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Vancouver Off-Topic / Current EventsThe off-topic forum for Vancouver, funnies, non-auto centered discussions, WORK SAFE. While the rules are more relaxed here, there are still rules. Please refer to sticky thread in this forum.
I wrote 2 sentences to you and you accused me of spazing, and now you continue to complain I don't understand. If you understood my respond you'd get it, yet you don't.
Then none of the "stupid" comments apply to you. I don't understand why you're offended, since you didn't buy at that price the label doesn't fit and no-one painted you with that brush. We labeled and painted the stupid people.
We all make stupid decisions with money. I have wasted tons of money modding my car yet I enjoyed doing so. I will not pretend it was a smart decision, and if its not a smart decision... it is a <filll in the blank> decision.
Pricing is a "market" thing, not "relative". Just cause a bunch of stupid people just overpaid for "relative" quality doesn't mean the "market" has adjusted. As we near the end of Feb sales are below average and active listings soaring, so the market is saying it is overbought and flattening - yet stupid people line up to pay above market prices.
The condo I referenced in Kits in below market average for Kits, despite still being an insane amount.
It is ignorant and stupid to ignore the market.
Now I get it, you don't understand what we mean by "stupid", I'll clarify since you're having trouble with it:
It is stupid to pay more than market value in today's market.
Since we both agree most of the buyers are speculators, then we can both agree they are stupid.
You are correct, you cannot get a "new" condo, yet you can get a 26th floor condo above TnT downtown with an excellent view of false creek for less than Sovereign just sold for - with cash left over to renovate and you can move in today.
Yes to each their own - as long as it does not affect me the tax payer. Read some articles about the housing overhang impact in Spain and see how many wrapping up significant amount of wealth in housing has killed that economy.
So the problem is, its never "to each their own" as if enough people make these stupid decisions it affects me.
The market prices have been inflated for a long time...at some point you just got to realize maybe this is the cost of housing here in Vancouver? Being named the best place in the world to live in comes at a cost.
Buying a home is still somewhat affordable for well-to-do yuppies. A couple of friends of mine bought a home in East Van a couple of years ago in the 550K range and I'm certain that they make probably 150K or more per year as a couple. If their mortgage payment is in the 2500 range + plus a basement suite bringing in 700-1000/month, it's not hard for them to make ends meet.
Also, another thing you've failed to consider is wealth transfer and home equity lines of credit.
Sure, there are a lot of couples who make 60K/year, but there are just as many who make 150-200K/year under 40. (You seem pretty successful yourself and I wouldn't be surprised if you're close to 6-figures.) Until one who works on the financial side (a mortgage lender or someone like that) chimes in and tells us how much cash is actually being thrown around, we can only speculate on what's driving the market.
Also, another thing you've failed to consider is wealth transfer and home equity lines of credit.
This only works if your house appreciates. Houses only appreciate if there are buyers. Stick with me.
Quote:
Originally Posted by Tapioca
Sure, there are a lot of couples who make 60K/year, but there are just as many who make 150-200K/year under 40. (You seem pretty successful yourself and I wouldn't be surprised if you're close to 6-figures.)
The top 5% of earners starts a $89K/yr. Double that and you're in the middle of the $150-200K range you quotes as being "just as many".
Lets dive even further:
~1.2M people earn > $89K
13% of those live in BC, or ~150K
If all of those 150K lived in Vancouver, that would represent 7% of all Vancouverites
7% at best is not "just as many". Wow, have we ever lost sight of reality.
Quote:
Originally Posted by Tapioca
Until one who works on the financial side (a mortgage lender or someone like that) chimes in and tells us how much cash is actually being thrown around, we can only speculate on what's driving the market.
My broker chimed in on this last year. He sold a $300K mortgage to 2 Loblaws (aka Superstore) employees making $25K/yr each.
Now, remember when I said stay with me? if those Loblaws employees cannot buy, then no wealth is transferred. Houses don't appreciate when there's no buyers to drive up prices.
Very little actual cash is being thrown around, just people buying and driving up prices.
The top 5% of earners start at $89K/yr. Double that and you're in the middle of the $150-200K range you quotes as being "just as many".
Lets dive even further:
~1.2M people earn > $89K
13% of those live in BC, or ~150K
If all of those 150K lived in Vancouver, that would represent 7% of all Vancouverites
7% at best is not "just as many". Wow, have we ever lost sight of reality.
I'll admit that I don't really look at statistics the same way you do. But, I think that people under 40 are doing better than what the statistics indicate. I attended my ten year high school reunion last summer and naturally, we discussed how we're doing professionally. I would say over half of the people are in what I would call "professions". These would include:
- Mechanics
- Medical practioners
- Planners and consultants
- Oil and gas workers
- Education/teaching
- Finance-related
At minimum, I don't think it's a stretch to say that half of the people are making salaries in the 50-60K range. With maybe 5-8 more years under their belt, it's not a stretch to say that they'll be in the high 70-80s. I went to public school in East Vancouver which in the 1980s was largely blue-collar and immigrant-based. So, you take a little bit of home equity, savings from living at home, and you can maybe see how the numbers work.
This only works if your house appreciates. Houses only appreciate if there are buyers. Stick with me.
The top 5% of earners starts a $89K/yr. Double that and you're in the middle of the $150-200K range you quotes as being "just as many".
Lets dive even further:
~1.2M people earn > $89K
13% of those live in BC, or ~150K
If all of those 150K lived in Vancouver, that would represent 7% of all Vancouverites
7% at best is not "just as many". Wow, have we ever lost sight of reality.
My broker chimed in on this last year. He sold a $300K mortgage to 2 Loblaws (aka Superstore) employees making $25K/yr each.
Now, remember when I said stay with me? if those Loblaws employees cannot buy, then no wealth is transferred. Houses don't appreciate when there's no buyers to drive up prices.
Very little actual cash is being thrown around, just people buying and driving up prices.
Just curious where are you pulling these numbers from?
I'll admit that I don't really look at statistics the same way you do. But, I think that people under 40 are doing better than what the statistics indicate. I attended my ten year high school reunion last summer and naturally, we discussed how we're doing professionally. I would say over half of the people are in what I would call "professions". These would include:
- Mechanics
- Medical practioners
- Planners and consultants
- Oil and gas workers
- Education/teaching
- Finance-related
At minimum, I don't think it's a stretch to say that half of the people are making salaries in the 50-60K range. With maybe 5-8 more years under their belt, it's not a stretch to say that they'll be in the high 70-80s. I went to public school in East Vancouver which in the 1980s was largely blue-collar and immigrant-based. So, you take a little bit of home equity, savings from living at home, and you can maybe see how the numbers work.
I like numbers, its the engineering side of me. I also like sociology/psychology to explain what the numbers cannot.
What you described I'll call "locker room theory", let me explain: I hate it when I go to my locker at the gym and someone is using the locker right beside me. It seems like it happens far too often. In truth, it rarely happens. I only remember when it does happen - thus why it seems like it is so often.
Apply the same to your circle of friends. Scan the list of jobs you quoted, most are interesting jobs that would be memorable. Are you going to remember those with the interesting jobs you listed? or those who manage grocery stores, pickup garbage, ...?
I actually think people under 40 are doing far worse than the numbers show. Seniors have the highest average salary, and have made the highest salary gains of any age bracket in the last couple decades. If you average out seniors, then everyone else is actually doing worse than decades ago.
Yet before we get too far off topic, revisit my Loblaws employee example. $50K total income buys $300K mortgage. Thus $80K income buys $500K. The average in Vancouver family income is just shy of $70K, thus the average family can afford a ~$450K mortgage.
This is why house prices are crazy. When the average family can spend half a million dollars under the current rules, then prices go up. If they couldn't afford it, then wealth cannot be transferred as existing owners cannot sell to move up.
Its really that simple, just on a grander scale in Vancouver cause it is s desirable place to live, and real estate dominates conversations here.
Another interesting number is the average Canadian down payment is at 7% lol I guess people like giving their money to the banks. (In the form of interest)
I do make well over 6 figures and have no interest in buying real estate in Vancouver, also depending on the list you read, Van has been long since knocked off the list of best places to live in Canada and the world, mainly due to the cost of living.
Having said that, you could probably replace the tap water here with cat piss and I still wouldnt want to leave.
At the end of the day, is the value of real estate here far beyond what the average income earner can afford? Accoding to stats can and conventional financial wisdom the answer is yes. Is it possible we are heading into a new age where being house poor is the new norm? I suppose it's possible, but just as the herd runs one way, the run the other just as fast so IMO it's impossible to predict what will happen. You should never under estimate peoples stupidity, and to be honest, once I can immigrate to the states I will probably reside south of the border.
__________________
Quote:
Originally Posted by jasonturbo
Follow me on Instagram @jasonturtle if you want to feel better about your life
I just want to comment that although people are limited by their salary (Say avg family income of 70k), people are still making it happen. Families with multiple generations in one home, renting out suites, renting rooms, international students, help from parents etc.
I own two condos in Victoria (one residence and one investment). I rent a room in my 2bdr condo.
I'll admit that I don't really look at statistics the same way you do. But, I think that people under 40 are doing better than what the statistics indicate. I attended my ten year high school reunion last summer and naturally, we discussed how we're doing professionally. I would say over half of the people are in what I would call "professions". These would include:
- Mechanics
- Medical practioners
- Planners and consultants
- Oil and gas workers
- Education/teaching
- Finance-related
At minimum, I don't think it's a stretch to say that half of the people are making salaries in the 50-60K range. With maybe 5-8 more years under their belt, it's not a stretch to say that they'll be in the high 70-80s. I went to public school in East Vancouver which in the 1980s was largely blue-collar and immigrant-based. So, you take a little bit of home equity, savings from living at home, and you can maybe see how the numbers work.
The main problem with this post is this,
You have a select sampling,
These people all
-Graduated high school
-Cared to attend a reunion
Most of the lower income earners probably did not graduate and were even less likely to attend a reunion where they would be judged for being unsuccessful... and some of them are probably lying about their finances lol.
Look at it is like this, they measure median household income the same way year over year, just like they measure average cost of single family home every year... it's all about the constant variables which are examined that provide reliable data.
So food for thought on that,
2000 Median household income 49940$
2001 Single family home 380000$ (just couldnt find 2000 price so used 2001)
2010 Median household income 58200$
2010 Single family home 987000$
So in the same time median household income went up 9000$/year, the cost of the average house has increased by 607000$
__________________
Quote:
Originally Posted by jasonturbo
Follow me on Instagram @jasonturtle if you want to feel better about your life
Last edited by jasonturbo; 02-22-2011 at 03:24 PM.
I just want to comment that although people are limited by their salary (Say avg family income of 70k), people are still making it happen. Families with multiple generations in one home, renting out suites, renting rooms, international students, help from parents etc.
I own two condos (one residence and one investment). I rent a room in my 2bdr condo.
I used to rent bedrooms in my townhome to make the mortgage more affordable, so good plan to rent out the spare room!
I find it awful that "people are still making it happen". It means the rules aren't tough enough to discourage people from the wealth trap.
Spain is especially scary, cause it is already happening here. Think about your friends/family that own and how many of them have cut back on expenses to be able to afford the mortgage - in particular any FTB who has bought in the last couple years. My old neighbours in Ottawa did exactly this, going out less cause they had less disposable income. My coworkers in Vancouver often cite their mortgage as a reason why they cannot afford to do as much as I do. I have lost teammates in Vancouver cause once they bought they could nolonger afford the sports team fees. Hell when I moved into my rented condo the landlord asked if I'd throw the previous tenant a couple hundred $$$ for moving in early, the previous tenant had just bought and could probably use the money. ARG! If you can afford a half million dollar mortgage, you shouldn't be worried about $100 here and there.
Its so awful what people will sacrifice to own a property. Worse that our economy is 70% dependent on this spending. The money is being funneled into banks rather than the general economy.
You are currently viewing our boards as a guest which gives you limited access to view most discussions and access our other features. By joining our free community you will have access to post topics, communicate privately with other members (PM), respond to polls, upload content and access many other special features. Registration is fast, simple and absolutely free so please, join our community today!
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