Vancouver Condo Info

According to the Rob Carrick at the Globe and Mail Relying on your home to spit out cash is a recipe for disaster. With increased living expenses people have a lower percentage of their income to invest in their retirement, but increasing property values have led some to believe that their mortgage could be their retirement plan.

The average house price nationally in September was $277,470, which is about 50 per cent higher than it was five years ago. In cities like Toronto, Calgary and Vancouver, the average price was between roughly $350,000 and $527,000. It’s rapidly becoming clear that certain financial sacrifices are inevitable when you buy a home at those prices, and one of them may be putting enough away in a registered retirement savings plan.

The average price for a house in Canada is under $300k? Isn’t that quaint? With our high real estate values, I bet we all get to retire early! Unfortunately the article goes on to outline some of the reasons that housing is not the best bet for retirement planning:

Everyone loves the housing market during a boom — it’s no big deal as long as you regard your home primarily as a place to live. The harm is in getting grandiose ideas about how your home will help finance your retirement. In the Investors Group survey, 51 per cent of participants said they are relying on their home as one of their sources of retirement income. Among the baby boomers in the survey, 55 per cent said their home will be a source of funds in retirement (a total of 2,170 people participated in the survey, which was conducted last month).

The problem with using your home as a source of retirement income is that it’s a very inconvenient source of funds — you can’t take cash out unless you either sell or incur some debt through a home-equity line of credit or a reverse mortgage. “You have to be realistic,” Ms. Ammeter said. “The question to ask is, how are you going to realize on your investment in your home?”

Rent it out to the luge team for two weeks! Sell it to wealthy foreigners! Take out a giant home-equity loan and pass the debt on to your kids! I mean come on, it’s not rocket science, what with global warming I’m sure it will be quite comfortable to sleep in the parks year round in 10 or 20 years, so you sell the house and live for free in Stanley Park! If you hunt and trap squirrels for food you can probably live quite comfortably off the interest from your nest egg and have the confidence and joy that comes from being self-sufficient.

A reader sent in this link to this story in the Globe and Mail about Vancouvers current real estate slow-down.

When Stephen Webber and his wife put their Vancouver-area townhouse up for sale in September, they expected to close a deal within a month.

After several open houses, nearly a dozen private showings and two price cuts, they’re still waiting.

“We have been surprised by the lack of activity,” Mr. Webber says. “It seems there is a lot of supply out there. Buyers have more choices. There is not that rush. And there might be hesitation because of what’s going on in the States.”

If buyers are not rushing, it may be because they don’t have to. The frenzy that characterized the Vancouver housing market since 2004 is disappearing, replaced by one in which buyers have more than mere hours to make a decision. Instead of multiple offers, bidding wars and homes being snapped up virtually overnight, the current market is characterized by growing number of listings, a slower rate of price increases and even price cuts.

The article is a bit confusing – it lays out all the reasons for the current slowdown: Lack of affordability and drying up of speculative activity, and how thats led to less buyers and price drops, but then goes on to relay the same old reliable quotes from Bob Rennie and Rick Valouche saying everythings great! I found the following particularly confusing:

But anybody hoping that prices may come back within reach for first-time buyers is likely to be disappointed. Slowdown or no, Vancouver real estate remains too expensive for many. A search for a single-family, detached home under $600,000 on Vancouver’s west side yields three listings, all on land leased from the Musqueam Indian Band. (A fight over lease rates between leaseholders and the band in the 1990s led to a court case and a plunge in market value for homes on band land.) A heritage home in Mount Pleasant is listed at $799,000, despite having suffered a fire last year.

“Affordability is a big issue in Vancouver. And affordability is likely getting worse at a [September] rate of increase of nearly 17 per cent. Because there’s very little chance that the income growth will grow at the same rate,” says Craig Alexander, deputy chief economist with TD Economics.

So if I understand that correctly, prices can’t come down because they are too high and affordability is getting worse? Very strange that those very factors seem to be the only thing that caused the price drops currently happening all over the US, and yet here they will only cause prices to rise slower. Well, I guess they’re the experts.

How do you KNOW that the price of this condo will go up? They tell you! Right now they are ‘only’ asking $319,000, but:

Open House Saturday November 11, 12-2pm. If not sold by Dec. 31, 2006 price will increase to $329,000.

Hoo-hah! What a deal! Buy now and save $10,000 bucks! How many other gauranteed investment deals like that can you find?

Remember when you had to drive all the way out to richmond for your 30 litre containers of Tang? It would take $15 bucks worth of gas and by the time you got there your latte would be cold?

Total drag man.

Well if you live downtown your life is about to change for the better with the new Yaletown Costco.

The cheese selection has been expanded to bring in products that might appeal to shoppers who aren’t just looking for cheese to slap on a school sandwich.

In clothing, a popular area for Costco shoppers, the brands will include such upscale names as Louis Vuitton, Ross said.

“This is a place where you can buy tires and a two carat diamond ring for $19,699,” he said.

Ross said the decision to open a store in the downtown core was made to meet the demands of “one of the most densely populated areas in North America.

“I think sometimes there is a misconception that Costco is always about bulk food products,” he said. “Coming into a Costco, the first thing you hit is major appliances and electronics, plasma TVs, iPods and high end electronics.

“I think that fits very well into the downtown market.”

Awesome! But where am I going to find room in my 500 square foot condo to store all that cheese?

There’s a story in the tyee this morning about the mysterious VHB and the Vancouver Housing Market Blog. I just checked, and he hasn’t posted anything about this yet, which means I scooped him on a story about his site. Boo-yah!

(for the next five or ten minutes anyways)

So what do you do when house prices are slowly dropping and demand has stagnated? Create more demand! According to this article on MSNBC there’s a proposal in the states to change the way that credit scores are calculated to enable those that lack social security numbers or legal status as US citizens to get mortgages based on evaluating a prospective client’s utility bills, rent checks and other payments.

Should the new reporting methods gain wider acceptance on Wall Street and among secondary mortgage lenders like Fannie Mae, housing markets in places like California’s Central Valley would stand to gain the most, the National Association of Hispanic Real Estate Professionals said.

“Gateway states like California and Texas will disproportionately benefit from the housing boom because so many of their residents are immigrants,” said Gary Acosta, the association’s co-founder, speaking from the group’s annual convention in Las Vegas. “Boosting home ownership among these populations is a positive contribution to the overall fabric of our society and our economy.”

So with the current slowdown here, where can we turn to get more demand? Zero percent down and 35 year mortgages don’t seem to be doing it.

Steveb over at realestatetalks posted a link to honestrealestate.ca, and it is perhaps the most entertaining and bizarre example of an honest realtor in BC.

He offers his views on the Fraser Valley market (last updated June 06):

Residential Real Estate SALES so far in 2006 are running at what should become ALL-TIME NEW RECORD-LEVELS! (quickly and decisively topping previous-record 2005, which in turn topped year-earlier record 2004). May 2006 registered as the HIGHEST MAY we have ever seen. Any listing that is at all ATTRACTIVE usually SELLS VERY FAST, often with competing MULTIPLE OFFERS (and selling prices often HIGHER than asking price!).

He also offers spiritual advice and commentary on his status as a wingless earth-angel:

This Realtor, in addition to being an extraordinary and exemplary realtor, is now TOTALLY convinced he is wingless, living ‘EARTH-angel’, in a here-&-now godless heaven. –and, is THIS ever a whole BUNCH OF FUN! — just ASK ME!–

- I’m quickly getting into better physical condition, having so far dropped over 20 lbs.
- I’ve got truly huge amounts of energy & an infectious grin on my face. When I walk into a room, others can readily sense the energy coming from me. Most respond very warmly, positively. A few panic! (they’ll get over it, no one will get hurt)
- I now operate brilliantly on about 1&1/2 hours of sleep a night
- Food seems to be optional, no longer mandatory!
- I can suddenly cook ‘like an angel’
- I’ve got nearly-infallible INTUITION (when I remember to rely on it)
- Sex, even with just myself, is a whole new adventure every time. With my 59th birthday around the corner, I run around with a near-CONSTANT ERECTION that the viagra people would SIMPLE LOVE to be able to SELL you!).

(–NOW, IF MY LOVING BRIDE WOULD JUST PLEASE COME HOME, AND LOVE ME:There’s nothing to fear, really!–)

>—-DOES ANY OF THIS SOUND INTERESTING TO YOU??

.. oh, and thats not all, not by a long shot. Many more details including his connection with the rats, how to talk fun with dogs and his goal of converting as much of the world as possible into living earth angels who are ready to ride ‘the love train‘ – All this and more available at honestrealestate.ca

Just when I was starting to lose interest in Vancouver real estate something like this comes along.

fan-tas-tic!

Remember the good old days when all coverage of the Vancouver real estate market was positive? While you can still find some bright uplifting positive coverage it seems like its getting harder to find under the avalanche of negativity in the news recently.

In this weekends Globe and Mail the ‘financial facelift’ section is running with the title couple urged to pay off debts, forget about real estate, and includes a few negative swipes against our market.

“The couple’s goals are like many others,” he explains. “A house in a decent neighbourhood, kids and a solid retirement. In fact, there has never been a worse time in history to buy a house in Vancouver. It now takes 64 per cent of average pretax income to fund housing costs in Vancouver. House prices in Vancouver cannot rise forever.”

and

“Pay off those debts first, the planner urges, and forget about real estate for a while. House prices in Vancouver could decline within a few years. Waiting may be better than spending a great deal today when there are bargains tomorrow, he says.”

meanwhile over at the Vancouver Sun the front page article in the business section is New house supply outstripping demand, with the following gem:

“A large number of projects were launched over the summer in Richmond and it is taking time for the market to absorb all the units, she said. In New Westminster, Podmore added, sales have slowed because little new supply has been put out. In Maple Ridge, a large amount of the same type of housing is being built and it is taking more time for the market to absorb all the units.”

So if I understand that correctly, Sales are currently low due to the following factors:

- Too many houses on the market
- Not enough houses on the market
- Too much similarity between the houses

I think that about covers it, but lets try to stay positive huh? Where can we turn to for a little ray of sunshine? ReMax forecasts an increase in supply AND price, the best of both worlds! It sure is considerate of them to take the time away from the business of selling real estate and do an impartial study of the market reassuring us all of 8% gains. I think their positive outlook should be an inspiration for us all.

You on the fence! Yes you! Hop down and buy something already! Octobers numbers are in and they don’t look good. Its only a one or two percent price drop in most categories so it’s not too late to stop everything from sliding downhill if we work together.

We’re a couple of months into price drops for single family homes on the west side, so thats where we’ve got to act fast. If you’re a move-up buyer or someone with a hefty down payment its time to take that leap of faith. Buy a place on the west side with no subjects now and then put your house on the market – hey it’s worked out ok for some people, now is not the time for hesitation, now is the time for bold action.

First time buyers: If you don’t start doing your part we’re going to have a lot of move-up buyers stuck in a precarious situation. CMHC will insure a zero percent down payment mortgage so you don’t even need to have any money, just BUY SOMETHING!

Look, I know its expensive out there but thats the price you pay for living in paradise. Just make do with a little less and we can keep the bottom from dropping out of this market. If we’re going to prevent whats currently happening in the US its time for everybody to pitch in and do their part. Now get out there and BUY something!

With sales dropping in Vancouver you may be looking for the next ‘sure-thing’ investment in lower mainland real-estate. Where can you get in and ride prices up-up-up and away?

Burnaby.

Seriously. If the Oma Developement on Madison Avenue is anything to go by this is a can’t lose investment. This 647 sq. foot condo was originally listed in May 2004 for a price of $207,900. It is still available for you to buy, but is now priced at $325,900! Thats nearly a doubling of value even without anyone buying it!

There are several reasons why you should consider buying this unit:

1) Its only 1 minute away from Vancouver!*
2) Price is going up. Buy now before you are priced out forever.
3) Buy it now before its gone. They’re not making any more land to build condos on and there are only 334 suites available.
4) Bob Rennie!®

*not downtown Vancouver, but the far east side of Vancouver that is one minute away from Burnaby.
® actual Bob Rennie not included with suite purchase.