msm report - ship hits dam

I found this little piece of joy over at The Sunk, er, The Sun. I hacked it up below, but feel free to wander over there and read the whole thing. Interesting such a piece surfacing there (even though noncommittal on the cost of RE in Van.). The impending doom really is starting to show it's face. They actually do use the word "bubble"!

Who, in the real world, can afford to live here now?
Miro Cernetig, Vancouver Sun
Published: Monday, October 29, 2007

By the standards of our gravity-defying real-estate market, it didn't sound all that irrationally exuberant: a well-appointed Kits Point pad, with about 1,300 feet of space and a view of the ocean.

Price: a cool $1.25 million.

I don't raise this particular listing as a comment on the value of real estate in this town. (you ought to!) When a condo atop the Hotel Georgia goes for $18 million, I guess even a million-dollar basement suite in Kits Point is easily within the realm of possibility.

But, yikes. Wasn't it only a few years ago you could actually get a penthouse, or something at least above the garden, for a million? Now it's the entry level for a Kits Point basement.

What's really notable -- and worrying -- about this Kitsilano basement, though, isn't just the price tag. It's emblematic of a larger social squeeze now changing the social fabric of this city.

Who, in the real world, can afford to live here anymore? New immigrants? The working class? The middle class? Students? Your own kids?

Of course, the banks are willing to help. As the RBC notes in its survey, a Vancouverite's average mortgage payment of $3,230 a month on a two-storey house could be reduced by $400. The catch? You need to sign up for one of the new, 40-year term mortgages, instead of the 25-year term your parents got.

So, take out a mortgage at 25 and at 65, you can retire a homeowner. What a deal.

Unless you lose your job, or your health, or your partner, or the interest rates are at 12% when you have to renew.

Wait 'til the ship really hits the dam. It will make for some fascinating reading in the MSM.


But could it get so much worse?

Areas that are already hit by the foreclosure crisis will now be hit by investors who are buying up properties to rent them out, which makes neighbourhoods less stable than owner-occupied housing.
Jim Davinie,
Minnesota State Representative read here