2782 ETON ST (V935487)
“Old timer” SFH; 1577sqft (with 988 unfinished), 33×125 lot
Asking $719,900
SOLD for $820,000 on 6-March-2012 after 11 days on the market
“I love the house.
It’s a Kits style “arts and crafts” in East Vancouver.
I was looking around a bit in 2005 but not ready to buy. My poor timing cost me one of these on Gravely that was since fully renovated and now worth 1.4M. Funny, it sat on the market for a couple of months in 2005 before selling for…$365,000!”
I remember those days, I was just starting looking in the market in 2005/2006 also with my then-girlfriend. Prices were already going parabolic. If you spent 2 months looking around, prices jumped 5 or 10% in a few weeks. So you reset your price expectation and started over, looked another 2 months at a worse batch of candidates, and it jumped out of reach again. Rinse and repeat. It happened so fast, it was a mad scramble to buy a POS at all cost. I looked at overpriced ex-grow-op dumps where they didn’t even clean the minefield of dog turd off the un-mowed lawn, you had to tread carefully. They knew it would sell regardless. But true most still used that stupid “staging” with the fresh baked bread on the counter, what a pathetic realtor ploy, so fake and nauseating are realtors and their fakery. It seemed like it just had to correct at some point, and I kept saying so back then. I guess I forgot to factor in endless supply of stupid low mortgage rates resulting from the Bank of Canada’s free money for all policy and the big banks that played along. Free money for all equals affordable payments on million dollar mortgages. Oops.
The mania launched as early as 2003.
The price curve hit a new speed of ascent in 2005-2006, and the market very clearly had bubble characteristics by that stage, for all who cared to analyse.
Yes, it was a full fledged bubble in 2003. I moved here from Edmonton in 2003 and couldn’t believe the contrast. It made no sense then and makes exponentially less sense now.
“The mania launched as early as 2003.”
The 2 masterminds of $150M frauds came to live permanently in the LML in 2004, but their wives arrived earlier in 2002 and started speculating in properties, starting with 4 condos at 1111 W Pender. Officially, one of the wives brought in $65k declared at the point of entry when landed in Canada.
quote – “Li testified in the detention hearing last week that she purchased a downtown condominium in 2002 using $65,000 she had brought with her from China. The sale of that apartment was used to finance the first home the family purchased, a North Vancouver house now worth $545,000. A second apartment was bought in January and was intended as an investment or rental place to supplement the family’s income, she said.” – unquote
Clearly they had no problems siphoning hundreds of millions out of China through Europe, US and Asia, but how did they managed to escape the sleepy eyes of FINTRAC, our banks and immigration authorities!? This is just one of thousands of such cases in this decade.
One theory that resonates with me (Schiller’s?) is the triple combo of the dot-com bust, 9/11 and Greenspan’s loose monetary policy had everyone scrambling for safe, understandable assets they could curl up in — homes.
“Greenspan’s loose monetary policy”
That’s the biggest culprit, and the mindless Bank of Canada following its then-daddy Greenspan, and its now-daddy Bernanke.
Ugh. Seems like a lot of work, and on a tiny 33ft lot.
Eton. Sounds fancy.
Jolly funny.
ETON #1 SCHOOL
#1 SCHOOL
GOOD STREET NAME GOOD VALUE!!!! #1 SCHOOL
And when you outgrow Eton you can move to Oxford or Cambridge. There is no LSE option in that part of town.
Vancouver ranked the 56th best place to live in Canada! How come we’re not #1? The study looked at housing costs.
http://www.vancouversun.com/Ottawa+named+best+place+live+Canada+Vancouver+ranked+56th/6329579/story.html
#1 best place to live because of the affordability. Sounds like sour grapes
Ridiculous article in the Globe and Mail today that says we don’t have to worry about high levels of household debt in Canada because of the value of our assets:
‘New take on household debt: Families have ‘big cushion”
“Amid all the fretting over swollen consumer debt comes a different angle from the deputy chief economist at BMO Nesbitt Burns. Douglas Porter isn’t suggesting Canadians load up even more with cheap money, but he does note today that along with household debt, net worth is also climbing.”We have often made the point that much of this debt is being channeled into the purchase of assets, so net worth is still rising – it now stands at a towering 596 per cent of disposable income,” he said.
“The most frequent comeback is that the value of assets can come and go (see U.S. housing), but debt ‘endures.’ But even comparing financial assets to household debt still shows Canadian households overall have a big cushion.”
At the end of last year, financial assets in Canada were worth $4.3-trillion, or more than 400 per cent of disposable income, he added.
“That ratio is in line with the 10- and 15-year average, even after a down year for the TSX,” Mr. Porter said. “Subtracting household debt leaves a net financial asset ratio to income of 255 per cent.”
What a dumb argument. Yes, the value of assets can ‘come and go’ and after the real estate bubble pops much of the value of Canadians’ assets will have vanished. I can’t believe I just read this. It sounds like a very desperate argument.
http://www.theglobeandmail.com/report-on-business/top-business-stories/new-take-on-household-debt-families-have-big-cushion/article2374287/
Well I just heard on the CBC news a few minutes ago that record household debt in Canada is no problem because carrying costs are historically low, thanks to endless dirt cheap mortgage rates. I agree. As long as mortgage rates stay so stupid low, Canadians can and are making their payments. Unfortunately, no one seems in any hurry to rate mortgage rates and put a cost back onto borrowing a dollar. Just a little tinkering being proposed about better proof of income here, or maybe no-cash-back-for-first-time-buyers there. But meanwhile keeping mortgage rates (the #1 culprit) at well below 3%. Penny wise, pound foolish. So, the bubble persists.
what if rates stay low for 10-15 years?
Why not? Banks are still making record profit in this country in spite of the low yield.
F1,
When prices drop, these banks will make shit all with these low interest rates.
F1, banks make money not on their lending rates but on the spread between their borrowing costs and lending rates.
what if rates stay low for 10-15 years?
Expect a lot of brain drain, as the talented move to where the action is.
There is also inflation that BOC has to keep in check.
http://www.theglobeandmail.com/report-on-business/economy/housing/skyrocketing-house-prices-bound-to-come-down-bmo-head-says/article2375914/
“U.S. 10-year Treasury bond rates have increased 60 basis points since September, Mr. Downe said, a sign of upward pressure on interest rates in the future.”
Old Doug Porter at it again. Low savings rates, high debt, no problem because inflated asset prices compensate. The Bank of Canada disagrees.
“The Bank of Canada disagrees.”
Yet they continue to encourage endless borrowing by making money free. They disagree in words, not in actions.
They are fulfilling their mandate. Discontent should be focused on government policy IMO.
Their mandate is to prop up the housing bubble? It seems so. Keeping the target rate at essentially 0 forever is not necessary. Raising rates .25 now, and gradually raising over time until back to something normal within a few short years would not hurt anyone, except this bubble and those who depend on it. It would kill the bubble dead. A cop who shoots an unarmed petty thief is fulfilling his mandate by upholding the laws? No, he is causing more problems than he is solving, he is stepping outside his authority. Same with our illustrious Bank of Canada. Tinker all you want with little policy tweaks, but as long as mortgage rates stay well below 3% (and dropping), the number 1 cause and driver of this bubble remains.
The BoC can’t raise rates because the US isn’t and that would cause our dollar to increase and thereby hurt the export industry. Low rates could be around for years and years. Europe is far from out of the woods yet and the US owes trillions of dollars.
“The BoC can’t raise rates because the US isn’t and that would cause our dollar to increase and thereby hurt the export industry.”
In theory I agree, but in practice I think we could dip a toe in with a .25% hike and see what happens. I don’t think our dollar will go to the moon with such a move. I think we could afford to hike rates at least somewhat above where they are even before the US moves. But yes, the US fed is the #1 enemy in all this, Bank of Canada, the other #1.
exactly reality check.
Canadian interest rates are pegged to US.
Why else do you think Flaherty hasn’t touched them yet?
“Why else do you think Flaherty hasn’t touched them yet?”
Because he has no spine. I maintain that we could raise rates to some extent without killing exports. It’s called balance. Doesn’t have to all or, in this case, nothing.
“Canadian interest rates are pegged to US.”
So is most of our economy.
“Canadian interest rates are pegged to US.”
__________________________________________
“So is most of our economy”.
except housing, right?
you make these seemingly well timed seemingly witty barbs
except they don’t really make any sense
“Canadian interest rates are pegged to US”
Nope. The HKD is pegged to the USD. The Canadian bond market is not pegged to the US bond market.
“Nope. The HKD is pegged to the USD. The Canadian bond market is not pegged to the US bond market”.
you’re mincing words Jesse.
Canadian interest rates are not OFFICIALLY pegged to the US – but have you seen the historical charts from each country? Carbon copies.
The Bank of Canada is run by the US fed.
I spent most of 2005, 2006 travelling around the USA and read those kinds of article about how debt is not a problem because the value of the assets has gone up. What they are missing is that the value has gone up only because the amount of debt has increased. The people writing these articles are stupid or malicious or both plain and simple.
It makes you appreciate people with values and integrity.
If I’m not mistaken, Mohican bought his townhouse in 2006 at a discount from the developer directly. I heard some developers in Surrey are giving discounts of up to 15% – 30%.
oops … discounts for ongoing sale of current projects …. effective right now.
Comparison of trends in average household debt and household assets aren’t complete without factoring in trends in the GINI. The increased assets and increased debts aren’t necessarily going onto the same households’ balance sheets.
http://www.conferenceboard.ca/press/newsrelease/11-09-13/income_gap_between_the_rich_and_poor_increasing_faster_in_canada_than_in_the_united_states.aspx
Ralph: Good point. I take that to mean some households are okay because they haven’t gone into debt to buy homes. They already owned their homes before the bubble started, so they have only had the increased value of the asset, but no increase in debt load.
The higher a family’s net worth, the less likely it is to have a home that’s 500% of net worth and a mortgage that’s 450% of net worth on the household balance sheet.
Eyesthebye is a realtor. Larry told me in person, but would not give me her name. That’s how she gets to post all these details on individual properties. Thats why she is a pumper.
My relative is a realtor and said its dead. A couple got spots with Caucasians buying, yes, not HAM. I’ve used the mlslink.mlxchange which the realtors use to pull up RE info to post on RET, but it never gets posted. I’ve found as many distressed sales that could argue with ETB’s “individual sales” thread. But it doesn’t get posted. So the so called “bulls” stay bullish because if ETB’s lies picking the cherries.
I figured she must be a realtor. She gets the numbers up way too quickly. She denies it however.
Been looking and lowering my expectations since at least 1999. This despite my savings going up. Crazy. It is impossible for ordinary people to save fast enough to buy comfortably in this town.
On related note, many will probably find this (40 minute) documentary interesting:
http://realestate4ransom.com/
It is based on the Australian experience but could easily apply to Vancouver. The theme, in a nutshell, is tax land not labour to kill speculation and encourage innovation. Harsh medicine, but probably necessary. Unlikely to be implemented as long as most voters are property speculators.
I’ve been arguing this for some time. Henry George was right, we need to replace income tax with a Land Value Tax.
BitterRenter said: “Unlikely to be implemented as long as most voters are property speculators.”
—
Agreed.
policy makers are incapable of acting to deflate the bubble, except maybe unintentionally. the situation benefits the power structure and there isn’t the political will to overturn that. eg. see what goes on in europe. exception is china and that has to be ironic for people here who believe salvation will come from where the central govt admits to and is actively trying to crush property bubble. this thing will end on its own, even if there is further intervention to keep it going. also, rates will definitely not stay low forever. eg. see hockey sticks in eu zone yields over last 12 months – and that is with heavy intervention to keep them down. this is our future. just when.
great comment
fuck you, rusty
Basement Suite – - > But how can rates stay low forever? Won’t they have to tame inflation at some point? It might notbe out of control now but it will be eventually(sooner than later). Am I missing something?
“also, rates will definitely not stay low forever”
I disagree with that.
u -> eu vacation – greece, italy, france, spain, portugal
Basement Suite – - > But how can rates stay low forever? Won’t they have to tame inflation at some point? It might notbe out of control now but it will be eventually(sooner than later). Am I missing something? …….
Chubster – If you mean by the time we (esp the US) eventually default thanks to all this debt, won’t it be a bit late.
HD – The Bank of Canada and US fed don’t care about inflation. If it rises by one measuring stick, they change the stick. If it rises by that stick, they say it will flatten in a few months anyway (when they invent a new stick), so don’t worry about it. Inflation is the bottom of their priorities.
@basement. yes, probably too late. i came to that conclusion when i thought about stockman saying how the ship has gone so far off course that the collective political apparatus is no longer capable of even comprehending the gap, to say nothing of closing it. i see examples of this every day, every where. denial in eu, denial in van, what f1 goes on about despite being a regular here – all different flavors of the same. so far, only examples i see where the apparatus managed to both understand the pb and then try doing the right thing are iceland and china. as for the rest, it will take some serious pain to get changes. so get set for that. game on trying to frontrun the consequences of fed policy. forget RE except for the amusement factor – there’s no good angle on it until after it has cracked wide open.
Vreaa, here’s a great picture you might want to use in a future post.
http://media.npr.org/assets/img/2012/03/15/correction-01-01_custom.jpg?t=1331856886&s=3
It’s from here:
http://www.npr.org/blogs/money/2012/03/15/148705139/econ-posters?ft=1&f=93559255
Jeff -> Literally LOLed at that elegant graphic… thanks… must use.
Check our this MLS listing my friend let me know about. I’m from the neighbourhood originally, HAM ground zero as I like to think of Dunbar now. Anyway, the owner heard a “rumor” of an upscale retirement home going up on that block and decided to ask $2.5 Million for this rather average Westside home. Also it’s across the street from busy Stong’s market, so you will find parking rather diffcult as there are no restrictions on Dunbar or 30th for residents. As an aside Stong’s will be bulldozed to make room for condos as soon as the lease is up in a few years so look forward to condo balconies looking down into the already very exposed back yard. On the upside most of these condos will probably be uninhabited and held by offshore speculators so no one will be looking down on you. I like to call this kind of ridiculous asking price activity from long time westsiders “Fishing” They cast out a massive asking price and expect some ignorant HAM sucker or local speculator to bite. There is no urgency to sell, but they want to cash in on the insanity of the last couple years if possible. Realtors seem more than willing to oblige as usual and even regurgitate unsubstatiated dinner party rumors as selling points.
http://www.realtor.ca/propertyDetails.aspx?propertyId=11236541&PidKey=-1919746230
Interesting. If Stong’s goes, that’ll be another Ridge/Varsity Lanes story … the ‘hollowing out’ of the West-side.
Like the ‘virginal’ basement suite (“never rented”).
The douglas porter comment was household wealth ex housing and net of debt. His idea was if housing craters and the debt remains… How do we look. Problem is 4.3 trillion wealth is not equally spread out. Not even close, at least RE is owned by 70% of society. Non housing wealth is closely held by tiny fraction.
Land tax also achieves the goal of keeping the construction industry going while reducing speculation.
Bellweather of the OSFI http://www.canadianmortgagetrends.com/canadian_mortgage_trends/2012/03/tougher-mortgage-qualifications-on-the-horizon.html
Link appreciated. Thanks Derp.
On a different subject, here is a radio interview of Craig Alexander, Vancouver’s TD bank economist and his remarks on local housing and the BC Economy. Takes about 5 minutes to run. Click on at the 37 minute mark to hear his commentary.
http://talkdigitalnetwork.com/2012/03/this-week-in-money-22/