Professors Cross Threshold – “After this fiasco we are completely done. I phoned U.Alberta today and told them that we will take the jobs if they offer them to us. In our view this city is being rapidly ruined.”

‘mjw’ writes, in two e-mails to VREAA, 5 & 6 Oct 2011 –
..“What happened to us this past weekend offers a glimpse at the ridiculous game being played out on the westside.
..My wife and I are both profs at UBC, mid 40’s and have been trying to “upgrade” from a duplex on the westside to a SFH in Kits in order to get more space for our family, while retaining a good school district and a short commute. I wrote a post on VREAA a few months ago [12 May 2011] indicating that we are applying for academic jobs elsewhere in Canada. However, finding comparable work for two senior academics is a challenging enterprise, and takes much time to sort out. To make a senior hire in academics is often a long process, and the department needs to know that the candidate is serious on accepting if an offer can be generated. Fortunately, my wife and I are both at the top of our professions and we have been “head-hunted” a few times since 2000, but on those occasions had decided to stay in Vancouver. Fortunately, we both have interviews at U.Alberta in November, and we are pretty confident that this is where we will end up.
….In the interim, we continue to look off and on in Kits with the idea that if we are able to find something decent around the 1.5M price range we might just suck it up and try to buy it…
….In this light, this past weekend we went to the open house at 2655 Waterloo street [MLS number V912486] advertised at the magic number 1.488M…
….If you look tonight [5 Oct 2011] you will still see this as the advertised price. It was an okay house, not great by any means, no dining room, a 10 times 11 master, nanny suite rather than a basement suite, low ceilings etc…. The presenting realtor was so obnoxious that I was worried that my wife might launch at him during the open. The house was significantly less desirable than 1.6M homes that have sold in our neighborhood since last spring that we have seen in (and were unsuccessful in getting during a bidding war).
….Anyways, we made an offer in the low 1.5M’s, and were one of 3 offers presented this past Monday at 1pm. I have a sense from what our realtor told us that we were the highest bidder.
….Got a call from our realtor on Monday evening saying that they were rejecting all offers, as they really wanted a price of 1.698M (which is simply 210,000 more than the price of 1.488M advertised on the weekend of October 2nd). You can see the new listing and the new price on the realtor Julia Lau’s website (scroll down to 2655 Waterloo street listing).
….On Monday evening the listing realtor contacts our realtor and asks “are we interested in purchasing at 1.698M?”…. My first thought was that someone clearly has transposed some digits?… surely this is a joke?… Anyways, it is no joke, this is precisely the game being played here…. and perhaps is being played out in many other “transactions” on the west side…. A complete waste of everyone’s time (writing offers, visiting open houses etc…)…
….After this fiasco this past week we are completely done. I phoned U.Alberta today and told them that we will take the jobs if they offer them to us.
I don’t know if this is normal procedure; advertising one week at 1.488M, and then the next week at 1.698M… but this to me is a clear sign that there is rampant speculation and that buying bricks and mortar has turned into an auction…. In our view this city is being rapidly ruined…..

….“Renting a SFH on the westside is very unstable; places are being flipped like burgers; there would be little stability with regards to schools for the kid. I have watched my graduate student have to move 4 times in the past two years owing to the fact that his basement rental (shared with another student) is in a house that is being flipped. The overwhelming feeling is that at this stage of our lives it should not be so difficult. We will have an easy go in any other place in Canada…..
….I think that some sort of activism is needed to highlight and make people aware of the game that is being played out. If this type of behavior receives more “press”, hopefully individuals will choose to boycott the system until some sanity returns. I do hope that some maverick decides to run for city councilor who can really communicate the difficulty faced by so many families. I think it would resonate with so many people…..”

A remarkable story.
The loss to Vancouver of two bright professionals, and their family.
One example of the misallocation of human capital caused by the speculative mania in housing. It is crippling our city.
Only the most blasé RE bull will be able to read stories like the one above without feeling concern for the health of our community.
– vreaa

46 responses to “Professors Cross Threshold – “After this fiasco we are completely done. I phoned U.Alberta today and told them that we will take the jobs if they offer them to us. In our view this city is being rapidly ruined.”

  1. I like the greedy Realtor bidding war trick. So frustrating!

    Also frustrating: convincing greedy owners their expectations don’t match reality. It almost makes me feel sorry for the Realtor then I reread the previous paragraph. F*ck ’em.

    Agree vreaa when no solution exists for this family it’s a proof there’s a problem.

  2. Wow – this sort of lunacy needs to make it onto the front page of the Sun or Province, maybe hen our head-in-the-sand politicians will see the down-side of pandering to developers and the RE industry.

    • Agree. Spread it around.
      Education is the best form of activism.

      • Occupy Vancouver will be looking for direction and even speakers starting October 15. Organize your thoughts, help them. What do you think the main “we are the 99%”-issue is in Vancouver?

  3. Given the recent turn in the market on west side, this seller (who is a buy / reno and flip) may wish they had taken 1.5M. This is one for us to watch and post a follow-up in 10 months – when it may have sold . . . . Certainly a frustrating process but as people like the profs act with their feet and wallets – – the market will start to react. The HAM as already started to slow and even start to leave . . . .

  4. I don’t think there is anyway, even a double income, professional family trying to buy on the Westside can compete with HAM funds.

    The former have paid off student debts, gradually worked their way up the ladder and are paying up to 45% tax on their earnings. The latter have come across windfall profits, often untaxed, and so an extra $100-200K has little effect.

    The professional couple has no choice but to move further from work, or take on extra risk that has been put on them by a greedy seller and Realtors who could probably not function in a normal market.

    Very sad. However I suspect that these stories are now restricted to areas where the HAM are active. I doubt very much whether this happens in Coquitlam eg…where both sales and prices are down.

  5. What an insane story. Unfortunately I think there are all kinds of this, if not downright illegal, certainly unethical real estate behavior going on in many cities. Being from Ottawa, I don’t know why I’m so fascinated with the story of Vancouver RE. I came across this site over a year ago and regularly visit. As an outsider, it is the same sense I get when I drive by a car accident. I feel a little bit guilty looking at the crash scene, but I can’t help myself. I want to know what’s going on and how bad the damage really is. Of course I hope no one is seriously hurt, but inevitably with car accidents some people do get hurt. And inevitably once the Vancouver RE crashes, many people will also get hurt. I really do wish unethical RE practices would end. I’ve heard countless similar stories similar to this one.

    In my city, I bought a house 4 years ago. At the time we were using a young, eager agent who showed us a few places and ultimately helped us decide to make an offer on a nice 2-storey home in a mature neighborhood. We made our offer slightly below asking price. Not long after, we received a phone call (no official counteroffer, but a phone call) saying that there was another buyer involved who offered the asking price. If we wanted the house, we were told we’d have to submit a second offer above asking. I was so upset because my understanding is that agents aren’t supposed to disclose the amount of any other offers on a property (maybe I’m wrong here). I not only said that I wasn’t going to send in another offer, but I also fired our agent for bringing such a proposal to me. If they didn’t like my offer, they should have officially rejected it or countered. They should not have phoned me and asked me to submit a higher offer. I will not put up with that sort of unethical behavior. In the end, we didn’t get the house. It was never necessarily about the money. We could have afforded to increase our initial offer. I just didn’t appreciate their tactics. Instead, we bought a nicer (more expensive too) home in the same neighborhood, and our agent lost out on the commission from the house we bought, and the two houses we sold. Yes, we actually sold two houses we owned to buy the one we bought. So in all our agent lost out on the commission to three places. If the agent had not been unethical, she would have done quite well with us.

    • Cy -> Thanks for the story, interesting.
      We suspect that very few buyers here behave within the same ethical guidelines that you suggest, and that you model, in your example. As a result, during Vancouver’s boom, all sorts of horse-trading tactics have become the norm. Vancouver agents have been rewarded by condoning and using these tactics (or, at the very least, they have not been punished) as very few people would have taken business away from them (as you did) for doing so. We suspect that they simply feel this is what must be done to make a sale.
      This is an example of how looser practices become the norm on the way up.

      Watch what will happen: the bubble will burst, on the way down there will be the inevitable choruses of voices looking to lay blame; baying for blood. Many bubble players and practices will be blamed. Some will blame the tactics you highlight. Committees will get to work ‘reviewing’ the practices, making suggestions, etc etc. Then, right at the very bottom of the market, years hence (4? 5?), regulations will be instituted making it harder/illegal for players to use these tactics. This will occur at the very point that buyers need the regulations the least.

      That’s what always happens in markets. Witness regulations on margin accounts in stock markets. Loosened in exuberance near tops; tightened in fear near bottoms — the precise opposite of the most sensible measures.

    • Wait, I don’t get it, how is your agent’s fault? Isn’t it the selling agent who did this? Your agent is required to bring all seller’s proposal to you. They can’t reject anything without at least letting you know! Geez…get off your holy high horse and actually analyze the situation. How would you like it if your agent didn’t tell you stuff just because they didn’t think it is not important, ethical, good, or whatever? You are taking out your anger at the seller on your agent which probably didn’t do anything wrong, other than maybe not reading your freaking mind.

      Geez…..assign blame to it actually lies, the seller, stop going on power trips against people who’s only trying to do their job.

      • Well, perhaps I didn’t convey the entire story. First, I think my agent should not be discussing other offers with another agent. I’m not 100% sure of the legality of the situation, but I think it is a bit unethical on the part of both agents (mine and the seller’s agent) to be discussing offers from other parties. Second, and this part I didn’t explicitly mention, but my agent was “encouraging” me to play the game. She was upset that I would not up my initial offer. She wanted me to increase my offer without ever receiving an official counteroffer or rejection from the seller. I’ve bought and purchased many homes and this was the first time an agent asked me to increase my offer while my initial offer was still in place. How was I to be sure, even, that another buyer was involved? In my opinion, both agents were accomplices in this unethical (if not illegal) RE practice that most people just accept as normal when it really shouldn’t be.

    • perhaps there’s a realtor reading that can clear this up for us.
      I always understood that if someone offered full asking price the seller was obliged to accept the offer (provided there were no other offers on the property/bidding war). What happened to this regulation?

    • Cy,
      I fired my agent for similar tactics. She tried every trick she must have learned during her realtor courses.
      Who is she? Perhaps we’re talking about the same person

  6. Regarding strategies for political activism, there’s a really interesting piece recently written by Tristan Markle in on the lessons Vancouver could learn from the 99% in Hong Kong. “Just this past March 26 2011, Hong Kong activists staged a protest in one of [developer] Li Ka-Shing’s supermarkets “because property developers, not the government, were the ‘real enemies of society’” [1]. As an act of creative civil disobedience, protesters filled shopping carts with items, then stood in line without buying anything, to “paralyse property hegemony for an hour.”
    I’m sure we’ll all remember Mr. Li Ka-Shing, whose Concord Pacific bought the False Creek Expo Lands and continues to make a killing.

  7. These stories related by MJW above (I’m grateful you took time to post) — outrageous prices, outrageous speculation, outrageous rental conditions, and people leaving — are exactly what I’ve been posting about in the last few weeks to the VREAA.

    I like also this professor’s call to activism!

    VREAA host — I’ve spread the word about this blog to various people, including someone in this city very involved in politics and very concerned with what is happening. He wrote to us (a small group starting to coalesce) two days ago that “There’s lots of interesting information” on the VREAA site. Hope he spreads the word further. Thanks again for the host’s efforts and so many commenters’ to bring some perspective and sanity to what’s happening here.

    And a couple of weeks ago I was suggesting here that people write/phone City Council, MLAs, etc. I hope people do.

    Finally, I’d mentioned that Israel had taken it to the streets about unaffordable housing, and I think I mentioned protests in New York too (I was referring to the Occupy Wall Street demonstrations). Terrific to see there will be an Occupy Vancouver! I’d like to propose anyone who might want to participate actually occupy absentee-owner houses.

    • Thanks, Vesta.
      I think you know that we are pretty much on the same page as you in hoping that the housing disaster can be resolved, such that Vancouverites can then get on with productive activities unhobbled by excessively draining RE costs.

      I do believe that getting the word out; educating; is the best form of activism.
      But, other than describing what we see, what is the desired ‘message’? On this I am unclear.

      My concerns are that a great deal of coming distress is ‘baked into the cake’… There is no way we could hope to ‘educate and extricate’ the City of Vancouver from this mania without a great deal of pain.
      We can educate those who will listen such that they try to get out early, but only a very small minority would ‘escape’. And, realize that every ‘escapee’ would have to sell to someone who then takes the subsequent fall… so no resultant net gain for the group.
      Understanding the nature of speculative manias, I see no way forward but for a flushing-out of all speculation from the system. This will result in a price crash of 50%-66%, and general (temporary) mayhem for the economy and the society. Many will be devastated by that outcome.
      There simply is no way of landing this ‘softly’… there never is.

      Having said that, what is the very best overall outcome we could hope for? How do we direct the ‘action’ of any proposed ‘activism’?

      We will likely headline a form of this comment for discussion.

  8. Hey host! Thanks for your reply.

    I agree with you that education is the best form of activism. I realize that you and other commenters on this site have a far firmer grasp of the history and economics of speculative manias than I do or could hope to achieve. With all the reliable information, knowledge and wisdom on this site, the seeds for change are already being planted. I honestly didn’t know so many other people in Vancouver found this whole situation as nutty as I did till I started reading your blog. There’s strength in numbers (pun intended).

    Sometimes I think a lot of hoo-ha is one good way to spread the word (a rally/march/act of civil disobedience that actually gets newspaper coverage). The sixties activist Saul Alinsky said nothing gets done without confrontation. It’s a very, very different situation, but Rosa Parks refusing to sit where she was supposed to sit on a bus sparked a lot of good changes. How about a Vancouver graduate student who’s had to move from basement to basement 4 times in 2 years (see latest postings at UBC website — including one that talks about speculative manias and densification!) finding the biggest fanciest unoccupied house in Shaughnessy and moving right in?

    As you wrote above, “There simply is no way of landing this ‘softly’… there never is.” (A financial advisor we know says the scariest phrase in the language to him is ‘soft landing.’ He echoed you exactly in suggesting that “soft landing” always means something more on the order of ‘total catastrophe.’)

    “Having said that, what is the very best overall outcome we could hope for? How do we direct the ‘action’ of any proposed ‘activism’?”

    Excellent questions. It seems to me too like any outcome of this bubble is going to be devastating for some, though let’s hope reforms arrive in the aftermath.

    As for directing the action of any proposed activism — I’d just say encourage people to do whatever they think might work to spread the word, perhaps encouraging public protests (about unaffordable housing) that could further spread the word locally and nationally. I understand from reading this blog that bubbles have a life of their own, and that they’re going to float/pop whither they will, but unaffordable housing in general/unstable and miserable rental conditions are eminently protestable in the meantime.

  9. I have great empathy for these people and the bullshit that’s still going on in that particular area. However, I think we “realists” sometimes key a bit too much on the last remaining bubble outposts. Let us not forget what the market now looks like in places such as the Fraser Valley, Vancouver Island, the Okanagan of course, Whistler, etc. The periphery is dying.

    I’m still on realtor hot sheets for Langley and Abbotsford (we were considering buying there before we got smart and opted to rent in South Surrey instead), and I gotta say there’s a dramatic difference in what shows up in my Inbox now versus a year ago. We’re talking price reductions folks, and a lot of them. There’s one SFH that showed up today, for example, that’s now dropped $50,000 from its original $530,000 price point – a three-stage reduction that totals 10%. Indeed, I’ve seen several decreases in the past few weeks of 10%, though this particular house is notable for being in Cloverdale, right on the boundary of the glorious BPOE.

    Ten percent is just the start. Soon it’ll be twenty, then thirty, and more. In any case, the correction is here. But like an elderly porn star, it’ll take some time to penetrate fully.

    • “like an elderly porn star, it’ll take some time…” – Gord

      Now there’s a visual, Gord. Fortunately, I had already swallowed my coffee prior to reading that.

      In other news, “NewPrice!” – Nem’s BakerStreetIrregulars have identified one DunbarUltraPrime shack (listed n’ languishing since June) whose ask has been reduced by a whopping 900Large. In one fell swoop. Perhaps their strategy (as per shennanigans detailed in this /thread post) is to incite a ‘frenzy’ of OverAsks achieving something closer to the original list. Then again, they may just want out. As in immediately.

      To conclude, a fascinating anecdote from this morning’s G&M…

      “… [Wang Huiyao, founder and president of the Beijing-based Center for China and Globalization] said many Chinese have become what he calls “seagulls,” going back and forth between San Francisco or Vancouver, and Beijing or Shanghai. He is a seagull himself: he is spending the academic year at the Kennedy School of Government at Harvard University in Massachusetts; his institute is in Beijing; and he owns an apartment in Vancouver, where he once lived.”…

      [G&M] – Immigration undergoes a sea change

      Aside: IPE scholars have known about this for a very long time – e.g. elminate migratory temporal/spatial/flow barriers… and you empower geographically transient epistemic communities ‘o transnational capital (& attendant technocratic elites) of no fixed allegiance/abode. The carcasses ‘o conquest they leave in their wake are the telltale.

  10. I think it’s good these two so call professors at the top of their profession left. If these two can’t see anything wrong with buying a $1.5M average house in Vancouver then they are really just ivory tower academics who also suffers from sheer stupidity when it comes to real life. I hope these two leaves real soon so they wouldn’t be around to pollute the innocent minds of young impressionable kids. No sympathies for these two. They should know better than to be bitter, complaining about not able to buy that $1.5M house they think they deserve. If they can’t figure out this is a bubble then they are just too stupid to be considered as intellectuals.

    • Disagree. If they’re on tenure they can afford it and have done the math (one assumes). Doesn’t make it a good financial investment but how are they any different from the aspiring Chinese entrepreneur looking to secure early retirement for his young family? The reality is, at the base, they aren’t. Occupy that.

  11. Hey it’s not like politicians are oblivious to stories like these. Simply search through vreaa’s archives to hear comments from people “of influence” lamenting about their children unable to afford to buy property.

    OK so I do have a bit of an issue here. We’re talking about somebody wanting a detached house in an extremely desirable part of the city. These types of houses are dodos — less common as population grows — and have been increasingly priced as dodos for decades for anyone following relative price appreciation graphs between regions of the metropolitan area.

    I’m not justifying the prices here but to think that a professional family is somehow entitled to a detached house is questionable. Detached houses close to UBC are a scarce commodity and, IMO, we should be questioning the wisdom of perpetuating this. Maybe this is an uncomfortable reality and will cause people to “hoard” the endangered SFH but we should understand the consequences of our desires vis-a-vis an expanding city.

    Are bears looking for low prices because the city needs lower-priced dwellings for everyone, or because they want what their parents had?

    • I think bears are looking for proportional pricing. Family with average incomes and responsible spending should be able to buy average homes, and families with above average incomes should be able to buy above average homes. But right now that is not possible to do in Vancouver.

  12. Same Slimy realtor scam was at a condo we looked at a couple of weeks ago. Asking $799. When we got there the realtor (Spice Lucks) told us a we got in the door that ” the asking price maybe $799K but there is a bidding war with some off shore offers and the condo will go for over $900K, probably closer to $950K.” A city out of control and nobody cares!!!

  13. OMG, give it a rest already professor.
    Can’t live in the most expensive neighbourhood in Canada (Kits) so you’re moving to Alberta?
    1.5M will get you a fantastic home in most areas of the city.
    Your post is dripping with arrogance.
    Can I help you pack your bags?

    • “1.5M will get you a fantastic home in most areas of the city.”

      Well, it’ll get them about half, or less, of what it’ll get them in Alberta.
      Look at the house they were bidding on.
      Their frustration is legitimate.

      • elitism and entitlement.
        Their frustration is ridiculous

      • Hardy ->
        Then you don’t get the problem; in fact, you’re making the “shut-up-and-accept-less” argument for exorbitantly high Vanc RE.
        People are simply comparing what they get here with what they get elsewhere, commensurate with their income, skills, education.
        This couple aren’t being ‘arrogant’, their frustration is an understandable consequence of the very, very poor housing situation here.
        By leaving (our loss) they are simply saying they’ll go where market pressures lead them (and we’ll continue to live with the consequences of the perverse market pressures we endure).

      • “Their frustration is legitimate.”

        vreaa, the frustration is that they think they should be able to afford an SFH close to UBC. Is that a realistic assumption, and what are the consequences for countless others who want to live in the same neighbourhood?

      • jesse -> Thanks for the question.
        If we didn’t know you better, we’d think you were making another of the ‘Limitless Demand Arguments For Ongoing Market Strength’.
        Let us consider your cited ‘countless others’ who would like to live in a SFH close to UBC:
        How many of them should realistically be buying a property for 250K? 500K? 750K? $1M? (How long would it take a family to actually accumulate a disposable after-tax 250K? 500K? 750K? $1M? – for the majority of families, a lifetime).
        If we were not in a speculative mania, the vast majority may drive by Kits, say “Gee, nice area, pity we can’t afford a 450K-550K house on our 95K household income”, and return to their very comfortable 150K-250K-300K SFH elsewhere in greater Vancouver.

        There will always be price scales, and more desirable areas will always be higher priced, but higher prices can’t simply be put down to higher desirability: this mania has inflated prices by a factor of at least 2-3 (across all sectors).
        Should THIS house be priced at $3.2M?
        If not, why not?
        If ‘countless others’ want to live in it, why not price it at $5M, $10M?
        The point is that those ‘countless others’ are actually quite finite, in number and in monetary resources, even in these loose-lending times.

        BTW, those ‘countless others’ desiring high end westside property appear to be sitting on their wallets. Point Grey SFH inventory has gone up 56% yoy, from 50 in Oct 2010, to 78 in Oct 2011.
        Seems asking prices may be too high.
        Seems buyers looking at these prices and feeling ‘frustrated’ may have a legitimate cause for their emotion.

      • “There will always be price scales, and more desirable areas will always be higher priced, but higher prices can’t simply be put down to higher desirability”

        OK so one thing I can state here is that the west side SFH (i.e. SINGLE family house) is a scarcer and scarcer commodity. This has been the trend for decades — generations, even — and increasing real prices for bungalows is a fundamentally justified market reaction based on future cash flows. What much commentary here is tacitly stating is that a professional and civic-minded family should somehow have the ability to afford this type of property. I disagree. If prices somehow manage to fall to rental equivalency — discounted cash flows at highest and best use supporting sales price for an investor — this will put this SFH well above the median income of even the prevailing residents in the neighbourhood.

        If I take a step back and look at other cities such as San Fran, Stockholm, say, there is higher density closer to the core than Van West has right now. And looking at neighbourhoods like Kits, West End, Fairview, or Mount Pleasant show how increased density is nothing new.

        If this family wants to secure a plot of land in part of the city close to the core that has repelled density increases for a while now, go for it, but don’t think they will ever get a good price vis a vis rents for it. Much of their investment will be through capital gains, not equivalent rents. That does not make this property a good investment but the 50% off call may turn out to be a bit more wishful thinking than reality, though I’m sure deals may spring up for those with large buckets of cash and no existing property to unload.

        As for “limitless demand” that is not the argument at all here. There has been a constant divergence of Van West from other regions for whatever reasons. This is nothing new and is, IMO, the simple product of sustained population growth into a city with a desirable urban lifestyle only existing in certain areas. The decades-long phobia of serious density increases is now coming to a head. As to what’s a fair price for this bungalow? I have no freaking idea but I can tell you to a much higher degree of accuracy for a condo.

      • jesse -> Thanks, good response, as always; much appreciated.
        And I do get your point. We can’t simply always use rent:price ratios on these properties (we all know they’ve been laughably insane, anyway; recall the one 1:1000 example), we realize the value is ‘in the land’. But what exactly does that mean?: one issue becomes trying to get one’s head around the effects of likely future density changes on where current price levels should be. As you put it, the consideration of “— discounted cash flows at highest and best use supporting sales price for an investor —.”

        It occurs to us that there are some very intriguing variables to consider, including:

        1. What would be the effect on lot prices if suddenly there were no density restrictions at all on any SFH lot in Vancouver?
        Would prices of lots rise? (you could build and market more units on a lot, but so could everybody else…)

        2. Obviously, to get to “highest and best use” there is a need for considerable capital outlay.

      • “1. What would be the effect on lot prices if suddenly there were no density restrictions at all on any SFH lot in Vancouver?
        Would prices of lots rise? (you could build and market more units on a lot, but so could everybody else…)

        2. Obviously, to get to “highest and best use” there is a need for considerable capital outlay.””

        I don’t know how it would go for sure but I would think, assuming prices were “fairly” valued, that prices would increase due to future certainty of highest and best use. There are limits here where high construction costs would prevent certain dwelling types from being built. It’s a bit of an odd situation on the West Side because, now, there are ostensibly extremely wealthy people who have bought who will prefer a large lot. In the early ’90s I remember one block where two small lots were combined to build a larger mansion, hardly density increases by any stretch.

        IF it’s true that large lots in VW are going to build mansions, the City needs to seriously ask whether that’s in the best interests of building a livable city in the long run. All new mansions or large houses being built today are staying for several decades, perhaps even longer, so I hope they understand what a high level of construction of single detached homes recently means for the ability to add density going forward.

        So there are the luxury factors that are playing on the West Side, justified by past actions going back decades, that will always throw a wrench into the gears of any investor’s calculations and we’re left with guesswork and sticking a wet finger up in the wind. This is in its essence the “limitless rich people” argument and it can quickly fall apart due to various factors — not least a retrenchment of consumption instead of investment in certain economies. Harcourt et al are calling for a multiplex mandate for all new builds. I’ve been hearing suggestions of graduated taxation on those underutilising land, so as to elicit more density. That’s already happening to a certain degree given how land values have skyrocketed of late, but it may be worth considering taking it further. Land squatting is doing the City no favours, save to those lucky enough to have title, or get invited over for afternoon drinks in the large back yards.

        No easy solutions, I’m afraid, but west side properties have been known to crater tremendously from time to time, but if that’s the case you’d probably want to be in cash.

  14. Pingback: Calls For ‘Activism’ Regarding State Of Vancouver RE Markets | Vancouver Real Estate Anecdote Archive

  15. I am not a realtor, but I do know for a fact that any offer can be rejected (even over asking price), just as any offer can be rescinded by potential buyers if the appropriate subjects. Julia Lau is a realtor well known for using the price bidding war tactic. She uses it on her marketing materials to gloat about how much she sells over list price. That said, perhaps the bid offer rules need to change, so that any bid above an explicit reservation price must be accepted.

    • I’m more interested in knowing if RE agents are allowed to disclose to each other the actual dollar amounts of any other bids on the same property. I’ve been told by some that they are not allowed, yet I know many others do that very thing. Maybe it isn’t done formally, but they can certainly “allude” to a certain amount that you will have to exceed if you want to buy the house. Heck, I know firsthand that some don’t even bother alluding to a price and come right out and say they have another offer for this amount so you will have to exceed that amount if you want to have a chance at the property.

      • An ethical realtor does not provide any information about another offer. Period. End of story. A realtor is supposed to let other parties know only that they have received an offer – indicating other offers be strategized accordingly. If the best offer meets the sales requirements and the seller pulls their offer based on a new requirement then you should complain to the real estate board and council and proceed with civil action. It’s that simple. At the very least you should never do business with the listing realtor and complain to the better business bureau, etc. It’s important to let scumbag realtors like this know that their ways are not welcome in this country and that the can go back to their filthy corrupt China.

    • By the way, why would you ever buy a house from a realtor whose marketing materials says “I get my buyers to pay more?”

      Would you buy groceries from a supermarket that gloats “Our customers pay more!”?

  16. Pingback: Calls For ‘Activism’ Regarding State Of Vancouver RE Markets – What Action, Exactly?

  17. I received this gem from a long-time local investor in houses:

    1. Assume most realtors are ethically challenged. They’ll flex their greed muscle for cash.
    2. There is no such thing as a “buyer’s agent” as long as the both selling agent and “buying agent” are being paid by the seller with commissions. The only way an agent is working for you (legally, morally or otherwise) is if you are paying them and they are not taking a commission from the seller. Otherwise they are working for the seller.
    3. Structure your bidding strategy around #1 and #2.

    So what do you do? Here’s one suggestion for this aggressive environment.

    1. Do not use a buyer’s agent. Cruise MLS, go to open houses *without* an agent. Educate yourself on the market, offer structure, boiler-plate legal agreements used. Probably wise to have your lawyer on board.
    2. At open houses, let the selling agent know you don’t have a buying agent. The twinkle they get in their eye is a result of (i) seeing fresh meat, and (ii) more importantly seeing the potential of a double-ender commission for them….they don’t have to split the commission with anyone.
    3. Now, this is where it gets ugly. Quietly let the selling agent know you will be putting in an offer *after* the deadline (for those properties that still have a deadline for bidding). Instead, ask the agent to give you a call after the deadline passes to chat. You’ll wait for their call.
    4. Now sit back and wait for a call from an ethically challenged realtor who will possibly sell-out the other bidders for your offer because they get a double-ended commission. Wait for them to *hint* at the highest price bid or terms that will make your offer fly (don’t be too rude and ask for the number – just expect some hints….allow them to maintain a fascade of dignity….in their mind). Not all do it, but some of the sleeze-balls will spill.
    5. Then decide if you’re going to play and present an offer, late, but somehow still accepted by the agent.

    So there you have it. If you really have to get that house, then game the lack of ethics in the real estate system. Or not. Anyone putting an offer on any property in this region is already crazy….and signalling they are up for being abused by these agents. They’re asking for it. (Sorry mjw, but with a Ph.D you presumably have a thick skin and a large brain….time to use it and get outta Dodge before you see another house-of-your-dreams and decide to make an offer.).

  18. Education is Another Bubble

    Get a job in the real world whereby you have to undergo performance review, instead of hiding in a tenured-secure job in the ivory to wer.

    I worked hard and owned a place, I did not feel entitled to owning one – it was via hard work and astute investments.

    • sessional lecturer

      Do you have any idea how difficult it is and how long it takes to become a tenured prof? Unless you are a scientist and can pull in research grants, the pay is less than a middle school principal. Performance reviews are done by your bosses, your peers and your students.
      I think this family wants to live in a place that can handle their kids and they likely want to get to work in a reasonably sustainable way; i.e., not driving for 1 hour each way.

  19. I’ve seen Julia Lau do the same thing with a listing between 17th and 18th on Trafalgar in Oct/Nov 2010. Posted one price, can’t remember numbers, like $1.2 million, 100 people walk through and I assume for sure offers. I guess all refused and the next week post it for $1.4 million. In the end it sold for $1.280 million. Definitely would hire this person. I’ve heard other stories. Just be happy they didn’t accept your offer. Listings are way up in the core west side ‘hoods. Dunbar, Kits, Arbutus, Point Grey, Quilchena and Mackenzie Heights. As well as the MOST ridiculous prices ever. Sorry, but even HAM isn’t jumping into this. To me this would be the ABSOLUTE last time to jump into this market. Unless you really do think it’s different here and an crappy bungalow on a tiny lot at $1.6 million, 16 times average income, or almost 4 times what is would have cost 10 years ago makes sense?

  20. CanuckDownUnder

    I call BS.

    A household with roughly $1 million equity in a Kits duplex and two six-figure salaries are too precious to rent this bubble out?

    Sydney is expensive too. To buy.

    I’m willing to pay 8% to a capital owner to rent. Based on that my 3 bedroom 2 bathroom unit right on the Eastern Suburbs & Illawarra line costs me the equivalent of $302,250. This is a 50% discount to what the property would sell for today.

    What I save from not having a mortgage I end up blowing on crap like vacations (hello South Island again in December!), platinum, or simply adding to the rainy day house fund for the time when RE prices have fallen considerably.

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