What to do about falling prices.
No Longer Looking points out this great editorial in the Vancouver Sun. I’m trying to figure out if it’s intent is the calm people about the Vancouver real estate market slow down, or freak them right out:
I penned this editorial to calm fears that the real estate market in Vancouver was collapsing and I’ve added some brief comments at the end.
Living in Canada’s most expensive housing market, residents of the Lower Mainland are obsessed with real estate prices and mortgage rates.
And no wonder. The benchmark price for detached homes in Metro Vancouver last month was $793,193. A down payment of 25 per cent would leave the buyer with a mortgage of $594,894, in which case a difference of just one percentage point in the interest rate can vary monthly payments by $500.
In comparison, the average price of a house in the Greater Toronto Area is $420,482. The standard down payment brings the mortgage to $315,316 and the interest rate impact to $260.
They recommend NOT walking away from an underwater mortgage – just keep paying more than they house is worth, after all:
..it might be a few years, perhaps a decade, before real estate prices return to the heady levels of 2007. But there’s a good chance they will.
August 12th, 2010 at 7:31 am
'..it might be a few years, perhaps a decade, before real estate prices return to the heady levels of 2007. But there’s a good chance they will.'
I agree. Given enough time house prices will get back up to that level – it's the nature of inflation. 10 years at 3% per year inflation should bring them down to a more affordable level.
August 11th, 2010 at 2:32 pm
Yalie, that video is *perfect*. very funny.
tincup: thanks! I have been watching this one for a while, but had completely forgotten the starting price.
Jesse: Good points. Something doesn't seem quite right, beyond just the description.
August 11th, 2010 at 2:16 pm
VultureBoy, that one was first listed on May 17th for $818k.
August 11th, 2010 at 2:14 pm
Infamous is when you're so famous, you're INfamous!
http://www.youtube.com/watch?v=egLjBsK9K8o
August 11th, 2010 at 2:02 pm
Paulb & PW:
So perplexing to me…why would they have to drop the price 20k on a place when it is sitting beside an "infamous" lake? (LOL)
798k here (june 30): http://vancouver.en.craigslist.ca/van/reb/1819452…
August 11th, 2010 at 2:00 pm
@VultureBoy: That is freaking hilarious!
I remember touring a few places like this: newly renovated with laminate flooring throughout and undeniably vacant. That was enough of a taste that these places are for mugs. Check the walls for moisture damage is all I can say.
August 11th, 2010 at 1:39 pm
@Vulture Boy
That's good.
I also get a chuckle out of ads that talk about houses in the "HOT Renfrew area".
August 11th, 2010 at 1:33 pm
@VultureBoy: Lmao!!
August 11th, 2010 at 1:24 pm
@patient renter:
Now I agree that is bad copy. But in the same area I think this stinks worse:
"only steps away from infamous Trout Lake"
see http://www.realtor.ca/propertyDetails.aspx?proper…
What sort of idiot agent/seller refers to the lake adjacent to the listed property as "infamous"?!?
August 11th, 2010 at 1:09 pm
I love this listing for a completely overpriced house near Commercial Drive.
899 000 for such an average house. Absolutely absurd, I wouldn't pay more than $550 000 for it.
But the last line in the listing is priceless:
http://www.realtor.ca/propertyDetails.aspx?proper…
'Live in this home today and build a massive apartment building in the future.'
Who writes these things???!!!
August 11th, 2010 at 12:58 pm
"Lenders say they are trying to recover some of that money but their success has been limited, in part because so many borrowers threaten bankruptcy and the collateral in the homes backing the loans has often disappeared.
The result is one of the paradoxes of the recession: the more money you borrowed, the less likely you will have to pay up."
-Calculated Risk
Yep. I owe $100,000, and I'm the one to worry, I owe $100,000,000 and YOU worry!
August 11th, 2010 at 12:54 pm
"I see red people.
Well, "Better red than Socred" as many used to say in this province.
August 11th, 2010 at 12:42 pm
@Best place on meth: I see red people.