Monthly Archives: February 2009

“The 493K will not happen in my lifetime” – “Nobody wants them yet they will still sell for minimum 500K.”

Some are frantically calling the bottom in the Vancouver RE market, in word or in deed. This from eyesthebye on 2009 Feb Wed 25, 6:05pm & 10:21pm who seems to believe that the market can’t possibly deteriorate further from here -

“He’s saying the price of a single detached in Vancouver should be 493,000? I just bought a place – a character 1 and half story at over 600K and I had to line up for it – in fact, every decent home I looked at was sold in the first week for high 500′s to 700K. I’ve even see substandard locations sell for 500K in the first day offered. If you’re in the market for a single detached expect to pay 600K for a decent place. The 493K will not happen in my lifetime.”

“Buying a decent house in Vancouver for under 500K is a pipe dream. Trust me, I’ve just been through it – searched for a HOUSE for six months and every time there was a decent 1.5 or 2 storey character house for under 700K it was gone. Go look for yourselves – mls is littered with Vancouver specials and bungalows – nobody wants them yet they will still sell for minimum 500K. Anyone who doesn’t believe this can continue to live in their rented apartment or owned condo”

UPDATE: The above poster later revealed “I have a construction trade too…this is not a secret.” (RE Talks 11 Dec 2009 4:31 pm)

“I’m 79 years young … I should have known better with all these years of experience.”

This is a second anecdote from the article by Kerry Gold in the  Globe and Mail, February 19, 2009 -

“Lou Skoda and his wife Donna purchased their two-bedroom Port Moody apartment in Onni’s Aria 2 building in September, 2007, for $456,000.

However, a year later, when they tried to sell their smaller condo unit to finance the purchase, the market had collapsed. Mr. Skoda, 79, a retired cartographer, lives on a fixed income and couldn’t obtain a mortgage to finance the Onni condo. He attempted to renegotiate with the developer, he says, but was turned down. By January, he learned that his new condo would be sold for 25-per-cent less as part of a liquidation sale of 375 units. Mr. Skoda offered to buy the condo for the reduced price, but was offered a 6-per-cent discount instead. Onni is now suing Mr. Skoda for backing out of the deal, which means the Skodas could lose their $68,350 deposit and be stuck for damages such as the loss in property value.

“We bought at the height of the real-estate-market wave and we were trying to sell when the real estate went through the floor kind of thing,” says Mr. Skoda. “We definitely didn’t see this coming, so we signed on the dotted line. Of course, we made a decision without consulting with a lawyer, which my lawyer now tells me was a dumb thing to do, and I agree.

“I’m 79 years young … I should have known better with all these years of experience.”

“The market changed so quickly, no one could anticipate it.”

This from an article by Kerry Gold in the  Globe and Mail, February 19, 2009 -

“Computer programmer Riaz Kassam purchased a two-level penthouse in the trendy Yaletown district of downtown Vancouver last June for $1.5-million, with a down payment of $80,000. Compared to comparable units, the H + H unit should have been priced at $1.6-million, so Mr. Kassam thought he was getting a bargain. By the time the condo was completed earlier this year, Mr. Kassam was shocked to see it appraised at $1.2-million. In order to close the deal, he says his bank requires that he pay a bigger down payment of 25 per cent. However, his current condo has also dropped by more than $170,000 in value, which has made that impossible. Mr. Kassam says the developer is now threatening to sue.

“We even asked our broker to get third-party funding for us, with 10 or 12-per-cent interest – but no one is willing to do that because they need equity,” he says. “The market changed so quickly, no one could anticipate it.”

“The cycle will come back but I don’t want to wait until it gets better.”

Lynn Harrison has lost her job twice now in the boom-bust home building industry. This time, she’s getting out for good. The former marketing manager at British Columbia’s Vesta Properties Ltd. was laid off as the slump in the residential construction sector took hold late last year. She lost a job the first time during the 2000-2001 downturn, and now she’s looking for a senior marketing position in a completely different industry. “The cycle will come back but I don’t want to wait until it gets better,” said Ms. Harrison, who was laid off in December at Vesta, which is based in the Vancouver suburb of Langley. “No one wants to build a bunch of homes no one wants to buy. There are just times when you have to cut people.” Ms. Harrison was part one of the greatest job creation booms that drove employment in the sector to 1.2 million from about 800,000 at the beginning of the decade. And now she’s among those leaving as construction plummets.”

“Damn Those Pumpers!”

Regrets from Waitingtobuy99 at RETalks on 2009 Feb Tue 17, 11:23 am -

“We (young business professionals) bought in 06 and thought oh, it’s never coming down; we sold our 700sq/ft condo and lost a lot of our down payment. Damn those pumpers! It’s not the older generation who are getting screwed here, its the first time home buyers in the past 2-3 years. They (pumpers) should be on trial for some kind of conspiracy.”

“That’s GOTTA’ hurt.”

Report on a telling sale from thinktom at RETalks 2009 Feb Mon 16, 2:20 pm -

“Unit 2701 at 1455 Howe. Purchased Feb 1, 08 for $1m even. Just sold for…. $725k. That’s GOTTA’ hurt.”

“I guess paying close to a half a million bucks for 720 square foot condo doesn’t seem like such a great “investment” now.”

Are we already back to 2005 price levels for some Vancouver RE? This from meeeeeep on RETalks on 2009 Feb Sun 15, 6:36 pm -

“1201-1005 Beach Avenue (the Alvar) just sold for $375K after 28 DOM. In 2005, the going price was $350K for the same unit on a lower floor. 501 sold for $345K in Oct. 2005 and 601 sold for $352K in Dec. 2005. In May 2007 one of these units (1601) sold for $438K. Considering current interest rates, it is astonishing how fast the price has fallen. I guess paying close to a half a million bucks for 720 square foot condo doesn’t seem like such a great “investment” now.”

“I look forward to selling real estate in a market where I can more easily see value for the dollar.”

Respected North Shore realtor Paul Boenisch has decided to move from Vancouver to PEI for reasons of affordability and consequent improved lifestyle. This extracted from his blog, Wednesday February 11, 2009 -

“My wife Sandra and I have made the decision to move our 1.5 (one on the way) kids to Charlottetown, PE. Why? We initially were interested in Charlottetown because we have some family there, and after researching it and visiting PEI, the vastly improved quality of life is what convinced us. Sandra and I want to have the time to be very involved in the lives of our children, and PEI is affordable as well as being beautiful.” -
“I look forward to selling real estate in a market where I can more easily see value for the dollar. Selling first-time home buyers into a 200k house will feel good compared to the recent speculative mania that has infested BC real estate. And when you toss in beautiful beaches and the best golf in Canada it all made a tough decision a little easier.”

comparison

“The Other 30 are Completely, Utterly and Totally Empty.”

The rental market is not as tight as many would have one believe. This from vomitingdog at Rob Chipmans blog 05.Feb.2009 at 1:04pm -

“I am renting in a 12 story Vancouver tower in the South Granville neighbourhood. Of the 40 brand-spanking new units in this building exactly 10 of them are rented. The other 30 are completely, utterly and totally empty with craigslist ads posted several times a day to try to fill them up. And the craigslist ads have been running for 5 months now. If you said that they are over-priced and the landlord is not open to actual market values, I would be hard-pressed to disagree. But it seems to me that landlords, even of big rental buildings, have drunk from the same kool-aid as owners. Anyone who says that the rental market is tight must be referring to bachelor’s and 1-bedrooms at the lower end of the market. But even those are now widely available and sitting empty for 1-3 months in beautiful old heritage walk-ups in this neighbourhood when they never were as available before.”

“Would You Like A Mortgage With Those Fries?”

grantness at RETalks Thu Feb 05, 2009 4:44 pm writes -

“A year ago we faced a staffing crunch in my restaurant. But since December, we’ve had several realtors applying to be waitresses.”

A Drove Of Price Drops

A thread on REtalks started on Saturday 31st January 2009, resulted in a series of anecdotes about price drops -

“Assessed: 1.42M; Orig list: 1.35M; Sold: 850k. This is not uncommon.” (Paulb quoted by freako). Update 01 Feb 2009 -> “Paul B missed the mark by $10K. I purchased the WV house for $840K with a $1,426,600 assessment. The market is collapsing regardless of pricepoint ($100K or a $1,000,000) and will continue to for likely the next 2-3 years, perhaps longer.” (westvanbuyer)

“I am not a realtor but there was a house on Capital Hill my wife and I were looking at. Beautiful home, quality built. A year ago it was listed for $1.15M and an offer was made (according to the realtor) for full asking but the sellers got cold feet. Fast forward a year. House sold after being on the market for a second time. Was listed at $1.05M but sold for $860K.” (poundcruncher)

“Buddy builds homes in Point Grey. Last year he was buying 33′ ft lots for $1.1M. One sold two weeks ago for $823 (w/ view of d/t). ” (poundcruncher)

“Ambleside home. sold 1.57M March 08; sold 1M Jan 09.” (Paulb)

“Sales at significantly below list are becoming common place now. A house three blocks down from me just sold for $1m below assessment. The listing agent said the sellers were very pleased with the sale price, given the state of the market.” (kingroland)

Some suggested that these anecdotes exaggerate declines, citing possible lesser drops as evidence:

“My Abbotsford townhouse, confirmed by to recent sales in Dec and Jan is worth 300-310k. Last May it would have sold for 330k” (pianoexcellence quoted by Thompson)

“It consists with what I observed, such as the highrize buildings in Lougheed Mall where is worth about 250K now, down from 280k since last May.” (Thompson)

vreaa would appreciate the posting of any first hand anecdotes of 2008 versus 2009 sales price changes in the comments section below.