“One of our best friends thought her house would sell at over $1.2M. She was really pissed when the realtor told her bluntly that it would not sell for over $999K, as nothing was moving over $1M, and that at under $1M it would take 6 months if she was lucky.”

“Interesting comments from one of our best friends today. They had a realtor “evaluate” their house for sale. Looks like my constant bubble talk is “perhaps” getting through? You guys may remember that they were featured in my post a while back [VREAA 8 May 2012], about the wine soaked Calgary dinner party I attended at their place a few months ago, where RE was the topic of discussion over cocktails.
She told my wife today that she thought her house would come in at over $1.2MM. She was really pissed when the realtor told her bluntly that it would not sell for over $999K, as nothing was moving over $1MM, and that at under $1MM it would take 6 months if she was lucky. Now she doesn’t want to list as the market “will come back” and RE only goes up. Well, they only owe about $200K. And in 5 years from now it will be paid for, but probably only worth $500K.
They are my dear friends and a hit of that magnitude would not dent their net worth by >10%. But still, “a fool and their money”…”.

Carioca Canuck, at VREAA, 12 Oct 2012 6:47pm

40 responses to ““One of our best friends thought her house would sell at over $1.2M. She was really pissed when the realtor told her bluntly that it would not sell for over $999K, as nothing was moving over $1M, and that at under $1M it would take 6 months if she was lucky.”

  1. Based on 2008, many people probably figure it’ll only take a year for the market to come back. The reality, at least to the bears on this blog, and based on the US/elsewhere experience, is that it could take much, much longer; quite possibly decades.

    • Ya, I think that 2008 dip and the artificial recovery is the most fascinating part of all this. It was so perfectly timed that what would have been the peak of the bubble ended up getting blown past. Now it is going to take so much longer to unwind and people are going to be so completely flabbergasted that the market doesn’t come back that I have no idea how it will unwind. Vreaa’s 50-66% could come up light, the confusion, stubbornness and bankruptcy rate could drive this place right into the ground while most homeowners and empty nesters sit there dumbfounded.

      • Rusty's Ghost

        nah, we’re bringing in 300,000 SKILLED workers next year

        everything’s going to be alright (rennie told me that)

  2. Where's the HAM?

    Sounds like someone who just doesn’t understand the real estate market. Maybe she was taking advice from agents or friends.

    Either way, she got walking into a dangerous market without taking the proper precautions.

  3. And… things won’t get better:

    http://www.ctvnews.ca/canada/canada-s-household-debt-hits-record-high-new-statscan-figures-show-1.996273

    ‘The revision shows debt growth over the last decade that looks “eerily similar to the U.S. experience, just before their dramatic housing bust,” said David Madani, an analyst with Capital Economics.

    “Overall, this supports our bearish view that Canada’s housing boom is unsustainable and the eventual correction, which we think is already underway, is likely to have a material negative implications for growth,” he said.’

    In other words, people are screwed. Even, perhaps, people like the friend of the person in the post above.

    The thing that ticks me off is the fact that, while those of us who have been prudent during the inflation of this bubble will do comparatively better than those who have not (on average), we will still get dragged down. And doubtless the collateral damage will affect many of those in the prudent camp.

  4. I was at a dinner party on the weekend in a Vancouver suburb. Noteworthy point – no talk about real estate. A year ago, couldn’t be more of it. This time though, lots more enjoyable things to talk about. The closest we came was when someone was introducing themselves, and mentioned they were a fire fighter. Another person said, I thought you were in construction. To which the counter point was, that the person was a fire fighter and being a builder was a side business. Conversation then turns to something else.

    It looks like the collective consciousness has turned – an anecdotal sign of a shift of interest which will likely be marked by a shift in demand.

    CanAmerican.

    • I have an ex-military buddy who went on to become a firefighter. From the stories he tells me, I think he often finds himself in construction. 🙂

    • pricedoutfornow

      I wonder if polite conversation doesn’t raise real estate as a topic of conversation anymore. Like how people don’t talk about religion at dinner parties. I often visit people in the Okanagan where real estate has gone down about 30%. Nobody talks about real estate (except to say how the market is bad), then it’s on to the next topic of conversation. A lot of people have lost a lot of equity in the past few years, but nobody wants to really talk about it. It’s in bad taste to raise the subject. Is it going the same way here, I wonder?

    • …”Sethi explained his company did considerable research by talking to younger people, and found that while they really wanted homes to call their own, they weren’t concerned about size and would be willing to compromise in that area.”… Charan Sethi – President Tien Sher Group of Companies

      Hopefully, there won’t be any compromises on the SprinklerSystem, SmokeDetectors or Annunciators…

      [canadianimmigrantDOTca] – Indian-born Charan Sethi grabbed chances to succeed in Canada

      …”Sethi decided to go back to school and get his real estate licence. He worked as a realtor for 22 years before deciding to become a developer. He already had some experience renovating houses and selling them for a profit, so he started a real estate development company with his sons. It began as a small venture, but now he sells hundreds of condo units in the Lower Mainland. All this success has not come without significant trials, however. In October 2008, one of the buildings from his biggest project, Quattro, burned to the ground.”….

      http://tinyurl.com/d4gr3j3

      • BonusIllustration! Mr. Sethi & Friends…

        http://tinyurl.com/8u6zxnw

      • Renters Revenge

        And if there are any problems with your new shoe box…
        “’If you hang in there, it only gets better,’ he guarantees.”

      • Rusty's Ghost

        LOL

        i forgot about this

      • The funny thing is, the more I reflect on that shot… The more it seems that Mayor Dianne Watts is auditioning for the PontiusPilate gig in the next Andrew Lloyd Webber FraserDowns ‘Superstar’ revival. Astute readers will detect, with no trace of irony, a Surrey Fire Service F.I.T. TeamLeader apparently suffering from Dysphonia.

        [NoteToEd: FireInvestigationTeam]

      • Rusty's Ghost

        Nothing to see here, folks – move along

  5. 4SlicesofCheese

    Cousins are selling their Richmond house that was left to them by their parents. They think its worth about 1.5 million and are going to sell it and buy a new house for themselves once they sell the old place. They plan to sell in March, it will not be worth 1.5 in March.
    But whatever they didnt pay a cent and get a free house. But imagine the money they will lose out on.

    • Well, the new house will be cheaper too so they really aren’t losing out a whole lot

      • Of course they are, Observer. Sorry to have to disagree with what I think is flawed thinking where capital preservation is concerned. Remember that old maxim “buy low and sell high”? Well that definately applies here. The difference in how much capital you preserve or build is discovered in the timing of your purchases and sales. Timing is as important an issue as price here and seems to be one element that is too often ignored by homeowners. The problem that many get into is that they want to seamlessly go from the ownership of one residence to another without regard for current market conditions and the prwevailing trend. Thus holding on to a depreciating asset and immediately buying another at an equally discounted price appears benign on the surface. Contrast this however with a seller who captures a sale at the peak of the market and then waits (possibly for several years) before reentering the housing market once prices have stabilized at a lower deflated value. The difference in outcomes between the two is dramatic coming off a bubble initiated by a period of very excessive credit. In the first case the seller recognizes real net losses in equity despite continuing to own a home while in the second case the more reluctant home buying participant pockets a gain while only having to redeploy a fraction of the selling price to acquire a new home at a later date. Subject number two will in principal end up with both a home and a cache of investable funds after the dust settles whereas the other fellow may end the day with little more than mortgage debt and no equity whatsoever. This is particularly true in a market such as Vancouver where the decline in prices and the numbers of sales is dramatic. It is therefore absolutely essential to sell off your residence when a housing bust has become obvious if you truly want to keep and enjoy the gains that have been thus far achieved. What else is the point? Clearly anyone who has been bragging about the appreciation of the family house is implicitly acknowledging how the market has delivered substantial theoretical profits to them without any special effort on their part. Is it not normal therefore to want to lock in that appreciation before it disappears and retain the wealth effect that a low rate environment has engendered? Apparently not given the record of comments I see all too often. People who write into blogs like this and argue that the rise and fall of real estate is not relevent where their own home is concerned are complete fools in my opinion. Indeed it does matter. The whole point of a speculative mania is that by its nature there is speculation involved for all market participants (even those who are not in the business of speculating). To turn your back on the outstanding upside gains and shrug your shoulders as some here do while the market sinks back towards historical norms is beyond naive. History shows that most people do not benefit from credit booms over the long term as most misjudge both the importance of timing in their investment decisions and the hazards of easy credit conditions which permit them to become unfathomly mired in inescapable debt while easy credit continues to be available. So the old saw is still in force. Sell high and buy low. It is what you do with your money in the period of time between these two events that really counts in the end. And that is the difference between smart money and everyone else.

      • I misread the post I was replying to as I thought they were living in the house that was given to them but they are cousins so that doesn’t really make sense. In the case where the house is sitting empty and provides no other benefits then yeah, they should sell ASAP.

  6. Calgary (median price) topped out in 2008 and never reached the same prices again.

  7. Marsellus: In the fifth, your ass goes down. Say it. … Motherf(^&ers who thought their ass would age like wine. … If you mean it gets better with age, it don’t. … pfffft!

    • Buthch: Are you okay?

      Marsellus: Nah man…I’m pretty effing far from okay.

      Got to love the quotes of that movie, they are legendary!

  8. I absolutely love the situation we are in right now. It is so damn hard to qualify for a mortgage, forcing the perpetual renters to be forever priced out in a big city like 416 or Vancouver. At the same time, people with existing mortgages can enjoy this low interest rate for a long time. By the time rates normalize, the tenants would have paid off their properties.

    I wish you luck being liquid. I would rather pay the bank 2.15% to use your money (for which you probably get 1.05%) and invest it in providing shelter for you so i can take your rent check every month and build equity for myself.

    I always tell my tenants that i think real estate will definitely crash by at least 90% when i stop by to pick up my rent check. I even refer them to this blog. After all, i want them to have some hope in the future so they can be motivated enough to get out of bed every morning to go to work to pay my mortgages.

    It’s going to be a nasty CRASH, renters, a nasty CRASH.

    • Bryan, I just like the guys like you, with their concrete belief that the prices are going to stay high! They saturate the rental market very efficiently and subsidizing the rent for the tenants, more people like you the better, hold tight on these houses, loose equity waiting for the better times as the prices decline while we enjoy the life and at least 30% discount for the real cost of living in your home!

    • Given the number of people I hear stating this, I’m sorta vicariously worried. With all sincerity, enjoy it while it lasts!

      • Rusty's ghost

        Sorry, that there will be a ‘nasty crash’ or that our local landlords are all technically subsidizing our lifestyles due to the rent price months to own ratio?

        Anyways, I am the ghost of rusty – buy now or be priced out… FOREVER!

      • Given how low mortgage rates are right now, I think both parties can come away feeling a winner!

        Two minor difference though, one of the parties has some additional risks to do with asset price stability and liquidity. And risks involving repairs.

        Other than those three minor differences, winners.

  9. These COCs ( Caucasians On Credit ) really crack me up. Will they ever learn?

  10. This blog has been preserved from the trolls seen elsewhere, but are finally showing up. Panick sign?

  11. bryan dude, good to hear you need those rates to stay low … we, the owners of your mtg bonds, set aside a bit with each of your payments to advertise assurances that prices dip at most 15% … of course, our bailout is pre-approved if we’re wrong

  12. Pingback: “I want my tenants to have some hope in the future so they can be motivated enough to get out of bed every morning to go to work to pay my mortgages.” | Vancouver Real Estate Anecdote Archive

  13. Terminalcitygirl

    You gotta headline this one VREAA

    http://home.mytelus.com/telusen/portal/index.aspx

    If the friends of Gordo and the Liberals are desperate to get out, it’s all over in BC.

    • Terminalcitygirl

      Oh, here it is! Please delete VREAA. Failed on the link and have posted the correct one on the more recent thread. Thanks!

  14. I used to read this blog with eagerness. Hungry to get any smell of bubble popping to 1) confirm that I was right in selling my condo and 2) so I can look forward to buying a SFH in the future 3) to alleviate the pain of not buying a SFH in 2003. But now as it is unfolding, I feel sick and we haven’t even hit the climax of this housing crescendo. Sick to my stomach of the upcoming ravages, chaos, suffering, pain that will be experienced by people. Some people (speculators) deserve it and some don’t–the people who were just working their hardest to do “get ahead and provide “security” for their families. I am sad 😦

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