Why Vancouver Won't Crash

[ArthurFonzarelli]

"ArthurFonzarelli"

Vancouver RE turned on its own.

wrong.
Vancouver turned due to a daily barrage of bad economic news from the US - including dire housing news.
Remember? Bank failures, mortgage defaults, etc.
Where were you?

BZZZZZZT!! Wrong! Let's stick to facts and argue about interpretation later. Greater Van HPI hit top in Jan/Feb 2008, was flat through May 2008 (ie shifted momentum from strong growth to flat during the peak buying season / typical price increase season), then starts precipitous declines May-onward...

http://www.google.ca/imgres?um=1&hl=en& ... s:16,i:126

TSX still pushing 14,000 early September 2008. 20% higher than it is today. That's not negative sentiment in our most important indicator of consumer confidence. Simple facts. Fonz read good.

Maybe there were a few news stories prior to September 2008 that savvy analysts / investors understood as being harbingers of danger, but the TSX was 20% higher at start of Sept 2008 than it is today, and this was nine months after the market momentum shifted under its own bloat.

I think Jesse's spot-on that liquidity issues and unemployment into 2009 probably accelerated the downward trend, but this thing turned 100% prior to any spillover from sentiment about the Global Financial Crisis, which wasn't even the "Global Financial Crisis" until October 2008. In fact it wasn't even formally a "recession" in Oct 2008.

[tdma800]

"ArthurFonzarelli"

Vancouver RE turned on its own.

wrong.
Vancouver turned due to a daily barrage of bad economic news from the US - including dire housing news.

ding!! you got it exactly right!

[ArthurFonzarelli]

"ArthurFonzarelli"

Vancouver RE turned on its own.

wrong.
Vancouver turned due to a daily barrage of bad economic news from the US - including dire housing news.

ding!! you got it exactly right!

Otherwise known as "numbers shmumbers"...

[jesse1]

there are many reasons for needing to sell. Probably more than needing to buy.

IMO "needing" to buy is laughable; it's a lifestyle choice not a need. If I don't eat I die; if I don't buy I rent.
I think I was taught the difference between "need" and "want" in grade 10, but I do admit half the class wasn't paying attention.

[instigator]

the way i see it, if you are a homeowner and not under any type of financial stress or other issue such as divorce why sell?
i think most of the people's mentality is like that.

But just because you don't sell doesn't mean that the value of your house won't go down.

that is true but the homeowner doesn't care i'm sure because monetary value can't make up for pride, enjoyment and happiness a house can give.

it's like asking would you rather have 8 bucks or that beer at a canucks game. most people would take the beer lol!

[instigator]

the way i see it, if you are a homeowner and not under any type of financial stress or other issue such as divorce why sell?
i think most of the people's mentality is like that.

Why give up your home? Why give up your piece of paradise if you can still afford it?

You could sell it and trade up to a bigger place.

yes you could trade up and look for another but if you are looking in the same city it just another buyer adding to demand.

[fishguy15]

that is true but the homeowner doesn't care i'm sure because monetary value can't make up for pride, enjoyment and happiness a house can give.

I bet they will. They certainly seemed to gloat when prices when up...

[robert james]

that is true but the homeowner doesn't care i'm sure because monetary value can't make up for pride, enjoyment and happiness a house can give.

I bet they will. They certainly seemed to gloat when prices when up...

The homeowner may not care but I would bet their banker will care if there is lot of money owing on the mortgage or a heloc. The banker will care a lot.. Beautiful sunny day here in the Okanagan..I have to get back and finish my deck... Cheers!!

[timber2012]

that is true but the homeowner doesn't care i'm sure because monetary value can't make up for pride, enjoyment and happiness a house can give.

I bet they will. They certainly seemed to gloat when prices when up...

The homeowner may not care but I would bet their banker will care if there is lot of money owing on the mortgage or a heloc. The banker will care a lot.. Beautiful sunny day here in the Okanagan..I have to get back and finish my deck... Cheers!!

I'm not familiar with that term.

[Geyser]

yes you could trade up and look for another but if you are looking in the same city it just another buyer adding to demand.

No, if they sell their old home they add to supply, when they buy another in the same city it's a wash, they just neutralize their previous addition to the supply.

[jesse1]

they just neutralize their previous addition to the supply

... with 3-4% transaction costs, so it's a bit, as we say, lossy.

[timber2012]

they just neutralize their previous addition to the supply

... with 3-4% transaction costs, so it's a bit, as we say, lossy.

Not for realtors.

[Warren12]

they just neutralize their previous addition to the supply

... with 3-4% transaction costs, so it's a bit, as we say, lossy.

Not for realtors.

Or the government. Why aren't the public sector unions pushing real estate? It can only serve to benefit them with more provincial revenue. Oh I know, they don't understand economics.

[timber2012]

Not for realtors.

Or the government. Why aren't the public sector unions pushing real estate? It can only serve to benefit them with more provincial revenue. Oh I know, they don't understand economics.

Let's say the benefit for the public sector unions is a lot less than the benefit to realtors.

sure the provincial gov't would have more revenues.... but would the public sector employee be better off with less salary and house prices of say $500K... or 2% more salary and $800K house prices.

[fishguy15]

Why aren't the public sector unions pushing real estate? It can only serve to benefit them with more provincial revenue.

For the same reason that they were against the HST. The big picture is not exactly their forte.