“Vancouver RE talk I overheard at a BBQ on the weekend.”

“THINGS I OVERHEAD AT A BBQ OVER THE WEEKEND
-we finally sold the townhouse, we lost a lot of money
-prices are starting to soften
-wait to buy
-condos are down 15-20% already
and my personal fav
-all the people that didn’t go to university after high school became realtors and made a lot of money.” … “For once I did not bring up the topic at all, I just sat back and observed.”

4SlicesofCheese at VREAA 28 Aug 2012 8:30am

“Things I overheard at my BBQ:
– we sold our loft for full ask after one showing
– we just bought a house in Burnaby, ended up at asking price. The house was expensive, but we really like it and the location, so it was worth it to us.
– we thought about waiting to buy, prices might go lower, but they’re at a point right now where we can finally afford what we want so we’re looking.
Sounds like a different BBQ…”

nuxfan at VREAA 28 Aug 2012 9:56am

34 responses to ““Vancouver RE talk I overheard at a BBQ on the weekend.”

  1. Read the RE article directed towards NS seniors on the front of the Sept 31st North Shore News paper.(North and West Vancouver)
    Its titled West Van ‘ tear ‘ down fetches 1M over asking.
    Article reads like an ad, and apparently the Realtor is an ex North Shore News sales rep.
    That would likley explain the front page placement.
    Trying to liquify the house rich, cash poor seniors.
    Needless to say the North Shore News paper is the platform for the North Shore RE ads which bring in huge revenue.
    Perhaps the writer will refer to the site i sent her, Vancouver Price Drop.

  2. These pretzels are making me thirsty

    “…Sounds like a different BBQ…””
    – nuxfan at VREAA 28 Aug 2012 9:56am

    Sounds like a REALTOR, or someone who has recently bought…lol

    • I’m not a realtor, and I bought 10 years ago. No recent RE purchases.

      Why do you automatically dismiss any anecdote that doesn’t fit with your own view of things? Do you not believe that people are still selling their places after one showing, or that there are people plunking down several hundred thousand dollars on homes, right now?

      • These pretzels are making me thirsty

        People who are buying the peak in a city with poor fundamentals have no economic or financial sense.
        If you are not trying to convey this sentiment then you are one of them.

      • 4SlicesofCheese

        I passed by this new build that has been on sale on and off for probably half a year now. MLS# V954929
        I noticed since last week there was no for sale sign and had thought it was probably de-listed again.
        But surprise, there was an open house today, without a sign on the lawn.

        Maybe the agent had some free time to kill or maybe people are pulling signs off lawns but keeping them on MLS. I think there are 4-5 new builds for sale on that street alone.

      • “People who are buying the peak in a city with poor fundamentals have no economic or financial sense.
        If you are not trying to convey this sentiment then you are one of them.”

        If I don’t speak up and constantly spread the word that buying in this market makes no financial or economic sense, then I “am one of them”? Lame.

        We are no longer at the peak, and have not been for quite some time. People that are purchasing now (people that I know) are making offers well below peak pricing, and in couple of cases are getting it. The places that they’re offering on meet their own personal fundamentals, which is enough for them.

      • These pretzels are making me thirsty

        nuxfan
        What ever, dude.
        You seem to be desperately trying to be a contrarian but it is not working. Maybe it makes you feel better about yourself.
        Do you really think that the RE peak in Van is over? Need I say more?

      • 4SlicesofCheese

        I am curious nuxfan, what is your prediction for prices in the next 1/2/5 years?

      • “Personal fundamentals”. Love it. The RE equivalent of a child’s “I can’t hear you!” I nominate this phrase for any future compilation of bubble jargon, along with F1’s “population saturation”.

      • nuxfan -> You do seem to be saying “buy the dip”.

  3. If any one agrees that this stinks of manipulation I urge you to contact the writer and the newspaper and to get it out on your blogs, these are our parents or grand parents that they are targeting.

  4. Funny how memes propagate. I think there was a Star Trek The Next Generation episode about temporal rifts that would fit describing the current state of things.

  5. I think nuxfan was magically transported through a temporal distortion back to February 2011… during the Chinese New Year of the Goat, Monkey or Golden Sasquatch… When HAM money abounded and questions of valuation didn’t exist… price/rent… price/average income. Questions of money laundering were still dominant in the Delta Quadrant. Captain Janeway was ready to do the impossible to skirt Communist fiscal agents to smuggle ill gotten gains out of the Mandarin sector to land safely in the Kerrisdale real estate quadrant..

  6. I threw together this presentation.

    Please let me know what you think about it.

    • pricedoutfornow

      Interesting. I like how it lays out exactly why prices won’t stay as high as they are in a completely factual manner-and why the price-rent ratio is key. When you put it like that it seems impossible that prices won’t revert to mean.

    • It does a good job at concisely stating some of the main points. The charts are also compelling.

      Usually when I evaluate a presentation, I try to think of how it will be received by the intended audience. In this case, I do not know who you expect will be viewing the presentation.

      You could consider adding a slide of references, and some citations in the body to those references. (E.g., standard economic textbooks, material from online courses, academic papers from Shiller)

      You could also add in the text notes that accompany the slides some important information that relates to the slides’ content. Some possibilities:

      (1) Why does price action have different behavior in the short term than the long term?

      (2) Should all houses that are listed for sale be considered as inventory, or are some just testing the waters? What is shadow inventory? Aren’t all houses for sale at some price?

      (3) How should one interpret MOI? Is it the number of months it’ll take for the market to clear? Or is it a measure of how overpriced the market is?

      (4) Is Teranet HPI inflation adujusted? What is its scale?

      (5) In a period of low interest rates, shouldn’t we expect poor earnings from houses?

    • I really like the simplicity and clarity of the main points and the graphs. This to me looks like a terrific “pocket” analysis/presentation/synopsis of what’s going on in Vancouver and how that relates to certain economic facts and trends.

      Jeff Murdock’s ideas for additional information to be included in the presentation also sound excellent to me.

      Wouldn’t it be fun to mail this presentation to:
      1). Everyone on City Council
      2). MLAs and MPs
      3). CHMC
      4). Flaherty
      5). Every bank-economist pundit one can find
      6). Tsur Somerville and his UBC department/institute
      7). Mayor Robertson’s affordable housing committee
      8). Every MSM reporter who “covers” RE, and their bosses
      9). Realty firms (oh, wait, don’t waste your time)

      • By nature I am pessimistic about political activism. I think it would be futile to send this presentation to any of those people. They are ideologues, and these slides run contrary to their ideology.

        Two alternative possibilities for greater impact:
        – grassroots (e.g. social media) stunts. The “victims” of RE affordability are predominantly young, and young people predominate social media.
        – providing a canned article for MSM: they can’t afford independent journalism, so why not give them a packaged article that they can print. Some were willing to print gordholio.

        Does anyone have any other suggestions?

      • Jeff, I like your suggestions very much.

        In terms of the petition drive I mentioned in an earlier post, I think social media for example would be an excellent route.

        And getting the presentation into the MSM media would be good — one reason I proposed sending it not only to reporters but their editors.

        Having seen with my own eyes the transformations political activism wrought (I grew up in another culture), I’m not pessimistic. However, given the sluggishness, authoritarianism, and bureaucracy I’ve seen in BC, I can see how pessimism might be a natural outcome for any resident of this province.

        However, I still like the idea of sending this presentation all over the place too. It’s so easy to send things now. Furthermore, with the dismaying naiveté and ignorance described nearly every week on this blog (including the headlined stories of recent days, about heedless buyers), I’m honestly not convinced that even members of City Council understand what “a return to fundamentals” might mean, and its implications for Vancouver.

      • Right on, Nem. 🙂

      • The rebuttal to this whole thing is “Vancouver is different because of [its differences]”. If you want to know one of the reasons why the “best and the brightest” vacate to the alpha cities, just wait for the inevitable vapid and diversionary responses from the Usual Suspects.

      • Jesse, I like Jeff’s suggestion about intended audience, but if the idea is to push it out to social media, I think it’s important for regular people to be able to get a sense of what’s going on even if they don’t completely understand it all.

        I don’t think I would have understood it if I haven’t already spent months on this blog (and other related ones).

        Also, I wouldn’t mind posting it on my other social networks to 1) get feedback and 2) just to spread the word — if that’s cool with you.

    • And don’t forget to consider sending it to every developer in BC too.

      Also Peter Simpson, CEO of the Homebuilders Association or whatever it’s called.

      Maybe the industry will consider taking a breather from what’s starting to look like a suicidal race to build stuff no one’s going to buy.

    • My two bits:

      1. Avoid charts that show relative from 100, use actual values from the target area. Then people can relate.

      2. You’ve forecasted what it’ll take (-35%, -6% y/y for 7 years), so graph it. Show real numbers on what that forecast looks like that real people can relate to. You’ll scare the !@#$ out of everyone you want to scare.

      Send it everywhere.

  7. I hosted a BBQ yesterday. The topic of real estate never came up.

  8. Whether the tone is bullish or bearish, the fact that RE is so common a topic of conversation is just weird. In all my travels, never have I encountered a place where RE is so perversely embedded in the collective psyche as it is in Vancouver. Sure, in other places the subject pops up from time to time. But it’s not a dominant theme of social gatherings, it’s not treated like a sport, and it’s not seen as a means to wealth. It’s just where you live.

  9. maybe, just maybe real estate is such a common topic because it has you as its common denominator. Ever think that you hear the subject so much because you are such a willing participant and often broach the discussion? Look at the obssession just on this site…it’s truly remarkable.

    • Actually, F1, I virtually never hear people talk about real estate. Why? I don’t live in Vancouver anymore.

    • 4SlicesofCheese

      I never bring up the subject. But inevitably people always go there. Before it was a bullish tone, now I see a bearish tone.

    • Actually, f1, I’ve spent many years now being wildly uncomfortable and wishing to change the subject whenever real estate comes up. Because other people referencing it reverentially, even if they’re shocked and appalled by the prices, as if RE in Vancouver is some cruel but implacable god. Since I’m not of such a religion, I grimace uncomfortably and nod and then change the subject. RE comes up a lot; with neighbours, other parents, the guy who is redeveloping houses in our neighbourhood and likes to brag about it… The cashier at the corner store, the lady across the alley who said she was renting like it was an apology…

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