“The old timers aren’t that keen to cash in, my folks have two places, one in Van and one on the island that they like to visit about once a month. I created a model for them that showed even with a modest 3% decline they are better to sell and take a loss now than hold on and still stay at the empress every weekend amg be ahead. They refused and said they like to open the closet and have their stuff and if things got bad they could rent it out. I next showed them that if they sold now, at a loss, and rented a place over there, they would still be better off and de-risked. Their response was “How do I know it could go down 3%?”. My response was I don’t but Van has dropped more than 10% since the peak and how do they know it is not going to fall”. In the long term real estate always goes up was what I was told. I was angry at this point and stammered fine, you are 72 right now so in the long run you will probably be in a geriatric home and the condo will be liquidated to pay medical bills; I just want you to get your cash out now and enjoy it rather than hanging on.”
- YLTN@Work at vancouvercondo.info 10 Jan 2012 at 8:35am
Imagine 10,000 couples in this position.
They find it hard to conceive of substantial price drops.
The market drops 5%, 10%, then 15%. Then 20%.
How do the 10,000 respond? Not all in the same way, of course, but what percentage would, at 20% off, come to market?