Have a Great one, lots of good food and good booze

End of month numbers for December will probably be pretty meaningless, since the listings and sales are so low -unless they are bearish in which case I will take my trumpet out :)

We will watch the list/sales in the new year and the price deductions.

I may start my regional scans again like I did late 2008, however that's only if it looks like we are starting the move down.

The one good thing we have in our favour, is that every Marc Carney and his dog is talking about the huge RE-driven debt load. That means the bozos probably WANT to see a RE correction and not try and derail it asap this time, like they did last time.

Was it not ever so that the worst catastrophes grow from the seeds of good intentions. We had a crisis in 2008/9 and the quickes,t easiest thing to do, was re-inflate RE. Hence they did it and now they regret it (though they wont admit it- just wag a finger at the borrowers).

The result is that Canadians, once a conservative bunch, have more debt now than the US. The architects of this calamity-in-making may have had good intentions, however they should also have the decency to admit a little mea culpa into the egg-nog.

See you all on the other side of 2011...

A quick post on the Canadian banks..

Firstly I am going to say something about them, I never thought I would- I am impressed. They are all barking at the Federal Government telling Flaherty to do something about the huge consumer debt and have suggested dropping mortgage durations or increasing down-payments.

Now it is a bit late. The horse of debt has already bolted, the bubble of housing is already super-inflated..but at least they have come to their senses. Can you imagine the hyenas on Wall Street ever asking for the gravy train to be stopped?? Of course not.

Anyway it is a start. The Federal Government has now heard from Carney (our own mini-bubble meister) and the Bank bosses to make them reign in lending. They cannot ignore it for much longer.

BTW- anyone notice that the Royal Bank has lost it's pristine rating. Why? Because of the Royal banks involvement in World-wide capital markets AKA gambling. What is it with bankers. A bunch of boring conservative folks who make great money from mortgage clipping and bank fees suddenly want to go to Vegas and blow the whole stack on the craps table.

They all do it.

They all hire these whiz kid traders, who are really just professional gamblers, playing with our money and when they lose, they lose big.

Like the Bank of Montreal did on gas!

When they take these huge losses I wonder if they ever go back to the heads of trading operations ($5 Million + a year) and say- " We want the bonuses back for the last ten years'. Of course not.

Anyway my purpose was not to knock our banks, but to offer them a little praise..NOW perhaps they will stop making those STUPID ads with a middle-aged couple taking equity out of their homes to travel around the world or buy a sail-boat. Maybe they can keep that equity so they (we) don't become even a bigger burden on the next (totally screwed) generation.

I am worried..

Lets put housing aside for a minute and lets look around us.

Everyone from the B of C to Bank economists have been sounding the alarm over the huge level of household debt. This debt is mostly related to inflated RE, either directly to purchase it, or to extract equity out of it for other expenditures.

Things could go sour very quickly.. and when they do it is VERY difficult to get out of the debt-death spiral. The US is dealing with a catastrophic situation, and if it gets any worse I worry about their civil society.

Alarmist talk?

How about 15 Million unemployed, and another 11 under-employed (ie moved from full-time to part-time).

How about 43 Million on food stamps - in the wealthiest economy in the world!

Hopefully we have seen some sort of bottom, but that bottom is a long way down from where we are.

Are we so insulated from our largest trading partner's fate? We were, we had solid banking practices, higher savings rate and lower debt. But the last few years were like Canada-gone-wild. We did exactly what the US did.

The best way to prevent a calamitous RE bubble bursting is to prevent it from happening in the first place! Forget Vancouver, even places like Saskatoon and Calgary had huge price rises even though there is huge swaths of flat land around them. Kinda reminds me of Vegas.

in case we think we are immune, here's what Stephen Jarislowsky said in a Globe and Mail interview, and he is a very wise head in the investing world:

Canada’s banks got high marks from the International Monetary Fund for escaping much of the carnage that ravaged U.S. and European financial institutions in the wake of the global financial crisis. Have they done enough to leverage that position?

Yes and no, but here’s the thing: In Canada the hardship still lies ahead. Our houses are still 20 to 30 per cent above normal levels, salaries are shrinking and a lot of Canadians are heavily indebted. There’s a lurking disaster, to the extent that you have reduction of purchasing power and we are just not saving hardly anything as a nation.

That’s pretty bearish.

I think things are going to get a hell of a lot worse. We still have a trade deficit today despite the fact that commodity prices are incredibly high.

I hope I’m wrong but I think Canada is on the edge of a lot of trouble.

....................

BTW- hat tip to this site which I am adding to my blog list.

When the BOC talks we should listen

I have never read such an anxious piece from them as their latest review. Even in the midst of the crisis they were not sounding such dire alarm bells.

Here's a few clips:

'The Bank judges that the risk of this environment jeopardizing financial stability in Canada in the near term is moderate; however, careful monitoring of risk-taking is essential so that any buildup of financial imbalances can be identified early '

'In Canada, with the growth rate of debt outpacing that of disposable income in recent years, the proportion of households with stretched financial positions that leave them vulnerable to an adverse shock has grown significantly. The risk is that a shock to economic conditions could be transmitted to the broader financial system through a deterioration in the credit quality of loans to households, which would prompt a tightening of credit conditions that could trigger a mutually reinforcing deterioration of real activity and financial stability. '

'The Bank judges that, overall, the risk of a system-wide disturbance arising from financial stress in the household sector is elevated and has edged higher since June. This vulnerability is unlikely to decline quickly, given projections of subdued growth in income '

'However, the vulnerability of the household sector has deepened, with the rate of growth of household debt continuing to exceed that of income.'

'The main domestic source of risk arises from the increasingly stretched financial position of Canadian households, which leaves them more vulnerable to adverse events '

'In Canada, the deteriorating financial position of the household sector requires vigilance. When taking on debt, households bear ultimate responsibility for ensuring that they will be able to service it in the future. It is also essential that financial institutions actively evaluate the risk sur- rounding households’ ability to service their debt over time. Authorities are co-operating closely and will continue to monitor the financial situation of the household sector.'

My comments:

So the are saying the same thing in several different ways, in a very short document. Consumers and households you are over-debted..damn over-debted. Your debt growth has no relation to your income growth (or lack of) and your ability to pay it!

Wouldn't have anything to do with your ZERO interest rate policy would it now??

Where is this huge debt coming from?= OVER-PRICED HOUSING.

Most of it is housing-related debt and equity withdrawal (you know all those radio ads for people wanting to lend you money on the last cent of equity you have in your house)

So what are they going to do about it??

Nada. Nothing. Zilch. We will just wring our hands and hope consumers do the right thing even though no-one but economists read our reports and actions are louder than words, but we ain't going to do a thing. Just worry about.

IDIOTS!

The bears are out in the OK

Central OK

Median SF Home prices are down 10.5% from this time last year

The days to sell is up to 330 days from 64 days last year

Median apartment prices are down 11.0%

21.5 MOI

North OK and Shuswap show such a big swings in the median that I suspect it is from the small sample size (40% drop in one case) so they should be ignored.

22 MOI for the North OK

27 MOI for Shuswap

...................................

Fraser Valley

8.3 MOI

from the FVREB report

SFH benchmark price November $504,848 down 0.2% MOM. Up 1.4% YOY.

Benchmark townhouses in November was $319,623, up 0.2% MOM. Up 1.2% YOY

Benchmark apartment $235,842 Up 0.7% MOM. Up 2.7% YOY

Basically flat prices YOY

+ see my previous post re YTD HPI for Vancouver. Have a great week-end everyone.

HPI YTD for perspective

Starting Jan 2010

SFH

$766,499

$800,796

$800,341

$818,403 April 2010- the month bears were lining up to jump off Lion's Gate bridge

$810,175

$795,025

$793,193

$795,076

$790,992 September 2010- the month bears prematurely celebrated the start of the correction

$796,883

$799,312

Apartments

$385,487

$390,899

$399,507

$397,779

$398,783

$391,528

$387,879

$385,968

$388,373

$390,074

$389,168

HPI flat

I could sense that apartments were weaker in price. They are basically flat YOY- however to be honest I thought we would have a significant drop in apartment prices.

Over-all

October 2010 $579,349

November 2010 $580,080

Up 4.1% YOY

SFH

October 2010 $796,883

November 2010 $799,312

Up 5.6% YOY

Apartments

October 2010 $390,074

November 2010 $389,168

Up 1.9% YOY

Attached

October 2010 $487,530

November 2010 $488,733

Up 4.1% YOY

Maybe the Bank of Canada can reduce rates to -1%, so that we can squeeze a little more juice of the property markets. I say lets bring back 50 year mortgages, and mandate cash-back mortgages..sheesh.

Yippee Average SFH prices are down 1.5%!!

Wait a minute didn't I say that average prices don't matter. Ah shucks..party delayed

Guess we will just have to wait for the HPI.

Average price graph

Lots of listings tonight.

BTW seeing some 20% price reductions in the stupidly priced houses ($2-3+ range)

What makes something as slow moving as RE worth $3.7+ Million one day and $3.1 the next?? It just shows that there is no clear metric to value these properties. They are of course well past rental return, replacement cost and all other normal parameters of valuation. They are into ..wishful valuation.

Victoria looks like it's party is coming to an end, with a probable drop in median home prices year on year, of as much as 5%.

A quick review...

Sorry about the sparsity of posts, but I have been very busy with work and there hasn't been much to say about the RE market.

In fact I have been making good money at work, enough in the last month for the down-payment on the median house! The only problem is the house is here.

Oh well. Rather be here than there.

So the time has come for some introspection. Have us bears been dead wrong? Well for a number of years we were - truth be told. Then we were VERY right late 2008 and early 2009, as the financial system in the US and Europe collapsed due to the RE bubble bursting.

However our drop was very short-lived. This was due to 'emergency' 0% rates and actions by our Federal Government to put in place the same things that collapsed the US:

1) Very long mortgages

2) Very lax lending

3) Pumping up the CMHC (read Freddie and Fannie)

4) Keeping rates too low for too long

Our local economy was also saved from the catastrophe going on the US, by a resurgent China which brought buyers for all things Canadian (thank goodness) from Lumber to Oil to Uranium to...well RE.

We have, as discussed on Larry's blog, many wealthy people in this city and a lot of them make their money right here. People for who $2.5 Million for a home makes perfect sense.

So we bounced back and our bounce has now faltered. Sales are way down, but then so are listings so that we are in a bit of a stalemate and sellers who can't get their price are pulling their stuff off the market and some buyers are giving up and offering good bids.

There has certainly been an up-swing in the market recently, though I would have to say that this up-swing is mostly in the sought after areas. The further you get from down-town Vancouver the more of a buyer's market it is. Take a look at the price reductions in the OK for an example.

In some areas things are sizzling and some speculators took advantage of the slow down in Summer to buy and are now trying to flip it immediately. One for a $200K profit in one month!

Of course we have no laws to restrict flipping or to penalize it.

So a speculator can buy, leave empty and then wait for a desperate buyer to come along or just leave it empty. After selling they will pay tax at capital gains levels - assuming they declare it and do in fact submit a tax return. This will be after deducting agents fees, any 'costs' , and interest and management fees etc. In comparison joe-blow working in a factory making something will be paying a higher rate of tax with very little deductions.

In Canada RE speculation which causes public harm is not a big deal. Our politicians couldn't care less. In fact they don't care about speculation at all! Eg....

1) Look at gas prices. How come all gas companies sell within a few cents of each other. Their oil comes from 100 different sources- some have cheap locked in contracts with producers- others are buying on the spot market. Yet they all sell at the same price..huh!

How is that possible? Wheat prices go up and down, yet bakers will sell similar bread for different prices, why don't oil companies. Why are they allowed to set such close prices.

2) Media. The government has allowed a few monsters like Global to gobble up all newspapers and lots of TV stations and that's OK. Would it be ok if Jim Pattison owned 80% of the supermarkets in town or Shopper's owned 80% of the pharmacies...of course not.

Canada is the speculators best friend and no where is this best demonstrated than the laissez faire attitude we have to RE speculation.

..........

Back to the market. Is this a little breather before we head up again or are we about to change course. This one is hard to call.

The Bank of Canada stopped with the rate hikes at the first whiff of 'double dip' in the US and Carney went back into his bunker- though still whining about Canadian debt levels (but doing zero about it except whining) and the US Fed is back to buying it's own debt..huh!? Yup that's right buying it's debt, and the Chinese are caught between worrying about over-heating and worrying over the youth who may not be happy if their material aspirations are not met.

All these will play out into RE.

In 2007 I know we would get a big correction.

It came late 2008/early 2009.

In Spring 2009 I mentioned that with 15% drops and with 30% lower carrying costs we may have had the 40% drop I was anticipating and some people would probably start buying.

They did and the market went ramping up again.

We have now accounted completely for the drop in interest rates, so that RE is just as unaffordable as 2007.

Frankly speaking I have no idea what will happen next. Maybe we get a commodity superboom which drives prices. Maybe natural gas prices shoot up and eradicate our Provincial deficit, or maybe we just stagnate here until the rest of the world recovers and off we go again.

Or maybe we change course....

Be careful what you wish for...

We are a Trillion in mortgage debt. We are at the lowest, ever, on record interest rates (except for five months ago) and everyone including the banks and THE bank (BoC) are telling us we are in dangerous waters which such nationally elevated house prices.

'So lets get started already' I hear the bears say. But I say again...it may not be pretty. The US is in the 51st month of it's housing slump.

Parity and then some...

Well folks we are now worth more than a US peso.

Despite our hand-wringing and angst over our $ 1 Trillion mortgage debt and super-pumped housing, despite our own Central Banker telling us we are in for hard time, the world doesn't care.

We are oil and wheat and uranium and that's what the Chinese want - along with Westside houses :)

And so our Loonie gets bid up, and rates cannot rise anymore or it will blast up even more, and destroy what's left of our manufacturing out East. Well, as long as Alberta is happy - that's all that matters.

Meanwhile the US fed, which makes Carney look positively responsible, has decided to let the government issue bonds and then buy them up- otherwise known as a ponzi scheme- which is why gold is soaring. Greenspan and Bernanke have together managed to distort financial markets and the economy for 30 years.

How do these relate to housing- this is the 'and then some'. Everything relates to housing, from the price of commodities to a boom in a country of one billion souls the other side of the world.

Ok numbers

Briefly in MOI, days to sell and List/sales since those are the only useful stats I can pull out of the package the Real Estate board puts out:

Central OK:

MOI 17.25

List/Sales 36%

Days to sell 110

North OK:

MOI 22.4

List/Sales 30%

Days to sell 122

Shuswap:

MOI 36+

List/Sales 30%

days to sell 198

What's up in the Shuswap region?

HPI

Over-all

October 2010 $579,349

September 2010 $577,174

SFH

October 2010 $796,883

September 2010 $790,992

Apartment:

October 2010 $390,074

September 2010 $388,373

Attached

October 2010 $487,530

September 2010 $490,385

Quick comments. Not much solace here for the bears. The rate of increase YOY has declined from over 6% to 4.6%. Attached down a tad, apartments up a tad (I had expected down, but there was a late October buying spurt despite a famous agent's whining) and SFH up nearly $6k.

Over-all HPI up 0.5%.

Sales down 39%.

I have to concede we are in a flat and balanced market. The good news is buyers should not feel stress to jump in and over-bid with sales down so much and lower interest rates here for a while (despite Carney's yacking- he cant raise rates much more) though I do expect long rates to drift up. If you have to buy, I would look at product that has been on the market for a while, where there has already been a price reduction and where the seller's have a good reason/need to sell.

The good news is there are robust lists tonight and much fewer sales. Lets hope the month continues like that.

We finally got....

....there

We have reached the twilight zone for housing in our fair city with the average SFH hitting and surpassing a cool Million.

Even Sydney Australia comes no-where near us- they are in at over $600K.

Well what do we make of this? Nothing. Median and average depends on what is being sold. If a jeweller is only selling high end diamonds then his average sales are up, even if his total sales are down.

That's where we are at in Vancouver. Lower sales, but still lots of heavy hitters coming to the bid. However even the rich are bargaining. Two homes sold in West Van tonight. Both sold for $800-900K off original asking which is a 25% drop from list price.

Anyway lets wait for the HPI. My guess is stable SFH and lower Condo.

Stubborn prices in Vancouver, which is a good thing. Once again I do NOT want a crash. Remember what happened with the last crash in 2008:

1) People started losing their jobs quickly

2) Flaherty and Carney pissed their pants and threw everything at housing. Even though they are talking tough now- do not for one minute fool yourselves. If housing took a big dive, the screams to ..'Do something! Anything!' would be deafening.

Just look at how Bob Rennie complained that the HST hurting sales. He certainly didn't pull any punches talking about the Premier:

“He’s the sh*ttiest salesman in the country,” Rennie said bluntly to a roomful of Kelowna developers convened to get tips on how to reposition their projects in a topsy-turvy economy.

“He’s done a horrible job of selling the public on the HST. We’re in sh*t and he’s hurting the economy.”

Multiply that reaction by 1000!

So I am happy we don't have a redux of Summer 2008. However I would like to see some signs that our City's (and Canada's) bubbly house prices are coming off the steam so people can buy with-out risking Their financial future and Our financial future too (thanks to the CMHC and back-stops for the banks)

All eyes on the HPI..

OK folks we know that sales are down big time compared with last year. We know that listings are also down and so list/sales are robust.

MOI is still around 6 months +/- though and higher in some areas (see Larry's site).

The average pice and median in these circumstances mean very little. If wealthier buyers are still in the market or the homes sold are the cream of the crop, then both these numbers will be up.

What we will have to look for is the HPI to see which way we are trending.

Whistler Sales up. 9 sales in the week to Oct 17th

But with some hefty price reductions. One sales was 20% off the list price and was the lowest sale for the complex going back to 2003!

I follow THIS site for Whistler info.

I have never met or spoken to Dave, but he seems like an up-front guy on his blog. Here is a snippet of his last post:

'Next was also renovated 2bed/2bath townhouse in Glacier’s Reach. 16- 4388 Northlands Boulevard sold for $405,000. It was viewed as an real bargain by many Whistler Realtors. It had been listed as high as $669,000 at one time.'

That's a slice of nearly 40% off list price!

Note to OK, Victoria and Vancouver listing agents - if you want to get sales going again- cut the prices. BTW if you are looking to buy in Whistler- get the red pencil out and don't be shy about haggling!

Be careful what you wish for in case it comes true....

So goes the saying, and it may be very true about our RE.

There was a real eye-opening article in the Globe and Mail (hat tip to Paul B who posted the link at Vancouver Condo)

It illustrates just how dependant we have become on the RE circus in Canada, thanks to the relentless pumping of the last decade..

That has dramatic implications for employment and consumer spending levels – and for an economy that has grown accustomed to relying on housing-related spending for about 20 per cent of its gross domestic product.

20% is no joke. According to the article we are already contracting with sales down 45% from last year and prices at last year's levels and housing starts are down 20% too. So what would a contraction mean? Well it would mean major job losses, especially amongst construction workers, and Real estate agents and renovators. the problem is these fields do not have skills which are easily transferable to other areas.

Luckily Canada is not a one trick pony. We have wheat and oil and gas and gold and commodities galore. Hopefully the housing contraction will not happen at the same time as a commodity slow down or we could get into trouble pretty fast.

Lucifer's children

What is it with these banks? One by one their economics departments are coming out with reports on how over-leveraged Canadians are and how much trouble they could be in with either a small rise in interest rates or a drop in the economy. They put the blame squarely on the shoulders of the over-priced housing market, with Vancouver coming in for special mention again and again.

And yet..these same banks are coming up with ever more creative ways to squeeze Canadians into debt. Remember 'You are richer than you think', remember the Bank of Montreal ads where the guy uses home equity for holidays.. how about TD!! and the cash-back mortgage! That is exactly what they were doing in the US before the bust.

Don't the idiots in the marketing department talk to the economics department? Maybe they don't - maybe they have different mandates. How about the old guys pulling down the multimillion dollar salaries at the top. Shouldn't they be looking at the reports and call their mortgage departments and say..."hey Frank go easy on the home equity-porn ads'.

Maybe they don't spend enough time off the golf courses and off the boards of directors of other companies to actually run their businesses properly.

Or maybe they think the tax-payer will just pick up the losses via the CMHC.

Grrrrrr....

Very big list/sales today

I guess Larry was right when he said he saw some more buyers coming in.

So what do we make of this all?

Maybe the bulls are right. Maybe the combination of low rates for ever, Mainland Chinese investors, limited land, Retirees from out East, Booming penny stocks (I know some local mining guys who have made several $Mill this year), lots of highly-paid professionals will keep a bid under our property for ever.

Hey it is possible. I had always expected a 30-40% correction and in Spring 2009, I said that we may have just got that with the combination of lower rates shaving 20-25% off mortgage payments and prices dropping 15%.

Was that it?

Now we just go onward and up-ward.

What about Fraser Valley and the OK and Victoria and Whistler? Do they play catch up or does the buying move back out to them instead of the slump moving toward the centre?

I wish I could answer that question. I frankly expected buyers to go on strike here as they have elsewhere in the Province, but that wasn't the case. I expected prices to start a quick downhill slide, and that has not happened- though our local celebrity Realtor, Bob Rennie is already complaining that the HST and Campbell are ruining the housing market!

Ruining! We haven't even had a proper correction yet!!

Must RE only ever go up?! Are we so precariously balanced that even when it stops going up, we have to gnash our teeth and wring our hands? Apparently yes!! Today it was the TD's turn to weigh in with warnings. 10% of us are on the verge of catastrophe and it is all because of mortgage debt and the blame is 100% at the feet of the B of Canada and Government. They are the pushers who enabled this to happen.

What about the poor folk who are waiting to buy? Are they lesser Canadians? The politicians keep talking about helping young and poor Canadians buy a home. The BEST way to help them is let prices drop to affordable levels. Stop meddling! Stop dropping rates and insuring mortgages for a start.

OK so is this a capitulation post. No it isn't. But once again I am baffled by the market and once again I am willing to quit or at the least go on a hiatus from blogging IF (Chad get you pencil ready):

October shows up with:

Lower sales
Higher MOI

..and higher HPI.

because they do not add up and there is no point blogging about Alice in Vanderland.

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.

Chad..Chad..Chad...

Was going to put up a tax post- but gotta answer Chad's points-Chad's comments and mine below in green. I will put up the tax post in the next few days.

ChadMPNP said...
Fish,

The last post is full of a ton of incorrect hyperbole's.

We are at 10% unemployment in the US. That isn't hyperbole it is real especially in a country with limited social safety nets and the number one cause of bankruptcy is medical bills. Losing your job (and hence your medical coverage) is a disaster.

I can list many individuals and firms that predicted and profited from the US crash.

Please list them. Not hedge funds please. We know some of those scum-bags made money, most of it by forcing the tax-payer to pay AIG's bad debts.

I know many people that bought into the correction of 2008 in Vancouver and have sold for a handsome profit during the snapback to new highs in 2010.

They did in indeed. No argument there.

I have an issue with Canadian bears always saying the Govt and BoC came in and artificially pumped up the markets to new highs.

Some simple internet searching would have made you think twice about that statement. The CMHC borrowing ability was tripled between 2007 and the end of 2009. Some of that may come to bite us in the future. In total the CMHC has over $500 Billion in liabilities. The CHMC has insured 90% of all insured (and therefore high risk) mortgages. So the tax-payer is holding the crappiest paper of all, and lost of it.

Then the Bank of Canada cuts rates so that mortgage payments drop by 25% or more.

You dont think these actions saved the market from a well-deserved correction??

The market goes where it's going to go, stimulus is very short term in nature, you can't whine about a market that has gone up for 2 years and blame the govt because even more stimulus was given in the US and their markets are still making new lows. Why when they've done pretty much everything Canada has done and then some in the US is their housing market still at lows?

The reason for this is obvious. The US RE industry is BK. We were just over-priced. The US hits the fan and our dumb politicians - who, BTW hated the Socialist CMHC and Wheat Board and EDC and WEDC when they were in opposition- do the simplest most brain-dead thing they can to stimulate the economy. They lower rates and let people who-really-cannot-afford-to-buy into the market, insured by you and I.

Result: we go where the US WAS before their debacle.

They should have sat back and thought about the right move, but instead like deer in head-lights they jumped on trusty old RE to pull them out of the hole. Yup it did that all right. Instead Canadians put themselves into the hole with debt, but the pols could say they staved off a recession and BTW they get to boast that our banks are so solid..

duh..yes

The banks are lending it out at 4% and paying savers ZERO. That's a good scam. Meanwhile the riskiest stuff is being insured by us..so they just get to clip coupons. Take away the risk. Have a steady Eddy 4% spread - which is historically very high- NICE!

But even they are getting worried about this madness and every week another bank is coming out with reports warning that RE is grossly over-priced especially in this fine town.

I should throw some numbers up.

But there isn't much to report. About 50% list sales through-out.

North Shore

21 New
1 Back
20 changes
11 sales

Some Fraser Valley 14 day Numbers- which are showing some weakness.

Mission

63
8
56
23

Langley

185
15
140
62

Abbotsford

132
14
130
72

North Delta, Surrey, North Surrey, Whiterock and Coverdale

595
39
451
289

BTW- I always have considered more price reductions than sales a sign of weakness coming into the market. It may lead to more weakness, or the new, lower prices may bring in buyers and stabilise the price. In 2008 it led up to the flash crash in RE. Lets see what it brings this time.

I should throw some numbers up.

Numbers and some advice..

North Shore

29 New

2 Back

21 Changed

14 Sales

Van West

52 New

3 Back

31 Changed

20 Sold

Surrey

13 new

1 Back

16 Changed

12 sales

Maple Ridge

11 New

15 Changed

6 Sold

Ok folks, I guess a lot of you are renting. Who is managing the rental? I have come across the four entities..

1) The owner

2) The owner's uncle Al

3) A Real estate Agent managing a few properties on the side.

4) A property management company or Real Estate Agent who does full-time rentals.

My advice, from having come across all four- Try and get hooked up with a property that is managed by the last one.

The owner, uncle Al and some real estate agents who dabble in renting- often do not seems to even know a Residential Tenancy Act exists! Uncle Al drank my deposit as soon as he got it, considering it as extra commission, and it was like pulling teeth to get it back, and of course he had no idea that he was supposed to return it WITH interest.

I found owners to be penny-pinching as they are often very tight on covering the expenses with rent and even the smallest repair is a fiscal disaster. The on-the-side Real estate agent are too busy, often don't return calls on time, don't have good contacts and have not been a good experience.

While the property management company and full-time renting agents are working for the landlord and not you (never forget that) they have a reputation to protect, they know the laws (generally) and they have contacts to get repairs done quickly. If you can chose between any of the above four, pick the last one.

Some end of the week numbers

Last 7 days..only going to look at list and sales...

North Shore:

139 New
12 back from the dead
62 sold

Whistler:

22 New
11 back
8 sales

Burnaby:

131 New
9 returning
69 in new hands

Squamish:

13 New
3 Old friends
6 in debtor's hands

Van West:

314 Virgins
20 Old hands
146 Bought for an arm and a leg

Coquitlam:

93 Freshly ground
8 stale but trying again
32 off to the chapel

Sunshine Coast:

28 pulled on
14 pulled back on
9 gone for now

Langley:

103 fresh as fallen snow
12 trampled a bit
38 shovlled up

Have a great week-end. May put a post up on Sunday, if not - enjoy the turkey or tofurkey or sweet and sour turkey or curried turkey or shish turkey or whatever tickles your fancy.

OK Vicky

OK first (sales/total listing/ MOI)

Central

221/ 5059 = 23

Northern

134/ 1663 = 19

Shuswap

143/ 1663= 29

All areas

413/ 9305 = 23
............................

Victoria

395/4300 = 11

From the Victoria RE Board

'A total of 395 homes and other properties sold in September through the Victoria Real Estate Board’s Multiple Listing Service® (MLS®), down from the 425 sales in August. There were 776 sales in September of last year. '


Like we saw in Vancouver the average SFH price bounced a little , even as sales were down- half last years.

ie more expensive properties are selling. Though they are still down 10% from the peak and condos look like they are sliding down a very slippery slope.


All well into bear territory. Lets just go over that again. At CURRENT sales it will take two years to sell all the properties listed in the OK. That would mean the over-priced or crappy stuff never gets sold.

Detached HPI is Down!- Just added Fraser Valley numbers

What did uncle Fish tell you? I told you in several posts and comments that I expected HPI to be down, as the buying has moved to higher priced properties.

Well the REBGV numbers are out:

HPI - August $795,076 Detached

HPI- September $790,992 Detached

Attached is flat and apartments are up a tad, but detached is down nicely.

I would say prices are flat at best and that many areas have MOI which are in the double digits and are waiting for more seller anxiety to bring on price reductions.

MOI= 7

Lets see what Fraser Valley, OK and Victoria bring.

...................................................................................

Fraser Valley Numbers Benchmark prices

Detached- down 0.5% fom August 2010. 3.3% higher than Septmeber 2009

Attached- down 0.8% from August 2010. 3.2% higher than September 2009.

Apartment- unchanged from August 2010. Down 0.3% from September 2009.

MOI = 9.5

Victoria is really not Amused

September 2010 .....

Victoria hits 20 year low sales.

Less than half the sales of September 2009.

Same New listings as September 2009.

20% higher total listings than September 2009.

Watch This

Does this sound like a strong market?

MOI 11

This is all happening with extreme low interest rates, and with a fairly robust economy. SO what's up? Basically things are just too expensive.

The wealthy can and do still buy. They aren't adding up the mortgage and the taxes and wondering whether they are paying 60 or 75% of their income to buy- which is why the average and median prices are moving up, even as sales collapse.

That doesn't mean that sales cannot come back, some RE agents expect them to, but if they don't and sales keep heading down - prices will follow.

.......................

This mortgage broker's blog is the one mentioned in the news report and worth reading. The 21st September entry is the one to read:

http://www.victoria-mortgages.com/blog

While we wait for September's numbers to come in From around the Province

We can cogitate a bit on what is happening with the City and Millennium. The story posted on other blogs is here.

Here is my thoughts, for the very little it is worth:

1) Millennium bit off too much. Not only the enormous Olympic Village, but developments on Vancouver Island, a tower downtown and a large development in West Van (Evelyn - designed by Arthur Erickson). All this was being done simultaneously. These guys were coming off some nice developments, Water's Edge in West Van and L'Hermitage Downtown so I guess they just carried away with their own hubris and ego and over-stretched.

2) Who is responsible? No one apparrently. It was just the financial crisis of 2008 , which by the way seems to have passed and we are at new highs in RE prices and yet this project is still a bust.

The Mayor and Councillors came out fighting today. They must percieve that there is going to be a big red hole and the quicker they are seen to be fighting hard to get back tax-payer's money the better for their political future. Until now everyone had been talking in very diplomatic and conciliatory tones, but the gloves are suddenly off.

So who is responsible? Well a developer in these agreements is responsible only to make the best deal for themselves. It is the responsibility of the City staff, councillors and advisors to make sure the sharks don't eat us...good luck with that!

The truth is the City of Vancouver was on the hook for this project as far back as 2002 when it was signed. Do you remember all the fanfare at the time about how this was a partnership with a private company and wouldn't cost the tax-payer anything except the land and they would be making money on that too! Wow. Amazing. Most other cities were driven to near bankruptcy by building Olympic Venues. But some of ours would be built for free, even a hefty a profit. Nice...lets have two.

Most of the senior staff who were there when the contract was signed are now out. Most of the Councillors are gone. Even those who apparently voted against it, did not speak up about the problems with the deal until it hit the fan (see the article).

BTW- why were so many of the meetings held in camera regarding this deal. I think it gives local politicians a sense of importance to have these oh-so-secret-the-national-security-is-at-risk meetings. In my experience the decisions that come out of these meetings are invariably BAD!

What is still a mystery to me, is what legal and financial advice the CoV got. Hopefully they did get some and did not just depend on staff and their own hunch on the matter.

If they did, What is the liability of these advisors Anyone have the energy to contact the city and get this information, or have we have all sank into whining apathy.

3) Ok so what now? Struggling developer with many diverse assets + dropping sales + unsold OV + complex agreement + $500 M or more on the line = Bonanza for lawyers.

What if the City takes a really big bath on this? Cut services, borrow money, raise taxes? What will they do.

My vote is to make Jacques Rogge and his merry band of Olympic glad-handers take them off the books. In fact Gregor Robertson should fly to Switzerland (now that he is back from China) and ask Jacques to buy an apartment each for all his Olympic committee members for all their hard work. They don't have to actually take possession, they can just rent them out like most of the other specuvestors in this town, and Voila the problem is fixed.

It should just be chump change for the Olympic Committee.

Next post- how should we tax homes.