Potential Buyers?

Ok, lets say we think the market has peaked.. lets assume we have a few months to sell our condo investment property and lock in some gains before prices start to drop. What sort of buyers are out there?

TYPE 1 – BUYS AT ANY PRICE
Type 1 has got to have it. They will buy your home at any price. Maybe they’re freaked out about being priced out of the market. Perhaps they are very very wealthy and desire Vancouver above all other cities in the world, or maybe they’ve won the lottery and money is no object for them. You want at least two of these type 1 buyers interested in your house or condo. They’ll bid up each others price and will never insist on sticky points like ‘subject to inspection’ and ‘subject to financing’. These are the people that will make you money. Hunt them down and keep them close to you.

TYPE2 – BUYING AT A PRICE
Type 2 will buy, but not at any price. These people are typically refered to as bears. They want to buy, but they have a limit to how much they are willing to pay. They’re looking for something specific priced below a certain level. They’ll crunch numbers and think long and hard before buying. These people will be your fallback position if you can’t find any TYPE1 buyers out there to make you stinking rich. As long as you didn’t buy within the last two years you’ll probably be able to make some money off of this type of buyer, at the very least you’ll be able to get most of your principle out of your property to make that money available for other uses.

TYPE3 – NOT BUYING
These are the bastards you have to watch out for. These people aren’t keeping an eye on prices or perusing the MLS. They don’t even know what current house prices are. They have no interest in the Vancouver Real estate market and the only way they’ll buy anything is if they win the lottery or have a rich aunt kick the bucket and leave them a bucket of cash. Maybe they’re still in highschool. Maybe they’ve allready bought a place. Maybe they are bankrupt and planning to move out of vancouver in the next year. Maybe they’ve attained a level of spiritual nirvana that leaves them uninterested in worldly possessions. Whatever the reason for their lack of interest, they aren’t really a factor in the price of your home. Shun these people. Yell at them when you see them on the street. They will ruin our economy and they will destroy our property values.

So where is the market now? what percentage of the population is type 1? What percentage is type 2? The number of house and condo sales have dropped in the last couple of months from the previous two years and inventory is up, but maybe the majority of type 1‘s just happened to take the last couple of months off and traveled away from Vancouver. Any estimates for the current population breakdown? And where will we find future type 1‘s to keep the money train going uphill?

August sales down, inventory up.

This story in the Vancouver Sun has some stats on the real estate sales figures for the lower mainland in August 2006. This is the fourth straight month of growing MLS listings. August saw a drop of 17.8 percent in sales overall, but the sale of single family homes were hit hardest with a drop of over 25%. Prices were still up in August, with the average single-family home price reaching $649,042, but with increasing inventory competing for fewer buyers there is a concern that property values are vulnerable to price drops as noted in a recent TD Bank bubble-watch report.

Helmut Pastrick, the chief economist for Credit Union Central B.C., expects that as long as the economy stays strong there won’t be any significant downturn:

Pastrick started sensing a slowdown in sales last fall related directly to the inching up of mortgage rates, which “hasn’t been . . . precipitous, but has been fairly steady.

“This is more an affordability-driven sales decline . . . but not enough [of a decline] to really trigger a significant downturn.”

Pastrick does foresee fewer first-time and low-equity buyers entering the market.

I wonder what will happen to prices if we were to remove demand from first-time and low-equity buyers? It looks like thats starting to happen now, the next year or so should be interesting.

Dave Rishel, president of the Fraser Valley Real Estate Board, said August sales were still at high levels, and the drop does not represent “quote, ‘the beginning of the bursting of the bubble.’ “

The increase in listings, Rishel added, should give buyers more selection and more time to rationally contemplate purchases.

“I think we are all in agreement that there will be adjustments in the market,” Rishel said. “We’d be fooling everybody to say that there will be a steady cycle all the way up to wherever. We all anticipate these slowdowns from time to time, but [overall] I don’t envision anything radical.”

Selling in Vancouver – Good, Bad & Ugly

Are you looking to sell a condo, house or townhouse in vancouver? With lots of stories in the news about housing market crashes across the US, recession fears & slow sales in the lower mainland for July and August here are some quick good, bad and ugly points about selling your property:

THE GOOD:

Vancouver is still a very desireable place to live – there are still lots of people that would like to buy your home.

THE BAD:

They can only afford about half your current asking price.

THE UGLY:

Highest new housing starts in recorded history for July, thousands of new condo units coming up in 2006 & 07, imigration flat, high debt level and low incomes, interest rates rising, prices on new units dropping to move inventory.

True tales of Real Estate fraud.

A depressing tale courtesy of the Toronto Star about a man who had his rental property sold out from under him by identity thieves. Apparently title fraud is on the increase creating problems for both owners and the buyers who assume they are dealing with the true owner of a property.

Friday free-for-all

Ok, here it is – the random catch all non-topic. Post any comments you have about the vancouver housing market, predictions for the future, rediculous MLS listings, news story oddities or anything to do with housing, bubbles, wealth or what-have-you.

Keep it reasonably clean and civilized or suffer a lawsuit at the hands of some random condo marketing corporation.