‘tincup’ sent us the following by e-mail : “Thought this might be worth archiving. On episode #145 of the KunstlerCast [24 Feb 2011] with James Kunstler (noted but controversial American author [* for context, see addendum. -ed.]) he says the following in response to a listener’s call regarding Vancouver Real Estate (The listener’s call starts at 24:48 and his comments start at 26:50 in the itunes podcast, or at his website KunstlerCast_145_Listener_Mailbag):
“Yeah, Vancouver is perhaps the most bubbilicious, distorted real estate market in North America right now. It’s as bad as anything that happened in America. It’s as bad as anything that happened in the San Francisco Bay area, or Los Angeles, or Florida, or Las Vegas. Maybe even worse.”
He goes on about drug money and Asian investors too.
Regards, Tincup” [Thanks, tincup. – ed.]
Expanded version of exchange tincup refers to::
Caller: “Hello, Michael King calling from Vancouver BC responding to the podcast on Australia… it got into the issue of.. there’s a trend in Anglo-American countries for young people to look for housing in city centres as a response, a revolt, against the suburban lifestyle unfortunately, here in Vancouver, in the Lower mainland, which is the greater suburban area, there is move for people under the age of 35 or so to go to the suburbs and this has become quite a noticeable trend here.. … it may have something to do with the fact that in Vancouver, which may or may not be in a real estate bubble, you’re looking at about 400,000 Canadian dollars for a 600-700 sqft 1 bedroom condo in the downtown core. So, for many people, this is absolutely unattainable, for that amount of money, or even less, you can have your suburban palace…”
Kunstler: “I’ve been to Vancouver about 4 times in the last 6 years or so, and I got a very very substantial tour of the suburban outlands there, I saw a lot of them. And, there’s a couple of things going on… Vancouver is perhaps the most bubbilicious distorted real estate market in North America right now. It’s as bad as anything that happened in America. It’s as bad as anything that happened in the San Francisco Bay area, or Los Angeles, or Florida, or Las Vegas. Maybe even worse. … [comments about condo development and ‘new suburban stuff’] … What I was seeing when I was there, was real estate near the centre being hideously overpriced, and what was probably going to turn into an over-supply of suburban stuff way outside the city … you’re paying a premium to be close to the centre … for the most part they’re pretty car dependent … They do have some light rail out there but not nearly on the European level … and simply not adequate to serve this vast suburban outland. It’s an extremely distorted market…”
Kunstler (and the caller) argue that prices near the core are forcing people away from the city centre, into the lower mainland suburbs. Our perception, however, is that value (what you get for your money) is poor all over the area, and, if anything, the bubble has caused some to leave or avoid the area entirely (rather than acting as a local centrifugal force). At this very moment, it is true that some peripheral markets have started dropping (Okanagan, Vancouver Island) and some have stalled (Northshore), but this is likely the effect of the beginnings of the bubble implosion, rather than a lasting effect. In other words, we wouldn’t see the bubble as having a sustained, longterm influence over choosing urban or suburban homes. Value is poor everywhere. We also expect eventual price percentage drops to be pretty much the same in all areas. – vreaa
* Addendum: Here’s what Ben McGrath had to say about Kunstler in The New Yorker [‘The Dystopians’, 26 Jan 2009] –
..author James Howard Kunstler, whose 1993 book about suburban sprawl, “The Geography of Nowhere,” is a staple of collegiate urban-studies curricula, and whose weekly blog column, Clusterfuck Nation, can be read as a sustained critique of the cheerful globalism championed by Thomas Friedman. His latest contribution to the doomersphere is an engaging novel, “World Made by Hand,” set in the post-collapse future, and while it’s not apocalyptic by the standards of, say, Cormac McCarthy’s “The Road,” it is comprehensive in its imagination of the disasters that await us: dirty bombs and race wars and dengue fever and flu epidemics and forced shavings by religious fanatics and hurricanes in New England in June. (Kunstler resists the doomer label-“I’ve never been a complete collapsitarian,” he says-but the fact that one of his bombs detonates in Washington on “twelve twenty-one” is likely to please superstitious adherents of the Maya calendar, which concludes its first cycle on what is now the Internet’s most popular day of reckoning: December 21, 2012.) “World Made by Hand” is set in a small town north of Albany, where the residents have no oil, no coffee, no spices, no mail delivery, and only sporadic electricity, but marijuana cultivation is booming and they’re growing “buds the size of plums.” Capitalism and human ingenuity persist; it’s only the economic incentives that change. “The action is going to be in smaller towns in the years ahead, because the cities are going to be so problematic,” he told me.