When Vancouver real estate prices were falling in 1982
'Historically high rates and tight money' forced costs down
It seemed the property market in and around Vancouver had come to a point where people just couldn't pay any more for real estate.
And so, prices had actually ended up on a downswing in 1982.
"A year ago, housing prices were sky high — it cost so much to buy a house in Vancouver that most people simply couldn't afford it," the CBC's Knowlton Nash told viewers on The National, as he introduced a report on the market conditions on Aug. 18, 1982.
"Now, even with interest rates coming down a bit, the combination of historically high rates and tight money is beginning to force down the cost of housing."
John MacLachlan was among the homeowners who had bought a property at the height of the market.
In 1981, he'd paid $235,000 (the equivalent of almost $650,000 in 2022 dollars, according to the Bank of Canada inflation calculator) to buy his three-bedroom home.
A year later, its value had fallen by $60,000.
"I like the house. The area is one that I always wanted to live in and I could afford it at the time, albeit marginally, and as long as the economy doesn't wreak complete havoc either with my income or my wife's income, we'll be able to continue to afford it," MacLachlan told CBC News.
Rising risks for some...
Reporter Georges Tremel said that was the kind of situation that could get people into trouble, where a loss of income could leave struggling homeowners looking to sell their home at a time when prices were falling.
"The loss of an income can be disastrous," Tremel explained to viewers.
"Selling the house can be impossible, if it has lost so much value it is worth less than the mortgage on it. Real estate agents won't list it and nobody will buy."
Tremel said the decline in prices had followed a peak that ended amid high interest rates and lowered demand — a phenomenon The National had been following the previous summer.
...but opportunities for others
The flip-side of these conditions was that those who were able to buy might be able to purchase a home at a lower price than they expected.
Like Carol and Garry Butcher, who bought a three-bedroom home in Port Coquitlam, B.C., for less than two-thirds of the comparable asking price from the previous year.
"It really scared us to all of a sudden be this much in debt," Garry Butcher told CBC News. "But we're happy we did."
Carol Butcher said the couple "had it all worked out that we could manage on one salary," should their situation change.
A path to recovery?
Tremel said the Vancouver-area market appeared to slowly be returning to normal prices.
"That's fine for the families who bought before the boom or are buying now," Tremel said.
"The families who bought at the peak can only wonder if and when they will recoup their losses."