tag:blogger.com,1999:blog-5936637281134795592.post8756903038981289937..comments2024-03-08T08:55:52.985-08:00Comments on Whispers from the Edge of the Rainforest: Doomsday Defined?Unknownnoreply@blogger.comBlogger8125tag:blogger.com,1999:blog-5936637281134795592.post-82280602836350006032012-05-01T17:20:35.405-07:002012-05-01T17:20:35.405-07:00Belief #1 - The price has just been reset by these...Belief #1 - The price has just been reset by these sellers.<br /><br />Belief #2 - Relatively new buyers who can't take that much of a hit are in denial of the price change in #1, and writing these off as odd-ball events. Emotional back-up for them is the media still pumping housing. CBC even had a great pump it up segment last night 4/30.<br /><br />Belief #3 - Eventually buyers will learn that they are better off by waiting, as price drops continue. Those who see real estate an investment at this future point in time will have largely evaporated - it's just buyer's looking for a deal.<br /><br />Impact here - Just wait a couple years or so until the point when recent buyers who can't take the hit of the lower sale, can't really afford the mortgage, and lose the ability to pull money with heloc as price has dropped then begin to think of foreclose and bankruptcy as salvation from real estate hell..Unfortunately for Van, that's what's coming and it is going to be biblical after this hits a few years out.<br /><br />CanAmericanCanAmericanhttp://whispersfromtheedgeoftherainforest.blogspot.com/2012/04/doomsday-defined.html#comment-formnoreply@blogger.comtag:blogger.com,1999:blog-5936637281134795592.post-36029952829212801482012-05-01T14:59:28.285-07:002012-05-01T14:59:28.285-07:00privatize CMHC?privatize CMHC?Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-5936637281134795592.post-81750367302401071772012-05-01T13:58:34.493-07:002012-05-01T13:58:34.493-07:00The 3% foreclosure rate the CMHC quotes is the per...The 3% foreclosure rate the CMHC quotes is the percentage of *houses that have CMHC insurance* that would have to be in foreclosure for their doomsday scenario.<br /><br />The 5% that Garth mentioned was the percentage of *houses listed for sale* that are in foreclosure.<br /><br />As the pool of houses with a mortgage is much, much larger than the pool of houses that are listed for sale, these numbers are not directly comparable. 5% of listed houses in foreclosure is probably under 0.5% of houses with CMHC insured mortgages. So we're nowhere close to 3% yet.<br /><br />That said, the US foreclosure rate is somewhere around 3.4% right now, so perhaps the 3% number is not quite as "obscene" as the CMHC thinks it is.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-5936637281134795592.post-17422353191032049722012-05-01T11:16:42.540-07:002012-05-01T11:16:42.540-07:00Risk assessment is only being done through the pri...Risk assessment is only being done through the prism of what has come before. As Tsur Sommerville said the other day, we are in uncharted territory.<br /><br />There is potential here for a collapse with devastating repercussions.Whispererhttps://www.blogger.com/profile/03524022285962626228noreply@blogger.comtag:blogger.com,1999:blog-5936637281134795592.post-78932406473347725172012-05-01T11:09:10.076-07:002012-05-01T11:09:10.076-07:003% foreclosure rate doesn't seem very high hur...3% foreclosure rate doesn't seem very high hurdle... and sounds like it's cumulative too (not per year)<br /><br />OTOH, what loss severity is assumed for that "obscene" scenario? That's another major factor in determining whether CMHC has enough capital.another value investorhttps://www.blogger.com/profile/07659083327214275843noreply@blogger.comtag:blogger.com,1999:blog-5936637281134795592.post-5157428956630416392012-05-01T10:22:02.644-07:002012-05-01T10:22:02.644-07:00Would love to hear more from him as the months go ...Would love to hear more from him as the months go by.Whispererhttps://www.blogger.com/profile/03524022285962626228noreply@blogger.comtag:blogger.com,1999:blog-5936637281134795592.post-32540740613432123362012-05-01T06:49:43.720-07:002012-05-01T06:49:43.720-07:00A friend of mine is a real estate lawyer that only...A friend of mine is a real estate lawyer that only handles foreclosures. All of the business has been okanagan and sunshine coast but lately he has seen them creeping into the lower mainland and he saw his first in North Vancouver last week.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-5936637281134795592.post-68000829195243855022012-04-30T23:27:39.931-07:002012-04-30T23:27:39.931-07:00Great summary of the latest developments. Looking ...Great summary of the latest developments. Looking at Vancouver Price Drop, that 17% discount is a surprisingly consistent theme. There are lots of examples in those status that hint at desperation. Very interesting times.<br /><br />Regarding the "Boomer Advantage": I've never thought about it in those terms before. Certainly easy to imagine how a downsizing boomer demographic could put a lot of downward pressure on prices, especially in the SFH sector, but it had never quite occurred to me that they're also the demographic that may be most willing to accept reduced prices.<br /><br />If a 17% discount is what the *beginning* of the decline looks like (putting the vast majority of people who've bought in the last five years totally underwater), that CMHC Doomsday scenario looks mighty precarious.<br /><br />Fortunately, the housing market is strong and stable and the downside risks are only in our imaginations. ;-)Ricknoreply@blogger.com