Quote:
Originally Posted by 4444
food for thought...
another property of my parents is being sold, just hit the market for >>$1M in a 'burb of vancouver (no CMHC insurance - and for the record, i'd never pay this much for this property, nor would my parents - more food for thought, about 10 years ago this house was bought for <$1/2M and you couldn't sell it if you tried, now, it'll sell in days in a fog of hysteria - we will return to a time when houses won't sell, but that's a big aside), open house this weekend, loads of people came (i received a comment from a family member of 'a few mainland chinese' which i think is unfair as they may or may not be canadian residents / citizens), will get offers probably today.
For local buyers (who appeared to make up the majority of open house attendees, though appreciating that some will just be nosey neighbours) what is the incentive to be buying these properties at these valuations? I appreciate many who have owned for years will have equity, so the jump up is perhaps not as bad as it seems, though the better time to move up is when supply is high, demand low (that is, you may sell your lower value house for not a great price, but you buy a much more valuable house at a 'not great price'). maybe it is that people that bought >10, 15 years ago have low cost bases and the move up to a new cost base is still reasonable? They rode the wave and won.
looking at the local market, there is literally next to no inventory - why? why are people not listing? are they afraid of moving as they're priced out of the move up? i find this aspect very interesting.
i just find it absolutely amazing how much money my parents will realize from these sales - they baby boomed this one perfectly - our parents will be the beneficiary of this crazy time (is true for a lot of the world), our generations will suffer the consequences.
though i must reiterate my previous points, there is so much more to life than houses and money, part of why my family are liquidating many houses (also, amazing time to do so, in our opinion).
will report, for interest's sake, the end result of the sale - how much over asking / valuation and to whom (assuming i get this info).
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With the way things are going, why list when you can wait another year and hope for another 100k, it's greed to a degree, but also if you're comfortable, why list?
Drove around oak street the other day and it's amazing the amount of property bought up and torn down to build the disgusting wood fram low rises.
However, at the same time there are still soooo many Vancouver specials/mcmansions/fucking dumps in the area that it really got me thinking, a lot of what causes the overvaluation and extreme over payment of property is exactly what you're talking about, the bottle neck of supply.
Besides the foreign money coming in and buying up stock like no tomorrow, I believe that what is also driving up costs are all the people who live in these areas and have some quite some time, who are either: Broke, elderly, inherited the home, or purchased within the last 10 years. People who have grown accustomed to their lifestyle and the area in which they live in. Some older couple in their late 50's/60's and even older are comfortable enough in the area that they would rather be broke or on the border line, than sell out for 1.4 and move to a townhouse in Langley.
One big factor which actually may cause a "correction" in the future, if the numbers the government is providing in terms of the aging population are true is the eventual mass exodus of the people who really do "need" the money to continue living.
Even then though, who knows if the buying power will still be able to outpace the supply, that will always be a possibility.
Sorry for the run on babbling, but driving around south/west van definately stirs up some thoughts in me