Monday, February 18, 2008

Letters

First the good:

News item: U.S. housing market has worst decline in two decades.

News item: Can't happen in Canada; fundamentals are different.

News item: Calgary unsold houses jump by 7,000

News item: Edmonton and Vancouver: It can't happen here; fundamentals are different.

News item: Edmonton housing prices drop as much as 30 per cent.

News item: Can't happen in Vancouver; fundamentals are different.

Hmmmmmmmmm.

Tom Parkinson

Coquitlam

And then the bad. I can't find the link anymore, but it was pointed to in previous comments. A letter to the editor yesterday in the TC alluded to the idea that anyone who can't afford to buy in Victoria should move to somewhere they can buy, save some money and then come home.

The logical fallibleness that exists in such a lame-brained argument is unbelievable. Victoria has had a long-standing well deserved (in my opinion anyway) reputation of a city for newly-weds and nearly deads. My one simple question is who is going to make the latte, or keep track of doctor's billing, or clean homes, or work for the government, or cook meals in restaurants, or build condos for these people who seem to suggest that moving out is the best way to stop the problem of affordability.

Actually, maybe people leaving, and not coming here is the answer. Your answers in comments.

113 comments:

vg said...

Victoria has been notorious for youth leaving Victoria in droves throughout the booms and busts of the last 25 years,who can live on $10 an hour flipping burgers or waiting on tables praying for tips. There simply isn't any decent industry that pays the bucks to keep the base family unit with work. If you didn't go to university or luck out into a provincial government job back then you starved trying to pay off a mortgage and is why I left in 1990 for a decade.

Once these condos being built hit the finishing stage there will be a surplus of construction people that will be leaving town as will happen in Vancouver in the next year with the wind down in Olympic infastructure that will be completed.
Simply we just had a longer boom cycle than usual due to the extent of the US pump cycle this time but the credit debacle will have a much harsher impact versus past cycles where this was not as extreme. There were no threats to banks going under or foreclosures on this scale. It's different this time alright but not for the right reasons,as HHV says just look at Alberta where the real big money is.

patience said...

Flash forward to 2007 when even if you did go to university AND work for the government (in my case health care) you still would have to starve to pay a mortgage in Victoria! I did leave for 7 years, but as we entered the child bearing phase of life, we got tired of waiting and came back to be closer to parents and the beautiful community where I grew up.

Thanks, HHV, for including the "good" letter - the writing on the wall seems pretty clear!

enoraxid said...

I have to admit, looking at houses in places like Regina, Winnipeg, heck even Ottawa makes one think. You get used to doing funny math with budgets, figuring out how much you can possibly squeeze into a mortgage payment, then when you look at these cities, you realize if you keep the same budget you'd be mortgage free in 10 years vs. 25 or 35 here.

Anonymous said...

"A letter to the editor yesterday in the TC alluded to the idea that anyone who can't afford to buy in Victoria should move to somewhere they can buy, save some money and then come home."

The letter writer has a good point. We live in a mobile society, and if you can't afford to live in a high-priced city you should move somewhere cheaper.

If you don't agree with this, then you must be in favour of government price controls (aka communism), because that is the only way that high-priced cities can be made significantly less expensive.

You are wondering "who is going to make the latte, or keep track of doctor's billing, or clean homes, or work for the government, or cook meals in restaurants?" Well, the answer is the same people who do that today. There are three classes of such people: the working poor, who don't have the ability or motivation to go somewhere else where they can get a better-paying job and live in a less-expensive area; the transient young (e.g. students) who will leave as soon as their primary reason for being here ceases to be; and the spouses of people who have well-paying jobs and/or wealth, and are working themselves not of necessity but for something to do. I believe the last group is actually quite large, and their spouses are subsidizing the businesses they are working for because you can't live a decent life anywhere on minimum wage.

There is obviously going to be a correction in the Victoria housing market, but there will be corrections in virtually all markets in North America. You'd have to be wilfully blind to not have seen the runup in prices across Canada in the last few years. Victoria might be 15-20% cheaper in a couple of years, but it will still be at the bottom of the affordability list for cities in Canada. Anyone who thinks Victoria is going to become a cheap (or even average cost) place to live is a fool (or a bitter renter).

Tony Danza said...

Anyone who thinks Victoria is going to become a cheap (or even average cost) place to live is a fool (or a bitter renter).

It's so easy to spot the new transplants in Victoria nowadays. Thank you for your revelations Mr./Ms. Anonymous now step away from the crack pipe...

Anonymous said...

"It's so easy to spot the new transplants in Victoria nowadays. Thank you for your revelations Mr./Ms. Anonymous now step away from the crack pipe..."


In other words, you don't have anything serious to add to the discussion.

greg said...

The idea that Victoria is not "affordable" and never will be again is nonsense.

Nothing has changed here locally that would justify multiples of 8-9times the median income for an average home versus multiples of 5-6 times the median income around 6 or 7 years ago.

A return to a multiple of 5-6 will create affordability for a large number of local people, like teachers, nurses, civil servants etc who are priced out of the market now, unless they already have significant inflated equity of their own.

Anonymous said...

Baby boomers and Albertans are buying retirement and vacation homes where the climate is truly warm and sunny year round such as Phoenix, Florida, etc (where prices for a SFH with an in-ground pool is less than $200K). None of this miserable grey rainy weather there. I talked to some friends from Calgary recently and that's what they did (they bought in Phoenix). They also told me that the few Albertans who are buying in Victoria are those with criminal records and cannot enter the US to buy the reality priced real estate there. No wonder we see so many roughnecks, and vernim driving about here with 40 year old diesel spewing pick up trucks.

olives said...

I suppose as a government employee I am "working poor", and I agree that Victoria is and may always be less affordable than many other cities, but the difference is that it only has become unaffordable to us working poor in the past few years. I bought my first house in 1997, with a much lower income, and it was very affordable to me at the time.

Anonymous said...

Here's food for thought. Look at this graph.

Canada vs Victoria house prices

The red line is the Canadian national average (source is Global property guide), the black line is the Victoria average. The national average ranges from $150K in 1990 to $275K in 2006, and has been proportionally stretched to match the scale of the Victoria prices. You can see that, in terms of change since 1990, Victoria isn't all that different from the national average.

greg said...

...and has been proportionally stretched to match the scale of the Victoria prices

Why do that? On what basis do you tack another$300,000 on the end price to get that matching effect.

No way to compare a price up to $276,000 with one up to $500,000 simply by lifing and dropping it from one graph to the other - because in the one axis the prices are absolutely wrong for the one graph line.

Deception, baby.

Anonymous said...

The graph has been scaled to show proportional price increases. Think about it for a second before you jump to conclusions (and perhaps look at the original data and get your calculator out)

Anonymous said...

Anon,

proportional price increases are irrelevant without corresponding income data. Victoria is lower than most. Victoria SFHs are not affordable to most people, with jobs, who don't own today.

No look at every other city not including Van and Kelowna and you will see that people with jobs can afford homes, not condos. Victorians don't want condos, they want SFH. Look at what is selling.

godsteeth said...

to the "anonymous" with the graph link--heres an admittedly not very typical anecdote, but nonetheless.......
In 1989 we lived in Toronto and bought a very basic no view condo on Dallas Road in Victoria for 65k and rented it out. In 1990 we sold our toronto condo for 200k and moved into the Victoria one for a short time before eventually moving up island. Last summer I saw the SAME Dallas road condo listed at 300k (and it sold-dont know the actual selling price)-- AND I recently saw an identical condo in the same building that we had lived in in TO. listed at $250k.
In short, over 18 years the (reasonably nice,older) TO. condo had increased by 25% and the Victoria one by almost 500%. Many "exclusive" new developments in "World Class" Victoria are now attempting to get $1000 sf. Even Langford is "world class" in fevered realtor hyperbole. Relatively speaking, RE values now are much better in the big smoke (not even considering relative incomes) than they are here. Got some time? Check on MLS.

Metaldwarf said...

I'm young (23) and have occasionally thought about moving away from Victoria to find a nice affordable place to live. But I have family here I would hate to leave and I run a small local business so I am tied to Victoria with my career. Ultimately I'm not very mobile. If I was the "average 20-something" who was simply an employee I would be out of Victoria in a heartbeat. Maybe try my luck in Alberta or even out east to the maritimes. The sad thing is that there are not a lot of employee jobs in the maritimes anymore. so your average 20-something employee wont want to live there. I would start my own business so as long as that stays afloat I would probably be fine. You can get waterfront acreage in Nova Scotia for less then a lot of condos in Victoria.

vg said...

I have no doubt there is going to be a crash in the next year. I was just looking thru MLS at my old neighborhood when I lived in Kelowna and left in 2002 and prices there have TRIPLED. And these houses are on septic,30 mins outside of Kelowna, and no decent city services and bad road repair etc. I am shocked and any thoughts of going back there are now long gone. This market has no where to go but down when this type of insanity is out there and accepted as "thats just the way it is", BS it is.

Anonymous said...

While I agree that a market correction/slowdown/whatever is very likely, fuel keeps getting added to the fire:
Yesterday's budget by the BC Gov will keep fuelling the RE fire:
- income tax cut of 2% in 2008 on first $70,000 (this hits the middle class a lot) and 5% in 2009.
- First time buyer PTT exemption raised to $425,000 from the current $375,000 purchase price.

Plus with RBC and TD both predicting a 25 bps rate cut by the BoC on march 4th... looks more and more likely to have lower interest rates..

So it will be interesting to see how it pans out.

Metaldwarf said...

Does anyone else have dreams about real estate? real dreams, like when you are asleep.

I had one that was actually a series of dreams in one. I had a time machine of sorts, it was a newspaper that could see different time lines unfold in the future or parallel universes, whatever... anyways.

One "headline" was that we (bears) are all wrong. There is no correction prices go up and up and we all live in our 1986 honda civics. It was weird all the home owners had so much money that they all build castles and mansions. every house on every street was huge and palatial.

Parallel dimension number 2 was a huge spike in interest rates. everyone lost their homes. But for reasons unclear in the dream my investments made millions I was super rich and everyone else was living in hondas. The whole economy and every other person in the world was essentially living like in a third world country and I had all the wealth. I could have spread it around and helped people out of their misery but I didn't I was happy they had all lost everything. I guess I'm a bad person, though this was just after the dream where I was a hobo so... but when I rule the world I guess that wont matter

Timeline number 3. I inherited/staked a claim/was given or somehow acquired a tiny island with a little house on it. It was mine and didn't cost me anything and I didn't work or pay rent I just sat on the beach and caught crabs for dinner off the beach. I liked this dream best.


I have until just a few days ago been looking for a new bigger place to live either rent or buy (if the price is right). for a time i was leaning towards buying, due to pressure from friends and family and a very generous financing options made available from the BoM&D. I am happy to announce that I have found a wonderful new apartment in a heritage McClure mansion in Rockland that I will be renting. I can see staying there for a good 2-5 years. I no longer feel any pressure to buy. I will wait for the bottom. Maybe dream 2 or 3 will come true.

happy owner said...

The average annual price increase of a SFH is 5% which means a doubling of prices every 14 years. Amazingly, if you look at price history at the VRB web site for Victoria SFH over the last 40 years the numbers pretty much work out. 1981 peak, $125,000.Next peak 1994, $250,000. Next peak (?)2008, with a 10% correction, $500,000. By 2022, 1 MILLION dollars. Na can't happen right. RIGHT!

sourgrapes said...

happy owner said...

The average annual price increase of a SFH is 5% which means a doubling of prices every 14 years. Amazingly, if you look at price history at the VRB web site for Victoria SFH over the last 40 years the numbers pretty much work out."

MORE AMAZINGLY, this person talks about 'the last 40 years', yet only posts average stats from 1981 to 2008.....

AHEM, that works out to 27 years, dearie! SO, you ASSUME that by 2022, $1 million?

Let's sing: "In the year 2525, if man is still alive...."

vg said...

I see an article in the TC about the Bayview developer babbling about Victoria still being undervalued cause ocean views are half the sq ft price as Vancouver so there is plenty of upside left cause 3 million people want to move here. Give me a break.

Oh right,and any recession problems will miss Victoria, I guess cause "we're different". Funny how the TC prints this crap with no mention of costs,affordability,the amount of condos for sale, Tuscany going under etc etc. More irresponsible reporting but why am I not suprised.

VicREBear said...

Yeah...that was the lamest pump job I've seen in the TC for a while. Could not a single media person in the room have raised their hand and asked the Bayview dude how many units he has actually sold, or why people in -40 degree Canadian cities wouldn't buy winter homes in Nevada, where prices are now half those of Victoria? Nope - that would be distracting readers from the "news".

boomer said...

re: TC's biased Real
Estate "reporting".
The MSM aint about journalistic integrity-it's about profitability.

The spin obviously will favor the guys that pay for the full page ads.
The TC is just doing its job for
CANWEST GLOBAL.

godsteeth said...

copy and paste link to the TC article below.
(try not to toss your cookies)
the guy is saying 700 bucks a square foot makes victoria "undervalued"
puhlease!

http://www.canada.com/victoriatimescolonist/news/business/story.html?id=4aa2ef32-35b2-46de-883a-a2a8612a5cda

Tony Danza said...

In other words, you don't have anything serious to add to the discussion.

As opposed to your brilliant insight?

Tony Danza said...

income tax cut of 2% in 2008 on first $70,000 (this hits the middle class a lot) and 5% in 2009.

Yes that extra $50 to $85 a year will really push prices through the roof... You do realize that it's a cut of 2% to the income tax that you pay to the provincial government right? So if you pay $5000 in income tax to BC you will save yourself $100. Nice analysis keep 'em coming.

Anonymous said...

I agree there is some lack of integrity on the tc's part when this stuff comes out, but I have noticed that a lot of houses are selling very close to asking prices, with rates dropping will there be a correction, calgagry's prices are still higher this jan than last Jan, I also noticed that the developer of bayview said that canadians are required to put down 25% but anyone can finance personal or rental property with 0 down in canada and its being going on for a while, Mariash didn't anticipate the Can$ being worth more so Canadians may just head south-cheaper prices(not just homes but gas, taxes,cars,etc.), way better weather year round so you can play golf, we'll see how things go

Aleks said...

Talk is cheap. The two most recent posts on Victoria's Truth tell the real story. The Aspen subsidizing buyers' mortgage payments by almost $10,000 in the first year and Tuscany slashing prices by up to $65,000 are worth more than a hundred re-printed press releases in the TC.

vg said...

Sounds to me like the Bayview guy has sales slowing and is trying to save his bacon. He even kisses the banks ass too at what a great job of avoiding the sub prime mess,probably cause he's over extended and the bank wants them all sold too, what a joke, lol.

I see this morning the Large guy with the reno'd crack shack on Bay and Quadra now has a "Reduced" sign on the front fence. Yep,we're undervalued alright.

sitting pretty said...

hhv if you'd bought last year instead of starting this blog you'd be up 10% now which is 40% return if you put 25% down my hubby and I put our extra cash into our mortgage payments its more profitable than rrsps, we'll be retiring rich on real estate

Tony Danza said...

we'll be retiring rich on real estate

Get back to us in a year or two and let us know how that worked out for you. Seriously, get back to us, all the other Donald Trumps that used to post on the US forums are nowhere to be found.

vg said...

"hhv if you'd bought last year instead of starting this blog you'd be up 10% now which is 40% return if you put 25% down my hubby and I put our extra cash into our mortgage payments its more profitable than rrsps, we'll be retiring rich on real estate"



and what happens when the market corrects 10,20 or 30% ? until it's in your back pocket it isn't profit...take away the agents fees and if you had to actually take someones bid price,not your imagimary asking price, then heaven forbid that RRSP looks mighty fine.

Tony Danza said...

take away the agents fees

vg, My spidey senses are tingling and I have a feeling you're arguing with an agent...

Anonymous said...

Developers are shitting in their pants. If a guy in Calgary or Winnipeg want to escape -40 temperature, they'll go to Florida or Phoenix where they can buy a SFH with pool and guaranteed sunshine (none of this grey rainy stuff). Last I checked, Winnipeg has plenty of direct flights to points in the US, but none to Victoria. What a bunch mumbo jumbo. Only criminal convicts (who cannot cross the border) move here and buy crap (and bring their diesel prairie spewing 1/2 ton trucks along).

Anonymous said...

There is plenty of (cheap)coastline in Nova Scotia for 3 million Canadians.

Anonymous said...

Someone help me out because I just don't seem to get it. Maybe it's my inherent Prairie sensibility/upbringing. My wife and I just sold our townhouse and now we have the option to rent or buy detached. I'm mostly leaning towards renting, due to the fact anything we find interesting enough to go see gets purchased within days of being on the market. Yesterday, it was to check out a reno'd 50's home on a quiet street in Gordon Head. Asking price....$629,000. No suite either, 1800sqft finished out of 2400sqft
My wife and I each make over the average household wage in Victoria yet with our combined incomes I find that we can only afford below average housing. Where is all the money coming from to buy these homes at these prices?????

sitting pretty said...

anonymous at 12:03 my hubby says put all your money in the mortgage, it makes more on a house than an rrsp. then you can be sitting pretty like us!

Anonymous said...

Sitting pretty,

Your husband is either an idiot or a realtor. I think you will want a divorce in a couple years when you are not sitting so pretty.

sitting pretty said...

anonymous at 12:41 you seem very mean spirited, are you jealous of people who can afford to invest in real estate? my hubby is not a realtor, and I don't think he is an idiot. I think you are an idiot for letting the real estate boom pass you by. good luck to you.

Anonymous said...

Don't get all worked up by sitting pretty who is just trying to antagonize you bears. She can't think for herself and let's her hubby make all the decisions for her.
Sitting pretty, I own my home, and can afford to invest in real estate. I work an honest job for honest pay. I am not jealous of you or your dumbass hubby.
What kind of drug dealer/pimp is he by the way? That's the inherent problem. Doesn't make sense to put money into an RRSP when you aren't claiming income or paying tax. Better to launder it by putting it on the mortgage. All drug dealers should be jailed minimum 10yrs/offence. Sitting pretty....does your hubby employ you too??? BUWHAHAHAHAHA

sitting pretty said...

anonymous at 12:58 if you are telling the truth then why don't you sell your house now and buy it back later for less, that would be the smart thing to do. but I think you are either stupid, lying or both.

Anonymous said...

Well Sitting Pretty,

Shows how smart you are. I posted at 12:03 as well. I repeat.....I just sold my townhouse and am leaning towards renting for a bit. Stand up and let your brain breathe a bit before you respond and you might actually sound smarter.
There you have it. I am not either stupid or lying. Chump.

Anonymous said...

Sitting pretty,

Eventually you will be homeless because your drug dealing hubby will have a warrant for his arrest and all your material wants and needs will be seized and sold via Proceeds of Crime legislation. Then you will be Sitting Fugly.
Chump.

Anonymous said...

What the obese man (talking about leading a stressed out life, no time for exercising in this utopian health conscious city of ours) in the TC article today neglected to say is that a lot of criminal convicts from Alberta are buying here with their ill gotten money as the US does not let them in. The smart money (and legit) is buying in Phoenix and Florida (SFHs with in-ground pools @ less than $200K, what a deal).

sitting pretty said...

anonymous at 1:07 if you are also 12:03 and 12:58 then why did you say 12:58 "I own my home" if you sold it? Either you lied at 12:03 or you lied at 12:58. chump

Anonymous said...

I wonder how many hits the obese man is getting on his web site from Phoenix. I'm surprised the TC did not report on that?

S2 said...

Anyone else find this article in today's Times Colonist hard to swallow.

I mean come on. He is a DEVELOPER building a massive condo development in Victoria. Like he is going to say "hey, folks the bottom has fallen out of new condos and I'm in deep doo doo".

And I love the line about people in Calgary or Winnipeg coming to Victoria or Vancouver.

"If I'm sitting in Calgary or Winnipeg and I want a place to go that is a little warmer and get away from 40-below weather, I have choice ... I can go to Vancouver and battle for road space or go to Victoria and for $700 a square foot space. Frankly I say Victoria is undervalued."

Ummm, how about Florida, Arizona, Mexico? Victoria and Vancovuer would not be my first choice for warmer weather.

What a desperate load of c***

S2 said...

Oops, forgot the link

http://www.canada.com/victoriatimescolonist/news/business/story.html?id=4aa2ef32-35b2-46de-883a-a2a8612a5cda

olives said...

"He also pointed out the Canadian system tends to be much more conservative and does not tend to finance any more than 75 per cent of a home's appraised value."

what??????

Ken Mariash also thinks the market is not oversupplied with new development - I wonder if this statement includes the 17-month supply of new condos in Victoria, and the 153-months supply of condos at Bear Mountain?

As for Sitting Pretty - in all sincerity, do yourself a favour and read some news from a financial publication.

Tony Danza said...

The smart money (and legit) is buying in Phoenix and Florida (SFHs with in-ground pools @ less than $200K, what a deal).

No they aren't, the smart money is sitting on the sidelines waiting for the mess down south to play out. If you know a modicum of what is going on in the US housing market and what potentially lies in wait you are not buying RE.

Anonymous said...

Hey s2 someone posted that article on KIV and you are not there to dispute it!

S2 said...

Yep. They can sink or swim on their own. They don't need me holding their hand. :)

S2 said...

Also just wanted to say about KIV.

When a "Butter or Margarine" post gets 45 responses and a "US Housing Crisis unlikely to affect Canada" gets one response I think we all know what side their bread is buttered on.

Sorry, I couldn't resist. :)

vg said...

"vg, My spidey senses are tingling and I have a feeling you're arguing with an agent..."


tony danza,
I believe you nailed it,this is a reocurring activity here lately. They play the hit and run posts, pumping this imaginary "massive profits to be still made" scenario as well as the "you missed the boat" lines,typical of agents that have more time than usual on their hands while they secretly are worried shitless whats about to come down here.

vg said...

"He also pointed out the Canadian system tends to be much more conservative and does not tend to finance any more than 75 per cent of a home's appraised value."


Thats all bullshit. I know of 6 young couples who have been given mortgages between $300,000 - $400,000 all with nothing down and very shaky job history and some not even any job beyond some occasional/seasonal work and well under $20 laboring jobs. Two of them have kids on the way too,can't wait to see how that works out. Somehow the lenders didn't seem to care, I am sure they are still juicing the paperwork to keep mortgage sales up.

vg said...

sitting pretty ,
does your hubby read the financial pages and notice that things are getting real ugly in the US and is already spreading to Canada ? mill shutdowns, manufacturing shutdowns,our own Financial Minister Carole Taylor reiterating the other day for about the 5th time in a couple months about how this year is going to be a very tough one and to be prepared ?

How about Rona stock getting killed and downgraded cause reno's are going to be slowing down on a massive scale ? didn't think so,types like you were a dime a dozen a mere 2 years back before the US started to tank.

Come on back in 6-12 months,we'll have a roll call and see whose still bragging about their paper profits.

sitting pretty said...

to vg, hubby and I both work for the government, lots of job security there, no government downsizing in sight. your taxes pay our mortgage and we will profit from that in the long term.

vg said...

"to vg, hubby and I both work for the government"


I guess that means you should have lots of time to read the paper... but probably too busy shmoozing at the coffee pot bragging about paper profits that do you no good til you sell or you die and your kids thank you by blowing it out the door on vacations and big screen TV's.

Anonymous said...

sitting pretty,

given your prolific posts here today including your blatant disregard for those who work hard and pay taxes that are partially used to pay your "mortgage" I'd say you're enough to give public servants everywhere a bad name.

For the record, I am currently a gov't employee. Gain some respect for your employer, the people of the province of BC.

Metaldwarf said...

Government worker eh?
enjoy paying your full marginal income tax.

mmmmmm Dividends, your mortgage gets little to no help from my taxes. BWAHAHA

VicREBear said...

C'mon everyone. We're all grown-ups here, and don't need to engage in a pissing contest. This is usually a polite blog; let's please stop flaming each other and get back to data and meaningful empirical observations. Good luck to all, regardless of your opinion of the future of Victoria real estate.

Anonymous said...

sitting pretty
Typical lazy government worker. When people are dying in hospital corridors, you are yapping on a blog using your government PC during work hours, paid for by taxpayers. This will reported to the BC auditor general for investigation.

sitting pretty said...

I am no lazier than any other worker. I see all of you are posting during the day. Most of my friends are government and we all have houses, sorry you are so jealous and angry. If you are too late to the parade then don't blame us

Anonymous said...

sitting pretty,

Intellectually this may beyond you. However, no one here is jealous of you. Just like no one is jealous of those who bought Nortel at $100/share, and two years later, the same shares traded at 50 cents. People in this forum talk about market fundamentals and economics. The current market has been driven by speculators just like in the US, or just as the stock market was in the late 90's. You seem to lack the intellectual ability to comprehend business and economic notions and principles. If anyhting, people here feel sorry for you.

sitting pretty said...

anonymouse 7:01 my hubby bought nortel at $10 and sold at $70, that is how we afforded the downpayment on our house. you can call us stupid but the fact is we own real estate and in the long term its going up. sorry you can't join in the party.

olives said...

well there's some bad LSD going around this party and the cops are on their way anyhow...

I'm preferring to stay home (in my cozy rental house).

olives said...

Over at KIV the butter/margarine discussion is really heating up, and the realtor that posts there is telling everyone the market right now is really "hot".

beagle said...

http://flippersintrouble.blogspot.com
I hope some of the local flippers taste red numbers like these.

S2 said...

I love how the realtor on KIV says that in her "opinion" the market is hot.

We have stats, facts and figures.

She has her "opinion" which is the one everyone listens to.

God help them all.

Anonymous said...

Very relevant article on the fact that more than 10% of homeowners in the US have houses that are worth less than their mortgages.

http://www.nytimes.com/2008/02/22/business/22homes.html

sitting pretty said...

olives, I'm so sorry you don't have a hubby to satisfy you. it's really sweet to get it, but you don't know

Anonymous said...

time to kill the anon posting. I'm tired of reading crap flame wars.

-- anon --

olives said...

sitting pretty said...
"olives, I'm so sorry you don't have a hubby to satisfy you. it's really sweet to get it, but you don't know"

Looks like another comment right over my head...

S2 said...

Wow sitting pretty. Pretty low brow I would say.

Olives don't respond to baiting.

If you ignore it they may go away or at least keep the attacks less personal and keep on the topic that we are all here for and that is real estate and not our personal lives thank you very much. :)

olives said...

s2 - I honestly don't know what it is referring to - one of my previous comments? Maybe she didn't think my LSD joke was funny? LOL :)

S2 said...

It did come from out of the blue didn't it?

I thought your LSD joke was funny but I have a bit of a wacked sense of humour. :)

vg said...

sitting pretty,

if he was so smart to sell at $70 then how come he isn't so smart to sell your house now ? sounds like the types who thought Nortel was going to $200,how typical when caught up in a mania driven by pure greed and status symbols.

olives and S2, I think you got yourself some KIV hot head on here now.


BTW, I have been tracking some very nice homes in the $500-650,000 range in Saanich for several months now and they are still for sale after all this time. Can't wait for the 20-30% discount coming up over the next year,it will happen much faster then you can imagine.

vg said...

sitting pretty,

if he was so smart to sell at $70 then how come he isn't so smart to sell your house now ? sounds like the types who thought Nortel was going to $200,how typical when caught up in a mania driven by pure greed and status symbols.

olives and S2, I think you got yourself some KIV hot head on here now.


BTW, I have been tracking some very nice homes in the $500-650,000 range in Saanich for several months now and they are still for sale after all this time. Can't wait for the 20-30% discount coming up over the next year,it will happen much faster then you can imagine.

vg said...

"Over at KIV the butter/margarine discussion is really heating up, and the realtor that posts there is telling everyone the market right now is really "hot"."


olives, have you asked the realtor why there are so many condos for sale ? and how they find the time to blog with a market so hot ? or maybe why the Tuscany and others are desperate for buyers ? I am sure you did mention it but just checking. ;)

hhv said...

Dunnery Best, managing director, portfolio manager and investment adviser with CIBC Wood Gundy in Victoria, recommends taking into account expenses such as taxes, insurance, maintenance and improvements when looking at property value increases.

"If the average goes up by 7.8 per cent, the fact is in many cases you are not netting that."

Although homes are an important part of many people's investment portfolios, they should remember that, despite strength in local real estate, markets can also go the other direction for a sustained period, he said. Also, a property may be difficult to sell or not bring in an expected price.

In addition, "the environment of declining interest rates is over," Best said. He warned that extrapolating from the past decade to the next decade is "faulty logic."

from today's TC

Anonymous said...

It is also Faulty Logic to believe that your home is an investment.

It is only considered an investment if you are looking at for the purpose of a rental and even then the numbers have to make sense.

If you are looking at it for personal use it comes down to your comfortability. The day anything matters in real estate is the day you buy and the day you sell. It does not make a difference if you buy high and sell higher if you are looking at this purchase for personal use and you could afford it.

Yes, you may have been able to buy it cheaper but you can basically do that with everything in life.

olives said...

That's the key, isn't it - affordability.

VG - the realtor's comment that the market was "hot" was in DIRECT response to my statement that there was a 17-month supply of new condos in Victoria and 153-month supply of condos at Bear Mountain.

Go figure...

S2 said...

It really finally clicked in my head the other day when my husband said to me that they think it will go up this year because it went up last year.

I guess then when it goes down does that mean they think it will go down more?

Again, we just have to wait and see (heavy sigh).

Michael D. said...

The day anything matters in real estate is the day you buy and the day you sell.

Or when it comes to do a refi to pay off those credit cards.

Sound familiar SP.

olives said...

s2 said:

"I guess then when it goes down does that mean they think it will go down more?"

Yes, it's human nature to extrapolate whatever conditions currently exist. It takes a while for the psychology to change, but once it does there's no turning back...

vg said...

thanks for posting that HHV, Dunnery Best is one to listen to as he retired in Victoria the past couple of years so he has a vested interest and still lays it out in his honest fashion.




sitting pretty should make a mental note of this statement:

"they should remember that, despite strength in local real estate, markets can also go the other direction for a sustained period"

S2 said...

Olives.

I'm sorry I'm not over on KIV adding to the RE thread but you seem to be holding your own quite nicely.

I use to jump in too quick and it is really interesting to sit back and see what others will come up with on their own like the WB person who is commenting to you.

faulty logic said...

lets not forget the most important part:

"In addition, "the environment of declining interest rates is over," Best said. He warned that extrapolating from the past decade to the next decade is "faulty logic."


The interest rate decline is temporary til they get the subprime mess figured out (if they ever do) then up they go.

The party is over folks,turn out the lights,all the braggarts will soon be bagholders.

jas2 said...

"In addition, "the environment of declining interest rates is over," Best said. He warned that extrapolating from the past decade to the next decade is "faulty logic."

Just wondering... TD Canda Trust and I think another bank is planning to reduce interest rates this spring.

If you take a 10 year fixed-rate mortgage, wouldn't this protect you from possible rising interest costs in the medium-term future?

vg said...

well I guess there are two different opinions. I'll take Dunnery Best's opinion over TD's any day.

If the US gets the credit problem under control then they will have to raise rates as inflation there is starting to go up. That was the plan for Canada too by Dodge til this subprime mess made them lower rates.



The may have avoided one major bullet with AMBAC rumoured to have made a deal to ensure no credit rating lowering for them.

hhv said...

How many 10-year terms do you think they sell at 8.05% when you can get 5.25% on a 5-year?

There is a reason why you'd have to pay that kind of premium. It's because the banks see a 10-year term as a big risk to themselves. I'd imagine a 10-year term to be a pretty tough sell these days... especially for a condo etc where no one expects to have to be 3 years from now.

Metaldwarf said...

especially for a condo etc where no one expects to have to be 3 years from now.

Thats a good point. All the people I know that want to buy or have bought a condo all plan on selling it (for a profit no less) in the next 3 years or so. With inventory as high as it already is and all of these other folks wanting out in the next few years its gonna crash hard.

HAPPY! Owner said...

Hey guys, you can debate the latest condo price drop until the cows come home. Sure the developers premium price is going to drop as demand slows a bit. So Bear mountain is flogging $620,000 product for a lot less. The other guys are looking at drops as well. But air boxes live in a pretty fluid pricing enviroment. You think the guys building this stuff don't know that. The bitter renters here think that a 10 maybe 20% drop of over priced condo developments is the sign that real estate is about to die in the CRD are sadly mistaken. SURE, try to time the drop. But you better get in some time because the bitter renter of today is going to be the bitter TENTER of tommorow.Get those sleeping bags dry-cleaned.

Anonymous said...

Bwahaha "fluid pricing environment"
ROTFL
I guess that means the sh@t is starting to run down hill.

Anonymous said...

about 10 year interest rates:

check you sources..

www.invis.ca/rates/

10 year rate = 6.25%

It is an insurance premium over 5 years, but not too bad...

S2 said...

Why do house owners keep calling us bitter renters?

We are renting and getting enough money together to give ourselves our own mortgage.

I don't call that bitter. I call it clever.

Anonymous said...

Hey happy owner, is this where you live in Victoria. MLS.CA, listing # MLS®: 238706 ?? Surely, beautiful houses with land are holding their value.

Anonymous said...

Who needs tents when you have Hondas...

Justin said...

I'll happily stay in my in my 750$ a month 2 bedroom downtown apartment while I build my (Real) investments. I'm just gonna keep on putting away the balance on what I might be willing to spend on a mortgage plus a bit extra for that rainy day.

Patience is a virtue my fellow bears...

beagle said...

Oh Yay! The bitter renter comments have arrived. Thats a sure sign the top is here.

vg said...

what's 10-20% off a condo buddy ? that is a major OUCH.


Ozzie Jurrock just said on the radio that Victoria's market has gone "soft" and the Alberta buyers and outside Canada have disapeared.
He also said to expect the Vancouver condo market to come down this year. Why ? AFFORDABILITY



PS I'm a bitter renter alright, life is tough in my 2 bedroom, 2 bath 1100 Sq Ft apartment with the million dollar view of the ocean and the city for $1000 a month. If this was a condo it would be selling for $700,000 easy. Like justin said, I'm investing the difference and profiting more than I would owning some shoe box condo.

vg said...

"With inventory as high as it already is and all of these other folks wanting out in the next few years its gonna crash hard."



Thats what Ozzie stated was happening in Alberta tank job, all these whiz kid Donald Trump wannabees all want out the door at the same time and look what happens.

renter said...

this is brilliant. the subprime mortgage mess explained in 45 stick figures:

http://docs.google.com/Team
Present?docid=ddp4zq7
n_0cdjsr4fn&skipauth=true

vg said...

thats perfect, I am sure they will have one like that for BC real estate in the next year. All those saps will be asking "why was I so stupid ? ".

Happy Owner said...

Nearly three quarters of all local home buyers last year were from the Greater Victoria area. The analysis of buyer origins using Multiple Listing Service® (MLS®) data provided by Victoria area REALTORS® also shows that nearly seven per cent of buyers were from Alberta and less than one percent of buyers originated from the United States.

out-of-town town buyers have not had a significant impact on the overall market. "With such a large percentage of buyers originating in the Greater Victoria area it’s clear that the market is primarily being driven by local people who are moving up or down in the market to meet their changing needs or who are entering the market for the first time."

Quote from VRB. (But of course everything from the VRB is self promotional bul**hit right!)

Sub-Prime problem?

S2 said...

I may have missed it and if I did please let me know but I could not find one bit of news in today's Vancouver Sun or the Times-Colonist about The Sophia condo project in Vancouver. You would think that THAT would have made the papers.

happy owner. I may be as thick as a brick but I don't quite get what you are saying. Maybe you could translate for me. :)

Anonymous said...

happy owner,

Do you speak English?

Billy TwoBaulz said...

S2, here's an interesting article on the Sophia:

http://www.news1130.com/news/topstory/article.jsp?content=20080224_183623_7220

or http://sophiajoke.notlong.com

S2 said...

Thanks for posting those links.

So, the developer is blaming construction costs.

If these condos were selling like hotcakes at high prices like we keep hearing they are then the construction costs would not have been a problem.

The fact is the developer does not want to say that no one is buying the small box, over-priced condos anymore.

Okay. Really folks. Let's guess who is next.

Billy TwoBaulz said...

In a way, reading between the lines everyone in that article is arguing that the smaller builder Eden can't swallow the losses, whereas the bigger players can eat losses for longer. Either way, we seem to be talking about builder's ability to survive for a greater or lesser amount of time by eating losses.

Anonymous said...

Difference is when you pre-sale a building and do well out of the gate you are locked into costs. Not much room to increase prices to offset construction costs.

If costs go up over the next two years you are screwed. A big developer will be able to eat costs and still keep it's reputation. This in the long run will help it out especially when the market either slows down or construction costs plateau. Remeber, many of these big developers were good developers prior to the boom and had to find investors, banks, etc to back them when building did not blow out.

Small developers do not have this breathing room. In this case, they have sold 85% of a building, in a crappy location IMO, and there is not enough inventory or market room to increase price and recover costs.

This developer screwed up his other project as well.

Metaldwarf said...

playing the guessing game

the Radius is already postponed, its going down.

Juliet, (Simpsons Comic Book Guy) "Worst Residential Location Evar!"

Metaldwarf said...

I drove past Lakeside Village on my way home from an appointment up island today.

they must have 100,000 people drive past that development each day and the best they can muster is that tiny little sign?

i timed the trip from that sign to downtown 12 minutes. how about putting up a high sign proclaiming a 12 minute commute to downtown and sucker in all the poor souls who live on the other side of the Malahat?