Tag Archives: blogs

Bubble Bear Bloggers Buy… in Seattle and New Jersey

“Tim, the seattlebubble.com blogger, bought this house [3601 Wetmore Ave, Everett, WA; 1,620sqft SFH on 6,098sqft lot] for $225K. [Seattle Bubble blog, 27 May 2011]. He expressed concern that the act of buying would be seen as “moral weakness” and “picked to pieces” by readers. He summed up rationale as “buy vs. rent was in favor of buying for the location & type of homes we wanted to live in”.
At less than $150/sqft, it seems fine to us. -ed.

HOMEOWNERS James A. Bednar and his wife, Jayne, are in the throes of renovating their first home, in Wayne. Mr. Bednar, a blogger, has been a longtime public skeptic of the real estate market.

BIG news in the virtual neighborhood: “Grim” bought a house. [from nytimes.com 12 May 2011]
For the last six years, James A. Bednar — or “Grim,” as he is known in the blogosphere — has served as a passionate advocate of cool wariness about New Jersey real estate. Through his posts on njrereport.com, Mr. Bednar convened a community of skeptics, scoffers and scavengers for “true value” during times of spiraling prices — first up, then down.
Most regulars on the blog appear to have remained renters through at least one full housing market cycle, depending on how one measures the cycling. As did Mr. Bednar.
But on the morning of April 29, as Grim, he abruptly posted the announcement that he and his wife, Jayne, were closing on a three-bedroom ranch in Wayne. “Has J. B. lost his mind?” asked Grim about himself.
There were 217 quick responses. “Now I’ve heard everything,” read one. Others asked whether Mr. Bednar would disband the blog, for which he is unpaid (definitely not, he said), and whether prices had now hit bottom (he did not answer that). But most expressed warm, if teasing, congratulations.
“I’m sure with your knowledge of the market you are getting a real good deal,” read a post from “Mikeinwaiting.” “As far as bottoms go, well, you take your chances.”
Mr. Bednar, who says he usually blogs in the wee hours, has had a full-time job as a software technician since graduating from college during the dot-com boom of the early 2000s. He withheld the gritty details of his purchase from the blog. But in an interview, he readily gave them up, saying that since he was in the habit of exposing price information about other peoples’ houses, it would be hypocritical to do otherwise: purchase price $435,000, list price $479,000 — meaning that the Bednars negotiated a 9 percent discount.

As we’ve said before, US RE is a fair buy at present. There is likely still more downside, but, looking at these purchases prices, even another fairly big leg down wouldn’t completely destroy these folks.
Vancouver, snap-shot from the future, sometime later this decade? -ed.

“Hi, my name is Kate and I’m a recovering real estate addict…”

Kate at greaterfool.ca 9 Apr 2011 12:35am
“Hi, my name is Kate and i’m a recovering real estate addict. I used to spend afternoons searching for the perfect home on my pre-approved budget. Then i started watching home and garden. I hit rock bottom when i started scheduling viewings for houses we couldn’t afford.
Luckily my husband stepped [in and] held a real estate intervention before things got bad.
We live in a beautiful million dollar rental, and pay 2200 a month. I sometimes feel like i want to own, thanks to pregnancy hormones. But i’m happy, debt free, and i don’t have to pay an 800 a month strata fee.
Reading this blog [greaterfool.ca] gets me through the hard nights when i want to pull up mls and buy a house in Vancouver. Thank-you garth [Garth Turner, at greaterfool.ca] for saving us lots of money.
Now if you could only write an anti-designer hand bag blog my husband would really owe you.
Thanks again.”

“I just kept thinking: Something is not right here, too much risk, don’t people worry? They seem to think NOTHING is possible, until it’s literally happening.”

This from “just call me anonymous please” via e-mail to VREAA 18 Jan 2011 –
“I was at Metrotown this evening, SALE signs everywhere (retail – a hint at the big picture ?). What is it? Boxing month?!
As a young (23 y/o) Vancouverite, I felt so alone before finding the [bearish RE websites]. I just kept thinking “Something is not right here, too much risk, don’t people worry?”. Everyone I know is sucking on the kool aid, it’s extremely comforting to know I’m not alone in my views. People truly are stupid, it seems they are just not too good at taking guesses at estimating possible outcome scenarios. People are shortsighted, they think NOTHING is possible, until it’s literally happening.”

Yes, we are aware that one can make the argument that the bearish Vancouver RE websites are like a cult, with posters and readers all reinforcing each other’s delusional views of coming RE collapse. But, we consider that argument carefully, weigh it, and discard it. There is far more evidence that the delusions are held by the far larger bullish-owner-speculator cult, who are apparently having to deny far more to maintain their false beliefs. Sample belief: “There is no relationship between income and the price of housing.”  -vreaa

TPFKAA – “Like many people I have been trying to save with my wife for the past four years, with the end goal of buying a house”

Just three or four short days ago ‘anonymous’, the poster now known as ‘The Poster Formerly Known As Anonymous’ (‘TPFKAA’), started treating us to anecdotes in the VREAA comment sections. We’ve already headlined one of their composite anecdotes [Spot The Speculators #22; 23 Dec 2010], and will headline others in the near future. And there will be even more to follow, we hope.
Here’s TPFKAA’s own story, edited and compiled from various posts, 22 to 24 Dec 2010, at VREAA:

“I have been a blog reader for the past few weeks – it has been eye-opening. I have since been collecting my own anecdotes. I have “vectored” in to this site to share my experiences, as limited as they are. I felt it my duty to share with others as they have generously shared – I owe a debt of enlightenment to the many who bothered to post real stories from their lives, in keeping with the spirit of this forum. I (have gone) a little evangelical on the postings volume, I must admit, and for this I apologise. I had a lot of anecdotes built up over the past month that I felt would be of interest. [No need for apologies, the anecdotes are appreciated. -ed.]

Like many people I have been trying to save with my wife for the past four years, with the end goal of buying a house – (we actually wanted a small condo or townhome but have her father living with us, and with two kids, there are very few that have enough bedrooms. One thing I don’t understand is why virtually no one builds four bedroom apartments or townhomes – they are surely more economical than SFHs?) We were despairing of ever being able to afford anything large enough. I was looking as far out as Mission (we work in Vancouver, rent in Burnaby). One day I just got sick of every minute of every day thinking about how I could spend less and save up fast enough to get in to the market, and did a little search on Google for “average Vancouver house price” to see what information I could uncover to get a glimpse at future house prices. I came across Vancouver Condo info’s rollercoaster, saw the charts, and in rapid succession hit VREAA and Garth Turner’s blog. Read every Froogle Scott episode (loved the writing and the detail) – and months of archived blogs and anecdotes. The wife says I am obsessed.
I think it’s fair to say my world shifted on its axis. Since then, I have been asking subtle questions of anyone I encounter (it’s surprisingly easy in Vancouver, in 2010, to ask highly personal questions like how much did you spend on your house! amazing…) and my findings astonished me. The one question that had been puzzling me was the HAM or Hot Asian Money hypothesis, that had all my family members believing prices will NEVER come down in Van. So I got my realtor landlord into a discussion and worked my way to asking how these investors get the money. He volunteered all of the above. I should mention that together with his brother, he also manages 19 properties for investor clients, taking care of renting them out, maintenance etc. (his brother does the legwork, gets a small rent based commission, and together they share the commission from the eventual sale of these investor properties.) All these investor clients are living in Van, and own one or more investment properties in addition to primary residence. Most of them bought in around ten years ago, however, so they truly are long term investors.

I will keep asking around for more information. As far as I see it, there are two possible outcomes to this real estate conundrum:
1) Chinese and other foreign investors keep coming with enough cash and overseas income to buy up all Westside and work their way east with tear-down and rebuilds, with no need of local jobs. Local wage earners unlucky enough to be left behind in the property market rent or leave. That would include us. A skeleton crew of baristas, mechanics, retail staff, Ferrari and Lamborghini salespeople and check out clerks live in rent assisted social housing islands in a sea of uber wealthy, world’s-elite-with-a-penchant-for-temperate rainforest-climate-owned mansions. What happens to the local economy next I am not smart enough to figure out.
2) Many of the overseas investors are overleveraged in a speculatory bubble, both in their home markets (esp. China) and here. Rising interest rates and falling prices sap their will to buy higher. Depending on events in China, prices either decline calamitously or grind down slowly as per Garth Turner until they rest somewhere slightly above where fundamentals would put them, so about 4.2 price to income ratio (Vancouver seems to always have been above fundamentals. (grow op income perhaps?)
People continue to buy in preference to renting because of the homeowner premium. (as a six year renter since I arrived in this god-forsaken city I am prepared to pay slightly over to not have to deal with the landlords here – words cannot describe how cheap they are and how much it annoys me to have to spend money and time on making repairs because they never show up and I worry that they will raise rent every time I make them fulfill their legal obligations and actually spend the money on repairing dripping taps, leaks, broken stairs, etc.)

So that’s my take. I will keep collecting information to help the blogosphere decide where this will end.

As a new-ish Vancouverite who has lived in Italy, Spain, UK, Finland, Japan, even Albania albeit briefly, and traveled in 28 more countries, I want to tell something to all of you: read my lips very carefully:
It’s just like every other place, ok in some respects, sucky in others, great in a few. Get your heads out of your asses. It’s almost embarrassing telling people from other parts of Canada where I live, as I inevitably get tarred with the same brush of arrogance.

In my case, housing in Vancouver wasn’t affordable 4 years ago, and it isn’t affordable now. If it were affordable I’d be mortgaged to the hilt just like everyone else, nervously biting my bull hooves hoping that all these have-nots posting away into the night are wrong. I didn’t try to outsmart the market. I came within 10,000 more saved dollars of pathetic little downpayment to springing for a 1950s bungalow on an easement in Surrey backing onto railway land that if BC rail decided it needed, would cut the corner of the house off. Well, the 10,000 wasn’t as big an obstacle as the wife’s reluctance towards the place.”

Self Referencing Meta-Post – “The best indicator that there’s a RE bubble in Vancouver? The fact that there’s a RE blog (VREAA) that is basically dedicated to comments posted on other RE blogs.”

Anonymous at vancouvercondo.info December 4th, 2010 at 9:03 am
“The best indicator that there’s a RE bubble in Vancouver?
Nope, it’s not rent-value ratios, median income, affordability, etc.
It’s the fact that there’s a RE blog (VREAA) that is basically dedicated to comments posted on another RE blog (VCI)…
A blog about comments on another blog that basically consists of comments….nice.”

vreaa replied December 4th, 2010 at 9:10 am
“You make a good point, one that is not lost on many of us.
The fact that so many spend so much time thinking about the RE markets is itself an example of the misallocation of resources that occurs during a bubble.
We are aware of this.
In unusual times, people do unusual things.

[For the record, we source anecdotes from wherever they are available: RE blogs, news sources, e-mails directly to us, word of mouth, etc. VCI (vancouvercondo.info) is certainly our single ‘richest’ source for anecdotes. This is because it’s the most active discussion about Vancouver RE out there at present. ‘Anonymous’ is incorrect to imply that VCI is our sole source, but, we believe, is correct to point out that the simple fact that VREAA exists can be seen as further evidence of a bubble. In ‘normal’ markets conditions we certainly wouldn’t be collecting anecdotes. -vreaa]

The Importance of Buying at Vaguely the Right Time

When somebody next claims to you that RE, or any investment, always goes up “in the long run”, or by “x% p.a. over any 20 year period”, and that you should therefore simply buy & hold, show them this diagram. It’s from Carl Richards, at a NYTimes investment blog 10 Aug 2010. One implication is that the time that you buy can make massive differences in your actual dollar returns. – vreaa

Misinformed Citizens – “She mentioned now is a good time to buy, read it in a paper, heard it on the news. I said now is exactly the wrong time to buy. Many people that don’t keep up with blogs or follow stats closely haven’t really got it yet.”

When BC is in crash mode and the majority are saying “nobody knew this could happen here”, the stories on the blogs will stand as a record that a small minority had seen the bubble for what it was all along. -vreaa

metalhead at vancouvercondo.info 5 Aug 2010 5:21 am“Spoke with the neighbour’s wife on the street. She knows I have talked about buying another property in the past. She mentioned now is a good time to buy, read it in a paper, heard it on the news. I said now is exactly the wrong time to buy. Prices are still very near peak and the downturn is only just starting. She seemed surprised. Many people that don’t keep up with blogs or follow stats closely haven’t really got it yet.”