“In the last 20 years, I’ve never seen anything like it. I bought my first house in 1996, a four-bedroom for $124,000, and I could probably buy that same house for $124,000. All the appreciation we’ve gained in the last 15 years, it’s gone.” –
Chuck Whitehead, general manager for Coldwell Banker’s Southwest Riverside operations [San Diego] Eric Wolff at the NC Times, 16 Apr 2011.
[When speculative manias end. – ed.]
Vancouver Real Estate Anecdote Archive 
It’s not an unreasonable prospect. I know people in Kelowna who bought 5 years ago and can’t sell today for more than what they paid (or even for the same price). Some are sorely regretting that they bought that property as selling now would mean writing a cheque to the bank for the difference between the mortgage and the selling price.
As you can see his statement is validated by the most recent charts. Anyone who bought in 2000 or 1989 would be at exactly 0 real gains.
Was that Shiller’s claim over long periods of time? My understanding is Case-Shiller over two hundred years showed real appreciation simply isn’t part of the housing picture. Which is fine – you still have a place to live for less than rent, once it’s paid off – and obviously individual properties can be an exception. But overall, housing can only take so much of the economy.
And that’s why housing is rightly viewed as consumption in saner times. A big house is a sports car, not your ticket to millions. If you renovate it’s spending money on yourself, not an “investment”.
One exception was buying apartments to rent out. With good tenants (any of those left?) a landlord could have a reliable income with predictable costs and modest capital gains.
However, I remember when buying a SFH was cheaper than renting, but buy to let didn’t make sense because of all the maintenance and depreciation. I’m guessing the speculators who drove rental yields below bond yields in areas like the Fraser Valley will discover the depreciation later.
“With good tenants (any of those left?)”
Nope, all renters are unreliable filthy meth heads with no hope of ever having a fulfilling and rewarding life, are you slow or something?
Coming soon… to an interior city near you… 😉
It depends on where, when and what you buy as I did quite well on selling a multi unit property in the lower Mainland. Not sure if the same property would bring me the same price I got in 2008 now. However, my mother owns a condo in White Rock which she bought in 1995 for $144K. It is now assessed in 2011 at $275,000. Looks like it almost doubled in price right? It is now at the stage when it requires a renovation and realtors have suggested it its current state it may sell for around $239,000.
Purchase price $144,000
Leaky condo repair $42,000
Additional condo fees/repairs $6000
Condo fees over 17 years approx $39,000
Taxes $23,600
Estimated renovation cost $40,000
Total cost, not including property transfer taxes, other repairs, mortgage interest and realtor’s fees: $294,600. A loss for holding the property for 16 years of more than $20,000.
Pingback: “My mother owns a condo in White Rock which she bought in 1995 for $144K. It is now assessed in 2011 at $275,000. Looks like it almost doubled in price right? [Wrong!]“ | Vancouver Real Estate Anecdote Archive