pricedoutfornow at vancouvercondo.info January 5th, 2011 at 8:59 am - “I had a friend of a friend tell me that the reason he bought two properties in the last 2 years is because, with a job like his, he has “very limited ways to get rich.” He thinks real estate is the way.
In other news, I just found out my friend’s parents are packing up their house in Alberta and leaving it to the bank. Place has been for sale for more than 6 months with no dibs and they’re basically broke due to family illness. It’s starting…”
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- Advice Regarding Renting In Vancouver, Please – “Unfortunately, the Vancouver rental stock is absolutely atrocious. It just seems like every landlord is looking for someone to pay 100% of their mortgage on a crappy place through rental income.”
- “I just visited Manhattan for a week, and happened to snap some real estate ads on both the Upper West and Upper East sides of the island. Compare to Vancouver. It simply doesn’t compute.”
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- “The mortgage company told me they were calling in my 40-year, 0-down mortgage. I have paid nearly sixty thousand dollars towards it, but, nearly five years in, I have yet to touch the principal.”
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- “My folks find themselves at 65 still owing half the value of their home and recreation property to the bank. After almost 30 years of ownership in the BPOE and a number of boom markets, they have very little to show for it.”
- “Rent for $2,200 a month or buy and have a mortgage of $4,310 per month. Why would anyone buy?”
- “They were talking about two couples they knew who had recently bought a lot and planned to each build a house on it and live as neighbours.”
- Greater Vancouver Home Builders’ Association Annual First-Time Buyer Seminar Attendance Plummets
- Mom and Pop Get It Wrong In All Markets, Time And Again
- The average British Columbian homeowner is not going to pay off their mortgage by the time they retire.
- “He’s sold all his properties except his current one, which is now for sale. He explained that the market’s currently in crash mode, worst that he’s ever seen.”
- “One of my old high school buddies finally got her mother to sell the family home in Kitsilano – sold for over $1M, monies realized after debt paid off $185K.”
- “I know someone who just declared bankruptcy because her condo was assessed at $150k and she bought it presale north of $250k in 2005 or 2006.”
- Sturdy, With Views – “Calling Froogle Scott!… Is Dr. Scott ‘In The House’?” [Not In This One, Certainly]
- “She said the market was dead in Victoria and that it would remain so for a very long time. I asked how she knew. Her answer was fascinating and should scare the pants off the real estate crowd.”
- Kits Notes – “I’m pretty sure that this is the first 3+ bedroom property of any type that I’ve seen in the 5 years I’ve lived here that is priced below $700K.”
- “A beautiful Belfast home, in the equivalent of 1st Shaughnessy, bought at their RE peak in 2007 for £3.5 million, has now sold for £800K, almost 80%-off. The market didn’t suffer any significant economic shocks. Rates & unemployment didn’t skyrocket. They didn’t build more land. Sentiment just changed and the prices fell and fell.”
- “Two family members of hers are trapped, underwater, in condos on the East Side.”
- “Interprovincial migration is not saying good things about BC’s economy.”
- Vancouver RE: Not As Expensive Provided You Don’t Think – “It’s clear that our perception of affordability has been coloured by living on a continent where housing is unusually inexpensive.”
- More Undisclosed RE Industry Insiders Publicized As Clients – “In 1995, Allan and Karin Hoegg were mortgage-free. But no more. Today their Vancouver home is a valuable source of income as they plan for full retirement.”
- Rumor that some OV units will be reduced by 20%.
- Downside Weights On The Vancouver RE Market – “One of the older guys (over 60) mention to the guy beside him that he and his wife were thinking about selling their family home, and renting, in order to get some of the money that was locked up in the house.”
- “My buddy was looking to upgrade to a house in the Coquitlam area. With 200k extra for a home, that’s half of lifetime saving between him and his wife.”
- “I was walking in the Fraser neighborhood yesterday, I noticed that the population, on average, seem to be composed of workers. I belong to the top 5 percent in terms of income. Nevertheless, I cannot afford any of the houses for sale in that neighbourhood.”
- “Vancouver is an urban resort whose value mostly resides in its real estate and not much else.”
- “Rogers Communications is expanding into RE; aiming to relaunch website; providing critical data that can help potential buyers assess the value of a property from the comfort of their home computer.”
- I’m only 50 and I can just about retire if I want to, all because of a single simple decision – “When prices rebounded to their former highs, then rocketed another 30% higher to what I considered to be totally unsustainable levels, I decided that only a fool would pass up a second opportunity to harvest such a massive non-taxable capital gain, and in 2011 I sold my place.”
- The Vacant Lot of Versailles, Richmond.
- “I don’t think that most people think things are going to crash, just that there is going to be a slight correction, but it was amazing to me how sentiment has changed, and the fact Vancouver RE is too high was just understood.”
- “The ‘investor’ who purchased our house put it up for sale two months later, in January 1981, but the bubble had burst.”
- For A City To Have That Kind Of Vacancy, It’s Like Cancer – “Downtown, the vacant unit rate is so high that it’s as though there were 35 towers at 20 storeys apiece – all empty.”
- “What’s the worst that can happen? You can’t pay your mortgage, so sell your house! No fear.”
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The first anecdote is what I hear all the time in Vancouver. People with decent salaries that don’t see any way forward except to gamble on Real Estate. Wage gains have been flat for so long and there are very few real opportunities to get ahead. Real Estate has become that for so many under the current ponzi scheme of lax credit. Historically Real Estate is not a great investment as it barely out paces inflation. However gov’t policies changed that, for a time, and changed our views on it.
Saddens me to think of how this will play out when it all corrects.
In the last 30 years real estate has been a great investment (along with everything else) because interest rates fell an unprecedented 18%. Bonds did very well, stocks bubbled early, real estate bubbled late. We will now get to see what the good investments are when the wind is in the face and not at that back.
Yup, limited ways of getting rich; but lots and lots of ways to lose one’s shirt.
“I just found out my friend’s parents are packing up their house in Alberta and leaving it to the bank…”
But I have been assured by Bulls that (for reasons which are still a bit hazy to me) borrowers in Canada can’t just ‘walk away’ like they can in the States. We’ll find out….
Alberta mortgages are non-recourse.
First mortgages only.
All CMHC insured mortgages in every province, including Alberta, are recourse mortgages. Only non CMHC insured, individual, first mortgages are non-recourse in Alberta. The federal regulation of CMHC overrules provincial legislation.
Many US states are also recourse mortgage jurisdictions.
If you live in Canad you are already richer than most people on the planet.
I charted the % change in Vancouver prices year over year for each month since Dec 2005.
http://worldhousingbubble.blogspot.com/2011/01/seriously-royal-lepage.html
If the current, almost linear, trend continues it will hit 0% year on year March-April 2011 and -5% August-September. I suspect the curve will more closely resemble the last plummet, and that would put it at -10% by September.
nice work.