A Journalist’s Richmond Tales; And His Caution – “It could be argued that the operators of these bear sites are hoping to trigger a “bubble collapse” simply by writing about it all the time, and offering opinion biased in that direction, even supported by stats. To what end? Perhaps they are renters, and want to jump back in post-collapse, and then reap financial rewards when prices go up.”

“I’ve been watching carefully, and reading religiously, the postings on this website.
As a journalist for nearly two decades, I enjoy the perspectives shared, especially about the biased nature of certain opinions from within the media, real estate organizations, and members of the public, as well as those who run this site.
I’ll wade into that later, but first, some real facts from Richmond, B.C., where much of the real estate craziness has been centred.
First, a little background.
My family first bought a split level house in 2002. A modest, 1,500 square foot, three bedroom, 1.5 bath, on a lot that measured about 8,000 square feet.
We bought for $320,000, and within six months, the prices in the area “soared”—I use quotes, because at that time, we thought this was the definition of “soared—by more than $100,000.
At that point, we’d already maxed out what we could borrow from the banks, and we thanked our lucky stars we got in when we did.
But our house wasn’t worth renovating, so when a home in the neighbourhood with better bones was listed in 2007, we jumped in.
We sold our place in a bidding war for $30,000 above our asking price, and landed this other home, a dozen doors away, for about $550,000, slightly more than we sold our old place for.
By then, my wife was back at work, my kids were in elementary school, and we could afford the larger mortgage.
We then renovated it, planning to live there for the next 25 years.
But alas, then the real craziness began, which redefined “soar” for us.
We were approached by a developer offering seven figures. Our jaws hit the floor. But we’d just renovated, and were emotionally invested.
Then we slapped each other in the face, and agreed to sell it for roughly DOUBLE what we’d bought it for. This was in 2011.
Turns out, the buyer also bought at least one other home a few doors down, and was planning to raze the structures.
Having received the offer, we were worried about the market continuing the insanity, and didn’t want to be priced out, so we sought out another home not too far away. It was priced $300,000 less than what we were about to sell our home for.
The deal closing period was the normal three months, and it was the spring of 2011. This was when the first hint of the frailty of the market appeared.
The buyer backed out of the deal, citing that financing wasn’t approved. (We’re convinced it was an excuse; banks were handing our mortgages like flyers)
We were shocked, and the deal to buy the other home died too.
Although it didn’t appear that way at the time, we were actually lucky the deal died.
We decided to list the property, and in early 2012, we sold it for $100,000 less than the previous year’s deal, to another developer. But we were still well ahead despite the six figure drop.
Our notary public was shocked to see the price we got. Nobody was getting that kind of money anymore in 2012, she said, for a tear-down.
Instead of buying again, we decided to rent, and that’s where we are today, as prices continue to fall.
By how much? Well, don’t let the Greater Vancouver Real Estate Board’s averages mislead you.
The devil is in the details.
Those median selling prices truly can fool you into thinking prices are “staying about the same”.
That’s not true. We’ve seen asking prices commonly drop by more than $50,000 for one $950,000 house we looked at. That other house we’d bought—before the original deal died—wouldn’t fetch within $150,000 of what we’d bought it for, and the neighbourhood is relatively ugly and certainly less desirable.
We almost bought another house from that original deal, bout were eked out in a bidding war for the house that sold for $950,000. Today, similar houses in the neighbourhood are listed for $120,000 less.
There are people out there, still wishing for their $1,000,000 pay day. But that’s not going to happen anytime soon, based on my close observations.
I’m convinced, based on conversations with my realtor and others, that much of the hype was generated by offshore buyers seeking new homes, and local developers scooping up tear downs to meet this foreign demand.
Today, in my old stomping grounds, there are close to two dozen brand new megahomes listed for $1.8 million or more.
They’ve been lingering on the market for more than a year, and in one case, closer to two. Those prices aren’t budging, but those developers will surely start feeling the pinch, as money from offshore (mainly China/Hong Kong) has dried up.
One house directly beside ours was bought for $720,000, a crazy price, only for the prices to further soar to $950,000 for our neighbour, in the span of just three months in the fall of 2011. A new house was built in its place, sold for $1.78 million to the parents of my son’s classmate, and is now back on the market for $1.9 million. Wishful thinking, no doubt, for someone wishing to be on the outside again as prices fall.
In the McNair area, I’ve seen houses drop in asking price by more than $150,000. Now, sure, you could say the owners were simply listing too high. But we’re not talking talking about one or two homes. We’re seeing many homes drop in prices by six figures.
When those home prices drop enough to attract a buyer, that will bring down the median selling house price, but only if the market for multi-million dollar homes remains quiet as well. If demand for pricey homes rises, those other price-drops would be masked.
I believe that prices have been propped up for a long time by higher-priced homes selling, hiding the street-level changes I’m now seeing.
This month, I’ve seen some evidence of change.
One house in the South Arm area listed for $720,000, and sold within a month. It was a modest rancher, on a corner lot of above-average size.
Other slightly larger homes on smaller lots, including one directly across the street, still are asking for $910,000+.
The bottom line: whether it’s a matter of the “bubble bursting”, I’m no expert.
But when prices drop 20 per cent, that’s nothing to sneeze at.
Now, back to the issue of biased reporting, readers should keep this in mind.
Journalists aren’t paid to share their opinions unless they are writing a column. They simply report results of research, observations, and the opinions of others, essentially.
When I read that a real estate association thinks this will be a good year, I’m reminded of one of my university classes.
I believe the term/phenomenon is “self-fulfilling prophecy”.
Real estate assocations/boards are understandably directed by their membership, which is realtors.
To say the sky is falling might just trigger said sky to fall, at least in terms of prices.
This should be self evident to readers.
It’s like asking a used car salesman if he likes used cars, or if the price of a particular used car is fair. If he says the price is inflated, you’ll offer less, and he’ll get less commission, thereby shooting himself in the foot, and earning the scorn of his bosses.
The same could be said for financial analysts. Those with enough of a following/clout could trigger cold feet among deep-pocketed investors, resulting in a cascading-like crash if they indeed predict one.
And finally, the same could be said of the analysis done by the operators of this site.
I once interviewed the frequently-quoted-on-this-website real estate expert from UBC, who referred to the Vancouver-based blogsites that have been predicting a crash for many years. (He claims there is no bubble, and therefore it can’t burst.)
It could be argued that the operators of these sites are hoping to trigger a “bubble collapse” simply by writing about it all the time, and offering opinion biased in that direction (even supported by stats; I’m reminded of the saying, there are lies, damn lies, and statistics, the latter of which can be conjured up to demonstrate almost anything). To what end? Perhaps they are renters, and want to jump back in post-collapse, and then reap financial rewards when/if prices go up.
Is this likely? Who knows.
But don’t believe everything you read.
Do your own homework, keep your ears open, take everything with a grain of salt.
And remember; when you hear an opinion, take into consideration who gives it.
Do they have a vested interest?
Almost everyone does, including me, as I’m hoping prices plummet so I can reduce my future mortgage as much as possible.”
– Martin comment at VREAA 31 Jan 2013, held up in the automatic moderation filter (likely because of length); also sent via e-mail; headlined rather than posted as comment.

Many thanks to Martin for the stories, and for sharing his thoughts about bias.

Anybody who downsized their RE holdings, or sold entirely, in the vague vicinity of the top, will do fine.
This will, however, end up representing only a very small percentage of owners.
Anybody who bought or ‘moved-up’ during the run-up, especially in its latter stages, was speculating on future price gains, even if they didn’t know it.
Those who purchased with leverage, with more than their entire net worth in RE, will be particularly fortunate if they end up lightening up at higher prices. In the vast majority of cases, this occurs by good fortune.
Martin used some skill in selling in so much as he was able to recognized the prices offered as being ludicrously high, and made the decision to take advantage of that, and he should be congratulated for doing so.

As to the discussion of bias of opinion, including that on this site:
Of course each and every argument has a source and, consequently, a perspective.
And it is wise to suggest that we all take careful note of the source of any opinion.
At the same time, I would suggest that it is far more important to consider the content of the argument than its source. This is one reason, in our opinion, that there is a place for anonymous commentary on the web: their are benefits to making content the focus of the discussion.

A waggish response to Martin’s fair objections concerning bias would be to make a quip something along the lines of “Yes, but my bias is the right one!”
The true word in that jest is that we do, indeed, believe that the evidence (the “statistics”, if you like) strongly supports the bear case. We genuinely can’t see how one can’t conclude that this is a market that’s very overextended and at high risk of a large price collapse. We accept that people arguing many other positions may see the market very differently, and may be just as sincere in their arguments as we are. And of course we are aware that some can make arguments in an insincere fashion, when they have other motives for putting out a certain message.

As for the argument that bears are trying to purposefully bring on a crash, I’d say that the thought greatly overestimates our influence. Remember, bears have been warning of the mania for many years and it has made absolutely no difference to the behaviour of the herd. A healthy and balanced market cannot be influenced by an opinion that it is not a healthy market; especially if that voice is heard by only a very small percentage of participants.
When a speculative mania collapses, reasons for the collapse are always sought. But manias end simply because they are manias; bubbles pop because they are bubbles. We have started a collection of
Erroneous Theories For Falling Prices(linked in the sidebar categories section) which already has 7 candidates. Number 3 is “Vancouver RE Bears Caused The Crash” – excerpt:
“It is common, as speculative manias implode, for ‘naysayers’ to be blamed for the shift in sentiment.
But those same bears went unheard when the market powered ahead. Suddenly, inexplicably, people start listening to bearish predictions? No, the market turns of it’s own accord, and the sentiment change reflects the turn, not the bears suddenly gaining attention.”

– vreaa

70 responses to “A Journalist’s Richmond Tales; And His Caution – “It could be argued that the operators of these bear sites are hoping to trigger a “bubble collapse” simply by writing about it all the time, and offering opinion biased in that direction, even supported by stats. To what end? Perhaps they are renters, and want to jump back in post-collapse, and then reap financial rewards when prices go up.”

  1. pricedoutfornow

    “Perhaps they are renters, and want to jump back in post-collapse, and then reap financial rewards when/if prices go up.
    Is this likely? Who knows.”

    Excuse me Martin, I am a 30-something who hopes to buy a house and yes, I hope prices go down a lot. Reap financial rewards? No. I just want a damn house to raise my family. Is that so difficult to understand? I have about $100k to put into a downpayment, This would have been a decent downpayment prior to the boom, and the mortgage would have been affordable (I understand one could by a house in East Van for about 300k in 2001). These days it’s nothing and the mortgage, ridiculous. So I wait, and hope, and continue to rent. I’m not hoping to hit jackpot by buying low and selling high-those days are gone. Just want a roof, a yard, a place of our own.

  2. Peak pricing hit on May 11′. Sfh avg got to 1.1 mil. That is absolutely ridiculous as the price prior to the boom was in the 300’s. Sales are slow and the odd low ball comes through. If you’re buying in the ditch now, look for homes that have been sitting on the market for a long time, long time owners, and find out what the vendors paid!! This gives you the upper hand and the chance to low ball.

  3. Martin, why are you talking to the Tsurd?
    He’s obviously affected your outlook.

    These sites are essential, they report the other side of the story in an unbiased way that the MSM can never get right.

  4. “In God we trust; all others must bring data” – Deming

  5. Kill all baby boomers

    Martin, I don’t come to this site with hopes of stimulating a crash. I come here to gather data so that after the crash has come, I can bask in the schadenfreude of broken careers of liars.

    • Naked Official #9000

      Disloyal cadre! Such disharmony – why do you pray for the fiscal demise of your superiors? Why are you unpatriotic?

      You’ll be waiting a long time, bears! We will suck out your gall bladder juices before prices decline! Do not listen to these splittists! The Dalai Lama is behind this!

  6. My wife and I own a house, as readers here know. And yet I’m also very bearish on Van RE, and I believe we’re in a huge bubble. And yes, I want the bubble to collapse, because it’s the best thing for the city we all live in. It’s not always about self interest.

    And think about all those aging Vancouver home owners who have kids who are now priced out. Many of those parents don’t like what’s happened to prices, because it has screwed the next generation.

    It’s hard for anyone to be completely objective. However, there are some who don’t even try.

  7. Lifetime Renter

    Martin implies that interest in the phenomenon of housing can only be driven by thoughts of financial gain or loss. I grew up in rented housing and was never infected with the desire to own the place I hang my hat. For me sites like this provide a window into the destructive consequences of shelter becoming a plaything for speculative interests and bank capital. With very few exceptions, the mainstream press parrots the latest nonsense from real estate and development interests and their bought and paid for politicians. No stories on what sky high housing costs are doing to average people. No stories about young people whose progress in the world is interrupted by housing unaffordability. No stories of workers forced to live ever farther away because there is no place for them in the lower mainland. No stories, statistics and analysis about the flood of nouveaux riche from China. No analysis and critical commentary on the ugliness of a city which builds either incredibly small, ridiculously priced condos or mini-mansions for the rich. And no warnings of the incredibly destructive consequences of the bursting of that bubble. A blog like this would have no audience were our ‘free and democratic press’ not owned by and totally beholden to the most powerful economic interests in our society. Shelter is a basic human need. Something is profoundly wrong when a society as wealthy as this no longer provides the majority who do the work around here with decent affordable housing.

    • I agree with much of what you say. On this site, not long ago, was a Vancouver Sun clipping about the R/E market. Among my journalist friends, and in our newsroom, we often joke about The Sun’s shameful stories, which reek of being influenced by developers and realtors who buy all the ads in their New Home section every day. Lots of biased stories there, no doubt, to keep those advertisers happy.

    • Real Estate Tsunami

      Well said, Lifetimer.

  8. To reiterate, I simply suggested a few types of bias that a commenter might have. I did not say all/any who visit VREAA have this bias.The reason I visit this site is to find out what’s happening on the street as I try to gauge what to do next. Any site that sparks discussion on matters of interest are not only valuable but critical in the decision-making process.

    • It was very fair of you to bring up the issue of bias.

    • With deference the issue of bias is a sidebar; those who have analysed the crap out of Vancouver have, after careful and objective consideration, concluded it’s a questionable investment. Many disagree but that does not mean the bias on one site is somehow of equal stature to bias on another. Ben Jones is a good example; a great many people “biased” by agreeing with his collated articles and using this to guide their decisions saved themselves a whackload of cash.

      • Sure.
        We do believe that there is a central truth about the matter (the RE market in Vancouver), and we sincerely attempt to try to get to the heart of that (as I think, do you, jesse/yvr). We want our position to be as close to the truth about the matter as possible.

        What Martin is warning about, of course, is that some voiced positions will be distorted by conscious (or unconscious) vested interest factors.
        It’s an important issue but it’s also correct to view this as a ‘sidebar’.
        And it’s still fair to find oneself a position despite all this.

        This also obliquely reminds me of the pitfalls for trying to achieve a ‘balance’ when weighing different positions.
        The well known counter-example of ‘Flat-earth vs Slightly-distorted-globe earth’ shows how sometimes ‘balance’ is ridiculous.
        It’s okay to weigh the info and take a position; that’s what most of us here are doing.

  9. I think that one thing to remember about bias is that people often set up their circumstances based on their bias and not the other way round.

    Like Martin I do not own any real estate and hope that it comes down significantly. The reason I don’t own any RE is because I believe that this will happen. I don’t believe this will happen BECAUSE I don’t own any RE.

    If I believed that RE was going to go up significantly, I would go out and buy as much RE as I could get my hands on and then my bias would be toward prices raising. If I chose to, I could buy the place I rent for cash and still have enough for 20% down on a decent rental. But like Martin I choose not to because I think that would be a bloody stupid thing to do.

    If I didn’t have any hope of buying without prices dropping steeply then I would be very biased toward prices dropping. If I was a condo developer I would be very biased toward prices raising. But I have no vested interest in the market going up or down. Prices go down I save money, prices go up I make money, either way it makes no difference to me.

    There seems to be increasing numbers of people aligning their circumstances with a crash and less and less aligning with a boom. Both groups are biased and hope they are on the right side of the bet but it is the movement of people who could be on one side or the other that tells us where the market is going.

    • One other insight I forgot to mention in my post. My wife and I continue to look for a suitable home for our family, and so we often chat with our realtor, a good family friend. He shared this with me during our last tour of homes.
      He said after the Mcleans article forecasting a RE collapse, he was contacted by a panicked client who owns two condos in the same Downtown Vancouver highrise.
      The owner asked our realtor to list the condos ASAP and to fetch whatever he could. An article in a national publication can influence a lot of people into action. If enough discount their properties, price drops of 20 per cent are certainly a possibilty. If interest rates go up, and the economy falters, or if other countries experience economic setbacks, these could certainly also impact the extent of the price drops.

      • Yes, but those price drops will represent a (partial) reversal of massive price overextension, which would have occurred at some point regardless, and not an aberration bought on by that Maclean’s cover.

      • Real Estate Tsunami

        Mcleans wrote an equally sensational article about 3 years ago.
        And RE kept on going up!
        I think that the herd can only be fooled for so long, until the smell of fear permeates the herd, leading to a stampede.

      • The Poster Formerly Known As Anonymous

        And one year ago, also. This is the third sensational Macleans article. The one you refer to from about 3 years ago was followed by the next leg up, fuelled by the slashed interest rates.

        In 2006, 2007, 2008, 2009 any Canadian with reasonable access to media could have read a slew of stories about US and Irish real estate. None of these terrifyingly scary stories halted the mania.

        Its disingenuous to claim that now, bearish press is bringing the downturn on. The real meat in the story that swayed your realtor’s client was the data. The client was simply made to notice the trends. That it took a Maclean’s article rather than a blog page written by Ben Rabidoux is an indicator of the extent to which the person performed due diligence on their investment. Most will accept the herd position without scratching beneath the surface, until the moment something triggers them to actually pay attention to the facts.

      • We are very similar in our outlook. I also regularly look at properties that I think we would like to live in but I’m not seriously looking, as I think we can take our time. My intention here is not to skite, but in the last month the money we invested from our house sale has made enough profit to cover 11.3 months of rent. It just wouldn’t make any sense to take that invested money and buy what we can rent. Head lines from Mcleans may wake up a few people like the person who realised that probably all their money was in two condos in one highrise and prices looked like they were going down. No doubt they will thank the article in the future for saving them from further drops. At the end of the day though, it just speeds up the return to normal. Today I contempated a foreclousure for $99k in a building where prices have been over 150k for 5 years and came to the conclusion that I would have to think about it if they gave it to me for free. If it wasn’t listed as foreclosure I wouldn’t have thought of it at all, the foreclosure merely bought it to my attention. If I thought that prices were goin up I would have jumped on it.

  10. curious outsiders have more bias … pffft! … http://tinyurl.com/3euj4p … ps. reading this blog is becoming too much like work … ack!

    • hahaha
      For the information of those who haven’t followed that link, rod pointed to:
      “Newsroom : Weather Channel Accused of Pro-Weather Bias”

      • You know what you need to add, vreaa, is a bunch of Realtor posts or comments, you know, the ones that say, “I don’t look at the overall market, I look at my area of interest, and let me tell you, things are bis-seeee!”

        Busy Realtors are busy.

        The numbers say, on average, when it comes to the importance of closing, some are falling a wee bit short.

        You want to talk bias: NSFW

      • @y … conceded … your bias is bigger … ps. my bias still abcd (anything bernanke cannot destroy)

  11. So what is the picture just above the TIME Magazine for (The happy stick figure jumping over the pointy wood post)?

    Of course, you also have the “Bears do too” graphic. You care for them after the pointy wood post hits the guy’s family jewels? You can just hit the bulls’ balls with a very hard object, but it wouldn’t be fun if you don’t upgrade the stick with sharp post.

    You miss the point if you think one side will come out as winner. The housing market has well passed that point. Maybe you should reflect that sentiment, the reason for Martin’s long post, in your future posts.

    • The ‘pointy wood post’ is a house. Or the guy is very big.
      Either works. Perspective.
      But the image does express the risk of hubris; so you are correct that it suggests a risk of injury to the happy guy.

      If you re-read the ‘bears care too’ post, or numerous other posts, you’ll see we voice concern about the effect that the massive misallocation of resources caused by the spec mania has on all citizens of our city.. we don’t see this as ‘two sided’.. that would be a gross oversimplification. The effects on individuals will vary, though.

      • The ‘pointy wood post’ is a house. Or the guy is very big.
        Either works. Perspective.

        Maybe the pair of balls I own have caused the perspective differences. I Again, the same recurring theme here – Owners Vs Non-Owners or Would-be Owners when the balls are lower.

      • Well, yes.
        Hubris, and claims of having ‘balls’, are often closely related.

      • But the haves and have-nots are not a matter of choice. Unless, you use some extreme measures, like hitting them with posts figuratively or physically.

      • Naked Official #9000

        @cris

        Loyal cadre, wu mao has been deposited in your account – the party appreciates your efforts – however, in the future, please do not get our working hours mixed up again – this is my shift.

        It’s dine out Vancouver right now, so feel free to take the 6pm-9pm shift, I will be sipping a hot water with lemon in the most exclusive, high end, prestigious restaurants in the city.

      • Real Estate Tsunami

        Naked,
        Make sure you take along lot’s of Tupperware.

      • Naked Official has no shame

        @tsunami

        Unfortunately dine out Vancouver is not a buffet – though for 29.99yuan it ought to be!

        (in a pinch, ziplock bags will work at buffets, top)

  12. Just a thought on bias:
    It seems to me that every Canadian who has the intention of staying in Canada has an inherent long or short position on the real estate market. Every one!

    People who have an inherent short position (renters) are often fingered because of their natural bias, despite the fact that every owner has an implicit long position, creating an equal and offsetting bias.

    I’ll echo VREAA’s suggestion that we ought to give consideration to potential bias in any argument, but ultimately the content of the argument itself should be our focus.

    • I’ve made the same argument on this site before, that renters are short as they are paying the dividends on a home’s stock but no one would (openly) agree.

      You sell a house/stock short the moment you move from home and begin to pay your way in rent/dividends.

      Renters are speculators too.

      Let’s see if a voice of authority shifts their opinion.

      • Cyril Tourneur

        I agree that renters are investing short but they are NOT speculators.
        Investing ≠ speculating.

    • I don’t think the renter equals short position analogy holds.

      When you have a short position, you sell and intend to buy back at a lower price, pocketing the difference. That applies only to renters who are waiting for lower prices in order to purchase a home. If the price goes the other way and they have to buy at a higher price, they take a loss on their short position.

      But many (most?) renters have no intention of ever buying real estate. By analogy, they have NO position in the market. They can’t profit from astute short-selling, but neither do they risk a loss. For them real estate is a commodity that is necessary for survival, like food.

  13. Real Estate Tsunami

    All lies and jests,
    still a man hears what he wants to hear,
    and disregards the rest.

  14. I want the bubble to pop mainly to be able to say “I told you so.”

    Except that I won’t say it. I’ll just give that annoying, knowing look…

  15. Victoria numbers looking real bad. Sales down 20% YOY and median under $500K for first time in years. It’s only January but there can be no weather excuses etc. The spring could get ugly here as the buyers see the downside and back off furher. Of course the RE bizz will pump it as a time to buy.

  16. To be honest I don’t really get the whole bias thing. I took a look at the fundamentals of YVR RE. They looked crappy by every metric except monthly carrying costs. I looked at my personal circumstances. I decided to rent not buy. My decision to rent didn’t bias my analysis of the RE market – it is the result of it.

    Similarly, friends have performed the same assessment and concluded it is right for them to buy. Good for them.

    Does my renting now predispose me to feel negative about the prospects of house prices increasing? I don’t think so…I am still capable of analyzing the fundamentals and coming to a different conclusion if things change.

  17. When 99.8% of the uninformed masses, plus the ENTIRE MAINSTREAM MEDIA, are chanting:

    “BPOE/Yellow Helicopters/Not Making More Land/New Normal/PRICED OUT FOREVER!”

    …and other emotional propagandist sloganeering that means nothing and is based on nothing, and land values “coincidentally” soar, the bulls claim that it was all just caused by invisible market forces that nobody really understands and has nothing to do with irrational public sentiment or bull (or FIRE industry) cheerleading.

    But the moment that the wild speculative runup falters, every second bull starts screaming “OMFG the 0.02% of the population who were skeptical have TRIGGERED the collapse! Self fulfilling prophecy! Self-interested amoral bear blog misanthropes have destroyed Canadian families’ wealth! By preaching to the choir!!1!”

    I would argue that you cannot have it both ways: The dumbass cud-chewing automaton majority either *does* set prices or it *doesn’t.* Full stop.

    If the tiny group of Bears –who proudly and repeatedly admit to being self-selecting fringey skeptical outliers and *not* statistically representative or influential in any way– were able to change market sentiment via rants and diatribes on admittedly biased opinion blogs, WE WOULD HAVE DONE THAT half a decade ago.

    The market has willfully and belligerently disregarded any and all suggestions –by Bears and occasionally by the MSM– of a bubble for nearly a decade now. We freely admit to impotence: we have always been and will always be completely powerless over this ridiculous and tragic slow-motion economic train wreck. We did not cause the bubble and we have not ended the bubble.

    • Nicely put. +1

    • UBCghettodweller

      “OMFG the 0.02% of the population who were skeptical have TRIGGERED the collapse! Self fulfilling prophecy! Self-interested amoral bear blog misanthropes have destroyed Canadian families’ wealth! By preaching to the choir!!1!”

      Similar fingering of minorities has worked for most totalitarian states over the years. Why not here? When it comes to money, dirty play is normal if not expected. Empire building, dynastic traditions and iron fisted rule is how the corporate world is run. Ethical business men are mocked while the tyrants are lauded.

      … not that I’m some leftist that believes in government run socialist states. I’m just sick of parasitic and destructively competitive business practices that serve no greater purpose. A society to servce the market rather than a free market to serve a civil society.

      -end rant
      -I should switch to decaf

  18. Blah. For every ONE bear blog site, there’s probably TEN bull sites.
    In fact, every realtor/investing website is a bull site.
    Look at all the ads and flyers out there, “Make money in cash flowing real estate.”
    “Buy a condo, earn 230% ROI (via Brad Lamb)”.
    This is like the pot calling the kettle black.

    • Bull websites include:

      Almost every…
      …newspaper
      …magazine
      …realtor
      …bank
      …mortgage broker
      …developer

      Not to mention physical “bull sites” such as most Starbucks, Coach Purse stores, tables in the mall food court, Audi dealerships, Cactus Clubs, ski lifts in Whistler, dinner tables, family reunions, and towels on Kits beach in the summer.

      Lower Mainlanders are bathed continuously in written and verbal propaganda, anecdote, “data”, and “fact” about the boat that we have ostensibly missed.

      Relative to the fire hose of real estate industry “truth” coming from everyone we know, meet, hear about, and overhear, there are so few bears that they can probably statistically be rounded to zero.

      Relative to size and monstrosity of the herd, we quite literally do not exist.

  19. Hello, I’m a renter and put away almost $1000 a month since I sold my place in Spring 2012. Unit next to my old place sold for $20K less just last week….draw your own conclusion. $10K in saving and about $20K gain if I buy same unit today.I’m sure I’d would not be able to pay off $30K in mrtg in one year. I have no plans to buy in Vancouer at all for now….what’s the point ? Slavery to the home you pretend to own ? RE is dropping values clear and simple. We had good 10 year and RE cartel has a problem dealing with a new reality. The party is over for the crappy agents that got used to easy money.

  20. Real Estate Tsunami

    “Bring me your tired RE bears….”.
    Burnabonian, where do we sign up?

  21. Maybe you can teach me where to park the savings morally if there is such a thing. How much banks pay for deposits? 1/2%, 1%? If your cash only buy you lunches, but not dinners, then what do you do? Who are you to complain people buying RE, so they can feed themselves and against whoever-it-is that steals their money?

    Just as you say bear blogs can’t tank the market, Individual RE buyer doesn’t dive up the market either. Yip, go ahead try to drive up the SP500.

    You just got the wrong guy.

  22. Real Estate Tsunami

    Confession: My name is Real Estate Tsunami and I was RE bull until the autumn of 2007.
    I sold my house after it had appreciated about 80% and have been a renter ever since.
    After I sold my house, I became a RE bear, though I prefer the term contrarian.
    I have to admit it was tough slugging for some time, as the market, after tumbling in 2008, bounced back in 2009.
    However, I stuck to my guns, and I believe that my patience will be rewarded within a year or two, as I expect the market to correct by at
    least 50%.
    At that time, this current bear will become a bull again.
    As a matter of fact, with spring approaching, I am already
    longing to go to Open Houses and check out the bargains.

  23. Seeking knowledge...

    I wonder if we do a poll in this blog, how much will RE price need to drop before the majority will say it’s a good time to buy?

  24. Now I”m really worried. It’s not enough the government manipulates the housing market with interest rates and the banks with amortizations and lending to those not worthy of lending to. Now blogs like this can cause a housing bubble to burst? Who woulda thought it? Well then, let’s all start up blogs to prop up the market. And maybe if we all jump up in the air at the same time we can cause the planet to tilt too.

  25. Somebody posted a while ago the real wage growth over the last 20 years compared to real estate values. The math does not make sense – wages have been barely increasing with inflation. Now compare it to house prices 20 years ago – way more affordable back then. Today the wages are similar and people are getting mortgages for houses that have more than tripled in value. Interest rates were much higher back then too.

  26. Hey Martin, How do you explain the behaviour of journalists at Global TV? They go beyond “yellow journalism” of pumping sensational ads. Their enthusiasm for real estate is bizarre.

    Should journalists adopt the following simple rule: All reporters covering a news story on real estate should disclose if they own investment property in the region they’re covering. Not ownership of their principle residence, that is a private matter. Just disclosure of their investment holdings. If stock market reporters must do it, then so should news reporters.

    • Those calls, about story assignments, come from the very top. Reporters have no choice. Remember that a LOT of money spent on TV ads comes from developers. Don’t bite the hand that feeds you, especially when millions or tens of millions are at stake.

  27. The Poster Formerly Known As Anonymous

    People can lie to themselves and to others. Rents never lie.

    • Real Estate Tsunami

      Agree. When rents are higher than carrying costs, buy. Otherwise rent.
      It’s just that simple.

      • Robert Dudek

        So you would consider the “ownership premium” to be zero? Surely this will vary from person to person.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s