Vancouver Condo Info » supply

428 new listings, 65 sold in one day

wreckonomics — Tue, 17 Jan 2012 08:01:19 +0000

According to Paulb Monday was our first day of over 400 new listings in 2012:

New Listings 428
Price Changes 64
Sold Listings 65

Know how many days in 2011 had more than 400 new listings? None.

And look what’s happening in Richmond courtesy of Inventory.

Richmond Jan 3-16
New Listings 534
Price Changes 77
Sold 86

Some interesting things happening in this market early on in the year. The worst january in the last 10 years was in 2009 which saw a 20% sales to list ratio (we usually see at least double that).

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Dramatic Numbers

Karl Marx Carney — Tue, 10 Jan 2012 05:39:16 +0000

Monday was a strange day for Real Estate in Vancouver. It’s normal this time of year for listing to outnumber buyers as people who haven’t managed to sell relist their property, but the ratios paulb just posted are mindboggling:

New Listings 376
Price Changes 56
Sold Listings 43

And as he also points out, the Westside is nuts:

New Listings 96
Price Changes 10
Sold Listings 5

Yes, that’s right. 96 new listings on the west side of Vancouver on one day and only 5 sales. Any idea whats going on here? Were there so many listings that all the sales didn’t get entered, or did we really just have crazy sales/ list ratio day?

And if your in the mood to contemplate dramatic numbers check these out, courtesy of McLovin:

Buddy got his assessment in Kelowna. He owns a 2 br condo with great view of the lake in the Skye building. Paid $660,000 presale in 2007 incl GST. Took possession in 2009.

2011 Assessment $631,000
2012 Assessment $541,000

Drop of 18% in 1 yr and over 20% from his presale purchase price in 2007.

Truthfully, if he had to sell the place he would be lucky to get $500,000. So he is down about 25% and there is no bottom in sight.

As Makaya points out:

to put things in perspective, assuming your buddy took possession exactly three years ago and sold it today for $500K, he has “lost” $4,444 on his house every month. I hope he’s making a good salary to compensate.

This post was submitted by Karl Marx Carney.

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Historical Sell List Ratios

TDK1138 — Wed, 04 Jan 2012 08:40:01 +0000

VHB has a post over at Housing Analysis looking at the last few years of sell / list ratios in Vancouver. He’s got two charts there, one based on daily data in the VCI forum and one going further back to 2001 based on REBGV data. Interesting to see the difference in years like 06, 08 and 2011.

This post was submitted by TDK1138.

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The month with no sales.

wreckonomics — Mon, 03 Oct 2011 18:15:03 +0000

Inventory says.. Not a single new home sold on the west side in September, first zero sale month going back to 1994. Here’s the historical data:

Vancouver West New Home Sales September
YEAR = SALES / LISTINGS
1994 = 15 / 79
1995 = 16 / 157
1996 = 9 / 173
1997 = 12 / 126
1998 = 4 / 90
1999 = 4 / 35
2000 = 6 / 30
2001 = 2 / 35
2002 = 4 / 25
2003 = 14 / 43
2004 = 8 / 48
2005 = 15 / 43
2006 = 5 / 43
2007 = 4 / 42
2008 = 4 / 93
2009 = 11 / 74
2010 = 9 / 61
2011 = 0 / 77

Even the minicrash of 2008 saw four sales of new homes on the west side. The worst September for new home sales was back in 2001.

VMD also notes Burnaby sales are not looking so hot:

[Confirmed: Burnaby Sept/11 SFH Sales Lowest in 5+ years. 60% of last year, 1/3 of 2009, lower than 2008 levels]
2011: 46 (I predicted 45 on post #2)
2010: 75
2009: 127
2008: 51
2007: 81

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Zero west side new home sales

The Pope — Mon, 26 Sep 2011 13:11:10 +0000

It hasn’t happened yet, but it’s possible that this could turn out to be the first month on record to ever have zero new home sales on the Vancouver west side. Check out the comment from inventory:

Worst New Home sales in September in Vancouver West?

Where are the buyers? Currently there are NO sales of “NEW” HST Homes. there are 71 units available. Five more days to go for a sale. There has never been a ZERO New home sale in Van West since 1994 (Records only go back to 1994).

Vancouver West
New home sales
Sept 2010 / 2011
Listed 61 / 71
Sales 9 / 0 ***As of Sept 25, 2011

Van West Sept new home sales:
2008 = 4
2009 = 11

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Compare and Despair

Eddie — Mon, 12 Sep 2011 07:49:01 +0000

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.

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The Fall

The Pope — Wed, 07 Sep 2011 07:32:20 +0000

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?

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Has inventory peaked?

The Pope — Thu, 11 Aug 2011 16:20:36 +0000

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?

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The City wants to drive down the price of your condo

The Pope — Tue, 26 Jul 2011 14:19:52 +0000

Got an investment condo or two? It might be a good time to sell because the City of Vancouver has just unveiled it’s plan to drive down property prices and rents.

In a plan that goes before council today, the city proposes to provide $42 million in land and capital grants over 10 years to create 38,000 new affordable homes, including 7,900 supportive and social-housing units, 11,000 market rental units and 20,000 new condo and “ownership” units by 2021.

Coun. Raymond Louie said in an interview that strategies may include:

• A “rent bank” where tenants facing eviction for not paying their rent can apply for either a loan or a grant, which is then paid directly to the landlord.

• Long-term leases, where the city maintains ownership of the land, which is leased at preferred rates for a defined term but is always owned by the city.

• Units that have fixed limits on the profits that homeowners can make when selling, which would end property speculation; any rise in property value beyond the set limit could be directed to the city for other social-housing projects.

• Limits to the profits that developers can make on the land speculation in projects; special consideration for a project’s approval may be based on the developer making a lower profit.

• Increasing co-op ownership and rentals, where a financial institution or the government makes the initial outlay of cash and is repaid over a long period of time.

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The “Running out of Land” Club

patriotz — Mon, 04 Jul 2011 08:01:34 +0000

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.

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Paul Is Back with the Data

The Pope — Tue, 21 Jun 2011 08:43:24 +0000

Realtors. Some of you love them, some of you hate them and some of you are them. But there’s one thing that it seems we can all agree on: We appreciate it when a realtor takes the time to share market data with us.

One Realtor that has consistently shared market data with Metro Vancouver residents is Paul Boenisch. Paul has been sharing daily sales and listing numbers with us for a while and is now establishing a market data section on his site along with a new partner.

At the moment their market trends section is in its beginning stages, but Paul has a well established history of reliably providing data and promises to continue posting daily numbers here as well.

For more Metro Vancouver market data you may want to also check out the Realtor sites of Agent Will and Larry. For the bigger picture there’s CUER/Sauder at UBC and for great analysis check out the Economic Analyst. Lauren and Paul will be posting local real estate market data here.

Do you have a favorite source of market data that isn’t listed here? Drop it in the comments below!

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UBC Hospice approved despite fear of ghosts

wreckonomics — Mon, 06 Jun 2011 08:15:45 +0000

The UBC hospice has been approved at it’s current location despite neighboring condo owners fear of ghosts driving down property values.

UBC’s board of governors has approved plans for the 15-bed Order of St. John facility, which some Chinese-born residents of a nearby condo tower say will bring bad luck to the community.

“I want to know where does humanity go for residents living in this building, when 80 per cent of them highly oppose the site — not oppose this idea, just oppose this site?” condo owner Jane Ni asked reporters at a press conference Friday.

She denied claims that neighbours’ opposition is based on superstition about ghosts.

“This is 5,000 years of culture and religion. We are not superstitious,” Ni said.

Some Chinese community leaders are offering their support to the hospice’s opponents, arguing that their concerns aren’t being taken seriously.

“You must consider whether proceeding under these circumstances is the best, or is there an alternative that can further lessen the negative human impact?” said David Choi, chairman of the National Congress of Chinese Canadians.

The university says that it understands the residents’ worries, but that the site is ideal for a hospice.

“A hospice is not to be put away in an institutional setting; it is meant to be in a community, because it’s very much a part of the life and death of a community. When people are at their end of lives, they should be close to their families,” said Stephen Owen, vice-president at UBC.

The school is planning to put up trees around the hospice as a screen and help neighbours who wish to move to new units on campus.

The full article is available at CTV. There are a few remarkable things about this story.

First, that two of the three people quoted appear to be realtors, yet the article doesn’t mention that fact.

Second, that they’ve decided to place the justification for this particular bit of nimbyism in purely racist terms.

Third, that if you’re looking to buy a condo at UBC the owners at Promontory have just said that their units are now worth a lot less than they used to be.

And regarding the David Choi comment “is there an alternative that can further lessen the negative human impact?”. This is an interesting question because the whole purpose of a hospice is to lessen the negative human impact when people are at their weakest. Perhaps a more important question is what values do we want to hold as a society? Which do we value more: human life and caring for the elderly and sick or property values?

I’m afraid that we already know the answer to that question for at least some people.

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Net International Migration Negative

jesse — Thu, 28 Apr 2011 16:42:16 +0000

Long-time reader/commenter painted turtle found this interesting tidbit on BC migration via greaterfool blog: By the Numbers: Quarterly International Migration

While the net loss of 727 people from BC to other countries in Q4 2010 is, in and of itself, a small number (see Figure 1), it is significant both in terms of its direction—being the first time that BC’s quarterly net international migration has been negative in Statistics Canada’s database, which dates back to 1972 and in its magnitude of change from previous quarters. While a seasonal pattern is evident in BC’s quarterly migration data, the decline in Q4 net international migration was much more pronounced in 2010 than in previous years, falling from a net inflow of 16,371 international migrants in Q3 2010 (the second‐highest on record in the past 38 years, after only Q3 2008), to a net outflow of 727 international migrants in Q4 2010.

Why the significant shift from historical trends? As it turns out, the answer lies not in a significant change in immigration or emigration levels, but in changes in the number of non‐permanent residents living in both Canada and in BC. For the most part, non- permanent residents are people residing in Canada who hold a work or study permit, and their dependants, as well as those holding Minister’s permits or claiming refugee status.

The paper argues that the numbers do not indicate a significant drop in international permanent migration levels — by all accounts Canada is accepting immigrants at a decent clip — but there was nonetheless a sudden shift away from non-permanent residents remaining in Canada past the end of 2010.

The significant outflow of non‐permanent residents nationally was also reflected in most provinces. Alberta saw the number of non‐permanent residents decline by 6,725, Saskatchewan by 414, Manitoba by 406, Ontario by 12,603, and Quebec by 5,900. The most notable changes were, however, in the west. In only two provinces (BC and Alberta) was immigration not significant enough to balance the outflow of non‐ permanent residents, thus resulting in declines in total net international migration of 727 in BC and 2,092 in Alberta

I don’t think there is much to read into this report yet — it is only one quarter — but for Q1 2011 and potentially beyond there will be that many more dwellings looking for inhabitants, and perhaps this indicates a push by the government to get permanent residents, who are in sum suffering from elevated unemployment levels, back to work.

© jesse for Vancouver Condo Info, 2011. | Permalink | 78 comments | Add to del.icio.us
Post tags: bc, immigration, migration

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Olympic Village buyers sue Vancouver City

rancid — Thu, 17 Mar 2011 05:29:08 +0000

There are now 62 buyers at the Vancouver Olympic village who are suing the city of Vancouver for what they claim is poor design and construction. This could be exactly why the City set up a shell corporation with no assets to sell these units after the developer went bankrupt. Remember that lawyers warning in the news a while back?

From the CBC:

A total of 62 owners involved in the lawsuit said their condos at the development — renamed The Village on False Creek — have a variety of complaints, including a lack of heat for four months. Others claim they can’t fit standard sized beds into their bedrooms or have leaky windows and ceilings.

And from CTV:

..He says that instead of the “extraordinary levels of luxury” promised in marketing for the Village, the owners discovered their suites aren’t much better than rental apartments.

In some cases, doors will slam into each other if they’re opened at the same time. In others, residents aren’t able to open their closet doors if anything larger than a double bed is placed in the master bedroom.

“Not being able to fit a queen-sized bed in a master bedroom is a major design flaw,” McMillan said.

Other residents have had problems with persistent leaky ceilings and faulty heating. A video released by the owners shows water dripping from light fixtures and smoke alarms.

“One guy’s had his entire ceiling ripped out because they can’t figure out why his heating system doesn’t work,” McMillan said.

Not much better than rental suites eh? Yeah I guess not. I made sure I could fit a king size bed in my master bedroom, and if my light fixtures started leaking or my heating system didn’t work I’d just up and move. It’s a good thing these people bought, since you can’t lose investing in real estate!

This post was submitted by rancid.

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Vancouver and the Supply Side Argument

jesse — Tue, 08 Mar 2011 09:00:57 +0000

Much has been made of the availability of credit promoting asset price bubbles. If the availability of credit is loose and an asset is seen as scarce, asset prices tend to rise. But what if there was an ability to quickly supply new product onto the market, such that an asset cannot be seen as scarce for long periods? This is the argument of Demographia and their annual house price survey. This survey is famous for marking Vancouver as one of the most unaffordable metropolitan markets in the English speaking world. The authors of the survey argue that while loose credit conditions lead to bubbles, the inability for a market to quickly react to changes in investor and owner demand can exacerbate bubbles:

Higher land prices have been the principal contributor to rapidly increasing housing prices in unaffordable markets. These land prices include the cost increasing influence of land supply restrictions (such as urban growth boundaries), excessive infrastructure fees and other overly strict land use regulations. In Australia, 95 percent of the increase in inflation adjusted new house (and land) costs were attributable to land, rather than construction from 1993 to 2006. In more restrictively regulated San Diego, house prices were 250 percent higher than in Dallas-Fort Worth in 2007, yet cost only 15 percent more to build.

It may be easy to quickly discount this report’s arguments as, of course, asset bubbles are not prone to form without the propagation of relaxed lending. Remove the loose lending, remove the bubbles. But I would argue it’s worth a deeper and critical look into what the authors are stating. Unconventional Economist A.K.A. Leith Van Olsen has written dozens of posts on a similar theme, that cities that experienced or are experiencing severe asset bubbles also have severe land use restrictions.

The posts are long and the comments are equally as interesting as the posts themselves. An important point in the debate is that Van Olsen and others are arguing about supply responsiveness, not total supply. Indeed we know that supply must at least equal demand, or rents would be increasing significantly. Van Olsen clarifies:

Readers should note that unresponsive housing supply is a different issue to the ‘undersupply’ of homes or ‘housing shortages’ commonly mentioned by mainstream commentators. The former relates to the speed and cost at which new (generally fringe) housing supply is built, whereas the latter refers to the physical quantity of homes available for the population.

In my view, Australia does not have a housing shortage. But housing supply is certainly unresponsive and overly expensive on the urban fringe of Australia’s cities and towns. As a result, the critical ‘inflation vent’ provided by cheap fringe housing in places like Texas and Atlanta (despite very high population growth) is missing from the Australian housing market. As such, there is no supply mechanism available to quickly dampen house price inflation before it turns into a speculative bubble (and later bust).

So, he argues, there is opportunity to maintain price stability by decreasing response time of new and desirable supply becoming available on the market. Faster response times can be accomplished by: reducing permit and planning application times, removing centrally planned blanket zoning restrictions (such as agricultural reserves), and providing more local authority and accountability on land use. Interestingly this approach has been used in bubble-averse Switzerland and Germany, as investigated in Bigger, Better, Faster, More: Why some countries plan better than others by Alan W. Evans & Dr Oliver Marc Hartwich, who, when comparing the plights of the British Isles and Australian housing markets to their European continental brethren, state:

In Ireland and Australia,with planning systems derived from the UK’s, restrictions on the supply of land, densification policies and central planning fail to provide the kind of homes people want, and lead to high real house price inflation. Successful planning systems, as found in Germany and Switzerland, leave planning decisions to local planners and politicians while ensuring that they face the full costs and benefits of their decisions.

Applications to Vancouver

There is some argument that the Vancouver area faces multiple Byzantine tiers of land use policies and restrictions, from the Agricultural Land Reserve, shared utility and resource planning at district and provincial levels, and municipal-level zoning change and permit application processes. While all serve a purpose, from time to time it may be instructive to take a step back and look at the successes and failures in other jurisdictions in avoiding destructive asset price bubbles.

A rational debate around the role of land use planning has been notably absent from BC’s mainstream media. It is unlikely any of us would live to see a significant overhaul of land use policies in the city and province, but studying land use policies and other supply side impedances (such as flexibility of labour markets) in other jurisdictions — and their purported catalytic effects on asset bubbles — does serve to provide some context to Vancouver’s prospects in the coming generations.

© jesse for Vancouver Condo Info, 2011. | Permalink | 243 comments | Add to del.icio.us
Post tags: australia, demographia, supply, vancouver

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OV Buyers sued for wanting out

The Pope — Tue, 22 Feb 2011 15:40:54 +0000

What weird times we live in.. As people lined up to buy Olympic Village suites at firesale prices others are being sued for not wanting to complete their pre-sales agreements. A few years ago the lawsuits against pre-sale buyers went not only for their deposits, but for the difference in sales price of the unit as well. Fortunately for OV presales buyers they only seem to be going after the deposits, which are generally less than $100k.

In one of the lawsuits just filed, Port Coquitlam resident Cordelia Lins and her husband had put down $50,090 in May of 2008 for a unit they originally agreed to buy for $500,900. Problems with records make it difficult to determine the assessed value. Ms. Lin said she couldn’t say anything about the lawsuit because she was “in negotiations.”
Vancouver resident Gee Lim, who paid the largest deposit for a unit he originally agreed to buy for $1.4-million, did not answer his phone. He originally agreed to buy his unit in April 2008. Last July, the province’s land-assessment authority valued that unit at only $1.172-million.
The third buyer, who also put down his deposit in April 2008, has no phone listing at the Richmond address provided in the suit. Tian Qi had agreed to pay $516,000 for his unit in the Kayak building that is now being marketed. It was assessed at $504,000 by B.C. Assessment Authority last July.

Please note these are different cases than the six buyers who sued over building deficiencies, most of those cases have been settled. Read the full article over at the Globe and Mail

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Creative Marketing on Private Sales?

YLTNboomerang — Mon, 14 Feb 2011 13:00:52 +0000

We’ve seen developers hiding price reductions in the form of tax and strata discounts on new developments but what about the private seller? Check out this new listing:

MLS: v868581

“BEST VALUE FOR $… DARE TO COMPARE! ” NO HST… Concrete Building, 2 levels, 3 bedrooms, 3 bathrooms, in addition to a family room. Living out of the box with plenty of private outdoor space on the 5th floor with exterior doors out to a garden and kid’s play area. Not to mention, swimming pool, media room, meeting room, 2 storage lockers, 1 parking, Pet Friendly, Rentals ok. The main entrance is well secured with card entry and concierge service. Shopping is only minutes away, with Starbucks T&T supermarket, Costco, Home Depot, McDonalds, and great transportation, the skytrain. BONUS: for a short LIMITED TIME OFFER, the seller will sweeten the deal with a $200 strata fee reduction for 5 whole years.

MLS History

First listed for $548,000 on June 9 2010 (v831995)
Price reduced to $527,500 on October 10 2010
De-listed December 22, 2010
Re-listed for $580,000 this week

So what do you think about this creative marketing? The price has increased $52,500 from where it didn’t sell last year but now you have a carrot of $200/month for 5 years (about $11K if you discount it @ 3%). Is there any benefit to the seller from a cash flow perspective? Surely the buyer would demand the $12K be held in escrow?

Personally, I like the graphic work indicating the townhouse location on the listing image:

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City Coming to Terms with Vancouver Secondary Suites

jesse — Tue, 01 Feb 2011 09:00:06 +0000

The report entitled THE ROLE OF SECONDARY SUITES: RENTAL HOUSING STRATEGY – STUDY 4 published by the City of Vancouver’s Community Services Group is about a year old but nonetheless contains some interesting data on the state of Vancouver’s secondary suite rental accommodations. Here are excerpts from the executive summary:

The market-rental housing stock is usually divided into two segments – the primary or conventional rental stock, consisting mainly of purpose-built rental apartments, and the secondary rental stock made up of rented houses, secondary suites, individually rented condo units, and units in multiple conversion dwellings and SROs. Over the last three decades, the secondary rental sector has played an increasingly important role in meeting rental housing demand. This increased role reflects the decline in the construction of new purpose-built rental and the redevelopment and conversion of the existing rental stock.

…

Using 2009 BCA data, this report estimates that there are at least 25,000 properties with secondary suites in the city’s single-family zoned areas. The proportion of properties with suites ranges from 6% in Oakridge to 59% in Grandview-Woodlands. On the west-side as a whole, less than one in five properties have suites; on the east-side, almost one in two properties have suites. Six local areas on the east side account for three quarters of the city’s single-family zoned secondary suite properties.

It’s a fascinating report, highlighting how the concept of secondary suites is starting to percolate more and more onto the west side of the city and into the hearts and minds of city planners who realize that the term “single family home” is becoming outdated. We can look at all RS-zoned properties with secondary suites. It looks like a Vision/NPA civic election voting map LOL.

A few key facts and insights I picked up in the report:

Data claim only 21% of homes built in the 1990s have secondary suites. (p13) Hogwash. There is something wrong with the data.
There is some natural resistance to secondary suites on the west side because homes are generally of older vintage. That is, it’s less desirable to tear down an older structure that has been well-maintained but not suitable for suiting.
The City is coming to terms with its dirty little secret: people are living in illegal basement suites and their permit officers purposefully turn a blind eye to properties with obvious basement suites installed but without the proper permits in place. According to the permit application data, about 20% detached properties are being fitted with legal suites, yet over 60% of new stock have basement suites. The City is well aware of this and looks poised to start the thin edge of the wedge into the dirty underbelly of the City’s basement suite accommodation.

“Council also approved a post-occupancy inspection program. Under the program, all new single-family houses are inspected a year after being approved for occupancy. Properties found with unauthorised suites are required to either apply for permits or to close the suites. Despite the changes, the proportion of single-family houses being built with approved suites has remained low.”

I commend the City of Vancouver for making this report public and shows, at least to me, they are aware of the problems illegal suites pose to the quality of life in the city, accelerated depreciation of neighbourhoods with slum housing, and (not least I’m sure) the chance for expanding their permit and inspection business unit!

Feel free to post your Vancouver secondary suite stories, good and bad, in the comments section: have you ever dealt with home inspectors overlooking secondary suites? What’s your most bizarre secondary suite experience, either as landlord, renter, or acquaintance?

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Help Wanted: Okanagan Real Estate Math Expert

Alpha_Bear — Wed, 12 Jan 2011 18:52:47 +0000

This is a follow up to an earlier posting about discrepencies in dollar sales figures released by the Okanagan Mainline Real Estate Board.

I’ve taken another look at the OMREB statistics, and have come across yet another anomaly. Their own numbers for the inventory of unsold single-family residential listings do not agree with one another. If you get the inventory from their monthly statistics releases, the number is different from their monthly statistics graph releases.

The numbers match up until July of this year, and then they diverge, with the monthly statistics numbers being reported as 5% to 8% lower than those in the statistics graphs reports. It sure looks like they were trying to make the inventory increase this summer appear less bad than it really was. You’ll notice that they did not include a number for December’s inventory in the just-released statistics graph report. (typical sloppiness!)

I have emailed OMREB previously regarding other discrepancies, and received a less than forthright answer. I’ve basically written them off as incompetent at best. I also have another graph showing the same problem in the Central Okanagan, if you’re interested.

This post was submitted by Alpha_Bear.

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Something fishy with Kelowna stats?

Alpha_Bear — Thu, 09 Dec 2010 09:57:46 +0000

In Kelowna and Vernon, this year’s real estate sales may be less rosy than we have been led to believe, according to the Okanagan Mainline Real Estate Board’s (OMREB) published statistics.

The OMREB statistics can be found on their website:
http://www.omreb.com/page.php?sectionID=2

In my review of the OMREB statistics, I came across several numbers that quite literally do not add up. These incorrect numbers were also repeated in their media releases.

I noticed that the YTD dollar sales figures in many categories do not match the sum of the monthly figures. In almost every case, I found a rather large discrepancy (as much as 11.23% in the case of Central Okanagan Townhouse sales). The YTD sales numbers give the impression that the sales this year (in dollars) are much better than the monthly sales numbers indicate. I noticed that almost every month this year had this problem, but that it did not occur in the 2009 statistics.

I’m sure that this discrepancy is just an error and that they’ll correct it immediately, so as to give an accurate picture of the market to those considering buying or selling a property. Because we’re nearing the end of the year, I would not be surprised if the incorrect November YTD sales figures are not exceeded by the real December YTD dollar sales figures.

I’m not sure how OMREB will be able to correct the numbers, short of re-calculating the YTD numbers for the entire year. As an alternative they could show December dollar sales as zero (or negative), to allow the numbers to match, but that might make the December month-over-month and year-over-year numbers look really bad, in addition to making the slump in sales compared to 2009 more obvious.

Providing the correct YTD dollars sales numbers is especially important in this declining market, because this year’s incorrect (inflated) YTD figures will make next years comparative sales look worse than they should.

The numbers that I am using can be found within the OMREB statistics. For example, on page 8 of the November 2010 Central Okanagan statistics report, the Residential Total Current YTD sales are shown as $1,315,905,989, yet the sum of all the monthly totals from their 2010 reports add up to $1,244,919,850.00, which is a difference of $70,986,139.00, or 5.70%.

In the Central Okanagan, the discrepancies are:
Grand Total Current YTD Sales
- Published number is 5.48% above the calculated number
Residential Total Current YTD Sales
- Published number is 5.70% above the calculated number
Residential Current YTD Sales
- Published number is 5.61% above the calculated number
Apartment Current YTD Sales
- Published number is 4.01% above the calculated number
Townhouse Current YTD Sales
- Published number is 11.23% above the calculated number

In the North Okanagan the discrepancies are:
Residential Total Current YTD Sales
- Published number is 7.82% above the calculated number
Residential Current YTD Sales
- Published number is 8.33% above the calculated number
Apartment Current YTD Sales
- Published number is 5.50% above the calculated number
Townhouse Current YTD Sales
- Published number is 5.94% above the calculated number

I considered that there may be some collapsed sales, waterfront property, late reported sales, changes in sale price, etc, which may have influenced the monthly numbers, so I compared the 2010 figures with the 2009 figures, using the same methodology, and found that there is not the same consistent level of error that I find within the 2010 YTD numbers. In fact, I did not find any error in the 2009 YTD numbers, other than a few small math errors, which did not affect the YTD numbers vs. the sum of the monthly numbers.

In many cases, I noticed a consistent upward bias to the published YTD numbers throughout the year. For example, in the North Okanagan, published Residential Sales numbers YTD compared to the sum of the monthly numbers are:

January – 0.00% higher
February – 4.66% higher
March – 7.47% higher
April – 6.94% higher
May – 8.49% higher
June – 9.56% higher
July – 8.81% higher
August – 8.18% higher
September – 7.56% higher
October – 8.55% higher
November – 8.33% higher

Perhaps the published monthly numbers are lower than they should be. (I cannot see why they would be in a declining market; I suspect that the OMREB would want the numbers to be as rosy as possible). Another possibility is that there has been a change in the YTD calculations since 2009. Yet another possibility is that there is some recent systematic bias that makes the YTD numbers appear larger than they should be.

I’m curious as to how the OMREB intends to resolve this. At the moment I’m not sure which of their published numbers I should trust.

This post was submitted by Alpha_Bear.

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Leave the wheeling and dealing to Trump.

The Pope — Tue, 23 Nov 2010 09:28:42 +0000

There’s another editorial in the Vancouver Sun about the Olympic Village fiasco.

Although there is a consensus that the Olympic Village is a state-of-the-art project, market conditions for high-end real estate have softened, and there isn’t the level of demand that we saw in the boom period of pre-2008.

As a result, only 35 per cent of the units have been sold to date, leaving 480 units unsold.

Moreover, half of the unsold units are priced above $1 million.

While the project proponent had proposed dropping prices to sell the remaining units, the city opposed the proposal because it would mean that the developer wouldn’t be able to pay the full amount owed to the city.

Can the city move these units and prevent Vancouver taxpayers from getting screwed? Perhaps one selling point to consider for those interested in buying one of these million dollar condos: they are conveniently located within walking distance of ‘cash corner‘ AND Vancouver’s 24 hour open air drug market.

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Province rejects OV social housing bids

The Ant — Thu, 30 Sep 2010 06:17:39 +0000

There seems to be no end to problems at the Olympic Village. You’d think there would be lots of demand for luxury affordable housing and having it sitting empty is a bit of an embarrassment:

The province has rejected the only three bids that came in from operators willing to run Vancouver’s much-debated social housing at the Olympic village.

That leaves the city scrambling for a new solution to fill the 252 units in those three buildings, meant to be the city’s legacy from the Olympic Games. They have been sitting empty for six months, after a lengthy negotiation process between the city and province on how to structure the bid process for non-profit operators.

The operators were supposed to provide $48-million in lease money up front, which the city is anxious to get as a down payment for the $110-million buildings – all part of a project that is financially stressed in every direction.

Full article in theGlobe and Mail

This post was submitted by The Ant.

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Vancouver Olympic Village loss scenarios

The Pope — Mon, 27 Sep 2010 08:56:16 +0000

We’ve seen a lot in the news lately about potential losses at the Millennium Water Olympic Village and what it means for Vancouver city taxpayers. The developer still owes the city $731 million which would be ok if they could unload the units for the ‘hot market’ dream of $950 per square foot. Unfortunately all the potential buyers appear to have noticed that the Vancouver real estate market is in a bit of a slump.

Local developers are urging the city not to undercut the market for their product, but it’s not exactly a secret that they’re going to be dropping the price on these units in an effort to get rid of them. The loss to taxpayers has been estimated anywhere from ‘tens’ to ‘hundreds’ of millions of dollars.

Curious how different sales scenarios would play out?

Well you’re in luck! Jesse has put together a spread sheet showing loss levels based on different sales prices. He expands on this in the following comment:

Based on my calculations at $800psf which is pie-in-the-sky, the City’s shortfall will be close to $275MM if they can unload the units within about a year. This includes debt servicing for the past year plus the next year.

If they can find a sucker to take these units on in a bulk purchase for $700psf, they will have lost about $330MM. If they find a reasonable investor to buy them at $450psf, they’re out $450MM. Good luck finding someone willing to buy these bulk at $700psf.

Based on my analysis, if the CoV can’t find a bulk purchaser, the BEST they can do now is slash prices hard, to maybe $600-700psf and clear them out, including the rentals and commercial space, in a massive orgy of post-Olympic speculative feeding through Rennie et al. They will have losses of $350MM cast in but they save $100-150MM compared to what they would have to face if they held onto them and the balance of the debt for another few years.

I don’t know how the City is coming up with its numbers but I think they need a little one-on-one time with Bob Rennie so he can slap them in the face with a giant reality fish.

So rip off the bandaid or drip drip drip, which option do you foresee the city taking?

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New housing and the HST

The Pope — Wed, 15 Sep 2010 08:01:32 +0000

Whether due to high prices or HST, the sales numbers for new houses and condominiums in Vancouver has taken a tumble. Volume of new units sold is near record lows in the last month, but what does the news about next years BC HST referendum mean for our housing market?

This is happening at a time when house prices are starting to fall all across the province. Will we see buyers sitting on the sidelines and delaying the purchase of a new condo, house or townhome in the hopes of saving money on HST?

This could be one more small element that contributes to a collapsing housing bubble. Will it help to tip our market further over the edge or is there another rabbit in the hat? Negative interest rates? Home-buyer credit? Tax deductions? High paying government jobs for everyone? What could support the current high cost of housing in Vancouver?

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Vancouvers Olympic Ghost Town

The Pope — Wed, 08 Sep 2010 08:37:02 +0000

Our vacant Olympic Village is in the news again and the headlines are growing more negative: Vancouver taxpayers of hook for $1 billion as most Olympic Village units unsold.

Sixty-six per cent of Vancouver’s pricey Olympic Village condos remain unsold — a total of 483 units at the massive False Creek development that served as athletes’ housing during the two-week 2010 Games.

Vancouver Mayor Gregor Robertson, whose city remains on the hook for more than $1.03 billion of the cost of the project, predicts it will take a “full two-year term” to sell the remaining units.

“There is some concern we’re going into another [economic] dip,” Robertson said last week. “[But] I have full confidence in the developer and the marketing taking place.

“I hope the market kicks in and they get sold. I’d like to see it fill up sooner rather than later.”

A spokeswoman for condo king Bob Rennie, who is handling the sales, said Tuesday a major marketing campaign will begin later this month for the unsold units.

“Incentives are yet to be determined, but they could include things like free washers and dryers,” she told The Province.

That’s like getting two square feet for absolutely free! .. and every square foot counts when you’ve got kitchen counters like this.

Meanwhile, lawyer Bryan Baynham said she has 11 clients who want to get deposits back on 13 suites in the village.

Have you tried offering them more washers and dryers?

Vancouver Coun. Geoff Meggs said the city is trying its best to maximize the return on taxpayers’ massive pre-Olympics bailout of the project.

“It’s too early to say how we’ve succeeded, and a lot depends on the pace of sales,” he said. “It shouldn’t come as a shock to anybody that the risk remains.

“I have no doubt that, down the road, this will be seen as a successful project — but we’re in strange economic times.”

Fear not! We have FREE WASHERS AND DRYERS!!

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