Here at the Vancouver Real Estate Podcast we always spend much of January and some of February talking about real estate market predictions for the year ahead, this year with fantastic guests, with distinct backgrounds and interests, like Developer Jon Stovell, Economist & tax reformer Tom Davidoff, Project Marketer Trevor Street, and Mortgage Broker and coach Dustan Woodhouse.
These guests all raise prudent concerns for 2018, like interest rate increases and the new stress tests, and generally conclude that the outcome will be a more balanced market this year.
All of them, it is worth pointing out, remain bullish on the Vancouver real estate market in the longer term.
Kind of boring, right?
And yet, as is the case every year, we spend countless hours talking with buyers and sellers about the coming year being the time for the big “correction” (the term itself suggesting an inevitableness that is wholly inaccurate) or the “bubble bursting.”
So, why all the doom and gloom?
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It is mostly a healthy dose of caution and a smart weighing of the possibilities. For most people, any Vancouver real estate will be their largest asset and any swing in market value would have a marked impact on their life – psychologically if not in direct financial terms.
So, it is best to do your homework, weigh differing viewpoints, listen to podcasts, talk to friends, etc.…
Where’s the harm in doing your due diligence?
There is absolutely none, unless caution leads to paralysis or the fear of the unknown leads to knee-jerk, ill-advised decisions.
Take, for instance, the ongoing advice of the very loud and opinionated financial advisor Garth Turner.
Garth has called for a crash in Vancouver real estate basically since Joseph Kennedy was selling cocktails in Yaletown.
Garth understands that fear sells, so he shouts from the rooftop with the unwavering conviction of an observer who believes if he does so long enough he may just turn out to be right at some point.
But Garth has been wrong a whole bunch.
Take, for instance, Garth’s advice to Al, who was nervous about his 2-bed condo in the West End 10 years back in April, 2008.
Yep…scads of competing condos…limited demand…sounds about right.
You would think getting it so wrong would eventually humble Garth. Nope.
Garth has been strikingly consistent in his hyper-confident messaging.
See, for instance, in 2012 when Garth told Vancouverites, “By the time things trough the average price will likely be 40% lower, with a return to 2005 levels.”
Or, in mid 2016, when Garth loudly proclaimed, “Get out of Vancouver Real Estate, Now.”
Everybody is wrong sometimes but what gets us about Garth is his cast-iron conviction on a topic that has consistently surprised even the best prognosticators.
He has convinced an untold number of people to not buy real estate while persuading others to sell. Either way, his advice has led to enormous losses in wealth for everyone who took heed.
Let’s hope Al didn’t listen to Garth and sell back in 2008. According to the most recent Greater Vancouver Real Estate Board stats, Al’s condo – 3 blocks from the Seawall!!! – has appreciated 76.9% since he wrote that letter. In other words, the condo is worth approximately $780,000 today or $340,000 more than when Garth told him to “get out.”
Don’t get us wrong…guy’s like Garth may end up being right at some point. Prices do not go up in a straight line indefinitely and his crystal ball is as good as any fortune teller.
But the real question to ask is: at what point does the financial damage done over providing over a decade’s worth of bad advice outweigh the joy in telling everyone ‘I told you so’?