Vancouver's Real Estate Market

[Harvey Specter]

...

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.

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.

“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.”

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.

“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.

“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.

“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.”

[Hondaracer]

While that house I posted a few pages back may he in a less desirable neighborhood. It was wayyyyy nicer at 3.2 than that house at 4 for EV

[Gumby]

Originally Posted by Hondaracer

While that house I posted a few pages back may he in a less desirable neighborhood. It was wayyyyy nicer at 3.2 than that house at 4 for EV

The house yes, but it's all about location!

[Harvey Specter]

The realtor makes a good point about Dunbar. I know two families who live in Dunbar that want to sell. The area is dead, a lot of store closures in the Dunbar village area. I believe Safeway closed down and a whole bunch other businesses have shuttered because land is been sold for condos.

The Main St area is booming, it's been booming for the past 5 years with a lot of new restaurants and bars opening up.

[bcedhk]

Originally Posted by Harvey Specter

The realtor makes a good point about Dunbar. I know two families who live in Dunbar that want to sell. The area is dead, a lot of store closures in the Dunbar village area. I believe Safeway closed down and a whole bunch other businesses have shuttered because land is been sold for condos.

The Main St area is booming, it's been booming for the past 5 years with a lot of new restaurants and bars opening up.

But I thought the idea of buying into these areas will be for the quiet neighbourhood. those who bought into Dunbar thinking it will be vibrant mostly didn't do their homework or were lied to by their realtors.

I mean, Dunbar St has pretty everything you need for day-to-day. Im sure 90% of the residents own a car or two so they can commute to any nice restaurants or hotspot around Vancouver within a 15-20 minute drive.

I think of Dunbar as the Steveston of Vancouver. It's not for everyone, but most people I know who live there have been there for 30+ years.

[Bonka]

Dunbar won't attract young blood with a social lifestyle. Who wants to be in an area where it's completely quiet after 7pm? A quiet neighbourhood is great unless you're the noisiest home on the block. All the trendy shops are opening there and it's only going to be more desirable moving forward - spilling east over onto Fraser, Kingsway corridor even Victoria Drive. Walk or drive through this neighbourhood there's absolutely a "vibe" that these millennials want that you don't find in established, yet sleepy neighbourhoods like Fraserview or Killarney. There's a certain "look" to the neighbourhood as well as to the people living there. Main St. is like the westside of Commercial Dr. apparently folks like some grittiness.

Evidently, Main St. crowd really do like to walk though - good way to burn off their daily $$$ lattes.

[Hondaracer]

Dunbar is so fucking far away from anything as well. Your life is basically there

I recently sold a range to a guy who lived by Dunbar and 26th or somthing. Ended up that I forgot a part so I drove it to him at 7pm on a Sunday. From Hastings and Nanaimo to his place was like 35 minutes in zero traffic..

If you live west of main, going out of town on HWY 1 on a Friday evening etc. Can easily add an hour to your trip just getting to the highway

[carsncars]

Originally Posted by Hondaracer

Dunbar is so fucking far away from anything as well. Your life is basically there

Yeah, when I was staying in the area when I was at UBC, it was a royal pain to go anywhere that wasn't Dunbar/UBC. The East-West slog through Vancouver along 4th/Broadway/12th/King Ed/41st/etc. is awful.

[carsncars]

Originally Posted by Bonka

Dunbar won't attract young blood with a social lifestyle. Who wants to be in an area where it's completely quiet after 7pm? A quiet neighbourhood is great unless you're the noisiest home on the block. All the trendy shops are opening there and it's only going to be more desirable moving forward - spilling east over onto Fraser, Kingsway corridor even Victoria Drive. Walk or drive through this neighbourhood there's absolutely a "vibe" that these millennials want that you don't find in established, yet sleepy neighbourhoods like Fraserview or Killarney. There's a certain "look" to the neighbourhood as well as to the people living there. Main St. is like the westside of Commercial Dr. apparently folks like some grittiness.

Evidently, Main St. crowd really do like to walk though - good way to burn off their daily $$$ lattes.

This 100% - I know a couple that recently bought a ~$3M home in the Riley Park area. Both family doctors, 30's. They could afford to live in Kerrisdale, etc. but love the Main St. area for the vibe, coffee shops, pubs, and so on. One of them is still locuming (basically a TOC for other doctors) so being a bit more central vs. the westside is a big advantage as well. Part of it is that these are the areas that they have lived in over the past few years as well, and prefer to stay and not uproot their kids, etc.

I can't afford a house near Main, but given the ability to buy a home to live in around Main vs. Dunbar/Kerrisdale I'd pick the former hands down.

[Traum]

I guess I must be an old fart then. Given the choice between Main vs Dunbar, I'd gladly take Dunbar now LOL~

(But I can see why others would want Main...)

[donk.]

Originally Posted by Traum

I guess I must be an old fart then. Given the choice between Main vs Dunbar, I'd gladly take Dunbar now LOL~

(But I can see why others would want Main...)

Cant imagine living on commercial st..... The soon to be main street

[Special K]

Most of these Main St. / Fraserhood kids will go to Tupper. Unless you can push through the $2.5M price point to west of Main St to go to Eric Hamber.

Also, what’s the appeal of that $4M house... handling 3 sets of tenants and you get no garage. The catchment is Tupper too I think.

[Tapioca]

Our colleagues who recently sold their house in the Tupper catchment area send their kids to private school on the west side.

The families buying these houses are not necessarily whom you think. People throwing down $3-4 million for Main Street are probably not even concerned about the rental income numbers to make it work.

[supafamous]

Originally Posted by Tapioca

The families buying these houses are not necessarily whom you think. People throwing down $3-4 million for Main Street are probably not even concerned about the rental income numbers to make it work.

Yeah, the article says the winning bidder is coming back from the states which likely means some form of tech person who made it big on stock options or a doctor (I'd say tech).

In any case it's almost impossible to buy a new build that isn't full of suites on the East side so just because it has suites doesn't mean they're renting it out. If you want a new build in East Van it's going to have a minimum of 1 suite and usually 2. Some don't even have stairs to the basement so that you can take the space back. The zoning is designed to basically make you design a house to have suites that are for renting rather than for multi-generational purposes. Eg. You can't put in 2 kitchens unless you have a legal suite and if you're multi-generational there's no benefit to legalising the suite.

Even West side houses have suites now as the default - I took a random look on REW.ca for houses that are less than 5 years and 6 out of the 7 random ones I looked (between 0-$5m in price) had a legal suite. Laneways are less common though - rich people gotta have their garages.

[carsncars]

Originally Posted by supafamous

Yeah, the article says the winning bidder is coming back from the states which likely means some form of tech person who made it big on stock options or a doctor (I'd say tech).

In any case it's almost impossible to buy a new build that isn't full of suites on the East side so just because it has suites doesn't mean they're renting it out. If you want a new build in East Van it's going to have a minimum of 1 suite and usually 2. Some don't even have stairs to the basement so that you can take the space back. The zoning is designed to basically make you design a house to have suites that are for renting rather than for multi-generational purposes. Eg. You can't put in 2 kitchens unless you have a legal suite and if you're multi-generational there's no benefit to legalising the suite.

Even West side houses have suites now as the default - I took a random look on REW.ca for houses that are less than 5 years and 6 out of the 7 random ones I looked (between 0-$5m in price) had a legal suite. Laneways are less common though - rich people gotta have their garages.

There are other (related) reasons why suites are becoming popular, not just for rental income. My parents' friends are building a laneway home for their daughter to live in (with the ultimate plan to trade spaces with her when she has kids). Similarly, one of my coworkers is in the market to move up from a condo to a detached, and wants a nicely finished ground-level suite for her parents as they're selling their townhome to enable her move.

[bcrdukes]

You might hit a pay wall or have limited access to the amount or articles, but a good read on The Atlantic which speaks to many themes in this thread alone i.e. Being blocked out of affordable housing, education, location, marriage, kids, wealth accumulation etc.

Why Millennials Can’t Grow Up

[GLOW]

Originally Posted by carsncars

There are other (related) reasons why suites are becoming popular, not just for rental income. My parents' friends are building a laneway home for their daughter to live in (with the ultimate plan to trade spaces with her when she has kids). Similarly, one of my coworkers is in the market to move up from a condo to a detached, and wants a nicely finished ground-level suite for her parents as they're selling their townhome to enable her move.

i know people like this too, aging in place and still being nearby to family to help look after grandkids, or adult kids looking after aging parents, etc...

[twitchyzero]

that article hits the nail in the head...location trumps all when you consider density-to-infrastructure

traffic is just getting more and more clusterfuck

what was once a 10 min hop in the car is now 25, historically 30 min commutes is now pushing 1 hour

by the time new mass transit is running it's already at capacity, ebikes need to fall drastically in price

[underscore]

A few weeks ago, I met my first Millennial grandparent. I was interviewing a woman in her late 30s

[Hondaracer]

If you're a millenniel grandparent just be happy you're not homeless lol

[quasi]

The house across the street from me in Cloverdale that is 33 years old and never had an update sold right away for almost 200K over ask. Listed at $1,249,000 sold for $1,440,000.

Assessed value via BC property tax site which I know is way outta date with the latest surge, $1,002,000.

It's Cloverdale...........

[bcrdukes]

Originally Posted by underscore

I had the same reaction initially but remembered we had a few girls who dropped out early in grade 9/10 who got knocked up and confirmed their kids have popped kids out, essentially making them grandmothers.

[PeanutButter]

Having tenants is definitely not ideal. I'm always conscious of how much noise we make because we live in an older house and you can easily hear footsteps and what not going on.

I can't wait until I don't need tenants.. That'll be in 25 years though.. haha and by that time, who know's, how can I give up $2k in rent then?

I guess the goal is to be able to afford another property, but likely not.

[underscore]

Originally Posted by bcrdukes

I had the same reaction initially but remembered we had a few girls who dropped out early in grade 9/10 who got knocked up and confirmed their kids have popped kids out, essentially making them grandmothers.

Imagine at 64, when some people are becoming a grandparent for the first time, and some are becoming great-great-grandparents.

It's a bit weird for the article to start off with that though, as if being in your 30's with grandkids is typical for millenials. No shit if you were a teen parent you're gonna be struggling to own a home.

[greenlantern]

hi folks, just wondering whats the risk of purchasing a pre sale w out a realtor.

Developer willing to "give back" in decorating cost.


-worth mentioning: its almost sold out, only a few units left.
-we already know which one we want

thanks