Can it happen here?

Ulsterman commented yesterday sharing an exchange with a local radio host.  Will the current price drops end up the start of something bigger or a rehash of 2009?


I sent an email to Lynda Steele on CKNW because she stated that she was confused by the local market. Some say prices are down, and yet others say they’re going up. Then they quoted the BC Assessment report that came out today and is warning that assessments will be up 30-50%. I explained in my email that since prices peaked in Spring 2016, they had since made a fairly significant correction.

She responded and asked if i were a realtor. I replied with:

No, i just take a keen interest in the local market but i have no “official” expertise. But neither do i make my living from encouraging people to buy or sell a house, so I have no vested interest either. It’s always a good time to buy or sell according to BC Realtors, so when i hear they are guests on radio shows I don’t put much faith in their advice.

My understanding of markets before corrections is as thus. First sales collapse (check), sellers desperately hang on, refusing to make significant discounts – price stickiness ( check), eventually some people have to sell (job losses, moves, divorces, debt loads etc) and this sets the new price – already happening in the single family home market.

By Spring there will be a tsunami of houses hitting the market as people try to beat the price drops and of course buyers figure this out and wait for lower prices, compounding the problem for buyers. This has happened in all markets that have corrected, from the US, to Ireland, to Spain. Vancouver will feel the pain too. With all the new mortgage qualification rules, foreign buyer taxes, so-to-be reduced AirBnB gravy train, rising interest rates etc, I think you’d be foolhardy not to just wait and see before buying. There’s almost no upside potential, but a massive risk of watching hundreds of thousands of equity get wiped out in months.

Imagine someone who has moved from a condo to a townhouse over the years and just recently leveraged to the maximum to buy a house this Spring. Maybe they put $500,000 down and borrowed a million. With the already-happened 20% correction they’ve watched $300,000 disappear. It won’t take much more before a decade of equity accumulation is gone. Leverage is wonderful when prices are rising, but it’s brutal when they go down.

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Oracle
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Oracle

Reddit users slamming Saretsky.

Say that market hasn’t gone down 15-20%.

Deceiving the naive. For example: $2 million house reduces prices to $1.6 million. And a comparable sold for $1.4 million in summer.

Dumb bears jumping for joy thinking prices crashed 20%. No hope for stupidity.

Buynow or Getlaidnever
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Buynow or Getlaidnever

D U HAVE A Reddit LINK ?

Abdul Lahazi
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Abdul Lahazi

No hope for you then.

Confucius
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Confucius

It has in fact gone down that much. A house in my neighborhood recently sold for mid 900s. It was purchased for 800 last summer. Their original ask was 1.2 million which is what comparable and crappier houses were selling for in the Spring.

Oracle
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Oracle

Im not trying to start some BS here but there probably are cases where people selling detached homes IN Vancouver CITY for hundreds thousands less. But in Surrey, I’m still seeing sales prices that are 40% higher than 2 years ago. In Abbotsford, 50% higher.

Confucius
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Confucius

That house for mid 900s is still up 40 percent from two years ago. Nobody is arguing that prices are down from two years ago. They are down 15-20 percent from the peak, exactly as stated by Saretsky. No hope for stupidity indeed.

bullwhip29
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bullwhip29

while asking price was lowered (which means nothing) they ended up selling it for 15-20% more than what they bought it for just a year or so ago.

Confucius
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Confucius

It means nothing by itself, but like I said, comparable or less desirable houses in the neighborhood were selling for 1.2 in the Spring.

Shut It Down Already
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Shut It Down Already

Bingo. Asking prices are not sales.

Confucius
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Confucius

It means nothing by itself, but like I said, comparable or less desirable houses in the neighborhood were selling for 1.2 in the Spring.

bullwhip29
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bullwhip29

Anti-corruption group calls for more disclosure of ownership of Canadian companies, trusts
http://www.cbc.ca/news/business/transparency-home-ownership-1.3889013

“…research shows that 29 the 100 most valuable residential properties in the Greater Vancouver area are owned through shell companies…”

bullwhip29
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bullwhip29
Buynow or Getlaidnever
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Buynow or Getlaidnever

Questions arise after controversial land swap deal mentions Chinese government.
http://globalnews.ca/news/3116556/questions-arise-after-controversial-land-swap-deal-mentions-chinese-government/

bullwhip29
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bullwhip29

this is complete bs imho with the typical legal damage control being done after the fact. it sure gets tiring watching these a-holes play this card over and over again as murky business dealings are made public. i mean, seriously, who isnt yet aware that the folks running the show are rotten to the core and who are they trying to kid at this stage of the game? at least krusty’s team has the common sense to make sensitive documents (and also bodies) just vanish into thin air never to be talked about ever again…

bullwhip29
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bullwhip29

B.C.’s Best Cities for Work 2017: Is Vancouver a victim of its success?
http://www.bcbusiness.ca/Best-Cities-for-Work-in-BC-2017-Is-Vancouver-a-Victim-of-Its-Success

Patiently Waiting
Member
Patiently Waiting

I have a wild, innovative solution to this problem: maybe try raising wages. $10.85/hour? $12/hour? Nobody has time for that. Literally.

bullwhip29
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bullwhip29
bullwhip29
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bullwhip29

High property prices mean change needed for home tax breaks: Metro Vancouver
http://www.mortgagebrokernews.ca/news/high-property-prices-mean-change-needed-for-home-tax-breaks-metro-vancouver-218351.aspx

>>> it goes without saying that Krusty will give suffering multi-millionaire homeowners another tax break. the real pertinent questions are when and where will she make this splashy, feel good, “make BC great again” news announcement? and more importantly what outfit will she be wearing? my prediction is that she’ll drop a hint prior to xmas then make a formal announcement closer to chinese new years.

Hyper-mega-Bull
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Hyper-mega-Bull
Abdul Lahazi
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Abdul Lahazi

Chicken feet, cat, dog, greasy gunk that could be anything. .All cooked in “gutter oil”. yuk. Disgusting.

Newcomer
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Newcomer

Oh, Dude. That’s so sad for you. Chinese food is one of the best things about Vancouver.

Abdul Lahazi
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Abdul Lahazi

Doesn’t say much for Vancouver then.

Hyper-mega-Bull
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Hyper-mega-Bull
Abdul Lahazi
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Abdul Lahazi

What a traitor she is.

bullwhip29
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bullwhip29

Port of Vancouver boss to Ottawa: Don’t privatize Canada’s biggest port
http://vancouversun.com/news/local-news/port-of-vancouver-boss-to-ottawa-dont-privatize-canadas-biggest-port

bullwhip29
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bullwhip29

‘My life is so much better’: B.C. man who moved family to Cape Breton
http://bc.ctvnews.ca/my-life-is-so-much-better-b-c-man-who-moved-family-to-cape-breton-1.3195850

bullwhip29
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bullwhip29

plastered on front page of current REW print edition…

>>> agents from three prominent richmond based RE firms (remax, sutton and macdonald) raised a total of $13000 for the richmond christmas fund after chalking up one of the most successful years in the history of lower mainland RE. to put this in perspective, $13k spread out over three firms equates to the cost of a couple of pizzas per agent OR put another way, the approx commission earned on the sale of a single studio/1 BR condo located somewhere in the burbs or perhaps the MSRP of a typical handbag found in Julia Lau’s walk in closet. and by the way…where were the New Coasts, Nu Streams, Metro Edges among others?

southseacompany
Member
southseacompany

“Full speed a-Fed: The Federal Reserve prepares to raise interest rates again”, The Economist

http://www.economist.com/news/finance-and-economics/21711323-first-time-years-central-banks-forecasts-monetary-policy-look

“For the first time in years, the central bank’s forecasts for monetary policy look believable”

YVR
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YVR

More bad news for home owners. Surrey house prices crashing. Sorry Oracle.

“We’re seeing prices down roughly 15 per cent in most areas of the Fraser Valley, and it’s just getting started.” In analyzing sales data available to realtors, he says South and North Surrey appear to be the “hardest hit” by the price reductions

http://bc.ctvnews.ca/average-house-price-down-15-per-cent-or-more-in-parts-of-metro-vancouver-1.3195949

Oracle
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Oracle

That’s awesome if it were true. Only seeing about 5-8% in detached. Would be great to have 33% correction. The smug people need a reset. However, gov policies not on correction side.

The people in power these days can do anything. Winning an election is like gaining a dictatorship these days.

Oracle
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Oracle

And by the way, he talking about average prices. ***sales mix towards condos would do that.

Newcomer
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Newcomer

You should watch the clip. It makes understanding so much easier. I’m mean, yeah, guessing saves time, but its’ just not the same.

Bag it and tag it
Member
Bag it and tag it

Nice piece! Typically this types of articles where they interview a realtor, they’ll typically finish it off with a positive bullish spin, but not this one:
“I think the correction has only just begun”

southseacompany
Member
southseacompany

“Average house price down 15 per cent or more in parts of Metro Vancouver”, CTV news video

http://bc.ctvnews.ca/average-house-price-down-15-per-cent-or-more-in-parts-of-metro-vancouver-1.3195949

“Some Vancouver detached homes have sold for hundreds of thousands of dollars below asking, and there’s now proof the trend is in effect beyond the city’s borders as well.”

Bear Vancouverite
Member
Bear Vancouverite

Oracle said that if someone shows him a house 20% down in Surrey he’d buy it. Oracle: you might want to reach out to Steve Saretsky because it sounds like he may know of a few houses that fit your criteria.

“In analyzing sales data available to realtors, he says South and North Surrey appear to be the “hardest hit” by the price reductions, but that Langley is starting to be affected as well with the average sell price down 19 per cent in November compared to June.”

Oracle
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Oracle

Average price.

Newcomer
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Newcomer

No, man, 20% off asking price. Get your checkbook out.

Newcomer
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Newcomer

That’s weird, a 20% drop more than covers the 15% tax and yet HAM is not snapping it up. I guess sellers will just have to stick to their prices and wait for the Mexicans to get here.

bullwhip29
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bullwhip29
Newcomer
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Newcomer

The guy probably just got so used to including the China Investment Corporation that he started including it in everything, to be on the safe side.

bullwhip29
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bullwhip29

or he is just got caught and is telling us a bold faced lie…

bullwhip29
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bullwhip29
YLTNboomerang
Member
Sooo, got confirmation that the US company I interviewed with last week is preparing an offer. They are going to match my CDN salary in USD so basically a 30% bump. I haven’t seen the offer yet (will be ready first week of Jan) but they are confident enough that I will accept that they have already started visa work! The only hesitation I have is that in order to appeal to millennials they have adopted a bunch of odd policies including unlimited vacation days. This sounds fantastic but I suspect it results in everybody working like nutbars and taking very little vacation lest they appear a slacker compared to their counterparts; so this is the last question I need to answer regarding giving up on YVR. Any thoughts on this vacation policy? Right now I get 27 days or… Read more »
asun
Member
asun

Happened to me last year. The US based company wanted me to move to Silicon Valley though, so I did. Prices in Bay Area is on par with Vancouver West side prices, with a big BUT. The rent prices here are 2.5 times higher than Vancouver, so price to rent ratio is better than Lower Mainland for sure.
As for salary, after currency conversion, it is easily over 2x the salary in Vancouver. That’s a 100% bump if my math is still with me.

YLTNboomerang
Member
As I said to Royce, I am already overpaid not just for Vancouver but for Canada. I was recruited back when oil was well over $100 and the company pays oil sector salaries. There have been some tough times since then so they keep giving me hefty promotions not to bail to the point where it feels odd that I am doing the same thing I did 2 years ago but am now getting paid 30% more…different title of course but exact same duties and reports. I would stick around but I will go nuts doing the exact same thing for the next 5 years while the company sorts itself out; the main driver is that despite being overpaid and income ranking at the top 2% of legitimate tax paying folks in YVR, housing is not affordable to buy and… Read more »
Royce McCutcheon
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Royce McCutcheon
Faced a similar thing (gave up a lot of days in switching to US employer a little while back, still based in Vancouver). Short answer is that I have seen what you describe: people can have a bit of fear of appearing a slacker. That said, it’s not been a huge a issue with us. The reason is that the company is smallish and the vast majority of employees remember the number of days that used to be given under the old policy. New people learn this. And that’s generally what they use as a guide for time off. It might make sense to reach out to longer standing people at the company (not necessarily management) and ask what the policy used to be to get a sense of where the threshold might be (15 days? More [doubt it]?). I… Read more »
YLTNboomerang
Member
Thanks, they offered a stay in YVR angle but the travel would be killer and the whole point of going to the US is lower cost of living/housing. This company is large at 15,000 people globally but just 5 years ago they half that and 13 years ago it was 2 people! The company’s HQ is in London and the CEO is from Vancouver originally so who knows… I’m going to counter with a 10 yr average FX to negotiate a higher wage but to be truthful, I am horrendously overpaid today for what I do so I almost feel a little guilty and would not be surprised if they say no. From a career perspective, those in the industry I have told think I am nuts not to go as working for them is like getting knighted and you… Read more »
Sellnoworbepricedin4evah
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Sellnoworbepricedin4evah

Free rent!

http://vancouver.craigslist.ca/bnc/roo/5894018180.html

^On a side note. I am sometimes saddened by society.

Buynow or Getlaidnever
Guest
Buynow or Getlaidnever

How do u even find these ads ,do u personally go look for them ?

Specuskeptic
Member

It doesn’t repeat itself but it rhymes… Great take on the New Zealand experience and very germane here. http://www.top.org.nz/ccit-business

paulb
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New
52
Price Change
22
Sold
70

TI:8467

http://www.paulboenisch.com

Confucius
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Confucius

It’s starting to look a lot like Christmas.

history
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history

The bond yield story is interesting. Yields up again today, 4%
What does Canada export again? Other than tourists to Mexico, and manufacturing capacity to China? I suppose we export oil to Cushing….and snivelers to the UN… go globalism!! fake news at 6, stay tuned.

space889
Member
space889
@Bear Vancouverite – How about the RE can do what they want with their own data, including who can use it. Anyone else wants to use that data can either try to get and pay for it from the RE board, or they can aggregate it themselves by going to land title offices, or ask RE agents / sellers / buyers to submit the info? Seriously, why does the RE board has to make their data available? It’s their data and they collected it. Cost is not an issue here. Why can’t people who want to profit off the data do their own data gathering work, instead of forcing RE board to give it to them? Use an analogy, if you have some special magical money making investment method that doesn’t cost you much in $$ or time to create.… Read more »
Newcomer
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Newcomer

Why do telecom companies have to share their lines? Why to car makers have to make cars compatible with third party parts?

Because we have decided that monopolies are bad for consumers.

space889
Member
space889
I’m against telecom companies having to share their lines at gov’t regulated prices actually. Again, I believe if it is paramount that telecoms are an essential service then have a non-profit crown corp or a majority gov’t owned corp where profit isn’t #1 goal and it is not a private enterprise but a public service utility. Otherwise, the competitors are welcome to build their own lines or pay market rate that telecom charges other large customers. Monopoly are bad for consumers. But if you want to run a capitalistic free economy, you either tolerate monopoly or don’t claim you are running a free economy. The best way against monopoly is to prevent regulatory capture that stifle competition or innovation. Most monopoly / oligopolies arise in part due to regulatory capture that stifles competition or innovation. There are very few natural… Read more »
Newcomer
Member
Newcomer

Well, that’s a no brainer, I’ll choose “don’t claim you are running a free economy.” It’s not like there is some sort of bonus prize for being able to claim you are running a free economy. I’ll settle for an economy as free as the United States, I guess you are aiming for as free as Sudan.

bullwhip29
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bullwhip29
bullwhip29
Guest
bullwhip29
bullwhip29
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bullwhip29

The average Canadian will now have to save for 102 weeks to buy a house
http://globalnews.ca/news/3114505/rising-cost-of-down-payments-canada-real-estate/