The Middle Class is Priced Out

The CBC has an article looking at the situation for middle-class home shoppers in Vancouver BC.  They’ve noticed that incomes have dropped since the 70s while prices have risen.

So if you’re middle class in Vancouver you’re either priced out forever or something is going to change.

From that article:

Lawyer Nathan Hume and health researcher Angie Chan live with their two young children in a rented two-bedroom apartment in Vancouver.

With two good jobs, they had hoped home ownership in the city would be within their reach. But sky-high prices in Vancouver have left them without any options.

“We have a number of friends who are in the same situation as us — highly educated, they’ve got good jobs, they have young kids, and they’ve all left the city,” said Chan.

Hume says it is likely they could get a mortgage to buy something, but they don’t think that’s smart, when it would mean foregoing savings for retirement and their childrens’ education.

Any readers here have friends who have moved away from Vancouver simply do to house price dynamics?  Any of you considering a move away based purely on the cost of housing?
Read the full article at the CBC web site.
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Whybuywhenucanrent
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Whybuywhenucanrent

My wife and I make approx $250K between us. We can’t buy nor do we want to at these crazy prices. We are renting a $2.4M house on the west side for 1/3 the monthly payment that a mortgage would be. No maintenance, no stress, we are very happy.

Not sure why everyone is so obsessed with owning, it is overrated.

Anonymous
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Anonymous

@Whybuywhenucanrent:

You can’t buy with $250k/yr?

BS.

You choose not to, but that’s different from can’t.

Whybuywhenucanrent
Guest
Whybuywhenucanrent

We can’t buy on the west side which is where we want to live. Do the math. We could buy a $1M shithole somewhere over a bridge.

RentersRant
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RentersRant
Here is the thing, this is going to sound harsh, but I am AMAZED at how many people I meet that don’t seem to have passed business math (future value calculations) 099. The very insightful key in this article is: “when it would mean foregoing savings for retirement and their childrens’ education.” This is uniquely wise! Could they outlay the cash – sure. But could they wisely AFFORD it, no. And I know $250k income sounds extremely high but if you don’t have a government public service pension that guarantees 65% or more indexed from the day you retire (TEACHERS!!!)you should have saved in the range of $1.8 to $2.5M (yes with an M) if you want to have any sort of non-poverty stricken retirement. (Meaning retire 58-60, do some traveling and don’t worry about expensive health aides. Live a… Read more »
ReadyToPop
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ReadyToPop

So if you’re middle class in Vancouver you’re either priced out forever or something is going to change.

Something is going to change. The middle class is the bulk of the market.

Anonymous
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Anonymous

i left 5 years ago after (a) wanting to broaden my personal and professional experience overseas and (b) being totally frustrated in feeling hopeless in trying to save money fast enough to buy a single family home somewhere within reasonable (45min) driving time of the city and have a mortgage we can manage. we are a family of 5 looking for single family north van on a budget which can afford 750. figure we’re short 300-400k. will stay overseas for another 3-4 years where we can save and see the world.

VMD
Member

[Canadian housing bubble enters world stage, again]
Marketwatch: March 14, 2012, 12:02 a.m

“Canada’s housing market flirts with bubble”
After a brief dip, home prices have shot up; incomes haven’t kept up

Rising home prices over the past decade, combined with mounting household debts, have fed concerns that Canada’s housing market has formed a bubble that’s about to burst.
http://www.marketwatch.com/story/canadas-housing-market-flirts-with-bubble-2012-03-14?pagenumber=1

registered
Member
registered
One of my field’s top postings recently became available so now I’m typing this from a mid-town Toronto office. My income is moderately dependent on the general state of the economy and I make good money, a deadly combination in Vancouver’s near future. It became obvious last year the situation is deteriorated well past any question of competence or tenure. When it hits the fan Vancouver businesses will be forced to do anything possible to stay solvent. Now I’m renting a QUIET detached in better shape and double the floor space of my Van wood frame townhouse, for $100 more a month. My drive is typically 15 minutes. The detached bungalows in my decent area start in the mid $300s. Off-road paths for the fixie are a kilometer away. It’s been sunny and 15 for the past few days. People… Read more »
yvr2zrh
Member

Well – interview with Swiss Company was earlier this week. Likely departure in Summer. Work at the top of my field, about 15 years experience including 10 internationally. Just not sure I have the patience to wait out the house price / income adjustment. So- Could be gone by mid -summer. I would say that the primary reason for leaving is house prices. Secondary is that income and lifestyle is much better as well as professional opportunities.

patriotz
Member

@RentersRant:
“Harsh I know, but my kids (who will be brilliant thanks to my wife genes) will need someone to pour their Starbucks. ”

That would be the kids who spent a fortune of someone else’s money (either parents’ or borrowed) to get a useless liberal arts degree. Meanwhile the kids who learned a trade which has been in chronic shortage for decades will be cashing in.

Sure going to university is worth the expense if you learn a profession which makes real money, but seldom otherwise.

jesse
Member

@patriotz: Doris Dunget aka Tanta had a Masters in English. She figured out the finance stuff later.

vangrl
Member
vangrl

All these stories of Canadians being priced out.

the young couple in the video are smart and won’t buy because they know the fundamentals are out of whack.

If all non-owners wanting a house just refuse to buy, prices would decline soooo fast.

just don’t buy, put on a buyers strike….so simple.

VHB
Member
VHB

Mar-2012
Total days 22
Days elapsed so far 9
Weekends / holidays 4
Days missing 0
Days remaining 13
7 Day Moving Average: Sales 112
7 Day Moving Average: Listings 264
SALES
Sales so far 1075
Projection for rest of month (using 7day MA) 1451
Projected month end total 2526 +/- 485
NEW LISTINGS
Listings so far 2522
Projection for rest of month (using 7day MA) 3437
Projected month end total 5959 +/- 404
Sell-list so far 42.6%
Projected month-end sell-list 42.4%
MONTHS OF INVENTORY
Inventory as of March 13, 2012 15640
MoI at this sales pace 6.19

Not much of a name...
Member
Not much of a name...

@VHB: Another option for the computation of MOI is to use sales from the previous 30 days and the current inventory.

Best place on meth
Member
Active Member
Best place on meth

@vangrl:

>>>just don’t buy, put on a buyers strike….so simple<<<

It's simple only if you have a city that's NOT full of pliable, easily brainwashed retards.

This is not the case in Vancouver where the dumbest people on earth just can't say no.

In this city a crash can only happen when we literally run out of people who can qualify for a mortgage, as is happening right now.

logic
Guest
logic

@patriotz:
to get a useless liberal arts degree

I like what you usually have to say P, but you are talking crap here.

I have a “useless liberal arts degree” and earn 6 figures. So do lots of people I know.
An Arts degree is no more useless than any other non-professional program.

jumpin in
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jumpin in
We are making $200,000 and rent a 1.5 million house for the cost of the interests the bank would charge us to buy it. Besides, we would never buy it, because the value is 95% in the land, i.e. the building has faults that could cost tons of money 20 years down the road. I have a feeling this year our rent will barely cover losses due to inflation. We often consider leaving Vancouver, but somehow we believe this situation will reverse to normal, eventually, so we are betting it is worth staying. We know several families with less income than us that are trying to leave. Only dinkys are fine staying here. And they lecture us, with no clue what having kids mean (they confuse taking care of a kid with taking care of a cat or having a… Read more »
Bailing in BC
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Bailing in BC

@patriotz:

My brother has a masters degree in Philosophy and makes more money than god restructuring government private enterprises. The fianace stuff you can pick up if you’re smart.

Bailing in BC
Guest
Bailing in BC

Sorry “finance”. Brother is the smart one, I am the “illiterate” one 😉

patriotz
Member

@jumpin in:
“For buying, independent townhouses (i.e. no strata) like in Montreal would be great too.”

Ottawa has lots of them too (actually separately titled duplexes for the most part) but to buy something like the place I rent for $1700/month would cost over $400K. So I’ll keep renting. Note this is in a trendy area, the burbs are less bubbly. But I like trendy.

patriotz
Member

@Bailing in BC:
So what is the economic value of his philosophy degree? How much could he make being a philosopher? Which was my point.

VHB
Member
VHB

@Not much of a name…: Hi. the intent here is to give a spot estimate of the MoI *now*, not at the end of the month. I use a 7 day moving average to get rid of some of the day-to-day volatility. I could use a 30 day MA as you suggest, but that would mean losing some of the higher frequency week-to-week trends.

Best place on meth
Member
Active Member
Best place on meth

Anyone who’s been following the bond market has noticed the slow but steady climb in the 5 year rate from its Christmas low of 1.17% to todays 1.65% – an increase of 48 bp.

http://www.bloomberg.com/quote/GCAN5YR:IND/chart/

jesse
Member

@patriotz: It’s the act of learning critical thought, writing, and thorough research that is being taught. The subject matter is less relevant.

If you mean many people don’t “get” the endgame of university education and end up prepared for little more than vocational pursuits (and there’s nothing wrong with that), I can’t argue too much that they didn’t properly leverage their university education.

chilled
Member
chilled

I love these money topics, apparently the internet is rife with smart, extremely well paid world travelers.

For the record I make a million dollars a year, travel the world as a high paid consultant, my wife is a supermodel and I have 6 masters degree’s. There, I got that cleared up.

Anyway, the Realturds® have now decided fear mongering is a valid marketing strategy;

http://www.theglobeandmail.com/report-on-business/economy/housing/online-house-listings-expose-sellers-to-assault-break-ins-treb-says/article2368525/

wpDiscuz