“Five years ago I decided to buy a condo in Vancouver … Last month I seized the opportunity to escape the housing market.”

Anecdote from Andy, extracted from that headlined by Garth Turner at greaterfool.ca 5 May 2011
“Five years ago I decided to buy a condo in Vancouver. I had a new job and a decent wage, but had only just finished paying off my student loans so I didn’t have any money. Undeterred and encouraged by everyone around me, I borrowed 5% from my parents for a down payment and enlisted a mortgage broker to sell my soul . . . I asked him for $350K, but he then offered me $500K before I even filled out the forms.
I looked at condos non-stop for a few weeks and eventually purchased a great one. I felt like I had really accomplished something (thanks to all those pats on the back from fellow home-owners). I was finally investing in my own future instead of wasting money on rent, just like my friends and family had coached. Life was good! Or so I thought.
As the years passed I began to realize exactly how buggered I really was. The running total I was spending on principle plus interest was rising much faster than my property value; the longer I held my place, the greater the difference between the two. Then real estate values dropped in 2007-2008 and I was stuck; unable to sell without losing my shirt, and spending more and more money on interest with each passing day. Knowing I simply couldn’t sell until the market came back, I accepted my predicament and settled in for the long haul. At least I was “doing the right thing” by owning a house, right? As housing prices rose again following the Olympics, I began to wonder if/when it might be time to sell and get out of the market. My gut said, “get out” but everyone around me said I’d be a fool if I did. Peer pressure won, and I held on.
A friend of mine turned me onto [greaterfool.ca] a few months ago and I have been glued to it ever since. It was refreshing to read that the “invest in a house” pressure I had been subjected to my entire adult life may have been misplaced. After a few weeks of reading [the] blog and I knew my gut feelings were right. Armed with new confidence, I seized the opportunity to escape the housing market and haven’t looked back. I packed, moved (into a rental), then staged and listed my place within 3 weeks. After a grand total of 7 days on the market and only 3 showings, I received 2 offers above my already-inflated list price. I accepted one of the offers and have never felt better. I made it out alive!
When I consider all monies paid (down payment, interest, principle, strata fees, realty fees, etc.), I think the outcome is actually brighter than I could have hoped. Now, don’t get me wrong – I didn’t make money . . . I simply lost less than I was expecting to, given the naïve way in which I entered the housing market (minimum down payment, inflated market prices, etc.). I consider myself lucky to have escaped when I did, especially considering the inevitable real estate price drop we all know is coming. Not to mention, I now find myself sitting on a lump sum of “forced savings” left over from the sale.”

One response to ““Five years ago I decided to buy a condo in Vancouver … Last month I seized the opportunity to escape the housing market.”

  1. “A friend of mine turned me onto [greaterfool.ca] a few months ago”

    hallelujah! Thee hath seen the light, and it doth resemble Garth Turner…wait, are those horns protruding from thy temples Garth?

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