Martin Crutsinger, AP Economics Writer
USA Today

WASHINGTON — Sales of new homes plunged to a record low in January, underscoring the formidable challenges facing the housing industry as it tries to recover from the worst slump in decades.

The Commerce Department reported Wednesday that new home sales dropped 11.2% last month from December, to a seasonally adjusted annual sales pace of 309,000 units, lowest level on records going back nearly a half century.

The big drop was a surprise to economists who had expected sales would rise about 5% over December’s pace.

The January decline will heighten fears about the fledgling recovery in housing. Economists were already worried that an improvement in sales the second half of last year could falter as various government support programs are withdrawn.

The sales decline in January marked the third straight monthly drop following decreases of 3.9% in December and 9.5% in November.

January’s weakness was evident in all regions except the Midwest, where sales posted a 2.1% increase. Sales were down 35% in the Northeast, 12% in the West and almost 10% in the South.

The drop in sales pushed the median sale price down to $203.500. That was down 5.6% from December’s median price of $215,600, and off 2.4% from year-ago prices.

New-home sales for all 2009 fell almost 23% to 374,000, worst year on record. The National Association of Home Builders is forecasting that sales will rise to more than 500,000 this year, an improvement from 2009 but still far below the boom years of 2003 through 2006, when builders posted more than 1 million new home sales each year.

The unexpectedly large drop in January activity will increase concern that the housing rebound could falter in coming months as the government withdraws the support it has used to try to bolster the housing market, which stood at the epicenter of the country’s overall recession, the worst downturn since the 1930s.

A $1.25 trillion program from the Federal Reserve which has held down mortgage rates is set to end March 31 and tax credits to bolster home buying are scheduled to expire at the end of April.

First-time home buyers could qualify for a credit of up to $8,000 while homeowners who have lived in their current properties at least five years could claim a tax credit of up to $6,500 if they move into another home.

Though the overall economy started growing again this past summer, economists are worried because unemployment remains high. This weakness is causing consumers to shy away spending, especially on big-ticket items such as homes.

The Conference Board reported Tuesday that its Consumer Confidence Index fell almost 11 points to 46 in February, pushing the index down to its lowest reading since last April. At 46, the index is a long way from the 90 reading that economists generally view as depicting healthy consumer attitudes.

Copyright 2010 The Associated Press. All rights reserved

Derrick Penner
Sun

British Columbia‘s commercial real estate market is starting to look more like a seller’s market moving through 2010, with more capital available for investors, and investors willing to accept lower returns, according to one commercial realtor.

Avison Young this week released its 2009 year-end results, which saw commercial real estate transactions gather steam in the latter half of the year, particularly among retail offerings.

Avison Young counted 16 retail-property sales worth more than $5 million in the second half of 2009. The largest were the sale of Surrey’s Grandview Corners for $182 million to RioCan REIT and the Canada Pension Plan, and the sale of a half-interest in Nanaimo’s Woodgrove Centre for $103 million.

“I think it’s going to be a very active market [in 2010],” said Bob Levine, a principal in Avison Young’s Vancouver office.

“There’s lots of [investment] money looking, and probably more vendors out there than there have been for a couple of years, because the perception is that [capitalization] rates are reasonably low.”

A lower capitalization rate means that buyers are willing to pay higher prices and accept a lower rate of return. Capitalization rates at the start of 2010 are almost as low as they were at their lowest point in early 2008, Levine said.

Levine said the return of institutional and investment-trust capital to the market has helped drive demand for investment real estate.

The recovery of stock markets has bolstered the stock holdings of institutional investors, giving them more leeway to consider real estate investments, Levine said. Likewise, he added, real estate investment trusts have been able to raise new pools of capital.

Levine said banks have even been more willing to extend commercial mortgages, albeit with substantial down payment requirements. “I would say private capital has always been [in the market], but the institutional capital and public capital has come available because of the rebound in the stock market,” he said.

Levine said he is untroubled by the shrinking capitalization rates, particularly in Vancouver, because there is still relatively little supply of unleashed commercial properties available for buyers to purchase.

In total, for sales of commercial property worth more than $5 million, Avison Young counted $1.36 billion worth of sales in B.C. in 2009, up from $1.27 billion in 2008.

© Copyright (c) The Vancouver Sun

Raphael Alexander
Sun

I wrote in early January about the “bubble” economy in British Columbia, which, despite the Olympics-related building, still resulted in a massive collapse in the construction industry in tandem with the recession. Construction jobs contracted by 11.9 per cent in the province in 2009, as we were one of the last districts in Canada to feel the effects of the global economic meltdown.

Although January construction numbers are up to 198,600 jobs, it is below the 202,100 jobs from a year ago, and a far cry from the 220,800 jobs during the boom.

The good news is that new construction is on the rise in the province, with the seasonally adjusted annual rate of housing starts reaching 186,300 units in January, a 5.8-per-cent increase from December.

That’s much better than the 149,081 housing units to begin 2009, but the construction starts have progressed steadily until now, according to the Canada Mortgage and Housing Corp. It’s even better than the figure that economists from financial institutions had been predicting.

In cities, housing starts are up 4.4 per cent, and within those numbers the increase of multiple urban starts [like condos] also increased by 5.7 per cent. All of those numbers show a recovery from the recession, with confidence in the housing market improving, and home sales rising again.

But the victory may be short-lived, with experts predicting the bubble will pop when the harmonized sales tax kicks in on July 1.

Homebuyers will likely advance their demand for houses before the HST is implemented, meaning fewer purchases in late 2010 and early 2011.

This is forecast by the Canadian Real Estate Association itself, which says that not only the 12-per-cent HST, but also higher interest rates, which must inevitably rise after historically prolonged lows, will push real estate down in 2011.

B.C.’s housing resale market is forecast to jump 19.8 per cent for 2010, with average home prices going up by 4.2 per cent to $485,500. But the bulk of those sales will be before the HST and the Bank of Canada interest rate revisions.

Interest rate increases are likely to further dampen the housing market in 2011, with an expected decline of 7.1 per cent in the number of units sold. B.C.’s market is forecast to see the largest decline of 12.9 per cent to 88,800 units sold in 2011.

Even though the market is expected to fall in 2011, the prices of homes in B.C. are expected to decline only 1.8 per cent, meaning that investors will still be making a profit with the dip. That means there’s no relief for homebuyers who were hoping the astronomical prices of an average home in Vancouver would go down.

The median sale value of a home in Vancouver in 2009 was $540,900, while median household income was $58,200. According to The Demographia International report which calculates home affordability in an index that divides the price of a home by household income, Vancouver is the most expensive city among 272 metropolitan markets in Canada, the U.S., the U.K., Australia, New Zealand and Ireland.

The “Median Multiple” gives Vancouver an index of 9.3 in affordability, much higher, for instance, than Kamloops, where the median family income is $67,434 while the price of a home is $257,242, giving a Median Multiple of 3.8.

Adrian MacNair is a Vancouver writer who also writes under his middle names, Raphael Alexander.

© Copyright (c) The Vancouver Sun

Tony Gioventu
Province

Dear Condo Smarts: We are travelling to the Olympics and will be looking for vacation property for our family. We have received several packages from developers and vacation properties to review, and they all refer to different types of ownership, the use of property and different types of covenants that prevent us from using our property at our leisure. We have spoken with our lawyer, but need some idea of what to look for in vacation property and what type of conditions we will come across. Should we consider new or pre-owned? Are there pitfalls?

Jay and Del Heilberg, California

Dear Jay and Del: Investing in a vacation property can be broken into a number of types of properties: freehold detached (single-family, non-strata titled home); freehold strata without restrictive covenants (the typical townhouse or apartment-style condominium); freehold detached or strata with restrictive covenants; and several types of shared interest on title such as one-quarter share or time-share.

All types are available in either new or pre-owned properties, but before you make a decision, consider how often you intend

to use the property, whether

you intend to receive any type of income from the property, your initial investment and what your future monthly costs are going to be.

Before you buy, consult with a legal professional about the terms and conditions of the sale, the terms and conditions of management and rental agreement contracts that affect the property and the bylaws of a strata corporation.

The CHOA website hosts a series of spring seminars and a number of information guides on strata properties at www.choa.bc.ca. The B.C. Real Estate Association has helpful information on buying property in B.C. at www.bcrea.bc.ca.

Tony Gioventu is executive-director of the Condominium Home Owners’ Association. Send questions to him at [email protected]

© Copyright (c) The Province

Doing Frank Lloyd Wright proud

Province

The Facts

WHAT: Larkin House East at Windsor Gate, 70 apartments

WHERE: 3105 Lincoln Avenue, Coquitlam

DEVELOPER: Polygon

SIZE: 1 bed +den, 2 bed, 2 bed +den, 872 sq. ft. -1,025 sq. ft.

PRICES: From $259,900

OPEN: Sales centre at 3097 Lincoln Avenue; hours noon -5 p.m., Sat -Thurs

At one time, it was the site of a large mobile home park. But over the next few years, the property between Pipeline Road and Lincoln Avenue in Coquitlam will be transformed into something else entirely — a community of more than 1,400 homes.

That community, known as Windsor Gate, will be noteworthy for its architecturally pleasing mix of styles, ample green space and proximity to public transportation and major thoroughfares, reports Ralph Archibald of the Polygon development company, the province’s largest supplier of residential housing.

One component of the Windsor Gate community is Larkin House, comprised of two four-storey buildings: Larkin House East and Larkin House West.

Last summer, 55 Larkin House West apartments sold in three months. Pre-sales have also been brisk for Larkin House East, partially because the building is now being framed, and because prospects can see the completed Larkin House West homes adjacent to the new offering. (Right now, Windsor Gate is a neighbourhood still in its formative stages, but Polygon will be building the community over the next five years.)

Polygon has taken its architectural cues from the “Prairie Home style” of American architectural legend Frank Lloyd Wright, and adapted them to the Larkin House buildings.

Indeed, Wright-inspired touches can be found throughout. Brick arches, balcony projections, low-pitched roofs, custom exterior light fixtures and precast concrete accents are pleasing to the eye and will add value to the property.

“We’re anticipating that the majority of purchasers for Larkin House East will be first-home purchasers, similar to the homeowners who bought into the earlier building,” says Archibald, Polygon’s vice-president. “We will be bringing some good incentives to reward those who are patient enough to wait in line to buy these homes.”

Polygon will bring resort-style amenities to the Larkin House/ Windsor Gate community by constructing the Nakoma Club, a 15,000-square-foot communal gathering place, which will pay homage to Wright’s open-plan design principals.

An outdoor pool, garden and covered gazebo with gas barbecue will keep residents entertained in the summer months. Inside the clubhouse, there’s a fully equipped fitness studio, big-screen theatre room, indoor basketball court, billiards room, and great room perfect for family and group functions. An on-site concierge will provide a wide array of services for Windsor Gate residents. Construction is due to begin later this year.

“A strong sense of architecture will carry throughout the community, including a dramatic waterfall feature that will be lighted at night on the corner of Pipeline Road and Lincoln Avenue,” says Archibald.

There are five floor plans at Larkin House East ; a small number are one-bedroom apartments, while the majority are two-bedroom and two-bedroom-and-den configurations.

Homeowners can look forward to rich laminate kitchen floors, polished granite countertops, designer ceramic backsplash, a full line of Frigidaire appliances, superb flat-panel cabinetry, and contemporary halogen track lighting.

Storage lockers, a stainless steel fridge upgrade and stacking washer and dryer are optional. Ceilings on the ground floor are nine feet high, and eight feet on the upper floors. Archibald points out that the wraparound landscaping and patios on the ground-floor suites add considerable square footage.

“You’re very close to all of the services you could possible want — indeed, Coquitlam Town Centre is the largest shopping mall in the Lower Mainland,” Archibald says. “There are several schools within easy walking distance, yet the park-like character has been retained.

“Larkin House East’s location and its classic Frank Lloyd Wright [inspired] architecture provide a winning combination for value-seeking homeowners.”

© Copyright (c) The Province

Columbia Street highrise puts yesterday — a historic town — and today — the working river — on its horizon

Claudia Kwan
Sun

InterUrban

Project location: New Westminster

Project size: 18-storey building, 158 apartments

Residence size: 1 bed 605 -853 sq. ft.; 1 bed + den 715 sq. ft.; 2 bed 857 -997 sq. ft.; 2 bed + den 1,078 sq. ft. Prices: 1 bed from $273,000; 1 bed + den from $333,000; 2 bed from $367,000; 2 bed + den $474,000

Developer: Ballenas Project Management

Architect: HR Hatch Architect Ltd.

Interiors: Nood, Ballenas

Sales centre: 14 Begbie Street

Hours: noon -5 p.m. Sat — Thur

Telephone: 604-523-0081

Web: interurbanliving.ca

Occupancy: immediate

—

The 18-storey InterUrban building provides some visual punch to the New Westminster skyline along the Fraser River, spearing upward in a tower beginning with heritage-style brick, transitioning to smooth masonry in the middle and capped by modern steel and glass.

It is a concrete (no pun intended) reminder of the new energy and life being brought to the historic neighbourhood along Columbia Street.

Developer Peter Newall began on the construction side of the industry, working on buildings in Edmonton and in Vancouver’s Gastown.

With his partner in Ballenas Project Management, he segued into development, most notably within the context of this story on the conversion of a post office in New Westminster.

The building now houses the city’s police department, with 45 residences on top.

The City of New Westminster liked the job Ballenas had done, and in 2006, approached it to help with the overall revitalization of the block.

First, Ballenas did a restoration on the heritage building next door to InterUrban’s current location, and in exchange, received a density transfer of 60,000 square feet.

What shape that square footage would take was the subject of considerable debate, and some opposition from residents concerned about the river view being obscured. “We were originally looking for a 23-storey tower, but that was nixed after a tumultuous council meeting or two,” Newall says dryly. However, since there was a fixed amount of density involved, the loss of height simply meant the tower became shorter and wider.

Over a two-year design process, the neighbouring community had some input into InterUrban; that overall sense of ownership and engagement is something Newall believes makes New Westminster great. “There are great neighbourhoods like Sapperton, Brow of the Hill, and Queen’s Park that have very active, involved neighbourhood associations,” he says. “The city has history, and geographically, it’s the centre of the Lower Mainland.”

There is a subtle pride that permeates the InterUrban project: pride in the building itself, and in the neighbourhood in which it is located. The marketing campaign goes beyond pride, centred around the tag line ‘I love New Westminster.’

Dan Thomson, marketing director for MAC Marketing Solutions, says that for some reason over the past few decades, New West has been painted with a stigma of stagnancy, a severe lack of cool. “But it’s not actually true,” he points out.

“There are little, interesting mom and pop shops up and down Columbia, and a great, upscale drink lounge within walking distance from InterUrban,” says Thomson. New West Quay, which is under new ownership, is a short distance away.

The building has views of historic New West on one side, and on the other, the trains running along the Fraser River. “It’s a working river,” Newall points out. “You can see tugboats and fishboats.”

In addition to those who already know and love New West, the building is being marketed to people who would commute to either downtown Vancouver or the Fraser Valley, drawing on easy access to both Highway One and the New Westminster SkyTrain Station. It takes about five minutes to drive to the former, and five minutes to walk the 200 metres to the latter, if you throw in time to grab a coffee.

The suites contain the quality of finishing now expected by savvy Lower Mainland buyers, including granite countertops, European-style two-tone cabinetry, and large-format floor tiles in the kitchen and bathroom. Newall has partnered with Greater Vancouver home furnishings store Nood to create three show suites, catering to three different types of potential buyers.

The first is the one-bedroom, likely aimed at a first-time homebuyer. The sizable suite easily accommodates a low queen-size platform bed and two side tables, and in fact, the room could house a king bed. In the living room, leather is the look, both in the Barcelona-inspired sofa and a wood-backed lounger with ottoman. Wire ‘basket’ style chairs for the dining room with black cushions play off the chrome and dark tones of the kitchen.

A two-bedroom-and-den suite is decorated to appeal to a young family with a child. The breakfast bar is set with bowls for cereal, while the wooden dining table has room for six in a pinch. There’s more wood in the Noguchi-inspired glasstop coffee table, and in the desk and intricate bookcase in the den. That area could also double as a guest bedroom, if need be. The child’s bedroom is a romp, featuring a basket of soft toys and animal wall decals that can be drawn on in chalk.

The final show suite has been envisioned as one for a couple downsizing from a larger home; it includes oversized soft grey chunky furniture in the living room, and a high-gloss white desk in a room that could be a den or bedroom. All of the suites feel incredibly spacious, especially for one used to the tiny proportions used in downtown Vancouver.

Normally, show suites don’t warrant so much description because they are for display purposes only, assembled by interior designers with one-off pieces to show off the fantasy of what life could be like if only a buyer lived there. In this case however, InterUrban, MAC, and Nood have teamed up to allow condo purchasers to buy the show suite look down to the last accessory, should they wish to do so.

“Some people can’t conceptualize how to fill a space, so staging can help them direct the flow, placement, and colour in a home,” says Jim Tai of Nood. “Our products are replicas or originals -a real range of products -that are accessibly priced, and they work really with each other or the existing pieces someone might already have.” InterUrban buyers will be offered a discount on their purchases from Nood, with the exact percentage still being determined.

© Copyright (c) The Vancouver Sun