Vancouver Condo Info

A few of you have already pointed out this article, but it’s worth a read if you haven’t seen it.

It’s a problem when Vancouver condos sell but the lights stay off

There are a number of ways you could address the problems created by a speculator driven housing market, but no move to do so yet.

Here’s one point from Sandy Garossino about the kind of units we’re building downtown:

“I think we are creating a form of housing that is perfectly suited to speculation. It couldn’t be more suited to speculation.

“They are completely interchangeable, one suite is like another suite. This is the kind of thing that drives easy trading. It’s not completely liquid, but it is a lot more liquid than say a house on a lot. So, from a policy standpoint, what we should be doing is looking at the kind of housing that speculators don’t like.

“The public policy from my perspective should be to cool that market, because it’s driving market confidence. Market confidence should match market conditions.”

Interest rates are at historical lows and it doesn’t look like that’s due to change anytime soon.

Of course if you could predict future changes with accuracy you could become incredibly wealthy.

It’s the unknown that’s the challenge and that’s why some people chose to pay a premium to lock in todays low rates for many years.

Unfortunately you can’t get the incredibly low rates that US buyers enjoy on a 25 year term, but 10 year rates have fallen along with 5 year and variable rates.

Ten year products are growing in popularity recently with terms available as low as 3.6% according to this article in the Financial Post.

only about 1% of the market locks in for longer than 10 years, Bank of Montreal recently did away with an 18 year locked in mortgage:

“We had to shelve that. It wasn’t a very accepted product by customers,” said John Turner, director of mortgages at Bank of Montreal. “People have a problem getting their head around that long of a commitment.”

Hey, you made it to the end of another work week! Lets do our regular end of the week news round up and open topic discussion thread, here are a few links to kick off the chat:

-Don’t trust the realtors inspector?
-Old inventory hits the roof
-Inventory hits highest level in decade
-Man loses $745000 condo deposit
-It’s a dogs market in Vancouver
-So far so good for soft landing
-or not
-Ah, historical data
-Are you going to the show?
-

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

Vancouver house prices have been falling for the last year, but they saw a small bump last month.

So have prices hit bottom?

And what about the national market?

For one view on what the future holds you might be interested in checking out the 2013 World MoneyShow Canadian Real Estate presentation happening next week at the Vancouver Convention Centre.

The last time Ben Rabidoux and David LePoidevin put on this show it got a fair amount of favorable feedback from commenters here. If you missed that presentation here’s your chance to catch it again.

The show is free to attend but requires pre-registration. It will be held downtown at the Vancouver Convention Center next Thursday the 18th from 4-5pm.

If you attended the last presentation feel free to leave your feedback and thoughts in the comment area here.

Many Franks pointed out this profile from CBC’s Sunday Edition on a bankrupt homeowner.

This isn’t really a tragedy.

It isn’t even just a story about personal responsibility.

This is actually a simple “here’s what” for all the policy makers who thought “what could be the downside of offering up government backed zero down 40 year loans?”.

Sure, it’s all ‘booming economy this’, ‘free money that’ for a while.

And who doesn’t like free money?

Seven times in the preceding two years I had approached the bank that held the lion’s share of my credit card debt and asked them to reduce the interest from 20 percent to something more manageable, something more like 10. I explained that I had been laid off, that I was now not only a single mom but a full-time student, living on student loans. I explained that I was trying my best to pay it off but I couldn’t even make a dent in it with interest that high. Seven times they turned me down. The last time I met with a bank officer, she told me to make all my payments on time for a year and then come back and she’d consider it. I shuffled off, head bowed.

And then the mortgage company told me they were calling the mortgage – a forty-year-mortgage with no money down, made back in the day when you could still do that. I have paid nearly sixty thousand dollars towards that mortgage. Nearly five years in, I have yet to touch the principal. Get a new lender, they told me or come up with the pay-out amount, the same amount of money I borrowed initially. Impossible. I cried.

The silver lining? Bankruptcy was a relief. The kids will be fine, their mother obviously loves them, and the bank made their money.

I paid that credit card debt four times over. The bank is NOT getting ripped off here. They’ve done just fine by me. And my house? We loved our little house, it has been just lovely for us. And now it will be just lovely for some other family who needs a home. We’ll find another little house, or an apartment, and we will make it fine for us, too.

Read the full story over at the CBC.

story submitted by iconoclast

According to this article in the Financial Post signs of a Canadian housing downturn are everywhere.

They don’t pull many punches as they discuss the national home sales decline, overvalued housing and semantics:

Let’s not argue over whether Canada is the proud owner of a pretty pink housing balloon or a black bubble because either way, they both can pop.

They report some interesting numbers that the general public is likely not aware of. Did you know that housing related industries currently make up 27% of the Canadian economy? For a little bit of perspective that compares to 24% of the US economy at the height of their housing bubble.

Then of course there are the predictions for the future:

“Overall, we think existing home sales will continue to decline with negative implications for the elevated level of home building and broader knock-in implications for domestic demand growth,” David Madani, an analyst with Capital Economics, wrote in newsletter Friday.

And Mr. Ben Rabidoux, what do you think?

“Typically when you have a distortion in the economy, it is rarely painless to rebalance it. We’re in for a relatively painful period.”

Read the full article here.

Hey! It’s that time of the week again! You made it to the weekend, let’s do our regular end of the week news round up and open topic discussion thread for the weekend. Here are a few recent links to kick off the chat:

-Dog days for RE experts
-Who paid for the news you read?
-Sales sink in Greater Vancouver
-Consumer debt growth slows
-Whistler prices plummet up to 68%
-Realtor hunger index at 64%
-Offshore accounts leak
-Whiterock approves $250 suite fee
-Flaherty: the anti-Robin Hood

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

The Vancouver Observer has some good articles from the Real Estate trenches.

This one looks at what it’s like to shop for your first apartment in Vancouver.

What does $350k get you?

Not insuite laundry.

She lined up four apartments, all under $350,000. The cheapest is $250,000. None of them have ensuite laundry. If you think that giving someone a third of a million dollars would get you a washer/dryer, then clearly you’ve never apartment-shopped in Vancouver.

East Vancouver is heating up, because nobody who works for a living can afford to buy in the West End anymore. Rising rents make an investment property in East Van a more viable option than it once was, though proper houses remain out of reach for anyone on a Canadian wage. This keeps the pressure up in the apartment/condo market.

My Realtor says that the sales market is slower than it’s been in a long time: properties will sit for an average of 70 days. Still, there are vacant units that she won’t touch with a ten-foot pole: “I’m afraid to sell in Olympic Village, to be honest. I steer my clients away.” Dead neighborhood, small units, renovations that “probably won’t stand the test of time”.

Read the full article here.

Here’s a weird scene from the aftermath of the US housing bubble…

You’ve all heard of underwater mortgages, but have you ever heard of a zombie foreclosure?

There are more than 300,000 properties in the US where the owner has abandoned the property but the bank never completed a foreclosure.

What does this mean?

Reuters revealed the plight of people who walked away from their homes not realizing that their names remained on the deed and that they were financially liable for taxes and other bills related to the abandoned property.

In some cases, homeowners vacated after receiving a notice from the bank of a planned foreclosure sale, only to find out later the bank never followed through.

Zombie properties can be easy to spot as they deteriorate into neighborhood eyesores and havens for criminal activity.

Read the full article here.

Normally spring is a busy time in the real estate market.

Sales rise, prices rise.

That’s normal.

What isn’t normal is when usually optimistic Real Estate organizations and banks start predicting falling prices.

Down is the new normal.

Central 1 Credit union economist Bryan Yu says last year hit a 12 year low in sales and the coming year is predicted to be bad with continuing drops in both sales and prices:

He expects resales will fall another four per cent this year to 31,500 while the median price, the midpoint between highest and lowest, will slide six per cent to $474,000.

Yu says “subdued immigration, stagnant employment growth and the most recent round of mortgage insurance rule tightening will weigh on purchasing… biting particularly hard in high-priced Greater Vancouver.”

Full article at News 1130.