How to buy

Jake is a self-confessed moister, with a wife and a hormonal tug to housing. The trouble is, they live in Vancouver – where everyone earns less and pays more. Sharing a city with people who can’t drive in snow comes with a price.

“We’re first time buyers and went into the market looking for a townhouse in Burnaby and New Westminster this year,” he says. “At the beginning, we thought we could afford something. Unfortunately we were outbid twice by big margins in 10+ offers wars. Once these properties are sold at such high prices, the surrounding areas follow similar price points and would be difficult to come back down. So now, I can’t even become a greater fool even if I wanted to.

“The frustration and desperation were not something I could imagine before getting into the market. You would think the Vancouver market had finally slowed down in 2016, but it has come back much stronger. I consider my family doing okay financially, with decent income and sizeable investment portfolio and can afford travels a few times a year. Perhaps you could change the topic of a blog post to how to become a greater fool, for those who “need to” or want to become a homeowner in heated cities.”

Sure, Jake. A primer on suicidal investing in just a moment. First, we need a reality check. The Vancouver/Lower Mainland/BC market is not on fire. It is unhealthy, unbalanced, confused and seriously skewed by grifters like HOME – the BC Home Ownership and Equity Partnership. That’s the free-money program which gifts moisters up to $37,500 interest and payment-free for five years so they can mortgage themselves into oblivion.

And guess what happens when government gives away down payments? You bet. Sales and prices go up, making it harder for people to buy – which is exactly the impact experienced in the Van condo market. Politicians do it again. Never fails.

But look at the numbers being reported for the market overall. This is the latest from the BC realtors:

The British Columbia Real Estate Association (BCREA) reports that a total of 9,865 residential unit sales were recorded by the Multiple Listing Service® (MLS®) in April, down 23.9% from the same period last year. Total sales dollar volume was $7.19 billion, down 25.4% from April 2016. The average MLS® residential price in the province was $728,955, a 2% decrease from the same period last year.

So far this year, dollar volumes are lower by 32% across BC, sales have fallen 25% and the average price plopped over 9%, or more than $90,000. Granted, sales were higher in Vancouver (15%) compared to March, but cratered (-26%) from the same time last year. If listings in YVR were increasing at the same pace as in the GTA (36%), the price drop would be epic. But there are actually 17% fewer homes for sale than a year ago, dropping active listings to a 20-year low. Yes, by holding back product from the marketplace Vancouver real estate owners are restricting supply and firming prices. Just like OPEC. Or the milk marketing board. Or a drug cartel.

Those who argue the local market never paused are living in a house-porn world populated by the fetching moisters who star in Love it or List It Vancouver, plus rockstar realtors who make Donald Trump sound credible. Yes, condos are going up. Yup, the province is to blame. No, the market fundamentals are not healed and, yes, once listings start to pace those in the GTA, there’s no bottom.

But, hey Jake, if you want to dive in now and circle the drain with the rest of your little friends, go ahead. There are but three things to remember:

• Get pre-approved for a mortgage before you start, but avoid one of the responsible lenders like RBC. Instead seek out mortgage brokers who can place your loan with Home Capital or, better, Vancity. They’ve got a mortgage for everything – laneway houses, properties bought in partnership with your masseuse, loans you don’t really have to pay back and even ways to get real estate without any actual money. How cool is that?
• Second, offer whatever you have to in order to buy a house. Anything. Like, who cares? At 2.36% an extra $100,000 costs you a measly $432 more a month. Expressed in moister currency, that’s only 18 Grande Cinnamon Dolce Lattes a week at a Starbucks on Robson Street. Cheap, compared to the pride of owning a $650,000, high-overhead, 100%- leveraged condo.
• Finally, never offer conditions of any kind when buying. No financing, No home inspection. And take a maximum of 11 minutes to view the place before declaring you’ll have an offer later in the day. Be serious. A player. Make-my-day. Total intimidation of any other pathetic bidders. Learn to swagger. Get a codpiece. And bring back a certified cheque for $100,000. Make sure mom has that much left on her LOC. Or ask Vancity.

You may think buying real estate is hard, Jake. It’s not. Just do it. Some crazed lender will give you the money and your parents will be happy no matter what crappy deal you sign. After all, you’re special.

Buying is easy. Selling isn’t. You’ll be asking me about that soon enough.