Around here, most mornings the talk is all about softwood. Not surprisingly, today it seems to be mostly about Eastwood. Judging by the reviews on ‘performance’ by our hero Clint last evening, the results are mostly governed by political leanings. Since the next week of vacation time in the Maritimes will allow for time of reflection on such matters, no need to comment further just now. Besides, we’ll probably use the time to reconnect with in-laws.. or outlaws, in a good movie or two..
As the final weekend of summer approaches, there are indications of stark differences in opinions shaping forecasts for the months ahead. This is true in U.S. politics, where both Democrats and Republicans are ramping up their campaigns in a very tight race toward the homestretch of November’s presidential election. It’s also true in terms of divergent views about the housing markets on either side of the border. Or how about the partisan views on who will or won’t be in contention for the Super Bowl many Sundays from now – or, Grey Cup – if you’re Canadian, eh? Do we agree the World Series and Yankees are quite predictable? Will the NHL owners and players reach agreement before the September 15th ‘deadline’ or not? It’s reassuring to know that at least we can all agree on anticipating buoyant lumber markets into fall… or not?
Here real estate has inflated, not deflated. Since wages and salaries have flatlined, debt’s exploded. We save less, while Americans are saving the most in a decade. We’ve leveraged. They’ve deleveraged. We’re far more vulnerable to rising rates, have less disposable income and think we’re immune. But the average family in Vancouver, Calgary or Toronto cannot afford the average home, without spending between 52% and 92% of gross income. Anywhere in the States, that would bring belly laughs.
– Garth Turner, 8-30-12
The 26th Annual B.C. Wholesale Lumber Association Golf Tournament was held yesterday at The University Golf Club. The sun delivered as promised, when the first of a dozen foursomes teed off in a Texas Scramble at 11:10am. I had the pleasure of golfing with Craig Nicholson (Marnor Transport), Ian White (Dakeryn Industries), and my dad, Ernie Harder (Retired). A very fine dinner followed at UBC, where BCWLA President Carl Dobler concluded his remarks by presenting the coveted cup to a most familiar team from Conifex Fibre Marketing, who cruised to their 4th consecutive tournament win at nine under par. A great day all ‘round!
“The nascent recovery in new-home sales has U.S. builders rushing to buy up a diminishing supply of well-located, ready-for-construction land. Demand is becoming so overheated in areas such as coastal California that developers are forced to pay more or shop in less-favorable markets. Around the California coast, where the technology and health care industries are fueling job gains, plots are selling faster than developers can prepare the dirt. The supply of finished lots – which have permits, streets, and water and power lines, enabling construction – will fall to zero within a year in San Jose, San Diego and Orange County, said the Concord Group, a consulting firm.” Full Story
“In Texas, land is like lumber, something to build a house for somebody to live in. In California, the land is what’s valuable. The house is just how you monetize it.” Guy Asaro, McMillin Homes
In some instances it is true that what happens in Vegas stays in Vegas. Unfortunately for Prince Harry it wasn’t quite to be. I’m pleased to be able to report that what happens in Prince George doesn’t stay in PG. Along with a small group of invited industry associates, I was privileged to represent Dakeryn Industries on a wonderful long weekend generously hosted by Carrier Lumber, August 23-26. It was exposure of a different kind that afforded opportunities to connect closeup and personal in visits with a key supplier: Bill Kordyban (President), Reg Foote (Sales Manager), Angela Patterson (Sales Associate), Terry Kuzma (Woodlands Manager), and Nelson Malcolm (Planer Manager). We engaged in meetings, gained unique and informative insights into Interior production updates, and experienced eye-opening tours of Carrier’s state-of-the-art sawmill and forestry operations. Enhanced by helicopter transport, the action-packed few days took us to Carrier’s stunning Bar K Ranch on beautiful Nukko Lake, 25 kilometres northwest of PG. Golf and beach volleyball, along with exploration of the northern Bar K’s expansive spread gave way to near highlight performance ATV adventure, merely upstaged by the gourmet dinners served up at the log house each evening.
A lumberman’s summer holiday mill trip extraordinaire!
Last evening I was among a mostly under 50 year-olds crowd of 1200 who jammed a downtown Vancouver hotel ballroom to hear blogger, financial advisor, Garth Turner shape perspective and confront disillusionment with realities of real estate markets. Turner, former member of parliament, business journalist and author of numerous investment advice books, has become somewhat of a rock star, feeding his “blog dogs” at greaterfool.ca. His entertaining and cautionary posts on real estate ( “house porn”) bring website hits measured in the millions. His talk last night was billed as “a chat about the future of real estate and where money is best placed in a volatile world.”
His fast-paced presentation revolved around The New Normal – characterized by glacial economic growth and weaker commodity prices, and indebted families spending less. He referred to the frenzied buying in the Vancouver real estate market between 2009 and 2011 as the “delusional period”. “In 2012, the 15% price correction and 30% collapse in sales foreshadows what is yet to come.” By the time things trough here, he sees a 40% per cent drop in average price, with a return to 2005 levels. He connected the dots – illustrating how a price correction trend underway in 2008, averted at that time by emergency interest rates and looser lending rules, has been re-established in 2012. Turner’s response to those who say “But it’s different here—everybody wants to live in Vancouver.” “Everybody wants to live here, but nobody can afford it!”. Turner suggested that it doesn’t take selling pressure to result in lower prices, with a reminder that the law of supply and demand will govern what happens. Check out the accuracy so far of Turner’s 2012 predictions offered back in December here. His summary of last evening is available here.
Normally this time of year, my dad, brother and I head off for a little male-bonding on a high altitude lake in the B.C. Interior in hopes of hooking a rainbow on the fly. This year however, the lure of a Seattle sports doubleheader on the calendar proved too tempting. So with tickets and passports in hand, we hit the I-5 bright and early Saturday morning – to catch the Sounders kick-off at 1:00 pm, followed by the Mariners playing host to the Minnesota Twins at 6:00 pm.
Both venues for the games – CenturyLink Field (also home to the Seattle Seahawks) and Safeco Field – are nothing short of spectacular. And while the Sounders somewhat predictably humbled our Vancouver Whitecaps, what was most impressive was the attendance for the game – a boisterous 55,718 – all of whom stood, for the entire 90 minutes. In fact the Seattle Sounders, considered by some observers to be the most successful expansion franchise in professional sports history, have set Major League Soccer average attendance records annually since their inaugural season: 30,897 in 2009, 36,173 in 2010 and 38,498 in 2011. This year, average attendance will exceed 42,500 – another league record. “That figure would rank Seattle fourth in the top leagues in Italy and Spain, sixth in the English Premier League and 11th in Germany. The team also has the league’s highest television ratings, which would rank in the top third of the NHL and top half of the NBA” (Source).
Interestingly the club’s five-year partnership with Xbox is set to expire after next season; a high-profile entertainment and sports agency has already been hired to explore opportunities with other companies. With a brand this sizzling hot, there’ll soon be a lot more than just goals to count when it comes to the Sounders!