“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.”

“My old high school pal works at a Belfast, Northern Ireland newspaper – The News Letter – I believe it is the world’s oldest, continuously published paper. Unlike Vancouver journalists he regularly wrote “this is a bubble” articles during the incredible real estate boom that Belfast endured. It was at LEAST as extreme as the 2000-2012 Vancouver bubble period. Their bubble burst in 2007 and real estate has been a taboo topic at middle-class dinner parties ever since. I must say, my return visits have been much more enjoyable since people there stopped crowing about their real estate winnings.

Anyway, his latest of many articles highlights the plight of the owner of a beautiful home bought at the peak in 2007 for £3.5m. The area is the equivalent of 1st Shaughnessy. It has just sold for £800,000, or [almost] 80%-off. I must stress that 80% is not indicative of the average market which ONLY fell about 55% from peak.

Why this is relevant is that the Northern Ireland market didn’t suffer any significant economic shocks. Rates didn’t skyrocket, neither did unemployment, there is a huge percentage of people there who have safe government jobs with pensions. They didn’t build more land; and for those who don’t know the geography, Belfast is surrounded by the Irish Sea and an agriculture land reserve where there isn’t sea.

Sentiment just changed and the prices fell and fell. I will also add that my friend was considered a kook when he quoted the rare economist who called for a massive price correction. People just couldn’t conceive of such an outcome.

If you’re interested in the article it’s available here.”

- Ulsterman at VCI 29 Mar 2013 9:38pm
—

A story for Vancouver RE market observers that requires no commentary.
- vreaa

The Vacant Lot of Versailles, Richmond.

- from ‘E’ via e-mail to VREAA 22 Mar 2013. Thanks to ‘E’, who also wrote:
“My husband snapped this pic at 16500 Westminster Hwy, Richmond, on his ride home from work yesterday. He dubbed it The Vacant Lot of Versailles. If you squint and tilt your head just the right way, you can almost see it.“

“Mere mortals could not afford housing in Vancouver even back in 2004.”

“Moved from Montreal to Vancouver, stayed six years, (got-the-hell-out-cause- I-didn’t-like-it), moved out to Ottawa. In each city I had a job waiting at 90K range.

Mere mortals could not afford housing in Vancouver even back in 2004. House was fully paid off in Montreal, even with that equity we realized we were going to have the largest mortgage ever. With wife and three kids, living in a condo was not considered, so we moved a little east of the city – Pitt Meadows, commuted into Vancouver for work. Wife gradually found self employment – accounting – in small businesses locally. Loved the views, hiking with kids in the mountains, crossing to Victoria by ferry.

Shocked by real estate prices. Stunned by the cost of everything else. Couldn’t believe that salaries in general here were Lower than Toronto, Ottawa and Montreal. Where in Vancouver would someone bring up a couple of kids on 60k? Where did the 35k salaries live? Was not impressed by the theatre and music scene. Good Chinese food, and Indian food, but otherwise, Vancouver does not hold a candle to Toronto/Montreal/Ottawa. Only place that made real bagels seemed to be Granville Island. Drove down Hastings Street one day. Remarkably like NYC of the seventies, down and dangerous.

Was slightly depressed by weeks and weeks of cloudy days. Missed the changing of the seasons. I love a sunny cold winter day, so bright with the sun reflecting snow. Came to realize that there were no advancement opportunities in my industry. (Like most other Vancouver industries, only a branch office in town.) A survey of some neighbours’ professions: Two teachers, one small business owner, four retired.
Realized that there would be nothing for my kids to do once they hit teenage years in Pitt Meadows. Take a 1.5 hour bus ride to see a band downtown? If would be a pain for them to go to either UBC or SFU.
And where would they live as adults? Love my kids, but after a degree, you’re out. Didn’t see a future for them here.

Moved to Ottawa. Housing is aprox 1/3 the Vancouver cost. We live 20 minutes drive from downtown and Parliament buildings – in traffic. Oldest attends Carleton U, also about 20 minutes away, by bus. High school is 4 minute walk for other two. We lucked out at Canterbury High.
Unknown to us when we moved here, it’s the city’s premier arts school. Incredibly motivated kids apply to attend Canterbury from all of eastern Ontario. We happened to move into its catchment area.
Ottawa has Carleton U and Ottawa U. Montreal (1.5 hour drive.) has Mcgill and Concordia U, if the kids want to adventure out to another city and/or immerse themselves in french language.
Ottawa has virtually no reports of grow-op busts, unlike west coast.
Ottawa has NAC, and host of other theatres, many museums, byward market. Rideau canal has pleasure boating in summer, and becomes world’s longest skating rink in winter. Hiking and cycling, cross country sking in Gatineau park is great. Montreal is 1.5 hours drive with major Jazz/music fest. Many of those acts come to Ottawa the week before or after.

Kids still facebook old buddies from the Pitt. Several bored buddies are serious dopers, dropped out, etc. We’ll go back to Vancouver to visit, but never to live.”

- Dadeedumer at VREAA 9 Mar 2013 11:57am

Thanks for sharing your story, Dadeedumer.
We bemoan the fact that RE prices have driven many from Vancouver.
And we agree that, by 2004, prices were already overextended beyond those supported by fundamentals.
- vreaa

Their Children Have Left Vancouver – “One of the rarely discussed consequences of the huge RE price inflation in Vancouver has been the separation of the extended family.”

“Cheaper housing, follow me.”

“One of the rarely discussed consequences of the huge RE price inflation in Vancouver has been the separation of the extended family.
My own adult children have left their home city (Vancouver) partly because of better opportunities elsewhere, but mainly because of the ridiculous cost of housing. The dream of raising a family in a single family home in Vancouver is an illusion. Their options are to commute hours a day or live in a box.
Well over half my friends are in the same boat. Their children have left Vancouver. They are raising their own families in other cities and other countries. My neighborhood looks nothing like it did even ten years ago. The neighbors don’t say hi to each other and the traditional cultural events in the community are gone.
I loved my city. It’s still beautiful (when the sun shines). But now, I find it kind of lonely and hollow.”
- Uwinsome at greaterfool.ca 11 Mar 2013 11:23pm [hat-tip Bob G]

Excellent comment.
A city does best when RE is reasonably priced; when the cost of shelter is not an excessive hurdle to young industrious individuals either remaining here or moving here.
The speculative mania has pushed RE to prices that are two to three times reasonable values, and has consequently forced people away from Vancouver; it has been a deeply destructive force.
- vreaa

A related anecdote, previously headlined here:
“I think about my own home that I bought in 2000, it’s worth about four times what I paid for it now. … I have four kids, three in their twenties and one in their thirties, and they’re never going to be able to afford to live in Vancouver because they’re not already in the market.”
- Peter Ladner (former candidate for mayor), Shaw cable TV interview, 25 May 2011

“I am a boomer. I am appalled at some of the financial situations that my contemporaries have gotten themselves into. I can’t stand it, it is all around me.”

“I am a boomer. I am appalled at some of the financial situations that my contemporaries have gotten themselves into. They have borrowed against their homes while saying “that’s just a line of credit, the house is paid for”. They have counted on the run up in real estate without selling and now owe more on the house than when they bought it TWENTY years ago! When renewing their mortgages they roll in their latest credit card debt. Then they keep the amortization high so the payments are as low as possible. These people owe hundreds of thousands of dollars and now are having health issues, divorces, and want to retire. How can you do all that and not have a thought as to paying off your debt? Time is not on their side.
When the lender they started with is cautious and turns them down, they go elsewhere, get the loan and a promise of more if needed and then bad mouth their first lender. They never miss a chance to go somewhere warm for a month and love the casino and the lottery. Their cars are new, Friends, family, acquaintances, I can’t stand it, it is all around me.”
- camper at VREAA 8 Mar 2013 11:05am

… and then prices start to descend, and the whole debt expansion process goes into reverse (as is occurring just about… now). Ghastly implications for the individuals involved; not good for the group, either.
- vreaa

VanCityBuzz – Vancouver vs. NYC – “If Vancouver wants to keep waving the world class flag, she’d better get used to being compared to those with a few hundred years experience, because beauty and access to a lot of natural resources can only take her so far.”

“Vancouver is often touted as a world class city by local boosters. While the costs of living and real estate prices are certainly indicative of that caliber, our culture (or lack thereof) and the locals’ inability to get to know themselves without making a big stink about how dissatisfied we are with one another, leaves us to question whether or not our very young city is really ready to step up onto the global stage. There’s only so many years a city can ride on having hosted the lesser of the Olympics, no matter how many gold medals were won by locals. Only so many venues can close before the so-called ‘creative’ class finally throws in the towel and leaves everything to the mercy of developers, corrupt political parties and their sycophant friends. So since I’ve just returned from a five month stint in New York, I’ve been asked by the good people at Vancity Buzz to write up a piece comparing some of the finer points of life in both cities.” …
“Housing and Real Estate Development
I’m no expert when it comes to discussing the finer points of housing and real estate, however as someone who at this point can never even hope to think of one day dreaming about the mere thought of buying a property in or around Vancouver, it’s important to mention that many New Yorkers are in the same boat. I was warned that everything is much more expensive in NYC, but this isn’t true at all. If anything, prices for lodging are almost exactly the same. My trendy, 1500 square foot loft cost close to, if not slightly less, than what you’d end up paying here, which is about three grand per month. And just like here, it pays to have roommates.
There are always new development projects happening all over the city, with walk-ups and high rises popping up all over New York, like zits on a teenager’s chin, boasting deals “starting at only 500K!” The difference between there and here is less of a marketing push. Of course, there are the requisite flyers falling out of every free weekly, but I didn’t notice such an in-your-face attempt as Vancouver’s to get me to sign over the next 30 years of my wages in exchange for a tiny, poorly built shoebox in the sky. Nor did I see any buildings wanting to have sex with the handsome new 12 story about to go up just off Bedford. Maybe it’s because I wasn’t looking, or there was a lack of real estate focused billboards, I don’t recall.
New Yorkers, while dealing with various gentrifying forces, are less likely to complain about being priced out of their neighborhoods thanks to fairly rigorous rent control initiatives, which, like the subway, place the rich and poor side by side, often in the same building. Still, just like Vancouverites, there are grumblings among Gotham locals about everything going condo and being sold to absentee foreign investors. But boy did they have a laugh when I showed off CrackshackorMansion.com.” …
“Conclusion
If New York is a grand dame of the urban world, gaudy, spackled with lights and experienced in the ways of love and war, then Vancouver is like a naturally beautiful teenage girl: not sure of what she yet wants or what she’s capable of, only that she’s good looking enough to, for now, have her pick of suitors at the expense of those who really have her best interests at heart. …
All in all, these are two different places, with their own unique styles, so is it even really fair to compare the two? Well, if Vancouver wants to keep waving the world class flag, she’d better get used to being compared to those with a few hundred years experience, because beauty and access to a lot of natural resources can only take her so far.”
- from ‘A Tale of Two Cities: Vancouver vs. New York’, by Hipster Designer, VanCityBuzz, 6 Mar 2013 [hat-tip proteus]

Living In Van-Couver – “There’s no way they can afford a mortgage in Vancouver. I know one emergency first-responder who lived in his van to save enough money to afford a downpayment.”

Mathew Arthur, a Vancouver-based designer, checks email in his converted 1987 Dodge Ram Prospector.

“Mathew Arthur ditched a renovated laneway house he shared with his two brothers to live in a cheap 45-sq. foot 1987 Dodge Ram Prospector for the next year. He’s part of the growing “van dweller” community in Vancouver, where sky-high housing costs have forced many to get creative.
The contemporary nomadic community describes itself as an “island of misfits, a family, a tribe” on a popular Yahoo! forum. Some have embraced mobile living out of necessity, while others like Arthur are doing it to challenge themselves.
“I had a good design job, but in no way found engagement in my life,” Arthur told The Huffington Post B.C.
The 30-year-old wanted to challenge his notion of comfort by engineering a personalized living space that would test his creativity.
“I iterated through ideas about living in a tent, a shipping container or a commercial space with no household amenities until I arrived at the idea of living in a van,” said Arthur in a blog he’s keeping to document his year-long nomadic venture.
In early December, Arthur bought a $500 used van off Craigslist from a farmer in the B.C. Interior. With the help of his family, the vehicle was gutted, cleaned of mice feces and rebuilt with $400 worth of furniture, wiring and insulation.
In the small space, the van has four main areas: the kitchen and sink, work space, storage and bed. Without a personal toilet or shower, he has a daily excuse to go to yoga for exercise and to use the studio’s facilities.
The difference has shown in his savings: his monthly rent has reduced from $850 to a $200 parking fee plus $50 for hydro.
The tiny living space has forced Arthur to be mindful of his use of resources; he’s producing less garbage by preparing simple, fresh foods, and is using less water and electricity overall.
“The one thing that I took for granted was the freedom to move room to room,” said Arthur of living in a house. However, the shift from a 700-sq. foot house to a van parked in an East Vancouver alley has its quirks.
More people go through the alleyway than he anticipated. He’s befriended a middle-aged woman named Edie who periodically strolls through collecting bottles from the neighbourhood’s recycle bins. The occasional drunk lovers’ midnight fight is also easily audible through the van’s walls.”
- from ‘Mobile Living: Vancouver Van Dwellers’ Nomadic Lives’, Zi-Ann Lum, Huffington Post BC, 27 Jan 2013. All photos Mathew Arthur.

“They’re a merry band of vagabonds, living in their vehicles not so much because they can’t afford rent or a mortgage — though that’s part of it — but to cast off the chains of mainstream consumer living.
They’re van-dwellers and RV gypsies, free as birds and believing that your possessions in the end wind up possessing you.
“I had all of this stuff,” said 30-year-old Shawn Linley, sitting in his Econoline RV in North Vancouver. “Stuff, stuff, stuff, so much stuff.
“I don’t want a gas-powered weed-eater any more. I don’t want a huge flatscreen TV. I don’t need ’em.
“I’m never going to live in an apartment again or buy another house.”
Linley, like many vehicle-dwellers in B.C., is a journeyman tradesman. There are no official numbers of how many people live in their vehicles in Metro Vancouver, but it’s probably more than people think.
There are little mobile squatters’ camps all over the Lower Mainland — beside treed North Shore creeks, in industrial zones, beside East Van and Burnaby parks and SkyTrain stations, and along the beaches of Kitsilano and Point Grey
It is a sub-culture that is by definition discreet and shadowy, moving every so often to avoid drawing attention.
“Basically, they’re untraceable, people who are good at flying under the radar,” said Judy Graves, advocate for the homeless with the City of Vancouver.
For the most part they have jobs, she said, at least seasonally.
“And some people just do not believe in paying rent, and there’s no way they can afford a mortgage in Vancouver,” Graves said. “In fact, I know one emergency first-responder in Vancouver who lived in his van to save enough money to afford a downpayment.”
- from Living in a vehicle confers freedom from ‘stuff’, Gordon McIntyre, The Province, 11 Feb 2013 [hat-tip Aldus Huxtable]

“I’m a Canadian living in L.A. and to me the bubble as been clearly visible for many years. I’m fascinated by the ‘cultural’ aspects of the Canadian bubble.”

“I’m a Canadian living in L.A. and to me the bubble as been clearly visible for many years. Now, my interest has evolved, and I’m more fascinated by the ‘cultural’ aspects of the Canadian bubble. Like real estate people being invited as ‘guests’ on the evening news. To my eye, that alone screams overvaluation and speculative mania. Believe me, in a couple of years, that’s the kind of details that will go in the “what were we thinking” category.
I flew to Montreal recently and *everyone* there has something to say about real estate. I wasn’t the one who it brought up. They talk about how this condo sold for X amount, how holding on to a (bubbly) property is the best investment known to man. Greed permeates every one of theses judgments, but greed is never acknowledged. It’s just ‘common sense’.”
- Nick at VREAA 9 Feb 2013 11:37am

Newsflash For Residents Of Vancouver – “Gravity Exists; You Are All Mortal”

“Petitioned The City of Vancouver
The City of Vancouver: Stop a funeral home from moving into 450 W 2nd Ave!

Petition by
Concerned Citizen
Canada

Property owners in the neighbourhood are concerned that property values will be negatively affected and that the City of Vancouver failed to consider this before approving a change of use for the commercial property in question.

To:
The City of Vancouver, Board of Variance
Stop a funeral home from moving into 450 W 2nd Avenue!
Sincerely,
[Your name]“

- posted at change.org approximately 6 Feb 2013 [hat-tip Aldus Huxtable]

Comments below the petition thread:

“Will negatively impact my property value” – Beth McNeil

“I am a resident of the adjacent condo building and I am concerned about the changes this funeral home will bring to our neighbourhood.” – Samantha Cuncliffe

“I am concerned about the impact the funeral home will have on the neighbourhood.” – Concerned Citizen

“impact of a funeral home on the neighbourhood, sales, and also the risk of health impacts caused by the funeral home.” – Laura MacCormack

“the parking!!. we have the police station right by us already. they already took up all the parking and parking anywhere they want . also the bike line just add in few months ago. there is already no parking for the owner and the visitor and for the business… that will effect our property value. so is that mean we allow to pay less tax.??…we pay tax for our community. we want to enjoy it. the funeral is right by the main traffic road. when they have a event. i cant imagine the impact for the location. they are on the route for Sunrun. and couple of the running event. is going be a nightmare.” – janet wong

“There is no reason to put a funeral home in such a thriving neighborhood. No one benefits from this, not even the funeral home because it’s a terrible location for one…no parking, police station operations that will likely disrupt any funeral services going on, frustrated neighbors who will not support them, etc etc.” – Emily Ng
—

Yes, we are all mortal.
And, while we’re dismantling ridiculous fantasies..
..our real estate is in a massive speculative bubble.
- vreaa

‘Crib Crawl’ – Failed RE Venture Developing Into A Television Series – “As a way to shift slow-moving inventory it was a flop.”

“Desperate times demand desperate measures. When Jordan and Russ Macnab, estate agent brothers in Vancouver, Canada, had a glamorous single-bedroom apartment, priced at over C$600,000, that was stubbornly refusing to sell, they decided on a marketing innovation: the “crib crawl”.
They rented a limo bus, stocked it with drinks and snacks, and took a party of possible buyers on an evening tour to see the apartment in question and about half a dozen others, in a mobile viewing party.
The experiment was not a complete failure: the Macnabs attracted a lot of interest, and are developing a television series based on their idea. They are planning their second crib crawl next month.
As a way to shift slow-moving inventory, however, it was a flop. Not one of the apartments they showed found a buyer. Vancouver, which until last year had Canada’s strongest growth in house prices, is now its weakest region. The number of homes sold in the greater Vancouver area dropped by 23 per cent last year.
“It’s a bit of a stalemate at the moment,” says Jordan Macnab. “Buyers are waiting for it to crash, and sellers don’t want to give it up.”
- from ‘Canada housing cloud cast over Carney’, Financial Times, 6 Feb 2013

Rick Mercer On Housing – ‘Flaherty’s Mixtures’ – “My hand sort of looks like a house” ; “When your property market isn’t erratic enough.”

Subtitle: ’6 Months Ago’
He: I’m starting to think that buying this house was a very shrewd move.
She: I know.. look how much house prices are up
He: Well, believe me, I know the housing market and..(reads newspaper) whoooa!..(coughing fit)
She: I’ll go and get Flaherty’s Mixture!
Announcer: Flaherty’s Mixture is an acrid blend of Higher Down Payments and Shorter Mortgage Terms that cools off a feverish housing market
He: (drinks mixture) oh my gawd!
She: Tastes like a hockey bag.. but it works!

Subtitle: ’6 Months Later’
She: Housing prices are down..
He: Down a little?
She: Seventeen percent!
He: (coughing fit; pounds chest)
She: I’ll get Flaherty’s Other Mixture!
Announcer: Flaherty’s Other Mixture is a blend of No Money Down and 40 Year Terms that caused the market to overheat in the first place.
He: (drinks other mixture) Hmmm.. tastes like crantinis.. let’s buy ten more houses!
She: They should put warning labels on these things..
He: My hand sort of looks like a house… (drinks again)
She: You shouldn’t mix Flaherty’s Mixtures!
He: Solarium is a funny word!
(both drink)
Announcer: Flaherty’s Mixture and Flaherty’s Other Mixture. When your property market isn’t erratic enough.

- from Rick Mercer Report, 29 Jan 2013
—

Transcribed here for the record.
Many a true word… Spot on regarding the effects of Flaherty’s changes.
Also, noteworthy for making light of the seriousness of the beginning of the downturn; implying just another wrinkle in the ‘erratic’ market.
- vreaa

For other ‘RE References In Popular Culture’, see here.

“Now they are waiting for spring “when sales will pick up” and they’ve already bought air-line tickets for June, so they “must sell”.

“Yesterday I met a neighbour who is an immigrant from my hometown. I know that their family was going to move back because her husband couldn’t find a job in the financial field and currently works as a tennis instructor. They had tickets for September, but couldn’t sell their townhouse since last spring and so they returned the tickets. They also relisted their home several times during last year, but gave up in November.
Now they are waiting for spring “when sales will pick up” and already bought tickets for June, so they “must sell”. I haven’t said a word. What could I say?”
- Aleksey at VCI 21 Jan 2013 11:03am

You could say: “Steadily drop your ask price until you hit a bid.”
That’d help.
- vreaa

Now THAT Is A Laneway House

- found at http://imgur.com/a/ny4uA, by proteus (the poster with many names).

Somewhere in Europe, it seems.
Inexpensive, but sound workmanship. ($280K? We think not.)
Pleasant interior.
Non-leaking tiled roof.
Soul.
- vreaa

Bearish Quotes In ‘Canadian Business’; Economists Chase Falling Markets With Lower And Lower Price Predictions

“Buyers are sensing that prices are going to come down, so why buy now?” – Thomas Neal, a Royal LePage agent in Toronto

“A potentially severe housing correction is underway” – David Madani, an economist at Capital Economics

“We’ve got a number of sellers who say, ‘If we’re not going to sell for a particular value, we’re not going to sell at all. A lot of people are still pricing their properties based on yesterday’s market.” – Victoria real estate agent Tony Joe

“[Mortgage changes are] taking a lot of demand out of the market. You’re putting the housing market at risk, and the broader economy. The market is weak enough it could result in prices falling in many places across the country.” – Will Dunning, chief economist for the Canadian Association of Accredited Mortgage Professionals

“Developers are saying it’s a very small percentage of end users that are purchasing in the market.” – Ben Myers, executive vice-president at condo research firm Urbanation.

Even most bank economists believe Canadian housing is overpriced somewhere in the range of 10% to 20%, perhaps more so for the hottest condo markets.
“That’s manageable as long as interest rates and unemployment remain low. Absent an external economic shock that would ultimately put Canadians out of work, there is no reason to expect markets to correct hard and fast. What would force people to feel that they have to sell at much deeper prices, given that the interest rate environment is likely to remain quite benign at least through next year? Without a trigger, there should be no national housing crash.” – Doug Porter, BMO economist

- from ‘How low will house prices go? Prices are headed down for the long term.’, Tim Shufelt, Canadian Business, 17 Jan 2013 [hat-tip Cyril Tourneur, Anon and CanAmerican]

Note that now ‘economists’ are quoted as being in agreement that “Canadian housing is overpriced somewhere in the range of 10% to 20%”. Not that long ago they agreed that range was 5% to 10%. They are simply chasing the prices down. These estimates have no predictive capacity whatsoever, they are commentary of past events. [Madani is an exception. He has consistently called for 25%-off at the national level.]
- vreaa

‘Old Curmudgeon’ Has Audacity To “Force People To Confront The Consequences Of Their Own Debt”

“I own my house. I have no debt. Why? Not because I was lucky or rich. But because I never borrowed for consumables. My house is not an investment. Whether it is worth $100,000 or $1,000,000 is irrelevant. It’s where I live. It’s a roof over my head. I had to get a mortgage for the house, but worked on paying it off with spare cash. I didn’t have to have a car. Nor yearly vacations in exotic locales. I didn’t eat out a lot. I didn’t need a lot of clothes. And I don’t give a sh*t about impressing the neighbours.
For the most part, all the debt problems people have stem from their own greed, consumerism and lack of self-control. Don’t blame the market. Don’t blame the banks. Blame yourselves. But in our society, it is impolite to force people to confront the consequences of their own actions.”
- Old Curmudgeon, commenting at ‘Why lower home prices are a national priority’, Globe and Mail, 11 Jan 2013 9:26PM

‘Old Curmudgeon’ is in this situation in part because of his sensible ways with money, but also because he was very likely fortunate enough to buy at a time when house prices were more reflective of underlying fundamental value. And that is how it should be, after all. Homes as places to live, rather than as financial instruments.
His indignation with debt-spending is well placed.
- vreaa
—

From the article on which ‘Old Curmudgeon’ is commenting:

If Canada wants to slay its household-debt dragon, it will have to cut down house prices at the knees. But there’s an economic price to pay for that – and it goes well beyond a cooling of the residential real estate sector. …
“…house prices appear to drive non-mortgage debt, too – the more valuable your house, the more debt you’re likely to take on outside of your mortgage. And, since close to half of all non-mortgage debt is used to finance consumer purchases, higher house prices ultimately boost our national consumption, too.” …
“… the 52-per-cent rise in national house prices from 1999 to 2007 was responsible for a 19-per-cent increase in homeowners’ non-mortgage debt.”… “Multiply that by approximately 13 million households, and that’s nearly $10-billion more in annual consumption – or roughly a 2-per-cent juicing of non-housing consumer spending.” …
“A substantial downturn in prices – say, 10 to 20 per cent – would, in theory, not only reduce mortgage debts for new home buyers, but, significantly, push down non-mortgage debt to the tune of 4 to 8 per cent.” …
“A downturn in consumer borrowing is going to put a serious lid on consumer spending growth – which up until now has been a critical driver in Canada’s economic outperformance since the 2008-2009 global recession.
In the long term, this is the price to pay to get Canadians back living within their means, and the economy on more solid footing. But in the nearer term, the medicine could well feel worse than the disease.
- from ‘Why lower home prices are a national priority’, David Parkinson, The Globe and Mail, 11 Jan 2013

Royal Bank, CIBC, BMO, CTV, REBGV, Michael Levy, Royal LePage, Global TV – “Housing Crash Fears Unwarranted”; “There is no property bubble. Period.”

In contrast to the recent MacLean’s ’2013 Crash’ article, we now have a surging surfeit of reassuring commentary from other sources:

“Canada’s real estate market remains “relatively solid” and should experience a “soft landing” despite the current slowdown and fears of overbuilding in the condominium segment, the country’s leading bankers said Tuesday. …
“Our expectation is that the overall real estate market in Canada is still relatively solid,” Royal Bank CEO Gord Nixon said. …
“Pure math says that a soft landing, if it means you go back historic levels of activity, that we’re going to have some softness in our economy,” Gerry McCaughey of CIBC said.
“… That softness doesn’t necessarily come out in mortgage defaults, it comes out in employment softness and consequential unsecured consumer lending softness.” …
“In fact, house prices may just stagnate. Condominium prices may just stagnate for a couple of years. And that’s the definition of a soft landing,” Bank of Montreal CEO Bill Downe said.”
- from ‘Bankers expect soft landing for Canadian housing market despite slowdown’, Canadian Press care of CTV News, 8 Jan 2013 [hat-tip Dr. Bubble]

“I just watched ctv vancouver news. they did a 5 minute piece on real estate here. they interviewed two realtors and one guy from real estate board. they all said prices of sfh in vancouver were down 1 % for 2012 and say prices won’t fall more than 3% in 2013 as sellers don’t need to sell so they will just pull properties and wait…so buyers who are expecting big drops will not ever see that. the real estate board guy said there is nothing in the cards that is showing sellers will have to sell so prices will stay high. then the host of the news said, well, there you have it… no bubble popping here and went onto next story.”
- vancouverbubbleman at VREAA 8 Jan 2013 5:49pm

Michael Levy, financial analyst: “There is no property bubble. Period. We’ve had prices come up because of demand, both domestic and from off-shore, and demand swelled, and particularly here in Vancouver, a most desirable place to own property, you want to live here or invest here.” …
Announcer: “Prices seem to be holding, as the tug-of-war between buyers and sellers continues.”
- from ‘Experts Say No Real Estate Bubble In Vancouver’, Global TV News, 8 Jan 2013 [video archived by Greenhorn; hat-tip YVRhousinganalyst]
["There is no property bubble. Period." - this latter-day pronouncement added to "What Bubble?" sidebar]

“Royal LePage forecasts that the price of an average Canadian home will rise by a modest 1% in 2013.
Canadian home prices will see a “very modest” appreciation over the next two years, as economies in both the U.S. and Canada gradually improve and family incomes climb slowly, the brokerage said.
“More home buyers moved to the sidelines as 2012 progressed, as economic uncertainty abroad and reduced affordability became a drag on the market, however house prices proved resilient,” said Phil Soper, president and chief executive of Royal LePage.
- from ‘Housing-Crash Fears for 2013 Unwarranted, Forecasters Say’, WSJ, 8 Jan 2013

Macleans Cover – “Inside The Great Real Estate Crash Of 2013″

- cover of Macleans, 14 Jan 2013 [hat-tip Brian and posters at VCI].

Consider the effects of this boldly unambiguous image on sentiment, particularly that of local sellers. – vreaa

—
Excerpts from the article, ‘Crash and Burn’, Chris Sorensen, Macleans, 14 Jan 2013:

“A housing correction—or, possibly, a crash—is no longer coming. It’s here. And you don’t have to own a tiny $500,000 condo in downtown Toronto or a $1.3-million bungalow in Vancouver to get hurt. With few exceptions, the impact will be indiscriminate as the euphoria of rising house prices is replaced by fear. The only question now is how bad things will get. If the decline picks up speed, as many believe it will, there could be a nasty snowball effect. Construction jobs will be lost. Homeowners will end up underwater. Consumers may stop spending.”
…
“The sudden cooling in Canada’s housing sector seemingly struck without warning. As recently as last spring, bidding wars were common in many Canadian cities as were the “over asking!” stickers agents slapped on “for sale” signs.”
…
“Lederer recently sent secret shoppers to several condo sales presentation offices. They made some disturbing discoveries: sales staff who didn’t ask for mortgage pre-approvals and who grossly misrepresented the demographic trends—namely the number of expected new immigrants to Toronto—that are supposed to keep units in high demand. But Lederer says he is most disturbed by the sector’s “shoddy mathematics.” By his calculations, many condo owners who rent their properties are realizing returns of less than four per cent. If rental rates fall as more units come on the market—Lederer estimates there are at least 5,000 too many condo units being built in downtown Toronto—those same investors will soon be losing money, prompting them to sell. “Being a landlord is already a negative cash proposition at today’s prices,” he says, adding that a bust in the condo sector will likely have a “trickle up” effect by reducing demand for starter homes.”
…
“But a mere collapse in home sales—and prices—would be bad enough. Ben Rabidoux, an analyst at M Hanson Advisers, estimates that 1.3 million people, or seven per cent of Canadian workers, are employed in the construction industry, with housing being the main driver. He argued in a recent report that a U.S.-sized housing slowdown could result in the loss of 370,000 jobs and push the unemployment rate well over nine per cent, compared to 7.2 per cent now. And that doesn’t include job losses in related industries.”
…
“It all amounts to a dramatic reversal of fortune for Canadians, albeit one we brought on ourselves. Back in 2009, our hot housing market acted as a life preserver in a sea of economic uncertainty. Now it feels more like a cinder block tied around our necks.”

“Neighbour has had place on westside listed forever. Had been holding firm on her price. Then decided to take off market. Then accepted offer 10% below ask. Then offer fell through. Now delisted awaiting the spring.”

“Neighbour has had place on westside listed forever…at least 8-9 months. Had been holding firm on her price. About a month ago she told me she was taking it off the market and waiting for spring “when things would rebound”. Ran into her about a week after that conversation and she said she had decided to take a lower offer after all and had sold it because her friends had told her to take the money and run. (Incidently the lower bid was still very reasonable in my opinion and a mere 10% off ask). Anyhoooo, that bid fell through due to financing problems (surprise). So she left it on market until a few days ago when she finally DELISTED it. So I guess she is back to hoping for the spring-time action.
Poor realtor was doing open houses for the entire day both days of the weekend for months and months. It must have been his only listing.”
- Girlbear at VCI 25 Dec 2012 9:30pm

Imagine the sentiment now. If they relist in the spring and comparable properties are selling for 15% or more below last year’s ask, how will they respond?
- vreaa

Bears Care, Too

“…the schadenfreuden stories on Vancouver Real Estate Anecdote Archive. Always good for a bitter laugh.” – Bill Lee at francesbula.com 26 Nov 2012

“I never did give anybody hell. I just told the truth and they thought it was hell.” – Harry S. Truman

All the very best for the festive season to all readers, and wishing you all a fine, peaceful 2013.
Regular readers know that we foresee challenging times ahead for the Vancouver RE market. This opinion is not a wish, it is simply the result of an analysis of all the available evidence. And it is most definitely not to be confused with a desire for bad things to befall anyone in our community.
The speculative mania in housing (2003-2012) has been detrimental to Vancouver. It has misallocated human and financial capital, and distorted the economy of the city. It has inconvenienced many, and, unfortunately, in the end, it will have financially and psychologically hobbled a good number of citizens. This outcome is inevitable. Again, please don’t confuse this observation with a wish, it is simply part and parcel of a spec mania: a messy resolution has been ‘baked in’ since prices hit the afterburners in the mid 2000′s. When asset prices are artificially inflated by a chain of ever increasing debt-financed transactions, there will always be a large group left ‘holding the bag’ when it all runs out of oxygen.
There is, unfortunately, no other way things can resolve, and nothing that can be done to significantly ameliorate the bubble’s consequences. It is too late for that. The problem was letting it develop in the first place; and not allowing it to unwind earlier.
Anybody who is wishing for soft-landings, or hoping that some form of kindness will somehow allow for a resolution that involves no damage, needs to answer this question: Who do I expect to do the buying that will let everybody down gently? Who do I expect to step in now, borrow (or ‘donate’) large sums of money, and agree to purchase properties that are still woefully above their fundamental values? (and thus exposing themselves to very large losses ahead). Who do you suggest should be the sacrificial lambs?
Those wishing for fantasy bullish, Pollyanna-ish outcomes may be well-meaning, but they are simply ignorant of bubble market dynamics. You can’t simply call the game off and hope that everybody wins; it doesn’t work like that after years of ever-increasing over-extension.
All that said and done, we hope that readers fare as well as possible. All citizens, owners or not, will feel some of the economic effects of a RE downturn. Non-owners will suffer less direct personal impact, and there are a good number of owners who will survive the RE bear market with just a scratch or two. We are most concerned about modest net-worth households who have almost all of their savings in their homes; often with leverage. We know it is a painful fact that they can’t all get out ‘whole’, but we fear for them nonetheless. Particularly vulnerable are those close to retirement who are relying on the value of their homes for a comfortable future.
We hope that Vancouver can find a way to make the transition from overvalued market to a fairly, and sustainably, valued market with as little damage, and as peaceably, as possible. In fact, for us, the ‘peace’ bit is paramount. Economic stress puts groups at risk of highly-charged fractures, and we sincerely hope that as a large and diverse group we’ll be able to avoid scapegoating, in-fighting, and division.
So, to emphasize: Bears care, too. They may come across as grumpy and (per force) contrarian, but they care as much for family, friends, neighbours, and fellow citizens as anybody else. Sure, the occasional bearish commenter will express the opinion that they will gain pleasure from the losses of speculators, but this is far from the commonest position. The very few Vancouverites who have seen this speculative mania for what it is most commonly express genuine concerns about the potential consequences for themselves, their families, and their fellow citizens.
- vreaa

“I conceive that the great part of the miseries of mankind are brought upon them by false estimates they have made of the value of things.” – Benjamin Franklin

“I think you’ll need another sidebar category to capture the mounting “why do you hate families/wish misery on others?” accusations that are going to come in increasing numbers. Long time bulls – and new visitors to this site – may trot that one out more and more, accusing you and posters here of schadenfreude, hating home “owners”, etc. Even if it doesn’t happen here, mind-bending statements in this vein will increasingly pop up elsewhere and be worth collecting. May I humbly suggest a sidebar icon with a picture of Helen Lovejoy and the words “won’t someone PLEASE think of the children?!?” to link to the post you ultimately create addressing this topic?
Past even-handedness will matter little to desperate people who will misinterpret many sentiments expressed here. The archive will be useful to a subset of these people who are willing to be taught the historical mechanics driving this bubble.”
- paraphrasing of Royce McCutcheon at VREAA 17 Sep 2012 8:50am [We'll call such a sidebar 'Bears Care, Too' -ed.]

“My wife and I bought our first home in Oshawa in 1989 for $178K. Seven years later, after many renovations, we could only sell it for $148K.”

“My wife and I bought our first home in Oshawa in 1989 for $178K. Seven years later, after many renovations, we could only sell in for $148K. Mind you, we then bought in the same down market in Toronto’s High Park area. The home we bought in Toronto, for $325K, had been listed at $580K just 18 months before we bought it. That gives you some sense of how the market corrected. We sold that same house this spring, for $975K, exactly three times what we paid for it 16 years ago. It obviously does depend on when you buy and when you sell, it always has. BUT, we are experiencing prolonged and historic low interest rates, and Mr. Flaherty’s creation of the 0 down/40 year amortization did create a subprime effect here in Canada. We have never seen a run-up in home prices like this before. The correction, one would think, will be greater than the ones we’ve seen in the past, given that so many people are so over-leveraged.”
- comment by ‘ReMaxed Out’, at The Globe and Mail, 11 Dec 2012 11:27am

“We have never seen a run-up in home prices like this before. The correction, one would think, will be greater than the ones we’ve seen in the past..”
That’s pretty much our opinion, too. Perhaps the Vancouver 1980′s bust will compare. – vreaa

False Creek Condo Drops Ask Price 56% Over 9 Months

# 206 1477 FOUNTAIN WY, False Creek, Vancouver West
1400 sqft 2BR condo
Original ask: 9 Mar 2012: $568K
Last ask: 1 Jul 2012: $320K (-44%)
- from “My mom has to get a certain price before she will sell. We are waiting for prices to turnaround.”, VREAA 3 July 2012 quoting from Vancouver Price Drop 2 July 2012

UPDATE posted by katrina at VREAA 11 Dec 2012 12:50pm -
“Same address was listed yesterday afternoon (Dec 10, 2012) at $250,000. Heard the building is undergoing rainscreening for the next year.”

Sure enough, from a realtor site, listed 10 Dec 2012:

—

That’s a drop in ask price of $318K, or 56%, since March 2012. -ed.

“Today at lunch my friend who lives on the westside said he just accepted terms with a contractor to build him a $300,000 laneway house at the back of his lot.”

“I never bring up the subject of RE with friends, but they always just volunteer this stuff. However today at lunch, my friend who lives on the westside said he just accepted terms with a contractor to build him a $300,000 laneway house at the back of his lot. 2 stories, 700 square feet.

I asked him how much he thought he could rent it out for and he said about $2000/month. I guess on paper that is sort of a 10% net return if you don’t consider the $1.7 million it cost to buy his house in the first place. Although I kind of wonder who would want to pay $2K/month to live in a shoebox in an alley, westside or not.

Also the contract is not fixed price, so if costs go over (like if it rains and lengthens the period of construction … and sometimes in January it does rain here) maybe the house ends up costing $350K-$400K. Seems like an odd thing to spend more than 2x the average US home price on a bunky in Vancouver.”

- HAM Solo at VCI 7 Dec 2012 1:58pm and at VREAA 7 Dec 2012 2:22pm.

Owners building laneway houses aren’t factoring in the market value of the land, which makes the price:rent math even worse. – vreaa

Further: People deceive themselves into thinking that they own a SFH in a desirable area of a desirable city, but they actually end up amateur landlords, running a rooming house with tenants in their basement and garage. [This applies to basement suites as much as it does to laneway houses].
That self-deception has been one of the bubble subplots; one of the mechanisms that have driven prices to artificial heights.
When folks sign the papers for these purchases (for which they have overextended themselves cruelly), they’re not thinking about the landlord math, they’re lost in the fantasy of SFH ownership. – vreaa
—

UPDATE:
Prior related posts of possible interest:

“What’s the Difference Between A Shed And A ‘Laneway House’?” [Drum-roll] “About $268,000!” [Cymbal]
VREAA 29 May 2012

Basement Suite In East Vancouver Sells For $590K
VREAA 24 Feb 2012

“The sales in the $725K-$800K range caused cries of disbelief and anger from my close family who bought a house down the street for almost $1M, in June.”

“Sellers in Burnaby North, like many markets, are busy chasing the market down, with very few getting out in front of the declines. I’m fortunate to have access to MLS, and I’m seeing many listings that were priced >$1M as late as August now well in to the $800k range.”

“This one, V972997, a foreclosure, is particulary extreme: original list $1.8M in Dec 2011, now listed at a fire sale price of 900k.”

“A couple of decent houses (V967123, V981232) in Brentwood Park area just sold for <725k. V967123 was originally listed for 988k in May! The sales caused cries of disbelief and anger from my close family who recently bought a house down the street for almost $1M in June. Their lot/house is nicer but still, you can see the doubt creeping in, even as they vociferously defend their investment.Things are changing in that market, and fast.”

- CashedOut At VCI December 3rd, 2012 at 7:47 pm .

It’s Different Here, Really It Is – “The rich are not the same as most people, otherwise Vancouver’s prices would never have risen so far above average household incomes in the first place.”

“The free-falling Vancouver housing market shows no signs of reversing its slide with the latest figures showing November sales 30.3% below the 10-year average for the month.
The Real Estate Board of Greater Vancouver now says consumers have begun pulling their homes off the market rather than settle for a lower prices in what is still the country’s most expensive market to buy a home.
Since reaching a peak of $625,000, the board’s MLS Home Price Index for all residential properties in the city is off 4.5% to an average of $596,900. Prices are off 1.7% from a year ago.
“Home sellers appear more inclined to remove their properties from the market today rather than lower prices to sell their properties. On the other hand, buyers appear to be expecting prices to moderate,” said Eugen Klein, president of the board.”
- from ‘Vancouver homeowners pulling properties off the market rather than settle for lower prices’, Garry Marr, 4 Dec 2012

“Given that Vancouver’s RBC housing affordability ratio has been about 92% of household income for awhile now, that must tell you that most homes here are bought by people with wealth. They can afford to hang on and wait for better market conditions, so it makes sense that listings are getting pulled. Conventional house price economic responses are more applicable to cities like Calgary and Edmonton that will react to changes in their (oil based) economy than they are to Vancouver. The rich are not the same as most people, otherwise Vancouver’s prices would never have risen so far above average household incomes in the first place.”
- ThinkRight commenting at Financial Post 4 Dec 2012
[hat-tip to JS who adds "I love the logical deduction that because the affordability ratio has been so poor, it obviously means that homes are bought by people with wealth."]

Agreed, JS, you’ve got to love some of the bizarre justifications for current circumstances.
From the school of handwaving logic. Also, tautological.
“Prices are high for good reason (trust me on that) therefore they will stay high.”
And the bit about “the rich are different from most people”? (gack!!)
Regarding the article, and sellers pulling their wares in disgust.. they still do think it’s different here, but will discover it’s pretty much the same as everywhere else.
Sales are down; Prices will follow.
- vreaa

Overheard At Ben Rabidoux’s Presentation On Canadian Housing – “He asked “When do you think the crash will occur?” Ben, of course, said “Right now, sell now.” Shockingly, the guy next to me said “Hey man, that’s my landlord in Yaletown, he’s got 5 properties down there. I can’t believe it. He’s so screwed.”

As had previously been announced here, Ben Rabidoux gave a presentation on Canadian Housing in Vancouver 28 Nov 2012, and it was very well received by the audience of 650. We hope that Ben posts some form of the talk at his site. At VCI, people are relaying summaries of the talk, and sharing their experience of the evening. There were also some interesting anecdotal observations:

“Looking carefully, you also see a lot of “shooters” from the downtown finance scene. I was one row away from one of my friends on the “street” who went there independently, as did I. A few rows ahead was a guy who runs one of the largest investment funds in Vancouver. My read, the leaders in the big money crowd are starting to take the bubble talk seriously.” – HAM Solo

“Going into the seminar, I thought Ben would provide a more soft-moderate outlook to the bubble resolution, probably in line with bank analysts/economists, but he’s all-out hardcore bear armed with numbers, graphs, and a complete frank discussion about what’s out there and what will happen. He explains some stuff we discussed a million time here as well as some new stuff that we haven’t thought about before that will affect the market going forward. I was about 60:40 on soft landing vs crash before and now I’m leaning 90% towards crash.” – RaggedyRenter

“Lots of insider interest; one fellow introduced himself to David LePoidevin after the talk as a local construction insider looking to hedge downside risk by investing in a short-on-RE vehicle David offers.” … “Long story short, Ben is probably responsible for another dozen Boomer mansions hitting the market in January, priced to get out before Armageddon.” – Many Franks

“The people behind me kept asking each other questions about what CMHC was and it was clear neither of them had any clue.” – BLISTERINGAGENT

“The couple behind me decided that it might be a good time to sell their Shuswap Lake property.” – Bailing in BC

“The highlight for me was during the Q&A when a guy got the microphone, he was all dressed in a white pimp suit and asked “When do you think the crash will occur?”, Ben of course said “Right now, sell now.” Shockingly, the guy next to me who looked white said “Hey man, that’s my landlord in Yaletown, he’s got 5 properties down there, I can’t believe it, he’s so screwed.” It was awesome.” – Ray

—
UPDATE:

Presentation now up on youtube:
‘Canadian Real Estate: What happens next?’, Ben Rabidoux, Vancouver, 28 Nov 2012

Premature Bottom Call – “Vancouver’s housing sector may have hit its bottom with an improvement in home sales seen in October”

“Vancouver, British Columbia’s housing sector may have hit its bottom with an improvement in home sales seen in October”
- Marc Pinsonneault, National Bank, Wall Street Journal, 21 Nov 2012

Added to our ‘Premature Calls Of Bottom’ sidebar collection. A steady stream should follow, over the next few years. – vreaa

[Thanks to Ben Rabidoux for pointing out this gem.
Ben is a national RE analyst whose posts at his blog 'The Economic Analyst' have been invaluable reading for those interested in Canada’s RE market. He is more recently working with M Hanson Advisors, ‘a market research firm catering to professional, institutional investors’. Ben tells me he is putting on a seminar regarding the state of the Vancouver RE market, next Wednesday, 28 November 2012, here in Vancouver. Details at http://www.realestate2013.ca%5D

Wake Me Up At 50%-Off – “Buyer’s market, home prices fall? When homes go up a million % and then come down 3.8%…that’s not much of a bargain.”

“Vancouver home sales and prices were lower last month as Canada’s third-largest city continued its role as one the nation’s hardest-hit centres in an ongoing housing market slump.” …
“While Canada’s market continues to look balanced overall, there are clear pockets of strength and weakness,” BMO Capital economist Robert Kavcic observes in his analysis of the CREA results. The BMO report described Vancouver, Victoria, Regina and Saskatoon as buyers’ markets — where supply markedly outstrips demand and dampens asking prices.”
- ‘Vancouver a buyer’s market as home sales, prices fall’, The Province, 16 Nov 2012

“Buyers market, home prices fall? When homes go up a million % and then come down 3.8%…that’s not much of a bargain.”
- ‘Tom Anderson’, commenting below The Province article, 16 Nov 2012

We’re with Tom on this one.
These ‘Buyer’s market’ cries are recurrent, closely akin to premature bottom calling but not quite the same thing.
Similarly, charts showing a ‘Buyer’s market’ when inventory rises against sales are misdirected and mislabelled (see example below). ‘Months of Inventory’ (MOI) and the ‘Ratio of Sales to Active Listings’ are ways of expressing inventory in terms of sales. High inventory and relatively weak sales are indicators of likely future price direction, but such circumstances don’t say anything about how market prices compared to fundamental value. MOI can “go to the wall” for a long period before a market bottoms. Years, actually.
To clarify: A true ‘Buyer’s market’ emerges when a buyer gets good, or at the very least reasonable, value for his or her money.
- vreaa

- Inventory:Sales Ratio Abuse, as evidenced in this chart from Fraser Valley RE Board data, posted by local realtor ‘silverman’ at RE Talks, 3 Oct 2012

Expect to see the term ‘Buyer’s market’ a lot in coming years:

‘It’s a buyer’s market for greater Vancouver’, The Province, 2 Oct 2012

‘Vancouver sales hit 10-year low, real estate board declares a buyer’s market’, The Vancouver Sun, 4 July 2012

“Just overheard my co-worker turned into an accidental landlord. Tried to sell his old property in Coquitlam after purchasing a big one in Surrey. 4 months passed without even 1 offer.”

“Just overheard my co-worker turned into an accidental landlord.
Tried to sell his old property in Coquitlam after purchasing a big one in Surrey. 4 months passed without even 1 offer.
He has been day-dreaming about selling for more next year.”
- good-format at VCI October 17th, 2012 at 10:50 am.

Nine Out Of Ten Analysts Agree: House Prices To Drop, But Not By Too Much

“Canadian housing prices will fall 10% over the next several years and homebuilding will slow sharply in 2013, but the country’s recent property boom is not expected to end in a U.S.-style collapse, according to a Reuters poll.
The survey of 20 forecasters published on Friday showed the majority believe the Canadian government has done enough to rein in runaway prices, preventing the type of crash that has devastated the U.S. market for years.
“This isn’t a sharp correction, this isn’t a U.S.-style correction, it’s just simply an unwinding of the excess valuation that was created by artificially low interest rates for a long period of time,” said Craig Alexander, chief economist at Toronto-Dominion Bank.
“I would emphasize that while a 10% correction sounds scary, in actual fact, this would be a healthy outcome.”
…
“Vancouver prices were forecast to fall 2.7% in 2012 and 3.8% in 2013, with an eventual decline of 12.5%.”
- from ‘Canada home prices seen falling, but not crashing’, Andrea Hopkins, Reuters via Financial Post, 9 Nov 2012

“Canada’s house prices are expected to drop and stay down for a decade, says a new report from Scotiabank that also warns of an “adverse shock” to the economy when the decline comes.
The bank’s latest housing outlook predicts a 10-per-cent price decline across Canada in the next two to three years, driven by larger declines in the Toronto and Vancouver markets, “where supply risks and affordability pressures have the potential to trigger larger price adjustments.”
The report notes that previous housing market downturns — in the 1970s and 1990s — took eight or nine years to bounce back to price levels seen before the decline.
“Historically, long cycles of rising home prices have been followed by extended periods of persistent softness, allowing affordability to be gradually restored and generating renewed pent-up demand,” the report stated.
The bank also warned that “balance sheets heavily skewed to real estate leave Canadians vulnerable to an adverse shock, including a sharp rise in unemployment and/or a sharp drop in home prices.”
- from ‘Canada House Prices To Drop, Stay Down For A Decade, Causing Unemployment, Scotia Says’, Daniel Tencer, The Huffington Post Canada, 8 Nov 2012.

Analysts in the industry are largely commentators, rather than instruments with any convincing positive predictive capacity. Their predictions are noteworthy to the extent that up until very recently there was a broadly held belief that housing prices would not fall at all. So, for the media to be announcing even the idea of coming drops is significant. But, from a quantitive perspective, their consensus about price drops being relatively benign reflects characteristic hope over substance.
Based on the size and all-consuming pervasiveness of the speculative mania, and on price levels determined by fundamentals such as rental incomes, we foresee larger than 10% drops for the nation and far, far larger drops for Vancouver (50%-66% real, peak to trough). Aren’t we already at about 10%-12%-off for most RE sub-types in Vancouver?
And another point: it took 25 years for real prices from the 1980-81 peak to be regained in Vancouver, not 10.
- vreaa

“Sellers will commonly say, ‘I’m going to wait until the spring, when the market is better.’ And I warn them that it could be worse. And buyers are saying ‘It looks like things are bad, I’m going to hold off until the market drops another 10 or 20%.”

“While the national housing market appears to be retreating in an orderly way, the data show pockets of sharper slowdown, particularly in the western Canadian cities of Vancouver and Victoria, which once led the hot housing market.
“Personally I don’t see any revitalization of the market in the near future,” said Victoria real estate agent Tony Joe, noting that investors have left the market.
Residential sales fell 8.3% in September from a year earlier in Victoria and were down 32.5% in Vancouver, according to the local real estate boards. Prices were down 2.6% in Victoria and 1.4% in Vancouver on the year, according to the Teranet report.
The price declines are far smaller than the plunge that hit U.S. homeowners during the crash. Still, buyers are hesitant, wondering if they should wait until next year to purchase.
“Sellers will commonly say, ‘I’m going to wait until the spring, when the market is better.’ And I warn them that it could be worse,” said Joe. “And of course buyers are saying ’It looks like things are bad, I’m going to hold off until the market drops another 10 or 20%.”’
Joe, a 21-year industry veteran, does not foresee such a drastic decline, simply because Canadian lenders have been prudent and interest rates are not going up soon. Sellers will pull houses off the market rather than accept a price drop.”
- from ‘Canada braces as housing slowdown takes hold’, National Post, 5 Nov 2012

“Vancouver is a lonely place for financially responsible people.”

“There are some of us who still view life realistically but Vancouver is a lonely place for financially responsible people.

My partner and I are alike when it comes to finances. Our friends have been buying houses, condos, cars, boats, and all the toys in the world on incomes we know are similar or smaller than ours. Often we get lessons on how easy it is, “just put $10000 down and you’ll have $700 payments, its so cheap these days.” That would be a fine statement if we were talking about housing, unfortunately many of our peers talk in such a way of car payments. I get nightmares imagining what it must feel like to spend $1000 +gas on a car with my income. Dreadful thought, but I know first hand of people who do this without a second thought.

With housing its no different. We purchased a condo in 09, at a small monthly discount to renting. Our mortgage is just barely 2 times our annual income. We feel the need to get rid of this debt as soon as possible. Yet, we have friends who have bought both houses and condos in the past year valued 4 times that of our condo! These people earn the same money!

I would venture to say people are so conditioned to debt these days, they feel naked not having obscene monthly payments. When a car if finally close to paid off, they trade in for the newest model with biggest possible payment, or newest cruiser, or newest Bowrider.

The irony of it all? It makes us feel poor! We look at our friends, over extended, loaded on debt, enjoying all the spoils of life. The appearance of the wealthy elite.

Us? No consumer debt, used cars, and a big savings accounts, even bigger investment accounts.

This is partly why Vancouver is such a hard place to live, if not for us both being grounded and reminding ourselves that by 40 we will have enough cash-flow to retire or work part time, we would likely go insane and cave to the temptations. Its hard not to feel vindictive, and wish financial reckoning upon the indebted masses who get to enjoy the spoils without the work.”

- Burt at VREAA 25 Oct 2012 8:39 am

Burt has our sympathy; it isn’t easy running against one’s herd, or even just sitting out while the herd is running.
The one note of surprise in the post regards Burt’s early retirement. It would be interesting to see his retire-at-40 math, given current interest rates and investment environment.
- vreaa

“The lax lending standards, combined with low interest rates, opened the way for easy money to flow. Average home prices in Canada have doubled over the past decade.”

“Then one day the government woke up and realized that what was once the Veterans’ Housing Shoppe was now backing the mortgages of anyone, for nearly anything. Five per cent down? No problem. Forty-year mortgages, investment properties and highly leveraged $2-million mansions by the water? Yes, yes and yes. Bring ‘em on. The lax standards, combined with low interest rates, opened the way for easy money to flow. Average home prices in Canada have doubled over the past decade. A federal institution whose mission was to make houses more affordable has managed to do the opposite–make them unaffordable.”
- from ‘CMHC outlived its mandate – now it’s just meddling’, Derek DeCloet, G&M, 25 Oct 2012

Opinions previously held only by lunatic bears-on-blogs are being expressed mainstream.
All part of the swell of sentiment change washing over the RE markets nationwide.
- vreaa

Spot The Speculators #88 – “My girlfriend and I just put an offer on a condo by Gilmore station for 430K. It looks like we’re going to get it. We plan for this condo to be both an investment and a home for at least the next 7 years.”

“I graduated last year and got a stable government job and my gf is a chef. We’ve saved up about 50K for downpayment, and we just put an offer on a condo by Gilmore station for 430K. It looks like we’re going to get it. We plan for this condo to be both an investment and a home for at least the next 7 years.
We both grew up in Richmond, and as much as we love the place, there are inherent issues with the city. Most importantly, its housing market is based on one factor – Chinese investors.
The housing market in Vancouver is strongly influenced by investors from overseas, mainly China, Hong Kong, Taiwan. Earlier this year, policies were tightened for foreign investors, in most cases from China. Money was actually returned to them. This means that the development on River Road in Richmond by the Olympic Oval is undersold. Now housing prices are dropping like crazy in Richmond after a 5 year boom, not to mention the crawling speed of the market as well.
My company will be moving next to Brentwood mall soon, and this is one of the reason why we’ve decided to move there.
More importantly, the plan to develop and rebuild and revamp Brentwood mall is a good sign, including the three phase project – the first of which includes an ultra high rise. Needless to say, with an increase in population in the area, housing prices are expected to go up in the future.
We almost bought a similar place for 20K more last month, I’m so glad we didn’t because the prices has dropped a little. But there are not a lot of options because sellers who are not in rush simply took their property off the market.
Here are the questions I have:
Is it possible that there will be too much property for sale that dilutes the value of property as a whole in the future? For example, both Brentwood and Oakridge malls have plans for a ton of new homes in the future (both 3 stage projects).
What are other factors that might affect property value in Burnaby and in Greater Vancouver as a whole?
Finally, I’ve heard that housing in Vancouver, as long as it is close to Downtown, UBC, or Vancouver itself, will always be saturated. Can this always remain true if there is such an abundance of developers creating new condos?
Everything considered – what do you expect a 400k-ish condo in Burnaby to be worth on the market in 5-10 years?”
- ‘Reddit, I need your opinion about something as I’m about to make the biggest purchase of my life’, shaozhen, reddit.com, 31 Oct 2012

The fact that they see the home, even in part, as “an investment” makes them speculators.
They are buying on the premise that prices will rise or at the very least remain strong.
To answer their last question: I would say that their $400K condo will touch a market price of $220K (real) well before it ever hits $440K.
Would they be buying if they saw that possibility?
Precisely.
- vreaa

“One of our best friends thought her house would sell at over $1.2M. She was really pissed when the realtor told her bluntly that it would not sell for over $999K, as nothing was moving over $1M, and that at under $1M it would take 6 months if she was lucky.”

“Interesting comments from one of our best friends today. They had a realtor “evaluate” their house for sale. Looks like my constant bubble talk is “perhaps” getting through? You guys may remember that they were featured in my post a while back [VREAA 8 May 2012], about the wine soaked Calgary dinner party I attended at their place a few months ago, where RE was the topic of discussion over cocktails.
She told my wife today that she thought her house would come in at over $1.2MM. She was really pissed when the realtor told her bluntly that it would not sell for over $999K, as nothing was moving over $1MM, and that at under $1MM it would take 6 months if she was lucky. Now she doesn’t want to list as the market “will come back” and RE only goes up. Well, they only owe about $200K. And in 5 years from now it will be paid for, but probably only worth $500K.
They are my dear friends and a hit of that magnitude would not dent their net worth by >10%. But still, “a fool and their money”…”.
- Carioca Canuck, at VREAA, 12 Oct 2012 6:47pm

“The neighbour put her house up for sale when her husband died, borrowed from her line of credit, and bought an apartment. The house has now sat on the market for months, crickets, and she is freaking out. Now trying to sell the apartment.”

“The neighbour put her house up for sale when her husband died, she couldn’t stand being there alone.
Borrows from her line of credit and buys an apartment.
The house has sat for months, crickets, and she is freaking out, she is now trying to sell the apartment because her overhead is through the roof.
It’s these sort of s****y situations that are going to force the housing prices down, selling out of need not choice.”
- TNT at VREAA 11 Oct 2012 8:42pm

The Mayor – “When mortgage and rental costs eat up the discretionary income of a large swath of our population, it depresses spending in the local economy. When our communities start losing young families and seniors on fixed incomes, we lose vitality and a sense of generational continuity. Unaffordable housing is damaging Vancouver’s community fibre.”

“…each street will be about this wide…”

“Nearly every day since I became mayor, I’ve heard from family after family and business owner after business owner about how the high cost of living impacts their lives.
One day, it might be a young couple whose second child is on the way, and who’ve decided it’s time to buy a home. And they’ve come to the conclusion they simply can’t do it in Vancouver’s housing market, and they’re planning to move to the Fraser Valley.
The next day it might be a senior, someone who can tell me the names of the families who’ve lived on their block going back half a century … but with a fixed income he just can’t afford to stay in his neighbourhood.
I’ve spoken to people in deep distress because they hold down three jobs and it’s still not enough to make rent. I’ve talked to owners of major companies who can’t fill positions because their workforce is leaving the city for somewhere more affordable.
And I lost count a long time ago of the number of people who just laugh off the idea of ever owning a home here.
The lack of affordability imposes a burden on everyone. When mortgage and rental costs eat up the discretionary income of a large swath of our population, it depresses spending in the local economy. When our communities start losing young families and seniors on fixed incomes, we lose vitality and a sense of generational continuity.”
- from ‘Unaffordable housing is damaging Vancouver’s community fibre’, by Mayor Gregor Robertson, Vancouver Sun, 8 Oct 2012

Bingo!
Interesting that anyone is capable of writing anything at all about Vancouver housing without mentioning the pachyderm squatting on the coffee table: the speculative mania, the bubble, preposterously overvalued homes; whatever you want to call it. Homes are overpriced by a factor of two or three.
Let’s wait and see what happens to affordability once home prices drop to the vague vicinity of those determined by economic fundamentals. There will still be challenges, but they’ll be very different from the ones that people are pretending to try to solve now.
- vreaa

“Vancouver home buyers are ‘seeking their revenge’ after a long running housing boom”.

“Vancouver sales are 40% below the ten year September average. And as the Bank of Montreal’s Sal Galteri puts it “Vancouver home buyers are seeking their revenge after a long running housing boom”.
- from ‘The ‘revenge’ of the Vancouver home buyer’, video clip by Michael Babad, G&M, 3 oct 2012

Archived for the chronology, largely for the interesting turn of phrase.
- vreaa

Two Experienced Guys Talk Canadian RE – “How many people who own their home could afford to buy it if interest rates were at normal levels?.. We all know what happens when you’ve got more sellers than buyers.”

“I’m not sure that retirees need to worry about housing prices unless their plan is to sell their house in three or four years, make huge profits, and use that to support themselves in retirement. The concern, I think is more for people starting out, who borrow as much as they can, buy a house, within their memory all they remember is housing prices going up, and housing being a great investment, and so they reach…
If you look at the situation in Canada now, in some of the big cities, housing is very expensive, compared to the US and most other places, our borrowing costs are very low, which means the prices are in part held up by peoples ability to borrow large amounts at low rates.
But Canadian borrowers are not like American borrowers, American borrowers can lock in the rate for 30 years, Canadians can’t. The American borrowers are getting a tax deduction, Canadians can’t. Here we have a much less hospitable borrowing environment that will turn very hostile if interest rates turn up. I’m not predicting that it will happen, but, if it does, it’s very hard for me to see how people are going to afford the payments.” …
“I remember Toronto, in the 1990′s, and I use that as a sanity check. [House prices came off by 25%; it was "bubble like".] You need to ask yourself the following question: How many people who own their home could afford to buy it if interest rates were at normal levels? Like, how many people are living in a house that they absolutely couldn’t afford to buy if interest rates were normal. I fear that in some of the larger Canadian cities almost nobody could afford to buy their house if they were entering the market with normal interest rates. That’s not a good situation to be in because it means that if interest rates do rise to normal levels, and people do try to sell their houses, there aren’t going to be that many buyers. We all know what happens when you’ve got more sellers than buyers.”
- Malcolm Hamilton, Mercer Human Resource Consulting Ltd., clientinsights.ca, 27 Sep 2012

‘Word’ (as folks younger than these guys would say).
Interesting for the characterization of our borrowing environment as “less hospitable” than that in the US, which contrasts with the widespread view that somehow our borrowing situation is more resilient.
Also spot on regarding retirees, buyers that “reach”, and people being unable to afford the houses they live in.
By the way, as we have repeatedly asserted, interest rate rises are not necessary for the Vancouver bubble to burst, but rate rises would certainly speed it along if they occurred.
- vreaa

Rob Carrick – “…the financial blood-sucking that home ownership entails”; “…endless discretionary expenses.”

“Renting is the obvious alternative for someone who is unready for the financial blood-sucking that home ownership entails.
But low vacancy rates have made it a landlord’s market in some cities, notably in Toronto. Might as well buy as pay hefty rents, some will say.
Don’t listen, Gen Y. Tough it out in the rental market unless you can truly afford a home or, if extreme measures are required, move back in with your parents for a while to save a down payment.”…
“As tough as the rental market may be, it’s still a better option for Gen Y than buying prematurely. Renting, at least, is a finite expense each month. Housing is infinite – there are fixed costs, plus endless discretionary expenses. Buying is not the solution to difficulties in finding a place to rent, at least not without further price declines. Instead, find a roommate and pool your resources to cut rental costs.”
- from ‘Why Gen Y should tough it out in the rental market’, Rob Carrick, G&M, 1 Oct 2012

Rob Carrick is fairly well accepted across the nation as a sensible and measured voice regarding personal finance.
This piece is noteworthy for his vivid language describing some of the pitfalls of home ownership.
He also appears to now accept that “falling prices” are a given.
The wide dissemination of these thoughts contributes to the growing skeptical sentiment within the RE market.
- vreaa

“Would I buy in this market if I was in a “normal” situation? No. Does selling now and renting make sense for my family personally, given our current situation and lifestyle? No. Ergo, we’re staying put.”

“We love our house and location, will have paid it off entirely (and way early) in a couple of years, and will be able to put all the money we currently pay in mortgage into funding an early retirement. We’ll still have property taxes and maintenance, but it’s a helluva lot less than we’d pay to rent a similar home in our neighbourhood, and these costs can be covered completely by renting out a spare room for a few months in the summer to an international student if we want to do that (we have done it and enjoyed it in the past, so it’s familiar territory). Our family is in Van, so are both our jobs, so moving to another city makes no sense. Another reason that I am not interested in renting, besides the potential issues with crappy landlords, instability and the lousy quality of a lot of rentals I’ve seen is that we have lots of pets and fish tanks, and renting isn’t feasible for us. It’s hard enough to find rentals with just kids…try telling a landlord that you also have multiple cats, two large dogs and three 100 gallon plus tanks and watch them run screaming.
Would I buy in this market if I was in a “normal” situation? No. Does selling now and renting make sense for my family personally, given our current situation and lifestyle? No. Ergo, we’re staying put.”
- RESkeptic at VREAA 17 Sep 2012 7:49am

Sounds sensible, and we agree with the logic entirely.
Bearish opinions voiced here are not to be confused with a recommendation that each and every owner sell their home.
For people where a drop in the market value of their home of 50% is less inconvenient than the hassles of renting, owning continues to make sense.
- vreaa

“A colleague bought a SFH home in the spring in the hopes of flipping it for a quick profit. She now finds herself amongst the ranks of the accidental landlords. She is not happy.”

“A colleague bought a SFH home in the spring in the hopes of flipping it for a quick profit.
She pulled it off the market after the financing from a prospective buyer fell through. With the market having weakened significantly since then, she now finds herself amongst the ranks of the accidental landlords. She is not happy.”
- Manna from heaven at VCI 27 Sep 2012

Ah, Look At All The Lonely People – “With Vancouver’s sky-high housing prices, problems around affordability are creating resentment. There are a lot of people that just don’t feel welcome here.”

Vancouver may seem like a paradise, but behind the polite smiles, there’s evidence of loneliness, deep resentment and racial tension among some citizens.
Armed with these findings from two years of research by the Vancouver Foundation, Vision Vancouver Coun. Andrea Reimer is proposing to create an Engaged City Mayor’s Task Force. The 16-member force would devise plans to foster better relationships between citizens, and encourage broader participation in local government.
After surveying 3,841 people from more than 80 ethnic groups this year, the Vancouver Foundation found that one-third find it difficult to make friends in the city, and a quarter are lonely.
Many of the lonely people tend to be those living in high-density housing, and young adults who aren’t yet embedded in careers, Reimer said.
“There are a lot of people that just don’t feel welcome here,” she said.
With Vancouver’s sky-high housing prices, problems around affordability are creating resentment.
Over 60 per cent of residents aged 25 to 34 see Vancouver as “a resort for the wealthy,” with “too much foreign ownership,” according to the survey.
Frustration around housing is leading many to incorrectly place the blame on foreign owners from Asia, according to Reimer.
“There is a strong tension around race,” Reimer said. “We have to get ahead of that.”
Reimer said the task force would be composed of 16 volunteers from diverse backgrounds — half renters and half owners would be one division — and a likely focus of planning would involve encouraging neighbourhoods to get more involved in tapping into existing infrastructure budgets. The idea is to create public spaces “more aligned with what the community wants.”
- from ‘Lonely city: Vancouverites isolated, resentful; city council seeks answers’, The Province, 25 Sep 2012 [hat-tip joe_blown_away_by_high_housing_costs and others]

Betwixt Madness And Insanity – “I travel for work to BC every week and I’ve got to say the prices on houses I have seen in Vancouver are next to madness and insanity.”

“i’m from Winnipeg and my wife live in vancouver. I travel for work to bc every week and i got to say the prices on the house i have seen in vancouver r next to madness and insanity. I can’t even phantom how anyone in their right mind would willing to be slaves for the rest of their lives just so they could be in vancouver.”
- Joe nguyen, at VREAA 25 Sep 2012 6:55am

We’d agree. Prices are far removed from fundamental values.
There will be a reconciliation of this difference ahead.
- vreaa

Another Greater Fool Averted – “She was trying to buy a house for $238k, with 5% down, on a 33k/year salary. There must be something working in the system these days, she didn’t get the financing required.”

“Update on the friend I spent the day trying to talk out of buying a house for $238k, with 5% down, on a 33k/year salary. Must be something working in the system these days, she didn’t get the financing required for the house (big surprise). They said she needs a cosigner to get that amount of mortgage. The relative she hit up said “No go”. And the CMHC owned house they bid on? Got an offer higher than asking, so they lost the bid. Another greater fool averted.”
- pricedoutfornow at VCI 21 Sep 2012 8:53pm

Some people will not be allowed onboard, even though they had the full intention to buy.
This will turn out to have been in their favour, fortune triumphing over judgement.
- vreaa

“Every time the conversation has gone to real estate in the past, the verdict has always been that Vancouver will never go down. Now, all of a sudden, these same people are saying that the bubble is “finally” bursting.”

“I’ve been running with the same fairly large group for a year now. Every time the conversation has gone to real estate, the verdict has always been that Vancouver will never go down. Now, all of a sudden, these same people are saying that the bubble is “finally” bursting, and the group members are teaching each other new terms like, “under water.” It’s amazing how fast it goes.”
- N at VCI 18 Sep 2012 at 9:13pm

In years to come, these same people will also tell themselves that (1) they ‘knew’ all along that it was a bubble and (2) they didn’t act because, who could have known it was a bubble? (backed by the related falsehood “You can’t identify a bubble while it is happening”, care of Greenspan and others.)
Yes, we know that’s a complete contradiction, and makes no sense, but, humans are like that.
- vreaa

16-Year-Old High School Kid Offers RE Advice – “There’s a lot of money to be made in Vancouver. Just buy a house, rent it out, and in a few years you can buy another one, or maybe a condo. It’s a great investment. You should definitely look into it.”

“I was in Vancouver last year and we went hiking near Deep Cove (lovely area). During our hike, we met two 16 yr old kids from Van who were hiking on the same trail. We hiked together for over an hour, just chatting. We ended up giving them a ride all the way back to Van because they didn’t have a car, or a drivers licence, they were going to take 2 or 3 buses to get back. Anyway, in the car the most talkative and assured of the two told us : “There’s a lot of money to be made in Vancouver. Just buy a house, rent it out, and in a few years you can buy another one, or maybe a condo. It’s a great investment. You should definitely look into it.” The kid was great but I couldn’t help seeing this as a perfect “shoeshine boy” moment. When a high school kid is giving you unprompted investing advice, just do the exact opposite and you’ll do just fine.”
- Nick at VREAA 20 Sep 2012 12:20pm

Agreed, a shoeshine-boy moment.
In fact, this is the most extreme such example we’ve heard from our bubble.
(Who is there left to recommend housing? Toddlers? Pets?)
- vreaa

This comment followed Nick’s:
“This is pretty much how most under-25 born and raised in Vancouverites seem to think. Conceptually, they can’t ever imagine leaving Vancouver (best place on earth syndrome) but they also recognize it’s far too expensive a city to live in, especially if you’re starting out in life (even with rich boomer parents to subsidize a real estate purchase.) They have to buy in to the real estate bull mindset otherwise prospects are very depressing.”
- Cranston Snord at VREAA 20 Sep 2012 3:39pm

“At the in-laws this weekend in Richmond, they had a friend of theirs over who is a well-connected realtor in the Chinese community. She said nothing priced above assessment value was selling. Prices off 15% from peak.”

“Was at the in-laws this weekend in Richmond. They had a friend of theirs over who is a well-connected realtor in the Chinese community.
She said nothing priced above assessment value was selling. Prices off 15% from peak.
This is someone who was invited to one of Harper’s trade missions to China, so in a position to know if an influx of HAM was just waiting to be unleashed. Aggressive sellers are driving prices lower to attract the few buyers in the market.”
- Just looking… at VCI 9 Sep 2012 8:17pm

Vancouver RE Becomes A Canadian Metaphor For ‘Over-Priced’? – “The iPhone is way overpriced. Think real estate in the Lower Mainland of BC.”

“The iPhone is way overpriced. Think real estate in the Lower Mainland of BC … forget it!!”
- Timster in the comments below ‘The iPhone’s sexy, but ‘I save’ is far smarter’, Globe and Mail, 17 Sep 2012 8:36pm [hat-tip Makaya, who adds "Talk about obsession..."]

Is Vancouver RE establishing itself in the Canadian psyche as representative of something (anything!) that is over-priced?
Will the metaphor enter the vernacular?
- vreaa

Armstrong Cheese II – “Looks like they’re a wee bit late to the party.”

Above photo from Gord Goble [via e-mail, 15 Sep 2012], who writes: “Not the best photo (totally against the sun, taken from a long distance while in my car), but I found the subject pretty interesting nonetheless. Armstrong Cheese = Vancouver real estate. Looks like they’re a wee bit late to the party.
I like the other elements too – the guy walking away disgusted and another billboard that’s also all about fantasy.
Anywho, thought you’d like it. Taken at the Highway 99 – 8th Ave interchange near the border.”

[Thanks Gord, nice shot. We particularly like the fantasy and disgust components. A companion piece to subterranian's photo near Lion's Gate Bridge, 14 Sep 2012. Looks like these guys have the North and the South covered. - vreaa]

Cheese Houses Billboard Ad – “More Desirable Than Vancouver Real Estate”

- image from ‘subterranian’ via e-mail 14 Sep 2012, who writes: “Thought I’d send this along… It’s been running for days on the electronic billboard at the north end of the Lions Gate Bridge. HAM and cheese?” [Many, many thanks, subterranian; an image from our bubble that we are very pleased to archive.]

No mold comments, please.
Seriously, folks… any doubt we’re living in the distorted universe of an RE mania?
- vreaa