Residents say pushy realtors are badgering elderly homeowners to sell their houses

Stanley Tromp
Van. Courier

Despite residents speaking out against overcrowding, more traffic and pricier housing, city council voted unanimously last Wednesday to pass amendments that will implement parts of the Marpole Community Plan. This would rezone some arterial streets such as Granville and Osler from one- and two-family dwellings to permit townhouses, rowhouses and four-storey apartments.

Council approved the new 30-year plan for Marpole last April. It includes plans for 6,800 new home-ownership units, 835 rental units and 1,085 units of social housing. It also calls for expanded park space, enhanced walking and cycling routes and upgraded community facilities.    

Despite the vote, NPA Coun. George Affleck said discussions on how to apply the Marpole plan in practice will go on.

About 50 Marpole residents attended council, and after their anti-densification struggles of the past two years, most of the speakers sounded tired and half-resigned to the neighbourhood’s new reality.

Marpole Residents Coalition spokesperson Mike Burdick supported the amendments but with reservations. “Do I want it? No. Do I approve it? I guess so.” He worries that thousands of new residents will bring a massive and dangerous rise in automobile traffic, especially around the Gateway project at Cambie and Marine Drive.

Resident Gudrun Langolf said it could have been worse: “At least the new houses aren’t condo towers — we don’t need any more of those phallic symbols.”

Other points were repeatedly raised: urgings that the Marpole-Oakridge Community Centre should be upgraded but remain at its current location, fears that rare old houses might be torn down around Osler Street, complaints that “pre-zoning” details will be worked out in staff meetings and not at full council, and worries that the touted “affordable housing” is far too pricey to be called affordable. One resident said to applause, “How can a student afford a $885,000 townhouse?”

One lone Marpole resident voiced another outlook. The streets seemed too quiet and empty, Ignatius But told council, and he yearned for more excitement and activity in the area. The 21-year-old has lived in Marpole for 10 years in a four-storey condo near 59th Ave and Columbia Street.

Many councillors appeared disturbed by some residents’ complaints about pushy realtors badgering elderly Marpole homeowners to sell their houses. One resident said her 84-year-old mother has been called so often that she is afraid to answer the phone or the door.

Matt Shillito, assistant planning director, said “absolutely no one is required to sell their homes,” and complainants should call the B.C. Real Estate Council.

Vision Vancouver Coun. Geoff Meggs wondered how newly bought properties on the Cambie Corridor can be kept in use. Stevenson said he sees offshore speculation and absentee ownership in Coal Harbour and the West End, but not so much in Marpole. Shillito agreed: “There is a big demand to buy and rent such townhouses, and the Marpole area is geared more for local families, so buildings are less likely to be left vacant.”

Despite their dim view of the Marpole plan, a few residents changed their view of the planning process and voiced some gratitude for it.

City planners did a good job of consulting, even for renters, and seemed to respond to two years of protest by scaling down the original high densification plan, they said.

“When I got a personalized card in the mail to come to this meeting, I almost jumped for joy, because in the past only homeowners got such notices,” said Langolf.

© Vancouver Courier

Tara Perkins
Other

Canadian home prices appear to be picking up a little steam.

The gains come even after a sluggish winter for home sales, and forecasts from a number of economists for price growth to peter out.

Teranet-National Bank’s house price index, which tracks 11 cities, hit an all-time high in April, with prices rising 0.5 per cent from March and 4.9 per cent from a year earlier.

“Home prices are starting to show early signs of accelerating – even when adjusting for quality,” Toronto-Dominion Bank economist Diana Petramala wrote in a research note after the numbers came out, saying prices have maintained more momentum this year than TD economists anticipated.

“We continue to believe that home price growth will moderate in the second half of 2014,” she added.

In the meantime, Royal Bank of Canada economist Robert Hogue says that prices are rising faster than incomes. And if the current pace of price growth keeps up, that could be problematic. “This is starting to get uncomfortable, because it’s going to affect affordability,” he told me.

It’s not going to become an issue immediately. Declines in mortgage rates in recent months have helped to offset price gains when it comes to affordability, he points out. “But at some point interest rates are going to start moving up.”

“With home prices already estimated to be 10 per cent overvalued, the risk is for more froth to gather in the Canadian housing market,” Ms. Petramala wrote.

Digging into the numbers, there is a wide variation between markets. Some, such as Winnipeg, Toronto, Calgary and Vancouver, saw prices hit new highs in April. Others saw prices fall. Here’s how the markets fared, first from the prior month, and then from a year earlier:

• Calgary: 1.5 per cent, 10 per cent
• Edmonton: 0.6 per cent, 4 per cent
• Halifax: 0.7 per cent, – 3.5 per cent
• Hamilton: 0.7 per cent, 5.3 per cent
• Montreal: 0.8 per cent, – 0.4 per cent
• Ottawa: 0.7 per cent, – 0.4 per cent
• Quebec City: –0.5 per cent, – 2.4 per cent
• Toronto: 0.3 per cent, 5.8 per cent
• Vancouver: 0.5 per cent, 9 per cent
• Victoria: –1 per cent, – 0.7 per cent
• Winnipeg: 0.4 per cent, 2.5 per cent

It’s the first time since October 2010 that prices were down year-over-year in five markets, and it’s the third-weakest gain in prices for the month of April since 1999, outside of a recession. But it’s still stronger than many economists expected.

“Lack of homes for sale in many of Canada’s major markets appears to be a key reason for mounting price pressures,” Ms. Petramala wrote.

The cities with the sharpest price growth – Vancouver, Calgary and Toronto – are currently seller’s markets, while those where prices are falling are buyer’s markets, she said. “Following many years of rampant new home construction, Montreal, Quebec City and Ottawa are currently grappling with an inventory overhang of condos on the market,” she added.

© Copyright 2014 The Globe and Mail Inc.

Tyler Orton
Other

Metro Vancouver house prices are up from March to April, making it the only Canadian city whose prices have gone up 12 months consecutively, according to the Teranet–National Bank Composite House Price Index.

The data released May 14 revealed home prices on the West Coast city went up 0.5% in April – a new high – compared with the month before.

That falls in line with the national average, but is below gains made in Calgary (1.5%) and Montreal (0.8%).

“Though the gain might appear robust, it must be said that apart from the recession in 2009, the composite index always advanced in April,” the report said.

Furthermore, March numbers were flat throughout most of Canada – the first time that’s happened in 15 years other than during the 2009 recession year.

Meanwhile, Victoria saw the sharpest decline among major cities as house prices fell 1% from March to April.

Year-to-year, house prices are up 4.9% throughout Canada.

Vancouver house prices, however, have increased by 9% compared to the same period last year.

Once again, only Calgary is outpacing Vancouver after it posted a year-to-year increase of 10%.

Copyright © Business In Vancouver

Tara Perkins
Other

Canadian home prices appear to be picking up a little steam.

The gains come even after a sluggish winter for home sales, and forecasts from a number of economists for price growth to peter out.

Teranet-National Bank’s house price index, which tracks 11 cities, hit an all-time high in April, with prices rising 0.5 per cent from March and 4.9 per cent from a year earlier.

“Home prices are starting to show early signs of accelerating – even when adjusting for quality,” Toronto-Dominion Bank economist Diana Petramala wrote in a research note after the numbers came out, saying prices have maintained more momentum this year than TD economists anticipated.

“We continue to believe that home price growth will moderate in the second half of 2014,” she added.

In the meantime, Royal Bank of Canada economist Robert Hogue says that prices are rising faster than incomes. And if the current pace of price growth keeps up, that could be problematic. “This is starting to get uncomfortable, because it’s going to affect affordability,” he told me.

It’s not going to become an issue immediately. Declines in mortgage rates in recent months have helped to offset price gains when it comes to affordability, he points out. “But at some point interest rates are going to start moving up.”

“With home prices already estimated to be 10 per cent overvalued, the risk is for more froth to gather in the Canadian housing market,” Ms. Petramala wrote.

Digging into the numbers, there is a wide variation between markets. Some, such as Winnipeg, Toronto, Calgary and Vancouver, saw prices hit new highs in April. Others saw prices fall. Here’s how the markets fared, first from the prior month, and then from a year earlier:

• Calgary: 1.5 per cent, 10 per cent
• Edmonton: 0.6 per cent, 4 per cent
• Halifax: 0.7 per cent, –3.5 per cent
• Hamilton: 0.7 per cent, 5.3 per cent
• Montreal: 0.8 per cent, –0.4 per cent
• Ottawa: 0.7 per cent, –0.4 per cent
• Quebec City: –0.5 per cent, –2.4 per cent
• Toronto: 0.3 per cent, 5.8 per cent
• Vancouver: 0.5 per cent, 9 per cent
• Victoria: –1 per cent, –0.7 per cent
• Winnipeg: 0.4 per cent, 2.5 per cent

It’s the first time since October 2010 that prices were down year-over-year in five markets, and it’s the third-weakest gain in prices for the month of April since 1999, outside of a recession. But it’s still stronger than many economists expected.

“Lack of homes for sale in many of Canada’s major markets appears to be a key reason for mounting price pressures,” Ms. Petramala wrote.

The cities with the sharpest price growth – Vancouver, Calgary and Toronto – are currently seller’s markets, while those where prices are falling are buyer’s markets, she said. “Following many years of rampant new home construction, Montreal, Quebec City and Ottawa are currently grappling with an inventory overhang of condos on the market,” she added.

© Copyright 2014 The Globe and Mail Inc.

Is the party over?

Joe Rickards
Other

The media is saying the US real estate party is over. We’ve missed the boat. We’re too late to cash in on the market recovery. In reality, that couldn’t be farther from the truth.

I’ll admit, on the surface of it all, to the non-expert eye that’s not out there doing deals, the US residential real estate market statistics look pretty frothy, and it’s easy to be misled into thinking a bubble is forming.

However, when you dig deeper, the real truth jumps out at you.

THE BOTTOM LINE:

In this article you will discover the cold hard facts I uncovered that shows why today’s US residential real estate market is the perfect storm opportunity for investors to cash in on the greatest recovery in US real estate in our generation, both for flippers and fundamental, cash flow investors.

Let’s bust the media-driven bubble myth.

The media typically reports the most visible statistics that lay on the surface, such as:
• Nationwide US prices are a mere 15% from the nations bubble peak of April 2006.
• The US real estate market has had 25 consecutive months of price increases;
• Prices jumped 27% in Las Vegas, 20% in Orlando (in 2013);

I’ll admit, these “on the surface” statistics can easily be misinterpreted as frothy in the eyes of any laymen. It’s no wonder the media looks at these figures and rings the WARNING bell crying chicken little, the sky is falling. It’s not their fault; the media are not real estate experts. While these figures are, for the most part true, they paint a very misleading and false picture of the US real estate market as a whole.

The illusion: housing is in short supply.

Having boots on the ground in the United States for the winter months of 2014, I discovered an obvious dichotomy in the real estate market. Just like there are two sides of the same coin, there are two distinct and vastly different parallel markets that exist in today’s real estate market. Let’s call Heads the “family (owner occupied) buyers” market and Tails the “investor buyers” market. The illusion of tight housing supply exists because the media is only reporting on the family market, not the hidden side of the coin: the investor market.

While the huge price gains seen in the past 2 years reflect a somewhat accurate picture of the “family” real estate market, it’s only half the story, just like Heads is only one side of a coin. After digging around for months in the US trenches trying to wrap my head around a market that just did not make any sense, a deeper truth came to light. The other, hidden side of the coin emerged bit by bit: Tails, a market driven by investors.

Heads: the family market.

Let’s take a look at the Heads side of the coin: the side controlled by family buyers. There is definitely a shortage of the “pretty homes” that families want, and it’s these family buyers that represent about 90% of the aggregate market buyer pool. They are the first time home buyer and the family upgrading their home. Also, housing starts ground to a complete halt 7 years ago and have just been starting to come back for about the last year or so. Between the robust demand and the 7-year dry spell of new homes, both new and pretty homes comprising the “pretty home” inventory are in awfully tight supply, which continues to aggressively push up prices.

Another market influencer is the fact that only 18% of owner occupied (ie, family) mortgage applications are being approved today. Well, just imagine what’s going to happen to demand (and hence price) for this already tight supply of pretty homes when banks loosen their purse strings and return to historical lending norms.

Tails: the investor market.

On the Tails side of the coin there are investors buying ugly houses: mostly REO’s (bank owned) foreclosures and short sale homes, which out number pretty houses by about two to one. The overwhelming majority of buyers of these ugly houses are investors, and they only represent about 10% of the aggregate market buyer pool. Families don’t want these ugly houses for good reason. Many have been vacant for years and the overwhelming majority need a ton of work, have mold and other serious issues. On top of that, they’re a major hassle, they’re more risky and Closings are fraught with delays, often leaving the buyer family out in the cold long past their expected Closing date.
With ugly houses you have only 1/10th of the buyer pool that have roughly twice the inventory to choose from. This has led to an oversupply of ugly houses, which has kept ugly house prices under wraps.
There is also two large market influencers that will continue to add more ugly house inventory to the market, which will continue to keep ugly house prices artificially low for some time to come.

Prices still 40 cents on the dollar.

Most people are shocked when I tell them just how low you can still buy highly positive cash flow properties in good areas in many States. As low as 40 cents of the 2006 market high price levels, with CAP rates as high as 18%. There are an abundance of sources of these great investor properties, including, REO’s, pre-foreclosures (great no money down opportunity for Canadian’s to help defaulted homeowners), foreclosures, tax deed auctions, IRS auctions, short sales, estate sales, and even probate.

Kink in the foreclosure fire hose.

First, their is still a kink in the foreclosure fire hose due to the “Robo signing” fiasco, which has prevented houses from gushing onto the market. This was where banks were caught red handed fraudulently re-producing ten’s of thousands of missing original mortgage documents needed by judicial State courts to foreclose (and not one banking exec has ever done jail time for it!). This caused the government to step in by legislating the “Homeowner Bill of Rights,” which protects homeowners from such fraudulent bank activities. As a result, foreclosures have nearly ground to a halt in some judicial States, such as Nevada.

The 60 million shadow inventory.

Second, there is the massive shadow inventory stat’s that they hide from us. That is, a shocking 60 million Americans are still underwater (owe more on their home than its worth) and 9.3 million are upside down by 25% or more! For example 41% of Vegas homes are still underwater by 25% or more. In Orlando Florida, 36% remain underwater and in Tampa it’s 35%.

What does the future hold?

I think the big question is: when interest rates inevitably come up from their historical lows (which the market now takes for granted), and homeowners can no longer afford the payments on their underwater homes, what do you think they will do? Will they walk away by the millions like they did after the 2007 crash?
Now let’s take a look at a real wildcard that’s going to hit the market in August 2014. The US Federal government has legislated that banks must start dumping their shadow inventory (estimated at 60 millions homes), which they’ve been stockpiling for years. Have you ever wondered why on earth would banks let millions of their REO’s (bank owned) properties sit empty, creating dangerous liabilities and eroding the value of their real estate asset base? Let me circle back to that in a bit.

When the banks start dumping their shadow inventory that will of course dramatically increase the supply of ugly houses for investors, but remember, this supply isn’t really adding to the overall market supply of family homes (what 90% of buyers want) and it’s this family market that largely influences MLS market price levels, suggesting overall market prices will not likely soften as bank shadow inventories hit the market. The caveat to my prediction here is that banks continue to dribble out their inventories like they have been their REO and foreclosure inventories since 2007. If they were to open the floodgates, it would be a much different story, albeit unlikely based on how they dealt with their huge inventory problems since the crash.

Bank fraud endorsed by Financial Accounting Standards Board.

Okay, let’s circle back and take a look at why banks have been hording their REO inventory since the 2007 crash. It’s simply really. By holding mortgage assets on their underwater properties, they don’t have to take the hit and realize the loss until the property sells. Once upon a time, that kind of conduct was considered fraudulent accounting practices, but in the wake of the financial crisis, the American Bankers Association lobbied the Financial Accounting Standards Board to change the accounting rules that gave the banks greater discretion in determining prices for certain types of illiquid securities on their balance sheets. As a result, today banks can say a $100,000 house is worth $200,000 and get away with it.

If you’re asking the question: should I invest in Canadian or US real estate, consider these facts:

• Real estate is overvalued by 64% and 30% when compared to rents and incomes, respectively.
• Our home prices are now almost double that of the US, yet we only have one-tenth of their population. Between 2000-2012, Canadian home prices went up 140%, while real incomes are merely up by an anemic 8%.
• The average Canadian household debt-to-income ratio just broke a new record at 165%: higher than the US record set in 2006 right before its crash. The increase in household debt as a percent of GDP since 2006 has been faster in Canada than anywhere else in the world!
• Canada’s price-to-rent ratio is currently 60% above its long-term average: higher than any other developed country in the world – even worse than the US was in 2006, just before their bubble burst!

Copyright 2013 Wealthy Real Estate Investor

Residents worry home ownership slipping away

Mike Howell
Van. Courier

The question is one Vision Vancouver Coun. Geoff Meggs hears a lot: Is it time to declare the future of housing for most people in the city will be rental?

It’s a depressing thought for residents bent on home ownership.

For others, renting in Vancouver for life is not an issue — it’s whether the housing will be available, decent and affordable.

Meggs’ question opened up discussion at a public forum Monday night hosted by Vision Vancouver at the WISE Hall, where about 150 people attended to listen and weigh in on the future of affordable housing in Vancouver.

“If we want to change the culture so that this becomes a city where people have expectations that they’ll rent for life – bring it on,” said panelist Lyndsay Poaps, a former park board commissioner who rents part of a duplex with her family on the East Side. “But the gap between that culture and our reality is like the Grand Canyon.”

What Poaps has learned and the city’s housing numbers reveal is that Vancouver has a shortage of decent, affordable rental housing. Vacancy rates are chronically low, averaging 0.9 per cent over the past 30 years.

That’s because the majority of the city’s purpose-built rental stock was constructed in the 1960s and 1970s. And since then, as Meggs pointed out, tenants have faced “renovictions” from their rental homes and Vancouver has become the most expensive housing market in Canada and the second least affordable city in the world.

“It’s becoming increasingly impossible for many, many people – perhaps, even the majority – to contemplate living in Vancouver, never mind owning a place to live,” Meggs told the crowd. “It’s something that I’m very worried about because it seems to me that housing is a right and it’s important in a city that’s going to function properly.”

A common complaint shared by Meggs, Poaps and panelists Jim O’Dea, a housing consultant, and Yuri Artibise, the vice-president of the Co-operative Housing Federation of B.C., is the provincial and federal governments are not building enough affordable housing.

O’Dea urged senior levels of government to take advantage of low interest rates and invest in more housing. Without that commitment, he said, the absence of housing makes for a dire situation among people who don’t have money to pay high rents.

“It’s like going to the edge of the mountain and people just keep falling over the side because there’s nothing there for them,” O’Dea said.

Artibise, who lives in a co-op at the Olympic Village, is worried about a bleak future for tenants of co-ops with more than 3,000 B.C. households facing the loss of rental assistance by 2020 when the Federal Co-operative Housing Program shuts down.

“My biggest fear is that the province and the feds won’t step up and we will lose the subsidies – that’s going to be our fight for the next five or six years,” he said.

Meggs outlined some of the city’s efforts to assist renters, including a rent bank, a database that tracks violations of rental buildings and programs to encourage developers to build rental housing.

Meggs said the number of new rental units under the Short Term Incentives for Rental Housing program, or STIR, has gone from zero in 2008 to 1,000 in 2012 and another 1,000 in 2013.

Meggs acknowledged the rents at some of the STIR projects have increased since they were approved by the city but, overall, there is now more rental stock in Vancouver.

Additionally, the city has seen a surge in new laneway homes and an increase in secondary suites. More than 350 units are to be developed on four city properties and the city is working on creating a housing authority with the goal of building affordable housing on city land.

“I am personally very proud of the work we have done in this area but I’m very, very painfully aware that it’s inadequate,” he said.

Poaps, who has worked for Toronto’s Affordable Housing Office and was a member of the Mayor’s Engaged City Task Force, said her biggest hope is Vancouver can one day become “a city for all,” where there is a mix of affordable homes.

“My biggest fear is that the residents alone can’t do it, that we’ve missed the boat and this is turning into an executive city. It’s the hollowing out of all the things I love about Vancouver.”

© Vancouver Courier