It’s different in Vancouver says a reader in response to Vancouver Real Estate Bubble in Pictures; Presenting the $1,050,000 “Livable” House .
“Fortunate Fool” writes …
Vancouver is a different world. To truly appreciate it, let me give you an example. In a normal world, if you had bought a house in April 2004 for $6 million, how much would you put it for sale today? Hard to say right? Let say your house value increased with an inflation at 2% per year, that would be roughly $6.9 million. In the current economic situation, you would be happy to get that money back.
In Vancouver, it’s different. If you bought at that price in 2004, you would put it back on the market in 2010 for… $17.9 million! A compounded return of 20% a year. But there is a problem, it turns out that you couldn’t sell the property. So in that case, what would you do? You would decrease the price, right?
Wrong! Remember, you are in Vancouver, and it’s different there. No, you would put the property back on the market for… $31.9 million! (a 78% increase from last year’s price or an expected annual compounded rate of return of 27%).
Repeat after me. No, Vancouver is not in a bubble.
Fortunate Fool backs up his claim with this article from the Vancouver Sun: Vancouver mansion for sale: $31.9 million
A house has just gone on the market at 3390 The Crescent in Shaughnessy for $31.9 million. That may sound like a lot of money, but it isn’t the highest listing price in Metro Vancouver — a house at 2190 Camelot in West Vancouver is for sale at $39.9 million. And has been, for several months.
High-end homes like this often take a while to sell, because once you get into the tens of millions, there aren’t many buyers. In fact, the $31.9-million Shaughnessy home was for sale last year for $17.9 million, but didn’t sell.
Property records list the owners as K. Fan Hiu and H.F. Chi, who purchased the home in April 2004 for $6 million. Ted Wang of Royal Pacific Realty said the couple have decided to downsize to an apartment.
Wang said the owners decided to raise the listing price after looking at the high prices mansions are commanding in Shaughnessy. He noted that a house he sold last year on Angus Drive for $5.7 million was recently assessed at $9 million.
It’s Different in Bizarro World
The owners upped their price from $17.9 million (offered just last year) to $31.9 million, an increase of 78%, because they want to “downsize to an apartment“.
This of course makes perfect sense because “It’s different in Bizarro World” just as it is in Vancouver.
Inquiring minds may be interested in the “Complete History of Bizarro World” from Superman to Seinfeld to Saturday Night Live.
We can safely add Vancouver to the list.
Mike “Mish” Shedlock
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