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.
A Hindenburg Omen in an oversold market
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*Mid-week market update*: What happens when an ominously sounding
Hindenburg Omen occurs when the market is oversold? David Keller described
the three comp...
2 days ago
Surely the market for detached housing will become more interesting now that higher MOI’s are appearing in less desirable locations and may increase month by month. I can understand how potential buyers have become distressed with the present situation but do not expect a major fall in prices until 1- 2 years after a sustained fall in the volume of sales over many months. Also any price drops will hit outlying areas and less desirable locations harder.
ReplyDeleteI bought my house in North Vancouver for $33,500 in 1972 and I sold it in 2007 for $969,000 and I saw three major downturns during the period of my ownership. A house which carries a mortgage is a significant commitment. Patience is required as shown the following extract below which was included in my response to this blog of September 1.
EXTRACTS FROM AN ARTICLE “A MARKET LIKE NO OTHER”,
Banker’s Institute Journal 1990
P Foley, Economic Advisor of a UK BANK
“The market for housing is quite unlike any other….many sellers would prefers take their house off the market rather than lower the price….the result is that initial evidence in any downturn is a sharp reduction in the volume of house sales rather than a fall in prices. ….;
Previous cycles
… Starting from the peak of the cycle, in terms of sale volume, there is a sharp drop in volume. Prices are slow to react; house price inflation sometimes accelerates further after the initial volume fall.”
Yes Bill I remember your comments well.
ReplyDeleteCertainly the combination of declining sales with stable or higher prices defies Econ101.
If you are right, then we have a long wait, which suits me fine as I am in a long lease, but there isn't much to comment about when markets are going through their 'irrational' phase.
When the RE bear bloggers start capitulating you know we're in for the correction! Thanks for posting,love your stuff, keep up the good work.
ReplyDeletefish,
ReplyDeletebetter quit, you have been wrong for so long. There is no point in wasting your time at smth you dont understand. In the long run we are all dead. RE is not your thing. Keep renting.
Sure there's a point. We get to make stupid jokes to make ourselves feel superior to all those dumbasses buying and making more than my salary on appreciation alone!
ReplyDeleteSeriously, Chad is getting to you. Keep doing it if you still find the subject interesting. If you dont like doing it anymore, dont.
It really has piss all to do with right and wrong, just if you like doing it or not.
I hope I'm not getting to you, I like some of your analysis, I just wish you would remove your bias and try to be more objective, but overall, your analysis is welcome.
ReplyDelete