Monday, August 3, 2009

A Yang for your Ying

According to the philosophy, yin and yang are complementary opposites within a greater whole. Everything has both yin and yang aspects, which constantly interact, never existing in absolute stasis.

If you come to this blog on a daily basis, then allow me to provide a ying for your yang: a bullish retort to my bearish sentiments.

I stumbled across this blog appropriately titled "Van Housing Bull".

The author hopes his blog will become "the antidote to some of the more popular bear blogs out there."

Our newly publishing bull would like to explain the hard, cold reality of the "Invisible Hand of Income Inequality" to you.

Why are Vancouver's real estate prices so high?

It's simple: Rich people have money, you don't. Vancouver is a great place to live, so rich people from all over the world will pay to live here here.

Our Bull blogger opines that a recent Dunbar area home (recently listed and sold for $949,000), could easily have been sold to a couple who were both high income earners of $90,000 per annum each.

This dual family income of $180,000 per year would have necessitated an downpayment of $195,000 - feasible if, as the bull contends, it came "from inheritance, from an asset sale, from the sale of a business, or maybe it was just saved earnings! Is it that hard to imagine our hypothetical couple saving $50,000 to $100,000 each – maybe because they’re too busy working to spend their earnings – and then topping it off with a gift from both sides of the family towards their first purchase? Or what if these people are just stinking rich or come from very well-off families? Why is this so hard to believe? Maybe bears aren’t good at empathizing with bull."

Our 'bull' goes on to list 5 detailed problems with the bear arguments about Vancouver real estate and then summarizes that, "Bears are complaining about high prices because they’re too high. But too high for whom? They don’t think the prices are worth it. But does it compute that it might be the right price for other buyers? How can one justify buying a $250,000 car? Because it’s worth it to them... The bottom line is that the reason why prices are so 'high' is because there is, amongst the buying public, a huge and large income inequality. It’s that simple."

So there you have it from a bull's mouth. Prices aren't high because they are out of whack. They are high because people with money want to live here and will pay what it takes. Stop whining and suck it up, losers!


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