This is a report on Vancouver’s ‘most liveable city’ status as awarded by the UK’s Economist Intelligence Unit in 2002. That year we tied with Melbourne as the best place for a British Expat to live. Although its several years old, this clip is as funny as ever and certainly hasn’t lost its relevance:
I’ve got to admit that the recent sluggish housing market in Vancouver has started to get me a bit worried.. Its not really that bad yet, but we’ve definately lost the excitement of last year, where buyers would overbid asking prices by $150k with no subjects and leaky condos on the ground floor facing major streets would sell at the first open house.
With the winter blahs this market has been experiencing since the end of last summer, even yours truly (a faithful real estate cheerleader) has started to wonder: is there something to the bears argument? Do ‘fundamentals’ matter? Is ‘affordability’ really that big of a deal? I mean, here we are with a robust economy, super low interest rates and an almost world-class city and yet condo’s just aren’t selling like they used to.
And then it occurred to me: We’ve got a bunch of baby-boomers just a few years off from retirement, and who likes condo’s better than retirees? We just need a whole bunch of them to move here to boost our prices again. I think if we can reach out to old folks from across Canada and the world and convince them that Vancouver is the right spot to retire we can keep those prices chugging uphill.
Economically it just makes sense: An undesirable four bedroom home in a quiet neighborhood in most parts of Canada could be traded nearly straight across for a convenient 420 square foot condo in a vibrant and active downtown east-side Vancouver neighborhood with easy access to ‘medication’ and ‘massage’ services.
All we’ve got to do is convince them that Florida and Arizona are totally lame, and this is where they want to spend their time:
Just think of the therapeutic effect of all that cold damp air on tired joints! Spread the word: Vancouver is a retirement wonderland!
A reader sent in a link to this article in the business and investing section of todays Globe & Mail . It looks like the housing slump in the US is starting to have an effect on the manufacturing sector, which saw a downturn for the first time in three years:
Industries such as wood, paper, furniture and appliances all were flat or slipped last month, according to the Institute for Supply Management, based in Tempe, Ariz.
In a report that points to a worrisome trend for the economy and for jobs, ISM said its manufacturing index registered 49.5 in November, behind October’s reading of 51.2. The last time the sector contracted was in April 2003. A reading below 50 indicates contraction.
The construction sector is still not looking so good either:
The index was one of two troublesome economic reports Friday. The Commerce Department said construction activity in October plummeted by the largest amount since 2001, and home building fell for the seventh month in a row.
Both reports raised concerns that the economy may be in for a hard landing. Stock prices fell in early trading Friday on Wall Street.
Before anyone panics I would like to emphasize that this is happening in the US only and has nothing to do with Vancouver. We have a protective housing bubble that keeps us from being dragged down economically by our largest trading partner.
Also we have the skytrain, which is like a magical train in the sky that will whisk us far away from any worldly problems to our gold-plated condominiums where we will bathe in tubs of warm milk and receive foot massages from beautiful unemployed americans.
I just returned from a trip to Portland Oregon and thought it would be interesting to compare this specific US market to Vancouver. Portland is the 3rd largest city in the pacific northwest, after Vancouver and Seattle. Like most place Portland has seen a large increase in house prices, but has seen the market cool or drop recently.
According to the most recent numbers I can find:
Converting the Portland numbers to $CAD at today exchange rate gives you an average household income of $77,107 CAD to buy the average house costing $361,347.
Here’s a specific example on house prices in Portland: The house I was staying in was located in North Portland, 15-20 minutes out of the downtown core. In Vancouver terms I think it would be approximately like southeast vancouver. This is an older 2 story ‘fixer upper’ house on a double lot with full basement and some renovations on a quiet street near a major road. The house was recently assessed at $230,000.
The headlining story on MSNBC right now is home sales rise a bit but prices fall sharply.
Michelle Meyer, an economist at Lehman Bros., said the rise in sales was partly a response to falling prices and a recent dip in mortgage rates
“The pickup in home sales reflects stabilization in demand and the first signs that the housing market is beginning to balance,” she said in a note to clients.
Economist Joel Naroff of Naroff Economic Advisors said the report “does not point to a major housing meltdown,” but he noted that there is a “huge” supply of unsold homes and condominiums on the market.
The number of homes on the market is up 34 percent from a year ago and represents a supply of more than seven months at current sales rates, compared with an average of just four or five months in the boom years of 1999 through 2005.
“The housing market is far from the bottom,” Naroff said in a research note. “Sellers will have to overcome their state of denial and start dropping prices even more to clear this market. And once that happens, we will then have to convince buyers that prices have stopped falling. We are a long way from that point.”
There are concerns at the federal level that if the housing slump across the USA continues or gets worse that it could cause bigger problems for the US economy that has already started to slow down. Its suprising that this is a problem across most of the country. What ever happened to the maxim “all real estate is local”?