Vancouver Condo Info

YLTNBoomerang sent in some extremely detailed townhouse market tracking data for downtown Vancouver with the following note:

Hi,

Long time reader and sometimes contributor to your blog. I sold my place last March in Yaletown (townhouse on Marinaside Crescent) at $890/sqft and have been tracking townhouses in Vancouver ever since. More recently (January) I started recording changes in prices etc. on MLS in a increasingly large spreadsheet. I thought you might be interested in seeing how this specific slice of the market is reacting and have attached this sheet. Please feel free to use or distribute as you please.

Keep up the good work!

The information in this spreadsheet includes square footages, new listings and price changes from January 10 until July 29th (today).  Within the tracked time period for Waterfront townhouses in downtown Vancouver there have been 5 instances of asking price increases and 73 instances of asking prices being dropped.  The entire database is color-coded, with red indicating price increases and green indicating drops.

We discussed options for graphing the data included here, but neither YLTNBoomerang nor I could figure out the best way to do it, so here’s an open challenge to Vancouver real estate market data obsessives & excel graphing gurus: Can you figure out a way to present the information in this spreadsheet in an interesting and informative visual manner?

Click here to download the XLS document.

Want to share a graph? You can email it to me along with the name you’d like credited and I’ll post it here.  If you want to cut out the middleman (me) you can make a post in the discussion forum with any graphs or images attached and link to it in the comments below.

UPDATE: That was fast! Here’s a “day’s on market / price drops” scatter graph courtesy of an anonymous contributor:

UPDATE 2: Yet another anonymous graph-maker sent in this chart showing asking price per square foot for downtown town houses for the first half of 2008:

Todays Vancouver Province has an article on the growing risk of a US/UK style mortgage crisis in Canada. We’re building like crazy at a time when the rest of the world is slowing down, are we building our way into an over-supply situation or simply catching up?

Hall noted that housing starts in Canada are “soaring on the strength of the domestic economy and a huge dollop of very well-timed fiscal stimulus,” and that a continuing excess of housing starts over requirements means “Canada’s turn may come soon” for a housing crisis.

The report came in the wake of the Canadian government’s attempt to avoid a housing crisis by no longer insuring mortgages with more than 35-year amortization periods and less than five-per-cent down payments as of Oct. 15.

If fiscal stimulus results in overbuilding and a housing market crash, can it really be considered ‘well-timed’?

Hat tip to ‘bubblicious’ for the story link.

Deryk Norton of the Vancouver Island Strata Owners Association wrote in to let us know that VISOA has released their report on BC strata legislation deficiencies.  This is a follow up to this story we posted about in April.  Deryk mentions in his email that the Vancouver dailies haven’t covered this issue as they seem to more interested in ‘real estate boosterism’ than critical consumer issues.  Here is the text of the news release, with a link to the PDF report:

The Vancouver Island Strata Owners Association (VISOA) today released a report entitled Beyond the Sales Pitch: Ensuring Transparency and Accountability in BC Strata Developments. The report describes significant deficiencies in BC’s legislation affecting owners of 460,000 condominiums and other strata properties, or one in four taxable properties in the province.

This report comes after a series of public meetings with strata homeowners, written submissions from homeowners and consultation with homeowner associations on the mainland. Based on concerns expressed by strata homeowners, the report describes issues and proposes solutions. Most issues involve legislation deficiencies in transparency and accountability, including some corrected years ago in other jurisdictions. Highlights of deficiencies in BC’s legislation are:

• Requirements for disclosure of property condition and financial information that are inadequate for both strata homeowners and prospective purchasers,

•Lack of prosecution of developers operating contrary to strata legislation,

•Lack of an accessible and authoritative source of legislation interpretation to support the operation of strata corporations according to law,

•Dispute resolution provisions that effectively indulge irresponsible actions and leave disputes unresolved, and

•Standards for licensing strata managers that are ineffective in protecting the rights of strata homeowners.

VISOA will be taking this report to the provincial government and asking for a public review of the legislation affecting strata homeowners. It will also be available to other organizations and interested individuals”, said Felicia Oliver, VISOA President. The report can be viewed at www.visoa.bc.ca.

VISOA is a non-profit organization that has provided information and education services to strata homeowners and strata councils on Vancouver Island since 1973. It is independent of both government and the real estate industry.

Yes, markets change and so do ‘expert opinions’. And what a difference just a few days can make! Housing markets change at such a glacial pace that they miss out on the exciting daily ups and downs of the stock market, but the flip side is that once they start to slide it can take years for them to hit bottom. You don’t have to look further than our closest neighbor to the south to see an example of this slow downward slide.

This gradual change makes it all the more remarkable that a local housing market ‘expert’ would be singing two different songs within the space of just a few days. Thanks goes to Condohype for pointing the evolving marketview of Cameron Muir:

• “There is no indication, at this point, of any kind of substantial decline in prices,” Cameron Muir, Friday, July 11 2008
• “It is perfectly reasonable to expect home prices will stay fairly flat or even decline a couple of per cent a year until affordability picks up.” Cameron Muir, Tuesday, July 15 2008

Skeptics take heart, because I already know what you’re thinking - its the wonders of vague wording: a couple of per cent does not equal a ’substantial decline’, so this is not a reversal. And maybe you’re right, except there’s this small point: how many years do we have to suffer declines of ‘a couple percent’ until ‘affordability picks up’? Particularly with a global economic slowdown, a local economy coming off a boom and new mortgage rules that require more fiscal responsibility from buyers? Would a sharp shock to the market that quickly restores ‘affordability’ be a worse scenario than 10 years of slow equity leakage?

In June the REBGV benchmark price for a house dropped by about $5500 to $765,654. From that starting point a drop of just ‘a couple percent’ is a loss of more than $15,000 a year. Of course now that these predictions appear to be changing on a weekly or even daily basis, perhaps we’ll be hearing about the next leg up soon.

Thanks again to Condohype for the tippage.

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The CBC is reporting that two Concord Pacific condo towers in downtown Vancouver have developed leaky condo problems requiring millions in repair work. The ‘leaky condo issue‘ is very familiar to Vancouver residents, and apparently still very much a concern.

Governor’s Tower at 388 Drake St has required replacement of all windows, exterior walls and bricks which has cost owners at least $100k per unit:

The cost of repairs to the tower was estimated at $29 million, and each of the 237 condo owners had to fork over at least $118,000, with the cost depending on the size of their apartments, Fox said.

Governor’s Tower was built 14 years ago and the 10-year warranty had expired.

The Parkview Tower at 289 Drake street is the other Concord Pacific tower reported with this issue:

All the windows on the 14-year-old tower were replaced because they leaked, said Alan Cadwell, whose Langley-based company, The Condo Advocate, repaired Parkview Tower.

Cadwell’s company specializes in restoration management for leaky condos in B.C.

“With one good push, the window wall system, in theory, could be kicked out and could be travelling to the floor,” Cadwell said of the condition of the windows.

The cost of the repairs for Parkview Tower amounted to more than $8 million, he said.

Thanks to LaLaLand and Bizznitch for the story tip and link.

UPDATE: In a bit of synchronicity the Vancouver Sun has this article in todays paper: Leaky condo crisis far from over.

By 2012, when the leaky condo era enters its fourth decade, as many as one-third of the defective units will remain unrepaired, said the report, prepared for the province’s Homeowner Protection Office (HPO) by private consultants.

At least 45 per cent and possibly as many as 68 per cent of leaky buildings have not been repaired yet, according to various scenarios explored by the consultants.

…

The consultants made no attempt to estimate the total cost of the damage, but concluded that early estimates of the repair cost per unit - $10,000 to $15,000 - were way low.

“Based on the HPO experience, it would appear that the actual average repair costs are approximately five times or six times higher,” they said.

By last September, repair loans the HPO makes to leaky condo owners had grown to an average of $62,000 for wood-frame apartments, and $72,000 for those in concrete buildings.

Re-diculous posted this link to an article in todays Vancouver Sun about a dramatic drop in consumer confidence in BC.

Consumer confidence in B.C. plunged to its lowest level in five years last month as high energy prices and economic concerns test people’s resolve, the Conference Board of Canada reported Monday.

The board said B.C. consumer confidence fell 9.3 points in June to 94.3 - dropping below 100 for the first time since mid-2003.

The consumer confidence rating across Canada dropped 6.2 points in June to 79.6, following a seven-point drop in May, leaving the second quarter reading at its lowest level since the fourth quarter of 1995 when it was 68.8.

There’s been a lot of buzz in the news about inflation and recession worries lately - could this drop in consumer confidence be blamed on the media?

This is a pass-off post to Paul Boenisch at nvcondos.ca who has just posted some dramatic month-end June stats on his blog.

If you haven’t seen these numbers yet, or if you have any doubt that the Lower Mainland real estate market is undergoing a dramatic shift, check them out now.  Supply continues to grow while sales keep dropping.

Here are a few highlights:

Sales down 41% from June 2007
Inventory up 53% from last year
North Vancouver inventory up 113%

Check out Paul’s blog for all these stats and more graphed out for some dramatic visuals.

So far prices haven’t been impacted much at all, but increasing supply and decreasing demand will put pressure there unless this dramatic shift reverses soon.  Could we be in danger of tracking the US market?

Renewed concern over an old mortgage fraud problem has been in the news lately and that attention has people flooding the title office with calls from homeowners.  Last Friday the Vancouver Sun reported the story of a Retired Richmond man who discovered his house had been sold without his knowledge and a large mortgage taken out on the home:

It’s all part of an elaborate scheme that has surfaced recently in B.C. in which con artists are attempting to sell homes without the owner’s knowledge, leaving the homeowner off the title but with hundreds of thousands in new mortgage debt against the property.

In the latest variation of the scheme in B.C., a would-be seller contacts a notary or lawyer to carry out the sale of a home.

A buyer, who is thought to be in on the deal, applies for a mortgage on the property and if the transfer is successfully carried out, the mortgage funds are paid to the seller. The buyer and seller disappear and so does the money, often leaving the homeowner to discover the ruse only when the bank notices the mortgage payments aren’t being made and comes looking for its money.

While such fraud is not new, title insurance company First Canadian Title said B.C. has seen a jump in suspicious cases this year. And a B.C. Supreme Court decision this month ruled that while a true owner could regain title to a property if it was fraudulently transferred, mortgages taken out on the property — even if fraudulently obtained — still stand.

Unfortunately the only way to discover that you are a victim of this sort of fraud is by checking records with the title office, which has set off this recent flood of calls:

“A lot of people have been wanting information, and the calls are backed up for at least a day,” Ian Smith, director of land titles for British Columbia and registrar in the Land Title and Survey Authority’s New Westminster land title office, said Wednesday. “We had 180 I believe yesterday, and that was just in the New Westminster office.”

Meanwhile, the authority launched an appeal to a recent B.C. Supreme Court decision that ruled that while a title that had been fraudulently transferred should be restored to the rightful owner, a mortgage then taken out against the property would stand. The ruling suggested that the owner of the property could seek compensation from the land title assurance fund.

If you are concerned about this sort of fraud and own your home outright there is a way to protect yourself:

Homeowners who are worried, though, can request a duplicate certificate of indefeasible title, which can only be issued for titles that have no financial charges against them, useful perhaps since the con artists target homes that are mortgage free. New Westminster real estate lawyer Alex Sweezey said strata owners also are not a target because on a condominium sale lawyers also have to deal with the strata management company.

The cost of the duplicate title is $50, but once it has been issued nothing can be registered against the title until it is surrendered to the land title authority. Smith said homeowners can get a form to request the duplicate from the land title office or from most lawyers or notaries. However, if it goes missing, replacing it can be costly and time-consuming, involving affidavits and other requirements.

During this weekends open-topic post ‘tacoman’ noted that someone has started up a Victoria area flippers in trouble blog modeled after the original Sacramento area flippers in trouble and Phoenix flippers in trouble.  These blogs all track drops in asking prices and where available show recent sales activity.

The Victoria area blog isn’t yet showing drops anywhere near as dramatic as the US based blogs are tracking but it will be interesting to see where this goes as the market changes.  On the Sacramento blog the first listing is a house bought in March 2007 for $1,308,000, currently sitting on the market with an asking price of $600k.

Vision Vancouver mayoral candidate Gregor Robertson has proposed that Vancouver implement a speculator tax to deter condo speculation. In this case speculation is defined by the condo unit being left vacant rather than by flipping or simply taking on more debt than you can handle based on the hope of future gains.

Robertson justifies the need for this tax by referring to the BC Hydro grow-op study that found 18,000 vacant condos in Vancouver, which is equal to half the total number of condos in the Downtown Westend. This number is said not to include units that are part-time occupied as second homes or vacation properties, only units that use no electricity through the year.

The obvious difficulty comes in defining the criteria by which condos would be taxed at the business rate. Taxes on speculation are often based on ‘flipping’ rather than holding an empty condo. How do you determine if a condo truly is empty? Would there be penalties for ‘faking’ occupancy? What are your thoughts on this proposal, would it help or hurt the Vancouver housing market?