Category Archives: 03. Changed my Life

Stories about folks who have made big changes, directly because of the current value of Vancouver RE.
Early retirement, bought more toys, stopped other saving, etc. etc.

Mayor Robertson Selling His House

912 W 23rd

912 W 23rd Avenue, Vancouver
2,922 sqft SFH
Asking price $1,950,000
Assessed (reportedly) $1,600,000

- for the whole story, see ‘Guess who’s trying to cash out of the real estate market in Vancouver?’, at ‘Whispers from the Village on the Edge of the Rainforest’, 9 July 2013
[hat-tip Burnabonian]

“I was really fortunate with how things worked out for me in real estate. I definitely took chances when I bought a few presale condos to flip back in 2004, but I was adamant at the time that there was room to grow for Vancouver.”

“I have moved on from residential and have been working in the commercial RE industry for over 8 years now. A lot less ups and downs and I get to deal more with businesses rather than individuals who tend to be less professional. Both sides of the industry have their pros and cons, but I love working with commercial brokers and tenants. I work for a large developer in town looking after their commercial portfolio in Western Canada.

A little about what has happened [to me]:

- Sold 2 of my condos that I bought pre-sale in 2004 in downtown Vancouver just by Rogers Arena. One sold in 2010 and the other in 2012. Both were 2 bedrooms that were purchased for $280K give or take and sold around $560K each. One I lived in with my family and rented out the other.
– Used the profits to upgrade to a spectacular 3-bedroom, 1600 square feet “new” condo in Fairview
– Have 2 lovely young kids
– Love condo living close to downtown with my family for the proximity to work downtown, restaurants everywhere and just the energy that the burbs don’t offer

I was really fortunate with how things worked out for me in real estate. I definitely took chances when I bought a few presale condos to flip back in 2004, but I was adamant at the time that there was room to grow for Vancouver. I still think it is one of the best places to live in the world and I am gladly paying for it by choosing to live close to downtown. I travel a lot internationally and every time my plane lands at YVR, I feel so blessed to be back home to such a beautiful place.

I took some chances, had some luck and stayed away from the extreme negative and positive views of posters on [RE Talks forum]. I would put myself in the Bull camp always, but that is only because I think you need to be ready to seek out deals – and this requires a pro-active mindset. One should never buy what they cannot afford (everyone agrees on this), but you should always be ready to buy a home when you need one (starting a new family, for example). Most of the original bears on [RE Talks] are gone, but I must say, it is funny to look back and see how wrong on the timing they were.”

- Property_Magnate at RET 24 Jun 2013 [cited by 'WhipMaster' (aka Johnny Horton, etc, etc) as an example of a story from a "winner" in Vancouver RE, VREAA 25 Jun 2013 7:14pm]

Nobody is disagreeing with the idea that one could have done well in Vancouver RE by buying in 2004.
And, please, nobody misinterpret the above anecdote as an endorsement for buying “a few” presale condos in Vancouver, least of all in 2013.
– vreaa

‘Canadians obsessed with real estate, poll suggests’ – “Just as many people reported talking about real estate on a regular basis as they did about hockey.”

hi-realtor
Besotted.

“Most Canadians think about real estate on a regular basis, and a good number of them are obsessed with it, an online survey suggests.

That’s the takeaway of a recent poll by online home selling firm Zoocasa, where the real estate company commissioned Abacus Data to poll 1,000 Canadians online between June 3 and 6, 2013.

The poll found that 84 per cent of respondents across the country think about real estate on a regular basis, and 85 per cent have gone as far as shopping online for a new home in the past year.

“In ever increasing ways, Canadians seem almost obsessed with real estate. And it’s understandable,” Zoocasa president Carolyn Beatty said in a release. “For the vast majority of Canadians, their home is the largest purchase they will make in their lifetime.”

Nationally, more than a third — 34 per cent — described either themselves or a loved one as obsessed with real estate. In the Greater Toronto Area, which has the second-highest average home price in the country after Vancouver, the percentage of people who identify themselves as being obsessed jumps to 47 per cent, the highest in the country.

Zoocasa notes that the survey took place during the Stanley Cup Playoffs, and just as many people reported talking about real estate on a regular basis as they did about hockey.

Some 28 per cent of respondents say they have gone to an open house at some point in the past 12 months.”

- from ‘Canadians obsessed with real estate, poll suggests’, CBC, 20 Jun 2013 [hat-tip elchavo]

Not me!
I can quit whenever I want!
– vreaa

Living In Van-Couver – “There’s no way they can afford a mortgage in Vancouver. I know one emergency first-responder who lived in his van to save enough money to afford a downpayment.”

DCIM100GOPRO
Mathew Arthur, a Vancouver-based designer, checks email in his converted 1987 Dodge Ram Prospector.

“Mathew Arthur ditched a renovated laneway house he shared with his two brothers to live in a cheap 45-sq. foot 1987 Dodge Ram Prospector for the next year. He’s part of the growing “van dweller” community in Vancouver, where sky-high housing costs have forced many to get creative.
The contemporary nomadic community describes itself as an “island of misfits, a family, a tribe” on a popular Yahoo! forum. Some have embraced mobile living out of necessity, while others like Arthur are doing it to challenge themselves.
“I had a good design job, but in no way found engagement in my life,” Arthur told The Huffington Post B.C.
The 30-year-old wanted to challenge his notion of comfort by engineering a personalized living space that would test his creativity.
“I iterated through ideas about living in a tent, a shipping container or a commercial space with no household amenities until I arrived at the idea of living in a van,” said Arthur in a blog he’s keeping to document his year-long nomadic venture.
In early December, Arthur bought a $500 used van off Craigslist from a farmer in the B.C. Interior. With the help of his family, the vehicle was gutted, cleaned of mice feces and rebuilt with $400 worth of furniture, wiring and insulation.
In the small space, the van has four main areas: the kitchen and sink, work space, storage and bed. Without a personal toilet or shower, he has a daily excuse to go to yoga for exercise and to use the studio’s facilities.
The difference has shown in his savings: his monthly rent has reduced from $850 to a $200 parking fee plus $50 for hydro.
The tiny living space has forced Arthur to be mindful of his use of resources; he’s producing less garbage by preparing simple, fresh foods, and is using less water and electricity overall.
“The one thing that I took for granted was the freedom to move room to room,” said Arthur of living in a house. However, the shift from a 700-sq. foot house to a van parked in an East Vancouver alley has its quirks.
More people go through the alleyway than he anticipated. He’s befriended a middle-aged woman named Edie who periodically strolls through collecting bottles from the neighbourhood’s recycle bins. The occasional drunk lovers’ midnight fight is also easily audible through the van’s walls.”

– from ‘Mobile Living: Vancouver Van Dwellers’ Nomadic Lives’, Zi-Ann Lum, Huffington Post BC, 27 Jan 2013. All photos Mathew Arthur.

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“They’re a merry band of vagabonds, living in their vehicles not so much because they can’t afford rent or a mortgage — though that’s part of it — but to cast off the chains of mainstream consumer living.
They’re van-dwellers and RV gypsies, free as birds and believing that your possessions in the end wind up possessing you.
“I had all of this stuff,” said 30-year-old Shawn Linley, sitting in his Econoline RV in North Vancouver. “Stuff, stuff, stuff, so much stuff.
“I don’t want a gas-powered weed-eater any more. I don’t want a huge flatscreen TV. I don’t need ’em.
“I’m never going to live in an apartment again or buy another house.”
Linley, like many vehicle-dwellers in B.C., is a journeyman tradesman. There are no official numbers of how many people live in their vehicles in Metro Vancouver, but it’s probably more than people think.
There are little mobile squatters’ camps all over the Lower Mainland — beside treed North Shore creeks, in industrial zones, beside East Van and Burnaby parks and SkyTrain stations, and along the beaches of Kitsilano and Point Grey
It is a sub-culture that is by definition discreet and shadowy, moving every so often to avoid drawing attention.
“Basically, they’re untraceable, people who are good at flying under the radar,” said Judy Graves, advocate for the homeless with the City of Vancouver.
For the most part they have jobs, she said, at least seasonally.
“And some people just do not believe in paying rent, and there’s no way they can afford a mortgage in Vancouver,” Graves said. “In fact, I know one emergency first-responder in Vancouver who lived in his van to save enough money to afford a downpayment.”

– from Living in a vehicle confers freedom from ‘stuff’, Gordon McIntyre, The Province, 11 Feb 2013 [hat-tip Aldus Huxtable]

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Spot The Speculator #96 – “In 2008, when I was 28 years old, I had saved $70,000, enough for a 20% down payment on a triplex in Toronto. I moved into one unit and the rent from the other two units paid for the mortgage and utilities.”

“I’ve always been very focused in my life. I was born a triplet and knew from an early age my parents wouldn’t be able to pay for many extras, or for postsecondary education for all of us. But I was determined to go to university and to buy a home of my own. So in high school I started working as a waitress for 20 hours a week. During the summers I took as many shifts as possible, often working seven days straight. I was a workaholic and should have cut back because my grades were suffering, but I persevered.”

“I earned enough to pay for tuition by living at home with my parents and commuting to York University. It wasn’t easy. I didn’t have a car so I used buses to make the two-hour journey to York and back each day. At one point I considered buying a car but was shocked when my dad showed me how expensive it was. I kept commuting every day for four years. Believe me, it was really depressing. I would get home every night and it was cold and dark, and I was tired. But I knew I was saving for my big goal of owning an investment property, which kept me going.”

“After graduating with an English degree in 2006, I had no student debt and $20,000 in savings from my waitressing job. Then I got a lucky break-I landed a job as an administrative assistant, paying $32,000 a year in downtown Toronto. In 2008, when I was 28 years old, I had saved $70,000, enough for a 20% down payment on a triplex in Little Italy. I moved into one unit and the rent from the other two units paid for the mortgage and utilities. Last year, I got married and my husband moved into the apartment with me. I’ve never doubted the triplex was one of the best financial decisions I’ve ever made.”

“The key for me was tracking my spending in a journal to see exactly where every penny was going so I knew where I could cut back and add to my savings. Most years I saved 70% of my earned income, which I used to pay for university and for the down payment on the triplex. By living at home a little longer than most people I was able to really beef up my down payment. That’s made me truly independent a lot more quickly than many of my friends who are still mired in debt.”

“Now my goal is to pay off the mortgage on the property as quickly as possible. I’ve done some renos over the years and I’m putting $500 a month extra on my mortgage to pay it off faster. The triplex’s value has also gone up. I bought it for $350,000 and it’s worth $450,000 today.”

- Angie Oliveira, 32, Toronto, as featured in ‘How to become a landlord’, Julie Cazzin, MoneySense 16 Jan 2013 [hat-tip proteus, who sent this link by e-mail and added "Saving 20k waitressing is a heroic accomplishment."]

Angie has an admirably proactive savings habit. Because of this ability, she will quite likely do fine in the long run, but we suspect this will end up occurring despite her RE investment, not because of it.
Yes, she is describing a ‘cash-flow positive’ property (something unavailable in our city in 2008), but we’d like to see more of the math before being sure about that. Also, there is downside risk of increased mortgage rates, downward pressure on rents (TO condo glut), and unexpected expenses.
She bought a few years prior to the peak of a multigenerational bubble in real estate. If property prices drop 33% from the peak, she’ll likely still be able to maintain her ownership, but she will, on paper, have lost her profits and her downpayment. This is something we’d imagine would be particularly painful for her, given the hard work it has taken for her to accumulate her savings gains.
In that regard, it is interesting to note that it took her many years of extreme saving to accumulate $70K, but her RE purchase then rose in value by $100K from 2008 to 2012. In fact, she ‘made’ more on paper in RE than she did in entire income those 4 years, when taxation is taken into account. This is a good example of how RE price rises through the speculative mania have perverted the way in which people consider the relative value of real estate, money, work and saving; and how homes have become financial instruments as much as places of shelter.
– vreaa

Seeking Value In RE… And Other Spheres – “When my PhD is done, I’ll be more than happy to shake the dirt of Vancouver off of my shoes. Pretty much any other city I go to in North America has either a lower cost of living or better job opportunities or both.”

“Most of the new UBC profs I know live in tiny sky boxes, an hour commute out in the suburbs, or are up to their ears in debt. Remember that years of grad school followed by a half-decade of post-docing leaves them with very little savings. Either mortgage up or buy small and/or far out, because you don’t have a damn thing for down payment.
Honestly, when my PhD is done, I’ll be more than happy to shake the dirt of Vancouver off of my shoes. Pretty much any other city I go to in North America has either a lower cost of living or better job opportunities or both. The only way I lose as a trained scientist is by staying in the lower mainland. This is the sentiment amongst pretty much every other grad student I know who doesn’t buy in to the “best place on earth” dogma.
Vancouver has become a place where young people piss away their 20s in pseudoretirement and student debt and a resort town for the pacific rim economic elite and babyboomers who bought property pre-2001.”

“I’ve seen a few professors trade up in the real estate market after being in Vancouver for several years. This usually was because they were able to buy a place in East Van, Kits, or Dunbar pre-2004 and trade up as the market got over heated in combination with their income plus the spouse’s… I also know of one person who related the market to a E. coli growth curve and pointed out that we’re hitting plateau phase right now as all economic nutrients have been used up and got the hell out at the peak. Maybe luck, maybe real foresight.”
‘UBCghettodweller’ at VREAA 17 Jul 2012 8:55am and 2:11pm

“As a highly trained specialist, it usually makes sense to go where your skills are valued and appreciated, and you can be financially rewarded for having those skills. It is difficult to argue that Vancouver abounds in such opportunities for highly trained scientists (there are exceptions, e.g., geologists and forestry-related scientists).”
‘Anonymous UBC Professor’ at VREAA 17 Jul 2012 9:39am

“I stuck it out as a postdoc for a few years and then, adios! And I’ll tell you, I’ve never looked back (although I visit from time-to-time… mainly just to remind me why I’m gone).”
E.G. at VREAA at 17 Jul 2012 4:28pm

“I have a sister-in-law who graduated form UBC with a PhD in BioChem. just a few years ago. She would have happily stayed in Vancouver, actually she would have happily moved anywhere she had to, for a post-doc or tenure-track position. RE was not an issue, simply landing a good job was #1. My understanding is faculty positions are difficult to come by. A good friend of mine with a new doctorate was just offered a position at UPEI and he is extremely happy, again RE not a factor, just getting an offer was the trick. I sometimes wonder if we place too much weight on the significance of Vancouver RE in regards to career, especially in the early years. After all, renting is always a great option, even for professionals. Regardless, my sister-in-law landed at Stanford, and rents.”
Allen at VREAA 17 Jul 2012 11:14am

“The phenomenon isn’t restricted to Vancouver (albeit, Vancouver’s RE market distortions arguably exacerbate it)…
Here’s a timely piece from NewsWeek’s Joel Kotkin on ‘GenerationScrewed’ that addresses those themes.”

Nemesis at VREAA 17 Jul 2012 1:20pm

“Perish the thought there are vast expanses of undeveloped land in North America, ripe for the picking. Areas of California, once deserts and groves, turned into some of the most progressive areas on the planet over the past 40 years.
The “generation screwed” needs to figure out other methods of getting what it wants. Muscling in on the previous generation’s territory is likely going to meet with resistance. From that perspective it should be no surprise apartments are becoming smaller.”

jesse at VREAA 17 Jul 2012 3:24pm

Wise people take advantage of resources that are irrationally undervalued, rather than getting in line to compete with the herd for resources that are irrationally overvalued.
– vreaa

“My parents, who bought their place in North Van about 25 years ago, have used Helocs several times to pay for scientology training.”

“My parents have used Helocs several times to pay for scientology training. Yes, they are full on couch jumpers. They bought their place in North Van about 25 years ago.”
midnight toker at VREAA 17 Jun 2012 2:45pm

People have dipped into the RE_ATM for all sorts of things they previously wouldn’t have been able to ‘afford’, increasing their leverage to the RE market as they do so.
This spending will come to an abrupt halt when prices stall and reverse course.
– vreaa