CTV Headline: ‘All hell is going to break loose in Vancouver’: Ex-trader’s real estate forecast

“A man who made millions as a short seller on Wall Street by betting against the odds has turned his sights from the U.S. economy to Vancouver real estate.
Former trader Marc Cohodes spent decades betting against housing “bubbles” before they burst. Now he has his eye, and his money, on the local housing market, and he has a warning to homeowners and first-time buyers.
“It’s going to blow to complete and utter smithereens,” Cohodes predicts.
“I think the market probably topped in the spring of ’16 and I think all hell is going to break loose in Vancouver in 2017.”
Cohodes is so confident in his prediction that he’s betting against one of Canada’s biggest alternative mortgage lenders, forecasting a housing crash similar to the one south of the border in 2008.
“I witnessed some of the U.S. housing fiasco here, and I said to myself, if I ever see it again, I should speak out louder than I did,” he told CTV’s Sarah MacDonald.
So this time he’s speaking out, and his predictions are drastic.
Cohodes, who is now retired from trading, predicts that all of Metro Vancouver’s multimillion-dollar homes will see their value plummet by as much as 50 to 80 per cent.”

CTV News, 30 Dec 2016

This happens regularly — Somebody from ‘the outside’, with knowledge of markets, takes a look at Vancouver RE and sees how much of a bubble it is… they rant about it for an article or two… then nothing proceeds to change. Robert Shiller called Vancouver the ‘bubbliest city’, what?.. 10 years ago? And we’ve regularly seen traders like Cohodes try to find ways to short our RE.
One of these days, one of these guys is going to get the timing right.
[Implied comment/joke about the challenges of timing markets intended].

RE matters aside, have a really good 2017, everybody. – vreaa

69 responses to “CTV Headline: ‘All hell is going to break loose in Vancouver’: Ex-trader’s real estate forecast

  1. Let’s not forget about the Russian oligarchs. What if 2017 is the year they discover Vancouver?? Buy now or be priced out forever.

  2. P.S. Happy new year, vreaa.

  3. So this guy is shorting the market and is predicting a market crash? Hmm.. no alterior motives at all… tell me again how is he any better than a realtor? At least he has skin in the game, I give him that much.

  4. Happy New Year vreaa. I wish you good health, happiness and prosperity. Thank you for running this blog, I know the comments section of any mature blog can be dispiriting, but you make a valued contribution to the dialogue. We live in interesting times.

  5. “Cohodes is so confident in his prediction that he’s betting against one of Canada’s biggest alternative mortgage lenders, forecasting a housing crash similar to the one south of the border in 2008…”

    “Cohodes, who is now retired from trading…”

    There’s retired and then there’s retired.

  6. The good part of the report was Davidoff. He could read the telephone book and it would sound good.

    It would have been interesting to ask him about the house he sold in N.V. Why he sold it; for how much; what is its value today. And the biggie – how does his wife feel about it. If your wife thinks you left a million bucks on the table, she’s not going to be very receptive – no matter how sexy your voice.

    Maybe the “reporter” should drag out Robert Shiller before he croaks. Even though he has talked bear talk, at least he has the intelligence to say he doesn’t know. He repeats it – that he really doesn’t know.

    Thank god she didn’t drag out No Listings Saretsky – a know-nothing real estate rodent brat who wants to be a pundit.

    And Cohodes … the chicken farmer … the “retired” trader. Where was he when Bernie Madoff perpetrated the biggest fraud in the history of the world? How can he pretend to be so knowledgeable about financial hanky panky. Did he bleat: Don’t buy, don’t buy, don’t buy when people were being duped by Bernie? No. He didn’t have a clue. Not a f…ing clue.

    The “reporter” should have drilled down with “Coho” and asked how much cash he was using to short exactly what. He sounds almost frantic with his entreaties to not buy. He is obviously trying to manipulate the market for personal gain.

  7. Housing price collapses are go for those who save and invest their money for the long term. You have to be patient and tactical, this is not a gambling casino where you try to get fast profits. When the market self destructs, that is when you swoop in like a vulture and pick off everyone else’s casualties for cheap. They you position yourself for the next rise. You need to build up money fat to last you through the lean times ahead.

  8. I remember Schiller’s comments in the Globe & Mail. It was 2005. “Vancouver is the bubbliest city in the world.” I had it bookmarked but the link doesn’t work anymore.

    Arnie C.: Why would Cohodes have anymore insight into the Madoff scam than anyone else? Am I missing something?

    Having said that, Cohodes does seem to be pitching a pretty dire scenario with abundant enthusiasm. That always makes me wonder if there is some self-serving interest at play. Does he really think that his comments will help crystallize a crash and make him money on his shorting of “one of Canada’s biggest alternative mortgage lenders”?

  9. Shiller was right. Vancouver WAS in a bubble when he made his remarks. So what if it’s gotten even bubblier since? He was still correct.

    Here’s a New Year’s proposal for certain of the posters here: make actual arguments. Character assassination is not an argument.

    • Inventory is very low. New listings for December were the lowest in 25 years. Price weakness comes from high inventory. How exactly do we get to that point in 2017? The path is very narrow, but far be it for me to call it impossible.

      When a guy is calling for an unprecedented crash, and the mechanics of how that could manifest itself are not addressed following this claim, there are concerns that the argument leaves several facts on the table. People are bound to talk about that and why that is, exactly.

      • “There are concerns”.

        Are there, really? A simple Google search reveals that Cohodes has outlined ample reasoning for his position, including rising prices, foreign money laundering, and subprime lending. Resorting immediately to character assassination, instead of gathering the most basic of information, is childish and lazy. Again, all one needs to do is a Google search. Five-year olds do Google searches.

        What’s really happening is cognitive dissonance in the face of a contrarian viewpoint. Rethinking one’s assumptions is hard. Dismissing the messenger is easy. It’s self-soothing. But, alas, it’s not an argument.

        Now, whether or not 2017 will bring a rise or a decline in prices is open to debate. Such is the nature of predictions. The future is unknown. That fact, however, is independent of the validity of one’s argument.

      • I don’t disagree with the thesis that in the medium term that housing could be under pressure. I am confused why he refuses to acknowledge how specifically 2017 is going to be a crash year when the mechanics of supply are still so stacked against a slow market in the short term. Further, given his comments about politicians, I expect he can take as well as he can give.

        His financial positions are at least partly disclosed and in my view relevant. While I do not know the specifics of the length of fuse on his bets, it is odd that he is so vehemently talking down the market for a 2017 blowup when it is equally if not more plausible that it will be several years before we see the price drops of magnitude equalling the US (which by the way peaked in 2005 and bottomed in 2012, hardly a flash crash event made out by the 2008 comparison).

        I’m calling it as I see it. I’m medium-term bearish. I am skeptical of the immediacy of the retribution that we all so want and that which Cohodes is forecasting.

  10. CTV news issued a correction – in italics at the bottom of an article today about home sales dropping – that composite prices in fact increased 17.8% over the same month last year, rather than decreased by that amount as previously reported. Their booboo of 35.6% wrong comes without word of apology for their incompetence. Shameful.

    • Here are some more fun stats, assuming they can be trusted at all:

      – Overall sales down 39.4% year-over-year
      – Detached sales down 52.4%
      – Detached prices down 6% from July, 12% annualized

      • Down 6% from July… such a crash indeed. Stunning really, cause we have never seen detached prices fall by 10% in the last decade….

      • The shift from denial to anger is starting. Later will come acceptance.

      • I think you are way past acceptance buddy. Being wrong for a decade sure has a lot of associated emotions. Care to share?

      • Sarcasm. Deflection. Lashing out at others. All key signs.

      • This is a blog comment section, if you need to talk to yourself about your personal feelings, a bathroom mirror is a great choice.

  11. brian's imposter

    You know, prices always goes up, never down. If sales goes down, prices can only go up. Simple math. Go back to school.

    • Wow… my first imposter… you know you are getting good when people want to be your imposter… impressive, I think I might have outdone myself on this one. Come on Arnie… I think you got to work harder to get one of these. First I got my personal troll now I got my personal imposter.. I am loving this. Thanks guys… I feel warm and fuzzy inside.

  12. Inventory is lower than low. It’s depressingly low. It would be nice to have even one new listing to look at. Instead it’s a soiled deck of deeds. In Renfrew/Collingwood, the preponderance of listings are parts of land assemblies – scruff that people picked up for 3-400K and are expecting to achieve 2.7-4.3M.
    Other listings have been sitting for months – some on a bog; some on brutal streets. It’s boring to even look at this crud.
    The notion of a 6% drop is misleading. The good stuff – not fabulous, just good, that people actually want, is often a million over assessed. A drop on these would make the bears grunt and howl, but it doesn’t reflect real loss of value – like a souk seller asking for quadruple what an item is worth and then coming down in price.
    3084 Grandview was listed a few months ago for 3.5M – then it was boosted to 4.3M. What should we make of that?

  13. 2273 Graveley appears to be a speculator getting bitten.
    Sold just last May for 1.6M – now offered for 1.568M. It’s a good location, but not great – there’s no view; it’s not near Skytrain; on a small lot; and the kitchens are poorly laid out. The previous buyer paid too much. Selling at this time of year, with an open house, is a sign of desperation. Odds are, with all the transaction costs, he’ll take a bath of a couple of hundred K. Some gotta win, some gotta lose …

  14. rod_jonsson_pmd

    prescience? … perhaps … or, how about just freely playing a lovely tune without being branded a subversive … ergo-strangely, go trump go … http://tinyurl.com/jgbcdo8

  15. 2977 29th E: sold 27/July/2016 for 1.348M. Just relisted for 2.5M as part of a land assembly. Ka-ching.

    • I paid $10 for a knick-knack. Just listed it on craigslist for $25. Ka-ching!!

      List price does not equal sale price, does not equal value.

  16. 88 East 46 Ave., in my neighbourhood, sold at or near the peak – I think it was April 2016. In December it was put up for sale again. The sign says it is an “exclusive listing” and I can’t find it on Realtylink. Any ideas how to look this up (aside from calling the realtor)?

  17. Can’t find anything. At 200K over list, they paid big – the #88 address probably got them cranked. A property like that would be hemorrhaging cash – no doubt just trying to get out from under the debt load. Flip fail.

  18. Why don’t the CTV news wankers send someone to interview Melissa Wu. She moves more real estate in a week than most real estate rodents do in a year; and she definitely knows more than a California chicken farmer.

    • It was actually an interesting read. But he misses the point completely and hence why I can see how he is disowned. First of all, no parents will go to war with a child over a house, the house ownership is only the symptom and not the core of the matter. What his parents doesn’t like isn’t that he doesn’t own a house but that he placed his own freedom above the togetherness, harmony and stability of the family. To the chinese, that is sacred above all.

      This guy says he is free because he can travel all over the world. I have one good question for him, if you have to travel all over the world to be free then sorry, you are not free. I have traveled to many places and have the resources to do the rest. Freedom isn’t traveling all over the world, it is that you can feel free without having to do it. Whenever my work wants to send me to all these places I turn it down. I have little desire to travel to London, or Paris, or Tokyo, or even LA or San Fran, though sometimes you really don’t have a choice. To me, I am free here in my own city with my family. In reality, the freedom I speak of actually doesn’t require home ownership but it does require keeping people who are most important to me happy. Who are they, well, that’s my wife, my kids, my parents, my extended family. Sorry, but this guy lost me when he said to move to a better rental friendly neighbourhood. He obviously does not have a child who have built relationships in their current environment. This doesn’t actually work. I am not going to remove my kids from their environment so that I can get a more favorable “rental ratio”. Like he said, money is just money, time is most precious. I agree, my children growing up in a stable family environment in their most precious childhood is far more important than anything else.

      Btw, one other thing, the whole you are financially free and have little liability part. Sure I have a small mortgage, but who cares, if something happens to me, there are several other full time working family members there to pick me up. What this guy doesn’t realize is that sometimes people decides rather than to go their own way, it is better to keep the extended family together and the strength in numbers frees everyone. In this model we all agreed to stay together and that sometimes sacrifices some career choices. This is great, there is so much support, honestly feel bad for people who have never felt it. My neighbour is indian and they have 2 brothers whose entire family lives in one house with their parents. That is like 6 adults and 4 children. Rarely do I hear fighting, I hear a lot of joy and laughter. People look at them and think they are nuts, but they seem to be happier than most people I know who tells me “oh I am going to prague.. or oh.. I have zero liabilities”. They probably have never seen the world, but they are far more free than this guy.

      Speaking of this stability, that point he made about how no one can kick me out is pretty darn important. In addition, if my wife wants a brand new kitchen, I don’t have to answer to anyone, the next day a phone call will be made to my contractor to do it. He says he is nobody’s bitch, well, try changing your bathroom to something you like on your rental apartment and see who is whose bitch. Btw, it is true that you don’t need this, but I would not risk the stability of an unhappy wife over the so called freedom to move all over the city.

      I was in Japan and Europe last year but honestly couldn’t wait to go home. For all the glitter, all the technology, all the culture, that’s honestly all pointless to me. When you have a stable base, this so called freedom is more or less just making sure my kids have exposure to the other cultures. When I was younger I wanted to travel the world, and when I started to do some of it I realized that while certainly the cities, culture and people were interesting, there was a certain shallowness to it. I am glad to have freed myself from this need to travel to feel free.

      One more interesting point… I didn’t dig into who this guy is. But he accumulated a million dollars… kudos btw. But to do that, you usually are probably in your early thirties or maybe if he is a genius and hit google when it was at 70 bucks then late 20’s. I am not sure to his marriage situation either, but if you are over the age of 30 and not married usually that will cause a ton of friction with asian parents… I can see that being a much better reason of why he is “disowned” than the lack of house. His style definitely would rub a traditional asian parent the wrong way, and I am sure this attitude professes itself on many other issues than simply housing.

      • What kind of sh*te culture disowns its own children for not buying a house?

      • Financial samurai – a clever handle – he got pretty excited when he branded himself with that. It’s not Rich Dad, Poor Dad, but it’s pretty catchy; in the vein of the Wealthy Barber and a slop bucket full of others who have monetized information that is freely available.

        Why do people say they’re retired when obviously they’re not? Because it disarms the gullible.

        He got his MBA and is hell-bent on making money. He sees the YouTube clowns cashing in and wants a piece. No doubt there will be a book. Ho-hum.

        His silly blog has a section on relationships – highly unlikely that he has one. Maybe he should have one on owning a cat; or a guppy.

        And this notion of travel as this great experience … the etymology of the word is from the French travail – work – toil. That it’s so great is nonsensical fantasy promulgated by the travel industry and tourist boards.

      • At least Brian puts some degree of thought into his posts.

        Arnie, on the other hand, offers zero substance. Incapable of formulating an argument. The bitterness of a failed adult, and the rhetorical skills of a 1st grader.

    • [Bloomberg] – Vancouver Renters Help Million-Dollar Homeowners With Their Taxes

      …”In Canada’s priciest real estate market, the provincial government is pitching in to pay the property taxes of million-dollar Vancouver homeowners and offering loans to first-time buyers for down payments.

      Too bad for renters, who are among the taxpayers footing a C$1.5 billion ($1.2 billion) bill at least in the next few years.

      “This is a remarkably lousy policy,” said Thomas Davidoff, head of the University of British Columbia’s Centre for Urban Economics and Real Estate. “You’re going to take money from people who don’t own homes and give it to people who own homes. That seems to be a step exactly in the wrong direction if the dominant issue is affordability.”…

      https://www.bloomberg.com/news/articles/2017-01-11/vancouver-renters-aid-million-dollar-homeowners-with-their-taxes

      • “Too bad for renters, who are among the taxpayers footing a C$1.5 billion ($1.2 billion) bill at least in the next few years.”

        Correction: it’s all BC taxpayers, not just renters. The grant comes directly from the provincial government treasury.

    • Everything is awesome when you own a house…everything is awesome when you are part of the ownership culture….everything is awesome!

    • rod_jonsson_pmd

      had no idea pressers could be so entertaining … life is good … it’s like someone designed a malware to infect elitist snobs and make them all self destruct

    • [WSJ] – Celine Dion Relists ‘Bahamian-inspired’ Florida Estate For $38.5 Million: The house, which has lots of fun indoor and outdoor amenities, is now being offered for nearly half of its original price

      …”Celine Dion has relisted her resort-like, waterfront home in Jupiter Island, Florida, with a 47% price cut from what she asked for the property four years ago.

      The French-Canadian pop star last listed the aquatic property—replete with a several large pools, a separate lazy river and waterslides—in 2016 for $45 million. She is now selling the fully furnished home for $38.5 million, agents from Sotheby’s International Realty Quebec and Sotheby’s International Realty Palm Beach said in a statement on Friday.”…

      http://www.mansionglobal.com/articles/51252-celine-dion-relists-bahamian-inspired-florida-estate-for-38-5-million

    • [G&M] – CRA investigating B.C. businesses that attracted Asian investors

      …”The Canada Revenue Agency is trying to recoup millions in allegedly unpaid taxes from B.C. businessmen who helped Chinese and other Asian investors enter Canadian capital markets, according to a court document obtained by The Globe and Mail.

      Dozens of officials from the CRA, the RCMP and the Vancouver Police Service raided six locations last August in connection with the activities of Vancouver businessman Kin Foon Tai. The CRA document that was used to obtain the search warrants alleged that Mr. Tai (known as Joe Tai) and his business associates used firms in the Caribbean and Hong Kong to shield $7.6-million in income over a nine-year period.

      The $7.6-million figure was described in the court document as “conservative” and is based on an initial audit that identified up to $17-million in unreported income. None of the allegations in the document have been proven in court, no charges have been laid and the investigation is ongoing. The CRA is the lead agency on the file, while the RCMP and the Vancouver Police provided assistance during the raids.

      The CRA allegations show the complexity of the kind of methods it believes are being used to transfer and hide millions of dollars around the world. The issue is of particular concern in a province such as British Columbia, where foreign investment in real estate came under increasing scrutiny as the housing market exploded over the past two years.

      The court document also shows the scope of the auditing and investigative resources the CRA needs to conduct its growing crackdown on tax evasion. The federal tax-collection agency received help in this case from the Internal Revenue Service in the United States, and a massive leak of confidential information in 2013 compiled by the International Consortium of Investigative Journalists (ICIJ).”…

      http://www.theglobeandmail.com/news/politics/cra-investigating-bc-businesses-that-attracted-asian-investors/article33625601/

  19. I’ll believe it when I see it!

  20. This week’s Eastside REW has a grand total of three detatched houses for sale. The centrefold is mostly listings out of Richmond. The publication must have given the Richmond rodents a next to free deal to fill up space. There’s even one sad quarter page that has eight silly smiley mugs surrounding one solitary house for sale in Maple Ridge. Buffoonery.

  21. There are people worth listening to: Michael Geller, Tom Davidoff (just for his sexy voice), Ozzie Jurock – even though they make mistakes. Why waste time with an anonymous wanker trying to make money from advertisers on his blah blog, or is one of those pestilential “financial planners” whose goal is to hook suckers and sell life insurance.

  22. Ninja is a toxic ninny.

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