REAL ESTATE: Tales From The Periphery – Victoria and Kamloops
“In the southern interior around Kamloops and Clearwater on holidays, and can’t believe how many people want to cash out right now after buying in last 2-6 years. Nothing selling. Prices softening already and only sharply discounted properties moving. Family and friends I have been telling to hang on and let rent cover payments for at least five more years, which they can do fortunately…no point selling at a loss. But many ppl want or need the “cash” now. Five years of reno’s, renters…and ending up in the negative after transaction costs. Not even having a good time with my told-ya-so’s. So much glut and lack of interest in buying, but this time no more “yeah but it will turn around”…more a sense that “this time it is different” and not in the good sense. True stories from the front lines. CRAZY how much talk there is of RE – everyone is getting in or mostly out…thought it was just fucked up Vancouver’s only conversation point…but, nope, seems everyone else has bought into it across BC.”
– ArthurFonzarelli at VCI 6 Jul 2012 11:55am
COMMENT: Our family has some recreational property and owned it since early 1970’s. For years people kept it simple, small cabins, ie 1000 sq ft tops, very bare bones ….. or bring a 5th wheel or motor home. However, in the last 10 years or so, a new wave of buyers came in…likely boomers…bought properties that sat for years and built literal designer homes on them….with all amenities. They are easily invested in the $200,000 range. I thought it was stupid , would come back to haunt them ,and it will. These areas are very nice for about 2 months of the summer…and some winter activities, but can be depressing in the off -season as many of the locals tend to “snowbird”. $200,000 + is a lot of equity sitting around for something being used maybe 6 months of the year. Buying it used to be affordable…but its now far cheaper to rent.
Unfortunately these types of situations are in massive proportions throughout BC, as people that bought and built recently will ultimately lose big time. I have also noted that younger generations are less inclined to go to cabins….more urban interests.
“I have a friend that just bought a tear down in Oak Bay last month and is reno’ing it to the tune of 200k. He was bragging his ass off on Facebook like he’d finally achieved membership in some exclusive club. His wife works for the government and he dabbles in a bunch of different things, but they’re by no means wealthy.
He’s going to be f’d to high heaven in a couple of years…..and the club isn’t going to be very exclusive at that point.”
– Anonymous at VCI 6 Jul 2012 2:04pm
COMMENT: I am assuming that via Oak Bay this person paid a large sum, given it is often deemed a more exclusive area. It is quite likely they watched what we call the “Housing Porn” networks and shows….where people do expensive renovations on homes and try to re-sell “flip” them. This person noted above likely bought at peak price, and the value has almost certainly dropped. Then he has the cost of the renovation. Given these numbers he could very well be $300,000 to $400,000 in the hole, especially as it is very likely his neighbours will be selling as well, again making it a buyers market. Sounds like another disaster in the making.
“Came back from Victoria last weekend visiting the parents in the Fairfield area (near Gonzales Bay). Could not get over how many homes were on the market. This has not been a neighbourhood that has had an overly high turnover of ownership (even the parents noticed as they don’t drive but walk everywhere). Many of them were also waterfront properties. Drove through the Uplands bit – LOTS of homes on the water side for sale – presumably in the millions+ category. Can’t imagine who will be snatching all these homes up.
Walked through the Bay Center(?) mall downtown in the middle of the afternoon – it wasn’t anywhere close to being busy. Actually, now that I think back, there really wasn’t one shop I went into where I had to wait in line to pay or would be considered busy. How do people make any money in Victoria? There’s nothing there but small businesses that close at 6pm. Yet the average home in Fairfield area is around $700-$900K. Truly mind boggling.”
– unimpressed at VCI 6 Jul 2012 at 3:01pm
COMMENT: Sounds like a generational thing, via low turnover. A core demographic group that is aging or dying, and all of a sudden the desire to sell via the way the logistics line up.Of course, this floods the market and it becomes a buyers market.
Retail sales? Doesn’t look good. Obviously credit has dried up.
Add to this Hi Ferry Fares……the local Island economy’s future looks bad.