Monday, January 9, 2012

Where to now?

You guys tell me what you think. I will throw my ten cents in when there are at least 5 other guestimates


  1. Another leg up to 1.6 million by 2014. Go Vancouver!!!!

  2. I'll take a guess at a sharp drop over the 1-2 yrs takes us to 2009 prices, followed by a very, very slow adjustment in inflation-adjusted dollars.

    I found a post of mine from 2.5 years ago:

    I consider myself more bearish now than when I wrote that post.


  4. For the actual Vancouver market, westside/eastside my guess is... it doesn't matter what happens here. It's what happens in China that counts. Unless we get capitulation and panic selling in all those ghost towns in China leading to an actual shift in investor psychology there, then it's still risk on for the Chinese to buy and hold in our market. The dream of getting the kids outta China and into schools in Vancouver will still be a driver, as well.

    In other words, real estate might be local, but non-locals can put a floor under prices here and prevent any real reversion to mean, like a 25% drop or greater. Barring that, it'll take normalization of interest rates and that will probably mean that it's game on in the emerging economies, thus the rebooting of the specuvestor engine from Asia.

    I think the Vancouver market (East/West) is in a conundrum from which it will not emerge until there is another major shock like 2008 and I don't hope for that.

  5. Same old, same old. We have warned you all and our job is done; it is up to you all to sink the boat, we are not steering the ship.

    Tue Jan 10, 2012 4:25pm ES
    Canada bank CEOs warn on housing, not Europe

    Top executives at Canadian banks say they don't expect Europe's troubles to spill over into the North American market in a meaningful way, but caution they are concerned about a downturn in the domestic housing market.

  6. Ok folks here's my guess.

    The SFH average looks like a singularity chart. You see it in nature and in other financial instruments from time to time. A parabolic up, detached from it's underlying fundamentals in the world of finance.

    IF we had the top, and IF the correction has started, the drop is usually fast and by-passes or over-shoots the first minor support and then rebounds strongly up, then continues with another rapid decline, and then meanders down, or zig-zags around depending on what it is.

    So if we are following the typical singularity pattern, we should fairly soon drop past $1 Million for SFH and then just when it looks like it is destined for an all-out collapse, it rebounds up. Maybe the Powers that be panic again and rig the game or...

    After the rebound, we get another drop and then...well we will see if and when we get there.

    Much like Panda's scenario is fact.

    For attached and condos, the prices are already down to a few years ago and in fact I hear that assessments are coming in quite a bit lower on some condos, the initial drop may not be quite as severe.

    Egghead is right we do have outside support for prices, however I would not rule out a mini-2008 which would scare everyone. This time we would be starting from even higher valuations and have already got weakness in the market before the 'event'.

    I also do not want it. I would prefer normalized interest rates which would deter all types of speculation but that would require real fortitude from the Central Bankers, which is something they lack, not to mention the fact that many governments including ours could not repay the higher interest rates on the debt.

  7. Good comments.

    We are 13% off peak prices for sfh for vancouver. some of this is sales mix/noise. That said, I say 20% off peak prices by summer, therefore what i am calling for is blood in the streets in less than 200 days, I think things can unravel here quickly as they have in Shanghai, and it will have knock on impacts that are difficult to imagine.

    sheet is hitting the fan now.

  8. FISH:

    Forget about a mini2008. We don't need it.

    The incremental shift of the marginal buyer to a marginal seller is all we need for the blood to run.

    Grab your nutsack, it's coming our way.

  9. Correct me if I'm wrong but from what I've read Shanghai prices haven't really come down much and now the government is starting to ease again albeit with a target of the stock market more than the housing market. They do want to lower prices while they build millions of units of social housing. So far, the dramatic drops are only in the new build/unsold sector of apartments with prices being slashed by developers but not nec. affecting the whole market yet.

    Have you seen pictures of Shanghai? One look and you can see why the drive to get out of China will be relentless. It may come in waves but if our government doesn't curb their enthusiasm, nothing else will.

    We were in San Francisco over the holidays. Nothing there compares to the Chinese communities and culture established here. Everywhere we went Asian Americans were excited and asking questions when we said where we were from whereas the average Anglo American was only politely interested. Every Asian we meet in the US has family up here or really hears great things about Vancouver and has it on the top of their list.

  10. Fish,

    Do you really think real estate follows the same patterns as stocks do?

    Personally, I think we have to get by gung hey fat choy (when the tourists and the real estate tourist hit YVR every year) and then the usual spring market when the local buyers belly up at the bank before I'd call anything. Every year we go through the same agony by becoming ecstatic as listings come back on after the holidays. Then Cam Good does his creepy, over-the-top thing in the media, the banks do theirs and buyers come back.

  11. You could be right, Egg head.

    Still that would not be out of line with the thesis.

    A drop in Jan followed by the Chinese New Year buying spree which will show up in Feb's numbers that is the stabilizer and then our 'event' in March./April which seals the deal...

    Lets see how it plays out.

  12. I'm very much with egghead on this one.
    On another note, VMD @VCI has been posting unscathed @westca (property sub-forum) as Greaterfool with negative numbers. This is highly uncharacteristic given that the place is swarmed with hundreds of realturds/specuvestors and moderated by real estate shills. Not forgetting that fouled mouth helicopter biatch who verbally abused posters in expletive lucid details.

  13. Granville Corridor

    .... not long after the City warned specuvestors not to overpay for Cambie Corridor.

    Missing Asian men with hot money

  14. "it doesn't matter what happens here. It's what happens in China that counts."

    Believing this argument is a form of capitulation. You may not be buying, you may not be moving away, you may not be resigning yourself to a lifetime of renting, but you now see it as "different this time." Bears giving creedence to the somewhat racist "foreign buyer" myth is a sign the top here. So, although the myth irritates me, I see the silver lining.

  15. To be more specific, I first noticed bears believing the "foreign buyer" myth a few months ago, probably last Spring. That was the peak of the market.