“My husband and kids are pretty happy in our rental house within cycling distance of work that we could never have afforded otherwise. We’re doin’ pretty dang well, thank you, for median income earners in this expensive city.”

“My husband and kids are pretty happy in our rental house within cycling distance of work that we could never have afforded otherwise. My husband is especially happy with the nest egg we’ve put away, and some day, my kids will be happy with their RESPs. We’re doin’ pretty dang well, thank you, for median income earners in this expensive city.
I have been priced out forever, according to any sane financial management strategy, for pretty much the whole time I’ve had a down payment. When the choice became “house poverty for family of four in a purchased 2 bedroom in Port Moody” vs. “responsible savings and a family of four in rental house with yard in Vancouver”, I thought something smelled funny in real estate. Still stinks, and will continue to stink, until prices adjust.”
– Absinthe at VCI May 24th, 2013 at 9:06 am

“I Wish Them Bad Luck.” – Jim Flaherty, on those who wish to profit from Canadian RE price drops

“I wish them bad luck.”
– Canadian Finance Minister Jim Flaherty, commenting on recent moves by some U.S.-based hedge funds and other big investors, who worry that the Canadian housing market is heading for a hard landing, and are looking to short, or bet against, Canadian investments.
[as quoted by the Wall Street Journal, 28 May 2013]

Other excerpts from the same article:
“Last year, Mr. Flaherty had voiced concern about the condo markets in Toronto and Vancouver.
“When I look at the housing market, I’m looking for the ‘doom and gloom’. I don’t see the ‘doom and gloom’. I see some moderation in demand. This is a good thing,” he said.
—

Flaherty’s wish for bad ‘luck’ for the ‘shorts’ is the equivalent of a hope for good ‘luck’ for the (immensely greater) ‘long’ position; a long position that he has, after all, attempted to shore up for many years. Flaherty cannot calculate the damage that the housing bubble has done, nor that which its resolution will end up doing. It’s natural for him to be simply trying to keep it going at this point.
Regarding those betting against price increases:
Any healthy market has to be able to tolerate the possibility of people speculating against price increases.
There are strong arguments that the ability for individuals to short a market improve that market’s strength. Shorts improve liquidity, make for more valid ‘price discovery’, and are around to buy when nobody else wants to (near bottoms).
There are no ways to directly short the Vancouver RE market (it would likely have benefited if that had been possible!).
Some are attempting to indirectly short, and hope to profit from price drops via their likely effects on the values of the shares of certain stocks or other instruments. For the record, vreaa is not trying to do anything like that. We’d simply like to see sane valuation of Vancouver housing.
– vreaa

“We asked why he doesn’t just rent the whole house. He said he can’t, it wouldn’t cover his mortgage – he’ll get more to rent it out as two suites. These new landlords are hilarious, thinking that rent will cover their mortgage!”

“Called a guy today about a house he has for rent. Turns out he’s only renting the upper half (for more than what the market will pay, I think, considering I’ve seen it advertised for awhile). Since we really don’t want to rent half a house and live in fear about who lives in the basement (and share laundry), we asked why he doesn’t just rent the whole house. He said he can’t, it wouldn’t cover his mortgage – he’ll get more to rent it out as two suites. These new landlords are hilarious, thinking that rent will cover their mortgage!
By running the numbers, it looks to me like he put $400k down (he told us how much his mortgage payment is). I also think it’s a failed flip – I’ve been watching it awhile and when I googled the address two weeks ago, it was for sale and there was an open house that weekend, though another google search tells me the Vancouver sun featured it in their real estate section as being bought in December 2012. This guy must be panicking….
I think our time has come, bears! Anyway, it’s a nice house, maybe we’ll be able to buy it for $400k one day (lol).”
– pricedoutfornow at VCI 26th May 2013 12:50pm

“My neighbours, in their late 60s, just put their house on the market. They had said they would die in that house, but now they are worried that with the housing market going south they may be losing a lot of equity and they better sell now before it gets worse.”

“I can’t believe it!
My neighbor and his wife, who are in their late 60s, just put their house on the market.
I talked to them often before, and they said they would die in that house and leave it to their only son.
But now they say they are worried that with the housing market going south they may be losing a lot of equity and they better sell now before it gets worse.
To make matters worse, 1 year ago they took out a HELOC for $30k to help their son buy a condo.
Two week’s ago their son received a note from his strata that a special levy of $40k to cover inefficiences in the building envelope has to be paid.
Another leaky condo!
Needless to say, the old couple has no other assets than their rapidly depreciating house, so they are panicking.”
– Real Estate Tsunami at VREAA 23 May 2013 10:53pm

Hello again to all readers.
Posts recommence with this powerful anecdote from RETsunami.
We will aim to pop up anecdotes here on an occasional and irregular basis; we trust they will be appreciated nonetheless.
Keep well.
– vreaa