kit houses - a blast from the past

I read a story at the Glob of Mucous about Sears homes delivered by rail (in pieces) in the early 1900's. Prices ranged from $400 - $3200, and you had to build them yourself (or hire someone to do it). Cute little houses they were too. Sears would give a ten year mortgage on them with payments of $30-$40 per month. During the Depression, people did default on them. Now, houses, and the monthly payments, are 100x more.

Oh, sweet nostalgia.

Edit - I forgot to mention (from the article) -

The price was cheap. The materials were not. Cypress shingles, bronze door hinges, glazed windows, granite bathtubs. They came in styles and shapes and sizes befitting a wealthy farm owner. They also came in smaller sizes, at prices affordable to even an immigrant coal miner.

They carried evocative names such as The Montrose, a seven-room, one-bath Eastern colonial with green shutters, flower boxes and a hooded gable entrance. "Justly considered a beautiful home in any community, no matter how exclusive," said the catalogue.

Granite bath tubs - fergit yer granite counter tops - those are low-brow.

And the marketing was good then too - according to the catalogue. Evocative names. ...no matter how exclusive. No mention of luxury though.

the grab bag # 7

Lots of For Sale signs sprouting like psilocybin mushrooms out there.



I say that because the etymology of psilocybin is:

psilocybin

1958, from Mod.L. psilocybe, name of a Central Amer. species of mushroom, from Gk. psilos "bare" (akin to psen "to rub") + kybe "head."

Online Etymology Dictionary, © 2001 Douglas Harper

"bare head" - as in - "no helmet to protect the head in the case of a crash". Or if you go with psen "to rub", it is akin to scratching your head in disbelief, or such. Hmmph.

The buyers must be hallucinating.
_____________________________________________________________________________________

In other vistas, Fannie Mae is accused of fraud by KPMG.

KPMG claims fraud at Fannie Mae
By Bloomberg News | April 21, 2007

WASHINGTON -- KPMG LLP sued former auditing client Fannie Mae, the biggest source of money for US home loans, for "fraudulent deception" that prevented KPMG from uncovering $6.3 billion in overstated earnings.

Fannie Mae from 1998 until 2004 withheld and distorted its accounting, engaging in "breach of contract, fraudulent misrepresentation, fraudulent inducement" and other wrongdoing, New York-based KPMG said in an April 16 filing with the US District Court in Washington. A Fannie Mae spokesman declined to comment.

Uh oh. That's big. Isn't it? Isn't that like CHMC being accused of fraud? How come nobody is talking about this?
_____________________________________________________________________________________

I heard the chief Of West Fraser Timber (2nd biggest in Canada) saying that the forestry business in Canada is well into recession (on CBC radio). Um, isn't forestry the biggest exporter of the BC economy, and one of it's biggest drivers? Or are things different now?

stocks vs. real estate

I found this here, and thought that it might be of interest (no pun intended). I emphasised a couple of lines.

The premise is that the stock market out-performs RE in the long term. Not exactly news, but there are some pretty charts and numbers. It is a 9 page series.

Of course, these last 7 years or so are an aberration, and it's different... blah, blah.

Stocks vs. Real Estate

Both real estate and stocks have had their day, but the question you need answered is this: Which contender is the superior long-term bet today?
By Marlys Harris, Money Magazine senior editor

Round 1

Performance
Real estate has packed quite a punch of late, appreciating 12.4% annually between 2001 and 2006, according to the S&P/Case-Shiller U.S. Home Price index. That clobbered stock prices, which gained only 4.3% a year as measured by the S&P 500.
But over the long run stocks win easily. A new study by Jack Clark Francis, a finance and economics professor at Baruch College in New York City, and Yale's Roger G. Ibbotson compared the annual returns of real estate from 1978 to 2004 compared with those of 15 different "paper" investments, including stocks, bonds, commodities futures, mortgage securities and real estate investment trusts (REITs).

The results? Housing delivered a solid but unimpressive annualized return of 8.6%. Commercial property did better at 9.5%. The S&P, however, delivered a crushing 13.4%.

Other studies argue that real estate's returns are much worse. Yale finance and economics professor Robert Shiller, author of Irrational Exuberance, who looked back to 1890, contends that only twice has real estate produced truly outstanding returns: after World War II, when returning troops were starting their families, and from 1998 to 2005, a period he thinks is a bubble.

Housing's rate of return, he argues, has to trend back to the mean of about 3% a year - barely above the inflation rate. If that's starting to happen now, he says, we could be facing many years of losses.

Before you decide that real estate is already down for the count, though, consider this: Equity REITs, which own stakes in commercial properties, were among the best performers in the Francis-Ibbotson study, with annual returns of 14.8%. But REITs are stocks, after all.

From the last page -

Real estate's only big win is in leverage. Using that leverage to buy a home you can afford makes sense. You're building equity and collecting other benefits as well. (And no landlord can stop you from owning a big, hairy dog or throwing a party for 200 of your noisiest friends.)

But jumping into the real estate ring thinking you'll use others' money to score an investing knockout is plenty risky. And the big prize, as you may have noticed if you've tried to flip a condo lately, is more elusive than it might have seemed.

I personally think that the stock markets and RE are over-valued right now, and I can't figure out what is going on except for cheap money. That cheap money is about to get more expensive by all indications.

condo culture

I have taken swipes at marketing - specifically of real estate in the past. Recently, there is a new blog on the block - so to speak - condohype which is a very good read. Their most recent thread brought marketing into focus, and then I came across an article in one of my favourite publications - The Republic of East Vancouver. I will excerpt some of it below for illustration, as I think that it is particularly well written. Read the whole thing for a lucid take.

Vancouver's condo industry has embraced "culture" and "art" as a fundamental part of many sales pitches. The cultural allusions run thick in local ad copy. Where once the real estate industry emphasized a residence as a good place to “raise a family,” today they use “lifestyle” to lure prospective buyers.

By correlating cultural commodities of distinction with the people of distinction who purchase them, the marketers construct its imagined clientele at the same time it makes its pitch. Who is this new clientele?

...in a recent New Home Buyers Guide article, Susan Boyce enthuses, "When you're ready to explore, you're at the very heart of what makes Vancouver a vibrant, truly world-class city. Perhaps a night at the opera or symphony? Or an afternoon pondering the latest showing at the Vancouver Art Gallery. Maybe you'd prefer wine tasting . . . .”

...this strategy "inspires a new language dealing with difference" and "a coded means of discrimination." The mobilization of taste as a mark of distinction appeals to a specific type of resident in the downtown, one who has had the time and money to invest in developing these tastes, tastes developed outside the exigencies of the labour market. Put bluntly, the ads employ coded class appeals to differentiate their target audience.

Condo Salesperson seeks cool, authentic, risk-oblivious people, either sex, for fun and debt-bondage.

It goes on, and I don't want to reproduce it here, but it's worth reading.

Ack. Choke. Please, tell me who I am, tell me what I want/need. Ack.

taxes, empty pockets, empty dreams

I heard on CBC today that residential property taxes in Vancouver are going to increase by 8% plus, while business property taxes will have a lesser increase than they expected.

I have always thought that res. prop. taxes were a "good deal" here, in comparison with other jurisdictions in which I have lived. It's a closing of the barn door after the horse has fled though. Vancouver has lost a lot of businesses through the onerous burden of those taxes. I can't help but wonder though, if it is just a légère de main to cover some of the Olympics costs. There is already a rumbling of discontent with the Olympics scam, and it is not confined to "left-wing nutters". It strangely comes just a couple of days after announcement of huge cost over-runs in the new convention centre construction. It seems to me that I heard that they had doubled? (I can't say for sure, because I am in and out of earshot of the radio all day)

Oh well, it's worth it. Vancouver is...the....best....place..........in the world. Maybe just a little bit more expensive.

And then this eye opener on taxes from the Astute Fraser Institute (well, once in a while) - link

The Canadian Consumer Tax Index tracks the total tax bill of
the average Canadian family from 1961 to 2006
• The total tax bill for the average Canadian family, including
all types of taxes, has increased by 1,590 percent since 1961
• In 1961, the average family had an income of $5,000 and paid
a total tax bill of $1,675 (33.5 percent). In 2006, the average
Canadian family earned an income of $63,001 and paid total
taxes equalling $28,311 (44.9 percent)
• Taxes have grown much more rapidly than any other single
expenditure for the average Canadian family. In contrast to
the jump in taxes, expenditures on shelter increased by 1,019
percent, food by 487 percent, and clothing by 447 percent
from 1961 to 2006
• The average Canadian family now spends more of its income
on taxes than it does on the basic necessities such as food,
shelter, and clothing. In 1961 the average family had to use
56.5 percent of its income on basic necessities (food, shelter and clothing), while only 33.5 percent of the family’s income went to taxes. In 2006, the proportion of income consumed by taxes had increased (44.9 percent), while the fraction of income spent on shelter, food, and clothing (35.6 percent) had dropped dramatically

(emboldening mine)

Add to all that the cost of real estate, and something's gonna happen.

I liked the title of this book, and the picture on the cover. I have not read it, but I thought it illustrative of living in Vancouver today.

the soapbox 1.7 Ghz

I know, I said Sunday would be the soap box. I'm a day late, and more than a couple of dollars short.

A report on CBC radio today said that Vancouver house prices rose by some 14% yoy. No link. I heard it, and I wouldn't lie to you.

If I had jumped in when I thought things were already overpriced, I would be up a hundred grand or so. I would probably find it hard to sell though, so I have no regrets. None.

Edmonton is up ~50% yoy (you can have it). Windsor is down, and St. John's lost "value". It's just here that things are really insane. Really insane.

There seem to be a lot of for sale signs littering the cityscape, but quite a few have sold stickers on them. Quite a few don't.

I heard on CBC a few days ago, someone saying that there is still about $8Bn in non-residential construction lined up for Alberta and BC - mostly new office buildings in Calgary. No detail on that, because I heard it from afar, and in passing. (Is the RAV line that much over-budget?)

Is it safe to think that when they start crowing about non-residential construction in Calgary, that things might be starting to look dicey here?

Did I mention, ever, that I think there is a bubble?

A pretty bubble.

skulking

Well, I've been skulking about, not posting much - blaming it on new fatherhood...



It is true - it has stolen my "time", but I have also been at somewhat of a loss for words in discussing the RE scene in Van. these days.

We all know it will crash - even the bullish amongst us. But when? Will it crash like the gas prices - dream on... There is something in the water, I think.

Anecdotally; business sucks lately. Decidedly un-busy. My income relies on discretionary spending, and it seems to be in decline. Not just me, but others in the same business are reporting similar results.

Restaurants seem less busy, stores seem less busy. New car sales are on the decline. Anything else?

On a bright note, condo hype is doing really well. If you haven't checked it out yet, it is a recommended read. If only I was so funny, well read, and had a little more time...

I am going to start opening up the soapbox again because I think that the commentary is often better than the scribing - here, and other places too. So think of what you want to say, and in the spirit of Speakers' Corner in Hyde Park, London, Sundays will be your chance to have your say.

I noticed last week that the hit counter here was 6's right across the board. What does that mean? Not much, really, but that some of you are still interested in my pontification(s). I will try to satisfy that interest in the coming days.

Being a new parent does indeed change one's life. I'm so tired...

condohype. a hip, modern, urban commentary

condohype

There's a new blog online - condohype, and it's very worth perusing. Thanks to the pope for pointing it out. Like the pope, I really like the maxim of disown the lifestyle. I'll put a permo-link up in the sidebar.

It's clean, it's sarcastic, and the author thinks like me do. I actually have a little bit of blog envy. I bet it's written on a Mac...

I'm such a Luddite - stuck in the stone age of PC and blogger beta/binary/new blogger/old blogger/Google cookie heaven. Hey Pal, I don't do PayPal. Get yer friggin' cookie off my browser. One of these days, I will get with the programme.

Back to condohype - it's a good read. Check it out. Most of you probably knew that before I did.