Bingo! – “I’m sick of the jizzbags who enjoy the benefits of renting instead of buying. I own a place: I’m a quarter-million dollars in the hole; I pay $250 a month to my strata; if I move, it’ll cost me thousands of dollars in realty/transfer/mortgage fees. Renters avoid all of this by living in someone else’s property and letting the landlord assume all the risks that come with ownership.”

As the market turns and then implodes, we expect all players to become acutely aware of the disadvantages of owning and the benefits of renting.  It is somewhat ironic that the Westender titled the following letter ‘You rent, you risk’.  -vreaa

From ‘Frank’ in this week’s edition of the local ‘Westender’ newspaper [24-30 Jun 2010], as quoted by bridgeman at vancouvercondo.info 28 Jun 2010 10:20 am –

“I’m sick of the jizzbags who enjoy the benefits of renting instead of buying a place and then won’t accept the downside- that is, they might have to move out if their landlord needs to renovate the place. I own a place: I’m a quarter-million dollars in the hole; I pay $250 a month to my strata; and if I want to move, it’ll cost me thousands of dollars in realty/transfer/mortgage fees. Renters avoid all of this by living in someone else’s property and letting the landlord assume all the risks that come with ownership. When the tide turns and it’s time to go, they can bitch and moan and call the CBC “Go Public” hotline, or they can do what I did: accept the unpredictability of renting, take their two months’ notice… and buy a place. Or keep renting and stop complaining.”

“I buy three, and my husband gonna buy three.” – Yaletown Speculator, 2004

A lady at a pre-sale promotion for the development ‘Yaletown Park’, in 2004, uttered words that are now immortalized as representative of the Vancouver RE bubble: “I buy three, and my husband gonna buy three.”

[Thanks to hatsujoki for extracting the clip from Greenhorn’s full context clip here. And thanks to discussants at vancouvercondo.info for initiating the search for this gem. -vreaa]

“I was a very senior employee at CMHC. Vancouver is a bubble waiting to really pop, view and beach notwithstanding.”

If we take this source as credible, this is an important opinion. Up to each reader to decide for themselves. -vreaa

John at businessweek.com 26 Jun 2010 8:05 pm –

“I was a very senior employee at CMHC (Canada”s Housing agency for those not Canadian), far more senior than Cameron Muir who was a local housing analyst. I constantly interacted with some of the top economists in the world. I worked in banking at a senior level and did a ton of mortgages. Have a masters in finance and international economics. As it stands we are a ponzi scheme locally. I also grewup in Vancouver. Cameron Muir is committing resume fraud in my opinion, a BA does not qualify one to be called an Economist by any stretch. As for all the real estate agents with a half baked grasp of investments and what is going on globally, frankly they are just salesmen who would sell to anyone. PS: Also worked investment banking and have seen some pretty nasty real estate deals go south. Vancouver is a bubble waiting to really pop, view and beach notwithstanding. Plus it rains most of the time, summer is one month!”

Businessweek – “To a visitor, it can seem as if Vancouver’s main industry is real estate, like it used to seem in Las Vegas or Orange County.”

‘Vancouver’s Real Estate Bubble Trouble’, by Bryant Urstadt [Businessweek, 24 Jun 2010], is a fine article. We’d like it even more if it highlighted fundamentals such as price/income and price/rent ratios that would unequivocally have telegraphed to outsiders our über-bubble status. But you can’t have everything. Here are some excerpts, anecdotes and quotes extracted from the piece. -vreaa

“Real estate is like a sport here.” – Tracie McTavish, president of Rennie Marketing Systems

“To a visitor, it can seem as if Vancouver’s main industry is real estate, like it used to seem in Las Vegas or Orange County. A newcomer, emerging from the gate for international arrivals, is greeted with three separate backlit billboards, all offering architects’ renderings of planned communities. Aspac Developments promises that they’re “building a legacy of excellence.” Concord Pacific describes each of its multiple developments as “a master planned world unto itself with park, schools, daycares, shops, restaurants, and resort-style amenities.” Polygon calls itself “Vancouver’s Builder of Choice,” and offers contact information in English and Chinese. Driving out of the airport and up Vancouver’s main thoroughfare, Granville Street, one notices billboards for brokers and advertisements on the backs of buses for Realtors and developments.” – the author’s experience of arriving in Vancouver.

“Some of the brokers in Vancouver think they’re rock stars. Many have made $500,000 or $1 million this year.” – Grant Connell, a broker with Sotheby’s, a former professional tennis player who spent years on tour. As of June of this year, he had 52 completed sales. “I sold the first for $4 million right when it came on. The second was a little later to market. It took a long time to sell for $3 million. There’s your 25 percent 2008 correction right there.” – Connell on 2 homes in West Vancouver he sold in 2008; and then on the resurgence in 2009 – “It was just spastic. [He points to a narrow lot right on the beach, a vacant slot between two nice homes.] That was a $5.2 million sale last year. They tore down the home but never built anything.” … “Throughout 2009 assignment letters were being flipped. The minute I actually heard a taxi driver talking about flipping assignments, I knew something had to give.”

“The type of price increases that we’ve seen in Vancouver are unlikely to be sustained. There might be some downside risk to that market.” – Robert Hogue, senior economist at RBC Royal Bank.

“My basic view is that we have a Canadian version of the U.S. real estate bubble. Not exactly the same, but close enough. We’ve relaxed lending standards, we have high unemployment, and we’ve reached a point of unsustainability in the housing market. I see real estate values falling shockingly.” – Garth Turner, financial writer and former member of Parliament

“Vancouver has had the highest prices in Canada for some time.  The geography is constrained. You’ve got the Pacific on the West, the mountains to the north, the U.S. border to the south, and land reserves to the east. That puts tremendous upward pressure on land prices. We also have solid population growth with a sizeable proportion of immigrants. There are high-net-worth Asian purchasers buying as investments, as second homes, or for satellite families.” – Cameron Muir, chief economist for the British Columbia Real Estate Association

“Yesterday we did an open house for a $3.5 million home, and six groups came through. They were all Chinese. I’d say over half our high-end listings go to China buyers.” – Grant Connell, realtor

“Broker Andrew Hasman sees 70 to 80 percent of his high-end listings go to mainland Chinese. He oversaw an open house recently for a $1.8 million home. Of 100 visitors, 91 were from China.”

“Spend enough time speaking with [David] Rosenberg, Hasman, Muir, and others, and prices in Canada seem to make a kind of sense, a rational response to market forces that just so happens to have pushed prices way above the norm.”

Connell acknowledges that things are overheated. “I see it more stalling than anything. Units are starting to sit,” he says, opening the door to a $3.8 million four-bedroom penthouse in Vancouver’s downtown, in the seven-year-old Classico building. Decks on two sides look out over the tankers moored in English Bay, and Grouse Mountain beyond. It is a second home, full of stainless steel, granite, and floor-to-ceiling windows. At $1,688 a square foot, it is well over Manhattan’s average. “This would have been snapped up just a couple of weeks ago,” says Connell. But he’s not overly concerned. “Everybody always has a take on Vancouver,” he adds, “and nobody ever seems to be right.”

Spot The Speculator #2 – Renovators As Speculators – “That’s what things cost now. The cost of everything is through the roof. But look at what you’re sitting on. A property that’s probably going to be worth a million dollars in a few years. That’s the reality of Vancouver now, and the reality of construction and real estate.”

In the last episode of the Froogle Scott Chronicles [‘Part 7: Renovation Nervosa Continued’, VREAA, 20 May 2010], we hear of a remarkable exchange that took place between Froogle and his general contractor, moments before they signed an agreement to commence work on Froogle’s home. –

“We talk about the cost, and he agrees that it’s expensive. “That’s what things cost now. The cost of everything is through the roof. Skilled trades are through the roof. But look at what you’re sitting on. You’re sitting on a property that’s probably going to be a million dollars in a few years. That’s the reality of Vancouver now, and the reality of construction and real estate. If you can’t make eighty to a hundred a year in Vancouver right now you’re a loser.” I’m assuming he means eighty to a hundred a year in construction or real estate. Neither my wife nor I make eighty thousand a year, so if he’s speaking more generally, he either assumes we make more money than we do, or the remark is just indiscreet.”

[Note that the contractor is implying that it is worth spending what seems to be too much money simply because the market is going to continue to make homes worth more and more. -vreaa]

Froogle Scott has now forwarded to VREAA some germane comments that relate to this very process. He did so in response to the recent anecdote that described a local couple who had bought and reno’ed an Eastside house that they were now selling [‘Spot The Speculator #1 – Speculation Disguised As Normal Behaviour’, VREAA, 26 Jun 2010]. Here are his thoughts on the speculation inherent in many renovations:

“I think you can add major renovations and homeowner custom building to the list of seemingly normal behaviours that have a hidden speculative component. I suspect the renovation and building mania that has swept through numerous older and established neighbourhoods in the City of Vancouver, and elsewhere in Metro Vancouver, has been largely driven by the same belief that RE prices would continue that rich rate of annual increase. And I’m not referring primarily to flippers, but rather to homeowners, like my wife and I, and the couple in the Sun article, who intend to live in their renovated or custom-built homes for years. You are much more likely to spend big on renovating a place or building a dream home if  a) you believe the money you spend today will eventually be returned to you, perhaps with a premium, when you do finally sell,  b) the increasing market value of your home puts a large home equity line of credit at your disposal, and  c) you see lots of examples of other people undertaking major renovation and building projects in your neighbourhood.

This dynamic has been at work on Vancouver homeowners, perhaps without some of us being fully aware. After all, most of us want a nice place in which to live, and have aspirations for what that place should be. But have those aspirations, and the pace at which we can achieve them, inflated along with the annual property assessment? How many people would spend $200K or $300K of borrowed money renovating their home, or $500K or more building a custom home (in addition to lot price), if house prices were flat for years, or slowly grinding lower? I wonder what the renovation and custom build business is like in some of those US cities that have seen massive price drops?

There seems to have been a self-feeding quality to the Vancouver RE bubble (all bubbles, I imagine) that powered at least some of the unusual price growth, which if not exponential, has certainly had far too steep an increase to be sustainable. Because of that self-feeding quality the bubble is perhaps inherently unstable. In some respects, the growth of the bubble has been enabled by the growth of the bubble. It hasn’t been based on a commensurate growth of fundamentals such as wages, or rents, or GDP.

It’s a bit of a chicken and egg argument about how a bubble first gets seeded and starts to inflate, but to return to major renovations or custom building dream homes, here’s a self-feeding sequence for consideration.

1. As houses prices start to rise you get less for your money. Many first-time buyers are forced to settle for older, smaller, somewhat dilapidated houses that they plan to renovate over time. The “dump,” that Fricker refers to in the article. Or the place my wife and I bought in 2003.

2. Not content to live in a dump forever, you start looking at ways to renovate, and what it might cost. At the same time, you’re surprised by the big jumps on your annual property assessment, and start to consider the following, probably deeply flawed, bit of personal financial voodoo: assessment price – mortgage amount = the amount of money you feel safe borrowing to renovate. Because, you reason, you could always sell post-renovation and recoup your investment.

3. The bank offers you a HELOC with an attractive rate of interest based on the steeply increasing assessed value of your dump.

4. You pull the trigger on a major renovation financed using the HELOC.

5. At some point you decide to enter the move-up market, or the custom-build market, by using your renovated home as leverage. You put the renovated home on the market for a price that reflects the general price appreciation in the years you’ve lived in the place, plus the amount you spent on the renovation, plus whatever else your realtor thinks you can wring out of an overhyped market. In the case of the couple in the article, $270K > $899K. (Not to pick on them. All Vancouver homeowners are currently forced to maximize return if they want to make a move within the city, because what they take with one hand they’ll have to fork over with the other.)

6. Someone buys at your bubble price of $899K, or more if there’s a bidding war for a nicely renovated character home in an established neighbourhood. You pay a bubble price for a move-up home, or a lot and a custom-built home.

And so it goes, or so it has gone. I happen to agree with those who think the end of the bubble is upon us.

What gets lost in all of this escalation is that nobody really _needs_ a majorly renovated home, or a dream home. For decades many people in Vancouver lived quite reasonable lives in modest homes that they maintained and slowly improved over many years — sometimes themselves, sometimes by hiring builders or tradespeople. $50K would have been considered a lot of money to spend on a reno. More than the median household income in Metro Vancouver in 1991 ($42K, Stats Can). Now $50K gets you a renovated kitchen. But in 2006 that median household income in Vancouver was still only $55K and won’t be much different today. So has a significant reno/custom build contribution to the bubble been made possible by the bubble itself, and the huge increase in leverage it put into the average homeowner’s hands? And is there something inherently unstable about this situation?

I’d suggest that the bubble hasn’t just been about hugely increased prices for existing housing stock. It’s also been about increased prices encouraging significant upgrading of the housing stock which in turn has been an important contributing factor to ongoing price escalation. A supercharger effect.”

Security, Protests, Waste, Charades – G20 In Toronto

Cost of security for the G8 & G20 summits estimated at $1 Billion.
Misallocation of valuable resources.

“She was struck by how many open houses signs there were in the area, but the thing that really caught her by surprise was that several realtors came up to them ON THE STREET and asked “What are you looking for?”

omega at vancouvercondo.info 25 Jun 2010 10:32 pm –

“I was chatting with a friend whose sister is looking for a condo in the Tinseltown area. Last weekend they thought they would pop into a few open houses. First she was struck by how many open houses signs there were in the area, but the thing that really caught her by surprise is when realtors (several in fact) came up to them ON THE STREET and asked “what are you looking for?”. She said it felt like she was in a developing country.”

“Frankly, I’m hoping for ‘Phoenix Style’ price collapse then I can afford a place in the city of my birth.”

Coal Harbour Resident at businessweek.com 25 Jun 2010 12:59 am –

“I live a 5 minute walk from the Classico bldg. It is nice but, like many of these condos, I don’t get the pricing. Even with the rich Chinese – and they have been flooding in for years – and all the drug money in the city…makes no sense. Frankly, I’m hoping for ‘Phoenix Style’ price collapse then I can afford a place in the city of my birth.”

Spot The Speculator #1 – Speculation Disguised As Normal Behaviour

The major driving force behind our bubble has not been absence of land, nor wealthy foreigners, nor the effect of the Olympics, nor the beauty of our city. Those factors have been more important indirectly, as stories that have driven local speculators to buy RE with extra-cheap borrowed money, anticipating never-ending price gains. Speculation has been the major engine driving the market. We believe that almost all RE purchases in Vancouver over at least the last 5 years have had a speculative component. By that we mean that the vast majority of buyers would likely not have stepped in to buy, to overbid, to take out massive mortgages, to buy second properties, if they had not believed that RE prices would continue to increase at 10% per annum or more. And that is the very essence of a speculative bubble: buyers paying higher and higher prices that are not related to the actual usefulness of the property, but rather based on the belief that prices will continue to rise. Speculation is as often covert as overt. It comes in various forms. A recent article in the Vancouver Sun, ‘Forecast is cool, but neighbourhood is hot’, by Tracy Sherlock, Vancouver Sun, 2 Jun 2010, tells a story that, on the surface, appears benign, but actually describes housing price speculation disguised as relatively normal behaviour. Spot the speculation. -vreaa

“Jan Fricker and her husband Steve Lott are confident they will soon find a buyer for their east-side character house. The house, at 431 E. 37th Ave. and listed for $899,000, is near Main Street, one of Vancouver’s hottest real-estate neighbourhoods. Fricker, 49, and Lott, 55, love the neighbourhood so much they bought an empty lot one block away in 2006 and built their dream home. Since then, they’ve been renting out the 2,400-square-foot 37th Avenue house, which also has a two-bedroom basement suite. They decided to sell the house because it is challenging to carry two mortgages and the market appears strong, Fricker said. Their confidence goes against the Canadian Real Estate Association’s lowered forecast for both sales volume and prices for 2011. Fricker and Lott have yet to have any written offers on their house, which has been listed for three weeks, but they’ve had lots of interest, with 50 or 60 people at each showing. “We’re pretty confident we’ll get it sold,” Lott said. “Land in the city is going to increase no matter what.”
They bought the house in 1996 for $270,000, a price, they say, that reflected the state the house was in at the time. “It was a dump,” Fricker said. “We’ve worked really hard on this house.”

Although both Fricker and Lott grew up in the suburbs — one in North Vancouver, the other in White Rock — a passionate commitment against commuting led them to the city. “We love living in the city. We have only one car and we ride our bikes and take transit. It’s really critical to us to live close enough in so that we can do that,” Fricker said. Fricker works in Yaletown and commutes via bus and the Canada Line, while Lott, who is an elementary school teacher, rides his bike to work.”

“My wife and I combine to make over $100K/yr. But because we have 2 kids in daycare and minivan payments we cannot afford a condo big enough to fit our whole family. So instead, we rent, for a fraction of the cost.”

south_slope at vancouvercondo.info 24 Jun 2010 9:39 am –

“I’m a journeyman electrician in my mid 20’s. My wage is close to what a nurse makes. My wife and I combine to make over 100K/yr. But because we have 2 kids in daycare and minivan payments we cannot afford a condo big enough to fit our whole family. So instead, we rent, for a fraction of the cost, and save a TON of money. If the market in Vancouver continues to sky rocket forever we will either continue to rent (and retire millionaires) or leave.”

Millenium Water Olympic Village – Reports Imply No Sales In Last 5 weeks?

An article today, 24 Jun 2010, at the CBC.ca tells of 11 presale buyers at Millenium Water who are suing to have their purchases cancelled. Excerpt – “The 473 remaining units went on the market in May and 36 have been sold so far, according to Bob Rennie, a Vancouver condominium marketer”

That’s fine, until you look at what Rennie said to the Vancouver Sun 17 May 2010 – “Bob Rennie, president of Rennie Marketing Systems, confirmed he made 36 sales in the two days, about double the number anticipated.”

This implies that no further sales have been made in the 5 weeks since 17 May. At this pace, the inventory at Millenium Water won’t get sold in the 2 years predicted by the marketers. In fact, if those presale ‘buyers’ successfully start giving back units (can anybody say ‘speculator’ and ‘moral hazard’?), who knows how long it’ll take? -vreaa

“They refuse to reduce their price because they will not sell it for “less than it’s worth”. This sounds familiar. The exact same words were uttered by my coworker in 2008. He sold his place for 20% under list 6 months later.”

exx at vancouvercondo.info 24 Jun 2010 11:17 am –

“The Port Moody and Coquitlam areas I watch are completely dead. I posted on May 11th about my friend trying to sell his condo in Coquitlam, at the time it was on the market for 30 days. It’s now nearing 90 days and 4 price reductions and still no takers. I haven’t seen any units in his building sell, though a couple have expired. Nor have any units sold in the building I’m in, though there are ‘only’ 6 compared to the 13 he’s competing with.

Our other friends are trying to sell their house in Coquitlam. Nearing 60 DOM, but they refuse to reduce their price because they will not sell it for “less than it’s worth”. This sounds familiar. The exact same words were uttered by my coworker in ‘08 – he sold his place for 20% under list 6 months later.

I’ve also been watching the two Port Moody towers on Nootka Way (Sahalee and Nahanni). They peaked at a combined 39 listings (currently 22 in Sahalee!) but they’re sitting at a combined 33 now. Where did those listings go? Craigslist. There are at least 10 rentals up on craigslist for those towers right now. I was looking for a rental in that area in May and there wasn’t much to choose from, now it’d be a tough decision.”

“I have many friends who own houses in Vancouver. None bought in the last 5 years, they bought what they could afford. I don’t see any of them in trouble in a market collapse. Unless we see a huge jump in unemployment, they’ll keep paying down their mortgages and forget about the pretend house value of 2010.”

Comfortable in a coma at greaterfool.ca 23 Jun 2010 12:36 am –

“Having sold out of Vancouver recently, I can’t imagine that market holding it’s prices. It’s beyond comprehension! That said, I have many friends who own houses there. None have bought in the last 5 years so they bought what they could afford. I don’t see any of them in trouble in a market collapse. Their payments aren’t suddenly going to increase! Unless we see a huge jump in unemployment, they’ll keep paying down what’s left on their mortgages and forget about the pretend house value of 2010. No-one I know has refinanced to buy toys. I don’t think we’ll see the re-fi carnage of the US. Unless suddenly we have mass lay-offs but we don’t have the big employers who could lay off 10,000.”

Asking Prices Dropping – April 11th, $2.14M; June 3rd, $1.98M; June 23rd, $1.85M

Inventory growth rate has slowed slightly, but price drops continue apace. -vreaa

MLS V822260, 4006 West 38th Ave, Southlands/Dunbar, 53 x 167 lot (8851 sqft), 2,016 sqft house (blurb implies knock-down).

Asking Price: April 11th, 2010 $2.14M; June 3rd, $1.98M; June 23rd, $1.85M. That’s about 15% drop in asking price over 10 weeks.

“I personally know 8 people with investment properties that are currently slightly above or slightly below their operating costs. A 10% change in the market would put all of them under. A 20% change or more would force a sale.”

Junius at vancouvercondo.info 22 Jun 2010 12:40 pm –

“I personally know 8 people with investment properties that are currently slightly above or slightly below their operating costs. Even a 10% change in the market would put all of them under. A 20% change or more would force a sale. This is coming. It is only a matter of time now.”

“I live in Vancouver and since I have a junk removal business I am in contact with proud house owners every day. Sometimes people just screw their lives up without much help.”

This anecdote from Spiro, headlined by Garth Turner at greaterfool.ca 21 Jun 2010 –

“I live in Vancouver and since I have a junk removal business I am in contact with proud house owners every day. But I keep my mouth shut. I didn’t used to. I was trying to warn them but after a while I realized I might be getting some negative feelings of my clients towards me by pointing out some painful facts. So I stop doing it. I realized that I should just let natural selection (on mental level) do its work. I came to Canada, Vancouver, from Eastern Europe. I am not one of those doomsday guys. But I’m shaped by experience. I’ve seen how crazy government policies can destroy lives. But sometimes people just screw them up without much help. At some point, because of that, prices might even go lower than 3 times the annual income. However, I fear that local and global economies will suffer so much that banks will be willing to loan to only few people. Not enough to take possession of all properties. What happens then? Eventually repossessed property goes to the issuer of the loan…the bank. The bank will try to sell it. What if that doesn’t work since there are few people around with good credit and a job that pays more than $10/h? The bank will become a landlord …renting its own properties? I don’t think they want to be in that business. That’s when I think properties will hit some ridiculously low prices.”

“I’m an expat who returned to Vancouver 2 years ago. We’re going back. The Vancouver property prices are over inflated, the people are unfriendly, the service poor, the transit is rubbish and the weather is crap. I’ve got to ask, what were we thinking?!”

Dede at VREAA 20 Jun 2010 7:01 pm –

“The cost of living is not cheaper in Hong Kong but availability of challenging professional jobs is more abundant and far better paid than in Vancouver with 17% the top tax bracket. I’m an expat who returned to Vancouver 2 years ago. We’re going back. The Vancouver property prices are over inflated, the people are unfriendly, the service poor, the transit is rubbish and the weather is crap. I’ve got to ask, what were we thinking?!”

“Today I did a return for someone who owns a house he’s renting out. The mortgage balance is $350k and he’s cash flow-negative by at least $400/month. The house is now for sale, for just a bit over the mortgage amount.”

anonymous456 at vancouvercondo.info 22 Jun 2010 1:01 pm –

“I’m an accountant, I do A LOT of tax returns, self-employed and employed, and I don’t often come across too many young people making over $60k. If I do, they have been in the workforce for at least 10 years, or if they’re lucky, they’re in trades. Today I did a return for someone who owns a house he’s renting out. The mortgage balance is $350k and he’s cash flow-negative by at least $400/month. The house is now for sale, for just a bit over the mortgage amount. His net self-employed income over the past few years has been about $15k. Yes, $15k. Oh and his balance sheet shows an overdraft in the bank nearing $100k. How did he get the mortgage? I have no idea, I guess it’s some fancy “self-employed stated income thingy”. It boggles my mind. And I really wish I could say that this is unusual case, but this year I have more clients who are in that position-drowning in debt, huge mortgage, moderate-to-low reported income (and if he DID have significant unreported income, why would he carry an overdraft balance of $100k, paying tens of thousands in interest?). Now ask me if I think the market won’t fall. People are leveraged to the max. This isn’t going to end well, the numbers say it all.”

BC Builder who believed BC RE prices “no longer made any sense”… as early as 2002.

john m at greaterfool.ca 19 Jun 2010 7:38 pm –

“A whole lot of people in BC are going to take a serious bath in real estate…and it never just started happening..it has been going on for years.. I know, I was a builder there until things no longer made any sense..(that was 8 years ago and look at the prices now)—greed and stupidity can not explain what has happened there…reckoning day is inevitable…….”

Bullish Business in Canada – ‘Our exceptional quality of life will take your breath away’ (as will our housing prices).

David Rosenberg, who is decidedly bearish the Canadian RE market,  today points out that never before has Canada been more business-friendly in comparison to the US  [21 Jan 2010, Breakfast with Dave]. Excerpts – “The downside risks and upside potential for Canada vis-à-vis the U.S.A. have rarely looked as compelling as is the case today.” … “Canada has been re-rated in eyes of the global investment community.” … “It is difficult to see, in this relative political setting, the Canadian dollar failing to remain in what looks to be a long-term bull market.”

Also released today, in the 28 June 2010 edition of The New Yorker, the Government of Canada business promotion ad shown below, featuring a picture of Vancouver.

Yes, this is potentially good for business in BC. And, if there was a closer relationship between fundamentals and RE prices in Vancouver, we’d see these stories as also being a reason to be bullish local RE. As it is, however, adding a modest amount of support to our foundations will not keep elevated RE prices that are resting on nothing but large volumes of fresh air. -vreaa

Small Town BC RE Tale – “My friends decided to hold off on selling their home to wait for the prices to go back up “in the spring, like they always do.” Hasn’t happened. They’re worried.” … “They say that now, they would not consider themselves middle-class anymore, that somewhere along the way, that’s been lost.”

bcgirl at greaterfool.ca 19 Jun 2010 9:09 am –

“I have a story about RE meltdown and the downturn of the wealth effect. My good friends, a couple who were my neighbours in the neighbourhood I sold out of in 2008, are experiencing the shift. They are in their early 60’s and might be considered geriatric by some. After I sold and moved to a nearby town here in the BC interior, they decided they would build a bigger and better home on a lot in the country. They bought the lot, built a rather deluxe workshop and went over the house plans with the builder. Meanwhile, RE prices in the old neighbourhood started to decline, but they decided to hold off on selling their home to wait for the prices to go back up “in the spring, like they always do.” Hasn’t happened, prices are down almost a third of what they were in 2008 in that little neighbourhood enclave. They cancelled with the builder and lost a sizable chunk of their deposit. The lot with the workshop is for sale and sitting on MLS. They won’t get the price they need to break even, and they pretty much know this but are hoping for a greater fool. Meanwhile, they are paying a mortgage for this lot, and really, this is becoming a struggle as they both work in their home-based business, and business is slow.

Back in 2008, the wealth effect from inflated RE values was running high. The party is definitely over in my old neighbourhood. On this blog [greaterfool.ca] we often discuss Vancouver, Calgary, and Toronto..the fact is RE is local and if you look to some of the smaller towns here in BC anyway, you’ll see advance evidence of the new reality. Since 2008, I’ve been renting in a new town with a lake and an artsy reputation…it’s different here according to the locals. Ummm…not likely .

As for my geriatric friends, they have only known RE appreciation with corrections from time to time. I’m pretty worried about them, and they’re worried too. They say that now, they would not consider themselves middle-class anymore…that somewhere along the way, that’s been lost.”

“I live in the Vancouver area and I drive around here a lot. I observe an astonishing number of condos still in the early stages of construction.”

Developers don’t seem to foresee any significant chance of a serious downturn. They have responded to high prices by starting new projects. -vreaa

Mister Obvious at greaterfool.ca 19 Jun 2010 1:39 pm –

“I live in the Vancouver area and I drive around here a lot. I observe an astonishing number of condos still in the early stages of construction. Many of them only large holes in the ground with cranes sticking up. Others are anywhere from 30% to 60% complete. Still other sites are only huge signs with pictures of happy young couples holding babies high in the air. These are generally found in front of old industrial locations or defunct motels and such. I see dozens upon dozens of these every day. Those developments where construction has begun in earnest (there are so very many) are crawling with tradesmen. The industry seem busy, busy, busy to say the least.

In addition, there are an equally mind-numbing quantity of recently completed projects that seem to be perhaps only one-third occupied judging by the amount of plastic furniture you can see out on balconies and furnishings visible through open blinds. My point is, there is a $hit-load of stock both recently built and coming rapidly down the pipe. I still see lots of ‘development notice’ signs notifying passers-by that yet another condo rezoning application is currently before city council.

Someone help me out here. Seriously. Will the majority of this speculative construction turn into derelict neighbourhoods and unfinished, boarded up hulks? Will the prices of these units fall far below the builder’s break even point in the next two years never to see a buyer? Are the builders so stupid they can’t see the trouble they are in?”

Stealth Supply Waits In The Wings

Most sellers still don’t think we’ve topped. What will the wannabe sellers described below do when ‘demand’ and ‘prices’ don’t ‘return’? When prices do drop more, they’ll turn to plan ‘B’: panic, then sell. -vreaa

eyesthebye at RE Talks 20 Jun 2010 11:59 am – “I know three homeowners who are taking their homes off the market and [are] waiting until demand/prices return before they list again.”

jesse1 at RE Talks 20 Jun 2010 12:33 pm – “I know four homeowners who pulled their houses off the market. But they all have multiple properties and will be listing four new properties in early July.”

‘Parking Money’ In RE – “Some investors buy real estate that doesn’t make sense on a fundamental basis, with the idea that they’ll stick some of their funds somewhere out of sight, out of mind, provided it’s safe.”

This form of investor would obviously be a stabilizing force in any market, if they truly do buy and hold regardless. But wouldn’t at least some consider selling if prices began to soften, then dropped further, and their capital consequently began to look less and less ‘safe’? -vreaa

Rob Chipman, local realtor, at his blog robchipman.net 19 Jun 2010 22:41 –

“I have investors who buy anywhere if its cheap, but there are also some who buy somewhere (i.e., Vancouver) even if its not cheap. New condos at SFU and downtown are recent examples. They don’t make sense on a fundamentals basis, but (anecdotally, based on new management accounts for me) there are people parking money in that sort of thing. Vacant land is in short supply in the urban areas, and Asian buyers I’ve run across want urban real estate. Poor use of ones resources is a matter of perspective, I think. There’s no denying that some investors buy real estate with the idea that they’ll stick some of their funds somewhere out of sight, out of mind, provided its safe. This makes no sense to someone looking for return, mind you, but someone looking to park funds, and looking at real estate as a vehicle to do it, likely has another part of their portfolio generating lots of returns. I’ve had plenty of Chinese owners with no mortgages who could not be convinced to re-mortgage and expand their holdings. It just wasn’t their real estate goal.”

“I saw a really great vanity license plate on a convertible Mercedes today down by the beach. The plate said “wy rent” and underneath the plate it said “I sell houses”.

We’d guess that this guy will have a generic plate within 5 years. -vreaa

nonymouse at vancouvercondo.info 19 Jun 2010 4:43 pm –

“I saw a really great vanity license plate on a convertible Mercedes today down by the beach. The plate said “wy rent” and underneath the plate it said “I sell houses”.

“I know of two families that have up and left Vancouver to go back to Hong Kong because the weather is so gloomy here.”

kwl at vancouvercondo.info 19 Jun 2010 2:43 pm –

“I know of two families that have up and left Vancouver to go back to Hong Kong because the weather is so gloomy here. One family is already back in Hong Kong and they are going to put their house on the market soon. The other family will most likely be selling as well.”

“A friend of mine bought a house in Tsawwassen, but still hasn’t sold his current one. Seems to be getting BS offers.”

NO-LYMPICS at vancouvercondo.info 18 Jun 2010 1:00pm –

“A friend of mine bought a house in Tsawwassen, but still hasn’t sold his current one. Seems to be getting BS offers.

A family member and their spouse sold a leasehold condo and paid $400,000 + for a house on a 33 ft lot in Ridge Meadows. The house had been on the market for a while. I think they have hit the perfect storm where the market has peaked and they are now in negative equity.

A family members friend from England was visiting, and discussed how their son’s 1st home is now in negative equity, ie dropped about 20% in value.”

“The Real Estate Board of Greater Vancouver is about to break its own membership record; it surpassed 10,000. There is nothing more predictable or more assuring that the Vancouver real estate market is about to tumble as the number of Realtors® in the business.”

Larry Yatkowsky discusses how numbers of realtors ebb and flow with housing cycles [yattermatters.com 18 Jun 2010]. Excerpt –

“There is nothing more predictable or more assuring that the Vancouver real estate market is about to tumble as the number of Realtors® in the business. The Real Estate Board of Greater Vancouver today proudly published that it is about to break its own membership record which on June 10th of this year surpassed 10,000.”

“We are not bitter that the sacrifices of home ownership in Vancouver are greater than we wanted to make. For us, the benefits of flexibility outweighed the pride of homeownership. We are moving to a larger rental space in the building we’ve lived in for seven years. We are now the second couple in our circle that have negotiated a similar arrangement.”

A couple diligently does the math and decides to continue renting. -vreaa

generation y at vancouvercondo.info 19 Jun 2010 12:31 am –

“After diligently working to eliminate nearly $70K in student loans, my wife and I are beginning our third debt free year. Demographically we both hold graduate degrees and our household income fluctuates between $140 – 170K per year. We live below our means:

– rent a car when we need one
– remained in a one-bedroom apartment after our daughter was born
– brown bag lunch most days
– follow a simple, cash-only budget
– brew our own coffee in the morning

In the time since eliminating debt, we’ve saved almost $150K. We began looking to buy real estate. We wanted to maintain our faux bohemian lifestyle, and Vancouver West seemed the best option. We began looking, and our finding was that a ready-to-live-in single family home in Vancouver West (North of 16th) began around $1.1M. We looked and crunched and after three months decided that we didn’t want to make the sacrifices required to own a home, including:

– becoming landlords
– sacrificing professional mobility
– staying home during vacation
– paying consumption taxes

We are not bitter that the sacrifices of home ownership in Vancouver are greater than we wanted to make. For us, the benefits of flexibility outweighed the pride of homeownership.

We are moving to a larger rental space in the building we’ve lived in for seven years. It is a professionally managed rental tower downtown. We have a positive relationship with the supers. In negotiating the move, we wanted a number of updates made to the suite. Ownership didn’t want to expend the capital. As such, we offered to pay for the renovations for a reduction in rent. Ownership agreed. The break even works out to ~42 months, and we’ve picked out the styles we wanted.

I write this because we are now the second couple in our circle that have negotiated a similar arrangement. As a business person, I know when dealing with another business (read, not an individual), I am working with known strategies that dictate margin, capital and cash flow. Thus, I was able to negotiate a mutually beneficial arrangement that distributed the risk such that I (the tenant) and the owner were happy. On July 1, we will move into an updated 1050 sq ft, 2 bed, 2 bath, 2 balcony apartment on the 22nd floor with unobstructed views of English Bay. Rent = $1700. I’ve taken a few stabs at comparing the rent to the hypothetical cost if we were to buy. My amateur numbers validate we made a good decision for us.

What I often don’t understand is the venom with which homebuyers / marketers are often attacked on this blog. [vancouvercondo.info] From my perspective, they are making the best decision for them. I realize many of the comments speak out against the onslaught of homeownership messaging. Yet, I heard the messaging, searched and decided that renting was the best option for us. However, the numbers were less of a factor than the soft benefits. I believe the soft benefits trumping the numbers will become more pronounced as more first-time buyers begin choosing what they need over what they can afford.”

“I’m a mortgage broker and I can tell you that almost nobody who owns goes back to renting. Most people perceive that as a total regression.”

Only a very, very small percentage of owners will anticipate a large fall in RE prices, sell their primary residences, and rent. If a larger percentage attempted to do this, the market would collapse by virtue of that supply. Thus, the vast majority of owners will ride paper profits up and down. -vreaa

Dwide_Schrude at theglobeandmail.com 18 Jun 2010 8:33 am –

“I’m a mortgage broker and I can tell you that almost nobody who owns goes back to renting. Most people perceive that as a total regression. My parents have lived in a 2800 SF house for 30 years. Do you honestly think they’re going to rent an apartment because of what a few people think about interest rates? Most people who own a house figure out a way to pay the mortgage somehow. Almost nobody defaults in Canada. There’s a reason CMHC made just under a billion dollars last year.”

Rental Agent – “People are selling $3-million homes and opting to rent.”

From ‘Homeowners sell, start renting instead’, by Steve Ladurantaye, theglobeandmail.com 18 Jun 2010 –

“Diana Mander of Royal LePage Northshore has worked in Vancouver’s rental market since 1989, and said this summer has been among her busiest. Things are usually slowing down this time of year, but a flood of local inquiries has caught her off guard. She’s more accustomed to dealing with families who are moving to Vancouver from other cities, not Vancouverites who are looking for high-end rental homes because they sold their own properties. “The strength of the local market is really quite a surprise,” she said. “People are literally selling $3-million homes and opting to rent. It’s definitely putting pressure on supply.”

“My best friend is a realtor on Vancouver’s Westside. He recently sold all 3 of his houses and moved his family into his parents’ basement.”

ibew-213 at theglobeandmail.com 18 Jun 2010 10:31 am –

“My best friend is a realtor on Vancouver’s westside. He recently sold all 3 of his houses and moved his family into his parents’ basement. 90% of his business comes from rich Chinese investors who mainly buy vancouver real estate just to park their money. And these clients are disappearing fast. So fast in fact he told me to “sell now or be priced out forever.” Those are scary words to hear from a realtor… “

Mainstream Media Continues To Rely On Industry Sources For Real Estate Commentary

At best, very shoddy reporting. At worst, calculated bias. -vreaa

The Globe and Mail ran an article ‘In Vancouver, the third wave hits’, by Kerry Gold, 17 Jun 2010, that argues that Chinese buyers continue to “pour their wealth into Vancouver real estate”. At vancouvercondo.info, commenter /dev/null [Jun 18 2010 11:08 am] analyzed the sources that Kerry Gold had used for this story:

“Let’s see who he/she spoke to for details for the story:

“West Side realtor Ryan Dyer”
“Magnum Projects’ George Wong” (“condo marketer”)
“Vancouver developer Robert Macdonald”
“Marketer Bob Rennie”
“Vincent Chen of Visas Consulting Group” (“one of the largest immigration consulting firms in China”)
“Macdonald Realty VP Dan Scarrow”
“Kelowna realtor Alexandra Rebagliati”

“I follow North Shore Real Estate religiously. Any SFH 1 mil and under I get in my inbox. I just saw my first ever $100 000 price reduction IN ONE SHOT.”

buffates at vancouvercondo.info 17 Jun 2010 10:40 am –

“I follow North Shore Real Estate religiously. Any SFH 1 mil and under I get in my inbox. I just saw my first ever $100 000 price reduction IN ONE SHOT, not 20K reductions at a time or any of that nickel and dime BS. I’m officially aroused.”

“The rental market is softening. Lots of turn over and the phone is not ringing for empty units. It will be amateur hour for these newbie landlords.”

SethM at RE Talks 17 Jun 2010 7:55 am –

“I have solid evidence that the rental market is softening. Lots of turn over and the phone is not ringing for empty units. Stay tuned. Expect to see a further increase in vacancy rates as condo flippers are forced to rent out their units. It will be amateur hour for these newbie landlords.”

And this related story in the Vancouver Sun 15 Jun 2010 –

“Metro Vancouver’s apartment vacancy rate edged up to 2.2 per cent in the spring. The last time Metro Vancouver saw a vacancy rate higher than two per cent was in 1998/99 when the region’s vacancy hit 2.7 per cent. In the spring of 2008, Metro Vancouver’s apartment vacancy rate was 0.9 per cent. “There’s a lot less calls coming in,” Debbie Johnson, director of marketing for Gateway Property Management, said.

Downward Pressure On Prices – “PRICED BELOW MARKET VALUE for IMMEDIATE SALE.”

We love the paradox of ‘Below Market Value!’. Whatever this sells for IS market value. Prices are dropping. -vreaa [Hat-tip to Teddy Bear at vancouvercondo.info 17 Jun 2010 9:13 am]

V837162, #101 – 1225 Barclay St, West End, 633 sqft, Asking price $289,000 ($456/sqft)

Blurb: “PRICED BELOW MARKET VALUE for IMMEDIATE SALE. Spacious SE corner 1 bdrm + large patio suite at Lord Young Terrace with a private treed outlook & great floor plan. Open kitchen, large master bedroom and in-suite laundry & storage. Private access from patio and lush building gardens makes this ground level suite feel more like a townhouse. Some updating with fresh paint and laminate flooring, but additional modern renovations could completely transform this diamond in the rough. Ideally situated on a quiet residential tree-lined street just two blocks from the shops and restaurants of trendy Robson St. Pets allowed. West End’s best buy. BELOW MARKET VALUE.”

“I’m a Canadian living in the US and my friends back home don’t want to hear anything about a housing bubble. Telling a guy his house is likely overvalued is like telling him his wife has a fat ass.”

Two thoughts: RE is an emotionally charged asset. Canadians who have seen the US bubble aftermath first hand appear to have perspective that many here at home lack. -vreaa

Nick at greaterfool.ca 16 Jun 2010 8:55 pm –

“I’m a Canadian living in the US and, boy, my friends back home don’t want to hear anything about a housing bubble. Telling a guy his house is likely overvalued is like telling him his wife has a fat ass. Here, in L.A., owning a house is something that makes people nervous, it used to be an asset, and it’s now a liability.”

“My sister has just put her house on the market. Her real estate agent suggested a listing price that was about $50K less than comparative sale prices from about a month ago.”

oneangryslav2 at vancouvercondo.info 16 Jun 2010 12:38 pm –

“My sister has just put her house on the market. Her real estate agent suggested a listing price that was about $50K less than comparative sale prices from about a month ago. My sis demanded that the house be listed for about $10k less than the most recent comparable sale. This is in Coquitlam. I find it interesting, given that my sis believes that the market is going to tank, while her real estate agent thinks it won’t. So why is he suggesting a listing price so much lower than recent comps? Doesn’t make sense. My sis is aware of the nature of the current market and will be very careful about dismissing any offers out of hand. I think she’s hoping for an offer somewhere at the mid-point of the listing price and the real estate agent’s preferred listing price.”

[Of course, the realtor may just be wanting to ensure a reasonably quick sale, but, more broadly, the idea of sellers now having to chase buyers is important. -vreaa]

Foreign Speculators – “These Mainland Chinese buyers are upgrading their homes, or they’re buying a second home, or buying for investment purposes.”

This realtor points out that a percentage of Chinese buyers of Vancouver RE are speculators. We expect that, like local cash-flow negative speculators, these owners will end up selling into a falling market as the premise for buying (rising prices) disappears. This will add currently unquantifiable momentum to prices on the descent. -vreaa

Lily Korstanje, Magnum Projects, interviewed while promoting the ‘River Green’ development in Richmond, on Global TV 12 Jun 2010 –

“The way things are at the moment, I think we would be selling to around 50%, for sure, to the Mainland Chinese people. These Mainland Chinese people not only live in China a lot of them are stationed here [in Vancouver] already… Either they’re upgrading their homes, or they’re buying a second home, or buying for investment purposes.”

“People have lost touch with just how much these numbers actually are. Consider how much time it takes the average person in Vancouver to earn $100k outright. $2.9 million is just slightly under what I will earn in MY LIFETIME!!! I am an engineer!”

People have indeed lost touch with the meaning of these large numbers. They seem to have forgotten what it would take to earn and save these amounts by conventional methods. This is because only very, very few people have actually been purchasing Vancouver RE with their own earnings. The vast majority of the money spent is borrowed, and that small percentage which is used as a down-payment is very often itself RE derived. Real Estate has distorted the way in which Vancouverites assess the value of money. This was epitomized by the radio reporter who said: “There used to be a time when $1Million was a lot…”  -vreaa

t at VREAA 8 May 2010 2:39 pm –

[In response to discussion regarding a house with an ask price of $2.9M, that the original poster thought was worth $850K] “I really think people need to consider how much time it takes the average person in Vancouver to earn [and save] $100k outright. $2.9 million is just slightly under what I will earn in MY LIFETIME!!! I am an engineer! If I had 3 million I would buy in Hawaii or the Carribean, not Vancouver. People have lost touch with just how much these numbers actually are. They will come back down. And, just to put it into perspective, $850k is still completely out of reach of the average person… that means that it will still be considered a very expensive home despite being valued at less than $1 million.”

Hey, Toronto… You Call THAT A Bubble?!

“This house at Oakwood and St. Clair just sold for $1.05 Million ($151,000) over asking. We’re in a bubble. Now what? When it will pop. How bad it will be. 20 Neighbourhoods assessed for risk.”– Toronto Life, July 2010

From the point of view of a Vancouverite, this reminds me of the exchange where the late great Bill Hicks calls a guy in the audience who smokes “a pack-and-a-half” a “pussy”. (Bill: “I go through two lighters a day”.) From Vancouver’s perspective, Toronto is a bubble newby. But you have to admire their early insight; their ability to look at themselves critically. What do they know that we don’t? And how on earth can Toronto Life publish a cover like that? (Don’t they have any advertisers?) -vreaa

Opinion – “Influential Vancouver citizens have turned RE into their own “mini-industry” to replace the real industries that should be here, but are not.”

north van dude at VREAA 14 Jun 2010 2:32 pm –

“I moved back here from Ireland, where I was making 225k EUR as a second-line sales manager. It is difficult to find a company that pays that much here- there just isn’t the number of companies looking for talent to drive up salaries. We were in software and had to compete for talent with all these companies- (all located in Dublin with roughly same or less pop than Vancouver) – Google, Yahoo, IBM, Salesforce.com, BMC, Adobe, Oracle, SAP, Microsoft, Dell, HP…. all brand name players and all paying good wages. The lack of big companies in Vancouver is one of the reasons for high RE prices- Influential citizens have turned it into their own “mini-industry” to replace the real industries that should be here but are not.”

Point Grey Road Lot for $8.5 Million

MLS V820366, 3501 Point Grey Road, tear-down house, 49.5 x 160 lot (7920 sqft of land, $1070/sqft), asking price $8,480,000

[Location, location, location: Non-waterfront Westside comp: MLS V822198, 3499 39th Ave West, in Kerrisdale, a 61 x 106.5 corner lot, initial ask of $1.7M 6 April 2010, then dropped ask of $1.5M. Sold for $1.3M 27 May 2010 (6497 sqft of land, $200/sqft)]

“My position in San Francisco or San Diego starts at around 225-250k – in a big agency you might be looking at 300k. In Vancouver I would be groveling to get 150k.”

Limey at vancouvercondo.info 12 Jun 2010 5:31 pm –

“People are comparing Vancouver to San Francisco and San Diego. I work in Design and Advertising and the industry is a good litmus test to how much money can be made in a city. My position in SF & SD starts at around 225-250k – in a big agency you might be looking at 300k. In Vancouver I would be groveling to get 150k. Bear in mind that I would also be paying a lot less tax in the states. Plus if I contracted, I could also write some of my mortgage off my taxes.  100k+ a year makes a lot of difference when you buy a house. Let’s compare apples to apples. I do like Vancouver – but putting it up against SF, SD, and NY is like putting your lime green Vespa scooter next to a GSX [a very fast motorcycle -ed.]. It comes with a lot of hype and looks pretty in pictures – but when you hit the road you are left standing.

P.S. Why not move to the states I hear you ask? Well my wonderful wife is from Vancouver, and like most people from the 604, regard it as some sort of gift from god to the rest of the world. Also, someone filled the US with Americans, and there’s only so long I can put up with that crowd.”

“Out of the nearly $200-million worth of real estate we’ve sold so far this year, I’d say 50 per cent was sold to Mainland Chinese.”

Ironically, we’re tempted to criticize this article in the G&M for being too… anecdotal. The authors are arguably guilty of generalizing too much from specific examples. They asked people who specialize in helping Chinese people buy BC real estate whether any Chinese people are buying BC real estate. -vreaa

Excerpts from ‘Mainland China pours wealth into BC housing’, Globe and Mail, 10 Jun 2010 –

“Out of the nearly $200-million [worth of real estate] we’ve sold so far this year, I’d say 50 per cent was sold to Mainland Chinese,” said George Wong of Magnum Projects. “There’s a growing middle class and a growing wealthy class. And they have become the fuel to our real estate.” Mr. Wong travels to cities such as Beijing and Shanghai to showcase West Coast properties, and his trips have led to sales. He said Chinese buyers account for about half of the units bought at a downtown condo development called Harbour Green, where the average unit costs $5.5-million. “That’s the most luxurious and exclusive condo in Canada,” he said.

“There are over 3,000 Chinese families who migrate to Canada under the business category every year,” said Vincent Chen of Visas Consulting Group, who helps families move to Canada from his office in Shanghai. “At least 60 per cent of these families choose Vancouver to settle down – and a major part of them will buy property there, sooner or later.”

Celia Liang came to Canada a decade ago to open a restaurant in Golden, B.C. She is now in Kelowna working as a translator for a local [real estate] agent. “My experience has been, in the last two years, I am seeing more Chinese come,” Ms. Liang said. “These aren’t Canadian Chinese. They are from China.” Ms. Liang said Chinese buyers are here to settle down, raise families, and get away from the congestion and overcrowding of many Chinese cities. “The thing that will make people buy property is they have to want to move to Canada – that is the thing, for them to want to invest in another country and not their own,” she said. “They buy property here not for investment, but because they are willing to move here.”

Fast And Loose Demolition In Vancouver

Wild west, frontier country; cowboy construction, daredevil demolition. All part of the culture of a hustle-or-be-hustled hot-hot-hot RE market. -vreaa

Southeast corner of Hornby Street and Helmcken Street around 5:15 p.m. PT on Thursday 10 Jun 2010, as reported at cbc.ca 11 Jun 2010.




Other videos angles: First wall; Second wall.

“Market sentiment seems to be shifting. Neighbour is trying to sell their 3 story renovated character home. Reduced the price once. People are coming to the open houses, they appear to be interested, but are reluctant to pull the trigger. Uncertainty.”

tapioca at RE Talks 10 Jun 2010 1:27 pm –

“Market sentiment seems to be shifting. Where once open houses were packed in my ‘hood, they are quieter and things seem to be sitting for longer. Not dead, but definitely not the insanity of the past.  I ran into my neighbour the other week. They’re trying to sell their 3 story renovated character home. They’ve already reduced the price once. She said the market is funny right now… people are coming to the open houses, they appear to be interested, but are reluctant to pull the trigger. Had one offer that collapsed when the buyer got cold feet. Uncertainty. This is a good area (van/burnaby heights) where properties were selling fast in the past…just thought it was interesting.”

“Around my neighborhood of Fairview, we finally had a house priced under $1M! Granted, it is a old timer tear down.”

space889 9 Jun 2010 11:35 am –

“Around my neighborhood of Fairview, we finally had a house priced under $1M! Granted it is a old timer tear down. Sorry, I meant handyman/renovation dream project. Everything else that’s on the market have not moved at all…granted they are all priced $1.3 to $2 million! Including those old timers that probably requires $300K+ in a complete total, tear, smash, and throw everything out type of renovation just to make it livable.”

“I am 36 and he is 32. We bought in 2003 for $280K, the 2 BR condo is now worth $500K and dropping. All the various financial people I’ve gone to for advice say Vancouver will correct by 10%, but not much more, due to Asian money scooping up “bargains” here.”

This from Jane as headlined by Garth Turner at greaterfool.ca 8 Jun 2010 –

“I am 36 and he is 32.  We bought in 2003 for $280 000, the 2 bedroom condo is now worth $500,000 (and dropping).  We would like more space, but are happy to stay where we are for another couple of years. If we sell and rent we may never get back into the market.  If we don’t sell, our condo will depreciate, but so will the rest of the homes.  Ultimately we will need more space as we have two young children.
I’m inclined to stay put, pay off the rest of the mortgage (as we can’t afford rent without downgrading our living space), and then buy a bigger place when prices drop. buying when prices are down means a smaller mortgage; I’m not buying in to current prices.  But how much will prices drop?  And when?  Everyone I’ve gone to for advice (various financial people) all say Vancouver will correct by 10% but not much more due to Asian money scooping up “bargains” here.  We choose to stay in Vancouver proper as it is cheaper than commuting from any of the suburbs (we are down to one car, I stay home with the kids, do the wifey household chores, cook a lot, live within our means), and there are other family and quality of life costs that also come with commuting, namely we’d never see my husband and we’d most likely need a second car, forcing me back to work, then we’d need daycare, etc, etc.
So, what should we do?  We could sell and rent, but we can’t afford to rent an equivalent sized place, let alone something bigger.  I feel stuck, so we sit and wait, hoping for prices to tumble so that we can afford a larger place.”

“A friend of mine is a realtor here in Surrey. I know for a fact she is usually super busy but this week is surfing the net.”

LightsOut at vancouvercondo.info 8 Jun 2010 3:20 pm –

“A friend of mine is a realtor here in Surrey. She is Chinese and deals mainly with Chinese clients. She told me today that there was only 1 sale in all of Surrey last week. I told her I didn’t believe it but she said it was true. I know for a fact she is usually super busy but this week is surfing the net.” [There was definitely more than one sale in Surrey last week. Perhaps she meant within her agency? Regardless, the anecdote stands as indicative of the slowdown being experienced. -vreaa]