I used to live in San diego .. prices have dropped 30% after rising 30% for the past 5 years...


2007/08 prices would be same as end of 2005 prices.. San Diego , LA has seen very little drop in property prices if u compare against appretiation over 5 years where property prices had tripled..

In the GTA prices have not even doubled in the past 5 years. overall the price rise has been about 5-10% per year.. and today the rise is mostly because of lack of expansion space..

I dont see a crash in GTA.. rest of canada god help them...

Quote:

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Originally posted by rahul_singh23

Krazzyfour.. Thanks for posting nice stuff specially "........failed to understand how Canadian economy can escape which is dependent on USA."

Vancouver-I was talking with one of my friend who lives in downtown Vancouver (Yaletown area) and he feels like more than 40% condo own by speculator and no-one is buying them. It may reach like Miami style crash there where 30% people are living in building and paying $600 condo fee to cover services.

Calgary- Lot of people is putting their home/condo on rent as they are expecting price rise in 2009. So rental market is getting good here. There will be no excuse oh.. I am buying as I can not get rental place here. 600K home you can rent in $1800/month.


Here's one more comparsion:
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While it is pre-determined that the bull will die, he still fights till the very end, much like we have seen RE bulls in US.

I remember reading the US RE bubble blogs in 2006 and you should have seen the perma-bulls there. Much more vicious and arrogant than the Canadian variety. They were convinced that RE only goes UP, and that all the bubble posters were the few hundred "losers" in the entire United States that didn't get the concept that "here is different", "we're running out of land", and "RE only goes UP!"

Well, the median price of a home in California is down over 30% YoY right now, and in some communities in the suburbs of Sacramento, San Diego, San Francisco, and Los Angeles median prices have plummeted over 50%.

The Candian bulls might point out that California doesn't have that much oil and gas, TSX, dying Auto industry, immigration, Vancouver’s good weather . However, California has major world-class industries that employ many people. Have most of us perhaps heard of Silicon Valley? There are companies there with the names of Apple, Google, Cisco, Intel, HP, BEA and a long list. Also they have amazing weather, which means they are a huge exporter of agricultural products, including fruit, vegetables, wine. They are also the major port from Asia for the entire USA. In fact, California (if it were a country) has the 8th largest economy in the world (Canada is 9th), and they are running out of land much faster than cities in Alberta or Canada.

If house prices can drop over 30% in one year in California, there is no reason to believe it can't happen in other places, including GTA, Vancouver or Alberta.

You could make the same argument for Japan, sure they don't have oil, but they sure have world class companies that export all over and create high paying jobs for the residents. Toyota, Honda, Nissan, Sony, Mitsubishi and a long list. Japan is the second largest economy in the world, and has the least amount of space to build on of any industrialized country. Yet home prices declined over 70% from the peak in Toyko since their bubble bust in 1990.
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Quote:

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Originally posted by Krazzyfour

Prices are down 38% from last year, based on Trulia.com from California's multiple listing services, and the state of the housing market has had a formidable effect on homeowners' net worths: with home equity at just 19% of home value, it's the most depressed housing market in the country. At this time last year, homeowners had 57% of their home's value in equity.

Big cities have been similarly bled as home prices have dropped. Sales prices are down 7.7% nationally, according to the National Association of Realtors, with losses of over 20% in places like Los Angeles and San Diego. Indianapolis homeowners hold only 26% of their home's value in equity, residents of Atlanta and Minneapolis-St. Paul own a dismal 27%, and the beaten-down Sacramento, Calif., market has left homeowners with only 28% in equity.


"Most mortgages made between the fall of 2004 and the fall of 2007, the majority of them are underwater," says Mark Zandi, chief economist at Moody's Economy.com, describing negative-equity situations in which more is owed on the home than it's worth.

"There are 9.6 million homeowners underwater, and most of them are those that bought from the end of 2004 through the end of 2007 in places like California and Florida and Nevada."

Price declines, one of the leading causes of equity drops, occur for a wide range of reasons, whether because of basic supply and demand, poor access to credit for potential borrowers, a sliding local economy where buyers have less to spend, or an appraised value inflated by overeager underwriters.

In Las Vegas or Phoenix, where prices exploded in the early 2000s, builders rushed to manufacture as much inventory as possible and lenders were less than judicious with credit. As prices started to fall in 2006, homeowners began walking away from resetting rates, homebuilders couldn't find buyers, and all the jobs that had been created by the construction frenzy melted away.

Price declines, resetting rates and job losses are the leading determinants of foreclosures, which totaled 739,714 in the second quarter of 2008, according to RealtyTrac, an Irvine, Calif.-based brokerage.

Complete story

http://www.forbes.com/2008/08/05/equity-cities-foreclosure-forbeslife-cx_mw_0805realestate.html



Rank City Number of homes in foreclosure

1. Las Vegas foreclosures 20,856
2. Phoenix foreclosures 14,246
3. Chicago foreclosures 12,948
4. Sacramento foreclosures 12,353
5. Detroit foreclosures 11,610
6. San Diego foreclosures 9,378
7. Miami foreclosures 8,965
8. Los Angeles foreclosures 8,536
9. Stockton foreclosures 7,801
10. Bakersfield foreclosures 7,514

Source: RealtyTrac August 12, 2008

Bubble, Bubble, Toil And Trouble

Wishful thinking didn't make subprime the first and last bubble to shatter the balance sheets and income lines of the nation's leading financial institutions.

The meltdown of Wall Street balance sheets continues. The auction-rate note imbroglio--newest of the disaster bubbles, if you will--is already costing major firms $55 billion. Wait until the toll starts building in other consumer paper-like securities backed by credit card receivables. Citigroup (nyse: C - news - people ) just reported a loss, and JPMorgan Chase (nyse: JPM - news - people ) expects write-downs of several hundred million dollars per quarter into the foreseeable future.

Complete story

http://www.forbes.com/markets/2008/08/11/financial-subprime-leveraged-oped-cz_rl_0811croesus.html




When US, Japan, UK, France, Germany, China, India economies are shrinking and in recession, failed to understand how Canadian economy can escape which is dependent on USA.

Any bail out by US Govt. of top financial firms like Fraddie and Fannie etc..will lead to additional tax burden on taxpayers which further reduces spending and further delay economic recovery.


Cheers!

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Toll Brothers Inc. said Wednesday America's housing woes continue to hammer the luxury builder's business, leading to a steep decline in new home contracts and sales.

The Horsham, Pa.-based company released its preliminary fiscal results for the three months ended July 31, and said there was little improvement in the dismal conditions that have racked homebuilders across the country.

"Our third quarter results reflect the continued weakness in most of our markets," Robert Toll, chairman and chief executive, said during a conference call with Wall Street analysts.

Home-building revenue for the quarter plunged 34 per cent to US$796.5 million from $1.21 billion last year.

Its order backlog for homes to be built fell 52 per cent to $1.75 billion from $3.67 billion a year ago.

complete story
http://ca.news.finance.yahoo.com/s/13082008/2/biz-finance-luxury-builder-toll-brothers-sees-sharp-decline-q3.html

WRAPUP 4-U.S. retail sales dip in July, import prices up


U.S. retail sales edged down 0.1 percent in July on a big drop at auto dealers, the government said on Wednesday in a report suggesting consumers were straining to keep spending up amid rising prices.

Analysts said the fall in retail sales, the first in five months, showed the buying punch from government stimulus checks was fading and raising chances that consumer spending will falter in the second half, further slowing a sluggish economy.

"The consumer is still under enormous pressure as employment is declining, real wages are down, housing and stock market wealth are down and credit conditions continue to tighten," said economist Nigel Gault of Global Insight in Lexington, Massachusetts.

A separate report showed a bigger-than-expected jump in July import prices and underlined the pressure costlier oil was putting on the economy. Over the past 12 months, import prices have soared 21.6 percent -- the biggest gain on records dating back 26 years.

Complete story
http://www.reuters.com/article/marketsNews/idINN1332916320080813?rpc=44

Greenspan Blasts Approach In U.S.'s Fannie, Freddie Fix

Alan Greenspan usually surrounds his opinions with caveats and convoluted clauses. But ask his view of the U.S. government's response to problems confronting mortgage giants Fannie Mae and Freddie Mac, and he offers one word: "Bad."

http://online.wsj.com/article/SB121865515167837815.html?mod=hpp_us_whats_news

Stocks tumble on retail sales report, rise in oil

Wall Street tumbled for a second session Wednesday after a government report on retail sales and a jump in oil prices raised investors' concerns about consumers' ability to spend and feed economic growth. The Dow Jones industrial average fell about 175 points, bringing its two-day decline to more than 300.

http://www.forbes.com/topstories/feeds/ap/2008/08/13/ap5319489.html

Do not understand when people spending get reduced how home buyers will enter the market and maintain RE market.

Expect more job losses in future in view of US Govt report lower retails sales.

In Canada, Job losses are always higher in Ontario in view of more immigrants come to Ontario as rightly said in this thread.

Ontario hardest hit as full-time jobs tumble in Canada, unemployment rate rises

OTTAWA - Tens of thousands of Canadians, most of them in Ontario, lost their full-time jobs or were forced into part-time work last month as the country's economy showed signs of retreating, two Statistics Canada reports suggest.
Friday's much-dreaded jobs report was even worse than forecast, with the country losing 39,200 full-time jobs. Four provinces added some full-time jobs but the other six had losses, including 45,500 that disappeared in Ontario.
That was partially offset by 34,200 additional part-time jobs, but the national unemployment rate up one-tenth of a point to 6.2 per cent, the highest it's been since January 2007.
"Reality may finally be catching up with the Canadian job market," said Douglas Porter, deputy chief economist with BMO Capital Markets.
"We wouldn't make too much of a one-month dip in employment. However, the jobless rate continues to gradually grind higher ... while full-time employment growth is clearly fading."
And CIBC economist Krishen Rangasamy said Canadians should expect more monthly declines, or very modest gains, for the rest of the year as Canada's export economy continues to struggle from reduced demand in the U.S.

The split in the Canadian economy between resource and goods producing regions was confirmed by the increase in Canada's merchandise trade surplus to $5.5 billion in May, most of it due to surging energy prices to the United States.
The trade surplus in energy hit a record $7.2 billion, while trade in machinery and equipment, autos and consumer goods, most produced in Central Canada, all declined sharply.
The Canadian dollar traded near its Thursday close of 99.10 cents US most of the day as the markets balanced the negative impacts of the job losses against positive bounce from higher oil prices.
The weak jobs number - particularly in full-time employment - should be a wake-up call to the government and the Bank of Canada, said Canadian Labour Congress president Ken Georgetti, who called for lower interest rates.
"We need decisive intervention," Georgetti said. "The Bank of Canada must focus on jobs and families before apparent signs of future inflation."
But most economists said the central bank is unlikely to cut rates at its policy meeting next week, although they also said governor Mark Carney is unlikely to follow the advice of the C. D. Howe Institute panel of economists that rates should be raised.
Georgetti also called on governments to create a jobs strategy, noting that with more Canadians in the jobs market, there are now 20,300 more who want to work and cannot find employment than two months ago.
Particularly alarming is the situation in Ontario, which lost more full-time jobs (45,500) and more net jobs after part-time employment is put into the equation (23,900) than the rest of the country combined. Many of those losses were in the construction field.
In a separate release, Ontario's Construction Sector Council issued a report Friday saying the province's construction industry is expected to maintain manageable growth over the next eight years despite a weakening economy, and to need 74,000 new workers.
In Ontario, the jobless picture will likely get worse before it gets better, said Porter, who noted that recent announcements in auto sector layoffs and plant closures had yet to take effect or be counted.
"Ontario manufacturing jobs have actually risen in May and June and I think that's an accident waiting to happen," he said.
While past job weakness was mostly confined to the manufacturing sector, Statistics Canada said June's losses were spread more widely, with ironically, factories adding 800 workers nationally.
"The only industry with a notable employment increase in June was professional, scientific and technical services, where monthly gains totalled 37,000," the agency said.
But most industries lost jobs, including business, building and other support services, health care and social assistance, and construction.
Still, the agency pointed out that Canada's jobs record has been solid for some time. The economy produced 290,000 new jobs in the past 12 months, a 1.7 per cent increase.
But economists stressed that given the downward trajectory of job creation recently, the days of 30,000-a-month employment gains are past for at least the rest the year.
After starting 2008 on a tear by pumping out 46,000 new jobs, employment growth has almost uniformly slipped each month, leading to June's outright losses. Meanwhile, full-time employment has fallen in three of the last four months for a total of 70,000.
Bank of Nova Scotia economist Adrienne Warren says while the rest of the year promises to be as weak, Canada won't experience the kind of steep drop-offs that have occurred in the U.S., where employment has fallen by 438,000 jobs so far this year.
"I think there are still a lot of areas of the economy doing quite well that suggests we're not going to see big job losses, mainly due to the strength of the resource-based industries across the countries that will still provide support to other industries," she explained.

Just because few people purchased recently, they are reluctant to digest that price will further go down.

Cheers!

Economy fears to weigh on Nikkei; property stocks eyed

Japan's Nikkei stock average is set for a third day of falls on Thursday, pressured by growing concern over the global economy after U.S. credit jitters grew and oil prices jumped, though trading houses such as Mitsubishi
Corp (8058.T: Quote, Profile, Research, Stock Buzz) may benefit. Property stocks may be hit after the failure of developer
Urban Corp (8868.T: Quote, Profile, Research, Stock Buzz) on Wednesday with debts of ($2.4 billion).
Caught in the global credit crunch, it was the biggest collapse
by a listed Japanese company in six years and the third mid-sized
property firm to go bust in recent months. [ID:nT92234] "As the GDP figures showed yesterday, Japan's economy isn't
doing well and we can't expect much from the government in terms
of economic packages," said Kazuhiro Takahashi, a manager at
Daiwa SMBC Securities. [ID:nT110289] "The market mood isn't good."

complete story

http://www.reuters.com/article/marketsNews/idCAT16035820080813?rpc=44

Krazzyfour.. You are rocking. Putting a big picture and reminding us that we are still a part of this world economy than stainless steel appliances, granite countertop or expensive flooring people are looking forward and spend more time than understanding real stuff. RE can be local but money/investment is not local.

http://www.greaterfool.ca/

I like this: "......So, forget net population migration numbers, the price of oil, trade figures or even mortgage rates. The determining factors in the marketplace now are consumer confidence and investor psychology. Lame denials will do nothing but make the inevitable more shocking."

I am not sure how many people have read "Greater Fool" book. I think its worth to spend $16 on the book and few hrs on internet.

http://www.financialpost.com/story.html?id=723628

"..........The Canada Real Estate Association says the average price of a home sold in Canada's top 25 markets last month was $327,020, a 3.6% decline from a year ago. It's the second year-over year drop after the June numbers fell 0.4%............."



CALGARY:

avg condo price july 2006 $276,463
avg condo price may 2007 $332,237
avg condo price aug 2008 $269,538

a lightning quick 20% price crash. This is a fact not a forecast. We are just starting in price down.


US:
Here is the investment property for so called long term.
http://www.detnews.com/apps/pbcs.dll/article?AID=/20080813/METRO/808130360/&imw=Y&ref=patrick.net

This house at 8111 Traverse in Detroit has been stripped of its siding, plumbing, copper wiring, hot water tank and furnace. Desperate to sell, the bank that owns it has put it up for sale for $1. (Bearing Group)

World Economy Shows New Strain

The global economy -- which had long remained resilient despite U.S. weakness -- is now slowing significantly, with Europe offering the latest evidence of trouble.

On Thursday, the European Union's statistics agency said gross domestic product in the euro zone contracted 0.2% in the second quarter, the equivalent of a 0.8% annual rate of decline. It marked the first time since the early 1990s that GDP has fallen overall in the 15 countries that use the euro.

In a fresh sign of the pressures facing the American economy, the Labor Department said Thursday that U.S. consumer-price inflation hit a 17-year ...

http://online.wsj.com/article/SB121874575081241907.html?mod=hpp_us_whats_news


Inflation Rate Picks Up as Food, Energy Costs Rise


U.S. inflation accelerated in July, as prices rose 5.6% from a year earlier, the fastest pace in 17 years.

The consumer-price index rose 0.8% from June, reflecting increased prices for food, energy, airline fares and apparel, the Labor Department said Thursday. That followed a rise of 1.1% the month before. Core inflation, which excludes food and energy, advanced 0.3% for the second consecutive month and was up 2.5% from a year before. That is well above the Fed's "comfort zone" of 1.5% to 2%.

As consumers fight inflation and job woes mount, the U.S. housing market is still painfully unwinding from the subprime mortgage mess. The combination of falling home prices and a tight lending environment has left many homeowners in houses worth less than they bought them for--and sometimes, especially when teaser periods on adjustable-rate mortgages expire, in ones they can no longer afford.

According to data released Thursday, the number of foreclosures in July jumped by 8.0% from the month before and surged by 55.0% from a year ago. Data provider RealtyTrac reported that 272,000 homes, or one in every 464 U.S. households, received at least one foreclosure-related notice in July.

Irvine, Calif.-based RealtyTrac monitors default notices, auction sale notices and bank repossessions. More than 77,000 properties were repossessed by lenders nationwide in July, the company said.


http://online.wsj.com/article/SB121871617494640459.html?mod=hpp_us_whats_news

Around the world, pessimism about the economy

More signs of the economic slowdown appeared on two continents, Asia and Europe.

On Thursday, the German economy contracted by 0.5 percent in the quarter from April through June, from the previous quarter, the weakest performance in more than five years, the Federal Statistics Office said.

In Europe, the Bank of England offered on Wednesday a pessimistic outlook for the rest of the year, saying that it expected inflation to hit 5 percent because of energy and food prices and the economy to stagnate.

And in Asia, Japan appears to be flirting with a recession, government data showed Wednesday.

"The numbers were awful," Hideo Kumano, chief economist at Dai-ichi Life Research Institute in Tokyo, said after the Japanese government reported that the gross domestic product shrank at an annual 2.4 percent rate in the three months that ended June 30. "Things are going to be very tough in the second half of the year."

complete story

http://www.iht.com/articles/2008/08/14/business/14worldecon.php


Global inflation remains high but economic growth falling at rapid pace

http://skepticalspeculator.blogspot.com/
http://forexroom.wordpress.com/

Enjoy Inflation and recession !!!!

Cheers!

Resale home prices slide in July as Canadian housing market weakness deepens

Thu Aug 14, 5:23 PM
Eric Shackleton, The Canadian Press
Email Story IM Story Printable View By Eric Shackleton, The Canadian Press

TORONTO - Resale home prices and sales slid in Canada's major markets last month, while listings roared ahead, more signs the market is weakening, according to a Canadian Real Estate Association report.

Rising consumer caution due to a slowing economy, especially in Ontario and Quebec, prompted nearly an 11 per cent drop in existing homes sales compared to the same period in 2007, according to CREA's Multiple Listing Services figures for July.

"The steady drum-beat of double-digit sales declines this year is beginning to weight more heavily on prices," Doug Porter, deputy chief economist at BMO Nesbitt Burns Inc., said Thursday in a research note to clients.

CREA said the average existing home price fell by 3.6 per cent in July over the same month last year, a continuation of a price decline that began in June when the average price slipped by 0.4 per cent, the first decline in more than nine years.

Complete story

http://ca.news.finance.yahoo.com/s/14082008/2/biz-finance-resale-home-prices-slide-july-canadian-housing-market.html


Cheers!

Calgary home prices fall 8%

http://www.canada.com/calgaryherald/news/story.html?id=14366dd6-fb80-4291-a225-8b46cbfa6957

...................MLS sales dropped 10.9 per cent in Canada in July.

In Calgary, sales were down 13.1 per cent compared with July 2007, according to the CREA report.

"Canada's housing market is running into some seriously foul weather amid the weakest affordability in nearly two decades," wrote Douglas Porter, deputy chief economist with BMO Capital Markets Economics in a commentary on the CREA numbers...........

Quote:

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Originally posted by Krazzyfour

Resale home prices slide in July as Canadian housing market weakness deepens

Thu Aug 14, 5:23 PM
Eric Shackleton, The Canadian Press
Email Story IM Story Printable View By Eric Shackleton, The Canadian Press

TORONTO - Resale home prices and sales slid in Canada's major markets last month, while listings roared ahead, more signs the market is weakening, according to a Canadian Real Estate Association report.

Rising consumer caution due to a slowing economy, especially in Ontario and Quebec, prompted nearly an 11 per cent drop in existing homes sales compared to the same period in 2007, according to CREA's Multiple Listing Services figures for July.

"The steady drum-beat of double-digit sales declines this year is beginning to weight more heavily on prices," Doug Porter, deputy chief economist at BMO Nesbitt Burns Inc., said Thursday in a research note to clients.

CREA said the average existing home price fell by 3.6 per cent in July over the same month last year, a continuation of a price decline that began in June when the average price slipped by 0.4 per cent, the first decline in more than nine years.

Complete story

http://ca.news.finance.yahoo.com/s/14082008/2/biz-finance-resale-home-prices-slide-july-canadian-housing-market.html


Cheers!

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