“Chatted with a gentleman in Langley yesterday who bought his townhome about 8 months ago before it was completed. He paid about $400,000 for it (very nice place) and now 8 months later the developer is selling exact units to his for about $350,000. The owner feels that this is a temporary blip and that the value will come back to his place in a year or so. Perhaps he is right, perhaps not, I can’t say… but I was surprised that there was any kind of weakness in the Langley market as there is still a TON of building going on out there.”
- Burbs Boy at vancouvercondo.info 13 Jan 2012 12:31pm
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Latest Anecdotes:
- “The bank encouraged her to take the equity in her home to purchase another home. She bought a 2nd home at the peak.”
- “Let’s remember how we got here” – Looser and Looser CMHC Limits
- Don’t Worry, I’m Sure Somebody Will Sort This All Out – “Policymakers now know better and will be a lot more proactive in preventing a collapse.”
- “Things have changed, we are not doing that type of mortgage. We are not interested at all.”
- “We are noticing our target type of housing in price decline, albeit slow, as our money increases in value, slowly as well but outpacing housing.”
- Renter Buys In West Van – “For a few hundred more per month, you could own the place. Which is what I will be doing as my offer for a place down the street has been accepted. There is some value in staying in one place.”
- A Bed in the Bathroom, Why Not? [Let Us Count The Reasons...]
- “My husband and kids are pretty happy in our rental house within cycling distance of work that we could never have afforded otherwise. We’re doin’ pretty dang well, thank you, for median income earners in this expensive city.”
- “I Wish Them Bad Luck.” – Jim Flaherty, on those who wish to profit from Canadian RE price drops
- “We asked why he doesn’t just rent the whole house. He said he can’t, it wouldn’t cover his mortgage – he’ll get more to rent it out as two suites. These new landlords are hilarious, thinking that rent will cover their mortgage!”
- “My neighbours, in their late 60s, just put their house on the market. They had said they would die in that house, but now they are worried that with the housing market going south they may be losing a lot of equity and they better sell now before it gets worse.”
- Chat Thread
- Taking A Break
- “My best guess: this property is now an ‘investment hold’ and will be built ‘when prices recover’. Good luck on that!”
- Man Loses $745,000 Vancouver Condo Deposit
- Graphic – Degrees of Housing Overvaluation in Canada
- The Rare Individual With A Negative Ownership Premium
- Advice Regarding Renting In Vancouver, Please – “Unfortunately, the Vancouver rental stock is absolutely atrocious. It just seems like every landlord is looking for someone to pay 100% of their mortgage on a crappy place through rental income.”
- “I just visited Manhattan for a week, and happened to snap some real estate ads on both the Upper West and Upper East sides of the island. Compare to Vancouver. It simply doesn’t compute.”
- Ben Rabidoux In Vancouver Next Week
- “The mortgage company told me they were calling in my 40-year, 0-down mortgage. I have paid nearly sixty thousand dollars towards it, but, nearly five years in, I have yet to touch the principal.”
- ‘Vancouver City Hall: Housing Report Card 2012′; Plus Revised Version
- “My folks find themselves at 65 still owing half the value of their home and recreation property to the bank. After almost 30 years of ownership in the BPOE and a number of boom markets, they have very little to show for it.”
- “Rent for $2,200 a month or buy and have a mortgage of $4,310 per month. Why would anyone buy?”
- “They were talking about two couples they knew who had recently bought a lot and planned to each build a house on it and live as neighbours.”
- Greater Vancouver Home Builders’ Association Annual First-Time Buyer Seminar Attendance Plummets
- Mom and Pop Get It Wrong In All Markets, Time And Again
- The average British Columbian homeowner is not going to pay off their mortgage by the time they retire.
- “He’s sold all his properties except his current one, which is now for sale. He explained that the market’s currently in crash mode, worst that he’s ever seen.”
- “One of my old high school buddies finally got her mother to sell the family home in Kitsilano – sold for over $1M, monies realized after debt paid off $185K.”
- “I know someone who just declared bankruptcy because her condo was assessed at $150k and she bought it presale north of $250k in 2005 or 2006.”
- Sturdy, With Views – “Calling Froogle Scott!… Is Dr. Scott ‘In The House’?” [Not In This One, Certainly]
- “She said the market was dead in Victoria and that it would remain so for a very long time. I asked how she knew. Her answer was fascinating and should scare the pants off the real estate crowd.”
- Kits Notes – “I’m pretty sure that this is the first 3+ bedroom property of any type that I’ve seen in the 5 years I’ve lived here that is priced below $700K.”
- “A beautiful Belfast home, in the equivalent of 1st Shaughnessy, bought at their RE peak in 2007 for £3.5 million, has now sold for £800K, almost 80%-off. The market didn’t suffer any significant economic shocks. Rates & unemployment didn’t skyrocket. They didn’t build more land. Sentiment just changed and the prices fell and fell.”
- “Two family members of hers are trapped, underwater, in condos on the East Side.”
- “Interprovincial migration is not saying good things about BC’s economy.”
- Vancouver RE: Not As Expensive Provided You Don’t Think – “It’s clear that our perception of affordability has been coloured by living on a continent where housing is unusually inexpensive.”
- More Undisclosed RE Industry Insiders Publicized As Clients – “In 1995, Allan and Karin Hoegg were mortgage-free. But no more. Today their Vancouver home is a valuable source of income as they plan for full retirement.”
- Rumor that some OV units will be reduced by 20%.
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Wow, buddy’s already 50K in the hole and he’s handling it very well…
Oh, well, there goes the downpayment and a big chunk of the bank’s money…
There’s a ton of building going on *everywhere *in the glorious BPOE. Doesn’t mean squat. Greeed knows no bounds, and if we’re like most other deflated bubbles (and we most assuredly will be), that pace will continue for some time yet. We’ve only just passed the peak, and they gotta milk the last greater fool, don’t ya know.
And then suddenly the buyers will dry up completely. And there’ll be much surprise.
But…a Langley townhome for $400,000? Seriously? Langley? Townhome? $400,000? There’s no earthly reason for even a “nice” townhome in Langley to cost more than $200,000. And that’s probably where this one will ultimately end up, IMO.
I’m perfectly happy for them to keep building. If developers can make a profit at lower prices that is good for the economy. It keeps people working, it keeps business going, it provides valuable supply to the market. There are lots of people in Greater Vancouver who are frustrated by the high costs and low value of housing. Better value is what this city needs, and I certainly would be looking if developers can provide it.
Don’t follow Langley closely but developers will offer big discounts to close the last few units because their sales/marketing costs as % of debt outstanding increase (fewer units but fixed marketing costs).
In other words, no need to rush into the presales mayhem. No need to line up at 4AM in the dead of winter waiting for the presale bell to ring.
Well that depends. It might be one of those mythical and elusive presales that sell out in 24 hours. Besides, Vancouverites love to line up for no good reason.
Onni did this in 2009 with their developments in Port Moody and in Richmond. They were advertising up to 40% off. The day the sale started, HAM was lined up and the units were all scooped up.
Other developments (eg. H&H) had pre sold units where buyers did not closed their deals and left their deposits behind. Those people ultimately made the wrong decision. Amacon was fearing the same could happen on their development, The Beasley downtown. They quickly offered pre sold customers a rebate of upwards of 30%, so they would not walk on their contracts. That was a costly move for Amacon.
This year, look for similar situations on projects built in false creek by Olympic village and Richmond. Some projects may not go as planned or be delayed. Millions will be lost and many workers could potentially be looking for work. A downturn in RE could devastate the economy as Canada’s economy is very dependent on RE. 20% of GDP comes from RE. 65% of GDP is dependent on consumer spending. So unemployment will likely rise and spending drops as families are hard pressed to make ends meet. Thank the conservative govt for this.
This is likely the end of the housing era. I hope some of you took this as an opportunity because the money made is definitely going to be needed as we won’t see prices rise for a number of years. Well that’s my prediction. I’m sure many will agree with me.
Looks like The Province isn’t just putting one-sided Julia Lau promo pieces in:
http://www.theprovince.com/touch/story.html?id=6033342
Gives an email address for writing in.
I’m wondering if other buyers are going to go to the presentation center to smash it up like in China.
“but I was surprised that there was any kind of weakness in the Langley market as there is still a TON of building going on out there.”
———————————————————————————–
Surprised? It’s called over building actually. Richmond is way more over built and is correcting.
Recently I drove through Langley and Surrey in the willoughby and Clayton heights area (10 blocks either side of 200st between 64th and 80th) it is shocking how much building is going on out there.
Another MileStone!… (or further proof, as though any were needed – that YVR’s ‘SlimPickens’ moment is nearing terminal velocity/super criticality)
[BloomBerg] – Vancouver Displaces Sydney as Second-Costliest Market in Housing Survey
“Vancouver displaced Sydney as the least-affordable housing market after Hong Kong among large English-speaking cities, as home prices rose faster than incomes, a study of 325 metropolitan areas worldwide showed. Vancouver’s median home price of C$678,000 ($686,400) in the third quarter was 10.6 times its median pretax household income of C$63,800, making the city “severely unaffordable,” Demographia said in a report today. A ratio of 3 or less is considered “affordable,”…”
http://tinyurl.com/877yv7n
Oh yes… A ‘SlimPickens’ moment looks like this…
http://tinyurl.com/39l45ss
This ‘un-affordability’ needs to be adjusted. It will actually become more affordable as the prices rise since people with median incomes of 63k will be pushed outside city limits. Same thing happened in Hong Kong and Sydney.
Vancouver just has a very high percentage of people with ALL their assets in the one house that they used to be able to afford. Now their salaries haven’t gone up but their house values have. Simple, sell and relocate, it’s big city 101.
“It will actually become more affordable…”
Sure, if you say so. If you read the report you would see that Victoria, Kelowna, and Abbotsford are also among the world’s most unaffordable markets. Unfortunately bubble thinking is not confined to the Vancouver city limits. You really think that your Vancouver teachers and police officers will start commuting in from Princeton? Your statement is illogical.
You could be right — that it is Big City 101. So as part of our curriculum in Big City 101, go make some comparisons with other cities such as Toronto, NY, Boston, Chicago, etc. Notice that thing they all have? Yes, that thing — it’s called an efficient mass transit system. Until the lower mainland has one of those, it won’t belong in Big City 101. The people moving out of Vancouver won’t be going to the suburbs — they’ll be going to places they can earn more money, pay less for necessities and luxuries, and in other ways enjoy a better standard of living.
You can’t be serious? There is a logic disconnect here.
At the very least Hong Kong and Sydney are the financial hubs of their respective regions, availability of high paying jobs is significantly higher than in Vancouver.
The economic concept is quite simple, a rising tide is supposed to float all boats. If the local boats aren’t going to be floated by the tide, time to dam it shut.
Unlike some ardent bears, I am in favour of foreign investment. However its important to keep it in perspective. If the money is not a net benefit to locals, rethink the strategy.
As prices decline, I expect to see building activity increase. Developers have a minimum price point where they are profitable. As they see that floor approaching due to price declines it is in their interest to build as fast as possible up until the minimum profitability level is reached. They will make less profit on each incremental unit so build build build!