Sunday, October 17, 2010

Ok folks what did you see this week-end?

I went round some of the open houses d/t and saw condos in grade A buildings , with views and nicely up-dated asking $550/foot or less.

That is lower than I have seen for most of this year.

I would be very surprised if we don't see a lower HPI for condos this month.

I also suspect we are due to get an up-tick in interest rates. I don't mean the B of C decision coming up on the 19th October - I doubt if even Mark Carney knows what he is going to do. Maybe he will just open the paper that morning and see what the head-lines say and decide on that. After all- we were double dipping a few weeks ago, now we are all systems go!

I am talking about 10 and 30 year rates which have been trending down with the US rates and look to me like they want to start a little rebound.


  1. Fish I saw some opens in a building on Hornby. There were some 1 beds selling for $600/foot and a 2 bed selling for nearer $500. the 2 bed had a better view and was a higher floor so less noisy. Some of the other visitors were also mumbling about the stupid over-pricing of the 1 beds, but of course no-one said anything to the realtors.

  2. Whistler for $330/foot

  3. Hoping interest rates go up at this point is like hoping an earthquake will cause property values to plummet. Will not happen.

    Carney won't raise at this meeting, or the next meeting, or any one for the forseeable future. The next interest rate move will be a cut.

    Bondholders are not stupid and know that every dollar of every loan must be repaid, and with Canadians saddled with the amount of debt they are it equals less demand going forward.

    I am bearish on BC real estate because it is a horrible investment at this point, but with unlimited financing to the how much a month crowd unemployment will cause this crash.

  4. Johnny- I thought the B of C would have stopped 0.25% ago actually. But then I thought they were 100% wrong to cut the rates so low in the first place. They added tinder to this fire and are now watching anxiously as the flames fly out of control wondering how much water they can tea-spoon on without putting the fire right out.

    I agree about the 'how-much-a-month' crowd. I am amazed how mnay people buy a house like they are leasing a car. I can 'afford the monthly payments' is what I hear.

    But at the end of 2/3/4 years you give the car back. the house has to be refinanced and the repairs are hefty and the taxes are probably going to go up a fair chunk to pay for transit and OV fiasco.

    And how many have 6 months savd up in case of unemployment or illnes?

    Never fear the CMHC is here (ie you an I)

  5. The Bank of Canada stops at 1%. The Canadian dollar takes a beating which makes future rises MORE likely, through inflationary forces.

  6. Oh please, Fish, the CAD$ getting hit hard will not effect what the BoC does one bit. The BoC is only concerned about the CAD$ rising too much above parity at this point. A $ above 90 cents=inflationary forces? Wow.... Anyway, the reason why the CAD$ is selling off so hard is because FX traders are pricing in no rate hikes in the foreseeable future as this unchanged decision was no surprise to the market.

  7. Actually Chad. The CAD is not down because of the rate non-hike.

    It started dropping about 6pm, when IBm released it's earnings.

    there is a risk trade on. It goes something like this:

    the conomy is improving, China will use more stuff, commodities go up and so does the CAD/AUD?Gold?oil.

    the reverse is what was put into motion today. All currencies fell hard against the USD , even the AUD and of course Gold. The 'risk' tarde was coming off, and the aversion to risk trade was coming on. Bonds up USd up stocks down

  8. man lots of typos there, but you get the idea

  9. True we can agree there that CAD$ has been incredibly correlated to the movement of the S&P500.

  10. Well fine readers- we are definately seeing higher list/sell ratios.

    October started with a bearish growl but is now snorting a bit.

    However price reductions are still high and some of the sales are deeply discounted from orginal asking. Two in West Van today 500k and 300K off the orginal asking. Which is 25% and 18% off the original prices.

    Enough stuff for both bulls and bears to make a case which probably means it is a stalemate market. Not many buyers or sellers willing to chase up or down.

    Suits me fine as I am in a long lease and would be angst-ridden if we had too big a correction too soon, which in any case would probably panic the Gov to DO SOMETHING- ANYTHING!