Tag Archives: Bulls

“I was really fortunate with how things worked out for me in real estate. I definitely took chances when I bought a few presale condos to flip back in 2004, but I was adamant at the time that there was room to grow for Vancouver.”

“I have moved on from residential and have been working in the commercial RE industry for over 8 years now. A lot less ups and downs and I get to deal more with businesses rather than individuals who tend to be less professional. Both sides of the industry have their pros and cons, but I love working with commercial brokers and tenants. I work for a large developer in town looking after their commercial portfolio in Western Canada.

A little about what has happened [to me]:

- Sold 2 of my condos that I bought pre-sale in 2004 in downtown Vancouver just by Rogers Arena. One sold in 2010 and the other in 2012. Both were 2 bedrooms that were purchased for $280K give or take and sold around $560K each. One I lived in with my family and rented out the other.
– Used the profits to upgrade to a spectacular 3-bedroom, 1600 square feet “new” condo in Fairview
– Have 2 lovely young kids
– Love condo living close to downtown with my family for the proximity to work downtown, restaurants everywhere and just the energy that the burbs don’t offer

I was really fortunate with how things worked out for me in real estate. I definitely took chances when I bought a few presale condos to flip back in 2004, but I was adamant at the time that there was room to grow for Vancouver. I still think it is one of the best places to live in the world and I am gladly paying for it by choosing to live close to downtown. I travel a lot internationally and every time my plane lands at YVR, I feel so blessed to be back home to such a beautiful place.

I took some chances, had some luck and stayed away from the extreme negative and positive views of posters on [RE Talks forum]. I would put myself in the Bull camp always, but that is only because I think you need to be ready to seek out deals – and this requires a pro-active mindset. One should never buy what they cannot afford (everyone agrees on this), but you should always be ready to buy a home when you need one (starting a new family, for example). Most of the original bears on [RE Talks] are gone, but I must say, it is funny to look back and see how wrong on the timing they were.”

- Property_Magnate at RET 24 Jun 2013 [cited by 'WhipMaster' (aka Johnny Horton, etc, etc) as an example of a story from a "winner" in Vancouver RE, VREAA 25 Jun 2013 7:14pm]

Nobody is disagreeing with the idea that one could have done well in Vancouver RE by buying in 2004.
And, please, nobody misinterpret the above anecdote as an endorsement for buying “a few” presale condos in Vancouver, least of all in 2013.
- vreaa

Royal Bank, CIBC, BMO, CTV, REBGV, Michael Levy, Royal LePage, Global TV – “Housing Crash Fears Unwarranted”; “There is no property bubble. Period.”

vanc re keep calm

In contrast to the recent MacLean’s ’2013 Crash’ article, we now have a surging surfeit of reassuring commentary from other sources:

“Canada’s real estate market remains “relatively solid” and should experience a “soft landing” despite the current slowdown and fears of overbuilding in the condominium segment, the country’s leading bankers said Tuesday. …
“Our expectation is that the overall real estate market in Canada is still relatively solid,” Royal Bank CEO Gord Nixon said. …
“Pure math says that a soft landing, if it means you go back historic levels of activity, that we’re going to have some softness in our economy,” Gerry McCaughey of CIBC said.
“… That softness doesn’t necessarily come out in mortgage defaults, it comes out in employment softness and consequential unsecured consumer lending softness.” …
“In fact, house prices may just stagnate. Condominium prices may just stagnate for a couple of years. And that’s the definition of a soft landing,” Bank of Montreal CEO Bill Downe said.”

- from ‘Bankers expect soft landing for Canadian housing market despite slowdown’, Canadian Press care of CTV News, 8 Jan 2013 [hat-tip Dr. Bubble]

“I just watched ctv vancouver news. they did a 5 minute piece on real estate here. they interviewed two realtors and one guy from real estate board. they all said prices of sfh in vancouver were down 1 % for 2012 and say prices won’t fall more than 3% in 2013 as sellers don’t need to sell so they will just pull properties and wait…so buyers who are expecting big drops will not ever see that. the real estate board guy said there is nothing in the cards that is showing sellers will have to sell so prices will stay high. then the host of the news said, well, there you have it… no bubble popping here and went onto next story.”
- vancouverbubbleman at VREAA 8 Jan 2013 5:49pm

Michael Levy, financial analyst: “There is no property bubble. Period. We’ve had prices come up because of demand, both domestic and from off-shore, and demand swelled, and particularly here in Vancouver, a most desirable place to own property, you want to live here or invest here.” …
Announcer: “Prices seem to be holding, as the tug-of-war between buyers and sellers continues.”

- from ‘Experts Say No Real Estate Bubble In Vancouver’, Global TV News, 8 Jan 2013 [video archived by Greenhorn; hat-tip YVRhousinganalyst]
["There is no property bubble. Period." - this latter-day pronouncement added to "What Bubble?" sidebar]

“Royal LePage forecasts that the price of an average Canadian home will rise by a modest 1% in 2013.
Canadian home prices will see a “very modest” appreciation over the next two years, as economies in both the U.S. and Canada gradually improve and family incomes climb slowly, the brokerage said.
“More home buyers moved to the sidelines as 2012 progressed, as economic uncertainty abroad and reduced affordability became a drag on the market, however house prices proved resilient,” said Phil Soper, president and chief executive of Royal LePage.

- from ‘Housing-Crash Fears for 2013 Unwarranted, Forecasters Say’, WSJ, 8 Jan 2013

Bears Care, Too


“…the schadenfreuden stories on Vancouver Real Estate Anecdote Archive. Always good for a bitter laugh.”Bill Lee at francesbula.com 26 Nov 2012

“I never did give anybody hell. I just told the truth and they thought it was hell.” – Harry S. Truman

All the very best for the festive season to all readers, and wishing you all a fine, peaceful 2013.
Regular readers know that we foresee challenging times ahead for the Vancouver RE market. This opinion is not a wish, it is simply the result of an analysis of all the available evidence. And it is most definitely not to be confused with a desire for bad things to befall anyone in our community.
The speculative mania in housing (2003-2012) has been detrimental to Vancouver. It has misallocated human and financial capital, and distorted the economy of the city. It has inconvenienced many, and, unfortunately, in the end, it will have financially and psychologically hobbled a good number of citizens. This outcome is inevitable. Again, please don’t confuse this observation with a wish, it is simply part and parcel of a spec mania: a messy resolution has been ‘baked in’ since prices hit the afterburners in the mid 2000′s. When asset prices are artificially inflated by a chain of ever increasing debt-financed transactions, there will always be a large group left ‘holding the bag’ when it all runs out of oxygen.
There is, unfortunately, no other way things can resolve, and nothing that can be done to significantly ameliorate the bubble’s consequences. It is too late for that. The problem was letting it develop in the first place; and not allowing it to unwind earlier.
Anybody who is wishing for soft-landings, or hoping that some form of kindness will somehow allow for a resolution that involves no damage, needs to answer this question: Who do I expect to do the buying that will let everybody down gently? Who do I expect to step in now, borrow (or ‘donate’) large sums of money, and agree to purchase properties that are still woefully above their fundamental values? (and thus exposing themselves to very large losses ahead). Who do you suggest should be the sacrificial lambs?
Those wishing for fantasy bullish, Pollyanna-ish outcomes may be well-meaning, but they are simply ignorant of bubble market dynamics. You can’t simply call the game off and hope that everybody wins; it doesn’t work like that after years of ever-increasing over-extension.
All that said and done, we hope that readers fare as well as possible. All citizens, owners or not, will feel some of the economic effects of a RE downturn. Non-owners will suffer less direct personal impact, and there are a good number of owners who will survive the RE bear market with just a scratch or two. We are most concerned about modest net-worth households who have almost all of their savings in their homes; often with leverage. We know it is a painful fact that they can’t all get out ‘whole’, but we fear for them nonetheless. Particularly vulnerable are those close to retirement who are relying on the value of their homes for a comfortable future.
We hope that Vancouver can find a way to make the transition from overvalued market to a fairly, and sustainably, valued market with as little damage, and as peaceably, as possible. In fact, for us, the ‘peace’ bit is paramount. Economic stress puts groups at risk of highly-charged fractures, and we sincerely hope that as a large and diverse group we’ll be able to avoid scapegoating, in-fighting, and division.
So, to emphasize: Bears care, too. They may come across as grumpy and (per force) contrarian, but they care as much for family, friends, neighbours, and fellow citizens as anybody else. Sure, the occasional bearish commenter will express the opinion that they will gain pleasure from the losses of speculators, but this is far from the commonest position. The very few Vancouverites who have seen this speculative mania for what it is most commonly express genuine concerns about the potential consequences for themselves, their families, and their fellow citizens.
- vreaa

“I conceive that the great part of the miseries of mankind are brought upon them by false estimates they have made of the value of things.” – Benjamin Franklin

“I think you’ll need another sidebar category to capture the mounting “why do you hate families/wish misery on others?” accusations that are going to come in increasing numbers. Long time bulls – and new visitors to this site – may trot that one out more and more, accusing you and posters here of schadenfreude, hating home “owners”, etc. Even if it doesn’t happen here, mind-bending statements in this vein will increasingly pop up elsewhere and be worth collecting. May I humbly suggest a sidebar icon with a picture of Helen Lovejoy and the words “won’t someone PLEASE think of the children?!?” to link to the post you ultimately create addressing this topic?
Past even-handedness will matter little to desperate people who will misinterpret many sentiments expressed here. The archive will be useful to a subset of these people who are willing to be taught the historical mechanics driving this bubble.”

- paraphrasing of Royce McCutcheon at VREAA 17 Sep 2012 8:50am [We'll call such a sidebar 'Bears Care, Too' -ed.]

Bear Exhausted By Tenacious Bullishness – “Over the long term real estate never goes down besides there is so much money coming over here.”

“Talking to a colleague. Her and her brother were looking at places in my neighborhood last night. He sold his place in the sticks and is now looking to move closer to the city. I asked her why doesn’t he just rent, “he feels that interest rates are going to rise and he wants to lock in a low rate.” Wouldn’t it better to sock away the money and wait for rates to rise, values to decrease and then buy, I asked. “Over the long term real estate never goes down besides there is so much money coming over here.”
The rent for my one bedroom is $1,550 and similar apartments are listed for $490k. meaning it would cost me almost $3,000 a month to own a comparable apt. — based on 5% down with a 5-year fixed at 4% with a 25 year amort.
I am so very, very tired of being wrong about Vancouver’s RE market. It appears that there is just no shortage of people who truly believe that we are running out land, that real estate always goes up and that everyone wants live here.”

- Manna from heaven, at VCI, 1 Jun 2012 11:19am

“What do you mean you were wrong? Average price is down 12% YOY. It sounds like you were right.
Bears have been wrong so long they can’t recognize when they are right!”

- WFT? at VCI 1 Jun 2012 12:15pm

Infographic Argues For A Soft Landing – “Just because it is in the form of a Tintin book, doesn’t make it true.”

- this infographic from ratehub.ca, a ‘mortgage blog’, 27 Mar 2012.
The link was kindly forwarded to us by frequent contributor ‘Zerodown’, who adds:
“I admit to being impressed with the thoroughness of this info graphic. However, just because it is in the form of a Tintin book, doesn’t make it true. An annotated version will be required.”

We think this infographic overstates the strength of Canadian borrowers: 5% has not been the minimum downpayment; 32% of income has not determined the ‘maximum affordability’; 153% debt-to-disposable-income ratio is a very significant level; “Long term low interest rates” do not “shield the market from a bubble burst”.
We personally can’t see a soft-landing (a coolly deflating balloon?) playing out.
Who do we expect to keep buying Vancouver RE at these extremely lofty price levels once the promise of future abnormally large price gains disappears? Because, that is what would be required for a ‘soft landing’; a steady stream of buyers prepared to take out ginormous loans to buy RE that is no longer appreciating, or is very likely dropping, in real terms.
Who do those calling for a ‘soft landing’ propose to be doing that buying?
- vreaa

Vancouver 2030, Bull Case – “Stop throwing rent down the toilet and filling your landlords shorts with money bags, stop dumping money into risky and volatile stocks or savings account yield negative interest rates.. Be an OWNER and not a renter and GET RICH”

“This Macleans article is all about predictions.. no difference than economist, fortune tellers, mayans
The fact is that Toronto and Vancouver are the most attractive cities in the world and foreigners are trying to bust down barriers to enter these two cities to lay their roots. Here’s why the RE boom will continue:
- Lots of immigration coming in; esp professionals and high net worth families
- Best banking system and excellent government policies in place
- Very competitive in the resources/oil/financial sectors
- Consistently ranked by all financial publications as the best cities to live in the world
- Best educational system in the world
- Diverse, multi-cultural, polite population that are always welcome to foreigners
- Interest rates will stay low for a very long time (think Japan)
- The Conservatives show us that time and time again that they are pro-RE and will not let prices fall at all
Here are the prices for Toronto and Vancouver in 2030:
Toronto
Vancouver -> [see chart above]
Stop throwing rent down the rent
[sic] and filling your landlords shorts with money bags, stop dumping money into risky and volatile stocks or savings account yield negative interest rates..
Be an OWNER and not a renter and GET RICH”

- BobJJones commenting at Macleans 28 Feb 2012

Saved here for the (somewhat broken) record.
“Yes, Virginia, there were people who were still this bullish on Vancouver RE, circa 2012.”
- vreaa

Guerrilla Advertising On reddit? – “Just moved here, and have been renting a place for 4 months. My wife and kids (3 boys) are now coming to live here with me. I need to buy a home.”

“Just moved here, and have been renting a place for 4 months. My wife and kids (3 boys) are now coming to live here with me. I need to buy a home. I have a $800,000-$900,000 budget. I work in downtown. What are some good, safe, and clean neighborhoods I could live in? A place where my dollar will go far and my kids could grow up.
Any good neighborhood in the GVRD would be good.
Please tell me what neighborhoods you would recommend,
Thanks”

- thread at reddit.com ‘Need to Buy a Home in Vancouver’ started by ‘MiamiToIbiza’, 3 Oct 2011. [hat-tip matt at VREAA]

A discussion ensues, with bubble/no-bubble exchanges.
Through the discussion ‘MiamiToIbiza’ elaborates as follows:
“Coming up with a $1,000,000, is really difficult. I’m Only 32 years old, and banks consider me a risk at for a million, but I have approval for $750,000 loan. I plan on putting $150,000 in my self, I can’t afford to put in $250,000.”
“Looking for 2-3 bedroom +2-3 bath, at least 3000sqf home.”
“I may have my parents come and live with me.”
“I don’t think I’ll be buying in the proper City of Vancouver area.”
“I don’t think were in a bubble, we are very stable. Vancouver is Port City, a gateway city for people and goods.”
“I’ve been looking at Fraser heights, It seems really nice, I’m putting an offer on this home: http://www.cotala.com/1648 . THANKS FOR THE HELP VANCOUVER”


Gee, this guy went from asking an initial very open exploratory question about which area of the city to consider living in, to putting in an offer on a specific home, all in the space of 24 hours??
If we were in any way cynical, it’d occur to us that this reddit post just may have been a bit of guerilla advertising by a realtor or seller. But, no, Vancouver RE gets people to do crazy things, right?
The only three other posts on reddit from ‘MiamiToIbiza’, all in the last 24 hours, criticize teachers, Alberta and Winnipeg.
And another post thread started by ‘MiamiToIbiza’, also on 3 Oct 2011,   just hours after the first, reads:

“I bought a home
Got a home in Fraser Heights, everything is now getting finalized.
HOUSE: http://www.cotala.com/1648
It was slightly hire
[sic] then [sic] my budget but I’m happy. (Parents put in some money, THANK YOU MOM AND DAD)
Let me know what you think of the home”
.

Yep, we’d say it’s fair to conclude that this is guerilla advertising.
(Anyone who knows otherwise, please let us know).
The market is deteriorating.
Are Vancouver sellers and realtors becoming desperate?
Oh, and what does the BCREA have to say about this kind of advertising?
- vreaa

Their Past Is Our Present – Phoenix Bull Hubris, circa 2006

In July 2006, in response to a US ‘Housing Bubble Blog’ post ‘Realistically, how overvalued are Phoenix home prices? 5%? 10%? 20%? 50%?‘ [housingpanic 21 July 2006], Greg Swann, a Realtor from Phoenix, wrote ‘21 reasons to bank on the Phoenix real estate market…‘ [bloodhoundrealty.com 21 Jul 2006].
Excerpts from Swann’s post:
“Obviously, I consider this a profoundly silly question, but to lurk among the BubbleBloggers and their seething commentariat is to acquire an education in a slice of America invisible from this side of the sewer gratings. Notwithstanding the idiotic economic analysis, which is really no worse than the static-market fallacies paraded as profundities in the pages of the Arizona Republic, these sites — and not just HousingPanic — are infested with a cult-like fever to inflict suffering — at second hand, to be sure — on people who are in fact guilty of nothing except failing to have drunk the BubbleBlogger KoolAde.”

“Will prices drop by the huge amounts HousingPanic and his flying monkeys seem to yearn for? This seems very unlikely.
What seems much more likely is that Phoenix will recover from the hangover of last year’s buying binge and get back to a steady rate of growth — historically 6% a year. The reason this should happen is very simple: Population growth.
Metropolitan Phoenix is a unique real estate market. While other cities experience static — or even negative — population change, The Valley of the Sun routinely adds 100,000 new residents every year. There is no reason to think this will stop — not now and not soon. The carrying capacity of Greater Phoenix is eight million souls, about 266% our present population. We will hit that number — but not until 2040 or after.”

Forgive us if we had to pinch ourselves reading this. Does this argument remind one of anything we’ve heard here recently?: “Unique” (yawn); “5% p.a. price increases”; “40,000 new residents per year”; “steady immigration growth until 2050″. Why, it’s the “ Limitless Demand Argument For Ongoing Market Strength” that we hear proposed repeatedly by Vancouver RE bulls.
Anyway, that was then, and this is now: see the ‘Bull Hubris‘ sidebar for an ongoing collection of made-in-Vancouver puffery.
- vreaa

[with hat-tip to Gord]

“I find it surprising that even I am feeling bearish, despite being a homeowner. Are any of you former bulls feeling the same way?”

hazuchan at RE Talks 6 Jun 2011 7:30pm“I find it surprising that even I am feeling bearish, despite being a homeowner. Are any of you former bulls (like me) feeling the same way?”

Why should owning real estate effect whether you foresee ongoing RE market strength or future weakness? [rhetorical question].
It is obviously human nature to ‘talk one’s book’… so much so that when our analysis runs against our actual position it feels odd. It’s the first step in changing a belief, and later, acting on the new belief to change a position.
There has been so much information accumulating out there that suggests ‘bubble’. Information that has been getting increasing airtime from different quarters, MSM included.  More and more players – former bulls/complacent owners/potential buyers/potential sellers – are filtering and filing this information.
This is quite probably why ‘hazuchan’, a local RE owner who appears to read quite widely, is experiencing this ‘feeling’.
The ‘pumps’ are being ‘primed’; preparing for action.- vreaa

Global News Switch – ‘Real Estate Bubble?’ Story Becomes ‘Steady Climb’ Story

Global BC TV, 12 Apr 2011, Noon news -


Randene Neill: “Vancouver’s real estate market continues to lead the country in terms of price. the latest survey by Royal Le page shows detached homes in vancouver sold for nearly three times the national average but as Tanya Beja reports some analysts are suggesting that these prices can’t be sustained for much longer.”

Announcer: “It takes just over a million dollars to put a ‘sold’ sign on the average Vancouver home. It’s a little less if you’re buying east of Main Street, and 50% more on the westside. Those figure released today by Royal LePage, showing that prices of homes rose 10% in the first quarter of this year, compared to last.”


Chris Simmons, Royal LePage Realtor: “The vast majority of buyers on the westside and Richmond buying single family homes are from mainland China.”

Announcer: “Royal LePage says strong demand from overseas and low interest rates helped push the price of Vancouver homes three times above the national average.
It’s cause for concern say analysts, who warn buyers are taking on too much debt:”


AJ Sull, Pacifica Partners: “[inaudible]..income concerns, especially here in BC. The debt to income ratios are quite lopsided. We’ve exceded the US averages at the peak of the US bubble. So, that to us is not very comforting.”

Announcer: “The average Canadian household debt reached a record $100K last year, more than one and a half times the average income. Experts warn with rising interest rates, Canadians will no longer be able to service their debts and their mortgages. They say a correction in housing prices is inevitable.”

Sull: “We do think about a 25% price decline would start to balance incomes and housing prices off, quite well.”

Announcer: “AJ Sull says with a federal election looming, it’s time for politicians to weigh in on real estate prices. But unless there’s a drop in demand for Vancouver housing, some realtors say they don’t see prices going anywhere but up.”

Realtor: “We have people who want to live in Vancouver, people from Toronto want to live here, people from China want to live here, people from Iran wish to live here, people from all over the world want to live in Vancouver. So it’s a place where there’s an awful lot of demand.”

Okay, so that was the Noon news on Global, 12 Apr 2011.
Noteworthy for having the words ‘Real Estate Bubble?’ heading the piece, for mention of the word ‘bubble’, and for having an analyst on camera suggesting that 25% price drops are possible, perhaps even desirable, in the Vancouver market. (A concept familiar to bear blog readers. FWIIW, we would tease AJ Sull that he is being overly optimistic. If he’d suggested a 50% price drop, however, he’d likely not have gotten air-time, so “hats-off”, it’s a start).
The realtor, of course, gives the perennial “demand, demand, demand” argument for never ending price increases. -vreaa

The message is softened somewhat on Global between the Global Noon and 6pm news slots [hat-tip to Brian via Garth at greaterfool.ca for alerting us all to this]. Here is the later version, also verbatim, for the archive record:

Global BC TV, 12 Apr 2011, 6pm news [archived by Greenhorn here]-


Announcer: “And even as you ponder how much cheaper your car insurance could be, the price of real estate just keeps going up. According to the latest industry report, a typical home in Vancouver sold for nearly three times the national average in the first quarter of this year, and three things appear to be at work here: low interest rates, a limited supply of houses, and increased pressure from foreign buyers.”

Announcer2: “Putting down roots in Vancouver is getting more expensive, especially if you’re shopping for property in some of the cities most desirable neighbourhoods.”

Simmons, Royal LePage Realtor: “You know you’re probably looking close to two million dollars for an average sale price of a SFH on the westside of Vancouver, and maybe not quite so high in West Vancouver”

Announcer2: “A new survey by Royal LePage shows that vancouver housing prices are now three times the national average, with condos going fro a half a million dollars and bungalows about double that. It’s an increase of almost 10% from the first quarter of last year. according to realtors, it’s fuelled mainly by low interest rates, and demand from abroad.”

Realtor: “There is a large demand for properties in Vancouver and Richmond amongst the Chinese population, and they’re looking to immigrate.”

Announcer2: “While the focus on Chinese buyers has prompted some to push for restrictions on foreign ownership, some analysts say the bigger concern is whether Canadians are taking on too much debt, without having the income to match rising prices.”

AJ Sull: “Canadians had a little bit of complacency, saying that in Canada we don’t incur debt like Americans do..well, we’ve started to trade places with the Americans.. the Americans are paying down debt at a fairly rapid clip, and Canadians have yet to face that and bite the bullet on that.”

Announcer2: “Historically housing prices are three and a half times Canadian’s income levels, they’re now almost six times higher [sic], the average family has a debt of almost $100K, and, unless wages keep up, AJ Sull says, the real estate bubble could soon burst.”

Sull: “… concern is that, as interest rates go up, and they will eventually, will people be able to service that mortgage and the credit card debt that’s been piled on.. and that will have an impact on the economy over time, because people’s ability to spend is going to be more and more constrained.”

Announcer2: “Sull says a market correction of between 12 and 25% could be in Vancouver’s future. For potential buyers, it could just be a matter of being patient.”
—-

Between Noon and 6pm, the segments ‘Real Estate Bubble?’ headline has become ‘Steady Climb’, and AJ Sull’s self-stated “25%” becomes voice over “12 to 25%” mentioned by the announcer. The realtor drones on about foreign demand in both segments, using different words but saying the same thing.
Global have, however, in the second segment, introduced the idea of ‘patient buyers’, which we’ll give them credit for. That can’t be something the RE industry wants to see. Buyers becoming VERY patient will be part of the coming crash. -vreaa

Bearish Buyers: Capitulation, Of Sorts – “Yeah, if there was ever a clearer signal of the top of the market. I’m also the guy who enters the shortest cashier line-up at the grocery store but still manages to exit after everyone in the longer ones.”

Bear capitulation occurs when a long term RE bear gives in and buys.
Yelling “That’s it, I’ve had enough, this market is absolutely crazy, I resign myself to renting for life!” doesn’t count. Also, leaving Vancouver may seem like capitulation but it isn’t. The bear has to give in and buy. One of the laws of bubblology states that the bubble is over when the very last bear that is going to buy throws themselves on the frenzied pyre of the market and is consumed in the flames. When that happens, we can get on with the crash, already.
Here are two (rare) anecdotes of bear capitulation, but they are both ‘qualified’ capitulations, and we thus don’t present them as evidence of a top. Our brief comment follows at the end of this post.
We don’t see very many stories of bear capitulation: if you know any, please send them along. – vreaa

Lost Soul gave an account of their purchase on two threads at RE Talks, 8 Mar 2011 and 25 Mar 2011. Excerpts from Lost Soul’s comments:
“This loooooong time bear likely will be an owner soon (accepted offer).
Please don’t categorize me as a bull. I’m buying with the expectation that we will take a financial hit for it.
We didn’t all of a sudden grow horns and start snorting. But something did grow and popped out after nine months and we needed more space. It’s not all about money. :wink:
Could we have just found a bigger rental? — I suppose, but we just wanted a place to settle into and be able to do what we wanted with it without worrying about what the landlord would think.
Do we think this is a wise *financial* decision? — not a chance — this is pure consumption in our view. If by some bizarre happenstance the value of our place goes up 50% in the next year, we will not all of a sudden start crowing about how we were so brilliant to buy.
What if the market gets halved? — Bring it on! The loss on this purchase of course will be unpleasant but it also means that the next place we buy will have dropped twice as much in absolute dollars so net we’d still be ahead (if not by so much as not purchasing at all now). And ‘No’, the loss on the current place would not wipe out our dp for the next one — contrary to the beliefs of some here, bears are not necessarily on welfare living in their parents’ basement.
(Still) My advice to others: *We* are fortunate to have the savings and income to pull this off. If *you* are purchasing a place you’re not happy to live in for the next 35 years and buying it means Kraft Dinners, you might as well wait and pray for a crash — the “buy small and climb the property ladder” approach isn’t going to work.”

[In response to a comment "Lost Soul Buying..."] “Yeah, if there was ever a clearer signal of the top of the market. I’m also the guy who enters the shortest cashier line-up at the grocery store but still manages to exit after everyone in the longer ones.”

And a related story from enki at RE Talks 26 Mar 2011 8:47pm“I totally sympathize; I am a longstanding bear (and still am), and finally bought a townhome in Abby in August [2010]. I didn’t want to buy, but I was tired of waiting, and wanted some stability. Living across the street from some very good mountain biking didn’t hurt either. I bought the cheapest thing I could tolerate, and resigned myself to losing some equity while keeping my wife.”

These stories don’t really qualify as complete capitulation, as the protagonists remain mentally bearish, and actually anticipate a drop in prices. In complete capitulation the bear overextends themselves as much as other current buyers, and emerges from the experience as a born-again bull.
The anecdotes above are perhaps best seen as stories of ‘partial capitulation’. They are of interest, because, for a prospective buyer, the ‘partial buy’ and ‘renting’ are both compromises, but with different inconveniences.
For the record, we don’t think ‘partial buying’ is a good idea. Moving up during a crash may be more challenging than one expects. – vreaa

[Update: An exchange on 29 Mar 2011 between posters at RE Talks turns ugly, and Lost Soul confirms they paid cash for the above deal. Screen caps here and here.]

Michael Geller, Opinion – “While Vancouver prices are high by Canadian and North American standards, as evidenced by a recent photo essay on the most expensive streets in the world, they are still less than some European and Asian cities.”

Very occasionally we will headline the opinion of a local commentator, for the record. Hat-tip to jesse for alerting us to this recent comment on the Olympic Village and the Vancouver market by Michael Geller at francesbula.com 21 March 2011 3:39pm. Geller describes himself as “a Vancouver based architect, planner, real estate consultant and property developer with four decades’ experience in the public, private and institutional sectors.”

We’d characterize Geller’s outlook as “sunny and clear, with unexplained brief patches of drizzle”. He’s a complacent bull, he is not warning of an overheated market. He sees $700/sqft as a fair price for a condo in Vancouver. Comparisons of local pricing with “the most expensive streets in the world”, and the presence of mainland Chinese buyers, have soothed his concerns that prices may have gotten too high. At the same time he sees some westside/Richmond SFH lot prices as “outrageous”, and he notes the poor quality of construction (“the construction quality is not any worse than what one has come to expect in the Vancouver market”).
He plays the very tired and very wrong “stopped clock” card (roulette-betting version) and, in a rearview fashion, points to past price appreciation as a reason to not be bearish (“anyone who followed [Garth Turner's] advice in the past has probably missed out on some significant property appreciation”). Both of those arguments are classic bull-blinkers during bubbles. Michael Geller is not warning of a bubble; in fact, the headlined quote classifies him as a bubble-denier. -vreaa

Here’s the recent comment from Michael Geller, in full, for the record:
I will offer a few thoughts on OV and the housing market as a whole.
I do not think anyone should attempt to generalize about the Vcr real estate market based on what happened at OV. The fact that prices were reduced by 30%in this project is not a reflection of a drop in the market. It is a reflection of the overly aggressive pricing for this development when it first went on sale, and in May 2010 when it was re-launched.
I think it is fair to say that most developers and real estate analysts in Vancouver always considered this project to be over-priced, given the location (it’s not yet Coal Harbour, or even the North Shore of False Creek); the general site and building designs which reduce the number of units with views and result in many contorted layouts, and the overall standard of finishes. I would also add that given the extent of exterior walls, which are included in the floor space calcualations, the effective interior area is often less than for a comparable unit in a more conventional building form.
That being said, I do believe that many of the units are now much more fairly priced. Indeed, I did encourage a friend of mine to purchase a penthouse unit at what I thought was a very attractive price.
As for concerns about construction quality, while there have been problems, including water pouring out of at least one light fixture, and problems with the heating system, I am told by people in the industry that the construction quality is not any worse than what one has come to expect in the Vancouver market. I understand that some of the green features have ‘bugs’ that need to be worked out, but this happens with many innovations. One day, they should offer increased livability and other benefits.
There is no doubt that some of the finishes are below the standard one might expect for a $1000 a sq.ft. plus product, but they are in line with $700 a sq.ft. product.
As for the unit layouts, there is no doubt that many of the plans are quite odd, and not always as furnishable as they should be. As to why this is, I too would like to hear from the marketing team, since this is something they usually go over with the developer and architects. (Sadly, too many architects are more concerned with the overall look and appearance of a building, than whether a bedroom is properly dimensioned to accommodate the required furniture.)
It is my view that the plans were not as good as they should have been because of the very large number of units being built at once; the many different unit types resulting from the many, non-standardized building forms; and the shortage of time due to the rush to get permits issued and construction underway.
(As an aside, I have spent weeks trying to perfect 3 unit types for a small project I am doing in W.Van, and am still fretting about certain details!)
But is the OV signaling a potential drop in the Vancouver market? No. Is the Vancouver market going to drop? Well, some of us have thought prices were too high for quite a long time. But now that many buyers are coming here from Mainland China, prices have remained high, especially in certain areas. (Personally, I find the prices being paid for West Side Vancouver and Richmond single family lots outrageous.) And to some degree, this indirectly influences the prices being asked for other properties.
While Vancouver prices are high by Canadian and North American standards, as evidenced by a recent photo essay on the most expensive streets in the world, they are still less than some European and Asian cities.
Two final thoughts. In my opinion, the adverse publicity resulting from the lawsuits from disatisfied purchasers has to be having some effect on the current sales program. How can it not? At the same time, I too find it hard to be too sympathetic towards someone who probably devoted less time purchasing a very expensive apartment than they would devote towards the purchase of a new car.
In this regard, I would urge future purchasers to review the floor layouts and unit outlooks carefully, both in the daytime, and at night.
Finally, as for Garth Turner….well, he has been predicting significant corrections in the market for a long, long, time. One day, he’ll be right, of course, just like the person who keeps betting on the same number on a roulette table. But in the meanwhile, anyone who followed his advice in the past has probably missed out on some significant property appreciation, especially in Vancouver.”

Summary Snapshot – Heady Prices; Breathless Reportage; Disregard For Debt; Bull Exuberance

An average number of sales for January 2011, as monitored at VCI by VHB. [Jan 2011 sales 1876, sell/list 38.9%, MOI 6.0; Mean for 2001-2010 1732, sell/list 45.2%]

A prominent spike in average detached home price as per above REBGV chart. The detached home average price was $1,144,537. This spike may at least partly be attributable to a statistical anomaly, skewed by a few high end sales. Regardless, that’s the average, and the chart looks vicious.

In pockets of Vancouver, a fair number of over ask sales; Westside, Richmond, and Eastside, too.

Global BC runs a breathless piece on spiking prices, bidding wars, and over ask sales; with the obligatory mention of “increased Asian investment”.  [3 Feb 2011, archived by fellow archivist Greenhorn HERE.]

The Vancouver Sun runs an article ‘How much has the value of your Metro Vancouver home increased in five years?‘ [4 Feb 2011].

In a G&M article [3 Feb 2011] Benjamin Tal, CIBC ‘specialist on household credit’, argues that we’re all richer than we think, and that the 148% debt to disposable income ratio is nothing to worry about. An unwise position, in our humble opinion, and one that is likely to haunt Tal in the fiasco that will follow.

Sentiment? Not easy to distill.
In social situations there is much talk of and from those profiting (on paper) from the bubble. We have heard at least one story of people taking profits by selling investment properties (good for them).
On the blogs, some bears are definitely gobsmacked and demoralized by examples of outrageous prices achieved by sellers. Some are considering leaving town, as evidenced by the recent string of ‘disillusioned’ stories. Other bears are still showing fighting spirit and continue to point to the glaring facts of this bubble. “Just how long can this go on?”, they ask.
At RE Talks, a perennially bullish site, the bulls are even more boisterously euphoric, and any bear that ventures there is soon made to feel like a FOX reporter in Tahrir Square. Only those with the very toughest pelts remain.

This is all as good a sign of a top as any, but, then, we’ve said that before more times than we care to remember.

-vreaa

“Since I bought my home my ‘income’ has been 40% from my job and 60% from housing appreciation.”

L8erDude at yattermatters.com February 2nd, 2011 at 1:18 pm, 4:53pm & 3 Feb 2011 at 8:56am -
“Since I bought my home my “income” has been 40% from my job and 60% from housing appreciation. When I sell this is tax free money. Go ahead and rent forever – but you’re rich or poor only in relation to your peers. At 60 years of age come and talk to me about how wise it was for you to rent. … I don’t see a halt to property prices so long as immigration continues at the frenzied pace of the last 20 years. At 60 years old my home will be worth 3x today and your rent will be about the same multiplier. … I won’t take a dime less than my home is worth to sell to an über-bear.”

1. The amount of “income” from appreciation of current market value of their house should be ringing alarm bells for this owner, and telling him/her something about the market, …but it isn’t.
2. The gains are thus far only present on paper. Only a very small percentage of owners in this situation will realize their gains.
-vreaa

“As frustrating as it may be” on the Wrong Side of the Bubble, the Bearish Position Remains Right

blammo at VREAA yesterday [24 Jan 2011] taunted the Vancouver RE bear ‘Choir’ for having been wrong for so long -
“I often wonder if more people have been hurt by bear blogs (selling too soon/not buying), than will benefit from them due to future market corrections.”

This is a familiar and expected criticism. We acknowledged to blammo that it has indeed felt silly being wrong for so long, but pointed out that this is simply what happens in bubbles. Bears look silly until they suddenly look right. It is easy to point out that anybody could have made a fortune flipping condos or westside lots, but we know that all markets are made up with an almost infinite number of coulda-shoulda-woulda situations, in retrospect.

Despite being wrong for this long, our outlook remains the same. And, no, this is not out of stubbornness, or out of insanity, but quite simply because there is no information out there that causes us to change our view. The vast chasm between Vancouver RE pricing and fundamentals remains astonishing. In fact, we see even more downside for the market as it goes from very overextended to uber-overextended. Fifty percent price drops become even more likely.

David Rosenberg, by coincidence, has some relevant comments in his ‘Breakfast with Dave’ missive today [25 Jan 2010]. He is, of course, talking about the currently overextended stock market, but the principles are very similar:
“As frustrating as it may be to have been focused on risk-adjusted returns as opposed to gross nominal returns, to have been managing the downside risks and preserving capital rather than chase a mostly speculative run, it is more advantageous to be positioned tactically to take advantage of any corrections or price dislocations that occur over the near- or intermediate-term that are part and parcel of all markets, especially ones that have over-run the inherent fundamentals.”

There you have it. That is why sensible managers of their own funds have not bought into the Vancouver RE market for the last 3, 5 or even 7 years. They have seen how much our RE market has ‘over-run the inherent fundamentals’, and have decided not to participate in a ‘speculative run’ with a significant portion of their own net worth. This is not to be confused with risk aversion. All good investors and speculators have to take risk. But the ones who do well through their investing lifetimes are the ones who take calculated risks, when the odds are on their side. Pointing out that people have made money in Vancouver RE in the last 5 years is like pointing out that a cowboy walked up to a roulette table, put all of his money on a number, and his number came up. And then another cowboy did the same thing, and another. Does this change the way one approaches roulette? Do you line up with the cowboys? No. Sensible people avoid roulette altogether as, over the long term, you can be assured of losing.
Yes, it is ‘frustrating’ for bears as the RE run continues, but memories of this frustration will pale into insignificance when compared with the relentless and ongoing pain of being on the wrong side of the bubble collapse. That collapse has the potential to wipe out many, and to severely impede the financial health of even more for decades. Not to mention the broader adverse effects on our society, that we will all be forced to sustain.
Until the price drops commence, we’ll admit we look foolish. But we fully expect that to be a temporary position.
-vreaa

Ongoing Talk Of Hot Foreign Money – “He says that the ‘official travel destination’ status from the Chinese government, combined with a restriction on investing in China RE, has opened the flood gates to dumping money into Vancouver real estate.”

thinktom (a local realtor) at RE Talks 23 Jan 2011 4;38pm“One of the owners of a large west side RE company has a friend in Hong Kong who’s been living there 20 yrs. He says that the ‘official travel destination’ status from the Chinese government, combined with a restriction on investing in China RE, has opened the flood gates to dumping money into Vancouver real estate. He says ‘it’s only the beginning’.”

Is this an anecdote or a rumour? (Regardless, it’s a third hand opinion).
Is the ‘owner of a large west side RE company’ an informed insider or a biased observer?
-vreaa

And here’s another related story, this time from unicas at RE Talks 23 Jan 2011 10:05am ‘The Wenzhou ladies may be coming’“Wenzhou is a small city in Southeast China. But Wenzhou people are feared in China both as fierce business competitors and real estate buyers. 30 years ago, they were among the first Chinese who set up private business shops. They calculated profit by fraction of a penny. For the past decade they have been known as bigshot condo buyers. They form teams of RE buyers, go from city to city in China, and bring up prices wherever they go.”
unicas quotes from this article from the Financial Times, ‘Chinese city allows personal investing abroad’, 10 Jan 2011“A Chinese city celebrated for its cut-throat entrepreneurs has launched a pilot project allowing individuals to invest directly overseas in a move that could signal greater opening of the country’s tightly controlled capital account. The eastern city of Wenzhou will allow individual residents to spend up to $200m a year in offshore investments, according to an announcement on the city government’s website.”

Okay, so, the Redcoats!, or the Tartars!, or the Russians!, or the Zombies!, or the [your scariest nightmare adversary here!] are coming!
Before we all start quaking, note this passage from the end of the article: “Wenzhou investors spent around Rmb5bn buying assets in Dubai before the real estate bubble burst there.”
As we’ve said before, the vast majority of ‘hot’ foreign buyers are dumb-money momentum investors who will high-tail it out of here when prices eventually turn south. It’s a force and a story that will make our bubble ‘n bust that much more extreme.
-vreaa

“Lotsa regrets on my end….. a lot of properties I’ve wanted to buy in the lower mainland over the past 7 years but didn’t “

RiskArb at RE Talks 10 Jan 2011 9:16am -
“Lotsa regrets on my end….. a lot of properties I’ve wanted to buy in the lower mainland over the past 7 years but didn’t:
- parking lot on granville street before the big redevelopment
- West side lot on SW Marine with views
- Pre-sale condos in coal harbour
- First phase of Harbour Green
- Didn’t buy into Hong Kong real estate during SARS (bought in Vancouver instead) and later in 2008
- Didn’t buy into several Singapore and Indonesian projects I liked in 2007/2008…. again, cash constrained and I didn’t want to over-leverage
- Never flipped a property ever. Instead of buying and holding (I always put down 35%), I could have been more ballsy and flipped condos or put down less equity.

The reasons:
- Couldn’t scrounge up enough $$ for the parking lot on granville b/c most of my savings was stuck in an illiquid stock holding that didn’t end up making me any $$$
- My partner on the west side lot (was a small builder) bailed on me. His wife was nagging him and he gave in.
- Pre-sale condos. I bought some…. but should have done more and bought a penthouse instead of the smaller units
- First phase of Harbour Green…. this was so underpriced versus Rennie product….. should have plunked down but again, my holdings in stocks/PE at the time were locked-in and couldn’t come up with the $$$

Having said that, I’ve done better than most so i”ll count my blessings.
I’m no rocket scientist, but I usually call it right and the major f*ck ups have been when I listen to other people.”

The Economist – “Momentum effects help to explain why bubbles develop. Put that together with borrowed money and you have a disaster in the making.”

“You talking about me?”

‘The big mo’ [The Economist, 6 Jan 2011], deals with the dangerous situations that arise when herds follow winners, and the implications such behaviour should have for policy makers. The brief article is primarily about stock markets, but any sensible Vancouverite will see that it applies strikingly well to our own real estate market. [excerpts below]

We have long argued that momentum effects are driving our market. Vancouver RE prices are far removed from prices determined by fundamental measures. We believe that almost every Vancouver RE purchase has a speculative component, meaning that the purchase would not take place if the buyer did not think that prices will continue to rise at something like the historically unprecedented speed of the last 7 years. And, consequently, that many purchases would simply not have occurred if buyers expected a flat or falling market. Many in the market, without even knowing it themselves, are momentum players.

When the market turns, as it must, not only will this momentum demand evaporate, but all of the owners who are holding property for speculative reasons will experience some motivation to sell. How they act on those urges will determine the shape of our RE bear market. -vreaa

A few excerpts:

“The momentum effect cannot last for ever or share prices would head for infinity. Over long periods (more than three years or so) an opposite anomaly known as the value effect occurs: shares that are depressed in price tend to rebound. Momentum-chasing investors may get caught out by the switch from one effect to the other, especially when they have used borrowed money to try to enhance returns.”

“Analysing an irrational market is extremely difficult [Tell us about it! -ed.], as those who tried to call the top of the dotcom boom discovered in the late 1990s.”

“An irrational market sends misleading signals, causing capital to be allocated in the wrong places. … The [entities] that find it easiest to raise cash thanks to these market signals may not be those with the best business prospects.”

“Momentum effects help to explain why bubbles develop. Put that together with borrowed money and you have a disaster in the making.”

“Too often, central banks have tended to give speculative buyers a one-way bet—cutting interest rates when markets falter, but leaving them unchanged when asset prices boom.” [= 'moral hazard'. -ed.]

“Asset bubbles can be deflated through limits on some sorts of borrowing rather than just interest-rate hikes.” [Mr Carney can't raise interest rates right now, but Mr. Flaherty can tighten mortgage lending. Let's hope he's listening. -ed.]

“Economies can get carried away by momentum.” [Yeah, 'greatly excited', but at the same time severely distracted and deeply injured. -ed.]

“We aren’t selling yet but when I think we can clear $3.5M, we likely will. 10% to go…”

‘John V’, who appears to be planning to sell his Kerrisdale home, has this to say at yattermatters.com 2 Jan 2010 1:57pm -
“I think the market pushes higher into spring as inventory drops to zero (and I am talking only West side here).
Driving around I don’t see a lot of new houses ready to come on the market, however I have seen some lots sold in May-Oct coming back on the market as builders are looking for quick flips rather than tying up more capital to build new houses. This will only serve to delay any new house inventory.
People thinking of moving up are staying put, cause prices are just too insane to contemplate selling for $3M to buy $4M, so dont expect a lot of mid-tier investory [sic] either.
That leaves estate sales and sales from people will to leave the Vancouver market all together. And that aint much.
So with huge demand and diddly for inventory prices go higher until current owners finally capitulate and sell to realize huge gains.
We aren’t selling yet but when I think we can clear $3.5M (after fees) we likely will. 10% to go …”

Pretty classic. Prices treble or more over ten years, and the players are still holding out for the last 10% of gains.
How many other (thus far invisible) sellers are in this situation?
Many are sitting on large, life-changing paper gains and feeling sure that they’ll be able to realize them.
What will their response be when prices instead stagnate, or begin to drop?
‘John V’ may get his timing right, he clearly has his finger right on the sell button. But the vast majority of those planning to sell will not realize their imagined gains. It’ll only take a very small percentage of people trying to cash out at once to crash prices from these heady heights. Wait too long and… it could be ugly.
Those ‘$4M’ Kerrisdale homes will sell for $1M – $2M in the coming bear market. -vreaa

Jay Bryan, Montreal Gazette – “Homes are resistant to big drops in value. … It’s hard to find a reputable analyst who predicts anything other than mild fluctuations in housing over the coming year or two.”

Excerpts from ‘No solid basis for scary speculation’ by Jay Bryan, Montreal Gazette, 30 Dec 2010 -
“One of the biggest business stories of 2010 was one that never happened: the disastrous Canadian housing bubble and crash that never came to pass.
Of course, we know this now. Canada’s hot housing market has settled down without any serious slump in either prices or sales. It’s hard to find a reputable analyst who predicts anything other than mild fluctuations in housing over the coming year or two.” …
“The roots of bubble hysteria are understandable. After the terrible experience of the U.S., it made sense that many would be hypersensitive to any evidence that something equally disastrous could happen here. What’s not so understandable was that journalists working for some of the best newspapers in North America would give credence to such a hare-brained idea without finding any evidence that it was actually happening.” …
“As investors become more or less optimistic, the price of an asset -stocks, commodities or real estate -constantly moves up and down. Sometimes it’s too high and ripe for a fall -but that’s not a bubble. And unlike stocks or commodities, homes are an asset that’s resistant to big drops in value. Many owners are perfectly willing to wait if they don’t get a satisfactory price.”

It’s worth taking a look at the entire article.
Our comments:
Complacency comes before a fall.
Labeling concerns about a bubble in the Canadian RE market as “hare-brained” and “hysteria” are examples of bull hubris.
A home is by no means “an asset that’s resistant to big drops in value”.
How can anyone seriously write that while witnessing so many examples of housing prices plummeting around the globe?
It reminds one of the ‘scientist’ centuries ago writing that nothing heavier than air would ever be able to fly (while birds settled on his windowsill).
And folks, when “It’s hard to find a reputable analyst who predicts anything other than mild fluctuations in housing over the coming year or two” – Run for the hills! This kind of market complacency always, always, predicts coming volatility. The evidence is overwhelming that the moves will be to the downside.
-vreaa

[Some of Jay Bryan's passages from this article will also be archived in the 'What Bubble?' and 'Bull Hubris' sidebars.]

[Update 2 Jan 2011: For an excellent and comprehensive dissection of the Jay Bryan article, see 'Who’s the ‘hare-brained’ one? More hot air from perma-bull Jay Bryan' by Ben at financialinsights.com.]

A Vancouver Bull Sells An Investment Condo In Singapore- “I could probably hold out for another 10-20% easily over a year (still very cash flow positive at this price)….. but decided to take it.”

RiskArb at RE Talks 28 Nov 2010 8:03am“Realtor from Singapore woke me up this morning to present an offer from a mainland Chinese buyer for my condo.
If I sell, it would be the highest price so far obtained in the development. And mainland money is new to this part of town (East Coast SIngapore) as they’ve typically only played in the ultra high-end (Orchard Road and Marina Bay).
At the same time, I read in the Globe and Mail ROB an article about Vancouver real-estate and how the majority of purchases on the westside are from mainlanders. … The trend should have slapped you in the face by now.”

Update one month later:
RiskArb at RE Talks 27 Dec 2010 10:30pm“Update. I turned down the above offer……..and last week I got another offer that’s 3% higher. Malaysian Chinese buyer. I could probably hold out for another 10-20% easily over a year (still very cash flow positive at this price)….. but decided to take it.”

Exquisite Malevolence – Vancouver RE Bull Uses ‘It’s A Wonderful Life’ Quotes To Torture Bears On Xmas Day

For at least five years, there has been fluctuating online animosity between Vancouver RE bulls and bears. The intensity ebbs and flows. High emotion is an inevitable component in a market as distorted as ours.
The Christmas Day post below, initiating a thread at at a largely bullish local blog, reaches such an exquisite point of malevolence that even other bulls admonish the poster.
Archived here to record the sentiment; it will also be referenced in the ongoing ‘Bull Hubris’ sidebar collection.

eyesthebye at RE Talks 25 Dec 2010 11:59pm -
“It’s A Wonderful Life
Thought these quotes were appropriate – given the holiday season and on topic for this site.

- “They had to wait and save their money before they even ought to think of a decent home. Wait! Wait for what? Until their children grow up and leave them? Until they’re so old and broken-down that they . . .”
- “Fifteen years ago, a half-dozen houses stuck here and there. There’s the old cemetery, squirrels, buttercups, daisies. Dozens of the prettiest little homes you ever saw. Ninety per cent owned by suckers who used to pay rent to you.”
- “You know, George, I feel that in a small way we are doing something important. Satisfying a fundamental urge. It’s deep in the race for a man to want his own roof and walls and fireplace…”
Hope you bears fulfill your fundamental urge for the coming year..
Merry Christmas and all the best for 2011.”
[
image above was inserted into the post here]

geezer responds 26 Dec 2010 2:39am -
“Keep up the petty and inappropriate gloating ETB, you are going to look sooooo dumb if the market has a major correction. How will you feel if [the bears are] right? I am beginning to understand [their] hostility to bullish sentiment, it is probably caused by people like you.
What if your old house drops to $100k below your purchase price and mortgage rates hit 12%, then you discover you need a new roof or foundations, or both? Any one of those events is well within the bounds of possibility.
I’m a long term bull on Vancouver but I’ve lived through huge price reversals before, if you believe in karma you are begging for a collapse.”

“I just wanted to share a conversation I had with a good friend of mine as he announced he was going to buy a place.”

El Magnifico at VREAA 25 Dec 2010 12:24pm -
“I just wanted to share a conversation I had with a good friend of mine as he announced he was going to buy a place. It really highlights well what is called “the emotional factor” when it comes to buying real estate. Hopefully this conversation will be useful to some other people…

Me:
Hi (…),
I hope you’re doing well. I was also apt hunting recently, until I learned more about the real estate market in Vancouver… I’ve decided to hold off for for a couple of years and see what will happen.
I read a lot of articles, blog, etc… You may want to hear what these people have to say about the Real Estate market in Vancouver. Here are some of the most useful links I found:
https://vreaa.wordpress.com/
http://www.greaterfool.ca/
http://canadabubble.com/
http://financialinsights.wordpress.com/
Good luck!

My friend:
Hi (…),
Hope all is well with you too!
Thanks a lot for the information. I surely won’t dare to disagree that the risk of a potential real state crisis has increased due to the low interest rates, easy credit, and consequent increasing household debts, etc.
However, since I arrived in Canada some people have been expecting a real state crash in Vancouver for different reasons: 2008 financial crisis, the olympic games; etc.
On the other hand, some other people think that real state prices in vancouver will never drop significantly, due to the shortage of available land…
Meanwhile, I now realize that I have spent over $75,000 to pay for my rent in the last 3.5 years… and I will never see this money again, that’s for sure…
I mean, I totally see your point, and actually nobody can be sure if a mortage will or will not be a good deal at this time…
I really don’t know who is right or wrong… and so I guess I will keep looking around and I think I will probably buy a place if I see a good opportunity on a place that I like. Besides, it’s probably better to buy now, when interest rates are low, than the opposite…
Anyway, we should keep discussing about that… I think it can helpful to the both of us in trying to make lucid decisions.
Thanks again and let’s try to get togetehr for a beer or coffee sometime soon.
I take this opportunity to wish you, (…) and your baby a very Merry Christmas and Happy New Year!!
Talk soon,

Me:
Hey (…),
Good to hear everything is well for you! (…).
Somehow, I’m glad I didn’t buy any real estate as I would have been such in trouble to sell it off (the market is dead right now, -35%ish for saleq compared to last year…).
I’m glad you are aware of the potential risk for a real estate crash. The intent of my first email was simply to make you aware in case you were not. As we say in french “un homme averti en vaut deux” which means something like “one knowledgeable man is worth two men”.
If I can only give you a few advices to you in making the biggest investment of your life (unless your business becomes so successful that you can afford all these millionaires’ toys), there would be as follow:
– be always careful of what real estate agent and their board say. Trusting them regarding real estate analysis is like trusting your drug dealer when he says heroin is good for you! They have a vested interest in keeping the market going up…
– when you compare renting vs. owning, make sure that you take into account all the costs of ownership. As a renter, you don’t have to pay for property taxes ($1,500 a year), strata fees ($400 to $500 a month in the nicer buildings in downtown) and the maintenance costs (so many people bought condos in leaky buildings and had to pay 50 to 70K in rainproofing… that really hurts!). All in all, ownership costs are really expensive too.
– Don’t forget that when buying a place, you’ll have to pay 7% of commission fee to your real estate agent. On a $450,000 property, this is $31,500 (not far from half what you paid in rent in 3.5 years in Canada!), money that you will never see again too.
– remember that if you don’t have 20% of down payment, you’ll be required to pay for the CHMC insurance, which will be a significant additional burden to your mortgage payments.
Coming back to the argument of buying when interests are low, it is actually a bad idea, and it’s counter intuitive. Let me explain you. When people buy a house, they look at what they can afford and usually bought the biggest house/condo they can afford (property cost + interest cost). This is ok in countries like US or France, where mortgage interest rate is setup for the entire duration of the mortgage. In Canada, however, mortgage rates are reset every 5 years. I let you imagine what happened when a family that has bought to the maximum of their ability, at emergency low interest rates, see their mortgage payment doubling because their mortgage rate has been reset much higher 5 years later… This is what, in my opinion, will create a real estate crash throughout Canada. When the Bank of Canada will increase the prime rate, people will see their mortgage payment increase and won’t be able to face it, and therefore be forced to sell…
On the other hand, if you buy a place at a time where interest rate are high, the cost of your mortgage payment are likely to be lower when your mortgage rate is reset after 5 years. Today, it is the opposite. Interest rate can only go up, and therefore mortgage payment will go up significantly for most of the people.
Regarding the argument of available land in Vancouver, I don’t really buy this argument. There were so many special places in the US (Florida, California, Nevada, etc.) that, despite great features/qualities, have lost more than half of their values that I don’t think this argument is very solid. What I see is that prices in downtown Vancouver are now similar to prices in Manhattan and double the prices in Seattle. There is no rationale reason for that…
The last thing that I wanted to share with you is what I discovered when looking at mortgage payments. Initially, the first few years, your mortgage payments are split as follow: 80%ish to interest and only 20%ish to your principal. That something I didn’t know and found totally unfair and outrageous. Somehow, the first few years of your mortgage, you more renting the place to the bank than owning it…
Anyway, it’s a very long email. I wanted to share with you my thoughts and discoveries regarding RE. I was in the same seat as you and I didn’t buy, and now I’m leaving, I’m so glad I didn’t.
(…)
I hope this email will be useful to you. I’ll organize a small farewell gathering before I leave (…).
Cheers buddy !

Him:
Hi (…),
Excellent reasoning, thank you so much for taking the time to share, I really appreciate it!
(…)
I did become aware of the issues you mentioned above when I first thought of buying a property here in Vancouver, in early 2009. I agree with you in most of them (and that’s why I gave up the idea of owning a real estate property in Vancouver, back in 2009).
In some other aspects I think slightly differently from you, more specifically regarding the interest rates and ownership costs (but I won’t get into details here, because I don’t want to make this a boring discussion to you, as I’m sure you have more important things to think about(…).
(…) I’m now also considering some aspects of ownership that are less of financial relevance (but not less important) and more of personal nature, and therefore difficult to be quantified, because their effect and value can significantly vary from person to person.
All in all, I’m still inclined to jump into the owners side, if the right opportunity comes.
Well, thanks a lot again (…). I really appreciate your analysis – definitely very useful.
Hopefully I will see you soon then!
Cheers,
….”

“I don’t see a price bubble”

“I don’t see a price bubble and I don’t see that we need the mortgage criteria tightened as is suggested in some quarters”Helmut Pastrick, chief economist of Central 1 Credit Union, Financial Post, 19 Dec 2010

[Quote also archived in the 'What Bubble?' side-bar]

Central 1 Credit Union is the umbrella organization for credit unions in British Columbia and Ontario. Member financial institutions have nearly three million customers and hold about $70-billion in assets, the lion’s share of which are in British Columbia, home to some of Canada’s most expensive housing markets.

Learning From Isaac Newton – “I know quite a few people who sold at peak just before the 2008 correction. Their plan was to buy back in at lower prices. They are all now waiting and losing pace to the market every month.”

eyesthebye at RE Talks 18 Dec 2010 12:24pm“I know quite a few people who sold at peak just before the 2008 correction. Their plan was to buy back in at lower prices. Guess what? One is still living with her folks, another can now only afford a townhouse, and a couple more are renting, waiting and losing pace to the market every month. If I ever decided to sell it’ll be because I have an accepted offer on another house. Check how many “smart” waiters/renters there are on this site [RE Talks]. Waiting to buy real estate is the dumbest strategy… better to buy real estate and wait.”

Learning from Isaac Newton’s experience:
Okay, these players could listen to their friend ‘eyesthebye’, and plunge back into the bubble market ASAP (buying even less for even more; exposing themselves to the market, again). Alternatively, they could stick with the conviction that led them to sell in 2008 (that Vancouver RE was ridiculously overpriced and due for a big correction) and stay out of the market.  If they take the latter course they will,  in our opinion, ultimately prevail, and then some. In the coming crash prices will likely drop far, far below those of the 2008 peak.
During the South Sea Bubble, Isaac Newton, perhaps the brightest guy on the planet at the time, made a lot of money selling into the first half of the run-up. Then, enticed by the promise of further gains (and, who knows, perhaps because of the taunts of the early-1700s likes of ‘eyesthebye’) he stepped back in, just in time for the final peak ‘n plunge. He lost 20 thousand pounds, at a time when ‘a middle class family could live very comfortably on 200 pounds a year’. If he’d simply stayed out of the market and waited, he’d have been one of the  very few people who made money out of the bubble. -vreaa

“The maxim that credit was not wealth unless it rested on a wealth-producing asset had been ignored”. – John Carswell, historian, ‘The South Sea Bubble’, (1993)
“Snap; ditto.” – Vancouver RE 2010

Local Realtor’s Bullish Predictions – “Sorry, but you’re wasting your time with these charts. They mean nothing. There are only three factors: Supply of Buyers, Buyer’s access to funds, Supply of Sellers.”

Local realtor Will Wertheim laid out a bullish case for Vancouver RE in his comments [3 Dec 2010 10:18am] on our recent post presenting a technical analysis of the Vancouver RE price chart [Five Charts: Predicting Future Vancouver Housing Prices, 11 Sep 2010]. Will’s argument is headlined here, for the record, and our own comments on his predictions follow.

“Sorry, but you’re wasting your time with these charts. They mean nothing. There are only three factors (two related):
– Supply of Buyers, and
– Buyer’s access to funds
– Supply of Sellers

Like it or not you have to agree that there is a large enough pool of buyers out there right now and that will not likely dissipate over the next two years (as your hopeful charts try to say). Many of these buyers are not of local means. As long as these buyers have access to cheap money (be it offshore or through low interest rates) they will buy. The price balance and pressure is due to the small availability of homes for sale. As long as many homeowners are living in their homes and not listing them, supply will remain tight.

What happened in 2008 was an incredible event of such mind boggling reach. From media and those “in the know” a global crisis of confidence occurred. I knew (but did not realize its magnitude) of it coming about a year before it did from some higher-up bank VPs (no, I will not disclose who said what to me but they were a client who did not go forward on a deal and then proceeded to lose quite a bit of their investment equity, at least on paper). It stretched out into every sector of the consumer’s mind and retailers/sellers struggled to move any sort of product. What a great time to buy it was (in hindsight).

Now, what would have happened if that bubble didn’t burst? If there was no 2008 crisis? And where would we be today if the 2009 recovery didn’t happen? Doesn’t matter.

Fact: We don’t have enough land in the areas people most want to live for the type of homes most people want (westside detached).
Fact: We don’t have a high turnover of homes coming onto the market and likely won’t for a very long time.
Fact: Vancouver is desirable for a great many people, particularly those from outside Vancouver. I see that every day and hear it from tourists and foreign buyers.
Fact: Interest rates are low and general consensus is that they are unlikely to rise much over the next year or two. Beyond that, unknown.
Fact: Yes, unaffordability for locals is obscene. You’re talking average prices but as you know, that average house is pretty darn poor. While the average may be $1m for REBGV, on the West side it is $1.6m. The result is that locals will continue to migrate East where it is *cough* “affordable” while only those of generous means will be buying up the West maintaining that high average.


My bet: somewhere between 4 and 5. Not as low as 4 and not as high as 5. Unless another crisis of confidence spurs a massive dump of listings and a disappearance of money.”

—-
Our comment:
We welcome Will’s opinion and will take the opportunity to discuss it.
He sees as highly probable a mix of scenarios 4 and 5; scenarios that, in our original post, we weigh as having just 15% and 3% probabilities of playing out, respectively. So we differ substantially from him in our outlook on the markets.

Will’s position really comes down to a ‘demand-will-continue-to-overwhelm-supply’ argument:

1. Demand will remain high
- “(the) pool of buyers out there … will not likely dissipate over the next two years”
- “Vancouver is desirable for a great many people, particularly those from outside Vancouver.”
- “locals will continue to migrate East , … while only those of generous means will be buying up the West maintaining that high average.”

2. Supply will remain low
- “We don’t have enough land in the areas people most want to live for the type of homes most people want (westside detached).”
- “We don’t have a high turnover of homes coming onto the market and likely won’t for a very long time.”

3. Money will remain cheap and available
- “Interest rates are low and general consensus is that they are unlikely to rise much over the next year or two.”

Will is essentially saying “Things that have been happening will continue to happen, so price rises that have been happening will continue to happen.”

Will offers us caveats, but simultaneously downplays them:
- “As long as these buyers have access to cheap money (be it offshore or through low interest rates) they will buy.”
- “As long as many homeowners are living in their homes and not listing them, supply will remain tight.”
- “Unless another crisis of confidence spurs a massive dump of listings and a disappearance of money.”
He mentions these caveats in passing, but when it comes to factoring them into the final probability outcome, he appears to ignore the possibility (probability?) of any of these things coming to pass.

This is the difference between the bulls and bears at present.
The bulls say that things have gone well so far, despite the ‘crisis’ (the ‘Great Recession’), and thus, things are expected to continue to go well.
Bears say that, somehow we may have missed the bullets thus far, but there are so many potential downside risks, we’re expecting at least some of them will come to pass. And it’ll only take one or two of them to start a price avalanche. Bears give weight to factors other than ‘supply’ and ‘demand’, such as historically extreme fundamental measures, as indicating that a severe price correction is highly probable. Record high price:income and price:rent ratios; record high ownership rates; record low interest rates (now guaranteed to rise); record high household debt levels.

What Will doesn’t seem to get is that, rather than ‘meaning nothing’, analysis of charts takes into account the past behaviour of buyers and sellers. That’s the point. As we said at the beginning of the five-charts article: “Only a lunatic makes real estate sell or buy decisions based solely on charts, but, conversely, only a fool would say that past price action is irrelevant.”
-vreaa

Animation – “It was a hectic weekend. We finally bought a house.”

‘P’ sent us this video of an imagined dialogue by e-mail 11 Dec 2010 -

Opinion – “Vancouver bears better realize that there has been, and continues to be, a demographic and cultural shift. If you don’t want to buy into this new normative order, time to leave.”

“The New Normative Order” sounds a little Orwellian, but we’ll give this poster their due. In Vancouver, sales are in the bottom 30%-ile when compared with the last 10 years. The spring should be revealing, yes, but, until then, bears such as us have to admit that the fall market is showing more resilience than we’d anticipated. Prices are rather flat, but sales have bounced more than we’d have guessed since the summer. Is this noise? We’re not sure.
The chart above is adapted from those at agentwill.com (thanks Will). It deals with sales by week in the area that realtor Will follows, but it is pretty representative of what’s gone on in Vancouver as a whole.
Here follows a laying-out of the current ‘stick-it-to-the-bears’ case. It’s yet more of the ‘overwhelming-(Asian)-demand’ argument for Vancouver RE.
We archive it here to show that, at this point, it is still being yelled from various roof-tops. -vreaa

‘Flip Flop Vancouver’ at greaterfool.ca 1 Dec 2010 4:44am (! -ed.) -

“In Vancouver, aka crash ground zero, we have had over 100 percent list sell days for the past month, and its only November. We are back to multiple offers and over ask sales. Spring is going to be on fire.
The market has come back with a resurgence, and we are on track for a sales month that will be similar to the rest of the Novembers during the bull years.
Wow, Vancouver bears have been wrong for so long it must really hurt.
As for the Asian factor, yes, everyone with two eyes and half a brain can see that the offshore investment factor is real.
When 78% of the over 2 million dollar homes are being sold to asians, it is pretty clear that they are supporting the market (and yes, that is a real number, albeit from remax).
Gee, its hardly a surprise as Vancouver prices have gone pretty much up since the mid 80s, which correlates nicely with the beginning, and continuation, of the asian influx into Vancouver.
As long as offshore asian money, and asian immigrants come to Vancouver, prices are not going down.
While the rest of the bears patiently rent, and squirrel away the meagre difference between renting and buying, asians in Vancouver are easily amassing their down payments.

Keep in mind that renting is HUGELY stigmatized within the asian community. Asian children stay at home, with no costs, until they are married. Asian children DO NOT rent, preferring not to waste their money on rent, all the while amassing their down payments. It is not rocket science – even when earning average pay, the stay at home potential first time asian buyer can get a much bigger down payment much faster then those renting.
Also, extended family immigrants all pool their resources to buy real estate with the asian community. Four individuals working average jobs can pay off a home much faster than a high income couple. They are more prone to buy investment properties with little down payments as well.

Sorry bears, but the norms, values and traditions of the soon to be dominant group in Vancouver trump those of the soon to be minority group in Vancouver. This demographic does not share in the traditional idea of going out on one’s own, renting a crappy apartment, deferring gratification, and struggling to amass a down payment. Instead, it is much smarter to live at home, not have any bills, and amass a massive DP that allows you to pay off your mortgage faster, and leverage your equity quicker for another property.
But hey, its not like I am pontificating the effect of asian buyers in a local market 3000 miles away from the action. Lol.

Vancouver bears better realize that there has been, and continues to be, a demographic and cultural shift. If you don’t want to buy into this new normative order, time to leave.”

Chris Davies, REIN Member – “Guys like Don and I don’t care if prices go up or down, or sideways. You can make money with real estate in any economy.”

The recent VREAA post on Don Campbell’s interview at BNN [28 Oct 2010] resulted in a response from REIN member and blogger Chris Davies: ‘Bubble Blogging = Masturbation’ at chrisdavies.ca, 3 Nov 2010.  Read more about Chris here. In his post Chris says some fairly rude things about Garth Turner, denigrates what he calls “bubble blogging”, and then addresses the VREAA post thus -
“Which is why when I read a truly rediculous [sic -ed.] post from VREAA which took the time to transcribe one of Don Cambell’s spots on BNN, I was inspired to write this post.
Just how bored do you have to be to sit and transcribe a BNN interview? Really?
And is Don such a threat to you, Vancouver and investors across the country that you need to try and dismantle his points?
It’s easy to make a list of  ’15 fallacies and misconceptions’ with no support, and no concrete advice.
Here’s the point for the bubble bloggers out there, those who write just for the ego boost of an inbox full of comments or seeing a traffic spike.
Guys like Don and I don’t care if prices go up or down, or sideways. What we’re looking for is how can we use it to make money, and improve our families quality of life, plan for our own retirement or help others. You can make money with real estate in any economy, and many of us have done it in the past and will continue to do it in the future. My family has been managing buildings for Don and investors like him since the early 1980′s.
If there’s a bubble blogger out there who would like to see how it works, give me a call. If you’re just wanking to the tune of ‘the sky is falling’, just stay home.”

—-

Open reply to Chris:

[Intro: Readers to insert own masturbation joke here: Examples: "Why so tough on masturbation, Chris? Bad experiences?", or, perhaps use "..sex with someone I love", etc, etc.]

1. VREAA documents beliefs and actions relevant to the Vancouver RE market. That’s the whole point of VREAA. It’s a chronology of actions and opinions. REIN’s position is noteworthy at this point in the bubble. As is yours, Chris, regarding price action being irrelevant.
We don’t archive and address Don Campbell’s points because they are “a threat to (us)” but rather because they contain common misconceptions currently held by lots of people in Vancouver.
And we “dismantle” his arguments because, well, they’re dead wrong, and may even be dangerous to some. (Like you, we like to “help others“.)
We take the trouble to have the interview transcribed because videos on the web can simply disappear, and, as archivists, we’d like to save details of different opinions for posterity. [No giggling, Chris. 'Posterity' means 'all future generations', not 'butt']. We guess it’s disturbing for RE pumpers to see their flaccid non-arguments transcribed in black and white.

2. You state “It’s easy to make a list of  ’15 fallacies and misconceptions’ with no support, and no concrete advice.
If you were a regular reader of VREAA, you’d see many sound arguments supporting these conclusions. We are in a large RE bubble. Fundamentals don’t support current values. (We particularly disagree with Don Campbell’s statementYou can not analyze a housing market by looking at the housing numbers, you can only analyze the future of the housing market looking at the economic fundamentals, which is jobs and in-migration.“)
If we were asked, our concrete advice would be for individuals to consider not buying RE in the Vancouver market, and, to a lesser extent, we’d give the same advice for the whole Canadian market.
We note that you have not attempted to supply evidence against even ONE of the ’15 fallacies and misconceptions’ we found in the Don Campbell interview. (“I’m a good guy just trying to make an honest living” doesn’t qualify as an argument). Perhaps you’d like to try?

3. You state “You can make money with real estate in any economy.
Please clarify: When you say “make money with real estate” do you mean buying real estate or managing real estate? You state “My family has been managing buildings for Don and investors like him since the early 1980′s.”
Okay, great, you make money in property management. I have absolutely no problem with that whatsoever. Property managers will likely continue to make money in any market, agreed. Property always needs managing. But let’s not confuse making money from property management with making money from investing or speculating in RE.
Remember, people are reading your blog, and watching Don Campbell on BNN, trying to make their own decisions about whether to buy real estate, often whether to buy a personal residence. We wouldn’t want them to be confused in that decision by comments about how it’s always a good time to be a property manager.
So, to the point, Chris: Are you currently buying properties?

4. Regarding price direction, you state: “Guys like Don and I don’t care if prices go up or down, or sideways …
We believe it is very dangerous to make light of possible price drops, and that, for many Canadians, RE will prove to be a spectacularly bad investment going forward. Future returns are very dependent on entry-price points, and from that perspective it doesn’t get much worse than it is right now.
Besides, note that Don’s interview doesn’t even acknowledge the possibility of significant price drops. The whole interview treats the risk of any price pullbacks, even 10%, as remote. Don states that even the most overvalued markets are simply going to “plateau” or “be flat”. We disagree strongly.

We’ll keep your “I don’t care if prices go up or down” opinion on record. In fact, we’ll add it to the ‘Bull Hubris’ sidebar along with its confident cousins.

“I explained to her that I’m happy renting and she reminded me that renting is throwing away money when it could be put towards a mortgage.”

specialfx3000 at vancouvercondo.info 12 Oct 2010 8.19 am“Over the Turkey weekend, a relative asked me again if I’m still in the market. She reminds me that the rich Asians are taking their wealth out of China and will continue to pump up the Vancouver prices. She said their dirty money needs to be invested in our safe-haven country. I explained to her that I’m happy renting and she reminded me that renting is throwing away money when it could be put towards a mortgage. I told her sales are drying up and she said it’s just the season. I told her local income cannot support the prices and she says that don’t matter. She of course bragged about how much her house is worth now. Thank goodness my baby started crying so I politely ended the conversation.”

Happy Bulls

Thompson at RE Talks 15 Sep 2010 12;28 pm“I bought a property in Abbotsford at peak in 1994, price didn’t double until 2006, but so what? Two more year didn’t kill me. If someone bought his property in 1982, it wasn’t the end of world, as long as he can hold it, live with it, $180k house in 1982 is $1m today. If he or she can manage buying two or more properties in all those 30 years, he can still beat [the modest returns of RE bears].”

eyesthebye at RE Talks 16 Sep 2010 11:02 am“I can easily afford the debt with my income – and I’m a lot richer now than when I bought the house [early 2009], 3x as well off to be exact. And so long as the population of GV is growing I’ll be adding more and more equity wealth on the backs of bears’ missed opportunities.”

Bull Stories – “I am Up .wayyyyy up. Im in my early 40s have 3 places ,1 paid off Two with renters in.Even if the markets tank 50% I will still have $1.2m in collateral to go play with.”

We look hard for bull anecdotes*, really, we do… We’d post them if we found them, but there aren’t many new bull stories out there actually written down or otherwise stated. This is possibly simply the result of selection bias: perhaps the bears write and discuss, while the bulls get on with their lives, servicing their properties, spending paper profits, and so on. Regardless, we did come across two bull anecdotes in the Vancouver Sun comments section, 21 Aug 2010 -

turvey at 5:49pm“I am Up .wayyyyy up.
Im in my early 40s have 3 places ,1 paid off Two with renters in.Even if the markets tank 50% I will still have $1.2m in collateral to go play with.I came here with 10 G 15 years ago.
Im retring at 45.I have had enough with working .Im blue coller non union.
I just bought here because its a bargain ! and its still a Bargain .
You will get nowhere in this life if you dont buy property.Thats a fact.
Enjoy your rental pad and keep paying losers like me !”

Zooper at 6:01pm“I retired early as well and have done well in buying real estate. It’s funny how people don’t see it as such a good investment, especially if you are patient and view it long term. In a few years I bet people will think 400,000 for a 600 sq ft condo downtown was a bargain.”

[* Note that we are discussing bull anecdotes here (stories of actions), not the voicing of bullish opinion, which is very easy to find. -vreaa]

“The Land Is Water” and other bullish arguments

Tsur Sommerville, of the UBC Centre for Urban Economics and Real Estate, shows long term bullish insistence, largely based on the ‘ongoing overwhelming demand’ argument. It emerged most recently in the following statement [Vancouver Sun, 21 Aug 2010] -

“Depending where you draw the circle, 70 per cent of the land isn’t developable. It’s mountains or water or the United States. The higher the population of a city, the higher the house prices. If we lose 70 per cent of the land, our metropolitan area of two million will have the same house prices as a seven-million metropolitan area. Because people have to commute the same distance.”

[The argument is bizarre, and fallacious. Let's extend this: If we lose 90%, a population of 700K; if we lose 99%, a population of 70K; etc... By this reasoning, the smallest community perched on the minutest piece of the most undevelopable terrain in the world should also have the land prices of a large metropolitan area. But who'd want to live there? If you do buy the argument that geographical restrictions limit the growth of a young city (in this case, Vancouver), and it thus never develops the industry, the activities, or the appeal of the larger metropolitan area, why should its land prices rise to those of the metropolitan area? -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


Conflicting Views On Vancouver RE Risk

A Vancouver RE bull and a Vancouver realtor discuss the issue of timing a sale:

eyesthebye at RE Talks 23 Jul 2010 9:54 am“Since real estate mostly goes up, and is almost always close to peak, it’s not risky at all whatever time you sell. The only risk when selling is not getting back in fast enough and letting the market and your affordability get away on you.”

ckung at RE Talks 24 Jul 2010 8:04 am“Given that I personally believe that this market is at a start of a long awaited correction, I would suggest re-listing it but with an aggressive price strategy (i.e. significantly lower than the competing properties). If, for whatever reason, my clients feel that delisting it “for now” is the better way to go then I would warn them that there a real possibility that the market may have dropped even more once they want to list again. It is a risky proposition to delist and wait for a better time to do so because there may not be a better time to do so.”

[We agree with the realtor, 'ckung'. The bull's confidence is breathtaking. - vreaa]

Businessweek – “To a visitor, it can seem as if Vancouver’s main industry is real estate, like it used to seem in Las Vegas or Orange County.”

‘Vancouver’s Real Estate Bubble Trouble’, by Bryant Urstadt [Businessweek, 24 Jun 2010], is a fine article. We’d like it even more if it highlighted fundamentals such as price/income and price/rent ratios that would unequivocally have telegraphed to outsiders our über-bubble status. But you can’t have everything. Here are some excerpts, anecdotes and quotes extracted from the piece. -vreaa

“Real estate is like a sport here.” – Tracie McTavish, president of Rennie Marketing Systems

“To a visitor, it can seem as if Vancouver’s main industry is real estate, like it used to seem in Las Vegas or Orange County. A newcomer, emerging from the gate for international arrivals, is greeted with three separate backlit billboards, all offering architects’ renderings of planned communities. Aspac Developments promises that they’re “building a legacy of excellence.” Concord Pacific describes each of its multiple developments as “a master planned world unto itself with park, schools, daycares, shops, restaurants, and resort-style amenities.” Polygon calls itself “Vancouver’s Builder of Choice,” and offers contact information in English and Chinese. Driving out of the airport and up Vancouver’s main thoroughfare, Granville Street, one notices billboards for brokers and advertisements on the backs of buses for Realtors and developments.” - the author’s experience of arriving in Vancouver.

“Some of the brokers in Vancouver think they’re rock stars. Many have made $500,000 or $1 million this year.” – Grant Connell, a broker with Sotheby’s, a former professional tennis player who spent years on tour. As of June of this year, he had 52 completed sales. “I sold the first for $4 million right when it came on. The second was a little later to market. It took a long time to sell for $3 million. There’s your 25 percent 2008 correction right there.” - Connell on 2 homes in West Vancouver he sold in 2008; and then on the resurgence in 2009 – “It was just spastic. [He points to a narrow lot right on the beach, a vacant slot between two nice homes.] That was a $5.2 million sale last year. They tore down the home but never built anything.” … “Throughout 2009 assignment letters were being flipped. The minute I actually heard a taxi driver talking about flipping assignments, I knew something had to give.”

“The type of price increases that we’ve seen in Vancouver are unlikely to be sustained. There might be some downside risk to that market.” – Robert Hogue, senior economist at RBC Royal Bank.

“My basic view is that we have a Canadian version of the U.S. real estate bubble. Not exactly the same, but close enough. We’ve relaxed lending standards, we have high unemployment, and we’ve reached a point of unsustainability in the housing market. I see real estate values falling shockingly.” – Garth Turner, financial writer and former member of Parliament

“Vancouver has had the highest prices in Canada for some time.  The geography is constrained. You’ve got the Pacific on the West, the mountains to the north, the U.S. border to the south, and land reserves to the east. That puts tremendous upward pressure on land prices. We also have solid population growth with a sizeable proportion of immigrants. There are high-net-worth Asian purchasers buying as investments, as second homes, or for satellite families.” – Cameron Muir, chief economist for the British Columbia Real Estate Association

“Yesterday we did an open house for a $3.5 million home, and six groups came through. They were all Chinese. I’d say over half our high-end listings go to China buyers.” - Grant Connell, realtor

“Broker Andrew Hasman sees 70 to 80 percent of his high-end listings go to mainland Chinese. He oversaw an open house recently for a $1.8 million home. Of 100 visitors, 91 were from China.”

“Spend enough time speaking with [David] Rosenberg, Hasman, Muir, and others, and prices in Canada seem to make a kind of sense, a rational response to market forces that just so happens to have pushed prices way above the norm.”

Connell acknowledges that things are overheated. “I see it more stalling than anything. Units are starting to sit,” he says, opening the door to a $3.8 million four-bedroom penthouse in Vancouver’s downtown, in the seven-year-old Classico building. Decks on two sides look out over the tankers moored in English Bay, and Grouse Mountain beyond. It is a second home, full of stainless steel, granite, and floor-to-ceiling windows. At $1,688 a square foot, it is well over Manhattan’s average. “This would have been snapped up just a couple of weeks ago,” says Connell. But he’s not overly concerned. “Everybody always has a take on Vancouver,” he adds, “and nobody ever seems to be right.”

Foreign Speculators – “These Mainland Chinese buyers are upgrading their homes, or they’re buying a second home, or buying for investment purposes.”

This realtor points out that a percentage of Chinese buyers of Vancouver RE are speculators. We expect that, like local cash-flow negative speculators, these owners will end up selling into a falling market as the premise for buying (rising prices) disappears. This will add currently unquantifiable momentum to prices on the descent. -vreaa

Lily Korstanje, Magnum Projects, interviewed while promoting the ‘River Green’ development in Richmond, on Global TV 12 Jun 2010 -

“The way things are at the moment, I think we would be selling to around 50%, for sure, to the Mainland Chinese people. These Mainland Chinese people not only live in China a lot of them are stationed here [in Vancouver] already… Either they’re upgrading their homes, or they’re buying a second home, or buying for investment purposes.”


“The stock market has pretty much been a 2000 ft deep hole in the ground for me. That is why I like long term passive real estate investment, it is something I can better understand.”

Towards the end of a bull market, players can be lulled into the belief that an asset class is risk free. -vreaa

Lady Luck at RE Talks 21 Apr 2010 1:41 pm -

“The stock market has pretty much been a 5000 ft deep hole in the ground for me :( Well maybe a 2000 ft deep hole. That is why I like long term passive real estate investment, it is something I can better understand.”

“I was one of the unlucky 15 million people born into the city that ranks among the bottom 10 in the annual most-livable cities in the world survey. Then, quite magically, later in my life, I find myself among the lucky couple of million that live in the metropolitan region that is consistently on the top of that same list.”

A discussion regarding VREAA at RE Talks led to me observing that there were remarkably few personal stories  from Vancouver RE bulls on the internet. In response, arpakdel (RE Talks, 16 Mar 2010, 6:44 pm) kindly shared their story, which is archived here verbatim. It is an impassioned argument that demand for Vancouver is and will remain overwhelming. -vreaa

“Allright, here is a long one for your archives. It’s a bit of a story – my story, but it may just be right balance you need after posting the bit from that bitter woman that calls Vancouver a “second-rate backwater”:

I think the forces of the universe decided to first curse me and then to bless me. You see, because I was one of the unlucky 15 million people that was born into the city that ranks among the bottom 10 in the annual most-livable cities in the world survey. But then quite magically sometime later in my life, I find myself among the lucky couple of million that live in the metropolitan region that is consistently on the top of that same list – and funny enough, that city where I came from, although smaller in size than Vancouver, is already half the population of Canada.

But I would have settled for less than that. Hell, if I was put in just about any city in this mind-boggling massive country, I would have thanked the heavens and sacrificed the 30 goats I had pledged anyways.

And that may be my problem: I know what a shitty place to live in means first hand, and I shake my head when people living here just don’t get it. They can’t understand why a place like Vancouver will always be covetted by both insiders and outsiders. They don’t get that in our ever shrinking world, that means the demand for it will always be insatiable. For every one person that complains it rains too much here, I can find you 15 million of my country men that will smack in the face for not appreciating what it’s fresh air does to the body and soul. For everyone that will protest the politics of this blissfully free country, I will find you 15 million of my country men that will laugh and scorn how petty it is, because they grew up under the arbiterary whim of some beared ayotallah, and the boot of basij in their face. And for every one person that complains about the high-prices here and goes on and on about affordability and rental value analysis, the same 15 million will tell you the streets of their capital are littered with brilliant young minds with PhD’s in arm who can’t find jobs to pay half their rents and instead roam the streets each evening like mindless zombies, each day suicide looking more and more like a good vacation – and that is nothing to say of the 99% of the rest of young people who were not enough academic prodigies to even be able to get a seat in the extremely competetive universities or colleges.

But forget about that 15 million. The country is home to 70 million people. A small percent of that country is rich enough to buy their way into Canada. And what do you think they will do? They will buy homes. They will buy homes for themselves. And they will buy homes for their children. The other small percent will fight their way to Canada with teeth and nails…. and what will they do? Yes, they will buy homes, and they will buy them at market value. Your ROI, rental-value, forgone-oppurtunity analysis be fu**kin damned.

But forget about the country of 70 million people. Can you guess how many of the 4 billion in asia will want to live in a place like Vancouver? By 2020 the Vancouver region’s population is estimate to grow to 3 million. Some will move to Coquitlam, some will move to Surrey. They are coming, and they are not listening to your outcries that the prices for those “armpit sides of the city” are stupid stupid and that they are wrong for buying. While you scream, they will buy.

And you know what that means for you my dear friend? it will means increased demand everywhere.

Where people want to live and play, demand for real estate will always be there. And Vancouver is as prime as it gets. The formula that makes amazing is simple: take a country blessed with political freedom and economic riches, make a beautiful urban oasis along side a rugged coastal wonder, sprinkle it with mild weather, and voila. You have hit gold. Gold baby gold.”

“It’s Culturally Different This Time” – The ‘Cultural Difference’ Bull Argument for Vancouver RE

‘Vancouver Rocks’, a poster who frequents the greaterfool.ca site, has previously been featured here as a proponent of the ‘overwhelming demand’ bullish argument for Vancouver RE. Here he presents the argument that culturally determined behaviours make Vancouver RE different this time. We at VREAA don’t buy this argument (either), but we archive it here for posterity. With an appended succinct refutation by ‘junius’. -vreaa

Vancouver Rocks at greaterfool.ca 12 Mar 2010 6:09 pm -

“Vancouver has the highest percentage of young adults by government definitions (18-30) living at home in Canada. Much of this is cultural, where members in certain communities (Asian, East Indian just like Greeks and Italians in Toronto) do not leave home until they are married as renting is a huge waste of money in their eyes. When you leave at home for a couple years, it is very easy to accumulate a large DP when you have no expenses (someone making 30k living at home is much better off than someone making 60K having to rent). Factor in that 40% of the city is made up of primarily two ethnic minorities, and that people are getting married later, you have a situation where FTBS come to the table with very very large DPS that more than offset the high cost of houses. The do not need massive salaries to afford their homes…

Many FTBs also have large DPs from “unconventional” living arrangements by “traditional” living standards. In many communities, houses are bought by groups of immigrants who live 3-4 families to a house. Once that house is paid off, they facilitate migration of other relatives to purchase the next home, and repeat the process. When you have 3 extended families living together, all of which are committed to paying off the house, “average 2 person family incomes” are meaningless. These types of living arrangements also are more absorptive of economic shocks, as they do not rely on a sole breadwinner.

It is not rocket science. Posters from other parts of the country fail to realize that cultural attitudes and practices play into the market, and that you cannot simply use deterministic economic models to assume a crash will happen. The era of leaving your nuclear family home when you are 18, renting for many years trying to save a DP, and buying a house when you are married and settled career wise is dead in this city. That era still exists in other parts of the country, but not in two key metro areas – Vancouver and Toronto. That is why there is some truth to the statement all RE is local, and why blanket statements of universal crash are coming are meaningless. Many of the experts fail to see this…if you live here then you would see this and you would adjust your expectations of an impending crash accordingly. Some Vancouverites will try to refute this, but they know that this is an accurate portrayal of the RE landscape.”

junius at greaterfool.ca 12 mar 2010 6:33 pm refutes -

“These same factors exist in many other cities including US cities from New York to Miami to San Francisco and more affordable cities in Canada such as Montreal. They are not unique to Vancouver or Toronto and in no way support a continued affordability gap in the range that currently exists.”

“I flipped 3 homes between 2003 and 2007 and more than doubled my money. Banks would lend me $1,000,000 if I asked for it. I do not see any good opportunities in Vancouver at the moment. Vancouver is like the souvenir shop at the airport where items are sold for twice their value.”

Anonymous at vancouvercondo.info 11 Mar 2010 3:14 pm -

“I am not young, I have flipped 3 homes between 2003 and 2007 and more than doubled my money. I like to buy cash. Banks would lend me $1,000,000 if I asked for it, may be more. I am neither a bear or a bull, I have no idea where the market is heading, and I do not mind. I like good opportunities, and I do not see any in Vancouver at the moment. Vancouver seems to me like the souvenir shop at the airport where items are sold for twice their value. I never buy in airport shops, sorry…”

A Bull’s Position – The Government Will Continue To Juice The RE Market For Homeowners, “the 70% of the population that “counts” from a political perspective.”

Ponzi schemes built on debt-financing always eventually collapse on themselves, regardless of what governments want. But, for the record, here’s a recently stated variant of a common RE bull position. – vreaa.

Dr. Know at vancouvercondo.info 5 Mar 2010 5:16 pm -

“It is amusing to watch the bears raise the same old arguments for 6 plus years, pointing out that the inevitable crash is just around the corner. Whether it was zero down/40 year mortgages, slashed interest rates, home reno credits or property tax deferral programs, both the federal and provincial government have demonstrated an ability to implement policies and measure designed to keep the housing market hot. The introduction of each new policy and program has caught the bears by surprise, and each time bears repeat the refrain that the government has used up all its ammunition. But who is to say the government doesn’t have any more “ammunition” left to prevent a collapse of the market? Everyone thought the minor 2008 correction was the beginning of the end, and they were sorely wrong. Bears failed to predict that rock bottom interest rates would be introduced, and that people would run out and buy despite it being “counter intuitive” amidst a recession. And while prices have edged beyond their previous high, bears are secretly (many openly) upset by the current state of affairs. The current state of the market goes contrary to their own personal wishes, “logic” and perception of “economic fundamentals.” Bears love to say that the government is idiotic because they failed to learn from the collapse of other “bubbles” around them. But maybe, just maybe, they have watched and learned and know how to keep things moving nicely all the while preparing for a soft landing or minor deflation. After all, maybe there are a few bright public servants who have paid attention to the global real estate condition. Bears fail to realize that their vested interest in a crash in prices is in stark contrast to the 70% of the population that “counts” from a political perspective. The government will do whatever it can to prevent any US style meltdown. And while a fast correction is in the interest of bears, I am afraid to say that we are looking at 5-10 years of minor price decreases at best, as the government will intervene every step of the way to protect prices. And how many here actually want to continue to rent for 5-10 years while prices slowly deflate? Everyone here wants to buy at the “bottom,” and few if any will buy after only a 10-20% reduction because you will still “lose” that hard earning savings you socked away (difference between rent and home ownership) as prices continue their downward spiral (according to your own theories) Bears pretty much have to keep waiting for many many years in order to have their theories validated. Whether you want to admit it or not, many bears here have put their lives on hold waiting for a crash (despite all the glib comments about 1000 bucks per month in the bank, eating out and traveling more than indebted homeowners). With a culture that constantly socializes you to own, only a fraction of you are self confident enough to be truly happy renting. The vast majority of the posters here cling to the notion that they are rational investors, pretending to be happy renters, all the while hungering for a collapse in the market and loathing homeowners. And while you might be the rational investors, at the end of the day, you are a tiny minority with values that run contrary to the current values of the vast majority – instant gratification, short-term thinking, greed, entitlement, and abdication of personal responsibility (after all the government will bail them out if things go sideways). Unfortunately, or fortunately depending on which side of the market you are on, many bears will be renting for many many years, clinging to the notion that they are “right” and pretending to be happy despite knowing deep down inside that they were/are wrong.”

Vancouver Sun Grade 8 Essay Editorial – “There isn’t a housing bubble. The problem is not high house prices but low incomes. Or high taxes. Or something like that. Yeah! that’s right, something like that!”

An editorial in The Vancouver Sun 11 Feb 2010 reassures us that there isn’t a housing bubble in BC, and suggests that the explanation for the outrageously high price/income measure is simply that incomes are too low. Incomes would to rise by a factor of 2 or 3 for housing prices to make sense, but The Sun doesn’t get into any details as to how this could happen. They hint that taxes should perhaps be less burdensome, an ironic observation given the levels of provincial and federal debt, and the high likelihood of increases in taxes going forward. At vancouvercondo.info tincup (11 Feb 2010 8:08 pm) pointed out that the editorial reads “like a grade 8 english essay.” -vreaa

Excerpts -

No policy change is needed to prevent the housing bubble: There isn’t one

It’s not clear what problem Canada’s chartered banks want the federal government to solve by toughening mortgage rules. But the Big Six are urging Ottawa to take measures, such as raising the minimum down payment and shortening the maximum amortization period, to avert a U.S.-style bubble and bust and the broader economic consequences that would bring about. However, there is no bubble — Canada Mortgage and Housing Corp., the Bank of Canada and the federal finance department all seem to agree — and an ill-timed move to dampen the housing market could set back the economic recovery.

To be sure, housing in Canada is expensive. The 6th annual Demographia International Housing Affordability Survey released last month found only five markets in Canada that it described as affordable, meaning the median price was three times the median income or less. Vancouver’s multiple was 9.3, the most unaffordable of the 272 markets covered. Perhaps the problem to be solved then is not high house prices but low incomes. In 2008, the average Canadian family earned $71,764 and paid 44 per cent of it in taxes. That’s more than the proportion of income spent on food, shelter and clothing combined.

Bear Baiting – “It’s the whole tone the bears take when presented with a good deal. This home couldn’t possibly be priced in my range because, it’s a dump, it has two alleys, it’s close to commercial buildings, yadda yadda yadda.”

Those bullish the market are cajoling cautious prospective owners by claiming that they simply don’t have the fortitude to buy, or that they have over-inflated and unrealistic ideas regarding the quality of housing they deserve. -vreaa

Main Photo: For Sale: 625 E 24TH Avenue Vancouver Fraser VE : Residential Detached

eyesthebye at RE Talks 9 Feb 2010 started a discussion headlined “Great Deal on this SFH in Main area” by referencing the above house (625 E 24th Ave; built 1910; 1490 sqft + 800 sqft unfinished; 33×122 ft lot; asking price $679K) and claiming that it was a “great deal”, that ‘sweat equity’ would add $300K-$400K to its value, and also offering to bet that it will sell for $100K over ask. Debate as to the desirability of this property ensued, regarding construction quality, age of the structure, neighbourhood, proximity to commercial area, and even the property’s Feng Shui. At that point the original poster objected to all the objections by saying: “It’s not just the discussion itself – it’s the whole tone the bears take when presented with a good deal. Like argufying themselves out of the market. This home couldn’t possibly be priced in my range because, it’s a dump, it has two alleys, it’s close to commercial buildings, yadda yadda yadda. If prices were 50% cheaper bears would still talk themselves out of buying somehow” and “This home might be [only] a half great deal to you – but your opinion doesn’t coincide with this market. Most buyers would probably tell you that being able to buy a decent home under assessed value constitues a great deal – at any time.” Poster dot com refugee pointed out that the house seemed “bloody expensive”, to which jimtan replied “Move to Windsor! You’ll love it there!!!”.

“I know a couple who bought a house for $3 million plus. Put about $800k down from their previous house which was mostly paid off, but that’s still a huge freaking whack of new debt.”

People who have apparently taken profits, but then simply used them to leverage up, are now in positions that are even more vulnerable to price drops. In the following example, a 25% pull-back in prices will wipe out 100% of the owners’ $800K equity. -vreaa

This from betamax at RE Talks 4 Feb 2010 12:10 am -

“I know a couple who bought a house for $3 million plus. Put about $800k down from their previous house which was mostly paid off, but that’s still a huge freaking whack of new debt. They thought they’d only be able to get a mortgage for $1 million based on earnings and were thrilled when the bank let them go into hock for more than twice that.”

Bull Hubris?… Or Appropriate Owner Confidence?: “Fundamentals don’t apply to Vancouver. Real estate has detached itself from economic reality long ago. It has reached escape velocity to break away from economic gravity. It is a beautiful case study. Something that has never, ever been seen before in any other city in the world.”

Increased bullish confidence is traditionally a sign of an overheated market, and rampant overconfidence a sign of an impending top. Vancouver RE, however, has been so hot for so long, and bullish cockiness has reached fever-pitch so frequently, that sentiment has proven to be a poor market timing device. Nevertheless we are interested in market emotion and will continue to collect signs of bear capitulation or bull hubris. A prior VREAA post [7 Jan 2010] listed numerous RE bullish blog quotes. This post will serve as an update and as an ongoing repository. It will be linkable from the sidebar. -vreaa

Steinbock at RE Talks 11 Jan 2010 8:12 pm – “BOC has announced that they will NOT increase the prime rate to control the hot real estate market for the foreseeable future. Yes, really. So:
1-it sux to be a bear.
2-Any bears willing to commit hara-kiri; please sign up now, as I have only one sword available.
3-It sux to be a bear.
4-Make sure to allow extra $ for cleanup if buying bear inhabited dwelling/property as excrement is being produced at an increased rate.
5-Bear rugs available at severe discount due to oversupply.
Your friend,  Steinbock”

jimtan at RE Talks 13 Jan 2010 00:29 am“What is the right strategy for a bull trend? Sensible people learn to buy on dips. What is the wrong strategy? It is foolish to refuse to buy, and to hold out for a ridiculous price. … You guys [bears] are the negative examples. Why spend time on this forum if you’re not willing to learn?”

jimtan at RE Talks 15 Jan 2010 10:01 am – “I’ve done the numbers and the bulls have the upper hand. The more noise I hear from the ideological bears, the better I feel. It’s confirmation that my analysis is right.”… “The bears… don’t do the numbers!”

silverman at RE Talks 14 Jan 2010 1:52 pm – “History tells us that over the long term you can’t lose.”

eyesthebye at RE Talks 23 Jan 2010 10:15 am – “So how many bears are now priced out having sat out 2009 and the 18% increase in prices? Priced out also refers to never being able to “bring oneself” to pay the price now offered.”

Greenhorn at RE Talks 23 Jan 2010 00:01 am – “Fundamentals don’t apply to Vancouver. I am sorry to say (for the Bears) that Vancouver real estate has detached itself from economic reality long ago. It has reached escape velocity to break away from economic gravity. It is a beautiful case study. Really, something that has never, ever been seen before in any other city in the world. The Vancouver real estate market had a brief slow down 2 years ago, but resistance levels [support levels -ed.] kept prices from falling for long. As prices fell, new waves of buyers jumped at the opportunity to buy at prices they could finally afford. Question for the Bears: After how many years of denial do you change your tune? 5 years, 10 year, 20 years of continual appreciation? If you read text books, you will never make money in Vancouver from real estate. Forget about it. Sooner or later you will begin to sound like a heretic. Don’t be that crazy guy in the basement suite.”

Johnny Horton at RE Talks 24 Jan 2010 3:20 pm – “All these landless serfs spouting off about nothing for the past 10 years. Don’t you wish they’d just shut up?  We’ve had to listen to them bad mouth anybody or anything to do with real estate for the 10 years. We’ve had to suffer all their stupid graphs, and “good evidence”, etc. We’ve had to endure their insults…boo-hoo-hoo. Is there no end to their bitterness????”

eyesthebye at RE Talks 27 Jan 2010 7:29 am – “Economic conditions are irrelevant – Have you not learned anything in the past year?”

UPDATES, ongoing:

Austin at RE Talks 27 Jan 2010 10:10 am – “…as the world gets wealthier quality of life itself becomes a product. It looks like Vancouver is producing it.”

jimtan at RE Talks 29 Jan 2010 11:18 pm – “Affordability studies like this are worth nothing. Its comparing the median income of A-L-L residents to the median price paid ONLY by current buyers. Apples and oranges?”

silverman at RE Talks 5 Feb 2010 12:14 pm – “Look at it this way.
Miami: Future price movement… Down. Therefore, currently it is overvalued
Vancouver: Future price movement… Up. Therefore, currently it is undervalued”

tqn at RE Talks 8 Feb 2010 8:48 pm – [in a thread "Are there better places than Vancouver?"] “It’s the best place one earth, and it’s at the jealousy of the world.” [sic]

Eyes of the World at vancouvercondo.info 9 Feb 2010 11:58 am“Hahaha..I love checking in here [vancouvercondo.info] and seeing the same old “arguments” being rehashed over and over and over again… Vancouver is the best place on earth and the Olympics will show that to the world. People will walk around, notice the beauty and buy here.”

jiming at VREAA 10 Feb 2010 9:23 pm[commenting on an accountant's concerns re overextended mortgagees] “Blah blah blah.. new highs”.

Johnny Horton at RE Talks 10 Feb 2010 10:56 pm & 11 Feb 2010 9:21 pm- [addressing in turn dot com refugee and HomelessinSD, who had both found this house overpriced] “Why are you dissing a house that you can’t even afford to buy? If you diss the house, you actually are dissing yourself.” & “Who are you to talk down about this house? You can’t even afford to buy this house and yet you call it a “shit shack”. What does that make you?”

eyesthebye at RE Talks 14 Feb 2010 9:45 pm – “Rental yields to determine price only matters in commercial [and not residential] real estate – bears somehow adopted it as their explanation of a bubble.”

Johnny Horton at RE Talks 16 Feb 2010 5:12 pm – “Renting eventually equals poverty. You cannot earn enough money to accumulate wealth. The stock market is a big racket. Any investment gains other than your principal residence, is taxed. Your primary residence is tax free other than the costs of services every year. The dollar is eroding, hence you have to earn more to pay an ever increasing rent.”

eyesthebye at RE Talk 24 Feb 2010 8:53 am – “Homeowners have been using HELOC for years to reinvest in real estate and have made piles of cash. Hope you took your thumb out of your ass long enough to understand this.”

Vancouver Rocks at vancouvercondo.info 27 Feb 2010 1:32 pm – “The gods are on our side when it comes to real estate. The Vancouver boom is not over. It is just starting. All it will take is a couple of thousand visitors to buy, and the already low inventory will be eliminated. Sorry bears, but Vancouver will continue to go up and you will continue to be left behind.”

eyesthebye at RE Talks 27 Feb 2010 2:43 pm – [in response to a bearish comment] “Dripping with naivety . If you can’t see that the Vancouver market has changed enormously in the past ten years then you’ve been living under a rock. In another ten years this city might be the most expensive and desirable place to live in the world.”

Alum at vancouvercondo.info 10 Mar 2010 9:34 am – “Go Vancouver RE……Go….!” [a reference to Olympic cheerleading; possibly intended as sarcasm; representative of current bullish sentiment and belief nonetheless]

Anonymous at vancouvercondo.info 11 Mar 2010 3:41 pm – [in response to a renter who enjoys the freedom that comes without a mortgage] “Hey, be sure to enjoy your “freedom” on the streets when you retire, and have no home of your own. Life is not easy, and sometimes it requires commitments like home ownership to get ahead.”

Vancouver Rocks at greaterfool.ca 12 Mar 2010 5:01 pm – “Those that sat out during the run up will NEVER EVER EVER get a chance to buy at pre-boom prices (2002).”

eyesthebye at RE Talks 18 Mar 2010 8:07 am – “As I’ve said many times before – rental yields, growth charts, graphs, pie charts, etc. mean nothing – what matters is demand. And if folks can scatch and claw their way to be able to own a piece of this paradise they will. Too bad for you.”

arpakdel at RE Talks 24 Mar 2010 11:05 am[This post, intended as intense sarcasm, may, perversely, end up being a literally accurate prediction! -vreaa] “Here is a wild WILD WILD thought… maybe they just bought a home for their growing family to enjoy and build memories in for many years to come in one of the best neighborhoods in one of the greatest cities in the world. But naaaah, that can’t possibly be. They must be greater fool first time buyers buying into the hype that owning a home has intangible value and they must be insanely over extending themselves, and it is only a matter of time that they whole world comes crashing down and they will be sad pathetic home owners that will regret their decision forever and will long for a time machine to turn back time so they could have a second chance to take the advice of renters.”

Johnny Horton at RE Talks 30 Mar 2010 9:56 am & 4:27 pm – “Yes, we all know the story about the kid who kept crying “wolf” when there was none. Then one day there was one and when he cried “wolf”, nobody came. The boy got eaten up. Or how about the story of the broken watch. It’s right two times a day. You Be :twisted: rs are long overdue to be right. Maybe this time? :mrgreen:” … “[I] can’t get over how fcuking stupid some of you Be :twisted: rs are. I don’t know which is greater your stupidity or your sourness. Both are pretty sizeable. :mrgreen:

eyesthebye at RE Talks 8 Apr 2010 9:21 am – “I’ve gained 130K in equity in the past year. The true cost of renting is what you don’t gain, not your monthly savings on the net difference from renting vs owning.” & at 9:44 am “I can access my equity anytime I want.” & at 6:33 pm “The “numbers” in Vancouver will never make sense”… “I’d be surprised if any accountant bought a SFH in Vancouver post 2006″ & 9 Apr 2010 9:22 am – “Using these numbers (rent:price ratios, median incomes:price, etc.) to justify your purchase will make a lifetime renter out of you.”

Johnny Horton at RE Talks 13 Apr 2010 8:44 am – “We are in a huge bubble. Probably for at least the last 40 or so years. So what? :mrgreen:

Anonymous at robchipman.net 14 Apr 2010 9:30 pm – “renters are at the bottom of lifes foodchain   suck it up losers”

silverman at RE Talks 15 Apr 2010 9:19 am – [with sarcasm] “Yup… nobody is smarter than a basement suite dweller waiting for the market to go down 40%.”

eyesthebye at RE Talks 24 Apr 2010 9:15 am – [regarding David Rosenberg being bearish on Canadian RE] “I don’t think he has a grasp on how real estate works here in Vancouver. And I’m talking about detached, not condo or TH. There is not much product in the SFH segment since land is scarce. Vancouver (west side and east) in a very small city in terms of area. The “haves” play “keepaway” with the “have-nots”…that is to say, investors have a large pool of renters and are therefore not obliged to sell when prices begin to turn. Rosenberg lived in the US for many years and has probably never stepped foot in Vancouver.”

JimTan at Housing Analysis 1 May 2010 11:32 pm – “We now know that Canada is not like the States. Canadian and Vancouver RE followed a different trajectory. The bubble enthusiasts were 180 degrees wrong. … The cause for a bubble was missing. Players in Canada (and Vancouver) worked with public information that was adequate. They knew the risks. They did their numbers. Unlike the States, there was lack of panic and momentum. The market was information efficient and RE was correctly priced for the context.

Jack NoSourGrapes at macleans.ca 26 Apr 2010“Look, we are sorry you aren’t able to afford a house in Vancouver. There are people in cities all over the world that can’t afford to own there, so deal with it and move on.”

silverman [a realtor] at RE Talks 10 May 2010 10:21 am – [In response to a bear mentioning 35%-45% price drops] “Sorry, but you have a severe case of wishful thinking. There ain’t gonna be a 35% – 45% drop unless a 30′s depression, or 80′s inflation of 20% causing the doubling or tripling of interest rates, happen. What you will see in the near future, is a flat market in BC with a possible correction of no more than 5%. If a shortage materializes, then we could have some modest gains.”

Rob Chipman [a realtor] at robchipman.net 17 May 2010 3:00 am – “I don’t see big storm clouds on the horizon for this local market. Price growth may stall, or even drop, but no crash.”

silverman at vancouvercondo.info 28 May 2010 12:10 pm“You will have a hell of a time convincing a seller to accept less than what he paid.”

eyesthebye at RE Talks 12 Aug 2009 6:03 pm as cited by eyesthebye at RE Talks 20 Jun 2010 11:49 am“One thing is damn sure about price direction. There is now no way there will be a major crash in Vancouver. What is happening with the market now has made a crash impossible. After fence-sitters and market-timers were burned expecting a big bust, got a 15% correction followed by another run up, what do you think the odds are that they’ll miss the boat next time? I’m betting they jump in at less than a 10% reduction due to itchy trigger finger syndrome.”

eyesthebye at RE Talks 20 Jun 2010 8:35 pm“If simple earning were the only reason why properties are priced where they are you could definitely say the values are out to lunch – yet there’s more at work here in Vancouver, ain’t there? Foreign money, bank of Mom and Dad, wealthy retirees, etc. None of which has anything to do with the annual earnings:price calculation. Sorry bears, no grade school calculation is available for prices in this city.”

Austin at RE Talks 25 Jun 2010 10:21 am – “I think anything across the bridges, viaduct, or past 0 hastings and still on the south shore (ie, downtown) is becoming comparable to Manhattan.  In fact, I think it’s pretty reasonable to say, downtown Vancouver is the Manhattan of Canada.”

Tracie McTavish, president of Rennie Marketing Systems, quoted in Businessweek, 24 Jun 2010 - “Real estate is like a sport here.” [An outrageous comment, when you come to think of it. What's next? Government sponsored food-fights? -ed.]

vanreal at RETalks 17 Jul 2010 6:07 pm“Without a house you have no leverage to borrow more money if you need it. The banks will only lend significant sums to people with some form of security. Renting will destine you to a life of poverty. It is fine if you are young but you should get into the market asap. I bought in 1990 for 150,000 and my house is now worth over 1,000,000.”

eyesthebye at RE Talks 23 Jul 2010 9:54 am“Since real estate mostly goes up, and is almost always close to peak, it’s not risky at all whatever time you sell. The only risk when selling is not getting back in fast enough and letting the market and your affordability get away on you.”

vanreal at RETalks 1 Aug 2010 9:42 pm – “Everyone keeps talking about how the fundamentals don’t support the 1st time buyer affording anything on an average household income of 60,000 but there are many many properties that the first time buyer can afford in the suburbs. Burnaby, Coquitlam, New West and Richmond all have apartments both 1 and 2 bedroom below 250,000 dollars. That is certainly affordable for an average family. It just cant be a single family house in the city. That ship has sailed.”

eyesthebye at RE Talks 29 Aug 2010 8:46 am & 9:09 am – “I believe that a 6% appreciation/year is entirely likely. Prices will be up 30-40% from today in 2015.”

eyesthebye at RE Talks 2 Nov 2010 9:49 am – “This is [a] common bear miscalculation – that rental prices need to be related to home prices. Calculating the cost of renting compared to owning will make you a renter for the rest of your life.”

Chris Davies, REIN member, ‘Bubble Blogging = Masturbation’ at chrisdavies.ca, 3 Nov 2010 – “Guys like Don [Campbell] and I don’t care if prices go up or down, or sideways.”

Larry Yatkowsky, realtor, as archived at VREAA 16 Nov 2010“You have to take a deep breath and realize that the world you thought you knew is not as it appears. You must understand and accept that there is untold wealth that exists within our city. A paltry $2.5 mil is chump change. What we are experiencing now is only a beginning.”

eyesthebye at RE Talks 16 Nov 2010 8:22pm[On the effects of falling stock and commodity prices on RE] “If anything, investors will give up on the market and pour their money into a proper investment – real estate.”

eyesthebye at RE Talks 6 Dec 2010 11:17am – [Describes own purchase in early 2009 and shows alternative they 'passed on' ] “I’ve taken the liberty of posting the listing – mostly because I want to show the bears the kind of prices they’ll never see again when they passed up a golden buying opportunity in early 2009.”

eyesthebye at RE Talks 16 Dec 2010 9:34am – “Chinese investment in Vancouver … will last at least another three years due to the estimated backlog of investor class immigrant applications. This will probably be long enough to send Vancouver real estate to the moon without enough fuel to make it all the way back to earth.”

TheBestPlaceOnEarth at greaterfool.ca 20 Dec 2010 4:21am“Richmond is on friggin fire folks. Over 50% Asian investors and growing. House after house after house, we’re talking in the 100′s maybe 1000′s being bought bulldozed with a monster home put on top. No joke here Lamborghini’s with the N (New driver) sticker on them. Please come down to Richmond for a site visit you won’t believe it. Make no mistake about it these are cash deals NO MORTGAGE. God I love this place just plain unstoppable. The creme de la crem GOD ITS GREAT. Goin higher too! Love IT.” and more at 4:25am“If your talking you took 50 grand downpayment on that potential winner house in Richmond and bought a portfolio at a one time [gain] of 13% your looking at 6500 bucks. FOLKS DO THE MATH. Richmond house make you over 12 times the amount. WAKE UP NOW. STOP IT. Grow up and BUY. Do the math.For God’s Sake.”

eyesthebye at RE Talks 24 Dec 2010 8:33am – “I doubt Vancouver real estate will even correct more than 10% at any point in the future.” and 2:54pm – “To call Vancouver real estate a “bubble” is to say that it will one day burst. And to burst you’ll need sellers at much lower prices – I don’t see that happening. Sellers here take their homes off the market rather than discount. Hasn’t history taught you this?”

Exquisite Malevolence – Vancouver RE Bull Uses ‘It’s A Wonderful Life’ Quotes To Torture Bears On Xmas Day at VREAA 26 Dec 2010

“It’s hard to find a reputable analyst who predicts anything other than mild fluctuations in housing over the coming year or two. … Unlike stocks or commodities, homes are an asset that’s resistant to big drops in value.” [In same article concern about a bubble called 'hysteria' and 'hare-brained'.] - Jay Bryan, Montreal Gazette, 30 Dec 2010

“Sellers have spoken loudly many times recently…they WILL NOT give back the equity gained on their homes; they will simply take them off the market.”eyesthebye at RE Talks, 13 Jan 2011, 12:00pm

“Since I bought my home my “income” has been 40% from my job and 60% from housing appreciation. When I sell this is tax free money. Go ahead and rent forever.”L8erDude at yattermatters.com February 2nd, 2011 1:18 pm

[Addressing a bear who frequently discusses fundamentals]: “Your analysis and charts can be worshiped every where else on the planet. But Vancouver is your Waterloo. You should have known this by now. Vancouver RE is a totally different game.”unicas at RE Talks, 20 Feb 2011 5:19pm

[In response to: "I can't believe the type of money being thrown around on the West side. I don't even think the most bullish people foresaw these type of sales."]: “I think the bulls always knew it was possible. We all saw Vancouver as the best place to live in the world and foresaw more and more international money coming here. That said, I admit I’m stunned at the prices. I think the bears analysis was per usual…wrong.”eyesthebye at RE Talks 28 Feb 2011 2:52pm

“With sales remaining very strong and listings at a mere trickle, I think we’re about to see a 5 month price explosion on SFH like you’ve never seen before in this city.”eyesthebye at RE Talks 22 Mar 2011 10:40am

“Prices on detached are still too low. Detached is still about half of what it should be.”eyesthebye at RE Talks 29 Mar 2011 12:40pm

“If you don’t own your place Vancouver is not kind – can’t you tell by the sheer quantity of grumpy bears? For those of us that do, we consider Vancouver to be a paradise.”eyesthebye at RE Talks 6 Apr 2011 10:51am

“..the circle that I know continue to move on with their lives. They buy detached homes, start having kids, take promotions at their jobs, etc. These are young people in their 30′s who are born and raised Vancouverites, unlike most of the posters here.
Posters here live on the fringes of our society. The people I know are as disconnected with posters here as they are the addicts at Main/Hastings. You people are basically shadows to us.”
Rusty at VREAA 7 Jun 2011 8:24am

“When you start a family you buy a home.” … “If you don’t get the premise it’s because you don’t have children. And if you do have children and you don’t get it then you never should have entered into parenthood.”rusty at VREAA 1 July 2011 10:16am and 11:46am

“Would you care to make a wager on these predictions?
Any stake you’re comfortable with – as high as you want to go…I think I can cover it lol.”
“I want you to put the cash in my hand – so I can grin at you like a cheshire cat.”

- Rusty, in two posts at VREAA, 26 July 2011, attempting to set up a bet with vreaa regarding future price action. [Rusty doesn't believe a price crash is possible, or that a Vancouver RE bear could put up a bet that he couldn't cover.]

vanpro: “Vancouver homes are 3-4 TIMES the price of [comparable] Seattle homes. Median price of all homes in Seattle = US$340k = CDN$327k.”
jimtan: “So, move to Seattle. You’re be doing us a big favour.”

- exchange at RE Talks, 26 Jul 2011

“40,000 new residents in the GVRD each year. Why don’t you tell me if prices will be higher or lower in 5, 10 or 15 years?
Yes, inflation will always win. Haven’t you learned anything yet? People with homes are the ruling class…it’s always been this way (anywhere in the world), expecting it to change is idiotic.”
– Rusty, on a roll, at VREAA, 27 July 2011 12:31pm

“Here’s the recipe: gradually add 100K people to Vancouver, bake 15 years, sprinkle with development policy that reduces the # of detached dwellings…serve up a housing cost that doubles each 8-10 years. Go ahead and keep renting for the next 20 years. That’s a recipe that serves up a very sour tasting housing position.”  – rusty, at VREAA, 31 July 2011 6:12pm

“Chance of price collapse in property prices = nil.
You might get short and shallow correction like 2008 but that’s it.”

“Won’t ever see ['a solid 12 months of price declines'] in this city. Best bet maybe two seasons worth.”rusty, at VREAA, 1 Aug 2011 4:53pm& 5:21pm

[Addressing a renter] “Your savings will never keep up with the pace of property appreciation. Each year you wait is a year further you get from home ownership. Has history taught you nothing? If you’re happy being a lifelong renter or having to move out of Vancouver when you want to buy then continue to rent. Sounds like you’d have a nice lifestyle without owning – but you put your child at a distinct competitive disadvantage to a homewoners child.”Rusty at VREAA, 5 Aug 2011 10:19am

“Fear of debt is what keeps mosts of these bears from every taking on a mortgage.
The bold own homes, the bashful don’t
No risk = no reward”eyesthebye, RE Talks, 10 Sep 2011 4:11pm

An emotion related to hubris: Tamara Taggart demonstrating the excitable frisson that many owners of appreciating homes in BC demonstrate for the sport of Real Estate [VREAA, 28 Sep 2011]

“My instinct tells me that we’ll be able to weather whatever market storms come our way.”Kevin Vallely, a ‘residential designer in North Vancouver’, North Shore News, 28 Sep 2011

“I do not see this trend of rising house prices in Vancouver to end until this in-migration stops .. likely not until 2050.”Thomas Beyer, President, Prestigious Properties Group”
- RE Talks, 21 Sep 2011 3:22pm [cited at VREAA 24 Sep 2011]

VANHATTAN‘BC Homes Magazine’, Aug/Sep 2011 cover

“Do you think anyone cares that you’re priced out while others are still in the game? This is human competition at it’s basic level. Vancouver is for the strong, the fit; this city separates the wheat from the chaff.”
- Hardy at VREAA 8 Oct 2011

“There will be a day when you remember these days as an excellent buying opportunity.”

- formula1 at VREAA 7 Dec 2011 9:10pm

“I don’t think there is any sign anywhere from people on the ground in Canada that foresees the bubble. Economists predicting a collapse in Canada have been wrong for years; my prediction is that they’re going to be permanently wrong.”
- Gerald Soloway, Chairman and Chief Executive Officer, Home Capital, Bloomberg, 20 Apr 2012

“The idea of 40% price drops is farcical.”
- Robert McLister, mortgage broker, Bloomberg, 15 May 2012

“People come to town and say it is a bubble, but what do they know?”
- Bob Rennie, The Province, 24 Aug 2012

“Most homes here are bought by people with wealth. They can afford to hang on and wait for better market conditions, so it makes sense that listings are getting pulled. Conventional house price economic responses are more applicable to cities like Calgary and Edmonton. The rich are not the same as most people, otherwise Vancouver’s prices would never have risen so far above average household incomes in the first place.”
- ThinkRight commenting at Financial Post 4 Dec 2012

A Gentle Bull: “Maybe I’m just trying to reassure myself that it’s OK to own a very small piece of paradise, as I do.”

This from MikeOnTheMic at greaterfool.ca 23 Jan 2010 1:47 pm -

“As a life-long Vancouverite, I agree that RE prices here are not realistic. When would you all think that we started to exceed realistic prices? In the early 2000’s? Anyways, I’m hoping that we get back to realistic RE pricing at some point over the next few years. Maybe with what’s going on in the markets this past week we will see the start of a return to RE sanity soon.

On the other hand, I am a bit puzzled by the consistently pejorative terms and connotations I often read here [greaterfool.ca] when it comes to describing Vancouver and the implication that RE ownership here is crazy (current unrealistic prices notwithstanding). It was 15C and sunny here yesterday. The cherry blossoms are starting to come out, as they usually do on the West Coast at this time of the year. You can start your day-off driving 20 minutes out of town to go snowboarding all morning and then grab lunch on the way to the beach and windsurf / kitesurf all afternoon.

I have a neighbor who works in Korea full time so that his wife and kids can live here. He visits twice a year for a week at a time. He says that it is a dream for him to have his family live here because his kids’ prospects are so much better. This is not uncommon.

I grew up here and lived through the 1980’s influx of families from SE Asia, many of whom were able to purchase expensive RE. Having travelled to many places in Asia and experiencing first-hand the quality of life in that part of the world, it is no surprise to me that people are still flocking to our shores. As their economies improve, the upwardly mobile should increase in number and many will likely look to follow their emigrated friends and family.

I’ve lived on the East Coast through brutal winters and snow / ice storms through until May-June. A lot of people I knew out there were either dreaming about or planning to move out West at some point.

I’ve had friends visit from Europe who can’t believe the relatively low cost of living here when it comes to basic things like groceries, gas, utilities, etc…

Some posters here have compared Vancouver / Victoria lifestyle / RE / economic issues with those in the SF Bay area – fair enough – but we’ve got free health care and less random crime (OK – crime in Vancouver is a problem, but have you been to Oakland?).

Aside from stupid RE prices right now, I guess one other downside is the earthquake risk here, but if anyone is really worried about that, you could always bury a school bus and use it as an underground bünkerhaus. Not much of a view, but you might get some geothermal heat for free :)

Maybe I’m just trying to reassure myself that it’s OK to own a very small piece of paradise here, as I do. I agree that there is a huge need for folks to ponder the emotion that colours these considerations. Thanks to your advice Garth, I’ll try to ensure that my RE risk is not at foolish levels. Maybe I’m just a local guy who loves living here and thinks that the place gets a bit of a raw deal on this blog, all b/c RE is currently over-priced. But hey, don’t you know that it rains all the time in Vancouver? Who would want to live there anyway? Peace.”

Bull Hubris?… Or Appropriate Owner Confidence? – “My property got assessed 20% higher than last year! Wooooohooo! I’m going to refinance for another house while you cry-babies live in the dumpsters.”

Vancouver RE owners offer up few descriptive personal anecdotes on the sites that we monitor, despite the fact that we’d like to record such stories here. Very few people who are owners/investors/speculators seem to want to describe their situations. This contrasts with the fair number of renters/prospective_buyers who seem quite willing to share their metrics. Are the owners embarrassed by profits? Or shamed by debt? Or concerned about privacy? Or underrepresented on RE forums? … Owners do, however, quite readily offer up opinions and advice about the Vancouver RE market. The price levels of July 2008 have been regained [Jan 2010]. Owners have been voicing more and more confidence on RE forums. Any statements obviously have to be seen in the context of the kinds of exchanges that occur on such forums, as they are often part of playful or jibing banter, but they nonetheless do reflect an aspect of owner attitude. For the record, some such statements are archived and referenced below. If there are any owners who would like to share specific anonymous stories of their gains and holdings, or how RE has changed their lives, please e-mail them to us and we’ll headline them. -vreaa

sideliner at robchipman.net 4 Jan 2010 12:45 pm“The market has been unstoppable for over 8 years now.  Nothing will change.  That time frame shows you how strong the market is.  A minor pullback here or there, 5 or 10% means nothing.  The average person is priced out and always will be.”

EconomicBoom2010 at vancouvercondo.info 5 jan 2010 12:22 pm – “My property got assessed 20% higher than last year! Wooooohooo! I’m going to refinance for another house while you cry-babies live in the dumpsters.”

eyesthebye RE Talks 30 Dec 2009 9:23 am“Bears haven’t said ‘uncle’ yet so I’ll keep twisting the screws”. (With an end-of-post signature that reads): “the cure for higher prices is moving to a destination with lower prices”. [This poster is one who has been generous about sharing specifics. They purchased a SFH in early 2009 which is now up 170K in market value (owner's estimate), for a 300% gain in equity in 11 months (consider the down-payment as initial equity).]

Johnny Horton RE Talks 1 Jan 2010 8:28 pm – (In reference to a non-owner) “…a severe case of Landless Serf Syndrome.” and 11:06 pm“Vancouver is the best place on Earth.” and 7 Jan 2010 11:44 am – “Don’t worry, when you pass the real estate course, you’ll be out of the in-laws basement in no time.”

mike at yattermatters.com 1 Jan 2010 10:56 pm“Do you bears ever get tired of being so disgustingly wrong? Give up already.”

jimtan RE Talks 1 Jan 2010 11:05 am“We have been over all this stuff time and again. And, the bears have been wrong. What’s the point of bringing it up again? You’ve got nothing new to add.”

Vancouver Rocks at greaterfool.ca 4 Jan 2010 3:50 pm – “Just a history lesson for all the young’uns – prices may rise, and dip, but in Vancouver they maintain their trajectory ever upwards.”

VanLoverBoy at vancouvercondo.info 7 Jan 2010 3:10 pm and 3:56 pm - “I’ve got a word of advice for you: M_O_V_E”… “I’m sure from your cheery disposition you’ve got to be one of the renters who has missed the boat. Too bad. Go start out somewhere better, like Africa, MiddleEast or one of those other notasgoodasvancouvermiddleofbumf—nowhere places you’re in love with.”

silverman at RE Talks 4 Jan 2010 1:30 pm (in response to a post from ‘dot com refugee’ that “We have seen that RE bubbles pop on their own, even with low interest rates. Please see Vegas, San Fran, NYC, Arizona, Miami, Dubai, London, etc etc etc etc etc.”) – “You forgot Istanbul and Timbuctu… Please see B.C.

Steinbock at RE Talks 6 Jan 2010 10:25 pm“Bears are only good at crapping in the wrong spots. Hence the smell in some basements.”

Lastly, these two very trollish and vitriolic posts from someone who calls himself ‘richasian’ (and who is quite probably neither rich nor asian) on vancouvercondo.info 2 Jan 2010 at 2:54 pm and 6:04 pm - “Happy new year you scum sucking renters!!!!!!! I hope 2010 brings continued misery as you watch from the sidelines in your crappy rental! Maybe this year you’ll finally come to grips with your financial situation.” … “Put your fingers in your ears and say na na na na when everyone is saying that real estate only goes up. Continue to drown your sorrow in the pubs downtown you sick little losers. Meanwhile I cash your rent cheque and head to Vegas for some gambling. It’s fun being a winner. How is it being a loser… bears?”