Mary Umberger
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Noelle K
USA Today

If there’s any lingering doubt about how the Internet is transforming the way people buy and sell homes, here’s eye-widening proof: Marnie Azadian and her husband just moved from Scottsdale, Ariz., into a $410,000 home in Tulsa that they bought 100% over the Internet.

They never visited Tulsa, where Marnie had accepted a job. They never opened the front door, or a kitchen drawer. Never drove around the neighborhood.

“I did have some moments of ‘Oh my gosh, what did we just do?’ ” says Azadian, 57, but no regrets about the house they’d fallen in love with from a virtual tour. (Though her commute is a bit more of “a pain” than it looked like on mapquest.com.)

Risky? Maybe so. But this is just a glimpse of how rapidly and radically the Internet and other techno-gadgets are reshaping real estate sales. Already, 80% of buyers used the Internet to help find a home, according to the National Association of Realtors. Day by day, new real estate tools are surfacing on the Web.

Technology is shifting knowledge and power to buyers and sellers. In doing so, it’s loosening Realtors’ long-standing control of vital information and cutting into their sales commissions. For more than 100 years, Realtors have guarded the details of homes for sale via their multiple listing services. At least 900 regional MLS systems exist nationwide. Unless the MLS systems become more open, unified and technologically sophisticated, they risk being replaced by a Web search engine.

“The Internet is a significant threat to Realtors, who in previous decades have had iron-grip control over all necessary information for those seeking to buy or sell a home,” says Stuart G,abriel of the University of Southern California’s Lusk Center for Real Estate.

Compared with the patchwork of MLS systems, each with its own board of directors, “The Internet search engines may be very competitive and very efficient.”

Signs of upheaval in the industry were evident by late 2005, when the Justice Department filed an antitrust lawsuit against the National Association of Realtors. Justice wants the Realtors to stop letting brokers withhold for-sale listings from low-cost Internet rivals.

The Realtors’ policy is on hold. But Brian McDonald, a deputy assistant attorney general for the antitrust division, says the policy’s restrictions still exert “a chilling effect in the market” because some companies won’t risk introducing new Internet business strategies if they could be undercut in the future.

But even as the two sides file motions, delaying the trial, the Internet is leveling the playing field and prodding the industry to adapt faster than you can say, “Your honor, we’d like a recess to consider new developments.”

In just the past few months:

•Zillow.com, which created a stir last year by posting its estimated values of millions of homes across the country, has started showing homes for sale. In the past two months, nearly 32,000 people have listed their homes for sale.

An additional 16,000 have put “Make Me Move” prices on their homes. That feature lets homeowners who aren’t really looking to sell put a kind of dream price tag on their home, just in case someone wants to make a sweet offer. Zillow says the Make Me Move prices tend to be about 17% higher than its “zestimates,” which means owners are taking the option seriously.

•Trulia.com is asking real estate agents to post homes for sale and has introduced “heat maps,” showing the price and popularity of sales by state, county and neighborhood.

•Google.com is trolling for real estate agent listings for its classified-ads system, known as Google Base. The Houston Association of Realtors, for example, announced in December it would put all of its listings on Google.

•By the end of the month, apartment hunters will be able to use some cellphones with GPS technology to find places to rent. From the national database of apartments.com, customers can see a list of the 70 closest apartments from where they are standing. On cellphone screens, they’ll be able to see apartment details, floor plans, area maps and call the manager to see the property. (Gannett, which owns USA TODAY, also owns a stake in the parent company of apartments.com.)

This summer, the inventor of the technology, SmarterAgent.com, says it’ll launch a similar service for houses on the market.

•Forget grainy aerial photos of homes. Microsoft’s Live Local lets people use their Xbox 360 or other video-game controller to take 3D street tours of 15 cities. The company is busy adding more locations.

“It used to be, five or seven years ago, that our job was about helping clients find the right home,” says Pat Lashinsky of ZipRealty, a discount brokerage. Now, “The clients are very involved in finding their own homes; there are so many tools and ways they can do it.”

The role of the agent, which for years was mainly to bring together buyers and sellers, increasingly is “to help clients with all of the paperwork,” Lashinsky says. Nearly one out of four buyers last year found the home they wanted on the Internet, up from 2% a decade ago, according to the NAR.

There’s no hard data on how many people are quite as bold as the Azadians, willing to buy a home with only a high-tech tour from afar. But there’s anecdotal evidence that more buyers are willing to make a leap of faith in cyberspace.

Virtual tours

J.R. Crawford, an agent on Vashon Island, Wash., said she had three buyers last year who made offers after taking virtual tours. Though each bid was contingent on a walk-through of the home, Crawford recalls that one buyer from Texas opened the door and said, “I know where I’m going; you don’t have to walk me through the house.”

That said, buyers should beware: The quality of the information and the tools on websites can vary dramatically. A USA TODAY test of 10 popular sites found very different results for available homes, prices and lenders. (Chart, above.)

For now, the vast majority of home buyers still use real estate agents, in some way, during the sales process. The Azadians said the good telephone rapport they developed with the seller’s agents in Tulsa gave them the confidence they needed to put their trust in technology. They sent all their documents via express mail.

But fewer buyers think they need agents to supply vital information. Last year, 69% of buyers said their agent was a “very useful” source of information, down from 72% the year before, according to the Realtors association.

Sellers, likewise, are doing more work themselves, from scheduling appraisals to holding open houses. As homeowners bear more of the labor, and agents less, many sellers don’t want to pay as much for an agent’s services. Rather than pay a traditional 6% commission, more sellers are saving money by using agents who provide a la carte services — such as advertising homes on the Realtors’ multiple listing service and filling out contracts.

These limited-service brokers are especially popular in high-cost areas, like the Washington, D.C., Northern Virginia and Maryland region, where the typical 6% commission on the average-priced home of about $400,000 could cost the seller $24,000.

Which is why four of the top-10-producing real estate agent teams in that area offer a la carte services, says David Charron, president of the MRIS, the multiple listing service for the Washington area, the largest in the country.

“That shows the business is evolving,” Charron says.

Federal regulators, however, say the industry hasn’t changed enough. The Federal Trade Commission has made the Realtors’ multiple listing services in seven metro areas drop policies that hampered limited-service brokers. The FTC is suing one MLS operator in Michigan for rebuffing listings from limited-service brokers.

“There are more (actions) in the pipeline,” says Maureen Ohlhausen, director of the FTC’s office for policy planning.

The Justice Department, meantime, is moving forward with its antitrust case against the NAR. The Realtors are fighting back. They argue that the broker should control the information about the seller’s home and decide how to share that information and with whom.

Competitive pressures, though, are shrinking the number of brokers who can afford to guard their listings from Internet rivals or a la carte agents. Just ask Re/Max International. It was among the firms singled out in the Justice Department’s lawsuit as sounding anti-competitive by expressing fear of the threat from Internet-based brokers. Now, Re/Max displays all available homes for sale on its website — even homes from low-cost Internet companies.

“The consumer is the one we really need to think of, and the exposure for their listing,” says Kristi Graning, senior vice president of technology for Re/Max. “We encourage listings to be exposed on as many websites as possible. … The data is already out there. Give consumers the data, and in exchange the consumer will give us trust and believe in our services.”

Michael Sasges
Sun

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Cressey addition to downtown skyline generates expressions of interest from 1,800 potential customers

Michael Sasges
Sun

The Donovan new-home project is a well-priced demonstration of design and commercial proficiencies. The mastery of space by architect and interior designer and the transformation or translation of their skills into value-rich homes by developer-builder are exemplary.

Don’t believe me? Then listen to what the new-home shopper is saying.

The Cressey development company has registered more than 1,800 expressions of interest in Donovan, reports Tracy Chong, Donovan’s development manager. The company will begin selling the homes next month.

My conviction that Donovan is a special addition to the downtown skyline has three components.

One is price. With Cressey asking an average square-foot price of $699, a Donovan residence is expensive absolutely, but not relatively or comparatively.

The benchmark price right now for new-construction tower-residences downtown is $800, the average in the last two quarters of 2006, PricewaterhouseCoopers reported last month.

That average, of course, includes some of the most expensive new-construction in Canada, on Vancouver’s waterfronts. Cressey, in other words, isn’t asking $100 less than everybody else; just $100 less than a widely circulated number. That $699, in the fullness of time, will prove probably very much in line with other downtown new-home projects that will go on sale this year.

Another reason to welcome Donovan is the efficiencies introduced into building and homes by architect Fo’ad Rafi’i and interior designer InSight Design Group.

When built, the Donovan homes will be the measure of a lifetime of the livable small home for all those who might reside in one or visit, by virtue of a sharply edited material palette and deft observance of the first principle of small-home residency.

Kitchen storage will be defined more by the millworker and less by the metal worker, whose contribution fulfills a cameo, or accent, function.

Refrigerators in luxury new-home projects are inevitably faced in stainless steel. The Donovan fridges, however, will be faced in the same “wood-grain” doors that will face all the other kitchen storage, only wider and higher.

That’s an example of the editing of the homes by interior designer and developer, a decision that reduces material “verbiage” and, consequently, improves “narrative.”

Bedroom storage will be defined by the millworker alone, and not the millworker and drywaller. In most homes, there will be no closet.

Donovan bedroom storage will be located on each side of and above the bed, a design that nestles the bed in an alcove.

That’s an example of the observance of the principle that every item added to a small space or, put another way, every item that takes away from habitable space in a small space, must serve two functions.

Functioning firstly as storage, the millwork flanking and over the bed will function as an extra space, cozy and comfortable and all the more attractive for its improbable or unexpected presence.

The alcoves chapter in The Elle Decor Home (2005) and the introductory remarks in Small Apartments (2005) are the sources for my admiration of the Donovan bedroom-alcoves. (Those who will sleep in the Donovan bedrooms will sleep in good company, the Elle Decor book reports: Couturier Bill Blass passes his New York nights in a bed in an alcove, his guardian angel a big “equestrian bronze of Napoleon.”)

The Donovan building is a neighbourly building. With a height of about 170 feet, the tower is about 130 feet under city hall’s maximum permitted height. But, with a width of about 97 feet, it is seven feet over city’s hall’s ideal width.

Relief from the width recommendation was granted because the lower height will not interfere with the views from neighbouring high-rise homes, actual and anticipated, and will not impose shadowing on them.

The Donovan building is a smartly organized building. Rafi’i and Cressey put the interior amenity space at grade and at the back of the building and the outdoor amenity space four floors above, atop the building’s podium.

A division of amenities that some members of city hall’s Urban Design Panel thought might result in less use of the amenities, it has an admirable purpose, and that is “to keep the residential units off the lane” between Richards and Seymour streets.

The last reason for wanting to share my enthusiasm for Donovan was something Cressey’s Tracy Chong said while she was taking me around the Donovan show home.

“Who doesn’t want to do something about the environment these days?” she said in advancing the new-home project’s geothermal heating and cooling as the one Donovan feature she wants Vancouver Sun readers to know about.

An everyday observation, it is an extraordinary signal, broadcasting an escalation, from the material plane to the moral realm, in the reasons developers and builders give the new-home shopper for favouring one product over a competing product: Here, at Donovan, Cressey is saying, is an opportunity for 152 households to lessen the consequences of their footfall on the environment; ”Help save the world,” Cressey urges visitors to the Donovan website.

For both Cressey and Rafi’i, geothermal is known territory. Rafi’i is the architect of the first geothermally heated and cooled residential tower downtown (until someone comes forward and says not so), Pomaria between the Granville and Burrard bridges. Cressey’s latest tower homes in Richmond will be geothermally heated and cooled.

It is the creation of a sacrifice-free opportunity to embrace a moral choice and do the right thing that is particularly impressive.

Architect and developer are not asking any owner or resident to abandon the automobile. Parking will be secure and plentiful, on three underground levels. Other new-home projects downtown have been challenging sells because of the absence of secure and plentiful parking.

They are not asking any owner or resident to suffer the sleep-interrupted nights of a summer in the city because the apartment windows are all open to admit cooling breezes, but equally admitting street noise, vehicular and pedestrian. The Donovan homes will be air conditioned, hot air geothermally removed and planted in the ground under the building.

Additionally, Cressey is putting actual numbers to the reduction in household operating costs “off the grid” geothermal heating and cooling could generate at Donovan. It expects a Donovan home will be 60-per-cent less expensive to heat and cool annually than homes in which heating and cooling are conventionally powered. “

Donovan is a ”green” opportunity made all the more germane, or richer, by its downtown location. Residents of compact neighbourhoods can walk everywhere, lowering their contribution to greenhouse-gas emissions and, potentially, their cost of living.

As Westcoast Homes columnist Bob Ransford commented last weekend:

”Research has shown that people who live in neighbourhoods in which they can walk from their homes to stores, schools, recreation and public transportation have a much lower cost of living – or more accurately cost of housing — thanks to their lower transportation costs.”

Mike Sasges and his wife will make their next home in a Rafii Architects’ building.

DONOVAN

Location: 1055 Richards, Vancouver

Project size: 10 townhouses, 142 apartments, 18-storey building

Residence size: Apartments, 573 sq. ft. – 998 sq. ft.; townhouses, 1,040 sq. ft. – 1,216 sq. ft.; penthouses, 1,008 sq. ft. – 1,777 sq. ft.

Prices: $396,000 – $2.1 million

Presentation centre: 1295 Seymour, at Drake

Telephone: 604-696-9030

‘Preview’ hours: noon – 5 p.m., Sat – Sun

Web: donovanlife.com

Developer: Cressey

Architect: Rafi’i Architects

Interior design: InSight Design Group Inc.

Tentative occupancy: Fall, 2008

SOUTHERN COMFORT

Eventual partywall neighbours from floors seven to 18 in the Donovan new-home project. The residents of the 22 apartments represented by the plans reproduced here will enjoy protected views to the south.

As a Vancouver city hall commentary on the Donovan property reports: “The remaining four 25-foot lots . . . to the south of this site will not meet the criteria for a tower development.”

The larger B plan (GREEN) will face Richards Street and, to the south, Helmcken Street, and the smaller C plan (BLUE) will face the lane between Richards and Seymour streets and, to the south, Helmcken.

The B plan is a two-bedroom +den, two-bath home, with a total area of 880 square feet. B plan prices start at $579,900.

The C plan is a one-bedroom +den, one-bath home, with a total area of about 715 square feet. C plan prices start at $400,900.

The Donovan show home in the new-home project’s Seymour at Drake sales centre (BELOW, with the elevations’ book opened to the Richards Street elevation) — is a C plan home.

‘SPA’ CONTENT INSTALLED IN DONOVAN ENSUITES

The Cressey development company has selected appliances from a German company, Miele, for the Donovan kitchens.

The gas cooktops, convection ovens and hood fans will be clad in stainless steel, but the refrigerators and dishwashers will be faced with the same pannelling as the doors that enclose most of the kitchen storage.

The doors of frosted glass framed by stainless steel also enclose storage, in some of the homes in the form of a walk-in pantry. Polished granite will top counters; the stainless steel sinks will be mounted under the counters; and the gooseneck design of the faucets will artfully prettify the prosaic (left).

Big showerheads serve the same purpose in the Donovan bathrooms (far left).

Cressey has elected to install “spa” content in the master bathrooms at Donovan.

Residents will shower in stalls of frameless glass and tiled walls and soak in deep tubs.

By contrast, some developers are eliminating tubs from “their” master suites. Others continue to restrict showering and soaking to the tried-and-true shower-tub combination included in the Donovan show home, a C plan home in which there is one but one bathroom (SEE FLOORPLANS, K2).

The treatment of tub skirting is a sweet example of the power of editing. The tub-skirt will be faced in the same porcelain tile that will cover the floors. The skirt is both a literal extension of a material finish and a figurative extension of the space.

The absence of two-bowl vanities in the main bathrooms is compensated for by the presence of vanities that seamlessly incorporate one wide bowl and of drawers underneath that add a storage purpose to all too often dead space.

DONOVAN A THOROUGHFARE ADDITION

When built, the Donovan building will be an assertively symmetrical presence along one of metro Vancouver’s important transportation arteries, Richards Street in downtown Vancouver.

Townhouses will face the street at grade, common-space terraces above.

The Cressey development company will install a children’s play area on the south terrace.

The verdict at city hall? The building is a “well resolved” solution to “the challenges associated with achieving a handsome form with the lower building heights required by the view cone.”

MIRROR ON CEILING

Resolute is probably a good word for the presentation-centre treatment of the building model dwarfing Cressey’s Tracy Chong.

A ceiling mirror permits visitors to see what Cressey and architect Fo’ad Rafi’i have planned for the top of the Donovan building, rooftop terraces for the use of the penthouse-residents below.

The mirror, of course, also makes a big model bigger.

© The Vancouver Sun 2007

Starts for multiple units offset a decline for single detached homes

Michael Kane
Sun

Housing starts in Greater Vancouver were up a whopping 22 per cent in January compared with the same month last year, confounding experts anticipating a modest slowdown as more buyers are priced out of the market.

However, January last year was a relatively slow month and multiple starts tend to be highly volatile from month to month, cautioned Robyn Adamache, senior market analyst with Canada Mortgage and Housing Corp. in Vancouver.

January’s growth is attributed to a 51-per-cent increase in multiple unit construction which offset a 36-per-cent decline in single detached starts. A total of 1,093 multiple units and 234 single detached units were started in the month.

Although demand for new homes is expected to remain strong in the year ahead, Adamache doesn’t expect January’s rate of growth to be sustained.

She said CMHC is calling for about 4.0 per-cent growth in starts in the Vancouver metropolitan area this year, pushing the total above 19,000 compared with 18,705 in 2006 and 18,914 in 2005.

Helmut Pastrick, chief economist with the Credit Union Central, suggested January’s numbers were a “temporary pop upwards.” He expects starts to moderate this year as high costs price out more buyers.

“We have seen sales decline fairly steadily for the past 12 to 18 months which I think is mainly due to the affordability squeeze affecting low-equity buyers, first timers and the like,” Pastrick said.

“It could also be that we are seeing less investor activity but that’s harder to get a handle on. It wouldn’t surprise me if we did see fewer smaller investors buying condos.”

The Greater Vancouver Home Builders’ Association is also expecting a moderate decline in starts this year compared to last year, with prices climbing seven to nine per cent, said chief executive Peter Simpson.

“It will still be a very healthy year in historical terms. You only have to go back to the year 2000 to see when we only did 8,000 housing starts.”

Simpson said three months of poor weather probably accounted for January’s decline in single detached starts. That would jibe with CMHC’s national numbers which show B.C. and Alberta lagged the pace of starts in the Atlantic and Central regions which were buoyed by unseasonably warm weather.

National numbers “blew the roof off expectations” with starts surging to 249,300 units, their highest level since March 2004, Pascal Gauthier of TD Economics said in a release.

Gauthier also expects starts to ease in line with economic fundamentals which, although positive, “don’t support such lofty levels of homebuilding activity.”

Across British Columbia, urban housing starts increased 21 per cent to 2,611 units in January, compared to the same month last year.

© The Vancouver Sun 2007