Ok, lets say we think the market has peaked.. lets assume we have a few months to sell our condo investment property and lock in some gains before prices start to drop. What sort of buyers are out there?
TYPE 1 – BUYS AT ANY PRICE
Type 1 has got to have it. They will buy your home at any price. Maybe they’re freaked out about being priced out of the market. Perhaps they are very very wealthy and desire Vancouver above all other cities in the world, or maybe they’ve won the lottery and money is no object for them. You want at least two of these type 1 buyers interested in your house or condo. They’ll bid up each others price and will never insist on sticky points like ‘subject to inspection’ and ‘subject to financing’. These are the people that will make you money. Hunt them down and keep them close to you.
TYPE2 – BUYING AT A PRICE
Type 2 will buy, but not at any price. These people are typically refered to as bears. They want to buy, but they have a limit to how much they are willing to pay. They’re looking for something specific priced below a certain level. They’ll crunch numbers and think long and hard before buying. These people will be your fallback position if you can’t find any TYPE1 buyers out there to make you stinking rich. As long as you didn’t buy within the last two years you’ll probably be able to make some money off of this type of buyer, at the very least you’ll be able to get most of your principle out of your property to make that money available for other uses.
TYPE3 – NOT BUYING
These are the bastards you have to watch out for. These people aren’t keeping an eye on prices or perusing the MLS. They don’t even know what current house prices are. They have no interest in the Vancouver Real estate market and the only way they’ll buy anything is if they win the lottery or have a rich aunt kick the bucket and leave them a bucket of cash. Maybe they’re still in highschool. Maybe they’ve allready bought a place. Maybe they are bankrupt and planning to move out of vancouver in the next year. Maybe they’ve attained a level of spiritual nirvana that leaves them uninterested in worldly possessions. Whatever the reason for their lack of interest, they aren’t really a factor in the price of your home. Shun these people. Yell at them when you see them on the street. They will ruin our economy and they will destroy our property values.
So where is the market now? what percentage of the population is type 1? What percentage is type 2? The number of house and condo sales have dropped in the last couple of months from the previous two years and inventory is up, but maybe the majority of type 1‘s just happened to take the last couple of months off and traveled away from Vancouver. Any estimates for the current population breakdown? And where will we find future type 1‘s to keep the money train going uphill?