Tag Archives: Bears

“I have been contacted by two of my realtor friends in the past week both proclaiming that the market is turning and that this is a good time to buy.”

“I have been contacted by two of my realtor friends in the past week both proclaiming that the market is turning and that this is a good time to buy. One of them even mentioned that interest rates will be rising this Friday. When they tell me this I argue that they should look at the ten year average. Sales are still around 20% lower than the ten year average and this is with major banks advertising mortgate rates under 3%. If you compare stats between spring 2012 and 2013 it is like comparing chicken manure and cow manure. Yes cow maure is better than chicken manure but it is still manure. One of them had the audacity to say: “You better get in now I bet you five years from now people will say that Spring 2013 was the real estate bottom.” Hearing this I had to refrain myself and asked him to google “Asset bubble graph”. Where we are now is called the “Return to ‘normal’ phase aka “bull trap”; and guess what comes after next? As a matter of fact the Vancouver real estate market is following the graph quite closely. Never bet against human nature. I may be wrong but I highly doubt it. I think we will know for sure by this time next year. Unlike most bulls I know, I am putting my money where my mouth is. I am not buying now even though I have a down payment ready and could afford the mortgage without straining myself. In terms of real estate it will be an interesting rest of the year.”
- Waiting to exhale at VCI 7 June 2013

“It was a chance conversation with a seasoned realtor that tipped me off to the whole bubble back in 2004.”

“It was a chance conversation with a seasoned realtor that tipped me off to the whole bubble back in 2004. When I met my wife she had just purchased a condo in Surrey for $135k. We moved into it and met a tough-as-nails older woman who had been a realtor for 30 years and lived in the building. She shared the history of the building with us. Units had originally sold for $170k but a leaky condo adventure had dropped the value down to $70k, many lost their homes but those that were left were holding out for the prices to return to $170k. I asked her how long that would take. She pondered it, referred back to her 30 years of experience and said. “Probably 10 years.”

Almost exactly one year later in mid 2005 she came to us to tell us she could get $160k for our unit if we wanted to sell and move to a larger unit. We took her up on it and bought a larger unit in the same building. We got an over ask offer of $164k and bought a bigger unit for $170k. A year later and I was now working in Burnaby, a crappy commute. The condo needed a new roof and we had an assessment of $5000 that we had to take HELOC to pay for. We got a call to check out a place in a co-op in Burnaby near my work. It was perfect for the family we wanted to start. When we returned from checking out the co-op there was a flyer under our door. Our friendly realtor had just sold a comparable unit to ours for $240k.

Our families told us we were nuts to sell and rent. I smelled a rat, this experienced realtor had predicted 10 years to appreciate from $135k to $170k. And two years later the value had skyrocketed to $240k. My sister explained that I didn’t understand because I didn’t have kids yet how important it was for us to have real estate holdings to leave them. I decided that when I did have kids, they would be better served having me home for the two hours I would have been commuting then having a condo in Surrey 50 years from now. We pulled the trigger, the realtor actually sold the place to the same people who had bought our previous unit and we are now renters in Burnaby.

I knew nothing about real estate when I met my wife, she had bought into the market with an inheritence and had a bit of trouble walking away from ownership. But strata drama had shown her that she didn’t really own much of anything, she couldn’t rent her place out, she couldn’t decorate the way she wanted, she could have the pets she wanted, it was really a lot like living in a co-op. Except your crazy neighbours are toying with a massive chunk of your equity when they make silly rules. (They tried to make the building a 55+ while we lived there).

But ultimately it was that chance conversation with the realtor when she genuinely predicted a slow, steady increase in value that paced with inflation that tipped me off to the anomaly that was this price increase. I watched it shoot up and I was not prepared to sit back and watch it drop back down, taking my windfall with it. My wife is glad we made the move too, now she tries in vain to explain to her friends and family that they are headed for financial ruin if they continue their real estate delusions. But we all know how that goes.”

- lexlimo at VREAA 27 Feb 2013 9:42am

Thanks for your story, and for all your other comments on the blog, lexlimo.
- vreaa

Bears Care, Too


“…the schadenfreuden stories on Vancouver Real Estate Anecdote Archive. Always good for a bitter laugh.”Bill Lee at francesbula.com 26 Nov 2012

“I never did give anybody hell. I just told the truth and they thought it was hell.” – Harry S. Truman

All the very best for the festive season to all readers, and wishing you all a fine, peaceful 2013.
Regular readers know that we foresee challenging times ahead for the Vancouver RE market. This opinion is not a wish, it is simply the result of an analysis of all the available evidence. And it is most definitely not to be confused with a desire for bad things to befall anyone in our community.
The speculative mania in housing (2003-2012) has been detrimental to Vancouver. It has misallocated human and financial capital, and distorted the economy of the city. It has inconvenienced many, and, unfortunately, in the end, it will have financially and psychologically hobbled a good number of citizens. This outcome is inevitable. Again, please don’t confuse this observation with a wish, it is simply part and parcel of a spec mania: a messy resolution has been ‘baked in’ since prices hit the afterburners in the mid 2000′s. When asset prices are artificially inflated by a chain of ever increasing debt-financed transactions, there will always be a large group left ‘holding the bag’ when it all runs out of oxygen.
There is, unfortunately, no other way things can resolve, and nothing that can be done to significantly ameliorate the bubble’s consequences. It is too late for that. The problem was letting it develop in the first place; and not allowing it to unwind earlier.
Anybody who is wishing for soft-landings, or hoping that some form of kindness will somehow allow for a resolution that involves no damage, needs to answer this question: Who do I expect to do the buying that will let everybody down gently? Who do I expect to step in now, borrow (or ‘donate’) large sums of money, and agree to purchase properties that are still woefully above their fundamental values? (and thus exposing themselves to very large losses ahead). Who do you suggest should be the sacrificial lambs?
Those wishing for fantasy bullish, Pollyanna-ish outcomes may be well-meaning, but they are simply ignorant of bubble market dynamics. You can’t simply call the game off and hope that everybody wins; it doesn’t work like that after years of ever-increasing over-extension.
All that said and done, we hope that readers fare as well as possible. All citizens, owners or not, will feel some of the economic effects of a RE downturn. Non-owners will suffer less direct personal impact, and there are a good number of owners who will survive the RE bear market with just a scratch or two. We are most concerned about modest net-worth households who have almost all of their savings in their homes; often with leverage. We know it is a painful fact that they can’t all get out ‘whole’, but we fear for them nonetheless. Particularly vulnerable are those close to retirement who are relying on the value of their homes for a comfortable future.
We hope that Vancouver can find a way to make the transition from overvalued market to a fairly, and sustainably, valued market with as little damage, and as peaceably, as possible. In fact, for us, the ‘peace’ bit is paramount. Economic stress puts groups at risk of highly-charged fractures, and we sincerely hope that as a large and diverse group we’ll be able to avoid scapegoating, in-fighting, and division.
So, to emphasize: Bears care, too. They may come across as grumpy and (per force) contrarian, but they care as much for family, friends, neighbours, and fellow citizens as anybody else. Sure, the occasional bearish commenter will express the opinion that they will gain pleasure from the losses of speculators, but this is far from the commonest position. The very few Vancouverites who have seen this speculative mania for what it is most commonly express genuine concerns about the potential consequences for themselves, their families, and their fellow citizens.
- vreaa

“I conceive that the great part of the miseries of mankind are brought upon them by false estimates they have made of the value of things.” – Benjamin Franklin

“I think you’ll need another sidebar category to capture the mounting “why do you hate families/wish misery on others?” accusations that are going to come in increasing numbers. Long time bulls – and new visitors to this site – may trot that one out more and more, accusing you and posters here of schadenfreude, hating home “owners”, etc. Even if it doesn’t happen here, mind-bending statements in this vein will increasingly pop up elsewhere and be worth collecting. May I humbly suggest a sidebar icon with a picture of Helen Lovejoy and the words “won’t someone PLEASE think of the children?!?” to link to the post you ultimately create addressing this topic?
Past even-handedness will matter little to desperate people who will misinterpret many sentiments expressed here. The archive will be useful to a subset of these people who are willing to be taught the historical mechanics driving this bubble.”

- paraphrasing of Royce McCutcheon at VREAA 17 Sep 2012 8:50am [We’ll call such a sidebar ‘Bears Care, Too’ -ed.]

Bears Invade Burnaby – “Drop your prices and we’ll play nice.”


Bear admiring a gorgeous, south-facing 42 x 122 foot lot in Burnaby


Thinks: “This formwork stinks.. the hell if I’d fork over $120K to this ‘landscaper’.”

“The Burnaby RCMP is warning the public and morning commuters about a bear sighting.
Officers say shortly before 8 a.m., a big black bear was spotted lumbering down Rosser Avenue at Willingdon Avenue.
Police have not had any reports of aggression or interaction between the bear and people.”

- from Vancouver Sun 13 Sep 2012 [hat-tip epte]

Bears aren’t violent so long as you don’t get in their way, and let them take what they want.
- vreaa

“I went for lunch today and I wasn’t scorned by my friends for being a bear. I can’t find anyone to argue with anymore. The harsh reality of a very long move down is sinking in.”

“I went for lunch today and I wasn’t scorned by my friends for being a bear.
The fun is over. I can’t find anyone to argue with anymore. The harsh reality of a very long move down is sinking in. I am sensing big time panic among a lot of people out there.
Truthfully I thought it was going to be fun but I think it is just going to be sad.”

- McLovin at VCI 30 Jun 2012 9:46pm

Yes, it is going to be a largely sad affair.
And definitely less fascinating than the mania itself.
- vreaa

A Vancouver RE Bear Unashamedly Anticipates Schadenfreude – “I do want this correction to happen. I don’t give a rat’s ass about the families who will lose their houses, or the investors that will lose their rental properties, or the carpenter who will lose his window framing job.”

“I’ve been renting for a while, I have no debt, bunch of money saved and invested in a pretty diversified portfolio, and I’m extremely happy with my current job. Could’ve bought, like many others did… I mean rented from the bank, but I didn’t. For some reason, as opposed to the grand majority, I’m still scared shitless of debt, I hate owing money, and just couldn’t wrap my head around the idea of being tied to a loan for 20+ years. It’s kinda hard to explain to the average Joe why Lucy the hair dresser lives in a 750K McMansion, while Mike Hunt the engineer “hasn’t been able” to do it. I do want this correction to happen. I don’t give a rat’s ass about the families who will lose their houses, or the investors that will lose their rental properties, or the carpenter who will lose his window framing job. Many relatives and close friends have done the 5/35 or 5/30 deal. They’re responsible adults who signed the dotted line and now have to live up with the consequences. Yes I’ll be affected too… but you know what… I don’t care. Higher taxes, zombie economy, unemployment, doom & gloom, financial crisis, ..whatever. At least I won’t have an underwater mortgage. Man that’s one scary thought. I’m ready. I got my shorts for when the tide recedes. Schadenfreude.”
- Mike Hunt at VREAA 6 Jun 2012 1:08am

Bear Exhausted By Tenacious Bullishness – “Over the long term real estate never goes down besides there is so much money coming over here.”

“Talking to a colleague. Her and her brother were looking at places in my neighborhood last night. He sold his place in the sticks and is now looking to move closer to the city. I asked her why doesn’t he just rent, “he feels that interest rates are going to rise and he wants to lock in a low rate.” Wouldn’t it better to sock away the money and wait for rates to rise, values to decrease and then buy, I asked. “Over the long term real estate never goes down besides there is so much money coming over here.”
The rent for my one bedroom is $1,550 and similar apartments are listed for $490k. meaning it would cost me almost $3,000 a month to own a comparable apt. — based on 5% down with a 5-year fixed at 4% with a 25 year amort.
I am so very, very tired of being wrong about Vancouver’s RE market. It appears that there is just no shortage of people who truly believe that we are running out land, that real estate always goes up and that everyone wants live here.”

- Manna from heaven, at VCI, 1 Jun 2012 11:19am

“What do you mean you were wrong? Average price is down 12% YOY. It sounds like you were right.
Bears have been wrong so long they can’t recognize when they are right!”

- WFT? at VCI 1 Jun 2012 12:15pm