Hopped up on Starbucks and mold, Vancouverites are an excitable bunch. Especially when it comes to the local obsession, real estate. But lately this fetish is off the charts. Makes one think we may be nearing the end game.
Last week a delusional dink paid $4.23 million for a Kitsilano house. But not just any house. A normal one, on a regular lot – only 33 feet wide. Renovated? Sure. Palatial? Nah. Worse, the greedy sellers had asked for only $3.495 million, so the dink threw an extra $735,000 on the pile. More bizarre, the house has a rental apartment in the basement, so some person will end up sharing your $4-million digs while paying the same as if it were a $1 million shack.
The house, by the way, is not in the best hood. A good one, absolutely. But not where the rich people live. Oh yeah, and it’s made of wood and 104 years old.
From far away – in Maple Ridge (50 km inland, an hour’s drive into the wilderness) – Jerry sends us this report:
“This past summer we noticed a vacant house up for sale down the street from ours. Out of curiosity we engaged an independent realtor and viewed the property extensively; it was not pretty, and had a long list of required DIY fixes. The price was listed at $450k, but given the work it needed I told the realtor I would be interested in the $350-400k range. He refused to even put in an offer unless I was willing to hit at least $400k, so I pulled the plug and walked away (laughing). It sat on the market all summer and was eventually pulled from the market with no successful bids.
“Well, this same house was relisted this week, with the same realtor. Nothing new has been done to it . . . in fact, the fence is now collapsing (someone DROVE THROUGH IT) and the yard is hideously overgrown. All of the pictures in the listing are the same ones used last summer. The asking price now? $550k!!!!! Given how the property has actually deteriorated since we last saw it just over 6 months ago, I am not sure how they might hope to justify their 22% ($100k) price hike?
“The saddest/craziest part? We actually think it might sell this time. The fever in the YVR market is SO high right now that people are making stupid, highly-emotional moves; we are seeing people around us begging for leads on houses for sale so that they can stay in our area (they sold their house and now need a new one!). Sellers are delusional and buyers are gullible – put them together and they’ll just end up pulling each other off a cliff. I just cannot wrap my head around this. It’s madness, and it’s maddening. We like to think there is a limited number of Greater Fools out there and the market will have to normalize to the mean at some point . . . but, at least in YVR, there appears to be no end in sight. The Greater Fools are multiplying!”
Well, down on the US border is the weird little enclave of White Rock – also about 50 km away from the bright lights, bike paths and hookers of downtown YVR. (If you ever go there be prepared for a shock. The signature honking big white rock is actually just painted white, and flaking.)
“We bought a small 50’s era rancher here in 2014,” says Troy. “Every week now I get notes in my mailbox asking me if I want to sell my house. Some are written in colourful felt pens like a 16 year old girl wrote them, and some have such bad grammar, it seems a waste to have them professionally printed.
“Our neighbour sold her house in a 30 hour bidding war for $100k+ over asking.”
So here is what Troy received. Good realtor porn, and bad realtor porn:
It’s interesting an Angus Reid poll released Friday in a nation where people are more house-horny than any other place on earth showed fear is starting to stalk the streets. Two-thirds of people (65%) said they think the government should intervene in the housing market to increase fairness. That’s code for saying house prices are stupid high and affordability has collapsed.
In fact 56% of respondents who live in cities volunteered that real estate prices are now “unreasonable,” and measures need to be taken to rein them in. And it’s not just citizens of the bubbly places spouting that. “No fewer than 45 per cent in Edmonton, Calgary, Winnipeg, Montreal or Halifax view prices as either high or unreasonably high,” reported the pollster. As you might expect from the media blitz, folks are particularly up in arms these days about assignment clauses and realtor tactics (plus foreigners) since nobody ever wants to accept blame themselves.
Nothing new here, though. This blog’s told you repeatedly how Canadians are trading savings for mortgage debt, retiring with fat mortgages, unable to cope with any increase in monthly bills, and racking up unprecedented levels of household borrowing. The very fact only 7% of us maxed out TFSA contributions, with no public outrage when the government slashed the tax shelter by 50% is all the proof required that real estate’s warped a nation’s collective mind. It’s a one-asset country now. And that commodity is bouncing off the ceiling.
It doesn’t actually matter if interest rates stay put for another year or two, if commodity prices inch back or the new gang in Ottawa becomes more popular than weed. Real estate cannot continue to rise when the average family can’t afford the average home. When two-thirds of people think it’s so out of control that politicians must intervene, and more than half say prices are bananas, the fix is in.
Besides, we all want the Kits guy to get smoked. Am I right?