alliteration under the volcano

Vesuvius 1822

Wow, the shite is hitting the fan. Lots of talk about 1929, global depression, doom, gloom, and despair - and that is just the MSM! The commentary runs from the apoplectic, to the apocalyptic, to the apathetic, to the apologetic - and that is just the A's! I thought that I ought to add to the mix with some brimstone, bitter nettle, bone heads, and just a little braying.

Speaking of boneheads;



The picture is from this article - a nice synopsis, and I redact;

Let's take a look at America 's...entire financial system...in the process of blowing up...over $500 billion in bank losses, with over $1 trillion more to come. Over one dozen banks have failed, with hundreds on deck. A handful of large hedge funds have blown up, with hundreds more on the way...over $1 trillion has been transferred from the Fed to the banking cartel...estimate another $1.5 trillion will be needed to maintain liquidity as banks de-leverage over the next few years. Unemployment is now over 6% and inflation is over 5%, even with Washington 's manipulation of the data. Virtually every metric in the housing market is at multi-decade lows, except for foreclosures which are hitting new highs.

Taxpayers are on the hook for billions of dollars of potentially worthless debt held by Fannie and Freddie. It's now official. America 's free market economy is really a socialist system for corporations. One could argue this to be a form of Fascism. My best estimate for losses due to the Fannie and Freddie taxpayer bailout are between $200 to $500 billion. The worst case scenario would be $800 billion. When Superman fails to show up, Washington might consider giving David Copperfield a call. Get the popcorn ready.

Those clowns up there are the architects of all of this, but they won't be affected by it, they have made out like foxes in a hen house. My rough estimate of the debt that 330-odd million people just accrued (whether they wanted to, or not) is tens of thousands of dollars each, and that does not count the wars, and such. All to bail out banks, mortgage companies, and insurance companies whose directors and CEO's collected tens of millions of dollars in bonuses. AIG alone cost $2575 per man, woman and child. Sounds fair to me! Everybody loves an insurance company.

And yet more clowns, chimps, chumps, cheats, whatever (I promise not to go through the whole alphabet).

The mental midget. The picture says it all - RESPONSIBLE. Responsible for 0%/40 year mortgages, responsible for blowing the surplus, and very likely for putting the gov't into a deficit situation. Responsible for leaving a $5-6 billion deficit in Ontario after just one term as provincial finance minister. He is no economist, or financier, he is a lawyer. Let us not see the likes of him return to the finance portfolio.



Heil Harpler. (complete with lip-stick on the pig)



What an unfortunate (if defining) photograph of this clown. I find it hard to believe that he has pulled the wool over so many people's eyes (as evidenced by poll numbers). Have Canadians not been paying attention to the chimps in the first picture these last 8 years? I find that to be very disconcerting, though I ought not to be surprised; after all, so many Canadians drank the RE kool-aid, I really ought to have lower expectations.


The picture above leads right into the photoshop below, though instead of looking like an evil dictator, Harpler ends up looking more like the incompetent Sgt. Shultz from Hogan's Heroes. I really hope that people wake up in the next 3.5 weeks, and get rid of this prick for good.



Things are not looking so good. I predicted back in January that we would see the TSX back at 8,700 before this is all over- I am now revising that to below 7,000. I also predicted that we were heading to a depression (in 2005), and now the MSM is predicting the same thing (that is my braying).

Good luck everyone, I hope that you don't have debt, and do have lots of savings, you are going to need it.

More reads -

The Ultimate Wall Street Nightmare

more gloom

unintended consequences

Vancouver leads fall in house prices

So much to write about, and so little time...

bing bang and the burning ring of fire

Yesterday, they fired up the HADRON super collider in Switzerland. There had been some consternation that they might create a black hole that would swallow up the Earth, and all of us with it. Reportedly, no black hole was created, and so we are all safe...except for RE "investors".

Urban real estate values set to plunge, UBC expert forecasts. Oops. I went down the memory hole because I thought that I remembered that Tsur Somerville was a pumper, in denial. I was wrong about that, this is what I found him saying in 2005:

"It is an issue for the person who says real estate is great and I'm selling all my stocks and buying real estate in the Lower Mainland," said Somerville. "For that person, it's a problem."

And while Somerville is reluctant to make exact predictions about when Vancouver's hot housing market might begin to cool, he can't help himself from making just one.

"You'll know when the market has hit its peak on the day that I buy a house," he said.

I wonder if Somerville has bought, he must have, because we have peaked, and are heading down into a dark hole, perhaps even a Black Hole.

The stock markets are flopping around like a beached cod fish; TSX down almost 1500 points in a week, and then bouncing up by 350 points yesterday. Can you spell v-o-l-a-t-i-l-e? Oil still sinking, even as OPEC cuts production. I guess demand for oil is like demand for housing - fickle, and not nearly as strong as people have claimed. I read again yesterday that the oil prices were driven up by speculators. Hmm. Sounds familiar. I don't know about you, but it irks me that speculators make piles of cash off of our backs, and we pay for it. What a tangled web. Burn babies, burn.

Politics this week? That could be a whole, new blog, but it has been fascinating. I can't wait for the 15th of October, just please, please, let us not have a majority Conservative government...though that would accelerate a return to "fundamentals" (and that is an intended pun, even if it is facile).

I heard talk on CBC yesterday of condohype, and they were quite tickled by our friend's writings - describing them as "very funny". Congratulations on receiving such recognition, condohype! I did not catch the whole piece unfortunately (li'l solipsist keeps me hopping, and has a voice larger than the CBC's). It is great to hear the MSM finally helping us bring down the market.

Things have been spotty here vis-a-vis ideas, and posting, and I sense that I am gradually fading away. I hope to be here still to remark on the trough, and to write about a purchase, and the renovations that will ensue, but we will see - unless, of course, the Hadron collider did create a black hole that they have not reported (don't want to panic anyone!), and we are all just goo on a shrinking planet. Kind of the opposite of "making more land"...

a buyers' market

Yay! It's a buyers' market!

At least, that is what was breathlessly reported on the CBC Vancouver news at 11:00 PM. The Reasoning is a 43% decrease in sales (timeline not provided), and an 18% increase in listings (ditto, and Huh? It must have been an 80% increase in listings...?). But, it was said, 'prices are still rising, just not at the same pace as recent years.'

Well golly! Colour me finicky, but as far as I'm concerned, the market for any sane buyer will be when the 50% haircut is realized.

And that nice family looks so happy...

side note - I read today (from an unverified authority) that natural gas prices are going to go up by 35% by winter. And that is not going to be due to any carbon tax. Oil hit $145/bbl today.

Energy prices are going to kill the RE market, and the economies of the world. The big shakedown is on. Banks collapsing in the US.

And what would inflation be right about now? 2%? Snicker.

Oh my. If video killed the radio star...

the rapture

(or, signs of the end times)



Yeah, I say unto You, my Brethren and Sistren, Ye True Believers,

The Rapture is upon Us, and I have seen the Signs. The End is nigh. Tremble, and feel The Rapture. Witness the Apocalypse.

(*I hope that any perceived heresy is forgiven in the spirit of poetic license.)

So, what are the signs?

1) The Globular and Morons had an article last Friday in which they dragged out a scenario of a couple who bought five years ago, and how they won the bidding war.

When Frances Fitzgerald and Sean Deasy searched for their first home in the up-and-coming Leslieville neighbourhood five years ago, they were not aware that properties were often priced below market value to attract a large group of potential buyers.

The piece goes on to recommend bidding at least $10k above asking, without conditions, and a large deposit in the form of a certified cheque. For every offer on the property that you know of, add $10K to your own.

'"My motto is that if you outbid the next guy by $10,000, then you haven't overpaid."'

Did the Globular writer not know that sales in T.O. are off by 26%, and that the Ontario economy is tanking? Oh. Yes. Right. They do know that, but they are trying to suck the last dollars out of the pockets of fools - at the behest of their RE advertising clients - by dragging out very old news. What a bunch of crap.

2) The Pope (and some of his readers) caught the Vancouver Sun deleting (at first) all the negative comments on a bullshite article about the top 15 real estate myths and realities. digi wrested the archives from Google, and posted them in the pope's forum. It's a laugh, in a twisted kind of way. The spin is getting desperate.

3) Statscan released a report (as reported on CBC, and filtered by my memory) that said between 1980-2005, the top wage earners in Canada saw their wages increase by 16%. Middle earners stagnated, and lower earners lost 20% (adjusted for inflation).

And how about those rich immigrants? In 1980, they earned 85 cents for every dollar a Canadian born worker did. Well, there was all sorts of hullabaloo over the years about pay equity and such, but by 2005 male immigrants were down to 65 cents, and female immigrants were down to 56 cents for every dollar a Canadian raised worker earned.

Over all this time, housing has risen considerably.

4) Paul B. has inventory reported at over 15,000, and Rob Chipman reports over 14,000. Chipman has also been reporting a sales/list in the low 40% range a fair bit lately (by my restricted reading).

Oh yeah, and there are a lot of motivated sellers and price reductions from what I see.

I feel a mighty wind blowing, but I foresee little joy for us common folks in the near future. The gas prices must be killing those who were "priced out" to the valley. By the time the Liberals stick us with 2.8 cents a litre more in July, they might have been just as well off to buy in Vancouver - especially if they put a dollar value to the commute time.

It's come undone.

Got ammo?

Blogging the Apocalypse since 2006

fool on the hill

the pope already wrote about Garth Turner's new book: Greater Fool - the troubled future of real estate, and there is a blog that goes with it. He did a post on Vancouver (you have to check it out), and I was compelled to reproduce some of his commentary here.

I own a downtown [westend] Vancouver condo in a very good building within 3 blocks of the seawall and many other amenities. At 750 sq ft. it is pefect for a young couple or retirees. The market value is currently about 440K and I have about 110K equity. Is this type of property going to be affected to the same degree as other properties? Would you advise to sell now and wait out the coming crash?
Thank you in advance,
Al

You have a condo the size of my garage, worth $440,000, with condo fees, property taxes and other carrying costs, and you ask if this is a solid long-term investment in an over-valued market teetering at the tipping point of unaffordability? Are you serious?

This is exactly the kind of unit which has an uncertain future since there are scads of competing condos in the area, and a limited universe of “young couples or retirees” able or silly enough to buy one of them. Unless your unit is unique, with a full water view or the latest in amenities, or on the trendiest block, then there’s no reason to believe it will escape the coming correction in Vancouver prices. Get used to it. Or get out.

What is remarkable, is that Turner is an MP in Ottawa, and is quite vocal about the impending downturn in the economy, and the concomitant RE melt-down.

Mr. Turner is best known (lately) for being kicked out of the Conservative party by Herr Harper for being...too vocal. He sat as an Independent for a while, and since joined with the Liberals. He also was an MP in the short-lived Kim Campbell gov't (hey - she's from Vancouver) after losing a bid for the PC leadership to Ms. Campbell. He had a regular column in the Toronto Sun, and has written numerous articles published in other major Canadian daily newspapers.

Turner also has a political blog (link at Greater Fool), that is filled with mostly tedious comments, and Turner's reportage of events on Parliament Hill. Mr. Turner is a great advocate of Mr. Turner. Vexatious, and often vituperative, but both of his blogs are worth checking out.

I just like him because Charles McVety despises him.

on the ball? or, the sky is falling

I read this commentary on the MSM (our favourite, biased hobby horse) over at the Republic. The last line says much.

So what happened?

Headline in The Globe and Mail, Monday December 3, 2007: “Chevez suffers stinging referendum defeat.”

Headline in The National Post, Monday December 3, 2007: “Chevez heading to referendum win.”

Headline in The Vancouver Sun, Monday December 3, 2007: “Chevez concedes defeat in Venezuelan referendum.”

Headline in The Wall Street Journal, Monday December 3, 2007: “Chevez headed for victory in Venezuela, exit polls show.”

Headline in The New York Times, Monday December 3, 2007: “For Venezuela, tensions mount with close vote.”

Surely a case of corporate media telling the story they want you to hear before telling the story that was.

page link

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 grab bag # 7

Illegal tree removal costly for local realtor (redacted)

By Cheryl Rossi-Staff writer

A local realtor will have to pay $205,000 for the removal of 72 trees from three adjacent Point Grey properties.

Paulo Leung of Regent Park Realty pleaded guilty to 72 counts of tree removal without a permit and was fined $205,000, or $2,850 per tree, May 10.

Rosy Palace Investments, which owns the multi-million dollar Belmont Avenue properties, was found not guilty.

In November 2005, neighbours called the city to complain that 82 Douglas fir, holly, maple, weeping willow and fruit trees had been removed from the lots that sit above Spanish Banks and edge the University Endowment Lands.

"The surprising thing was that the complaints didn't come until the job was done," Jackson said.

The three properties were listed for sale at $14.8 million at the time the trees were removed.

Following a police investigation, the owner and realtor were charged with 82 counts under the city's private property tree bylaw.

The city, Greater Vancouver Regional District and Department of Fisheries and Oceans were left wondering how the clearcut would affect the stability of the nearby slopes and the salmon-bearing Spanish Bank Creek.

"The one comment that was made on this was that the amount paid exceeded the [realtor's] commission in the sale, so I thought that was interesting," Jackson said.

Leung continues to work for Regent Park Realty. He did not want to comment on the case. (from the Courier)

Also from the Courier, this letter:

Condo dweller living good life with clenched teeth

To the editor:
Re: "Centrepiece bowl of Granny Smith apples essential part of urban lifestyle," May 16.

Finally someone has said it. With humour and tongue planted firmly in cheek, Michael Kissinger has shone a light on the murkier aspects of developers manufacturing reality while marketers gleefully, albeit unimaginatively, sell the illusion.

Living in high-priced ghettos is even more laughable than considering apples in a bowl as the enticement. The hilarity of materials advertised in glossy portfolios, substituted by inferior products, rock bottom standards of construction and finishing is ever so amusing. For the novice to the pushy condominium concept of existence, please know that the vision of warranty inspectors will see no defects. Lilliputian-sized spaces that cannot accommodate furniture are augmented by the laughable absence of storage space.

I also enjoy the comedy of square footage that includes the balcony in the price point. Since marketing has become a euphemism for deceiving, living in a condominium in Vancouver is a clenched-teeth smile. Yes indeed, I'm living the life.

A. Gould
Vancouver

Could'na said it better myself...

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.

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.

architecture

I read a good article by Trevor Boddy at the Gossiping Mavens about the award-winning ROAR-one on W. 10th Ave. I really ought to stop having fun with their name, as I get so much material from them. To give them some credit, there is an air of bearishness with them these days (despite the major faux pas that VHB wrote about today). Some exerpts are below, but the article is worth a read.

It will take some time to assimilate the past year's key shifts in how British Columbians build and live in new housing. One fact is crystal clear: by almost any statistical or financial measure, the peak of the housing boom has passed.

That is bearish. When did they change the tune?

The demand for fee-simple boxes in space has been so hot since the mid-1990s that the condominium apartment started to resemble a generic commodity — an undifferentiated substance like refined zinc or hog bellies, ripe for speculation.

Because condos sold and re-sold so easily through this period, there was little financial encouragement for developers to invest in better design or include features intended for long life, rather than instant curb appeal.

Boddy does go on to say that things have changed, but I don't think they have that much. There are certainly bold moves - like The "W", but I see the sea of green glass downtown as pretty generic.

Don't forget the not-generic McCondo's though. Some changes are not necessarily for the better. The McCondo's look better from the street, but I wouldn't want to live in one.

If I did have to live in a condo, I would pick something like the penthouse at Roar-one. 1961 sq. ft. for $1,400K. There are also 850 sq. ft. studios for ~ $500K. Still way too pricy, but it seems like a different philosophy altogether, with more European ideals (though the developers are Columbian. I wonder if that is coca money washing itself clean in the fresh rains of Point Grey...).

Boddy goes on...

A number of features make the resulting 10-unit building ...appropriate for families, rare because Vancouver's condo industry tends to direct its all-new product at speculators, young couples and retirees.

His closing words -

I hope mayor Sam Sullivan and councillors who support his EcoDensity Initiative take a tour of ROAR soon, as there is hardly a better example in this city of a building that combines design innovation with livable Green features. While there, they should talk to co-designer Oliver Lang, who says that ROAR could not be built with the recently-revised C-2 zoning. “We were one of the last projects built under the old rules,” says the house-proud Mr. Lang. “The revised rules are supposed to temper impact on neighbours, but they will make courtyard buildings all-but-impossible — we should be increasing building heights along arterials, not reducing them.”

I'm all for densification, but let's do it right.

the courtyard at ROAR

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

the grab bag #3

I'm just grabbing lines and more that I have come across having some relevance to my notions.

Regarding the MSM - and marketing (one of my biggest peeves!), I came across these lines on Discover Vancouver Forum (by way of RE Talks) - in reference to a recent Bollywood screening. An (apparently) East Indian girl wrote about how "white" people outnumbered "EI" people, and wondered why. Bollywood and White Folks was the thread.

El Duce Posted - 1/20/2007 4:57:16 PM
--------------------------------------------------------------------------------
It's trendy right now, and we live in the biggest bandwagon town on the planet. There's been a lot of mainstream press on Bollywood in the last year or so.

Trendy. Like dot com and NorTel stocks, beanie babies, granite, and investment properties.

I think there is a "bubble" of people looking for new experiences.

This nugget from The Republic goes well with my
posts about RE opportunities on the Moon.

I am looking at it as a business investment, but the ultimate dream is to go and live there, without the baggage of the past. I’d like to open the first Israeli restaurant.

Tsiki Nasftaly, Israeli computer programmer, who bought a square kl of land on the moon slated for future settlement

And you thought I was guffin'.

And this, also from The Republic, regarding the expansion of the aquarium at Stanley Park. It catches a few things of interest to me - including a lack of public consultation, and the main industry in Vancouver - tourism. No mention of baristas and burger flippers (not to mention condo flippers), but I think they got a few things right.

I wonder if Kirk and Company asked Vancouverites if they'd favour their taxes going to subsidize a tourist-related service that was too expensive for many of them to attend.

Public subsidies, private profits

With an international reputation, about 750,000 paying customers in 2005, and an income of around $24 million, the Aquarium is an essential part of Vancouver's tourism-industrial complex. As Vancouver has evolved into a resort city, its primary industry is tourism. The only rival to the tourism complex is the real estate development industry, and in many ways they are related (many of the largest real estate investments are simultaneously investments in tourist related projects, e.g., the new "Shangri-La" investment downtown, among many others). There are massive public subsidies to the tourism industry in the form of government grants to the Canada line, designed to transfer tourists from the airport to downtown; the Convention Centre, designed to attract large business groups to Vancouver; and, of course, the underwriting of the 2010 Games.

I have not gone into my rant about the Olympics, and I don't think there is much point. I'm preaching to the choir here, so to speak.

And from Mohican's blog - something that we are all thinking, I think.

dingus said...
Great post, great blog. A great evolution from the housing blogs for those that have been around and around on the discussions there on the lack of value in that market and are trying to figure out what to do with funds they have if they don't have a mortgage to pay down.

I can only make so many crappy jokes, I'm not into whining, so I've been thinking of where to go from here. I can't even begin to imagine what will transpire. Over the last year, it seems like all bets are off (except the one that freako won over at VHB).

I have a growing feeling that things are going to unwind quickly. I thought that a year and a half ago, but I am reminded of hunters' anecdotes of making heart shots, and the prey continuing to run - not realizing that it was already demised. A chicken without it's head is another analogy.

Beware the Ides of March?

Finally, looking at Rob Chipman's numbers, it is starting to look much more like a buyers' market. But we can guess and guess and guess until spring. We will have a better idea then.

down the memory hole! the bliss of anonymity.

Well, I wasn't sure that I would get to post today, but I ended up reading something of interest, and, well, ...

I'm going to exerpt a few things that jumped out at me.

Forecasting is hardly an exact science.

Many professional watchers were just as surprised as the rest of us by last year's sizzling housing market performance.

...preliminary numbers put out by The Real Estate Board of Greater Vancouver for 2006.


So what can we expect for 2007?

Three experts who watch the local real estate market very closely...predicted that housing prices will go up again this year but only by 8% or less.

Seems that they haven't noticed the declines and low sell/list numbers yet. And come on - only 8%? That is still double the historical, long-term YOY gains.

Home sales are decreasing and it is taking longer to sell. Why?

Errm, maybe this has something to do with it -

The Royal Bank of Canada released its Housing Affordability Index in December and not surprisingly, Vancouver has the highest index in the country. It now takes 75% of "median pre-tax household income...
" Unless people have a huge increase in earnings, it's going to be difficult for people to step and pay more."

I think that they may have been doing some reading over at VHB. That same argument has been made there for the last year or so.

...interest rates dropped and buyers found they could carry bigger mortgages for less.

Until the rates go up, and the value of their asset falls. Ooops.

Builders scrambled to meet the demand and now a lot of that pent-up demand has been met.

And more, I'm sure. But the "pent-up demand" part kind of stumps me. I believe "instilled (by marketing) demand" would be a more accurate turn of phrase.

Affordability is making it increasingly difficult to pass on...costs to consumers.

On balance, there is still enough of a demand to push up prices slightly. Canada Mortgage and Housing Corporation is predicting a 7% increase on average. It says demand will be fueled by a strong provincial economy, increasing wages and an additional 45,300 people moving here.

Well, it wasn't Cam who said that. I think he may have left his cue cards in his desk for his successor.

...a more balanced market will discourage speculators from buying up several pre-sale apartments at a time, hoping to flip them for a quick profit once they are built. She also says the days of lineups and sellouts of condos may be behind us.

That is so 2006. Do you smell coffee? Good Morning!

There are plenty of others who are not as optimistic for 2007. Discussions in local housing market blogs predict sharp price decreases for the year ahead, although some writers admit their predictions for 2006 were far too pessimistic.

OK! OK! Mea culpa X 3. (smug bastidges)

Should you buy if you can afford it? Both Hennigar and Pastrick say the long term prospects look good for real estate, barring any unforeseen shocks. Short term buying and selling do not make sense however, if prices only go up 6 or 7%, that might not be enough to cover your taxes, real estate and legal fees.

I dunno. Is that bearish? Or just non-commital? I think the latter. The MSM still does not want to stick it's collective neck out too far, it seems. Can't blame them, I guess. Relative anonymity makes that much easier to do. I'm calling for -17% to -23% by September (any of my earlier predictions are as meaningless as this one).

If worse comes to worse, I can just delete this whole blog and disappear down the memory hole!

The article exerpted above can be read in it's entirety at the CBC link up top.

called home

I have heard and seen a lot of talk recently of how Vancouver has changed so much for the worse, and that, coupled with the staggering costs of living here, is compelling people to, at least think of, other environs. I was at a dinner last night where all present voiced that opinion. One is selling her house and looking elsewhere.

I came upon the article below, and a few lines really jumped out at me. I have bolded the type on those. The one that rang a bell the loudest for me was - They're considering to move here, because their lifestyle has changed so much they don't recognize themselves

Maritimers in Alberta seek jobs back home

(CBC) - An advertising message suggesting homesick Maritimers in Alberta return home has resulted in thousands of inquiries about East Coast jobs.

The message has also attracted the attention of some Albertans who have never been to the Maritimes, something Nadeau didn't expect.

"They're considering to move here, because their lifestyle has changed so much they don't recognize themselves," he said.

The Nova Scotia government is hoping to capitalize on that.

Faced with a shortage of skilled workers and a tightening labour pool, the government has launched a marketing campaign targeting Nova Scotians living in Calgary.

The campaign includes newspaper ads and billboards with slogans like "Buy a home or two" and "Calgary is a nice place to visit."
(exerpted from here)

I expect that they may start advertising here next.

EDIT

A piece in last night's news talked of how Saskatoon is also advertising for people to come back from Alberta, and some are. One couple sold their place in Calgary and returned. They managed to pay off all of their student and car loans, and have a new house in Saskatoon with no mortgage. They like their life much better now.

clippings

I am posting some clippings from The Republic of East Vancouver newspaper that reflect some of my feelings about the Olympics, the changes foisted upon this city by corporate kleptocrats, self-serving politicians, etc. There are some strong statements, but if one doesn't shout, who will hear?

These writings (albeit some of which are a bit out of context, and edited to my own purposes) reflect how we came to where we are. This insanity did start shortly after the announcement of Vancouver's 2010 bid being accepted. I foresaw where that would take us, but no one seemed to care. I am not entirely sure if the Olympics are 100% causative though, because there is a global RE boom, it's just that things have really gone off the rails here.

We live in a nation dominated by salesmanship (commercial, political, religious). The salesman's credo is: a facile mendacity trumps a stubborn truth, because an honest mode of being would cause the buyer to become wary of the giddy lie of the pitch.

and -

We've become ... a land of suckers and criminals with a cultural landscape peopled by corporate scam artists

and -

All human beings have a talent for denial, but we ... have turned denial into genius. There is no need to burn books if the public is ignorant of their existence. link

From another article in the same publication;

Like America’s commander in chief, BC’s elected premiere is a privileged, nepotistic, drunk-driving, beady-eyed corporate crony. But the similarities don’t end there. Though it is beyond Gordo’s purview to wage war on foreign nations (that’s Harper’s job), the Work Less Party’s brave new documentary, Five Ring Circus, exposes the myriad ways that our government is using the 2010 Olympics to wreak havoc on BC itself.

The movie centers around the well-publicized mandate to make this the greenest, most sustainable Olympics yet. With pinpoint precision, the film goes through the specific promises, one by one, and reveals our government’s vicious mendacity in filling the pockets of real estate, construction, and hospitality interests under the absurd guise of showcasing Vancouver to the world. But the movie makes it clear that the insidious logic of this operation is that we have to ruin North America’s most livable city in order for it to have its dubious day in the sun.

Who would have guessed that the construction firms that lit up their cranes with YES 2010 signs didn’t have our best interests in mind? The ugly truth is that the construction and real estate tycoons care about Vancouverites about as much as Boeing and Halliburton care about the troops and taxpayers.

and -

There’s another dimension to the hideous Yaletownification of Vancouver that the film astutely addresses. As Vancouver’s affordable housing is converted into condos and the cost of living in this already expensive city continues to rise, a gulf is opening up between the haves and the have-nots. And this is having all kinds of hitherto unthought of repercussions on Vancouver’s vitality. link

I have been wanting to rant about the Olympics for quite a while, but I become apoplectic when doings so, and I don't think you are interested in hysteria. Just slightly less than 50% of Vancouverites voted against the Olympics, and interestingly, the divide was between the West Side, and the East Side.

We have had a $2.5 billions boondoggle shoved up our arses in the RAV line, when an at-grade LRT on existing rights-of-way would have cost as little as 1/10 of the RAV. Whose pockets are getting fat on this huge disruption of hundreds of businesses, and traffic nightmares while we meekly bask in our "good fortune"?

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.

dissecting bias

Anatomia del corpo humano...
Rome, 1559. Copperplate engraving. National Library of Medicine.
Juan Valverde de Amusco
(ca. 1525 - ca. 1588)[anatomist]

A flayed cadaver holds his skin in one hand and a dissecting knife in the other. The skin’s distorted face has the appearance of a ghost or a cloud, suggesting that spirit has been separated from, or peeled off of, the fleshy inner man.
from here

There is something about the description above that reminds me both of the spiritless liturgy the passes for reporting, and of how people that fell for the hype and spin will feel when they start to realize negative equity, and their own credulousness. And just wait until they are hit by recession (part of the larger economic cycle).

Below I react to an article in The Sun -

The upside of British Columbia's real-estate-market cycle has been steep, but the downside will not be as rapid as in the U.S., according to the real estate firm Century 21 Canada.

This is garble. They mention cycles, but don't seem to have seen VHB's graph, or any other of the like. They do not seem to be paying attention to their own numbers either, though I suppose that they just added some adjectives to the press release from the dispassionate Huge RE firm. It's reassuring to hear that our "downside" will not be as rapid as that to the south. I must have missed the news about the US market hitting bottom, and beginning to rise to new, record levels.

House prices in select B.C. markets have been flat or risen up to 12 per cent in the last year. That follows a much steeper rise of between 89 per cent and 114 per cent over the last five years, Century 21 reported Wednesday in its annual survey of house prices.

Select BC markets hmm? Have "been flat or risen" (sic) - which is it ferfuxaches? I ought to have used the spin .gif for this post. It "follows a much steeper rise...the last five years", but if prices are flat, there is no more appreciation occuring, and if they are up 12%, that is still a considerable - if flagging - appreciation.

However, while the median U.S. house price dropped 11.5 per cent compared with a year ago, Century 21 Canada president Don Lawby said B.C.'s economy is strong enough and its real estate sector different enough to isolate the province from a similar decline.

Lawby, in an interview, said that while real estate sales have dropped, B.C.'s economy has grown more than the U.S. economy, and is spread across a more diverse base than has been the case in the past.

It doesn't much matter which way you cut with this knife, it still means the market is slowing markedly. And it's only beginning. China has been loading up on copper and other metals, so mining will likely slow. Lumber market already hurting in Ontario and Quebec - and likely in BC too, they just don't report on that. But don't you worry, everything will be ok. Just take this little pill. You did know that things are different here...right?

Just what is this greater economic diversity that we enjoy, that we had not before? Condo construction? The RAV Line? Highway construction? Five years of construction projects has added a great diversity? And since when has the BC economy been equatable with the US economy? Can we compare economies, but not market cycles?

Thanks to Derrick Penner and RET for the article, and the WTF? fuel for this post.

branding vancouver

This has been bugging me for a while. It really set me off the other day when I read this article over at RET. One of the lines in particular rendered me even more apoplectic -

Baxter said the construction stimulated by the games is "the real issue . . . which brings a lot of people who would otherwise go to [Alberta's] oilpatch."

Then, more importantly, is the role the games' play in reinforcing Vancouver as a brand, because "the Olympics is not a destination event, it's a branding event."

Reinforcing a brand? To what purpose? If I wanted to live in a brand, I would go and live in the mindlessness of Celebration, U.S.A.: Disney's Brave New Town.

I didn't move here 20 years ago because Vancouver was a cool brand, I moved here because I found a laid-back little city that was unpretentious. Now everything is being branded - Science World becomes Telus Land, we have GM Place, what else did I miss? Coffee just isn't coffee unless it's Starbucks or Tim Horton's (it's all crappy coffee - no matter how much it costs you), people walk around with their Tommy Hilfrigger, DINK sweats, Nike this or that, and so on, paying huge money to advertise for rich cats.

Who wants to pay double what it's worth to live in Vancouver TM? I didn't vote for that. Who gains from it? All I do is lose from it. Bub Rainy, Gordon (Jail Bird) Campbell, the owners of IntraWest, and their ilk are getting filthy rich from the branding of Vancouver, and we are paying for it. And our children will be paying for it. It is so sad and ridiculous, it makes me laugh. But it's a nervous, embarrassed kind of laughter.

I voted against the Olympics, and I voted against the hundreds of millions of dollars to be borrowed by the city. There was a fairly clear division between East Van. and Van. West in that vote. East Vancouver voted against it by-and-large, with the opposite true for Vancouver West. The summer that Vancouver/Whistler's bid was accepted, I was in Ontario, and someone congratulated me on the award. Poor guy set me off, and I started railing about what it would really mean - higher home prices, higher taxes, deficits, and debt. I hadn't even considered the branding.

Humans are sickeningly stupid (pardon my misanthropy). A case in point is the water issue right now. People running out to buy brands of water. I heard that a couple of people actually got into a fist-fight because they both wanted the last couple of bottles of Whistler brand water. There was probably generic water from the same source d'eau right beside it for half the price, but it wasn't branded, so they fought over it. Here's a lttle brand trivia for you - Evian (a huge brand of water) spells Naive backwards.

Branding. Hmmph!

journalism and spin

image from here

I heard a conversation with Wendy Mesley (a Gemini Award winning investigative journalist) of the CBC last night in which she was asked a question about journalists, and why there was so little depth to the reportage. Ms. Mesley stated -

"It's really hard now to be a good journalist...there's so much pressure with 24/7 news...to pump it out. The resources are down, so companies - newspapers, or networks - don't want to spend a lot of money digging up complicated stuff. It's really hard to tell a story that people do not want to be told...(they want) easy stuff."

When asked about her own investigative journalism, and how she gets away with it, Ms. Mesley stated further that there are

"hints from the sales department that they are not too thrilled, and it's understandable. What other network (besides the CBC) would want to do a series that takes on it's biggest sponsors?. That's condidered nuts at any other network"

It becomes clear why there is so much blah, blah in the Sun, Province, Glib and Meaningless, etc. - the sponsors. All of those RE advertisements are what keep the rags ragging. This is fairly transparent, and has been discussed elsewhere, but it begs the question - why bother even reading the stuff? It's essentially meaningless. That is why so many people have turned to VHB, Calgary Contrarian, Bubblemeter, etc. Although there is still a bias, it is a transparent bias, and it is not driven by pleasing non-existent sponsors.

I can commiserate somewhat - It must be hard for Derrick Penner and the like. I don't feel that it excuses folks like Cameron Muir though. No advertising there, and CMHC has a duty of care to tax-paying Canadians. Why does he pump the hype?