Shiller was oh so wrong Housing is on FIRE

[VancouverGoinUp]

Latest excerpt from Vancouver Sun

By year-end, housing values are expected to shatter existing records with the highest increases forecast for Saskatoon (49 per cent), Edmonton (31.5 per cent), Regina (21 per cent), Calgary (20 per cent), Kelowna (19.5 per cent), Saint John, N.B. (17 per cent), St. John's, N.L. (12 per cent), and Greater Vancouver (10 per cent).
"Clearly, economic prosperity has translated into increased housing sales and upward pressure on prices across the board," Elton Ash, regional executive vice-president of Re/Max Western Canada said in a release. "As in 2007, inventory will be the major wildcard next year. A return to tight market conditions could mean all bets are off as buyers are forced to compete, creating increased market pressure."
Major market front-runners for price appreciation in 2008 include St. John's (12 per cent), Regina and Kelowna-Central Okanagan (nine per cent), Hamilton-Burlington, Ont., and Saint John (eight per cent), and Greater Vancouver (seven per cent).

[Jim Nickerson]

Re: Shiller was oh so wrong Housing is on FIRE

Latest excerpt from Vancouver Sun

By year-end, housing values are expected to shatter existing records with the highest increases forecast for Saskatoon (49 per cent), Edmonton (31.5 per cent), Regina (21 per cent), Calgary (20 per cent), Kelowna (19.5 per cent), Saint John, N.B. (17 per cent), St. John's, N.L. (12 per cent), and Greater Vancouver (10 per cent).
"Clearly, economic prosperity has translated into increased housing sales and upward pressure on prices across the board," Elton Ash, regional executive vice-president of Re/Max Western Canada said in a release. "As in 2007, inventory will be the major wildcard next year. A return to tight market conditions could mean all bets are off as buyers are forced to compete, creating increased market pressure."
Major market front-runners for price appreciation in 2008 include St. John's (12 per cent), Regina and Kelowna-Central Okanagan (nine per cent), Hamilton-Burlington, Ont., and Saint John (eight per cent), and Greater Vancouver (seven per cent).

Sounds like there are a lot of fools in Canada.

[Guest]

Re: Shiller was oh so wrong Housing is on FIRE

Vancouver -

I greatly enjoy watching you interact with all the "grumpy housing bears" on iTulip.

The mix of delirious, even feverishly bullish champions of soaring Canadian real estate, with our numerous foul tempered, snarling, growling bears is truly hilarious to behold!

I love watching all the bears congregate and snarl, paw the earth with great woolly claws while moaning fearsome bearish sounds, as they are goaded to a fury by chirpy upbeat posts about how everyone's getting filthy rich north of the border!

This is one of iTulips most entertaining sports arenas. Thanks for the entertainment!

[GRG55]

Re: Shiller was oh so wrong Housing is on FIRE

Vancouver -

I greatly enjoy watching you interact with all the "grumpy housing bears" on iTulip.

The mix of delirious, even feverishly bullish champions of soaring Canadian real estate, with our numerous foul tempered, snarling, growling bears is truly hilarious to behold!

I love watching all the bears congregate and snarl, paw the earth with great woolly claws while moaning fearsome bearish sounds, as they are goaded to a fury by chirpy upbeat posts about how everyone's getting filthy rich north of the border!

This is one of iTulips most entertaining sports arenas. Thanks for the entertainment!

I haven't been around iTulip very long, but I suspect that the rules say that you can't keep your status as "Old Contrary Fart" unless you're prepared to continuously live up to the title...no free fare passengers on this bus.

As for Canadian real estate, the formerly red hot Calgary market is now suffering from a large increase in listings y-o-y. That's usually a good indicator that something is about to change. But the real estate "professionals" will be the last to tell you, of course.

[GRG55]

Re: Shiller was oh so wrong Housing is on FIRE

Latest excerpt from Vancouver Sun

By year-end, housing values are expected to shatter existing records with the highest increases forecast for Saskatoon (49 per cent), Edmonton (31.5 per cent), Regina (21 per cent), Calgary (20 per cent), Kelowna (19.5 per cent), Saint John, N.B. (17 per cent), St. John's, N.L. (12 per cent), and Greater Vancouver (10 per cent).
"Clearly, economic prosperity has translated into increased housing sales and upward pressure on prices across the board," Elton Ash, regional executive vice-president of Re/Max Western Canada said in a release. "As in 2007, inventory will be the major wildcard next year. A return to tight market conditions could mean all bets are off as buyers are forced to compete, creating increased market pressure."
Major market front-runners for price appreciation in 2008 include St. John's (12 per cent), Regina and Kelowna-Central Okanagan (nine per cent), Hamilton-Burlington, Ont., and Saint John (eight per cent), and Greater Vancouver (seven per cent).

Only a 10% increase in Vancouver? :eek:

Must feel like a recession...

[c1ue]

Re: Shiller was oh so wrong Housing is on FIRE

Vancouver,

Is B.C. one of the Canadian provinces with property taxes?

And if so, are these taxes reassessed yearly?

I have always viewed Vancouver is to Asia as London is to Russian oligarchs: a place for wealthy Taiwanese/Chinese/Indonesians to buy a property as a vacation home/political refuge/investment.

However, since I believe London does not have a property tax - B.C./Vancouver having one would change the dynamic significantly.

From my own experience in Austin, I also note that fast rising property taxes are the quickest way to level off a real estate bubble. Nothing like watching your nominal wealth grow, but being empoverished by tripling property taxes to help people decide to sell.

[touchring]

Re: Shiller was oh so wrong Housing is on FIRE

Back to 1 year economics.

Demand - Supply = Price

[GRG55]

Re: Shiller was oh so wrong Housing is on FIRE

Vancouver,

Is B.C. one of the Canadian provinces with property taxes?

And if so, are these taxes reassessed yearly?

I have always viewed Vancouver is to Asia as London is to Russian oligarchs: a place for wealthy Taiwanese/Chinese/Indonesians to buy a property as a vacation home/political refuge/investment.

However, since I believe London does not have a property tax - B.C./Vancouver having one would change the dynamic significantly.

From my own experience in Austin, I also note that fast rising property taxes are the quickest way to level off a real estate bubble. Nothing like watching your nominal wealth grow, but being empoverished by tripling property taxes to help people decide to sell.

Yes B.C. has property taxes, and the public school system taxes are also levied on property values. Assessments are done province-wide by the BC Assessment Authority, and are supposes to reflect "market" valuations. Of course there is no way to reassess every property in the province every year, so there is a lag in the assessments as prices spiral upwards (which they have been doing pretty well continuously since the mid-1980s property bust). There is no adjustment to assessments or taxes when properties change hands a la California, so the market is probably more rational in that respect.

What's really amazing is that Canadians cannot deduct mortgage interest from taxes. Shows just how much peer and social pressure guide people's behaviours and get them in over their heads. The home as an "investment" or a forced "savings plan", or an integral part of "retirement planning" is very deeply ingrained in the Canadian psyche. There's a massive industry behind all this of course.

Finally, couldn't help but chuckle when I saw the last word of the title to this post was all capitals. Did you do that Fred? Or Freudian slip on the part of our good friend from Vancouver?

[Spartacus]

Re: Shiller was oh so wrong Housing is on FIRE

Hey Jim

In case you didn't know, Vancouver / lower BC is famous for the quality of 2 things

Indian food
Chinese food
pot
mushrooms (and I don't mean for your salad)

'nuf said

Sounds like there are a lot of fools in Canada.

[Andreuccio]

Re: Shiller was oh so wrong Housing is on FIRE

Hey Jim

In case you didn't know, Vancouver / lower BC is famous for the quality of 2 things

Indian food
Chinese food
pot
mushrooms (and I don't mean for your salad)

'nuf said

Um, isn't that 4 things? :rolleyes:

[WDCRob]

Re: Shiller was oh so wrong Housing is on FIRE

I don't remember Shiller taking a position on Canadian real estate. Could you provide me a link?

[zoog]

Re: Shiller was oh so wrong Housing is on FIRE

I don't remember Shiller taking a position on Canadian real estate. Could you provide me a link?

VancouverGoinUp's axe to grind over Shiller seems to stem from statements he made in a 2005 television interview (RoBTV I believe). I can't find it on the Vancouver Sun website itself, but here's a blog post with their article from July 18, 2005.

Yale economist Robert Shiller, whose book Irrational Exuberance successfully predicted the dot-com collapse, released a revised version of his book this spring that predicted a crash in house prices.

And in a recent television interview, Shiller argued "glamour cities" like Vancouver will likely be the hardest hit.

"Vancouver is one of the [most] glamorous cities in the world," he said. "Beautiful place, west coast, ocean view. It can kind of make investors a little bit flighty. They think this is such a wonderful place [that] everyone wants to live here. And they think there is no limit to price. But there is always a limit to price. There is only so much people can afford to pay."

Shiller added that Vancouver is no stranger to booms and busts.

"Vancouver is the most bubbly city in the world, I believe," he said. "They've had very volatile prices in the past. The rest of Canada, I don't get quite such extreme stories."

The "most bubbly" statement has often been quoted out of context, usually in a way that suggests Vancouver is currently the most bubbly city in the world. From the more lengthy quote above, I believe Shiller was making a historical observation more than a contemporary prediction.

[Spartacus]

Re: Shiller was oh so wrong Housing is on FIRE

Um, isn't that 4 things? :rolleyes:

oh, right ... wow ....

I counted to 2 and got the munchies

[WDCRob]

Re: Shiller was oh so wrong Housing is on FIRE

Thanks Zoog, I hadn't seen that.

We'll see if our Vancouver shill is still here in, say, 2010.

[GRG55]

Re: Shiller was oh so wrong Housing is on FIRE

Latest excerpt from Vancouver Sun

By year-end, housing values are expected to shatter existing records with the highest increases forecast for Saskatoon (49 per cent), Edmonton (31.5 per cent), Regina (21 per cent), Calgary (20 per cent), Kelowna (19.5 per cent), Saint John, N.B. (17 per cent), St. John's, N.L. (12 per cent), and Greater Vancouver (10 per cent).
"Clearly, economic prosperity has translated into increased housing sales and upward pressure on prices across the board," Elton Ash, regional executive vice-president of Re/Max Western Canada said in a release. "As in 2007, inventory will be the major wildcard next year. A return to tight market conditions could mean all bets are off as buyers are forced to compete, creating increased market pressure."
Major market front-runners for price appreciation in 2008 include St. John's (12 per cent), Regina and Kelowna-Central Okanagan (nine per cent), Hamilton-Burlington, Ont., and Saint John (eight per cent), and Greater Vancouver (seven per cent).

Signs of a developing top?

From Forbes.com

Canada's most expensive homes

Lauren Kerensky

While the subprime problem south of the border continues to eat away at America's housing markets, homeowners across Canada are enjoying strong sales... ...Chew on this: Based on sales activity in the first half of 2007, the Canadian Real Estate Association expects total home sale transactions this year to rise by 8.1%. More notably on the rise, though, is the national average sales price. It increased from $276,646 in July 2006 to $311,495 in July 2007, a whopping 13 per cent. Much of this growth can be attributed to the country's thriving luxury market. "The high-end market is booming across Canada as more baby boomers inherit large amounts of money, and the Canadian economy is booming right along with it," says Ann Chiasson, an agent with Sea to Sky Premier Properties in Whistler, British Columbia... ..."There's a bit of a bidding war going on," says Gino Romanese, senior vice president of Royal LePage Real Estate, Ltd...

Link to article:
http://ca.pfinance.yahoo.com/ca_fina...pensive-homes/