Vancouver Condo Info

Police have seized a large cache of ‘extra-ordinary’ weapons from a condo near the science world skytrain station.

Police evacuated some 40 residents as a precation, after finding a number of firearms and explosive devices. CTV reported police seized a tripod-mounted military-style machine-gun, rifles, explosives, and ammunition.

Oh, come on now - the neighborhood’s not THAT rough.

Police reportedly called in military explosives experts to help them assess the weapons. Chapman said there is no indication the man was involved in a gang or terrorist attack.

Neighbour Dave Paauwe said there are a number of rental suites in the condominium building, and grow-ops aren’t uncommon.

Articles in the Edmonton Journal and Globe and Mail

Speculators who were looking to make some quick and easy cash by ‘flipping’ properties are seeing bad times all over the US, but it’s particularly bad in Clark County Nevada (Las Vegas) - One in every 30 houses there started the foreclosure process last year.

More than other states hit by the mortgage lending crunch, the high foreclosure rate in Nevada, California and Florida was driven by speculation, said Rick Sharga, vice president of marketing for Realty Trac. “It was a combustible mix of risky loans and risky real estate deals,” he said.

Russ Valone, the chief executive of research firm MarketPointe Realty Advisors, said speculators in San Diego were putting deposits on downtown condo units under construction, assuming they could sell them at a profit when they were finished.

“There were guys out there that were rolling the dice just as if they were going to Las Vegas,” Valone said.

When the market slowed, many buyers forfeited their deposits, or let their properties get repossessed by the banks. As a result, the inventory of unoccupied condo units downtown since early 2005 has soared fivefold, he said.

That article also mentions that predictions of a 1% price decline across the US in the next year has pretty much killed ‘flipping for a profit’ in these previously frothy markets.

Here it is, your rainy friday free-for-all open topic post.

Whats going on out there?
-City staff moves to protect rentals
-no byline column in the Sun says bad idea
-a critical look at the Liveable Region plan
-What boomer buyers might look for
-US economic growth at 4 year low
-Pacific NW & Texas not seeing the slump

What are you seeing? Post you news, anectdotes, links and what-have-you here!

Paulb pointed out this article in todays Globe and Mail about the drag that the US Slowdown is putting on Canadian exports. The Bank of Canada says that slower growth in the US is expected to ’suck the heat’ out of the Canadian economy which will balance higher inflation here. In its semi-annual outlook the BOC says that they expect inflation to reach 3% by the end of this year.

“With the U.S. slowdown now expected to be somewhat more prolonged, net exports should exert a slightly greater drag on growth in 2007,” the outlook says. “All told, the Canadian economy is expected to expand at a rate slower than potential through 2007, and in line with potential through 2008 and 2009.”

Potential is considered to be about 2.7 per cent growth annually.

Total inflation is expected to return — on its own accord — to the bank’s 2 per cent target by mid 2008, the bank said, but will peak at about 2.8 per cent in the fourth quarter of this year.

Core inflation — which excludes food, energy and other volatile items — will remain above 2 per cent for a few months, returning to target by the end of 2007. Although housing prices are no longer a concern to the bank, capacity pressures will keep core inflation high.

I’m always suprised at how specific they get with their predictions - How has their track-record been for previous BOC outlooks?

Reductimat just gave me the heads up on this story: The B.C. Real Estate Association is seeing lower home sales and more inventory going into this spring and they predict this trend will go on due to affordability problems cutting into demand from first time buyers.

The Association’s Chief Economist Cameron Muir says BC housing starts will likely drop 7% this year and a further 6% in 2008. He says the BC market is starting to return to more balanced conditions, and the demand for housing has dropped a bit.

Muir says that’s good news for some home buyer’s deep pockets because there’s more inventory to choose from, and less sales pressure to put a bid on a home right away.

Theres a bit more detail in this story in the Sun where there’s no prediction of lower prices, just less demand and more supply.. clearly they’ve studied some esoteric economics courses that I’m not familiar with.

I was in an airport in Southern California this morning when I spotted this headline on USA Today and upon my return to town it made me take notice of this article in the Vancouver Province about the recent property tax increase in Vancouver..

Every so often we post a story about property taxes in Vancouver and inevitably someone posts a comment based on the assumption that higher assessment values mean higher property taxes. Of course property taxes in Vancouver aren’t like PST or GST and someone always seems to be around to point out that fact - property assessment values in Vancouver only determine your share of the total tax burden compared to your neighbors property. Higher property values don’t create a property tax windfall for local governments, in fact - if we can base anything on the US example, by the time government gets around to grabbing more property tax based on inflated property values the boom is already over.

So what’s going on here? Is it just that governments move at a pace that’s too slow to react to market changes? Are we at the tail end of a boom locally? Are we due to hear complaints about taxes based on “unrealistic property assessments” or will the recent Vancouver property tax increases simply be absorbed painlessly into future appreciation?

It’s Friday so that means we do our open topic thing here at Vancouver Condo info - This is the place to post your links, news, and the things you’re noticing in our crazy-go-lucky real estate market.

A few random things:
-Vancouverites more willing to live in condos.
-Is the US housing market a tsunami waiting to hit?
-Frauds adding to foreclosure pain in the US.
-Rennie temporarily loses ‘crackberry‘ connection.
-Can Seattle and Vancouver learn from each other?

What are you seeing? Post it here!

According to this story on News 1130 Vancouver city council would like to double property tax for homeowners from the original four percent increase they recently decided on. This move is an effort to shift some of the tax burden from businesses in the city to homeowners.

Councillor Peter Ladner explained businesses have been paying six times what homeowners pay in property taxes. He said, “We have to catch up because we are hearing very clearly from the business community that our taxes are killing them, and they’re killing our neighbourhoods and they’re making it impossible for people to keep businesses going in the city.”

If this proposal goes through, local businesses would see very little or no increase in their tax bill. Their goal is to bring our current 6-1 ratio closer to the standard 3.5 to 1 ratio of other cities, and what better time to raise taxes then a housing boom?

D.R. Horton “Americas home-builder” saw a bit of a drop in their Q2 profits.. Quite a bit of a drop actually: an 85% drop in profit from last year. That works out to be 16 cents a share, short of analyst expectations of 27 cents a share.

“Market conditions in the homebuilding industry continue to be challenging in most of our markets as inventory levels of both new and existing homes remain high, and further increases in the use of sales incentives continue to put pressure on profit margins,” said D.R. Horton Chairman Donald R. Horton.

CIBC World Markets says that the average Canadian house price will double in the next 20 years:

Yes, the number of people aged 45 to 54 is expected to drop by 2.5 million by 2026 as the baby boomers age. But this age group accounts for only 12 per cent of the housing demand, it said.

Most home purchases take place when people are younger. CIBC says 68 per cent of all first-time home buying is done by people aged 25 to 44. That group is expected to decline only slightly in the coming two decades.

So only slightly less demand = double prices. They base their prediction on three factors:

-Interest rates are expected to stay low
For twenty years? Wow! That’s some crystal ball!

-Immigration is expected to increase
Good thing since its so much lower in BC now than the 90’s.

-New mortgage products will make home ownership more accessible.
What great news! You wouldn’t happen to offer any of those would you CIBC? You know, like those great 60 year mortgages in Japan?

Update: Cailin points out the obvious spin on this story. If all these positive factors come into play and house prices ‘double’ in the next twenty years that works out to be about 3.75% a year compounded, or a bit less than a presidents choice savings account, but I guess that doesn’t sound quite as impressive huh?