Vancouver Condo Info

The Vancouver Sun has some good tips for people who are completely unable to save up for the largest purchase of their life.  People who either spend too much on entertainment and shopping or simply don’t earn enough to save.  Buy a house.

Yes. Because the people that should be buying real estate are people who are unable to save up a few thousand dollars.

Their advice ranges from the ridiculous (reign in spending habits) to the sublime (ask mommy and daddy for a down payment).

Saving money for a down payment, especially in British Columbia’s high-priced housing markets, is one of the biggest challenges that homeowners face, but mortgage experts say, it’s not impossible.

The minimum down payment new homeowners need is five per cent of a home’s purchase price, which can be particularly difficult to accumulate for those in the most need: young people, often with student debt and lifestyles that involve a lot of restaurant meals and going to movies once or twice a week.

Yeah, that’s 5 percent goal is super-tough, but it just might be achievable according to ‘mortgage experts’.  You can always tap into your RRSPs, and don’t forget that you can get yourself a zero-down loan (we call them ‘cash-back’ mortgages).

…some lenders have a cashback option that can be used against a down payment. “The clients have to take posted rates [not discounted] and some lenders will give you five per cent of the mortgage amount as cash back. On $400,000 that would be $20,000, the five-per-cent down payment that is required.”

This post was submitted by Thereyugo.

The official REBGV housing market stats are now out. I’ll link to the version on the Paulb facebook page since he’s been so consistent with providing us the daily stats.

Get the REBGV full stats release here.

The funny thing about stats is that you can take the same data and spin it either way. GVREB has been doing a bang-up job of posting end of the month news releases in the style of the REBGV, but with a reverse spin. These use factual numbers and quotes, but come across quite different in tone from the official news releases. Here’s an archive thread at Vancouverpeak.com with the most recent one.

Get the GVREB news release here.

And some of you pointed out a few surprising stats. It looks like the most desirable areas are showing the most weakness right now.

VMD pointed out the following:

Disaster zones:
- despite Greater Vancouver area having a 12.9% increase in sales in Mar/12 vs Feb/12, the following areas showed Declines in sales MoM.

1. Richmond SFH – down 60% YoY
Y/M Sales %change
12/3 104 n/a
12/2 119 -13%
11/3 262 -60%
2. Van West SFH – down 46% YoY
Y/M Sales %change
12/3 152 n/a
12/2 177 -14%
11/3 279 -46%
3. Burnaby SFH – down 40% YoY
Y/M Sales %change
12/3 95 n/a
12/2 105 -10%
11/3 160 -40%

And Best Place on Meth pointed out the median prices have taken a month over month dive in those areas:

Median detached prices in the 3 bubbliest areas took a hit last month.

Van West: -$245,000 (-10.7%)
Richman: -$72,000 (-7.1%)
West Van: -$70,000 (-3.6%)

Honourable mention to Burnaby: -$27,000 (-3.0%)

Looks like a HAMPLOSION.

Spring is normally when the market swings into gear and sales and prices start to rise. Have these hot areas burnt themselves out?

This post was submitted by wreckonomics.

The telephone company is building a condo tower and they’ve sold out their pre-sales units.

“It’s all geographic who’s doing well.”

Recent figures from the Real Estate Board of Greater Vancouver compiled by various real-estate analysts indicate higher numbers for unsold inventory than past years at the same time.

Local sellers all say that it’s not foreign investors driving the market for the successful projects, but local investors and people planning to live in the condos themselves.

Ms. Goertz said Telus offered its employees priority in sales at Telus Gardens and 150 of them bought, even though the price discount was a modest one per cent.

BLISTINGAGENT had an interesting point in the previous thread: A couple of years ago when the market took a dive a lot of presales buyers tried to walk away from their contracts and developers sued them for the difference between their deposit and the current value of the condos. What happens if the market takes another dive and Telus employees try to walk away from their presales? Dock their pay?

This post was submitted by The Ant.

The Pique has an article about some remarkable goings-ons just a little ways north.  Some hotel condo units in Whistler are now selling for half their peak price.

Those who own a condo unit in a Whistler hotel are sitting on great potential, but at the moment the units are not showing great value.

Real estate consultant Denise Brown with Re/Max Sea to Sky Real Estate reported that a unit originally sold in the Four Seasons Whistler for about $1.1 million was recently resold for only $520,000.

The so-called Phase 2 units in Whistler have fallen victim to the globally depressed financial situation, said Brown.

“We’ve seen the prices come down significantly,” she said.

According to Brown, this segment of the real estate business is at the bottom of the cycle so prices are good right now. She said the people who are happiest in the condo hotel market are those who are in for the long-term and have made a lifestyle choice in purchasing a condo unit in a hotel.

Lifestyle.  Got it?  Lifestyle, Lifestyle, Lifestyle.  Just repeat the mantra and you’ll be fine.

Then there’s this gem:

Kelly said this segment of the real estate industry has improved in the last six months but people aren’t willing to spend as much in Whistler as they were a decade ago.

“It’s not anything wrong with Whistler or that Whistler is worth less,” said Kelly. “It is just that people are prepared to spend less.”

It’s not that Whistler is worth less than it has ever been worth, it’s that some people paid more than it was worth.

Hey! A opening day presales condo in Vancouver SOLD OUT!

Marine Gateway, and the 415 pre-sale units that sold, is big news because at a time when listings are soaring and sales have been falling off a cliff, the pre-sales at this development have bucked the negative trend.

In fact it has completely turned that trend on it’s head.

Hmmm.

Let’s put that into perspective.

A sell-out of pre-sale condo unit offerings hasn’t happened in Vancouver in over six years.  As Global TV noted in this story, you have to go back to the Woodward’s presale in 2006 – before the collapse of the world financial markets – to match an opening day pre-sale sellout of a condo development.

Either the market is on the upswing again or Rennie is back with his marketing magic…  Although he does seem to have lost the ‘be bold or move to the suburbs’ thing.

Check out Whispers from the Edge of the Rainforest for an examination of this sell-out.

Real professional posted an updated housing sentiment indicator over at Vancouverpeak.com

This is an excerpt from the housing bubble chart book produced by Pacifica Partners.

Jesse pointed out this article bloomberg: Asian Buyers Buoy New Home Demand in California’s Orange County.  It turns out we’re not the only place that get’s the hype about suitcases of cash:

“You know why Orange County is doing better?” said Wang, a native of Taiwan who splits her time between Shenzhen in southern China, where she oversees a toy-manufacturing business, and Irvine, California, where she raised her three children. “It’s because all my neighbors are from China and Taiwan, and they all bought their homes in cash.”

And you know what ‘doing better’ means?  It means house prices dropping by ‘only’ 39%.

Demand has kept property values from declining as much in Orange County as in other regions. The median home price was $392,000 in January, down 39 percent from the June 2007 peak. That’s less than the 49 percent decline across Southern California and the 51 percent slump nationwide, DataQuick said.

Pretty good news eh?

The CBC has an article looking at the situation for middle-class home shoppers in Vancouver BC.  They’ve noticed that incomes have dropped since the 70s while prices have risen.

So if you’re middle class in Vancouver you’re either priced out forever or something is going to change.

From that article:

Lawyer Nathan Hume and health researcher Angie Chan live with their two young children in a rented two-bedroom apartment in Vancouver.

With two good jobs, they had hoped home ownership in the city would be within their reach. But sky-high prices in Vancouver have left them without any options.

“We have a number of friends who are in the same situation as us — highly educated, they’ve got good jobs, they have young kids, and they’ve all left the city,” said Chan.

Hume says it is likely they could get a mortgage to buy something, but they don’t think that’s smart, when it would mean foregoing savings for retirement and their childrens’ education.

The Vancouver real estate bubble is getting attention from outside Canada again.  This time Mish is in Business Insider comparing current prices in massively overpriced Vancouver to what the same price gets you in post-bubble Ireland.  The difference is rather large.

There are some pretty nice houses you can get in Vancouver for only $890k!  Two of them are even potentially liveable and one has even had some upgrades.

The post-celtic-tiger property is pretty decent as well, and a fair sized discount from the original asking price of $6 million.

Now clearly what happened in countries like Ireland was that people who should not have been were extended credit.  Lots of credit.  And since property prices were rising they were viewed as ‘can’t lose’, until they lost.

Have we made credit too easy in Canada, or are we more sensible than that?

UPDATE: reader Anonymouse pointed out that Mish comparing a hotel to a single family home is not a fair comparison. In response Many Franks posted this link about home prices in Donegal from last September:

The average price of a new home in Donegal is estimated at €179,000, representing a drop of 43pc from peak values. New three- and four-bedroom semi-detached houses are cheaper than in most other parts of the country, with averages estimated at €128,800 and €155,000 respectively.

Second-hand homes are estimated to average €165,800, down 3pc from last April and a drop of 41pc from peak values. The cheapest second-hand apartments in the country can be found in Donegal, with the average price of a one-bedroom apartment estimated at €50,000, and €57,500 for a two-bedroom apartment.

City by city data for US markets is just out showing how much prices fell in the year and how far they’ve come down since the market top.  Here’s what last year looked like in some major US markets:

South of the border: city -by-city breakdown of latest Case-shiller data

Las Vegas: Prices down 8.8%, and 61% below peak.
Los Angeles: Prices down 5.2%, and 41% below peak.
Miami: Prices down 3.8%, and 51% below peak.
New York: Prices down 2.9%, and 24% below peak.
Phoenix: Prices down 1.2%, and 55% below peak.
Portland: Prices down 4%, and 29% below peak.
San Francisco: Prices down 5.4%, and 41% below peak.
Seattle: Prices down 5.6%, and 32% below peak.

Remember, it’s not a bubble, it’s a balloon.  Balloons don’t pop, they deflate.  Slowly over the course of many years.

Hat tip to VMD for the link.