I have a good job offer in Rupert I'm seriously considering. Thinking about getting into the real estate market as a bonus before the big run up. Tough call considering the plans I have in PG. IMO the PG real estate market has topped out.

The PG real estate maket has close to topped out, but is poised to bottom out in seven years.

That's when the beetle kill bonus will be gone and when Canfor will shut down it's old and inefficient mills.

Oil and gas won't be the magic bullet as it will take too long to come online and replace the lost jobs. And even if it did, the jobs are qualitatively different, so there will necessarily be a massive turnover of residents.

But with skilled labour shortages, lots of economic opportunities will be missed or unfeasable.

Sell your house in five years, or hold onto it for another twenty.

Hey Chad

The Rupert market took off some time ago, your are late. The spectulators bought up the empty homes at that time. Right now there is a glut on the market out here with everyone of those investors holding their breath to see if they cn hang on until the jobs hit the ground.

Bohemian,

Where did you buy your crystal ball. I want one just like it. Also where did you get your calulator....isn`t five years the year after the Olympics when the demand for skilled jobs will have dropped off dramatically down south.

let's see .....

sell house in 5 years for $350,000 ....

buy another similar house in PG for $350,000 .....

who is going to pay for the cost of the realtor, lawyer, moving?

seems ludicrous .....

unless someone is planning to move to Equador.

or buy a similar house in Vancouver for $1.2 million with the lottery winnings.

;-)

PG will see pain in the housing market long before 5 years.

Consider the US housing market is in free fall dropping 22% in the last year with some saying it is still 40% over priced. The equity is evaporating before their very eyes and they are all locked in on the new 50 year mortgages with a floating rate to get the minimum payment. Hence large scale bankruptcies. 2/3rds of the US economy is consumer driven.

Mortgage payments go up and equity evaporates means the housing market stalls, therefore the lumber industry in PG is no longer profitable, pine beetle exhaustion on the horizon and the mills will all start to cut and run leaving PG with no alternative industry to fill the gap in the short term. Once people realize PG missed out on the container port to Prince Rupert, Grand Prairie, and Edmonton then the negative outlook will bring us back down to 2000 prices in the market IMO. Should start the free fall by next fall I think.

The opposite is true in Prince Rupert.

Runner I figure the jobs will hit the ground by mid summer in Rupert and grow steady from there.

There are rumours that a continuous wind farm will be built along the railtrack from Rupert to take advantage of the slip stream created by the trains as they whistle by at 200km/hr.

;-)

"Consider the US housing market is in free fall dropping 22% in the last year with some saying it is still 40% over priced."

Not sure where that figure of 22% came from ...

In this article, written less than two weeks ago it states: "Total existing home sales, including condos and town homes, fell 12.7%"

http://www.usatoday.com/money/perfi/housing/2006-11-20-home-sales-summer_x.htm

Drops in single family home prices are less than that.

"Home prices fell in at least 45 metropolitan areas in the third quarter as the real estate slowdown spread beyond industrial cities, where job losses have taking their toll on housing, to inflated markets in Florida, California and Arizona."

While at the same time: "More than 100 metro areas posted prices increase last quarter, including 21 that had double-digit gains. Topping the list was Salem, Ore., where prices shot up 25%, followed by Elmira, N.Y., with a 19% gain, and Salt Lake City with 17%."

It appears, as in Canada and other countries, the cycles in the manufacturing parts of the country are not coincidental with the cycles in the resource regions of the country.

We have to remember, people in North America are extremely mobile when compared to Europeans. They think nothing of moving to a community with better job opportunities.

So, let us analyze it from that point of view. Is this another migration? Are those people who are living in overpriced housing in the Northeast no longer able to afford to have a trailer in Florida, or take a vacation in Florida, thus reducing the service sector size required to keep out of state visitors happy over the winter?

Houses may be overpriced. People do not typically buy houses because they are cheap. People buy houses because they need them or feel they need them. The population of the USA is growing, and will continue to grow for some time. If kids move back home for cheaper housing, they will eventually move back out, especially as they have kids and those kids grow older.

The bottom dropped out of the western market in 1981 ... at the same time the east was beginning to ramp back up ...

Have patience .... the universe is unfolding as it always has ... and PG may play a small part in it ... which is enough for this tiny dot in the centre of the province, far removed from where the real action is ... thank goodness.

;-)

shoot .... I forgot, we are in Canada .. trains here do not go that fast yet. Just think how much faster the beads from the USA could be delivered to China in exchange for electronic games if we improved the rail corridor.

Owl, I had a really good reply, but lost it when my computer crashed and it took an hour to get my ethernet card working again. grrr

The foreign controlled US fed created this situation with free money and the reprecussions are about to come into play.

Anyways here is a quote that says it all IMO.
-----------------------------------------

"In 2000 the total value of homes in the US was $11.4 trillion. Today that number has shot up to $20.3 trillion; nearly double.

At the same time, mortgage-debt in 2000 was a trifling $4.8 trillion (about half) while in 2006 it skyrocketed to a whopping $9.3 trillion."
...
"By 2008, if the present trend-lines persist, housing prices will probably drop to 25% to 30% of their 2005 value; diminishing equity value by approximately 45% to 50% for most homeowners. "

http://www.rense.com/general74/smack.htm
Think wage inflation and demand IMO.
------------------------------------
Very good article

http://www.fxstreet.com/fundamental/
analysis-reports/the-coming-collapse-in-housing/
2006-11-23.html

another one

http://patrick.net/housing/crash.html

"Interest rates going back up. When rates go from 5% to 7%, that's a 40% increase in the amount of interest a buyer has to pay. House prices must drop proportionately to compensate."
...
"82% of recent loans are adjustable, not fixed."

http://www.moneyweek.com/file/12849/is-the-us-housing-market-crumbling.html

"According to a recent study, 29% of 2005 purchasers now have no equity in the homes."
-------------------------------

I will admit I can't(don't have the time) find the 22% figure I quoted. It was a figure that represented the drop in value of new home sales year over year. Not sure if it was month specific, but really it doesn't matter considering all the other indicators all pointing down.

Locally I have two friends that have empty $300,000 houses after they traded up, but now haven't been able to sell their homes for the last 4 months. I'm not buying even with a $20,000 carrot. On Hill Cresent across from DP Todd the Hayer homes were listed at $320,000 and now down to $300,000 with not a single one sold as of yet that I know of in 6 months. I think locally we've peaked and once the mills feel the effect of the American slowdown we are a naked emperor that is going to feel the down side.

Local politicians are still pumping along with the realtors based on an inland port. They have done nothing to justify their outlook IMO and won't be around when the people that buy their stories get burned.

Time Will Tell

That said I should add that PG has a huge pent up demand for low income housing, and rancher style housing for disabled and elderly. Maybe when the developers lose big on the high end stuff they will refocus on the low hanging fruit.

I looked at the first article, Chadermando. I look at the source when I read that sort of stuff. The article fits the source, in my opinion.

I do not buy into that article anymore than I buy into this article on the same site:

http://www.rense.com/general74/short2.htm

or any of the other stuff which belongs in the National Enquirer. The facts may be right, but the presentation is wrong. You can do virtually anything with statistics.

If you take a close look at the median selling price of houses on that list, there are 148 locations where information is available for the the 2006 comparison with 2005. 103 of them had an increase, while the rest had a decrease. The worst decrease was 10.5% while there were twenty locations where the increase was 10.5% or greater. Two were above 20%.

The next thing you need to look at is where are the low prices and where are the high prices. Low, in the old industrial heartland, Pensylvania, Ohio, Michigan ....

Highest prices - in those locations which feed the "new" economy. Top 3 at over $700,000 are all in California with the top 2 in Silicon Valley. Then comes Hawaii, which has been high for as long as I can remember, then two more in CA. Then comes the north eastern seabord agglomeration from Washington DC to Massachusetts - which are 8 locations taking the price down to $400,000.

Then comes Seattle at $375,000 with the largest increase of those shown above, 14.5%. Portland, OR also has an increase in that range, but house prices are lower by $100,000.

I agree house prices in parts of the USA, as well as parts of Canada are inflated. I do not agree that they are inflated by 40% or more.

As far as mortgage interest goes, that has allowed more people to own rather than rent. Those people who are good financial planners will have bought a place where they do not have to pay more for their mortgage than they had to pay for their rent.

On the other hand, those people who are gamblers, rather than financial planners, will have bought houses which were more than they could chew off. As long as prices go up, and they sell at some point before they dip substantially, and then get a place the size they used to have they will likely have done well.

I think we are seeing a pent-up demand in PG by those who I would call gamblers. They have not been able to practice their obsession for some time, and now they can. Those houses on Hill street are not only attrocious looking, but they are oversized for anyone but those who have large families. But then it is a free world and who am I to judge.

It is interesting how one can follow the pattern of houses built over the years. The average 1000 square footer of the late 60's to the late 70's, most with carports, but few with garages. Simple hip roof. Then the 1000 square footer built about 1979 without a basement, the living quarters on the second floor, with the main floor slab on grade and a single car garage sucked in underneath. The actual size of the space was less than before, but it looked twice as big.

Since the last 10 to 15 years, we have been building mnore and more hosues with one and two cra garages, full basement, and two storeys for total finished areas ranging in the 1,500 to 1,800 sf area. Roofs all over the place and tits coming out of the walls all over the place.

So, have prices gone up? Yes, property prices have, and house sizes have, thus the price increase.

You are right, no one has been thinking "affordable" housing for some time. They did not have to. Prices were low enough.

Is the sky going to fall. I am no chicken little, so I would say not. Will there be some adjustments? Sure, there always are in an open market. Sometimes up, sometimes down.

BTW, I have been in this house for close to 30 years. I like it and am not planning on moving, so I really do not care how high or how low the price is going to be next year or in the next decade. My children might be more interested in that.

;-)

Owl, we will agree to disagree on the US housing market and its eventual effect on PG's lumber market. Good break down on the past building practices.

That said I disagree with you about Rense. I think its an excellent site because of the fact you can not be sure anything on it is true. It gives them a lot of freedom to explore hypothiticals and conspiracies that eventually turn out to be true. I would say 10% of their articles are complete rubish, 70% are mainstreem links, and the other 20% explore the reality of our world under the cover of satire or conspiracy theory. More times than not they are right when it comes to the Bush administration and the global take over by corporate multinationals and global bankers. The article you exampled falls into the 10% rubish, where as the one I exampled I think was legit.

I think one should assume that all sites are thus excellent as i tend to doubt the veracity of anything i read on the net (or elsewhere). As owl has said, statistics can be made to say what you want. Further, economic analysis has got to be the least precise science(or art ) there is. Why else do we need so many economists and why do they all say different things.
As for the real estate boom in PG, well it isnt really an increase in prices. It is more of a correction back to what they were a decade or so ago. I was just looking at some appraisals i had done way back in the 90's. What does it mean for the future? I dont know. If i did i would either be rich or heading smartly in that direction. However, if you want a weather vane, watch me. If i buy a lot of real estate, the prices are bound to fall! Hell, it worked that way for the stock market.