Eerily Quiet Compared To The Buying Frenzy
The Calgary Herald reports from Canada. “Buyers who turned to the city’s resale market for a single-family home last month saw more than $17,000 in savings, says the Calgary Real Estate Board. The benchmark price on single-family homes in July was $502,300. That’s a 3.5 per cent dip from the same month in 2015 when it was $520,000, says CREB. The setback in prices was joined by a nine per cent cool down in sales, easing to 1,108 deals last month from 1,220 a year ago.”
“‘To buyers and sellers that have been paying attention to the housing market in Calgary and surrounding areas, it should come as no surprise that we continue to see a slowdown in sales activity,’ said CREB’s president Cliff Stevenson. ‘Buyers are expecting further declines in sold prices, and sellers are adjusting to softer demand with price decreases. When these expectations intersect, we’re seeing sales activity in the market, but not at the level realized over the last several years.’”
The Calgary Sun. “Canada’s biggest residential landlord said Friday vacancies at its apartments in Alberta are on the rise as it lowers rents and offers incentives to attract tenants — and it doesn’t expect conditions will improve much for the rest of the year. Calgary-based Boardwalk Real Estate Investment Trust, which owns 33,000 rental units in four provinces, said there are signs of weakness in Alberta’s rental market.”
“In July, the landlord saw a spike in the number of tenants who gave late notice to move out, which suggests some instability in the lives of renters who may be suffering from job losses, said Rob Geremia, the company’s president. ‘That really got us thinking, and we felt our original assumption of beginning to see strength in (the second half of the year) has to be pushed out farther because we are not seeing the financial numbers to back that up,’ Geremia said.”
From CKNW AM 980. “Still more indication we’re in the grips of a slow down in the economy. On the heels of provincial numbers that developers are scaling back projects, specific numbers on what’s happening in metro Edmonton show in April May and June of this year, the number and value of building permits are off almost by fifty percent.”
“The reason for the drop, City of Edmonton economist John Rose said the break neck pace couldn’t possibly keep going over what we saw in the last two years. ‘We saw a real run up in apartments and condo buildings in the Edmonton region, in 2014-2015 so yes the numbers did have to come down,’ he said. ‘However I would point out the building permits numbers are down substantially and that means the slow down in the construction sector, particularly on the residential side will continue into 2017.’”
“The good news out of that, if there is good news, Rose said once things start to pick up, there won’t be an over supply of product, and a resulting price crash. ‘There’s a lot concerns, particularly around Toronto and Vancouver, around where their housing market is going and are they in a bubble? Is there an over-build in condos particularly in Toronto. We’re not in that situation at all.’”
The Langley Advance. “July saw home price increases stall in Langley, though they remain shockingly high compared to last year. Sales in Langley dropped sharply across all categories of housing. While Langley saw largely flat prices between June and July, the Fraser Valley as a whole actually saw a decline in the price of detached houses. Parts of Surrey saw steeper declines in both sales and prices than Langley.”
“Wiebe said that the slowdown in sales will be good for the market. ‘Additional inventory will help drive us towards a more balanced environment for consumers and remove some of the upward pressure on prices we’ve been seeing,’ Wiebe said. The provincial government recently imposed a 15 per cent tax on purchases of homes by foreign nationals, which caused a scramble at the start of August to finalize sales. The change was announced less than a week before the end of July.”
The North Shore News. “Local real estate agents say they know of several multi-million-dollar real estate deals collapsing and predict the hot North Shore housing market will cool slightly in the wake of a new 15-per cent provincial tax on property purchased by foreign buyers. ‘It’s one of the most shocking events that’s ever arrived in our industry,’ said Brent Eilers, a longtime West Vancouver Realtor with Re/Max. ‘Nobody really knows how it will unfold.’”
“Eilers said the new foreign buyers’ tax is bound to have an impact, particularly in markets like West Vancouver and North Vancouver, which have been ‘incredibly dependent on offshore money or new money’ that’s come from sales to foreign buyers in other areas of the Lower Mainland. Eilers said he knows of several ’sizable purchases’ where the real estate deals may fall apart. ‘There was a $13-million house in West Van that just got nailed with it,’ he said. ‘It’s hard to see in some of these transactions there’s a clear path to the finish line.’”
“Realtor Steve Taylor of MacDonald Realty in West Vancouver recently sold a house for a retired couple in Ambleside to buyers from mainland China for about $2.5 million. But the deal is now subject to the new tax, adding a significant cost, which the buyers say they don’t have the money for. Meanwhile, the West Van couple has already bought another home on the North Shore. Until the closing date, said Taylor, ‘They have to sit and hope for the best.’”
“Since the new tax went into place, the housing market on the North Shore – particularly for detached homes – has been eerily quiet compared to the buying frenzy and bidding wars seen in the spring. The number of sales for detached homes in July were down 45 per cent over last year and down 15 per cent in North Vancouver for the same time period, said Eilers. The 44 West Vancouver sales in July 2016 contrast with the 74 sales in 2015 and the 153 sales there in February 2016.”
“August has shown an even more pronounced dropping off. The average number of August sales in West Van is about 60. Last year there were 80 sales for the month. So far this month, there have been two.”
From The Tyee. “And any claim that the BC Liberals’ surprise move to impose a 15 per cent tax on foreign nationals buying residential property will make homes affordable for average buyers is a cruel joke. That horse has truly left the barn. Median detached housing prices would have to be cut in half from their current $1.58 million to even begin to be affordable, using the term almost jokingly – for some upper-middle to higher income families. Everyone else is out of luck.”
“And if the market did collapse and prices fell 50 per cent, we would be in a economic crisis and no one would be buying houses anyway – they would be hoarding canned goods and water.”
“How bad is Vancouver’s housing affordability crisis? Incredibly, unbelievably awful, with the price of detached homes up 38 per cent in one year. One example: Only 10 years ago, just 11 per cent of Vancouver detached homes were valued at $1 million or more – when the city was already Canada’s most expensive. Today more than 90 per cent of Vancouver detached houses are worth more than $1 million.”
“Royal LePage CEO Phil Soper argues that Vancouver’s extreme housing price hikes are unsustainable. ‘You have severe affordability issues in Vancouver. It has become a serious public-policy issue, so it’s not healthy,’ he said in an interview. ‘Prices are moving upward at an irrational rate.’ True. And for some personal perspective, let me tell you about one modest home on West 15th Avenue in Kitsilano that I’m very familiar with – because we used to live there.”
“Friends bought it in 1986 for $180,000 and sold in 1992 for $380,000, when we rented it. The new owner eventually moved in, did some renovations and sold it for about $500,000 a few years later. Its BC Assessment value in July 2015 was $1.96 million – and a nearby very similar house sold recently for $2.5 million! That means the value of our old Vancouver home is 10 times greater than it was 30 years ago, with most of the increase in the last decade.”
“And so, as the price of that house and the homes across the region show, the horse has not just left the barn – it has left the country.”
‘And if the market did collapse and prices fell 50 per cent, we would be in a economic crisis’
“A bridge that relies on wealth effects, you better hope that you got enough growth to justify the asset price increase which created the wealth effect in the first place.” - Raghuram Rajan
Apparently it is no big deal to politicians and pundits if home prices climb so high that a significant number of people have to live in the street. By contrast, home prices dropping to dramatically more affordable levels would be economic Armageddon.
So you’re saying the market never clears professor?
Ben Jones:“A bridge that relies on wealth effects, you better hope that you got enough growth to justify the asset price increase which created the wealth effect in the first place.” - Raghuram Rajan
I think it’s this kind of truthiness that got him fired. He was, by all accounts, a “rock star” central bank chief right up till the putsch. From what I gathered, various oligarchs had their daggers out for him because his policies were actually allowing value to accrue to the common folk, by restraining inflation and other mechanisms.
Which brings up another point: Why would oligarchs have their knives out for a central bank chief? Because he’s not allowing them to become wealthy quickly enough? What does that say about the central bank as a wealth redistribution mechanism?
‘In July, the landlord saw a spike in the number of tenants who gave late notice to move out, which suggests some instability in the lives of renters who may be suffering from job losses, said Rob Geremia, the company’s president. ‘That really got us thinking, and we felt our original assumption of beginning to see strength in (the second half of the year) has to be pushed out farther because we are not seeing the financial numbers to back that up’
If you read the article you’ll see Rob has been picking up dimes in front of a steam roller.
This picture is incomplete without a house in the background.
Heard on a real estate focused radio show on bloomberg yesterday:
First four months of 2016 had the lowest percentage of all cash buyers for RE since 2008. I believe they said the peak of cash buyers as a percentage of the total market was 2011.
This zombie market keeps on taking head shots - a few more and it will be down for the count.
“And if the market did collapse and prices fell 50 per cent, we would be in a economic crisis and no one would be buying houses anyway – they would be hoarding canned goods and water.”
The value of your cash just doubled yet these drama queens and dimwits claim it’s the end of the world.
Prices in Vancouver just shot up 38% YOY a couple of months ago. If this collapses they will have a severe recession. I was thinking about how Canada and Australia both claim they never had a bubble but their house prices took a hit in the US great financial crisis (GFC). That was a credit event. What kept their bubbles going was trillions in QE and a commodity boom created by China.
Recessions have long lost their true definition. In Canada the recession will come when millions of people have to find a way to make a living doing something other than buying and selling each other houses. Credit will be restricted and when spending halts because of foreclosures/job loss.
It has become the authorities job to prop up asset prices for their own good. It is not capitalism.
Is it socialism? Is it done for the best interest of the “economy”, right?
They can always trade gold mining stocks back and forth.
Boulder, CO Real Estate and Homes for Sale, 2,500 Homes
http://www.realtor.com/realestateandhomes-search/Boulder_CO/radius-5
Boulder, CO Price Reduced Homes for Sale, 550 Homes
http://www.realtor.com/realestateandhomes-search/Boulder_CO/radius-5/show-price-reduced
22% of all Boulder, CO sellers slashed their price at least once.
22% is one of the lowest reduction ratios numbers ever posted
Yes but that’s up from 4% last year.
If you see a realtor in the neighborhood, lock your doors and call the authorities immediately.
It is their job to get u to pay more.
And it’s your patriotic duty to borrow money to pay for things you can’t afford.
#matchmadeinheaven
“But the deal is now subject to the new tax, adding a significant cost, which the buyers say they don’t have the money for. Meanwhile, the West Van couple has already bought another home on the North Shore.”
Oops.
Hey, Blue, how’s the summer going up there on the inland sea? What’s the weather been like, are there many people out on the water, how’s the real estate market?
:14
https://www.youtube.com/watch?v=MtIK2NTHR0o - 377k -
OK, that was sort of bitterly funny.
‘RBC’s Kurt Hallead and Benjamin Owens ask if offshore drillers like Transocean (RIG), Rowan (RDC), Diamond Offshore Drilling (DO), Noble (NE) and Atwood Oceanics (ATW) are “hitting bottom or running aground?”’
‘Too early to get involved in Offshore Drillers, in our view…Supply overhang will take years to overcome; ~110 additional retirements needed. Drillers will need to continue the current pace of rig retirements and retire an additional ~110 rigs by 2020 to balance the market, in our view. The floater market still needs rig retirements to balance supply/demand. We would expect to see an additional ~70 over the next four years, bringing the total since the peak to >120. The jackup supply picture is equally challenging. With ~120 newbuild jackups still in the pipeline, we estimate that the jackup market will need ~40 additional retirements over the next four years to reach mid-cycle equilibrium by 2020.’
From the comments:
‘Oil bull wrote: by the time this jokers jump back on the bullish bandwagon you will have missed the rally of the century’
‘Stabilizer wrote: When the oil companies stopped giving the drilling contractors new-build contracts that would pay off the rigs, they built 60% overcapacity on speculation (if we build it, they will hire it?). The 100% capacity needed at the time would have fallen short of demand if rigs over 30 years old were scrapped. Day rates would have remained high - well highER anyway. Put drilling contractor CEOs with buggy whip CEOs, you simply can’t read the future. Buggy Whip CEOs couldn’t see buggy use declining in a growing population. Drilling CEOs couldn’t see 60% over capacity as being slightly difficult for the market to absorb.’
‘the number and value of building permits are off almost by fifty percent.The reason for the drop, City of Edmonton economist John Rose said the break neck pace couldn’t possibly keep going over what we saw in the last two years. ‘We saw a real run up in apartments and condo buildings in the Edmonton region, in 2014-2015 so yes the numbers did have to come down,’ he said.’
Has anyone else noticed a lot of overcapacity this, shortage that, stuff going on? And it’s mis-matched. In Brazil they are running the biggest reality show ever. Thousands of luxury condos sit empty while millions live in slums. London’s skyline has been permanently scarred with canyons of dark towers while renters have almost all their income sucked out of their pockets. Same with Manhattan. We’ve got gluts of steel, mines being abandoned all over the world, and people living ten to a cube in Hong Kong.
These economies have been severely distorted. We can’t pay CEO’s enough Yellen bucks to make enormous errors in how many drilling rigs to build. Farmland is plummeting, everywhere. There is so much “money” floating around companies have become stock buy back machines instead of profit/employment/producing entities. I read yesterday there’s a “bubble” in heavy machinery. Well there goes several factories and the towns they support. The havoc is too long to list.
I think farmland will recover first as folks continue to eat
There’s already a surplus of food.
are we gonna have rigged markets from here on out?
As long as the sheeple keep voting for more of the same, yes.
Good question. I guess that depends on if the global power structure stays in place. It might, for a while, but I don’t see it lasting beyond the next 10 years, maybe less. If electronic communications get knocked out on a widespread and prolonged basis, there’s nothing much to rig, anyway. Except travelling medicine shows.
Rigged is the new normal.
Normal market is foreign to central planners.
“are we gonna have rigged markets from here on out?”
The Elite - YouTube
https://www.youtube.com/watch?v=ydIjNImwx40 - 210k -
A quarter billion dollar bribing of clintons in less than 16 yrs.
This is a bribery any way you look at it. Nobody’s paying them money to listen to some 2nd rated speech writer’s speech.
‘It is no coincidence that the Canadian dollar has depreciated to 1.30 in the past month. Crude oil prices, pressured by a global glut, epic gasoline inventories and Saudi Arabia’s refusal to play the role of Opec’s “swing producer”, are down 20 per cent from their recent $50 peak. Above all, the loonie was a classic short in the currency market after the Canadian labour market contracted for two successive months while suffering its largest ever trade deficit in June 2016.’
‘The divergence in relative central bank policies between Washington DC and Ottawa could not be more dramatic. The awful jobs, trade and crude oil realities will force the Bank of Canada into another monetary ease, a scenario I do not think is fully priced into the current foreign exchange rate.’
‘Ironically, the Canadian economy has weakened at a time when the US economy has strengthened, a violation of past cycles. Stephen Poloz knows that the Canadian dollar needs to fall even more to give Canadian manufacturing exports a competitive advantage in global markets. With an unemployment rate of 6.9 per cent, Canada’s economic performance lags the US, whose jobless rate is at 4.8 per cent.’
‘Canada’s job creation rate in 2016 is the lowest since the mid 1970’s, excluding recessions. It is ominous that July’s job losses were due to contractions in trade, construction and even the Federal government payrolls. Of course, the summer malaise in the Canadian economy was amplified by the wildfires that engulfed the oil town of Fort McMurray in Alberta. This resulted in the 15% drop in Canadian refinery output. The Alberta wildfires mean below trend economic growth and to borrow a Latin term from Econ 101, ceteris paribus, mean a more dovish monetary and fiscal stance in Canada.’
‘It is probable that Canadian economic growth in the next six months could be barely one per cent and the Federal fiscal deficit will deteriorate. With the Canadian consumer overleveraged by mortgage debt, the burden of adjustment will fall on the Bank of Canada and the Canadian dollar. There is a palpable risk of a housing bubble in Vancouver and Toronto, that only accentuates my bearish strategy call on the loonie.’
‘Former and current college students calling themselves the “ Corinthian 100” say they are on a debt strike and refuse to pay back their student loans. The name comes from Corinthian Colleges Inc., which operated the for-profit Everest College, Herald College and WyoTech schools before agreeing last summer to sell or close its 100- plus campuses. Several of the loan recipients involved with the strike are meeting Tuesday with officials from the Consumer Financial Protection Bureau.’
‘The emergence of the Corinthian 100 heralded the bursting of the Higher Education Trillion Dollar Debt Bubble, and I said so at the time. My thinking was that once a group of students found some wiggle room to cast doubt that the education ‘contract’ had been fulfilled, others would soon find their own reasons. This would lead to an unraveling of the increase in default status of the entire student loan structure.’
‘At least with the sub-prime mess, there was something for collateral, a home. The student loan program offers no such assurance. Worse, who would loan tens of thousands of dollars to a teenager with no credit history? And of course there is no assurance the students would complete the “education” or that the student was pursuing major that would connect to a job that would allow loan re-payment. But best of all from the viewpoint of the university, the school had no liability or responsibility to make sure that happened.’
‘The student gets the debt, the school gets the money, and well, good luck on re-paying the loan. Credit Suisse has already warned of a “cottage industry of attorneys pouring over advertising by colleges.”
‘The response by President Brian Johnson of Tuskegee University tells us a lot about the mindset of universities. Tuskegee graduates only 45 percent of those enrolled, and that’s after six years. And so the president asks “are we only going to take students that can graduate? The mission is important but so is survival.”
‘In other words, his school has to admit students it knows won’t finish just to pay the now bloated overhead, i.e, to survive.’
and the taxpayers get boned
At least with the sub-prime mess, there was something for collateral, a home.
the collateral is the degree…..turn it back in cancel it and the debt. and jobs that require a 4 year degree you cannot apply for , or sue for discrimination, or wrongful termination if you lied about its validity.
i really dont think that many will do this, only those who throw in the towel and say i will never ever get a job with my degree so i might as well make a career at starhucks.
Don’t know ’bout others, but those Zillow sale pics with photoshop tweaked grass color of astroturf and pool water in blues I’ve never seen in real life make my skin crawl.
“Step on the Gas” is one funny four minute public service announcement.
No. I’m not saying the L.A. Riots or Milwaukee’s problems are funny, just the delivery of the public service announcement.
Step on the Gas (L.A. Riots) - YouTube
https://www.youtube.com/watch?v=omcMKJEb6LI - 284k -
Video: ‘Black Lives Matter’ Rioters Target Whites For Beat Downs
Paul Joseph Watson - August 14, 2016 2709 Comments
Video footage shows violent mobs of ‘Black Lives Matter’ rioters targeting white people for brutal beat downs during last night’s unrest in Milwaukee.
The clip shows angry rioters chanting “black power!” before asking “is they white?” as cars slowly drive past.
“Yeah they white!” states someone else, prompting the mob to run towards the vehicle.
“Yeah they white, get their ass!” screams another.
“Hey they beatin’ up every white person!” exclaims another rioter.
“He white – beat his head – bitch!” he adds.
The footage appears to show the mob attacking cars and trying to drag out the drivers.
The footage then cuts to an upper floor window before the person shooting the video states, “I think they just beat some white bitch ass for no reason – they bust open the window.”
Local reporters were also targeted for violent assaults, including a Milwaukee Journal-Sentinel reporter, who was “thrown to the ground and punched”.
WTMJ was forced to pull its reporters from the ground altogether because of violent threats from the mob.
http://www.infowars.com/video-black-lives-matter-rioters-target-whites-for-beat-downs/ - 196k - Cached - Similar pages
4 hours ago
bama fixed that
Hilary will do the same for hetero marriage- she hasn’t fckd in 20 years
Hooligans - YouTube
https://www.youtube.com/watch?v=Kz-LcBfjRRo - 264k -
is pretty good too
85
Landed in Greece a couple of days back. First impression’s in this resort, lots of abandoned part built shops and more boarded up one’s. Most of the restaurant’s are struggling and they need more tourist’s. On plus side people are friendly and weather is good.
They need tourists with $$$ to spend. Budapest was crawling with tourists … young, deadbeat backpackers. Restaurants were mostly empty while the streets were teeming with tourists. There was a supermarket chain called Prima. Smallish stores, but plenty of them. Those were busy. I bought a bottle of Tokaji wine in one of them.
Well, it would help if anyone actually paid some taxes there.
“US Land Prices To Extend Decline Into 2017″
http://www.agrimoney.com/news/us-land-prices-to-extend-decline-into-2017–9833.html
” All this feeds on itself, but what’s surprising is that few question how the above factors contribute to higher asset prices. They fail to recognize that if there were no adverse consequences low or negative interest rates, massive liquidity injections and central banks buying stocks, these would have become permanent and continuous monetary-policy strategies decades ago.“
http://www.zerohedge.com/news/2016-08-14/somethings-gotta-give-ttid-tina-tnsth
Hello everyone..
I am a long time follower of this blog and read all the comments religiously. I find it a good source of learning.
First time time posting. I wanted to see if anyone can provide an empirically driven opinion.
I missed the boat buying in 2010/2011. Had a nice down saved, but lost my job and would not be able to get a mortgage. I have been reading, researching, analyzing, and waiting for the right time to buy. I feel like the prices have definitely stopped rising, and in some areas are actually falling.
Variables:
- Have 20% down (maybe more for a right opportunity)
- 800 FICO
- Stable job with six low six digit income
- Looking in San Fernando Valley, CA (Sherman Oaks, Studio City, Encino, Tarzana, Woodland Hills - only for a house, not condo/town house)
- Would like to have kids, so school district in important
Given the above variables, I assume the recommendation would be to wait a little until the prices drop. How long is a while. When should I be ready to jump in? End of 2017, early 2018?
I don’t mind paying higher interest rate but buying at a lower price. I can always refinance down the line, if need be. Don’t want to miss the boat again. I think if I miss it this time, I am going to be priced out of anything reasonable until like 2015/2016.
Any advise would be very much appreciated.
Thank you.
Minor correction…
priced out until 2025/2026. If LA wins the bid for the 2024 Olympics, much, much longer.
LOWBALL
Why buy it when you can rent it for half the monthly cost? By later after prices crater for 70% less.
Is buying at 3.25 for 30 years with only 5% down an incentive? There are also tax write-offs. You could lock in hundreds of thousands of dollars for what it costs to rent. There is more to consider because everyone is different. I’m hoping for a 20% drop but if instead a 30% increase comes and interest rates raise to the mid 4%-5% level these prices might look pretty good. A lot depends on the area of the country and how much this housing market can still ‘run’. What am I missing for someone that knows that apartment and condo living ’suck’.
No.
If you don’t like condos or apartments, rent a house for half the monthly cost instead.
I don’t think a drop of 70% is realistic. I think 30% is realistic and 20% much more likely.
I am currently renting and am paying 50% less than if I were to buy at today’s prices, but if the price drops 30%, including the tax deductions, having control of my own property, and slowly building equity over time (not for a flip) sounds more appealing than a life long renter.
Remember… Current asking prices of resale housing are 200% higher than long-term trend. A70% decline simply puts prices back to the long-term trend.
or you can move here very very cheap……….Ferguson home values are plummeting, and residents are feeling the pain
Down nearly 50 percent since Michael Brown’s death, new data show.
http://fusion.net/story/104184/ferguson-home-values-are-plummeting-and-residents-are-feeling-the-pain/
Thank you for the suggestion, but I think I’ll pass
I cannot move out of the greater LA area. Encino and Woodland Hills would be the furthest I can move and still be able to commute within one hour.
Buy during the next recession, after it’s announced and everyone but yourself is in a state of collective financial panic, provided you remain financially fit and employed, with ample financial resources to fund the purchase.
Otherwise don’t buy.
It really is that simple!
I agree, but it’s kind of hard to time the next recession.
I am guessing end of 2017 heading into 2018.
Any educated guesses?
What does it matter when time is on your side.