pricedoutfornow at vancouvercondo.info May 22nd, 2011 at 7:27 pm -
“Went to a family wedding this weekend. American relatives were attending, and as usual as per social conversations in Vancouver, the topic quickly became real estate. The Vancouverites were jumping up and down, telling my American relatives that “Vancouver is different, it won’t crash here, we have Chinese investors, we have mountains.” Despite the American relatives pointing out the ridiculousness of these arguments, there was no convincing the Vancouverites that it’s a bubble, and it will crash here too, just like it has in their home country. Finally, the Americans realized there was no convincing these delusional, irrational people, finally one just turned away, and remarked under his breath “Well, sure sounds like a bubble to me.”
I think the Americans would know, they’ve seen this hype before (and are now buying properties in Florida for half price). They just shake their heads sadly and sigh “Poor Canadians, they will learn.”
Most Recent Comments:
- china il on British Columbians Selling & Moving To The US – “It was just too good of an opportunity to turn down.”
- tfcu oklahoma on British Columbians Selling & Moving To The US – “It was just too good of an opportunity to turn down.”
- Real Estate Tsunami on Chat Thread
- 604x on Chat Thread
- Monserrate on David Dodge – “Look mister borrower, you’ve gotta have an equity stake in this as well… so that if things go really bad, it’s not all on the Canadian taxpayer, part of it is on you.”
- 604x on Chat Thread
- 604x on Chat Thread
- Nemesis on Chat Thread
- neonatal nurse Jobs on ‘Giant Bubble Bursts Into The Record Books – “Screams of excitement followed gasps of astonishment as a giant bubble rose up and surrounded the participants before bursting in spectacular fashion.”
- What And When To Purchase Langley Real Estate Langley Real Estate Agents Can Be Busy Because Of The Completely New Building Around The City! | Bookworm Room on Author Of ‘Real Estate Investing for Canadians for Dummies’ “jumped into the market 3 years ago with a 2 BR apartment in Mount Pleasant”; Reports Ownership Cheaper Than Renting; Leaves Out Math
- rod_jonsson on Chat Thread
- Annie on British Columbians Selling & Moving To The US – “It was just too good of an opportunity to turn down.”
Type of Anecdote
- 01. He Said, She Said (247)
- 02. Profiting from the Boom (441)
- 03. Changed my Life (103)
- 04. Changed my Career (38)
- 05. Where do Buyers get the money? (958)
- 06. Held my Nose and Leapt (96)
- 07. Avoiding Vancouver (375)
- 08. Overextended Buyers (1182)
- 09. Delaying Buying (315)
- 10. Demoralized Renters? (362)
- 11. Regrets about Investing in RE (417)
- 12. Effects of Development (274)
- 13. 2010 Olympics Related (74)
- 14. Social Effects of the Boom (1255)
- 15. Misallocation of Resources (958)
- 16. Missed The Boat? (236)
- 17. The Froogle Scott Chronicles (27)
- 18. Spot The Speculator (171)
- 19. BlastRadiusPostCards (17)
- 20. The Limitless Demand Argument For Ongoing Market Strength (70)
- 21. Vancouver RE-Verse [Found Poems] (8)
- 22. RE References In Popular Culture (41)
- 23. Jumping The Shark (1)
- 24. Policies On Housing (10)
- 25. Epigrams For The Bubble (1)
- 26. Premature Calls Of "Bottom" (3)
- 27. Seller Panic (3)
- 28. Erroneous Causation Theories For Falling Prices (7)
- 29. Bubblespeak (1)
- Uncategorized (176)
Blogroll
- 01 Vancouver Condo Info
- 02 AmericaCanada [retired, no archive]
- 03 Housing Analysis
- 04 RealEstateTalks BC
- 05 Vancouver RE and then some
- 06 Whispers from the Village on the Edge of the Rainforest
- 07 Greater Fool
- 08 Canada Bubble
- 09 Rob Chipman's blog
- 10 YatterMatters
- 11 condohype [retired; archives available]
- 12 vancouver (un)real estate
- 13 Agent Will's Stats [retired]
- 14 Landlord Rescue
- 15 The Economic Analyst
- 16 Canadian Housing Price Charts
- 17 Hoodsurf [retired Jun 2011]
- 18 World Housing Bubble
- 19 Vancouver Price Drop
- 20 North American Economics
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Latest Anecdotes:
- Chat Thread
- Taking A Break
- “My best guess: this property is now an ‘investment hold’ and will be built ‘when prices recover’. Good luck on that!”
- Man Loses $745,000 Vancouver Condo Deposit
- Graphic – Degrees of Housing Overvaluation in Canada
- The Rare Individual With A Negative Ownership Premium
- 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.”
- Ben Rabidoux In Vancouver Next Week
- “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.”
- ‘Vancouver City Hall: Housing Report Card 2012′; Plus Revised Version
- “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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- Chat Thread wp.me/pcq1o-5vD 3 weeks ago
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Really enjoy reading all your anecdotes. Keep up the good work.
Looking forward to reading the sighs of disbelief in HooCoodaNode.
Taipan -> Thanks mate.
I think there’s more than a bit of jingoist arrogance that the Evil Empire got what was coming to it.
jesse -> That’s a complex statement: please parse.
I’m always weary about Canadians claiming that American comments about a housing bubble are irrelevant because of not only immigration and mountains, but also a sound banking system and more prudent debt management. It seems odd that those from a country that has first-hand experience with housing bubbles are shirked aside so easily. Maybe it’s just a case of hubris but my guess a little bit of “we’re better than you because you’re American and we’re not” was involved, and was just not said to keep things cordial.
perhaps we should have hit these American relatives with some hard numbers: immigration, wealthy investors, land use, etc. Anyone comparing any US city to Vancouver is simply revealing their ignorance.
lol we are so different here
vreaa, the Seattle CSI/HPI chart, please???
[see here -ed.] :
rusty i want to meet you and shake your hand – you’re a living, breathing anachronism.
“Anyone comparing any US city to Vancouver is simply revealing their ignorance.”
Ha ha ha ha. Why? Because it is an “international” city. Ever been to New York, LA, Honolulu, Miami? A dozen others?
There are multiple states in the US with larger GDPs than all of Canada. Hell, NYC or LA probably have larger GDPs than Canada. There should be 50 US cities with higher property values than Vancouver based on economic activity alone.
Seattle and Portland exhibited the same hubris vis-à-vis the rest of the US in 2006… Despite having a vibrant corporate culture, they still went down 30% from peak. They bleated… “We won’t go down… we’re special, we’re different, blah, blah…”
What do Seattle and Portland have going for them compared to Vancouver? Real head office jobs such as Expedia, Microsoft, Boeing (kind of), Nike, Starbucks, Weyerhaeuser and Costco, which can sustainably support real estate valuations. What corporate champions do we have here? Ballard and some guys who dig stuff out of the ground.
We have no “wealthy investors” here, just speculation and easy money.
typical arrogant american comments. they cant even look after themselves. they are ruined by their own greeds.
Look up ‘hubris’.
yes, because chinese triumphalism is not arrogance.
“Anyone comparing any US city to Vancouver is simply revealing their ignorance.”
Because you understand Detroit is just like all other US cities? Not saying that Vancouver isn’t groovy – I love the Pacific Northwest. But comparing Detroit to Vancouver is like comparing Seattle to Windsor.
Why don’t you tell us what exactly is so horrible about Seattle, Portland, or Eugene, OR? Have you ever seen those cities?
If Vancouver is your homeland, it makes sense why you don’t want to leave. But it’s crazy to assume that EVERY other place in North America sucks.
Portland and Seattle are wonderful cities, but they are not representative of US as a whole; they’re exceptions. Try travelling east and south, visit the “industrial heartland” All you need to do is look at the demographics of each state to know where the poverty and suffering are – the more hispanic and black the greater the suffering. Using Seattle and Portland as examples of how prosperous the US is reminds me of how Vancouver renters used charts of Las Vegas, Phoenix and Miami as a benchmark of US housing health.
You folks need to get out more and see the world – and when you’re out it might help to open your eyes.
“You folks need to get out more and see the world…”
Ah, the irony.
“Using Seattle and Portland as examples of how prosperous the US is reminds me of how Vancouver renters used charts of Las Vegas, Phoenix and Miami as a benchmark of US housing health.”
Rusty,
Seattle and Portland are just as “American” as Detroit. That’s kind of a wack way of seeing the U.S.
I don’t get your prosperity argument. You may not understand that the GDP of California (even now, with it a budget mess) is about the same as all of Canada. Same with the GDPs of NY and Texas – I’m not saying you want to live in those states, but I don’t get your prosperity argument.
“You folks need to get out more and see the world – and when you’re out it might help to open your eyes.”
yeah – you should check your assumptions at the door. I live in Canada now, but I’ve lived in the southeast, midwest, and the pacific northwest. I love Richmond, VA; Chicago, IL; Madison, WI; Seattle; Portland; Charlotte & Chapel Hill, NC; and Sante Fe, NM.
And I’d pay a lot for some good corn tortillas – I can’t find a quality tortilla anywhere in this city.
try the “red burrito” chain
real authentic mexican food
100% chinese owned
Rusty, it’s obvious that you have barely traveled anywhere. US and some Central American or Carribean resorts do not count.
“the more hispanic and black the greater the suffering.”
i’m just going to put this right here….
“Using Seattle and Portland as examples of how prosperous the US is reminds me of how Vancouver renters used charts of Las Vegas, Phoenix and Miami as a benchmark of US housing health.”
i can’t even describe how retarded this is. it’s beyond words to describe.
rusty i really want to meet you.
you wish you had my passport/visa stamps snats lol
Not really, Rusty. I’m quite happy with my life, family, job and home, all in a place that isn’t Vancouver BC. That’s my point: Get over yourself.
You (different/better/smarter) Canucks are doing the exact same things that we (ignorant/greedy/uncultured) Yanks demonstrated you shouldn’t do, literally less than five years ago. Doesn’t sound very smart to me.
The only reason I come to this blog is to watch the slow-motion trainwreck. I know that isn’t virtuous of me, but I can’t peel my eyes away.
Spot on…That’s just about the only reason I’m still here…
i really don’t think rusty is ‘one of us’ in the traditional sense that canadians are like herding cats – these are a different breed, man.
dangerously innocent..
First time posting – long time US lurker here. Forgive my ignorance, but when I read about the Chinese investors, what is to stop them from dumping their investment (outside of the obvious loss of down payment and poor credit rating)? My main concern if I was a “local” owner or investor would be how these apparently large hordes of non-attached “0wners” will react at the first sign of trouble…I’m guessing it would be a large sell-off, and, when values decline from slashed prices, simply walking away (which is what happened a lot in Vegas, FL, etc.). The difference being (I guess) that I’m guessing someone from China doesn’t really care what their credit rating is in another country. Is there some other penalty which could minimize any such mass abandonment of properties? Again, sorry for my ignorance if there is something I am missing.
What you are missing is that the bulls themselves claim that many of the mainland Chinese have no intention of ever living here while at the same time they are supposed to keep holding the properties and buying new ones indefinitely.
+ the mainland Chinese factor is very very overhyped.
Starbreaker -> Thanks for the comment and your question. We agree with that which you imply: Many off-shore owners are simply momentum investors, and when prices turn down in earnest, they will dump their properties.
Further to that anecdote, I had a private conversation with a cousin. She recently bought a condo in Miami ($145k) which was previously sold for double that earlier this decade. Unbelievable. She was absolutely shocked when I told her that the houses in my East Vancouver neighborhood sell for nearly a million dollars and the condo we’re renting (for $1350) sells for nearly $500k. She couldn’t believe that houses were that expensive. She said “Houses in New York are that expensive…but that’s NEW YORK CITY!” (She lived there for 5 years). I can tell she thinks that Vancouver is a lovely place to visit but not exactly a “world-class city.” A bit small, and lacking in much of a cultural life or good career opportunities.
She looked at me with such pity and said things like “Oh no! Poor Canada!” when I told her of our CMHC. In the end she said “Don’t worry, this mania will end and you will pick something up for a song. Just like I did.”
Anyway, I know this will end, more and more of our clients are sinking under the weight of their debts and contemplating bankruptcy. Even if interest rates don’t go up, people are struggling financially. This will not end well.
Similar to this anecdote:
A few months ago I drove down to Olympia & Portland to visit friends, had some interesting discussions around real estate. A friend in Portland recently baught a house for his family. When he first started looking, houses were all either unacceptable or too expensive. He decided what he needed, what he could pay, and just waited for the market to come down to him.
Another friend in Olympia had relatives closing a deal in Nevada. The house they were buying had been on the market 4 years, hadn’t had an offer in over a year, they picked it up with an offer much lower than the asking price and over half off the original listing. I told her that prices in Metro Vancouver hadn’t fallen at all from the peak, had even risen a little after the financial crisis. She just gave me a quizzical look, like, what are they thinking?
On the way back we stoped at Old School Pizzeria, a pizza shop in Olympia covered with random memorabilia. A bizarre thought occurred: travelling back to Vancouver was like travelling back to a past before the real estate bubble burst. But no one would believe me when I said I had seen the future and the destruction that would befall them…
pricedout,
I sure hope your entire future isn’t pinned on the accuracy of your dire prediction for Vancouver real estate.
Don’t worry it’s not. I will happily rent for the rest of my working life before I buy some crappy overpriced Vancouver house. Then buy a retirement home somewhere sunny with all the cash I will have saved. Heck, I could do that today if I wanted to. No worries! A house is just a place to live and right now I choose to rent rather than buy. I’ll invest my money elsewhere.
Cosigned!
If your entire frame of reference for real estate is 1980 to present, then yes, Real Estate made a lot of sense. An inflection point is happening now. Rates are on their way up. As one of my favourite portfolio managers says often, “Trees don’t grow to the sky.” An apt metaphore for BC since mature trees are the ones that get chopped down.
great quote, thanks
i’m sure it started life as a chinese proverb
sounds like the recipe for remaining poor. I’ve never heard of a lifelong renter having money to do anything on retirement, and I’m not young. What I do see are homeowners downsizing and using sale of their homes to buy retirement villas in international locations. The trick is, you need to have owned that home to do it. Sorry pricedout, I don’t see any exceptions to the rule here
Speak for yourself… There’s more than one way to skin a cat… Good dividend-paying bank stocks are a great way to take advantage of all the fools willingly becoming mortgage slaves. BNS, Canadian Western Bank, Santander and CIBC all have a role in my open accounts and self-directed RSPs. Bought more of BNS when it was yielding 7% in 2009. Know what else is great Rusty? I can sell all these shares in 20 seconds and it’ll cost me 25 bucks a pop.
rusty i love you
i am ready to follow you anywhere
Rusty, why do you keep posting here?
I mean, I’m not sure why I keep reading this blog, I’m hoping your answer will shed some light or something.
we will hopefully soon have more insight into why exactly rusty posts here
it certainly can’t be to evenly consider any different view points – he has seen the light and knows the truth of the universe! now he hath descended the mount with his stone tablets and is disseminating reality to us with BRUTAL, UNADULTERATED LANGUAGE!
my god, rusty – you’ve blown my mind – how could i have been so off, after watching prices rise 500% in 20 years (definitely not in a straight line, with the exception of the last 5 years – 2008/9 not withstanding) to think that maybe it was just too much for the local economy to sustain?
oh right, we don’t need a local economy anymore.
hell, who needs residents anymore?