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