Seller Epiphany - “I sold and have $2M in the bank. My original plan was to wait until prices settled before buying a knockdown and building again. But a feeling has come over me I thought I could never have: I am beginning to hate Vancouver.”

Alex sold his house two months ago for $2.5 million. The buyers were Chinese, from Mainland China. “What else?” he asks. After all, this was West Vancouver. “They wanted our furniture too. We are now renting a furnished house. I have $2,000,000 cash in my account.”
“My original plan was to wait until prices settled before buying a knockdown and building again. But for the last two weeks a feeling has come over me I thought I could never have. Something snapped. I am beginning to hate Vancouver. I use to defend Vancouver to death against the East. Yes, I made lot of money here. But Vancouver is beginning to disgust me. The arrogant, snooty belief that nothing can go wrong here. The multiple offers for homes. The fact there is no industry or decent paying jobs here except if you are a Real Estate agent who drives around in a Porsche and advertises on billboards like a fashion model or actor.”
“Meanwhile we continue to build higher and higher on the North Shore mountains destroying the environment. The Governments have prostituted themselves to the highest bidder, selling citizenship for money and changing the nature of our neighbourhoods. This is not a healthy change. Marine Drive has become gridlocked. Disgusting monster homes with huge retaining walls being built. Everything has become too expensive here and beyond logic.”
- Alex in West Vancouver as relayed by Garth Turner at greaterfool.ca 9 Nov 2011

The interesting thing is that Alex has probably had these thoughts brewing for years. They have now crystalized with the sale of his house. The emotional attachment to the hopeful bullish position has departed, so the thoughts rise up, and become conscious and articulated.
There exists a super-saturated solution of these thoughts in the minds of Vancouver owners. They know that housing is very, very overvalued; they know that Vancouver is a nice city, but limited in all sorts of ways.
What will it take for everybody to suddenly realize the truths they already know? What will the seed be around which the realization rapidly forms?
What will do it is falling prices.
Unlike Alex, very few will be able to sell before they admit these thoughts.
The moment prices pull back substantially, RE will look different.
Owners will realize what they already know: that their $1.1M SFH or $400K condo are very modest structures, very overvalued, with lots of downside risk.
This realization will bring sellers to market as they attempt to realize their fantasized paper gains.
Prices will drop further; price drops will beget price drops.
The irrational strength on the way up will become irrational weakness on the way down.
This is how markets work, how speculative manias unwind.
- vreaa