Bear Capitulation – “A long time bear friend of mine just bought a place on the North Shore after many years of waiting. He said that he no longer believes that prices will crash.”

“A long time bear friend of mine just bought a place on the North Shore after many years of waiting. He said that he no longer believes that prices will crash. Prices will keep going up, it’s really different here, renting is throwing away money etc…
He stretched the mortgage to the absolute maximum of what the ‘helpful’ broker was able to get. His monthly housing expenses will instantly double (for an equivalent unit!) and there may be some renovations necessary. But at least he is not a lowly renter anymore.
Interestingly, during the whole buying process, he asked me multiple times for my input / opinions on buying in today’s environment. I told him that I won’t give him any opinion for or against buying and that he should just do what he *feels* is right.”

bubbly at VREAA 30 August 2012 at 10:42 am

Theories of market psychology have it that markets top when the last bear who is going to capitulate does so. But then we’ve noted that before.
The Vancouver market likely topped in 2011.
– vreaa

6 responses to “Bear Capitulation – “A long time bear friend of mine just bought a place on the North Shore after many years of waiting. He said that he no longer believes that prices will crash.”

  1. Some days I feel like that. Not that I would actually buy right now regardless, but some days I think maybe my belief in a correction is way off – maybe housing will just flatline for ten years or twenty years until incomes catch up. In many ways, this would be a best case, least painful scenario. Even for a bear like me. Then I remember that no speculative bubble in history has ever ended this way, at least so far as I am aware. So, either basic market dynamics have changed irrevocably for Canadian RE (i.e. it really is different this time) or my bearish inclinations are still correct. I’m with the latter.

    • The best thing that could happen would be an epic crash and return to fundamentals.

      • pricedoutfornow

        I agree-how many more people do we need buying $900k houses, committing the next 30 years of income towards some shack in East Van? I’m feeling really discouraged about real estate these days, it’s quite depressing to have $100k in the bank and can’t find a decent place to live (we’re looking to rent a 3 bed plus). A lot of these rentals are in such poor shape (windows so thin you know it will cost you hundreds or thousands a month in utilities when winter sets in or moldy-smelling), I can’t imagine wanting to buy one of these places! People are on crack, I swear. Let the crash come and soon!

  2. I’m with Raging Renter. I have my doubts some days, and then I look around at the rest of the world and think…. hmmm, I really don’t think that all across Canada, and particularly all across the lower mainland, we’re that special.

    Then to REALLY convince myself I go onto RealtyLink.org and look at house prices in the ‘burbs (Coquitlam, Burnaby, heh, even North Van) and then I start thinking, no way this is sustainable… no way.

  3. Did you show your bear buddy that the North Shore market is going down weekly?
    Buy high sell low.
    Thats the way its gonna go.

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