- chart care of b5baxter at vancouverpeak.com, who adds “May should be interesting to watch. Will inventory increase rapidly as it did in 2010 and stay in record territory or will it fall below the 2010 levels?”
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Type of Anecdote
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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
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- 14 Landlord Rescue
- 15 The Economic Analyst
- 16 Canadian Housing Price Charts
- 17 Hoodsurf [retired Jun 2011]
- 18 World Housing Bubble
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- 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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Anecdotes Banks Bears blogs British Columbia Bubble Bulls buyers Canada Capitulation China CMHC Construction Debt Economy Employment Fear Foreign buyers Fundamentals Government Housing Interest Rates Landlords Life Media Mortgage brokers Okanagan Olympics Ownership Prediction Real Estate Realtors Relationships Rent Retirement RE_ATM sellers Sentiment Speculators Toronto US Vancouver Victoria Visual Anecdote Whistler
This is not really uncharted territory. From jesse:
April month end inventory
1995 19298
1996 19374
1997 18969
1998 20578
1999 16958
2000 15823
2001 14921
2002 12275
2003 10213
2004 9913
2005 11637
2006 9638
2007 12135
2008 15218
2009 14891
2010 15620
2011 14187
Thanks; true.
‘Uncharted’ in this chart..
Actually, one could add, “uncharted since the bubble began”.
“uncharted since the bubble began”.
Uncharted since the popping of the previous bubble?
Somewhat unrelated, but should make a few of us here smile.
http://business.financialpost.com/2012/04/27/cmhc-could-be-pulled-out-of-mortgage-insurance-business-flaherty-says/
Flaherty has no plans to increase the MI cap? I’m sure he doesn’t. I’m starting to think he doesn’t understand what his government actually owns.
Daring Friday commentary: CMHC isn’t the problem any more, but it will be the “solution”.
The inventory rise I see this year is more conducive with slowing population growth than what we saw in 2008, which was likely more credit-driven — population growth in 2008 and 2009 was well above the 10 year average and allowed inventory to be absorbed more quickly than it would have otherwise.
The other stat to watch is CMHC starts and completions. We should see additional inventory in the latter half of 2012 as the recent uptick in starts begins to translate to completed units. That will have some short-term effects on inventory but — just a guess — no matter what the starts and completions, high prices will elicit enough for-sale inventory to cause prices to fall. Or put another way, it’s unlikely that prices will stay high by virtue of low completions. Maybe, but I’d be surprised.
“it’s unlikely that prices will stay high by virtue of low completions.” – jesse
This concept confuses govt. The regulators and academics think it’s a matter of adjusting price and credit to stimulate a market, or limiting supply to induce demand. Just as realtors think promotion, and developers think product and location. They don’t understand that a market creates itself and its own demands. People will stand in line all night if they want something, but people aren’t seeing anything they like, at least not to go into whacko debt. There was a big market, now there is a smaller market. Just like in the previous post, “RBC Anticipates”, banks see it as a price decline down to what the market will bear, when it’s actually a decline in the market. The market finds it’s own solutions.
We potential buyers be fickle beasts. People sense that being forced into speculation or risk losing savings to inflation is unnatural. Cash is supposed to be king. But banks have promoted debt instead of cash reserves because they can sell the debt on the open market like an asset. (Nice low interest scam if you can carry on the down payment until you sell to an investor.) People who paid high prices will realize they were just creating their own debt and nothing else. Value became disengaged when land prices shot up to almost par with residential, when there were bidding wars, and no time for inspections. But it was only a short while ago when tenants paid the mortgage and the buyer only needed a down payment. Now tenants don’t cover the cost and the buyer needs inflation to defer profit. Looking ahead, those futures don’t look good. This is the problem with notional valuations.
Friends I yak with, are worried that if they buy now and pay monthly, their wage won’t be enough if cost of living continues to increase. People are less concerned about price, but that the price exceeds reasonable value. The split between actual value and inflation is apparent. So if they have to sell, they know they’ve overpaid and risk not finding another who will overpay. The speculators and foreign investors are bidding against themselves, and that does not make a market. The real market is the buyer who has a need and requires a good. Potential buyers I talk with don’t express much need, other than cash.
For a system that survives on inflation and finds itself cornered into zero interest, the only thing it can do is print money and try to raise wages. But the feds are laying off people. The banks same. The only way it could get worse is if a big percent of our GDP was in a trade surplus with a country who is actively trying to devalue their currency. Oops. Anyway, thanks for inspiring this rant. I feel better.
Here is a fun ad from the Georgia Straight today that insults our ability to keep a woman unless we buy one of their houses. Is it the top when they have to play into our primal urges in order to sell their homes?
http://goo.gl/1Ps6n
Ray, many thanks… excuse me while I headline this.
Oh where oh where is ‘condohype’ when we really really need him.
Coaxable out of retirement for a comment on this beauty?
If you take the emotions out, its easy to make perfect predictions-
Namely…
* prices will return to 3.5x incomes, which means an average 60-70% drop or MORE if the economy in Vancouver continues to unravel…
*this process starts fast and slows as it approaches the bottom, and takes about a decade to run its course.
*vultching doesn’t have much effect, when the bottom is close NOTHING sells
* this CMHC debacle is going to cost the taxpayers about an entire years worth of government revenues from all sources when TSHTF. Expect dramatic cuts in services and programs and significant tax increases for about 20 years, if you thought the Martin/Klein kinda cutbacks were brutal you ain’t seen nothing yet.
* the effect of this unravelling should have interesting social consequences given how elderly our demographic is going to be evolving over the next 20 years
*the world has changed and a lot of whats out there will simply be unsaleable, with the spectre of much higher taxes and energy costs, there are huge metroploitan zones that will essentially crash for keeps, think ‘Detroit’
*the social consequences should be pretty negative, there’ll be people trapped in areas they can’t (or stubbornly won’t) flee, people paying higher tax on RRSP withdrawals than they would have to have paid the taxes up front, and I would imagine the domestic violence, divorce, suicides and laid off workers ‘going postal’ will explode as this all falls apart.
This is going to be a long long process and a lot of unforseen consequences, and nobody is going to benefit from it. Buckle up!
whiteshoes
Unless you’re a renter working in repo, then it’s a golden time to enjoy cheap toys. Maybe buy a patch in the country. I recall the eighties as a time of community, simple pleasures, the era of the house party. There was an undercurrent of street-level creativity. This was pre-police , of course, when we would gather and mingle looking for free entertainment unimpeded. Skunk, personal computing, and Men without Hats were the prime accomplishments of this period. College was also cheap and you could always get piece work telephone soliciting. Accessing government services was like getting soup from a stone, but a beef dip and a beer were two bucks at the bar. Pole dancing was born. In Calgary, people were walking away from $70k mortgages in Temple and Falconridge. The Dow was 1700 and interest rates were 12%. Gas was 40 cents a litre. People also severely kicked the tires before buying anything and debt was a bad word. (We made money selling wood stoves and firewood.) That’s when the phrase “trapped in a mortgage” was born. Camping was quite popular and anyone on the street could show you how to fill out your unemployment cards.
Good times.