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.

strange fruit

I was out wandering with li'l solipsist today, and noticed a lot of strange new fruit (depicted below) amongst the flowers and trees that he demands identification of.

Joe Chan (in the first picture) has had that place for sale for months. Ellie Chan joined him next door, and Winnie Lam is next to her. Two doors down, a house struggling to be completed will soon be for sale (I photoshopped its sign). Half the damn block is for sale! The Joe Chan, and the Winnie Lam both appeared to be vacant. On the block behind me, at least two places were for sale - one of which is vacant.

The new crop continued to flourish, and I could only take so many pictures. I ended with the Wong consortium when I noticed that the wee gaffer had fallen asleep in boredom. Yawn.





There is something wong with this picture (sorry, I could not resist that) - it is starting to look like the pictures we were seeing from California, etc., where everything looked to be for sale - and no buyers.

Strange fruit, come early. I predict a bitter harvest by the time the Harvest Moon rolls through the sky. Especially with the October 15th !Surprise! of revised qualification requirements for mortgages.

It is finally over.

interregnum

Just a cheap quickie of note.

The Eden Group, who canceled The Elyse project a few months ago, has now canceled Sophia at Sophia and 11th. link

The reasons were cited as financing problems, and labour problems. The project was 85% completed. Tough tanks if you bought a presale there.

The Eden Group is headed by a guy named Eden. Has he never heard of numbered companies?

li'l solipsist is having his first birthday tomorrow, so I am not sure if I will get up my smoking photoshops and post, but it will be worth checking back for.

Have a grand week-end!

how low can she go?

I've been up to my arse in alligators, hence the lack of pies.

I stole the image below from Garth Turner's blog posting Pop Heard Around The World. (don't think that he didn't lift it from somewhere) Politically, he's...well anyway, he is telling it like it is vis-a-vis the economy, and some of the comments are good too. It's kind of like wading through comments at Rob Chipman's , but there is stuff worth reading.



Look at that down slope. Pretty steep. And the timeline - aren't we "two years behind the US"?

This is it. The Wile E. Coyote moment has passed. How about that 600 point drop on the TSX today? And the 900 points off last week? That is some 12% down in seven days. My stock list is a sea of red - except for the ones that have Halts on them :[

Oil down below $90. the CAD below .97. Quebecor up shite creek in a lead colander.

Some are talking about TSX below 12,000, try below 10,000. The rout is global. Look for 8700. Then buy. Rinse. Repeat.

Oh, and house prices? How low can she go?

I know that we are immune to everything, elsewhere, but I am in Vancouver, and I'm watching my stocks go down. And I thought that I was different. It's so great to be living down a rabbit hole in The Land of Oz.

Here is some light reading at the Gloom and MarketCrash

And just to round things off -

i'm not the only one...

I could not resist, and took drachen's suggestion for the pic'. The original was intentionally boring, but maybe just a bit too much so.



I read a couple of things worth reading over at Garth Turner's blog, which I have redacted below. (some of the commentary is good too - if you can get past the masturbation)

Whatever one might think of Turner the politician, he does know a fair bit about finances.

In any case, don’t let the media fool you. Stock market stories are not about stocks. They’re about the economy. Markets, you see, are harbingers. People who trade on them spend a lot of time betting heavily on what comes next. Right now, they’re worried.

The world economy, dragged down by the States, is slowing. America has never been so in debt, or so long at war, or with such a weak currency. And on a day when realtors in Canada were trumpeting the greatest sales volume ever for residential homes...far too many buyers here could be in as much trouble as a couple of million of Americans who losing their houses. We...categorize the subprime mess as giving loans to people who did not deserve them. But...we are busy selling $400,000 homes to young couples with between 1.5%... and 5% down, and with 40-year mortgages that turn a $300,000 debt into one of $884,000 at current rates.

This is unwise. It’s gambling. Canadian banks have been handing out mortgage loans like candy... offering a zero-down option, asking them to come in with enough money only for closing costs.

No wonder Bay Street’s worried. Nobody in the world of financial securities would extend 98.5% leverage, and yet we are soothing your homebuyers into precisely that. Should the US slowdown affect our economy, which it will, buying an expensive house with no money might not look like such a great idea.

This was worth quoting too;

Like the North Star, we are a bright light for others to follow. Canada has emerged as a shining example in an economic universe of rapid change and uncertainty. We are leading the way with our tax cuts, our debt reduction and our focused and responsible spending. Our fundamentals are strong and we are well positioned to weather any sudden economic storms.
- Jim Flaherty, budget speech, October 30, 2007

“There’s reason for continuing concern about the weakening in the U.S. economy. The subprime reality … continues,” he said. “It’s broader and deeper than originally predicted and it’s reason for caution as we look forward.”
- Jim Flaherty, interviewed in National Post, January 2, 2008

In the sixty-odd days between those two comments, what happened?

The "experts don't know WTF is going on. You and I know better than the Federal Finance Minister. That's what freaks me out...

the quickening

There is a lot going on these days, despite the "roaring silence" that has been for a while. drachen linked to this video over at mohican's place. The collapse of the US dollar and economy, and perhaps US society? They are going down, and we, and a good part of the world will be going down with them.



Mike Mc sent this link from July 28, 2005 warning of a bubble in Vancouver and Victoria (thanks Mike). That was 2 1/2 years ago, and things have continued to inflate since then. It is now so out of whack that it has become like a lost chapter in Through the Looking Glass.

Today we hear that the Provincial Guv'mint is talking about a roughly 14 billion $ transit initiative. Just tack it on to our property taxes on top of the infrastructure costs for the boondoggle. I mean, Olympics.

Meanwhile, Surrey NDP MLA's are calling for Translink to roll back the latest transit fare hike.

"You can't have someone who makes $8 an hour have an increase in a fare and end up paying something like 18 per cent of their income on transportation. It's just not fair."

Too true. After coughing up 71% of income for mortgage payments, and 18% for transit, there will be a scant 11% left for food, entertainment, clothing, retirement savings, property taxes, up-keep, etc. Does anyone know if those percentages are net of tax?

Stephen Harper announced a billion dollar fund to help displaced workers in the manufacturing and forestry industries.

The rising Canadian dollar and an economic slowdown with Canada’s biggest trading partner, the U.S., has forced many mills and factories to either let workers go or shut down completely. In response, the Harper government has announced a plan that is not only ludicrous in its approach but politically underhanded as well.

I guess Stevie is worried. But a billion bucks is not going to cut it once things really get going.

The sell/list ratio over at Rob Chipman's place has gone from 200-odd % before Xmas to 30-odd %, and we are not seeing regular #'s there these days. (some might say that the Chipper is withholding because the #'s are grim. I don't buy that, but if the #'s are grim, who will be surprised - besides the greater fools?) Seasonal, or harbinger?

I had a whole bunch more interesting links, but I will not travail you with them now. The shite is hitting the fan in dribs and drabs, but it is quickening.

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

the tenant

Well, that last post was a sleeper...

Van-City Slumlords is a new blog taking on specuvestors(?) who are trying for ridiculous amounts of rent. The blogger is choked. Understandably.

I don't have much trouble with my tenancy. I have lived in the house for 7 1/2 years, and have had only 2 rent increases (in line with the RTA). Management changed a couple of years ago, and the accountant now collecting the rent tried to raise it by about 13% last winter. I told him that he had a choice between not raising the rent, and keeping us, or having to make some hefty modernizations, and good luck that the new tenants don't turn it into a grow-op. He didn't raise the rent.

I am lucky though, I have been here quite a while, so the rent was reasonable in the first place. I am glad that he didn't call my bluff though, because by all accounts, trying to rent right now is a nightmare. Amateur LL's trying to cover ridiculous mortgages with ridiculous rents on ridiculous hamster cages with ridiculous terms, and other pieces of like shite. I definitely would not buy anything. I would leave town - much as I do really like it here.

I really think that with the squeezing of tenants to cover just a part of the mortgage, the game is well nigh over. Idiots may be "happy" enough to drop 70% of take-home pay on their own abode, but there is no way on earth that people are going to pay that kind of money to rent a hell-hole. The buck stops with the tenant. That is the margin.

Check this blog out (link in sidebar). It's full of vitriol and foul language, but is a good measure of what is going to happen. At least that's what I think. The blog has video, and links that show that this is not just a local phenomenon either.

Let them eat cake indeed.

collapsing?

OK, this is anecdotal, but I wonder if it is a sign of the beginning of the end.

My "neighbour", whose property I have written about here, here, and here (and maybe a few other places), told me today that his deal to sell his house had collapsed. It seems that the RE agent (he is also an agent) who was going to buy his place for $795K, has backed out of the deal because the person that was supposed to buy her place (another realtor perhaps?), couldn't sell their place (and so on).

The price point is in the high "low end", so I wonder if this is a sign of shaky knees in the market. Finally.

I must say that I do have a certain schadenfreude about it, as I and my family have been living in a construction zone for the past 9 months. Flat tires, noise, damage to my (rented) property, etc. It is unlike me to have those types of emotions, but...

It will be interesting to see if he can flog it without losing too much money. I will keep you up to date (whether you are interested, or not), and will probably feature the monster in the curb appall series.

ADDENDUM:

So, the BoC hiked rates by a quarter point today, and the reaction was interesting. I don't know if it was a reaction, or just the normal inscrutability of the markets, but the Dow was down, TSX was down, and the dollar was down a half cent. I don't know about oil. It was interesting to me that the dollar actually went down.

The BoC is kind of stuck - with over a quarter million jobs lost in the Ontario and Quebec manufacturing sectors in the last three years (some 39,000* jobs lost just in June), while the West continues to be smoking hot. Alberta is hot on oil and gas, and BC is hot in ...construction (those Microsoft jobs are meaningless in my HO).

The housing market in the US is still in the process of shaking itself out, and I think that it is starting here.

I wonder if rates will rise again in September. I'm not sure that they will, because the East is kinda hurting, and receives more attention in these things than does the West. It's further interesting that the East has lost so much with rates low - that should have dinged the dollar a while ago, no? (presuming that it was the high dollar hurting exports)

I have a feeling that things are about to get really interesting. The bankruptcy rate is double what it was a couple of years ago, and it won't be just mortgage rates going up. How about all those HELOC's, LOC's, credit cards, etc. being hiked too.

Gotta go and pay off my credit card, and look for the best plan for my cash.



*working from memory - it might have been 31,000 jobs lost in June.

I grabbed the picture from this blog - red guy blue state - who grabbed it from somewhere else. The red guy is blogging on RE in the US, and is worth perusing.

I like the "Doh!" take on Munch's The Scream, which I have used somewhere here before.

fly like a loon

How about that dollar? It has taken wing. It is up about a half-cent today (93.17 cents US) on hints from the BoC that it will be raising the rate to keep inflation in check. We keep hitting new 30 year highs. The last time our dollar was this high, Talking Heads had just released their first album, and Stevie Wonder was "it" (I wonder how many that are buying condo's have heard of either). We were also moving into recession.

I think that the timing is pretty safe - the economy is over-heating, house prices are, um, nuts, lumber is already in the toilet, and other economies are slowing down - which will mean less demand for commodities in general. Oil fell 2.8% today as well. It has to happen sooner or later.

The Canadian dollar is at a 15 year high against the Yen, a 6 month high against the euro and is showing strength against the most traded currencies. The big banks raised mortgage rates 0.3% today as well.

What does it mean? I think that we will see housing inventory surge, sales slow markedly, increasing unemployment, less commodity sales, less tourism, and hopefully - a return to some semblance of sanity.

This excerpt from Bloomberg

Canada's Dollar Reaches 30-Year High on Hint of Rate Increase

By Kim-Mai Cutler and Haris Anwar

May 29 (Bloomberg) -- The Canadian dollar rose to a 30-year high after the central bank said it may raise borrowing costs to restrain inflation. Short-term government bond yields surged.

The Bank of Canada suggested it may raise overnight rates in the ``near term'' to curtail inflation, though it held the benchmark lending rate at 4.25 percent for an eighth meeting. It last raised borrowing costs 0.25 percentage point in May 2006. Benchmark two-year bond yields climbed the most in almost 23 months to 4.58 percent, the highest since March 2002.

``This is more hawkish than what the market was expecting,'' said Marc Levesque, chief North American strategist at TD Securities in Toronto. ``The Bank of Canada is squarely telling the market that it's going to hike and the Canadian dollar has clearly gotten a kick off the back of that.''

The central bank, departing from earlier statements describing inflation risks as balanced, said there is an ``increased risk'' that inflation will persist above the 2 percent target. The statement added that ``some increase in the target for the overnight rate may be required in the near term to bring inflation back to the target.''

Ten of 15 economists surveyed today by Bloomberg predict the central bank will raise rates at its next meeting, July 10. Last week, two of 19 forecast such an increase. (Gee, psychology can turn pretty fast...)

riot vancouver 2010 - responding to the schmolympdicks

I received this unsolicited e-mail yesterday. It is a press release from Vancouver's Only magazine (formerly Terminal City). I did not object too much to the "spam" - some spam is ok, and I liked the subversive tone of this one. They are offering up a free "Riot 2010" countdown widget as antithesis to the Schlonglimpdicks' countdown crock o' shite.

With regrets from them (elitist schmoes) the widget only works on Mac.

Feel free to spam Chuck Ansbacher though, he did include his e-mail address. Be nice - it is a fairly cool on-line mag. And, they are pissed off with the Schmo-limpdicks too. I am hearing more and more disgust about that every day. I'm gonna finally pop, and write a manifesto on that some day.

The Only Magazine Riot Vancouver 2010 Widget

Riots are nothing new to the Rainy City. Take, for example, the Victory Square "work camp" riot of 1935, the Gastown pot riots of the '60s, the Guns 'n Roses riot of 2002, and, of course, the Stanley Cup riots of '94. On July 2, 2003, Vancouver won the bid to host the 2010 Olympic Winter Games. An honour indeed, the city responded with celebration, but also with groans. Anyone honest with themselves admitted there were problems to overcome, but it was thought that these were just the growing pains of a developing city on the verge of becoming "world class." But Vancouver, a city with the most poverty stricken postal code in North America, could only celebrate for so long. It turns out five rings aren't enough to hold this glass city together. The cost of the Games are vastly over budget and diverting money from social programs. There is a constant worry the mountains won't see the kind of snowfall necessary for an Olympic host. Homelessness has increased and is projected to continue. Some citizens want answers. None have been given. Despite continued protests and lucid studies outlining how the Games are damaging the city, the Vancouver Olympics Committee decided to celebrate some more recently. They built a nice digital clock to countdown the remaining three years until the Opening Ceremonies. You may have noticed this monolithic eyesore, seemingly dropped from the sky onto the lawn of the Vancouver Art Gallery, missing only a crowd of curious apes and a lobbed bone to complete the scene. There it sits, ticking away in its clean, tasteful glass case under the watchful eye of a hired security guard. Ticking along as the city surrounding it succumbs to the pressures of transition. Building construction rumbles from nearly every corner, marginalised citizens are turned out onto the streets in lucrative grabs for real estate, and money is being exchanged at a drunken pace. Under these circumstances, the countdown and the clock have many symbolic meanings, and Only Magazine sees a situation ripe for public opinion to boil over the edges of decency. Of course, we would never incite or even encourage anyone to riot. If you hadn't thought of it before now you're probably not going to be one of the people there. However, history has taught us that if (when) there is a civil disobedience, it won't be the issues that are blamed, and it won't be all the poor decisions made leading up to the Opening Ceremonies either. So if the police need a scapegoat, Only Magazine volunteers for the job. We love attention. In the spirit of being subversive without actually having to leave your computer, Only Magazine gives you a Widget so you can smash the state and read the Google at the same time. Dissent from your laptop. The Only Magazine Riot Vancouver 2010 Widget.*

Signed,
Only Magazine

*Seriously, Only Magazine does not endorse rioting.

- Official Press Release -
-- Chuck Ansbacher
Managing Editor
Only Magazine
#611 142 - 757 West Hastings
Vancouver, BC
V6C 1A1
onlymagazine.ca

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.

the end

Wow. The commodity markets, the dollar, are taking some lumps these last couple of days.

Oil down over $5 in the last two days. That is about 9 1/2% Copper down. Precious metals down. Winter doldrums? Profit taking? It's hard to say - I'm not a market analyst type, but if oil continues to go down, that would likely slow down Alberta, and by extension, BC. Less Alberta oil money in the BC RE market (if that ever had anything to do with prices...), and if the lay-offs start in the oil patch, there might be a few "investors" that need to dump their holdings in a hurry. Could this be one of the nails in RE's coffin?, or at least a staggering blow to the head? Is the global economy fatigued enough that we might be seeing the beginning of the global recession that a lot of us are muttering about? Or, does it just mean that the mild temperatures are causing a diminished demand for oil? What about copper and other metals?

I'm thinking that a "perfect storm" is brewing.

Thoughts?

it's (almost) over

I believe that it is all over, but for the tears.

I know we have the mountains. I know we have great weather (sometimes, anyhow). I know the Olympics are coming (are you as fatigued by the refrain as I am?).

It is different this time, of that there is little doubt. Never before has Vancouver seen such a dramatic increase in housing prices, in so short a time.

Never before has BC had such a negative savings rate (not in my lifetime anyhow).

Never before has the affordibility in Vancouver been so low.

Never before have there been so many amateur investors to drive up prices with such dreams of plump sugar plums dancing in their heads.

I am going by my gut here, but I do not think that we have ever seen price declines through the summer and fall - followed by continued increases in the spring, and I don't think that it will happen this time. Of course, I may be wrong - I thought that last spring would see a return to the trusty fundamentals, and I was wrong. We all were. Not this time though.

RET has dwindled to a couple of posts a week. Gone are the hard-headed bulls, and the bears are so breathlessly awaiting the reverse trend, that they have no breath to speak any more.

The farmer has locked the bulls in the barn for the winter, and the bears are sniffing about at the silage left behind, hoping for some food soon. It's coming.

I'm going to go out on a limb, and predict 25% declines in prices by this time next year, but it won't be over until we see 40% - 50% declines. Cocky, ain't I?

exodus - a gutted city

It's been all over the news lately(?), but as usual, it's over-simplified, but I think that this is a harbinger of things to come.

There are all kinds of trumpetings about the economy and such, but really, it's the same old guys making the cash while the populace at large pays. Ill-conceived mega projects, Gateway this and twin your P3 that. Sell that and surplus this. Double down and spin the wheel. The VSE never went away (except for poor ol' Murray Pezzim R.I.P.)

The smart money is getting the hell out of Dodge, and has been since before this housing market got going. There was a write up in BC Business about it exerpted below.

Our economy is booming. So why are head offices leaving and taking jobs with them?

...the head-office picture in Greater Vancouver is bleak. ...in decline for more than a decade, both in number of headquarters and, more importantly, in the number of jobs ...
In metropolitan Vancouver, head-office employment also declined by 29 per cent 1999-2005.

These are the types of jobs that make a "world-class city" - as opposed to a vacation destination.

...over the same time period, those employment numbers climbed by a whopping 64.4 per cent in Calgary, 19.1 per cent in Toronto, 15.5 per cent in Edmonton and 28.4 per cent in Ottawa.

So why are people still flocking to Vancouver? Residential and Olympic construction. It sure isn't the training wage.

Should we care? Life is good, the provincial economy is booming (for now, anyway), employment levels have never been higher and the Olympics are coming. Do we really need more head offices? PricewaterhouseCoopers senior tax manager Ian Heine, says yes, unequivocally.

The Olympics are coming! The Olympics are coming! Strangely, that refrain sounds identical to the sky is falling! in my addled brain. And life is good. Cool. I'm feeling better now. I did like the caveat (for now, anyway). Was the writer being cheeky?


Greater Vancouver has often been criticized for relying too heavily on its natural attributes as the main draw...

Rightly so in my view. Everyone knows that this is the greatest place on Earth, we just are not sure why.

“People come here...And they finally get our culture: they see all of Vancouver living the lifestyle that we’re promoting.”

Just what is our culture? Coffee on Denman? Shopping on Robson? Admiring our friends' granite counter tops? Sailing in the morning, golfing in the afternoon, and skiing at night? Who does that? Our culture is a brand that has been foisted upon us. Most residents of the city can't even see the mountains - even on a clear day.

...there are financial and logistical challenges to the Vancouver headquarters.

"Distance from the big eastern consumer base, the length of flights to the east and the eventual need for an eastern warehouse, and the need for an eastern office that could outgrow the Vancouver office"


Those same challenges apply to all the rich foreigners and retirees that are rushing here too. It has been asserted, by others before, that retirees are going to want to be close to their families, so why would they be interested in moving here. It's all a bunch of hooey.

Vancouver started out as a mill town out on the frontier, and it is still very much like that.

It's just like Oz.

gotta trust in something

It looks like things are getting more dicey for the US economy. What could it mean for us? And particularly, for our RE market? Century 21 Canada president Don Lawby doesn't think it's an issue. He figures that the BC economy is more diverse, and has grown faster than the US economy.

What about US investment in our real estate? Will Americans start dumping their empty condo's, etc. in BC as their payments become more onerous? Their profit-taking will be more profitable in a sense, but will buy them less French wine and Mercedes Benzes. Will American developers continue to build into a flagging economy (just to - y'know - be philanthropic), and keep the economy going?

The US is about to get even more protectionist, and the newly invigourated Democrats are pushing for trade sanctions against China. How will China respond to that? Dump more dollars? It seems as if the horse is already out of the barn.

There will be much less demand for oil, lumber, copper, etc. - all we really have besides tourism, and American tourists will stop coming as their dollar sinks, and the passport requirements kick in.

excerpted from The LA Times -

Another issue dogging the dollar is concern that China and other countries that hold trillions of dollars' worth of U.S. securities may increasingly seek to trim those assets in favor of non-dollar-denominated securities.

"The Chinese have been making noises in recent weeks about diversifying their holdings of foreign reserves," Kasriel noted. A People's Bank of China senior official repeated that theme in comments circulated Friday.

The momentum of a falling dollar could feed on itself because each decline reduces the value of foreigners' remaining U.S. assets.

The risk of a sell-off of U.S. securities by China has been a persistent concern for Wall Street in recent years, but it may be taking on more urgency now that the Democratic Party is about to regain control of Congress, analysts said. Some Democratic leaders are pushing for trade sanctions against China to shrink that country's massive trade surplus with the U.S.
link

In other financial news;

China is considering launching a live pig futures market to stabilize pig prices...

That's comforting.

supply and demand

An article in The Sun yesterday gave up this information;

Supply has outpaced demand in some areas of Greater Vancouver, leading to 'a raised level of uncertainty for both the resale and new home market,' according to MPC Intelligence, which tracks the B.C. new housing market. Here's a look at what came into the market in the 61 days from Sept. 1 to Oct. 31, and what happened to that inventory.

Condominiums

Total: 3,082

Sold: 1,788

Unsold: 1,294

% unsold: 42%

Townhomes

Total: 710

Sold: 438

Unsold: 272

% unsold: 38%

Single Family

Total: 41

Sold: 9

Unsold: 32

% unsold: 78%

This is interesting, and begs the question - is this inventory languishing because -

a) supply has overridden demand in a physical sense? i.e. are there not enough people to fill the units?

b) prices have so far out-stripped reason that people are just not willing to pay that much?

C) the autumn slump that has been observed forever?

I am curious as to why townhomes have the smallest amount of unsold inventory. Did a lot of people buy up from condo's, but can't yet buy up to SFH? Are people less inclined to that product in general?

Are these numbers a harbinger of what's coming? Are the bulls too tired to run anymore? Will the bears wake up hungry in the spring?

I have no idea, but I am encouraged none-the-less.