Vancouver Zombie Walk
In Detroit however, $465,000 will get you 9,638 square feet, looking like this:
Description: Historic Boston Edison-significant home built for Walter O. Briggs (founder Of Briggs Manuf. & owner of Detroit Tigers). This light colored stone English manor was designed by architects Chittenden & Knotting In 1914. Currently known as “Stone Hedge” this lavish home is finely detailed w/paneled & tapestry walls, elaborate crown & dentil moldings, Elevator & a porte cochere leading to the garage & carriage house. 9 fireplaces.
I was reminded of this bizarre state of affairs as I listened to a caller to CBC radio in Vancouver dis me as some Eastern dude who could not possibly know how different it is in that delusional city. “There’s a shortage of land between the water and the mountains,” he said, “so people are basically flipping each other houses.” That’s not all they’re flipping. VanCity’s becoming one of the most unliveable places on the continent. Can Detroit be so bad?
The topic of the show was, as far as I could tell, how socially repugnant it might be to rent. After all, when everybody has red shoes, except you, life’s a bitch. These days there’s nothing – and I mean, noth. ing. – which people talk about other than the value of homes. This seems even more cacophonous as sales slide and it becomes evident something’s happening. Denial is a drug, and the withdrawal will be painful.
Here’s a city that real estate is destroying, even as its citizens revel in windfall gains and the newspapers publish fat stories about the latest government property assessment numbers. Mainstream media pump house prices as good news. Monthly real estate board stats (if they’re hot) get the same treatment as a virgin birth (what an awful thought). Local star realtors tool around in exotic rides and expect to be treated like Lady Gaga. Vancouver has taken the title from Calgary as the most materialistic, self-obsessed, wealth-conscious and socially unattractive city in the nation. And it was a tough fight.
Let me remind you of the latest ‘affordability’ numbers. With a 25% down payment and current lick-the-bottom mortgage rates, it takes 86% of an average family’s pre-tax income to buy the average Van bung. That’s pre-tax. In practical terms, it’s 106% of the money people actually bring home – just for a house. The median SFH is well over $1.1, while it requires ten times household earnings to purchase the average property. By global standards, that’s almost off the chart.
This is why smart people from Toronto, folks making two hundred grand in finance jobs, have told me they’re refusing transfers to BC. I mean, what’s the point of being a VP when you have to park realtors’ Bentleys at night to afford a west side mortgage?
Worse, real estate is making Vancouver racist. Read this blog for a few days. The sense that cash-laden Chinese immigrants are buying the entire city is palpable among those who are neither. HAM gets confused with the cultural real estate horniness of the area’s massive native-born Asian population, and suddenly a convenient straw man’s been created. Truth is, of course, skin colour and real estate greed and not correlated. But this is not going well.
And nowhere else is the wall being built higher between young and old, or the middle class and wealthy, than here. If you are 30 and have a regular job, there’s no way you will ever own a house, unless it’s miles distant. Boomers’ adult kids learn the home they grew up in is unattainable. Families of average means see entire neighbourhoods of non-descript structures fall into the hands of those who can, or dare, pay a million or more for each. A society’s rapidly emerging in which there is no middle. Just extremes. Bitterness. Disappointment. And some nights, destruction.
It’s unsustainable. Now, as sales unravel and volumes fall by as much as half in many areas of the city, it’s possible to see a reduction in prices of 40% by the time an equilibrium is found. This will not destroy the wealth of those who bought a decade ago, but it’ll slaughter the innocents – the virgins who believed Global TV, CKNW and the mayor.
A year ago I said, Sell Canada, Buy America. Prices always revert to the mean.
This will be good for Detroit. Reality for Vancouver.