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Vancouver's will fall less because....

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February 01, 2009 – Comments (8)

the high price of rent means that homes are not as over valued.  The cost of home ownership is less out of wack relative to rents in other cities, like Calgary, Edmonton, and Toronto....

That is not my opinion, just the lame research out of UBC a couple months back.  It was pointed to me because of my position that housing prices were coming down.  I had a few shaking their heads at me when I was selling last year, and quite a few still believe that Vancouver is different, it will only see a minor decline...

My first comment when that researcher was out of his league and his degree(s) should be burned.   I challenged the basis of the assumption that rents would hold.  Vancouver has peak construction happening and lots of people that need to sell to get into their new homes.  People are either going to walk from their deposits, or decided to rent their second homes should they be unable to get a price they want. Rents will go down, as they have everywhere that has over built housing.

I guess reading the article about the falling rents got me going on that one.  I think I already did a blog on that bad research. 

8 Comments – Post Your Own

#1) On February 01, 2009 at 8:00 PM, dwot (75.87) wrote:

My friend has a condo in Florida and she had it empty for 6 months and had to reduce rent 25% to get it rented....

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#2) On February 01, 2009 at 8:04 PM, dwot (75.87) wrote:

I am pulling a comment from Big Picture,

"sinful mistress Says:
February 1st, 2009 at 4:29 pm It would seem that rents would rise. People who have been foreclosed have inadequate credit ratings to purchase and must rent, ergo making rentals a premium. What do I not understand? "

She doesn't understand that people without jobs will be doubling up in housing.  People will rent extra rooms, move back with parents, cohabitate for the wrong reasons, you name it, but their will be an increase in average number of people per household.  And some of those foreclosed properties will result in new units for rent opening.

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#3) On February 01, 2009 at 8:09 PM, dwot (75.87) wrote:

To read...

 http://robertreich.blogspot.com/2009/02/real-fight-starts-after-stimulus-is.html

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#4) On February 01, 2009 at 8:20 PM, jszoke01 (25.33) wrote:

At least your friend had someone to rent to...  Come to Michigan and take a stroll down misery lane - there's a sea of for rent signs, but no one to rent to.

I'm outta here and heading to Houston. 

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#5) On February 02, 2009 at 1:40 AM, DemonDoug (86.32) wrote:

rents are going down here in LA, big vacancies, anyone who thinks vancouver will be different is a paid liar.

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#6) On February 02, 2009 at 10:54 AM, ByrneShill (72.34) wrote:

LOL, for a while I thought you actually believed it (that Vancouver will hurt less).

Anyway I'll take a low-rent, low-price city over high-rent, sky-high-price any day.

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#7) On February 02, 2009 at 2:08 PM, Rehydrogenated (32.49) wrote:

I actually wrote my undergrad thesis on why the canadian housing market was going to crash. It turned into me just bashing economists on bank payrolls. Remember as the esteemed Canadian economist Carl Gomez once said, "Lastly, it is important to note that looking at housing as an investment is only one way to characterize its value. That's because housing provides certain other intangible benefits, the most notable of which is shelter."

From "Bursting Aspects of the Housing Bubble Myth"

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#8) On February 02, 2009 at 6:18 PM, dwot (75.87) wrote:

Rehydrogenated,

In the 1 to 2 year range I was reading stuff that was generally believed, and now those beliefs are changing, but I didn't want to be bashed so I just left comments like, "lets come back and re-evaluate this in a year or two." 

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