[dustinb]

Well, about 5 minutes ago it was announced that the US lawmakers rejected the 700billion bailout of the US market. Almost immediately all world markets dropped. The toronto index fell 800 point, dow is 600 points. The number 4 bank in the states was just sold for next to nothing to Citibank... anyways, it's very concerning. So many of us live on credit of the banks, what are we going to do if that credit is no longer available? For me personally, I'd have to reconsider everything I'm doing right now. I would probably have to drop school and get a full time job to make up for my credit float.

http://edition.cnn.com/2008/BUSINESS/09/29/us.congress.bailout.deal/index.html

Pretty much every news website is covering this story right now.

[Victoria SiR]

I don't have any loans whatsoever. So from that angle doesn't bother me in the slightest. However many of my investments are stagnating, I haven't lost too much.... yet. Personally I'll be riding it out, as I have been in for too long to just jump ship. Most of the foreign markets I am vested in are still going strong as well so I think I am gonna be fine.

Bottom line....


Meh.

[dustinb]

I don't have any loans either, but I do have a mortgage. I also don't have huge investments (about $20,000), but they are falling quite quickly.

[Victoria SiR]

Yeah, I took high risk investments for a better part of ten years, but about a year ago I adjusted most of then when I turned 30, and moved them to more stable markets.

They are seeing a decline, no doubt about it, but its a lot less than what the trend seems to be showing. If it was at a greater risk Id consider moving them to a GIC or Bonds. The cost of me doing that currently however, would exceed what I am seeing in losses currently though. People panic during events like these, especially when you have the President telling its citizens to not panic. The best thing to do is stay put unless you have just recently gotten into something.

As much as I have been thinking about trades, I am almost happy at the moment to be in local government. We tend to be pretty recession proof for work. :)

[Victoria SiR]

.... and the DOW just closed with the largest point drop in its history at almost 778 points.

[dustinb]

The Toronto exchange closed with a new record loss of 840.26 as well. I have lots of relatives in the states, and talking to them about what is going on down there is ridiculous. They sure screwed themselves with the whole sub prime mortgage thing.

[dustinb]

At least oil dropped to $95 a barrel. Wonder how long it will be before we see a change at the pump.

[Fastam]

Im not too worried. My investments have been hurt a bit, but it will bounce back.

Most of my money is in high interest savings. Im actually hoping our houseing market takes a decent hit, so i can pick up a nice house in the next year or 2.

[Super Dipper]

time to get my shit paid off. woopee

[projectcivic]

I am not too worried about it, if you have a 5 or 10 year plan then just ride it out. I believe the biggest hurter for this situation is everyone panicing and pulling everything out. Its only a paper loss right now so why make it a real loss?

[ostampflee]

Time to go bargain hunting :D

The bill will pass even if today was only emotional. Asia isn't doing nearly as bad, TOPIX is only down 2% but the Nikkei is taking a beating.

[Fleemer]

sweet, just when i was starting to look at buying a house :)

[92SIvic]

i'd still wait two years. its just gunna get better :P

[ness_71]

No mortgage, no loans, no investments and a job where I don't get paid nearly enough to even be significant.
Simple life ftw.

[Benny95TA]

I kept US investments out of my portfolio because I thought they were going down hill. I expect more bad things to happen down there in the future as well.

[mr.slave]

WE'RE ALL GUNNA DIE!!!!!!!!

i heard a big contributor to this mess was short selling.

i dunno i hate republicans.
so very very much. just one giant hypocrisy.

[Fastam]

Not really, short selling was banned to stop it from getting worse.

But this is pretty much all to deregulation of lending laws.

[Nightwalker]

From what I understand, shorting of certain financial sector stocks can't be done, but options are fair game

[mr.slave]

Not really, short selling was banned to stop it from getting worse.

But this is pretty much all to deregulation of lending laws.

so they stoped the short selling?
that must be fairly recent no?

[mr.slave]

i dunno i heard that washington is "desperately" trying to figure this out in a matter of utmost importance yet have taken today off for some jewish holiday..
i didnt get a day off and im not even working on anything of this importance..

[Fastam]

so they stoped the short selling?
that must be fairly recent no?

What Coal said.


And it was after the US buy out of AIG.

http://www.sec.gov/news/press/2008/2008-211.htm

[mr.slave]

yeah i remeber i was listening to the radi like a week or 2 ago and htis guy was yelling about it.

interesting times for sure..

[MidnightMechanic]

Yes options are still fair game. I made a little on mine yesterday.

Shorting has only been prohibited on certain stocks. That's also the reason for the rebound today, brokers covering their short positions by buying low.

[m1ataman]

I have a stupid question. If your bank goes titters do you still have to make payments????

[RZ350]

You still have to pay. In the US if a bank goes down the only entity that doesn't have to cough-up is the bank itself. In Canada if a bank fails our money is insured, Canadian banks are quickly becoming some of the best in the world because of this.
Cheers,
Grant

[Croatian7]

As far as housing goes, I really doubt prices will come down much in Victoria. On average, across the United States with all the foreclosures, financial crisis etc. housing prices are down only 16%. Considering Canada is in a much better situtation, and Victoria is a niche market, I wouldn't except more than a 5% price drop in the worse case scenario.

I just finished a new house, I contracted out all the work, my total expenses came out to $530,000. If I sold the house and paid real estate comission and GST my profit would be like $20,000. My point is if prices drop even 5%, builders will stop building, inventory will go down.....people will continue to retire to Victoria etc..

[Manic!]

You still have to pay. In the US if a bank goes down the only entity that doesn't have to cough-up is the bank itself. In Canada if a bank fails our money is insured, Canadian banks are quickly becoming some of the best in the world because of this.
Cheers,
Grant

Banks in the US are also insured by the fdic.
From there site:
Federal deposit insurance protects the first $100000 of deposits that are payable in the United States.

http://www.fdic.gov/

Both Obama and McCain want to change that to 250000.

[islandsupra]

Most banks carry additional insurance on top of CDIC/FDIC, which just cover the deposit group of products. IIRC, most of the trust and securities divisions (Wood Gundy, RBC Dominion etc.) are required to have additional insurance policies in place.

I'm still fairly comfortable investing regularly in aggressive growth/income funds, and don't think I would consider pulling any of my US investments from my portfolio. Any way you look at it, they still comprise of a massive portion of the world market, and pulling them only limits your portfolio diversification.

The commercial-backed paper fiasco will continue to hurt the Canadian banks until whenever it all gets sorted out, and we'll still probably see a lot more of an overall downturn... but the market will correct.

I'm personally not concerned about losing too much (mostly because I don't have a lot invested), but i'll keep my regular investments going the same way they have been. I put a plan in place to reach a long-term goal, and just have to ride out this short-term problem. Don't plan on touching any of that money for the next 20 years, so I try not to be too concerned with the short-term.

[fenge]

As far as housing goes, I really doubt prices will come down much in Victoria. On average, across the United States with all the foreclosures, financial crisis etc. housing prices are down only 16%. Considering Canada is in a much better situtation, and Victoria is a niche market, I wouldn't except more than a 5% price drop in the worse case scenario.

Well... The median house price has dropped for 5 months in a row, and passed the 5% mark in June. Houses are now worth about 10% less than they were in April.

[dustinb]

Well the revised bailout passed:
http://www.cbc.ca/world/story/2008/10/03/us-bail.html

[Enraged]

Well... The median house price has dropped for 5 months in a row, and passed the 5% mark in June. Houses are now worth about 10% less than they were in April.

good to see someone with a realistic viewpoint instead of listening to the victoria real estate board or the times colonist... people though vancouver was a niche market too, and that the prices would keep going up until well after the olympics, but vancouver prices are dropping faster than florida prices were...

for people looking to buy, this blog keeps track of the latest real estate stats: http://househuntvictoria.blogspot.com/

[Croatian7]

Well... The median house price has dropped for 5 months in a row, and passed the 5% mark in June. Houses are now worth about 10% less than they were in April.

Looking at the peak isn't really the way to go. For example if I stock goes from $100 a share to $200 and falls to $190 in one year is it really down 5%? Sure, numbers wise it is. Also numbers can be misleading: average Condo price increased 6% last month which sounds very impressive if you ignor the fact they only sold 110 units. The Condo market is obviously struggling and more prone to burst than housing, but prices are the highest they have ever been, how do you explain that?

I invested with a friend in a detached duplex in Langford. Two identical houses. We sold one in April for $439,900 and just sold the second one for $467,500. First one took 10 days to sell, this one took 63 days to sell. Has the market slowed? Yes, have prices fell that much, not really.

I think from where we are right now (correction off the peak), I don't think housing prices will come down more than 5%. If prices come down 5% from where we are I can't see ANYONE building anymore. Anyone who is in construction knows how expensive everything is. Secondly, if I can't sell my new house for what I want I will rent it out (extremly low vacancy rate) or move in.

No new buildings + people pulling houses of market = decreased inventory.

[Manic!]

In Nanaimo if you drive down any street you will see at least 3 or 4 houses for sale because nothing is moving. Last December you could not find a single water front house for under a million. Now there are a number of them. One just sold for $780000.

[fenge]

Looking at the peak isn't really the way to go. For example if I stock goes from $100 a share to $200 and falls to $190 in one year is it really down 5%? Sure, numbers wise it is. Also numbers can be misleading: average Condo price increased 6% last month which sounds very impressive if you ignor the fact they only sold 110 units. The Condo market is obviously struggling and more prone to burst than housing, but prices are the highest they have ever been, how do you explain that?

Yeah, average pricing can be misleading. Sell a few million dollar condos and it pulls the average way up. The median is a more reliable figure to use, much less susceptible to big swings. BTW the median condo price is down 4.6% compared to last Sept. The average is down 7%.

I invested with a friend in a detached duplex in Langford. Two identical houses. We sold one in April for $439,900 and just sold the second one for $467,500. First one took 10 days to sell, this one took 63 days to sell. Has the market slowed? Yes, have prices fell that much, not really.

I think from where we are right now (correction off the peak), I don't think housing prices will come down more than 5%. If prices come down 5% from where we are I can't see ANYONE building anymore. Anyone who is in construction knows how expensive everything is. Secondly, if I can't sell my new house for what I want I will rent it out (extremly low vacancy rate) or move in.

No new buildings + people pulling houses of market = decreased inventory.

I work in the industry as a mechanical consultant. Residential construction has ground to a halt this summer, there are no new jobs are coming in. Building your house is about to get a lot cheaper.

The selling price of an average house in Victoria is dropping by around 10g's per month. That's on par with the worst cities in the USA. That is unsettling to a first time buyer. If I had bought earlier this summer like I was planning, my down payment would have been wiped out in a few months and I would now owe more on my mortgage that the house was worth.

Four different couples I know that were looking at buying this year have decided to put it off until the market shows some sign of leveling off. The thing with the end of housing booms is that no one HAS to own a house. But many people HAVE to sell.

I hope there's no meltdown, but I'm not holding my breath.

[Croatian7]

Yeah, average pricing can be misleading. Sell a few million dollar condos and it pulls the average way up. The median is a more reliable figure to use, much less susceptible to big swings. BTW the median condo price is down 4.6% compared to last Sept. The average is down 7%.



I work in the industry as a mechanical consultant. Residential construction has ground to a halt this summer, there are no new jobs are coming in. Building your house is about to get a lot cheaper.

The selling price of an average house in Victoria is dropping by around 10g's per month. That's on par with the worst cities in the USA. That is unsettling to a first time buyer. If I had bought earlier this summer like I was planning, my down payment would have been wiped out in a few months and I would now owe more on my mortgage that the house was worth.

Four different couples I know that were looking at buying this year have decided to put it off until the market shows some sign of leveling off. The thing with the end of housing booms is that no one HAS to own a house. But many people HAVE to sell.

I hope there's no meltdown, but I'm not holding my breath.

Last September the 6 month average was $318,000. This September the 6 month average is $318,000. The occasional month thats $343,000 or $302,000 is most likely skewed by million dollar condo sales.

If prices fall, construction is likely to stop as opposed to get cheaper. First of all lots won't get cheaper because municipalities where the developments are (like Langford) are pinning all the infrastructure upon the developer. They want the developer to build the road ($$), pull the sewer connection ($$), pull the electricity etc. This is extremely expensive, goodluck on getting a lot under $200,000! Labour might get slighty cheaper but it's $120 to fill up a truck these days, not $60. Rent has increased in Victoria. Peoples morgages have increased. I can't see a trades person who charges $35/hour right now working for $20, they might as well go on unemployement.

As far as this comment that residental construction has ground to a hault, I don't know about that. I am helping my old man on the weekends do siding on his house on Bear Mountain. He called 11 businesses, only one gave an estimate that was ridicolous. I've seen a bit of a slowdown in drywalling and roofing, but other than that everyone is still pretty much working full tilt. Getting a reputable trades person is still very difficult.

[Black SC2]

First of all lots won't get cheaper because municipalities where the developments are (like Langford) are pinning all the infrastructure upon the developer. They want the developer to build the road ($$), pull the sewer connection ($$), pull the electricity etc.


You can pull sewer out of that equation in a lot of places. I know for a fact in Langford, if there's a sewer connection going down an existing road just to service a new condo building, they tag a service fee onto the yearly taxes of all the existing residences - whether they connect to it or not! It's fucking lunacy. My boss is payed an extra $400 last year, and it's "gone down" to $385 for the sewer that went down his road to the new condo unit behind his house.

[Croatian7]

You can pull sewer out of that equation in a lot of places. I know for a fact in Langford, if there's a sewer connection going down an existing road just to service a new condo building, they tag a service fee onto the yearly taxes of all the existing residences - whether they connect to it or not! It's fucking lunacy. My boss is payed an extra $400 last year, and it's "gone down" to $385 for the sewer that went down his road to the new condo unit behind his house.

Sewer connection going down the existing road isn't a big deal (especially if you are just hooking up one house); however, lets say you want to buy a 10,000 sq/ft lot directly behind the Reflections building and subdivide into two lots. Virtually downtown Langford. You would think downtown Langford would have a sewer connection down every street. Not so the case, for example, Winster Road behind Reflections has no sewer connection down half the street. Langford was suppose to install it three years ago but eventually said: "Fuk it, if someone wants to tear these old houses down and put up new ones, make them pay for the sewer to be pulled off the main street". Therefore if you want a sewer connection you might have to pull it at your expense anywhere between 100-1000 feet. Considering this involves tearing up the road, engineering plans etc...very expensive.

Totally getting off topic but basically overall I don't think we are screwed as the media may suggest. Secondly, if buying a house, I would wait. Are house prices going to drop that much (in Victoria), I don't think so: Canadian economy still good, niche market, vacancy rate very low, construction extremely expensive.

[mr.slave]

everyone wants to live in bc right..

but with all he homes for sale i wonder how much of them are hose people that just bought and sold when the market was hot (kinda like curbers/flippers)..

[RZ350]

Speaking as the Son and Grandson of master carpenters. Generally when the times are good and lots of building is going on anyone with a pick-up truck and a few tools decides they can be a contractor. They don't make quite as much money as the more legitimate journeymen do and the work is nowhere near as good but they are still working and making good cash.
When there is a recession (and make no mistake, there is going to be) they generally end-up going back to the jobs they had before (pumping gas, etc.) and good ridence as well.
The true craftsmen who have the training and experience to do an amazing job will usually be able to find work. The pay will be worse but there will always be a little work.

The moral: When things are booming save your bucks once the boom is over you can get better work for less money.

As to the housing market: The low vacancy rates are not going to last for long, I'm seeing a lot of signs for tenants. It's a self-fuelled market and all it takes is a fairly major reduction in contracting work to see Victoria enter a housing slump. Sure we have a large population with secure income, but they aren't the ones selling and driving the price. It's only going to take a small percentage who overextended themselves with a zero down mortgage and decide to forclose when they loose their job to really affect prices.

The way to weather this bit of an economic downturn is to hold onto a steady, non-market driven job and accept a slightly lower standard of living. If you do this and manage to put some money away in a VERY secure place you will come out the other side in much better state then those who refuse to see what is coming before it's already affected them.

IMHO,
Grant

[TouringTeg]

Some good points in this thread. I agree with this "The way to weather this bit of an economic downturn is to hold onto a steady, non-market driven job and accept a slightly lower standard of living." This is what a lot of Americans are doing as well. A poll was released yesterday which overwhelming shows that Canadians will put off spending on big ticket items, vacations, gifts, eating out etc. This helps you weather the storm but hurts the economy when spending drys up.

I wanted to comment on the condo market. IMO there will be a short term correction because pricing is inflated. Long term I see condos as a good investment. They are an affordable choice for first time buyers. Especially with the new rules that demand 35 yrs and 5% down. Secondly a huge portion of our population is gearing up for retirement. Many at my job talk about downsizing to a condo or townhouse and using the equity to enjoy their retirement years.

[ostampflee]

You need to remember, how much of the Economy is psychological. If people are worried, they don't spend money and the economy goes down.

So far its just been condos taking a shit kicking... looking at comparables of my house, the market seems even compared to March when we bought... the only difference is there is a lot more supply (we looked at two houses in Sooke, theres about a dozen now that meet our criteria). I just signed a new two year contract at work so I'm not exactly worried about moving away.

[fenge]

I think if anything, the media paints a rosy picture of the housing market. Especially when so much newspaper advertising is condo presales or whatever.

I have no doubt it's still hard to hire a guy to do siding on your house, but the larger commercial contractors I work with are all looking to pick up more work. 6 months ago you would get maybe one bid from a mechanical or controls guy. Now GCs tell me they get 3 or 4. It is definitely getting tighter out there.

Labour will get cheaper, lots will get cheaper (prices are going down, remember?) Building materials will get cheaper. We're at the end of a massive, worldwide housing boom. We've been building more houses than we need for a few years now, all across Canada. The reason you can't make money building houses anymore is because you have to compete with the thousands of houses for sale right now. Lots of supply, little demand. If building costs can go up by 20% a year, trust me, they can come down by that amount. Ask any career carpenter how easy it was to make a living in 1997.

I wanted to comment on the condo market. IMO there will be a short term correction because pricing is inflated. Long term I see condos as a good investment. They are an affordable choice for first time buyers. Especially with the new rules that demand 35 yrs and 5% down. Secondly a huge portion of our population is gearing up for retirement. Many at my job talk about downsizing to a condo or townhouse and using the equity to enjoy their retirement years.

But who's going to buy the $700k house that they are downsizing from, if the average first time buyer can only afford $250k or so.

[dustinb]

Wow, that 700 billion bailout didn't do anything. Markets are crashing everywhere, and now Canadian economists are saying big recession in Canada until 2010.

[RZ350]

Wow, that 700 billion bailout didn't do anything. Markets are crashing everywhere, and now Canadian economists are saying big recession in Canada until 2010.

Good. I have been looking forward to that announcement for months.

[stevo911_]

i hope the housing market can take a bit of a dump, as well as the american dollar, then i can get my motorcycle and go halfers on a house with my bro :)

[Enraged]

jebus, can't believe the drop today... if anyone has money to invest, start watching...

[Croatian7]

i hope the housing market can take a bit of a dump, as well as the american dollar, then i can get my motorcycle and go halfers on a house with my bro :)

Ughhh????? You do realize that the Canadian dollar is commodity reflected? Therefore the odds of a housing "dump" and a strong Canadian dollar compared to the American dollar is virtually zero.

[stevo911_]

i know, but it would be damn nice, i'd take either of the two gladly though

[Morgin]

Wow, that 700 billion bailout didn't do anything. Markets are crashing everywhere, and now Canadian economists are saying big recession in Canada until 2010.

Not that it is a great plan anyway, but lets be realistic - you think a piece of legislation signed on a Friday is going to have any discernible effect come Monday? It will take time for the credit markets to unclench and for the money to start flowing. Today's slides would have happened regardless of whether this plan is amazing or not. Everything takes time. No one said that the bailout would stop massive selloffs, but hopefully it can assist in getting shit back on track sooner.

This whole topic is so painful to listen to on the radio or see on the internet. On one hand you have people blaming Harper, on the other people are blaming the war in Iraq and Afghanistan for stretching our economy... it goes on and on. People act like the market has never corrected itself before. Economies are not perpetual motion machines that continue to grow. Gotta pay the piper now and then.

[fenge]

TD to raise rates on mortgages (http://www.reportonbusiness.com/servlet/story/RTGAM.20081006.wmortgage07/BNStory/Business/home?cid=al_gam_mostview)

I guess the other banks will be following pretty quickly.

On an unrelated note, who else thinks we're going to see a canadian bank go under this week?

[wdp_freak]

i hope the housing market can take a bit of a dump, as well as the american dollar, then i can get my motorcycle and go halfers on a house with my bro :)

u mean dale? but yeah im looking at the same thing however getting a house will be more difficult even though they are cheaper. Due to the fact that the bank will be very reluctant to give you a mortgage without a good cosigner.

[Morgin]

TD to raise rates on mortgages (http://www.reportonbusiness.com/servlet/story/RTGAM.20081006.wmortgage07/BNStory/Business/home?cid=al_gam_mostview)

I guess the other banks will be following pretty quickly.

On an unrelated note, who else thinks we're going to see a canadian bank go under this week?


We won't, because Canadian banks didnt overextend themselves with subprime and ARMs to unqualified borrowers, and as a whole they have much more reasonable and sustainable loaning policies. The Canadian banking industry is doing fairly well and will easily weather this.

[stevo911_]

u mean dale? but yeah im looking at the same thing however getting a house will be more difficult even though they are cheaper. Due to the fact that the bank will be very reluctant to give you a mortgage without a good cosigner.

methinks you think i'm someone i'm not
I havent been looking particularly seriously or anything like that, I'm still young and have lots of time, but i've got the cash/disposable income that i should be investing it somehow, just havent decided whats the best route for me to go right now

[Enraged]

i hear the best return on investment nowadays is hookers and blow.

[ostampflee]

With the volatility these days, I'm sure you could make a killing with a half decent option strategy.

[fenge]

Holy shit. Dow 8600.

[xsteinbachx]

I checked out the Dow a year ago and it was a 14096.xx

Nuttyy

[Enraged]

..........annnnnnnnnnnnnnnd Iceland is bankrupt.

well, not completely, but http://www.msnbc.msn.com/id/27097780/

[dustinb]

Canada just announced 21 billion dollars for banks that are almost out of liquidity....

[Victoria SiR]

All they said is that its available, not that they are gonna use it.

[ostampflee]

And it was to increase our banks liquidity so people can still get loans. The jobs numbers both here and down south weren't that bad and we're starting to see more bullish economic forecasts now.... unless you listen to the crackpot Jack Layton.

[rental_metard]

And it was to increase our banks liquidity so people can still get loans. The jobs numbers both here and down south weren't that bad and we're starting to see more bullish economic forecasts now.... unless you listen to the crackpot Jack Layton.

or Alex Jones

[dustinb]

I just ran across a story about GM and Chrysler merging. Near the bottom of the story they then mentioned the hard times automotive companies are facing right now because of the world markets. I was floored when I saw what Ford and GM shares closed at this Friday:

GM: $4.89 (lost half last week)
Ford: $1.99 (almost lost half last week)

They didn't say what Chrysler was at. But wow... wasn't GM years ago at like $70 or something? That's totally ridiculous.

[ostampflee]

Chrysler is owned by a private equity group... so it doesn't have to report earnings, etc. GM is damn near cheap enough these days that it could be purchased by such a group.

[gracefallen]

i hear the best return on investment nowadays is hookers and blow.

Especially when you just lost your full-time job.

Anyone else here get laid off today? I hope there's still some money left in EI...

[Enraged]

i didnt, but another guy at work did :(

[fenge]

Apparently we're at the lowest consumer confidence level since 81 or 82. It's gonna be rough for a few years, at best.

Get rid of your debt, if able. Don't make any major purchases for the next few months.

[sixthgear]

He's right, don't buy anything and shut up in your homes. It is the best thing to get the economy back on track!!

[fenge]

Buying a home or car will not save the economy, but if it makes you feel better go for it.

[MidnightMechanic]

Canada just announced 21 billion dollars for banks that are almost out of liquidity....

What you have to note is that the Canadian Banks are federally legislated by the Bank Act. That is the main difference between Canadian banks, and Joe Bob's Credit Shack down south.

The Bank of Canada is allowed, through drawdowns and redeposits, to drain and replace the deposited money from the Canadian Banks. This is a main component of Canada's monetary policy. The banks liquidity comes from our deposits, investments, etc.

So in short, our banks won't just fail, or declare bankruptcy. What will happen however, will be a complete slowdown in all industries, which will reduce our savings, which will reduce bank profits and liquidity.

[mr.slave]

He's right, don't buy anything and shut up in your homes. It is the best thing to get the economy back on track!!

wait. so like i shouldn't buy a new tv?i thought that was helping the economy by supporting teh stores or?

[sixthgear]

Buying a home or car will not save the economy, but if it makes you feel better go for it.

Oh sorry, I totally forgot you were an economist.

[fenge]

Yes, you should definitely rely on economists to guide you on your big purchases. Like Benjamin Tal, or Cameron Muir, who were both about as wrong as can be in their predictions for the last year or so.

In any case, you don't need to be an economist to know you shouldn't get into debt when we're on the brink of a major recession. Our economy didn't stop working because you didn't buy a big enough SUV last year.

[sixthgear]

So if you have a stable job and want to buy a house with a relativity low interest rate that is locked in for a house (say 5 years), how is this different than a year ago? Yes there is a slight chance prices could drop, which would be counteracted by higher interest rates which will make owning a house about the same cost wise. If someone has a job that is risky during a recession, then yes, be smart about your money. For everyone else, I would love to see it as business as usual as the worst thing in a recession is to stop spending. Switching to a saver from a spender isn't great for putting the economy back on track.

Yes, it sucks the americans screwed the world, but that doesn't mean we have to follow them into the ground.

[fenge]

So if you have a stable job and want to buy a house with a relativity low interest rate that is locked in for a house (say 5 years), how is this different than a year ago? Yes there is a slight chance prices could drop, which would be counteracted by higher interest rates which will make owning a house about the same cost wise. If someone has a job that is risky during a recession, then yes, be smart about your money. For everyone else, I would love to see it as business as usual as the worst thing in a recession is to stop spending. Switching to a saver from a spender isn't great for putting the economy back on track.

Yes, it sucks the americans screwed the world, but that doesn't mean we have to follow them into the ground.

#1) Housing prices are dropping because they were too high, and the average person couldn't afford them. If interest rates go up, prices will have to come down all that much more for people to be able to afford the payments. High interest rates, low prices. Low prices, high interest rates. It's always been like that.

#2) Why would you buy a house now? Houses in Victoria have come down about 2% every month since April. Every month a prospective buyer waits, the typical house comes down by $10,000 or so. It's very hard to argue with a number like that. Maybe Victoria will buck the trend, and we'll be the one city in the world where housing prices go up instead of down this year? :confused:

Recessions aren't terrible things anyways. Strongest businesses survive, yada yada.

If you're interested in housing related news in BC, vancouvercondo.info (http://vancouvercondo.info)posts a variety of local stories pretty regularly.

[Black SC2]

Fuck it, if you want to buy a house, buy a house. Every month you wait is a month spent letting finances rule your quality of life. If you're worried about how rate changes over the next few years can affect your ability to pay your mortgage, you're probably not in good shape to buy anyways. But to sit in a rental house and pay someone else while you speculate about the market is foolish. Worried about the value of your home going down? You can counteract a lot of it with sweat equity. There are ways around everything, you just gotta be prepared to take a leap or put in some effort from time to time.

[sixthgear]

#1) Housing prices are dropping because they were too high, and the average person couldn't afford them. If interest rates go up, prices will have to come down all that much more for people to be able to afford the payments. High interest rates, low prices. Low prices, high interest rates. It's always been like that.

#2) Why would you buy a house now? Houses in Victoria have come down about 2% every month since April. Every month a prospective buyer waits, the typical house comes down by $10,000 or so. It's very hard to argue with a number like that. Maybe Victoria will buck the trend, and we'll be the one city in the world where housing prices go up instead of down this year? :confused:

Recessions aren't terrible things anyways. Strongest businesses survive, yada yada.

If you're interested in housing related news in BC, vancouvercondo.info (http://vancouvercondo.info)posts a variety of local stories pretty regularly.

You are telling me the average house price has fallen 60K since April? And house prices will only go to what the market will support. There was enough people buying houses to warrant the prices. And Victoria traditionally is not like other housing markets.

Do what you wish, I will still be spending money as per usual.

[Enraged]

*cough*

http://photoshare.shaw.ca/messages/viewshow/12871963857-1220752802-77803/gallery/page/

[fenge]

Thanks Enraged. Yes, single family house prices have fallen about 60K since April.

April 2008: 630K average, 558K median.
Sep 2008: 549K average, 500K median.

Cue the "well it's probably not going to get much lower, Victoria is special" rhetoric in 3... 2... 1... :)

[sixthgear]

btw, were the same houses sold in Sept as were in April? Those numbers have always bugged be a bit as they are trends of houses within a range. Interestingly, exact copies of my house are selling right now for exactly the same price they were in April. The benefit of a new house is that there are bound to be others exactly like it so you can look at trends for the same house, not just the market as a whole.

Keep waiting to buy though, it is in everyone best interest.

btw, I live in Langford...the one you didn't circle as for having a price drop.

[dustinb]

Bumping to the top. Circuit City US and Canada (The Source) filed for Bankruptcy today. And mixed in with GM running out of cash by January... figured it was a good time to bump the thread.

[Victoria SiR]

Circuit City closing has more to do with the fact it just sucks than the economy.

[dustinb]

Circuit City closing has more to do with the fact it just sucks than the economy.

Agreed, but they are saying it was the economy that closed them. :p

[rental_metard]

how about gas being under a dollar. That scares the shit out of me.

[NashMan]

i love it

it be rad if 94 was there

[dustinb]

how about gas being under a dollar. That scares the shit out of me.

Enjoy it now, because I'm pretty sure it's going to sky rocket come next year.

[fenge]

8300 people lost their jobs in BC last month (http://www.canada.com/vancouversun/story.html?id=642fbf65-e77f-4790-9193-57f1620cbb9b)

Those numbers are supposedly skewed by temporary jobs related to the election, but 8300 people laid off this month is about 1 in 500 for the entire province.

i love it

it be rad if 94 was there

Is it just me or is the spread between 94 and 87 a lot more than it used to be?

[Croatian7]

i like home home and condo prices went up last month in victoria.

[Enraged]

sales fell off a cliff, so a few higher dollar value sales can really skew the numbers for the month.

ha, looked up the sales for oct 07 vs oct 08, more than a 50% drop in sales. a few more months of this, and prices will start dropping even more.

[dustinb]

i like home home and condo prices went up last month in victoria.

Just drive around and see all the "new price" signs on houses for sale. I severely doubt those houses went up in price, or that they'd advertise that.

[fenge]

Average SFD sales price was up in October due to several $2M - 3M houses selling. Median SFD price was down. The average price in Victoria jumps around too much to be a reliable indicator--especially when only ~175 houses sell in a month.

Sales were extraordinarily weak this month, no doubt because of the financial crisis which occurred started the beginning of October. Housing supply is now up to 8 months of inventory, condo and townhouses WAY up at 16 MOI.

It's nothing compared to Vancouver though.

[Croatian7]

Just drive around and see all the "new price" signs on houses for sale. I severely doubt those houses went up in price, or that they'd advertise that.


Some of the "New Price" signs don't really mean much. You can price a home 100k more than it is worth, drop the price $100k and advertise it as a 100k discount/price drop.

I did a real estate project/investment this past year where I subdivided a lot and built two IDENTICAL houses on it.

1st House - Sold in March, asking price: 440k, selling price: 440k, days on market: 20
2nd House - Sold in October, asking price: 489k, selling price: 467k, days on market: 63

Second house took 43 days longer to sell and I sold it for 22k less than asking price! Obviosuly that sounds a lot worse than the actual situtation.

I agree prices will fall and I am not going to be doing any real estate projects/investments for at least 10 months or so. However, prices most likely won't drop 15% from where they are currently and it is probably going to take some time.

[Benny95TA]

Is it just me or is the spread between 94 and 87 a lot more than it used to be?

Its not just you... when I used to drop 91/94 in the tank it was 4 cents more per octane level (87 > 89 > 91 > 94). The first jump in octane is now either 6 or 8 cents more.

[Enraged]

I agree prices will fall and I am not going to be doing any real estate projects/investments for at least 10 months or so. However, prices most likely won't drop 15% from where they are currently and it is probably going some time.

I'd be happy with even a 5% drop, as just that would save me $10k+.

[icanpolish]

Addressing the original question, some people are definitely pooched... autoworkers, certain business sectors, people who bought at the peak of the housing market, etc...

But that doesn't mean there isn't money to be made...

[sixthgear]

Addressing the original question, some people are definitely pooched... autoworkers, certain business sectors, people who bought at the peak of the housing market, etc...

But that doesn't mean there isn't money to be made...

You are only "pooched" if you purchased a house and need to sell it right now. Otherwise you are still ok.

[Croatian7]

You are only "pooched" if you purchased a house and need to sell it right now. Otherwise you are still ok.

Huh? I don't get it? That is like saying I bought $100,000 worth of stocks, now they are worth $50,000 but I don't need the money right now so I am okay?

You might not have to forclose on you home, but having a larger morgage than the value of your house would suck!

[sixthgear]

The house market will pretty much always recover. Unless someone needs to sell their house they can hold onto it and ride out the decline.

Your comparison to stocks is really not related, but yes having a mortgage larger than the value of the house sucks, but that has happened before and it will happen again.

[Croatian7]

Yea, the stock market always recovers as well, so unless someone has to sell their stocks they can ride out the decline.

[hud 91gt]

Not if the company goes ka-put :p

[oldsnail]

A few Save on Foods within a month
One of them being duncan

[fenge]

It's way worse in housing, because you're leveraged by all the money you borrowed.

Say you put $100,000 in stocks. Market tanks by 30% and you lose $30,000. Shit.

Say you invest that $100,000 in a 3-bed house plus suite worth $500,000. Market tanks by 30% and you don't just lose part of your cash, you lose it all, and then some. You lose $150,000.

Now your house is only worth $350,000, you're paying interest on a $400,000 mortgage, and your $100,000 in savings is gone. Even worse, the bank has you by the balls. If you need to sell, you can't cover the money owed to the bank. You HAVE to keep making the outrageous payments you signed up for, knowing that your neighbours who bought at the bottom are paying way less than you, every month, for the next 30 years.

Being in this situation weighs on people.

This is already the fastest decline in prices in the last 26 years (http://www.reportonbusiness.com/servlet/story/RTGAM.20081114.wmls1114/BNStory/Business/home?cid=al_gam_mostview), and those prices have only been going down for 6 months. Wait another six months, and this will be the fastest decline we've ever seen.

I'm not trying to act like the sky is falling, but I get pissed when I read shit like this in our newspaper (http://i34.tinypic.com/2sb5ok0.png). People are still out there trying to convince us to buy into this market when they know that it would very likely ruin us.

Bitches.

You know what REALLY pisses me off? If someone decides to walk away from their house by declaring bankruptcy, they get fucked. Fair enough. Everyone who he owed money to gets fucked. I guess that's fair too. The only guy who doesn't get fucked is the guy who sold him the mortgage. Because it was probably a CMHC insured mortgage, meaning they just raise taxes to cover the loss. Meaning our tax money goes to paying off a bank that made a bad choice in lending some guy more mortgage than he could afford.

Fuck!

[dustinb]

Holy shizit, US lost 533,000 jobs in November...
http://money.cnn.com/2008/12/05/news/economy/jobs_november/index.htm

[Great68]

How can anyone deny that houses are overpriced... They got too expensive too quick and now they're being corrected.

I love it, I'm contently amassing money in my bank account just waiting until prices hit their floor.

[OffroadZuki]

I just read that too...you know...it's kind of funny.

1: Everyone's saying "BUY BUY BUY!!!," if you don't buy and wait for prices to go down you're contributing to the recession/depression around the corner.

2: Everyone's saying how horrible of a fate the downturn is.

I don't know about you guys, but the downturn has been nothing but GREAT to me. :)

- I drive a LOT (about 40-50K a year)...even with my gas-sipping car, the difference between gas at 69.9 - which is what I filled up at yesterday - and gas at 1.40 works out to $2,800 a year...that's a SHITLOAD of money I'm saving. That's something you notice month-to-month.

- My student loan and line of credit are tied to the prime interest rate, which is the lowest in quite some time, saving me a few hundred bucks more per year.

- With the housing market slumping, my g/f and I might actually have a chance to buy a house (if I ever decide to settle down lol), something that was going to be difficult when the AVERAGE house in Vic was going for nearly half mil. Even if I keep renting for a while ('cuz I move around so much), rent will follow house prices in the downhill slide, which is good enough for me.

- The price of consumer goods is going down, that's just a no-brainer. And yes, I AM holding off on buying stuff (ie: GPS, etc) and waiting for the deflation and price slashing that's already happening and they're predicting more of to hit full-force.

On top of all that, my company slashed jobs a few years ago, which means there's no threat of what CanWest-Global did a few weeks ago. I've been at the paper the third-longest (for reporters) and been with the company the second-longest (also for reporters), which means that as long as I don't get my ass fired, I won't get laid off.

I fail to see how this massive economic turndown is anything but a heaven-sent and much-needed and much-appreciated break for me :)

[fenge]

Holy shizit, US lost 533,000 jobs in November...
http://money.cnn.com/2008/12/05/news/economy/jobs_november/index.htm

Canada's right up there too...
http://business.theglobeandmail.com/servlet/story/RTGAM.20081205.wjobs1205/BNStory/Business/home

[dustinb]

Canada's right up there too...
http://business.theglobeandmail.com/servlet/story/RTGAM.20081205.wjobs1205/BNStory/Business/home

Wow, Ontario got screwed...

[OffroadZuki]

"Even the silver lining of the current job numbers, the remarkably low unemployment rates in Alberta and Saskatchewan at 3.4 per cent and 3.7 per cent, is at risk. As energy prices fall, Western Canadian companies are scaling back their capital budgets and cancelling and postponing major projects, and some economists are warning that the oil and gas sector will see slumping employment as prices continue to skid. "

Interestingly enough, they fail to point out that Alberta's unemployment actually went DOWN 0.3%...(was 3.7%)

on the bright side...crude is pennies above $40/barrel :D That lowered Ford Lighting on 20s that's been collecting snow on a dealer's lot is starting to look pretty damn good lol

[dustinb]

Predicting 475,000 job losses in December for the US, and they're also predicting steady job losses into 2010...

[Enraged]

How can anyone deny that houses are overpriced... They got too expensive too quick and now they're being corrected.

I love it, I'm contently amassing money in my bank account just waiting until prices hit their floor.

you're not the only one. I can't wait to see what happens with real estate in the spring...

[Nightwalker]

With the american dollar back up compared to Canadian, I think things don't look too bad for BC. Plus, our banks are fine.

[ZXINSANE]

yuppp

[fenge]

With the american dollar back up compared to Canadian, I think things don't look too bad for BC. Plus, our banks are fine.

Oh, I was wondering why our banks issued $6.5 billion worth of common and preferred shares last year. It's because they're fine?

lol

[Nightwalker]

Oh, I was wondering why our banks issued $6.5 billion worth of common and preferred shares last year. It's because they're fine?

lol

Compared to every other country in the world, yes. Canada has recently been rated the safest and soundest jurisdiction for banks globally:
http://www.weforum.org/documents/GCR0809/index.html

There will be -no- bailouts as none are needed.

[projectcivic]

Interesting..... maybe the world won't come to an end this year?


http://news.sympatico.msn.ctv.ca/abc/home/contentposting.aspx?isfa=1&feedname=CTV-TOPSTORIES_V3&showbyline=True&date=true&newsitemid=CTVNews%2f20090122%2fboc_recession_0901 22

[sixthgear]

How can anyone deny that houses are overpriced... They got too expensive too quick and now they're being corrected.

I love it, I'm contently amassing money in my bank account just waiting until prices hit their floor.

Too bad the only way to know they have hit the floor is for them to go up eh.

It is said that people only buy when the price is going up, that is more true than people know. :-)

[dustinb]

Too bad the only way to know they have hit the floor is for them to go up eh.

It is said that people only buy when the price is going up, that is more true than people know. :-)

I bought when prices were rock bottom. $130,000 for a house that is now assessed for more then $400,000. Woots!

[sixthgear]

I bought when prices were rock bottom. $130,000 for a house that is now assessed for more then $400,000. Woots!

Profit not taken isn't really profit though :)

[dustinb]

Profit not taken isn't really profit though :)

Agreed, and I have no plans on selling the house. But it's nice having the banks wanting you to use your equity, and I can just say, meh.

:p

[Great68]

Too bad the only way to know they have hit the floor is for them to go up eh.

It is said that people only buy when the price is going up, that is more true than people know. :-)

Meh.

I can't see them going back up for quite a while.

[projectcivic]

Well maybe they won't jump as fast as they did in the past few years but I know for one example that my moms office is busy again. They were dead in November and even a bit in December but since the beginning of the new year business seems to be picking up again. Mind you she said its still not what it was 2 years ago but she is saying things are defanitly moving better. I guess we will all have to wait and see what happens. In fact she just got into a bidding war on the weekend on a property that has been on the market for 120days with no prior movement. 3 bidders on the same place.

[ostampflee]

We're hiring right now and I've getting more resumes in a day than I've gotten in a week in the past.

[AJL]

We're hiring right now and I've getting more resumes in a day than I've gotten in a week in the past.wow where do you work? something similar was happening in our office.

[Enraged]

we just laid off another guy this week. sucks, he was a nice guy to work with.

looks like the Obama bounce died off...

[projectcivic]

Where do you work?

[ostampflee]

wow where do you work? something similar was happening in our office.

I work for a small Japanese software company. 120 employees total, 15 or so in North America.

[Enraged]

Where do you work?

small (now less than 10 fulltime employees) naval architect office.

a big change from last year when we were looking at hiring 10 people and building a new office...