Not a crash, just a slide...

[thirdlittlepig]

RE stats for okanagan are out at omreb.com.

North Okanagan: number units sold for this and past Aprils:

2011: 86
2010: 189
2009: 127
2008: 179
2007: 266
2006: 265

Looks like business is down 70% from the boom years. From my own little "benchmark" observation, during the boom years you couldn't find a 5 bedroom home for $350K (maybe one if it was a fixer upper) near Vernon. Now there there are over a dozen and several of them look decent even if not Executive Style, some even getting close to $300k. The fancier acreages, or farm estates are sitting there, not many takers.

[jesse1]

The silence from OK is deafening. Nobody likes a loser. Now back to Vancouver, Burnaby, and North Vancouver before I flog you with my amusingly over-sized novelty hammer.

[thirdlittlepig]

What, no one from the lower mainland is interested in a little gettaway on Silver Star Ski Hill? Average prices have slid from $600k to $400k, condos from 0ver $400k to under $300k. Oh, too bad, you are so weighed down with your immense mortgage on a little bungalow in the rat race City that you have no time for a vacation, or a second home.

[Taipan]

Wait a sec, wait a sec. Isnt the Okanagan in British columbia? (of course i know it is, as i travelled through there a few years ago on my way to Big White.)

Falling sales, falling prices. Nah its not in British columbia.

British Columbia is just those few suburbs where overseas buyers who are either ill informed or prepared to take high risks continue to bid the price up.

Just the last of the greater fools. And mentioning Greaterfools, couldnt help but ponder at the recent anecdote from Victoria.

It’s been about four months now since Jim and Vesha listed their semi for sale. That was when F declared he was going to kill off the 35-year mortgage, after it led to massive overborrowing and an orgy of house-buying by people without money. Like Jim and Vesha.

“Like you, I predicted this would further erode (artificial) affordability,” Jim tells me, “be the last nail in the coffin for house-porn addicted first time buyers, and kick of the slow price decline to god-knows-where.” And he had cause to worry. In the dying days of 2008, in the middle of the financial crisis, they bought the Victoria property for $442,000 with a mortgage for $433,000 and 5% down. That was a deal – $40,000 less than the other half of the house had sold for six months earlier.

But what they found is that buying any property in Canada with 5% is a financial death sentence. Despite making $130,000 between them, “it had become increasingly obvious over the past 3 years that this place was really dragging us down, we weren’t saving a dime outside of my defined pension contributions.” Life would be much better as renters. Besides, the neighbours sucked.

They listed at $475,000 – which Jim says “severely pissed off the neighbours (similar houses) who were all certain that since their tax assessment ranged from $475,000 to $508,000 I was severely low-balling.” But, not low enough.

Here’s the rest of his story:

“Time passed, we had maybe 8 showings by the time the funeral procession for the 35 year am passed us. We lowered the price another $10k, we picked up another 5 showings over a month, then we dropped another $15k and have had one showing since. The spring market has clearly not done much for us, we are now at $449,000 – 6 grand away from starting to throw away our measly 5% downpayment (well, in reality that is unavoidable since we’ll be paying a real estate commission) and more than $25,000 less than our $475,000 property tax assessment (which really pisses me off, I can’t believe I am paying tax on value that clearly does not exist). Our place is mint, we are super tidy, it has to be one of the nicer places people see – and yet nothing.

“We are starting to get worried, some of my friends in similar situations are worried too – but most of the idiots out there still seem to think prices are rising. We had this idea that if we had sold at our initial asking price we’d walk away with $50k or so, could tuck that away into some investments and search far and wide with more time this time until we found something to rent for awhile, probably saving ourselves $1500 a month.

“I was glad when I stumbled across your blog because it validated my feelings about selling as soon as possible, I just wish it was working out for us better because this is getting worse and worse by the day.”

Remember my little mate Islandlandlord from Victoria. No way was this going to happen to Victoria. Copped heap loads of abuse from him. Well he has disappeared when the going got tough.

Like i say, when this is over, there will be just a few wise old bears, with $ in their pocket, taking off their bear costumes, leaving the bull costume in the cupboard for now and buying wisely and slowly. - Oh and we will turn the lights out here as well, because the bulls will be long gone.

[jesse1]

I can’t believe I am paying tax on value that clearly does not exist

It's hard to feel sorry for someone who doesn't have a basic understanding of how property taxes are calculated. The other gem:

6 grand away from starting to throw away our measly 5% downpayment (well, in reality that is unavoidable since we’ll be paying a real estate commission)

Don't let those pesky fees bring you down. Chin up; it's only a loss if you run the numbers properly.

[thirdlittlepig]

I also find it difficult to feel sorry for a couple who got exactly what they signed up for. They didn't lose their job, or suffer an interest rate increase, they knew what their payments, property tax, and disposable income was going to be.So they aren't even being forced to sell like some people are. Maybe they didn't realize their neighbors would suck, but that's a risk anywhere, easier to fix if you are renting,but then you get other neighbors who suck. They just changed their minds, or didn't think it through what the joys of ownership would be. So they are throwing away their deposit and realtor fees, they did get three years of a roof over their head. The main thing they didn't count on was not being able to just dump their place on the market and walk away with a profit. A lot of people bought on the assumption they could just sell if they wanted to. Have they figured how much they might have to pay to terminate their mortgage agreement if they sell the house, I think there might be penalty fees there as well. Maybe it's better if they don't think it through too much.

[Austin]

Can someone post an MOI and a price chart graph?

I think it might speak to my theory that prices are somewhat divorced from demand and correlate better to general asset inflation.

[Taipan]

Tens of thousands of people in this position.

When people are forced to face the reality that their property value is falling the word will seep out as it is.

Eventually even the hard core bulls in Vancouver will one by one start worrying.

What if the unthinkable happens and prices start to slide! No surely not. Buy low sell high, but what if i was the highest buyer and there are no more?

It’s happening in Kelowna, Kamloops, Nanaimo, Victoria and bit by bit it will spread inwards.

I’ve got properties in my data base that are still on the market at between 600 - 900 days.

For some crazy reason the vendors think that if they just sit, and don’t meet the market, a greater fool will pay them for the privilege!

This is one of the things that really worries me about Vancouver.

Such massive mania ingrained into peoples psyche which drove prices higher, which will reverse and run in the opposite direction probably even faster.

Greed, propels, fear, drives.

[thinktom]

Wait a sec, wait a sec. Isnt the Okanagan in British columbia? (.. blah, blah, blah...). Falling sales, falling prices. Nah its not in British columbia. (blah blah blah) ...Oh and we will turn the lights out here as well, because the bulls will be long gone.

Want me to start filling the boards with people who've made a TON of money in real estate over the last 10 years in Vancouver?

Such massive mania ingrained into peoples psyche which drove prices higher, which will reverse and run in the opposite direction probably even faster.

Greed, propels, fear, drives.

This I agree with. The people who made irresponsible decisions will suffer, the people who purchased wisely will not. This, of course, is true in any market. For you to suggest a bloodbath is coming that will wipe out the city is asinine. The only 'mania' filling this forum is your frenzied posts.

[Taipan]

Its already started Tom.

The fact that it is happening all around the world, its happened 200km south of you, its happening in the regional towns and cities around you, yet because of some strange belief system it wont happen in Vancouver.

Even those who bought wisely will be out of pocket if for any reason they are forced to sell in the next 12-15 years. As the average family moves every 7 that means an aweful lot of hardache.

Try going and talking to people in the USA who are already working through those emotions. In vancouver those emotions arent even on the radar.

Talking with my wife about buying a condo in Sydney last night at dinner. For a 500k condo, we would be looking at a loss of $150k - $200k if sold within ten years.

Maybe i can afford to take that loss, but most people cant. Certainly anybody with a 5/35, 5/30 wont.

That means no appreciation at all and falling prices. Longer we dont buy the happier i am. Prices are stagnant and falling - but you wouldnt know it listening to the media.

[silverman]

Such massive mania ingrained into peoples psyche which drove prices higher, which will reverse and run in the opposite direction probably even faster.

Greed, propels, fear, drives.

This I agree with. The people who made irresponsible decisions will suffer, the people who purchased wisely will not. This, of course, is true in any market. For you to suggest a bloodbath is coming that will wipe out the city is asinine. The only 'mania' filling this forum is your frenzied posts.

So things are slow in Okanagan, what is else is new? we are in the middle of a "correction"... but try to find a "reasonably" priced waterfront property.

[jesse1]

The people who made irresponsible decisions will suffer, the people who purchased wisely will not

Some grand circle of virtue doesn't always apply. People who make "wise" decisions still get screwed over. It's called leaving the house every morning, or in this case simply buying when prices are high. Couldn't have happened to a nicer guy.

[Taipan]

Such massive mania ingrained into peoples psyche which drove prices higher, which will reverse and run in the opposite direction probably even faster.

Greed, propels, fear, drives.

This I agree with. The people who made irresponsible decisions will suffer, the people who purchased wisely will not. This, of course, is true in any market. For you to suggest a bloodbath is coming that will wipe out the city is asinine. The only 'mania' filling this forum is your frenzied posts.

So things are slow in Okanagan, what is else is new? we are in the middle of a "correction"... but try to find a "reasonably" priced waterfront property.

All round you silverman.

[silverman]

So things are slow in Okanagan, what is else is new? we are in the middle of a "correction"... but try to find a "reasonably" priced waterfront property.

All round you silverman.

If you call a $500,000 condo in Osoyoos "reasonably priced"... then you learned your lesson.
But wait and see what happens once prices recover.

[Thompson]

Silverman, save your mouth water for other bears. Taipan is forks on the head ... dinner is ready. He never understand RE is local, local and local. And he also conveniently forget RE of Toronto is hot too (maybe he didn't know? I don't blame him about that... he is a half of the earth away from us anyway )