betamax at vancouvercodo.info 11 Sep 2010 1:36pm – “Just talked to someone who works for a large company that just completed a multi-year construction mega-project costing hundreds of millions. The company does not have a single job lined up afterward and they’ve laid almost everyone off as of now. Only a few in management remain, the person I talked to being one of them, and he’s scared that he’s next. And the only new jobs out there are relatively small jobs that everyone is competing for, and the winning bids are so low that they’ll likely lose money. It’s the beginning of the wave, and there will be more mortgage defaults in the years to come as construction unemployment spikes.”
Renting at vancouvercondo.info 11 Sept 2010 9:55am – “A friend who owns a drywall company says rates are now at 50% of what he was getting a year ago. Too many people bidding on too few jobs. Another friend in construction folded up his company with 12 employees recently because winning bids were coming in at 50% of what he had got for the past 8 years. It wasn’t worth his while to keep doing it. Both of these guys have large mortgages they likely will not be able to afford with their new significantly lower incomes. One of these guys has $1 million variable rate mortgage with only his wife’s income. Pretty much every penny goes to housing costs. Each quarter point rate hike cost them another $200 per month. These guys believe if they can just hang on to their levered assets things will be fine as prices will always go up. I think both will be forced to sell at some point over the next year. Credit cards can only last so long and there is nothing to indicate their past incomes that are required to support the mortgages will return.”
Music to my ears. The construction industry has been such a ripp-job for too long.
Let’s face it- for too long the economy here has been based on the selling, buying, marketing, building, renovating, maintaining, and furnishing of houses.
It’s not just Vancouver, it’s all of North America that went through this, but Vancouver is an extreme example. Hopefully this will bring a return to building stuff that adds value to the economy.
Very ell said. I called it the end “Of the Brushed Aluminum and Granite Countertop Era”.
i had stainless steel appliances in a previous life. What a hassle- every time you open the fridge or dishwasher you need to clean the door of fingerprints.
I would never get them again but i suppose it was a brilliant way for appliance makers to put a strip of metal on a door and charge 30% more.
There will be no shortage of these stories in the coming years. You will see how just many people’s employment was based in one way or another on the housing industry. The obvious hands-on construction trades, like drywalling, will be first, then the real estate agents, marketing, etc., then the mortgage industry. When these laid-off people are seriously over-extended with no money to spend, retailers, restaurants and nearly everything else will follow over the cliff.
It’s very grim. I wish you guys the best.
You got that right Snats. I am not looking forward to it as it means a lot of pain for a lot of people. Many will need to move from Vancouver to find work which will further depress the housing market.
As an anecdote, I park on top of the SAP building by Yaletown. Circa 2006 it was jammed by 830 with lots of pickup trucks and tradesmen parking there in addition to office workers. These days it is barely half full…..