“In Vancouver, for example, listings are running 20% ahead of last year while sales sag by the same amount. Richmond’s sinking. Condos have turned turgid and illiquid. But the real news is what’s being heard on the street.
“People now think it’s a bubble,” our well-connected realtor source reports, “and so they are hesitant to buy. The main change now is that people actually think this is over and the only ones here buying are the few remaining Chinese and those who just can’t avoid a transaction (or whose fortunes do not depend on it). Looking forward to the month-end stats – they will be brutal with (again) only 2009 being worse in the past decade.”
- Garth Turner at greaterfool.ca 29 Feb 2012
Most Recent Comments:
- James on “I had a work colleague approach me today to ask about buying a condo in New West. She had no idea about the economics of ownership and real estate.”
- Brian on “The bank encouraged her to take the equity in her home to purchase another home. She bought a 2nd home at the peak.”
- investigativezim.com on Consequences, Intended and Otherwise
- Nemesis on “The bank encouraged her to take the equity in her home to purchase another home. She bought a 2nd home at the peak.”
- dumpster diver on “The bank encouraged her to take the equity in her home to purchase another home. She bought a 2nd home at the peak.”
- Joe at Kits on “The bank encouraged her to take the equity in her home to purchase another home. She bought a 2nd home at the peak.”
- YVR Housing Analyst (@YVRHousing) on “The bank encouraged her to take the equity in her home to purchase another home. She bought a 2nd home at the peak.”
- tedeastside on “The bank encouraged her to take the equity in her home to purchase another home. She bought a 2nd home at the peak.”
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- an observer on “The bank encouraged her to take the equity in her home to purchase another home. She bought a 2nd home at the peak.”
- ex-kitsie on “The bank encouraged her to take the equity in her home to purchase another home. She bought a 2nd home at the peak.”
- Real Estate Tsunami on “The bank encouraged her to take the equity in her home to purchase another home. She bought a 2nd home at the peak.”
Type of Anecdote
- 01. He Said, She Said (247)
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- 04. Changed my Career (38)
- 05. Where do Buyers get the money? (962)
- 06. Held my Nose and Leapt (96)
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- 12. Effects of Development (274)
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- 16. Missed The Boat? (236)
- 17. The Froogle Scott Chronicles (27)
- 18. Spot The Speculator (171)
- 19. BlastRadiusPostCards (17)
- 20. The Limitless Demand Argument For Ongoing Market Strength (70)
- 21. Vancouver RE-Verse [Found Poems] (8)
- 22. RE References In Popular Culture (41)
- 23. Jumping The Shark (1)
- 24. Policies On Housing (10)
- 25. Epigrams For The Bubble (1)
- 26. Premature Calls Of "Bottom" (3)
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- 28. Erroneous Causation Theories For Falling Prices (7)
- 29. Bubblespeak (1)
- Uncategorized (176)
Blogroll
- 01 Vancouver Condo Info
- 02 AmericaCanada [retired, no archive]
- 03 Housing Analysis
- 04 RealEstateTalks BC
- 05 Vancouver RE and then some
- 06 Whispers from the Village on the Edge of the Rainforest
- 07 Greater Fool
- 08 Canada Bubble
- 09 Rob Chipman's blog
- 10 YatterMatters
- 11 condohype [retired; archives available]
- 12 vancouver (un)real estate
- 13 Agent Will's Stats [retired]
- 14 Landlord Rescue
- 15 The Economic Analyst
- 16 Canadian Housing Price Charts
- 17 Hoodsurf [retired Jun 2011]
- 18 World Housing Bubble
- 19 Vancouver Price Drop
- 20 North American Economics
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Latest Anecdotes:
- “The bank encouraged her to take the equity in her home to purchase another home. She bought a 2nd home at the peak.”
- “Let’s remember how we got here” – Looser and Looser CMHC Limits
- Don’t Worry, I’m Sure Somebody Will Sort This All Out – “Policymakers now know better and will be a lot more proactive in preventing a collapse.”
- “Things have changed, we are not doing that type of mortgage. We are not interested at all.”
- “We are noticing our target type of housing in price decline, albeit slow, as our money increases in value, slowly as well but outpacing housing.”
- Renter Buys In West Van – “For a few hundred more per month, you could own the place. Which is what I will be doing as my offer for a place down the street has been accepted. There is some value in staying in one place.”
- A Bed in the Bathroom, Why Not? [Let Us Count The Reasons...]
- “My husband and kids are pretty happy in our rental house within cycling distance of work that we could never have afforded otherwise. We’re doin’ pretty dang well, thank you, for median income earners in this expensive city.”
- “I Wish Them Bad Luck.” – Jim Flaherty, on those who wish to profit from Canadian RE price drops
- “We asked why he doesn’t just rent the whole house. He said he can’t, it wouldn’t cover his mortgage – he’ll get more to rent it out as two suites. These new landlords are hilarious, thinking that rent will cover their mortgage!”
- “My neighbours, in their late 60s, just put their house on the market. They had said they would die in that house, but now they are worried that with the housing market going south they may be losing a lot of equity and they better sell now before it gets worse.”
- Chat Thread
- Taking A Break
- “My best guess: this property is now an ‘investment hold’ and will be built ‘when prices recover’. Good luck on that!”
- Man Loses $745,000 Vancouver Condo Deposit
- Graphic – Degrees of Housing Overvaluation in Canada
- The Rare Individual With A Negative Ownership Premium
- Advice Regarding Renting In Vancouver, Please – “Unfortunately, the Vancouver rental stock is absolutely atrocious. It just seems like every landlord is looking for someone to pay 100% of their mortgage on a crappy place through rental income.”
- “I just visited Manhattan for a week, and happened to snap some real estate ads on both the Upper West and Upper East sides of the island. Compare to Vancouver. It simply doesn’t compute.”
- Ben Rabidoux In Vancouver Next Week
- “The mortgage company told me they were calling in my 40-year, 0-down mortgage. I have paid nearly sixty thousand dollars towards it, but, nearly five years in, I have yet to touch the principal.”
- ‘Vancouver City Hall: Housing Report Card 2012′; Plus Revised Version
- “My folks find themselves at 65 still owing half the value of their home and recreation property to the bank. After almost 30 years of ownership in the BPOE and a number of boom markets, they have very little to show for it.”
- “Rent for $2,200 a month or buy and have a mortgage of $4,310 per month. Why would anyone buy?”
- “They were talking about two couples they knew who had recently bought a lot and planned to each build a house on it and live as neighbours.”
- Greater Vancouver Home Builders’ Association Annual First-Time Buyer Seminar Attendance Plummets
- Mom and Pop Get It Wrong In All Markets, Time And Again
- The average British Columbian homeowner is not going to pay off their mortgage by the time they retire.
- “He’s sold all his properties except his current one, which is now for sale. He explained that the market’s currently in crash mode, worst that he’s ever seen.”
- “One of my old high school buddies finally got her mother to sell the family home in Kitsilano – sold for over $1M, monies realized after debt paid off $185K.”
- “I know someone who just declared bankruptcy because her condo was assessed at $150k and she bought it presale north of $250k in 2005 or 2006.”
- Sturdy, With Views – “Calling Froogle Scott!… Is Dr. Scott ‘In The House’?” [Not In This One, Certainly]
- “She said the market was dead in Victoria and that it would remain so for a very long time. I asked how she knew. Her answer was fascinating and should scare the pants off the real estate crowd.”
- Kits Notes – “I’m pretty sure that this is the first 3+ bedroom property of any type that I’ve seen in the 5 years I’ve lived here that is priced below $700K.”
- “A beautiful Belfast home, in the equivalent of 1st Shaughnessy, bought at their RE peak in 2007 for £3.5 million, has now sold for £800K, almost 80%-off. The market didn’t suffer any significant economic shocks. Rates & unemployment didn’t skyrocket. They didn’t build more land. Sentiment just changed and the prices fell and fell.”
- “Two family members of hers are trapped, underwater, in condos on the East Side.”
- “Interprovincial migration is not saying good things about BC’s economy.”
- Vancouver RE: Not As Expensive Provided You Don’t Think – “It’s clear that our perception of affordability has been coloured by living on a continent where housing is unusually inexpensive.”
- More Undisclosed RE Industry Insiders Publicized As Clients – “In 1995, Allan and Karin Hoegg were mortgage-free. But no more. Today their Vancouver home is a valuable source of income as they plan for full retirement.”
- Rumor that some OV units will be reduced by 20%.
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How come “consensus opinion is immutable” is never mentioned by the “it’s different here” crowd?
Another quote for the archives:
“It’s unfortunate … but, we figure, maybe it’s time to move out. Sometimes you have to make those sacrifices when you have a young family.”
Read more: http://www.vancouversun.com/business/fair+promotes+booming+north/6232586/story.html#ixzz1nsl25HWz
It’s over. Put a fork in it.
And it’s going to be real messy, I’m not cheering it – trust me.
It will be interesting to see whether YVR and TO follow the pattern of the US and Ireland (huge drops in overpriced areas, hitting bottom after 2-3 years) or the UK model – 15-20% drop very quickly, followed by sideways movement for a few years. Some of the more bearish investors in the UK are getting impatient for the BIG crash – which in my view may never come.
Anyone got any predictions for the shape of the Canadian downturn?
put it this way, how has japan RE been doing last 30 yrs. it depends on whether market and/or policy response addresses root causes.
“how has japan RE been doing last 30 yrs”
It’s still very expensive in many places.
@A. Point was price declines could take decades to complete, depending on xyz. Since Japan never really addressed their root causes, one could argue their bear market still has a whole other phase yet to play out. Hint: it does. Otoh, I believe Icelandic RE is probably near a real bottom.
First off, even 15 – 20% is going to be catastrophic for the economy, and for many over-leveraged real estate owners. Heck, it’s going to be catastrophic for people who were actually responsible during this time… which sometimes makes me wonder “why bother?”
Second, even in the 15-20%-plus-sideways-for-a-couple-of-decades model, it’s still a major issue. Sideways means depreciation in real money as long as there is also typical 2 – 3% inflation. My math is probably screwed up, but at 2% inflation for 25 years you end up with 50% depreciation in real dollars. Add that to the initial 15 – 20% drop and you’re sitting near to 70% overall drops.
While the second phase (sideways) seems less destructive, it does have detrimental effects for those who are not prepared… which is why I know the answer to “why bother?” I.e., it’s because prudence now will allow me and my family to cope quite reasonably during stagnation.
The boom’s been going on so long that people forget: Land generally appreciates, structure ALWAYS depreciates. You spend money to maintain it every year for 50 years, then somebody tears it down. So if you bought a large house on a small lot (or worse yet, a condo), you should EXPECT depreciation.
Good point Ralph. And that’s why condos will be hit first and hit hardest.
“So if you bought a large house on a small lot (or worse yet, a condo), you should EXPECT depreciation”.
So buying a small house on a large lot is preferable? I think this is what HAM have been doing – smart!
The problem in the US is the need for most households to deleverage. Government policy is unable to stoke the economic fires again when everyone wants to pay down their debt. This can go on for ??? Japan is entering their third decade of deflation.
The U.S. is somewhere between a 1/3 and 1/2 way done deleveraging.
http://www.ritholtz.com/blog/2012/02/household-deleveraging-slows-recovery/
I’d aim for 1999s level of debt, at least as a starting point.
For fun only
scenario: inflation, tax increase, reduced spending, demand decrease, equity drops, lending rates rise, liquidity tightens, competition for income/revenue, asset perceived as liability, default.
wildcards: liquidity for borrowers in US election year leaves Canada trade surplus worth less unless it’s inflated artificially with our own currency devaluation. Oil embargo fast tracks energy sector.
key mystic trending dates: Mar 29, April futures, July 1, Oct. pre US election jitters.
Volatility until April, inflation increase July, price reduction to October. Commodities up.
Feb numbers are in at Larry’s site. MoM sales are up 50%. Listings are quite high. If listings don’t flood in this spring, it could be a more balanced spring. I guess we are waiting some more 😢
Volume interpretation is difficult without candlestick chart to show bid entry and close. Transition begets volume, bear or bull.
MOM is always high in Jan-Feb due to seasonality. I may be wrong on this but it’s looking “toppy”; you better be good at retrieving near-perfect boasts in this market, I don’t think there’s much left to cook.