Fractionally sold and bought, wholly thrifty

Suzanne Morphet
Sun

In December when economic turmoil made champagne the most unlikely of tipples, dozens of new property owners on Mayne Island cracked open the bubbly anyway.

Over the last two years — and they were heady, what-can-go-wrong years — these bubbly-inbibers — mostly from the Lower Mainland – had bought into a fractional-ownership property on picturesque Bennett Bay and called Mayne Island Beach Homes & Resort.

Developer Murray Rosengren was delighted that all but two of 66 buyers put up the remainder of their purchase price and showed up that December day to see their newly completed vacation digs.

“Our lawyers were telling us, ‘you’ve done well, you’ve got a very good closing rate,’ which speaks very well for the acceptance and approval of these units by the owners,” Rosengren says.

Kim and Ken Biehl were present at that ”meet and greet.” With the economy spiralling downward and completion of the first 10 cottages and the promised spa months behind schedule Kim Biehle was concerned Rosengren and partner Dave Hinton wouldn’t be able to get financing to finish the project, she recalls.

Biehl says she briefly considered walking away from the $8,300 deposit. “Briefly, I’ll admit, briefly that thought crossed my mind, but we let it go pretty quickly. It’s been a long-term goal; we could afford it.”

Affordability is the reason most often cited for the popularity of fractional properties.

Developer Rosengren likes to compare buying one-eighth of a Mayne Island Resort cottage, beginning at $59,900, to buying a car.

“I mean you’re not spending much more than you would be if you were buying a vehicle, and what’s that car going to be worth in four years and what’s your vacation property going to be worth?” he asks.

The president of Whistler Real Estate Company, the largest real estate company in the Whistler area, agrees that fractional ownership is more affordable, but Pat Kelly contends these properties don’t appreciate in the same way that single-owner properties tends to.

“I have yet to see any fractional real estate that has appreciated significantly in value in the last 10 years.

”  . . fractional developers and time-share (developers) will always tell you it goes up in value, that there’s a ready secondary market for it. Well, I’m not sure they’re the best people to give you that information.”

Rosengren acknowledges that the cottages at his resort have not gone up in value and they have actually gone down, some way down.

“We’ve adjusted some of our prices significantly, that is true . . . people expect it in today’s market. An example, our most expensive unit sold last year for $98,000 and it’s currently offered at $88,000 . . . that is a fact.”

On average, prices at Mayne Island Resort have dropped by eight per cent. Rosengren is also dangling other incentives to attract new buyers. They can choose from a pair of electric scooters, a couple of kayaks or no maintenance fees for two years.

Rosengren is eager to please customers who’ve already bought in and who want to see the rest of the development, including the spa with indoor lap pool, finished: ”we’re not going to hold out for prices that maybe aren’t working.”

On neighbouring Galiano Island, the developers of the Galiano Inn and Spa have sold 60 of the 160 fractions available in the 20-residence beachfront resort.

They have not lowered prices from last year – prices range from $33,900 to $98,900 for a one-eighth share – but new buyers are being offered incentives.

They can take the developer up on financing, or choose between guaranteed leasing for some of the six weeks the property is theirs, or get a break on maintenance fees for two years.

“I think we weathered the storm quite well, I think we’ll be fine,” says Galiano Inn’s realtor Ian Watts, who says it can take years for fractional properties to completely sell out. “Absolutely, I know one in Whistler, they’ve been selling it since ’02.”

“Of course we’re looking forward to more owners, there’s no question of that,” says Connie Nordin, co-owner of the Galiano Inn and Spa, “but at this point we’re pleased that we can be fully operating for both the owners and prospective owners and guests.”

Being able to indulge themselves at the resort’s award-winning restaurant and spa is a comforting thought to buyers who want some pampering after the punishment they may have suffered on the stock market. In fact, Nordin says buyers make a point of comparing the two kinds of investments, telling her, “Yea, I could put it (money) into stocks again, but really, I’m not able to enjoy that. If I’m putting it into a fractional ownership I can enjoy it tomorrow.”

While buyers – and some developers – like to compare fractional ownership with other kinds of financial investments, it’s not a good idea, according to Ross Perlmutter, president of the Canadian Resort Development Association, a national organization representing developers of timeshares and fractional properties.

Perlmutter says fractional properties should be viewed the same way you would look at buying a membership in an golf or ski club.

“As an investment, you could definitely do much better with something more traditional such as treasury notes or blue chip stock, but you also wouldn’t experience the pleasures of the private golf club experience. The same could be said for buying an exotic sports car or a Harley; they might be good investments, but the real reason people purchase products like that is to enhance their ‘lifestyle portfolio.’ ”

Perlmutter is candid about the future value of fractional properties, especially if the economy continues to be unstable, saying it depends entire on the ability of people to sell them.

“If the realtors – or others in the resale market – understand the product and market it properly, they could hold their value.

”On the other hand, if the owners feel the need to unload them – for example, due to financial hardship – and they are willing to sacrifice them for half of what they originally paid . . . anything could happen.”

Perlmutter estimates about 300,000 Canadians own fractional properties and that about 120 resorts offer or have previously offered some form of shared ownership. Sales in Canada in 2008 totalled about $800 million.

He believes the market for fractionals is still growing and cites a recent announcement by Calgary-based Bellstar Hotels and Resorts of an Okanagan development.

On the coast, the developers of both the Galiano Inn and Spa and Mayne Island Resort are looking forward to summer and more buyers.

Mayne Island Resort is holding a grand opening this weekend. The Galiano Inn has scheduled a pizza party on the ocean-front terrace from a new wood-fired pizza oven.

Kim and Ken Biehl recently enjoyed their third visit to their property at Mayne Island Resort, and says they have no regrets. “Absolutely none, it was the right thing to do at the right time and it’s a great place.”

Suzanne Morphet is a freelance writer in Victoria and co-author of The Vancouver Island Book of Everything.

© Copyright (c) The Vancouver Sun

Unrenovated house retains most of its original character from nearly a century ago

John Mackie
Sun

Houses tend to change over the years. New owners come in and put their personal stamp on the property by upgrading this or renovating that. Sometimes it improves the place, but often, “modernizing” something wrecks it, taking away the original character.

In any event, there are precious few houses in Vancouver that are in original, unrenovated condition. One of them has gone up for sale at 356 West 11th, for $1.94 million.

This may seem a bit steep in today’s uncertain economic climate, particularly since the 3,700-square-foot home needs a new roof, kitchen and bathroom.

But man, what a house.

Many Vancouverites will recognize it because it’s just east of city hall at 11th and Yukon. It sits high up on a hill, which gives it a real prominence and grandeur. Unlike other old homes in the neighbourhood, the house has never been broken up into suites; it still retains its original layout.

It dates to 1910, and is in the Queen Anne style, with a big turret on the northwest corner. The exterior is a handsome blend of brick and stone, with an enormous front porch. There may not be another building like it in the city. It’s more like a Westmount mansion in Montreal than something you’d see in Shaughnessy.

It’s so striking, it’s one of only 263 Heritage A buildings in Vancouver, the city’s highest ranking.

The inside is definitely in need of some work, but has heritage character galore. There is wood panelling in the hallway, den, dining room and stairwell, plate rail in the dining room, and picture rail in most every room.

Most of the wood has never been painted, and has that lovely patina you get on century-old fir with a dark stain. This includes a stunning 6-foot-tall, 6-foot-wide built-in cabinet in the dining room.

The first and second floors have 10-foot ceilings, and the downstairs ceilings are coffered, with all the original moulding. The pocket doors still have their original keys, and the keys actually work.

Naturally there is a lot of stained glass, including a butterscotch arched window in the dining room and a green, amber and milky blue art-nouveau-style window in the upstairs landing.

One of the house’s many quirks is that there are small stained-glass windows in two of the upstairs bedroom closets. Oddly, there isn’t any stained glass in the actual bedrooms.

How many bedrooms the house has is hard to determine. Depending on how you look at it, there could be three, four, or seven.

How so? When it was built, there were probably three bedrooms on the second floor, including a luxurious master suite across the front of the house. The master would have included a bedroom beneath the turret, which is connected to a small room that was used as a walk-in closet, which in turn is connected to a sitting room with a gorgeous tiled fireplace.

In recent years, the sitting room has been used as a bedroom, hence there could be four bedrooms on the second floor. But there’s also a third floor that would have been the servants’ quarters. It has three rooms that could be used as bedrooms, so in a pinch the house could have seven bedrooms. Or more, if you developed the basement.

The view from the third floor is stunning, particularly from inside the turret, where you get a jaw-dropping panorama of the North Shore mountains and downtown. Alas, the western view of False Creek and English Bay was cut off when they built an addition to Vancouver‘s city hall.

The house was there 25 years before city hall. Rogers Park used to be located where city hall is today, so it would have bordered on a lush expanse of greenery.

It was designed by Milton D. Campbell and Francis E. Burnett, who built several other grand homes in Mount Pleasant just before the First World War. The original owner was Murdock McLean, who is listed in old city directories as a “bookkeeper” and a “landing waiter” at customs.

Not much is known about McLean, but his death in 1917 did rate a mention in the Province newspaper, which said he was a Vancouver pioneer. The Province story says he came to Vancouver in 1886, the year the city was founded, but he doesn’t show up in a city directory until 1893, which is a more likely date.

McLean prospered enough to spend $6,000 constructing his dream home in 1910, but he lived in the house for only seven years before he died at the age of 72. The McLean family remained the owners until Murdock’s son Frederick died in 1944, when it was sold to William Bodnar.

Bodnar’s claim to fame is that he co-owned the Hotel Europe for a few years in the early 1950s. The current owner, Donald Walters, said Bodnar was forced to sell the Europe and three other hotels because one of his partners was embezzling money. The partner was caught and hanged himself in jail.

The Bodnar family still has a connection to the house today. William handed it to his son Henry, who died and left it to his wife Kaye, who died and left it to her second husband, Walters. Walters has had health problems and decided to sell the house because he can’t afford the upkeep.

Hence, the reason the house is more or less like it was in 1910 is that basically, it has been owned by only two families. So you still have the original bench in the hallway, you still have the original chandeliers in the den and dining room, and you still have 1930s wallpaper and ancient push-button light switches.

Quirks? It has a nifty little doo-dad in one of the upstairs bedrooms that controls all the lights in the house; flip it and you can turn out the front hall. It still has the 1910 built-in central vacuum system, although it’s no longer functioning. The garage out back used to be a barn for McLean‘s horse and buggy.

The house is so unusual, it’s been used in several films and TV shows, such as the remake of the horror flick Willard, as well as TV shows The X-Files, Six Feet Under and Just Cause.

It makes sense that the movie business would like the house. It’s so 1910, it almost seems like a Hollywood movie set.

© Copyright (c) The Vancouver Sun

 

Derrick Penner
Sun

A recent surge in real estate sales has caused the Canadian Real Estate Association to sharply revise its expectations for price drops in British Columbia.

CREA, in its forecast released Thursday, estimated that B.C.’s average price will drop less than seven per cent over 2009, more than three percentage points off the 10.6-per-cent drop forecast in February.

CREA forecast that B.C.’s average price will drop to $423,300, instead of the $406,300 average it forecast earlier.

For 2010, CREA is now predicting that B.C. prices will start edging up again by almost two per cent compared with a 2010 drop of 0.6 per cent written into the February forecast.

“Monthly resale housing activity improved as the first quarter progressed,” Gregory Klump, CREA’s chief economist, said in a news release, “entering the second quarter on a rising trend [that is] closing in on levels last seen before [the sales trend] fell sharply late last year.”

B.C. sales rose in April from the previous month, the B.C. Real Estate Association said Thursday in a news release, as buyers were drawn back into the market by lower prices and rock-bottom mortgage rates. And the inventory of unsold homes across the province dropped to the lowest level in 12 months, the association said, edging the ratio of sales to active listings close to the zone housing economists consider balanced between buyers and sellers.

“An increase in consumer demand combined with fewer homes for sale has trended the market near balanced conditions,” Cameron Muir, chief economist for the B.C. Real Estate Association said in an interview.

Realtors counted 6,918 sales through the Multiple Listing Service in April, down 20 per cent from the same month a year ago. April was the third straight month that sales were higher than the previous month. However, to the end of the first four months, sales were still lower than a year ago with realtors counting 18,089 sales, a 35-per-cent reduction over the first four months of 2008.

The average house price across B.C. was $433,246 over the first four months, down almost nine per cent from a year ago.

© Copyright (c) The Vancouver Sun

April hike means home sales do better for third month in a row

Province

House prices in B.C. have yet to recover but the residential market is beginning to find its feet again, the B.C. Real Estate Association says.

The average house price across the province last month fell six per cent to $449,372 from $478,044 a year earlier, the association said yesterday.

But April marked the third-consecutive month of rising home sales in B.C., on a seasonally adjusted basis, the association said.

Lower home prices and record-low mortgage-interest rates have strengthened consumer demand, the association said.

The beginning of April saw housing affordability touch a three-year high.

And the number of homes for sale on the Multiple Listing Service sank to a 12-month low in April, seasonally adjusted.

“Downward pressure on home prices has eased considerably,” association chief economist Cameron Muir said.

“An increase in consumer demand combined with fewer homes for sale has trended the market near balanced conditions.”

In Greater Vancouver, average prices in April were down 8.2 per cent to $565,003 from last year.

Residential sales volume in B.C. fell 24.6 per cent to $3.1 billion in April from a year ago. Year to date, sales lost 40.5 per cent to $7.8 billion from the same period last year.

The year-to-date average MLS price sank nine per cent to $433,246 from a year earlier.

Nationally, home sales surged in April, a third-consecutive monthly increase, which forced the Canadian Real Estate Association to revise its forecast.

On a seasonally adjusted basis there were 34,838 unit sales last month, an 11.2-per-cent increase from March and the largest monthly jump in sales since March 2004.

The average price of a home sold in April was $306,366, a 3.2-per-cent decline from a year ago.

Because of its renewed confidence in the market, the association is now forecasting sales will come in at 370,500 for 2009, up from the 360,900 in sales the group was forecasting in February.

But even the renewed forecast would be a 14.7-per-cent drop in sales from a year ago and a far cry from the record 523,855 in sales in 2007.

© Copyright (c) The Province

Julie Schmit
USA Today

Sales of existing homes picked up in 17 states in the first quarter compared with the previous one, pointing to more signs of life for the home market.

Nationally, first-quarter sales of existing homes were down 3.2% from the last three months of 2008 and down 6.8% year-over-year, the National Association of Realtors said Tuesday.

But the improvement in 17 states is more evidence that the market is bottoming out, economists say. In the fourth quarter, only nine states showed better sales. Economists predict more states will show sales gains throughout the year, given still-falling prices in many markets, low mortgage rates and some signs of improvement in the overall economy.

“There are early signs of recovery in some states. They give me reason for optimism,” says Patrick Newport, economist at IHS Global Insight. He expects home sales to pick up nationwide in the later part of this year.

The pace of the pickup this year may “surprise to the upside,” says Greg McBride, senior financial analyst at Bankrate.com. That’s because prices have dropped so much that more people can afford homes, he says.

That trend continued in the first quarter. Single-family home prices declined year-over-year in 134 of 152 metropolitan areas, NAR says. Nationwide, the median sales price for a single-family home was $169,000, down 13.8% from the same quarter a year ago. Median means half sold for more and half sold for less.

Median prices are skewed downward by the number of foreclosed and distressed homes being sold. They’re selling for 20% less than traditional homes and account for about half of all sales, NAR says.

That’s attracting many first-time buyers, who accounted for about half of the quarter’s sales, NAR says.

Low prices — driven by sales of foreclosed and distressed homes — helped Minnesota post a 12% gain in the first quarter compared with the same period a year ago, NAR says. Median prices there are at 1997 levels, says Christopher Galler, chief operating officer of the Minnesota Association of Realtors. He says foreclosures and short sales — in which banks forgive some of what is owed — account for 50% of transactions.

That’s also true nationwide, NAR says. The glut of distressed homes on the market will continue to be a “drag on prices,” McBride says.

The states with the largest sales gains from the fourth quarter were: Wyoming, 44%; Alaska, 37%; Nevada, 25%; and Minnesota, 22%. The figures include single-family homes, condos and co-ops.

Metro area median home prices

Median sale price of existing single-family homes in these metropolitan areas (in thousands)
	2006	2007	2008Q1	2008Q4	2009Q1	Change from Q1 2008
Akron, OH	$114.6	$119.3	$96.3	$86.1	$50.1	-48.0%
Albany-Schenectady-Troy, NY	$195.4	$198.9	$194.1	$193.1	$184.5	-4.9%
Albuquerque, NM	$184.2	$198.5	$190.5	$183.7	$182.6	-4.1%
Allentown-Bethlehem-Easton, PA-NJ	$248.1	$260.8	$237.0	$238.0	$218.0	-8.0%
Amarillo, TX	$114.9	$118.4	$122.2	$122.6	$122.0	-0.2%
Anaheim-Santa Ana, CA (OrangeCo.)	$709.0	$709.5	$607.4	$464.8	$435.8	-28.3%
Appleton, WI	$129.2	$130.0	$120.4	$127.6	$110.3	-8.4%
Atlanta-Sandy Springs-Marietta, GA	$171.8	$172.0	$154.0	$129.2	$115.6	-24.9%
AtlanticCity, NJ	$254.8	$269.7	$277.4	$229.1	$219.1	-21.0%
Austin-Round Rock, TX	$173.7	$183.7	$184.5	$184.8	$182.3	-1.2%
Baltimore-Towson, MD	$279.9	$286.1	$270.5	$260.1	$245.8	-9.1%
BarnstableTown, MA	$389.5	$384.7	$355.2	$325.5	$276.7	-22.1%
Baton Rouge, LA	$169.5	$174.4	$169.2	$156.4	N/A	N/A
Beaumont-Port Arthur, TX	$112.7	$123.0	$122.9	$132.6	$129.1	5 .0%
Binghamton, NY	$96.9	$111.2	$109.7	$105.8	$110.3	0 .5%
Birmingham-Hoover, AL	$165.1	$161.3	$153.2	$135.4	$130.4	-14.9%
Bismarck, ND	$134.9	$152.9	$153.4	$164.5	$153.3	-0.1%
Bloomington-Normal, IL	$152.2	$154.0	$150.9	$159.3	$153.8	1 .9%
Boise City-Nampa, ID	N/A	$206.0	$193.4	$168.8	$157.1	-18.8%
Boston-Cambridge-Quincy, MA-NH	$402.2	$395.6	$357.7	$336.0	$290.7	-18.7%
Boulder, CO	$366.4	$376.2	$355.7	$324.7	$328.4	-7.7%
Bridgeport-Stamford-Norwalk, CT	$473.7	$486.6	$439.3	$380.6	$347.4	-20.9%
Buffalo-NiagaraFalls, NY	$97.9	$104.0	$96.6	$106.2	$99.2	2 .7%
Canton-Massillon, OH	$109.3	$110.3	$88.5	$80.4	$66.2	-25.2%
Cape Coral-Fort Myers, FL	$268.2	$252.1	$213.2	$110.9	$87.3	-59.1%
Cedar Rapids, IA	$133.8	$136.2	$129.9	$136.9	$127.3	-2.0%
Champaign-Urbana, IL	$143.0	$144.1	$139.4	$132.0	$141.6	1 .6%
Charleston-North Charleston, SC	$212.4	$215.4	$201.4	$193.8	$188.2	-6.6%
Charleston, WV	$119.4	$122.5	$116.8	$124.7	$119.2	2 .1%
Charlotte-Gastonia-Concord, NC-SC	$190.6	$204.3	$192.7	$186.3	$171.5	-11.0%
Chattanooga, TN-GA	$136.0	$130.9	$125.2	$123.8	$117.9	-5.8%
Chicago-Naperville-Joliet, IL	$273.5	$276.6	$249.6	$217.8	$185.6	-25.6%
Cincinnati-Middletown, OH-KY-IN	$143.2	$140.8	$128.5	$116.0	$106.5	-17.1%
Cleveland-Elyria-Mentor, OH	$134.4	$130.0	$102.1	$88.3	$69.9	-31.5%
ColordoSprings, CO	$218.2	$217.5	$208.9	$187.0	$180.0	-13.8%
Columbia, MO	$139.3	$147.1	$143.9	$138.1	$152.6	6 .0%
Columbia, SC	$141.6	$146.6	$141.6	$139.2	$134.3	-5.2%
Columbus, OH	$148.1	$147.4	$132.0	$126.5	$118.3	-10.4%
CorpusChristi, TX	$131.8	$136.5	$136.8	$134.0	$126.3	-7.7%
Cumberland, MD-WV	$95.7	$109.4	$94.9	$96.9	$114.9	2 1.1%
Dallas-Fort Worth-Arlington, TX	$149.5	$150.9	$142.4	$138.0	$135.7	-4.7%
Danville, IL	N/A	N/A	N/A	N/A	N/A	N/A
Davenport-Moline-Rock Island, IA-IL	$119.7	$108.7	$88.1	$98.1	$100.3	1 3.8%
Dayton, OH	$116.7	$115.6	$100.5	$87.8	$79.7	-20.7%
Decatur, IL	$85.4	$83.1	$79.4	$79.3	$77.1	-2.9%
Deltona-Daytona Beach-Ormond Beach, FL	$205.8	$192.3	$175.6	$143.6	$128.7	-26.7%
Denver-Aurora, CO	$249.5	$245.4	$223.5	$200.8	$192.9	-13.7%
Des Moines, IA	$145.1	$149.2	$147.9	$149.7	$137.3	-7.2%
Detroit-Warren-Livonia, MI	$151.7	$140.3	N/A	N/A	N/A	N/A
Dover, DE	$208.0	$207.5	$199.1	$212.4	$201.0	1 .0%
Durham, NC	$172.8	$178.4	$178.2	$165.6	$171.5	-3.8%
Elmira, NY	$86.8	$81.6	$82.4	$80.9	$77.1	-6.4%
ElPaso, TX	$127.6	$131.9	$133.9	$140.7	$132.8	-0.8%
Erie, PA	$101.3	$98.1	$96.6	$95.2	$85.9	-11.1%
Eugene-Springfield, OR	$230.6	$239.6	$227.5	$212.8	$210.8	-7.3%
Fargo, ND-MN	$136.5	$140.9	$136.9	$140.1	$134.1	-2.0%
Farmington, NM	$172.3	$191.1	$189.9	$184.9	$191.2	0 .7%
Florence, SC	$119.5	$124.2	$116.9	$119.1	$98.5	-15.7%
Ft. Wayne, IN	$99.7	$97.1	$88.7	$88.6	$80.6	-9.1%
Gainesville, FL	$213.2	$211.1	$188.3	$174.0	$160.3	-14.9%
Gary-Hammond, IN	$128.1	$134.2	$124.0	$115.1	$92.0	-25.8%
GlensFalls, NY	$161.6	$167.6	$163.1	$147.6	$156.6	-4.0%
GrandRapids, MI	$134.5	$129.4	$102.8	$80.5	$72.0	-30.0%
GreenBay, WI	$151.3	$150.7	$137.0	$146.6	$138.4	1 .0%
Greensboro-HighPoint, NC	$149.4	$152.0	$142.3	$135.4	$129.7	-8.9%
Greenville, SC	$152.0	$153.6	$154.5	$146.9	$142.0	-8.1%
Gulfport-Biloxi, MS	$145.8	$154.5	$139.0	$129.5	$132.8	-4.5%
Hagerstown-Martinsburg, MD-WV	$223.1	$208.5	$192.7	$171.4	$167.1	-13.3%
Hartford-West Hartford-East Hartford, CT	$258.1	$263.2	$247.3	$233.7	$222.3	-10.1%
Honolulu, HI	$630.0	$643.5	$620.0	$610.0	$570.0	-8.1%
Houston-Baytown-SugarLand, TX	$149.1	$152.5	$148.4	$142.1	$138.5	-6.7%
Indianapolis, IN	$119.3	$120.5	$107.3	$100.2	$94.6	-11.8%
Jackson, MS	$147.1	$139.0	$123.6	$126.6	$122.6	-0.8%
Jacksonville, FL	$193.0	$189.2	$185.7	$160.7	$154.1	-17.0%
Kalamazoo-Portage, MI	N/A	N/A	N/A	N/A	N/A	N/ A
Kankakee-Bradley, IL	$131.5	$134.5	$119.3	$125.6	$116.6	-2.3%
KansasCity, MO-KS	$155.8	$153.3	$139.5	$131.0	$126.6	-9.2%
Kennewick-Richland-Pasco, WA	$156.1	$169.2	$163.7	$165.9	$159.3	-2.7%
Kingston, NY	$252.7	$258.4	$237.8	$224.0	$194.3	-18.3%
Knoxville, TN	$151.2	$156.4	$146.0	$141.7	$138.6	-5.1%
Lansing-E.Lansing, MI	$137.7	$126.8	$92.5	$80.0	$65.6	-29.1%
LasVegas-Paradise, NV	$317.4	$297.7	$247.6	$181.7	$155.3	-37.3%
Lexington-Fayette, KY	$147.8	$147.5	$138.9	$138.2	$133.8	-3.7%
Lincoln, NE	$137.5	$137.5	$134.0	$133.1	$132.4	-1.2%
Little Rock-N.LittleRock, AR	$127.0	$129.1	$127.2	$125.2	$125.4	-1.4%
Los Angeles-Long Beach-Santa Ana, CA	$584.8	$593.6	$460.5	$354.3	$303.5	-34.1%
Louisville, KY-IN	$137.6	$137.4	$131.6	$124.0	$121.1	-8.0%
Madison, WI	$223.2	$226.5	$217.1	$227.0	$208.5	-4.0%
Manchester-Nashua, NH	N/A	N/A	$245.1	$238.6	$215.7	-12.0%
Memphis, TN-MS-AR	$142.3	$137.2	$110.8	$100.2	$96.1	-13.3%
Miami-Fort Lauderdale-Miami Beach, FL	$371.2	$365.5	$319.1	$234.2	$206.0	-35.4%
Milwaukee-Waukesha-West Allis, WI	$220.9	$223.4	$204.4	$194.9	$201.5	-1.4%
Minneapolis-St.Paul-Bloomington, MN-WI	$232.3	$225.2	$199.9	$188.6	$174.1	-12.9%
Mobile, AL	$137.0	$136.4	$129.9	$125.0	$127.9	-1.5%
Montgomery, AL	$144.2	$143.8	$133.7	$126.3	$122.5	-8.4%
Nashville-Davidson–Murfreesboro, TN	N/A	N/A	N/A	N/A	N/A	N/ A
New Haven-Milford, CT	$287.7	$286.5	$255.5	$240.4	$216.5	-15.3%
New Orleans-Metairie-Kenner, LA	$173.1	$160.3	$157.1	$154.9	$150.8	-4.0%
New York-N. NJ-Long Island, NY-NJ-PA	$469.3	$469.7	$445.8	$391.4	$374.5	-16.0%
New York-Wayne-White Plains, NY-NJ	$539.4	$540.3	$492.8	$459.2	$429.9	-12.8%
NY:Edison, NJ	$387.7	$380.3	$361.8	$344.0	$320.9	-11.3%
NY:Nassau-Suffolk, NY	$474.7	$477.2	$462.8	$382.1	$376.7	-18.6%
NY:Newark-Union, NJ-PA	$433.0	$443.7	$409.4	$374.4	$358.2	-12.5%
Norwich-New London, CT	$264.0	$267.7	$244.9	$223.1	$199.6	-18.5%
Ocala, FL	$165.8	$164.6	$145.5	$121.7	$108.6	-25.4%
Oklahoma City, OK	$125.0	$134.9	$124.9	$124.2	$129.9	4 .0%
Omaha, NE-IA	$138.4	$138.0	$132.9	$129.7	$129.0	-2.9%
Orlando, FL	$270.4	$261.3	$232.0	$175.2	$154.8	-33.3%
Palm Bay-Melbourne-Titusville, FL	$212.0	$183.6	$158.8	$123.6	$114.3	-28.0%
Pensacola-FerryPass-Brent, FL	$166.0	$165.6	$156.3	$151.7	$137.2	-12.2%
Peoria, IL	$112.7	$118.6	$119.0	$117.2	$109.8	-7.7%
Philadelphia-Camden-Wilmington, PA-NJ-DE-MD	$230.2	$234.9	$220.9	$212.5	$206.0	-6.7%
Phoenix-Mesa-Scottsdale, AZ	$268.2	$257.4	$222.2	$155.9	$129.2	-41.9%
Pittsburgh, PA	$116.1	$120.7	$111.6	$109.1	$103.4	-7.3%
Pittsfield, MA	$212.9	$217.4	$216.6	$206.0	$180.0	-16.9%
Portland-South Portland-Biddeford, ME	$243.8	$242.7	$234.0	$214.5	$192.1	-17.9%
Portland-Vancouver-Beaverton, OR-WA	$280.8	$295.2	$286.6	$264.5	$248.6	-13.3%
Providence-New Bedford-Fall River, RI-MA	$289.6	$286.5	$262.9	$224.5	$202.4	-23.0%
Raleigh-Cary, NC	$213.8	$224.2	$228.1	$230.9	$223.0	-2.2%
Reading, PA	$143.2	$154.7	$148.4	$155.1	$145.2	-2.2%
Reno-Sparks, NV	$347.2	$321.4	$283.7	$231.2	$209.8	-26.0%
Richmond, VA	$225.5	$233.7	$219.1	$199.4	N/A	N/ A
Riverside-San Bernardino-Ontario, CA	$400.7	$379.5	$287.1	$201.3	$172.5	-39.9%
Rochester, NY	$114.8	$117.9	$108.5	$112.5	$105.6	-2.7%
Rockford, IL	$119.3	$119.3	$115.2	$111.5	$100.0	-13.2%
Sacramento–Arden-Arcade–Roseville, CA	$374.5	$342.8	$258.5	$187.9	$169.3	-34.5%
Saginaw-Saginaw Township North, MI	N/A	$82.1	$65.4	$43.9	$30.3	-53.7%
Saint Louis, MO-IL	$148.4	$145.4	$121.4	$113.7	$100.9	-16.9%
Salem, OR	$212.9	$228.3	$218.5	$198.0	$200.0	-8.5%
SaltLakeCity, UT	$203.0	$232.0	$225.7	$225.4	$230.1	1 .9%
SanAntonio, TX	$141.7	$153.2	$149.8	$143.4	$148.3	-1.0%
San Diego-Carlsbad-San Marcos, CA	$601.8	$588.7	$459.0	$332.8	$323.2	-29.6%
San Francisco-Oakland-Fremont, CA	$752.8	$804.8	$701.7	$487.1	$402.0	-42.7%
San Jose-Sunnyvale-Santa Clara, CA	$775.0	$836.8	$780.0	$525.0	$450.0	-42.3%
Sarasota-Bradenton-Venice, FL	$334.3	$310.9	$262.3	$178.1	$155.2	-40.8%
Seattle-Tacoma-Bellevue, WA	$361.2	$386.9	$372.3	$325.9	$315.2	-15.3%
Shreveport-BossierCity, LA	$132.2	$135.6	$131.5	$139.2	$136.0	3 .4%
SiouxFalls, SD	$138.0	$144.5	$136.0	$142.4	$95.5	-29.8%
SouthBend-Mishawaka, IN	$92.7	$90.7	$80.9	$80.8	$61.8	-23.6%
Spartanburg, SC	$126.7	$128.6	$130.3	$120.8	$109.1	-16.3%
Spokane, WA	$184.1	$193.8	$185.0	$185.9	$180.0	-2.7%
Springfield, IL	$105.4	$109.0	$107.2	$96.7	$111.4	3 .9%
Springfield, MA	$209.6	$211.9	$198.1	$186.4	$170.1	-14.1%
Springfield, MO	$124.8	$122.6	$120.9	$117.1	$116.3	-3.8%
Syracuse, NY	$116.8	$121.8	$110.3	$114.1	$113.7	3 .1%
Tallahassee, FL	$177.5	$179.5	$173.3	$150.1	$156.0	-10.0%
Tampa-St.Petersburg-Clearwater, FL	$228.9	$214.9	$184.7	$151.5	$135.3	-26.7%
Toledo, OH	$110.0	$106.6	$89.7	$75.6	$65.5	-27.0%
Topeka, KS	$106.1	$111.9	$103.3	$104.8	$106.5	3 .1%
Trenton-Ewing, NJ	$289.6	$307.1	$288.2	$247.8	$252.5	-12.4%
Tucson, AZ	$244.9	$244.8	$221.0	$185.9	$176.4	-20.2%
Tulsa, OK	N/A	N/A	$122.2	N/A	N/A	N/A
Virginia Beach-Norfolk-Newport News, VA-NC	$216.0	$226.8	$219.0	$210.0	$201.0	-8.2%
Washington-Arl.-Alexandria, DC-VA-MD-WV	$431.0	$430.8	$372.5	$295.1	$279.4	-25.0%
Waterloo/Cedar Falls, IA	$108.9	$112.8	$104.0	$105.2	$97.3	-6.4%
Wichita, KS	$114.9	$115.6	$112.7	$118.2	$108.7	-3.5%
Worcester, MA	$281.7	$274.6	$248.2	$217.0	$189.6	-23.6%
Yakima, WA	$136.5	$156.5	$148.4	$145.9	$143.5	-3.3%
Youngstown-Warren-Boardman, OH-PA	$81.5	$78.9	$67.7	$61.7	$51.2	-24.4%
N/A-not available Source: National Association of Realtors

 

Builders are willing to cut profits to attract customers with assets

Derrick Penner
Sun

As home prices and retirement investments take a dive across North America, housing developers are changing strategies just to stay in the game.

Vancouver Island developer Dave Steele and his partners are betting that by making a dramatic shift in their expectations for a 62-unit, beachfront, resort-style project near Qualicum Beach, they’ll be able to build some houses while others have stopped.

“Our philosophy is that we want to be there,” Steele, a partner in Qualicum Landing Developments Ltd., said in an interview, to catch a slice of the demographic trend that is seeing nearly 10 million Canadians (some 1.3 million of them British Columbians) roll toward retirement.

However, to “be there” in the current market means squeezing margins and exploiting the more competitive market for construction trades to reduce prices on the initial phase of the project some 27 per cent from when the firm first drew up its plans two years ago.

Qualicum Landing is now marketing three-bedroom houses for $399,000. It originally hoped to sell them at $549,000. Larger two-bedroom-and-den houses with garages — with initial prices penciled in at $679,000 — are being marketed for $499,000.

“Obviously the economics aren’t as good as they were two or three years ago,” Steele said, but their hope is that setting lower prices now will secure a spot in the market and they’ll make up some of that margin in future phases once property values start rising.

The Parksville Qualicum area, like other parts of the province, has seen its sales fall, prices drop and builders put projects on hiatus.

Realtors sold 41 homes in March, as recorded through the Multiple Listing Service, down two per cent from the same month a year ago. That followed from February, which saw the region rack up 25 sales, a one-third drop from the same month a year ago.

Jim Hoffman, director for Parksville-Qualicum on the Vancouver Island Real Estate Board, said that the market seems stable after a slow, snowy winter, but inventories keep rising.

Sales in the Parksville-Qualicum area, while slower than the previous year, started off more briskly than Hoffman expected this spring.

“Buyers are in control, and they’re going to pick and choose,” Hoffman said, which he expects will result in further “very slight” price decreases for the balance of 2009.

Alberta buyers “with a pocket full of oil money” are not a big part of the market now, Hoffman said, because they are having a tough time selling their existing homes.

“It seems to be getting back to a regular market before the boom.”

Real estate markets have come off of their peaks, but people can’t just focus on the downside of the correction, David Baxter, an economist and demographer with the Vancouver-based Urban Futures Institute, said in an interview.

In a crisis, such as the world financial crisis that erupted last fall, he added, people tend to think the crisis “is going to be forever.”

“Yeah, people lose sight of where we’re going,” Baxter said, which is towards a long wave of baby boomers washing ashore on the beach of retirement and a continually growing population through immigration.

That, Baxter added, will be the core of housing demand into the future. And despite the recent financial meltdown that saw the collapse of stock markets wipe out investments gains for many, he said most of the boomers closest to retirement will likely still be okay.

“The big thing is changed expectations,” Baxter said. “Certainly, again, there are specific individuals who are taking a big hit because of the way their investment portfolios were structured.”

“That will change how they conduct themselves in the future. It will be probably not what they’d wished, but probably what a long-term trend line said you were going to get.”

Boomers, particularly those born between 1949 and 1953 — of which there are almost 2.2 million (300,800 in B.C.) — own almost all the equity in their homes.

“I can’t give you the strong ‘this is the boomer demographic to go after,’ ” Baxter added, “except to say it’s certainly there, and they have coin.”

The peak of the boom — the nearly 2.8 million (almost 362,000 in B.C.) — were born between 1959 and 1963.

The difficulty, Baxter said, is that boomers who will remain healthier for longer than their parents, will be more likely to be capable of maintaining their existing homes and less likely to move to retirement retreats.

“What we do find, though, is that people will move as a lifestyle choice,” Baxter said, “not as an imperative.”

And many in the leading edge, Baxter added, will be the boomers who bought homes a long time ago and have not been affected by the paper gains and losses of the latest real estate boom and subsequent correction.

“There certainly is a segment of the market that will move on a discretionary basis,” Baxter said. “And if somebody taps into that, it can be huge for them.”

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