“We put an cash offer (no mortgage) on a house in mid-2009, for $50,000 below asking price. It was rejected. A year later the house had not sold and was listed for the exact price we offered in mid-2009. A year after that, it still didn’t sell. It was recently listed for $25,000 below what we offered. So, this is a $75,000 price reduction in two years. And the house is just sitting there, doing nothing after two months. Listings are the highest they’ve been in 10 years, sales are at the lowest they’ve been for ten years. Price reductions are happening, even though you may find some houses going for more than asking (not many). It’s a recipe for a major housing correction. And…no…Asian buyers are not going to ride in on a white horse and save us. This is the end game.”
- comment at Canada Bubble blog (comment section), passed on by Makaya at VREAA 15 Oct 2011 9:35pm
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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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I certainly hope you are right. It’s clear that the Bank of Canada and its daddy the US Fed are not raising rates for another decade at least, so let us hope there is another road to the massive correction I want to see before I buy anything in this market.
Basement Suite PhD -> It isn’t necessary for interest rates to rise for the market to implode.
If they did, it would speed the process, but it’ll collapse under it’s own weight and has possibly started doing just that.
All it needs is to run out of enough buyers prepared to step up at these price levels… then sales volume decreases, then prices stall, then prices weaken, then buyers pause, then prices weaken some more, then buyers sit on their hands, then those holding solely because prices were going up start coming to market (new sellers), then prices drop some more, etc. Lower prices will beget lower prices.
From a sentiment perspective, there is a tipping point out there that hasn’t yet been reached, but the increasing ‘bubble/no_bubble’ media talk has ‘primed the pumps’. Most owners have now heard discussion regarding the possibility that there is a ‘bubble’. Price drops will start realizing those fears.
Thank you VREAA, I hope that theory plays out, and it does make sense. Lets make some popcorn and enjoy the show if it does.
You people realise monetary policy is not formulated solely at the behest of the real estate market right?
Emergency rates being extended for far too long, in fact indefinitely, cause asset bubbles, enormously increased personal debt, and high inflation generally, which are all destructive. Rates should be lowered to boost a sagging economy, but set too near 0 for a decade causes bigger problems that eventually hurt the very economy they were trying to save. E.g., the huge housing bubble in the US that eventually popped, helping to ruin said economy. Solution? Keep rates at 0 indefinitely, says the US Fed.
I see. So the solution is the raise interest rates in the face of anemic GDP growth. This way you can make house prices go lower so you can move out of your basement suite. Economic recession solved.
For a phd, your reading comprehension is pretty shit. Emergency rates set by the Fed are not being extended ‘infinitely’.
Well aren’t you the rude one. I’m not suggesting hike by 5% right now all at once, but get started. Keeping rates at 0 forever is not the answer genius, see Japan, in fact see North America. It was the CAUSE of much of this. Debt was way too cheap, for way too long. And yes Bernanke has promised the market that he would keep rates “exceptionally low” (means near 0) for the next two years, “until the middle of 2013 at a minimum”.
http://www.huffingtonpost.com/2011/08/09/federal-reserve-rates-low-dow-jones_n_922374.html
What I said about the effects of extended free money is true. Debt should not be free, or the masses will want a lot of it, and that is just what has happened. Emergency rates should not have been left for as long as they were. And learn some manners. Conversation with troll ended.
You have demonstrated a complete lack of understanding of monetary policy and economics. Stop reading zerohedge for the love of god.
Hey, matt, keep it civil.
FYI, Basement, ‘matt’ is more ‘perennially-grumpy-visiting-great-uncle’ than ‘troll’.
But still, keep it civil, matt. Or no pumpkin pie for dessert.
VREAA, he sounds more like 22 than a great uncle. Typical pompous fool, making no coherent points, just denying the obvious with insults as his tool. You can’t even debate such a person, because they’ll tell you have no understanding of optics when you point out that the sky is blue. Even if he shuts up I would deny him his pie.
MLS#?
How about name of city?
it would be helpful if the poster link to the mls#; otherwise, it’s another bogus.
yup – just another rumour, not anecdote
How would the MLS# help you confirm what the guy offered 2 years ago and what the house was listed for last year?
Just in case anyone is wondering, Fred, diablo, zerodown and Interested are all the same guy.
Have to step in here, before this takes a crazy turn:
Fred, diablo, zerodown and Interested are not “all the same guy”; they are each different and fairly regular commenters.
diablo, however, is rusty/rollie/henley/the604/formula1/etc/etc
Basic etiquette would require the same handle from the same IP unless the IP can explain, in text to the blog owner, how they are actually different people. If this is not happening it’s trollbait and ruining/distorting the comments section. I would strongly consider an IP ban.
JMHO
jesse -> Noted.
Up to now, these shenanigans tolerated here, partly because it’s become such common knowledge that Rusty/Rollie/etc are all the same voice.
But your point about “ruining/distorting the comments section” is a good one, and we’ll consequently reconsider a ban.
diablo, please use one handle if you want to continue being part of the discussion here.
BTW, we’d agree that it’d be nice to know more about this property.
MLS would be ideal.
Makaya, when you see all this, if you could give more info that’d be good.
I’ll ask for more information next time, but no guarantee we’ll get it. Very often, these stories are coming from “a friend of a friend”, and if not, people might not want to give such details to preserve their anonymity…
What’s interesting, in my opinion, is not one single story, but the multiplication of such stories, coming from different sources. The general feeling/trend toward RE is more enlightening than the absolute veracity of one anecdote.
yeah matt, diablo is the b***h youre looking for.
The house they wanted to buy is listed $25K below their previous offer so what are they waiting for? More importantly, why did they want to buy it in the first place? Just about everybody is a speculator these days since most can’t really afford the risk in current RE pricing. It’s all about tax-free capital gains for these marginal buyers. When the expected gains turn to realized losses, all these marginal buyers will be forced to sell because of the ridiculous leverage they contracted for.
I’m the original poster of this comment, which I think I posted on an entirely different website (Canada Bubble). Our real estate agent placed the offer (in Abbotsford) for a house listed for $1,025,000. We offered $975,000. The offer was declined. We didn’t counter. We had cash, no mortgage. The house sat unsold for 6 months, then they took it off the market. It went back on the market a year later, we got a phone call from our agent, telling us the house (with original owners) was back on the market at $975,000. We declined to even look at it again. Recently the MLS listing for this property now has a price of $949,000, which is $25,000 below what we offered. I can’t remember the exact timing of all of this, except to say we have been happily renting since January 2009, so clearly our original offer was just prior to moving into our rental home in January 2009. So these owners are now trying to sell on the other side of the peak. We would have paid a peak price for that home. Renting is cool, all we have to do is pick up the phone and someone comes out and fixes stuff for us within 24 to 48 hours.
Thanks for this further information, Canayjun.
“Interested” is my handle, and I’m certainly not Fred, diablo or zerodown! “Identity theft” on the VREAA blog?
I should have added that the question posted by the other “interested” party was not mine…
Ah, okay, see what you mean. Capital “I” Interested asked about MLS # (and the replication of your handle name may well be innocent; ‘interested’ may be a common anon handle under the crcumstances).
Rest assured ‘interested’, we know you are who you are.
Looking at the larger picture here in any dynamic system there are ratios that have to be maintained otherwise the whole system collapses. For example you are not going to see person who’s hands reach to the ground while standing up because that would invalidate the design of the human body.
The economy is no different you can not have mortgage costs sucking up 50% to 70% of household income over the long term trend of 30% because that extra 20% to 30% that is being sucked up by debt repayment is going to have to come out of other spending at some point, which means falling sales for other sectors of the economy, which means layoffs in those sectors with falling sales, which should feed back into the housing sector. However, free money and the stupidity of people borrowing too much, and banks lending too much has just delayed the onset of the problem.
The economy is extremely unbalanced with only one possible outcome, rebalancing of the economy. the only question is how the rebalancing will occur. pick one of the following.
a) Massive correction in the real estate market, bankrupting people and banks and maybe the country.
b) High inflation effectively reducing the debt loads
c) Something in between a and b
d) Revolution with a capital R i.e. regime change of some kind with current elites getting the boot and new elites replacing them.
Monetary policy is a a fraud it could not predict the current problems and it will not fix them, it is one of the causes of the current problem.
Like others, I’m curious about the MLS number. Canayjun?
ams,
What you write is correct, but I will add one salient point: it can take a long long time for the economy to “rebalance”. No one knows how long, but the characters we have pulling the strings are acting as if they want to postpone things for as long as they can. They will be pumping in liquidity to keep this cadaver upright. Not a happy thought.
Found it – - Looks legit
5012 Mt. Lehman –
F1124302
For sale since 2008
Original Ask – 1,149,800
Purchased 2004 506,000
assessed value 770,000
Hmm – Seems like we could still go down some more
This is ridiculous. A McMansion in Abbottsord going for $1M. In cities like Houston you could buy a 3 car garage house in a gated community for a lot less than that. Golf themed gated communities in Scottsdale cost lessw than that. A million can get you into Rancho Santa Fe, The Hamptons, Buckhead, or even Malibu. Who on this planet knows where Abbotsford is? Even with lottery winnings I still would not spend a million in Abby or any other Fraser Valley town. Besides, I find the quality and design of American houses to be a notch above our Canadian abodes.
here we go, another self-proud-America-wanna-be! shouldnt you be out there helping your country out of the BK stage?
Ad hominem attacks!!! Is that the best you can come up with.
Are you telling me that Abbotsford is comparable to Scottsdale?
Are you telling me Vancouver has anything on Houston? Places like Houston have real economies and not this mickey mouse real estate flipping business. Houston has the highest number of fortune 500 companies after NY. It houses head offices of mega multinational corporations like ConocoPhilips, Sysco, Enbridge, Kindermorgan, KBR, Halliburton. This is a city with well paying, and fulfilling, jobs. Yet, their real estate will not cost you your first born.
And yes, American housing construction leads the way. Features like built in audio are not rare on new constructions – something I have never seen in Canada. Architecture wise, those guys do not spare any expenses. 3 car garages are very common yet I see a number of tri-city homes with just one garage.
Bringing in American examples does not make me an American-wannabe.