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2010 Olympics

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August 24, 2008 – Comments (4)

Vancouver is to be the host of the 2010 Olympics and it has caused extra problems for Vancouver, imho.  For one, the housing bubble got grossly excessive, certainly exceeding Florida's bubble, although Los Angeles was worse.

Mish has a post on the Bejing Olympics and how it didn't do for businesses what they thought it would do.

Being from Vancouver and having seen the outcome of Expo 86, well, I think Mish is right that expectations are going to fall flat.

When Expo 86 happened Vancouver was at an historical affordability level in housing that may very well have been unpresidented.  There had been a very harsh housing bubble around 1980 and quite a few people had been hurt and many were very cautious about housing.  In 86 I saw one bedroom condos in the 30k price range, and those same condos are in the 400k price range now, but wages are hardly up at all, or perhaps wages have been stagnant in some occupations.  I think some occupations are paying the same as in the 80s whereas some have perhaps doubled.

People remember the boom after Expo and how much housing went up after Expo.  I have referred to the seven years following Expo as the quarter million dollar housing lottery.  If you had a house that is roughly what you gained.  People expect the same kind of thing, the Olympics are going to drive prices even higher.  They completely fail to consider that the affordability index was probably about 2 then and it has peaked at 8 or 9 now, and it was a 2 for twice the home.  

So, with things so affordable, well, things were also far more affordable for business.  Now things are so expensive business just doesn't have the same opportunity to make the same margin at all.

It has served to hold Vancouver's housing market up longer then most other markets in North America, but the last 3 or 4 months prices have been coming down...

So often people fail to consider the bigger picture and I think this Olympics is going to be very costly for some business men.

4 Comments – Post Your Own

#1) On August 24, 2008 at 10:10 PM, GS751 (27.56) wrote:

I can't disagree.  And for Canada is not a coming out party like China.  Its kind of funny how my mind goes to how it could be part of some political conspiracy theory to prop the housing market up through the rest of their terms lol.

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#2) On August 24, 2008 at 10:10 PM, GS751 (27.56) wrote:

I can't disagree.  And for Canada is not a coming out party like China.  Its kind of funny how my mind goes to how it could be part of some political conspiracy theory to prop the housing market up through the rest of their terms lol.

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#3) On August 25, 2008 at 8:24 AM, Gemini846 (47.03) wrote:

Some professions have seen an abundance of entries into the market in the past few years but not a lot of growth making those jobs a lot less valuable. For instance:

Computer/Electrical Engineers in FL were getting paid about 45-55k in 1990. Salaries went up a bit during the housing bubble, but for the most part those people have been laid off now and are being replaced by college grads back in the 45-55k range.

There is a HUGE discrepancy between employers too. One employeer may be very selective and hire only the best in the 60-70k range (what the school couseler told you you'd make if you got that degree), but another employeer might not care as much citing a ton of apps and pay 40k.

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#4) On August 25, 2008 at 1:45 PM, Tastylunch (29.36) wrote:

I reall enjoyed that Expo. Loved Expo Ernie as a youngtser. Of course I'm not from Vancouver so I wasn't as concerned as to the effect on the local economy...

I wonder though Dwot if the Winter games are more or less of a bad investmen.t I'm guesisng they could be worse as the summer games at leats provide facilities that have more long term use potnetial (un like say bobsledd runs) . I think they were a mild disaster for Salt Lake if I remember correctly. If nothing else it tore up the town so much to try to anticipate them that it hurt the economy going into the games.

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