Local rock and roll legend Red Robinson was profiled in the Vancouver Sun this past week. And it wasn't his entertainment credentials or stories that were of interest. Instead, it was his views about Real Estate that caught our eye.
After 44 years on the North Shore, Robinson and his wife Carole, decided it was time to downsize. They sold their 4,000-square-foot home in Deep Cove and, rather than buy a new place, they opted to rent a 1,560-square-foot condo in Coal Harbour.
"We sold our place for over a million - I'm not going to go into the exact figure, but well over a million. And . . . it's tax-free! Now wouldn't I invest that, while I'm waiting to see whether the prices are going to go up or down?"
Robinson, you see, isn't being sucked into all the hype by the BC Real Estate Association, Canadian Real Estate Association, et al that 'now' is the time to buy.
And he is following the exact advice that we 'whisper' to every soul who will listen.
Our market is at the absolute pinnacle of it's bubble right now. When interest rates start going up (and they WILL go up), our market is going to crash in stupendous fashion.
So Robinson wonders, why buy now?
And with good reason. Property values are way out of balance.
Consider this this little gem.
Here is a house located on the west side of Vancouver, in Marpole. It is located at 541 W. 64th Ave (hattip to 'bestplaceonmeth' at RET).
What a dump! How much is this piece of crap on the market for?
$1.5 million dollars!
I'm not making this up. Here is the MLS listing. I'm going to also post an image of the listing for future reference (click on the image to enlarge)
How whacked is that?
Now let's compare that to a worldwide resort destination like Hawaii.
Two weeks ago, in Molokai, the Hawaiian estate of software mogul John David McAfee (of McAfee Virus Protection fame) was auctioned off.
The estate is 5.34 acres of oceanfront property, zone agricultural and equestrian, contains bridal and hiking trails throughout, and is a short distance to Papohaku Beach which is one of the longest white sand beaches in Hawaii.
The 4 bedroom home has a mastersuite that opens onto a large covered deck that faces the ocean, a huge walk in closet, a large jacuzzi in the master bath surrounded by black granite, a glass block shower, his and her sinks and an ocean view.
Bedrooms 2 and 3 have 18x20 foot walk-in closets and full bathrooms. Bedroom 2 has a whirlpool bathtub and a seperate shower. Bedroom 3 has a loft area. Both bedrooms open up to the large covered deck which faces the ocean. Bedroom 4 is slightly smaller with a full bathroom and its own deck.
Here are a couple of pictures. As always, click on the image to enlarge.
You can see the brochure advertising this auction here.
And what did this palatial oasis go for?
You guessed it! $1.5 million dollars (you can see a reference to the auction result on page 2 of this New York Times story).
Now let me ask you a question.
If you had $1.5 million dollars to spend on a house, would you really buy that piece of shite in Marpole instead of something like this Molokai estate?
The answer is not only obvious, but it seems profoundly laughable to even be asking it.
The people who are buying real estate in Vancouver this year, even those who are 'only' paying half a million dollars for a house, will very shortly be wondering how they could have been so shortsighted to consider... and then act on... their decision to buy in this market.
They will regret not doing exactly what Red Robinson is doing; waiting it out.
The popping of this bubble is going to be nothing short of stunningly spectacular.
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