friday free for all!
Here’s your open-topic post for Friday July 20th. Here’s a few stories I’ve noticed this week to kick the discussion off:
- Whats that smell? City workers strike looming.
- 65,000 homeowners in BC affected by leaky condo issue?
- Young families move to the suburbs.
- New blog about bad landlords in Vancouver.
- Buyers remorse: just get over it?
- US home builder confidence plunges again in July.
- Ohio AG files suits against 10 lenders for appraisal fraud
- Fed, Lenders and Wall st. to blame for US mortgage crisis?
…everyone but the buyer it seems. What are you seeing out there? Post your news, anecdotes, links and commentary here!
July 23rd, 2007 at 7:58 pm
So with all the building inspectors on strike are these CONdos going to take longer to complete.
July 23rd, 2007 at 11:18 am
This is interesting. Top rankings for cities in AsiaThe top five cities in Asia were: Auckland (tied for 5th)Sydney (tied for 9th)Wellington (12th)Melbourne (17th)Perth (21st) Osaka (tied for 42nd) was the lowest ranking Asian city in the top 50.Top rankings for cities in EuropeThe top five cities in Europe were: Zurich (1st)Geneva (2nd)Vienna (tied 3th)Dusseldorf (tied for 5th)Frankfort (7th) The lowest ranking European city in the top 50 was Milan (tied for 49th).Top ranking for cities in the AmericasThe top five cities in the Americas were: Vancouver (3rd)Toronto (15th)Ottawa (tied for 18th)Montreal (22nd)Calgary (24th) The lowest ranking Americas city in the top 50 was Seattle (tied for 49th).
July 23rd, 2007 at 11:08 am
I remember Toronto was voted best place in the world to do business or to live or something like that about 10 years ago.All over the city there were posters saying "TORONTO IS THE BEST PLACE TO LIVE – VOTED NO 1". I found it so strange. It was almost like brainwashing people. Don't comp[lain. This is the Best Place to Live. If you said you wanted to live in Switzerland, Ireland or anywhere else people would get so upset. Now I think TO has sunk down to 20th or something.
July 23rd, 2007 at 11:02 am
Ken,I think they thought it was tacky driving around with it written on license plates.They don't think they are any better or their country or city is great. Europeans are always complaining. Anyway, they are only in their 30s and did not have much to do with the colonies.I think it is tacky too! Like when we walk around Europe with Candian flags all over us. Silly and naive.Some people think Vancouver is the greatest place on Earth. Some people think Tuscany or Salt Spring or Holt Renfrew are the best places on earth. If in fact Vancouver is the BESTEST PLACE ON EARTH then maybe property should be so expensive because everyone in the whole world wants to live here and living is the BEST PLACE on EARTH is just worth the price. Maybe we should then not complain about the price of property. Gosh! Canadians get offended so easily if anyone says anything negative about our country.
July 23rd, 2007 at 9:26 am
Ken:Europeans should be consistantly embarassed, can't believe how backwards they are.You certainly can't accuse the Europeans of modesty and humility. I think BC's claim is a little over the top, but people in glass houses…On a related note, I was in London recently and its amazing to spend some time there and actually wonder how these people at one time ruled the world, nevermind the fact that they currently enjoy a great standard of living on the world scale. Ditto Italy.
July 23rd, 2007 at 9:25 am
tulip-Mania2:In Asia, 100+ story buildings can be considered a reliable predictor of economic downturn. By the time a corporation, a city, or even a nation decides to build the tallest building in the world, it's time to brace for the coming collapse.
July 23rd, 2007 at 9:20 am
Inwonderment: From your story I see the completely different logics people have regarding rent and buy. Rent in Vancouver is at most double of rent in Ottawa, while buying in Vancouver is at least triple the cost of buying in Ottawa. Somehow people would refuse to pay the double rent in Vancouver for the next year, but have no problem commiting to paying triple mortgage for the next 25 years. Just unbelievable. I guess prices going down is just too foreign for most people, and buying is never throwing money away.
July 23rd, 2007 at 8:29 am
"The riskiest housing marketsA new report projects home-price declines for the next two years. The riskiest markets are in Florida, California, Nevada and Arizona. Here's how to ride out the hard times."This article is more laughable "predicting the past" stuff.For example, look at all the cities in Florida, which are already tanking big time, which have a predicted 50% or so "probability" of price drops. Ditto Sacramento.Yawn.
July 22nd, 2007 at 9:39 pm
Real-estate values and construction have peaked one to two years before a depression, and have stayed at peak levels until the onset of the downturn.The historical evidence is consistent with the theory that speculative booms in real-estate prices and construction act as an impetus for the downturn itself.
July 22nd, 2007 at 8:23 pm
I must just be getting completely cynical in my old age – but I can't help but read inwonderment's story and immediately think:The realtor lied to get the buyers from Ottawa to panic and make a quick decision. God, I hate being this jaded.
July 22nd, 2007 at 6:42 pm
hadenough said "They thought it was very naive and childish.It is so embarassing." Actually in general I feel Europeans should be consistantly embarassed, can't believe how backwards they are. Some of them even think the monarchy is special, and believe it of not, most of them forget that they have caused almost all the present day strife through there colonial practices. That would apply to the majority of European countries, and yes I've been there many times, most I can say is they should maybe for once practice what they preach. BC IS the best place on earth, no thanks to our politicians of whatever stripe. It was a beautiful natural environment. (Emphasis on was)!
July 22nd, 2007 at 5:52 pm
I think Inwonderment was referring to the other 10 buyers who bought 10 of the 12 condos his friends were planning to see.
July 22nd, 2007 at 3:25 pm
inwonderment,It sounds like they were extremely wealthy buyers with a large down-payment and excellent credit. People like that aren't taking the same risk as Mr. and Mrs. Howmuchamonth.
July 22nd, 2007 at 3:11 pm
wow, are east van small one beds commanding 1000/month? is this the norm?
July 22nd, 2007 at 3:04 pm
This is changing the topic a bit but it I thought it was an interesting story some friends told me at lunch yesterday before they departed Vancouver.It is their experience with Vancouver real and estate and I’m not sure if this is a story about the Vancouver condo market or about how we do business in Vancouver, but here is the story of my Ottawa friends. My friends contacted me about their child who was moving to Vancouver to do a five year hospital residency. I gave them the cautionary notes about BC real estate, they were more inclined to rent anyway because it had worked well while the child was at medical school in another large Canadian city. They tried to find a rental place from Ottawa but gave up on that idea and in a bit of frustration decided to buy. They arranged financing and contacted a real estate agent and who lined up 12 or so condo properties for them to view when they arrived in Vancouver. They loaded up the car and drove to Vancouver. A week later they arrive prepared to look at the properties. The agent promptly told them only two of the properties were left and they could view both of these properties if they wished. Given a lack of time – they had to get back to their business in Ottawa they took one of the two available condos. So I guess the market still is red hot.
July 22nd, 2007 at 3:00 pm
I’m not sure if this is a story about the Vancouver condo market or about how we do business in Vancouver, but here is the story of my Ottawa friends. My friends contacted me about their child who was moving to Vancouver to do a five year hospital residency. I gave him the cautionary notes about BC real estate, they were more inclined to rent anyway because it had worked well while the child was at medical school in another large Canadian city. They tried to find a rental place from Ottawa but gave up on that idea and in a bit of frustration decided to buy. They contacted a real estate agent and lined up 12 or so condo properties to view when they arrived in Vancouver. They loaded up the car and drove to Vancouver. A week later they arrive prepared to look at the properties. The agent promptly told them only two of the properties were left and they could view both of these properties if they wished. Given a lack of time – they had to get back to their business in Ottawa they took one of the two available condos. So I guess the market still is red hot.
July 22nd, 2007 at 2:53 pm
Rentah,Assuming 25% down, the monthly payment on the large place is around $2,250 a month, not counting maintenance fees and taxes. Not an insignificant part of most people's take home pay……I too am in the 45-50% price drop range, which means my neighbours think I am slightly less sane than the woman down the street who lives with 60 cats…….
July 22nd, 2007 at 11:06 am
clarke:Remarkable. That's a price to net monthly rent ratio that works out to almost exactly 345:1 for both of those units.Keep in mind that historic norm is 150:1 (perhaps arguably as high as 200:1).So these units are both overvalued by 100%, as per historic norms.(This is where many bears get there estimations of a 50% crash prediction. Count me in that small group).
July 22nd, 2007 at 10:58 am
"Ultimately the union is not in a position of power and is unlikely to gain anything by going on strike."True, and once the summer is over, the city will have even less incentive to meet their demands.
July 22nd, 2007 at 8:54 am
Ultimately the union is not in a position of power and is unlikely to gain anything by going on strike. In the past 2 strikes, the union has lost and its members lost several weeks of wages. As long as the employer does not have a profit motive, a union will never gain a position of power in collective bargaining negotiations. Is the proposed CBA fair? Maybe not. Is it unfair? It's not as if this CBA is going lower the bar on work conditions back to the 1800s. The question of fairness can be answered by determining deep down what the employee thinks he/she is entitled to versus how employees working in private corporations are treated. A comparison would likely conclude that the treatment is equal.
July 21st, 2007 at 8:19 pm
"clarke: Do these units have condo maintenance fees?"Yep. It works out to a monthly levy of around $0.26/square foot.
July 21st, 2007 at 7:09 pm
I don't personally know any of the city union members, but I fully support them – I just heard an open line discussion on the issue on CKNW and to me it sounds like the union has a reasonable stance and Sam Sullivan just comes across as a jackass (what else is new). Its a drag not having the trash picked up, but its hardly the end of the world, and its not like we're not used to it in Vancouver.
July 21st, 2007 at 4:54 pm
The city is offering a 39 month contract and the union wants either a 36 month or 48 month contract. The city rejects both the 36 and 48 month durations because of the olympics and municipal elections respectively. In past years, councillors have avoided holding elections during collective bargaining periods out of fear of union manipulation of election campaigning. CUPE 1004's Mike Jackson states that it isn't likely that there will be much money left in city coffers after the olympics so the unions prefer the shorter contract. Other major points of contention in negotiations include removal of a new contract clause that stipulates that new job postings can be posted internally and externally at the same time, and higher wage increases (14% vs 9.75%).You can read the union's take on it here: http://cupe15.org/Contract%20Counterspin.pdf
July 21st, 2007 at 4:49 pm
clarke: Do these units have condo maintenance fees?
July 21st, 2007 at 3:48 pm
It looks like there are still buyers. In my complex in East Van, one 500 square foot went for $300,000 (asking price) and a 900 square foot top floor unit went for $475k (asking was $449k). As a number of units are rented in this complex, rent to own comparisons are easy to do. The smaller one would likely garner $1,000 a month in rent, and the larger unit could pull in around $1,600. So between the rents, and the fact that neither of the two buyers appears to be a wealthy foreigner, I am a little mystified. I am not sure what either party was smoking so that these purchases seemed like a good idea, but I have to score some!
July 21st, 2007 at 3:40 pm
I have heard that one reason for the lack of resolution of the garbage strike is the length of the next contract – the City wants a 36 month contract, and the union wants a 30 month contract – so they can renegotiate right before the Olympics. If this is true, it makes a lot of sense, as both parties wage offers are not that far from each other. If it was binding arbitration, odds are the mediator would go with the City.