“A friend in Squamish is trying to sell his place…..not a single viewing even after an open house. They are leaving Squamish and so have to sell. Now they are looking at drastic price reductions (below their existing mortgage) or holding it as a rental until the ‘market turns around’ (his words, not mine). I feel for the guy and his family, but this is an example of what happens when you buy at the peak of a bubble. The Aqua development in Squamish still has units available, even after the significant price reductions. There are early purchasers in there that paid nearly a 100k more for the privilege of ownership than a present day buyer.”
- Anonymous at VCI 14 July 2012 10:29am
Most Recent Comments:
- cash loans on South Granville SFH Example – Price Rise Of 120% In Two Years
- paydayloansyeehaw on Erroneous Theories For Falling Prices #5 – Tightening Of Mortgage Rules Caused The Crash
- payday loans on Peppy Ads – “Buying a Home Is Like A Sport. Meet Your Coach. Win The Real Estate Game.”
- 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
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
The market is perfectly efficient… at capturing consumer surplus.
first comment is that guy “Farmer” is an ignorant asshole who obviously has more money than he can spend.
I firmly believe that Squamish City is responsible for hyping up the city and attracting people under false pretences. Pre Olympic lies of a guaranteed boom in Squamish has led lots of peole in Squamish to loose thousand and even over hundred thousand on their “investments”
I don’t know,
Farmer sounds pretty smart (as good farmers tend to be; they feed us all, after all) so yeah, he might have a lot of cash as a result of his life’s work.
I know it’s terrible when a thousand (people?) become loose.
A house is not an investment – as my father took great pains to drum into my mind: “it’s a liability, like a car”
Your friend sounds like a dumbass trying to cash a lottery ticket.
You’re barely literate, so I’ll let you figure out the nicknames for Squamish yourself.
Farmer > you
when did they buy?
Sadly, this is the type of story the MSM should be covering as opposed to the erroneous endless stream of coverage indicating stable market with stable prices, and implied low risk.
Holding it as a rental until the market turns around……
Funny stuff. That sentiment is very common amongst owners who simply cannot appreciate just how overvalued homes are in todays market. Their idea seems sound on the surface. Prices go up. Prices go down. So therefore “we” will not sell at a loss until the market gets bullish and turns around again (meaning the central belief is that home prices always go up…..eventually).
The folly is unmistakable and this sad view which is widely held will eventually spell disaster for many home owners who will ultimately fall underwater on the mortgage and perhaps even be forced to sell at very significant losses or bankrupt following a foreclosure.
You cannot educate them though.
Pride stands in the way. As does mothers milk, apple pie, folklore, myth and the lies of the real estate cabal who keep pumping out nonsense about the value of the new HPI -Home Price Index.
Balanced markets, my ass. Incredibly, people with no background in economics, accounting, real estate or market dynamics seem to think they know better than all the experts about what will happen next. They don’t have a single chart or any evidence to work with and yet they stupidly cling to ideas from another generation. Too few understand how the long run business cycles have now turned decisively against the premise of building wealth through property acquisitions.
And so they hold. And so they do not profit at the top. And so they fail.
They just don’t get the market dynamics. Have no concept of bubble deflations and house price corrections where price/income or rent/price are telling them in no uncertain terms to run for the hills. They have no idea how bubbles burst nor how low prices can go. So they know better and will not consider good advice.
God love them. Poor saps they are.
Hope springs eternal though. In their minds they will just tough it out and continue to make payments until the planets align in favour of home price gains sometime in the unknown future (sorry Paul, just a little dig at the astrology thingy there).
But the bears are being vindicated now. Every single day. Still, the fools hold fast to beliefs that are as outdated and tired as Justin Bieber’s music. We told them so but they would not hear it. The bloggers on this site put forward a wealth of data on why the top was in and it was time to escape….
Damn fools would not listen. Let them fail.
“holding it as a rental until the ‘market turns around’”
My favourite catch phrase of this bubble. Every time I hear this I take a drinksie. I love you guyzh.
I’m hoping this “flood” of new rental inventory might put downward pressure on local rents, or at least discourage increases.
“new rental inventory might put downward pressure on local rents”
Based on the research I’ve done rents do not react strongly to dwelling supply; rather increases continue even when there is significant oversupply. In San Diego, which Rich Toscano tracks closely, there was a slowdown in rental gains through their bear market but it was something like 100bps lower (say 1.5% rise instead of 2.5%).
Why was this? Toscano had a few ideas (I’ll have to dig up his posts and arguments), but IIRC they were that the majority of those renting will still see income gains even in a recession and can afford rental increases. The costs of commissioning a suite to rent is enough that many units will remain unrented or go into foreclosure and this tempers the availability somewhat. In San Diego, like Vancouver, there is likely an undercurrent of rentals through house sharing and attached suites that will be more elastic to demand — this means the vacancy rate won’t spike significantly as marginal landlords who cannot find good tenants simply don’t rent their rooms out. As an example.
In Vancouver the basement suite dynamic is in full force — basement suites are commissioned and decommissioned all the time and landlords of these units can be sensitive to finding good stable tenants. If they have no luck with this they will keep the unit vacant and tenants are forced to look elsewhere. In most cases the cash flow from a suite isn’t that much in terms of add to income and doing without is possible.
Just some thoughts on the matter. My prediction is that rents will continue to increase through a sales slump. The real pain will be wrought through those who cannot find good tenants — they will either face rent payment issues or dwelling damage that forces margins lower than budgeted. The headline rent will look like it’s increasing but margins will get squeezed through “credit” degradation.
The cynic in me thinks the way by which prices will revert will be a combination of “stuff that cannot happen”, including rents increasing at the inflation rate, mortgage rates remaining low, a slowdown in construction starts, and population growth, all in the face of falling prices. It won’t make any sense on the outside based on those measures; my thought is these measures are ancillary to the economy but it misses the mark to call them “fundamentals”.
Sorry for the long answer.
Hi Jesse, no need to apologize, thanks for the thoughtful reply.
I personally know two women who are now illustrious landlords. The company we worked for shut down, but luckily they were able to find other work, so they are not in the worst possible spot. One of them lived large with HELOC for years, the other was a bit more conservative, but they are both waiting for the market to turn around to capture their capital gains, or simply break even. The old thinking that they have neither made money nor lost money unless they sell keeps, them thinking they are in good shape. Every day the constant distraction of making a living will keep them from taking the necessary steps to extricate themselves from the inevitable financial nightmare awaiting them.
“The old thinking that they have neither made money nor lost money unless they sell keeps, them thinking they are in good shape.”
— This statement is why things will turn exponentially worse. Once the decline happens enough that people cannot reasonably see appreciation in a tolerable period of time, then they’ll look to exit through whatever means that takes. What’s the number 10%, 20%, 30%? At some number, dealing with the bank and legal system will seem better to them than dealing with the cash-flow drain. For others it won’t even be a decision, as the HELOC spout is turned off due to declining value, so is their ability to pay.
Are you allowed to sell a property in Canada for less than the mortgage value, a “short sale”? For whatever reason I didn’t think the banks and CMHC would go for it.
Banks will just foreclose and run to CMHC, which is you and I, so watch governments come up with new and innovative tax schemes which will be called anything but taxes. Sadly the squeeze will be on, so even those of us who have been conservative will end up paying for the folly of the Greatest fools this nation has ever seen! I may not buy even at dirt cheap prices because the tax burden may be just too high! I may have been forcibly turned into a life-long renter! C’est la vie!
Nobody will be living in the west coast soon:
Radiation On West Coast of North America Could End Up Being 10 Times HIGHER than in Japan
http://economicaldepression.blogspot.ca/
You cannot be serious, ComingDepression. I really (really) want to argue with you but I have taken an oath to be more peaceful online so I am doing my level best to resist the engagement. That is all fluff though.
Please.
A small, not necessarily unintelligent, segment of the population inevitably subscribes to this doomer stuff. They’ve been calling for the end of the world for decades now. And they simply cannot grasp how anyone could merrily go about their life while ignoring the mighty disaster that’s about to unfold.
It’s all a fraud that plays on some folks’ natural fears and, I think, a frustrated desire for respect / attention / power. Religious elements relating to sin, judgment, and reckoning may also be part of it. Interestingly, it seems to be mostly a North American phenomenon. Maybe as a result of the “guilt” some people feel for being part of a capitalistic, economically successful society.
Don’t get me wrong, though. Vancouver RE is toast!
“Oh, snap!”. I was so looking forward to my new career as a benevolent regional WarLord…
Puleeeez!… He’s so much older. Which, come to think of it, is probably why the Hon. GT insists on riding a Harley… VeryNice machines some of them – eminently suited to AuthenticBoomers… Especially the self-aware – who, like the eponymous DirtyHarry…
Man you are a nasty person. Your words are quite vulgar to me, I’m not a “poor sap” we are people who were caught in a world economic melt down. Promises of a Squamish boom were trampled on by the 2008 melt down. I don’t need your sympathy or your harsh critizism. We bought in Squamish at the height with consistent local promises of a city boom that failed drastically after the Olympics. What makes me sick is people like you, obviously with more money than u can spend critizizing other peoples decisions and telling them to suck it up and take a loss of well over 100k. In sensitive knob. Karma will bit that fat cat ass of yours one day.
Jason, you’re the idiot that sold the cow for some magic beans.
Caveat Emptor? I don’t expect you to know Latin, but that’s your homework for today.
Our schadenfreude is deserved, we’ve waited 4 years for the other shoe to drop, which it appears is about to happen. You understand it’s going to get worse, right? The entire RE industry is like the used car industry. It’s bullshit. A house is to live in, not generate profit. At least, that’s how I was for most of the first 15000 years of civilization. I’m pretty sure when empires get close to the tipping point, speculative manias become endemic as cheap debt finds its way into the hands of your cohort. I am guessing your friends are 25-35?
This is all you know, isnt it?
“REAL ESTATE ALWAYS GOES UP”
you just didn’t find this site before you jumped in – or you are trolling – not sure if. Your skill with the written word is indicative of your “investment” ability, no doubt.
You couldn’t pay me to live in Squamish – I like not having my car broken into, thanks.
Is that you, Garth?
Formatting error. Above is for YOU… Dr. J. Alas, CsekePivo.
I skimmed the research that that blurb was based on. They put a radioisotope, believed to have similar characteristics to Cs137, in the water off Japan and let it drift for a bit, then projected forward using a few dispersion models? Being that there was already a radioisotope in the water which had EXACTLY the dispersion characteristics, concentration and starting point/time of the Cs137 they’re trying to model — to wit, THE ORIGINAL LEAK, and it had been dispersing longer and therefore more widely, why in the name of Cnut wouldn’t these clowns have measured the dispersion of the leak, instead of dumping more radioisotopes into the ocean?!?!?! I think they’re pulling your leg, but I’m open to plausible explanations.
farmer you have can’t be that far out to lunch can you? I have evidence from the University of Berkley, Norway scientists, Japanese Scientists, the list is ENDLESS. Before you even think of your so called “argument” you may want to do some RESEARCH..start here..
http://enenews.com/
Let me know when the radiation levels in Vancouver hit ten times those of Fukishima. Yeah, that will hurt real estate prices. Might even make that damn BowMac sign light up again like the old days. Until then I will keep ordering Sushi and making Tuna Fish sandwhiches.
Is this a Simpson’s moment?
Naive, dumb and uneducated. I presume you read the scientific papers as well as the articles and sites that were posted? Get back to facetwit and Nike shopping spree..The La Complex starts tomorrow at 9..
Well that was pretty insulting. It actually made me fall off my chair laughing!
Its amazing the misinformed and dumb people who honestly believe everything is fine and the gov’t will take care of us. They call the so called “doomer conspiracy types” names because these “misinformed” and uneducated, refuse to do any research themselves or think outside the box. They honestly believe the media is telling them the truth always. Keeping the people dumb while carrying heavy debt in their tiny overpriced 400 sq. ft condo while twittering and facebooking their “friends,” is the top priority of the Gov’t and the media snakes. Better yet, keep them microwaving their food, shopping on credit, enlarging their debt, pharma pill popping, buying junk you don’t need while watching CNN, MSNBC or Dancing with the stars.
Fukushima is and I emphasize IS the greatest nuclear catastrophe in history. Does it mean that the West coast will be toast? Only God knows but if Fukushima can happen then so can New Madrid, and San Andreas and other unknown unknowns to quote Donald Rumsfeld. Therefore I do not dismiss your view as ‘Conspiracy’ but agree that the probability of some Extinction level type event as technology becomes more and lethal, or due to catastrophic geophysical disasters is probable in the future, near or far.
By some reason I do not see a flood of the rental properties in Richmond and Vancouver, although I saw on a BNN today that Vancouver RE sales numbers are down 27.7 YOY.
I mean 27.7%.
I think we need to look forward to more stagnation in sales and further price drops before people decide to rent out their units.
Physics friend of mine described to me him attending a conference where there was a room devoted to those who subscribe to, shall we say, maverick views on how the world works; said attendees can present their views and proposed experiments that, if funding can be found, can make one of the great breakthroughs towards a new age of enlightenment. This was alongside one of the most prestigious mainstream applied physics conferences, bringing in eminence the world over. Why, I asked, did they have this room?
Well it turns out some guy became upset with his papers being consistently rejected for presentation at said conference and took it upon himself to shoot one of the panel’s members in the face. Hence “the room”.
Please — oh pretty please with sugar on top — do not be that room.
Pleas noted.
We wouldn’t want to be that room; we will not become that room.
Please, everybody, let’s keep talk of microwaves, raw milk, astrology, and radiation off these threads. There are lots of ‘rooms’ on the web where those subjects can be given the thorough discussion they deserve. Here is not one of those places.
Talk about “in your face”! Clearly , Dr. J… ‘PeerReview’ in the physical sciences tends towards the ballistic. Those Wild&Crazy boffins really should get out and mingle more…
Well I finally came across that chart I was talking about last week. It is not quite the sine wave that I had recalled but close enough. Anyway this one from back in February 17 this year is worth revisiting. It is the chart you will want to make a copy of and take around to dinner parties where foolish people still insist real estate is a great investment. Use this to prove that they got too much sun on the last Mexican holiday.
I think it may be one of the most damning charts I have seen.
This is the big picture. It shows the ratio of housing investment to GDP and it makes it pretty clear that renting will be a better bet for most of the next decade. If the future is any indication of the past then we are in for one hell of a ride down, albeit a long one, especially in Vancouver.
http://business.financialpost.com/2012/02/17/housing-market-poised-for-severe-correction-finance-professor-says/
Keep in mind the chart represents inflation adjusted prices. This one was courtesy of a guy named George Athanassakos, professor of finance at the Richard Ivey School of Business.