Feature Stories
To Buy Or Not To Buy?
By Jesse Spencer published Sep 1, 2009
That is the question. Here are some crucial things to bear in mind if you're looking for an answer
Yes, real-estate values have fallen in Vancouver since the economic meltdown last year, markedly in some neighbourhoods, but nothing like we’ve seen in many parts of the U.S. In California, for instance, people are flocking to seminars on how to acquire foreclosed property for peanuts; here, some well-priced homes are again attracting multiple offers and selling above asking price.
There are good reasons why prices for most types of local property are unlikely to go the Phoenix or Las Vegas route. In Dunbar, the part of town where we bought our house, the once-illicit basement suite has been effectively legalized to help assuage a rental shortage. Soon, to further ease the crunch—and, even more high-mindedly, to lower the city’s eco-footprint by increasing urban density—elected officials will grant us another batch of potential tenants by allowing us to put laneway housing where now there is only a garden shed. Developers typically pay $100,000 or so for enough land to build an apartment unit, but for us this patch will be delivered free of charge.
We further max out the value of our 50-foot lot by regularly engaging in home exchanges, and though we’re unlikely to go the Craigslist route of subletting the place every time we’re out of town for a few days, we may well help out Olympics organizers scrambling to find accommodation during the 2010 Games. Apparently, this public-spirited act could net us another 15 or 20 grand.
Meanwhile, the value of our place is further supported by far-sighted policies aimed at protecting food supplies, controlling greenhouse-gas emissions, and enhancing livability. Within 20 minutes of downtown there are large expanses of land that in any other city would have become housing tracts—thus forcing down the value of our place—but that in B.C. are restricted to cranberry fields under the Agricultural Land Reserve. And those fields would be only 15 minutes from downtown if we built freeways and bridges as eagerly as many cities do.
Vancouver is behaving in a rational and even laudatory way. At the same time, we’re ensuring that centrally located single-family houses will probably never again be affordable to mere wage earners. The only buyers will be the very wealthy, and people like us: homeowners willing to take advantage of what an economist would call a “densification premium” but I prefer to call a Fonzie scheme, in honour of the rough-edged yet carefully groomed sitcom character who provided added value to the Cunninghams by bunking above their garage.
Vancouver’s response to the challenges of sustainability is one of the reasons our real-estate values have not followed similarly expensive American markets into the toilet, and probably won’t. And one of the reasons why, if you’re thinking of buying, now might well be a good time.
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Good observation. What's striking is how quickly this turns around. In May, we wrote this:
For agents, the numbers are even more sobering. On the West Side, there are over 2,700 realtors; in December and January combined, a total of 382 properties sold. That’s a sale for one agent in seven, and a paycheque of zero for the rest. One of MacKay’s more successful colleagues admitted that he hasn’t sold a single property since September; another is now pouring espressos at a local coffee chain.
Less than a year later, signs of thaw...
