Vancouver Condo Info

Zai sent in a link to this Reuters article showing the dismal result of condo speculation in American cities.

MIAMI (Reuters) – Rust pokes through the peeling paint on the railings, pest control has been curtailed and the palm trees are no longer being fertilized at the 1940s-era Miami Modern condominium building in Miami Beach.

The condo association has been forced to cut expenses because the owners of 11 of the 28 apartments in the modest two-story building are delinquent, victims of a mammoth U.S. real estate collapse that has hit Florida especially hard.

With so many cash-strapped owners failing to pay their monthly fees for upkeep, the condo board last year had to raise $40,000 with a special levy to fill a giant hole in the $80,000 annual budget, but only managed to collect $19,000 from the owners who are still able to pay their bills.

Florida’s condominium and homeowners’ associations are facing what experts call a trickle-down disaster from the property crisis. Dozens and perhaps hundreds of condo buildings have budget shortfalls as thousands of owners, under water on their mortgages or in foreclosure, stop paying monthly fees.

“I call it a death spiral,” Miami Beach city commissioner Jerry Libbin said. “It’s a catastrophe in the making.”

Fortunately for them things can’t possibly get worse because Florida is running out of land and has many wealthy foreigners that want to live there.  Some people consider it ‘the best place on earth‘.  I also hear that they have an illegal drug trade that pumps a lot of undeclared income into the economy – that should help keep property values from falling further.

On the same topic the radio series This American Life has an interesting episode titled Scenes from the recession that touches on the same issue happening in Chicago.  There’s a horror story in that episode about a ‘luxury’ condo development with hardwood floors and granite countertops where the owners can no longer get in touch with the developer and have recently discovered that the building was built directly on unpacked dirt.  The entire show runs about an hour and is worth a listen if you have the time.

From todays Vancouver Sun:

VANCOUVER — The number of real estate sales may have bounced back in March compared to February, but they are still well below levels of a year ago, and so are prices. What is clearly up, however, is the number of condominium developers seeking creditor protection or going into receivership.

It started in June 2007, when the Riverbend condominium project in Coquitlam was the first to succumb and the Bowra Group was appointed receiver. Since then the Bowra Group has been involved in 11 more developments that are struggling and in creditor protection until they can restructure or have gone into receivership.

“I think it’s just a sign of the economy. The forest industry has been in trouble for some time and has its casualties, and the real estate industry has been challenged for a while now,” Bowra group president David Bowra said in an interview.

The article blames problems in credit markets and not high prices or overbuilding for the ‘pinch’ that developers are currently feeling.  In other news, markets dropped today on weak building permit numbers, which fell 16% nationally in February.  In BC we actually saw an 86.5% surge in February building permits offsetting the decline in other provinces.

We’ve reached the end of another work week, so that means it’s time to do our news round-up and open topic discussion.  Last week Dave beat me to the free-for-all post and to his credit he managed to find a batch of positive or at least ‘less negative’ news stories.  This week I’m back in the drivers seat and that means old-testament style bad news mixed in with the good…  Seems it’s still a lot easier to find the bad news.  Here are some stories that have come to my attention this week:

-March home sales surge from last month, down over the year
-Vanoc: economic downturn means no profit for 2010
-West Van: A good place to go through foreclosure?
-Holborn re-evaluate Ritz project
-Job seekers swarm to Atlantic provinces
-Unemployment hits men hardest
-Carney warns of too much stimuli
-GMAC gambles on riskier borrowers
-Savvy: Leveraging equity in a falling asset
-Madoff mansion loses close to $2 million

So what are you seeing out there?  Post your economic news, links and anecdotes here and have an excellent weekend!

I don’t know if the real estate market in Vancouver has ever only declined for one year, particularly at the beginning of a global recession, and I know what most of you think about that question anyways, so I won’t ask if you think we’ve hit the bottom of the real estate correction..

I am however seeing encouraging signs that we’ve hit bottom of the bursting real estate bubble blog bubble though, despite the disappointing news yesterday of Condohypes closure.  We originally called this bubble at the beginning of 2007, and at the start of this year we reported on the apparent bursting of the bubble blog bubble.  Now however, we get news that Fish is back.  That link has been updated on the links to the right, along with a belated correction of the link to Housing Analysis.

Is this just a spring bounce or the return of the Vancouver bubble blog bubble? Either way we’re always like to see new independent sources of information and opinion on the Vancouver real estate market, even if they’re old sources.

So when you change your mind Condohype, we’ll be happy to welcome you back.

The government of Canada is moving farther away from it’s policy of not running large budget deficits with today’s announcement of a new “budget deficit surplus” policy:

Today’s announcement by the government has surprised and angered many supporters of the Harper government, but newly appointed spending secretary Amhed Uhpnaym argues that it’s an important first step to getting the economy back on track.

“we looked at all our options and decided this was our most prudent option at this time.” explains Uhpnaym “Unemployment levels are rising, and our largest trading partners aren’t showing any signs of a quick recovery from this recession.”

“On the positive side, prices on Vancouver real estate are at a three year low! Have you seen some of the incredible deals out there? By running a surplus deficit now we’ll have enough available Capitol to invest at these rock bottom prices. I mean seriously, only $600 per sq foot in the prime edge of Yaletown! It’s time for us to hop down off this fence and invest, our children will thank us.”

The plan announced today will see an additional 2.8 trillion added to the deficit, which will then be used as down payments on presale developments across the lower mainland. The prime minister is said to currently shopping at Ikea for a smaller couch that will fit his favorite floorplan and was unavailable for comment.