Vancouver's Real Estate Market

[EvoFire]

Originally Posted by jing

Not true. We made a clean offer slightly under ask on a 3br TH in late 2020 but the winning bid ended up being 5% over ask with subjects.

Maybe the problem is under ask? I'm not sure.

[CRS]

Originally Posted by jing

Not true. We made a clean offer slightly under ask on a 3br TH in late 2020 but the winning bid ended up being 5% over ask with subjects.

How much was the TH?

5% over ask for an $800k is 40k. If you had gone in with $790k that's someone's years worth of salary.

If the subjects were easy things, I don't see why you'd pass that up.

[jcmaz]

Plus if the sellers realtor was smart, they would have called the buyer's realtor to see if there were any wiggle room to up the offer.

[jing]

Going off the top of my head here but IIRC ask was $698k. Comps at the time for the area priced it around $670k and we offered $680k no subjects. Another unit (fully reno'd top to bottom, custom millwork, flooring etc.) had sold the same month for $10k under at $720k. Unit that we made an offer on was basically all original, built in the late 90s, peasant spec updates here and there etc. Winning bid was $730k. I would've taken the $730k as well if I were the seller but the intent of my previous post was to offer a personal anecdote that not all winning bids are subject free. Price has exploded in the complex since, units ranging from high 8s to high 9s depending on updates.

[PeanutButter]

Hindsight and experience is always 20/20.

We have friends who were looking at a great detached in Vancouver. Lot was ~33x130ft, two car garage + car port, house was built in 2000, with a two bedroom basement suite and house was in move in ready shape (it was 2000 dated, but it was clean). The seller offered the house at $1.99M and our friends offered $2.05M (This was around July 2021).

The sellers actually wanted $2.1M and my friends just passed on it. It sat on the market for another month and it finally sold.

It was a solid house and their budget wasn't even stretched, they could go up to $2.2M, but they didn't think it was worth $2.1M.

At the time I told them $50k on a $2M house was nothing, but they were adamant the house wasn't even worth that much.

Fast forward to today where they still haven't found a house and they're kicking themselves because $2.2M in Vancouver right now doesn't have much.

[Hondaracer]

And that place is probably now worth 300k+ what they thought it was worth

[quasi]

Originally Posted by PeanutButter

Hindsight and experience is always 20/20.

We have friends who were looking at a great detached in Vancouver. Lot was ~33x130ft, two car garage + car port, house was built in 2000, with a two bedroom basement suite and house was in move in ready shape (it was 2000 dated, but it was clean). The seller offered the house at $1.99M and our friends offered $2.05M (This was around July 2021).

The sellers actually wanted $2.1M and my friends just passed on it. It sat on the market for another month and it finally sold.

It was a solid house and their budget wasn't even stretched, they could go up to $2.2M, but they didn't think it was worth $2.1M.

At the time I told them $50k on a $2M house was nothing, but they were adamant the house wasn't even worth that much.

Fast forward to today where they still haven't found a house and they're kicking themselves because $2.2M in Vancouver right now doesn't have much.

I almost did same thing December 2019 before Covid kicked off and market was a bit more stagnant, sold our house and wasn't really much we liked available. In early negotiations I walked away from the house I ended up buying over 50K and was just going to rent and jump back into the market later, this house had been on the market for 4 months.

It was only because I couldn't find a decent rental I got pissed off and told my Realtor to get the deal done, I've gained at least 600K on paper in the last two years, imagine how mad I'd be right now if we found a rental?

[supafamous]

Originally Posted by PeanutButter

Hindsight and experience is always 20/20.

We have friends who were looking at a great detached in Vancouver. Lot was ~33x130ft, two car garage + car port, house was built in 2000, with a two bedroom basement suite and house was in move in ready shape (it was 2000 dated, but it was clean). The seller offered the house at $1.99M and our friends offered $2.05M (This was around July 2021).

The sellers actually wanted $2.1M and my friends just passed on it. It sat on the market for another month and it finally sold.

It was a solid house and their budget wasn't even stretched, they could go up to $2.2M, but they didn't think it was worth $2.1M.

At the time I told them $50k on a $2M house was nothing, but they were adamant the house wasn't even worth that much.

Fast forward to today where they still haven't found a house and they're kicking themselves because $2.2M in Vancouver right now doesn't have much.

Been there, done that. Took 9 months to find our first home 6 years ago and it was because we were stubborn about how much we were willing to pay (though we were pretty stretched at the time).

Right now I'm watching my brother in law and his family throw away good opportunities b/c he nickel and diming his way to a house. He's seen his cost go up $200-250k and feels he has to go out to South Surrey now b/c he's being cheap (he can afford $600k more if he wanted to). He keeps going, "It's not worth it" as though that's how things work nowadays.

[Hakkaboy]

Originally Posted by EvoFire

Taxes work in your theory if there's an abundant supply of the target good and you want to discourage people from consuming the good. The problem we have is there ISN'T an abundant supply of it and it has not kept up with demand. If the supply isn't so tight then the runaway market wouldn't have run away in the first place and there would be no suggestion of taxes to control the market.

A blanket tax would just hike the the price across the board as people will keep raising the sell price to cover the loss on taxes. Your basic economics understanding is unfortunately wrong and you are assuming this is an elastic demand on a good that has no supply constraints. All you are doing is pricing people out with the tax as you raise the price floor. Time and time again it's shown that the "consumer" thus the buyer in this case, will be the one that bears the brunt of the tax.

There are other variables in play here such as some of the very stringent building codes that have been put into place in the last decade, plus the cost of labour and raw materials.

A targeted tax like the empty home's tax, and foreign buyers tax are theoretically much better initiatives to try and reign in the market as they target portions of the consumers instead of everyone. Yes there will be unintended casualties but most policies will. I'm not against a higher capital gains tax on 2nd and 3rd properties as it would again be a targeted tax that would not hurt regulars.

Minimum wage in a way is tax, as the gov't mandates the business to pay a certain amount for services instead of a market rate. Though, there aren't that many jobs that are REALLY minimum wage, and everytime they hike up the min wage everyone takes a hit.

Let's just agree to disagree because I think that the supply constraint is over-blowned, and that the massive capital appreciation seen previously is driving the demand and FOMO behaviour, which then the current perceived supply cannot meet. Obviously covid has made listings more scarce than before, but let's just talk about just slightly before the listings crunch and into the post-covid world.

Here's a scenario:

If a crappy shack in east van listed for $1.7M, would you buy it? Your answer will probably be yes or maybe if you can actually afford it. Now, let's think about the reason why you would buy it. Is it because you think that if you do not act now, that this same shack will cost you $2M instead? Or do you really think that normal people should be paying $6,000 mortgages for a house that needs a lot of work?

Now, if you know that at most, this same shack will probably still cost $1.75M to $1.8M in 5 years time, will you that change your answer?

I'm willing to bet that answer is yes, unless you are really rich and just looking for a teardown to build your dream house. But let's just ignore those for now and focus on regular joes who will be paying those $6K payments...for a shack.

I mentioned this before, I truly believe that the reason why people are willing to spend these absurd amount of money, or even willing to "slum" it out now by buying a detached now and renting our 3/4 of their place in order to meet the mortgage payments are only doing so because the capital appreciation factor aka FOMO. Take that away, and there will not be as many people trying to rush out and get what they can while they still can type of mentality.

Again, your understanding of economics is sound, but let's just disagree on the fundamentals that I believe this is an artificial demand issue rather than purely a supply issue.

Now, if I really want to make prices go down fast, I would make it a law to cap the maximum total mortgage amount to be at 5 x income. This would suck for current homeowners who bought in the last 5 years, but at least more people will have better disposable income and can spend elsewhere in the economy lol

[Hehe]

Originally Posted by PeanutButter

Hindsight and experience is always 20/20.

We have friends who were looking at a great detached in Vancouver. Lot was ~33x130ft, two car garage + car port, house was built in 2000, with a two bedroom basement suite and house was in move in ready shape (it was 2000 dated, but it was clean). The seller offered the house at $1.99M and our friends offered $2.05M (This was around July 2021).

The sellers actually wanted $2.1M and my friends just passed on it. It sat on the market for another month and it finally sold.

It was a solid house and their budget wasn't even stretched, they could go up to $2.2M, but they didn't think it was worth $2.1M.

At the time I told them $50k on a $2M house was nothing, but they were adamant the house wasn't even worth that much.

Fast forward to today where they still haven't found a house and they're kicking themselves because $2.2M in Vancouver right now doesn't have much.

Yeah... similar things happened to my friend when they were getting their place in 2019. That actually taught me a lesson, because they never found another house they liked better.

When I was getting my place, we were back and forth on offers on the phone between seller (their agents) and mine. Came down to a number that meant I had to add another 2% and they weren't moving after 3 attempts (where we entertained things like inspections, they taking care of tenants and some immediate repairs... but not on price). At that point, my agent kinda thought the deal collapsed because my last offer, I told her that's as much as I'd go. And that's from the logical side of me.

I could afford to go higher. It's just the math of nearby prices telling me I shouldn't go higher, even though knowing that the 2% is for the seller to cover all the agents' fees so they kinda breakeven from their purchase price a few years back. I was like... fuck... would I really be that worse off for a mere 2%?

At the end, the emotional side of me spoke... "happy wife, happy life" (up to that point houses were either I liked it, for land value, or she liked it, for the house) and I didn't want to push my wife on further house hunting that we might never find anything we liked more as our friend's case. So I told my agents, that if I agree to the 2% bump, the deal signs today. No if or buts or sleeping on it... it ends tonight (it was almost 11PM, we made the offer valid to 11:59PM). 5min later, they signed back on the accepted offer.

That was back in Dec 2020, before the whole "market heating up again" hitting headlines after headlines. I was glad to be able to finalize that deal because after that, listings in the areas we were looking just got more and more expensive/sold over asking, while we were actually able to haggle a bit from asking. Even for the price we paid (including that 2%), we wouldn't get anything similar after that month. And that 2%, in the grand scheme of things, was adding a few bucks to monthly... probably less than what my kids spend on their monthly fast-food day. So, I'd have hated my logical me if I didn't just buy it based on guts.

It's not because the house's assessment shoot up 30% to make me feel better on paper, but rather... a house that both I and my wife are happy with. Even when we find problems here and there, we'd just discuss about how to fix it instead of "should have gotten that other house". And that alone is worth a million dollars IMO.

So, if you really found "THE" house... don't try to be overly logical.

[whitev70r]

^ Sounds like it's seller's market and they can hold their ground.

[Special K]

I will share my story now that we have settled. 2021 was an insanely stressful year. We are glad it’s over.

We decided to sell first, then buy because it was a safer route but very costly. Buy first, then sell might get us into deep trouble so we didn’t take that risk.

We started to prep for the sale of our house in Vancouver in March 2021. Cleaning and looking at what we could be interested in for about 2-3 months. We listed our house for sale in July. Sold to the first viewer on a Thursday, subject free, 2% below asking (which was what my wife and I agreed that we would be okay with that price) or $450k over assessed. They didn’t want us to get into weekend showings. Could have squeezed more waiting but we just wanted to move on with the buying phase.

Buying was VERY VERY VERY difficult. It took us 30 houses, 4th offer later, to finally get our new house. Over budget and second/third choice highschool on our list. We were looking at 2500-2800 sqft but ended up with 4000 sqft. There’s just nothing out there and it looked worse every week approaching November. But I know every weekend I wait, our money is going to worth less. We need to park our money somewhere.

We were lucky to have an honest and helpful realtor. He could have taken the easy route to just tell us to buy anything. And friends helped with the very quick transaction. Our winning bid was $550k over assessed, subject free, and 2 weeks closing. There were higher price bids.

I estimated that we lost $200k in equity by the 3-4 month gap, realtor fees, and desparate bidding.

At least it’s over now.

[Special K]

Originally Posted by Hehe

It's not because the house's assessment shoot up 30% to make me feel better on paper, but rather... a house that both I and my wife are happy with. Even when we find problems here and there, we'd just discuss about how to fix it instead of "should have gotten that other house". And that alone is worth a million dollars IMO.

So, if you really found "THE" house... don't try to be overly logical.

1000%. I can’t agree more. Seeing my family happy is worth more than anything in the world.

[bcedhk]

How often should a 'good' realtor do open houses? My sister has a condo in Brentwood that has been on the market for almost 2 months now and her realtor only did one weekend of open house..

[supafamous]

Originally Posted by Hakkaboy

Let's just agree to disagree because I think that the supply constraint is over-blowned, and that the massive capital appreciation seen previously is driving the demand and FOMO behaviour, which then the current perceived supply cannot meet. Obviously covid has made listings more scarce than before, but let's just talk about just slightly before the listings crunch and into the post-covid world.

Here's a scenario:

If a crappy shack in east van listed for $1.7M, would you buy it? Your answer will probably be yes or maybe if you can actually afford it. Now, let's think about the reason why you would buy it. Is it because you think that if you do not act now, that this same shack will cost you $2M instead? Or do you really think that normal people should be paying $6,000 mortgages for a house that needs a lot of work?

Now, if you know that at most, this same shack will probably still cost $1.75M to $1.8M in 5 years time, will you that change your answer?

I'm willing to bet that answer is yes, unless you are really rich and just looking for a teardown to build your dream house. But let's just ignore those for now and focus on regular joes who will be paying those $6K payments...for a shack.

I mentioned this before, I truly believe that the reason why people are willing to spend these absurd amount of money, or even willing to "slum" it out now by buying a detached now and renting our 3/4 of their place in order to meet the mortgage payments are only doing so because the capital appreciation factor aka FOMO. Take that away, and there will not be as many people trying to rush out and get what they can while they still can type of mentality.

Again, your understanding of economics is sound, but let's just disagree on the fundamentals that I believe this is an artificial demand issue rather than purely a supply issue.

Now, if I really want to make prices go down fast, I would make it a law to cap the maximum total mortgage amount to be at 5 x income. This would suck for current homeowners who bought in the last 5 years, but at least more people will have better disposable income and can spend elsewhere in the economy lol

This is such a looney tunes take on the current state of the real estate market I don't where to start beside suggesting you read all the material I've posted - research, news, statistics - that show you're wildly misinformed about the current state of the market.

While there is some supply side "over enthusiasm" with more foreign money and more people leveraging their newfound equity the root problem is supply by many multiples. Any other conclusion ranks next to denying climate change and the science of vaccination.

Vancouver is not the only North American market seeing crazy housing prices but what it does hold in common with markets that are seeing crazy housing prices are that they also has the same supply issues - they have the same crazy residents who do whatever they can to keep housing from being built and they have the same pathetic politicians who can't make bold decisions.

[RiceIntegraRS]

Originally Posted by bcedhk

How often should a 'good' realtor do open houses? My sister has a condo in Brentwood that has been on the market for almost 2 months now and her realtor only did one weekend of open house..

1 open house in 2 months..... U would think they would have at the minimum 4 open houses a month Sat&Sun every 2nd week till its sold.

[whitev70r]

^ I would imagine it depends how big of a team your realtor has working with her/him. How many properties the realtor has listed and finally, how much is the property listed for.

If realtor has 6-8 properties listed and your sister's condo is the least in terms of amount say $700K ... she/he would devote more of their time and energy trying to sell the $2-3M ones and probably have the weekend open houses there.

[Hehe]

Originally Posted by whitev70r

^ Sounds like it's seller's market and they can hold their ground.

I'm an Asian by ethnicity and commercial real estate by trade. Buying RE without being a deal? My first offer was 15% below asking and about 10% below 2020 assessment. The market was basically being sold at assessment or slightly lower even though the trend was definitely moving upward as fewer deals were below assessment. So my expectation... at least for a decent deal was to buy at below assessment.

At first, they were quite shocked how low I went. But I told my realtor, which she knew, that this was at the very top of my budget if not already over. The original budget was to be able to pay it comfortably, and even at my lowball offer, the house was at the "affordable, but slightly uncomfortable" territory. But I made my case that we were serious about buying if we can work out the price I could afford. It was actually a house that we went to see because everything check from the listing except it was way over budget.

After going back and forth... I set my price at 5% under assessment. But they kept on insisting on this number that's neither rounded nor any particular sense. So I looked it up and it turned out that number was basically the price the owner paid a few years back plus the fees they needed to pay the realtors this time. So what he ended up losing was just the PTT. At least that's what I think, as the figure was within 5dollars of the price they were insisting on.

That 2% extra would push the deal less than the 5% off assessment, which the logical/CRE investor me wasn't happy with as this was dead money and I wouldn't see it again until the day I sell. But at the same time, we loved the place and I was seeing more and more listings being sold at or above assessment on a daily basis across YVR.

That's why I came up with the condition that the price had to be accepted that night with all paperwork done. The only way to back it out was that I didn't like what I saw from the inspection. (which was the only subject)

I did believe mine and their realtor worked very hard to convince the seller to accept it, because it wasn't subject free and I had over a month to remove my subject as I used the holiday season as an excuse as we might go away.

Came the day I was removing my subject, there was pretty much no deal being done at below assessment and some properties were grabbing headlines for having a bidding war. This was Feb 2021.

[68style]

Does anyone actually go looking for open houses anymore? If I wanted to buy something I just call the agent and arrange a time not wait for some weekend function or a sign on a lawn.

[Special K]

Originally Posted by Hehe

I'm an Asian by ethnicity and commercial real estate by trade. Buying RE without being a deal?.

The difference is… it’s a personal purchase vs. business transaction. If that’s the best house out there, I don’t mind paying a bit more.

The seller must be punching himself right now. Imagine those who sold Q1 2021 and getting priced out by Q3 2021. Cray.

[6thGear.]

Originally Posted by bcedhk

How often should a 'good' realtor do open houses? My sister has a condo in Brentwood that has been on the market for almost 2 months now and her realtor only did one weekend of open house..

4/5 times a property doesn't sell especially in this market is the price ( how flexible is your sister?). However condos aren't the hot ticket item this time around so it's expected to sit on market a bit longer but 2 months is way too long. Has there been any private showings at least?

[supafamous]

Originally Posted by 68style

Does anyone actually go looking for open houses anymore? If I wanted to buy something I just call the agent and arrange a time not wait for some weekend function or a sign on a lawn.

Open houses are back in style now (at least pre-Omicron) but it's usually scheduled meaning you get a 10 min slot or so. It's still crazy though - biggest purchase of your life and you get barely more time to consider it than than when you're trying to pick where to eat for dinner.

[bcedhk]

Originally Posted by 6thGear.

4/5 times a property doesn't sell especially in this market is the price ( how flexible is your sister?). However condos aren't the hot ticket item this time around so it's expected to sit on market a bit longer but 2 months is way too long. Has there been any private showings at least?

I think there were about 5-7 private showings? The price was suggested by the realtor and it is already lower than the comparable the ones that sold within the past 12 months.

[whitev70r]

^ that's what I'm kinda thinking ... with all the condo owners trying to move up with growing families, there has to be a huge choice and selection of 5-8 yo condos available. With a bit of a fresh up, are these condos where the 'values' are? But then, often by that time, maintenance is up to like $400/mth on a 2 bedroom.

If not the above ... where are the value condo properties at? 15-20 yo buildings? Buy and then remodel, knock down a wall, refresh. Condo tower with no pool, very few ammenities, etc.

[GIZZ]

Originally Posted by bcedhk

How often should a 'good' realtor do open houses? My sister has a condo in Brentwood that has been on the market for almost 2 months now and her realtor only did one weekend of open house..

There could be something going on there. Maybe they have lots of listings and hers pays the least commision? For sure some realtors steer buyers to the properties that pay them the most.

I had my Burnaby house listed for maybe 6 months with one of the most successful realtors in town. One open house the first week. But they weren't trying to sell it. I dropped that realtor and relisted with another. The sign on the lawn went up on Sunday morning. We had 3 offers from the sign by 5pm and accepted one that night. The listing wasn't on MLS yet!

I later heard from one agent to another then to me the initial realtor had offers that were never presented to me. I think they were trying to wear me down and buy for themself, just another rental/investment property to add to their collection. Shady.