Some Successful Olympic Rentals: “I know of a nice west end home around 4000 sqft that went for around $2000 per night for 35 nights.”

Some successful Olympic rentals; for the Olympic record. – vreaa

Invisiblehand at RE Talks 13 Jan 2010 1:20 pm – “I know of a nice west end home around 4000 sqft that went for around $2000 per night for 35 nights.”

HabitualLurker at RE Talks 13 Jan 2010 3:27 pm – “Back in September 2009 I was contemplating an offer – 1 month for $10K, for my furnished suite within walking distance to venues.  Typical rent for a suite like mine in this building is around $1200-1500/mo., unfurnished so I took the money and ran. 75% has been paid out already. 25% due @ noon on the day the tenant vacates. Even though some work is involved (I’m a bit OCD so I calculated it to be approx 100 hours of inconvenience), it still works out to $100/hr which I’ll take.”

habs100 at RE Talks 13 Jan 2010 3:57 pm – “A friend rents out one bedroom condo in dt vancouver for two months for the Olympics. Less than 600 sqt. can’t remember the name of the building. Full furnished. I think the contract is $8,000 for the two month duration.”

househunting at RE Talks 13 Jan 2010 6:07 pm – “I know of two people that own in Elan on Seymour St in downton that rented out their 2 bedrooms suites furnished and will net $14,000 each for the month of February. They went through a rental agency.”

Lady Luck at RE Talks 13 Jan 2010 6:46 pm – “Whistler rents are huge. The highest one I know of is a 4 bed luxury home $160 000 for 2 weeks. The client is a movie star.”

mabajada at RE Talks 13 Jan 2010 7:46 pm – “Collegue of mine just rented a 2BR+den for 11K in Yaletown this month. And a 6 BR House for 23K. Both for the month for company executives and staff.  It seems like alot of the people out their trying to rent were very amateurish.”

And an underwhelming data point -

registered at RE Talks 13 jan 2010 1:24 pm – “A quick search on Expedia results in plenty of available flight seats for the Olympic period from LA, Toronto, London & New York at surprisingly low prices.”

—

UPDATE 15 Jan 2009 Posts at vancouvercondo.info

Olympigs 14 Jan 2010 10:49 am – “A unit at 555 Jervis advertised in Craiglist for the past year has been asking from $3,500 to $5,000 and now $3,000. It was previously rented for a paltry $2,000 p.m.”

“So our absolute best advertising for Vancouver and its real estate is not “Best Place on Earth”, ski and golf in the same day, mountain and ocean view, democracy & human rights, etc. Nope. Our best advertising apparently is people like Lai Changxing who don’t get deported and gets to live high on the hog here.”

Much is said of the allure of Vancouver for Asian home buyers. Here a poster quotes Richard Russell, and gets his own wife’s opinion regarding the relative attractiveness of Vancouver & La Jolla, California, from a Chinese perspective. -vreaa

This from space889 at vancouvercondo.info 13 Jan 2010 10:26 am -

“I note more and more Asians here in La Jolla. I’m thinking that in ten years La Jolla will be half Chinese. Consider this — you’re a Chinese multimillionaire (and there are thousands of them). You want to get rid of a lot of the dollars you own. You search the world — the best weather on earth is in San Diego’s La Jolla. La Jolla is situated right on the Pacific Ocean. The US is a free country, nobody goes to jail and is tortured because he announces that Obama is a dud. Home prices in the US are cheap compared with prices in China. La Jolla is a bargain, and probably a good “safe haven” just in case things don’t go right in China. ” - [Richard Russell, DOW Theory Letters, the largest fee based subscription investment newsletter in the world.]

“I showed this to my wife and her reaction was “no I think rich Chinese people will still to Vancouver because Vancouver is way more famous in China than La Jolla”. I think partly this is due to at least 2 popular Chinese TV series based in Vancouver. Also when she moved to Vancouver back in 2000, it was in part because people posted online in China that Vancouver is paradise on Earth – however she absolutely hates the rain and the dark cloud here, really disappointed. She much prefer sunshine. She thinks Hawaii is really paradise on Earth. As well, she said even more important is the fact that virtually all the rich people in China who can buy a $1.5M/$2M+ houses in Canada or US got at least a good portion of their money illegally or at least in an extremely questionable manner. What does that mean? It means that they would prefer Canada over US because they don’t need to worry about being deported back to China with their $$! Yeap that’s right! Her believe that there will be lots of rich Chinese people coming over and buying up expensive real estate is simply because Canada don’t deport criminals with lots of money back to China! So our absolute best advertising for Vancouver and its real estate is not “Best Place on Earth”, ski and golf in the same day, mountain and ocean view, democracy & human rights, etc. Nope. Our best advertising apparently is people like Lai Changxing who don’t get deported and gets to live high on the hog here And I have absolutely no comeback for that argument, especially now Canada has the approved tourist destination status which makes coming to Canada easier than before. So yeah come winter Olympics, we might indeed get a flood of rich Chinese people coming over and buying expensive houses and moving prices up even more. However what else these people might bring over, that’s an entirely different question.”

Cabs and Hotels, Olympic Canaries: “People have been canceling their reservations and willingly forfeiting their $500 deposits.”

Olympic exuberance and Vancouver RE market fantasies are joined at the hip, so we are following the Games with interest. Recently a local cab driver told vreaa that he expected 30% LESS business through the Games. Why? Just a few reasons: 1. The lower mainland has been opened to all BC cabs for the duration of the games; 2. Eight hundred buses imported from the prairies will shuttle people to and from Whistler; 3. Cabs are not allowed to take people from the airport to Whistler; 4. Thousands of volunteer drivers will be giving Olympic participants free limo service in 4,600 GM vehicles supplied especially for the games. So a combination of restrictions and competition will reduce business for local cabbies. We have also heard from individuals who own condos in Whistler who have been unable to rent them out. -vreaa

Related stories from oneangryslav2 at vancouvercondo.info 8 Jan 2010 12:57 pm -

“I took a cab into work this morning and as I do every time I’m in a cab, I ask the driver this question: “How’s business?” My query of this cabbie–like my queries of all cabbies–was not pure. It was instrumental to my goal of unearthing information about the potential economic impact of the Olympics on our quaint metropolis. Why cabbies, you ask? Well, they’re the proverbial canaries in a coal mine when it comes to spotting economic trends in their locales. So, what little anecdote do I have to share? Well, the cabbie said that business was slow; he’d had one fare per hour since he started and had made a total of just over $50 in fares (including mine) from 4:00-10:00 am. I tried to console him by noting that this was the calm before the Olympic storm of business that was bound to blow his way. He wasn’t convinced. His wife works at a hotel–a smaller boutique hotel–on Robson Street and their occupancy rate for February is 27%! I made him repeat the figure to me so that I was certain I hadn’t misheard. Yup, 27%!  The hotel had initially jacked up rates to $1000/night and had accepted enough reservations and deposits (a $500 deposit per booking, not per night) to have full occupancy during the Games. So what happened? Well, people have been canceling their reservations and willingly forfeiting their $500 deposits. My ride ended so I wasn’t able to ask him whether that was because they had decided not to attend the Games at all, or whether they had found cheaper accommodations, or whether the rooms had been booked by some corporations “just in case” and were no longer needed.”

“I am one of many young Canadians that migrated west to take advantage of the economic boom. I might be one of many that won’t stay because I’m priced out of the housing market.”

This from taylor192 at vancouvercondo.info 6 Jan 2010 2:07 pm -

“I am one of many young Canadians that migrated west to take advantage of the economic boom. I might be one of many that won’t stay cause I’m priced out of the housing market. I’ve had discussions recently with other 25-35yos that are considering a move back east once the economy here starts to struggle or it’s time to start a family. It just doesn’t make sense to take on high housing costs to stay here, or when the Olympic/construction job markets dry up. The alternative is to flee metro Vancouver to the burbs of Surrey leaving behind the beach/mountains that brought us here. Might as well continue heading east, back to where we came and much cheaper housing costs.”

James Schouw in the Vancouver Sun – “Demand will always outstrip supply; Fundamentals and other factors don’t matter; Prices will rise; Don’t worry.”

An article named ‘Supply, demand, and a real estate rebound’ from The Vancouver Sun, 2 Jan 2010 is written by James Schouw, of James Schouw & Associates.  The article doesn’t make it clear, but Mr Schouw is a Vancouver condo developer. The author and the Sun may well presume that this fact is just too obvious to mention. Schouw’s projects include ‘Grace Residences’, ‘Iliad’ and ‘Artemisia’.  Units in ‘Artemisia’, to be built at Hornby and Helmcken, are now in pre-sale for >$1,000 per sqft. ‘Grace’ has fine street appeal, and is justifiably admired for its style and construction quality. Schouw also appears to have a genuine love for our seawall, and we certainly won’t take him to task for that.

Mr Schouw admits to having a simple approach to RE markets. As he puts it at his own website “Real estate needn’t be complicated. Greater Vancouver’s population quietly grows by about 50,000 each year. We need homes for 1,000 more every week. Meeting that demand will be an increasing challenge.” (quote from the promo slideshow for the Artemisia project).

We differ from Mr Schouw in that we believe that price:income ratios, rent:price ratios, interest rates, overt and covert speculation, inherent leverage, overextended owners, employment levels, the state of the economy, ownership levels, & household debt, are just some of the other factors that need to be taken into account when assessing the health of the Vancouver RE market. Our outlook for Vancouver RE can be found here.

For simplicity sake, and for the record, we here offer this reorganized account of Mr Schouw’s Vancouver Sun article. (Quotes from Mr Schouw in bold; Italicized headings from vreaa):

1. DEMAND & SUPPLY

(a) DEMAND IS, AND WILL REMAIN, HIGH.

(i) Population growth; Immigration.

“Many did not contemplate the rate at which our population grows, and the resulting pressure on real estate. They may not have realized it, but people who wait out the market typically find themselves competing against almost 1,000 more people every week in need of a home in Greater Vancouver.”
“Local housing demand, a function of population change, has continued to grow as it has done for years, along with most of Canada. During the 15 months to July 1, 2009, BC’s population alone grew by 92,593, requiring almost 40,000 additional homes. That’s a normal rate of population growth for BC, representing the number of births and new arrivals minus deaths and people leaving, and isn’t likely to slow.”
“Global population is growing too, by the better part of 100 million every year.”
“As the city continues to mature into its world-class role, increasingly desirable to prospective residents from all continents, home ownership and rental will become less affordable, especially in the urban core.”
“Greater Vancouver’s growing population will continue to absorb about 300 additional units of housing every week.”

(ii) People simply need to own homes.

“Greater Vancouver’s real estate market will continue to be driven by the growing number of people that simply need homes.”
“People need homes, and they can’t just walk away en masse as they can with other investment vehicles.”
“An individual or family doesn’t have to be thrilled about the economy or the Olympics to participate in the housing market. They just have to be living.”

(iii) The Olympics.

“Olympic exposure will indeed help to fuel demand in the long term.”

(b) SUPPLY IS, AND WILL REMAIN, LIMITED.

“Since the middle of 2008 the development industry has fallen well short of meeting demand, and continues to fall short, causing effective inventory to shrink. In Greater Vancouver, certain developers were sitting on hundreds of vacant homes a year ago, but now have none.”
“New properties won’t last for long.”
“Prospective ”sellers” in a stable or growing population are typically also prospective ”buyers.” When thousands of homes change hands, keeping spirits high and realtors busy, neither the stock of usable homes nor the number of people needing those homes necessarily changes. Some sellers may choose to become tenants, but each such decision creates a market for one more landlord-owned home, and inventory remains fundamentally unchanged.”

2. FUNDAMENTALS AND OTHER FACTORS

(a) SPECULATION HAS DISAPPEARED

“Speculation, the catalyst of a ‘bubble’, is largely absent from the market due to lingering fear from the lessons of 2008. A bubble will only materialize if overconfident developers and speculators manage to oversupply demand.”

(b) LEVERAGE IS NEGLIGIBLE

“Average mortgage leverage is a fraction of that in more perilous markets, notably overbuilt ‘bubble’ markets to the south.”

(c) INCOME LEVELS ARE NOT IMPORTANT

“Local real estate will likely be increasingly wealth driven, as opposed to income driven. Income sufficient to finance a home is of little concern to wealthy families that don’t need financing.”

(d) EMPLOYMENT WILL BE GENERATED BY SERVING EACH OTHER

“I’m often asked where we find jobs for all our new residents. When population grows, so does local demand for goods and services. Most Vancouverites, including grocers, plumbers, doctors and so on, make a living serving other Vancouverites. Exports and tourism are only pieces of our diversifying economy.”

(e) THE ECONOMY WILL BE STRONG

“It’s difficult to ignore the emerging importance of Canada’s immense resources, especially on a per capita basis, including fossil fuels, water, minerals and agriculture.”
“Only if our local economy suffers compared to other population centers, as it did in the 1990s relative to Eastern Canada, are we likely to see our growth curve flatten.”

(f) INTEREST RATE RISES WON’T MATTER

“Because of tightening inventory, any foreseeable interest rate increases are more likely to dampen real estate sale volume than to dampen value.”

3. CONCLUSIONS

(a) DEMAND WILL ALWAYS OUTSTRIP SUPPLY

(see 1 (a)&(b) above) “Shrinking inventory will make real estate increasingly difficult to buy, with excess demand from the tightest localized markets overflowing into others.”

(b) FUNDAMENTALS AND OTHER FACTORS REALLY DON’T MATTER

(see 2 (a)-(f) above)

(c) PRICES WILL RISE

“Selling prices have been climbing and many buyers have found themselves chasing the market upward. Most values are back in the ballpark of their previous peaks of about two years ago.”
“More would-be sellers may decide to stay put for fear of getting left out of the market. Accordingly, resale volume may shrink but prices will rise.”

(d) DON’T WORRY

“For now, if you own Greater Vancouver Real Estate, relax and have a happy new year.”

Visual Anecdote: Artist Reece Terris’ “Another False Front”, and the Vancouver RE Bubble.

Artist Reece Terris has produced a very fine piece of art, ‘The Western Front Front – Another False Front’, for Western Front Exhibitions and the ‘Vancouver 2010 Cultural Olympiad‘.  The work subversively comments on the Vancouver RE Bubble, and wittily uses Construction as its medium. The artist has added a large parapet and cornice to the façade of the Western Front Gallery in Vancouver. Description and discussion of the work is reproduced and linked below. We respect the obvious fact that the piece is open to many different interpretations. Here are some initial associations: False Front. Appearance Over Substance. Superficial. Artifice. Insincere. Without Real Substance. Overextended. Exaggerated. Overreaching. Showy. Boastful. Advertised Wealth. Pride Without Foundation. Ambitious. Obvious. Conformist. Frontier. Boomtown. Wannabe. Temporary. Shoddy. Transitory. Veneer. Hollow.       Impressive!      Thank you, Reece Terris. -vreaa

This from vancouver2010.com, the official games website (screencapture: here) -

“The Western Front, one of Canada’s longest running artist-run arts centres, is located in Vancouver’s Mount Pleasant neighbourhood. In an architectural intervention, artist Reece Terris constructs a temporary false front on top of the centre’s already existing false front. This work is in keeping with the idea of architecture as an expression of perceived wealth and culture, and it emphasizes Vancouver’s long-running upswing in the real-estate market and subsequent boom economy.”

This from Reece Terris’ own site, reaceterris.com (sceencaptures: description & installation) -

“The Western Front Front, (Another False Front).

This work is under construction at the Western Front Gallery, Opens December 5, 2009.
The proposed work is an architectural intervention where an adaptation of the existing western false front (or commercial false front) is added to in order to emphasize Vancouver’s long running upswing in the real estate market and subsequent boom economy.
Historically, “the false front commercial building type is seen as a building of the urban pioneer west; a boomtown street lined with false front buildings created visual continuity and an urban atmosphere lending a grander, larger-than-life appearance to the primitive cabins. False fronts crowded together along business streets gave frontier camps a visual sense of security, reinforcing the logical notion of Main Street as a tangible link to civilization. The goal of the western false front design was to produce a building of visual quality that approximated the kinds of buildings being constructed in the more established cities”.
In keeping with the idea of architectural form as an expression of the perception of wealth and culture; I am proposing to construct a temporary false front on top of the already existing false front. The new false front will be one and a half times larger than the original false front and project out over the sidewalk at a slight angle.
Quote from: Dale Heckendorn, “New architectural styles / types added to the lexicon,” Historical & Architectural Survey Newsletter, October 2005 – number 10.”

This from Western Front Gallery at front.bc.ca -

“Western Front Exhibitions is pleased to present The Western Front Front – Another False Front by Vancouver-based artist Reece Terris. This public art project is commissioned by Western Front Exhibitions and presented with the Vancouver 2010 Cultural Olympiad.

The Western Front Front – Another False Front is an architectural intervention constructed on the exterior of the Western Front building. Terris’s addition consists of a new, larger façade, including parapet and cornice. Exaggerating its formal elements, the structure has been built at one-and-a-half times scale, and installed on top of the existing façade at a slight angle.

Historically, wooden false fronts were ornamental structures erected on the front of goldrush-era buildings to make hastily built boomtowns appear more impressive. This created the illusion of larger, more important buildings mimicking those built of cast iron or brick in more established cities. Symbolizing the pioneering Western town, the false front is both synonymous with the artificial display of wealth as well as the rapid boom-and-bust expansions of early mining, railroad and forestry communities.

One of a handful of wood-frame buildings still standing in Vancouver with a false front, the Western Front was constructed in the early 1900s as a lodge for the the Knights of Pythias, a fraternal order. In 1972, the building was purchased by a group of artists and converted into a live/work space. This affiliation grew into the Western Front Society, one of Canada’s longest-running artist-run centres.

Drawing from architectural history to contemporary discussions around façadism (the practice of demolishing a building while leaving its façade intact), Terris’ project juxtaposes bygone projections of culture and prosperity with references to the rapidly expanding economic cycles of modern-day Vancouver.”

—

Discussion of Reece Terris’ work at www.kostuikgallery.com.

The Province: “UBC frathouses evict students to cash in on Vancouver Olympics”

In bubble economies, the pursuit of profits distorts principles even more readily than under normal market conditions. -vreaa

This from an article in The Province, by John Bermingham, 30 Dec 2009 -

“More than 200 students at the University of British Columbia are being forced out of their rooms by their own fraternities — which have decided to cash in by renting out to 2010 Games visitors. … Five of the eight fraternities are working through a real-estate agency to market their rooms. … Psi Upsilon house manager Aaron Thomson refused to say how much the group is making from its rentals. He told The Vancouver Province the money would go toward a scholarship fund, to pay for repairs and maintenance work, and to top up the fraternity’s contingency fund. “We have this great opportunity where we can fix the house and get all this money,” Thomson said Wednesday. “It is, of course, difficult for most people to have to leave for a month.” Thomson said frat members didn’t have a choice in the matter and no vote was held, but he said the majority favoured the plan.”

“This is starting to worry me more than before, and this is the first time that I am considering unloading my purchase into next year’s spring bounce.”

In July 2008 Canada’s Finance Minister Jim Flaherty bumped up lending requirements, making it necessary for all property buyers to save, beg, borrow, or steal at least a 5% downpayment. Vancouver RE started a  descent that month that ran 15% before being halted by the free money made necessary by the fall 2008 stock market crash. Prices are now back to the July 2008 highs. Now Flaherty fears a nation-wide housing bubble, and is threatening to drop amortization periods to 25 years and raise downpayments (most likely to 10%). His announcement today is discussed in a Financial Post piece by Ian McGugan 21 Dec 2009. Global TV, in perhaps the most bearish BC RE piece it has ever aired, today (21 Dec 2009) talked of ‘bubbles’ and ‘speculators’ and printed clearly that ‘Tighter rules could shut down 25% of the market’. Whatever exactly ‘shut down’ means, it doesn’t sound good. Despite all this, it is remarkable how long it is taking for local Vancouverites to cotton on. Are all the speculators going to be trying to unload with perfect timing in the spring of 2010? After the Olympics, before the stricter mortgage requirements, before the HST, before the interest rate rises? If they do, the annual spring bounce could be a rout. -vreaa

This from rofina at RE Talks 21 Dec 2009 6:33 pm -

“This is starting to worry me more than before, and this is the first time that I am considering unloading my purchase into next year’s spring bounce.”

“The people I am talking to in the Downtown Vancouver Condo market are not panicked and looking to bailout. They are looking to sell after the Olympics in the Spring market.”

Can the market tell the difference between sellers who are “panicked and looking to bailout” and those who are “looking to sell after the Olympics in the Spring market”? Supply is supply. -vreaa

This from MikeStewartRealtor (realtor) at RE Talks 21 Dec 2009 10:37 am -

“I met with a prospective seller a few days back. We were talking about what will happen after the Olympics and she asked me if there are lots speculators hanging on by the skin of their teeth looking to flip after the Olympics. And my answer was “No”. The people I am talking to in the Downtown Vancouver Condo market are not panicked and looking to bailout. The people I am talking to are looking to sell after the Olympics in the Spring market, which tends to be a good time of year to sell real estate. Nothing out of the ordinary here.”

habs100 adds at 11:06 am – “I have a few friends who unloaded/are unloading their downtown condos right now. One actually sold his brand new condo a month ago… Barely broke even after all the expenses.”

$35K Olympic Rental – Hail Mary Pass? …or Excellent Prank?

Stories about Vancouver RE, and some around the 2010 Winter Olympics, at times get so bizarre that it can be challenging to differentiate fact from fiction. This ad on craigslist (vancouver > housing > apts/housing for rent) dated 7 Dec 2009 2:42 pm reads like any other homeowner making a Hail Mary pass for a big score from the Games, until you get to the last photo. This is probably just a good prank, but, in Vancouver, you never know. -vreaa

Here’s an excerpt -

$35,000 / 6br – Spacious Bright Hse by Olympic Venues (Vancouver Westside Central-Shaughnessy )

Furnished Character HOUSE  in Beautiful Safe and Centrally located Shaughnessy Neighborhood, double lot property has is trees and greenery surrounded Available NOW for the 2010 Olympics in Vancouver. Wealthy safe neighbourhood is one of the most picturesque in Vancouver and boasts shopping, movie theatres, library, banks restaurants a short walk away. Home is conveniently located 15 minutes between Olympic venues both downtown and at UBC Thunderbird stadium.

Update 12 Dec 2009 (hat-tip to garth at vancouvercondo.info)

Still from craigslist, this rental now available as a 3BR, for $15,000.

Now with an apparent  jaguar (the animal) climbing out of the fireplace, in addition to the previously-noted no-extra-charge corpse on the bed -

“No Brainer… or Madness?”

This from realtor Maggie Chandler’s blog 1 Dec 2009 (hat-tip to Starving Artist at vancouvercondo.info)-

“If memory serves me right, it’s been early 2007 since we’ve seen lineups for Vancouver condo pre-sales but that changed on Saturday as the investors lined up (in the rain) to take advantage of the low prices at The Mark, on Seymour and Pacific. Onni’s new building will be 41 storeys and prices started at $325,000. Given that completion will be 2013, it’s a no brainer that investors can only win as this is one of the final sites available in Yaletown and we assume prices will be higher in 2013 than they are now. Is this madness? Given the current economic conditions around the world, should Vancouver real estate be moving at such a pace? The problem is lack of supply and lots of International buyers – from what I have observed Mainland Chinese are all over West Side homes and luxury condos and the word is they’re here for a while. In my 28 year career I have never seen such a quick downturn or such a fast recovery. Some buyers are expecting a downturn after 2010 Olympics and some are expecting prices to continue to rise. We shall have to wait and see.”

Soft Rental Market Despite The Olympics – “We have just moved into a penthouse rental unit for $1400 per month… Our previous rent was $1800 per month for a smaller space, [with inferior views].”

More news of disappointment from owners planning to cash in on Olympic rentals, and of the high likelihood of a weak rental market in 2010.

This from blueskies at robchipman.net 30 Nov 2009 10:08 am -

“We have just moved into a penthouse rental unit for $1400 per month as a sublet until August 2010, with an option to renew for a further 2 years. The former tenant rented the unit and furnished it (not Ikea) and advertised it for rent as an Olympic suite asking $7K per month for min 3 months there were no takers and only  a few inquiries. When the tenant could not carry both the Olympic suite and her own suite in the same building she offered it to us for $2400 per month. We went directly to the landlady (a long term buy & holder) and offered $1400 (unfurnished) based on our good rep and solid financials. Our previous rent was $1800 per month for a smaller space with a larger deck on the fifth floor (alley views). Sitting here looking out at a 270 degree North view with a large balcony and 2 parking spots……. life is good! After the Olympics there will be a lot to choose from rental wise.”

“With the Olympics coming you’d think rent would remain flat or even increase and yet rent has dropped as much as 40% since last summer.”

This from No Money Down at vancouvercondo.info 29 Nov 2009 4:59 pm -

“Just got back from looking at rentals downtown. 438 Seymour, 2 bedroom and 2 bathroom $1500. Sub penthouse unit in 30 year old concrete hi rises,2 bed, 2 bath, 980 sq ft $1400. Palisades X3 asking $1900 for 900 sq ft, all would negotiate lower for a lease today. With the Olympics coming you’d think rent would remain flat or even increase and yet rent has dropped as much as 40% since last summer.”

“I’ve lived in Vancouver most of my life (>50 years) and what’s going on here is completely irrational.”

This from West Coast Woman at greaterfool.ca 30 Nov 2009 12:07 am -

“I’ve lived in Vancouver most of my life (>50 years) and what’s going on here is completely irrational. The various levels of government hyping that the Owe-limpics are going to bring in all these new people, and people are buying into it and paying ridiculous prices for housing. The house across the street was last purchased 2001/2002 for $445,000, and sold last month for $1,588,000. This house had been nicely renovated with a basement suite added. The house two down from me sold two months ago for $1,560,000 and is now back on the market for $1,888,000. Nothing has been done to it in the interim. The house around the corner was bought for $998,000 at the beginning of this year and just sold for $1,790,000! This house was updated (a bit) and had a bachelor basement suite. In 2001/2002 a well-maintained house in this neighbourhood cost about $500,000. The current price for a knock-down in this neighbourhood is now $1,500,0000+, with new houses selling for $3,200,000 to 3,500,000. These are on lots approximately 50′ x 120′. Have people gone insane just because interest rates are low? Do they really think that people are going to move here because Vancouver looks pretty on the TV?”

“Vancouver is back in boom times… Unlike anything in the world… The speculation is that prices will go up after the Olympics”

Speculators continue to bet on rising Vancouver RE prices, and some still appear to be anticipating that the effect of the Olympics is not yet priced into the market.

Here are extracts from a report by Sam Cooper in The Province 29 Nov 2009 -

“The buzz is back. In scenes rarely seen since the Vancouver real-estate market peaked in early 2008, a horde of hungry investors lined up for hours in a downpour Saturday [28 Nov 2009] to get first dibs on pre-sale condo units in a tower to be erected in Yaletown. Cam Good, who is heading up marketing for “The Mark” by Onni, said some investors even slept outside Friday night to ensure prime line-up positions. “We’re blown away by the turnout,” Good said from inside the downtown pre-sale centre as about 50 investors scrambled around a model of the building.”

“While the global debt and credit crisis continues to haunt developments in former real-estate hotspots like Dubai in the United Arab Emirates, Good said Vancouver is back in boom times.”The [real-estate] strength in Vancouver is unlike anything in the world,” Good said.”

“Mayur Arora, who told The Province he hoped to land a top-floor unit, and his realtor K.D. Dhaliwal, said location and scarcity make the site an attractive investment. “I’m here because they are selling Yaletown at today’s prices, but the speculation is [that] prices will go up after the Olympics,” Arora said.  Steve Dhana was amazed by speculator interest as he watched investors rushing to place bids on units. “The prices went up $50,000 last night,” Dhana said. He hoped to buy a unit in the $500,000 price-range, and also expected prices to surge in February 2010.”

“Whistler bankrupted a very good friend of mine. He got in 4 years ago on the Olympics hype but it was all a mirage.”

Whistler is Vancouver’s premier ‘cottage country’. You’d be excused for guessing that, as Vancouver boomed, Whistler would have moved in lock-step. This has not been the case, with the luxury market there moving down for years. This has affected a subgroup of Vancouver RE investors. These two posts at RE Talks on 25 Nov 2009 -

kevind (5:43 am) – “I have several friends and associates that got hammered and are still stuck in Whistler and can’t get their properties sold. One guy has had his place for sale for 5 years and has had only one offer in all that time for 1 million under his build cost and he just keeps dropping the price. He’s also lost most of his hair from the stress. I know of another place that went on the market new in 2005 for just under 3 million and last time I looked it had dropped to the 1.8 range and still for sale. The build and land cost him more than 1.8. A round of drinks one evening last season at the Longhorn and I hear this guy over at the next table make the comment something like “Christ, I feel like I could put my place up for 1 buck and no one would call”. Another friend I know just wishes his place would magically burn to the ground because the insurance replacement build value is 1.5 million more than he can hope to get for it today if he’s lucky and he would still own the land. I could go on and on.”

Greenhorn (8:50 am) – “Whistler bankrupted a very good friend of mine. He got in 4 years ago on the Olympics hype but it was all a mirage. Once his property was underwater, he gave it back to the bank and got sued for the deficit. Just going through bankruptcy now. Luckily other assets like his home were in his wifes name and she has credit still or he would be on the street. They both have jobs and income right now, but the deficit to the bank was too huge to recover from. Bankruptcy was the only choice. I went to many parties in his house in Whistler. It was beautiful. Towards the end, he had a tenant who operated the property as a type of hostel/hotel. The tenant was always late on rent payments though he was making money and getting paid every month. There are a lot of scammers up there.”

Olympic Rental Oversupply

This exchange regarding Olympic renting at RE Talks, from 20 Nov 2009 11:46 -

nico101 – “I have a house near Commercial Drive which is losing it’s tenants for the upper 2 floors on Dec 1st. I still have the basement suite tenants though. Given the timing I’m considering the whole Olympic rental thing.”

Agitprop – “My sister has had her place with a jaw dropping view in West Van, listed for a month or two….nada. The market is WAY oversupplied.”

The Globe and Mail – “In Vancouver, House Prices On A Tear”

In parts of Vancouver, such as the Vancouver Eastside, the market has reached fever pitch.  This article in the Globe and Mail by Kerry Gold, 19 Nov 2009 6:03 pm, has so many important anecdotal points regarding sentiment and market activity that vreaa has archived large swatches in this post, and highlighted two stories from it in the posts above.

“In the last three months, a heritage house at 274 E. 20th Ave. was listed for $959,000 and sold for $320,000 above asking, after eight days on the market. A heritage fixer-upper at 265 E. 24th was listed for $749,000 and sold for $1,033,000 within a mere 13 days. A month later, another house nearby at 214 E. 24th, was listed for $749,000 and sold for $950,000 within six days. A typical Vancouver Special at 4554 Walden St. was listed for $730,000 and sold eight days later for $958,000. All those houses were in the trendy Main Street area.”

“It’s very topical,” says realtor Rod MacKay. “Other places [in the country] are strong, but nobody’s seen anything like this. What’s really surprising is nobody anticipated the six-month dry spell being as slow as it was, and prices coming up as much. No one anticipated it bouncing back so far and so quickly.”

“At the beginning of this spring’s buying frenzy, buyers were offering $100,000 above asking in some cases. But by September and October, there were buyers – no doubt tired of being repeatedly out-bid – who are making offers so far above the asking price they couldn’t lose. In the case of the house at 265 E. 24th, it went for $284,000 above asking. “That takes a lot of stones to do that,” says the selling agent Darryl Sjerven. “There were 18 offers on that house. So you go in there, write an offer, and there are 17 other offers and you don’t know what any of them are. They could all be just $10,000 over asking. To go and write $284,000 over takes a lot of guts.”

To describe the bidding mentality these last few months, Mr. Sjerven uses the analogy of a “hang loose” hand gesture – with the three middle fingers curled under and pinkie and thumb sticking out.“Say you get five offers on a house, and suppose the house is listed at $750,000. The guy with the pinkie does not get it, he doesn’t know what’s going on,” says Mr. Sjerven. “Even though there are four other offers, he’ll offer you $700,000 subject to sale of his home and if he gets financing and everything. Then you get the typical pack in the middle, they’ll go around $785,000, or something like that. There’ll be a cluster of those people. Then there’s the thumb. It sticks right over the side and says, ‘this is my house. I want this house.’ He’s far enough ahead that it doesn’t get into further bidding or anything like that. And he buys that house.”

A few months ago, it seemed like the only houses being sold in bidding wars were the “hot properties,” the ones with three bedrooms up, new granite counter tops, and a gleaming in-law suite downstairs. More recently, the bidding wars have been over houses that aren’t so hot, such as that Vancouver Special that went for above asking.“The house wasn’t renovated or anything,” says selling agent Kenny Wong. “It was 37 years old. It had the original “shagadelic” carpets. It was on a 33-by-110 lot. It wasn’t even a standard lot. “I had a hard time selling a Vancouver Special in the winter – a lot of people made low-ball offers,” he adds. “Now they are going over asking.”

Although overall prices aren’t quite at pre-correction levels, for buyers it has felt like the spring of 2008 again.

As to where the market will be in early 2010, the current frenzy appears to be abating and realtors like Mr. Sjerven expect the lull to last over the winter and through to the end of the Olympics. Not many people like to list or buy homes around the holiday season, and few are going to want to sell around the time of the Games, when it could be hard to get around. That five-month lull will create “pent-up demand” that will trigger another frenzy, says Mr. Sjerven. “Once you clear the Olympics out of the way and we’re into April, it will be a race to those listings. Spring is going to rock.”

“They were beginning to get freaked out by the prospect of losing their jobs while trying to pay their mortgages.”

This from logic at vancouvercondo.info 16 Nov 2009 3:53 pm -

“I was sitting in the Starbucks on the corner of Denman and Davie this morning, doing a bit of work and listening to a group of 4 construction tradesmen at the table behind me talking about all the layoffs in the places they work, and stating that they were beginning to get “freaked out” by the prospect of losing their jobs while trying to pay their mortgages. They were most worried by the fact that it’s not just the new hires being let go, but also people with “seniority”. I felt sorry for them, as they genuinely sounded worried, and seemed like nice enough guys.”

 

Visual Anecdote – ‘Real Estate Lift-Off’ Cover of the Georgia Straight

Would you get onboard this rocket? Heading into orbit, or destined to end as a giant fireball? This is a Classic ‘Top-Of-The-Bubble’ Cover -vreaa

The Nov 12-19, 2009 Georgia Straight Cover, a free publication available on the streets of Vancouver.

See extracts and comments on article HERE.

“On Halloween we got less than 25% of the historical number of children at our door Trick or Treating.”

vreaa was not the only one to notice the dearth of trick-or-treaters this year. This from TheOrra at thetyee.ca, commenting on an article on reduced projections regarding the economic benefits of the 2010 Olympic Games, by Andrew MacLeod, 3 Nov 2009 -

“On Halloween we got less than 25% of the historical number of children at our door Trick or Treating. Was it H1N1, the economy, or just a change in attitude towards candy, who knows? But the Olympics (as a symbolic Halloween) are likely to experience the same low numbers for the same reasons: fear of the pandemic, not enough money to pay for the trip, or just a pervasive rancor over the spending on junk, rather than on economic meat and potatoes.”

“There was that big buzz about people renting out their homes and making a killing on it”

This from the CBC Tuesday November 3, 2009 3:49 pm -

“There was that big buzz about people renting out their homes and making a killing on it,” said Vancouver resident Tanya Peters. Peters and Tyler Jones planned to get married in Costa Rica during the Games. Their vision was to rent out their house to Olympic visitors to help pay for the wedding. But so far, they have no takers, and now regret not hopping on the gravy train earlier. “I know several people who rented out and did make a lot of money but they rented out a year ago,” Peters said. It appears the Olympic rental market has slowed to a crawl. Jones and Peters have had their home listed on various websites since July. They have dropped their price to $3,000 for two weeks from $5,000.”

Anecdotes From The Future – VANOC Knows How You’ll Feel Tomorrow

Okay, this may not be ENTIRELY relevant to Vancouver RE, but anybody who has been following the market will know how important the idea of the 2010 Winter Olympics have become regarding market sentiment and discussion. So perhaps you’ll forgive this somewhat extraordinary post. It does, however, deal with an issue that is of interest to archivists, namely the writing of ‘history’ via before-the-fact press releases. Ron Judd’s ‘Olympic Insider’ column at The Seattle Times, dated October 30, 2009 at 10:45 AM, reveals that VANOC distributed a lengthy press on the evening of October 29, 2009, that contained more detail than one would expect regarding an event that hadn’t yet happened. It was clearly set up for lazy newspeople to paste and cut and quote verbatim.

Here are some of the things VANOC predicted would happen the day after -

“A ceremonial party of First Nations chiefs paddled across the waters of Victoria’s Inner Harbour this morning towards the public welcoming ceremony cradling the flame from the dramatic jutting bow of a traditional canoe.”

“On shore, onlookers waved Canadian flags as they lined the harbourfront and sweeping green lawns of the British Columbia Parliament Buildings craning for their first look at the flame.” [I like the 'craning' bit - ed.]

“What a magical moment,” said John Furlong, VANOC’s Chief Executive Officer.”

“The Canadian prime minister and British Columbia Premier Gordon Campbell were among the dignitaries on hand for the flame’s arrival celebrated with a 50-member honour guard and a flyby of four CF-18 jets from the 409 Tactical Fighter Squadron streaking overhead in a classic box formation. The same jets soared overhead at approximately 10:40 am as VANOC revealed the identity of XXX as the first torchbearer to carry the flame in the Vancouver 2010 Olympic Torch Relay, presented by Coca-Cola and RBC and supported by the Government of Canada. As the audience cheered, he/she ran through the crowd proudly carrying the curved metre-long winter white torch, officially starting the 106-day relay’s 45,000-kilometre journey across Canada.”

It all makes it tempting to ask VANOC how we’ll all feel next year. And if they’ll please reveal what they know of where the RE market is heading.

“One of her customers owns 45 condo units that will house journalists covering the Games”

And after the Olympics, who will these condos house? This passing snippet of an anecdote from an article in the Georgia Straight, October 29, 2009, by Carlito Pablo , regarding a laundry service in downtown Vancouver that fears business will suffer from the Olympics -

“One of her customers owns 45 condo units that will house journalists covering the Games.”