Seeking Value In RE… And Other Spheres – “When my PhD is done, I’ll be more than happy to shake the dirt of Vancouver off of my shoes. Pretty much any other city I go to in North America has either a lower cost of living or better job opportunities or both.”

“Most of the new UBC profs I know live in tiny sky boxes, an hour commute out in the suburbs, or are up to their ears in debt. Remember that years of grad school followed by a half-decade of post-docing leaves them with very little savings. Either mortgage up or buy small and/or far out, because you don’t have a damn thing for down payment.
Honestly, when my PhD is done, I’ll be more than happy to shake the dirt of Vancouver off of my shoes. Pretty much any other city I go to in North America has either a lower cost of living or better job opportunities or both. The only way I lose as a trained scientist is by staying in the lower mainland. This is the sentiment amongst pretty much every other grad student I know who doesn’t buy in to the “best place on earth” dogma.
Vancouver has become a place where young people piss away their 20s in pseudoretirement and student debt and a resort town for the pacific rim economic elite and babyboomers who bought property pre-2001.”

“I’ve seen a few professors trade up in the real estate market after being in Vancouver for several years. This usually was because they were able to buy a place in East Van, Kits, or Dunbar pre-2004 and trade up as the market got over heated in combination with their income plus the spouse’s… I also know of one person who related the market to a E. coli growth curve and pointed out that we’re hitting plateau phase right now as all economic nutrients have been used up and got the hell out at the peak. Maybe luck, maybe real foresight.”
‘UBCghettodweller’ at VREAA 17 Jul 2012 8:55am and 2:11pm

“As a highly trained specialist, it usually makes sense to go where your skills are valued and appreciated, and you can be financially rewarded for having those skills. It is difficult to argue that Vancouver abounds in such opportunities for highly trained scientists (there are exceptions, e.g., geologists and forestry-related scientists).”
‘Anonymous UBC Professor’ at VREAA 17 Jul 2012 9:39am

“I stuck it out as a postdoc for a few years and then, adios! And I’ll tell you, I’ve never looked back (although I visit from time-to-time… mainly just to remind me why I’m gone).”
E.G. at VREAA at 17 Jul 2012 4:28pm

“I have a sister-in-law who graduated form UBC with a PhD in BioChem. just a few years ago. She would have happily stayed in Vancouver, actually she would have happily moved anywhere she had to, for a post-doc or tenure-track position. RE was not an issue, simply landing a good job was #1. My understanding is faculty positions are difficult to come by. A good friend of mine with a new doctorate was just offered a position at UPEI and he is extremely happy, again RE not a factor, just getting an offer was the trick. I sometimes wonder if we place too much weight on the significance of Vancouver RE in regards to career, especially in the early years. After all, renting is always a great option, even for professionals. Regardless, my sister-in-law landed at Stanford, and rents.”
Allen at VREAA 17 Jul 2012 11:14am

“The phenomenon isn’t restricted to Vancouver (albeit, Vancouver’s RE market distortions arguably exacerbate it)…
Here’s a timely piece from NewsWeek’s Joel Kotkin on ‘GenerationScrewed’ that addresses those themes.”

Nemesis at VREAA 17 Jul 2012 1:20pm

“Perish the thought there are vast expanses of undeveloped land in North America, ripe for the picking. Areas of California, once deserts and groves, turned into some of the most progressive areas on the planet over the past 40 years.
The “generation screwed” needs to figure out other methods of getting what it wants. Muscling in on the previous generation’s territory is likely going to meet with resistance. From that perspective it should be no surprise apartments are becoming smaller.”

jesse at VREAA 17 Jul 2012 3:24pm

Wise people take advantage of resources that are irrationally undervalued, rather than getting in line to compete with the herd for resources that are irrationally overvalued.
– vreaa

29 responses to “Seeking Value In RE… And Other Spheres – “When my PhD is done, I’ll be more than happy to shake the dirt of Vancouver off of my shoes. Pretty much any other city I go to in North America has either a lower cost of living or better job opportunities or both.”

  1. “It is difficult to argue that Vancouver abounds in such opportunities for highly trained scientists (there are exceptions, e.g., geologists and forestry-related scientists).”

    Well, highly trained scientists always have the option to stay in Vancouver and become a realtor:

  2. Renters Revenge

    You don’t shake dirt off your shoes in Vancouver. This ain’t Oklahoma!

  3. Pingback: Real Estate Bubble, Brain Drain and g-u-t-t-i-n-g of society |

  4. My daughter subleased the top floor of a very modest Bby house from a top SFU science prof while he and his family (2 kids) went on sabbatical for a year. The family rented this unit, which was in a small house divided into three suites. I believe that he preferred to spend his income on his research, but one could not wonder if someone with his obvious talents would not be wooed by a better situation.

  5. seeking density in RE, and other squares

  6. Talent flows to opportunity. So does capital. Vancouver’s opportunity has passed.

  7. I dislike the Generation Screwed moniker immensely. At the very least it is a gross overstatement. Screwed compared to who? Compared to the pie-in-the-sky expectations their boomer parents cultivated for them, certainly. But why use the debt-fueled self-indulgence and consumer fetishism of the boomers as their base reference point? Is it really accurate to say that if they can’t afford a 4 BR McMansion, two SUVs, and annual vacations to a Sandals resort, they’re screwed? I’m sure anyone who came of age during the Great Depression or World War II would find that assessment either amusing or bemusing, depending on their disposition.

    Jesse makes a great point. This generation is going to have to create something entirely new for themselves. Simply demanding a fair shake from their elders will work about as well as it did for any other generation. In other words, it won’t. The boomers didn’t acquire their wealth during the decade they spent protesting in the street demanding change. They got wealthy only after they stiopped doing that. Now we have the irony of student strikes in Quebec, where they demand not change, but a hasty retreat to the status quo. Sorry kids, but that just ain’t gonna cut it. We clung to the status quo for as long as we could; right until we ran out of other peoples’ money.

    Perhaps, in 50 years time, today’s generation will look back with great relief that they did not have the option to pursue the shallow, acquisitive, hedonistic, status-conscious life their parents sought for them. If they’re lucky, they’ll be saying, “Sure, the toys and houses and cars and boats and vacations were nice. But the suicide work schedules and grinding commutes and crushing debt burdens and expensive divorces – with the accompanying emotional breakdowns and requisite medicine cabinets full of antidepressants and benzos – were one hell of a price to pay. We’re so much better off having blazed a new trail in pursuit of something better.”

    But in order to find themselves in that position, they’ll need to shed the spoiled ME ME ME attitide their parents so carefully and deliberately instilled in them. And they’ll need to stop lusting after their parents’ lifestyles. That lifestyle comes at a cost. (Check the medicine cabinet.) The ironic thing is, today’s young people will be most badly screwed by getting exactly what they want.

  8. I am stuck in moderation limbo. I’ll be less verbose next time, I promise.

  9. Just moved to San Francisco, way more opportunities, infrastructure, and money for software developers here than the small pond of Vancouver. Canada/BC has the Dutch Disease, the government needs to get its head out of its ass and quit focusing solely on the resource sector.

    • If you mean have the city do something that goes against everything it’s done for the past 100 years, best of luck with that. Not to be defeatist or anything, but the chronic problems many see with Vancouver’s malaise due to bouts of land speculation may be too ingrained to bother trying.

      Ian and Sylvia sang this 50 years ago, and there are still plenty of places left to make a mark, though perhaps that place is not in Vancouver any more.

      • Trivia: A long, long time ago… somewhere in the SnowSwept ‘frozen wastelands’ of NorthernOntario… ‘Nem’ pulled Ian&Sylvia’s badly injured RoadManager out of the smoking hulk of their capsized TourPrevost on a remote stretch of the 11 (Ian&Sylvie had wisely chosen to fly to their next gig). If not for a passing SnowPlow (VHF to OPP)… It might not have ended so well. SubZero and a raging blizzard… ‘TheManagement’ was wearing a Hawaiian shirt, Bermuda shorts… and sandals.

  10. Challenge for the PhD grad is that North American Universities are pumping out volumes of PhDs like there is no tomorrow.

    University education in North America has experienced a bubble over the last 10 years – it has basically screwed the undergrads with increasing costs and a bad economy. This is not sustainable and impact will be felt in coming years.

    • In this regard, there is an article worth reading in the August 2012 ‘Harper’s Magazine’: ‘A Matter of Degrees’, by Thomas Frank (not yet freely available on the web). It features a wonderful segue illustrating the basic similarities between completely fake ‘degrees’ and top college/Ivy League degrees.

    • …”pumping out volumes of PhDs like there is no tomorrow.”…

      You do realize, Micasa, that ‘back in the day’… they were quite literally giving them away…

      [G&M] – U.S. man uses his own obituary to come clean on fake PhD, theft

      “I AM the guy who stole the safe from the Motor View Drive Inn back in June, 1971,” he admits. “I could have left that unsaid, but I wanted to get it off my chest. Also, I really am NOT a PhD. What happened was that the day I went to pay off my college student loan at the [University of Utah], the girl working there put my receipt into the wrong stack, and two weeks later, a PhD diploma came in the mail. I didn’t even graduate, I only had about 3 years of college credit. In fact, I never did even learn what the letters ‘PhD’ even stood for.”

  11. The thing that gets me annoyed with “generation screwed” is how “screwed” some of the early “boomers” were in the late 1960s and early 1970s. Canadians around in those times remember how many Americans came north to avoid the draft, and how these people’s lives was changed forever. Some who returned to the US were placed in the army with all the uncomfortable consequences of dodging, others chose to remain in Canada, away from their families, not able to return for decades and even then in some cases unable to return to their hometowns because of residual hostility.

    Or we can step back another generation and remember those who were faced with WW2. They were “screwed” too.

    When I hear people bitching about their lot in life because of some supposed profligacy of the previous generation, I can’t help but think it wasn’t all fun and games. Sometimes sh!t gets real. Having negative “real” rates for a generation doesn’t qualify in my books. Sorry to be a douche.

    • YLTNBoomerang

      No worries about being a douche, each generation screws the next by banking on their servitude.

      • I think just the opposite. On an individual level, in almost all cases, parents attempt to give children the best chance possible. But the previous generation is in many ways unsuited for laying the groundwork for the next, hence my annoyance of lamentations of families who can’t afford to live where their parents did. That’s not how it works.

    • It ain’t douchey, Dr. J… but the ‘lack’ they sense is real enough. And it isn’t all down to frustrated materialism. Not by a long shot.

      As for the ‘GreatestGeneration’ (Brokawism)… well, even for those who failed to return (or returned broken)… there was moral purpose. Not to mention full employment followed by 30GoldenYears of improving living standards…

      7 Oscars. Theatrical release was delayed because it was considered “subversive”…

  12. Charts:

    BC – Mortgage Loan Value Per Existing Residential Property

    BC – Mortgage Loan Value Per New Residential Property

    ON – Mortgage Loan Value Per Existing Residential Property

    ON – Mortgage Loan Value Per New Residential Property

    To summarize BC vs ON: BC has 33% more mortgage debt for existing properties and 62% on new residential properties. That’s a lot when compared to median or average income for both provinces.

    The myth of “cash buyers” can be put to rest now. This can ONLY have occurred by lenders handing out mortgages like candy.

  13. This is a great post on CMHC in case anyone missed it.

    It’s only a matter of time before we see a CMHC bailout headline.

    • “DUH” moment of the year.

      “Our housing market, like all other market bubbles, is dependent on what investors refer to as the Greater Fool Theory. In order to keep housing prices continually rising, demand growth must continually outpace the growth of supplies”.

      This is true of any investment that rises in value. Less demand = lower prices, more demand = higher prices. The simple fact is that housing appreciation has risen with population growth aka greater demand (fools).
      I never listen to the advice of anyone try to sell me on something – even if it’s just the article they’re peddling.

      • The term ‘Greater Fool’ refers only to a buyer in a speculative mania, not to a buyer in a market that is rising because of rising fundamental values.

    • “I’m talking about the $257 billion in mortgages that are on the books, representing 88% of their total assets”

      Not entirely true. Once a high ratio mortgage is on the books with CMHC it stays on the books – even long after the time when the equity gain or subsequent mortgage puts it in low ratio territory. The liabilities of CMHC are drastically overstated.

      • Hard to believe anything you say after claiming that TFSAs are taxable.

      • 4SlicesofCheese

        Does a paid off house bought 20 years ago who gets a 80% HELOC get onto the books of CMHC?

  14. “Wise people take advantage of resources that are irrationally undervalued, rather than getting in line to compete with the herd for resources that are irrationally overvalued.” – VREAA

    I enjoyed the quote in summation, because perceived wisdom has often run society into problems.

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