“The [softening] stats may be true in Van, but I just observed the most unbelievable sale. My friend bought a Kits bung in 2002 for $578,000. Listed it this week, one showing on Tuesday for 1.5 hours, closed the deal today for $1,975,000. One happy friend, about to experience real freedom.”
- landlessinvan at greaterfool.ca 2 Feb 2012 at 5:04am
Smart move by the seller.
‘Freedom’, at the expense of the new buyer.
- vreaa
Though you might be interested in this. It’s the partial text from an email that was sent out by the Canadian Association of Accredited Mortgage Professionals (CAAMP):
“CAAMP is advocating the following fundamental messages:
Government has already tightened lending criteria significantly and mortgage volumes have decreased;
The issue of lenders and the mortgage insurance ceiling has nothing to do with lending practices, but rather liquidity and capital requirements;
Arrears and defaults in Canada remain low and are declining;
Homeowners have significant equity and are paying down their mortgages.”
(…)
“As an industry, we are vigilant and cautious against further measures that could precipitate a weakening of the housing market.”
I don’t have an original copy of the email, but the text above was posted on Canadian Mortgage Trends (CMT).
What CAAMP is doing here can be explained two ways:
A) They are issuing talking points to rally the troops in an effort to pre-empt any tightening of mortgage rules. This email will no doubt find its way into the inboxes of every broker, lender, realtor, and ultimately most would-be mortgage applicants in the country.
B) They are already laying the groundwork for scape-goating when the market does collapse.
Interestingly, after leaving half a dozen heretical comments, CMT decided to block me. They don’t want their bubble pierced until they’re damn well ready!
The headline of the post says it all doesn’t it?
Avoiding policy-made crisis
Thanks RR, this is a great post. If you don’t mind, I’ll share your comment on VCI. Lots of bloggers there will be interested to know it as well.
You’re welcome. Feel free to use it as you like.
The “policy made crisis” was cheap money and excessive credit starting in 1999-2000, that’s what the article is about, right? Right?
Thanks, Raging Ranter, for yet more good info.
Maybe that Kits lot was a view lot? In any case, here’s some anecdotal evidence of a possible slowdown: given my commuting and walking patterns on the West Side, I’ve started to see:
1). For Sale signs mushrooming all over the place — there are about 5 in about 1 block of Blenheim just north of 33rd alone. At least one of those houses was on the market last fall.
2). Open houses with nobody coming by. Checked out two just-built houses in my old neighbourhood and my new one today. The realtor at the first nervously asked me what I thought of the price. The realtor at the second told me the price for the house he was showiing was “already reduced.” (Mind you, it was way down to $3,280,000.)
Both houses were cheap-looking inside and out, if I may say so, despite the disclaimers on the usual frothy descriptions about “superior materials and workmanship.”
3). Just down the street, it looks like there’s a bored and lonely realtor sitting in the front window of a newer house up for sale that had another open house just last week.
One trend I’m noticing that seems newer: a lot of the For Sale signs are on houses that were built in the last 5 years or so. Don’t know what this means, but I’m wondering if these had been built/bought by investors.
I’m also seeing some flipping going on.
Transactions produce no economic output, they simply transfer existing capital around.
Earnings matter. Eventually.
“I’m also seeing some flipping going on.”
Correction — some attempted flipping. We’ll see if it turns into flopping.
Anyone have any news on Richmond? I saw a guy from the planning department there give a presentation to a bunch of Developers in California not long ago. He showed at least a dozen renderings of pretty big and ambitious condo projects – many along the Canada Line. Everyone was a bit shell shocked – to see the optimism there so out of whack with reality here. When I lived in Vancouver, Richmond was the place that was supposed to liquify in a seismic event.
Resale homes are not selling well. I’ve driven by many presentation centers, and they look dead. My wife was at 2 today with a friend, Gardens on no 5 rd and Orchard on Odlin rd. gardens was busy but Orchard was dead. I would imagine these are uneducated buyers that have no idea what the situation is for RE at this time.
Lots more completions slatedfor this year. Stay tuned!
calgary herald running a cult of ownership story
Here’s a question. How much would that same house have sold for if it were just a vacant lot? The difference would be the value of the house itself.
The empty lot price, minus demolition and removal fees, would be the value of the house itself.