Cash is King and Other Noteable Quotes

Like Dr. Priscepionka, one of my university professors, would say, "the graph is almost impossible to read, but what it shows is really important."

So, if you want to better read the graph, click on it. At least our graphs use colours, not like the good doctor's combination of white, grey and black.

What the graph shows are the declines in real estate prices across several major North American markets. A good place to be is near the top and to the far right. The two worst places to be are, at the bottom of the chart since that means your city has experienced the greatest price drops or, to the furthest left of the chart since that means your city is falling faster than those cities to the right.

Which city is that with the fastest falling prices in North America. Oh-oh, that's Vancouver. Yep, the same city that, in the spring of 2008, some experts claimed would experience a 5-9% price increase this year. Now we don't like to say, "we told you so." BUT. We forecast the drop in price. And like Yogi Berra said, "you can look it up." Just scroll down a few blog postings. But even we didn't think the drop would be so far, so quick. But we continue to predict a bottom 25-30% from the top.

There is another quote that we know, "all statistics can be made to lie, and all....." We hope you remember the quote. So lets see what the Real Estate Board of Greater Vancouver (REBGV) says about prices. Again, if you scroll down you will see why I get so annoyed with the way the REBGV reports prices. The REBGV is reporting that prices are down about 6% from their peak, for what the board calls a "benchmark" detached property, whatever that means. What we do know is that the same benchmark property (we think its the same benchmark property) was about $920M earlier this year, then dropped to $808M, and is now $726M. Perhaps the board can't do basic math or maybe there is an eyesight problem. To paraphrase from Gene Hackman to Nathan Lane in The Birdcage "then you need glasses because that is definitely a boy." A drop of about $200M from $920M is a darn sight more than 6%. Actually Hackman also says something about "a darn sight" in the Birdcage.

So as Mr. Rogers might say, "what do we do next boys and girls?" Well, we hoard all our cash. Because cash is king. I don't remember who said that. And we don't go into the water until its safe again.