Realtor Tries To Sell Own Home But Can’t – “Buyers are very skeptical, very hesitant because they think prices may go down.”

Hoda Seraji is experiencing Vancouver’s housing slowdown firsthand. A real estate agent, she took her own family’s two- story house in Canada’s third-largest city off the market after failing to get a single bite for the C$2.39 million home overlooking the Pacific. Cutting the price for the five-bedroom, four-bathroom residence didn’t help.
“Buyers are very skeptical, very hesitant because they think prices may go down,” she says.
Seraji blames fading interest from foreign investors, especially in China. Changes to Canada’s mortgage rules designed to cool the market have accelerated the sales drop, she says.

– from ‘Canada Losing Debt Halo as Bull Market Housing Peaks With Carney’, Bloomberg, 26 Feb 2013 [hat-tip Nemesis]

Agreed, “buyers are hesitant because they anticipate prices are going to drop”.
The problem is not with the buyers, but with prices that are still very, very overinflated.
What was that “C$2.39 million home” selling for just ten years ago? Less than $500K, most likely.
Because of the very large speculative component to price in Vancouver, price drops will not draw in demand, but rather beget further drops.
– vreaa

20 responses to “Realtor Tries To Sell Own Home But Can’t – “Buyers are very skeptical, very hesitant because they think prices may go down.”

  1. So who can really afford a 2.4 million dollar home?
    I am a doctor, make in the top 1% of income, and I won’t be able to afford such a home. Yes people can move up, etc. but how can people move up when there are no buyers for their condos? Chinese are no longer investing here because they see real estate as the sham that it is, that it doesn’t generate real wealth, that it generates no ideas. Of course it will go down. Pathetic

    • Agreed. People have completely lost sight of what the numbers really mean. How long would it take a Canadian to save $0.4 million, let alone $2.4 million?
      The entire bubble has been based on people overextending to come up with monthly payments at emergency low interest rates (their definition of ‘affordable’) in the certainty that the headline price of the property would rise and they’d be able to sell for more than they paid; the very essence of a speculative mania.

      • Even in the mid Eighties just about everyone I knew was chasing the market up. A normal working person could not save enough then to be equal with the amount a house appreciated in a single year.

        In other words, homes rose faster than savings. In some years home prices rose more than a working persons GROSS income. It looked hopeless to many people. Either dive in and damn the torpedoes or be priced out for life.

        Friends of mine were guardedly jealous of one lady friend who had bought a group of three homes on Commercial drive for rentals. She picked them up somewhere around 1979 on payments. In other words, she could use rental proceeds to cover the mortgage cost to the Italian owner. When she bought most people laughed out loud at her stupidity. Even then the area seemed headed downhill and it looked like an unworthy investment.

        Of course, she is a multimillionaire today. God loves her.

    • Developers developers developers developers developers…

  2. Someone posted this at vancouvercondo.info:

    http://www.ecorealtyinc.ca/listing?id=260085873

    50% below assessed (1.88m). A mistake? Or a thinly veiled attempt to start a bidding war so realtors can claim that this sold for x00K over assessed?

  3. If no one will pay $2.4 million for your house, it isn’t a $2.4 million house.

  4. Hmmm…I see that being “close to RICHMOND” (all in caps) is a selling feature. I wonder what ethnic group they’re trying to target?

    • Real Estate Tsunami

      Naah, they probably just meant close to YVR 🙂

      • Then the homes under the flying path in Cambie and Bridgeport area of Richmond or in Burkeville would represent the top value – they are located extra close to YVR:(

    • They have the list price all wrong. $2.4 MM sounds like “easy die” in chinese. What they have to do is to list it at $2.8 MM (easy rich).. Even better price is to list at $2,888,888.. I personally think it may only worth about $888,888.

  5. Also from that article re: Toronto: “Proposals for new condos reached 253,768 units at the end of the fourth quarter, up 10 percent from a year earlier”

    That’s enough new condo units to house nearly 10% of the city’s population, proposed in just one year, and the previous year was actually higher. We talk about the buyer/speculator mindset here a lot, but it baffles me a bit that so many professional development companies, with their own money on the line can’t see the absolute insanity of pushing forward with projects in this environment. You have to be an at least somewhat big and sophisticated company to build a condo tower.

    Maybe it’s just cynical. They create a new LLC for each project and if the last ones fail, they just go to the bank. Still the partners have to lose some money. Just a bit mystifying to me.

    Anyone who has wanted a condo in Toronto start setting money aside now. They’ll be practically giving them away in two or three years. It will be like Miami.

    • They already bought the land and did the design, that’s sunk cost and the partners loss if the building don’t get build and sold. They don’t start the actual build until a certain % are pre-sold and then it’s the buyers who take all the financial risk, not them. For them, it’s almost all a matter of how much profit at that stage.

      • Ralph Cramdown

        True to a point. But buyers typically only put 10 or 15% down. If the buyer is a guy with assets from Scarborough, the builder can sue if he doesn’t close. But if his last known address is a P.O. box in Guangzhou…
        I think I heard a rumour somewhere that banks were starting to examine the quality and citizenship of presale buyers before advancing money to dig the hole, and also that some projects closing now are experiencing 10% walkaway rates.

    • And you know, we all want to live in Miami.

  6. uhm…does CMHC policy change to stop insuring million dollar housing have that much of an impact on the $2.4M market? The only drag I can see if it prevented people from buying the $1.1M house with 15% which in turn prevents the $1.1M owner from moving to $1.5M, and so on?? Even then a $900K mortgage is going to cost like $5K/month. That’s going to pretty much limit buyers to professional couples each making at least $80K+/yr with no young kids and associated expenses.

    Also, can you really blame Chinese buyers for not coming over and buying your place? Really, it’s their fault that you can’t sell your house?? Their refusal to come over and buy your house is the cause of your problems?? If a lot of people think like this, we have some major issues in our society. Also I bet she would be one of those people also protesting against slave labors in China, corruption, lack of democracy, etc, etc. But here’s $2.5M blood $$ for your house, that’s ok. Sheesh….I hate these hypocrits even more than the buyer.

  7. For the cartographically disinclined, allow me to use this space to correct two oft-repeated false claims about Vancouver’s geography: 1) that body of water you see looking west from downtown, or (more importantly!) Richmond is not the Pacific Ocean, and 2) those mountains you see looking north and north-east are not part of the Rocky Mountains.

    That is all.

    • Good catch. But who cares about geography or ethics when the home would not sell? This Realtor might be paying the mortgage on that home and with the market down and no commission from sales – there is no money for the mortgage, so the situation might be as desperate as in any other overextended household playing with the RE market and loosing as it sinks.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s