Sunday, March 04, 2007

World Class Stupid?

UPDATED DATA

Well I was inspired by freako's comment in the previous thread about other city's housing prices so I wanted to compare our insane home prices with other insane home prices. Here we go:

How world class is Vancouver?



US house price data is from John Burns Consulting. Exchange rates are from the Bank of Canada. Local house price data is from the December 2006 RBC Affordability Index study.

23 comments:

Vancouverite said...

As a native of Vancouver, that has lived in a variety of cities around the world, I am getting tired of hearing how great the city is. Yes, certain areas of the city are lovely - but really I wouldn't call Richmond, Burnaby, East Vancouver, New Westminster, the Fraser Valley or most of Coquitlam attractive. I would pick Toronto, Calgary, Nova Scotia and countless other places in the world before Vancouver. Having said that, London England has to be one of the most unattractive cities I have ever seen. The only thing that draws me to Vancouver is my family.

betamax said...

Vancouver may have world-class prices, but hardly has a world-class downtown, business center, cultural amenities; nor does it have world-class incomes.

My wife comes from a "small city" in China. How small? A mere 3 million, and that's considered small. Vancouver is viewed by many Chinese as a quaint country backwater.

Although we both like Vancouver, it is hardly "world class". Yes, it has nice views and lots of natural wonders surrounding it, but the key word there is "surrounding". The city itself is not much compared to the great cities of the world.

bc_cele said...

Betamax,

My GF is from Seoul and she likes the city because the winters aren't cold. I, too, think that there is great natural beauty around the city, especially in North Van and Deep Cove. However, this doesn't make a world class city. How can Vancouver keep up its illusion of a world class city when it doesn't have the cultrue, business, or wealth?

van-realestate-crash said...

which one is nicer? Hmmmm . . . . Surrey ($417k) or Miami ($347k)?

Yeah but if you are going to get busted for running a grow op, or a crack lab, it’s better to get busted in Whalley/Newton.

Vanhattan said...

Curious, what is the source of the statistics you cite? Thanks.

Freako said...

I should also note that on my list in the other thread, some of the U.S. metro's can almost be thought of as one. If we merge San Francisco and San Jose, and LA with Long Beach/Anaheim, we would be 5th, possibly 4th if we surpassed San Diego.

mohican said...

vanhattan - I have sourced the data.

Also, as many have noted, Vancouver does not have the income levels that all of the other cities on the list have. Bubbliest of the bubbly.

Warren said...

betamax said:
Vancouver is viewed by many Chinese as a quaint country backwater.

Really, a backwater? Vancouver may be overpriced, but its still in an industrialized society where everyone has flush toilets and telephones.

Mohican, those comparisons are misleading, either intentional or not. For example, from your source, San Francisco is detailed as "The area includes the major cities of Berkeley, Concord, Daly City, Fremont, Hayward, Oakland, Redwood City, Richmond, San Francisco, San Mateo and many others." ie: the city and the burbs.

Compare that and the other cities on your list with the GVRD, or possibly GVRD/FVRD average if you want to be more fair.

righton4 said...

We'll see how Vancouver real estate fairs as the mortgage crisis in the US plays out. With all of the subprime lenders going bankrupt and backing out of the market it is only going to get worse and Vancouver is not immune to the spill over effects.


US triggers $11bn HSBC fall-out

mohican said...

warren - I would also add that the Vancouver stat is for "Greater Vancouer" including Richmond, Burnaby, Coquitlam, North Van, and more. My point is that Vancouver, the climate, and the opportunities offered here are no comparison to any of the other cities listed in the same price range. Whether we include the Fraser Valley in our calculation or not, the point is still the same. Besides, if we include Fraser Valley stats we only move a couple notches down the list - we don't drop off the list.

tulip-Mania2 said...

"Really, a backwater? Vancouver may be overpriced, but its still in an industrialized society where everyone has flush toilets and telephones."

Telephones and flush toilets, Warren have you graduated from Rob Chipman's School of Sales?

Dignan said...

"Mohican, those comparisons are misleading, either intentional or not"

You're right warren, Mohican failed to mention that in the U.S. mortgage interest on your PRINCIPAL RESIDENCE is tax deductible.

mohican said...

dignan - how much does the mortgage interest tax deduction really factor into the US home price?

mortgage interest is tax deductible in miami and in los angeles so why the big difference in prices?

mortgage interest is tax deductible in canada for "investors" as well?

How many "investors" are there in the vancouver real estate market?

Dignan said...

Mohican-

What I'm saying is Vancouver prices are MORE expensive comparatively because of the fact that we don't get anything back in tax deductions. I'm on your side!!

mohican said...

sorry dig - i didn't sleep well last night!

Pondering said...

Wow! That is truly stunning. Considering the truly world class companies in San Fran, LA, etc. I can't believe we are approaching their prices. I am stunned.

Hopefully this will help my arguement with my wife about moving...

Dave said...

From an old VHB post:

Also in 1981, a Vancouver Province editorial called "Housing Bubble Must Burst" notes that prices in Vancouver are twice as high as Seattle, and higher than in California. Higher than California - wow!

Okay, so we're not twice as high as Seattle (yet). But it's bizarre to think of Vancouver's median price exceeding Seattle's (even Surrey is higher).

beta said...

Really, a backwater? Vancouver may be overpriced, but its still in an industrialized society where everyone has flush toilets and telephones.

LOL. Chinese have cellphone technology more advanced than what we have. They just skipped installing landlines and went straight to cellular.

VAB said...

Some thing strikes me as off with those figures. I moved from a nice part of Brooklyn to a nice part of East Van. I think they are comparable in terms of their relative locations and their relative desirability. Where I moved from, comparable houses were selling at 1.5 to 2 M US. The place I rent here was appraised at 550 K. Vancouver RE prices are out of step with fundamentals, but they are nowhere near NY prices. What the source do not tell you is what the size and desirability of the homes it is tracking are. Following the site's links, I cannot find any listings that are actually in NYC, but if the numbers are from NYC, the "SFH + Condo" number will include a lot of one bedroom condos the size of an average Vancouver kitchen. A more accurate reflection of NYC prices can be found here: http://preview.tinyurl.com/2eec9l. Compare Yale Town to, "An average price of an apartment with three or more bedrooms on the Upper East Side was about $3.8 million."

I'm a bear, but let's not delude ourselves.

mohican said...

vab said: "Some thing strikes me as off with those figures."

No doubt you are correct here vab, these price comparisons are so rough that I wouldn't put more than a cursory comparison into it. This data isn't meant to pass rigourous testing!

The best comparison would be price per square foot but that data is not available.

Warren said...

beta said:
LOL. Chinese have cellphone technology more advanced than what we have. They just skipped installing landlines and went straight to cellular.

Lets be honest, China is becoming a world power, but many of its citizens still live in poverty and 3rd world conditions, under a brutally repressive government.

There's no comparison in standard of living between the countries.

Warren said...

warren - I would also add that the Vancouver stat is for "Greater Vancouer" including Richmond, Burnaby, Coquitlam, North Van, and more. My point is that Vancouver, the climate, and the opportunities offered here are no comparison to any of the other cities listed in the same price range. Whether we include the Fraser Valley in our calculation or not, the point is still the same. Besides, if we include Fraser Valley stats we only move a couple notches down the list - we don't drop off the list.

I see that you totally changed your list and your source after my comment.

I'm not saying we aren't in a bubble, but some people like to overhype some of the statistics.

Interesting comparison that in 81 we were so much higher compared to Seattle and LA. Yet now some people are predicting "a crash worse than '81". I highly doubt it.

mohican said...

Thanks for the constructive criticism Warren - it was fair. I don't mind comparing apples to apples as long as I have the data. In the absence of data I work with what I've got.

I am not predicting a 1981 style crash, although not impossible, it is highly unlikely. A period of time like the mid to late 90s with price decreases and income and rent increases would be far more probable.