While national media, international media, and various internet commentators are all warning of increasing signs of a Vancouver RE mania in the early stages of implosion, the Vancouver Sun continues to march out overly-optimistic arguments from the usual suspects. Above image of an article in the 29 Dec 2012 Vancouver Sun print edition (page D11) shows how visual prominence is given to the ‘Sold’ property (hardly representative!) and to the headshots of their chosen experts. Celebrity over substance?
Somerville argues that external disruptions are necessary for a local housing crash. This is incorrect. Speculative manias all collapse for the same essential reason: they run out of fuel. External shocks may speed along collapse, and will likely be argued to have ’caused’ a crash, but the real core reason for a crash is the underlying unsustainable architecture of the spec mania itself.
Muir believes that sales, now below average, should return to the mean, to their “long term-averages”. This is intriguing argument, as we’ve never seen him apply similar logic to prices, which would have to plummet by 50% or more to return to mean historic trend lines.
The Sun article has been discussed and dissected at Whispers from the Village on the Edge of the Rainforest: ‘You can almost smell the desperation – buyer’s once again told prices will not be coming down’, 30 Dec 2012.