eva at greaterfool.ca 11 July 2011 1:52am -
“I sat next to a realtor at friends bbq in Kitsilano, Vancouver ealier this evening…she was saying she must leave early as she had to show a condo…she specialized in condos on the westside. I said, “oh you must be a little down since the market has slowed down”…She turned with an insulted look in her face, and proceeded to tell me sales are booming once again! I asked what type of people are buying in this insane market! She said young up and coming couples, average mortgage payments of $6k a month is most common…I nearly choked on my food. I said they could rent the condos of under $3k a month, why pay double to purchase. She replied, “but why pay the landlords mortgage when they can afford their own”…makes lots of sense to me…pay double to own. I gasped…and said it is scary, what happens when the prices drop…she was very upset with me, and said prices never drop…they only go up…these people are building equity. I smiled and said, yea…I remember 1982…we lost our equity along with many other people, took many years to come back. Although, I must admit I have been a little skeptical lately that maybe we have all been wrong…but after speaking with her now believe more than ever “this cannot end well”. “
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- 01 Vancouver Condo Info
- 02 AmericaCanada [retired, no archive]
- 03 Housing Analysis
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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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what a load of bullshit this story is. A realtor will always know the market ebbs and flows.
this one doesnt. you have a high opinion of realtors. anyone can become a realtor. the test isnt hard, you could pass it. people as dumb as you are realtors, there are lots of them,
PS.
rusty i hate you so much you just ruined my whole day, im soooooooooo mad !!!
Rusty what is your prediction on the real estate market in Vancouver, over 5 years, 10 years, 15 years. What kind of city do you think Vancouver is going to be for your kids?
I’d love to see Rusty’s long term predictions for anecdotal reference in the short term.
A good realtor will know their ebbs and flows and act accordingly, but then you’d be assuming that most realtors were good at their job.
all realtors are good at their jobs in this market
for the record, of my realtor ‘friends’ on facebook – 2 have made wall postings along the lines of: “i don’t see THIS market cooling down at all!” followed by ads for homes they’re pumping. ho ho ho
As I mentioned in the other thread, the masses are the last to know. This is especially the case for realtors. Their masters don’t want them to know.
Un-be-fuggn-lievable. Despite me pounding them with the TD prediction, the renting > owning cover page story, loads of examples of condos that return barely anything even after the appreciation of the past ten years, tons of historical price trends… the in-laws have moved their plan to buy up to six months from now. They intend to get a starter house for around 600,000 in Burnaby (gross income 120k). They both agree that prices will decline, but by no more than 15%, and they believe the main reason for decline will be raised interest rates. So they want to rush to lock in for 5 year fixed. I could show them how much principal they will have to refinance after 5 years at possibly double the interest rate, but i am getting seriously tired of trying to save the lives of people who will not listen to reason. THEY ARE BOTH DESIGNATED ACCOUNTANTS incapable of the simplest financial calculation it seems.
I am so tired of this madness that I almost feel like going along with it, taking our downpayment to the bank and starting to shop. What if this insanity never stops? If rates don’t rise, they will be making the correct choice. Inflation will kill us and we will never have had the chance to live on our terms, to put solar panels on the roof, to double glaze and insulate the house to make it efficient, to grow a watering-free local ecosystem plant garden, to have a place we can grow old in. How can professionals who have all the evidence presented to them still make the decision to buy at what appears to be a market top? The ownership premium is far, far, vaster than most economists think. Owning is a core religion of the secular age, rooted so deep in the psyche that it is most people’s raison d’etre. You can’t fight a lemming force like that. Just bring on the multi-generation mortgages and house slavery and show me where to sign.
@TPFKAA: Deep breaths. In with the good, out with the bad. Do this ten times. Done? Feel a bit better? Okay, now ponder this: not only is it a myth that Vancouver is different when it comes to real estate, but it’s also a myth that lemmings… behave like lemmings!
http://www.snopes.com/disney/films/lemmings.asp
There’s a Vancouver real estate market analogy in there somewhere – something that draws on the fact that these creatures were actually suicided to support a myth and that their riskiest behaviors are dictated by the population around them – but I’m not with it enough right now to draw it out.
i was aware of the lemming-suicide myth (though i use the term frequently) but i had no idea about the disney movie! haha thank you
Thanks, Royce. I took some time to calm down. The wife is more into buying asap, the husband is a little more reserved and wants to save another 100 large to put down first, which delays by another year. There is no way she will want to wait; I know her personality. She calls the shots. They will also access 100 k from his parents’ HELOC.
I love how he thinks: He read that a bank said 18% decline in a year, so he will buy when prices are 18% down, with his locked-in interest rate quote, and then prices will resume the “normal” price appreciation of the past. HAHAHAHA!!!
I also was aware of the Lemming myth, but the metaphor has now become so entrenched in the English language that I can’t be bothered to try to think of an alternative to describe this kind of mass hysteria. Anyone have a suggestion?
nazi germany
the stanley cup riots x 2
I hear ya man, waiting for this Bubble to pop is like watching grass grow.
“I am so tired of this madness that I almost feel like going along with it”
they said the same thing in Munich
40,000 new residents in the GVRD each year. Why don’t you tell me if prices will be higher or lower in 5, 10 or 15 years?
Yes, inflation will always win. Haven’t you learned anything yet? People with homes are the ruling class…it’s always been this way (anywhere in the world), expecting it to change is idiotic.
gah you’re such a knob.
people like you are why canada is on the skids
So 70% of Canadians are the ruling class?
Your stupidity is impressive, Rusty.
“People with homes are the ruling class…it’s always been this way (anywhere in the world)”
Wonder how the ruling class is doing in Florida, Nevada and Ireland, just to name a few.
You think you’re the ruling class? huh.
btw the owner of facebook rented in California for several years.
- but the GVRD has had negative intraprovincial migration for over 20 years and recently interprovincial migration has turned negative as well. Furthermore, there is not 40,000+ international immigrants moving into the GVRD – get your facts straight! Finally, when international migration starts to decline your market will collapse. You sir are full of B.S.
40,000 people coming? I am sure the city has the housing part figured out. Now how about those pesky jobs that 40,000 people will be needing to live here. Are you hiring 15,000 pharmacy assistants Rusty?
I can’t believe that people consider getting 5-year terms to be “locking it in.” Har har.
If you want to be in the house for 20 years and you can pay the mortgage, the stability might be worth it.
Just be sure you don’t need or want to sell. [Example - Friends in WA DC bought near the top of the market. They are 200,000 underwater and cannot sell without a loss. And the banks will not allow them to refinance at today's lower interest rates. But as long as they are ok staying in the house, things aren't so bad. It was just a costly place to live, and you cannot count on keeping your down payment if the market drops.]
No-one in Canada can safely apply this strategy.Interest rates are renegotiated every 5 years unlike in the states. You can’t count on increased wages to cover it if the interest rates double.
you’re asking the wrong person ams; I’ve already planned for my children’s financial future.
Rusty does not have kids and he/she does not plan on having them either. He/She does not own real estate. Also, there is definately no life planning of any kind going on at all.
An imaginary inheritance of your imaginary wealth by your imaginary children.
For the record, I am a realtor. I am not a big wig realtor but have done fine despite not speaking any Chinese (cantonese or mandarin) and I am a Canadian of Chinese ethnicity. I have a degree in Finance and Marketing and consider myself a professional with strong ethics.
Despite my warnings of a imminent correction of a scale similar to the US, several of my buyer clients went ahead and bought anyways. The reason I think they acted against my professional advice? They listened and valued their family and friends’ opinions more than mine, a lowly realtor trying to do what is best for them.
So, CH there are a few of us realtors who try to do the right thing and be professional but in many instances are ignored.
Nice work there. Most people would just shut up and take the cash.
lol, stfu rusty