The Story Of The Speculative Boom And Bust
Mortgage Broker News reports from Canada. “Brokers are wary about the high level of HELOCs in Canada, and the long-term effect they could have on household debt. ‘I think HELOCs are detrimental to the housing market; people are running themselves up in debt and at least with a mortgage you pay it down,’ Gary Green of Mortgage Plus told MortgageBrokerNews.ca. ‘With a HELOC, though, you can just keep running the credit up.’”
“Canadian outstanding debt currently sits at $266 billion, according to RBC, a chunk of that in home equity lines of credit. According to CAAMP’s most recent figures, 22 per cent of Canadians have a home equity line of credit. ‘It’s like turning your house into an ATM,’ chartered accountant and personal finance author David Trahair told the CBC. ‘If you’ve got a house, especially in Toronto with these insane values, you can borrow an incredible amount of money against the house.’”
The Financial Post. “The Greek debt crisis washed up in Alberta Monday, as a flight away from risky assets knocked US$4.40 off oil prices, putting additional pressure on the province’s already-battered oil industry and on oil-dependent provincial government finances. Another oil price retreat would be dire for the Alberta-based industry, which has been on a strict spending diet for the past seven months, resulting in widespread layoffs, project cancellations and investment cuts. ‘We’re getting our summer correction and I don’t know where it will stop,’ said Michael Lynch, president of Strategic Energy & Economic Research in Winchester, Mass. ‘We could soon be looking at $50-a-barrel ceiling for WTI.’”
The Canadian Press. “With oil prices drifting closer to US$50, energy executives in downtown Calgary are trying to stay positive. When crude was above US$100, the Fort McMurray, Alta., region saw enormous cost inflation. Nowadays, overtime costs are down ‘quite significantly’ as Syncrude has shifted around schedules. Companies that provide drilling and other services to oil and gas producers have been hit particularly hard in the downturn. Dale Dusterhoft, CEO of Trican Well Service said the sector can look forward to an oil price of US$75 or US$80 a few years from now. ‘So running a low cost operation’s going to be paramount to being successful there because there isn’t going to be that much extra money floating around.’”
From MetroNews. “A string of houses on the Cambie corridor targeted by squatters, vandalism and theft after being left empty by developers waiting for redevelopment has prompted one city councillor to call for action. Green Party Coun. Adriane Carr will ask council this week to immediately address the problem of unoccupied and vacant houses. In her motion, Carr states that neighbours’ security, safety and quality of life has been threatened by the unkempt properties that attract everything from critters to crime.”
“She also questioned whether the city can force developers to either rent out their properties or provide additional security if they intend to sit on empty houses for a long time while waiting for the right opportunity to start construction. The idea of renting out vacant homes has gained traction recently as affordable housing advocates search for ways to find people decent homes in a city where vacancy rates hover around 0.5 per cent.”
From Global News. “Fariba Hatami was among the first customers to buy a pre-construction, low-rise Mississauga condominium in 2012. For $473,000 she says she was promised an unobstructed view. Now, Hatami faces a giant jumble of natural gas pipes and valves a few metres from her windows and balcony door. The school teacher and yoga instructor says she was charged a ‘premium’ by the sales representative for the corner unit, which is just under 1,000 square feet in size.”
“Customers who buy pre-construction condominium units can’t be sure if they’ll have utility services nearby, or in full view, until the project nears completion. Purchase agreements give developers the right to make changes to the project as they see fit, often without advance warning to consumers. VANDYK refuses to give Hatami the option to cancel her purchase agreement because of the unexpected arrival of the natural gas pipe structure. The builder also declined to offer another unsold unit in the development, or to reduce the price of Hatami’s unit in any way.”
“She also says real estate agents have told her the resale value of the unit will be diminished because of the natural gas pipe structure. Domenic Zita, president of VANDYK Commercial, disagrees. He says his company is ‘working with Hatami’ and will create landscaping around the structure to improve her view. But Hatami doesn’t believe it will make any difference. ‘If this is a good thing, why don’t they take it back and sell it for more?’”
The Globe and Mail. “The story of the speculative boom and bust in Canada’s vacation real estate industry reads much like that of the housing bubble south of the border. In the early and mid-2000s, easy credit, a seemingly insatiable demand for real estate investments and Canada’s growing renown as a vacation destination inspired developers and investors to flock to resort communities with dreams of building vacation paradises, many of them offering thousands of homes built around expensive golf courses, ski hills and marinas.”
“With its reputation for million-dollar cottages owned by Hollywood celebrities and the Toronto business elite, Muskoka was a prime target. ‘Before the market turned, we didn’t have to do any work,’ says Muskoka-area realtor Heather Scott. ‘We were more order takers than we were helping people buy and sell properties. We were just writing deals.’”
“Peter Freed purchased 850 acres of wilderness near Gravenhurst from five different owners to create Muskoka Bay, a community of up to 1,000 luxury cabins along an 18-hole golf course. ‘If I knew what I knew today and I was starting from scratch, I wouldn’t do it,’ he says. ‘So when you look at a market with something that has never worked, I guess you have to ask yourself why you did it in the first place.’”
The Globe and Mail article is a tale of woe for sure. But look who pops up in it:
‘Increasingly, demand for Canada’s recreational properties is being driven by a relatively new force: Chinese tourists.’
‘B.C. has long been a popular destination for Chinese tourists, but visitors from mainland China are now venturing farther afield in search of a more authentic Canadian experience. Organized tours are becoming popular, Mr. Johnson says, often featuring a visit to a farm or winery in the Okanagan, a day of fishing and a night at a lodge on Vancouver Island with a traditional Chinese dinner incorporating local Canadian ingredients.’
‘Chinese investors are picking up on the trend, fuelling demand for resorts, hotels and marinas in smaller communities such as Richmond and Kelowna to cater to Chinese tourists. Mr. Johnson has sold several B.C. resorts, marinas, farms and private islands to Chinese buyers.’
“The Chinese buyers see things that we don’t see,” he says. “In Canada, our development horizon tends to be three-to-five years. Chinese buyers will say back home in China we do 40-year deals. It’s a legacy property that a company would have for a long time.”
‘Often Chinese investors are looking at the soaring cost of buying and renting out a home in Vancouver’s overheated market and opting to buy waterfront resort projects instead. That has driven up the prices of properties in some regions that historically were never popular tourist destinations. “I look at some of the prices that are being paid and I think they’re being very aggressive,” Mr. Johnson says.’
Everybody sees these guys coming and thinks “SUCKER!”
‘Investors trying to sell Chinese shares have found themselves locked out of 72 percent of the market. At least 1,331 companies have halted trading on mainland exchanges, freezing $2.6 trillion of shares, or about 40 percent of the country’s market capitalization. Another 747 fell by the 10 percent daily limit on Wednesday, making it all but impossible to find buyers at the prevailing price.’
“It’s absurd, stopping trading just because they don’t want stocks to fall,” said Tsutomu Yamada, a market analyst at Kabu.com Securities Co. in Tokyo. “They’re going all out in trying to stop stocks from falling but it’s not working.”
http://finance.yahoo.com/news/china-freezes-trading-1-300-042548037.html
Of course it’s absurd, yet people, especially in the media, pretend the Chinese have invented some magic wand that only works in their magic kingdom.
I had a post in 2005. It was something like “China pops the bubble commie style”. They were gonna pop that bubble man, no ifs ands or doubts. What a joke. They never do anything that would even make them look bad. Always the easy choice, no tough decisions. They’ll talk reform for years while they are running trillions out the back door.
Now if they have to throw some guy off a building, hey, can’t make an omelet, etc. If they have to ruin a river, or kick a few million off their land, that’s progress. Anyway, the state owns all the land really, so stop your whining.
China has arrived at the juncture of the magic show where the magician saws somebody in half. Only the magician doesn’t know how to do this trick, and actually is going to saw somebody in half. Next up, trying to walk through the blades of a fan.
Quoting from Ben’s post: “They never do anything that would even make them look bad.”
In Asian cultures, losing face is to be avoided at all costs.
Lying is totally fine. Just don’t get caught.
Chinese buyers will say back home in China we do 40-year deals.
That’s a funny remark, considering that 40 years ago Mao still ran China, which was still 100% commie. Maybe they think they do 40 year deals, but so far I don’t think there are any current “deals” in China that are 40 years old.
From wiki on Chinese number superstitions:
‘Fariba Hatami was among the first customers to buy a pre-construction, low-rise Mississauga condominium in 2012…For $473,000′
Ouch, but there’s more:
‘VANDYK refuses to give Hatami the option to cancel her purchase agreement because of the unexpected arrival of the natural gas pipe structure. The builder also declined to offer another unsold unit in the development…’
So they still have unsold condos 3 years after Fariba camped out in the snow to snap-up her pipe view home?
‘…, or to reduce the price of Hatami’s unit in any way.’
‘Fort McMurray has seen its unemployment rate more than double in the past year as oilsands operations laid off staff, meaning a lot of skilled workers are sitting on their hands waiting for work. ‘
‘Halifax-based Irving Shipbuilding says they should consider heading east.’
‘According to Statistics Canada, the unemployment rate in the Wood Buffalo region (Fort McMurray’s municipality) has more than doubled in the past year from 4.2 per cent to 8.6 per cent. There are 8,000 people in the region looking for work.’
‘Canada needs to be better prepared to weather a housing crash that would leave taxpayers and mortgage insurers on the hook, according to a report. The country should build a fund to cover taxpayer losses of as much as C$9 billion ($7.1 billion), which the government could tap in case of mass defaults, according to a report from the C.D. Howe Institute.’
‘A severe housing crash with a 30 percent drop in prices and “high unemployment” could mean a C$17 billion loss for mortgage insurers, leaving the federal government on the hook for C$9 billion, according to the report. The report comes as Canada’s housing market remains in overdrive with Toronto home sales reaching a record for the third month in a row in June, according to figures released Tuesday, and transactions jumping 28 percent in Vancouver in the same month over the prior year.’
‘The government requires mortgages with less than 20 percent down to be insured. There is C$1.2 trillion in residential mortgage credit held outstanding by banks and non-banks as of March, according to the Bank of Canada. CMHC is government-owned and its products are 100 percent backstopped by the government in the case of a default, while Genworth and Canada Guaranty’s products are 90 percent backed.’
‘More than half of outstanding mortgage debt is now covered by federally backstopped insurance, the C.D. Howe report said.’
I don’t think buyers can walk away from debt in Canada , not like in the US anyway.
I just looked online, Every year, 100K Canadians file for BK. I’m gonna go out on a limb and predict that number is going to grow, a lot.
“…that number is going to grow, a lot.”
+1 Crashing oil prices has already started their domino cascade.
‘Amid the growing debate over China’s influence in this country, some 200 delegates attended the inaugural Pacific Finance and Trade Summit in Vancouver on June 16 to promote Canada as a trading and clearing hub for the Chinese renminbi (RMB) currency.’
‘News soon filtered in that an Ontario cabinet minister, in promoting increased trade ties with China, had or has been under surveillance for at least five years for being “too close” to Beijing. “Treason” and “espionage” were mentioned in a sensational Globe and Mail story about Michael Chan, a China-born naturalized citizen who has risen within Ontario’s Liberal Party government. But no charges have been laid, and two days after the June 16 story, the Federal Justice Minister punctured the newspaper’s claim that he had confirmed Chan was under investigation.’
‘Nevertheless, given the prevailing anti-China sentiment in Canada’s newsrooms, the centrist Globe found rare support from its right-wing National Post rival. Diane Francis, a noted China critic, added to the Globe’s narrative by stating that Canada could suffer “long-term pain” if its business elite continues to cozy up to Beijing. She also suggested that Chinese migrants are really aiding Beijing’s takeover of Canada’s natural resources and hurting less well-off citizens by inflating real estate prices.’
‘Earlier, in a three-part series on booming Richmond city, the Vancouver Sun’s Douglas Todd reprised some of his criticisms about Chinese migrants: ethnic enclaves, proliferation of Chinese language signs, rising housing unaffordability and weakening community cohesion.’
‘Long suspicious of China, The Tyee, a left-leaning online publication, weighed in with a new critical report on how Prime Minister Stephen Harper sold Canada off to Beijing through the Foreign Investment Promotion and Protection Agreement (FIPA).’
‘Rarely has the breadth of Canada’s ideological media divide been so united on a single topic: the fear of China and things Chinese.’
‘But not everyone wants Canada to become China’s currency booster, or have more Mandarin or Cantonese speakers in the population mix.’
‘Disregarding their country’s gloomy economic outlook, 49 per cent of Canadians recently told the Asia Pacific Foundation of Canada (APFC) they don’t want any investments from China, citing a range of fears from loss of control of strategic assets, to environmental, health, safety, security and labour challenges. Politically, the RMB hub faces a hard sell as Canadians are becoming increasingly negative towards their country’s second largest trade partner.’
‘Canada’s mainstream media have played to the public’s anti-China mood by highlighting Beijing’s territorial bullying of its neighbours, its disastrous environmental record, and human rights abuses. The reports also focus on how new Chinese migrants in Greater Vancouver and Toronto are not integrating well due to their lack of English or French language fluency.’
‘Some 64 per cent of Vancouver residents blame Chinese-led foreign buying for causing the city’s rising real estate cost, according to a Angus Reid survey. The media has focused on Chinese buying of expensive high-end homes, but have hardly investigated other causes of Vancouver’s rising housing unaffordability.’
‘Canadian suspicions have also been aroused by Beijing’s eagerness to “splash the cash”. In 2012, state-owned China National Oil Corp (CNOOC) paid a very generous 61 per cent premium of more than C$15.1 billion for a medium-sized oil and gas company with little growth prospects.’
‘That record deal for both countries has ended badly for the acquired Nexen Inc., leaving behind a trail of job cuts, broken promises and unfulfilled expectations. With that deal’s failings still unfolding, many wonder if the potential benefits of the RMB hub project could just be as over-stated, and its problems under-rated.’
‘Canadian suspicions have also been aroused by Beijing’s eagerness to “splash the cash”. In 2012, state-owned China National Oil Corp (CNOOC) paid a very generous 61 per cent premium of more than C$15.1 billion for a medium-sized oil and gas company with little growth prospects.’
‘China’s securities regulator banned major shareholders, corporate executives and directors from selling stakes in listed companies for six months, the latest effort to stop a $3.5 trillion rout in the nation’s equity market.’
‘Investors with stakes exceeding 5 percent must maintain their positions, the China Securities Regulatory Commission said in a statement. The rule is intended to guard capital-market stability amid an “unreasonable plunge” in share prices, the CSRC said.’
‘China has unveiled new market-boosting measures almost every night over the past 10 days, steps that have so far failed to revive investor confidence. Foreign traders have been selling Chinese shares at a record pace this week in part due concerns over the government’s meddling in markets.’
‘Chinese authorities have also suspended initial public offerings, restricted bearish bets via stock-index futures and encouraged financial firms to buy shares. In perhaps the most dramatic effort to prevent investors from selling, local exchanges have allowed at least 1,331 companies to halt trading in their shares.’
‘As the Shanghai Composite’s record-breaking boom goes bust, President Xi Jinping’s government is deploying the heavy hand of the state in an attempt to prevent falling stock prices from eroding confidence in his leadership. The moves have cast doubt on the ruling Communist Party’s pledge less than two years ago to give market forces a bigger role in the economy, part of its largest reform drive since the 1990s.’
The day is coming when the Fed will announce new measures every night for ten days, without substantial effect.
Oh it will effect matters. Just not in the way intended.
Remember…. Housing demand is at 20 year lows…. and falling.
Mukilteo, WA Housing Prices Fall 12%
http://www.movoto.com/mukilteo-wa/market-trends/
“CHINA CONTAGION: HONG KONG GROWTH STOCK INDEX PLUNGES 13%”
http://www.breitbart.com/big-government/2015/07/08/china-contagion-hong-kong-growth-stock-index-plunges-13/
http://www.remax-fortmcmurray-ab.com/listingresults.asp?SEARCHED=TRUE&PAGE=1&SORT=pricereduction_up&PAGECOUNT=10
Not reduced to reduced: “1339″ Listings Match Your Search Criteria
http://www.remax-fortmcmurray-ab.com/217-MITCHELL-FORT-MCMURRAY-AB/FM0060970/FMREB_IDX?AGENTID=0
‘Move in ready, this 18 wide home on a corner lot with two parking pads. If you have toys, then you’ll enjoy the 12×16 heated shed. The outside is well landscaped with a multi level deck to enjoy the warm summer days. Inside you’ll find a large living room with a gas fireplace, vaulted ceiling, large bright kitchen with an island and dining area. The master has a large closet and 4pc ensuite with jet tub. Two additional large bedrooms round out this home. Many updates, including new plumbing, toilets and taps, pot lights in the main living area, new laminate, all insulated underneath, new deck, 4 new appliances, freshly painted and also has AC. Condo contribution of $175.00 per month.’
Property Type:
RESIDENTIAL MOBILE
Property Sub-Type:
Mobile With Land
Area:
North West
Bedrooms: 3
Full Bathrooms: 2
Total Bathrooms: 2
Year Built: 2003
$529,900
http://www.royallepage.ca/en/property/alberta/fort-mcmurray/305-harpe-way/3368938/mlsfm0063667/
‘Pride of ownership shines through in this home. Upgraded from top to bottom with all brand new flooring , freshly painted through out with warm neutral colours , Brand New S/S Appliances , beautiful back splash in the kitchen that gleams in the natural light and of course , Brand new Granite counter tops that complete the kitchen ever so perfectly. Outside is a massive deck that gets amazing sun all summer and room to build a 24×26 detached garage. This home is Priced to sell , it won’t last long.’
Building Type: Mobile Home
Basement Type: Crawl space
$419,900
http://www.colinhartigan.com/Fort-McMurray-real-estate-stats-news/Fort%20McMurray/All/Page1
‘Fort Mcmurray Real Estate Stats - July 8, 2015: Active, residential real estate prices in Fort Mcmurray had an average listing price of $589310. Currently the most expensive listing in the area is $1650000, while the lowest priced property can be purchased for only $28000. An excellent way to compare real estate prices is by using price per square foot of living space. Fort Mcmurray has a current average price of $353 per square foot. This is for homes that are averaging 3.5 beds, 2.2 bathrooms and 1786 sqft.’
“Condo contribution of $175.00 per month”
Contribution?
Sounds like an HOA fee.
The Trailer Park Boys are livin’ large.
One of those photos has a washer/dryer set that costs around $2500 new.
Put wheels under them and used them for a once shot mortar mixer.
Good grief! I thought I was a big spender when I dropped $600 on a new washer back in 2005.
It still works like a champ. So, I’m keeping it.
Remember when Whirlpool used to be well made?
Those newer high falutin expensive washers can supposedly wash a load in something like 10 minutes. Even if they can, unless the dryer can dry the load in 10 minutes, the washer will be sitting idle, waiting for the dryer to catch up.
Also, they seem to break, a lot. At least that’s what I hear through the grapevine.
Some of the really expensive front-loader models actually take a lot longer than the the older models to do a load. Way more than an hour in most cases. And when I read the reviews, a lot of people complained of mold and mildew issues and suggested always leaving the door open to keep it aired out. And yet people still pay a fortune for them. I really don’t understand.
Mine is a Maytag from ‘87.
Works perfectly, though not a water saving model.
a planted trailer for 500k
im in
Salem, OR Housing Prices Fall 7%
http://www.movoto.com/salem-or/market-trends/
North Bend, WA Housing Prices Fall 15%
http://www.zillow.com/north-bend-wa/home-values/
This is interesting:
http://ftmcmurray.craigslist.ca/search/rea
‘$85000 / 2br - 975ft2 - TURNKEY 2BR 2BTH GRANITE CONDO IN VEGAS (LAS VEGAS)’
‘Calling all Investors!!!!!!! Tenants in place too!!!!!! Gated Community!!!!’
‘You are not going to find a SWEETER deal than this. Really nothing to do but what the USD flow in.’
‘Turnkey 2 BR 2 BTH deluxe first floor condo with beautiful features like, granite countertops in all bathrooms and kitchen, roman Tub, granite shower stall, fridge, stove, hood microwave, insuite washer/dryer, dual sinks in master, A/C, balcony - come with one parking stall.’
‘Complex has beautiful pool and with onsite building manager. Close to the Strip and convenient access to the Freeway, Shops, Malls, Restaurant all in short driving distance.’
‘Tenants already in place paying $750/mo.’
‘Strata Fees: $175/mo’
‘I have a Manager in place if you would like to keep her - just sit back and watch the cashflow in!!! or use it for your Vacation Home.’
‘2 Condos available in this Complex with tenants in place.’
‘Hurry !!!! these deals with not last for all you Investors - this is a no brainer - nothing needs to be done - everything is in place including the tenants - they would like to stay’
http://edmonton.craigslist.ca/reo/5097240014.html
“With a HELOC, though, you can just keep running the credit up.”
And paying me fees.
“It’s like turning your house into an ATM.”
Which I own.
“If you’ve got a house, especially in Toronto with these insane values, you can borrow an incredible amount of money against the house.”
Of which I hold title to.
Life is good because people are smart.
“People are smart.”
Yes.
If you paid your mortgage off, it means you probably did not manage your funds efficiently over the years. It’s as if you had 500,000 dollar bills stuffed in your mattress.
‘The precipitous plunge in Chinese stocks, and Beijing’s struggle to halt the fall, has sent waves of panic through the country’s 90 million-plus retail investors. The mood was fearful, panicked and sometimes hostile, as investors huddled around computer screens, waiting to see whether the latest moves by Chinese authorities to prop up the stock market would do any good.’
“The government has been manipulating the stock market all this time,” one investor who didn’t want to be named told CNBC. “The authorities made us believe that we can make money from a bull market but actually we are falling into an abyss losing most of our life savings.”
‘At a different broker’s office in Beijing, Liang Shuang said he had invested $100,000 into the market and lost at least third of his investment. He said: “The stock market is like a casino. But in a real casino you know the rules of the game.”
‘In the rural village of Nanliu two hours drive outside of Xian, villagers huddled around a mini stock exchange center watching their portfolios shrink with much dismay. Farmer Liu Jianguo said, “I have lost confidence in the market. I’m waiting desperately to see if my stocks will return to the level where I bought them. It looks as though the government has done quite a lot but the impact is limited.”
‘Permitting hundreds of companies to suspend trading had magnified selling in quality stocks as mutual funds scrambled to liquidate positions to meet redemption claims, said Hao Hong, managing director of research and chief strategist at Bank of Communications International.’
“The situation is getting into a negative feedback loop,” he said. “People are selling everything they can, anything that has liquidity. They are afraid later on they won’t be able to get buying orders in the market.”
http://www.cnbc.com/id/102816517
The other day:
‘Rather than seeing China as the land of opportunity, more Chinese have been establishing homes in America, particularly in California, where they account for roughly one-third of foreign homebuyers. Changes in China’s economy, which is slowing and facing major corrections in its stock and property markets, could depress real estate prices and slow the flood of investment. In a U.S. economy already suffering from slow growth, deindustrialization and an ever mounting tsunami of regulation, the loss of stimulus from China could be devastating’
‘Chinese have poured a lot of hot money into Canada’s real estate market in recent years. This has sharply pushed up prices and forced many locals out of the housing market in Canada’s major cities.’
‘In our case, this demand has been further leveraged by Asian and especially Chinese ‘flight to safety — and perhaps profit’ buying of both new and second-hand property. A Melbourne or Sydney property that’s risen from $2.2 million a year ago to $3m today almost hasn’t risen in cost at all for such overseas buyers — while its appeal is significantly greater now than then. Indeed the very slowing of China’s growth rate will spur greater outflows from the Middle Kingdom.”
‘What we don’t seem to understand is that we are embarked on the mother-of-all asset sales. Let’s hope we don’t look back on it as also the mother-of-all fire sales’
http://thehousingbubbleblog.com/?p=9112
It was all fun on the way up.
Key point: It’s hot money. Which means it can turn tail and run when we least expect it to do so.
And there’s nothin’ left but the crying.
Did you think dumb.borrowed(or stolen).money from China was realistic?
Search reduced:
http://calgary.craigslist.ca/search/rea?query=reduced
Motivated:
http://calgary.craigslist.ca/search/rea?query=motivated
Moving:
http://calgary.craigslist.ca/search/rea?query=moving
This is in the last batch:
For Sale By Owner.
Owner occupied. (18 years ) Non smoking home. Will NOT consider any Rent to Own deals. NOT looking to rent out.
Yes you can Stop Renting and Start building Equity in Real Estate. Two couples could get together and buy this home on a 50% - 50% Cost split and have the benefit of owning instead of renting as individuals.
$265000 / 3br - 1400ft2
http://lethbridge.craigslist.ca/reo/5084970618.html
Date stamp on the photos: 7/7/14
Much too early yet as the Home-Debtors are at this stage;
https://goo.gl/yRCqOC
I’ll be happy to have a discussion with them after theyve sunk $100k deeper into their housing crater.
Uh Oh….“Brokers are wary about the high level of HELOCs in Canada.
on hivtv house haters
“tiny homes”
why don’y these folks buy a used travel trailer for 10K
instead a 150 sq ft house for 30,000$ ?????????????????
more sharing broke asz economy evidence
Next-door neighbors have one of those. Actually, it’s a beat-up old camper that rides atop an equally decrepit pickup truck.
They moved in less than a year ago, and if the street-corner “for rent” sign I saw last night is any indication, they’re on the way outta here.
I suspect that financial problems are the reason. Shortly after they moved in, another neighbor told me that they had sold their house to pay off some debts. He didn’t say where those debts came from, and I didn’t ask. Didn’t think that was any of my business.
Any-hoo, I can’t help thinking that the camper may figure prominently in their future housing plans.
A 150 sqft “house” that weighs so much they need a large pick up truck to pull it. How aerodynamic can these things be? On one of the shows they had to pull it at 45mph. We also kept saying “why don’t they just buy an old trailer?” Alot of trailers have “pull outs” which dramatically increase living space. Water/sewage holding tanks etc etc.
Hickory, NC Housing Prices Fall 12%
http://www.movoto.com/hickory-nc/market-trends/
Palm Beach Garden, FL Housing Prices Fall 17%
http://www.movoto.com/palm-beach-gardens-fl/market-trends/
‘Canadian building permits plunged in May after two straight months of hefty gains, as demand to build multifamily residential dwellings, like condominiums, fell in the Toronto region and Calgary, Alberta.’
‘The total value of building permits issued by Canadian municipalities in May fell 14.5% to 6.70 billion Canadian dollars ($5.27 billion), Statistics Canada said.’
‘The bigger-than-expected decline reflects the rough patch the Canadian economy has hit as it deals with the fallout from the swoon in the price of crude oil, Canada’s top export. The economy shrank 0.6% on an annualized basis in the first quarter, and a string of disappointing indicators to date has raised the prospect Canada fell into a recession in the first half of 2015.’
‘ The value of residential permits fell 13.5% in May, to C$3.93 billion, led by a steep 22.9% drop in demand to build multifamily dwellings. The data agency said there were sizable declines in multifamily permits in the greater Toronto area, the country’s largest urban center, and Calgary, the financial nerve center for the now-struggling oil patch and Canada’s fourth-largest city. The May report said permits to build single-family homes dropped 5.5%.’
‘Rating agencies and other international agencies have flagged concerns about overbuilding of condominiums the country’s largest urban centers. The Bank of Canada said last month overvaluation in housing remains a worry.’
http://www.nasdaq.com/article/canada-building-permits-plunge-in-may-on-weak-condo-demand–update-20150708-00479
‘Building permit values in the Calgary region plunged in May as planned residential construction dried up. Permits in the Calgary area were worth $418.5 million for the month — down 35 per cent from April and 32 per cent year-over year, Statistics Canada said Wednesday.’
‘Residential permit values totalled $167.9 million, a decline of 53 per cent from the previous month and down 59 per cent from a year ago. The non-residential sector was down 13 per cent from April, to $250.6 million. However, that was still 23 per cent higher than a year ago.’
‘In Alberta, permits fell by 5.5 per cent from the previous month to $1.3 billion which was also down 8.2 per cent from a year ago.’
http://calgaryherald.com/business/commercial-real-estate/value-of-building-permits-in-the-calgary-region-plunges-in-may
A comment:
‘I’m not sure what else there is besides ‘multi-family dwellings, single-family houses and commercial buildings.’ Birdhouses, perhaps?’
‘The big problem is the huge glut of condos, and the lesser one of large infills. Particularly with the former, it is mostly speculators and not actual residents who ‘own’ (or , rather, put deposits on) them. Our PlanIt Council and Administration, captive to condo and infill builders, actively encouraged this bubble. When reality sinks in–that real people won’t pay half a million for a tiny, no-parking condo, or a million dollars for an infill with no yard–the investors will cut their losses, developers declare bankruptcy, and we will have a real mess, repeated in every major Canadian city. With China’s economy slowing, and the housing sector representing around a third of the Canadian economy, the writing is on the wall, and the implications of all this quite severe.’
“Infill”
Dingbat/Donky Alert
I just remembered; I found a report with some rich Chinese guy walking away from a remote-ish property in Canada. It was 3 maybe 6 months ago. He owed something like 15 million Canadian pesos.
A friend called and told me Dallas TX looks to headed down:
http://www.movoto.com/dallas-tx/market-trends/#city=&time=1Y&metric=Inventory&type=0
Plano even worse:
http://www.movoto.com/plano-tx/market-trends/
Houston, price reductions doubled since December:
http://www.movoto.com/houston-tx/market-trends/#city=&time=1Y&metric=Inventory&type=0