“Another two people I spoke to in passing have just decided to list their homes because they fear impending price declines.”

“Another week, and another two people I spoke to in passing have just decided to list their homes because they fear impending price declines… One of them told me their realtor showed them an inventory graph that sounded remarkably similar to the one from VCI, and also said the shit will hit the fan in spring, and that they should really hurry and list to try to catch the last of the HAM before the China crash tightens up the availability of funds from there… and that SFHs will see large declines in sale price this year.”
TPFKAA at VREAA 24 Feb 2012 at 8:07pm

“I was at supper with a large group of friends earlier this week, many who are Westside owners, when one who had never mentioned RE before piped up “Sometimes I think we’re fools not to take advantage of these high prices and sell.”
– West-side Frank, via e-mail to VREAA, 23 Feb 2012

Pumps are primed (People ‘know’ it’s a bubble).
It’s going to happen (Rush to realize profits; sellers storming to market; buyers backing off; steep price drop; self-perpetuating further drops).
– vreaa

52 responses to ““Another two people I spoke to in passing have just decided to list their homes because they fear impending price declines.”

  1. Lets just hope it’s for real this time, unlike in 2008.

    • It was real in 2008, but ‘unreal’ interventions intervened.
      Less likely for this to happen next time around.
      Eventually, reality will prevail.
      Perhaps this time, perhaps later.

      • Check out the archives of this site and condohype.wordpress.com, start in about April 2008 and progress through the first half of 2009. It was looking pretty dire for the real estate industry.

        We know what bad looks like.

      • Basement Suite

        I’m afraid 2008 was just a correction in a raging bull market that continued up until today. Look at this graph. That little pullback was nothing next to the preceding gains and those that followed. Investors bought the dip, that was certainly no crash.


      • Yes, buyers ‘bought the dip’, with money that dropped to 0% real… essentially free. The rate of drop in the cost of money rescued the market.
        No such largesse will be offered next time around, there is neither the space nor the political will for it.

    • I would not get too excited. There are few winners when major corrections happen. I am in the camp of those who are expecting the declines to be on the ugly side. Can’t see how else it might turn out well with China’s lead economists now saying growth will slow to 7% this year and Europe heading into recession. We could really be taking it every which way to Sunday with commodities set to decline, a stock market correction, falling exports, a widening trade gap with the US, home grown austerity and an inevitable consumption plop. You just know recession is now coming so best get prepared and get out of debt while there is time.

      • Basement Suite

        “I would not get too excited. There are few winners when major corrections happen.”

        I could not disagree more. This bubble needs to pop, period. The longer and bigger it inflates, the worse it is. If we finally get an end to this thing, yes I will be thrilled, despite some pain.

      • It might be fine if you are a spectator. Just hope you don’t end up losing your own job as a result. It might “have” to happen but rest assured, there is no joy in it when it comes.

      • Basement Suite

        The joy will be that the healing can begin. It really does “have” to happen for the health of this country. $600k for an East Van basement suite in a house on a lot with a lane house is not good for anyone. I won’t dance for joy at those who lose their jobs, I do not wish ill on anyone. But the pain must come, and I WILL dance for joy at those who can finally buy a home if they want one, and do not have to move away or opt not to come here, if they want to come here. I will laugh very loud when this joke pops, I will not be sorry one iota. It’s long overdue.

      • Basement Suite

        P.s. I do hope I do not lose my job as a result, I even hope you do not lose yours. But bring on the housing crash, lets get it done.

      • Here is a story that might suit you Basement Suite:

        There was a little mouse that peaked through a hole in a wall one day. He saw a bounty of free grain and nuts on the other side and was beside himself with joy. He was a very little greedy mouse and so he squeezed himself through the small hole and ate to his hearts content. The mouse was very contented. When it was time to go home to his family he could not get back out though. He tried and tried but would not fit. A weasel who was nearby started laughing. “You stupid mouse”, he said. “you are too fat to escape. The only way you are getting out now is to be as slim as when you first went in!”

        And that is the story of the mouse and the weasel and why the cure is worse than the disease. It is also an explanation for why most speculators are going to have thinner wallets before this bubble has fully deflated.

        Adapted from Aesops Fables.

      • Basement Suite

        “Here is a story that might suit you Basement Suite”

        Here is a story to suit you, Farmer. There once was a fat, know-it-all weasel who laughed and judged a skinny little mouse who had eaten so much food that he could not fit back through a hole. What the know-it-all weasel failed to realize was that the mouse was not a “spectator” at all but a participant, and the only reason he fit through in the first place was he was starving. So, the mouse was in fact better off having something to eat. Ironically, in this story, it is the weasel who is the spectator.

      • The moral of the story was why the cure can be worse than the illness. I wasn’t actually trying to irritate you. Sorry about that. Nothing personal intended.

      • Basement Suite

        I’m sorry also, for misunderstanding and therefore overreacting. I understand your point, we see it in the US too. We both agree it will not be pain free when it goes pop, but it is not pain free right now either, hence this blog. We might only differ on which we think is worse, the bubble or the bursting thereof. I see the thing going pop as a painful first step towards much better days, and finally taking that step forward would make me happy.

      • I agree Farmer. Too many people have failed to consider the collateral damage that will result from even a moderate correction. Of course, it will happen and it needs to happen, but I wonder how many of us will be able to finally buy.

      • Glad you could see past what did look like an insult, Basement. It was in retrospect I could see why you would be offended even though the story struck me initially as kind of funny.

        Good come back though. I loved your version better. (I am a pompous ass).

  2. “two people I spoke to in passing have just decided to list their homes because they fear impending price declines.”
    Too late isn’t it? Once word is out that the time to sell is here it is already too late to get out. All the more so if realtors are confirming it. A looming stock market correction is all that will be needed to take the stuffing out of the spring market now. It is coming. All downhill from there. The chart posted by Basement suite seems to say it all anyway. The market already rolled over a few months back. What lies ahead is the usual gut wrenching ride back to reality.

  3. “Sometimes I think we’re fools not to take advantage of these high prices and sell.”


    “More cake?”

  4. Is Vancouver having failed auctions? Here in the big smoke, the realtor under-lists the property, nobody shows up for the anticipated bidding war (or the high offer, while higher than ask, is “insultingly low”), then the property gets relisted for the real price. E.g. C2288217 Price Change. Feb 17: $1,799,000 Feb 26: $2,150,000

  5. No one will make a $3 MM move based on cocktail party chatter. They will still be surprised when the bottom falls out. ‘Ya gotta live somewhere’ will be the excuse.

  6. When the Vancouver correction/crash takes full force, there will be very widespread pain. People will stop spending as they see their “wealth” evaporate. Since Vancouver’s economy is so hollow, there might be
    significant job loss. As bears, is this what we’re all hoping to see? It’s probably preferable to have gradual bubble deflation rather than an outright pop. Given the asian love affair with RE, this is probably the most likely scenario.

    • More like traveling down the highway and blowing a tire. First comes inflation, then tackses, then paying through the nose at a roadside garage and ATM.

      RRSP contributions to decline to levels not seen since 1970s: RBC
      “A main reason given is that as the country ages, a smaller proportion of people are in the peak-contribution age range of 45 to 54. Another factor cited is that more of our money is going toward housing.”
      Read more: http://www.canada.com/business/RRSP+contributions+decline+levels+seen+since+1970s/6198773/story.html#ixzz1nbi7CYXx

    • I saw Amanda Lang and Kevin O’Leary discussing this. Lang said to O’Leary (paraphrasing) “If Canadian prices are overvalued 20%, you must want a slow deflation so its less hard on people.” O’Leary responded “Whether its fast or slow, 20% is painful.”
      O’Leary also commented in the same conversation (this was about a week ago) that he is shocked that certain Canadian CONDO markets haven’t crashed already. He is clearly bearish on Vancouver and Toronto condos, and people should pay attention, because if you agree with his political views or not (I generally don’t), he is privy to a lot of market information most of us can only dream about.

    • “It’s probably preferable to have gradual bubble deflation rather than an outright pop.”

      How gradual? People who think the market is overpriced by a factor of 3 or even just 2 are unlikely to want to wait around 10 more years for a 50% correction to slowly play out. Personally, I say pop the damn thing, get back to fair prices, whatever those are. Vancouver will get what it deserves, and then can get on with the rebuild.

    • Westbeach and Nood out of business already. I agree ex_604 but I don’t think anyone could control the correction as market psychology takes over. I work in the PHSA which recently sent an internal note around that we are in a hiring freeze. Same as VCH and Providence Health. And it’s not just the spending that dries up. Tax revenues fall and we all get taxed to the hilt.

  7. “people ‘know’ its a bubble”

    Just not enough people know. Sales are improved MoM and there is no panic yet. Maybe there will be panic after the 30 year amort is canned. Or of course, rising interest rates.

  8. More possibly relevant market info:

    I’ve now heard (and other commenters here have mentioned this) that new builds may not currently be selling because potential buyers are waiting for the government to deal with the HST. I’ve even heard that given how much this issue affects the RE industry, the government will probably act sooner rather than later to remove this obstacle. I’m wondering now if new builds will start selling later this spring, though I can’t imagine there won’t be price reductions, given the rise in inventory.

    This information didn’t come from potential buyers, by the way, but from someone employed in RE.

    From my own observations of the West Side, it still seems to me like the biggest competitors for many properties at the moment are builders. I think Peter Simpson (CEO of Vancouver Homebuilders Ass’n, I think that’s the organization — ?) owes it to his colleagues to warn them there’s still a strong chance they might lose their shirts.

    • FWIW the government is offering no HST relief on higher-priced homes in the Vancouver area. I don’t need to be a fly on the wall to figure out the phrase “rich Chinese investor” crossed the finance minister’s desk more than once.

  9. After two years of convincing my friend of a housing bubble, my friend decides to list his 1 br Bby condo.
    Open house over the weekend, noone came.

    • Nobody came to the open house? Not one person? That must have been depressing. So it is overpriced or badly located. Anybody who is prepared to get aggressive with their pricing will still find a buyer. Even in this environment. I see idiocy where I am too. I know a couple well who has not been able to sell for six months. They have stars in their eyes and don’t seem to get that the majority of other properties are also all in the same narrow price band they are fixed on. He wants to retire but she wants to speculate and make a living flipping. Both of them are screwed if you ask me. They got an offer not long ago that was just a few thousand below asking and the idiots TURNED IT DOWN!!!!!! They were so indignant too. How could that buyer even think he was getting their house for that price? I mean, it could not have been 6000 dollars diff on a 320k house. So what, eh? So I ask the guy “are you prepared to be a landlord right into your Seventies or would you prefer to sell and put the money in the bank so you can enjoy it”? He understands but greed owns his wife. After all these months have gone by nobody comes to look at the house anymore anyway. So they changed realtors (it must be the realtors fault!) Last week I gave him a copy of the Canadian Business article on a coming crash as a reminder. He just said “I don’t want to talk about it anymore, Farmer”. He looked a little pissed off that I even brought it up to be honest.

      And that was that.

      • 4SlicesofCheese

        “Noone came” That is what he told me. He is priced maybe 3-5% over comps so I do not think he is overpriced (well it is overpriced, but you know what I mean).

        Desirable neighborhood? Well I guess that depends on who you ask.

        It is by Highgate, built in 08. Pretty nice view, 20+ floors up.

        “I don’t want to talk about it anymore, Farmer”.
        Dont shoot the messenger!

      • Not much you can do, Cheese.I really do not understand some people. They get these fixed ideas in their heads about “worth” and then pride will not allow them to back down and just cut the deal and move on. They don’t seem to get that there is a cost to holding too. Is it any wonder they are hopeless as business people?

        Maybe your friend will be smarter and realize that he is really competing on price at these nosebleed levels.Nothing else even matters except that the last of the buyers can get qualified and approved.

  10. People don’t know how to negotiate in Canada, especially the people that buy 300k condos. They shop on MLS for the cheaper and attractive units with no imagination to bid on one that is 10k overpriced.

    Don’t get me wrong, the buying agent still suggests a little biding action to get everyone’s pulse up a little and create the perception of added value. Recall buying agents don’t actually have to do anything else. It usually trades close to the original list if the sellers don’t panic. Polite Canadians.

    Bottom line: sellers absolutely have to list below the competition. Trivial amounts like 5 or 10k matter.

  11. Pingback: “After two years of convincing my friend of a housing bubble, he decides to list his Burnaby condo. Open house over the weekend, no one came.” | Vancouver Real Estate Anecdote Archive

  12. “It is by Highgate, built in 08. Pretty nice view, 20+ floors up.”


    Highgate is not a particularly good area. It’s far from a skytrain station. Shopping / restaurant choices within walking distances are few. There’s also a BCHydro substation nearby for those who’re concerned. The only upside is that it’s in a pretty new community. For bby, I would much prefer the Brentwood or Edmonds area for similar prices.

  13. housing decline? Really? It’s all so absurd…how can families continue to operate on sustainable cash flow while spending 90% of pre-tax income on their dwelling year over year with an average household income of a mere
    $68,000.00……where’s the “real” wealth? Ex-Vancouverite with good paying career who would love to live In Vancouver again but shakes head in utter bewilderment!

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