Em,
I wanted to give everyone an opportunity to read our exchange so I made my response a post.
Em’s reply to a recent post,
As a fellow Vancouverite I felt obliged to answer. I can assure you that Vancouver is no Pennsylvania. I have lived in Ohio and I understand the sticker shock when people look at the real estate value in Vancouver.
I have worked in the Real Estate Industry in Vancouver for over 5 years now and I can tell you that the RE price is not governed by local wages but foreign economies like China and Japan. Almost all the investments in Downtown in exclusively from Hong Kong and China so I would be worried if they are not doing well.
The more appropriate and just comparison for Vanc’s RE would be San Francisco market. I can see a lot of similarities with status of premium tourist destination. Also Vancouver has been in the top 3 best livable city in UN’s list for like 7 years now. The highest ranked US city is Honolulu at 25 !!!
I agree that the price have come down but there is lot of money on the sidelines waiting to buy any dip unlike the forced selling we are seeing in the US.
Everyone is looking for a crash after the 2010 Olympics but I don’t think that is going to happen. With such strong inward immigration, I can only see the prices creeping higher but not down.
In some ways I hope we’re both right as I do want prices to correct, not collapse. I think most everybody who lives in Vancouver will agree that the price of real estate is a bit out of control and affordable housing is a major concern. While I never expected the price to drop anywhere near what it was in PA and it shouldn’t for very good obvious reasons, it still should fall quite a bit relative to how much it’s risen .
I watched a slide-show about the U.s. real estate boom and how it has grown out of control relative to wages but I can’t seem to locate it. It was charting salaries and home prices over the past 75 years showing how they always correct back to a normal price and that in the past decade real estate has gotten way ahead of itself.
I for one am in the camp that the US still has a long way to go to work off the real estate excesses and sooner or later that’s going to creep it’s way into the Vancouver housing market. I really don’t like to guess how much further it has to go, but at least another 25-40% over the next few years isn’t too much to ask.
Two years ago I was at a Christmas dinner with a friend who was a mortgage broker. At my table was a high level exec from a major Canadian bank and he was telling us about a conference he had attended. The key note speaker was a researcher who studies real estate and the Olympics, and the effects that these games have on real estate before and after they have gone.
From the speaker it had been determined in most cases there is a lull in the real estate activity a few years leading up to the games, and then right after the Olympics are over, real estate surges because the world has just gotten a good look at that city, causing demand to skyrocket. In addition, the city is probably the cleanest it’s ever been and many improvements are made to make the city more appealing than it normally is.
At the time I heard this story the economy wasn’t an issue and many of the mortgage brokers were salivating then at future prospects, so it will be interesting to see how a worldwide slowdown will effect Vancouver’s “coming out” party to the world in 2010. I just hope I don’t start hearing about how “it will be different this time” and Vancouver will survive this slowdown unaffected, because then we doomed.
I hope you had a great holidays Em, always glad to have your feedback.
