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| B.C. Real Estate Crashing Time to Sell !
Posted: 8/7/2008 3:38:39 PM | Have you noticed the "Doom and Gloom" starting to surround B.C. real estate.
I am wondering how big the bubble burst is going to be.
As much as I would like to own I think the prices are
going to keep falling.
Your thoughts | |
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| B.C. Real Estate Crashing Time to Sell !
Posted: 8/7/2008 4:02:15 PM | | Just sold my place last week, exact townhouse in same complex sold for 20K less a few days after I removed subjects. Just glad my deal all came together otherwise was considering removing it from the market till things stabilize. And from all the info gathered from builders I know, as well as relators, things are a buyers market right now and will be for awhile. | |
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| B.C. Real Estate Crashing Time to Sell !
Posted: 8/7/2008 4:28:29 PM | It wouldn't surprise me any that the prices of homes in the lower mainland are either becoming stable or declining. You can seriously only go so high and I think the lower mainland reached their peak awhile ago.
Other areas of the province such as the Okanagan still have some room to move and will probably not feel the exact same effects due to the large amount of retiree's wanting to move into this area from around the country. The forecast here is a stable market for the next year and then will move back to a sellers market for another year then by 2011 it will become a buyers market here. So says at least one real estate firm prediction.
Just heard on the radio news this morning, that within another year there will be more seniors in Kelowna than there will be youth 18 and under. That number will continue to move apart over the next 20-30 years they say, when there will be something like 5 seniors to every one youth. I will be curious to see how K Town will run when no one is wanting or able to work there...lol...I think these stats are fairly similar here in Vernon as well and other smaller communities along the Okanagan trail.
Its hard to meet a man that does not use a walker here in this town 
CC | |
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| B.C. Real Estate Crashing Time to Sell !
Posted: 8/7/2008 4:31:49 PM | i can't take all the the blame..... but i'll take some of it....
i was going to sell my place....so of course the market would crash....
sorry...... just the kind of year its been......
so now i'll list in the spring but it doesn't look very hopeful for then either... | |
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| B.C. Real Estate Crashing Time to Sell !
Posted: 8/7/2008 4:53:02 PM | | I wouldn't say crashing, but it seems the market has peaked. There was an article about it on the front page of the Sun, yesterday. There is almost a house for sale on every block in my hood, but very litte is moving. I think the market is correcting itself - stabilizing. | |
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| B.C. Real Estate Crashing Time to Sell !
Posted: 8/7/2008 5:48:36 PM | My line of work follows the real estate trends and, typically, August is the busiest month of the year for moves and purchases. This has been the slowest month/summer in my 20+ years memory.
We are seeing so many more people sitting on 2 homes - their 'new' one they've already purchased, and a vacant house waiting to be sold. They're stuck with 2 mortgage payments, 2 insurance payments and the stress of having to maintain the property in perfect condition.
We have clients that are desperate to get rid of their original houses and are dropping their asking prices to 'whatever it takes'. I feel sorry for someone who really needs to sell their house - not the flippers, that's the gamble they took. | |
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| B.C. Real Estate Crashing Time to Sell !
Posted: 8/7/2008 6:12:05 PM | Thank God! Sorry, I know that it's bad for sellers and real estate agents, but the BC real estate market has been getting ridiculous! I live in Victoria and we are typically one of the most expensive real estate markets in the country, let alone province. Sometimes I seriously wonder how I'm ever going to be able to afford to buy a place. This market correction is sorely needed, housing prices have been massively inflated and honestly a lot of people just can't afford to buy anymore. Price has outstretched demand. Honestly, it's about time this happened.
Good news for those of us who will be looking to buy a place sometime in the future. | |
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| B.C. Real Estate Crashing Time to Sell !
Posted: 8/7/2008 7:39:57 PM | About time, for those of us yet to own real estate. I had decided I would never be able to get into the market period. Seeing it dropping finally, even a little, is actually kind of a relief.
Here in Salmon Arm at least, developers are pounding through as many condo complexes and manufactured home parks as they can to try to have enough for all the retirees downsizing from their big family homes.
This to me says it's going to drop even more in the next few years with more houses/properties coming vacant, but I'm no expert. Anyone? | |
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| B.C. Real Estate Crashing Time to Sell !
Posted: 8/7/2008 8:52:25 PM | one person's doom and gloom is someone else's sunny opportunity. the real estate market excluded a lot of first time buyers from the possibility of home ownership for quite some time, and now those people previously shut out of the market are seeing new opportunities to transition from renting to owning.
i suspect real estate prices will drop even further after the olympics (as will rents with increased vacancy rates) fueled by less activity in the construction and hospitality sectors which have been booming in the pre-olympic build-up -- people will move where the work is, and while Vancouver is booming now the situation will soften after 2010.
real estate goes in cycles, and sometimes the sellers benefit, sometimes the buyers benefit...realistically the prices couldn't just keep skyrocketing. the market simply couldn't bear it, and few people were able to buy. as a renter the turn in the market gives me hope. | |
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| B.C. Real Estate Crashing Time to Sell !
Posted: 8/7/2008 11:54:49 PM | Mid-range to low-end houses that're priced right are moving still... but apartments are coming down a bit. Really high-end houses are dropping too.
A lot of people are dreaming that the 40 year-old CMHC box they live in is worth 50,000 more than it is, or are even more GREEDY  They are finding out what the real market price is because their places aren't moving. You can see the signs stay up for several months -- then maybe a price-reduced sticker is put on the sign.
Some of these homes were priced as much as 100,000 too high to start... Obviously in any market these would have had to come down quite a bit to get a sale. It's a similar situation to an old goat like me hoping to date someone who looks as cute as tha young Curly Girl  ... Nice dream but I may have wait a long time to make the sale 
What actually IS starting to drop in price is condo apartments and really high-end houses... Normal houses are still stable.
There have been a lot of new apartments and a lot that were built in the last few years were bought with a song and a prayer that they would continue to go up in value. These guys are finding themselves forced to unload for fear of falling market -- and are actually helping to create the market price drop by coming on-stream at the same time as the market slows.
Really high-priced stuff is usually owned by people as an investment (which must earn them a return). These places are more than just a place to live. The price of such homes is coming down -- simply because the expectation of profiting highly on the investment is not there any more. | |
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| B.C. Real Estate Crashing Time to Sell !
Posted: 8/8/2008 12:02:45 AM | thanks for the thread OP... i just came back from my mortgage broker as i'm trying to arrange for financing after looking @ a condo. yup, he said the market is soft and it's a buyers' market.
I've found what i'm looking for and it has a an awesome outdoor pool and massive party deck area to have my own event there if i soo choose. It's spectular and the suite itself is soooo secluded park like atmosphere. | |
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| B.C. Real Estate Crashing Time to Sell !
Posted: 8/8/2008 4:51:25 AM | I wouldn't consider it "crashing" but more of "stabilizing" or at least starting to flat line a bit. The market here is/was scarey and a lot of people got caught up in it, including "first time" buyers who think they need to get into the market,,,,cause,,,,well,,,,the "experts" say so. In reality, there is nothing wrong with renting or any other option other than buying out of your range, including those silly "no down payments/ 30-40 year mortgages than people have been using so they can into the market. They just can't live after they own a place.
Today there are a lot of people who have been "caught up" in their own greed thinking BC's "boom" was to last forever. I know in my line of work there is a little "lull" and one of the reasons is the that some of the developers have clued in that you can only add so many lots/homes to the market at a time.
It's about time is all I can say. The homes being built are not "top of the line" if for no other reason other than there is only so many carpenters or builders out there. If you get to watch some of these places being built and have any type of construction knowledge you know things are not always "right" as a home starts to rise. I think if a first time buyer has a little patience and a good eye, this next 6 months maybe there "time" and they may have some monthly $$$ left over a meal here and there. In saying that, I don't think BC's market,,,,well the lowermainland market anyways is going to drop out of the sky. Too many people still feel the need to come here,,,,and that number will increase after the Olympics and it's visitors.
Just think of what happened here after 86 and Expo. This whole BC economy started a nice upturn after/during that show. A lot of people here don't realize how attractive this place to the "out of towners". I was one,,,,now I consider myself lucky to do what I did when I did. | |
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| B.C. Real Estate Crashing Time to Sell !
Posted: 8/8/2008 8:00:43 AM | RELATED POINT Sama ... interest rates are near an all-time low... Yet everyone who is getting mortgages these days is going for the variable rate mortgage that is half a point lower than the five or ten-year term fixed-rate mortgages. My feeling is "Don't follow the crowd!" on this one. The banks like the variable rate mortgages because if rates go up (perhaps rates may get raised to fight inflation once the middle-east-gulf wars settle down), then the banks simply raise your mortgage payments.
IF I can possibly buy a home again (after what my AZZ-hole ex-wife did to me in divorce)... you can bet I'll be taking the 10-year term... even if I have to pay 3/4 of a point more for it. Then payments will be a known and fixed amount that I can deal with and will not increase until the 10 years is up. | |
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| B.C. Real Estate Crashing Time to Sell !
Posted: 8/8/2008 9:05:09 AM | had moved outta the family home 2 years plus ago and still waiting for the proceeds of the separation agreement. etc, blah, blah, blah....
NEEDING to buy my own place as my sanity is at stake after being a boomerang child and moved in with mommy.. it was great etc but....
i think the major panic right now, is that with the changes with CMHC .. 0% and 40 year amortization rates will be null and void. As my mortgage broker told me yesterday , that only a few lenders r left offering this service.
I think the o% down is just a grab to get pple into the market.
anyways... that's just my 2 cents. | |
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| B.C. Real Estate Crashing Time to Sell !
Posted: 8/8/2008 12:49:50 PM | | I think the market isn't crashing at all. It's just a correction. Especially on the coast where all the baby boomers are moving to from back east. Many of these people are retired professionals and they have allot of disposable $$$. Not like the young folks of today who are struggling to make ends meet. Resource based communities tend to take the biggest hits in realestate market. I just moved up to a resource based community (Prince George) and the market here is heading south (down). The houses prices in Prince George were reasonable in comparison to anywhere else in the province. It may be Northern BC but it's still a pretty place and has allot to offer. | |
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| B.C. Real Estate Crashing Time to Sell !
Posted: 8/8/2008 1:15:47 PM |
In reality, there is nothing wrong with renting or any other option other than buying out of your range, including those silly "no down payments/ 30-40 year mortgages than people have been using so they can into the market. They just can't live after they own a place.
think the major panic right now, is that with the changes with CMHC .. 0% and 40 year amortization rates will be null and void. As my mortgage broker told me yesterday , that only a few lenders r left offering this service.
From the CMHC website:
Government of Canada Moves to Protect, Strengthen Canadian Housing Market
On July 9, the Department of Finance announced adjustments to the rules for government guaranteed mortgages aimed at protecting the strengthening the Canadian housing market. CMHC supports the new parameters and the government’s ongoing efforts to maintain a strong Canadian housing market.
Consistent with the government’s direction, CMHC will no longer be accepting mortgage insurance applications for 40-year amortizations or 100 per cent loan-to-value mortgages on or after October 15, 2008. Those mortgages with a 40-year amortization and the 100 per cent loan-to-value mortgages already insured by CMHC are not affected. CMHC mortgage insurance coverage on these mortgages is good for the entire life of the mortgage.
However, CMHC will continue to offer mortgage loan insurance for amortizations of up to 35 years and up to 95 per cent of the value of the property, and will continue to offer a wide range of innovative products that meet the needs of borrowers.
CMHC will also continue to offer CMHC Flex Down, which offers homebuyers the flexibility of purchasing a home using a wider range of sources for their down payment — including borrowed funds and lender cash-back incentives.
The last paragraph is interesting, since before you could not borrow money for the down payment. Sounds like maybe it's just moving around things. Sounds like you can still finance 100% but CMHC will only offer insurance on 95%. Anyone know? | |
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| B.C. Real Estate Crashing Time to Sell !
Posted: 8/8/2008 1:18:48 PM | I removed mine from the market. I will continue to improve it while I wait for the market to become favorable to sellers again and it will........eventually as these things go in cycles. Im not worried my area is improving and my house is huge with a rented suite (pays the morgage plus) maybe I'll sell 2009? or 2010? we'll see, no worrys here. | |
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| B.C. Real Estate Crashing Time to Sell !
Posted: 8/8/2008 5:36:37 PM | ^^^^ What are ya worried about???? Are you trying to sell???? Do you HAVE to sell???
Todays Globe and Mail Headline sez real estate in western Canada overpriced.
You didn't have to read a newspaper to know that did ya????? | |
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Xavery
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Joined: 4/22/2007
Msg: 20 | |
| B.C. Real Estate Crashing Time to Sell !
Posted: 8/8/2008 9:33:13 PM | It is interesting. People are just figuring this out now. Remember, real estate prices are just becoming stable. The market is not crashing.
Real estate prices are all relative in Canada. I suppose this would be of concern if you were leaving Western Canada. | |
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| B.C. Real Estate Crashing Time to Sell !
Posted: 8/9/2008 12:53:07 AM | As someone who used to be involved in the real estate industry many years ago as an appraiser, here is my view on the local real estate situation.
1) Contrary to what some "experts" say, stabilization does not generally occur at the top of a market. It generally occurs at the bottom of the market and, based on the last two cycles, the bottom end stabilization generally lasts 4-6 years. The overall cycles last around 12 years in my opinion (6 years up and 6 years down roughly - anyone want to check the Elliot Wave Theory on this one and see if my opinion is valid?).
2) All of the "opinions" out there, that I have seen, that suggest a stabilization in prices are by those with a vested interest in real estate (i.e. real estate boards, etc.). In other words, they are very subjective opinions. About the only objective one I've seen recently was the Merrill Lynch one (in the Globe & Mail today) which indicates that real estate values in Vancouver and Victoria are overvalued by 35%. In fact, only a couple of months ago, I recall some "expert" from the local real estate board saying "yes, prices are not going up, but will stabilize". Yet very recently, another "expert" from the board said, "yes, prices prices have declined by a few percent, but will stabilize after that"
3) There appears to be a very definite pattern in "down cycles". In 1982 and 1994 (the last market peaks), market activity slowed down significantly in May (which is the end of the "spring rush"). As the summer breather starts taking place, activity tapers off. However, there are only minor declines in prices until around October or so. At that point, inventories have increased significantly, plus there is a bit of panic as the autumn slowdown starts to take effect. Then the winter doldrums start taking their toll as well. T0 summarize, in down cycles, there are only small, if any price drops in the summer after the down cycles begin. The real hemorrhaging occurs in the fall, winter, and following spring. The majoriy of the reductions occur in this period, although the bottom of the market is not yet tested, although the majority of the decline occurs in this period.
4) Many people suggest "just take your property off the market for now, prices will increase in the 'up-cycle' next year". As I said, the "up-cycles" do not occur next year, but more likely 5-6 years down the road once the tide has turned.
5) It is suggested that the market is just taking a "breather" for now, and will increase again until after the Olympics. The end of the Olympics would certainly have kick started a "down cycle", but the cycle appears to have already started. Real estate values are based on momentum. Once the market turns in a certain direction, it is very difficult to change course again.
6) Some people say "just don't bother selling now", which is true if the property is bought for personal use. However, much of the local real estate was purchased for investment purposes. I remember being at a friends condo on a Friday evening a couple of months ago and we noticed how about 3/4 of the units in the adjacent property had no lights on at around 11:00 pm. In other words, most of those were likely vacant units bought for investment purposes. Once these investors believe that their investment has peaked in value, how long do you think it will be before they try to dump those properties in order to re-invest in some asset that is showing positive returns? It is a supply and demand issue. If these offshore (I assume) investors decide to bail (which is the reasonable thing to do) this will increase supply even further.
7) If you are already invested in the market, the ups and downs don't make much of a difference. If you buy and sell, you are buying at inflated prices, but are also selling at inflated prices. So those already invested will come out ahead, although those who sell now, then buy in at the bottom of the cycle will be even further ahead, but you won't lose out if you are already invested. The danger is for first time buyers.
But hey, what do I know, maybe the market will take off again next year. If I I truly knew, I would be a cajillionaire in no time.  | |
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| B.C. Real Estate Crashing Time to Sell !
Posted: 8/9/2008 8:04:11 AM | I still think that much of BC will benefit from the boomer retirements. I mentioned this to someone who has worked in housing policy and he said that if the economic woes extend across the country, people won't be able to afford to sell their homes and move here. It seems to me that all this means is that some of the people who might have wanted to retire here may not be able to but that won't mean there still won't be a lot of people who'll want to make the move because there are a lot of people who aren't living paycheque to paycheque and who won't get caught up in whatever small downbump is rippling through the economy now.
Many boomers will be coming into inheritances - insurance policies as well as homes - over the next while and that will increase their available cash. So I think overall this drop in housing sales reflects fear rather than being an indicator that sellers have no money. In short, the reason people aren't buying is that they're worried about indicators for the future, not that they can't afford to.
In the end, I think BC has that most prized of real estate values: location, location, location :) We'll see a slight drop in prices for a while but, as we've seen so often with the stock market, smart shoppers will swoop in to grab the bargains and the market will grow again, or at least remain stable. | |
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| B.C. Real Estate Crashing Time to Sell !
Posted: 8/9/2008 10:45:53 AM | I bought an average older house in 1994 at the (then) absolute peak of the previous "high market" for 220,000 (Maple Ridge). A Year and a half later the house had a market price of 185,000.... just sold it due to divorce for 455,000
The 1994 price was a decline of about 15%... and was a pretty harsh downward fluctuation by BC standards. Declines of more than 15% in the lower mainland area and certainly in the Vancouver area are rare. In the sticks however, declines of 50% are not uncommon. During the same recession we saw older homes on acreage on Vancouver Island near Qualicum and Courtenay going for under 150,000 Now these same places are closer to 400,000.
MOST people don't understand the international economy which underlies domestic housing prices and is the driver for recession. Right now, the forest products sector is in dire trouble. Mining, minerals and energy is not however. If you want to see a recession, wait until you see what happens if there is also a contraction in energy and mining of things like coal for export a the same time as forest products people are flat on their asses... and at the same time the high CDN dollar puts pressure on the movie and tourism industry. If that happens... then you will GUARANTEED see a 15-20% drop at least in Vancouver area and up to 50% in outlying areas. The good news is that it might not happen.
FUNNY STORY ...After buying at the peak in 1994, The ex and I were on the outs by 1996 and worked out we couldn't afford to separate... we'd each be left with a share of 30,000 in excess of debt over equity... and nothing else at all Subsequently we sucked it up and got on with life.... and in a short while we were embarked upon the very best 10 years of either of our lives.... We had another kid together... and the kids had the best years of their lives...
Then I paid off the house and naturally she decided to leave me. But that's another fish story... The piranha that fianlly got away... | |
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| B.C. Real Estate Crashing Time to Sell !
Posted: 8/9/2008 1:38:47 PM | With the baby boomers starting to out=populate the young people, coming into this world, the baby boomers are selling out NOW, to try and get as much money as possible to add to their retirement fund, and then downsize to something smaller.
Therefore, with the baby boomers out populating the youth, there is no need for a big, huge fancy home anymore, because, most of these baby boomers are retiring, and moving someplace else, other then the Lower Mainland with their weath and cash, by making more efficient us of their cash and retirement funds.
Besides, who wants to live in the BIG SMOKE of the Lower Mainlnd, if they can afford to live some place else in BC, instead.
So, prices in the Lower Mainland are going to have to come down, and since it is a buyers market, it will be the buyer that decides the prices, and NOT, the real estate seller.
Also, ya notice what else has come down in price, is the price of gas all because, the hybrid vehicles, so ya, I am going to hold onto my gas powered truck, and drive it, instead of a hybrid. | |
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