rusty at VREAA 4 Jun 2011 1:55pm – “A buddy of mine and his wife moved here in 1994. He’s in sales and wife is a nurse. When they decided to start a family they moved back to Alberta to be close to family. One of the key reasons my friend gave was that housing was too expensive here – this was in 1998!!! Now he regrets leaving here and states that he can’t wait for his kids to reach adulthood so he can move back (divorced now and can’t move here due to custody). The funny part about this is, if they’d bought a home here in 1998 they’d be set for life. I’m sure that 10 years from now we’ll hear stories about folks who left Vancouver in 2011 and pine desperately for this city.”
A few thoughts:
1. Housing was arguably almost fully priced in 1998 (Canadian prices plus west-coast weather premium), so your friend’s observation was not that far off base.
2. Regardless, his reason to move was multifactorial: it seems it was mostly “to be close to family”, right? He would have moved regardless of the housing market.
3. The fact that buying a home, anywhere, should “set” anybody up “for life” should set off alarm bells. It should be immediately apparent that this is not a sustainable dynamic decade after decade. It is the result of a brief freakish boom, and is not about to be repeated.
4. You should advise your friend to leave ‘coulda-shoulda-woulda’ out of this… anybody can look at any market and have the same thoughts. Check out a chart of silver, or Nortel, or the TSX: Anybody can, in retrospect see where they ‘coulda’ bought or ‘shoulda’ sold. Your friend needs to decide the best action for himself now.
5. Also, there’s a possibility that your buddy is at risk of getting wires crossed: Are there other things that went well in Vancouver but poorly in Alberta that have nothing whatsoever to do with geography? For instance, he was in a relationship in Vancouver and is now divorced. As a counter-example, I have friends (a couple with three kids) who sold their SFH in the early 2000’s and also moved to the prairies. They now observe that they ‘could’ve’ gotten much more for the house if they were to have sold it now, but this is just a passing observation because they’re happy where they are and have no plans to return.
6. Regarding your prediction that “we’ll hear stories about folks who left Vancouver in 2011 and pine desperately for this city.” … well we’ll simply have to wait and see if that turns out to be the case. As we mentioned in (3) above, we’d be very surprised if the next ten years look anything like the last.
– vreaa
Vancouver Real Estate Anecdote Archive 
fascinating 😉
Why didn’t your buddy make a gazillion dollars on all his investment prpoperties when Calgary real estate prices doubled in 2006? Clearly he must be a pessimistic glass-half-empty type of guy. Given your discriminating standards I’m surprised you are friends with such a loser. Not to worry, he can always just move to chilliwack.
Real estate had a series of steep increases in the 2000s in the Albertan cities and in one year ’06-07 went up 50%.
If your friend bought a house, he should have seen a very good increase in his equity. After his kids grow up he can move back to the city and everybody is happy.
“I’m sure that 10 years from now we’ll hear stories about folks who left Vancouver in 2011 and pine desperately for this city.”
I find this statement to be strange. People in the pacific northwest can be so provincial sometimes. (I say this as someone who has lived in Seattle. Seattlites can be the same way — they cannot imagine that you could be happy in any other city, anywhere in the world. It gets tedious.)
Why shouldn’t somebody live somewhere else for a while? They can always move back. It’s a big world out there.
And there are some fabulous places to live aside from “Ecotopia.”
he lost half a house in a divorce, and is now saddles with support payments. But this doesn’t change the fact that he wants back in to Vancouver, does it?
“But this doesn’t change the fact that he wants back in to Vancouver, does it?”
I don’t understand the greater point. If hypothetical person wanted back to Vancouver I assume that person would just move back. I mean, you all aren’t Palestinians living in Jerusalem here — you’ve got a right of return.
His problems with returning seem to be more centered around the divorce. But if he had stayed in Vancouver & gotten divorced, I assume he would either have to sell the house or buy her out.
if the hypothetical person wanted to give sole custody of his kids to his ex and not be involved in kids life he’d move back to Vancouver. Comments from a person without kids no doubt
okay, but what about the house in the divorce, if he had stayed in Vancouver?
Your buddy is just bitter that he missed the boat on Alberta real estate.
Maybe he should work harder and better himself so that he can afford a divorce. If he gets back on the property ladder it really should not be a problem.
Why doesn’t he just buy a fixer-upper in Drumheller with a suite in the basement and have his wife live there? The only reason not to do so is because of elitism or entitlement.
As a good friend, have you pointed this out to him?
Rusty,
You’re either not reading my posts or intentionally misunderstanding me.
Frankly, I don’t understand this “Vancouver is the sh*t and I must live there at all cost” nonsense anyways. I most certainly do not think living in Vancouver versus Calgary is worth leaving children.
But his problems have nothing to do with real estate. If he was still married he could move back to Vancouver. Seems to me divorce was more of his problem, not moving.
Yeah, Rusty, Calgary has a way of separating the wheat from the chaff… Your buddy obviously just can’t cut the mustard in Western Canada’s economic heart.
See, how ridiculous your Vancouver argument is?
Your friend sounds like a whiner you wants thing handed to him. Does he think it was easier for people who got divorced 10 years ago?
He had 13 years to plan ahead. He should have taken the opportunity and had paid off investment properties ready for his family members in the case of such an eventuality. I guess he has learned a hard lesson.
Maybe you can cheer him up by showing him your 1920’s art collection.
the friend should learn to do some meditate
BE A MAN
DO THE RIGHT THING
Yeah, excellent point, what would he be doing now if he lived in Vancouver and wanted to keep the house after the divorce (or for that matter to buy another in Vancouver)… jumbo mortgage?
Anybody spot the great housing reference in the crowds during the 2nd period of tonight’s Stanley cup final game??
We have a screen image and will headline it.
Or alternately perhaps your “buddy” is fictitious.
Vreaa,
Below another “spot the speculator” story, although not in Vancouver but in Ontario…
http://www.financialpost.com/personal-finance/family/Debt+heavy+couple+liable+fall+victim+interest+rate+squeeze/4868571/story.html
Makaya -> Great story, thanks, will headline.
That story is just so fucking crazy, I don’t believe it. They make $120k AFTER TAX and they have less than that in net worth? With kids?! WTF.
I can understand they are obsessed with real estate, but why isn’t more of it paid off? What are they doing, heating their properties by burning barrels of cash? Where is the ^&$# equity? Why are they paying interest on car loans?
The banks must fucking LOVE these people. Jesus.
I love how these people super leveraged in RE always derive their labour income from RE. I wonder how many commissions they’ll bring in when the market tanks?
These real estate sales people remind me of the guys who worked at Nortel, who had all of their self-directed RSPs in NT stock, maxed out participation in the employee share purchase plan and had their kids’ RESP invested in technology funds (for diversification purposes). Real estate for agents is like a fricking religion.
Smart guys are guys like Bill Gates, who has a ton of money in Microsoft, but is also the biggest shareholder of businesses in unrelated industries, like CN Rail.
1) I and most bears I know, have always said that Vancouver prices started their crazy climb in 2002. You can clearly see the steep curve in the price graphs that are easy to find with one google search.
2) Rusty is a proven liar and I would be very suspicious about this story too, especially given what I wrote in 1)
2012 is off to a great start. People seem to have an interest in buying this year. 2011 business was down, but that is real estate. Great website here. Best of luck to everyone in 2012, realtors, purchasers and sellers.