A little Vancouver balsam as a balm on Detroit's wounds...

I just read this article about real estate prices in Vancouver and the exodus it implies. This article from La Presse newspaper in Montreal describes a property at 22nd avenue and Balsam street as the world's most expensive slum. I dont agree with the slum bit but the writer says the house is a fifties bungalow with a dilapidated front stairway, a sick tree, dirty white walls, and crumbling back fence on a 55ft wide lot. The house is on the market for 2,489,000$.

The writer compares Detroit's gdp as double that of Vancouver's as a reminder of how sick the market is in Vancouver. Interviewees include the wife of a financial analyst born in BC who used to live in Hong Kong and is moving back there because it makes no sense to spend that much on property in a city with average salaries. There is no money left over for anything else...

I posted on a previous thread that the market was driven by rich immigrants but I was wrong. According to the writer, out of 55,512 homes sold last year, 195 were bought by foreigners; only 0,4%. The cost of a mortgage is 9,5 times the average family income.

http://lapresseaffaires.cyberpresse....-vancouver.php

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Originally Posted by canuck

I just read this article about real estate prices in Vancouver and the exodus it implies. This article from La Presse newspaper in Montreal describes a property at 22nd avenue and Balsam street as the world's most expensive slum. I dont agree with the slum bit but the writer says the house is a fifties bungalow with a dilapidated front stairway, a sick tree, dirty white walls, and crumbling back fence on a 55ft wide lot. The house is on the market for 2,489,000$.

The writer compares Detroit's gdp as double that of Vancouver's as a reminder of how sick the market is in Vancouver. Interviewees include the wife of a financial analyst born in BC who used to live in Hong Kong and is moving back there because it makes no sense to spend that much on property in a city with average salaries. There is no money left over for anything else...

I posted on a previous thread that the market was driven by rich immigrants but I was wrong. According to the writer, out of 55,512 homes sold last year, 195 were bought by foreigners; only 0,4%. The cost of a mortgage is 9,5 times the average family income.

http://lapresseaffaires.cyberpresse....-vancouver.php

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I can't read French, I don't know what you mean by exodus, or why these two cities can be properly compared. What do you mean by "sick"? That it's dying or cool? How is Vancouver any different than Toronto or Manhattan real estate prices? Those foreigners or workers making an average family income commute in a city using one of the best public transportation systems in the world that go from the city to the suburbs just like any big city. Skytrain has 43 miles of track with trains running every few minutes. Those foreigners are buying houses in the suburbs that the well-developed and heavily subsidized public transportation takes them to. I know people who moved to Vancouver for work. They commute. Back in the 50s when Detroit had 2 million people, I'm sure real estate prices were also around 9.5x the average family income and people commuted from the suburbs.

It's supply and demand and pretty consistent all over the developed world. I don't see your point or what moral or lesson you're trying to make here. I heard a lot of foreigners originally from Hong Kong are returning to Hong Kong because China decided to keep the free market system in place, not plunder the city like the communists did in other Chinese cities when Hong Kong went back to China.

This paragraph explains it pretty well, loosely translated it mentions that a sane market is where housing costs are about 3x the average household income davewindsor. It doesnt take a genius to understand that kind of silliness. Besides that, Vancouver has a skytrain, fine; but plenty of other cities in the world have A1 transit systems and higher use than Van does. What else justify the cost of living in that city beside transit? The scenery? Maybe...


L'économie de Vancouver représente moins de 50% de celle de Detroit, selon PricewaterhouseCoopers. Les salaires y sont inférieurs à ceux de Toronto. Pourtant, en 2011, le prix moyen des logements représente 9,5 fois le revenu moyen des ménages, un sommet au Canada. [[Les économistes estiment que le marché est sain quand les logements représentent en moyenne trois fois le revenu moyen des ménages.)

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Originally Posted by canuck

This paragraph explains it pretty well, loosely translated it mentions that a sane market is where housing costs are about 3x the average household income davewindsor. It doesnt take a genius to understand that kind of silliness. Besides that, Vancouver has a skytrain, fine; but plenty of other cities in the world have A1 transit systems and higher use than Van does. What else justify the cost of living in that city beside transit? The scenery? Maybe...

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The market justifies the cost of living. How is it silly? Those prices in Vancouver have been like that for decades. A lot of people are crammed into a 44 square mile city. Greater population density per square mile translates to higher prices. Where do you get the 3x average household income for the same population density as Vancouver? What would the same house cost in a city with more population density per square mile like Manhattan or Tokyo? A lot more money because more people are crammed per square mile. It's not silly math. That's how the market forces work. Supply and demand. Yet, you think it's silly. Maybe you just can't understand such a simple concept.

1,042 sq miles for Greater Vancouver. Now explain that please. It is getting too complicated for me.

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Originally Posted by davewindsor

The market justifies the cost of living. How is it silly? Those prices in Vancouver have been like that for decades. A lot of people are crammed into a 44 square mile city. Greater population density per square mile translates to higher prices. Where do you get the 3x average household income for the same population density as Vancouver? What would the same house cost in a city with more population density per square mile like Manhattan or Tokyo? A lot more money because more people are crammed per square mile. It's not silly math. That's how the market forces work. Supply and demand. Yet, you think it's silly. Maybe you just can't understand such a simple concept.

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For such a "simple concept", you sure have a difficult time explaining it.

Now, which is it: market forces, or population density, that causes higher real estate prices? What's the cause-and-effect here?

Because sure as shit, I can find you a house in Calcutta dirt-cheap. So let's do away with this higher-population-density-causes-higher-real-estate-prices crap.

It also says that the economy of Vancouver is less that half that of Detroit according to PricewaterhousCoopers, and that the salaries are less than Toronto.

We were in Vancouver in June a week after the Stanley Cup riot. We have friends there who live in a very nice suburban area, bought their house maybe 20 years ago for around 100K it's worth probably 3 million or more now. Our friends say it does have a lot to do with foreign buyers [[not necessarily immigrants but investors and speculators). House next door to them was bought by mainland Chinese for several million, apprarently as an "investment," no one lives there. These are nice but modest houses, 25 - 30 years old trilevels, not megamansions. A common expression I heard was that starter bungalows are selling for $1 million. I don't know, but it seems like they may be at risk for a serious real estate bubble.

There was a lot of angst and self examination in the papers at the time trying to understand the rioting which was very serious, and very destructive. Although there was an attempt to blame "outside agitators," I believe that theory was debunked. A lot of the commentary was, basically, that this was an expression of the extreme disillusionment and loss of hope among the youth there. They have no future unless they want to live with their parents forever because the cost of living is out of sight. These are college kids we are talking about, not your stereotypical losers or hooligans.

This sort of thing has happenned on a lesser scale in other places, like NYC or Toronto. Seems like real estate is unsustainably expensive in the city and suburbs. I'm not sure what it is, but there is something different about Vancouver, besides the scenery, which is spectacular.

So what does this have to do with Detroit? Those kids should move here! They could buy the whole block for a fraction of the price of a starter bungalow in Vancouver.

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Originally Posted by davewindsor

The market justifies the cost of living. How is it silly? Those prices in Vancouver have been like that for decades. A lot of people are crammed into a 44 square mile city. Greater population density per square mile translates to higher prices. Where do you get the 3x average household income for the same population density as Vancouver? What would the same house cost in a city with more population density per square mile like Manhattan or Tokyo? A lot more money because more people are crammed per square mile. It's not silly math. That's how the market forces work. Supply and demand. Yet, you think it's silly. Maybe you just can't understand such a simple concept.

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According to this link, Vancouver was more expensive than Manhattan, per square foot: http://www.msnbc.msn.com/id/37963066...-overexposure/

I've never been there but according to wikipedia Vancouver is only a little more dense than Chicago [[Manhattan is about 6 times as dense, and NYC as a whole is about 2.5 times as dense). So I'd guess that Vancouver has some extremely restrictive construction policies that is helping to keep real estate so expensive.

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Originally Posted by ghettopalmetto

For such a "simple concept", you sure have a difficult time explaining it.

Now, which is it: market forces, or population density, that causes higher real estate prices? What's the cause-and-effect here?

Because sure as shit, I can find you a house in Calcutta dirt-cheap. So let's do away with this higher-population-density-causes-higher-real-estate-prices crap.

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If you bothered to read the second paragraph of my first post, I said it was consistent all over the developed world. Calcutta is in a third world country with extreme poverty. It's is not an economically valid comparison Thanks for playing.

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Originally Posted by canuck

1,042 sq miles for Greater Vancouver. Now explain that please. It is getting too complicated for me.

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Your first post said Vancouver, not Greater Vancouver or Metro Vancouver. There's a difference, just like Detroit and the greater Detroit area or Metro Detroit. Your first post was making a city to city comparison. The city of Vancouver is 44 square miles.

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Originally Posted by davewindsor

If you bothered to read the second paragraph of my first post, I said it was consistent all over the developed world. Calcutta is in a third world country with extreme poverty. It's is not an economically valid comparison Thanks for playing.

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Is that a correlation or causation? Do you have the equation that shows the causal mathematical relationship between population density per square mile and median housing price?

Here's a thought--maybe more densely-populated cities have higher real estate prices because THEY ARE MORE ATTRACTIVE PLACES TO LIVE, and thus, have higher demand. Just a crazy-ass thought from left field.

And at what income level does a city "not count"? I know of people living in Ho Chi Minh City who pay rents equivalent to those in Washington, DC.

Stop making shit up.

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Originally Posted by iheartthed

According to this link, Vancouver was more expensive than Manhattan, per square foot: http://www.msnbc.msn.com/id/37963066...-overexposure/

I've never been there but according to wikipedia Vancouver is only a little more dense than Chicago [[Manhattan is about 6 times as dense, and NYC as a whole is about 2.5 times as dense). So I'd guess that Vancouver has some extremely restrictive construction policies that is helping to keep real estate so expensive.

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So I guess that's why a condo in the old Manhattan Plaza Hotel sold for $48m earlier this year http://www.bloomberg.com/news/2011-0...te-record.html Whereas, the highest price paid for a condo in Vancouver was what, $18m? About the same size http://www.canada.com/edmontonjourna...b-81a5b4ea4abb

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Originally Posted by davewindsor

So I guess that's why a condo in the old Manhattan Plaza Hotel sold for $48m earlier this year http://www.bloomberg.com/news/2011-0...te-record.html Whereas, the highest price paid for a condo in Vancouver was what, $18m? About the same size http://www.canada.com/edmontonjourna...b-81a5b4ea4abb

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You do know what an average is, don't you?

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Originally Posted by ghettopalmetto

Is that a correlation or causation? Do you have the equation that shows the causal mathematical relationship between population density per square mile and median housing price?

Here's a thought--maybe more densely-populated cities have higher real estate prices because THEY ARE MORE ATTRACTIVE PLACES TO LIVE, and thus, have higher demand. Just a crazy-ass thought from left field.

And at what income level does a city "not count"? I know of people living in Ho Chi Minh City who pay rents equivalent to those in Washington, DC.

Stop making shit up.

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Ho Chi Minh City [[formerly Siagon) is located in Vietnam, a communist country. Applying a one party communist run country to the US or Canada is not a valid comparison. Communists control the prices. Again, thanks for playing.

Davewindsor... you crack me up... you can't read the OPs articles... and yet you're trying to tell the OP what he/she really meant in the OP.... lol...

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Originally Posted by davewindsor

Ho Chi Minh City [[formerly Siagon) is located in Vietnam, a communist country. Applying a one party communist run country to the US or Canada is not a valid comparison. Communists control the prices. Again, thanks for playing.

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Uh yeah, sure. Whatever you want to think. Because you have first-hand experience, right? Sorry, pal. I was in HCMC six weeks ago, and it was a market economy if I'd ever seen one. Hell, they probably have MORE of a market economy than we do, since you can negotiate the price of just about anything--a cab ride, a meal, consumer goods, rent, taxes....

But please do keep making excuses for your flawed logic. It's incredibly entertaining.

Right davewindsor, good old commie China has eliminated competition in Shanghai and a thousand other chinese cities. Your theory about real estate values in Vancouver proper doesnt add up. Prices in Burnaby, Port Coquitlam Surrey or New West are just as nutty. The problem they are having is that unreal real estate values in that market are starting to push investors, and talented newcomers away.
That is the kind of unfair playing field people are complaining about these days, the greed begets more greed and tosses aside those who can only dream of owning a home as banal as the one pictured above.

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Originally Posted by ghettopalmetto

Uh yeah, sure. Whatever you want to think. Because you have first-hand experience, right? Sorry, pal. I was in HCMC six weeks ago, and it was a market economy if I'd ever seen one. Hell, they probably have MORE of a market economy than we do, since you can negotiate the price of just about anything--a cab ride, a meal, consumer goods, rent, taxes....

But please do keep making excuses for your flawed logic. It's incredibly entertaining.

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RRRight, it's more of a market economy than we have... That's sarcasm btw. The average wage is $2.50 a day in Vietnam. If you want to run a business, you have to constantly pay bribes to corrupt communist government officals to stay in business. http://tunguyen08.wordpress.com/ You call that a free market system like ours? You want to complain about corruption? Sorry, the media is state run. Lower public officals buy their position from higher gov't officials. You don't pay the bribe, your business and assets are seized in the name of the people. You can't challenge it in the courts because it's a communist government. It's not governed by the rule of law. Make enough of a fuss and you get thrown in jail. On a scale from least to most corrupt countries, the US ranks 20, drug lord infested Columbia is 68, Vietnam is 123, Somolia is 179. It's pretty common for government officials to send their children to American universities. I know people who've had their businesses seized by the communists.

Why don't you move there if you think the place is so great?? Siagon is such a bad comparison to North America. It's a market system with incredible corruption. I'm not going to waste any more of my time responding to you.

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Originally Posted by canuck

Right davewindsor, good old commie China has eliminated competition in Shanghai and a thousand other chinese cities. Your theory about real estate values in Vancouver proper doesnt add up. Prices in Burnaby, Port Coquitlam Surrey or New West are just as nutty. The problem they are having is that unreal real estate values in that market are starting to push investors, and talented newcomers away.
That is the kind of unfair playing field people are complaining about these days, the greed begets more greed and tosses aside those who can only dream of owning a home as banal as the one pictured above.

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The corruption and wage disparities in communist China are almost as bad as Vietnam. These are really bad comparisons. Try again.

Where are the people moving to, Chilliwack? The square miles figure you're citing is pretty close to that of The Greater Vancouver Regional District, a political body that stretches as far east as Abbotsford and north Squamish, nearly to Whistler. From the political entity, it's hard to judge Vancouver itself.

http://en.wikipedia.org/wiki/Greater_Vancouver

The city itself is only about 45 sq. miles, with 600,000 packed in into an area the third the side of Seattle. No wonder housing is high.

BTW, if the folks who want to move out would like to come to Washington, we need apple pickers like craxy down here......

Look up the numbers douglasm in places like Burnaby or New Westminster and you will see some really shitty real estate going for crazy prices. All I am saying is in a market like Vancouver, it makes very little sense. The city is not booming like Toronto or Calgary as far as jobs go. There doesnt seem to be any checks and balances in BC or Vancouver to counter speculation, it is a clone of what happened in the hot markets in the US that busted not long ago.

I got no problem with that. If you look at the U.S. housing problem, the fact that a $250,000 house went for a half a million doesn't become a problem when people are willing to pay that half a mill for that $250,000 house. Vancouver sounds like nothing less that a pre-burst Seattle, except with different currency.

One other thing to consider is that Vancouver is a little like Seattle, that is, reletively devoid of "flat" land to build on. It can go east [[but the commute from Abbotsford would be a killer), but truely buildable land doesn't really exist to the west, north or south.

I can't find specific unemployment rates for Vancouver, but assuming the B.C. rate of 8.8% for August is correct, and in the Thompson/Okanogan it's over 10%, one can assume that the Vancouver rate is somewhere around 7.8%, or signnifigently better than the rate in either Detroit or the US as a whole. With a better unemployment rate, and a banking structure that didn't dissapear into the toilet when times got roung, it really doesn't suprise me that housing prices have not come down.

What surprises me is the fact that nobody tried to stop this nonsense. Vancouver is not Calgary here the job offer and boomtime economy still gives room for affordable housing. How else will you attract folks in the region. It may be OK for someone to flip a house they bought say 3 years ago and turn around to buy a condo in the city. The folks who play this game are in a tight enough circle to afford this and it works for awhile, but the Ponzi-like characteristics of the game start showing when there is no more money from outside coming in. If folks cannot find decent housing, they will decline offers to relocate in Vancouver which is now happening and worse; folks are leaving the city for good.

That's the problem with real estate bubbles. Your house may be worth a half million, but if you want to sell it and move into something nicer, it will be $750,000. You can't really profit while maintaining the lifestyle that you decided to become accustomed to unless you significantly downsize by renting or moving to somewhere where the bubble already burst, or somewhere a lot cheaper [[like Detroit). Most people couldn't or didn't want to do that, and so in a way they were also trapped, although in a different way than the people who are now underwater.

[QUOTE=Gianni;279066]That's the problem with real estate bubbles. Your house may be worth a half million, but if you want to sell it and move into something nicer, it will be $750,000. You can't really profit while maintaining the lifestyle that you decided to become accustomed to unless you significantly downsize by renting or moving to somewhere where the bubble already burst, or somewhere a lot cheaper [[like Detroit).

Yes, and that is why I say the problem with the Vancouver market is people who already have a good lifestyle elsewhere cant afford to move to an average income city with outrageous real estate prices. At least Detroit offers promise for first time buyers, artists with uncertain revenue, startups, and developers who want to test novel projects. The metro region is wealthy, the equation will yield something interesting if the center gets some sweet love from the periphery.
An artist in Detroit for instance can find a wealthy pool of clients in the metro from individuals to corporate giants.