“My sister is getting married and planning their wedding. With a house and apartment in Vancouver and a condo at Whistler you would think they were flush but no… The entire wedding is on their line of credit and they are “borrowing” wedding rings until they can afford to buy real ones as they are maxed on what they can get on their HELOC’s. When I asked them why they don’t sell the condo or apartment I was told they need them to keep going up in value. I’ve given up giving guidance anymore but felt chills when I realized that they need the places to go up in value so they can increase their credit lines to maintain their current lifestyle….god forbid what will happen to them if (when) the value declines.”
- ChemGuy at VREAA 5 Apr 2012 1:30pm
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Type of Anecdote
- 01. He Said, She Said (247)
- 02. Profiting from the Boom (441)
- 03. Changed my Life (103)
- 04. Changed my Career (38)
- 05. Where do Buyers get the money? (958)
- 06. Held my Nose and Leapt (96)
- 07. Avoiding Vancouver (375)
- 08. Overextended Buyers (1182)
- 09. Delaying Buying (315)
- 10. Demoralized Renters? (362)
- 11. Regrets about Investing in RE (417)
- 12. Effects of Development (274)
- 13. 2010 Olympics Related (74)
- 14. Social Effects of the Boom (1255)
- 15. Misallocation of Resources (958)
- 16. Missed The Boat? (236)
- 17. The Froogle Scott Chronicles (27)
- 18. Spot The Speculator (171)
- 19. BlastRadiusPostCards (17)
- 20. The Limitless Demand Argument For Ongoing Market Strength (70)
- 21. Vancouver RE-Verse [Found Poems] (8)
- 22. RE References In Popular Culture (41)
- 23. Jumping The Shark (1)
- 24. Policies On Housing (10)
- 25. Epigrams For The Bubble (1)
- 26. Premature Calls Of "Bottom" (3)
- 27. Seller Panic (3)
- 28. Erroneous Causation Theories For Falling Prices (7)
- 29. Bubblespeak (1)
- Uncategorized (176)
Blogroll
- 01 Vancouver Condo Info
- 02 AmericaCanada [retired, no archive]
- 03 Housing Analysis
- 04 RealEstateTalks BC
- 05 Vancouver RE and then some
- 06 Whispers from the Village on the Edge of the Rainforest
- 07 Greater Fool
- 08 Canada Bubble
- 09 Rob Chipman's blog
- 10 YatterMatters
- 11 condohype [retired; archives available]
- 12 vancouver (un)real estate
- 13 Agent Will's Stats [retired]
- 14 Landlord Rescue
- 15 The Economic Analyst
- 16 Canadian Housing Price Charts
- 17 Hoodsurf [retired Jun 2011]
- 18 World Housing Bubble
- 19 Vancouver Price Drop
- 20 North American Economics
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Latest Anecdotes:
- 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%.
- 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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- Chat Thread wp.me/pcq1o-5vD 3 weeks ago
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Tags
Anecdotes Banks Bears blogs British Columbia Bubble Bulls buyers Canada Capitulation China CMHC Construction Debt Economy Employment Fear Foreign buyers Fundamentals Government Housing Interest Rates Landlords Life Media Mortgage brokers Okanagan Olympics Ownership Prediction Real Estate Realtors Relationships Rent Retirement RE_ATM sellers Sentiment Speculators Toronto US Vancouver Victoria Visual Anecdote Whistler
Idiots! 😱
One of the 10%, according to Overlord Carney.
supposing c and f were genuine …
Carney and Flaherty used the “turbo” bonus, and now leading in MarioKart, they, and we, actually have to start driving. I do think the dudes recognize it was a temporary thing.
I still believe low rates are no free lunch. I find it fascinating that so many of the articles and editorials published in Canada are affixed on the notion that it will be higher rates that will kill Canada’s overburdened housing sector. I disagree it is a necessary condition, and back it up with no relevant higher degree to speak of. That should be enough.
…”God forbid what will happen to them if (when) the value declines.”…
No worries… just ‘FlipThatPlot’… for, as it happens, DeadOrAlive – when it comes to YVR – there’s no escaping the ‘market’ (albeit, on the BrighterSide, current residents of ShaughnessyMausoleums who get in on the ‘PreSales’ will feel right at home)…
Quote of TheDay!
“If you want to be in Vancouver, which a lot of people do, we’re the only option.” – Mountain View Cemetary Manager Glen Hodges
[G&M] – In Vancouver, real estate to die for
“It’s some of the hottest real estate in one of Vancouver’s most in-demand neighbourhoods, and it’s up for sale for the first time in nearly a quarter century.”…
http://tinyurl.com/7bkpv7l
Meanwhile, back in Blighty… (Déjà vu, DearReaders?)
[FT] – London property: Door to a cloistered world
…”Liam Bailey, head of residential research at Knight Frank, a rival agency, says: “The wave of money that has been flowing into London property over the past three years has been supercharged by one key theme – political risk. The world’s wealthy, especially in emerging markets, are nervous about arbitrary rule and policy change in their home countries and how this might affect their ability to protect their wealth. So they are moving money, and increasingly their families, to more stable environments. These house purchases are effectively triple A-rated bond investments – which happen to have a London address on them.”
If homes that were once just well-located bricks and mortar have morphed into something more akin to a reserve currency, that creates a big distortion to the residential upper tier.
However, Mr Bailey is among a growing band of property experts suggesting that London’s prime market – the top 5 per cent of the housing stock by price – is barely at the start of a sustained rally, underpinned by increasing uncertainty elsewhere in the world and the resulting push towards personal wealth preservation.”….
http://tinyurl.com/7hgaahd
Let’s just say when I die I’ll be in Vancouver, at least my carbon will be, after being pushed though the palms of the Igors in the UBC dungeons. A most fitting end for one involved in the sciences.
Alternatively, Jesse – you could always opt for Plastination™ and ‘Tour’ like a RockStar!… Dr. Gunther von Hagens is always looking for volunteers!…
http://tinyurl.com/zbblo
The chinese carbon will squeeze you out.
I’d check the carbon content of anything from China. Too much or too little and stuff tends to… er… crash
Funny you should say that, Jesse…
I originally thought to post this on your TeraNet offerings… Because… Well… Graphics will only take you so far*…
*Senor Cabellero, if you’re reading this… You’ll know why I’m going to ‘sport’ you a really Sauve Chute OneDay, when we eventually ‘Do The Dirty’ and see if she’s ‘AeroB’.
Redux… For ‘Purists’*… In the unlikely event….
*Take a ‘miniature’ from the cart, lean in to your SeatMate… HoldHands… Give each other a TrulyLong Deep’Frenchie’ (LastChanceSaloon – GenderBeDamned) …CrossYourFingers… &Remember… The ReallyImportantStuff…
And full circle, who gives a flying f*ck if you have expensive wedding bands when the rudder develops a hairline crack?
Or an O-ring failure in your solid rocket booster on take-off.
http://en.wikipedia.org/wiki/Space_Shuttle_Challenger_disaster
Yeah. I swore like hell that day too. Could not believe it was such a stupid mistake. Same as pumping up the countries home values to boost the economy but watching instead at lift-off only to see it all burst into flames.
die now or be priced out forever
Damn but I wish I’d written that!
Speaking of Whistler, at the last family dinner, my sister in law was moaning about the latest rental numbers from her Whistler condo-apparently they are horrible for the first 6 months of the year. I don’t know why she even bothers, they’ve never made a dime on this so-called “investment”. By my estimation, they’ve lost about $100k in the past 10 years. Right now, the condo’s only worth what they paid for it (ten years ago). I expect it to keep going down. Negative equity IS happening in BC, despite what global news tells us-I know someone in Kelowna who has a condo she bought for around $250k, is now worth $165k. The mortgage is still well over $240k (she refinanced, didn’t put down much, and the CMHC fee added to the mortgage as well). I don’t know why Global TV keeps flaunting real estate-what about the stories from the rest of the province where people are clearly pessimistic about real estate? My last visit to the Okanagan, I had people tell me things like “I couldn’t sell it today for what I paid for it” and “The house is worth $100k less than what it was a year and a half ago”. I don’t know why Global TV keeps acting like real estate’s such a hot commodity, when clearly the rest of the province is in the dumps. Guess they want to keep that part a secret so people continue to buy buy buy in Vancouver! (sorry, a bit off topic)
Why? Because…
…This segment brought to you by Re/Max.
True enough. When I tell people in Vancouver about the Okanagan, or Whistler, or Victoria, (or Calgary), I just get blank stares.
weekend OT light crystalline fare, nice to share … something for the ladies and lady-likes alike, i like
gentlemens, if your ears matter, the gwyneth analog is not credible
Nice! Thanks, Chubster.
apparently somewhere in the book of mormon is written thou shalt be hot
http://www.hotmormons.net/default.htm
i am conducting a personal experiment to see if its the abstinence. leave you to appreciate the mild ironies of this related number i found
it’s just nice to know the world isn’t full of seriosos. now if someone could tie this thread back to the topic at hand, i can be absolved. ciao.
Average total consumer debt, excluding mortgage debt, by province, as of Q4 2011:
highest:
$37,276 British Columbia
$33,643 Alberta
$27,755 Saskatchewan
lowest:
$18,376 Quebec
$19,959 Manitoba
$22,734 New Brunswick
Average consumer debt excluding mortgages has been rising steadily for 6.5 years, although the last quarter showed a slowing of the pace to less than 1%
“The continued deceleration in the annual growth of total debt is the bigger story” Thomas Higgins, TransUnion VP of Analytics and Decision Services.
credit data from TransUnion taken from a story in Financial Times, February 23, 2012
Yet another credit bubble reaching peak.
OK, maybe I can add a song to the growing list here. Not my usual style but here is Don Ho, singing “Tiny Bubbles”. It is the classic bubble song. You know, bubbles are great if you can just contain them to beer, wine and champagne!
“The continued deceleration in the annual growth of total debt is the bigger story” Thomas Higgins, TransUnion VP of Analytics and Decision Services.
That IS the bigger story. My guess is that most will assume that decelerating credit creation is a good thing – it isn’t.
http://theeconomiccollapseblog.com/archives/credit-crunch-2010
It’s hot stat, i agree. When people begin to reduce their debt they are saying there isn’t anything worth investing. Banks know this acutely, and will raise interest rates accordingly. I hammered my personal debt down by 38% in the last week of March to drive it home… Is there anything worth investing in without assuming substantial downside risk, including precious metals? I don’t think there is.
Man. Once again I’m below average. This time by $37,276, seemingly.
Sometimes this all makes me feel like a chump. I’m worried that, when the shoes really start to fall, the turkeys with the debt will get help from the gub’mint. At my expense.
It happened in the Excited States. No reason it couldn’t here.
I can feel the pain. It really it emotionally difficult to watch people you care about swirl into the abyss and feel so powerless.
When they finally feel powerless that’s a good sign. Until then, let them learn.
I have no debt and am sick and tired of constantly subsidizing (and by corrollary, encouraging) these status seeking mathematically illiterate fools against my will through government sibsidies and zero interest rates. All the bragging and “advice” that I have had to tolerate for the last half decade will be moot when the foreclosure wave starts rolling. I can’t wait. Borrow all you want. buy Buy BUY!… Idiots.
If you are mad at them now, Ridiculous, then you will be furious after they lose their houses to a foreclosure and start competing against you for the best rentals with the same entitled attitude that wrecked the economy in the first place.
…. or when the losers (winners?) whine and whine to the government for help, begging for loan writedown (like they do down south). Your tax dollars at work, of course.
Sucks but it’s true, Gokou3.
Renters will subsidize home-owners through taxation, subsidy and various transfer payments thus ensuring the losses of those who were wasteful and profligate are never fully crystallized while gaining no absolute benefit for themselves.
In other words…you got screwed if you didn’t play the game,
“you got screwed if you didn’t play the game”
I think Taleb wrote, and I paraphrase, I take comfort in knowing that my more earthly path, hedged appropriately, has a better outcome than the median of those who flew too close to the sun.
There will always be those who will succeed and excel in spades after being reckless but lucky. You can never hope to beat these, but will beat their countless fallen comrades by a country mile.
Happily you seem to have appreciated my frustration expressed in the last line of my prior comment, Jesse. I think it is just rotten that those who were behaving in a fiscally prudent way, saving and investing, will now bear more of the weight of the downfall than those who acted foolishly and in haste.
@Farmer, I think that those who acted “foolishly and in haste” (the “grasshoppers”) will end up with, in net, a larger burden than the “ants”. This was certainly true in the US — there simply wasn’t enough $ to make a massive dent in the debt burdens of overextended homeowners even though more than a few cramdowns and bailouts have been used. I don’t have the numbers in front of me but I do recall reading that most (not all) of the deleveraging to date has been borne by the debt holders and not by the taxpayers.
The ants will end up giving up some of their savings for sure, (and we are already — look at negative real rates!) but it’s likely less than the average grasshopper. And yes a few grasshoppers will get away with it. Life’s not fair but hey still better an ant, so goes the fable.
Idiots. They are borrowing money for a wedding when they could borrow for a downpayment and buy another condo. The more mortgages you have the more upside you get. Obvious, eh?
Vreaa and fellow readers, have you seen this article? Sorry if it’s been discussed here already, but I am so blown away I just had to point it out…
http://www.vancouversun.com/business/First+time+buyers+have+options+that+important+down+payment/6419013/story.html#ixzz1rSvUmsEY
Actual advice from one of the “mortgage experts” quoted: “Buyers can borrow the down payment through a line of credit, personal loan or possibly cash advances against a CREDIT CARD.”
Yes, people. Interest on your credit card is 18%, but it’s all good, because Vancouver real estate is going to the moon!
Wow , I did the same thing when I was 21 – used my credit card for a downpayment . The only difference is that was for a motorcycle!
Speaking of which….since we are now at the top of the asset cycle in this country it is a good time to consider unloading anything that would serve you better as cash in the bank. Waiting until later will just yield lesser and lesser amounts over time. Especially as housing deflates. Examples are Motorhomes, second cars, the antique that you just know is worth a fortune and any resort getaways or Timeshares. Consumers are already stretched but still “feel” wealthy as the correction has not become obvious to the general public yet. Imagine how much poorer they will feel as housing prices decline and job losses begin to mount. You get the point. For all things there is a season and this is the season to get rid of assets that could potentially see steep declines in the coming months and years……or you could do like most other people. Hold on and sell at the bottom when you really, really need the extra cash.
[hopefully that did not post twice...computer is haywire today]
“Buyers can borrow the down payment through a line of credit, personal loan or possibly cash advances against a CREDIT CARD.”
Yay! Best banking system EVER!