“Neighbour has had place on westside listed forever. Had been holding firm on her price. Then decided to take off market. Then accepted offer 10% below ask. Then offer fell through. Now delisted awaiting the spring.”

“Neighbour has had place on westside listed forever…at least 8-9 months. Had been holding firm on her price. About a month ago she told me she was taking it off the market and waiting for spring “when things would rebound”. Ran into her about a week after that conversation and she said she had decided to take a lower offer after all and had sold it because her friends had told her to take the money and run. (Incidently the lower bid was still very reasonable in my opinion and a mere 10% off ask). Anyhoooo, that bid fell through due to financing problems (surprise). So she left it on market until a few days ago when she finally DELISTED it. So I guess she is back to hoping for the spring-time action.
Poor realtor was doing open houses for the entire day both days of the weekend for months and months. It must have been his only listing.”

- Girlbear at VCI 25 Dec 2012 9:30pm

Imagine the sentiment now. If they relist in the spring and comparable properties are selling for 15% or more below last year’s ask, how will they respond?
- vreaa

53 responses to ““Neighbour has had place on westside listed forever. Had been holding firm on her price. Then decided to take off market. Then accepted offer 10% below ask. Then offer fell through. Now delisted awaiting the spring.”

  1. As VHB put it, listings growth in the first few months will be key.

    • VHB doesn’t understand the market. His prediction track record demonstrates that. Therefore, dropping his name to give an argument weight doesn’t make sense to me.

      He’s an unsophisticated and uninformed market observer. Nothing more.

      • JTS -> I disagree completely.
        VHB has been bearish on the Vancouver RE market for years. But, do you know what?.. The Vancouver RE market has been preposterously overvalued for years. VHB has been correct to be bearish, and history (future price action) will prove that so.
        Further, because VHB was bearish early, does not make him ‘unsophisticated’ or ‘uninformed’, just early.

      • Real estate is a cyclical industry. If you pick a position you’ll eventually be ‘proven’ right.

        You’ve said before that this site is a a collection of anecdotes and not about models, data, and predictions. Maybe you should stick to your area of expertise instead of explaining other people’s positions.

      • J.T.S, you must be getting hungry lately. I heard that ramen is cost effective…

      • JTS ->
        1. Over the very long term, RE prices increase at the rate of wage inflation. In normal times there may be some mild cycling of the RE market, around that long term inflation-rate price growth; but these are not normal times. What we’ve had in Vancouver over the last decade is a massive speculative mania, not a normal ‘cycle’ and for people like VHB, myself, and many others here to have called this out will be proven by future price action to have been accurate prognostications.
        2. Yes, this site started out as primarily a collection of anecdotes, and that remains its core. As of Dec 2009, however, we have added our commentary and predictions, and we certainly won’t apologize for that.
        3. Discussion of ‘expertise’ is futile… time and time again in all sorts of markets the ‘experts’ are proven wrong (often because they have conflicts of interest; just as often because they are simply dead wrong). We are great believers in assessing the merit of an argument with little regard from whence it came… so you won’t get any mileage here from playing the ‘expertise’ or ‘non-expertise’ card.
        4. What’s your opinion? What do you foresee for the local RE market? Why? (And see the following questions as rhetorical if you like: What’s your position? Are you in the RE industry or one closely related? What percentage of your net-worth is ‘invested’ in local RE? With how much leverage? And, just for the hell of it, which ‘experts’ do you point to as having it right?)

      • vreaa, once again I’m impressed. In the face of open provocation you have managed not only to remain civil, but to elevate the discussion with balanced analysis and good writing. I look forward to JTS’s thoughtful responses to your fair questions.

      • vreaa, maybe for you it’s enough to say the market is over priced, but 7 years on those words ring very hollow. Especially since many have bought and cashed in their real estate lottery ticket in that time.

        “VHB, myself, and many others here to have called this out will be proven by future price action to have been accurate prognostications.”

        In the future you may be able to point to some sorry slobs and say “I’m smarter than you,” but please try to remember all of those that made a fortune from simply sitting on their fat assess while VHB was wrong for seven long years. Or keep turning a blind eye to them, if it makes you feel better.

      • JTS: “please try to remember all of those that made a fortune from simply sitting on their fat asses”.

        This is where you are wrong. Some, by luck and agility will end up having profited from the spec mania (by cashing out or downsizing), but the vast majority will end up riding their paper profits all the way down again; they will end up having those very same “fat asses” (on which you think they are sitting pretty) handed to them.
        It’s all Bubble Dynamics 101: The vast majority of players do not profit. It only takes a very small percentage to try to cash out for the market to crash. Just watch.

      • Well said vreaa. Again, as @El Ninja, always impressed by your poise.

      • “…the vast majority will end up riding their paper profits all the way down again…”

        That’s very interesting vreaa. Before I get ahead of myself, your assertion requires that you know what price “the vast majority” bought at. Please, tell me what that number is and how you came to it.

      • 4SlicesofCheese

        J.T.S

        http://vancouverpricedrop.wordpress.com/2012/12/19/the-weekly-drop-december-19-2012/

        Get used to it.

        Wait whats that? Those are only a handful and not the “vast majority”?
        Oh ok, for your assertion of “all of those that made a fortune from simply sitting on their fat assess” that requires you know what price those fat asses bought at.

        Please, tell me what that number is and how you came to it.

      • Don’t feed the troll. JTS brings nothing of value to the discussion other than salvaged metal from broken clocks.

      • Will count to ten next time before replying.
        (I do tend to agree with you, having now reviewed that poster’s past comments.)

      • Vancouver’s economy is based on two things: yoga pants and people sitting on their fat asses. Unfortunately, as everyone knows, it is best not to combine those two activities.

    • Naked Official #9000

      @4slices..

      9 hours later and no reply – loyal cadre must be trying to stage (another) open house for the weekend..

  2. Real Estate Tsunami

    With crappy weather like this, who wants to buy a house.
    Incidentally, my absentee landlord neighbor is in town to visit his “vacation home”. Reality stranger than fiction.

  3. As they say, the most painful offer to accept is not one that is below the desired price; it is one below that price which was previously rejected.

    • Most home sellers have a few months between the previously rejected price and the new lower price. Here’s a guy who said ‘no’ to 600K for his patented invention, only to say ‘yes’ to 400k …. 2 MINUTES LATER.

  4. This story is another case of a person whose basic belief system regarding the value of their home has been challenged and found to be wanting. Most of those who own homes these days have very fixed ideas of what their home should be worth. It is a mirage of course. They have relied upon appraised values, appreciation of prices in their neighborhood, the words of friends and neighbors and the encouragement and false promises of those who would broker the house for sale. The perceptions that they have embraced have painted them into a corner in their thinking and so we are seeing serious resistance to modifying the ask price even as the market is in decline month after month. Most of these poor saps won’t awaken until they are actually under water and neighborhood homes are 30% discounted if not more. And that is how most people manage to never get out and get on a liferaft in time. They cannot think flexibly when the moment of urgency in decision making is actually upon them. So they just go down with the ship.

    • UBCghettodweller

      Human behavior usually leads people to brag about their profits and successes while burying their losses and failures.

      Rhetorically: what stories do you think most people hear from their friends about real estate. The market going up or down?

      • Good point. I wonder if the optimism bias also makes humans ignore (or at least not discuss/explore) issues when bad things happen. Not liking “negativity” so to speak.

  5. International global competitiveness study by metro area. Interactive map.
    http://www.brookings.edu/research/interactives/global-metro-monitor-3

  6. I’ve noticed a lot of homes have been delisted. My dad (still a bull) says that people can just delist and re-list when it’s hot and it will sell at what price they want. Unfortunately, those prices may never come back when you have to sell (you’re old, you die, you get divorced, you lose your job, etc.). I keep having arguments with him about this and he is so in denial. I swear, when you have people like my cousin and her fiancee (both making slightly more than minimum wage) buying 1/2 million dollar townhomes, even with a downpayment help from family, and when you got listings that say “2 million dollar home–super affordable!”, it shows you how distorted this market is.

  7. Overheard the following exchange this am in the ski lift lineup at Whistler:

    “Still have this place in Whistler?… No… Yes, we listed a year ago… it was on the high side… we accepted friend’s offer, but the deal fell through… some financial trouble with their bank… We re-listed few months ago and dropped the price, but no offers…”

    Tighter lending rules begin to kick in?

    • Real Estate Tsunami

      Whistler is pretty much a basket case.
      On the way down, the recreational properties are first to go on fire sales.

  8. J.T.S. is fixated on how much they paid mantra. A better question is how much they think it is worth, as many people now believe they have “earned” the appreciation and in a twisted sense “paid” the bubble market price. Kind of like saying; “I meant to do that” as kids often do, when they actually fluke-d out, but take full credit for their dumb luck. Having taken on the persona of a successful real estate tycoon, their world view has shifted as well as their spending habits and social status. These are the things that are so stubbornly held on to. I think many will grit their teeth and dig in until they hit the actual price they paid for, or what is left on their mortgage before realizing they are once again left holding bag.

    • True enough Foremski. Homeowners do feel they earned the perceived value of their homes. They reinforce the idea amongst their peers daily by crowing about how much the house went up and pat themselves proudly on the back for a job well done.

      They are all geniuses of course.

      What I get a laugh from is that almost nobody makes the simple connection that you need to actually sell to realize your gain. You have to put it in the bank for the bragging to be meaningful.

      Most will never do it of course. The self satisfaction that has come from puffing and fluffing about net-worth and house prices over the course of a few years has made them punch-drunk and bloated their sense of economic invicibility and sefl worth.

      It is just so much vapour and fumes to the rest of us watching and the folly of it is hard not to laugh at. Just like watching small children make goofy mistakes oblivious to the error while boasting proudly about their success.

      Vreaa is absolutely right in the comments to another poster above by warning “It only takes a very small percentage to try to cash out for the market to crash”. Truer words were not spoken where the Vancouver bubble is concerned.

      That is the unseen danger that lurks beneath the deep waters while the fools frolic above. They really don’t have any idea how fast the wheels can come off the cart. In this case the market is already sinking, the waves are cresting over the bow and still you get fools shouting “rock on baby, we are immortal…buy, buy, buy”

      HaHaHa. I laughed even harder when I read JTS assertion that real estate markets are “cyclical” so why bother being concerned. That is just another way of saying everything will be OK if you just wait and play it out. Children talk like that. The just don’t see the danger in these big market movements. Not a damn clue what is coming next.

      You know what else is cyclical?

      The Great Depression was a cyclical event. So will the Bond market be when its multi-decade run comes to an end. How about the devastating droughts that periodically strike the prairie regions of North America but are so far apart that the people who witnessed them last are for the most part all deceased now.

      Major earthquakes in Vancouver are cyclical too.

      My point being that what we are seeing today is truly a once in a generation event and it is exceptional in its nature. Hell, it is exceptional even where other bubbles are concerned. This is no time to listen to the little arguments of the children in the room who happily scamper about the deck of a ship that is already doomed and try to convince you the ankle deep water is just caused by a bit too much rain.

      Cyclical, my ass!

  9. Fixated on what they paid……..LOL !!! So true ‘dat………stuck in what I call “paralysis by analysis”.

    It doesn’t really matter all that much what you actually paid, if you can’t sell. And, that is becoming the problem……..but when they finally realise it, it’s far to late.

    I am probably one of the few on this and other blogs who sat thru a RE collapse first hand here in Canada back in the early 80′s when I was a banker here in Calgary. I watched the second mortgage portfolio I managed for National Trust Company go down from 100MM, to about 65MM, in a little over 12 months due to foreclosures and property devaluation. This was at a time when CMHC financing needed 15% down, and we actually took such obscure concepts as credit worthiness, debt to income ratios and past payment history into account “before” we dished the money out. Also, most second mortgages were in the amount of $15-25K on average, as most houses were not much above $125-150K at the peak. If any you thought it was bad last time………..this time around will make history look like picnic.

    • I was there too, Carioca. Was working for a Trust Company that was scrambling to save its own sorry arse after having dished out too much credit. People were desperate to get loans but easy lending had dried up and rejections were the game of the day if you could not bring collateral. Hardly a day went by when I did not see someone sobbing at the loans officers desk. They brought in art work and antiques and junk they thought was valuable to persuade the manager. Nobody cared though. You know how much that stuff is really worth when only cold hard cash, bonds or securites will suffice? Not a spit. I was an assistant then and a mere observer but the image stuck. Never get in debt over your head because when the day of reckoning comes even your friendly banker will pull the plug on you and never give it a second thought. Most people do not realize that internal policy changes at financial institutions where lending is concerned are bureaucratic and very inflexible when the mood changes. It is just a machine that will not be swayed by sentiments and emotion. And all that crap that you thought was valuable is not worth ten cents on the dollar anymore. So I agree Carioca. This next go-round is going to be quite an experience for the novices in the crowd.

      • Caroica Canuck

        Farmer……

        I was averaging 75 – 100 foreclosures / quit claims a month over 1983/84. And, remember, I just ran the second mortgage and personal loans department, We also had a humongous first mortgage department with it’s own problems. Thing is, I distinctly remember foreclosing on a ton of realtors spec properties, and also their primary residences, as well as that about 75 %of the places we got eventually got back had been listed in vain (priced too high) for 12-18 months beforehand.

      • There is nothing quite like first hand experience with a bubble burst to keep you enlightened when it comes around the second time, is there Carioca?

        I used to get really burned that I could not get friends and relatives to listen when the warnings I was offering were spot on the money. They still could not see it. Some just refused. Pure arrogance (and ignorance).

        I would bring charts and graphs in an effort to make my point…..they laughed, got angry, insulted me or dismissed them out of hand. I have long since discovered it was just a huge waste of my time to be bothered.

        I simply could not pass on the lessons I had learned first-hand to those whose minds were closed nor convey the seriousness of the situation when everything these people already “knew” was contrary to what I was telling them. Media brainwashing at work combined with greed and hope I suppose.

        These days I just let it ride and post my thoughts here from time to time to add what insights I can muster. If anyone cares to read them it is fine with me. If not then they can learn their own lessons the hard way.

      • Caroica Canuck

        All those folke jumping in with both feet (or those who have already gotten wet) are mainly in the <45 age group……too young to have known better (seriously now, has there even been "ONE" article about the early 80's crash in Candian RE anywhere in the real estate advertising monopolized media?) and too young to think it would happen to them.

      • Good point Carioca. Very little discussion has taken place referencing the early Eighties debacle and yet it is still very clear in my mind. Could it be that the guys who were there (and might be journalists today) have long since retired or moved on to happier hunting grounds. I am betting that very few who were working in finance in the day are stuck holding big fat mortgages now. Nobody sane would want to repeat that ugly experience.

        And yet here we go again for the younger generation.

      • Carioca Canuck

        And, in the early 80′s, the concept of “consumer credit” per say, along with second mortgages, was just starting to expand into the banking sector.

        These things were normally the strict preserve of the “finance companies” (AVCO, HFC, Trans Canada Credit, Beneficial Finance).

        So, we’ve experienced a 30+ year non-stop credit binge that has grown all asset classes, least of not which, real estate. Combine that with the average age of the current “homeowner” and it’s not a real big surprise (to you or me anyways) that we are where we are.

      • I would suggest we have both ruled out a soft landing, Carioca.

    • Carioca and Farmer: Thanks for your discussion above.. I’ll headline the exchange at some point.

      • Real Estate Tsunami

        VREAA,
        Please add me to this venerable panel.
        I was a loans officer at a medium sized Credit Union in the 80s.
        Heartbreaking. Homeowners were dropping off the keys, walking away.
        We did not have the heart to foreclose, ended up as landlords of properties valued way below the mortgage.
        After 3 years, the auditors forced us to write down the properties to market value, which almost bankrupted us.

  10. Django unlisted

    I am a bear – but as time progresses with current price stagnation and depreciation, I fear the federal government and central bank will panic, and place financial instruments to manipulate further price increases.

    I hope the above does not happen – as the future pain will be considerably harsher.

    The RE lobby is strong – the Feds will not be able to resist as RE is a strong political money contributor.

    Who else shares this fear?

    • Many of us do, I think, fear that some kind of government bail-out may be attempted. Such measures would spread the pain around (unfairly), further hobble the economy, and do little more than delay the inevitable.

  11. Real Estate Tsunami

    Django,
    The RE cartel will eventually be sued for predatory, monopolistic behavior.
    Happened in the States, where there is now much more accountability and transparency.

  12. ->Django unlisted

    I believe the US Gov’t tried to boost home sales with lots of incentives at the beginning of the US crash. Probably easily justifiable as it would “save” so much in the long run, as the gov’t has the banks back in either case. If it works out the banks get a few more months to party and the friends will be happy, or the friends will be upset and will need some money anyway. Injecting a few more billion will seem like a drop in the bucket in retrospect, as evidenced by the spectacular super nova of a housing crash down south. So I think they’ve already caved according to Garth Turner’s blog. Does it really matter?

  13. U.S. housing market is showing an uptick. Guess where all the HAM is going to go next?..and the consequences here will be even worse…

  14. Here’s another anecdote from the “willing to sit until I get my price crowd”………

    Talking to a colleague at the office this morning over coffee. Her relative is trying to sell their $950K house and acreage on the Sunshine Coast in BC, just a 45 minute ferry ride north of Vancouver. It was built it in 2000…..but they inherited the land for 10 years before that. So, a 50/50 “freebee” from a monetary perspective, but that’s only “IF” they didn’t take all of their equity out, that is……and we don’t know that they didn’t do this already.

    I casually asked how long it had been listed, and I got the reply “since late 2008″.

    ROFL !!

    Then I get told they’ve lowered their price already, but they’re “not going to do it any more because they want to retire, and they really believe that is what it is worth because they built it themselves, and it’s one of a kind, yadda, yadda, yadda”……….so I go and search the town on realtor.ca and it looks like a really bad case of the measles have hit the sunshine coast. Not only is there literally a hundred red dots, but most of them have numbers like 12, 25, 43, 33, 17, 5, etc, overlaid on them, indicating multiple listings contained within that dot.

    Karma is a beeyotch.

  15. That is pretty funny. You would think the time frame would be noted in months, not years. Wonder if decades will ever be the case at one point. How foolish for these people to “hold out” “knowing” there is a night in shining armor accumulating vast sums of cash for their “retirement.” If there has ever been a time to cut and run, this be it… They might find that the next owner of the house will be someone they grudgingly accepted the only offer from, and may even have made additional concessions to get out from under their “retirement.” Hopefully not though.. that would suck.

  16. Consider this: Thousands of properties which didn’t sell in 2012 will now be added to the for sale list in 2013. AND, many of these will be more desperate.

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