Happy New Year!

December 31, 2014 admin

As 2014 draws to a close and we move into 2015 here’s hoping your future is a bright one.

Some of you will buy property this year, some of you will sell, some will rent and others will move away. Whatever 2015 holds for you it’s always good to keep some perspective.

Whether 2015 sees rising or dropping house prices in Vancouver we hope both sides of the debate will treat each other with a reasonable amount of respect – we’re all just trying to get by the best we can.

Happy New Year and here’s to an excellent 2015 for all of you!

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bahia del sur, academia nautica homologada

8 years ago

I have read some good stuff here. Certainly worth bookmarking for revisiting. I wonder how much effort you put to create this sort of fantastic informative web site.

Shut It Down Already

8 years ago

For reference…..

paulb Says:
January 3rd, 2014 at 5:47 pm
New Listings 171
Price Changes 36
Sold Listings 60
TI:11274

Westside Realtor

8 years ago

Yes, hoping.

Also expecting.

Actually, in my view declines are INEVITABLE.

So really, what I am doing.is simply WAITING. And saving and investing. But mostly waiting for what the overriding laws of economics and valuation clearly shout out is coming. Like Nasdaq jn 2000 (or 1999).

Waiting
&
Super
Relaxed

CBC

8 years ago

WSR jmho = just me hoping on

CBC

8 years ago

Ring in the new year with a 10k party.
correlating low inventory with falling prices contradicts the law of economics. The funniest one I’ve seen goes something like this, paraphrasing “bubble will burst because low inventory means all the buyers have already bought”

Westside Realtor

8 years ago

Bear Vancouverite,

Great post.

Yes, confirms for the readers what video have been saying for some time.

Fewer HAM.

Will be fewer going forward.

The straw that breaks the camels back.

The heaviest declines will be non the back of higher interest rates, eventually. But the absence of HAM will set the trend downward.and remember, if ten units in a condo all sell quickly but for LESS than they would have sold for a year ago, this does not signify a strong upward moving market.

Jmho

Happy New Year to all.

WSR

Bear! Bear! Bear!

8 years ago

@26

I wonder how much of the money banks are hemoraging will end up in vancouver real estate.

StupidityCheck

8 years ago

I own three properties in Phoenix. One of them is a condo, which rents for $1,000. Comps were going for $100k at the bottom – and those were foreclosures. I bought a short sale SFH for $86,000 in 2009 which was rented out at $850. I’m sure there were some places going for less, but they were probably older and in undesirable locations. But I’m sure you already know this, since you undoubtedly know the Phoenix market much better than I do. You are correct about my math, the drop would only need to be 63%. Keep picking those nits. And, no, I wasn’t paying “a lot more” to own in 2001. I paid cash. My rental savings were the equivalent of a tax-free return of 5%. On top of that, thanks to the bubble, I doubled my money in… Read more »

patriotz

8 years ago

@31: “When I bought in 2001, it was a fantastic time to buy and my downtown condo was 170x rent.”

That sounds higher than average at the time to me, but if in fact that was the ratio, you were paying a lot more in ownership costs than rental value.

” Even in Phoenix at the absolute bottom of the market, condos were selling for 100x.”

http://www.wsj.com/news/articles/SB10001424052970204517204577046851524557104?mod=WSJ_RealEstate_LeftTopNews&mg=reno64-wsj

The low-water mark for the market came in January 2010, when the median price for a home in the city of Phoenix fell 64% to $92,000 from $253,000 in December 2007, according to the Cromford Report.

This is houses they’re talking about. I think condos were in fact going for under 100x rent.

“It would take a 70% drop to hit 120x.”

Wouldn’t actually. I’ll let you figure out why.

StupidityCheck

8 years ago

@29, If you listen to Patriotz you’ll be renting the rest of your life! When I bought in 2001, it was a fantastic time to buy and my downtown condo was 170x rent. 120x will NEVER happen, unless we enter a severe depression. Even in Phoenix at the absolute bottom of the market, condos were selling for 100x.

The general rule of thumb for price to rent ratios is:
Less than 180x (15x annual rent) – Buy!
Between 180x-240x (15-20x annual) – Buy if you really like it and plan on staying long term.
Over 240x – Don’t buy.

The condo I’m renting now would cost 325x rent. It would take a 70% drop to hit 120x. Not gonna happen.

patriotz

8 years ago

@29: “How did you decide to buy at this rent to price ratio instead of renting at much lower cost?”

The whole point is that my ownership cost worked out to be about the same as my old rent or what it would cost to rent another house.

Between 150 and 200 is a grey zone as far as buy versus rent is concerned. A lot depends on future interest rate trends which of course aren’t known. And structure value (which depreciates) versus land value (which doesn’t). Also in my case I was paying rent from investment income which introduced a number of other factors.

Would I recommond someone buy a similar house with similar numbers in metro Vancouver today? Yes. A townhome or other strata? No. I wouldn’t buy a strata for more than 120x.

Happy New Year everyone.

Bear Vancouverite

8 years ago

I’ve also been meaning to ask patriotz: In past years you seem to feel a 150 rent to own ratio is what is reasonable for a SFH. Others have discussed that historically speaking, a ratio above 200 is guaranteed to crash. I think you mentioned your bought at under 200x. Doesn’t that make your SFH overpriced? You seem to imply the house was good value at such a multiple because of large acreage and location. Does that mean that you feel a higher multiple of 200 is ok if the location and land size is good? You previously made no such allowance when talking about value and price to rent ratios. How did you decide to buy at this rent to price ratio instead of renting at much lower cost? Would someone making a similar choice in Vancouver be smart… Read more »

Bear Vancouverite

8 years ago

Happy New Year everyone. Here are some facts for everyone from conversations and observations the past few weeks, unfortunately I don’t think they point to a bearish outlook yet. 1) In spite of WSR’s vague ramblings about his colleagues and clients seeing a huge decline in sales, paulb’s daily postings in the past month or more show sales outstripping listings almost every day. Sometimes as much as 100%+ more sales than listings (such as today). When this happens I see posts about how this is the calm before the storm. When sales lag listings I see posts about the calm before the storm too. 2) A friend of mine works for Rennie. I heard that out of 560 units they put up for sale in one project this season sold 400 units in 5 weeks. They sold 10 in one… Read more »

space889

8 years ago

@patriotz – this from a guy who keeps claiming that renting is affordable and that you can always rent something easily in the neighborhood you want and can’t afford to buy. Contradiction much?

Also, neither of the two places are actually in the Shaunessey neighborhood. But I guess I should cut you some slack since you don’t even live here.

Seriously, why do sheeples here even still listening to some guy who kept preaching superiority of renting and basically called anyone who would buy an idiot, who turned around and bought the first time a landlord kicked his family out. I thought all you need for stability is to sign a longer lease and landlords are desperate for good tenants. Maybe you just don’t qualify.

Mick Murphy

8 years ago

“Chinese banks are hemorrhaging their deposits,”

http://mobile.businessweek.com/articles/2014-12-18/chinese-banks-lure-deposits-by-offering-goodies-for-cash

Westside Realtor

8 years ago

The numbers are bullshit and do not fool anyone with half a brain (about 10% of us, about 90% of us on this blog) .

Tear down A house abandoned build a new one and add that to the mix and prices will always rise.

But that said in is comparing and apple to an orange.

Reality sets in now.

Welcome to 2015.

WSR

|Boombust

8 years ago

…let’s not forget charming Torrance, “liveable” Long Beach (with it’s oil derricks pumping 24/7) and, of course, pretty Paramount and beautiful Bellflower!

We’re all so envious!

|Boombust

8 years ago

Ooooh!

You must be from OAKLAND? South Central LA? Hmm…Stockton? Beautiful Modesto? Fresno? Visalia? Palmdale? Delightful Devore?

All such “beauty spots” to be sure. Lucky YOU!

tedeastside

8 years ago

having lived in California….its a joke to think anybody from California would ever move to vancouver…

for all the ‘best place on earth’ chest thumping vancouvers local media does
99% of Americans have never heard of vancouver BC

why would they have any interest in a boring, cold rainy, place with no attractions, no action, no industry and pitiful job opportunity

|Boombust

8 years ago

That is, if they have even HEARD of BC, let alone Canada.

Having it pounded into their heads for eons that they are the hippest people in the hippest place on earth, it won’t be easy.

|Boombust

8 years ago

Well, I guess those “folks” from California would have to pass muster before we let ’em in, wouldn’t they?

YLTNboomerang

8 years ago

New shout on global was sickening, the latest pump for RE is global warming is going to drive folks up from California. They had some wilderness guy on saying, shhh we don’t want the secret getting out that it is the best place on earth. Te next story was about no fun Vancouver and how in all the “global” cities there is a big New Years celebration but in no fun van there is nothing; ha!