“I’d like to share my story as someone who was born and raised in Vancouver, lived abroad for ten years, returned, and is now planning to leave permanently.”

“I’d like to share my story as someone who was born and raised in Vancouver, lived abroad for ten years, returned, and is now planning to leave permanently.
I grew up in what is today ground zero for Vancouver’s speculative mania, Point Grey. My dad was a professor at UBC, and my mom a part-time teacher. In real terms, my income is comparable to that of my parents when they bought our house in the 70s. And my expenses are lower: we have one child (so far) instead of four, one car instead of two, etc. And yet the modest house I grew up in would be utterly out of reach for me today.
The question is, what has changed between a mere two generations? Yes, the economy has grown, and there is more wealth in the world today. But presumably one’s income reflects this growth, so that real estate should be no less affordable than it ever was.
Locals shrug off this uncomfortable question with the standard wisdom: We have water! And mountains! To which I reply: Vancouver has always had water and mountains. The city’s attractive geography is widely known and has long been priced in to the market. It’s a valid reason for local prices to start out higher than in certain other places, but not for them to go up any faster over time. Some improvements have been made to the city itself, but the fact is Vancouver is pretty much the same place it was 30 years ago.
What does seem to have changed is our collective mindset. We are living in a dream where Vancouver is the new global hotspot, debt and real estate are the path to riches, and where history doesn’t matter, because “it’s different here”.
I believe Vancouver is in for a grim wake-up call. By any number of fundamental metrics, local real estate appears overvalued by 60-70%. If there were a way to short the market, I would wager a significant portion of my net worth on this bet.
The ridiculous cost of housing aside, after living in six cities in four countries, and traveling to countless other locales, I can say with some confidence that Vancouver is not as uniquely wonderful a place as its residents claim it to be.
None of my three siblings—all hard-working professionals—has chosen to settle in their hometown. My wife and I only moved back because my dad fell ill. We currently rent an eastside bungalow, and intend to relocate internationally next year. I plan to move my business with us. The place we’re going to has its own challenges, but in our experience the overall quality of life is superior.”
- El Ninja at VREAA 15 Oct 2011 3:28pm

“My wife and I know 3 realtors and they all say it is really slow. Price drops of 30K-100K. One of them hasn’t sold a home since April 2011.”

“My wife and I know 3 realtors and they all say it is really slow. One of them hasn’t sold a home since April 2011. So don’t believe the crap that homes are still selling. It is really slow, I’m seeing price drops of 30K-100K, interior photos of too many vacant homes for sale, and realtor remarks such as: Motivated Seller or Willing to accept any reasonable offer. My thoughts: I am an unmotivated buyer and not willing to accept any of these unreasonable asking prices.”
- Patrick at VREAA 14 Oct 2011 8:11am

Poorly Constructed Rental Ad – “Heat come from floor” [with tentacles?]

1718,SE MARINE DR
$925 / 2br – Two adults need for on Nov st,2011 (5years old house,Marine and Argyle)
craigslist PostingID: 2646569812
Date: 2011-10-12, 2:47PM PDT

“It’s 5years old house and also appliences are 5years old too.Included utilitie,close to bus stop,Superstore,around
8minutes to go Canada Line buy Bus,BCIT SCHOOL.
Two bedrooms suits is for two adult people only because of the neighbour.
It’s ground level,hardwood floor and heat come from the floor and own alarm system,
cable(a lot of charnel),included
Sorry no extra person or smoke or pet please.
Please contact to Princess 604-312-4668.”

Sic, Sic, Sic. -ed.
[hat-tip BPOM and gordholio at VCI]

Squamish – “A local family owns two houses next to each other here. They bought a third house directly next door and listed the first two. Two years later they are still on the market.”

“A local family owns two houses next to each other here in Squamish. They bought a third house directly next door and listed the first two houses. They demolished the newly purchased house and built a large house to accommodate the members of the family living in the first two houses. Then they wait…and wait. Almost two years later the two houses are still on the market. They drop the price on one by $100k. Nothing. Then a couple of days ago, they drop the price another $100k and drop the price on the second house $300k. $400,000 down in just one day. I don’t care how much money you have, that’s gotta hurt. The cheaper of the two houses is now listed at less than they bought the tear-down. They would have been better off just to tear down the cheaper house, even though there’s nothing wrong with it. The sad thing is, that the prices, in my humble opinion, are still not low enough. The cheaper house needs to go down another $100 and the more expensive one needs to go down $300k. That would bring the drop on the 2 houses to $900k. Ouch!”
- Bailing in BC at vancouvercondo.info October 14th, 2011 at 8:58 am

Speculative holders. – vreaa

“Friend sold her house in Kits/Kerrisdale area for just over $2.1M earlier this year. Buyer is trying to flip it but it has just sat on the market @ $2.4M for almost 6 months.”

“Two recent Vancouver anecdotes:
1) Friend sold her house in Kits/Kerrisdale area for just over $2.1MM earlier this year. Buyer is trying to flip it but it has just sat on the market @ $2.4MM for almost 6 months.
2) Similar story on East Van side from a realtor in the area. Earlier house in the area was put on the market for $999K, and was sold for $1.4MM. It has sat now for several months at $1.5MM.
Still no buyers for either of them. I imagine after the property transfer tax, realtor commissions, and other holdings costs (interest, property tax, insurance) that if they don’t sell by the end of the year they are going to be losing money on these ‘investments’.”
- Joey Jo Jo Jr. at vancouvercondo.info October 14th, 2011 at 6:16 pm

‘Occupy’ Vancouver? – Sorry, The Majority Here Are Already Preoccupied

In cities around the globe ‘Occupy’ protests are taking place as the ’99%’ confront the ’1%’.
In our city the ‘Occupy Vancouver’ movement, convening today downtown, struggles for focus. Why?

Well, consider that here in Vancouver 60-70% of the population own real estate, and, rather than being economically distressed by virtue of that fact, as most would if they lived elsewhere, owners here are feeling very smug and content about somehow having missed the global-economic-crisis bullet. They are relatively rich (they believe); their RE holdings have mostly risen since they bought, and, for many, their property values have increased 100%, 200%, even 300%, making for life-changing, retirement-securing, (but as-yet-unrealized) profits. Even those who haven’t yet profited are, like the waitress with the 250K mortgage, living in optimistic anticipation of their future profits. Because real estate in Vancouver, of course, always goes up.

The majority here don’t feel as distressed as the majority do elsewhere. It’s all because of RE holdings, and the related artificial positive effects that the RE industry has applied to our local economy through our speculative mania in housing. These owners have no idea how precarious their situation is, they don’t see their gains as having been built on a speculative mania, and they don’t foresee the very large price drops that will occur when prices deflate. Many will lose all of their net-worth (and more) in the deleveraging ahead.

For now, the majority here feel relatively content, and many can’t even really imagine what there is to protest about.
So, keep that in mind while considering ‘Occupy Vancouver’.

In other cities it may be the 99% protesting the 1%.
In Vancouver it’s more like some of the 35% trying hard to articulate something vaguely wrong and difficult to pinpoint about the state of affairs, while 65% watch from the middle distance, feeling comfortable. There are many things about local and global economic developments to be concerned about: but these concerns are unlikely to gain traction in Vancouver, at this time.

Vancouver always seems to live by its own schedule, and holding an ‘Occupy Vancouver’ event today is asynchronous. Follow up events in 2013 or 2014 will, we suspect, make a lot more sense to the majority of locals.
- vreaa

Waitress Pre-Approved For $250K Mortgage

“I was just eating breakfast at a little resto in E. Vancouver and I heard the waitress talking to one of the customers about how she just got herself a Realtor(tm) and has been looking for an apartment to purchase. She looked maybe mid-twenties and talked about how she’s tired of throwing away money for rent, she found a place for 178k (I think that’s what she said), and she has a friend that will rent some space from her. She might be moving to Vernon, though, so she’ll just rent the whole place if she does.
This is who buys real estate in this city? I cannot believe that a bank would give her a mortgage. She’s a server at a cafe. She said she’s pre-approved for 250k, but thinks that’s too much, so she’s being conservative! what can you buy on the east side for that kind of money, anyway? I find this; and the Maint fees are 500 pm. Sheesh.:
#502 – 175 E BROADWAY Vancouver. MLS V905512
437 sqft; condo/strata
Ask price $177,000
Maintenance Fees: $498.40 Monthly”
- Oilman at vancouvercondo.info October 12th, 2011 at 11:43 am

Yes, this is who buys RE in this city. Or, more broadly, individuals at different income levels over-reaching to a degree similar to this.
And, wow, those are pretty remarkable maintenance fees, they come close to the mortgage payments (with 10% down, 3% rate, 30 yr amort., monthly payment is $670).
- vreaa

“My house in Victoria has gone up in price 150% since 2001. That is not sustainable.”

“I think that there is a bubble in most real state markets in Canada as well as many other places in the world. My house in Victoria has gone up in price 150% since 2001. That is not sustainable. Last year I went to my home country, Colombia, and real state there has gone up by 500% in some areas in the same time. Today, no one can buy property with a family income on normalized interest rates. Yes, I know several young couples that have bought properties in the last year. However, all of them have bought with the minimum down and the maximum of amortization. Also they have new cars and new TV and go in vacations to Mexico!! well, I think that those guys will be broke if interest rates go up a little as many Canadians will be.”
- mekas, comment at Globe and Mail, 14 Oct 2011 1:41pm

RE Prices Make Vancouver Unattractive For Doctors

“I am a family doctor. One of my friends from residency (currently in Toronto), took a pass on moving to Vancouver after coming over for a week and seeing first hand the property prices. Just another example of Vancouver losing out on young professionals needed to upkeep our society.”
- KFPanada, at VREAA, 12 Oct 2011, 2:24 am

Americans See Canadian Housing Bubble – “One of the conference attendees was as curious about housing prices in Canada as Mr. Kass, and looked at me as if I was crazy. As if somehow simply being Canadian meant I had a direct influence on it.”

“I’m in New York right now for an economics conference earlier this week hosted by Barry Ritholtz who, among other things, curates a great website: ritholtz.com, better known as The Big Picture. It was a fantastic event with many clashing views given equal voices.
During the final presentation, Doug Kass, president of Seabreeze Partners Management, mentioned that the Canadian real estate market is giving bigger warning signs than the U.S. market did before its real estate meltdown. So even Americans are starting to wonder aloud how long house prices can stay so high. This was one of the few views that went unchallenged. …
One of the conference attendees was as curious about housing prices in Canada as Mr. Kass, and looked at me as if I was crazy. As if somehow simply being Canadian meant I had a direct influence on it.
I still don’t know if, when or how a Canadian housing market correction will occur.”
- Preet Banerjee, G&M, 14 Oct 2011

Realtor – “I have been eagerly awaiting this month’s statistics to see what sort of bounce back we would see after the slower Summer season. The answer, somewhat surprisingly, is that the we didn’t seen any bounce back in sales activity at all.”

“I have been eagerly awaiting this month’s statistics to see what sort of bounce back, if any, we would see after the slower Summer season. The answer, somewhat surprisingly, is that the we didn’t seen any bounce back in sales activity at all – in any of the neighbourhoods we look at. The degree of sales drop varies quite a bit, with more than 30% drops in sales activity in the Downtown, Vancouver Westside attached and detached, and North Vancouver attached markets compared to just 6.7% in the Vancouver East attached market and 16.6% in the Vancouver East detached market. Interestingly enough, this decreased sales activity has not really impacted sales prices as both the average and median prices in most markets held relatively stable. We have also not seen a dramatic spike in listing inventories. Should listing inventory start to rise in October, we may be looking at some minor slips on the pricing side. It is my belief, however, that the commitment to hold interest rates until 2013, in conjunction with positive employment and immigration numbers, should keep prices steady through to next year.”
- Realtor Rob Zwick, ‘Market Update’, Oct 2011, at robzwick.com [hat-tip Al]

A topping process will begin with a drop in sales. -ed.

Out-Of-Town Celebrity Spotted In Vancouver – “Could he be buying real estate?”

“Speculation is building faster than Facebook’s membership as to what Mark Zuckerberg was doing in Vancouver in recent days.
…could he be buying a reclusive property in Vancouver’s west side?”
- Katya Holloway, Vancouver Sun, 13 Oct 2011
[hat-tip 4SlicesofCheese]

File under side-bar category #22. ‘RE References In Popular Culture’ -ed.

“A close friend who graduated last year as a gastro specialist from UBC, got his job offer in Eugene, Oregon. I visited for a house warming party. 8,000sqft lot, 3,400sqft house, $328K. I am considering leaving as of now, it’s too much to pay for the views, rain, and short summers.”

“A close friend who graduated last year as a gastro specialist from UBC, finally got his job offer and green card in Eugene, Oregon. I visited this September for a house warming party: 8.000 sq.ft lot, 3.400 sq. ft house built in 2008, helper suite on the main level, self contained with rear entrance (rented at $ 1.220 / month, including utilities, cable, internet), double garage, radiant heat, hrv, central air condition and vacuum. Constructed with red brick, energy star type windows, two fireplaces, gas stove, good quality laminate flooring, etc, etc. He bought it for 328.000, after bargaining for 3 months, initial asking was 375.000. The funny thing is that we are in the same field and his income is almost double of mine, of course there are things like medicare, but the cost of living is much, much lower than Vancouver, gas, groceries, utilities, etc., are all lower. Oregon is a state which is tax free, this also helps. I am considering leaving as of now, its too much to pay for the views, rain, and short summers.”
- Viorelli at VREAA 12 Oct 2011 10:45pm

“An IT recruiter told me there are almost no quality people. He sees the same applicants again and again. He said that he has never seen such a shortage.”

“A software developer that worked on one of my projects has moved to Ontario. Another one announced that his wife is pregnant and once the baby arrives, they are moving back to Europe.
In the past few years, I have been looking for several software developers for my business. The positions were mostly for senior or at least intermediate developers and were advertised on craigslist, BCTechnology and Monster. The funny thing was that for every single position from all sources, the pool of applicants was virtually the same – same people and most of them were not very skilled. Out of those few that were skilled, some left or are leaving soon.
Recently, I talked to an IT recruiter. He told me basically the same thing – there are almost no quality people and he sees the same applicants again and again. He said that he has never seen such a shortage.
So there is the silver lining – if you are a quality software developer, it should be easy for you to find a job, because many quality people have left.
However, salaries for these positions are still lower than in Toronto or Montreal. That may eventually change in bigger companies. I doubt that small companies can afford to pay more, because the owners need to make money too.”
- bubbly, at VREAA 12 Oct 2011 5:47pm

Tale Of Two Nephews – ‘Ouch!’ and ‘Phew!’

“Two anecdotes:
One nephew and spouse bought leasehold condo at SFU. Sold, but bought a SFH in Ridge Meadows at the peak (ouch!).
Other nephew PhD student (married, one child, in Victoria), had a condo. It was a prime leaker candidate(1980′s stucco all over). I put him onto a few RE blogs….gave subtle hints, aka ‘beware!!!!’. They sold at peak, it dropped shortly after. They are now in students’ housing on campus renting.”
- bubba at vancouvercondo.info October 7th, 2011 at 12:01 pm

“I am a PhD still living in the basement suite where I did my undergrad. I gross >100k. I just see Vancouver RE as such a horrible investment right now.”

“I am a PhD still living in the basement suite where I did my undergrad. I gross >100k. All my spare income has gone into the stock market. Am I down? Yes, but only about 5% right now overall. I just see Vancouver RE as such a horrible investment right now, the graph appearing like the left side of the Nortel stock chart pre-bubble burst in 1999. The above post voices many of my concerns that have kept me out so far. Incidentally, to your siblings, if they buy a condo and RE prices double, they can’t just sell and use the profits to buy their dream home, because their dream home has also doubled. Patiently waiting for the BoC to eventually raise interest rates.”
- ‘Basement Suite PhD’, at VREAA, 10 Oct 2011 9:59am

‘Going Going Gone’ – Vancouver’s ‘Generation F’

Jesse alerted us to an excellent article: ‘Going Going Gone’, by Tyee Bridge, Vancouver Magazine, 1 Nov 2011. We will headline some extracted personal anecdotes in coming days, but, until then, we suggest the whole article as a must read, and headline it here for discussion.
Excerpt:
The dilemma many employers face, says Michael Heeney, a principal of Bing Thom Architects, is that once their employees want to have a family in their 30s and early 40s, they leave the city. “When they have one child in a two-bedroom apartment they can get away with it, but as the child gets older, or they have a second child, it really doesn’t work very well here.” When they leave, he notes, they don’t go to Surrey and commute, but light out for distant centres like Chicago. “These are people who are at their absolute most valuable, because they’ve been working in the business for 10 or 15 years. They’re the backbone, the boiler room of your business. And we’re losing that investment. In many ways, our most significant export is talented people.”

Was that it? ‘The Top’? [Possibly] – “They are not as excited, they’re taking a wait and see approach. They’ll put an offer in, and the offer may not be close to the asking price, and then the owner might give them a counter offer, and then the buyer is gone.”

So, was that ‘The Top’? Perhaps it was.

TECHNICAL ANALYSIS:
The average price of a detached home in Greater Vancouver has dropped $115K from a top of $1.22M in May-June 2011. That’s a drop of 10%.
From a technical perspective, however, the price is still in a steep uptrend (light red line), which will be violated if prices drop below about $1.10M next month. Below that there is support (light blue lines) at $1.0M, $935K, and at (as long-time readers know, a level we see as crucial) about $740K.
Price drops will not be in a straight line, and we would not be surprised to see short-lived bounces upwards off any of the support levels. That is perhaps most likely to occur at the $740K support level, before that support then gives way to the downside perhaps 6-18 months later.
We expect a number of factors to add momentum when prices start to fall in earnest. Each violated level of support will bring more sellers to market.
[Chart from the REBGV. For caveats regarding use of technical analysis and average prices, and for prior TA at VREAA, see 11 Sep 2010]

INVENTORY INCREASING; SALES STAGNANT; MOI RISING
“September was a month that recorded the third lowest number of sales in the last 10 years and in combination it had the third highest volume of listings in 17 years.” – Larry Yatkowsky, Realtor, 4 Oct 2011
Months of Inventory for Greater Vancouver roughly 6.6
Over 800 SFHs for sale on the westside.
Prices in October appear, thus far, to be flat compared with September.

NEW BUILD SFH SALES ON WESTSIDE: ZERO
In September, there were 0 (zero) new build SFH sales on the west-side. This is the first time that this has happened in any month over the 17 years of available records. The HST ‘uncertainty’ was immediately blamed.

FOREIGN BUYERS ‘LEVEL OFF’
[Wouldn't that more accurately be 'DROP OFF'? -ed.]
Reporter: “Realtor Lorne Goldman says that he’s recently seen a 30% decrease in sales on Vancouver’s westside. Off-shore buyers from mainland China appear to be leveling off”.
Goldman: “You’re not seeing as many, and the ones that are coming in, are, you know, not as excited, they’re taking a wait and see approach, … they’ll put an offer in, and the offer may not be close to the asking price, and then the owner might give them a counter offer, and then the buyer is gone.” – ‘Buyer’s Market’, Global TV, 4 Oct 2011
[With the drop in average prices, and with simultaneous loonie weakness (down 10% in 6 weeks), these homes would actually look 15%-20% cheaper to foreign buyers. So, why hasn't demand increased, as bulls always claimed it would? Why aren't buyers stepping in to snap up bargains and 'deals'?
It is way too early to tell, but regular readers know that, unlike the bulls, we fully expect demand to drop with falling prices, as demand based on the premise of rising prices will disappear. Buying based on price-momentum will stop. - vreaa]

‘BUYERS’ MARKET’: A MISNOMER [so far]
“Prices are still high, but listings have increased and sales have decreased, turning the Greater Vancouver area into a buyers’ market!” – ‘Buyers’ Market’, Global TV, 4 Oct 2011

Chart shows impressive year over year price changes.
[We have a semantic problem: A 'buyers market' should not simply be defined in terms of sales:listings ratios. That term leads to confusion: If sales are slow and inventory rises, but prices are still 2-3 times fundamental values, describing that as a 'buyer's market' is just a sales gimmick. Sure, sellers start sweating, but buyers are not yet being offered good value. A true 'buyers market' only emerges when prices fall to a range of good value, as determined by underlying fundamentals, or lower. Of course, higher MOIs do translate into downward pressure on prices, eventually. We are possibly starting that process now in Vancouver-ed.]

SALES COMPOSITION CHANGING?
“What’s selling? A bottom end market with only 25% of the Downtown Vancouver [condo] sales over $500,000 and a mere 8% over $1M. August listings and and sales were flat, compared to July. Inventory climbed to 7.2 months. Up from 3.7 in March.” – Maggie Chandler, realtor, ‘Downtown RE Update’, 3 Oct 2011
[This effect may exaggerate 'average' price drops, so caution needs to be used in interpreting average prices, as always. - ed.]

EVEN MORE CONVOLUTED BULLISH REALTOR ARGUMENTS
“We saw a sizeable number of investor class immigrants who came here a little more than 5 years ago, got their contribution, or their investment to Canada back… and many of them are using that money to…uh.. putting that into the real estate market.” – Cameron Muir, BCREA Economist, Global TV, 4 Oct 2011 (1:30 on)

SENTIMENT CHANGING?
“We are here on the front line in Vancouver. It’s amazing the attitude shift in people within the last 2 months or so. People are openly talking about the market here being in a bubble. People I know who were total RE pumpers are starting to look scared. This is going to be epic.” – Drew at greaterfool.ca 4 Oct 2011 11:54pm
“I was sitting and doing my work minding my own business and started hearing my coworkers discuss real estate, and they were literally mad about what’s going on. Amazing, the tides really are turning.” – 4SlicesofCheese at vancouvercondo.info October 5th, 2011 at 1:06 pm

FLAHERTY STILL IN DENIAL (publicly, anyway)
Asked at a news conference in New York (5 Oct 2011) what it would take for Canada to act again to cool the market, Finance Minister Jim Flaherty said: “It will take clear evidence of a bubble in the housing market in Canada, which we have not seen.” – Reuters, 5 Oct 2011

So, a top, yeah, perhaps.

Seller ‘Games’ – “I told him has to drop the price. He says no because he needs a high selling price to pay for a new condo in Vancouver which costs $150,000 more.”

“Six months ago, my wife’s coworker decided to list her 900sf condo near Coquitlam Centre. She decides to rent a place in the meantime to be closer to her kids school. Dumb move. No serious offers even after 2 price drops. Meanwhile she’s bleeding rent and mortgage.
Another guy at work trying to sell his condo in Richmond.
Problem is he has it listed for almost the same price as a similar place in Vancouver. I told him has to drop the price. He says no because everyone wants to live in Richmond and he needs a high selling price to pay for a new condo in Vancouver which costs $150,000 more. He has an offer accepted already with a subject to sale of his old place. Subject deadline keeps passing and the seller keeps allowing him to extend. I wonder how long this game goes on for.”
- kansai92 at vancouvercondo.info October 11th, 2011 at 10:35 am

Bartender’s Parents Buy Her A Condo – “A lot of my friends are like: “You’re just paying your parents back”.. I’m like, “No it’s not that simple, they are pretty strict”. You know, they’re just like a bank.”

Tanja Beja, Global TV Reporter: “Vancouverites already have the highest debt levels in the country. Average Vancouver Income is $45K, but it takes almost $72K to qualify for a standard condo. So how are first time buyers getting in? This mortgage broker says that about half are turning to ‘the Bank of Mom and Dad’.”

Ryan McKinley, Vancity Mortgage Broker – “It seems there has been more of an increase… as property values have risen.. parents are definitely involved in helping their kids out in any way they can.”

Beja: “That’s how bartender Jenny Fong got her place. Lacking the savings she needed Jenny’s parents bought her this condo. She now pays them monthly rent.”

Jenny Fong: “I don’t have a lot of lee-way… a lot of friends are like: “you’re just paying your parents back”.. I’m like, “No it’s not that simple, they are pretty strict”. You know, they’re just like a bank.”

VO: The difference is there is no interest, which can add hundreds of thousands of dollars.

- Anecdote extracted from ‘Generation How?’ clip on Global TV, 4 Oct 2011 (3:00 onwards). [Thanks to Greenhorn, for the video archive]

Let’s hope that Jenny’s parents aren’t overextended. It would be interesting to know their ages and their total net-worth:RE ratio.  – vreaa

What You Get For $325K In Vancouver – “Maybe a very small, really old, wood-frame apartment, maybe, on the bottom floor, looking at a dumpster, maybe, I’m not sure, but, yeah, really nothing.”

Tanja Beja, Global TV reporter:  “To minimize her payments, Catherine Green is moving out of downtown and into New Westminister, where she got a two bedroom and den for $324K. In Vancouver, that wouldn’t have bought much.”

Catherine Green:  “Maybe a very small, really old, wood-frame apartment, maybe, on the bottom floor, looking at a dumpster, maybe, I’m not sure, but, yeah, really nothing.”

Beja: “Instead of a dumpster, she’s now looking at the Fraser River.”

- Anecdote extracted from ‘Generation How?’ clip on Global TV, 4 Oct 2011 (3:00 onwards). [Thanks to Greenhorn, for the video archive]

Activism? A Reader’s Posters – “You’re Poorer Than You Think”.

Regular reader and commenter Royce McCutcheon has designed and uploaded a template and a series of posters to flickr, designed to educate citizens about the Vancouver RE market. Find the posters HERE.  Royce welcomes alternative design and slogan suggestions. [9 Oct 2011]

“Friends Don’t Let Friends Overdose On Mortgage Debt!”
How’s that? -ed.

[This follows on our recent post (7 Oct 2011) debating suggested forms of 'activism'. We strongly support educating the general public regarding the speculative mania in RE. We do not condone lawlessness in doing so, as that distracts from the conveyance of information.]

Sensible Responsible Renter – “My mother-in-law, 63, a 200k mortgage on her condo, looks down her nose at where we live and thinks we can’t provide for our coming first child.”

“I rent 3 bedrooms north of King Ed, between Main and Cambie for less than 1500/month. Admittedly it is an older ‘character’ house and gets a little drafty in winter, and would likely be torn down if sold, but we like it and the location can’t be beat.
My wife and I each make 100k+. I am a shareholder in the engineering firm I work for. We have 400k plus in liquid assets and no debt. Modest car is paid for and credit cards balance is zero every month. When my Dad was terminally ill last fall I was the power of attorney and still am for my mother’s affairs.
Our income and assets are greater than those of my wife’s two sisters families combined, (one owns a condo on the King George highway in Surrey and the other lives in Iowa) and my mother-in-law, (who at 63 has a 200k mortgage on a condo and is lucky she has a gov’t pension to fall back on) looks down her nose at where we live and thinks we can’t provide for our impending first child. We will ponder this while we spend a month in Maui after our child arrives.”
- Jross at VREAA 10 Oct 2011 at 12:35pm

Financial Planner Looking For $400K Condo – “I expected the Vancouver market to be really tough to get into, but the reality is hitting me even harder. I may need to rent while I earn more money for a bigger downpayment.”

Announcer: “Susie Shin is looking for a place to call home. The 33 year old moved to Vancouver from Toronto. She works downtown and would like to live nearby. But Shin knows in this city her money isn’t going very far.”

Susie Shin: “I’ve been working for awhile, I’m a professional, I figure at this age I should be able to afford a decent place downtown, but in Vancouver it’s a bit tough.”

Realtor: “So this is a one bedroom and den…”

Tanja Beja, Voice Over: “On Shin’s wish-list, about 700sqft, and a view. Her budget of $400K won’t get her both. But Shin isn’t spending a penny more: she’s a financial planner, and she’s calculated what she can afford, something her realtors says young buyers don’t do often enough.”

Shin: “I expected the Vancouver market to be really tough to get into, compared to Toronto… the reality is hitting me a little bit harder, you know, that I may need to rent for a little while I earn more money to get a bigger downpayment on a property.”

Tanya Beja: “So, for now, the house hunt in an overheated market continues.”

- Anecdote extracted from ‘Generation How?’ clip on Global TV, 4 Oct 2011 (3:00 onwards). [Thanks to Greenhorn, for the video archive]

It doesn’t look like this prospective buyer is anticipating any price pullback.
She is putting off buying in part out of being sensible (she has set a hard ceiling on what she can afford).
Her unplanned and forced delay, to save for a “bigger downpayment”, will likely, by complete chance, work in her favour.
It’ll be very interesting to see how buyers such as Ms Shin behave when prices drop by 10% or 15% or 20%. Will they jump in, or will they start questioning the wisdom of overextending themselves to buy what will still be very expensive RE? – vreaa

North Vancouver Condos – “Our building is 40% occupied and next door, 20%. Like ghost towers, elevators are never busy and everybody has 27 parking spaces.”

“Living on the waterfront in a North Vancouver leased 1 bedroom 565 sq. ft. condo. We pay $1,600 per month rent, the owner’s are from mainland China and paid about $535,000 for the unit. Nice location but very cheaply built….granite and stainless but cheap windows, carpets and accessories, going to be lots of strata rate hikes now that the building is getting out of builder’s warranty. There are two identical towers each with 86 units each, our’s has been on the market for 2 years and next door for 1 year. Our building is 40% occupied and next door, 20%. Like ghost towers, elevators are never busy and everybody has 27 parking spaces. Vancouver is stagnant no matter what real estate boards, Global BC and developers say.”
- ‘kilby’ at The Economic Analyst, 7 Oct 2011 [hat-tip to Ben Rabidoux for the anecdote; and ongoing thanks to Ben for his blog. Take a look at it if you don't know it; excellent broad analysis of Canada's housing market.].

“I recently gave up on Vancouver and moved to Silicon Valley. The average salary where I work is around $100k. Yet, the parking garage at work is filled with 10 year old Hondas, Volvos, etc.”

“I recently gave up on Vancouver and moved to Silicon Valley. A few things struck me as notable here. First, the average salary where I work is around $100k. This is substantially higher than the average Vancouver family income. Yet, the parking garage at work is filled with 10 year old Hondas, Volvos, and the like. Sure, the guy two cubes over has a Porsche, Ferrari, and two airplanes, but the vast majority of people aren’t flashing their money around. The concentration of new Mercedes and BMWs in Vancouver is much much higher than here. Lastly, houses here are more reasonable sizes. They average probably 1200-1400 sq feet, as opposed to the monsters in Vancouver.”
- Ex Vancouver at vancouvercondo.info October 7th, 2011 at 4:43 pm

“Tsawwassen Be Damned” ['Vancouver RE-Verse'; Found Poem]

I live in East Vancouver
and I could drive out to Tsawwassen
in less time than it takes for me
to creep west in my morning
bumper
to
bumper
convoy of the damned.

- SR, quoted at VREAA 6 Oct 2011; formatted and titled by E.G. [7 Oct 2011]

A post in the very, very occasional ‘Vancouver RE-Verse’ [Found Poems] series.
Poems are completely unedited but for layout.
Prior examples here.

Spot The Speculators #54 – Couple Early 60′s; Home $750K; Recently Purchased 2nd SFH $1M; Total Net-Worth $950K; Percentage Net-Worth In RE 184%

…“This anecdote comes courtesy a family friend. A bit of background is perhaps appropriate here. Family immigrated from Asia over 20 years ago and has amassed equity of about $1MM or so. Couple is in their early 60s. Currently they live in a $750K house with basement suite and have about $400K invested in equities and cash. The house has a $200K VR mortgage.
…Last weekend they bought a $1MM 3 year old house which has 4 br up, 3 br down that can be converted to basement suite. They were pre-approved for $800K mortgage. This is based on them renting out part of the house and one of them working. The other is retired.
…They are thinking about selling their existing property (they also are thinking about renting it out if they can’t sell for the price they want). Their plan is, when they retire in a few years, to liquidate the other house and pay off their soon-to-be primary residence’s mortgage. They will be collecting a meagre CPP and OAS, and plan to supplement these with rental income from the basement. …They simply do not want anything to do with equity/security markets. There is little cash flow to be had for low risk these days, so they claim, and previous attempts to make money through stock/bond markets have produced poor results relative to what their peers have amassed in real estate.
…They are also aware of a few friends of theirs who have recently downsized into townhouses/condos from detached dwellings where they were renting out basement suites. It turns out these people were amassing an extra $15-20K per year in undeclared income on their suites that is no longer possible through downsizing and are now ruing the move. So the situation they now face is that they want a way of producing secure income, tax-efficiently — never mind they can get 5-6% tax-efficient divvies — as well as collecting CPP and OAS. They also want the ability to host visiting family in a larger home.
…So there’s an ongoing element of hedging going on in this market, where people are concerned another leg-up in prices will render their desired retirement home unattainable. They are doing the maths now where they can, with such a purchase, eke out a retirement in a comfortable and relatively expansive home with some rental income. After this purchase, in a few years, they will have a few hundred K of liquid savings and purchased a $1MM home.
…This family will not be living well — relatively little income — but they will be stable and comfortable. They do not *have* to sell, so long as their living/medical/repair expenses remain contained. What’s scary isn’t that this family is so heavily invested in real estate, it’s first that their incomes are low enough they will be relying on OAS despite considerable equity. Second they will be spending very little in the years to come, hardly a boon for the local economy by any stretch. One wonders if Vancouver is prepared for the drop in consumption that could befall an increasingly house-poor city in the coming years.“
- jesse, at VREAA, 10 Oct 2011 4:48pm

So:
Couple in early 60′s.
Current home: $750K market value, $200K VR mortgage (plan to sell “in a few years”, but, for foreseeable future, holding.)
Second home: $1 Million market value, $800K mortgage
Other investments: $200K equities/cash ($400k minus $200K downpayment on second home).
Net-worth: $950K
RE being carried: $1.75 Million
Percentage of net-worth in RE: 184%
Thoughts:
1. Thanks for the remarkable story, jesse.
2. The couple have 184% of their net-worth in RE at a time in their lives when they should probably have no more than 35%-40% therein. These guys are buying more when they should be scaling down. This act is a bizarre product of the psychological climate regarding RE in this town.
3. If RE prices drop 25%, they lose almost half of their total net-worth; a drop of 50%, and this couple are almost completely wiped out. They likely see the chance of any significant price drops as being non-existent. If they lose 50-100% of their net-worth, they will be emotionally devastated; it will colour the rest of their lives. They will never recover. They are playing with far bigger stakes than they imagine. [note to fred - that's 'stakes', not 'steaks' -ed.]
4. They are speculators; they are speculating heavily that prices will remain strong. But they would likely be shocked and perhaps offended to hear anyone describe them as speculators. They don’t realize it but they are gambling, as sure as if they took their money and went to a casino, and put it all on Red. In fact, a successful professional gambler would likely calculate that the casino option is a better bet than holding this position in Vancouver RE. Professional gamblers understand risk; this couple do not.
- vreaa

Getting The ‘Financial Intervention’ From The Family RE Cult – “There’s a real blind spot when it comes to understanding the true cost of owning vs. renting. It’s impossible to have a rational, informed discussion when the people you’re talking to have their own set of imaginary facts.”

“I was recently ambushed by my family and endured what can only be described as a financial intervention. I got the “cheaper than rent!” lecture, followed by “get on with your life” and “it’s part of growing up”.

I am the lone holdout among my siblings, all of whom recently purchased “cheaper than rent” strata units in the suburbs that cost far more than their old rental units in town. Their mortgages alone cost more than they used to pay in rent. And of course this does not include strata fees, insurance, property tax, repairs, maintenance and any potential future increase in mortgage payments if interest rates go up in the next 3 decades.

When I pointed this out I got a blank stare followed by “but we don’t want you renting forever”. There’s a real blind spot when it comes to understanding the true cost of owning vs. renting. It’s impossible to have a rational, informed discussion when the people you’re talking to have their own set of imaginary facts. Like when they told me that “real estate doesn’t go down in price”, which is demonstrably false. When I mentioned that it had in fact gone down many times in the past and we happened to be witnessing the greatest global real estate correction in living memory I was met with more blank stares. They were clearly embarrassed for me that I had such an odd set of beliefs and eventually just gave up and talked amongst themselves about their futures flips and dream houses they would build with their imagined profits.

It should be noted that all of them purchased in the last 18 months, and none of them have sold or profited. Two of them arrived in cars gifted by my parents, as they can’t afford a car now. The fact that they can’t afford basic transportation now that their “cheaper than rent” condos are draining their bank accounts is lost on my parents who rewarded them for “getting on with their lives”. Two of them also spent most of the last year without functioning kitchen appliances and could not cook and/or store perishable food items to feed their families because again, the “cheaper than rent” condo cost so much they couldn’t even afford a $100 craigslist special. And again, they were bailed out when Santa Claus delivered shiny new appliances. I guess that’s also “part of growing up”.

I never myself bring up the subject of real estate around them, but it is THE topic when we’re all in the same room together. It didn’t used to be this way. And most of the people in the room have worked or did work for a financial services company so they should be able to do the basic math and realize their error.

I’m not against owning, and I don’t believe that real estate needs to be cheaper than rent to be worth buying. Sometimes when you pay more you get more. And I understand that they’re building equity so long as the prices stay high and they do the required repairs and maintenance to at least keep the place worth what they paid for it. The problem right now is that the home equity being built up is more than cancelled out by the drastically higher costs of owning. They’re betting on indefinite price increases because in reality they can’t afford these places and will need to sell sooner rather than later. They’re all talking about selling even though they only bought in 2009. And they all imagine they’ll buy something bigger and better with their profits.

As for my parents, I don’t know what they’re thinking. This is an emotional issue for them and they feel like realty savants because their modest home is worth more than they paid for it in the 80s. They’re financially bailing out their kids who borrowed house-sized mortgages for their starter condos, and pressuring their other kid to do the same. I don’t get it.

- ‘nobody you know’ at VREAA, 9 October 2011 at 11:46 am

A wonderful account; many thanks ‘nobody you know’.
It takes an immense amount of personal fortitude to keep your head when all about you are losing theirs.
You eloquently describe what other Vancouver housing bears have experienced in various forms of social interactions.
You also describe the inherent speculation in all purchases (“They’re betting on indefinite price increases”).
- vreaa

50%-Off in West Kelowna

- an image from ‘Ben’, sent to greaterfool.ca, headlined by Garth Turner 9 Oct 2011; saved here for the chronological record

By the way, Nemesis previously headlined this development in ‘PostCardsFromTheBlastRadius #8 – The Okanagan Bust – ‘Tuscany Villas’, Shields Down!’ [VREAA 15 May 20111]
(excerpt: “We..Are..The..Borg!
Lower your shields and surrender your Deposits!”)
[Prescient. Perhaps that should have been "Lower your deposits!" -ed.]

This all means, of course, that peak to eventual trough in West Kelowna will end up being a lot more than 50% off.
Coming soon to a place near you. – vreaa

For an article on the Kelowna condo developer, see ‘Too Big Too Fast?, kamploopsnews.com 7 Dec 2010.

“I was losing sleep over my real estate becoming a capital trap, so we moved; sold in North Vancouver to rent in Kelowna‏.”

“I was losing sleep over the my real estate becoming a capital trap,  and of loss of equity, so we moved; sold in North Vancouver and rented in Kelowna‏. Attached is my calculations about how much money I would lose if we owned in Kelowna vs renting.”

[Monthly payments assume 100% financing at 4.5%, 25 year amortization, used above.]

“Now, further calculations taking into account the effects of Kelowna price drops”:

[**Plus not realizing a decrease in valuations of 10% this year.]
[Rent is paid in these calculations.]

Summary
By renting a house worth $500k instead of buying, we save $68,000 over 1 year. “

- from ‘John’, to VREAA via e-mail, 1 Oct 2011 [Thanks John. -ed.]

It’s Official: No Longer “Best Place On Earth” – “Best Place on Earth” was a “broader brand” used only in B.C. “to help motivate British Columbians.”

In April 2007, VANOC CEO John Furlong (left) and then Premier Gordon Campbell unveiled licence plate naming B.C. ‘The Best Place on Earth.’

“BC No Longer Calls Self ‘Best Place on Earth’.
The boast is vanishing from official branding. Where did it go, and why?
—
The “Best Place on Earth” and the sunshine-and-mountains logo (is it setting or rising?), was launched in 2005 and registered with Industry Canada’s Canadian Intellectual Property Office the following year. It appeared on ICBC’s Vancouver 2010 Winter Olympics licence plates in 2007, replacing the traditional “Beautiful” above a photograph of Mount Garibaldi and the VANOC inukshuk logo.
But something funny happened on the way to the biggest show on Earth. When Campbell put on his salesman-in-chief hat and attended the Beijing Olympics in 2008, he called British Columbia “Canada’s Pacific Gateway” instead of the “Best Place on Earth.” With a pinch of sarcasm, I asked him, why? If B.C. is really the best place anywhere, why not tell the world?
First the world has to find B.C. on the map, he said.
Jobs, Tourism and Innovation minister Pat Bell offered few hints about the slogan’s fate when he was grilled by NDP critic Spencer Chandra Herbert in a May 5 budget estimates debate.
“Yes, I am proud of the province and I think it’s the best place on earth, but it was probably not the best way to attract people from other parts of the world who think their little section of the world was the best place on earth,” Chandra Herbert said to Bell. “I’m just wondering: is ‘best place on earth’ shelved for now, and we’re now not going to see that anymore, and we’ll see ‘Super, natural B.C.’ in its place?
Bell answered that “Best Place on Earth” was a “broader brand” used only in B.C. “to help motivate British Columbians.”
—
Since Premier Christy Clark’s March swearing-in, the bold advertising slogan of the Gordon Campbell era has slowly and quietly disappeared from government websites and letterhead. You can still find it if you look, but blink and it could be gone.
How could a province with a misery-filled neighbourhood like the Downtown Eastside and a nation-leading child poverty rate ever call itself best-on-Earth in the first place? How did the politicians and bureaucrats decide to deep-six the slogan?
The decision, I am told, was not even of the “back-of-the-napkin” variety, because no scrap of paper was used to record it.
- Bob Mackin, TheTyee.ca, 4 Oct 2011
[hat-tip Nemesis]

So, now we understand. We have always been puzzled by the claim, this explains all.
The slogan was not an actual claim that BC was the “Best Place on Earth”, it was used “only in B.C., to help motivate British Columbians.”
So, citizens of BC, how does it feel to have been treated all these years like children; like the second to last team in the local Under-7 hockey league?
The real problem is that many folks lapped it up. And, relevant to us here, it helped push them to reach for that much more debt, so they could overextend even further to buy that much more unaffordable ‘BPOE’ real estate.
“C’mon, you can do it, you can do it… Bid another $75K beyond your means! You can do it! Stretch, stretch…!”
- vreaa

—
UPDATE: More on this story from Doug Ward, Vanc Sun, 7 Oct 2011
“My initial reaction is ‘hurray,’” said Peter Williams, director of Simon Fraser University’s Centre for Tourism Policy and Research, about the slogan’s demise.
“It was presumptuous. If it was meant to endear people to us, it probably wasn’t going to do that given that a lot of other people live in other parts of the world that are pretty nice. And probably quite competitive to B.C. in many senses.”
[Off with his head! -ed.]
Government communications director Greer said the slogan was aimed at British Columbians and not for a global market. “It was more of in-province pride thing.”
[See: appropriate for 6 year olds, above. -ed.]
“Canada Starts Here” is also the brand used in the marketing of Clark’s new jobs strategy.
[Actually, wouldn't it be just as accurate to say "Canada Ends Here" ? -ed.]
B.C.’s tourism brand continues to be the venerable “Super Natural British Columbia.”
SFU’s Williams said the “Super Natural British Columbia” brand has gone through “many reincarnations but it’s held up pretty well and I thought this ‘Best Place On Earth’ was creating some confusion in the marketplace that we didn’t really need.”
[Whereas "Super Natural British Columbia" was a big hit with visiting goblins, gremlins, elves and apparitions. -ed.]

“I would love RE to go up so I could sell my money pit of a house and get the hell out of here.”

“When I told me RE agent what the President of the Real Estate Board said [had recently made bullish statements] he rolled his eyes and said – “Why do they keep saying things like that?” My agent is very well known and has been in the business 20 years.
It makes RE agents look like used car salesman.
BTW I am a homeowner and would love RE to go up so I could sell my money pit of a house and get the hell out of here.”
- Victoria at vancouvercondo.info October 7th, 2011 at 7:44 am

More seller psychology: sell when it goes up; sell when it hits ‘x’; sell when your cash-out is a home run; sell when it sells for what the house across the street sold for last summer; etc.
- vreaa

“Just spoke with a client of mine up in 100 mile House. He was saying that he is waiting for price recovery to sell some property.”

“Just spoke with a client of mine up north in 100 mile House. He was saying that he wants to buy some more stock but he has to wait to sell some property until it recovers to where it was earlier in the year. I see this as a pervasive example of the mindset that people have with houses as well as the stock market which is that they won’t sell until they’re even or up on it, when in many instances you should sell for a small loss early [rather] than have to wait for the market to come back, which can take years. And sometimes it never comes back.”
- buffates at vancouvercondo.info October 6th, 2011 at 10:13 am

As many local RE bulls claim, sellers are reluctant to drop prices below levels that they have previously told themselves their property was ‘worth’. Initially, that is. Once downward price momentum sets in, ‘price stickiness’ loosens up, as overextended owners anxiously try to realize something of their previously imagined profits. – vreaa

Calls For ‘Activism’ Regarding State Of Vancouver RE Markets – What Action, Exactly?

A number of thoughtful readers have made suggestions, increasingly so in recent months, that we all somehow attempt to “do something” regarding the state of Vancouver’s housing market.
‘mjw’s personal anecdote [7 Oct 2011] about two UBC professors leaving for Alberta as a consequence of housing prices, concludes with “I think that some sort of activism is needed to highlight and make people aware of the game that is being played out.”
Recent suggestions by ‘Vesta’, ‘jesse’, ‘Gord’, and others, were discussed in a thread headed ‘Consequences, Intended and Otherwise‘[14 Sep 2011].
Today at VREAA, Vesta again calls for some kind of action, and talks of “a small group starting to coalesce”, of “someone in this city very involved in politics and very concerned with what is happening”, and again asks people to “write/phone City Council, MLAs, etc”.

Initial thoughts:

Thanks, Vesta.
We think you know that we are pretty much on the same page as you in hoping that the housing distress can be resolved. We would very much like to see Vancouverites being able to get on with productive activities that are not hobbled by excessively draining RE costs. Housing costs are at the very least a distraction, sometimes a disaster.
We do believe that getting the word out, educating, is the very best form of activism.
But, other than describing what we see, what is the desired ‘message’? On this we are unclear.
Our concerns are that a great deal of coming distress is ‘baked into the cake’… There is no way we could hope to ‘educate and extricate’ the City of Vancouver from this mania without a great deal of pain.
We can educate those who will listen such that they try to get out early, but only a very small minority would ‘escape’. And, realize that every ‘escapee’ would have to sell to someone who then takes the subsequent fall… so there would be no resultant net gain for the group.
Understanding the nature of speculative manias, we see no way forward but for a flushing-out of all speculation from the system. This will result in a price crash of 50%-66%, and general (temporary) mayhem for the economy and the society. Many will be devastated by that outcome. As we wrote some time ago, a real estate bear market will be Vancouver’s defining social and economic event for this decade.
There simply is no way of landing this bubble ‘softly’… there never is. Never.

Having said that, what is the very best overall outcome we could hope for?
How do well meaning citizens who understand what is going on direct the ‘action’ of any proposed ‘activism’?

We are very, very strongly opposed to any actions that would further ‘socialize’ the risk of being in the housing market. We would see such action as bordering on criminal. Such mispricing of risk has been an important cause of our bubble in the first place. We are strongly opposed to ‘bail-outs’ of any kind. In fact, we believe that the government should back even further away from back-stopping speculation, by tightening CMHC-backed lending. Buyers and lenders have to take full risk for their actions. So, please, no suggestions that public money be used to attempt to bankroll a soft landing in any way: such action would further punish the prudent (and, by the way, would be doomed to fail before it even started).
But, this may not be very helpful: we’re telling you what we don’t want.
What do those calling for ‘action’ suggest we call for?
- vreaa

Professors Cross Threshold – “After this fiasco we are completely done. I phoned U.Alberta today and told them that we will take the jobs if they offer them to us. In our view this city is being rapidly ruined.”

‘mjw’ writes, in two e-mails to VREAA, 5 & 6 Oct 2011 -
..“What happened to us this past weekend offers a glimpse at the ridiculous game being played out on the westside.
..My wife and I are both profs at UBC, mid 40′s and have been trying to “upgrade” from a duplex on the westside to a SFH in Kits in order to get more space for our family, while retaining a good school district and a short commute. I wrote a post on VREAA a few months ago [12 May 2011] indicating that we are applying for academic jobs elsewhere in Canada. However, finding comparable work for two senior academics is a challenging enterprise, and takes much time to sort out. To make a senior hire in academics is often a long process, and the department needs to know that the candidate is serious on accepting if an offer can be generated. Fortunately, my wife and I are both at the top of our professions and we have been “head-hunted” a few times since 2000, but on those occasions had decided to stay in Vancouver. Fortunately, we both have interviews at U.Alberta in November, and we are pretty confident that this is where we will end up.
….In the interim, we continue to look off and on in Kits with the idea that if we are able to find something decent around the 1.5M price range we might just suck it up and try to buy it…
….In this light, this past weekend we went to the open house at 2655 Waterloo street [MLS number V912486] advertised at the magic number 1.488M…
….If you look tonight [5 Oct 2011] you will still see this as the advertised price. It was an okay house, not great by any means, no dining room, a 10 times 11 master, nanny suite rather than a basement suite, low ceilings etc…. The presenting realtor was so obnoxious that I was worried that my wife might launch at him during the open. The house was significantly less desirable than 1.6M homes that have sold in our neighborhood since last spring that we have seen in (and were unsuccessful in getting during a bidding war).
….Anyways, we made an offer in the low 1.5M’s, and were one of 3 offers presented this past Monday at 1pm. I have a sense from what our realtor told us that we were the highest bidder.
….Got a call from our realtor on Monday evening saying that they were rejecting all offers, as they really wanted a price of 1.698M (which is simply 210,000 more than the price of 1.488M advertised on the weekend of October 2nd). You can see the new listing and the new price on the realtor Julia Lau’s website (scroll down to 2655 Waterloo street listing).
….On Monday evening the listing realtor contacts our realtor and asks “are we interested in purchasing at 1.698M?”…. My first thought was that someone clearly has transposed some digits?… surely this is a joke?… Anyways, it is no joke, this is precisely the game being played here…. and perhaps is being played out in many other “transactions” on the west side…. A complete waste of everyone’s time (writing offers, visiting open houses etc…)…
….After this fiasco this past week we are completely done. I phoned U.Alberta today and told them that we will take the jobs if they offer them to us.
I don’t know if this is normal procedure; advertising one week at 1.488M, and then the next week at 1.698M… but this to me is a clear sign that there is rampant speculation and that buying bricks and mortar has turned into an auction…. In our view this city is being rapidly ruined…..
—
….“Renting a SFH on the westside is very unstable; places are being flipped like burgers; there would be little stability with regards to schools for the kid. I have watched my graduate student have to move 4 times in the past two years owing to the fact that his basement rental (shared with another student) is in a house that is being flipped. The overwhelming feeling is that at this stage of our lives it should not be so difficult. We will have an easy go in any other place in Canada…..
….I think that some sort of activism is needed to highlight and make people aware of the game that is being played out. If this type of behavior receives more “press”, hopefully individuals will choose to boycott the system until some sanity returns. I do hope that some maverick decides to run for city councilor who can really communicate the difficulty faced by so many families. I think it would resonate with so many people…..”
—

A remarkable story.
The loss to Vancouver of two bright professionals, and their family.
One example of the misallocation of human capital caused by the speculative mania in housing. It is crippling our city.
Only the most blasé RE bull will be able to read stories like the one above without feeling concern for the health of our community.
- vreaa

“Did it ever hit close to home. Add me to the list of young families looking at options East of the Rockies.”

“Did it ever hit close to home. I too am under 35 with two little kids and can relate 100% to the families interviewed. Add me to the list of young families looking at options East of the Rockies. They said it best when they said it doesn’t feel like you are making any financial progress. How can you with the outrageous cost of living here? For our generation the current path, with house prices the way they are, is financial failure…the type that you recently featured when profiling some 40 somethings. There literally is no money left at the end of the month after mortgage and bills. With both wifey and I working and earning over $120k combined, we are running on a financial treadmill. I don’t know how young families can manage here. A negative savings rate might offer an explanation. There is more to life than putting all one’s $ into a house in a region that is cold and wet basically 10 out of 12 months a year. Born and raised here but wanting out now. The nice cultural fabric we once had here has been shredded also in recent years, to add insult to injury.”
- ‘Metro Van Observer’ [greaterfool.ca 5 Oct 2011 12:54am] responding to stories on Global TV about young couples leaving Vancouver

“Our youth is getting screwed over at the expense of realtors, developers, and a government that’s all too eager to bend over backwards and let a rampant real estate market guide itself.”

“Our youth is getting screwed over at the expense of realtors, developers, and a government that’s all too eager to bend over backwards and let a rampant real estate market guide itself.”
- JCVdude, youtube, 24 Jan 2011 (quote at 3:15 on video)

Somehow we missed this video when it was posted earlier this year. It covers many of the commonly discussed issues relating to the speculative mania in Vancouver housing. Good production values for an informal video; nice general Vancouver footage; worth the watch/listen. We are impressed with JCVdude’s very reasonable and controlled expression of his frustration. – vreaa

Victoria – “One realtor openly stated the one home was overpriced but she was just following the direction of the seller.”

“I was out to a number of open houses on the weekend here in Victoria. With the exception of one, every home was vacant. And no there was no rush of buyers having a look. One realtor openly stated the one home was overpriced but she was just following the direction of the seller. In another the realtor said it was a buyers market with inventory at a 20 year high. He looked sad and forlorn.
There are For Sale signs popping up everywhere here; I don’t think prices are going to rise anytime soon.”
- Bobby at greaterfool.ca 5 Oct 2011 1:48am

UBC Faculty and Staff Housing Anecdotes – “As a recently recruited Assistant Professor, I feel I have no hope of supporting a family and purchasing a house in Vancouver. I lose a great deal of sleep over trying to make ends meet. This is holding me back from making research and education advances.”

Following up on our recent post, ‘UBC Staff And Faculty Housing Demand Study’ [VREAA 19 Sep 2011], here below is a series of first- and second-hand personal anecdotes excerpted from UBC faculty and staff comments posted at ubc.ca 27 Sep – 3 Oct 2011 as part of a discussion UBC is encouraging in order to develop a ‘Housing Action Plan’. [Many thanks to David for forwarding us the link].

It is perhaps remarkable that not one of the discussants appears to address the giant over-arching truth: that a speculative mania in housing is the cause of the problem. On the contrary, many of the posters explicitly state the belief that local housing prices can do no other than power forever upwards.
Once the housing bubble is recognized for what it is, it follows that only with an implosion of that bubble will any housing challenges be meaningfully addressable. Housing in Vancouver is currently two to three times overvalued, as determined by fundamental measures such as incomes, rents, and GDP. The mania will end, as all manias do, with substantial price drops. This will likely occur not as a result of policy changes, but as a result of market dynamics. Indeed, such an implosion may have already begun.

Under the shadow of this mania, the vast majority of ‘affordable housing’ plans in Vancouver are akin to rearranging the proverbial deck-chairs on the Titanic; to blowing into a hurricane. Any such plans will be incapable of addressing the powerful negative forces of the mania. Getting 10% or 15% assistance purchasing extremely overpriced RE still results in it being very, very overpriced.

The coming Vancouver RE price deflation will go a long way to solving Vancouver’s (and UBC’s) housing challenges. Imagine how different the UBC discussion will be when prices are 50% lower. Or even lower than that. Yes, there will still be a need for sensible policy about campus housing, and perhaps a need for housing assistance plans to attract desirable faculty, but housing would no longer sit centre-stage, where it is now, and where it certainly doesn’t belong.

Granted, a real estate price crash will at the same time result in other significant problems for Vancouverites, many of whom are over-invested in RE. Our local economy will suffer greatly, as it has become sorely over-dependent on activity related to real estate. This is, unfortunately, what happens when a massive speculative mania plays out. It’s baked into the cake. UBC has, of course, been an eager bubble participant, via large for-profit RE development projects. While showing concern about the cost of housing, the university, ironically, also has an economic stake in the bubble being sustained. This is why we haven’t seen (and don’t expect to see) strong statements truly critical of the status quo coming from within UBC itself.

Regardless, the personal stories below are noteworthy, and the detrimental effect that the housing mania is having on academic endeavours is apparent.
- vreaa

—

As an Assistant Professor that was recently recruited to the University, I feel like I have no hope of supporting a family and purchasing a house in Vancouver. I lose a great deal of sleep over trying to make ends meet in Vancouver and I feel this is holding me back from making research and education advances at UBC. I believe housing is only a symptom of a systemic problem at UBC: very poor support of young academic faculty.
- G.T.T., October 1, 2011 at 9:36 am

Very recently, I lost a dear and outstanding colleague to Oxford. He confided that one of the main reasons for him moving was that Oxford offered him the opportunity to own a home near his work (The university partners with faculty to ensure they can own a place near campus). In Vancouver, he could not see how he would ever afford a place for his family, including a newborn.
I too am about to start a family. I have been incredibly worried about moving from my small apartment to a bigger place. Paging through the real estate ads is depressing. It is clear that my salary and consulting fees are simply not enough. In this sense, it is heart warming to read about colleagues with the same concerns and about UBC leaders trying to alleviate the problem.
- Nando de Freitas, September 29, 2011 at 4:12 pm

If I had known about the future housing situation back in 2004 when I was hired, I would have probably reconsidered my decision to come to UBC.
- L. Van Waerbeke, Faculty of Science, [September 30, 2011 at 10:45 am], who also suggests “create a parallel UBC housing market where sells/buys can only happen between UBC employees”.

I am a graduate student at UBC and my stipend is $21,000. I have to live one hour from campus to pay for rent that is $800 per month. After my health insurance and phone bill, I barely have enough money for food. This summer, I calculated that I could spend only $10 per day for food. To top it off, the on-campus housing is more expensive. Shouldn’t campus provide CHEAP housing for students? This makes me want to leave UBC…
- Anonymous, September 30, 2011 at 3:46 pm

I live in East Vancouver and I could drive out to Tsawwassen in less time than it takes for me to creep west in my morning bumper-to-bumper convoy of the damned.
- SR, Library, September 30, 2011 at 3:45 pm

My salary is competitive compared to performing a similar job at a non-profit or charity but Vancouver is just too expensive.
As a staff member with two young children I have been despairing for a while. My paycheque after deductions covers rent and both kids at UBC daycare ($1300 for 3-days/week) I am left with a couple of hundred dollars each month to pay for rising costs of food, clothing, vehicle expenses etc. We’re just able to make it with my wife’s part-time, self-employed income but if she doesn’t work (as happened this summer) we’re running up the line of credit with the bank just to keep food on the table.
As rents have risen and our family has grown we have moved further and further east. We rent a small, run down 2-BR East Van bungalow for a bit less than what a 2-BR apartment would go for on campus. We have privacy, space and a nice vegetable garden in the yard but it means I spend at least two hours on bike or bus each day commuting instead of with my family.
As long as UBC’s definition of affordable housing is slightly below west side of Vancouver market rates, most staff will be shut out.
- I.P., Staff, Faculty of Arts, September 27, 2011 at 11:59 pm

When I moved to UBC, the faculty housing assistance was not sufficient for me to enter the housing market. The assistance options have improved slightly since then, but are only available within the first seven years, and I am no longer eligible. Meanwhile, the housing prices in Vancouver have become prohibitive, having doubled to tripled over this relatively short time. The UBC Village Gate Homes rentals on campus are very nice, and are extremely convenient, even though the rental rates are not really subsidized.
- A.F, Associate Professor, Science, October 3, 2011 at 3:32 pm

We know several faculty whose behaviour changed dramatically once they moved off-campus. Owing to traffic and the loss of efficiency in terms of writing, they started coming in only 2 days a week. Gradually, they started avoiding students and meetings, the opposite of what they were doing for years when they lived on campus. The incentives became too strong. The situation also creates perverse incentives towards devoting more and more time to consulting and non-scholarly activities, or accepting visiting positions elsewhere, as soon as April comes along. Gradually, faculty who stay at UBC will find themselves becoming helicopter professors, dropping in for classes and crucial duties, and rushing off to earn money or do their long commute home. In sum, there are many benefits that are externalities and not integrated into the pure monetary equation.
- Yves Tiberghien & Darrin Lehman, October 2, 2011 at 6:04 pm

In our own case, we would like to move to a larger 3 bedroom unit on campus. But there are none available, for almost three years now.
Rent, currently charged by UBC Properties is around 15-20% lower then market. Why not making it 40% lower, allowing families to live on campus and promote sustainability by reducing commutes for 4 people a day!
- Eugene Barsky, Library, October 1, 2011 at 12:24 am

Many of my colleagues who are since quite some time at UBC could buy into the market to relatively low prices and enjoy (nominal) windfall profits with which they leverage all kind of expenditures. People like me who only recently came to UBC are in a different situation and usually can’t afford buying a house, and yes, looking for locational options is always in our mind.
- Kurt Huebner, September 30, 2011 at 10:43 am

I was disappointed when I tried to obtain rental accommodation on campus, because of the no-pets policy. There was not a single building on campus that would allow me to have my cat in the dwelling. This policy probably prevents many people from being able to live on campus, and I strongly suggest that it be changed. Pets are important in many people’s lives.
- Selina Fast, administrative-support staff, September 30, 2011 at 10:30 am

I now finally have a house that I can afford…in Squamish.
- JKS, Faculty Dept of Medicine, September 30, 2011 at 10:09 am

Arriving to UBC 2 years ago from the US we found the dip in the US market while price increase in Vancouver to be much more difficult that we initially thought.
We were very frustrated from UBC policies that seem to encourage selling on-campus housing to retirees rather than to faculty. It seems that the current administration is thinking more about the short term profit than the longer term effect on UBC. I am hoping that this will change.
We finally bought a nice house in east van. With the size of our mortgage, I will not retire before I’m 85.
- Eldad Haber, September 29, 2011 at 11:50 pm

When I arrived at UBC from Stanford, the whole “University Town” plan was just starting. Given my experience with Stanford (similarly blessed with a large amount of extraordinarily valuable land in a very expensive real estate market), it was painfully obvious the plan was not in the long-term best interests of UBC. I do not fault the folks who pushed the “University Town” through, as UBC was desperately short of money, and they executed very well on a plan to convert UBC’s land wealth into endowment dollars. The failure, though, was a lack of long-term strategic vision, to see that buildable land at UBC was more vital to the University’s future, and faster appreciating, than financial assets in an endowment.
- Alan Hu, September 29, 2011 at 11:21 pm

As many previous contributors noted, the cost of housing in greater Vancouver will very likely continue to rise.
- Marcel Franz, Professor of Physics, September 29, 2011 at 2:32 pm

My frustration has grown since 2004, until I just decided to lose any hope that UBC Trust would care about people working on campus and any hope to ever own a place. There is only so far some one can go with the mounting frustration of seeing high end condos built on campus everywhere out of reach of a family of 4. Even the condos built for faculty/staff were unaffordable. Townhouses built for faculty/staff are now back on the market at more than a million dollars. I look at other options in other cities every year.
- B. Pfeiffer, Faculty of Education, September 29, 2011 at 1:47 pm

At my salary, I would not have moved here if I had young kids at home because I would not have been able to provide them the same “home” facilities as I had in Ontario. Since my kids are all old now, moving to a condo made sense and made it possible financially but if I had a younger family, the discussion would have dramatically changed.
There is a psychological factor that makes many professors bitter and angry with UBC. When a professor feels that after 20 years of service to UBC he/she is unable to buy a unit on campus but others who have nothing to do with UBC are; it is very demoralizing. I have been hearing that on a regular basis since joining UBC.
- Dr. T. Aboulnasr, Dean of Applied Science, September 27, 2011 at 3:53 pm

Six years ago I … told the Provost at the time (Lorne Whitehead) that I was worried about UBC retaining many of the outstanding colleagues that had been hired over the past several years, and that I was particularly worried about Vancouver’s expensive housing market and the minimal assistance offered by the University (i.e., little more than covering closing costs).
Owing to an even higher Vancouver real estate market, my worry is still there. Many colleagues that we’ve hired over the past decade are highly marketable and moveable.
- Darrin Lehman, September 27, 2011 at 3:52 pm

During the recruitment process housing or the lack of affordable housing is the number one issue. It is common to every single conversation that I had with all our candidates regardless of rank.
- Vanessa Auld, Assoc Dean of Science, September 27, 2011 at 3:51 pm

In my experience, the affordability of housing comes up at some point in almost every faculty negotiation (recruitment and retention). In a couple of instances, housing was arguably the major reason a faculty member chose not to join UBC, or chose to leave.
- Simon Peacock, Dean of Science, September 27, 2011 at 3:51 pm

We have lost candidates due to the difference in housing costs with many other locations.
- Rachel Kuske, Head, Dept of Mathematics, September 27, 2011 at 3:51 pm

In Vancouver, for a newcomer like me, it is very hard to accumulate enough funds for a reasonable mortgage within a reasonable amount of time not to be out-passed by the price increase. In the UBC area, I heard that two-bedroom units are currently worth about $0.7 million or more. … As a family of four, we found that it is very hard to find a townhouse unit or three-bedroom apartment, rented or owned, unless paying a very high price.
- Y.K., Assistant Professor, Faculty of Science, September 27, 2011 at 3:51 pm

Housing issues comprised the main reason that we lost an excellent prospective faculty member, Y. M., who we had made an offer to in computational applied math a couple of years ago. He liked the department a lot, but was not able to afford to get a place to live where he and his wife would be happy raising a family. They were priced out of the market. He went to U Minnesota instead. We lost out.
As I had written to the BoG a few years ago, we almost lost another collegue to housing issues (D.C.). Somehow that catastrophe was averted at the last moment by the head’s work. I think you will find many such stories among recent hires (last 10 yrs) who left us due to the real estate woes, or candidates we wanted to attract who took a look at the housing prices and voted with their feet.
- Leah Keshet, Professor, Faculty of Science, September 27, 2011 at 3:50 pm

First a theorem: Due to a large influx of immigrants who desire to live in Vancouver, the housing price in Vancouver will grow beyond the reach of a new faculty with regular salary. This will soon become an obstacle for UBC to hire new faculty.
- T.T., Professor, Faculty of Science, September 27, 2011 at 3:50 pm

After 16 years at UBC, I’m still living in 540 square feet.
- K.B., Professor, Faculty of Science, September 27, 2011 at 3:32 pm

2003 arrive UBC. 2004 look for a house. Kid #1 arrives; decide to rent for a bit longer and save $ for better place than we could afford at that time.
2004-2008 cost of acceptable house to purchase increases faster than our ability to pay. Period of frustration at that time.
2008 investigate positions elsewhere. Obtain great offers. Nearly leave. Stay at UBC after competitive retention raise is offered.
2009 combination of slight dip in prices, low interest rates, improved housing assistance program and increased salary mean we start looking again
2010 buy house (nice place near Fraser street). Notably just barely within the “seven years at UBC” time limit on the housing assistance program.
- Daniel Coombs, Associate Professor, Mathematics, September 27, 2011 at 3:44 pm

Zero-Down Mortgages In Canada – “Better yet, there are programs available from some financial institutions where they will offer a “free down payment” “

“If you’re a first-time homebuyer, you may feel you can’t afford to purchase a home because you haven’t managed to save your down payment. But there are many solutions available today that can help first-time buyers with their down payments.
Many lenders will allow for a gifted or borrowed down payment. And of those lenders that will not provide this alternative, many offer cash-back options that can be used as a down payment.
Better yet, there are programs available from some financial institutions where they will offer a “free down payment” or a “flex down”. Of course, you will end up paying about 1% more in your interest rate, but the program will help you get in the homeownership door and start accumulating equity earlier. You must, however, stay with the original lender for the full initial five-year term or else you’ll have to pay the down payment back.”
“Now is an Ideal Time to Buy”.
- from an e-mail sent to prospective clients, 5 Oct 2011, by David Lund, Realtor, Prudential Realty, North Vancouver [hat-tip 'D']

Remarkably, these are still being peddled. – vreaa

A Mortgage Broker and ‘Sidelined’ Prospective Buyer Living On The West-Side Sees Cooling Market

“A comment from ground zero and an industry player, me. I happen to live on the West Side of Vancouver and I am a mortgage broker so let me give you a first hand assessment here in Lotus Land.
I dropped by an open house yesterday for an 850 sq. foot condo listed at $540K to network with the Real Estate Brokers. (crazy that $540K buys you a 850 foot box)
First thing they asked me is if I was busy as they used my answer as a gauge of the market. Most mortgage brokers in my circle have seen their business drop 30-40% from last year. The two RE Brokers said that their embedded mortgage brokers in their RE office have been slow also.
It is getting significantly harder for mortgage brokers to compete against what the banks are underwriting as brokers are now racing to the bottom with rates. No wonder the banks got a finger wagging from the OFSI.
I asked the RE Brokers if the Asian money is still snapping up properties here on the West Side and they have said that has cooled considerably.
Although they did say lots of boomers are buying condos for their children to get them started in the game.
Maybe since we are all in the industry we could talk frank with each other and put all that Realtor sunshine talk aside.
Vancouver really only has 2 industries, Real Estate and Mining (ok maybe tourism), with China slowing down on buying real estate and commodities it would only make sense that inventories are rising and sales are drying up.
On a more personal note my wife and I have been contemplating buying a home since we had paper profits from her stock options and my stocks, but the downturn in the stock market has wiped a good $250K from our portfolio.
The market needs buyers like myself to perpetuate the next level but for now we are sidelined and watching.”
- Dave at The Economic Analyst, 5 Oct 2011 [Hat-tip to Ben Rabidoux for sending this along by e-mail (and to jesse who simultaneously reposted the comment on an earlier VREAA thread). Clearly an anecdote that captured our collective attention.]

So much here:
1. Mortgage broker who recognizes that prices are ‘crazy’.
2. Most mortgage brokers have seen business drop 30-40% yoy.
3. “Asian money” has “cooled considerably”.
4. “Inventories are rising and sales are drying up.”
5. One example of future demand being “sidelined” with stock market fluctuation.
All adds up to a cooling market.
Perhaps the top is in.
- vreaa

Such Stupidity Should Not Be Rewarded – “I have a relative that said that she and her husband would ‘buy their dream house’ when their east Vancouver shack, for which they paid $750K, “doubles or triples in value over the next few years”.”

“I have a relative that said that she and her husband would ‘buy their dream house’ when their east Vancouver shack, for which they paid $750K, “doubles or triples in value over the next few years”. She’s a high school teacher; he works in sales.
Such stupidity should not be rewarded.”
- VancouverContrarian at greaterfool.ca 4 Oct 2011 at 10:03 pm

There Is No Such Thing As A ‘Below Market Sale’ – “Priced well BELOW MARKET VALUE! Best price per Sq.Ft. in the building!”

#102 – 500 W 10th Ave, Vancouver
Fairview area of the West-side
MLS V903485
1096 sqft condo; 2 bed; 2 bath
Built 1994
Asking price: $499,900
“Priced well BELOW MARKET VALUE! Best price per Sq.Ft. in the building! Offers below the listing price will not be accepted!”
[hat-tip painted turtle at VCI]

Market value is, by definition, what a unit like this will actually sell for. – vreaa

Opinion – “Many young people have sacrificed making families in favour of mortgage debt. Quite simply, kids are not affordable to them anymore.”

“What I have always seen as the saddest outcome of the housing bubble in Vancouver, Toronto and elsewhere is how so many young people have sacrificed making families in favour of mortgage debt.
They are not having children. Quite simply, kids are not affordable to them anymore. So it seems a little tragic to be nesting when an empty brood is all the dividend you get for your life efforts.
I have not yet seen young couples feeling resentful, but it is clear to me they have been cheated by a system gone wrong. Perhaps the media will explore this story in the future. We are seeing an inverse baby boom at the same time Boomers are heading for retirement. Whose kids will pick up the slack in twenty years time?
This credit bubble has become a demographic disaster.”
- Farmer at VREAA 4 Oct 2011 5:04pm

Misallocation of resources, of the most profound kind. – vreaa

“Sold our condo in noisy Yaletown, bought 5 acres in a small town in Eastern Township of Quebec, built a house. Debt load is a small fraction of what we had and lifestyle is way up.”

“Sold our condo in noisy Yaletown, bought 5 acres in a small town in Eastern Township of Quebec, built a house. Debt load is a small fraction of what we had and lifestyle is way up. Every day I think to myself, what are all those people clinging too? Running along the Seawall is the only think I can think of.”
- Ultramam at vancouvercondo.info October 4th, 2011 at 8:15 am

Mike Brock, National Post – “The hidden Canadian housing bubble”

“Let me be provocative and say that our real estate bubble has the same fundamental problem as the one in the U.S., which exploded gloriously, kicking off the financial crisis.” …
“The proof is in the pudding. For the 150-year period starting in 1800 and concluding in 1950, real estate prices followed a flat trend, which put them, overtime, in line with the general inflation trend. Then, starting in mid-1970s, throughout the western world, this underlying trend ended. It was replaced with a price appreciation trend in excess of the underlying inflation trend and, for the first time in measured history, developed a multi-decade trend divergence between income and price.” …
“Considering the average Canadian consumer has the highest debt-to-earnings ratio in the OECD (155%), there are many reasons to question the underlying assumptions of the Canadian banking system.”
- Mike Brock, ‘The hidden Canadian housing bubble’, his ‘Full Comment’ article headlined at National Post, 4 Oct 2011

Hidden to many, but not to us. Right, readers?
Another expose getting MSM space, things may be changing.
Note the vitriol from the bubble-deniers in the comment section of the article. “Hogwash”, etc.
- vreaa

Global TV – Young Couples Leaving BC – “You’re not putting all your money into the house itself.”

Tanya Beja, reporter: “Mike and Elaine Garland want their son Nicholas to grow up with the same opportunities they did: a house, a backyard, maybe a dog, but when they look at the cost of real estate, they know their options are limited.”

Elaine Garland: “Knowing that our dollar didn’t go very far in this city… kinda was disappointing for me, because I grew up in this city, I was a Burnaby girl.”

Beja: “So the ‘Burnaby-girl’ and her husband are heading East, getting ready to move to Newfoundland, where a home costs half of what they paid here.”

Mike Garland: “Out here you feel like you’re struggling, every week, trying to pay the bills, pay your mortgage, and the commute. You never think you’re getting ahead.”

Beja: “The Garlands have no doubts that a new life in Newfoundland will allow them more time with their son, and more money for his education and activities like hockey.”

Mike Garland: “I think it’s a better choice to raise a family… you’re not putting all your money into the house itself.”

—

Beja: “Holly and Rob Williams know what it’s like to struggle: Thousands of dollars in debt, they want to start a family and own a home, something they say thay can only do by moving to Ottawa.”

Holly Williams: “We don’t want to be house-poor, and I do believe, that if we stayed, we would end up being house-poor.”

Rob Williams: “… looking forward to the next step in life, which is going to be children, which is going to be more expensive… the option is clear, it’s very clear, what has to be done.”

—

Beja: “For the first time in more than a decade, more people have left BC this year than the number moving here from other provinces.”

Feras Elkhalil, head of a tech recruiting firm: “In the past, we’ve been known to call across the nation, just to get that good, specialized talent into Vancouver, and it has been easier, to sell a lifestyle and temperature change, … but that’s gone.”

Beja: “BC prides itself on its livability and lifestyle, but are we selling a bill-of-goods? … Ours is the most expensive in the country, costing more than eleven times the median income.”

“But our income is at the bottom of the list, Vancouverites make less than people living in places like Regina and Saskatoon.”

“If young people continue to leave, it could spell trouble for our economy.”

- above excerpts from Global TV, 3 Oct 2011.

Kudos, on this occasion, to Global TV and to Tanya Beja, for plainly stating aspects of the effects of housing prices.
The montage of clips from the ‘Best Place On Earth’ BC advert interspersed with voice-over questions about housing is the closest Global has come to asking real journalistic questions about our RE.
It’d be even better if Global went further, and joined some of the dots:
Given the prices and incomes, we’re experiencing a ‘speculative mania’ in housing prices, aren’t we?
And, given the effects on migration that they cite, and given that prices have been driven up by bubble-dynamics, are prices sustainable?
- vreaa

Guerrilla Advertising On reddit? – “Just moved here, and have been renting a place for 4 months. My wife and kids (3 boys) are now coming to live here with me. I need to buy a home.”

“Just moved here, and have been renting a place for 4 months. My wife and kids (3 boys) are now coming to live here with me. I need to buy a home. I have a $800,000-$900,000 budget. I work in downtown. What are some good, safe, and clean neighborhoods I could live in? A place where my dollar will go far and my kids could grow up.
Any good neighborhood in the GVRD would be good.
Please tell me what neighborhoods you would recommend,
Thanks”
- thread at reddit.com ‘Need to Buy a Home in Vancouver’ started by ‘MiamiToIbiza’, 3 Oct 2011. [hat-tip matt at VREAA]

A discussion ensues, with bubble/no-bubble exchanges.
Through the discussion ‘MiamiToIbiza’ elaborates as follows:
“Coming up with a $1,000,000, is really difficult. I’m Only 32 years old, and banks consider me a risk at for a million, but I have approval for $750,000 loan. I plan on putting $150,000 in my self, I can’t afford to put in $250,000.”
“Looking for 2-3 bedroom +2-3 bath, at least 3000sqf home.”
“I may have my parents come and live with me.”
“I don’t think I’ll be buying in the proper City of Vancouver area.”
“I don’t think were in a bubble, we are very stable. Vancouver is Port City, a gateway city for people and goods.”
“I’ve been looking at Fraser heights, It seems really nice, I’m putting an offer on this home: http://www.cotala.com/1648 . THANKS FOR THE HELP VANCOUVER”
—
Gee, this guy went from asking an initial very open exploratory question about which area of the city to consider living in, to putting in an offer on a specific home, all in the space of 24 hours??
If we were in any way cynical, it’d occur to us that this reddit post just may have been a bit of guerilla advertising by a realtor or seller. But, no, Vancouver RE gets people to do crazy things, right?
The only three other posts on reddit from ‘MiamiToIbiza’, all in the last 24 hours, criticize teachers, Alberta and Winnipeg.
And another post thread started by ‘MiamiToIbiza’, also on 3 Oct 2011,   just hours after the first, reads:

“I bought a home
Got a home in Fraser Heights, everything is now getting finalized.
HOUSE: http://www.cotala.com/1648
It was slightly hire [sic] then [sic] my budget but I’m happy. (Parents put in some money, THANK YOU MOM AND DAD)
Let me know what you think of the home”.

Yep, we’d say it’s fair to conclude that this is guerilla advertising.
(Anyone who knows otherwise, please let us know).
The market is deteriorating.
Are Vancouver sellers and realtors becoming desperate?
Oh, and what does the BCREA have to say about this kind of advertising?
- vreaa

Quick Snapshot Of Potential First Time Home Buyer – “We were hours away from closing on a townhouse in Port Moody when we decided to walk away from it. I’ve never been happier with that decision. Thankfully logic trumped emotion.”

“My wife and I ‘were’ to become first time home buyers after spending a year and a half living at my mother in-laws saving for a down payment (not typical these days, actually saving for a down payment?, that’s crazy talk!). We were hours away from closing on a townhouse in Port Moody when we decided to walk away from it. I’ve never been happier with that decision. Soon after, we found this site, and have just moved into a new rental unit right next to family (nearby child care). So not only do we have an acceptable rent payment but we have some money to invest, and no loans or debt of any kind.. How is that for a quick snapshot of one potential first time home buyer. Thankfully logic trumped emotion here.”
- SpatialFiend at VREAA 3 October 2011 4:58 pm