Tag Archives: Realtors

Some Nice Logic For You – “The realtor told me “It’s a great time to buy right now, people are looking around and realizing that prices are going down and interest rates are still low!”

“We checked out two condo open houses at the H&H building (1133 Homer) today. We liked one that was 950 sq ft, 2 bed, 2 bath, storage room, decent little patio, great kitchen with high-end appliances, in-suite washer/dryer (a very big selling point for the better half). The building’s new and has some nice amenities. Price was $620K. The realtor told me “It’s a great time to buy right now, people are looking around and realizing that prices are going down and interest rates are still low!”
So that’s some nice logic for you. Massive price decrease risk, with higher interest rates at renewal time a near certainty (assuming locked in as long as possible). It’s interesting that a realtor is acknowledging prices have gone down, I wasn’t aware that was the case with Yaletown condos. I didn’t mention a thing, she was the one who brought it up, and I didn’t bother arguing with her. I like the place, might have bought it if it was $250K cheaper.”

Kermodei at VREAA 27 May 2012 5;20pm

“He showed her how, using his hand like an airplane, the real estate market would go down by 5%. Then, plane angling up, it would go back up again and that at the end of 10 years it would not lose any money.”

“We went to a Chinese restaurant near Main St. and who was booming real estate advice to a middle-aged woman but this crazy realtor. He showed her how, using his hand like an airplane, the real estate market would go down by 5%. Then, plane angling up, it would go back up again and that at the end of 10 years it would not lose any money. (Why again are stock brokers forbidden from making similar comments on the market but RE agents aren’t?)
He then tried to sell her on a condo downtown telling her there were good deals there as prices were down (dunno… maybe part of the predicted 5% dip). Then, she said something, we couldn’t hear, and next thing you know he said condos would go nowhere for the foreseeable future and they weren’t a good deal, a way to lose money. The best deal now was a house with a yard. Eventually I had to drown him out by putting my chopsticks in my ears. I don’t know how I managed to digest dinner.”

mac at VCI 23 May 2012 10:12pm

Realtors are salespeople, and are unwise to be making predictions about market direction.
What if clients took them to task on these predictions later?
– vreaa

Global TV; CMHC; Sommerville; Pastrick – “No Bubble” – “We don’t have a sort of financial environment where people are looking at major financial corrections”.

Announcer: “Is the Canadian housing market a bubble ready to burst, or is it steady as she goes? Finance Minister Jim Flaherty is warning Canadians against taking too much debt against the value of their homes, but the latest report from the Canadian Mortgage and Housing Corporation is dismissing those fears saying there is no clear evidence of a real estate bubble.”

Tsur Sommerville: “There is clearly a slowing down in the market you see an increase in the number of listings, drop in sales, all things that create less pressure on the market.”

Announcer: “According to the Real Estate Board of Greater Vancouver home sales were down 19% compared with this time last year.”

Helmut Pastrick: “The comparison to last year was heavily influenced by the change in the federal government’s mortgage insurance criteria which pulled forward a large number of sales into early 2011. So we’re comparing that high point to activity so far this year.”

Announcer: “But don’t get too excited, even though sales are down, home price indexes show a 4% increase in the price of a home in greater Vancouver. … The message to buyers, the economy is in reasonable shape, there’s a lot of supplier there, and interest rates are low. So just because sales are slumping don’t bank on prices doing the same.”

Tsur Sommerville: “We don’t have a sort of financial environment where people are looking at major financial corrections, you know, double digit increase in interest rates, or, you know, huge tightening of liquidity, that just doesn’t seem to be on the horizon, you know, to expect across-the-board 10%, 15%, 20% drop in house prices, I think that being rather, er, hopeful, for a buyer to expect that.”

– from ‘No Bubble In Vancouver Real Estate’, Global TV, 16 May 2012
[hat-tip, and thanks as usual for the video archive, to Greenhorn.]

OK, predictions noted, for the record, namely:
1. Price drops of 10% or more are not to be expected.
2. Tightening of liquidity doesn’t appear to be on the horizon.
3. Again, No bubble.
We believe that the price strength predictions are extremely overly bullish, given the internal market action, and the national and global economic climate.

BTW, when Sommerville says “double digit increases in interest rates”, what does he mean exactly by that phrase?
Does he mean interest rates increasing to double digits or by double digits? – there is a massive difference.
Nobody, but nobody, is predicting the former: In fact, if we thought there was a chance of interest rates increasing to “double digits” we’d change our price predictions from 50%-66% off to 80% off. So, if Sommerville was implying that bears are predicting interest rates of 10% or more, he was just trying to make critics look foolish.
If interest rates rise by double digits, for instance from 3% to 3.3% (an increase of 10%), well, even such a small increase may be enough to speed a price descent.
– vreaa

Unrealistic Expectations Everywhere – “Robson is like Rodeo Drive, it’s like Park Avenue” (But 20 Stores Sit Vacant)


Robson Street, circa 1974

“From the departed HMV to the bankrupt Blockbuster, empty stores dot Vancouver’s highest profile commercial street. West of Burrard, more than 20 retail properties on Robson sit empty. And realtors have taken note.
“For years you’ve never seen lease signs up and down Robson,” said Sherman Scott, associate vice-president at Colliers International, which currently has a number of properties open.
“Now there certainly are, which is unusual.”
Tourism Vancouver President Rick Antonson characterized the vacancies as part of a “transition” but he is bullish on the street’s long-term vibrancy.
“Some international operators can anchor a street and draw traffic. What one always wishes to avoid is a generic street or city. [But] Robson street will get through this transition and retain its reputation as having a healthy variety of retail outlets.”
Following the 2010 Olympics, prices climbed to new heights on Robson. According to one real estate report, the average rent last year was $240 US per square foot, trailing only Bloor Street in Toronto for Canadian supremacy.
“Expectations are changing on Robson. The value of real estate has increased,” said Mark Renzoni, managing director of CB Richard Ellis.
He did, however, admit “the economy is not as strong as we’d like.”

“I think you’re going to see a lot more American retailers moving in,” speculated Howard Malachy of DTZ Barnicke, which specializes in commercial real estate.
“Robson is like Rodeo Drive, it’s like Park Avenue. People want to be there to be there.”
–  from ‘More than 20 vacancy signs as Vancouver’s Robson Street undergoes ‘transition’ – Justin McElroy, The Province, 1 May 2012 [Image from Vancouver archives; hat-tip Nemesis]

We find the logic being used by the landlords bizarre and perverse.
They do not ask the question “What will the market bear?” but rather state, based on beliefs and not evidence: “Robson is like Rodeo Drive, it’s like Park Avenue”, and they then set accordingly unrealistically high rents. Unsurprisingly, their properties are sitting vacant.
Are there 20 stores sitting vacant on Rodeo Drive? Even in the midst of considerable economic hardship, no.
The logic is reminiscent of that heard in a recent CBC radio discussion about the closing of the Playhouse Theatre. The argument used by discussants was “Vancouver is a world-class city, it should have a very vibrant theatre scene”. No one asks “Vancouver does not have a spontaneously very vibrant theatre scene, is it really the ‘World Class City’ we imagine it to be?”
As we all know here on the Vancouver RE blogs, a similar unrealistic mindset has contributed to residential property prices that spiral ever upwards; a reconciliation with reality is coming.
Vancouver is a fine city, in many, many ways, and it’ll be that much finer when we see it for what it is, rather than for what some wish it to be.
– vreaa

“Had a conversation with a Realtor today. She told me things were “really slow” for this time of year and that the market was “dead”.”

“Had a conversation with a Realtor today. She told me things were “really slow” for this time of year and that the market was “dead”. She sells mainly on the West Side and mainly to Chinese buyers. [But] she also said she’d seen a slight increase in activity over the last couple of weeks so, who knows, maybe we’ll have another year of insanity. In any case it certainly seems to be a difficult time to be a Realtor.
On a related note my previously bullish colleague (“HAM! Running out of land! Everyone wants to live here!”) has started making bearish comments and now believes prices will go down over the next year. He thinks it’ll only be a 5% drop but I was surprised how fast he changed his opinion.”

Bally at VREAA 23 Apr 2012 1:16pm

You Go, Girl! – “She was ready to start climbing the property ladder and he wasn’t. She hopes women have the courage to leap confidently into homeownership. Work within the budget (she laughs).”

“I have a single friend sitting on the fence between buying and renting. She’s financially ready to make the leap into homeownership, but hesitant about doing it solo in case she meets someone soon.
Waiting for Mr. Right can derail a number of women’s homeownership plans, according to Sandra Rinomato, a realtor and owner of a full-service brokerage in Toronto.
“I can’t tell you how many times a client asks what she’ll do if Mr. Right comes along, and I always say if he does, then okay, you can keep the investment in your portfolio and rent it, he can move in, or you sell it and take the equity,” she says. She speaks from personal experience, having at one point purchased property on her own while in a serious relationship. She was ready to start climbing the property ladder and he wasn’t.

More and more single women are entering the market, making up roughly one in four new buyers, according to Ms. Rinomato, who is currently hosting the new HGTV series, Buy Herself, focused on helping singles navigate the world of real estate.

“If I could pull a rabbit out of a hat I would, but we work within the budget,” laughs Ms. Rinomato. Searching outside your financial scope can derail the process, or financially stretch you further than you should be if you fall in love with something a few rungs out of your reach on the property ladder.
Aside from down payment, monthly mortgage costs, and emergency funds for the unexpected, it’s your responsibility to have a grasp on the countless other costs associated with buying your first place, like inspection, legal, and appraisal fees.

Ms. Rinomato says it’s not unusual for solo buyers to have unrealistic requirements. … A strong team in your corner is also essential for a first-time buyer, and an understanding of the steps of buying, and how to will help you make the right investment decision. … She hopes her new TV series inspires women to at least ask if this is the right time to buy and not to hold back because they’re scared, or don’t think it’s an option, or think Mr. Right is around the corner. More importantly, she hopes women have the courage to leap confidently into homeownership if the time and the investment is right.

‘Finding the right home, with or without Mr. Right’, Angela Self, G&M, 20 Apr 2012 Angela Self is “one of the founders of the Smart Cookies money group and writes a weekly column on managing debt and saving money at the Globe and Mail”.
[hat-tip theragingranter]

Careful feminist analysis of the article would be appreciated; any takers?
“A strong team in your corner is essential for a first-time buyer”: let’s guess… a realtor and a mortgage broker, right?
– vreaa

From the comment section of the G&M article:

“Is anyone else amused by the fact that a show enticing single women to buy into the very peak of the condo bubble, and thus committing financial suicide, is being marketed as “female empowerment”? I’m thinking it’s time to short Lululemon stock. … In a few years HGTV can do a follow-up program called “Sell Herself”. That’s what many of these women will be doing in order to hang onto their negative equity condos.” – Alistair McLaughlin

Five Hundred $25 Gift Cards Will Generate Media Buzz For Richmond Condo Project!!!


– image via e-mail from Aldus Huxtable, who adds:
“Through the letter box today, looks like Rennie has heeded the criticism and is offering $25 gift cards to Richmond Centre for the first 500 people who show up on the pre-sale day……”

It’ll be an interesting promo to watch.
Will the weak Richmond SFH sales, down 60% YOY, affect a project such as this one?
Will Global TV do an uncritical promo piece, again? (Or have they learnt from recent experience?)
Will buyers each buy an average of 3 units? (As per Marine Gateway?)
Thanks, Aldus Huxtable.
– vreaa

[Aldus Huxtable… didn’t he write ‘Brave New Best Place On Earth’? -ed.]

Peppy Ads – “Buying a Home Is Like A Sport. Meet Your Coach. Win The Real Estate Game.”




Screen captures of banner web-ads displayed at The Vancouver Courier website, 14 Apr 2012

Reminiscent of:
“Real estate is like a sport here.”
– Tracie McTavish, president of Rennie Marketing Systems, quoted in Businessweek, 24 Jun 2010
“At a certain level, in Vancouver, real estate is a sport.”
– Bob Rennie, CKNW 980AM, Vancouver Radio, 9am Friday 16 Mar 2012

Yeah, ‘Coach’, RE is a ‘sport’, and when the ‘game’ gets ugly, we’ll stop using these playful metaphors for what is a very serious business.
Try selling RE, or RE related services, using these slogans in Ireland or Spain.
– vreaa

Spot The Speculators #79 – “I have 2 RE agents in my extended family who have been flipping for about 7 years and they are both multi-millionaires on paper. They are completely leveraged to the hilt.”

“I am no realtor but I can guess that many of you can see the “gold rush” mentatlity of the last few years in Vancouver is a temporary blip – some people will make a fortune and those who came too late will be left with a bum claim. I think realistic numbers and a price correction is actually very healthy for the long-term health of RE in Van and surrounding areas. I am bearish on RE but unlike many others, I do not want to see a crash – that will wipe out too many families and destroy the economy. I do want to see some flippers get burned badly, and I want regular Vancouverites to be able to afford a home (with sacrifice and due to hard work). Unfortunately I have 2 RE agents in my extended family who have been doing this for about 7 years and they are both multi-millionaires on paper, by this I mean they are completely leveraged to the hilt. It is a tops-turvey bizarro world where a RE agent makes more than a surgeon selling “nothing special” or even teardown bungalows, and makes millions flipping a half-dozen presale condos with “creative” financing.”
Leben at yattermatterc.com 2 Apr 2012 10:59am

Renting Realtor Wants Renter To Buy – “He went on at me about how he can’t stand to see me throwing my money away on rent and that my wife and I need to get ourselves into a little “fixer upper” in the North Shore. Funny thing – he rents – thinks it’s great.”

“My realtor called me a couple of days ago. He does not appreciate the extent of my knowledge about the market, finance, economics, global capital flows, credit markets, asset inflation, leverage, oh – – and the concepts of net present value. He also has probably never read a real estate blog. …
He basically went on at me for about 30 minutes about how he can’t stand to see me throwing my money away on rent and that my wife and I need to get ourselves into a little “fixer upper” in the north shore. There are so many you can get for under a million. He went on to give me all the realtor speak – – – But I do not argue because it’s not possible. Funny thing – he rents – thinks it’s great. Also said HAM not here any more – things are dead. Very difficult to move a house in Richmond right now and mid to high end not really selling. This must be a bad sign because he has never admitted such. Even 5 months ago things were as “busy as ever” even while stats would show otherwise.
This city is delusional and to use a partial quote from the recently departed Goldman exec . . “A visitor from Mars . . . . would wonder if we practice some type of voodoo economics in Vancouver and the entire city is brainwashed” .”

zrh2yvr at VREAA 14 Mar 2012 7:13am

“We just spent a frustrating week trying to buy one of these expensive houses. Agent would not put in our offer. Said we should offer something “reasonable” when we wanted to go in at the assessed value of the place.”

“We just spent a frustrating week trying to buy one of these expensive houses. Agent would not put in our offer. Said we should offer something “reasonable” when we wanted to go in at the assessed value of the place (tear downer, asbestos, needed repairs).Told us what the seller’s bottom line was. Didn’t like that we had the condition of selling of our condo (suggested we move into a rental so we had “more money”). Then, discussed what we were going to offer when viewing the home with other realtors & buyers present. Welcome to Vancouver. You can’t even put an offer on these overpriced homes as the agents don’t want to see purchase prices come down. Now, we are without an agent, and the house is still for sale. This was almost as bad as being told previously, “don’t even bother putting in a low offer on this place – we just had a busload of Chinese come through and they are extremely interested” (actual quote from realtor). Obviously, to show that home values in Vancouver are not coming down, no sale is better than low sale. Are agents acting in solidarity together? Sure seems like it.”
For Sale But Not To You at VREAA 14 Mar 2012 12:27pm

Realtor Opinion – “These prices are the reality of our city, and the people who “over pay” for their purchases will rest easy knowing that if you buy and hold, property is the safest investment in the world!”

“Things look pretty out of control, that’s a given. As crazy as the market in Vancouver seems, what we have to accept is that any piece of property is worth exactly what someone is willing to pay for it, and not some calculation/forecast made sight-unseen for the purposes of taxation (for example). These prices are the reality of our city, and the people who “over pay” for their purchases will rest easy knowing that if you buy and hold, property is the safest investment in the world!
We can certainly keep shaking our heads at the perceived Madness of the prices paid, or we can try to shake off the feelings of “Wow, this is just nuts! When does it end?”, and get in while a Basement suite is still AFFORDABLE at $589k!
“The end is in sight” doesn’t apply to something that never has an end. There are deals out there that appear better than this one, by almost any measure, so get the deals while we can, because the dreams of those like myself who grew up in Vancouver, of owning property and living our life out here, are only going to get more “Dream” and less “reality” by the day!
Good luck to all land-owning hopefuls!”

– comment at VREAA posted by ‘Adam Janusz, RE/MAX Select Realty’, 13 Mar 2012 11:36am

A Vancouver realtor’s volunteered opinion on the market, circa March 2012.
Archived here for posterity.
– vreaa

Vancouver Realtor Darren – “Here it is Dead. Dead. Dead. March is on pace to have sales down 30% over same month last year.”


[chart care of b5baxter at vancouverpeak.com 8 Mar 2012]

“Here it is dead. Dead. Dead. Remember 2008? It was the year where the spring never came, listings soared and sales evaporated. Vancouver is really trending down that 2008 line right now but stats in all areas are really worse than 2008. March is on pace to have sales down 30% at least over same month last year.”
– Vancouver Realtor ‘Darren’, as quoted at greaterfool.ca 8 Mar 2012

You only die once.
Bubbles too.
Perhaps this is it.
Godot arrives?
– vreaa

‘Well-connected Realtor Source’ – “People now think it’s a bubble and so they are hesitant to buy. The main change now is that people actually think this is over.”

“In Vancouver, for example, listings are running 20% ahead of last year while sales sag by the same amount. Richmond’s sinking. Condos have turned turgid and illiquid. But the real news is what’s being heard on the street.
“People now think it’s a bubble,” our well-connected realtor source reports, “and so they are hesitant to buy. The main change now is that people actually think this is over and the only ones here buying are the few remaining Chinese and those who just can’t avoid a transaction (or whose fortunes do not depend on it). Looking forward to the month-end stats – they will be brutal with (again) only 2009 being worse in the past decade.”
Garth Turner at greaterfool.ca 29 Feb 2012

Ian Watt, Realtor – “I don’t like to do predictions on real estate. I own a few properties, and I’m not selling them anytime soon. My plan is to hold them for the long term.”

“I’m not an economist, I don’t understand any of that, I am very uneducated when it come to the economy, what I do know, though… I don’t like to do predictions on real estate, I’m hired, basically, to market, expose and facilitate a transaction, that’s pretty much it.. that’s all I’m hired for… I’m hired to get the best dollar, at the best price, for the present market conditions, no matter what’s going on”

“So, I don’t really know the answer.. if we’re in a bubble or not. But, I don’t think there’s anything that indicates that our real estate can go up any higher in the next year or two… probably, if I were to bet if it were to go up or down, I’d probably say that it has better chances of going down than going up, in the next year… Having said that, I do own a few properties, and I’m not selling them anytime soon. My plan is to hold them for the long term.”

– Ian Watt, local realtor, self-posted video at youtube, 25 Feb 2012

The first paragraph is very, very smart realtor talk. We believe that that is precisely how good realtors should present themselves… as expert deal facilitators and not market predictors. Most don’t, of course, and can’t resist predicting future market strength.
Ian is himself on record as having made statements like “I don’t think that [Vancouver RE prices] are going to drop 30% back to prices of 15, 20 years ago. I just don’t see it happening” [VREAA 9 Nov 2010], so he seems to at times break his own rules.
Ian tells us he owns “a few properties” and it would be interesting to know what percentage of his net-worth is in Vancouver RE.
Also, it’d be interesting to know how strong his hands are… would he keep holding at 20%-, 25%-, 30%-, 35%-off?
– vreaa

[PS: Yes, connoisseurs, that’s another gorgeous back-alley shot that Ian has scouted. He remains Vancouver RE’s “undisputed King of the DashCam”, and more of his work can be seen in our ‘Realtor DashCam Gallery‘, where he still holds poll-position. -ed.]

Buy The Dip! – “There’s yet more indication investors are finally getting the break they need to beef up their portfolios, with the B.C. Realtor association confirming a near-8 per cent dip in the value of properties sold during the first month of the year.”

“There’s yet more indication investors are finally getting the break they need to beef up their portfolios, with the B.C. Realtor association confirming a near-8 per cent dip in the value of properties sold during the first month of the year.”

“Provincial sales activity was down in January from year ago levels,” said Cameron Muir, chief economist with the British Columbia Real Estate Association. “Increased market activity outside the Lower Mainland in January was offset by fewer sales in Vancouver and the Fraser Valley” (where residential sales declined by 10 per cent).
“That overall drop in prices bodes well for investors across the Lower Mainland, who have had acquisition plans put on hold over the last year, as sellers ratcheted up asking prices in order to capitalize on foreign demand for Vancouver-area properties.
That demand has since waned, say analysts, and sellers have finally started to bring down their asking prices or take their properties off the market, effectively encouraging others in the market to drop their own pricing.
BCREA’s January numbers will likely add to that momentum.
Yet more sellers will have to leave the market to increase demand from investors and other buyers in B.C., argues one industry veteran.
“Despite the low interest rates clients are in no rush to buy,” Morris Briglio, president and senior mortgage consultant with The Mortgage Advantage, said. “There’s simply too much inventory on the market.”


– Excerpts from ‘Cooling market offers investors a ‘in’, Canadian Real Estate Magazine, 15 Feb 2012

We’ll register this as the first “It’s-only-a-flesh-wound” sighting of the down-cycle that is now underway.
Note how peppy lots of the commentary is: “getting the break”; “beefing up” RE “portfolios”; “bodes well”.
Note also the fascinating logic from the ‘industry veteran’: “Yet more sellers will have to leave the market to increase demand from investors and other buyers”.
Sure, I can just see those sellers stepping back: “No, please, you go first.”
– vreaa

“I’m a Realtor and it’s not a buyers market at all. Based on Vancouver’s historic benchmark price chart I would be hitting the sell button asap.”

“I’m a Realtor and it’s not a buyers market at all. Most of my income is derived from trading stock’s thank god they are liquid unlike houses and condo’s. I love having a diversified income stream otherwise I fear I might be inclined to shovel the whole “good time to buy and good time to sell” routine. That whole sentence is pure B.S. When I buy a stock it’s usually because it’s become temporarily unpopular with the investment community. Vancouver’s real-estate is the polar opposite everyone want’s a piece of it. If I were put Vancouver’s historic benchmark price chart over anyone of the stock’s I hold or have held I would be hitting the sell button asap. I have instructed several client’s to hold off and buy at a discount down the road. This has cost me financially but cost me nothing morally and ethically. P.S. my condo in florida was purchased at a 50% discount and i did not time it perfectly. The herd is falling off a cliff right now and there’s no safety net waiting for the lambs.”
Big D at VREAA 6 Feb 2012 11:35pm

“When I asked why the owner is selling, the realtor said the owner “Has too many properties, wants to get rid of some”…”


“Speaking of the west side of Vancouver — another appalling/risible anecdote for all to wince at.
6225 Balsam St., an appealing-looking but now somewhat shabby, small older cottage, sold last spring for $1,288,000.
In the last few minutes I noticed a new For Sale sign on the property. Apparently the sign went up today; the property will not even be visible on the web until 3-4 days from now.
New listing price? $1,488,000.
The realtor said this is “below market value,” because the land alone is worth $1.7 million. (The lot is “extra-long” at 125.8 feet as opposed to the customary 122.)
The realtor said she had already had “quite a few” calls about the property and is expecting “multiple bids.”
The property is currently tenanted with renters, so there will be no open houses.
When I asked why the owner is selling, the realtor said the owner “has too many properties, wants to get rid of some.”
I don’t know why I should still feel surprise at some of what continues to happen here.”

Vesta at VREAA 7 Feb 2012 4:35pm

“Vesta – per BC Assessment, 6225 Balsam sold for $1.420M last May 2011. It is currently assessed for $1.502 M. Will be interesting to see what it goes for.”
homelessindunbar at VREAA 8 Feb 2012 12:34am

1. “Below market value”: Hahahaha, really risible. What, the owner is feeling charitable?.. passing on a free $200K to the buyer out of goodwill? Of course, in actual fact, whatever it sells for is ‘market value’. You know the realtor is being disingenuous based on this comment.
2. “The owner “has too many properties, wants to get rid of some.”: More laughter. What, too much of a good thing? More BS. This is the seller’s way of answering the question “If RE in Vancouver is such a good investment, why are you selling?”… “I have so much, I’ve decided to give some away…”
3. Yes, given our knowledge of the May 2011 sales price, it’ll be interesting to see what it now sells for. It is possibly priced in the hope of a bidding war. With all the benchmark changes and so forth, this kind of single property sale/resale may become increasingly important in trying to assess market direction and magnitude of price changes.
– vreaa

Maclean’s Interviews Two Vancouver Realtors – “Remember: in real estate, people who don’t track the short-term ups and downs tend to do great over the long-run.”

Vancouver-relevant excerpts follow from ‘In a cooling housing market should you wait to buy and hurry up to sell?’, an article in Maclean’s 3 Feb 2012, by Erica Alini.

‘Larry Yatkowsky is a Vancouver realtor at Yatter Matters. Realtor Manny Riebeling focuses on Vancouver West and downtown areas and specializes in luxury properties and condos.’

Maclean’s: “Intuitively, a decline in house prices should benefit homeowners who want to move into a bigger house. A 10 per cent decline, for example, means a “discount” of $30,000 on a $300,000 home, but a bigger $60,000 discount on a $600,000 home. Upsizers could pocket the difference. But do these back-of-the-envelope calculations hold up to reality? Should people looking to move into a bigger home wait on the sidelines for prices to cool?”

Larry Yatkowsky in Vancouver: “Most buyer/sellers looking to upgrade to a larger home have usually completed their homework in respect of financing options and in all likelihood the move up is carefully considered prior to taking any action. Of course in a perfect world selling high and buying low is the optimum. That, however, requires perfect timing. With the view that Vancouver’s house market is dynamic the idea of waiting for what may be perceived as that perfect moment is extremely difficult and adds untold stress to life. As an example, wanting to sell high to maximize the benefit and then waiting until the low arrives doesn’t fit into the realm of a growing family where children need to be registered in a new school or daycare within the neighbourhood.”

Manny Riebeling, also in Vancouver: “Here in Vancouver, I don’t really see a big cool down because we still have a high number of new immigrants coming and a lack of land. That combination makes our real estate very desirable, so I think for 2012, prices will be stable. Based on the previous statement, if someone wants to trade up they can sell in the spring (which is usually a busier market) and buy once they have a firm purchase offer on their current home or rent for a few months and buy in winter time, when it’s usually a slow season.”

Maclean’s: “Does the opposite hold for people looking to downsize?”

Yatkowsky (Vancouver): “It’s probably safe to assume that downsizing is a function of being an “empty nester.” As such, the financial concerns differ. Most people compromise due to health or wealth; factors that are both unrelated to the market. However, as in the case of the move-up buyer, these concerns mean people may not be able to wait for that precise market moment.”

Maclean’s: “How about first-time homebuyers. Should they wait on the sidelines for prices to cool?”

Yatkowsky (Vancouver): “If history proves anything, then waiting for that perfect stainless steel granite topped home that has a high walkability factor is tantamount to watching trains pass your station. With Vancouver’s price income ratio sitting at 10, the effect of interest rates is a massive determinant in affordability. In this city, on this basis alone, any upward movement of interest rates will wipe out the buyer’s market. The sad part is that buyers are seemingly unprepared or ill-prepared to consider the alternative of an older, more basic home with laminate tops and white appliances in working order. A metaphor for the first time buyer dilemma might go something like this: You are standing in the cold and need warm boots. You only have $10 but the boots you really like are $20. The less stylish fleece-lined rubber pair are $9. You can choose to wait for the much-anticipated $10-boot sale but while you wait your feet are getting wet and cold. What should you do?”

Maclean’s: “Several analysts are particularly concerned about the condo market in Toronto and Vancouver. Should potential buyers stay away from condos and focus on single-family homes? And should sellers hurry up to offload their condo units?”

Riebeling (Vancouver): “It’s never wise to panic, it’s better to be informed, set a plan, make an informed decision. Real estate is not a gamble. Potential buyers need to buy where their life’s necessity takes them, which could be either a house or a condo. Buyers should not rush and buy just to follow a trend or a tip, buyers should buy because they need a place to live. People shouldn’t hurry and sell their condos, unless they have to, at this time in Vancouver, the condo market is quiet, but the sky is not falling. On the other hand, if people panic and put their condo on the market at the same time, they will be creating an oversupply and this will really hurt them. Remember: in real estate, people who don’t track the short-term ups and downs tend to do great over the long-run.”

—/end

Our summary of the realtors’ arguments:

1. Selling high and buying low requires “perfect timing”, so don’t bother trying.
Trying to time the market causes “untold stress”.
Issues like a “growing family”, “health or wealth”, makes attempts at timing impractical.
“Remember: in real estate, people who don’t track the short-term ups and downs tend to do great over the long-run.” [Fine, OK, if your financial plans and net-worth will allow you to tolerate a 50%+ drop in the market value of that property in the medium-term. -ed.]

2. Prices will be stable because of demand factors.
Our real estate is “desirable”, there will be “a high number of new immigrants”, and there is “a lack of land.”

3. Buyers must compromise.
If your feet are wet and cold, buy whatever boots [used, overpriced, leaky, mouldy -ed.] are available for all the money you can afford.

4. Prospective buyers should go ahead and buy.
“Buyers should buy because they need a place to live.”
“You are standing in the cold and need warm boots. …while you wait your feet are getting wet and cold. What should you do?”

5. Prospective sellers shouldn’t sell.
“If people panic and put their condo on the market at the same time, they will be creating an oversupply and this will really hurt them.”

6. Only irresponsible cowboys would disagree with our sensible and measured approach.
“Real estate is not a gamble.”


A few thoughts:

* Regarding timing the market: Yes, it can be very inconvenient to attempt to time the market, but one does not by any means have to get it “perfect” to succeed handsomely. Just because a lot of people get it wrong (especially the herd followers) doesn’t mean that prospective buyers should be nihilistic and buy used overpriced mouldy boots at first opportunity. One simply has to be a buyer in the vague vicinity of market bottoms and a seller in overheated markets (in case-in-point uber-overheated market, no-brainer). So, we strongly disagree regarding “don’t try to time the market”, and especially regarding “requires perfect timing”.
Just ask any market participant in the US. They had about a 5 year window where it was bad to buy and good to sell, and they’ve now entered a likely 5 year+ window where it’ll be manageable to buy and lousy to sell. Where’s the ‘perfection’ necessary in getting that vaguely right?

* Note the old argument for ongoing robust demand, from all the usual quarters. We now note the interesting juxtaposition with fear of oversupply from seller panic.

* The encouragement to compromise and buy, and the implication that buying is still prudent (“not gambling”) in this market, is sales talk.

[Again, we would make the point that talking about the Vancouver RE market without mentioning the possibility/probability of us being locked in a massive speculative mania in RE (as now identified by many analysts, including writers for The Economist and Maclean’s itself) is overlooking the obvious and is just plain silly. Like talking about Neil Armstrong without using the word ‘Moon’.]

– vreaa

“GDP contracting, but real estate agents still riding high before what’s expected to be a cooling market.”

“Canada’s economy stalled again in November [2011], for the second month in a row, but manufacturers continued to make strides. And real estate agents were still riding high before what’s expected to be a cooling market. …
With so much focus on the housing market of late, it’s worth noting that construction posted a decline of 0.3 per cent, but Canada’s home resale market was still going strong, with a 2.2-per-cent gain for real estate agents.”

– from ‘GDP lag: At least real estate agents are making money’, G&M, 31 Jan 2012 [hat-tip Jason]

REMAX KickStart 2012 Video – “Ultimate Objective: Satisfaction… And Satisfaction Is A Perception… May Have Nothing To Do With Reality.”

– posted by REMAX, on youtube, 25 Jan 2012. A few stills below.


ADDENDUM. Even more stills:

Market Is Slow – “When times were good, developers wouldn’t let realtors near their projects, just paid their own sales staff. Now they are dropping by offices with presents, taking realtors out to lunch.”

“Was speaking to a realtor in Vancouver yesterday, he said that when times were good, developers wouldn’t let them near their projects, just paid their own sales staff. Now they are dropping by offices with presents, taking realtors out to lunch etc…HA!”
kilby at greatfool.ca 27 Jan 2012 5:15pm

Still Ignorant After All These Years – “During our lunch my friend told me that he was going to quit his job to become a realtor. He seemed surprised by my comments about the market, and said that he hadn’t heard any of this before, and wouldn’t even begin to know where to look for that kind of information.”

“Recently had lunch with a friend of mine. During our lunch he told me that he was going to quit his job to become a realtor. Was quite surprised as he was just promoted and is doing very well. I launched into the usually bear arguments: debt-to-income, easy lending standards (CMHC), risk of further restrictions regarding mortgages, housing starts and that most economists are waving red flags regarding Canada’s RE market.
He seemed surprised by my comments and said that he hadn’t heard any of this before and wouldn’t even begin to know where to look for that kind of information. We’ve talked about RE before and as I pointed out to him that I’m still wrong but have been right about every other housing bust I called, from the U.S. to Ireland to Spain — Australia’s right around the corner, and that at some point I’ll be right about Canada’s as well.
In any event, I didn’t dissuade him. He is a great salesman and will undoubtedly have success regardless of getting in at the top of the market, taking on tonnes of listings and having to deal with future sellers that will refuse to lower prices because their house is worth more. I wished him luck and told him to make sure that he had plenty of cash set aside to grow his business.”

Manna from heaven at vancouvercondo.info 25 Jan 2012 11:09am

Boy, this is late to the party.
Like arriving at 6.30am, after the cops have broken it up.
Mental note to self: 1. Never underestimate the ignorance of some folks, and, consequently, 2. Never (again) try to estimate how long a speculative mania can perpetuate itself.
Yeah, sure, perhaps it’s we bears who’ve been ‘ignorant’. But the game isn’t over yet.
– vreaa

Denying The Obvious Bubble – Close Your Eyes; Think Happy Thoughts; Don’t Use Nasty Words; Bad Things Will Go Away

“A new year means new resolutions, and we should start fresh when talking about Vancouver real estate.”
“Happy 2012! In keeping with the spirit of the brand new year, I say we resolve to look at our dynamic real estate market in a fresh way. Let’s proverbially “sweep out the old” and make room in our news for market stories from a fresh perspective.
First, we should agree not to discuss things that don’t exist. There are three things I don’t want to hear about anymore in the real estate world for 2012, so let’s clear the air and get off on the right foot here.”
The Bubble
“What bubble? If I never have to hear one word again this year, it would be “bubble.” One of the most compelling aspects of the bubble is there is no way to predict it.
In each historic case of bubble markets (characterized by rapid price increases and a sudden pricing collapse), it is the unpredictability in forecasting that is the common thread. While economists and pundits have claimed affordability indices are the true measurement of anticipating a housing bubble, there is no historical data to support it.
All of the market bubbles in Japan, the U.S. and Australia, had their own underlying economic and political drivers. Our country’s lending policies are conservative and are coupled with record-low interest rates.  B.C. is known for exceptional regional livability, low unemployment and excellence in education.
Let’s face it – if there is a bubble correction, most single-family homeowners won’t be affected. In any market, few “win” on both ends of the deal. Buy low/sell low and buy high/sell high would be the norm for most. Let’s agree to disagree until we can discuss it in hindsight.”
– excerpted from ‘Let’s Change our Vancouver Real Estate Vocabulary’, by realtor Leah Bach, BC Business magazine, 6 Jan 2012 [The other two things to agree to not mention are ‘Real Estate Fees’ and ‘Foreign Investment’.]

Adults know that this is complete hogwash. Of course you can identify bubbles when they exist; they exist when asset prices run up far beyond fundamental value as determined by future income stream, fueled by speculative buyers using cheap financing to chase rising prices in a momentum fashion. As happened with tech stocks in the 90’s, US & many other RE markets housing through the ‘naughts’, and as has so very obviously happened with Vancouver RE 2003-present. These are all classic asset bubbles.
Another reliable identifying factor seems to be that there will always be self-interested commentators, in the middle of the bubble, claiming that bubbles can’t be identified: Greenspan,  Bernanke, Leareah; Vancouver/Canadian RE bubble ignorer/apologists (Bach, Wiebe, Podmore, Sommerville, Flaherty, Muir, Yu, Guateri, Geller, Bryan, Pastrick, Dupuis, Campbell (Don), Goldberg, Marchildon, Lovett-Reid, Klump, Regan-Pollock, Dunning, Dugan, Jenkins, Ash, Kinch, Good, etc, etc).
So, the routine seems to be to stick your fingers in your ears, ignore the data, dismiss the “naysayers”, and then, after the implosion, to pontificate as to how impossible it was to see all this coming. If your eight year old kid behaved like this, you’d call him on it.
Bubbles can be identified before they implode. Shiller, Baker, Prechter, Shiff, innumerable online bloggers, all saw the US RE bubble for what it was. Keene has written extensively about the Australian RE bubble. Rosenberg, Baker, Shiller, Krugman, Shedlock, Coxe, Jarislowsky, ‘The Economist’, Rabidoux, Turner, innumerable bloggers have all clearly stated that they see our national Canadian RE bubble, and many have pointed out that Vancouver is an extreme example of such a speculative mania.
If it walks, talks, smells, looks, behaves, and, heck, has the complete genetic structure of a duck, call it what it is – it’s a duck.
Those who argue that this is not a speculative mania, particularly if they do so from a self-serving position of influence, should be taken to task on their opinion.
– vreaa

REBGV Stats Release Confirms Market Cooling

Following up on recent discussion using average SFH prices, these data regarding REBGV benchmark prices and sales [via vanpro at RETalks 4 Jan 2012 6:50pm]:

Dec 2011:
Greater Vancouver SFH sales down 18.1% YoY
SFH benchmark price down to $887,471 from $901,680 in June/11 [-1.5%]
Some components:
Van West SFH benchmark price down from $2,068,857 in June/11 to $1,990,958 in Dec/11. [-0.5%]
Van East SFH benchmark price is down from $854,004 in July/11 to $845,771 in Dec/11. [-1.0%]
West Van SFH benchmark down $104k from $1,793,524 in June/11 to $1,689,043 in Dec/11. [-5.8%]

So, SFH benchmark price down just 1.5% from June peak.
Compare this with 13% drop seen in average price.
Putting aside the possibility of ‘benchmark massage’, the difference is likely due to sales mix.
All available data show a pattern of dropping sales, rising inventory, and prices that are dropping a tad.
Can’t be sure that this is the start of the implosion, but a start could look like this.
June 2011 may well have been the peak.
– vreaa

PS You have to love the REBGV spin “Balanced real estate market prevailed through much of 2011”: Started hot, ended cold, thus it’s ‘just right’. (If it’d done the opposite we bet they’d have been extrapolating the recent heat into the new year…)

“Yesterday I sat in Kitts coffee and listened too a realtor go thru his BS to an unsuspecting female.”

“Yesterday I sat in Kitts coffee (Vancouver) and listened too a realtor go thru his BS to an unsuspecting female.
She had obviously just sold her place and he talked her into a $1.2m offer on a place just off W. 4TH.
They were going for a second viewing on Sunday, and making a “strong” offer after that.
I felt very sorry for her!”

Sanddancer at greaterfool.ca 10 Dec 2011 10:50am

A Realtor Sells A House To Himself In North Vancouver – “The untangible feeling of pride of homeownership I feel is overwhelming and I strive to work harder and longer to make sure my clients achieve the same exciting, rewarding, and satisfying experience!”

“This past week I made the highly anticipated move from my condo to my first house on beautiful Cortell Street in North Vancouver. The new house is a very well maintained, updated character cottage from 1928, with extensive kitchen and bathroom renovations.

The Location is one of the finest in North Vancouver, in the quite and sunny southern pocket of Pemberton Heights, 2 blocks from Capilano Elementary with its coveted IB program. The yard is a gardener’s dream, landscaped and set up with an irrigation system and automatic lighting. The garage is tiny, but my truck just fits in it:). Some of my favourtite features are the classic hardwood floors; the fully renovated kitchen with Viking Gas Convection Stove; the loft with skylghts and views; the many species of birds that call the magical garden home; the protected Royal Walnut Tree in the front yard that I’m forbidden by the District of North Van to touch; the gas fireplace; an exposed brick wall; large south-facing wood deck; the antique claw-foot soaker tub; and the detailed door fixtures, built in cupboards, and wainscoting.

The windows, electrical, furnace, on-demand hot water supply, and roof have all been replaced in the past 6 years. The neighbourhood is a charming mix of cute and character, ultra modern, and brand new masterpieces. My west-side neighbour’s house is currently being gutted, there is a handsome new custom mansion across the street, and 2 brand new houses being built on Cortell, so for a Realtor who loves homes, I feel like a kid in a candy store:). Speaking of candy stores, 2 blocks away is the infamous Corner Store, a Pemberton Heights landmark serving up great coffee, sandwiches, groceries, and snacks in a warm neighbourhood environment.

I am thrilled to have the talented eye of Missy Kaniuk from Design Project in charge of the re-design of the main level & renovations to the basement! We are going to paint the wainscotting white, and the wall in the living room and entrance a tope/grey/olive tone, the office a tope green with white baseboards, and the bedroom white with a dark wood door and window trim, using paint by Benjamin Moore. The exterior will be white with blue or charcoal trim and ‘fire-truck red’ front door. In the long term, I want to refinish the floors a dark oak & install crisp white crown moulding in the bedroom, den, and bathroom!

The downstairs has a finished bathroom but the rest is exposed framing, washer/dryer, furnace, and a work shop. I am planning on renovating the basement so the walls and ceiling are finished with electric heat, pot lights, new washer/dryer, guest kitchenette, and a bedroom. With the help of a great plumber, electrician, framer, and Rona I hope to create an additional 650 sq ft of finished living space. The main challenge is the uneven floor which will require a skilled leveler (which I will be meeting on Saturday morning – Basement design details to come, stay tuned!).

Upstairs will be a guest room & office on the dreamy East side of the loft , and a TV room on the West Side to enjoy the city/ocean views.

Follow my blog for updates on the reno and life as a homeowner! The untangible feeling of pride of homeownership I feel is overwhelming and I strive to work harder and longer to make sure my clients achieve the same exciting, rewarding, and satisfying experience!”

– Realtor Stu Bell, at his blog stubell.com, 24 Nov 2011
[hat-tip to reader who e-mailed the link]

That ‘untangible feeling of pride’ is one factor contributing to the ‘ownership premium’, the amount that one is prepared to pay for a home over and above the cost of renting it. Stu clearly gets a great deal of pleasure out of owning this home, and his personal ‘ownership premium’ is likely substantial (whether he had to pay more than rent equivalent to purchase this house or not). One wouldn’t want to get into a bidding war with this kind of buyer for a home on which their heart was set.
The story is saved here as a fairly intense example of the current Vancouver love affair with home ownership. We believe that this infatuation is closely related to rising prices, and that the feelings will become less intense when prices are falling.

“Will you still need me?
Will you still feed me?
When I’m 64(%-of-the-price-you-bought-me-for)?”

– vreaa

[For another recent example of related emotions, see the TV announcer exchange at “Real Estate stories are always great, they never get tiring, you know?”]

Spot The Speculator #67 – “It’s a home, it’s an investment — a bit of both.”


Melissa Yan, Yaletown condo purchaser, RE marketer.

“Melissa Yan wondered why she had to wait until she got married to buy a home.
She decided she didn’t. So the 28-year-old, who works in marketing for Magnum Projects, opted to jump into Vancouver’s hot housing market at Christmas in 2010.
She picked up a 600-square-foot, one-bedroom apartment in Vancouver’s trendy Yaletown district in a design that would fit her needs and a price tag that would allow her to enter the market and establish equity so that one day she could get an even bigger house.
“I have always known I had wanted to own, so I made it a priority for myself to put aside money for the past five years,” says Ms. Yan, who was living with family as she saved. “It’s a home, it’s an investment — a bit of both.”
Ms. Yan, who says her work in real estate convinced her she needed to buy, is one of a growing number of 20-somethings who are no longer waiting until they get married to purchase a home for the first time. She is part of a trend that adds an extra stage to the housing market.
Traditionally, people bought their first property upon marriage, looked for a move-up when their families got larger, scaled down as the kids moved out and then were off to the retirement home.
But the new reality is that more first-time buyers fit Ms. Yan’s profile.
A TD Canada Trust survey this spring found 45% of first-time homebuyers were going it on their own rather than with a co-purchaser.
“I would say a lot of my friends are doing this,” says Ms. Yan. “People are getting married later in life, too. Weddings are so expensive. I figured I would invest in an asset for now. I know it’s not my final home.”
– from ‘Mingles’ moving housing markets, Financial Post, 19 Nov 2011 [The above is the later, 21 Nov version, of the article. See below for explanation.]

Well, it turns out that Melissa’s Marketing work is actually directly related to RE marketing… From her public LinkedIn profile:
“Manage strategic real estate project marketing programs for clients. Responsible for marketing strategy, public relations, forecasting, budgeting, lead generation, event planning, media buying and negotiations. Initiate and manage strategy and direction with graphic and interior designers for marketing collateral, sales centers and show suites.”
I don’t know of we should be outraged, disgusted, sarcastic or amused by such an article… I just want to point out that FP just loss all its little remaining credibility it had in my mind for not disclosing such “details”.

– from Makaya at VREAA 20 Nov 2011 [who cited 604serf at VCI 20 Nov 2011 (“Really, “interview” someone who works in Condo Marketing about how they’re buying a condo…and not disclose that? Seriously??”) for picking this up]

Note: The original article, posted 19 Nov 2011, read “She decided she didn’t. So the 28-year-old, who works in marketing, opted to jump into Vancouver’s hot housing market at Christmas in 2010.”
The ‘for Magnum Projects’ was added in a later edit, seemingly in response to observations such as those by 604serf and Makaya above. – ed.

Update: 604serf, in the comments section below, confirms that they did indeed e-mail the editor of the FP with their observations and that the article was changed as a result. Here is the response they got from the FP managing editor:
“Regarding your note about the story on single people buying more condos, We have confirmed that you are correct and the person used in the story works in condo marketing. If we had known this it would have been disclosed, and that change has been made in the online story.
Thank you for your continued readership and attention.
Cheers,
Grant”

Greenhorn (the Vancouver RE video archivist) forwarded this comprehensive ‘before’ and ‘after’ account, for the record:

Original article started like this:
[quote]Melissa Yan wondered why she had to wait until she got married to buy a home.
She decided she didn’t. So the 28-year-old, who works in marketing, opted to jump into Vancouver’s hot housing market at Christmas in 2010.
[/quote]

Was changed to this:
[quote]Melissa Yan wondered why she had to wait until she got married to buy a home.
She decided she didn’t. So the 28-year-old, who works in marketing for Magnum Projects, opted to jump into Vancouver’s hot housing market at Christmas in 2010.
[/quote]

And this 5th paragraph was changed from:
[quote]Ms. Yan is one of a growing number of 20-somethings who are no longer waiting until they get married to purchase a home for the first time. She is part of a trend that adds an extra stage to the housing market.[/quote]

to:
[quote]Ms. Yan, who says her work in real estate convinced her she needed to buy, is one of a growing number of 20-somethings who are no longer waiting until they get married to purchase a home for the first time. She is part of a trend that adds an extra stage to the housing market.[/quote]

Screen capture of original 19 Nov 2011 article here.

Other choice quotes from the FP article:

“They want to jump on the equity train right away and build equity.”
– Peter Simpson, chief executive of the Greater Vancouver Home Builder’s Association

“People are getting married later, so there is a need to buy a condo sooner. People go to school later; the whole life cycle has changed.”
– Michael Polzler, executive vice-president of Re/Max Ontario-Atlantic Canada.
[Orwell? No, more like Kafka. -ed.]

“They’re not getting married, so they should get on with their financial lives. A home is a great asset. From a financial planning perspective well down the line, these people who bought a home and built up equity in their home from a young age will have an asset that will give them the confidence to retire.”
– Scott Plaskett, a certified financial planner in Toronto
[Worked great for the last 30 years, what could possibly go wrong? -ed.]

Realtor Opinion – “Prices are actually quite stable and have only increased modestly in value in the last year or two. Given immigration predictions, low interest rates and the fact that Vancouver has become an urban resort to the world’s wealthy, there doesn’t really appear to be as much froth as one would think.”

“As a Vancouver real estate agent I share the disbelief at the bizzaro real estate pricing we see so often here. This practice of re-listing at a higher price than a previous, unsuccessful listing is nothing new to Vancouver real estate. Last year I watched a “star” realtor list a $3.5MM condo for $8MM. Not surprisingly the listing was unsuccessful and the property remains unsold and off the market. Vancouver has managed to buck global real estate trends, however, it’s important to remember that sale prices, not list prices are indicative of the presence or absence of a bubble. The motivation for an agent to list a property at twice its justifiable market value is debatable but it does happen regularly. Many agents and sellers are pinning their hopes on the recent influx of Chinese buyers. Regardless, these tactics are not effective and do not necessarily point to a bubble. The reality of our real estate market is that prices are actually quite stable and have only increased modestly in value in the last year or two. Given immigration predictions, low interest rates and the fact that Vancouver has become an urban resort to the world’s wealthy, there doesn’t really appear to be as much froth as one would think.”
– comment from shaunkimmins at Global Economic Analysis 20 Nov 2011

Visual Anecdote – Shanghai Realtor Hawking RE In Traffic


Hey, driver! Want a home? Just 18,000 yuan a square meter. An agent in downtown Shanghai took to the streets in search of buyers. Yong Kai / China Daily
– from China Daily, 16 Nov 2011

Brad Lamb Is Not Worried – “We are the number one condo market for new development on the planet. This talk of bubble is ridiculous.”

Announcer: “Remember that so called real estate bubble that’s been predicted to burst for what seems like forever? (laughs)… well it certainly didn’t happen last month… Canadian home sales rose almost 3% in Sept and 11% from the same month last year.”

Brad Lamb: “We are the number one condo market for new development on the planet.”
Announcer: “Brad Lamb is a RE broker and developer who has “been selling Toronto property for two decades, he says 2011 could be a record breaker.”
Brad Lamb: “I’m building over 2000 condos across Canada at present, and I’d say that 50% of those are under 520sqft.”

Announcer: “Yet there are worries that developers may be building too many condos in Toronto.”
Will Dunning, economist: “… we don’t know how they’ll be absorbed in the market place.”
Announcer: “Brad Lamb, who builds them, is not worried.”
Lamb: “This talk of bubble is ridiculous. But, we’re going to have recessions, we have them every 15 or 10 or 8 years, and when it happens, people are going to put their hands in their pockets and not buy real estate.”
-CBC Radio, “World at 6”, 17 Oct 2011

“My wife and I know 3 realtors and they all say it is really slow. Price drops of 30K-100K. One of them hasn’t sold a home since April 2011.”

“My wife and I know 3 realtors and they all say it is really slow. One of them hasn’t sold a home since April 2011. So don’t believe the crap that homes are still selling. It is really slow, I’m seeing price drops of 30K-100K, interior photos of too many vacant homes for sale, and realtor remarks such as: Motivated Seller or Willing to accept any reasonable offer. My thoughts: I am an unmotivated buyer and not willing to accept any of these unreasonable asking prices.”
Patrick at VREAA 14 Oct 2011 8:11am

Realtor – “I have been eagerly awaiting this month’s statistics to see what sort of bounce back we would see after the slower Summer season. The answer, somewhat surprisingly, is that the we didn’t seen any bounce back in sales activity at all.”

“I have been eagerly awaiting this month’s statistics to see what sort of bounce back, if any, we would see after the slower Summer season. The answer, somewhat surprisingly, is that the we didn’t seen any bounce back in sales activity at all – in any of the neighbourhoods we look at. The degree of sales drop varies quite a bit, with more than 30% drops in sales activity in the Downtown, Vancouver Westside attached and detached, and North Vancouver attached markets compared to just 6.7% in the Vancouver East attached market and 16.6% in the Vancouver East detached market. Interestingly enough, this decreased sales activity has not really impacted sales prices as both the average and median prices in most markets held relatively stable. We have also not seen a dramatic spike in listing inventories. Should listing inventory start to rise in October, we may be looking at some minor slips on the pricing side. It is my belief, however, that the commitment to hold interest rates until 2013, in conjunction with positive employment and immigration numbers, should keep prices steady through to next year.”
– Realtor Rob Zwick, ‘Market Update’, Oct 2011, at robzwick.com [hat-tip Al]

A topping process will begin with a drop in sales. -ed.

“Our youth is getting screwed over at the expense of realtors, developers, and a government that’s all too eager to bend over backwards and let a rampant real estate market guide itself.”

“Our youth is getting screwed over at the expense of realtors, developers, and a government that’s all too eager to bend over backwards and let a rampant real estate market guide itself.”
JCVdude, youtube, 24 Jan 2011 (quote at 3:15 on video)

Somehow we missed this video when it was posted earlier this year. It covers many of the commonly discussed issues relating to the speculative mania in Vancouver housing. Good production values for an informal video; nice general Vancouver footage; worth the watch/listen. We are impressed with JCVdude’s very reasonable and controlled expression of his frustration. – vreaa

Victoria – “One realtor openly stated the one home was overpriced but she was just following the direction of the seller.”

“I was out to a number of open houses on the weekend here in Victoria. With the exception of one, every home was vacant. And no there was no rush of buyers having a look. One realtor openly stated the one home was overpriced but she was just following the direction of the seller. In another the realtor said it was a buyers market with inventory at a 20 year high. He looked sad and forlorn.
There are For Sale signs popping up everywhere here; I don’t think prices are going to rise anytime soon.”

Bobby at greaterfool.ca 5 Oct 2011 1:48am

Zero-Down Mortgages In Canada – “Better yet, there are programs available from some financial institutions where they will offer a “free down payment” “

“If you’re a first-time homebuyer, you may feel you can’t afford to purchase a home because you haven’t managed to save your down payment. But there are many solutions available today that can help first-time buyers with their down payments.
Many lenders will allow for a gifted or borrowed down payment. And of those lenders that will not provide this alternative, many offer cash-back options that can be used as a down payment.
Better yet, there are programs available from some financial institutions where they will offer a “free down payment” or a “flex down”. Of course, you will end up paying about 1% more in your interest rate, but the program will help you get in the homeownership door and start accumulating equity earlier. You must, however, stay with the original lender for the full initial five-year term or else you’ll have to pay the down payment back.”
“Now is an Ideal Time to Buy”.

– from an e-mail sent to prospective clients, 5 Oct 2011, by David Lund, Realtor, Prudential Realty, North Vancouver [hat-tip ‘D’]

Remarkably, these are still being peddled. – vreaa

There Is No Such Thing As A ‘Below Market Sale’ – “Priced well BELOW MARKET VALUE! Best price per Sq.Ft. in the building!”

#102 – 500 W 10th Ave, Vancouver
Fairview area of the West-side
MLS V903485
1096 sqft condo; 2 bed; 2 bath
Built 1994
Asking price: $499,900

“Priced well BELOW MARKET VALUE! Best price per Sq.Ft. in the building! Offers below the listing price will not be accepted!”
[hat-tip painted turtle at VCI]

Market value is, by definition, what a unit like this will actually sell for. – 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

Local Realtor – “The one thing that throws me in Vancouver are the rents. I can’t believe people paying $1700 for a 1 bed on a busy street. Some maxed-out owners should thank their lucky stars at the $$ they are getting.”

“I was just in Switzerland. Max 50% foreign ownership in any development. Funny how each ad states ‘foreign ownership allowed’! Often takes 2 yrs to build a house. Tons of red tape. Many never sell their houses, just rent out. Up to 70% of neighbourhoods rented. Also takes yrs to get into great neighbourhoods. We stayed with two architects there. Fascinating place.
The one thing that throws me in Van are the rents. I think more people would be foreclosing condos ‘cept the rent & tenants in abundance. I cant believe people paying $1700 for a 1 bed on a busy street. Some maxed-out owners should thank their lucky stars at the $$ they are getting. Could be a lot uglier.”

– thinktom (a local realtor), at RE Talks, 30 Sep 2011 9:04pm

Rents will drop during the coming implosion of the speculative mania. They will fall in proportion to the impact of the bubble-burst on our local economy. This will reduce the fundamental ‘floor’ underneath RE prices, which currently stands at 50% below market value, or even lower.
Interesting to see a realtor talking about “maxed-out owners”. – vreaa

“I’ve been to a number of open houses here in Victoria quite recently. The realtors are looking rather concerned. Each said we’re open to offers, in fact one said any offer.”

“I’ve been to a number of open houses here in Victoria quite recently. No, they are not busy and yes, the realtors are looking rather concerned. Each said we’re open to offers, in fact one said any offer.
The landscape here is littered with For Sale signs with many stating reduced or new price.
It is going to get ugly out there!”

Bobby at greaterfool.ca 30 Sep 2011 2:02am

BCREA – The Bubble Hasn’t Burst So It Doesn’t Exist

“Well I guess the first question is, is there a real estate bubble at all? … We had a financial crisis, the largest we’ve seen since the Great Depression, we had an ensuing global recession, and if that isn’t a trigger or tipping point, for any kind of inflated market to see a major correction, I don’t know what is.”
– Cameron Muir, Economist, BC Real Estate Association
(from ‘Is Vancouver’s housing bubble about to burst?’, CTV 27 Sept 2011)

The argument is that the bubble hasn’t yet imploded so it doesn’t exist.
– vreaa

“Her husband is a realtor and she’s pregnant. They have decided to sell their condo and rent until the market comes down.”

“Just got a conversation with a friend of mine. Her husband is a realtor and she’s pregnant. They are looking to move to a bigger place. She said her husband has made the calculations and they have decided to sell their condo and… rent and wait until the market comes down before they’ll buy again!”
– Makaya, at VREAA, 16 Aug 2011 6:36pm

“I know a guy that did that in 2004/05 – I think they are divorced now.”
– Blammo, at VREAA, 16 Aug 2011 7:37pm

The first story is interesting as a possible case of someone close to the market getting wind of coming weakness. Most insiders in bubble markets, however, don’t foresee their collapse.
Blammo’s anecdote is an example of probable social fall-out of the speculative mania. (‘Probable’ because they may have divorced regardless).
Financial stress is often claimed to be the commonest cause of marital break-up. On the other hand, once the housing bubble imploded across the US, there was talk of many couples being forced to stay together because they couldn’t afford to sell the house and separate.
– vreaa

“Dull”, “Steady”, and “Flat” Canadian RE Markets? [Highly Unlikely]

“The realization that the Bank of Canada will not be raising interest rates in the coming months is working to remove any sense of urgency to front-load activity. At this point we do not see any catalyst that will change the current trend in any dramatic way.” – Benjamin Tal, Deputy Chief Economist, CIBC World markets, Reuters, 16 Aug 2011.
Tal also said the Canadian real estate market will be comparatively “dull” going forward [in interview on CBC Radio, 16 Aug 2011, 3:35pm.]

“We will probably have a couple of years of steady prices” – Victoria Real Estate Board president Dennis Fimrite, ‘Victoria housing tilts toward buyers’, Times Colonist, 3 Aug 2011

“CREA expects sales to fall less than one per cent in 2012 while prices will flatten next year.”
– ‘Home sales to rise this year, says CREA’, Kim Covert, Financial Post, 16 August 2011

A speculative mania never ends with a flat, boring market; not even in Canada.
We suspect “Dull”, “Steady”, and “Flat” are hopeful terms being used by vested interest insiders who are seeing the first signs of coming weakness. – vreaa

Children Of Realtors Recall The 1980’s Crash – “I was only around 9-ish but I remember everyone saying it’s only going up up up.”

“Happened to my Mom in the very early 80′s. She was an agent at the time and was buying up everything. Condos, houses and “making” a fortune. She looked brilliant until… well she didn’t. Lost it all, and I mean all. Never did recover. I was only around 9ish at the time but I remember before she lost it all that her, business partner, heck everyone was saying it’s only going up up up, buy buy buy, but instead it was bankrupt bankrupt bankrupt.”
– DaMann at vancouvercondo.info August 3rd, 2011 at 2:58 pm

“Same with my Dad, a realtor in the early 80′s who thought he was smart and scooped up a bunch of places. He lost everything, we ended up going from rich to renting a small place, I was only 14 but I remember like it was yesterday. Right, Vancouver is “different”
– Anonymous at vancouvercondo.info August 3rd, 2011 at 3:32 pm

“You’re starting to see more desperation from sellers because they want to get out at the top.”

“I think people are starting to remember that price does matter.” – Ross McCredie, chief executive officer of Sotheby’s International Realty Canada

“We’re seeing an increased amount of attention to what’s happening in the economy.” – Don Lawby, Vancouver-based chief executive officer, Century 21.

“You’re starting to see more desperation from the sellers because they want to get out at the top. You are seeing signs that things are definitely changing.” – Mayur Arora, Oneflatfee.ca, Surrey, B.C.

– Excerpts from ‘Home-buying blitz in Vancouver shows signs of cooling’, G&M, 3 Aug 2011 [hat-tip ‘midnite toker’]

Ottawa – “She then tells us the owners have already bought another place, unconditionally, and that they MUST sell.”

Bottoms_Up at greaterfool.ca 17 Jul 2011 9:33pm
“Prestigious area north of Ottawa. Show up at the end of the open house.
Agent tells us that we’re only the second group through the house (and that the first group was ‘really interested’ but they have just leased a place — I said, ‘they can always break the lease’, and she just looked at me confused).
She then tells us the owners have already bought a place, unconditionally, and that they MUST sell (isn’t this a conflict of interest/breach of trust?!).”

“I was at a birthday party on the weekend and had the bad luck of getting stuck sitting next to a realtor for most of the evening.”

‘YLTN @ Work’ at vancouvercondo.info 18 July 2011 12:37pm
“I was at a birthday party on the weekend and had the bad luck of getting stuck sitting next to a realtor for most of the evening. This one has been in the biz for 3 years after leaving a career in the film industry and actually agreed with me that she thinks it is time to sell and rent and is actively trying to sell her burnaby condo. What really shocked me though was her description of some of the West side homes she has been to and what she has seen:
The first one was a 3.8M place for sale and when she went to look at it, the guy that came to the door barely spoke a word of english, had food stains on his clothes, slippers and pajamas (in the middle of the day). She said the guy looked like a backwoods asian peasant and was living in the place with almost no furnishings. She went on to say that she has been to a number of places where they have furnished the multi-million dollar places with a few scant pieces of garden furniture.
Her belief is that the owners are offshore and have hired poor peasants to essentially squat in the place to make sure it is lived in to prevent burglaries and to forward mail that comes there to claim it as a primary residence. They have given the “squatter” a minimal amount of cash to buy furniture which is why garden furniture is the usual choice – cheap and easy to carry with no car! Any one else heard of this?”

No, we hadn’t quite heard of this exactly, although we know of new build westside homes which sell and then essentially sit empty (or with what appears to be a single person living in one room). We wouldn’t quite describe the occupants as ‘squatters’ or ‘backwoods peasants’, but the main idea may be essentially the same. – vreaa

“I gasped and said it is scary, what happens when the prices drop? She was very upset with me, and said prices never drop, they only go up, these people are building equity.”

eva at greaterfool.ca 11 July 2011 1:52am
“I sat next to a realtor at friends bbq in Kitsilano, Vancouver ealier this evening…she was saying she must leave early as she had to show a condo…she specialized in condos on the westside. I said, “oh you must be a little down since the market has slowed down”…She turned with an insulted look in her face, and proceeded to tell me sales are booming once again! I asked what type of people are buying in this insane market! She said young up and coming couples, average mortgage payments of $6k a month is most common…I nearly choked on my food. I said they could rent the condos of under $3k a month, why pay double to purchase. She replied, “but why pay the landlords mortgage when they can afford their own”…makes lots of sense to me…pay double to own. I gasped…and said it is scary, what happens when the prices drop…she was very upset with me, and said prices never drop…they only go up…these people are building equity. I smiled and said, yea…I remember 1982…we lost our equity along with many other people, took many years to come back. Although, I must admit I have been a little skeptical lately that maybe we have all been wrong…but after speaking with her now believe more than ever “this cannot end well”. “

Richmond, Handwritten Sign – “FOR SALE, lovely home, ZERO DOWN”

“FOR SALE, lovely home, ZERO DOWN”
“recorded message, 604- etc”

This snapshot sent to VREAA by e-mail from Roko, 21 July 2011 with the following note; thanks, Roko:
“I’m a long time lurker on VREAA. I saw this interesting sign this morning on Cambie and Shell in Richmond. The small print says ‘lovely home’ and ‘recorded message’… I haven’t bothered to call the number, but there’s gotta be an anecdote in there somewhere…”

0-Down Lending In Vancouver, circa June 2011

This from realtor Lesley Wagstaff’s website, archived here for the record. [hat-tip ‘Patiently Waiting’ at VCI]: