Buy Now At 20XX Prices!

441 E 38th
Asking $899K, then $829K. Sold for $820K.
Purchased in December of 2010 for $810K.
“Are we at Dec/10 pricing already?”

timber2012 at RE Talks 4 Oct 2012 1:40pm

There is valid ongoing debate regarding which price measures to use to best monitor the decline.
Not a simple task: Mean, Median, Teranet, Benchmark?
Teranet, using (by our understanding) Case-Shiller-type sale-resale single-property methodology, is likely the most valid price to track.
At the single example level, time1 to time2 anecdotes will always be powerful.
A house that sold for ‘x’ in 20XX, now selling for ‘y’ in 201X, doesn’t necessarily reflect the whole market, but still grabs the attention of prospective buyers.
“Gee, I could buy that now for less than I’d have paid in 20XX!”.
– vreaa

31 responses to “Buy Now At 20XX Prices!

  1. Cameron the Economister

    I guess it has to do with the East side border properties thinking they are in the West side. It’s 2 blocks EAST of Main, and in the heart of a cul de sac that is in a CEMETERY! No HAM or reasonable person will buy there, only a fool that is riding it down and doesn’t care about resale.
    Even an Atheist would think long and hard about buying a house with a backyard view of headstones, and then, security guards patrolling for metal thieves. This is the same cemetery that gets vandalized and metal stolen from in the news yearly.

    http://maps.google.ca/maps?q=441+E+38th&sugexp=chrome,mod%3D5&um=1&ie=UTF-8&hl=en&sa=N&tab=wl

    This same neighbourhood had a huge run up in prices.

    Affect on the local economy – less money be spent on other goods and services. Saw a 1.5 million dollar house 2 blocks from here yesterday on 33rd near the bus stop, they were drying their 5 sets of jeans on the trampoline safety net. I would hope that people with that kind of money and 2 basement suites could afford a dryer, or maybe it was the tenant that has to use the laundry mat on fraser…..

    3rd world thin street East Van….. poor us.

    • Nothing wrong with air drying clothes, less wear. Do you also think that people who grow their own vegetables & herbs are too poor to buy food? Or that cyclists & transit users are too poor to drive?

    • There are a lot of people who would like to live in a neighbourhood avoided by HAM – some might even pay more for it. And the graveyard and dead-end streets make for a nice, quiet neighbourhood.

  2. Looks like the seller had put some money into this house too. I guess the windfall profit will cover the costs.
    “Gorgeous 1 Bdrm suite only a year ago rents furnished for $1075 inc. Utils. Single Occupant.”

  3. Check out #10 on this weeks Drop

    http://vancouverpricedrop.wordpress.com/2012/10/01/the-weekly-drop-october-1-2012/

    Van west home listed $220K below what they paid for it last year so a $300K+ loss when you include the various fees. Their initial asking price was $460K OVER what they bought it for last year!

    There are more and more of these listing price below last year selling price listings every day. When you consider that just about all sales are coming in below the ask price you can see a clear picture being painted

  4. North of $800k is still way too much for that shack in any rational market. So, we haven’t even nearly reached rationality yet. A long way to go.

    Even with the supposed “Vancouver premium”, I wouldn’t want to pay much more than $400k for this thing

    • >I wouldn’t want to pay much more than $400k for this thing

      Exactly, a house like that anywhere else in Canada, based on historical averages, shouldn’t be selling for more than about $300,000. Given that Vancouver has historically been somewhere between 30% and 50% more expensive than the rest of Canada, under-$500,000 would place the pricing in the historical norm range.

    • Homes like this will probably sell in the $400K range in the trough.

  5. “There is valid ongoing debate regarding which price measures to use to best monitor the decline.”

    While Teranet has some inherent deficiencies, as an “investor”, it is the one I track the closest. Ultimately, though, I track prices and rents of condos the closest.

  6. some buyers don’t mind the graveyard…quiet, peaceful.
    The sale of 464 E 38th from earlier this year came in over 1 million. A Vancouver special on short lot. Maybe they have family buried there

  7. I live in the area and there aren’t a lot of big parks nearby so in a way, the graveyard is like green space and people ride their bikes, walk their dogs, and skateboard. There used to be a problem with new drivers learning to drive on the paths but that seems to have stopped. Careful of the coyotes! Anybody seen the listing at 237 East 20th, V974712 for around $1,800,000?

  8. Correction “a demolition site”

  9. The graveyard was opened in 1887, one year after Vancouver was incorporated. Around 1904, a streetcar line was built on what is now Fraser Street. It was called the Cemetery Line.

    • NotSurprisingly, the TTC’s very own CemeteryLine is the most heavily travelled corridor in the HogTownNetWork… waiting at the shelter for the next car can be problematic, however.

      [NoteToEd: I think those TTC pasengers are upset because it’s impossible to reassign a condo presale contract in YYZ these days.]

      • How silly of me, I almost forgot… your Quote O’ TheWeekend!….

        “I am not building condominiums. I am building sculptures for people to live in!” Mr. David Mirvish, HogTown Theatrical Impresario & P/T Developer

        [G&M] – Can The Promise of LifeStyle Perks Help Developers Shift Toronto’s Condo Glut?

        …”behind the project’s blinding star power, there is a darker outlook. No project, not even one created by one of the world’s most famous architects, is immune to laws of economics. And right now, tens of thousands of new condo units are being built in a market with fewer buyers. There were a record 196 condo projects under construction in the Toronto census metropolitan area at last count (the end of June). Sales of newly built high-rise units downtown this August were about half what they were a year ago, according to RealNet, a real-estate research firm. Prices are slipping – in August they were about 4 per cent lower than the year before – and many economists believe that a glut is forming that will cause prices to drop further.”…

        http://tinyurl.com/9egmfg9

  10. This is a good post. I think that same-property to same property is a good guide. I think that the noise in this data set is the vast amount of capital improvements going on within houses. You can’t drive across town without coming across dozens of brand new pick-up trucks with the name of some goofy ceramic tile installation company or hardwood flooring service painted across the side. On average the past two or three years may have seen capex exceed depreciation by 2-4% of house value for the typical house. So an $820K house today probably is a slight negative return even pre-RE agent fees.

  11. Sneak peak at who just popped out of the alleyway and is about to throw recent and pre-construction speculators right under the bus. Chart

  12. Here’s another one that makes me smile

    V961081 in Shaugnessy bought for $4.6 million in September 2011 and assessed at $4,066,100.

    Listed in March for $4,288,000
    Pulled July 5
    Relisted July 11 for $3,988,000

    Current loss based on list price is over $800K when including fees and when you consider it has been sitting at that price for 3 months I wouldn’t be surprised if it is sold for a $1 million+ loss

    • Places selling for less than assessment in Shaugnessy is scary. I mean, a lot of that is old money and establishment. On top of that, many of those places really are nice houses on large lots. Of any place in Vancouver to have really sticky downward pricing, I’d expect it to be there.

  13. This might be construed as a prediction:
    http://realestatetalks.com/viewtopic.php?f=8&t=128260&sid=fb3b051f1d930167062c73fa8c0e9a61&start=60#p313309

    In audio engineering, bias in the amplifier is necessary to make the noise.

    • Bur most bubbles do not unravel in a serene manner.
      More like a chaotic and self fulfilling fear cycle in a downturn and a self fulfilling greed cycle when the prices are going up. None of this is an orderly or patient process

    • The market isn’t going anywhere but down if the insurance limit isn’t lifted. CMHC & Genworth Insurance-In-Force

      When lenders start seeing sellers change prices and they can’t insure loans or MBS, it’s game over. Nobody lends in fear of bad assets depreciating on their balance sheets.

      • Renters Revenge

        Which is why mortgage rates can rise independent of CB overnight rate.

      • I don’t see how investors won’t demand another 150-300bps when headlines are printing declining home prices, and, I also don’t see many cash-strapped buyers i) coming up with a 20% down payments with a savings rate of 4% and ii) paying a higher premium on already overpriced homes. 10-20 years ago a 150-300bps premium was like nothing, today it’s a total shocker.

        The amount of insurance left is $37.6 billion; in Q2 alone, CMHC & Genworth’s insurance-in-force increased by $24 billion; there is still 177,000 units under construction in Canada of which many don’t even have mortgages yet and, when home price decline, banks have to maintain overcollateralization (add more mortgages to compensate for declining assets) for investor’s MBS holdings, now standing at around $250 billion.

        There’s no way out of it. There’s too much leverage. It’s inevitable. CMHC and Genworth’s equity will be wiped out and get their taxpayer bailout.

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