Disillusion Row, Numbers 1-12

All of the following  anecdotes are from a single recent thread at vancouvercondo.info. They are archived here as a record of some of the sentiment being expressed at this juncture. Our housing bubble is at the very least profoundly distracting. Worse, it is scaring away human capital and putting our local economy at risk of implosion. -vreaa

1. JordanClark January 24th, 2011 at 3:56 am-
“This market is insane, the longer it goes on the worse off everyone here will be in the long run. The prices just flat out don’t make sense, there is no justification and people need to realize huge debt comes with real risks. People who got in at the right time might be better off but they do so to the detriment of the younger generations, who will be relied on to pick up the economic torch some day. What will happen when they aren’t there or still up to their eye balls in debt? We’ve been waiting for years and have pretty much given up on greater Vancouver. The market here will collapse some day, but that whole process will probably take many more years, people here are extremely stubborn about the eternal value of real estate and will take nothing before reducing prices. My kids start school this year, we need to be in a home with a yard, and stability. The condo life sucks. Luckily I’m a dual citizen so I’m in the process of sponsoring my wife and moving down to Washington State. I wish this was an easier option for more Canadians/Vancouverites because I think it would offer great relief to so many other families. We’ll buy a nice 3-4 year old house, 4-5 bedrooms, 2500+ sqft, nice 8000+ sqft yard, on a nice cul-de-sac within a few blocks of school for maybe $300k. From saving all these years we can put 50-75% down, pay it off in 10-15 years while still making significant retirement contributions. I’ll be able to retire in my 40s. Adios Vancouver.”

2. Vancouverite January 24th, 2011 at 7:03 am-
“Count me among those who have had enough. I was born and raised in Vancouver. I am at the very top of my very high earning profession here, like my husband. We own a SFH on the west side (it is respectable by Vancouver standards but pretty modest by the standards of any other city) and we are almost mortgage-free. While we would like to buy a bigger house since our kids are getting older, we won’t. This bubble is certain to burst sooner or later and we work way too hard to throw our money away competing with buyers who are up to their ears in temporarily cheap debt. We know how long it takes to save $100K. Although our extended families are here, we are actually giving serious thought to moving elsewhere in Canada or even to another country. We could sell our house today and buy a nicer house in a nicer neighborhood mortgage-free, with lots of cash left over for savings. There would be some initial sacrifice professionally, but we’d probably earn more in the long run. Even if we didn’t, we don’t really care if it means a better life for our kids. Which brings me to my biggest concern, Vancouver’s future. There is almost no significant business left here that is not connected to real estate in some way. Why would you bother trying to make a better widget when you could make more money more easily by developing, constructing, or marketing $1m townhouses? Even if you wanted to make a better widget, why would you do it in Vancouver, where it is difficult to attract professional talent because of the exorbitant cost of living? When this real estate bubble collapses, and it will, I think it is going to be disastrous for this city, which has put all its eggs and then some into one basket, and for its people, many of whom depend upon rising home equity for their spending and have forgotten what actual work and business looks like. I think I might like my family to be somewhere else.”

3. LY January 24th, 2011 at 7:12 am -
“I rented for 5 years in Richmond waiting for house prices to correct. Everytime its about to go down, the gov’t will intervene. As long as mortgage terms in Canada are lax and rich immigrant’s money continue to flow in, I don’t see any sizable correction in housing prices especially in bubbly vancouver. I gave up on Vancouver, move to Toronto and bought a house. Adios Vancouver too.”

4. pricedoutfornow January 24th, 2011 at 9:04 am -
“How has RE affected me? Well, for one, I have a whole pile of cash that could potentially be used for a healthy downpayment, if prices were what they were in 2001. If I were to drop that on a downpayment today, it wouldn’t get me very far. Plus the cost of carrying the mortgage would make my living costs go up by over $1000 a month (more when interest rates rise!). For another thing, every family gathering with my SO ends with questions from the inlaws as to why I haven’t bought yet, why am I throwing money away on rent. No matter how often I explain I’m actually SAVING money, they just harp on about how “Real estate always goes up.” Talk about zombies. I do wish I had a dog though, which would be a million times easier if I had a house with a yard. I can’t wait for this bubble to pop.”

5. Vansanity January 24th, 2011 at 9:09 am-
“My inlaws saw that piece on CBC and they called up in a panic, “oh my God prices are going up again, what are you waiting for?” I told them, hey, if you want to buy us a place for $1M I won’t stop you. In other words, put your money where your mouth is, cuz I have, that’s why it’s in the bank.
My wife and I ideally would like to have a place in East Van or Burnaby but we refuse to live “house poor” as some of our friends and family do. I haven’t convinced my wife to move away, but the longer this goes we might eventually take off and move to sunnier pastures. You know the saying the grass is always greener, well when it comes to real estate and money and Vancouver to the rest of the world, it might be true.”

6. VancouverFiveOh January 24th, 2011 at 11:32 am-
“I have been bearish since 2006. I’m a logic and math type and that has served me well in my profession but perhaps not so much when it comes to housing. I could have flipped a bunch of west side homes by now, right?
Count me among those who are seriously considering leaving Vancouver. I was born and raised here but am tired of this city and it’s “best place on earth” attitude. I’m also tired of the rain. Today sucks.”

7. Dan in Calgary January 24th, 2011 at 11:45 am-
“I was born in Vancouver, left and moved back in 1975. I spent more than 30 years of my adult life in Vancouver, leaving for Calgary in 2007. Vancouver’s rain was an irritation to be tolerated as long as the city had charm, class and a friendly, laid-back kind of atmosphere, with a small enough population that one could actually enjoy what Vancouver offers. But that all changed, particularly beginning when the Olympic hype started. Then the rain became intolerable. Today Vancouver is mere hype.”

8. /dev/null January 24th, 2011 at 11:56 am-
[In response to “Let’s poll how many would have said: I wish I bought a property a few years ago.“]
“I almost did but I’m glad I waited. Instead we both moved to part-time work – me to finish my degree and my wife to spend more time with our kids. With a mortgage we couldn’t/wouldn’t have done that. Now we can actually afford a house instead of that condo we were looking at, despite the run-up in prices. So we chose to invest in increasing my employment income (and raising our kids) versus real estate. So far I’m happy with the decision. Don’t assume that bears are just sitting around with their life on hold because they haven’t yet purchased a home.”

9. exWestEnder January 24th, 2011 at 1:46 pm-
“We moved to Paris (France) to see if it could possibly hold a candle to The Best Place on Earth. My partner got a transfer to the Paris office in Sept 2008. We moved in November, and man, we were we ever grateful that, as renters, we did NOT have to sell in that particular RE market. So now we’re enjoying all those French clichés: 7 weeks vacation, job security, cheap wine, amazing food, and a city where Lotsa Stuff Happens. … If our wanderlust fizzles and the Van property market ever returns to earth, we can come back knowing we already have a generous down payment….if we want to buy. On the other hand, when I remember the rain I might opt for putting it towards a farmhouse in the south of France instead….”

10. Patiently Waiting January 24th, 2011 at 1:59 pm-
“I have almost a million reasons to cheer for high real estate prices. They are the dollars my parents house is “worth”. I will inherit the house which my parents own outright. But I remain a bear because I hate what’s happening to this city culturally, feel sad for families who are struggling because of this, regret what this is doing to the economy (and my chances of getting decent work), want to see every real estate agent and mortgage broker humbled in a serious way, and logically know this can’t go on.”

11. painted turtle January 24th, 2011 at 3:05 pm-
“The real estate mania had a great positive influence on our lives. When we moved to Vancouver in 2005, as a 35 year old professional couple with 2 kids, we did not question our future: 1) Find good/secure jobs 2)Buy a house with a yard and be in debt for ever. This was supposed to be the way to happiness. Well… by the time we both had a full time job, house prices were too high. So we looked for a great rental solution (took some time). Now the kids are old enough they do not really need a yard anymore. We realized that since we are renting, we are making more money than needed. We could both put a break on our workloads and spend more time on hobbies we first thought would have to wait for retirement age. We can take care of our health, spend time with our teenage kids, take extended vacations, live a slow life. We also save money, and can look for ethical investments rather than being obsessed with ROI. We are now exploring exciting career moves/education we could have never thought of before. Somehow, it feels like being in my mid 20′s. By the time house prices will go down, our kids will be grown up, and the need for a house will have vanished. Anyway, mobility/freedom is our lifestyle, and I am happy we did not give up on that. So I would like to thank everybody who bought a house in the last six years for preventing us from entering a system we do not believe in, especially since we were about to be lured into making a wrong step. People who confuse wealth for happiness might no understand us, but fortunately, not everybody must have the same philosophy of life.”

12. YLTNboomerang January 24th, 2011 at 6:57 pm-
“I’m born and raised Vancouver and have had the opportunity to live for a few years in Germany/Belgium/Switzerland/US. I’ve been back for about 6 years now and have been a renter since selling in 2007. Does the irrationality make me want to give up and buy? NO WAY! I learned my lesson once already during the dot.com boom when I thought “maybe things are different now and the old style valuations no longer hold?”. Well, the result of that thinking lost me a fair amount on the market. I see the market today (more than ever) as a bubble and thus will never buy here until things come back in line with fundamentals. We’re happy renting and likely will do so when we move to Calgary in two years due to a planned advancement. I’ll keep an eye on Vancouver real estate and who knows, I could maybe even buy a place for retirement in the future if prices normalize.”


…and one bystander:

1. Best place on meth January 24th, 2011 at 11:06 am-
“I have no intention of ever buying real estate in Vancouver. I am however enjoying watching this one-industry city commit greed induced suicide. This Ponzi scheme is mere entertainment from my viewpoint.”

20 responses to “Disillusion Row, Numbers 1-12

  1. The worst is yet to come. Many boomers are going to be bust. 43 million Yanks spend their foodstamps on food.
    The Egypt situation will send energy prices to the moon.
    Have fun with 2 buck a litre gas, and that drive to the piece of crap on that lake. Interior waterfront is down 55 points and falling fast, and as far as Vancouver goes – it is a craphole filling up with Russian mobsters, and creeps from every corner of the planet. I hate the city with a passion, and so we sold and moved. I will never come back. The biggest pack of greedy losers on the planet. Vancouver used to be ok, even with the cretinous drivers, drugged out ghosts going through our trash, the endless property crime, and the corrupt boneheads in City Hall. Let me resort to Bill Shakespeare – Fie on thou stinking pile of crap, and you greedy cretins are about to reap the whirlwind of your own boneheaded avarice. Couldn’t happen to a nicer group.

    • Good for you Ralph. Let us know which Pleasantville you have decided to relocate to. There may be others like you to follow.

  2. My brother in law called me a few months ago and said that his cousin had gotten a job offer in Vancouver for 65K a year and wanted to know from me if that was enough to have a good life in Vancouver, I had to tell him no it would only be enough to rent a place and pay for food without much being left over for savings. He did not take the job, decided to stay in Montreal.

  3. “I have no intention of ever buying real estate in Vancouver. I am however enjoying watching this one-industry city commit greed induced suicide. This Ponzi scheme is mere entertainment from my viewpoint.”

    Amen.

    On a funny sidenote. My rental company is Hollyburn, today when I got back from a little stroll after work I found an OpEd piece stuck to my door, I guess distributed by the manger, from the Vancouver Sun from last Friday saying “Market should control rents” You can find that one here:

    http://www.vancouversun.com/Market+should+control+rents/4182729/story.html

    The Background seems to be this piece:

    http://www.vancouversun.com/business/Tenants+cash+judgment+against+apartment+owner/4154429/story.html

    My favourite from the hit piece is this:

    Hollyburn Properties wants to upgrade its building with balcony improvements, new elevators, new intercoms, new plumbing and new fire safety systems. They attempted to work with the tenants to accomplish this, offering them various options, which are not required by law, such as professional moving services and moving back into their units after the renovation, at a discount off the market rent. The landlord should be commended, not criticized for: Spending millions of dollars to upgrade an aging building (that has reached the end of its life) for the benefit of its tenants, whilst not evicting any; and consulting and informing them of its planned major capital upgrades.

    This is hilarious on a few levels.

    Firstly, why is Hollyburn buying buildings that (according to this hit man) are about to fall down, then complain about the money they need to invest to keep them going?

    I think the reason why this idea about the removal of rent control is floated now is because they DO know that there will be a lot of more renters out there soon and they want to be able to get as much cash as they can before it’s too late.

    More interesting to me though is that it seems for the second year in a row I am not getting a rent increase, so how hard pressed can Hollyburn really be? Or do they know what’s coming and don’t want to piss off good tenants?

    • You shouldn’t be looking forward to renting during rising inflation and supply shortages.

      • You shouldn’t be looking forward to renting during rising inflation and supply shortages.

        What supply shortage?

        If the market collapses it will initially hit condos in all likelyhood as there are many more than SFH.

        So what will happen?

        1. People will start renting out “investment units” because they can’t sell them.
        2. Properties that go into foreclosure will most likely end up being bought for cheap and then rented out by those with cash.
        3. Rent prices will get depressed.

        We are very VERY far from any inflation, there is so much gunk in the system right now it’ll take a decade or longer to get flushed out.

        By the time the rent to buy ratio is tilting again in the direction of buying I may consider it, but as I said, that’ll be a decade or so out and in all likelihood if I buy something it’ll be a plot of land somewhere and I build my own anyway.

    • Pretty sure the situation in Egypt is due to inflation. I don’t think it will be too long before it hits our shores.

      Couldn’t find any quick stats but “when inflation accelerated in the late 70s multifamily rent levels increased materially in many markets throughout the U.S.

      No free rides for anyone over the next few years.

      • No free rides for anyone over the next few years.

        Of course not. But some will hurt a lot more than others. I doubt the renters will be the one rolling around on the floor of the place they cannot leave in painful agony.

  4. for those who want to leave Vancouver, bye bye. you make more space for those who want to live here!

    • Enjoy. I suggest an AK and canned food, because you are going to need it when the dumbbells in fart city wake up to the fact they are done. Meth heads and desperate boneheads make great neighbors. Oh, but what the heck, fire up the bong in your smelly basement suite in East Van and enjoy. Vancouver sucks – and you probably are upset you were stoopid enough to buy the con – rube.

  5. 4SlicesofCheese

    My mailbox is filled to the brim with Real Estate Agent flyers, fast food coupons, Canadian Tire/Home Depot/Rona flyers, and all those package window/furnace/roof/deck/gutter ads.
    Off to the recycle bin!

    • I noticed a markable uptick in advertising emails over the last two months as well, mostly from companies I have done business in the past with. Sure, I can see why Spamazon keeps sending me reminder to give them more money, but now I have pretty much everybody I ever dealt with send me that stuff.

      I smell some desperation because every single one of these emails tells me how much I can save off of “regular price”.

    • Picked up a hot “100 chainwide” special at one of the smaller chain electronics dealers a couple of months ago… Only the second time I’ve ever set foot in the place, so I’m hardly their best customer.
      Yesterday I got a handwritten “Merry Christmas” card in an envelope postmarked in late January, and in the card was a “get $25/$50 off if you spend $200/$400″ coupon. The expiry date on one side of the coupon was blacked out with a felt marker, but on the other side, was dated October 2009.
      Spells DESPERATION to me.

  6. I pay $12,000 a year on rent. It’s easy and cheap to live in Vancouver. Activities everyday… love it.

  7. The thing that amazes me most about Vancouver is indeed how much it has become a one-industry town. It is scary that Canada’s third-largest city has so many of its economic eggs in one basket.

    • It goes beyond Vancouver. It’s essentially the entire Province.

      You have the harbor and real estate in Vancouver. You have the little bit that’s left of the Forest Industry in the interior and a wee bit of mining in the north.

      The rest of the “value” is derived from Real Estate.

      A Province where 12.5% of the GDP are produced by “financial services to people who buy homes to live in” is not a very healthy Province.

      • I don’t doubt it. I am in Ontario and so looking at the whole thing from afar. Quite honestly, it seems that outside of BC, the only contexts in which Vancouver is mentioned relates to the Olympics, gang crime, and real estate.

      • I don’t doubt it. I am in Ontario and so looking at the whole thing from afar. Quite honestly, it seems that outside of BC, the only contexts in which Vancouver is mentioned relates to the Olympics, gang crime, and real estate.

        Don’t tell that to Vancouverites. We’re apparently THE place in the Universe to buy Real Estate.

  8. Many middle class people are leaving – no jobs!! , lower wages comparable to other provinces. Taxes!! too many!! How can you live here if you have trained, gone to university here(UBC) and can’t get a job?? I moved to Calgary and both my wife and I make way more than the same job in Vancouver and live in a nice house, 10 minutes from d/t. Little traffic problems, low taxes(no PST/HST). We were picky, I admit, probably could have stayed in Vancouver, but would have had to move to the burbs’ for affordability. Quality of life is better for my family in Alberta right now. May consider moving back if things settle down(prices come down, and they start reducing crime, taxes etc)

  9. Hey Calguy; your story is my story too. Now that I’ve found good sushi, Thai, and oustanding dim sum, I’m happy here. With all the extra money I have from living here, I can jet to Vancouver whenever I pine for the fiords.

    And remember, Vancouver’s ‘interior’ is our interior too. Wine anyone?

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