“My father-in-law told me flat out, that a drop in prices in their Surrey neighborhood will “never happen” because they’ve been there since 1978 and it’s never happened before.”

“Was at my inlaws this weekend. They own a house in Surrey BC, no mortgage, are about to buy an estate-type retirement home and are totally sure there’s no reason to worry about real estate, convinced their place is worth about $500K. My father-in-law told me flat out, that a drop in prices in their neighborhood will “never happen.” (his words), because they’ve been there since 1978 and it’s never happened before.
Oh, and also, I think they’re starting to get worried about money. I know they lost a ton in 2008, and the other day my MiL mentioned casually that she wished they drove a car more like my 8-year old vw than the $60,000 Lexus they bought in 2009, brand-new, for cash, after inheriting some money. …
To me, it seems like the only smart play is, sell, rent a nearly identical place for a grand or 2 a month, and if you really insist on home ownership, buy in a few years after prices fall. A total no-brainer. Like, if you can count past 21 without removing your shoes and your pants, this should be obvious, right?
Then today it clicked. They think that renters are second-class citizens. They were looking at possible locations to re-locate to, and my father-in-law basically vetoed any place that would have renters in the neighborhood. I swear to god, I’m not making that up.”

Darren at greaterfool.ca, relayed by Garth, 29 May 2012

6 responses to ““My father-in-law told me flat out, that a drop in prices in their Surrey neighborhood will “never happen” because they’ve been there since 1978 and it’s never happened before.”

  1. yltnboomerang

    I love the “never happens here” argument. I heard that townhouses in Vancouver will never go down because of limited supply…well here is an overpriced one that is listed at a loss right now:

    v953513
    Currently listed for 1,349,900

    Sold June 19 2008 for 1,470,000 (v705067) originally listed at 1,490,000

  2. I like the bit about not wanting a neighbourhood full of renters. They live in Surrey which is not exactly Shaugnessy. I bet Surrey has the highest concentration of basement tenants out of the whole GVR. How else would the working class people from Surrey afford the mortgage payment without a mortgage helper.

  3. Not to undermine the fact that an indicator has finally turned negative (average prices) but I think with the average especially has more to do with the West Side transactions of yesteryear. Too many multimillion dollar homes were sold on the West Side pushing the average higher and higher, those transactions this year are few and far in-between skewing the average down.

    As is the case with the perceived reduction in prices on select listings, a reduction in asking price is a reduction but only from an arbitrary point. Once we begin to see listing prices at original purchase price (flips from 1,2, or 3 years ago), or perhaps even sold below assessed can we begin to see where things are headed.

    Thats not to say the average offers no prognosticating value. Personally I think the average price is more of a volume indicator than it is a price indicator. The amount and size of transaction required to move that average higher gives a good idea of how much big money is sloshing around the market.

    Much as is happening now, where it appears the East Side is still selling well in a time where the average is plummeting. Different players, in different arenas.

    But its a good start! I too am doubtful that we will see people stepping in to save the day on the way down. Only not because they down want, I think there are plenty fools left around here to buy. It will be because of lack of credit to buy on the way down, much as is happening in Kelowna now. Creditors are walking away from the market because they fear lending into a down market with rising foreclosures. It won’t be any different in Vancouver, likely worse because of the stratospheric price level we are descending from.

    • Burt -> Agree re limits of using averages. We still watch them for the not terribly good reason that they are readily available.
      And agree that the absolutely best measures are time1 to time2 sales comparisons of the same properties (even though even those are also imperfect because of effects of renos or deterioration).

  4. Inlaws! Best way to deal with ‘that’…? Become an OutLaw.

    • DISCLAIMER: ‘Back in the Day’ when ‘Nem’ was bethrothed, the MIL was a Senior MortgageOfficer with a Sched1 CDN CountingHouse. Can you imagine? Sometimes I think that’s why I’m ‘here’…

      [NoteToEd: TalkTherapy in the right setting with the right Practitioner can work wonders. I haven’t ‘seen’ ‘DeadPeople’ – or worse, MIL’ s in years. You must ask me about Dr. Luscious one day.]

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