Real Estate

Vancouver housing bubble?

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Mar 31, 2010
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MMMM wrote: Wow Adam, you go from:


To this:

Maybe instead of bashing everyone and being rude just admit your wrong. Almost one year later, no crash, prices are rising (according to some stats), no blood in the streets and life goes on.
I wonder which part of this title of this post you do not understand

*VANCOUVER BUBBLE* The road to a 50% housing crash (w/ monthly stats)

it is elementary English, your native language
The prices are sliding downward in Vancouver. You have 3-5% down in the last month
Last time when I checked the prices were not down at all so theoretically you have all the time in this world to make it to 50% till the end of the year

Again, I have no idea what consolation is that for you if we have been predicting this for years and it has not happened yet. It is going down as we speak

Most of us will be happy with a 15% correction :-)
Let's take it easy, nobody wants a disaster.... we just want the specuvestors breaded and fried.
Good food is cooked slowly :D
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Feb 7, 2006
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Mark77 wrote: The problem with looking at aggregate statistics, rather than taking a more in-depth view, is that we need to question why the sale prices on used housing are rising.

In the case of many areas, Calgary, Vancouver, etc., in particular, prices on equivalent low-end used houses are not generally rising. In fact, they're falling. However, this segment of the market has seen its volumes decimated, as the first-time new homebuyer can no longer easily obtain CMHC-insurance for their subprime mortgage.

The higher end of the market, ie: established people with lots of equity, trading houses amongst themselves (conceptually), is still intact. Hence, the average prices appear to be rising because the low end of the market has now been excluded from the calculations.

"Affordability", and any discussions of it, are, by their very nature, "loaded issues", and are highly subjective. I would tell you, "yes, a house is less affordable if it costs more". However, others may inject other measures or seek to use a derivative of house prices (and interest rates) -- the "monthly payment", to describe "affordability".
Mark according to this link your very wrong about Calgary, almost delusional would be the proper term.

Bobs

The Calgary herald agrees

The Herald's title states: smashes records in May.

You need to check your facts :facepalm: :facepalm: :facepalm:
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Feb 7, 2006
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PF4RedFlag wrote: Good food is cooked slowly :D
You can cook food any way you want. Good food is cooked properly. Like cooking or real estate you
need to understand the complexities of the situation. If you attempt a simple recipe or a complex real estate deal both will
fail with out an understanding of the basics.
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MMMM wrote: You can cook food any way you want. Good food is cooked properly. Like cooking or real estate you
need to understand the complexities of the situation. If you attempt a simple recipe or a complex real estate deal both will
fail with out an understanding of the basics.

you forgot the mantra: "only REA understand these technicalities"
and you forgot to explain what part of "the road to" you did not understand above.
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MMMM wrote: Mark according to this link your very wrong about Calgary, almost delusional would be the proper term.
Nope. If you actually believe that the low end in Calgary is doing well....well please, get some help.
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Feb 19, 2010
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Mark77 wrote: adamtheman gave most of the response I would have given
Of course he did. Why? Because you're both on the outside looking in.
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Conquistador wrote: Of course he did. Why? Because you're both on the outside looking in.
And what's that supposed to mean? Are you going to deny that skimming 5% off of every RE transaction, plus a spread on mortgage interest, hasn't caused a distribution of wealth in this country towards those associated with those industries? Even though, at the end of the day, the quantity of RE may very well have remained the same?

Let me guess, you believe in alchemy too?
TodayHello wrote: ...The Banks are smarter than you - they have floors full of people whose job it is to read Mark77 posts...
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Here is a zoom in on the GVA situation
As you can see the regions with the most sales are actually the ones with the highest prices or with the highest number of specuvestors caught with their pants of by this market direction change

I bet you that most of the sales that happened in these two were actually discounted sales, investors actually trying to get out of the market ASAP
I wonder how the numbers would look like if you take these (West Vanc. and Richmond) two out of the ecuation

Curtesy to http://greaterfoolvancouver.blogspot.ca/


May 2011-2013 Greater Vancouver SFH Stats by Region
Richmond
Sales: +26% vs 2012; -6% vs 2011
S/L Ratio: 42% vs 26% vs 39% (2011)
HPI $ YoY : -8.0% (-9.1,-8.4,-9,-6.3,-6.5,-4.2,-4) (prev months' YoY % change) 
 
Vancouver West
Sales: +53% vs 2012; -18% vs 2011
S/L Ratio: 58% vs 27% vs 67% (2011)
HPI $ YoY: -8.0% (-8.5,-9.1,-9.2,-7.5,-5.5)

Vancouver East
Sales: +4.6% vs 2012; -25% vs 2011.
S/L Ratio: 64% vs 45% vs 79% (2011)
HPI $ YoY: -2.8% (-2.8,-2.6,-2.7,-0.5,+0.2)

Burnaby
Sales: -15% vs 2012; -48% vs 2011
S/L Ratio: 37% vs 37% vs 74% (2011)
HPI $ YoY: -4% (-4.7,-4.9,-3.1,-2.3,+0.4)

Coquitlam
Sales: -12% vs 2012; -30% vs 2011)
S/L Ratio: 51% vs 46% vs 70% (2011)
HPI $ YoY: -1.8% (-0.4,+0.8,+1.4,+2.4,+2.9)

North Van
Sales: -3% vs 2012; -20% vs 2011
S/L Ratio: 56% vs 49% vs 74% (2011)
HPI $ YoY: -3.3% (-2.6%,-2.4,-2.9,-2.5,-3.7,+0.3)

* Richmond and Van West SFH showed marked improvement in number of sales. Price gap vs 2012 narrowed slightly, but is still at -8%.

* Burnaby, Coquitlam, and North Van showed worse sales and ongoing/worsening YoY price decline.
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And here is the graph showing what is going on in West Vancouver. Sales up, prices DOWN

[IMG]http://www.yattermatters.com/wp/wp-cont ... -Areas.jpg[/IMG]

Code: Select all

Median Price	Vancouver West	Vancouver East	West Vancouver	North Vancouver
March	$2,020,000	 $868,000	$1,780,000	 $936,000
April	$2,169,000	 $862,000	$2,130,000	$1,025,000
May	$2,100,000	 $909,000	$1,797,750	 $936,101
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Newbie
Jun 4, 2013
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adamtheman wrote: (Updated as of June 1, 2013)

...
as they say in real estate, its headed for a 'correction' rather than 'crash'. I don't agree with 50% crash, maybe 15 -20 at most. enough for young locals to barely get into the market! I am sure there are a ALOT of happy people in the west coast waiting to buy.
----------------------
[OP]
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Dec 3, 2004
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Conquistador wrote: Of course he did. Why? Because you're both on the outside looking in.
I have no problem being "on the outside looking in" when it comes to Vancouver real estate.
[OP]
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PF4RedFlag wrote: Here is a zoom in on the GVA situation
As you can see the regions with the most sales are actually the ones with the highest prices or with the highest number of specuvestors caught with their pants of by this market direction change

I bet you that most of the sales that happened in these two were actually discounted sales, investors actually trying to get out of the market ASAP
I wonder how the numbers would look like if you take these (West Vanc. and Richmond) two out of the ecuation

Curtesy to http://greaterfoolvancouver.blogspot.ca/


May 2011-2013 Greater Vancouver SFH Stats by Region
Richmond
Sales: +26% vs 2012; -6% vs 2011
S/L Ratio: 42% vs 26% vs 39% (2011)
HPI $ YoY : -8.0% (-9.1,-8.4,-9,-6.3,-6.5,-4.2,-4) (prev months' YoY % change) 
 
Vancouver West
Sales: +53% vs 2012; -18% vs 2011
S/L Ratio: 58% vs 27% vs 67% (2011)
HPI $ YoY: -8.0% (-8.5,-9.1,-9.2,-7.5,-5.5)

Vancouver East
Sales: +4.6% vs 2012; -25% vs 2011.
S/L Ratio: 64% vs 45% vs 79% (2011)
HPI $ YoY: -2.8% (-2.8,-2.6,-2.7,-0.5,+0.2)

Burnaby
Sales: -15% vs 2012; -48% vs 2011
S/L Ratio: 37% vs 37% vs 74% (2011)
HPI $ YoY: -4% (-4.7,-4.9,-3.1,-2.3,+0.4)

Coquitlam
Sales: -12% vs 2012; -30% vs 2011)
S/L Ratio: 51% vs 46% vs 70% (2011)
HPI $ YoY: -1.8% (-0.4,+0.8,+1.4,+2.4,+2.9)

North Van
Sales: -3% vs 2012; -20% vs 2011
S/L Ratio: 56% vs 49% vs 74% (2011)
HPI $ YoY: -3.3% (-2.6%,-2.4,-2.9,-2.5,-3.7,+0.3)

* Richmond and Van West SFH showed marked improvement in number of sales. Price gap vs 2012 narrowed slightly, but is still at -8%.

* Burnaby, Coquitlam, and North Van showed worse sales and ongoing/worsening YoY price decline.
Richmond and Vancouver West down 8% in price YoY using "HPI". The actually drop is probably more severe. But even assuming 8%, it means that some people who purchased homes in these areas could be underwater, having lost their entire 5% down payment. After fees to sell, the result would be even worse. And as mentioned, the highest sales are in the areas with the biggest price drops. This means that homeowners in these areas are realizing they need to lower prices in order to sell homes. Sales in places like Burnaby and Coquitlam are not increasing because prices are not decreasing.
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stusilver wrote: I am sure there are a ALOT of happy people in the west coast waiting to buy.
Who are they? Is that the rumour du jour? People with bags full of money sitting on the sidelines waiting to buy up all the homes after only a 15-20% drop? Not sure about that.

What people always fail to recognize when prices decrease is buyer psychology. If I had a home worth $1 million dollars in Vancouver today and I came up to you and said, "Hey, I'll sell you this for $800k right now", you would probably jump on it. It would be a great deal. You get a $1 million dollar home for $800,000.

But if we flash forward 3 years from now, and the house is only worth $800,000, and I come up to you and offer it to you for $800k, suddenly you won't be so anxious to buy it. You'll be scared of how much the market has fallen and probably overly cautious to buy anything. House prices will be dropping all over the place. It's the same reason why the stock market crashed in 2008, and why no one bought stocks even when the S&P 500 was severely underpriced - FEAR. So people can sit here and say that they would buy a house for a 20% discount, but it won't be a 20% discount when that time comes - it will just be market value.
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adamtheman wrote: Richmond and Vancouver West down 8% in price YoY using "HPI". The actually drop is probably more severe. But even assuming 8%, it means that some people who purchased homes in these areas could be underwater, having lost their entire 5% down payment. After fees to sell, the result would be even worse. And as mentioned, the highest sales are in the areas with the biggest price drops. This means that homeowners in these areas are realizing they need to lower prices in order to sell homes. Sales in places like Burnaby and Coquitlam are not increasing because prices are not decreasing.
that is exactly my point
so these are actually calculated based on HPI ???
WoW! Just WoW! that means that the situation is worse than the numbers show it!
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adamtheman wrote: Who are they? Is that the rumour du jour? People with bags full of money sitting on the sidelines waiting to buy up all the homes after only a 15-20% drop? Not sure about that.

What people always fail to recognize when prices decrease is buyer psychology. If I had a home worth $1 million dollars in Vancouver today and I came up to you and said, "Hey, I'll sell you this for $800k right now", you would probably jump on it. It would be a great deal. You get a $1 million dollar home for $800,000.

But if we flash forward 3 years from now, and the house is only worth $800,000, and I come up to you and offer it to you for $800k, suddenly you won't be so anxious to buy it. You'll be scared of how much the market has fallen and probably overly cautious to buy anything. House prices will be dropping all over the place. It's the same reason why the stock market crashed in 2008, and why no one bought stocks even when the S&P 500 was severely underpriced - FEAR. So people can sit here and say that they would buy a house for a 20% discount, but it won't be a 20% discount when that time comes - it will just be market value.
Yup. And as the decline accelerates, the liquidity will probably move to some other asset class. Housing just won't be exciting versus some other asset class (I personally figure the precious metal mining shares will morph into the next bubble).
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