Oooh. I'm a bad blogger. I'm chest-deep in chihuahuas these days. Child, churlishness, chicanery, choices, chumps, chicks, and chutneys. In other words - it's summer, and I've been really busy. Did I mention the chihuahuas?
On top of all of that, WTF is going on? The RE market is nothing short of surreal. I pass "For Sale" signs daily that have been there for months. Some are sporting "Price Reduced", but it looks like the summer doldrums, and buyers' fatigue. Chipman's numbers are all over the map. The stock markets are again accelerating, my contrarian holdings are holding, energy stocks are up and down, I see moving trucks and construction cranes all over the place, business is picking up...
I have little time to read, but I see new characters "on the blogs", and the "old" ones fading away. Even "bulls" are quiet. Is it just the summer doldrums? Then why is the market still so active? We are seeing near-record sales. What's with that? I just can't get a real pulse of the market. Is this a "calm before the storm"? Is the storm a cyclone of dropping RE values?, or a storm of new buying?
I haven't got a clue. Do You?
17 comments:
I hear you, it is driving me crazy trying to figure it all out.
Prices up, Inventory up, Interests Rates up, Stocks up, Stocks down.
I am still more certain there will be a downturn then continued appreciation in RE.
It will start in Edmonton, Calgary, Fraser Valley, Vancouver Island, then Vanouver.
Blogging activity has slowed down. Vancouver Condo and Mohican's sites seem to have less comments than usual. RE Market activity seems "normal". The financial markets are not in free fall so far.
I figured the bubble would burst last fall. Now, while I remain convinced that all data suggests a big correction is coming, I have given up trying to figure out when it will happen. Hopefully sometime soon, as the prices are so far removed from fundamentals.
Edmonton is undergoing some type of correction. The consensus is that sales at 5year low, record construction and inventory means...
..A six month buying opportunity followed by more moderate 10% yearly appreciation. Gotta love the MSM.
Residential inventory on the MLS alone is 9000. Comfree, the next largest seller over 2000. It has changed very quickly.
Its odd, I'm an Edmontonian and I thought Vancouver would drop out first. Edmonton is more affordable but less desirable so i guess its a tough call.
so far, I've narrowed down the explanation for this RE market to 2 choices. And they are either madness or... spartaaaa!
Things are unfolding as they should, quite unpredictably.
Hey, you're not alone my friend. I echo your sentiment.
Owning both a home in Victoria, and having significant investments in the stockmarket, I can tell you my compass readings appear to be fluctuating daily.
I've already pulled 100% of my stock market portfolio down into money market (thankfuly) before the storm hit, but now I see it climbing back up without any real foundation.
On that front, I think we'll have some clarity on Sept 5th, when Bank of Canada will make an interest rate call. I'm predicting no change or interest rate hike, but more than likely no change (what a shame!).
The other key date is Sept 18th, when the USA fed makes his call. I'm predicting that either a no change will lead to a stock market dip, a decrease in interest rates, will result in large multi-day gains, and an interest rate hike may very likely have global impact of multi-day (at least) free-fall of the stock market.
In Victoria, we saw record RE sales in July (highly likely due to bank interest rate guarantees to individuals running out of time + it's summer & people have time to go shopping & it's a nice time to do so). This month, inventory is low, but sales still high it seems...but who knows for sure, the numbers will be out soon. 1 Million dollar+ homes are for the most part not selling and sitting for months on end, same with houses with prices that are 2005-like overpriced. 300K-400K (yes we still have a few of those in Victoria), are apparently selling quite well, but pretty much without exception under asking price by a few thousand and up to 10-15%... and I'm not in the condo market, but it looks to me as if in about a year we'll have a very large over-build of inventory that will be selling for fractions of what it sells now, especially after all those foreign investors (including Albertains) selling out for a profit. Condos always take the first hit in a RE decline, but hey no sense preaching to the choir. ;-)
With the September BoC + US Fed statements on interest rates + numbers on August RE sales, we'll soon hopefuly have some level of clarity.
In the mean time, it always gives me hope when I see all the videos and charts and blogs about the US housing market crashing and burning... because you know it's just a question of time before it trickles here. I just hope the Fed doesn't bail out all those greedy creative mortgage companies or home owner flippers that added zero value to properties they bought & sold for a profit 3 months later.
How strange. I am knee deep in Shih-Tzus. Seriously.
Best of Luck!
Anon: 1:50 am
Yes! The homes over $1 million are not selling. Thank-you. I have seen this too.
My RE agent told me the other day won't be able to find a sizeable house in our price range $1.3 million and I should ask my husband to spend more money. We need space as we have 5 young kids. We already own a property here but we are on top of each other and stress wise it is not a great thing.
We are going to sit this thing out.
Here's some upcoming dates for Canada & US that will provide some impacting news for the stock market:
In Canada:
1) Bank of Montreal and Bank of Nova Scotia are due to report their third-quarter results tomorrow. Recently TD was up way above expectations.
2) Canadian Imperial Bank of Commerce and National Bank of Canada on Thursday. This one might be interesting, considering they were not completely immune to the subprime mess.
3) Sept 5th, BoC issues statement as to whether or not interest rates are to rise. This newsbit will overshadow all others in Canada and have the most impact in the short-term. I'm predicting no change in interest rates... but I don't own a crystal ball.
In the US:
1) Existing-home sales today; (up an unexpected 2.8% or so)
2) The New York-based Conference Board's consumer confidence index tomorrow;
3) The second-quarter gross domestic product and initial jobless claims on Aug. 30;
4) Personal income and spending data, the core personal consumption expenditure deflator, factory orders and the University of Michigan's consumer sentiment survey on Aug. 31.
5) September 18th - By far, this will be the biggest impacting news day for the stock markets for all of September; wherein the Fed is expected to either keep interest rates steady or decrease them (according to 11 out of 37 key analysts). Regarldess, the bond market has already fully priced in a .25 % decrease in interest rates, weeks ahead of the news.
I think it's just lag.
Ask the average person at an open house or on the street what "Credit Crunch" is and I bet they'll say it's like a hangover for your wallet after christmas or something. No clue. So of course with no information entering their bubble that there could be a problem they just keep on doing business as usual.
I have seen the downfall of Vancouver real estate and it is not the buyers (they're too stupid to know what's going on). Banks will be the death of the bubble. Right now there's still a big supply of buyers who are "pre approved" but that supply is dwindling and in the near future it will dry up.
Then only buyers who ACTUALLY meet the bank's stated requirements for a loan will be able to get a mortgage. This will mean a 10-25% reduction in buyers, coupled with the normally busy fall season I expect we'll see the bottom drop out sometime before Christmas.
But then again last year around this time I called July 2007, so what do I know...
Looks like Edmonton is done, Calgary next?
CHBC also had a story on the news about Calgary's prices dropping as well.
I'm still here. I just have RE fatigue. The homes in my neighbourhood now sell for >$1m. The nice homes sell for >$1.5m. Even with the mother of all housing implosions I couldn't afford to buy. And the mother of all implosions will bring a recession with it, so all our jobs would be on the line (unless I can get a gig at the city with a nice guaranteed 18% raise over the next 5 years).
It all makes me think of spring 1975. All the things that weren't supposed to happen.
Buon Me Thuot = Edmonton
Da Nang = Calgary
Nha Trang = Victoria
Saigon = Vancouver
Can you hear helicopters?
I can hear Jim Morrison (who is alive and well and living in Vancouver because it is the best place in the word) singing... "This is the End".
The thing with the Vancouver real estate market is that it seems independent of local conditions and is more dependent on the Asian economy. As long as there are mega-rich tycoons willing to send there children over here with enough money to buy luxury condos in yaletown and coal harbour, our real estate market will continue to be insane, which is to say, it will be insane for quite some time.
WTF cares about Coal Harbour and Yaletown? Why is Langley so expensive? Is that the new hangout for the "rice rocket" crowd?
In any case, the Asian richies have been around since the 80's and that didn't stop the crash of the early 80's and the bear market of the late 90's. Every bubble has its "deus ex machina", and it never saves the show.
The cheerleaders were spouting the same line, word for word, in 1981.
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