Wednesday, May 21, 2008

300th Post and I'm at Housing Bubble Ground Zero

Happy 300 posts and nearly 300,000 visitors!

I sat back today and assessed how my personal housing situation has changed in the past few years. My wife and I bought a condo in 2004 for a reasonable price that made our mortgage payments plus strata and property taxes less than the cost of renting. We were happy with our purchase and paid down our mortgage quickly, starting with a 15 year amortization and making double payments until we sold the unit last August for nearly double what we paid.

Needless to say we were happy with the profits and would have gladly purchased a reasonable townhouse to accomodate our growing family but no such suitable unit was found after a fairly extensive search.

We are now renting a larger condo in a brand new smaller building and we enjoy our location close to work and amenities. Our cost of renting this unit is half the cost of purchasing on a monthly basis and we are socking away our savings for an even larger down payment once we find a suitable home at a reasonable price. This extra monthly savings combined with the earnings from our extracted home equity is very substantial by any account and make these renters quite satisfied with our lowly renting status!

Now I find myself at Vancouver Housing Bubble Ground Zero

The building we live in has 32 units and currently 20 of these units are listed on the MLS website. Yes, that is right, no typo - 2/3rds of the units in our building, including the one we rent are for sale at this very moment. My landlord was hoping for quick profits by flipping this condo and realizing no quick sale he franticly sought a renter to help cover his costs while trying to sell the unit. His asking rent was ridiculous but was easily bid down by 25% with some fairly convincing arguments and some stiff competition.

The parking garage is empty and we have watched the poor realtors hold open houses all spring long with no traffic and no bids. Reluctantly the sellers lower their prices by $2000 and $4000 at a time but still no takers. Nobody realizes the game is over yet and there are a declining supply of greater fools to buy mediocre houses at inflated prices.

I am happy with my spectator status. It is going to get real interesting so grab some popcorn and a cold pop!

6 comments:

M- said...

I'm sitting on my office, and when I read "32 units and currently 20 of these units are listed on the MLS website" my jaw dropped and I let out a "gah" sound.

I'm astounded. You are at ground zero.

Since selling my condo, I'm living in Richmond (Steveston) these days. There's very little on the market right now around here-- it feels unchanged from last year. Even closer to Richmond Centre, there's still not much on the market.

Last weekend, by contrast, I was up at Westwood Plateau, and I could not believe how many FOR SALE and OPEN HOUSE signs I was seeing. It was like a completely different world from here.

I guess it's just a matter of time.

two thirds of your building is for sale? That's nuts!

Kyle said...

Have you thought about asking for a rent decrease? Kick them while they're down they'd likely do the same to you!

Warren said...

Remarkable.. I've noticed a lot more for sale signs on my daily commute to work, although in the last week or so some of them have sold.

Its fun to watch anyway...

VanTOVan said...

Congrats on reaching 300 Mohican!

I'd say that your neighbouring Willougby is one of the potential ground zeros for the crash of new SFHs.
As a former Langleyite, I'm amazed every time I come back.

btw--the commodities boom in corn prices still has some legs judging from the number of spectators that are making themselves comfy with a box of the jiffy pop for the imminent bloodbath.

Inwonderment said...

Any thoughts on how the owners of the Vancouver Olympic Housing project will make out if we have a decline in the local condo market? Are the taxpayers left holding the bag?

Glenn said...

Joe the tax payer is always left holding the bag.