“How much can it drop?” – $412K (23%), plus one car, and counting…


A Long Way Down


2575 7TH Ave W, Vancouver, BC, V6K 1Y7, Canada
1721 sqft triplex townhouse.

This unit featured on ‘Vancouver Housing: Bubble or Bust?’, The National, 20 Sep 2012 and archived and discussed on these pages [Realtor/Speculator On ‘The National’ “Trying To Sugar Coat The Ugly Reality That Prices Are Tanking”, VREAA, 23 Sep 2012]. Excerpts from The National piece:
CHRIS BROWN: “At first glance Philip Chan’s property in popular Kitsilano would seem to support those who believe the crash is upon us. It’s a very nicely finished 1,700 square foot newly built unit in a triplex. Back in March it came on the market for $1.79 million, including sales tax. It’s now 1.57 million. That’s an almost 12 percent price drop.”
PHILIP CHAN: “Unit like this, I think you can find no more than 10 on the market at this moment. How much can it drop?”
CHRIS BROWN: “At his Kitsilano property owner and realtor Philip Chan is sounding confident the market won’t slip much further from the 10 or 12 percent it already has.”


“How much can it drop?”


UPDATE 14 Oct 2012

Thanks to joey jo jo who writes:
“Remember Philip Chan the realtor who was profiled on the CBC National report? He was commenting on how the market had “adjusted” and he had recently reduced the asking price on a property he owned by 220k. It looks like that same property is still on the market but for another 197k less than what he was asking in the September 20 report. AND he’ll throw in a new FIAT 500!!”

2575 7TH Ave W, Vancouver, BC, V6K 1Y7, Canada
Ask price now: $1,373,000

From Phillip Chan’s website:
“A brand new 2012 FIAT 500 Pop is a present to you if you purchase 2575 W7th Ave! As seen on CBC News The National “Vancouver housing: bubble or bust?” on September 20, 2012.”

$417K [23.3%] drop in ask price, thus far. Plus one car.
For the record, we don’t think prices will fall 39 km.
But 50%-66% from peak, highly likely.
– vreaa

43 responses to ““How much can it drop?” – $412K (23%), plus one car, and counting…

  1. I love the FIAT 500, but he’s already dropped the price by two Ferrari 458 Italias. Surely he can do better than a FIAT if he’s serious, at least upgrade it to an Abarth.

    • Keeping in mind that you’re going to be paying land transfer taxes and realtor fees initially, and property taxes annually, on the value of that car. Best to exclude it from your offer.

      • I don’t care what you say, Ralph… LexLimo had me at “Ferrari”!

        Oh, S**t… F***in’Hell… ReBoot. ReBoot. ReBoot.

      • “My God, it’s full of Stars!”

      • Ralph Cramdown

        Market, Market, give me your answer, do
        I’m half crazy, waiting for months for you.
        There won’t be a bidding war,
        The price has gone through the floor
        But I will spool my greater fool
        With an auto that’s built for two!

      • “I’ve still got the greatest confidence and enthusiasm in the mission and I want to help you.” *

        “Helping you is what we do.”™ [Royal LePage]

        [NoteToEd: No kidding. They really ™’d it. There actually is, by the way – as incredible as it might seem – an entire WebSite devoted (for the sake of ‘Practioners’!) to Realtors™ slogans, LogLines and “Elevator Speeches”. I s**t you not. Funny Old World, eh?]

  2. Still with you on the 50% or greater price “correction” forecast, VREAA, varying from community to community, of course. Indeed, the only real surprise for me so far is the suddenness with which this greed-filled worm has finally turned.

    • Hi Gord, good to hear from you.
      To me it feels that the price-worm hasn’t so much as turned as stopped dead. It’s looking around, a bit, sure, in some communities, but it hasn’t really turned around and bolted in the other direction yet. Do worms ever ‘bolt’? Anyway, yeah, agreed, things have changed. Keep well.

      • Speaking of ‘TurningWorms’ & ‘Bolts’…

        “The Canadian housing market has clearly lost some of its lustre.” – Francis Fong, Economist, Toronto-Dominion Bank

        [G&M] – National September Home Sales Plunge 15.1 YOY

        …”But, adjusting the numbers for seasonal trends, September’s sales edged up…. the Canadian Real Estate Association (CREA) said Monday.”

        http://tinyurl.com/9p32omw

        [NoteToEd: Don’t you just love those, “But! Adjusting for SeasonalTrends…”! They’re almost as amusing as the HPI™ and hedonic ‘smoothing’. Gotta love’em, “SeasonalTrends™”! Is it just me, or has anyone else here never seen a SeasonalTrend™ employed by CREA to express a decline in sales?]

  3. Need more info, what is the assessment , what was last sale price on similar unit???
    Was it just way overpriced??
    I am very bearish on Van RE, but need the whole story.
    Dave#1

    • We’d also find “the whole story” of interest.
      Obviously, a 23% drop in asking price is not the same thing as a 23% drop in sales price. Our prediction is for a >50% drop in actual sales prices.

  4. I thought there was a requirement for agents to disclose if they were acting as principals, and not simply agents on the description sheet. Given Mr. Chan owns the property and developed it, shouldn’t it be disclosed? I’ve spoken to some reputable real estate agents and they told me they would never list a property they own because of potential liability issues. Seems like Mr. Chan has no such qualms.

  5. In the blogosphere $412K is only a number on a screen. In real life, thats a life changing amount of money for 99% of Vancouverties.

    This is no chump change were talking about, in a broader sense it really goes to show how desensitized we have become to these enormous numbers.

    Stop to think about the amount of cities in the world where $412K could buy you this unit, or one superior!

    Were all completely brainwashed by whats happened here in the last decade, I for one welcome the giant enema the city is about to get.

    • “$412K is only a number on a screen. In real life, thats a life changing amount of money for 99% of Vancouverties.”

      If that’s true, they have no business buying. Volatility cuts both ways. If it goes up 50% in a few years, it could go right back down. That is a risk you take (or don’t take). And if you can’t afford it, don’t take the risk.

      • Exactly, almost no one has any business buying in this market. For 90% of people living in Vancouver $400K represents over a decade of savings. For the average family in Vancouver $400K is almost a decade of after tax income. This is a life changing amount of money.

        The market is so out of touch with income or savings. It is built entirely on debt.

  6. Sell now or sell never

    Hes giving his car. Well, that mean he is broke after that deal and he cant meet the monthly payments for it so hes making his last shot : even. Hes selling the same price he bought + house improvements.

    Next offer, in a few weeks, hes going under. He must feel exactly like Baumgartner right now, except he has no parachute and he knows it.

  7. Btw, thanks for posting this update to the “How Much Can It Drop?” story, and the comparison to Baumgartner’s plunge.

    I’m laughing, though I wish we could say that the upcoming RE plummet was in the name of science.

    Then again, maybe a particular Sauder economist will learn something from it?

  8. Someone should tell Garth. He thinks Kits will be lightly affected by this correction.

  9. I’ll mark this one up to bad timing.

    The more I read and listen to Michael Pettis the more I think things are going to be worse than people think. If he’s right Vancouver’s goose is cooked.

  10. It is hilarious that Phillip Chan mentioned in his website:
    “As seen on CBC News The National “Vancouver housing: bubble or bust?” on September 20, 2012.” I bet that it gives a lot to think about to potential buyer and most of them just end up deciding to wait out for the bust of the housing bubble!
    Smart realtor he is not.

  11. For heaven’s sake, it is only 1 unit in a triplex – how much did the other two units go for?

  12. $1,373,000. Even after the reductions, it’s still a head scratching price for mere mortals.

    Lets see now: Just under 1.4 million dollars gets you 1/3 of a building on a lot which on which most Canadians would envision a single detached house. (Google street view still shows the blue house which was razed in order to build this triplex.) Except for the power lines over the sidewalk , it’s a pleasant looking but ordinary neighborhood.

    And the bonuses:
    It’s attached, so you can hear all your neighbors arguments about money.
    A parking “space”. Reminds me of my apartment rental days.
    A front “yard”?!? Sure, have some close friends over for a BBQ, two feet from the sidewalk. Actually, here I prefer my old apartment’s balcony.
    It was more private.

    Why would anyone doubt that a fifty to seventy percent drop in Vancouver RE prices is not only likely, but inevitable? Take away easy credit (done) and popular thinking that RE prices only go up (almost done) and you have a downward spiral.
    It goes like this:
    Do I want to offer 1.2 million, if I think there’s a chance it might be worth only $900K in six months? Do I want to offer $900,000 K if it might drop to $750K next year?

    As more and more buyers do the math and weigh the risk of leveraging to buy a depreciating asset, we are going to see jaw dropping price drops.

    • Renters Revenge

      “As more and more buyers do the math and weigh the risk of leveraging to buy a depreciating asset, we are going to see jaw dropping price drops.”
      Winner winner chicken dinner!

  13. Anyone know how these typically work in terms of ownership rights and fees? I’m familiar with the tall condo/strata model where the builder appoints the initial condo committee and writes the initial bylaws, and once the place is finished the owners can elect a new committee and discover how much they’ve been screwed for management fees, leased HVAC equipment etc.

    But how does it work in one of these mini developments with only a handful of units? Do they pay the wee developer a monthly maintenance and management fee, or are they on their own to maintain and manage the building, with rock-scissors-paper to break voting ties as necessary? Anyone?

    • From what I understand triplexes are about the worst thing to own as 2/3 is not enough to make any changes. Most stratas require a 75% vote, which is impossible with 3 units unless everyone agrees. I’m sure there’s a bunch of different ways small units are set up but for some everyone has to agree to make changes otherwise nothing gets done.

  14. Can anyone make sense of the MLS listings for this property? Based on all the history, it appears that Philip Chan is not connected with the original build-out and only seems to own a company that bought this unit on Spec in the summer. Or he spun this property out into another one. It looks more like a tax cheat than anything. Why sell it from Panda Construction to 0820250 BC LTD on August 1. Then – immediately re-list it (strangely enough – with a completely new PID number so it could not be tracked easily) and then drop the price. This sounds like a need to him to get some capital losses into 0820250 BC Ltd. All by way of a stroke of a pen – I would check to see if Panda and 0820250 are related and then if so – get the entire transaction on August 1 unwound. In fact – Rev Can would deny the loss potentailly in the buyer and make the seller pay the gain if you do the transaction off-market. Anyone want to try to report this cheater? ? ? This all sounds very fishy . . . . .

    • The Poster Formerly Known As Anonymous

      Forwarded your comment to a CRA employee acquaintance. Not sure if his is the right department, so if anyone else knows the correct way to raise a lead, go ahead.

    • Rumour has it 0820250 BC LTD is heavily levered into MassiveShorts on assorted exotic derivatives of the Saudi Goat/Sheep SeasonalTrends™Index… ‘GoatToasting’ BBQ time AllAround for Mr. Chan, it would seem.

      [AlArabiya] – Soaring sheep prices in Saudi Arabia

      …“You can purchase one sheep for $490 (SR1,800) while you find the same, in another place for $517 (SR1,900). So what’s the reason behind this difference in prices? There is a reason. This one says that it has better hair, that one says that he uses specific fodder. This is brought from the desert, but that is brought from another place. There should be a monitoring body or a scale to determine the prices,” said a buyer.”…

      http://tinyurl.com/d3fuxow

    • Former & Future Renter

      Not to worry, soon he will have more capital losses than he knows what to do with….

  15. How much can it drop?… or should we say, “they drop”?

    Evidently, 100 MetricTonnes… an O/T ‘thread intrusion’ of interest to those contemplating the purchase of Northern BC CoastalProperties, or possibly just to those who simply wonder why Canadian journos aren’t ‘all over’ this one….

    [UK Guardian] – World’s biggest geoengineering experiment ‘violates’ UN rules: Controversial US businessman’s iron fertilisation off west coast of Canada contravenes two UN conventions

    …”A controversial American businessman dumped around 100 tonnes of iron sulphate into the Pacific Ocean as part of a geoengineering scheme off the west coast of Canada in July, a Guardian investigation can reveal.

    Lawyers, environmentalists and civil society groups are calling it a “blatant violation” of two international moratoria and the news is likely to spark outrage at a United Nations environmental summit taking place in India this week.

    Satellite images appear to confirm the claim by Californian Russ George that the iron has spawned an artificial plankton bloom as large as 10,000 square kilometres.”….

    http://tinyurl.com/9aygekf

  16. the price drop now brings the price to $924/sqft.
    I’m not familiar with townhouse pricing but it still seems like
    a pretty steep price to me. Is this supposed to be an example of
    a price crash?

    • Check your math there F1. $1,373,000 (current price) / 1,721sf = $797/sf (not including the free car)

      Still a very steep price, but the fact that a realtor, someone who is supposed to be following the market very closely, thought he could get $1.79mil months ago and has since dropped the price a very large amount means he knows where the market is headed and this isn’t just a blip.

      The price it is now seems fairly in-line with other places in the area like a townhouse (1131 sf) down the street for $716/sf.

      • “Check your math there F1. $1,373,000 (current price) / 1,721sf = $797/sf (not including the free car)”

        my apologies – I was looking at the old price.
        Same question applies…is $800sqft considered crash pricing?
        I’ve seen sales of Westside townhouses just this month at more than 1.5million. So, assuming west side is crashing (as argued on this site), are these the prices that are raising your hopes of home ownership?

      • Rusty's Ghost

        uhm..

        so this is not significant

        you’re such a shameless hack, you know that?

  17. Philip Chan down another $25K today

  18. Not to beat a dead horse too much but I feel that Philip Chan epitomizes the side of real estate that many hate. His tactics, his comments / blatant lies on CBC, building and selling his own properties etc. Well here is another update:

    Philip Chan has apparently decided that showcasing the FIAT 500 instead of the Kits duplex is the way to go – main display image is now of the car, not the house:

    http://www.realtylink.org/prop_search/Detail.cfm?MLS=V969843

  19. 7 months later another 25grand off (or a fully loaded fiat) and still hasn’t sold 😥

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