Thursday, October 1, 2009

September sales...

Continue to buck the 2008 plunging trend. VREB release here. Cue the TC hyper-echo chamber now. BREAKING: COMMENTS ARE ON! COMMENTS ARE ON! (for how long? your guess is as good as mine)

Tim Ayres gives you the spin free stats via Twitter:
Month-end Victoria Real Estate Board stats:
Sales: 776
New listings: 1129
Total active listings: 3419
Last month's numbers:

Total sales: 764
New Listings: 1094
Total Active Listings: 3509

Current ratios:

Sales to new listings ratio: 68%
Sales to active listings ratio: 23%
MOM volume change: +2%
YOY SFH price change: +12%


Who could have seen this coming? (yes that's a big fat tongue in my cheek).

102 comments:

HouseHuntVictoria said...

Check out the jump in listings. More people need to sell? Or more people thinking now's a great time to sell?

Roger, correct me if I'm wrong but inventory consistently declines through the fall normally doesn't it?

JAS2 said...

It's amazing that people are still buying at these times.

Our company laid off more employees this week and reduced the salary and working days of all remaining employees. The same situation is happening with other companies in our industry as well.

Maybe the jump in listings that HHV mentioned is a sign that reality is starting to catch up.

Leo S said...

What jump in listings? Active listings are down. New listings are a tiny bit higher than last month, certainly no jump.
Look at September 2008, that was a jump.

Marko said...

I am really surprised with the SFH prices going up this month on such huge volume. I really thought they would stay as is or possible correct by 5% or so. I really can't see a major correction (>15-20%) at this point. Housing starts are still down huge and no one is investing in new major developments. Once next spring hits there is going to be less inventory (especially new condos) versus this spring; however, I can't see prices going up because they are very high at this point given the economic situation.

I think a lot of developers and builders reacted very quickly during the economic meltdown and canceled projects. The number of units canceled in Victoria and Langford must be in a thousands. This has helped stabilize the supply and demand equation going forward.

As much as everyone on here hates developments such as Bear Mountain the new supply of homes and condos does help put downward pressure on prices.

I am still very cautious going forward. I just started the one house I am building last week. I don't think I will be building 3 houses at a time for a while....construction costs including materials are still too high and showing no signs of relief, building lots are going up in price, and too much risk and uncertainty with the HST and economy.

My two cents.

Vic said...

Still see many listings in Oak Bay not selling two months later. Agree with Robert's post on the last thread, we will most likey go sideways but the post Olympic fallout should dampen prices and those flippers spirits they can make a killing in one year,those times are gone forever. Geitner calling for a strong US dollar and a Fed guy saying don't be surprised to see rates raised "swiftly" if needed is not positive for the deflationists. Sounds like a shot across the bow to me.

Vic said...

Forgot to mention,how many major labor unions contracts expire in the spring ? BCGEU,CUPE and HEU ? Correct me if I am wrong.

Vic said...

TC front page pumping $150K closets in lower Yates derilict buildings. Firstly, would you want to live in an ancient brick building with the threat of earthquakes all around ? and how the hell does one live in 400 Sq. Ft. and be a "happy owner" ? Not to mention the old ghosts haunting those digs...creepy !



400 sq. ft. for $150,000

The 125-year-old Oriental Hotel and adjacent brick building at 560 Yates St. will be redeveloped as 30 condominium units, with work slated to start this fall. A bachelor unit of about 400 square feet will be priced at about $150,000, says developer Chris Le Fevre.

Marko said...

"and how the hell does one live in 400 Sq. Ft"

400 SQ/FT is a good sized condo for one person in most of Europe.

Vic said...

"400 SQ/FT is a good sized condo for one person in most of Europe."


In all due respect Marko,this ain't Europe. 400 Sq Ft. is a low level hotel room.

Reid said...

My review of Sept 09 shows the sale of SFH's up 36% over last year and higher than most recent years. Sales were far stronger than they should be and remember that 2008 sales did not really tank until Oct after the Leeman Brothers situation hit.

SFH inventory under $650k is some 40% lower than this time last year and it grew in Oct 08 and Nov 08 as sales came to a standstill. So today there is not an excess of lower priced homes on the market.

Although the market makes no sense, there is nothing in the numbers that would suggest the market is about to suddenly correct. Based on last year, if something fundamentally changed again and demand falls off a cliff it will still take 6-8 months for reality to settle into the sellers and agents. I still contend the market will stay flat through next Spring although I did not expect prices to rise in Sept. So maybe the recent price spick will slowly come off over the fall and winter.

Vic said...

From the Sun:


B.C. real estate returning to ‘seller’s market’



VANCOUVER — Rising sales and limited listings have returned Canada to a “seller’s market,” with total B.C. home sales this year up nearly seven per cent compared to 2008, according to a Global Real Estate Trends report released Thursday by Scotia Economics.


Somerville said he believes sales volumes will weaken a bit this fall, because the economic conditions are not conducive to high sales.

Somerville said he’s also heard anecdotally that many buyers are now jumping into the market because they got very good pre-approved fixed mortgages in the late spring and are purchasing homes while those deals are still in effect. “The sense is that those kinds of deals aren’t [now] entirely available.”

Marko said...

"In all due respect Marko,this ain't Europe. 400 Sq Ft. is a low level hotel room."

Typical North American attitude the majority of us have. I have a 2500 sq/ft home (900 sq/ft suite) so I live in a space of 1600 sq/ft with my wife and daughter. Do I like and want this much space? Yes. Do I need this much space? No. I could live without the 250 sq/ft office by putting my desk in the living room. Would it look good? No. Would it function? Yes. Wants and needs are two totally different things. If you want something, as the market has shown us, be prepared to pay.

I am surprised no one has brought this up..

"Names and earnings of the 1,890 people working for the health authority who earned more than $75,000 in the year ending March 31 were released yesterday."

5 years ago less than 800 people made over $75,000 with VIHA. If the market goes sideways for 4 to 5 years, salaries will slowly catch up.

Olives said...

meh, all part of the wave 2 psychology, which appears may have already ended (or will soon) IMO

Vic said...

Marko,

Those numbers are very sketchy at best. How many of those 1890 were making $70,000 5 years ago and only the usual 2-3% increase would boost them over that number ? Most I would think if you do the basic math.

And the majority of healthcare workers ,not including nurses, make an average of $40-55,000 at average support workers wages of $22-30/hr at union hours of 1850 hours per year.

Do you see all major union members getting 3% raises annually over the next 5 years ? I guess you do but maybe you missed the late 90's when no one got raises for a good 5 years and some people like HEU got wage roll backs of 15%. We are not in boom times man,raises do not happen when cutbacks are happening everywhere.

And what if 20% of those 1890 get the axe with the health care fallout ? Very possible.

patriotz said...

If you want something, as the market has shown us, be prepared to pay.

Marko, the point is that you can rent the same property for a lot less than it would cost to buy it, even with today's historically low interest rates.

That's called a "bubble".

Got that?

Marko said...

"And what if 20% of those 1890 get the axe with the health care fallout ? Very possible."

Aging top-heavy population combined with a health care system that can barely handle current demands. Highly unlikely.

"Marko, the point is that you can rent the same property for a lot less than it would cost to buy it, even with today's historically low interest rates.

That's called a "bubble".

Got that?"

So I have the price list for the834 building going up downtown. They have nice 533 sq/ft units starting at $198,900. If you put something reasonable down like 20% your morgage is appox. $160,000. Over 25 years your payments are $696 at 2.25% prime. If interest rates rise 3% to 5.25% prime in the next 3 years your payments will be $953. Strat fees are approx $140. Property taxes approx $100/month.
Rent for a brand new 533 sq/ft unit downtown is approximately $1000 to $1200 looking at craigslist.

Renting doesn't seem to be that much cheaper for the first time buyer?

However, you could make the case that it is cheaper to rent a $3000 house worth $1,000,0000.

Vic said...

"Wants and needs are two totally different things. If you want something, as the market has shown us, be prepared to pay. "



Exactly, I don't "want" and I don't "need" so I am prepared to "wait". It is no different then in early 80's and 90's,patience rewarded those who wait. It has been a proven theory time and again. This last year wasn't a correction,it was a blip. What's happening with the new US dollar carry trade will determine "when".

Vic said...

" They have nice 533 sq/ft units "


I'm sorry Marko, but there is nothing "nice" about living in 533 Sq Ft. Have you tried it lately ? Due to a tight rental market in 2002 I rented an upscale unit in the 600 Sq ft range and it was totally stifling. I figured the nice fixtures etc would offset the crampness but after a couple of weeks the novelty wore off fast but I was stuck for 6 month lease. I could not imagine laying out a couple hundred grand for the same experience.

I guess if you come from a country where it is the norm you can hack it but most North Americans will find it is like living in a broom closet.

aston said...

And yet... these tiny condos sell.

I don't like them, but somebody's living in them.

PainInThe said...

"...somebody's living in them."

You're kidding, right? At least 75% of them, probably more, are vacant, "investment" or "flipper" condos stuck to the last greater fool playing musical chairs who's now out of the game.

Talk to the people who DO live in them. Ghost buildings.

Marko said...

I lived in a 636 sq/ft Condo on Quadra for 8 years, got married, had a kid and the three of us lived there until my daughter was 6 years old.

Yes, it was tight but we managed to pay it off and upgraded to a house. I really think 533 sq/ft is ample space for one person. Just my opinion.

Marko said...

"You're kidding, right? At least 75% of them, probably more, are vacant, "investment" or "flipper" condos stuck to the last greater fool playing musical chairs who's now out of the game."

Some people can afford to have vacation condos. I know two families personally from Alberta that have condos at Shutters. They just show up maybe 3 to 4 weeks a year. Fully furnished, they don't rent them out even thought they could get approximately $2000/month.

Yes a lot of condos are vacant. Some people can simply afford to do this. Those who can't rent them out.

omc said...

With another on the way we have been looking for another house, rental or buying. The rents are sky high for anything reasonable right now in a decent neighbourhood! With 20% min down, the spread isn't there with the low rates. If we can't find a decent 3-4br rental we may get forced into the market. In that case we would be comparing the 35 yr payment against rent. You don't really pay off any principle with either. This of course doesn't mean we will use a 35 yr term.

Vic said...

If you can't get in the market without the possibility of going 15 years by tightening the belt a bit then you best prepare for a very long stay if you choose to dive in. A tight belt at 35 years is suicide.



As per the tiny condos,yes they will be bought,and many can live in them. I'm just an average guy who can't, like most couldn't. Can't forget the extra $80,000 you will have to lay out in about 5 years or so when it inevitably starts leaking.

That place down on Fern & Fort St which had to be built to top specs in the last 10 years is a complete disaster too. Now they are replacing every single window on top of being torn down to the plywood. Imagine they will be there for many months. That is the third condo building within 5 sqaure blocks that has been gutted in the last year and a half. Must be where all the guaranteed construction work is.

Bob leftcoaster said...

I had a look at the VIHA Sunshine List. I'm internal so I recognize some names from it. Many of them are senior nurses, and middle management. Some are tradespeople and paramedical staff with too much overtime. No, I didn't make the list, not by a long shot.

Of the 1890 healthcare workers on the Sunshine List, a 20% shave isn't unreasonable especially with the middle managers. Things are tight here and many vacant positions are not being filled.

PainInThe said...

"Some people can simply afford to do this."

Talk to us in six months about how many people can simply afford to do that.

Never mind. The glut of them on the market at firesale prices will tell us all we need to know about how many more rich were suckered, yet again, into poverty, by investing in a bear market suckers' rally.

patriotz said...

Fully furnished, they don't rent them out even thought they could get approximately $2000/month.

You can rent a freaking waterfront house for 2K/month:

$2000 / 3br - Waterfront Home (Saxe Point Area)

Victoria condo specuvestors are in for a major reality check, really soon.

patriotz said...

With 20% min down, the spread isn't there with the low rates. If we can't find a decent 3-4br rental we may get forced into the market. In that case we would be comparing the 35 yr payment against rent.

The last time we had rates this low for even 5 years was during the 1930's.

Give that a good long thought.

Marko said...

"Talk to us in six months about how many people can simply afford to do that.

Never mind. The glut of them on the market at firesale prices will tell us all we need to know about how many more rich were suckered, yet again, into poverty, by investing in a bear market suckers' rally."

If you are confident that the market is going down, buy a triple exposure TSX SHORT ETF on a huge margin and you will make a killing. On top of the massive amount of money you will make you'll be able to buy a 2 bedroom Condo in shutters for $150,000 in 6 months! But who would want to buy a condo thats going to leak anyway? Might as well pick up a home in the Uplands, probably be in the $350,000 range by then!

Inglishmagor said...

Thank you for posting still Marko. I don't believe this level of of pricing can continue, but I appreciate someone speaking from the other side.

There is just nothing I can say that hasn't been said a thousand times already. Looking at the larger picture, the recession is a real thing that should eventually have a real impact. Somehow though nothing in the real estate world reflects this.

By 2006 I thought prices were getting silly. Marko has built and sold a number of houses since then, I'd hope saving enough to cover the one that he does get burned on. If you can ride the wave and save enough to cover the fall, then worrying about the fall can only hold you back.

I respect Markos position and view, but I'm a first time buyer who would just like to purchase a home to live in for the next 40 years. It's a different approach to the market. I will take one leap and live with the consequences of that decision. My consequences will play out over decades and will show themselves in many parts of my life. As a builder your time frame or risk is much smaller as are the consequences.

I say the consequences are smaller only because any builder building over the last 8 years should have built a safety net for the one that gets hit at a loss. If builders have not set themselves any safety... then that will be part of the problem.

Bob leftcoaster said...

Did anyone also catch the Global news tonight? We had a good laugh when they were throwing some YOY sales stats. I don't recall their exact numbers but they were boasting increases far beyond 100%.

Not so bad when you consider it entertainment than news.

Marko said...

"the recession is a real thing that should eventually have a real impact."

I agree. The recession will definitely have a huge impact. The BC and federal governments can't just run deficits with no consequences. I think prices will come down from where they are currently (I am shocked at this months numbers), maybe 10% or so. SFH average of maybe $550,000 or so and continue sideways for 5 to 8years. I can't see anything that could possibly drive prices up at this point. If the economy improves interest rates will go up and erode on affordability. If you are a new buyer I don't think you will lose anything by waiting. Flat prices will decrease construction, retial sales (if people aren't building, they aren't buying new appliances) etc.

I think we could have the 1990's BC economy all over again. Slow, slow, difficult to find work...but flat real estate prices.

That impact of the recession will hurt, but it isn't a guarantee that real estate prices will correct more than 15-20%.

I am not trying to tell people to buy because at this point I seriously can't see anything that could drive prices higher.

The only think I don't agree with it people calling for a correction of greater than 20% in greater Victoria area. Victoria isn't isolated from the rest of the world, but there are a few key factors that have kept prices high throughout this recession.

You have nothing to lose by waiting for 4-5 years if prices remain relatively flat. Anyone who is calling for a massive correction should have been smart enough to buy in Jan or Feb and resell in September. Unfortunately I wasn't one of those because I cut back to building one home at a time from three.

Olives said...

Given the economic problems we are facing I can't imagine real estate prices around here ONLY dropping 20 percent (and I have some of those inverse ETFs too). Time will tell.

HouseHuntVictoria said...

Marko,

This month's numbers aren't shocking. The avg was driven by 24 property sales over $1M including several above $3M. The $10K jump in median price is attributable to that as well.

Despite crazy sales volume, prices are not consistently increasing in Victoria. That's what should be shocking to market watchers. The avg reported by VREB is worthless. Anyone who has bought a home since fall of 2007 would be lucky to break even if they were to sell it today, *including* all that "equity" they built in the past 2 years after sales costs etc...

Vic said...

After experiencing the crash in 81 when house prices dived up to 50% I will never underestimate the power of the markets and anyone not believing this possibility has their head in the sand. How long can record sales last ? How many more suckers can be left ? Not many.


This will most likely flat line/taper off slowly til after the Olympics unless some global finanical problem rears its ugly head and there are many land mine still out there. Read the IMF warnings,Roubini etc. If gold busts out, the US dollar tanks,they will be forced to raise rates fast and hard. That will be the catalyst in my opinion and it may be closer than we think.

Vic said...

Good point HHV, the MSM harps on the sales but the VREB and GVREB keep saying prices are "bumping" up to keep the sheep feeling good about stepping into the biggest bubble of all time.

I bet most of the sales are just move ups and few new buyers are buying anything over the most basic condo/old moldy bungalow in need of $100,000 reno.

omc said...

It looks like Marko has pretty similar views on the local market to many that use this board. That would make you a bear.

I don't think that anyone can predict the market as it is not rational. Just look at what is happening right now. If the market was to correct 10% I would feel much more secure in buying than now.

patriotz said...

If you are confident that the market is going down, buy a triple exposure TSX SHORT ETF on a huge margin and you will make a killing.

He was talking about the Victoria real estate market, not the stock market, dummy. If you think the two are correlated in anything but the very long term, check out the performance of each over the last decade.

Speaking of the stock market, I was buying last winter and selling recently. How about you?

Marko said...

Me? I have never had the knowledge and insight a lot of people on this blog posses to play the stock market to huge gains. If I was buying last winter and selling now I wouldn't be living in Fernwood and collecting income from my rental. I would be in Oak Bay with a theater room, pool table and wet bar in the basement.

Just Janice said...

Debt becomes bigger in deflationary environments in real terms...so owing $750,000 on your house when you have been forced to take a wage cut will not feel good. It'll feel even worse when your house is only worth $500 to $600k.

Asking rents have gone up recently, however, word on the street is that many of those rentals aren't being occupied. This suggests a difference between what supply is wanting to provide the service at and what demand is willing to pay for the service. At the end of the day, the owner of the rental will either accept a lower price, or sell if they percieve that they can't hold the property on a 'price appreciation' basis.

The current employment context is also not encouraging. While impacts to permanent government employees were kept to 200 positions, auxillaries were not renewed, and many contracts were slashed. The true impact on employment in Victoria is probably in the ballpark of 2500 relatively well paid positions ($50,000 per year plus)...given that the private sector is currently not able to absorb many of these people, the ranks of the unemployed will swell and many of them will have a hard time making their mortgages.

I don't foresee a huge bump in the bankruptcy rates as a result of the recent changes to the rules around bankruptcies. As a result I would think that 'creditor proposals' are likely to skyrocket.

Its all very unstable right now, the winter I anticipate will be worse than last winter. This bubble is way larger than 1980-81 and the economic context is worse. I anticipate that the unwinding will be worse. This isn't a sideways scenario - I think that the deflationary context kind of eliminates 'sideways' as a possibility as in 'real terms' without inflation the only way to correct is with downward pressure on prices.

Personally, I'd prefer to be put out of the economic pain, quickly rather than experience the never ending economic malaise Japenese or 30's style...

Just Jack said...

I didn't think there was enough room in the basement of an Oak Bay 2 bedroom 1930s war shack to put a pool table, theatre room and wet bar.

S2

Vic said...

Since you were building 2-3 houses a year for several years now I am bewildered why you aren't already in Oak Bay with the theatre room ?

You could always kick out the tennant in the basement and build one there I suppose.

Animal Spirit said...

Just Janice is correct about the layoffs, contractors and auxiliary staff not being renewed.

As important is that virtually no vacant positions are being refilled in the government. With a 5% turnover rate, this means that anyone new out of school won't be finding a government job, nor will mid-career people be moving here. Throw away the entry level buyer.

(shake my head as to how people are still buying at the inflated prices here, or affording 1800 K rent for only part of a house).

omc said...

vic,

The construction biz is extremely cyclical and sensitive. I was there for 10 years and don't miss it at all. Marko made good money for a number of years, but he would have had may more years of lean times. By his own admission, he probably has 5-8 lean years ahead of him. He won't be buying any Oak Bay mansions soon.

Bubble 'n Fizz(le) said...

http://www.greaterfool.ca/2009/10/02/with-bloated-hearts/#comment-44991

I couldn't have said it better myself. He's talking about you!

Vic said...

omc,

I am fully aware of that,just doing the math that he has posted of making somewhere in the area of $60K per house profit while building 2-3 per year. I also thought he said his wife made a living as a nurse which is no small change. When you do the math a decent place in Oak Bay or Broadmead could have been had for $500-700,000 range in the past 4 years with lots of room for the wetbar etc. Instead he says he struggles in Fernwood with having to rent out the basement. I just think something doesn't sound right,thats all.

As well if you only make $60,000 on a house why not just be a carpenter and make $90,000 a year without all the hassle of borrowing to build if there is such a drastic shortage of qualified carpenters ? On top of investing in average mutual funds the past 7 years Oak Bay is very much attainable in my opinion but that is just my opinion.

Vic said...

Fizzle, how many 200K per year floor traders are in Victoria ?

Olives said...

The best part of the post BubbleNfizzle linked are some of the responses.

omc said...

Chances are that post was by our friend bubble. Remember when he was outed here for posting under different aliases. Not exactly a trustworthy, or sane type.

omc said...

Vic,

I know what you are saying, but you never really know what the other person has gone through. It may look on paper as having a wife that is a nurse is a big earner, but what if they have younge kids. I don't state my wife and my own profession here as it would point directly to us, but it is considerably more than thiers. On paper that is, with younge kids my wife has been part time/casual for the last 3 years. She is the major wage earner.

Marko already stated that he had worked at other low paid jobs in the down time, Butchart gardens for ex. You tend to have to be very risk adverse when you play the construction game. I would be willing to bet that he has virtually no retirement savings and is frantically paying down his mortgage in these good times. If we do hit an extended slow down, say the 8 years everyone is talking about, he could very well be done for good.

Marko said...

For personal experience I find that most builders are optimists.

"The next house I will build for less, and hopefully new home prices will go up some."

However, this doesn't pan out the majority of the time. Building 2 to 3 homes a year I make approximately what my wife makes (experienced nurse). However, I have no paid vacation, no sick time, no benefits, no retirement plan.

You need to build at least 10 homes a year to make serious money.

Why do people think builders make so much? I would never recommend it as a profession to anyone. Why work long hours and risk so much when you can do a BS profession like realtor. Similar money, less risk, less work, and you only need an IQ of about 85 to be successful. Apologizes to anyone who is a realtor. As a builder I've met 100s and 95% are completely clueless. Damn MLS monopoly. I am very con the "paper economy." Houses would be 4% cheaper if it wasn't for realtors. Yes I hate their BS adds too. Anyway, off subject.

Just an FYI, new electric code upgrades introduced October 1st that will add an addition $800 to $1000 for a 2500 sq/ft home.

Vic said...

So you have a family income of $200,000 the last few years and you're crying about no paid holidays and you have no retirement plan in place ? That's almost too much to take,lol. Maybe you need some finanical planning assistance or you need to adjust your spending priorities.

I am sure many here would do very well with no paid holidays etc with that kind of dual income. Not to mention your wife has a very nice health benefit package,pension etc. Geesh !

Just Jack said...

Hey B&F, where ya been?

No offence fellow bears but it has been kind of slow and boring without the contrarian BS.

S2

Mark said...

Bare ass Mtn elusive sukuk???

http://www.nationalpost.com/news/canada/story.html?id=2061530

This shit ain't happening folks! You can bet the farm on that.....first it was an Oct deadline, then Nov and now it's January LOL!

Frikken Saudis have their own problems they don't need the Bare Mtn headache to add to them ;o)

The only thing that isn't certain is......will Lenny boy end up in the slammer?

Village said...

On an economic related anecdote. Courier business in town is slowing down, due in part to their customers closing down. Bankrupt or otherwise, I don't know. As much fun housing prices are to gripe about. I think it's the low end jobs that are going to indicate where the economy is going. When fast food joints stop having difficulty finding employees then the local economy is hurting.

PainInThe said...

Yes, OMC, our own Bubble & Fizzle or Sitting Pretty HAS invaded Garth's domain. And Garth's people have made short work of him/her/it too.

Mr.4AM said...

On the global front...

1. Latvia is on the verge of financial & political collapse. Currency about to approach ZERO. Will Switzerland banks who funded much of Latvia's cheap money party survive? Stay tunned...

2. Top 10 most probable countries to collapse financially & politically next (see page 3). PS. Don't buy the BS that USA = AAA... what an utter joke.

3. Phd Economist points out the obvious - Fiscal Doomsday is the only possibility left (for USA).

4. Chinese Military 2009 wakeup call. Apparently they don't just make crappy dollar store stuff and unsafe toys.

5. Let's end on a funny note or two.

What's all this got to do with Victoria real estate? Oh nothing... Victoria real estate can only go up from here - above your shoulders that is.

Mr.4AM

Mr.4AM said...

PS. Are you seeing a pattern yet?" ;-)

Vic said...

No more US$'s for oil trading ? This is serious stuff.

http://www.independent.co.uk/news/business/news/the-demise-of-the-dollar-1798175.html

Mr.4AM said...

Vic: nice find - assuming it is true and not unfounded rumours. That is *very* serious stuff indeed, I wonder if that explains the $20 jump in gold yesterday.

if even 20% of it plays out like this, god help us all.

Eerie how the beginning of this 1981 movie sounds like it was made last month speaking in hindsight of recent 2008 events.

That movie is too much doom and gloom even for me - I don't want to believe such an outcome could be a reality. Time to turn on an MSM channel, I need a dose of rosy optimism, even if I know it is built on a house of smoldering cards dripping in arabic oil and american debt.

Vic said...

Mr. 4 AM,

it came from Peter Grandich's site and he doesn't post BS stuff so I am taking it at face value for now. I have read hints of this for a few months but thought it was more conspiracy or weak threats stuff.

A new Arab currency could really throw things out and it Britain is forced into the Euro things could get dicey. And how would the loonie react ? It does explain the wild gold action at $1000 level I posted on my blog. There has never been such a battle at this level,it always got smoked back down. Somethin is brewin here. Alcoa earnings tomorrow will set things off to the downside if they falter.

Sorry for the off topic but it could be very big news for the world markets if the US dollar is shunned in the oil bizz.

Mr.4AM said...

Excuse my language and the deviation from Victoria real estate - but, DAMN...Gold went up $20 (USD) yesterday, and is already up another $20 today - chart here.

Rumour on the street is that Iran is buying gold bullion through arabic partners in preparation for tougher sanctions, meanwhile the US dollar is heading down.

How in the world stocks are still going up is baffling me. I think there may come a point when stocks crash BELOW October 2008 lows and people will no longer be running to the USD for safety... instead they will run to gold. Will that happen this year? I don't know, but it sure seems like there is a strong probability of this happening now.

Canada should do very well compared to other countries though, we have gold resources and large (dirty) oil resources, low population and *shock* LOTS of land, and the loonie will break par and remain above USD in the not too distant future - let's see if it breaks 95 cents today.

Perhaps Gordon Campbell was right after all, this may very well end up being "The best place on Earth" (tm) - after a Global Financial Meltdown hits new lows,war with Iran ensues and this awesome action movie soon to be released has even a glimpse of truth to it.

And now back to your regularly scheduled channel... Victoria Real Estate... :)

Mr.4AM

Vic said...

Just to update,Custom House out of Victoria is reporting the Arabs quickly denied this in the works but no word from the others.


As Mr. 4 AM says,back to your local HHV RE station. :)

Vic said...

Not to mention the Aussies have raised inerest rates 1/4 point. Is this the beginning of the rise ?

PainInThe said...

Mr 4AM... remember I predicted this starting more than a year ago on both Prairieboy's blog and here.

The ominous undercurrents of a MASSIVE crash are all over the net. I read at least one article a day about it. It seems Obama is hell bent on nuking Iran, and we know Israel is. China made a protection pact with Iran in return for cheaper oil years ago and they can back it up, too. Not to mention Russia's involvement in Iran.

Crashing the dollar is China and the Mideast's last OBVIOUS tactic to make any attack on Iran impossible due to financing it and the aftermath as Iran would immediately mine the straits of Hormouz. Nuking Iran could well easily escalate into WWIII with BOTH Russia and China against the US.

One such "nutty" program on the net absolutely predicted 9-11 by monitoring everything on the internet and putting together various timelines through various algorithms (I admit I don't understand how it works and that's a bad explantion). It's now predicting a massive crash of the entire financial system (bank lockdowns for MONTHS) on or by Oct. 25. We will see if their prediction holds.

Bottom line. Paper (cash, equities, and MORTGAGES) are a very bad thing to base your future on. Even if you can't trade your gold for cash because the banks are down, when no one else has cash period you will be able to barter slivers of gold for food and fuel, just like they did in the Old West.

And I'll bet for far more than people bartering their furniture and possessions too.

PainInThe said...

Links for those interested:

You tube interview

Article alert

omc said...

I could see this happening.
Bubble causing rate increase

Vic said...

You have to be kidding,thats the worst wig with a bad mustache die job I have ever seen,LOL.

PainInThe said...

Good Lord, who CARES what people look like?

Some less metaphysical links:

1

2

3

4

And of course gold broke through the $1000 resistance level today for good at $1045 USD.

And this is just a handful of thousands of similar articles.

Vic said...

omc,

What an about face,raise rates to cool the red hot market but now saying the opposite. Funny how the real estate pumpers are high fiving price gains and record sales, we now have news the Olympic Village is only $161 Million over budget and they say they are going to take a big hit on the condos because the real estate market has taken such a big hit. What big hit ?


Quote in the Van Sun:

"The business model underlying the city's real estate project is to have the developer, Millennium, build the units and then sell off the condo units after the Games, when Olympic athletes leave. But the steep decline in the real estate market has threatened to slow the rapid sale of the condos."



Again....what steep decline ? I thought we were back to record prices ? Can we please have some "credibility" in this country ? This two face MSM crap whenever it suits them is getting pathetic.


http://tinyurl.com/yda5mq3

Animal Spirit said...

Please can we stay away from the gold hype? Thought this site was about real estate and finance, not pushing a play.

Vic said...

Pain,

If someone looks like a fraud then I care. It's called common sense.

PainInThe said...

WHAT gold hype? No one is "pushing a play."

Which you would know if you had read the articles.

Paper is collapsing. There isn't much left. The other countries of the world (including Japan) refuse to deal in US dollars for oil.

Suck it up. You should be thanking people for warning you in time. Only for you, by your ridiculous characterization, it's obvious NO amount of warning will be enough time.

Which will serve you right.

Robert Reynolds - GBA said...

Real Estate Post! YAY

So there is a cute listing on Adanac St. near the Jubilee Hospital that I have looked at on my PCS, it just had a price reduction. This is the sort of thing I want to buy, when I am ready.

I think it is in line with what a lot of others here are looking for.

1751 ADANAC ST
MLS® 268138
$459,900

Vic said...

Garth's latest sums it up nicely. As he says "let the bubble pricking contest begin". I am amazed at Canadians to not learn from our southern neighbors demise,I thought we were smarter than that but it's apparent we are a very slow bunch.

msr said...

Rob,

I was doing some number crunching. On a 35-yr 2% APR mortgage, the monthly payment is in the range of $1500. Wow. No wonder the housing market has surged back to life.

Conversely, if rates went to 6% then the price would have to drop by $200K to get the same monthly payment. Wow.

talus said...

Anecdotal...

Talking with a friend today. He and his significant other bought into the market last year (against my piles of paper and plea not to).

They went with a 40 year mortgage at ~4.5% ... and they found themselves falling behind.

Luckily, they were able to re-mortgage on a 35 year 3.5% and reported being able to break even.

Now they have re-mortgaged again with a 35 year 2.5% variable. He now reports having an extra $300 a month in his pocket and some breathing room.

These folks have decent federal government jobs and some security but no prospect for large wage increases.

If this doesn't look like a recipe for disaster I don't know what does.

A couple of rate hikes and these folks are not going to make it.

Marko said...

"If this doesn't look like a recipe for disaster I don't know what does."

What percentage of home owners are carrying that much debt? According to the last set of published numbers 51% of home owners in Greater Victoria do not have a mortgage. That leaves 49% with a mortgage. What portion of this 49% has less then 10% equity in their home?

HouseHuntVictoria said...

Marko,

The overall numbers are largely irrelevant. Here's why:

Less than 5% of Victoria's total housing units are bought and sold each year. So 5% of the total available housing units set the market price.

What percentage of the 51% of Victorian's without mortgages buy and sell housing units every year? Likely not many.

For the past three years the most popular mortgage products have been less than 10% down, longer than 30 year amortizations.

Roughly 17,000 transactions have occurred in the past 3 years. Let's assume 3500 of those were of the 5% or less down, 35 year or longer amortization. Seem reasonable to you?

What happens when those 3500 property owners go to renew at higher interest rates? They haven't built any equity using those products in the first few years, their payments could jump by 40% or more and they could be forced to sell.

If only 1000 of those properties hit the market on top of the regular listings volume (and even right now we have higher than normal listings), we will have a flood of supply that will overwhelm even the high levels of demand we see today.

If that happens, demand will cool, because the story of the day will be about explaining why so many people have to sell their homes.

It really doesn't take much here to reach the tipping point. When you're dealing with a small number of sales, the extremes that work for the market on the way up can work against it on the way down.

Animal Spirit said...

PainInThe - sorry that I hit a nerve. All I was trying to do was bring the conversation back to what I am interested in and the reason that I frequent the blog.

Thanks for alerting me. I do follow multiple finance blogs and haven't seen large alarm on the topics you and other raise.

PainInThe said...

No problem. Sorry for the overreaction, but there have been trolls here before who went crazy on the topic.

As far as what financial sites you read, keep in mind that those run and funded by stockbrokers aren't going to touch this story with a ten-foot pole. Ever. In fact, they're already out trying to do damage control using the various countries involved expected and self-protective denials to negate the story as much as possible.

Of course no country, let alone an ally of the US like Saudi Arabia or Japan, would ever admit to joining a plan which would result in the decimation of the United States by destroying the hegemony of the US Petrodollar.

However, the meeting DID take place, it wasn't the FIRST such meeting, but it is probably the last before the strategy is fully implemented, probably as we write and read.

And you can best believe that such a paradigm-shift collapse involving the entire planet is going to have QUITE an effect on the real estate market.

Everywhere.

c said...

paininthe -- in the face of the "paradigm-shift collapse involving the entire planet", what is your recommendation re personal finance? What's the right play for a financial savvy homebuyer--and do you have a sense of how imminent the collapse is? When you say it's happening as we "read and write" does that mean it could be today?

PainInThe said...

No one can predict the future. But here are the simple facts that might be able to help you predict the future:

1. All paper currencies eventually collapse given enough time.

2. The fraudulent derivatives bubble that has complete collapsed is worth THIRTY-ONE TIMES the PLANET'S GROSS DOMESTIC PRODUCT or WEALTH.

3. China wants a gold standard. China owns the US. China just met with Japan, Saudi Arabia, Russia, Iran, and other countries to agree to stop taking US dollars for oil and use any other currency, preferably gold.

4. Gold has straightlined up since Oct 1st to all time records. $10 since YESTERDAY.

5. Iran is purchasing gold in preparation for sanctions or war.

6. China is urging their entire population to invest in gold in government produced TV ads.

7. The entire world is utterly fed up with the US' imperialism and endless wars against innocent people and would do almost anything to destroy it economically.

That said and done, if you're into metaphysics, or really, arcane mathematic models of internet-based prescience, I strongly suggest you get ahold of Clif HIgh's latest report "The Shape of Things To Come". He has quite a track record, and its chilling stuff.

1

He goes into actual dates for an imminent worldwide financial collapse driven by a USD collapse. He'll also be on Jeff Rense's radio show tonight, 7-8 PM pacific. You can listen free on the internet.

2

Like all metaphysical topics, take with a grain of salt and your mileage may vary. And temper with the facts above.

But I'm letting his info kick my rear into making some life-changing moves that I've wanted to make for years anyway.

PainInThe said...

P.S. I think it would be prudent for anyone who can to have enough wealth on hand on their premises to survive a possible complete bank/credit/plastic lockout of SEVERAL (6-7) MONTHS. Garth suggests freezers as superior to safes, or an alternative if you don't have one.

Think barter. In such a case, barter would be the new plastic.

c said...
This comment has been removed by the author.
Marko said...

Does Garth also recommend the purchase of high-powered automatic weapons to fend off intruders trying to get into your freezer?

omc said...

Marko,

Since I have very younge kids, I tend to be around people with younge kids. These people are tending to be just starting out and may be new home owners. The percentage of people I know through this group who are in financial trouble due to monster mortgages is astounding. I know of 2 couples who recently had to sell due to financial troubles; they had only just recently bought. This is even in times of dropping interest rates.

There are economic fundamentals that have been proven time and again that are being ignored right now. A false belief that there is an increasing group of high earning people in this town that is going to further the housing market makes about as much sense as the people who believe in dooms day theories.

My family is one of those higher earners, and believe me this isn't an expanding class and we aren't getting richer. Our choice is being forced further and further down the housing market. Any where else in the world we would be looking at luxury type properties.

I look at couples with a combined income of around $100k. They should be able to buy a decent house in a decent neighbourhood with out too much problem. They can't and these are what I consider to be our middle class. I don't consider moldy 2 bedroom shacks decent, I consider them as dozer bait.

c said...

Just to make sure I'm reading you right PaininThe, you recommend storing 6-7 months of 'wealth' somewhere in your(presumably rented)premises.

At first I wondered how that would work--but realized I suppose you could keep $50k in gold coins in the safe/freezer--I'm just not sure that's a financially savvy move?

I'm wondering if other readers think this is prudent?

Vic said...

"China wants a gold standard. China owns the US. China just met with Japan, Saudi Arabia, Russia, Iran, and other countries to agree to stop taking US dollars for oil and use any other currency, preferably gold."


Pain,

If you read my second to last blog post you will see the article link at the bottom from Jon Nadler at Kitco that stated info on Bloomberg that not only the Arabs denied this meeting and currency change plan but also Russia and Japan also deny it. The "supposed plan" was supposed to take nine years to implement. I do not see that as practical or realistic regardless of what China wants. The USA could recover long before then.



And that site you keep posting is a total joke unless you are some sucker. Can you believe that guys photoshopped wig and mustache comparing himself to Einstein ? Makes MJ look good in his wigs. At least post someone with some credibility and not another nutjob.

Chicken little's always come out of the woodwork when gold hits new highs. Nothing but a short squeeze.

Marko said...

"I look at couples with a combined income of around $100k. They should be able to buy a decent house in a decent neighbourhood with out too much problem. They can't and these are what I consider to be our middle class. I don't consider moldy 2 bedroom shacks decent, I consider them as dozer bait."

Whatever happened to making some sacrifices? This couple could buy a brand new 2 bedroom condo (800-900 sq/ft) in Langford for approximately $260,000 - $270,000. With 20% down their monthly mortgage would be approximately $1000-$1100/month while they can afford approximately $2700/month mortgage payment based on their income meaning they could put away approximately $1600/month. Later on (5-8 years) they could upgrade to a home.

If you want a room for each child along with a play room, and an office, and hobby room, and 2 car garage with two cars both less than 10 years old, in Fairfield....and a dog that costs $300/month in food and vet bills be prepared to get a lot of education and work more than 50 hours per week.

I grew up in a 11x12 room with my brother on bunk beds and I thought we were middle class. No?

Vic said...

Marko,

You don't seem to get it. If you live anywhere but Victoria and Vancouver you can buy a decent place without breaking the bank for around $300,000 or so. That's a whole house,with a nice yard,garage etc and still be able to afford your toys. Somehow the market has said Victoria is the be all,end all, and the prices are almost double. In most worlds that says something is seriously out of whack in spades. The market is what it is,but when things get stupid then the market will eventually correct and this being just the end of the hot buying season so I sense that time is coming soon.


"Sacrificing" to buy at the top of the chart is real estate agents lingo and I thought you despised those guys ? Sacrificial lambs is more like it.

Mr.4AM said...

c,

I wouldn't recommend storing any large valuables in your owned home, or rented property unless you have a lot of pictures of it/video, insurance, huge fancy safes and sophisticated alarm systems.

For $50 or so you can rent a lock box in a bank which would fit several 32 oz bars of gold (worth about $35,500 each). If you are really paranoid, use 2 or 3 different banks and spread it around. Also lock boxes are tax deductible.

ScotiaBank recently came out with a service to deliver gold to people's homes, but most people aren't equipped with the quality of safes or alarm systems that a bank is, and this is asking for trouble in my opinion. I can just imagine some day that list of customers gets out, and some robbers go on a serial spree collecting gold bars from people's homes.


The only gotcha to a lock box is that you can usually only store a very small amount (in dollar terms) of silver in it.

A 1000 oz bar of Silver weighs about 30 Kilos (66 lbs), and wouldn't fit in any but the largest bank lock boxes ($200/month+), and would only (currently) be worth around $18,700 CAD per bar. So if you have $200K to invest in PM's, it becomes impractical to buy silver and store it in a bank lock box. So silver investing is a bit trickier in terms of safety, and even delivery - often it needs to come from Ontario (from Scotia bank) and it costs about $750 for shipping to Victoria per 1000 oz bar (almost 5% of the total price). You might as well take a weekend trip to Ontario and bring it back yourself or find some kind of ETF or fund that guarantees to store 1:1 ratio of physical silver which they can deliver to you upon request.

Mr.4AM

PainInThe said...

"the Arabs denied this meeting and currency change plan but also Russia and Japan also deny it."

Vic, do you think for a single second those countries, ESPECIALLY Saudi Arabia and Japan, would ADMIT to such a plan or even being at such a meeting for a single second?

OF COURSE they denied it. Rather than that being proof it didn't happen, it's absolute proof it did.

PainInThe said...

Mr 4AM; you can always adjust how much wealth you store at home if situations improve or seem to improve. A simple trip back and forth to whatever bank you use, and going at a time when it's the least busy.

However, if the banks and entire electronic financial system closes down for 6-7 months, good luck getting your wealth out. Ever.

Forewarned is forearmed.

PainInThe said...

"Does Garth also recommend the purchase of high-powered automatic weapons to fend off intruders trying to get into your freezer?"

More than once.

PainInThe said...

Can you believe that guys photoshopped wig and mustache comparing himself to Einstein ? Makes MJ look good in his wigs. At least post someone with some credibility and not another nutjob."

Funny that you mention Einstein in the same paragraph that you belittle someone's public image. Have you ever in your life seen a photo of Einstein?

Appearance has nothing to do with intelligence, or honesty, or spirituality, or personality, or prescience.

talus said...

How about a little bedtime story...

There once was a family of four. Lets call them Mr. t, Mrs. t, and their two little pre-teen t's.

Mr. t had a good job and last year had a pre-tax income of $110K. Mrs. t holds a couple of degrees but has stayed home to raise the little ones and occasionally worked the odd job, she had a pre-tax income of $10K.

Once upon a time, back in the day, they bought a home in the prairies for $170K. Four years later they sold it for $190K, a respectable gain of $20K (neglecting taxes, and interest of course).

Then the t's moved to the center of the universe... that's Ontario for those that don't know. They found a 15 year old home in the country for $200K. They worked hard and renovated the home for $25K (Mr. and Mrs. t have some contractor friends that helped), then sold the house for $250K two years latter. Once more they had a nice gain, this time $25K (neglecting all the other realties of home ownership).

Then the t's moved west to Lotus Land (their birth province). In their early 40's by this time, they began to look at what was available for shelter. They looked high and low. From the lakes of Shawnigan to the shores of Sooke. They battled the traffic to Langford and scouted the condo's of West Victoria.

There were many considerations. How long was the commute to work or school? Where would the kids after-school activities be? Where were the grocery stores? What was the neighborhood like?

Of course one of the largest consideration was what sort of VALUE did any potential shelter represent.

Of course median prices were high. More than 3 times Mr. t's income. Sadly, there seemed to be so little VALUE in such a large purchase. The shelter with more VALUE was much farther away and Mr. t would have to spend hours each day in commute(and they only had one car so Mrs. t wouldn't be able to get groceries or drive the little t's to t-ball). The shelter closer to Mr. t's work was generally in excess of 40 years old and in need of serious renovation.

The t's friends implored them to "buy now or be priced out forever". The t's banker was more than happy to lend them over 1/2 a million dollars (say that slowly like Dr. Evil would). Friends were buying and selling. Strangers and cab drivers professed their advise on house purchases. Offers with no conditions were the norm. It was a pandemonium... like a run on pet rocks, or beanie babies, or X-Box. Get out of the way or get killed in the crush.

Mr. t wasn't so sure. And Mrs. t did not like "panic" purchases. They calmly calculated their mortgage interest, taxes and home expenses over the previous six years ownership. They quickly determined that the t's could have saved that same amount ($45K) had they chosen rental housing and banked the remainder. Of course they would not have had the pleasure of "ownership" but then the t's knew better than to kid themselves who the actual "owner" was.

What if the t's purchased a shelter? The t's would be indebted to the bank and any losses would be the t's to bear. And the potential loss could be staggering (in other words the downside was huge). Of course, the big US decent had not started yet but it was clear to many that the rate at which home prices were increasing was not sustainable.

In contrast there was NO RISK in renting. What would the t's loose if they rented? On average the t's knew that most people move every 7 years. The t's moved every 3 years and knew just how expensive it was. Was Lotus Land the perfect place for them... forever?

In the end, the t's found a nice little rental house. Mr. t can ride his bike to work. Mrs. t can use the car for groceries. The little t's can walk to their school. And best of all, the t's bank account continues to grow. If the t's are "priced out forever", so be it. However, the t's believe in history repeating itself... and happy endings.

talus said...

Whatever happened to making some sacrifices? This couple could buy a brand new 2 bedroom condo (800-900 sq/ft) in Langford for approximately $260,000 - $270,000.

This is a joke right?

Sacrifice truly is a family of 4 in $260K, 900sq/ft POS in Langford.

Vic said...

"Appearance has nothing to do with intelligence, or honesty, or spirituality, or personality, or prescience."



In this case I am afraid you are on another planet Pain. Might as well put up a pic of a dye jobbed Ghadafi or the little Iranian munchkin. Fake wigs means fake everything. Best you put down the Jack Daniels and the buckshot and take a break from the internet.

Vic said...

"Vic, do you think for a single second those countries, ESPECIALLY Saudi Arabia and Japan, would ADMIT to such a plan or even being at such a meeting for a single second?"



Are you saying they wouldn't let Obama in on this ? The most powerful guy in the world ? You have to be kidding bud. When this article first came out I gave it the benefit of the doubt til it was refuted and it was, by three major countries. I know you buy this conspiracy garbage like candy so I am not surprised.



You could at least post someone like Shiff next time,he's calling for the end of the world but now wants to run for the Senate when there will be no more government,only complete anarchy. How's that for a two faced pumper eh ?

PainInThe said...

"Fake wigs means fake everything."

Maybe to someone as shallow as you evidently are.

I have no wish to speak to you anymore. About anything.

Nice photo by the way.

Vic said...

I see you can't handle reality,same as those who got sucked in to the Canadian Madoff scam,buried their heads and listened to the gurus with their oh so fake appearances. Love is blind as they say.

You have to admit the Rense guy looks like a bad Yani imitation,he could have at least dyed it black,lol. Nice site banners too, HempUSA.org and some very bad health pill ads. Just the guy I want to get religous with. ;)