Erroneous Theories For Falling Prices #3 – Vancouver RE Bears Caused The Crash

“The common theme I see in your “anecdotes” is YOU! There is no shift in the “general mood”. YOU are the catalyst bringing down the mood among your friends. I can only hope you don’t have too many friends, or you will singlehandedly bring down the market.”
- ‘Anonymous’, at VCI 21 Aug 2012, in response to ‘Makaya’ posting two stories of people becoming bearish on the Vancouver market

Cause, effect; Cart, horse.
It is common, as speculative manias implode, for ‘naysayers’ to be blamed for the shift in sentiment.
But those same bears went unheard when the market powered ahead. Suddenly, inexplicably, people start listening to bearish predictions? No, the market turns of it’s own accord, and the sentiment change reflects the turn, not the bears suddenly gaining attention.
- vreaa

Regarding this series:
There is only one BIG reason for falling prices in Vancouver RE: the speculative mania is over.
That is all you need to know to explain the price action that will play out over the next few years.
On the way up we had people attributing price strength to all sorts of bizarre and invalid causes: the Olympics, running out of land, etc. On the way down we expect similarly bizarre arguments for price drops; commentators will offer many erroneous theories as to why prices are falling. We’re already beginning to see them, and the crash has barely commenced.
We’ll collect them; please submit new examples you come across. – vreaa

#1 – Climate Change Caused The Crash
“Prices will continue to fall, as outside buyers from other Provinces such as Ontario, Alberta and Manitoba finally realize that climate change has now become an important issue in British Columbia. What was once an enviable temperature and small secret now has become a drag, as the winter, spring and summer months are now cooler and wetter than before.”
- thinkandact, commenting at the Globe and Mail, 2 Aug 2012

#2 – The Conservatives Attacked The Vancouver Housing Market And Caused The Crash
“The reality is that because banks also own investment dealers, their CEOs would prefer to see more Canadian money flowing into the equity markets rather than into real estate. … I wouldn’t be surprised if Prime Minister Stephen Harper, a trained economist, has been influenced by a Zambian-born economist in crafting mortgage-amortization policies that may kill the Vancouver housing market and create significant hardship.”
- Charlie Smith, Georgia Straight, 3 Aug 2012

#3 – Vancouver RE Bears Caused The Crash
“The common theme I see in your “anecdotes” is YOU! There is no shift in the “general mood”. YOU are the catalyst bringing down the mood among your friends. I can only hope you don’t have too many friends, or you will singlehandedly bring down the market.”
- ‘Anonymous’, at VCI 21 Aug 2012, in response to ‘Makaya’ posting two stories of people becoming bearish on the Vancouver market

13 responses to “Erroneous Theories For Falling Prices #3 – Vancouver RE Bears Caused The Crash

  1. It was the Bloggers Wot Done It!???

  2. There is a strong reflex in humans to want to shoot the messenger…

  3. A bunch of anonymous spineless bloggers can bring down a multi-billion-dollar industry. Do you realize how empowering that would be if it were true? Which is why, on this Labour Day, it might just be true.

  4. Here in LA I’m hearing many areas didn’t even correct very much. My family here said that the easterly suburbs corrected much more than the areas closer to the coast. I have family in Alhambra, San Gabriel, & El Monte. They are telling me these areas declined 10-15%. Not too bad considering what we hear about the SoCal market. So, are we going to have some areas keeping their values???

    • Did the areas that haven’t corrected very much (yet?) have as-large run-ups in the boom? If so, what has happened to rents in those areas through this time?

  5. Banks + government + bulls blow the bubble; Savers are paying for it against their will; Bears are blamed now; Free market will be blamed eventually; Misguided protesters will call for more “regulation”.

  6. It was me, I admit it. I singlehandedly crashed the market. Today Vancouver, tomorrow the World.

  7. Just read that Dublin prices are down 57% and Irish prices are down 47%. But since we are different in Canada it won’t happen here.

    As an anecdote, my cousin is a Mortgage broker in White Rock who claims that detached homes are motoring ahead in WR but agrees that Condo prices are down. She bought a condo 2 years ago for 265 that she has listed for 245 with no takers. But she is sure that her 2 detached houses won’t suffer the same fate! Detachment from reality or what!

  8. Pingback: A Journalist’s Richmond Tales; And His Caution – “It could be argued that the operators of these bear sites are hoping to trigger a “bubble collapse” simply by writing about it all the time, and offering opinion biased in that direct

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