“John Pasalis, broker owner of Realosophy Realty Inc., a Toronto-area real estate brokerage, cautioned that the bidding wars may not be as lucrative as they seem.
“One thing to keep in mind is the houses that are getting pretty crazy bidding wars are underpriced anywhere from five to 10 per cent,” he said. “The list prices aren’t always an indication of what they’re actually worth.”
Pasalis said his company has seen “multiple offers almost non-stop for years now,” including as much as 10 or more buyers bidding on a house.
“You just get these spikes and valleys in the market where things get a little bit more heated and demand starts outstripping supply as things get faster,” he explained.
- from ‘B.C. home buyers unwilling to enter ‘bidding war’: BMO report’, Vancouver Sun, 19 Apr 2012, that noted that 23% of BC poll respondents indicated that they’d be prepared to enter into a bidding war to “battle for their dream home”.
[hat-tip space889]
Most Recent Comments:
- Nemesis on Chat Thread
- Hymie Garshman on Taking A Break
- Nemesis on Chat Thread
- Nemesis on Chat Thread
- Nemesis on Chat Thread
- Nemesis on Chat Thread
- Real Estate Tsunami on Chat Thread
- Real Estate Tsunami on Chat Thread
- Real Estate Tsunami on Chat Thread
- Farmer on Chat Thread
- Farmer on Chat Thread
- Farmer on Chat Thread
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
-
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.”
Follow vreaa on twitter
- Chat Thread wp.me/pcq1o-5vD 3 weeks ago
VREAArchives
- April 2013
- March 2013
- February 2013
- January 2013
- December 2012
- November 2012
- October 2012
- September 2012
- August 2012
- July 2012
- June 2012
- May 2012
- April 2012
- March 2012
- February 2012
- January 2012
- December 2011
- November 2011
- October 2011
- September 2011
- August 2011
- July 2011
- June 2011
- May 2011
- April 2011
- March 2011
- February 2011
- January 2011
- December 2010
- November 2010
- October 2010
- September 2010
- August 2010
- July 2010
- June 2010
- May 2010
- April 2010
- March 2010
- February 2010
- January 2010
- December 2009
- November 2009
- October 2009
- September 2009
- August 2009
- June 2009
- May 2009
- April 2009
- March 2009
- February 2009
- January 2009
- October 2008
- September 2008
- July 2008
- June 2008
- May 2008
- April 2008
- March 2008
- February 2008
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
It’s one think to claim you would not go to war, quite another quite another to let another take what property you rationalize must be yours.
Ah yes. Bidding wars are perfectly normal because the listings are underpriced. In other words, go ahead and bid it up to the “true value”.
What would you expect a realtor to say? They’ve deliberately created this environment and milked it for all it’s worth. It’s become normal because they’ve succeeded in making it normal.
Numerous detailed articles explaining precisely how a seller can create a bidding war have appeared in the media over the past 5 years or so. It’s all been part of a very deliberate and well-organized effort to turn speculative mania into mainstream behaviour.
What about getting into a bidding war to battle for a too-small fixer-upper in a sketchy neighbourhood, hoping to lever it into your dream home later, and worried that if you don’t buy something, somewhere, you’ll NEVER get on the property ladder?
I recently bid on an interior property. They had just dropped 12% off the asking price. My initial bid was 6.5% lower then that.
Second bidder came in made a bid and realised that there was a competing bid. He then throws a second bid in higher then the reduced price.
I never bid off my initial offer. He ended up paying $75,000 more then he needed to. Dumb schmuck. Vendor won, dumb buyer lost.
The real estate industry play you, the average punter for an idiot and you have been so conditioned, that you fall for it every time.
You need to be very hard nosed, get in there and offer what the property is worth and that is it. And then walk away.
Raging Ranter is right. “They’ve deliberately created this environment and milked it for all it’s worth. It’s become normal because they’ve succeeded in making it normal. ”
Until buyers change that enviroment and leave all emotion and hormones at home they are going to screw you over.
Eventually they will run out of hormone laced buyers and then a different world will start.
Oh and as a comparitive the property sold at a comparative price to similiar properties that sold in 2005 and 2006 in the same street. In the interior prices are falling, but you need to know your stuff and be very hard nosed.
However at the same time there are many properties in that same market that are asking Vancouver bubble prices. Some of them have been on the market for 1,2,3,4 years. If somebody tries to tell you that you should buy at those prices, imagine them reaching into your wallet and stealing that money from you. If that makes you angry then you should be.
The glass is overflowing at VanCity http://www.vancouversun.com/business/mortgages/home+buyer+bonus+sure+spur+first+timers+mortgage+expert/6302642/story.html
I just about threw up reading that. How does it feel to be a renter in BC knowing your taxes are being used to subsidize someone’s urge for house porn? If Ontario does anything like that, I will FREAK.
Check out this comment that was left by someone very angry at other posters who had the audacity to suggest interest rates might rise, and that Vancouver is in a housing bubble:
SC_Guy
7:41 AM on 4/20/2012
@sinner69
6% is the ‘normal’…in what world? the ‘normal’ is more like 3-4% on the HIGH end. You can’t include the ridiculous rates of the 80′s, because that will never happen again. The central banks won’t allow it because the global economy couldn’t handle it. Take your fear mongering elsewhere…please.
@MikeD5
You too. The average drop was $90K? Don’t believe so, but even if it were, the average sale price was well north of $1M….so……..your point? All you bubble pushers are 1d10ts, plain and simple. Yes, there are many places in North America that have real estate bubbles, or real estate that moves on a boom-bust cycle. Vancouver is NOT one of them. What part of “they aren’t making any more land’ and ‘supply & demand’ don’t you get? Just because you have a menial (or union) job, and your prospects for increased earnings are nil (or tied to what your union can hold your company or the province hostage for), doesn’t mean houses are overpriced.
That’s what happens when you try to interfere with someone’s house porn fantasies. It’s like you insulted their religion. They get angry.
I figured out what real estate bears are missing that real estate bulls seem to radiate like it’s nature: conviction.
Which begs:
“The best lack all conviction, while the worst are filled with passionate intensity” ~ Wm Butler Yeats
“What part of “they aren’t making any more land’ and ‘supply & demand’ don’t you get”?
this is true. I’ve had some posters comment that there is plenty of vacant land in Vancouver to build new detached subdivisions.
Lesson here…don’t get in the way of a renters bubble porn fantasy
f1, demonstrating lasting conviction.
Please reference anybody who has stated that “there is plenty of vacant land in Vancouver to build new detached subdivisions”.
Links please.
Complete straw-man argument (again!).
You’re the one saying that it’s all about supply and demand, not the bears.
Most bears simply believe that existing homes are overpriced by a factor of 2 or 3 (or more!) and that they will correct. We don’t need new-builds for that to happen.
And, while you’re at it, you never have explained what you meant when you said:
“…where the seller has accepted less on sale than the total equity.” [17 Apr 2012]
Please explain.
Question for F1.
Lets say you are newly grad and landed a job making average wage for a single person in Vancouver. Lets be generous and say you have 60k dp and no student or other major debt.
What would your plan of action be? You say the condo game is for losers, but obviously you cannot afford a SFH, what would you do if you were in this situation?
Well, as it happens… somewhere on the planet… every day, in fact… the cauldrons of ‘Hephaestus’ spew forth quite a lot of new ‘real estate’…
PS – a couple of years or so after St. Helen’s blew… ‘Nem’ spiralled a 172 into the ‘bowl’ with some rather cheeky vulcanologists… none of whom, by the way, would ever advise skiing Baker. DearReaders may draw their own conclusions as regards risk/reward.
“Spiraled a 172″???
Nem, you lost me again. Are you talking about going into a crater by jumping from a plane or throwing a paper model over the edge to see how far it flies?
I checked to see if a 172 was a type of skidoo.
Killing myself laughing. Nemesis leaves enough to our imaginations we never really know what he has done. Its all a great guessing game. Maybe he was rapelling down the cliff face. Spiraling a 172 sounds dangerous to me.
had a classmate who occasionally flew paraglider into the st helens crater. said it was a riot having to rally race out of the park to avoid the rangers.
Got it! Nem’s a pilot. Was flying a Cessna 172, 4 seater, high wing. But into a crater? And you call that cheeky. Holy crap, man, that’s suicidal. Did you take any photos?
http://en.wikipedia.org/wiki/Cessna_172
talk about the power of their conviction vreaa, I didn’t create a whole web blog devoted to my position.
The ‘lots of land’ comment was not at this site – and no, I won’t spend 1/2 hour digging it up – suffice to say their are some that deny the land shortage fact.
In fact, the only argument your bloggers want to accept is that low interest rates have cranked prices to the statosphere. All the other reasons such as land, immigration, development mix, etc. are dismissed by your bloggers because there is no likelihood they will ever change. So when asked for the reasons why home prices are 2-3 times are “overpriced” they respond with the default argument because it’s the only one that gives them hope.
I’m not going to continue sniping with you on this ad nauseum vreaa. Detached prces are high because there is on land to add supply, increasing demand in the form of immigration. Condo prices are high because developers are setting their prices there – and people keep buying them for whatever reasons (living, investment, family, etc.)
do you think there’s a dos equis factor at work here?
“I’m not going to continue sniping with you on this ad nauseum”
Noted.
@f1. hope is history. no worries, cause rockabilly is universal and will solve everything, especially everywhere new land is created. tip nem for the reminder
VREAA, tell me that’s not Cam Good’s latest sales stunt.
“If I sell a dozen condos in the next 4 hours, I’ll put on a red superhero outfit and surf on top of a bi-plane going 140 MPH!! Get 11 friends together and get those deposits down now! Are you game? Or are you a renter?
Shame on ‘Nem’… I almost forgot… whether it’s Hephaestus or Poseidon who eventually decides to visit his wrath upon YVR… there could be a ‘wee’ problem digging out afterwards… Of course, when you’re peeling off 10BigOnes a go from the PublicWad to promote HomeOwnership you’ve got to make savings somewhere…
[CBC] – Funding cut to Vancouver rescue team: Ottawa axes $2.1M for urban search and rescue squads
http://tinyurl.com/82dddsd
Barring those two, Narcissus might do the job all alone.
I have a friend in North York area of Toronto, mid 20s, prob makes 50-60k a year, he inherited 2 paid off SFH from his deceased father. 1 is a rental and one is for primary residence.
He recently sold the rental and got over 1 million through a bidding war.
The reason he sold was cause he was drowning in his own personal bills. Car payments, student loans, primary residence bills, etc, and he is not a big spender other than his car.
The rental unit he says was self contained financially. So if he could not afford to live in a paid off house, what chance does the average person have. Nice payday though, others would not be as lucky.
When higher prices increase demand, it’s time to exit the market because rational isn’t on the menu.
Its how you know children are doing the buying. As soon as you tell them they can’t have something then they want it twice as bad.
I came across a cool thread on a site called Skyscraperpage.com that shows the pictures of all the proposed new high-rises under construction. Some of those new buildings are beautiful (not weakening here, just admiring beauty). Well anyway, I discovered that Toronto is not the only place with a lot of applications. Vancouver ranks right up there with the 4th largest number of high rise buildings in North America. Seems fitting for an earthquake zone dontcha think?
Artist renderings of some of the selection of incoming high rises
http://forum.skyscraperpage.com/showthread.php?t=138119
Database of buildings- those proposed
http://skyscraperpage.com/cities/?cityID=1
“Seems fitting for an earthquake zone dontcha think?”
Seismic engineering of skyscrapers is pretty well understood at this point. Otherwise Tokyo would not have a population of 20 million.
Unfortunately, most of the West End built prior to the 70′s is not up to code. I suspect quite a few buildings built since then would not make the grade either. The Japanese, as I understand it, take their earthquake code quite a bit more seriously than we do here. In any event, they get regular tests on their progress. We will only get one very big one and I will say a little prayer that my friends and family get through it.