Category Archives: BC

Whistlers nasty collapse

They say bubbles inflate from the center, working their way out to peripheral areas. They then tend to collapse in reverse with outlying areas crashing first as the equity vacuum works its way back to the center.

Right now Vancouver is seeing unseasonably high listings and lower than normal sales. Prices are softening, but there’s no dramatic crash yet.

Meanwhile Vancouver Island, The Sunshine Coast and the BC interior are all seeing dramatic price drops.

Just north of us you’ll find Whistler BC, the ski resort where prices just keep on melting. The Village Whisperer points out this 65% asking price drop since 2005.

On a similar note Makaya pointed out this delightful instance of Whistler bottom-calling in 2010. The supposition was that since prices had been dropping, they wouldn’t any more.

For people expecting the real estate prices in Whistler to drop after the Olympics, I’m afraid you’re going to be sorely disappointed.
According to George Klimock from The Whistler Real Estate Company, property prices in Whistler today are already 15-25% lower than previous prices in 2007. In fact, current prices in Whistler are down to 2001 levels.
With a high level of inquiries and good prices, Whistler is considered to good value in the resort market, with, for example, a 2 bedroom condo is now listed at $ 519,000 as opposed to the more expensive $ 630,000 a few years earlier.

Meanwhile prices just keep sliding down the mountain..

UPDATE: The whistler bottom-calling article linked above is not currently working. Ant saved a copy of it here on Vancouver Peak.

Brand new house $130k

What’s this, builders making a profit on new houses at $130k?

Apparently only in Vegas.

Yes, after a 60% drop in house prices builders are somehow still in business making new homes and selling them for under $200k.

“The single largest impact has been houses under $200,000,” Beville said. “Homes in the $130,000 to $190,000 (range) are getting a lot of love. The ones in the $200,000 to $300,000 are getting a little bit less.

Meanwhile in Vancouver even if you get the land for free it’ll cost you $270k to build a 500 sq foot laneway home.

Construction cost is high in Vancouver for a few reasons: permits, cost of materials, cost of labour.. but there’s really only one reason construction cost is so high: people are willing to pay for it.

It’s not like construction quality here is known for it’s quality (leaky condo crisis) and we even make use of unpaid illegal immigrant labour and still we pay these prices?

Ridiculous.

Vancouver housing zeppelin

Even with all the recent warnings of a housing bubble that is no longer limited to just Vancouver and Toronto, you’ll still find lots of media coverage that dismisses bubble talk or explains it away as an ‘ownership premium’.

It’s not difficult to see why this is – there are thousands of people who’s incomes depend upon the housing market.

Whether its condo marketer Bob Rennie or a random realtor, they all have their day to day income tied to the health of the real estate
market and conveniently are given ‘expert’ status and quoted by the local media.

That makes an article opener like this all the more shocking to newspaper readers:

Is there a housing bubble in the Lower Mainland? Housing zeppelin is more like it. Bubbles, after all, are soft and cute and harmless. Zeppelins, conversely, hurtle into the ground, spewing flaming wreckage in all directions. And that’s precisely what we’re about to witness in Metro Vancouver.

That’s the intro to a rather dramatic editorial written by Gord Goble and published in a number of local papers.

Buyers walking away from deposits

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.