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We’re In A Bit Of A Real-Estate Crisis, Having To Sell At A Loss

A report from Canadian Live News. “Vancouver condo prices continue to be the highest in Canada despite decreases over the last year, according to a nationwide study by realtor Century 21. That’s not surprising, but the price-per-square-foot calculations Century 21 cited in its press release sit higher than what some other realtors are starting to discuss in a fast-changing market.”

“Century 21’s annual price-per-square-foot survey pegs downtown Vancouver condos as some of the most expensive properties in the country at $1,345 per square foot. The firm clarifies this number is based on prices between Jan. 1 and June 30 of this year, so it can compare with last year’s report, meaning ‘price changes since then are not reflected.'”

“Other realtors like Ian Watt of Sutton Group West Coast Realty in Vancouver are focused on the change in more recent price-per-square-foot numbers as well as other indicators.”

“Looking at October figures crunched by SnapStats, Watt said median prices for downtown Vancouver condos ‘decreased 11 per cent from September 2018 and 21 per cent from the peak of the market in January 2018. The dollar per square foot also decreased from $1,043 (in September) to $979 (in October), which is a six-per-cent drop.'”

”There were 143 sales (six per day) in downtown Vancouver in October, which was up 13 per cent from the previous month, but down 33 per cent from October 2017, and the units that are being sold are selling five per cent off the asking price,’ Watt said.”

“Vancouver realtor Steve Saretsky writes in his October report to clients that Vancouver condo sales fell ’28 per cent year-on-year to their lowest total since October 2012′ and because of this, ‘listings are beginning to stagnate. This has allowed inventory to build rather quickly, jumping 70 per cent from the same month last year.'”

“Watt agreed that inventory is growing steadily. Active listings for downtown Vancouver condos in October, at 836, were up 11 per cent from the month before and up 93 per cent from a year before when there were 433.”

“‘Whenever you read these press releases made by real estate companies or real estate boards, please keep in mind what businesses they are in,’ said Watt. ‘The more attractive they spin the statistics, the more money they can make.'”

“Watt predicts that by March 2019, ‘we will have well over 1,000 active listings’ in the downtown Vancouver condo market or, in other words, ‘a lot of inventory creating further downward pressure on pricing.'”

From Domain News in Australia. “Property market watchers warned that Sydney was in a ‘two-speed market’ at the weekend as vendors in the outer-western suburbs struggled to find buyers. On Saturday, Domain data revealed a weekend auction clearance rate of 44 per cent from 334 reported auctions.”

“It was the fourth consecutive week the rate was below 50 per cent. More vendors were also not proceeding with booked auctions, with 170 properties out of a total auction list of 643 homes on Saturday withdrawn.”

“The Property Sellers widely promoted the $1.25 million guide price of a renovated art-deco home with two bedrooms in Marrickville, but the property received no bids at auction. Selling agent Jonathan Ford said his agency had been ‘really transparent’ about the expectations for 38 Despointes Street, but potential buyers held back.”

“He said there was not much buoyancy in the inner-west’s two-bedroom house segment, and the ‘the last good strong results’ for the wider market were in June.”

“For vendors, the market is entering a high-pressure phase. Historically, more properties are listed for sale in November and December compared to early spring. This can ratchet up the pressure on sellers to accept lower-level offers because, if they don’t sell before Christmas, chances are they will not negotiate a transaction of their property until late February or March.”

“Buyer’s agent Paul Osborne said the east coast capitals were ‘at the end of the easy growth across the board’ notched up over much of the past 20 years, because official interest rates couldn’t go any lower. ‘Credit availability is difficult and getting worse,’ he said. ‘You’ve also got the psychological element dripping through to the whole market.'”

From ABC News in Australia. “Using a combination of her life savings and a bank loan, Penelope Paton, then 26, made the biggest purchase of her life. But less than three years later, Ms Paton and her partner Markus Tumuls, 29, face the prospect of losing up to $160,000 in value off their home.”

“‘I bought my first home in Palmerston in 2015 for $520,000,’ Ms Paton said. ‘I saved up a lot of money for my deposit and it’s all gone, essentially.'”

“Recent figures from the NT Real Estate Institute show Darwin’s house prices are now the lowest they have been since 2009, with the median house price slipping to below $500,000 this month. The Territory’s minute population growth and the end of the INPEX construction phase has cut more than a billion dollars worth of value out of residential property, amounting to a 53 per cent drop in four years.”

“It has been a rapid change of pace since 2015, the year the pair bought their first home, when Darwin was feeling the heat of the gas project boom and the median house price was setting new records, almost on par with Sydney.”

“‘It seemed like a good time to buy for me, I was in a relationship, and I wanted to get a nice house with a back yard and a pool, so I bought,’ Ms Paton said. ‘Now we’re in a bit of a real-estate crisis, having to sell at a loss. It makes me feel really sad because you put hard work into your home and my home is actually depreciating in value, it’s going down.'”

“Palmerston residents Laura Boucher and Adam Abigal recently bought their first home, but now feel unsure if they should put more money into it, as property prices continue to fall. ‘We want to put a new kitchen in but we’re not sure if there’s any point if our home’s going to keep falling in value,’ Ms Boucher said.”

This Post Has 28 Comments
  1. ‘Whenever you read these press releases made by real estate companies or real estate boards, please keep in mind what businesses they are in,’ said Watt. ‘The more attractive they spin the statistics, the more money they can make.’

    You know what’s strange about this report? I think it was initially in the Vancouver Sun. I found it in The Province this afternoon. By the time I got ready to make this post both articles had vanished. Luckily this outlet above had picked it up and I tracked it down.

    1. “‘Whenever you read these press releases made by real estate companies or real estate boards, please keep in mind what businesses they are in,’ said Watt. ‘The more attractive they spin the statistics, the more money they can make.’”

      Who is this realtor vigilante mr Watt! Of course the MSM will scrub such conspiracies as it may spoke the herd!

        1. Ahem…

          E-scooter company Lime confirms it’s ‘going into electric cars’

          Lime, which first launched as a bike-sharing startup in January 2017, has since become a leader in the electric scooter space. Less than two years old, the company currently has a $1.1 billion valuation, making it one of the fastest to reach unicorn status.

          And now it’s looking to get people to rent small electric cars made by Fiat Chrysler, which was first reported by The Information.

          Lime and its top competitor Bird operate in 100 cities around the world but are notably absent from San Francisco, despite its headquarters being located there. The market-leading players that started the trend are still banned from the city.

          https://finance.yahoo.com/news/e-scooter-company-lime-confirms-going-electric-cars-210950731.html

          1. I like the initiative. It will be interesting to see if they can execute. Zipcar has been around for a while in major urban centers and they have a good business model. Turo is starting to make inroads on car sharing. A shared car powered by electricity has a competitive advantage in that has a much lower cost to operate. The last time I took an Uber one of the riders told me that the only way to make money was to be driving a Prius because anything less cost too much in gas.

          2. ‘going into electric cars’

            The electric car pipe dream. Twice the cost to buy, twice the cost to operate and half the usable life of a vehicle with a gasoline powerplant.

  2. ‘‘We want to put a new kitchen in but we’re not sure if there’s any point if our home’s going to keep falling in value’

    Now Laura, don’t tell me that you are thinking about walking away?

    ‘face the prospect of losing up to $160,000 in value off their home…‘I bought my first home in Palmerston in 2015 for $520,000,’ Ms Paton said. ‘I saved up a lot of money for my deposit and it’s all gone, essentially.’

    I kinda doubt you put $160k down, so look at the bright side: you’ll have the bank coming after you for years! Oh the pride of ownership, revealed yet again here on the HBB.

    1. ‘‘We want to put a new kitchen”

      You bought a house without a kitchen.? How about an car without an engine?

      These morons are heads without a brain.

    2. Ugh, Darwin is sweltering! I was there in late June (early winter) and it was nasty. (Remember, I live in the dry Southwest.) I can’t imagine what it is like during the warmer months. I can imagine lots of mold and mildew issues in homes there.

  3. “Using a combination of her life savings and a bank loan, Penelope Paton, then 26, made the biggest purchase of her life. But less than three years later, Ms Paton and her partner Markus Tumuls, 29, face the prospect of losing up to $160,000 in value off their home.”

    Dont forget to include property taxes, interest, fees, commissions, insurance, maintenance costs, etc…..but I guess it cheaper than rents LOL

    1. kind if explains the ghost shacks bought up in my town by foreign investors. They sit empty, overgrown with weeds and dried out lawns. Guess that how they roll… buy and say goodbye!

      1. The wisdom of HODLing empty, unused housing as investments kind of goes out the window if prices aren’t rising steeply.

    2. Has anyone considered how completely stoopid it is to continually waste money and resources on construction, maintenance and upkeep of empty, unneeded housing units?

      1. Sorry, Professor no-Body (emphasis on the word body) does any basic accounting of these cost issues. The real estate agents certainly do not care, they are usually very short-term thinkers who also lack a lot of intellectual fire power. I doubt they think about such larger macro-economic issues.

        Even buying one of these million shacks at full price especially in Silly-Con Valley with cash is a dumb idea. I could not imagine such a stupid transaction in less economically hot city like Portland or god forbid some place in what the elites rudely call “fly-over country”. Over the long run, these shacks as rentals will lose money big time in maintenance costs, insurance and in particular property taxes. People do not do simple time value of money calculations.

        It appears that higher interest rate environments are better than lower ones at least for real estate.

  4. A nation composed of totally dumbed-down No Child Left Behind ignorant snowflake pukes.

    “The State of the American Debt Slaves”

    (snip)

    “And occasionally, just a wee bit, the students themselves need to do some navel-gazing; These kids get this borrowed money, and it’s easy money to spend (iPhones, concert tickets, video games, nice housing rather than a dump, clothes…); later, it turns into hard money to pay back, and they’re left wondering how not to buckle under the debt.”

    Burning stupidity.

    https://wolfstreet.com/2018/11/07/the-state-of-the-american-debt-slaves-q3-2018/

    1. A lot of money and slick talking and presenting has gone into selling student loans and credit cards to kids once they turn 18 and go to college. Telling them how easy it is, how they deserve it, and how it won’t be a problem to pay back, etc. etc.

      We have an industry built on getting them on the debt-slave treadmill as soon as possible, and any education to the contrary has been gutted.

  5. Dennis Gartman: ‘It is time to sell… finally’
    By Shawn Langlois
    Published: Nov 8, 2018 2:24 p.m. ET
    Time to sell?

    When we checked in with Dennis Gartman of the Gartman Letter back in the summer, he wrote about how investors could potentially see “stunning” gains that carry the Dow Jones Industrial Average DJIA, (-0.60%) past 30,000.

    At the time, the blue-chip gauge was trading around the 25,000 level and would approach 27,00 before the October gutting came along. Now that stocks seem to have found their footing in November, Gartman is out with another call.

    “We are ‘officially’ going to recommend short sales of equities on this rally, something we’ve obviously refrained from doing thus far and something we have been correct in avoiding to date,” he wrote in an excerpt posted on the Zero Hedge blog. “We do not make this recommendation lightly, but we are making it nonetheless. It is time to sell… finally… patience having been rewarded.”

  6. Watt predicts that by March 2019, “we will have well over 1,000 active listings” in the downtown Vancouver condo market or, in other words, “a lot of inventory creating further downward pressure on pricing.”

    Kudos to Watt for being one of the few realtors (if not only one) to call out the truth. All the lies the MSM and REIC has been dishing out needed some opposition.

  7. The oil rout just became a bear market for U.S. crude
    By William Watts
    Published: Nov 8, 2018 4:15 p.m. ET
    WTI crude falls from nearly 4-year high to bear territory in 5 weeks
    MarketWatch photo illustration/iStockphoto
    Look who’s here.

    In a volatile turnabout, the U.S. crude benchmark fell into a bear market Thursday just five weeks after hitting a nearly four-year high.

    West Texas Intermediate crude for December delivery (CLZ8, -1.99%) on the New York Mercantile Exchange fell $1, or 1.7%, to settle at $60.67 a barrel, marking its ninth straight losing session and the lowest close since March. The finish left U.S. oil down 20.6% from its Oct. 3 peak, meeting a widely applied definition of a bear market as a pullback of 20% from a recent high.

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