“Vancouver is perhaps the most bubbilicious, distorted real estate market in North America right now. It’s as bad as anything that happened in America. Maybe even worse.”

‘tincup’ sent us the following by e-mail : “Thought this might be worth archiving.  On episode #145 of the KunstlerCast [24 Feb 2011] with James Kunstler (noted but controversial American author [* for context, see addendum. -ed.]) he says the following in response to a listener’s call regarding Vancouver Real Estate (The listener’s call starts at 24:48 and his comments start at 26:50 in the itunes podcast, or at his website KunstlerCast_145_Listener_Mailbag):
“Yeah, Vancouver is perhaps the most bubbilicious, distorted real estate market in North America right now.  It’s as bad as anything that happened in America. It’s as bad as anything that happened in the San Francisco Bay area, or Los Angeles, or Florida, or Las Vegas. Maybe even worse.”
He goes on about drug money and Asian investors too.
Regards, Tincup” [Thanks, tincup. – ed.]

Expanded version of exchange tincup refers to::
Caller: “Hello, Michael King calling from Vancouver BC responding to the podcast on Australia… it got into the issue of.. there’s a trend in Anglo-American countries for young people to look for housing in city centres as a response, a revolt, against the suburban lifestyle unfortunately, here in Vancouver, in the Lower mainland, which is the greater suburban area, there is move for people under the age of 35 or so to go to the suburbs and this has become quite a noticeable trend here.. … it may have something to do with the fact that in Vancouver, which may or may not be in a real estate bubble, you’re looking at about 400,000 Canadian dollars for a 600-700 sqft 1 bedroom condo in the downtown core. So, for many people, this is absolutely unattainable, for that amount of money, or even less, you can have your suburban palace…”
Kunstler: “I’ve been to Vancouver about 4 times in the last 6 years or so, and I got a very very substantial tour of the suburban outlands there, I saw a lot of them. And, there’s a couple of things going on… Vancouver is perhaps the most bubbilicious distorted real estate market in North America right now. It’s as bad as anything that happened in America. It’s as bad as anything that happened in the San Francisco Bay area, or Los Angeles, or Florida, or Las Vegas. Maybe even worse. … [comments about condo development and ‘new suburban stuff’] … What I was seeing when I was there, was real estate near the centre being hideously overpriced, and what was probably going to turn into an over-supply of suburban stuff way outside the city … you’re paying a premium to be close to the centre … for the most part they’re pretty car dependent … They do have some light rail out there but not nearly on the European level … and simply not adequate to serve this vast suburban outland. It’s an extremely distorted market…”

Kunstler (and the caller) argue that prices near the core are forcing people away from the city centre, into the lower mainland suburbs. Our perception, however, is that value (what you get for your money) is poor all over the area,  and, if anything, the bubble has caused some to leave or avoid the area entirely (rather than acting as a local centrifugal force). At this very moment, it is true that some peripheral markets have started dropping (Okanagan, Vancouver Island) and some have stalled (Northshore), but this is likely the effect of the beginnings of the bubble implosion, rather than a lasting effect. In other words, we wouldn’t see the bubble as having a sustained, longterm influence over choosing urban or suburban homes. Value is poor everywhere. We also expect eventual price percentage drops to be pretty much the same in all areas. – vreaa

* Addendum: Here’s what Ben McGrath had to say about Kunstler in The New Yorker [‘The Dystopians’, 26 Jan 2009]
..author James Howard Kunstler, whose 1993 book about suburban sprawl, “The Geography of Nowhere,” is a staple of collegiate urban-studies curricula, and whose weekly blog column, Clusterfuck Nation, can be read as a sustained critique of the cheerful globalism championed by Thomas Friedman. His latest contribution to the doomersphere is an engaging novel, “World Made by Hand,” set in the post-collapse future, and while it’s not apocalyptic by the standards of, say, Cormac McCarthy’s “The Road,” it is comprehensive in its imagination of the disasters that await us: dirty bombs and race wars and dengue fever and flu epidemics and forced shavings by religious fanatics and hurricanes in New England in June. (Kunstler resists the doomer label-“I’ve never been a complete collapsitarian,” he says-but the fact that one of his bombs detonates in Washington on “twelve twenty-one” is likely to please superstitious adherents of the Maya calendar, which concludes its first cycle on what is now the Internet’s most popular day of reckoning: December 21, 2012.) “World Made by Hand” is set in a small town north of Albany, where the residents have no oil, no coffee, no spices, no mail delivery, and only sporadic electricity, but marijuana cultivation is booming and they’re growing “buds the size of plums.” Capitalism and human ingenuity persist; it’s only the economic incentives that change. “The action is going to be in smaller towns in the years ahead, because the cities are going to be so problematic,” he told me.

21 responses to ““Vancouver is perhaps the most bubbilicious, distorted real estate market in North America right now. It’s as bad as anything that happened in America. Maybe even worse.”

  1. I’m really looking forward to seeing the next major sales datapoint to determine if the new mortgage qualification rules have had any effect on the market.

  2. Restaurant Unemployee

    as am i

    i enjoyed this podcast’s focus on urban sprawl and transportation issues

    growing up in coquitlam during the 80s and 90s we were routinely promised skytrain to coquitlam center. eventually in (2004? when did it open?) the lougheed mall station opened – which is fantastic – except the bus trip from coquitlam center to lougheed mall on the #97 is 30 minutes long – you’re better off hopping on the express bus downtown from coquitlam center.

    so there is this huge mass of people in coquitlam/poco that really have no viable skytrain service, and if you continue east it just gets worse.

    ever try to commute to maple ridge on the #7 after 4pm?
    ever try to commute from maple ridge on the #7 after 7am?

    i am convinced this project to link the eastern suburbs has been sacrificed for the olympics and for the local auto/oil nexus.

    with the new Burke Mountain housing development going up, traffic on the highway out of PoCo is going to be even more insane. don’t get me started on that project – it will be as bad as heritage mountain and westwood plateau.

  3. It’s different here.

    We have Hot Asian Money that will keep RE prices going up to infinity (and beyond?)

    • Neuter Your Nameplates

      we’ve going to have to think of some new sarcastic jokes, these are getting old!

      • If the oil prices stay high long enough, wealthy Albertans will start to displace the local asian population. HAM will become Hot Albertan Money.

  4. All right. Van-reality-shows for a change.

    Price didn’t go up, hence time to demand for a full refund.
    http://preview.tinyurl.com/47upj4j
    Next to grab
    http://preview.tinyurl.com/4qow7vg

    http://preview.tinyurl.com/4e7gqav

  5. Neuter Your Nameplates

    why don’t we just have our own hot money?

    mmm?

    or would that require actual work instead of speculating..

    or is the reason why there is no HBCM is because no one in BC is actually from BC? (this is hyperbole, don’t shoot)

  6. when is your next podcast? i definately agree with alot of what you’re saying. what is your opinion of the rest of the canadian market?

    • You’re spamming (it’s not even MY podcast, bet you never listened, pay attention next time).
      The link is so nauseating we’ll leave it up to a testimony of how sleazy and desperate RE marketers and related souls can get.

    • Neuter Your Nameplates

      my opinion of the canadian market – and all canadian markets – even the supermarket – is that we’re better off with out you.

      pushy asshole.

  7. 4SlicesofCheese

    http://www.propgoluxury.com/EN/PropertyNews/Tag/Chinese-investors/
    Came upon this link.

    With so much HAM trying to get out of China, what will that do to China’s economy?

    • Neuter Your Nameplates

      they’re printing money as fast as the americans are, so i can’t really say.

      why anyone believes any metrics coming out of that government is beyond me. i would like to know more about the process of capital flight from china and what the legalities are and what the usual routes out of the country are.

      tonight i had a interesting conversation with a family member who teaches ESL to adults about immigration brokers.

      and i had a breakthrough – immigration brokers sell as much bullshit to their marks as mortgage brokers. they sell them pie in the sky dreams, that the streets are paved with gold here and everything is free.

      hilarious.

  8. Shizzie von Shizwit

    Love Kunstler!!

    Anyone seen the cover of Vancouver Magazine lately? “Why Housing Prices are set to Rocket’ or some such tripe. I noticed it was included free with my (also free) North Shore News. I guess people no longer want to pay to read about why housing is so great.

    • Restaurant Unemployee

      i did see the cover of the georgia straight last week – the one with the house with rocket boosters attached, blasting through the troposphere and STRAIGHT INTO THE SUN WHERE IT BELONGS, where it can fuel it’s atomic furnace for another 10 billion years, what with all the infinite momentum our market has.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s