Vancouver Condo Info

From the Vancouver Condo Wiki - Expert Quote-tracker

It’s that time of year again - The Georgia Straight is asking for your votes on the ‘Best of Vancouver’ and our friend CondoHype has a great idea: Why not vote for your favorite real estate blog?

There are 238 questions on this years ballot - the one that interests us is in the section for “Media, Arts and Culture” and the category is “Best Local Blog Page“, although there’s also a spot for “Best Local Realtor” (Hi Paul!).

You have to answer a minimum of 25 questions out of the 238 for your vote to be counted and the the voting page can be found here: http://www.straight.com/bov

You’ve got a lot of good options, so I won’t try to influence your vote other than to say these are a few of my favorites:

http://vancouvercondo.info - you are here and I want your vote
http://condohype.wordpress.com - exposing the ‘con’ in ‘condo’
http://langley-financial-planning.blogspot.com - best charts around
http://vancouverunrealestate.blogspot.com -  blogging the disbelief

Did I miss one? Feel free to argue for your favorite or advocate for votes in any of the other categories in the comment section below!

Once again the voting page is at http://www.straight.com/bov

Sticker-Flicker is a term coined by Arit in last weekends Friday free-for-all post to describe a real estate sales sign that has a ’sold’ sticker applied, removed, and then applied again in any number of cycles.  This is a phenomena I’ve increasingly noticed myself lately in front of apartments, townhomes and houses around town.

There are a number of theories about the root cause of Sticker-Flicker ranging from a conspiracy to make it appear more sales are taking place to overzealous realtors applying the sold sticker upon recieving an offer, only to see the deal fall through.

Personally I believe its likely the latter. I have very little confidence in the organizational skills of people when it comes to conspiracy and I don’t really see the point anyways. The fact remains that we have over 20,000 places for sale in Greater Vancouver right now, the sellers market is over.  Would Sticker-Flicker really motivate someone to buy?

But maybe there’s something I’m missing.  What do you think- Have you noticed this phenomena?  What causes Sticker-Flicker?

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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This weekend the Vancouver Sun ran a story about the top 15 real estate myths and realities which generated a lot of reader feedback.  As of last night their website had many comments, the majority of which disagreed with some of the points in that article or the way that it was presented.

Today the comment section looks different.  This morning all but two comments had disappeared, with many readers here claiming to have re-submitted comments that have not showed up.  I’ve personally submitted a comment that has not yet appeared on their site.  Since this morning one additional comment has been posted (congratulations ‘crabman!’).

I’m going to give them the benefit of the doubt and assume that this is a temporary technical problem rather than a concerted effort to censor public feedback and appease real estate advertisers.  If they are experiencing technical difficulties I’m sure they would want to keep the conversation going, so please feel free to post your comments here while we wait for them to solve the problem and re-post reader comments on their website.

BDK posted a link to this article in Vancouver Magazine titled ‘sitting out‘ which shines some light on the hidden world of real estate bears and bulls that lurk online in the lower mainland.

Its quite a good article, outlining the basic points that go back and forth on both sides of the Vancouver boom/bust argument and profiling a local couple that recently sold:

In 2002 Felicity Stone and Jim Patton stumbled onto the real-estate mother lode, trading up from a house in rural Langley to a thoughtfully designed home on two acres in the Elgin Chantrell area of South Surrey. Patton, a communications consultant, and Stone, who works in public relations, were happy to pour work and money into the place, expecting to live there the rest of their lives. Then their outlook began to change. Much as they loved the 1962 gem, they also saw what nearby property was selling for. In August 2007 they decided to list, and by November they’d accepted $1.616 million—a 240 percent increase from the $475,000 they’d paid a half-decade earlier. Now they’re renting a house in the Bayridge area of West Van, paying $2,500 a month while they watch the market and wait for prices to drop.

They even link to several of your favorite blogs (VancouverCondo.info included) - my only complaint is they seem to have munged up the link to this site and they left out three interesting and useful sites which I’ll link to here:

Paul Boenisch and his amazing REBGV statistics

Mohicans analysis at langley-financial-planning

and the interesting new Vancouver RE anecdote archive

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Paulb posted a link to this surprisingly negative article in The Toronto Star this weekend - I say surprising because we’re used to seeing a much rosier outlook in the mainstream media. That kicked off a discussion on media bias that I think is worth continuing. As suggested by ‘burden of proof’ I’m going to post this as a few poll questions. Feel free to elaborate on your opinions in the comment section.

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Extra: Conjuration_imbeciles sent in this link to another article in the Toronto Star. One of the authors that predicted the US housing crash warns Canadians thinking about buying a property in the US that it’s still too early to buy. He predicts that there are more losses to come, particularly in markets favoured by Canadians (ie. Arizona & Florida).

Interesting commentary in MSN’s money central site:

With the 10-year U.S. Treasury bond yielding below 4% and 30-year mortgages available at 5.1%, there isnt a housing bubble

Mind you, I’m not saying that U.S. consumers don’t have too much debt, or that the U.S. economy isn’t dangerously dependent on the housing sector for growth, or that all the money sloshing around the globe isn’t encouraging dangerous speculation.

But those are different problems from the one getting all the headline attention at the moment.

It’s just that, for all the teeth-gnashing and pundit-moralizing, we really don’t have a housing bubble that’s anywhere near bursting. Current 10-year interest rates are just too low. And I certainly don’t see interest rates rising enough in the next year or so to burst a bubble, either.

..Interesting because it was published in June of 2005, right about the peak of the US market. Since that time prices and sales have dropped by record amounts and foreclosures have gone up 79%.

To make that monthly debt burden onerous enough to trigger a burst in a housing bubble, you have to look for a big drop in family income so that while monthly debt payments remain the same, they take up a bigger chunk of a diminished family income.

Huh. And yet mysteriously prices peaked in 2005 and started falling without a big drop in family income. Very strange!

The other trigger would be a big increase in interest rates that would push the monthly debt burden up on average and would strike especially hard at those home buyers who used an adjustable or no-interest mortgage to buy more house than they could really afford.

This trigger was also a no-show. There was no big increase in interest rates, but for some reason the buyers stopped showing up. Can housing markets collapse under their own weight? And if there is no housing bubble what happened in the USA?

Well, as the saying goes, prediction is hard, especially when its about the future!

update: On the local market front, Ella points out this article in 24hours that shows buying in Vancouver may make more sense than renting as long as you use some very questionable math, disregard half the numbers and base the rest of the figures on silly assumptions.

The Canadian Real Estate Association is predicting the Canada resale housing market will remain ‘at or near record levels’ this year.

“The statistics again show just how different the housing markets are in Canada and the United States. Canadian realtors know that Canadian mortgage lenders correctly see that home prices will continue rising.”

The association sees three factors that it believes will save Canada’s housing markets from the woes engulfing the sector in the United States: consumer confidence, employment and affordable interest rates.

CREA economist Gregory Klump said the market will pull back from the “breakneck pace” of 2007, but this is still forecast to be the second-busiest year on record in almost all provinces.

Average prices are forecast to continue rising in record territory, but the increase is likely to become slower, to 5.5 per cent nationwide.

“Slower job growth, not massive layoffs, are forecast for Canada in 2008,” Klump said.

What I’d like to know is which parts of canada will rise as forecast? Are there any overpriced Canadian markets that risk a drop in prices or will we see a steady rise across the board?

note: For a comprehensive look at why all might not go perfectly for the Vancouver market check out Mohicans Bubble Uberpost over at Financial Planning and Personal Sanity.

Wendy wrote in to let everyone know that there will be a feature on the crazy condo market playing on CBC television tonight at 7:30 pm.

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From the show blurb:

Wendy Mesley takes viewers inside the booming billion dollar condo market, and discovers that buying a new condominium can put consumers in a crunch with constricting contracts and murky marketing. With a helicopter hovering over construction cranes, to behind-the-scenes access at hyped sales events, Wendy takes potential buyers on an inside tour of potential condo pitfalls. “The Condo Crunch” airs Wednesday, Jan. 9 at 7:30 p.m. (8 p.m. NT) on CBC Television.

update: The show can be viewed online here.