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Is this for real? Unlike other shutdowns caused by problems at various ISPs, this notice seems pretty final. You can see it here.

Well, the funniest, most honest, most pathetic, most misguided, most revealing blog on the internet is gone. Now that all of Casey's properties have been foreclosed, the original raison d'etre of the blog was probably gone, anyway. You could sense some of this problem in recent posts, where Casey showed what was in his wallet or wrote about his hopes to set up a foreclosure saving service of some vague kind.

Groove to some Van Halen as the video news rolls.

I did a search of all the townhouses listed on the MLS in the Victoria Real Estate Board today, Wednesday, May 30, 2007. There are over 250 townhouses listed - that is around 100 more than were listed at the same time last year.

Townhouses are supposedly an inexpensive option favoured by first time buyers. After looking at the first ten listings, with asking prices ranging from $169,900 to $279,900, I guess they could be considered "cheap". The cheapest listing was over $60,000 less than any of the others, but that is because of a pending "special assessment".

There is a general theme to the write-ups that accompany these cheap listings. In 7 out of 10 cases, the write-ups begin by mentioning something about affordability, price reductions or quick sales.

Clackamas is a small town southeast from Portland, Oregon.

The Albertans are coming! The Albertans are coming!

I keep an eye on what is going on in the US, particularly in California, where I first started noticing bubble blogs sprouting on the internet a few years ago. After a few years of watching debates rage back and forth over whether an inevitable day of reckoning would arrive for over-priced US real estate, it looks like the debate is finally over.

Nobody knows for sure where it will all end, but a lot of the hopes and dreams that seemed substantial back in 2004-2005 in California and other parts of the US have turned to so much desert dust, blown away by the realignment of economic forces, away from a bubble-tastic frothiness that was so aptly blamed on "irrational exuberance".

I was driving around Victoria this weekend, enjoying the nice, beautiful sunny weather, and saw multiple for sale signs on busy corners in the Gordon Head, University, Henderson and Fernwood areas.

This is anecdotal evidence at best, but it seems to me there are more signs up at this time then I have seen for a few years now.

I also saw signs block after block, something that seems unusual for this time of year. Is there anyone from the real estate community reading who would like to post their thoughts on how things are going so far this year?

Feel free to agree or disagree, and post your own observations.

Well, it could never happen here in high priced Victoria, could it?  Courtesy of YouTube, some Houston roadkill.

Global overvaluation of real estate is a bubble of epic proportions. Which begs the question, what's next?

Charles Hugh Smith wrote an interesting article recently in which he noted that even as US stock markets climb to new heights, insiders have been selling like crazy. This is called distribution, and you can read about it here, in a story titled The Moon's a Balloon - and about to Pop.

Here is a portion of the inventory chart from the Victoria Real Estate Board site, which can be found by visiting here. As you can see, inventory is on a big upswing at the moment, with the trend clearly pointing to a growing divergence between sales and units available on the market.

The conditions of a few years ago, when scarce inventory was snapped up immediately, leading to the biggest jump in prices of the last few years, no longer exists.

As prices continue to rise, it seems that with more choice, buyers are still paying a premium, but now they can be choosy. And for all the other people listing their properties without success?

Over at Victoria's Truth, a poster has consistently argued that at most, a 10% correction is in the offing, though lately he has mentioned the possibility of a 20% correction.

Rather than reply there, and perhaps disrupt the thread into a back and forth between bears and trolls er bulls, I decided to validate my take on things - which is that the target price of $350,000 = median single family home is not only likely, it is supportable. Or, am I out of touch, is it really different here now?

Okay - it's different everywhere. So what? Does that mean Victoria is in a protective bubble that isolates it from the wider sweep of economics? Does Victoria and BC for that matter run counter to the trends in the larger economy? If a global over valuation of real estate is correcting, do so many wealthy refugees from less desirable locales want to move here, that it won't matter? Prices will still keep going up?

This is a routinely expressed fantasy on why it's different here, this time.

Here is an update to a chart I posted in March that tracked inventory based on some searches on the MLS in the local market area. The time period covered by the data is now almost a year. If you compare the left and right sides of the graph, you can see how the local market is doing compared to the same time a year ago.

These numbers are not the same as the statistics provided by VREB, which are listed month by month, they are a snapshot of inventory available at any particular time - the data does not show sales, but rather property that is listed, which has not sold yet, or which may never sell. The snapshot can also be used as a measure of how many months of inventory are sitting unsold at one time or another. The more months of inventory available, the better the choices for buyers, and the more discerning they can be about any decisions to purchase. There is less rushing in the market. There is less concern about being outbid, or losing a rare opportunity.

How did my parents get rich? Or, how did they do so well, and have it so easy, compared to my generation (X)?

Was everything easier, did everything fall into place for them?

What was the received wisdom from their parents that got them where they are now? There were some different truths. One of the most obvious was: buy your house and pay it off! If you are still working and your house is paid off, you can save, invest, and in fact, get rich. It is those years after the house is paid off that make such a difference.

But somewhere in the 1970s, things began to change, right around the time that the baby boomers began buying houses in larger numbers. As house values went up, second mortgages and lines of credit became more common.

This leads to a change in values, until now, it seems the main reason to buy a house is to see whether the value goes up - not to try to pay it off.

Is there any easy money left? Is it time to lock in fixed rates? Can buyers afford to buy or re-finance with fixed rates, or do variables still rule the bubble land?

Meanwhile, a gloomy Greenspan is warning of a recession for the US economy. Gains in the stock market may be linked to losses in housing. Which begs the question, what will future losses in the stock market be related to?

China is in danger of its own made in China housing bubble. Really!

It doesn't feel like it.

Traffic is still in the neighbourhood numbers range, not as if this blog was an on-ramp to the global information superhighway.

How did this happen?

I have no idea, but check out these two Google search results for BC Housing Blog and British Columbia Housing Blog.

It probably won't last, but for now it's kind of cool; let me know when Cheaprealty drops down to number 2!

Last week I took a walk in Songhees mid week, in the early evening. One of the most startling things I noticed was the complete absence of anybody around. In the big courtyards between the large apartment buildings, nobody was out enjoying the early evening air, despite it being a warm, clear, beautiful evening. There didn't seem to be many people out enjoying their balconies either.

Spinnaker’s pub was full, but the general area was eerily empty of activity. There were some homeless guys drinking beside the seawall, maybe they scared all the seniors indoors.

Was everybody at Spinnaker's? Was everybody inside watching Access Hollywood?

Or was nobody home, because the apartments are now all owned by absentee owners who only visit for brief periods, if at all.

How long will it take for a real neighbourhood to develop in Songhees, if ever?

What would Victoria be like if neighbourhoods like this became the norm, and spread throughout the city?

CMHC notes actual single family home urban housing starts are down around 14.5% in the first 4 months of 2007 versus the first 4 months of 2006. This is blamed on affordability and a skills shortage.

What is not explained is how there was enough skill last spring to start 14% more houses.

Looks like developers are keeping an eye on what is happening south of the border, and are trying to engineer the proverbial soft landing.

Victoria is apparently the 9th best place to live in Canada, ahead of metropolises as diverse as Vancouver and Port Alberni. According to data used to calculate Victoria's position in the list, the average house price ($509,000) is only 7.6 X average family income ($66,700). According to the latest stats from VREB, the housing affordability has decreased even further this spring relative to average family incomes since housing prices have continued to rise!

For a counter intuitive take on the fall-out of the US housing bubble, read this book review in Bloomberg where the reviewer disagrees with Daniel Gross, the author of "Pop! Why Bubbles are Great for the Economy''. Mr Gross argues that the US property bubble was alright, because it resulted in building of new housing stock and gentrification of formerly blighted neighbourhoods. As the reviewer pointed out, some of these overbuilt areas will probably return to blighted status in the near future.

Bloomberg also reported the Canadian dollar climbed to an 11 month high on continued strong performance of the Canadian economy.

Meanwhile, and predicatably, south of the border, things continue to go from bad to worse, because as this article from the Arizona Republic points out, regarding the woes of all aspects of the property business, now that actual lending standards are being enforced, buyers can't qualify for fancy expensive houses anymore.

On another note, in Asia, a continent determined to leave a truly titanic mark on the field of architecture, the biggest buildings in the world are being built in an entirely non-competitive manner, except, somebody else is already building bigger buildings somewhere else. So there.

Finally, Twist over at Housing Doom skewered David Lereah, the departing chief economist of the US National Association of Realtors, for a curious interview in which David claimed he did a good job forecasting, he is even now calling for a real estate recession, but names himself as a continued cheerleader for the housing industry. Cheerleader? Huh?

Fire away.

Check out the new links, take out a bunch of mortgages, buy some houses for sale by owner and then come visit me on my new yacht!

Okay, so there's no yacht yet....

Comments are welcome, if Charles reads this, yes, I know I am just trying to make it in the big scheme of things as a big shot, I still crave material possessions and achievements. Living in Victoria's property market has left me a little bit crazy, so I'll try any scheme to get me a house at this point.

I mean it! Okay, sorry about that Charles....

Some crazy schemes to keep that bubble inflated. Over at Househunt Victoria the question was asked about what businesses can do to encourage people to move to Victoria despite the high prices. Is the local real estate market proving a detriment to the ability of employers to find and retain employees? Are people bailing on Victoria now or refusing to move here based on housing unaffordability?

With a tip of the hat to Housing Panic and also to HouseHunt Victoria:

Does it smell like housing crash fear yet in your town? Does your Dad tell you to buy, despite his gut feeling it would be better to wait?

Are conversations about housing these days accompanied with some fear, respect and uncertainty about what's coming, or do they seem to revolve around not missing the boat and starting somewhere, anywhere, or are they filled with just plain bewilderment?

Do you know anyone who has cashed out and is renting now, waiting to jump back in at the next downturn. When do you think that will be?

Feel free to comment.