Jul 05 2008

CityView: Vancouver A Buyer’s Market

Published by at 4:41 pm under Uncategorized

604homesblog author Matthew Collinge seems to be hedging his bets, but Yatter Matters’ real estate writer Larry Yatkowsky has called it: Vancouver is a buyer’s market. Larry’s caveat that we’re still seeing single-digit growth in prices from year to year can’t mask the reality that sellers are being forced to offer price reductions if they want to actually sell property.

My wife and I just looked at a Yaletown condo where the seller has dropped his price by nearly $80,000. This is a substantial decrease, but the problem is that the property was overpriced to begin with: a one-bedroom plus den (750 square feet) for $600,000.

Even closer to half a million dollars, that’s still a hefty premium to pay for a nice location and free access to a shiny new fitness club. It may be a buyer’s market, but it ain’t cheap. Those who want to own in Canada’s most desirable neighborhoods are still going to have to pay for it.

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One response so far

One Response to “CityView: Vancouver A Buyer’s Market”

  1. Larry Yatkowskyon 05 Jul 2008 at 6:47 pm

    The following may be a rant of sorts.

    Your personal example exactly describes the affordability factor. It takes a lot of money for the down payment, the mortage payment and the increasing cost of maintainance payments. – Those gas fireplaces cost a lot of money to run if they become the main source of heat. – There are many buyers out there who face the same dilemma. It is terribly frustrating. I’m sure you will not find comfort in that but take solice that you are not alone.

    The market will soon or is currently going through an adjustment such as you have noted and evidenced by price reductions. The question remaining is will we see continued price reductions – of course, but more importantly, will those reductions be sufficient to allow young buyers into the market. IMO that is the problem! Historically the Vancouver market has never taken that much of a hit. Mostly I think, that in the past, rising wages and reasonable interest rates offset the ability to purchase.

    However, we have a new dynamic afoot, that being oil costs. I’m not sufficiently brilliant to figure out what is going to happen as a result of this new entry to the mix. What I anticipate is that everything is going to start spiriling upwards at an increasing rate in 2 or 3 month cycles. Some might call this inflation. The effect of this is while we may have a short 2 – 5 year run on reductions of home prices ultimately the prices will climb in the long run. $500K may in 7 years look like a bargain.

    This may sound silly but you will probably able to make a reasonable projection of homes prices based on the price of a 2 X 4 at your local lumber yard. To continue the sillyness here’s a plan. Want to buy a home? Go to Home Depot for dinner out with your partner at the burger joint they have in house (I think it’s a donut shop at Revy) . While there, spot check the 2 X 4’s. That way you can rest assured that you will either be ill from the burger/donuts or the increased cost of the 2 X 4. :)

    Somewhere in this mix you also want some semblance of life where you can take advantage of the benefits our city has to offer. Hadn’t thought of it in this light before but cruising Home Depot may have just become the highlight. Such is life in paradise.

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