Friday, October 12, 2007

Why wouldn't you leave?

I had a beer with one of my best friends last night. His sister lives in Regina. He's a contractor. This market has treated him well. He's responsible, honest, ethical and hasn't taken advantage of anyone over the last two years that he's been self employed.

And he's leaving. And I can't say I blame him. Sure he's married, but he's not uprooting kids and his wife will have better teaching opportunities. Not that it will matter.

They have about $300K in equity in their Gordon Head house. They bought first in 2002. Took out a 14 year mortgage and paid it down as fast as they could. Bought and sold again in 2006.

Best part for them? When they buy an above average house in a nice neighbourhood in Regina they will be mortgage free. And they'll feel good about having the 2-3 kids they want but don't think they can afford here. And they will be able to have one parent at home until the kids start school.

Sure the winters are cold. But the sister who grew up here and now lives there with her four kids and husband love their lifestyle. When they come here to visit, they don't talk about how much they miss Victoria, they talk about how great Regina is for their family.

And so my friend and his wife will leave. And I can't say I don't understand. Early thirties and mortgage free. I have to wonder why more of Victoria's young workers aren't leaving? Maybe they are.

Check out this article from the TC today. Apparently markets are cooling. Apparently builders aren't getting much for their investments here. But apparently anyone who has owned a home in Victoria, for 5 years responsibly, has a pretty good opportunity to move to a more family friendly place and live with little to nothing in the way of a mortgage.

I should add that wages are pretty similar between Victoria and Regina. I should know. I've been looking very intently.

31 comments:

FarFromHome said...

My husband would probably sound like Al Pacino in The Godfather right now - the whole "every time I leave they keep sucking me back in". The poor man, a misplaced Toronto boy who is indulging me by coming to my hometown.
I am really so happy to be home after living in Hong Kong for the past 4 years and even though my mind says it's stupid to buy here my heart is here. I have a little one and having one set of grandparents, old friends and family is why I am here now instead of making kajillions on real estate in HKG.
I wish I could talk myself into going to Toronto or something where we could afford a freakin palace compared to here but I dont want to be there, wishing I could live here.
Kudo's to anyone who can uproot and start fresh, it makes financial sense to go anywhere else in Canada than the westcoast at this point in time.
So we sit and wait, rent a million dollar beach shack on the water for a fraction of what owning would be and hope like hell we catch a break on the buying end.
The heart wins in this case.

Village said...

Being born here, most of my ties are here same for the wife. I'd leave, but it would be reluctantly. Stability is what I'm looking for. A place I can buy, put down roots, raise kids, kick them out and then die. All on the same plot of land. =)

Anonymous said...

I would go back to Toronto tomorrow. We lived in a great area in downtown Toronto and everyone knew each other. Here in South Oak Bay I have not met a soul. In Toronto everyone worked hard and played hard. It would be so nice to buy great clothes without having to go to Vancouver. Be close to New York. The Opera. The Theatre. Amazing restaurants.

I lived in Paris for 15 years and it was heaven. The culture was to die for. There is nothing for me in Victoria. It is getting better though in the 5 years that we have been here.

Anonymous said...

Hi all - This is my first post, but I have been lurking for a few months now. I have learned a lot from you all - thanks!

We are currently living overseas but hoping to move back to Victoria soon. It was a major shock to see what happened to house prices since the last time I looked a few years ago. We would like to buy a house in Victoria, but no way would we buy right now.

For me, the main reason for wanting to be in Victoria is family. I have been away a long time, and have been wanting to come back since my daughter was born 5 years ago. I want her to get to know her Canadian family, grow up with her cousins. When I was younger I would have left for Regina (or wherever) in a heartbeat, given the current circumstances. But right now I want to be close to my family, even if it costs us financially. Life is too short.

Off topic, I was hoping someone could help me with something. My 75 year old mother, who does not have a lot of money, wants to invest what she does have in US$. She thinks now is the time to buy since the CAN$ is relatively strong. Apparently her financial advisor told her "that's what I would do". To me this seems like a really bad idea, from what I understand the US$ is in a steep fall and the financial turmoil south of the border will be getting worse for quite a while. But I am economically ignorant (getting better thanks to this blog) and cannot explain to her satisfaction why she should not do this. Can anyone give me a few ideas about what to tell her? Or if you think I am wrong, why it is a good time to buy US$?

Sorry for the long post, and thanks.

Anonymous said...

I'M disillusioned too. It's not just the price of property. But that's the main cause. The dreary weather is getting to me too.

We moved from out East where we owned, mortgage-free, a palace compared to the junk that's selling here. So, now we rent and hope for a decent (30-40%) correction in RE......4 years later.

I've had it with people looking down on me and feeling sorry for me because we rent and don't own. In fact, even with today's nasty prices, we can pay cash, but choose not to. So there!

All this week, I've been thinking:
God must be telling me something. RE prices are down in Florida, Arizona and other USA sun-belts. Our Canadian dollar is KING.

So, isn't this the time to get the heck out of here and move South? Doesn't it make sense to rent something even smaller here, and buy a nice house where we can live like snowbirds?

If my kids were not well-established in their careers here, and unwilling to leave, I'd be LONG gone.

I completely back ALL the young Victorians who are rushing out of here in droves. What the heck, I know winters out East are hell, unless you ski, skate, etc.

But when I lived there, I was quite content to run away for an annual vacation during the bad times. It made the rest of the year very tolerable.

I can't say the same for here. Where do you run for 10 months?

So much for moving to the Hawaii of Canada, good ole Victoria. It is depressing.They say that the market changes when psychology of buyers/sellers changes. If so, we're on the long and winding slope DOWN. Sign me up.....

Anonymous said...

Anon at 9:14pm.

You might want to post your question over at Mohican's blog 'Financial Planning and Personal Sanity'.

Over on this site (as on this site, of course) there are some finance people who may be able to help answer your question. Only thing is he doesn't allow anon posts.

Here is the link:

http://langley-financial-planning.blogspot.com/

S2

Anonymous said...

Tell her buy gold - definately a lot safer than the US$ right now. If the US fed keep trying to pump the stock market by dropping the rates they will continue to destroy the US$ against other currencies. The US has a tough few years ahead. Canada will feel some grief too.

Anonymous said...

Yes, we would leave.

We talk about it once in a while but things are so good for us here (minus having to pay a million for an ex-grow op with mold and asbestos).

We both have good jobs and we can afford a house here but choose not to buy yet.

I don't drive so waiting for a bus in 40 below weather with a 2 1/2 year old isn't appealing and there is so much for a family to do in Victoria.

We went and visited the grandparents in their small interior town and while beautiful and affordable there was very little for kids unless you are the outdoorsy type and we aren't.

S2

Anonymous said...

The price of property here is just not worth it. There are really only a few nice neighbourhoods and the rest are pretty scary. Downtown is scary.

One person described Victoria as the end of the line for many people ... that is why there are so many "low lifes" here.

I am sorry but Victoria is over-rated. The lacks a certain sophistication. The prices just don't warrant what you get.

vg said...

We would only do it if our kids moved away as kids will do like we did as we grew up,but we would never go to a colder climate,more like up island where prices are more reasonable.

Victoria's prices do not justify what we get,we dont get what Vancouver gets and we are still paying 60% of gross income and that is totally stupid.

We will give it to the Olympics or so and if prices havent corrected to something realistic then we will have to reconsider our options,in the meantime invest, invest, invest, til the boom is clearly over and the hot money leaves Canada. It's all about the US dollar downward spiral and I don't think the so called analysts have any idea what can happen once we get too far ahead of the US currency,it could in then end overvalue us and be too expensive for international investment at some point. I am preparing for some sort of US policy change to strengthen the US dollar but who knows when that kicks in,when it does you can bet the Canadian buck and gold will take a kicking in a hurry.

Anonymous said...

I must say I was downtown today (it has been long time) with my children and I was disgusted with the street youth. They wander in packs. They look mean and act mean. There were so many packs of these kids. Life on the street seems to be a constant party for these kids.

They were around the harbour, they were around the Bay centre.

If I were a tourist would I come back. Never!!

Anyone who thinks this city is going to become the nice place it "once" was is out of their mind.

I am not back in my little bubble Oak Bay.

Anonymous said...

I meant to say I am now back in my little bubble Oak Bay.

I have lived in big cities for many years. Victoria is the smallest city I have lived in and I never never seen such a concentration of street people.

Real Estate - Aint worth it.

Anonymous said...

we have only been in Victoria a few years and I too find it both over-priced and over-rated. We too are sitting on cash, but think purchasing here is such a waste of money - a fixer for $800k!!! But we are totally sick of renting. I do think that a correction is in the works in Victoria - but it is hard to tell how much prices will actually come down. There is way to much junk in this market and even with a price drop one of the few better properties may not turn up. I would not tell ANYONE to move here - the weather is depressing all winter, few decent jobs, and overpriced crappy houses!

Anonymous said...

I love it how you said $800 k fixer-upper.

We just saw a house in Cordova Bay $820,000. It needed at least $300 worth of work to make it liveable. That would be minimum. Then you have the most expensive house by a long shot on the street.

I cannot believe the state of most of these houses. I have seen homes in the Uplands selling for over a million and I could not believe that people were actually living in them. Even in my student days I could not live in such squalor.

I just don't know what to think or what to do anymore.

Anonymous said...

Anon 5:53,

You are right there is so much junk. It is not a city where most of the homes are nice to spectacular and therefore expensive.

I would say 80 per cent of the homes are crap. Either badly built in the 60s 70s and 80s or boxes built in the 50s. Most have never been renovated. In fact renovations only started about 10 years ago.

There are some lovely homes in Oak Bay but many are toilets inside. Uplands is so overpriced it is not funny and most people tear down the ugly existing house and build. Many of them are so dated and neglected inside hat is all you can do.

Lets see - Fairfield has nice houses. Rockland has too many rooming houses that you are nervous if your kids want to walk around as there are too many low lifes.

Broadmead has big boxes with no character and will probably not age well and are starting to look dated already. Many were poorly built. 10 mile point has some amazing houses but they are sooo expensive. There are also many over priced dumps.

You buy the over-priced land and to build and it is about $225 per sq. ft. due to labour shortage and commodities.

There is so little choice.

homewardbound said...

I'm anon from Oct 12 9:14 p.m.

Thanks anon Oct 12 9:25

S2 thanks for the link - I posted over there but no response (yet)

vg - you said "I am preparing for some sort of US policy change to strengthen the US dollar but who knows when that kicks in,when it does you can bet the Canadian buck and gold will take a kicking in a hurry." What do you think about the US$ long term? My mom is not the type to watch it closely enough to time anything.

Also, sorry to be off topic again, but does anyone sense any changes happening with regard to inventory, houses sitting on the market longer, etc? I still have high hopes for this fall being the start of a definite downturn in the market. I would love to be able to take a drive through Victoria and count "For Sale" signs ...

vg said...

"What do you think about the US$ long term? My mom is not the type to watch it closely enough to time anything."


homeward,

I am no currency expert by any means and there are so many different opinions out there on where the Canadian/US dollars are going I can't keep track. I can say one thing I have learned the most the past 10 years is when the herd says something is happening for sure,be very cautious and expect the unexpected,maybe not right away but eventually cause nothing is a for sure.

vg said...

Chilliwack home sales cooling off bigtime too. Funny how the Victoria media buried the 25% sales drop eh ? First volume then prices,its not "if" but "when".

http://tinyurl.com/3df6ue

vg said...

Has anyone seen the new show Please Buy My House on the TLC channel ? Talk about pathetic but eye opening at the same time. Several cases of people who were led to believe the markets were so hot that they bought a second home without selling the first home and no subject to's. Unreal,we are supposed to feel sorry for the stupid and misinformed but these were not uneducated people we are talking about here who got scammed by a mortgage broker,they made major financial decisions based on hype by the media and the agents.

Just a glimpse of whats coming here cause there is no way a 2 bed 1 bath house in Victoria is worth $500,000 when for roughly half the price you can buy a place that is 3 times the house in very nice areas of the US,the insanity can't last here much longer.

And another article how Canadian Natural Resources will cancel $20 Billion in contracts if the Alberta government goes ahead with the new tax. It is going to get ugly over the next six months.

renter said...

i just had friends from toronto come stay with me for 2 days. they spent 3 days in vancouver before coming to victoria. both of them couldn't believe how dirty/run down vancouver seemed, and they thought that victoria was fantastic by comparison. i live right downtown in a rented apartment and they couldn't get over how walkable the city is and how handy you are to everything downtown. these are people in their late 30s. i think that, to a lot of people, while downtown can certainly have its bad side, it is also a great part of town and isn't as bad as it's made out to be. i'm not trying to deny that there are homelessness and drug problems downtown, but not everyone turns a blind eye to it and stays in their "oak bay bubble." if we were all to do that, then what would stop victoria from being another one of those awful US cities where downtown cores have been abandoned in favour of anonymous suburban sprawl? to me, that's really depressing.

Anonymous said...

Renter,

I hate living in a bubble and am not turning a blind eye but when I take my young children downtown and they see people shooting up it is not a good thing. They were crying one day because some guy was freaking out. You don't have to be a parent to know that. I know parents who don't want their teenagers going downtown and I don't blame them. You don't take children around there and many of us have children and we don't like it.

I hate suburban sprawl having lived in downtown Toronto and central Paris would never consider moving to the "burbs". That is what I miss - a fun, exciting downtown. I have heard so many people here say they don't go downtown anymore. I think that is sad and scares me.

My toddler almost picked up a needle.

My friend was attacked by dogs a few months ago.

I was driving around Sidney and I saw For Sale signs - one after the other. Hmmm wonder what is happening.

Po Boy said...

Crazed Idea #12,367:

Fed up housing bloggers with equity band together to buy and build an eco friendly and affordable cluster home community on rural acreage just outside the city.
It would be a 55 minus housing co-op that would force whatever municipality it was in to put up or shut up on providing housing for families.

Anonymous said...

Don't move to Vegas...or...move to Vegas.

http://www.canada.com/vancouversun/news/story.html?id=1166cd1c-112e-4fba-a95b-7b7ee39163d6

S2

Penrose said...

We moved to victoria in 2001.
Couldn't wait to get there - bought a fabulous cottage in Gonzales, right by the beach - idyllic really!
We spent 3 years trying to meet people. We are outgoing, outdoorsy, friendly and 40ish.
We walked along Dallas Rd from Gonzales Bay to Cook St every day. We saw the same people every day out walking - in 3 years no one ever said hello - we saw them every day. I went to the YMCA 4 mornings a week to work out - tried to chat to people - no luck - no friends! We love to chat and meet people - we were so lonely! In the end we moved back to lovely Nelson BC where people are friendly, can't wait to meet you, the social calendar is always full and everyone says hi! Why did we move to Vic in the first place? Because houses were cheap in 2001(it seemed like a good move - doesn't everyone want to live in Victoria?) - Well, we turned around and sold our house for double what we paid for it in 2004. That was good. We were sad to leave Gonzales Bay but it reminded us that there's more to life than sand, sea and Murchies tea! So now we come to Victoria for vacations, and love it but we don't want to live there again.

happy4 said...

Penrose, you make a good point, I've heard from many (and experienced it myself) - Victoria is a tough shell to crack. That may not keep people away but it doesn't encourage some to stay.

I am in my late 30's, established with kids in school and good jobs, etc so we're not leaving, but I have been wondering what my kids will do as adults. I know so many 20-somethings with degrees and Masters who can't crack the $20/hr barrier, let alone pay off their huge student loans - none of them see a future that includes buying a home here.

If aging boomers are moving here to retire, and the young locals are moving away, then who will support the local economy in 15-20 years when those boomers are done work?

Perhaps the illicit drug industry will be best positioned here to afford homes and fund the addicted street youth. If I were in that line of work, it would look pretty lucrative to me!

Anonymous said...

this city would be toast without the U and the College - business needs those kids to take all the retail and low-paid service jobs. I told my daughter (at UVic) that she may as well live at home and attend UVic, as she probably will never have the opportunity to live here later in life. Just too pricey. Not that I would encourage her anyways - not enuf opportunities in most professions.

Regarding the earlier comment about how unfriendly Victoria is - well in the few years we have lived here I can say that I totally agree!!! I joined a number of gyms until I found one with a few friendly people. You have to seek out the newer transplants, as they are definately more welcoming!

Anonymous said...

Penrose, Happy4,

Moved here from Toronto and have little kids. 5 years ago. We live in Oak Bay. Only met the people across the street. When we moved to downtown Toronto from Europe I knew everyone on my street within a year. When my parents died a woman showed up my door and handed me flower -I had never met her before. We became friends. Here, the cats could be eating us and no one would know the difference. In Toronto the people were professionals working hard on Bay Street. You would assume they would be unfriendly but they were great. My girlfriend in Rosedale says that Swartz (the guy who owns Chapters and Indigo) jogs down the street and waves at people.

Our neighbours who are late 30s (2 little kdis) said our dog was doing his business on their lawn. The dog had been dead for 2 months. When we had a house built in 10 mile point people threw eggs at it. When we moved to Oak Bay one man told my husband it was his fault that the property taxes were going up since we paid a price for our house.

An old lady complained that my 2 day old baby that was crying (while I was trying to get the kids in the car) was upsetting her dog.

I have lived many places and have never encoutered such bizarre people in my life.

Anonymous said...

I lived here in Victoria for 5 years before I really had any friends. Before that it was just the occasional hi to people around town and the interaction I got with my, wacked, co-workers.

The neighbourhood and street I now live on is wonderful. People are very friendly and neighbourly. It may help that I have a kid and dog now which gets me out and I meet people.

I'm from Nelson too and I when I first moved here I loved the fact that I didn't know everyone who walked by me but after a while I did miss all the hellos and the how are your folks and such that I got in Nelson.

vg said...

Victoria has always been a cliquey city and very hard to meet people outside of coworkers.
I've always found people polite though until the last year or so where there is the big city/Vancouver mentality coming out of the woodwork, especially when driving,no one seems to give a crap. Close calls are now a regular occurence where they used to be once in awhile,people rarely say hello unless your out hiking the lake trails.
On the other hand there are way more whackos out there on the streets here so you have to be cautious who you do acknowledge,that goes for female as well as male. I have seen some real loony tunes since moving back I would only see in the worst parts of Vancouver. It's too bad but this town has evolved to a different level that I am not comfortable with, it sure isn't the good ole Victoria I used to come home to when I lived away but there is still something in the air here that keeps you coming back yet makes it hard to leave. Sounds like the Hotel California,you can check out anytime you want but you can never leave,lol.

renter said...

yes, i can imagine that going downtown with small children would be a whole other story. i don't have kids, so i suppose i escape that worry

don't know what we can do to clean up downtown, but i think that it's essential to victoria's survival. downtown is where the tourists go, and if the tourists stop coming we're really going to have a problem. i suppose the most striking thing about my weekend visitors was that they thought that victoria was so much cleaner/more affordable/nicer than vancouver, and they're big city, downtown toronto types. i think that that's really saying something about the state of vancouver.

there are going to be all kinds of new, very pricey condos and lofts being built downtown (there are a few projects under works on lower yates and herald streets, i think). who is going to shell out $300,000+ for these places if people don't think that downtown is safe/liveable? i really don't know who is buying out there.

Anonymous said...

renter,

My RE agent said this - you will love it - the Western Communites are going to become huge and very few people will be going down town at all. Downtown wil be just for the elite. They will open up big box stores and everyone will shop there. My idea of paradise! If that were ever to happen I will be the first one outta here.