tag:blogger.com,1999:blog-7123542260692860177.post5874606097356255108..comments2023-12-02T00:38:46.467-08:00Comments on House Hunt Victoria: "This is bad, very bad"HouseHuntVictoriahttp://www.blogger.com/profile/07456914359088891317noreply@blogger.comBlogger176125tag:blogger.com,1999:blog-7123542260692860177.post-36536029869477027312010-09-08T19:20:36.179-07:002010-09-08T19:20:36.179-07:00Garth Turner on the Interest Rate Increase + Don&...Garth Turner on the Interest Rate Increase + Don't look for the Govt to save this sinking ship!<br /><br />So why did the Bank of Canada raise interest rates again this week if families are so indebted and this will just make their lives worse? When it will likely slow down an economy which is moribund and drive another spike through housing’s zombie heart?<br /><br />Because Mark Carney, along with Derek & me, know we’re now well and truly on the path which leads to the suburbs of Houston. Or Chicago. Tuscon. Miami, Seattle or Stockton. As in middle America, real estate excesses in Canada have led to debt excess, which has the potential to gut economic activity. And it continues. As stated, credit is still exploding higher. Only by sending out a message that rates are rising and the party is over can Carney try to corral the beast he created.<br /><br />But, it’s too late.<br /><br />I’m more convinced each day that none of this ends well for millions of families. They gambled on real estate, and most will lose. Not only will equity vanish, but they’ll be left with unrepayable debts which only get harder to service. Sadly when the economy does turn, it’ll mean surging financial markets they can’t afford to capture and higher debt rates on houses worth less.<br /><br />The groups most at risk are recent young buyers who thought 5% down was smart and riskless, and house-rich Boomers who couldn’t let go.<br /><br />TIMMMBBRRRR!Unknownhttps://www.blogger.com/profile/02135885959544346194noreply@blogger.comtag:blogger.com,1999:blog-7123542260692860177.post-56429271683949865862010-09-08T18:28:07.948-07:002010-09-08T18:28:07.948-07:00OTTAWA (Reuters) - The Bank of Canada raised its b...OTTAWA (Reuters) - The Bank of Canada raised its benchmark interest rate for a third consecutive time on Wednesday and sounded surprisingly hawkish despite predicting a more gradual than expected economic recovery.<br /><br />The central bank nudged its overnight rate target up 25 basis points to 1 percent and, contrary to most economists' expectations, did not signal a pause for its next decision in October. It said rates remained "exceptionally stimulative" but kept all options open due to doubts about the U.S. and global recoveries.<br /><br />More increases to come IMO.....Oh my those low low int rate mortgages are gonna be a lot higher when they mature in the next couple years. OUCH!Unknownhttps://www.blogger.com/profile/02135885959544346194noreply@blogger.comtag:blogger.com,1999:blog-7123542260692860177.post-7930973961992147732010-09-08T16:54:37.007-07:002010-09-08T16:54:37.007-07:00LOL...hey maybe we know the same guys!LOL...hey maybe we know the same guys!Unknownhttps://www.blogger.com/profile/02135885959544346194noreply@blogger.comtag:blogger.com,1999:blog-7123542260692860177.post-5898572210869532712010-09-08T16:48:56.538-07:002010-09-08T16:48:56.538-07:00@ Mark - this is also true. I think it is true in...@ Mark - this is also true. I think it is true in many professions, that you get all sorts. I, too, know that type of realtor that brags how easy it is. They usually have the flashiest cars and the nicest suits.a simple manhttps://www.blogger.com/profile/13054677016369304449noreply@blogger.comtag:blogger.com,1999:blog-7123542260692860177.post-31514736306053585972010-09-08T16:03:02.348-07:002010-09-08T16:03:02.348-07:00Well I know a whack of realtors that got into the ...Well I know a whack of realtors that got into the Biz in the last 5 years that have done very well, doing very little. They are personal friends and openly BRAG about how easy it is and what little they do to collect their commission cheques!<br /><br />Both sides to this story...oh and by the way, not one has a degree or any concept of basic economics, market psychology etc. <br /><br />They will, I'm sure return to their previous jobs as bartenders and car salesmen in short order.<br /><br />The party is over!<br /><br />I will agree that when times are tough or even "normal" a realtor can work hard BUT I also feel that they are overpaid given that the majority of folks now due their own due diligence (thanks to the internet) and realtors merely facilitate a transaction that could easily be handled by a lawyer and individual buying/selling the home. <br /><br />Most of the realtors I know get thrown a bone by their pals because they don't feel confident negotiating their own deals. This in itself is comical because I don't know too many deals that have been "negotiated" in the last 5 years LOL! Paying over asking price and getting caught up in bidding wars is not "negotiating"Unknownhttps://www.blogger.com/profile/02135885959544346194noreply@blogger.comtag:blogger.com,1999:blog-7123542260692860177.post-13604516725952450722010-09-08T11:22:57.431-07:002010-09-08T11:22:57.431-07:00@ sweetrealtor:
I agree with you - I know a numbe...@ sweetrealtor:<br /><br />I agree with you - I know a number of realtors that work seemingly non-stop. And they are called at all times of the day and no day is sacred. It can be a tough job, for certain, with regards to the hours some realtors put in.a simple manhttps://www.blogger.com/profile/13054677016369304449noreply@blogger.comtag:blogger.com,1999:blog-7123542260692860177.post-90124674154012410292010-09-08T10:30:32.293-07:002010-09-08T10:30:32.293-07:00Skeptic says "He will be sorely missed by his...Skeptic says "He will be sorely missed by his many Realtor® friends in Victoria who depended on him for their easy incomes."<br />Easy incomes, really? Have you previously worked as a real estate agent to make this statement?<br />You should talk to some wives and husbands of agents and ask them how hard their spouses work. My wife refers to herself as a "realty widow" as I work long hours every day and rarely have time for anything else - quite common in my industry. I wouldn't call this easy money.Sweetrealtorhttps://www.blogger.com/profile/11643504502534685881noreply@blogger.comtag:blogger.com,1999:blog-7123542260692860177.post-4383016570832086392010-09-08T06:49:47.223-07:002010-09-08T06:49:47.223-07:00Thanks DA. At 400 sales it would be the worst sep...Thanks DA. At 400 sales it would be the worst sept in at least the past ten years. Even at 500 it would still be the worst in at least 10 years.<br /><br />sit. watch. wait.a simple manhttps://www.blogger.com/profile/13054677016369304449noreply@blogger.comtag:blogger.com,1999:blog-7123542260692860177.post-29415840802613533602010-09-07T23:17:00.278-07:002010-09-07T23:17:00.278-07:00In my post earlier today the graphs showed that sa...In my post earlier today the graphs showed that sales have been dropping recently. Last week there were only 85 sales. I suspect a pickup in sales this week and optimistically predict about 400 sales this month.<br /><br />Here is how this would stack up against previous years.<br /><br /><a href="http://i52.tinypic.com/2vinpua.png" rel="nofollow">2000-2010 September Sales</a><br /><br />Not looking good folks!!Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-7123542260692860177.post-80987940072185857332010-09-07T21:53:14.353-07:002010-09-07T21:53:14.353-07:00I'm not ready to celebrate yet. I was singing...I'm not ready to celebrate yet. I was singing the same song in 08 and look what happened (once bitten twice scared). We still aren't close to those lows 2 years later. The powers that be have a lot of tools at there disposal and I don't underestimate what they will do to keep this bubble a float. But for now I am happy doing the bear dance.Rhinohttps://www.blogger.com/profile/04594599019555787326noreply@blogger.comtag:blogger.com,1999:blog-7123542260692860177.post-89706342775257979422010-09-07T20:19:43.299-07:002010-09-07T20:19:43.299-07:00The boom is dead.
All hail the bust.
S2The boom is dead. <br />All hail the bust. <br /><br />S2Johnny-Dollarhttps://www.blogger.com/profile/12950799399842707067noreply@blogger.comtag:blogger.com,1999:blog-7123542260692860177.post-41105165830691523752010-09-07T16:06:03.517-07:002010-09-07T16:06:03.517-07:00Today's Raeside editorial cartoon sums up the ...Today's Raeside editorial cartoon sums up the market: <br /><a href="http://raesidecartoon.com/dbtest/images/0/3240.gif" rel="nofollow">http://raesidecartoon.com/dbtest/images/0/3240.gif</a>DavidLhttps://www.blogger.com/profile/00353906360642344879noreply@blogger.comtag:blogger.com,1999:blog-7123542260692860177.post-48946808360825300112010-09-07T15:20:04.547-07:002010-09-07T15:20:04.547-07:00@Skeptic: Thanks for the laugh!
Adding to the obi...@<i>Skeptic</i>: Thanks for the laugh!<br /><br />Adding to the obituary comments:<br /><br />Although I met "Mr. Boom Sr." in the late 1980's and early 1990's, my financial circumstances didn't allow me more than just a passing acquaintance. So it was with some pleasure that I met his son "Mr. Boom" during his youth in 2002. At that time, I was unable to directly help any of his Realtor® friends as I was involved in a private real-estate transaction. <br /><br />However, Realtors® friends assure me that all who knew Mr. Boom had the highest regard for him. For some, the shock of Mr. Boom's sudden passing is too much to bear (market?), and thus remain in denial.<br /><br />I will duly acknowledge the passing by paying an extra lump-sum payment on my mortgage. RIP.DavidLhttps://www.blogger.com/profile/00353906360642344879noreply@blogger.comtag:blogger.com,1999:blog-7123542260692860177.post-59391044826505693002010-09-07T14:34:57.194-07:002010-09-07T14:34:57.194-07:00It is with deep sadness that I announce that Mr. H...It is with deep sadness that I announce that Mr. Housing Boom passed away in Victoria last spring. As a newcomer to Victoria in 2002 he quickly made good friends with many realtors and homeowners. His untiring energy and willingness to help owners make a profit on their humble home will not be forgotten. He will be sorely missed by his many Realtor® friends in Victoria who depended on him for their easy incomes. The real estate believers who used increased equity to get loans for essential items like new cars, granite countertops and stainless steel appliances deeply regret his passing.<br /><br />Mr. Boom leaves behind a legacy of high debt and recent buyer regret. He is survived by his twin brother, collapsing bubble, and many vulture buyer cousins. At the request of the local real estate board a memorial service will not be held. In lieu of flowers donations may be made to the banks holding the mortgages in Victoria.EagerBuyer(Not)https://www.blogger.com/profile/02849067281638388070noreply@blogger.comtag:blogger.com,1999:blog-7123542260692860177.post-6064639061630319042010-09-07T14:22:42.046-07:002010-09-07T14:22:42.046-07:00Examples of people that have to sell (I sense they...Examples of people that have to sell (I sense they both bought another house in the spring thinking theirs would quickly sell for asking, if not above as a month before we were into multiple offer above asking). <br /><br />Both listed in the spring for $750,000 and yesterday both did their most recent price reductions:<br /><br />2082 Meadow to $630K<br />2438 Lincoln to $680K.<br /><br />I really feel for these folks (honestly).a simple manhttps://www.blogger.com/profile/13054677016369304449noreply@blogger.comtag:blogger.com,1999:blog-7123542260692860177.post-72936198011427826732010-09-07T13:43:08.041-07:002010-09-07T13:43:08.041-07:00The psychology of the market, in my opinion, is th...The psychology of the market, in my opinion, is the key to how this market will evolve.<br /><br />A couple of years back, when an interest rate increase was announced people rushed into buy. Today, an increase in the interest rate makes people pull back from buying.<br /><br />The same stimulus - but different result. Uncertainty has gripped the market and this is worrisome for any real estate economist. Fear is a double edged sword, it drove the market up and it will drive the market down. The only thing worse than fear is boredom. And if people become bored with real estate, its teats up for prices because no one can tell where the bottom lays. <br /><br />The MSM has turned on Real Estate and buying a property is now becoming part of a comedy routine. So, how do you own a million dollar home in Vancouver. Buy a two million dollar home - and wait.<br /><br />People do not buy things that people make jokes about.Johnny-Dollarhttps://www.blogger.com/profile/12950799399842707067noreply@blogger.comtag:blogger.com,1999:blog-7123542260692860177.post-88600846431735008812010-09-07T13:31:19.528-07:002010-09-07T13:31:19.528-07:00I strongly think we are in a bubble and we are in ...I strongly think we are in a bubble and we are in the process of popping right now, I base my opinion on logic and 3 key points (I find those that think there is no bubble and think this nonsense can continue cannot back their opinions up with logic or fact - instead say random things like "Victoria is the best place to live so everyone will come here" - sure sure...), anyway 3 key points of logic:<br /><br />1. Fundamentals (a bubble is defiined by prices that do not align with core intrinsic values - every stat and piece of evidence points to the fact we are completely out of line with true value - rents vs. ownership costs, alignment with wages, etc. No one can argue that we are in line with fundamentals because we simply are NOT and this is a key point showing we are in a bubble.<br />2. Debt loads (when debt becomes too much - pop - we as Canadians have the highest debt price tag per person in the world - we cannot afford to continue this...almost everyone I know has huge credit card debt and second mortgages...as the debt grows it eventually reaches a point where it is unmanageable and...POP)<br />3. Statistical evidence (thank-you again double agent for all the excellent graphs and interpretations) that the bubble is already popping (prices are dropping right now and will continue, sales are record lows, inventory is high... hey if it walks like a duck... most logical path is that the crash will continue)<br /><br />So in conclusion... POP!!! The market is done, I think we all know that and those that are having a hard time with this are facing denial right now but should move through the stages of grief to acceptance in time. Can anyone out there give me one logical fact-based reason why this crash won't continue? Nope, I didn't think so.thinkhttps://www.blogger.com/profile/04527051722420253429noreply@blogger.comtag:blogger.com,1999:blog-7123542260692860177.post-78924639314476141892010-09-07T13:03:41.979-07:002010-09-07T13:03:41.979-07:00I know all too well that you can't make a tren...I know all too well that you can't make a trend from a couple of data points, but I also don't think a sales # of around 400 is out of the question. It actually would fit the trend the market has shown this summer. <br /><br />It wouldn't have been such a big deal either if VREB wasn't beating the drum so loudly about a sept turn about. That is what you should be pointing towards as BS sweetreator, as it is a complete unsupported fabrication.omchttps://www.blogger.com/profile/11570216584047858772noreply@blogger.comtag:blogger.com,1999:blog-7123542260692860177.post-23311317480270835262010-09-07T13:02:45.231-07:002010-09-07T13:02:45.231-07:00HHV said: "what it means to the local market....HHV said: "what it means to the local market."<br /><br />My 2 cents... This is the key point I think. His caution with regard to rolling averages and so on is valid and often poorly understood. <br /><br />As HHV has said in the past, he does not intend to do predictions (even though sometimes certain statements may appear to some as predictions - nobody is perfect). <br /><br />Interpreting statistical results is not trivial. For example, many statistical methods assume certain things about the underlying left over (or residual) errors that are not explained by a certain model. If the residual error is not explained sufficiently by the assumptions, misleading conclusions can be drawn. <br /><br />Another big issue are competing models to explain certain data. Model choice is subjective and cannot be explored exhaustively. Even worse, in many studies, model choice may not be motivated sufficiently by quantitative measures. <br /><br />Hence, forecasting is a very difficult problem which is often not appreciated by the public. The uncertainty of the prediction is also very important and is often not well understood. For example, when trying to forecast the return numbers of Sockeye Salmon in the Fraser River, uncertainties are so large that the prediction is almost useless. The same is true for many many market predictions based on statistical analysis of historical data. <br /><br />One reason that it's so difficult is that psychology plays into the prediction in a complicated way that causes all kinds of feedbacks that are intrinsically not predictable. <br /><br />Hence, take forecasting with a grain of salt. Ultimately, we will only know if we have a bubble here once it popped. Otherwise bubbles would not be such a big deal. Time will tell.Unknownhttps://www.blogger.com/profile/03610949355592602680noreply@blogger.comtag:blogger.com,1999:blog-7123542260692860177.post-35848813426224598562010-09-07T12:57:49.416-07:002010-09-07T12:57:49.416-07:00wow people...check these LEED's condo's ou...wow people...check these LEED's condo's out...<br /><br />A501-373 Tyee Rd $530K down to $439K<br /><br />A806-373 Tyee Rd $681K down to $569K<br /><br />Quite the drops in these new "green" condosAlexandraherehttps://www.blogger.com/profile/13100843258061373047noreply@blogger.comtag:blogger.com,1999:blog-7123542260692860177.post-9098573247827736662010-09-07T12:52:04.136-07:002010-09-07T12:52:04.136-07:00I have been reading the discussion over on Vibrant...I have been reading the discussion over on Vibrant Victoria. Seems like HHV has been sucked into a discussion which is leading nowhere.<br /><br /><b>Sometimes people can't see the forest for the trees!!</b> Lets take a look at some basic facts:<br /><br />- Real estate sales in August were at a 20 year low according to a recent TC article (based on VREB stats). 2010 summer sales (see DA) are at the lowest level in 10 years.<br />- Price reductions are rampant. Everyone using PCS has been observing this for months.<br />- Average and median prices have been falling for months. This is a poor proxy for a housing price index. However this is not what happened when the market was hot.<br />- Active listings are over 4000 and this is very high compared to other years.<br />- Sales will trend down until the end of the year. (See VREB sales graphs for the last 5 years.)<br />- CMHC has changed the mortgage qualification rules for under 20% down buyers, investors and the self-employed.<br />- House affordability is at a very high level, Canadians are carrying record debt and there is talk of a double dip recession in the US.<br />- HST has everyone feeling more tax pressure. New homes cost more and legal/realtor fees have increased. The uninformed think HST applies to resale housing (had this conversation yesterday with a friend)<br />- VREB is telling everyone not to worry which makes everyone nervous. They smell the smoke but there is no fire :>)<br />- Papers and TV have been talking about a bubble and high Vancouver/Victoria prices for months. Even the last TC article talked about the market slowdown.<br />- The man on the street is talking about a bubble. Some believe it, some deny it but they are talking none the less.<br /><br />So... It seems pretty obvious to me that this is not positive for real estate in Victoria. Remember anything is only worth what people will pay for it. When many potential buyers move to the sidelines and those left are aggressive with their offers where do sale prices go? Those that need to sell will take less and this is what sets market value in a given area.EagerBuyer(Not)https://www.blogger.com/profile/02849067281638388070noreply@blogger.comtag:blogger.com,1999:blog-7123542260692860177.post-86729375781794800302010-09-07T12:48:29.262-07:002010-09-07T12:48:29.262-07:00This comment has been removed by the author.EagerBuyer(Not)https://www.blogger.com/profile/02849067281638388070noreply@blogger.comtag:blogger.com,1999:blog-7123542260692860177.post-81065753221873940082010-09-07T12:46:09.080-07:002010-09-07T12:46:09.080-07:00This comment has been removed by the author.EagerBuyer(Not)https://www.blogger.com/profile/02849067281638388070noreply@blogger.comtag:blogger.com,1999:blog-7123542260692860177.post-7900620735407908092010-09-07T12:30:10.445-07:002010-09-07T12:30:10.445-07:00I know that ChrisA would prefer comments in Vibran...I know that <i>ChrisA</i> would prefer comments in <i>VibrantVictoria</i> but I don't have to time to double-post. <br /><br />In any case, I talked with my wife (who is a stats guru) about the data and analysis being used. She said that without looking at the distribution (and thus standard deviation) of house sale values, that you cannot derive much from just the mean or median. Aggregating the data into ranges then examining the median and mode ranges might be a bit more useful. If you identify the trend lines, extend them into the near future, then you could use regression analysis in order to determine the validity of the trend. <br /><br />By the time that this kind of analysis is complete, the future has become the present and the present has become the past!DavidLhttps://www.blogger.com/profile/00353906360642344879noreply@blogger.comtag:blogger.com,1999:blog-7123542260692860177.post-62436619161806569872010-09-07T12:20:20.728-07:002010-09-07T12:20:20.728-07:00Double-agent and Marko - thanks for the stats. Th...Double-agent and Marko - thanks for the stats. These numbers, especially the further fall in sales and the spike in listings mirror what i was seeing on the PCS.<br /><br />Public emotion in Victoria is quickly changing towards real estate; you can do all the cubic spline regressions and random walk analyses you want, but there is a tangible sense of panic in the air.<br /><br />Further, in terms of using historical data to model future trends in Victoria, it is an interesting mind exercise but there has never been such a confluence of factors hit the market as they are now, so the past can give us some ideas, but it was not observed under today's market conditions. Many of the best economists in the world were wrong when the US crashed, despite their multi-million dollar grants to model and create analyses as to market trends. Simple answer is that we can't predict the future.<br /><br />Analyses need to spend less time in mathematics and more time in psychology to better understand what is coming.a simple manhttps://www.blogger.com/profile/13054677016369304449noreply@blogger.com