Don’t Worry Be Happy!
October 27th, 2008 Categories: Real Estate News
Vancouver real estate owners have been bombarded over the last two months with negativity by the press. Now everyone’s a real estate guru! And guess what? They have the ability to see into the future and predict it. The stock market plunges, house prices are falling, Canadian economy slowing down and may go into a recession. That’s the daily news.
What goes up must come down and vice versa. This isn’t the first time Vancouver’s real estate market has corrected and it won’t be the last. The world is not coming to an end. It’ll work through this mess. Personally, i’m tired of the press and its negativity and I’m not watching or reading about it any more. There’s nothing I can do about it anyway!
Here’s my Top Ten Don’t Worry Be Happy List!
1) British Columbia “the best place on earth” the sun shines a lot this October and it’s warm. Along with the Feds and Alberta we are the only Canadian Province to have triple A credit rating.
2)Vancouver has consistently been voted one of the top cities in the world to live in and has almost always had the most expensive real estate in Canada. Our city has a shortage of land. We are San Francisco 25 years ago. Our city is georgraphically breathtaking, the air is clean, streets are safe, it’s a walkable city with wonderful recreation
3)Interest rates are rock bottom and may go lower
4) BC unemployment is less than 5% and not expected to change much
5) Net migration of 35,000 to 40,000 into the province annually - population growth. Rental vacancy rate below 1%
6) BC is the most diversified province in Canada and only 55% of its trade is with the US
7) BC has the lowest mortgage foreclosures in Canada
BC Government introduced a stimulus package this week and is fasttracking major projects to pick up the slack
9) Lower Canadian $ is good for our exports
10) Developers not starting any new projects. Exhausted homeowners will delist their real estate by year end and revisit the market in a couple of years. These two factors will reduce inventory by early spring, then we’ll see the market bottom. and there it’ll sit for a while. So says my crystal ball!
Cameron Muir of BCREA’s chief economist has the opposite viewpoint to Helmut at BC Central Credit Union. Both respected local economists. Apparently their crystal balls don’t jive! The press don’t give Cameron the limelight they shed on Helmut because he’s positive. He says our fundamentals are very strong in BC and the market will start bottomig in the spring ( I attended his presentation last week)
Also attended Ozzie Jurock’s 2008 Real Estate Outlook earlier this month and he was advising buyers to start lowballing and cherry pick. A couple of weeks later he’s predicting a further drop. Huh?
Smart Vancouver real estate buyers are circling the market like hungry lions! During the month I’ve made many lowball offers on behalf of buyers and none have been successfull.. This indicates that there are few desperate sellers but certainly there’s some motivated sellers that will sell at a reasonably lower
price but they’re not accepting just any offer that comes their way.
So turn off the TV, throw away the newspaper and have a bottle of wine….everything will be fine! dont worry, be happy!
when you’re ready to buy or sell real estate in Vancouver contact Maggie, an experienced realtor. Internet! International! Innovative!
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I surely can’t argue with the experts on either side, but I sense a trend in blaming the media: “it’s not the reality, it’s just the scandalous media headlines”. While it has a grain of truth, I haven’t heard the realtors and RE economists complaining about excessive positivity when the media flooded the market with stories about line ups for pre sales in Surrey.
Comment by luc — October 27, 2008 #
Not really, BlueSkies…
According to your logic/predictions we’ll get back to $104,000- houses in a year or so.
Draw a line btwn. house and stocks… Which side you’d rather be TODAY…?
Comment by Harris — October 28, 2008 #
Your ability to remain upbeat in the face of all this doom n’ gloom is commendable! I wish I could remain so positive, perhaps I’m just a glass-half-empty kind of guy. Here are my quick thoughts on your top 10, hope this isn’t too much of a downer, but I think there’s something to be said for dealing with reality as well!
1-Lots of places have wonderful weather, but that hasn’t stopped their housing correction. This month has been beautiful, but we’re known for our rain.
2-Hopefully we’re not San Francisco 1 year ago. According to Time Magazine SF house prices are down 27.3% over the last year
3-Interest rates are rock bottom. How much further can they drop to stimulate buying if our local market continues to suffer?
4-Employment.. As long as construction keeps on its current rate we should be fine. What’s that saying about assumptions?
5-Unfortunately that rosy 1% vacancy stat does not include all the people that rent out condos individually, which is just about all the new rental stock in Vancouver.
6-Yes just over half our trade is with the US. Since you’ve thrown away the newspaper you may have missed whats happening in the other economies we trade with.
7-So far, but they’re increasing. Why would foreclosures be high when prices are going up?
8-Government spending is the answer?
9-Lower CAD is great, but the volatility is not so great.
10-Developers aren’t starting new projects because there’s no demand. Unfortunately there are still many years of new supply coming online. Hopefully we’ll find those new buyers to fill in the demand side soon!
Comment by The Pope — October 29, 2008 #
Tsur Somerville the Director of the centre for urban economics and real estate at the Sauder School of Business at the University of B.C. said that this summer “…sales went off a cliff”. Inventory of unsold homes is almost 50% higher than it has been at any time in the last 4 years. In September, B.C. lead the country with 33,600 new housing starts to further add to the flood. The median family income in Vancouver is approximately $70,000 and even a tiny condo downtown is 6 or 7 times that amount. Robert Shiller, the Yale economist who predicted the dotcom bust and the US housing bust called Vancouver “the most bubbly city in the world” IN 2005! Spring will be when the true blood bath starts as speculators panic trying to sell their over-priced condos into a stagnant market and move up buyers are unable to find any first time buyers willing to pay them enough to make a move up feasible. I’m not worried, and I’m happy.
Comment by Mark Kozlowski — October 29, 2008 #
I’m very happy! The recent forecast by the Credit Union of BC predicting 30% house price drops in the next two years was one of the best things I’ve heard in a long time!
As a first time buyer this means prices may actually become affordable, so I can buy a house and start a family! It may not be great news for people that thought small condos where actually worth half a million dollars, but c’mon, they all knew it was a high-stakes gamble right?
Comment by ted — October 31, 2008 #
you are so off the mark, i am embarassed for you. this crash is HUGE — it’s already here.
Comment by PM — October 31, 2008 #
I bought a condo last year hoping to make money.
I paid $800,000 and have it rented out for $2200.
I figured I could afford to subsidize the tenant to the tune of $2000+ every month as long as it went up in price.
Now it’s worth $650,000 and my tenant wants to move.
I guess I should just ignore the press and be happy, thanks Maggie!
Comment by Thomas — October 31, 2008 #
Prices in Vancouver have nowhere to go but down, down, and down. Buying real estate right now in Vancouver is tantamount to committing financial suicide. What goes up, must come DOWN.
Comment by John — October 31, 2008 #
Maggie.. Just curious… You say you are tired of the press and their messages of doom and gloom.. Were you tired of the press when they were pumping this pump and dump real estate scam??? LOL The writing has been on the wall since the fall of 2005 when the US housing market began to collapse..
Comment by Robert James — October 31, 2008 #
Thanks Maggie, I am happy - you cheered me right up
“Smart Vancouver real estate buyers are circling the market like hungry lions!”
That is hilarious. Now I know you’re just trying to cheer people up with your kidding around - but be careful, some people may take this the wrong way and actually think this is true, that could leave them with a mortgage that’s more than their house is worth.
But please continue writing your comedy blogs - I love them.
Love, Chris.
Comment by Chris — October 31, 2008 #
I’m currently looking in Coquilam. I’m seeing prices drop $100,000 and more on many houses. Despite the major drop in asking prices sales continue to be dismal. I think its way to early to be calling a bottom on this market.
Comment by SurreyJoe — November 1, 2008 #
“We should be careful and discriminating in all the advice we give. We should be especially careful in giving advice that we would not think of following ourselves. Most of all, we ought to avoid giving counsel which we don’t follow when it damages those who take us at our word.”
-Adlai Stevenson
Since we’re in the mood for giving advice, I thought I would share some with you Maggie.
Comment by Tsk Tsk — November 1, 2008 #
Its all over but the crying… Someone give maggie a tissue. The writing has been on the wall for a long time now somewhere when the p/e ratio went out the window…. You had a good run maggie et al. But it’s all over. Buy at the bottom and wait- thats good advice. If you pay too much it’s too much and don’t look at your realtor you did it and now you suffer
Comment by Disbelief — November 2, 2008 #
Some economists are predicting that house prices in GVRD will drop by 30% or even more depending on the state of the economy. The banks started to look at future value of the house before they lend the money. They want to make sure that the mortgage amount will at least be at par with the value of the property even when it drops by 30%. Having said this, if I want to buy a proprty listed for $400K, should I ask for a discount of 30%? I tried doing this but no realtor wants to sell it to me with 30% discount. Is this 30% unrealistic and ridiculous to ask for? What discount is realistically acceptable at this time? Can someone help me pls.
Comment by phil — November 29, 2008 #