REW’s ‘House Hunter Chronicles’ – “I had wanted my dream house right away. I wanted to skip the steps. But now I’m thinking short-term house and long-term house.”

A serialized story called ‘House Hunter Chronicles’ was posted through the summer at the website REW.ca. Here it is, for the record:

“Follow local house hunters as they experience the highs and lows of buying a home in the intense Vancouver real estate market. Elaine L. is the first to share her search with us. We’ll check in with her every couple of weeks to see how it’s going.”

Elaine L
Family size: Two — a single woman and her mom
Currently: Own a condo
Budget: $800,000 – $ 1.1 million
Neighbourhoods Collingwood, Fraserview, Renfrew, Renfrew Heights, Killarney
Looking for 2000 – 2500 sq. ft. newer detached house with rental suite down, move-in condition

1. Meet Elaine L. (June 16, 2012)

Elaine L. is only in her twenties, but she’s already a veteran in the Vancouver real estate game. She and her mom, Patty, sold the first condo they lived in back in 2004. They rented for a while, thinking Vancouver house prices would go down, but when that didn’t happen they bought their current condo in 2008.

Since then their condo has appreciated by $40,000, and its 880 square feet are starting to feel a bit cramped for the two of them and their dog. When one friend bought a rental property and another bought a house, Elaine was inspired to start house hunting again.

So she’s contacted the same Realtor they worked with before and asked her financial advisor what kind of price she can afford, and the house hunting is on! She hasn’t put her current home on the market yet, and there’s no deadline for buying, but she’s started doing a lot of online research and visiting open houses.

Elaine and Patty would like to stay in southeast Vancouver, where they are now. Finding the right neighbourhood involves researching crime and average income statistics and using Google Maps Live View to check out the look and feel.

Her ideal house is at least 2000 square feet with a mortgage helper in the basement, living area on the main floor and bedrooms upstairs. Elaine says that it’s mostly older houses that offer that layout, and they tend to be out of her price range. But more affordable Vancouver specials, both the classic ones and the newer versions, have suites on the main floor and living and sleeping areas up, all on the same floor.

Chinese traditions also play a part in her search for a good house; for instance, if you need to go down a couple of stairs to get to a house, it’s off the list.

Is she looking for a fixer-upper? Definitely not. “I can build IKEA furniture — that’s about it.”

Elaine credits her friends with keeping her on course. “My emotions get the best of me sometimes,” she says. “I look at a house and I don’t really like it, but I talk myself into it, and then I have to get my friends to talk me out of it.”

2. Elaine Loves and Lists (June 22, 2012)

Follow local house hunters as they experience the highs and lows of buying a home in the intense Vancouver real estate market. Elaine L. is the first to share her search with us. We’ll check in with her every couple of weeks to see how it’s going.

It was a bit like falling in love. The house ticked all of Elaine’s boxes: 2300 square feet, 3 bedrooms on the top floor with the kitchen and living area downstairs, and a 2 bedroom rental suite on the same floor that would cover $900 of the mortgage. It was built just last year, so it’s like new but without the HST. Her mom, Patty, liked it too.

Perfect.

But alas, her love was unrequited. When her Realtor inquired about putting in an offer subject to the sale of the condo the seller said, Don’t bother. “No one wants to sell to you if they have to wait for you,” Elaine says.

That’s why every day last week Elaine and her mom were hard at work — lugging a heavy elliptical trainer down to the storage locker, taking boxes of bric a brac over to a sister’s garage and removing all traces of Elaine’s Hello Kitty collection. They’re staging their condo, and by next week they hope to be able to get their Realtor in to take pictures and put the condo up for sale.

“I don’t want to go through that again,” says Elaine about having her subject-to-sale offer rejected. “We have some places where we can stay for a few months if we don’t find anything. And when we sell we’ll try to set a really late possession date.”

Meanwhile, “It’s a great feeling to be tidy. We’ve decluttered and depersonalized it to get an open, contemporary look. We had the floors redone with a dark laminate and it really opened up the space. We’ve cleaned all the walls. The place looks fantastic.

“A friend warned me not to fall in love with it and decide not to sell. But I want to live in a house.”

The house she fell in love with — actually a half-duplex — has been sold. But the good thing is that there are lots of similar places in the same neighbourhood, so Elaine’s optimistic that something with the same appealing layout will come up… after she’s sold the condo.

“It’s around $900,000, and at first I thought it was expensive for a half-duplex, but it feels just like a detached house. The two halves barely share a wall. Only the rental suites connect. I haven’t seen anything like it in Vancouver.”

Though Elaine was looking to buy a house in Vancouver, this place is in Burnaby, which hadn’t been on Elaine’s radar until a friend alerted her to the listing. It turns out, it’s just across the Burnaby border, only two minutes from where she is now, so she’d still be close to friends and family.

Of course, that’s if all this works out.

The upheaval is stressful. Elaine says “I’m always worrying. What if we sell this and don’t have another place to live? What if the market crashes and my house ends up not being worth what I paid for it?

“But then I remind myself that I’m not biting off more than I can chew. I’ll be living comfortably, even if the market crashes. I always plan for the worst case scenario, so I’m planning everything as if the suite isn’t rented. We’ll be okay.”

3: Keep it Clean (July 18, 2012)

Now comes the hard part: living in a home that has to be clean, shiny and spare at all times.

“Having to clean up after myself all the time is making me want to get it over with,” says House Hunter Elaine L. “I want someone to buy it so I can leave”

The condo she and her mom share has now been on the market since the beginning of July. After hauling out everything that wasn’t nailed down, and getting new flooring installed, she’s thrilled at how great the place looks. But it has to be kept that way.

“I gave my dog a haircut!”
The dog was the worst culprit in the keep-it-clean campaign. Elaine’s mom, Patty, had been spending part of every day vacuuming up the dog hairs that showed up particularly well against the dark wood of the floors — one of the new selling features of the condo.

A canine cropping took care of that problem. Now it’s a matter of always putting things away, dusting and doing the dishes.

All that upkeep is worth it. Their Realtor says that it shows really well, and he’s had favourable comments from people viewing it. Considering there are three other condos for sale in the same building, that’s hugely important. Elaine and Patty indulged in a little spying, going to the open house at one of the other condos to check out the competition, and they’re satisfied that their efforts have given them the upper hand.

The other side of feng shui
They’ve even had some serious interest. A mom and daughter came to look at the condo twice, but they rejected it because the mom said that the ensuite bathroom door facing the bed was bad feng shui. Elaine and Patty are Chinese too, and they have a few criteria based on feng shui principles. But not that one.

“The bed can be moved.” says Elaine. “We’ve lived here for four years and haven’t had bad luck!”

As her Realtor — and every Realtor the world over — says: It’s just a matter of finding the right person.” There are three showings coming up; three chances to find that right person. And with all those prospective buyers coming through her home, Elaine’s decided not to spend the week constantly keeping everything spotless. She’s going to Vegas instead. She’s got a phone with a US number, so anything that needs to be handled can be handled from there.

Let’s hope Elaine and Patty’s luck holds.

4: Elaine’s Las Vegas Luck (July 27, 2012)

Last time we talked to House Hunter Elaine L., she was off to Vegas with a group of friends. She was fed up with having to keep her condo spotless and ready to show at a moment’s notice, so she figured she couldn’t make a mess if she wasn’t there. Problem solved.

So there’s Elaine enjoying a delicious lunch in Sin City when her phone rings. It’s her Realtor. He’s got an offer. Can she look at it now?

They talk a bit and work out a counter offer and the Realtor sends it off. Lunch is interrupted several more times as offers and counter-offers fly back and forth. Finally, when Elaine is in the back of a cab on the way to an outlet mall, the Realtor calls with the final offer. He scans it to her phone and Elaine signs it, gets it witnessed, returns and continues to the mall… with considerably more to spend than she had when she set out.

Jackpot!

Digital transactions like this are more and more common with the advent of wi-fi, tablets and smartphones. So far there’s never been a problem. Digital signatures are informally accepted as valid, although the real estate industry has not yet had occasion to test them in court. The Realtor also took the contract to Elaine’s co-owner — her mom, Patty — for an ink-on-paper signature.

The condo was on the market for exactly two weeks before the offer, with one open house and 10 private viewings. The buyers saw it in one of the private viewings. The time on market is bang-on for Elaine’s Collingwood neighbourhood. Since May, the majority of comparable condos there have sold within 18 days.

Elaine says the condo had numerous advantages that helped it sell so quickly. First was all the work she and Patty put into it.

“We took so much time to clean it up perfectly,” she says. “We got rid of every trace of our everyday life. It was completely staged. I don’t think other people go to that extreme. We saw other places, and they weren’t as perfect as ours.”

It was also listed in the mid-400,000s — a price that appealed to people getting into the market. Elaine says she’s seen more expensive condos sit ounsold. “A friend of mine has a sub-penthouse that’s selling for $150,000 more than mine, and she’s had it on the market for a year now.”

On top of that, the location is perfect: it’s right by the SkyTrain and close to an elementary school.

The couple who bought have two young daughters. At 880 square feet, the condo will be a tight fit, but in the Vancouver market, condos have replaced fixer-upper detached houses as the first rung on the property ladder for first-time buyers and new Canadians.

The buyers’ bank sent an appraiser, the home inspector did a report and the subjects were removed a little over three weeks after listing. The completion date is August 23. That’s too soon to find a house and move in, so Elaine and Patty are staying with Elaine’s sister for a bit.

“It’s nice not to have a set date for leaving. We can look around until we find the right place. But it’s a motivation as well. We don’t want to impose on my sister for too long.”

Elaine’s excited and a little apprehensive now that the deed is done. “It’s kinda scary. I don’t know where I’m going to live, and I’m going to be taking on a big mortgage. Plus, I’m worried that the market might go down and I will have paid more than the house can sell for,” she says.

But, “Mom believes that in the Vancouver market things won’t go down that much unless something big happens.” So even if the market starts to dive, that’s not going to keep them from looking… or buying

The search is on in earnest now.

5: Know the Market (August 16, 2012)

“I had wanted my dream house right away. I wanted to skip the steps. But now I’m thinking short-term house and long-term house.”

Elaine L. is finding the search to buy a house in Vancouver more frustrating than she had expected, now that she’s in serious search mode. She and her mom, Patty, are camped out at her sister’s place, and they don’t want to be an imposition for too long. On top of that, Elaine was recently promoted at work so her days are super busy. Her evenings are almost entirely occupied with searching online for new listings and going out on viewings or drive-bys.

She’s no longer thinking about a duplex. “It doesn’t feel like the responsible thing to do. I think it’s better to buy a whole piece of land because that’s where the money is, that’s where the resale value is. It just seems more secure.”

But even though she can buy a house up to $1.1 million, she’s finding it tough to find her dream home in Canada’s priciest real estate market.

There was one perfect house made even better by the fact that it was priced in the $840s. She found the listing as soon as it was posted and jumped on it, but despite her quick action, the house was sold before she got to it.

Then there was new Vancouver special that looked more like a heritage house. Not only did it have a unique look, it had the layout she’s after. But by the time she found it, the owners had taken it off the market.

The capper was the three-storey house with an above-grade basement suite downstairs. It was quite new and priced at $799,000. It looked like a steal… until she found out it was a former grow-op.

Lesson learned.

If it sounds too good to be true, it is, and for Elaine that includes any house priced under $800,000. With all the research she does, she knows house prices in her chosen neighbourhoods inside out, and she’s learned to distrust any listing with a price that seems too low for the area.

So the dream house is just going to have to stay in the future. “For now we’re going to look for one with lots of rental income and save up for the one we ultimately want,” she says.

The decision has lightened her load at a highly stressful time. It’s broadened the range of acceptable houses. She can look at the new Vancouver specials that she used to reject because they always had a rental suite on the main floor, and she wanted the main floor and upstairs for herself.

Now that first-floor rental suite is a desirable feature. The income from that will help her get to her ultimate goal, to buy a house in Vancouver that’s exactly what she wants.

[As of 6 Oct 2012, no apparent further updates. -ed]

The final chapter sounds like a dangerous recipe: a rationale for overpaying for a property that is very suboptimal for the owner (a house with the (necessary) rental suite on the main floor!). If Elaine takes the plunge, she could be regretting the decision for a decade or two. – vreaa

71 responses to “REW’s ‘House Hunter Chronicles’ – “I had wanted my dream house right away. I wanted to skip the steps. But now I’m thinking short-term house and long-term house.”

  1. She’s probably renting now, waiting for the pants to drop. Case closed.

  2. Elaine has lots of choice, in a small way she will have had a slightly positive short bet, but agree in the long run this looks scary.

    The logic for wanting a detached property is a bit puzzling, but this sounds like several people I know all too well.

    • The logic for the detached property is based on the teachings of the it’s-all-about-the-land sub-cult.

      • Why? A condominium is the worst form of home ownership. You don’t own any stand alone asset; you’re at the mercy of other owners who in my experience contain at least a 25% idiot faction; its not your choice to defer or proceed with maintenance; your chances of ever being able to cash in on a rezoning are nil etc etc.

      • Angleterre this is called a “control premium”. The danger with this particular anecdote is that they want to buy new in part because they don’t want the maintenance hassle. If they are planning on living there for a decade or two, maintenance expenses are assured, and it looks likely to me they will pay as much or more than a fairly-managed strata. But since they “control” the property they cannot blame others for any missteps. I fail to see how that deserves a “premium” at all.

      • “other owners who in my experience contain at least a 25% idiot faction”

        Imagine the case where 25% of single detached owners are “idiots”. Or perhaps the act of buying a single detached property makes one breathe through the nose?

      • Yes, 25% idiots. Anyone who lives in a condo can rhyme them off: the person who continually pesters the volunteer strata council about inane details; the one who will invariably raise some point that has been dealt with in the strata minutes (try reading the minutes idiot!); the “investors” who don’t see leaky pipes as a threat to their investment and thus vote down assessments to replace them; the aging spinster who complains about someone’s baby crying (sure, they should just get rid of the baby!) I could go on and on. I’ve lived in rental apts, owned condos and houses and condos were by far the worst experience.

  3. In her 20’s, looking at a 600,000 mortgage; good luck with that in 5 years.

    • Cranston Snord

      I’m in my 20 and have decent income and savings, the concept of carrying a mortgage half that large scares the crap out of me.

      Nope, Nope, Nope.

      Liquidity and financial freedom need not only be for multimillionaires.

  4. Seriously, ED – drivel like this should come with a compulsory health warning… Comparatively speaking, cigarettes are good for you.

    All right. Let’s have fun this morning Boyz&Girlz… today’s lesson will begin with a one minute practical introduction to “Investigative Journalism for DedicatedAmateurs”… Let’s start by running a whois the .ca site “REW”….

    **************************************
    Domain name: rew.ca
    Domain status: registered
    Creation date: 2002/02/21
    Expiry date: 2018/02/21
    Updated date: 2011/09/30

    Registrant:
    Name: 0901989 B.C. Ltd.

    Administrative contact:
    Email: bhope@glaciermedia.ca
    ****************************************

    Right. GlacierMedia… Hmmm… Why does that ring a bell….???? Oh yes, something to do with their ChairMan Mr. Grippo!…

    …”Real estate and construction companies were some of the most generous donors to the B.C. Liberals with some donors pushing well over $100,000 according to the 2008 Annual Financial Report.

    Amongst the highest donors were Madison Pacific Properties and The Maple Bay Townhomes Corporation each donating $100,000.

    According to Business Week Magazine, Madison Pacific Properties “engages in the ownership, development, and operation of industrial and commercial real estate properties,” the majority located in Metro Vancouver.

    As of December 31, 2007, the company’s property portfolio contained 1.1 million square feet of net rentable area in industrial properties; 395,708 square feet of net rentable area in highway-commercial properties; and 81,149 square feet of rentable area in office properties.

    In 2007, the company generated over $19.8 million in revenue.

    Sam Grippo, chairman of Madison Pacific Properties, is also president and CEO of Madison Venture Corporation, a company that operates business and tourist publications as well as community newspapers. Madison Venture also gave to the Liberal party with a donation of $10,000.

    Grippo is also chairman of Glacier Ventures, which had company shares acquired by Madison Venture. Glacier Ventures owns daily and weekly community newspapers including Business in Vancouver and, also in B.C.”…..

    [Tyee] – Builders, real estate firms gave big to BC Liberals

    http://tinyurl.com/8kw89v9

    • And there it is, DearReaders… Now you know why so many of those ‘community newspapers’ publish those ridiculous RE Advertorials… because they are actually owned by the RE industry. Surprised?…

      • You mean Vancouver’s media scene hasn’t really changed all that much in over 100 years?

      • Bonus MuckRaking of the, “Darn, how could I have forgotten to include this TidBit, IllustriousEd!?”…

        As it turns out – there are ‘one or two’ other titillating and revelatory facts about the operations/past of the eponymous PressBaron Grippo [by the way, ED – I am reliably informed that Grippo is in no way related to either of Chico, Harpo, Zeppo and/or Groucho]….

        …”In 2006, after taking a 50% (later 59%) ownership interest in Alta Newspaper Group, Vancouver-based publisher Glacier Media purchased a 25% share in Continental for $16.2 million. It later increased its ownership share to 27.6%, for an additional $1.1 million. Glacier is also part-owner of two other newspaper companies connected with Radler, Alta and RISN Operations.[5] Sam Grippo, Glacier’s chairman of the board, was a group publisher at Hollinger during Radler’s time as COO.[6]”….

        http://en.wikipedia.org/wiki/Continental_Newspapers

        [NoteToEd: Some of our DearReaders may not recall that Radler and Black were once guests of assorted state sponsored ‘AssistedLivingSchemes’ – so we’d better include this, too: “The newspapers that currently make up Continental were purchased from The Thomson Corporation between 1999 and 2001 by Horizon, a family of companies owned by David Radler and Conrad Black, independently from Radler’s and Black’s roles as COO and CEO, respectively, of Hollinger Inc. During the 2000s, both men were convicted of defrauding Hollinger and served time in prison”]

    • Renters Revenge

      Good digging Nem, well done!

    • “compulsory health warning” -> hahaha (well said).

    • Wow, Nem, well done.

      I am going to forward this information to City Council and to “media outlets.”

      Appalling!

      What corruption.

    • [NoteToEd: It was too tempting. I couldn’t help myself… I won’t do it again. {today… TeeHee!}…]

  5. This is like the first 6 pages of a horror novel. I am anxiously awaiting the next installment when the plane crashes into the mountain or the werewolf pops out of the bushes and disembowels them…

    a 20 something woman and her elderly mother seeking to buy a house for 1 million dollars. tra la la la la …. zzzzzz Crash.. bang blood mayhem NC-17

  6. What an idiot. What is her income? Our household income is over 400k a year and we didn’t dare look at anything over 1.2-1.3m even with a sizeable down payment. We want to diversify and not dump everything into our house. Our investment portfolio has only increased whereas our house that we bought has depreciated. The elderly woman needs to do some serious research.

    • Agreed. These guys are complete believers in the do-everything-you-can-to-get-into-RE cult.

    • Agree. An idiot it is. Their starting point was:”880 square feet are starting to feel a bit cramped for the two of them and their dog”, so they are off buying awfully expensive property for more than 1 mil that is going to be about 2300 square feet – half of it is going to be rented out, lets say 1000 is rented and the rest is for them – so they only gain 1-2 rooms over what they had before, huge property taxes and upkeep to pay and a rent that only covers a half of the cost of keeping that rental suite. Honestly – I prefer the SFH over the condo any moment but the real cost of owning the big SFH is often downplayed either intentionally by the FIRE people or by the stupidity of the perspective buyer that does not care to get out the Excel spreadsheet and so see how much it really cost to own that 2300 house.

      • Froogle Scott

        All true. The only way you can make a ‘business case’ for their intended purchase is if prices continue to climb indefinitely, and significantly outstrip inflation. The chances of that happening, at this late stage of the game, are very slim.

  7. pricedoutfornow

    What is her income, anyway? How come the paper doesn’t publish that, and show us just how overextended she’ll be, buying a house for $1.1 million? If this story ran in any major American city, our fellow Americans would be shocked and disgusted at how much the bank is willing to lend her (and rolling their eyes, saying “here we go again!”). I’d guess this young woman’s income is no more than $70k per year (any other guesses?). Only in Canada….
    PS-And my condolences to the young family that purchased her 2 bed condo with 2 young daughters. Life is tough in a 2 bed condo with 2 kids-I’m living it now and looking for a bigger place! We don’t want to leave our current neighborhood, so waiting for the perfect 3 bed rental plus to come up…never in my life would I consider buying a 2 bed with 2 kids. Ugh!

    • “Americans would be shocked and disgusted at how much the bank is willing to lend her ”

      the bank’s don’t care, all of it is fully insured through cmhc anyway. and then the bank gets to place the loan(s) into the spreadsheet and show all monies owed as pure profits.

      Didn’t we see this movie a few times before? Mark to market ENRON anyone?

      This country is in for such a wake up call in about 18 months.

  8. Seriously? What kind of income is she making to afford that high of mortgage payment? Maybe her mom need to get a job or two; or it is all her mom’s money?

  9. UBCGhettodweller

    >Chinese traditions also play a part in her search for a good house; for instance, if you need to go down a couple of stairs to get to a house, it’s off the list.

    Good lord. Seriously?

    I guess this is good for those of us without superstitions.

    A single mother living with her mother? Unless they really are some serious HAM, something in the million dollar range will financially cripple them.

    This story pretty much makes we want to throw my computer monitor out the window.

    Vancouver is broken. I’ll be happy to shake the dirt of the Lower Mainland off my shoes when I finish my degree.

    • Exactly, anyone who lets ridiculous superstitions play a part in the biggest purchase of their life is a fool.

      If she was hell bent on buying a SFH near Vancouver during the craziness of the last few years she should have bought in Burkeville next to the airport. Huge lots, zoning that allows coach houses, close to a major employment centre and relatively dirt cheap prices. Sure you have to drive anywhere to shop, but that’s true of most SFH neighbourhoods.

      • Ralph Cramdown

        If I was buying in Vancouver, I’d be boning up on feng shui principles. It’s not about what I believe, it’s about what’s likely to be more or less marketable when the time comes to sell. Whether you deliberately buy a feng shui challenged property at a discount or one that’s got all the right stuff at full price, at least you wouldn’t be making the mistake of overpaying for one that will have zero appeal for a significant fraction of the market.

      • “It is not a case of choosing those [faces] that, to the best of one’s judgment, are really the prettiest, nor even those that average opinion genuinely thinks the prettiest. We have reached the third degree where we devote our intelligences to anticipating what average opinion expects the average opinion to be. And there are some, I believe, who practice the fourth, fifth and higher degrees.” (Keynes, General Theory of Employment Interest and Money, 1936).

  10. meet E-lame…

  11. “But even though she can buy a house up to $1.1 million, she’s finding it tough to find her dream home in Canada’s priciest real estate market”.

    even at record high prices and a softening market sellers are panicking. Of course, if you’re looking for a west side discount from 3.5 to 2.5 the world is your oyster.

    • Please clarify, not sure what you mean.
      Do you mean, with reference to this lady, that buyers are panicking?

      And, BTW, those 3.5 West side homes will be selling with low 1 ‘handles’ before this is all over. They’re certainly not worth 2.5

  12. Dimitri Tishchenko

    How to eliminate the risk for banks in making outrageously risky loans:

    Bank: I’m sorry Mr. Smith we just feel that it’s too risky to lend you such a large amount of money with only 5% down.

    CMHC: Hey Bank, don’t worry. If this guy can’t pay you back just sell the house for whatever you can get and we’ll make up the difference. Mr. Smith we’ll just need a couple of thousand dollars for insurance.

    Bank: Actually… you know what Mr. Smith if the CMHC is vouching for you, we’ll lend you the money you need to pay for that insurance.

    Mr Smith: I will take as much money as you can give me and I’m going to buy the most expensive house I can get.

    We watched what happened south of us and did exactly the same thing.

    • There have been anecdotes in recent years of people with more than 20% down being refused loans, whereas the same bank is happy to give the same client a loan with less than 20% down, because of CMHC backing.
      The mispricing of risk; very bad.

  13. I agree with Bob above as well, that this story is a cliffhanger — when do these ladies get disembowelled?

    Vancouver — is this what you want to be doing to your citizens?

    I know one can say this older lady and her daughter are foolish about their money (and they are), but I almost feel this is an example of entrapment positively encouraged by this City and the mass media’s turning a blind eye to the endless PR campaign that the RE industry runs here.

    It’s also attributable in part to City Council’s being in the RE industry’s pockets. For shame!

    Some weeks ago, I mentioned on this blog that I was part of a group working on a petition to address some RE issues here. I’m sad and frustrated to say that the most politically experienced member of the group, who’d convened it, recently said he wasn’t sure he saw much point in continuing, as he saw “no political will” to change the situation.

    • epte -> You’re aware that we greatly respect your urge to “do something” about the situation, and also your hope that somehow sensible communities should be able find solutions. But you’ll also recall our opinion that there is no chance that the bubble would be legislated away, or removed by any other voluntary method, all because of the breadth and depth of vested interests. We agree with the gentleman you describe.
      It sounds bizarre, particularly if you have a social conscience, but you really do have to trust that the market will sort much of this out (and it will!).

      • Given your expertise and prescience, I do believe what you say above, that the market will sort things out.

        However, still to be sufficiently addressed in my opinion are the duplicity, complicity, craven silence, greed, and unacceptable risk-taking (with other people’s lives) of many major players in this mess.

        No matter what magic the market works, and how much individual responsibility is involved when it comes to RE transactions, there are people and institutions who have played a shameful role in what has happened here, and their actions need to be exposed and deplored.

  14. I’m sorry I keep commenting, but this story has disturbed me more than anything I’ve read in some time.

    Is this older lady going to wind up in the poorhouse because she’s been lied to about real estate?

    Nem, I wonder if there’s any way I could find out exactly who Elaine and her mother are, so I could guide them to this blog and try to warn them?

    I keep imagining Elaine and her mother as otherwise prudent and hardworking, hopeful people who would never do anything this foolish if the RE-controlled (I am choosing my words carefully) media hadn’t egged them on — as well as the supposedly “trustworthy” and “responsible” banks here who were willing to throw money at anybody once their risks were reduced.

    And speaking of that, don’t let me forget the role the federal government played either.

    I need to write to them (and to the CMHC) again.

    GOOD WORK HELPING IMPOVERISH SOME OF YOUR OWN (TOO TRUSTING) CITIZENS!

    • TeeHee… tools like this…

      http://www.tineye.com/search/4a48b632b72d803d8e15563bb375cec735c309a8/

      are often helpful, Epte… and of course, there are other ways… e.g. someone here who uses SocialMedia [‘Nem’ don’t] could post that shot on their ‘Wall’ and see if the FacialAlgos match it to other imagery…

      Beyond that, I must adhere to the VeryStrict&Particular CodeOfConduct enforced by ‘YeOldeGuilde of Most Venerable TravellingFortuneTellers & OracularClairvoyants’… who would most certainly censure me [‘with extreme prejudice’] were I to further elaborate upon SourcesMethods&Craft…

    • epte, chances are the are none-existent people at all, just the play of imagination of the PR people, creative writing!

      • There is a doubt about the qualifying of the single income earners for the mortgage that is about 700K after using their 400K for the down-payment. At least the Household Income Required is more than 160K as I can see from the CMHC calculator.

  15. “Nem, I wonder if there’s any way I could find out exactly who Elaine and her mother are, so I could guide them to this blog and try to warn them?”

    don’t waste your time, my guess is most of what you read is fiction (elaine’s story)… or reads like fiction…. pump, pump, pump… funny thou how there are no follow-ups? if story is true, they can’t do a follow up… still living with sister or renting a different apt. and pooof this ends the RE perfect story about moving up the property ladder… instant wealth sign here and you net worth went up $800K. just ignore that other column that says you owe $700K … what red ink

  16. KC, that’s an interesting take — that the whole story is a plant, a fiction contrived by RE pumpers. I definitely wouldn’t put it past the RE interests manipulating the media (and the “journalists” who go along with all that) to have done something like that.

    But when I look at the photo and read the quotes in the article, I can’t help but think Elaine and her mom are real and are wading into horribly dangerous waters.

    Elaine might have been one of my own students. And I wonder if her mom is a widow? Hey profiteers, hey Stephen Harper, any of you read that part in the Bible that says no one should take advantage of a widow?

    I’m sorry, I’m so angry I can’t contain myself. The wolves that are waiting to disembowel this young woman and her mother are “perfectly respectable” government officials and bankers, as well as the usual RE villains and their local handmaidens, the press.

    • I agree but Elaine and her mother also has to take responsibility for their portion of ignorance although the tides are in favour of purchasing property. She has to objectively look at her current money situation and really ask good questions rather than be guided by the intense desire of owning a SFH. People have to realize that any asset value can fall and what is written on the piece paper is impermanent depending on the psychology of the masses. We all need to be trained to critically think and see beyond the illusion! “A great deal of intelligence can be invested in ignorance when the need for illusion is deep.”
      Saul Bellow

    • This is the real deal, epte. I know people like this, which makes this story all the more poignant for me.

      I’ve been crying wolf so much i now just keep my mouth shut 😉

      • Eyes open, ears open, mouth closed

        A bit of pagernal wisdom here:

        “Don’t worry about what the idiots are doing, let them lose their money – worry about yourself.”

        That’s how I maintain the appearance of sanity in all this, anyway..

        “what’s that, you say you bought a condo? Tell me more..”

        See, you can’t fight the bullshit, just pretend to go along with it.. It’s a hoot

  17. Keep in mind that those selected for the REW received $500.

    Could be just a quick fake story by Elaine and mom to pocket $500

  18. I suspect that the story is a loose fiction, based on intentions and woven in with the experiences of a few people. My guess is that it was initially supposed to end with a happy purchase in the late summer, but that the author has been derailed somewhat by the weak market, and is not sure where to go with it now. Whether Elaine and her mom actually exist is unclear.

  19. Maybe I’m too gullible myself, but I find the story quite believable, given
    a). Vancouver’s RE market and the number of people swept up in making foolish decisions within it;
    b). the amount of detail in the story;
    c). the story’s not having that happy ending yet: castle found!

  20. There’s no need for the story to be fake (although, yes, it could be a ‘composite’). Elaine and her mother have exactly the same mindset that tens of thousands of people all over Metro Vancouver have had for the last decade – leverage up into the size and type of house you feel you need/deserve. Even with the market looking like it’s finally turned, there’s probably still a good-sized pool of people that REW can draw from.

    The unfortunate thing for these two women is that they don’t seem to have gotten the memo regarding the direction the market is probably headed. Will they end up as roadkill? Hard to say. If prices do start to plummet, prior to them buying, that may cause them to hold off. But I could also see them, along with a number of others, catching the falling knife. Relative to recent prices, 20% off may look like a fantastic deal, until you buy and prices drop another 20%, or more. Even if Elaine and Patty found themselves in that situation it wouldn’t necessarily be fatal if their purchase is well capitalized. If they carry a lot of equity from the condo sale, have additional funds they can add to a down payment, and diligently plow the income from the rental suite into additional mortgage payments, they could avoid negative equity and the risk of losing the house. A terrible ‘investment’, one that would cause them to lose a lot of money, but they wouldn’t necessarily be out in the street.

    The happy ending here would be Elaine and her mother getting cold feet, like Kristen and her husband in a similar feature run by The Globe & Mail a few months back. They’d rent a place that meets their needs, and buy that house only once prices come back in line with fundamentals.

    • “A terrible ‘investment’, one that would cause them to lose a lot of money, but they wouldn’t necessarily be out in the street.”

      It may not be Elaine and Patty “out on the street” but pick two other name pairs from the hat from the owner pool — likely tens of thousands as you suggest — and hardship is all but guaranteed. That’s the thing with “tail risk” — as I’ve stated a few times before this type of purchase is akin to a “reverse lottery” with many “small winners” and a handful of “big losers”.

      Those who avoid “losing big” won’t make the six o’clock news.

  21. Brilliant perspective here on the importance of context. Posted on this blog without commentary, this story tells a completely different story than the exact same words posted on their original blogvertisment.

  22. hello, chubster here corresponding from the belly fat of the beast (it’s mostly skin – lol) and impersonating a new pseudo-fictional adult video star (lol) …
    epte, reckless endangerment by morgenson/rosner worth your time – quickie brief here … http://tinyurl.com/8c2j66x
    meanwhile, this … http://tinyurl.com/9a32wev … caricature perhaps but the O hits closer to the mark than any msm … electorate so aghast with idea of 4 more years of obama, they might still elect romney even after he tells 47% to FO … policy won’t effectively be any different but he’s less competent at lying they reason, and maybe that will save some time, money and jobs … pfffft!

    • [NoteToEd: “Ten coats of CompetitionOrange… FullF***in’ RaceCams!”. When Rod Jonsson parties… He PartaysBig! Don’t believe me? Just ask DirkDiggler.]

  23. Carioca Canuck

    I have some doubt as to the authenticity of the “story” for a couple of reasons. Mainly because it is an “advertisement”……………and not a “story” to start with. It’s a psychological ploy specifically engineered for the female emotion of “nesting” and written for a single demographic that populates the lower mainland.

    Nemesis’ exposure of the ownership of the media in question, is enough for me to believe it is 100% fake. There have been numerous proven incidents of deliberate fraudelent misrepresentation by members of the “REIC” in their varied marketing campaings. From choppers full of ficitonal HAM, to paying people to line up in front of condos for sale in an effort to create an illusion of demand wher enone existed before, using glamorous blonde pumped full of silicone as “sales managers” in the news media who are nothing more than professional event models, etc, etc, etc…………

    The CALGARY HERALD is full of this utter BULLSH*T on a weekly basis.

  24. The Poster Formerly Known As Anonymous

    Someone wise once said about Vancouver Real Estate purchasers:

    “They are ALL speculators”.

    In that light, let’s review some of the main concerns and motivations mentioned by the subjects of the article:

    “What if the market crashes and my house ends up not being worth what I paid for it?”

    “Plus, I’m worried that the market might go down and I will have paid more than the house can sell for”

    “Mom believes that in the Vancouver market things won’t go down that much unless something big happens.”

    “I think it’s better to buy a whole piece of land because that’s where the money is, that’s where the resale value is. It just seems more secure.”

    So, why exactly are they buying, again?

  25. Just In: Insured Buyers are the Majority

    For those purchasing from 2010 through spring 2012:
    41% had less than a 10% down-payment
    21% had a 10-19.99% down-payment
    Only 39% put down 20% or more.

    No comment.

    • Get the last figure – how many put down 100% – and you pretty much get to solve a mystery if there is a real HAM influence on RE market in Canada.

      • Missing a chromosome

        Hahha oh yes lets just pretend CMHC isnt backstopping HAM land banking schemes.

  26. Relaxed & Happy Islander

    Off topic, sorry, but too good not to share….HAM spotted heading for the ferries…
    http://www.huffingtonpost.ca/2012/10/05/bc-recreational-property-chinese-investors-buyers_n_1944262.html

    • notselling yet

      I hope realtors tell folks buying on the Gulf Islands that BC Ferries has been cutting back on some routes. Maybe realtors throw in a free boat with the real estate.

  27. the Vancouver Courier, bastion of balanced, informed journalism, is reprinting these articles: http://www.vancourier.com/business/House+hunter+chronicles+vegas+luck/7348562/story.html

    • Gee. Confirms what we knew of the Courier.
      Perhaps the story will end differently this time around. I can’t see how this chronicle started out without the intention of ending with a happy purchase. Surely.

      • Barry Gettman

        It would be hilarious if this lady and her mother suddenly came to their senses and realized that the market is tanking (with all the negative MSM publicity and market statistics). Since they sold their condo, they are in the optimum cash position and can wait out the crash. If they did this, would REW document this course of action? lol….

      • That occurred to us, too. Perverse.

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