A City Obsessed – “I can’t remember the last time I went out with friends and real estate didn’t come up. Don’t we have anything else to talk about?”

“I was at the grocery store and ran into someone I hadn’t seen in several years. We caught up for about 90 seconds about work and kids and what neighbourhood she was living in and then (totally unsolicited) the person started going into defense mode why she was renting. I told her that I was also renting and that I thought it was going to be the correct solution in the medium term. What struck me was how quickly the emotions as well as the topic of home ownership came up in the conversation. Real estate is top of mind for everyone in this town ALL the time, whether you’re a bull or a bear.”
buffates at vancouvercondo.info 1 Sept 2011 6:46am

“We are obsessed, as a city. I can’t remember the last time I went out with friends and real estate didn’t come up in some way, in the conversation. Odd, isn’t it? Don’t we have anything else to talk about?”
pricedoutfornow at vancouvercondo.info 1 Sept 2011 7:15am

“I ran into an ex-colleague while out biking. After greetings, without skipping a beat, he went into a 2 minute run-down of his housing moves and deals over the last five years, culminating in proudly telling me exactly what his westside house was now worth. He literally became breathless during the last bit.”
– westsidefrank, via e-mail to VREAA, 30 Aug 2011

“When I remember my previous life, in European cities: the topic was never ever mentioned, or just a brief sentence like: “I just bought a HOME.”
painted turtle at vancouvercondo.info 1 Sept 2011 7:23am

41 responses to “A City Obsessed – “I can’t remember the last time I went out with friends and real estate didn’t come up. Don’t we have anything else to talk about?”

  1. “I can’t remember the last time I went out with friends and real estate didn’t come up. Don’t we have anything else to talk about?”

    commenter doesn’t realize that the one common denominator is his discussions is himself. Perhaps this is all he talks about. Coming to real estate forums is pretty good evidence that this is true.

    • pricedoutfornow

      I’ve given up raising real estate as a topic when out with friends. It’s too touchy a subject. It still seems to come up. Lately I’ve been changing the subject, pretend I don’t care one way or another. If someone thinks real estate in Vancouver is going to the moon, there’s no way I can change their mind. No use getting into an argument with them about it.

  2. I have said it before, but what would the real estate market be like without HGTV etc. Way more hype and people are following trends more closely like fashion. People are trying to keep up with everyone else. Could cost people trying to live that way. I don’t remember my parents being like that, or their friends. People used to just live in one house..period. There was no “property ladder” or moving up stuff. Times have changed.

  3. I have an explicit rule not to talk about real estate with people. I have enough of that when I come to sites like this one. And yet, every day when talking to people, someone mentions real estate and almost always in bullish sense. It’s always the same stupid arguments – we are running out of land, Chinese investors, real estate never goes down. Most of the time, I just don’t say anything or try to steer the discussion away from real estate. On a few occassions, I have mentioned the US market and only received blank stares.

    • The blank stares are likely because they are amazed you are unaware of the differences in the banking systems and mortgage lending practices between the two countries…!? That and the fact that each and every decline in RE prices in Vancouver has come back to “overtake” the previous “high-mark” in price. The prices DO always go up…over time in Vancouver…

      • Bullshit. This has been debunked so many times here and on other RE bear blogs…
        G-Man, you are a great example of an obnoxious and ignorant RE bull. I had a lengthy reply ready for you, explaining how canadian banking works, but decided not to post it. What’s the fucking point…

      • Well, there is such a thing called inflation. So you could do this with stocks too, each time the market crashes, it always goes up higher than the crash. It doesn’t explain much. In fact, I would be willing to bet that the average housing price in the US is going to be higher in 10 years than today, but that is not saying much. This certainly doesn’t preclude the possibility of a crash happening in the near future.

        There was a couple of small stock holdings that I bought in 2008 (thankfully it was only small holdings) that I am still underwater on. I am sure in say 10 years they will be higher, but doesn’t mean that I couldn’t have invested in something else that would have made me more money.

  4. G-Man: “…each and every decline in prices in has come back to “overtake” the previous “high-mark” in price…”
    —-
    See Gold 1980, Tech 2000, US housing 2006, etc, etc.
    All speculative manias look like this until they don’t.

    • Why do you even bother responding to him? His argument is just the old “it’s different here”.

      • it is different here. Just as each country, zone, city, and district within each municipality is different. If your friends laugh in your face it’s because you’re naive about this most basic tenet of real estate

  5. G-Man: “The blank stares are likely because they are amazed you are unaware of the differences in the banking systems and mortgage lending practices between the two countries…”
    …..
    Actually, 8 out of ten of them wouldn’t be able to give any kind of comprehensible account of the differences; and the two that attempted to would parrot stuff they’d read about responsible lending, ‘no subprime here’, low foreclosures, etc, etc.
    We’re in a mania, and, by definition, everybody is oblivious to the degree of downside risk.

  6. I am not talking about Gold, Tech or US Housing….only Vancouver SFH housing. Was the price of Vancouver RE more or less expensive in 2000 than it is today? Was the the price of Vancouver RE more or less expensive in 2000 than 1990. Was the price of Vancouver RE more or less expensive in 1990 than 1980… 1980 vs 1970… etc…Besides your profanity-laced tirade, you really did not answer my question? All I said was Vancouver RE has always gone up in price over time….since the City was born…. No or yes? I am not a bull or a bear…just an observer of price over time.

    • So you are saying that you noticed that prices went up. Congratulations. 🙄

    • Oh, just noticed that you are from the Keegan Group. That explains a lot 🙄

    • Well yeah its called inflation, and other than the previous bubbles, which eventually did crash, prices have tracked inflation pretty closely.

      People lost money then, of course nothing close to what will happen this time, this is the mother load of all housing bubbles in Vancouver.


      I like graphs.

      • no, this is not inflation. The cause of higher prices is more demand. And the cause of higher demand is migration. So long as Vancouver grows so do prices. Can’t get any simpler than this.

      • Nice chart.
        Also shows that Vancouver is not different from the rest of Canada, and that the 2009 bounce affected Canda/US/Vanc in unison.
        It’s ALL about cheap money.

    • this fact is lost on non-owners. Yes, prices will always rise over time. Perhaps some short term minor losses but most homeowner (not the flipper or speculator) care very little about these short term losses

  7. Did anyone google Keegan Group? Is this guy a failed personal wealth manager?

  8. “The prices DO always go up…over time in Vancouver…”

    in the long run we’re all dead. buying before a large drop could equal something you can’t come back from.

    • As we almost all know by now, in real terms (inflation adjusted), buyers at the Vancouver 1980 peak took exactly 25 (yes, Twenty Five) years to break even.

      • And while we’re on the topic, it is worth another look at this as well.

        http://www.finfacts.ie/irishfinancenews/article_1019261.shtml

        In real terms, prices were flat over 350 years. The ‘doubling’ referred to in the article is only due to the spike from 2000-2008. If you purchased at the 1728 peak, you only had to wait 279 years to get your money back.

      • from 1600 to 1950 we added 2 billion to our world population. That’s 350 years. Since 1950 we’ve added another 5 billion, in just 60 years. Little wonder real estate in climbing in countries that 2nd/3rd world can immigrate to. Real estate is just a resource like any that’s becoming increasingly scarce. I don’t think this will change without a world pandemic or a closing of our doors to immigrants.

      • And yet from 1950-2000, while the world’s population was skyrocketing, the prices on that chart went nowhere. The final rise, which I pointed out but you somehow missed, that accounts for the ‘doubling’ of prices, only happens after 2000.

        Hmm…if only there where some explanation for why prices supposedly being driven by long term population growth only went up after 2000. If only.

  9. “The blank stares are likely because they are amazed you are unaware of the differences in the banking systems and mortgage lending practices between the two countries…!?”

    And we’ve talked about this before so I’ll briefly comment on my observations after moving here: the mortgage lending practices are not NEARLY so different as you’d expect. I am a bit alarmed by the reverse mortgages, 0/40, interest only-mortgages, the number of HELOCs, jumbo mortgages, the number of people who haven’t fixed in interest rates, and the levels of household debt in Canada.

    I’ve found that many people can’t seem to differentiate between the credit crisis caused by the labeling of subprime mortgages as AAA and the elements which initially brought down US housing prices.

    Canadians can rest assured that their banking system will not collapse. Huzzah! CMHC provides for an automatic tax-payer bailout — the banking system cannot collapse due to a large housing drop.

    But that is a different problem from over-leveraged buyers getting screwed if housing prices drop.

  10. We were cruising around west van yesterday(visiting relatives) afternoon. We happened to notice a ridiculous amount of little open house signs mostly down 22nd – being a long weekend it looks like they are all giving it a big fat push.

    Anyhow, we decided to cruise by a few, guess who was there – loads of middle age asian ladies rushing around with info sheets.

    I just checked mls.ca and saw most of them were in the 1.5 – 2.5 range, a few as high as 4. I know a few decent earning couples (engineers, doctors, etc) with families that are forced to rent….hopefully this madness won’t last.

    Anyways,

    • Just a matter of time now – financial / asset markets are pointing to another 2008 correction except this one will be relatively permananent for Vancouver RE. Buyer demand is declining and prices are now considerably higher so prices will have to drop by a greater amount to bring any appreciable demand back into the market. It’s also now much less expensive and easier for Chinese to emigrate to the US than Canada with recent changes to both countries’ investor visa class requirements. Chinese and HK inflation is very serious now which will force currency revaluations and higher interest rates further restricting Chinese credit just as their export markets and (property market) are evaporating. Vancouver RE peaked in June and have started their steady decline for the forseeable future. Thats my read of things for what it’s worth.

      • While I agree that a correction is in order, I am not predicting a significant crash in prices; just like people who feel that prices always goes up are simply delusional, I am not sure it is a clear cut case that a 50% correction would happen especially anytime soon.

        Let’s assume that the Vancouver bubble was driven by cheap credit (which I am not entirely convinced), US FED is not going to move interest rates anytime soon unless there is risk of hyper inflation which is not happening because the cash the QE released has largely been soaked up onto corporation balance sheets. As such, I would be shocked if our rates will go up significantly over the next 2 years either. So home owners would have a 1 to 2 year reprieve to whatever issues that rising interest rate would have.

        Chinese immigration to US versus Canada is not just based on economic cost. Again you can read my post from a while back about why they come here, but it is not because it is cheap to come here, or else most of the investor immigrants would be in Toronto and not Vancouver which is not the case. Chinese credit tightening is going to happen or else they’ll probably lose control of the chinese populace. But the growth in China is still going to be impressive and the wealth distribution curve will still favor the wealthy. So the rich will still get richer and they will still want to come here, so while you might see a temporary relief, I would be shocked if this flow of investor immigrants will stop. There is a 3 year backlog in beijing currently, they will take a while to process. But nevertheless, immigrants is only a major driver in some of the areas in Vancouver, and not in all areas.

        I think the bigger driver in Vancouver is more the cultural differences than the other cities. I don’t think you can name me another city in NA where it is about 30% chinese added to about 10% indian. When 40% of your population is based in other cultures, you tend to have skewed views of allocation of money; while it is unfathomable for some people to put say 70% of their income to their house, to others it seems normal and rather justified.

        So this is simply my 2 cents, my prediction is a 10% technical correction in Vancouver housing, then we might flatline and stay there for a while as fundamentals catch up to it. But I don’t think that Vancouver will go back to the western average fundamental rent to price ratios because those inherently implies a population that has a certain percentage affinity to renting versus owning which may not be true to Vancouver’ demographic.

  11. Hey bubbly, lighten up. I might actually agree with you, but your reaction to G-Man, and where he might or might not work is kinda over the top. It’s just a blog comment. He didn’t take your money, or rip you off. Just saying.

    • His name is linking to “keegangroup96” – so no guessing there.

      • Who/What are ‘keegangroup’?
        It’s not clear from a google search.

      • From what I have found, there is a defunct website of some investment advisors (to this I have to say, that pretty much *anyone* can be an investment advisor) and a few real estate agents who claim to work for “The Keegan Group”. So it is not surprising that someone associated with such organization would parrot the usual crap that has been debunked about a million times on various housing blogs.

      • Aldus Huxtable

        Anything archive.org can reveal
        In the Wayback machine with the defunct urls?

  12. Yes, G-Man’s does use “keegangroup96” as his gravatar/url, however, that doesn’t mean that he actually is associated with ‘The Keegan Group’, he may just be a troll creating factitious links. That said, our curiosity is piqued regarding the nature of ‘The Keegan Group’.

    As Aldus suggests, a ‘wayback machine’ search does turn up some info.
    ‘The Keegan Group’ appear to be investment and financial planners who have been associated with Scotia McLeod.

    This excerpt from a headlined/featured caption from their site, captured by the wayback machine 15 Aug 2008:
    “Lucky St. Patrick’s Day [2008] may have marked the bottom for the U.S. equity market. At least that’s what a recent poll conducted by Barron’s suggests. According to their survey, the majority of U.S. portfolio managers think the worst is over for equity markets and they are bullish about the prospects for U.S. stocks through the end of 2008. To be sure, creative dealings by the U.S. Federal Reserve have helped reduce the catastrophic tail risk in financial markets, and earnings outside of the financial services sector have been surprisingly resilient.”

    We all know how 2008 proceeded.

    • Haha, great prediction. Maybe that is the reason why they are now defunct?

      As for G-Man, whether he is a troll from Keegan Group or just a troll does not really matter. I am getting increasingly annoyed by the BS, precisely because it keeps popping up out of nowhere in conversations with random people. It really is everywhere.

      I will take Rufus’ advice and stop reacting to trolls.

  13. Really, RE comes up every time you see your friends, within 90 seconds? Thats sad, there should be a lot more to talk about than housing… The only time RE comes up in my group of friends is if we’re talking about various renovations.

    I think the OP’s need to get different friends.

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