Por Favor

Buyers -do your self a favour. Keep calm!

Just because the weather is hot doesn't mean you have to be frightened into thinking we are in a hot market...we aren't.

Sales are dropping fast.

Sure listings are not exploding but sales are dropping so fast that the MOI are moving up rapidly.

So if you feel the compulsion to buy...do this:

1) Ask how much the seller bought the property for. You may be shocked at the mark-up some people are asking for just a few years of sitting on a property with-out putting a lick of paint on a piece of wood.

2) Bargain! What can you possibly lose. There aren't thousands of buyers bidding against you now, so be cheap. Get a realtor who is on your side, and doesn't mind putting in a few low-balls.

That's if you feel you have to buy.

And just in case you think the listing price is arrived at by some scientific formula... There is a property, an Island in fact with a stunning house, which was listed for $29.8 Million just a couple of months ago, then it dropped to $19.5 M and is now a veritable bargain at $14.9 big M's....if the Max numbers come up for me this week-end, I may go over and have a look :)

Mis-Keyne-ceptions...

OK that was a very weak pun. I notice a lot of posts on various blogger sites decrying Keynesian economics as the cause for the financial mess the world finds itself in. Clearly they don't understand Keynesian economics or how we got where we are.

I am not going to waste too much of your time explaining it, there are many excellent sources of info on his theories, including Wikipedia.

However here is a breif summary, Keynes believed in a fairly well-regulated and Liberal form of capitalism. He believed that Government policy should be used to temper the more rabid and blood-thirsty aspects of free-wheeling capitalism and it should also be used to further equality in society.

Left to it's own devices Capitalism would devour the weaker members of society.

The free-wheeling Twenties which burst into the climax of the Great Depression proved him right and Governments embraced his principles.

However in the late 1970's Keynesian economics started to be abandoned by Western Governments, most notably Margaret Thatcher and Ronald Reagan. They fell under the spell of Milton Friedman, the anti-Keynes. He was a monetarist. His creed was a belief in the free market and it's self correcting mechanism, as well trust in man's greed as a force for progress.

His mantra was less or no Government intervention and regulation, back to the free-market days of the roaring twenties when the Rich and Powerful had very little to impede their wealth accumulation.

The period from 1979 to 2009 was pure monetarism in many countries. Even in Europe which was more Keynesian, they fell under the spell of monetarism- allowing banks, financiers, hedge funds and traders (AKA gamblers) free reign from regulation. An odd combination of rich social programs and reduction in taxation and regulation which inevitably leads to disaster- as it has done in The UK, Greece, Ireland etc.

Obviously it didn't work. Expecting people to self-regulate based on enlightened self-interest was as likely to succeed as Communism was, which was based on working for the general good. Both were flawed philosophies, except one failed before the other.

Iceland which followed Friedman's teachings slavishly is bankrupt, Sweden which rejected them has fared pretty well.

In the US there have been many cases of Hedge Fund managers reaping Billion Dollar pay checks for taking huge, unregulated bets and then when they lost the bet- the US tax payer ponied up the whole cost (via the $120 Billion AIG bail-out) leaving their fortunes and those of their high net worth clients 100% intact.

This is exactly the opposite of what should have happened. Free-market economics dictate that if you lose, you lose big and without intervention. What happened (under Monetarist Bush) was the exact opposite. The big players were not allowed to lose. Their deposits were protected, their institutions flooded with free money.

THAT IS NOT KEYNESIAN ECONOMICS.

Keynesian economics is being attempted now in the US, but the country is too bankrupt from the failed Monetarist experiment.

I am not trying to put-down Friedman. He had some interesting views on liberty and on the anti-drug war. However his faith in greed alone being the best motivating drive for mankind was IMVHO erroneous.....

Capitalism is the astounding belief that the most wickedest of men will do the most wickedest of things for the greatest good of everyone.
John Maynard Keynes

Well they did it...

Carney took a strong laxative and was able to squeeze out another 0.25%.

Now how will this affect housing? I think it will be a push. Rates are still low and in fact by raising short rates, long rates may stabilise as bond-holders buy into the B of C's inflation fighting rhetoric.

Though of course we are still, at 0.75%, well below the inflation rate.

So variable mortgages should go up, but fixed, long mortgages should stay around where they are now.

What happened in the US as Greenspan raised rates 16 X! (after telling folks to go short and variable in their mortgages - a criminal act IMVHO) was that the buyers were so marginal that they could not afford the increased variable rates or the leap to a fixed when their annual renewal came up.

We will have to see how strong the Canadian buyers are. In any case the message is out..rates are a movin' up.

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Just got back from a short trip to the Gulf Islands. Talk about D-E-N-I-A-L. Some of these Islands have seen the complete disappearance of recreational and US buyers at the same time. Many properties have been on the market for...wait for it...three years and are getting shabby..

Unfortunately sellers are looking in the rear-view mirror for their price points and are very slowly following the market down. Instead of taking a good chunk off the price...like one place on Pender which sliced and diced from $1.78 to 990K and just got sold (don't know the price)

Of course the higher ferry prices are probably adding to the woes. Couple of hundred bucks for a family and car to go and come back to most of these places.

M.I.A. but will be back soon

I have been missing in action here lately, I do know that. I have been extremely busy with summer activities and enjoying spending time with my babies. E is going to be starting preschool this year, so I am trying to fit in as much as possible before he takes off...sniff, sniff:( I am looking forward to spending some quality time with S.R. though.

I have had very little motivation in the world of crafting and projects. I am in the middle of a project that has been sitting in the laundry room floor for over a week now. Something is missing and I don't know what to do to finish it off, so it sits:o) 

I have been "putting up" lots of veggies in the freezer and tried my hand at canning some pickles the other day. They turned out so good that the hubs won't stay out of them. He has gone thru 2 quarts in about 4 days...by himself:o)

I will eventually get something posted on here, but for now, I am focused on my sweets. Taking them to see a free movie today. We need to take a break from the sun. We got a little roasty toasty yesterday at the water park. I look like a raccoon today:o) Lots of makeup for the next few days;o) Have a great rest of the week!!

Going out of Town for a Week

Lets hope the stock-market stays strong enough for the B o C to acquire the cajones to raise another 0.25% (whoop de doo!) on the 20th.

We should have some interesting numbers for July with some areas of significant weakness showing up..look at Larry's Kitz condo prices for a taste.

No SFH sales in West Van yesterday with half a dozen listings and the same in price reductions.

Remember on this blog we are waiting for signs of a gradual correction, not Armageddon which causes wide-spread financial hard-ship and bankrupts the credit unions (that would be us).

We also don't blame any group for the lunacy that has led to this present situation where we are about the most unaffordable city in the western world. The policies that have helped us get here are about done. The local and Federal Governments are in trimming mode not spending and sloshing money around mode.

The Central banks of the world are tightening from their ridiculously low rates, realising late in the day that these low rates are encouraging the very speculative nonsense that got us here.

This credit crisis was caused by Governments in the US ignoring the huge bubble in housing and in fact fanning the flames. What did we learn from that? Nothing. we are heading the same way and when we burst our political leaders will be blamed, and tossed out. Rightly so. However our own greed will be papered over.

Instead people will be lining up to ask for bail-outs from their own mistakes.

This bubble is nationwide. We are at all time highs in Montreal and near that in Ottawa and Regina. Anyone wishing to blame one wealthy group or another, conveniently ignores the fact that it is a national phenomenon. They may affect small segments of the market, but this is the big kahuna jumping.

Keep them listings coming and stay well.

See you next Tuesday.

Living Room Revealed

I'm not sure if it's the moment you have all been waiting for, but I have been chomping at the bit to show you guys...The vinyl bible verse above was the finishing touch...for now;o) I'm gonna let the pics do the talking for themselves. 

Not sure if you remember what the before looked like...a little something like this:

and this:

But now it looks like this:

and this:

wait, it looks better without the blinding lamp on..

I will be changing out the wreath..too blendy, but it's all I got for now:oP

and how 'bout this?

Love the little pictures above the ottoman.

They are from an estate sale that my mother hosted.

A little reading nook...needs a small ottoman...putting that on the "list of future purchases."

Fireplace view...what's with the lamps glowing in all these pictures? And things are lookin' a lee-ttle fuzzy:o)

A different angle:

And I had to get a close up of these cuties. I bought them at Hobbly Lobbly for $1 each in their 80% off section. Thinking they may be "re-pigmented" soon;o)

And one last look with the Bible verse displayed ever so sweetly above the entertainment center:

O.K., so much for letting the pictures do all the talking. What can I say, I have a problem. I need a t-shirt that says, "I'm talking and I can't shut up":o) 

Hope you have enjoyed my living room makeover!! Would love to hear your comments....just so you know, there will more than likely be a few changes made...soon...just sayin';o)


Participating in The CSI Project Before and After Party


Linking up to Weekend Wrap Up Party over at Tatertots and Jello & Furniture Feature Friday over at Mustard Seed Creations.


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Make sure to check out the current giveaway here!!!!

Bit and Pieces

Nice jobs reports.

93,000 new jobs in June for all of Canada. Mostly in Healthcare and Service industries, which are not really revenue generators.

Also most of the new jobs came in Central Canada whereas BC actually lost jobs and the unemployment rates inched up 0.3%.

The Canadian dollar ramped up the last few days (probably on leaked numbers) and then finished it's foray up today- all on the expectation that the B of C will push rates up another dizzying 0.25% when they meet on July 20th.

What now? Can the B of C Not raise 0.25%? Does it really matter either way? Will it effect housing in the slightest.

Who knows? It may bring out the last chicken little's squeezed into buying by the rapid rate rise 0.25% all the way up to 0.75%!

In any case, whether they raise or not, probably depends on what happens to the stock-market and price of oil and Re between now and then (only two weeks away I know) , since Central Bankers main job has now become proper-uppers of asset prices.

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The BC Government has finally admitted that they spent 50% more than budgeted on the Olympics. Nearly a Billion bucks. Which is a lot, but is the same as the price tag for the do-nothing-G20-summit we had in Toronto.

Of course they did ignore all the money Crown corporations spent on the Olympics and the hugely expensive infra-structure projects because...well because...they could be ignored.

As Colin Hansen said - it was money well spent. Look at the huge rebound in RE because of the Olympics. Wait a minute, RE has been on a down-ward track since the big-O ended.

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Victoria's not-so-Secret

The numbers from Victoria are out too. Much higher inventory and Much lower sales while prices stagnate.

A very odd state of affairs. Imagine you go to buy a hand-made Christmas ornament at a fair. You see the fellow has five for sale and you ask the price. "It's a bit expensive..I will think about it".

So you come back next week and the fellow has sold one ornament and meanwhile he has made 5 more. So now there are nine. You ask him the price and he sheepishly tells you the same amount. What do you do:

A) Pay the price he is asking.

B) Bargain a bit since he is obviously asking more than the market is willing to pay and his inventory is building up rapidly.

C) Forget about buying for now and wait and see what happens next week, or in a few weeks even.

The buyers now are doing A! Counter-intuitive IMVHO.

Here is the report from the VREB for June 2010:

Greater Victoria home buyers have a growing number of properties from which to choose as inventory levels rose to 4,730 properties available for sale at the end of June - up 25 per cent from the 3,794 available properties a year earlier. Sales, meantime, softened last month while overall prices showed little change.

A total of 625 homes and other properties sold in June through the Victoria Real Estate Board’s Multiple Listing Service® (MLS®), down from the 695 sales in May. There were 946 sales in June of last year.

25% more inventory than last June.

10% Less sales than May.

34% Less sales than last June.

Bama Painting

Not all of you are going to appreciate this painting, but the hubs surely did:o) Remember my Dragon Fly Painting? Well I painted this little pup at the same place. There wasn't really anywhere to hang it in the office, so he took it to work with him:o) I hope that you guys are doing great. I am "planning" some projects for the weekend. I am absolutely DYING to paint another room. I've got the painting bug:o) Have a FAB day!

OKANAGAN in full-out bear country

I was waiting for the Okanagan numbers patiently and was rewarded.

Here they are

Here's what the board had to say today:

News
July 7, 2010 Shuswap Housing Market Shifts in Favour of Buyers
Sicamous, BC

July 7, 2010 Central Okanagan Housing Market Moves into Buyer’s Cycle
Kelowna, BC

July 7, 2010 Buyer’s Cycle Continues in the North Okanagan Market


Here are some high-lights for the Central region ie Kelowna:

1) +5.7 % more listings than last June
2) -21.7% less sales than last year.
3) 346 sales with a total of 5793 listings = 16.7 months of inventory

In the North Zone the number is 2824 listings and 130 sales = 21 MOI

In the Shushwap Zone we have 29 MOI.

These numbers are so astounding that I have checked them several times. Please feel free to confirm or refute them

Despite lots of graphs on the site, there doesn`t seem to be a mention of average price, HPI, Median price etc. I guess there are too many sub-indices and smaller communities to make it useful.

The bull sure looks to have been slaughtered and slathered in BBQ sauce and is being cooked to a nice sizzle.

Tuesday Tutorials-Distressing Curtain Rod Holders..& a Sneak Peak

Sorry that I am late with the tute:o) The kids have been a little sick, and I just now was able to muster up the energy to sit down and type. This isn't much of a tutorial, but I think you'll get the general idea. So....

Here are some curtain rod hangers that I bought at a yard sale last year. I haven't known quite what to do with them, until I realized that nothing is safe when there is spray paint around:o)

The before picture does not exist b/c I didn't take one, but I did not take the time to spray the back, so this is what the finish was:

A sort of dark cherry finish. I think I bought all 4 for $5, maybe??

Anyway, I spray painted them with some white that I had out in the garage and they all turned out like this:

Now, I thought that would be it...hang 'em and be done. Then I realized that I missed....a lot....which you can't tell from this pic:o) So I decided that I would distress them. That way you would never be able to tell the difference. All you need is some sand paper. Rough up all the edges and make sure to really dig thru the recessed parts. Take as little or as much as you please and you should come up with something that looks a little like this:

I didn't take too much off. Just enough:o)

All four beauts:o)

And now for a sneak peek of the wall color...

Oh yeah, and you can see the rod holders hung:o) I haven't quite got all of the accessorization done, so you'll have to wait  a tiny bit longer;o) I know the suspense is killing you:o)

Some Honey for the bears

The benchmark is out and it shows enough divergence for both bears and bull to be able to toot their horns.

Benchmark is down. So was the average SFH BTW. But a few big sales skew average, so benchmark is even more reliable IMHVO.

Here is the whole package from Mike Stewart's site:

REBGV site

Nothing too dramatic. House prices have stalled and we are now waiting for the next move. No crash. No run-up. Just treading water. Maybe Chad will be right and we just stay here for two years.

A few comments:

Looks like the specuvestors have left Squamish. West Van is now down for the last three years on attached and detached and Maple Ridge is also down over the last three years.

Once again, nothing too dramatic. The market has definitely moved into a different place, with MOI in the 6's, prices stable at best and a huge swathe of listings pulled off the market...

RE moves at glacial speeds. 2008 was an anomaly, a once in a life-time event. The denouement of speculation, which was quickly aborted by the governments coming to the rescue of their pay-masters.

Here are some excellent graphs, as always, from Mohican:

Mohican's site

A Winner and An Outfit

We have a winner! The camera strap cover goes to Jana! I'll be in touch with you soon to hash out the details! Congratulations!!!

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I hope that you all had a wonderful Independence Day....ours was "eventful." The babies are sick, so you can imagine how wonderful things are around here right now:o) We did have a moment last night though, that was serene, and almost perfect....back porch, lights were out, citronella candles lit, hubs was playing the guitar, fireworks in the background(so thankful we live out in the country and there isn't a ban on fireworks), and the kids were wrapped up in their blankies(with fevers) each snuggled up in someone's arms. It was perfectly imperfect. I wouldn't have traded it for any other moment. 

I know that I have been sharing a lot of outfits here lately, but usually in the summer time I make a lot of clothing. Summer clothing is much easier to make than winter. Some friends of ours that attend church with my family just had a sweet little one, and I wanted to make something for her. I had this project sitting in my "to-do" basket, originally intending for S.R. to wear it...she obviously got bigger and so there it sat....for over a year. Then baby Cora came along, and I new it had to be for her:o)

I love eyelet. The lace is vintage...something my mother handed down. I can't wait for baby Cora to wear it. Hopefully she will be able to wear it before it turns cold. 

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Tomorrow is Tuesday Tutorials. I'll be sharing a lamp revamp. Enjoy your day!

linking up to Just Something I Whipped Up Monday

Speculation can kill...

The rampant housing speculation in this city has made it the number one industry, topic of conversation and has brought riches to some and misery to others.

There have been many examples in the blogs of locals who have bought multiple units, often with Government backed insurance (? Government blessing too) and have benefited, along with the RE-Industry from this speculation.

Clearly there is housing demand. Clearly the population is growing. So there is pressure on housing stock and prices. Since wages are not keeping up, a greater % of income is being spent by buyers to service their purchases.

The Government cares not one bit that buyers are having to spend 50,60, 70% of their after tax income on servicing mortgages for these bloated assets, but they will quickly run to act at the first sign of significant weakness.

Anyhow if you think that the system is rigged in favour of speculation, and that is causing those wanting to get into the market hard-ship..it could be a LOT worse.

How about speculation that leads to starvation and death. And I don't mean the international arms-dealers (some of whom I hear are based in Vancouver)

We are a global economy and a suspender-clad trader sitting in an investment bank in New York, buying grain for a bet, is literally taking that grain off the plate of a poor person.

Goldman and Friends take on the poor.

And if the bet goes wrong, Uncle Sam will be there to help pay the Investment banks losses. Nice to have

Friends in high places

Our current political system is set up to protect powerful speculators, here and in the US.

21st century trick ...

Once upon a time, there was a gasoline called 97. The cost of this item was $1.80. One day, the governing body wanted to increase the price to $2.10. However, the governing body knows that if they simply increase price, that will affect their popularity. Which in turn affect their eligibility to continue to be governing body in next election.

Hence they come up with a perfect idea. They first introduce another brand called 95. Actually this is a much lower quality product than 97. In short, 97 simply means there is at least 97% of pure petrol in the gasoline. On the other hand, 95 only has 95% purity. However, they push out 95 as if it is a better quality product. They even add some 'addictive' into 95 to justify their claim its a better product. It was presented in a way that 95 will replace 97, and stay at the same price at $1.80

More than 90% of the consumer fall for it. Hence the transition of 97 to 95 went through smoothly. Majority of the consumers pay the same price for a lower quality gasoline while thinking they enjoy a great quality petrol. This is the power of marketing ...

A few more months pass by, its about time to gain even more profit. Hence 97 is released to the market again. It was released silently and the price of 97 is $2.10. Now this time they leave it to individual vendor to tell consumer how 97 is better than 95.

16.7% of profit has been gained without a single complain from the public. You have to admit this is a fantastic marketing gimme. Even if you see it coming like I did, even if you wrote letter into the authority request for action taken .... but the majority of the consumers were falling for it, hence there is really nothing you can do about it, like I was, no matter how hard I tried. We just have to admit ... it was a gimme well played.

I waited more than 6 months to release this article. What do you think ? Do you still think this governing body has taken good care of your interest ? Or do you believe this article has some truth ?

Jigging...

Jigging is a form of fishing where the lure is moved up and down in the water until the fish strikes.

Looks like that is exactly what is happening in our RE market. A little movement up and a little down, until a buyer gives up and strikes...

We were down on detached in May but up in apartments. Now we have a reversal, down in apartments and up in detached.

These are average prices, and are from Larry Yatter...much kudos to him again for being the first out with these.

Average prices from Yattermatters

A little up and a little down - jigging. BTW- I will say it again, as I have said before, I cannot see how the B of C can raise rates. With a shaking hand and sweaty armpits they raised it 0.25% and now we have enough weakening to make them regret even that.

What we bears will need to depend on is (in no particular order):

1) Weakening economic out-look making housing even more unaffordable despite these low rates.

2) A change in investor sentiment. Two months of drops would have done it. And maybe bench-mark and median will support this. However we may have to wait another month. Even head-lines of economic weakness may bring caution.

3) A reduction in off-shore demand. Lets watch this as an indicator:

Shanghai market

4) A retrenchment in Government spending. Harper is already talking about pulling out of deficit and you can expect Provincial cut-backs to continue too.

1 and 4 are double edge swords. Who wants RE to drop because our neighbours are losing their jobs? It would have been better to raise rates, nip the monster early and then drop rates again with the next weakness (which may be starting already)

But it was not to be. We can blame the politicians, but we want everything and they give it to us.

Victoria sales/listing stats