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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.
The multiple offer landscape have changed these last few years.
The past few weeks, I was caught up in multi offer situations.
Example 1.
Over asking subject free offer. Selling agent calls me and says our offer is low and gave us a chance to increase it.
I didn't go for his bluff and he never called back. Have yet to see the SOLD price on MLS yet.
Example 2.
Over asking subject free offer. Again offer was too low and was given the chance to increase. We moved up on price and ultimately got the home.
Both situations, seller agent requested emailed offers
I personally prefer to be there in person if possible.
Typically, a seller in a multi offer situation would pick the best offer out of the group and would either accept it or work with it.
Now the sellers are allowing ALL the buyers to increase their offers. That's why home prices have sky rocketed lately.
As a buyer in this situation, they are suppose to present their BEST offer.
Now that you're given multiple chances to go "Crazy"... sellers are licking their lips.
Example 1.
Over asking subject free offer. Selling agent calls me and says our offer is low and gave us a chance to increase it.
I didn't go for his bluff and he never called back. Have yet to see the SOLD price on MLS yet.
The multiple offer landscape have changed these last few years.
The past few weeks, I was caught up in multi offer situations.
Example 1.
Over asking subject free offer. Selling agent calls me and says our offer is low and gave us a chance to increase it.
I didn't go for his bluff and he never called back. Have yet to see the SOLD price on MLS yet.
Example 2.
Over asking subject free offer. Again offer was too low and was given the chance to increase. We moved up on price and ultimately got the home.
Both situations, seller agent requested emailed offers
I personally prefer to be there in person if possible.
Typically, a seller in a multi offer situation would pick the best offer out of the group and would either accept it or work with it.
Now the sellers are allowing ALL the buyers to increase their offers. That's why home prices have sky rocketed lately.
As a buyer in this situation, they are suppose to present their BEST offer.
Now that you're given multiple chances to go "Crazy"... sellers are licking their lips.
All buyers are having a tough time.
We had a similar situation. Seller asked some bidders to re-bid. We said take it or leave it. Got the property at the end. (Offer was about 5-7% over asking).
Our house in Langley just sold for $110k over ask with no conditions, subject free, blank dates...on a century old house. It had no business selling for anywhere close to that but people just want to get in the market for whatever reason, even if it's not 'Vancouver'
You have foreign buyers, developers, flippers and people who actually want to buy a house to live in. The inventory of homes on the market in the lower Mainland is very low and there's way too many buyers which will continue to drive up prices in the near future.
I bought a house in Ocean Park which I paid close to asking last year, rented it out and I'm getting 2-3 calls from Realtors every week if I want to sell. I could walk away with $200k but my plan is to build a new home on it next year and flip it because the entire area is set to be redeveloped because most of the homes have been bought up by developers.
Our house in Langley just sold for $110k over ask with no conditions, subject free, blank dates...on a century old house. It had no business selling for anywhere close to that but people just want to get in the market for whatever reason, even if it's not 'Vancouver'
congrats on the sale. for the sake of discussion, would you mind telling us what your plans are after selling (ie. downsize) and are you worried about getting caught in the trap of not being able to buy back in?
The 2008 American housing crisis was powered by different reasons, however, if our housing market crashes it may only be caused by the world economy tanking, especially the asian/chinese markets. I'm not sure that's something I want to happen, a worldwide recession won't benefit anyone.
Mr.C, the overwhelming narrative for Vancouver real estate as demonstrated by the creation of this fear-mongering thread back in 2012 is that people are convinced there will be a crash. A major crash. People are only realizing now that this imminent crash is not going to happen instead we got one of the biggest real estate bull market on planet earth and everyone wants to get in the game. Money will go where it will grow.
I was exactly in the bear camp for a long time but realized last year that it was foolish to be a renter for the rest of my life if I want to live in this town so I pulled the trigger. Like I said previously, and 4444 will obviously disagree, buying a house is a financial investment but it is also about providing a stable roof over your head for your family and that's difficult to assign a dollar value.
No one knows when the market will crash, but if you need more than a 1-bedroom condo because you have or want kids, what do you do? Move back home and wait to buy at a price you can afford? I know a couple with 2 kids who moved back into their parents' basement so they could save. Guess what? They're still waiting and considering the recent run up in prices, they're likely priced out of properties in their preferred cities despite getting free child care and the two of them making in excess of 10K/month.
Saying the crash is coming is like saying the Canucks will win the cup. Will it happen? Maybe but who knows when if ever.
Most people I know who have a good grip on the situation don't expect a thing to change in the next 3-5 years, if ever. That doesn't mean these crazy price increase will continue year after year, but the prices probably aren't going down.
As I've said before, what is a "crash" a 20% correction? That would be considered "huge" yet east side homes would still be over a mill lol.
I don't see new construction ever be drastically effected by any sort of "crash" on the typical Vancouver special 33x100 lot, a new home with a suite of around 2500 sq ft total would cost you 500-600k to build. That's the current climate of construction costs. So you want to tell me the evaluation of land that is essentially a walk to downtown will drop to less than 300-400k? I'd say it's doubtful.
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Dank memes cant melt steel beams
It’s supposed to be a safe investment — assuming you can scrape up the cash in the first place.
A new ranking from our friends at MoneySense Magazine looks at the best neighbourhoods in Metro Vancouver in which to buy real estate.
Coming in at number five: Renfrew-Vancouver East, where the average price of a home as of 2015 was just over $1.14 million. The neighbourhood features a lot of solid, older homes; as well as some newer condo developments.
New Horizons in Coquitlam came in fourth. Hastings in Vancouver East was in third. Brentwood Park in Burnaby was in second.
The top neighbourhood to buy in in the Vancouver area? Ambleside in West Vancouver.
There, the average price is $2.2 million. But there are still homes that are quite a bit cheaper than in the surrounding areas, meaning there’s still time for them to appreciate.
The top 10 Metro Vancouver areas in which to buy a home (and average price):
1. Ambleside in West Vancouver ($2,249,300)
2. Brentwood Park in Burnaby ($1,250,000)
3. Hastings in Vancouver East ($1,036,500)
4. New Horizons in Coquitlam ($755,100)
5. Renfrew in Vancouver East ($1,145,000)
6. Vancouver Heights in Burnaby ($1,249,800)
7. Victoria in Vancouver East ($1,149,100)
8. Mount Pleasant in Vancouver East ($1,099,800)
9. Ladner Elementary in Ladner ($811,500)
10. Sapperton in New Westminster ($793,800)
Ultimately home ownership/investment is binary, you're either in or out, red or black.
From a perspective of risk management you have people willing to take on no risk (renters) and people will to take on massive risk (Buyers with very little equity in a very expensive market where obtaining your mortgage would be impossible if interest rates weren't so low). Perhaps if housing (for 90+% of the population) didn't make up the entirety of their net worth, home owners could actually consider and manage the risks associated with ownership/investment. Perhaps if this opportunity existed you would see a more balanced market with more reasonable appreciation/depreciation.
So long as you understand that you're not managing or mitigating risk being a highly leveraged home owner in an extremely expensive market, then at least you're being honest with yourself that you're essentially gambling on real estate. For this reason, and this reason alone I remain a renter, it's the only way I can remain diversified and manage financial risk.
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Quote:
Originally Posted by jasonturbo
Follow me on Instagram @jasonturtle if you want to feel better about your life
Lots of people in Metro Vancouver work for some sort of public sector organization (it's the dirty little secret of a lot of families, particular children of immigrants) and have significant defined benefit pensions. Everyone knows someone that works in health care, is a teacher, is in law enforcement, etc. That makes it possible for people to go all-in when it comes to real estate, no matter how painful, because retirement is taken care of. If the economy crashes, the public sector will be the last to get cut, particularly those working in health care and public safety.
Ultimately home ownership/investment is binary, you're either in or out, red or black.
From a perspective of risk management you have people willing to take on no risk (renters) and people will to take on massive risk (Buyers with very little equity in a very expensive market where obtaining your mortgage would be impossible if interest rates weren't so low). Perhaps if housing (for 90+% of the population) didn't make up the entirety of their net worth, home owners could actually consider and manage the risks associated with ownership/investment. Perhaps if this opportunity existed you would see a more balanced market with more reasonable appreciation/depreciation.
So long as you understand that you're not managing or mitigating risk being a highly leveraged home owner in an extremely expensive market, then at least you're being honest with yourself that you're essentially gambling on real estate. For this reason, and this reason alone I remain a renter, it's the only way I can remain diversified and manage financial risk.
This is essentially the point. Renters have very low risk, are liquid so they are paying a premium (rent) for that luxury.
It is normal and prudent to be skeptical when you have people (many people in this thread) buying based on FOMO. That is dangerous. You are laughing saying what is a correction? My shit will only go down 20% top? It is not how it works. In a correction scenario, there is the fear of not knowing how far the price can plunge. That accelerates selling and drops price further. Nobody knows if it will go down 10%, 20% 50%. No one. You only knows people selling at a discount left and right. And that could place a psychological toll on you.
If your financial are solid then you can probably survive a correction. The sheep that will be up for slaughtered are the ones who are highly leveraged, bought under FOMO, owning multiple assets with that leverage.
A correction cause a ripple effect thorough the world economy (remember Thailand 1997?) The good news is that the central banks today are so much better equipped at preventing such situation through various tools and knowledge that were not available to them years ago.
Ask yourself if the price plunge 20% tomorrow, what are your plan A, B and C. As long as you manage your risk, you cannot lose. This is not to say that there will be a correction any time soon. You have to take into account the scenario that Vancouver RE simply has not reached its "fair" market value. Just because you cannot afford it, does not means it's overpriced. Remember in the market, there is no such thing as price is too high it cannot go up or too low it won't go down any further.
Ultimately home ownership/investment is binary, you're either in or out, red or black.
From a perspective of risk management you have people willing to take on no risk (renters) and people will to take on massive risk (Buyers with very little equity in a very expensive market where obtaining your mortgage would be impossible if interest rates weren't so low). Perhaps if housing (for 90+% of the population) didn't make up the entirety of their net worth, home owners could actually consider and manage the risks associated with ownership/investment. Perhaps if this opportunity existed you would see a more balanced market with more reasonable appreciation/depreciation.
So long as you understand that you're not managing or mitigating risk being a highly leveraged home owner in an extremely expensive market, then at least you're being honest with yourself that you're essentially gambling on real estate. For this reason, and this reason alone I remain a renter, it's the only way I can remain diversified and manage financial risk.
renting have no risk is an illusion. tell that to the many people around Metrotown area who have been renting for 20+ years and now have to move because of high rises going up. i feel bad for those people but at the same time people do have to take some responsibilities themselves for getting too complacent.
everyone considers the downside risk but not the upside risk. Last I checked getting a mortgage from the big banks is not a walk in the park, so just because you want to buy that million dollar home it doesn't mean you can. in this regard canada is exactly the opposite of US pre-2008.
ultimately, renting only works for people who are new to city or have occupation requiring them to move all the time. for the rest of us who don't watch the S&P500 on a daily basis, it just doesn't work.
banks/mortgage brokers give out mortgages pretty easily as long as its under 1M. Little bit of a obstacle if it's over but still easier than it used to be. (It's much harder in Alberta though)
And lol at that argument that public workers with defined benefit pensions will go all in thus house prices will never fall. Their retirement's not taken care of if they are still servicing debt. Also regardless of "guaranteed" pension income banks won't give large mortgages to people retired especially in a downturn. That's some realtor logic.
Buying a place for your family is fine.
It's the people who are leveraging with cheap credit buying multiple places that are driving prices up. In the end we're just screwing ourselves over.
Here's another fun map. Price-to-Rent ratios for single-family homes in the lower mainland:
Now let's compare it to goddamn San Francisco, with its red hot tech market:
1. Palo Alto
Home to Stanford University students and technology professionals, Palo Alto’s housing stock skews toward renters. With 44.6% of housing counted as rentals and the second-highest price-to-rent ratio in the Bay Area at 31.77, it tends to be better to rent than to buy a home here. According to Zillow data, the median home price by fall 2013 had topped $2 million.
2. Cupertino
Cupertino, one of the most affluent cities in Silicon Valley, is the headquarters of Apple, which helps explain the median household income of $129,976. But even with those higher incomes, the price-to-rent ratio of 29.61 indicates that for most people it’s better to rent than to buy a home here. The rental vacancy rate of 4.9% is the highest of the top 20 cities.
3. Los Gatos
In the town of Los Gatos, southwest of San Jose, renters spend about 28.7% of their median household income of $122,476 on rent costs. But it can be more difficult to find a place — vacancy rates and the percentage of housing for renters are lower here than in other cities in our top 10. With one of the highest price-to-rent ratios from our list, renting is 28 times cheaper than buying in Los Gatos. Netflix and Digital Media Academy have based their headquarters in the city.
I'm sorry, when goddamn Cupertino and Palo Alto have better, and not a little better but a LOT better price-to-rent ratios, you know something's fucked up in the market.
I think ya'll buying houses are frickin' crazy. I hope you sell for 1 million more in 5 years and make me swallow my words, but this market is in-sa-ne.
Edit:
I can rent for 3k per month an apartment on Beach Crescent, or I can buy one practically on the same floor, in the building across the street, for 3.5 million dollars. LOL
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