Tuesday, February 06, 2007

empty houses

A reader sent me this tip (thanks Dave). It is referring to the supply overhang in the US, but it may well be relevant here soon enough - especially in the condo market.

Prediction: More pain for homeowners
A glut of almost 1 million homes sitting vacant may mean another downturn in the housing market, analysts say.

CHICAGO (Reuters) -- A glut of vacant homes suggests that the U.S. housing market has not yet stabilized and may be poised for another downturn, Merrill Lynch said in a research note released Monday.

"Now that oil prices and mortgage rates have stopped falling, we will be back lamenting the downturn in the housing market and its spreading effects on the economy in the second quarter, much as we were in the summer and fall 2006," Merrill Lynch economist David Rosenberg wrote.

"Looking at the inventory backlog and still-stretched affordability levels, this story is far from over."

Far from over indeed, and it hasn't even started here yet. The unremarkable declines that we have seen so far are just the beginning in my view. We gotta wait for spring and summer to pass in a blaze of gory, uh, glory for the new reality to set in.

I think that it was Vance who said 'as goes housing, so goes Vancouver', and we all know that as goes the US, so goes Canada. It's always been, and always will be.


patriotz said...

we all know that as goes the US, so goes Canada.

Yeah but this time it's different.

Warren said...

I'm not suggesting Vancouver will survive unscathed, but "as goes Toronto (Canada)" does not always equal "as goes Vancouver". Perhaps we will suffer while Ontario thrives, or at least maintains moderate growth. Or... the Olympics will save us all.

solipsist said...

Oh, I am getting daft. Of course it's different this time, and the Olympics will save us. I always forget that part.

Ontario is flagging in it's manufacturing, but we have mountains. Golden Mountains no less. And, a highway that goes from the sea way up to the sky.

mohican said...

This is a topic I have been trying to research for quite some time in the Canadian context but I have been unsuccessful so far. I'd love to see how many homes are sitting vacant in the different metro areas of Canada - especially Vancouver. I have this hunch that the numbers, as a percentage, would be very high.

solipsist said...

This is a topic I have been trying to research

I'd love to see the numbers for Canada. We do have it from Muir et al that 40% - 50% of downtown condo's are bought by investors.

You could comb the MLS for ad's that boast that the property has never been lived in for a very rough idea.