Spot The Speculators #94 – They’ve lowered their price to $950K already, but they’re “not going to lower it any more because they want to retire, and they really believe that’s what it’s worth because they built it themselves, and it’s one of a kind, yadda, yadda, yadda.”

“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.”

- Carioca Canuck at VREAA 28 Dec 2012 8:18am who added “Here’s another anecdote from the “willing to sit until I get my price crowd”.

We’re making the point here that any owners who have decided to sell, but then don’t steadily drop their ask price until they hit a bid, are delaying selling on the premise of future market strength.
This is also an example of long-term owners who have, it appears, become dependent on the presumed value of their RE for their future retirement security. We fear that there are many in their position who will have their plans hobbled in the downturn.
- vreaa

32 responses to “Spot The Speculators #94 – They’ve lowered their price to $950K already, but they’re “not going to lower it any more because they want to retire, and they really believe that’s what it’s worth because they built it themselves, and it’s one of a kind, yadda, yadda, yadda.”

  1. Here we are, December 31st and still hovering around 14,000 listings.

    Any bets on how many we kick the new year off with ?

    On a side note, just found out my Aunt(in law) is 1 year away from 65 and she is planning on going into retirement with a mortgage. She discussed it in a “matter of fact” sort of way like it was what retirees do.
    She is an accountant, works for the municipal government and co-owns the place with her boyfriend to boot.

    Don’t you just love the holidays for quality family financial discussions ?

  2. Exactly like my parents. They’ll be waiting until their grand kids are dead.

  3. I was trying to think of a comparable example to staking your entire financial future on a single investment –that you know almost nothing about– and then actually *fighting* those who would offer you knowledge, wisdom, and insight into your chosen bet at the craps table.

    I can’t come up with one.

    It’s sort of equivalent to taking $100,000 of your savings, borrowing $900,000 from the bank, and spending the whole thing on stock in General Motors. WOULD YOU NOT BE INTERESTED TO KNOW HOW GM IS DOING? Whether people are buying their cars? Whether they are well-managed and likely to stay in business??

    And if someone told you that GM was having a bad year and maybe would have a bad year next year, would you reply with “Fuck you no they aren’t maybe your negativity just triggered the bad year.”??

    It Boggles. The. Mind. But here we all are preaching to the choir.

  4. Agreed Burnabonian, I have a close friend who was educated by a few close people to wait a year or two, ( or so we thought), and still went ahead and bought last year at what I believe was peak price and is now down an easy 100K. I can’t even discuss the subject now and I spent a lot of time showing the red flags that obviously went unheard. Sad part is the couple is highly educated but it showed me once again that emotion over-rules logic.

  5. Real Estate Tsunami

    The mind set of a home owner in Vancouver is that of an addict.
    They need higher and higher prices to feed their addiction.
    And if you suggest Rehab, they go into denial and become emotional and abusive.

  6. That Rob Chipman guy has some interesting stats (if they’re trustworthy) on his blog. He tracks daily average list price and average sold price. This is very useful as it shows the premium/discount on sales . A 20 day moving average for SP/LP would be an interesting index to track going into the spring.

  7. I have a query for the commenters here.

    I looked up two lots on Craigslist in the Courtenay area yesterday. Both were listed for sale by brokers. I wanted more information about them so I looked them up on MLS. Neither was listed there. Does this mean that realtors list property for sale on say Craigslist without also listing on MLS? Or have I missed something? If they do list outside MLS then obviously the number of properties for sale could be enormously larger than MLS shows.

    For example in Courtenay, Comox & Cumberland around 850 properties are for sale or about 14 months of inventory. But it is not uncommon to have 20 plus properties listed on Craigslist in any given day. Clearly this number of “unlisted” properties could greatly increase MOI based on MLS alone.

    • Good question, and one I wonder about. In my area of Burnaby there are two new builds, empty and forlorn, for sale since completion about a year ago. Not on MLS. Also an older tower with two on MLS, yet 7 realtor signs. Another tower down on SE Marine at Jellico, about 6 realtor signs but nothing on MLS.
      Are these visible in the Realtor section of MLS? What about the stats as massaged by the unaccountable spinmeisters?

    • Real Estate Tsunami

      There are plenty of those in Ditchmond, too.
      Southpointe has 44 Townhomes for sale in “the rolling meadows of Steveston”.
      Only 3 are on MLS.
      Another issue is the pre-solds that have been assigned.
      This black market could be much larger than anyone thinks.

  8. When I tell people we work with what “we sold” for they look at me funny and then ask why we didn’t get more… “The market is so hot”…..”I thought you would get way more than that”…
    I did have a very very good spot… But Small Business property tax is way higher than Residential…
    … check out the published tax rates…
    So with no changes to the property We have gone from $4000 in 2005… to $20+ thou. in 2012.
    Probably be $25+ in 2013… $32+ in 2014… $45+ in 2015… that will be $100 thou. cash to the city in 3 years… financially dead long before that…thats a cash payment we give to the city for something like their ever increasing raise’s, and well stuffed retirement packages and lack of service…
    On my block some $9 mil. in small business property just sold. It was purchased at about $2,4 mil prior to 2004. All were better than 65-100% paid off…
    All sold over the Property tax increase issues…now $79,000.00 one side …and $80+ on the other side.Cross the street selling over this to.
    Wait till you see what this does to the neighborhood property tax values…

    So the “cash out right” now is… wise… I believe as so much of our flexible cash…or our “Private Income” in greater vancouver is dependent on the… real estate or the government funded economy.
    Property Tax can and will only go up in Vancouver…yah got to pay the loss on the crumbling olympic lemon village somehow….
    Still we got 3x our purchase price so its not all bad…
    Property tax is now 3x our Mortgage payments… yup try and retire…

    However dam near everyone we know… who has property can’t understand why We sold…for what we did…
    Gee couldn’t you get more?,… I thought the neighboring “assessments” were higher,…and would guarantee a higher price,… but the neighborhood should be worth more!….
    Idiots…
    And seeing as …”you don’t own the property anyway… the “Crown” does”…
    …”and we can do whatever we want to your “Fee Simple Property””…
    ….”We are the Administrators”…
    ..and for those who don’t get it …”You Rent”… from … “the Crown”…
    Or so I was Told by the… “Administrative Voice” at the “BC Supreme Court” …
    Ohh well “Solvent” and “Free”
    anyway… Speck Rec Property is showing some Extra Ordinary deals in the outlying areas… past the GVRD… lower than the value of the “custom built house” on the property …. is what I mean.

    Great First rate Blog, Great fun reading
    Thanks for the helpful dialog…
    Hope to follow into the new year…lets see how crazy we all were…

    Happy New Year to those that sold….
    …and Good Luck to those that didn’t go there… in the New Year…..
    Freeeeee……..

    Silver… a commie capitalist with a cool $mil.

  9. It is a really good question. The signs appear to all round that inventory is high, and interest in buying modest to say the least. It does appear to a decent time to consider moving up the property ladder. I sure don’t pretend to know, but I sure enjoy the intelligent thought that goes into these posts.
    Thank you

    • theboywhocriedbubble

      Peter ,

      Decent time to move up the property ladder ? Have we been following the same real estate market ? Im no expert but I’ve (we’ve?) been tracking this beast for the last 10 years and Ive got it in my cross-hair. Not a good time at all , might the worst time to buy in Vancouver post WWII.

  10. Very good post! Some people just don’t get it haha.

  11. With regard to ‘shadow listings’ outside MLS, it is important to note that many developers use ‘in house’ marketing for new developments, which does not appear on MLS ( they do this in order to save themselves the sales commissions of MLS). In areas such as Vancouver where there is a lot of home construction underway, these units do not show up in MLS ‘months of inventory’. One only has to look around to realize this is not an insignificant amount.

  12. As I understand it, the “in house” marketed properties appear neither on MLS inventory nor MLS sold list, so don’t affect MOI etc. They do appear somewhere in official records I expect, so one has to be careful what data is used to derive the numbers.
    It is the realtor marketed resale properties that don’t appear on MLS that I really wonder about. Also if MLS is such a vital marketing tool how can so many listings not be visible there?
    Of course, this could be explained away as being expired listings that the realtor hasn’t hasn’t bothered to remove the sign, but that doesn’t change the fact that my first examples above are still sitting there empty, with weeds and garbage in the unimaginative yards. (The two SxS new builds. 70XX Mackay Ave in Burnaby if anyone has info.)

    • Alexcanuck, I brought this issue up in the VCI forum yesterday as I noticed a delist from the MLS and when I asked the realtor about it they said that it is still on the market and for sale. The for sale sign is still out front. He said they just chose not to put it on MLS…. I posted starting with post #116 and through #136 and this issue was mostly dismissed by everyone as irrelevant.

    • Perhaps they pulled the listing from MLS for a break over the holidays but didn’t cancel the listing as they will start marketing again in Jan but not register as a new list.

  13. I’m sure when they relist on MLS the DOM will reset. I’m guessing that’s the rationale/ strategy.

    • The Realtor said most people buy from foot traffic, people driving by, and showings, so doesnt make a difference if on MLS or not as hardly anyone uses it to view properties.

      Color me skeptical.

    • Is there a fee to the realtor for each property he puts on MLS?? I knew the answer, but forget now.
      If there is a ton of listings for a condo/apartment already, why pay a MLS fee when nothing is selling, just put up the sign at no cost???
      people coming to look will see all anyways
      JMHO
      Dave#1

  14. Hmmm…. Is it time for a 2013 prognostication yet?… Nem’s best adhoc/heuristic, WildAssed, educated guess… in parable form…

    [NiteToEd: do you think Brad&Janet will liquidate their PreSale PreOccupancy?!? PS - DearReaders, IllustriousEd et al, the very best in 2013. Yes,"EveryOne!!!"]

  15. Back to the topic of “not lowering our price”; here is a related anecdote: Last spring, there was a glut of inventory of imported BC lumber in Chinese ports. It was going grey and icky from being stored too long. However, instead of selling the aging lumber at a loss, the traders hung onto it and sold the newer wood (which they had imported more cheaply) first. The older wood was kept in inventory until the prices recovered.
    My guess is that Vancouver-area real estate sellers (regardless of ethnic background) have similar logic.

    • these pretzels are making me thirsty

      This is a ridiculously irrelevant anecdote…
      although Vancouver houses are certainly describable as “grey and icky” lumber. :)
      Have a great 2013

    • The buyers demanded the newer wood. Sellers don’t usually dictate under those circumstances and the only reason they would hold back is due to lack of demand.

  16. There is a lot on 41st selling for under 1.7m in Shaugnessy now. Ridiculous considering many new builds on 49th in my parents Killarney area are still selling for more than this. Smaller lots, same type of big street, but newer houses. I doubt the new house is actually worth 500k to justify the price difference between Killarney and Shaugnessy now.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s