mull

Oh!
Hey!
Hi! How ya doin'?
Still there?
Ya, me too.

I have not written much lately, I've been considering where to go from here. I've had a lot of fun with the zany, the zowie, the zip and the zing. Jertains in my curtains, and zillows on my pillows... but the RE market is toast. That is not news anymore. Well, maybe it is - to some...

I got an e-mail yesterday from condohype alerting me to this article in The Gastritis and Mal-absorbed. I suppose I ought to be more charitable - given the Season of Blissful Consumption, and given that the writer, Timothy Taylor, gave a (favourable?) mention of condohype and vancouver (un)real estate - let's call it The Globe and Mail.

THE CITY: A BIWEEKLY LOOK AT LIFE IN VANCOUVER

The upside to the bubble bursting: Sanity returns
The bloggers had it right - B.C.'s real estate market was due for a correction. At least we can stop obsessing about house listings
TIMOTHY TAYLOR

I could not agree more. Further, he writes;

...Meanwhile, bloggers are gloating. I'm talking about those real estate death watch sites such as Vancouver (un) Real Estate (vancouverunrealestate.blogspot.com) and Condohype (condohype.word- press.com). After the Real Estate Board of Greater Vancouver called off its 2009 conference and trade show two weeks ago because of the downturn, the blogger-in-chief of Condohype wrote, "Too bad the party's cancelled because that activity sounds awesome. In my book, it's an invitation to show up in my 'The Blogger Was Right' T-shirt with my dogs Case and Shiller. I'm devastated this can't happen now."

The sarcasm is perhaps a little undignified, but you can hardly blame them for feeling satisfied. They diagnosed market madness. And, with varying degrees of insight and eloquence, they were correct. That bull market really had distorted our view of certain things. It had changed us, or at the very least it had changed the way we relate to the places where we live.

It's nice to be noticed by such (an august) publication as the Gripe and Mewl, but I have to say that, well never mind, it's Crassmess, after all. Personally though, I think that the hypster's sarcasm is brilliant, prolific, and consistent, but never undignified. And Timothy, it's all lower case on the title for a reason. Do I feel sorry for flippers caught with their trousers down? No. I do, however, feel for the naive and ovine - whom were sucked in by the hype. I feel for those who have no idea what a recession is, let alone a depression, and have a huge mortgage with no equity, and will lose their jobs.

We were right - all of us; VHB, the pope, me, mohican,... Even Rob Chipman hedged his bets. You the readers were right too, and that is why you sought a different view. But gloating? Nah.

Now, where to go from here?

There is much to write about, always. Politically, I could dedicate to a career in print. I alienated a lot of readers in that though, because I expressed my very explicit views of Harper, and a good bunch of the Conservative Party. There is little gained from such rants though, it just tires me, and inflames others. Most couldn't give a hoot.

I could write about the coming depression, but that would just depress all of us, and waste a bunch of time that could be spent more judiciously - like canning fish, and salting pork, and stewing fruits, and pickling eggs, and learning how to plow with a dog in harness, or darning socks, or repairing boots, or distilling corn mash.

Maybe, I could just continue to post whatever suits my fancy. It might be about gay penguins. It might be severed Internet cables under the sea (and the perceived portent). Maybe you need an herbal cure for halitosis, or want to know about non-local effect. How to skin a rabbit, or pull a grouse's head through it's rectum. Maybe I will relate something that you have already read over at The Turner Report, or Greater Fool. I ripped this from there -



The Detroit house, on the left is going for $300 (three hundred dollars). The Vancouver house on the right is going for $998,000. Detroit must be the Worst Place on Earth, wot? They need some steenking Oleempics.

For now, this will remain vancouver (un)realestate (because it is still unreal), but in the future, it may morph into something like vancouver re-instated, and I will report on Bridge scores, or such. Who knows?

If you send me money, I might even be compelled to write more. If the Grey and Mangy wants to hire me, great! In the meantime, you can hook up for the RSS feed so to save a fruitless click - only to find nothing new.

Best of the season to all, whatever your affiliation.

sesame street

One of these things is not like the other one...



I read something that prompted me to look and see what is available in Beverly Hills, and found this 3 bedroom/3.5 bath beauty for $2,995,000. It is on a half acre (21,825 square feet), and basks in warmth and sunshine year-round. And, you might bump into Salma Hayek whilst looking over the asparagus and arugula at the Atelier Market.

So, maybe you can't get a Green Card, and need to settle for something in Vancouver. There is always V738247 in Shaughnessy for $2,888,000. On a 16,748 square foot lot, 3 bedrooms, with 2.5 baths, it basks in sunshine and relative warmth for about 100 days per year. And you might bump into David Emerson whilst having your BMW lubed.

...one of these things is not the same (although the prices are so close).

Things are still way out of whack here folks.

blah, blah, blaffelgab

Home price slide may be over-stated.

Canadian home prices cooled last month, but the depth of the correction may have been exaggerated by distorted data, says...TD Securities Inc.

The average price of a resale home across the country's 25 major markets fell by an estimated 6.2 per cent year-over-year in September, according to a report last week from the Canadian Real Estate Association (CREA).

The decline was larger than many market watchers had expected, and added to fears the Canadian housing market could go into a U.S.-style freefall.

However the price drop was led by a 43 per cent plunge in the number of homes sold last month in Vancouver, the country's most expensive market.

“The crux of the issue is that unless the underlying cities are properly weighted...the results can be biased by dramatic changes in the volume of the sales in certain cities,” said the report by TD economists Millan Mulraine and Eric Lascelles.

Currently, the average existing home price is calculated by using an average that gives each city a weighting based on its contribution to overall sales, Mr. Mulraine said. TD recalculated the data by fixing the weighting to last year's data instead, which is a more standard method of calculating year-over-year comparisons for economic data, he added.

Under the new weighting system, last month's average existing home price decline would be a more moderate 1.3 per cent from Sept. 2007, the TD report said.

Here we go; if you don't like the numbers, just change 'em, or at least, change the way they are interpreted. This same thing has been done with inflation numbers, unemployment numbers (if you are not receiving benefits, or have given up in despair, you are not unemployed!), and who knows what else. It is just so much Newspeak - a la 1984. The stock market has not really crashed since July, it is up significantly since 1934! Trillions have been made! You are not really older than you were 20 years ago, your hair is not grey, and you don't really weigh more than you did in high school - you are actually younger than your parents! (and your hair less grey), and you weigh a lot less than Luciano Pavarotti! There, don't you feel better now?

Prices 8% less than last year are prices 8% less: who gives a flying fig what the volume of sales is?

if the cap fits,

let him wear it



Wowza!

Did I hear someone say;

- The TSX closed at 9600 - down 4.5% on the day? That is just a measly 1/3 from the peak. Oil down, and the dollar down.

Batten the hatches, this is just the leading edge of the storm. The market was as over-valued when flirting with 15,000 as the RE prices were last May, so it is no big surprise. I feel that if things hadn't been messed with so much by scoundrels and fools, the TSX is about where it should have been. But it will see 6,000 or less before it turns back. (It might not ever do that.)



- Harper say to Peter Mansbridge that there are good buying opportunities in the stock market? For who? His mother? Does he not read newspapers? Have advisors? If he does read a paper, it must be The Stars and Stripes. His advisors must want to see him fail. Who calls an election without having a platform?

Harper is completely out to lunch, and it seems to be showing in the public sentiment. What foolishness will he utter next? Let them eat corn flakes!? His narcissistic nature leads him to believe in the Noble Lie, and that he is smarter than everyone else. He is clever, but that ain't smarts. Duceppe pinned him down in the debates. So did May. Layton openly laughed at him. Dion made him look like a chump.

When Mansbridge interviewed Harper, he swallowed hard a few times when Mansbridge threw the truths at him. Harper forced this election because he knew that the sheet-storm was coming, but it caught up to him, and he has blown it. $300 Million so that he could have an even smaller minority than he had, and my bones are starting to say that he might not even get that (so are some other commentators, I believe). There are around 20% of voters undecided the last I read, and I doubt they will go Cons. A coalition of the left is starting to look like a strong possibility.

- That 230 Canadian economists, teaching at Canadian universities, say that a carbon tax is what is needed at this time - even without the tax cuts? The Greens' plan would be even better, in that case.

What a sham. Harper looks the complete fool in this one. Cold, hard irony. Whap!

the beat goes on

Wow, TSX down 814 points - about 7 per cent - at the last I heard, and this on the news that the latest bail-out package in the US has passed the Senate (now up to $800 billion). It still has to pass the House of Representatives though, and that is the body that rejected it last week. Will they pass it this week?, and if they do, will it save the American economy? I doubt it (on both counts).

The pain is coming, whether we like it or not. The only question that I have is, how bad will it get, and how will that affect the Vancouver RE market? (a pure, rhetorical question) Draw your own conclusions, but the RE market was already on it's way down - before all this global doom and gloom hit. Any investor with a modicum of sense will be looking for deals in the stock market, and will be staying well away from Vancouver RE, IMHO. The tanking price of oil is a bell-weather (unintended pun), I think. Potash Corp. was a big loser today - down almost 20% - anther bell-weather? Is the TSX a true measure of our economy? It doesn't look so good right now.

So, to slip into election schtuff; Harper said in the French debate last night that Canada is not the US (yet), and that we have solid fundamentals. Like the Potash Corp.? Or, oil production? What about manufacturing (Auto workers), tourism/service, etc.? How is that doing? RE is tanking across Canada, what about those soon-to-be unemployed realtors, mortgage brokers, conveyance clerks, construction workers, home stagers...? I don't see a strong outlook, fundamentally. Harper said not to worry. OK, he pretends to be not worried, but are you? Do you have faith in someone who says to ignore the train barreling down the track toward you with its horn blaring? Are you thinking of buying a new car? Plasma TV? New computer? Buying a house? Going on vacation? Buying an Olympic ticket package? Are you going to take a HELOC, or rack up your credit card going out for dinner and drinks? If you are not, do you think that any government is responsible in saying "don't worry, spend with a big Prozac smile"?

I have to say that I didn't take much away from last night's debate. I found it hard to follow because I couldn't watch it live, and saw a translated version. The problem for me was that the translation was over the French, and my mind kept on switching back and forth, and leaving me lost. I also have a hearing problem, and tend to watch people's mouths, which threw me off even more. I felt that Duceppe was the best speaker, and that Dion is not the right guy (not because of a lack of sincerity, ideas, but because of his style, and challenges with English). Neither is Layton, and Harper is certainly not. His body language was revealing, and it was obvious that he had complete contempt for everyone, including you and me. May did well - considering that she was out of her language depth. As after every federal debate, I have to ask the same question that so many do: Why couldn't Duceppe be the leader of a national party not bent on Quebec secession? He would take it.

Unfortunately, the salient election issue is on the personalities put forth by the leaders (at least, the personality that is wanted to be seen), and not about the real issues. How shallow is that?



Stay tuned.

world class

I have been despairing because I don't have the time that I used to have to dream up silly posts and do research. Such is life.

One of my first posts at this blog was a compare and despair, featuring a West Side house, and comparing it to a beautiful French mansion - for the same price.

Today I fed the wee one a half bottle of scotch, and while he slept it off, I tried to find something of interest (just kidding about the scotch - I drank it). Forbes.com has an article entitled In Pictures: What $1 Million Buys In Homes Worldwide (for those who feel entitled to their entitlements).

In Buenos Aires, $1.1 M buys A four-bedroom duplex with a terrace, this 3,800 square-foot apartment in the Recoleta district features four bathrooms, oak floors, fireplaces, a maid's room and a laundry room.

We have "good airs" here, too!

In Sharm El Sheikh, Egypt $982,000 buys;

This four-bedroom, Mediterranean-style villa surrounded by gardens and a swimming pool is on the Red Sea, near Nabq Bay. It boasts views of the Sinai Mountains. A finished basement houses a gym, sauna and steam room. Located within a beachside resort, the home has access to a spa, restaurants, bars, tennis courts, a Roman theater and many other luxurious amenities.


Well, we do have the Coast Mountains, and the Pacific Ocean.

There are others too - In the Big Apple, a 650-odd sq. ft. pied a terre will set you back about a million. Close to the United Nations, and all the other fun that NYC has to offer. Paris proffers 615 sq. ft. in 4th Arrondissement for a million bucks, and in Berlin, $990k will buy a place with seven apartments.

None of those cities will be hosting the 2010 Olympic games (technically, Vancouver won't either - but we are just 2.5 hours from Whistler!)


Yes, it's all apples to oranges, but some pretty cool places in some pretty cool places will cost about the same as the 1023.0 sq ft, 10th floor condo on W 14TH AV, Fairview, Vancouver West, for $998,900.00 (pictured above).

I dunno, if I had a million bucks to dump on a condo, I don't think it would be in South Granville.

quelle choix

Oh my. I have $800k burning a whole in my pocket, and I have capitulated. The market can only go up - what with the Olympics, and all of this wet will surely cause the available land to shrink when it dries out.

So I decided to see what was in my range. Two caught my eye as possibilities.

This one (v649911) is great because it is right on Knight St., and that will make it easy to get to Richmond and the ferries, and the airport. That is important because I like to jet-set around the world, and take leisurely vacations in the Gulf Islands. I know that it is built well too, because it is older, and all the kinks will have been worked out already.



This one (v667863) caught my eye too. It's nice and close to the Trans Canada highway which will make it handy for my ski vacations in Whistler, and the wine-tasting tours in the Okanagan. The problem is that it is tucked away on a quiet street, and all that lovely landscaping is a bit of a bore. I'm kind of turned off by the well-written features sheet though. There must be something seriously wrong with the place with all that flowery writing, and the price, it's so low! And who wants three levels in their home? All those leaves on the trees indicate that it has been on the market since last fall at least. Obviously there is something wrong with it, or it would have sold with multiple offers in this smoking market.

Most people are as concerned about where they live as the home they live in. This lovely East Hastings property fulfills both requirements perfectly. Features include 3 bdrms up, mortgage helper suite below, 4 baths, a huge main level playroom, completely private & secure backyard w/ bountiful fruit trees. All this is set in a serene family neighbourhood w/ Templeton Community Centre just a block south w/ its pool, track & park. Schools abound. Only a block north you'll find locally-renowned Donald's Market, bakeries, green grocers, coffee shops, & restaurants. Plus only minutes to downtown or the #1. A truly wonderful combination of property, location & amenities.

It's a tough choice. They are the same price ($775k). Which would you take?

pinch me

Oh me, oh my. I did a Realty Link search tonight, just to see what is up. Lotsa listings for East Van., but the range of properties in the same price range is surreal.

eg:


$725,000 on a 36x108 lot,

or,


$725,000 on a 33x110 lot.

Personally, I would rather have the first house. It is older, and most probably better built (if you can get around lead paint and lead solder in the plumbing, and the fact that it is on a very busy street - 41st Avenue.)

But the second one looks so...Mediterranean, what with the palm trees, and warm sunlight, and the coral stucco. (still, the realtors take pictures like drunken sailors on leave)

But really, what kind of choice is it at almost 3/4 of a million flipping dollars? Either one of these places will require (at 5% down):

TOTAL Monthly Payment $ 5,495
Household Income Required $ 206,064

If you go up to a 25% down payment, you would only need an income of $160,000...in Rast Vancouver... (I decided to leave that Rast Van. typo in. Somebody must be smoking a lot of weed!)

It really is not even surreal anymore, it's more like a really bad f***ing dream. So many of us expecting to see the dam break, but there is no apparent sign of that.

There are desperate attempts to avoid recession afoot, but will they work? I do not think so. I think that it will just ensnare a few more suckers, and make the fall even harder.

I have made several references to Garth Turner lately, and it has nothing to do with politics. Turner reminds me of a badger, or another member of the Family Mustelidae. He has been writing of economics for many years, and is very concerned about the RE bubble. He is promising to write more on that in the coming days. It is worth reading to see what a Member of Parliament has to say specifically on the topic.

One more thing:

This place that I have been watching for a while now, has been on the market for a solid 7 months. The price has been at $799k for about 4 months. They change the picture every once in a while to keep it fresh.



I believe that price is their break-even point. Trouble is, the carrying costs must be really biting hard. I reckon at least $20k has been paid to those costs already - net of property taxes.

finding comparables

A search confined to Renfrew Heights in East Vancouver between $200k and $900k produces but 40 listings. This has been fairly constant for a while. But there is price compression. You can buy an old place (with few redeeming features) for only $100k less than a brand new place (with a couple of illegal suites), as illustrated below. Who in their right mind would go for that? Granted, the 60 year old place is probably better constructed, but there is really no comparison. The new place is bigger, and has a spectacular view of the NS mountains, and west to downtown. The older place claims a view, but does not elaborate. Somebody dumped $50 k or so into renovations, and is asking a huge premium.$699k

$799k

The new place has been on the market for a solid 6 months, with one price reduction (from $829k, if I remember), and is due for another reduction of at least $250k if they want to sell it. The renovated old-timer needs a reduction of at least $300k. Those reductions will happen.

Finding comparables is a joke.

Addendum:

I forgot to mention that these places, and many others, are sitting empty. I think that there is a huge supply overhang in SFH as well as condo's.

sinking in seattle

(I picked this photo' because in the smaller version, the hose hanging on the left looks like a person in a green jacket standing there. That, with the trellis, reminded me of the iconic American Gothic, and it seemed kind of fitting.

And what is it with RE agents that frame pictures like drunken land-lubbers at sea in a pitching storm?)

patriotz left a link (on an earlier post about the place in New West.) to a Seattle house listed for $475k (roughly $425K CAN - grin). This is a brick house boasting 1,750 sq', and is close (relatively) to DT Seattle. I might remind you that Seattle actually has industry (Boeing, Microsoft, etc.). Your mortgage interest is tax deductible.

Check out their other listings too, it's interesting to see the reductions, and the $475K, 900 sq' Puget Sound view condo's. If Seattle is going down, so are we.

The unfortunate side effect of this sub-prime debacle (nowhere near over), and the Roman holiday that will be visited on the RE market, and further, is going to make the Depression look like a cake walk. That is part of why I wanted to see this bubble burst a long time ago. It's never so simple as it seems.

investor alert!

In my last post, I compared a house in Arbutus to a house in Killarney. I mumbled about moving 40 blocks west, and the price doubling...how about moving 4,000 kilometres east? For less?

I was just fiddling around, looking for some info. for a post that I was thinking of, and serendipited (I think I made a word up) onto this place in Kitchener, Ont.



It's a 20 unit walk-up apartment building, that appears to be fully rented, for sale @ $1.075 million. That is a bit cheaper than the Arbutus shack featured @ $1.089 million, though it does not have the prestige of that W. 16th Ave. address (snort!) The thing is, the Arbutus address is in serious need of a wrecker's ball, and another $300 - 400K to build a swish place that befits it's neighbourhood, and it would have no revenue to off-set your $8100/month mortgage (plus taxes, etc. - and don't forget the new construction...).

Here are the numbers - in case you are interested.



Now, I know that this is not apples to apples, and you would still be augmenting the payments by ~$25K/year, but if you lived in one of the apartments, you could eliminate the superintendent's and management's salaries, and you would only be down about $12K/year. You could probably make that back in appreciation (or is the place way past it's best before date?), and jack the rents up a bit, and you are on the road to riches. You would not need an income of $303 G's a year to qualify either - hell, just about anyone with a minimum-wage job could qualify.

I know that these are very different prospects, but if I was going to dump over a million bucks into a dump, it would be a dump with some income.

east to west

I had occassion to go out to UBC today, and made my route along 16th Avenue. I did not see a lot of "For Sale" signs (west of Cambie), and the few that I did see, had "SOLD" plastered on them. That struck me as interesting - as I have been seeing an ever-increasing number of signs up east of Main St., and most just sit, and sit, even with "Price Reduced" as an incentive. It seems as if the low high-end on the West Side is still selling, while the lower stratum on the East Side, are not.

Intrigued by this, I did an MLS search of Arbutus, Dunbar and the University Lands. Arbutus has nothing under $1 million, Dunbar has 2 under $1 million (in the high 800K's), and the University Lands has none under $1.1 million.

This place in Arbutus (W. 22nd Ave.) is a cool $1.089 million. A 33x120 lot with a "tear-down"? (and the realtor cannot even be bothered to take a decent photo' for that kind of money...)



So, I thought I'd look for comparables on the East Side, and found this place. (at least the agent looked through his view-finder)



Dang near identical houses on more-or-less the same sized lot, but the second house is in East Van., in Killarney - one of the more "desirable" areas in East Van. The East Van. house is larger by 100 sq' to boot, but is priced at $535K - a bit less than half the price of the Arbutus house. How can travelling 40 blocks west make a shitey shotgun shack "worth" twice as much money?

Something else that I have taken note of, is that most of the blurbs from the East Side tell about how much the house can pull in with rent. This is further indication that this market is all about speculation - never mind "a great house in a great neighbourhood, great for raising your young family". So houses are just another commodity, and as such, are just as prone to boom and bust.

Incidentally, the Killarny blurb says Easily rentable for $1,700 or more for month. Yeah, right. I'd pay $1200 on a good day, but even at $1700 - you would not come close to positive cash flow.

What a disconnect.

so, what gives?

I picked 3 houses in East Vancouver that are within 4 blocks of each other, on virtually identically sized lots - though the last house has about 400 sq. feet less in lot size.

The first house is 107 years old, and has very little going for it - other than having rental income of $1450/month. Wow! With 5% down, you will only be bleeding about $3800/month. Not to worry! Prices can only go up... Household income to buy this? $200K per annum.

The second house is a mere $11K more, on the next block east, and is 39 years old. A youngster to be sure! There is a claim of it being re-done inside and out, so this house is immediately livable, and has five bedrooms. You could probably rent it out for $2500/month, so with 5% down, you'd only bleed ~$2700/month.

The third place is 3 years old, and is situated 3 blocks east, and 2 blocks south. It is next to brand new, and is only $32K more than the little green tear-down (or is that place heritage scheduled?!). Granted, the lot is ~10% smaller, but the new place is already built, and the GST absorbed.

There is a bit of a disconnect going on here. Everybody keeps talking about how it's the land that's worth the money, but 3 almost identical lots, in the same area, are so close in price. It will surely cost more than the $38k difference in price to pay all the commissions, PTT, and to tear down and build new, so what gives?

Rare find! Completely remodelled beautiful solid house in prime Renfrew Heights. View from top floor. 2 bedrooms up, 2 bedrooms on main (master bedroom ensuite with steam bath). Downstairs with 2 separate suites (2 bedrooms & 1 bedrooms suite) for your mortgage helper. Total 4 bathrooms. House features: 2 bright skylights, all beautiful hardwood floor re-sanded 4 years ago, all new shutters & window coverings, new double glazed windows, 1 year old roof, new hot water tank, new furna ce, new designer paint, crown moulding, new toilets & faucets, new light fixtures, new patio cover, also 2 sets of laundries for your convenient. Very good rental income $1,450.00 p/m., 2 bedrooms suite is partially furnished. Big double garage.

MLS®: V653794 Finished Floor Area: 2901.0 sqft.
Property Type: House Lot Frontage: 33.0 ft.
Basement: Full Lot Depth: 120 ft.
Bedrooms: 7 Age: 107
Bathrooms: (Full:4, Half:0)
Features: Central location
View
$738,000.00

SOLID 2-Level Special with over 2,400 SqFt of space. 3 Bedrooms Up and 2.5 Bedro oms Down. Completely restored inside and out with new double-glazed vinyl window s, plumbing, metal roof, crown mouldings, laminate floor + more. Extra large covered sundeck with views! Located on a quiet tree-lined street. Easy access to transportation, schools and shopping. So clean you can just move in today! ACT FAST! This won't last.

MLS®: V666349 Finished Floor Area: 2413.0 sqft.
Property Type: House Lot Frontage: 33.06 ft.
Basement: Fully Finished Lot Depth: 119.8 ft.
Bedrooms: 5 Age: 39
Bathrooms: (Full:2, Half:0)
Features: Central location
Private setting
Recreation nearby
Shopping nearby
Drapes/Window coverings
$749,000.00

A home close to everything with a view of the North Shore Mountains. Finishing i ncludes a beautiful granite foyer and granite countertops. Room for the extended family. Enjoy barbecues on the covered deck. This home is only 3 years new!

MLS®: V658540 Finished Floor Area: 2149.0 sqft.
Property Type: House Lot Frontage: 33.0 ft.
Basement: Fully Finished Lot Depth: 114 ft.
Bedrooms: 6 Age: 3
Bathrooms: (Full:4, Half:0)
Features: Central location
Shopping nearby
View
$770,000.00

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.

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.

frothing at the fingertips

What's he so happy about? Did he get a free kite? Or is he the nephew of the Chairman?

Thanks to the pope for the cool picture! Read his rant.

Thanks to black'n'brownedout for this link.

Inflated by the Olympic spirit

THE transformation of China's capital over the past few years has been astonishing. This year the effect will be giddying...Amid an Olympics-fuelled frenzy, Beijing's economy is booming and its house prices soaring. Many fear their return to earth will be bumpy.

Ah. What me worry? You can't lose. And I'm so giddy, I can't think straight anyhow.

Olympic cities usually experience an economic surge before the games. And with under 18 months to go before the games open in Beijing, China's economy as a whole is growing nearly as fast as Beijing's: 10.7% last year compared with the capital's 12% (its eighth consecutive year in double digits). Central-government leaders worry that the pace could be reckless, but are loth (sic) to apply the brakes hard.

I'm too indolent to look up the stats for how much our economy has grown, but it seems to me that I heard that it was in the neighbourhood of 3%. That's crazy growth in Beijing!

Communist Party ... leaders will be trying to stress how much in sympathy they are with the suffering of ordinary citizens.

Oh, so solly full you! Throw the dogs a bone.

For the past two years, the central government has introduced a series of measures aimed at cooling property markets in Beijing and elsewhere. These have included new taxes on property deals and higher mortgage downpayments. Last month new restrictions were imposed on property purchases by foreigners. In Shanghai, these moves have achieved some success (diverting speculative money to the bubbling stockmarket), but not in Beijing. Last year property development still accounted for more than half of all investment in the capital.

So where will the money go now? Off-shore. Vancouver sounds good. Golden Mountain. We buy it all. It's a global frenzy of liquidity. The only bright light that I can see is that the sub-prime market is melting down, and will take a lot more down with it. It's sad that the idea of a depression can seem like a bright light isn't it?

Speculators are betting that property prices will benefit from the tightness of land supply

Oh fulak! The land shortage thing. It had to be there with the friggin' Olympics thing, didn't It? Can I even type Olympics without being sued for copy-right infringement?

Moreover, in order to keep the city clear of unsightly cranes and dust-billowing building sites during the games, Beijing has been discouraging new construction projects. This has reduced the expected supply of properties and helped to drive up prices. Last year the total floor space of new housing projects was nearly 6% less than in 2005. For poorer residents the outlook was particularly grim. The floor area of newly launched low-cost housing projects was down by nearly 57%.

I think that loathesome regime is doing better than our own loathesome regime regarding housing the poor. Slavery never really went away, but now people are proud to be mortgage slaves.

According to press reports this week, the central government recently called a special meeting to discuss ways to tame Beijing's property market. Among its suggestions was an increase in the housing supply.

Is it just me?, or does that not make sense? Just above, they were moaning about the shortage of land, but now they want to build even more. Look what happened here. Thousands of new condo's, houses and townhouses, and the market just keeps on exceeding itself.

Officials estimate that the Olympics have been contributing more than two percentage points to Beijing's annual growth since 2003. After the games, they insist, the city's new infrastructure and additional glamour (including the egg-shaped theatre, which hopes to attract international stars) will help keep the economy rolling. The flow of investment will be sustained, they say, by further infrastructure development, and by the pent-up demand for property, which will be supported by a continuing large influx of migrants from the countryside.

La la la. Guns and roses and sweet dreams in a shovel. Pent up demand, and glamourous peasants flocking to Beijing on their ways to Aurean Mountain to partake in our Aquarian Sporting Event, in the town between Pemberton and Squamish, in the year between 2009 and 2011. (That is as clear as I can be, because it seems that the season between fall and spring has been copy-righted - along with quite a few other words and place names - including that word for the distraction involving boards, cards and chance, hockey, basketball, head, etc.. The one that starts with a G, and has an A, an M, an E, and an S.)

But some observers are worried. ...two Beijing academics...said the end of the Olympics would coincide with a cyclical downturn in China's economy, exacerbating the risk of a post-Olympics slump in the capital. Beijing's Olympics-related spending of around $35 billion, they calculated, would make up more than 43% of the total for all the games since 1976. This could make the post-Olympics investment downturn all the more pronounced—especially if the speculators are busy bailing out.

No worries here though, that kinda shite does not happen here. And, there aren't that many speculators...

So, I think that we are competing with the City of Beijing for the place that everyone wants to be. And we don't have no stinking French-designed, egg-shaped theatre to attract international stars. We couldn't even give the Ford Theatre enough business to keep it going. Beijing is building a mag-lev train system for it's festival, and the network is planned country-wide. We get the RAV, lose BC Rail, and watch almost weekly derailments. Third World Class.

Excuse my cynical rant. I'm tired. I will have another rant for you in the coming days.

price compression

freako has spoken of price compression coming before the crumble, and I offer below, evidence of that in spades.

I looked at houses in Van. East, and Van. West in roughly the same price range. It's pretty ridiculous as far as I'm concerned.

$825,000.00
1021 ODLUM DR., East Vancouver

A newly renovated home in an easy going neighbourhood with quick
access downtown .The exterior features new vinyl siding and double glazed
windows. Main floor ha s living room with electric fireplace and bay window. The
kitchen is updatedwith new Maple cabinets, tile floor, countertops and new SS
appl. Main offers two full baths completely updated with soaker tubs. Wood
laminate floors thru-out, new drywall,new baseboards and crown mouldings.some
updated elec and plumb. Four bdrms p lus recrm or playroom up with 2pce bath.
Bsmt is all set for the in-laws, sep entry 4bdrms plus 1.5 baths (soaker tub),
laminate wood flooring and new SS appliances. Shared laundry. Fenced yard,
parking off lane. Close to schools. City skyline views

MLS®: V623596
Finished Floor Area: 2570.0 sqft.
Property Type: House
Lot Frontage: 33.0 ft.
Lot Depth: 95 ft.
Basement: Full
Bedrooms: 8 Age: 76
Bathrooms:
(Full:3, Half:2)

They call this a two story with basement. I call bullshite. Newly renovated is good (if you don't mind paying extra for someone else's tastes), but there are not granite countertops. The lot is pretty small too. And what the heck would the "in-laws" do with four bedrooms? Have a couple more kids?

Good luck with that.

$809,000.00
3306 PARKER ST., East Vancouver

Corner brand new 2.5 levels 2212 sqft custom built home with
unobstructed N moun tain view. 6 bdrm & rec room in basement. Downstairs
could be separate suites. H /W stairs, granite F/P, entrance hallway &
counter tops in kitchen & bathrooms. Stainless steel kitchen appliances.
2-5-10 new home warranty.

MLS®: V608622 Finished Floor Area: 2212.0
sqft.
Property Type: House
Lot Frontage: 33.0 ft.
Lot Depth: 112 ft.
Basement: Crawl
Bedrooms: 6 Age: 00
Bathrooms: (Full:5,
Half:0)

Just a short distance away, this custom-built home is offered for 16K less than the oddball on Odlum (above). It has one less bedroom, but has 5 full bathrooms. It also has a new home warranty. Unfortunately, it was custom-built to someone else's tastes. It does not have a basement either, but they call it 2 1/2 story because it has a crawlspace. I call that false advertising.

Bon Chance avec ce maison aussi.


$848,000.00
1012 W 57TH AV., Vancouver West

Lot value only! 57th and Oak. 10,106 square feet lot in a
park-like setting. House has no power! Sold as is where is.

MLS®:
V622677 Finished Floor Area: 2640.0 sqft.
Property Type: House
Lot
Frontage: 65.0 ft.
Lot Depth: 153 EFF
Basement: Part
Bedrooms: 3
Age: 56

Look at this! A ten thousand square foot lot for just 20K more than that shack on Odlum... In Van. West, no less. There is no power, so it was probably a grow-op, but 50K ought to take care of the re-fit to make it habitable. This place looks like a "good deal".



$838,000.00
7899 MONTCALM ST., Marpole Spent over $100,000 - extensively renovated brand new roof, vinyl windows, new k itchens and bathrooms all with granite counters. Upgraded electrical and plumbin g. Master bedroom with ensuite, 3 bedrooms Up, new 4-bedroom basement suite. Close to school and shopping.

MLS®: V629861 Finished Floor Area: 2250.0 sqft.
Property Type: House
Lot Frontage: 33.0 ft.
Lot Depth: 122 ft.
Basement: Fully Finished
Bedrooms: 7 Age: 49

Big deal. You spent 100K putting in granite counter tops, and you still have less than half the lot as that above. It's got revenue potential though, and it is in Van. West for "only" 13K more than the dump on Odlum. You can explain that by the slighty larger lot size though. And in case you didn't know, Everyone in the world wants to live in Vancouver, and everybody in Vancouver wants to live near The Drive. People will pay a lot for that "Bohemian" lifestyle. Who wants to live on the stodgy west side?


$834,000.00
7622 FRENCH ST,Marpole

AMAZING VALUE on Vancouver Westside! Located in Churchill High
School district, this cute bungalow features recent renovation throughout &
a 2 bdrm mortgage hel per. Huge potential for 1st-time-buyers, investors &
builders-big 6,900 sf lot. Definitely not to be missed! *Ask re: plans for 4,000
sf new home!* First showing, Agents Open Thurs Feb 15, 10-12 pm.

MLS®:
V630005 Finished Floor Area: 1906.0 sqft.
Property Type: House
Lot
Frontage: 82.0 ft.
Lot Depth: 117 ft.
Basement: Full
Bedrooms: 4
Age: 65
Bathrooms: (Full:2, Half:0)

I don't know, this looks to be a better deal than the one above. It's a more attractive house on a lot that is twice the size.

So what the heck is going on here? The city is unhinged from "fundamentals" when compared to other places, and there is a further unhinging between the West and East sides.

By the way, you can still buy hovels west of Main for less than 600K.

2 years of salary vs. 7.7 years of salary

Just a quick, cheap post to keep things going -

Regina most affordable place to buy a house: study

(CBC) - A study on the cost of buying a house in six English-speaking countries ranks Regina as the most affordable city in Canada.

In Regina, it takes the average person twice their annual salary to buy a home, according to a 2006 study recently released by the Winnipeg-based Frontier Centre for Public Policy.

The centre looked at how many years of family income it takes to buy a house in Canada, the United States, the United Kingdom, Australia, New Zealand and Ireland.

Winnipeg was tied with Quebec City for second among the 17 Canadian cities surveyed. In those cities, it takes an average of 2.5 years of salary to buy a home.

In Saskatoon, it would take 2.6 years, putting the city fourth on the Canadian list. Canada was the most affordable of the six countries. On average, citizens require only 3.2 years of annual income to purchase a home.

The study considers communities with a 3.0-year rating or smaller to be affordable.

The most affordable community of the six countries is Fort Wayne, Ind., while the least affordable area is Los Angeles and Orange County. In Canada, Vancouver, described as "severely unaffordable," came in last, taking 7.7 years of income, on average, to buy a house. link

oh, the horror

CUTE & SOLID LITTLE STARTER. New roof, only 6 years old! New gutters, new electr ical. H/W flrs, W/B F/P, walk to everything! Perfect for renovations or builders ! 2264 FERNDALE ST, Hastings, Vancouver East MLS# V615112 $479,000.00

Assessed 2007 at $437,400

How can they? Cute and solid? Perfect for renovators? Maybe with a can of gas and a good insurance policy. I can't even see it being perfect for builders. It has weird lot dimensions (49x66) - what could you build on that?

Walk to everything? You would need to - you couldn't afford to own and operate a vehicle, or buy a bus pass after making the payments on this POS.

This place has been sitting there for sale since the peak of summer with no price reductions whatsoever. Is it an absentee land-lord with an absent-minded realtor? $41,600 over assessed value?

Or,

This place is just east of Boundary Rd. (Burnaby), and you truly can walk to just about everything (Metrotown, etc.), plus, it is right across the road from Central Park - which would make for a nice walk. The lot is more than twice the size, the house is much nicer looking, and the square footage is about the same, so don't tell me that the Ferndale house price is worth it because of lot value. You would get double the lot for an extra 60K.


MLS®: V617050 Finished Floor Area: 1214.0 sqft.
Property Type: House Lot Frontage: 59.0 ft.
Basement: None Lot Depth: 134 ft.
Bedrooms: 3 Age: 82
Bathrooms: (Full:2, Half:0)
$539K

Is Vancouver worth that much more? Am I out to lunch? Or is it them?

I can't take it any more.

brain function as related to RE prices

Some may be (and have been) questioning what is so great about Vancouver (besides the balmy winters). I know that I have been questioning that myself, and decided to look up housing prices across this great land - just to see if Vancouver prices have a modicum of rationality. Nope. They don't.

Here are the average resale prices, how much they have moved (either way), and average rents in Canada's major urban centres. House prices are looked at November 2005 - November 2006, and rents are looked at October 2005 - October 2006. (Resale prices of homes are from MLS stats, and rental stats are from CMHC link)

Vancouver - average resale price - $519K (up 16.5%)
- average rent - $1,045 (up 4.4%)

Calgary - average resale price - $360K (up 36.4%)
- average rent - $960 (up 19.5%)

Edmonton - average resale price - $282K (up 42.5%)
- average rent - $808 (up 9.9%)

Regina - average resale price - $123K (up 11%)
- average rent - $619 (up 2%)

Saskatoon - average resale price - $167K (up 9.6%)
- average rent - $608 (up 4%)

Winnipeg - average resale price - $153K (up 14.8%)
- average rent - $709 (up 3.4%)

Toronto - average resale price - $355K (up 4.2%)
- average rent - $1,067 (up 1.1%)

Montreal - average resale price - $218K (up 3.2%)
- average rent - $636 (up 2.8%)

St. John, NB - average resale price - $141K (up 13.8%)
- average rent - $556 (up 2.1%)

Halifax - average resale price - $194K (down 1.2%)
- average rent - $799 (up 3.5%)

NFLD (all) - average resale price - $135K (down 3.4%)
- average rent - $635 (up 0.4%)

Talk about regional disparities. Vancouver % increases pale in comparison to Edmonton and Calgary, but in those cities, houses are still affordable. Further, all of Canada has been heading to Alberta because of the oil boom. There are very well paying jobs there. Even burger flippers and Tim Horton's workers are fetching in the neighbourhood of $20/hr, and could entertain the idea of buying their own home. In Vancouver, even the best paid (Dr's. lawyers, etc.) are hard pressed to come up with the money to buy the crappiest of places (and I include brand new 500 square foot condo's in that assessment).

Anywhere east of Alberta (with the exception of Toronto), I could buy a place pretty much outright. In some places, I could do so and have money left over for a new car, a few holidays, etc. And, Vancouver has some of the lowest median earnings in the country. In a lot of those cities, one could buy a place with 0% down, and the rent would cover the mortgage payments. Here, one would need 50% down and still fall short of the rent covering payments. We have had the hardest winter weather of any city in Canada so far too, so don't tell me about how great the winters are here. We don't even have the equipment to keep the streets free of snow and ice here. Montreal spends $50 million per year on snow removal. I would be curious to know how much ICBC will be paying out to motorists who crashed into each other on our snowy/icy streets. I'd bet that it is in the tens of millions.

So what is it about Vancouver? I think I have an idea. The soil in BC has very low levels of selenium, and hence, low levels in our food (even food from California, etc. Selenium levels fall drastically west of the Rockies). Selenium is crucial for brain function (I take supplemental selenium - so I'm ok!).

There you have it - the brains of British Columbian residents are operating in very low gear. That explains so much - poor driving habits, self-centredness, buying unaffordable real estate, the gov'ts that keep getting voted in, etc.

We are collectively brain-dead. Vegetative. Stunned.

I'm outta here!