Curb Appeal
“Vancouver GM Mike Gillis made trading Roberto Luongo sound like a breeze.
If you listen to Gillis, you may think the Luongo market was something like the booming real estate scene in Vancouver a few years ago. Don’t like an offer? Wait an hour, a day or a week. A better one always seems around the corner.
But, let’s be real, that’s exactly what the Canucks need everyone to think, whether it’s reality or not.
“There’s been a lot more interest than people wanted to recognize,” Gillis said.
But what if you wait too long? Everyone knows what happened in Vancouver real estate. One day, the money turned off like a tap. What if teams interested in Luongo make alternate plans, unwilling to meet those Canucks’ demands?
“I’m not concerned about that at all,” Gillis said in his opening press conference, kicking off training camp. “Not one bit. I think there’re going to be multiple opportunities to do something with Roberto, if we choose to do it.”
– from ‘Gillis insists there’s no hurry to trade Luongo; GM says club will wait for ‘specific kinds of players’, Jason Botchford, The Province, 13 Jan 2013 [hat-tip to JL, for the link via e-mail, and who writes: “I wasn’t sure whether I was reading the sports section or the business section. Oddly enough the sports section of the Province seems to know more about the state of the Real Estate market than the business section.”]
Not only an extended RE metaphor (anybody still want to argue that RE hasn’t completely saturated the city’s psyche?) but also a comment on the RE market: “Everyone knows what happened in Vancouver real estate. One day, the money turned off like a tap.”
If this really is what “everybody knows”, the sentiment shift may occur quicker than we’ve anticipated, in which case expect an even chiller spring than bears have been forecasting.
– vreaa
Related posts:
Canucks Hockey Player Expresses RE Market Hope – “We finally bought in the Vancouver market and hope it keeps going up”
VREAA 9 Sep 2011
“NUX TIX OR MORTGAGE PAYMENT?” [Playoff-Placard]
VREAA 5 Jun 2011
And regarding using Luongo-trading techniques to sell Vancouver RE:
The Myth Of The Cool-Headed Discretionary Seller
VREAA 19 Dec 2012
Vancouver Real Estate Anecdote Archive 
“I think there’re going to be multiple opportunities to do something with Roberto.”
Ooooops.
[G&M] – Homes Sales Plunge: Market Clearly In Correction Mode
“Vancouver, in particular, has taken it on the chin, and observers believe it is the one market to have gone beyond a soft landing.”
http://tinyurl.com/bm36j3j
[NoteToEd: You don’t suppose GM Gillis was planning to have Luongo work off his contract by serving beer in the concessions/boxes, do you?]
In other [odd] news ‘crash’ related…
[G&M] – Woman Steals Train, Crashes It Into Swedish Apartment Building
…”He said it’s unclear how she got the keys to the train, but added that driving it is not that complicated. “Generally speaking that’s possible even if you’re not a train driver,” he said. “You can read about it on the Internet, or observe how others do it.”….
http://tinyurl.com/c58unpc
[NoteToEd: Well! That’s certainly one way to let everyone know how you feel about gentrification.]
It’s not all doom and gloom yet. Finally got my MiL to sell and they accepted an offer before their home hit the market in east van. Of course the subject is in place for 7 days. But it’s on a subject to finance, which will likely go through. I’m amazed in this slow market this home sold quick and for a nice price. 400k profit tax free will help them retire. I really hope this is the right decision as my ass is on the line.
Van guy,
With all the bad news coming out now about a big correction, the banks may be getting more cautious when lending, so financing may be an issue.
Good luck.
Sadly, I’ve been hearing lots of stories of financing falling through. Banks have done a 360 degree turnaround. They are still lending, but on their terms. Not so attractive terms. Let’s hope for your mil that her buyers will come through. I personally know of a friend who was offered the moon from the bank to buy a home in October. This month the same bank is reconsidering the mortgage. Nothing has changed for my friend’s finances.
Canucks fans know Luongo isn’t going to save the market from crashing.
Michael Levy on CKNW this morning:
“It’s a big correction, not a bubble”.
Quite a change in tone from just a week ago.
Who’s Michael Levy?
Giant contrarian indicator when nux fans are optimistic about, or hoping for, anything.
This is why Vancouver is toast. People have been taking the whole thing too lightly. It’s all about “jumping in”, playing the RE “sport”, getting your “groove” on, etc. when in fact there are hundreds of thousands and, in some cases, millions of dollars on the line.
Yeah, perspective has been lost.
I’d argue even bears have been desensitized to the preposterous prices. Over the years $600K starts seeming inexpensive for a home, when just 10 low inflation years ago it seemed like a very large amount of money. Thing is, it still is a massive amount of money (how long does it take an average Canadian to save 600K? — ask any retirement planner).
The average Cdn will be lucky to save a 1/4 of that by the time they retire.
“How long does it take an average Canadian to save 600K?”
Apparently more than one lifetime for 95% of us. http://www.newswire.ca/en/story/1023111/cibc-poll-short-on-savings-canada-s-50-somethings-plan-to-retire-at-age-63-and-keep-working
Very few people need 600k for retirement.
That’s just what the financial advisors are telling us.
They base it the assumptions that we all will live to 95 and that avg inflation will be 6%.
So they can sell us more stuff.
When I hear such comments, I politely ask them if there is any other place where throwing around years, if not decades, of after-tax income is taken so lightly.
I’ve noticed in Vancouver, it’s as if most people have never really thought that several hundred thousand to millions of dollars is actually a really large sum of money when the context is real estate. Not only is there a “Because:Vancouver. It’s different here” mentality, but there is a “Because: Real estate. Money is different in this context,” mentality too.
Would anyone with more knowledge of lending practices care to comment? Is real estate and the associated lending really treated as a different beast by banks compared to lending money for any other reason?
I can think of no more convincing evidence of the change in popular sentiment regarding RE than to have it quoted in the context of hockey.
I am absolutely stunned how quickly common perception has gone from thinking ‘RE only goes up and is a great investment’ to ‘market is dead’. Of course we still have to put up with a few months of listening to rationalizations (it’s different here because of HAM/running out of land/BPOE/drug money etc.) before we start hearing ‘I always knew it was a bubble’.
In this instance, I was genuinely surprised by the “everyone knows” statement. It implies to me that there are various relatively isolated pools of communication in the city, and that we don’t always know what’s going on in the other pools. This statement implies that suddenly, in one ‘pool’, there has been an awakening about the nature of the market.
vreaa: “In this instance, I was genuinely surprised by the “everyone knows” statement.”
Well, when I hear someone who I know was in the bull camp saying “yeah, everyone knows,” I’ll be able to point them to this wonderful repository to remind them of how little they knew – or chose to know – prior to the hammer coming down.
I’m sure that the “everyone knows” sentiment is liberally seasoned with “…and it ain’t going to be all that bad…” nonsense as well.
As I’ve said elsewhere on this thread, I am surprised by this statement at this time (this early). Later, we fully expect all the bulls to be saying “We all knew all along” (and, perversely, at the same time, sometimes in the same run-on sentence, being able to say “who could have possibly predicted this?”).
This CBC article demonstrates the cognitive disconnect well.
http://www.cbc.ca/news/business/story/2013/01/15/business-crea-housing-december.html?cmp=rss
The story is about houses not selling (down 17%) but the picture is of a sold sign. Maybe they don’t even have “for sale” stock photos to use at this point.
Tales from the RE crypt… TooToo funny not to share, immediately, here… DearReaders, your TuesdayZen Quote ‘O TheDay:
“All my tenants are very happy. No one has complained that they’ve seen ghosts.” – Ng Goon Lau, HongKong Hongza King
[WSJ] – Hong Kong’s Real-Estate Boom Conjures a Scary Development: Mr. Ng Sees Haunted-House Discount Vanish as Prices Rise; ‘Market Is Crazy Now’.
…”No matter what happened to real-estate prices in this superstitious Chinese city, the one surefire way to get a cheap apartment was to move in with a ghost. Websites track “haunted houses” or hongza, as they are known in Cantonese, which typically sell or rent for discounted prices.
But the latest boom in real-estate prices has nearly wiped away Hong Kong’s haunted-house discount.
That has been bad news for Ng Goon Lau, 62 years old, who made a career—and a tidy fortune—braving the supernatural. For more than 10 years, he says he has bought and sold apartments where a tenant died an unnatural death, paying a third less than the market price and later selling at a healthy profit. Meantime, he says, he rents to expatriates, who tend to be less superstitious than locals.
…Standard Chartered Bank (Hong Kong) Ltd. said it doesn’t provide mortgages for “haunted” apartments.”….
http://tinyurl.com/cdklh8o
Very funny,
“expatriates, who tend to be less superstitious than the locals” understatement of the year.
Also, do you get a discount when renting near a hospice?
Fascinating stuff, thanks Nem.
Tuesday morning essay question:
The “haunted-house discount” is the inverse of the “Best Place On Earth premium”.
Discuss.
It’s kinda telling that Canadians need a hockey analogy to understand that RE is toast.
This goes beyond just Luongo himself. Much like the “Bob Rennies” of the world, I think the entire Canucks organization (and the whole league for that matter) has gotten way too comfortable with the local fan base always being there to shell out countless thousands of dollars for tickets, merchandise and whatever else they’ve got to sell us no questions asked. Well, things are about to change as fans have got this team on a short leash now. IMHO, the Luongo trade talks represent a last ditch effort to keep us in the game for a little while longer. Oooh, who we get in return? Will Gillis hit a homerun? Will the Canucks win the Pres Trophy without breaking a sweat once again? Will this be THE year? Anyone with a brain knows Gillis has little, if any, leverage as these so called discussions proceed. Even if a deal were to happen, we will not be getting a franchise player in return. It will soon be apparent that Gillis has absolutely nothing to show for his few years at the helm and that this team is in serious need of an overhaul (as it was in the late 90’s). One or two new bodies won’t put us over the top. That window slammed shut in 2011 as the Olympic hangover was still in the process of wearing off (and downtown Vanc was burning to the ground). Like bids that get pulled in an instant, fans will hop off the bandwagon in droves and take their cash with them the very moment it becomes obvious to everyone that the Sedins’ best years are behind them, Kesler was a one hit wonder, Cory Schneider is not a significant upgrade to Bobby Lou and that the team will not be poised to take another serious run at the cup for another decade or so, perhaps longer.
Well, here we are at the half way point. I am sticking to my guns. Nothing has happened with Luongo as expected. The trade deadline is fast approaching, but I doubt they could even give him away now. The crowd is growing restless, some are not even bothering to show up now (lots of empty seats at most games). Having said this, I am amazed how many still believe they can get it done. Anyway, I say mgmt should cut the cord on AV if we lose tonight, but that likely won’t happen. Chances are that ownership will hit the purge button upon either missing the playoffs entirely or bowing out quickly in round one.
…and in other news, sources close to the matter are still telling us everything is fine in the world of Vanc RE (and all other asset classes that have been inflated and propped up with infinite amts of funny money). Spring is almost here, interest rates will remain at zero forever, go out and buy yourself a home or perhaps three if you feel lucky. In other words, same ol’, same ol’, nothing to see here, keep calm and carry on…
Both RE bulls and the Canuck bandwagon riders must clearly be drinking the same koolaid.
In a continuation of yesterdays topic, my portfolio made up of the equity from selling my house has increased in the last 3 months to cover 10 months of my currrent rent. In the interest of full disclosure my rental is worth about 50k less than the house I sold.
Very interesting. I’m semi-amazed to see this comment of “off like a tap” stated so as such a declarative, accepted statement at this point in time. Is popular culture really changing that fast? Wow.
I was similarly “semi-amazed” by the bluntness of the statement.
Not amazed/surprised at all.
This is classic herd mentality in action.
I thought this was a little early for a statement like this in a local newspaper. Later, yes, the herd will all be singing the same song.
Even I would not have described it as “off like a tap” except perhaps for some very specific neighbourhoods. Tells us how inward-facing perspectives can become.
I like to think that the writer of the article is a well informed real estate bear, perhaps even a reader of sites like these, and was using his position to float a reference that would never have made it into any article where Re was the central focus.
Maybe steev, or, if I’m correct in knowing the local sports reporting community, they have more than a few existing and ex-NHLer contacts embedded in real-estate-related activities.
Colour me stunned, too.
Sadly, I disagree with most posters here that this is a genuine reflection of current market sentiment. (Although I wish it was, and know it will be soon.)
I actually think that this is a case of the MSM being accidentally or deliberately trolled within the pages of their own scam sheet: the author is either a) not well-informed, or b) knows better but chose to deliberately manipulate the public sentiment. (Bravo!)
Either way, accidentally or deliberately, a very effective and important seed of doubt was just planted by the very shill group that’s been trying to quash it.
It’s even possible that he is one of our “loyal cadres” who has used or abused his position.
Is there a victim? NO! The sooner we get this show going, the fewer families are going to lose everything because they chose to believe professional liars.
Is there genuinely a group anywhere (aside from our ragtag little Internet Bear Congregation) who feels strongly that “the money [has] turned off like a tap”? Not yet.
Face it: not even WE think that the money *has* (past tense) turned off. We just think it *should*.
Note that most here have expressed some surprise at the comment.
There may be a group where suddenly it is “common knowledge” that money for RE has become scarce, and this article may be a missive from within that group. Not sure yet.
We can only hope!
Remember, how quickly the “tap turned off” in 2008.
Lehman Brothers was gone within one week.
Bullwhip, stick to realestate. Your hockey knowledge is lacking.
Give it a month. Question my hockey knowledge then. The fans here are more fickle than you realize.
Having said this, if home prices were to ratchet down another notch or two this spring, people will also be a lot less likely to binge on overpriced hockey tickets, 10-course tasting menus or iPads for their 3 yr old kids.
Disharmonious splittist!
Loyal cadres will always have money for iPads for their 3 year olds!
Loyal cadres save by sharing 3 apps and 3 entrees for 8 people with hot water and lemons all around!
Memo to Naked Official #9000:
1) Loyal cadres seen raiding the Griffins appetizer and dessert bar on 50% off nights will have their LV handbags searched, ziplock containers confiscated and be reported to the authorities.
2) Saving money will no longer be tolerated on the premises. Effective immediately, we will be charging for hot water with lemon, doubling the prices for all other beverages, automatically adding an 18% service charge to the bill for groups of 8 or more and terminating the use of takeout containers and doggie bags.
3) Please remember that the king crab and shrimp cocktail is there for everyone to enjoy. More food will be made available the following day. We kindly thank you for your business.
Naked Official # 9000.
immediately reissue Prime Directives to loyal cadres.
When shopping at Costco in Richmond, do not arouse suspicion by:
* using 1 card for 5 different purchases.
* returning vacuum cleaner, after it has been used to clean vacation
home.
* loading up shopping cart with vitamin and mineral bottles.
Loyal cadres are obliged to bring ziplock bags and Rubbermaid boxes to the buffet – stupid red haired barbarians are just going to throw all that buffet food out! (or even more nonsensically, let their staff take it home themselves! Oh the humanity!)
pfffft! … seemed ironically appropriate … http://tinyurl.com/cmr59x8
Another dynamic is that the author now faces the rage of two groups:
-his “tow-the-party-line-on-real-estate” editorial staff, who are naturally all self-made real estate barons on the side
-the “don’t-rock-the-real-estate-boat” general public, who are currently experiencing the precursors to general panic — that first sickening odour, the taste of tin in your mouth, the growing subconscious awareness that everyone on the ship is casually easing towards those 6 lifeboats while trying not to be noticed.
A lot of people read the sports section. That article will be read by hundreds of thousands, and not all of them will take the author’s past-tense assertion of common knowledge lying down. Casually and with finality suggesting that RE is dead (and has been for awhile) via a Vancouver paper is probably akin to some to Galileo’s crimes of yore.
I hope he doesn’t get threats or harassment from starving and desperate Used House Salesmen. Idle hands are the devil’s tools, after all.
If life gets too hard for him at his current job, maybe we can take up a collection?
I suspect these comments only got through because they appeared in the Sports section. Different editors. If it’d been in the Business or RE section, they’d have been ‘redacted’.
See what’s happening to Tiger Woods.
Once the world’s most valued sports figure.
Now the sponsors are dropping him like a hot potato.
Nike just yesterday released a series of new ads starring none other than Tiger Woods … he appears to be redeemed.
Yeah, but McIIory is the big star for Nike now. Just signed a 200 mill deal.
http://www.liveweatherblogs.com/index.php?option=com_community&view=groups&task=viewdiscussion&groupid=4331&topicid=16837&Itemid=179
the return-of-hockey ‘analogy’ is better suited to climate change. The Polar Vortex is split in two, one part over Russia, the other over Canada. Weather people have been expecting this for some time. NHL owners looking over their shoulder.
As for Roberto, I’ve felt for some time he’s very susceptible to hypnotism, just like the West Coast Real Estate bag-holder.
vreaa: “…various relatively isolated pools of communication… don’t know what is going on in other pools”. I find this an interesting observation. I am based in Courtenay. Here several very large development projects were commenced in mid 2012 and several more are planned to start soon.
What is interesting is that the city council, which includes a well known local realtor, and is on balance very developer friendly, along with the local developers, and the rest of the very large real estate industry listen to a voice very different from that on this site. That is no surprise. But what intrigues me is the question “Do they listen to any voice at all?”
Many readers of this site note that the data that would enable a Canadian version of Zillow are simply not available to independent observers of the real estate scene. But the impression I have is that the people who have access to this data are perhaps making no use of it all. How else to explain beginning projects in the face of overwhelming evidence that the party is over. I suspect that quite possibly the “powers that be” operate in a state of profound ignorance. This ignorance, possibly wilfull, is of course surprising because it can easily lead to bankruptcy.
This is how ridiculous price sensitization has become. You should be able to get a mortgage of about 3x your income. For a married middle class couple, that’s about 300-400k, with both spouses working. Add on a small down payment and houses In Working class neighborhoods like east van should be about 400-500k at most. Shows how out of whack the fundamentals are in this market.
Agreed.
We live in a “go big or go home” society when it comes to consumption or investments. Unfortunately, people went ‘big’ and soon they won’t have a ‘home’ to.
…go to.
Price desensitization is all fun and games on the way up. “Our house is worth a million six”. It’s dangerously fun to throw around lottery-size figures like you’re Bruce Wayne’s nephew in a night club.
The time for everyone to suddenly remember how much a “mere” ONE HUNDRED THOUSAND dollars actually is is during the “debt hangover” phase of the cycle.
The day that your banker tells you that you owe him $100,000 net, and are currently paying principal down at $750/month, you will once again very clearly understand exactly how much money that actually is.
I mean hell, $10,000 is a staggering amount of debt. Just ask a recent graduate. The loss and possible indebtedness that home-“owners” will experience over the next few years (because after all, every home is owned by someone) will be an order of magnitude larger.
What would any of us do if we took home a reasonable salary — say $5,000/month after tax — and were suddenly told that our net worth was -$x00,000?
The emotional consequences of being required to go down to your job every day for a decade in order to work your way *up* to penniless defy description.
I cannot fathom it, friends. I’m sad for everyone.
Exactly, the emotional and psychological consequences of experiencing “Pride of Ownership” disappearing will be very sad indeed.
“work your way *up* to penniless”
I’m stealing that phrase and using it as my own.
So here’s what I don’t get. Why are Canadian banks “conservative” compared to US ones? As I’ve stated before, one bank wanted to loan me 2.5 million dollars (I could “afford” a 3M home). Another bank keeps calling me to “invest” in more condos because rates are low. This is not being conservative.
Luongo’s problem, aside from being a perennial choke artist, is the fact that he killed his own market value by saying he’d waive his no-trade clause & pretty much saying it was time to move on. Now, all of a sudden, teams know that Gillis wants to move him and can offer up less.
The only thing bigger than Luongo’s ego is his mouth (and five hole for that matter).
Disloyal cadre, luongo has always been an elite goalie, so long as the puck isn’t more than 3 feet off the ground.. Or being shot by Kane, lucic, seguin, etc.
Also, defensive misplays like these are why gillis is hoarding d-men – cam barker to the rescue! Lol – Poor Ballard, paul Coffey he is not. Can’t even hip check without getting a clipping penalty ..
The home buying and renovation show ‘Property Brothers’ is going to film the next season in Vancouver.
“Property Brothers is looking for couples or families in Vancouver and the Greater Vancouver Area! We want to help you create your dream home!
Are you looking to purchase a new home but find that all the perfect properties are beyond your price bracket? Are you resigned to buying a ‘fixer upper’ but daunted by the prospect of a large renovation? …”
Umm, I’m not sure how many couples or families in the Vancouver area can even afford a ‘fixer upper,’ let alone the renovation cost… 😉
http://www.yattermatters.com/2013/01/home-selling-deal-of-the-day/#more-32782
I believe this may be a typo and is indeed for a future show “Property Bothers” which will indeed, feature Vancouver.
I saw what you did there Aldus… =)
After Luongo goes South with HELOCS and home prices , loyal Vancouver cadres will be missing more than just swap meet Louie merch and mishandled world class goalies.
hey gang, check this out:
http://www.thestar.com/business/article/1315328–housing-market-continues-to-cool
I present this without comment, because really, what could one possibly say… $20m in Toronto condo investments expected to rise 10%per year in perpetuity? Just… wow.
“Chief Theresa Spence finally emerged from her teepee on Victoria Island in Ottawa today and delivered a bombshell: $20 million of untracked money was used to invest in downtown Toronto condominium units in the past year.”
http://canadanewsnetwork.wordpress.com/2013/01/15/chief-spence-attawapiskat-money-spent-on-toronto-condo-investments/
“After doing some research and talking to some Toronto realtors, we decided to make a strategic investment by using the cash to purchase 45 condominium units in downtown Toronto. This was a no-brainer for us, as there has been a stratospheric rise in real estate prices over the past decade. The great thing is that we do not even need to spend money on a property management firm to rent out the units; we anticipate the properties to rise in value 10% annually in perpetuity, which is much higher than our rock-bottom 3% mortgage interest rate.”
Is this for real?
Nevermind, its a satire blog.
Canada News Network is a web site dedicated to satirical news coverage of contemporary events in Canada. Please note that news articles are satire, and are not real news, even though they are typically and loosely based on real events and personalities.
Satire aside, it is interesting to see these references pop up in the MSM, isn’t it?
You’re all such good sports. 🙂
Chief Spence: Attawapiskat Money Spent on Toronto Condo Investments
http://canadanewsnetwork.wordpress.com/2013/01/15/chief-spence-attawapiskat-money-spent-on-toronto-condo-investments/
“After doing some research and talking to some Toronto realtors, we decided to make a strategic investment by using the cash to purchase 45 condominium units in downtown Toronto. This was a no-brainer for us, as there has been a stratospheric rise in real estate prices over the past decade. The great thing is that we do not even need to spend money on a property management firm to rent out the units; we anticipate the properties to rise in value 10% annually in perpetuity, which is much higher than our rock-bottom 3% mortgage interest rate.”
Not a vancouver-specific anecdote, but great stuff in here to profile.
Never mind… i’ve been had!!!
Never mind.. I’m pleased that the ‘forward guard’ here (Groundhog, JoeQ) went through the process… High chance I’d have been had here too!
…
Funny joke.
What’s really smart about the joke is that the story seems pretty ordinary and on the face of it ‘normal’: the kind of stuff we’ve been reading for years.
It was too good to be true hahaha… great stuff.
But question this. Was it only funny because you found out later that it was false? =) (And is it sad that we assumed it the truth first…?)
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