Vancouver Housing Market - is the psychology shifting?
Earlier this summer it seems like everyone I talked to about real estate thought there was only one direction prices would ever go - Up. Several co-workers we looking for places to buy before they were ‘priced out’ of the market, and everybody knew somebody who’s condo had gone way up in value and of course no one wanted to miss out of the money train. But lately things seemed to have changed.
Yesterday the topic came up at work and the majority of coworkers are now expecting a crash or ‘correction’ - this is a dramatic shift from just 5 months ago, within the same group of people. A few people who were home shopping in my office bought this summer, and the one that hasn’t has an ‘absolute top price’ for a condo that is more than $100k less than todays prices - he’s interested in buying, but at todays prices he’d prefer to rent and be able to take time off to travel and snowboard. Everybody else either already owns or isn’t interested in looking to buy.
I would have taken this discussion as an isolated incident, but then I saw bc_cele’s comment over at the Vancouver Housing Blog mentioning a very similar experience from the very same day, and more and more I’m running into people with negative opinions on real estate in vancouver - from dissapointment at being priced out to downright ridicule of the market. With dissapointing sales numbers in July have we seen the peak of the market, or will the August numbers jump right back and start climbing again?
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August 30th, 2006 at 10:16 am
August 30th, 2006 at 11:14 am
August 30th, 2006 at 11:17 am
“The housing bubble is no longer a subject of despair, it’s a subject of ridicule. Has anyone else noticed this? Ridicule is a very powerful social force, and when it breaks out of the blogs and into the mainstream media, look out. It’s what turns hot trends into dead ends.”
August 30th, 2006 at 11:19 am
August 30th, 2006 at 11:28 am
August 30th, 2006 at 11:42 am
I’m sure there are, but you probably need to be a realtor to access them.
personally I think ‘PRICE REDUCED!’ signs smacks of desperation, I prefer the more positive ‘NEW PRICE!’ sign I saw recently.
..maybe its lower, maybe its higher!
August 30th, 2006 at 2:50 pm
August 30th, 2006 at 3:02 pm
Never’s a long time.
At our house, we continue to rent, save our money for a DP, and stalk the housing market news.
Just Paying Attention
August 30th, 2006 at 3:17 pm
August 30th, 2006 at 6:28 pm
Prices will drop in the short run. If you have the choice of buying now or buying in two years, you’re almost certainly going to be better off buying in two years.
August 30th, 2006 at 9:12 pm
Are there any actual statistics being kept on frequency of price reductions?
You can find a running total over at Rob Chipman’s blog. You can track them over time if you put it into a spreadsheet.
August 30th, 2006 at 9:43 pm
The end of summer is traditionally a slow time for real estate, I don’t think that means that psychology is shifting.
So then why are people suddenly thinking that the market is going down?
For a little thought experiment - how likely is it that you would hear someone talk about real estate? Once started, how likely is it for someone to mention that the market is due to go down and that everything is overpriced? Now how likely is it that you hear this conversation twice in one day? The answer is not very likely.
Let’s look at it another way. The fact is that you could have a conversation about just about any topic. Did you hear any conversations about Michael Ballack’s fine today? Did people think he deserved it? For the recrod Michael Ballack is a footballer for Chealsea in England and was caught not declaring a $3,000 handbag he brought back from Dubai for his wife. The fine was almost $100K (70,000 Euros).
I wouldn’t doubt that nobody was discussing this today in BC. The reason is that it just doesn’t hold any interest for us. And how many topics that do hold interest for a large number of people see people agreeing with each other. This is why people have arguments over who’s the best HR hitter in baseball or who’s going to win the Stanely Cup.
So to sum up, when people are talking about the same topic numerous times, at numerous places, and are begining to agree, wouldn’t that count as a trend? And if the trend is counter to what was thought before, wouldn’t you agree that this is a change in psychology?
August 30th, 2006 at 10:02 pm
September 1st, 2006 at 10:51 pm
I do not see us at the ridicule stage yet. I think the market is tipping at this stage, but it will take a lot more evidence before the bulk of people have their perceptions change.