“He bought in 2007 and was pretty much stretched to the limit to make the payments. He had an unexpected expense in 2008 and couldn’t afford it.”

This from davers at VREAA 17 Nov 2009 9:00 pm -

“I heard today from a co-worker that he just sold his Burnaby condo and is thrilled to have come out ahead. He bought in 2007 and was pretty much stretched to the limit to make the payments. He had an unexpected expense in 2008 (I didn’t ask what) and couldn’t afford it. By then the market was dropping and he didn’t want to sell at a loss, so he threw a renter in there and moved back in with his parents. He was lucky enough to have the market then rise and he made a small profit after all fees, and is now renting happily having learned a valuable lesson.”

265 E 24th Ave, Vancouver – Ask: $749K – 18 Offers – Sell: $1,033,000 – $284K (38%) above ask

The east side market is hot. Frothy-hot. This from the Globe and Mail 19 Nov 2009 6:03 pm -

265 East 24th Avenue, Vancouver

‘A heritage fixer-upper’

List price: $749,000

18 offers

Sold for $1,033,000 within 13 days

$284,000 above ask

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.”

“Why should I stay here and pay exorbitant RE prices when I can move to Oregon, make more money with my qualifications, enjoy a better climate, pay less taxes and buy a beautiful home for 500K?”

As markets reach extremes, more and more people become aware of the resultant disparities. Even though most of us prefer to stay put, the benefits of making a move start crossing thresholds that cause some people to take action. This from Peter Pan at greaterfool.ca on 21 Nov 2009 at 1:41 am -

“I’m looking to get the hell out of Vancouver and move to the US… Why should I stay here and pay exorbitant RE prices when I can move to Oregon, make more money with my qualifications, enjoy a better climate, pay less taxes and buy a beautiful home for 500K?”

“It’s Raincouver on the Wet Coast. Just admit it and get over it already.”

Clement weather is often used as an argument in support of higher Vancouver RE prices. This downpour of realism from betamax at greaterfool.ca 21 Nov 2009 2:04 am -

“I live in Van, and it rains often. This last 12 mths has been a dry exception, not the rule. I don’t mind the rain and prefer it to snow, but I don’t know why locals here pretend that it doesn’t rain often and get defensive when others point it out. Does the blind jingoistic patriotism really run that deep? Are we Vancouverites becoming as unthinkingly defensive of our little backwater as inbred hillbillies? It’s like the Emperor’s New Clothes and no one wants to admit the obvious: it’s Raincouver on the Wet Coast; just admit it and get over it already.”

“My wife, young daughter and I are quite content to rent a place for $1,450 a month that would easily list for $700,000 (and probably go into a bidding war to sell for more).”

This from Contrarian in Vancouver, on greaterfool.ca, 20 Nov 2009 11:54 am -

“I live in Vancouver. My wife, young daughter and I are quite content to rent a place for $1,450 a month that would easily list for $700,000 (and probably go into a bidding war to sell for more). Our landlord arranges for the lawn to be cut, landscaping taken care of, and immediately takes care of any repairs. Got to admit, he’s great…kinda makes me feel like I’ve got it too easy. We’ve got a couple hundred thousand sitting on the sidelines in safer investments earning a little interest (aside from our RRSPs which are very diversely invested, life insurance and no debt).  I’m a 40 year old investment advisor with a contrarian and value based philosophy. As I tell my older clients when recommending laddered GICs as part of their portfolio, it’s not just paying 3.35%, you’re getting 103.35% as you know you’ll get your money back. Can’t say that about many investments these days – especially real estate. Heck, the cap rate’s got to be close to that but the risk is huge (oh wait, I forgot real estate only goes up!! – Hasn’t anybody looked at a graph of real estate in Vancouver for the last 40 years?) Luckily for me most of my clients are much older and have no debt. Bad for them is that their kids (in their 50s) can’t say the same, and of course it gets downright worrisome when grandkids (who are in their 20s and 30s) situations are brought up.  Meanwhile the plan for my family is that we’ll keep socking away into our RRSPs, keep building our down payment and in a few years when the @#!$ is really hitting the fan, pick up a pretty nice place and pay it off in less than 10 years. (Hopefully the banks won’t have a problem accepting a 30-40% down payment then! lol).”

Audio anecdote: “Hey, would you like to kick yourself?”… “Today’s real estate market could be at rock bottom, and when markets hit bottom, the winners are buying.”

At this point in the real estate cycle, to be luring individuals who are “worrying about living paycheck to paycheck” into RE ‘investment’ could be seen to be imprudent.   Listeners to Vancouver Radio station ‘CKWX News 1130′ this week (16-20 Nov 2009) were exposed to this 60 second ad about once an hour. The meaty bits are italicized -

“Hey, would you like to kick yourself? That’s what you would be doing if you ignore this opportunity. Today’s real estate market could be at rock bottom, and when markets hit bottom, the winners are buying. Come to a free learn to be rich workshop and discover how to join the winners based on the teachings of Robert Kiyosaki, best selling author of ‘Rich Dad, Poor Dad’, the number #1 book on personal finance. Rich Dad’s learn-to-be-rich workshop is free and happening in the Vancouver area today through Friday. This totally free workshop will introduce you to tools and strategies that could create extra cash flow and free you from worrying about living paycheck to paycheck. Don’t kick yourself next year saying “Why didn’t I invest when I had the chance?” This is your chance. Register now online at richdad*******.com or call 800-399-****. Get a free gift for attending. Registration is free. Call now 800-399-****.”

“60% of the listed homes are over $1M when maybe 6% of the recent sales have been over $1M.”

This from Barbara Samson at robchipman.net 18 Nov 2009 1:45 pm -

“The tiny slice of market (Upper Lonsdale) that I follow is right now critically short of properties under $900,000, but glutted with properties over $1 mil. 60% of the listed homes are over $1 mil when maybe 6% of the sales since Sept 1 [2009] have been over $1 mil. Right now you could buy a crack house for $800,000 or spend 25% more for something really nice. And all the buyers are opting for the crack house?? This is not a balanced market and I can’t believe there are many who are spending their own money in it.”

Purp added the following 18 Nov 2009 8:37 pm -

“I’ve heard some anecdotal info that homes in the $800-900K range in the Main street corridor have also been selling with multiple offers, while more expensive properties close by on the West side are sitting longer.”

Asalvari adds 18 Nov 2009 10:45 pm -

“[I am seeing a similar effect] in Dunbar, Point Grey and Kitsilano. The most prolific selling realtors are moving from Dunbar and PG to Kitsilano townhomes.”

“I haven’t really been paying attention to fixed rates with variables so low.”

Are current buyers following the recent BOC guidance to be ‘prudent’? This admission from Vancouver Realtor MikeStewartRealtor at RE Talks 18 Nov 2009 10:21 pm, in response to a poster’s question about ‘best 5 year and variable rates’ currently available -

“The best variable I’ve seen is prime -0.1%. Haven’t really been paying attention to fixed rates with variables so low. I’d use a mortgage broker. Talk to a few to see who can get you exactly what you want.”

“I’m single and have a salary that is in the high five-figures, which puts me up in the top 20% of households in Vancouver, yet I can’t afford to purchase a SFH in East Vancouver.”

This from oneangryslav2 at vancouvercondo.info 18 Nov 2009 11:42 am -

“Please let us in on the secret. How is it that people can afford million dollar homes? I still don’t get it. I’m single and have a salary that is in the high five-figures, which puts me up in the top 20% of households in Vancouver, yet I can’t afford to purchase a SFH in East Vancouver.”

Krazy Kanuck & his Vancouver RE Kalkulations

As home prices inflate to stratospheric levels, the utility of the sale price of many homes would cause a percentage of owners to ‘cash in’ – sell, move/rent, and live comfortably on the proceeds. (As one owner planning on selling and leaving Vancouver told vreaa, “I’ll never have to work another winter”.) The flip side of this is that many potential buyers are now sitting on their hands, as they are aware of the utility of the money that they save by doing so. This position is expressed here by Krazy Kanuck at greaterfool.ca 17 Nov 2009 11:05 pm, who has the added advantage of “living temporarily” in Vancouver, which probably gives him useful perspective. -

“I’m living temporarily in Vancouver (the epicenter of delusion), and I can’t wrap my head around the fact that if someone gave me $1 million, I could either: 1) buy a house here…and not a great one, only a good one, OR 2) buy $1 million worth of dividend stock funds, rent the house, put food on the table, and probably run a car. (I’m assuming a 3.6% yield…or $3k a month….for doing NOTHING!!) And my friends call me Krazy.”

“My dreams of buying cheap real estate are over. I don’t need to own, and current buyers are far crazier than I would have *ever* expected.”

This from rp at vancouvercondo.info 17th Nov 2009 10:31 am -

“My dreams of buying cheap real estate are over. I don’t need to own, and current buyers are far crazier than I would have *ever* expected. We just witnessed a worldwide financial crisis – the biggest in 80 years – and they are lining up to mortgage their lives away for a dream. Casting themselves onto the rocks is more like how I see it, because I don’t see how this could possibly be over. I save enough money to provide decent financial security for my family and will continue to do so. I’m 30 years old. It would feel good to settle down, but instead I’m going to remain flexible about where I live and what job I take.”

“It is annoying to see almost all our friends have moved to their new houses recently. Our hearts sink every time we hear mainstream media telling us next year housing price will continue to go up.”

The real estate boom has shut out some prudent citizens who would, under more normal circumstances, be homeowners. Some feel despair, others great inconvenience. Some gain solace from local and national real estate blogs, in the following case, from Garth Turner’s greaterfool.ca. This post by ‘Mom Society’ at greaterfool.ca 16 Nov 2009 10:33 pm appears to be an update and elaboration from the same poster whose earlier thoughts are archived at VREAA 7 Nov 2009 -

“We desperately want to buy a place with a yard as we have an 18 months old son and he needs a place to play. Although our annual income is around $15,000 more than average, we still find we can not afford anything with a yard, even in Surrey. It is annoying to see almost all our friends have moved to their new houses recently. Our hearts sink every time we hear mainstream media telling us next year housing price will continue to go up. Actually we don’t care if your [Garth Turner's] prediction would be accurate, no one has crystal ball. At least your blog gives us hope in this raining winter, give us a hope to allow us still dream we may have a home with yard in the future. Thank you. If we are belonging to middle class or working class, I feel [we are not alone in] our sadness.”

“I just don’t get it… why the rent is so low, or why the sale price is so high?”

Gloria, at robchipman.net, on 16 Nov 2009, 9:27 am, discovers that Vancouver RE price to rent ratios make no sense. The unit that she describes has a price:rent ratio of 390, and that’s before any talk of maintenance fees (which would put the ratio well above 400).  These ratios would imply that, from a historical perspective, the sales price is over twice what it should be.

“Luxurious ‘O2′ on Davie / Denman St. has several units for sale, and one of them (2bdr/2bthr, 975 sq.ft)  is both for sale and for rent. The sale price is 975k, and the rent is $2500 per month.  I just don’t get it… why the rent is so low, or why the sale price is so high?”

“Yes, the interest rates will rise, but my salary will also increase. If I’m laid off, or my mortgage skyrockets, I’ll work my ass off to keep it all together.”

Vancouver RE currently demonstrates historically record high price-to-rent ratios. Despite this, very, very low interest rates continue to make buying look attractive, especially if one only considers monthly payments. This illustrative example from Beth (2009 Nov 13, 20:27) in the comments section of the 12 Nov 2009 ‘Vancouver RE market bounces back’ article in the Georgia Straight, by Charlie Smith -

“My rent was $975 a month for a crappy, 35 year old one bedroom that didn’t have insuite laundry or anything, and where the landlord would knock twice then enter my suite without advance notice for non-emergencies, once even while I was on the toilet. Now, my mortgage is the same for a 12 year old one bedroom with laundry, fireplace, dishwasher. This includes maintenance fee. And I can have a pet. And no landlord can come in because he feels like it. Yes, the interest rates will rise, but my salary will also increase. If I’m laid off, or my mortgage skyrockets, I’ll work my ass off to keep it all together. I am confident in my ability to make it work. Downpayment? Some people work two jobs and weekends for years and years and years to save up for one; others inherit it when a loved one passes away; others borrow money interest-free from family, and others have it handed to them by well-to-do parents who would rather their kids have a condo than live in a dump run by a slumlord. Do you blame them? It’s not really anyone’s business where a downpayment comes from. It’s not a crime to have a downpayment.”

“The real story is how many jobs in hi-tech did this real estate boom kill? How many startups never bothered?”

Home owners have experienced paper and emotional gains from rising RE prices, and the construction industry has obviously experienced a period of boom. What is less obvious is that, for many, real estate prices have made Vancouver a less attractive city in which to live and work. Business have left Vancouver, or avoided it in the first place. Recent job cuts have people talking about this effect -

This from other ted at vancouvercondo.info 9th Nov 2009 11:11 pm -

“Let’s face it Kodak Canada is what is left of Creo. The [major] job cuts were in 2002 and 2003. There is almost nothing left there now. I don’t think I know anyone left working there, maybe a few. It won’t make a difference. The real story is how many jobs in hi-tech did this real estate boom kill? How many startups never bothered? How many real jobs vanished or were never created? The damage is done. Seriously, crash or no crash I can’t see myself moving back to Vancouver.”

This from patriotzed at vancouvercondo.info 10th Nov 2009 4:49 am -

“I took a high-tech management program from SFU back in the late 80’s when it looked like Vancouver had a real future in high tech. Our focus companies were Glenayre and Creo. For a metro to be a growth centre for high tech, it must be attractive to professional families. Vancouver was in the 80’s and 90’s and that’s the major reason why capital and workers were attracted here for the many startups. Make the metro unattractive, and you kill high tech. Housing in Seattle is a good deal cheaper than in Vancouver, and it is and has always been a major high tech hub – why on earth would anyone locate here instead of there, except to employ a few peons who couldn’t get H1B’s? Inside Canada look at Ottawa, or Waterloo, which are even cheaper. If housing gets down to and stays at 80’s real prices, high tech may get going again, but it looks like we’ve slipped back 20 years or more.”

“We dare not dream to buy a home in Vancouver. We feel shame to be poor and working poor.”

This brief yet poignant personal story about the feeling of being left behind by this RE bubble. From ‘Mom in Vancouver’ at greaterfool.ca on Nov 07, 2009 at 1.48 am -

“We dare not dream to buy a home in Vancouver, actually we can not afford anything with a yard for a kid to play in, in Surrey, or Maple Ridge, although I worked for several years as a full time programmer. We feel shame to be poor and working poor.”

“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.”

Bizarre Reason For Becoming A Realtor #47- To Avoid Insulting Your Mother-In-Law

Perhaps this kind of family politics occurs regardless of market conditions. Or perhaps it is indicative of a market in which unusual behaviour of all sorts has become the norm. This dialogue in a series of posts on RE Talks, started by househunting on Thu Nov 05, 2009 8:55 pm -

househunting: “I am house hunting right now and it is not looking good. I am probably going to rent until more listing show up in the spring. Is it worth it to get my license to purchase my my home? What is the process and what is the cost? … I don’t have much faith in realtors, and would rather pay myself the commission.”

Lost Soul: “You do realize that having a Realtor is not a pre-requisite to buying a place, don’t you?”

househunting: “It is in my case. Got a realtor in the family that kinda have to use. Rather get my own license and do it myself.”

islandlandlord: “If he/she can’t do the job then I’d cut him loose and find someone who can. Maybe things are different in your family, but I wouldn’t hesitate to drop him.”

househunting: “I wish it were that easy. When it is your spouses immediate family it’s a little hard. Any info on how long it takes to get a license?”

Multiple Offer: “Since there is a realtor in the family, why not offer to split the commission with him/her and save the trouble?”

househunting: “Thanks for the response. It has nothing to do with the commission. If I could use another realtor I would. I just don’t want to have to deal with my current realtor (MIL [my mother-in-law]) and the only way is to be my own realtor without opening up a can of worms. I have many friends that are realtors that I could use, but that would cause a lot problems.”

“I keep trying to tell my wife that Vancouver is a city living on credit and home equity loans, the music will stop soon. She doesn’t buy it anymore.”

This account of RE related spousal discussion from DaMann at vancouvercondo.info Nov 6th, 2009 at 12:01 pm -

“I really don’t get this silliness. My wife says “I don’t care what anyone says, there is no recession in Vancouver”. All she comments about is the wealthy cars, and stupid prices of RE. I keep trying to tell her that Vancouver is a city living on credit and home equity loans, the music will stop soon. She doesn’t buy it anymore. She IS starting to believe it’s different here. Shit, so am I!!!??!?!? EVERYTHING is defying all logic and reason. Sure, I know people are buying places based on variable rates of 2% but even at that, I still can’t fathom how ( or why) people are buying and getting $700k mortgages on $100k household incomes. Man I can’t wait for rates to go up!”

“No, the market is not going to go down, these units will be worth more by the time they are finished”

Those selling real estate do not take a neutral position regarding market direction. This from joycer at vancouvercondo.info on Nov 6th, 2009 at 9:00 am -

“Went by Maple on 84 in Surrey last weekend…. Someone mentioned that they were considering the D plan, which was the most expensive. The realtor said that would hold the most value and appreciate the fastest with the market. When the parent of that person (first time buyer…) said it would also fall the fastest if the market came down again, the realtor quickly corrected them, and said “Oh, no, the market is not going to go down, these units will be worth more by the time they are finished”. If they are so confident, why the low prices?”

“The [Mortgage Broker] course was useless, boring and easy. Seriously, it’s a joke.”

A newly minted Mortgage Broker, Marco911, describes the course and the exam over a series of posts at RE Talks, starting on Mon Nov 02, 2009 10:09 pm -

“I just finished my [Mortgage Broker] course a few days ago. Three weeks of my life I will never get back. … There is only one official mortgage broker course, [in order] to become licensed, offered through UBC. It is very similar to the Real Estate course that Sauder offers. The requirements to write the exam, and the course itself, was beyond easy. This means the mortgage industry is not concerned about saturation, which makes me wonder what duty they serve to the existing mortgage broker community (the answer is inherent). … The course was useless, boring and easy. You need a 65 and I managed to get 98. Seriously, it’s a joke. … I am not going to do anything special with the course for a while. Once my house is finished and I’ve settled a few issues with some investments I’m going to start a business plan so that in 2 years I can run my own brokerage. We’ll see what happens.”

“Her partner seems to be doing well in therapy/personal growth work, but they sure can’t afford a house!”

So, who is buying? This from Ginger at greaterfool.ca on Nov 5 at 12:07 pm -

“I think the new-agish health industry is big (in Vancouver), my sister used to be a yoga teacher there, but after being away for a few years, was unable to get back into it because of saturation in the market. Her income from waitressing has gone down too. Her partner seems to be doing well in therapy/personal growth work, but they sure can’t afford a house! And these are 2 people with university degrees. I guess the beauty and climate make it worthwhile.”

Young, Patient, and Renting

These anecdotes from greaterfool.ca post of Nov 3rd 2009, and the ensuing comments -

This from Canucks Fan -

“I’m recently married in Vancouver, income around $85k and wife is looking for work, 29 years old with about $55k in RRSPs ($25k in a money market fund ready to use as a first time homebuyer), $25k in stock, and $65k in cash. No debt, paid for car, and renting for approximately $1200/month with the intent to buy as soon as fundamentals make sense.
… All of my friends have purchased in the past 5 years, many at 5/35, and while I’m happy to rent for as long as necessary (maybe look at a bigger place?) it would be nice to put some of the cash to use. I just feel like I’m spinning my wheels saving every month when the market goes up more than I can save. I’ve been able to keep the new wife satisfied with a honeymoon in Asia, new furniture, and the ability to stay at home while she looks for work. Once she finds something though I know her nesting instinct will kick in…”

This from Jim -

“I’m in a similar situation, 10 years older and have been waiting for over seven years, but property here seems to hold its value. … Even if rates go to 6 percent and the asset value goes down 10-15 % people will likely hang on. I don’t see how the market will correct substantially, except maybe for all of the cheap, small and poorly built condos.”

From Cyrus -

“I am in almost the exact same situation as Canucks Fan (except with about half as much saved). As the days go by, I become more and more comfortable with the idea of renting for the long term. It has been almost two years sans mortgage and with that, reduced stress. As a 26 year old, I believe my generation has grown up with the idea that the place you live in is also an investment. This idea will perhaps come back to bight some in the not so distant future.”

From taylor192 -

“I live in Kits and rent a 2bdrm for $1900. Its valued at ~$550K, which at 35/5 is $2300. Then add $300 condo fee and $300 in tax. I’m saving $1000 or 30% renting. If I was paying the mortgage I’d only be paying down the mortgage $600.”

“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.”

“The interest rate on their mortgage? Just 1.5 per cent.”

This from ‘Easy credit, soaring prices raise new housing fears’ by Tara Perkins, Kevin Carmichael and David Ebner, Globe and Mail Update, Friday, Oct. 30, 2009 7:52pm -

“Nick Burzese and his fiancée Di Pham recently realized the North American dream – they bought a house of their own. And the couple’s new home is not just anywhere. It’s in Vancouver, one of the country’s priciest markets. Having rented for years, the couple, who both work in the mortgage business, thought they’d never be able to afford a house in the city. They were doomed, they felt, to live in a distant suburb. As they house-hunted, they saw to their disappointment that the recession hadn’t dampened the market much. “Everywhere we went, there were so many people there,” says Mr. Burzese, 36, a broker at MPRO Mortgage Architects. Eventually, they came across an old 11/2-storey “character” home on a leafy street of detached houses near the Pacific National Exhibition grounds, on the city’s east side. “We immediately fell in love with it,” Mr. Burzese says. “It’s really an area that’s starting to transform.” Ms. Pham, 28, and Mr. Burzese put $57,000 down on the $570,000 house early this year. The couple says they’re comfortable with the debt. They make good money and are installing a basement apartment as a “mortgage helper.” But they might not have been able to get into the market were it not for the intervention of the Bank of Canada and the federal government – in the form of a continued low interest rates and federal policies aimed at maintaining the flow of lending and spending. The interest rate on their mortgage? Just 1.5 per cent.”

“Over 3 out of 4 open houses we’ve gone to in the past year have been vacant properties. Up until 2006 or so, the majority were occupied.”

This from Lost Soul at RE Talks on Tue Nov 03, 2009 8:39 am -

“Over 3 out of 4 open houses we’ve gone to in the past year have been vacant properties — I remember up until 2006 or so, the majority were occupied. Read into that what you will.”

“If you are thinking about making an offer on one of these homes, wait a while. Nothing is selling and I keep telling the developer to drop the prices.”

This from pianoexcellence at RE Talks on Mon Nov 02, 2009 6:57 pm -

“I was at an open house last week. The realtor said:

“If you are thinking about making an offer on one of these homes, wait a while. Nothing is selling and I keep telling the developer to drop the prices. If nobody buys in the next few weeks, I think I will be able to convince the developer to drop the prices dramatically!!”

I give him an “A” for full disclosure and an “F” for fiduciary duty. (unless this was a pre-planned spiel).”

“The market is hot all around… There are homes in the North Burnaby area with standard 33 ft lots selling for over a million dollars! “

This from DAB at RE Talks on Thu Oct 29, 2009 2:44pm -

“There are homes in the North Burnaby area with standard 33 ft lots selling for over a million dollars! And this is not just one home but several. The market is hot all around, even homes in the 700-850k range are selling within 2 weeks.”

“Who can afford to buy a nondescript house in the $1,000,000 plus range in Vancouver or the Okanagan? – And why would they?”

This from Roches Moutanee in the Comments section of a Globe & Mail ROB article dealing with the ‘great’ rural BC recreational property ‘bust’, Oct 30, 2009 -

“I now live in Ontario but grew up in BC and will soon move back for the last phase of my career and to be with family and friends. … This summer I was visiting my old neighbourhood in Richmond and went to an open house. It was 25 years old and in need of updating – a minimum of $100k. They were asking $1,130,000 (with a straight face). I live in a neighbourhood in the GTA where people have serious jobs – VP’s of major corporations. The homes are in the $500k – $700k range. Who can afford [to buy] a (nondescript) house in the $1,000,000 plus range in Vancouver or the Okanagan? – and why would they? The residential real estate industry in BC, and in particular Vancouver and the Okanagan, are simply ponzi schemes. Everyone is washing each other’s laundry and counting on people with surplus equity to move there and pay big money for homes. If people can’t sell their house in Toronto, Winnipeg, or Edmonton, etc. and purchase a house in the Okanagan for the same cost, or less, then where are the people going to come from? – and don’t count on international money, as even that has limits. My colleagues in BC say that the market is different this time around. I disagree, and can’t wait for the big correction which will take place some time next year and will persist for 4-5 years.”

People Making Money From RE – “Hooray for Real Estate!” & “I sold all three of my downtown investment properties over the past three months.”

This story came to VREAA as an e-mail from pianoexcellence, a poster on the RE Talks BC discussion board -

“I cashed out of my PR and my Squamish condo. I sold the Squamish condo in May 2008 and my PR in June 2009. I made a lot of money and am thankful for the role that RE has played in my life as I am only 28. I threw all my gains on the Squamish condo at the TSX in Jan 2009 and have made a killing (after momentarily crapping my pants during the crash in Feb). I am waiting to put the rest of my equity from my PR into div stocks but am looking for a suitable entry point. Until then, it sits in GIC’s. There…ho0ray real estate!!!”

And this from MultipleOffer, also at RE Talks, on Wed Oct 28, 2009 11:01 am -

“I have ["sold high" and made a huge return on (my) investment]… this market was too good not to sell into, particularly after coming through such troubling times. I sold all three of my downtown investment properties over the past three months. I am holding onto one small older rental unit that breaks even with a good 5-year rate on it. Whether this was the right move or not for the market remains to be seen, but it was the right move for me and my family. We no longer have a mortgage on our PR which we can live quite comfortably in for many years to come. I am saving for a future downpayment, but waiting for a buyer’s market before re-entry.” And later added – “Unlike [pianoexcellence] I held onto my principal residence and an investment property, so I still have some exposure to the market, which is good if it goes up, and not a bother at all if the market falls. Rental cashflows and PR is paid off, with $ in the bank to pay off the rental property mortgage if I ever needed to. A crash would just be seen as a buying opportunity for me.”

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