just raw prices, but the affordability and the relative prices. That tells me that the Vancouver market is driven by emotion to an even greater extent than other NA markets. If this is the case, we would expect the correction to be steeper than in other NA markets. I expect to see prices to stay still (just the same way that the Coyote hangs in the air after running off a cliff) in the spring and then fall like a rock in late spring, coincident with Canada announcing that it is in a recession. I expect 30 to 40% in the first year with even more possible if the recession lingers and hits BC hard, which it could very well do.

  264. Snick

    -A-, no need, IMO

    “People like him” are usually “revealed” by “people like us”.

  265. -A-

    Snick, you’re right.

  266. A Looser

    I recently saw appreciation numbers for Van West that are still over 20% a year. It was more than double East Van, North Van, Burnaby and Richmond. More than triple, even quadruple, many other suburbs.

    I propose that this continue rapid rise, while other areas moderate, undermines the “blue chip” aspect of Van West. Its probably overshore money and and local speculator groups (pooled money) that are doing this and that money will quickly pull out. Van West may fall further and faster than other areas.

  267. A Looser

    overshore=offshore

  268. Whybuywhenucanrent

    > Its probably overshore money and and local
    > speculator groups (pooled money) that are doing
    > this and that money will quickly pull out. Van
    > West may fall further and faster than other
    > areas.

    Do you really think so? The norm on the westside is owner occupied houses with low turnover, and this doesn’t seem to have changed in the last couple years. Various neighborhoods have weathered previous booms and busts with relatively little impact.

    I think the 2007 rise in Van West is just a response to price compression elsewhere–all the other housing types rose a lot in 06, and decreased the relative difference between Van West and other areas (East Van, Burnaby, downtown condos), and when the other areas held their value, folks saw that the blue chip RE looked to be a fairly good deal–pay $700 for a downtown condo or $800K for a handsome craftsman bungalow in Kits?

    I don’t see speculators buying free-standing houses on the west side, it’s mostly people who have bought to stay. Do you have any areas, housing types or demographics in mind that you think will be the first to fall?

    Again,
    Whybuywhenucanrent?

  269. Give us the list of the houses / suite you manage or own.

    In Rob’s defence, I rent a place that he used to manage, and he is a good manager. Fair to the tenant, and to the owner.

    He doesn’t manage my place anymore, because the owner formed a numbered company to hide assets due to a divorce. The place is now “managed” by an accountant, but the reality is that the accountant does not know his arse from his elbow, and is in fact mis-managing the property.

    I would rent from Rob anytime, and I would have him manage for me if I was in such a position.. He really does not deserve the flak that he takes.

  270. Snick

    Oh, alright then. I’ll rent a “suite”from him, but not a “suit”.

    But, only under duress.

  271. Domus

    This is not a Rob Chipman bashing forum. I do not understand why so many people spend time and effort insulting the host…..it does not feel right, whatever your disagreement.

    I am almost always in disagreement with Rob: yet, I don’t express personal views on him and, more importantly, I never had the impression that he is a fundamentally dishonest person. To the contrary, he tries to express his arguments (however flawed) in a reasoned and intelligent way.

    I would never think I should be the one to defend Rob. I actually have tried not to step into this for a while. But I think some contributors to this forum have lost sight of the issues and resorted to unpleasant personal attacks on Rob Chipman.

    Rob is a realtor: he makes probably very good money from his job. He also probably works hard. He defends his business and I don’t expect him to concede that RE is a bad investment any time soon: that’s his job and so be it. try to argue with him on the actual issues.

  272. News Flash

    “not nice blueskies”

    If you can’t win the debate…or even respond with anything but a unrelated US link…then attack the person.

  273. A Looser

    I think Van West real estate stats include downtown condos. Also many other condos in Western half of Vancouver. I was including all those super expensive condos in what I was saying.

    As for SFH in Van West, very few are true SFH in many areas like Kits. They are little apartment buildings and may even be divided into condos. This is not your fathers Van West of past booms.

    Its those million dollar condos that I see as a weak point, in large and small buildings. Mind you, suburban condos are extremely vulnerable too. Any area where the amount of building has vastly exceeded the true population increase. And we know our population increases have been modest.

  274. Domus

    Going back to RE in Vancouver: anyone knows whether there is a tax hike on homeowners from January 1 2008? Just curious.

  275. Domus

    The debate is being won consistently on the basis of arguments, Newsflash. I think that is clear: say what you ant, we are heading for a big crash in this city. People will get hurt and will ask for a bailout.

  276. blueskies

    If you can’t win the debate…or even respond with anything but a unrelated US link…then attack the person.

    ad hominem –
    Definitions from Dictionary.com
    Appealing to personal considerations rather than to logic or reason: Debaters
    should avoid ad hominem arguments that question their opponents’ motives

  277. News Flash

    “The sheer volume of rentals listed on Craigslist indicates the inability to sell units snapped up by the speculative craze of the last three years.”

    Actually it indicates a lot of people who bought properties are investors and not speculators. If you just wanted to sell the property it makes no sense to rent it. It is much more difficult to show and sell a rental than a vacant “brand new” property.

    “There were no less than 900 rentals in the month of November alone.”

    That just shows Craigs list is a popular way of advertising properties as it is free, easy to use and works well. Vacancy rates are at all time lows and rents are at all time highs which is what you measure the strength of the rental market by, not number of posts (many duplicated many times over) on Craigs list.

    “For these investors and speculators alike, this has become plan “B”, meaning “I can’t sell it, might as well be a landlord” to cover the month-to-month costs attached to the investment.”

    Clearly people are not trying to sell their properties as indicated by the extremely low inventory levels.

    “To be sure, these costs are high, in the order of hundreds and even thousands of dollars per month, and more if the property is encumbered by a mortgage.”

    I would bet the vast majority of rentals advertised on Craig’s list are cash flow positive. For example with Spectrum which has many listed, most land lords bought the pre sales back in 2004 and would be cash flow positive.

    “This is a sure sign of trouble. Now, Mr. newsflash, see if you can shoot this down.”

    Like shooting fish in a barrel. If there was trouble vacancy rates would not be at all time lows, rents would not be at all time highs and MLS inventory would not be declining.

  278. News Flash

    “Definitions from Dictionary.com”

    I rest my case.

  279. Snick

    re: Rob, “…try to argue with him on the actual issues.” -Domus.

    Tried that MANY times. Doesn’t work.

    He comes across as a manipulative and hypocritical know-it-all who tries to squash anyone who disagrees with him.

    I feel NO sympathy for him.

    Good luck!

  280. Whybuywhenucanrent

    Okay, I see possible weakness in downtown condos different from the west side in general, how about if we just talk “non downtown west side”.

    I did some searches at http://www.realtylink.org, separating the downtown peninsula from the west side, and got the following:

    West Side:
    – SFHs: 291 listings. I’m thinking this is a very low inventory. Is historical data posted anywhere? Only 20 houses are listed at less than a million, median price $1.75M.
    – Condos, townhouses, duplexes: 410 listings. Anyone know how that compares with historical #s? Median price of condos is $450K 74

    Downtown Peninsula:
    – Condos, townhouses and duplexes: 734 listings. Median price of condos is $543K.

    Note that there’s more condo inventory on the downtown peninsula than there is west side SFH and condo inventory *combined*! And the downtown condos are prices $93K, or 20% higher than the west side condos.

    So I can see the downtown peninsula taking a hit. I’ll be surprised to see the west side taking a hit. I think it will perform as it historically has–first to go up, last to go down…

    I do agree, though, that the chintzy condos in Kits might not hold value as well as, say, a 2 bedroom bungalow.

    (Also, 74 of the west side condos/townhouses/duplexes are at UBC. Leaving only 336 listings on west side proper.)

    Thoughts on these numbers?

    Again,
    Whybuywhenucanrent?

  281. blueskies

    Vacancy rates are at all time lows and rents are at all time highs

    with 200+ rentals available (immediately) at the Spectrum alone your vacancy rate is not “low”

    “Definitions from Dictionary.com”

    I rest my case.

    you are resting your case on a “strawman”?!
    at some point we will have to review your debating “skills”

  282. Domus

    “He comes across as a manipulative and hypocritical know-it-all who tries to squash anyone who disagrees with him.”

    I think you might just say that he tends to be aggressive and is unable to concede to other people when they provide compelling arguments.

    I would not go into the personal invective, that is my point.

  283. Strataman

    newsflash”I would bet the vast majority of rentals advertised on Craig’s list are cash flow positive. For example with Spectrum which has many listed, most land lords bought the pre sales back in 2004 and would be cash flow positive.”
    Yes your right except they can’t rent them! I am very familiar with that set of buildings and they are asking the same rent as condo’s completed three years ago. Spectrum condo’s are substandard junk, they don’t even have a full sized fridge, finish quality is well below Azura 1 and 2, as is sq ft for a one bedroom. Newsflash they can’t rent them at the same prices, thus they will have to drop well below cash flow positive. They will have to attract the people who are renting for $800 a month in as you say no vacancy rental buildings. So how do you attract people that can maybe squeeze another $50 or $100 bucks in rent? You have to ret a 1 bedroom at Spectrum for $900.00! That is NOT cash flow positive! If your asking $1300 and your place is empty for three months (which is the case) you have already lost $300 a month rent! If some sucker rents it for $1300 they will soon find that they could have gotten a far better place for the same rent, so they move and the landlord looks at a vacant suite again. This is a fact and 200+ listings for Spectrum (there are several other rental sites with these units), means CASH FLOW NEGATIVE, which means in the spring these stressed investors will dump them or go under subsidizing $900 a month suites! 🙂

  284. blueskies

    http://tinyurl.com/298kmx

    On housing
    In January 2007, the chief economist at the National Association of Realtors said, about the housing market, “The steady improvement in [home] sales will support price appreciation … [despite] all the wild projections by academics, Wall Street analysts, and others in the media.”

    ….snip……. To be fair, though, plenty of smart people didn’t see how painful the housing market would become as a result of the crumbling lending market.

    “…will support price appreciation….”

    there you go …the holy grail…. anything to support price appreciation

  285. Strataman

    Dec 25 – $1300 / 1br – *BRAND NEW* 1 Bedroom apartment – plus cableTV/internet/gas/elect (Yaletown – Vancouver) pic

    Nov 14 – $1395 / 1br – *BRAND NEW* 1 Bedroom apartment – plus cableTV/internet/gas/elect (Vancouver – Yaletown) pic

    http://tinyurl.com/yvdkj9

    A typical Spectrum unit it started at $1500.00. (Read Nov 14 annd you will see the original rent requested) 3 months rent lost =$3900 (using lowest) / 12 = $325 per month. Effective rent income if rented in February is $975/month for landlord. If place becomes vacant again (likely), they will be able to compete with 30 year old apartments at $800. SOME INVESTMENT don’t you think Newsflash?

  286. A Looser

    Spectrum landlords are also competing against rental houses. I know of four young adults who just started renting a 4 bedroom/2 kitchen/2bathroom/large deck/yard/garage house for $2000/month near Hastings. Their average rent is $500 plus a few dollars more for utilities. Three of the four (one is a student) have good jobs but chose not to rent those expensive new condos.

    $2000=4 bedroom house
    $1500= 1 bedroom apartment

    WTF?

  287. Strataman

    I rent for $1400/month in the Azura Complex including secured parking, (Recently went up $50 was $1350). I have 200 sq ft more then said unit plus a great amenities club. My son rents a beautifull 2 bedroom in Kits for $1000.00 including secured parking in a RENTAL building which he just got in October. My daughter is doing the house thing as well, $400 with 3 roomates, 2 bath 4 bedrooms. Spectrum investors strike me as amateurs.

  288. $fromA$ia

    Please no more US links.

  289. blueskies

    Spectrum investors strike me as amateurs.

    amateurs can be trained, unfortunately the process is not without substantial pain and considerable expense…..

  290. blueskies

    $fromA$$: why not?

  291. Whybuywhenucanrent

    Hey $fromA$ia

    What do you think of those low west side inventory numbers?

    Here are the numbers for the east side:
    – SFH 457 listings, median price $758K (price must be up quite a bit from a year ago, anyone know if this is high or low numbers? It’s 50% more than the west side)
    – Condos, townhouses, duplexes: 287, 48, 57 respectively, or 392 listings total
    median price on condos $335K

    Still want to buy one? Here’s a possible “crap shoot on a crack house” for you in Strathcona V675210 1800 sf, 1960s house.

    Again,
    Whybuywhenucanrent

  292. A Looser

    I am not going to try to figure out December inventory. Wake me up in about two months.

    The relative difference in median price for SFH between Van West and Van East is quite steep, but I guess its been like that for a long time. Van West being slightly more than double Van East.

  293. Please defend the young Solipist

    “In Rob’s defence, I rent a place that he used to manage, and he is a good manager. Fair to the tenant, and to the owner.”

    Solipist, it’s not your fault for thinking the way you do. I understand you have a young child, and I am well aware what sleep deprivation can do to the mind.

    Try to think clearly for a moment, what kind of damage the Robs and the Rennies are doing to society.

    People are going to get hurt when the bubble pops; people are going to get hurt if the bubble does not pop.

    But the RE pimps make money either way, with little regard for the consequences others will suffer.

    Sure it’s legal-not much of a justification if you ask me.

    I have read your blog, and I can’t quite reconcile the general thrust of your ideas with defending the inexcusable and callus disregard for others the specuvestors express on this blog.

    -A-

  294. blueskies

    and callus disregard for others the specuvestors express on this blog.

    greed breeds contempt

  295. WoW

    I think Rob conducts himself very well (a bit one-sided for my tastes, but he does not resort to personal attacks) – if you want to go on the attack, attack his viewpoints with conterpoints – not him directly.

    That said, I’m looking forward to watching things unfold this spring – it does seem different this time – see today’s financia post front page – this sub prime stuff is global (based in principal on global bubble (the US is just the leading indicator, imho).

  296. Dmello

    Spectrum is cashflow positive for the majority of owners. I own 4 units all making me money.

    Bought each unit at presale for $250k, and each unit now has a $150k mortgage at 2.9% for the first 3 years. (special low rate offer from builder)

    That’s a $700/mo payment plus $200/mo strata fees.
    Each unit is currently rented for $1200-$1400/mo.

    Since purchasing the presales, the units have appreciated close to 40%.

  297. paulb

    The Rob hating is just an ego stroke. People get so worked up over nothing. Who cares if he thinks real estate is going to tank and does not come clean. The market has been out of whack for years. Who is to say it cant keep going for a year or two more… Stranger things have been happening here since 2004.

  298. WoW

    dmelo

    if i buy them from u at current prices and pay current mtg rates, at current rent do they flow positive?

  299. $fromA$ia

    Look at the comparable single detached homes available in each of the regions in the lower mainland.

    You may feel that East Van houses are a cheap in comparrison.

    Do a search from $400k to $600k. Proximity to downtown commute..caompared to the same in Richmond or Coquitlam. East Vans not bad.

  300. M-

    Dmello: you’ve also put a very significant 40% down on your units, and haven’t accounted for opportunity cost. I’m getting 5.25% on some GICs I picked up a couple months ago. On $100K, that’s worth $440/month.

  301. ObserverX

    Dmello: What are you gonna do when the rate resets to 6%?

  302. Whybuywhenucanrent

    I looked at the inventory numbers over on Paul Boenisch’s Blog. ( http://www.northshoreproperties.ca/ click on “inventory charts”) and the 850 for East Van and 1450 for Van West are consistent with the previous two years (a little lower for Van West this year). But he doesn’t break down inventory between the downtown peninsula and Van West either. Anyone know of other sources of historical data to find out whether it’s “normal” to have an equal or greater number of listings from downtown as from the entire west side?

    Again,
    Whybuywhenucanrent

  303. Whybuywhenucanrent

    Looks like Dmello is now paying $4500 per year interest on each unit, or $375 per month.
    When his/her interest rate goes to 6%, it will be $9000/yr, or $750/month.

    Monthly payments will go up to $1075/mo mortgage + $200/mo condo fees, $1275/mo total.

    If rents remain constant at $1200-$1400/mo., he/she will be in the “break even” camp rather than the rev. positive camp. If there are vacancies or repairs, it will dip into the revenue neg. camp.

    do these numbers look correct, Dmello?

    Again,
    Whybuywhenucanrent?

  304. Whybuywhenucanrent

    $fromA$ia–

    I looked at houses in East Van and compared them to Capitol Hill in Burnaby. Prices look pretty comparable to me.

    East Van
    V676816
    V675566
    V676998
    V680486
    All decent houses on nice lots, quiet streets, with suites or suitable basements, prices in the $625 – $725 range.

    Capitol Hill
    V679140
    V680698
    V655217

    By contrast, for the low 500s in Coquitlam you can get these peaches–relatively new or nice houses, views, much larger lots. 1960s houses are built with modern stuff, don’t need new wiring, plumbing like those Van East houses.

    Coquitlam
    V673560
    V673560
    V680029
    V681607

    Prices in Richmond look more like Van East, need to get in low 600s before you’ll find something you can proudly show the in-laws.
    V659452
    V655305
    V680356

    What do you all think–which one should $fromA$ia buy for the best shot at appreciation and best hedge against a crash?

    Again,
    Whybuywhenucanrent?

  305. Whybuywhenucanrent

    It looks like Dmello is also paying down the principle to the tune of $300/unit/month, so it will still be rev.positive at 6%. But the $ is locked up unless its refinanced. So still very rev. positive at 6%. And maybe rents will go up!

  306. Priced Out

    There are a couple of other considerations in Dmello’s scenario. The typical problems with being a landlord.

    Either deal with the tenants directly costing you time and effort (and sometimes frustration) or you hire a management company at a certain cost. You have to allow for the occasional vacancy. There is also insurance costs, eventually repairs and appliance replacements.

    Are municipal taxes in the strata fees? I assume he is paying all his federal taxes, right?

  307. Strataman

    Dmello “Spectrum is cashflow positive for the majority of owners.”
    Then why are there so many vacancies and why are asking rents for the same places (size wize) so much higher than $1300? Why are Spectrum investors trying so hard to rent way above your example, yet slowly dropping their asking rents? Why is there close to 50% vacancy in the buildings? Why would anyone buy your units using your argument; (40 % more) they would be cash flow negative substantially.?

  308. blueskies

    dmello
    congrats!
    you were able to pull off a good deal.
    i’m willing to bet the vast majority of
    landlord type purchases in Spectrum were made with 25% or less down payment.

    most of the wanna be moguls i’ve run into are clueless as to the larger economic picture.

    and i do detect a whiff of desperation in some of the advertising for Spectrum sales and rentals.

  309. $fromA$ia

    Whybuywhenyoucanrent,

    Do you see what I am saying?

    Price and proximity to downtown core.

  310. Disbelief

    It seems Dmello is currently doing well. But there is also the risk factor that is just not present in GIC. I have been a landlord many times and the risk for damage is very real… some renters are like vermin they smoke, sneak pets in and have drinking or drug problems and pretty much care less about your investment kicking holes in the walls or god knows what. Add that risk to the inevitable hit we are going to take.. I say the smart money is sitting safely in GIC’s. I just don’t like this market at all very risky IMO…..

  311. Disbelief

    I know many people that are in it well immersed and trying to persuade me over speaking about how much cash they have made (paper millionaires). I remember people well immersed in BRIC shares saying how they were going to retire early on that garbage and they ended up worthless…. If this market does keep going up and up (not likely) I will happinly move to a warmer climate and let all the fools have this cold rainforest.

  312. Popeye

    Newsflash, the way you responded to my post I can only conclude you are one strange cookie…it’s as though you spend your entire time preoccupied with mythical characters in a fantasy novel, (in this case, the actual state of the RE market). In the face of overwhelming evidence of the coming debacle in the housing market you continue, with the same vigor and determination, to defend the indefensible.
    It would not surprise me if I found that you also believe in UFO’s, the tooth fairy, or that you genuinely believe Santa comes down the chimney at Christmas time. Accordingly, I will not address you personally in future communiqués as this is a waste of my valuable time and, reciprocally, ask that you ignore any of my opinions that I might post to this blog. Thank you very much.

  313. paulb

    Weekly REBGV numbers are up on my site:

    http://www.nvcondos.ca/index.jsp

    Happy New Year!

  314. News Flash

    “Yes your right except they can’t rent them! I am very familiar with that set of buildings and they are asking the same rent as condo’s completed three years ago. Spectrum condo’s are substandard junk, they don’t even have a full sized fridge, finish quality is well below Azura 1 and 2, as is sq ft for a one bedroom.”

    I am not arguing Spectum is a great place to rent or buy. I actually think it is the worst location in DT Van. Never been inside to verify construction quality, but Concord has a good reputation and from what I have seen their quality is never been in question.

    “Newsflash they can’t rent them at the same prices, thus they will have to drop well below cash flow positive.”

    I know they can’t rent them at the same prices as better locations. I doubt they paid the same price as better locations. They are getting enough rent to cover cash flow quite easily from what I have seen.

    “You have to rent a 1 bedroom at Spectrum for $900.00!”

    $900 in downtown is a distant memory. If those trying to rent Spectum are asking too much then they will have to adjust their rents. Although they will still be cash flow positive as much as it bothers you.

  315. News Flash

    Popeye: “In the face of overwhelming evidence of the coming debacle in the housing market you continue, with the same vigor and determination, to defend the indefensible.”

    I am not defending anything. Just analyzing the data. Good or bad, depending on your position, it is still bullish.

    “Accordingly, I will not address you personally in future communiqués as this is a waste of my valuable time and, reciprocally, ask that you ignore any of my opinions that I might post to this blog. Thank you very much.”

    Sorry Popeye if the data and fundamentals do not align with what you want to happen. If you prefer to cover your eyes and ears then be my guest.

  316. Whybuywhenucanrent

    Paul, thanks for the numbers.

    I posted a suggestion to 1) include the number of expirys in the charts, and 2) to separate the downtown peninsula #s from the west side.

    (I see you’ve read it and will consider, thanks!)

    Again,
    Whybuywhenucanrent?

  317. News Flash

    Blueskies: “i’m willing to bet the vast majority of
    landlord type purchases in Spectrum were made with 25% or less down payment.”

    In 2004 Concord Pacific required 25% down for Spectrum presales. Spectrum presales still cash flow with 25% down.

    Let me guess, here comes the US link.

  318. News Flash

    A: “People are going to get hurt when the bubble pops; people are going to get hurt if the bubble does not pop.”

    And somehow Rob and Rennie control this outcome?

    FYI: If “the bubble” does not pop, there is no bubble.

  319. Domus

    Newsflash:

    “Let me guess, here comes the US link.”

    Yes, the US link is alive and well. You are a bit strange at times: you remind me of a passenger on an airplane that is plunging towards the ground at high speed. Everything in the cabin is still in place, there might even be a movie going on and some drinks on the tables, but the jet is going down fast. And you choose to ignore everything outside the cabin and keep on watching the movie on your little screen.

    Maybe ignorance is bliss, but Vancouver’s RE is pretty much done for a few years…..no more appreciation.

  320. News Flash

    Paulb: “Weekly REBGV numbers are up on my site:”

    Paul any predictions for 2008? I noticed you were flagged as the worst prediction on the RE TALKS site for 2007 predictions.

    You predicted 20% down by Christmas 2007 in the GVRD, yet the GVRD was up 12%. That is off by 32% in the wrong direction! You must have some happy clients.

  321. ObserverX

    Newsflash, you make some pretty sweeping statements about Spectrum cash-flowing. Clearly, there are cases where that is the case such as Dmello’s posting above. But note that s/he put down 40% and has 2.9% mortgage interest rate (good for only 3 yrs). What numbers are you using to conclude “cash flow quite easily”?

    Here’s my take using Dmello’s purchase price ($250K) but with a more typical 20% down (probably generous to the typical flipper) and a 6% interest rate:

    Mortgage principal = $200K
    Mortgage interest = $12K/yr or $1K/mth
    Strata = $200/mth
    Prop taxes = say $1800/yr or $150/mth

    That’s a total of $1250/mth, and doesn’t factor in maintenance, vacancies, management time, etc.

    Dmello said s/he was getting $1200 to $1400/mth so it sounds like “around break-even cash flow” rather than “cash flow quite easily”.

    Note also that the calculation doesn’t factor in opportunity cost on $50K down which is about $2400/yr or $200/mth on a 5-yr GIC so if you include that into your calculations, you’re easily in the red (from an investment perspective rather than purely cash flow).

    Now if you want to argue that there are more appropriate assumptions which support your case, then by all means enlighten us, otherwise … well you know …

  322. Domus

    “You predicted 20% down by Christmas 2007 in the GVRD, yet the GVRD was up 12%. That is off by 32% in the wrong direction! You must have some happy clients.”

    Newsflash, timing is almost impossible. I think I’d rather have a RE agent like Paulb who spells out the likely risk at time of buying, than a cheerleader telling me that house prices only go up. Right now they are still going up: they are defying equilibrium and gravity, in my view. These things take time to adjust and when the adjustment comes, it lasts years.

    Paulb is simply stating the obvious, that is the adjustment will be strong in this case. In doing so he got the timing wrong, which is pretty much normal.

    By the way, have you seen the latest trick in the US: short-sales scams.

    http://calculatedrisk.blogspot.com/

    What people do now is buy the discounted homes across the road and then stop paying mortgages on the old ones……this is how banks like Merrill and Morgan Stanley have lost and are still losing billions. It ain’t over yet, in fact we are just at the beginning.

    Paulb will be right on the money with his prediction, maybe he is even a bit on the optimistic side. It hink it will happen soon, but I would not bet on an exact timing.

  323. -A-

    Newsflash: There are some subtleties which you can’t be expected to understand.
    Smart people like Rob and Rennie know this too well, this why they get people like you to the menial work.

    I did not say that they affect the market, (not in the long term). I was only pointing out their coincidental and parasitic gain at the cost of others.

    You know, as maggets feast on the corps, the only difference is that maggets are not free will agents, but are acting on instinct to clean up the carnage, whereas the Robs and the Rennies have the ability to measure the morality of their actions, but are incapable of being moral agents.

    But again, I don’t expect you to understand the concept.

  324. News Flash

    Observex:

    I am not trying to say buying Spectrum now or even in the past (relative to other real estate investments) was good. Just pointing out those who are renting them out now, of which almost all of whom purchased presale, are cash flow positive. It debunks the myth that everyone renting a place is cash flow negative when is fact few are IMO.

    Lets do the math (bears cover your eyes)

    Here is what I have seen:

    Purchase price $230K
    25% down (mandatory for Concord Pacific at the time)
    Current rent: $1350 (asking prices on CL $1500)
    Maint: $150
    Taxes: $75

    Mortgage interest: at todays 3 year rate 5.49% = $789 month

    $789+$150+$75=$1014

    1350 rent
    – 1014 expenses
    ______________

    $336 positive

    So take the $57,500 originally invested and you are getting a 7% annual dividend return. If prices crash and go back to 2004 level in real terms what is the return on the investment:

    Using leverage multiply inflation x 4

    So 7% plus 10% (2.5% x4) and you have a 17% return currently without factoring in the appreciation above inflation over the past few years. Add in rent increases over the years and it looks not too bad to me going forward.

    If you use the 2.9% rate Dmello got the numbers obviously get even better. And I don’t think Dmello is the only purchaser who recieved that rate.

  325. News Flash

    A: “But again, I don’t expect you to understand the concept.”

    Just clarify one thing for me. Are you the maggot or the corpse?

  326. ObserverX

    News, if those are actual numbers you’ve seen, then far be it for me to claim they’re “fantasy”. However, just browsing some of the listings suggests those numbers are not universal.

    (1) Most of the units I have seen have maintenance around $200/mth (and I think the common experience is that strata fees tend to be set artificially low in new buildings).

    (2) The buildings are largely too new to have a stabilized tax assessment but if you look at comparably (asking) priced units in other buildings, the assessments are more on the order of $100+/mth so I presume once things settle down in a year or two, that’s what you’ll see for these buildings.

    Obviously (1) & (2) depend on the size of the unit; these numbers are about right for a 550-600sf place I think — I don’t know what size of unit you’re talking about.

    (3) Not sure where you get the 3-yr 5.49% rate — the best I see right now is 5.7%.

    I won’t argue with your “what if’s” (eg. price returning to 2004 in real terms (or not), rent increases) since that’s all individual speculation but I still think your “known numbers” are optimistic.

  327. Snick

    “Just clarify one thing for me. Are you the maggot or the corpse?” – News Flash

    Who cares as long as you’re buried in a new suit?

  328. -A-

    Newsflash. Am I detecting a mischievous and belligerent attitude from you?

    If so you better smarten up, or I will report you to the blog administrator, who will deal with you appropriately.

    We don’t want any contemptuous smart ass posts on this site; this is a serious medium of information exchange for highly trained and professional Realtors.

    Your attempt at ridiculing this forum is unacceptable.

    One more remark like your last one and the authorities will get involved.

  329. Domus

    From today’s London Times:

    “Losses arising from America’s housing recession could triple over the next few years and they represent the greatest threat to growth in the United States, one of the world’s leading economists has told The Times.

    Robert Shiller, Professor of Economics at Yale University, predicted that there was a very real possibility that the US would be plunged into a Japan-style slump, with house prices declining for years.

    Professor Shiller, co-founder of the respected S&P Case/Shiller house-price index, said: “American real estate values have already lost around $1 trillion [£503 billion]. That could easily increase threefold over the next few years. This is a much bigger issue than sub-prime. We are talking trillions of dollars’ worth of losses.”

    He said that US futures markets had priced in further declines in house prices in the short term, with contracts on the S&P Shiller index pointing to decreases of up to 14 per cent.

    “Over the next five years, the futures contracts are pointing to losses of around 35 per cent in some areas, such as Florida, California and Las Vegas. There is a good chance that this housing recession will go on for years,” he said.”

    Hey, newsflash: care to comment???? Is Vancouver different? Why?

  330. Domus

    Some more for a happy ending of 2007!

    ““This is a classic bubble scenario. A few years ago house prices got very high, pushed up because of investor expectations. Americans have fuelled the myth that prices would never fall, that values could only go up. People believed the story. Now there is a very real chance of a big recession.”

    He pointed out that signs at the beginning of 2007 that had indicated that some states were beginning to experience a recovery in house prices had proved to be false: “States such as Massachusetts had seen some increases at the beginning of the year. Denver also looked like it had a different path. Now all states are falling.”

    Until two years ago, each of America’s 50 states had experienced a prolonged housing boom, with properties in some – such as Florida, California, Arizona and Nevada – doubling in price, fuelled by cheap credit and lax lending practices to borrowers who ordinarily would not have been able to secure a mortgage. “

  331. blueskies

    newsflash:

    why do you hate America?

  332. blueskies

    california dreamin’

    http://tinyurl.com/2d54ne

    🙂

  333. -A-

    Domus

    What Shiller says has to be taken with a ton of salt.

    Newsflash, Tqn, etc. are highly trained individuals who listen to the Bill Good show, watch Debbie on TV, and some of them have even quoted Patricia, so you know their opinion comes from a solid base of knowledge.

  334. blueskies

    -A-
    just about spit beer all over my keyboard, but then i realized you were being facetious …..

  335. News Flash

    Observex lets use your numbers for maint and taxes and you can look up the posted rates at canadamortgage.com to confirm 5.49%:

    Current rent: $1350
    Maint: $200
    Taxes: $100

    Mortgage interest: at todays 3 year rate 5.49% = $789 month

    $789+$200+$100=$1089

    1350 rent
    – 1089 expenses
    ______________

    $261 positive

    Just for fun lets do them at the 2.9% rate that those who bought Spectrum have for the next 3 years:

    $500+$200+$100=$800

    1350 rent
    – 800 expenses
    ______________

    $550 positive

    Pretty much all they need is $800 rent per month to stay cash flow even. So much for the bailing on negative cash flow theory.

  336. News Flash

    “Hey, newsflash: care to comment???? Is Vancouver different? Why?”

    Japan went up 900% before correcting. It has been correcting for 16 years now.

    1. If we are going to be the same as Japan we have a fair bit to run up before the correction happens (100% is a big difference from 900%).

    2. If we are looking at a 16 year decline then you had better take up another hobby because it won’t be time to buy for a while yet.

    You have to remember Shiller has been selling doom and gloom books for 10 years now. He has made a small fortune doing it. He is hardly an unbiased observer. It wouldn’t be good for book sales to say anything different

  337. blueskies

    newsflash:
    your “happy-landlording” scenario doesn’t cut it.

    you are missing the big picture:

    real estate is local
    credit is global
    big credit bubble spawned
    multiple asset bubbles incl. RE

    the music stopped in Canada in mid August
    Vancouver apparently is “last man standing”
    2008 is gonna be real interesting.

    the reason i high light US stuff is what happens
    in California doesn’t stay in California, what is happening done there now will be happening here right quick. we are being given a warning
    if we fail to act on it…… well those who ignore history are doomed to repeat it

  338. Strataman

    And if you bought one today
    newsflash example;
    Purchase price $230K
    25% down (mandatory for Concord Pacific at the time)
    Current rent: $1350 (asking prices on CL $1500)
    Maint: $150
    Taxes: $75

    Mortgage interest: at todays 3 year rate 5.49% = $789 month

    $789+$150+$75=$1014

    New owner at 339,000 (1 Bedroom with parking) Pretty typical of recent listings here.
    25% down=$84,750 @5.49%
    Maintenance fees $199.00 (actual).
    Taxes 1200/annually
    Mortgage amount $254,250.
    Total Mtg Payment 1559.79
    Total Monthly Payment 1758.79
    Less rent if you have to rent $1400.00
    Net loss 358.00/month

    Base on absolutely no vacancy for even a month. Who the hell would buy something like that? One bedroom units sold for more than $300,000 will never sustain themselves, they have to be flipped in a couple of months.

  339. Strataman

    Sorry; MLS: V680562

  340. Snick

    News Flash,

    You wouldn’t happen to be sporting a new (or “newish”) suit, would you?

  341. blueskies

    anybody here drive an SUV?

    paid cash?

    LA Times article 🙂

    http://tinyurl.com/yt8d9y

  342. blueskies

    ever hear of a city named Seattle?

    who woulda thunk?

    http://tinyurl.com/2qpm2g

  343. A Looser

    Notice the “stunning views” in the Seattle story. A bunch of typical, boring concrete buildings.

    The SUV story is hilarious. If I do something stupid like that, do I get to be in the newspaper? Never borrow to buy a car. I bought my car for $5000 because that was the cash I had to spare (it was a sweet deal, as a relative just wanted to get rid of it), and I’ve been driving it for a year with almost no repairs in that time.

  344. Anonymous

    blueskies
    December 30, 2007 at 7:26 pm
    anybody here drive an SUV?

    paid cash?

    —————–
    What’s cash? That’s so old fashion!

  345. domus

    Newsflash:

    I have got to tell you, mate…..you are delusional if you think Shiller is saying this to sell his books. But if it makes you sleep better…..

  346. -A-

    The Seattle story is somewhat unsettling given the city’s proximity to Commercial Drive, and only a couple hrs drive from Lululemon Headquarters and Victoria Drive & Hastings.

    Perhaps it’s just a temporary lull before the market re ignitions.

    Don’t those American Fools know how close they are to the best place on earth which is about to send its calling card to the rest of the world?

    Clearly the guy who is trying to sell his condo by lowering the price is oblivious to Newsflashonomics.

    Rob, your science based numbers please.

  347. domus

    “Clearly the guy who is trying to sell his condo by lowering the price is oblivious to Newsflashonomics.”

    ….hmmmm…..maybe he is thinking to invest the proceeds in Spectrum….hey, Newsflash, you should give a ring……

  348. Brittany Spears

    ALL YOU BOLGGERS CAN CALCULATE ALL YOU WANT.
    MARKET = “FEAR & GREED”

    Q4.999 2007 = FEAR ++++++++++

    Q1 Q2 Q3 Q4 2008……. = MORE FEAR

    ARE YOU BLIND?

    DO YOU HAVE NO ECONOMIC SENSE?

    ARE YOU OBLIVIOUS TO HISTORY & THE HUMAN DYNAMICS OF MASS PSYCHOLOGY?

    THE MINDSET IS HERE, NOW.

    GET IT , GOT IT, GOOD.

  349. Newcomer

    Preview:
    (and, no, it’s not from the States)
    http://www.inteldaily.com/?c=140&a=4603

  350. coco

    2008 rate increases…..

    In Vancouver, residential property taxes may rise by 6 per cent in 2008 to fund more Olympic spending and big union pay increases.

    The British Columbia Utilities Commission has now approved the request which will see the price of natural gas increases effective January 1st 2008. The 4% increase is expected to raise the price for natural gas to the average home in this region by about $43 to $52 dollars per year.

    BC Hydro Rates for residential customers will jump 11 per cent over three years — about $7 a month more for the average homeowner by 2010 — while rates for business and industrial customers will decline.

    Property management fees for stratas increase annually.

    Strata fees will automatically increase due to higher gas, electricity and property management fees next year.

    Mortgage rates continue to rise.

    ICBC to raise rates 2%

  351. coco

    Even the Journal of Commerce – Western Canada’s Construction Newspaper warns….

    http://tinyurl.com/2u2wj8

  352. Popeye

    On this last day of 2007

    WISHING YOU AND YOURS A HAPPY AND PROSPEROUS NEW YEAR .

    My predictions for the new year…

    1. Prices across the board will decline 10% by May, and by a further 15% by October.

    2. By November, 25% of realtors currently in the industry will quit.

    3. Satv will not win the Nobel Prize for Literature in 2008.

    Acknowledgement: None of the contributions I have made to this blog over the past year would have been possible without the help of my girlfriend Olive Oil, and our little girl Sweet-Pea.

  353. WoW

    WoW, that UK article was eyeopening.

  354. coco

    Strataman,

    You forgot to add in the 2008 – 6% property tax increase, plus the increase in strata fees to cover higher gas, electricity and property management fees.

  355. coco

    Yes, you have to pay income tax on your rent revenue too.

  356. coco

    Depending on your tax bracket that $200.00 to $300.00 rent profit may get eaten up pretty quickly.

  357. coco

    Newsflash,

    Are you a landlord?

  358. Strataman

    One thing I would like to mention based on my experience working with dozens of strata councils, buildings with a high ratio of investors to resident owners (over 60% investors for instance are badly managed. Investors will not approve preventitive maintenance which will reap rewards a few years down the line. They will generally control the strata council, and veto any long term maintenance. I feel incredibly sorry for owner residents who buy into these complexes, as they have no say against the 60% who want to flip. In my business we turn down strata’s with more than 40 % investors, as they are really not interested in building maintenance as they intend to flip, and will sacrifice short term gain for long term costs to the building. Luckily there are a fair number of good strata councils, with large numbers of resident owners, these are the only ones I will contract with. (By the way a resident owner includes those owners who use there units only a few weeks of the year). My advice to prospective buyers of condo’s; find a building with a council comprised of resident owners, stay clear of investor dominated councils, as they do not care about your costs 3 years hence! 🙂

  359. coco

    Same thing goes with buildings that the majority of owners are younger people. Mortgaged to the hilt, with very little or no savings, they do not want to spend more money for maintenance or anything else.

  360. Strataman

    coco;” they do not want to spend more money for maintenance or anything else.” Very true coco! I know of several couples who have been unable to fix their garburator for several months! Fancy that you have a half million condo and you can’t phone the repairman cause $100 bucks is too much! 🙂

  361. coco

    Some people seem to think that that real estate gravy train will never end. Home prices will continue to rise and people will come up with the money to afford to buy no matter what the cost.

    When a realtor sells a home, they do not see the flip side of the owner trying to make the mortgage payments, coping with property tax increases, higher mortgage rates when they renew, utility rate increases, strata fee increases, etc. A major repair bill or job loss, can throw them into financial turmoil quite quickly.

  362. WoW

    Realtors meet a demand for services (whether real or perceived or regulated) in the marketplace – lay off the realtors, GREED buy specuvestors is what has caused this bubble, fueled by record low interest rates when LTMC was going down the tubes (know what LTMC stands for, and the implications of this crises, and what Mr. Greenspan did in response (and why!:))?.

    Oh, those not aware of history are doomed to repeat it….

  363. coco

    When your mother or grandmother talked about the depressions….as a young adult you never thought it could get that bad again. Then you lived through a recession yourself, not that pleasant. Job losses, competing with 500 – 1200 applicants for every help wanted ad, high unemployment rates, employment benefit cheques running out because you can’t find a job for months on end or even a year or more, house prices dropping, unable to enroll in university because there is no room available everyone is retraining for different jobs, etc.

    Twenty somethings and even some early thirty somethings have lived through good economic times the last 16 years and seem to think nothing will ever change. Their parents have talked to them about recessions, but like us when we were younger we thought it could never get that bad again.

    As time passes and with age… economic cycles have shown us something quite different than what we first believed in too.

  364. Grin and Bear It

    The over 90’s have steadily increased. This number seems more significant than the others. Am I wrong about that?

  365. coco

    What is happening in the U.S. is signaling that the economic cycle we have been enjoying for many years is changing into something else. This maybe a recession, inflation, deflation, stagflation, etc. Although the Fed is making every effort to try to keep the economy stable. Will it succeed is the big question for 2008, so far things are still wobbling.

    Since 76% of Canadian exports go to the U.S. and Canada’s economy is super dependent on the U.S. some of us on the blog are very interested how any changes in the U.S. economy will effect Canada.

    Bear with those who post U.S. links, as people are very interested in which direction the American economy is heading and if Canada’s economy will follow.

    Of course, housing prices are part of the picture too, as prices rise, fall or stay stable depending on the strength of the Canadian economy.

  366. Priced Out

    http://vancouver.craigslist.ca/rfs/524373621.html

    “PURCHASING REALTOR TO RECEIVE BONUS FOR SALE!!”

    This doesn’t seem right to me.

    I wonder what Rob would have to say?

  367. M-

    WoW: that should be LTCM (Long Term Capital Management).

  368. WoW

    M – oops, sleep deprivation – thx.

  369. robchipman

    Priced out:

    ““PURCHASING REALTOR TO RECEIVE BONUS FOR SALE!!”

    This doesn’t seem right to me”.

    Nothing wrong with it as far as I can see. Here’s what you have to remember: commissions are completely negotiable. That means the agent and his/her principal (whether buyer or seller) negotiate (at least to some extent) how much the agent will be paid. That extends to the split between a listing agent and the cooperating selling agent. Its often assumed that a 50/50 split is the norm, but this is, accurately speaking, very seldom the case. The split can be anything at all, from 100%/0% to 0%/100%.

    In a rising market where listings are gold the split is under pressure to favour the listing agent. When the market goes the other way you’ll see more pressure to adjust the split to favour those Realtors who have buyers.

    Bottom line, there is nothing wrong with the bonus. Restricting a bonus would likely be in contravention of federal competition law, and would, in any event, be a clear restriction of trade. The bonus is arguably good for consumers, and is disclosed to both buyer and seller.

    Priced out: what strikes you as problematic about the bonus?

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