2300 replies to this topic

[Mike K.]

Oh brother...

So there's no winning with you guys, is there? Buy today, and you're an idiot because you haven't listened to the bubble patrol advising you to hold out for a bust. Buy once a bust occurs and you're an idiot for not waiting until the bubble patrol decides on a bottoming-out price point.

I smell a lose-lose situation here...

[househuntvictoria]

I wasn't passing judgment, merely providing an opinion on human behavior I hold. I could care less when anyone buys. I'm just saying I believe there is a bubble in Victoria, right now. And because of this belief, I won't buy a home. I may never buy a home in this town as I don't believe after living here and living in several other Canadian cities that Victoria is worth the premium one would have to pay today, to own. Sure is worth the rent I pay right now though.

Owning a home is neither a win nor lose situation in my mind.

[tsusiat]

Come on derf - the bubble patrol?

If you want to disagree, try to counter the facts. Pointing out there could be a bubble is a public service, if prices do start going down in the next year or so - particularly if they go down a lot. People who might have an interest in buying right now have a right to see both sides of the argument before making decisions that involve these amounts of money.

A lot of people have a lot of ego wrapped up in the inflated values of their properties - but saying they will go down isn't going to cause them to go down. Because, as has already been pointed out earlier in this thread, people have been saying there is a bubble since about 2003 - so if saying there is one alone would make a difference, it would already have happened.

I think the reason this thread has touched a nerve is now there are a lot of economic arguments in favour of a downturn, and arguing against the likelihood of one happening seems these days to be as hopeful as perhaps back in 2003, when the bubble patrol was arguing against the rising tide.

Should we start throwing around labels like real estate pumpers, every time someone argues Victoria is only heading higher - and that because Victoria is heading higher, timing doesn't matter?

If my economic arguments are wrong, come on over to my blog and laugh at me next year. I promise if you say "I told you so," I'll listen without any complaints... 8)

[ressen]

There sure seems to be a race on in the Western communities with builders trying to get their houses to market before the bubble does burst. In my mind they are over building and it won't be long before many of these new houses will sit empty. There is an other small lot subdivision planned with 176 houses on Sooke Rd. as well as numerous ones along Happy Valley Rd. There is Bear Mountain and West Hills. In the center of Langford houses are being torn down to make way for town houses or apartments. As I shake my head I wonder who the f--- is going to buy all these new houses. The only hope is that (greater) Victoria gets discovered by a visible minority (possibly all whites)and that they will flock here in large numbers.

[Mike K.]

Ok ok, the bubble patrol was the bubbliest name I could think of

But seriously, the pending crash has been voiced so much over the years that it's become a case of crying wolf. There are just as many factors, in my opinion, that point to a healthy housing market as there are that point to pending problems. I look forward to further success for our real-estate professionals and the growth of our communities (especially smart growth -- I mean there are some fantastic projects under way that will rejuvenate many pockets of this region) and hope that we don't have a bust, but as long as growth in our region continues (population and professional employment) and the area continues to be seen as an attractive place to retire, there's a good chance we'll keep afloat even if the the national situation dampens.

By this time next year one of us will come trumpeting through the other's door... 8)

ressen, I too am perplexed by the amount of activity out west but I suppose if that's where our growth is taking place then we shouldn't be too concerned in the short term. Whether people choose to actually locate in the west over the long term in light of more urban development in Victoria/Esq/Saan is another matter altogether. Certainly all of those mountainsides being razed for single family homes are much more taxing on our region than the prices developers are charging (I'm thinking water, sewers, infrastructure, etc) and more individuals are coming to that realization and looking towards established urban areas.

[Galvanized]

When Victoria's market levels off some property values will decrease such as the small lot hillside sub-divisions out west, there's no argument there. If you own in the core you'll have nothing to worry about. It's all about location, location, location. There will always be demand in Victoria, there's no argument there either. If paying rent floats your boat then go ahead and waste your money paying someone else's mortgage (I used to have renters who paid half my mortgage :-D ). I too would have voted in this loaded poll if "maybe" didn't also mean "yes", "slightly bloated" would have been a better option because I would agree with that. 8)

[G-Man]

I know that I am coming into this relatively late but Ihad quite a lot of fun reading all the back and forth.

Just some observations:

- People do buy things that depreciate in value. In fact property is an anomoly in that it tends to go up. Most things ie cars, microwaves, paperbacks, clothes go down and no one cares because they like them. I guess if people like their house it shouldn't matter either. Of course I do own a place (almost downtown) but I also like it.

- While I would not like to see a slow down in construction or population inmigration I would not mind seeing prices drop a bit.

- A bubble would be a great benefit for the poor!

- Perhaps we will see a drop in suburban prices but not in metro prices as the cost of gasoline continues to go up.

- Most of the city's service workers (waiters, cooks) live downtown and not in the supposedly cheap 'burbs.

- There are places to live close to town for a family that are below the high costs of a family house.

[url=http://www.mls.ca//PropertyDetails.aspx?vd=&SearchURL=%3fMode%3d0%26Page%3d1%26vs%3dResidential%26ret%3d300%26sts%3d0-0%26beds%3d3-0%26baths%3d0-0%26aid%3d764%26MapURL%3d%3fAreaID%3d764%26mp%3d0-0-0%26mrt%3d0-0-4%26trt%3d2%26of%3d1%26ps%3d10&Mode=0&PropertyID=5903813:7bca5]This one[/url:7bca5]

[url=http://www.mls.ca//PropertyDetails.aspx?vd=&SearchURL=%3fMode%3d0%26Page%3d1%26vs%3dResidential%26ret%3d300%26sts%3d0-0%26beds%3d3-0%26baths%3d0-0%26aid%3d764%26MapURL%3d%3fAreaID%3d764%26mp%3d0-0-0%26mrt%3d0-0-4%26trt%3d2%26of%3d1%26ps%3d10&Mode=0&PropertyID=5796036:7bca5]or this one[/url:7bca5]

I am not saying that they are perfect but the options are there. Anyways I said that there is not a bubble because I think that things quiet for a while maybe even dip slightly but then regain. OH well the poor get screwed again.

[gumgum]

Just for fun, I thought I'd see what the correlation between what our vote was and whether we own or rent?
I know I must be biased. I own and I voted no there isn't a bubble.
I wonder if it's possible to have an nonobjective view on this for most?

[G-Man]

I own said no but I agree that they will dip. I wonder if renters think there will be a bubble?

[Mike K.]

Rent, and voted "no."

[jmartino]

We have a saying in Spanish:

"When you see your neighbour's beard catch fire, wet yours"

Next economic down cycle will be catastrophic, too much debt, no savings, bad scenerio

[aastra]

Miami Condo Glut Pushes Florida's Economy to Brink of Recession
By Bob Ivry

July 20 (Bloomberg) -- In the middle of the biggest glut of condominiums in more than 30 years, Miami developers keep on building.

The oversupply will force prices down as much as 30 percent, the worst decline since the 1970s, and help push Florida's economy into recession as early as October, said Mark Zandi, chief economist at West Chester, Pennsylvania-based Moody's Economy.com, who owns a home in Vero Beach, Florida.

``Florida is the epicenter for all the problems that exist in the housing industry,'' said Lewis Goodkin, president of Goodkin Consulting Corp. and a property adviser in Miami for the past 30 years, who also foresees a recession. ``The problems we have now are unprecedented and a lot of people will get burnt.''

Thirty-seven new high-rise condos and 20,000 new units are being built in Miami's 1,040-acre downtown, where sales fell almost 50 percent in May, according to the Florida Association of Realtors. The new units will join the 22,924 existing condos in Miami-Dade County that were for sale in April, according to Jack McCabe, chief executive officer of McCabe Research & Consulting LLC in Deerfield Beach, Florida. That's the most unsold units since McCabe began tracking sales in 2002.

``Have you been to Miami lately?'' Florida Governor Charlie Crist said at a homebuilders' conference last week in Orlando. ``It's like we have a new state bird: the building crane.''...

Full story at [url=http://quote.bloomberg.com/apps/news?pid=20670001&refer=&sid=a4qa.rYTWyYA:9117d]www.bloomberg.com[/url:9117d]

[Holden West]

[url=http://www.orlandosentinel.com/business/orl-condobust2707aug27,0,2001796.story:0efa0]Glut in Miami:[/url:0efa0]

Just how many other speculators face the same dilemma in the nation's most glutted condo market will become clear during the next two years. That is when 25,000 new condo units, most of them rising in or near Miami's downtown, will flood an area already saturated with 23,000 condos listed for sale. An additional 40,000 units have been approved, but analysts doubt the majority will break ground.

Last month, they finally rented out the two-story $885,500 penthouse they closed on last year in Blue, a concave tower overlooking Biscayne Bay. But the $2,800-a-month rent they're collecting is less than half their monthly mortgage payment, maintenance fees and property taxes. Yet, as Mary Mullins said, something is better than nothing.

The couple never planned to live in the condo, but jumped at buying it at pre-construction prices in 2004 after friends shared a familiar story.

"They said they made lots of money, so they told us to try it and maybe we could make lots of money, too," Mary Mullins said. "But that didn't happen. We don't know what happened."

[G-Man]

I really don't think we can compare what is going on in Florida with Victoria. I mean people are moving here in droves and there is a huge rental crunch. Places will not go empty, prices might stop rising as fast but that is it. I am just so happy that the zero down mortgages were not as easily accessible in Canada as they were in the States.

[tsusiat]

...nothing much seems to be happening at Silkwinds, Developments in Jordan River are hitting bumps, houses in Fairfield are listing for less than $450,000, there is more than two years of million dollar inventory and sales are tracking substantially lower than last year.

Anyone who argued and disagreed last year that Victoria was at risk of a housing bubble want to come back and give their updated opinion? I know at the time I posted this topic I said I would check back in with my opinion of what happened and take my comeuppance if I was wrong.

Was I wrong about a housing bubble in the Victoria real estate market? What do you think?

[Mike K.]

Anyone who argued and disagreed last year that Victoria was at risk of a housing bubble want to come back and give their updated opinion? I know at the time I posted this topic I said I would check back in with my opinion of what happened and take my comeuppance if I was wrong.

Was I wrong about a housing bubble in the Victoria real estate market? What do you think?

A global financial crises and decrease in global financing /= housing bubble.

Attributing the current construction stalls to a "bubble" is like attributing high gas prices to an excess of public transit vehicles.

[mat]

A global financial crises and decrease in global financing /= housing bubble.

Attributing the current construction stalls to a "bubble" is like attributing high gas prices to an excess of public transit vehicles.

well said - bubbles generally resolve to pre-bubble levels, like the 2000/2001 tech market hike resolution (and that was due to capital allocation). We are seeing market levels, not only equities but bonds and money markets, going to incredible lows - even the outsider doom sayers did not predict a sell off like this. (Nikkei is off nearly 10% tonight) - that means banks have less cash to support mortgages.

What it means for the local real estate market is simple - buyers either need cash for full purchase, or sign into high fixed rates. ( see this article ) - which with low wages and job security at a record low, means fewer buyers.

[Caramia]

I agreed with you a year ago. But now I think all bets are off about why things are the way they are. Everything is crashing. I doubt Victoria real estate is the cause.

[G-Man]

Yup definitely not due to anything that happened in Victoria. A few projects being put on hold is a good thin locally and is actually a good mitigation had there been any worries about a bubble.

[spanky123]

A global financial crises and decrease in global financing /= housing bubble.

Attributing the current construction stalls to a "bubble" is like attributing high gas prices to an excess of public transit vehicles.

I think that there are really two factors here. The first is a bubble correction while the second is general economic conditions.

There is no question that some types of properties in Victoria bubbled and have now burst. These are waterfront properties and luxury condos. Both are down sharply from a year ago and show no signs of improving over the near term. This probably doesn't impact 99% of us here on VV however.

The second factor and what scares me is the economic climate. Victoria has 3 major sectors, Government, tourism and technology.

Although the Canadian dollar has fallen, I don't think that it will result in any improvement in tourism over the next few years. For starters I notice that many hotels are now back to listing prices in US dollars, but even then a $50 savings on a $300 room is not enough to entice broke Americans and terrified Asians to spend their money here.

Silicon Investor reported a couple of days ago that in their opinion 80% of pre-earnings tech companies will die in the next 12 months due to the complete lack now of venture capital. I am going to guess that this amounts to about 30% of the local tech community if not more. Most other tech companies will cut back costs in order to ride out the downturn even if they are profitable (ie eBay just let go 10% of its workforce).

The Government relies heavily on royalties from oil and gas to fund its budget. Wth natural resource prices going into the tank, even the Government is going to have to cut back on spending. If the NDP are elected they may even push us into a deficit in order to meet their promises.

Bottom line is that there is a lot of uncertainty in Victoria which will lead to price reductions in even non-bubble areas. Few people are going to take on a large financial obligation if they are not even certain that they will have a job in 6 months.