Renter Buys In West Van – “For a few hundred more per month, you could own the place. Which is what I will be doing as my offer for a place down the street has been accepted. There is some value in staying in one place.”

“I am currently renting in West Van. It has been difficult to find decent, “affordable” rental accommodation on the North Shore. For a few hundred more per month, you could own the place. Which is what I will be doing as my offer for a place down the street has been accepted.
Went for 23% below the list price. Owner been in the place for 11 years, and over that time, the value of the property increased on average 5% a year. I negotiated hard, walked away twice, and eventually the seller caved, just like I knew he would.
I’ve been renting for 5 years now, ever since a health crisis with one of my young children moved me back here. I was the bear amongst all my peers who are all “owning”. I still think there will be a crash in the Lower Mainland – but I think it will be an uneven crash. Certain areas will crash worse than others. I don’t think the entry level house market in West Van will crash. I think it will take a 10-15% drop and then move sideways or at inflation for a generation.
There is some value in staying in one place.”

– chumpy le chump at VREAA, 2 Jun 2013 4:36pm

All the best with your purchase, chumpy.
Does the “few hundred more per month” include all expenses (and assume no downpayment?). Share the math if you care to.
That’s 70% increase over 11 years (5% p.a. compounded)? Is that representative of the price increases on similar properties?
As we’ve said before, we expect all property types to revert to long term means; we don’t expect any to somehow be exempt.
– vreaa

58 responses to “Renter Buys In West Van – “For a few hundred more per month, you could own the place. Which is what I will be doing as my offer for a place down the street has been accepted. There is some value in staying in one place.”

  1. kagurazakaman

    this charming SFH (below) in west van has been on the market for more than a year at $999,000 and they finally brought it down $100k a few months back. still no buyers even though it has “picturesque rock outcroppings”. list price means nothing when everyone is suffering from mob mentality.

    • E-valueBC says it’s assessed at 1,076K.

    • The house is nice on the pictures, but (in reality) it’s built very awkwardly against the hill and looks like a shed belonging to the property behind it.

      • kagurazakaman

        I agree. Compared to anything in the US in similar neighbourhoods, I would say it is worth about $5-600K. Apparently nobody even lives there.

    • Built in 1950 so maintenance costs should be minimal.

  2. Went for 23% below the list price.

    Nicely done.
    chumpy le chump seems to be one of those who think that all that matters is the monthly payment.

  3. Good for Chumpy! …albeit, WestVan is so ‘yesterday’ when all it takes to resurrect SleepLessInSeattle as “FindingMr.Right” is some BeijingStyle ‘SpicySaucy’ and a dash or two of FengShui… or so we are told by the SeattleTimes’ business journalist Sanjay Ghast….

    DearReaders…. Your Wednesday morning Zen & Quote ‘O TheDay…

    “This is pretty much identical to what happened to Vancouver (British Columbia) in 1997… Vancouver became a haven for people moving money out of Hong Kong.” – Mark Wen, President Washington State-China Chamber of Commerce

    [SeattleTimes] – China’s wealthy paying cash for Eastside luxury homes

    … Eastside real-estate brokers say they’ve noticed a wave of affluent mainland-Chinese buyers for luxury homes in Medina, Clyde Hill and other millionaire rows in West Bellevue. Data and public records show they’re right. It’s part of a cash-buyer phenomenon sweeping the home market.

    Real-estate agent Joseph Ho climbed the gilded staircase of a Hunts Point mansion listed for almost $5 million, shooting video on his iPad and narrating in Chinese.

    Buyers from China have inquired about the 5,540-square-foot house. Ho made sure to capture a blue-sky fresco in the formal dining room — “It’ll remind them of Caesar’s Palace in Las Vegas” — and a yacht-ready dock on Cozy Cove.

    “Water features are important for Chinese feng shui,” Ho said. “When you have 1.4 billion Chinese, many of whom are millionaires, somebody will like it.”

    China’s superrich, who have historically been drawn to San Francisco, Los Angeles and Vancouver, B.C., are investing in Seattle-area real estate in growing numbers, buying multimillion-dollar homes, rent-producing properties and land for commercial development.

    In the process, they are accelerating the real-estate market’s recovery, sometimes edging out other buyers with all-cash offers, and deepening ties between Seattle and China.”….

    [NoteToEd: “Ahem… Cough. Cough.” TeeHee!]

    • [NoteToEd: I don’t care what language they’re filmed in… I simply adore RomComs.]

    • Real Estate Tsunami

      I understand that a yellow helicopter has been spotted over West Bellevue.

      • Just between the two of us, RET… I am reliably informed that there was more than one. WayMore.

        [NoteToEd: I think I’ve just solved Canada’s ongoing/lamentable military helicopter procurement boondoogle. They’re available in yellow, too. Natch.]

    • kagurazakaman

      seattle will welcome the binge and it will suck the gas out of vancouver.

      btw, in case anyone wasnt paying attention, the PRC’s “nouveau riche” stopped being minted about 5 years ago. this is not an ongoing phenomenon anymore, if you dont believe me, go for a vacation to the middle kingdom and ask the locals at the middle end of the pyramid.

      it was announced the surpassing of 1 million millionaires in China only last year. they would ALL have to move to vancouver and buy a house for the market to make sense.

    • Loathe though I am to give voice to this thought… Is there anyone else here who felicitously appreciates the SardonicallyJuicy happenstance of an AmericanRealtor™ named, “Ho”?

      [NoteToSenorCabellero: Its all in GoodFun… and when the DustSettles, you and the other VirtuousFew will finally be free of the Stigma unduly visited upon you by the well documented transgressions of the Charlatans&Dilettantes.]

      • Ralph Cramdown

        Joe Ho and a bottle of rum… It’s the pirate’s life for he! (hee hee)

  4. pricedoutfornow

    I too wonder about the numbers-maybe he had a large downpayment, which made the monthly cost nearly identical to renting? That’s the only way I can see the numbers working….I have been looking for a SFH rental in the COV for the past little while, and the rents are very, very cheap compared with buying (if I only put down about $100k). The mortgage on the properties I look at are always about 2x the monthly cost of rent, unless I happened to have $500k to plunk down on a property.

  5. So far any drop in prices have been highly isolated to the greedy and the speculative from Vancouver real estate market. But, the sales of realistically priced homes in Vancouver are still fairly steady.

    A hasty reversion to the mean is looking doubtful. Although, I also doubt there will be any gain i prices at all. So, does it make better financial sense to rent – probably.

    However, there are other reasons to own rather than rent that can’t be measured monetarily. We don’t know all of Chumpy’s personal rational and financial details. Of his reasoning – “I don’t think the entry level house market in West Van will crash. I think it will take a 10-15% drop and then move sideways or at inflation for a generation. There is some value in staying in one place.”

    This seems reasonable and likely.

    • Nobody recognizes a real estate implosion while it is happening this time is no different.

      The cute little heritage bungalow Im renting in N Van is a perfect example. Owner is smart he priced it 10% below market and 3% below what he paid for it at the bottom if the dip in 2009. However it was a real struggle and he had to shave off more $$ to get it to go. The thing is the strategy was to put it so low to create a bidding war and in the end it barely sold for below asking. The yardstick of what a house is worth is slipping and the expectations of today will seem outlandish in a year or two.

      There is zero doubt the owner took a capital loss and when you include the opportunity. cost on investing the down payment he would have been way better of renting.

      In the end he us a good guy I’m glad he was able to get off the burning ship while he could.

    • Don’t think that some price ranges, like entry level, will suffer much less.
      What if the price of an ‘used-to-be-expensive’ gets equal to entry-level?
      Just imagine what the downward pressure will be from higher levels, when they drop like these: (100% real numbers)
      West Vancouver 179 STONEGATE DR
      04-Jul-12 $987,500.00
      10-Aug-12 $949,999.00 -4%
      09-Oct-12 $949,999.00 -4%
      05-Dec-12 $899,995.00 -9%
      05-May-13 $779,900.00 -22%
      25-May-13 $779,900.00 -22%
      West Vancouver 221 RABBIT LN
      04-Jul-12 $1,589,000.00
      28-Jul-12 $1,488,000.00 -7%
      24-Aug-12 $1,398,800.00 -12%
      04-Dec-12 $1,398,800.00 -12%
      30-Jan-13 $1,388,000.00 -13%
      30-May-13 $1,288,000.00 -19%
      West Vancouver 5637 EAGLE HARBOUR RD
      04-Jul-12 $1,100,000.00
      10-Jul-12 $998,000.00 -10%
      19-Sep-12 $975,000.00 -12%
      13-Mar-13 $945,000.00 -15%
      22-Apr-13 $945,000.00 -15%
      25-May-13 $919,000.00 -17%
      05-Jun-13 $899,000.00 -19%

  6. Real Estate Tsunami

    “realistically priced homes” What is this?

    • “realistically priced homes” What is this?”

      Homes priced near or slightly below their assessment. They are still selling, especially under the $1 million level.

      • Real Estate Tsunami

        Nothing is realistically priced in Vancouver and Richmond.
        It’s all just a mirage.

      • I didn’t say affordable, I said realistic. If you want affordable go to Annapolis Royal Nova Scotia, Tampa Bay Florida, or Managua Nicaragua. Nice single family homes can still be purchased there for under $200,000

      • Jose, amigo, there’s nothing realistic about vancouver real estate.

      • elchavo mi amor,

        Jose is spelled José. The word realistic comes from reality. Unfortunately, that’s the reality of Vancouver Real Estate. Don’t you just hate semantics?

      • Current assessment has nothing to do with reality or even current value. It’s an educated guess based on comparables, a fleeting snapshot that is always changing.

        Extreme example to make the point: A war breaks out tomorrow and Vancouver turns into a battlefield houses assessed for multi millions might be worth 50k a few months kater. A house us only worth what you can get for it.

        What us realistic? I wouldn’t consider paying any more than 40% of current assessment for a typical house in north van, that’s my definition of realistic.

    • Real Estate Tsunami

      Don’t you have to prepare for OPEN HOUSE this weekend?
      Take lot’s of reading material.
      It will be very slow.

  7. Glad to see you’re back! Here’s a sale from South Surrey that will be a huge wakeup call to all of the estate type homes in the area:

    2982 161A ST
    9250 sqft newish home on a 31K sqft lot in Grandview estates

    February 23, 2012 listed at $3.288 million
    May 2, 2012 dropped to $2.999 million
    July 31, 2012 dropped to $2.899 million
    September 1, 2012 dropped to $2.799 million
    October 3, 2012 delisted
    October 25, 2012 listed for $2.799 million
    January 19, 2013 dropped to $2.499 million
    March 12, 2013 dropped to $2.299 million
    May 2, 2013 sold for $1.98 million (sale completed today)

    Assessed at $2.567 million

    Sold for $1.3 million and 40% below initial asking price
    Sold for $590K and over 20% below assessment

  8. I was looking for a rental on the north shore
    2500 would get you a house ambleside area.
    According to the north shore news.
    My co-worker just rented a place on the north shore 1600 whole house.

    • Wow, what kind of house and where?

      • Way to smoke him out RET. =b

      • Mt pleasent

        I saw the west van rental in the north shore news a good place to look.
        I don’t know how my co-worker found his rental. I do know its a whole house no basement suite in north van I don’t know where.

    • Real Estate Tsunami

      Same here.
      I rent a whole house (assessed at 1.1 mill) in Richmond.
      For 1,600.

      • There are a lot of $1 million dumps in Richmond

      • Real Estate Tsunami

        We’ve got a live one, here.

      • Burnabonian

        José, did you always want to be a realtor?

        Was it the glamour that attracted you? The hot and cold running ladies? The leased luxosedans with kilos of…happiness stored in the wheel well?

        Or was it the honest paycheque — $30k gross paid out for putting someone’s house on a proprietary version of Craigslist — all that typing and taking pictures with a smartphone could give a fellow a finger callous! (If he didn’t have an aspiring model/actress as an administrator to do it for him.)

        Perhaps you took up the calling because civilian life was too mundane? And perhaps now you stay for the… nearly effortless weight loss?

  9. Chumpy does not indicate what he’s paying in rent. Is the spread “$1500 rent vs. $2000 mortgage, or is it $10,000 rent vs. $10,500 mortgage”?

    He’ll lose his shirt either way, of course. On paper.

    Someone remind Chumpy that even if he makes every single payment early, he will likely need to re-qualify five years from now — in the deepest depths of the crash.

    So even if he just put a comfortable 25% down on a property that he thinks will do fine (on average) over the next decade, he could find himself (temporarily) with 15% equity 5 years from now.

    And people with 15% equity and million-dollar mortgages are going to be having some un-com-fort-able conversations with their lenders over the remainder of the decade.

  10. Real Estate Tsunami

    Right now renting IS cheaper than buying.
    Get it !!

  11. arrrgh! … renters rent and buyers buy and never the 2 shall meet and that’s the way things should beat (?)! … what)?!( … what happens to a truly conservative mind in the age of fiscal-monetary insanity >> … … pfffft!

    • [NoteToEd: Well… The Sun is OverTheYardArm. On the BrighterSide, try as I might to leverage Titan’s MegaPetaFlopOmniscience and find or synthesize an AccordionCover… my user account ran out of ClockCycles. Sequestration, DamnIt. NeverMind though, as the original MusicVid deservedly continues to occupy a plinth in the Pantheon ‘o DarkParables.]

  12. Vcr Island Freeter and Accordionist

    someone did say Reversion to the Mean… which is quite drastic when you consider the mean is 60% and we’re at 70%. To get to 60% we’re going to overshoot to 50% and stay around this % for many years.

    The Atlantic magazine has a pretty good article on Japan’s “Freeter” generation This is the generation that’s in its late teens/early 20’s now, in Canada…(and USA). This generation will ensure we Overshoot the Mean.. take us to 50% home owning/50% renting..

    • NiceOne!

      Splendid InterWebsHandle, too… albeit, if I may be so bold – you might consider changing it to FIFA [FantasyIsland FreeterAccordionist]…

      Just imagine all the untold multitudes of GooglingFootie [Soccer] Enthusiasts you will Confound&Upset as their browsers deliver them unto VREAA vs. TheWorldCup.

      Just a thought, mind you.

      PS – We write for you.

  13. “chumpy” is the nickname of Gregor Robertson’s look-alike.

  14. I call BS. Would to see the poster’s calculations on rent vs own.
    “a few hundred bucks more per month”… sure sure.

  15. i pay 1450 rent in new west. great location, whole house with detached garage wonderful back yard garden. oh, i also sublet the studio suite downstairs for 470. i bbq and have a cold one in the yard, my tenants job is to cut the grass and do all yard work, taking out the garbage is also required.
    he pays 980 rent.
    have money for a very healthy down payment but i would have to be a fool leave such an ideal situation.

  16. Good for you for negotiating, but you’re still going to lose 30% over the next 2 years or so.

  17. chumpy le chump

    I put down a large down payment. I was paying $3200 a month in rent (not outrageous for the north shore- go see what you can get for that amount. It ain’t luxury. )

    I have locked in for 10 years, so i don’t need to have an uncomfortable conversation in 5 years. Rates will deffo be higher in 10 years but i have a plan to prepare for it.

    I have 2 children with special needs (complex neurological disorders). The North Van School District (and most other SDs) put their own needs ahead of my children’s needs. The only district that works for me is SD45, which is why i want to live in West Van. The schools actually live up to their legal obligations and don’t require me to threaten them with legal action every time i remind of this! what a concept! In most other districts, the union will decide who helps your child, and these people, however well-intentioned, may not be the right fit for the job.

    when you are dealing with the disorders i have had to endure, your perspective changes. You do what is best for your children however painful that may be, and even though it may be at odds to what you believe fiscally. I quit a $300K/year job andI moved halfway across the world to get my kids the help they needed. I have dropped over $100,000 in therapy fees, assessments, diagnoses, you name it. if paying more to own than rent helps them, so what?

    i fully realize this house may not appreciate in value, but guess what- I don’t care.

    There’s more to life than rent vs buy. if one improves your quality of life, go for it. Those with kids will have a certain perspective on this. Those with special needs kids will have an even more unique perspective.

  18. “There’s more to life than rent vs buy”

    This is known in economic circles as a “consumer surplus”. Nobody here denies its existence but we do tend call out the cases when overpaying is confused with sound financial acumen. This is nothing personal.

    PS I overpay for stuff too.

    • As it happens…. the Kuwaitis, Qataris, Emirates and Saudis have, on ‘occasion’, been known to OverPay a tad or two themselves… to wit:

      [ChinaDaily] – ‘Palace on wheels’ on sale for $3.13m in Dubai

      …”…built by Austrian company MarchiMobile. The motor home, dubbed the “Palace on wheels”, is equipped with nearly everything one can think of in a house, including under-floor heating and a water misting system, as well as an AV system. The 12-meter long car is now on sale for 2 million pounds ($3.13 million) in Dubai. [Photo/CFP]

      • Oh yes, today’s ‘Zen’… a TaleOfTwoBooks as it were, and probably the best short econ think piece you’ll see this month…

        [NewStatesman] – Broke by David Boyle and When the Money Runs Out by Stephen D King: The broken mirror of money

    • chumpay le chump

      no offense taken- I am not trying to portray it as financial acumen. I am paying more for something that i believe is worth it.

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