Vancouver Condo Info

Petr and Ola are the creative duo behind Crackshack or Mansion, the online quiz that serves up very clear visual examples of lunacy in the Vancouver housing market.  They recently updated the game to a second version.  Can YOU tell the difference between a crack shack and a million dollar house in Vancouver BC?

They have agreed to do an open format interview that will let you ask the questions.  Post any questions you have for them in the comment section and vote up the ones you’d like to have answered.  I’ll  send on the top rated question comments to them and post their answers next week.  Ready?  Ask away!

The Vancouver Real Estate Anecdote Archive (VREAA) has been doing a great job of collecting anecdotes from the great Vancouver housing bubble for a while now, and many reader here will be familiar with that site.  VREAA is now running a series called Froogle Scott that follows along the experience of one local homebuyer who bought early in the run-up.

September 2003
My wife and I, first time buyers, purchase a 1940s stucco bungalow in the Grandview area of East Vancouver for the asking price of $355,000. This is about a year and a half into the current eight-year real estate boom/bubble. The lot size is 33 x 117, just slightly smaller than standard. The MLS listing gives the square footage of the house as 1860, which later turns out to be a 20% exaggeration. The house is only about 1550 square feet, split over two levels — the main floor, and a two-bedroom, ground-level rental suite. The rental suite is tenanted — a quiet single mum with stable employment and her teenaged son, who look at us with a certain amount of trepidation when we first tour the house. They needn’t worry. We’re happy to inherit good tenants, and do not increase their rent ($560 a month, plus 40% of the utilities) for the year and a half that they continue to live in the suite.
……. We avoid a bidding war because of the listing agent’s greed. She wants to sell the house to her own clients and pocket both ends of the commission (“double-ending”). So she doesn’t have an open house. And the home owners perhaps aren’t savvy enough to demand that she have one.

Read the whole first installment at the VREAA site.

The Vancouver bubble blog bubble is rapidly deflating. The latest casualty of this humour downturn is the witty and beloved condohype, who posted notice of closure this morning.

I hold out hope for a change of heart, afterall it wasn’t so long ago I posted about this blog closing for similar reasons.

Le hype est mort, vive le hype!

Paul has given us a gift that keeps on giving with his new web site. If you haven’t seen it yet do yourself a favor and check it out – there’s an incredible treasure trove of information he’s made available including up to date statistics on details like average selling prices and days on market. He’s also sharing inventory charts for all sub-areas of Greater Vancouver going back 3 years. This will be an ideal resource for watching the market in detail. Go check it out and say hello on his new blog.

Lock up your condo and hide your car! Just in case this dark wet winter climate isn’t dismal enough, Vancouver is now the property crime capital of North America. According to a recent report break-ins happen here at a per-capita rate FOUR TIMES that of New York City.

Last year, Vancouver recorded more than 1,100 break-ins per 100,000 residents while New York City had just over 300.

The numbers are contained in the annual report by the B.C. Progress Board, which showed Vancouver had the second-highest combined violent and property crime rate among all major cities in Canada and the United States.

Its not all bad news though, we are a very healthy province:

Fewer British Columbians are obese and fewer adults smoke than in any other Canadian province. And B.C. leads the country in life expectancy.

But it’s in the area known as ’social condition,’ which measures everything from poverty to birth weights, that B.C. falls down with a ninth-place ranking among the 10 provinces.

According to the report, the most troubling social indicator was the 17.5 percent of British Columbians living below the low-income threshold, the second-worst ranking in Canada.

The report also notes the situation has not improved at all during the past decade.

From the Vancouver Sun:

“..the rate at which people are buying their own property is growing faster than the population.

However, particularly in B.C.’s high-priced markets, the buyers aren’t getting exactly the property they want where they want to live.

Century 21 Canada president Don Lawby, in an interview, said buying habits are changing because “that’s just the reality of the marketplace today, for first-time buyers especially.”

The article goes on to mention some of the interesting ways that buying habits are changing in ‘the marketplace today’:

Kevin Lutz, B.C. mortgage manager for the Royal Bank, said 75 to 80 per cent of his bank’s first-time borrowers in B.C. are taking mortgages with 40-year amortizations, and a higher proportion are coming with less than a 25-per-cent down payment.

In Vancouver, Julie Jaggernath, director of education at the Credit Counseling Society, said her office is “a little bit busier than we were last year,” with clients including those who have gotten in over their heads buying property or upsizing their homes.

“We’re also seeing people spending about 70 per cent of their income on housing and housing-related costs,” Jaggernath said. “That’s a lot.”

40 year terms are the new standard? less than 25% down? 70% of income on housing?

Wow.

Vancouver city council has released a report detailing plans to use the ‘Olympic Legacy Reserve Fund‘ to cover extra costs related to hosting the winter games. Words like ‘legacy’ are often used to indicate something long-term and ‘reserve’ sure sounds like it would be something extra set aside for a rainy day.

But opponents say that far from providing long-term legacies, as its name implies, the fund amounts to an Olympic operations budget.

Among the items it covers are a $1.4-million communications campaign, $1 million for the city’s host pavilion, $2 million for hosting dignitaries and $2 million for the “look” of the city during the Olympics.

The $20 million is a significant amount in a city budget where $5 million represents a one-per-cent tax increase.

But there we are, all the extra costs from hosting the games are accounted for.. If you happen to believe that, I have a wonderful second-hand bridge that I can sell to you for a tremendous bargain.

On a related note I found this article on Forbes about the ‘winners curse‘ that many host cities experience – the one exception being the 1984 LA summer games which actually turned a tidy profit since they had most of their infrastructure already in place and didn’t require a lot of extra construction:

“When multiple cities bid, each has a different view of what the revenues will be, and the one with the brightest economic forecast usually wins,” says Evan Osborne, an economist at Wright State University. But often, tourism revenue, job creation and ticket sales don’t pan out as expected, leaving local taxpayers with what Osborne calls “The Winner’s Curse.”

Former Salt Lake City Deputy Mayor Brian Hatch, a key player in securing that city’s winning bid for the 2002 Winter Games, recalled showing some Beijing officials around that year to help them prep for their city’s hosting role in 2008. They found hotel rooms at nonevent ski resorts easy to come by.

“People tend to avoid Olympic cities the year of the event, thinking it will be too crowded,” Hatch says.

The Eden Group is cancelling two local development projects citing difficulty getting financing and skyrocketing construction costs. The Elyse, a 119-suite condominium complex at 7th and Scotia Street in Vancouver had pre-sold 55 units, but letters are now going out and deposits will be returned.

“The industry itself — very difficult to get financing,” Eden said on Monday. “Basically, it’s extremely uncertain whether I can actually complete that building.”

Eden is also cancelling a $30 million townhouse development, with that site already up for sale. A Third Eden project at 11th and Sophia is currently under construction and will be completed as planned.

Hmmm.. Now why would it be difficult to obtain financing in a booming real estate market?

Full story on the CBC website

If you’ve seen billboards or newspapers inserts advertising real estate projects in Vancouver you may have noticed the strange disclaimer “This is not an offering for sale”. Seems odd to spend a bunch of money advertising something you’re not offering for sale doesn’t it? Why is this line of text omnipresent in presale advertisements?

Its all thanks to the Real Estate Developement Act which governs the marketing in British Columbia of development properties located anywhere in the world. The act limits marketing of projects without full disclosure but allows early marketing if the developer has obtained “approval in principle to construct or otherwise create the development unit from the appropriate municipal or other government authority” and “the superintendents permission to begin marketing”.

So in essence the act removes the right to advertise a condo or apartment before all the paperwork is in order, but then gives that right back as long as you assure people that this advertisement is not offering to sell you anything.

Ceci n’est pas une pipe?

Re-diculous posted a link to this story in the Vancouver Sun in the previous thread. Apparently some US owners of BC property are starting to cash out on their gains, particularly in light of the strong Canadian dollar. Is this a temporary adjustment or the start of a bigger trend?

Kelly said the activity amounts to only a handful of listings. But for some owners in Whistler – where property values have stagnated over the past few years – the recent gains for the dollar gives them a return on a property investment that hasn’t performed as well as they’d hoped.

Most of the article in anecdotal, but its backed up by some numbers from Landcor:

The net decline is just a blip, but Landcor’s numbers show that Americans sold property faster than they bought over the first 10 months of the year, and buying activity in 2007 has cooled compared with 2006.

Landcor counted 750 purchases by Americans registered in the land registry by the end of October, compared with 1,039 over the first 10 months of 2006. Matched against the net change in ownership, B.C. saw 933 more sales by Americans than purchases.

“So definitely, [Americans] are selling,” Landcor president Rudy Nielsen said in an interview.

Looks like a few people understand the ’sell high’ concept.