Anon (wish you would pick a name) said :
One more thing adds to the spring bounce. In the chinese media. They report shipload of chinese investors are buying. Canadian dollar has gotten a lot cheaper. Overseas chinese investor has more wiggle room than us even if the market drop another 20%.
If you earn a paycheck here in vancouver. Various taxes have already eaten 40%. I feel it is harder and harder to get by.I myself already cut one of the family cars. So the government has one less thing to tax me. Family finance really doesn't really add up.
If anyone interested, I can let you know how much I spend and how much i earn every month. As I think a lot of people are in the same boat like me trying to make ends meet. However, both political parties do not seem to get it.
Fish, I can see you have soften your bearness. I guess this is the reality out there. I've also given up my hope for affordable housing in Vancouver. We will probably buy the end of this year as all my reasons to delay the purchase have proven "wrong".Good health to all.
Lots of stuff there....
Firstly I agree, when folks come from areas where they haven't paid taxes it makes it tough for the locals to compete after paying 30-40% in taxes. It's nice to get their money here, but it also pushes up housing costs for those who live and pay the taxes here. It is certainly a double edged sword.
China is such a behemoth , that I have no doubt it does and could have an even bigger effect on Vancouver house prices, just as US buyers/investors were the main drivers of Whistler's explosion over the last ten years. However I haven't seen a huge influx of wealthy Chinese investors as of yet.
So I have become a 'softer' bear'...eh? :)
When I started this blog a year a couple of years ago, I was a rip-roaring no holds barred bear. The price inflation in RE was just crazy and I tried to warn folks to be careful.
We went higher and dropped down and are now back to the levels when I started the blog, or down a few %, but 5 year fixed mortgages have dropped so much that affordability has improved. Am I just as bearish?
Well I am worried. Not worried, like you, that I may have missed the (tiny) window of opportunity to buy and prices will now sky-rocket again. I am worried about the over-all economy.
This is no ordinary recession.
- In previous recessions I didn't know anyone who had lost their job and couldn't find one straight away. This time, I have several friends and family out of work and looking.
- I told you that once the election was over, we would learn the truth about the economy and cuts would come. Well today we learnt that there will be some cuts as Provincial government income drops. e were also told that the economy will contract 3% in BC instead of the previously forecast 0.8%. Big difference!
Why is it that our governments never save for a rainy day, but spend every penny in good times and then have to cut spending at the worst possible time, right into the teeth of a recession?
Anyway anon. I think you WILL see lower house prices. I don't think we are out of this mess by a long way. The only reason we have not collapsed, is because the Central banks are throwing everything they have at this. Low rates and even buying auto loans from lenders. The ship is still listing badly despite all the baling.
Good health to us all, indeed. I have learnt first hand how important that is, more important than whether you own or rent or timing RE.
This will be my week-end post and I will add to if anything comes to mind.
How bad could things get?
Well here's how bad they are in some parts of the US
House-Price Drops Leave More Underwater by Ruth Simon and James R. Hagerty Monday, May 18, 2009 Wall Street Journal
The downturn in home prices has left about 20% of U.S. homeowners owing more on a mortgage than their homes are worth, according to one new study, signaling additional challenges to the Obama administration's efforts to stabilize the housing market.
The increase in the number of such "underwater" borrowers comes amid signs that falling prices are making homes more affordable for first-time buyers and others who have been shut out of the housing market. But falling prices also make it more difficult for homeowners who get into financial trouble to refinance or sell their homes, and for others to take advantage of lower interest rates.
For instance, fewer will qualify to take advantage of a key component of the Obama administration's plan to stabilize the housing market. Under the plan, announced in February, as many as five million homeowners whose loans are owned or guaranteed by government-controlled mortgage giants Fannie Mae and Freddie Mac can refinance their mortgages, but only if the mortgage loan is a maximum of 105% of the home's value. Government officials are considering an increase in that limit.
"It's a question that we're looking at," said James Lockhart, director of the Federal Housing Finance Agency, which regulates Fannie and Freddie. Real-estate Web site Zillow.com said that overall, the number of borrowers who are underwater climbed to 20.4 million at the end of the first quarter from 16.3 million at the end of the fourth quarter. The latest figure represents 21.9% of all homeowners, according to Zillow, up from 17.6% in the fourth quarter and 14.3% in the third quarter.
"What's going on here is that you don't have any markets that have turned around and you have new markets, like Dallas, that have joined the ranks" of communities where home prices have fallen, said Stan Humphries, a Zillow.com vice president. Borrowers who owe far more than their home is worth may also be less likely to participate in another part of the government's housing plan, which provides incentives for mortgage companies to modify loans to make payments more affordable.
Thomas Lawler, an independent housing economist, said borrowers who owe 30% more than their homes are worth are far more likely to walk away from their property than those who owe just 5% or 10% more and expect prices to rebound. More than one in 10 borrowers with a mortgage owed 110% or more of their home's value at the end of last year, according to First American CoreLogic. There are some recent indications that the housing market could be beginning to stabilize.
% of Homes with Negative Equity
Las Vegas 67%
Stokton Ca 51%
Modesto Ca 50%
Vellejo Ca 46%
Over-all US 21.9%