“They say the market will likely be down all year, so it looks like I will have to keep it at least till the end of the year.”

“Shortly before the market peaked I decided to sell my lower mainland home which I had owned for about 10 years. The time of the sale turned out to be good for me, for which I attribute about 90 % of the timing to pure situation luck. I am now looking to rent as I take a wait and see what will happen stance.
I stopped by and looked at a newer condo (< 6 months old) for rent in the SE False creek area tonight and had an interesting conversation with the landlord. She was a younger lady that appeared to be about 30 years old. The condo was in a messy state after the last renter left in what looks like a hurry, with clothes and personal items scattered about the place. She was busy trying to clean it up.
One of the first questions she asked me with a frustrated look was “how soon are you able to move in?” Subtext – She really didn’t sound like she was able to afford to have the place sit for even part of a month.
Her next question was “how long are you looking to stay?” To which I asked “why are you looking to sell it later?” She responded “no, not now. They say the market will likely be down all year, so I it looks like I will have to keep it at least till the end of the year.” Subtext – Could she have bought this condo looking to flip it and make a profit? Now things have changed and is she stuck being an unwilling landlord until the market improves?
Of course this is all purely speculation on my part, but she definitely didn’t look thrilled with the prospect of having to be a landlord until prices picked up and she could sell the place.”

What goes up… at VREAA 4 Feb 2013 7:26pm

Imagine how sellers-in-the-wings, waiting to relist when the market ‘strengthens’, will react when it becomes apparent to them that the downturn will be substantial, and deep. Falling prices will beget falling prices. This is one of the many reasons we can’t see the decline being all over at 25%-off.
– vreaa

57 responses to ““They say the market will likely be down all year, so it looks like I will have to keep it at least till the end of the year.”

  1. pricedoutfornow

    Yeah, I’ve run into a lot of these landlords lately. We went to see a townhouse for rent, the landlord had it on the market for sale, but was completely disgusted that the offers all came in under $400k “This is VANCOUVER, it CAN’T be worth under $400k!” (it wasn’t THAT great, believe me, a 1250 sq foot 1980 townhouse in a complex clearly designed for moderate-income families, nothing fancy). Anyway, it was about January 12th, she was looking for someone to move in on the 15th (LMAO!), last I checked on craigslist and MLS, it’s still for rent (and sale). She hasn’t lowered the rent (or the sale price), unlike other rentals that appear over and over again on craigslist lately. She’s asking both too much rent and too much for sale, think she’ll be stuck with it for awhile. I think this is the position of many homeowners/landlords in Vancouver-but eventually something has to give-there’s only so long people can go on paying that mortgage without any tenants or any sale. I think this happened in the US too for awhile, it was a standoff between sellers and buyers. We know how that ended. That’s what I predict for Vancouver as well.

    • Can’t you just picture those greedy pukes crying in their pillows.
      F——–ck!! This can’t be happening to me!!!
      (They were all so sure the party would never end).

      And then POOF!………………..it was over.

      “But I got to sell” they cry!
      “And I got to get rent it until I sell too”.
      They cry even harder.
      Nobody is listening.

      The world is so unfair!!!
      Pillow pounding ensues…(but it is not sex).

      Hey, maybe some of you renters will stump up some change and help out these poor saps. Or you could just do like they did in the US……give your notice whenever a cheaper place comes on the market…then pack up and move.

      Cue the tears.

      • True. Trouble is, just like the US, the prudent will soon be asked to help bail these folks out… directly, indirectly, or, most likely, both.

      • Sadly you are right. That is how it works.

      • Not only will the prudent be “asked to help bail these folks out” (more like forced to bear the full cost, since the imprudent can’t bail themselves out), they will also be blamed for causing the collapse and for taking advantage of the “misfortune” of overextended hoemoaners.

    • The Poster Formerly Known As Anonymous

      There is no standoff. A standoff implies there are buyers enough for all the properties, just waiting en masse until the sellers capitulate. When have you known the average buyer to discipline themselves when hit with house lust? The simple fact is that there are not enough buyers with enough money to allow all the sellers to sell at the price they want.

      • Agree but with the clarification – there are not enough buyers with enough money to allow all the sellers to sell at any reasonable price. The majority of the sellers will have to keep lowering the price until it meets the buying ability i.e. the price point when the majority of the perspective buyers can get a mortgage approval. This medium price point at which the market is going to move again can be calculated based on a medium wage/mortgage requirements (5% down, 25 years). According to this article the medium annual household income for couples aged 25-34 is $68,000 a year. They can only be qualified for a mortgage of about 250K in case they have a money for a down payment and have no other debt – which is not the case at all as the household debt is at its historical high and keeps climbing up.
        There was some related article on that here:
        http://www.cbc.ca/news/canada/british-columbia/story/2012/03/13/bc-vancouver-families-priced-out.html

      • The Poster Formerly Known As Anonymous

        Yes, 250k seems like a very sane mortgage amount. Holy cow I had no idea that the median income was so low. How anyone ever bought anything in the past 5 years here is a mystery to me.

      • Real Estate Tsunami

        Poster who formerly was a prince.
        No mystery. Just facts: HAM.

      • Naked Official #9000

        Disharmonious racist!

      • The Poster Formerly Known As Anonymous

        … and there it is.

  2. The market being down is one issue. The other issue is a brand new condo means she paid the applicable taxes, closing fees, land transfer. Based on the condo market in Vancouver basically being stagnant for a few years I doubt that she will sell for the list price let alone the added costs that come with a brand new condo.

  3. It feels like we are entering the five stages of grief. Starting with denial. It will soon turn to anger and then bargaining, unfortunately not the kind that results in a sale. It will be more like praying and promising the real estate gods never to get into speculation again. When that doesn’t work (because there are no real estate gods) a depression will set in followed by acceptance that they are never going to get anything near their purchase price and that real estate is worth what someone is willing to pay. And nobody is willing to pay what they did.

    http://en.wikipedia.org/wiki/Kübler-Ross_model

  4. what, you didn’t twist the knife by wanting a multi-year lease with compensation for open houses?? That could make the sale harder if/when the market do bounce back after an initial decline, potentially making her miss the last chance to get out without totally going into negative territory and upcoming strata fee increase and special assessments and potentially be totally wiped out.

  5. Real Estate Tsunami

    My doctor has a condo which he’s been trying to sell for a while.
    Had 3 tenants during the last year, now the condo is empty.
    He’s not sure what to do now. He looks worried.
    I wonder how many doctors are out there like him, worrying about their shrinking RE investments and not being able to focus on their patient’s needs.
    Quite frankly, it scares me.

  6. The Poster Formerly Known As Anonymous

    “Looks like the market will be down all year… ”

    Yes. And then it zooms right back up like a hockey stick??

  7. The Poster Formerly Known As Anonymous

    I know a family trying to sell in Richmond. They are very indignantly complaining that they can’t get what their house is “worth”.

    New realities take a while to sink in.

  8. Greetings from far away.

    Sounds like we will have many more Vancouverites eventually wanting to Gulag their landlords to the ALR (Amateur Landlord Reserve). I imagine, that many more older Vancouver houses bought for land value will be listed for rent in the coming tumult, as speculators wait to try to find a good time to offload them.

    In the meantime, if any readers do mourn some of what’s happened with many of those older Vancouver houses that have been torn down, please go to the new Facebook site Vancouver Vanishes. It’s a catalogue of photos of houses that have gone down recently, along with the names of original owners — a bit of Vancouver history.

  9. So fun to talk to landlords like these..

  10. “They say the market will likely be down all year, so I it looks like I will have to keep it at least till the end of the year”

    My brain is full of f*ck

  11. pfffft! … if you laugh, you fail … (nsfw) http://tinyurl.com/ykmov27

    • Naked Official #9000

      I am confused? Is this a joke? Every product made in the glorious PRC is perfectly built and purposeful – this is the fault of those dastardly Japanese and their engineers!

  12. As a renter, always ask for a fixed term lease with converts to a month-to-month afterwards. If there is even a hint that the landlord is looking to sell later on, best advised to move on to the next property. Moving costs money and time and is a real hassle.

    • Falling market may actually provide a better stability for a renter as the seller that is reluctant to sell at today’s price will be even more reluctant to sell at the Spring’s price (today-1%) and try to wait it out till the Fall just to discover that it is “today-2%” and so on. Many of them will wait for years if they are able to, unable to decide when the wait is over and reluctant to sell at a loss.

    • kansai:
      I’m the opposite. As long as you don’t have a lot of stuff (or kids re: switching schools), I say “bring it on!”. If you, Mr. Landlord, sell the place and kick me out, I will gladly take a couple month’s rent as compensation. (I can always find another place to rent).

  13. What I’m trying to figure out is who are these people who are actually buying at the present moment when the market is in obvious decline.

    Isn’t it better to continue to sit on the sidelines until things obviously bottom out (or at least drop further)?

    Or are they drinking the realtor this-is-the-best-opportunity-that-you’ll-see-in-your-lifetime-get-on-the-property-ladder-now Kool-Aid?

    • Naked Official #9000

      My fav part

      “Households are decluttered, with “old and useless garbage” such as clothing and unused times, donated to charities. This symbolizes the elimination of unhappiness and dirt, while doing a good service to the local community.”

      My sons Maserati is getting a little old, it is a 2009, after all.

  14. Just look at the stats, EG. We know how most people get their news and how much time they spend watching it. Thing is that the majority do not come to blogs like this or even bother reading news for that matter.

    They are wholly ignorant of what is going on.

    • The Poster Formerly Known As Anonymous

      Which is why there is no standoff. I hate that meme; the only standoffish buyers are the couple of hundred bears that remain. (I know there are only that few because every bear upvotes PaulBs stats on VCI. Something for the bulls to think about when they expect this “money on the sidelines” to come flooding in at the drop of an 8 from the list price.)

      • Naked Official #8888

        I believe you mean, “the insertion of an 8” in the price.

      • The Poster Formerly Known As Anonymous

        Stronger juju is now required to attract Naked Officials #(9+n)000 to deposit their wives and children here. Eight eights may do the trick. Dropping the eight is for local sideline money as second best choice.

  15. I hope this is true and I hope the market tanks, but I’m observing in and around Edgemont village in North Van lots of activity and ‘Sold’ signs. Maybe this massively overpriced area will be one of the last to fall.

    • Real Estate Tsunami

      Bookie,
      Remember it’s all about Location, Location, Location!
      Some buyers just like the thrill of living on the “Edge”mont below the Cleveland dam.

  16. http://www.castanet.net/news/South-Okanagan/87012/Roof-comes-off-housing-market

    “The number of home sales in the South Okanagan have decreased 38 per cent from this time last year…”

    “Total sales volume for the board decreased to $14,663,499 in January 2013. That’s less than half of last years total of $30,812,310 for the month of January.”

    Okanagan sales YoY are down 38 percent in number and down 52% in value. Yikes!

  17. Andrew – South Okanagan:

    Yikes! If I read this correctly MOI is 43.7! (Inventory of 2230, sales of 51 in Jan. 2013) Impressive.

  18. The Poster Formerly Known As Anonymous

    67 sales today. I wonder what “Monkey Chokehold” is up to these days… still shuttling HAM around listings?

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