On Vancouver’s east side, it’s not uncommon these days for a home owner to receive a notice popped through their mailbox with a message like, “Your neighbour’s house sold for $101,000 over asking!”

Realtor Kathy Watkinson circulated one such letter to residents near 854 E. 14th Avenue, where she sold a home for $1,100,000. The asking price was $999,000.

The idea is, of course, to let neighbours know that their neighbourhood is hot, one of those pockets of the city where bidding wars are happening like it’s 2007 all over again. The east side market is driven by those who can no longer afford the west side — homeowners who want to cash out and get better value on the east side, or west side condo owners who want to buy their first detached house.

A west-side home owner can sell their house for close to $2 million and purchase a character house on the east side for several hundred thousand dollars less, making affordability a possibility, says Ms. Watkinson.

“They were priced out of the marketplace last year on the west side,” she says. “They are coming over to the east. And they are buying a nice character house on the east side that’s nicely done up, and they’re reducing the mortgage. Or, they buy it outright and own a really, really nice house.”

Nobody can blame foreign investors for driving the demand. It’s a locally driven market on the east side, she says. Because of high demand combined with low inventory, buyers are seeing bidding wars. As an example, she says there are only about 17 houses for sale in Mount Pleasant right now.

“It’s still a seller’s market,” she says.

Photographer Malcolm Tweedy purchased his Nanaimo and Hastings area home in 2005, for $380,000, at a low interest rate. Today, a neighbour on his street has listed their tiny bungalow for $885,000, and nearby lots are being razed for redevelopment. He has new neighbours across the street that sold their Kitsilano house and now live mortgage free on the east side.

“The average person can no longer get a detached property in Vancouver,” says Mr. Tweedy,” who lives in his converted garage and rents out the house. “Everything is around $1 million, unless you come into my area. And my area has already become unaffordable.”

The east side is no longer considered an entry point to the market before cashing out and moving west. For young families and first-time buyers, the east side is the place to buy. They’re choosing character houses with basement suite revenue, where mortgage payments are realistic, and they can lay down roots.

For many, the colourful, trendy streets of the east side have simply become preferable to the quiet, upscale west side. Areas such as Main Street and Fraser Street are developing more condos, and more of an urban infrastructure, with name-in-the-news restaurants and more updated amenities than in bygone years. The corner of Kingsway and Fraser is fast becoming a lot like Main Street, with stylish coffee shops like Matchstick and restaurants like Che Baba Cantina making the area a pedestrian destination, not just a traffic thoroughfare. The strong reputation of the Charles Dickens Elementary School is also making the Fraser Street neighbourhood a particularly hot pocket.

And central neighbourhoods such as Mount Pleasant, Cedar Cottage and Strathcona are high on the list of desirable areas to live. When Bruno Wall and Bob Rennie soon start marketing their condo project at 955 E. Hastings, on the fringe of Strathcona, houses in that area should also pick up.

A factor for the condo buyers is that a lot of the west side condos are aging and looking less stylish than the new east side ones around Main Street, says Ms. Watkinson. As well, denser, more urban areas are drawing a younger demographic that doesn’t want to be car-dependent, says Mr. Rennie, who sold all 415 units at Marine Gateway in four hours. Many of those were young first-time buyers who got help from mom and dad. While much of the east side is centrally located with rapid transit access to downtown, the west side has fewer transit options.

“The younger demographic doesn’t want to be reliant on the car and has to live in an urban area to not be reliant on the car,” says Mr. Rennie.

“The upper end of baby boomer is very reliant on the car. And I don’t want to say they are unconscious, but they probably have the most difficulty leaving the concept of the car behind.”

Whether you prefer to look at the benchmark price or the median price, Vancouver real estate prices have remained high, and largely unaffordable to the average person. It’s also no secret that sales have been creeping downward in Vancouver for the last couple of years. In March 2012, sales of detached houses dropped 34 per cent since March 2011, according to the Greater Vancouver Real Estate Association. According to Landcor, total sales for Greater Vancouver dropped by 10 per cent between 2009 and 2011. However, values of sales in the same time period rose by 19 per cent. The median price of a detached home in Greater Vancouver rose by 24 per cent, going from $626,715 to $778,000.

The Canadian Real Estate Association recently indicated that the average cost of a Vancouver home was down 3.1 per cent in March, compared to the previous March. However, figures from the spring of 2011 were skewed high because of buying activity at the top end of the market. That activity wasn’t expected again this year, so the drop is not a reflection of price deflation.

Long-time east side realtor Nancy Steele says buyers are holding out for the good houses, but because the inventory is so low, they don’t have the luxury of being too choosy.

“For most buyers, it’s extremely stressful. They are in multiple offer situations on most things. You might have a one in six chance of getting that house, and it’s not like your odds increase next time,” says Ms. Steele.

“You are going to have to pay more than you wanted. It’s still largely unaffordable.”

Ms. Steele is also seeing many buyers who’ve been priced out of the west side.

“They’re coming east, driven by insane prices on the west side. Their new neighbours on the east side were probably their neighbours on the west side.”

And unlike the pre-recession market, the buyers are looking to lay down roots.

“You don’t have investors right now. It’s all end users. It’s not speculative.”

Ms. Steele pulls out lists of price sheets on homes that have just sold. She reels off house after house that has gone for above asking.

She sold four houses on a recent weekend, including 1937 E. 3rd Ave. on a Sunday, asking price $999,000. By eight o’clock that night, she’d finished the deal, with a selling price of $1,153,000.

“I did one last year where we listed at $644,000 and the buyer’s realtor brought in an offer of $800,000. The buyer renovated and sold it for $1.2 million.”

Overall, the market has levelled off, but that means little to the first-time buyer, says Rudy Nielsen, president of Landcor Data Corporation. The average income earner will have to look outside of Vancouver if they want to pursue the dream of a detached home, he says.

“It’s not affordable for most families, and that’s why we need transit systems, so families have houses in Maple Ridge and places that are outside the main areas bringing them downtown to work.”