tag:blogger.com,1999:blog-7123542260692860177.post7325872502004698217..comments2023-12-02T00:38:46.467-08:00Comments on House Hunt Victoria: Monday Market UpdateHouseHuntVictoriahttp://www.blogger.com/profile/07456914359088891317noreply@blogger.comBlogger237125tag:blogger.com,1999:blog-7123542260692860177.post-6236986329534079082013-01-30T18:10:05.170-08:002013-01-30T18:10:05.170-08:00@info. I think we're done. Clearly the debat...@info. I think we're done. Clearly the debate is going nowhere.Leo Shttps://www.blogger.com/profile/02951281972056927807noreply@blogger.comtag:blogger.com,1999:blog-7123542260692860177.post-46116723183140944672013-01-30T18:05:25.931-08:002013-01-30T18:05:25.931-08:00When inflation declines RE prices rise with fallin...<i> When inflation declines RE prices rise with falling interest rates. </i><br /><br />Except when they don't, like in the US from 2006 to today. Or in Japan for two decades.<br /><br />Don't confuse the declining interest rates of the 1990's, which were the result of beating double digit inflation and deficit reduction, with the declining interest rates of the last decade which were the result of threatened deflation. It's the underlying cause of that decline that makes the difference.patriotzhttps://www.blogger.com/profile/11154064267408955762noreply@blogger.comtag:blogger.com,1999:blog-7123542260692860177.post-65318846112669033832013-01-30T17:30:51.689-08:002013-01-30T17:30:51.689-08:00January will turn out to be the cowgirl that rode ...January will turn out to be the cowgirl that rode the bull for more than 8 seconds!<br /><br />*grin* <br /><br />Signed: Dancing Bear!Victoriahttps://www.blogger.com/profile/06789488915221549032noreply@blogger.comtag:blogger.com,1999:blog-7123542260692860177.post-38996644247845957882013-01-30T17:17:33.464-08:002013-01-30T17:17:33.464-08:00Re: frog in a pot
Interesting stats.
I think th...Re: frog in a pot<br /><br />Interesting stats. <br /><br />I think the trend of inflation exceeding income gains has to continue. In Canada, with its large resource sector, we have some protection from four billion Third Worlders working for a tenth or less of N. American wages (although at least one mining company is presently trying to import cheap Third World labor to Canada). <br /><br />But for the US and Europe to regain competitiveness real wages have to fall. Wage cuts are strongly resisted. Inflation achieves the same end less obviously. And it defrauds creditors. That is why China is angry about the US Fed's plans for continued money printing. Not only will it devalue China's $trillion plus in US Treasuries, it will reduce China's competitive advantage due to cheap labor. <br /><br />But if the US dollar is driven down by monetary measures, Canada will have to make a comparable adjustment or suffer severe unemployment.<br /><br />What this suggests is that it will be increasingly difficult for Canadians to service mortgage debt, a consequence that will tend to depress RE prices -- quite apart from any affect of inflation on interest rates. <br /><br />In general, and counter-intuitively, inflation and RE prices seem to be out of phase. When inflation is high, RE prices fall because of high interest rates. When inflation declines RE prices rise with falling interest rates. CShttps://www.blogger.com/profile/03399620869685840906noreply@blogger.comtag:blogger.com,1999:blog-7123542260692860177.post-42674596015314593632013-01-30T16:43:52.122-08:002013-01-30T16:43:52.122-08:00@ CS
... And even public sector wages have been t...@ CS<br /><i> ... And even public sector wages have been tightly controlled.The inflation we may experience during the next decade will not likely be out of control, but it will be deliberately engineered with a view to lowering real wages. That is the only way out of the current depression.</i><br /><br />Over the past 10 years, public sector wages have increased by approximately 20%. During this time: food prices have risen by 25% (dairy) to 60% (bread), BC Hydro has increased by 64% (6.23¢/kWh to 10.19¢/kWh), gasoline has risen 93% (60¢/litre to $1.16/litre), and housing has increased by 115% ($280K to $603K). With many of these inflationary items not included in the <a href="http://www.bankofcanada.ca/rates/indicators/key-variables/inflation-control-target/" rel="nofollow">Core CPI</a> (Consumer Price Index), this real-world inflation appears to go unnoticed by most. I feel like a <a href="http://en.wikipedia.org/wiki/Boiling_frog" rel="nofollow">frog in a pot</a> of water on the stove ...DavidLhttps://www.blogger.com/profile/00353906360642344879noreply@blogger.comtag:blogger.com,1999:blog-7123542260692860177.post-37854528898208096752013-01-30T16:35:48.550-08:002013-01-30T16:35:48.550-08:00Mayfair Man - median was running around 488K at th...Mayfair Man - median was running around 488K at the end of last week, average in the high 530's. Only 2 million + sales to that point. The average could change quite a bit, not so much the median (unless a whole bunch of 520K + houses sell in the last week and very little below 488K<br /><br />For everyone - I'm finding the volume of inane back and forth comments overwhelming - can we set a ground rule for a maximum of, say five comments per person per day? Some of us work and want to contribute, but can't keep up with the chatter. Thanks.Animal Spirithttps://www.blogger.com/profile/14290032551579947421noreply@blogger.comtag:blogger.com,1999:blog-7123542260692860177.post-14746226148776014022013-01-30T16:21:37.131-08:002013-01-30T16:21:37.131-08:00no kidding... My point was we don't know what ...no kidding... My point was we don't know what will happen and all evidence right now points to sustained low rates. Rates could have returned to 10-12% from 6-7% in the late 90's but they didn't. I ran rent vs buy calculations in the early 90's and renting was the way to go. Thankfully I thought about it then because I actually did rent and invest so when rates went down, I bought. Yes, that's right, prices didn't go down, rates went down...<br /><br />That said, in the present, low rates are NOT a reason to buy. It does however benefit anyone who HAS bought... dasmohttps://www.blogger.com/profile/14638226799679794103noreply@blogger.comtag:blogger.com,1999:blog-7123542260692860177.post-86069973610020197422013-01-30T16:07:31.631-08:002013-01-30T16:07:31.631-08:00You could have said the same thing about rates and...<i>You could have said the same thing about rates and the resulting risk to affordability in the 90's...And they did go up and back down again... </i><br /><br />At no time during the remainder of the 1990's did mortgage rates reach the levels that they were in 1990 and 1991.<br /><br />Also during every five year period in the decade rates went down. That means every person buying with a 5 year mortage faced a lower rate upon renewal.<br /><br />Regarding such increases that did happen, a rise in rates from 12% to 14% has a much much smaller impact on affordability than a rise from 3% to 5%.patriotzhttps://www.blogger.com/profile/11154064267408955762noreply@blogger.comtag:blogger.com,1999:blog-7123542260692860177.post-60490752756260978822013-01-30T16:00:01.277-08:002013-01-30T16:00:01.277-08:00"You could have said the same thing about rat..."You could have said the same thing about rates and the resulting risk to affordability in the 90's...And they did go up and back down again... "<br /><br />Throw caution into the wind and yell the battle cry of the next generation YOLO!!!!!!!koozdrahttps://www.blogger.com/profile/16879691936698695299noreply@blogger.comtag:blogger.com,1999:blog-7123542260692860177.post-45618785111235742232013-01-30T15:45:03.044-08:002013-01-30T15:45:03.044-08:00Prediction is hard, especially about the future.Prediction is hard, especially about the future.Introverthttps://www.blogger.com/profile/03333045260631104757noreply@blogger.comtag:blogger.com,1999:blog-7123542260692860177.post-39301381329124552142013-01-30T15:23:47.904-08:002013-01-30T15:23:47.904-08:00You could have said the same thing about rates and...You could have said the same thing about rates and the resulting risk to affordability in the 90's...And they did go up and back down again... dasmohttps://www.blogger.com/profile/14638226799679794103noreply@blogger.comtag:blogger.com,1999:blog-7123542260692860177.post-88012187187614995032013-01-30T15:10:50.567-08:002013-01-30T15:10:50.567-08:00"The only thing we know for sure about intere..."The only thing we know for sure about interest rates is that they will rise substantially."<br /><br />I'll bet you the exact opposite for awhile now. That is to say, fixed mtg rates will fall from here (for a lot longer than 3 months). <br /><br />Time for another installment of <br />_Fun with Rates with your dear host Dave_<br /><br />‘65-’69 -- 5yr rates <b>soar</b> from 7-10.5%, home prices <b>soar</b><br />‘72-’75 -- rates <b>soar</b> from 8.5-12%, home prices <b>soar</b><br />‘78-’81 -- <b>soar</b> from 9-18%, home prices <b>soar</b><br />‘81-’84 --rates <b>plummet</b>, home prices <b>plummet</b> <br /> ‘08 -- 5yr mtg rates <b>plummet</b>, home prices <b>plummet</b> (pay attention introvert)<br />‘09-’10 -- rates <b>rise</b>, home prices <b>rise</b><br />‘11-’12 -- rates <b>fall</b> , home prices <b>fall</b><br /><br />Rates are_not_always inverse to prices as everyone and their hamster thinks. Now is one of those times. UNTIL you adjust for inflation, rates are meaningless for predicting asset prices.Philhttps://www.blogger.com/profile/00550264432110709714noreply@blogger.comtag:blogger.com,1999:blog-7123542260692860177.post-32295612042690607912013-01-30T15:07:57.292-08:002013-01-30T15:07:57.292-08:00This comment has been removed by the author.Philhttps://www.blogger.com/profile/00550264432110709714noreply@blogger.comtag:blogger.com,1999:blog-7123542260692860177.post-85972153005501935252013-01-30T14:48:24.393-08:002013-01-30T14:48:24.393-08:00"The only thing we know for sure about intere..."The only thing we know for sure about interest rates is that they will rise substantially."<br /><br />"add "sometime in the future" onto the end of that statement and you'll almost have me agreeing with you!"<br /><br />I would agree with your statement as well. But "sometime in the future" could mean 3 months from now. <br /><br />Nobody can predict when it will happen. All we know for certain is that it will happen. <br /><br />infohttps://www.blogger.com/profile/02848148105386213925noreply@blogger.comtag:blogger.com,1999:blog-7123542260692860177.post-35023120670854345452013-01-30T14:45:17.867-08:002013-01-30T14:45:17.867-08:00@ Leo
Victoria's recent housing market crash ...@ Leo<br /><br /><a href="http://www.housepriceindex.ca/Default.aspx" rel="nofollow">Victoria's recent housing market crash in 08-09</a> is all the proof we need that Victoria, along with the rest of Canada, is not immune to a major housing market correction. In fact, that major correction has already started across Canada. We all know that the crash of 08-09 was stopped by a massive government intervention or it would have continued to correct until incomes were able to support prices. <br /><br />It doesn't matter what might have happened in Victoria in 1994 because Canada was not in a housing price bubble at the time. <br /><br /><a href="http://leithwheelerblog.sitecm.com/uncategorized/housing-bubble/#more-341" rel="nofollow">This chart</a> proves that when any country reaches a housing price bubble and then peaks, it always corrects back the same amount. Note that this does not involve interest rates at all. It only involves two things: price and income. <br /><br />The chart shows data for 48 different countries which would have involved, literally, thousands of cities across the world. <br /><br />The evidence of thousands of cities across the world all correcting substantially when their country reached a housing price bubble is more than enough evidence to crush what might have happened in one city in a country that was not in a housing bubble at the time.<br /><br /><a href="http://m.theglobeandmail.com/globe-investor/investment-ideas/signs-point-to-a-severe-housing-correction-in-canada/article624541/?service=mobile" rel="nofollow">George Athanassakos of the Globe and Mail quantifies Canada's housing bubble:</a><br /><br />"The ratio of house prices to income has historically averaged about 3.5 in Canada. It now stands at about 5.5. It is difficult to see how income growth in the future can bring this ratio close to the historical average within any reasonable period - so it follows that house prices will have to decline."<br /><br />Canada's price/income ratio is currently 47% higher than its historical average, according to this article. Note that interest rates are not involved in this calculation. <br /><br />There will simply be no small 10% correction in Victoria, going forward, before prices reach bottom. A conclusion like that can only be reached by ignoring the most important factors that have caused housing bubbles and subsequent housing market crashes in markets throughout the world for decades. <br /><br />Victoria's correction going forward will be much, much more than 10%. <br /><br />It is not different in Victoria. <br /><br />infohttps://www.blogger.com/profile/02848148105386213925noreply@blogger.comtag:blogger.com,1999:blog-7123542260692860177.post-10449101736241808062013-01-30T14:25:25.101-08:002013-01-30T14:25:25.101-08:00"The only thing we know for sure about intere..."The only thing we know for sure about interest rates is that they will rise substantially."<br /><br />add "sometime in the future" onto the end of that statement and you'll almost have me agreeing with you!caveat emptorhttps://www.blogger.com/profile/15318994505715193523noreply@blogger.comtag:blogger.com,1999:blog-7123542260692860177.post-35265758150896759192013-01-30T14:06:41.583-08:002013-01-30T14:06:41.583-08:00The only thing we know for sure about interest rat...The only thing we know for sure about interest rates is that they will rise substantially. <br /><br />infohttps://www.blogger.com/profile/02848148105386213925noreply@blogger.comtag:blogger.com,1999:blog-7123542260692860177.post-467386916306609742013-01-30T13:28:34.175-08:002013-01-30T13:28:34.175-08:00My Last OT comment on this thread I promise:
http:...My Last OT comment on this thread I promise:<br />http://www.nhs.uk/conditions/Euthanasiaandassistedsuicide/Pages/Introduction.aspx<br /><br />The NHS says euthanasia is illegal in Britain. A British tabloid says babies are being killed. Hmm who to believe. <br /><br />As a semantic point "involuntary" euthanasia of a baby isn't possible since a baby couldn't give (or deny) informed consent. The appropriate term would be "non-voluntary".<br /><br />OK back to real estate.caveat emptorhttps://www.blogger.com/profile/15318994505715193523noreply@blogger.comtag:blogger.com,1999:blog-7123542260692860177.post-6843686088403059652013-01-30T13:26:40.884-08:002013-01-30T13:26:40.884-08:00@introvert
"Debt is constant? Then why does ...@introvert<br /><br />"Debt is constant? Then why does my principal owed decrease every two weeks?"<br /><br />Yes, I can understand why you would be confused by that.<br /><br /> My point was that regardless of changes in interest rates or house prices the debt is still there. In that sense it's constant. What you contract to borrow you must pay back. For example if the market decides your house is worth 25% less your debt at that time remains the same.<br /><br />Admittedly, poorly phrased by me but I think most people could figure that one out.<br /><br />Even a modest correction in house prices from now will likely result (for those who have to sell) in losing their down payment as well as having to write a cheque to the bank.<br /><br />Not a pretty thing.vawrhttps://www.blogger.com/profile/17588554412067862401noreply@blogger.comtag:blogger.com,1999:blog-7123542260692860177.post-20062658535199553832013-01-30T13:26:07.784-08:002013-01-30T13:26:07.784-08:00"Speaking of investing, who here bought RIMM ..."Speaking of investing, who here bought RIMM at 7 and sold at 17?"<br /><br />We are all quite sure you did! LOL <br /><br />Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-7123542260692860177.post-81490801572247561392013-01-30T13:24:55.306-08:002013-01-30T13:24:55.306-08:00Kermit is not a hermaphrodite. You are not up on ...Kermit is not a hermaphrodite. You are not up on your muppet lore. Anonymoushttps://www.blogger.com/profile/08188115284116016130noreply@blogger.comtag:blogger.com,1999:blog-7123542260692860177.post-86593429479032209102013-01-30T13:02:20.241-08:002013-01-30T13:02:20.241-08:00"Why don't they do it humanely? Bash them..."Why don't they do it humanely? Bash them over the head with a two by four or something, instead of cruelly shrinking them for days on end."<br /><br />The discussion today has gone in a strange direction.koozdrahttps://www.blogger.com/profile/16879691936698695299noreply@blogger.comtag:blogger.com,1999:blog-7123542260692860177.post-54768481512460548392013-01-30T13:01:21.940-08:002013-01-30T13:01:21.940-08:00There is an old saying...an ounce of gold buys a g...There is an old saying...an ounce of gold buys a good suit. Holds true to this day. Gold has shown itself to stick to inflation pretty closely. Speaking of investing, who here bought RIMM at 7 and sold at 17?dasmohttps://www.blogger.com/profile/14638226799679794103noreply@blogger.comtag:blogger.com,1999:blog-7123542260692860177.post-34392465872896146502013-01-30T12:59:00.375-08:002013-01-30T12:59:00.375-08:00My God, I just read that article are pointed out. ...My God, I just read that article are pointed out. Here's a quote:<br /><br />"One doctor has admitted starving and dehydrating ten babies to death in the neonatal unit of one hospital alone.<br /><br />Writing in a leading medical journal, the physician revealed the process can take an average of ten days during which a baby becomes ‘smaller and shrunken’.<br /><br />Why don't they do it humanely? Bash them over the head with a two by four or something, instead of cruelly shrinking them for days on end. <br />CShttps://www.blogger.com/profile/03399620869685840906noreply@blogger.comtag:blogger.com,1999:blog-7123542260692860177.post-52615255750107918422013-01-30T12:54:33.396-08:002013-01-30T12:54:33.396-08:00Also how about a (non Rick Santorum) reference for...<i>Also how about a (non Rick Santorum) reference for "The Brits and the Dutch already have an involuntary euthanasia program in place. "</i><br /><br />Who's Rick Santorum?<br /><br />As for the British healthcare, or rather death delivery, system, it's not hard to find info:<br /><br />Here's a most reliable source:<br /><br />Now sick babies go on death pathway: Doctor's haunting testimony reveals how children are put on end-of-life plan<br /><br /><a href="http://www.dailymail.co.uk/news/article-2240075/Now-sick-babies-death-pathway-Doctors-haunting-testimony-reveals-children-end-life-plan.html#ixzz2JUgox4wf" rel="nofollow">Read more</a><br /><br />The end-of-life plan is I believe the standard routine for thoseof the sick and elderly in the "care" of the state. <br /><br />If you look, I'm sure you'll find something on the Dutch program.CShttps://www.blogger.com/profile/03399620869685840906noreply@blogger.com