Years of spending more than they earn have left a record number of Americans like Ms. McLeod standing at the financial precipice. They have amassed a mountain of debt that grows ever bigger because of high interest rates and fees.

While the circumstances surrounding these downfalls vary, one element is identical: the lucrative lending practices of America’s merchants of debt have led millions of Americans — young and old, native and immigrant, affluent and poor — to the brink. More and more, Americans can identify with miners of old: in debt to the company store with little chance of paying up.

It is not just individuals but the entire economy that is now suffering. Practices that produced record profits for many banks have shaken the nation’s financial system to its foundation. As a growing number of Americans default, banks are recording hundreds of billions in losses, devastating their shareholders.

There’s a meme in the local media that Canadians are more financially conservative than Americans, and while that may certainly be true I wonder about Vancouverites specifically - With our negative savings rate, relatively low incomes and high housing costs are the residents of this city really that different from some of the more extreme US cases?

© The Pope for Vancouver Condo Info, 2008. | Permalink | 125 comments |

- Canada in a recession?
- Brace for inflation
- The stink of corruption?
- Job Market better than it appears
- Dropping house prices increase inflation?
- Vancouver homeless rights complaint
- You’re richer than you think.
- BC: Number 1 in property crime
- Flaherty: No housing bubble in Canada
- Bay Area prices drop 27% in one year
- Pitfalls of a cheaper US market
- US Rate hike debated
- Merrill Lynch: 1 year, $19.2 billion lost

So what are you seeing out there? Post your news, links and anecdotes here and have an excellent weekend!

note: any conversation on real estate or economics is allowed, please keep it civilized. When posting articles please only quote pertinent points and link to the original instead of pasting the entire article here. Pasting a link will automatically create a clickable hot-link. Thanks!

© The Pope for Vancouver Condo Info, 2008. | Permalink | 113 comments |

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.

Note: There is a poll embedded within this post, please visit the site to participate in this post’s poll.

© The Pope for Vancouver Condo Info, 2008. | Permalink | 91 comments |

Canadian home prices fell in June for the first time since January, 1999, as the number of houses for sale remained at record levels.

The average price of an existing home fell 0.4 per cent in June to $341,096, compared with $342,615 the year before, according to statistics released Tuesday by the Canadian Real Estate Association (CREA).

“The fall in home prices…is a sizable dip in this indicator, given that not too long ago the Canadian housing market was witnessing double-digit price gains,” Millan Mulraine, economic strategist at TD Securities Inc., said in a research note.

Of the 25 major markets included in the statistics, average home prices declined on a year-over-year basis in Calgary, Edmonton, Victoria and Windsor-Essex. The largest decline of 2.6 per cent was in Edmonton, while the smallest was in Windsor-Essex at 0.5 per cent.

Last month, BMO Nesbitt Burns Inc. economist Douglas Porter raised the possibility of an overall drop in home prices in Canada. Most industry watchers have stayed with the view that home prices will rise slightly this year.

In June, Mr. Porter said it was “unnerving” to note that Canada’s housing market performance appears to be tracking that of the U.S. but with a two-year lag, although he also sees a number of differences between the two markets.

He said he was tracking prices in the “middle ground,” cities such as Toronto, Montreal and Ottawa, which still have fairly robust economic fundamentals but haven’t been supercharged by the commodities boom.

Prices in those cities all rose moderately year-over-year in June, up 3.7 per cent in Toronto, 4 per cent in Montreal and 6.8 per cent in Ottawa.

The Canadian and U.S. markets are still very different, CREA president Calvin Lindberg said in a statement. U.S. home prices dropped by 14.1 per cent in the first quarter of the year, according to the benchmark Case-Shiller national home price index.

Out local market stands out as the biggest year-over-year decrease in sales in all the Nation, Greater Vancouver saw sales drop 42.9% from last June.

Note: There is a poll embedded within this post, please visit the site to participate in this post’s poll.

© The Pope for Vancouver Condo Info, 2008. | Permalink | 104 comments |

So what are you seeing out there? Post your thoughts, news links and anecdotes here and have an excellent weekend!

note: any conversation on real estate or economics is allowed, please keep it civilized. When posting articles please only quote pertinent points and link to the original instead of pasting the entire article here. Pasting a link will automatically create a clickable hot-link. Thanks!

© The Pope for Vancouver Condo Info, 2008. | Permalink | 106 comments |

The federal government will no longer guarantee 40-year or zero-down mortgages in an effort to avoid a housing crisis like the sub-prime mortgage meltdown experienced in the United States.

In an announcement released today, the government said government-backed mortgages would require a minimum down payment of five per cent and a maximum amortization period of 35 years. The borrower would have to have a consistent minimum credit score and there would be new loan documentation standards.

“Today’s announcement marks a responsible and measured approach by the Government to ensure Canada’s housing market remains strong and to reduce the risk of a U.S.-style housing bubble developing in Canada,” a release issued by the federal Department of Finance said.

The new rules will take effect Oct. 15, 2008 to allow existing mortgage pre-approvals to be used or expire.

So get out there and get your 40 year zero down mortgage while you can, these things are destined to become collectors items! My guess is we’re about to find out how thin of a speculative margin has been driving the Vancouver real estate boom.

© The Pope for Vancouver Condo Info, 2008. | Permalink | 91 comments |

Governor’s Tower at 388 Drake St has required replacement of all windows, exterior walls and bricks which has cost owners at least $100k per unit:

The cost of repairs to the tower was estimated at $29 million, and each of the 237 condo owners had to fork over at least $118,000, with the cost depending on the size of their apartments, Fox said.

Governor’s Tower was built 14 years ago and the 10-year warranty had expired.

The Parkview Tower at 289 Drake street is the other Concord Pacific tower reported with this issue:

All the windows on the 14-year-old tower were replaced because they leaked, said Alan Cadwell, whose Langley-based company, The Condo Advocate, repaired Parkview Tower.

Cadwell’s company specializes in restoration management for leaky condos in B.C.

“With one good push, the window wall system, in theory, could be kicked out and could be travelling to the floor,” Cadwell said of the condition of the windows.

The cost of the repairs for Parkview Tower amounted to more than $8 million, he said.

Thanks to LaLaLand and Bizznitch for the story tip and link.

UPDATE: In a bit of synchronicity the Vancouver Sun has this article in todays paper: Leaky condo crisis far from over.

By 2012, when the leaky condo era enters its fourth decade, as many as one-third of the defective units will remain unrepaired, said the report, prepared for the province’s Homeowner Protection Office (HPO) by private consultants.

At least 45 per cent and possibly as many as 68 per cent of leaky buildings have not been repaired yet, according to various scenarios explored by the consultants.

…

The consultants made no attempt to estimate the total cost of the damage, but concluded that early estimates of the repair cost per unit - $10,000 to $15,000 - were way low.

“Based on the HPO experience, it would appear that the actual average repair costs are approximately five times or six times higher,” they said.

By last September, repair loans the HPO makes to leaky condo owners had grown to an average of $62,000 for wood-frame apartments, and $72,000 for those in concrete buildings.

© The Pope for Vancouver Condo Info, 2008. | Permalink | 71 comments |

With the Bank of Canada joining other world banks now expressing concern over inflation the assumption is that mortgage rates will be going up. If you currently have a variable rate mortgage is now a good time to lock in? Rob Carrick at the Globe and Mail says no -although locking in now would get you a pretty good deal, rates would have to rise by at least 1% to make a five year locked in mortgage a better choice.

If you prefer the security of a locked in rate your choices as a Canadian are limited. Unlike mortgages in the US where you can lock in a rate for the entire term of the loan, in Canada the longest lock-in I’ve seen is for 10 years. My own gut feeling is that with a small enough premium the full-term US style lock-in would be the best deal - five years might see you renewing at much higher rates. The problem is that nobody can predict how far or how fast rates will move, and if they start to move quickly the best time to be locked in will have already past.

Even if you’re not a homeowner these expected rate changes will affect on you, either with higher rates on consumer debt, changing bond and equity prices in your portfolio or just higher rates paid to you on high interest savings account. So what do you think - am I being to gloomy in my expectation of higher rates?

© The Pope for Vancouver Condo Info, 2008. | Permalink | 25 comments |

Consumer confidence in B.C. plunged to its lowest level in five years last month as high energy prices and economic concerns test people’s resolve, the Conference Board of Canada reported Monday.

The board said B.C. consumer confidence fell 9.3 points in June to 94.3 - dropping below 100 for the first time since mid-2003.

The consumer confidence rating across Canada dropped 6.2 points in June to 79.6, following a seven-point drop in May, leaving the second quarter reading at its lowest level since the fourth quarter of 1995 when it was 68.8.

There’s been a lot of buzz in the news about inflation and recession worries lately - could this drop in consumer confidence be blamed on the media?

© The Pope for Vancouver Condo Info, 2008. | Permalink | 39 comments |

- June 2008: Vancouver house prices drop slightly.
- Real estate inventory continues to grow
- Screen Actors Guild strike threat looms.
- Kevin Falcon cares about your convenience
- Victoria: love the weather, not the street people
- Americans move to Canada (less than vice-versa)
- Canadians work more for less
- Canadians no longer spending like ‘drunken sailors‘
- Loonie predicted to drop
- Canada from a Hawaiian perspective
- Will gas prices kill the suburbs?

So what are you seeing out there? Post your news, links and anecdotes here and have an excellent weekend!

note: any conversation on real estate or economics is allowed, please keep it civilized. when posting articles please only quote pertinent points and link to the original instead of pasting the entire article here. Pasting a link will automatically create a clickable hot-link. Thanks!

© The Pope for Vancouver Condo Info, 2008. | Permalink | 167 comments |

The credit crunch hit the high street with a vengeance yesterday as shock figures from Marks & Spencer wiped £4 billion off the value of Britain’s leading retailers.

The grim news from Middle Britain’s favourite store marked a new phase in the economic downturn and threatens the high street with its worst slowdown in 20 years. Adding to the gloom, one of the country’s biggest housebuilders revealed that it was teetering on the brink of collapse. Taylor Wimpey’s value more than halved after it failed to secure rescue funding and said it would cut 900 jobs.

As the global economy is faced with more challenges can BC stay unaffected?

On a side note it’s interesting to see how competition from other locales is showing up in our housing market.  I’ve noticed recently that the ‘for sale’ section of craigslist has been listing a number of properties in Arizona, Florida, California & Ontario.

-thanks to JB for the Times story link.

© The Pope for Vancouver Condo Info, 2008. | Permalink | 30 comments |

If you haven’t seen these numbers yet, or if you have any doubt that the Lower Mainland real estate market is undergoing a dramatic shift, check them out now.  Supply continues to grow while sales keep dropping.

Here are a few highlights:

Sales down 41% from June 2007
Inventory up 53% from last year
North Vancouver inventory up 113%

Check out Paul’s blog for all these stats and more graphed out for some dramatic visuals.

So far prices haven’t been impacted much at all, but increasing supply and decreasing demand will put pressure there unless this dramatic shift reverses soon.  Could we be in danger of tracking the US market?

© The Pope for Vancouver Condo Info, 2008. | Permalink | 81 comments |

-National housing boom has come to an end
-Rental restrictions dampen market
-Speculator tax a bad idea?
-No easy fix for affordable housing
-Investing for stagflation
-Oil above $140 a barrel
-How will gas prices affect real estate?
-Selling in a changing market: be patient
-Downtown is the place to be!
-BOC Speech on real estate & monetary policy
-Rising rates could slow US recovery

So what are you seeing out there? Post you news links, anecdotes and thoughts here and have an excellent weekend!

note: any conversation on real estate or economics is allowed, please keep it civilized. when posting articles please only quote pertinent points and link to the original instead of pasting the entire article here. Thanks!

© The Pope for Vancouver Condo Info, 2008. | Permalink | 167 comments |

It’s all part of an elaborate scheme that has surfaced recently in B.C. in which con artists are attempting to sell homes without the owner’s knowledge, leaving the homeowner off the title but with hundreds of thousands in new mortgage debt against the property.

In the latest variation of the scheme in B.C., a would-be seller contacts a notary or lawyer to carry out the sale of a home.

A buyer, who is thought to be in on the deal, applies for a mortgage on the property and if the transfer is successfully carried out, the mortgage funds are paid to the seller. The buyer and seller disappear and so does the money, often leaving the homeowner to discover the ruse only when the bank notices the mortgage payments aren’t being made and comes looking for its money.

While such fraud is not new, title insurance company First Canadian Title said B.C. has seen a jump in suspicious cases this year. And a B.C. Supreme Court decision this month ruled that while a true owner could regain title to a property if it was fraudulently transferred, mortgages taken out on the property — even if fraudulently obtained — still stand.

Unfortunately the only way to discover that you are a victim of this sort of fraud is by checking records with the title office, which has set off this recent flood of calls:

“A lot of people have been wanting information, and the calls are backed up for at least a day,” Ian Smith, director of land titles for British Columbia and registrar in the Land Title and Survey Authority’s New Westminster land title office, said Wednesday. “We had 180 I believe yesterday, and that was just in the New Westminster office.”

Meanwhile, the authority launched an appeal to a recent B.C. Supreme Court decision that ruled that while a title that had been fraudulently transferred should be restored to the rightful owner, a mortgage then taken out against the property would stand. The ruling suggested that the owner of the property could seek compensation from the land title assurance fund.

If you are concerned about this sort of fraud and own your home outright there is a way to protect yourself:

Homeowners who are worried, though, can request a duplicate certificate of indefeasible title, which can only be issued for titles that have no financial charges against them, useful perhaps since the con artists target homes that are mortgage free. New Westminster real estate lawyer Alex Sweezey said strata owners also are not a target because on a condominium sale lawyers also have to deal with the strata management company.

The cost of the duplicate title is $50, but once it has been issued nothing can be registered against the title until it is surrendered to the land title authority. Smith said homeowners can get a form to request the duplicate from the land title office or from most lawyers or notaries. However, if it goes missing, replacing it can be costly and time-consuming, involving affidavits and other requirements.

© The Pope for Vancouver Condo Info, 2008. | Permalink | 23 comments |

As one of the country’s largest housing booms loses steam, most economists are forecasting a small increase in prices this year that will keep pace with the central bank’s 2-per-cent target for inflation.

In similar news Federal Reserve Chairman Ben Bernanke is predicting a soft landing for the US market as well:

“Our assessment at this point … is that this looks to be a very orderly and moderate kind of cooling,” Bernanke said.

Though it is a minor concern, both the Bank of Canada and the Fed see potential problems when it comes to new mortgage products:

Despite her fairly positive outlook, Ms. Kennedy cautioned that Canada can’t afford to become complacent about the real estate market, noting it took a decade for prices and sales to rebound after the bust of the late 1980s.

To that end, the central bank is keeping an eye on “challenges,” including ensuring that mortgage innovations, including 40-year amortization products and “near-prime” mortgages, don’t detract from prudent lending practices.

While Bernanke had this to say on the topic:

On the issue of risky home mortgages, Bernanke pointed out that the Fed has issued some guidance for lenders and he underscored the importance of borrowers making sure they understand how interest-only and other non-traditional mortgages work.

“We’re not saying you shouldn’t make these loans. What we’re saying is that they be done the right way,” Bernanke told the banking conference.

Wait a minute.. I just noticed that US article is a bit out of date - it’s actually from 2006, sorry about that. Here’s a more recent article on the US market:

Home prices in 20 U.S. metropolitan areas fell in April by the most on record, signaling the housing recession is far from over, a private survey showed today.

The Case-Shiller home-price index dropped 15.3 percent from a year earlier, less than forecast, after a 14.3 percent decline in March. The gauge has fallen every month since January 2007. The group began keeping year-over-year records in 2001.

Mortgage defaults and foreclosures are adding to the glut of properties on the market, while stricter loan rules are making it more difficult for prospective buyers to get financing. The prolonged real-estate slump, along with higher fuel prices and a shrinking job market, is taking a toll on consumers and the economy.

Thank goodness it’s different here eh?

© The Pope for Vancouver Condo Info, 2008. | Permalink | 137 comments |

The Victoria area blog isn’t yet showing drops anywhere near as dramatic as the US based blogs are tracking but it will be interesting to see where this goes as the market changes.  On the Sacramento blog the first listing is a house bought in March 2007 for $1,308,000, currently sitting on the market with an asking price of $600k.

© The Pope for Vancouver Condo Info, 2008. | Permalink | 68 comments |

-BC housing market ‘on pause‘
-Gas and food costs blamed for RE slowdown
-Assignment deals ‘still available‘
-Realtor fired for false statements
-Shaky markets make retirees nervous
-US trouble rains on our parade
-Hundreds indicted in US mortgage fraud
-UK house prices will fall by 30%
-Really, really, really easy credit
-Condo bust draws scams and squatters
-Brace for global stock and credit crash
-Write downs may reach $1.3 trillion

So what are you seeing out there? Post your news, links and anecdotes here and have a great weekend!

© The Pope for Vancouver Condo Info, 2008. | Permalink | 196 comments |

Statistics Canada said gas prices rose 15 per cent in May from a year earlier, up from a year-on-year pace of 11.6 per cent in April. Excluding gasoline prices, the 12-month growth in the CPI in May was 1.6 per cent, it said.

Meanwhile core inflation, which excludes volatile energy and food prices and which the central bank monitors for underlying price pressures, rose 1.5 per cent in May from the same month last year - the same pace as the 12-month increase in April.

“Lower prices for passenger vehicles dampened the upward pressure on the core index,” the agency said.

Last week, the Bank of Canada surprised markets by not cutting its key interest rate and expressing concern over growing inflationary pressures. The key rate remains at three per cent.

Thursday’s CPI number surpassed the central bank’s two per cent target.

Most economists had expected May’s inflation rates would be around 1.9 per cent.

We could always deal with inflationary concerns the way Argentina does - They’ve managed to maintain a remarkable 0.6% official inflation rate in May thanks to the innovative way they calculate the figure:

According to the new methodology, every time a product’s price rises too sharply, it will simply be removed from the index on the ground that consumers will be deterred by the expense and switch to other goods.

© The Pope for Vancouver Condo Info, 2008. | Permalink | 37 comments |

Robertson justifies the need for this tax by referring to the BC Hydro grow-op study that found 18,000 vacant condos in Vancouver, which is equal to half the total number of condos in the Downtown Westend. This number is said not to include units that are part-time occupied as second homes or vacation properties, only units that use no electricity through the year.

The obvious difficulty comes in defining the criteria by which condos would be taxed at the business rate. Taxes on speculation are often based on ‘flipping’ rather than holding an empty condo. How do you determine if a condo truly is empty? Would there be penalties for ‘faking’ occupancy? What are your thoughts on this proposal, would it help or hurt the Vancouver housing market?

© The Pope for Vancouver Condo Info, 2008. | Permalink | 124 comments |

A rash of recent reports paint a scary picture of Canadians as spending like drunken sailors, leading to the prickly question of whether we should be forced to save money.

A Statistics Canada study showed Canadians are finding themselves with two mortgages and deeper in debt than at any time in their lives. They are increasingly house poor, and with housing values sliding, they often owe more on their properties than they’re worth.

…

The StatsCan study came out at the same time that the Office of the Superintendent of Bankruptcy Canada reported that personal bankruptcies reached their highest level in more than four years during April, up 19.3 per cent over the previous month and 18.3 per cent over the previous April.

And things will only get worse if recent numbers showing a gross domestic product decline during the last quarter continue, signalling an economic downturn, and if unemployment rates should start to rise.

As it is, mortgage payments make up 37 per cent of average household spending in 2007, up from 32 per cent a year earlier.

And those mortgages are getting more ‘interesting’.  The common refrain that the Canadian housing market is not as vulnerable to downturn as the US market  because we don’t have ’sub-prime’ mortgages is only part-true.  What we do have is an mortgage insurance market that was liberalized in 2006 and has dramatically changed the landscape in the last few years with the introduction of zero-down, 40 year terms and adjustable ‘teaser’ rate mortgages:

With interest rates dropping, consumers might consider a front-loaded variable- rate mortgage.  This option gives you a larger-than-normal discount from the prime interest rate for an initial period, say six months, before you decide whether to lock into a fixed rate.

Longer amortization periods, now up to 40 years, also are new.  Holt estimates longer-term mortgages now account for three quarters of monthly insured purchase applications in Canada, with 40-year products accounting for half of that.

So will following the US lead into the area of ‘exotic’ mortgages lead to a similar result?  Only time will tell, but it is interesting to see that this topic seems to be getting more attention within the government.  That first article had this bit of info that was new to me:

Finance Minister Jim Flaherty recently suggested it might be wise to outlaw 40-year mortgages.

With up to a third of new mortgage applications opting for the longest term, removing that option could have a dramatic impact on our housing market at a time when it appears to be already slowing due to affordability concerns.

© The Pope for Vancouver Condo Info, 2008. | Permalink | 111 comments |

- Vancouver prices stagnating or dropping?
- Planners want offices downtown
- Council Passes EcoDensity™ ©harter
- Oil makes everything more expensive
- Mortgage rates going up
- Sad outlook for forestry
- Difficult days ahead for Canadian banks
- Canada urged to save for a rainy day
- Bay st. surprised about inflation?
- Still paying more than Americans
- US lenders slash prices to dump foreclosures
- Britain enters nightmare of negative equity

So what are you seeing out there? Post your news, links and thoughts here and have an excellent weekend!

© The Pope for Vancouver Condo Info, 2008. | Permalink | 332 comments |

“The demand for waterfront recreational properties remains strong, but prices have stabilized,” Re/Max regional executive vice-president Elton Ash said in an interview. “That’s good news for consumers because there are fewer multiple offers driving prices higher.”

As well, Ash said, the availability of bargain real estate properties in the U.S. has clearly reduced the number of buyers looking at Canadian recreational properties.

“We see U.S. owners of Canadian properties putting them up for sale now so they can take their profits and reinvest them in the U.S sun belt,” Ash said.

…

While the price of a three-bedroom winterized home on ocean frontage on Saltspring Island starts at about $1.3 million, there are more affordable properties for sale throughout B.C.

The report said the South Okanagan market has moved into “clear buyer territory” for the first time in five years, with rising inventories, falling sales and price corrections underway.

The price of a two-bedroom condo on the water near Penticton now starts at about $400,000, with some developers paying the GST and providing complete appliance packages.

The report noted the North Okanagan recreational property market has also reached a plateau, but affordability remains an issue with a typical three-bedroom winterized home on a 66-foot Okanagan Lake lot starting at $1.5 million.

Does less competition and low interest rates make this the perfect buying opportunity or are ‘price corrections’ due to take a further chunk out of the recreational real estate market?

© The Pope for Vancouver Condo Info, 2008. | Permalink | 31 comments |

A former bankrupt, Hauff made his first stab at developing the 35-acre residential project on Bullock Lake near Ganges in 1996. To fund the development, he borrowed millions of dollars from Multimetro Mortgage Corp. at up to 20 per cent per annum.

Multimetro, run by Vancouver businessman Ken Megale, raised most of the money from mom-and-pop investors. He promised them extremely high rates of return and assured them it was a safe, fully secured investment.

In fact, the project was mismanaged from start to finish, and ended in foreclosure. Multimetro lenders, who were owed $11 million including accrued interest, lost everything.

… but dreams die hard, so Hauff bought the property back out of foreclosure for $9 million and started all over, this time with money from Calgary based Gibraltar Mortage Corp at a 24% per annum rate.

Like Multimetro, Gibraltar raised the money from many small investors, promising them high returns on a supposedly fully secured basis.

Alas, under Hauff’s stewardship, the project once again stalled. In February 2007, Gibraltar called its loans and David Bowra was appointed receiver.

Subsequently, the resort lodge and spa burned down. The insurer has agreed to pay $7.4 million compensation. The property, as is, is estimated to be worth another $18 million to $20 million. So in total, creditors might realize anywhere from $25 million to $28 million.

Meanwhile, there is about $36 million worth of debt on the property, most of it owed to Gibraltar investors. Interest is accruing at the rate of about $600,000 per month. There are also property taxes and professional fees to be paid. So even on a best-case scenario, creditors are going to take a serious hit.

Read the full article here.

© The Pope for Vancouver Condo Info, 2008. | Permalink | 40 comments |

Kap Hiroti, who tracks Lower Mainland foreclosures at ForeclosureList.ca, says foreclosures stand at 20 per week, up from 10 per week in 2006.

“For one reason or another, they didn’t pay the mortgage, or insurance, or property tax,” says Hiroti, who advises real estate owners looking to foreclose or prospective buyers looking to buy a foreclosed property. “Or they get behind in their strata or condo fees, or face a one-time cost such as a roof or a leaky condo, which might set them back 40, 50 or 60 thousand dollars.”

…

Hiroti believes the Lower Mainland real-estate market has “flatlined,” meaning investors who were counting on making a profit no longer see an upside.

As a result, some have chosen to lose their investments through foreclosure rather than hanging on with no sign of a significant upside return.

“They were kind of speculating that the market would go up, but when the market flatlines, some people just choose to get out. Local people are getting priced out of the market.”

At the same time BCs unemployment rate has been creeping up - the jobless rate is now at 4.5% as positions are lost in trade, transportation and agriculture. The unemployment rate is particularly high for young people at 8.8% and for recent immigrants with an unemployment rate of 9.8%.

The bright point in the jobs data remains construction which has been the key driver in the BC jobs market for the last 5 years. The question is: how long can you have a jobs market driven by construction?

© The Pope for Vancouver Condo Info, 2008. | Permalink | 119 comments |

-BC: highest proportion of income on housing
-For Sale: $1,600,000 or best offer
-Lower mainland cities like to spend
-Real estate market returning to ‘normal levels‘
-Boomers own and owe more than ever before
-Sales sign super-stack challenge
-Mohican: shots from the bubblehood
-Cheap Calgarians
-Housing bust a boon for some renters
-US Records: foreclosures and low equity

So what are you seeing out there on this fine spring weekend?  Post your news, links and anecdotes here and have an excellent weekend!

note: any conversation on real estate or economics is allowed, please keep it civilized. when posting articles please only quote pertinent points and link to the original instead of pasting the entire article here. Thanks!

© The Pope for Vancouver Condo Info, 2008. | Permalink | 123 comments |