Where does it get you?

My girlfriend and I aren’t looking to do anything outrageous. All we want to do is buy a detached home within an hour commute of her Richmond employer. It doesn’t have to be anything fancy. A 25-year-old, 1700 sq ft rancher that needs a little fixing up would be just fine.

Problem is, we want to buy with cash. We just sold our home in Delta for $650,000 because we no longer wanted to make $800 mortgage payments, especially with all the telltale signs of a correction/popping bubble in the air. We walked away with $450,000 cash and no debts.

But what have we been able to find for nearly a half million dollars? In Vancouver/West Van/North Van/Burnaby, nothing. In Richmond, a one-bedroom crack shack tear-down where airplanes fly so close you can count the rivets. In White Rock, $450,000 buys you a either a 600-sq ft “cottage” on its last legs or an empty view lot.

Yes, we can find something in Surrey, but it’s in a neighborhood where you’re scared to walk down the street. So that leaves us with Langley.

Here, $450,000 buys you an old yet serviceable detached home in a bland, distinctly blue-collar neighborhood. Far from what we’d prefer, but at least there’s an iota of hope that something will pop up that isn’t directly across from a school or on a busy, noisy, truck-filled thoroughfare. Of course, we’d then have to sink a few tens of thousands into the place so it doesn’t look like a total relic, but there is hope. Moreover, you can actually see signs of a correction out there. Listings are staying on the market for months at a time and price reductions have begun.

And that’s what give us pause. If the correction is already full steam ahead on Vancouver Island, the Okanagan, and even as close as Chilliwack and Abbotsford, we’re thinking it won’t be long until its tentacles reach further into greater Vancouver.

So, given that we’re both just over 50 years of age and don’t want to have all our retirement money trapped in a depreciating older home in the distant suburbs, our thoughts have now turned to renting. The problem here is that we need at least a 3-bedroom place. She’s an artist on the side and I am a writer, so we both require some sort of home office. But a three-bedroom rental that’s not a total piece of crap will cost us in excess of $1800/month. Worse than that, the most we can make by investing our life savings in a no-risk high-interest savings account is 2%. A ridiculous, measly 2%.

If we’d been born in the US, we’d flee immediately to Arizona where we’re not socked in by 8 months of rain every year, where you can buy a case of beer for a third of what it costs here, and where you don’t need an extra mortgage for groceries every week. And where a nice house in a good neighborhood runs just about $175,000.

If my girlfriend could transfer away from Richmond, we’d go to the Okanagan, where $450,000 now buys a beautiful, upscale home with a lake view. Or Vancouver Island, where we could likely buy what we need, with an ocean view to boot, for $350,000.

Instead, we’re here. And it hurts. We’re not rich, but we’re not poor, either. And we’ve both been thrifty all our lives. We’ve done it the way they teach you to do it. And now we have a half million dollars and no debts. But it seems that half million isn’t enough. Not yet, anyway.

I don’t want to wish ill will upon anyone, especially someone who bought at the highs with a 5% downpayment and is now carrying a 40-year mortgage that covers 95% of their house. But I do wish for a return to normalcy. They say Vancouverites spend 74% of their income on their homes. They say that Canadians are more in debt per capita than residents of any other nation on earth. But my girlfriend and I are neither of those. We’ve been smart, and we’ve lived within our means. And all we want is a decent, affordable, midlevel house in a solid neighborhood that won’t fall down and is near enough that she can commute to her place of work. It doesn’t seem like much to ask.

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VHB
Member
VHB

October Projections for month totals

Days elapsed so far 3

Days remaining 18

Average Sales this month 116

Average Listings this month 222

Projected sell/list 52.0%

SALES

Projected month end total 2082 +/- 859

95% Conf Interval lower bound 1570

95% Conf Interval upper bound 3288

NEW LISTINGS

Projected month end total 4002 +/- 1809

95% Conf Interval lower bound 2860

95% Conf Interval upper bound 6478

MONTHS OF INVENTORY

Inventory as of September 30th 15401

MoI at this sales pace 7.40

Note: This is a simple linear projection of month end totals.

This provides the answer to the question

"What will month end totals be, if things continue

on the same pace we've seen so far this month?"

paulb.
Guest
paulb.

New Listings 208

Price Changes 113

Sold Listings 133

oneangryslav2
Guest
oneangryslav2

@chip: Fair enough; I had assumed that you lived somewhere in the Lower Mainland and was curious as to where one could rent a 5-BR home with an ocean view in the LM for less than 2000 per month.

chip
Guest
chip

@oneangryslav2:

An Angus Reid poll a few years ago found only 59% of Canadians believe in evolution and 42% believe humans coexisted with dinosaurs.

And recent poll polls by Ipsos have found only 4 in 10 Canadians know who Sir John A Macdonald was, that the second most recognized Canadian after Terry Fox was Celine Dion and that 51% think the prime minister is directly elected by the people.

I'm an atheist and evolutionist but I wonder if ignorance in civics is a more direct concern for society than a general ambivalence about evolution.

chip
Guest
chip

@oneangryslav2:

It's on the Island. Rather not say where exactly in case realpaul shows up at the door tomorrow with tar and feathers, asking me to storm the legislature with him.

patriotz
Member
@mad Albanian: No, that does not make you selfish, but you are completely missing the point. I'm not missing the point at all. Inflated house prices are the fault of the buyers, not the sellers. Nobody has to buy anyone's house that's for sale. There is nothing moral or immoral about buying or selling a house (or a stock) at the market price. Or being unwilling to buy or sell at any given price. Only one choice between buying and selling is right at any given time, but nobody knows for sure what that is. If fewer people were willing to sell at the top the top would get even higher. That's not hard to figure out is it? I agree there's a difference for the stock market in that the government isn't backing up up my margin loan. And… Read more »
Patiently Waiting
Member
Patiently Waiting

@mad Albanian: I need to eat, but it doesn't mean I need to own a farm.

townhomer
Guest
townhomer

@Starving Artist:

Half a million dollars capital-gains free, boo freakin hoo

Don't you just quietly wish those kinds of gains was taxed the shit out of?

This would put an end to this circus… actually it would not allow it to start to begin with.

Ask Germans why they have affordable housing, no bubble and do not really like to own any real estate much…

mad Albanian
Member
mad Albanian
@ patriotz "I just sold a stock today for a good profit and I’m not buying again until prices go down a lot. Does that make me “selfish”? " No, that does not make you selfish, but you are completely missing the point. Buying a stock is not the same as buying a house in our interconnected society. House is one of the necessities of life, and we as a society and taxpayers have been fooled by our government and have pooled financial resources together through CHMC to make housing available to everybody. So, when you buy a house with a government insured mortgage is not the same as buying stock with your brokerage account. You will understand that better when Canadian taxpayers are liable again for CHMC mortgage losses and will have to foot the bill, just as they… Read more »
oneangryslav2
Guest
oneangryslav2

@someoneturnonthebigot:

“I remember reading a poll in 2003 that indicated that a majority of Americans believed that Saddam attacked the World Trade Centre.

You may as well poll a sample of monkeys.”

Yes, because african americans love being compared to monkeys.

Ummm…there was absolutely nothing in BPoM's response that even hinted at what you're suggesting. In the parlance of teenage vernacular, "he who smelt it, dealt it."

In other words, methinks that your best means of finding the bigot is to buy a mirror.

Anonymous
Guest
Anonymous

@someoneturnonthebigot:

"Yes, because african americans love being compared to monkeys. "

Where on earth was that comparison made?

someoneturnonthebigo
Guest
someoneturnonthebigo

@bestplaceonmeth

"I remember reading a poll in 2003 that indicated that a majority of Americans believed that Saddam attacked the World Trade Centre.

You may as well poll a sample of monkeys."

Yes, because african americans love being compared to monkeys. Nice one. Lets go after the jews next. You start, funny man. You obviously have jokes.

This american is in breathless anticipation of your rapier wit.

patrick
Guest
patrick

Most of Japan's debt is internal. Japan is much stronger than most westerners realize. I travel to Japan frequently and nobody adjusts to change like the Japanese. It helps when your own government isn't trying to fuck you on every level and letting every large company fuck you also.

Best place on meth
Member
Best place on meth

@patriotz:

I remember reading a poll in 2003 that indicated that a majority of Americans believed that Saddam attacked the World Trade Centre.

You may as well poll a sample of monkeys.

SuperSmartBull
Guest
SuperSmartBull

This story sounds a lot like someone who wrote to Garth a couple months back about what to do with their house, pretty sure it's the same guy. Predictably Garth told him he should sell sell sell and diversify. Why is he coming here for advice? Just follow Garth's one size fits all strategy and life is good.

Why did you sell exactly? You lost me at "I don't want to make $800/month mortgage payments".

patriotz
Member

@Drachen:

I remember reading a poll in 2007 that indicated that a majority of Americans believed that house prices were still going up.

A lot of people really are slow to catch on.

Drachen
Member

@Anonymous:

That's the best data I know of. It does not appear that it's always a direct influence on prices.

Prices are sticky, even if inventory goes crazy it takes a while for prices to start dropping significantly.

Psychology plays a larger role than actual real-world numbers. Perceptions mater more than the actual state of the market, if the majority of people still haven't caught on the market will not fall quickly, it normally takes six months to two years for things to really sink in and begin the true avalanche of prices.

realpaul
Guest
realpaul

Dude….selling at the top was either good or lucky…I don't know you. But to buy back in at the tippy top is just stupid and that goes for everybody. Rent…go on holiday for a year….be happy you saved some money…you either need a whole lot more of something or a whole lot less of whatever you're on…..but as I said…I don't know you.

Patriotz had it right……wait for a better opportunity to come along…they always do.

Junius
Guest
Junius
#60 I See Debt People, You discussed, "I met a realtor in Merritt a couple years ago. Apparently Merritt was undergoing its own mini price-boom. I asked her why RE is Merritt, of all places, was doing so well. She said that a lot of her buyers were Vancouver residents buying “investment properties” in Merritt because they found the prices to be much more affordable." We have friends that got involved with a development in Merritt. The developer turned out to be a con artist and they lost their shirts. It was a terrible mistake for them. Glad we passed at the time as we had other interests. However at the time it all look good on paper. This is what happens in a euphoric Real Estate market. Everything sells as it all looks so solid and inevitable as a… Read more »
Vanrod
Guest
Vanrod

@chip: Honestly, nobody cares how much you spend on gardening. Your a pawn in this capitalist system just like 99% of us, myself included…welcome to the club.

patriotz
Member

@mad Albanian:

Wishing for a market crash now that you bailed out after making half a million shows your true selfish nature and flipper attitude and all what is wrong with our society:

I just sold a stock today for a good profit and I'm not buying again until prices go down a lot. Does that make me "selfish"? Someone who won't buy something except when the price is reasonable is being smart, not selfish.

You have it completely backwards. It's the people who buy low and sell high who are doing the right thing. They make capital available at market bottoms when it's needed. It's the people who buy houses (or stocks) at high prices and expect to sell them for higher prices for no good reason who are responsible for our current problems.

oneangryslav2
Guest
oneangryslav2

@chip:

My family just moved back to BC and we’re happy to rent. We have an ocean view in an almost new million dollar, 5 bed home and pay a grand total of $1750 in rent. Since moving in a few weeks ago, we’ve had the gardener by twice, the home vac replaced, all the windows done, the fireplaces and vents cleaned, some blinds replaced and someone will be by later to replace the dryer.

Any minute now, one of the bovines will be along to ask you how it is renting your basement suite, because in their world the only rentals are basement suites. Where do you rent?

Anonymous
Guest
Anonymous

@Drachen:

Thanks, but I was more interested in seeing how prices changed as MOI ramped up to 20 and stayed there. For that I'd need precise figures from last month going back about 3 years, for all dwelling types.

chip
Guest
chip
"And all we want is a decent, affordable, midlevel house in a solid neighborhood that won’t fall down and is near enough that she can commute to her place of work. It doesn’t seem like much to ask." Well, I'm sure some buyers in Delta were asking the same thing in going through your open house. Look, you did well. You saved, incurred no personal debt and sold when things looked dicey. Now sit the market out and and feel good that you will come out of this cycle better than most, much better. My family just moved back to BC and we're happy to rent. We have an ocean view in an almost new million dollar, 5 bed home and pay a grand total of $1750 in rent. Since moving in a few weeks ago, we've had the gardener… Read more »
GStrader
Guest
GStrader

@Patiently Waiting: Must mean they think things won't be going well in Whistler in the future. Fortress is notorious for IPOs at the top of valuation. Look at their own IPO and that of whatever they internally manage (like Newcastle REIT) for a hint of what might happen if you buy into it.