My First Real Estate Prediction
I have to get this out now because the Major Domo Real Estate Guru and owner of a real estate office I work at will be soon flying in from Santiago for Christmas. He was the one who told us last year to sell our houses by May of this year. At the time no one would have believed it except that it came from his mouth and this office knows to believe his words. Most Agents without this type of information are still standing around wondering what the hell happened.
I want to get this out before I hear what he says. If his predictions are the same as mine then it might look like I’ve just written his words. This post being dated before his arrival will prove these are my own words. What I write here is based on my own research and experience. This is my first real prediction on the local real estate market in Vancouver. That was a great big caveat. Don’t base your decisions on this please.
Now that I’ve written all that I don’t know how to start.
“I predict bla…” “Real estate in Vancouver will bla…”
“blab la bla”
Are you sitting comfortably? Then we’ll begin.
Against what most seem to say, I believe the local real estate market will continue to tank in Vancouver for the next few years. I have no idea why most believe this is going to be over by spring of 2009 because it won’t, (by my estimations). There are many reasons why I see this as a long term state of affairs and I promise to only touch on a few. Most of you are already bored and haven’t even got this far. At least you can tell I’m interested. And that’s really the point anyway. It’s all about me - learning to feel OK going against the grain.
Prices are still too high. Even though prices have dropped we are still over valued in most cases. It’s quite easy to sell a place in this market. Price it below where the market is heading, not where the market is right now. Most sellers don’t do this. Many sellers can’t price reasonably because they have purchased at too high a price a few years earlier. What happens instead is they choose a price based on what sold last week and then every month or so they adjust the price down following the market down like water in a toilet bowl.
There are no first time buyers. Most Real Estate transactions in the last few years were by property owners and a lot of those were investors. Even now that prices have dropped mortgage restrictions have taken many of the would be first time buyers right out of the game. Even those who became first time buyers a year ago may have a hard time finding a new mortgage due to new regulations if they decided to move today.
There are no investors. I’m already getting tired of the term “global crises”. On the world level, Canada is doing just a little to well. Investors find the US to be full of a lot more bargains than here. Places like Miami for instance are as low as -50% their regular going prices.
So if you had listened to my guru friend last year and sold right before the drop, you would have a couple hundred thousand buckeroos in your pocket right now. And had you taken that nice nest egg and purchased in Miami when the Canadian Dollar was near par with the US Dollar and waited the few years I believe it’s going to take… Let’s just say there is money to be made in Real Estate and it’s not too late.
I think it’s still a great time to get out and get liquid because my thinking is the worst is yet to come.
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Originally published at An unbiased street view with curb appeal. You can comment here or there.