Brand new house $130k

What’s this, builders making a profit on new houses at $130k?

Apparently only in Vegas.

Yes, after a 60% drop in house prices builders are somehow still in business making new homes and selling them for under $200k.

“The single largest impact has been houses under $200,000,” Beville said. “Homes in the $130,000 to $190,000 (range) are getting a lot of love. The ones in the $200,000 to $300,000 are getting a little bit less.

Meanwhile in Vancouver even if you get the land for free it’ll cost you $270k to build a 500 sq foot laneway home.

Construction cost is high in Vancouver for a few reasons: permits, cost of materials, cost of labour.. but there’s really only one reason construction cost is so high: people are willing to pay for it.

It’s not like construction quality here is known for it’s quality (leaky condo crisis) and we even make use of unpaid illegal immigrant labour and still we pay these prices?

Ridiculous.

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blueskies
Guest
blueskies
4 years 2 months ago

In 1996 we bought a Yaletown studio
for $92K, developer had many to choose from.

In 2002 building had a special assessment due to shoddy construction proceedures.

Development company (numbered entity)
no longer existed, nobody to sue.

Sold unit in 2004 complete with tenant.
Since then building has had 2 more
assessments.

I expect to see sub $100K units again.

patriotz
Member
4 years 2 months ago

FYI median household income in Clark Country (metro Las Vegas) is $56,258 pa, just a bit under metro Vancouver I think.

http://quickfacts.census.gov/qfd/states/32/32003.html

fixie guy
Guest
fixie guy
4 years 2 months ago

“Meanwhile in Vancouver even if you get the land for free it’ll cost you $270k to build a 500 sq foot laneway home.”

28 years old living in your mother’s back yard in a cottage shared with siblings is no way to go through life, son.

Simple
Guest
Simple
4 years 2 months ago

Double Teranet HPI out tomorrow! I’ll prepare the fan for impact.

jesse
Member
4 years 2 months ago

Costs are also higher due to building code, but also 1-offs like this laneway, likely customized to some degree and infilled over top of an existing urban scape, are more expensive than knocking off a whole division on a desert.

The best part of that laneway article is how the mortgage is cashflow positive… assuming zero land costs. Great stuff. Vancity is really pushing these co-housing mortgages. I guess it makes sense for a cooperative to be advocating co-housing. I just see episodes of Big Brother but maybe I’m missing something.

Anonymous
Guest
Anonymous
4 years 2 months ago

“illegal immigrant workers”? The original articles say “migrant workers”.

Do you see the difference?

Anonymous
Guest
Anonymous
4 years 2 months ago

@patriotz: “FYI median household income in Clark Country (metro Las Vegas) is $56,258 pa, just a bit under metro Vancouver I think.”

And about the same as New York (same source).

Anonymous
Guest
Anonymous
4 years 2 months ago
@jesse: “The best part of that laneway article is how the mortgage is cashflow positive… assuming zero land costs.” The thing nobody talks about on the laneway housing is you have to give up your garage and parking to build it. That is far from free land. You own a million plus property with no covered parking or garage space to store a lawn mower, etc. Covered parking in condos goes for 40K to 50K each spot in Vancouver so you can add that to the cost of the laneway house. And that 270K (or 370K) laneway house also gets… Read more »
rp1
Guest
rp1
4 years 2 months ago

@Anonymous: “What will the street parking look like in neighborhoods with SFH + suite + laneway house all with no parking?”

No different than “single family homes” with 3 suites. Competent city planning would have produced low-rise apartment buildings with underground parking. Vancouver is a city in denial.

fixie guy
Guest
fixie guy
4 years 2 months ago

5 jesse Says: “Costs are also higher due to building code…more expensive than knocking off a whole division on a desert.”

That may be but it should be shown instead of stated. Has anyone seriously broken down external costs like code compliance between markets? Las Vegas has major water issues affecting delivery of municipal services, for example.
It’s also hard to envision building codes more lax than home of special Strata assessments.

patriotz
Member
4 years 2 months ago
@Anonymous: “And about the same as New York (same source).” Likely New York County, aka Manhattan. Of course only the rich buy in Manhattan. The outer boroughs have more middle-class ownership (and a slightly lower median income), but remember that NYC as a whole still has the highest % of rental apartments of any US city. That means you will have a higher price/income for the same level of affordability to buy. They don’t seem to have figures for metro New York (which includes parts of 3 states) but Westchester and Nassau counties just outside of NYC have median household… Read more »
boogeybear
Guest
boogeybear
4 years 2 months ago

How much does it cost to build a 500 square foot garage?

About $50,000.

How much does it cost to finish 500 square feet in a basement?

About $50,000

Don’t build a laneway house.
Build a double garage with a finished suite.
Anyone having one of these suites built for $270,000 is a chump.

Anonymous
Guest
Anonymous
4 years 2 months ago

@jesse: “1-offs like this laneway, likely customized to some degree and infilled over top of an existing urban scape, are more expensive than knocking off a whole division on a desert.”

Not true. Building a new subdivision requires roads, sewer, water, electrical and other infrastructure that is already there for the laneway housing. Besides that compare the sub 200K house in Vegas to new subdivisions in Surrey selling saw dust houses for 700K plus. It is all about what people will pay.

Anonymous
Guest
Anonymous
4 years 2 months ago

@rp1: “No different than “single family homes” with 3 suites.”

Um the difference if the house with 3 suites typically has a 2 car garage and parking for at least 2 more vehicles in a driveway. The laneway house is built where that garage and parking are. There is no parking. Big difference.

Chem Guy
Guest
Chem Guy
4 years 2 months ago

@patriotz: At a conference in Alberta, average family income for Fort Mac is now $192K and average home price is around $750K. Rent is on average $1K/bedroom ($2K for 2 bdrm etc.). Here is a city with “crazy” housing prices as described by the presenter however salaries support this with the average family still able to put away $30K/year.

Presenter was politician from Wood Buffalo, I can post actual numbers once I get the presentation emailed to me – they compared costs in Toronto, Calgary, Edmonton, and Vancouver too on one slide.

s
Guest
s
4 years 2 months ago
That figure assumes an average home price of $360,500 for a 1,200 square foot, one-storey house and $77,900 in annual qualifying income. Based on those figures, an owner would need to spend 43.1 per cent of annual income to pay for mortgage payments, utilities and property taxes. The deterioration of affordability — the proportion of pre-tax income required to service the costs of owning a home — was most acute in Vancouver, where the costs associated with owning a detached bungalow at market prices rose 3.1 points to 88.9 per cent of annual income. In Vancouver, which is Canada’s most… Read more »
good-format
Guest
good-format
4 years 2 months ago
Copied info from VHB May Information sell list sell/list 2002 3429 4641 73.9% 2003 3279 4673 70.2% 2004 3918 6410 61.1% 2005 4434 5072 87.4% 2006 4297 5789 74.2% 2007 4228 6005 70.4% 2008 3002 7390 40.6% 2009 3524 4733 74.5% 2010 3156 7014 45.0% 2011 3377 5931 56.9% Mean 3664 5931 63.9% median 3429 5789 70.3% Projected total sales 2815 Projected total listings 6966 Sales are the lowest in 10 years. Listings are the third highest (with 2008 abd 2010 slightly higher) Sales are 23% lower than the previous 10 year average.
Meh
Guest
Meh
4 years 2 months ago

Landlords in Surrey better get their act together, or they could lose their property to City Hall.

“The City of Surrey has passed a motion to adopt a Standards of Maintenance Bylaw.
Sue Pollard with Acorn says the bylaw will help ensure basic rights like timely repairs for issues like heat, electricity and water, “If you have legitimate repair issues as a tenant, you can go through the Residential Tenancy Branch process, win an Order, but then you still have to get that Order enforced somewhere else.”
Pollard is hopeful the changes will help to solve those problems.”

http://www.cknw.com/Channels/Reg/NewsLocal/Story.aspx?ID=1711118

Troll
Guest
Troll
4 years 2 months ago

@Anonymous:

What will the street parking look like in neighborhoods with SFH + suite + laneway house all with no parking.

San Francisco is a good example of that, vast swaths of 3 suite homes side by side. Somehow they seem to manage OK.

Troll
Guest
Troll
4 years 2 months ago
RBC Housing Report http://www.rbc.com/economics/market/pdf/house.pdf The lessening of unaffordability in the second half of last year in the Vancouver area proved to be temporary. Following two-consecutive quarters of declines, home prices rebounded across all housing types in the first quarter, and this made it more difficult again for a typical household to own a home in the area. RBC measures rose between 0.3 and 3.1 percentage points in the latest period, thereby raising doubts that extremely poor affordability levels in the area will improve significantly anytime soon. Consequently, local homebuyers are likely to remain under substantial stress. Home-resale activity slowed fairly… Read more »
Anonymous
Guest
Anonymous
4 years 2 months ago

@Anonymous: ……What will the street parking look like in neighborhoods with SFH + suite + laneway house all with no parking…..

Oddly enough, it’ll look just like Dunbar! Cars parked all the way down both sides of the street leaving barely enough room for a small car to get through. And, every single place that gets torn down or has a major renovations includes two suites and possibly a lovely lane-way (barf) house. The future is now!

silverfish city
Guest
silverfish city
4 years 2 months ago

@Troll: Actually, I can tell you first-hand that residential parking in the parts of SF you are most likely referring to is anything from a bit tricky to a borderline nightmare. The hills sure don’t help.

Speaking of hills, there is also a very large and dedicated cycling community in SF which relieves a lot of the traffic pressures. Amusingly, many cyclists are hipsters on faddish fixie bikes, which means they are actually pedestrians most of the time since they can’t ride up the hills.

(Posted from work in San Jose)

BulbsForSale
Guest
BulbsForSale
4 years 2 months ago

@Anonymous: I guess you missed the original story. Some of the kits condo protesters wore balaclavas to hide their identity. They claimed the reason HDM didn’t pay them is because they weren’t here legally, but were promised that the jobs would give them legal documentation:

Some workers also allege they were falsely told by HDM Hudson that they would receive documentation that would allow them to stay in Canada following the condo project.

http://www.kitsilano.ca/2010/03/20/migrant-workers-protest-in-front-of-the-pulse-on-west-broadway/

Troll
Guest
Troll
4 years 2 months ago

@Anonymous: I feel their pain, those folks living in SFH on the Westside have it pretty rough. I mean how much can they endure?!

jumpin in
Guest
jumpin in
4 years 2 months ago

“In Vancouver, which is Canada’s most expensive real-estate market, RBC assumes an owner would need $155,900 of annual income to make mortgage payments on a bungalow priced at $832,600.”

Can you elaborate on this?
How would this work if rates go up??!?!

Not much of a name...
Member
Not much of a name...
4 years 2 months ago

@jumpin in: Don’t forget that RBC also assumes a 25% DP in their calculations. So not only does the homeowner need the salary of $155,900, but they also need to have $208,150 cash in hand.

Anonymous
Guest
Anonymous
4 years 2 months ago
@Troll: …… I feel their pain, those folks living in SFH on the Westside have it pretty rough. I mean how much can they endure?! …. Well, that’s kind of the point. The much vaunted ‘west side’, home to rolling pastures and single family homes is a load of BS. It’s just a congested as everywhere else. The reality is that folks buy on the west side because they want a single family home then rent out two suites in the basement, one in the garage and half a dozen students in the attic. It’s just another form of speculation.… Read more »
jesse
Member
4 years 2 months ago

@Anonymous: ” Building a new subdivision requires roads, sewer, water, electrical and other infrastructure that is already there for the laneway housing”

Not sure about how Vegas does its utility hookups, but I’ve seen some counties have them excluded in the list price and built into the tax rate.

No disagreement about what people will pay. Surrey has non-zero land costs; the strips of desert they’re building houses on in Vegas are probably as close to zero value as you can get. Again, not necessarily apples-to-apples.

jesse
Member
4 years 2 months ago

@Anonymous: ” It’s just a congested as everywhere else”

Check the population growth stats. Several westside neighbourhoods dominated by SFH and the old Point Grey zoning laws have seen declining populations, in some cases for 10 years and counting.

jesse
Member
4 years 2 months ago

Vancouver CMA population growth changes 01-06 http://twitpic.com/9ik6gy 06-11 http://twitpic.com/9ik7hu

Re-diculous
Member
Re-diculous
4 years 2 months ago

From the Business Section of Vancouver Sun today
Interest rate jump poses threat to many B.C. homeowners

http://www.vancouversun.com/business/mortgages/Interest+rate+jump+poses+threat+many+homeowners/6375219/story.html#ixzz1wHk7DjlY

Vansanity
Guest
Vansanity
4 years 2 months ago
http://www.montrealgazette.com/business/Housing+situation+said+likely+worsen/6695897/story.html “Housing situation said likely to worsen The deterioration of affordability — the proportion of pre-tax income required to service the costs of owning a home — was most acute in Vancouver, where the costs associated with owning a detached bungalow at market prices rose 3.1 points to 88.9 per cent of annual income. There was a similar trend in Toronto, Montreal and Ottawa but the bank’s affordability index was unchanged in Calgary and improved in Edmonton compared with the fourth quarter of 2011. In Vancouver, which is Canada’s most expensive real-estate market, RBC assumes an owner would need $155,900… Read more »
Anonymous
Guest
Anonymous
4 years 2 months ago

@Re-diculous: interest rates have nowhere but go up? right, heard that, like, 5 years ago…

van_coffee
Guest
van_coffee
4 years 2 months ago
Written by the guys over at VertexOne – Enjoy:) VC http://www.vertexone.com/commentary/vertex-managed-value-portfolio.html “[US] Housing is slowly recovering…well, to be fair…housing has seemed to have halted its downward trajectory. This is an important event after six years of decline. Plus, those 1,000 new Facebook millionaires will want some new digs too, which might just be the catalyst to get housing moving again! Construction is a huge driver of economic activity and should not be underestimated in its power to drive GDP growth. As noted in past reports, we are positioned to take advantage of any upswing in US housing through our holdings… Read more »
BulbsForSale
Guest
BulbsForSale
4 years 2 months ago

@Anonymous: Yeah, you’re right, Interest rates are just as likely to go down from here as up right? What could possibly go wrong, load up on the debt buffet!

patriotz
Member
4 years 2 months ago

@BulbsForSale:
“They claimed the reason HDM didn’t pay them is because they weren’t here legally, but were promised that the jobs would give them legal documentation:”

That’s not what the article says. It doesn’t give any purported reason for non-payment or say whether the workers had been working legally. You have jumped to a conclusion from the part of the article which you quoted.

BulbsForSale
Guest
BulbsForSale
4 years 2 months ago
@patriotz: That’s the situation I recall from the original article, but fair enough, I may be mistaken. I did a google search, but unfortunately the original article doesn’t seem to be up on the Vancouver Sun website, I guess they need some of those precious electrons back and dont have the resources to keep old articles online. For now I only have the postings that refer to the original article. The workers are claiming non-payment of wages owed to 17 workers, not following basic labour laws, and failing to produce proper employee records. I recall some reference to workers ‘legal’… Read more »
jesse
Member
4 years 2 months ago

@van_coffee: Had heard that housing activity in Palo Alto had increased around the $FB IPO.

Something to keep in mind about falling prices in the US: it has not been homogeneous. Check out Zillow for some same-property sales. Parts of SF, for example, look more like Calgary than Las Vegas in terms of price movements — prices maybe 15% off peak. As a greater region SF is down close to 30%.

Parts of the Vancouver CMA (away from the core) have seen price stagnation in real terms since 2007, proverbial rocket ships in others.

patriotz
Member
4 years 2 months ago

@jesse:
“Had heard that housing activity in Palo Alto had increased around the $FB IPO.”

So it would seem that some people were anticipating Dot Com Bubble, the Sequel, followed by Housing Bubble, the Sequel.

The former is doing badly at the box office and prospects for the latter look pretty shaky.

Anonymous
Guest
Anonymous
4 years 2 months ago

@BulbsForSale:

With government 10yr bond yields dropping as low as 1.80% I bet we see at least one more drop in mortgage rates (or some exceptional promotional offers) before the central rate increases.

Anonymous
Guest
Anonymous
4 years 2 months ago

@patriotz:

“The former is doing badly at the box office ”

With Facebook valued at a ridiculous $100bn, Groupon worth more than the likes of Bombardier, and Apple as the world’s most valuable company, I’d say the bubble is doing extremely well.

jumpin in
Guest
jumpin in
4 years 2 months ago

nice hair cut!
Current Price $999,900 Listed Apr 30/12
Sqft Fin. 1,408
Original Price $1,075,000
V947428

Who said the East side is hot?
V941091
Original Price $790,000
Sale Price $680,000

Anonymous
Guest
Anonymous
4 years 2 months ago

@jumpin in:

Any idea what the previous sales prices were? Surely it’s not a haircut if the owner still takes a huge profit?

watson
Guest
watson
4 years 2 months ago

@Anonymous: It’s a haircut off the peak. Pay attention. Don’t you have some balloons to tie up somewhere?

Troll
Guest
Troll
4 years 2 months ago

@watson:

It’s a haircut off the peak.

Are you retarded? It’s a haircut off the peak asking price, which could mean nothing if the property was mispriced from the start.

Prof.
Guest
Prof.
4 years 2 months ago

watson Says:
May 29th, 2012 at 2:27 pm
@Anonymous: It’s a haircut off the peak. Pay attention. Don’t you have some balloons to tie up somewhere?

It looks like the Bear side is getting more and more idiots, like watson, everyday. Could this be an indication of a peak?

Once the majority of the idiots out there cross over from the Bulls to the Bears the crash will be in full effect.

patriotz
Member
4 years 2 months ago

@Prof.:
“It looks like the Bear side is getting more and more idiots, like watson, everyday. Could this be an indication of a peak?”

You’ve got it backwards. The peak is when the bulls reach their maximum level of idiocy, because that means there’s nobody left to buy at a higher price.

Likewise the bottom is when the bears reach their maximum level of idiocy, i.e. refusing to buy when it’s much cheaper than renting. For example, likely the US today.

TC
Guest
TC
4 years 2 months ago

@jumpin in:

V947428:
Last sold May 2008 for $912,500

Troll
Guest
Troll
4 years 2 months ago

@TC: So property is listed at 9.6% up from 2008 sale price. Van W Townhouse HPI is up 8.8% over same timeframe.

So this is a *meaningful* haircut how exactly again?

Anonymous
Guest
Anonymous
4 years 2 months ago

@watson:

See Troll’s reply. Most properties sell for below ask on average (see chipman’s stats for confirmation). Holding up individual examples is meaningless, and says nothing about market prices on the whole.

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