GVRD: 24% speculative?

According to a story in the Vancouver Sun approximately 24% percent of new condo units are re-sold within 12 months (as of last april). That story puts the speculative rate peak in the early eighties at closer to 50%.. Funny how often I'm seeing comparisons these days that make our market look good compared to 'the early eighties'.

Robyn Adamache, senior analyst with Canada Mortgage and Housing Corp. in Vancouver, said inventories of completed and unsold condominiums in Greater Vancouver remain very low -- 160 in all of Greater Vancouver and only three in Abbotsford -- as of July 1.

"We don't see any evidence of oversupply so far," Adamache said.

However, there were also some 14,779 condominium units under construction in Greater Vancouver, a near record. Another 665 are under construction in Abbotsford.

Adamache added that a clearer picture of how well housing supply is balanced with housing demand will emerge once more of those units are complete and owners either take possession of them or attempt to sell.

The article also says that sales are slowing and that Vancouver is no longer a "build it and they will come" market.

friday free for all!

Its that time of the week again! This is your open topic discussion post for Friday July 27th.

Here's a few stories I've noticed this week:

- City addressing affordability crisis.
- It "sounded like a good investment at the time"
- Exporting 'Vancouver's problem'
- Housing mess creating big losses for investors.
- Condo Vultures

What are you seeing out there? Post any tidbits of news, info, links and anecdotes here!

Density solving the garbage problem?

There's an article in the Globe and Mail that posits the theory that Vancouver would be in much worse shape during the Strike if it weren't for the density thing:

Apartments and condos, most of which still have their garbage taken away by private companies, make up at least 56 per cent of the city's housing, according to Andrew Ramlo, director of Urban Futures Inc.

Story Link.

The Forgotten

In a hot market its easy to think that everything on the market, from junk to gemstones is swept up by eager buyers as soon as its listed, but thats not always the case. Why not look at a few of the units that have been on the market for more than 90 days?

This little puppy in Oakridge is only asking $399k and has been on the market for 323 days, thats almost 1/10 of the age of the building. But if you want to look at building age to listing day ratio thats nothin':

#2604 788 Richards street hasn't even been built yet and yet somehow no one has swept in to grab this assignment for easy money. This unit's been on the market for an astounding 509 days.

"The three secrets to a signature address: luxury, presence, taste". I suppose you could add time to that list as well, as this offering has been aged like a fine wine. Neophyte marketers take note and learn from the master: If your unit doesn't sell for $1,064,900 do what Rennie does and raise your asking price a few hundred thousand: This condo in still available for the bargain price of $1,334,900.

Act fast!

friday free for all!

Here's your open-topic post for Friday July 20th. Here's a few stories I've noticed this week to kick the discussion off:

- Whats that smell? City workers strike looming.
- 65,000 homeowners in BC affected by leaky condo issue?
- Young families move to the suburbs.
- New blog about bad landlords in Vancouver.
- Buyers remorse: just get over it?
- US home builder confidence plunges again in July.
- Ohio AG files suits against 10 lenders for appraisal fraud
- Fed, Lenders and Wall st. to blame for US mortgage crisis?

...everyone but the buyer it seems. What are you seeing out there? Post your news, anecdotes, links and commentary here!

Real estate obsession

There's interesting commentary in the Globe and Mail about Vancouver's obsession with real estate. The author Timothy Taylor proposes new benchmarks for tracking the market:

The last, and arguably most important, statistic we should have is what I like to think of as the personal humiliation sustainability index. This number would be derived by dividing the value of the house itself by the tax assessed value of the house and property. The crazier the market, the tinier this number becomes, as the structure itself, the thing you were planning to live in, disappears into financial irrelevance.

To illustrate, I went to see a place recently and the agent proudly showed me the tax assessment proving the value of the land. Looking over his shoulder, however, that allowed me to value the actual physical structure at about 9 per cent of the asking price. He was selling dirt, folks. A few metres of turf and a rhododendron. And he was smiling.

Bat Update.

It turns out that if you buy a $509,000 condo in Vancouver infested with bats you can't have them removed during the summer. According to this article in the Vancouver Sun bats are protected under the BC wildlife act and can't be disturbed during their breeding season. Between May and August anyone caught capturing bats will face fines of up to $345 per animal.

..it was finding a baby bat in their bed that has the couple worried that they may have contracted rabies. Bats are the No. 1 carrier of the disease in B.C. Rabies is passed through saliva, usually through bites or open cuts.

The young couple have gone through the first of four rounds of rabies shots, which are injected into the legs and buttocks. Their dog, Soweto, has also received a booster shot.

Nurse said the suspected bat entry points from the walls into the condo have been temporarily sealed off and he has cleaned buckets of bat feces from inside the third-floor penthouse walls.

The bats, which keep him up at night, are noisy, regularly emitting "high-pitched squeals."

It's not just a condo, its an adventure!

Saving money on maintenance costs

These are frustrating times for landlords - the price of buying apartments has gone up above what you can squeeze out of the proles for rental income, and thats just the mortgage costs. Once you add in maintenance, taxes and everything else you've really got to be counting on lots and lots of appreciation so you can sell for a profit to make your 'negative cashflow' investing work out.

So whats an aspiring land-barron to do? You can't give less to the banks, they wont accept that - cheating on the taxes isn't uncommon, but not highly recommended as it will just lead to bigger headaches down the road, and you can't seem to squeeze the tenant for much more money because they're unable to take out mortgages to cover their rent.

So where do can you save that money?

Maintenance.

But you should probably try to sell before the balconies start collapsing.

Condo infestation

With the 'hot' housing market in Vancouver, a suprising number of people have bought property subject to no inspection. With that in mind this could be the perfect time to unload that condo that just happens to be infested with bats.

Friday Free-for-all

Here's your open topic for Friday the 13th(!) of July:

-Riverbend buyers suing for lost equity
-Calgarians rushing to buy condos in Fraser Valley?
-US foreclosures drop in June

What are you seeing out there? post your news, links and anectdotes here!

Vancouver prices will never come down.

Reductimat sent in a link to this article on News1130 about the recent Angus Reid poll on home prices. I don't think I've ever seen an article that lays down so many giant day-glow dots and then refuses to connect them. From the photo of several condo towers under construction downtown (supply) to the demand side economics "three-quarters of current home owners say they could not afford the prices currently being charged for real estate in their neighbourhood."

Its tough to pick the best gem from this brief article, but I like this paragraph :

Lucas Marshall from Angus Reid says waiting could cost you even more money. "It's dangerous...chances are prices aren't going to be more favourable, and most people who do own homes say they're very lucky they got in when they did." In fact, 95% of current owners who took part in the survey said they're happy they bought when they did.

Are you kidding me? How many people holding an asset that's shot up in value are going to be unhappy with their purchase? 5 percent apparently. And since when did past performance create any sort of guarantee for future results?

Lucas says the overall message from the survey is do your best to buy now because prices are not likely to drop.

So when was the last time a poll indicated a price drop, and if we reach the point were %100 percent of owners couldn't afford the house they're living in at current prices where are we going to find buyers? The move-down crowd?

New source for current GVRD real estate stats

REsteven has just started a blog to track current market stats for the GVRD and FV - this is similar to Rob Chipmans numbers blog (rireb), but REsteven is breaking the stats down by area. I'm looking forward to seeing how the inventory issue plays out with rising rates.

Interest rates going up.

Whether house prices continue to go up or not, they just got more expensive - The Bank of Canada is set to raise interest rates for the first time in more than a year.

After tomorrow, bank officials make their next decision on Sept. 5, followed by Oct. 16 and Dec. 4. In its last statement in May, the central bank said “some increase in the target for the overnight rate may be required in the near term to bring inflation back to the target".

Once the current batch of locked-in preapproved rates have worked their way through the demand side of our housing market we'll see what effect this rate increase will have.

Theres a related story today in the Tyee:

Two-in-three Canadians think houses in their neighbourhood are overpriced, according to a poll released today by Angus Reid Strategies. Almost three-in-four homeowners say they could not afford a down payment on their house as it's presently valued. And the vast majority of Canadians rank home ownership as a top priority, but are pessimistic about their chances of buying a house in the current market.

Friday Free-for-all

Here's the open topic for Friday July 6th - Talk about anything to do with the Vancouver Real estate market here. A few topics I've noticed this week:

- June Stats released, SFH benchmark price of $717,715
- Storage locker business booming
- Edmonton prices fall and listings boom
- US home equity loan payments not coming in on time.

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

The live/work balance.

City staff are considering ways to allow for more office space in Vancouver despite the opposition of some residential developers. Options include allowing for taller buildings and expanding the boundaries of the 'office only' central business district. City planner director Brent Toderian points out the need to consider what sort of office space is appropriate for the type of Jobs vancouver typically creates:

Skyscraper-type office buildings in Vancouver's central business district are typically attractive to head offices or high-end professional firms. "There is still a question about whether Vancouver can be that kind of downtown," said Toderian. "The fundamental question is are we going to attract the jobs to this city that require high buildings."

Toderian says there won't be much point in allowing tall office towers in the central business district if there aren't enough large businesses to occupy them. "We don't want to kid ourselves by saying we have created capacity simply by allowing more height. We want to make sure we create real capacity."

Instead, the city might produce more useable office space by allowing more height and density in areas such as Yaletown and Broadway, which tend to serve the "smaller users" that are more typical of the city's downtown businesses.

Residential developers seeking space for new condos developments are concerned that the city is over-estimating how much office space it will need.

Condo marketer Bob Rennie, who is involved with key projects all over the city, warned in May there is a risk condo prices will skyrocket if the city constricts too much the amount of land available to them.