Friday Free-for-all

Here's the open topic for June 29th

-CB Developments lose their license.
-Torn up contracts head to court.
-Mohican has a brand new look.
-Hong Kong changed us.
-Too soon to call bottom in the US.

What are you seeing out there? Post your news, links and rants regarding the Vancouver housing market here!

The hidden costs of buying a home.

Well, I don't know that they're actually 'hidden', but thats the title of this article on MSN Sympatico finance about the extra expenses that people don't always take into consideration when buying a home.

Purchasing a home is a stressful experience for anyone, but especially for first-time buyers who may not be aware that there are a host of costs other than the actual purchase price and real estate commissions.

It helps to know what those costs are in advance rather than get an unexpected surprise and add to an already stressful experience.

Of course anyone buying in Vancouver today doesn't have to consider these issues, since they have a billion dollars to spend and property values will increase forever and ever hallelujah!

No Vacation for YOU!

Apparently people in western Canada have problems taking a vacation. The 'wealthy' western provinces of Alberta and BC have the highest percentage of workers who don't take all available vacation days. "This, Ipsos-Reid says, means that about $5.4-million in wages is being handed back to employers."

Albertans may be hardworking, with 24 percent of employees not taking their vacation days, but We've got them beat in BC:

More than 65 per cent of employed Canadians feel more, or just as, vacation-deprived as they did five years ago, according to the survey. British Columbians (25 per cent) and Albertans (24 per cent) are the most vacation-deprived, with one-quarter giving days back to employers in 2007. Quebeckers are less work-obsessed, with just 15 per cent of those surveyed saying they leave vacation days untaken.

Canadians aged 18 to 34 are the most vacation-deprived, and, on the whole, 34 per cent of employed Canadians still work more than 40 hours a week. Canadians take an average 18 days of vacation compared with 36 taken by the French, 30 by the Spanish and 26 by the Germans, according to the survey.

Well, how else are we supposed to afford these condos that will make us rich?

Friday Free-for-all

Here's your open-topic post for Friday June 22nd:

-Genworth predicts 'relief' for buyers, offers mortgages.
-A rant against 'eco-density' in the Province.
-Is Edmonton's red-hot market melting?
-Sub-prime collapse may kill a bear.

What are you seeing out there? Post your news, links and anecdotes here.

UPDATE: I thought this link from Reductimat was worth highlighting:
-God is punishing Florida Realtors.

The Liquidity Issue.

BCbuds sent in this commentary from the Wall Street Journal about the risk present in loose credit markets:

In 2006, a record 20.9% of new high-yield lending was to particularly credit-challenged borrowers, those with at least one rating starting with a "C." So far this year, that figure is at 33%. No exaggeration is required to pronounce unequivocally that money is available today in quantities, at prices and on terms never before seen in the 100-plus years since U.S. financial markets reached full flower.

Led by private equity, borrowers have rushed to avail themselves of seemingly unlimited cheap credit. From a then-record $300 billion in 2005, new leveraged loans reached $500 billion last year and are pacing toward another quantum leap in 2007.

Even leading buyers of loans, such as Larry Fink, chief executive of BlackRock, say "we're seeing the same thing in the credit markets" that set the stage for the fall of the subprime loan market.

That article will only be available to non-subscribers for a few days, but there are articles popping up all over on the same issue. Here's one in the Globe and Mail:

"One of the biggest risks is the potential for a shift in liquidity," Royal Bank of Canada president and chief executive officer Gordon Nixon said at the conference's plenary session.

The furious pace in the growth of financial assets around the world - owing in no small part to the explosion of hedge funds and private equity - raises the risk that, for example, a sudden rise in interest rates could lead to the reduction or even the drying up of that liquidity, he said.

A tightening of credit and a drying up of liquidity would have an impact on all markets, from stocks to real estate. Is this really something to worry about, or are these voices just crying 'wolf'?

Its not just Vancouver

Affordability is a problem all over BC according to this story on news1130:

The average home in BC now goes for $455,000, so affording one means a family has to pull in well over $100,000 a year. That's a stretch considering Statistics Canada figures from 2005, when the average family took home about $65,000 a year.

I always find it interesting that these stories seldom mention prices dropping - they talk about how prices have gotten out of reach for many buyers, but never seem to connect the dots. I guess its up to outside buyers to keep our prices lofty?

Or perhaps overextended locals will stretch further to buy 'investment' property here. Haven't you heard? BC is running out of land!

US housing sentiment hits lowest level in 16 years.

There's an article on MSNBC today about the ongoing US housing market woes:

Housing developers are being squeezed by tighter lending standards for borrowers trying to get mortgage loans. In response to weak demand, developers are cutting prices and offering buyer incentives to cope with a mounting supply of unsold homes, the National Association of Home Builders said Monday.

The trade group’s housing market index, which tracks builders’ perceptions of current market conditions and expectations for home sales over the next six months, fell to 28, the lowest reading since February 1991, the NAHB said.

So much for David Lereahs thought from May 2006 that 'this may be the bottom' of the US housing slump. I have a feeling if economic reality hits the Vancouver real estate market you'll be hearing a lot of that from local 'experts', and just like bears that say 'a correction is coming' one day they will likely be correct.

Friday Free-for-all

Here's your open discussion topic for Friday, June 15th.

- Housing affordability has 'started to deteriorate'?
- Fraser sez: wrong way to make a region livable.
- It's still condomania in Canada.
- Foreclosures rise to record level in USA.

What are you seeing out there? Post your news, links, rants & anecdotes here!

Mortgage rates go up again.

The steady increases in mortgage rates got another bump this morning with predictions of more to come. We're now at a five year record high for rates:

A flurry of increases in the past month has sent Canadian mortgage rates to their highest level in more than five years, and consumers shouldn't expect a return to the low interest rates they enjoyed in the first half of the decade.

Interest rate hikes by the Bank of Canada to curb inflation, coupled with a slowdown in China's economy, are likely to snap the country out of the falling interest rate environment it has been in since 2001, said Benjamin Tal, senior economist at CIBC World Markets.

Canada's chartered banks are already pricing in rate hikes the Bank of Canada is expected to make later this year. Royal Bank of Canada has raised the posted rate for a five-year, fixed mortgage to 7.44 per cent, the highest since April, 2002.

I found you the perfect condo!

Looking for a condo? Looking for a condo previously owned by Axl Rose? This could be the one for you!

Vancouverites may be getting used to house prices that break the $1-million mark, but a new condo listed this week proves that the sky's the limit when it comes to luxury living. The penthouse apartment at 1000 Beach Ave. is on the market for a cool $18.2-million.

Situated downtown at the northeast corner of the Burrard Bridge, right on the Seawall, the property has never been lived in - former owners reportedly include Axl Rose, front man for rock group Guns N' Roses, and the Russian Rocket himself, Canucks star Pavel Bure. Until the current owner, a low-profile, White Rock-based businessman, took possession in 2004 (for an estimated $7-million), it was an empty concrete shell. Nevertheless, it's proved a remarkable investment.

Discouraging speculation.

A few weeks ago I linked to this BBC news story about a new Spanish law aimed at reducing speculation and corruption in their housing market. Unfortunately there are no solid statistics regarding the level of speculation in our local real estate market, but I would venture the following guess: whenever an asset increases in value there will be people willing to speculate on the chance that it will go higher.

So how much is too much speculation? And if our market has been knocked out of calibration by too much speculation is there a healthy and reasonable way to discourage it, or are we better off letting the market do what it will and waiting for excess speculation to be flushed out by a correction?

Financial Mismanagement in Coquitlam

So it looks like its not just some buyers that have problems with basic math - Some developers run into issues as well. The sun has a story about CB developments $8.5 million dollar shortfall oat the Coquitlam Riverbend project.

The final phase of the financially troubled Riverbend condominium complex in Coquitlam would have lost its mortgage investors' money even if its pre-sale contracts had been cancelled and units resold at current market prices, according to a receiver's report.
...

In his conclusion, Bowra said the "best option in terms of maximizing recovery for the stakeholders" would be to sell the units at current market value and not the pre-sale prices.

However, someone would still need to pour $3.8 million into the project so subcontractors and suppliers could be paid and the project completed, which would still leave CareVest short $2.6 million.

Bowra, in his report, said other options to dispense with the project included selling the project "as is" to another developer, finishing the homes already under construction and selling off nine lots for which no construction has begun, or selling off the homes under construction and nine remaining lots separately.

All options would see CareVest lose $3 million to $4 million.

It doesn't mention this in the linked story, and I haven't been able to find this online, but a story on CTV news this weekend said that this mess isn't just affecting pre-buyers that have yet to move into their homes. The liens filed against this project includes buyers that have lived in their completed homes for a couple of years and allready paid for all work done. For the time being those buyers will be unable to take out a loan on their property or attempt to sell. The CTV story mentioned the possibility of the total cost running into the hundreds of thousands of dollars for each home owner. Scary stuff!

Trapped in a world-class city.

There's a tidbit in 24 about downtown residents irate about being trapped in their condos by the Vancouver International Triathalon.

Brandon Steele was ready to go on vacation yesterday morning until he tried to leave his condo at 1111 Beach Ave.

"I got outside and just saw a blue fence. It was like being under house arrest," said Steele, who had planned to drive to the Interior.

Steele told 24 hours there has never been a problem getting out of his building during previous triathlons.

However, organizers explained, this was a world class event.

Friday free-for-all

Here's your open topic post for friday June 8th.

- Fearing the end of easy credit
- Posted 5 year mortgage rate goes up again
- Richmond prices up, condo sales drop 23%
- Disclosing landslide risk

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

Open call for 'the numbers'

There have been some requests in previous posts for a new source of 'the numbers' - the day to day local sales stats around these parts. You can currently get numbers for Rob Chipmans area on his blog, but some of you are wanting them for the GVRD as a whole, or broken down more by category.

I'm not a realtor and don't have access to these stats, but I do know that there are a few of you out there that are and you visit this blog with some regularity.

So.. Any of you feel like providing the numbers for this blog?

There are a few ways this could work, whether you want credit or would rather remain anonymous, I'd love to see those number and I know a lot of the regulars here would as well. I can give the right person full access to post on this blog, or simply take an email version of the stats and create the posts myself.

I don't even feel that daily numbers are necessary, I think weekly stats would be fine, though I know some of the more data-addicted would dissagree.

So whats in it for you? A bit of extra fame would be about it, though you may get a certain vicarious thrill from the robin-hood-esque act of bringing these stats to the masses.

If you're interested drop me a line at vancouvercondo.info@gmail.com

Downtown Vancouver most expensive in North America

Congratulations Vancouver!

I wondered aloud on the previous post whether Vancouver had taken the crown of 'least affordable' in North America yet - Well I don't know about the GVRD, but according to Century 21 our downtown peninsula now has the most expensive real estate of all downtown neighborhoods in North America.

Not only are we number one in North America according to this report, we've got the fourth most expensive downtown core in the world! Coming in at $577 per square foot Vancouver ranks only behind Paris, Moscow and Seol for the most expensive downtown real estate on the planet. We've got London beat and those sad little towns of Tokyo and New York City only come in as number 9 & 8 on the most expensive cities list.

Can we do better? Is there any reason that our thriving metropolis shouldn't be number one on that list?

Here's the story in the Calgary Sun and here's a bullish version of the story on news blaze.

Housing development threatened by flooding.

A partially completed housing development built on the flood plain in Fort Langley is now under threat of flooding from a rising Fraser River.

"We're in the process of understanding what the implications are in relation to water rising," said Randy Dick, manager of the Bedford Landing development for ParkLane Homes.

"We're up high. That's the good news.

"It's too early to say what the solution is in the long term. For the short term, with the freshet coming, we're going to keep the water table down with flap gates and pumps."

The development bills itself as "waterfront living in the heart of Fort Langley." The partly built subdivision sits on what was once the flood plain next to the Bedford Channel.

Friday free-for-all

Here's your open topic post for Friday June 1st:

- REBGV sales stats for May 2007 available soon.
- Olympic size taxpayer subsidies for developers.
- Loonie and mortgage rates going up.
- Business council of BC economic outlook (pdf).
- Flipping the truth.

What are you seeing out there on the streets and sidewalks of Vancouver? Post your news, links, rants & anectdotes here!