Family Wedding RE Chat – “Despite the American relatives pointing out the ridiculousness of these arguments, there was no convincing the Vancouverites that it’s a bubble.”

pricedoutfornow at vancouvercondo.info May 22nd, 2011 at 7:27 pm
“Went to a family wedding this weekend. American relatives were attending, and as usual as per social conversations in Vancouver, the topic quickly became real estate. The Vancouverites were jumping up and down, telling my American relatives that “Vancouver is different, it won’t crash here, we have Chinese investors, we have mountains.” Despite the American relatives pointing out the ridiculousness of these arguments, there was no convincing the Vancouverites that it’s a bubble, and it will crash here too, just like it has in their home country. Finally, the Americans realized there was no convincing these delusional, irrational people, finally one just turned away, and remarked under his breath “Well, sure sounds like a bubble to me.”
I think the Americans would know, they’ve seen this hype before (and are now buying properties in Florida for half price). They just shake their heads sadly and sigh “Poor Canadians, they will learn.”

38 responses to “Family Wedding RE Chat – “Despite the American relatives pointing out the ridiculousness of these arguments, there was no convincing the Vancouverites that it’s a bubble.”

  1. Really enjoy reading all your anecdotes. Keep up the good work.

    Looking forward to reading the sighs of disbelief in HooCoodaNode.

  2. I think there’s more than a bit of jingoist arrogance that the Evil Empire got what was coming to it.

    • jesse -> That’s a complex statement: please parse.

    • I’m always weary about Canadians claiming that American comments about a housing bubble are irrelevant because of not only immigration and mountains, but also a sound banking system and more prudent debt management. It seems odd that those from a country that has first-hand experience with housing bubbles are shirked aside so easily. Maybe it’s just a case of hubris but my guess a little bit of “we’re better than you because you’re American and we’re not” was involved, and was just not said to keep things cordial.

  3. perhaps we should have hit these American relatives with some hard numbers: immigration, wealthy investors, land use, etc. Anyone comparing any US city to Vancouver is simply revealing their ignorance.

    • lol we are so different here

      vreaa, the Seattle CSI/HPI chart, please???

      [see here -ed.] :

      rusty i want to meet you and shake your hand – you’re a living, breathing anachronism.

    • “Anyone comparing any US city to Vancouver is simply revealing their ignorance.”

      Ha ha ha ha. Why? Because it is an “international” city. Ever been to New York, LA, Honolulu, Miami? A dozen others?

      There are multiple states in the US with larger GDPs than all of Canada. Hell, NYC or LA probably have larger GDPs than Canada. There should be 50 US cities with higher property values than Vancouver based on economic activity alone.

    • Seattle and Portland exhibited the same hubris vis-à-vis the rest of the US in 2006… Despite having a vibrant corporate culture, they still went down 30% from peak. They bleated… “We won’t go down… we’re special, we’re different, blah, blah…”
      What do Seattle and Portland have going for them compared to Vancouver? Real head office jobs such as Expedia, Microsoft, Boeing (kind of), Nike, Starbucks, Weyerhaeuser and Costco, which can sustainably support real estate valuations. What corporate champions do we have here? Ballard and some guys who dig stuff out of the ground.
      We have no “wealthy investors” here, just speculation and easy money.

  4. typical arrogant american comments. they cant even look after themselves. they are ruined by their own greeds.

  5. “Anyone comparing any US city to Vancouver is simply revealing their ignorance.”

    Because you understand Detroit is just like all other US cities? Not saying that Vancouver isn’t groovy – I love the Pacific Northwest. But comparing Detroit to Vancouver is like comparing Seattle to Windsor.

    Why don’t you tell us what exactly is so horrible about Seattle, Portland, or Eugene, OR? Have you ever seen those cities?

    If Vancouver is your homeland, it makes sense why you don’t want to leave. But it’s crazy to assume that EVERY other place in North America sucks.

  6. Portland and Seattle are wonderful cities, but they are not representative of US as a whole; they’re exceptions. Try travelling east and south, visit the “industrial heartland” All you need to do is look at the demographics of each state to know where the poverty and suffering are – the more hispanic and black the greater the suffering. Using Seattle and Portland as examples of how prosperous the US is reminds me of how Vancouver renters used charts of Las Vegas, Phoenix and Miami as a benchmark of US housing health.
    You folks need to get out more and see the world – and when you’re out it might help to open your eyes.

    • “You folks need to get out more and see the world…”

      Ah, the irony.

      • “Using Seattle and Portland as examples of how prosperous the US is reminds me of how Vancouver renters used charts of Las Vegas, Phoenix and Miami as a benchmark of US housing health.”

        Rusty,

        Seattle and Portland are just as “American” as Detroit. That’s kind of a wack way of seeing the U.S.

        I don’t get your prosperity argument. You may not understand that the GDP of California (even now, with it a budget mess) is about the same as all of Canada. Same with the GDPs of NY and Texas – I’m not saying you want to live in those states, but I don’t get your prosperity argument.

        “You folks need to get out more and see the world – and when you’re out it might help to open your eyes.”

        yeah – you should check your assumptions at the door. I live in Canada now, but I’ve lived in the southeast, midwest, and the pacific northwest. I love Richmond, VA; Chicago, IL; Madison, WI; Seattle; Portland; Charlotte & Chapel Hill, NC; and Sante Fe, NM.

        And I’d pay a lot for some good corn tortillas – I can’t find a quality tortilla anywhere in this city.

      • try the “red burrito” chain
        real authentic mexican food
        100% chinese owned 😉

    • Rusty, it’s obvious that you have barely traveled anywhere. US and some Central American or Carribean resorts do not count.

    • “the more hispanic and black the greater the suffering.”

      i’m just going to put this right here….

      “Using Seattle and Portland as examples of how prosperous the US is reminds me of how Vancouver renters used charts of Las Vegas, Phoenix and Miami as a benchmark of US housing health.”

      i can’t even describe how retarded this is. it’s beyond words to describe.

      rusty i really want to meet you.

  7. you wish you had my passport/visa stamps snats lol

    • Not really, Rusty. I’m quite happy with my life, family, job and home, all in a place that isn’t Vancouver BC. That’s my point: Get over yourself.

      You (different/better/smarter) Canucks are doing the exact same things that we (ignorant/greedy/uncultured) Yanks demonstrated you shouldn’t do, literally less than five years ago. Doesn’t sound very smart to me.

      The only reason I come to this blog is to watch the slow-motion trainwreck. I know that isn’t virtuous of me, but I can’t peel my eyes away.

      • Spot on…That’s just about the only reason I’m still here…

      • i really don’t think rusty is ‘one of us’ in the traditional sense that canadians are like herding cats – these are a different breed, man.

        dangerously innocent..

  8. First time posting – long time US lurker here. Forgive my ignorance, but when I read about the Chinese investors, what is to stop them from dumping their investment (outside of the obvious loss of down payment and poor credit rating)? My main concern if I was a “local” owner or investor would be how these apparently large hordes of non-attached “0wners” will react at the first sign of trouble…I’m guessing it would be a large sell-off, and, when values decline from slashed prices, simply walking away (which is what happened a lot in Vegas, FL, etc.). The difference being (I guess) that I’m guessing someone from China doesn’t really care what their credit rating is in another country. Is there some other penalty which could minimize any such mass abandonment of properties? Again, sorry for my ignorance if there is something I am missing.

    • What you are missing is that the bulls themselves claim that many of the mainland Chinese have no intention of ever living here while at the same time they are supposed to keep holding the properties and buying new ones indefinitely.
      + the mainland Chinese factor is very very overhyped.

    • Starbreaker -> Thanks for the comment and your question. We agree with that which you imply: Many off-shore owners are simply momentum investors, and when prices turn down in earnest, they will dump their properties.

  9. pricedoutfornow

    Further to that anecdote, I had a private conversation with a cousin. She recently bought a condo in Miami ($145k) which was previously sold for double that earlier this decade. Unbelievable. She was absolutely shocked when I told her that the houses in my East Vancouver neighborhood sell for nearly a million dollars and the condo we’re renting (for $1350) sells for nearly $500k. She couldn’t believe that houses were that expensive. She said “Houses in New York are that expensive…but that’s NEW YORK CITY!” (She lived there for 5 years). I can tell she thinks that Vancouver is a lovely place to visit but not exactly a “world-class city.” A bit small, and lacking in much of a cultural life or good career opportunities.
    She looked at me with such pity and said things like “Oh no! Poor Canada!” when I told her of our CMHC. In the end she said “Don’t worry, this mania will end and you will pick something up for a song. Just like I did.”
    Anyway, I know this will end, more and more of our clients are sinking under the weight of their debts and contemplating bankruptcy. Even if interest rates don’t go up, people are struggling financially. This will not end well.

    • granite countertop

      Similar to this anecdote:

      A few months ago I drove down to Olympia & Portland to visit friends, had some interesting discussions around real estate. A friend in Portland recently baught a house for his family. When he first started looking, houses were all either unacceptable or too expensive. He decided what he needed, what he could pay, and just waited for the market to come down to him.

      Another friend in Olympia had relatives closing a deal in Nevada. The house they were buying had been on the market 4 years, hadn’t had an offer in over a year, they picked it up with an offer much lower than the asking price and over half off the original listing. I told her that prices in Metro Vancouver hadn’t fallen at all from the peak, had even risen a little after the financial crisis. She just gave me a quizzical look, like, what are they thinking?

      On the way back we stoped at Old School Pizzeria, a pizza shop in Olympia covered with random memorabilia. A bizarre thought occurred: travelling back to Vancouver was like travelling back to a past before the real estate bubble burst. But no one would believe me when I said I had seen the future and the destruction that would befall them…

  10. pricedout,
    I sure hope your entire future isn’t pinned on the accuracy of your dire prediction for Vancouver real estate.

    • pricedoutfornow

      Don’t worry it’s not. I will happily rent for the rest of my working life before I buy some crappy overpriced Vancouver house. Then buy a retirement home somewhere sunny with all the cash I will have saved. Heck, I could do that today if I wanted to. No worries! A house is just a place to live and right now I choose to rent rather than buy. I’ll invest my money elsewhere.

    • If your entire frame of reference for real estate is 1980 to present, then yes, Real Estate made a lot of sense. An inflection point is happening now. Rates are on their way up. As one of my favourite portfolio managers says often, “Trees don’t grow to the sky.” An apt metaphore for BC since mature trees are the ones that get chopped down.

  11. sounds like the recipe for remaining poor. I’ve never heard of a lifelong renter having money to do anything on retirement, and I’m not young. What I do see are homeowners downsizing and using sale of their homes to buy retirement villas in international locations. The trick is, you need to have owned that home to do it. Sorry pricedout, I don’t see any exceptions to the rule here

    • Speak for yourself… There’s more than one way to skin a cat… Good dividend-paying bank stocks are a great way to take advantage of all the fools willingly becoming mortgage slaves. BNS, Canadian Western Bank, Santander and CIBC all have a role in my open accounts and self-directed RSPs. Bought more of BNS when it was yielding 7% in 2009. Know what else is great Rusty? I can sell all these shares in 20 seconds and it’ll cost me 25 bucks a pop.

    • rusty i love you

      i am ready to follow you anywhere

    • granite countertop

      Rusty, why do you keep posting here?

      I mean, I’m not sure why I keep reading this blog, I’m hoping your answer will shed some light or something.

      • we will hopefully soon have more insight into why exactly rusty posts here

        it certainly can’t be to evenly consider any different view points – he has seen the light and knows the truth of the universe! now he hath descended the mount with his stone tablets and is disseminating reality to us with BRUTAL, UNADULTERATED LANGUAGE!

        my god, rusty – you’ve blown my mind – how could i have been so off, after watching prices rise 500% in 20 years (definitely not in a straight line, with the exception of the last 5 years – 2008/9 not withstanding) to think that maybe it was just too much for the local economy to sustain?

        oh right, we don’t need a local economy anymore.

        hell, who needs residents anymore?

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