Monthly Archives: February 2010

Honest Realtor Shocks Local Couple – “Don’t even think about buying now, it’s the worst time ever.”’

This tale from Fool me once… at greaterfool.ca 27 Feb 2010 11:49 am -

“A local realtor shocked my wife and I. We are renting in a very nice Burnaby neighbourhood and went to look at an open house close by. The realtor looked us straight in the eye and said to us on the way out “Don’t even think about buying now, its the worst time ever.” I must have looked confused because he said “Don’t worry, I’ll have multiple offers by tonight.” This veteran realtor earned my respect.”

“A local realtor passes and says: “Every time those cameras click real estate goes up $100″

Eric at greaterfool.ca 27 Feb 2010 bemoans the fact that fine weather for part of the Olympic Games may have given visitors an artificially rosy view of Vancouver -

“Instead of 4°C and raining sideways, we got the once-in-five-years treat of a sunny, warm February. I was really hoping for the rain, really and truly, because anything else was bound to add to the silliness that is Vancouver real estate. So, there I am watching a week of stunning sunrises from the Cambie bridge, surrounded by hundreds of visitors at 6am, who flocked up the span with cameras in hand. A local realtor passes and says: “Every time those cameras click real estate goes up $100″. Sigh. March Madness is around the corner. … And THEN the bloody cherry trees started blooming.”

“He rents, and has a half million dollars in cash ready for a down payment. If he buys he’ll end up with a mortgage the same size. So, if prices fall 20% in the next year, he’ll lose 40% of his equity – $200K wiped out.”

In a housing crash, or even a moderate correction, the many who have more than their entire net-worth in housing will be devastated by the leverage working against them. This story is of a wise man attempting to avoid that fate. -vreaa

This from Garth Turner at his blog greaterfool.ca 27 Feb 2010 -

“On the way from the Vancouver airport I stopped to have coffee with a guy who lives nearby. He rents, and has a half million dollars in cash ready for a down payment. But, he knows if he buys he’ll also end up with a mortgage the same size. So, given the magic of leverage, if prices fall 20% in the next year, he’ll lose 40% of his equity – two hundred large wiped out.”

“I recently went back to my first home in Mount Pleasant, when I had lived as an immigrant back in 1989. There has been a lot of changes to the neighborhood, and blocks where I don’t recognize where I am”

This response to Froogle Scott Chronicles Part 5 from space889 at vancouvercondo.info 26 Feb 2010 10:52 am -

“I had recently gone back to my first home in Mount Pleasant when I came as an immigrant back in 1989 and lived there for about 10 years. There has been a lot of changes to the neighborhood and blocks where I don’t recognize where I am. There have been large heritage style houses torn down and rebuilt as large townhouse complexes. However to me this is also progress. While people may be nostalgic about those cute character houses built pre-1930, or those cute charming wartime bungalows, the question I have is do they really think it’s a good idea to keep all those houses as they are, never renovate or rebuild them? I think we should preserve some heritage buildings but that doesn’t mean all new developments are bad. Some are, some aren’t. However to to me wishing things don’t change is even worse. Imagine for a minute, if Vancouver had somehow been frozen in time so that no existing house is torn down and no new big box houses were build in their palce since 1970. Every homeowner kept their houses in good condition without major renovations such the house is not recognizable. Do you really think that would make a better Vancouver than it is today? Is it really better to live in a 50 years well build and well maintained small house than to live in a well build new and likely larger building using all the advances we had in the last 50 year?”

Overstretched; Living In Debt… And We Haven’t Even Started To Crash Yet.

pricedoutfornow at vancouvercondo.info 26 Feb 2010 9:43 am“I went to an Olympic event yesterday and happened to hear some people behind me talking. They were from Nova Scotia, the person said “We’re never going to do this again, so we’re spending like there’s no tomorrow, really racking up the credit card! But it’s a once in a lifetime opportunity, so why not?”

Vansanity at vancouvercondo.info 26 Feb 2010 10:33 am – “I know tons of people doing exactly that! They’re partying hard and the common theme amongst them is that they’re not going to worry about what their credit card statement looks like until its all over! It should be interesting to see the debt figures come up a few months from now. Also, I know someone who recently bought a home and is now $700k (+) in debt. His family income is somewhere around $100-125k per year. Couple kids, $3,000-$4,000 per month on house costs. Financial stress, mental stress, physical stress… sounds like a great plan. I should mention that they both came close to losing their jobs sometime ago. I’m so happy I’m not living “house poor”. We’re planning our vacations for the year, looking at 4-6 weeks away, Europe, Hawaii and Jamaica, few trips to Vegas in between to maintain the tans. It’s really rough being a renter.”

“We’ve sold our Vancouver condo. We took a bit of a loss, but we’re moving into a rental for the next year or three, saving until we have enough for a mortgage worth no more than 3 times our annual income.”

This from smartalox at greaterfool.ca 26 Feb 2010 at 1:13 am -

“We’ve sold our Vancouver condo, ahead of a big assessment. We took a bit of a loss, but we’re moving into a rental for the next year or three, saving until we have enough for a 20% down, 20 year mortgage, worth no more than 3 times our annual income.”

RE Advertising Saturation – “Where are the ads for all of the other businesses in the area? The only ones that can afford most of the advertising are in the real-estate business.”

RE ad saturation is indicative over overheated markets and bubble tops. This anecdote from Alberta could just as easily describe Vancouver. -vreaa

Here’s popeye the sailor man at vancouvercondo.info 27 Feb 2010 1:33 pm -

“Yesterday I went to the local Safeway in Spruce Grove [Alberta], and as I enter the lobby there are 6 Magazines in the free bins about real estate or home-renos. I grab my cart, and at the front of the cart an Ad for a local realtor, I look at other people’s carts and they all have the same ad from one realtor. I get to the check-out and the lady in front of me passes me a divider and on it is advertising for two new high end housing developments, I get past that and get my slip and in the back I see ads and again 2 of the three ads are for a realtor. On the way home now fully aware of advertising I pass 8 for sale signs and 4 bus benches with real-estate advertising 2 mortgage broker signs (2%VRM) and 5 billboards for new developments. Stopped and got my mail and there was 3 postcards for just listed homes in the area, hanging on my door is the Grove examiner which has 20% news, 40% real-estate, 20% car ads, and 20% other ads. Is it any wonder we are real-estate junkies. Where are the ads for all of the other businesses in the area? The only ones that can afford most of the advertising are in the real-estate business.”