“Second friend turned around and said that there is no way it’s going to crash in Vancouver, since San Francisco never crashed.”

“Was at a friend’s wedding last night, with a group of friends. One asked me if I am going to up-size from my current place to a bigger one. I said no, since market is crashing, and gave him most up to date stats -50% in sales compared to last year and -10% in price in last 5 months. Second friend turned around and said that there is no way it’s going to crash in Vancouver, since San Francisco never crashed. I was bit a buzzed from gin and tonic so couldn’t remember exacts stats for San Francisco. Then the first friend jokenly said that second one bought a third property not too long ago and is waiting for it to be built.
At that point I told them that lets not talk about real-state since it’s an emotional topic and I didn’t want to upset anyone, and lets enjoy the wedding.”

SunBlaster at VCI 29 Jul 2012 10:33pm

21 responses to ““Second friend turned around and said that there is no way it’s going to crash in Vancouver, since San Francisco never crashed.”

  1. According to the NY Times, from the peak (May 2006) to May 2012, prices in SFO are down 42.9%…

    http://www.nytimes.com/interactive/2011/05/31/business/economy/case-shiller-index.html#city/SF

  2. 4SlicesofCheese

    My friend who moved to SanFran around 08, says to me prices never really dropped there and have since risen.

  3. According to Case Shiller data, prices in San Fran were off 46% peak to trough (May 2006 to Feb 09). In most popular US cities, the desirable inner neighborhoods saw less of a decline than outer neighborhoods.

    If your friend moved in 2008, especially mid to late-2008, most of the drop would have already been out of the way.

  4. Hard to compare SF to Van. The Bay Area’s work environment is completely different than Van’s. Oracle, Cisco, etc reside there with really good paying jobs. We’re not a Head Office city with average salaries way below SF’s. They can support higher RE prices, it’s a bit more “justified” than Vancouver’s @ $1million – what a joke!

  5. This lack of situational awareness is part of the general financial illiteracy I referred to earlier. The U.S. housing disaster is unfolding, in technicolor, before our very eyes. What should be a valuable heads-up for Canadians is simply brushed aside or, in this case, re-conceived entirely (“San Francisco didn’t crash”). Sorry, no pity for the inevitable pain ahead…

  6. UBCghettodweller

    There’s real jobs in the Bay Area with commensurately high income in many fields. Other than Manhattan, you’d actually expect housing to be expensive and remain expensive there. Less can be said for Vancouver.

  7. Overall SF area includes East Bay, what SunBlaster’s buddy is likely referring to is SF proper and some of the more higher end suburbs. And yes prices have stayed relatively high in those areas, though I don’t know if they’ve risen from their peaks in 2006-2007.

    In real terms it looks like they’re off 15-20% from peak: 6 years of flat prices is about 13% off the bat.

  8. People have tried predicting what the Vancouver market would do by comparing it to US markets. That’s a flawed approach, period, full stop. It didn’t work for bears in the past and it doesn’t work for bulls now. I saw a study a few years ago indicating the the city we track most closely is…Chicago.

    Traditionally we move counter to Toronto. News of a boom in Toronto makes me think a Vancouver price drop is coming much more than any comparison with any other city scares/reassures me.

    • “Traditionally we move counter to Toronto. News of a boom in Toronto makes me think a Vancouver price drop is coming”

      Looking at the Sauder real growth data, my interpretation would be that what you said was true in the 90s, and possibly as earlier as ’86, but hasn’t been terribly true since 2000.
      http://cuer.sauder.ubc.ca/cma/index.html#
      The volatility of the 80s and early 90s is striking.

  9. Another difference between SFO and YVR… No golf courses or cemetaries in SFO…

    • Fascinating. Forgive me, Bo Xilai… but aren’t they the same thing?

    • Christopher Corbett

      No cemetaries but there are a 1/2-dozen golf courses within SF city proper including the Olympic Country Club where the US Open was just played. Also, the NY TIMES stats for SF house prices are for the entire SF Bay Area which includes many devastated outlying suburbs… in the city of SF proper, the decline has been relatively modest (5-20% depending on the neighbourhood), and lately prices have been going up again, and some neighbourhoods, like Noe Valley, are red hot again (with all that Twitter & Facebook & Google money). I think YVR is where Miami or Las Vegas was in late 2006 standing at the edge of the proverbial cliff… Vancouver is dreadfully overpriced, and unlike the SF Bay Area, doesn’t have many high-paying jobs to support such an inflated property market; instead mostly just speculators which is not a healthy thing. Sorry to say, but Canada (esp. YVR, a city I’m really fond of, BTW) hasn’t learned a thing from the US property crash and is headed for the same disaster. Like the US, it will take you 5-6 years minimum to dig out, possibly a decade, and given the almost absurd run-up in property prices, Van is probably facing a pretty severe drop. Believe me… It’s not different in the BPOE.

  10. Just compare price to rent / income between SF and YVR, and we get an idea of how much we need to drop in YVR. But I would say SF deserves a higher ratio because of its overall higher quality of jobs (tech, healthcare, etc).

  11. SFO has golf courses including the Olympic Club and Golden Gate. Most cemetaries were moved to Colma… which is a creepy place to drive through.

    • SFO=San Francisco International Airport. But otherwise agree, avoid Colma, do not pass GO, do not collect $200.

  12. Wife is from San Francisco. I have lots of friends there. Rents are sky high right now. The big difference I’ve noticed is that while people there are just happy to get a place to rent in the city, here in Vancouver, people whine that they can’t afford a place here. My in-laws got evicted because their landlord wanted to charge a lot more for their place. Can’t find a 2br for under 3000 bucks in the city now. My mortgage (960K) is only 3200 a month or so on a 3br/3.4 bath on the westside!!

    • 4SlicesofCheese

      “Can’t find a 2br for under 3000 bucks in the city now. ”

      Really where are you looking?? Even brand new units in decent buildings are easily under 3k a month.

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