capitulation

I heard of Cameron Muir on CBC this AM, saying that Vancouver RE has corrected by 12% since March, and will correct another 18% over the next year. Wait a minute! Wasn't he saying earlier this year that price increases would moderate to 8% this year, and a bit lower the next? Now he is talking about a 30% correction. If we extrapolate the errors of the forecasts of the experts, we ought to see a 70% correction before this is done. Why does anyone even bother to interview these bobble heads? They have their heads so far up their arses... If it was me, I would be too embarrassed to get on the radio and make another prediction. And the interviewers... I would ask "well, you were so drastically wrong over the last 8 months, why should we give your statements any credence now?" Pulitzer must be weeping in his grave. Maybe rename it The Puh-leasitzer Prize, and award it to the most vapid "journalist".

I did my bi-monthly MLS search for all of East Vancouver today, and came up with 3 properties under $400K. That is a slight improvement over the one that I found last time. Pushing the maximum price up to $500K provides 35 properties - pretty much all of which are junk. The place that I wrote of on Oct. 10 has been "slashed" from $499K to $469K - not nearly enough.

The blurbs are not so over-the-top anymore; no real mention of heritage features such as original, cracked concrete walkways, and such. I found the place featured below ($419K), and thought the photographs to be simply weird.

Attention Builders or 1st time Buyers, cute 3 bedroom rancher on 41st/Earles in sought after Killarney area, renovate it to your hearts desire or build your new dream home, steps to all amenities, sunny south facing backyard/garage with lane. V727568

This wondrous house of character and fortitude comes with a door knocker and letter slot on a dove grey door!


A lovely, original fireplace (converted to gas!), with energy saving, candle-powered coach lights! These fine chattels are included in the purchase price!


Here is a close-up of one of the coach lights. The discerning value buyer will instantly recognize the antiquity of these features - as evidenced by the layers of dust. Sotheby's is interested!



There were 5 such pictures of the property. No over-view shot, no shots of any rooms, just fixations on mundane fixtures. Sad sellers.

I feel myself preferring (again) the fun of the housing crash over the over-all crash. It is easier to laugh.

fat ladies

I have been dying to use this picture (lifted from The Guardian - UK). Maybe it is nostalgia for a life I never knew, or only knew vicariously. Beats me. I just got back from my psychotherapist, and she doesn't have a clue either.

Well, really, I was going to do a post about the fat lady singing, or as it's turned out, real estate agents flipping.


The house next door to me sold for $450K to a real estate agent in April 2006. The buyer tried to flip it for $550K immediately, but ended up razing the place and building a McMonster. The McMonster sold for $799K in August '07. A real estate agent bought it from a real estate agent, and now the real estate agent is flipping it.

Gotta wonder why.

Is the agent finally seeing the writing on the wall? Finally? Be careful of the agent you choose, if that is the case.

Maybe the $2500/month rent income was not covering the oh-so-onerous mortgage payments...

It has not hit MLS yet, but I am so curious to know what the wishing price is. I doubt that it is sharp. I am even more curious to see if it sells, and for how little. I have a front row seat.

I'll keep you posted.

dada

My posting here has been getting slower and slower, while the residential listings come faster and faster. An incongruity to be sure. I have a good reason - as seen above. My kid is now 15 months old, and demands more and more attention. I can't, in good conscience, neglect the precious moments of growth and development of my progeny to stoke my own self through regular posting.

So what, beyond the obvious, does dada have to do with the RE market? Why, lots of course (no matter how oblique).

The dictionary provides some congruity (it's saved my butt a few times);

n. A European artistic and literary movement (1916-1923) that flouted conventional aesthetic and cultural values by producing works marked by nonsense, travesty, and incongruity.

dada

1920, from Fr. dada "hobbyhorse," child's nonsense word, selected 1916 by Romanian poet Tristan Tzara, leader of the movement, for its resemblance to meaningless babble.

dada

noun
1. an informal term for a father; probably derived from baby talk [syn: dad]
2. a nihilistic art movement (especially in painting) that flourished in Europe early in the 20th century; based on irrationality and negation of the accepted laws of beauty

nonsense, travesty, and incongruity - Yes, the marketing nonsense perpetuates a travesty in pricing that is incongruous to the real value of a home.

irrationality and negation of the accepted laws - Hmm, does that not describe the RE market in Vancouver (and indeed, elsewhere)?

meaningless babble - That describes all the hyperbole about mountains, weather, Olympics, "it's different this time, ...here", "the fundamentals are strong", and indeed, a lot of the meaningless babble written on this blog.

nihilistic - Would describe the attitudes of those of us who saw that it was all a bunch of hyped bull crackers.

OK, so that is it about dada.

Now, I find myself wondering if I should wait for another 5 or 10 years for the bottom to buy a home to raise my kid in, or whether I should just save my money, and give it to him to buy a place (or two) for cash, when all of the boomers have died off and there is no one left to buy over-priced real estate.

I dunno, but time will tell.

My postings are much more sparse, and I have struggled with the idea of quitting the blog, but I have decided to keep it going for at least a while longer. It is just starting to get interesting.

report

Yesterday, the Missus and the Ba, and I (Da) checked out this "lovely 1912 home" just for fun (it was an Open House, and we were passing by). The first thing that the agents said (beyond "hello") was that the price had been dropped from $799k to $709k, and that the sellers were "very motivated". The male agent started blathering about how the market was strong for another 4-5 years. I did not ask why the price reduction in the face of all that market strength.

The agents seemed a bit dejected.

The house is tenanted, with the main and upper floor rented at $1300/month, and the basement suite rented at $700/month. The two bedrooms at the top were very small, and the Missus said that it would be good for a couple, but not so much for a family. The kitchen has been recently modernized, and the basement suite was all modernized -with new plumbing, wiring, drains, etc. I asked if there was still knob and tube wiring in the house, and the agents were...evasive - pointing out the original fir trim and panelling.

The female agent looked at our gorgeous Ba, and said "Hi. You're kind of cute." The Missus looked at her sharply (usually, we hear "gorgeous", beautiful", or "adorable"), and I muttered that the house was "kind of over-priced".

It is a character-filled house, but I would not offer more than $400k.

pinch me

Oh me, oh my. I did a Realty Link search tonight, just to see what is up. Lotsa listings for East Van., but the range of properties in the same price range is surreal.

eg:


$725,000 on a 36x108 lot,

or,


$725,000 on a 33x110 lot.

Personally, I would rather have the first house. It is older, and most probably better built (if you can get around lead paint and lead solder in the plumbing, and the fact that it is on a very busy street - 41st Avenue.)

But the second one looks so...Mediterranean, what with the palm trees, and warm sunlight, and the coral stucco. (still, the realtors take pictures like drunken sailors on leave)

But really, what kind of choice is it at almost 3/4 of a million flipping dollars? Either one of these places will require (at 5% down):

TOTAL Monthly Payment $ 5,495
Household Income Required $ 206,064

If you go up to a 25% down payment, you would only need an income of $160,000...in Rast Vancouver... (I decided to leave that Rast Van. typo in. Somebody must be smoking a lot of weed!)

It really is not even surreal anymore, it's more like a really bad f***ing dream. So many of us expecting to see the dam break, but there is no apparent sign of that.

There are desperate attempts to avoid recession afoot, but will they work? I do not think so. I think that it will just ensnare a few more suckers, and make the fall even harder.

I have made several references to Garth Turner lately, and it has nothing to do with politics. Turner reminds me of a badger, or another member of the Family Mustelidae. He has been writing of economics for many years, and is very concerned about the RE bubble. He is promising to write more on that in the coming days. It is worth reading to see what a Member of Parliament has to say specifically on the topic.

One more thing:

This place that I have been watching for a while now, has been on the market for a solid 7 months. The price has been at $799k for about 4 months. They change the picture every once in a while to keep it fresh.



I believe that price is their break-even point. Trouble is, the carrying costs must be really biting hard. I reckon at least $20k has been paid to those costs already - net of property taxes.

finding comparables

A search confined to Renfrew Heights in East Vancouver between $200k and $900k produces but 40 listings. This has been fairly constant for a while. But there is price compression. You can buy an old place (with few redeeming features) for only $100k less than a brand new place (with a couple of illegal suites), as illustrated below. Who in their right mind would go for that? Granted, the 60 year old place is probably better constructed, but there is really no comparison. The new place is bigger, and has a spectacular view of the NS mountains, and west to downtown. The older place claims a view, but does not elaborate. Somebody dumped $50 k or so into renovations, and is asking a huge premium.$699k

$799k

The new place has been on the market for a solid 6 months, with one price reduction (from $829k, if I remember), and is due for another reduction of at least $250k if they want to sell it. The renovated old-timer needs a reduction of at least $300k. Those reductions will happen.

Finding comparables is a joke.

Addendum:

I forgot to mention that these places, and many others, are sitting empty. I think that there is a huge supply overhang in SFH as well as condo's.

levity and brevity

$399K
$485K

Pardon my absence. I have been around, but a bit under the weather, and l'il solipsist is going through a very cool stage (just starting to walk), so I am greatly distracted.

Further, there just does not seem to be enough meaningful to write about - beyond the same old/sameold, and the expected "minor" catastrophes as the sub prime debacle continues to begin to unfold. BoC seems to be pumping money in almost daily, but it has become ho-hum to the MSM and sheeple in general. The stock markets continue to be manipulated, but are the beneficiaries of such blind faith in my view. Ignorance is more like it.

So perhaps some levity is in (dis)order.

I found these gems by following a link to Sapperton, and all I can really do is laugh. An MLS search of the area delivers 3 listings between the default $200K-$900K. It really just is nuts.

I sent the links to my sister (who lives in Hamilton, Ont.) and she was so shocked that she has not replied yet. It might be fun to send listings like this to China, and Germany, and you get my drift. Emblazon them with THE BEST PLACE ON EARTH, include the video of the Welcome Wagon at YVR. That might cool the market some.

fighting the ennui

There is something oddly compelling about this place. I have scoffed at it's West Coast fusion of French Maison en pays/Admiral-range-hood-above-the-entrances with the art deco hut perched on top, but I really do like the red front door. That's...ballsy. Suddenly, I hear the Internationale, and I get to like this oddball infiltrator out of Proust or the like.

It's been on the market for better than 90 days, and the old timer that was originally there was listed in the neighbourhood of $550K. Giving for a deep discount construction cost of $100/sq', plus all the other costs, I would think that this place is priced at the developer's margin. That is why I have been watching this place. The price has not budged since September 30th, but the next cut will be seriously starting to eat into any possible profits. Is it time to cut and run?

There have been no signs on the lawn for a while now, but it still shows up on MLS. I don't know if the real estate agent has been reading my facile critiques of the photographs, but this is the best one yet. (Just a degree and a half counter-clockwise, and you are there.)

Enough of the snippiness (it's the ennui), here is your Deal of the Week. The only place in all of East Vancouver listed at less than $400K, in fact, this one lists at $329K. Not only is it a deal, it is the most realistic pricing I have seen for a while.



But calling Strathcona Mount Pleasant is a bit of a stretch.

Handyman's Special on charming street in Strathcona. Super location - only steps to McLean Park & Chinatown. Bring your ideas & hammers.

The stats claim a 4300 sq' lot (86 front x 50 deep), but I don't see that. If that is a fact, this place is a deal in this market. Still grossly over-valued in my estimation though. Steps away from McLean Park and Chinatown = steps away from DTES. I suppose hammers are recommended for self protection, as much as for hanging pictures. It's a cutesy pie little house though, and I do like the blue front door.

I'm giving the photographer a break on this one because there is an optical illusion with that metal railing.

wait reduction - still waiting

I've been watching this place since July - not because I want to buy it, but because I think that it is a poster child for irrational, speculative exuberance, and I'm going to watch it go all the way down to $400 G's. I might even consider it at that price, though the banks will probably have tightened up credit to self-employed people by then, and I won't be able to get a mortgage - regardless of credit-worthiness or income.

I featured this place on September 12th, at which time it was listed for $825K. A reader wrote that it was no longer showing up on MLS, and wondered if it had been sold., Well, no, it was not sold, just had a new MLS#, and a price reduction of $26K. The MLS# back then was V648709, now it is V668870. Does that mean that there has been 20,000 new MLS#'s since July? Being that there are not 20K listings in Vancouver, it indicates to me that things are being re-listed to show fewer days on market.

It is also interesting that many "tear-downs" in the same area approach this new construction in asking price. Price compression all over the place...

I won't bother going through the "feature sheet", it is much the same as the original listing, though they did clean up the hastily written features (to make it more readable?). A new picture was added - which is still a bad picture, and they are still claiming that it is "heritage style". Whatever, and good luck with that.

I think that we have reached a stalemate, and Chipman's numbers are well towards a buyers' market. This will be the winter of discontent, I think.

wait reduction

Unique design for spectacular view of DT & N shore. Spacious corner lot, heritag e style. 3 lvl 2080 SQ.FT. open floorplan. Mstr bdrm on third floor with 2 balco ny. 2 bdrm, living room, kitchen on second lvl. Ground lvl possible for 2 one bdrm suites. 2-5-10 New Home Warranty.

MLS®: V648709 Finished Floor Area: 2078.0 sqft.
Property Type: House Lot Frontage: 36.99 ft.
Basement: None Lot Depth: 93.78 ft.
Bedrooms: 5 Age: 00
Bathrooms: (Full:4, Half:0)
Features: View
$825,000.00

I first wrote about this place back in July when it was still under construction. It was for sale then, and still is. Clearly built on spec., and clearly trying to sell to a speculator. What a laugh.

The blurb speaks of Ground lvl possible for 2 one bdrm suites. Well sure, but the second of those would be an illegal suite. I wonder if the buyer would even be aware (or care) of that. The junk fortress that was built new next to me has an illegal suite too, and the next three in a row as well. It's all the rage it seems, flaunt the law to be able to afford something. We just end up with rats' nests.

Although only recently finished, this place has been on the market for a good 90 days. It will be fun to watch it on the way down in a new feature called Wait Reduction - how to shave 10's of 1,000's off of your ridiculous asking price every week.

I suppose that it's a bit more "reasonable" than that little green shack for just 87 G's less that we saw yesterday.