“I’m ecstatic. My boomer parents called today to say they’ve finally sold our long-time house in cow town. Assessed was approx 490k, listed last fall at 560k, no bite after 3 months so took off market; re-listed at $490k last week, sold at $480k. According to the realtor (who only charged $3.5k in fees), these days most sales in the city (even near university / good high schools) are sold below-assessed value.
They’ve heeded my advice and already signed a 1 year lease in a newly renovated 1200 s.f. 3BR upper floor of duplex in a convenient area in GVA at $1275/m (after a $125/m reduction due to them being desirable tenants). It’s complete with new stainless steel appliances, granite counter top, and brand new carpet/cabinets. The owner is an elderly gentleman who just moved into a nursing home, so his son took over, renovated, and rented the half of duplex out, aiming for long-term tenants.
The duplex itself was assessed at $1.3M, so ~$650k for my parent’s side. I’m happy to have dissuaded them from buying in GVA (took me 2 years of nagging). My next goals are to keep them happily renting in next couple years, and to get them to sell their investment condo property in downtown cowville (currently rented out via an executive rentals company). That’ll take some more nagging.”
- VMD at vancouvercondo.info 14 Feb 2012 3:30am
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- Advice Regarding Renting In Vancouver, Please – “Unfortunately, the Vancouver rental stock is absolutely atrocious. It just seems like every landlord is looking for someone to pay 100% of their mortgage on a crappy place through rental income.”
- “I just visited Manhattan for a week, and happened to snap some real estate ads on both the Upper West and Upper East sides of the island. Compare to Vancouver. It simply doesn’t compute.”
- Ben Rabidoux In Vancouver Next Week
- “The mortgage company told me they were calling in my 40-year, 0-down mortgage. I have paid nearly sixty thousand dollars towards it, but, nearly five years in, I have yet to touch the principal.”
- ‘Vancouver City Hall: Housing Report Card 2012′; Plus Revised Version
- “My folks find themselves at 65 still owing half the value of their home and recreation property to the bank. After almost 30 years of ownership in the BPOE and a number of boom markets, they have very little to show for it.”
- “Rent for $2,200 a month or buy and have a mortgage of $4,310 per month. Why would anyone buy?”
- “They were talking about two couples they knew who had recently bought a lot and planned to each build a house on it and live as neighbours.”
- Greater Vancouver Home Builders’ Association Annual First-Time Buyer Seminar Attendance Plummets
- Mom and Pop Get It Wrong In All Markets, Time And Again
- The average British Columbian homeowner is not going to pay off their mortgage by the time they retire.
- “He’s sold all his properties except his current one, which is now for sale. He explained that the market’s currently in crash mode, worst that he’s ever seen.”
- “One of my old high school buddies finally got her mother to sell the family home in Kitsilano – sold for over $1M, monies realized after debt paid off $185K.”
- “I know someone who just declared bankruptcy because her condo was assessed at $150k and she bought it presale north of $250k in 2005 or 2006.”
- Sturdy, With Views – “Calling Froogle Scott!… Is Dr. Scott ‘In The House’?” [Not In This One, Certainly]
- “She said the market was dead in Victoria and that it would remain so for a very long time. I asked how she knew. Her answer was fascinating and should scare the pants off the real estate crowd.”
- Kits Notes – “I’m pretty sure that this is the first 3+ bedroom property of any type that I’ve seen in the 5 years I’ve lived here that is priced below $700K.”
- “A beautiful Belfast home, in the equivalent of 1st Shaughnessy, bought at their RE peak in 2007 for £3.5 million, has now sold for £800K, almost 80%-off. The market didn’t suffer any significant economic shocks. Rates & unemployment didn’t skyrocket. They didn’t build more land. Sentiment just changed and the prices fell and fell.”
- “Two family members of hers are trapped, underwater, in condos on the East Side.”
- “Interprovincial migration is not saying good things about BC’s economy.”
- Vancouver RE: Not As Expensive Provided You Don’t Think – “It’s clear that our perception of affordability has been coloured by living on a continent where housing is unusually inexpensive.”
- More Undisclosed RE Industry Insiders Publicized As Clients – “In 1995, Allan and Karin Hoegg were mortgage-free. But no more. Today their Vancouver home is a valuable source of income as they plan for full retirement.”
- Rumor that some OV units will be reduced by 20%.
- Downside Weights On The Vancouver RE Market – “One of the older guys (over 60) mention to the guy beside him that he and his wife were thinking about selling their family home, and renting, in order to get some of the money that was locked up in the house.”
- “My buddy was looking to upgrade to a house in the Coquitlam area. With 200k extra for a home, that’s half of lifetime saving between him and his wife.”
- “I was walking in the Fraser neighborhood yesterday, I noticed that the population, on average, seem to be composed of workers. I belong to the top 5 percent in terms of income. Nevertheless, I cannot afford any of the houses for sale in that neighbourhood.”
- “Vancouver is an urban resort whose value mostly resides in its real estate and not much else.”
- “Rogers Communications is expanding into RE; aiming to relaunch website; providing critical data that can help potential buyers assess the value of a property from the comfort of their home computer.”
- I’m only 50 and I can just about retire if I want to, all because of a single simple decision – “When prices rebounded to their former highs, then rocketed another 30% higher to what I considered to be totally unsustainable levels, I decided that only a fool would pass up a second opportunity to harvest such a massive non-taxable capital gain, and in 2011 I sold my place.”
- The Vacant Lot of Versailles, Richmond.
- “I don’t think that most people think things are going to crash, just that there is going to be a slight correction, but it was amazing to me how sentiment has changed, and the fact Vancouver RE is too high was just understood.”
- “The ‘investor’ who purchased our house put it up for sale two months later, in January 1981, but the bubble had burst.”
- For A City To Have That Kind Of Vacancy, It’s Like Cancer – “Downtown, the vacant unit rate is so high that it’s as though there were 35 towers at 20 storeys apiece – all empty.”
- “What’s the worst that can happen? You can’t pay your mortgage, so sell your house! No fear.”
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Nice that you convinced your parents to sell! I’ve been trying to convince my parents to sell their Coquitlam house and Burnaby condo and rent as well. But they think their Coquiltam house may go up in value as the Evergreen Line is coming and more and more families are moving there since it’s still north of the Fraser and within commuting distance (although just barely). What do you guys think about Coquitlam? Bullish or bearish?
Not Bullish..more like BS
“they think their Coquiltam house may go up in value”
“think, may, value” are not terms used in investing. $50k in 2002 metals nets me $720k . ROI 1416%. Leveraged, that nets $7 million. Cost of rent, $48k. That’s investing. After 2008 the dollar began depreciating significantly and coupled with inflation, $100k cash is really like $40k. That’s why house prices have to drop. Currently, I see no ‘value’ in equating assets in dollars. The Bank of Canada got it’s nose punched by the US Treasury today and I’m anticipating some fallout. By the time your parents sell, the dollar will either be worth less or interest rates must go up. A home is considered an investment by only a small group of individuals called real estate agents and lenders, but that’s only my humble opinion.
If your parents like their home, live there. But if they plan on retiring to a more functional residence, why not sell now and wait a few years. The rent is insignificant when tallied against a potential 30% market drop. I would expect Coquitlam apartments and cheaper sfh’s to enjoy some Vancouver refugees this spring.
Dude, the tri cities are screwed. Some condos and TH bought in 07-08 are selling below what the were purchased for. I’m not bs-ing. Some houses are in trouble too. Realtors are totally pumping the market and sucking people into buying. Check out this listing. 3174 Mariner Way $589,000. Thus was bought in 08 for $679,000. At the time it needed major renos. Renovations were done. At what price only the owner knows. I thinka Reno like that could cost $100,000. You can DIY for $30,000. And owner state he spent $60,000 on landscaping. So add up the numbers. It’s been on the market for 90 days now. If anyone doesn’t believe me, hopefully a honest realtor will tell you. I have realtor tools to work with and have seen properties all over the lower mainland that are in trouble. The only area I think that will take longer to correct is Van East homes by Main & Fraser especially renovated heritage homes. They will correct eventually!
Why would you get them to sell their primary residence before selling their investment condo?
speculators sell their primary residence into a hot market. Most owners are more sensible than this.
I have a term that describes the idiots that sold in 2008 thinking they’d get back in at a lower $ than what the market bottomed at…fartcatchers. I see quite a few of these disgruntled fartcatchers on these renter blogs ruing the day they gave up their home because of this greed.
f1 – think your missing the capital gains exemption on selling a primary residence which may be an important issue for some depending on their income level.
It’s also important to recognize that greed is often the reason why many people don’t sell an over-valued asset only to regret the decision later.
One can’t make a trade in the past with 20/20 hindsight as you always seem to recommend. One can act now or not based on the best available information – the future is uncertain and you obviously don’t have a crystal ball so it’s not yours to judge.
If you sold but have not bought back in at a higher price you have not “lost” anything. Just like someone sitting on appreciation has not “gained” anything until they sell.
But according to you everybody is an idiot regardless of what they do.
Yo, F1, I sold in ’08 and am wicked happy. Sure, I didn’t pick the top but I’m going with close enough. BTW, my old place sold in May 2011 for $1k more an I sold it for so it looks like while I sold on the way up, May 2011 was the same point on the way down. I will buy, but not at the bottom, hopefully close. I’d rather buy and see prices go down a little more than when they start to rise again as selection will be much better on the downward side.
Do you know what “cowtown” and “GVA” are? Inference is hard.
airdales
if that overvalued asset is your home then you don’t care about it’s value – and aren’t planning on selling into hot/cold markets. Your basic assumption is wrong-headed…that owners use high values and profit as the reason to buy or sell. The primary reason is to provide a home for family. The vast majority of detached homeowners are using, or have used their property for the sake of raising children – even HAM reason for buying is family
F1: Buying property is not the only way to provide a home; renting achieves the same. People buy because they think it’s a good “investment”. Ironically, over long periods of time real estate has barely grown in line with inflation, making it a relatively poor investment historically. The last few years have been a different story, as we all know. Time will tell how that story ends…
El Ninja: most people buy because they don’t want to rent – its not stable, they hear rental horror stories from blogs such as this, its considered “second class” or “immature”, whatever. Its engrained in our society, and no amount of math or price/rent ratio rationalization is going to change that for most.
I would guess that the vast majority of people with families that rent, do so because of circumstance – and as soon as they can afford it they buy – it just so happens that in this city it takes far longer before they can afford it. Family, stability and guarantee of forced savings, appearing to be “mature”. It is what it is, and I doubt it will change.
nuxfan: I agree that this is exactly how most people think. But whether such thinking is sensible is another matter. Renting is only “unstable” insofar as you might have to move at some point. If you’re a good tenant, it’s pretty rare, and even then you get advance notice. Rent increases, meanwhile, are government-legislated to barely exceed inflation.
On the other hand, owing hundreds of thousands of dollars to a bank (with the possible seizure of one’s home in case of non-payment), paying every-rising property taxes, having to fund unforeseen repairs, and not being able to move in a timely fashion due to the illiquid nature of real estate, are all sources of instability in their own way.
well – if you’re waiting for the masses to come to their senses and see the light about renting, then I think you have a long wait ahead of you. Renting is the last option for most people. Most I know would consider leaving Vancouver before renting. Which poses its own set of problems as well.
Nuxfan: Who said I was waiting for the masses? I’m a happy renter. They can delude themselves however they wish…
Sorry but I don’t agree based on my own experience which is working out well. Buy low – sell high x2 and buy lower in much nicer location. Family is much better off now because of it. It wasn’t planned this way but when the market-based return on investments drops below inflation, then it’s time to sell and buy something else that has much better return / risk. Vancouver RE simply can’t return more than inflation so it’s much better for families to either rent (difficult in Van for sure) or move. I recommend the latter. By the way, a rental can be a home under normal (ie. non-mania) circumstances.
Your basic assumption is wrong-headed…that owners use high values and profit as the reason to buy or sell. The primary reason is to provide a home for family.
I agree with you, up to a point. If people didn’t generally believe (even if only subconsciously) that RE always goes up over reasonable time horizons, and that owning is nearly always better financially than renting, they would compare the merits of owning and renting. Once you “know” that owning is financially better, you can layer on all sorts of other justifications, which may or may not be correct.
For example, I’ve never been given notice by a landlord. As much as I’d like to own a small, badly renovated semi, in a middling (or worse) school district, and only one bus ride to the subway, circumstances (i.e. this bubble) have conspired to keep me liquid, and renting a place with a $2MM view in the 9th richest postal code in the country, with school test scores to match. I just registered my son for the fall, and he’ll be rubbing shoulders with kids whose families pay more in property tax than I pay in rent. Oh, the stigma!
i spotted a HAM family buying multiple homes for their children!
https://upload.wikimedia.org/wikipedia/en/6/6a/HermitCrabs.jpg
Did I wake up in a time warp, San Diego circa 2005? Nope, it’s just formula1.
So we have finally come to the attention of the Australians. This mornings MoneyMorning post advises clients to short the Canadian dollar as commodities are going to fall due to China’s bubble burst and economic slowdown. Well they sure have a lot of damn nerve criticising us. I might just short the Oz in rataliation. They are far more commodity dependant than we are and their housing bubble was worse. I hear that coal and iron ore shipments out of Australia are down and the shipping index backs it up. They should throw stones in a glass house…bunch of snots.
http://www.moneymorning.com.au/20120215/cash-in-as-yet-another-housing-bubble-bursts.html
Good article…Australia is in the same boat as Canada, dependent on China’s resource buying power…if their economy falters no amount of Panda lending will save our economy
Who the hell runs the Real Estate Talks forum? I’ve posted 5, only 1 made it to the boards. I’ve posted many sales that are in trouble to show ETB that his posts are a joke. I’d like to see him here!
he is here (f1/rusty/and some other names)
Vreaa,
Wassup with the moderation now? Slowing down the blog eh?