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Tuesday, November 5, 2013

What's in a School catchment ?

Recently I had a Point Grey listing and the number one or two question I got was " whats the school catchment?"

This interests me, that our  real estate market could be  dictated by a school catchment. 
When I think about West Vancouver where I live ,  its the same - especially for Elementary schools. We have a " choice " school system and  catchment plays a big roll when everyone wants into your school. But, SERIOUSLY, is one elementary school really that much better than another to warrant a few G's difference- or a few hundred G 's? My bet is its not just the Teachers, or the Principal, that make a certain school desireable. The school is heavily dictated by the Province with Provincial criteria. What we are really putting money on is the fellow kids our kids will go to school with and be friends with.

My parents grew up in a society where my mothers dates were asked " what does your father do?" When I was young and heard about it I  thought  that was offside and yet, now we dont ask that , but I think  people just try and put kids in an enviroment with other high achieving parents kids. It sounds offside, but I can speak from experience its been a great ride for me.

I imigrated in 1979 with a single mother. My sister and I entered a West Van High School,  living  in West Bay.
We paid a phenomenal price , at that time,  $ 148k for the cottage. I crossed catchment to go to a school of a friend who immigrated the same year and I met  and befriended alot of new friends. About a dozen  or more of those would stay my lifelong friends, I see them regularly and share a close  bond that is both frustrating and bewildering to my husband .
These friends , men and women, have all been high acheivers from early on ( ok lets eliminate a few high school years there) and have been an incredible resource for  me .  In our group of friends there is a life coach when times are tough, numerous CEO 's  of International busineses that have helped me make  decisions, VP's of marketing, and even manufacturers of goods that I have been able to buy at a great price. I know the fact that we are all still so close is very unique. But it has been a wonderful bond in both friendship and business.

 I can run marketing ideas, spending and tax thoughts, marital frustrations, ( hardly ever honey... dont worry  ) and even when I have been  asked for  speaking engagements I  have run my speech by them  first for feedback. Many of them are known enough that if I mentioned them ,you might know of whom I speak. How wonderful is that ? That I can call them anytime and ask  them what they would do in any given situation?

Nature vs Nurture aside, these friends were raised very goal oriented. My whole school community was. Is it any wonder that coincedentally I moved back here after 18 yrs of living in the  Downtown Eastside. At the time I didnt think of why, it was just that opportunity called- as I mentioned in previous blogs, but now I wonder if i innately knew this  was where my kids had the best life long opportunity.Did I want for them to have friends like I did?

Life and society are very different now. But I do see the wave of new immigrants wanting to put their  kids in" the best " schools where other high acheiving students go. Hence the pockets of Vancouver West  and the North Shore that see the rise in property value following the natural supply/demand cycle.  This is becoming a concern as people are spending above what they can afford to get their kids in these neighborhoods. We need to address this issue and offer choice programs everywhere or create more housing options to allow for people to move in.
Laneway housing might help ease some of this as the 2 bedroom models are great for young families starting out with Elementary age kids. West Vancouver sees the need as well and on November 18th will draft Policy followed by community feedback. Eventually our
 " choice" school system will spread out these pockets and we will move close to schools that carry the programs our kids need and want. Many schools have added French Immersion programs, and others now are following the IB ( International Baccalaureate) program.
 I wonder what would happen if the choice programs became available in areas that were depressed as far as real estate prices go?.  Would it make a difference?
I think I would put my money on my theory above-that Its not about the school as much as the kids that go to it.

Kim Little
604 617 4856

Friday, January 11, 2013

2013 The year of Tammy

Recently  @Douglas Coupland quipped on Twitter  that 2013 was a very bad name for a year so he was going to rename it Tammy. Tammy sounds like a hurricane name to me.
But then again perhaps thats what we can expect.
Hurricanes , to me , imply  strong winds that go in circles. With regard to Real Estate how long have people been calling for a serious turndown only for us to see a mild correction and then swing  up  again- even higher.

I remember an old joke about the guy lost in a hot air balloon. He sees a fellow down below and yells "Excuse me, can you tell me where I am ? " to which the fellow below yells back " You are in the air". The balloon man shakes his head and says " Surely you are an economist !"
 " Yes " replies the fellow, " how did you know?" " Because " says the balloon man, " your answer was totally right and totally useless".

Telling me exactly why prices went crazy the last few years does not help me in figuring out where they are going to go.
Stats, smhats. We have entered unchartered waters and there are as many reasons why this can go on longer as why this can end tomorrow.

Are you going to stop buying cheap replica trinkets for a quarter of the original costs? Will enough people finally say I want to buy things that last and will pay for it? If not China will keep booming.
China is making more millionaires a year, and taken more people out of poverty in the last few years than anyone could ever fathom. This has been on the backs of some large corporate brands. 

It is a vicious cycle. Our companies are tightening spending so we are working more and maybe getting paid less so we are buying cheaper stuff. That stuff is predominantly made in China. So the Chinese people are making more money and wanting to invest in less volatile regions. Welcome to Canada. Hurricane Tammy strikes again.

Here is an interesting graph showing the psychology of investing. This was done by Dr Rodrigues of Hofstra University.

Let me follow that with a graph of Real Estate trends since 1977.

If you look to the right, you see the similar double peaks. Scary isn't it? 
BUT, I don't predict the massive drop with rates still so low. If I can borrow at 3%  interest , eventually a significant drop in prices will mean I can rent cash positive and I would do that over paper stocks anyday. In some less desireable areas, yes i think prices will go down. But if we treat Real Estate investing as an emotional, confidence based type of investing ( isn't all investing that way?) then I would proceed with caution.As always, get very good advice before any major purchase.