Tag Archives: condos

Gen Y not buying a lot of Vancouver houses

From the obvious files: expensive homes are expensive.

The Globe and Mail has an article about changing attitudes towards real estate by Generation Y in Vancouver.

Essentially: they are more inclined to live urban and remain mobile.

They also say that Boomers are downsizing into condos.

Ben Smith, VP of sales and marketing at Rennie & Associates, says he’s already seen a major shift in the last six months. This year he’s seen a sudden surge in demand for three-bedroom condos, purchased by downsizing boomers. Those boomers are trading their homes for spacious condos. Those same boomers are helping their kids with a down payment on their own condo, which is the only way a lot of Millennials will ever afford to live in Vancouver.

“It’s exciting, because for years we’ve been talking about this, and we’re finally seeing it happen,” he says. “There is $88-billion worth of clear-title real estate tied up with boomers. In B.C. and Vancouver especially, we are all equity and no income. If you don’t have that down payment, you don’t have a home.”

Read the full article here.

Olympic Village: Problems in Paradise

Remember when the area of False Creek that houses the Olympic Village was an semi-industrial wasteland?

Then we all pitched in and built an enormous number of high end condos at taxpayer expense.

Now everything is awesome.

…With the exception of a few problems.

It’s a busy Vancouver neighbourhood, that according to residents is riddled with problems reminiscent of the Downtown Eastside.

Police have been called to one building 215 times since May and that is more than 30 times a month, more than one call every day.

On Friday a cab driver was robbed in broad daylight and threatened with a needle.

The Olympic Village was marketed to families, retirees and young professionals. Some social housing was always on the table but condo owners say they did not bargain for this.

“I’ve seen an unfortunate drop in the cleanliness in the area because of random pets that people have,” says one resident. “There’s definitely a lot of garbage that has been left on the street, and graffiti, some people sleep on the stoops outdoors.”

“It’s become quite strange.”

Read the full article here.

Afraid of falling prices? Just don’t sell!

There’s a funny comfort meme in the media now that house and condo prices are falling.

Its a strange interpretation of ‘supply and demand’ that says if demand is dropping dramatically we’ll just cut back on supply to match and prices will stay stable.

Soft landing here we come!

There are a number of talking heads in the media espousing this viewpoint at the moment and If you don’t think about it too hard it kind of makes sense.

Here’s just one recent example:

Don Lawby, chief executive of the Century 21 Canada, and a charter member of the club that doesn’t see home prices dropping anytime soon, can’t see any desperation from sellers.

“The economy continues to be okay, people have jobs, interest rates are low,” said Mr. Lawby. “Historically, anytime when prices dropped it was tied to high unemployment and interest rates. It’s not the case today, people are not forced to sell, they are staying with their price.”

If people don’t have to sell, then they’ll just take their homes off the market and there’s one less property on the supply side right?

..Of course if you start thinking about it a little bit it doesn’t make as much sense. As Patriotz points out:

..most discretionary sellers are planning to buy another property, so if they decide not to sell they are also deciding not to buy.

So for those of you keeping score, that’s one less seller AND one less buyer. Kind of cancels itself out doesn’t it?

The other point that has been repeated ad nauseum but always seems to get ignored in these articles: the seller that doesn’t sell has zero affect on the market.  The ONLY activity that affects the market are the sales that take place and what price the exchange happens at.  That sale then sets the comp price for all neighbouring properties.

So what really drives the market?

What buyers are willing and able to pay for their desired property from buyers who either need or want to sell.

In a falling market buyers are willing to pay less, because they aren’t completely stupid.  They know it doesn’t make sense to bid high on a purchase that is falling in value each month.

And how fast are Vancouver property prices falling right now?  Apparently even faster than the US bubble markets were falling at their peak.

So there’s that.

But possibly even more important is the buyers ability to pay.  Even if someone really wants to buy that million dollar house and thinks it’s a great deal they might not be able to.  If the credit isn’t available that sale will not happen.

Recent moderation in the mortgage market will have some effect here as we return to the historical standard 25 year amortization on CMHC insured mortgages.  As CMHC hits it’s mortgage cap it is also pumping less credit into the housing market now than it has been for the last few years.

Every time you read another expert talking about the lack of a ‘trigger’ to cause a collapse in the housing market it’s worth thinking about what the trigger in the US or Spain or Ireland was.

The US housing market started to collapse in 2006.  2 years later financial markets collapsed.  The ‘trigger’ for the US real estate collapse was simply this: House prices were too high.

 

 

FFFA! SALES! CONDOS! INFLATION! RENT! POT!

It’s that time of the week again, this is when we do our regular end of the week news roundup and open topic discussion thread for the weekend.  Here are a few recent links to kick off the chat:

Winter freeze for Vancouver sales?
RET better than a new condo?
Calgary & Edmonton beat Vancouver
Don’t bet on inflation for home prices
Rent Vs. Buy
Everybody must get stoned
West Van waterfront acreage $20.00
Rona sales struggling
Shadow inventory?
Mr. Christie you make good condos
Really low sales

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

Friday Free-for-all!

It’s that time of the week again! Let’s wrap up the work week with our regular news round-up and open topic discussion thread.  Here are a few links to kick off the chat:

Inventory inches up
Canada’s housing crash begins
BC slowdown signals wider slump
No Cam, thats not what happened
Mommy, can I borrow the car?
Vancouvers economic well-being
No more land, lots more condos
Tiny little boxes
25% drop in Vancouver?
Come back to BC!
Why rent?

 

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