This Sale-Resale comparison care of ‘hazuchan’ at RE Talks 22 May 2011 2:21pm-
6518 Angus; SFH in South Granville on 34×118 lot (smaller than average):
Listed $799,000 in April 2009
Sold for $1,000,000 :
The same property, May 2011, listed for sale for $2.2 million, for a price rise of 120% in two years:
[Is there anyone remaining who can't see this is a speculative mania? -vreaa]
Yes the answer is Rusty.
[Okay, okay, I'll reframe: Aside from Rusty, is there anyone remaining who can't see this is a speculative mania? -vreaa]
Well, the new color is better.
If this sells for anything close to 2.2, is there any way we could follow up with a little “interview with the buyer”? It would be fascinating to know what would motivate anyone to park that kind of cash in a place like that. Even money laundering is not a good reason if there is significant risk you may not be able to get your cash back out of the machine.
this is hysterical
i’m going to cruise by there later and have a giggle
Well the colour scheme is better. That’s gotta be, what, $1000?
Still, it raises a very good point: speculative manias are going to pump hundreds of millions of dollars into the local economy, even after considering debt repayments, taxes, and churning the gains into more properties. When you see people driving around the city in nice cars wearing nice clothes, ask yourself what are the odds that was paid for by a real estate transaction?
We confess that thoughts like that often cross our mind. It’s the only game in town, after all.
jesse makes an excellent point, that is far from obvious to many: If this house sells for $2.2M, the buyer borrows the money to buy and the ‘cost’ to the economy (funds removed from spending pool) is relatively small (monthly mortgage interest), but, on the upside, the seller gets $1.2M profit directly into their hot little hands… if its their primary residence, it’s completely tax free… which they then get to spend/retire/buy toys etc. (Many have bought more RE, which can further amplify the process.)
This is why Vancouver’s economy has looked so good (artificially) during the expansion phase of the mania.
Imagine the reverse of that on the way down… [giant sucking sound...] …Debt drawing away all discretionary funds; No more artificial injections (seller’s won’t have profits to spend or roll-over). ‘Deleveraging’.
The economic health of our province has a very high chance of turning on a dime.
that being said,
and since i hate to be wrong,
the bubble is never stopping, and it will not ever pop
the fundamentals are more than sound,
and one day, Vancouver will have 1.5 billion chinese living between the border and the mountains.
murphy’s law!
I do not underestimate how long this can take…
But… I think the dept of Finance is not immune to Schadenfreude.
most expensive paint job ever.
yeah – speculative bubble. I’ve seen this movie before.
what’s everybody’s odds? Mine are:
3% black swan event HUGE drop. (US defaults on debt this august or crazy earthquake.
10% sharp drop in three years
40% slow melt (2-4% per year for 10 years or more)
30% prices stall out until inflation catches up in 25 years or so
17%: housing goes up because people are truly insane in Vancouver
yank
i choose any of the final 3 options
with the emphasis on the last one
The only thing I see about these prices increases is…if you don’t already have your name on title anywhere you’re f**ked.
rusty
what if we have a nasty correction, will you still be as confident?
yes, my rents will more than cover my mortgages. This is aside from my vocational income a.k.a. gravy
so what percentage of your net worth is leveraged in RE?
this has been asked before, and you weren’t trolling this site then
It’s an especially ugly house in a city of ugly houses.
That’s got to be worth an extra $500k right there.
real estate is a hobby for me. I’m a pharmacist. It’s hard to break down my net worth in properties vs other as the “other” include businesses that are difficult to quantify.
oh, it’s not about poverty or homelessness or gun laws — You want us to move to Vancouver to pay your mortgages.
if real estate is a hobby – then you are already in the top 1% of wealth in the city – that or you are leveraged to the tits.
so do you see then how you are maybe, just maybe, slightly, a little bit disconnected?
live in a bubble much?
3 of my homes have no mortgage. For my renters I choose nice families who need a break on their rent and charge a nominal amount. Maybe this is why our rent to price ratio is out of whack, too many generous landlords.
I’m not sure running a grow op makes you a pharmacist.
Egads, they didn’t even update the windows to double-glazed.
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