Vancouver Property Taxes increasing at double the rate of inflation

The city of vancouver is considering a property tax increase of up to 6.3 percent to cover spending over-runs according to this article in the Province newspaper. The increase would be necessary to cover the current budget including proposed Olympics funding and is above and beyond this years 4% increase.

“In operating-budget estimates going before council Tuesday, budget staffer Annette Klein says the city’s funding shortfall amounts to a 4.9-per-cent tax increase. And $7.1 million in new spending could tack on another 1.4-per-cent to the property-tax bill.

“If we don’t make any changes in the budget . . . this is approximately what it would be to run the city,” said Klein. “On top of it, we have these funding requests.”

In July, the NPA-dominated council voted to cap future property-tax hikes at four per cent. “Now, what we’re going to do is keep working on this, and come back with some options on how to get to that four [per cent],” Klein said. Next year’s inflation rate is pegged at two per cent.

Last year, council raised taxes four per cent after a gruelling budget process. It cut costs to social programs and community and arts groups. The city also eliminated the equivalent of 25 full-time jobs.”

There is more coverage in the Vancouver Sun, where Peter Ladner suggests that even though a 6% tax increase is a ‘goulish’ prospect, citizens may tell council they are willing to accept a larger tax increase for more city services. That article also looks at some of the numbers:

“According to the “preliminary estimates” for the city’s 2007 operating budget, the total revenues next year are expected to be $823 million. But, as it stands now, total expenditures are pegged at about $846 million in projected expenditures.

That’s a “potential funding shortfall” of $23.4 million. If council uses a tax hike to fill that massive gap between revenues and expenditures, it would have to impose a 4.9 per cent increase.

Then there’s $7.1 million in new funding requests. The most expensive request comes from the senior managers on the city’s “corporate management team.” Those managers propose that $5 million be allocated next year to a “legacy reserve fund” for the 2010 Winter Olympic and Paralympic Games.

According to the budget document, a total of $20 million would be set aside during the next four years to “provide for the involvement of communities, citizens and businesses; allow the city to meet sustainability objectives; and be host of visitors and residents participating in the Olympic experience.”

Vancouver Realtor meet-up tonight.

It’s a bit of a late notice, but if you’re a Realtor or looking to buy or sell real estate in Vancouver you may be interested in the Vancouver Realtor Meetup happening at 6:00 pm tonight (Monday October 30th, 2006) at ‘diner’ downtown.

Monday, October 30, 2006, 6:00 PM

1269 Hamilton Street, Vancouver (Yaletown; between Davie and Drake)
Vancouver , BC V6B 6A8

Who should come? Are newcomers welcome?
All Real Estate Professionals are welcome to come. Thinking of buying or selling a home? Well, you should come by as well and meet Vancouver’s leading Real Estate Professionals in a great relaxed environment.

Why should people come?
To learn more and discuss all things Real Estate with Vancouver’s leading Real Estate Professionals.

They request that you RSVP so they know how many people to expect.

Realtors using the B-word in public.

No, not blogger, bakery or bunion. I’m talking about a very dirty B-word when it comes to the BC market: Bubble. I’m talking about Realtors (not including Rob Chipman) using the word bubble or referring to the possibility of a downside for the market here.. Whether their purpose is to deny the existence of a Vancouver housing bubble, entertain the possibility or sound warning bells (hey, it could happen). It’s interesting to see how Realtors phrase any reference to a Vancouver real estate bubble and the idea that prices won’t keep rising like they have:

Duncan Browns market update May 2006:

My best guess is that this intense pressure on prices will force buyers to back off a little which could take the heat out of the market for a few months, while it adjusts. This kind of minor correction could be exactly what the market needs in order to sustain itself over the long term and prevent those infamous “bubbles” from bursting!

Jacob Krause blog entry March 2006:

Buyers putting up 5 per cent of the price of a home and mortgaging 95 per cent are doing the same things as stock market junkies snapping up securities on margin. The only way they make money is if the asset rises in value, and quickly. So far the 5 per cent-down crowd have done very well, since their extreme leveraging has paid off in a rising market. But if housing prices move in the opposite direction, their tiny little bit of equity can evaporate in a week or two, leaving them with nothing but a sea of debt. Oh yeah, and a home they “own.”

Tom Everitts anti bubble tirade September 2006:

I’ve been involved with this ‘bubble’ argument for so long, it is inevitable that the naysayers will be right one day. One day….but not now, nosiree…not a chance folks. Once again, during the lull that was August, everyone started throwing the ‘bubble’ word around again. ‘Ohhh, it’s coming this time’. ‘Ohhhh, all those people shouldn’t have bought’….’Ohhh, blah, blah, blah’.

So thats three random remarks made recently by Realtors in Vancouver.. Seen any other interesting remarks from people involved in the day-to-day business of selling homes here? If you’re looking for a place to buy is this a topic that comes up for conversation between yourself and your realtor?

Sales tactics for a sagging market.

Looking to sell a house or condo in a slowing market, but having trouble getting potential buyers in to look at your place? You might try Value Range Marketing a real estate marketing technique in which agents list a price range instead of a fixed price for a property.

“There are still plenty of skeptics and some outright opponents to Value Range Marketing (VRM), and the marketing technique represents just a tiny share of all U.S. property listings. But Lund said VRM is attracting a lot of attention with the slowing housing market.

He rattled off a list of market areas from which real estate professionals have contacted him in the past month about using VRM, among them: Vancouver, Canada; Golden, Colo.; Flagstaff, Ariz.; Ogden, Utah; Minneapolis, Minn.; and Staten Island, N.Y.”

I’m surprised to hear that this would work at all in a slowing market – I can imagine in a sellers market that giving a price range for a property may get more offers, but in a slowing market? Why would anyone offer anything over the lowest range listed?

“It’s the bigger net theory of fishing. It opens up the marketplace to more people looking at the property,” he said. Also, in a market that is subject to major swings in pricing, VRM can reduce the likelihood for price reductions, he said. “When market conditions are changing the way that they are, if you put a fixed price in it might only be valid for that day.”

I’m still skeptical – if prices are dropping in a market I’m not sure how giving a price range would eliminate price reductions, but if you’re feeling desperate give it a try!

Home sales and prices still dropping across the US

This article on MSNBC looks at the stats for home sales across the USA, with the subtitle “year-over-year median sales price drops by the largest amount on record.”

“Housing, which had set sales records for both new and existing homes for five consecutive years, has been rapidly loosing altitude this year, as consumers were battered by rising mortgage rates, soaring energy prices and a slowing economy.

However, economists with the Realtors said they believed the housing decline could be hitting bottom.

“The worst is behind us as far as a market correction — this is likely the trough for sales,” said David Lereah, the Realtors’ chief economist. “When consumers recognize that home sales are stabilizing, we’ll see the buyers who’ve been on the sidelines get back into the market.”

However, analysts said that the weakness in housing could last for several more months with a real upturn in sales not occurring until next spring.”