BC, debt, economy, hype, presales, prices

Buyers walking away from deposits

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106 Comments

Well, there’s a change in the air when it comes to Vancouver Real Estate.   The ‘can’t lose’ investment is starting to look like the ‘must lose’ investment with reports of buyers walking away from deposits and waiting for prices to keep dropping.

“It happened twice in the last month. One [deposit] was $75,000 and one was a $20,000 deposit, the guys just walked away from it,” said Mr. Arora, who runs Oneflatfee.ca in Surrey, B.C. “They are going to wait it out. So they lost $75,000 and $20,000, but if the market comes down $150,000 on a $1.5-million house, that’s not uncommon.”

Vancouver’s once-overheated housing market has cooled sharply, with the average price falling nearly 10 per cent in April from a year ago to $735,315, according to figures released Tuesday by the Canadian Real Estate Association. That was the largest drop since the recession and it marked the fourth decline in the past five months.

In a market once famous for being overheated, Mr. Arora said he hasn’t seen a bidding war in months. “It’s totally a buyers’ market. Buyers are determining the price,” he said. “And sellers are surprisingly accepting it. They are taking it.”

Buyers always determine the price.  If there are enough of them that want to pay more they will drive prices up.  Sellers have no control if no buyer is willing or able to pay the asking price.

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Kaya

I would like to come back to all the blogs I’ve seen during past months saying there is no bubble, nothing is wrong etc and link them here.CMHC and IMF were releasing data showing how bad the situation in Canada and especially in Vancouver and Toronto is. Finally there is someone who is not afraid to say what everyone has been thinking.

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Urbain

@Makaya: And I volunteer/work for a non-profit that helps the food banks across the country. Many of those availing themselves of the food banks’ services have lost jobs due to no fault of their own, are working poor, and are single parents as your experience so very aptly demonstrates. The people who do use food banks work hard to keep up with the ever increasing cost of shelter (a topic we talk about a lot here) and just have so little left over at the end of the month that food really is a limited option. It’s interesting that our federal government has the money to backstop bad mortgages, buy new over-priced fighter jets, build new prisons and new naval ships, and yet does not have the money to put towards the simplest of programs that benefit society. With the… Read more »

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Idiots

@ Makaya

For every 1 of our example, there are 10 recipients that spend more of their welfare cheque on cigarettes and alcohol than shelter and food.

It’s a broken system. Congrats to your mother for not letting you and your siblings get caught up in the cycle.

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Makaya

@Anonymous: “More welfare simply abets more destructive behavior. And if it doesn’t, please point to any example where increased welfare spending has resulted in a decrease of the underlying problems.” You obviously have no idea what you’re talking about. You know, sometimes welfare helps a mom feed her kids because daddy, the bread winner, died too abruptly in a car accident caused by a drunk lawyer (I guess a person you would admire) that was driving way above the speed limit (170 km/h instead of 90). Welfare can also help the kids to be fed, dressed up and equipped to go to school. And sometimes, these kids do very well at school but even with scholarships, would not be able to afford going to university. Once again, welfare can help these kids. And one, these kids will work and pay… Read more »

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JR

@jesse: Man, denile must be a liquid drug that anyone interviewed about the RE market here has to drink before answering questions. Clearly neither Tsur nor Pastrick want to start a stampede hence their vanilla/on the other hand responses but come on; you don’t want to look like that idiot savant who headed up the US NAR do you?

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jesse

Here’s Greenhorn’s youtube clip, not sure if this was already posted. Notice the first segment. Look familiar, Pope 😉

http://www.youtube.com/watch?feature=player_embedded&v=ZFR1gx23UJA#!

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Maverick

@southseacompany:

Especially when said “equity” begins to slide and they start trying to sell en masse.

Who cares at this point anyways. Rennie knows we’ll always hate him for leading lemmings off the cliff and charging them a commission to do it.

His reputation, which is hardly held in high esteem as it is, will soon be on par with that of the shills we saw in the USA who were denying the trainwreck was occurring back in 2007.

He’s just a realtor.

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Anonymous

@jjss:

It’s not a failure of ‘social responsibility.’ We have so much that govts are going broke. It’s a failure of personal responsibility.

It’s an unpalatible fact that most who use food banks squander their time and money on personally destructive behavior.

More welfare simply abets more destructive behavior. And if it doesn’t, please point to any example where increased welfare spending has resulted in a decrease of the underlying problems.

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southseacompany

Re: “Condo king says talk of bubble just a lot of hot air” Van Sun
http://www.vancouversun.com/business/Condo+king+says+talk+bubble+just/6640328/story.html

““Baby boomers are sitting on $88 billion in equity in Greater Vancouver and they’re looking at their retirement years. That equity will be freed up over the next 15 years [and] when they sell their home, they’ll buy down and help their kids.”

Rennie doesn’t seem to tell us who’s going to buy all those boomer homes once they start trying to ‘freeing up that equity’.

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Anonymous

@chilled: ….I first thought this was an attempt at humor. It’s for real;

http://vancouver.openfile.ca/vancouver/text/bob-rennie%E2%80%99s-appointment-bc-housing-commission-raises-ndp-eyebrows…

Hey, lots of homeless people haven’t bought condos yet!

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chilled

Why am I thinking there will be no shortage of applicants in Vancouver?

http://vancouver.en.craigslist.ca/van/grp/3021167994.html

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UnagiDon

Not enough HAM discussion today. How’s this one:

“‘Princelings’ in China Use Family Ties to Gain Riches”
http://www.nytimes.com/2012/05/18/world/asia/china-princelings-using-family-ties-to-gain-riches.html?pagewanted=3&_r=1&hp

Evidence has surfaced of at least $160 million in assets held by close relatives of Bo Xilai, and the authorities are investigating whether other assets held by the family may have been secretly and illegally moved offshore…

Zeng Wei, the son of China’s former vice president Zeng Qinghong, bought a $32 million mansion in Sydney, Australia…

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jjss

Here is an excerpt from the UN food report for Canada from May 16. It’s from the section on social responsibility and refers to the most vulnerable. As social protection schemes and minimum wages fail to meet people’s basic daily needs, an increasing number are turning to food banks in Canada. According to information received, 2011 witnessed high rates of food bank use, with nearly 900,000 people depending on them in one month. The reliance on food banks is symptomatic of a broken social protection system and the failure of the State to meet its obligations to its people. In the view of the Special Rapporteur, social assistance levels need to be increased immediately to correspond to the costs of basic necessities; it should be regularly indexed to real living costs; and a housing benefit paid outside the social assistance… Read more »

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jjss

Denial isn’t just a river in Egypt.

http://www.bbc.co.uk/news/world-us-canada-18111982

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loser with the girls

LOL LOL

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chilled

@Best place on meth:

“I knew about 1% Realty, but when the hell did 2% Realty come about?

http://www.2percentrealty.ca/vancouver/

These fuckers are like dairy products nowadays.”

and Rennie is the Homo on the top shelf? Overpriced and really not that good for you.

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chilled

I first thought this was an attempt at humor. It’s for real;

http://vancouver.openfile.ca/vancouver/text/bob-rennie%E2%80%99s-appointment-bc-housing-commission-raises-ndp-eyebrows

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Makaya

Wanna see the mother of all bubbles, courtesy of China?

Check this chart…

http://www.zerohedge.com/news/one-epic-chinese-bubble-one-chart

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Arthur Fonzarelli

I’m liking those numbers today. I would have been crestfallen if it was a 300 sale day with no new listings and a bunch dropping off. I wonder if a lot of sellers with lots of equity and who have stable rental income are already pulling properties off the market – “nope not this year I guess”… losing money on the potential capital gains from investing the shitload from the house in something else and renting for free. If I had a million dollars cash or $2 million in a house… don’t get me started. Life would be a lot f*^**!n easier. Because I would sell that shit, now. paulb are people getting trigger happy up howe sound way? Any steep discounting in sales? Cuz Mr. and Mrs. C are gonna raise my rent soon if I keep revvin’ up… Read more »

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Chabar

@UnagiDon:

They must be good in math with all of those RE investments.

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Romeo Jordan

MOI must go over 12 before the screams permeate the night sky (like they do for McLovin on a Saturday night). That’s a dirty way to make a living, filthy.

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Romeo Jordan

Game changer: the masses are JUST starting to let the idea that prices may fall (hard) here creep into the edges of their subconscious. We are early in the process, but it is becoming a talking point. Daring to say prices will fall no longer elicits the kind of smirks McLovin see’s on Saturday nights.

Now they say, hey, prices might fall 15-20%, but then bounce again – but they are already painting in a good sized drop.

This is how it begins. Where do I pass the Hot Potato?

We go.

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Best place on meth

@ReadyToPop:

They can’t afford cars anymore, they spent all their yuan on overpriced shitbox condos.

Same reason why Vancouverites can’t afford food anymore.

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Anonymous

Best place on met: Van East 6467 Elgin st, Listed 790, sold 680, after 30 days

Great keep them coming made my friend squirm by telling him that one. His retort…. not a good area, that’s why

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Tony

DaMann, did you grow up in Richmond?

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