Is Keith Roy the Jerry McGuire of Vancouver Real Estate?
Although I am not a huge Tom Cruise fan, one of my all time favorite cheese-ball movies is Jerry McGuire. I love the story of the unethical wheeler-dealer who switches gears in the interest of getting back to being human and doing “good business.” Recently I (and many others) saw a local realtor make a bold move. When the REBGV and media are saying BUY, he is saying SELL. I read Keith Roy’s blog post with a critical eye and was speculative about what his true intentions were. I wanted to know more about what compelled him to write what he did, considering most of his professional industry is trumpeting the exact opposite of what he is. Today his post has been edited on his site, saying the original “… was deemed by some of my colleagues to be disrespectful to the industry of which I am a part.”
Was it about “help me help you” or is Roy cleverly marketing himself to a demographic that are thinking this is their last opportunity to cash out before a crash? You be the judge and read my interview with Keith.
TTG: What compelled you to share your story?
TTG: In your blog post you state, “It has been 2 generations since owning a home on the west side of Vancouver made sense for an average income family and I doubt those days will ever return.” – I would argue that we’ve reached a point where owing a home anywhere in Metro Vancouver makes “sense”. How do you see average families dealing with this in the years to come?
Roy claims, “the good times have passed in the Vancouver real estate market, at least for the foreseeable future.”
KR: The City of Vancouver will continue to have a robust rental market because it is unaffordable for many families to buy a home. This is the ugly side of living a world class city. Unfortunately, with a growing population and a limited land supply, owning a home will continue to be a struggle for many families.
KR: Markets are always rational. However, they are irrational in short spurts. Real estate in the city of Vancouver rarely moves slowly. It either goes up or down – and often quickly. The bench mark for activity for the areas that surround Vancouver is usually the west side of Vancouver. It attracts the most foreign investment, usually has the highest prices and largest swings and the offers the best examples for your “Absurd Property of the Week” blog. I have a lot of faith in the long term value of Vancouver. In the short term, however I am VERY cautious. I think a few more negative headlines about a ‘slowing’ or ‘transitional’ market will ripple through the whole market and end up forcing sellers to adjust prices to attract buyers back to the negotiating table.
TTG: I’ve heard mixed reviews about your post. Some think it is so refreshing and honest for a realtor to speak up about the media frenzy around Vancouver Real estate. Others see the post as a clever way to get people to list their homes (ideally with you) by creating the panic that they should “get out while they can.” What was your intention?
KR: As I said in my blog, if you are sitting on the fence about selling I think your home will be worth more today than it will be in 6 months. I even said, if you are need more information you should contact a realtor – not necessarily me. My goal was to provide some honest and forthright advice about my assessment of the market. Again, it is the same conversation I have been having with my clients for the past 3 months. My goal with the blog was to keep my clients informed about the current state of the market in my area. I’m glad it got so much coverage and the message got out, but I don’t think I could have planned to turn my blog into a major headline story in multiple newspapers. My message obviously resonated with some people on facebook and twitter and found its way into mainstream media. Certainly the media coverage hit the panic button. My blog merely presented a set of facts and some scenarios where cashing out might make sense.
I have friends and family members who happily rent the homes they live in because they are not willing to make the compromises or sacrifices necessary to own a home.
^^ I am sure there are many in this boat. Let’s not forget though – for MOST in Vancouver renting (from a strictly financial perspective) is *the* way to go right now. So while some rent because they were not careful with their expenditures others do it because it makes sense. Melissa, I would love to see a blog post on rent vs buying in the vancouver market (of course, relying on a non-biased calculator). So many people don’t understand that renting can actually put you in a better financial position.
Noted…if you email me with any stats to back it up and I can try put something together on that topic.
Jerry McGuire… an apt comparison.
Some background on Keith, in case you haven’t seen it.
http://vreaa.wordpress.com/2009/12/10/i-am-realtor-nothing-realtorian-is-alien-to-me/
No…I hadn’t seen that. Thanks for sharing.
Hi, there’s a good rent vs buy calculator at…
http://www.nytimes.com/interactive/business/buy-rent-calculator.html
seriously, what makes this guy an expert? How long has he been a realtor? not that taking a 3 month course makes anyone that much more knowledgeable.
Keith said on his BNN interview that he is looking to jump back into the West Side in Oct or Nov, in order to avoid a mortgage penalty….really Keith? you’re telling folks to cash out now, yet you’re also telling us you’re buying in again in just over 2 months?
I’d say Keith is the last person we should be listening to, he makes no sense at all, just looking for panic sellers.
This market is going down for a lot longer than 2 months, I wish you luck in your West Side purchase in November…
@Vangrl – Thanks for the comments. To answer you questions, I have been a Realtor for 6 years. I have spent 5 of the last 6 years ranked in the top 10% of all greater Vancouver realtors for number of sales and am currently ranked #205/10,000 realtors. Expert is obviously a subjective term, but I would certainly argue that I am qualified to talk about real estate in this city. I was born in Vancouver, have lived here most of my life and have sold hundreds of homes.
You are correct that barriers to entry are low for real estate – far too low in my estimation. Fortunately, I have 8 years of post secondary eduction in real estate, marketing and political science, which produced an honours degree and a diploma and therefore I don’t rely on my 3 month real estate course (which when done properly is only 3 weeks) to inform my clients.
I didn’t say cash out now and buy back in 2 months. If you’ve read my original blog post, you would see that I said if you are on the fence about selling, I would do it now, rather than later. As for buying back in, I am less worried about the price of the home I purchase, as I am about whether or not I can afford it on a monthly basis – which is how most people buy homes. Once the price of the home I want gets to a point where I can afford it on a monthly basis, I I will likely buy back in. If the prices go down further, but interest rates go up, my monthly payment will remain the same. Monthly payments are the primary metric by which I will be purchasing a home. In my case, I needed to get the cash out of my place before buying the next one and the timing looked good. I think my strategy was good advice for my situation, so I shared it with others.
To answer your question directly, yes – I will buy a home if I can find one in the fall that meets my criteria for lifestyle and fits into my monthly budget. Once the fall rolls around, you might hear from me again, saying prices have dropped, I think its a good time to buy. Alternatively, you might hear from me saying, I still think prices are going down, you should hold off. No matter what advice you get from me, it will be the truth.
Again, thanks for posting your comments – I always enjoy the conversation!
I apologize for the comment I made about your knowledge regarding real estate, it sounds like you are more informed than most realtors that have only taken the course and been in the business a few years.
Buying when you can afford the monthly payment and not when fundamentals are more in line doesn’t sound very wise to me, but obviously that’s your choice. The market is starting to go down right now even without interest rates rising, so the argument that “although prices will be less, interest rates will be higher” will probably not apply in Vancouver, at least for awhile, interest rates are going nowhere.
I’m curious as to how far you think the west side might fall in just 2-3 months to warrant jumping from East Van to West Van? would another 5% or 10% enable you to comfortably afford your monthly payments? or are you expecting an even larger drop than that?
My father was a realtor in the early 80′s and I saw first hand just how fast Vancouver can fall, and how far. Anyone jumping into that market after only the first 2 months would have regretted it for many, many years.
Thanks for your reply, nice to see you’re following up on your remarks.
I guess it just strikes me as odd that you would get all this publicity for stating that you sold, and that you think prices are going down, and then immediately mention that you are looking to buy again in Oct-Nov in a more expensive market.
To me that sounds like you think that’s when the market might make sense to get back into, but the average joe would never sell just because of a two month dip, even ones that are sitting on the fence…..i have migraines that last longer than that.
“Markets are always rational. However, they are irrational in short spurts.”
These two statements are nonsense formed by someone with very little knowledge of markets. There have been long periods of inefficient market pricing, such as late 80′s housing, late 90′s tech, and present day treasuries. You will note this ‘expert’ has never addressed fundamental valuations anywhere in his ‘analysis’. Based on his comments here and elsewhere, it is probably because he has no knowledge of the basis for asset pricing.
But this BS just gets better:
“Holding property in Vancouver is always a good idea”
Ahh, mixing up the prior decades’ realtor talking points with his current ones makes for some fairly stupid comments.
Realtors are not independent/disinterested voices, they are market actors with a stake in seeing transactions completed. Taking advice from this completely uneducated market participant, an actor whose own greed is partly responsible for the asset bubble, is counter productive. He contributed to misinformation on the way up, and is now garbling the message on the way down as well.
Market participants should simply disregard the snake oil purveyors and concentrate on fundamental valuation, historical comparisons, and statistical analysis.
“To answer your question directly, yes – I will buy a home if I can find one in the fall …Alternatively, you might hear from me saying, I still think prices are going down, you should hold off.”
Credibility zero. So…Sell now, but holding Vancouver RE is always a good idea, but maybe not in a few months, or possibly….basically he has no idea. You want to make the most leveraged and one of the most risky asset purchases of your life based on this?
There are a wealth of knowledgeable sources on real estate and asset pricing, and this person makes headlines?
Now here is some sound advice..
“concentrate on fundamental valuation, historical comparisons, and statistical analysis.”
compared to..
“Once the price of the home I want gets to a point where I can afford it on a monthly basis, I I will likely buy back in”
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