Archive for the ‘prices’ Category

Foreign buyers in the USA

Wednesday, August 13th, 2014

Move over China, Canada has become the top foreign investor in US real estate.

A report from commercial brokerage Marcus & Millichap, as reported by the Tampa Bay Times, found that, “an influx of cash-laden foreign investors, especially from Canada and South America, are targeting assets in Tampa Bay for lower entry costs and higher initial yields.”

It’s all pointing to signs of limitless, massive growth opportunity.

While opportunities across the United States are, in fact, limitless for Canadian investors, the key to investing well is to identify hot spots others have not identified. Take Phoenix, Arizona, for example, where Talia Jevan Properties Inc.’s High Income Real Estate has been aggressively buying property.

“Phoenix became one of the most battered real estate regions in the country,” noted Harmel Rayat. “Nowadays, the region just finished securing $430 million in deals in 2013 alone thanks to higher occupancy rates, falling unemployment, and opportunities for strong population growth.”

Read the full article here.

Americans moving for affordable housing

Monday, August 4th, 2014

The fastest growing cities in America are now the ones where housing is more affordable than average.

This is a change from the early part of the millennium where credit was easy and mortgages were easy to get.

Rising rents and the difficulty of securing a mortgage on the coasts have proved a boon to inland cities that offer the middle class a firmer footing and an easier life. In the eternal competition among urban centers, the shift has produced some new winners.

Oklahoma City, for example, has outpaced most other cities in growth since 2011, becoming the 12th-fastest-growing city last year. It has also won over a coveted demographic, young adults age 25 to 34, going from a net loss of millennials to a net gain. Other affordable cities that have jumped in the growth rankings include several in Texas, including El Paso and San Antonio, as well as Columbus, Ohio, and Little Rock, Ark.

Newcomers in Oklahoma City have traded traffic jams and preschool waiting lists for master suites the size of their old apartments. The sons of Lorin Olson, a stem cell biologist who moved here from New York’s Upper East Side, now ride bikes in their suburban neighborhood and go home to a four-bedroom house. Hector Lopez, a caricature artist, lives in a loft apartment here for less than he paid to stay in a garage near Los Angeles. Tony Trammell, one of a group of about a dozen friends to make the move from San Diego, paid $260,000 for his 3,300-square-foot home in a nearby suburb.

Read the full article in the NY Times.

If you’ve tried to hire someone from outside Vancouver for a position here, you may be aware of the challenge presented by expensive housing.

Who wants a housing market crash?

Monday, July 14th, 2014

You might want a housing market crash (or ‘correction’ if the word ‘crash’ is too strong), but that’s likely because you want to buy a house.

It’s not hard to believe that the majority of Canadians don’t long for a housing market correction, especially those who own property.

It feels good when your equity rises right? What’s not to like?

The Financial Post looks at these feelings, and whether they are sensible or not.

They split home-owers into three categories: First time buyers, young owners with growing families and older owners thinking about downsizing.

They say the first two groups would actually benefit from a crash.

If you’re wondering why most homeowners should be begging for a housing market crash read the article here and let us know if you agree with their reasoning.

 

Could we get some big companies here?

Wednesday, June 25th, 2014

This is an interesting post over at medium- basically positing that high home prices in Vancouver threaten it’s future, and proposing a tax to try to change that risk:

The secret that no-one actually wants to talk about is that the quality of a city is mostly determined by a simple factor — the number of smart, ambitious people who live there. These people are the ones who want to drive that city forward by investing in opening businesses, donating their time to the arts & community, participating in city planning, etc… Without them, growth wouldn’t happen and you wouldn’t get all of the benefits that great cities enjoy.

The biggest contributor to the decline of a great city is simple — it’s the decline of those smart people. When they decide that the cost of living in a place outweighs the benefit, they move. They don’t just take their money with them, they take their intellectual and future capital with them. This is dangerous. When people aren’t willing to make an investment in a place to live any more, the city doesn’t just lose their taxes for the year, they lose a massive function of potential jobs created, culture added and future capital they can put to work.

There are two issues here: the generation of local business opportunity and an attempt to draw established business head offices to town.

What do you think of a proposal for a housing tax that attempts to encourage economic development?

A future based on past results

Thursday, June 5th, 2014

Here’s an extrapolation for you: Altus group does home appraisal and valuations.

They looked at the numbers and say if everything carries on as usual the average home price on the west side will be 7 million in 10 years.

“If [the current] trend continues, in the year 2024 the average price for older [detached housing] stock could be greater than $2 million on the Eastside and $7 million on the Westside of Vancouver. We are not saying this will happen, we are simply applying the math from the past decade and extrapolating forward to the next decade,” said Pedro Tavares, Altus Group’s director of research, valuation and advisory.

And as any investor will tell you, past performance practically guarantees future results right? So what are you waiting for? Get out there and buy something!

Vancouver no longer on planet earth?

Wednesday, May 21st, 2014

The Condo King has emerged from hibernation and seen no shadow: that means two more years of bubble.

“We no longer live in Vancouver. We live on the planet.”

With that remark, renowned Vancouver realtor Bob Rennie attempted to explain the evolution of this city’s exasperating housing market.

He made the comment last week to a conference of the Urban Land Institute, an organization representing realtors and developers who intimately understand what the condo guru was referring to.

Full article in the Vancouver Sun.

High prices: sign of a sick or healthy market?

Wednesday, May 7th, 2014

When you own something you might be delighted to hear that the price is rising.

Even if you don’t sell it to cash in, there’s a certain amount of psychological comfort to be found in owning something ‘valuable’.

So it’s not remarkable that many people are delighted by the rising cost of real estate in Canada.

But is this just the economic equivalent of a sugar high?  If all homes are rising in price you don’t really benefit from selling unless you leave the market or downsize to where the percentages are smaller.

Jonathan Miller, a US real estate appraiser posted an article comparing the US and Canadian markets.

He makes the point that sharply rising prices in US markets didn’t work out to be indicative of a markets health, rather they led to the inevitable hangover when the party was over.

Is it different here?

Hot at the edges

Monday, May 5th, 2014

Just in time for the spring buying season the Province newspaper has published a public service announcement about the hottest lower mainland markets.

What do the experts say are the hottest markets in BC?

1. Surrey
2.Maple Ridge / Pitt Meadows
3.Fort St. John
4.Dawson Creek

Surrey seems to do quite well with REIN – they took the number one investment spot in the province last year and also in 2012, 2011, and 2010.

Have you bought your surrey home yet?

CMHC: One home is enough?

Monday, April 28th, 2014

The CMHC has just ‘tightened’ their mortgage regulations again.

You might not have know that the CMHC would provide mortgage insurance on second homes, but they won’t anymore:

Canada Mortgage and Housing Corp. is cutting the types of mortgage insurance it offers, meaning the era of tighter rules for home buyers hasn’t come to an end.

The Crown corporation said late Friday it will stop insuring mortgages on second homes, effective May 30. Anyone who has an insured mortgage will no longer be able to act as a co-borrower on another mortgage that CMHC insures. In addition, it will stop offering mortgage insurance to self-employed people who don’t have standard documents to prove their income.

Gotta love that first sentence: The era of tighter rules hasn’t come to an end?  I guess by tighter rules they mean doing away with the most absurdist bubble policies in the form of zero down 40 year mortgages.

What’s next? Banks not being able to offload risk for mortgage lending?

Here’s the amazing bit for those just tuning in:

The Crown corporation has been offering insurance on second homes since 2005. It has been offering insurance to self-employed people without strong income validation since 2007.

Remember NINJA loans in the states?  Good thing we never had those here!

How badly would a correction hurt you?

Wednesday, April 23rd, 2014

The Globe and Mail now has a housing price correction calculator so you can see what kind of effects a rise or drop in the market would have on your home:

Much larger price declines happened long enough ago that the most recent crop of buyers may not have any recollection of them. In Calgary, troubles in the oil patch caused a house price decline from $107,739 on average in 1981 to $80,462 in 1985, or about 25 per cent. After a few years of rampant speculation in Toronto, the average resale home price fell from $254,197 in 1989 to $195,311 in 1995, or 23 per cent. Vancouver, always a volatile market, plunged more than 25 per cent in a year in the early 1980s and has a couple of times fallen more than 6 per cent in a year.

Want to see what a 25-per-cent decline would look like in today’s market? Our Correction Calculator shows you the numbers for the Canadian market as a whole, as well as the Big Three markets of Vancouver, Calgary and Toronto.

Here’s the original article and here’s the calculator.

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