“I am in the market for a downtown 2 bedroom condo as first time buyer. Here comes the death spiral.”

“Here comes the death spiral at Cosmo 161 W Georgia St:
I am in the market for a 2 bedroom condo as first time buyer in downtown for the past few months. My budget is 500k. I have been watching this building closely.
There are 6 units that are exactly the same layout on MLS. Unit 807, 1608, 1708, 1808, 2108, 2208. Asking price from 575k to 629k.
807 had open house two weeks ago (I viewed) and was the lowest priced at that time. Now 2208 entered the market last week and priced lowest. 807 (V949770) just reduced it’s price to beat 2208 (V962354) this week.
At this rate, I hope they will drop to $500k by Nov. this year.”

G at VCI 20 Jul 2012 10:14pm

If a ‘death spiral’ is beginning (as may indeed be the case), why plan to buy in November?
– vreaa

24 responses to ““I am in the market for a downtown 2 bedroom condo as first time buyer. Here comes the death spiral.”

  1. Which ‘DownTown’?… and here’s your Quote ‘O The Day!

    “This is a transformation of a successful mall, which is a very intriguing difference. This will be like a mixed-used, transit-oriented city centre, just like a traditional downtown.” – Brent Toderian, Vancouver Planning Director

    [G&M] – Oakridge owners hoping to expand mall into small city

    …”A staff report going to council this week recommends that councillors let the project proceed to a public hearing because of the way it will enhance the city’s efforts to create more affordable housing and developments that are environmentally sensitive.”….


  2. Buy the dip! I heard prices are weaker in the last few months of the year. Or something.

    • 4SlicesofCheese

      Clearing stock of last years model, literally.
      Each years new condo iteration is more desirable than the last!

  3. Renters Revenge

    This is the very definition of a depression: consumer expectations of lower prices in the future.
    I agree with VREAA that come November, if these units are $500k, the expectation at that point will be even lower. Prices in free fall.

  4. Speaking of “DeathSpirals”…

    “We’re doing about 150,000 to 200,000USD of lending a day. It’s increasing rapidly.” – Paul Aitken, CEO of British luxury pawn broker Borro

    [BloomBerg] – Going Inside the Vault of the Pawn Shop to the Rich


  5. Ralph Cramdown

    If this guy really wants to buy now, he can take advantage of the market. Call each of the sellers’ agents and tell them that he’s looking to buy one of those units, and that he wants to have offers no later than next Monday, irrevocable to next Wednesday at 8PM. He might have to speak slowly and repeat himself a few times, but the agents will eventually figure out that he’s allowing sellers the opportunity to bid for his business. Of course he should prepare a schedule listing the terms he expects to go into their offers regarding inspection, closing, examination of the strata records, etcetera.

  6. Funny how the average price is suddenly getting attention. I just came across an article suggesting there really is no correction taking place because high priced homes skew the average.

    So where were the smart CBC analysts hiding when the high end homes skewed prices upwards? Oh wait….do I really need to ask that question?

    CBC news quotes Tsur sommerville and Gregory Klump (our favourite real estate villains) in dissing averages. Hey, theres no problem here folks…numbers lie!

  7. An exception opportunity to ‘buy the dip’…. or ‘catch the falling knife’. Once a few guys like this have purchased ‘trying to catch the knife’ and the sidewalk is considerably bloodied, maybe try a double purchase. Two condo’s for the price of one, move yo Granny (and her pension) into the flat next door.

  8. Swap 1999 for 2012, and “Nortel” for “Vancouver”.

    There will be people on the streets with cardboard signs that read: “Bought RE at height of bubble. Please help”.

  9. xx08s … Chinese flippers bailing?

  10. “If a ‘death spiral’ is beginning (as may indeed be the case), why plan to buy in November?”
    – vreaa

    This is curious. The price/interest rate timing window, or because price means less than pride of owership? I suspect want exceeds rationale. “I have the money now—take me.”

  11. 4SlicesofCheese


    Developer builds some temp greenspace and community farmland, which will get torn down once they feel like its time to cash in, and in exchange get massive tax reductions.
    Win win?

  12. Went to a few open houses this weekend downtown. The desperation was palpable!

  13. Proof that the downtown condo market has gone nowhere in the past 5 years: a friend bought his condo in Yaletown in October 2007. Today I could buy an identically laid-out unit in that building 3 floors higher and with 2 parking spots for $11K less than what he paid.

    Tick tock…..

  14. Ok. I am the one who posted the Cosmo condo.

    I have been looking to buy my first home for a few months. And the price of downtown condo has been steady since 2009. All the news about soaring price to early 2012 were from detached houses in Van west and Richmond. But most buyer/seller, and including the media dont realize this. In May, I made an offer to a 2BR condo in dt for 508k and seller asking 525k. Seller didn’t even bother to look at my offer. The same unit was solder later for around 518k.

    since the tightening of mortgage rules announced in june, the media and buyer/seller are catching up to the reality. The people who bought condo presales since 2010 are loosing money, like Cosmo. Yet there are still people buying presales as investment, esp in the metrotown areas. Developers are still releasing them, ie Station Squres,(1000 units)

    It would be interesting to see what’s going to happen in Nov.

  15. G, now’s the critical time for your financial future – there is absolutely no good reason for you to buy a condo at this time, period. Just don’t do it! No justifications or buts… In 5 years or less, you’ll instead buy one of these same units as a foreclosure for 300K! Why would you make such a poor decision and buy anytime soon while prices are falling? It’s just getting started. Calculate the fundamental value of these units based on price:rent, then plan to RENT one until prices are close to fundamentals. Still not convinced? Calculate the REAL monthly cost of ownership including strata fees, taxes, mortgage interest, maintenance/renos, opportunity cost of DP cash etc. This is the ‘sunk’ cost of owning. (You’re not including the equity portion of the mortgage payment in this). Now compare it to renting the same unit. This will prove that RENTING is not wasting your money at all, and has far less risk.

    • Well JCH. It seems the folks over at Pacifica Partners agree with your estimate of how much Vancouver is over valued. Take a look at the recently released chart from their “Canadian Real Estate Bubble Chart Book” (good read by the way).

      Price Correction needed to return to historical average. Pacifica Partners.

      Pacifica Partners: Canadian Real Estate Bubble Chart Book – July 2012

      Next update is coming in November. Stay tuned……

  16. You can try my real estate agent for the deal .
    I was in the similar situation two years ago but now owned three duplex in vancouver thanks to my real estate agent “http://www.[redacted].ca/

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