Brian at greaterfool.ca 2 July 2011 9:11pm -
“A house I bought 10 years ago for 140K and sold for 320K here on Vancouver Island is for sale again.
This is after 50 thousand or so of updates, asking price 325 down from 349 and no offers after 6 months.
This compares to the two days it took me to sell it 3 years ago.
The times are a changing and some of us are going to clean up.”
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- These Compare Favorably With The Other Home Affordability Services Offered, Such As The Washingtonmutual Mortgage Loan Modification ! | vybogyciqony 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
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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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Notice the price. 50K in updates minus principal repayment and downpayment. The owner wants to get out without a loss based on some anchored condition, either psychological or avoiding insolvency.
I eagerly awaiting July sales numbers. So far May and June have been declines.
july is down from last year but forecasting for 2700?
i’m sure it’ll go nuts as soon as the sun pops out
Oh I’m talking month-over-month.
Reasons for not buying a house ever.
1) You have a more flexible life you can pickup and leave when you want with 1 month notice to the landlord.
2) Instead of spending time doing house maintenance and projects you can spend that time looking after the investments you make with the money saved with renting.
Add any other reasons you can think of.
3) A family or financial hardship such as death, divorce, or job loss can lead to significant downside if the market becomes illiquid and you have to sell to remain solvent.
Never Own A Home Again
I don’t necessarily agree in every situation, but makes sense in Vancouver and similar environments.
One more:
Why I Am Never Going to Own a Home Again
And another one:
Why I Would Rather Shoot Myself In the Head Than Own a Home
Note that Altucher is rich, but he did not make his money in real estate. Shocking!
This reason is related to ams’s number (1):
– Without a house to sell, you can more easily move to wherever the best job opportunities are at the moment.
Here’s another reason that’s important for me. When I owned a house, I experienced “pride of ownership”. I view this as an economically inefficient emotion. I wanted to spend time decorating the house, fixing every little flaw, buying fancy furniture, etc. Now I rent a 70-year house which is, admittedly, not in great shape, but it is perfectly usable. The great part is: I take no pride in the quality of this house, I simply use it to get me through my daily life. And the flaws don’t bother me. I don’t care about the dents in the wall because it’s not my wall!
BUT WHAT WILL YOUR DINNER PARTY GUESTS THINK OF YOU?
HOW WILL YOU SUSTAIN GUANXI?
guanxi
loooooooooooool
4) Save money. Our landlord came by last night to pick up the rent cheques for another year (no increase in the rent-yippee!) and sort of nervously asked “Sooo…..you guys thinking of buying anytime soon?” Huh. I guess he doesn’t realize that we’re saving $1000 a month by not buying a similar unit in the same building. He bought a long time ago so I imagine he’s making a profit on us, but doesn’t matter to me. The rent’s reasonable, good location and is enough space for now. He doesn’t seem to have any plans to sell either, which is good. Hope we can stay here for another couple years, at least.