Sunday, July 28, 2013


The market is certainly more resilient than one would expect for this time of year. There are more sales than last year as well as lower listings.

The expected rise in the MOI has yet to take place. This is in the face of a few factors which should have a dampening effect

Rates which look like they have broken out.

Mortgages changes which where brought in, in 2012 limiting CMHC insurance to $1 Million and dropping the ratio to 80% from 85%. Now in Vancouver, almost all housing would be over this threshold. But so far we have not seen much of a drop from this factor.

China was experiencing a credit tightening cycle, though it looks like they have loosened the purse strings again and reinflated their housing market (and likely ours).

On the other hand we have an up-tick in court ordered sales. We also have an up-tick in bankruptcy and arrears (hat tip aggregator on Vancouver Condo)

So where does this get us?

Is the market going up again despite the headwinds? Will the MOI drop below 6? Or is this just a pre-approval blip?

It certainly looks to me like there are two areas selling at present. One is the lower end (is there such a thing in Vancouver anymore) which would be explained by the anxious first-timers with pre-approvals in their hands. The second is upper end $3-4m where we have seen more Far East and local Wealthy buyers. Of course they would be undeterred by interest rate and other considerations.

In between, things are pretty stagnant and that may explain the drop in listings. If you see two houses like yours sitting unsold for several months, who wants to be the third one.

There is not enough financial stress out there to 'force' selling and so people will stay put and not move up or cash out. That's why paradoxially those still in the market may be more amenable to offers.

In any case July's number's are likely to be a bit of an anomaly, though I would still expect HPI to show a small decrease. 

Any opinions on what you are seeing out there would be welcome..

Thursday, July 18, 2013

Here's one from my week off

I picked up on the Pimco report from Vancouver Condo info.

The National Post has painted this as a don't short Canada piece. I thought I would read the original.

First who is saying it? Pimco. The world's largest bond dealers. What they say counts. 

Have they been wrong? You betcha. They bet big against the US bonds a few years ago as the US deficit exploded and then switched when they realised the US bond rally had legs.

Are they talking their book? From what I could see their Canadian bond funds have holdings from $3 Billion to as low as $7 Million.  Performance is from +9% YTD to -9% YTD, depending on the fund. 

PIMCO has $2 Trillion of assets under management. yes that's Trillion with a T. They are acknowledged to have two of the smartest bond brains that walk this earth....William Gross and Mohammed El-Erian. You don't get to a T without consistent performance.

However as you can see the Canadian funds are peanuts in the PIMCO empire. So while they may be smart, Canada is a side show for them.

So what did Mr Devlin say?

Did he say that Canadian housing will not correct and is not over-valued? 
NO. He said it IS over-valued and DUE for a correction and very much so in the over-heated areas like Vancouver. However he said it will not be the catastrophic event that everyone has been betting on. I HOPE HE IS RIGHT.

We may be housing bears, but we don't want our country to implode. 

Click on the link above and lets look at figure 2. Household debt to disposable income is declining in the US and UK and plateauing in Australia and rising in Canada. This cannot go up for ever. Currently low rates, HELOCs and asset appreciation are making us feel richer and pushing borrowing. We are no different from the Americans.

It is supported by higher wages. This ratio cannot go up forever. Eventually it will hit a hard wall and start down. 

Then there is the CMHC. I did not read any mention of this monster in Mr Devlin's piece. How can one discuss the prospects for a major housing correction without mentioning the CMHC?

A 10-20% correction, which is his benign scenario, will put a lot of stress on the CMHC and in turn the Federal Government which will have to bail it out. This will have to come from somewhere...higher borrowing or cuts elsewhere.

I hope Mr Devlin is right. I hope it will be a gradual deflation of 10-20% and larger hits in the bubble cities. I hope the Canadian banks will take a few quarters of bad earnings to get over it. I hope the tax-payer won't be skewered for the huge debt of the CMHC.

However what annoys me most is that all of this could have been avoided by less Government meddling and a sane interest policy.

Wednesday, July 17, 2013

Handmade See Saw-Made by Me!

Guess what. 
I've been doing a little wood working...
and I'm totally digging it..
like a whole lot!
S.R. asked the hubs to build her a see saw the other day. 
I found the plans on Ana White's website, and after looking them over, I decided that I could make it....all by myself.
The hubs has been so hard at work on the half bath, I thought it would be one less thing for him to worry over, and I could try my hand at construction.
He cut all of the wood for me because pressure treated wood is so heavy. I needed his muscles to straighten the base a bit (the wood was warped) and to attach the see part of the saw(is that right??;o)), but other than that, I did it by myself. 
S.R. kept asking me if I was sure I knew what I was doing...I did because the instructions were so easy to follow. I plan on staining the wood to match the play set soon.
The kids LOVE their new toy. The neighbor kids LOVE the new toy. I LOVE that I made something that everyone LOVES! Now I'm ready to find something else to build...any suggestions?;o)
On a side note, I thought I would share the beautiful rainbow we had in our backyard the other day...I love moments like these when we can take a second to appreciate God's promises. 
I hope you all are having a great day. Try to stay cool in this heat!

Sunday, July 14, 2013

Fresh Picked Flowers

I love fresh flowers. I picked these from our backyard. Aren't they pretty? I hope you're having a great day!
We're in the middle of a bathroom reno right now...tiny spaces make me I think I'll just peruse Pinterest and look at my pretty flowers...that way I won't have to go paint;o)

Friday, July 12, 2013

LEGO Table

I have been in major build mode this week. I have stepped away from the sewing machine, and have been trying my hand at power tools. I have had so much fun, and I LOVE that my husband keeps a well stocked garage:o)

I have had this table in the attic for about two years. I purchased it from a local yard sale page for $5. It was an awkward sort of table and very dated, but when inexpensive furniture presents itself to me, I buy immediately and ask questions's not always the best approach, but my approach, nonetheless;o)
A couple of nights ago, we were all in the playroom building LEGO scenes, and that's when the idea struck me that E needed a LEGO table. 
And, so it was.
This was the before..a very dated, very drab piece of furniture.
 I used a jig saw to cut out the top....very LOUD, I might add...and, no I was not wearing any ear protection.
It was a hot and humid day, so the red spray paint didn't want to dry. I had to spray a coat, and then bring it inside between coats. My house smelled delightful...NOT! If you follow along on Facebook, you got to see what red over spray will do to blonde hair. I'm happy to report that Dawn dish washing liquid stripped the paint right out of my hair, thankfully!!
I found the LEGO plate at Target for $14.99.  The plate was attached to the base of the table with liquid nails, and trimmed out with quarter round.
I'm so happy with the end result, and so is E.
 Now it's the perfect little end table.
And if you're wondering...those are marker lines on the side of the's a playroom..anything goes, or so it would seem:o)

Participating here:
Lady Behind the Curtain
Crafty Confessions



Craft Dictator



Will be gone for a week

After posting today's numbers.

Keep the fires of hope burning. I know there is a lot of bear fatigue out there..'where is this crash already!'

Well, we are still in a correction from the highs. And even though we have had some days of higher sales to listings (more lower lists than higher sales) as long as we stay above a MOI of 6 we are in correction. We are also going into the slow season for RE sales.

Fingers crossed and see you in a week.

BTW if you are bored have a read of John Hussman's latest commentary. He is one of my favourite commentators. As he says banks have made windfall profits on the backs of savers and the prudent due to ZIRP (zero interest rate policies).

The senior executives have done very well. Many making $5-10 Million a year or more (this is in Canada not the US where number are even higher). 

I have noticed that even with the rise in Interest rates, the banks have barely budged in offering higher GIC rates, even as mortgage rates have ticked up.

Are they keeping the wider spread for themselves? Are they preparing for more write downs when RE deflates? 

Maybe they are saving up money to help out the CMHC when it hits the fan. That would be the right thing to do. Because in Canada not only have had ZIRP but we had a built in sucker to pass risk off to, the tax-payer, and now it would only be right if the banks threw some money into a fund to help bail the CMHC out.......maybe some of those $10M a year executives could throw in a few million too!

Sunday, July 7, 2013

No HAM means no bacon?

Fraser Valley...

No bounce in the FV. MOI sits at a whopping 8.5.

9 per cent lower sales in June 2013 compared with last year
significantly below 10 and 20 year averages.
volume of active properties at 10,515 a decrease of 1 per cent compared to June 2012

As always the Fv benchmark has been the most sticky in coming down. Defying lower volume, lower averages etc and still hanging in there. It was no different this time

Fraser Valley was $552,200, an increase of 0.2 per cent compared to $551,000 during the same month last year. For townhouses, the benchmark price was $298,700, a decrease of 2.1 per cent compared to $305,000 in June 2012 and the benchmark price of apartments was $202,500, 0.8 per cent less than in June 2012 when it was $204,200.

I suspect the real benchmark or standardized median is a lot lower than last year.

Thursday, July 4, 2013

Mr Carney goes to London...

What is the first thing he does?

He says interest rates are too high and the pound is too high too.

Result the pound takes a good tumble and stocks rise over 2%. This ladies and gentlemen is the new Central Banker....not our parents' central bankers who believed in regulating and controlling the more greedy and speculative drives in humans.

These new men (they are all men) want speculation. They want bubbles to be blown up. 

They have one eye on the stock market when they make their announcements and if the gamblers there aren't happy, they quickly shift policy.

No doubt he will will be lauded for his immediate effect on increasing risk appetite, but I would say that Central bankers of Mr Carney's ilk are no longer necessary, just replace them with an 8 year who has a free lemonade stand. They don't seem to realise that all this free stuff will cause indigestion later.

Wednesday, July 3, 2013

Vancouver SFH HPI down 4% YOY


West Van down 6% YOY.

Sunshine Coast and Whistler down 11% over 5 years -bears out what I have seen in those areas.... Including some homes for sale on and off for almost the whole of the 5 years!

Look at West Van and Whistler apertments. I won't post the numbers so bulls don't have a heart attack.


Monday, July 1, 2013

Parsing Larry's numbers

Kudos for the hundredth time to Larry for getting the numbers out so soon.

What do we find for June.

1) The ramp up in sales we noted here and elsewhere is reflected in the numbers. Sales are up quite a bit from June 2012. Inventory is pretty flat YOY except for apartments.

2) Average price (which always shows a lot of noise) showed SFH taking a big 4% drop. However apartments have gone the other way showing a big jump from last month.

What can we deduce from these numbers.

With a lower average and yet sales were up. This would suggest that the lower end of the market was more active this month, maybe on interest rate fears. The higher end is unlikely to be much concerned whether the interest rate is 2.6 or 3.2 % , you can either afford a $4 Million house or you can't.

Last June was a very weak month, this June was more resilient. As I said in the last post, this is crunch time. Is this yet another rebound or was this just an interest rate panic.

MOI Attached 5.6
MOI Apartment 6.3

Window Valance and New Look for the Couch

I hope you all had a fantastic weekend. I got to spend some good old fashioned quality time with my little family, so it was definitely a good weekend for me.
In the midst of that, I was able to finish the window valance and pillows for S.R.'s couch.
If you were with me during Crafting with the Stars, you know that the hubs built this couch for S.R. It was made to fit a crib mattress so that it could be used as a bed for her guests, or for E when they are having "sleepovers".
This little couch has gotten a LOT of use! 
 The large pillow in the back is something I made with some of the remnants of the quilt fabric. Super easy to whip up. The other three pillows were purchased from Target. The square pillows had been marked down to $5.99 and the bolster pillow was around $13. The crib sheet was another Target purchase, and it may have been around $9.99.
 The window valance took some planning and searching online for inspiration. After about an hour, I finally decided to take a few different ideas and put them together.
I really like the end result and I like it much better than the panels that were there before. 
This room has been a lot of fun to put together. Just one more post on S.R.'s "bigger girl room." I'll share with you the art project that is going on the wall beside her bed. 
To see the finished quilt, you can go HERE.
Thanks for stopping by!