Vancouver Condo Info

With the current real-estate market here most people seem to agree that property is getting too expensive in Vancouver, particularly for first-time buyers. Opinions differ on what that means for the future, most people who earn their living through real estate seem to be of the opinion that prices will stay the same for a while (plateau), increase very moderately for the next few years (about the same as inflation) or dip slightly. Others take a more negative view, pointing to Vancouvers history of manic depressive real-estate price swings, including a one year 40% drop in house prices in the early eighties.

With the current build-up of houses and condos for sale and months of dropping sales its starting to look like we’ve hit the market peak – so how many are waiting on the sidelines to buy? If prices start to drop who will jump in to make sure they don’t drop too much?

If you’re looking to buy in Vancouver, but are currently ‘priced out’ or have found better places to invest your hard-earned money, what would convince you to buy in Vancouver? What do you feel is a reasonable price to pay for a house or condo in Vancouver? What about specific areas: the downtown core, kerrisdale, grandview, collingwood, etc.

Whether you own or rent in Vancouver, if you’re living near the center of the city chances are you live in a small space. Apartment Therapy is a site that focuses on tips to make your space more liveable, from color to decor, layout and renovations. If you’re looking for decorating tips or just some mindless consumerism to chase away the autumn blahs you might find something interesting on their site.

Looking for a condo in Vancouver but waiting for prices to drop? Well here’s some real estate price reductions for you in central Vancouver.. Is this the beginning of a slide in home values or a small dip before prices rocket back up again? I’ll leave that for you to decide. Price drops here range from $10,000 to $40,000. All of these listings have been on the market for more than 90 days, and all links lead to the property listing on MLS.ca

6460 MAIN ST – Original price: $395,000 | Asking: $369,000
“Bonus of $1,000 for accepted offer by August 15″

888 PACIFIC ST – Original price: $449,000 | Asking: $419,900
“Wake up & enjoy building amenities..”

1099 E BROADWAY – Original price: $349,900 | Asking: $325,000
“Faces Broadway but quiet inside”

336 E 1ST – Original price: $339,00 | Asking: $319,000
“Easy parking rental in building.”

950 CAMBIE ST – Original price: $488,000 | Asking: $478,800
“close to all amenities & other new buildings”

550 BEATTY ST – Original price: $429,000 | Asking: $415,000
“Upgraded kitchen cabinets for those who don’t want the conventional”

1238 BURRARD – Original price: $429,000 | Asking: $405,000
“Market rent $1650/mo.”

3788 W 10TH AV – Original price: $458,000 | Asking: $438,000
“Quick access to UBC and downtown.”

189 NATIONAL AV – Original price: $480,000 | Asking: $440,000
“Bright open kitchen with granite countertops“

6026 TISDALL ST – Original price: $279,000 | Asking: $265,000
“35% down payment required. Adult building.”

There are more listings, but I grow weary of typing. If there is interest I’ll make this an ongoing feature.

No this isn’t news for Vancouver, but it is about ways of predicting the future of the housing market. This MSNBC article talks about some of the different methods of analysing the housing market and how they all end up with pretty much the same view: the largest expected housing declines in the US market will be in some of the markets that were previously the hottest: Miami, San Diego, Las Vegas, Washington D.C. and Boston to name a few.

Mark Zandi, chief economist at Moody’s Economy.com released a huge housing report last week, predicting house price drops next year by as much as 18.6 percent in Cape Coral Florida, a 17.2% decline in Reno Nevada and a 15.7% drop in Stockton California. To conduct his analysis, Zandi looked at the supply and demand of housing, changes in mortgage rates, demographic trends, the job market, and new housing.

The other angle on real estate price prediction comes from the Chicago Mercantile Exchange which began trading futures and options contracts on housing prices in 10 markets across the U.S. in May. Investors are predicting declines in all 10 cities listed on the CME over the next 12 months.

The article points to the way these two approaches to prediction yeild some similar results:

“In the cases where they cover the same ground, Zandi and the CME traders have some uncanny similarities. For instance, Zandi expects San Diego to drop 8.4% through the second quarter of 2008, while the futures market is expecting a drop of 8.2% by August, 2007. In Washington, Zandi expects prices to drop 12% through the second quarter of 2008, and the futures market expects a 7.7% decline by August, 2007.”

It will be interesting to see how accurate any of these predictions turn out to be. On one hand you’ve got an economist who has done a lot of research, and has a single point of view. On the other hand you’ve got a group of people, potentially from all walks of life, putting up money betting against future house prices. Either way it looks like prices dropping across the USA and if that ends up happening this will be first decline in US national house prices since the Great Depression.

There were a few interesting articles in the sun this weekend about the Vancouver housing market: The first article action urged for affordable housing talks about the cost of renting in vancouver and the squeeze put on older low cost rental stock as it is converted into condos for sale. The second article is one from last friday and is titled developers face threat of oversupply.

Over the last four months sales have dropped and listing have risen prompting some to ask if we’ve reached a tipping point in the Vancouver real estate market. With thousands of new condo units to be finished in the next couple of years, sales levels dropping off and low levels of immigration to the Lower Mainland are we in danger of being over-supplied in the condo market?

If current rental rates are putting the squeeze on renters, but still can’t cover the average mortgage cost on a equivelent unit, what happens to rent prices? What happens to sale prices?

Silver lining: Sounds like its about time for everyone in Vancouver to get a healthy pay raise! Go let your employer know!

I was walking down the street when I saw this a bus-stop ad for a vancity ‘mixer’ mortgage. It took me a moment to figure this one out.. basically you can share a mortgage with friends now.

Haven’t you always wanted a place to call your own? I bet you have one or two friends that have always wanted a place of thier own as well.. Now you can BOTH have that place of your own together! This arrangement combines the pride of ownership with the convenience of a room-mate!

Think of the advantages!

This effectively doubles your buying power- Never have to buy food again, just mooch off your roomie! A little short on the electricity bill this month? No problem! You’ve got a room-mate to take up the slack. I can’t imagine why everyone wouldn’t go for this deal – what could possibly go wrong with this arrangement?

This deal combines the low cost of co-habitation renting with a chance to get exposed to the vancouver housing market.. Think there’s still some upward momentum to this market? Now you can finally buy that half-a-condo you’ve always wanted and avoid being priced out of the market forever!

As long as you are always in complete agreement with your friend about all things mortgage-oriented then this is the ideal way to get into the market. What a great creative new way to increase affordability! Take a cash-advance out on your credit card for a down payment and you’re on the road to riches!

So you think property in Vancouver is small and expensive. You’re looking at a 700 square foot condo and wondering how it can be worth $400,000? That’s not expensive, THIS is an expensive house. At £80 billion per square metre, this house outprices anything anywhere near the lower mainland. Actually it outprices anything in Britain as well. But because its small enough to fit on the head of pin the whole thing will only cost you £20,000.

British artist Willard Wigan specialises in micro sculptures and built this house to fit on the top of a dressmaker’s pin. At just 0.5mm across It may be a bit cramped and I don’t believe it comes with insuite laundry, but it’s so portable that the maxim ‘location is everything’ becomes infinately adaptable.

Hot Tip: invest in pinheads.

Buying a condo on leased land in False Creek just became a whole lot more expensive. The city of Vancouver jacked up lease rates overnight with an average increase of SEVEN HUNDRED PERCENT! This story from 24hrs.

“Richard Cooper woke yesterday to find his payments had jumped from $102 monthly to $785.
“I got up this morning and there was a bulletin,” Cooper told 24 hours.

Condo owner George Stratis was among the hardest hit. He wasn’t aware of the increase until he was contacted by 24 hours yesterday. “You’ve got to be kidding me! That’s absurd,” Stratis said, when told his payments had jumped by $1,400 a month. “That’s larger than a mortgage.”

Stratis could now owe the city about $20,000 a year. That’s on top of his regular property taxes.”

One owner has seen their payments raise from $121.50 to $2,000 – An incredible SIXTEEN HUNDRED PERCENT increase! The city claims that these lease rates have been stuck at a low value for thirty years and that todays increase reflects the current value of the land. Leasehold value has been a contentious issue between residents of False Creek and the city of Vancouver for years. Some residents claim this former industrial land is contaminated and overvalued by as much as 40-50 per cent.

“They’re simply boldly making the statement saying this land is worth top dollar and we should be getting as much rent for it as if it were clean,” said Renger, a senior city planner in another jurisdiction. “That’s not what market land value is about.”

I have a feeling that even at the peak of a boom you’re going to see listings for leased land property in False Creek plummet in value as owners, particularly retirees try to get out of their lease-hold condos.

Update: there’s more info in the Georgia Straight – apparently these increases are on 118 units that decided not to prepay their lease in 2001. The only False Creek resident that was there during the October 3rd council vote in favour of increasing the lease rates was Merv Therriault:

“This has all been predictable,” Therriault told the Straight. “In 1998, we got a document through an FOI [request] that said a large increase in rent will present a political burden to council in 2006.”

Though the increase was forseen, apparently the size of the increase was not:

“COPE Coun. David Cadman told the Straight that no one could have predicted land values would rise so much, but it’s council’s job to uphold the lease agreements. Both Cadman and Therriault predict that when the leases expire in 2040, South False Creek will likely be sold and turned into a Yaletown-like development.”

I’m unclear on the legal status of units built of leased land. If the city decides to sell the land in 2040 when the leases expire do they need to buy the buildings from their current owners, or can they just tear them down with no compensation since the lease for the land is up?

A more detailed article today in the Vancouver sun about listings, sales and prices in Septembers real estate market in Vancouver. This article starts with the statement “The sellers’ market in Lower Mainland real estate is coming to a close.”

Cameron Muir of the CMHC makes the comment that “The asking price of many home sellers is getting to the point at which fewer and fewer buyers can pay”, but says that it this point (four months of sales decline) its not a signal of any kind of “significant market correction”.

However, Tsur Somerville, director of the centre for urban land economics and real estate at the University of B.C.’s Sauder School of Business, said the trend in sales is a sign the Lower Mainland market “is clearly putting the brakes on. But it’s too early to say how much.”

Somerville said real estate markets pass through a balanced period when they are rising from depression to overheated, and will also hit balance, or “equilibrium” on their way back.

“Since [the market] has been very overheated, it’s quite reasonable to go back to balance,” Somerville added. “The question is, are we going to stay there or keep going?”

Somerville wonders whether the psychology of buyers is shifting and more of them are focusing on negatives rather than positives, such as cost overruns for the 2010 Olympics. Somerville said buyers might also be looking at the poorly performing U.S. housing market and worrying how that might affect B.C. Whether it does or not is immaterial, he added, “because psychology matters.”

Anecdotaly, I’m finding that people around me no longer view real estate in the lower mainland as a ‘sure-bet’, In fact- I think I’ve heard expectations ranging from a dip to a crash from more than 10 different people in the last couple of weeks. Is this the end of the sellers market in Vancouver real estate? What will a transistion to a buyers market look like? Or will we find that sought for balance that saves us from a crash and enables more people to buy?

What are you hearing from people on the street?

September is the fourth month in a row that real estate listings have gone up while sales have gone down according to this brief story in the vancouver sun.

The number of sales in the greater vancouver area are down almost 25% from september one year ago, while the number of listings are up 11.4%. Fraser Valley saw similar numbers with a 23% drop in sales and a 19% increase in listings.

“Rick Valouche, Real Estate Board of Greater Vancouver president, said the figures show the region is “moving towards a balanced market.”

Does anybody know what a balanced market is? What years would the real estate market have been considered ‘balanced’ in Vancouver? What effect does ‘balance’ have on prices?