Bare lot priced near $1 million

Province

Houses in Vancouver East and North Vancouver remain relatively affordable but single-family homes on Vancouver’s west side and in West Vancouver are increasingly beyond the reach of many buyers, a new survey says.

Across Vancouver, detached bungalows were the star performer in the first quarter, posting a year-over-year increase of 21.8 per cent to an average of $906,045, according to a Royal LePage house price survey released Thursday.

“Single-family homes on Vancouver’s west side are the hot ticket,” said Chris Simmons, owner of Royal LePage Sunshine Coast. “They’re a diminishing commodity, due to zoning changes to allow for higher density. A bare lot on the west side can now cost up to $1 million.”

In North Vancouver, standard condos climbed 13.8 per cent year-on-year to $330,000. But that’s an affordable price compared with other Vancouver markets, Royal LePage said.

Detached bungalows in North Vancouver rose 22.3 per cent to an average of $740,000.

Across the nation, the housing market was generally buoyed by strong consumer demand in the first quarter of 2010, even though it experienced uneven growth, according to Royal LePage.

“The first quarter of 2010 continued where 2009 left off, with more Canadians enthusiastically participating in a rejuvenated residential real-estate market,” said Royal LePage Real Estate Services’ CEO Phil Soper.

“One of the earliest sectors of the economy to return to growth after the difficult recessionary period, the housing sector has been a prime beneficiary of low borrowing costs and improving consumer confidence.”

House prices were up across all key housing types surveyed, with the average price of a detached bungalow in Canada rising 11 per cent to $329,209 in the first quarter compared to the first quarter a year earlier. Standard two-storey homes rose 10.3 per cent to $365,141 and standard condominiums increased 10.9 per cent to $228,963.

The survey, which looks at seven types of housing in more than 250 neighbourhoods, found that there were three different trends across the country.

The first pattern, seen in urban centres such as Toronto, Vancouver and Victoria, was a roller-coaster effect in which prices dropped sharply then rose dramatically to levels that exceed pre-recessionary prices.

The second trend saw non-stop growth in markets such as Halifax, Ottawa, Regina, Saint John, St. John’s and Winnipeg, while the third saw level markets, where house prices have remained relatively unchanged in Calgary, Edmonton, Moncton and Montreal.

However, the report notes that price increases in all markets are expected to ease in mid-to late-2010.

“Even in our most frenzied pockets of market activity, the inevitable rise in interest rates coupled with home-price appreciation will rein in demand as affordability erodes,” said Soper.

“Expect house prices to continue to rise, but the rate of appreciation should ebb steadily, month by month, throughout the remainder of the year, as balance returns to the industry,” he added.

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Province

House prices in the Greater Vancouver region hit record highs in March. The Real Estate Board of Greater Vancouver said its benchmark price for all residential properties jumped 20.3 per cent to $584,435 from $485,845 the same month a year earlier.

“This price is 2.8 per cent above the previous high point in the market in May 2008 when the residential benchmark price sat at $568,411,” it said. Sales of all property types climbed 38.5 per cent last month from March 2009, and 4.7 per cent from March 2008, it said.

The Fraser Valley Real Estate Board said its benchmark price for detached homes in March rose 11.9 per cent to $514,787 from $459,841 for the same month a year earlier.

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Climbing rates and new taxes have housing market bubbling

Garry Marr
Sun

Lynne Engelman and Kevin Giddings have less than 120 days to find a home.

The Calgary couple won’t be homeless if they strike out but they will be without a near-record-low five-year mortgage rate. They were pre-approved for the 3.69% guaranteed rate just before all the major banks jacked up their rates last week.

If they had to go to the bank today to borrow, the five-year rate would be more like 4.25% and that figure is expected to rise in the next four months.

“We knew rates wouldn’t continue to be at these all-time lows so I said, ‘let’s lock in’ and hopefully we can find a home,” said Mr. Giddings, who financed his first home with a variable-rate mortgage that now has a rate of 1.45%.

Rising interest rates on the long end are just one more catalyst for a spring housing market expected to reach a feverish pitch.

Throw in new mortgage rules that go into effect April 19 which will make it tougher to borrow in some cases, a new harmonized sales tax (HST) in Ontario and British Columbia and a likely Bank of Canada hike in short-term interest rates as well, and buyers are getting panicked.

“We’ve started looking. We found a place but ended in a bidding war,” said Mr. Giddings, who is looking to upgrade to a larger house, but isn’t desperate to buy. If the couple doesn’t buy a home in the 120-day period and face higher interest rates, “it might change our decision,” he added.

Inventory levels remain low across the country, even after three straight months of supply trickling up. In February, the Canadian Real Estate Association said there were 4.7 months of inventory in the system on a seasonally adjusted basis, based on the rate of sales. Sales activity in February actually dropped 1.5% compared with January, but year-over-year actual sales for the first two months of 2010 were up 44.2% from a year ago.

Low supply and strong demand continue to goose prices, with the average home selling for $328,440 this year, an 18.2% jump from a year ago.

Doug Porter, deputy chief economist with Bank of Montreal, said the latest interest rate move on the part of the banks has exacerbated the situation. “When we first get a whiff of real mortgage rate hikes, it pushes any fence-sitters,” he said.

“If anything, it will heighten an already strong spring market.”

Gary Siegle, regional manager with Invis Inc., said the mortgage market has been “hectic” since the banks started raising rates last week.

“I would say volume was up 50% because of [the rate hike],” said Mr. Siegle, adding lenders have also been sending out the word that anyone pre-approved for a deal must have a signed offer by April 19 to qualify under tougher new mortgage rules.

The new federal guidelines require anyone buying a home with less than 20% of the purchase price for a downpayment to qualify based on the posted rate for a five-year mortgage, now at 5.85%. For terms longer than five years, consumers can qualify based on the actual rate on their contract.

” The new rules are going to absolutely disqualify some people but won’t impact everybody in the marketplace,” says Mr. Siegle.

But they do provide further incentive to get a deal done now.

Another deadline looming for home buyers is the addition of HST in Ontario and British Columbia on July 1, which will add about $2,500 to $3,000 to the average purchase.

Timing the housing market is always a tough game to play, but there is no question that if you have waited for this spring before deciding to buy, your timing is off.

But does an overheated spring housing market mean a possible crash come fall?

“There is a risk of [a greater fall]. I like to believe the underlying economy will have improved and help cushion the blow and the HST is only a factor in half the country,” said Mr. Porter. “But there is an increasing risk that we are going to get a mini boom/bust.”

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7,004 listings were added to the MLS service in Greater Vancouver in March

Derrick Penner
Sun

A jump in new property listings last month should help keep the pressure off Lower Mainland home prices which, during the past year, have been fuelled by historic-low mortgage rates.

An additional 7,004 listings were added to the Multiple Listing Service in the region covered by the Real Estate Board of Greater Vancouver during March.

That figure was up 60 per cent from the same month a year ago, the organization reported Tuesday.

Benchmark prices, the average for typical homes sold, also reached a new all-time high of $584,435 across all property types.

That was up 20 per cent from a year ago and almost three per cent above the previous peak in May 2008.

“We were expecting to see listings increase,” Robyn Adamache, senior analyst with Canada Mortgage and Housing Corp., said in an interview.

“Certainly any time you see prices rising is generally when you see more listings coming on line.”

Adamache added that March’s spike in new listings came sooner and was bigger than expected.

But in general she expects the Greater Vancouver market to float along in conditions that are balanced between buyers and sellers as it has for three months now.

“As we continue to see more listings continue to come on line, that will have a mitigating impact on how quickly prices are rising,” she said.

Adamache said that the total inventory of unsold homes in Greater Vancouver, at 13,538, while up from February, is still not close to the record of almost 20,000 homes set in the fall of 2008.

In the meantime, sales remained at high levels in the Greater Vancouver region with realtors recording 3,137 MLS sales in March, almost 39 per cent above March 2009 levels.

Board president Jake Moldowan said Greater Vancouver’s March listings were the most in the past 10 months “which translates into more options and variety” for buyers in what is usually a busy spring season.

Sales of detached homes were up the most in the Greater Vancouver region with 1,336 sales, a 49-per-cent increase from March a year ago, but price increases stalled in March.

The benchmark for a detached house hit $800,341 in March.

That was up 23 per cent from the same month a year ago but down .6 per cent from the $800,796 benchmark seen in February.

In the Fraser Valley, market conditions in March remained more in favour of sellers with strong sales.

But a surge of new listings brought the region’s inventory of unsold homes to near peak levels.

Fraser Valley realtors saw 1,565 sales cleared through the Multiple Listing Service in March, up 30 per cent from February and some 56 per cent above last March’s market, which was still in slow recovery from the economic downturn.

“March sales volumes can fluctuate as much as the weather,” Deanna Horn, president of the Fraser Valley board, said in a news release.

“This year’s reached the mid-point between the highs and lows seen over the last decade.

“However, available listings were near the peak, meaning buyers had lots to choose from and were clearly taking advantage of great buying opportunities.”

The Fraser Valley board also saw 3,395 new listings put on the MLS in March. That brought total inventory to 9,828 unsold homes, which is close to available inventory in the same month a year ago.

Horn added that prices in the Fraser Valley are “closing in on the record highs” last seen in the spring of 2008.

The benchmark price for detached houses in the Fraser Valley hit $514,787 in March, up 12 per cent from the same month a year ago.

The benchmark price is an average for typical homes sold.

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Stephanie Armour
USA Today

Home buyers rushed to purchase previously owned homes in February, a shift hailed as the long-awaited start of the spring housing market.

The seasonally adjusted index of sales agreements jumped 8.2% in February to 97.6 from 90.2 in January, the National Association of Realtors (NAR) said.

Although many economists had expected a decline, it turned out to be the second biggest monthly rise on record behind October 2001.

After an anemic winter, home sales are now likely to continue showing steady increases, economists say, as buyers rush to complete purchases before a tax credit of up to $8,000 for first-time home buyers expires April 30. They cite other factors, including more jobs and economic growth, that could continue to propel a housing recovery.

“What we’re starting to see are people who have their eye on the tax credit make some moves,” says Joel Naroff at Naroff Economic Advisors. He predicts home sales will continue growing: “Job growth, the economy is coming back; Realtors are listing — everything seems to be working in the positive side of the cycle.”

Pending sales rose the most in the Midwest, at 21.8% in February from January. In the West, the index fell 4.8% in February. The Northeast rose 9%, and pending home sales in the South increased 9.2%. The data reflect contracts. Closings usually occur one or two months later.

Cheap home prices could also be drawing bargain-hunting buyers. Home prices in January fell 0.4% from December on an unadjusted basis, according to a report last week from the Standard & Poor’s/Case-Shiller index.

Anecdotal reports suggest March may also show gains in home sales, says Lawrence Yun, chief economist at NAR. That would be critical in helping reduce the overall amount of housing inventory. High levels of inventory dampen prices by reducing competition for homes.

Yun says that there may be some decrease in home sales in June through August, after the tax credit expires, and that higher interest rates near the end of the year could depress sales. Currently, the average interest rate on a 30-year, fixed mortgage is 5.08%, Freddie Mac says. “I’m optimistic,” Yun says. “By year end, interest rates could be closer to 6%. But with the improving economy and buyer confidence, that shouldn’t be a hindrance.”

The first-time home buyer tax credit applies to homes purchased on or before April 30 and is equal to 10% of the home’s purchase price up to a maximum of $8,000. Congress also approved a credit for move-up home buyers up to a maximum of $6,500. The credits apply only to homes priced at $800,000 or less.

The best agents don’t need to worry about proposed changes

Shelley Fralic
Sun

In 1984, my growing family decided it was time to leave our cosy Surrey co-op townhouse and buy our first single-family home.

We started the search in Surrey, which was more affordable, even though my husband and I were born and raised in Vancouver and longed to be north of the river, where commuting was less stressful, where most of our friends and family lived.

I called a local Newton realtor, and told him what we were looking for — price range, area, square footage, number of bedrooms and so on — and, more importantly, what we weren’t. At the top of my don’t bother-showing-us list? Split-level homes, and busy streets.

The first home he showed us was a split level. The second was a house adjacent to the King George Highway. If that wasn’t bad enough, he didn’t know the age of the house or the lot size but said I would like it because it had a great kitchen, which amused my husband who was the cook in the family.

We fired him, and with a noticeable dip in house prices, decided to try New Westminster.

I phoned the New West Re/ Max office and told the receptionist: “I need a realtor who does their homework and isn’t going to treat me like the brain-dead little woman of the house.”

On the phone came Roland Kaulfuss, who clearly drew the short straw and claims to this day that my request was a little more blunt than that.

Twenty-six years later, he is still my realtor — I have bought three houses and sold one with his help, and have referred many friends and relatives to him — and the reason is this: He is patient, honest, professional, knowledgeable and doesn’t try to peddle mutton dressed as lamb.

Today, I am a real estate junkie, as are many British Columbians, spending my weekends at open houses, scouring the online MLS listings, watching the market and mortgage rates rise and fall and rise again.

If you are one, too, you’ll know there are as many bad realtors as there are good ones, not unusual in any business, of course, but somehow more grating when house prices are so high that the person you hire to sell yours can earn a six-figure commission just by showing up and unlocking the front door.

How, many ask, does the industry justify a paycheque of $21,075 — the commission on $663,000, the average price of a Metro Vancouver property today — for what may be a house that stays on the market for only days, that virtually sells itself?

But that may be changing. The federal Competition Bureau wants to overhaul the national Multiple Listing Service, which is controlled by the Canadian Real Estate Association and allows only licensed realtors who are members of local real estate boards to list their properties.

The bureau wants to loosen the restricted access of the MLS, a 50-year-old operation that reportedly represents 90 per cent of Canadian house sales, and has already forced the association to give sellers more power over transactions by having listing agents give potential buyers the seller’s contact information, should the seller choose.

Many realtors are a-twitter over any move to open their MLS monopoly, fearing the inclusion of agents who will negotiate far lower residential commissions than the MLS standard, which is seven per cent on the first $100,000, 2.5 per cent on the remainder of the list price.

One wonders what they’re so worried about.

Most buyers and sellers these days, thanks to the Internet, have just as much information going in as the realtor. Anyone can house shop at will, checking comparables, mortgage rates and neighbourhood amenities, accepting and rejecting based simply on what they see online.

Which means realtors no longer hold the power, and haven’t for some time.

That said, most people still prefer to use realtors as middlemen, especially when it comes to the complicated and often costly art of negotiating.

Kaulfuss agrees: “None of my clients ever hired me because they wanted to directly deal with prospective buyers. My clients want me to be the go-between and negotiate on their behalf.”

If you’re a lookie-loo of any stripe, you’ll have encountered many terrific realtors of late, and just as many more who do or know little, who can’t tell you if there’s wood under the carpet, or where the closest school is or how old the roof/electrical/ furnace is.

You’ll have overheard realtors tell potential buyers that floors are oak when they’re fir, that the siding is cedar when it’s Hardiboard, that the basement is “suite-able” when there’s a six-foot clearance, that all the questions they are asking are answered on the information sheet available at the front door.

If those lazy and seemingly overpaid agents give the profession a bad name, then that’s a reality the industry needs to address, and if changes to the MLS beef up the competition and make some realtors pull up their socks and work a little harder, with negotiable commissions as an incentive, then that’s a good thing for consumers.

Adds Kaulfuss:

“A good realtor who is professional and knows what they are doing does not have to worry about any consequences that may come from the current situation with CREA and the Competition Bureau.”

© Copyright (c) The Vancouver Sun

Cain Burdeau, Associated Press Writer
USA Today

NEW ORLEANS — Thousands of U.S. homes tainted by Chinese drywall should be completely gutted, according to guidelines released Friday by the Consumer Product Safety Commission.

The guidelines recommend that electrical wiring, outlets, circuit breakers, fire alarm systems, carbon monoxide alarms, fire sprinklers, gas pipes and drywall need to be removed.

“We want families to tear it all out and rebuild the interior of their homes, and they need to start this to get their lives started all over again,” said Inez Tenenbaum, chairwoman of the commission, the federal agency charged with making sure consumer products are safe.

About 3,000 homeowners, mostly in Florida, Virginia, Mississippi, Alabama and Louisiana, have reported problems with the Chinese-made drywall, which was imported in large quantities during the housing boom and after a string of Gulf Coast hurricanes.

The drywall has been linked to corrosion of wiring, air conditioning units, computers, doorknobs and jewelry, along with possible health effects. Tenenbaum said some samples of the Chinese-made product emit 100 times as much hydrogen sulfide as drywall made elsewhere.

The agency continues to investigate possible health effects, but preliminary studies have found a possible link between throat, nose and lung irritation and high levels of hydrogen sulfide gas emitted from the wallboard, coupled with formaldehyde, which is commonly found in new houses.

U.S. Sen. Bill Nelson, D-Fla., said the question is who pays to gut the homes.

“The way I see it, homeowners didn’t cause this. The manufacturers in China did,” Nelson said. “That’s why we’ve got to go after the Chinese government now.”

Southern members of Congress have sought to make it easier to sue Chinese manufacturers and to get the Federal Emergency Management Agency to help homeowners pay for costs not covered by insurance. They also say the U.S. needs to pressure the Chinese government, which allegedly ran some of the companies that made defective drywall.

About 2,100 homeowners have filed suit in federal court in New Orleans against Chinese manufacturers and U.S. companies that sold the drywall. U.S. District Judge Eldon Fallon is expected to rule soon in a pivotal case against the Knauf Plasterboard Tianjin., the only Chinese company that has responded to U.S. suits.

Separate claims by thousands more homeowners against Chinese manufacturers are pending, said Jordan Chaikin, a Florida lawyer whose firm represents about 1,000 homeowners.

They are “continuing to live in their homes with Chinese drywall, patiently waiting for this thing to be resolved so they can move on with their lives,” Chaikin said. “We’re not waiting for the government to move quicker than we are in the courts.”

In some cases, homebuilders have paid to gut and rewire homes. In others, homeowners who can afford it have paid for the work themselves. Knauf Plasterboard has offered to pay for remediation in homes where its defective drywall was installed.

Daniel Becnel, a New Orleans lawyer representing Chinese drywall plaintiffs, including Sean Payton, the head coach of the Super Bowl champion New Orleans Saints, said the government guidelines issued Friday were “word for word what our experts said.”

He also said Congress should give homeowners grants to cover the cost of home gutting.

“Get these people out of this environment,” he said. “You’re making these people sicker and sicker and sicker. You will have long-term effects.”

In Cape Coral, Fla., Joyce Dowdy, 71, and her husband Sonny, 63, plan to move out of their $150,000, 1,600-square-foot home while it is gutted to get rid of tainted Chinese drywall.

Joyce Dowdy said she suffers from nose bleeds and her husband has a persistent cough. They blame the drywall.

“We can’t live like this anymore,” Joyce Dowdy.

They’re borrowing money to do the gutting, which means that instead of a mortgage-free retirement they will be paying monthly bills cover the costs of repair.

“It’s costing us as much as we paid for the house,” Joyce Dowdy said. “But we can’t just walk away … Our house is worth nothing at the moment.”

But Randy Noel, past president of the Louisiana Home Builders Association, said the Chinese drywall problem has been exaggerated. He called the new guidelines “overkill.”

“Nobody has come up with a house yet that has caught on fire from the Chinese drywall, no one has come up yet with a house that leaks water or gas because of Chinese drywall,” he said.

He has examined numerous homes containing Chinese drywall and found minor problems, he said.

“It’s a black soot on top of the copper, brass and silver,” he said. “You wipe the stuff off and it looks as good as new.”

Associated Press Writer Brian Skoloff in West Palm Beach, Fla., contributed to this report.

Copyright 2010 The Associated Press. All rights reserved

PROJECT PROFILE: New Westminster tower homes’ ‘green’ proximities attract those embracing sustainability

Province

Marinus at Plaza 88 is the third component of a vision that developer Mike Degelder has been carrying around for about 20 years ago. Azure 1 and Azure II are now occupied, both 32-storey high-rises. Marinus is ready for occupancy. And Degelder has a fourth highrise planned.

Once that final highrise is occupied, Plaza 88 will be the village, or more, of Degelder’s dreams: 900 households living over, if not all the shops and services a household could want, then most and, further, living above a SkyTrain station and, therefore, with no reason to commute in a private vehicle, destination permitting.

“We’re trying to alleviate transportation [and] go green in the grand scheme of things,” sales manager Colin Chin says. “It’s sustainable, and it’s the concept for the future.”

Additionally Marinus buyers who accept an unassigned parking space — as opposed to a reserved spot — will see the price of their homes s reduced by $10,000.

All involved are making it very easy for households to do their “green” bit: Plaza 88 is a riverfront development and in the view-homes the views of the Fraser and the New Westminster Quay’s commercial hub are all-encompassing, with layouts designed to optimize prospects.

Granite tops kitchen and bathroom counters; stainless steel clads the appliances; the porcelain tile in the entryways and kitchens is imported; and the vanities in the bathrooms number two.

Real estate agent Chin has bought new homes in the development, and he’s been schooled in the politics of negotiations with six land owners and the city of New Westminster through various incarnations of its city council. While one drugstore chain is already on board as a tenant, Chin says he’s confident that the development’s size and proximity to transit will make it a magnet for more retailers and residents.

“The big defining difference of any condo is what’s outside the window and what’s directly outside — or in this case, right downstairs.”

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