Richmond Owner at VREAA 22 Feb 2011 11:16am – “Just another example of the feeding frenzy here in Richmond – a good friend of mine was willing to accept $950,000 about three months ago for his 45 year old house on a 60 x 120 lot. That deal fell through, luckily for him, as he just sold for 1.4 million. That’s a $450,000 increase in three months. The 21 yr old kid never left his car that was parked in the driveway as the deal was negotiated with help from the realtor. He was on the phone the whole time with his parents in China.”
Congratulations to this seller. By chance, they make an extra $450K, after tax, in three months.
Q: How long does it take someone with the average Richmond income to save $450K after tax?
A: If they are a very prudent saver/investor, perhaps 15-20 years.
At current lower mainland savings rates, which are negative, the average Richmond earner will never save $450K.
Therefore, the draw to RE speculation.
As somebody said in an anecdote not so long ago, “How else can I accumulate wealth?”
Feeding frenzies, by their nature, don’t last long.