Undead Market – “I have a creepy feeling things are heating up again.”

This by e-mail to VREAA from MarKoz 20 Oct 2010 – “A co-worker has a house in Coquitlam which she listed for sale in the spring. It lingered for sale without an offer for 3 months. She just re-listed and it sold in a week and a half. I have a creepy feeling things are heating up again. Open houses and “sold” signs all over Kerrisdale as I drove through on the weekend. I live in the Main area and am surrounded by holes in the ground where older houses (which were listed at $750K+) were demolished to make way for new builds.”

6 responses to “Undead Market – “I have a creepy feeling things are heating up again.”

  1. As I mentioned last week, this market is far from dead for those that have bags of cash just sitting around collecting dust. For all the others still recovering from debt overload incurred in the last 10-20 years, the nightmare is only beginning. In my neighborhood there are at least a dozen new homes (all McMansion style with min starting price of $1.25M) being built within a 2 block radius by either Chinese or E. Indians. We are not talking HGTV Flip This House here. (this type of activity is still appears to be non existent for the most part). Most of my associates in the RE or financial industry would confirm that these two ethnic groups in particular are literally scared $hitless about runaway inflation. Those that are cash poor and/or in debt up their eyeballs could wind up being priced out the market forever (for all the wrong reasons) and/or crushed by rapidly rising interest rates and costs for food, basic materials, fuel, utils etc. if these folks are correct. Of course, if they are wrong and we are ultimately headed for many years of Japanese style deflation, then many of these same folks will end up being underwater and stuck having to service a massive debt load until the end of time. Either way, the gap between the HAVE’s and HAVE NOT’s widens.

    • The thing to keep in mind with these reports is that a lot of times people make these plans a few years out. Even something that only NOW breaks ground could have been in the works (and financially comitted) for much much longer.

      As such, the current building activity is not really an indication of a healthy / working market, it could just be the “breathing out” or “long tail”.

      A future indicator would be building orders and land sales as well as the difference between asking and selling price.

      But as others have pointed out. Markets are sticky on the way down, mainly because many sellers hold out as long as they can to limit their losses.

      I still believe the real pain will not start showing until spring and by 2012 onwards (when a lot of mortgages will start resetting) we will truly see how different it is here.

    • If hyperinflation is really going to be the problem, they should live in a tent, buy shotguns and use their lot to grow a garden and keep chickens.

  2. And meanwhile, in the outskirts and the outlying areas of Vancouver, things are so clearly on the way down. Listings are languishing for months and entire seasons in spots like Chilliwack, Abbotsford, Squamish, and even as close as Langley, and price reductions of 10% and 20% are not at all uncommon – in both “good” neighbourhoods and bad. Add to that what’s happened in the Okanagan and Vancouver Island over the past year or so, and it’s easy to see the humungous contrast between the utter insanity of Vancouver/Richmond/North Shore and anything that lies more than thirty miles away from Robson Street.

  3. Update: My co-worker tells me she dropped her price substantially from what she listed it for in the spring. She is selling to buy new smaller place so she is in good shape. She wasn’t concerned about lowering her price since everything she is looking at buying has gotten cheaper too.

  4. Squamish, Van Isle, OK, and a lot of points in between are overbuilt, over leverged, and on the downslope.

    The first time I realized we entered a new age, was 2007, when I saw tracts of homes in Nevada being built, and I thought….” who will live here, in this miles from nowhere place…”?

    Well, the answer became clear – no one.

    There is a creeping feeling that all is not well under the floorboards, and people are really worried about D E B T, here in BC.

    Bueno suarte amigo.

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