“You’re starting to see more desperation from sellers because they want to get out at the top.”

“I think people are starting to remember that price does matter.” – Ross McCredie, chief executive officer of Sotheby’s International Realty Canada

“We’re seeing an increased amount of attention to what’s happening in the economy.” – Don Lawby, Vancouver-based chief executive officer, Century 21.

“You’re starting to see more desperation from the sellers because they want to get out at the top. You are seeing signs that things are definitely changing.” – Mayur Arora, Oneflatfee.ca, Surrey, B.C.

- Excerpts from ‘Home-buying blitz in Vancouver shows signs of cooling’, G&M, 3 Aug 2011 [hat-tip 'midnite toker']

12 responses to ““You’re starting to see more desperation from sellers because they want to get out at the top.”

  1. I was going to make the laymans point that by the time we start to correct, the world economy would be in recovery mode and our housing prices would be supported somewhat.
    Looking at the markets this morning I think we’re a while from the (global)recession being over.

  2. Like 40-50 correction in Van markets. About 30 percent now by the end of this year, 15-20 percent over the next 2 years.

  3. This could be the turn. (COULD be, I say). Because once that “oh-we-missed-it” feeling takes hold, it’s look out below. Lots of inventory rushed to market, no one buying because they expect prices to keep falling. Everyone looks at each other and realizes (finally admits) that they’ve been speculating.

    • you completely overestimate the number of speculator in the market that really care about topping out. That “oh-we-missed-it” feeling will be felt more on the oh-we-might-be-missing-our-buying-opportunity once prices head down for a couple of month. Watch and learn.

      • “Watch and learn”

        Really Rusty, are you SO sure of your own analysis and insight that you feel comfortable patronizing others who have a differing view? The fact is neither you nor anyone else is sure what will happen in a couple of months. Or even a couple of days. Please show some maturity & at least acknowledge other people have a right to their own opinion. And the right to state it respectfully.

        Personally I think the market will fall and fall a lot (40-50%). I’m not sure when it will happen but I am cautioned & informed by what has happened elsewhere around the world.

  4. China still has lots of money swishing which some members of the Chinese public can access at very low, or free, rates.

    Vancouver is a choice destination for the cash, along with Sydney, London, Auckland, Toronto, it will be very unlikely that we will see a precipitous drop in RE prices in Vancouver.

    At some time in the future, when the global currency flows become more balanced, hoping that there is no calamity, prices may become more real compared to incomes.

    At the moment, making money, out of nothing tangibly visible, is the raison-d’etre for the US and the UK economies – the chinese economy is the third leg and siphons to meny off.

    Years from now, we will look at this period and analyze in University classrooms, providing Universities keep their relevance in business training, as a mass hysteria and wonder why it ever occurred – same as we did for the economic hyperbolic period in the twenties; but like previously, it is likely we will have collective amnesia, and forget lessons learned.

    The US and Canada have to start producing things of value again – finished products that the global markets want. Do you remember the days when UBC engineering had value and relevance? Most grads now end up in jobs, if in engineering field, that are directly, or indirectly subsidized by the government. And for all the millions that the government pours in University research, for science and technology, is there an ROI that can show what the cou try has gained?

    • so true. most UBC eng. students ended up in Telus phone customer support depart.

    • “China still has lots of money swishing which some members of the Chinese public can access at very low, or free, rates.”

      – 20%+ per annum is not free money and with the yuan pegged to the US dollar (which is dropping like a stone), interest rates in China are sure to go even higher as inflation there becomes an even bigger problem – especially food price inflation with all the weather-related global supply problems. As increasing interest rates choke off inflation and the China asset-price bubble pops, so too will the Vancouver, Sydney, London, Auckland, and Toronto real estate markets.

  5. Chris – yes, too many Engineering students end up in customer support jobs and not the fantastic positions mention in University recruiting brochures: a waste of young Canadian talent! I recently did a road trip to interior of BC – I wonder the relevance of public funded money, to UBC, has to BC and betterment of citizen’s lives.

    Airedales – I mentioned “…which some members of the Chinese public can access at very low, or free, rates.”; the operative word is ‘some’. But I do concur with your statements: if the government induces asset bubble in China collapses, the RE prices in Vancouver, Sydney etc will fall. However, we will also have other problems in our economy that will make life unpalatable to the middle and lower incomes wages earners, in North America.

    Canada and the US can prevail – we need to do a Germany: invest in our people, foster innovation, nurture long-term planning in corporations, focus on education that has relevance to local economy.

    Our public higher-educational institutions are forgetting the local population and aiming for global outlook – that works if we had a world-class economy; we don’t! Canada could, until the early nineties, showcase Canadian value-add industries – that produces goods that the world wanted. Canada could, again until the early nineties, boast quality infrastructure, and legal framework that fosters innovation – other countries have caught up, or are leap-frogging ahead.

    I often, as part of my work, travel to SE Asia, India – in the seventies, do you remember how many light years behind, these regional economies were from Canada? The Canadian educational system was a vaunted system that outshine any of these countries. While these countries GDP per head is still lower than Canada, they have the best years ahead.

    I visited a factory in southern India, started more or less in a bard, by a University grad and two of classmates, in ~2001. The factory now hires close to 300 people, exports regionally, cash flow positive, and the founder’s are using money earned to invest on innovations higher-up the technological food chain: this is what happened in Canada in the fifties but hard to find now; India is poor, with blatant poverty still visible, but travelling as I have over the last twenty years to the region, the prosperity improvement is visible and wonderful to see. The challenge to Canada is that the rise of countries like China, India, Vietnam, is that our prosperity, relative to the world, is no longer to be taken for granted (aside from parents caching out of the Vancouver RE and giving it to the kids).

  6. Just got a funny conversation in facebook. A friend moving to Edmonton (which I didn’t know initially) asked the question to buy vs. to rent. Even today, people won’t change their mind that RE is a great investment!

    Here is the conversation:

    Mary
    to buy or to rent … that is today’s dilemma!!!

    Makaya
    it depends what it’s about, but if it’s about housing, it would be wiser to wait a bit… http://vreaa.wordpress.com/2011/08/02/market-toppy-top-topped/

    Susan
    Depends on how good the deal is. Russell and I just bought but we managed to get a place that hadn’t been listed yet and got it for $15k under what it was to be listed at. They also threw in some furniture and art.

    Mike
    Mann You should go on House Hunters :P

    Jenny
    I vote for renting.

    Liz
    Rent.

    Sharon
    Buy. Real estate will eventually pay off — property in Edmonton is pretty stable.

    Makaya
    ‎”Buy. Real estate will eventually pay off — property in Edmonton is pretty stable”. I guess that’s the kind of advice people were receiving in Phoenix, Las Vegas, Florida, etc… in 2006? RE can never pay off and can get you debt slave for the rest of your life (ever heard of negative equity?), and the risk is higher in Vancouver than anywhere else in Canada. Rent is twice cheaper than buying in Vancouver, so why bother? Buying Real Estate in Vancouver right now would be a poor financial decision. Wise investors buy low and sell high. There’s no shame in renting, only 45% of swiss or german people own their home and they’re not poorer than Canadians… Here is a great article on Canadian business: http://www.canadianbusiness.com/article/33638–rental-complex–page1

    Sharon
    Uhhh. She’s moving to Edmonton…..

    Makaya
    Even worse…, price are declining over there! http://theeconomicanalyst.com/content/examining-house-prices-and-rents-major-canadian-cities

    Sharon
    Yeah. We were crazy over priced and the market has finally stablized and settled. You will notice the “high” was during the peak when you couldn’t rent or buy in Alberta. As a long time property owner in Edmonton, I have been very happy with my investments. I keep a pretty close eye on these things and in Edmonton, its stable.

    Makaya
    I’m not following the Edmonton market as much as the Vancouver one and it can’t be as crazy as here. At least, there are real industries in Alberta. You’re happy with your investment because you, as a wise investor, bought at the right time. I can’t remember which famous investor said “you make money when you buy, not when you sell”. I don’t think right now is the right time to buy, and renting a bit while letting the market decide which direction it will go is, IMHO, a wiser choice.

    Glen
    It’s never the right time, only in retrospect when the people who made a move are laughing.

    Makaya
    I found this article on the economist. It was written in 2005, before the financial collapse and the american Real Estate burst. The arguments made by the “bulls” at that time are no different than the ones made our own canadian bulls. To see what’s coming, you just need to replace US by Canada, Florida by BC in this article…
    http://www.economist.com/node/4079027

    Glen
    Problem is neither of the rationales are correct in that article. Canada doesn’t have a substitute for the subprime mortgage crisis.

    Makaya
    Are you sure? https://www.vancity.com/MortgagesRenos/CustomFit/SpringboardHomeownership/

    Makaya
    And we also have a Freddie Mac or Freddie Mae, it’s called CMHC…

    Makaya
    And another example… https://www.notapennydown.com/zero.htm

    Glen
    And when is the world coming to an end? It’s sometime in October now, right?

    Makaya
    Lol!

  7. “…patronizing others who have a differing view”

    Bally,

    how so? Check the opposing comments for name-calling, profanity and insults. You are just like legions of young men in Vancouver. Entitled, angry, impotent. With these high real estate prices I only regret that it’s created an unhappy population who should be at an age where they’re having the time of their lives, and enjoying living in the #1 place in the world.

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