“A few months back, when I told my landlady, as I often have in the past, that I think prices will fall, she said, “Why would they?”

“[The National piece] resulted in “bubble” and “crash” being said on TV. And that will be enough to change the tone of the conversation and make people think about whether we might be at the top.
A few months back, when I told my landlady, as I often have in the past, that I think prices will fall, she said, “Why would they?” That’s the attitude that has propped up prices: the failure to even consider price drops. Once that bedrock belief is brought into question, nature will be free to take its course.”

N at VCI 21 Sep 2012 8:55am

Speculation in reverse.
We agree that, once Vancouverites see that prices can fall substantially, the (superficially) ‘virtuous’ cycle that is a speculative mania, will turn vicious.
– vreaa

16 responses to ““A few months back, when I told my landlady, as I often have in the past, that I think prices will fall, she said, “Why would they?”

  1. pffft! … miles famously counseled on risks in business that sometimes, just say wtf … after saying wtf at the office, here uncle ben demonstrates that wtf is not only great long-term economic strategy … dude, it’s just the way to be … http://tinyurl.com/95wk6vu

    • Indeed. Sometimes ya just can’t beat the ‘ol, “WTF, let’s just do it!”…

      In that spirit… Your Quote ‘O TheWeekend!…

      “It was very scary. All the customers come out and then I check everybody safe, I make sure everybody out, and then I run away. Very scary.” – Jennifer Phan, Restaurant Employee

      [CBC] – Fire tears through Vancouver supermarket, restaurant

      …”Fire crews continue to investigate after a fire tore through a Vietnamese supermarket and neighbouring restaurant in Vancouver near Broadway and Brunswick Street on Friday evening… Officials say it’s unlikely the cause of the fire will be determined because the damage is too severe.”…

      [NoteToEd: Are there *any* restaurants left standing on that stretch of Broadway these days?… I wonder what a LandRegistry and /or development permit application search would reveal]….

      http://tinyurl.com/cz5xyyx

  2. One of the smartest people I know keeps insisting that because interest rates won’t rise, there won’t be a crash. He insists that the same payment that he used to make on a $200k mortgage now gets you an $800k mortgage and monthly payments are all that matters. With banks offering to lock in 3.9% for 10 years, it’s a given that rates won’t rise much if at all. I just don’t understand finance enough to argue with him anymore. All I know is that my household income is 30% higher than the Vancouver median and I couldn’t afford to buy anything close to what I’m renting. So I don’t really understand who can.

    • crashed in us while rates went down – so much for that idea … think of the absurdity rates as a monster price fixing scheme … guaranteed to blow … 10 yr lock at 3.9% won’t support prices if for example, (i) people lose their jobs, (ii) buyers next year are locking at 4.9%, then 5.9%, etc.

      hey, just snuck over to garth’s to see what he had to say about 9/13, got this gem:
      “Central bankers, have become the guardians. Their concerted, coordinated and blunt actions have ensured no systemic failures will occur, no financial institutions keel over and no equilibrium is lost. Europe is contained. America is struggling back. China will be tempered. Liquidity will be injected repeatedly, as we saw this week, until stability rules. What most of your doomer authors forget is that sovereign debt is unlike consumer or corporate debt. No homeowner or CEO has the power to tax.”

      can’t decide if it’s worse he actually believes that or doesn’t … give him benefit of doubt and say he pulled a romney (i.e. read verbatim from the manual and forgot to encrypt) … ok, well maybe he did but with a really outdated cypher … decrypted >> unlike you people who need to get your finances in order, sovereigns don’t have to because they’ll just take it from you when needed … the conservative movement in the us must be doing a decent job of blowing that up – ergo enter uncle ben

      • The unspoken truth is that governments will be raising taxes big time, whether they cut spending or not. And banks can maintain profit margins on the backs of the debt slaves. Low interest rates are simply bait. Use them wisely if you can, but don’t gorge. There are no victims anymore, only volunteers.

      • [NoteToEd: Adam’s fave EspressoJoint’s in Westerham, Kent – opposite Gen. Wolfe’s monument/VillageGreen]

    • He is correct that cheap financing has enabled people to pay outrageous prices. And there is a certain percentage of the population who will do that. However, that doesn’t mean it makes sense. People only earn so much money in their lives. If you pay 800k for a house, that means far less money for other things. And super low interest rates suggest that inflation isn’t going to help you.

      If people aren’t looking beyond the monthly payment, it means exactly that. No consideration of the future. How will that work out? How would you expect it to?

  3. If you’re going to sell you just need the right music!

    • That is nast, a trailer in bumf*ck nowhere.
      Nice-ish production values though.They should have done it all in slo-mo and played big swoosh noises when they show the dining room and kitchen.

  4. Most younger Vancouverites (as in the under 25 crowd) I talk to can’t actually conceptualize housing prices actually dropping. If I mention the idea they just give me the “yeah right, it’ll never happen” look. It’s like talking to someone completely blind from birth and trying to get them to understand what the perception of colour is.

    • I could get that mentality more if we didn’t have a massive example of housing prices actually dropping, right next door. “Why would anyone sell their house for less than it’s “worth”?”. “I don’t know, why don’t you ask Joe six pack next door why he did?”

      • Remember that the Anti-Americanism that sort of underlies a lot of Canadian identity is stronger here in Vancouver than pretty much anywhere else in the country- even Quebec. Part of being a Vancouverite is feeling superior to those damn suburbanized wastelands filled with bigbox stores and freeways to the south. Being a Vancouverite is being different and better than any given American. So the same crash obviously won’t happen here.

    • “Being a Vancouverite is being different and better than any given American. So the same crash obviously won’t happen here.”
      Excellent point, you captured the sentiment and it’s effect perfectly.

  5. LandlordRescue.ca

    vreea…do you know anyone in Abbotsford who could do a little research? I need to verify some suspicions about a company based there. It’s a prety big story. You’ll freak when you find out seriously.

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