A Tale of Two Cities
Average Vancouver detached prices to the moon! Check out Larry Yatkowsky’s graph.
Alas all is not well in BC. The Vancouver Sun shows a few Okanagan MLS listings, highlighting what a cool 550,000 smackeroonies gets you, compared to the EastVan McGill Speedway placeholder (pictured below). Kelowna has been experiencing a significant inventory glut over the past year and prices are starting to fall:
While Metro Vancouver’s home prices continue to rise, prices in the Okanagans have experienced a significant slide, local realtors said Monday.
One local agent says vacation properties are “feeling the pinch,” as buyers focus on their home markets during the economic turmoil in the past few years.
So the euphemism du jour is “pinch”. Not exactly the best of times up there. Let’s look at a couple of these “vacation” properties. What’s the difference between a vacation property and a principal residence exactly?
2919 MCGILL ST Vancouver
545 San Cabrio Court, Kelowna area
965 Monashee Place, Kelowna
Ah but location is everything you say. Meh, I’ll use these props as a baseline and revisit what $550K buys in our Two Cities later on this year.
“My real estate agent is VERY pushy. He told me: you are NOT buying a dwelling, you are getting hold on an INVESTMENT for 5 years, until you can find the next SUCKER to sell it to, at an inflated price.” | Vancouver Real Estate Anecdote Archive Says:
February 5th, 2011 at 7:50 am
[...] turtle at vancouvercondo.info February 2nd, 2011 at 6:34 pm- “My friend Stan sat down today, with an anxiety attack: he is about to buy a 1 bdrm condo [...]
Flip Attempt – Potential $233K Profit In 4 Months | Vancouver Real Estate Anecdote Archive Says:
February 5th, 2011 at 6:10 am
[...] Crash at vancouvercondo.info 2 Feb 2011 4:19pm – “Here’s an attempted flip: 4842 Victory Street Burnaby MLS #V861597 Sold Sep22/2010 for $655,000 now listed for $888,000. House is a teardown or in need of major renovation. Was an estate sale originally in 2010 I think.” [...]
February 3rd, 2011 at 7:02 pm
@vreaa:
Of course the housing appreciation is not 'income' but unrealized (and collectively unrealizable) capital gains.
Such is the material that this house of cards has been built from.
February 3rd, 2011 at 3:28 pm
@Lilypad:
No, it is not a free market, which is a shame, but restricting the fees that can be charged by businesses represents more state intervention, not less. I know it makes it easier if you consider every instance of reduced choice to be communist and every short lived burst of individual satisfaction as capitalist, but it's not that simple. (See: http://en.wikipedia.org/wiki/Economics_in_One_Les…
February 3rd, 2011 at 3:14 pm
@Anonymouse: If we continue on pace for inventory accrual we will be at 13K or so by the end of the month. That would put MoI at 4.6 with 2800 sales.
This is indeed lower than 6, so you have to expect prices up a few notches.
A precondition of price drops is a big inventory stock. We aren't there yet, so no price drops yet.
February 3rd, 2011 at 3:14 pm
@blueskies:
All your losing bears are pinning the hope on China hei ?
I am surely to tell that even China raise its int to moon level,no one could stop the rolling tank which carries tons of cash enough flooding the whole world.When you guys can face the raality and admit defeat ? Vancouver is unique market cos it is dominated by Chinese buyers either from local or abroad.This century belongs to China.
February 3rd, 2011 at 3:04 pm
@Anonymouse:
"A musician drove his statistician friend to a symphony concert one evening in his brand new mid-sized Chevy. When they arrived at the hall, all the parking spots were taken except one in a remote, dark corner of the lot. The musician quickly maneuvered his mid-sized Chevy into the space and they jumped out and walked toward the hall. They had only taken about ten steps when the musician suddenly realized he had lost his car key. The statistician was unconcerned because he knew the key had to be within one standard deviation of the car. They both retraced their steps and began searching the shadowed ground close to the driver's door. After groping on his hands and knees for about a minute, the musician bounced to his feet and bolted several hundred yards toward a large street light near the back of the concert hall. He quickly got down on all fours and resumed his search in the brightly lit area. The statistician remained by the car dumbfounded knowing that the musician had absolutely zero probablity of finding the key under the street light.
Finally, after fifteen minutes,the statistician's keen sense of logic got the best of him. He walked across the lot to the musician and asked, "Why in the world are you looking for your key under the street light? You lost it back in the far corner of the lot by your car!"
The musician in his rumpled and stained suit slowly got to his feet and muttered angrily, "I KNOW, BUT THE LIGHT IS MUCH BETTER OVER HERE!!"
http://my.ilstu.edu/~gcramsey/VarCov.html
February 3rd, 2011 at 2:54 pm
@Renting:
Finally someone with a brain. Don't forget the brown dudes are buying too. We are not rich, but we have many. With so many of us, there is got to be some dumb ones buying now.
February 3rd, 2011 at 2:43 pm
#175 Best place on meth Says: "One last vid from a concerned citizen who fears Vancouver is already lost."
Sympathetic, but way too many factual errors for my taste. Bailed early. If I had a Youtube account I'd reply to his rhetorical 'where is anyone talking about this problem' question.
February 3rd, 2011 at 1:44 pm
@VHB:
"MoI at this sales pace 3.94"
Wow.
February 3rd, 2011 at 1:40 pm
@1:
I am in school fulltime so I don't really have a "from the trenches" perspective, however if I had to guess, I would expect a busy next couple months with unusually high sales and listing numbers; followed by a huge drop in demand this summer and significant price declines. I expect at least a 30% drop within a couple years.
February 3rd, 2011 at 1:27 pm
@N: N, to be quite honest, I think you are the misinformed one here on the internet fee debate (newsbreak: internet providing is not a free market in Canada)
See here for a debate on the issue: (go to 35:35)
http://tinyurl.com/648yhr9
Go George Burger!!!
February 3rd, 2011 at 1:19 pm
Interest rate rise could trigger house price collapse, report says
http://ca.news.yahoo.com/interest-rate-rise-could…
' A new report predicts that Canada's housing market is poised for a collapse and is only waiting for the trigger of rising interest rates expected for later this year — a view that flies in the face of many other forecasts. '
but but it's different here!!!!
February 3rd, 2011 at 1:02 pm
The fact a guy like Ozzie Jurock is still around shows how stupid people are in Vancouver. People actually pay him to take a course that teaches you how to buy real estate FROM him. Ozzie Jurock is the biggest real estate flipper in all of BC. He makes Tom Vu look like a well respected financial advisor.
http://classactionozzie.com/
February 3rd, 2011 at 1:00 pm
One last vid from a concerned citizen who fears Vancouver is already lost.
http://www.youtube.com/watch?v=AVH8yVX3E1A
February 3rd, 2011 at 12:48 pm
How can people listen to that corrosive teutonic accent of Ozzie is beyond me. especially when he is speaking his book so blatantly. yeah, new york, paris , london and vancouver. What a pice of shit motherfucker.
February 3rd, 2011 at 12:35 pm
@paradox:
"We already pay the highest internet fees on the developped world already. Now they want to put everyone on interent rationing, fxxking comunist country we are becoming!"
You are mixed up on this one. The market players like Bell want to charge more. In a free market, they would get to do that. The ruling that people are mad about says that people can sell what they want for the price they want. The Harper government is coming in and saying, No, we the government will decided who pays how much for what, and we will not allow Bell to charge smaller companies on a pay-per-use basis. So yes, we are becoming pinkified here, but the pinko side is the side that wants to keep prices lower (in the short term for a specific group — see Economics in One Lesson.)
February 3rd, 2011 at 12:33 pm
#170 IT_Pro,
I agree. BP on Meth is on fire today.
February 3rd, 2011 at 12:25 pm
Thanks to that lawsuit against him, Jurock now lays low and does his shit from home.
http://www.youtube.com/watch?v=L7dVD4TICvg
You can't hide forever, Ozzie!
February 3rd, 2011 at 12:12 pm
@Best place on meth:
You're crackin' me up today
February 3rd, 2011 at 12:05 pm
What I thought was going to be a market update on the Fraser Valley turned out to be another fear-mongering piece from yet another low life realtor complete with scary camera angles.
http://www.youtube.com/watch?v=JJ0XouOE4TQ
Seriously, I fucking hate these people. I have more respect for the local gangsters.
February 3rd, 2011 at 11:52 am
mike stew, today is Chinese new year, you picked one fvck of a day to provoke me with your cheap attempt at some free exposure.
I have placed a curse on you…..
Real estate will be your vehicle to poverty.
444444444444444444444444444444444444444
February 3rd, 2011 at 11:46 am
I don't doubt MS's anecdotes. The market in WV VW, VE, Richmond, and BU is hot.
But outside of that it is not. Kelowna and VI are already toast, all would agree. Now the suburbs are cold. It is getting closer to the core.
knock knock
February 3rd, 2011 at 11:23 am
Seriously Mike Stewart how come you don't work in film anymore?
February 3rd, 2011 at 11:18 am
February 2011 month-end projections
Days elapsed so far 3
Days remaining 17
5 Day Moving Average: Sales 142
5 Day Moving Average: Listings 285
SALES
Sales so far 461
Projection for rest of month 2421
Projected month end total 2882 +/- 659
NEW LISTINGS
Listings so far 884
Projection for rest of month 4852
Projected month end total 5736 +/- 576
Sell-list so far 52.1%
Projected month-end sell-list 50.2%
MONTHS OF INVENTORY
Inventory as of February 3, 2011 11342
MoI at this sales pace 3.94
Inventory is growing quickly. We have a shot at a 2-party month!
February 3rd, 2011 at 11:05 am
PaulB
Looks like 12,000 will be here before mid-month.
Any thoughts on the general market from your point of view, or too early to call any meaningful trends?
Looking at the real estate stats, wow lots of markets are underwater from levels 3 years ago. Just Richmond and Van West holding things up. But if you look at other markets (on the whole), not looking that great.
Interesting. Imagine how the YoY and 3 year stats look over the months ahead, I can't see the picture improving.
Mike, I've met him, he's a hustler, good for him.
I think things weaken as we progress through the year, gotta get through the 35yr amorts and hit a few interest rate hikes…that said, the market already looks tepid to me.
February 3rd, 2011 at 10:54 am
Anecdotal evidence on my street suggests that the market is still hot. Lots of sold signs everywhere.
On another topic, what the hell is going with this pay per interent usage?
Are they are trying to screw every canadian more than they already have?
We already pay the highest internet fees on the developped world already. Now they want to put everyone on interent rationing, fxxking comunist country we are becoming!
February 3rd, 2011 at 10:36 am
@Mike Stewart Vancouver Realtor: Mike, I completely believe you. However, this is what makes people like me believe Vancouver is a bubble ready to pop. I have a real honest question for you: Do you really think this is sustainable? The reality is that everyone collectively decides that their property is worth crazy amounts, and anyone who wants to buy has to pay those crazy amounts. If you are already in the game, this is OK because you also want a crazy amount for your property. But how about first time buyers. At some point don't you think they will collectively say, "Screw it … keep you house … I'll rent thank you!" DO you not think this will happen? Do you think everyone will be house horny forever? My final question: What do you suggest a starting family with household income of 75K should buy in this city?
February 3rd, 2011 at 10:32 am
@The Leak:
This happened to me in 2004/2005. The condo we were living in for two years had about 3 different owners. Some who never even came to see the place. We were just informed by the real estate agent/property manager that the place had been sold and we were to make the rent cheques out to a new owner. Odd. When we finally moved out, the building manager (who had something to do with the strata, I guess) asked who owned the place, because they were behind in their strata fees. I wonder how many times that place has been flipped in the last five years.
February 3rd, 2011 at 10:22 am
I've been reading some anecdotals by renters lately. A few posters have talked about how investors have swooped in on a few occasions to flip the property the renters were living in…meanwhile the renters just stay for the next flip. The investor holds for a few months and then flips to another sucker. It is very apparent that much of Vancouver real estate is currently in a Ponzi scheme.
February 3rd, 2011 at 10:17 am
@4444:
>>>The market is a dynamic thing that is impossible to predict. Be VERY wary of anyone who says they can accurately tell you the future.<<<
Oh crap, that means I can't count on the real estate industry's prediction of a 3.72% gain in 2011.
&&&&&&&&&&&&&&&&
LMAO – priceless!
Don't you know – only let the experts predict like professionally trained realtors!
February 3rd, 2011 at 10:15 am
@Mike Stewart Vancouver Realtor:
Mike,
I think you've mistaken us for the cow-eyed dumb asses you normally deal with in your business, or perhaps you're just on the wrong website without realizing it.
Nobody here wants to buy a $700K piece of shit on Hastings or anywhere else in this city.
Don't you have balloons to tie?
February 3rd, 2011 at 10:06 am
Ha!
I just did an analysis on a house down the street on McGill from the one pictured above and used the one above in my analysis.
All the comparable houses that were showing active I called on were sold for full price (1524 E Pender & 2594 Triumph Sold Full Price 2962 Trinity Accepted Offer) or had an accepted offer.
The market for houses under $700K in Hastings East is tight and moving away from where a lot of you want it to be!
February 3rd, 2011 at 10:01 am
"Since I bought my home my 'income' has been 40% from my job and 60% from housing appreciation."
http://wp.me/pcq1o-1Oi
The amount of "income" from appreciation of current market value of their house should be ringing alarm bells for this owner, and telling him/her something about the market, …but it isn't.
February 3rd, 2011 at 9:57 am
@DaMann: Funny factoid. When the bubble burst in California, there were as many real estate agent licensed in California as there were real estate transactions in the state for the entire year.
One might be able to identify asset bubbles by the associated occupational bubbles.
February 3rd, 2011 at 9:56 am
@4444:
>>>The market is a dynamic thing that is impossible to predict. Be VERY wary of anyone who says they can accurately tell you the future.<<<
Oh crap, that means I can't count on the real estate industry's prediction of a 3.72% gain in 2011.
February 3rd, 2011 at 9:55 am
@Renting:
Or perhaps they're just jumping on any calendar event in order to generate interest surrounding a promotion? Maybe they'll be doing Valentine's and Easter specials too?
February 3rd, 2011 at 9:51 am
New Listings 267
Price Changes 47
Sold Listings 104
11342
February 3rd, 2011 at 9:32 am
I have better questions.
1. If the Chinese thing is true why are they sending you emails. In the 90s rich Hong Kong Chinese bought the whole buildings in hours.
2. Why are they giving stuff away in order to attract buyers? Rich Chinese pay over asking and they don't need a free gift.
The promotion and email to you shows sales are slow and the Rich Chinese are not buying. The whole promotion is designed to send the message to you and motivate you to buy because the rich Chinese thing is a marketing ploy.
There are of course lots of people of Chinese decent in Vancouver who are buying just like every other race. They are doing it with highly leveraged mortgages just like everyone else.