B.C. real estate markets cool down

[Canadian]

New figures show the real estate market is cooling off across Canada, including the previously hot markets in B.C. and Metro Vancouver.

A Canadian Real Estate Association survey released Wednesday says sales are lower than expected, and predicts prices will remain flat for the rest of 2010.

"Today, home sales are down more than 30 per cent from that very high [winter] level," said Cameron Muir, an economist with the B.C. Real Estate Association.

Yet prices are still through the roof ... How are people in the new employment reality for BC ever going to afford a home?

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Or for a much much better read Cheap Thrill @ the Greater Fool

[Dana]

Headline in our local paper this evening says that housing prices have gone up 18% in our area in the last month!

D

[Toby Fourre]

Here's Garth Turner's latest economic update.

In my office in the Big Smoke (where there was recently an earthquake, followed by riots and burning cars, then a massive power outage), a colleague mentioned casually he can’t unload his upscale cottage north of the city. How long on the market?, I asked. And he said, “two years.”

Looked at a commercial property two weeks ago on the main street of a GTA-area village my wife mused on buying (she’s now in chains in the basement). The agent called back hours ago and the conversation drifted to a 30% lower price. That listing is three weeks old.

And, breaking news continues to pour in from this toxic blog. Average West Van prices down $90,000 in the past month. Sales in Calgary gored like a Stampede dogey. Toronto deals crashing 20% while listings jump 21%.

<snip>
Alas, that moment’s not coming. There’ll be no depression. Just a mounting chance recession will reappear, and a rare opportunity for many Canadians to finally realize it’s not different here, after all.

Now, I say this fully knowing the facts of the situation. For example, a stunning 55% of the entire American labour force has lost a job or suffered a pay cut in the last two years. Our biggest trading partner and customer lost 8 million jobs, and is regaining them at 100,000 a month. At this rate it will be at least 2017 before 2007 employment levels return – ten gruelling years.

A million jobs alone were lost in homebuilding. In Canada and the US, scores of Boomers will never work again. For the first time ever, consumer debt equals 90% of the American economy. Government debt equals another 90%. California is a broke as Greece. And governments everywhere have no choice but to bring in austerity packages or see debt bring them down – in the knowledge spending cuts will just slow things more.

Against this background the stock market has given up its 2010 gains, while the bond market has leapt to life. Basement day traders have been wiped out while scores of equityless new homeowners are staring at an economic tsunami. As I have been saying for some time, what happened to the US middle class is not an aberration, but a lesson. Did anyone learn?

So, yes, there’s plenty of hair on this economy. Things may well get uglier. Asset prices will fall, even as the last busloads of greater fools roll in to snap up ‘bargain’ properties at 5% or 10% less than April’s asking price. But no depression.

He has more. Now is not the time to get a mortgage.

[kcowan]

I don't know who the sellers are. One that I know wants to sell her townhouse in Eagle Harbour and has had it on the market for a year. But if she does not sell she will continue to live in it.

Average rents for 2BR apartments are about $1150 in Vancouver and $1134 in Toronto. I don't see how the high purchase prices can be justified.

http://www.cmhc-schl.gc.ca/en/corp/nero ... 5-0815.cfm

[Dana]

Prices are now cooling here too. Flippers seem to be getting stuck or taking a loss soon., according to someone who has been watching the local market.

D

[Swiss Miss]

the market here is glutted with homes. most r/e companies are trimming off the speculators to try and drive in some business.

[Toby Fourre]

As the market gluts, more and more desperate sellers will lower their asking prices. It is starting as a trickle but will become a torrent.

[Dana]

Oh, I heard another factor locally from an alarms salesperson who told me that in the last 4 yrs he has seen a change where those elderly peeps coming here for their last days, when passed, leave their properties to children who most often want to rent them out.....lots of troubles there he says. And that says there will be a lot more houses coming up on the market too, if they are too much trouble to rent out - and they are!
I would have thought there would just be a natural replacement with more elderly in those homes or young families starting out but seemingly not. Perhaps the economy is not right for it at present.
Good for buyers tho soon, maybe hey?

D

[Dana]

Stats in the paper this week say that prices are down all over the island by as much as 27% in some areas and only down by 1% here and -0.5 in the Cowhichan Valley.

D

[Toby Fourre]

Housing sales fall sharply in June

[elkouri]

we were very lucky to sell our place for what we bought it for.
many have had to take a great loss.

Kayrose

[Dana]

Ha ha,
I tripled my buy price almost, but it took 20 yrs and there were a few bills in between! It was a good buy in the first place due to location.
Today, Jly 15, I had a visit from the Realtor who is keeping me posted as to what is available for sale. When I said I was waiting for the market to slow in my favour they said that it has already slowed down.
Well, not obvious in the prices yet as I see no significant drop in anything.
Things must be changing fast if the newly release stats did not reflect this.

D

[kcowan]

I expect the drop in prices will be gradual because the realtors will do everything in their power to maintain prices. The bubble has been inflating for 13 years. Lots of air to escape.

Dana are you upgrading or downsizing? You should downsize in a bubble and upgrade in a down market. Kind of like asset allocation in your portfolio.

[Toby Fourre]

Today, July 15, I had a visit from the Realtor who is keeping me posted as to what is available for sale. When I said I was waiting for the market to slow in my favour they said that it has already slowed down.

Either he's not being honest or he is stupid. Avoid him. The stats are out there whether the real estate marketers want to pay attention or not.

In this economy, the smart money rents.

[Toby Fourre]

Garth Turner has a couple of quotes on his blog at What problem?.

The first, from a former New York banker:

“Canada will see the same housing crisis as the States has been, and for the naysayers, must I remind them that Canada did and does have subprime mortgages— 0/40 & 5/35 mortgages (with the 5% downpayment amortized across the mortgage essentially resulting in 0-down mortgages), artificially and historically unprecedented interest rates, and a general mentality that Canada is different, that housing prices can only go up. But we all know how that ended in the States. In Spain. In Australia. In Japan. In Ireland. Sigh.”

The second from a Stephen Harper aide:

“In Canada, we don’t offer subprime mortgages to potential clients. Most importantly, credit checks matter. If you don’t have sufficient personal income or assets, you ain’t getting the deed to the house.”

Those are the two problems here in Canada. We think that we are different and we tell ourselves lies about it. Worse, we believe the lies coming from Harper, Flaherty and those hyping real estate. They are still telling us lies.

[Dana]

Today, July 15, I had a visit from the Realtor who is keeping me posted as to what is available for sale. When I said I was waiting for the market to slow in my favour they said that it has already slowed down.

Either he's not being honest or he is stupid. Avoid him. The stats are out there whether the real estate marketers want to pay attention or not.

In this economy, the smart money rents.

Sigh,
I don't know where my posts go sometimes......I'd already answered this one but it too disappeared.

my Realtor is a good one. I have an inside ear there too. A great office to deal with.They were here to show me what is available and when I told them I was patiently waiting for things to change, they told me that the change has begun and understand that I am being realistic and waiting for that right deal. I am glad to have them remember me and update me once in a while.
With so many negative comments about realtors, I am glad to say that there are some good people out there doing that job.
Yes, the bank's prime rate changed some this week too.

D

[Toby Fourre]

Sigh,
I don't know where my posts go sometimes......I'd already answered this one but it too disappeared.

That happens when you and someone else post at the same time. The server gets busy for a couple of seconds and may not grab one. The best way to avoid this is to wait after posting for it to automatically take you back to the thread you were on. If the post is there it took; if not, it didn't.

Of course, I have the other problem: I'm absent minded.

my Realtor is a good one. <snip> With so many negative comments about Realtors, I am glad to say that there are some good people out there doing that job.

You are right. There are honest and responsible Realtors. Unfortunately, there are a lot of hype artists out there. Sales people make their living on commission and can be under a lot of pressure from their employers to push, push, push. (Been to a car lot lately?) What is hard to see through is the dis-ingenuity, and sometimes outright deceit, of the big real estate boards, bankers and politicians who keep telling us everything is hunky dory when it is not.

A couple of years ago we had to fire a real estate salesman because he could not face the reality of the slumping market and over priced us all his clients. This had worked in the up market. He is a good salesman in an up market and is floundering in the down market. We had quite a time finding a Realtor who crunched the numbers and faced it.

There is only one reason a property does not sell: cost. I guarantee that if you put a house on the market for one dollar that it will sell.

Something that is very hard to face is that one's banker, lawyer, doctor, or any salesman is not your friend while doing business. You may go fishing with him/her, your kids may play with their kids, you may sit on the same PTA committee, but business is business and friendship is not part of it.

[graceyc1]

Every Realtor should show you comparables of the area. We have a Realtor in our area that always lists below market value. I've watched him for 20 years. He likes to list low, sell and get his commission. He is very unethical, but has returning clients from his synagogue that think he's a great hot shot! He's cost people alot of money. One lady told me, they lived next door to him thus when they decided to down size they listed with him and neglected to obtain any other evaluations. Their property sold in 3 days, an indicator right there of being priced below market value. Their neighbours brought this fact to their attention, albeit too late, that they'd undersold by 50,000.00! He has a reputation now, but still has a following, unbelievably.

[Dana]

Ha Ha Gracie,
Much like our politicians, innit???

Yes, i am too old to be naively thinking that anyone but myself has my best interests at heart.
The service I have received form this one is far superior to the agent I tried out a couple of years ago who was no real help at all.

D

[Swiss Miss]

I've bought and sold 7 houses so far, 2 realtors. the first one was really nice and everything but we were buying in his area as I don't believe the info he gave me was correct. It's the only house we lost money on and I believe it was because of the realtor.

[Canadian]

Housing sales fall sharply in June

Now they are reporting prices are up....Like what report does one believe? CBC seems to have articles saying it is in the 'drink' to being 'on fore'??? Well with the state of alleged journalism with main stream media i should not be surprised anymore...

Home resale prices up 13.6% over year

Canadian home resale prices in six cities were up 13.6 per cent in May compared to a year earlier, according to a report issued Wednesday.

The Teranet-National Bank National Composite House Price Index measured resale prices in Ottawa, Toronto, Calgary, Vancouver, Montreal and Halifax.

It found the biggest gains were in Vancouver, where prices rose 17.1 per cent, and Toronto, where they are up 16.0 per cent.

What am I failing to grasp or missing?

I see houses for sale longer than I have in years. There are two on the street that have been for sale for 5 months now, 2,3,4 years ago they would of been sold literally within a couple of days...


Read the rest here

[Toby Fourre]

If you want to bury news, just have it hit the wire on Friday of a long weekend.

That’s exactly what the Canadian Real Estate Association did two days ago – getting its message on the public record while at the same time hoping the public was preoccupied with beer and roasted weenies. And this was the news: CREA says housing sales across Canada will drop by 1.2% this year.

This may seem entirely meaningless until you remember that five weeks ago the same cabal of realtors told the country sales would rise by 5.5% in 2010. And it gets even more interesting in light of the forecast made just before that – a 13.3% surge over 2009 levels.

How could an industry group with its fingers on the pulse of the biz get it so wrong?

Market forecast

[Canadian]

We’re all Americans now.

Marc is in charge of mortgages at a large bank, and he’s getting nervous.

“Many cases are scaring me. One customer owes $60,000 in credit card debt, and he wants to refinance his mortgage to repay it.”

Another uses his house as an ATM. “He’s refinanced his mortgage eight times. To buy a Ski-doo, a truck, a boat … The day his house’s value starts falling, this guy will lose everything.”

Is this scene taking place in the U.S.? No. In Montreal. Forget about Canada Day. Partly thanks to our politicians, we’ve all become Americans — version 2007, a few months before their economy collapsed.

//snip//


We have created a legion of subprime borrowers, one broken refrigerator away from default. If interest rates rise, the U.S. economy relapses, or home prices fall … our house of cards collapses.

Politicians should understand that building a healthy economy requires saving, not mountains of debt. In the meantime, we’ve become Americans, circa 2007. No wonder Canada fared well during the crisis: It hasn’t hit home yet.

I wonder if Interest rates will start to really go up? if so many will be screwed..probably one of the reasons the chairman will force us into another election early...click link for the rest.

One broken refrigerator away from default

[mej]

I believe interest rates will go up the first of September, then again in November. That is as far as I can speculate.