Real Estate

Vancouver housing bubble?

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Angel Girl wrote: Wow, you guys are so fast at posting. I scrapped my reply because you guys already covered everything!

I'm surprised by these prices, but still happy to see that people with money are moving to these areas. They are not all fighting to buy in the same few west side areas of Vancouver anymore. Times are changing! :)
For me, I think I underestimated how frequently people patronize these coffee shops and bars. I always thought the $5 (more like $7 now) latte and craft brews were just a meme. I couldn't imagine moving to an area to be close to your favorite cafe. But it makes sense to be walking distance if you go daily. I moved to Metrotown to be walking distance to work - similar thing lol.
If you buy vgro for a thousand years Vancouver homes will still be out of reach.
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5868 ALMA STREET
Selling Price $4,100,000
Asking Price (Final) $3,899,000
Asking Price (Original) $3,899,000
Property Assessment
5868 ALMA STREET
Year Total Land Improvements Change
2021 $2,497,000 $2,143,000 $354,000
Verify information with the assessment authority.
Sold Price to Assessed Value ratio is 1.64
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Alpine84 wrote: https://www.theglobeandmail.com/real-es ... -eyebrows/

You guys were right. Millenial buyers were the bidders & buyers of the $4m East Side house!!!
'That’s a bit scary’: Vancouver home’s record $4-million sale highlights the risks of paying over asking
KERRY GOLD
VANCOUVER
SPECIAL TO THE GLOBE AND MAIL
PUBLISHED MAY 14, 2021
UPDATED 1 HOUR AGO

Realtor Danny Nikas thought that they might be pushing it, listing an east side property on a 33-foot-lot for almost $3.6-million. But the seller, who’s experienced in real estate, insisted on the price. They ended up setting a Vancouver record.

The seller had purchased an old house at 332 E. 23rd Ave., on the east side of Main, and in 2020, built a new 2,900 square-foot home with laneway house. Although it’s only a standard 33- by-122-foot-lot without much in the way of yard space or landscaping, and some mountain views, the seller knew that there was a market for it.

The seller insisted that they wait two weeks to look at offers. After two weeks on the market, the property sold Monday night for $4-million – the highest price paid for a house on a 33-foot-lot on Vancouver’s east side, says Mr. Nikas.

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The sale sets a record as the highest sale price of a 33-foot property on the east side.

HANDOUT

They received three offers, all over the asking price of $3.588-million. One offer was slightly higher than $4-million.

“I had so many calls the next two days from realtors, calling and saying, ‘I heard a rumour, is this true? Four million dollars?’ One realtor said, ‘that’s a record that will never get broken.’ It will get broken – eventually.”

All the offers came from millennial age buyers with young kids. All offers were subject free and were made with a bank draft deposit. The winning offer came from Canadians who’d been working in Seattle and sold a house there, and that gave them the edge, says Mr. Nikas. Mr. Nikas felt that the couple with the American money would be less risky.

Developer files lawsuit against Vancouver over empty-homes tax

“Four million to them is kind of like $3-million, if you know what I mean. Whereas I’m worried that if we go with the other offer, I’m worried that in a month a bank might do an appraisal and if comes in at $3.6-million there will be a $400,000 shortfall and will they be able to complete in August?”

Mr. Nikas says the market is changing, and for those who are borrowing, there could be a risk if bank appraisals come in lower by the time they need that mortgage.

“I’ve been hearing stories,” he says. “Many homes are selling over asking, $300,000 or $500,000 over asking. A few of the higher priced homes I’ve heard, they are not appraising out at what people are buying them for. So there’s a shortfall somewhere, and it makes it challenging for someone to complete three months later. I brought that up [with the seller], that it could be a concern.”

“[But] I thought … if they sold their house in Seattle with U.S. dollars, they are buying in Canadian dollars, so they have that extra money. That was the reason I suggested we go with that offer, and they agreed.”

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The sale sets a record as the highest sale price of a 33-foot property on the east side. Mr. Nikas had set another record last November when he sold a five-bedroom character house around the corner on a 33-foot-lot at 285 E. 24th Ave. It was listed at $2.850-million and sold for $3.3-million. That sale had attracted the attention of the seller on East 23rd Ave., who believed he could sell his new house for $4-million, despite Mr. Nikas’s doubts.

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All the offers came from millennial age buyers with young kids.

HANDOUT

“He was confident, and this is why: from the beginning he told me, if you want a new house with a laneway house, there is no inventory. The cost of lumber has gone up so much for building that it’s going to cost anyone to build the same house today way more than it did two years ago. So he knew if people do their research on what it costs to buy a lot and build, $4-million is not out of line. His crystal ball was accurate.”

The seller, who declined an interview, lived in the house with his young family but decided to sell for financial reasons. BC Assessment shows that the property was sold in May 2018 for $1.7 million. As of July 2020, the home was assessed at $2.469 million.

“This was their forever home, but the dynamics had changed. He felt financially pressured with a high mortgage, and thought, ‘is it better to live in a more modest home without the pressure of a big mortgage?’”

Mr. Nikas says the plan is to buy a more modest home and use their extra money to buy a recreational property. The seller owns other properties, he said.

Mr. Nikas lives in Dunbar on the west side, but people are choosing the vibrancy of Main Street over his quiet, bucolic area.


“The Main street pocket is more vibrant, and it’s very central, whether going east, west, north or south, any direction. And Vancouver has gotten worse with traffic over years so when you are in Dunbar you are so far west it takes you so much further to get anywhere, whereas with Main Street, you are almost at the epicentre. And there are more young families, more vibrant of a community. Certain people bought in Dunbar and Point Grey in the last 10 or 15 years, and it doesn’t have a vibrant community feel; it’s very quiet. For me, I like it because at eight o’clock it’s quiet. There are no transient people looking for bottles, and it’s edgier by Commercial Drive or Main Street, in the evenings. But people do like that vibrant walkability of Main Street to get to shops and restaurants, and stuff.

The vibrancy and central location of Vancouver’s Main Street corridor surrounding Broadway is a critical factor in the area’s skyrocketing housing prices, according to the agent.


“Right now Douglas Park and Main Street pockets are out-pricing Dunbar and Point Grey, which historically used to be the highest values.

“In Dunbar/Point Grey, new houses on 33 [foot lots] are not selling for $4-million.”

Mr. Nikas believes that low inventory and low interest rates are driving the market, as well as some buyers who are trying to buy before changes on June 1 that will make the mortgage stress test tougher.

He’s noticed that there’s increasing inventory, so it’s becoming more of a balanced market than a total seller’s market.

Realtor Patricia Houlihan, who specializes in the Northshore market, called the price “ridiculous.”


“I think the problem is, some people don’t realize how grossly they are over paying, and that’s a bit scary,” says Ms. Houlihan, who is also a lawyer.

She says that the market is changing and she’s advising her clients to ask for a short closing date, and to rent back the property if necessary. If the appraisal comes in lower than the accepted price, then a buyer might have to come up with a bigger down payment. And she’s heard of buyers who put in high offers with the expectation that they can always walk away from it if they can’t get financing.

“You need it to close now. There’s a very good chance the market will significantly change in the next three to six months, so if you have a three-month closing your buyer may not be able to complete.

However, she says that there are many low-risk local buyers who are paying cash and fully prepared to go through with the sale.

“A lot of buyers are paying cash, have their financing ready to go, and have already sold, and they are no more risky than someone out of the country. When dealing with multiple offers, you’ve got to know who the buyers are and what their situation is, because the market could change on a dime.”

Realtor Cheryl Steer sold a bungalow recently at 3193 West 28th Ave., in the MacKenzie Heights neighbourhood on the west side, for $3.1-million, which was $500,000 over the asking price. The older house, which sold after seven days, sits on a large corner lot, in an area that had at one time been considered far more expensive than any part of the east side. Ms. Steer grew up in MacKenzie Heights.

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“We did see the east side go up significantly in price, whereas some of the sub areas on the east side became more expensive than on the west side,” says Ms. Steer. “The Main area in particular is really hot. Anywhere on that Main corridor is just so sought after. And I can understand why – it’s because you’re close to transit and there are so many restaurants and shops, it has become a destination. In Dunbar, and along certain parts of Broadway, Fourth, and Tenth Avenue, you are seeing businesses failing all the time. And it’s further from transit, and also I feel over the past little bit, that downsizers have crept east probably because their kids are [living] out that way. There’s more action over there.

“The east side has become what the west side was when I was growing up.”
If you buy vgro for a thousand years Vancouver homes will still be out of reach.
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Yeah, honestly - many in my circle (30's) would much prefer the Main corridor over Dunbar, Kerrisdale, and even Kits.
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carsncars wrote: Yeah, honestly - many in my circle (30's) would much prefer the Main corridor over Dunbar, Kerrisdale, and even Kits.
I think most of us got that. It was the going from overpaying for lattes and IPA to hyper bidding 33x120 homes that caught us off guard. We went from $6 lattes and $10 beers to $3+ million dollar 33x120 homes. Revenge of the millennials for sure.
If you buy vgro for a thousand years Vancouver homes will still be out of reach.
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Feb 29, 2012
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Kiraly wrote: 7515 Rupert. Listed Feb 23 $1.688M, sold in 7 days for $2.3M, $612,000 over asking. https://www.straight.com/news/vancouver ... ice-for-23
3285 Victoria. Listed Feb 16 $1.728M, sold in 8 days for $2.6M, $872,000 over asking. Georgia Straight March 4 print edition, page 9
Are ordinary single-family houses going to sell for $5M before long? Then $10M? $20M? When will it stop?
So Chinese-Capital favored/type neighbourhoods aren't doing so hot compared to Professional Income neighbourhoods but shout-out to this Killarney tear-down which sold for $2.4M. This is a new record which beats the $2.3M record that was set in February only a short walk away.

6721 KILLARNEY STREET
41x141
$2.405M Sold
$1.99M Ask
$1.677M BC Assess

For a builder to turn a 20% project on this building side-side duplex's (because cmon what else are they gonna build here...) they would need to net $1.9M aka buyer pays $1.91+5% GST. Thats assuming an experienced builder with low construction cost of $800,000 which is also unlikely with current prices of lumber and material.

What do you guys think? Builder's dumb? Or first set of duplex's in East Van to hit $2M? Or will Main/Fraserhood beat Killarney to it haha
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zakarydoks wrote: I think most of us got that. It was the going from overpaying for lattes and IPA to hyper bidding 33x120 homes that caught us off guard. We went from $6 lattes and $10 beers to $3+ million dollar 33x120 homes. Revenge of the millennials for sure.
Still not convinced about this. If these "street amenities" is what its about then we should see Kingsway -> Metro being super sought after. Or - ok - at least the homes around Metro itself. Unless its the fact that "non-asian street amenities" is the key driving factor, which I also don't believe lol. Similarly, we don't see the same spike in Cambie King Edward (yes its expensive but its always been expensive) which should be popping if the motivation for all these bidders are street restaurants, cafes, and pubs.

Just my 2c :/
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virgozero wrote: So Chinese-Capital favored/type neighbourhoods aren't doing so hot compared to Professional Income neighbourhoods but shout-out to this Killarney tear-down which sold for $2.4M. This is a new record which beats the $2.3M record that was set in February only a short walk away.

6721 KILLARNEY STREET
41x141
$2.405M Sold
$1.99M Ask
$1.677M BC Assess

For a builder to turn a 20% project on this building side-side duplex's (because cmon what else are they gonna build here...) they would need to net $1.9M aka buyer pays $1.91+5% GST. Thats assuming an experienced builder with low construction cost of $800,000 which is also unlikely with current prices of lumber and material.

What do you guys think? Builder's dumb? Or first set of duplex's in East Van to hit $2M? Or will Main/Fraserhood beat Killarney to it haha
They will get $2m for each duplex.
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virgozero wrote: Still not convinced about this. If these "street amenities" is what its about then we should see Kingsway -> Metro being super sought after. Or - ok - at least the homes around Metro itself. Unless its the fact that "non-asian street amenities" is the key driving factor, which I also don't believe lol. Similarly, we don't see the same spike in Cambie King Edward (yes its expensive but its always been expensive) which should be popping if the motivation for all these bidders are street restaurants, cafes, and pubs.

Just my 2c :/
Who's paying 3m for east king Ed then? It could be many factors but I think Main being non Asian plays a big part of it. Maybe too many Asians west of Cambie. Some people don't want to be surrounded by Chinese people and will pay a premium for it. I think a similar house closer to Cambie still cost 500k+ more. Main corridor is like SFHs version of Yaletown. Imagine you lived in Yaletown where there are not many Chinese and wanted to a sfh and not surrounded by Chinese, you really have no choice.

I know people used to move to north Vancouver to avoid the Chinese but millennials hate driving for some reason.
If you buy vgro for a thousand years Vancouver homes will still be out of reach.
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virgozero wrote: Still not convinced about this. If these "street amenities" is what its about then we should see Kingsway -> Metro being super sought after. Or - ok - at least the homes around Metro itself. Unless its the fact that "non-asian street amenities" is the key driving factor, which I also don't believe lol. Similarly, we don't see the same spike in Cambie King Edward (yes its expensive but its always been expensive) which should be popping if the motivation for all these bidders are street restaurants, cafes, and pubs.

Just my 2c :/
All those other areas aren't quite as trendy.
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zakarydoks wrote: Who's paying 3m for east king Ed then? It could be many factors but I think Main being non Asian plays a big part of it. Maybe too many Asians west of Cambie. Some people don't want to be surrounded by Chinese people and will pay a premium for it. I think a similar house closer to Cambie still cost 500k+ more. Main corridor is like SFHs version of Yaletown. Imagine you lived in Yaletown where there are not many Chinese and wanted to a sfh and not surrounded by Chinese, you really have no choice.

I know people used to move to north Vancouver to avoid the Chinese but millennials hate driving for some reason.
If people wanted to avoid the Chinese, wouldn't they move to another city?? Vancouver is full of Asians...
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Totor0 wrote: If people wanted to avoid the Chinese, wouldn't they move to another city?? Vancouver is full of Asians...
It's not like they hate the Chinese or anything, but sometimes it can be too much. I know some Chinese who gets tired of being surrounded by Chinese.

Also they want to be close to DT because they hate commuting so the best they can do is kits or main street.
If you buy vgro for a thousand years Vancouver homes will still be out of reach.
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zakarydoks wrote: It's not like they hate the Chinese or anything, but sometimes it can be too much. I know some Chinese who gets tired of being surrounded by Chinese.

Also they want to be close to DT because they hate commuting so the best they can do is kits or main street.
I don’t agree it’s the amenities on Main / Fraserhood. I genuinely think it’s because of its vicinity to Broadway and Downtown - so I agree with you there.

If someone wants to live in biking distance or short drive to yaletown, but wants a detach with garage and backyard then North Main makes sense (though Fraser and 33rd is still... far?)

I also wonder what that means for grandview area that’s just east of uptown/downtown - we saw those vancouver specials run up to over $2M renovated which makes sense and is alignment with the “cheapest detach near downtown” argument.
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virgozero wrote: I don’t agree it’s the amenities on Main / Fraserhood. I genuinely think it’s because of its vicinity to Broadway and Downtown - so I agree with you there.

If someone wants to live in biking distance or short drive to yaletown, but wants a detach with garage and backyard then North Main makes sense (though Fraser and 33rd is still... far?)

I also wonder what that means for grandview area that’s just east of uptown/downtown - we saw those vancouver specials run up to over $2M renovated which makes sense and is alignment with the “cheapest detach near downtown” argument.
I mean amenities could be a factor, along with location. I'm just going with the the most commonly given reason by people who move there. Personally I don't frequent those stores often either but apparently some people love them.

Personally I won't live in Grandview and PNE area. I would pay 3m for south main if those were my only choices. My only issue with south main is the crime and social housing in the area, otherwise it's not bad.
If you buy vgro for a thousand years Vancouver homes will still be out of reach.
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zakarydoks wrote: It's not like they hate the Chinese or anything, but sometimes it can be too much. I know some Chinese who gets tired of being surrounded by Chinese.

Also they want to be close to DT because they hate commuting so the best they can do is kits or main street.
Interesting. Demographic-wise, what percent Chinese would be too much, in your opinion?
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Totor0 wrote: Interesting. Demographic-wise, what percent Chinese would be too much, in your opinion?
No idea, you'd have to ask them. But let's do a though experiment. What would happen to the price of Main Street if more Chinese people (let's say the Richmond kind for this case) moved in and bubble tea shops started to open up? I think prices will pull back due to the decrease in trendiness.
If you buy vgro for a thousand years Vancouver homes will still be out of reach.
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zakarydoks wrote: No idea, you'd have to ask them. But let's do a though experiment. What would happen to the price of Main Street if more Chinese people (let's say the Richmond kind for this case) moved in and bubble tea shops started to open up? I think prices will pull back due to the decrease in trendiness.
You are suggesting that Chinese people are undesirable and have a negative influence on property values. The Chinese will cause a "decrease in trendiness", in your opinion. If your theory is true, then Vancouver should be much cheaper than all the other cities in North America, given the significant Chinese population here. Why is Vancouver the most expensive city in North America then?

Richmond has a significant price discount because the entire area is a flood zone and below sea level, and not only that, insurance companies refuse to provide flood damage coverage given the unacceptable risk.
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Totor0 wrote: You are suggesting that Chinese people are undesirable and have a negative influence on property values. The Chinese will cause a "decrease in trendiness", in your opinion. If your theory is true, then Vancouver should be much cheaper than all the other cities in North America, given the significant Chinese population here. Why is Vancouver the most expensive city in North America then?

Richmond has a significant price discount because the entire area is a flood zone and below sea level, and not only that, insurance companies refuse to provide flood damage coverage given the unacceptable risk.
I think you are reading too much into what I said. Different areas have different demand and price drivers. Punjabi market in South van traded at a discount for a long time. I can see a similar effect with Chinese and Main. Trendiness like Main street is very very scarce in Vancouver so people are willing to pay 4m to live there. I just did a Google search and there's 0 bubble tea stores on the trendy stretch of Main. Wow nice! Maybe I need to move there! Contrast that with Kingsway, 50 bubble tea stores 🤮.

For Main street, I think for every one point Incresse in Chinese demand there will be a corresponding 2 point drop in professional demand.
If you buy vgro for a thousand years Vancouver homes will still be out of reach.
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zakarydoks wrote: I think you are reading too much into what I said. Different areas have different demand and price drivers. Punjabi market in South van traded at a discount for a long time. I can see a similar effect with Chinese and Main. Trendiness like Main street is very very scarce in Vancouver so people are willing to pay 4m to live there. I just did a Google search and there's 0 bubble tea stores on the trendy stretch of Main. Wow nice! Maybe I need to move there! Contrast that with Kingsway, 50 bubble tea stores 🤮.

For Main street, I think for every one point Incresse in Chinese demand there will be a corresponding 2 point drop in professional demand.
haha lol
The chinese will move in when there is money to be made
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