letters, queftions...anfwers?

clicky pic for biggerness

I got an e-mail yesterday (below), and sent a response.

I see no need to write a thesis on it, so without further preamble:

What would you do/say?

Queftion

20 Jun (1 day ago)

Hi,

I am moving from Yaletown to Port Moody, because I have a new job there. Should we keep our condo in Yaletown as an investment? Or should we sell and buy a condo out there? Which is a better investment: Yaletown or Port Moody?

Our condo here is at xxx Cambie on the 26th floor w. SW views. 1150 sq. feet w. engineered hard wood floors, 2 bedrooms and solarium. Assesed (sic) at 550k.

In Port Moody, we would buy a 2000 sq. foot townhouse for about $500k

My theory is to keep our condo here, and wait 10 years or until it reaches 1 million - whichever comes first.

thanks,

(name removed)

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Anfwer

Hello,

I would sell the condo, and rent until the correction has bottomed. Common consensus has it that the market has peaked. Look around at formerly "impregnable" markets (UK prices off 30%), and repeat the mantra - It is not different here, this time.

In 10 years, your condo may only be worth $50k - let alone a million. Your townhouse might be worth the same, and you would be on the hook for the mortgages on both.

If you have read much of my blog, you will know that I have been predicting a meltdown akin to, or worse than the Depression of the 1930's. Do you want to owe at least a half a million (for the TH) in a situation like that? If you want to make an investment, sell the condo, and buy two TH with the proceeds when the market bottoms.

My opinion is worth what you pay for it. I am not a financial planner, nor an RE guru, but I do have much, much more than I owe, and live very comfortably in my rented house, with no stress.

Best of luck, no matter what you decide.

solipsist

rebel sell

I had an e-mail asking whether there was any gain in waiting for the Canada Line to finish in order to sell a nearby house. Will there be greater appreciation? I think that appreciation would already be priced in.

I've always been a rebel though, and would cut off my nose to spite my face.

What do you think?

On 11/04/2008, Ben wrote:
Hi there, first of all I'd like to thank you for creating the blog. I really enjoy reading the valuable information and insight that I am currently lacking on the RE market. However, so far I can't really find much posts/commentaries on the affect RAV (Canada Line) will have on nearby real estate units. Please advise if possible since I'm not certain whether to sell my detached home now or wait until the RAV station (the one beside Oakridge mall) near my detached house is finished to get a price appreciation (if any at all). Thank you, it'd be really great to hear what your take is on this matter.

Cheers,
Ben


van unreal wrote:


Hi Ben,

Thanks for writing.

I couldn't say for sure, but my best, common sense opinion is that if the proximity of the RAV line to your house is going to have an effect on its value, that would already be realized. The line is, after all, already under construction, and is very unlikely to not be completed. The selling point would be something like "Just two blocks from the Oakridge Canada Line Station (to be completed August 2008...or whenever)".

By all reports, price appreciation is slowing drastically, as are sales. This summer could very well be the beginning of the end. You may just end up dropping the price repeatedly for the next year. I would say "SELL!".

I am not an expert, and I have been wrong for years, so my advice is worth what you pay for it, but why try to squeeze an extra $10k out of a $700k (or whatever it's worth now) house. Before too long, it will be worth $350k, and wouldn't you kick yourself then?

Good luck - whatever you decide.

solipsist