Real Estate at a standstill

[DoDo1975]

I do not think this is as unusual a situation for the Okanagan as some here seem to be making it out to be - and much of what people want "addressed" here in the Okanagan simply does not apply in other markets in BC, or in Canada. It costs more to live where more people want to live.

This is not about asking for anything to be addressed; only about accepting the "fact" that by accepted and traditional measures of housing affordability, Kelowna (and Penticton) are not considered affordable.

I agree that skewing of the data is inevitably worse here due to a large number of retirees and other high net worth individuals; however I don't believe this would change the data drastically to the point of making housing affordable by these measures. The majority of retirees are not rich, though some are and most people in town are also not rich and survive on their incomes.

And I have to point out that there is ample other evidence of unaffordability that you don't need a calculator to see. I personally know many, many families stretched to the breaking point by housing costs, many, many people just scraping by and many more living it up off of home equity and not from their income.

Affordability in my mind is not a necessity. However, the further you stray from it, the more problems come with it. Go too far and families no longer have the ability to enjoy a high quality of life and don't have means to keep other areas of the economy afloat. Poor affordability over time will bring with it many societal and economic problems. ReMAX recently pegged their affordability index for Kelowna at 78.5% or roughly 2.5 times what is considered "comfortable". Does anyone actually think that this is actually sustainable in the long term and that we will be living in a desirable community 20 years from now if it did??

Some suggestions here that lower income people (and this is probably half the people) should just move and the expectation that this void would just be filled by other rich people neglects to consider what the community would look like if that actually happened. Who will keep all the services running, unplug their toilets, sell them groceries and do all the other things rich people expect to be done for them?

[rustled]

I do not think this is as unusual a situation for the Okanagan as some here seem to be making it out to be - and much of what people want "addressed" here in the Okanagan simply does not apply in other markets in BC, or in Canada. It costs more to live where more people want to live.

This is not about asking for anything to be addressed; only about accepting the "fact" that by accepted and traditional measures of housing affordability, Kelowna (and Penticton) are not considered affordable.

I agree that skewing of the data is inevitably worse here due to a large number of retirees and other high net worth individuals; however I don't believe this would change the data drastically to the point of making housing affordable by these measures. The majority of retirees are not rich, though some are and most people in town are also not rich and survive on their incomes.

And I have to point out that there is ample other evidence of unaffordability that you don't need a calculator to see. I personally know many, many families stretched to the breaking point by housing costs, many, many people just scraping by and many more living it up off of home equity and not from their income.

It's the Okanagan.

This is nothing new, here. What's new is the need to talk about it as though it's something new.

Affordability in my mind is not a necessity. However, the further you stray from it, the more problems come with it. Go too far and families no longer have the ability to enjoy a high quality of life and don't have means to keep other areas of the economy afloat. Poor affordability over time will bring with it many societal and economic problems. ReMAX recently pegged their affordability index for Kelowna at 78.5% or roughly 2.5 times what is considered "comfortable". Does anyone actually think that this is actually sustainable in the long term and that we will be living in a desirable community 20 years from now if it did??

I think you answered your own question. It's not sustainable for people who can't afford to live in a community to try to stay in that community. We saw that at the Lower Mainland back in the last century. This is nothing new.

Some suggestions here that lower income people (and this is probably half the people) should just move and the expectation that this void would just be filled by other rich people neglects to consider what the community would look like if that actually happened.

Alternatively, we can neglect to consider the sustainability of enabling people to stay where their incomes are inadequate for "affordable" housing.

We benefit from living where more people want to live. Living where more people want to live costs more.

[DoDo1975]

This is nothing new, here. What's new is the need to talk about it as though it's something new.

Rustled, I have read your posts for a long time and usually agree with what you say and the way you say it; but here I think you are just plain wrong.

See the graphs I posted on page 51.
viewtopic.php?f=31&t=91426&p=3063997&hi ... h#p3063997

The green line represents affordability in Kelowna based on prevailing rates for the last 50 years.

I moved to Penticton in 1988 and have been in the valley off and on since then.

Note that when updated for the rate hikes of the last couple months, that green line would be above the purple line on the right.

This is most assuredly something new.

[cv23]

This is not about asking for anything to be addressed; only about accepting the "fact" that by accepted and traditional measures of housing affordability, Kelowna (and Penticton) are not considered affordable.

New times require new methods and new measures or we will just continue down the "traditional" road.

I agree that skewing of the data is inevitably worse here due to a large number of retirees and other high net worth individuals; however I don't believe this would change the data drastically to the point of making housing affordable by these measures. The majority of retirees are not rich, though some are and most people in town are also not rich and survive on their incomes.

And as has been previously pointed out drawing conclusions, forming beliefs, based on skewed or manipulated numbers is not something that should be done.

And I have to point out that there is ample other evidence of unaffordability that you don't need a calculator to see. I personally know many, many families stretched to the breaking point by housing costs, many, many people just scraping by and many more living it up off of home equity and not from their income.

As can many examples of families having excessive disposable income because of housing costs, many many people prospering and many more living off their income and not home equity. There are two sides to every coin and clearly some want to only see the negative without realizing/admitting there has to be a positive for there to be a negative.

Some suggestions here that lower income people (and this is probably half the people) should just move and the expectation that this void would just be filled by other rich people neglects to consider what the community would look like if that actually happened. Who will keep all the services running, unplug their toilets, sell them groceries and do all the other things rich people expect to be done for them?

And should the lower income expect the "rich" to give them money or should they do like most of the "rich" people did to get where they are work to amass wealth? Lots of things in life today revolve around supply and demand and both housing and services fall into that category. As supply drops prices increase until supply increases to meet demand and a balance forms or until supply exceeds demand and prices fall. The demand, and resulting prices, for housing and services will remain high in Kelowna as it is/was considered as a desirable place to live. There is no question the prices for everything in Kelowna, including services has increased and will continue to do so as long as demand exceeds supply. Sure people can move to where housing is cheaper but that is because the location is less desirable so less demand and those people will find that the wages are commensurate with the reduced demand. They will not be any further ahead just trapped at the same level in a worse location by their own lack of ambition or dedication to better themselves and there financial position.

[DoDo1975]

This is not about asking for anything to be addressed; only about accepting the "fact" that by accepted and traditional measures of housing affordability, Kelowna (and Penticton) are not considered affordable.

New times require new methods and new measures or we will just continue down the "traditional" road.

I agree that skewing of the data is inevitably worse here due to a large number of retirees and other high net worth individuals; however I don't believe this would change the data drastically to the point of making housing affordable by these measures. The majority of retirees are not rich, though some are and most people in town are also not rich and survive on their incomes.

And as has been previously pointed out drawing conclusions, forming beliefs, based on skewed or manipulated numbers is not something that should be done.

And I have to point out that there is ample other evidence of unaffordability that you don't need a calculator to see. I personally know many, many families stretched to the breaking point by housing costs, many, many people just scraping by and many more living it up off of home equity and not from their income.

As can many examples of families having excessive disposable income because of housing costs, many many people prospering and many more living off their income and not home equity. There are two sides to every coin.

Some suggestions here that lower income people (and this is probably half the people) should just move and the expectation that this void would just be filled by other rich people neglects to consider what the community would look like if that actually happened. Who will keep all the services running, unplug their toilets, sell them groceries and do all the other things rich people expect to be done for them?

And should the lower income expect the "rich" to give them money or should they do like most of the "rich" people did to get where they are work to amass wealth? Lots of things in life today revolve around supply and demand and both housing and services fall into that category. As supply drops prices increase until supply increases to meet demand and a balance forms or until supply exceeds demand and prices fall. The demand, and resulting prices, for housing and services will remain high in Kelowna as it is/was considered as a desirable place to live. There is no question the prices for everything in Kelowna, including services has increased and will continue to do so as long as demand exceeds supply. Sure people can move to where housing is cheaper but that is because the location is less desirable so less demand and those people will find that the wages are commensurate with the reduced demand. They will not be any further ahead just trapped at the same level in a worse location by their own lack of ambition or dedication to better themselves and there financial position.

Well as interest rates crank up and remain there we will really see how many of each category there is and whether the accepted and traditional methods of calculating affordability and applying it to a market while flawed, are still valid.

I wouldn't be betting on your side, but I have a real nice property that I would be willing to sell you at March 2022 prices if you are interested.

[rustled]

This is nothing new, here. What's new is the need to talk about it as though it's something new.

Rustled, I have read your posts for a long time and usually agree with what you say and the way you say it; but here I think you are just plain wrong.

See the graphs I posted on page 51.
viewtopic.php?f=31&t=91426&p=3063997&hi ... h#p3063997

The green line represents affordability in Kelowna based on prevailing rates for the last 50 years.

I moved to Penticton in 1988 and have been in the valley off and on since then.

Note that when updated for the rate hikes of the last couple months, that green line would be above the purple line on the right.

This is most assuredly something new.

Thank you for your kindness. I may indeed be wrong. However, it seems to me this is only "new" if one insists on only looking at the Okanagan or, as your graphs represent, only Kelowna.

It seems to me this has most certainly happened elsewhere.

Again, when one lives where more people want to live, one benefits from living where more people want to live - and it costs more.

[DoDo1975]

Thank you for your kindness. I may indeed be wrong. However, it seems to me this is only "new" if one insists on only looking at the Okanagan or, as your graphs represent, only Kelowna.

It seems to me this has most certainly happened elsewhere.

Again, when one lives where more people want to live, one benefits from living where more people want to live - and it costs more.

I am sure it has elsewhere over history. Monaco, Manhattan, London, San Francisco a bunch of others. Vancouver and Toronto are way worse; but arguably since we haven't seen a prolonged rate tightening cycle in 20+ years the question of whether or not the levels in those places are sustainable remains to be answered.

But again that doesn't change the fact that currently RE in Kelowna is considered by traditional and accepted methods and definitions to be unaffordable. That was the question that this tangent went off on; not whether it is sustainable (don't think it is); not whether the the definitions and methods have flaws (they do); not whether there are some valid reasons behind it (there are some); and not whether the government should do something about it (please don't bail it out).

[rustled]

Thank you for your kindness. I may indeed be wrong. However, it seems to me this is only "new" if one insists on only looking at the Okanagan or, as your graphs represent, only Kelowna.

It seems to me this has most certainly happened elsewhere.

Again, when one lives where more people want to live, one benefits from living where more people want to live - and it costs more.

I am sure it has elsewhere over history. Monaco, Manhattan, London, San Francisco a bunch of others. Vancouver and Toronto are way worse; but arguably since we haven't seen a prolonged rate tightening cycle in 20+ years the question of whether or not the levels in those places are sustainable remains to be answered.

But again that doesn't change the fact that currently RE in Kelowna is considered by traditional and accepted methods and definitions to be unaffordable. That was the question that this tangent went off on; not whether it is sustainable (don't think it is); not whether the the definitions and methods have flaws (they do); not whether there are some valid reasons behind it (there are some); and not whether the government should do something about it (please don't bail it out).

The next question would be, what does it matter that it is considered by those definitions "unaffordable"?

It seems to me there's an intention behind labelling Kelowna real estate "unaffordable". What is labelling real estate in Kelowna "unaffordable" intended to accomplish? Does it, in fact, accomplish anything useful?

It seems to me it is intended as more than simply a statement of fact, e.g. "When we benefit from living somewhere more people want to live, it costs us more to live where more people want to live".

It seems to me the objective of applying the "unaffordable" label to Kelowna real estate is to help pave the way for an intervention of some sort.

[cv23]

I wouldn't be betting on your side, but I have a real nice property that I would be willing to sell you at March 2022 prices if you are interested.

How about at March 2002 prices? How about at your purchase price? And no if why not?
One would think that someone so totally concerned about "affordability" would be only interested in a purchasers level of "affordability" not market prices in any way, or is it more about that everyone else should do as I say not as I do?

[DoDo1975]

I wouldn't be betting on your side, but I have a real nice property that I would be willing to sell you at March 2022 prices if you are interested.

How about at March 2002 prices? How about at your purchase price? And no if why not?
One would think that someone so totally concerned about "affordability" would be only interested in a purchasers level of "affordability" not market prices in any way, or is it more about that everyone else should do as I say not as I do?

Are you attempting to imply that stating as fact that RE in Kelowna is considered unaffordable means that someone is a raging socialist? All the realtors will tell you the same thing, so will the economists and the banks. Are they all raging socialists?

RE is really unaffordable; that's not a good thing and I won't vote Trudeau, Singh or whomever the greens put up.

Did I just blow your mind.

[cv23]

How about at March 2002 prices? How about at your purchase price? And no if why not?
One would think that someone so totally concerned about "affordability" would be only interested in a purchasers level of "affordability" not market prices in any way, or is it more about that everyone else should do as I say not as I do?

Are you attempting to imply that stating as fact that RE in Kelowna is considered unaffordable means that someone is a raging socialist? All the realtors will tell you the same thing, so will the economists and the banks. Are they all raging socialists?

RE is really unaffordable; that's not a good thing and I won't vote Trudeau, Singh or whomever the greens put up.

Did I just blow your mind.

So I take that is a "no" to the sale and no explanation is necessary as the complete deflection says it all.

Here we are right back hearing the same old song that "RE is unaffordable" because some can't afford it and now because some say it is "unaffordable". That is just as much an opinion and holds equally as much validity as those who say "RE is affordable because there are sales", because some realtors say it is and the banks are still lending money for real estate purchases.
Rather than making a blanket and false statement as "RE is really unaffordable" a far more accurate statement would have been "Some RE is unaffordable to some people".

One thing to note is who is the one who brought socialism into the discussion and is suggesting that those who think real estate is "unaffordable" are socialists. I just mentioned someone "so totally concerned about affordability" and was not the one who attempted to equate "affordability" concerns with socialism or being a socialist.

[BC Landlord]

I will provide an accepted method, of which there are many; but they are all similar. Kelowna does not come close to meeting the threshold any which way you slice it.

There are many different methods to calculate affordability of a market, but pretty much all of them use a measure of income and a measure of prices.

Just repeatedly pushing this nonsense won't advance your argument. There is no such thing as "affordability of a market". Affordability applies to individuals or households ONLY. However, some would use all kinds of statistical gymnastics to support their narrative, mostly for personal or political reasons.

[DoDo1975]

I will provide an accepted method, of which there are many; but they are all similar. Kelowna does not come close to meeting the threshold any which way you slice it.

There are many different methods to calculate affordability of a market, but pretty much all of them use a measure of income and a measure of prices.

Just repeatedly pushing this nonsense won't advance your argument. There is no such thing as "affordability of a market". Affordability applies to individuals or households only. However, some would use all kinds of statistical gymnastics to support their narrative, mostly for personal or political reasons.

And yet every major bank, economist and realtor trade group as well as all levels of government use such measures. I guess they haven't been schooled by a small time landlord yet.

I will let them know to attend your next economics lecture. Where do you teach, the University of Phoenix?

[Mazdatruck]

Houses were "afforable" because interest rates were so low.

If you had access to credit/leverage/downpayment/parental help there was virtually no limit to affordability. The example I posted that was placed on Canada's biggest financial discussion forums showed this, people were given huge mortgages with very little income or meaningful employment to back it up. Everything was afforable to them.

If you didn't have access to credit/leverage there was no way in unless you saved for 15 years and wanted to move to Estevan. Nothing was afforable.

Now that interest rates are high the people who said everything was afforable and are living in over leveraged houses will be asking for welfare checks from Daddy Trudeau within 24 months.

Reading through pages and pages of this discussion is painful. It's not even a debate but self-labeled landlords and real estate bulls keep the lie going because they feed their families with those lies. They HAVE TO lie otherwise it's like financial suicide. It's just a circle though it's not a debate. You're talking to a wind-up real estate doll.

Moving on...

https://betterdwelling.com/canada-is-he ... xford-econ

Oxford Economics warned investors to prepare for a hard landing for Canada’s economy. The research firm attributes the coming shock to high debt loads, elevated inflation, and rising rates. The resulting shock is forecast to lower home prices around 30% from the peak.

Already at -30% from peak in some places in BC!

[BC Landlord]

Just repeatedly pushing this nonsense won't advance your argument. There is no such thing as "affordability of a market". Affordability applies to individuals or households only. However, some would use all kinds of statistical gymnastics to support their narrative, mostly for personal or political reasons.

And yet every major bank, economist and realtor trade group as well as all levels of government use such measures. I guess they haven't been schooled by a small time landlord yet.

I will let them know to attend your next economics lecture. Where do you teach, the University of Phoenix?

And you are making it all up. In reality, no "major bank, economist and realtor trade group" use such bogus metrics. Politicians, maybe.