Here’s a couple of million dollar houses.
This first one is in West Palm Beach. It’s a modest 6,898 sq. foot 5 bedroom home on 2.5 acres with a guest house and five car garage:
But for just $50k more you can get this beauty in South East Vancouver, conveniently close to Burnaby. It’s a 1958 sq. foot old timer with a basement and all windows are double glazed:
This post was submitted by Eddie.
Well, It’s back to school and back to work time.. unless you can cash in a Vancouver property lotto ticket and retire.
Looks like a lot of people have decided its time to try to cash out, yesterday saw a big listing day, Paulb says 356 new listings with only 103 sales.
Inventory posted numbers by area and a lot of places, including west van, burnaby, Vancouver West and white rock saw a sales to list ratio of 25% or lower.
Is this the start of a slow sales autumn or just a post holiday blip? Is it the right time to try to sell, or should you be buying investment properties in hopes of future gains?
Poor Helmut Pastrick is at it again, (HT Raize on Realestatetalks) providing insight into how markets will react with BC voters laying the smack down on a harmonized sales tax. So let’s assume for a moment what’s done is done and look again at how the HST affects house prices. According to Pastrick:
According to Pastrick—chief economist for Central 1 Credit Union, the association of credit unions in B.C. and Ontario—some buyers, especially of new homes, may delay purchases and save themselves some extra money.“Will it hurt?” Pastrick asked in a phone interview with the Georgia Straight. “I think that impact will be temporary. The activity would be made up under the new system shortly, and indeed under the new system, the demand for housing is somewhat improved given the lower costs that will be in effect. So that would provide some lift to the housing market.”A housing-market analyst with the Canada Mortgage and Housing Corporation in B.C. before joining Central 1 in 1997, Pastrick said that the changeover period will also likely see postponements in the planned construction of new homes.“It depends on the transition rules, but in general I would expect to see some delay into the new tax system for some new construction,” he said.
Ah so demand will improve under the new system. Well that’s good news. But let’s remember a few things about the housing market:
I do not pretend to be a professional economist, but I’m trying real hard to figure out how, as an investor, I would hold off a purchase solely due to the repealing of the HST. After all, I can factor the tax into my ROI calculations. Please help me out, readers!
How much does the drug economy in Vancouver drive up prices? I was sceptical about it’s impact until I read this recent article in Vancouver Magazine:
Cam Hui was stunned when he moved back to his hometown after a stint on the East coast. “This city is not overrun with the super-rich,” he says. “But you can’t get into the Vancouver West Side for less than $1.5 million for something that’s not falling down.” In Stamford, Connecticut, where Hui, an investment counsellor, lived previously, prices were just as high. But there it was understandable. The place was infested with people working in the investment business. Stamford has the head office of GE Capital, and, with Swiss bank UBS, the world’s largest trading floor.
Hui doesn’t see that level of financial activity here; nor does he buy the standard explanation for Vancouver’s real-estate prices: that offshore investment or Asian money is largely responsible. In a private blog, he argues that there has to be a connection to the drug industry. “And just putting my economist’s hat on, if it winds up back in the local economy, it creates inflation.” He, by the way, has not bought here because Vancouver’s market is so crazy. He rents instead.
Read the full article here.
This post was submitted by Spork.
The CREA has released stats and a forecast.. Apparently house prices are down and the expect them to stay that way.
“Earlier this year, the national average price was being skewed upward by sales in some expensive Vancouver neighbourhoods, but this factor is now diminishing,” CREA’s chief economist Gregory Klump said. “Upward skewing of the national average price is also shrinking due to overall sales trends in Vancouver, and most recently in Toronto.”
We all know you can Blame Canada and obviously you can also blame it on the rain, but did you know you can blame it on a fruit stand? That’s what one west van wannaseller is doing. He claims his house is not selling due to the fact that fresh fruit and vegetables have been available just down the street for the last seven years:
Paul Marshall, whose home is selling for about $6.5 million, has filed documents in BC Supreme Court arguing the city cannot issue a permit to sell fruit on a residential street.
He says the stand is scaring away potential buyers from the roughly 7,400-square-foot home, which has five bedrooms and six full bathrooms.
Typo in that first line.. Shouldnt it be “whose home is not selling..”. I guess it’s a slippery slope, first it’s apples, then its crack cocaine and nobody wants to buy a mansion near a crack cocaine stand. For the love of all things holy, can’t we just leave the produce in Safeway where the good lord intended it to be sold?
This post was submitted by Van MD.
As of yesterday inventory was a few hundred over 16,000. Will we see 17,000 places for sale again this year or has inventory peaked?
Ready to Pop pointed out this article about Canadians buying property in Hawaii now that the Canadian dollar is strong and some homes and condos are selling for half what they were worth in 2008:
“In some areas prices have dropped 40 to 60% and it’s as bad as Phoenix.”
He gets calls and emails from Canadians daily.
“Some are waiting for a bell to ring that says we have hit absolute bottom,” he jokes. “Others have pulled the trigger because in Maui we’re having a half-off sale.”
The loonie, valued at 62 cents US almost a decade ago, hit $1.05 in April. That means a million-dollar property in Hawaii, that would have cost a Canadian about $1.6 million in 2002, is now under a million.
The best values are on the big island.
“In Maui, you need two wallets — on Hawaii you can survive on one,” Dinits says. “You can get a nice house on Hawaii today, six blocks from the ocean, for $66,000. That would be a bank owned foreclosure, or REO (Real Estate Owned) deal.”
You often hear of high price/rent for SFH in the City of Vancouver being justified because of the scarcity of land. I thought I would do a comparison with the City of San Francisco, which is slightly larger than the CoV and has a population of about 800,000. But the really big difference is that it comprises a little over 1/10 of the metro population compared with 1/4 for the CoV. So you’d expect San Francisco to have a higher scarcity premium. Well no.
Take a look at this listing for the West Portal neighbourhood in San Francisco’s west side for $1,075,000:
http://www.redfin.com/CA/San-Francisco/2531-14th-Ave-94127/home/662192
And here’s the same house for rent for $5200/mo:
http://sfbay.craigslist.org/sfc/apa/2471867467.html
The rest of the neighbourhood:
http://sfbay.craigslist.org/search/apa/sfc?query=west+portal&srchType=A&minAsk=&maxAsk=&bedrooms=3
Price/rent for this property would be 207.
What about the comparable numbers for, say, Dunbar? Maybe $1.5 million and $3500/month? That’s a price/rent of 428.
Now you might say yes but property taxes are higher in SF. That’s true so let’s see how much higher.
This property is assessed at $402,019 and has property taxes of $4,836 /year. That’s because of California’s looney property tax system which taxes at the most recent sale price, not market value. If you bought the house for $1,075,000 you’d pay $1,075,000/$402,019 * $4,836 = $12,931/year.
Total property taxes in CoV are 4.21377 mills, so a $1.5 million property would pay $6320/year.
Calculate price/(rent-property tax) and you get 261 in SF versus 504 in Vancouver.
And I didn’t factor in mortgage interest and property tax deductibility and the ability to lock in low rates long term in the US.
You’d pay more for just a lot in Vancouver than the whole house in San Francisco. What sense does that make? In which city is land really more scarce? What do the rents tell you?
This post was submitted by patriotz.
Here in Vancouver a ‘luxury home’ is one that costs more than 3 million and looks like a $300k house in Tampa. And that’s just the market segment that is set to soar this year.
The 2010 total has already been surpassed, with 384 homes over the $3-million price point sold so far in 2011, according to Macdonald Realty.
There have also been 66 homes over $5 million sold so far, and a predicted 132 over$5 million by the end of the year.
A total of 40 condos over $3 million have so far been sold, including seven over$5 million.
However, the trend partly reflects price increases that have pushed previously cheaper homes over the $3-million luxury home threshold.
The trend is your friend, get in now while prices are going up.
This post was submitted by thenonymous.
