USA Today

NEW YORK (AP) — An industry group says pending homes sales increased unexpectedly in April to the highest reading since October, but are still off more than 13% from a year ago.

The National Association of Realtors said Monday that its seasonally adjusted index of pending sales for existing homes rose to 88.2 from a March reading of 83.0, the index’s low. The index stood at 101.5 in April 2007.

Economists polled by Thomson/IFR had predicted the index would remain steady at 83.

A reading of 100 is equal to the average level of activity in 2001, when the index started.

The April index in the West climbed 8.3% from March and is 4% higher than a year ago. In the Midwest, the index jumped 13%, but is still lower than in 2007. The South posted a 4.6% gain, while the Northeast index declined 1.9%.

NAR Chief Economist Lawrence Yun noted that pending sales contracts have ticked up in areas with the largest price declines such as Detroit and Las Vegas.

“Bargain hunters have entered the market en masse,” he said. “Sharp price reductions are leading to a quicker discovery of price equilibrium points.”

Yun forecasts that the median price of an existing home will drop 8.4% in the first half of the year before stabilizing. In 2009, prices will rise 4.4% to $213,900, he predicts.

Existing home sales this year are expected to total 5.40 million and then increase to 5.74 million next year, Yun said.

“We are seeing an acceleration in foreclosures. As foreclosures have taken off, they put pressure on prices. Banks have become more aggressive with sales on homes they have foreclosed,” said Christopher Low, chief economist at FTN Financial in New York.

Low said the pickup in pending home sales could be a sign that the housing market could soon be stabilizing.

“Sales will stabilize in the next few months and that will set the stage for inventories turning to normal sometime next year and maybe even for prices to appreciate a bit,” he said. “For now, prices will continue to fall. There is still an inventory overhang that will take 18 months to work through. The end game of the housing bust is near.”

Maintaining doors, windows

Tony Gioventu
Province

Dear Condo Smarts: Our strata council is deeply divided on the opinion of who is responsible for maintaining and repairing doors and windows. Created in 2004, the strata passed a bylaw that declared the windows and the doors on the exterior of the building limited common property.

We did this to make owners responsible for doors and windows on their own units. Several have indicated, however, that they have no intention of maintaining and repairing their windows, especially those on the fourth floor that have no balcony next to them.

They have rightly pointed out that maintaining those windows from the exterior will require a tradesperson to mount a ladder, a lift or scaffold via the common property and landscaping; this work could lead to damage to areas or units in the building and they don’t want to assume liability for such possible damage. So we’re locked in a dispute. The exterior of the building is not being maintained and several owners are threatening court action if we don’t get on with maintenance.

Is there a solution?

— JF, White Rock

Dear JF: Here are the technical basics. To determine how the property is defined in your strata, I reviewed your registered strata plan and common amendments at the Land Title Registry.

In your plan (and warranty documents), the exterior of your apartment-style strata building is clearly common property.

The windows are outside the dividing boundary between the strata lot and the exterior, and the warranty documents clearly identify your windows as part of your common-property warranty for the building envelope.

A very common error made by strata corporations is assuming they can convert common property to limited common property simply by passing a new bylaw. That is incorrect.

The strata must first pass a resolution that creates the limited common property (LCM) and include a sketch plan that satisfies the registrar of Land Titles, defines the areas of LCP and specifies to which lot the LCP is allocated.

Then it all has to be filed with the Land Title Registry. Clearly, your strata corporation has not met those requirements, casting doubt on the enforceability of the bylaw.

From a practical perspective, your strata owners need to rethink their decision. One of the main reasons people live in strata buildings is so they can share the duties of maintenance and thereby benefit from lower costs.

Another important point is that by controlling common- area repairs, a strata corporation can ensure that the entire building exterior is protected.

You should also read your warranty conditions.

The warranty contract includes exterior doors and windows as part of the building-envelope coverage under the first five-year period.

By transferring the responsibility for maintenance from the the corporation to the owners, it is quite possible you may have jeopardized your warranty coverage.

Contact your warranty provider and seek legal advice.

© The Vancouver Province 2008

 

While every unit is unique, efficient layouts are common to all

Kate Webb
Province

Details, baby, details: They’re what make today’s modern home more than just glossy magazine fodder.

Spruce, a condo development soon to be planted at the intersection of Broadway and its namesake street, is all about seeing the trees as well as the forest.

For starters, the 11-storey tower, slated for completion in fall 2010, has downsized the archetypal open-concept condo layout from three zones (cooking, eating, living) to two.

In the culinary corner, a built-in dining-table option has replaced the traditional kitchen island — which usually necessitates a separate dining area elsewhere — leaving breathing room in the living room. This convenient setup is esthetically bolstered by soothing horizontal lines and high-quality appliances built into the cabinetry.

“I personally like clean, modern and functional for several reasons,” says Merike Lainevool, interior designer for the Spruce project. “One, it’s a small space, so I wanted to focus on horizontal lines instead of vertical ones to make it restful for the eye. And, two, a nice, clean and simple background allows the owner to show off their personality.”

A translucent, pale bottle-green glass wall separates the living room from the bedroom in all smaller units, giving them the bright, airy feel of a sheltered outdoor sanctuary.

“In the smaller suites, if we had divided the rooms with drywall, you’d be interrupting the light and the large flowing space,” explains Lainevool, admiring the overheight windows that span the length of the display suite and in most units will feature views of English Bay. “You’re just surrounded mostly by glass.”

The kitchen and bathroom — the litmus test for the true style of any home — are full of other smart features to make the homeowner’s life easy and peaceful.

A cantilever shelf (meaning it’s supported only at one end) comes standard in the kitchen-and-dining area as a clever landing for salad bowls, plates or knick-knacks, as well as a pull-out utensil drawer that could foreshadow the end of table-setting.

“It’s almost laid out like a well-thought-out sailboat, where everything is in reach,” says Lainevool.

The electric AEG glass cook-top stove comes with a multi-function oven, and the standard built-in dishwasher is completely disguised between the various roomy, European-inspired cabinets and drawers.

The stone counters are made of an engineered quartz about 10 times harder than granite, and frame an enormous, undermounted sink with pull-down faucet that make a symbiotic statement about the intersection of design and functionality.

Says Lainevool: “You can put a couple of small dogs in there and give them a nice shampoo, or wash a couple of Dungeness crabs and put them on the stove.”

(One can only hope not in that order.)

There are two, label-free colour schemes to choose from: one exploring the lighter side of textiles, using a white, light grey and warm oak palate, and the other showcasing the virtues of contrast and depth, featuring white and dark grey accents and charcoal-stained oak floors.

The kitchen’s über-functional theme is mirrored in the bathroom, both in the soft-close toilet seat — all the kitchen cupboards are soft-close, too — and in the ceiling-height mirror itself.

“It’s all about quiet and peaceful. You can’t slam the toilet seat and you can’t slam the kitchen drawers,” says Lainevool. “And the mirror really maximizes the light.”

Other bathroom bonuses include the dual-flush toilet and ample under-sink pull-out storage.

“I love drawers rather than doors because you’re pulling the stuff out to you,” Lainevool explains.

All the condos have glass-enclosed balconies, and three of the top-floor penthouses also have elegant outdoor spiral staircases leading up to 600-plus-square-foot rooftop patios.

Spruce’s Vancouver address is both exclusive — with just 49 units in total and five unique units per floor — and perfectly central, boasting instant access to transportation in any direction the wind blows.

“You’re close to the Cambie Bridge bus line and you have your South Granville shopping within walking distance,” says Lainevool, adding that the art gallery district is also just a short jaunt away.

The presentation centre just opened and there are 40 suites left, so better get moving if Spruce seems like a place you might want to plant some roots.

THE FACTS

What: Spruce, an 11-storey, 49-unit condo tower.

Where: 1096 West Broadway, Vancouver.

Developer: MBA Inc. and JMR Development

Sizes: One bedroom, one bedroom-plus-den and two bedroom, from 532 sq. ft. to 1024 sq. ft.

Prices: $356,000 to $1.072 million

Open: Presentation centre and partial display suite open from 12 to 3 p.m., Saturday to Thursday at 1595 West Broadway.

More info: www.spruceliving.com

© The Vancouver Province 2008

 

Canadians can take advantage of a flood of empty houses

Ray Turchansky
Province

EDMONTON — Brad Willock, a vice-president with RBC Asset Management, says economies and stock markets are being driven by two major events — the floundering United States housing market and movement of people in China from farms to cities.

In his annual presentation for the Salloum Wealth Management Group, Willock said that the U.S. housing market is “the epicentre of the world’s issues right now.” He said protracted low interest rates after the tech bubble broke and plunged the U.S. into recession in 2001 caused Americans to buy all sorts of houses, and banks recklessly bundled mortgages and dealt them off to investors.

“We had people working for us down in the U.S. call up using a fake name and fake address trying to get as much as they could from a mortgage dealer, and the best was $247,000 in 13 minutes,” said Willock.

“Banks there did not care whether they got it back, because they passed the mortgage on to an investor — a hedge fund, pension fund or insurance company.

Willock said RBC estimates companies will have to write off about $650 billion in bad mortgages, two-thirds in the U.S. and one-third global. He added that a little more than half has been accounted for already, and “typically the stock market doesn’t go lower after you’ve reached the halfway point.”

But stalled U.S. home sales are slowing that economy.

“Turnover is the single greatest generator of economic growth in terms of consumer spending. When you sell a home, two-thirds of the value is set free into the economy; as a seller you buy something else which regenerates fees, and the person who purchases the home gets a basement redone or a fence put up.”

He said house prices, historically three times median income around the world, had risen to 4.2 times. But with the flood of vacated houses in the U.S. expected to peak during the last half of this year, the time between then and 2010 presents a perfect storm to buy: “The Canadian dollar is expensive, U.S. people are distressed sellers and afraid to buy, while you shouldn’t be.”

RBC thinks the Canadian dollar will trade between 95 cents US and $1.05 for “a good long while,” and that Canada is “actually now regarded as maybe the best place in the world to invest, period. Other than Brazil, nobody else is as close to being in as good a situation as us. I think it’s a trend that probably has 30 years to it.”

Opportunity is knocking. [email protected]

© The Vancouver Province 2008

 

Rate surge in Lower Mainland, but not comparable to U.S.-style meltdown

Ian Austin
Province

Lower Mainland foreclosures have doubled in the last two years as affordability has decreased along with the promise of quick profits.

Kap Hiroti, who tracks Lower Mainland foreclosures at ForeclosureList.com, says foreclosures stand at 20 per week, up from 10 per week in 2006.

“For one reason or another, they didn’t pay the mortgage, or insurance, or property tax,” says Hiroti, who advises real estate owners looking to foreclose or prospective buyers looking to buy a foreclosed property. “Or they get behind in their strata or condo fees, or face a one-time cost such as a roof or a leaky condo, which might set them back 40, 50 or 60 thousand dollars.”

The Lower Mainland, largely buoyed by Olympic optimism and a good international reputation, has so far eluded the real-estate meltdown south of the border.

In the U.S., home foreclosures hit a record high in the first quarter. Almost one in 100 homes were pushed into a foreclosure proceeding in the quarter, the Mortgage Bankers Association reports.

And the U.S. mortgage delinquency rate hit a record 6.35 per cent, indicating foreclosures will still climb.

As house prices fall in the U.S., foreclosures often result when people whose mortgage is worth much more than a home’s potential selling price simply walk away rather than make payments on a losing proposition.

Even Ed McMahon, Johnny Carson’s sidekick on “The Tonight Show” for three decades, may lose his home to foreclosure. McMahon’s Mediterranean-style estate on storied Mulholland Drive north of Beverly Hills faces a $643,596 default notice on a $4.8-million mortgage.

Former baseball star Jose Canseco is another of the 650,000 U.S. homeowners in the foreclosure process.

“It’s happening to anyone and everyone,” Canseco says.

Hiroti believes the Lower Mainland real-estate market has “flatlined,” meaning investors who were counting on making a profit no longer see an upside.

As a result, some have chosen to lose their investments through foreclosure rather than hanging on with no sign of a significant upside return.

“They were kind of speculating that the market would go up, but when the market flatlines, some people just choose to get out. Local people are getting priced out of the market.”

Helmut Pastrick, chief economist with Credit Union Central of B.C., says many foreclosures result from unexpected turns of events — a job loss, a divorce — and are not necessarily driven by traditional investment decisions or market swings: “It could be income, divorce, or a change in the household.”

Falling interest rates will help some people who have trouble making payments, he says.

“Since January, mortgage rates have dropped more than one per cent. I think we’ll see rates at this level, or even lower, through the end of this year, and they shouldn’t increase until at least 2009.”

Pastrick says most Canadian lenders have taken a much more cautious approach to lending money. He doesn’t expect as many Canadians to be faced with foreclosure as in the U.S., where the twin problems of lax lending standards and falling housing prices have created a crisis.

The foreclosure news comes at a time when the once-hot Lower Mainland housing market has cooled significantly. Greater Vancouver sales were down 33 per cent in May from a year earlier.

After four years of double-digit price increases, the latest figures show a year-over-year increase of just 5.5 per cent so far in 2008.

Observers say a U.S.-style housing market collapse here is unlikely, thanks to Vancouver‘s healthy job market, population growth and a location constrained by mountains, ocean and the U.S. border.

© The Vancouver Province 2008