USA Today

NEW YORK (AP) — U.S. home prices fell at a record pace in the second quarter compared with a year ago, according to two separate reports out Tuesday, but investors combed through them and found some reasons to hope the worst is over for the moribund housing sector.

A third report said sales of new single-family homes in July were lower than economists expected but rose from a June pace that was the slowest in nearly 17 years.

The Standard & Poor’s/Case-Shiller U.S. National Home Price Index tumbled a record 15.4% during the quarter from the same period a year ago, but the data for June suggest the severity of the housing slump may be waning.

The monthly indexes also clocked in record declines. The 20-city index fell 15.9% in June compared with a year ago, the largest drop since its inception in 2000. The 10-city index plunged 17%, its biggest decline in its 21-year history.

However, the rate of single-family home price declines slowed from May to June, a possible silver lining, the index creators said.

“While there is no national turnaround in residential real estate prices, it is possible that we are seeing some regions struggling to come back, which has resulted in some moderation in price declines at the national level” said David Blitzer, chairman of the index committee at S&P.

Fourteen cities in the monthly index showed improvement from May to June, and nine recorded positive returns.

The index’s glimmer of hope follows another surprisingly positive housing headline on Monday. Existing home sales rose in July, surpassing expectations, as buyers snatched up cheap distressed properties in the hardest hit housing markets.

Still, on a year-over-year basis, no city in the Case-Shiller 20-city index saw price gains in June, the third straight month that’s happened.

Las Vegas led the largest annual declines, falling 28.6% followed by Miami at 28.3% and Phoenix at 27.9%.

Charlotte, the last city in the index to report depreciation during the current housing downturn, posted its largest drop since 1991 at 1%.

The government home price index for the April-June period, released by the Office of Federal Housing Enterprise Oversight, focuses on less expensive properties and includes fewer houses bought with risky loans that soured over the past year, but it also hit a record.

Home prices fell 4.8% in the second quarter compared with a year ago, OFHEO said.

The previous record annual drop in the index’s 17-year history was 3%, set in the January-March period of this year.

The government index also fell 1.4% from the first quarter to the second quarter. That was a smaller drop than the record quarterly decline of 1.7% set in the prior period.

As the housing market has crashed over the past year, the most severe price declines have been in Western states. California‘s prices fell nearly 16%, while Nevada‘s prices fell 14%.

Also showing big price declines were: Florida, where prices fell 12%; Arizona, where they fell 9%; and Rhode Island, where they fell 5%.

The government’s state-by-state figures include refinance transactions.

“The most overbuilt areas of the country — including California, Nevada, Arizona and Florida — contrast greatly with most other states, where prices are declining more moderately or even increasing,” OFHEO Chief Economist Patrick Lawler said in a statement.

Prices in the weakest markets, he said, have receded to late-2005 levels, plummeting by more than 30% in two cities: Merced and Stockton, Calif.

OFHEO regulates the government-sponsored mortgage finance companies, Fannie Mae and Freddie Mac. Under the housing bill signed by President Bush last month, its functions will be folded into a new agency, the Federal Housing Finance Agency.

New-home sales rose 2.4% last month to a seasonally adjusted annual rate of 515,000 units, the most since April.

But sales in June turned out to be much weaker than the government previously estimated. Sales sank to a pace of just 503,000, the worst showing since September 1991.

Economists polled by Reuters were expecting to sales to remain unchanged at the 530,000 annual pace first reported for June. 1.

The inventory of homes available for sale shrank 5.2% to 416,000, the lowest since October 2004. The July sales pace put the supply of homes available for sale at 10.1 months’ worth.

The median sales price rose slightly to $230,700 from $230,100 from June, but was down 6.3% from a year earlier, the government said.

Compared with a year ago, home sales were off 35.3%. Only Northeast sales rose from a year earlier, up 4.2%, while all other regions had double-digit declines.

Copyright 2008 The Associated Press. All rights reserved

Derrick Penner
Sun

There will likely be a correction in Lower Mainland commercial land prices, according to one major commercial realtor, although prime commercial buildings remain attractive real estate for investors to own.

Rob Gritter, a principal with Avison Young Commercial Real Estate in Vancouver, said land prices are now so high that buyers cannot build new buildings on economic terms. “There is definitely going to be retrenchment in value,” Gritter added.

For industrial land, Gritter said, prices have risen to more than $1 million an acre in suburban locations, and $4 million in urban Vancouver locations. “You can’t build a building to lease anywhere [while] paying [for] land at $1 million an acre and make it economic,” he said.

However, Avison Young, in its mid-year review of real estate investment in B.C., found that existing buildings in good locations with solid tenants are still in demand. The Avison Young report tracked 24 commercial transactions of more than $5 million, worth a total of $535 million, over the first half of 2008, compared with 38 worth $316 million over the same period in 2007.

Gritter said tightening of credit markets and elimination of the asset-backed commercial paper debt has taken some high-leverage buyers out of the market.

However, he added that this development has allowed traditional investors to get back into the market. “The commercial [real estate] market is much more based on strong fundamentals,” Gritter said. “and we certainly see continued low vacancy rates [in the Lower Mainland] in all sectors on the commercial side.”

He added that developers have not oversupplied the market with new commercial buildings, and with few listings of existing buildings, the market remains constrained.

“The survey indicates that there is still tremendous volume [of transactions] and we’re still seeing significant activity levels,” with multiple bidders for the prime properties.

Industrial property sales dominated the first half of 2008 with some $274 million in sales, according to the Avison Young report. The dispersal of cold-storage firm Versacold Canada Corp.’s portfolio to Kingsett Capital accounted for $103 million of the transactions.

© The Vancouver Sun 2008

Province

Prices for well-located prime properties, such as those within sight of downtown Vancouver’s Howe Street, have held their own during the past six months. Photograph by : Jon Murray, The Province, file

Healthy demand continues to push B.C.’s commercial real-estate market ahead, according to a new survey.

The total value of office, industrial and retail-investment transactions in the province came to $535 million in the first half of 2008, Avison Young Commercial Real Estate said yesterday in a mid-year review.

That’s up from $316 million in the first half of 2007 and is on pace to meet the $967 million posted for all of last year, Avison Young said.

The number of transactions valued at more than $5 million rose to 38 during the first half of this year from 24 in the same period in 2007, Avison Young said.

“Despite the economic downturn in the U.S. and turbulence in global financial markets, the B.C. economy continues to trend above the national average and demonstrate resilience, with solid economic fundamentals continuing to drive demand,” Avison Young spokesman Bob Levine said.

The average sale price fell to $14.1 million from $20.6 million in 2007, Avison Young said.

Industrial properties were the the most active asset class sold between Jan. 1 and June 30. That strength was powered by the disposal of Versacold Canada Corp.’s portfolio to Kingsett Capital in six trades amounting to $103 million, Avison Young said.

Prices for well-located prime properties have held their own during the past six months, but the number of deals in secondary and third-tier markets is declining, the firm said. “Properties in weaker locations or with vacancy-tenant covenant issues, especially in the B.C. interior and on Vancouver Island, as well as development sites in inferior locations are witnessing a decline in value,” Levine said.

Stricter lending practices in terms of debt-service coverage and loan-to-value ratios may sideline investors needing high leverage, Levine said.

Private investors were the chief buyers in the first half of this year, accounting for $319 million worth of properties, or 59 per cent of dollar volume.

Large pension funds accounted for $179 million, or 33 per cent of the dollar volume.

© The Vancouver Province 2008

USA Today

WASHINGTON (AP) — Sales of existing homes rose 3.1% in July from June as buyers snapped up deeply discounted properties in parts of the country hit hardest by the housing bust, the National Association of Realtors said Monday.

But the number of unsold properties hit an all-time high, latest indication that the worst housing slump in decades is far from over.

The National Association of Realtors reported Monday that sales rose to a seasonally adjusted annual rate of 5 million units. Sales had been expected to rise only 1.6%, according to economists surveyed by Thomson/IFR.

Home sales were 13.2% lower than a year ago and prices were down dramatically. The median price for a home sold in July dropped to $212,000, down 7.1% from a year ago.

Despite the third monthly sales jump this year, the number of unsold single-family homes and condominiums rose to 4.67 million, most since 1968, when the Realtors group started tracking the data.

That represented an 11.2-month supply at the July sales pace, matching the all-time high set in April.

Sales were up in all regions except the South, which posted a 0.5% decline. Sales rose 5.9% in the Northeast, 0.9% in the Midwest and 9.7% in the West.

Analysts say until inventory is reduced to more normal levels, the housing slump is likely to persist. The inventory is being driven higher by a wave of mortgage foreclosures.

Despite the rise in sales, Lawrence Yun, the Realtors’ chief economist, was reluctant to conclude that the housing market has hit bottom.

While buyers are pouncing on lower prices — especially in places like California, Florida and Nevada — sales are sluggish in formerly stable states like Texas.

“People are responding to lower prices,” Yun said, but there is “too much uncertainty” about the housing market’s future to call a bottom.

One key unknown is the ability of mortgage finance companies Fannie Mae and Freddie Mac to supply money for loans. The two companies have cut back the availability of mortgages significantly as they cope with mounting losses from foreclosures and government officials stand by to shore up the two struggling companies if needed.

President Bush last month signed housing legislation that aims to prevent foreclosures by allowing an estimated 400,000 homeowners to swap their mortgages for more affordable loans, but only if their lender agrees to take a loss on the initial loan.

Even with government help, nearly 2.8 million U.S. households will either face foreclosure, turn over their homes to their lender or sell the properties for less than their mortgage’s value by the end of next year, predicts Moody’s Economy.com.

Copyright 2008 The Associated Press. All rights reserved.

Laugh at winter from this balcony

Kate Webb
Province

999 Seymour has a balcony that seamlessly transitions from outdoor to indoor living space with the clever use of doors and a screen. PHOTOS BY RIC ERNST — THE PROVINCE

The display bedroom features a sliding frosted-glass door

the kitchen reflects the units’ overall simplicity

the open-concept main living area

a stainless-steel gas fireplace on the balcony creates the same cozy glow as an outdoor heating lamp

The sun may be shining these days but, like it or not, another weepy Vancouver winter isn’t far around the corner.

That perennial frustration in the back of everyone’s mind is why weather-savvy buyers would do well to invest in a place like 999 Seymour.

Its designers have managed to create a balcony that seamlessly transitions from outdoor to indoor living space, so you can actually get out for some fresh air at home, even in the winter.

The disappearance of inside-outside distinctions at the yet-be-built Yaletown boutique highrise is facilitated by a combination of polished cement flooring extending evenly from living room to balcony, and two sets of custom sliding doors.

Separating the open-concept interior and the deep, wide veranda, a floor-to-ceiling panelled glass wall retracts, instantly fusing inside with outside. But if — or rather when — it starts pouring, or an owner just wants a bit of privacy, a contemporary movable screen made of perforated anodized aluminum easily slides closed, while still letting lots of light in.

Adding to the appeal of the outside space is a stainless-steel gas fireplace — included in some plans and available as an upgrade in others — which creates the same cozy glow as an outdoor heating lamp.

Developer Townline’s innovative solution to the problem of designing a balcony that’s truly livable year-round adds an impressive amount of square footage to each unit. In the 500-square-foot display suite, it makes up a whole other 129 sq. ft. of living space.

The design of the building, which is expected to be complete in June of 2010, is about as chic and modern as you can get.

“Everyone loves the design because there are so many cookie-cutter, generic buildings that are up,” says sales rep Yvonne Drinovz. “As the designer says, to him, it’s like the next level of urban living, with a little more personality.”

The lobby will feature a living, breathing, two-storey wall inhabited by brilliant green plants. Surrounding the lobby will be four storeys of retail space.

The building’s amenities will also include a well-equipped gym, yoga studio, social lounge, media rom and games room, as well as a communal outdoor terrace with a fireplace, barbecue, outdoor seating and a water feature.

The units, most of which range between 500 and 800 sq. ft. (not including the balconies), are a shining example of clean, efficient design.

“We’re trying to make it as clean-lined and simple as possible, with a very efficient use of space,” says Drinovz. “The appliances are all integrated into the kitchen cabinetry — even the washer and dryer and recycling storage are built in.”

The kitchens come with a choice of three primary cabinet colours, all complementing the frosted glass upper cabinetry: light wood veneer, dark wood veneer or white.

The backsplash and countertops are both of the same timeless grey engineered quartz, reinforcing the simplicity of the apartment’s overall feel.

Undermounted sinks in both the bathroom and kitchen, under-cabinet pot lighting and an asymmetrical Nebula ceiling fan with a single propeller give each home an arty edge.

The bedroom in the display suite is technically open — meaning it has no door — but Townline has included a beautiful sliding, three-panelled frosted glass door in some homes and made in an option in others.

Realizing it will still be another two long, rainy winters before residents get a taste of these cool downtown pads, Townline is offering buyers interest on their bond or down payment, which must be a minimum of 7.5 per cent or 15 per cent of the purchase price, respectively.

For the rest of the month, the developers are also offering incentives for those who purchase the smallest, least expensive “A” plan: an outdoor gas fireplace and frosted-glass bedroom door included with the price.

– – –

The Facts

What: 999 Seymour, a 115-unit, 21-storey Yaletown boutique highrise condo highrise.

Where: 999 Seymour St., Vancouver.

Developer: Townline Homes

Sizes: Open one-bedroom up to two-bedroom-plus-den, from 500 to 1239 sq. ft.

Prices: $445,000 to $1.5 million

Open: Presentation centre and one display suite at 1050 Homer St. open from 12 to 5 p.m., Saturday to Thursday.

More info: www.999seymour.com

© The Vancouver Province 2008

Adding items doesn’t hurt either, ‘home stagers’ advise

Kim Pemberton
Sun

The master-bedroom treatment suggested by Ron Sowden replaced the floral bedspread with a tan-coloured bed set and draped a loveseat in slip covers. Shown in the master-bedroom photo are homeowner Abbe Gates and stager Sowden. Shown in in daughter Sadie’s bedroom, are Sowden, Sadie and Abbe. Photograph by : Stuart Davis, Vancouver Sun

The master-bedroom treatment suggested by Ron Sowden replaced the floral bedspread with a tan-coloured bed set and draped a loveseat in slip covers. Shown in the master-bedroom photo are homeowner Abbe Gates and stager Sowden. Shown in in daughter Sadie’s bedroom, are Sowden, Sadie and Abbe. Photograph by : Stuart Davis, Vancouver Sun

Abbe and Gary Gates Photograph by : Stuart Davis, Vancouver Sun

Abbe and Gary Gates Photograph by : Stuart Davis, Vancouver Sun

Abbe and Gary Gates Photograph by : Stuart Davis, Vancouver Sun

Abbe and Gary Gates Photograph by : Stuart Davis, Vancouver Sun

Abbe and Gary Gates Photograph by : Stuart Davis, Vancouver Sun

When Abbe and Gary Gates put their Vancouver home on the market, they knew they needed to make some cosmetic changes to make sure their residence stood out.

They cleared out the clutter and hired cleaners. And then they called in a home-staging consultant– veteran film set designer Ron Sowden, one of the principals of Dekora, a Vancouver-based home and event staging company.

After Sowden visited, the Gates learned more could still be done in their bid to sell their 5,586-square-foot home on Southwest Marine Drive, listed at $1.749 million. One of the first suggestions was to eliminate all of the family photos, except for a black and white family photo that comes across more like “art” says Sowden.

As Sowden explains, the objective is to take the personal out of the space and neutralize colour choices so potential buyers aren’t distracted.

“If you love colour and you are not selling your home — go for it. But if you are trying to sell, the buyer has to digest that and it can get in the way. That’s why we’re always pushing for neutrals. It’s not that we want a blander world. It’s just safer and easier for the buyer to project their decorating tastes onto an open space,” says Sowden.

“You have to stop thinking of it as your home and start viewing it as a product.”

Those interested in learning more about how to change the way they look at their homes may already have picked up on The Stagers, a new half-hour reality show, shot in Vancouver, that follows local designers working for Dekora as they transform houses for sale.

The show began airing in July on Home and Garden Television in both Canada and the U.S., making it the first time a Vancouver-based series was picked up by the network to air in both countries simultaneously. Usually, HGTV pilots a Canadian show first in Canada to see if it will be a hit with viewers before going to the larger market south of the border.

The show appeals not only to sellers wanting to learn how to get the edge over the competition in a softening resale market, but also to homeowners simply interested in home improvement tips.

“We’ve been thinking about doing a show for years,” says John Carter, one of the Dekora founders. “Then out of the blue we get an e-mail from a Vancouver film company, Paperny Films.

”Their story development division wanted to talk and everything clicked. They produced it and we would be the focus. I haven’t seen anything like it on TV. It’s more real world. Every job is a real job and there is no host, per se. The designers featured are not hosting. They are just doing their job.”

Home staging, where a home is presented in the best possible light for resale, is a trend that has been catching on for years, with about a dozen other home-stage businesses now in operation in the Lower Mainland.

When Dekora first started in 2003, by Carter, Sowden, and businesswoman Barbara Rae, it was the only company in town using Sowden’s garage to store furniture and accessories.

Since then, the company has expanded to 50 staff members and 20 designers on contract, and has long since moved out of the garage and into a 10,000-square-foot warehouse that houses more than $1 million worth of inventory. Dekora also recently expanded to Calgary and is also staging “events.”

“The big reason we are growing is home-staging works,” says Carter. “This business is all about common sense. If you are going to sell your home it becomes a product and a product has to look good.”

Thirteen episodes of The Stagers have been shot, with no word yet on whether a second season will be ordered. All of the episodes feature homes that require major changes, costing anywhere from $5,000 to $10,000 to stage. As Carter notes, the homes featured on the television show have undergone dramatic changes. “Moving a couch doesn’t sustain an episode,” he points out.

And while that price tag sounds steep, Carter adds that it’s value for money, considering a higher percentage of staged homes sell quickly and for top dollar.

Carter says a study by the National Association of Realtors found staged homes generally sell seven to 11 per cent higher than non-staged homes, and in under half the time.

“It’s difficult to quantify the return. For instance, if the house was listed at $750,000, was staged for $6,000 and sold for $740,000 people assume the seller lost money. But was the selling price realistic? If the staging wasn’t done, would they have even received the offer?”

Carter says what he knows for certain is that staging makes sense, especially considering that your home is often your No. 1 investment.

“When you’re selling your vehicle most people know it’s important to detail it. You wouldn’t think twice of spending $150 to detail a $10,000 car. Why not spend $5,000 for a $500,000 house?”

But for homeowners uncertain or unable to take the financial plunge, Dekora also does consultations and leaves it up to the homeowner as to whether they want to implement any of the ideas offered.

The company charges $150 for a condo consultation and $250 for detached homes. For consultations, the designer walks through a home, room by room, making suggestions about what the homeowner can do to improve its chances for resale. Typically, they spend two to three hours with the client and provide a detailed written checklist, says Sowden.

When the Gates placed their house on the market, their realtor, Erick Malkin of Sutton Realty, warned them that competition is definitely tougher this year compared to last year.

Last year, says Malkin, a 10-block area nearby had eight houses for sale in July, compared to 40 houses in the same 10-block radius this year.

“You can never go wrong staging a house. Most buyers looking at homes lack imagination of what could go where and colours,” says Malkin.

Sowden had no shortage of tips for the Gates.

With the pool and outdoor entertaining area, he suggested they get rid of the “tired” plastic deck chairs and invest in black, all-weather rattan furniture that would complement both the home’s exterior colour and the large flower boxes they already have in place.

In the living room, Sowden suggested they make it appear more “formal”, rather than appearing like a rec room — especially considering that there is already a large rec room downstairs. They were advised to remove the oversized television and rearrange the couches so that the newly re-faced fireplace would become the focal point.

Another suggestion was to get rid of the floral bedspread and matching floral lampshades in the master bedroom and to add slip covers to the love seat in the room’s reading nook.

In the case of toning down the bed duvet it, turns out Abbe didn’t have to go shopping. She already owned a tan coloured bed set that would contrast with the room’s darker wall colour.

“Most people don’t see their homes through an objective lens. Often it’s all about repositioning,” he says. “You want the product to stand out.”

Sowden should know, considering he has 15 years in the film industry working on sets and five years as chief designer and CEO with Dekora.

Many of the designers featured on The Stagers, like Sowden, have a film industry background.

As Carter notes “it’s a similar industry. You have to move fast, be careful with budgets and roll up your sleeves to get things done.”

Designer Dina Holmes, who has been working eight years in set design, recently did a comprehensive home staging job for Dekora of a $3.2-million Vancouver home.

She was lucky with this particular home because the seller had recently renovated the home and many of the rooms were already empty.

Often, she says, stagers are asked to work with some of the homeowners’ existing pieces of furniture that aren’t ideal.

Still, the newly renovated home wasn’t without problem furniture. In this case, the furniture the family did have was traditional in style and didn’t fit in the context of their contemporary modern home.

“The furniture definitely didn’t go with the house, big puffy green leather couches from the Brick and mismatched traditional art,” says Holmes.

On the day the Vancouver Sun visited the home, a Dekora truck was being unloaded with sleek modern furnishings and accessories. The walls were already a neutral colour so Dekora didn’t have to worry about any major cosmetic changes.

For this 4,600-square-foot home, Holmes was staging the family room — it once housed the green couches — into an executive office/television room, as well as the open concept living/dining room, kitchen, three upstairs bedrooms and four bathrooms.

On her first visit to the home, Holmes took photos, then “ran like mad to Dekora” to select furniture, lighting, rugs and accessories.

“It’s always a scramble because there are other stagers and we all want the good lamps, the good vases. Often we’ll be running back and forth and switching things out.”

Getting the home into show house condition took Holmes and her assistant took four days. The first two were preparation days and the final two days were staging.

Her aim was to make the house “feel peaceful” and “inviting” and to stage it to the target market. In this case, that was a family, so one of the bedrooms was designed for a young girl and the room off the kitchen was turned into a “family room.”

The Stagers is on HGTV Tuesdays at 7 and 11 p.m.

© The Vancouver Sun 2008