Sunday, August 24, 2008

she's come undone



She's come off the rails, and it doesn't look like it's going to be a slow-motion train wreck. Everything is looking down from here.

Calgary had a major project cancelled on Friday. I read a snide comment somewhere wondering if Calgary had run out of oil. Infinity Towers in Vancouver sounds rather uncertain, and anecdotal to what I read over at Rob Chipman's, sales prices are dropping in the double digits. The smart ones have bailed already, and the hangers-on are starting to catch on. Throw in Death, Divorce, Transfer, and add a dollop of economic downturn and unemployment, and things are looking grim for the last fools out.

Sheesh, even mohican got metrics to work for him, and bought at a twenty percent discount.

Yee-haw! I'm looking forward to the autumn apocalypse.

19 comments:

arit said...

Definitely unravelling faster than expected....

Halleluya!

Regards,

arit

Anonymous said...

"Definitely unravelling faster than expected...."

Really? Am I the only fool who thought it would never get this overbought to begin with? I remember thinking in late 2006 that it will pop any minute as the average vancouverite could not afford 1/2 million for a detached home. 2 years later and average homes at 3/4 million, the cracks are just starting to form.

Ken Simpson said...

My neighbour just bought a house for $550K near the PNE. He's trying to sell his current house for $750K - it's an old-timer a block and a half off of Hastings that he picked up for $250K in 2001.

Had an open house on the weekend. I think they had one visitor. Let's hope he has a way of getting out of his purchase contract on the new house.. or at least a way of bridging for a while. $750K is seeming too high by a long shot for this market.

Anonymous said...

Ken. Why did your friend buy a new place first? Boy, that seems like a scary situation. OK he did buy the last one in 2001 so he has a lot of wiggle room for pricing.

As I posted over on Chipper's site, Craiglist looks awesome. "Reduced", "motivated" "must sell"

Love it :-)

pbell

kris said...

Imagine for a moment that you won a lottery and some time after they call you and tell you there was an error and your winnings are actually much less than what you though...I bet your first reaction would be denial.

I guess all these new millionaires who thought they have fortunes on their hands do not want the reality to set in just yet.
Their euphoria and sense of accomplishment will fade eventually, but for now they still believe they're sitting on a treasure.

kabloona said...

I believe the solution to this falling market is staring us right in the face: the Gov't needs to make it easier for undead zombies (like the child in the picture) to purchase homes. Whether the undead actual require housing is another matter.

My proposal is quite similar to Alan Greenspan's solution to the US meltdown, viz. sell the excess US housing to the illegal mexican immigrants who originally built it.

Many think Greenspan is senile, but I still think he's an unappreciated genius.

;-)

jesse said...

"sell the excess US housing to the illegal mexican immigrants who originally built it."

You mean to Mexican immigrants, except the ones working in construction of course. Why would a Mexican immigrant, or anyone else for that matter, buy when prices are going to be lower next year? "Immigrant" doesn't mean they make bad financial choices.

jesse said...

"the cracks are just starting to form."

I would not anticipate bottom for several years. Failed flippers, knife catchers getting sliced, it's starting to sound like a really bad circus.

Ken Simpson said...

pbell:

Ken. Why did your friend buy a new place first? Boy, that seems like a scary situation. OK he did buy the last one in 2001 so he has a lot of wiggle room for pricing.

I guess he figures he's got $200K of wiggle room. He's hoping that the $200K difference will leave him mortgage free, so "worst case" he'll have a bit of a mortgage left.

Strange the math people use for something as important as their largest financial asset. You'd think it smarter to recognize that a bust is happening, liquidate the asset at the top, and the invest the proceeds whilst renting at half price for a few years until things bottom out.

But people don't relate to their houses like that. "Equity" is this magic keyword that sends home owners into a strange trance. Equity = Cash, folks, if you price it right!

I'd give my right arm to have $500K tax free because of a speculative bubble that I accidentally enrolled myself in back in the early part of the century... That kind of stupid luck puts the dot com boom to shame.

Art Vandelay said...

I guess all these new millionaires who thought they have fortunes on their hands do not want the reality to set in just yet.
Their euphoria and sense of accomplishment will fade eventually, but for now they still believe they're sitting on a treasure.


That's a fairly accurate assessment, in my experience.

solipsist said...

I remember thinking in late 2006 that it will pop any minute

I was thinking that in May of 2003. Go figger.

Gov't needs to make it easier for undead zombies (like the child in the picture) to purchase homes

They did that with 40/0%, but realized their mistake when the merely brain-dead (as opposed to un-dead) began clamouring for the development of grave yards - in light of the "land shortage problem".

a really bad circus

Good thing the five ring circus is on its way to save us!

Equity = Cash

Iniquity = "the powers of darkness" - hosted by your local MSM, bank, and Camp'er-van Mere.

patriotz said...

Their euphoria and sense of accomplishment will fade eventually, but for now they still believe they're sitting on a treasure.

Just like during the dot-com boom. Ask anyone working in the tech business. Only the lucky few, like those at Hothaus, got out at the top.

Anonymous said...

RE: Selling foreclosed homes to Latino immigrants as a solution:

That's EXACTLY what CAUSED the problem. Banks were giving away mortgages to illegals with no proof of income and variable interest rates in places like Stockton and Las Vegas, and now those folks have walked away from their foreclosed homes, many going back to Mexico. Construction workers and their families alone account for 80% of the Exodus.

There aren't any immigrants left to buy these homes, and they aren't able to qualify for mortgages anymore either, so those homes are sitting and decaying. Especially the ones trashed to utter worthlessness before the "owners" left.

Anonymous said...

Geez... that is ONE scary illustration!

patriotz said...

That's EXACTLY what CAUSED the problem. Banks were giving away mortgages to illegals with no proof of income and variable interest rates

No, not exactly. The problem was that banks were giving away mortgages to absolutely anyone with no proof of income, etc.

There are more than enough shiftless, irresponsible US citizens to go around.

Anonymous said...

Patriotz, I didn't mean they were giving away mortgages to ONLY illegals. I only pointed that out because I was responding to a post that said the solution was to sell foreclosed housing to immigrants, illegal or otherwise.

patriotz said...

Your post gave the impression that you were blaming illegals, and not any other buyers, for the US housing bubble.

In fact the bubble was just about everywhere in the US including areas with no illegals to speak of, such as Montana.

Anonymous said...

Sorry for that. It wasn't my intent.

Anonymous said...

I'd give my right arm to have $500K tax free because of a speculative bubble that I accidentally enrolled myself in back in the early part of the century...

Ain't that the truth. It's like winning the lottery of life.