Waiting For The Pop-Vancouver’s Pending Real Estate Crash

v681047_1.jpgThe Washington Post is reporting on the disaster that is the British Columbian Forest industry – that the U.S. housing crisis is about to crush what has long been considered the backbone of the British Columbian economy.

I am very happy that they decided to do a three page spread about the B.C. towns that are falling apart, because I may not have realized how grim the situation really is.  The local Vancouver media would never run a  story like this.

Why?

Because it’s bad economic news,  and we can’t have any bad economic news in our papers, people might stop buying real estate. 

I live in beautiful, Vancouver British Columbia, where for just 70% of your income, you too can live in a three bedroom bungalow.  This is a real estate market that should have cooled down before the end of 2006, but instead it roared through 2007. It roared through however, because people were bombarded with messages like “buy now or be priced out forever”, “real estate only goes up”, or my favourite “it’s different this time”.

The average single family home is now priced at $742k in a community where the average family income is $54k – things have spun completely out of control.  And that’s the problem, I’m afraid that it’s too far out of control. 

There are over 100 communities and 200,000 jobs depending on forestry.  News of their doom could have people questioning whether or not this is the best time to sign up for $4000 or $5000 a month for 40 years.  That of course could start to effect the 280 000 jobs in construction, or the 17500 real estate agents,  that all depend on the boom’s continuing booming.  

The media can’t report anything “anti real estate”, that would upset their advertisers, the ones who buy pages and pages of space to show off their shiny granite counter tops.   Bob Rennie, our local real estate guru,  has more power then the mayor.

So British Columbians have continued their trek through open houses, and have left themselves with a personal savings rate of -7.9%.  Combine that with a province that has a 17% poverty rate, and a government that has spent $1.6 billion on the 2010 Olympics, and we’re stretched real thin.   

But we’ll all keep our heads in the sand.  We’ll buy our Starbucks, and read reports telling us how fantastic we are.  The most controversial topic to cross the news in the past week was the mayor’s request to have fire trucks turn off their sirens at night,  they disturb his sleep.

That, in itself, says so much .   

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9 Responses to “Waiting For The Pop-Vancouver’s Pending Real Estate Crash”

  1. Eric Hundin Says:

    I found your site on technorati and read a few of your other posts. Keep up the good work. I just added your RSS feed to my Google News Reader. Looking forward to reading more from you.

    Eric Hundin

  2. callum Says:

    I have heard about the coming real estate crash for 5 years now. It must be stuck in traffic.

  3. TheRoyston Says:

    Thank you very much Eric – I appreciate it 🙂

  4. TheRoyston Says:

    lol! Hey Callum – I know exactly how you feel – only I actually believe it’s going to happen – if you take 5 minutes and research what’s happening in the U.S. market – and then compare that with the local market – it might actually begin to make you nervous

  5. They’re just shameful aren’t they? « The Royston Review Says:

    […] charts and statistics to show just how wrong a Vancouver condo purchase is (I’ve done that here) and I’ll only quickly mention that their numbers are wrong – they have 2007 condo prices […]

  6. Ozzie Jurock Says:

    I dunno, if the mortgage rates go down I don’t
    think that the market will be falling very far.
    I think you doom and gloomers are still a little pr
    premature

  7. TheRoyston Says:

    Hey Ozzie – don’t worry about us “doom and gloomers” – we’re not the ones wrapped up in $700k, 40 year mortgages. I’m worried about the “real estate never goes downers” – they’re the ones going to be hurt in all this

  8. Dan Says:

    Love this quote from Callum, must be real estate speculator

    “I have heard about the coming real estate crash for 5 years now. It must be stuck in traffic.”

    Keep dreaming… !!

  9. philip Says:

    As this goes to writing of 24 October 2008, the Global Market Crisis is just beginning, and the ripple effects will definitely impact BC real estate, most strikingly in Vancouver. The average decent home in Vancouver tops 1 Million dollars. By the same time next year, 2009-the average price will be below 300K..By the time the Olympics reach town, the average Vancouver single family residence won’t fetch even 200K..and the bottom won’t stop there I’m afraid. Buyers will simply hold on to their hard earned savings and adopt a wait and see approach. It may be wise for this, as by 2010, there will be a firesale to be quite honest. It’s not a matter of if this will happen but when..and when is just around the corner as
    Supply will outstrip demand. No one is going to buy for a long time. For those who want to buy like myself, I am betting in 3 or 4 years. Best of luck to everyone in the Real Estate Game!


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