Comments on: Oh Canada! http://blog.redfin.com/sfbay/2008/08/oh_canada.html Redfin Bay Area Sweet Digs Fri, 20 Nov 2009 12:03:22 -0800 http://wordpress.org/?v=2.8.1 hourly 1 By: sue.herz http://blog.redfin.com/sfbay/2008/08/oh_canada.html/comment-page-1#comment-6487 sue.herz Thu, 28 Aug 2008 03:02:28 +0000 http://blog.redfin.com/sfbay/2008/08/oh_canada.html#comment-6487 Red, When I was in Lions Bay in 2004 there was a great house across the street from my friends house that was selling for $375,000 for a 4/2 beautiful house. Now the houses are selling there for around $800,000. One of the perks of the winter olympics being there is that my friends are going to rent out their 4/2 house with a pool and hot tub for $3,000 a week for 3 months. During that time they are taking off on a nice vacation. They said they couldn't resist that kind of money. Although I did find it a little nervewracking to see a black bear wander thru their backyard while I was getting my morning tea. Sue Red,
When I was in Lions Bay in 2004 there was a great house across the street from my friends house that was selling for $375,000 for a 4/2 beautiful house. Now the houses are selling there for around $800,000. One of the perks of the winter olympics being there is that my friends are going to rent out their 4/2 house with a pool and hot tub for $3,000 a week for 3 months. During that time they are taking off on a nice vacation. They said they couldn’t resist that kind of money. Although I did find it a little nervewracking to see a black bear wander thru their backyard while I was getting my morning tea.
Sue

]]> By: sue.herz http://blog.redfin.com/sfbay/2008/08/oh_canada.html/comment-page-1#comment-6486 sue.herz Thu, 28 Aug 2008 02:57:46 +0000 http://blog.redfin.com/sfbay/2008/08/oh_canada.html#comment-6486 David, Thanks for providing me more insight into economics. I wish I was more savvy being the devoted consumer that I am. Sue David,
Thanks for providing me more insight into economics. I wish I was more savvy being the devoted consumer that I am.
Sue

]]> By: Red http://blog.redfin.com/sfbay/2008/08/oh_canada.html/comment-page-1#comment-6473 Red Wed, 27 Aug 2008 22:42:13 +0000 http://blog.redfin.com/sfbay/2008/08/oh_canada.html#comment-6473 The Vancouver area bubbled pretty bad too (double since 2002), and now were seeing the same denial antics there that were seen in California recently. ( It will be a "soft landing"; Asian investors will keep prices high; -and a new one! - the Olympics will keep prices up) But a look back and we see that Vancouver prices dropped off a cliff in 1981 to 1983, not passing the prevous peak until 1989. Then again in 1995 to 2002. There is a moral here: when home prices get much too expensive they eventually go down. Those who ignore this will get hurt. See: http://activerain.com/blogsview/573085/The-Canadian-Real-Estate The Vancouver area bubbled pretty bad too (double since 2002), and now were seeing the same denial antics there that were seen in California recently. ( It will be a “soft landing”; Asian investors will keep prices high; -and a new one! – the Olympics will keep prices up)
But a look back and we see that Vancouver prices dropped off a cliff in 1981 to 1983, not passing the prevous peak until 1989. Then again in 1995 to 2002. There is a moral here: when home prices get much too expensive they eventually go down. Those who ignore this will get hurt.

See:
http://activerain.com/blogsview/573085/The-Canadian-Real-Estate

]]> By: David http://blog.redfin.com/sfbay/2008/08/oh_canada.html/comment-page-1#comment-6472 David Wed, 27 Aug 2008 22:09:00 +0000 http://blog.redfin.com/sfbay/2008/08/oh_canada.html#comment-6472 Oil's dropped $30/barrel the past couple months. Similarly, gas prices are down, copper is down, lead and zinc prices are down, nickel and corn and other commodities are also down. However, prices for consumer goods drop much more slowly than the commodities they're made from in a perfectly rational attempt by purveyors to fatten up their profit margins. Eventually, prices for finished goods drop though as sellers compete for market share (and give up a little on the margin side). Hence "prices rise like a rocket, but drop like a feather." Oil’s dropped $30/barrel the past couple months.

Similarly, gas prices are down, copper is down, lead and zinc prices are down, nickel and corn and other commodities are also down.

However, prices for consumer goods drop much more slowly than the commodities they’re made from in a perfectly rational attempt by purveyors to fatten up their profit margins. Eventually, prices for finished goods drop though as sellers compete for market share (and give up a little on the margin side).

Hence “prices rise like a rocket, but drop like a feather.”

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