Vancouver Condo Info

CB Developments, the Vancouver developer that decided to cancel buyer contracts and resell houses at their coquitlam housing development has been ordered to cease marketing those units by the provinces superintendent of real estate under the Real Estate Development Marketing Act.

In his decision, W. Alan Clark said there is a “substantial likelihood” the company planned to remarket the properties to new potential purchaser “without providing accurate disclosure.”

Clark said the fact that lawsuits have been filed against CB could affect the value and price of the units, and could influence the decision of would-be purchasers.

Even if the developer did re-sell the units to new buyers, they would likely end up tied up in litigation and might not receive title, Clark said, so he has suspended the company’s right to sell them.

CB Developments has stated that they need to cancel the contracts and try to resell the units for more money due to ‘rising construction costs and increased land values’. Ten years ago I sold a classic car that’s now worth 10 times what I sold it for.. I should really look into canceling that buyer contract.

Full story on the CBC.

Heres a link to a link of a story – Calculated Risk has a post about an article in the Wall St. Journal about foreclosures in San Diego.

A surge of foreclosures over the past year or so has left lenders struggling to sell a growing backlog of homes.
…
At the San Diego sale, houses and condos typically sold for about 30% below the previous sale or appraisal prices. In a few cases, the discounts were around 50%.

… A glut of condominiums also is weighing on the market. Peter Dennehy, a senior vice president at Sullivan Group Real Estate Advisors, a research firm here, estimates that at the current sales rate there are enough condos on the market to last about 29 months.

I’m posting the link to Calculated Risk instead of the WSJ because there are some reader comments attached to the story about BC and Alberta markets that some of you may find interesting.

BC’s #1 industry is forestry which is in serious trouble. Population growth is the slowest in decades. The economy is being kept growing by real estate investment. “Everyone wants to live here” (note contradiction) and “This time it’s different” (2010 Winter Olympics) are religious creeds in BC. I don’t think I have to explain what that portends for the future.

Here’s your open topic for Friday May 11th -

- The ongoing saga of CB Developments
- Island construction hits 30 year high
- Spain fights speculation and fraud

Post your news, links and thoughts on our crazy real estate market here!

Bloomberg has an article about real estate markets that where once ‘immune’ being hit by the US housing market slump. These are areas with multi-million dollar homes that are not financed by ’sub-prime’ credit, yet are seeing dropping prices since the beginning of 2007.

The average price in Westport, Connecticut, home of chief executive officers Herbert Allison of TIAA-CREF and Jeffrey Kindler of Pfizer Inc., and actor Paul Newman, fell 8.2 percent to $1.56 million in the first four months of 2007 from the same period last year, according to multiple listing service data. In Chappaqua, New York, where Bill and Hillary Clinton live, properties sit on the market an average of seven months before they sell, up from five months a year ago.

Wealth and excellent credit have until now spared bedroom communities in New Jersey, Connecticut and New York’s Westchester County from declines in home prices. Now the tightening of credit in response to rising subprime defaults has disrupted the real estate food chain, bringing the national housing slump to Manhattan’s doorstep. Prices fell as much as 18.8 percent this year in 15 of the 24 areas in which data was collected.

“People who may have bought their first home may not be able to do so now, and that stops some of the movement,” said Doug Werner, a broker at William Pitt Sotheby’s International Real Estate in Darien, Connecticut. “Whales eat plankton. If the plankton disappears, what will happen to the whales?”

Housing starts continue to drop in BC – A downward trend that started in January and continues in the most recent report issued by CMHC. Starts are down about 22 percent for the first four months of the year compared to last year. CMHC senior analyst Robin Adamache has the standard disclaimer that this doesn’t ’signal impending problems in the housing market’.

“We do know a lot of projects in the pipeline, and the building permit numbers were up. So we are still expecting that starts this year will come in at the same level of last year.”

Adamache attributes part of the decline to the labour shortage, noting there just aren’t enough construction workers to keep up with the demand.

But homebuyer demand remains strong, she said, because of the influx of new residents who need a place to live.

She said about twice as many new jobs have been created this year in B.C. as in the same period last year.

So it looks like its not just first-time home buyers that have it hard in this real estate boom – Developers are seeing rough times as well. Look at CB developments for example, they recently had to cancel all buyer contracts on their coquitlam housing development due for completion April 2006 since they could make more money by reselling them today. CTV has an article about a disappointed buyer that was all ready to move into his new house:

However, he was told by the developer that at current prices, there was no way the company could break even by selling the homes for the original price.

CB Development’s operator, Craig Lochhead, said “that the only choice that they had was to sever the contracts with all the existing homes and re-list the homes at current market value,” said Bulat.

Bulat was also told that he would not be given the rights of first refusal — meaning he’d have to compete with other buyers to repurchase his home.

So now the original buyers have to look for new homes and the developer has to look for new buyers. And if that wasn’t bad enough it sounds like this whole thing is really going to cut into the developers family time as well, since his wife is the real estate agent listed to sell these homes the second time around. Its tough all over!

Karen wrote in to let everyone know that the CBC show B.C. Almanac will be focusing on real estate today between 12:00 and 2:00 pm on CBC radio one (690 AM). It could be an interesting show to listen to, and its interactive with the open line segment!

If you have questions or comments during the show you can give them a call on their open line Numbers:
LOWER MAINLAND: (604) 669-3733
TOLL FREE: 1-800-825-5950

I hope to catch some of this show – it looks like they have an online archive if you miss the live broadcast. I’m curious to hear what the general opinion is of the market out there beyond the market watching boards and blogs.

Here’s your open-topic free-for-all post for friday May 4th.

-Canadian construction slowing.
-Where are the nice condos?
-Vancouver’s still cheap to saudi royalty.
-New condos don’t need parking?
-18,000 grow-ops suspected in BC.

What are you seeing out there? Post your news, links and anectdotes here!

Well the REBGV has just released their sales stats from april – thanks agentwill for my copy. So where did prices go last month according to the Real estate boards benchmark figures?

Up.

Yep, thats right – we have a new ‘high score’ in every category – The detached benchmark was at $695,069, the attached benchmark hit $432,490 and apartments where at $355,108. Here’s my standard short-term tracking graph updated with last months numbers:

Real estate in the GVRD is now more expensive than its ever been with prices drifting farther and farther away from rental values – one of my favorite examples was a house listed through Rob Chipmans office. It was rented for $1200 per month and was put on the market with an asking price of $620k. I’m not even going to bother running the numbers on that.

Apparently its not even worth building new rental property in Vancouver anymore – you just can’t get the cash you can from condo-hungry buyers.. So where does it all end? Your guess is as good as mine, but the number of listings are going up and the number of sales are dropping so I guess eventually we’ll figure out if there’s anything to that old ’supply and demand’ theory.

So there you go – Numbers up in every category, this must be an interesting time to be a speculator.. Deal or no deal? Do you let it ride? Can prices go up even more? .. We’ll just have to wait until next month to find out.

David Lereah – the head economist for the National Association of Realtors in the US is stepping down to take a job with an online real estate service. So far his sunny outlook on the US housing market has failed to be reflected in reality with foreclosures up, inventory up and prices down in many many markets. He’s been accused of ‘cheerleading’ the US market and dubbed ‘David Liar-ah’ by bloggers who feel his reports have been biased and misleading.

The economist who prodded investors into the U.S. housing boom and has been skewered by bloggers during the bust is leaving a top real estate trade association, the group said Monday.

David Lereah, the author of “Are You Missing the Real Estate Boom?” will leave the the National Association of Realtors by the middle of next month after serving as the head economist for seven years, a spokesman said.

Lereah was the Realtors’ analyst through the five-year run-up in home values that ended in 2005, and he has continued to deliver the group’s outlook through the current downturn.

Here’s a link to the full article about the ‘anti-chicken-little’ lereah on CNN.