It’s the end of another work week and that means it time for another free-for-all! This is when we do our end of the week news round up and open topic discussion thread for the weekend, here are a few links to kick things off:
-YOY sales numbers take a dive
-West Van Slide
-That Delta smell?
-Canada’s economy expands 0.1%
-Campfire ban with $1 million fine
-Foreclosures up in 75% of top US metros
-Paulson: housing policy must be sustainable
-Recovery losses speed
So what are you seeing out there? Post your news links, thoughts and anecdotes here and have a fantastic long weekend!
Here’s an interesting comparison that came up in in the discussion earlier comparing a couple of North American property markets. First off space889 pointed out this nice large lot on the west side of Vancouver that is up for sale asking $3,280,000 – the oil tank has been removed and this property could be used to build your dream home near Oak street, or you could just hold onto it and wait for it to appreciate.
Crabman then pointed out this property in a place called Beverly Hills on a slightly larger lot asking $3,200,000.
Here they are side by side for comparison:
Local developer Ian Gillespie is experimenting with the idea of building a downtown condo that is affordable to a couple making minimum wage. The tower would be located on Cordova between Gastown and the Downtown Eastside. To keep costs down it will feature simple finishes, no parking, and owners would do their own maintenance instead of paying strata fees to cover repairs. To try to keep out speculators and flippers they will require the units to be owner occupied.
The 108-unit project is a collaboration involving Vancity credit union, Habitat for Humanity and a Downtown Eastside housing group. Habitat will get four condos suitable for families in the building and will choose who gets them. Another eight units, to be managed by the PHS housing society, will go to local community workers.
The remaining 96 condos will go to buyers who will have to prove that they plan to live in the units and who agree to do some maintenance themselves instead of just paying standard condo-maintenance fees. According to the material submitted to the city, nearly three-quarters of the condos will sell for less than $300,000, and more than half will be affordable to people making between $29,000 and $36,000 a year. That’s the income of an individual earning $15-$19 an hour, or a couple in which each partner makes the $8-an-hour minimum wage.
One interesting point: one of the reasons they can build this condo development for cheaper is because the land got cheaper:
The land, previously owned by developer Robert Wilson, was repossessed by Vancity last year. He had purchased it for $7.9-million in July, 2007, shortly before the city’s real-estate market deflated. It’s now assessed at $5.4-million.
Read the full article in the Globe and Mail.
Inventory shared some interesting data with us on Friday:
sales numbers going back to 1995.
Sales numbers for this month up to last Friday continue to be very low, almost reaching back to their 2008 lows, except when it comes to new unit sales, which are lower percentage wise than we’ve seen in the last 15 years. As of Friday new units sales are down at the 25% level.
The boom has gone bust inland and we’re starting to see more and more of these news stories about it. Jimmy pointed out this link to some coverage over at news 1330:
Advertised prices on many new developments are down between 20 and 30 per cent, six-figure savings in some cases. And if you really hunt, developer Matthew Hay says deeper discounts can be had.
He says too much inventory was built up before the recession hit, and the newly imposed Harmonized Sales Tax is not helping the market either. “So now not only is there a surplus of product on the market, but you’ve got a whole buyer demographic that is nervous, cautious, sitting on their wallets, waiting to see how things shake out.”
Some of the developers are offering incentives on top of the discounts like covering the HST, or the GST. Hay says some developers are desperate to sell and that is putting downward pressure on the Okanagan market.
Like that battery-marketing bunny, the leaky condo crisis keeps going and going.
Owners in a 71-unit building in Cloverdale say their builder repaired some leak problems a few years ago. At the time, the work was covered by warranty.
But recent testing found moisture in the building’s walls, and homeowners learned that they would be hit with a bill of about $45,000.
For some owners, that was too much to handle, and they just walked away. Eight owners have yet to come up with the necessary cash.
“They’re going to be foreclosing. I have until the end of December to come up with any monies,” owner Shirley Hall said. “I guess I have to walk away from it.”
The building was built in the 90s, at the height of the leaky condo crisis. For 11 years, the province gave interest-free loans to those facing massive repair bills.
A 2008 report done for the government said that after 2012, anywhere from 14,000 to 24,000 leaky condos would still near repairs, and that the demand for loans would be high until 2017.
..but as you all know, that interest free leaky condo repair loan program has been axed. Housing minister Rich Coleman suggests taking out equity to pay for repairs saying “Even seniors can get reverse mortgages — they’re pretty economical”.
Hat-tip to Bizznitch for the link.
VHB pointed out this site on Thursday: Canequity provides actual data for their mortgages across Canada including here in Vancouver. One of the frustrations of anyone trying to study the housing market in Canada is the dearth of publicly available data compared to the United States, so it’s nice to find a source of some data when it comes to Canadian mortgages. Here’s their chart of product inquiries as one example:
Take a look through all the data they make available – here’s Toronto and here’s Alberta. Locally there’s info for BC and Vancouver. If anyone wants to do a breakdown of anything interesting that they find, we’ll be happy to publish that here.
Another week draws to a close and another Friday free for all post is ready for your weekend – It’s time for our regular news roundup and open topic economic discussion thread! Here are a few links to kick off the chat:
-BC Real estate a buyers market
-A soft landing or something worse?
-Financial advice from bank tellers
-To boost net worth live in a mid-sized city
-House prices fall for first time this year
-Sex sells? Maybe not
-Sacramento flippers in trouble
So what are you seeing out there? Post your news links, thoughts and anecdotes here and have an excellent weekend!
Jonathon sent in a link to this great ‘blast from the past’ interview with developer Sam Zell about whether there was a real estate bubble in Miami. He makes some very compelling arguments about why there is no real estate bubble, and some of them sound remarkably familiar somehow.
Q But U.S. home prices are up about 40% in three years. How can this not be a bubble?
A Econ 1001: Prices have gone up because the demand has been much greater than the supply. The country is producing all it can in terms of supply, but what you see is more demand. Over the next 10 years we’re going to add a million new household, much of that’s due to immigration.
Econ 1001 is very advanced, so you may not understand that. Here’s something you will understand:
Q How bad could it get?
A Worst-case scenario? A flat housing market. Look, all I can tell you is we’re the largest owner of apartments in the U.S. and among the largest converters of apartments to condos. If there was a danger of a bubble, would we be in this business? I’ve never been accused of being a Pollyanna, I’m the Gravedancer. Americans don’t understand that we have the cheapest housing in the world. London and Tokyo are more expensive than New York. Why do you think everyone is going to South Florida from Europe? It’s because prices here are cheap compared with there.
Understand? South Florida is cheaper than other places, and everyone wants to live there. Ergo, there is no housing bubble in Miami condos. All of those arguments just happen to be applicable to Vancouver BC as well.
Here’s the ‘flat market’ in Miami since that argument was made, but always remember: ‘it’s different here’.
