Housing market keeps on cooling
The Globe and Mail has an article about the drop off in real estate sales across the nation.
It’s got some gems in it for predictions from bankers and real estate associations, but it’s also got the standard partial information about ‘government interference’.
As evidence mounted that rock-bottom interest rates were fuelling house prices and consumer debt loads, Mr. Flaherty has changed mortgage insurance rules four times, each time making it more difficult for consumers to take on housing-related debt.
While the three previous rounds crimped both housing activity and the demand for credit, economists and real estate industry experts say this latest round, which took effect July 9, looks as if it is having a bigger impact.
And off course what’s missing is any mention of the government previous moves to make it easier for consumers to take on housing-related debt: moving amortization from 25 to 30 to 35 years, dropping down payment requirements all the way to zero down and shoveling money into mortgage buybacks via the CMHC.
So anyways, it’s getting harder to buy than it was when you could get a zero down mortgage with a longer amortization schedule. And what sort of horrors has this wrought?
A number of economists, real estate agents, and industry observers say that many prospective first-time buyers have found themselves unable to secure a mortgage, especially in Toronto and Vancouver, and are therefore remaining renters.
Paula Roberts, a mortgage broker based in Markham, Ont., said one of her clients, a young teacher, was preapproved under the old rules, but now that she has found a home she likes, is having trouble securing the mortgage. She will likely have to get someone to co-sign the loan, or come up with a larger down payment, Ms. Roberts said.
“It’s really hindering people,” she said. “Her rent is basically the same as her mortgage payments.” In Ms. Roberts’ opinion, “it’s always better to try to buy something instead of rent.”
Of course, it’s always better to try to buy ..Says the mortgage broker. Business slowing down Paula?
But this article ends on a bit of a down note for those hoping for a ‘plateau’
David Madani, a bearish economist at Capital Economics, reiterated his forecast Monday that house prices will fall 25 per cent in the next year or two. “The first sign of trouble at the peak of the U.S. housing bubble was that home sales began to drop in 2005, well before house prices began to fall in 2006,” he wrote in a research note.
Read the full article at the Globe and Mail.
September 18th, 2012 at 12:24 am 1
And then the BNN guy says 25% drop is conservative…
http://watch.bnn.ca/#clip762533
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September 18th, 2012 at 12:40 am 2
There’s no constitutional right for first-time homebuyers to buy a 3,000 square foot house…
There’s a reason why “starters” used to be called “starters”.
“Starters” are now called “tear-downs”…
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September 18th, 2012 at 3:24 am 3
This post from fatjay at HHV gives you an idea of what Vancouver is in for:
Note that people are finally getting the message that the bust is on after 4 years of declines. It may happen sooner time wise in Vancouver, but I still think you’re looking at 20% off peak price wise.
A change in market expectations by the general public is not the initial cause of price declines. It does help keep prices falling when they catch on though.
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September 18th, 2012 at 4:36 am 4
The “BNN Guy” runs http://www.chpc.biz/
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September 18th, 2012 at 6:25 am 5
Vancouver Sun article on the Little Mountain redevelopment:
http://www.vancouversun.com/business/Developer+inexperience+behind+Little+Mountain+delays/7256600/story.html
That article states: “Four years ago, BC Housing started moving the 224 residents of a social housing project into other subsidized homes.”
In fact, the displacements from Little Mountain started over 5 years ago in March 2007 when BC Housing opened the Relocation Office on the site.
The fact that a major redevelopment would start off with mass displacement before any consultation with the community (which did not start until 2010–after all but these last few tenants had already been displaced) makes this redevelopment look like it is straight out of the 1950s/60s like urban renewal. This redevelopment was justified in part on the basis that the new mixed income community (about 90% condos, 10% social housing) would “integrate” the tenants, but displacement has separated them from friends and family and made many feel very isolated.
This is a BC Liberal privatization gone off the rails.
The developer entered into the purchase agreement in Spring 2008–before the Global Financial Crisis that hit later that year in the fall. He paid a very high price for the land (although the price is not public info, it is subject to a confidentiality clause in the purchase contract–a public asset sold off and we have no idea for how much). During the liquidity crisis of 2008, the developer was forced to turn his attention to save the Ritz Carlton project in Downtown Vancouver. So a lot of the delays have had to do with the 2008 liquidity crisis. During 2009 not much happened on this, although BC Housing kept displacing the tenants out of Little Mountain, insisting that the developer required vacant possession. In fact, it would have been possible to redevelop the site without displacing anyone. It was 80% open space, with big fields in the middle. An architects report from 1982 includes a plan for phased redevelopment that would not have displaced anyone. They could have built the new buildings in the open fields first and then moved tenants into the new buildings and then demolished the old buildings only after the new buildings were built. An architects report showed this was possible and recommended it in 1982. Instead displacement and demolition have turned tenants lives upside down and reduced Vancouver’s supply of social housing by 224 units as we wait for the developer to build the new units.
I wonder how Vancouver’s real estate crash will affect this redevelopment? I would appreciate any insights from this blog. The developer entered into the purchase agreement in May 2008, we don’t know the price he is paying but it would be high. This project of 1800 units will not be complete for many years. If prices go down below 2008 levels, how will he be able to sell all these condos and still make a profit? He will he afford the community contribution ammenity package that costs millions of dollars?
The BC Liberal govt is reinvesting the money from the privatization of Little Mountain into supportive housing for people with drug addictions and mental illness on 14 city-owned sites. Little Mountain was public housing for families and elderly people without addictions. So this is taking away from families/elderly people in order to give housing to drug addicts.
The developer is Holborn Properties, owned by Joo Kim Tiah. Joo Kim Tiah is from the billionaire Tiah family in Malaysia. They were on the Forbes rich list in 2008.
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September 18th, 2012 at 6:38 am 6
@patriotz:
Kelowna’s real estate isn’t going up anytime soon, yet a whole group of my friends who live there, FTBs, suddenly decided that NOW is the time to buy. Perhaps it’s all the media attention about foreclosures there? I suspect they think they’re getting a good deal, yet to me, prices still look expensive, and I don’t really see many hot deals on MLS. So a couple of these FTBs now own houses (paid around $300k, whereas in 2004 these same houses were about $100k less, though at the peak the prices were more like $500k). Nobody listened when I told them to wait. I still think prices will head lower. These FTBs may end up disappointed, I think there are still drops coming. But what do I know? At least they aren’t buying $1million crack shacks, $300k does look cheap, coming from Vancouver!
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September 18th, 2012 at 7:27 am 7
My guess is Cameron Lereah is negotiating an exit strategy.
Second guess is the clown economist from Central Credit will take his place or maybe somebody from Global, or Corus.
Hot debate. What do you think?
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September 18th, 2012 at 7:37 am 8
Anyone have a data set of monthly median OR avg resale prices by segment in Vancouver? Looking specifically for condo apts and SFH prices. Hoping to find one going back to at least 2000.
Thanks
Hot debate. What do you think?
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September 18th, 2012 at 8:17 am 9
@Ben Rabidoux: Try the files in this post over at vancouverpeak: http://vancouverpeak.com/groups/inventory-graph/forum/topic/stitched-together-hpi-graphs/#post-2565
Contains historical MLS-HPI by sub-region and dwelling type (det/att/apt).
Hot debate. What do you think?
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September 18th, 2012 at 8:39 am 10
Ripley’s chart is fun:
http://www.chpc.biz/plunge-o-meter.html
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September 18th, 2012 at 8:46 am 11
David Madani has consistently been the most up-front and honest economist. That’s because he isn’t paid by a bank or real estate association or a university dept which gets all it’s funding from RE sources.
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September 18th, 2012 at 8:51 am 12
Two replies from CBO:
Where is the article Canada’s Housing Crash Begins?
=-=
Ray,
Sorry for the inconvenience. The online stories follow a publishing schedule and that story in question was unintentionally released early. It will be available again on Monday.
Regards,
Don Sutton
Online Managing Editor,
Canadian Business
=-=
Hi Ray,
It’s on newsstands everywhere. If you’re looking for it for free online, I’m afraid it’s not there (at least not yet). We’re offering less free content now and will soon be moving to a pay model where only a few articles will be free each month. Thanks for your interest.
C.
Conan Tobias
=-=
Pick which response you like.
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September 18th, 2012 at 9:05 am 13
I always get frustrated how they portray the 35-40 year amortization as the norm. No one focuses on the decades where we had 25 year ams as the norm. We are back to where we should be people!!!
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September 18th, 2012 at 10:41 am 14
@buffates
What I really hate is realtors, mortgage brokers, TV analyst etc… saying the government shouldn’t interfere with the market and let the market decide the prices.
Yet the whole reason home prices went up was because of government interference, get rid of government subsidized mortgage (CMHC) and home prices would come crashing down, guaranteed.
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September 18th, 2012 at 10:45 am 15
@s
“What I really hate is realtors, mortgage brokers, TV analyst etc… saying the government shouldn’t interfere with the market and let the market decide the prices.”
what I really hated was hearing/reading realtors say “NO OFFERS ACCEPTED BEFORE MON AT & 7.p.m!”
won’t miss that…assholes
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September 18th, 2012 at 11:09 am 16
Credit is till way too easy which is why great and greater fools are still bidding up prices in Toronto and burbs like Markham. I have lived in Markham for 20 years and it is a dive pretending to be Manhattan. I do not believe the Greatest fools will be found until interest rates rise. And that hand of the BOC may be forced more by infinite QE in Europe and America than anything else.
Canada will suffer the fate as Florida in the 1920s. Florida did not see 1925 prices again till the early 2000′s. By the time this epic Canadian bubble has burst, it may take half a century for prices to return where they were in 2011-2012. If we learn anything from history it is that we learn nothing from history and thus history repeats itself. In Canada not only will history repeat, history will be made as the perceived wealth of some 70% of the population evaporates like dew in the Arizona sun. The foolish majority does not understand that they can’t all get rich doing the same thing at the same time! The time to pay the piper draws near! If you want to vultch on a property think 2016-2017, the game has just begun!
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September 18th, 2012 at 11:15 am 17
Over at the huffington post we have a headline that reads:
“Vancouver Housing Bubble: Prices Decline By 25 Per Cent”
Amazing how alarmist the headlines are getting
. The headline doesn’t match the story perfectly because “…the dollar value of homes sold through the Multiple Listing Service (MLS) dropped 25 per cent to $2.6 billion last month”
Not really an average detached house price measure. But you have to love the alarm bells.
http://www.huffingtonpost.ca/2012/09/17/vancouver-housing-bubble_n_1890553.html?utm_hp_ref=canada-business&ir=Canada%20Business
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September 18th, 2012 at 11:22 am 18
BTW I know Paula Roberts; her and the hubby opened up this posh new Mortgage broker office a couple of years ago after being on the 2nd floor of an old building for many years; business must have been good! Sadly mortgage brokers, realtors, construction workers, truckers, lumberjacks and all the people in industries related to the RE industry will suffer. MBs and Realtors in particular will soon be looking for Real employment since Real Estate will be not so Real anymore as an occupation!
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September 18th, 2012 at 11:28 am 19
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September 18th, 2012 at 11:29 am 20
@pricedoutfornow: I was visiting the Okanagan earlier this month, and it is not cheap by any means! Our perception of value has been so distorted by the drug of cheap credit that people think that 500,000 is reasonable for a plywood and gyprock dwelling! That’s HALF A MILLION dollars! How long would that take you to save and pay off in after tax earnings after paying all your other expenses, and that is without including the interest? Average house price in Canada should be in the 100K range and in major cities in the 350K range, no higher! That is what Canadian incomes can support!
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September 18th, 2012 at 11:44 am 21
@Troll:
The only think wrong was the headline, which almost certainly was written by someone other than the author. The article is factually correct in all respects.
You are clutching a very thin straw.
Hot debate. What do you think?
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September 18th, 2012 at 11:49 am 22
@real_professional:
If the dollar volume of sales in BC dropped 25% then that will put an even bigger hole in the provincial budget due to lost property transfer taxes.
This is on top of the giant hole already created by plummeting natural gas royalties.
Now add in steady price drops in real estate and the hole gets bigger yet.
The NDP are going to inherit a gigantic mess in May.
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September 18th, 2012 at 11:51 am 23
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September 18th, 2012 at 11:58 am 24
@patriotz: LOL, oh come on, this coming from someone who pounces on anyone who makes as much as a spelling mistake in their post. However, here you just casually dismiss a headline which couldn’t be more wrong. And also an article which refers to average prices, which are also roundly (and correctly) denounced by bears.
Alls I’m sayin is if you and others want to be taken seriously you need to at least make a token effort to be objective and skeptical, for both bullish AND bearish stuff.
Hot debate. What do you think?
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September 18th, 2012 at 12:01 pm 25
@Troll:
It seems that right off the bat the article says Vancouver prices plummet but then in the next sentence they give the average price for all of BC.
That right there is misleading.
Hot debate. What do you think?
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September 18th, 2012 at 12:06 pm 26
@mac:
Not that it will happen, but regulations limiting / restricting foreign ownership are needed. Land / real estate is a productive asset and the use of it for the input in the economy and contribution to the production of the outputs of the geographic region are the primary purposes to have the real estate assets. If foreigners are using the asset as speculative investments and not using the asset, then this should be prohibited or strongly discouraged through punitive taxation.
I am not opposed to foreigners being the owners of the assets, however, the use of the asset solely to be traded amongs investors but not to be inhabited gives some concern. As well, the use of the asset solely as some type of vacation destination where there is not sufficient supply to use in the local market should also be prohibited.
This will never happen as those who have the power to enact such changes would themselves be affected and their voters also can be affected.
I would not say it needs to apply to all regions or product types.
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September 18th, 2012 at 12:12 pm 27
Opened my Swiss accounts today. Got to talking about real estate a bit. The Swiss generally rent, it’s part of the efficient allocation of resources and the promotion of the diversification of one’s assets. Only the very well off will own because otherwise, it’s just not efficient.
Interest rates here however are very very low – (1.5% on 5 year fixed terms). As well, mortgages do not require repayment for a portion of the value of the property (i.e. 50% would be interest only). I had played with online loan calculators to show the maximum borrowing amount. I was shocked to see that payment resulting from a maximum borrowing was very low. I felt somehow it must not be working. So – what TNL@TB told me (and now – don’t think of the TD banker- think more like Swedish Swimsuit Model) was the following.
“We here at XYZ Swiss Bank have a policy of calculating the maximum borrowing using 5% interest. We believe 2 things – first that interest rates are low and will likely rise so borrowers should not be qualified at such a rediculous rate and . . second . . the property prices are inflated because of low rates and so we don’t want people to over extend themselves when prices reverse.”
Sigh – - – Look what happens when there is not CMHC and banks do proper risk analysis.
Anyhow – - it’s great to be outside the bubble – - it is even more clear now.
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September 18th, 2012 at 12:16 pm 28
@Best place on meth: I think you hit on the more salient point in your previous post regarding the effect of the drop in volume and value of sales. In addition to the dropoff in govt’ revenue in taxes, there’s also the dropoff in income for all those leeching money during a transaction, ie realtors, inspectors, lawyers etc. An article digging into that would have been far more informative than the drivel published.
Hot debate. What do you think?
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September 18th, 2012 at 12:33 pm 29
A minor media flurry today.
Canadian Business states “housing in correction” as an aside.
Canadian Buisiness’ “Canada’s Housing Crash Begins” article is back, in preview form.
TD says the housing correction appears to be under way.
Hot debate. What do you think?
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September 18th, 2012 at 12:36 pm 30
Home Sweat Home: Can home ownership be achieved?
http://www.alumni.ubc.ca/2012/events/dialogues/ubc-dialogues-richmond-2012/
“Although the Lower Mainland’s real estate market is cooling, home prices remain sky-high. Combine this with the Canadian government’s ever-tightening mortgage rules and the constant threat of interest rate hikes, and even established professionals are finding themselves priced out of the market. With stagnating household incomes and some of the highest living expenses in Canada, it seems impossible to break into the housing market. How can we overcome the region’s affordability issue?”
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September 18th, 2012 at 12:39 pm 31
@mac: Isn’t this a bit ridiculous? A well-reasoned comment voted off the planet because only eight people can’t bear reading it. Are we that sensitive now that we can’t hear the other side?
Hot debate. What do you think?
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September 18th, 2012 at 12:42 pm 32
Can someone with access please check the validity of the following quote:
“From Sept 1-18, there were only 6 SFH sold in Richmond. Total SFH inventory in Richmond is 1139.”
I think this might be too good/dramatic to be true…
source: chinese forum
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September 18th, 2012 at 12:46 pm 33
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September 18th, 2012 at 12:48 pm 34
@YVR2ZRH: I agree with your point (on something that no one now can easily read).
I know we’re trying to kill off the trolls. I wonder if there’s a stab at self-discipline that we can take in voting down and into oblivion only the posts that are there to provoke bears?
Hot debate. What do you think?
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September 18th, 2012 at 12:49 pm 35
@Troll: Yes but if you’re just going to provoke the bears, I would vote you down too.
Hot debate. What do you think?
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September 18th, 2012 at 12:59 pm 36
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September 18th, 2012 at 1:08 pm 37
@mac: So provoking anyone other than bears is OK, like say the Chinese or Realtors or Economists, but asking bears to be a little more balanced and objective is somehow off limits?
For the record, I have a bearish view on Vancouver RE prices, and have had for several years. I come here for information and understanding. The stats and some of the market analysis by a very very small number of posters is truly the strength of this blog. The comments section, not so much, thanks to a bunch of rabid bears who quickly vote anthing into oblivion that doesn’t conform with their very narrow, doomerish view of the world. If that’s what the owners of this blog are going for, more power to them. But you do yourselves a disservice by pretending it’s a bastion of open discussion and objective analysis.
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September 18th, 2012 at 1:09 pm 38
@ Best place on meth
I agree – but I think the municipalities will be ground zero. The municipalities have been forced to eat huge pay hikes from workers and pension funding hasn’t been improving. A correction in home prices will be a blow to tax collection. Even though property tax revenues won’t drop proportionally, municipalities are going to have angry voters who will argue that property taxes SHOULD come down with property values. Municipalities will lose out on all of the revenue from permitting and local business activity that spins out of real estate.
The biggest component of municipal budgets is fire and police. I know so many police officers that have no education and make $150,000+ in salary with their overtime, plus they have the fattest Pension and perks in the public sector. They work to age 55 and retire for 30 years. Cities just can’t afford this, when the music stops it is going to get ugly. And the provincial government’s hands will be tied as well.
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September 18th, 2012 at 1:11 pm 39
@VMD:
here is an example of Richmond SFH sales of late:
7920 SHACKLETON DR RICHMOND V964958
(suppsed to be ‘good’ area in Richmond)
Assessed at: $1,010,000
Asking: $849,000
Sold: $765,000
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September 18th, 2012 at 1:17 pm 40
@mac: This has been discussed many times. Foreign buyers are not limitless, and they are concerned about the prices they pay and the directions those prices go too. Also, it’s not like there’s a shortage of land. If there’s an increase in demand there will just be an increase in supply until things go back to equilibrium. You bet things aren’t in equilibrium now.
Hot debate. What do you think?
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September 18th, 2012 at 1:21 pm 41
At a business breakfast this morning I heard someone at my table express his astonishment at how many condo buildings are still being built while the “…housing bubble is starting to burst.”
He said this in very matter-of-fact manner as if it was a well accepted fact that this was happening.
Times have sure changed.
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September 18th, 2012 at 1:27 pm 42
@VMD: This price was last listed at $799k, but here’s a page showing the original listed price of $849k in case anyone wants to argue:
http://webcache.googleusercontent.com/search?q=cache:c3skdS44dUUJ:www.ecorealtyinc.ca/search%3Fq%3DV964958+&cd=1&hl=en&ct=clnk&gl=ca
Hot debate. What do you think?
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September 18th, 2012 at 1:27 pm 43
I had a quick amateur try at looking at Canadian 5 year mortgage spreads.
http://housing-analysis.blogspot.ca/2012/09/mortgage-spreads.html
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September 18th, 2012 at 1:40 pm 44
Eventually after the market cycle begins anew, we are going to have to become real estate bulls. We are going to have a difficult adjustment period like real estate puberty.
Hot debate. What do you think?
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September 18th, 2012 at 1:57 pm 45
@Signs of the End: ” If we learn anything from history it is that we learn nothing from history”
History doesn’t apply when “it’s different this time”!
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September 18th, 2012 at 2:05 pm 46
Wow, seeing all the negative data is really encouraging! There may be some great deals in the future for us prudent borrowers who don’t want to have insane mortgages. I’ll probably be looking for a house in Richmond in the next two years ( if the price is right ). And I was wondering if anyone knew how to get that mothball smell out of a residence? I’d like to be able to not exclude 50% of the market right off the bat.
Hot debate. What do you think?
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September 18th, 2012 at 2:18 pm 47
At worst, housing market headed for soft landing: Scotiabank CEO.
Hah, Soft Landing? I don’t think so, Crush, yes and I am trying to sell all my bank stocks.
Hot debate. What do you think?
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September 18th, 2012 at 2:29 pm 48
@real_professional: Stockton, anyone?
https://www.google.ca/search?q=stockton%2C%20ca#hl=en&sugexp=les%3B&gs_nf=1&tok=NPCA61g3iKyNHAkjyJhepw&pq=stockton%20bankr&cp=15&gs_id=d4&xhr=t&q=stockton+bankruptcy&pf=p&safe=off&sclient=psy-ab&oq=stockton+bankru&gs_l=&pbx=1&bav=on.2,or.r_gc.r_pw.r_cp.r_qf.&fp=23d9e290382abbc5&biw=1680&bih=910
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September 18th, 2012 at 2:53 pm 49
@Troll: I haven’t said that. I said the opposite. I support counter-arguments. After all, I make some of them (want not to suffer from confirmation bias). But I don’t support inane remarks that are only there to irritate the bears like this one from yesterday:
…this blog is a bunch of debt carrying renters. None of you have any stocks or the money for a downpayment. Why even worry about prices when you don’t have 2 cents to rub together to buy even a nice dinner out….
That’s worth voting down into oblivion because it’s a distraction from discussion and we’re all posting on an anonymous blog, the poster has no idea what kind of money anyone has.
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September 18th, 2012 at 2:58 pm 50
@VanRant:
“Hah, Soft Landing? I don’t think so, Crush, yes and I am trying to sell all my bank stocks.”
Don’t bother, banks unloaded all of their risk to tax payers through CMHC
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September 18th, 2012 at 3:13 pm 51
@mac: The new rating system still needs to be tweaked, it hides comments too quickly. We should also have something between 0 and ‘foreclosure’.. more of a ‘do not like’ ranking. That way perhaps people would refrain from voting away comments they simply disagree with.
I do think the ability to unhide comments is a decent improvement and we’ve just removed the ‘tiny type’ formatting from those lowest rated comments since it’s redundant to have them hidden and unreadable.
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September 18th, 2012 at 3:14 pm 52
@Bly: ” I was wondering if anyone knew how to get that mothball smell out of a residence?”
Not sure if you’re serious or not with that question, but thought I’d answer it anyway since it’s good advice.
Rent an industrial strength ozone machine. Blast each room one at a time by putting the ozone machine inside and seeling it up (closing windows and doors is sufficient…you may want to tape seel the doors from the outside.) Good to run a fan, on low, in the room to circulate the ozone around.
Be careful to limit your exposure to the ozone when you turn off the machine (turn off machine, open windows and doors, turn fan on high, leave the building for at least 30 mins), it will irritate your lungs at high concentration.
Vacuum house when finished.
Make sure the area you’re treating is dry, so if it’s moist, be sure to dry out with a space heater first.
Results amazing and permanent so long as area stays dry.
Don’t worry, this ozone is harmless to the environment, so you won’t be increasing the size of the ozone hole in the atmosphere.
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September 18th, 2012 at 3:15 pm 53
Anyone know how the REIT’s will be affected by the market shift? My parked money is rotting away and I’m trying to diversify my dividend stocks.
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September 18th, 2012 at 3:19 pm 54
Thank you for improving the site. As housing market go south, I think you will get a lot more traffic.
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September 18th, 2012 at 3:30 pm 55
@Bag it and tag it:
no it was serious question I am sure, since I am trying to figure out the same for some time. There are plenty of houses with awful smell..
do you know anyone(company or contractor) that can do the work for you?
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September 18th, 2012 at 3:39 pm 56
@T:
REIT’s aren’t stupid with their money like the average person in this town, they look for ROI and value – something that amateur landlords haven’t a clue about because they’re chasing appreciation.
REIT’s should be able to uncover a lot more value in real estate as prices fall.
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September 18th, 2012 at 3:39 pm 57
New Listings 286
Back On Market Listings 11
Price Changes 147
Sold Listings 87
ALL LOWER MAINLAND as of 3:35pm
I was out for lunch today at Browns Restaurant in Burnaby today. When I got back to my car which was parked in the underground parking I found an advertisement on my wind shield.
reads:
HAVE LUNCH ON US!
Join us on Wednesday Sept 19th between 11am – 1pm at SOLO District
Little weak to be putting that on my car… It might have been Jim Bosa himself walking around doing that.
anyway thought I would share.
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September 18th, 2012 at 3:56 pm 58
@asalvari1:
Regarding the ozone treatment, it works incredibly well. The house we bought was 1 year old but had a very strong curry smell to it (so much so that I was hesitant to purchase until the owner of the ozone company essentially promised it would work). We ran the ozone treatment for 48 hours and a couple of hundred bucks for equipment rental and 3 years later there is absolutely no smell. The house should be completely empty for the entire time the ozone is running for best results.
I’m trying to find a receipt or something else so that I can give you the name of the company – will post when I find it
Hot debate. What do you think?
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September 18th, 2012 at 4:04 pm 59
@Best place on meth:
The problem isn’t the people who are running the REIT’s, it’s the people who are buying the shares of REIT’s and running the prices up.
The yield of XRE (which covers all REIT’s) is 4.35%, barely more than Telus’s 4% and far less than most income trusts. And the latter pay dividends, while REIT’s pay a mixture of income and return of capital (i.e. your money back).
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September 18th, 2012 at 4:04 pm 60
The company is CrystalAir:
http://www.ozone.ca/
They are located in Langley. They can do it for you but you are better off just renting the equipment since you just have to pick it up, place it in the home and turn it on then come back in 24 or 48 hours and the problem is gone.
Hot debate. What do you think?
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September 18th, 2012 at 4:04 pm 61
@Vanrent: “At worst, housing market headed for soft landing: Scotiabank CEO.”
Saw that article and LOL’d. Soft landing is by def the best case for what’s happening, so how does that become the worst case?
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September 18th, 2012 at 4:07 pm 62
RE: Ozone
Lots of air filters have an ozone option, or you can pick up the Oreck XL from Costco or “As Seen On TV” stores.
Probably not as strong as the professional service, but $300 to own vs a couple hundred to rent.
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September 18th, 2012 at 4:25 pm 63
Certainly an improvement over the other rating system. I had problems voting on some of the posts in the past. Sometimes it wouldn’t take the vote, other times it marked it twice.
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September 18th, 2012 at 4:34 pm 64
2 banks now calling for 10% lower prices. This is really heating up.
Hot debate. What do you think?
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September 18th, 2012 at 4:34 pm 65
The cartel’s won’t be happy with all of this truth mongering.
Hot debate. What do you think?
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September 18th, 2012 at 4:39 pm 66
Hidden due to low comment rating. Click here to see.
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September 18th, 2012 at 4:40 pm 67
I just realized that Hockey’s locked out. Vancouver only has so many topics of discussion: weather, hockey and houses.
It’ll be interesting hearing people talk as the fall weather rolls in and no hockey around.
Hot debate. What do you think?
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September 18th, 2012 at 4:42 pm 68
Not the best article, but here’s something to file under “renting-is-awesome”. If we finally get ourselves a hearty crash like the US we’ll be reading these all the way to the bottom.
http://www.theglobeandmail.com/globe-investor/personal-finance/home-cents/why-im-going-to-wait-to-buy-a-house-and-keep-renting/article4542610/
Hot debate. What do you think?
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September 18th, 2012 at 4:50 pm 69
@T:
Be careful with “home ozone generators”. While ozone is a good thing in the upper atmosphere, at sea level it’s a pollutant. The Government of Canada put out a warning a few years ago about these devices.
http://www.hc-sc.gc.ca/cps-spc/pubs/cons/ozone-eng.php
Ozone works great at eliminating odors by the way. It’s just that the stuff also happens to be bad for your health.
Hot debate. What do you think?
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September 18th, 2012 at 4:58 pm 70
Thanks, admin, for changing the comment rating system. Although the “Foreclosure” stamp may have been satisfying to some, I’m sure it just aggravated the trolling and brought down the level of the conversation on the site. Being a non-bear (not a bull, mind you), I can tell you it was extremely annoying to have every non-bear comment I made voted into oblivion and hidden behing that stamp, often without a substantive response from anybody.
Hot debate. What do you think?
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September 18th, 2012 at 4:58 pm 71
Before going to work this morning, I posted about the Little Mountain redevelopment. I’m a little disappointed nobody could offer any insights. I know that a lot of you have a better command over economics than I do, so I was looking forward to what you might have had to say.
I am just wondering how this redevelopment can possibly go forward in the context of a real estate crash, that is likely going to hit the condo segment of the market the hardest. The developer bought the land in spring 2008. The price he paid is confidential, but it likely would have been based on Spring 2008 real estate prices. That was before the global financial crisis, so I believe real estate prices were quite strong in spring 2008. He is to build 1800 units, of these 234 will be replacement social housing units (which BC Housing pays for). So really, it’s about 1600 market condos. The social housing is going to be built first. The market condos likely won’t be complete for several years, maybe 3 to 5 years. If prices really go down and stay down, but if he bought the land based on the assumption he would be able to sell the condos at 2008 prices, won’t there be a shortfall there. Will 2015 condo prices in Vancouver be less than 2008 condo prices? How can the developer make this work economically? Plus there is an approximate $30million amenity package he has to pay for.
Some have suggested he will ask to renegotiate the purchase price of the land with BC Housing, given the market correction that is taking place. But they can’t do that legally.It would have to be put out to public tender so other developers would have a chance to bid on it, if he wanted to change the purchase price.
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September 18th, 2012 at 5:02 pm 72
@57 Lol free lunch, nice but only if it comes with cayak!
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September 18th, 2012 at 5:06 pm 73
@Anonymous:
“Being a non-bear (not a bull, mind you)”
Does that mean you think prices are going to stay flat or do you simply not have a view on which way prices will go?
Not a criticism, just interested.
Hot debate. What do you think?
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September 18th, 2012 at 5:07 pm 74
@Many Franks: I think the fact that the majority of comments are agreeing with the author says smth about the changing mentality of the general populance too.
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September 18th, 2012 at 5:10 pm 75
@Anonymous: Maybe if you’d pick a name, you wouldn’t be confused with the other “Anonymous” out there.
Hot debate. What do you think?
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September 18th, 2012 at 5:12 pm 76
@joe_blown_away_by_high_housing_costs: I confess I don’t know much about this development project, but it sounds like if the developer doesn’t execute on his promise (build social housing, amenities, etc) in a timely manner, there’s nothing the government can do?
Seems like another Olympic village (albeit smaller scale)? I still don’t understand why the city govt is on the hook for OV, btw.. not that I really made an effort to understand it either cuz I know my blood pressure will shoot up if I learn about it.
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September 18th, 2012 at 5:14 pm 77
@joe_blown_away_by_high_housing_costs:
This development and many other depend on DENSITY.
For example, developer purchases the land for Density = 1, meaning one story buildings only. Then it becomes 2,3,4,5 free of charge.
The math always works out for developers. (Hence they have money to hire Jim Green and other big shots in City Hall). Don’t really need to work about them.
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September 18th, 2012 at 5:21 pm 78
New Listings 242
Price Changes 142
Sold Listings 84
TI:19146
http://www.paulboenisch.com
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September 18th, 2012 at 5:30 pm 79
@cris:
The increased density for the Little Mountain site would have been built into the purchase price nthe developer paid for the land.
Even before the developer got involved, BC Housing’s plan for Little Mountain was to significantly increase the density. In 2007 Rich Coleman said as many as 2000 units could be built on the site. The developer bought the land based on an expectation that density nwould increase. In fact, the developer has only paid a $20 million deposit on the land. The sale of the land is not final until the City of Vancouver agrees to rezone the land for higher density.
So he would have bought the land based on the assumption that he would be able to sell 1000s of condos at 2008 prices, but by the time those condos will be finished it may be 2015 and the prices will be much lower than 2008. That is why I think this redevelopment is in trouble.
Hot debate. What do you think?
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September 18th, 2012 at 5:36 pm 80
@patriotz: I am not as convinced as many others here that there will be dramatic downturn. But, neither am I in the “prices can only go up” camp.
Hot debate. What do you think?
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September 18th, 2012 at 5:38 pm 81
@gokou3
Thanks for your response.
“doesn’t execute on his promise (build social housing, amenities, etc) in a timely manner, there’s nothing the government can do?”
That’s right. There are no timelines built into this project. It may be another 20 years before anything is built there (another similarity with urban renewal from the 50s…demolish something and then take years, decades to rebuild).
But the sale is not finalized until the City rezones. Assuming the City does not rezone before the NDP are elected next May, an NDP govt may decide it does not want to go through with the deal with Holborn. The provincial govt would have to pay Holborn back its $20 million deposit. Then the privatization would be halted. But I don’t know if the NDP would do that. They really haven’t said what they would do.
Also, if the City is unsatisfied with how things are going, the city can hold things up by not rezoning.
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September 18th, 2012 at 5:48 pm 82
Here is the updated chart with Paul’s latest stats. As we can see, we are now 12 sales days post-Labour day and we’ve only had 1 double-digit sales day. In 2011, we had 11 double-digit days at this point.
http://i45.tinypic.com/23sjg3b.gif
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September 18th, 2012 at 5:48 pm 83
Sorry meant “triple digit” sales days.
Hot debate. What do you think?
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September 18th, 2012 at 5:49 pm 84
@joe_blown_away_by_high_housing_costs: Thanks for your explanation. Sounds like another mess.
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September 18th, 2012 at 6:52 pm 85
Inventory growth has really slowed. Lots of delists. But those sales are still weaky weaky weak!
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September 18th, 2012 at 7:03 pm 86
@VMD or VHB re delists/expired listings
Do you have historical data on the expiration totals over time. I sense there are a lot of delists in comparison to prior years. If so you might interpret that there is a larger than normal proportion of sellers who don’t have an mls listing at the moment.
I have also noted driving by a few sales signs recently which were mls listings previously but never sold and still appear to be for sale, eg. show up on realtors listing page. In any case some hard numbers might support the anecdotal evidence.
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September 18th, 2012 at 7:15 pm 87
We’re these for sale?
http://vancouver.en.craigslist.ca/van/apa/3280974666.html
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September 18th, 2012 at 7:18 pm 88
@asalvari1:
I rented one from A & B tool rental on Main St @ 23rd. It was about $50 for 24hrs I think. Simple to do it yourself…they can answer all your questions.
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September 18th, 2012 at 7:59 pm 89
Well, blow me down, another sub 100 sales day. I found out today another 2 dedicated apartment buildings under construction. WTF?!? Unfortunately I don’t know the details. It seems illogical that a developer would borrow $$ in order to build a building that would negative cash flow. Maybe they had a condo project underway and switched the plan as a face saving reaction once they realized it wouldn’t sell. Or maybe it is dumb REIT hubris money?
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September 18th, 2012 at 8:07 pm 90
@Anonymous: “We’re these for sale?”
Yup it is our old buddy Gary. Enter his phone number in the CL search to see all Westside houses he has for rent. He has had dozens over the past couple of months, all vacant and look like failed flips.
Hot debate. What do you think?
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September 18th, 2012 at 8:16 pm 91
@HAM Solo: Where are they?
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September 18th, 2012 at 8:27 pm 92
@market stats: I would also be interested in what the expired listing trends are. I only have paulb’s stats. Thanks man!
For what it’s worth this is the data I have:
http://www.paulboenisch.com/
Hot debate. What do you think?
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September 18th, 2012 at 8:28 pm 93
@ Anonymous – don’t know, was talking casually with an acquaintance who works for Avison Young
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September 18th, 2012 at 9:07 pm 94
@admin: Yes. I agree. There are some good improvements from your side. It would be nice if there would be some improvements from our side, so that those of us who want to hear from reasonable bulls can.
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September 18th, 2012 at 9:13 pm 95
I’ve been running with the same fairly large group for a year now. Every time the conversation has gone to real estate, the verdict has always been that Vancouver will never go down. Now, all of a sudden, these same people are saying that the bubble is “finally” bursting, and the group members are teaching each other new terms like, “under water.” It’s amazing how fast it goes.
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September 18th, 2012 at 9:15 pm 96
My neighbour in the Olympic Village counted up all the condo towers under construction. He counted 14 projects in various stages. Fourteen!! Plus I think there’s a new one at Cambie & 7th. Plus another new one on West Broadway just west of Cambie…
It’s amazing. Plus there are lots of lots with crap old buildings just waiting to be torn down in the same vicinity and then the real “last waterfront development” directly West of the OV, which will block everyone’s view of the city.
Double plus the slope between W. Broadway/Cambie/Main/W 2nd Ave is a natch to be developed just like the Armoury District was. Developers are really going for it over here.
Hot debate. What do you think?
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September 18th, 2012 at 9:33 pm 97
@mac
I can’t believe all the condos being built on 2nd between main and cambie….just drove by that area yesterday for the first time in months, my jaw dropped
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September 18th, 2012 at 9:38 pm 98
@VanDweller expired listings
Looks like sept is on course to be significatly higher than 2011. I also don’t have the data in spreadsheets, if someone were to have the paulb dailies in some columns it may not be that hard to parse out.
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September 18th, 2012 at 10:11 pm 99
@mac:
Don’t forget the Concord Pacific area south of the viaducts.
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September 18th, 2012 at 10:34 pm 100
@mac: Mac, all these condo’s between 2nd and the Olympic village are teeny tiny too so no long term marketability. The new building on 8th 3 blocks west of cambie has many units listed on Craigslist all at least 300 over rents for buildings in the same location and same size. The newer the building the smaller the unit and the higher asking rents. The speculators that bought these places are bleeding cash now that the building I occupied and nobody renting. Here’s an example asking 2280 for 805sqft…good luck with that!
http://vancouver.en.craigslist.ca/van/apa/3254943759.html
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September 18th, 2012 at 10:36 pm 101
Here’s another, same bldg, 2K for 1 bdrm…dream on sucker
http://vancouver.en.craigslist.ca/van/apa/3280163460.html
Hot debate. What do you think?
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September 18th, 2012 at 10:40 pm 102
And another 2k one bedroom:
http://vancouver.en.craigslist.ca/van/apa/3209534572.html
We are in the same area, 980sqft, 2 yr old building 2bdrm for 1900 plus we have storage and a much better location!
Hot debate. What do you think?
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September 18th, 2012 at 10:44 pm 103
@Anonymous: I used to (10 years ago) drive along W. 2nd ave everyday in rush hour. There were rarely traffic jam. But recently, I drove by again, in off-peak hour, and traffic was very heavy. Not trying to sound anti-development, but just an observation that the traffic is a direct result of the new buildings in the area.
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September 18th, 2012 at 11:03 pm 104
Couple random things.
1.) This is the same comparative week during the year at which inventory peaked in 2008.
2.) Condo sales are really slowing and will come in about 15% below 2008 same month while detached will come in a bit higher.
3.) North Van, West Van and Burnaby – all dead and all forecasted to sell the same number of units this month. For a city like Burnaby, that has to be a disaster. 250K people and only 35 detached houses sell in a month?
4.) Avg Apartment price will spike this month a bit. 2 have sold at close to 5 Million this week alone. Penthouse in Jameson finally moved.
5.) We will be lucky to reach 18,600 REBGV inventory at end of month. 19K is not possible and given the typical slowdown of listings in October, it will not reach 19K this year. (I think I already said that last week but was shot down !!!! )
September has been very very steady day to day. Except for the one day where we had a spike, and the typical slow Friday, we have been projecting the same monthly stats for most of the month. Very safe to say now that 2012 will come in below 2008 so this is the worst in 12 – - sounding familiar. Will be interesting to see if October is worse than 2008 – unlikely.
Hot debate. What do you think?
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September 18th, 2012 at 11:45 pm 105
@Anonymous:
Bag it and tag it / Anon
Thank you very very much for this info. As much as simple and minute it may look to you, trust me, I did not know that getting rid of the smell in this easy way is possible.
Which also begs the question: Why all these people live in stinky houses?
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October 1st, 2012 at 9:01 pm 106
As noted by Garth tonight: “Such things swirled in my mind as I listened to the reporter itemize the proposed ‘emergency actions’ he heard are being contemplated by government officials. There were three. First, a special fund which homeowners could draw upon to make mortgage payments if a real estate correction impacted their employment. Second, the ability to write mortgage interest off income tax, as is the case in the US (where houses cost a quarter what they do in Vancouver). Third, a ban on anyone losing their home for non-payment of a mortgage.”
Speculators can be very well connected and highly motivated to save their ass. And they are apparently workin’ in to get mortgage concessions.
So now we face the galling prospect of taxpayers guaranteeing their loans (through CMHC) and now eating their losses.
Anyone know how to kick-start a political lobbying campaign to stop these idiotic rule changes that pump up the market and reward the “undeserving” (as Garth puts it)?
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