5944 replies to this topic

[pherthyl]

Right, and I maintain that you cannot hope to predict the market on short timescales. Shiller can say he predicted the housing crash in the US, except he'd been predicting it since the 90s. He is an economist at Harvard.

Better to assume the long-term trend, and build in a factor for risk.

Ok, we'll compare your approach with mine next August.

[true blue oak]

They are the same people, but they use different names on HHV and VV.

and my name on HHV, as I have said before, is "a simple man". I also say the same things there I say here.

[true blue oak]

The thing I dont get about HHV people, and some of the cheerleaders against housing, is that there is a whole set of beliefs that go along with the anti housing vibe that I dont think make sense. One of the ideas being that we should all build bunkers and buy gold, guns, farms etc, the other being that they take pleasure in watching these 'debt lovers' get crushed if/when their loans get too big and they declare bankruptcy. On the one hand they preach how government measures will run out and things will deflate, but on the other hand preach how inflation runs wild and we need gold. (check the ad/links on whispers blog to see what I mean)

The reason I dont get it, is because I think a correction over a certain %age (im not sure how much) will destroy social fabric. The same debt lovers are the ones keeping things together!! No one wants your favorite restaurant to close, or downtown to be boarded up, or your kids friends to move to Nanaimo, but I think that could happen if housing goes down a lot. I also dont get how if you actually thought inflation was going to happen, why loading up on long term debt wouldnt be the best thing in the world.

The anti housing people here seem a bit more moderate though, so maybe my rant is pointless.

I am a "HHV" person as I post there often. I am not anti-house at all - in fact I have owned several and now and am choosing to wait the market out a bit before I purchase my next one - to when it makes financial sense, as well as lifestyle sense.

I don`t ever want to build a bunker, have no guns and no gold. I do not take pleasure in others suffering. Rather, I see a lot of people suffering now because they are drowning in debt. I would like to see the house prices here moderate to the point that they are somewhat more affordable for the average family.

I certainly hope that any loss in home values does not degrade out social fabric, but instead makes it stronger.

[Mike K.]

Regarding the volume of homes for sale, my sense is many homeowners are casting lures in the hopes that someone bites at or near their present day asking price, but that these listings are not necessarily driven by fear of higher rates or financial woes but rather chance opportunities to sell property while median prices are still relatively high.

There's no harm in shedding a property appraised for $650,000 if one can get a reasonably close offer. In a year (perhaps two?) once there is a solid direction in the market (other than this slack tide of a market we seem to be in now) those who sell now can still re-enter at or near the price they sold for in 2012.

Remember that the key to success in real-estate is based on three simple things: location, location, location. If you bought a home in the middle of Langford for $600,000 among 500 $600,000 homes, chances are you're going to get taken for a ride in a softening market.

[MarkoJ]

I am a "HHV" person as I post there often. I am not anti-house at all - in fact I have owned several and now and am choosing to wait the market out a bit before I purchase my next one - to when it makes financial sense, as well as lifestyle sense.

I don`t ever want to build a bunker, have no guns and no gold. I do not take pleasure in others suffering. Rather, I see a lot of people suffering now because they are drowning in debt. I would like to see the house prices here moderate to the point that they are somewhat more affordable for the average family.

I certainly hope that any loss in home values does not degrade out social fabric, but instead makes it stronger.

My impression is we will always have people "drowning in debt" irrelevant of what the average home costs. I would be curious to know what the foreclosure rate in Victoria was 1995-2000 compared to 2007-2012? Both relatively flat markets.

[dasmo]

pherthyl its strange that you can speak with such authority on my situation when you know nothing about it.

I agree with you though, the houses were overpriced by 12% and 10%.

[skeptic]

pherthyl its strange that you can speak with such authority on my situation when you know nothing about it.

Debating house prices in Victoria is like arguing about politics. On one side we have pessimists (dippers/democrats) who consider the other side (optimists/conservatives/republicans) to be stupid and greedy. They want what the other side has but they don't want to have to work for it, so prices must come down (wealth must be seized and redistributed).

Of course, if the optimists/conservatives/republicans are so stupid, you have to ask yourself why they have the houses (money) while the other side rents and wishes for involuntary redistribution of wealth in their favor.

[pherthyl]

pherthyl its strange that you can speak with such authority on my situation when you know nothing about it.

My argument is not specific to your situation. I'm saying the market sets the vast majority of the price which it clearly does. We can argue about whether the buyer has influence over 5% or 7% or 10%, but it really doesn't matter.

If you are a master negotiator, then today you will get 10% off the house you want to buy which is priced competitive to the market. If the market declines by 10% you will still get 10% off of that new level*.

* the complicating factor is market dynamics in one year. So of course if you think we'll be back to a seller's market in one year then it's a different story. I doubt it, but that's a separate argument.

[pherthyl]

Debating house prices in Victoria is like arguing about politics. On one side we have pessimists (dippers/democrats) who consider the other side (optimists/conservatives/republicans) to be stupid and greedy. They want what the other side has but they don't want to have to work for it, so prices must come down (wealth must be seized and redistributed).

Of course, if the optimists/conservatives/republicans are so stupid, you have to ask yourself why they have the houses (money) while the other side rents and wishes for involuntary redistribution of wealth in their favor.

Can we keep the arguments logic-based please?

By the way, what made you change your mind that Victoria was in a bubble (as you voted in the last thread that it was)?

[Nparker]

On one side we have pessimists (dippers/democrats) who consider the other side (optimists/conservatives/republicans) to be stupid and greedy...

What an ignorant way to frame this argument. My politics definitely tend to be left-ish of centre, but I still appreciate the value of owning my home and although I did not buy it as an investment per se, I still hope to see it rise in value over time. Perhaps because of my "leftist-commie-pinko" leanings, I also don't want to see the many people who are mortgaged to the hilt lose equity in their homes due to a sharp downward correction in the housing market.

[Szeven]

I love the comment about rising rates, like that has ANY chance of happening, EVER.

Bernanke just said yesterday that rates will stay at 0 through mid 2015 even if the economy picks up. And you think Canada is going to raise rates? lol...

[dasmo]

The buyer has everything to do with it. In the end the market is created by what people are willing and do pay for real estate. Depending on how the property is priced declines from asking price can be huge. We were looking at a property mid island beach front. It was listed for 3 years at 1.2 million. They had just dropped the price to 699k which got our interest. It sold for 620k. The sellers were done and eventually gave in and sold it for what someone was willing to buy it for. Others in this area are still trying to sell at "market" value but are not selling....

[pherthyl]

The buyer has everything to do with it. In the end the market is created by what people are willing and do pay for real estate. Depending on how the property is priced declines from asking price can be huge. We were looking at a property mid island beach front. It was listed for 3 years at 1.2 million. They had just dropped the price to 699k which got our interest. It sold for 620k. The sellers were done and eventually gave in and sold it for what someone was willing to buy it for. Others in this area are still trying to sell at "market" value but are not selling....

I think there is confusion about what the market is. We're talking about average and median prices here of all the places that sold. The market is not defined by what people are asking for their places.

The dreamer thinking his place is worth 1.2 million has no effect on the market. $620,000 is the market value of that property. Maybe another buyer would have gotten it for $640,000, or another would have paid $600,000 but overall the market value is in that area.

[dasmo]

We are arguing on semantics...partially.
Those statistics are a conglomeration of individual transactions. So yes the market influences both the expectation of the seller and the perception of buyer. However the market as you describe it is a snap shot after the fact. After maybe a year of tracking the picture becomes more vlear. But it is not telling the future, it's describing the past.

On negotiating, I have no feeling I am a master negotiator at all. on the contrary. I just no my personal limit and ask within a range of that giving room to move. On every transaction, I have accepted the sellers counter offer. I certainly can't trick anyone. It's about finding the common ground and where the seller is willing to sell at. So I agree anyone could have gotten my places for the same price.

[pherthyl]

We are arguing on semantics...partially.
Those statistics are a conglomeration of individual transactions. So yes the market influences both the expectation of the seller and the perception of buyer. However the market as you describe it is a snap shot after the fact. After maybe a year of tracking the picture becomes more vlear. But it is not telling the future, it's describing the past.

Ok I think we agree then. Certainly market value can only be described as a range based on previous comparables until the place sells.

On negotiating, I have no feeling I am a master negotiator at all. on the contrary. I just no my personal limit and ask within a range of that giving room to move. On every transaction, I have accepted the sellers counter offer. I certainly can't trick anyone. It's about finding the common ground and where the seller is willing to sell at. So I agree anyone could have gotten my places for the same price.

Makes sense. I put that argument badly and didn't mean to cast aspersions on your particular negotiations. I think an astute buyer can definitely get a better price than an ignorant one on the same property but all buyers will fall within a relatively narrow range in most cases.

[true blue oak]

I love the comment about rising rates, like that has ANY chance of happening, EVER.

Bernanke just said yesterday that rates will stay at 0 through mid 2015 even if the economy picks up. And you think Canada is going to raise rates? lol...

I agree, Szeven. I cannot see rates going up, or down, in Canada for the foreseeable future.

[true blue oak]

BC Ferries increasing fares by an average 4% for each of the next three years. they just don`t get it. This makes Victoria less attractive to tourists and even potential residents.

[skeptic]

BC Ferries increasing fares by an average 4% for each of the next three years. they just don`t get it. This makes Victoria less attractive to tourists and even potential residents.

Nah, not likely to make any difference to potential residents. I don't use the ferries more than a couple of times a year. Flying isn't much more expensive and it's way more convenient (I leave via Seattle so YMMV).

[true blue oak]

Really? I think the very high ferry prices give people pause when considering to come here for vacations, etc.

[skeptic]

Really? I think the very high ferry prices give people pause when considering to come here for vacations, etc.

Those aren't the people coming here to buy.