Crackshack or Mansion? The Answers.
A week ago we had a community driven interview of Petr and Ola, creators of the instant classic Vancouver Real Estate quiz “Crackshack or Mansion?”. You asked your questions and voted up the comments you wanted to hear answers to. Well we’ve sent the highest rated questions on to Petr and Ola and here are their answers:
How long have they lived in Vancouver?
PETR: I have lived here since 2002 and Ola has lived here since she was about 10 years old.
Do they rent or own? (wouldn’t want to presume even the obvious!)
PETR: haha. We rent.
OLA: …one of these “special” 1950’s bungalows.
If they rent, have they been tempted to buy?
PETR: Ola had considered buying a place with her friend in about 2007. I thought the bubble was pretty much at its peak back then and strongly encouraged her to wait. A lot of her friends were getting into the housing market (or thinking about it) and I think the mob mentality almost got the best of her. It didn’t take long to convince it’s a crazy idea (to buy with a friend, and at these prices).
OLA: I shudder when I think about it now. Even if prices kept going up and interest rates stayed low, it’s insane to tie yourself down with other people like that.
Have they considered leaving Vancouver because of RE prices?
PETR: Even though we are convinced this is a bubble that will have a severe correction, the prices will probably still be too high for us. I wouldn’t pay 200,000 for most of those million dollar mansions. The city is nice but it has a lot of competition for the pretty city of the month award. The bubble will pop everywhere so the interior of BC will look pretty good.
OLA: I must admit, owning my dream home has been a fantasy since I was 8. However, my dreams are extensive and require many acres and handcrafted woodwork. It would be a trophy for career success. It would be a frivolous indulgence when I have excess cash flow. Enslaving myself to a peach-coloured 80’s built condo isn’t really a replacement for that.
What is the effect of the RE market on their own social circle? Are friends overextending to buy RE?
PETR: We both know several people that have bought recently. We don’t know their financial situation but based on their careers it’s a safe assumption that they are severely overextended. I hope it works out for them but it likely won’t unless they sell and swallow all the closing costs.
Are they experiencing pressure to buy from family/friends/colleagues?
PETR: Not at all. Most people have no clue of anything outside of the nighly news. They understand their knowledge limitations so they don’t try to convince anyone.
OLA: My step dad tried to pressure me into buying in 2003. But I was a university student on loans then and it couldn’t happen. Hindsight being 20/20, it could have worked out well if I sold at the peak… but it’s hard to gauge the peak. Since the driving force is credit, and the credit pushers do whatever they want, whenever they want, it’s impossible to see the end of the gravy train far in advance. Pete & I were convinced it was the end a few years ago, but then the credit spigots were cranked even farther.
Are any friends leaving for more reasonably priced pastures?
PETR: nope 
OLA: I know some people who bought further east in the Lower Mainland. Save a hundred thousand, take 2 hours of commuting off your life each day. The bubble is the worst here, but it’s Canada wide so there’s not much one can do within the country.
Hi Petr and Ola, thanks for making such an entertaining site, I’d like to know how much exposure this got outside of Vancouver. Do you get many visitors from other countries?
PETR: We don’t know where our hits come from but I suspect most of them are Canadian. We have done interviews on many networks (all but one in Canada). We did a long interview with Al Jazeera English which was very cool. They took us to the houses on the game and interviewed us from the front doors. From what I understand they are doing a very extensive story on the Vancouver real estate market. They asked Garth Turner for an interview but he was unavailable.
OLA: Judging by the forum hits we get, we’re biggest in Vancouver, big in Canada, and also make a splash in other bubble cities. The appreciation seems greatest from people who are out-priced.
Do you have mls number for the mansion in the game since many people are interested in buying after seeing picture.
PETR: Hahahaha. I’m sure the interest is huge. They are easy to find on mls.ca if you put in the price range. There are a few that have been removed and at least one with a reduced price.
I’d like to know if they’ve gotten any hate mail from Crack Dealers who are pissed that they’ve exposed their sham: the selling of a temporary “high” followed by a lifetime of debt, to the unsuspecting masses looking for escapism. Also, please ask the same question again replacing “Crack Dealers” with “Realtors”.
PETR: Hehe, I like the question. No crack dealer complaints, they’re used to being made fun of. I think realtors will soon be pacing up and down east Hastings at 2am asking if you want to buy a house. Maybe the two could work together. You are much more likely to borrow 1 million if you’re high.
OLA: No hate mail to our virtual “face”, but we’ve heard multiple accounts of them rolling their eyes whenever the game is mentioned.
You’ve done a lot of interviews now. Have any of the interviewers tried to justify the prices or is everyone just as shocked as we think they’d be?
Did the dynamic duo have any reservations about doing the project under their real names and has there been any negative or positive feedback of “going public” with the view that real estate in Vancouver is ridiculous.
(answering both at once)
PETR: Most of the interviewers really loved the site. I think a lot of them are renters and related to it just as much as everyone else. I was very cautious at first because I know how much Vancouverites defend their bubbles. I was expecting a lot of backlash when the site started blowing up. I am a teacher in one of the areas that is highlighted in the game and was expecting angry parents and bad press but none of that happened. I have only had one negative comment. One lady was mad that we accused her of having lived in a crackhouse (she got 15 out of 16).
We were misquoted a couple of times by interviewers (probably homeowners). They represented us as being angry, distraught, pranksters. I am anything but distraught; I don’t owe anyone a million dollars.
OLA: one article talked about our site, then quoted some “expert” as saying that well, we’ve learned one of life’s hard lessons: real estate prices are tied to land values. Another “expert” chimed in that Vancouver prices are high because the city allowed too much dense development. If that’s not dredging the bottom of the justification barrel, I don’t know what is! (ED: you mean this gem?)
I believe Crackshack or Mansion, fresh in people’s minds, is helping to burst the bubble psychology and that it will prove a big part of the psychological wave down – where rate adjustments and changes to underwriting kick the financial legs out from under the bubble.
My question is, did you point out the “Emperor’s New Clothes” intentionally to help with that, or was it that you’d reached a point where you just couldn’t be silent about insanity any longer? We know you as readers of Garth’s, and savvy on the fundamentals but your timing and execution also seems perfect, and I am curious as to your thoughts on that!
OLA: Haha, I’ve been calling it the “Emperor’s New Clothes” in all the interviews, but sadly nobody has quoted me for it. I’m glad someone else sees the parallel! We’re totally that little girl in the story, and I think that’s why it resonates well.
PETR: I don’t want to overstate the impact of the game but I do think it will make a difference. Friends of mine bought a couple of months ago and after the game came out they were openly discussing regretting the purchase (when they were celebrating the week before). The timing was pretty much perfect but that was an accident. This bubble is old news to a lot of people that care to do a bit of research, but most people respond best to a silly game with pictures 
At first I felt guilty about posting peoples houses and probably making it harder for them to sell (Ola was wise enough not to have that guilt). I look at it differently now. The bubble was a terrible thing on the way up and will be devastating on the way down. If the combination of all of us can help pop it earlier, we are doing a community service. It’s probably too late though, the bubble is too big and the damage will be severe.
OLA: The worse the damage, the cheaper the scraps
May 11th, 2010 at 5:36 am
And salmon are not returning to the Thames. For three decades the Brits have been stocking the Thames, with no evidence of spawning, the project has been a failure. The stocking was more of a publicity stunt.
May 11th, 2010 at 5:27 am
Patriotz said:
"He’s the guy who is refusing to do the right thing – meeting his contractual obligations. Pre-sales contracts give the developer the right to make changes to the original plans."
Absolutely, the doofus could have saved himself a lot of trouble if he was from a different country. To sue someone across borders is very difficult and costly. If you're going to buy pre-sales for flipping do it from another country, have zero assets or be a straw buyer for organized crime. Or go to you're lawyer hand him/her a check for 10 grand and tell your lawyer to bury Millineum in paper work. Even big companies know when to cut their loses.
As long as the changes to the condominium did not significantly affect the property's market value, or there was not deliberate intentions of the developer to bait and switch what the person was buying, the contract should be completed unless there are other mitigating circumstances. As for showing the document to a lawyer, you will get his opinion of what should be altered in the document. When you take it back to the developer, the developer just says – no. No condo for you.
But there are gray areas in the law. And not all contracts are legal or enforceable. Because if we did not have gray areas then their would be no need for lawyers and the courts.
But before everyone picks apart their favorite phrase, most of this is meant to be sarcastic. One should always try to meet their legal obligations unless they feel that they have been wronged by the other party.
May 11th, 2010 at 4:59 am
Other Ted Said:
"1oo. Gordon c. you had a decent post up until stop burning firewood. Voted you down as that made no sense. Apparently we use to much energy but burning scraps of wood is bad. Biomass is an untapped energy source, everyone should be encouraged to burn wood in their fireplace and use less gas or electricity."
You didn't vote me down – you voted the planet down. Biomass requires a high efficiency furnace which is not a fireplace. The particulates that a fireplace spews may cause respiratory problems in the elderly and people with health issues. To suggest that burning scraps of wood in fireplaces is helpful for the city is obviously ridiculous. People burn all sorts of things besides scraps of wood in their fireplaces.
You don't need a wood burning fireplace – put a sweater on.
May 11th, 2010 at 12:03 am
@Bob Arctor:
He's the guy who is refusing to do the right thing – meeting his contractual obligations. Pre-sales contracts give the developer the right to make changes to the original plans.
Speaking of lawyers, obviously this doofus didn't find it necessary to hire one to give the contract a quick read before he signed it or during the legal one week opt-out period after the signing during which he could have gotten his deposit back, no questions asked.
Cry me a False Creek, baby.
May 11th, 2010 at 12:00 am
@Chip: "I know the conventional wisdom is that we’re destroying the planet the truth is things are getting better all the time. The latest fad for banning CO2 of all things is just a symptom of how deluded we are."
Chip – most of your post is very true. Air quality is getting much better in most areas due to improved pollution controls. I am curious, however, where your information that CO2 is a fad comes from and how this is delusion.
May 10th, 2010 at 11:20 pm
Actually, Gordon, air pollution in Vancouver has been declining for years. Of the 6 pollutants tracked five have fallen and the 6th, ozone, has increased slightly.
http://www.metrovancouver.org/about/publications/…
This is the trend in almost Western cities as our technology continues to improve. London, for example, had their cleanest air recently since some point in the 1500s.
Salmon are returning up the Thames too.
I know the conventional wisdom is that we're destroying the planet the truth is things are getting better all the time. The latest fad for banning CO2 of all things is just a symptom of how deluded we are.
May 10th, 2010 at 10:52 pm
193 net listings today yet inventory only increased by 71…were there that many expires today paulb?
May 10th, 2010 at 10:46 pm
Hey, Kite Towards Solar Flare….
17,434——–17,434——–17,434——–17,434——–17,434
17,434——–17,434——–17,434——–17,434——–17,434
17,434——–17,434——–17,434——–17,434——–17,434
17,434——–17,434——–17,434——–17,434——–17,434
17,434——–17,434——–17,434——–17,434——–17,434
17,434——–17,434——–17,434——–17,434——–17,434
17,434——–17,434——–17,434——–17,434——–17,434
17,434——–17,434——–17,434——–17,434——–17,434
17,434——–17,434——–17,434——–17,434——–17,434
How's you english now? I noticed you now have learned to spell "Fook"
May 10th, 2010 at 10:39 pm
Here's the photos from earlier today, can't argue with the message…
http://picasaweb.google.com/lh/photo/P7aydKE7pi_v…
http://picasaweb.google.com/lh/photo/MPxen8LvZpFf…
May 10th, 2010 at 10:37 pm
I'd love to see a real estate rollercoaster that shows the ride down that occured in Las Vegas, Phoenix, or San Diego after their markets peaked. Perhaps it would give us all a nice visual of the wild ride that awaits us here in Vancouver.
May 10th, 2010 at 10:34 pm
1oo. Gordon c. you had a decent post up until stop burning firewood. Voted you down as that made no sense. Apparently we use to much energy but burning scraps of wood is bad. Biomass is an untapped energy source, everyone should be encouraged to burn wood in their fireplace and use less gas or electricity.
May 10th, 2010 at 10:04 pm
SE said: "What does he mean ‘we’? I thought the ending of the rollercoaster video was very clearly alluding to ‘underwater’ mortgages, i.e. people who owe more for their houses than they can sell them for. It doesn’t take much of a correction to drop a lot of recent buyers into that situation."
Solid point. Touchy subject Re is. People are going to lose (or never had) perspective and the ability to perceive events from a non-invested viewpoint. There are all kinds of similar (not necessarily true) assumptions made out there: renters are poor/can't afford to buy, we all lose when RE goes down, etc. etc.
May 10th, 2010 at 9:27 pm
@ibought3: “The only thing I had a problem with is that [it implies] what really is going to happen is we’re going to fall off the roller coaster and sink into the water,”
What does he mean 'we'? I thought the ending of the rollercoaster video was very clearly alluding to 'underwater' mortgages, i.e. people who owe more for their houses than they can sell them for. It doesn't take much of a correction to drop a lot of recent buyers into that situation.
Don't you think it would be a similar sinking feeling to that in the video to sit in a house that you're paying more than its worth year after year and the price is dropping? That's whats happening in all the big bubble markets in the US and about to happen here.
The only way that he should be referring to 'we' is if Tsur is chin-deep in debt and set to be underwater on his mortgage, other than that there is no 'we'.
May 10th, 2010 at 9:17 pm
@Urbain (at 7:48pm), regarding "High on RE in China", you missed the absolute best quote in the story (underneath Wang Yong's photo):
"Estate agent Wang Yong says now is the best time to buy".