This honest account of the market quiet from realtor Jeff at Rob Chipman’s blog 24 July 2007 5:29pm -
“Times are certainly changing. My phone didn’t ring at all today. I currently have 6 active listings on MLS, another 1 that should get processed by tomorrow, and possibly another 3 listings to hit within a week.
I was chatting with one of my colleagues today who has 26 active listings and she told me that she was doing a lot more showings last year while carrying 8-10 at a time.
From a Realtors perspective this is bleak. I had to laugh earlier this week when a prospective client thought it was “bleak” that I suggested $449k on his property that he bought for $138k in 1999 and it traded in 1992 for $131k. Greedy pig!”
Anecdotes about Vancouver construction quality often involve disbelieving visiting foreigners. Are locals blinkered in this regard? This from Partisan Spectator at Vancouver Condo Info July 11th, 2008 at 1:29pm -
“My relative, a professional construction engineer from Poland with 40+ years of experience, was here visiting my family for the first time (his first time in North America). Once he saw a few construction sites (SFH, lowrise and highrise ones) he wholeheartedly LOL about house quality and the building code. He could not imagine people throwing away massive amounts of money to get a house that has a warranty for max 10 years. He and his family are living in an apartment building that was built about 140 years ago. For the whole lifecycle, the roof has been replaced once about 20 years ago, and there was no structural repairs. Sewer is still original and will be replaced in 10 years. Water pipes were re-done about 30 years ago. The 4-storey building still has the original stucco that have been painted every 6-7 years and the original wiring. Inside the apartment, all doors and hardwood (oak) and stucco are in the same shape as 140 years ago. Anybody can say something similar about their dwelling in Van? “
This from Drachen at Vancouver Condo Info on July 11th, 2008 at 12:26pm -
“Psychology seems to be shifting too. I just had a chat with a friend of mine who sold last spring (after I pointed her here (Vancouver Condo Info) and to several other blogs). For a year she’s been enduring, “You’ll be priced out of the market forever.” and similar comments from friends and family. Now she says for the first time some of them are starting to say, “Hmm, maybe that wasn’t such a dumb move after all…” Another friend who was so confident in the market a year ago she bought a second condo is panicking over whether she can sell it in time (it needed rain shielding and is waiting on a couple more fixes before it can be certified). She’s hoping to have it on the market by mid July. Both of those represent a 180 turn in psychology from a year ago, if this is normal we’re about to see that “rush for the exits”.
This from pricedoutfornow at mohican’s Langley Financial Planning blog 10:02 PM, July 09, 2008 -
“The party’s over. My landlord called today, panicking because the neighbour has dropped her asking price by $20k or so. (Two open houses in a row, no bites). He wants out of our one year lease so he can sell, he offered to sell it to me (ya right). Rush to the exits, don’t get trampled!!! Renting from amateurs sure sucks at times…”
Many renters who under more normal circumstances would have been owners have found the RE market in Vancouver singularly challenging. They have had to be philosophical about their predicament. And they are now getting some relief from signs that change is afoot. These anecdotes from Joshua on Rob Chipman’s blog July 08, 2008 at 10:23pm and 10:26pm -
“I’m 37 and a renter, never owned. Whaddya know, life got in the way – grad school, kids, more grad school, finally got kickass job, looking to buy but … prices outta control… wish I’d got my new job 5 years earlier but what can ya do? I’m waiting for prices to correct, and they will… in the meantime, I’m not too worried. My rent is less than half the cost of owning, I’m banking the rest, there are plenty of ways to build wealth, but buying in the current market is not one of them.”
” Was out in the yard (of the house I happily RENT)… neighbour’s boyfriend’s buddy was yakkin – hey this place I saw at blah blah blah, it was like 539 a couple months ago, now its 499, its awesome… Other neighbour leans across the fence – ya, prices are droppin, you should wait a year… Other guy – totally, I hear ya…the word is out, its on the street.”
This exchange reported by blueskies at Rob Chipman’s blog July 7 2008 at 10:47am -
“Ran into an ex-neighbor in my favorite coffee shop this AM -
me: sell your place yet?
xnabe: no, kind of slow right now
me: i see there are 6 others for sale too
xnabe: yea,but i can wait
me: what are you looking for?
xnabe: we want one in H&H
me: something will come up i’m sure
xnabe: you guys were pretty smart getting out a year ago
me: thnx but we were warned
xnabe: you knew this was going to happen?
me: yea, we had two years warning so we dumped it
xnabe: you are kidding! right?
me: nope just watching California market screaming GET OUT!
Suddenly there are people talking about ‘getting out’ of pre-sale assignment contracts in Vancouver developments. Flippers are in trouble and headline prices haven’t even dropped yet. This story of an ‘owner’ vs developer standoff from cuba108 at RE Talks on 2008 Jul 07, 9:55pm -
“I have a client who has purchased a pre sale with a clause preventing him from assigning his unit until the developer has sold all the inventory. Though the sales people have told him that he supposedly has one of the most desirable floor plans and that they would have no trouble reselling it, permission to assign was denied. He was prepared to assign at a substantial loss, pay the developer for the extra commissions involved and some other concessions, to no avail. They also pointed out that not only would he lose his 15% (90K) they would sue for the balance plus interest. Developers realize the market is about to TANK! He is now so angry he is going to list his unit at 25% under market, with the condition it is assigned when the development is sold out (if ever). If nothing else he may bring sales to a stop until someone bites. Fortunately he has the money and the stones to carry this out, but I’m afraid the majority of pre sale purchasers ( Woodwards anyone? ) are hooped.”
This update from the frontlines from exx at Rob Chipman’s Blog July 6 2008 at 9:44 pm -
“I went to 6 open houses in Port Moody & Coquitlam today, some in the same buildings that I looked at last month. The prices just keep tumbling down. The best one being a unit we looked at last month going for $379,800. Today? $345,900 (10% haircut). The realtor’s reason for the big drop? The ‘local’ investor is nervous about the market. I asked her if she thought he’d consider an offer 10% below the asking price (~$310,000) and her response, as expected, was “Yes, make an offer, he’s VERY motivated.” I don’t blame him, nearly 20% of the units are for sale.”
Spec builders have become aware of the slowing market. This from Bob at Vancouver Condo Info July 4th, 2008 at 10:35am -
“In Abbotsford I’ve heard from two different sources that there’s a developer.. that just dropped the prices on his new houses 70-80K to $499,000.”
And franko (July 4th, 2008 at 12:28 pm) adds the following -
“As an ex-spec builder who keeps in touch with the gang that’s still active, let me assure you that the same thing is happening in Coquitlam and on the North shore. During the last coffee break with a bunch of builder buddies, I learned that most of these guys are not proceeding with new projects and are letting recently acquired permits expire. Unlike developers of large multi-unit projects, that could take a couple of years from commitment to completion, small-time house builders sometimes have the advantage of bailing out at the first sign of trouble. Although most of these guys with unsold new houses are scared $hitless as not even price drops are generating much interest, one of the guys FINALLY had the subjects removed from a recent sale that enabled him to escape with only a small loss…or so he claims. Anyway, this guy was so happy, you’d have thought he just won the lotto. Needless to say, he sprung for the coffee and doughnuts.”
There is always somebody on the other side of the deal, as this example from Slanty2D at Rob Chipman’s blog July.03.08 at 11:04am so clearly illustrates -
“I’m 35, bought my first house in 2000 (primary residence) in East Van for $290k, with a buisness partner bought another East Van house in 2004 for $420k (so I’m only 1/2 owner of second house). Saw the market SKYROCKET, so decided in fall of 2006 to sell the primary house. Sold for $840k (after everything about $600k profit). I made an agreement with the new owner that I’d rent the house back, so didn’t have to move. It’s now closing in on 2 years since I sold the primary house. I’ve invested my capital and done well, and I’m keeping one finger in the punchbowl with the 1/2 ownership of the rental house. The owner of what was my primary residence (where I am still currently renting) has tried to sell the house twice, and both deals have fallen through. He now says he’s resigned to keeping the house, even though it’s cash flow negative because he can’t sell it for what he wants. I’m watching the market, and am prepared to sit on cash for a couple more years to see what happens…maybe in a while if prices drop enough I’ll buy my house back and never have to move.”
And, if that comes to pass, the current owner will have lost an amount equal to the profits that Slanty2D gained.
At this stage of the RE cycle, sellers can’t afford to pass over offers. This from Greenhorn at RE Talks 2008 Jul Wed 02, 12:21am -
“A friend of mine put in an offer on a home. For round numbers, the deal went something like this. The property was listed at $1,000,000. My friend offered $950,000. The vendor countered at $975,000. The realtor said take the deal at $975,000 because there are 5 back up offers at $975,000. My friend walked. Guess what? There were no back up offers. In fact, there were no offers at all. The realtor then begged my friend to take the property and demanded that he write an offer at $950,000 as the vendor would accept this price and this is what was initially offered. My friend passed as listings were increasing. Guess what? The property is now on the market at a list price of $925,000. This is what happens when you have stupid vendor and unscrupulous realtor.”
As inventory builds further, those wishing to sell are feeling the pressure.
This from annew at Paul Boenisch’s blog July 1, 2008 5:10pm -
“I have 2 friends trying to sell properties right now and feeling very frustrated. One is a small cheap unit downtown, the other is a very high-end large unit. Multiple showings, open houses, staging, the whole 9 yards, and no nibbles yet. The only factor left to change is price… and so the pressure is on.”
This from octagonian at Paul Boenisch’s blog July 1, 2008 5:21pm -
“On-the-ground reports routinely tell of SIGNIFICANT price reductions in West Van. These numbers ARE already impacting prices. West and North Van are tarpits — no way out for anybody who bought after ’05…
And, in a related vein, this from betamax at Vancouver Condo Info July 1st,2008 3:16pm -
“I just talked to a realtor who said he didn’t sell a single thing in June. Zip, zilch, zero. This is a realtor who made $300k last year.“ .