Real Estate

Vancouver housing bubble?

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Deal Addict
Dec 6, 2006
4524 posts
1153 upvotes
Toronto
traderjay wrote: How many people "upgrade" from a $1.5M to a $1.7M house? That is barely an upgrade at all so why focus on the hypothetical. Those looking to upgrade from a $1.5M are mostly eyeing properties in the $2M+ range before it is worthwhile and to them $80K or $100K is just pocket change. Oh you conveniently left out realtor rebate in your calculation which are tens of thousands.
Yeah please change the topic here. Let's go argue over upgrading home from $1.50M to 1.55M with the maximum possible cost and add another 40% as misc cost. That should be easier to proof how upgrading never works.
Deal Addict
Jun 20, 2011
1831 posts
636 upvotes
VANCOUVER
traderjay wrote: How many people "upgrade" from a $1.5M to a $1.7M house? That is barely an upgrade at all so why focus on the hypothetical. Those looking to upgrade from a $1.5M are mostly eyeing properties in the $2M+ range before it is worthwhile and to them $80K or $100K is just pocket change. Oh you conveniently left out realtor rebate in your calculation which are tens of thousands.
1.5 to 1.7 is plausible.

1.5 east vancouver home that's 50 years old on avg to a 1.7 north burnaby or south surrey home that's newer and bigger.
Sr. Member
Jan 30, 2006
857 posts
286 upvotes
traderjay wrote: How many people "upgrade" from a $1.5M to a $1.7M house? That is barely an upgrade at all so why focus on the hypothetical. Those looking to upgrade from a $1.5M are mostly eyeing properties in the $2M+ range before it is worthwhile and to them $80K or $100K is just pocket change. Oh you conveniently left out realtor rebate in your calculation which are tens of thousands.
this is exactly what I say -. nobody in his right mind would upgrade from 1.5m to 1.7m. they would be eyeing 2m+. this is exactly what I say
the only 2 problems 80k is not pocket change ( 130k+ in toronto) for those people and they definitely can't afford to upgrade to 2m+
those people just bought 10-15 years ago and their inocme most likely less than yours
this is why moving up ceased to exist. this is the point of the argument

and this is why you will be deep underwater in the next 5 years

so thank you for your support in this matter
[OP]
Deal Fanatic
User avatar
Dec 3, 2004
5135 posts
3572 upvotes
Vancouver
Garth Turner's blog on Vancouver real estate is really ramping up the hyperbole. Today he posted his most blunt blog post in a while, simply attacking Vancouver Real Estate and proclaiming "GET OUT" as the title. He points to the severe decline in Detached homes around the Vancouver area and the listings-to-sales ratio turning yellow. However, I will note, he fails to mention that Attached and Apartment are doing the exact opposite and have very high sales with very low listings and price gains.

Nonetheless, the detached market sales figures crashing is not something to treated as insignificant. Things might get interesting again.

Here is the post from [url]www.greaterfool.ca:[/url]
Get out

July 11th, 2016 — Book Updates — E-mail this blog post to a friend

My advice on real estate in Vancouver bears repeating. Get out.

If you’ve made a windfall profit, take it and run. If you’re leveraged up to the pits and speculating on big gains, bail. If you’re within a few years of retirement with most of your net worth in four walls, suck it out. If you cannot afford to see your equity peeled back by a third or more, and stay that way for years, then retreat. If you listened to Mom and bought a condo with diddly down, get out. If you’re a Westside gazillionaire, and want to stay that way, sell. If you just bought a shack for $2.8 million, well, too late.

The evidence of a substantial decline in the months ahead seems overwhelming.

Sales of detached homes have withered. Remember this chart from a few days ago?

CHART 1

Sales across Delusia fell by almost 8% from May to June. And beyond that, look at these toppling numbers for the various regions tracked by the local real estate board: Burnaby -30%, New West -8%, Poco -33%, Richmond -28%, Squamish -52%, Van East -26%, Van West -35%, Van North -1.2%, Whistler -41%. Does that look healthy to you?

At the same time, multiple bid situations are becoming increasingly rare. Months ago every property was being fought over by a dozen or more desperate parties. Now a seller’s lucky to get competing bids in any number.

And look at the sales-to-listings ratio. This is a barometer of market health, measuring supply and demand, which is now flashing yellow. It’s dropped to the lowest level in more than three years, after peaking in March. Back in the spring a house had a 73% chance of being sold in any one month, while now it has declined to 59%. In East Van the number has withered from an 86% sales-to-listings ratio a year ago down to just 49% now. In the other end of town, from 82% to 46% in the same time frame.

RATIO CHART

Beyond these realtor-generated stats, house-horny, real estate-engorged YVRers should worry about a few other things. Like those foreign-ownership numbers everyone dissed the other day. Critics howled that a 3.3% barbarian level was misleading since the damage (from planeloads of Chinese billionaires) had already been done before the counting began. If true, what will sustain a market where the average family makes $70,000 and the average SFD is priced at $1.7 million?

Speaking of unaffordability, RBC’s latest survey alone should have had homeowners dialing realtors begging to get listed. When more than 100% of take-home income is required to just carry a house you already 25% paid for, your city is an accident waiting to happen. Get out.

And how about the latest national employment report on Friday? Forty thousand more lost full-time jobs, replaced by part-time positions, with 30,000 fewer manufacturing positions and so many newly unemployed, laid-off, punted people claiming to be ‘self-employed’. With a disproportionate amount of its provincial GDP dependent on real estate, BC is as much at risk as its jewel city.

Mostly, we should fear human nature. We move in emotional, unthinking herds with trending attitudes that inevitably lead to excess, loss and regret. Economies do not create bubbles. Only people can do that.

Young Ned wrote me yesterday from Calgary. His words pose a fitting conclusion to this post which has a two-word message.

“I know an old couple currently living in Calgary. They’ve been close family friends forever, and as they’re financially responsible, almost-retired folks I enjoy chatting with them about personal finances. This Christmas they visited family in Vancouver and ended up extending their stay an extra 2 weeks without explanation. When they were finally home, they happily announced that they had bought a condo in North Van to avoid being priced out of the market. The realtor even told them about how easy it was to commute from this location to downtown via water taxi. They should have no trouble selling that kind of rad lifestyle to any one of the desperate young professionals renting in the city, the realtor said.

“This couple didn’t go to Vancouver with any intention to buy. There is only a slim chance they will retire in Van. They’ve taken a chunk out of their retirement savings and added a mortgage, and they genuinely can’t explain why they did it. I stopped short of calling them “part of the damn problem” because I value their friendship more than I value being a petulant ass… but some people are going to get hurt in this market. It’s not just a rat race anymore, it’s a race where the course is sprinkled with rat poison…”
[OP]
Deal Fanatic
User avatar
Dec 3, 2004
5135 posts
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Vancouver
Latest pricing chart in Vancouver. Check out the recent peaks.

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Deal Fanatic
Feb 9, 2009
8370 posts
5480 upvotes
adamtheman wrote: Latest pricing chart in Vancouver. Check out the recent peaks.

Image
If that was a stock I'd short it to hell
Member
Sep 1, 2013
402 posts
95 upvotes
As always, June follows May and out come "sales down", "listings up", "peaked in May" pickets.

S&P500 making new highs is a window into the real estate markets.
Deal Guru
Jan 27, 2006
12591 posts
5755 upvotes
Vancouver, BC
As the old saying goes, "Bulls make money, bears make money, and pigs get slaughtered". There is nothing wrong with taking a profit and calling it a day.
Deal Addict
Jan 14, 2009
1675 posts
669 upvotes
Vancouver, BC
craftsman wrote: As the old saying goes, "Bulls make money, bears make money, and pigs get slaughtered". There is nothing wrong with taking a profit and calling it a day.
In Canada, there's another old saying, "To the cowardly, the brave appears foolish." Another Canadian classic, "The cowardly will always want their fair share from the brave."
[OP]
Deal Fanatic
User avatar
Dec 3, 2004
5135 posts
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Vancouver
Ironcat wrote: As always, June follows May and out come "sales down", "listings up", "peaked in May" pickets.

S&P500 making new highs is a window into the real estate markets.
For detached homes, sales are down YoY (not MoM). That's why there's talk of it. It's not the normal May>June drop or whatever.

That being said, the housing market in Vancouver as far as apartments go is red hot. Hotter than it has ever been.

In June alone there were 2108 sales of apartments across Metro Vancouver and only 2443 active listings. That's insane. That is a ratio of 86%.

Detached houses, meanwhile, had 1567 sales with 4429 active listings, giving them a ratio of 35%.

According to the REBGV itself (right from the horses mouth) http://www.rebgv.org/faq/what%E2%80%99s ... 99s-market - that puts Vancouver's detached market very close to a buyer's market (sub 35%).
Deal Addict
Jan 14, 2009
1675 posts
669 upvotes
Vancouver, BC
adamtheman wrote: For detached homes, sales are down YoY (not MoM). That's why there's talk of it. It's not the normal May>June drop or whatever.

That being said, the housing market in Vancouver as far as apartments go is red hot. Hotter than it has ever been.

In June alone there were 2108 sales of apartments across Metro Vancouver and only 2443 active listings. That's insane. That is a ratio of 86%.

Detached houses, meanwhile, had 1567 sales with 4429 active listings, giving them a ratio of 35%.

According to the REBGV itself (right from the horses mouth) http://www.rebgv.org/faq/what%E2%80%99s ... 99s-market - that puts Vancouver's detached market very close to a buyer's market (sub 35%).
Yup, looks like a BIG buyer's market. I think I'll pick up a couple of detached in Vancouver proper since I've been looking for 5 years.
[OP]
Deal Fanatic
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Dec 3, 2004
5135 posts
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Vancouver
zakarydoks wrote: Yup, looks like a BIG buyer's market. I think I'll pick up a couple of detached in Vancouver proper since I've been looking for 5 years.
Only two? In Vancouver a buyer's market just means that you are allowed to buy a house for asking price.

A seller's market is when you fight 20 other foreign bidders to the death and have a realtor shouting at you "We need to go in at least 500k over asking".
[OP]
Deal Fanatic
User avatar
Dec 3, 2004
5135 posts
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Vancouver
AMRadio wrote: Why Vancouver housing may have hit its dot-com bubble peak

http://www.bnn.ca/News/2016/7/11/Why-Va ... -peak.aspx
“You can only get so many people into the housing market. We’re already at record highs of home ownership. I don’t know how many more people can own a house or a condo.”

Challenge accepted.

Sincerely,
City of Vancouver
Deal Addict
Jan 14, 2009
1675 posts
669 upvotes
Vancouver, BC
adamtheman wrote: Only two? In Vancouver a buyer's market just means that you are allowed to buy a house for asking price.

A seller's market is when you fight 20 other foreign bidders to the death and have a realtor shouting at you "We need to go in at least 500k over asking".
Sure, at these prices I would not be surprised if the crowd thins a bit. I don't even own a house, I just like seeing the "crashers" withering on the ground clutching their head in agony. Just like how I don't like Trump but like seeing the anti-Trumps suffering.

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