BC, debt, economy, opinion, presales, prices

Happy buyers don’t have regrets

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112 Comments

Are we having fun yet?

If you’re ‘in the game’ you know that the real estate market in Vancouver has been a frothy pond of fun for years.  If you don’t count transaction and renovation costs it’s easy to get rich flipping condos.

Or if you want to get more meta just resell presales contracts.

That’s right, we have people here who will buy the right to buy a building that doesn’t exist yet!

The funny thing about easy money is that it seems so unreal. This city is filled with people who could easily cash out even at current post peak prices and have a big chunk of real money, but will the majority do that?

Nope. The majority will stay put, renovate, buy back into the same market or turn their home equity into more debt via a HELOC.

In fact the majority couldn’t all cash out even if they wanted, we simply don’t have the buyers to enable that. Even when we had bidding wars we didn’t have enough buyers for a majority to cash out and now that sales have plummeted we really don’t have enough buyers.

A few lucky sellers will cash out and make money off this bubble. Likely because life changes caused them to move on. The majority will keep on paying their mortgages or get foreclosed on. Recent buyers will be paying more to keep their homes and may start to feel a bit trapped.

You saw this here just a couple years ago when buyers were complaining that developers were selling condos in their building for less than they paid and developers were suing presales buyers for money to cover the difference between their deposit and the lower resales value.

But you know what? They’ll be fine, they payed the price they felt their home was worth to them. A market decline doesn’t hurt someone that is happy with the price they payed and can keep paying their bills.

And if rates go up or job losses occur? Well someone without a financial buffer and emergency savings to deal with such a scenario really wasn’t ready to buy a house in the first place.

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midnite toker

@ScubaSteve: coquitlam center 35 minutes from downtown Vancouver? Lol only if its the middle of the nightand you drive like a maniac.

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Common Air Combustion Rights?

@Vote Down The Facts: re: Metro Vancouver Strata Exhibit

Very interesting. Thank you for posting this. As a precaution, if were the acting fiduciary of MVHC, I would get a signed letterhead letter from somebody in authority at the City, like a Fire Safety Inspector with their affirmative opinion on the Fire Code worthiness of the strata statute.

Perhaps MVHC has already done so and thus you can see the detailed technical qualifications for using the devices in the strata bylaw:
…1 foot from the building…
…unenclosed balcony…
…not to be used/stored indoors…

Thanks again for adding something to the conversation.

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Common Air Combustion Rights?

@Vote Down The Facts: “…stratas that explicitly permit propane…” Strata statutes cannot contravene prevailing law. Like any other part of the law, you can’t enter into a contract to do something illegal. Any contract of that pattern is not enforcable. If somebody dies from an explosion or tank leak suffocation, insurance will be of no help. The insurance company may as well be on the Moon in that case. The party most directly responsible for another person’s death will be directly held financially and criminally liable. If landlords are knowingly lax about who they allow to operate propane powered devices in the City limits, they will have SERIOUS financial and criminal liability as well. The same goes for landlords that look the other way on taped over smoke detectors in the suites of known smokers. Yes, there are annual fire… Read more »

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Vote Down The Facts

@Common Air Combustion Rights?:

What do you say to all of the stratas that explicitly permit propane barbeques on balconies in their bylaws? Are all those strata managers in violation of fire code?

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Common Air Combustion Rights?

To those that voted down my list of reference links to Vancouver Fire Code legislation, buildings standards, peer reviewed BCMA article on multi-unit smoking, and smoker alternative facts without posting any argument whatsoever I suppose there is only this:

http://www.youtube.com/watch?v=djVjexRp-oQ

Indeed, it sure would be nice to be able to argue without any facts followed up with a dramatic effect. Seinfeld really nails this one.

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crashcow

I know vreaa already did a post on the science world soap bubble, but the choice of words in this article are too striking to pass up:

Fitting 181 people in a soap bubble

“Canadian bubble […] set a new Guinness World Record”

“…thrilled participants in the bubble”

Yang warned them: “You’re gonna have an urge […] Resist that urge”

Next is a series of pictures. First one looks like a cute realtor blowing more air into the bubble. Smoke nearby in the background – is that Kelowna/Okanagan/Victoria? or the US? Everyone is too distracted to notice.

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HAM Solo

Truly incredible how bad September sales have been. Despite a stock market rally that began in August and pretty good hiring activity in local economy … there just is no appetite for more housing. My take is that pretty much every Vancouver adult who just goes with the flow is already in…and those who have any cashflow left after covering their mortgage already have second homes and timeshares just to sop up the extra cash. The only outlet for new home construction was goofy HELOC-drawing “investors” and twenty-something nubes…who have been effectively cut off by F’s CMHC rule changes.

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tony

Anonymouslynotbuying: “I have yet to see a serious national debate on the role the CMHC and the banks play in inflating the RE. There is no serious discussion on allowing banks to use government insured mortgages to sell covered bonds to Wall Street without legislation.”

Man you are so right. But we should do? Media is corrupt? Our politicians are corrupt? Financial oligarchy use both for their interest. The only solution is to take to the streets. But I don’t put lot of hope in that unless it is hockey game in question 🙂

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jesse

@joe_blown_away_by_high_housing_costs: Declining enrollment in Vancouver schools puts big pressure on the School Board budget because they have fixed facilities costs spread over fewer students. Further the VSB has additional constraints including older vintage schools and higher average teacher age, meaning salary grades are higher. The pressure to close schools a couple of years ago was immense but the VSB resisted, mostly because there was a favourable political environment to call the province’s bluff. But with every year of declining enrollment will put that much more pressure on the system. It looks like the demographic nadir is happening about now in kindergarten, and enrollment is slated to start slowly increasing, but the longer prices stay high that will be an uphill battle. I think it’s a big deal, but cities like San Francisco have seen similar trends, with families leaving the… Read more »

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Anonymouslynotbuying

Still talking about foreign ownership? The bigger problem is the government dumping half a trillion dollars into RE since 2008 through insurance and mortgage purchases. and don’t forget the loose lending practices now being reined in by OSFI. Where was the oversight before? Why the crackdown now?

I have yet to see a serious national debate on the role the CMHC and the banks play in inflating the RE. There is no serious discussion on allowing banks to use government insured mortgages to sell covered bonds to Wall Street without legislation. No question raised regarding the CMHC board of directors. But god forbid a “foreigner” buys a house, the uproar is deafening.

It astonishes me that Canadians have so much faith in their “benevolent” government.

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painted turtle

Here is what Google is giving me 🙂

Rent reduced because neighbours pee too loudly
A court has reduced the rent of a couple who live in a flat with such thin walls they could hear their neighbour peeing (-10%).

Good to know…

Read more: http://www.metro.co.uk/weird/737964-rent-reduced-because-neighbours-pee-too-loudly#ixzz27jEsnWcu

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jesse

@Makaya: Higher than that, as I mentioned yesterday paulb.’s count is higher by about 50 compared to the REBGV reported. Hitting 2008 levels or higher is “unlikely”.

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Anonymous

@joe_blown_away_by_high_housing_costs:

The problem is when people think about foreign ownership they think about visible minorities. However in my building in Coal Harbour, half the ‘foreign units’ in the building are owned by visible minorities, mostly from China, but the other half is owned by Americans, Israelis, South Africans, Brits and the like.

So as long we are honest about critiquing foreign ownership whatever the source and not using it to push our own bigoted ideas, then we can have an honest discussion.

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market stats

Check out this realtor/district councillor misconduct. Shocking there is no conflict policy at the district between his role approving developer activities and his day job. This should be fixed.

http://www.straight.com/article-788526/vancouver/north-vancouver-councillor-disciplined-second-time

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Makaya

@VHB: If we have less than 101 sales tomorrow, we’ll beat the 2008 record. Since sles are crappy on fridays usually, that makes is very likely. Will that make headline news? We’ll see…

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ScubaSteve

Sad month for Vancouver real estate… very sad.

Good bye bubble. Don’t let the door hit your ass on the way out.

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VHB
Total days	19
Days elapsed so far	18
Weekends / holidays	9
Days missing	0
Days remaining	1
7 Calendar Day Moving Average: Sales	86
7 Calendar Day Moving Average: Listings	239
SALES	
Sales so far	1484
Projection for rest of month (using 7day MA)	86
Projected month end total	1570
NEW LISTINGS	
Listings so far	5030
Projection for rest of month (using 7day MA)	239
Projected month end total	5269
Sell-list so far	29.5%
Projected month-end sell-list	29.8%
MONTHS OF INVENTORY	
Inventory as of September 27, 2012	19497
Current MoI at this sales pace	12.42
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Anonymous

@ joe_blown_away_by_high_housing_costs

You said it soooooo well.

In my opinion, they’re all sucking the same teat in this town because most of them have gained by it. Then they have the gall to stick their hand in your wallet and take more for “social housing”. How about dealing with the problem
at it’s source?

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Common Air Combustion Rights?

@BLISTINGAGENT: BBQ’s and “Harmless” Smoke

BBQ

“Allowed” doesn’t mean it’s legal or even wise if you want fire insurance to pay out. Like water escape, read you insurance documents carefully… FIRE CODE: Propane is completely out. READ:

http://vancouver.ca/your-government/fire-bylaw.aspx

"HARMLESS" SMOKE

Ya, right. “They’re suppressing the truth!” Asbestos must be good for you too! Smoking in multi-unit dwellings is a health hazard. READ:

http://www.bcmj.org/premise/toward-smoke-free-multi-unit-dwellings

Nevertheless, I have sympathy for smokers and there are alternatives to polluting the breathable air of your neighbors every waking hour you are on the premises.

(1) Have a smoking room installed.

http://www.ehow.com/how_6178526_convert-room-smoking-room.html

(2) Vaporize your tobacco/pot/etc instead of burning it:

http://electroniccigarettecanada.com/

http://www.vapeworld.com/tobacco-vaporizer-is-better

http://blog.cannajobs.com/vape-pen

(3) Get addiction help – Free smoking cessation supplies are now covered by the BC Government:

http://www.health.gov.bc.ca/pharmacare/stop-smoking/patient-start.html

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joe_blown_away_by_high_housing_costs

How did this article go undiscussed on this blog?! http://www.theprovince.com/mobile/news/vancouver/Vancouver+Mayor+Gregor+Robertson+soon+have+task+force+investigate/7296329/story.html “Over 60 per cent of residents aged 25 to 34 see Vancouver as “a resort for the wealthy,” with “too much foreign ownership,” according to the survey. Frustration around housing is leading many to incorrectly place the blame on foreign owners from Asia, according to Reimer. “There is a strong tension around race,” Reimer said. “We have to get ahead of that.” You can count me as being among the 60% of 25-34yos who think Vancouver has too much foreign ownership. I think it is pretty rude how Reimer just totally dismisses the opinion of 60% of this key demographic. Where does she get off to say these people are INCORRECT to lay blame with foreign ownership?! Vision Vancouver et al keep saying “SHOW ME THE PROOF” when it comes… Read more »

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paulb

New Listings 212
Price Changes 149
Sold Listings 71
TI:19497

http://www.paulboenisch.com

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VHB

@joe_blown_away_by_high_housing_costs: grow some thicker skin. Wow.

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joe_blown_away_by_high_housing_costs

@Melanie: The reason why I am being so sensitive to my comment being voted down is because it only takes a few down votes to hide your comment. I’ve seen some very good comments hidden because of this. I think the threshold to hide comments is too low. It should be negative 10 or negative 15 before a comment is hidden. If it is true that there are nazis/trolls just voting down comments irrespective of their content, this is quite threatening to this blog. There is increased activity of trolls here and vreaa (see latest post at vreaa about troll posting links to RE pumping website, but disguised as meaningful contributions to the discussion). Imagine if a whole bunch of trolls decided to work together to vote down all the comments on this blog. You would only need about 5… Read more »

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ScubaSteve

Got this crap in my e-mail this morning from Rennie marketing: ————————– ARRIVING THIS WEEKEND As a VIP registration we wanted you to be the first to know that Intergulf’s GRAND CENTRAL 3 will be opening the doors this weekend at noon, Saturday Sept 29th, to begin previews of this exciting offer. We’re still putting on the finishing touches, but dont miss this early opportunity to come down and talk to our sales staff about pricing, floorplans, and purchaser incentives – and check out our beautiful new designer display suite. A COMPLETED COMMUNITY The third and final tower in this soon-to-be completed community, GRAND CENTRAL 3 is located in the heart of Coquitlam, just steps from Coquitlam Centre, the future Evergreen Line and endless shops and restaurants. Here, you can enjoy resort-inspired amenities, premium interiors, and stunning views of the… Read more »

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