Monthly Archives: February 2010

Honest Realtor Shocks Local Couple – “Don’t even think about buying now, it’s the worst time ever.”’

This tale from Fool me once… at 27 Feb 2010 11:49 am

“A local realtor shocked my wife and I. We are renting in a very nice Burnaby neighbourhood and went to look at an open house close by. The realtor looked us straight in the eye and said to us on the way out “Don’t even think about buying now, its the worst time ever.” I must have looked confused because he said “Don’t worry, I’ll have multiple offers by tonight.” This veteran realtor earned my respect.”

“A local realtor passes and says: “Every time those cameras click real estate goes up $100”

Eric at 27 Feb 2010 bemoans the fact that fine weather for part of the Olympic Games may have given visitors an artificially rosy view of Vancouver –

“Instead of 4°C and raining sideways, we got the once-in-five-years treat of a sunny, warm February. I was really hoping for the rain, really and truly, because anything else was bound to add to the silliness that is Vancouver real estate. So, there I am watching a week of stunning sunrises from the Cambie bridge, surrounded by hundreds of visitors at 6am, who flocked up the span with cameras in hand. A local realtor passes and says: “Every time those cameras click real estate goes up $100″. Sigh. March Madness is around the corner. … And THEN the bloody cherry trees started blooming.”

“He rents, and has a half million dollars in cash ready for a down payment. If he buys he’ll end up with a mortgage the same size. So, if prices fall 20% in the next year, he’ll lose 40% of his equity – $200K wiped out.”

In a housing crash, or even a moderate correction, the many who have more than their entire net-worth in housing will be devastated by the leverage working against them. This story is of a wise man attempting to avoid that fate. -vreaa

This from Garth Turner at his blog 27 Feb 2010

“On the way from the Vancouver airport I stopped to have coffee with a guy who lives nearby. He rents, and has a half million dollars in cash ready for a down payment. But, he knows if he buys he’ll also end up with a mortgage the same size. So, given the magic of leverage, if prices fall 20% in the next year, he’ll lose 40% of his equity – two hundred large wiped out.”

“I recently went back to my first home in Mount Pleasant, when I had lived as an immigrant back in 1989. There has been a lot of changes to the neighborhood, and blocks where I don’t recognize where I am”

This response to Froogle Scott Chronicles Part 5 from space889 at 26 Feb 2010 10:52 am

“I had recently gone back to my first home in Mount Pleasant when I came as an immigrant back in 1989 and lived there for about 10 years. There has been a lot of changes to the neighborhood and blocks where I don’t recognize where I am. There have been large heritage style houses torn down and rebuilt as large townhouse complexes. However to me this is also progress. While people may be nostalgic about those cute character houses built pre-1930, or those cute charming wartime bungalows, the question I have is do they really think it’s a good idea to keep all those houses as they are, never renovate or rebuild them? I think we should preserve some heritage buildings but that doesn’t mean all new developments are bad. Some are, some aren’t. However to to me wishing things don’t change is even worse. Imagine for a minute, if Vancouver had somehow been frozen in time so that no existing house is torn down and no new big box houses were build in their palce since 1970. Every homeowner kept their houses in good condition without major renovations such the house is not recognizable. Do you really think that would make a better Vancouver than it is today? Is it really better to live in a 50 years well build and well maintained small house than to live in a well build new and likely larger building using all the advances we had in the last 50 year?”

Overstretched; Living In Debt… And We Haven’t Even Started To Crash Yet.

pricedoutfornow at 26 Feb 2010 9:43 am“I went to an Olympic event yesterday and happened to hear some people behind me talking. They were from Nova Scotia, the person said “We’re never going to do this again, so we’re spending like there’s no tomorrow, really racking up the credit card! But it’s a once in a lifetime opportunity, so why not?”

Vansanity at 26 Feb 2010 10:33 am – “I know tons of people doing exactly that! They’re partying hard and the common theme amongst them is that they’re not going to worry about what their credit card statement looks like until its all over! It should be interesting to see the debt figures come up a few months from now. Also, I know someone who recently bought a home and is now $700k (+) in debt. His family income is somewhere around $100-125k per year. Couple kids, $3,000-$4,000 per month on house costs. Financial stress, mental stress, physical stress… sounds like a great plan. I should mention that they both came close to losing their jobs sometime ago. I’m so happy I’m not living “house poor”. We’re planning our vacations for the year, looking at 4-6 weeks away, Europe, Hawaii and Jamaica, few trips to Vegas in between to maintain the tans. It’s really rough being a renter.”

“We’ve sold our Vancouver condo. We took a bit of a loss, but we’re moving into a rental for the next year or three, saving until we have enough for a mortgage worth no more than 3 times our annual income.”

This from smartalox at 26 Feb 2010 at 1:13 am

“We’ve sold our Vancouver condo, ahead of a big assessment. We took a bit of a loss, but we’re moving into a rental for the next year or three, saving until we have enough for a 20% down, 20 year mortgage, worth no more than 3 times our annual income.”

RE Advertising Saturation – “Where are the ads for all of the other businesses in the area? The only ones that can afford most of the advertising are in the real-estate business.”

RE ad saturation is indicative over overheated markets and bubble tops. This anecdote from Alberta could just as easily describe Vancouver. -vreaa

Here’s popeye the sailor man at 27 Feb 2010 1:33 pm

“Yesterday I went to the local Safeway in Spruce Grove [Alberta], and as I enter the lobby there are 6 Magazines in the free bins about real estate or home-renos. I grab my cart, and at the front of the cart an Ad for a local realtor, I look at other people’s carts and they all have the same ad from one realtor. I get to the check-out and the lady in front of me passes me a divider and on it is advertising for two new high end housing developments, I get past that and get my slip and in the back I see ads and again 2 of the three ads are for a realtor. On the way home now fully aware of advertising I pass 8 for sale signs and 4 bus benches with real-estate advertising 2 mortgage broker signs (2%VRM) and 5 billboards for new developments. Stopped and got my mail and there was 3 postcards for just listed homes in the area, hanging on my door is the Grove examiner which has 20% news, 40% real-estate, 20% car ads, and 20% other ads. Is it any wonder we are real-estate junkies. Where are the ads for all of the other businesses in the area? The only ones that can afford most of the advertising are in the real-estate business.”

Update: Vancouver IS the best place on earth; Everybody WILL want to move here: “The gods are on our side when it comes to real estate. The Vancouver boom is not over. It is just starting.”

Vancouver did indeed look glorious, on cue, for at least part of the Olympic fortnight. This causes the following reassertion of the theory that overwhelming demand will drive our RE prices forever upwards. These foreign buyers would have to be oblivious to pricing levels as defined by fundamentals, and they certainly wouldn’t want to be in need of local jobs to support their RE habits. -vreaa

Vancouver Rocks at 27 Feb 2010 1:32 pm

“The gods parted the skies and released unseen sunshine for 10 straight days rather than the usual rain and fog. And the cherry blossoms all came out. This despite the negative nellie bears that were wishing and hoping for terrible weather. Over a quarter million visitors were taken aback by the beauty, and many commented right on cue “Oh, everyone will want to move here.” Obviously, the gods are on our side when it comes to real estate. Looking forward to another 10% pop this Spring, which will make an increase of over 30% in the last year and a half. Hmmmmm….waiting for a 15% “correction” after a 30% increase took place is just a waste of time and rent….. The Vancouver boom is not over. It is just starting. All it will take is a couple of thousand visitors to buy, and the already low inventory will be eliminated. Sorry bears, but Vancouver will continue to go up and you will continue to be left behind…”

The Froogle Scott Chronicles: Mortgaging Our Souls In Paradise – Part 5: Raise or Raze

The apparent Vancouver RE ‘boom’ has been based on the spending of imagined wealth. This has involved individual and group self-deceit. As a society, we’ve pretended that local homes are worth twice what they were a handful of years ago, and acted as though they were worth well above twice their value as defined by usefulness. Banks, just as besotted by the game as the rest of us, have allowed some of us to borrow vast amounts of money and commit to ‘buying’ at these fairy-tale levels, and the rest of us have then acted as though these transactions are indicative of true values. Some owners, based on the consequent newly imagined values of their houses, have in turn borrowed money from the banks, and spent it. Sometimes on frivolous toys, but, at least as often, on renovations, or the construction or purchase of new properties. And thus the game has perpetuated itself. The spending both directly and indirectly attributable to this charade is likely ultimately immeasurable. It has been so vast as to allow our economy to seem to weather a devastating recession. But almost none of the imagined wealth or the consequent spending is the result of actual productive activity. It is all the result of the spending of very large amounts of borrowed money.  When the game ends, and when our shared understanding of the value of housing returns to levels closer to the historic norm, the debt accumulated through this process will remain. As Bob Dylan says: “Statues made of matchsticks crumble into one another.”
In his wonderful fifth episode, Froogle Scott shares with us his careful observations of the effects of the boom on the houses in his neighbourhood, and describes the process whereby “increasingly massive war chests of home equity” are used to renovate and construct. He coins the henceforth indispensable term ‘Boom Box’ to describe the utilitarian houses that have been built in Vancouver in recent years. He explores streets, houses, and memories. -vreaa

Part 5: Raise or Raze

Renovation and construction mania
I walk around our neighbourhood taking inventory: renovation, renovation, that house raised and a new foundation poured, that one with a second storey added, and there, a house demolished — razed with a “z” — and a new house built in its place. In the six and a half years that my wife and I have lived in the Grandview area of Vancouver, there have been a startling number of major renovations, and demolitions followed by new construction. Weekday mornings, on my ten-minute walk to the SkyTrain station at Commercial and Broadway, I pass through a two-and-a-half block stretch where one house is being raised, another across the street is demolished and a new house is being built, and around the corner two houses are being totally transformed by the addition of second storeys. It’s difficult to find a block that hasn’t had at least one major renovation or new house built in the last few years, and on a number of blocks there have been multiple projects. A renovation and construction mania has seized the neighbourhood, and it’s still ongoing.
An inventory
In February of 2010 I decide to do an inventory. My guidelines are simple. I walk all the blocks in the pocket between major streets where our house is located and count the number of major renovations and new houses that have completed since September of 2003, when we bought our house, or projects that are still ongoing. By major renovation I don’t mean new windows and doors, or a new paint job, or a new porch or new deck — and there are plenty of these more moderate renos in the neighbourhood, which I also count and include in a separate category. I mean houses completely gutted back to the studs, or exteriors completely stripped, or houses raised to allow a new full-height basement or ground level, or houses given a full second storey addition. Renovations that often render the original house unrecognizable. I also include obviously new, or newly renovated houses that probably were completed in the year or two before we bought. In other words, I’m doing a somewhat unscientific, anecdotal inventory of the effects of Vancouver’s eight-year real estate boom on one old, established East Side neighbourhood — a place typified for many years by hundred-year-old character houses, a number of them somewhat dilapidated, smaller, workers’ bungalows like the house that we bought, or Vancouver Specials, an earlier wave of replacement housing stock built from the mid 60s to the mid 80s.
The pre-boom neighbourhood
Here are two current photographs showing the housing stock that comprised close to one hundred percent of the neighbourhood pre-2002, the year the boom started. The first shot conveniently captures typical houses from four different eras of Vancouver residential architecture. From left to right: a hundred-year-old character house, a 1970s Vancouver Special, two 1950s stucco bungalows, and a 1920s or 1930s builder’s special, a stripped-down version of the Craftsman bungalow.

Four different eras of Vancouver residential architecture
….The second photograph neatly lines up houses from different periods of more recent Vancouver residential construction. On the left is a ‘late model’ Vancouver Special from perhaps the early or mid 1980s, when builders were dressing up the basic design with features like split roofs and upper storeys with offset sides, just before Vancouver City Hall put an end to the style’s proliferation. The other two houses you could call new-style Vancouver Specials, or monster houses (although I call them “mini monsters” because you can only get so big on a 33-foot lot), or the term I like best, from the general contractor who eventually completed our renovation: “builders’ boxes”. The house in the middle was probably built in the late 1980s, or early 1990s, when terracotta roof tiles, light yellow vinyl siding above a brick half-facade, and rows of narrow windows was a common look. The house on the right, although it looks similar to a number of houses built during the boom, was probably built in the mid 1990s. A clue that it pre-dates the boom by a few years is the colour — pink, which has now given way to beige as the one-colour-fits-all choice of discount spec builders — and the curved bay windows, with the stepped detailing beneath, which were common around 1994, if my research on RealtyLink is anything to go by. The trend over the past few years is boxed-out bay windows, with flat undersides that run straight back to the house wall.

Three eras of the Vancouver Special
The inventory results
Here are the results of my inventory. Over two days, I do a block-by-block count, take a few photos along the way, and quit when my feet get tired.
•    60 blocks (the pocket formed by Commercial Drive on the west, Nanaimo Street on the east, East 1st Avenue on the north, and East Broadway on the south)
•    130 new houses (prior demolitions assumed — or actually witnessed — although in a small number of cases a lot never before built on may have existed)
•    100 major renovations
•    78 minor renovations
•    An unknown number of ‘hidden renovations’ — all those shiny new kitchens and bathrooms, and mortgage-helping rental suites, that from the street give no indication of their presence (even when I try, unobtrusively, to look in people’s windows). I know of four major renos in the neighbourhood that fall into this category, and I record them, but undoubtedly many more occurred over the last eight years.
….I do the following calculation on adjusted figures: the total number of major renovations and new houses (204), divided by the number of blocks (51), divided by the duration so far of Vancouver’s real estate boom (8 years). I exclude partial blocks where I counted houses on the far sides of the main streets that form the boundaries of the pocket, and I adjust for double blocks (count 2), and blocks-and-a-half (count 1.5). The result is an average of 0.5 major renovations and new houses per block, per year — or one per block every two years. However, on the 23 most active blocks, each with an above average total number of projects (5 or more), the average is 0.77 per block, per year — or one per block every 16 months. One major renovation or new house per block every 16 months may not sound like a lot, but consider this. Using VanMap, the city’s web-based GIS, I count all the lots on every block in the pocket, and calculate an average of 23 lots per block. If the rate of change on the most active blocks were to continue unabated, the housing stock on these blocks would be completely renovated or replaced in 30 years. Based on the rate of change for all the blocks that I walked, the entire neighbourhood would be completely renovated or replaced in 46 years.
….Forty-six years ago was 1964, about a year before the earliest Vancouver Specials were built. From a statistical standpoint, if the rate of change in Grandview during the current real estate boom had been ongoing since 1964, the only house that would still exist in the first picture of older housing stock above, or be recognizable in its original form, would be the second one, the Vancouver Special. If we consider the elevated rate of change on the most active blocks during the boom, every house in the first picture would be gone, or renovated to the point of being unrecognizable. Grandview’s streets would be ruled by houses like those in the second picture above, and the newer ones in the photographs below.
….I’m sure there are people at City Hall and the Land Title Office with the appropriate databases who could do this number crunching and analysis much more efficiently and precisely, but my roughhewn results probably wouldn’t differ much from their more precise ones when it comes to an overarching statement. Grandview, and other Vancouver neighbourhoods currently experiencing rapid change, have been profoundly affected by the real estate boom.

My inventory map
You would recognize nothing
Imagine a residential street, say the one on which you grew up, with every last house renovated to the point of being unrecognizable, or demolished and replaced with a new house, in a 30-year period. Put another way, you could leave home at 18, and come back in early middle age, and not have the slightest inkling you were standing on the street where you grew up. You would recognize nothing. It’s possible this imagined scenario could become real in neighbourhoods all over Vancouver. The current rate of change strikes me as disorienting. I remember visiting Vancouver in the mid 90s while living elsewhere for a few years, and my disorientation coming across the Granville Street Bridge and seeing all the green glass Concord Pacific towers for the first time. Whoa! Where the hell did all those come from? As if a squadron of alien spaceships had set down on the north shore of False Creek.
….The rate of change in many parts of Vancouver in recent years doesn’t feel human scale, and I think if it continues unchecked for a generation, it would be a bad thing for the individual psyches, and collective psyche, of Vancouverites. You can’t be constantly destroying and remaking your home without it messing with your head. When you can’t count on recognizing things, can’t count on things as fundamental as one’s home and its various touchpoints remaining relatively reliable and stable, the danger is that you stop understanding that certain things have a value that isn’t solely calculated by the marketplace, that certain things, although they may seem mundane, are worth preserving. You may grow up as someone who feels his or her own personal history to be disposable. Why get overly attached to anything if it could be wiped off the face of the earth tomorrow?
The boom neighbourhood
Here’s a sample of renovated and new Grandview housing stock that in the last eight years has been replacing the old.
….The first shot is a row of four heritage-style duplexes — new houses designed to look like the more elegant of Grandview’s original single-family dwellings built a hundred years ago, and also designed to hide the fact that they’re front-and-back duplexes.  The fifth house in the row is an actual old house. City Hall encourages new house design that fits in with the existing streetscape. Given the rate of change suggested by my inventory, and the amount of demolition, on many blocks ‘existing streetscape’ is more of a conceptual notion than a reality. A friend of mine calls these “faux heritage houses.” I tend to agree. Are they really just builders’ boxes with an overlay of ‘character’? Somewhat cynical insta-heritage designed to entice the Anglo-Saxon demographic priced out of the West Side? They feel like a simulacrum of the old designed to make some of us feel better about the fact we’re progressively destroying that which is actually old.

Heritage-style duplexes: one old house, and four new houses designed to look old
….The second shot is a good example of the other type of new house built in Grandview during the boom — the naked builders’ box that does little to disguise its essential box-ness. Towering over the two remaining stucco bungalows, which have so far escaped the excavator’s jaws, it’s hard to argue that these new houses fit in with the existing streetscape. But once those last two survivors from the 1930s or 1940s are gone, and replaced by builders’ boxes, a new uniformity will be established. I’ve come up with another name for this style of house: boom box. Builders’ boxes built during the boom.
….Aesthetics is a personal matter. I find these boom boxes ugly, but others may not. Or aesthetics may not be a primary concern when selecting a house. And unlike the new-age heritage houses, I don’t detect any cynicism in the forthright utilitarianism of these structures. Much like the original Vancouver Specials, these houses maximize square footage for the price, and they work well for larger families. In Grandview, and East Vancouver in general, these are often longstanding Chinese-Canadian families with working class origins, often with three or even four generations living in one house (as distinct from the more recent, wealthier immigrants from China gravitating to the suburban municipality of Richmond). If you have an aged mother, and two or more adult children living with you, you need space.

East Vancouver boom boxes: builders’ boxes built during the boom
….And finally, a before-and-after shot of one of those renovations that completely transforms the original house.

Before and after
Where’s the money coming from?
The answer to this question is simple. For homeowners undertaking major renovations or demolishing and rebuilding: from the houses themselves. For developers and builders constructing spec houses (houses built with the speculation of finding a buyer): from the killing they made on the previous spec project. Once the real estate boom gets seriously underway in 2002, and prices keep cranking upward, the boom becomes self-sustaining to a certain degree. Owners of existing homes see their annual property assessment balloon, as if on steroids. After three or four years of these eye-popping increases they start to feel wealthy, and the bank agrees. Interest rates keep falling. In the aftermath of 9/11 rates fall to generational lows. In the aftermath of the 2008 global financial crisis, interest rates hit all-time lows. Over the past eight years, cheap money, and then incredibly cheap money, drive house prices into completely new territory — surreal territory in Vancouver, where many homeowners sit on increasingly massive war chests of home equity. Yes, it’s paper equity. Yes, it would shrivel in the event of a price collapse. But it’s paper wealth that’s solid enough for the banks to approve large home equity lines of credit secured by the houses, like the one my wife and I are given when we renew our mortgage in September of 2006.
….For many Vancouver homeowners, armed with these HELOCs, or with construction loans, it’s been time to spend. For builders, developers, and the various construction trades the only problem is the inability to clone themselves so they can take the money and complete the projects twice as fast, the demand is so great. Renovations that completely transform modest houses, often coming close to doubling the square footage. Tear-downs to make way for ‘dream homes’. Tear-downs to free up land for spec building, which can be more lucrative than custom building for a specific client. There’s no mystery about what’s at the root of the recent dramatic changes in Grandview, and in many other Vancouver neighbourhoods. It’s money.
….And, in many cases, the changing demographics associated with the money. The willingness to spend it. The longstanding blue-collar inhabitants of Grandview, the retired Italians, and Portuguese, and Chinese, the widows, are sitting on the same home equity as the more recent, white-collar arrivals, but they aren’t spending it. In fact, they’ll be sitting on even larger cash mountains, because they paid off their modest homes years ago. One hundred percent ownership. But these older residents achieved that ownership through years of grinding it out in tough jobs, and through financial prudence — like my wife’s parents, living a few blocks away, working nights in various restaurant kitchens, and the early shift in a meat packing plant. Scrimping, saving, keeping a lid on unnecessary expenditures. These are people constitutionally averse to dropping five or ten grand on granite countertops, or stainless steel kitchen appliances. (Will events in the coming years cause all of us to become constitutionally averse?) They’ve lived in their houses for years. They’re used to them the way they are. They aren’t interested in the stress and upheaval of a major reno. They’ve got the equity, but they need it to backstop their retirements, and to pass on to their adult kids.
….It’s the more recently arrived inhabitants, with years of earning potential still ahead, who are spending. White-collar information professionals who work their days at computer keyboards are supplanting blue-collar workers who needed to move all day long, use all the muscles in their bodies to earn a living. A younger generation, with English as their first language, and their labour more valued by society. Some of the new arrivals are real estate refugees from the West Side, where they may have grown up, or where they might have been able to buy in previous decades, and perhaps still aspire to live one day, and where the average house price is currently 1.5 million dollars. The new influx has a different relation to money, and debt, and the rapidly changing built environment of the neighbourhood is a direct manifestation of that relation.
….I’m going to leave discussion of whether or not Grandview is gentrifying to a future episode. Certainly, some of the elements of gentrification appear to be in place, but a number of local subtleties prevent a simple answer to the question.
Shock and disorientation
Most of us have experienced the shock and disorientation of returning to a familiar place and finding it radically changed — never more so than if the familiar place is a house in which we grew up, and upon returning, anticipating that first sight, the feeling of reacquaintance, we find it gone. A bald, empty lot stares at us, or some new monstrosity. Something new always seems a monstrosity in our eyes. The alteration from the image in our mind, the feeling in our heart, at the very least feels like a breach of trust, and depending on how calamitous the circumstances, a violation, a kick that leaves a sick feeling in the gut. So imagine coming back to the familiar place and finding the entire block, every house, gone, or so changed that the block, the houses, might as well be gone. The one-time connection to you is certainly gone. Part of your personal history is effaced.
….There’s something very personal about demolishing a house, a home. It’s not the same as dynamiting an aging sports stadium. People can feel very strong connections to public structures, but they’re part of a communal connection. The spectacle of a half torn apart home is like a personal nakedness come upon, always a little unseemly. The emotions, the personal history, the tender or fraught relationships that the house has contained, and concealed, and protected from view, are rudely exposed. Like ghosts escaping into the ether, the long-hidden truths of past lives, having seeped into the walls over decades, now evaporate when exposed to air.
Some East Vancouver ghosts

We don’t demolish our house. We renovate it to a degree that would certainly fit with my definition of ‘major’, with a final phase of the renovation still in the future. In hindsight, the financial wisdom of our choice may be questionable. For perhaps a third more money than we’ll end up spending once all phases of the renovation are complete, we could have demolished the house and built a new one. One with a full-height ground level, more square footage on the main floor, and a second storey that might afford a view of the mountains, at least when the leaves are off the trees in winter. And an increase in market value that could very well surpass the extra outlay upfront, although this last point is debatable, and dependent on what happens to house values in the coming years. But these are things you learn with experience.
….What I do know is that some ghosts would have been lost forever if we’d brought in the excavator and the forty-foot dump trailer and smashed everything to kindling.
Homemade wine
The first ghost is a remnant from a wooden box of Zinfandel wine grapes — the box end with the producer’s colourful label. I find this board when I’m disassembling the framing of the bathroom in the old rental suite. Nailed between two studs, it’s serving as a piece of blocking for the shower plumbing. So along with their spouses, one or both of the Portuguese brothers, who put in the old suite in the 1980s, were probably makers of homemade wine. I know from my neighbour that the family used to run a bakery on nearby Nanaimo Street.

Wine box end
War bride?
The second ghost is fragile, a 3-inch by 4-inch scrap I find beneath attic insulation, a paper label clinging to the back of a board that along with a few other boards has been used to close off an attic hatch. The label says NOT WANTED, and a woman’s name is typed on it: Mrs. D.O. O’Malley. Although this ghost is the most recent I’ve encountered, it’s the oldest.

Not Wanted label
Some older readers may understand immediately the original purpose of this label, but it takes me a while to figure it out, and without Google, I might still be scratching my head. I assume “8/51” in the lower left corner is the date August 1951, which means the label comes from a time when immigrants arrived in Canada by ship, rather than aircraft. “Not Wanted” is short for “Not Wanted on the Voyage”, a designation given to things like steamer trunks and wooden crates that traveled in a ship’s hold because the passengers didn’t need them during their time at sea. Googling key parts of the address in the lower right corner — Canadian Civilian Repatriation Section, Sackville House, London, W.1 — unpacks the rest of the story.
….The Civilian Repatriation Section was part of the Canadian Wives’ Bureau, a department of the Canadian military set up in England and Europe to transport war brides to Canada where they were reunited with the returned servicemen they’d married during the Second World War. So Mrs. D.O. O’Malley may have been a war bride , although 1951 is late for a Canadian war bride. Most traveled to Canada in 1946, the year after the war ended. But the fact that it’s a woman’s married name that appears by itself on the label certainly suggests a war bride. And our house, a modest bungalow built in a working class part of town in 1946, certainly fits well with the theory of O’Malley the returning veteran, buying or building a new little house to bring his bride to. Somewhat inconclusive, but I’m happy to let elements of the mystery remain, at least for now.
Childhood home
The final ghost is flesh-and-blood, and on a bright summer day rings the doorbell. Peter Chang is about my age and he tells us that he was in the neighbourhood and our house is his childhood home. We invite him in and give him a tour, or more accurately, he gives us a tour of the ghost house that hovers in his memory, superimposed on the one we’re all standing in. Peter is surprised by the attractive Douglas fir floors, probably the best feature of the house, which we had refinished just before moving in. The brothers (I’m assuming it was them) had previously butchered them, a do-it-yourself attempt at refinishing that left waves, and divots, throughout. Some things really should be left to specialists. But Peter had not even been aware that there were original fir floors. When his parents bought the house in the late 1950s, the wood had been entirely covered with battleship linoleum, and it stayed that way throughout his childhood and teen years.
….We spend an interesting hour listening to Peter’s details about the house and his family. They were the first Chinese family on the block. His father was no longer alive, and we get the sense he may have died prematurely. At a certain point Peter and his family had to ask the neighbours to stop giving his father bottles of their homemade wine. As I’d suspected, there was previously a set of stairs to the lower level, in the back corner of the house where there’s now a narrow bedroom on the main floor, and the laundry room directly beneath. As part of putting in the rental suite, the brothers obviously removed the stairs, and closed the opening, gaining a small room on each floor in the process. Peter and his brother used to go down this U-shaped stairway to the partially finished basement, where they spent hours with their chemistry sets. Until Peter mentions it, I’d totally forgotten about those childhood chemistry sets. The concrete front steps on the house were put in by Peter’s parents when the old wooden ones started to rot and became unsafe. The bright red that peeks through several layers of peeling and flaking grey paint is the original colour that the stairs were painted.
….We get Peter’s contact information. He tells us he has quite a few photographs we might find interesting. We intend to get in touch, although we haven’t yet. Peter’s visit is prior to our renovation, so if he comes back for another look, he’s going to be surprised again. But if we had demolished Peter’s childhood home, would he have had any reason to ring our doorbell, or the heart to?

February 2010, Grandview

Next episode
Part 6: “Renovation Nervosa”
I don’t always walk the blocks of our neighbourhood purely in the spirit of unscientific inquiry, as I do in February of 2010, when I count all the renovations and new houses. In our first years in the neighbourhood, as it starts to transform before me, I often feel not exactly envy, but anxiety that other people are getting on with things and we aren’t.
Financial details
From 2004 onward, all mortgage and LOC balances are as of 31 December of the year in question.
Asking Price: $355,000
Sale Price: $355,000
Down payment: $88,750 (25%, ergo, no CMHC insurance, representing thousands of dollars of additional cost)
Mortgage (at purchase, Sep 2003): $266,250
Terms: 3 year fixed at 4.00%, 18 year amortization, bi-weekly payments
2003 Property Assessment (estimate of market value on July 1, 2002): $260,600
2004 Property Assessment (estimate of market value on July 1, 2003): $330,500
Equity based on assessment: $64,250
Mortgage principal: $247,330
Terms: 3 year fixed at 4.00%, 18 year amortization, bi-weekly payments
2005 Property Assessment (estimate of market value on July 1, 2004): $420,000
Equity based on assessment: $172,670
Mortgage principal: $201,829
Terms: 3 year fixed at 4.00%, 18 year amortization, bi-weekly payments
2006 Property Assessment (estimate of market value on July 1, 2005): $461,000
Equity based on assessment: $259,171
Mortgage principal: $191,884
Terms: 5 year variable at Prime minus .75%, 25 year amortization, bi-weekly payments
HELOC balance: $4,291
HELOC interest rate: variable, at Prime.
2007 Property Assessment (estimate of market value on July 1, 2006): $570,000
Equity based on assessment: $373,825

The New York Times – “The real estate development industry, unusually powerful in Vancouver, provided the city with an Olympic Village plan that ultimately was too good to be true.”… “What has Vancouver to offer other than its nice mountains and vastly overpriced real estate?”

Excerpts from ‘A $1 Billion Hangover From an Olympic Party’, by Ian Austen, New York Times, 24 Feb 2010

“O.K., are the Olympics worth it?” Mrs. Lombardi said while stopping for lunch at Murchie’s, a venerable tea and coffee shop. “I don’t want to be too negative because there’s good and bad, but I have to agree with my husband. All he can talk about is the debt. I’m worrying about what’s going to happen next.”

“Vancouver was always an odd choice to become the world’s winter sports capital for two weeks.”

“While it’s very hard to see all the costs, I think people are going to pay for it for a long time,” said Lee Fletcher. “Some people are going to benefit hugely, not the average guy. The average guy is going to see his taxes increase.”

The real estate development industry, which is unusually powerful in Vancouver, provided the city with an Olympic Village plan that seemed — and ultimately was — too good to be true. A development firm would finance and build the village on a desirable piece of city-owned land. After the Games, the developer would convert the accommodations into luxury condominiums and pay the city for the property. Vancouver would get its village and turn a profit as well. But cost overruns, combined with the credit crisis in 2008, destroyed the financing. Once in office, Mr. Robertson had to obtain special permission from the province to borrow $434 million to complete the village. In all, the city is responsible for about $1 billion in development costs, a situation that lowered its credit rating. If Vancouver’s real estate market remains strong, the city may recover most of that money. If not, Mr. Robertson said, “the city is on the hook for some hundreds of millions of dollars.”

Kennedy Stewart, a professor of public policy at Simon Fraser University in suburban Vancouver, remains unconvinced that showing potential investors a good time during the Olympics will resolve Vancouver’s long-term economic issues. The forestry industry, once the mainstay of its economy, has been devastated by a beetle infestation, the collapse of the housing market in the United States and competition from South America. While motion picture production companies and software developers have set up shop here in recent years, they lack the same economic impact. “What’s the substantive thing Vancouver has to offer other than its nice mountains and vastly overpriced real estate?” Professor Stewart asked. “The forestry industries have collapsed, so where is the money going to come from other than marijuana grow-ops?”

“I just sold a $1Million+ home in Vancouver. If the value of your home goes through the roof, it only makes sense to sell. Move farther out and smaller and do it again. Do this twice and you can retire. We did.”

At what price points do some home-owners cash out because the money becomes too attractive, too life-changing, to ignore? -vreaa

This from comments by robercarter at 24 Feb 2010 11:00 pm and 11:08 pm

“I just sold a $1Million+ home in Vancouver through ReMax and yes…the listings were minimal which was good for me. I doubt that this trend will continue but if it does….good luck everybody. I wouldn’t buy a house in Vancouver right now if I had a hundred million dollars. Far better places to invest right now. If you want to live in Vancouver, rent. I’ve heard time and time again that your house is your home, not an investment. This is surely warm & fuzzy but completely stupid. Your home (house) is the most expensive purchase of your lives. If its value goes through the roof it only makes sense to sell. Move farther out and smaller and do it again. Do this twice and you can retire. We did. Just take the emotion out of your home (house) and you can make more than almost any other investment. Just a thought…”

Olympic Visitor, Foreign Buyer? Part 4: “Those opening ceremonies – that should add $25 a square foot to what I can get at the village.”

The author of the article cited below was unsure as to whether Bob Rennie was really kidding or not with that statement. -vreaa

Excerpts from ‘Banking on the Games afterglow’, by Frances Bula, The Globe and Mail, 22 Feb 2010

“The reality is that many are hoping there’s an element of truth in Mr. Rennie’s humour. Among them are brothers Peter and Shahram Malek who run Millennium Developments and who pledged $70-million of their assets to keep the athletes village project going when their financing started to collapse at the beginning of the recession. Another group is the City of Vancouver, which is owed almost $200-million for the land and was forced to loan the Maleks $800-million for their construction refinancing. Both are depending on a healthy real-estate market to recoup the village’s $1-billion cost. It would be a relief if the reflected glory from the Olympics would make a difference once the athletes go home.”

“Certainly the village, after a year of rocky news coverage, has been basking in the Olympic glow. A recent New York Times Magazine essay on the Games by Liberal Leader Michael Ignatieff was accompanied by a picture worthy of an architecture magazine. The site looked like a modernist marvel on the water. Television shots frequently highlight it. Media outlets report that athletes love it.”

“The problem with Millennium is their costs,” says Cameron McNeill, another major development marketer who points out that the village was built at the peak of prices for labour and materials. “Will the market bear the $1,100 a square foot they need? I think that’s stretching it. I think it’s going to be extremely difficult for them to recoup their costs.” Mr. McNeill, the head of MAC Marketing Solutions, is selling a building across the street from the village, the James. He’s pricing it in the $700-a-square-foot range. That’s the average price Mr. Rennie got for the first 250 village condos before the crash. It means the remaining 500 condos have to sell for much more on average for the project to break even.”

“We are a brand society and Vancouver doesn’t have a lot of legendary addresses,” Mr. Rennie says.

Housing ATMs In Vancouver – “The number of times I’ve listened to individuals discuss how they’ve magically turned their ‘paper gains’ into ‘expensive toys’ is quite unnerving.”

This from advar at RE Talks 24 Feb 2010 2:49 am

“I cannot help but shudder at the prevalence of this particular disposition [to spend personal residence paper profits by taking loans]. Amongst my colleagues at least — well educated people even. The number of times I’ve listened to individuals discuss how they’ve magically turned their ‘paper gains’ into ‘expensive toys’ is quite unnerving. HELOCs are tantamount to the discovery of Shangri-la it would seem. Anecdotal I know. But from where I’m positioned, it’s ubiquitous, and it’s frightening.”

No Head Offices In Vancouver – “Bank of Montreal actually had to buy houses for senior management to live in because no one wanted to commit their huge salaries to real estate.Those departments are never coming back to Vancouver.”

Vancouver Old-timer at 1:59 pm

“I worked for what used to be called “The Office of the Senior Vice-President of the Bank of Montreal” in Vancouver when Vancouver actually had a few almost Head Offices. BMO, and all the other banks, shipped the various senior departments back east in the late ’80s, early 90’s. Those departments are never coming back to Vancouver – capital costs of locating here and trying to get staff to come here are just too much. The last 10 years or so that I worked for BMO, the bank actually had to buy houses for senior management to live in because no one wanted to commit their huge salaries to real estate (of course, looking back, it would have been a good move).”

On Being A Landlord – “You have to buy the properties very cheap, at the bottom of the price cycle, just to insulate yourself somewhat from the inevitable costs down the road.”

This from Got A Watch at 23 Feb 2010 10:17 am

“I have some experience in for-profit rental real estate, in fact I grew up with it, as my Dad was a landlord. I remember at a very young age going to “help Dad” do maintenance.

Being a landlord is like any other business. Some periods are good, followed by the not so good. You have to have enough cash and equity to weather the downturns, when “cash flow” is flowing away from you, tenants stop paying the rent then vandalize the unit, the Bank calls about how your equity is questionable and your loan might not be renewed, the furnace dies, the roof leaks, the wiring starts sparking, the tenant uses his unit for a growop etc etc etc.The same issues confront larger multi-unit properties, but the numbers are so much bigger. New elevators, repairing the parking garage, new boiler and piping – the costs can run to millions very quickly.

Which is why I sold all rental properties years ago, and would never go back to that business. You have to buy the properties very cheap, at the bottom of the price cycle, just to insulate yourself somewhat from the inevitable costs down the road. If you can put up with all the grief for 20 years, the tenants will have paid off the mortgage for you, and you will probably be dead from the stress by then or shortly thereafter. It’s a tough business, that looks easy to those who have never seen the wrong side of the business cycle. Hint: rents will fall as so many vacant properties hit the rental market, while consumers ability to pay is reduced, financing is tighter, while fixed costs don’t go down – and I am not even mentioning higher interest rates here. The only way to survive will be to have a large equity cushion that will enable cutting rents and cover the increased churn and vacancies.

Anyone who is claiming that their experience over the last 5 years, during the biggest Boom ever in real estate, will be repeated indefinitely into the future – go ahead, double down, buy some more real estate. Best of luck with that, you’ll need it.

Personally, I would rather dig ditches for a living by hand than be a professional landlord again. That reflects 50 years of family history in the business in. The day I sold the last property was a happy day.”

“I talked to someone in construction management recently who said that his company and too many other companies were finishing big jobs right now with no jobs lined up once they’re done.”

Vansanity at 22 Feb 2010 at 10:56 am“I have a couple friends that are moving away this week. Both were in construction and their last projects are complete and they can’t find work. Another works for a glass supplier that worked on most the towers downtown and they have 3 projects they’re currently wrapping up and see nothing else coming up.”

grandmaster G at 22 Feb 2010 11:05 am“Same in my circle, lost one guy to South America: “Vancouver is nice, but I need more sun. Also I need people that are real and not so full of themselves.” Another one headed off to the east coast, Montreal. He was laid off here and couldn’t find a new job (entertainment software industry). The third one was laid off as well and moved to the Okanagan (entertainment software industry).”

betamax at 22 feb 2010 12:31 pm – “I talked to someone in construction management recently who said that his company and too many other companies were finishing big jobs right now with no jobs lined up once they’re done. He also said that any new contracts were bid so competitively that the winning bids probably won’t make any money. They’re just trying to stay in business.”

And this observation –

M-, at 22 Feb 2010 2:11 pm – “This is crazy– it looks like BC’s building as though we’re going to grow 11% in a year! BC’s population is just under 4 million people. 186,000 housing starts per year, at 2.3 people per unit, is enough capacity for 428,000 people. Or, to put it differently, 11% population growth! Given that our growth is more like 1% or so a year, it seems like there’s a lot more job loss to come in the construction sector….. (Admittedly, some of those units are “replacing” old housing stock– such as, 6 houses knocked down, 50 townhouses go up in place, but still…)”

Olympic Visitor, Foreign Buyer? Part 3: MSNBC RE Coverage: “Warning: Don’t count on bargains because Vancouver’s home values have recovered and already are back at 2008’s peak levels.”

This from raventalk at RE Talks 22 Feb 2010 11:25 am“Watching the Olympics last night on CNBC and there was a ten minute feature on Vancouver real estate. The gist of it was Vancouver is a great bargain compared to other “world class cities.” This coming from a real estate agent from New York who is visiting the Olympics and now is looking at buying since “prices seem stable here (Vancouver.)” Also found this link on”

‘Northern exposure’, by Jennifer Alsever, contributor, Business/RE section,, 21 Feb 2010“Are you becoming enamored with Vancouver’s Olympic glory? Or maybe you’d rather stroll down Robson Street for the closing ceremonies rather than watch it on TV. Here’s a look at what’s for sale in Canada’s third-largest city. Warning: Don’t count on bargains because Vancouver’s home values have recovered and already are back at 2008’s peak levels. All prices are in Canadian dollars.”

“My ex-pat relatives from California drove past a 4-plex in Kits that had a For Sale sign out front, and asked for the price. They thought it was pretty reasonable – until they realized it was for only one unit.”

Some Californian perspective on Vancouver RE prices. This is the kind of story that makes anecdote archives worthwhile. Thank you coco. – vreaa

This from coco at VREAA 22 Feb 2010 7:27 am

“I had ex-pat relatives visiting from California who told me that they were thinking of moving back here. We drove past a nice looking 4-plex in Kits that had a ‘For Sale’ sign out front and they asked me to look up the price for them. I did and they thought it was pretty reasonable – until they understood that it was for only one unit. (They thought the price was for the whole building). Needless to say, they are reassessing their idea.”

Olympic Visitor, Foreign Buyer? Part 2: “CBC spoke to a realtor who had four phone calls since the Games started. One party was American, interested in purchasing a property in Vancouver.”

Stories of visitors to the Olympics buying RE in Vancouver. Or not. -vreaa

pricedoutfornow at 21 Feb 2010 11:24 pm“CBC radio reported today that realtors are bored, sitting at home, watching TV during the Olympics. Apparently international visitors are too busy enjoying the games to think of investing in real estate. Who woulda thought??? Though they did point out one realtor who had an amazing FOUR phone calls since the games started. This realtor revealed that one party was American, interested in purchasing a property in Vancouver. I bet the Americans slammed down the phone after hearing the price of condos in our fair city.”

“Buying would require some kind of weird financial voodoo. On a whim I applied for “affordable housing” apartments at Woodwards, and we’ve been approved. … A 2 bedroom with a nice view for $1,400/month.”

‘Affordable housing’ in Woodward’s at $1,400 per month? Are these units government subsidized? How? Who qualifies? -vreaa

This from caps for sale at 20 Feb 2010 12:45 pm & 1:00 pm

My husband and I need a new place to accommodate our new family addition. We’re currently renting a 1.5 bedroom for 900-ish, that we moved into awhile ago. We were thinking of buying, but it is just impossible without doing some kind of weird financial voodoo. Anyway, we have just started looking to rent, and we’re not in a big rush, but we know it as to be done within the next 8 months. On a whim I applied to one of those “affordable housing” apartments at the new WOODWARDS development and we’ve been approved. We were early enough in that we can choose one of the nicer apartments, and they’re not bad. Actually pretty nice and spacious (900-950 sq feet) for the price, I think. There is a 2 bedroom with a nice view for $1,400/month. The thing is it’s all happening so fast, we’re supposed to sign the lease today if we want it. It’s a bit more than we were hoping to spend, on the other hand it’s convenient to our jobs, transit (we don’t drive) and nice and new. I’ve been renting a studio about a block away from the towers for over 5 years, so I know the bad things about the neighbourhood. Oh, for those who are interested, I don’t think the “affordable housing” is going to a bunch of welfare winos, as I’ve seen on here. They gave us a pretty thorough going over to make sure we earned enough to live there.

“I just looked into what it would cost to buy in ‘Ginger’, an apartment which is 800 sq feet (ie 100-150 square feet less than the woodwards rental) would be, wait for it………a half million dollars. Yet we still got the “you’ll be throwing your money away on rent lecture”.

Olympic Visitor, Foreign Buyer? Part 1: “I was talking to a Swedish flight attendant at the Irish House last night. She was considering buying a condo in downtown Vancouver.”

Vancouver is looking glorious again today. Despite this, we don’t think there are going to be many Olympic visitors who decide to become foreign buyers of Vancouver RE. Our prices are simply too preposterously high, and those who live in other cities will be more aware of that than locals. We are, however, interested in any evidence that may prove us wrong. So far, we’ve had to be satisfied with the following insubstantial anecdotal snippet. Please send your stories, if there are any. -vreaa

This from vantownsucks at 19 Feb 2010 10:02 am“I was talking to a Swedish flight attendant at the Irish House last night and, I’m not kidding, she was considering buying a condo in downtown Vancouver. She said she loves Vancouver. I was shocked I must say.”

Alternative Investments To RE – Canadians Know Less Than Monkeys About TFSAs

For many Canadians, real estate is their best investment. There are three reasons for that:  (1.) We’ve just been through an extraordinary bull-become-bubble up-leg in RE, (2.) there is forced leverage inherent in RE ownership (which works spectacularly well through up-legs) and, (3.) for many, RE is their only investment of any consequence.  As a group, ‘Boomers’ are outrageously overdependent on their RE holdings, and there is a dire need for the entire population to become more savvy with regard to other options for saving and investing. Tax-free savings accounts (TFSAs) were introduced more than a year ago and very widely publicized. A survey conducted in December 2009 shows Canadians woefully ignorant of this useful instrument. A group of monkeys throwing darts at the answer-sheet would have scored an average of 50% on this true/false quiz. A group of 1,506 Canadians scored an average of 41%. -vreaa

The Monkey Huts

Excerpts from ‘Canadians fail TFSA test’, The Globe and Mail, 18 Feb 2010

A Mackenzie Investments TFSA test, conducted in December by Leger Marketing, asked 1,506 adult Canadians five basic true or false questions about Canada’s newest investment account. Of those polled, 44 per cent answered three or more correctly, 8 per cent answered all five questions correctly and 28 per cent got them all wrong. … 68 per cent of respondents haven’t opened a TFSA. When asked why, 59 per cent cited a lack of money while 42 per cent said it’s because they don’t know enough about them.

Here are the five true or false questions in the Mackenzie survey. [% indicates how many respondents answered correctly]

1. Like an RRSP, contributions to a TFSA are tax-deductible. [43%]
2. The TFSA contribution limit is currently $5,000 per year. If you don’t contribute the full $5,000 in a year, the remaining contribution room is lost. [
3. TFSA contribution room does not depend on earned income. Regardless of income level, all Canadians age 18 or older will receive $5,000 of TFSA contribution room each year. [
4. A broad range of investment options are available within a TFSA including stocks, bonds and mutual funds. [
5. An individual can own multiple tax-free savings accounts. [

See here for the answers.

[Our post headline is intentionally waggish: This is a classic case of a little bit of knowledge being a bad thing. -vreaa]

Putting the “Get Real!?” into ‘Real Estate’: 2218 sqft for $5,380,000 = $2,426 per sqft

We like a lot of the buildings that Arthur Erikson has designed, but we find it hard to imagine 2218 sq ft working THAT well. We’ll be watching the square-footage asking prices on this building through the next decade. -vreaa

MLS#V809514, # 603 1560 HOMER MEWS, Vancouver, BC   V6Z 0A6

2218 sqft, $5,380,000. Maintenance fees $955.21 monthly.

“Master piece by world renowned architect Arthur Erickson. Breathtaking waterfront view of False Creek, water & city. Unique design & luxurious interior can not be matched by any other building in the city. Features & amenities need to be view in person.”

Lending Stories – “A friend works for BC assessments. Nearly all buyers these days are mortgaged to the hilt… 95% loan to value.”

gse36 at RE Talks 15 Feb 2010 12:32 pm“I was speaking to a mortgage broker. He showed me his past 10 deals. Of these, 4 were mortgage renewals for >100% PP. It’s kind of crazy. Like a guy buys a downtown loft $515k in 2005. Now takes out a new mortgage at $569k.”

grantness at RE Talks 15 Feb 2010 12:39 pm“A friend works for BC assessments. He sees mortgage details all day long. Last night he told me nearly all buyers these days are mortgaged to the hilt… 95% LTV [loan to value].”

gse at RE Talks 15 Feb 2010 1:14 pm“That’s very consistent with CMHC figures of avg 6% downpayment, across Canada, since 2007.”

Flaherty Taps Gently On The Brakes – “I just got pre-approved yesterday. According to the “experts”, I can buy a $700,000 house with 10% down on a 30 year term with my $93,000/year salary.”

Minister of Finance Flaherty today announced that, as of 19 April 2010, mortgage lending in Canada will have to be just a tiny bit tighter. Borrowers must qualify at a 5 year rate; equity withdrawal from a property is lowered to 90% (current 95%!); down payment on non-owner occupied properties is raised to 20% (current 5%). The very idea that there may be individuals in Vancouver who have extracted funds out of properties up to 95% of their current inflated values is completely mind-boggling. 90% is still speculation of the highest degree. It’ll be interesting to see how the Vancouver RE vehicle responds to this tap on the brakes. -vreaa

The banks will still offer a lot to buyers under the new rules.  White Payer ( 16 Feb 2010 at 10:11 am) would likely still get offered the terms they describe here –

“I just got pre-approved yesterday. According to the “experts”, I can buy a $700,000 house with 10% down on a 30 year term with my $93,000/year salary. Isn’t that just about what the Van income/price multiple is?” [Actually, at the current average Vancouver price/income multiple of 9.3, White Payer would be able to buy a property for $865,000 -ed.]

Olympic Village Not Up To European Construction Standards – “The walls are as thin as curtains.”

Olympic visitors are puzzled. Those familiar with bricks and mortar find our construction practices odd. And some are labouring under the delusion that we have dry summers. -vreaa

‘Athletes and coaches slam Olympic Village accommodation’,, 12 Feb 2010

“Disgruntled athletes and coaches staying at the Olympic Village in Vancouver have hit out at what they say is shoddy accommodation and a lack of basic comforts.”
“The walls of the rooms are so thin that the athletes are struggling to fall asleep.”
“Ski jumping trainer Werner Schuster compared the Olympic Village with a boy scout camp.”
“The walls are as thin as curtains.”
“The Village is good for summer. But now in winter with this weather it’s a problem. The German team have especially bought heaters to dry their things which are always getting wet due to the relentless sleet.”

Flaherty Will Tighten – Spot The Vancouver Sun’s Freudian Slip

Okay, this is it. Metaphors involving nails and coffins, straws and camel’s backs, come to mind. At the very least, a shot across the bow of the SS Vancouver RE. After the message has been semaphored  for weeks, Captain Flaherty will announce tomorrow how he will somehow restrict mortgages without scuttling the fleet. Flagship Vancouver Sun, the local RE regatta organizer, made a wishful flub in breaking this news. Take it up with your therapist, VancSun!  Spot the slip in the article below. [or run your mouse over the article for the answer] -vreaa

Federal Government Set To Restrict Mortgages, Canwest News Services, 15 Feb 2010 7:02 pm

Former BOC Governor David Dodge – “RE Fundamentals DO matter; These prices look pretty high by any conventional measure.”

There is now a large chorus of voices calling for tightening of Canada’s mortgage lending standards. And many respectable players have joined the group in recent weeks. We suspect that this is all in preparation for the actual move itself, so that it can seem to be inevitable (which it is) and seem to come from a consensus (thus there is less ability to lay blame). Note that David Dodge refers specifically to fundamentals like “the ratio of house prices to incomes and rents to house prices”,  factors that those bullish Vancouver RE have argued are irrelevant. -vreaa

From The Globe and Mail, 14 Feb 2010, ‘Dodge suggests Feds should cool house market’ –

“Canada should be bracing itself for the reality that house prices are more likely to go down than up in the next few years, says former Bank of Canada governor David Dodge. “These prices look pretty high by any conventional measure,” he said in an interview, citing measures such as the ratio of house prices to incomes and rents to house prices. “So, the likelihood of house prices falling a bit over the next few years is probably somewhat greater than that they would rise over the next few years.” “Whether there’s a bubble or not you can only see after the fact,” he added. But it wouldn’t take a bubble bursting to cause consumers pain. If your house price goes down 10 per cent and you’ve borrowed 95 per cent of its value, all of a sudden you’d be in hot water, Mr. Dodge noted.”

“Mr. Dodge said he has never been comfortable with the idea that people can buy homes with down-payments of as little as five per cent. Whether increasing it to 7.5 per cent or 10 per cent, he would be supportive of raising the minimum payment. He added that it would be possible for Canada Mortgage and Housing Corp. to rein in the market on its own, without an official move by government, by tightening the requirements for mortgage insurance. That’s what the Crown corporation used to do when he worked there in the “old days” (the 1970s), he said. For instance, it could tell banks that in order for a mortgage borrower to qualify for insurance, even if they’re just getting a three-year variable rate mortgage, they have to be evaluated to ensure that they could afford a five-year rate on a mortgage with a 25-year amortization. The Crown corporation is currently looking at such options, according to sources.”

Vancouver RE Unaffordability Mentioned In Olympic Coverage – “I would like to be able to afford a house in Vancouver without having to knock over a major bank. Reality disagrees.”

This from Bruce Arthur, National Post, 14 Feb 2010

“Hope peering through the clouds”

“In three short days of the Vancouver 2010 Winter Olympics, it was hard to shake the feeling of unease that this whole enterprise might — just might — be inching towards disaster. It wasn’t a negativity thing, either. As a Vancouver native and a proud Canadian, I would like nothing better than a fiscally responsible, perfectly organized, patriotically successful Games that spotlessly showcases the best of all of us to the world. I would also like to be able to afford a house in Vancouver without having to knock over a major bank. In both cases, reality disagrees.”

[and then, the sun comes out]…

“Then, gold. Alex Bilodeau of Rosemere, Que. dislodged ex-Canadian and all-around jerk Dale Begg-Smith from the top of the podium, and Canada’s gold drought on home soil was over. Just like that. “The party’s just starting for Canada,” he said. The downtown core was suddenly as packed with happy people as it had been since Vancouver won Game 6 of the Stanley Cup final, way back in 1994. It could still all go sideways; three medals are just a start. And there are still problems aplenty that need to be solved. But it doesn’t feel as gloomy, just now. At Vancouver’s Winter Olympics, it’s starting to feel like spring.”

“My contact mentioned the average sale price of this realtor must be around ~500k for past year. Definitely not fitting the “rich china” profile.”

We know that locals have speculated on Vancouver RE while convincing themselves that Asian investors want to buy here, but we still aren’t really able to quantify the direct effect of Asian money coming into our RE bubble. -vreaa

From the Globe and Mail story ‘Chinese investors eye Canadian housing boom’, 14 Feb 2010 7:08 pm

“While Chinese residents have long looked to Canada as a site for their capital, and while they have been buying steadily in the Vancouver and Toronto real estate markets for years, the combination of a clampdown at home and a blazing hot market in this country is spurring even more interest.”

“The prospect of any sort of slowdown makes a pool of potential overseas buyers that much more attractive to [Canada’s] real estate industry.”

“To tap into the demand, Century 21 will unveil a new Chinese version of its website this week, the first major real estate company to do so in Canada. The site is the cornerstone of a strategy that will see the company increasingly marketing properties directly to consumers in mainland China. “Right now, our focus is on serving Chinese clients in Canada,” said Mr. Lawby, who is also president of Century 21 Asia Pacific. “However, a byproduct is that Canadian listings will be more visible to buyers from around the world … there’s always a need for a safe haven to place money and invest.” Vancouver agent William Nip estimates he sells 40 properties to Chinese nationals each year, a number that has increased every year since he started dealing in property 17 years ago. So far this year, most of his clients are looking to spend up to $2-million on premium properties.“The bubble in China is already very big, so the government is encouraging them to take their money and spend somewhere else,” said Mr. Nip, who works at Sutton Group West Coast Realty.”

gse36 on RE Talks 14 Feb 2010 6:09 pm commented on the above article –

“It would be really nice to quantify things though — rather than just speculation, buzz, and anecdotes. [I’ve seen data from] landcor, but I’m not sure how accurate that is (i.e. don’t know how the figures are collected, and whether this is reliable, because,  if it is, foreign ownership is minuscule. One of my realtor contacts works in William Nip’s (the realtor mentioned in the story) office. He insists that the guy sold ~25 TOTAL (i.e. mainland china + non mainland china) last year on mls. So if he has sold over 40 (as stated in article) to mainland china people, then he must be doing off-mls stuff, like presales (which doesn’t capture the west side, richmond, and burnaby houses which china people are supposedly buying). Also, my contact mentioned the avg sale price of his must be around ~500k for past year. Definitely not fitting of “rich china” profile. Anyhow, to try to substantiate this, I went to William Nip’s website. The info I was provided seems consistent with [the above] as he lists 54 past sales, and none of them are super $$$ (avg price does seem to be 450-550k). And the mls #’s date back to like early 2004’s. He only has 6 active listings (which are not sold), and most expensive residential is $1.09M.”

“Although he could afford any house, he now lives in a rented condo overlooking the ocean north of Victoria. His strategy is simple: Wait a year or two and buy a lot more house for a lot less money in a post-bubble world.”

This from Garth Turner, on his own blog,, 14 Feb 2010

“Sunday afternoon [14 Feb 2010] I sat on a leather couch in the Empress Hotel speaking with a millionaire exile from the US. The guy now lives in a rented condo overlooking the ocean north of Victoria because – although he could afford any house – “I’ve seen this movie before.” He laughed as he said, “I would never have imagined before I came here that Canadians could be stupid enough to make exactly the same mistakes Americans did five years ago. I tell ya, this is like watching an old, familiar train wreck.” His strategy is simple: Wait a year or two and buy a lot more house for a lot less money in a post-bubble world.”

An Owner (& Wannabe Move-Upper), Foreseeing Price Moves, Debates Sell Versus Stay-Put

We suspect that the vast majority of such owners who have hunches about price drops will initially decide to stay, but that many will start to liquidate once price drops start, and, particularly, once the drops establish themselves fully (by dropping below the early 2009 trough). -vreaa

These two posts from sarenka at RE Talks 13 Feb 2010 11:14 pm & 14 Feb 2010 12:39 am

[Question:] “I have been living in my condo for a long time. I have it paid off. No more mortgage. I have a child so it would be nice to have a small yard so my child can play there. I believe that the prices will go down in the future. When? I don’t know. It can be a year or it can be two. There is no way I would buy a house now. I have been thinking about selling my condo soon. However, if I sell it, I will need to rent something. What would you do? Would you sell your paid of place and would you go to rent???? or would you stay where you are saving your money for a down payment when the market will go down so you can buy a house?”

[Answer:] “I like my place. It is in great location. It is very close to our works. We have 2 bedrooms so one more bedroom or den would be good. However, what if the market will not go down than I would be stuck renting. I am not sure what to do. Maybe I should just stay and see what will happen.”

“Overseas money is coming fast and furiously. I had 3 different groups of serious buyers from the UK at an open in North False Creek yesterday.”

This from thinktom at RE Talks 25 Jan 2010 10:38 am

“There are so many people coming to opens right now I believe the only thing that will kill this market is interest rates. I had 3 different grps from the UK at an open in North False Creek yesterday (yes, they said they were serious buyers). Also went to a multi-family 4 unit ‘open’ on W. 18th yesterday and there were about 8 grps waiting for the 2pm start time. And yes, overseas money is coming fast and furiously.”

“I had clients sell in 2003 because of the impending bubble.”

This quote from a realtor who may be making use of sarcasm. If so, “many a true word…” – vreaa

thinktom at RE talks 13 Feb 2010 11:09 am

“I had clients sell in 2003 because of the impending bubble. They might be right one day.”

“The ‘financial advisor’ STRONGLY ENCOURAGED me to get a supersized and unnecessary mortgage for a piece of lower mainland RE. He kept pushing.”

Mark Carney may be asking borrowers and lenders to be prudent, but we are hearing lots of stories suggesting that his pleas are being ignored. Here’s an example of a prudent customer and an imprudent lender. -vreaa

This from Vankouver at 12 Feb 2010 2:17 pm

“I’m an under 35er and I went to the bank yesterday to max out my rrsp and instead the ‘financial advisor’ STRONGLY ENCOURAGED me to get a supersized and unnecessary mortgage (for a piece of lower mainland RE), and if I didn’t….. I would end up hurting myself in the long run such that I may NEVER get a mortagage from a bank again ever!!! Despite me indicating that I had no desire to be in debt in this economic environment (for a number of highly practical reasons), the ‘financial advisor’ kept pushing. In the second attempt, he cited that home owners made 10-17% (on paper only) when the housing market here jumped up again…so I said, interesting but, people like me made about 50% buying and selling stocks in the market last year. After he saw he couldn’t break me, he finally let me get my rrsp sorted. Some advisor.”

Stephen Jarislowsky – “I am convinced there is a housing bubble in Canada, fueled by government measures that encouraged consumers to take on debt.”

Who to believe? A successful investor growing cautious of identified risk, or a Minister of Finance trying to keep things afloat, with other peoples’ money (yours!), until the next election? -vreaa

This from, ‘Jarislowsky ‘Convinced’ Canada Has Housing Bubble’, 12 Feb 2010

Stephen Jarislowsky, chairman of Montreal-based investment adviser Jarislowsky Fraser Ltd., said he is “convinced” there’s a bubble in Canada’s housing market, fueled by government measures that encouraged consumers to take on debt. “They have basically encouraged people to buy houses based on cheap mortgages,” Jarislowsky, 84, said. “That has created the opposite effect of what was desirable.” “I am convinced there is a housing bubble in Canada.”

Jarislowsky’s investment fund owns shares in Canada’s four biggest banks, including Toronto-based Royal Bank of Canada. The comments by Jarislowsky, who is one of Canada’s wealthiest investors with a fortune worth C$1.85 billion ($1.8 billion) according to Canadian Business magazine, contrast with the view held by Finance Minister Jim Flaherty, who sees “no clear evidence” of a housing bubble.

“Debt is invisible but your beautiful home and toys are there for all to see.”

This gem of a bubble quote from Krashproof at (12 Feb 2010 6:44 am). We couldn’t resist archiving it. –

“Debt is invisible but your beautiful home and toys are there for all to see.”

“I used to work at CMHC, as senior advisor to the VP Finance. The debt owed by CMHC is additive to the national debt, and the entire CMHC operation is off balance sheet to the Government of Canada. As such, this constitutes financial statement fraud.”

Lending standards in Canada have been far too easy for far too long. Artificial stimulus to any market always, always, comes back to bite. -vreaa

This stunning insider account of the consequences of the CMHC from commenter howstoll 12 Feb 2010 11:18 am, after the Financial Post article ‘Canada Moral Hazard Corp.’ by Peter Foster 11 Feb 2010

“I used to work at CMHC, as senior advisor to the VP Finance, and as Asst. Chief Accountant, responsible for producing annual financial statements. The debt owed by CMHC is additive to the national debt, and the entire CMHC operation is off balance sheet to the Government of Canada. As such, this constitutes financial statement fraud. For example, the MIF, which is funded by premiums on long term mortgages, is owned by the Government, administered on its behalf by CMHC, but is not actuarially valued. This too is additive to the liabilities of the Government of Canada. Once upon a time, the NEP resulted in collapse of the Calgary real estate market, and CMHC ended up with something like 10,000 houses. I sat in on a meeting where big Red (Raymond Hession) told the auditor that these should be sold at any price to get rid of them, and of course the resulting costs were borne by the MIF. So much for parliamentary control over spending. CMHC, which appears to be run by the Finance Minister and his minions, should stop backstopping lending institutions, drop the amortization to no more than 25 years, set conservative borrowing standards for MIF-insured mortgages, and wind down its lending portfolio. The bottom line is that the national debt (and deficit) is severely understated, and the question is where does the AG on all this outright misrepresentation? The Liberals were never this bad, and that’s saying something.”

The Froogle Scott Chronicles: Mortgaging Our Souls In Paradise – Part 4: Raise or Raze — Prelude

Songs. Buildings. Food. Books. Houses. People. When we lose respect for things, our respect for each other is in jeopardy. During booms we see flagrant examples of misallocation of resources. Easy money fosters and rewards the ‘fast-and-loose’ mindset. People spend and destroy in ways that they wouldn’t during more measured, prudent, and thoughtful times. Individuals who would usually be careful may be lured into taking on debt, and spending, in ways that would be unimaginable for them under more typical market conditions. The result is wasted resources; both material and human. Can we be mindful users? -vreaa

Part 4: Raise or Raze — Prelude


No, the house depicted above is not that which belongs to Froogle Scott, but it is in his neighbourhood, and was demolished at the same time that he and his wife were undertaking major renovations on their East Vancouver house.

Next week, in episode 5 of our series, Froogle Scott will look at how the eight-year real estate boom in Vancouver, and the associated renovation and construction mania, have changed the face of his neighbourhood. This week, he offers the above photo-montage as a prelude to next week’s story. Click on the images for full size photos.

Vancouver Sun Grade 8 Essay Editorial – “There isn’t a housing bubble. The problem is not high house prices but low incomes. Or high taxes. Or something like that. Yeah! that’s right, something like that!”

An editorial in The Vancouver Sun 11 Feb 2010 reassures us that there isn’t a housing bubble in BC, and suggests that the explanation for the outrageously high price/income measure is simply that incomes are too low. Incomes would to rise by a factor of 2 or 3 for housing prices to make sense, but The Sun doesn’t get into any details as to how this could happen. They hint that taxes should perhaps be less burdensome, an ironic observation given the levels of provincial and federal debt, and the high likelihood of increases in taxes going forward. At tincup (11 Feb 2010 8:08 pm) pointed out that the editorial reads “like a grade 8 english essay.” -vreaa

Excerpts –

No policy change is needed to prevent the housing bubble: There isn’t one

It’s not clear what problem Canada’s chartered banks want the federal government to solve by toughening mortgage rules. But the Big Six are urging Ottawa to take measures, such as raising the minimum down payment and shortening the maximum amortization period, to avert a U.S.-style bubble and bust and the broader economic consequences that would bring about. However, there is no bubble — Canada Mortgage and Housing Corp., the Bank of Canada and the federal finance department all seem to agree — and an ill-timed move to dampen the housing market could set back the economic recovery.

To be sure, housing in Canada is expensive. The 6th annual Demographia International Housing Affordability Survey released last month found only five markets in Canada that it described as affordable, meaning the median price was three times the median income or less. Vancouver’s multiple was 9.3, the most unaffordable of the 272 markets covered. Perhaps the problem to be solved then is not high house prices but low incomes. In 2008, the average Canadian family earned $71,764 and paid 44 per cent of it in taxes. That’s more than the proportion of income spent on food, shelter and clothing combined.

Bear Baiting – “It’s the whole tone the bears take when presented with a good deal. This home couldn’t possibly be priced in my range because, it’s a dump, it has two alleys, it’s close to commercial buildings, yadda yadda yadda.”

Those bullish the market are cajoling cautious prospective owners by claiming that they simply don’t have the fortitude to buy, or that they have over-inflated and unrealistic ideas regarding the quality of housing they deserve. -vreaa

Main Photo: For Sale: 625 E 24TH Avenue Vancouver Fraser VE : Residential Detached

eyesthebye at RE Talks 9 Feb 2010 started a discussion headlined “Great Deal on this SFH in Main area” by referencing the above house (625 E 24th Ave; built 1910; 1490 sqft + 800 sqft unfinished; 33×122 ft lot; asking price $679K) and claiming that it was a “great deal”, that ‘sweat equity’ would add $300K-$400K to its value, and also offering to bet that it will sell for $100K over ask. Debate as to the desirability of this property ensued, regarding construction quality, age of the structure, neighbourhood, proximity to commercial area, and even the property’s Feng Shui. At that point the original poster objected to all the objections by saying: “It’s not just the discussion itself – it’s the whole tone the bears take when presented with a good deal. Like argufying themselves out of the market. This home couldn’t possibly be priced in my range because, it’s a dump, it has two alleys, it’s close to commercial buildings, yadda yadda yadda. If prices were 50% cheaper bears would still talk themselves out of buying somehow” and “This home might be [only] a half great deal to you – but your opinion doesn’t coincide with this market. Most buyers would probably tell you that being able to buy a decent home under assessed value constitues a great deal – at any time.” Poster dot com refugee pointed out that the house seemed “bloody expensive”, to which jimtan replied “Move to Windsor! You’ll love it there!!!”.

“As an accountant I see lots of financial information. People who earn $40k per year shouldn’t have $700k in debt. They’ve taken out mortgages to buy principal residences, and then added a couple of rental properties for good measure.”

From anonymousAA at 9 Feb 2010 11:10 am

“It’s tax time, and as an accountant I see a lot of financial information. I really don’t like what I’m seeing. Excuse me, but people who earn $40k per year really shouldn’t have $700k in debt (and that’s just the mortgages!) And it’s not just one or two clients, it’s quite a few. They’ve taken out these mortgages to buy principal residences, and then added a couple of rental properties for good measure. Ever get that sick, worried feeling in your stomach? Yes, this would be one of those times.”

Visual Group Anecdote – 50% of Construction Jobs Will Disappear

Employment growth in BC over the last decade has been solely related to the housing bubble and the closely associated Olympic construction projects. At one point in 2008, the number of individuals involved in construction represented 250% of what one would expect under more normal market conditions. This chart is from the indispensible local RE blog, Housing Analysis, run by bloggers jesse and mohican. In a 7 Feb 2010 post, they predict that, with “the continued completion of construction projects through the spring and summer”, the number of construction jobs will drop from current 200K to the 2001 levels (100K), very rapidly. We agree with this outlook. -vreaa


Victoria – “And you think we have not created a casino mentality?”

This anecdote is third hand. It comes from a speculator in Victoria, and has already been headlined at, and commented on, there, by Garth Turner. It deals, however, with a sentiment that is so seminal to the Vancouver bubble that we have felt moved to archive it here. -vreaa

“I bought a new condo, 2000 sq ft, facing the ocean on ocean frontage in 2007 for $1,200,000 A rental agency has advised me not to take short term tenants since possible damages to the condo may deflate the value. I partly financed by taking a conventional mortgage on my present home property for $875,000 prime minus .69%. Current rate is 1.56%. My home property is appraised at $1,700,000 (2007).(Prime ocean front). I rejected an offer of $1,600,000 in 2008. The market is firming up again in the Victoria area. We intend to move to the condo when the house is sold. My question: I would love to deduct the mortgage interest on the condo! How can this be done?”

[Garth Turner comments – “Just to put this in Dick-and-Jim terms for the feds: Guy with inflated property borrows 50% of its value to buy a spec property with 72% financing. He is able to get a mortgage at 1.56%, which is the current rate of inflation, which also means the money is free. Guy is a tool. His action serves only to pump up real estate values further, thanks to absurd interest rates, orchestrated by the Bank of Canada. He now wants to deduct the interest on his free mortgage money from his taxable income, which means other taxpayers (who don’t have $2.7 million in real estate) would pay half his costs for him. And you think we have not created a casino mentality?”]

“I’ve been following the Kitsilano listings in Van since 2007. They normally hover between 95-120 units on the market for any given month. Today= 156.”

From CoB at 6 Feb 2010 3:14 pm and 8:33pm – “I’ve been following the Kitsilano listings in Van since 2007. They normally hover between 95-120 units on the market for any given month. Today= 156. … In 2007 we had started the process of buying a condo in Kits. But then we came to our senses and kept renting. I don’t know what the surge of listings means. I have noticed that most of the units have jacked up their prices … only 27 today under 425K. I’ve been using ‘425K’ as my over/under benchmark for the land transfer tax threshold. Several of the properties currently on MLS have been there for months and aren’t exactly flying off the shelves. We had two units in our condo building for sale recently (330K- 1 bed;  419K, later reduced to 379K, for a 2-bed) both units took +60 days to sell and I don’t know what they sold for. We’ll keep renting for half the cost of buying.”

Bob Rennie Selling Cut-Price Condos in Seattle – “We’ve all been waiting for yesterday to come back. It’s time to make business decisions.”

For Vancouver, ‘Yesterday’ [the peaks of 2008] did miraculously come back [the peaks of 2009-2010], but basic principles will reapply themselves, and yesterday will become yesterday again. -vreaa

Excerpts from the Seattle Times ‘Sunday Buzz’ 30 Jan 2010 10:04 pm (third story on the page)

Escala, a 31-story downtown luxury condo development completed last fall. Now it’s … dropping its prices.

“We’ve all been waiting for yesterday to come back,” said Bob Rennie, whose firm took over marketing of the 269-unit tower at Fourth Avenue and Virginia Street in November. “It’s time to make business decisions.”

Just five units have closed at Escala, according to county records. Rennie says 67 more buyers are under contract — but he knows that in this market, that doesn’t guarantee much.

They’ll all be contacted over the next few weeks and offered reduced prices as an inducement to stay, Rennie says without giving specifics.

Meanwhile, the sales center has shut down. It won’t reopen until everything’s sorted out, perhaps by mid-March. “We’re trying to stabilize the building,” Rennie says.

More “Got Rich Off Vancouver Real Estate” stories – “Glad he’s done well and hasn’t changed his stripes. “Smarter” people would have sold it or developed it far earlier.”

rofina at RE Talks 3 Feb 2010 6:22 pm“My parents are a pretty typical Vancouver RE success story. They bought multiple properties at a reasonable time. Their principal residence has tripled in value in the last decade, this property alone makes them paper millionaires. All their rental condos are up a ridiculous amount, and all rent for cash-flow. Their outstanding mortgages are minimal, and really make little difference on the bottom line. The ironic part? They are very bullish people, to them Vancouver RE can do no harm. This is ironic for a few reasons. They purchased a NV property in 92 or 93, three years later they needed to sell it to raise capital for a new PR, they were unable to sell at a 20% discount.”

thinktom at RE Talks 3 Feb 2010 7:20 pm“I have a friend who paid $800k for a Point Grey Property and live in the crappy house for a while. Sold the lot, essentially, for $3.2M a few years later. That’s about the best one I can think of for a one-time transaction.”

RiskArb at RE Talks 3 Feb 2010 11:25 pm“Dumbest guy in our grad class in high-school…. we studied on exchange in France and he couldn’t find Vancouver on a map to show our French classmates. Also notorious cheap-ass who would scrounge for pennies underneath the football stands . Worked as a security guard back then and still does now. Anyways, he worked his butt off during school and put down ~$50,000 alongside his brother into an acreage in Surrey near/beside King George Hwy. Was a tear down home on agricultural land (ALR). This was during the NDP days with Glen Clark at the helm…. and Surrey was the sh*thole par excellence. Here’s basically what happened in the ensuing 7 years:
Year 0: ALR acreage with tear-down house. Sits vacant
Year 2: Removed from ALR and zoned for 2 single-family houses
Year 4: Rezoned from single-family towards higher density/multiplex (3 or 4 lot potential I think)
Year 7: Zoned commercial / strip mall
The guy and his brother just let it sit because they had no clue how to develop it and just wanted to hold it. As of 3 months ago they hadn’t sold it yet but had offers north of $3mm. I don’t know even think he ever formally listed it and could probably get more than that via a competitive process. So I think he’s gonna list it pretty soon….. and he told me that once he sells it, he’s finally gonna get a decent car – A VW Jetta. Glad he’s done well and hasn’t changed his stripes. “Smarter” people would have sold it or developed it far earlier.”

gpdu at RE Talks 4 Feb 2010 4:53 pm – “I met a couple in their seventies a couple years ago. The gentleman was a engineer at BC Hydro. He bought a 20 unit building in Van West, for $170,000 and is still holding it, in the 70’s. You figure how much it is worth now.”

RiskArb at RE Talks 6 Feb 2010 12:43 am – “I know one couple that started with 1 rental property investment about 17 years ago. Every few years they’d sell, pony up a bit more of their savings and move on to something bigger. Now they’re retired, have two 30 room apartments (those 4 level buildings that take up half a block)and act as the property managers doing the upkeep, maintenance, lawn etc.. They’ve got a funny Keyser Soze shtick going on whereby none of the tenants know they own the property… they’re just the friendly ‘fix-it’ people. And I know at least 3 other families, all educated immigrants working as accountants/engineers who did the whole “develop, live, flip” routine every 5-7 years…… but I don’t want to extol their savvy as 2 of them don’t pay nearly enough taxes.”

gpdu at RE Talks 6 Feb 2010 11:51 am“I think I can tell my story. I started by buying a duplex in Surrey in June 2002. There are four units in it. I sold it in 2006 after the price doubled, netting $250K. I paid off the mortgage on my primary residence and sent my daughter to private school. I bought almost every year after that, and now have a total of 30 units, in the Fraser Valley, Northeast BC, Alberta, and Texas. I never bought closer than Surrey because of the cash flow situation.”

Happy Bear – “By renting my West Side house instead of buy it, I’m saving $3500 – $4000 every month”

VRENGD at 5 Feb 2010 12:30 pm

“I’m off to New York City for the weekend. You see, by renting my West Side house instead of buy it, I’m saving $3500 – $4000 every month (depending on how much repairs and maintenance the landlord has to do in particular month). I take that money and live like the rich man I am. I go to New York every month for a dose of art, culture and shopping. (Since I can’t live in a world class city, I visit one often). Then I take $1000 or so every month to top up and annually max out my RRSP investments. The only problem is, all my friends are owners. They have no money to do anything! Bears don’t live in basement suites. They live in houses and they live it up because the bears have the cashflow. The funny thing is, that Bulls think they are smart paying 70% of their income to the Bank. Have a nice life slaves!”

“lying on top of a building the clouds looked no nearer than when I was lying on the street”

From an article by David Ebner in The Globe and Mail 3 Feb 2010 8:15 pm“At the corner of Cordova and Burrard, a one-line poem by British artist Liam Gillick wraps the facade of the new Fairmont Pacific Rim. The 60-centimetre-tall steel letters repeat for 17 storeys: “lying on top of a building the clouds looked no nearer than when I was lying on the street”.

We like the meaning and the sentiment, but we’re unsure about the business model, circa 2010. -vreaa

“In the early 80’s I was working in Vancouver. A friend offered me his two-bedroom rancher in Marpole for $135,000. At that time I was making $36,000 a year and interest rates were around 12 percent. I didn’t buy, then house prices started going up and I was left behind.”

Housing prices have outstripped incomes. This is one of the fundamental tells of a bubble market. -vreaa

This from Gordon C. at 5 Feb 2010 10:24 am

“In the early 80’s I was working in Vancouver. A friend offered me his two-bedroom rancher in Marpole for $135,000. At that time I was making $36,000 a year and interest rates were around 12 percent. I didn’t buy, then house prices started going up and I was left behind. I gave up on ever owning a home and instead went back to UBC and later travelled through North America. If I had to do it all over again. I would do the same thing, except study a little harder and leave Canada for the states. I certainly would not want to be strapped to house payments in my 20’s for 25 years. My payments would just be ending now.”

Not much of a name added (11:11 am) – “Funny thing is, that house is probably worth over a million now and incomes are at about $60-70k. Incomes have not kept pace with RE prices.”