Sunday, March 22, 2009

SFH price to rent comparison

It is really hard to come up with a fundamental price to rent comparison for Victoria single family homes. There just is not enough available complete house rental stock; I think there are lots of homes rented, but chances are these homes are long term tenanted and rented for significantly less than today's advertised Craigslist price.

The best I can come up with is a price per square foot comparison based on the Fernwood neighbourhood. I chose Fernwood because it is the most affordable Victoria-proper neighbourhood for both rent and own scenarios.

I used a ten-unit rental average to produce an approximate price per square foot rental metric of $1. I stress that this is an approximate number. Some places had asking prices closer to $1.40/SF while the larger home/suite rentals were in some cases as low as $0.80/SF.

To calculate the ownership metric I've used:
  • a 5 percent down, 35 year amortization and 4 percent interest rates to calculate the SFH price per square foot metric. I'm in no way advocating the use of these toxic products, I believe I am simply recognizing that this is the default mortgage right now being used by first-time buyers making the switch from rent to own.
  • a median Fernwood home price of $475K
  • an annual tax bill of $2200
  • an 1 percent per year ($4400) maintenance calculation
Here's what I get:
  • Mortgage = $1940 per month
  • Taxes = $125/month after FTB tax grants
  • Maintenance = $350 per month
Total ownership costs = $2415

The average square footage of the properties in this neighbourhood is close to 1800SF, so that is the number I've used to calculate the price per square foot ownership cost of $1.34.

Keep in mind these are per month numbers. After having done this calculation, crudely at best by my own admission, I can understand why FTBers with the ability to qualify for mortgages high enough to get them into these properties think they aren't overpaying or think that owning makes sense over renting at these prices. Especially if they can find some suite rental income in the property they buy. It's for this reason that I see strong sales to listings ratios in this market segment.

The only thing that hasn't happened to these types of properties is a listings spike. I don't think we're going to see it either. The only way that the median priced listings will rise in Victoria proper, IMHO, is higher priced homes will have to drop their prices far enough to compete with these types of homes. The ownership vs rent costs in Victoria SFH is just too close to encourage current owners to sell and then rent.

Perhaps it is impatience, but I am beginning to think that entry-level SFH prices will not drop to the significant extent required to drive median prices below the $400K mark, at least not this year. Perhaps it will require several years, maybe even longer, before this occurs and will happen slowly enough, and be neutralized by inflation, that the entry-level price doesn't seem to drop at all. I still think we're in for a 35% total price correction market-wide, but I'm beginning to think that this will really be driven by the high end, and that the low end will fair better in price drops because of the high rents Victoria commands.

We're really starting to seriously consider looking elsewhere for a better quality of life. I love this city, but if we want to live the way we want to live, have the careers we want to have, save for retirement and rainy days like we think we must, and have a small family, up-island and the major prairie cities are looking more and more attractive everyday.

136 comments:

Anonymous said...

hhv

Once again this has all just started here. Where we will be 2 years from now?

Where were the States 2 years after their peak ended?

S2

Anonymous said...

Oh bother, where will we be.

S2

hhv said...

S2, those are good questions that I can't answer. Significant price drops at the low end seem to me will require a massive external event to force a major correction. There are no local signs of price pressure in this market segment yet by my analysis, which is likely very crude and flawed. I'd love to hear other people's thoughts/analysis.

Anonymous said...

Admittedly the numbers are rough, but quite reasonable for discussion. I did a quick calculation on the outstanding mortgage at the end of 5 years and it's down just over $23,000 by the end of the term. That's a decrease of actual ownership cost of $385 per month.

You also need to calculate the real outstanding mortgage principle (adjusted for inflation expectations) by the end of the term.

My only concern might be the 5% downpayment. If a buyer does not have 20% down, CMHC will eat most of the downpayment. Between the CMHC and the unsettled market place if I only had 5% down, I'd probably wait it out.

I think many buyers on here have better than 5% saved up and would not necessarily be looking for a 35year amort. Rerun at perhaps 10% and 25 years and account for the principle reduction.

Then, where will the mortgage interest and payment be in 5 years, maybe 7%? But that's just speculation.

Fooder said...

In assessing the future of Victoria housing, I think there are other factors to consider beyond the math. If people bought over the past 4 years with a rock solid foundation to their finances, then by all means your calculations would indicate future patterns.

I don't believe people bought on math, they bought on emotion. The rental price comparison changes when a job is lost, an extra car was bought because the extra money from home appreciation, family growth.

Most people have not built in rainy day padding. For this reason more than rent to own ratios Victoria will slide like other cities. Otherwise, I'll join you down Island.

Nick said...

I'm beginning to wonder the same thing. Overpriced crap is still selling for close to asking price as the world is lurching through one of the biggest economic crisis since the 1930s. Barring a round of big public service layoffs (which I personally don't see coming), I don't know what else will convince Victoria first time buyers not to overpay for a house.

omc said...

Is $2500/month a realistic rent for 1800ft^2 in fernwood? I can't see that, it's far too high. I pay less than 1/2 that in south oak bay, and I see many rents in this neighbourhood for bigger houses under $2K. If thats what is asked for on craigslist it just isn't accurate. The local paper is a far better source.

The CMHC report showed an increase in rental vacancy as we go forward in the next 2 years. It's reality here on the island as there are very few livable jobs. If you loose your job you have to move. 1/10 works in construction and I would predict 3/4 of those will loose their jobs this year. Happened to me in the early 90s as a ticketed trades man. The CMHC report was based on the BOCs wish that we would be rosy again in 2010.

boomer said...

If your career allows, mid island makes all sorts of sense,in many ways,way beyond house prices.
(decent entry levels currently in the mid 200s-or less in rural areas- and higher end roughly 2/3 of Vic prices)

and if you need your Theater, Big Concert, or Fireworks fix, its a pretty pleasant 90 minute drive-or you can head over to Vancouver

Anonymous said...

I'll join you down Island

To those of us that have been here a few generations, it's Up Island :-)

Anonymous said...

Is the Falls Condo project next?

Vibrant Victoria Rumours

Anonymous said...

The land is the most volatile component of real estate. The value of the improvements typically change very little over time.

The properties that will be the worse off in a declining market will be properties with the majority of value in the land component.

That would be the 2 bedroom Fernwood ranchers and the homes on water front or acreage.

We are just not at the tipping point for housing. The every day Jane and Joe out there is still under the assumption that real estate on the island is a good thing.

Wait until year over year figures start showing a decline, then Jane and Joe will leave the party.

I think back when I was watching the US market in 2005, 2006, 2007 and the MSM was still pushing real estate. But once year over year stats showed a decline, thats when the market really changed.


jj

Anonymous said...

Wait for the foreclosures to materialize in Victoria. They will determine future prices, just as they have in California. I am certain that they are coming to this area and will bring about major price drops.

DD

Anonymous said...

Wait until these unusual, though not abnormal, weather patterns start raising the sea levels. I am certain that this is going to bring about large scale panic and mass price drops across the city.

Wait for it...

Anonymous said...

JJ said - "Wait until year over year figures start showing a decline, then Jane and Joe will leave the party."

We are down now year-over-year for all stats - average and median prices, sales, sale price/list price ratio and days on market. Only inventory is up YOY and that is negative for prices.

But interest rates are lower and that is all that matters to today's emotional buyers. That is why they are still buying. The price doesn't matter to people anymore - only the current monthly payment.

Take a look at the car, furniture, electronics and appliance stores. Everybody offers great financing deal with low monthly payments.

Very unwise for most but no one is listening to common sense anymore. Cheap credit will come to haunt Canada just like the US. People can't live beyond their means for long.

boomer said...

madoff did.
lol

Reid said...

I have been amazed by the recent surge in buying in Victoria. Other cities have seen an uptick but nothing like Victoria. I see the reasons as:
• Canadians are generally financially illiterate
• In general younger people are impatient and want things now; they also tend to take a short term view to the world
• People in Victoria actually think buying a house is an investment. (Homes are something you live in and no one should sacrifice putting money aside for retirement to buy a house; that is pure insanity)
• Banks are still providing ridiculous levels of credit
• People believe that Victoria is some sort of paradise
• There are good incentives for FTB’s
• Interest rates are at ridiculously low levels
• Now that people are buying (low end of SFH’s) emotion kicks in and others think it is OK to buy which draws more buyers into the insanity

When you put it all together you have buyers for entry level homes. It is now emotional and I think the buying will continue through the Spring, so you have to take a longer term view. I concluded about three months back that the only way we are going to see significant reductions in pricing will be when the blood in flowing down the streets of Victoria. We are nowhere near that today and will need to see the unemployment rate (as they calculate it today) to rise to 8%+ before it happens. Then we will start to see a change in attitude, home owners in financial trouble, foreclosures and our friends getting hammered. Until then, park your idea of buying an entry level house unless you are OK overpaying.

My wife and I have the ability to live pretty much anywhere, but she wanted to be in Victoria. Given all we are seeing in Victoria today, we have now decided to defer the decision to buy in Victoria and are seriously considerng the Okanagan. Based on market stats, the real estate market in the Okanagan is going to get hammered very hard and there is no spring buyingfest to save it from this fate. We enjoy the weather in the Okanagan more than Victoria especially after this winter which was miserable. We will give Victoria 6 to 9 more months to turn (which I am now doubtful will happen) and then we will bail.

Anonymous said...

Check out Saskatoon.. I speak from experience when I say that a house that would have sold for $375000 about a year ago would now sell for $275-295000. As we just bought in Victoria and have been shopping for the last year, we only got about a $50,000 discount on a house valued ~$600k.

Are we stupid - maybe? Do we think Victoria is a bit of a paradise - yes we do and it was worth the the premium.

And now to keep my sanity I must sign-off these Victoria real estate blogs.. I need to remain ignorant to future drops in value here - but at least I don't have a mortgage.

patriotz said...

People in Victoria actually think buying a house is an investment.

Of course a house is an investment. An investment is any asset that yields a marketable future return. You can sell the right to live in a house (i.e. rent it out), or you can sell the house itself.

That doesn't mean it's a good investment. Whether a house, or anything else, is a good investment depends on its purchase price versus its future earnings.

If you lose money on house it's still an investment, like a stock that loses money. Just a bad investment.

I don't understand how anyone could think Victoria RE is not going to go down a lot further. It's already going down faster than any US city. Just wait under after May when the ugly truth about BC's economy sees the light of day. The 15-20% drop we've seen to date is just the opener.

Reid said...

Patriotz, my point on the investment is that the average person is willing to sacrifice saving for retirement in order to justify buying a house in Victoria; I think this is moronic.

I also think that many people in Victoria could care less about statistics and data especially from abroad (BC stats would be considered abroad for those I talk to in Victoria). They are so convinced that Victoria is insulated from recessions that they pay more attention to the local real estate market and whether people are buying. If they see other idiots buying, this just drags them in.

So my read is bad news will hit the world, US, Canada and BC, but it will not stop the local buyers. The only thing that will slow them down is when they see with their own eyes people they know getting hammered by by this recession/depression. Today credit is more than available, so we need to see job losses. To date we have not seen much in the way of significant job losses.

patriotz said...

Yes I agree.

I think the problem is that the general public has a bogus idea of what an investment really is. They think it's "something that is guaranteed to make me money". Apart from GIC's and government bonds, there is no such thing.

Everything else is a risky investment which may or may not make you money, and must be evaluated by the purchaser as to its potential risks and returns. When this scrutiny is thrown out the window in favour of rationalizations such as "it's different here" or "this time it's different", you get a bubble.

Anonymous said...

Victoria is headed for another 30% drop. It will just get around to it later than the rest of the planet, like it does everything else, but rest assured, it will happen.

It's part of the charm of the place. Time machines rightly should be cherished. Although, those permanently set at a preset interval are not always convenient.

One person's inconvenience is often anothers' opportunity though.

JoeThePlumber said...

I think Victoria is insulated due to the fact that it's situated on an island. The ocean protects us from falling house prices and economic turmoil. That's why I'm in the market for a house right now. I'm an aprentice plumber and my job is totally safe because I work for a firm that builds condos.

Anonymous said...

Those numbers seem to high. Typically people rent less than they need and buy more than they need.

Just Janice said...

After just returning from sunny California and chatting with some tourists from Phoenix, I would be astounded to discover that cold, rainy, and overpriced Victoria is going to be able to compete. Even my relatives in Alberta are now talking about buying in Phoenix instead of Victoria. Better weather, cheaper houses. Victoria is nice, but let's face it, we've now got some pretty stiff competition. So the traditional influx of buyers (re: wealthy Albertans and other Canadian retirees and some Americans) are no longer seeing us as a 'good deal'. That leaves us with those who actually live and work here. That leaves us with very unsustainable prices. We are in a bubble, and anybody who believes the air can't be let out more than anywhere else, is living in their own private and very fragile bubble.

While financial savvy seems to be a rare quality, it is quickly becoming more the norm. This is going to impact the market.

In Victoria, the rents to mortgage calculations are weird. Relatively small variations in rent give large variations in quality. For example, $2200 in rent gives you waterfront, while $1750 gives you Fernwood. So for 25.7% more you get more than twice the house renting.

Job losses are coming. Given the lack of financial sanity, I would expect the impact to be worse than it was historically. When people don't practice financial hygiene (ie. keeping a debt to income ratio reasonable and having enough for a rainy day), the risk of an financial epidemic rises. So I'd take whatever the impact on RE was of the 1980/81 recession and double or triple it to get something that remotely resembles what we're looking at today.

Anonymous said...

madoff didn't live beyond his means. He lived beyond others' means.

Anonymous said...

"madoff didn't live beyond his means. He lived beyond others' means."

Sounds like our current banking system.

Metaldwarf said...

Victoria has not seen much in terms of job losses or layoffs. Though it is coming. people see it on the horizon but there are still help wanted signs in many windows.

I think and interesting event will be the upcoming provincial election. Should the conservatives win, they may cut govt. jobs, and many who lost their jobs may find it difficult to get a new job. 6 months later when EI runs out we will see damage to the RE market. spring 2010 will be ugly.

If the NDP win, they will repeat their past and spend us into a hole. Things will be buoyant and rosy for a year or two, RE will boom again. Then the province runs out of money, taxes go up and we have a mini recession in BC just like last time. This might also be just in time for interest rates to start rising, Forcing many home owners to sell as payments become unmanageable. The problem will be exacerbated by 0/40 and 5/35 mortgages. Think crash of 81 but worse.

Liberals retain, somewhere in between.

Regardless some will be hurt, some will be better off.

We still haven't seen economic pain in Victoria, when job loss, taxes, and non-zero interest rates come to town, things are going to suck all around. When things are at their worst that will be the time to strike.

Anonymous said...

I'm a longtime lurker and first time poster.

First I'd like to say a big thanks to HHV and the rest of the bears in Victoria. You saved me from jumping in at the top of the market.

Next I'd like to make an observation. I watch Craigslist pretty much daily and after months of ridiculously over priced rental suites we are finally seeing the odd reasonably priced detached house every couple of days. I'm thinking the speculators are starting to feel the pinch and soon we'll see panic as they have to rent these places out for whatever they can get. What are others seeing? Is this the beginning of a drop in rental prices?

Cheers,
Hachiroku

Anonymous said...

Within two years rents will be half of what they actually are today... and 70% less than what clueless idiots ask for on craigslist.

Anonymous said...

Aunty Emm, aunty emm...there's no place like home...there's no place like home.

IC4 said...

Yes, I also give thanks to HHV and this blog with its many fine comments. I've been studying the Victoria market since 2007 when I paid a visit after a long absence. The prices for SFH shocked and then depressed me. I live in another country and am homesick for BC. Most of my family live in Victoria. One of my family members has moved up island in the last year, because prices are lower there. But they live in a semi-depressed area and haven't yet been able to get a job. And the house is old and needs a fair amount of maintenance, which could rob them of the savings they made by buying what they did, when they did.

Here's an example from the country I live in now:
on my street the highest price achieved was in 2006, at $660K. One of my neighbours has just listed this week. His asking? $749K. The house itself has only 1 bathroom and the original kitchen from the 70's. Much inferior to the house sold in 2006, which was near the top of the boom. The owner says: "I want to walk out of here with $700K cash-in-hand." What a dreamer. And typical of the attitude of vendors in Australia. Buyers are looking for blood, and if they don't see any they move on to the next property. The economy here is contracting but not so as you'd notice on an ordinary level. The trades are still busy. The traffic to the private schools is still heavy. When the coffee shops start to lose business then I will believe that we will see real changes in property prices. (Incidentally, Starbucks has not done well here and closed most of its shops last August)

House prices are high and inventory is rising. Ergo, nothing selling really. Sounds familiar, doesn't it?

But there are a lot of former high-flyers going down in flames. Many of them developers, and all with the same story. They got in over their heads. They got caught up in the "irrational exuberance" and we need to be mindful of their example. On a smaller scale the market in Victoria in the Spring is a temptation to be irrationally exuberant.

Because of this blog I've decided to wait until 2011 to make the move. Just want to chime in that your efforts HHV are worthwhile and appreciated.

patriotz said...

One of my family members has moved up island in the last year, because prices are lower there. But they live in a semi-depressed area and haven't yet been able to get a job

Not trying to get personal, but what kind of person just picks up and moves somewhere so they can buy a house more cheaply, without getting a job first or at least checking out job prospects?

Anonymous said...

Retired. Willingly or unwillingly.

Anonymous said...

Re: Anon 6:40

I see the wicked landlord witch of the island has weighed in with the usual nonsensical dribble.

IC4 said...

Well patriotz, this family member got married to an Islander who hated living out of BC and convinced them to move back out to the Coast. Various promises were made about work and money. So far this hasn't exactly panned out. As to why they had to buy a house immediately---it was %100 emotion. Saw the house and *had* to have it. A seller's dream...

Anonymous said...

"I see the wicked landlord witch of the island has weighed in with the usual nonsensical dribble."

Yes, but simply following the dribble of 6:29. If anyone actually thinks rents will be 1/2 of today they are definitely in a dream state.

Much of the real rent increase over the past 5-7 years has been direct cost. Property tax, for example, in some areas is up 30%and will be up again this year.

hhv said...

"Much of the real rent increase over the past 5-7 years has been direct cost. Property tax, for example, in some areas is up 30%and will be up again this year."

Cost has absolutely nothing to do with rental rates. Rates are determined by availability of properties (supply) and number of renters seeking a place (demand). If a renter won't agree to pay the rent, the landlord will do one of two things: drop their rent or sell their property.

I'd openly giggle at the first landlord that told me they had to charge more because their costs went up. Good luck with that in a declining demand market. We haven't seen the real supply/demand levels in Victoria in years, either, because industry won't give us access to the truth, or they don't know the truth.

womp said...

Not to mention... property taxes going up 30% over 5-7 years is what... $500? $600 a year for the average house?

Rents are up about 75%.. to the tune of $5000 - $6000 a year.

Gimme a break.

womp said...

... for an average 2-3 bedroom house I mean.

Anonymous said...

Anon 5:37, are YOU in for a wake-up call. It's not called a Great Depression for nothing.

Supply and demand, coupled with rising unemployment, will hit you and yours like a ton of well-aimed bricks.

You should PRAY for ONLY a 50% reduction from today's rates.

And denial blogging doesn't qualify as praying.

dub said...

B.C.'s EI recipients up sharply: StatsCan - Biggest increase in Canada here on the West Coast


According to the list at the end of the article, we're in 3rd place. I find it strange because I've been told, over and over again, that our high-tech jobs and government employment made us safe from this kind of news.

B2B said...

I will be having my own enforced holiday from the Victoria market - I have taken a job in Europe and we move in early April. We think we will stay back there for at least a year or two, so we won't be looking at property again on the Island until 2011 at the earliest.

I'll still be lurking on these sites - you guys and gals will be my information source for how the property debacle unfolds!

Anonymous said...

No, no, no. We are insulated here.

Don't mess with my little dream.

S2

Moved Away said...

I have been an occasional reader of this blog. I have moved from Victoria to Halifax last September partly because I could not afford to buy a decent house for my family. I must say, I do not regret the move. The people here are much nicer and they have a lot more disposible incomes (and drive new cars). There is less pollution and also there are none of the legions of drug addicted dangerous "homeless" shopping cart types found in Victoria wandering the streets. I have bought a home on the Atlantic ocean on 3 acres of land for $350,000 and there are many more job opportunities here (Halifax has plenty of company head offices). I also do not miss Victoria's dreary gray winters. Winters here are a bit colder, but definitely, we get a lot more sunshine.

Ryan said...

"We haven't seen the real supply/demand levels in Victoria in years, either, because industry won't give us access to the truth, or they don't know the truth."

I'd wager it's the latter. The only data anyone has is the vacancy rate in purpose-built rental apartments, of which there hasn't been any new supply in decades. All the new supply is amateur landlords creating suites or buying condos, which are impossible to track.

Wenna said...

Just wanted to share this craziness. Went looking at 2 houses in Rockland this weekend. We are trying to be patient, but like to look every once in a while hoping there is a deal out there. We saw 2 houses listed over $700,000. Our realtor (who, unlike many others I have dealt with, is a really stand-up guy who has talked us out of two houses so far) gave us the goods based on what the listing agents had told him. 1 house had an accepted full-price offer on it already that had collapsed due to financing. The 2nd house had a full price offer that had similarly collapsed, was currently negotiating a second offer near asking price and had a third offer in the pipes. What the? We immediately walked away.

Dave said...

Your example seems about right for the price of an average home (i.e. $2,500 per month). I think the maintenance is a little high, but I don't know where that came from.

Most people buying homes put down more than 5% (e.g. move up buyers, existing owners) and most don't amortize for 35 years. Overall, your example is pretty close to what a first time home buyer might be looking at for cost.

And I agree with you. $2,500 isn't really a lot of money. It isn't far off from what rent might be. And if not, what's a few hundred bucks to build equity and experience appreciation over time?

When I purchased my first condo, I still paid a premium over rent. My rent was $750, but my monthly ownership costs (mortgage, strata, tax) were around $1,200. On those metrics, most people would say renting was better. Fortunately, history showed otherwise.

hhv said...

Dave, please re-read, you missed the point entirely I think.

This wasn't about "most people," it was about first-timers justifying purchasing in the entry level SFH market. And most first timers are using 35 year ams.

Most people aren't looking for a SFH in Fernwood. Most people can only afford to buy a SFH in Fernwood though, so that's where the market pressure is right now.

For the record, $2500 is a large amount of money to spend on housing, especially when you can rent for $600+ less, per month. And especially when less than 6 years ago, a mortgage payment was almost 50% less for the same property.

"And if not, what's a few hundred bucks to build equity and experience appreciation over time?"

Did anyone build equity last month? Or the month before that? How about last year? If anyone bought before late 2006 or early 2007, they may have some equity, if they bought after then, they have built none, and if they used a low-down extended amortization mortgage (like most FTBers did), they're likely underwater.

Owning is not always better than renting: the time you get into the market is likely as important as the time you spend in it.

Why is it always that someone comes along and says "see how much money you make over time" when they don't acknowledge all of the costs associated with "making all this money" including the lost opportunities to make real money somewhere else in a far quicker manner with less risk than you would have assumed had you bought a home in April 2008?

dub said...

Dave said "$2,500 isn't really a lot of money."

I don't think that Dave really believes this statement to be true; Rather, I suspect that he's attempting to twist HHV's post to make it sound like $2500 is a completely reasonable/normal amount to pay each month.

For interests sake, for the average person/family to meet the standard CMHC P.I.T.H (32%) ratio at $2500/mth, that family would have to make at least $90K/year.

DrippingWithCash said...

Most families I know make at least 90k if not more. I don't believe for a second that this is uncommon. A 100K a year is not that much money in this day and age.

Anonymous said...

"A 100K a year is not that much money in this day and age."

LOL. Where do I sign up?

Dumb Canuck said...

Experience housing appreciation????

Since when have we had a feeling of a house? For God's sake, this is the whole frigging problem - due to Realtors or Mortgage Brokers like Dave, people now feel as though they have to have the luxury of feeling appreciation.

What bullshit. Live in the moment and enjoy your families instead of getting caught in the same trap that told everyone that they had to have a SUV and a flat-screen TV.

As for 2.5K per month being a reasonable payment, that would take one high staff level provincial government salary and one decent trade salary to afford. Not too many first time buyers in that category.

Yes, our friend groups likely earn 90 or 100K household income. That is likely because we earn around the same. Doesn't mean that everyone else does.

Dumb Canuck said...

On a different note, HHV, Greg and others have been noting that quite a few houses have been selling at the low end of the market recently.

Great - if this is really the case, then the median price will have declined, leading potential buyers to have the emotion that they should get a discount over asking price. And leading sellers to think that they need to make a deal. Causing prices to come down.

Emotions work in two directions - greed and fear. We all have them. Proper decision making takes out emotion (which a good marketer will use to connect us to a product) and makes a rational decision.

Will you buy, sell or hold based on emotion or fear?

JamesJ said...

Actually I've got a serious question for the gold pimps. If you think the dollar is useless and everyone should buy gold then what about this scenario:

1) You buy a house (and overpay like everyone else)
2) The dollar busts, china discovers that they can print their own worthless paper
3) Your debt is worthless

Isn't it better to buy a house?

Anonymous said...

Here's a better scenario:

1) I don't buy a house until the bottom is in (once all paper crashes)

2) I'm able to buy Villa Madrona (or something similar but with good taste) for a couple of bars of gold

3) I own the place free and clear and have plenty of gold bars left over for electric fences, a security staff of 40, and 15 german shepherds to keep out the equities traders who lost everything in the market crash and the people in the worthless houses who can't afford hydro nor $1000 loaves of bread.

Oh, but I will give out Christmas turkeys to the rabble once a year to keep up appearances.

God bless us all, every one.

patriotz said...

When you read stuff like the previous post, you know the top is pretty well in for gold.

Kind of like the "average house in Vancouver will be a million dollars by 2010" that we heard last year.

Also have you noticed that the gold bugs start popping up on the board when gold is falling (down $30 in the last 2 days)?

Anonymous said...

Perhaps you could hover over the masses in your Trump Helicopter and toss out Christmas Turkeys for us.

God Bless You.

Anonymous said...

Many posters have expressed concern that people are buying houses that they cannot afford. The lure of easy, cheap credit is more than many can resist.

Now that house prices are starting to fall people are getting in financial trouble. Here is an article from today's Nanaimo Daily News.

Foreclosure business is booming in Nanaimo

Kent Locke, a lawyer who handles foreclosures for banks here and in Vancouver, used to bring just a handful of foreclosure applications to B.C. Supreme Court each month. While the foreclosure rate is not as bad as it was a decade ago, says Locke, at the last foreclosure hearing, held about twice a month, Locke had 14 applications, and will bring eight or nine to the next one.

"There's been a substantial increase. About a year ago it started to creep up, but now it's really busy. It's been really big."

Locke attributes the problem to people wanting a lifestyle they cannot afford and banks continuing to lend them money based on home equity. That worked until the real estate bubble burst. A growing family or unexpected expense never meant spending less, he said, but a trip back to the bank.

Anonymous said...

Our household income is just under 90K and there is NO WAY that I would feel comfortable paying $2,500/month for housing. I like having a life outside of a housing payment, thank you very much. We pay under 1K (a little under, not much), and I would still like more money in pocket. We do put money away each month, and I wouldn't be able to do that at all if I were spending $2,500 just for shelter. That's ridiculous. I would want to be making a lot more than we currently do before I would even think about spending that on housing.

Chickinvic

Reid said...

I think that a lot of these buyers want a suite (or suite potential)to offset the $2,500 per month. This is why houses with suites sell as it allows ignorant FTB's to justify overpaying for a SFH.

Anonymous said...

Patriotz, I'M always here. And I only "popped up" to respond to a goldonite question.

By the way, gold has been creeping back up the last week or so. Must not be watching.

All kidding aside, we really are heading for the very worst of times for regular folks, and the best of times for the filthy rich. And there's only one way to get from one side to the other.

And it ain't paper. And it ain't real estate.

Anonymous said...

P.S. The last two "profit-taking dump tops" for gold have been over $1000. We're not there yet.

patriotz said...

As in "pump and dump"? Well have fun, but I'm not playing.

Anonymous said...

Me either. I'm only clarifying where the next top will be in, and only temporarily. There are far higher tops ahead.

vg said...

Gold stocks have been doing OK but price of gold needs to bust through and hold $1000 for a decent length of time and build a new base. Only then the gold bull will be officially on the loose.

Anonymous said...

Agreed. Soon enough.

Ryan said...

I really don't see how you're supposed to get rich buying something which generates no income, costs money to store and has as much chance of going up as down. Seems like a good way to get poor.

mln said...

You just have to convince a bunch of other people that it's the way to riches, and then pass it on to another bagholder. It's easy!

Art Vandelay said...

I just want to say Reid's post at 6:45 on March 22 was the most clear-headed opinion on Victoria and its real estate that I've read in a long, long time.

Well done.

Art Vandelay said...

Patriotz wrote: "Apart from GIC's and government bonds, there is no such thing (as something guaranteed to make money)."

You're not accounting for inflation risk, which is a common mistake among extremely conservative investors.

I recommend Gordon Pape's books as a good foundation for actually learning something about economics.

You spend a lot of time on these blogs and people no doubt think you know what you're talking about. But you are as dangerous a myopic bear as others are dangerous myopic bulls.

Art Vandelay said...

Patriotz wrote: "Not trying to get personal, but what kind of person just picks up and moves somewhere so they can buy a house more cheaply, without getting a job first or at least checking out job prospects?"

My god, that's practically the story of this continent. Are you that ignorant or that afraid of the world?

Art Vandelay said...

Drip with Cash: Median household income in Victoria is <$50,000. Get out more, man.

Art Vandelay said...

JamesJ wrote: "I've got a serious question for the gold pimps. If you think the dollar is useless and everyone should buy gold then what about this scenario:

1) You buy a house (and overpay like everyone else)
2) The dollar busts, china discovers that they can print their own worthless paper
3) Your debt is worthless

Isn't it better to buy a house?"

No. Real estate is immoveable and highly illiquid. Gold is tranportable and highly exchangeable.

Art Vandelay said...

Patriotz, gold speculators care about what gold does day to day. They hope for a return on investment.

Gold accumulators buy for the long term safety. They know gold pays not dividend.

You need to learn the difference. I recommend financialsense and dailyreckoning as a couple of websites where you can start to learn some fundamentals about economics. Your nincompoopery is astounding.

Anonymous said...

It's about time, thanks Art

Muriel said...

Art Vandelay wrote:
"I recommend Gordon Pape's books as a good foundation for actually learning something about economics."


Pape's books may be informative, but since he chose to take a very prominent role as spokes/salesperson for reverse mortgages for seniors (the so-called Canadian Home Income Plan), I cannot grant him any credibility in matters of economics or personal finance. He may be very knowledgeable, but I could never trust him. I will check out the other sites you mentioned, as I am interested in learning more about economics.

Anonymous said...

HHV,

You better get a new post or this gold topic will take over like it did on Prairieboy's blog a few weeks ago.

olives said...

Art and Muriel,

HHV has links on his front page to two fabulous analyst's blogs - Mish and Futronomics, which IMO are far far superior to anything on financialsense and dailyreckoning.

Anonymous said...

When it comes to gold vs. a paper promise from a government or private for-profit central bank (Federal Reserve), I'm sorry, but only an idiot would choose paper, even with the promise of further (worthless) paper "dividends".

Who was it raining on wall street in the last crash? Holders of paper or holders of gold?

It's never rained goldbugs yet, folks, no matter how bad the gold dive.

And there will be a future monetary standard soon enough; there's no other way to get the world back on track and no other way to sucker anyone into yet another US ponzi scheme. And gold doesn't pollute.

He who has the gold makes the rules.

Anonymous said...

Anon 3:10: When you really need me, have no fear; Ebeneezer will be there for you.

Reminds me of a stupid radio promo they pulled in the US... dumping out live turkeys to a crowd of families for Thanksgiving... the turkeys couldn't fly, went splat and made an awful mess and upset a lot of families.

Mine will be plucked, frozen and delivered by Tiny Tim on his new bicycle. Before he dies from consumption.

Anonymous said...

"He who has the gold makes the rules."

Tell that to Nixon LOL.

Anonymous said...

There are not too many, including myself, on here that are (or are going to be) heavily invested in gold, so you're wasting your keystrokes.

Not that it's not interesting, it's just fallin'.

Anonymous said...

Home prices fall 2.4 percent in January

March 25, 2009

TORONTO (Reuters) - Canadian home prices fell 2.4 percent in January from a year earlier, reinforcing views that the property market was cooling, according to the a report issued on Wednesday.

Home prices in Calgary, Alberta, suffered the biggest year over year drop, falling 8.2 percent in January from the same month a year earlier. That was followed by a 4.2 percent slide in Vancouver, British Columbia, and a 2.4 percent fall in Toronto.

Anonymous said...

Earlier this month, the Canadian Real Estate Association said the average home price fell 9.2 percent to C$281,972 ($229,245) in February from C$310,379 a year earlier. Prices were lower in 14 of 25 major markets that the association measures, with the biggest drops in Vancouver, Calgary, and Windsor, Ontario.

Anonymous said...

Most posters on here beleive that a running average is more relevant than looking at year-over-year stats (or at least that's what they were saying back 3-4 months ago.)

Anonymous said...

It's interesting how some areas of this country can demand a higher dollar value for it's housing than other areas. Not really news but you can graphically see why.

http://watch.ctv.ca/news/latest/flood-evacuations/#clip154044


But a great place to get that "average home for an average wage"

Anonymous said...

Anon 8:34, suit yourself, I just accumulate more at a lower cost, just like the big boys.

P.S. It's not falling. Bobbing along just fine, thanks. And just wait until Obama and Bernanke's printing presses complete their damage.

Anonymous said...

Resting my case:

Sailing along just fine without you, thanks!

Anonymous said...

It's fallin is your message, not the gold. Falling on deaf ears that is. Most on here are not likely to be heavily invested in gold any time soon. I'm certainly not.

Are you the girl buying 10K gold rings on Craigs List?

RichManJohn said...

I think it's obvious that Victoria is different. This story in the times columnist confirms what we already know : Victorians are among the most wealthy in the nation. There's just no way house prices can go down because of that.

greg said...

If you read the TC shill peace again, you'll see that while Victoria rates high in the national rich list, in fact, the wealth of Victoria households has gone down since the year before due to the decline in housing.

Hey, in the 1970s Port Alberni was in the top ten. Look at the house prices and household wealth there now.

AVERAGE VALUE OF PRIMARY RESIDENCE WITH CHANGE IN DOLLARS OVER PREVIOUS YEAR

VICTORIA VANCOUVER CALGARY
$437,744 $460,380 $345,799
-$47,560 -$56,901 -$35,878

Link

Link

Anonymous said...

I am just not understanding this Pitney Bowes article?

So a company that makes ink jet printers and photo copiers is now a knowledgeable source for the TC? Am I missing something here - when did Pitney get into the real estate game?

The article states "net worth". These numbers do not appear to be net. I am guessing this information is either poorly researched by Pitney or poorly written by the TC.

This article does what it is suppose to do. It fills an empty space on the page.

Anonymous said...

RichManJohn said "Victorians are among the most wealthy in the nation. There's just no way house prices can go down because of that."


RichManJohn- what a ludicrous statement. The more wealthy a person is, the cheaper we are. We got wealthy in the first place by busting every price to rock bottom on everything we ever purchased in our lives.

It's not the wealthy driving up real estate prices; on the contrary, we're the biggest vultures of all, waiting for the bottom and timing it perfectly with volleys of lowball offers. And remember; the wealthy are the last to have to sell, and only have to buy when we're dealing with a too-good-to-pass-up deal from a desperate seller.

No, it's the clueless first-time buyers with nothing, armed with "free" money from the banks that drive up prices, and they're soon going the way of the dinosaur along with the dodgy loans that enabled and enslaved them for their foreseeable lifetimes.

You MUST be new here.

Anonymous said...

Anon 6:34, no, I'm not on craigslist. I've got five figures in gold, soon to be eight.

Or nine-plus if things keep going as the Big Boys have planned for quite some time now.

Enjoy your paper. It will make a nice fire next winter.

beagle said...

If the currencies become worthless it's going to be pointless to own gold. Either someone will steal it or the government will confiscate it.
If you think a collapse of that magnitude is going to happen better to buy guns, solar panels and seeds and get yourself a plot of land up in the north island near a coastline.

Anonymous said...

We are wealthy. As long as you consider the value of our homes. However, in order to tap into that wealth, you have to borrow against the home. You could sell the home, but then you have the cost of renting. So, should the value of your home be counted in your wealth? I think it should, but it should be weighted differently as $200,000 in home equity is not the same as $200,000 in the bond market.

Maybe we should just consider articles like Pitney Bowes as bird cage liners.

Anonymous said...

Beagle, people will always try to steal and the rich will always thwart them behind their castle walls.

No need to Mad Max it. The uber-riche will impose an order, based on a firm non-paper monetary standard they already own a ton of.

As for the gov confiscating gold, in the US, duh. In Canada, not so likely. Canada is far richer in natural resources than the US and nowhere near as imperialistically needy or relentlessly fascist.

Anonymous said...

STFU about gold and how you're going to rule the world.

What a tool.

patriotz said...

So, should the value of your home be counted in your wealth?

The value of your home is the value of the accommodation it gives to you. In other words it's like a bond that pays an amount every month equal to the rental value. What your house is really worth to your wealth is the price of a bond that pays the same income.

So for example if your house provides you with a rental value of $1000/month after expenses, and bonds pay, say, 4%, your house is really worth $300,000 to you because a bond of that value would provide you with the same income.

But like a long-term bond, the value of your house will fluctuate with interest rates.

It's not the market price, because everyone can't sell their houses, because there's nobody to sell them to.

Anonymous said...

Anon 12:32:

Burn, Baby, burn.

slumberingbear said...

We're seeing a significant bear market rally in real estate. This is the spring fling/bear belly flop everyone was hoping for. This will entrap the last of the fools. After the fall and for sure after what will be the worst christmas in retail history (christmas 2009) we will see some real carnage in all segments of the market.

Reid said...

I have been living part time in Victoria for the last 1.5 years and have been telling people that real estate prices have to drop. This time last year I was preaching the fundamental argument, but I was considered some sort of idiot. The after this fall and the global meltdown, I thought people in Victoria would wake up and see the bubble. But I was wrong. I must have talked to at least 200 people over the past six months on the this topic and only ONE came back and told me that there will be serious implications in Victoria and she just got laid off from government and grew up in a resource town where she has seen it before. Outside of these blogs I have not met one other person who really believes Victoria will suffer and real estate will get hit hard.

The others all are convinced that this town is insulated in some form or another. "Victoria always survives, we are diversified, older people that are let go will move to Victoria" and so on. It does not matter if they are 25 or 65 they are seem to share the same basic view; Victoria will escape this thing.

Since perception is reality and many of these FTB’s are likely getting verbal support from their parents who are also in denial over the situation this is helping drive the low end of the market. What we need is some serious carnage to shake the ridiculous level of denial that exists in this town.

Anonymous said...

But what kind of bond. A one year, three year, 25 or 35.

I suppose one could argue that you should choose one that matches your amortization schedule. Yet that would not be right as most people would still live in the home after its paid off. So how about a very long term bond say 100 years. I believe some 100 year bonds were offered a month or two back and they were at around 10 percent.

Now how about the rental value after expenses. Well my house has nicer blue walls than the one renting at $1,000 so my rental rate would be $1,100.

So what is the worth of my house. Well, your home is $300,000. But my home with the nicer wall color would only be $132,000?

mmmm, seems these numbers can be manipulated until you get the answer you want.

Don't like the answer. Just change the rental rate that you would pay to live in your own home and the term of the bond.

Okay, I'll change the wall color to green and then my home will have a rental rate of $1,500 at 2 percent.

Well, that's $900,000.

Hey, I like this game. I'm making money now.

Ryan said...

"You could sell the home, but then you have the cost of renting. So, should the value of your home be counted in your wealth? I think it should, but it should be weighted differently as $200,000 in home equity is not the same as $200,000 in the bond market."

I think it's only because we've been in a bubble that the two don't seem equivilent. In a balanced market, the cost of renting and the cost of owning should be about the same; there should not be a 50% or 100% or 200% ownership premium.

I think that in recent years, our intuitive grasp of the relative worth of different things has been stretched to the breaking point. With hundreds of dollars or thousands or even tens of thousands, we have a common sense grasp of what something ought to cost compared to other things. If one car costs $25,000 and another costs $20,000, that means you could get the more expensive one as well as a home theater system. Then you evaluate the worth of the purchase based on you your personal preference.

With real estate, it used to be like that. But with the bubble, house prices don't fit into our common sense understanding of value. Real estate has become this completely separate thing, requiring magic math and rationalizeation to justify the purchase. Spending $700,000 on a house makes no sense, intuitively. It isn't even possible for first time buyers. So we've come up with all sorts of justifications to try to make it makes sense, like 40 year amortizations and counting potential suite rent as income "you have to sacrifice if you ever want to own a home, because it'll cost more next year."

Hopefully once the dust clears it will all make sense again, and we'll be able to evaluate the cost of buying a house against the cost of a vacation to Europe and a sailboat, without having to pretend real estate is some magical elfen artifact that doesn't obey the laws of nature.

Dumb Canuck said...

Reid (4:40)

Welcome to spin. The Reagents, the brokers, the banks and the TC want us to believe that we are insulated. The are preaching messages to everybody that we are insulated. And people believe it.

Yes, there are those of us who look at the markets and numbers independently, but we are a surprising minority. That is why blogs are dangerous to media and lobby groups - if the blog is balanced and there is free discussion, then the truth can emerge. And the spinners (aka Dave, Sitting Pretty, Fred and countless versions of anonymous) get countered with factual arguments.

The average person on the street wants to believe that all will be well, that buying a house is a good investment, that they won't lose their job, etc. And so they believe the spinners who manipulate that.

Unfortunately now that MSM doesn't have much investigative journalism, there really isn't a two-sided discussion, but instead a regurgitation of press releases pushed during editorial board meetings.

Reid said...

Dumb Canuck

I agree, but I am amazing at the percentage of people that believe this BS when the facts and reality are so readily available. I came to Victoria thinking the working class was amongst the most educated in BC. But when I talk to these people, I am amazed at the level of denial with which they live.

Anonymous said...

"no, I'm not on craigslist. I've got five figures in gold, soon to be eight.

Or nine-plus if things keep going as the Big Boys have planned for quite some time now."

Don't you mean nine fingers? One 10K ring for each digit, net worth $230 not counting the smoking habit? Guess which one I've reserved special for you :-)

Dumb Canuck said...

Reid,

Same where I work. People get caught in all of the spin that is spun:

- house prices never go down (no longer used)
- we're above full employment (no longer the case)
- everyone is moving hear from elsewhere (no longer true)
- if you don't buy now, prices will be out of reach soon (b.s.)
- we're on an island, its different in Victoria (never was true, just ask San Francisco)
- interest rates are at record lows (ignoring the probabilities of increases later on)
- housing is a great investment (a good speculative one for a few years)
- etc

This is human nature. We don't want to accept different truths than we currently believe. It scares us and shakes us up. We prefer to do the same thing over and over again until we hit bottom.

Which, unfortunately, a lot of new buyers here will.

CrackSmokingRules said...

What you bears don't get is that owning a house is a special privilege only the few like me get to enjoy. It takes hard work and sacrifice to own a home here and it always will. If you can't accept that then by all means keep paying the landlord's mortgage throwing your money away on rent!

Anonymous said...

Anon 7:27... I'll be sure to invite you to the housewarming at Villa Madrona.

To clean the toilets. After the guests leave.

Anonymous said...

Present for all the paper-pushers and goldonite morons:

BC Bankruptcies up 47%

BearMuncher said...

47% rise to 792 bankruptcies in BC. That's hardly something to squawk about. Meanwhile in insulated Victoria bankruptcies were up 3%. Bears, keep trying but I think your constant search for a disaster is failing and failing badly. Now that spring is here the market has taken off big time.

Anonymous said...

Come-on Goldfinger, now I just feel used.

patriotz said...

But what kind of bond. A one year, three year, 25 or 35.

The longer the better, because a house is like a perpetual bond. There is no commitment from anyone to buy it back from you in the future for a given price.

Also with regard to risk, it should be a corporate bond, because future rental value is uncertain.

In fact the best point of comparison might be perpetual preferred shares, which are yielding about 7-8% these days.

As for your other nitpicking, this is just a way to estimate your house's real value in terms of wealth. You're not going to get it right down to the dollar. But it can make it clear that the market value of your house is disconnected from its actual economic value to you, unless of course you sell it. If you don't sell a house, its market value is of no benefit to you.

Fooder said...

The saddest part of the entire housing run up for me has been the obvious acceptance of marketing by the masses.

Everything that our culture put any value in has been turned into a marketing tool that can be used to extort the maximum amount of money of of people. Look at the homes that are being sold to people now. They are built using the cheapest materials possible while hitting as many of the surface details as possible.

Lets go back to having people buy their own piece of land and build a place to live on it. Does anyone know the percentage of new home that are built (with help of course) buy the owners? Not build with the sole intention of selling. That's were it needs to change in my books.

flip_this said...

Seeing all this renewed spring buying activity and trying to understand who is buying, I looked at the Statcan census data for Victoria (http://www12.statcan.ca/english/census06/data/trends/Table_1.cfm?GEOLVL=CSD&GeoCode=17034&PRCODE=59&T=CSD). I was quite surprised to learn that median household income in Victoria is no less then $38,885!!! Does that mean that the price to income ratio is astronomical 11.5 instead of usual slightly elevated 4??? Could it be that Victoria qualifies for the Guiness book of records? For example, LA at the top of its housing bubble boasted more moderate 11.2 price-to-income ratio (http://www.demographia.com/dhi-ix2005q3.pdf).

The Statcan census data also shows that from 96 to 06, median household income increased from $37,858 to the above mentioned $38,885 -- a grand total of thousand bucks in ten years!!! And the real estate prices? Did they quadruple?.
I used to think that the average household income here was in the neighborhood of 70K but obviously this is not the case. Can Statistics Canada information be trusted? I would like to hear opinions whether there is some catch in this data, or maybe I am missing something... So, needless to say my "who is buying?" question can not be answered from the Statcan data.
Another curious statistical fact about Victoria is that 20% of the workforce is employed by the federal government (http://www40.statcan.gc.ca/l01/cst01/govt58a-eng.htm). Sadly for anybody waiting for the prices to drop this does make Victoria RE market more resilient to global depression.

Anonymous said...

To use stats can median data in relation to the median home price does not mean that the average person is paying 11 times their income for a home in Victoria.

What the stats Can data and median home data can show is a comparison between one period of time to another. For instance during a recession this ratio may be as low as 3 and during a period of economic expansion this relationship could be 11.

The difficulty in trying to relate this multiplier to the everyday person is that in each circumstance the amount of the down payment is different.

I would rather have a matrix showing the monthly mortgage and expenses related to home ownership with that of the typical household income of home owners and prospective buyers.

My guess is that for the first half dozen years of this market you would find this rate falling. Some people would be saying that housing was getting more affordable in relation to monthly payments. However, I believe that this was a misleading statement made by many bank economists and lulled many people into the "buy now or be priced out forever."

People were not concerned about retiring a debt that was growing rapidly with each new purchase as long as the home value was growing too. In affect people were and some still are, making a huge financial decision by only looking at the balance sheet and disregading the income and expenses.

This exhuberance in the real estate market has now been curtailed and prices are being seen as drifting lower by the public. The public has not yet capitulated into thinking that market prices, except for condominiums, are falling at double digit rates.

This was true in the USA. For the first year prices were drifting down, but the year over year rate remained positive. Only after 12 months of drifting prices did the year over year rate show negative. Only then did public opinion change.

This month the year over year rate for condominiums will show a drop of some 11%. Houses will only show, in the general public opinion, an insignificant drop of 3 percent.

The mantra for this month will simple be that condominums will fall in value but not detached homes.

beagle said...

CrackSmokingRules said...

What you bears don't get is that owning a house is a special privilege only the few like me get to enjoy. It takes hard work and sacrifice to own a home here and it always will. If you can't accept that then by all means keep paying the landlord's mortgage throwing your money away on rent!


Many of the bears own real estate. We just like to buy at the bottom not the top of markets. There are many ways money can get thrown away. ;)

flip_this said...

Anonymous said...
"To use stats can median data in relation to the median home price does not mean that the average person is paying 11 times their income for a home in Victoria.

What the stats Can data and median home data can show is a comparison between one period of time to another. For instance during a recession this ratio may be as low as 3 and during a period of economic expansion this relationship could be 11."

Good point. However, when we are comparing price to income ratios between LA and Victoria, the same metrics are used for both cities. We are comparing apples to apples so to speak. What astounds me is that Victoria is not only in the same unaffordability league as LA, but even beats it!

Reid said...

More Canadian subprime news:

Cdn Subprime Mortgage Renewals

Anonymous said...

Word: add the "handful" of subprimes to rising bankruptcies and rising unemployment and more bad news in the US, and the situation quickly moves to dismal, and far beyond.

Nick said...

I think I hear the sound of more tax dollars swirling around the bowl...

phil said...

"Unless Ottawa steps in to help support the homeowners, for example by buying or backstopping the loans, they warn that thousands of homeowners will lose their homes through foreclosure or power-of-sale proceedings"

Oh no! Ottawa must act now!

We all know the best thing that can happen here is the home owner will walk, and Ottawa should do nothing but let the free market function. House prices will fall (as they must anyway) and sleeze-bag mortgage companies will dissapear. Tax dollars should be used for hospitals and schools. Why is this SO difficult?

omc said...

I think we have to remember why those people were using sub-prime in the first place; they were not fiscally responsible. From the cases I have read many had thier homes for many years, but used them as ATMs. Even if tax dollars are wasted the outcome will be the same. I have heard speaches by Bush and Obama on NPR talking about only saving home owners who can be saved, or can afford the homes they are in.

Anonymous said...

It seems real estate was the tax-generating crime business, the gov was the Mob, and so the family business must be propped up at all possible cost.

Thank God it won't work.

phil said...

"Thank God it won't work."

No it won't, but our government will bankrupt itself (and our children) trying.

Anonymous said...

I don't want anyone to miss out on this Craig's List opportunity, it's hot:

"There are currently 20+ homes with suites available in Greater Victoria under $450,000. Don’t wait for prices to go up again. Now is your chance to upgrade from a condominium to a house or become a first time home buyer. Contact James Smith with Pemberton Holmes to find out more."

Act now while there's still time!!!

Anonymous said...

No, really, now is your CHANCE!!

Anonymous said...

Phil, the government bankrupted itself and our children a very long time ago.

AttentionShoppers said...

I was just at the mall and boy was it busy because of the rain and the vibrant economy. I think Victoria is fine and dandy! Lots of buyers and lots of good deals too. If this rain doesn't let up this could be the mother of all shopping years. Good time to buy a house too.

TheTruthIsOutThere said...

I think the realors are behind the latest stealth blimp patrols in and around the Gorden Head area. They're keeping their eyes out for potential FTBs who desperately want to snap up SFHs in the area. Be on the look out.

Nick said...

Someone pass that on to Carla, that has the makings of a fine TC real estate piece.

Anonymous said...

If only they were a joke.

Anonymous said...

Okay everyone brace yourselves. April is coming up and there are going to be sales and potentially quite a few. Don't get discouraged.

S2

womp said...

PrairieBoy posted his guess at March's median/average. He's been right on the money for the last several months, so I have no reason to doubt his predictions.

But a median of $515k? That's crazy.. it doesn't jive with what I've been seeing on PCS at all.

Anonymous said...

We're only at the beginning. In the US, the bottom still isn't in, and there were many dead cat bounces. Now they're undergoing a first foreclosure bounce, which is petering out and prices are heading down again.

We'll get there. We're two years behind the US, and the real estate lobby is loud and very desperate to sucker folks in.

And they will. But not us.