V861636; 4085 West 36th Ave, Dunbar
4,886 sqft house on 52 x 134 ft lot
Asking price $4,599,000
[HST, after rebate, is additional $525,000, for a total price of $5,125,000 -ed.]
New; Listed 24 Dec 2010
Realtor: “Your most discerning buyer will not be disappointed.”
[We archive the occasional house such as this one because we suspect that these examples will make interesting data points in our chronology, when viewed in years hence. -vreaa]
Vancouver Real Estate Anecdote Archive 
Please buy this house…. the listing agent really, really, needs this sold…. might be his first and last sale of the “new year”
Don’t lose faith…. I hear there are planes full of rich Asians landing here everyday with bags of cash….
Just one Gulfstream at a time, KC. But the bags are LuisVuitton… 😉
[ChinaDaily] – 580 economic fugitives still at large overseas
http://tinyurl.com/35lhl9b
“You know, George, I feel that in a small way we are doing something important. Satisfying a fundamental urge to blow $5 million on small west side home. It’s deep in the race for a man to want his own massively overpriced roof and walls and fireplace.”
– I wonder if the realtor will throw in a bag of tulip bulbs?
This is called Insane GREED! Greed is consuming the west coast…isn’t there some Chinese belief that there needs to be balance and if not then there will be a huge shift in the opposite direction. I can see a huge earth quake hitting yvr to shift things back to a more balanced lifestyle. And a crash in prices at the same time. Message: to the fools still paying this insane amount…I hope you lose every last bit of money you have in the coming correction. You deserve it!
The crazy thing is that it might sell at that price!
We have become nuts.
I am speechless!
@Cpatain Jack
“Message: to the fools still paying this insane amount…I hope you lose every last bit of money you have in the coming correction. You deserve it!”
We, the canadian taxpayer will pay for this foolishness as our goverments will start monetizing slowly all the obligations of CHMC in the near future, resulting in a bigger and bigger inflation for evth we and our kids buy.
We are already paying for it, with interest rates at 1% anf inflation running at 2%.
Yeah, the whole CHMC thing is bugging the heck out of me, where will they find the money to back up all the mortgages they have signed?
Either they start printing money, which means I’ll get hit by inflation or they raise taxes where it’ll hit me in my pocket book.
Idiotic, and yet, we still have people thinking it’s all fine. Wish I could be that delusional.
I share your concerns.
The bulleted list of features on the RealtyLink listing doesn’t mention anything about the actual house until the sixth bullet point: “Wet Bar.” That’s good. You’re probably going to want a stiff drink once you realize how badly you’ve been hosed.
The same bullet list then goes on to list “Smoke Detectors” well before “Appliances.” Reassuring to know they’ve tossed in a few crappy Kidde smoke detectors before the Sub-Zero/Wolf dream kitchen. They’re probably the ones that issue a voice alert if your place is burning down. “Run! You’ve been hosed!”
Readers should visit the realtor’s web site (carolinehong dot com). She’s selling another house, built by the same developer, next door. This house is also described as having a “level of construction . . . rarely seen.” If it’s so rare, why does the house next door have an identical level of construction? And if there are “Simply too many features to list,” why in god’s name would you then list a $40 smoke detector? Or on your own web site, a “Garage Door Opener”?
Of greatest concern, however, is the square footage of the house next door. The realtor tell us that “your most discerning buyer will not be disappointed.” Alas, I fear the discerning buyer will be disappointed when he or she discovers that the square footage of this $4.6M “Dunbar Address,” according to the listing, is precisely 4 (four). When it comes to cost per square foot, that must be a new record.
I don’t think it’s an ugly house but I wouldn’t want to pay anything over 2.5 in that neighbourhood.
A Toronto comparison:
http://www.torontolife.com/daily/informer/gimme-shelter/2010/12/22/house-of-the-week-3-9-million-for-a-stone-jewel-perched-on-the-scarborough-bluffs/
A good and wise friend of ours from Ireland, who has had the opportunity to watch the Irish RE implosion from the comfort of his very comfortable rented house, wrote an e-mail in response to the above post:
“Hectic prices. Even if they dropped 90% I would still think that they are too expensive.”
—
These are the kinds of houses and prices that allow one to see how the scenario sketched out recently by uber-deflationist Nicole Foss could just come to pass. Imagine a situation where cash was scarce, credit was much harder to come by, buyers had evaporated, China was in recession, and a house like this was a forced sale. Yes, I could imagine it selling for less than $1M. Perhaps even $500K as our friend implies.
Our estimation is that houses like this will probably sell for around $1.5M in coming years. That’s 66% off.
The reason Bernake et. al. were so gung ho about the whole thing was exactly the fear of deflation. The downward pressure will be much higher than the upward one and finding solid footing will take a long long time.
My original prediction was ten years of decline, ten years of nothing, then a slow clim back.
So I put initial recovery out to ~2030.
After looking at some numbers lately though and rethinking it, I think we can scratch the 10 years of nothing and replace it with 10 years of decline, followed by 10 years of nothing before we see any kind of recovery. That would put it roughly into 2040.
Interestingly enough, that would put me right into retirement the moment things will be picking up again, but we will have lost two generations basically.
*looks at Japan*
Oh yes, that’s quite possible. 15+ years and counting.
I guess wealthy neighbourhoods are wealthy because they’re wealthy.
Yes.
Foreign buyers are attracted to the westside simply because it is expensive. (And thus appears to have cachet and appears to be a ‘store of value’).
The high end will plunge as much as anywhere else when this bursts, perhaps more.
heh so somebody gets $5.6MM and somebody gets this house. Actually I just looked up the location to be sure and, yep, it’s about 8 blocks from guess-what-school.
Here’s another Toronto comparison:
http://www.torontolife.com/daily/informer/gimme-shelter/2010/04/02/house-of-the-week-4-5-million-for-this-butterfly-shaped-mansion-on-thornhills-bridle-path/
Does it have 2 basement suites?
Jarred says $2.5 million?
In a non-bubble, that house won’t fetch $550,000.
This listing (V861636) and the paired listing next door (V861566; pdf here) appear to be an example of greed and/or ineptitude regarding pricing. I’ve done some quick number crunching on the 11 other high-end houses currently for sale in Dunbar that could be considered comparables.
Average price: $3.1M
Average square footage: 3964
Average price per square foot: $787
Average lot size: 6875
The price per square foot is the key point of divergence. The two houses in question are priced at a little over $940/square foot. Why are these two houses worth an additional $153/square foot, or almost 20% more than the average for the comparables? Lot sizes are pretty much the same for the two houses and the comparables (50+ foot frontages), and all appear to be on quiet residential streets in Dunbar. So the amount of land, the amount of buildable square footage, and the general type of location in this specific neighbourhood would all appear to be pretty much the same. Among the comparables, three houses are new or a year old, and four others are less that 10 years old. So why that 20% premium on top of already astronomical prices? At almost 5000 square feet each, the two houses are about 25% larger than the comparator average, but I don’t think bigger typically equates to a higher price per square foot. If anything, the reverse is often true.
It feels like the developer and realtor are fishing, or trying to hype their way to an even fatter profit than the houses would normally yield. Who knows, it might work. It will be interesting to see if these houses move quickly, or if pricing is adjusted downward.
Crikey.
And now from the lives affected at the opposite end of the bubble:
I visited a friend for some drinks recently. Thought long and hard about bringing up real estate… then thought I owed it to them to at least mention what several economists and respected experts have been saying lately that may impact their lives. They sold a nice SFH back East and bought a “poky, tiny – in their words” condo here 3 years ago, with downpayment help from family; despite household income above average. So I asked if they had been following the Van real estate market recently.
“Why?”
“Because some have been saying that there may be a little bit of a correction coming.”
(I deliberately understate here… being cautious not to spoil the mood)
“That’s what we’re scared of. We’re worried that we’re going to get stuck here, with the value being less than what we owe on it. We’re pretty worried. Now we’re thinking that if we can escape with reaking even, we’ll be okay. We’ll be ok with that”
“So have you thought about putting it up for sale?”
“Not now. Not right now. We’ll wait till next summer.”
“I can point you in the direction of some websites where people post analyses and economic indicators and stuff to help you with your decisions. If you like.”
“We’ll work it out, It’s okay.”
He then quickly changes the subject. He’s obviously very worried, with a growing family, about becoming trapped by negative equity – it was clearly not their choice for a multi-decade domicile. I avoid the subject completely from now on. It’s not my business and I don’t want to say whose predictions are correct. But I would try selling now, knowing what I know.
Hehe. I’m just glad I didn’t run into him the day after discovering the bubble. That day I learned to be sensitive around owners when mentioning the market – in fact I have avoided mentioning it to owners since (except to my friend as I sincerely wanted to help him be as informed as possible). That day I happened to meet my financial planner. I asked him what he thought the RE market was going to do next year. “Yes, there will be a correction of around 20%” was his reply. Really? I then proceeded to tell him that the price:income ratio was almost the highest on the planet, and that many people expected serious collapse of 40% or more, US style.
He looked as though he had just swallowed a roasted bee. His expression remains indelibly printed on my retinas. I still chuckle when I remember it.
I try to dig my way out of trouble, somewhat clumsily: “I suppose I’d better shut up – I don’t know if you bought in the past few years or not” I blurt out with an embarrased expression.
“I bought two years ago, but I sold another house that I had before that… so it’s not too bad” he said, recovering slightly, but the bee shock look remained – similar to the look a friend of mine had when he genuinely bit into a Mars bar and his teeth met something the texture and appearance of burnt cockroach.
Vancouver prices are mainly driven by lot value, a 50′ wide lot with no view is, at most, in this bubble, 2M (more like 1.7) (I live in Pt Grey and keep track of prices). I don’t know the building price but at $400/ft sq which is on the high side, a house would cost 4000×400=1.6 M. So about 2+1.6=3.6M would be the price that I would pay if I was from China and wanted a good school nearby.
VREAA how about headlining the following question, I am wondering what kind of comments we will get.
1) Where do you rent, how many bedroom and how much do you pay?
Mount Pleasant, 2 Bedroom Condo, hardwood floor, in suite brad new washer, dryer, fridge, stove, and dishwasher. $1570 per month not including utilities.
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Village Whisperer.
I can’t see that house being worth less than 2M on the West Side. I currently live on Dunbar. Bought a house back in 2000 for $750K that is bigger than that home. I do see a massive drop in prices on the West Side but it will always be “Crème de la crème” and will always command a premium.
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