Vancouver Condo Info

The Real Estate Board of Greater Vancouver (REBGV) released its stats package for February and, as expected, it showed significant price and sales strength in February. Press package can be found here, also redistributed here.

The recent market strength has caught even some Realtors like AgentWill and YatterMatters by surprise.

Long-time real estate blogger (and owner) mohican makes note of a so-called “bifurcation” of the provincial market, noting flat to lower prices in the Fraser Valley, Chilliwack, Okanagan, Northern Interior, etc. Househuntvictoria describes Victoria’s February market as “frothy”, though prices in the region are down from their mid-2010 peak.

As for Vancouver (REBGV, which includes Sunshine Coast and Sea to Ski corridor), the following information is noted:

• Vancouver West and Richmond, as reported as it happened by various online and mainstream media sources, showed significant sales and price strength.
• Detached increased in price faster than attached/condo
• Most areas, save Whistler and a few low-volume areas prone to more month-to-month variance, showed sales increases over February 2010

It helps to remember that real people are buying properties — in Vancouver in February in near-record numbers at record prices — and it’s worth asking exactly who is buying, why now, and how. Fish10 recently opined on a few ideas including the usual suspects: rich foreigners, black market activity, commodities, and an increase of investment scams perpetrated by locals. Here is a subset of some rationales for the market’s strength:

Foreign income. Simply this is the “Hot Asian Money” AKA “HAM” conjecture, that significant amounts of foreign capital are entering the province and causing ripples of cash to propagate in the local economy. (Remember all areas in the suburbs of Vancouver have shown price strength, not just areas with large immigrant activity, though this effect seems to diminish with distance from the city centre.) It need not necessarily take significant foreign income to drive prices higher, merely the belief there is foreign income to drive prices higher. Given the time to complete transactions and given those I know of personally involved in purchasing property in the current market, it’s not all foreigners buying.

Small uptick in mortgage rates. 3 month lockdown of low rates is soon coming to an end. A 0.5% increase in rates is about a 7% increase in monthly payments at current 5 year fixed rates of around 4%.

March 18th 35 year amortization CMHC mortgage insurance moratorium. If enough buyers are highly leveraged (greater than 5:1), the desire to get into a 35 year amortization term may be bringing forward some sales. The maths indicate a change from 35 to 30 years amortization is about a 7% increase in monthly payments. (February detached benchmark price was only up about 3.5% month-over-month…)

Pricedoutitis. If properties in desirable locales are truly “detached” from incomes, it may simply be another round of buying now before being forced to look in significantly less desirable areas. This may go to explain the urgency with which certain properties and neighbourhoods are moving, while others (even certain props embedded in the “hot” areas) linger.

Raw speculation. This can be construed as a symptom for local economic weakness: nobody has anything better to do but flip real estate. Turnover of certain properties seems short and the margins high, though it may just be these types of transactions are more a meme in the media, not that they are occurring with greater frequency. Builders may also be at play more recently than before. See “foreign income” as a reason why.

There are lots of other reasons of course, including simple banal randomness. In the end, does it really matter? The excuses given for market strengths and weaknesses are often symptoms rather than root causes. Nobody likes to hear they’re dumb. Just kidding. You’re not dumb.

Who wants free money?

..or a free barstool?

Ok.. so it’s credit actually and not entirely free – but it’s still a very good deal.  We’ve been approached by CSNstores.com to give away a $75 gift code to use on any of their sites, including allmodern.com, cookware.com and everygameroom.com.  Go ahead, treat yourself to a foosball table or an acid green bear lamp.

So how do you get the credit?  Well we’re a random meritocracy sort of site, so here’s how it will work.  Any registered member that submits a story within the next two weeks (or already has a published story) is entered to win the credit.  We’ll take the total number of submissions and put them into the random number picker over at random.org to select the winner.  The $75 gift code will then be emailed to the address associated with the winning members account and you can do whatever you want with it*.

Just a few simple rules: Add your article submissions at http://vancouvercondo.info/submit.  you can submit as much as you want, but each submission must be original content.  If you link to a current news story you must present your own opinion or analysis on it at the very least.  Copy and paste content will not be accepted.  Content must be submitted before midnight November 30th, but may not be published until after that date.

We’ve had a good run of community submitted comment lately and would love to see this continue.  Thanks all!

*What you do in the privacy of your own home is up to you.  Promo Codes can cover domestic shipping costs within the US, but there are some International Shipping taxes and duties that it will be unable to cover, but hey.. $75 bucks.

Metro Vancouver bureaucrat Don Littleford has put together a web site seeking personal stories and anecdotes about a perceived ‘Vancouver rental crisis’. The site is at http://RentersSpeakUp.org and is now starting to collect feedback. Their estimates are that there are 80,000 families here who spend more than 30 percent of their income on rent, and 30,000 households who spend more than 50 percent of their income on rent.

Vancouver falls behind most other Canadian cities when it comes to wages, so it’s not a surprise that financial pressure is put on many household even with our relatively low rents compared to sales price. Here’s a news story about the site with more information, and here’s the site itself if you feel like commenting on the rental situation in Vancouver.

A week ago we had a community driven interview of Petr and Ola, creators of the instant classic Vancouver Real Estate quiz “Crackshack or Mansion?”.  You asked your questions and voted up the comments you wanted to hear answers to.  Well we’ve sent the highest rated questions on to Petr and Ola and here are their answers:

How long have they lived in Vancouver?
PETR: I have lived here since 2002 and Ola has lived here since she was about 10 years old.

Do they rent or own? (wouldn’t want to presume even the obvious!)
PETR: haha. We rent.
OLA: …one of these “special” 1950’s bungalows.

If they rent, have they been tempted to buy?
PETR: Ola had considered buying a place with her friend in about 2007. I thought the bubble was pretty much at its peak back then and strongly encouraged her to wait. A lot of her friends were getting into the housing market (or thinking about it) and I think the mob mentality almost got the best of her. It didn’t take long to convince it’s a crazy idea (to buy with a friend, and at these prices).
OLA: I shudder when I think about it now. Even if prices kept going up and interest rates stayed low, it’s insane to tie yourself down with other people like that.

Have they considered leaving Vancouver because of RE prices?
PETR: Even though we are convinced this is a bubble that will have a severe correction, the prices will probably still be too high for us. I wouldn’t pay 200,000 for most of those million dollar mansions. The city is nice but it has a lot of competition for the pretty city of the month award. The bubble will pop everywhere so the interior of BC will look pretty good.
OLA: I must admit, owning my dream home has been a fantasy since I was 8. However, my dreams are extensive and require many acres and handcrafted woodwork. It would be a trophy for career success. It would be a frivolous indulgence when I have excess cash flow. Enslaving myself to a peach-coloured 80’s built condo isn’t really a replacement for that.

(more…)

Here’s the challenge: Can you tell the difference between a crack shack and a million dollar Vancouver mansion? PetrP created a website quiz where you can test your real estate acumen at crackshackormansion.com.  Being a consumate proffesional I only missed one.  Can you beat my score cold?

Give it a shot.

You know how when company is coming you shove everything into closets and close the door, pretending that the mess doesn’t exist?  Well some busybodies have been opening up our closed doors instead of just enjoying the fruit punch:

VANCOUVER, British Columbia – Five blocks away from the venue for Vancouver’s Olympic opening ceremonies, four grizzled addicts huddle in the rain, injecting themselves with heroin behind a trash bin.

Welcome to Downtown Eastside. Here, life is gritty, volatile and the slightest misstep can invite brutal retaliation.

“It’s a jungle,” said Glen, a 49-year-old heroin addict who goes by the street name Trouble. “You want to get out of here.”

That’s from an article over at MSNBC, and it doesn’t really improve after that:

As Vancouver prepares for the Olympics and the descent of the world’s media, the Downtown Eastside remains a huge problem — 15 square blocks of despair, squalid rooming houses and alleys populated by thousands of addicts, the homeless, the mentally ill and the drug dealers who prey on them.

This neighborhood is the most concentrated drug and poverty ghetto in North America, with high use of heroin, cocaine and methamphetamine, according to criminologist Benedikt Fischer of Simon Fraser University. It’s also the only place in North America where drug addicts can shoot heroin into their veins at an officially sanctioned injection site.

Now why would a US news outlet want to make our city look bad?  I have a theory.  MSNBC is a joint venture between Microsoft and NBC.  I suspect that Bill Gates is jealous of our property values, particularly since the Seattle market has dropped so much, and he’s pulling some strings to make us look bad.  Everyone who lives here knows you don’t go down to Main and Hastings unless you want to score some junk or catch a hot new disease, so what’s the big deal?

Well that theory explains the yanks anyways, but what’s with the British?  They’re taking their potshots too, and we’re supposed to be on the same side!  We’re part of the commonwealth!  We’ve got the queen on our currency!

Conservative estimates now speculate that the games will cost upwards of $6bn, with little chance of a return. This titanic act of fiscal malfeasance includes a security force that was originally budgeted at $175m, but has since inflated to $900m. With more than 15,000 members, it’s the largest military presence seen in western Canada since the end of the second world war, an appropriate measure only if one imagines al-Qaida are set to descend from the slopes on C2-strapped snowboards. With a police officer on every corner and military helicopters buzzing overhead, Vancouver looks more like post-war Berlin than an Olympic wonderland.

That’s from the Guardian article Vancouver’s Olympics are heading for disaster.  You know what I think?  I think everybody is just jealous.

Thanks to G and jjss for the links!

The Vancouver Real Estate Anecdote Archive (VREAA) has been doing a great job of collecting anecdotes from the great Vancouver housing bubble for a while now, and many reader here will be familiar with that site.  VREAA is now running a series called Froogle Scott that follows along the experience of one local homebuyer who bought early in the run-up.

September 2003
My wife and I, first time buyers, purchase a 1940s stucco bungalow in the Grandview area of East Vancouver for the asking price of $355,000. This is about a year and a half into the current eight-year real estate boom/bubble. The lot size is 33 x 117, just slightly smaller than standard. The MLS listing gives the square footage of the house as 1860, which later turns out to be a 20% exaggeration. The house is only about 1550 square feet, split over two levels — the main floor, and a two-bedroom, ground-level rental suite. The rental suite is tenanted — a quiet single mum with stable employment and her teenaged son, who look at us with a certain amount of trepidation when we first tour the house. They needn’t worry. We’re happy to inherit good tenants, and do not increase their rent ($560 a month, plus 40% of the utilities) for the year and a half that they continue to live in the suite.
……. We avoid a bidding war because of the listing agent’s greed. She wants to sell the house to her own clients and pocket both ends of the commission (“double-ending”). So she doesn’t have an open house. And the home owners perhaps aren’t savvy enough to demand that she have one.

Read the whole first installment at the VREAA site.

There’s a strange thing happening in the Vancouver real estate market right now. Even as some rush to buy while interest rates are at rock bottom, others are trying to figure out how to get out of a presales purchase agreement they may have rushed into.

At least one local law firm is marketing themselves as condo presales litigation specialists.  Harper Grey represents clients that are being sued or fear being sued by a developer. From their site:

Harper Grey LLP represents individuals and groups of pre-sale purchasers who signed contracts for major lower mainland condo projects including:

33 Pender – Vancouver
Aria 2 – Port Moody
Aura Townhomes – Surrey
Axis – Burnaby
Cosmo – Vancouver
Donovan – Vancouver
Espana – Vancouver
Esprit 2 – Burnaby
Fairmont Pacific Rim – Vancouver
First on First – Vancouver
Fitzsimmons Walk – Whistler
Ginger – Vancouver
H & H – Vancouver
INvue – Kelowna
Mariner – Vancouver
Millennium Waters – Vancouver
Patina – Vancouver
Quattro – Surrey
Silhouette – Burnaby
Sophia – Vancouver
Tangiers Townhouses – Revelstoke
The Breeze at Airdrie – Calgary
The Exchange – Vancouver
Three Harbour Green – Vancouver
TV Towers – Vancouver
Watermark – South Surrey
Watermark Beach Resort – Osoyoos
Westwood Village Edgemont – Coquitlam
Whitetale Lane – Coquitlam
Woodwards District – Vancouver

That’s quite the list.  It’s fascinating that even with the recent rebound in the market developers are still finding it easier to sue pre-sales buyers rather than release the unit back to the market to find a new buyer.  Do we have more inventory that buyers out there?  I’m guessing no one told those rushing to buy that homes are a place to live first, a source of wealth second.

Thanks to Stanislav and Arit for pointing out the links.

This is off topic, but I’d be interested if other bloggers have been getting these odd spam messages. For the last couple of months I’ve been receiving questions like the following:

Do you pay property tax on condo california?
Before I go ahead, is there any pointers you might have?
Any help would be appreciated.  Thank you so much.  Thanks,
Tony

These questions almost make sense, but they seem to be auto-generated based on the blog topic. I’ve gotten several similar messages from the following addresses, always signed with a different name than the return address:

teronspoons@gmail.com
mike.power200@gmail.com
winstonfinancial@gmail.com
andri.manager@gmail.com
petrov.gazprom@gmail.com
iris.accountants@gmail.com

Now normally spam is trying to get you to buy something or visit a website. The odd thing about these is they seem to just want answers to questions. What could be the motivation for this?

My theory is that they’re looking for unique content from bloggers to put on a website. Scrapers generally just steal material from existing websites and republish it, but search engines will penalize duplicate content. This would be a way for them to harvest unique content that hasn’t been published before, so it wouldn’t suffer the same search penalty. If that is what they’re up to its kind of clever actually – get people that are interested in a topic to answer general questions about it.

One way to check this theory is to reply to them with with somewhat reasonable nonsense, and then do a web search on your reply a month or so later to see if it shows up online.

The following question made such little sense, I couldn’t help but reply with a helpful answer:

How much cost water for a condo in canada?
Your insight into what would be the best way to proceed would be much appreciated.
Any help appreciated.  Thank you in advance.  yours truly, Tim

Hi Tim,

Condos with running water are the latest trend in Canada and have recently grown in popularity.  Water can increase the value of a condo tremendously.  In the Major cities (Vancouver, Montreal, Moosejaw) running water is highly prized and can lead to bidding wars on a property, even when mixed with a small amount of urine.  If both hot and cold running water are available in a residence (particularly if delivered via pipes), the sky’s the limit.  Expect to pay at least $140,000 pgm (Per Gallon Per Minute).

Thanks for writing, I hope this helps!
-T

Regular readers will recognize the name Paul Boenisch as the North Vancouver realtor who provided daily market stats on his blog.  As many of you know, Paul and his family moved to to the other coast recently, and he now has a new blog focusing on the Prince Edward Island real estate market.

It’s an interesting contrast to our market- check out the average sales price chart he’s posted that covers the last four years.  They started 2006 with an average residential sales price of $120k, and peaked just above $160k.