Married couple; Combined Income 110K; Bought new condo in Surrey 2009; Cancel dinner with friend; Visa maxed out; Cable bill used last of their cash.

From T at VREAA 22 Mar 2010 10:31pm

“I have a friend who just got married last year. He and his wife are both employed by Coast Mountain Bus Co…so well paid by average standards…combined income of over 110k per year.
After they got married they bought a new condo in Surrey and furnished it. I was suposed to go for dinner with them tonight, but they had to cancel because they can’t afford it due to the cable bill taking the last of their cash out of their account and all their visa’s being maxed out. Boy am I a happy renter.”

3 responses to “Married couple; Combined Income 110K; Bought new condo in Surrey 2009; Cancel dinner with friend; Visa maxed out; Cable bill used last of their cash.

  1. I am also a happy renter but I question the wisdom of putting much value on anecdotal evidence. For instance, say the couple in this post had just made up an excuse because they had something better to do that night. I am not suggesting that this is the case here — just suggesting that anecdotal evidence is not particularly reliable as we can not know all the possible motivations people have for saying what they say. Words and appearances can sometimes be quite deceiving.

  2. vreaa: here are some anecdotes for you. None are either fantastical or fantastic. They just… are. We see what we want to see with anecdotes. Even with prices high and interest rates low, most people who buy now — or have bought in the past 5 years — will be fine. There will always be stories of hardship and woe; it’s the frequency of these sad stories, not the sad stories in themselves, that will shape the market and it’s hard to resolve frequency of occurrence from a set of admittedly extreme anecdotes, by definition.

    Friend bought 2br Burnaby condo presale in 2005 for ~$300K. Moved in 2008. Parents had to co-sign the mortgage — 35 or 40 year term. Unionized job making probably $25-30/hour on average $60K/year gross. Still making his payments, took on a boarder and things are going well. His income is stable and interest rates are low (he’s on variable) so no pain on his horizon.

    Family friends bought townhouse about 8 years ago in Vancouver. Both work for large banks so they’re likely close to $200K gross income. Sold their townhouse for (I’m guessing) around $150K profit and moved to $900K 5-year-old SFH. They found MAJOR plumbing problems and spent well over $100K to clean it up. Even still, with low interest rates and little discretionary spending, they have been able to afford the hit.

    Young couple with 1 year old baby were renting a townhouse but found same sized place in Port Moody for less than the cost of renting in terms of current mortgage rates. They wanted to own and they felt their jobs (legal aid and unionized union office worker) were secure enough to get into the market. They are likely around $110K gross income. Low interest rates were the major driving force for them to decide to buy. They elected for a 5 year fixed rate.

    Real estate agent and wife bought townhouse in PoCo in late 2007. 2008 came and he started hurting for business. Had to take up other jobs to afford the mortgage and had parental support some months. 2009 came and things were A-OK again. He made close to 6 figures income last year and paid down the mortgage in lump sum by a couple of $10Ks. 2008 scared the crap out of him and, even though he is optimistic, he was uncomfortable how exposed he was near the end of 2008 and is unwilling to go through the same agony again.

    Common thread from these anecdotes? Low interest rates.

  3. Thanks for the comments, nodnub and jesse.
    I’m the first to admit the limitations of anecdotes, and jesse makes an excellent point regarding the possible bias in only extreme anecdotes being voiced. I try to collect all kinds of anecdotes in my trawling efforts, bullish/bearish, successes/disasters; but it is true there is almost certainly going to be bias of various sorts in what we see posted on the web.
    Still, they are what they are, and, in that spirit, I continue to collect them here.
    Thanks, particularly, jesse, for the anecdotes in your comment. I will headline each of them to ensure they’re seen.

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