The End Of The Implausible Happy-Ending Scenario – “Real estate prices would rise 40 per cent quickly, condo prices would increase, and cost overruns would be covered.”

From an article in The Province [19 Nov 2010] on the implications of the developer for the Olympic Village going into receivership.
After laying out the likely money losing outcomes, the article ends with these flippant statements:
“There is a fourth scenario, however implausible, with a happy ending.
Real estate prices would rise 40 per cent quickly, condo prices would increase and cost overruns would be covered.
“Everyone would go away happy,” said [UBC real estate professor] Tsur Somerville.

(sarcasm/) Why is this so implausible? (/sarcasm)
Hasn’t our entire economy, for the last 10 years, been completely dependent on just such an implausible ongoing RE-price-rise bailout?
Where would we be without the 100%, 200%, 200+% RE price rises?
What will happen to Vancouver if/when RE prices don’t “rise x% quickly”.
We guess we’ll find out.
– vreaa

6 responses to “The End Of The Implausible Happy-Ending Scenario – “Real estate prices would rise 40 per cent quickly, condo prices would increase, and cost overruns would be covered.”

  1. I thought academics were supposed to operate in the realm of plausible reality… Not wish for Bob Rennie to sprinkle magic real estate fairy dust on Millenium Waters and hope for the best…

  2. This is a quote to save for future use. What worries me is the dependency on real estate in Vancouver and the strength of the REIC’s influence on public policy.

    I can imagine a scenario in the future when prices begin to melt, whereby “academics” and “economists” shilling for the REIC credibly propose policies to inflate real estate prices at the expense of all else.

  3. Forget to mention wages need to go up 40%. There is not even in his radar, so it the least of things goin to happen.

  4. Dear Peter (Pan),
    The academic in question is a “real estate professor”. Such ‘professors’ – like all of their business school brethren – rarely operate in the realm of plausible academia.

  5. What’s the story with Tsur Somerville? He is the only real estate “promoter” (pusher) I’ve found who doesn’t have an obvious vested interest in Vancouver real estate going up. Every other outspoken RE bull I’ve heard opinions from on the state of Vancouver’s bubble (or lack thereof) has had their livelihood tied to it, e.g. realtors, mortgage brokers, bank economists, reno people, builders, homeowners etc. While presumably the prof is a homeowner, how does he otherwise benefit from talking up Vanc RE? (he has been quoted multiple times as saying there’s no bubble here). I’m mystified by this, and can only conclude that he is somehow compensated for his cheerleading by the RE industry. Anyone have any idea what this is? (I do know that he’s an “RE professor”) Thanks!

  6. That’s the nature of bubbles – no one is ever able to predict when they will occur, how big they will be or when they will burst. Hence, bubble.

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