“I finally sold my Downtown Vancouver Loft. Listed 3 times over 15 months; 3 different agents; 5 price drops; 10 open houses; finally that 1 single offer. Sold 8% below assessment; I would have gone 20% below if it came to it.”

“I finally sold my DT Vancouver Loft. Was listed 3 times over the past 15 months by 3 different agents. With 5 price drops, 10 open houses, countless waste my time showings and finally that 1 single offer. I was so scared they would walk I gave into every single one of their demands. Sold 8% below assessment, but I would have gone 20% below if it came down to it. Happy to be renting a place that’s double the size, but at the same price as my old mortgage, maintenance and taxes.
Now I’m sitting on over 500K in cash waiting for the market to crash. I’ll buy a house when it’s down 30%, but I’ll start looking when it’s down 25%. Cash is King!”

Finally at greater fool.ca 11 May 2012 8:30pm
[Image for illustrative purposes only. Loft in picture not related to loft in story. Any similarity between this loft and any loft in this or any other story, sold or unsold, is purely coincidental. -ed.]

Lofts represent a market sub-sector where it usually takes longer for sellers to find buyers, even in typical market conditions.
Nonetheless, this anecdote does act as a window into the soul of a seller in an illiquid market. With inventory rising and sales slowing, this is what faces sellers in other Vancouver sectors.
– vreaa

31 responses to ““I finally sold my Downtown Vancouver Loft. Listed 3 times over 15 months; 3 different agents; 5 price drops; 10 open houses; finally that 1 single offer. Sold 8% below assessment; I would have gone 20% below if it came to it.”

  1. Top Canadian story this morning on Bloomberg:
    http://www.bloomberg.com/news/2012-05-15/banks-not-immune-to-housing-related-failures-corporate-canada.html

    “How many new lending ‘guidelines’ can the market bear before it breaks?” wrote Robert McLister, a mortgage planner who edits the website.

    “The market may break because the fundamentals are not sound (i.e. overvaluation of homes), not because of OSFI guidance,” Melessanakis wrote in response.

  2. Remember when $500k meant something? I don’t either.

    • Exactly. Look forward 3 years . .

      “Remember when people used to get rich quick off real-estate?”

  3. Thai-born Chinese Canuck

    In Asia, BBC World is running special reports, “Canada Direct”, from May 14-25, covering various issues about Canada, from immigration, oil & gas industry, culture, politics, demography etc. I am quite sure Canada’s hot real estate market will be one of them.

    I now turn on to the BBC and leave it on most of the time in case something about Canada comes up.

    FYI.

  4. Renters Revenge

    As the market craps out towards 30% off do you think “Finally” will actually have the stomach to put $500k cash back into Vancouver real estate? I say most folks will be looking for 50-60% off at that point. I say free-fall until we hit fundamentals.

    • I tend to agree with you.
      As we’ve said before on these pages, many who think they’ll act will sit on their hands in the face of falling prices.

      • “As we’ve said before on these pages, many who think they’ll act will sit on their hands in the face of falling prices”.

        truer words never spoken on this site. Those sitting on hands all the way through the 2008/09 correction are still sitting. Those sitting on hands now will likely continue through next correction.

      • “Those sitting on hands now will likely continue through next correction”

        Turns out this is not true, it takes a few years of stable low house prices before serendipity works its magic. Most have cost bases with chunks bought when prices were significantly lower.

      • Fear makes people sell, greed makes people buy. Panicked do the ostrich.
        Fundamentals impoverish as many people as do technicals, the smart money sizes up the market.

    • “…it takes a few years of stable low house prices before serendipity works its magic”

      sounds hopeful Jesse. Good luck with that

      • 4SlicesofCheese

        Im confused, are you arguing sellers wont rush to the exit if prices start to correct, or that prices won’t correct (in any meaningful amount).

      • “sounds hopeful”

        This has been the experience in the US. As deleveraging works its way through and the job market improves people will be approved for loans again. The only difference is they’re approved for less than they were before and, fancy that, prices have dropped to nicely accommodate this.

        Check out sales volumes in Vancouver from 2002-2005. More than a few people bought low.

      • “Check out sales volumes in Vancouver from 2002-2005. More than a few people bought low”.

        absolutely. And more than a few from 1995-2001 bought lower than this…and more than a few from 1986 are have a real picnic.
        I say bring on the factors that precipitate this almighty correction. I can’t wait to prove you wrong about the way detached housing works in this city. Condos? WhoTF cares – that’s a suckers market.

      • 4SlicesofCheese

        Funny how over the lifetime of this blog, F1 has now become the contrarian voice of the MSM.

      • “Condos?”

        I suppose it’s possible that detached have permanently separated from the condo market, but… not all detached are single detached. As I’ve mentioned many a time before, if you’re sharing a wall or if your floor is someone else’s ceiling, that’s not technically single detached. For anyone living anywhere else on the planet this is obvious to the point of triviality.

      • You fail to understand where the demand for detached comes from, and how its inevitably connected to the condo market.

        Detached values have risen because of the way the City of Vancouver has been planned, a multitude of SFH close to the city core.
        These houses carry a redevelopment premium based on highest and best use of land.

        Relaxed mortgage rules, excess liquidity, cheap borrowing costs, and lack of viable alternatives has led to an over investment in condos. Developers are willing to pay a premium on land because density increases make it worth while. A great example of this is the Granville and Cambie corridors, where owners were able to sell houses at twice or three times previous comparable sale values. This didn’t reflect a “insatiable” demand, it simply made sense in a higher density calculation.

        Take away all the demand for condo units, and take into account the oversupply of new buildings currently under construction, nearly finished, and soon to be started. Developers begin to sit out, and value of land collapses, or rather retreats back to a more fundamental value.

        A great example of this is the EveLyn development by Millennium on Sentinel Hill in West Vancouver. Millennium bought out a dozen or so owners and acquired a massive land assembly for a new townhouse development. The density increase made it financially feasible to purchase the detaches houses at a premium. The project went into receivership as sales fell apart. ONNI has now picked the land and plans up at a fraction of the original sale price, further density increases are also part of the new development plan.

        If you think that condo prices have nothing to do with absurd SFH valuations in Vancouver, think again. When developer demand dries up, and buyers are not able to easily access insurable credit house values will fall in similar trajectory to that of condos.

      • FYI on condo plunge vs detached surge.
        Larry has a good piece on it.
        In case there are those expecting detached to follow same – don’t count on it.

        http://www.yattermatters.com/2012/05/vancouver-real-estate-is-different/#comments

      • 4SlicesofCheese

        “FYI on condo plunge vs detached surge.
        Larry has a good piece on it.
        In case there are those expecting detached to follow same – don’t count on it.”

        Wtf are you talking about.
        Kits had a detach surge from 18 in 2011 to 26 in 2012 and attached plunged from 45 to 30.

        But Marpole SFH sales plunged from 17 in 2011 to 3 in 2012. While apartment sales rose by 1 since last year.

        Kits is not HAM territory either. Your price appreciation explanations are all over the place.

  5. Paul Streppel

    Trudeau’s famous quote, uttered in defense of Omnibus bill C-150, and made on ….. wait for it… December 21, 1967:
    “The state has no business in the bedrooms of the nation.”
    … broke the back of the Canadian baby boom, especially and most exquisitely in the Western provinces…

  6. From the anecdote, “Cash is King!”
    Temporarily, as inflated commodities, assets and resources come down to sustainable valuations. However that’s a double edged sword. Our economy is based in resources and commodities and much of the nation’s pensions are based on a TSX style 8% return. When cash is king but low interest saving loses money, reserve capitalists float around aimlessly looking for poker games. Govts scramble to meet social obligations. Cash is only king until they print more, and to inflate the stock market we need leveraged cash. When signs of more printing become apparent, switch out of cash and ride up a different asset class.
    The game is obvious from a manufacturing perspective. This lull in the markets lets producers pick up supplies cheaper at low interest, and thanks to the US fed, pay lower wages. While the markets let out air, production can attempt to ramp up hiring until the US election when a new round of money printing will again buoy up stocks, saving the day for Obama. Warren Buffet’s right hand, Munger, just stated smart money is in production. That’s a bit of a forked tongue message, as those debt-free players scramble for facebook shares, a very exclusive poker game.
    Get em in debt while the money is cheap, then reduce the money supply and lock them into debt while assets depreciate. I heard somewhere a deflationary period usually lasts 18 months. Fare thee well.

    • +++ timing is most inexact … bless you if you get it right … i try only to divine will they, won’t they, how much might they, would they, could they … ps. rogers (?) was saying possible to hit debt ceiling (lol) before the election (iLOL!)… eu already in need another boost – check out those yields/spreads … even germans protesting austerity – if they’re INTO it, who isn’t? … jp may not make the eoy … ch cut reserve requirements … doesn’t mean it’s going to happen, but nook_xerox (oop ack!) looking very primed for high wattage exercise … would be better if they didn’t but when was the last time they did the right thing?

      • Your contributions prior to your now pale imitations of Nemesis’ were more comprehensible and more enjoyable to read.

      • its_just_what_comes_up 🙂

      • Play nice or we’ll get back in the Woody.

        Are we there yet?

        Hmmm. Menlo Park, anyone?

      • sir_nem … u r scaring me … was inbd sjc ~6pm … right over menlo pk … m_above dun_unnerstand we r praktissing code_tok in_kase of faschist potatorship … letsee a fashcyst serch-algo figger dis stuff_owt

      • Fed Minutes Show Divergence Of Opinion On QE3 12 minutes ago
        (RTTNews)”The Federal Reserve remains divided on the prospects for a third round of quantitative easing, according to the minutes of the most recent Federal Open Market Committee meeting. At the conclusion of its April 24-25 meeting, the Fed promised to keep interest rates low at least through late 2014, but offered no further accommodation in support of the sluggish economy. After unprecedented support measures taken during the worst of the recession, the Fed has adopted a wait-and-see stance over the past year. “Several” voting members are in favor of additional asset purchases if the economic recovery falters, up from language in the previous months indicating “a few” potential advocates for QE3. However, only one member sees the need for the Fed to crank up the printing presses at this time.” http://news.ino.com/headlines/?newsid=51620121384

  7. CanuckDownUnder

    Speaking of people not buying into a declining market, that’s exactly what the Reserve Bank of Australia thinks is happening here:

    “The Reserve Bank has flagged concerns about falling house prices as one of the chief reasons Australians have gone cool on the real estate market.”

    Nope, no speculation here!

    http://www.smh.com.au/business/job-security-falling-prices-dent-housing-demand-rba-20120515-1yod2.html

  8. Theres actually some really good deals on lofts in gastown. For 375k you can get a huge space with tall ceilings. You just have to be okay with living a block away from hastings and main…

    • Question: how much will those lofts cost after the price correction?

      • Yes, they will go down in price, but not nearly as much as units in yaletown/coal harbour, ect. Many of these units were only 15-22% less than todays prices when they sold in 2005/2006. Plus with the inevitable gentrification of the dtes, even if the market crashes you still might make a profit!

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