Monday, November 06, 2006

comparable?



This place at 2770 McGill (v612788) is a steal for only $628k.

Last year we looked at a place (comparable, if a bit smaller?) just down the block at 2710 McGill, which was listed for $325k.

I'll let you make your own deductions.

21 comments:

downtownguy said...

I can only type a quick note as I am heading over to the general area of the PNE with a big fat deposit. Thank you for locating this for me. A finders fee necessarily follows.

The value is incomprehensible. I am going to put 25% down. What else am I going to do with those $157,000? That leaves a mortgage of $471,000 and monthly payments of $3,409 for 25 years. That isn't so long. I mean, I am 30 now and absolutely totally believe that my 55 year old self won't be mad at me at all in 25 years when I impulsively do what I am about to do.

I can afford it, that only takes up 58% of my net monthly income. I can change my lifestyle. It is worth it since that is a good house in a nice neighbourhood. My children will enjoy growing up there. The wife and I like busy roads.

Besides, I am going to rent it out. The top could bring in $1,500 easy. The bottom at least $1,000. Heck, there might even be renters in it right now. So all I need to do is fix the occasional leak, maybe the lawn will need some mowing - no problem. What could go wrong? I can't imagine there would be any hidden or unexpected costs. No way. When one renter wants to move out, I will just get another one right away. I would expect that they will treat the place nicely.

So on my numbers I will only need to pay about $1,000 for the privilege of some other person living in my house. They are the suckers though - I mean, in 25 years, barring anything going wrong (which it wont), I will have myself a house.

In my book, that is way, way better than putting my $157,000 and $1,000 a month into something risky and high maintenance like a mutual fund. Are you kidding me? Every four months I need to look at it to make sure it is accurate and every year I need to review it to make sure it still matches my investment requirements? I am a busy guy and I choose not to be inconvenienced in this way. I would rather bet my life on the soothing and risk free investment that is a 39 year old house with single pane windows.

Thank you blogger. We will have you over for dinner and may even rent you a parking spot on our front lawn during events at the PNE on a reduced rate. Thank you.

n said...

Don't forget downtownguy: When you need to find a new tenant you can raise the rent, I'm sure that the market can bear an increase of a few thousand dollars a year for the pleasure of living that close to burnaby! Eventually your constant increases may even cover maintenance, mortgage and taxes and you'll be RICH!*

If you're looking for someone to guide you through the tricky paperwork you might want to check out this agent, he seems to have some very interesting ideas.



*Less in debt anyways

solipsist said...

It's funny downtownguy, since posting this gem this afternoon, I laughingly mentioned it to my wife, and she gave me hell for posting it.

She said that she was really chuffed at not getting the place 5 doors down last year, and pointed out to me that homes have nearly doubled in price in the area. She feels that that is a strong indicator, and that next year this place will be worth close to a million, and by the time the Olympics arrive, well...

She also pointed out that we could make about $60-$100 per day during the PNE, and that all we had to do was stand in traffic with a little sign and point people to our home. There are still some elderly people left in the neighbourhood too, and she said that we could hire them to jump out into traffic, and park people on their lawns too. They wouldn't even know about it, and if they did say something, we could just bully them.

I don't want to get into a bidding war with you guys, but I am thinking that this place is underpriced, and am willing to go up to $750K to get it.

n - have you had any experience with that agent? He sounds pretty cool to me. The thing is too, OMA is selling 647 sq. ft. condos for $325k, and they are in Burnaby. This place is twice as big, so it must be worth twice as much.

I really like the big numbers on the front too. That will facilitate the potential renters finding it as they zoom along McGill at 80 km/h.

downtownguy said...

On a serious note for a moment, with everyone taking on mortgages that they can barely afford, what do you think these houses will look like in 25 years. How many dinks will take on this mortgage only to find out that it is difficult on one salary and kids. I think we will see significant disrepair - especially when the houses start losing equity and you can't borrow against the house. Maybe you and your wife will drive by 25 years from now and those big numbers will be swinging in the wind, and you can share a chuckle or two.

solipsist said...

Good point dtg. There are certainly lots of dinks that must have bitten off more than they could ever chew.

At the same time, this area could be worth huge money in 25 years as densification takes itself further east.

I wouldn't dream of shackling myself to those kinds of payments though. I wonder how many people will have deep regrets in the next 5-10 years. Younger people can better afford to make those kinds of mistakes than I can.

Anonymous said...

Just an anecdote. I am a female, I went to an open house, and laughed loudly when I saw the asking price. I then gave a list of reasons to the realtor why buying does not make any sense and explained to him why this condo was so shitty. He took me on the side and laughed:" Fortunately, not all women are as reasonable as you are. Our job is to make the wife fail for a home, and have her pressure her husband to sign the papers."

solipsist said...

anonymous,

Thanks for the anecdote.

That is sad in so many ways. I will not regale with that.

Something that has been rolling in my mind lately (and I hope to go into it at some point soon), is the whole marketing thing. Humans have always used psychology to their own ends, but sales and marketing have become so much more sophisticated. There are whole departments in universities dedicated to that. A case in point is the Rennie Marketing Systems. These guys are laughing up their sleeves as the mesmerized slaver over shite and sign their lives away.

Your experience was transparently old-school, and almost refreshing to me. Forgive me, but any foolish wife who falls for granite counter tops, and is able to convince her idiot husband to sign deserve their fates. They probably shouldn't dilute the gene pool with children either. Oh my, I'm ranting.

It must have been fun for you to shock the agent so.

spark said...

Hello all, I have been lurking on this site (all the 3-4 vancouver housing bubble sites) and thought I would post something.

often I goto craigslist.org and look under realestate for sale - what I like to do is search for the word, "reduced" results?:
sept 26 : 37 postings
sept 28 : 42 postings
oct 13 : 49 postings
oct 25 : 65 postings
http://vancouver.craigslist.org/search/rfs?query=reduced
this week there are 62.

wow theres one reduced by 100K...WTF? LOL.

cheers,

spark

Anonymous said...

The current RE situation in Vancouver makes me think of an episode of "The Twilight Zone" where a man is watching a drama on TV, unaware of the fact that it's really about his own future.

Is there any sentient person in town who hasn't heard of the unfolding RE debacle in the US? Do people think Vancouver is immune? What's the #1 industry in BC (oh, sorry I asked)?

In the 1981 crash there was no advance warning. This time there is.

mk-kids said...

A colleague bought an older house in the Cambie & 16th neighborhood for over a half million late this summer. He actually tried to convince me that this was a great deal & I should get into the real estate market now because - say it with me - "prices are only going up"!!! He was quite convinced that paying this much coin for this little house was very reasonable...

Well, turns out a few months later that they don't use their backyard because it gets no sun & during the rainstorm earlier this week, they discovered their basement is prone to flooding...

spark said...

Vancouver is immune...(insert sarcasm) we are different:
1. we are getting the olympics
2. we have the oceans
3. we have the mountains
4. we have a fixed amount of land

*points to the sky* thats where prices are going!

Babybull40 said...

All I can say is I'm glad I don't live there. I would never ever be able to afford a house there. As much as I love Vancouver.. I would have to win the friggin lottery before I can consider buy a house that would cost eg:(400k) there would cost me pennies where I live.. I'm positive my house would go for a nice chunk of change despite the fact it needs some work.. Hmmm.. Can I move my house there maybe.?

solipsist said...

Thanks for posting everyone.

Babybull, you would be hard pressed to find any house in Vancouver for $400K.

In fact, I just did an MLS search for houses maximum $400k for all of East Vancouver ("cheapest" part of the city), and came up with 2 listings. One is a small (30.65 feet x 99 feet) lot in Collingwood (V588916) for $359k (plus another $200k to build a 1,000 sq. ft. house), and the other is a dump in the Main and Hastings area (the poorest postal code in Canada - the infamous Downtown East Side) for $379k (V589107). It sits on a spacious (specious...) lot measuring 30.5 x 50 ft. Bars on every window and door come with the place. You could run a brothel out of it, but who wants to do that?

A search for houses between $400k and $450K turns up 5 listings. Between $400k and $500k turns up 67 listings. I would not want to rent most of those places - let alone buy them.

solipsist said...

Further,

Babybull, I know your house, and you would get a minimum of $500k for it if it was in Vancouver. Likely even more - because it has a fair bit of character.

But you have no mountains there, and will not be hosting the Olympics.

just observing said...

Thanks for the kind comment over at VHB earlier today. I'm surprised no one else took issue with the guy.

Maybe I'll run into you in Senegal in the coming years should this madness continue.

Cheers.

Babybull40 said...

Our mountain is a cliff so it's not the same thing is it? I was giving anaexample price with the 400k.. I figure it would get more, but seeing the prices on some the ones you have posted led me to believe that would be a guestimate on my part.. so thanks for clarifying.. 500k or more.. I better win the 649 tonight...

solipsist said...

jist observing - that comment (at VHB) was very lucid.

I think Senegal would be more attractive to me than Lithuania. It's warmer...

antz said...

I'll opt for Lithuania, closer to Denmark and its wonderful social programs ;)

solipsist said...

But antz - the weather (brrr - too cold), the mountains, the Olympics.

antz said...

I have never been there in winter, but autumn (October) was balmy and comfortable and the midnight sun in Finland and St Petersburg was gorgeous. Not forgetting that their houses are concrete bricks, well insulated when covered in snow.

solipsist said...

Hi antz,

I don't know Eastern Europe at all (except abstractly). I have always been interested in going, but so many places called to me more.

Someday I will go.