“So one of my deadbeat buddies from high school (never held down a job or followed through on any type of ambition) just bought a place in Surrey. With 5% down. He actually bought it in April and I only found out last week when I passed through town.
So that means we’re at a market top. It was official the day he closed.”
- RiskArb at RE Talks 29 Aug 2012 7:23am
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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.”
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- 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
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- “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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I said that when my deadbeat buddy bought in 2006. Now it’s 2012 and he’s still a deadbeat.
But if he were to sell his condo today, is he ahead of where he would have been had be rented the place those six years instead?
Only if he hasn’t been living on HELOCs. Or hasn’t had a 100k special assessment. It’s certainly possible he’s ahead. Timing helps a lot.
He would be ahead. He’s been no fun recently, has to work most of the time. Hey wait, I guess he isn’t a deadbeat anymore! I guess that apartment purchase set him on the straight and narrow.
Uh oh, that “forced savings” thing? Maybe he figured out it was the only chance he had with the babes. That can drive a man to all kinds of things.
My 17 year old niece told me a bunch of her friends were thinking about going in together to buy a place and living there instead of renting when they graduate high school…
They are all smart so I’m sure they will eventually have good careers but currently they all have part time / summer mall jobs
I told her it was the worst idea ever on so many levels and thankfully she agreed. Still, it shows you how brainwashed we’ve become
I was on the bus recently and overheard a few young girls talking about buying a place when they go to university next year. The usual “rent is just throwing money away” and “I’ll sell it in a few years and make some cash” we’re part of the conversation. Yowza. 18 with a mortgage, a student loan, and a credit card… Sounds like a recipe for disaster.
…”just bought a place in Surrey with 5% down”…
Perhaps, unbeknownst to RiskArb, his DeadBeatBuddy has been secretly toiling away nights… at one of UBC’s/SFU’s more lucrative ContinuingEducation aka Adult’Outreach’ programmes??? [NoteToUBCGhettoDweller: Now you know why I call the Academy the 'Bordello'... it just works on so many levels.] And here’s your Quote ‘O TheDay, DearReaders!…
“British Columbia’s students are not for sale.” – Naomi Yamamot,
B.C.’s Advanced Education Minister
[G&M] – Sex recruiters may prowl B.C. universities, Minister warns
…”The adult entertainment industry may be sneaking into fall job fairs, B.C.’s Advanced Education Minister has warned postsecondary schools across the province. Her letter came after reports that two Windsor, Ont., strip clubs are attempting to attract postsecondary students to work as dancers by offering education programs with partial tuition payments.”…
http://tinyurl.com/8uqsjse
g&m appears to have left out something … http://tinyurl.com/8sc7scq … “A manager of the clubs said they are forced to recruit in this manner because of the Federal government’s Bill C-38 which recently became law. The new bill disallows temporary working visas for foreign women moving to Canada to work as exotic dancers. As a result, some strip club operators have complained they are short on peelers.”
Chubby, OldBoy… you don’t know the half of it… [NoteToEd: On the BrighterSide, the FederalConservatives could scarcely be accused of failing to do their bit for the PerformingArts...]
[HoustonChronicle] – Strip joint loans shock Canadians
“But blushing – of the deep crimson variety – abounds across the river in Ottawa, where politicians are scrambling to discover how the Conservative government of Prime Minister Brian Mulroney pumped $17 million into the Lido and at least 37 other strip joints across Canada. The government has given the names of several, but has refused to release the list of all 38.
The Federal Business Development Bank, which last month admitted to approving loans for 11 strip clubs, on Tuesday told a House of Commons committee that the federal largesse was extended to 38 such establishments.”…
http://tinyurl.com/cza34rf
Oh, believe me Nemesis, given the exploitation of grad students I’ve seen, I reckon a high end prostitute receives much more equitable restitution for her (or his) work.
Thanks for the notice. Someone had to be the last sucker drawn into the game.
Had a birthday dinner with some old friends with kinda shady past. Always had money, always had no savings.
Most have moved on to legitimate jobs, even the birthday boy. He told me he just got a place, and a new car. I didn’t ask about the place, but I assume its a presale since he I picked him up at his old place.
The day after the dinner, birthday boy went down to Vegas. I got a text from him, from Vegas, a few days later. He asked if I could spot him 5 grand, I guess he went a little wild on gambling, good luck with that mortgage.
Wait, you can’t leave it there. Did you spot him the five grand? And if you did, can I have your number?
So he wants to borrow 5 grand from you and he doesn’t have the decency to call? He texted you instead?!? Is he 16 years old?
LOL this is not the first time he has tried to borrow money from me, although he has always paid me back, it always took forever and felt like I had to chase him down so I learned my lesson.
He texted me cause he was in Vegas.
A long time bear friend of mine just bought a place on the North Shore after many years of waiting. He said that he no longer believes that prices will crash. Prices will keep going up, it’s really different here, renting is throwing away money etc…
He stretched the mortgage to the absolute maximum of what the ‘helpful’ broker was able to get. His monthly housing expenses will instantly double (for an equivalent unit!) and there may be some renovations necessary. But at least he is not a lowly renter anymore.
Interestingly, during the whole buying process, he asked me multiple times for my input / opinions on buying in today’s environment. I told him that I won’t give him any opinion for or against buying and that he should just do what he *feels* is right.
Wise strategy.
A Lowly renter. Scarry stuff.
Ha, I called the market top in Whistler when my deadbeat sister and husband bought a place up there with the equity of their condo. They asked if I wanted to buy half (2009). Well, they have since taken the equity out of Whister to buy a house (still have the condo downtown with no equity left after HELOCing) and the Whistler condo has gone down about $100K compared to the unit upstairs from them that is for sale. They are now in a tight cash position due to a “restructuring” at her husbands work and need to free up some cash. I know that Whistler is underwater and they are maxed out on HELOC’s so guyess what??? They asked if I want to buy a half share of Whistler again!
Seriously, buying half of an underwater asset???? I didn’t respond.
They are both university educated and he was pulling in $200K/year and working probably only 20hrs per week in a sales role. I’ve been saying for ages that his work will catch on that they are paying him a mint to do nothing so it’s no wonder he got “restructured” – right after a 5 week honeymoon and wedding they have to pay for. (The sic thing is I actually commented that if he takes 5 weeks off and the office doesn’t fall apart they are going to realize pretty quick that he is non-essential and overpaid…oops).
Is it bad that I felt just a bit better after reading all this??
amazing anecdote, top stuff! the folly of man and wo-man, the movie continues to play. Appreciate the digression into Employment Status, as the job market is highly political environment to begin with, especially on the Neptune Coast.
folly! … pfffft! … http://tinyurl.com/5sjabr
How did you know, Chubster!!? I’m so mortified!
Are you willing to share information about what kind of job pays a deadbeat $200k/yr for 20hrs/wk? I think I’m in the wrong line of work.
He’s in advertising. I’m an engineer, chose the wrong career too.
Thanks for the reply.
I hereby pledge to encourage my kids not to go into an honest line of work.
So the moral of the story is a deadbeat with a condo is still a deadbeat. But he’s not a renter. So renters are deadbeats AND owners are deadbeats? The crash has arrived, we’re all finally equal!!!
Not true, Angela… In a brazen attempt to supplement my meager earnings reviewing obscure scholarly journals I attended a BordelloJobFair and was declined a PoleDancing audition… Too old and wrong gender, apparently. Could be worse though, fortunately Victoria’sSecret’s return policy is quite reasonable… provided the ‘intimates’ haven’t been worn.
[PSSST... NoteToEd... RoboRedaktor is still clinging to one of my scandalous 'intimates'.]
Alas… The inconsolable grief of it all! Do you know what really hurts, Angela… Really hurts? I had such a great routine worked out. A GenuineCrowdPleaser, albeit.. not ‘StrictlyBallroom’…
Someone who never followed through with any ambition sounds like 90% of Vancouver. Dedbeat city.
Are you so sure, RR?… The BigApple has its share, too…
Off-topic, but I’m curious about a couple of things and wondered if anyone can help.
1). There’s a big newer build at 2828 West 43rd that was sold last year. Now it’s on the market for $3,658,000. In the grand tradition of openness that distinguishes Vancouver realty, it’s apparently impossible for anyone to divulge what it sold for last year. Does anyone know a way to look up previous sale prices? Telling a realtor that this information is freely available in the United States, for example, brought two responses: “We’re not in the United States” (oops!); and “This is information we don’t just give out to strangers over the phone.”
2). I have noticed another curious phenomenon: houses (new build) that are listed as “Sold” but into which nobody seems to move. Of course it’s possible some new owner is using such a house as a “holding property,” but I also wondered: is it possible realtors list something as “Sold” when it’s not? Is it possible the realtors and owners are in on some kind of conspiracy to pretend it’s been sold on the open market when it hasn’t?
Any ideas, anybody?
Thanks so much.
Try paulb, otherwise who cares?
I haven’t seen fake sold signs but I have seen sold signs stay on for months. I used to care about that sort of thing but learned it doesn’t matter; it sure didn’t matter stateside.
Otherwise who cares about what? Freedom of information?
There is no FOI constraint here. Previous sales information can be obtained from the land title office for a small fee.
Yeah, but compared to Zillow, that’s ridiculously inefficient.
Re 1) The asking was $3,380,000 No idea what the actual sale price was.
2828 W 43rd
On the market 19 Sep 2011: Ask $3,698,000
Ask reduced to $3,380,000
Sold 18 Oct 2011 for $3,258,000
Now returns to market 21 Aug 2012: Ask $3,658,000
If we just take the numbers that we know and assume that the house will get sold for asking, here is a quick calculation:
$3,658,000
-$3,258,000 (original purchase price)
-$65,000 (property transfer tax)
-$120,000 (used house salesman fee)
-$13,000 (property tax for a year)
-$2,000 (~ homeowner insurance? not sure what is the replacement value here)
= $200,000 (profit)
Now, mortgage with 30yr amortization, at 5% down and 2% interest is about $12,000 monthly. Possible rental income: Let’s say an optimistic $8,000 if furnished (Cost of furniture?) => loss of $40,000 in 10 months.
More likely, it wasn’t rented out most of the time, so the loss from cash flow could be $80,000 or more…
Profit shrinks to $160,000 in ideal scenario – unlikely.
More realistic is about $120,000 IF sold for asking.
Not counting the maintenance and furniture cost.
Does not leave much space for price reductions…
How many people buying a $3m place put only 5% down?
Actually, they couldn’t put 5% down due to the CMHC cap.
1) The $1,000,000 CMHC cap is new. Do you know what was the limit in 2011?
2) If the downpayment was 25%, then the mortgage payments were $9000/mo. Changes the math a little, but the space for price reductions is still very small.
Also, keep in mind that the costs of maintenance, furniture, heating etc. were not included in the calculation. It is also not clear if the place was rented out at all.
bubbly’s calcs are about right, it looks this person wants out with a profit. Also highlights how perpetual capital gains are required just to tread water due to transaction/carrying costs. Those costs are exacerbated as turnover rate increases.
I think this is a bit off.
Put up for sale 03/11/11, 3.888M (lucky eights..)
reduced 06/02/11 3.698M
and as you said:
reduced 09/19/11 3.380M
Sold 10/18/11 3.258M
I think what this shows is that this wasn’t a particularly desirable lot in the first place, and overpriced even in the 2011 market.
Best recent comparison I found (very rough search) is to 2819 W 37th (originally listed for 4.88M in Oct ’11, sold last month for 3.835M). 37th is a less desirable street, but not so busy — and the build is much newer (2009 v 1997). The assessed value for that lot was 4.435M.
Assessed values are not accurate/precise, and prone to errors.. but I find most houses are trending to sell below assessed value by ~10%.
The assessed value for 2828 W 43rd is right around $3M — which would put 2828 W 43rd at about 2.6-2.7M (in today’s market, nevermind the fact that the market is becoming more saturated every day).
Thanks very much, bubbly, VREAA host, and Anonymouse!
The listing realtor volunteered an explanation to me as to why the house was being re-sold in a year. Quote: “Last year it was bought by a family from China and some of them went back. The house is too big for the rest of them, very expensive.”
Lets keep watching that house. They bought in 2011(top of the market) and now they are trying to sell it above of their buying price to recoup the losses and to make a profit – good luck with that but highly unlikely! The new owners of my previous townhouse that also bought it in 2011(top of the market) finally sold it after a year of possession and 5 months on a market with the overall loss of 50K (they reduced price twice, sold below the price they bough by 28K, plus they did some reno, paid property taxes for a year and the used home salesperson fees).
Thanks very much also, YVR Housing.
“Previous sales information can be obtained from the land title office for a small fee.”
Priceless! Yet another fee!
So City Hall makes money off Vancouverites because the realty industry here conceals vital statistics from consumers?
And as the Host points out, trying to unearth this information is “ridiculously inefficient.”
When I relayed the one realtor’s comment about how “we don’t give information like this out to strangers over the phone,” my husband remarked on how Vancouver practically sells multimillion dollar properties over the phone to strangers — and, I might add, to local speckers whose capacities to pay for these properties may not, for all anyone knows, eventually much exceed their capacities for paying City Hall a small fee to find out the last selling price for their mansions.
Just a quick tidbit that I found interesting w/ regards to the vancouver westside.
Since 2000, there have been an average of 255 houses sold each year between July 1st-Sept 1st..
This year, only 126 were sold.
The only other year, of the past 13, to have less than 230 was 2008 when there were also 126 sales.