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Now, People Will Tumble

A report from the Globe and Mail on Canada. “Vancouver housing prices continue to decline, throwing cold water on the speculative buying activity of recent years. ‘Vancouver was overdue for a reality check, and thanks to the perfect storm, it’s here. It’s going down fast and people are so stubborn they won’t admit it’s dropping,’ says Vancouver realtor Ian Watt, who provided The Globe and Mail with several recent examples of price drops.”

“Realtor Layla Yang says she just sold a house in the Arbutus area for $1-million less than the asking price. The home at 2569 West 22nd Ave. spent 98 days on the market with a listing price of $5.75-million. It sold on Feb. 25 for $4.75-million. She says it’s a good time to buy a $5-million house because that same house used to be valued at $7-million.”

“Although houses are seeing the biggest drops, there are drops in the condo market, too. A 620-sq.-ft. one-bedroom unit downtown at 938 Smithe St., on the 14th floor sold for $818,000 in January, 2018. A same size one-bedroom on the 9th floor in the same building sold 11 months later for $650,000.”

“On the west side of the city, at 2149 W. 35th Avenue, in Quilchena, someone bought the character house on a large 66-foot-by-130-foot lot in 2014 for $3.15-million. It was listed several times in 2018, as high as $5.188-million. It finally sold in February this year for $2.88-million – lower than the purchase price five years ago, and $1-million less than the assessed value.”

“Again, there are many examples. Mr. Watt says it’s a bigger drop than the market saw in 2008 and 2009, with the worldwide economic downturn that only grazed the Vancouver market, causing a minor setback.”

“‘The only reason Vancouver took off is because of Chinese money and speculation,’ Mr. Watt says. ‘And a lot of people bought in the last few years expecting to make two, three, four hundred thousand. But now they are losing two, three, four hundred thousand. And they just can’t comprehend it, because Vancouver has never had a loss like this.'”

“‘In 2008 people weren’t flipping places to the extent they are now … people are so highly leveraged, because they bought cars, they bought this, they bought that. Now, people will tumble. We are going to see huge changes in Vancouver like we’ve never seen before, he said.”

The Vancouver Sun. “Homebuyers appear to be the ones with power in the current market, according to the latest figures from the Real Estate Board of Greater Vancouver. In total, there are currently 11,590 homes listed for sale across Metro Vancouver — an almost 50-per-cent increase compared to a year ago.”

“‘For much of the past four years, we’ve been in a sellers’ market. Conditions have shifted over the last 12 months to favour buyers, particularly in the detached home market,’ said REBGV president Phil Moore.”

The Financial Post. “The local real estate board says the benchmark price of a detached home in Metro Vancouver fell nearly 10 per cent year over year as more sellers listed properties, but house hunters continued to take their time in February.”

“The Real Estate Board of Greater Vancouver says nearly 28 per cent fewer detached properties sold last month compared with February 2018, and the benchmark price dropped 9.7 per cent to $1,443,100.”

“The board says sales for apartments fell nearly 36 per cent in February 2019 compared with the same month in 2018 and townhome sales declined nearly 31 per cent.”

This Post Has 30 Comments
  1. Lot’s of statistics below:

    https://www.cbc.ca/news/canada/british-columbia/metro-vancouver-real-estate-home-sales-february-1.5041727

    https://www.burnabynow.com/real-estate/metro-vancouver-home-sales-down-on-annual-basis-but-up-from-january-1.23652483

    https://globalnews.ca/news/5020704/lower-mainland-real-estate-cooldown/

    ‘Greater Vancouver real estate prices are in price discovery mode. Sales are falling to the lowest levels in a decade, as more buyers balk at sky high price tags. Meanwhile, more sellers are listing their homes for sale. Combine that with the increasing number of distressed homeowners in the high end, and it’s shaping up to be an interesting start to the year.’

    https://betterdwelling.com/city/vancouver/greater-vancouver-real-estate-sees-biggest-price-drop-and-fewest-sales-since-2009/

    1. https://www.quora.com/Where-does-the-quote-May-you-live-in-interesting-times-come-from

      Where does the quote “May you live in interesting times” come from?

      It was first used by Sir Austen Chamberlain in 1936, and later popularized through a speech by Robert F Kennedy in 1966. The phrase “live in interesting times” dates at least to the late 19th century. The “Chinese curse” element was likely added by Sir Chamberlain as an (effective) embellishment. [Unlike the Vancouver property bubble] There is no evidence of a Chinese origin.

      Interesting times indeed.

  2. Wasn’t someone saying this couldn’t happen just yesterday?

    ‘Mr. Watt says it’s a bigger drop than the market saw in 2008 and 2009’

      1. Mell Watt is gone. Right now FHFA is being led by Joseph M. Otting, Acting* Director. He’s a banking shill.

        https://www.fhfa.gov/AboutUs/Pages/Leadership-Organization.aspx

        ——————–
        *”Acting” is a government-wide term for a temp position while the official person is out of office. The term is used for everybody from the lowest level boss taking a sick day, to someone filling in at the head of an agency while a new head is found.

  3. She says it’s a good time to buy a $5-million house because that same house used to be valued at $7-million.

    It’s also a great time to buy a used Mercedes S Class for 80k because it used to be valued at 120k. It can only go up from here.

    1. “‘The only reason Vancouver took off is because of Chinese money and speculation,’ Mr. Watt says. ‘And a lot of people bought in the last few years expecting to make two, three, four hundred thousand. But now they are losing two, three, four hundred thousand. And they just can’t comprehend it, because Vancouver has never had a loss like this.’”

      Seems like losses are much greater. 200k to 400k is just the transactions, fees, and taxes cost

      1. I’m waiting for China-bashing to become much more common by both US and Canadian citizenry as the Everything Bubble continues to deflate, much like what we had happen in the late 80s with Japan-bashing, as they bought up everything in HI, CA, etc.

        All that funny-money rolling in and driving up asset prices absolutely kills the majority of the populace’s finances, as they’ve been dumbed down by the education-indoctrination-system and the MSM, as they clamor for FOMO-stuffs with their bidding wars.

        With such a wealth of information being available via the interwebz I’m constantly astounded by how badly educated and aware the majority of people around me still are. I still have a coworker trading bitcoin, another looking at a house purchase, etc. Nobody can see how perilously perched we are, or how far to fall we really have. Scary times, these.

    2. I’m wondering when new and used vehicle prices are going to tank in the US. I keep expecting it but for some reason they’re holding up.

    3. Cars depreciate, dependably. Houses don’t. Or more accurately, the land doesn’t depreciate. Not sure about the house itself. That’s why tiny houses are such a crock. They’ll depreciate like an RV.

      1. The difference between cars and houses is that many Americans know that cars depreciate, so no one in their right mind buys a vehicle as an “investment”. But Americans buying a house have been swindled because the bubble makes it appear that they are investments and so they think that houses do not depreciate (the bubble hides the depreciation). Houses depreciate about 1% per year historically.

      2. Except the fact that used car and rv prices ROSE over the course of the past 8 years. Further, tiny houses, while constructed on a trailer, are actually built to exactly the same specs as a regular house (2×4 construction, regular siding and roofing, etc.), so they will deteriorate like a regular house, not an RV.

        1. Used car prices rose, but you are comparing used cars in the aggregate. When adjusting for inflation, even used car prices fell.

          But what I am stating is much more benign.I am merely stating what everyone knows and accepts: a brand new car depreciates fairly quickly in the first 4 years (the most in year 1) and then pretty steadily until it hits about 100k miles. But for houses, very few people think that new homes depreciate, but it is nevertheless true. The depreciation is slower for a home than a house because of imputed rents, but it is still depreciation.

          What has obscured this depreciation is the weird mix of monetary policy, mania, and distorted markets for housing, not to mention zoning regulations, NIMBYism, and foreign capital flows.

  4. Tesla’s Elon Musk, facing contempt charges, says semi-secret meeting was a mistake

    “Tesla Chief Executive Elon Musk, who is scheduled to defend himself Monday against contempt charges in a federal district court, may find his defense complicated by a semi-secret teleconference Tesla held Thursday with a small number of investors and members of the media.”

    “During the call, in which a cheaper version of the Model 3 electric sedan was announced, Musk said the company would be closing its retail stores and that it would not, as originally forecast, post a profit for the current quarter. Participants were told not to record the proceedings, and after the meeting Tesla said a recording or transcript of the meeting would not be made available to the media or the general public.”

    “Short sellers and Tesla critics immediately claimed the meeting violated U.S. Securities and Exchange Commission rules governing disclosure of material information.”

    “An analyst at Deutsche Bank said Tesla had shared information with him about Model 3 profit margins, even though Musk refused to answer a question about margins on the media conference call.”

    “The SEC said Musk failed to have a Feb. 19 tweet approved by a company attorney as required. The tweet claimed Tesla would make ‘around 500,000 cars this year.’ The statement was not true, and the Bel-Air billionaire corrected it a few hours later, cutting his forecast by 100,000 cars.”

    “The original fraud charges stemmed from Musk’s claim, delivered in August by tweet, that funding had been secured for an $80-billion deal to take Tesla private. No such deal had been struck.”

    “Meanwhile, Tesla’s largest outside investor, asset management firm Baillie Gifford, told Barron’s it’s OK if Musk steps down as CEO. ‘We wouldn’t be against him having a different role,’ said James Anderson, head of global equities for Baillie Gifford. ‘I don’t think he needs to be CEO.'”

    1. And I am STILL waiting for an electric car that I can take on a road trip to the beach on a whim without planning my stops for gas or spending less than 15 minutes refueling.

      1. Porsche Taycan EV is an 800 volt system. It can charge 60 miles in 4 minutes, or 250 in miles in 15 minutes. This is 2x faster than Tesla’s superchargers, although Tesla is announcing supercharger V3 tonight, so I expect they will get close to what Porsche is offering.

        1. Charge where?
          Charging this fast requires a very large or high voltage electrical service outlet.

          1. The thinner cables have me wondering whether the cooling isn’t due to heat generated due to resistance in the cable, but whether they are using some sort of superconductor with zero resistance as along as they keep the temp low enough? It would be an interesting gimmick for people to ooh and ahh over.

          2. some sort of superconductor

            Perhaps you imagine too much. More likely just trying to save money on copper. The delicate Tesla driver might get burned touching the hot cable is the gauge is too small.

            The math about a 5% improvement in efficiency meaning 20% more people served/$ cost made me laugh.

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