Sunday, December 31, 2006
I'm elbow deep in electric eels, so no year-end wind up/down. I'll just leave you with some memorable images from 2006.
Best to all in 2007.
*I have disabled anonymous comments by popular demand. There were a few reasonable comments by the un-named (some people just want to be so), but the muck-rakers (there weren't that many), use it to stir the pot. I may re-institute them in the future.
Friday, December 29, 2006
I'm too busy to post anything meaningful (not that I ever post anything meaningful...), so I am inviting random comments and ideas.
Please remain civil, and refrain from flames. Thanks.
Perhaps I am not so much busy, as just a lazy dog...
I will be posting a 2006 round-up, and a 2007 outlook - hopefully by Sunday.
Thanks to you all for visiting, reading, and posting.
Thursday, December 28, 2006
This from the Glob and Muck - who have at least recognized that the market is no longer rising. The context is an article entitled Warm weather to warp jobs data.
However, Canada's jobs market will also benefit from a still-solid housing market, compared with a U.S. situation that is in crumbling quickly. "Our housing market may be plateauing but in contrast to the U.S. - where things are in freefall - Canada still looks good," Mr. Lovely said. link
They also say that the US Economists at Goldman Sachs said the unusually temperate weather during the survey week for December — the 9th to the 16th — will boost the month's U.S. seasonally adjusted construction employment by about 17,000. Are they still building like there is no tomorrow in a "crumbling market"?
How long, if ever until the Vancouver market goes into free-fall? Is it possible that Olympic construction will keep demand for housing up, and with it prices? Will we just plateau until 2011, and then correct?
In another article in the G&M, it was said that the combined population of BC and Alberta now surpasses that of Quebec.
But the boom has brought tremendous stress to the West.So there are practical limits to growth - the biggest being housing, and workers, and housing - in a perverse circle. Another aspect is livability - which there are already complaints about.
Alberta has been hit the hardest by the growing pains. Thousands of homeless people are on the street in Calgary, a city whose population surpassed one million in 2006 and whose traffic is continually snarled. A major shortage of workers is hurting service and slowing multibillion-dollar energy projects.
At this point, the West needs a recession, and the East needs action. Where will it go?
This last little blurb from camagazine caught my eye too -
a rise in the real estate market is estimated to have four times more impact on consumption than a corresponding market hike. More specifically, economists maintain that each market dollar gained sparks a 5.8¢ increase in consumer spending, while each dollar of additional real estate wealth results in a 20¢ increase.I believe that this Spendmas saw a fair bit less spending, so where is all the wealth? I guess those mortgage payments are starting to take a bite out of spending.
I wish for two things right now;
1) VHB's analysis,
2) the spring market to commence.
I haven't got a clue what the heck is going on. My head is spinning.
Tuesday, December 26, 2006
I read an interesting article over at The Tyee (originally published 1/11/06) about three couples who bought a property together.
They speak of the legal agreements arrived at regarding joint ownership, and the financing with "so many names on the title". It turns out that VanCity was the only one who would finance them.
The property is three rowhouses on two city lots, and each couple has their own "townhouse". Their idea seems to be more about community than affordability, but it is an interesting vision towards where this town might go. It seems to me to be an interesting way towards densification, although these are pre-existing homes.
Here is the closing paragraph. It is an interesting read - if you want to check it out for yourself, click the link above.
I highly recommend the leap of faith necessary to create this type of arrangement. To create a more caring and healthy society, I think we need to make this leap more often in our communities. We are not hippies, but we crave a place where neighbours know each other well and aren't afraid to lean on each other. We all need both privacy and community, and with so few places in the city where the two coexist so brilliantly, we have created an ideal place to live, to grow and thrive, to watch the seasons come and go, to witness our children grow together.
I have heard and seen a lot of talk recently of how Vancouver has changed so much for the worse, and that, coupled with the staggering costs of living here, is compelling people to, at least think of, other environs. I was at a dinner last night where all present voiced that opinion. One is selling her house and looking elsewhere.
I came upon the article below, and a few lines really jumped out at me. I have bolded the type on those. The one that rang a bell the loudest for me was - They're considering to move here, because their lifestyle has changed so much they don't recognize themselves
Maritimers in Alberta seek jobs back home
(CBC) - An advertising message suggesting homesick Maritimers in Alberta return home has resulted in thousands of inquiries about East Coast jobs.
The message has also attracted the attention of some Albertans who have never been to the Maritimes, something Nadeau didn't expect.
"They're considering to move here, because their lifestyle has changed so much they don't recognize themselves," he said.
The Nova Scotia government is hoping to capitalize on that.
Faced with a shortage of skilled workers and a tightening labour pool, the government has launched a marketing campaign targeting Nova Scotians living in Calgary.
The campaign includes newspaper ads and billboards with slogans like "Buy a home or two" and "Calgary is a nice place to visit."
(exerpted from here)
I expect that they may start advertising here next.
A piece in last night's news talked of how Saskatoon is also advertising for people to come back from Alberta, and some are. One couple sold their place in Calgary and returned. They managed to pay off all of their student and car loans, and have a new house in Saskatoon with no mortgage. They like their life much better now.
Sunday, December 24, 2006
Friday, December 22, 2006
I've been thinking of the different economies in Canada, and the universality of interest rates. RBC Economics has a report on the economies that reveals a polytomous disparity in those economies, yet one will be afforded the relatively identical interest rate whether in Calgary, Toronto, or Corner Brook, NFLD. The Bank of Canada sets the benchmark, and the chartered banks and credit unions tack on their percentage.
As the larger economy(s) of Ontario (and Quebec) contracts, the BoC hints at cutting rates, but as they do so, they stand to further stimulate the hot economies of Alberta and BC. Being that the BC economy is largely driven by construction (as of late), will this stimulate more building (and buying)? Will this drive RE prices up further in BC?, or has the limit been reached (read - surpassed)?
But the BC economy seems to be feeding on itself. As lumber, oil and gas, and metals (copper) see less demand, how can that idea be supported? An economy built on construction (no pun intended). What could possibly sustain it - other than construction itself? Greater and bigger fools?
I think that things have become so surreal, that we cannot even guess at what will transpire. It seems to me that as the central government tries to maintain equilibrium, it creates a greater imbalance. Order out of chaos, and order begets chaos.
So what is the answer? Regional interest rates? How could that be engineered? Maintained? Sublimation of the nation into distinct regional societies?
There is a growing trend away from globalization/conglomeration, micro-credit is filling the void left by larger institutions, large corporations are being riven by anti-trust type rulings, citizens are turning inward, and reclaiming community, federal gov't off-loads responsibilities to provincial gov'ts, which in turn, off-load responsibilities to municipal gov'ts, which in turn, off-load to the denizens of the cities.
For those familiar with the Peter Principle (The implication of the Peter Principle for an organization as a whole is that the organization is prone to collapse when the number of incompetents among its ranks reaches a critical mass, resulting in the inability of the organization to perform its functions.), it would seem that we, as a society, have reached a critical mass.
The only conclusion that I can reach is that "the system" is primed for collapse.
Thursday, December 21, 2006
Here we are at the shortest, darkest day of the year. It's a sleepy time, and it seems as if the housing market, and the economy at-large, is sleeping. Is this the end of the bull cycle? The markets are giving up some of their gains, and we are seeing price reductions in the Vancouver RE market (although that is somewhat difficult to quantify at this point).
The Central Canadian economy is in a slump, while the western economy (particularly Alberta) remains fairly strong, though oil and gas exploration is going down, and oil production is down. There is talk of the BoC cutting interest rates (presumably to stimulate Central Canada), and that is something that I have been pondering, and will address in another post.
Economy stagnated in October; sluggish manufacturing offset energy growthThe thing is, auto manufacturing and steel production are the biggest drivers of the Ontario economy, and oil is really only an issue in Alberta and NE British Columbia. As other economies head into possible recession, we will likely see less demand for oil, which will stifle the oil driven economies of Western Canada. Like any well-built house of cards, once it starts falling, it won't stop until it is completely collapsed.
OTTAWA (CP) - Statistics Canada says economic growth was basically stagnant in October...
The agency says manufacturing and the service sector stood still, although energy and utilities showed good growth.
The energy sector grew by 0.9 per cent in October, led by production and distribution of natural gas, a rebound in electricity and a jump in refinery output.
Oil production and oil and gas exploration declined.
Manufacturing was down for the ninth time this year, ... as auto and steel makers cut production.
Of the 21 major manufacturing groups, 12 showed decreases. link
And in the US;
Housing slump weighs on U.S. economic activity, no change expected.
The U.S. economy felt the strain of the housing bust and lost momentum in the late summer, with more sluggish performances expected in the months ahead.Would that be the housing bust that was not going to happen? Does the prognostication that the economy will not slide into recession carry the same weight of the one that the housing market would not crash? That the slumping US economy would not have any effect on the Canadian economy - because we are so well insulated?
...most analysts do not expect the troubled housing market will undermine the economy to the point it slides into a recession.
The housing slump will bite into overall growth, but not too badly, some economists hope. Housing will continue to "contract during 2007 but at nowhere near the hemorrhage of the third quarter,"Interesting choice of words - hemorrhage - where there was so much talk of there being no chance of any reversal of fortune. And hope springs eternal - for some...
The Fed predicts core inflation - while still too high for its tastes - will fall in the months ahead as economic growth remains subdued.
Against that backdrop,the central bank has felt comfortable holding interest rates
steady, which it has done since August.The Fed's goal is to slow the economy
enough to thwart inflation, but not so much as to cripple economic
But with manufacturing declining, the trade deficit with China, et al, it seems that the US economy has been just as much propped up by housing as the Vancouver economy. Retail sales are reportedly lack-lustre, which indicates less discretionary spending as people struggle to make their mortgage payments.
I think that we are really going to have to wait for spring/summer to see how this shakes itself out, but I strongly feel that the party is over, and all that we have to look forward to is the hang-over (for the exuberant), and some much more affordable RE for the patient.
Tuesday, December 19, 2006
Wow! What a difference a few days makes. That wind storm/hurricane that passed through on Friday has ripped the jewel of Stanley Park from Vancouver's crown.
Thousands of trees were blown down, ripped asunder, etc. I saw news reports in which people were in tears. The Parks Board does not have the money to carry out a clean-up, and there has been talk of logging companies being offered the wood for free if they come in and help with the clean-up.
It is ironic that I did a post a few weeks ago in which I suggested that Stanley Park be logged and developed to alleviate Vancouver's "land shortage", and not long after, in what seems a strange prescience, that is happening - right down to the logging crews, and talk on the radio (CBC today), of using the lumber to "help with the housing crisis"...
The area that boasts the train and concession stands was dense forest until 1962, when another fierce storm cleared that area. I had nothing to do with what has happened since. Honest! But perhaps my tongue-in-cheek idea is not so far-fetched now. It will be a good hundred years before Stanley Park resembles what it did until just last week.
The Parks Board is talking of community tree planting bees to "replace" what has been lost. The park is closed, and the public has been asked to stay away while the clean-up is carried out. I have heard mention of a year being necessary to do so.
It is known that many homeless people live in the park, and not all have been accounted for. It is possible that some lie beneath the wreckage, though that has not been confirmed.
Stanley Park is the heart of Vancouver - much as Central Park is to NYC (though Stanley Park was much more magnificent). Both parks have about 8 million visitors a year, with Stanley Park being slightly larger in area. Both are world-famous tourist attractions. Stanley Park will not attract so many now, I don't think.
What fierce wind will blow through the Vancouver real estate market and cause it to crash like so many trees did last Friday?
Images from various sources - Flickr, CBC, CTV. I have not had the chance to get down there and get my own photo's, and have not found too many on the 'net.
The latest word from the Parks Board, and the police, is that there are about 20 people known to be living in Stanley Park, and all have been accounted for.
Apparently, 9 of every 10 trees in the park were blown down (in the hardest hit parts. No word on what percentage of the park that is), or otherwise destroyed. It's a crying shame. The footage that I have seen reveals extraordinary damage. Entire sections of pavement along the seawall ripped up and blown away, landslides, etc.
Saturday, December 16, 2006
I am posting some clippings from The Republic of East Vancouver newspaper that reflect some of my feelings about the Olympics, the changes foisted upon this city by corporate kleptocrats, self-serving politicians, etc. There are some strong statements, but if one doesn't shout, who will hear?
These writings (albeit some of which are a bit out of context, and edited to my own purposes) reflect how we came to where we are. This insanity did start shortly after the announcement of Vancouver's 2010 bid being accepted. I foresaw where that would take us, but no one seemed to care. I am not entirely sure if the Olympics are 100% causative though, because there is a global RE boom, it's just that things have really gone off the rails here.
We live in a nation dominated by salesmanship (commercial, political, religious). The salesman's credo is: a facile mendacity trumps a stubborn truth, because an honest mode of being would cause the buyer to become wary of the giddy lie of the pitch.
We've become ... a land of suckers and criminals with a cultural landscape peopled by corporate scam artists
All human beings have a talent for denial, but we ... have turned denial into genius. There is no need to burn books if the public is ignorant of their existence. link
From another article in the same publication;
Like America’s commander in chief, BC’s elected premiere is a privileged, nepotistic, drunk-driving, beady-eyed corporate crony. But the similarities don’t end there. Though it is beyond Gordo’s purview to wage war on foreign nations (that’s Harper’s job), the Work Less Party’s brave new documentary, Five Ring Circus, exposes the myriad ways that our government is using the 2010 Olympics to wreak havoc on BC itself.
The movie centers around the well-publicized mandate to make this the greenest, most sustainable Olympics yet. With pinpoint precision, the film goes through the specific promises, one by one, and reveals our government’s vicious mendacity in filling the pockets of real estate, construction, and hospitality interests under the absurd guise of showcasing Vancouver to the world. But the movie makes it clear that the insidious logic of this operation is that we have to ruin North America’s most livable city in order for it to have its dubious day in the sun.
Who would have guessed that the construction firms that lit up their cranes with YES 2010 signs didn’t have our best interests in mind? The ugly truth is that the construction and real estate tycoons care about Vancouverites about as much as Boeing and Halliburton care about the troops and taxpayers.
There’s another dimension to the hideous Yaletownification of Vancouver that the film astutely addresses. As Vancouver’s affordable housing is converted into condos and the cost of living in this already expensive city continues to rise, a gulf is opening up between the haves and the have-nots. And this is having all kinds of hitherto unthought of repercussions on Vancouver’s vitality. link
I have been wanting to rant about the Olympics for quite a while, but I become apoplectic when doings so, and I don't think you are interested in hysteria. Just slightly less than 50% of Vancouverites voted against the Olympics, and interestingly, the divide was between the West Side, and the East Side.
We have had a $2.5 billions boondoggle shoved up our arses in the RAV line, when an at-grade LRT on existing rights-of-way would have cost as little as 1/10 of the RAV. Whose pockets are getting fat on this huge disruption of hundreds of businesses, and traffic nightmares while we meekly bask in our "good fortune"?
Friday, December 15, 2006
uncertain buyer has joined the blogosphere. The link is in the sidebar to the right (bc housing blog). Go on over, and check it out.
uncertain has sold, and is now trying to decide to get back in, or wait.
Welcome uncertain buyer! (and congrats on the sale)
Well, not much seems to happening here. There is a change in the wind, but the market seems to be asleep. No one has a clue as to what will happen, but it seems as if things are finally turning around. There have been some remarkable price reductions, but the prices have been so remarkable, that's not saying a lot.
It's hard to make sense of what's happening by looking at Rob Chipman's numbers (for me, anyhow), but Rob is starting to sound a bit bearish (no slight intended Rob). A few choice quotes from his blog - "half full/half empty? These days I'm tending to think half empty", and, "I don't see increased strength in sales in the New Year." and, "I see the current market as ominous (certainly not as in "worse than 1981", but still, ominous)". Rob is accused by some as being biased, and even dishonest, but I don't agree with those assertions. I think that Rob has been pretty objective, and is still thus.
Set your alarm clocks for the spring, and the bulls/flippers/speculators ought to be prepared to be very alarmed - in my humble opinion. A rude awakening is in the offing.
Thursday, December 14, 2006
Wednesday, December 13, 2006
This is the first version of the grab bag. It's a cheap post today - I have to go and deal with my geriatric dog. Today is her last day on earth.
I came across an old copy of The Province from October 4, 2000 that I must have saved for packing dishes or something.
Pierre Trudeau had just died.
9.11 was almost a year into the future.
The weather was 19 degrees C., and sunny.
Lots of hype in the paper about technology and tech. stocks.
The TSE was trading at 10,456.
Dow Jones was at 10,719.
Nasdaq was at 3,455.
Nortel was up$ 0.95 @ $94.05 (and man, were they pumping Nortel as a new paradigm...).
The U.S. $ was at $1.52.
There were not a lot of houses for sale in the classified section. In East Vancouver @ 37th and Nanaimo, you could get a 3 level character view home with 3 bedrooms and two baths for $245k.
Downtown rentals were pretty "reasonable" too -
And that is the grab bag for December 13th, 2006. What a difference 6 years makes on the Wet Coast.
Tuesday, December 12, 2006
There seems to be a growing sentiment that Vancouver is just not worth living in anymore.
I wrote here last week about the exodus of head offices from Vancouver. In metropolitan Vancouver, head-office employment also declined by 29 per cent 1999-2005. There have been a great number of condo conversions, and those office buildings are gone. The City has put a moratorium on conversions, but is it too little, too late?
condos have recently soared in both prominence and price as eager buyers line up for what are often tiny dwellings bearing enormous pricetags.
...(Mayor Sam)Sullivan said. "But eventually you realize, 'My God, we have very little industrial land left'."link
It's not just head offices that are leaving (or thinking of leaving) Vancouver either. Foo (too) recently left Vancouver for Halifax, citing his #2 Reason to leave Vancouver as the ridiculous RE scene here. His #1 reason was to accept a good job offer - something that pays above the training wage (hard to find here?).
Sentiments are changing. Check out this link at the Discover Vancouver Forum. This blog is not the only place to see ridiculousness. A sample post -
450 square foot character condo in boutique building, only moments from amenities, including community centre. Parking can be rented from some guy on the corner in a fedora. Kitchen recently remodelled to include a sink, fridge, and a stove! Laundry just up the street by Mr. Kwan. Included in strata fees is doorman. Get in on the market while you still can! Reduced to only $315,000.
A couple of sample comments from my post of yesterday;
My wife and I bring in about $150k per year. We refuse to live in a Vancouver Special in East Van with people shooting up out front. If we move back east we can both get jobs that pay the same or more while actually being able to afford a home. We are going to give it until the spring and then start to look elsewhere. We know three other mid 30's couples with young children in the same situation. If housing continues to move up I suspect you will start to see an exodus of the people that should be driving the economy (not to mention a doctor shortage).
12/12/2006 8:29 AM
Ditto here, Michael. I am 35 my partner is 33, and we have two kids aged 9 and 7. My partner is doing graduate work, and I alone make 130k/year. We have no intention of staying once she has completed. It is just not sensible. And amongst our friends, the majority feel the same way.
12/12/2006 8:47 AM
Interesting to see the comments about leaving vancouver. I'm in a similar situation and unless something major changes will probably be out of this city within the year.
Granted that this is a tiny representation of Vancouverites, but I did not see anything like this a year ago. VHB was pretty much the only contrarian blog on Van. RE. It's all over the place now.
When we zoom out to take a look at the big picture, something is happening. I don't know how gleeful we should be as we watch the best place on Earth implode around us.
The fire sales will commence in the spring. Gird your loins.
Monday, December 11, 2006
So VHB is on holiday, and the pope, Rob Chipman and I are trying to fill his shoes. That's some big shoes to fill. VHB does a lot of research, and his reasoning tends to be sound. Commentators at his blog flesh out the arguments posited, and we are all enlightened - no matter whether bullish or bearish. This blog has benefited from VHB's readership since he so kindly directed you here during his hiatus.
I am just having fun. I like writing. I like playing with photoshop. My views are based on my own common sense, and passing knowledge of history and human psychology. Statistics and facts are just static in my slushy mind, so this is merely entertainment.
I got an e-mail from someone at the Financial Post this AM requesting an interview on my "thoughts on the outlook for future prices." While I am flattered by this request, I do not know that I am qualified to elaborate in such a way. I will contact the journalist (I am a courteous person), but I thought that I would give you all a chance to put forward your own views.
So, in honour of VHB's regular "ask VHB", I am asking you to "tell solipsist". I will take what you say, and my own thoughts to the journalist.
What are your thoughts on the outlook for future prices? What is your rationale? This may be redundant, but that's what this blog is - redundant prolix.
Sunday, December 10, 2006
I believe that it is all over, but for the tears.
I know we have the mountains. I know we have great weather (sometimes, anyhow). I know the Olympics are coming (are you as fatigued by the refrain as I am?).
It is different this time, of that there is little doubt. Never before has Vancouver seen such a dramatic increase in housing prices, in so short a time.
Never before has BC had such a negative savings rate (not in my lifetime anyhow).
Never before has the affordibility in Vancouver been so low.
Never before have there been so many amateur investors to drive up prices with such dreams of plump sugar plums dancing in their heads.
I am going by my gut here, but I do not think that we have ever seen price declines through the summer and fall - followed by continued increases in the spring, and I don't think that it will happen this time. Of course, I may be wrong - I thought that last spring would see a return to the trusty fundamentals, and I was wrong. We all were. Not this time though.
RET has dwindled to a couple of posts a week. Gone are the hard-headed bulls, and the bears are so breathlessly awaiting the reverse trend, that they have no breath to speak any more.
The farmer has locked the bulls in the barn for the winter, and the bears are sniffing about at the silage left behind, hoping for some food soon. It's coming.
I'm going to go out on a limb, and predict 25% declines in prices by this time next year, but it won't be over until we see 40% - 50% declines. Cocky, ain't I?
Saturday, December 09, 2006
I posted about this house back on October 30th here.
I first looked at this place V613952 (and walked away in disgust) back in summer '05. It was listed at $349k. I saw it re-listed fall '06 for $449k. Now it is $429k.
It was ludicrously priced last year, as this place is a POS. The blurb claims renovations, but I am dubious about the quality of those. Likely just some paint over mould. Maybe they took the garbage to the dump, and cleaned the leaking toilet.
They may actually sell this place some day for $200k. I'll be following it down as one of the poster children for the crap that people are trying to get rich from.
Friday, December 08, 2006
Have a good holiday VHB. I hope you are going somewhere like this -
If there was any discussion started at VHB that you feel is worth continuing, feel free to do it here.
Just no flames please. I have yet to delete a comment, and I don't want to start.
I stay up late at night thinking about things. I like that time because the world is asleep, and there is little distraction. I love the 3 o'clock wow.
Last night I was pondering on the meaning of life amongst other things, and I had one such epiphany. I thought of how several scenes from Monty Python's The Meaning of Life could be descriptive of the completely irrational RE market.
A few of my favourite scenes come to mind;
For the argument that the population will increase as dramatically as has been stated by some, I get the image of the Irish family, wherein the wife is washing the dishes with dozens of her children to the rafters, and there is a plop, a baby's cry, and another baby -
Then, Dad has bad news for the family -
Wait! I've got something to tell the whole family.
The mill's closed! There's no more work. We're destitute.
Come in, my little loves. I've got no option but to sell you all for scientific experiments.
That's the kind of out of control breeding we will need to fill those DT condo's. And when the lay-offs start... Dad's solution is even better than mk-kids' idea of putting the young'uns out to work in retail.
And then there is Mr. Creosote. Gorged, and bloated and obese, with an insatiable appetite. He could be analgous to the marketers, and developers, and flippers. We know what happened to him when he ill-advisedly ate the wafer-thin mint after consuming all else in sight. He exploded - leaving a very large mess. Innocent by-standers were covered in the fall-out.
And poor Gaston - the garcon. He knows the meaning of life, and wants to show what it is. He leads us through the streets, across hill and dale, until we arrive at the house where he was born. But the concept of a simple house, and a simple life are not what the maitre d' has in mind, and he mocks Gaston (an analogue to those who bought Intellectual Properties at the "W" and sneer at the bitter renters?).
As for me, huh, if you want to know what I think, [sniff] I'll show you something. Come with me.
Nearly there, now. You see that? That's where I was born.
You know, one day, my-- my mother, she put me on her knee and she said to me, 'Gaston, my son, the world is a beautiful place. You must go into it and... love everyone, try to make everyone happy, and bring peace and contentment everywhere you go,' and so, I became a waiter. Well, it's-- it's not much of a philosophy, I know,... but, well,... fuck you. I can live my own life in my own way if I want to. Fuck off.
To those who made it all the way down here, thanks for sticking with me. This movie is one of my all-time favourites. If you haven't seen it, it's a great laugh.
all images and script exerpts from the link up top.
Thursday, December 07, 2006
Forget about Vancouver. Forget about Paris, London, Tokyo, Wichita. The next hot land rush will be on the moon. And I mean hot! Once you get beyond the Earth's magnetic shield, cosmic radiation becomes a bit of an issue. Retiring boomers from Chernobyl, or Three Mile Island are expected to be the first ones lining up to buy their plots.
NASA has announced that it wants to set up a permanent, self-sufficient outpost on the moon by 2024. There is a fair bit to exploit on the moon, so there will be very low unemployment. Lot's of minerals, and such, and huge supplies of Helium 3. Helium 3 can be used as a fuel in nuclear fusion - as opposed to fission, which produces nasty radioactive waste. Fusion results in no such waste. I have read that one shuttle load of the gas could provide all of Earthlings' energy needs for a few years.
There is lots of sunlight at the South Pole too, which can provide solar power to run things, and makes for a great growing season. Inflation will be a thing of the past in the vacuum of space, though you will live in an inflatable condo.
Beam-me-up Moonray has first option on marketing moon condos on the shore of the Sea of Tranquility. The first development might have a name such as Tranquil Towers, or Maison on the Mons. Maybe The Manse at Mons Ampère - a high energy complex for swinging Septuagenarians. The bold will move there from Crater City. Retiring boomers will get into bidding wars over the available abodes.
Weather is guaranteed to be sunny, views of the Earth are spectacular, and they are just not making any more moons.
Wednesday, December 06, 2006
Ow. It is beginning to hurt here.
This is another article exerpted from the December 2006 issue of BC Business. More indication of a gutted city?
Could B.C.’s economy overheat?
Have you noticed the signs in windows lately? “Help wanted.” “Now hiring.” They are everywhere. And just a few years ago, there were no jobs...even highly qualified university grads were having to line up for jobs driving cabs or flipping burgers. In 2001, the government introduced the six-dollar-an-hour training wage, much to the horror of the labour movement. It was a move intended to encourage companies to hire students...but today the tables have turned. It’s employers who are desperate for workers, and not many can attract them by paying a measly six bucks an hour. In fact, the government is now contemplating dropping the training wage because it has become irrelevant. Who’d have thought an economy could be too hot? When you have an unemployment rate of about five per cent, it means nearly everyone who wants to work, or can work, is working.
Problem is, they are working for peanuts. Can housing costs hit the stratosphere without all else following? This carousel is broken. Note - I earlier made a comment about housing and fuel not being calculated in the CPI. That was erroneous. Thanks to VHB for pointing that out to me.
Come to Vancouver and buy a sickeningly over-priced home, just don't expect to be able to get a pizza, or a burger, or a coffee, because there is no one to serve you. The only solution that businesses have is to crank up prices - which will put them out of business.
People have been thrilled by their paper gains on RE, but that vision is myopic. People cannot afford to run businesses here, so what will our city become? A hollow shell, me thinks. A bunch of RE perched on the edge of the Pacific.
Nat Bastone, president of Nat’s New York Pizzeria, fears he’s going to lose his business because he can’t find staff. He hasn’t received a single application for a much-advertised job. Positions that used to be filled by word of mouth are getting no response. Nat’s hasn’t been a struggling business, anything but: his sales have increased every year since 1992. But his shop is in Kitsilano, and that’s expensive real estate. Young people can’t afford to live there, at least not on service-industry wages.
So what is so great about this booming economy? Young people are the back-bone, and the future of our society. I see a ghost town in the cards if something doesn't give. freako speaks of zero-sum games, but this is looking an awful lot like a negative-sum gain.
B.C. Federation of Labour president Jim Sinclair wants the minimum wage raised by two bucks. But are you willing to pay a lot more for pizza? I’m sure Tim Hortons could raise the wage it pays, and so could Starbucks or Blenz, but how much more do you want to pay for your latte or sandwich? The owners of the pizza shop work 14-hour days, six days a week and are worried sick that they can’t make it work. What are the answers? Higher minimum wages and the higher prices that come with them? Encouraging seniors to come back to work to help fill labour shortages?
Well, if a crack-shack on the East side is worth a half-million dollars, surely we can pony up ten bucks for a coffee. We can just crank up the rent on the basement suite to cover that. Then, they'll need to raise those wages even more, and a cuppa joe will be fifteen bucks. Hell, if the housing prices can increase ad infinitum, why not everything else? Growth is good - right?
I don’t know how many seniors feel like flipping burgers, but perhaps some might be bored or in need of some extra money to top up their pensions. We might have to encourage more unskilled immigration, too, but those immigrants are still going to face the challenge of living in Canada’s most expensive city.
Seniors will flock to Vancouver to fill those jobs, and to buy up Shaughnessy while they are at it. Bring the grandkids. They can only make so much working in the cheaper cities of Toronto, Montreal, etc. I'm sure that they will be pulled here by our higher wages. If that doesn't work, we can pull in unskilled immigrants. They will be glad to come here to McJobs. Hindus might have a bit of an issue with flipping burgers though.
I spoke with the premier recently, who told me one of his concerns is that we will have a million new jobs coming down the road in the next decade, but lack the population to fill them.
A million new jobs? Is the premier smoking Basi's weed? Or is he still drunk from one of his Hawaiian vacations? A million jobs on the way? I'm speechless at that mendacity. Mind you, I haven't been drinking the water.
The front end of the baby boom is now hitting 60, and as those people move through the next five years, most will be planning to retire. Already, we have a shortage of doctors, and nurses. That’s going to get worse over the next decade right when most of us will start needing far more medical care than we’ve ever needed before. University professors will be retiring in record numbers. Police and firefighters are aging and the next generation just doesn’t have the numbers necessary to replace them. Have you looked at the lineup of motorcycles on a B.C. ferry lately? Even the bikers have grey hair, if they have any left. It looks like even the Hells Angels are going to face a demographic problem.
But I'm sure all of those seniors won't need any services. Plus, they will be easily cowed into taking what they can get.
How can this keep going? It can't. The only logical outcome is a reversal of "fortune". That means a severe correction in RE prices.
My head hurts.
Tuesday, December 05, 2006
It's been all over the news lately(?), but as usual, it's over-simplified, but I think that this is a harbinger of things to come.
There are all kinds of trumpetings about the economy and such, but really, it's the same old guys making the cash while the populace at large pays. Ill-conceived mega projects, Gateway this and twin your P3 that. Sell that and surplus this. Double down and spin the wheel. The VSE never went away (except for poor ol' Murray Pezzim R.I.P.)
The smart money is getting the hell out of Dodge, and has been since before this housing market got going. There was a write up in BC Business about it exerpted below.
Our economy is booming. So why are head offices leaving and taking jobs with them?
...the head-office picture in Greater Vancouver is bleak. ...in decline for more than a decade, both in number of headquarters and, more importantly, in the number of jobs ...
In metropolitan Vancouver, head-office employment also declined by 29 per cent 1999-2005.
These are the types of jobs that make a "world-class city" - as opposed to a vacation destination.
...over the same time period, those employment numbers climbed by a whopping 64.4 per cent in Calgary, 19.1 per cent in Toronto, 15.5 per cent in Edmonton and 28.4 per cent in Ottawa.
So why are people still flocking to Vancouver? Residential and Olympic construction. It sure isn't the training wage.
Should we care? Life is good, the provincial economy is booming (for now, anyway), employment levels have never been higher and the Olympics are coming. Do we really need more head offices? PricewaterhouseCoopers senior tax manager Ian Heine, says yes, unequivocally.
The Olympics are coming! The Olympics are coming! Strangely, that refrain sounds identical to the sky is falling! in my addled brain. And life is good. Cool. I'm feeling better now. I did like the caveat (for now, anyway). Was the writer being cheeky?
Greater Vancouver has often been criticized for relying too heavily on its natural attributes as the main draw...
Rightly so in my view. Everyone knows that this is the greatest place on Earth, we just are not sure why.
“People come here...And they finally get our culture: they see all of Vancouver living the lifestyle that we’re promoting.”
Just what is our culture? Coffee on Denman? Shopping on Robson? Admiring our friends' granite counter tops? Sailing in the morning, golfing in the afternoon, and skiing at night? Who does that? Our culture is a brand that has been foisted upon us. Most residents of the city can't even see the mountains - even on a clear day.
...there are financial and logistical challenges to the Vancouver headquarters.
"Distance from the big eastern consumer base, the length of flights to the east and the eventual need for an eastern warehouse, and the need for an eastern office that could outgrow the Vancouver office"
Those same challenges apply to all the rich foreigners and retirees that are rushing here too. It has been asserted, by others before, that retirees are going to want to be close to their families, so why would they be interested in moving here. It's all a bunch of hooey.
Vancouver started out as a mill town out on the frontier, and it is still very much like that.
It's just like Oz.
Monday, December 04, 2006
Oh, I am out-doing myself today! Or maybe I've had too much bubble tea, and my brain has turned to foam...
First, I have re-dubbed Bub Rainy - Bubblicious Rainy.
Dub, Bub, Bubble. Toil and Trouble.
Second, I have figured out a new contest to get rid of that glut of condo's.
BR and The Sun are having a condo-give-away contest in which 6 condo's will be won. But that is not enough. There will still be a surfeit of condo's to move. So why not have a two-for-one sale? That would take care of the excess supply, and address the affordability problem. A family of 4 could hardly live in a 430 sq. ft. condo, but if they had two of 'em, they could just spread out a bit. It would help too when the divorces spurred by cash-strapped couples start to kick in. It's a win-win-win solution!
Third, I have figured out what got this bubble going in the first place!
This RE bubble seems to have started with the advent of Bubble Tea Houses in Vancouver. I believe that a bunch of very rich Asians moved here, and hatched a plot to cloud the minds of us Occidentals. Feed us Bubble Tea until our brains turn to spume, or we choke to death on those little balls of Tapioca.
To really create hype, I reckon that the incentive should end on December 31st, 2006. Kind of an ancillary to buy now before you're priced ot forever. I'm sure that people will get very excited, and we can kick-start this market all over again in these Dark Days of December.
Of course, it may be necessary to double the price of a condo - so as not to lose money- but we've seen that already, and the value is there! We understand these things much better now, and expect it.
Hurry, Hurry, Hurry!
*photoshop image by author
Saturday, December 02, 2006
Is it an improvement?
The first 19 floors have a nice, shaded view of the building across the street. Sweet for a few hundred grand, no?
Before the hudson
after the hudson
Does anyone have any photo's of The Hudson being built? I would be glad to receive them - email@example.com.
Friday, December 01, 2006
The Mac after the condo conversion.
I've been sooo busy this last week. I haven't had the time to say anything meaningful (well, I have never said much in that way anyhow...).
Last night I was looking for historical items regarding real estate in Vancouver, and came across some interesting stuff.
I am no fan of condo's, but I realize that it is a personal bias, and everyone has their own reasons, and tastes. This one made me shake my head though.
I have read about all of the condo projects - The "W", The Hudson, OMA, etc., but they were just names to me.
I came across before and after photo's of some of these projects. This one kind of left me wondering.
I found out that The Mac was actually built on the site of a McDonald's restaurant, and realized that it was named after their eponymous hamburger. They have a McDonald's downstairs, and condo's upstairs. That is just plain weird. What was in the promotional literature?
Come live at The Mac! A fast-food junkie's dream!
Relax on your balcony while the scintillating odours of frying French Fries and sizzling meat patties waft up and stir the appetites of you and your guests.
Never be stuck for menus for your dinner parties again. You don't need a yard for BBQ's - the biggest BBQ in the world is right in the foyer of this project.
The kids will love it, and will be the envy of their school mates when they have their birthday parties!
And the washrooms are always clean!
I guess it beats the smell of boiled cabbage.
As an aside - There is not much roof over-hang on this project, and it looks like a leaky condo in the waiting.
Wednesday, November 29, 2006
1) It's a nuclear free zone, and that is comforting.
2) Brown-water rafting.
3) Touring the ghost town of empty condos bought by speculators.
4) Going over the Cleveland Dam in VHB's rain barrel.
5) The mountains. I'm pretty sure that they are still there, I saw them last summer.
6) Site of the most expensive real estate in Canada.
7) Nowhere else can you see record rainfall followed by record snowfall and record low temperatures, followed by more rain - all in the space of 14 days. A perfect vacation destination!
8) It's just like Mexico! (in that the water may harbour dangerous intestinal parasites)
9)Anonymous posters on the blogosphere -
No surprise,same old story,but its not true thing is houses/condo's is not a onion or patato its one unit sells for millions,Can any one tell how many house should be selling in a year?no one is sure no solid answer.I think too many have been sold in 05,06 definitely mkt. will slow down when there is no buyer but sellers only,and only few will sell on low price so price will not go down who want to lose people sell to make profit who will sell if price does not full fill desire to sell.so any body wants to live in home do not wait buy it price will not take a reverse turn ever even after 2010.source
10) We're going to need some serious help paying for the 2010 Olympics.
Tuesday, November 28, 2006
The other day freako posed this question - Exactly why is it that market cannot provide affordable housing? And what exactly is affordable housing? A nice SFH with a picket fence in a gentrified neighbourhood? Five pieces of plywood? Until we realize that quality of housing is a relative concept, I don't think we can even define the problem. And once we do, how will it be rectified, and who should pay? here.
Good question. One that I cannot think of an answer to, but poses more questions in my mind;
Affordable rental housing?
freako pointed out that the market sets the price, and I am certain that he is reasoned in saying so, but who sets the market?.
SRO's, which are aimed at those with limited income, or on income assistance, tend to be about 50% of the monthly stipend of those receiving benefits. If more than that, they would certainly be unaffordable for the indigent. Underemployed people may take up the slack, or maybe not.
What about the homeowner?
Traditionally, banks have looked to no more than 32% of after-tax income for shelter costs (though I read recently that they are revising that up to 40%). That would include utilities and taxes. But here, we are close to 50% of median household labour income required to make a mortgage payment on a median priced house link. That's with 25% down too. Then another amount for utilities, repairs, taxes, etc. is needed.
So from the lowliest welfare recipient to the median wage earner, things are clearly unaffordable in Vancouver.
What can be done?
Beats me. They (whover they are) have us all by the short hairs. Refuse to pay, and you can try to make it on the street, or go somewhere that you can afford. But what if you can't afford to get to where it is affordable?
I wouldn't expect legislation against foreign ownership (if that's part of the problem) to be very palatable to any but the most disgruntled. Mexico doesn't allow foreign ownership. Mexicans have land rights though, and there is a system of Ejidos where the land is held in common. There is a loophole in which foreign companies can own land, but that feeds a big mess of corruption. It's also quasi-fascist.
Foreigners are not allowed to own land in the United Arab Emirates either, and you can't marry their girls. The state provides a villa to each married couple, and men are permitted to marry up to six women. A villa for each wife. Cool! Emirate men can marry foreign women.
No, I'm not a communist - just trying to find a dramatic ending to a tedious post. Maybe even provoke discussion.
But really. In the end, who sets the market when it comes to necessities?
Monday, November 27, 2006
I'm taking a snow day, so no rantin' and ravin' from this blogger today.
I did triple duty today, and the day is not yet over. I have had not a moment to read anything, or think about much at all. Factually, I am too exhausted by a lack of sleep to think.
Yeah, poor me. Priced out, and I had to deal with a foot of snow - just like all of us.
I'll try to get back in the saddle tomorrow.
Go build a snow person in the meantime.