“Several bears I know that were sitting on the sidelines have finally thrown in the towel and bought in the past couple of months.”

“Several bears I know that were sitting on the sidelines have finally thrown in the towel and bought in the past couple of months. Perhaps a contrarian indicator that a top is near?”
Troll at vancouvercondo.info, 31 Aug 2011 11:25am

If we’d kept a list of the succession of contrarian bells that have rung for this market over the years, it’d be might long…
But, yeah, bears capitulating is always noteworthy.
Poor schmucks, they should have come to the meetings.
– vreaa

44 responses to ““Several bears I know that were sitting on the sidelines have finally thrown in the towel and bought in the past couple of months.”

  1. Is something that is posted by a user calling themselves “Troll” even worth archiving for anecdotal purposes? It seems too obvious a wind up.

    • Fair observation.
      However, without having seen all of ‘Troll’s posts at VCI, he strikes me as more a regular bull-leaning poster who is a ‘Troll’ by name only… The posts that I’ve seen of his aren’t that trollish.
      (Besides, what kind of troll calls himself ‘Troll’?)

      Here’s the full comment from which the anecdote is extracted, for the record:
      “[The market] certainly is irrational. I wonder how much longer F is going to let this go on until we see more rule tightening. I don’t see C doing anything with rates in the near future. That said, several bears I know that were sitting on the sidelines have finally thrown in the towel and bought in the past couple of months. Perhaps a contrarian indicator that a top is near?”

      • Actually Troll is rather bearish. He just likes annoying people and is rather good at it. I’m glad he’s found his core competency.

  2. Post over from RET, thoughts?

    RE; Sustainability and irrationality of Van RE.

    “Rational, absolutely without a doubt not.

    Sustainable? Well thats another argument on its own. Who really thought that we would be sitting in 2011 more expensive than ever, with only about 8 months of price declines in the entire decade. Pretty epic bull run. But really at this point the price levels are comedic, would it surprise me if prices DOUBLED from here? Not really, it already takes 96% of disposable income to carry a bungalow. Why not 100%, 120%, or even 150%? Are those numbers any more laughable than 96%?
    My point is, the irrationality is already so extreme that it would now be foolish to completely rule out ANY scenario.

    The whole bull/bear thing is dead in my mind when it comes to Van RE, bears are on the losing side period. There is only a single ace left in the entire bear deck of cards, and thats a crash of 50%+. Lets face it, a correction of 20% or even 25% is a wash when your average bungalow is priced at over a million dollars. Even at 50% off most homes would be over $500,000, perhaps I’m considerably poorer than most Vancouverites but to me thats still no pocket change.”

    • Ergo, we will have a crash of over 50%-off.

      • To each his own, I have a hard time imagining that. It would be interesting to see. While I am getting more bearish on Vancouver RE as time goes by, I just don’t see a crash of a 50%+ magnitude ever transpiring here.

        Looking at desirable areas of California you’ll seldom find a reduction in price to rival cities like Vegas or Phoenix. The same will hold true for Vancouver, 20% perhaps even 30% is not out of the question, I wouldn’t hold my breath for larger discounts. While the supply side of the equation is constantly re hashed by bulls, it does hold some truth. There is a very limited supply of SFH housing compared to an area like Phoenix or Vegas. I by no means am I suggesting that its as dire as bulls will have you believe, but its factual to say you cant just clear a few acres of forest in Vancouver and spring a suburb of 50 homes. This was part of the equation that lead to collapse of housing in the hardest hit states, a constant and readily available supply of land to build houses on.

      • “There is a very limited supply of SFH housing”

        I’d suggest putting the SFH argument aside for a moment and consider the plight of condos; no real “scarcity” argument to be made with them. I’m watching condos like a hawk and seeing where the SFH chips lie after the dust settles.

        Electrician pro-tip: measure relative to ground, not a floating reference, or get burned.

    • So the argument is that nobody can rationally argue against something so unbelievably incongruent.

      Kind of makes you think a bit, until one remembers Vancouver’s bubble is not unique in the annals of history, with no precedent of prices remaining high.

  3. granite countertop

    Wait, you have meetings?

  4. pricedoutfornow

    Why would anyone buy NOW? It already feels too late…it’s so bloody expensive, I’m definitely priced out for infinity, even with low interest rates. I think I’ll throw in the towel….and resign myself to renting for the rest of my working life. Save the cash and buy a nice retirement home (with cash) in 30 years.

    • Yep, I think I’m a capitulating bear in that I believe I’ll *never* buy, at this point. Whereas I used to care because I wanted a place. But I’m not getting any younger.

    • Excellent point, that could be seen as the other kind of bear capitulation. So:
      1. buying
      2. giving up on ever buying

      • CanuckDownUnder

        Put me in camp 2.

        This is just the natural reaction to the bull argument that prices will always go up faster than inflation. If that’s the case then renting will always be cheaper than owning and I’ll be happy growing my wealth through other asset classes.

    • Hey man, just wanted to say I felt the same way before I left Vancouver 3 1/2 years ago (which i never thought i could do). Now I feel like I could save enough for a %30 down payment once I feel the market has corrected enough. I think the average guy in Van, like me, looks at most owners like Ivory Tower dwellers. Out of the reach of us gutter people. Well the joke just might end up on them because until more recently I had no idea the disconnect between how things look on the outside and how broke some of these people really are in reality.

  5. what’s the difference between what “Troll” posts and any of us here anyway?

  6. very hard to predict the end of a bubble.

  7. Capitulation senario 3:
    Leave town and buy/work/live elsewhere

  8. the sad fact about posters on this site is that most of you had your chance to buy at much lower prices and passed (thinking prices would crash). I don’t see any 20-something posters anywhere I look online. Your bearish position and commentary is simply regret and frustration at your own lost opportunity. Don’t blame people for moving on with their lives just because you cannot.

    • “Annabeth:My fatal flaw. That’s what the Sirens showed me. My fatal flaw is hubris.
      Percy: the brown stuff they spread on veggie sandwiches?
      Annabeth:No, Seaweed Brain. That’s HUMMUS. hubris is worse.
      Percy: what could be worse than hummus?
      Annabeth: Deadly pride, Percy.”
      — Rick Riordan

    • This I don’t get. There are people who simply weren’t in a position to buy in the past decade. Perhaps they were paying off student loans. Perhaps they are still students today. So because they happen to be born in the wrong year, they will never be able to afford a home in Vancouver?
      That’s ridiculous. You need to let go of such narrow-minded views.

    • I know several 30-year olds originally from Vancouver but who didn’t buy property here 10 years ago because they were busy getting their MD degree in the US. Now they have their MD, have finished their residency, and are choosing a permanent place to live and work. Most of them are not choosing to return to Vancouver. Affordability certainly plays a role in their decisions.

      So, who would you say has lost the opportunity here: the MDs or the city of Vancouver?

    • please give me his/her IP, PLEASE!!! lol

    • Royce McCutcheon

      “I don’t see any 20-something posters anywhere I look online.” How exactly would one determine this? Besides which, plenty of folks here identify as young people starting out or folks new to the area. But you know that already.

      For the record: I’m young, only a few years out from an advanced degree. I’ve followed this market relatively closely ~4-5 years , a timeline that coincides with me beginning to make long-term life plans. My household has 2 professional incomes. We’ve accumulated great savings/investments in ❤ years of working. We can do this in large part because we're renting (a very nice place, actually). We will be strong in this position for a few more years at least. As we are a growing family, our situation on a longer timeline is less clear. Absent a price correction or finding a Vancouver-proper family rental option we really like (no easy feat), we may not stay here indefinitely. Certainly, we have the option of leaving because of outside demand for our skills. Further, we can easily pick up and move elsewhere with 1 month’s notice. We have friends and peers in the same boat. Some have already left or have made plans to do so or have written off returning here. We are not sad, bitter, or regretful, though we do worry about the long-term prosperity of a region we've called home all our lives.

      But Rusty I’m pretty sure you simply don’t believe what I’m saying. You’ve been at this site a while, you’ve seen these points before – and they haven’t moved you. It seems you will keep believing this site is full of folks who are cranky because they bet wrong on this housing market back in the day. You will continue refusing to believe that many young folks with needed skills are being driven away from this city by the prohibitive cost of living. So why are you here? I dig it when someone with ANY perspective gives me something new to ponder – bull, bear, whatever. Based on your comment suggesting that this place is just a bunch of bitter folks who missed the chance to buy in the past, I really think you don’t have anything to offer besides a suggestion that people should’ve bought in the past (http://tinyurl.com/3qjwdh5). Seriously: what do you have to say to someone who is 1) from here, 2) starting out for themselves, and 3) doesn’t have the benefit of inherited money/property/etc.? What’s your counsel to them for making a life in Vancouver long-term? And I’ll caveat that by saying: the property ladder is a logical fallacy and we didn’t work 60 hour weeks for years for the privilege of 90+ min daily commuting. The answer to me is renting and that works pretty great… but becomes harder once you’re a family of 4 trying to stay in Vancouver.

      Actually, you know what? Don’t bother answering. You don’t even think someone like me exists (let alone many people like me). You don’t seem to think our current prices are problematic or have huge social costs associated with them. You think people concerned about how out-of-whack prices are here are just bitter, not young people our society NEEDS going forward. Your views suggest that the only thing you have to say to a young Vancouverite trying to figure out how to put down his own roots here is “see ya”.

    • I’m 28, and I also love to play poker. Except I realize that for the average poker player, poker is without a doubt, gambling.

  9. vreaa,
    crash of over 50% off. Not in your lifetime:

    “according to 2006 census there are 253K private dwellings (not rental) in Vancouver, only 19.1% are single detached houses”.

    http://vancouver.ca/commsvcs/planning/census/2006/localareas/city.pdf

  10. What’s sadder is the number that will take their hard earned savings and jump in at at 10% decline, starry-eyed by the discount over the bubble price.

    • Yes, there will be buyers who jump in at 10-15-20% off. That will likely cause an anemic bounce or stall at about the 2009 lows. Once those lows give way, there’ll be an acceleration in the drop.

  11. comment from July, 2009

    “As for the increase, I have no doubt it’s temporary and prices will yet test new lows. My only concern, albeit mild, is that things will get rather worse than I expect”.

    famous final words

    • A google search shows that Rusty, above, is quoting commenter ‘betamax’ at RE Talks, 9 Jul 2009, 1:32pm

      BTW, we don’t think that any of us have heard the ‘final words’ on any of this.

    • LOL.

      ‘Rusty’ pulls up a quote by betamax from RET. Riiight. If there was any lingering doubt as to who ‘Rusty’ is this pretty much seals it.

      No matter, it saves us all the trouble of pretending. At least maybe we can finally dismiss the ‘Rusty as multiple houseowner’ meme.

      So Eyesthebye, what say you about that EastVan benchmark?

      Rest assured I’ll be sure to pull up your response in two years time.

    • I’m very tempted to invite rusty/eyesthebye to my office downtown so she can see that there are renters, like me, who can afford to buy her East Van house for cash–even at these inflated prices–and that a person doesn’t have to be poor to be extremely bearish on Vancouver real estate. I think, however, that the cognitive dissonance might make her head explode.

      Let me know if you’re interested, rusty/eyesthebye. We can go to Hawksworth’s for lunch. My treat. I’m dying to see if you’re as obnoxious in person as you are online and to observe the hubris first hand.

    • what’s your point jack? as far as i can tell you don’t know much of anything except your own greed and selfish position and you are hoping to learn something here because you are worried that you missed the boat on selling at the top. Half the reason for leaving Vancouver in my opinion is to purposefully NOT fork over hard earned money to assholes like yourself.

  12. When i bought my house, I put 25% down and it was about the same price as renting. I also had a second apartment I could rent out and so I did. This made it possible to pay double payments on my mortgage.

    The double payments came to $1500.

    I did see over 50 houses before I bought this one, so I shopped a lot and I added value because I added a kitchen, there was three kitchen cupboards and I busted out quite a few walls. All in all part of the reason I picked this house was because I could add that value.

    That is a sign of a balanced market. Rent /price ratios are totally out of whack in Toronto and Vancouver. Traditionally it does cost a slight premium to rent than to buy with 25% down. This is because no investor in his or her right mind would ever buy a place that does not pay him to own it. If it doesn’t they don’t buy. I can assure you that there are tons of savvy investors currently patiently sitting on the sidelines, waiting for prices to become reasonable again. Many others are selling. In the last few months 3 of my property management clients have decided to sell. Good for them,

    • “When i bought my house, I put 25% down and it was about the same price as renting”.

      if it was 5+ years ago you can kiss those conditions goodbye forever. Immigration in Vancouver and Toronto creates a whole new buying scenario. You might as well ask for 1960 prices than ask for market conditions in these two cities to stay the same for more than 5 years.

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