“My neighbours, in their late 60s, just put their house on the market. They had said they would die in that house, but now they are worried that with the housing market going south they may be losing a lot of equity and they better sell now before it gets worse.”

“I can’t believe it!
My neighbor and his wife, who are in their late 60s, just put their house on the market.
I talked to them often before, and they said they would die in that house and leave it to their only son.
But now they say they are worried that with the housing market going south they may be losing a lot of equity and they better sell now before it gets worse.
To make matters worse, 1 year ago they took out a HELOC for $30k to help their son buy a condo.
Two week’s ago their son received a note from his strata that a special levy of $40k to cover inefficiences in the building envelope has to be paid.
Another leaky condo!
Needless to say, the old couple has no other assets than their rapidly depreciating house, so they are panicking.”

– Real Estate Tsunami at VREAA 23 May 2013 10:53pm

Hello again to all readers.
Posts recommence with this powerful anecdote from RETsunami.
We will aim to pop up anecdotes here on an occasional and irregular basis; we trust they will be appreciated nonetheless.
Keep well.
– vreaa

53 responses to ““My neighbours, in their late 60s, just put their house on the market. They had said they would die in that house, but now they are worried that with the housing market going south they may be losing a lot of equity and they better sell now before it gets worse.”

  1. Glad to see you back Vreaa!

  2. Welcome back, may your posting be less irregular than you think :)
    Fingers crossed

  3. Welcome back VREAA,
    I turned my link to you back on: http://www.chpc.biz/vancouver_chart.html (it was off during your break)

    This week I did an income approach study of a Vancouver condo purchase and it is apparent that current investors if there are any left do not have employment income or financing concerns. But Investors in the Vancouver market who think price risk is an issue will probably want an additional 25% reduction in average condo sale prices (they have dropped over 10% already) before they step into a buy and hold model. My case study is here:

    http://www.chpc.biz/2/post/2013/05/vancouver-condo-yield-case-study.html

  4. Speculation of future price drops. We’re all speculators now!

  5. To Vancouver readers…

    I sold my house in Burnaby and am now nestled into a full updated heritage house in lower Lonsdale NV renting for $2500 per month. Down the street, a similar house is asking $1.125M. I know there’s absolutely no upside available and am hopeful the trend will continue down.

    It appears this and Garth Turner’s blog attract the same type of people and have the exact sentiment on what’s going to happen. However, it hasn’t happened yet and I think ‘we’re’ still a minority group. I don’t foresee how the economics of this market can continue but I did say that 2 years ago as well. Prices are softer but let’s just hope the bubble did pop and I will get confirmation of that very soon.

    I welcome any feedback….

    • UBCghettodweller

      Because houses take a long time to sell, markets are only really comparable within a city over short time frames, and the volume isn’t that high, there’s at least a year’s latency before you collect enough data to start making any inferences on the trends (in my humble opinion.)

      Already it appears that the mad growth in prices has essentially stopped, but it will take us in to 2014 to see if they’re really going to drop.

    • Curious where you found the rental. Sounds like just what we’re looking for (or will be in March ’14).

      • Hey Dev/null – I found it on Craigslist. You gotta act quick even though it’s pretty expensive.

  6. Hmmmmm….this anecdote from Real Estate Tsunami sounds like the BOB RENNIE™ perpetual-motion R/E machine running in reverse….

    Fools! The BOB RENNIE™ R/E machine must always be set to run counter-clockwise……COUNTER-CLOCKWISE!!!!

    • By a strange coincidence, Kabloona… we appear to be on the same page viz. RennieTopicality… that would be today’s Zen – which is buried at the end of the prior thread and currently a captive of the RemorselesslyEvil RoboRedaktor…

      “It’s not a bubble. It’s a Seasonal Inflatable Structure.”

    • Real Estate Tsunami

      Exactly,
      BR realizes that there are only a few Property Virgins left, so he seduces the Property Boomers.

  7. welcome back vreaa!! Too many stories like this will start to overwhelm the supply side.

  8. Welcome back and kicking it off with a boom(…er) !

  9. Welcome back, VREAA! I missed you.
    Have you considered enabling a few trusted regular contributors to have editorial status, so VREAA can continue on a more regular basis without occupying inordinate amount of your precious time?

  10. kagurazakaman

    Welcome back :)

  11. Welcome back VREAA! So glad that the best YVR RE blog is active again. I get tired of all the idiotic trolling over at VCI and I can’t stand Turner’s excessive self-regard and manipulation of his comments section (not to mention his penchant for re-writing history). You’re the best by far!

    • Well, I will say on Turners behalf (and without blowing up his overinflated ego any more than he deserves) that he did tell all the Gold-lunatics on his site to take a hike and get a better life two years back. He was right. Gold has been in decline ever since and the crazy camp of those who believe in the death of the dollar and a collapse of the empire are licking their wounds and suffering untold losses to this very day. Of course they were not believers in his message back then and even today they are not going to admit they were wrong even after seeing their portfolios demolished into a heap of rubble. For all the guys faults he was bang-on the money with his ridicule of those who chose gold as their first religion above investments that actually offered boring returns in excess of inflation.

  12. [NoteToEd: Not surprisingly, members of the American Accordionists Association were ecstatic upon learning of VREAA's revival... accordingly, I felt compelled to draw to your attention their FestivalOrchestra's impromptu, celebratory concert - appearing above. Welcome back 'Phantom'. WelcomeBack. RelatedCinemaTriviaQuiz: The EminentlySilly RockOpera starring Paul Williams that beat RockyHorror to WideRelease by a year... was? No GooGling! Could be prizes...]

  13. Seeing you back VREAA brought a smile to my face! Hooray!

  14. pfffft! … http://tinyurl.com/p2s5wlf … bonus pffft-age! … http://tinyurl.com/pxm39cp

  15. Welcome back!

  16. OMG an article where they actually provide a bit o’ balance on the rent/ own issue! The times they are a changin’… http://home.mytelus.com/p/news/source/news_cp/category/money/article/23483052

  17. LadyInWaiting

    Has anyone noticed a precipitous drop in listings recently. I have seen a drop from ~400 to ~100 SFHs in North Van; other locations are similar. Are these expired listings, solds (can’t believe it) or just de-listed? Very curious–or maybe I am crazy.

  18. Real Estate Tsunami

    Lady in Waiting!
    The MLS website had a serious crash this morning.
    They appear to be up and running again.
    My guess is that the crash was caused by all the new listings coming in. :)

  19. Yay yay! I’ve been checking back every day since you left. A new post every once in a while is all we need to keep us going!

  20. LadyInWaiting

    If it is up and running again, then whatever has happened to the missing ~300 listings? Spontaneous combustion?

  21. LadyInWaiting

    Well, well, all the MLS houses are back. Sorry for sounding an alarm.

  22. 4SlicesofCheese

    Around my place, ion E. Van, I notice a couple new builds that have been sitting on the market I believe for over a year have finally been sold. I wonder what the sold prices are.

    Near my parents place in Bby, the next street down there are at least 4 houses on one street that have sold stickers on them, all teardowns which I imagine are going to be built into monster houses as is the trend in South Bby, Will the new builds have as much success?

  23. Spectacular WeekendZen!… [offered without further comment]….

    [G&M] – Globe investigation: The Ford family’s history with drug dealing

    http://tinyurl.com/qbu9vg5

    [NoteToEd: Finally. The Globe commissions an investigative piece. More to the point - it nicely illustrates some rather unsavoury home truths about crime, real estate... political power and the cash nexus.]

    • Ralph Cramdown

      Let’s face it, Nem. The last decent character to emerge from Etobicoke was probably the fictionalized version of Seth Bullock. At least the rest of the country likely doesn’t hate us so much when they’re laughing so hard at us.

      Oh, and ‘Phantom of the Paradise.’

    • Nemesis:

      Gawker’s “crackstarter” campaign just exceeded the $200k total…. okay, now bring on the non-existent video!

      Oh, wait….. Ford’s Team (what’s left of it) sent the Toronto Cops to fetch the non-existent video last week…and even supplied the Street and Unit address for the Perp! Har-har-har!

      “Report: Police interviewed Ford staffer after alleged drug video linked to murder”

      http://www.citynews.ca/2013/05/27/report-police-interviewed-ford-staffer-after-alleged-drug-video-linked-to-murder/

      “…The Globe and Mail, citing “two separate sources,” is reporting that police interviewed one of the mayor’s senior staff after a video that allegedly shows Ford using drugs was linked to a murder. According to the report, the staffer reached out to police after being informed of a tip by another person in the mayor’s office.

      Ford denied any knowledge of a police probe on Monday, telling reporters, “I have no idea what police are investigating.”

      The tip came in after the Toronto Star and Gawker.com published reports that an alleged video of Ford smoking crack and making homophobic and racist slurs was being shopped around by Somali drug dealers.

      The staffer claimed to know the address and unit number where the video was being held.

      “[T]he video originally belonged to an individual who may have been killed for its potentially valuable contents, according to a source,” The Globe said….”

  24. About 5000 lower mainland props have been withdrawn on MLS and re-listed yesterday, – all under new IDs. Seems they are looking for ways to improve stats…

    2013/05/25 Greater Vancouver statistics from MLS database
    Total number of properties on sale today: 23747
    # of Properties that were withdrawn or sold yesterday: 329
    # of Properties that were withdrawn for the last 30 days: 5810
    # of Properties that changed price for the last 30 days: 8393
    # of Changed the price more than once for the last 30 days: 2635
    # of new properties added today: 270
    # of Properties that were changed today: 5116

  25. Welcome back. You were missed.

    There may be a little spike in purchases in coming weeks – QE by nation’s banks is flushing the cash flow of large banks – this will filter down the food-chain.

    QE enhances the wealth of the already rich at an exorbitant ratio compared to the working-rich. Working-poor or poor are out of luck altogether.

  26. Welcome back dear ed. Truly missed. And yes, quality over quantity is always a preferred strategy.

    And the rest of us? We’ll all try to make an effort to make this little refuge as pleasant a place to visit as ever. Plus hard, biting anecdotal tales on the reality of the crazy real estate bubble.

  27. great to see VREAA return.

    this week we experience Mars anaretic in Taurus… don’t know what that means? look it up.

    We’ll see if Carney drop’s a bomb before he flies off to UK. Fly little snowbird… refi the canadian economy.. and off you go to actualize your debt piggie world…

    • Yep, no doubt about it… Times are ToughEverywhere, Mr. Moon.

      Take this morning’s Zen, for example – a splendid cautionary tale from the realms of the World’sOldestProfession… and quite possibly of interest to those in allied/RE oriented occupations.

      “It’s stupidly competitive right now,” reckons Vivienne, who added, “The days of being able to make a full-time living out of [guess her occupation] are long gone – at least in larger towns and cities.”

      [Economist] – Sex doesn’t sell: An old industry is in deep recession

      …”George McCoy, who runs a website reviewing over 5,000 massage parlours and individuals, says that many are struggling. Sex workers tell him they have been forced to hold down prices. Like other businesses, massage parlours and private flats are suffering from rising rents and energy costs. Even Mr McCoy’s website is under the cosh: visitor numbers are down by a third… In part, this reflects the sluggish economy. Overall consumer spending at the end of 2012 was almost 4% lower than its 2007 peak.

      …And Vivienne, an independent escort in the south who works part-time to supplement her income as a photographer, says paying for sex is a luxury: “Food is more important; the mortgage is more important; petrol is more important.” She is offering discounts out of desperation, reckoning it is better to reduce prices by £20 ($30) than to have no customers at all. Another woman says that some punters are just as anxious to talk about the difficult job market as they are to have sex.

      …More people are entering prostitution, agrees Cari Mitchell of the English Collective of Prostitutes. Some working women in Westminster say they have halved their prices because the market has become so saturated. In London, and increasingly elsewhere, immigrants provide strong competition. But Sophie, an expensive escort in Edinburgh, says she is seeing an influx of newbies including students and the recently laid-off, many of them offering more for less.”…

      http://tinyurl.com/op8ssql

  28. pretend to be an out of town buyer and some realtors may tell you Vancouver has a Mediterranean climate, i wonder if that whopper ever works

    • [NoteToEd: There's still a centimeter or so of untouched DualCompound on the rim of those new Michelins. I must be getting old. On the BrighterSide, when I can no longer safely HardCharge StileItaliano.... I suppose I could always get a Harley? It's just that everyone who rides them either looks like SantaClaus or the Mayor of Toronto. I don't think I'd 'fit in' with that crowd, somehow.]

  29. http://ca.news.yahoo.com/southside-church-duped-accused-con-man-sold-forced-163439823.html

    The Victory Church property had been originally listed for sale at $14 million. But Topolnitsky noted that the property had been on the market for 10 months, and a new appraisal had pegged its value at roughly half its original listed price.
    “The market has spoken,” Topolnitsky said.

  30. Just got my property tax payment notification today.
    On a property assessed at 1.14 million, with the home owner grant, year taxes work out to be “only” about 3600 a year. I say “only” because in San Francisco, I would be paying over 10K a year for a property worth 1.14 million. This is actually quite a deal.
    Shows that in actual fact, people aren’t rich in this city. If you actually were investing or living in a property with over a million bucks you should be able to pay 10K+ in taxes. Fact is, if property tax rates were to sky rocket to what they should be, nobody would be able to truly afford these houses.
    Of course, my cousin with his 2.5 million + monstrosity on the west side, his property tax bill is over 10K here. I laugh at him; the money that I could’ve dumped into this house is nicely invested, while I save over 8K a year compared to what someone with my income should be living in in this city. And this 8K gets invested instead, and with compounding dividends, I’ll be nicely ahead in 10 years time.

  31. Real Estate Tsunami

    Brian,
    Once property values have reverted to their mean, i.e. Lost about 40 percent of their value, while property taxes will not have come down, homeowners, particularly the elderly on fixed income, will scream bloody murder.
    That is when the real fun begins.
    Get out the popcorn and enjoy.

  32. Welcome back VREAA!

    Your departure left a void that was not filled by Garth’s ego or VCI’s bully pulpit.

    Right now is when it really gets interesting. I think that the MLS “relisting” scandal is a sign of incredible desperation and should be headlined by everyone!

  33. DearReaders, such as it is, your TuesdayMorningZen and Quote ‘O TheDay… [NoteToEd: with apologies to Dickens, it's very very much a TaleOfTwoCities. DejaVu much?]…

    “It is a relentless pace that invades the human psyche and the human soul that we human beings cannot live with at constantly sustained levels. … We seem to have lost social conscience within the community of ‘civilized society’ and destructive materialism has reached an almost pathological state.” – London Chelsea resident Alicia di Sirignano

    [G&M] – Digging deep: ‘Iceberg homes’ make for irate neighbours in London

    …”When Canadian businessman David Graham decided to expand his house in a high-end London neighbourhood, he didn’t want to build up or out. He planned to dig down. Way down.

    Mr. Graham, a former cable television mogul who was once married to Barbara Amiel Black, drew up plans to carve out three storeys below his 19th-century home in Knightsbridge. The extra space was for a swimming pool, a three-car garage, a gym, ballroom, changing rooms, hot tub and servants’ quarters.

    He joined the growing number of wealthy Londoners – from Russian billionaire Roman Abramovich to steel tycoon Lakshmi Mittal – who have been turning their mansions into so called “iceberg homes,” named because most of the house is below ground. But only now are the Byzantine London real-estate regulations catching up to the trend as neighbours grow increasingly irate.”…

    http://tinyurl.com/nvsge79

    [BloomBerg BusinessWeek] – As Rich Parisians Flee the Taxman, Real Estate Prices Fall

    “I’ve personally seen a number of clients who are going to live in other countries.” – Richard Tzipine, Head of Barnes International Agency, Paris

    …”If you’ve dreamed of buying a luxurious Paris pied à terre, this could be the time to act. Real-estate agencies specializing in high-end Paris properties say prices are down 10 percent to 20 percent this year. The inventory of unsold properties has been rising as the French economy stagnates and some wealthy owners flee the country to escape new taxes on the rich.

    “There are some opportunities now—properties that have never been on the market before,” says Marie-Hélène Lundgreen, director of the Belles Demeures de France agency. Lundgreen’s agency recently sold a Paris mansion that had been in the same French family for generations, to a Brazilian buyer.

    …As the French sell, foreigners buy. Jean-Philippe Roux, director of the Paris office of John Taylor Luxury Real Estate, says foreigners bought 70 percent of the properties sold by his agency during the first quarter of this year. Lebanese, Russians, and Chinese are among the most frequent buyers, he said.

    Each nationality has special preferences, Roux says. Most Chinese buyers “want a view of the Eiffel Tower and a large reception area” because they tend to use their Paris residences for business purposes. Russians, on the other hand, prefer digs near the Avenue Montaigne luxury shopping area, off the Champs Elysées.”…

    http://tinyurl.com/pfk2elv

  34. pffft!… Robo strikes again. “M’aider. M’aider.”

  35. Welcome back, vreaa! :)

  36. Yellow Helicopter

    VREAA, just seen that you are back – and it made my day! Hope all is well!

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