Seller Epiphany – “I sold and have $2M in the bank. My original plan was to wait until prices settled before buying a knockdown and building again. But a feeling has come over me I thought I could never have: I am beginning to hate Vancouver.”

Alex sold his house two months ago for $2.5 million. The buyers were Chinese, from Mainland China. “What else?” he asks. After all, this was West Vancouver. “They wanted our furniture too. We are now renting a furnished house. I have $2,000,000 cash in my account.”
“My original plan was to wait until prices settled before buying a knockdown and building again. But for the last two weeks a feeling has come over me I thought I could never have. Something snapped. I am beginning to hate Vancouver. I use to defend Vancouver to death against the East. Yes, I made lot of money here. But Vancouver is beginning to disgust me. The arrogant, snooty belief that nothing can go wrong here. The multiple offers for homes. The fact there is no industry or decent paying jobs here except if you are a Real Estate agent who drives around in a Porsche and advertises on billboards like a fashion model or actor.”
“Meanwhile we continue to build higher and higher on the North Shore mountains destroying the environment. The Governments have prostituted themselves to the highest bidder, selling citizenship for money and changing the nature of our neighbourhoods. This is not a healthy change. Marine Drive has become gridlocked. Disgusting monster homes with huge retaining walls being built. Everything has become too expensive here and beyond logic.”

Alex in West Vancouver as relayed by Garth Turner at greaterfool.ca 9 Nov 2011

The interesting thing is that Alex has probably had these thoughts brewing for years. They have now crystalized with the sale of his house. The emotional attachment to the hopeful bullish position has departed, so the thoughts rise up, and become conscious and articulated.
There exists a super-saturated solution of these thoughts in the minds of Vancouver owners. They know that housing is very, very overvalued; they know that Vancouver is a nice city, but limited in all sorts of ways.
What will it take for everybody to suddenly realize the truths they already know? What will the seed be around which the realization rapidly forms?
What will do it is falling prices.
Unlike Alex, very few will be able to sell before they admit these thoughts.
The moment prices pull back substantially, RE will look different.
Owners will realize what they already know: that their $1.1M SFH or $400K condo are very modest structures, very overvalued, with lots of downside risk.
This realization will bring sellers to market as they attempt to realize their fantasized paper gains.
Prices will drop further; price drops will beget price drops.
The irrational strength on the way up will become irrational weakness on the way down.
This is how markets work, how speculative manias unwind.
– vreaa

36 responses to “Seller Epiphany – “I sold and have $2M in the bank. My original plan was to wait until prices settled before buying a knockdown and building again. But a feeling has come over me I thought I could never have: I am beginning to hate Vancouver.”

  1. “This is how markets work, how speculative manias unwind”

    A thousand ‘thumbs up’ to that statement.

  2. hate is the most common renter emotion.

    • surely “hate” as hyperbole. perhaps to paraphrase epiphany – van has its charms but often behaves like an adolescent wannabee. take metro gdp for example, its about like … denver. nice, respectable, not world class. c’mon maverick, engage.

      • really? Denver?
        Vancouver not world class? Expo, Olympics, tourism, etc.
        Again, a Vancouver hater is a renter – no exception in your case Chubster

      • Yes Diablo/eyes, Denver is a stretch, but not the way you think..

        Expo? That puts Vancouver on par with Tsukuba, Japan and Brisbane, Australia, the two hosts before and after Vancouver, respectively.
        http://en.wikipedia.org/wiki/World's_fair#List_of_expositions

        Winter Olympics? That would be Turin and Sochi.

        You really need to get more world experience. Perhaps try Club Med, or maybe a Gap tour.

      • @diablo. hater? far from it. i was born in van. done the tour, koolaid and all. otoh, you = wannabe, proof in your own words. major “world class” metro center? on the gdp scale, somewhere > 300B-400B. check it out, see how things measure up and what kind of names arise. aside: japanese/chinese food legitimately world class. why so hostile to any suggestion prices might-could-maybe-possibly go just a teensy little bit lower? nervous? longtimers i know with no payments are ambivalent. they know it looks nice on paper but end result is their expenses go up. that would be fine if offset by income. but hasn’t, note the gdp. surely, housing valuation grown > 2X faster than gdp. how much reversal to wipe out the equity? pls share. definitely a whole bunch of people out there taking on big mortgages. maybe someday a few renters get together to buy a few places from the bank, yours included, for use as rental ppty?

      • Diablo-

        Whatever ‘world class’ means, if it applies to Vancouver, it surely applies to Denver. Both are pretty provincial cities but Denver is larger, has a much, much higher aggregate GDP, very good art and museums, shows, good access to great outdoor recreation. Vancouver has good access to great outdoor recreation. There is no comparison from an economic or cultural perspective.

        Cultural ties with the Pacific Rim notwithstanding, Vancouver is a backwater.

      • yes, Denver. Population size is similar.

        I wonder if you’ve ever left the Pacific Northwest.

    • Actually, I suspect that frustration is far more common than hate for those who find themselves on the sidelines.

      Note that in this story the owner who has now sold is likely using strong language to describe feelings that he is having, in order to rationalize what I suspect will be an upcoming move. He is getting ready to move away (no small matter) and he needs strong reasons to justify that. Thus the (irrational) ‘hate’. That’s likely, as chubster says, hyperbole. Hyperbole with a purpose.

      One of the ironies of the coming crash will be that all the irrational ‘love’ that the RE pumpers have shown for Vancouver will become equally irrational negative regard and criticism, and, yes, perhaps in some cases even ‘hate’; all for the exact same city.
      Vancouver will barely have changed but opinions will change dramatically. Vancouver itself isn’t deserving of either extreme opinion!
      It’s a fine city; just that, a fine city.

      • “Vancouver will barely have changed but opinions will change dramatically. Vancouver itself isn’t deserving of either extreme opinion!

        It’s a fine city; just that, a fine city”

        +1.

      • this seller hates Vancouver because he greedily sold in 2009 in an attempt to time the top. Since then the prices have gone up and up. Seller likely hates his decision and his inability to repurchase more than he does Vancouver.

      • diablo -> “this seller hates Vancouver because he greedily sold in 2009”

        Er, no.
        As you would probably say in the same situation “Learn to read!”
        He sold two months ago, probably near the peak.

      • frustration indeed – due to plans that never materialized. This guy had a plan to sell his home for big bucks, then wait for the drop and buy in again when prices are lower and pocket the difference. Great idea – except prices have not dropped yet, leading to frustration.

        Hey dude! You have 2M in the bank, you don’t have anything to bitch about! Go buy your knockdown and build it if you want, 2M should cover it. Or leave town with your money and buy for way less somewhere else. Or continue using the interest on your money to pay your rent here. Because all the things you are now bitching about are the reasons that you were able to sell your home for 2.5M.

      • nuxfan -> “all the things you are now bitching about are the reasons that you were able to sell your home for 2.5M.”

        Haha. Excellent point.

    • diablo -> “a Vancouver hater is a renter”

      c’mon, please.
      That kind of cage-rattling statement just makes you look silly.
      Are you incapable of nuance?
      Do you think that all others are incapable of nuance?

      • let me clarify
        A Vancouver renter who blogs on these sites is a Vancouver hater.
        I call ’em how I see ’em

      • my observation over the many decades…the closer “it” is to ideal, and the more loved “it” is, the more likely there is to be the opposite minority opinion. Some Edmontonians hated Gretzky in the 80’s although he only ever inspired admiration. I can’t explain that either.
        So too do I see this element from the Vancouver renters who post online.

      • Well, call them however you wish to see them, others will beg to differ.

        In our opinion many ‘renters’ who blog here are fond of Vancouver. Why else would they stay?
        It’s the irrational real estate prices that are their source of frustration.
        You seem incapable of teasing apart ‘Vancouver’ from ‘Vancouver RE’, or one’s position on Vancouver from whether one is an ‘owner’ or not.

      • It’s best not to hate, agreed, but leveraged owners better love the place because there’s a good shot that they won’t have much choice but to stay put.

        Reminds me of a hypothetical experiment where students are asked to rate likes and dislikes, half wearing headphones blasting music without the option to turn it off, the other half with same setup but with a mute switch. The latter rated more likes than the former, few bothered turning off the music. Freedom, even if a state of mind, makes us happier.

      • Progress makes us happier Jesse.
        We all have expectations for ourselves formed by our upbringing and experiences. To attend University, find work, marry, have children, buy a home, etc.
        When individuals get stuck at these transitions it creates a lot of unhappiness (even mental health, addictions).

    • I know plenty of folks in the US who have moved around for work. The renters just packed up and moved. The “owners” in many cases have been stuck with a unsellable house, paying the mortgage, maintenance, and struggling to rent it out. Which ones do you think are frustrated at their current situation?

      I also know several folks in Vancouver who bought a small condo or townhouse and now have kids at home. They’re pretty frustrated too.

  3. Alex doesn’t hate Vancouver but what it has come to represent– greed, materialism, reckless speculation etc. Vancouver is neutral. It’s what we impute on it that makes the reality for ourselves.

  4. And so many are busy paying their mortgages that the sparse cultural scene here is unsupported and getting out. Shame on the city and it’s inhabitants. This well written article says it all:

    http://everyonehasthemicrophone.wordpress.com/2011/11/10/theatre-and-vancouver-an-impossible-relationship/

  5. Real estate irrationality is the lesser part of this anecdote.

    This anecdote is reflective of a deep nostalgia for Vancouver’s past – which was a picturesque sleepy provincial town.

    Now, Vancouver is becoming a real city, with the accompanying traffic congestion and environmental degradation associated with it.

  6. “The emotional attachment to the hopeful bullish position has departed, so the thoughts rise up, and become conscious and articulated.”
    ———————————————————————————————-

    Very well put ! (You would do well as a psychologist or a psychiatrist.)

    You have to be a good judge of human emotion and behavior in almost every aspect of life, more so with owning a house which is somewhat of a basal instinct. It makes people emotive, and oblivious of better judgement. Add massive hypnotic greed to it (as in Van RE), and truth and fundamentals do not matter anymore.

  7. Diablo, yes, Vancouver is not a world class city. I just love how Vancouverites go on about the olympics. For a start, what you had were winter olympics – considered second rate. You can go to Tunisia and ask the average man on the street and they will tell you they never heard about the Van 2010 olympics. Summer olympics on the other hand are world class and everyone has heard of them due to events such as the 100m sprint. In elementary school I already knew about Seoul because of Ben Johnson. However, it is only recently that I learned Calgary had hosted the 1988 winter olympics. Even a villager in Tibet has heard of the LA olympics and Karl Lewis being crowned the world’s fastest man.

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