Bits and Bobs

1) China's RE bubble is in trouble. This is critical for us here in BC. This guy says..'get out of China'.

IF he is right, commodities will be in big trouble.

2) Mixed picture on the prices from Larry- some places like Coquitlam are down big while others like East Van are up big, even with lower sales. Well, we will know in a few days what the average and benchmark numbers are.

3) Make this site your RE hub. This may not be the best or most high tech site, in fact far from it :)

but I have listed all the best site here >>>>>>>>>>>>>>>>>>>>>>>>>>>>>>

And you can see in an instant when they put up their posts.

4) Ads. Well readers I know you are interested in the ad experiment and I did promise to tell you how rich I got from throwing the ads up. I have made a total of $39 from ads since I signed up with Google Adsense two month ago. In fact I haven't made anything since they only pay when it gets to $100 and then after you jump through a number of hoops. SO what say you all..since the return is so minimal shall I get rid of the ads and spare you all the distractions. I will be swayed by your comments.

Retire 55 or 60 ?

Now even the star has written article to support the idea to postpone retirement age from 55 to 60.  It brought up a few points that seem inevitable but . . .

every sensible personal finance guy would feel something has gone wrong somewhere.

The fact remains that retiring at 55 in today's world seems a waste. The mortality age for Malaysians has risen

Since when the definition of wastage of my retirement is up to anyone else to say ?  I may live longer and what is that got to do with you holding my money longer than you have promised before ?

In the advancement of personal finance world, we are talking about retiring at 40's.  Since when retiring later become a good thing ?

The retirement age in Indonesia and Thailand is 60 

No one stop you to migrate there.  But right now the hot thing going is 1 Malaysia where all we talked about is how much we love our own land bla bla bla.

A longer life based on a finite and short working career certainly would put a strain on the finances of many a retiree.

and therefore we don't give them money at the time when they are suppose to be ?  Since when delaying giving money can help a financially strain guy ?

 73% of contributors have less than RM50,000 saved

So most of us are poor, and you want to solve it by NOT giving us our own money ?

the more workers a country retains as the population ages the more the benefit to the economy

Yes, wisdom and experience are invaluable.  What has that got to do with delaying paying us our money ?  All the wise old men never stop doing something anyway through out their whole life.

Based on life cycle hypotheses, people tend to spend more during the early age of their careers and save more as retirement approaches.

I am sure he just cook that sucker hypotheses up when he was drunk written that article.  People who have gone through most parts of their any life cycles knows that singles tends to save more (30-50%) than later years of loans, family and kids etc.  The middle income trap ( rat race ) clearly says that the more we earn, the less we have.

Now that they know retirement is postponed for five more years at least, those people who might be thinking of building a nest egg have the opportunity to spend.  Spending more now will certainly be a boost to domestic consumption which is a main driver of growth.

Can you believe what he has just said ?  Take away my money and I can spend more !  OMG .... WTH is this sh!T ?

it will be illogical to have separate retirement ages for the public and private sectors.

Since when it is logical to make them the same ?  What is the difference between them then ?

other benefits the Government can save on such as healthcare bills

Huh ?  People who continue working has no healthcare or people who retire has no healthcare ?  Are you suggesting another bigger problem here ?

Young people who might be worried about not moving up the ladder or getting a job should not.

What has that got to do with not paying the old people the money they were promised ?  Old people don't get paid and young people should be happy !?!?

remove all unproductive workers, you can bet others will emerge at later years. It's best that talent management is exercised to ensure such workers are minimised at all times.

Why hasn't EPF office exercise talent managment then ?

====

Change the guideline all you want since we voted you to have the power to do so.  But all the folks who were promised for the past 54 years to be paid out at age 55 before should continue be honour so.  Changing this payout age to 60 should only affect NEW work force.  All existing to-be-retire however can have the option to follow your new guideline.

New Ottoman

So I totally fibbed yesterday:o) I said that the creative bug wasn't there. I said that I might pick something up next week....well next week turned into today:o)

This is what I did today.

In the words of my dear grandmother, "itn't that purdy." 

Being from the South, most of us say itn't instead of isn't..sad but true:o)

Anyway, this is what the ottoman looked like before:

Yep, that's a coffee table. One that has seen better days. My neighbor is an avid yard saler as well, and I told her that I was on the hunt for a round coffee table to turn into an ottoman. She definitely came through for me. She found this little beaut for $10.

I couldn't find anywhere in town that had foam thick enough and wide enough to cover the entire coffee table, so I bought 4 foam cushions from Hobby Lobby. I used spray adhesive to attach the cushions to one another and then laid the coffee table on top of the foam and traced around the edge of the table. Then the hubs and I used a reciprocating saw and cut the foam.

I didn't take any pictures of the step by step process..sorry. I was so excited about getting a project done, that I just flew through it without a second thought. 

The fabric is painter's canvas from Lowes. I did use some piping around the edge just to give it a more finished look.

 This ottoman has 5,003 staples in it....well I am not exactly sure how many staples to be exact, but there are several:o) I laid the fabric across the top of the foam and stapled it to the skirt of the coffee table(the wooden skirt that is). I then added the piping..stapling it to the underside of the top of the table. Then I added the ruffled skirt, stapling it to the underside of the top of the table as well.  

 This project took 1 hour to complete, with very little sewing and a whole lot of stapling.

 How successful do you think I will be keeping the kids and the hubs off of it??? My thoughts EXACTLY!

 At least we can all look back at these pictures and see what she looked like before being introduced to the rest of the family:o)

I hope you all have a great Wednesday! 

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Just to remind ourselves where we are...

As we head into the September numbers, this is the most anticipated report since last fall. At that time we had high inventory, but dropping listings robbed of us of our correction.

This year we have higher inventory, but no let up in the listings flow and a real drop in the list/sale ratio. Good things better flow from this.

It is useful to know where we stand now. As you can see even though some areas are still on fire, there are other areas which are already down YOY... and this clears that awful post with the many fonts :)

From the recent BCREA report:

According to the BCREA survey, the average price in B.C. rose 10.7 per cent in August compared to August 2010 to $540,000 from $488,000.

However, price changes fluctuated sharply by region, with the Fraser Valley showing the sharpest increase of 19.7 per cent over the year, from $424,000 to $508,000.

Metro Vancouver prices rose 14.4 per cent from $681,000 to $779,000, while Victoria prices rose 13.7 per cent from $472,000 to $537,000. The rest of Vancouver Island showed a slight price drop.

However, Powell River showed the sharpest drop - 12.7 per cent, from $297,000 to $260,000 - while the Okanagan Mainline recorded a 0.3-per-cent drop in prices from $384,000 to $383,000 and the South Okanagan dropped 7.2 per cent from $331,000 to $307,000.

Year-to-date, it was more of the same, with B.C. recording a 14.7-per-cent price increase in the first eight months compared to the same period in 2010, Metro Vancouver recording a 19.2-per cent hike over that period and the Fraser Valley seeing a 12.6-per-cent increase.

However, the Okanagan Mainline saw a 2.5-per-cent decline in the six-month period and the South Okanagan recorded a 5.4-per-cent drop in prices.

Powell River saw an eight-per-cent drop in the six months, while Victoria recorded a 0.5-per-cent decline in the average price.

The Kootenay region recorded a 4.4-per-cent increase in August compared to August 2010, from $274,000 to $286,000, although the average price fell 3.5 per cent year-to-date.

A Cookie Recipe You Must Try

A friend of mine made these cookies the other day. 

She found the recipe HERE.

I ate 4 in the span of 30 minutes....yes, they are that good!

These are perfect for fall. I can't wait to make these for my next gathering! Now all we need is for the fall weather to come back...it's hot again, but that's part of the beauty/ugly (depending on how you look at it) of living in the deep South:o)

Speaking of weather, I have a little man who is under the weather right now, so things around here are slow going.

Not much in the crafting arena right now either. I haven't had the energy nor the desire. I am hoping to get the crafting bug after this week. We have so much going on this week that there really isn't time to be creative.

Praying for E to feel better, so he can enjoy the rest of the week with us!

Have a good evening, ya'll.

Is this fellow right...

I found this excellent article by an Economist, Alexandre Pestov at the Schulich School of Business (try saying that twenty times fast) in a comment posted On Ben's site . The graphs are excellent, so are the arguments- though I didn't see much mention of HAM or outside money which has had such a significant effect on our prices.

It was written in Feb. 2000 and he makes the usual case for the bubble in Canada, however he also states the things that may make the bubble pop, which he mentioned may all come about in 2011.

Here are some excerpts:

Current housing prices in Toronto, Vancouver, Montreal and Calgary are difficult to rationalize using any combination of fundamental metrics. As history shows, this leads to a price correction. The disparity between gains in income, growth in rental rates and home prices in Canada is quite apparent.

Over the last 13 years, growth in home prices substantially outperformed all other components. From the fundamental price-to-rent perspective, real-estate as an investment no longer represents an attractive asset. In fact, at the current home prices in major Canadian cities, renting an apartment makes more financial sense than owning it. This market state leads to an array of predictable consequences. For instance, renting a property out now requires a substantial subsidy by the home owner, which effectively eliminates renting out as a contingency measure in case of income loss.

..............

The price-to-income ratio in Canada is at a historically high level. In fact, in some cities it is the highest on record. Over the last 13 years home prices have become decoupled from homeowners income, the mean household income has risen by 23 to 32 percent in the four largest Canadian cities.

Over the same period, the average house prices in these cities increased between 100 and 200 percent. Based on the price-to-income ratio, the four major Canadian cities experienced growth comparable to that of the hottest spots of the US housing bubble. Yet, the US bubble burst, but home prices in Canada remained around these tremendously high levels.

..................

Affordability in Canada is approaching historically high levels. In Vancouver, the housing affordability index exceeded the peak of the latest housing bubble of the late 80s. Adjusted for interest rates, the current affordability index in other Canadian cities is at par or above the peak of the late 80s bubble. If interest rates went up to the historical average, average households in Toronto and Vancouver would be paying 100 percent or more of their gross income towards ownership costs.

.................

On the median multiple ratio measurement, Vancouver (9.3), Toronto (5.2), Montreal (4.9), and Calgary (4.6) hover substantially above the “normal” 3.0 level. Based on this valuation, Toronto is considered a “severely unaffordable” city, while Montreal and Calgary lie on the border between being “seriously unaffordable” and “severely unaffordable”. Vancouver prominently stands out even from this crowd: it is not just “severely unaffordable, but it is also the least affordable city in Canada, the US, UK, Ireland, Australia and New Zealand.

..................

There are three main triggers that may help to set off the housing market decline. They are: HST, Olympics and rising rates

...

The whole piece is worth reading. But basically he says the triggers could be quite minor.

Eg the end of the construction boom linked to Olympics and the public debt problems that come out of it

Or a small rise in rates.

Or the advent of HST which has pulled demand forward (often due to confusion) and left a drop off that follows

He stated that all three were likely events in 2011.

Well I think he has been partially right. Bubbles are impossible to time and the 'trigger' for the burst is usually not what one would have expected.

Eg we have had the post Olympic drop in public spending, but the Government has kept the build-out going. Also the main hang-over (the Olympic Village) seems to have been thrown around the neck of the City of Vancouver and not the Province.

Also rates did start to move up in 2010 and many thought they would go a lot higher (not us here) - but the worldwide economic crisis has stopped the rise dead and a drop may now be on the cards.

However 2011 does indeed seem to have been the top for now. April to May 2011. And new possible 'triggers' have emerged. These include; a slow-down in China, another world-wide economic crisis, changes in Federal policy on mortgage length and CMHC insurance, a drop in commodity prices and higher unemployment. Maybe something else will come along and be 'blamed' for the fall. Whatever it is, it is never due to our own greed or our leaders' complacency. If it wasn't for 'X" we would still be in a boom!

And if you want a clear indictment of the foolish decisions our leaders made in this whole mess, there is no better summary than this. This is THE MOST important paragraph of our BUBBLE. I have re-read it many times.

Well done Mr Pestov for outlining it so clearly:

It is worth reminding ourselves that the bubble in Canada did not burst due to the massive intervention by the Harper government.

The intervention was orchestrated by injecting thousands of new buyers - many of whom cannot afford owning the property they purchased – into the market to prop up the prices.

The scheme worked, and the disaster was temporarily averted. However, the problem was not fully or even partially rectified.

By postponing the bubble deflation, the bubble was inflated further. If a housing market collapse would have caused pain and distress on behalf of a large and overleveraged Canadian population in 2007, the housing crash of 2011 will affect all the same buyers, plus many more of those who were sacrificed to keep the prices going up. More fire sales and more competing properties on the sell side will cause a sharper and a deeper downturn that would have been experienced in 2007.

Furthermore, CMHC, the second largest crown corporation in Canada, would require a bailout due to all the risky sub-prime mortgages it has insured. Every single one of the main sub-prime lenders in the US went out of business or required a massive bailout2. Unlike the US, the Canadian sub-prime lender would not require a bailout. In Canada, the bailout is already embedded in the system. It would simply be passed on to tax payers in the form of a larger national debt, higher taxes or tighter funds for social programs.

......

That last sentence explain why we are ALL in for a very difficult time when this bubble bursts. The Government has already committed to the bail-out! The only thing that remains to be decided is when and how much we all pay.

We are hitched to China...

As the BC Premier quite clearly stated in her job's initiative, she is looking to Asia for growth and more investment.

The fate of our Provincial economy is tied to China in the way it was once tied to the USA. Our housing market especially is hitched to Chinese buyers.

They are the main buyers at the high end, there seems little doubt of that. They are also acquiring mid-level properties, often in bulk from developers for investment or to diversify or to move money out, no one is quite sure about the exact reason since the net returns are so low.

In any case it is a fact that we have to accept and deal with.

The quantities of money are also well beyond what we are used to. We have lots of people in Vancouver earning high 6 figures, but when you see 13 super-luxury cars - some $400K+ impounded for speeding, some driven by teenagers who OWN them too...you know we are dealing with a different level of wealth.

I am sure most of it is legit however I am also sure that some of it is not, and is very hot money.

We have a reputation after all for allowing very hot money to hide, particularly in this Province where we have a huge and thriving cash drug business. And as soon as you set foot here, even if you are a crook, it will take Millions and many years to get you out...it took 13 years for the Thai Government to get this fellow, meanwhile he lived in the lap of luxury in Vancouver.

Dozens of Hong Kong policemen and their underworld associates who amassed huge fortunes and escaped to Canada were never sent back. In fact they became amongst the wealthiest real estate investors in this Province. They came with wives, children and even concubines and yet how many people have even heard of them, and most of them died of old age here, unmolested by the law and enjoying their ill-gotten gains. There is a lot more on the net about this if you want to check.

OK, so we are bound in many ways to the state of the economy in China. It is indeed a double edged sword.

If they falter, the steam comes out of housing, but we may be really hurt. Think the $C hitting 75 US cents again, and big cuts in Provincial spending...OR...maybe instead someone will start to question the origin of the huge funds that are coming into our city and buying $7 homes or new developments.

I think that is very unlikely.

The whole world is now begging for Chinese money. We have it. The last thing our Governments want to do is frighten it away by asking too many questions.

Does this mean there won't be a correction?

On the contrary. My neck is sore from sticking it out so much, but I think we will have our correction anyway because locals are totally priced out and we are already at super-low rates and wages are not keeping up. I also think China will trip a little (but not fall) and that will add some drag too.

Fundsupermart October Seminars 2011 - Value Investing

Market is down, many people are sad but how about you ? Have some extra money at hand ? Looking for opportunity to invest ? Even you don't have cash but do you know you can invest into mutual fund with your EPF ?  Fundsupermart says its time to go in because the price is below the value now - buy low now !

 ... read here for their October FREE seminars, 1 Oct in KL and 8 Oct in Penang.  Prepare your EPF statements ( print for FREE from EPF office or login online ) ... They are going to whack your EPF hard that day :)

You can also use your EPF $ to invest into stocks market but you may want to check out this article first.

Warren Buffet 6 billions strategy ?

Follow up on a concern if Warren Buffet's era may come to an end soon posted in August 2011, the figures are now out and considered as 'correct' as calculated by Forbes ...

Steven who works in Forbes has calculated that Warren Buffet is officially the BIGGEST MONEY LOSER, at an amount of USD 6 billions.  But this is not the first time Warren Buffet going through this kind of challenge.  He has always come back up stronger for the past 8 times but can he makes it again this round ?

There are 2 key distinct differences in his challenges today.

1. His age : Warren has come to a stage that he would give everything he has, back to the country or people he loves truly.  Business ( Berkshire Hathaway ) is surely something he hold on to very strongly but NOT necessary to all the investors themselves.  If one day he realizes 'most' of the investors in his business is no longer 'his investors' like last time, he may just pull the plug.  After all, as far as his business is concerned, a successor plan is already in place.
2. When USA gets into trouble by its own doing in the past, everyone forgive him because he is the  ONLY entity who can fix the situation.  There were NO ONE ELSE we could keep our hopes on except USA itself.  Hence, we always go back and work with USA politely.  Today, although still without an apparent replacement for such a giant over the centuries ... but there are clear candidates for many to put their hopes onto.  Hence, almost no one is expecting USA to fix anything today, not even their own citizen.  This ... is also something that hasn't happen in the past, at least not to this scale.

Having said all that, my bet is that Warren will come back up stronger than ever because

1. Today's indicators shows that whoever already in the market and want to continue to stay in the market would need a staying power of about 1.5 years.  BH has no problem with this requirement because of their low operation cost.
2. Warren doesn't really love anyone else more than BH.  But as indicated above, Warren doesn't love his investors as much as he used to, simply because his today's investors are rather different now.
3. Warren needed a good bye event . . . well, to say good bye.  And this is NOT it !

Time to stick my neck out...

I did it before. In May I said that looked like the high point for Average SFH prices was reached or I would quit blogging. Luckily it was..for now.

In June prices dipped a bit. In July they dipped a lot and in August they had a small rebound. So far May has been the high water mark.

I think May's lunatic prices will hold. Here's where my neck comes out a full foot or so.

I think September will show a significant drop again in the SFH average price. Di I have any special inside info. Not at all - only the stuff I post for you.

However once again , if Economics makes any sense, with lower sales and higher inventory- we should get drops. This time we have a back-drop of financial crisis and mayhem too, and the Government says it wont stimulate housing again the irresponsible way they did the last time.

Yes interest rates are super low. Yes the HAM buyers are still throwing money at stuff like it was free (maybe it was), but speculation is becoming passe- and we are the epitome of Speculation.

Inventory Keeps going UP

Folks we are in for some interesting times.

We have been to the alter so many times, that it hardly seems like we can ever get some relief. However this year is different from last year, when inventory was dropping and we had one more boost up to new highs which kicked the air out of the prudent patient bears.

Why is it different now?

Well prices are a lot higher! And interest rates are a tad higher. And the world economy is starting to unravel, whereas everyone was pretty optimistic this time last year. The TSX is actually exactly where it was a year ago.

So what should we expect now? Lower prices that's what! Once again if Econ 101 is right, we have more inventory and lower sales, so prices should come under pressure, especially in the areas where MOI are very high like the FVREB (see last post)

Meanwhile the BOC is between a rock and a hard spot.

Rock= higher than expected inflation. An astounding 3.1% rate (while you get 1% on your hard earned and saving deposit accounts)

Hard spot = an unfolding banking crisis -Part 2 and Canada is wilting under lower commodity prices and the global slowdown.

So what is the BOC to do? Probably cut rates back to near zero again. The market already thinks so, by selling the CAD even more than the Euro.

E's 5 Today!

Five years ago today, this little bit of joy blessed our lives immensely.

I can't believe how quickly these past 5 years have flown by.

He is the sweetest, kindest little soul.

You can't help but love him.

Little did we know that when God gave us him, He gave us a little peace of heaven.

Happy Birthday E! 

Mommy, Daddy & S.R. love you! 

Some FVREB Stats for Anon

North Delta

SFH listings : 183

Sales 30 days : 38

MOI = 4.8

Surrey

SFH listings: 1026

Sales last 30 days : 79

MOI: 13

Abbotsford

SFH Listings: 881

Sales: 48

MOI: 18 MOI

South Surrey/ White Rock

SFH: 753

Sales: 56

MOI: 13.4

Mission

SFH Listings: 589

Sales: 21

MOI : 28!!

Cloverdale:

SFH Listings: 315

Sales: 24

MOI: 13

North Surrey

SFH : 431

Sales: 31

MOI: 13.9

So apart from North Delta, which is a small market, we are deeply into buyer's territory and should expect some price drops in September's numbers.

Sunshine Coast over 30 MOI now.

Thought this was Great!

I saw this on Pinterest today and thought it was great! Yes, I jumped on the bandwagon...I may be jumping ship though, b/c I may never get off of the computer!!

Super Hero Birthday Party

Here it is. The Super Hero Birthday party for E. I'll try to let the pictures do most of the talking:o)

 I made the cake...in a hurry. I wasn't as happy with this one as I was with the Barbie cake I made for S.R.'s party.

Table scape for the boys.

Table for the girls.

A shot through the web.

 Party favor table

 Each of the boys got to take home a lunch box, plate & cup(not pictured) along with a book & Spiderman comic book.

 This is what was inside of the lunch box. I found these in the dollar section at Target the other day and they were half off.

Construction of the Bat Cave. The hubs and my daddy did a great job.

 Fishing line, tacks and black plastic table cloths made the Bat Cave. The kids got a kick out of it. We had the lights off when they walked through it.

Here were some of the games. To get the posters, visit designergirl007 at Etsy.

 Here were some of our villains...Doc Oc

 Lex Luthor...for some reason I thought his name was Max Luther and I couldn't find a picture of him:o) Go figure!

 and the Joker

A little pre-party fun with my sis.

 Here's the arrival of Batman....HUGE hit!

 Back to the games....vaporize the villains was the favorite game of the day. 

 The villains didn't make it:o)

Once the Super Hero Academy was over, Batman signed certificates and handed them out to each of the new Super Heroes.

 He also gave everyone a Bat-a-rang.

I'd say this was one happy little man!

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