“We went to look at a townhouse to rent in East Van. The woman told us the address, we googled it and found out it’s on MLS listed for sale. I hate living in places like that, you’re always wondering if you’ll be out the next month. Anyway, I went to check it out anyway (with no intention of really renting it), and asked her if she planned on selling. She eagerly asked “Why, do you want to buy it?” I guess it’s been for sale for awhile. I think this woman has multiple properties (somewhat recent immigrant, maybe within 10 years), I googled her number and came up with many different properties for rent. At the end of the meeting, I wished her good luck, she told me to call her if I changed my mind about buying the unit. I could smell her desperation.”
– pricedoutfornow at VCI 27 Jun 2012 3:08pm
For the last 10 years in Vancouver, buying as many properties as you possibly could has been a recipe for success. When prices fall, owning multiple properties will be a recipe for personal financial disaster.
Momentum investors hate owning assets in a market that is falling.
When they buy, many set mental ‘stops’; price levels at which they’d want to bail out of their positions, such that they can minimize their losses.
There are many multiple property owners that will bring their properties to market in a falling price environment. Some don’t even know they’ll be doing this yet, but when faced with the unanticipated reality of leverage working the wrong way, they will act.