USA Today

WASHINGTON (Reuters) — Sales of new homes rose 16.2% in April, sharpest climb in fourteen years, while prices fell a record 11%, according to a government report on Thursday that showed home builders taking extraordinary steps to move houses.

New single-family home sales rose to an annual rate of 981,000 units from a revised rate of 844,000 in March, the Commerce Department said.

The jump in sales was the biggest increase since a 16.4% surge in April 1993.

Analysts polled by Reuters were expecting April sales to rise to an 860,000 unit pace from a previously reported rate of 858,000 units in March.

In April, the median sales price of a new home — half sold for more, half for less — fell $28,500 to $229,100 from $257,600 in March. The big price decline indicated that builders are slashing prices to move a huge overhang of unsold homes.

There were 538,000 new homes for sale in April, a drop from the 546,000 reported in March. It would take 6.5 months to clear that inventory at the current sales pace, less than the 8.1 months recorded in March.

Thursday’s data comes a day ahead of another key report that measures the pace of sales for previously owned homes — which represent 85% of the housing market. AWhen that report is released Friday, analysts polled by Reuters expect April existing home sales to rise to a 6.14-million-unit pace from 6.12 million in March.

However, analysts cautioned against reading too much into the big gain, especially in light of other surveys showing that builder confidence has sunk in recent months over worries that troubles in the subprime mortgage market will further crimp demand.

There was also concern because all of the strength in sales came in one region of the country, the Northeast, which saw a surge of 43.1% from last April.

Sales were down 28.1% in the Midwest from April a year ago, and down 25.4% in the West. Sales fell a smaller 3.4% in the South.

Stephen Ohlemacher and Paul Foy
USA Today

WASHINGTON — McMansions are sprouting in the suburbs of Washington and Atlanta, in southern Connecticut and out West in Utah as an appetite for bigger homes just keeps on growing.

One in five American houses had at least four bedrooms in 2005, according to a report Tuesday by the Census Bureau. That’s up from one in six in 1990, despite shrinking families and increasing costs for construction and energy.

“In this country, bigger is better,” said Gopal Ahluwalia, vice president of economic research at the National Association of Home Builders. “This is true for houses and this is true for automobiles.”

Utah leads the nation with nearly 40% of homes having at least four bedrooms. Demand is high in part because Utah has more people per household (3.07) than any other state.

Evan and Valerie Astle are having a 5,700 square-foot house built in a new subdivision near Ogden because they want more space for their three teenagers. They have been renting a storage unit while living in their old, 2,100-square foot home.

That won’t be a problem in the new house, which has four big bedrooms, 3 1/2 bathrooms and a three-car garage.

“Our kids have more stuff. They need more living space,” said Valerie Astle, a grade-school teacher. “Our (old) house was fine when they were small, but we’ve just outgrown it.”

Among states with the biggest percentage of large homes, Utah was followed by Maryland, Virginia, Colorado and Minnesota. Arkansas had the smallest share, at 12.6%.

In much of the country, the growth in big houses is fueled by suburban home buyers seeking luxury, rather than big families needing space, Ahluwalia said.

“They are buying for lifestyle,” he said.

Nationally, the average household size has shrunk slightly since 1990, to about 2.6 people. Meanwhile, the average new house grew by nearly 400 square feet, to 2,434 square feet.

“You cannot sell a new home today with 1 1/2 bathrooms,” Ahluwalia said. “Even if only two people are in house, they still want 2 1/2 to three bathrooms.”

Dale Mattison, a real estate broker in the Washington area, said smaller families are getting creative with all those extra rooms. One option: his and her offices.

Some bedrooms are converted into dens, but many big houses already have those, Mattison said. They also have media rooms, which used to be called TV rooms back when there were fewer electronic devices to choose from.

Homes in the United States are much bigger than they are in other countries, according to figures compiled by the United Nations.

American homes, on average, are nearly twice as large as those in many European countries, including Britain, France and Germany. Only Luxembourg comes close among European nations, with average homes about three-quarters the size of those in the United States.

U.S. homes are also becoming more expensive. The median home value jumped more than 40% form 1990 to 2005, to about $167,500.

Most big homes in the USA are going up in the suburbs, contributing to sprawl and congestion, said Vicky Markham, director of the Center for Environment and Population.

The Washington metro area fits the national trend. About a third of all homes in the region, which includes suburbs in Virginia and Maryland, have at least four bedrooms. In the city of Washington, only 12% of the homes are that big.

All those big suburban houses require more land, more materials to build and more energy to heat and cool, Markham said

“Excess is a matter of how each person views their own life,” Markham said. But, she added, “Each person today is taking up more resources, more land, more energy than generations before.”

 

Developer Robert Quigg’s plan will help Langford’s economy, mayor says

Carla Wilson, Victoria Times Colonist
Sun

VICTORIA — A Vancouver developer known for building multimillion-dollar homes in “trophy locations” is planning a $1.4-billion luxury project at Bear Mountain in Langford.

More than 1,000 condominium units with mountain and ocean views, large covered decks, a vineyard, private wine vaults, concierge services, an outdoor amphitheatre, spa, fitness centre and pools are planned. The site already has the required zoning.

A “spectacular” restaurant and winery will be cantilevered 20 metres off the hillside, developer Robert Quigg, who heads the Quigg Group, said in Vancouver Tuesday.

The company focuses on orienting its homes to take advantage of a site’s natural attributes to “bring the outdoors in,” and builds in what he called “trophy locations.”

“Often our clientele has two or three homes in different parts of the world, and we like to make ours the centrepiece home.”

The project’s sales office will open in early July at Bear Mountain, and units on the 20-acre site are expected to go up for sale in early fall. Construction will likely start before December, he said. Designs for the two-phase project, with a build-out time of 10 to 12 years, are still being finalized.

Quigg projects include The Properties at Hollyburn Mountain in West Vancouver, with 44 multi-million-dollar residences including a 4,800-square-foot penthouse that sold for $5.9 million.

Last year, Quigg’s own 4,200-square-foot penthouse condominium overlooking Stanley Park made the headlines with a record sale price of around $10 million.

The baby boomer generation is “looking for the cool home for themselves now,” Quigg said. There’s a good chance that retirees planning to relocate will either choose southern Vancouver Island or the southern Okanagan Valley.

Units at Bear Mountain will range from 850 square feet to 5,000 square feet, with the average suite size at 1,650 square feet. Prices will start at about $500,000, but Quigg did not cite a ceiling.

Bear Mountain Resort president Len Barrie said Quigg project residents will represent about a tenth of the total population of the entire site once it is finished. It is estimated that 10,000 people will live on the mountain in 5,000 residences.

“It’s going to drive golf membership sales for us. It’s going to drive revenues at all the other facilities that we have up here,” Barrie said.

“[Quigg’s] marketing machine, and his connections, and his following internationally was what really attracted us.”

Bear Mountain features an arena, golfing, restaurants, hotel rooms, spa, athletic club, and a village is being developed. There are now 600 full-time residences and more than 1,000 owners. Properties for sale include lots, townhomes, condominiums, and homes with fractional ownership.

Langford Mayor Stew Young said the Quigg plan will be an economic driver in the community, bring millions of dollars in new tax revenue and help residents by keeping taxes down. “It is going to give Langford a huge tax boost, probably the largest development to date that we have had.”

Young said he met with Quigg about six months ago and encouraged him to come to Langford. “It’s a great, great thing for Langford, absolutely no question,” Young said. “He is the developer in Canada right now.”

© The Vancouver Sun 2007

 

With jobs for skilled trades, you can retain your income

Brian Morton
Sun

If you’re looking for an affordable way of life, just sell your home and head north.

That’s the conclusion of a survey by the B.C. Northern Real Estate Board, which found that despite average house price increases of 30 per cent across northern B.C. last year, owning a home in the region consumes less than half what a homeowner in Vancouver would pay in terms of proportion of household income.

“We know our home prices don’t compare to prices in the Lower Mainland, the Okanagan or Vancouver Island,” BCNREB president Glen Holling said in an interview. “But if you were to move into a northern community and retain your income, you’d find it extremely affordable.”

According to the BCNREB report — commissioned after RBC Financial Group released the results of a cross-Canada housing affordability study showing that B.C. was the least affordable place to buy a house — the Housing Affordability Index (HAI) for northern British Columbia stood at 28.9 per cent, compared to 68.5 per cent for Vancouver and 62.5 per cent for B.C. as a whole.

The index estimates the proportion of pre-tax median household income needed to cover mortgage costs, municipal taxes and fees, and utilities for single-family homes.

What the index means is that the typical household in Vancouver will spend almost 70 per cent of its pre-tax income toward homeownership, while the typical household in northern B.C. spends less than 30 per cent of its pre-tax income on homeownership.

The report notes that the affordability difference has persisted despite recent double-digit increases in prices of single family homes in northern B.C.

Drew and Susan Miller are waiting to move into their 2,900-square-foot log home on two hectares (five acres) in Williams Lake, which they recently bought for $270,000.

The Millers moved to Williams Lake after selling their home in Chilliwack — similar in size to their new log home, but on a three-quarter-acre lot — for $525,000.

“My husband’s company was restructured,” Susan Miller said in an interview on Tuesday. “We weighed our options — our older children live here already — and we thought it was a good time to sell and move to Williams Lake. We both love it here. It put us in a very good position.”

Miller said her husband found work in construction.

“A lot of people from the Lower Mainland are moving up here. A lot of people want to get out of the rat race. There’s a ton of work, and it’s a better atmosphere for kids. And the housing is a lot more affordable.”

The area covered in the survey includes most of B.C. north of Kamloops, including Prince George, 100 Mile House, Williams Lake, Kitimat, Prince Rupert and Fort St. John, but not Dawson Creek, Tumbler Ridge or Chetwynd.

The survey noted that, despite the overall affordability for the area as a whole, there were significant differences between individual towns.

Kitimat had the most affordable housing (14.1 per cent), while homeownership in 100 Mile House consumes the highest proportion (45.6 per cent) of median household income in the area.

The survey notes, however, that housing prices jumped over 50 per cent in the past year in 100 Mile House, lowering that town’s affordability.

Kitimat recorded the lowest housing prices, but significantly higher incomes than other communities in the survey.

The average single family home price in the survey area was in the $190,000 range, with Prince George and 100 Mile House the most expensive.

Holling, who is based in Williams Lake, said word is getting around, with many retirees showing up in northern communities. “We’re seeing strong interest from southern B.C. Some people buy one house to live in and another one to rent. And there’s the retirement income. I think this survey will make more people take note.”

He notes, however, that not everything is affordable. “100 Mile House is less affordable. But it’s a huge recreational property area.”

Holling also said the north’s economy is turning around. “We had a struggle from ’99 to early 2006, but things are starting to turn. We’re seeing mines reopening. And income levels here are quite high in the trades.”

Despite that, there are a number of discrepancies in economic opportunities in northern B.C., according to a Statistics Canada report.

The report noted that among the regions, unemployment rates were just 3.7 per cent in northeast B.C. (the lowest in the province), compared to 8.6 per cent in the North Coast-Nechako (the highest in the province). The Cariboo’s unemployment rate was 5.2 per cent, and the provincial average 4.4 per cent.

The Statistics Canada report also said that during the first three months of 2007, the value of building permits issued in the province increased 15.8 per cent over the same period of last year, with the Cariboo ( 27.2 per cent) standing out in terms of growth. Housing permits rose modestly in the North Coast ( 2.7 per cent), but declined in the northeast (-3.4 per cent) and Nechako (-28.2 per cent).

Fort St. John Mayor Jim Eglinski said in an interview that his community is experiencing strong steady growth because of the oil and gas activity in the area.

“Our community is still facing an economic boom,” he said. “We have a high 90-per-cent fill rate in the hotels and motels all the time. There’s a lot of construction.”

Eglinski said despite the boom, housing in Fort St. John remains very affordable compared to the Lower Mainland. “Up here, the average [single family home] is about $260,000.”

He said anyone with a skilled trade could find work fairly easily. “We have the highest disposable income in B.C. and the second-youngest workforce.”

Prince Rupert Mayor Herb Pond said in an interview that despite a downturn in recent years, the economy there is turning.

“It’s actually a very unique opportunity for young families to enter the real estate market, build equity and have a job. With the coming of the new container port, which will begin operations in October, and the expansion of the cruise ship market, there are some really good work opportunities.”

Pond said Prince Rupert has seen housing price increases of more than 25 per cent in each of the last two years, but “it’s still very reasonable.”

He said the new container port will make Prince Rupert a “significant new entry port to North America for containerized goods from Asia.”

The north becomes a retiree magnet

The survey noted that , despite the overall affordability for the area as a whole, there were significant differences between individual towns.

Kitimat had the most affordable housing ( 14.1 per cent), while homeownership in 100 Mile House consumes the highest proportion ( 45.6 per cent) of median household income in the area.

The survey notes, however, that housing prices jumped over 50 per cent in the past year in 100 Mile House, lowering that town’s affordability.

Kitimat recorded the lowest housing prices, but significantly higher incomes than other communities in the survey.

The average single family home price in the survey area was in the $ 190,000 range, with Prince George and 100 Mile House the most expensive.

Holling, who is based in Williams Lake, said word is getting around, with many retirees showing up in northern communities. “ We’re seeing strong interest from southern B. C. Some people buy one house to live in and another one to rent. And there’s the retirement income. I think this survey will make more people take note.”

He notes, however, that not everything is affordable. “ 100 Mile House is less affordable. But it’s a huge recreational property area.”

Holling also said the north’s economy is turning around. “ We had a struggle from ’ 99 to early 2006, but things are starting to turn. We’re seeing mines reopening. And income levels here are quite high in the trades.”

Despite that, there are a number of discrepancies in economic opportunities in northern B. C., according to a Statistics Canada report.

The report noted that among the regions, unemployment rates were just 3.7 per cent in northeast B. C. ( the lowest in the province), compared to 8.6 per cent in the North CoastNechako ( the highest in the province). The Cariboo’s unemployment rate was 5.2 per cent, and the provincial average 4.4 per cent.

The Statistics Canada report also said that during the first three months of 2007, the value of building permits issued in the province increased 15.8 per cent over the same period of last year, with the Cariboo (+ 27.2 per cent) standing out in terms of growth. Housing permits rose modestly in the North Coast (+ 2.7 per cent), but declined in the northeast (– 3.4 per cent) and Nechako (– 28.2 per cent).

Fort St. John Mayor Jim Eglinski said in an interview that his community is experiencing strong steady growth because of the oil and gas activity in the area.

“ Our community is still facing an economic boom,” he said. “ We have a high 90- percent fill rate in the hotels and motels all the time. There’s a lot of construction.”

Eglinski said despite the boom, housing in Fort St. John remains very affordable compared to the Lower Mainland. “ Up here, the average [ single f a m i l y h o m e ] i s a b o u t $ 260,000.”

He said anyone with a skilled trade could find work fairly easily. “ We have the highest disposable income in B. C. and the second- youngest workforce.”

Prince Rupert Mayor Herb Pond said in an interview that despite a downturn in recent years, the economy there is turning.

“ It’s actually a very unique opportunity for young families to enter the real estate market, build equity and have a job. With the coming of the new container port, which will begin operations in October, and the expansion of the cruise ship market, there are some really good work opportunities.”

Pond said Prince Rupert has seen housing price increases of more than 25 per cent in each of the last two years, but “ it’s still very reasonable.”

He said the new container port will make Prince Rupert a “ significant new entry port to North America for containerized goods from Asia.”

 

© The Vancouver Sun 2007