floe

A Vancouver real estate developer is making an unprecedented move to offer a liquidation sale of $350 million worth of its condominiums throughout the Lower Mainland.

The marketing strategy by Onni Group of Companies is aimed at selling off hundreds of condos in its inventory.

About 375 unsold condominiums in cities such as Richmond and New Westminster will be offered at 20 to 40 per cent off...
link

There goes the neighbourhood. Pity the fools who bought at full price. I caught a brief news clip, and the condo "owner" was flipping out. The poor bastidge probably thought that he would be selling at a tidy profit in a year, and now his condo is worth at least 20% less. This flo development is more like an ice floe that people were cast off on to perish.



In my not-so-humble opinion, the suckers buying at the sale prices will also be finding that they have bought depreciating assets. Then comes the earth quake that will literally put them underwater.

After a 20 hour "emergency session" of the Legislature, Vancouver has received the go-ahead to borrow the money to finish the Millenium (Under) Water fiasco. You, nor I, will be consulted. That will be at least $456 million, and the latest is that it could be as much as $750 million. The limit imposed by the Leg. is to be found somewhere between the Sea and the Sky. In other words, there is no limit. I don't know about you, but I don't think that a billion dollar decision should be made after 20 hours of deliberation. I know that my own head is not very clear after an hour of debate, let alone 20 hours. The silver lining is that the City of Vancouver can borrow the money at "around 4%", while the developer (and us since September) pays 11%. So how is it good that I can borrow money cheaper than you, to cover your arse?

Who did the 52% that voted for the Olympics think was going to pay for this? Who got a Senate seat? Why do we have to have a 60% majority to have proportional representation, but only a 51% majority to put on a party for the rich, that costs us untold billions - directly and indirectly - disrupts our city and lives for 7 years, fuels an RE bubble that sucks in tens of thousands of slogan-addled believers into a lifetime of servitude to own a decaying, poorly built, and over-priced condo.

After 21 years in Vancouver, I have finally had enough. I don't want to pay for this. I'm going to buy a windmill, some hens and a rooster, hand tools, ammo, seeds, some goats, a few dogs, a few friends, a ukelele, an electric 4X4, 99 bottles of beer, buy a lease, build a sod house, learn to love potatoes, trade them for corn liquor, trade that for tobacco, trade that for dental floss and boots, and maybe a paper clip. What? You think that's crazy talk?, Yeah, well, real estate never goes down, you know.

This is going to be one of my last posts here, I think. I still have some photoshops that I just have to do, and a few comments to make, but let's face it, RE is dying an ignoble death. There is no joy or fun in that, and I am over taken by other, more pressing things. I just don't have the time to put in a decent effort anymore, and I'm just embarrassing myself now. Grin.

pity the fool

From the comments section:
"Pity the fool who bought this... Buying an asset which doubled in 3 years is nothing short of idocy..."(sic)

5164 Madeira Court
Asking price: $1,090,000
Selling price: $870,000
Previous selling price: $389,750 (2005)
Taxes: $5,240 (2007)
Days on the market: 36
Listing agent: Betsy Carstairs, Park Georgia Realty Ltd.

Even though this 1,972-square-foot house...sold for $220,000 under asking, the selling price was still $480,000 above what (was) paid for it about three years ago.

"Unlike financial markets, real estate is always a good investment," agent Carstairs says. What else is she going to say? The place has shed value in the week passed since it was sold.

...built in 1971, is in need of some (major) updating — brown carpets aren't for everyone — but it has attractive features...it's on a dead-end street... It is fitting that it is on a dead end street, it is a dead end investment.

The new owners are "excited about the idea of giving this '70s-style home a facelift," ...Carstairs says. "They can't wait to roll up their sleeves and work together to create the home of their dreams."

(italics mine)

Now, that is just crazy. They were asking 3 times what they paid for this house three years ago, and got double - without doing anything to the place. The new "owners" will need to put $100K into the place while it is dropping in value. Will it go back to 2005 value? Oh, yeah. Will it go back to 2003? Oh, yeah. How low will she go?

Just imagine paying $500/month in property taxes on top of the mortgage payments, new furnace and windows, new roof, new kitchen, new everything. This place has a great view, but is a bad deal, IMHO. The ones who bought it in 2005 hit the jackpot though...

terminal velocity in terminal city

Most hopeful blurb of the day...

Priced to sell is this immaculate Renfrew Heights bungalow boasting 3 bdrms up plus a 2 bdrm basement suite. Features 14 year old kitchen overlooking the sundrenched South facing backyard, updated bathroom, hardwood floors on the main, double glazed windows plus a superb location, half block to Gladstone Elementary & within walking distance to the Skytrain.

$595,000.00 2610 E 21ST AV MLS® V724803

It may have been priced to sell last spring, but those days are so over. Chop $80K off, and you might get some action, but you better be quick! That 14 year old kitchen is almost 15 years old, and that doesn't sound like such a great feature. Where is the granite? The stainless steel, and oiled glass? And that sun-drenched back yard is a faint memory until next June. By that time, you will be glad to sell for $395k.

MLS® V726475 may well be one of the "better" deals out there. This is a fairly quiet area, and there is purportedly an 8,321 sq ft lot for $555k. The lot seems quite irregular, but it is smoking big.

Things are definitely moderating, but there is a long way to fall yet.

$890,000.00

Thanks to R.Di for pointing out this travesty @2630 FRANKLIN ST, Hastings East, Vancouver East. v718488



$890,000.00?!!! WTF are these people smoking down on Franklin ST.? It reminds me of The Charge of The Light Brigade, or the Kamikaze Cult. No guts, no glory.

IT IS OVER! Shave your price by $600G's, and you might get a low-ball offer of $225K.

I have a mind to get a real estate license - just so that I could arrange to take your 75% off, low-ball offers to people like this. Any bored agents out there?

Actually, I wouldn't buy the place for an even $200K.

Any FTB better hurry to get in on this one to be a FB - as of October 15th, forget about that zero-down, 40 year amort., cash-back action, yer going to have to slap down 5% with a 35 year amortization. The handy Royal Bank mortgage calculator tells us that if you make accelerated weekly payments of $1,245.09 (a measly $4930.86/mo.), you can own this puppy outright in 27 years. It will take an annual income of about $200K to buy this place at these terms. Is here a surgeon in the house? A CEO of a middle corporation?

OK, I know that it is only really move-up buyers that are buying these places, but I am curious as to exactly from where someone would "move up" to this place. The Cecil Hotel?

I'm not normally subject to schadenfreude, but I feel a big, smug smirk coming over me.

sinking in seattle

(I picked this photo' because in the smaller version, the hose hanging on the left looks like a person in a green jacket standing there. That, with the trellis, reminded me of the iconic American Gothic, and it seemed kind of fitting.

And what is it with RE agents that frame pictures like drunken land-lubbers at sea in a pitching storm?)

patriotz left a link (on an earlier post about the place in New West.) to a Seattle house listed for $475k (roughly $425K CAN - grin). This is a brick house boasting 1,750 sq', and is close (relatively) to DT Seattle. I might remind you that Seattle actually has industry (Boeing, Microsoft, etc.). Your mortgage interest is tax deductible.

Check out their other listings too, it's interesting to see the reductions, and the $475K, 900 sq' Puget Sound view condo's. If Seattle is going down, so are we.

The unfortunate side effect of this sub-prime debacle (nowhere near over), and the Roman holiday that will be visited on the RE market, and further, is going to make the Depression look like a cake walk. That is part of why I wanted to see this bubble burst a long time ago. It's never so simple as it seems.

fighting the ennui

There is something oddly compelling about this place. I have scoffed at it's West Coast fusion of French Maison en pays/Admiral-range-hood-above-the-entrances with the art deco hut perched on top, but I really do like the red front door. That's...ballsy. Suddenly, I hear the Internationale, and I get to like this oddball infiltrator out of Proust or the like.

It's been on the market for better than 90 days, and the old timer that was originally there was listed in the neighbourhood of $550K. Giving for a deep discount construction cost of $100/sq', plus all the other costs, I would think that this place is priced at the developer's margin. That is why I have been watching this place. The price has not budged since September 30th, but the next cut will be seriously starting to eat into any possible profits. Is it time to cut and run?

There have been no signs on the lawn for a while now, but it still shows up on MLS. I don't know if the real estate agent has been reading my facile critiques of the photographs, but this is the best one yet. (Just a degree and a half counter-clockwise, and you are there.)

Enough of the snippiness (it's the ennui), here is your Deal of the Week. The only place in all of East Vancouver listed at less than $400K, in fact, this one lists at $329K. Not only is it a deal, it is the most realistic pricing I have seen for a while.



But calling Strathcona Mount Pleasant is a bit of a stretch.

Handyman's Special on charming street in Strathcona. Super location - only steps to McLean Park & Chinatown. Bring your ideas & hammers.

The stats claim a 4300 sq' lot (86 front x 50 deep), but I don't see that. If that is a fact, this place is a deal in this market. Still grossly over-valued in my estimation though. Steps away from McLean Park and Chinatown = steps away from DTES. I suppose hammers are recommended for self protection, as much as for hanging pictures. It's a cutesy pie little house though, and I do like the blue front door.

I'm giving the photographer a break on this one because there is an optical illusion with that metal railing.

investor alert!

In my last post, I compared a house in Arbutus to a house in Killarney. I mumbled about moving 40 blocks west, and the price doubling...how about moving 4,000 kilometres east? For less?

I was just fiddling around, looking for some info. for a post that I was thinking of, and serendipited (I think I made a word up) onto this place in Kitchener, Ont.



It's a 20 unit walk-up apartment building, that appears to be fully rented, for sale @ $1.075 million. That is a bit cheaper than the Arbutus shack featured @ $1.089 million, though it does not have the prestige of that W. 16th Ave. address (snort!) The thing is, the Arbutus address is in serious need of a wrecker's ball, and another $300 - 400K to build a swish place that befits it's neighbourhood, and it would have no revenue to off-set your $8100/month mortgage (plus taxes, etc. - and don't forget the new construction...).

Here are the numbers - in case you are interested.



Now, I know that this is not apples to apples, and you would still be augmenting the payments by ~$25K/year, but if you lived in one of the apartments, you could eliminate the superintendent's and management's salaries, and you would only be down about $12K/year. You could probably make that back in appreciation (or is the place way past it's best before date?), and jack the rents up a bit, and you are on the road to riches. You would not need an income of $303 G's a year to qualify either - hell, just about anyone with a minimum-wage job could qualify.

I know that these are very different prospects, but if I was going to dump over a million bucks into a dump, it would be a dump with some income.

when is a deal not a deal?

I'm proffering a deal of the week that is relative. I write "relative" in the sense that there are no good deals around by my measure.

This house sits on a huge (for East Van.) 57'x115', 6581 sq. ft. lot. That could be subdivided, built on, and turned around for profit. The blurb claims the possibility to live on the main, while renting out the top floor and 4 basement "suites for a gross of $3k/month. Their arithmetic is a bit unsteady though - they claim that 4x$450 = $1900, so they might really be asking $749K for the place.

It is interesting that the house is built of "stone and brick", that is very uncommon here. You can indeed see a stone foundation, but the brick has disappeared behind some hideous plastic siding. The house is 3150 sq. feet, so it is big, and the numbers do kinda work - you could end up paying about $600/month to live on the main, while having a rooming house atmosphere in the rest. Too bad, because it might be a nice place to buy and restore, with a nice big yard for my kids. Not for $828K though.

The blurb (below) mentions a 150 sq' basement too - perfect for a little grow-op to augment the mortgage payments. While I'm on the topic of the blurb, it is a bit over-blown - nestled in quiet alcove, I found jarring. How do you nestle a 3150 sq' house anywhere? - let alone an alcove. And the mention that the house will stand for at least another 40 years is comforting - especially if one opts for a 40 year amortization.

ADDENDUM: I forgot to mention that the picture seems to be from last fall/winter, and the MLS# is 50,000 older than current, so this place has been on the market for quite a while. I wonder if it has some heritage designation or covenant prohibiting subdivision.

listing

Price $828,000.00
Incredible 1910 brick & stone farmhouse w/panoramic views, nestled in quiet alcove & steps from ALRT Skytrain. Totally rebuilt inside the brick outer shell - new fibreglass roof, all new plumbing, electrical & wiring, studs, drywall, insulation, baths, kitchen, flrg, 2 hot water tanks, high efficiency furnace & wndws. Feels like a new home, must see inside to appreciate. Has front entry driveway usually mistaken for side lane, but is actually part of huge lot. Solid & has stood the test of time. Live on the main flr (9 ft ceils) & rent out top AND bsmt & get $3,000 in rent!! Work the numbers. Needs new deck, but can be worked into the price. Check out the antique walnut F/P & some of the original 5 ft high wainscotting/fir flrs, 3 bdrm (possible to convert to 4!!) main flr suite. Top floor separate 3 bdrm unit w/gable balcony; Basement 4 bdrm houses 4 students @ $450 each ($1900/mo). One of the biggest lot sizes in Renfrew Heights. This house will stand a minimum of another 40 years. Unfin bsmt 150 SF.

I've been deep in the doo lately - computer troubles have been overwhelming, and led to major data confusion. I have not yet totally worked it out, but will post as I am able. I'm juggling an incredible amount these days. Babby Solipsist is crawling around like a crazed hyena, The Missus is knee-deep in naps and nappies, business is booming, cyber reconfiguration has etched the blue screen of death into my being, and even though I am the administrator, I cannot figure out how to give myself universal privileges. I have not given up, just been overwhelmed. Blogging seems to be a challenge for many right now. Mercury retrograde perhaps?

deal of the week

In desperation (of new material), and anticipation of what is to come, I am starting a new series - Deal of the Week.

# 106 1429 E 4TH AV,
Grandview, Vancouver East,
$260,000.00

I don't know that this place is such a smoking deal, but hey! a quarter of a million will actually buy one somewhere to lay one's head in Vancouver.

The building is 25 years old, and the blurb claims The exterior of this well managed building was redone in 2001 and planned re-piping has been paid for by the sellers. That's encouraging. Isn't it? I just wonder how the exterior was redone. 100 gallons of epoxy paint? New vinyl siding? Proper rain-screen protection? A new wisteria and some gladiolus in the garden.

Nice to know that the piping is planned for provision - and paid for. Too bad you will move into a six month construction project that will see your walls and ceilings torn apart. Maybe the odd asbestos particle floating about too. (Actually, asbestos was not still used in 1982, but it makes it a more scintillating essay...)

The place is a "garden suite" (read dark and gloomy), and boasts 625 massive square feet, with a 110 sq. ft. patio. Fuggetabout The "W", you can live Off-The-Drive for only $416 per square foot! (plus interest, and $196.94/month maintenance).

For those off you who are calculation challenged (or didn't see the handy mortgage calculation button), and have a $26 G down payment burning a hole in your pocket, the Bottom Line is;


% Down Payment 10 %
Mortgage TERM : 5 Yr
Down Payment $ 26,000
First Mortgage Amount $ 234,000
Insurance Fee ( 2 % of mortgage ) $ 4,680
Total Mortgage Amount $ 238,680
Monthly Mortgage Payment $ 1,561
Monthly Property Taxes $ 61
Monthly Condo Fees $ 197
Monthly Heating Costs $ 0
TOTAL Monthly Payment $ 1,819
Household Income Required $ 64,530

Now we're talking fundamentals! The median family can almost afford this place!

Stay tuned, I have a feeling that this might become an ongoing feature here. Don't laugh. I had a dream last night.

Disclaimer - David Campbell seems to me to be a decent realtor. I have worked with his close associate - Sean Holden - and was impressed with his integrity. This is not a paid plug.