the thirties grind

get up, go to work, raise kids, pay bills, sleep. repeat.

East Vancouver Real Estate: is it time to take the money and run??

It feels like there are more and more homes for sale in East Vancouver these days…and that these homes are fetching prices that, even six months ago, would have seemed absurd.

For example, a home across the street from me sold for around $1 million at the end of 2014.  It was a larger house, on a standard lot, but was facing busy King Edward street.  Fast forward a few months inferior properties in the same neighbourhood are being listed for $1.3 million and over.

A local realtor recently posted about a home that was sold by her firm twice in a one year period…with an $100K profit for the owners on the second sale!!

The sales-to-listing ratio for all detached homes in East Vancouver was at 59% in March 2015 versus 35% in October 2014. This resulted in $120,000 (over 14%) increase in sales price in less than 6 months. – Ashley Smith (ashleysmith.ca)

So…if you’re sitting on an East Vancouver property…is it time to take the money and run? Or would one be more wise to sit tight and watch their property value keep increasing over time. God isn’t making any more land, people and we have mountains to the north, agriculture and America to the south, ocean to the west and more agriculture to the east.

East-Vancouver-Real-Estate-Market-Stats-2014-vs-2015

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10 thoughts on “East Vancouver Real Estate: is it time to take the money and run??

  1. Julian on said:

    Serious question: Has anyone investigated who is driving the prices in Vancouver? Is it Chinese Nationals, locals (including Chinese / Candian Nationals), both, or other? I’d be interested to know. The same price surges are being observed in Sudney and Melbourne (and parts of the U.S.). Is this sustainable or the ‘irrational exuberance’ often noted with booms (before they go bust)? And if it is the latter, how long does this final phase typically last?

    • TheThirtiesGrind on said:

      I think the knowledge is there…but there is hesitancy around bringing this to the public for fear of alienating developers (who the local government is very tied to) and appearing racist.

      • Julian on said:

        It’s a pity that we can’t have a more mature discussion about this – although I am aware that this can quickly become a proxy / excuse for racist comments. The throwaway line is that it’s all down to super wealthy Chines Nationals. And while I don’t doubt this is contributing, is it really that simple? I don’t know, but would like to. And regardless of who is responsible for pushing the prices up in many cities (such as Vancouver), the results are the same (good and bad). Anyway, I think it’s worthy of some nuanced and mature discussion. But perhaps I’m expecting a little too much these days…

        • TheThirtiesGrind on said:

          I think the mature conversation will happen when citizens actually demand answers instead of remaining apathetic…and that, in actuality, may be expecting too much these days in this city.

  2. Well, $120k before the realtor’s fees. Speaking of profit, they’re the ones who’re really raking it in, particularly when selling the same home twice in a year.

  3. Thanks for the mention Melissa 🙂

    This is a difficult discussion. Of course, I’m not involved in/privy to all real estate transactions in the city, and I know (through talking to other realtors) that there are certainly more off-shore investor-type buyers than I would honestly suggest through my personal experience. But that brings me to my point… there are a lot of people *in* Vancouver, who want to purchase property here.

    It gets complicated. For example, I met with some buyers yesterday who are looking for a property… the husband and son are here, and the wife is in China. They are making decisions while she is away (sending video and photos – technology definitely plays an interesting role in this too). The son was educated here, and now lives and works in Richmond full-time (approx. 25 years old). The husband and wife are here part-time, although they are planning to increase their stays here. I cannot speak to their residency or immigration status, as I don’t know. This said, this is what I see the most – people who are immigrating here, and sometimes people who are part-time residents. I rarely see “foreign, off-shore buyers” who have zero interest in the city besides investment. (However, I do believe this is more prevalent in the larger scale pre-sale condo market.)

    The interesting thing about the above example is that these buyers were not even looking in Vancouver – they were looking at a property I have listed in Fraser Heights (North Surrey), but are predominantly interested in North Van. I guess my point is that it’s not *just* Vancouver that brings buyers, including Mainland Chinese (I mention this because it’s a demographic that people are so focused on).

    People come from all over though… I recently sold a 2 year old home in Point Grey (standard 33″ lot, basement suite, laneway house) to a family who moved here from Ontario… Again – there’s a variety of people who want to call Vancouver home. People are coming from all over.

    The seller of the East Vancouver home mentioned in my Case Study was of Vietnamese origin (been in Canada for some time) – a single mom with 3 kids… and the Buyer was Chinese, but a long-time Canadian herself (also a single woman, interestingly enough).

    What I find the most interesting is how people assume that buyers purchasing these now million dollar homes must have money. Of course, they probably have reasonable down payments, and qualify for a mortgage, but I’m seeing more and more people looking at alternative ways to afford their properties. Not only are people renting out their basement suites, but a lot of people are renting out rooms in the main residence (ie. Air BnB) – and their banking in some really good monthly incomes in order to comfortably afford their properties. I would argue many “typical” Canadian-born home owners would be less inclined to do this, and it’s simply because their expectation of what “home” looks like, and their vision of the nuclear family, limit their imagination around “affordable housing”.

    I recently listed and sold a small, renovated bungalow on East 22nd. It was crazy. Sold for higher than anything else like it in the area (on a busy road, to boot)… but it had a really nice laneway house in the back. Ultimately, the buyers were a young family who would live in the 2 bedroom main suite, and would keep the tenants in the basement, and the laneway. BUT – there was huge interest from buyers (including a couple REALTORS®) who were considering living in either the basement suite (least amount of income) or the laneway house, and would rent out the main house for more income. A great approach to get into the market, while minimizing costs.

    As home ownership affordability continues to get more out of reach for many people, I’m sure this dialogue will get louder and louder. Melissa’s point about our naturally limited landscape is a critical one. But of course, the factors affecting us are becoming more intricate – the market is becoming more global (not just here), things are dependent on multiple economies and politics/policies, our dollar fluctuations, interest rate changes, etc.

    Having traveled a bit now to a few major international cities (Hong Kong, New York, Dubai), it is interesting to note that when North Americans move around to new places, they expect to be welcomed (they even give themselves a different name, “ex-pats”). I imagine the movement of people to these cities certainly impacts the housing markets. Although we have to be aware of affordability, and we should measure and plan for major population changes, I think not participating in our market (should one wish to – of course renting is a welcomed choice for a lot of people now) and waiting for things to change in regards to policy, etc. is time not well spent. This said, when the market is as crazy as it is – it’s really not the best time to buy (multiple offers definitely create inflated sales prices, and due diligence is tough – most people buying their largest investment would want to perform a home inspection).

    In my opinion, the most important local policy discussion (around affordability) should be one around housing diversity and density. Also, things like affordable child-care options are systemic issues that should be top of mind.

    Anyway, to the point regarding us REALTORS® (I have to give us at least a little shout-out)… this market is tough! Yes – it’s great to have a good listing with cooperative sellers who take advice and are willing to take on recommended strategies for optimum results. In this scenario, I do know that I’ll sell the property and ultimately get paid. Where we really earn our keep in this environment is to get the best price for our clients (whether buyers or sellers), with the least amount of hassle, and getting the best terms – this may seem simple enough in this market, but trust me, not all REALTORS® are created equal… a good plan makes a huge difference. Back to the tough stuff… inventory is LOW, and buyers really want to buy. Taking on buyer clients right now is quite a bit of extra work, to be honest. I know multiple (really good) top producing agents who are writing offer after offer after offer – it’s hard. One guy recently wrote 34 offers in 3 weeks, and only secured 2 deals (keep in mind there is a lot of coordination that comes with multiple offers – often doing financing, inspection, oil tank, and tenancy due-diligence pre-offer).

    Of course, there are ways to avoid all this competition – but I only go through this secret with my clients 😉

    On the surface, people may think our business is easy – especially in a good market. The truth is, there’s a lot more on the line, and it’s a lot of work. Another factor, when the market is hot like this a ton of new people enter the business, so the competition goes way up. But – c’est la vie. We all have an opportunity to prove ourselves, and I think those of us who do a good job last the test of time for a reason. Also, when times are harder and the market is slow, sellers require our services the most (so, a good market is good, but a tough market is actually good too).

    Thanks for reading! And thanks again for the shout-out Melissa 🙂

    Ashley

  4. Jules on said:

    If you’re noticing it, you are probably too late….Calgary has bombed in a big way and the rest of Canada is following suit. See if you can sell without a realtor to give the new buyer a bit of a discount…

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