“He had friends who wanted to sell, but who ‘couldn’t afford to sell’. They had withdrawn their properties from the market.”

“I was talking to a young professional who rents in Vancouver. He said he had friends who had purchased in the last few years and, given the soft market, he expressed genuine concern – fear even – for their financial well-being. More interesting, he talked of people he knew who owned RE in Vancouver, who wanted to sell, but who he said “couldn’t afford to sell”. Consequently, they had withdrawn their properties from the market. He seemed to think this made sense, and he didn’t see how the market could possibly drop by enough to put them at risk, or to force them to sell.”
– from ‘westsidefrank’, by e-mail to VREAA, 25 Feb 2013

See: The Myth of the Discretionary Sellersidebar.
– vreaa

61 responses to ““He had friends who wanted to sell, but who ‘couldn’t afford to sell’. They had withdrawn their properties from the market.”

  1. As the market drops, more people go from thinking they can’t afford to sell to… actually not being able to afford to sell.

    • So true, Ralph. Just a few percentage points in many cases is enough. And then *poof* they are underwater and living in regret.

  2. The Chinese have also stopped coming. If you read the forums at Vansky ( in Chinese), mainlanders are saying how no one came to buy for New Years and beyond, so expect luxury properties to stagnate or drop heavily, and condos to just sit there as regular Canadians can’t get credit.

    • Your diagnosis would appear to be valid, Dr. B…

      [G&M] – Luxury home sales in Vancouver area slow

      …”All told, there were 439 transactions for houses that fetched $3-million or more in 2012, down from 691 deals in 2011, according to Macdonald Realty’s analysis.

      Vancouver’s west side remained the focal point for luxury buyers, though sales in West Vancouver, South Surrey and White Rock also contributed to the latest totals. Most of the premium deals were for single-family detached homes. Forty-four of the high-end sales last year were condos or townhouses.

      …Mr. Scarrow estimated that selling prices for Metro Vancouver’s luxury residences have declined 10 per cent on average since peaking last spring – a harder fall than what the broader local market experienced.

      …There were 107 houses that sold for $5-million or higher last year in the Vancouver region, or a 25-per-cent drop from 142 sales in 2011.”…

      http://tinyurl.com/d7uptlu

      [NoteToEd: NoWorries, though! ‘Cuz, as MacDonald Realty Group VP Dan Scarrow adamantly asserts, “We’ve moved back into a normal market.” TeeHee!]

    • What bugs me is how so many properties West of Main have become “luxury properties”! Mayor & council presided over the wholesale destruction of modest affordable houses in favour of these gawdawful monstrosities no permanent resident will actually want or be able to live in full time.

      • West Coast Woman

        You’re absolutely right! There has been a wholesale destruction of good quality affordable housing thanks to the policies put in place by this Vision City Council (EcoDensity, “Green Capital”). The new homes are destroying both the environment and neighbourhoods. In my neighbourhood, houses sold for $500,000 to $600,000 in 2002; now monstrosities like this one, just listed, have replaced them:

        http://www.realtor.ca/propertyDetails.aspx?propertyId=12859249&PidKey=434422067 (MLS #V1991989)

        Note: The listing says the property is 80′ x 120′ – and this is completely untrue. The lot is an irregular shape, narrowing at the back, on a corner lot, and the realtor has apparently measured the frontage INCLUDING the City median. (Puffery or fraud anyone?)

        There are at least 4 of these for sale in the immediate area, and another 5 being built. Plus at least 4 of those that have been previously purchased by Chinese “immigrants” are now abandoned and empty.

        These oversized, overpriced “luxury” houses – a direct result of the City’s EcoDensity policy – have driven up property values and taxes in the area, which has forced many older, long time residents out. These new houses, built solely to suit the wealthy Asian market, are expensive to both buy and maintain – which prevents most Vancouver based families from living here. Thus a once thriving Vancouver family neighbourhood is destroyed, with little hope of new Vancouver based families being part of any renewal.

      • Oh please get off it. Builder build these houses because there is demand for them. If there isn’t then they will build something else like say townhouse complexes, etc, and then you will still be saying that affordable homes are getting destroyed by some other monstrosities.

        I bet if go to to downtown and interview 100 people where the family income is over $100K, a vast majority of them will aspire to live in those monstrosities you so despise.

      • Real Estate Tsunami

        @west coast, agree.
        But who can resist “Feng Shui blessed landscaping”!

      • West Coast Woman

        @space899:

        You’re dead wrong. There are already over 300 townhouses in this area and the City was told by residents that we’d much rather have more townhouses, and duplexes and triplexes on these large lots than these huge albatrosses. So don’t make assumptions about other peoples’ attitudes without knowing ALL the facts.

        “Builders build these houses because there is demand for them.” No, builders built these houses because they thought the Asian gravy train was going to continue, and they would make a huge profit on each one they built, provided they could find some sucker to buy them.

        Furthermore, if you did approach anyone to ask if they’d like to buy a house like this, they’d have to make $1M a year to afford it. There aren’t that many people in Vancouver making that kind of money – and those that do, would much rather live in Shaughnessy than on top of a swamp in Asthma Flats!

      • @West Coast Woman – What City council has to do with the builders electing to build the single family MacMansion type of homes on the single family lots they bought? What City could do to prevent it in your opinion?

      • West Coast Woman

        City Council increased the size of houses allowed on single family lots when they implemented EcoDensity, as well as allowing for laneway houses. Although warned, they did not consider how this would accelerate the demolition of older, more affordable homes. They could have instead required these larger structures to be duplexes or triplexes – in other words, if you rebuild in a single family area you must build a triplex or duplex where all housing units are suitable for families.

      • Naked Official #9000

        @west coast woman:

        you are a disloyal cadre and no doubt a terminal racist!

        the housing stock in this concessionary zone was deemed unfit for loyal cadres and party apparatchiks – the roof lines were all wrong – the kitchens had actually been… used.

        @space – wu mao has been deposited, loyal cadre – continue to fight the good fight against the imperialist running dogs! vengeance for national humiliation!

      • @space 889 (love the 8’s BTW): knock off the apologism. So greedy builders are selling out our neighbourhoods to appeal to gauche astronauts. Doesn’t make it right or good for neighbourhoods. Take a look at the “green space” around some of Richmond’s new McMansions. The weight of all that architectural dross will make that island sink even faster.
        @olga 62-cities control zoning, what’s allowed to be built. That’s all the power they need to stop this.

    • I was reading the obituary for one of my esteemed colleagues who passed away suddenly while overseas. It said that he grew up in the “working class neighbourhood of Oakridge”. Maybe in the 60s, but Oakridge is hardly working class today. Sad.

  3. Prices are almost at all-time highs, imagine if they drop another 20%. I hope you’re prepared for the anecdotal onslaught, vreaa

    • We’ll try our best.

    • Looking forward to it. It’s going to be lots of fun.

    • UBCghettodweller

      I’ve noticed a few Vancouverites talk about how housing prices are sliding, but then all seem to approach it as if things will be “back to normal” within a few months. When I’ve mentioned that we might see 5-20% (inflation adjusted for) drops year over year for a number of years, based on what has happened in other markets, they look at me weird.

      • The “it’s all going to be OK in a little while… business as usual will return” mentality is exactly what we saw in the Excited States when we were living there.

        The way this is unrolling is so eerily similar in so many ways.

      • I lived through this same thing with declines in the US. It completion of about 2 years of notable price slide before it started to resonate with the population. Wait until the third year of declines before it’s widely accepted as a permanent change.

      • Never forget the wonderful line from the dirty thirties. ” Prosperity is just around the corner” . And it was – for 10 years.

      • nem, wouldn’t, couldn’t, shouldn’t afford to sell … http://tinyurl.com/b5yyquh … pffft!

    • Real Estate Tsunami

      Won’t be anecdotal anymore.
      Just the hard, cold truth.

  4. “Mark Carney Probably Can’t Leave Fast Enough …”
    http://www.acting-man.com/?p=21927

  5. 4SlicesofCheese

    My coworkers sister is a mobile mortgage specialist, and she says it is slow. Her neighbor who lives in an exact same suite as her just sold their place and cleared 200k profit (prob shady math but still alot of money) and is now renting back in the same building.

  6. This article really hits at the mark. For all those who say that there won’t be many foreclosures in Canada due to recourse. Watch what happens when people who “can’t afford to sell” – code really for underwater in most cases – has a financial disruption such as job loss or other event. It’ll be an edge case that drives the market. There is a lot of employment related to RE currently in Van and as the market slows and this reverts to a sustainable value those incomes will forcefully fall away – the debt however will not. For those that can’t replace it quickly enough drastic options will ensue.

    • Even for those who don’t have a job disruption. Just as in the U.S., rather ordinary people will think hard about continuing to make 30 years of payments on a “million dollar house” that is actually a $400,000 house. Even if they can technically afford to.

    • What some people say is that there won’t be many walkaways in Canada due to recourse. It’s the difference between can’t pay and can pay but won’t. And I suspect that, for many people, it’ll come down to what other assets they have outside of RRSPs and pension plans. If they don’t have much, BK might be a palatable option. If they do, they’ll likely keep paying.

      • Real Estate Tsunami

        If we had a wave of walkaways, the courts and the banks will probably just throw up their hands as they did in the early 80s.

      • When the walkaways become a constituency, politics causes the unexpected.

      • Because of Vancouver’s astronomical house prices, most people’s other assets will be dwarfed by a loss in their house’s value.
        Stats Canada says that the average Canadian now has the highest non-mortgage debt in history. ( I believe BC’ers average debts are even higher.)
        As prices lower, we may see the number of listings go down substantially, as more and more people simply cannot afford to sell. But the percentage of reposession listings will skyrocket, and realtors boasts of “sold for asking price” will be rare.

        Volunteer walkaways will be common. If your house is worth $300k-$400k less than your outstanding mortgage, you’re staring at 20 years of mortgage payments and you have a further $50k in credit card debt…..

  7. is the RE Bag Holder fear, this time, any more or less than STD fear from early 1980’s?

  8. [#YouCan’tMakeUpThisStuff]

    Well… apropos of nothing… other than a turbid QuantumFlow of substantive economic news, two astonishingly good ZenFeatures did present themselves…

    For your ThursdayMorning entertainment, DearReaders…

    [UK Guardian] – Brains of rats connected allowing them to share information via internet: Rats thousands of miles apart collaborate on simple tasks via the internet using ‘brain-to-brain interfaces’

    ..”The rats were trained to press a lever when a light went on above it. When they performed the task correctly, they got a drink of water. To test the animals’ ability to share brain information, they put the rats in two separate compartments. Only one compartment had a light that came on above the lever. When the rat pressed the lever, an electronic version of its brain activity was sent directly to the other rat’s brain. In trials, the second rat responded correctly to the imported brain signals 70% of the time by pressing the lever.”…

    http://tinyurl.com/c74rmd6

    And, NextUp… Lebanon Crowns 2013 “BigArabianBeauty” [Warning: This is not an exercise in Equitation]…

    http://tinyurl.com/d4my4wf

    [NoteToEd: TskTsk… Dr. Nicolelis could have saved himself a lot of time, trouble and rats – if only he’d been aware of CREA’s previously published, ground-breaking work on MLS/MLX™.]

    • Real Estate Tsunami

      It’s probably just coincidence, but Realtors have been compared to vermin by some posters to this blog. 🙂

      • Funny you should say that, Tsunami…

        I was so intrigued by Dr. Nicolelis’ findings that I telephoned his lab earlier today and spoke with his lead ResearchChimp PostDoc who personally assured me that, given just an hour a day for 45 consecutive days, even a “slow” rodent could master the intricacies of the InterWeb HiveMind…

        And then, by an astonishing coincidence… A cheeky GoogleAd server on a popular if iconoclastic financial site offered this enticement:

        “Our students are guaranteed to pass after completing our 6 week FASTRACK tutorial program. No other [BC] real estate course is better geared to get you ready to pass the exam.”

        http://www.realtycourse.ca/

        [NoteToEd: Be sure to check out the impressive Who’sWho of branded endorsements!]

  9. Why is vci always down?

    • ….think the RE industry is paying hackers to silence those whose may pose a threat. VREAA and Whisper may be next.

    • Desperate times warrant desperate measures… it’s tough for the RE folks out there, but not just for them. The entire FIRE industry is, well, on fire!

      The “Not Found” is indeed a new error. I guess whoever is being this is getting more sophisticated. But as always on the net, the truth will get back online, soon enough.

  10. I’ve never seen it as “not found” usually its another error

  11. Yes, it seems that VCI is actually down at the moment. Usually it’s just an offline server or config issue as Pope is working on the site I think. I notice it was recently moved to a new hosting service so perhaps the downtime is related to that, versus hacking.

  12. I think that VCI was hacked. Hopefully, Admin has a backup.

    • Still 268 tickets left (as of now).

      “These will be some of the questions discussed by our panel, moderated by Tyee editor David Beers:

      Andy Yan, BTA Works
      Tsur Somerville, UBC’s Sauder School of Business
      Sandy Garrosino, Independent City Council Candidate
      Richard Wozny, Principal, Site Economics Ltd.”

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