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Pre-conpletion priecs assures value

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Rudy Nielsen
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Excerpted from The Landcor Report – Q3 2012 Residential Sales Summary. This report summarizes all residential sales transactions occurring in BC between July 1st and September 30th of 2012. All numbers are based on BC Assessment data available as of November 12th, 2012.

Here in Canada, in BC and especially in the Lower Mainland, the residential real estate markets have piled on the price gains for years. Meanwhile the feckless homeowners have piled up the debt, mortgage and non-mortgage, to  record heights and heft.

Something must give, although the when and extent is debatable . . . something will give.

The Lower Mainland and the Capital Regional District a.k.a. Victoria and environs, have already taken solid blows. Local real estate boards have year-over-year residential sales off by more than 32 percent in Vancouver, off 8.3 percent in the CRD. In turn, the Teranet Index has y-o-y prices off by 2.6 percent in the CRD and a mere 1.4 percent in Vancouver.

Call it self-fulfilling or natural cycles of peaks and falls, but there’s a creeping recognition that markets have peaked, with estimates of the correction-to-come ranging from 10 to 15 percent among the optimistic economists (yes, that’s an oxymoron) to up to 40 percent among the most grumpy.

Predictions are all over the place: status quo, slight easing, that Chicken-Little collapse. If the latter, or even sort of, it will put a huge cohort of financially stretched homeowners into negative equity and squash the financially weak and/or ill-prepared.

Underpinned by the shifting sands of historic low interest rates, bedded in the reassurance of years of rising home prices and steady “paper” gains, homeowners and others blithely pile on new debt. The haystack is rising, even as real estate markets finally go soft, their foundation bales chewed out . . .

. . . heads up!

When markets shift and what had been ever-rising prices appear to stall, many homeowners, retired and/or otherwise unencumbered, blessed with lots of equity and itchy feet, will decide to cash out. However, if these homeowners’ timing is off, would be buyers having already tested the wind, are more prone to haggle, even as the increasingly petulant homeowners hold out. Sales volumes fall, listing counts go up and later or sooner, a “correction” becomes self-fulfilling as prices adjust to the new market realities. Demand and supply; basic economics.

Assuming the homeowners see their abodes as “homes” and not “investments” and are there for the long haul  – and can make the payments when interest rates rise  – slipping prices dull the self-congratulatory glow but long-haul pragmatically, no big deal.

However, for newish homeowners who bought with minimum down payments, at market peak, now carrying substantial mortgages vis-a-vis their incomes, it’s a very big deal.

As prices cool, these buyers might be having second thoughts. Especially if they’re out in the cold when the weather turns bad and even more so if these feckless folk are carrying excessive “bad” (non-mortgage) debt heaped on when times were good and interest rates rock-bottom low.

In September, TD updated its forecast for the provincial housing market, predicting that average prices for existing or resale homes in BC will slip 8.9 percent in 2012, well above the bank’s earlier provincial forecast of a 4.6-percent decline overall. The revision is based on the unexpectedly deepening slowdown in the Metro Vancouver market.

According to TD Bank, British Columbia is the only province experiencing an average decrease in resale values year-over-year. TD’s Jacques Marcil opined the market was overheated, it needed cooling and, good news, the word “bubble” is no longer synonymous with “Vancouver housing market.” In a Globe article Marcil was quoted as saying: “That’s a good sign, because the market is adjusting gradually and in a moderate way, and in a way that won’t cause major concern in the medium term about the growth prospects for BC.”

© 2012 Real Estate Weekly

Sales and Price Data for New and Resale Residential Transactions

Decision expected next week on North Vancouver condo project

Brent Richter
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The City of North Vancouver council is expected to decide next week whether to approve an ambitious redevelopment of the Safeway store at Lonsdale Avenue and 13th Street.

Onni Group is proposing to build 344 condo units in two towers of 17 and 24 storeys, atop a two-storey commercial podium including a new grocery store and 40,000 square feet of office space.

The proposal would almost double the density allowed by the official community plan, and follows council rejection of a 2010 Onni plan for the site that was even larger.

In exchange for approval for the increase in density, Onni is offering 44,000 square feet of non-profit housing (approximately 12 units), child care space, a $1-million contribution to the city’s amenity fund, a connection to the Lonsdale Energy Corporation (the city’s area heating plant), infrastructure upgrades to the surrounding streets and utilities, $250,000 in public art, use green building standards, and additional commercial space.

Onni had the backing of most in the crowd earlier this week as city council sat through six hours of public comment.

Many speakers said they looked forward to the addition of child care space and non-profit housing, the boost that would come to the city’s core with such a massive revitalization project, and the potential to bring down housing costs in the city by increasing supply.

Onni also won support from members of the business community, several of whom said that a lack of commercial office space is driving large employers off the North Shore.

And the president of the neighbouring Grande condo’s strata council said the majority of her building’s residents approve of Onni’s plan, and that it was much improved from the 2010 design, which featured three 17-storey towers.

But critics argued the new proposal is too tall, too dense and too ugly.

“I promised myself 12 years ago I would not come back to council, but on Oct. 26 I opened the North Shore News and saw this monstrosity facing me. I was really angry and I thought I should come address it,” said former councillor John Braithwaite, who was one of the first to speak.

Braithwaite urged council to hold out until Onni came up with a more suitable project.

“It’s got to be better designed. Incidentally, developers shouldn’t be telling this council, or any council, what they’re going to give us and what they’re going to get. You’ve got to listen to what the people are saying,” he said.

High on the list of concerns for even cautious supporters of the proposal was traffic. The plan calls for 55 per cent of vehicle traffic to enter the site via westbound 13th Avenue, and 45 per cent, including all delivery trucks, to enter via 14th. Residents called that a traffic nightmare for what is now a pedestrian-friendly street.

© Copyright (c) North Shore News

DDF offers a new way to market your listings

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The Data Distribution Facility (DDF) offers REALTORS® a new way of marketing listings across the country. With the DDF, you’ll be able to distribute your listings through three different data feeds that will generate more online exposure.

The DDF is a marketing tool offered by the Canadian Real Estate Association (CREA) at no extra cost to members. It’s a permissions-based distribution system that starts with boards, then brokerages. As we’ve opted in to the service, it’s now available for individual brokerages to decide if and to what extent they’ll make the DDF available to representatives in their offices.

Through the DDF dashboard, participating brokerages (and if they so choose, their representatives), will be able to control their listing data feeds through a dashboard on their computer.

The DDF involves three different listing data feeds:

National Shared Pool/National Franchisor Pool – Participating brokerages can distribute their listings to franchisor and members websites across the country

Member Websites – Participating brokerages can receive a feed with only their representatives’ listings, and allow their representatives to display a feed with their own listings on their websites.

Third-Party Websites – Brokerages can distribute their listings to approved third-party websites, and they can choose to allow their representatives to do the same.

To date, 96 brokerages across the country have opted-in to the National Shared Pool and 74 brokerages are opting in to the National Franchisor Pool, including Sutton, Century 21 and Royal LePage. Another 40 boards have opted in to the Member Websites feed.

The third-party component has 49 brokerages opted-in, collectively distributing about 6,500 listings to websites like Zoocasa, Homefinder and Point2Homes. Recently approved third-party websites include Streetseed, HousingBlock, Realestatechannel and HomeHippo.

All data that flows through these feeds originates from the MLS® system. So if something in the listing has changed, the change only needs to be made within the system and the update will apply to the listing wherever it is being displayed. The integrity of the data is protected and consistently branded with the REALTOR® and MLS® branding.

CREA has created a DDF resource page which you can find in the Technology Products section of their www.realtorlink.ca homepage. There are documents and videos that explain more about how the DDF works, and a link to the DDF Training Centre. The Training Centre contains documents, tutorials, webinars, and a link to the DDF dashboard.

How can you make use of the DDF as an individual REALTOR®? First, your brokerage needs to opt in. If your brokerage does not opt in to the DDF, you will not be able to use it. Some brokerages, for example those that specialize in a highly localized, specific product type, may not need or want greater national exposure. If your brokerage has opted-in to the DDF, your broker will decide the level of access you’ll have.

There is also an analytics component to the DDF that will show you data on the number of times your listing has been viewed, when and from which websites.

Note that we held back the initial release of the DDF to our members after our IS staff identified some performance issues within the system. We brought these issues to CREA, and while we feel these issues have been resolved, this is a new program and some performance issues may still exist.

BCREA 2012 Fourth Quarter Housing Forecast

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BC Multiple Listing Service® (MLS®) residential sales are forecast to decline 9.8 per cent to 69,200 units this year, before increasing 8.3 per cent to 74,920 units in 2013. The fifteen-year average is 79,000 unit sales, while a record 106,300 MLS® residential sales were recorded in 2005.

“Despite stronger consumer demand in the interior, BC home sales will fall short of last year’s total,” said Cameron Muir, BCREA Chief Economist.

“A moderating trend in Vancouver has recently been exacerbated by tighter high-ratio mortgage regulation. The resulting decline in purchasing power has squeezed some potential buyers out of the market. However, strong full-time employment growth, persistently low mortgage interest rates and an expanding population base point to more robust consumer demand in 2013.”

“While the average MLS® residential price is forecast to decline 7.6 per cent to $518,600 this year, the change is largely the result of luxury home sales returning to more normal levels after an unusually active 2011,” added Muir. In addition, the Lower Mainland’s share of provincial home sales is expected to decline to 57 per cent this year from 62 per cent in 2011.The average MLS® residential price in BC is forecast to edge up 0.7 per cent to $522,000 in 2013.

Source: BC Real Estate Association

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