“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.”

“Yesterday two old friends, J & M, from Victoria, mid 50′s, both very bright and mid level bureaucrats at separate provincial government departments came to visit us in the Comox Valley. At one point the topic moved to real estate. I began to say that the market was dead here when J interjected that it is the same in Victoria and that it would remain so for a very long time. I was surprised by her response and asked how she knew this because I know that neither of them reads any of the real estate bear blogs. Their answer was fascinating and should scare the pants off the real estate crowd.

First, both live in Townhouses and J is the head of her strata council (46 units). She said that last year about 7 units sold. This year one of the most desireable units was listed and got no inquiries at all. It was pulled. In addition one of the vendors of a unit last year did want to buy back in but could only do so with a 0/40 mortgage, which is of course no longer available. She had no idea what he had done with the equity from the sale.

Second both pointed out that their incomes have remained largely static for years but that housing prices and strata fees (not to mention special assessments) have increased relentlessly to the point where they felt prices are ridiculous relative to income. J was of the opinion that the townhouse unit in which she lives has about $60K of material in it and yet these units were until recently selling for $300k plus. She felt that the spread between material cost and selling price was indefensible. J also pointed out that despite being mortgage free her strata fees and hydro per month were in excess of $500, the better part of a mortgage payment not that long ago.

Third J said that the price of real estate would be down basically forever because our generation had had few children, overall. As a result who was going to buy our houses when we depart for the great hereafter?

Fourth both believe that the potential sales price of their own units have decreased substantially in the past year and will probably continue to decrease but they intend to stay put. They do not see any point, for example, in selling and then renting despite knowing that prices are inflated vis a vis rent.

Fifth both pointed out that they work at very large institutions and that they, of course, interact with many of their fellow employees. One of the constant topics is real estate and these days the virtual impossibility of finding buyers for the units that their fellow employees have for sale. They report that the view of the majority of their fellow employees is similar to their own – real estate is dead.

Finally, and very ironically, at least for most of us at this site, both get most of their news from CBC and CTV. Their overall impression of reports on both channels was that the real estate market is collapsing.”

- Ford Prefect at VREAA 31 Mar 2013 8:46am

8 responses to ““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.”

  1. Speaking of ScaredyPants… &GhostTowns…. file this one under: #CouldBeWorse… [e.g. - living next door to Russki'Busineeesemen']

    “French, American, Petra Ecclestone – and Russians.” AnonymousBelgraviaResident, remarking upon her neighbours – and who asked that her name not be used because, she said, she was scared of the Russians on the corner.

    [NYT] – A Slice of London So Exclusive Even the Owners Are Visitors

    …”LONDON — An odd thing was happening, or rather not happening, as dusk fell the other day across Belgravia, home to some of the world’s most valuable real estate: almost no one seemed to be coming home. Perhaps half the windows were dark.

    It seems that practically the only people who can afford to live there don’t actually want to. Last year, the real estate firm Savills found that at least 37 percent of people buying property in the most expensive neighborhoods of central London did not intend them to be primary residences.

    “Belgravia is becoming a village with fewer and fewer people in it,” said Alistair Boscawen, a local real estate agent. He works in “the nuts area” of London, as he put it, “where the house prices are bonkers” — anywhere from $7.5 million to $75 million, he said.

    The buyers, increasingly, are superwealthy foreigners from places like Russia, Kazakhstan, Southeast Asia and India. For them, London is just a stop in a peripatetic international existence that might also include New York, Moscow and Monaco.”…

    http://tinyurl.com/bmy8kbe

  2. “All great truths begin as blasphemy.” – George Bernard Shaw

    (The second phase, of course, is that everyone recognizes them as having been self-evident from the beginning.)

    This site should be the Vancouver Real Estate Blasphemy Archive.

  3. Speaking of Victoria….

    Did any of you read the obit for HHV?
    http://househuntvictoria.blogspot.ca/2013/04/sold.html

  4. You can’t honestly believe that HHV was sold….it being April 1st and all

    • heh, heh….just trying to yank everyone’s chain.

      It’s not like there’s much else to talk about these days. Lord knows when that RE bloodbath everyone has been anticipating is supposed to commence. FWIW, i’m still not sure it will happen this year or even in 2014 (as i mentioned in a prev post a couple of months ago) as TPTB are doing a masterful job at keeping whatever it is they can propped up using any and all means possible while RE industry players and the MSM continue on feeding the masses their perma-bullish nuggets of info on a daily basis. Anyway, in light of this I’m sticking to my call that this slow bleed drags on much, much longer than most expect.

      (h/t to Ben Bernanke)

      • “It’s not like there’s much else to talk about these days. Lord knows when that RE bloodbath everyone has been anticipating is supposed to commence.”

        +1

      • Real Estate Tsunami

        Agree,
        Pretty slow around my hoods.
        2 houses that have been on the market for over 6 months finally sold.
        Two new listings popped up this week.
        Calm before the Storm?

  5. you lost me at “very bright and mid level bureaucrats at separate provincial government departments”.

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