Noelle Knox
USA Today

If you’d asked housing economist David Seiders at this time last year to forecast the real estate industry’s future, he would have told you to expect “a recovery year” in 2008.

“That outlook has been cut dramatically from what I was saying a year ago,” Seiders, chief economist for the National Association of Home Builders, concedes. He’s slashed his projection for home construction by 35% and says 2008 will be “another down year” for housing overall.

How far down? Most economists caution that their real estate forecasts for this year stand on shaky ground. The depth of the downturn will depend on whether the overall economy slips into recession, how fast and how sharply home prices fall, whether more turmoil rocks the credit markets and how many more foreclosures lie ahead.

“We’re really in a danger zone in terms of overall economic activity,” says Seiders, who sees a 40% chance of recession this year, up from his earlier estimate of 30%.

Mark Zandi, chief economist at Moody’s Economy.com, calls the current real estate recession the gravest since World War II. He expects home sales to hit bottom in the first half of this year, with prices continuing to fall until early 2009.

An even more pessimistic economist, David Rosenberg at Merrill Lynch, goes so far as to warn, “Real estate pricing in general can expect to be in the doldrums through 2012.”

The biggest problem is the glut of homes for sale — more than 10 months’ worth. And about 2 million of those homes (about 2.6%) are vacant, with banks or builders trying to get them off their hands.

The number of vacant homes is expected to rise further this year because a record number of homes are entering foreclosure. And hundreds of thousands of homeowners with subprime, adjustable-rate loans will face higher monthly payments. For some, it will be the last financial straw.

Meanwhile, many would-be buyers are having trouble qualifying for loans.

Half of senior loan officers surveyed by the Federal Reserve in October said they had tightened their standards from July. Gone are loans for people who have trouble paying their bills on time. Gone are mortgages for 100% of the home price. Gone are loans requiring no proof of income or assets.

The stricter rules will deliver an especially severe punch to such areas as Arizona, California, Nevada, Florida and in and around Washington, D.C., and Manhattan, where those types of mortgages accounted for about 60% of purchase loans last year, according to Economy.com.

“A lot of (buyers) haven’t come to the realization that the subprime market no longer exists,” said Ritch Workman of Workman Mortgage in Melbourne, Fla. “Mortgage brokers are turning away more and more borrowers.”

That isn’t likely to change. The Federal Reserve last month issued hand-slapping rules for all lenders and mortgage brokers to end the riskiest lending practices. The new rules will take effect early this year, after a public comment period.

For buyers who have built up stellar credit and lots of cash in the bank, there are loans aplenty. Interest rates also remain historically low, and falling prices in many areas are making homes more affordable for more families.

In such a risky market, what’s a buyer or seller to do? What follows are some strategies for buyers, sellers and homeowners that will help, no matter how grim the housing recession gets.

Here are some strategies for sellers, buyers and homeowners in a high-risk real estate market:

Buyers

Get that credit score up

If you’re among the would-be buyers still finding themselves locked out of the market:

•Raise your credit score by paying your bills on time. Don’t open any new credit card accounts or buy a car with a new loan. Don’t buy anything, such as furniture, with a “no payments or interest for 90 days”-type of plan. With such plans, even if you pay off the entire amount in three months, your credit score will still take a hit.

•Forget belt-tightening; get a full-fledged corset. Most lenders now require buyers to put down at least 5% of the purchase price (that’s about $10,500 on the national median home price of $210,200). The main exceptions are loans insured by the Federal Housing Administration, which require only 3%, and loans guaranteed by the Department of Veterans Affairs, which may cover the entire purchase price.

•Don’t change jobs, if you can help it, until you’ve been formally approved for a mortgage. Lenders increasingly see job stability as a vital factor in creditworthiness.

•Recognize that you have the upper hand in bargaining. Consider asking the seller to help pay for any repairs, or to help pay for closing costs or to cover any homeowners’ association fees for a few months. If it’s a new home, ask the builder for even more freebies than it offered to get you in the door.

Sellers

Wait if you can or spruce it up

Lots of sellers are getting a harsh refresher in a lesson from Economics 101: the relationship between supply and demand. A record 4.3 million existing homes are for sale. In areas where there’s too much supply, prices must fall.

This week, economists for Freddie Mac released their latest economic forecasts, which show home prices falling nearly 8% this year and not rising again before the end of 2009.

Prices in 11 major metro areas posted record declines in October, led by Miami, Tampa, Detroit and San Diego, according to the S&P/Case-Shiller index.

More than 1 million homeowners nationwide are expected to lose their homes through foreclosure. Lenders, trying to cut their costs of maintaining and marketing homes, typically sell foreclosed homes for 20% below the market price.

“I tell sellers if they don’t need to sell right now, just remove their home from the market,” says Ron Shuffield of Esslinger-Wooten-Maxwell Realtors in Miami.

All of which means that to sell your house, you probably need to get it in near-perfect condition, price it right and market it aggressively.

Of course, not every U.S. real estate market is in the tank. Areas that never saw head-spinning price increases to begin with aren’t seeing big price drops now. In the third quarter, government data showed that prices actually rose in 204 of the 287 metro areas surveyed. And in nearly every city, there are neighborhoods, or coveted condo developments, that seem immune to local and national trends.

But for most homeowners who need to sell, here are some tips:

•Start your spring cleaning now. Every surface should sparkle. Every groove should be dirt-free. Above all, wash the windows. Declutter the house by packing up family photos, stacks of paper, medicine bottles on the bathroom counter, the books overflowing the bookcase. Hide trash cans, ashtrays, the laundry hamper, the kitchen sponge, the cat’s litter box and food dishes.

•Paint. Dark walls tend to make a house look smaller. Walls should be off-white or have earthy tones if the room draws lots of light. Real estate agents suggest that the carpet be light beige. Open or take down curtains, so the rooms will absorb as much light as possible.

•Most rooms contain too much furniture, which makes rooms look smaller. Reduce the number of pillows on the couch. Remove afghans and blankets. Scale back the number of paintings on the walls. Remove the leaves from your dining table and put no more than four chairs around it. Reduce the number of dishes in the china cabinet, leaving only a few.

•Keep the lawn mowed and the edges neat. Trim shrubs, especially around windows. Put flowering plants near the front door. Does the house need painting? Consider painting or staining the front door; it’s one of the least expensive ways to spruce up the entry. If there’s furniture on the porch, make sure it isn’t plastic but rather good-quality wicker or wrought iron. Power-wash or stain the deck. Remove or hide old cans and bottles, auto parts, boats and RVs.

•What’s your marketing strategy? If using an agent, make sure she or he is using the Internet as a major part of the advertising campaign. Tempt buyers by offering to help pay closing costs. Or better still, offer to lend the buyer part of the money they need, with what’s called “carry-back financing.”

Homeowners

Check your documents

Dig out your mortgage documents and triple-check what kind of loan you have. Specifically, you want to know whether it has an adjustable interest rate, how often the rate can rise and the maximum it can rise to. Is there a penalty for paying off the loan early? If so, when does the penalty expire?

Nearly 2 million homeowners have subprime, adjustable-rate mortgages (ARMs) that will reset before July 2010. The average borrower will see monthly payments jump by about $350, to $1,550. Already, one in five homeowners with a subprime ARM was behind at least one payment at the end of the third quarter, according to the Mortgage Bankers Association.

Last month, Treasury Secretary Henry Paulson announced a deal with lenders that would help thousands of homeowners with subprime ARMs. Under the plan, homeowners who got their loans between Jan. 1, 2005, and July 31, 2007, would either be put on a fast-track program to refinance their loan to a fixed-rate mortgage at a lower rate, or have their rate frozen for five years.

But there are many exclusions to the program. In addition, millions of borrowers with prime ARMs aren’t eligible. Neither are most of those with exotic adjustable-rate loans that let them pay only the interest portion or even less each month.

Dan Przewlocki is one of them. He refinanced his home outside Detroit in 2004, so he doesn’t qualify for the rescue plan. Przewlocki, 52, got what’s called an option-ARM. It lets him choose among payment options each month. The less he pays, the more the principal balance grows.

He’s been paying the highest option and hasn’t missed one payment. Yet his rate has been rising nearly every month, catapulting Przewlocki’s monthly payment to $2,700 from $1,200 initially.

Washington Mutual, his lender, won’t refinance the $310,000 loan because the home’s value has sunk below the value of the loan, to $250,000, Przewlocki said.

He works in an auto maintenance plant and looks for handyman jobs and temporary work at Kelly Services. But his house payments eat up nearly 70% of his gross income. And Przewlocki, a tech sergeant in the Air Force reserves, knows he’ll fall behind on his payments once he’s deployed to the Middle East this year.

“If the mortgage company wants to take the house,” he says, “the keys are going to be on the kitchen table.”

Sara Gaugl, a spokeswoman for Washington Mutual, says the amount of Przewlocki’s loan and the current value of his house “put him out of scope for a refinance under WaMu’s credit guidelines. However, we will continue to work with Mr. Przewlocki to determine if there are other options available to him.”

If you’re in a similar situation, or think you might be soon:

•Contact your lender as soon as you know your payment will be late. If you want free credit counseling, you can also call the Homeownership Preservation Foundation at 888-995-HOPE (888-995-4673).

•If you can’t renegotiate the terms of your loan, and your home is worth less than you owe, consider a “short sale”: If your lender approves, you can sell your property at an agreed upon price, and your lender will forgive the remaining balance on your mortgage.

That’s much better than wrecking your credit with a foreclosure. And under a law signed by President Bush last month, sellers no longer have to pay taxes on the amount of the forgiven debt. The law is retroactive to Jan. 1, 2007, and is scheduled to expire at the end of 2009.

Even if you don’t keep your New Year’s resolution to shed 20 pounds, getting out from under an unaffordable mortgage will take a huge weight off your shoulders.

Prices in many areas have doubled since 2002

Derrick Penner
Sun

The Real Estate Board of Greater Vancouver and the Fraser Valley Real Estate Board use different standards for setting their pricing figures. REBGV defines a “benchmark” home as a “typical property” sold within Metro Vancouver, whereas FVREB calculates an “average” price from all sales in North Delta, Surrey, White Rock, Langley, Abbotsford and Mission.

Forecasters who had expected Lower Mainland real estate markets to moderate during 2007 instead saw sales rebound and price increases continue at rates that have doubled values in many markets over the past five years.

Greater Vancouver realtors processed 38,050 sales through the Multiple Listing Service in 2007, a figure 7.2 per cent higher than the previous year, but still 6.1 per cent off the record in 2005.

Prices were also up between 11.4 per cent on single-family homes for the year, and 14.4 per cent on condominiums.

Across the Real Estate Board of Greater Vancouver’s territory, the so-called “benchmark” the price for a typical single-family home hit $730,399 by December, almost 96 per cent higher than five years ago.

The benchmark townhouse price of $456,941 is slightly more than double what it was five years ago, and condominiums, with a $377,579 benchmark in December, are up 111 per cent.

Fraser Valley realtors processed 16,547 MLS sales in 2007, three per cent more than in 2006. Prices for single-family homes were up 11.4 per cent, and condos were up 14.9 per cent.

In the past five years, the average single-family house price in the valley has increased almost 92 per cent to $520,317. The average Fraser Valley townhouse price has risen almost 75 per cent to hit $322,578, and average condominium prices are up 93 per cent to $216,990.

Higher prices keep pushing buyers into smaller or more suburban properties. First-time buyers are going for condominiums, while people looking for more space are buying further away from Vancouver‘s core.

Banker Jeff Starchuk was among the latter, opting to trade an ordinary bungalow in Burnaby and a miserable commute to North Vancouver for a job transfer and an executive-style house in east Abbotsford.

“It was pretty well a straight-across trade,” Starchuk said of the new, 4,000-square-foot $650,000 house in a gated community he and his husband Grant Berjian were able to pick up.

The couple was perhaps disappointed to move out of Greater Vancouver, “but when you look at what you get [for housing] in relation, it’s probably not that big a sacrifice, unless I wanted to be downtown every day.”

Since taking possession two weeks ago, Starchuk has noticed that many other people are making the same trade. When he walks his dog at 6 a.m., he sees a stream of cars from his neighbourhood heading for the freeway.

“It’s young families, it’s people who want more for their money and want a lifestyle on the weekends that [doesn’t involve] tons of traffic,” Starchuk said.

Robyn Adamache, an analyst at Canada Mortgage and Housing Corp., said the 2007 sales numbers show that even in the Fraser Valley, prices seem to be pushing more people out of houses, with the region showing about five per cent fewer single-family home sales but almost nine per cent more townhouse sales and seven per cent more condo sales.

“So, maybe they’re moving to a larger type of multi-family as an alternative to single-family housing to get a bit of land,” Adamache said.

Adamache added that Lower Mainland markets did see prices begin to moderate, which she expects to continue through 2008, with the annual increase in the nine-per-cent range.

Cameron Muir, chief economist for the B.C. Real Estate Association, noted that most sales and housing starts in the Metro Vancouver area are either condominiums or townhouses, which is also a reflection of how buyer are adjusting their sights. “While there are some really high [prices] at the high end [of the market], there are a lot of condominium apartments being built at more affordable price points,” Muir said.

“And they’re making up a large number of overall sales.”

That shift toward higher density housing, Muir said, helped markets sustain higher levels of sales in an environment of rising prices, along with general consumer confidence and continuing changes in the mortgage markets.

Muir noted that many first-time buyers are leveraging their buying power with 40-year-amortization loans, which lower monthly payments.

Adamache added that there was a mid-year rush of buying in 2007 sparked by a bump up of mortgage rates.

Forecasters predict a relatively stable 2008, with lower sales and slower price increases, but Muir noted some uncertainties, including the effect of B.C.’s forest industry downturn.

 

© The Vancouver Sun 2008

Suzanne Fournier
Province

Housing sales rode a wave last year that made it the second-best year ever recorded by the Real Estate Board of Greater Vancouver.

There were 38,050 sales of residential attached, detached and apartment property sales in the city of Vancouver and surrounding suburbs — a 7.2-per-cent increase from 2006, the board said yesterday. The figures are a 6.1-per-cent decrease from 2005, a banner year which set the record of 40,530 sales.

Board president Brian Naphtali attributed the soaring number of sales to B.C.’s economic strength.

The benchmark price for a 2007 sale in Greater Vancouver was $543,401 for a detached property and $456,941 for an attached home. The benchmark price for an apartment in Greater Vancouver was $377,579.

Sales of homes in the Fraser Valley also rose last year, with townhomes and condominiums proving popular with young families seeking affordable housing.

There were 16,547 sales of homes of all types in the Fraser Valley last year, up one per cent from 2006. Townhomes and apartments made up 44 per cent of residential sales, up three per cent from 2006.

“Many of our clients are families with young children looking for more affordable options,” said Jim McCaughan, president of the Fraser Valley Real Estate Board.

© The Vancouver Province 2008

 

Province’s assessments increase by 16 per cent to top $940 billion

Derrick Penner
Sun

Another record year of construction and continued high demand for property in 2007 pumped up the assessed value of B.C.’s real estate by 16 per cent to top $940 billion, the B.C. Assessment Authority says.

BC Assessment mailed out property assessments to property owners Dec. 31, and on Wednesday released several reports on property values around the province.

BC Assessment said new construction accounted for some $21.6 billion of the increase, and the authority added 36,905 properties to B.C.’s property rolls, which now total 1.82 million addresses.

That means most of the increase in provincial property values, some $110 billion, represents inflation in real estate markets that have risen for the last seven years.

“Obviously we’ve had strong economic growth so we continue to see fairly strong growth in pretty well all aspects of real estate markets across the province,” Mark Katz, area assessor for the South Fraser region in the Lower Mainland, said Wednesday.

Across the Lower Mainland, Katz said property assessment increases in the range of 10 to 20 per cent were not uncommon.

He added that average assessment increases can sometimes be misleading because they don’t capture the range of property values across a market. He said averages do “generally give you a good idea of what the trends are.”

And in the Lower Mainland, construction of the Canada Line rapid-transit system has had a significant impact on commercial property values, Katz said.

BC Assessment estimates property values based on market values as of July 1 every year.

While assessments don’t necessarily capture current market values, they are indicative of what the hot markets have been over the past year.

B.C.’s 2008 property rolls revealed that rising real estate values have turned 11,702 new British Columbians into property millionaires.

Assessments also revealed that rural playgrounds of the Kootenays are seeing some of the biggest increases in property values, with the rural area around the tiny village of Nakusp leading the way.

Nakusp, on the shores of Upper Arrow Lake north of Nelson, saw the value of its 2008 property roll increase 53 per cent from the previous year to reach $924.6 million.

That rise wasn’t surprising to Cameron Muir, chief economist for the B.C. Real Estate Association. He said there has been a growing trend of Albertans, and retirement-oriented buyers gravitating toward the Kootenays and Okanagan.

“They tend to be a little bit more flush with cash because they’re pulling equity out of their homes,” he said.

Jim Norton, BC Assessment’s area assessor in Cranbrook, said Alberta buyers have been flocking to the golf courses, ski hills and other recreational amenities of the east Kootenays for some time. He said that around Radium Hot Springs and Invermere, up to 70 per cent of properties are now owned by Albertans.

“Now, because [the east Kootenays] are getting so pricey, they’re going further afield,” Norton added.

Dennis Hickson, deputy assessor for the Nelson/Trail region, added that the increase in assessments for rural Nakusp and other communities perhaps look more dramatic than they are because property values have been very low relative to other Kootenay communities.

Hickson pointed to one example, a waterfront house on Upper Arrow lake, which was assessed at $479,000 for 2008 versus $268,000 in 2007. However, in August, the property sold for $549,000.

In another case, a house on five acres upland from Upper Arrow Lake was assessed at $213,000 for the 2008 roll, up substantially from $141,000 in 2007. It sold for $240,000 in November.

“There’s a lot of catch-up going on in the entirety of the west Kootenays,” Hickson said.

Those relatively low values, he added, are proving attractive to Albertans.

“Now, I think they are willing to drive an extra hour or so,” Hickson said.

However, for Nakusp, an area suffering through the forest industry’s downturn, rising property values are still a dislocating element, says Paul Peterson, director of the Regional District of Central Kootenay that represents the area.

“People are buying [property in Nakusp] as a second, third and sometimes even fourth home, and they don’t rent them out,” Peterson said.

That makes it difficult for the people who typically rent, and is “devastating” for low-income residents of the region, forcing them out.

“A lot of good people just don’t happen to have a lot of money, and they’re getting left out in no man’s land,” Peterson said.

© The Vancouver Sun 2008

 

More Metro Vancouver neighbourhoods join the $1-million club

Randy Shore
Sun

Seven neighbourhoods in Metro Vancouver have joined the exclusive one-million-dollar club, according to the B.C. Assessment Authority.

A typical home on a 33-foot lot on Vancouver‘s west side is now worth $1 million, achieved on the strength of a 20-per-cent average increase in the assessed value of homes in that neighbourhood.

Overall, the assessed value of B.C. real estate climbed by 16 per cent to top $940 billion, according to assessment authority figures released Wednesday.

Some of the biggest increases in property values came in the Kootenays, where retirees and cash-rich Albertans are buying up land.

In Metro Vancouver, a handful of neighbourhoods in Surrey, White Rock and Burnaby joined Vancouver‘s west side in passing the $1-million threshold for a typical home, once the exclusive domain of West Vancouver and Whistler.

The newcomers to the club include Morgan Creek and Fraser Heights in Surrey, Central West End and South Slope in White Rock, and Kensington and Deer Lake in Burnaby.

The tiny neighbourhood of Tsawwassen Beach is in even more exclusive territory. A typical home on the beach facing the Tsawwassen ferry terminal averages more than $2 million.

British Columbia now boasts 49,729 million-dollar-plus homes, compared with 38,027 last year.

Assessed values are based on recent sales in the area and the size, age and condition of the building as well as characteristics such as location and view. Values are stated as of July 1, 2007.

The assessed value is used to determine property taxes based on local municipal tax rates. If your assessment increase is close to the average in your municipality, your taxes should remain stable.

Higher than average increases can lead to higher taxes.

“Ten to 20 per cent are the goalposts for residential property increases in Vancouver, the North Shore and across the province,” said Vancouver area assessor Jason Grant.

As in the past few years, Whistler bucked the big-gains trend, though that market is now showing signs of life. Pemberton posted an increase of 2.4 per cent and Whistler 4.1 per cent. By contrast, residential values in Squamish rose 15 per cent.

“Whistler and Pemberton for the first time in four years have shown an increase in assessed value,” said Grant, who noted that both towns posted huge price gains in the late ’90s and the early part of this decade.

Waterfront continues to be one of the most sought-after characteristics in a home, Grant said.

“Waterfront has proven to be a valuable commodity for the past several years and prices generally lead the higher end of the range,” he said.

Surrey-White Rock assessor Mark Katz adds golf courses as a potential price-driver.

“Sometimes in south Surrey if a home is on an acreage and prices are going up 10 to 20 per cent per year, it doesn’t take much to get you over the million-dollar mark,” Katz said. “Morgan Creek has always been a strong market with a nice setting and it surrounds a golf course.”

Morgan Creek was among the fastest appreciating neighbourhoods in Surrey, with an 18-per-cent increase.

“There’s only so much waterfront and a lot of people are competing for it,” he said. But whether it is proximity to a golf course or the ocean, “location continues to be a primary price driver.”

Katz said developers trying to maintain an inventory of land are bidding prices up in Surrey so they can build compact housing like condos, which compete well in price with similar homes in Vancouver. “There’s a lot of townhouse development and small-lot homes being built,” he said.

Vancouver‘s commercial real estate values are a noticeable blip in an otherwise unremarkable market, rising by 26 per cent, said Grant. Residential property is up about 12 per cent across the City of Vancouver, a slower pace than last year’s 25-per-cent increase.

Shawna Rogowski, research director for Colliers International, says rents for commercial real estate in the City of Vancouver “have gone through the roof and no new supply is coming on line.”

The commercial vacancy rate fell to a seven-year low in the third quarter of 2007, according to Colliers market research.

“A lot of companies are moving to the suburbs,” Rogowski said. Microsoft didn’t even bother coming downtown; it just set up shop in Richmond, she noted.

Lower costs, lower rent, and free parking top Rogowski’s shopping list for businesses seeking cheaper digs in the suburbs.

The city’s policy of encouraging mixed-use and residential development on the downtown peninsula has worked “too well,” Rogowski said. “Businesses are being crowded out.”

“We now have people living downtown and commuting to the suburbs to work,” she said.

– – –

ASSESSMENTS ONLINE

To check property assessments on the Internet.

1. Go to www.bcassessment.ca

2. Click on Assessments and Sales by Address.

3. Fill out required fields. Be careful to use the Street Type field to indicate whether your address is on a road, avenue, crescent etc.

4. Click on Get Assessments by Address to compare your assessments with your neighbours.

5. Click on Get Sold Properties to locate properties in your neighbourhood that sold during the past year.

For those who do not have Internet access, call your local BC Assessment office. Municipal government offices and libraries will also have paper copies of property assessment rolls.

Source: BC Assessment.

FIGHTING ASSESSMENTS

How to appeal an assessor’s decision.

Homeowners who feel the big increase in their property assessment doesn’t really reflect its true value may be able to have it reconsidered, Mark Katz, the BC Assessment area assessor for the South Fraser region, says.

– Calling your local BC Assessment office is the easiest way to start.

“Talk to us first,” Katz said. “If there is an issue, we may be able to resolve it and it may involve us making a recommendation to change the assessment.”

– If homeowners cannot have the complaint resolved by appealing to the assessor, they can file for an independent review by the Property Assessment Review Panel.

Review request forms are available on the BC Assessment website, www.bcassessment.ca or from your local BC Assessment office. The deadline to file for a review is Jan. 31.

– Katz added that homeowners still unhappy with the valuation can appeal review decisions to the Assessment Appeal Board.

“I would say the majority of issues are resolved without going to the review panel, and the majority [of review-panel cases] are successfully resolved at the panel,” Katz said.

© The Vancouver Sun 2008

Most properties up more than 10%

Damian Inwood
Province

Homeowners in the Vancouver region will see increases in their property assessments of between 10 and 20 per cent this year.

But property taxes will likely increase by a smaller percentage, officials say.

A B.C. Finance Ministry spokesman said yesterday an increase in homeowner-grant eligibility from the current $950,000 threshold is under consideration to offset the jump in assessments.

“The entire 2008 provincial assessment roll has increased by 16 per cent over the 2007 roll,” said Jason Grant, area assessor for the Vancouver Sea-to-Sky region.

“Most of the increases in Vancouver fall in the 10- to 20-per-cent range for single-family residential and strata properties.”

The biggest leap is in Stewart, in northwest B.C. — an average jump in assessments of 56.29 per cent.

At the bottom of the table is Tumbler Ridge, which saw assessments drop by 7.57 per cent.

Metro Vancouver saw average increases ranging from 8.6 per cent in Burnaby to 13.8 per cent in West Vancouver in figures released yesterday.

– In North Vancouver‘s upscale Delbrook area, the average single-family home went up $105,000, from $778,000 to $883,000.

– West Vancouver waterfront increased on average $443,000 last year, from $3.79 million to $4.23 million.

– On Vancouver‘s west side, a single-family home on a 33-foot lot went up $187,000, from $869,000 to $1,056,000.

– A single-family home in Abbotsford rose on average from $388,000 to $457,000, while a Cloverdale three-bedroom condo increased from $306,000 to $338,000.

– In Kelowna, a single-family home in the Mission district went from $427,000 to $506,000, while a home in the Kamloops North Shore area went up from $216,700 to $264,600.

“Keep in mind, Vancouver increased just over 12 per cent this year,” added Grant. “That’s half what the increase was last year for the residential rate. It’s still going up at a significant pace but just less so, relative to previous years.”

He said Whistler and Pemberton stand out in that it’s the first time in four years that residential assessments there have jumped.

Whistler assessments increased 4.06 per cent, while a single-family home in Pemberton rose by an average of seven per cent.

Finance Ministry spokesman Robert Pauliszyn said officials are reviewing the assessment data as they consider increasing the homeowner-grant threshold.

“In each of the last four years, the threshold of the homeowner grant was increased in response to higher property values,” he said.

“So the Ministry of Finance will determine whether or not adjustments to the homeowner-grant program are required this year.”

That decision should be announced by mid-January.

Last year, Finance Minister Carole Taylor boosted the maximum assessment eligible for the homeowner grant by almost 22 per cent, from $780,000 to $950,000.

B.C. Assessment spokesman John Barry said a 10- to 20-per-cent increase in assessments should not translate into the same level of increase in property taxes.

He said property-tax increases are decided when municipalities set their local mill rates, in order to meet budget needs.

Homeowners can check their assessments at www.bcassessment.ca.

© The Vancouver Province 2008

 

Difference between place to live and investment

Ray Turchansky
Province

The U.S. housing meltdown and cooling of the red-hot housing markets in parts of Canada have many investors thinking now is the time to jump into real estate.

It might be a little early to act.

In a recent presentation to the Canadian Pension & Benefits Institute, economist Gary Smith of Alberta Investment Management trotted out the S&P Case-Shiller index, which measures the difference between a home’s current and previous selling prices.

The index showed that, in the U.S., during the 21-month period to last September, average home-resale prices fell 25.5 per cent in Canadian dollars in Detroit, 23.4 per cent in San Diego, 20.6 per cent in Phoenix and 20.5 per cent in Las Vegas. Prices were down in 15 of 20 major American cities. Only Seattle bucked the trend, with prices slipping just 0.3 per cent in Canadian dollars and actually rising 16.7 per cent in greenback terms.

Given falling prices, a strong Canadian dollar and historically low mortgage rates, this seems like a good time to buy that vacation property in Arizona.

Or, with house prices falling in Vancouver and Edmonton while flatlining in Ottawa and Montreal, it’s tempting to purchase that rental property you’ve always wanted.

Analysts think both the U.S. Federal Reserve and the Bank of Canada will lower interest rates at least once and maybe as many as three times during the first half of this year. Then rates may stabilize or even creep up a bit.

The U.S. Mortgage Bankers Association predicts that 1.35 million homes will have entered foreclosure during 2007 and 1.44 million will do so in 2008.

In Vancouver, the price of an average single-family home has stalled at about $750,000.

Calgary‘s average dropped from $505,900 in July to $452,300 in October, but rebounded to $462,100 in November. Toronto is at nearly $400,000, while Edmonton prices have dropped from $426,000 in May to $376,300 in November. Ottawa‘s average is about $275,000; Montreal‘s $245,000. An Edmonton realtor said that back in May “listings were gold,” but now “buyers are gold.”

Hendrickson Financial notes that “it is evident that home buyers in Edmonton and Calgary who bought in the spring of 2007, with less than five-per-cent down payments, already have less equity in their homes than the balance owing on their loans.”

Portfolio manager Harland Hendrickson adds: “We firmly believe that we will see real-estate prices continuing to move down in Edmonton as well as in all North America over the next year or two, at least. This is not the time to be holding onto investment real estate.”

Buying a home to live in, he says, is another matter.

Looking forward, Royal LePage expects house prices to rise 3.5 per cent in Canada during 2008, led by Regina at 15.4 per cent and Winnipeg at 11.4 per cent. Increases of only four per cent are expected in Vancouver and Calgary, and one per cent in Edmonton.

If you’re buying to invest in a second property, the optimum time may be next summer or fall.

— Edmonton Journal

© The Vancouver Province 2008

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