Vancouver Condo Info

This is your open topic post for Friday August 31st. Whats new this week?

-We’re the 2nd most overpriced market in North America!
-BC government provides ‘home kits‘ for disadvantaged.
-Locals drive the island market
-Sub-prime problems hit high-end housing
-Housing continues to be a drag on growth
-Creative loans got us into this mess, can they get us out?

What are you seeing? Will our market soar or sour in the fall? What happens after 2010? Post your thoughts, news and links here and have a great long weekend!

Looks like the boom has gone bust in Edmonton:

“There’s no sense reducing any product by 5% because it just doesn’t work. We’re seeing reductions of 10% and more,” he said.

Jon Hall, with the Edmonton Real Estate Board, said 85% of single family homes that sold over the past 30 days went for less than the asking price. On average, the final figure was nearly $12,000 less than the seller was seeking.

Condos didn’t fair much better, with 79% going for less than the asking price.

This is interesting because much like major US markets two years ago the market is dropping despite a very healthy economy.

Pratt said she’s also heard some homeowners cashing out and moving back to their home provinces, like Saskatchewan, where homes are cheaper.

Keith Mackie, fleet director for Budget Rent-a-Car, sees it every day. He said demand for moving trucks going to Saskatchewan from Alberta and B.C. has recently increased three-fold.

“It seems like a lot of people are going home,” said Mackie, who’s based in Edmonton. “There’s no doubt about it, it’s a significant number.”

Don’t let anyone tell you Vancouver isn’t special – According to this article in Forbes we’ve got the 6th most overpriced real estate in the world!

The rankings were compiled by calculating an effective annualized rate of return on a property based on annual cash flows derived from renting and adjusted for capital gains tax, transaction fees, operating costs and maintenance, appreciation and inflation. We then flipped the return rate to resemble the more familiar price-to-earnings (P/E) measure.
…

Representing North America in the world’s top 10 were Los Angeles (5th place at 26.88) and Vancouver (6th at 26.81).

Thats a .07 difference between us and LA, almost seems like a currency fluctation could switch up those places and give us the coveted title of MOST OVERPRICED real estate in North America!

And tell us Forbes, why does the relationship between rental yields and housing costs matter?

The relationship between rental yields and housing costs matters because a low rental yield is a good indication of a stretched market–one that has a bubble–since these markets are more likely to face downward price pressures or grow at a slower rate.

Its Friday and that means open-topic time. Here’s a few stories to help kick off the discussion:

-Thousands of new downtown condos available soon!
-The empty husk at 1133 W. Georgia to become a hotel
-Federal property sale attacked as a give-away
-City makes two offers to end strike
-Plenty of subprime money still available
-Countrywide’s CEO sees housing led recession

So what are you seeing out there? Post your news, thoughts and links here!

We’ve talked about this subject as recently as last weeks post on local stoned construction crews, but there’s an article on MSNBC about the problems caused by shoddy boom-time home construction in the US, with some blaming the high number of foreclosures partly on that issue:

“Everything you read says that the rise in foreclosure has to due with subprime lending,” says Nancy Seats, president of Homeowners Against Deficient Dwellings, a nonprofit consumer protection group for homeowners dealing with defective construction. “But [defective construction] absolutely has something to due with the rise in foreclosures. There were absolutely investors that pushed up the price of housing, but there is no question that there are home buyers that were taken in and scammed big-time.”

So will our experience with the Vancouver leaky condo debacle protect us from a similar problem or should we be taking an extra close look at construction quality during our own boom?

Dear powers that be,

My investments aren’t working out the way that I hoped they would and now I’m in a bit of a tight spot financially. I’ve got to tell you this has shaken my confidence in the system a bit, but if you could provide me with a bailout I could get back on my feet. I have a foolproof plan to get caught up on my bills, I’m going to buy a bunch of playstation 3′s and sell them on ebay next Christmas. After all, everyone wants a playstation 3 and I hear they’re a rock solid investment.

Sincerely,
America

Things aren’t quite looking up state-side yet: Countrywide Financial is starting to layoff employees and Capitol One is closing its mortgage unit, but things are certainly different up here.

The Canadian Real Estate Association has just announced that its product will sell very well this year predicting record home sales for 2007.

Klump said the home-financing market in the U.S. and in Canada are completely different.

“(Canadians) have to pass tighter credit standards in order to get home-mortgage financing,” Klump said. “So, there’s no unwinding in Canada as there has been in the States.”

Its good to know that here in Canada we’ve got higher standards for our No-Doc zero-down Neg-am 40 year specu-vestor mortgages.

Here’s whats happening right now in the “other” Vancouver:

According to the latest report from “benchmarks,” a service of Riley & Marks appraisers in Vancouver, sales of new and pre-owned homes were off 19.3 percent last month with just 719 homes sold, the lowest number for July in five years. But only in the past two months has the median monthly sales price been lower than a year ago, down 2.9 percent in July from 2006.

So is this a buyers market? “In some higher-end categories of $350,000 and up, maybe.”

Here’s your open topic post for Friday August 17th, 2007.

Some of the stuff thats going on (I’ll add some links later)

-Liquidity crisis
-Interest rate increases
-Affordability limits
-Lots of construction

What are you seeing out there? post your news, links and anecdotes here!

So much for the subprime problem being ‘contained’. Marco sent in these links to coverage of the ongoing fallout from the US housing market problem:

-Coventree’s problems continue: can’t find buyers for debt.
-Vancouver based mine developer Redcorp Ventures caught up in credit mess.
-The credit crunch is global.
-But hope looms in talk of a Canadian bailout.
-Meanwhile down south: US housing slump starts in July

How much longer will our real estate market exist in a vacuum?