Brand new house $130k
What’s this, builders making a profit on new houses at $130k?
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.
May 29th, 2012 at 3:19 am 1
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.
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May 29th, 2012 at 5:03 am 2
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
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May 29th, 2012 at 6:57 am 3
“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.
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May 29th, 2012 at 7:45 am 4
Double Teranet HPI out tomorrow! I’ll prepare the fan for impact.
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May 29th, 2012 at 8:02 am 5
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.
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May 29th, 2012 at 8:13 am 6
“illegal immigrant workers”? The original articles say “migrant workers”.
Do you see the difference?
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May 29th, 2012 at 8:18 am 7
@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).
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May 29th, 2012 at 8:29 am 8
@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 no parking. What will the street parking look like in neighborhoods with SFH + suite + laneway house all with no parking.
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May 29th, 2012 at 8:45 am 9
@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.
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May 29th, 2012 at 8:53 am 10
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.
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May 29th, 2012 at 9:00 am 11
@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 incomes of $93,613 and $79,619 respectively. Neither are cheap by US standards, but they are cheap by Vancouver standards. For example, Tim Geithner’s old hood in Westchester:
http://www.zillow.com/homes/larchmont,-ny_rb/
You want something more blue collar, here’s Levittown in Nassau:
http://www.zillow.com/homes/Levittown-NY_rb/
Affordability to buy in metro NYC is far higher than in metro Vancouver.
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May 29th, 2012 at 9:04 am 12
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.
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May 29th, 2012 at 9:04 am 13
@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.
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May 29th, 2012 at 9:07 am 14
@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.
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May 29th, 2012 at 9:09 am 15
@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.
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May 29th, 2012 at 9:10 am 16
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 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.
http://www.canadianbusiness.com/article/85762–quarterly-measure-of-home-affordability-deteriorates-in-first-quarter-rbc
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May 29th, 2012 at 9:14 am 17
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.
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May 29th, 2012 at 9:23 am 18
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
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May 29th, 2012 at 9:27 am 19
@Anonymous:
San Francisco is a good example of that, vast swaths of 3 suite homes side by side. Somehow they seem to manage OK.
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May 29th, 2012 at 9:34 am 20
RBC Housing Report
http://www.rbc.com/economics/market/pdf/house.pdf
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May 29th, 2012 at 10:01 am 21
@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!
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May 29th, 2012 at 10:08 am 22
@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)
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May 29th, 2012 at 10:10 am 23
@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:
http://www.kitsilano.ca/2010/03/20/migrant-workers-protest-in-front-of-the-pulse-on-west-broadway/
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May 29th, 2012 at 10:11 am 24
@Anonymous: I feel their pain, those folks living in SFH on the Westside have it pretty rough. I mean how much can they endure?!
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May 29th, 2012 at 10:29 am 25
“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??!?!
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May 29th, 2012 at 10:50 am 26
@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.
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May 29th, 2012 at 11:12 am 27
@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. Buy the biggest dump you can then rent most of it out in an ill fated attempt to try to cover your costs while waiting for the value to skyrocket. It’s not the ‘American dream’, it’s the ‘American ream’!
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May 29th, 2012 at 11:16 am 28
@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.
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May 29th, 2012 at 11:21 am 29
@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.
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May 29th, 2012 at 11:22 am 30
Vancouver CMA population growth changes 01-06 http://twitpic.com/9ik6gy 06-11 http://twitpic.com/9ik7hu
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May 29th, 2012 at 11:36 am 31
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
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May 29th, 2012 at 11:43 am 32
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 of annual income to make mortgage payments on a bungalow priced at $832,600.
Based on those figures, the owners would have to direct $8.89 of every ten dollars earned each year towards mortgage payments, utility costs and property taxes.”
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May 29th, 2012 at 12:04 pm 33
@Re-diculous: interest rates have nowhere but go up? right, heard that, like, 5 years ago…
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May 29th, 2012 at 12:05 pm 34
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 in US regional banks and Canadian forest products companies. We are not, however, as constructive on Canadian housing as it seems to be largely out of control due to the willingness of CMHC to take on almost $600 billion of risky mortgages underwritten by Canadian banks. Now, if you’re worried about a Canadian housing recession’s effect on forestry companies, forget about it, a 10% change in US housing starts covers the entire Canadian market. We now have all the signs of the US housing market pre-2007: Canadians are carrying the same amount of debt, housing prices have risen to unsustainable levels compared to income & carrying costs, and mortgage fraud in on the rise…what could go wrong?”
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May 29th, 2012 at 12:22 pm 35
@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!
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May 29th, 2012 at 12:58 pm 36
@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.
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May 29th, 2012 at 1:04 pm 37
@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.
I recall some reference to workers ‘legal’ status. Perhaps they were working in the country legally, but the contractor threatened their legal status?
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May 29th, 2012 at 1:09 pm 38
@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.
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May 29th, 2012 at 1:31 pm 39
@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.
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May 29th, 2012 at 1:38 pm 40
@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.
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May 29th, 2012 at 1:47 pm 41
@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.
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May 29th, 2012 at 2:11 pm 42
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
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May 29th, 2012 at 2:18 pm 43
@jumpin in:
Any idea what the previous sales prices were? Surely it’s not a haircut if the owner still takes a huge profit?
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May 29th, 2012 at 2:27 pm 44
@Anonymous: It’s a haircut off the peak. Pay attention. Don’t you have some balloons to tie up somewhere?
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May 29th, 2012 at 2:39 pm 45
@watson:
Are you retarded? It’s a haircut off the peak asking price, which could mean nothing if the property was mispriced from the start.
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May 29th, 2012 at 2:48 pm 46
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.
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May 29th, 2012 at 2:53 pm 47
@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.
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May 29th, 2012 at 2:54 pm 48
@jumpin in:
V947428:
Last sold May 2008 for $912,500
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May 29th, 2012 at 3:09 pm 49
@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?
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May 29th, 2012 at 3:10 pm 50
@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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May 29th, 2012 at 3:10 pm 51
@jesse: …..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…..
All one has to do is drive through the West side while navigating the labyrinth of parked cars to know that the stats are not right. Ether that or people from the burbs are parking on the West side and walking downtown to work (good luck with that).
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May 29th, 2012 at 3:25 pm 52
You missed the other option that the adult population has increased but the total population has decreased due to a greater decline in the number of children.
Prior to the big developments in Yaletown and False Creek, the population of the CoV as a whole had been declining for decades due to this.
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May 29th, 2012 at 3:33 pm 53
@Anonymous:
If there’s one thing I’ve learned from this global financial crisis, it’s to be very skeptical of official government statistics.
Just like the official stats place cities like Richmond and West Van at the top of the child poverty charts due to unreported offshore income, we should be cautious about the official census numbers in places like the West Side. If you have illegal suites in your basement and attic, plus a group Korean ESL students living in your garage, are you going to alert the government to that fact by requesting extra census forms?
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May 29th, 2012 at 4:04 pm 54
@Troll:
It’s very meaningful. Instead of a “profit” of $162,500 it will be $86,500 (assuming that it will be sold at that price). This is a hit to their profit by about 47%. Just think, all it took was the push of the enter button on a computer and, poof, $76k just disappeared.
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May 29th, 2012 at 4:14 pm 55
@jumpin in: “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??!?!”
_____________________________________________________________
If rates double to say 6.5% it means the owner would need around 300K income to buy a 832K house. It will also mean that 832K house will be a lot nicer because prices will have dropped by 70% by the time the mortgage rates hit 6.5%.
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May 29th, 2012 at 4:16 pm 56
@Not much of a name…: “Instead of a “profit” of $162,500 it will be $86,500″
Not after factoring in RE commisions, PPT, closing costs, holding costs and possible renos and maintenance. They will likely lose money.
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May 29th, 2012 at 4:16 pm 57
The problem with the last census that a household was given only one application per address and I highly doubt that landlord’s family included all tenants into a family questionnaire. I cannot say whether it’s a trend though as I have only one evidence to support my guess.
I have a friend (family of three) living in SFH in Vancouver and they have four tenants downstairs (all under the same address). He mentioned that their tenants did not receive any letter from Census and he did not fill any data for them in his Census papers which allowed only one entry per address. All tenants were not counted anywhere. If this applies to majority households, the Census population numbers in certain areas could be significantly skewed.
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May 29th, 2012 at 4:17 pm 58
@Anonymous: ….interest rates have nowhere but go up? right, heard that, like, 5 years ago… ..
Yes, well, your right of course. Let me say this: I urge you, with every bit of my heart, to take on as much debt as you can while rates are low. I’ll do anything to help you achieve that goal (short of cosigning of course). Let me know how I can help make your dreams come true.
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May 29th, 2012 at 4:18 pm 59
@Anonymous: Hence the quotations around the word profit. I just wanted to keep it nice and simple.
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May 29th, 2012 at 4:21 pm 60
@Not much of a name…: Still not really getting it are you? The asking price is a made up number, you should be concerned with SALES price and comparable sales. Trying to calculate profit/loss and market movements based on asking prices is absurdity squared.
It’s a good thing they didn’t price it at $2M originally, they would have seen even more profit disappear when they dropped to $1M…LOL.
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May 29th, 2012 at 4:25 pm 61
@Not much of a name…:
In your case, that’s probably best.
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May 29th, 2012 at 4:27 pm 62
@Troll: I guess then we have to wait to see what they sell it for now don’t we. Then we can factor in everything that Anon stated and see how they made out.
The flip side to this is also relevant in that over list sales are also meaningless as the property was obviously underpriced when listed.
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May 29th, 2012 at 4:31 pm 63
@Troll:
I’m just using the same rationale as a great number of homeowners who are calculating their profits in the very same manner.
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May 29th, 2012 at 4:39 pm 64
@Anonymous: All one has to do is drive through the West side while navigating the labyrinth of parked cars to know that the stats are not right
Or… there are more people with cars than there used to be. Maybe the stats aren’t right but you need more than a “I think I see more cars on the streets nowadays” argument. Again, follow the links I presented. Most westside neighbourhoods have seen increasing populations in the past 10 years. Not all, though.
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May 29th, 2012 at 4:44 pm 65
Get your guesses in folks -
My guess:
Listing 250
Sales 98
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May 29th, 2012 at 4:47 pm 66
I have a stainless steel spoon made in Japan from the 1980s not tarnished in the slightest. I have a stainless steel knife made in China, bought it around New Years – there are rust stains.
I guess it doesn’t say much, after all, Japan fell hard as China looks to be doing.
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May 29th, 2012 at 4:50 pm 67
@Anonymous: Here’s my guess:
New: 178
Changes: 200
Sales: 136
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May 29th, 2012 at 4:51 pm 68
@jesse: “Or… there are more people with cars than there used to be.”
Noway. I see several bikes traveling down Gregors bike lanes almost every day. There must be dozens less cars than in years past due to those people who now use the bike lanes to commute.
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May 29th, 2012 at 5:08 pm 69
A short rant about the Vancouver housing bubble and normalcy bias.
http://www.youtube.com/watch?v=I1BCRSsBhmE
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May 29th, 2012 at 5:25 pm 70
@jesse: ….Or… there are more people with cars than there used to be. ….
Err, isn’t that what I was saying?
Or wait, you mean, in the old days, when rich people did live the West side, they couldn’t afford cars, but now that they rent our there basement, attic and back yards, they can afford cars but all the extra people living in the basements, attics and back yards are
walking. Ok, that makes sense.
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May 29th, 2012 at 5:32 pm 71
For all us rational investors that had to endure the non-stop RE hype, victory is oh so sweet in the end:
http://www.youtube.com/watch?v=2I0QN-FYkpw
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May 29th, 2012 at 5:43 pm 72
New Listings 288
Price Changes 169
Sold Listings 112
TI:18923
http://www.laurenandpaul.ca
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May 29th, 2012 at 6:02 pm 73
@paulb.: Looks like we might be plateauing a bit… will that continue? And for how long til it rises or falls?
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May 29th, 2012 at 6:05 pm 74
@Anonymous:
Plateau? I don’t think we’ve seen less than 250 new listings in any day this month.
Listings should ease off over the summer, but even if they slow, momentum should carry us through 21000 (I hope).
Then once prices begin dropping, all of those confident “sellers” thinking this was just market fluctuation will re-list.
Then I heat up the popcorn.
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May 29th, 2012 at 6:05 pm 75
@Anonymous: “I’d say the bubble is doing extremely well.”
The Nasdaq peaked at 5,132 in March 2000. Last close was 2,871, making for a 44% nominal loss over 12 years.
Given the change in the exchange rate, and inflation between 2000 and today, a Canadian dollar invested in the Nasdaq at its peak would currently be worth about 30 cents.
Yeah, facebook and google are big companies, but don’t let that make you forget the magnitude of the tech bubble, and how screwed you can be if you buy in at the top of one.
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May 29th, 2012 at 6:18 pm 76
@paulb.: The real question is: will we celebrate the 19K party tomorrow?
If we score the same inventory increase as today (+81), the answer is a big HELL YEAH!
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May 29th, 2012 at 6:23 pm 77
@ Makaya
Calm down…
Step — Away — From — The — Keyboard
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May 29th, 2012 at 6:33 pm 78
@silverfish city: If you don’t want to arrive sweaty, you don’t ride up the hills anyway, mountain bike or shelby.
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May 29th, 2012 at 6:35 pm 79
@Anonymous: plateauing and a small decline from mid-month should already have happened, that it continues to tick up is indicative of a deviation from the norm.
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May 29th, 2012 at 6:55 pm 80
19,000 party !! tomorrow night
gotta get me a lampshade and some pink lime coolers
the landlord upstairs is gonna complain !!
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May 29th, 2012 at 7:05 pm 81
Quick comparison vs same time in May 2011:
Sales: 2559 vs 3104: -18%
Lists: 6214 vs 5394: +15%
Ratio: 41.2% vs 57.5%: -16.3%
YoY Sale/List Ratio Difference (2012 vs 2011):
Jan -10.5%
Feb -8.6%
Mar -10.8%
Apr -9.5%
May -16.3% (projected)
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May 29th, 2012 at 7:16 pm 82
@BulbsForSale: @BulbsForSale: Yeah, you’re right, Interest rates are just as likely to go down from here as up right?
I think the logic goes something like this: “They can’t possibly raise interest rates because it would ruin so many homeowners”. They fail to realize that the interest rate was not lowered in the first place in order to pump up the RE market, the BOC has bigger things to worry about; it’s a rather crude lever in the economic system. More bigger mortgage debt was an unintended (or at least undesired) consequence.
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May 29th, 2012 at 7:36 pm 83
@Starving Artist: “Interest rates are just as likely to go down from here as up right?”
I remember reading an WSJ article in 2010 touting how the bond market was an accident waiting to happen and rates were going to go up. Oops.
The last best hope may be that low interest rates won’t save Vancouver RE prices. With the little I know about financial markets, I’m hopeful.
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May 29th, 2012 at 7:43 pm 84
Re: increased density of parked cars on Vancouver’s west side. Some of this can be attributed to a change at UBC — the introduction around 10 years (?) ago of the U-Pass. All students pay a relatively low fee, I believe between $20 and $30 a month, for a 3-zone pass. This lets Translink reduce their costs and also assists their planning (and UBC’s). The idea is that students leave their cars at home and take subsidized transit to campus. UBC jacks up on-campus parking rates as part of its push to encourage transit use. An unintended and unforeseen consequence: students drive alone from places like Coquitlam, Surrey, and New West, park for free on or near main streets on the west side (41st, 49th, King Edward), then hop on the bus for a free “shuttle” ride to campus. What’s happening is especially visible in the long lines of cars parked along either side of Marine Drive near Camosun and Kullahun Dr. every weekday, but there are cars parked all the way along 41st to the shopping district of Kerrisdale, whereas this did not used to be the case. UBC brags about how dramatically they’re reduced the numbers of single-vehicle trips to campus, as part of their drive to be a “sustainable” campus, but part of this is simply a matter of pushing the parking lots off campus, into the streets of the west side. Presumably this will be a topic of discussion between the university and the city, if it has not already been.
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May 29th, 2012 at 8:03 pm 85
@VMD comparison to 2011
I think it is becoming apparent that May 2012 has become a further notch down in sales activity. Finally starting to see this in some of the markets that have held up this year, E/N Van. Odd to hear ZRH2YVR mention condo price increases, but I guess there have been not spikes there compartively for a while and it might also mean some level of capitulation from buyers who thought they might be approved for higher mortgages now realising that their circumstances will not change for the better on the rate/CMHC/ and lender risk appetite front. Not sure we are seeing blowout sales yet at -10-20% or greater of earlier in the year market values, but maybe that is still to come in june perhaps the euro blows apart, some price decline averages are accurately reported and another panic sets in.
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May 29th, 2012 at 8:05 pm 86
@Canis:
I doubt that’s happening in residential streets. The city has a bylaw that says that you can’t park in front of someone else’s house for longer than 3 hours. And it’s enforced. They ticket first and ask questions later.
It’s the same deal round Langara college, and major bus lines. Parking is expensive downtown. People drive into vancouver, park and ride in on a one zone pass. Just make sure you park infront of a park or church. otherwise you’ll get a ticket.
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May 29th, 2012 at 8:35 pm 87
@jesse
Correct me if I’m wrong, but some of the new credit recommendations will be having to qualify at higher multi year rates, so for some, interest rates will “rise” regardless.
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May 29th, 2012 at 8:57 pm 88
@VMD: that should be 29% drop in sell / list, IMO. 1 – 41/57
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May 29th, 2012 at 9:15 pm 89
Richmond MAY Sales Homes + Townhouse + Condo
1995 = 225
1996 = 292
1997 = 287
1998 = 222
1999 = 243
2000 = 344
2001 = 344
2002 = 470
2003 = 413
2004 = 475
2005 = 666
2006 = 619
2007 = 582
2008 = 424
2009 = 497
2010 = 440
2011 = 373
2012 = 234 **May 29
Sales at 1990s levels.
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May 29th, 2012 at 9:16 pm 90
@Rokay: “The city has a bylaw that says that you can’t park in front of someone else’s house for longer than 3 hours. And it’s enforced. They ticket first and ask questions later.”
Never heard of such a thing unless resident parking signs are posted. Care to show a link to this bylaw.
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May 29th, 2012 at 9:21 pm 91
It’s freaking beautiful stuff watchIng the listings pile on everynight. As Springsteen once sang…I’m goin’ down, down, down down…
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May 29th, 2012 at 9:21 pm 92
@Inventory: “Richmond MAY Sales Homes + Townhouse + Condo”
It looks like we will be close to pre 1999 sales levels. I wonder how long it will take for prices to get back to pre 1999 levels.
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May 29th, 2012 at 9:30 pm 93
I am going to hold until Thursday to post the official updated inventory graph but it looks like we will be in new record territory.
Not only are we at the 10 year highest point for this time of year we have now also passed the 2010 peak. Only 2008 had a higher peak and that didn’t occur until October.
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May 29th, 2012 at 9:44 pm 94
Never heard of such a thing unless resident parking signs are posted. Care to show a link to this bylaw.
Many people don’t know this because a) they’ve never got a ticket b) they park in front of apartments c) they see so many cars parked on the street they just assume people randomly park on the street but this is not the case– otherwise they get tickets.
“Resident only” parking is 24/7 and not “three hours”. In front of someone’s house? You’ve got 3 hours. For apartments/townhouses I don’t think there’s any limit (unless there are signs indicating otherwise, e.g. resident only).
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May 29th, 2012 at 9:44 pm 95
@canis
UBC sustainability plan is a joke. Or I should say an excuse so that parking lots are converted in private condo developments. Those condos are sold to people who do not work on campus, therefore the traffic has increased at least 2 folds in the past 5 years: very green policy, indeed
If UBC was green, they would make condos affordable to the staff.
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May 29th, 2012 at 9:55 pm 96
@van_coffee: Having said that, it would be nice if the guys at Vertex One could turn in some of their great returns of yesterday now-ish. I’ve held their Vertex One since late 2010 and it’s been frustrating.
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May 29th, 2012 at 9:58 pm 97
@bums up2: Not that it’s really a weighty topic, but I used to work for about a year around 41st in Kerrisdale, maybe 2-3 years ago, and I parked on the residential streets, every day in the same space in front of some house, and so did everyone else, and no one every got any tickets, whether there is such a bylaw or not.
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May 29th, 2012 at 9:58 pm 98
Regarding the 3 hour parking bylaw.
http://vancouver.ca/engsvcs/parking/admin/index.htm
While all city streets are for public use, the City of Vancouver recognizes that priority residential street parking is needed on some residential blocks. Signs cannot be posted to reserve the space in front of a residental house for the sole use of its’ occupant, however, there are a number of other measures used to reduce outside parking pressures in residential areas. One of the measures that applies to most streets in Vancouver is the Three Hour By-Law.
By-law No. 2849, Section 17.6(f) prohibits non-resident parking in front of any property for more than 3 hours between 8:00 a.m. and 6:00 p.m.
This by-law is meant to restrict commuters from regularly parking all day on residential streets. It is enforced on a complaint basis only, and usually only when a vehicle is found to be repeatedly in violation. The by-law is not meant to restrict legitimate visitors or area residents from parking on their own street. Residents may phone 3-1-1 for enforcement.
All other requests for restrictive residential signing will be established by City staff through Resident Permit Parking (RPP) or Vancouver Resident Permit Parking (VRPP) residential zones
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May 29th, 2012 at 10:00 pm 99
Rokay–you’re basically right
3 hour limit in front of res property 8am to 6pm—-resident only sign enforced 24hrs 24/7
http://vancouver.ca/bylaws/2849c.PDF
Sec 17.6 (f)
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May 29th, 2012 at 10:13 pm 100
Question for the statisticians on this blog. Is there a time when inventory usually peaks coming into July/August when the market is less busy? Or is it different from year to year?
Also, tomorrow is the pre-sales opening on West. This will be a ginormous condo complex taking up the entire block between Manitoba & Columbia/1st & 2nd Ave and with over 40K square feet of retail space for all of us in the Olympic Village who are sick and tired of buying our underwear at Terra Breads. I hope they are busy as all get out as I definitely don’t want to be the only honky standing there looking at plans and asking questions like, “Do you think 2nd Ave will really be that noisy?”
I also hope the up and coming “mortgage wars” lure enough buyers in there so that we can get some new shops in the hood and some more half empty buildings. It sure is a pleasure living here. Quiet and cozy.
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May 29th, 2012 at 10:26 pm 101
@Anonymous:
By-law No. 2849, Section 17.6(f) prohibits non-resident parking in front of any property for more than 3 hours between 8:00 a.m. and 6:00 p.m.
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May 29th, 2012 at 10:30 pm 102
On the Avg Condo Prices. Strange but yes – they seem to be up this month. My other comment however was that over an 18 month period – the condo price average is like a moving sine-wave and we merely at the top of an oscilating flat curve. 24 months of no real gains so it’s nothing.
For detached – last week was noticably down and 2 days into this week, we are at the same point – down a noticable amount. If this week finishes in a place similar to where we are for the first 2 days, the 10-week moving average price will fall below the “low” of January and now take us back 11 months to Feb 2011. We should now see closer to 4% avg price decline this month compared to April.
There have been noticable price declines on most sales in the slow areas now (Van-West / Richmond etc). Given that there is a lag in posting sales, this is indicative of activity really in the past 10-20 days and if things are only getting worse – then it must be terrible out there now. Today actually had no sales post in Richmond.
Final thought of the night is that I had a young (25ish?) colleague come into my office today. He went on about how he would never buy here until prices come down at least 25%. He went through all the statistics and ratios (Price rent etc )- – then went on to argue that without foreign money, this town will collapse from its current location. Wow – - and a young “West-side” boy as well. He said that unless you had rich parents willing to give money away, nobody his age was thinking in any way to buy anything at all.
2 Market days left for the month and unless we have good spikes in sales tomorrow or Thursday, May will be below April’s sales numbers. They really are flat flat but down flat would be nice.
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May 29th, 2012 at 10:51 pm 103
@mac: See graph here and judge for yourself on inventory peaks:
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May 29th, 2012 at 10:58 pm 104
Again ?!?!?!?!
http://www.bloomberg.com/news/2012-05-29/iceland-property-bubble-grows-with-currency-controls-mortgages.html
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May 29th, 2012 at 11:18 pm 105
Just to let you know a whole bunch of well paid workers are about to either lose their jobs or take a pay cut.
You see many years ago a large BC Crown corporation sold their IT operations to an outsourcing company. In doing so they signed an agreement to purchase those same IT services back from the other company for the next 10 years. The agreement also stipulated a certain amount of cost savings over those 10 years. By in large this was achieved, however with noticeable decrease in IT service levels.
Fast forward to now. Well the 10 years is up.
The Crown corporation freely solicits RFPs for its future IT needs.
Lo and behold, outsourcing company is undercut by another outsourcing company. The result a whole bunch of lay-offs.
The second company now needs to staff up in order to meet the needs of the new IT contract. They offer jobs to some of the staff recently laid off by the other company with significantly lower salaries and benefits. The result is cost savings to the Crown corp.
I’ll leave you to interpret the indirect effect to BC real estate.
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May 29th, 2012 at 11:22 pm 106
#104 @jumpin in: Iceland property rose 11% in 3 years, about 3.5% per year. I can understand fears about a property bubble emerging, but that rate of increase does not suggest bubble dynamics. I have no idea if prices are still obscenely high however. They really went nuts in Iceland.
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May 29th, 2012 at 11:22 pm 107
@mac:
The question is… will there be an free helicopter rides for people of Asian descent? I wouldn’t mind a free tour of the city even if we have to do a fly-by over White Rock.
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May 30th, 2012 at 8:55 am 108
@jumpin in: ….If UBC was green, they would make condos affordable to the staff….
Come on, really? Who would pay for that subsidy? Are you suggesting that any business that wants to be ‘green’ should pay for or subsidize staff housing. Sorry, but that’s jut not feasible or sustainable (and likely not even green)
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June 3rd, 2012 at 5:14 pm 109
Labor costs do NOT cost more here in Vancouver as opposed to Vegas. And if someone is telling you that, then it’s BS. If you look around, Vancouver is an immigrant city. High immigration means a high flow of surplus labor.
Simple supply and demand economics means it would be cheaper.
No one can convince me that somehow the rest of the world doesn’t know how to build houses, and that all the new immigrants to Canada have no idea how to build houses or help in their construction.
The ONLY reason why that $130k house is being built in Vegas, but costs $600k in Vancouver, is pure greed from bankers and developers. It also doesn’t help that ruling elites allow a constant influx of people aka immigrants, which constantly puts a demand on housing. It doesn’t take a rocket scientist to understand this.
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June 3rd, 2012 at 5:19 pm 110
@Shangey G.:
“The ONLY reason why that $130k house is being built in Vegas, but costs $600k in Vancouver, is pure greed from bankers and developers.”
Nope, the ONLY reason is that buyers in Vegas are only willing to pay $130k, but buyers are still willing to pay $600k in Vancouver. Bankers and developers are greedy everywhere, but the former cannot lend more than someone is willing to borrow, and the latter cannot sell for more than someone is willing to pay.
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August 15th, 2012 at 3:11 am 111
Living is Vancouver is getting stupid now. Same job paid more in the states, houses are cheaper in the states, cars are cheaper in the states, pretty much everything are cheaper in the states as I found myself buying everything online now. Time to move instead of waiting for Vancouver to sink…
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