investor alert!

Investor alert! Looking for a great tax write-off? Think that you might need some capital losses to offset those smoking capital gains of the last few years?

Take a look at this one! It's really quite adorable, and is already tenanted at 1100 skins a month! There is no grub problem in the lawn, the skunks are taking care of that for you! Who needs nematodes?

Now, I know you may be thinking what a great deal this is, and may just skip some of the more rudimentary calculations (like; what will it cost me, and how much income do I need to support the purchase?), so I've done them for you (courtesy of canadamortgage.com) :

The Bottom Line

% Down Payment 5 %
Mortgage TERM : 5 Yr - 6.23%
Down Payment $ 28,950
First Mortgage Amount $ 550,050
Insurance Fee ( 3.25 % of mortgage ) $ 17,877
Total Mortgage Amount $ 567,927
Monthly Mortgage Payment $ 3,715
Monthly Property Taxes $ 212
Monthly Condo Fees $ 0
Monthly Heating Costs $ 0
TOTAL Monthly Payment $ 3,927
Household Income Required $ 160,288

Well, maybe you'll call in the bulldozers and build some hideous 2500 square foot monster in inappropriate colours, with inappropriate materials and attention to detail, etc. That will cost you only $312,000 - odd dollars. You are going to have to sell that monster for very close to a million bucks just to make it worth your while. You might even break even. It will only cost you about $24K to carry it while the new "house" is being built.

So, what if you can sell it for $979k (that gives you a $100k buffer for commissions, permits, PTT, GST, cost over-runs, etc.)? Who will buy it?

Well, maybe someone who bought some piece of junk 20 years ago, and sold it for $489 K, and is trading up (as if). Here's their bottom line:

% Down Payment 50 %
Mortgage TERM : 5 Yr - 6.23%
Down Payment $ 489,500
First Mortgage Amount $ 489,500
Insurance Fee ( 0 % of mortgage ) $ 0
Total Mortgage Amount $ 489,500
Monthly Mortgage Payment $ 3,202
Monthly Property Taxes $ 212
Monthly Condo Fees $ 0
Monthly Heating Costs $ 0
TOTAL Monthly Payment $ 3,414
Household Income Required $ 128,026

That's not too bad I guess. Quite a bit above median wage, but who's asking for documentation? Let's just hope the market keeps rising.

Oh, and what's with the agents who can't take a level photo'?

EDIT:

I forgot to mention that the blurb said: Offer to be presented on July 26th 2007 if there is any. Phone first.

I won't go into the grammar, but today is the 26th, so you may have missed your chance. This place was probably snapped up by someone who sleeps with an oven.

better than a condo

Today I did something that I have not done for some time - I did an RE search of all of E. Vancouver for SFH $400k or less. I got 4 hits and thought cool. Well, maybe not.

All of the four were on lots of dubious size. One was a wreck perched on an alley down at the bottom of Commercial Drive, and while the lot is a fairly normal size, they expect a quarter million shiboobles for a 1/3 "undivided interest" in the lot - that your shack will share with two other shacks. I've seen this "undivided interest" before, and don't know what it is, but I will bet that it is not in any buyer's interest to get involved.

The one featured here is on a 26' x 63' lot, and is proclaimed as a great holding property.

Here's the blurb:

Fantastic opportunity. Come & look at this 2 bedroom starter home. Close to skyt rain. Much better than a condominium. Create your own little dream home here. Bu ilt-in alarm, 2 skylights, well looked after. Nice garden area, fully fenced for your kids & pets. Great holding property.

All this for $349k.

OK, so it's not very big (700 sq. feet). We know that the photographer did not take the shot from the middle of the room, but was dizzily perched on the arm of the sofa, and up against the wall. That's a teensy-tiny living room, but still bigger than what you would get in a CONdo for a like price. Is it just me, or does that doorway look kind of narrow? Like, about 2 1/2 feet narrow.

It would appear that the agent was still woozy from taking the living room shot when she took this drunken pic'. Maybe the angle is what makes the place look so big.

The feature list elicits questions.

Features: Security System
Embedded oven

Er, where is the oven embedded? Is it like one of those Van City mixer mortgages, but you have to sleep with the oven? Is it embedded in the back yard, where it fell from a passing aircraft? Is the embedded oven a feature of the security system - as in - no one can steal your oven? Is the stove floating around somewhere, moaning in it's disembodiment from the oven?

There is a good point though - it is better than a CONdo - 700 square feet, and a garden, and it's only forty five minutes to downtown by bus (actually, it's not far from the 29th Ave. skyt rain).

Maybe next week I'll do a search for $450k or less.

addendum:

I think I may have found out about the embedded oven.

Yes, it is a bit primitive, but there isn't much room for a kitchen in this converted double-wide. It comes with the over-bed sprinkler system to keep you safe.

Breakfast in bed every day, and, saves on heating bills.

update

There is an update to this story over at The Republic.

Find more here,here, and follow the links.

It really isn't about hippy-dippy "New World Travellers" and such, but at the same time, it is. There is some wild reading to be had, and I encourage you to follow it. It is most interesting in the larger context.

I think that we, as a society, are at one of those "forks in the road", and we need to decide how to go forward - as everything that we believe comes into question. Make your own conclusions.

curbed

Not much to say for me these days, so I thought I'd drag out the curb thang agin.

I wrote about this place back in November. This is what became of the funky little cob house, and the de facto park that had grown on the lot over the last 20 years, or more. The place is done now, and doesn't look too bad (the fences and ladders are gone. At least it "fits" into it's surroundings.

I wonder if that chimney is for a wood-burning fireplace (I thought that that was not allowed in the city any more), or is just an architectural "feature".

I don't know if these homes are full of suites, or not, but the front place looks quite big. I don't like strata though. Why not just subdivide the lot?

You will see the tiny cob house that used to be there below. I think that it would have been very cool if the developer had built something along that line - just much bigger. Building materials are cheap, and it is very flame resistant to boot. It reminds me of some of Gaudi's buildings in Barcelona.

the tenant

Well, that last post was a sleeper...

Van-City Slumlords is a new blog taking on specuvestors(?) who are trying for ridiculous amounts of rent. The blogger is choked. Understandably.

I don't have much trouble with my tenancy. I have lived in the house for 7 1/2 years, and have had only 2 rent increases (in line with the RTA). Management changed a couple of years ago, and the accountant now collecting the rent tried to raise it by about 13% last winter. I told him that he had a choice between not raising the rent, and keeping us, or having to make some hefty modernizations, and good luck that the new tenants don't turn it into a grow-op. He didn't raise the rent.

I am lucky though, I have been here quite a while, so the rent was reasonable in the first place. I am glad that he didn't call my bluff though, because by all accounts, trying to rent right now is a nightmare. Amateur LL's trying to cover ridiculous mortgages with ridiculous rents on ridiculous hamster cages with ridiculous terms, and other pieces of like shite. I definitely would not buy anything. I would leave town - much as I do really like it here.

I really think that with the squeezing of tenants to cover just a part of the mortgage, the game is well nigh over. Idiots may be "happy" enough to drop 70% of take-home pay on their own abode, but there is no way on earth that people are going to pay that kind of money to rent a hell-hole. The buck stops with the tenant. That is the margin.

Check this blog out (link in sidebar). It's full of vitriol and foul language, but is a good measure of what is going to happen. At least that's what I think. The blog has video, and links that show that this is not just a local phenomenon either.

Let them eat cake indeed.

cartoon culture & funny money

I think that I might know what part of the problem is. A big part.

We do not value money, or what it represents.

What the fletch am I talking about?

Think about it - what do you think of when you think of the coins in your pocket? Dollars? Dinero? Monedas? Loons? No, you most probably think of them as loonies and toonies (or would that more properly be two-nies?). Yes, that's right - cartoon money! And when the banks will give someone like me $600G's at 4.2% (that was a couple of years ago), money is too easy to get. But it's not really. It's easy to get "credit" - which is just a polite term for debt - but the "real" money to pay that debt back, is not so easy to come by.

Our national currency reduced to a joke. How sad a mind-set is that? There are jokes to be had, but... I saw Ric Mercer Talking to Americans, and he talked to them about loonies and toonies (or is that more properly tunies?), and that we are to have a new, five dollar coin - to be dubbed The Woody. The Americans congratulated Canada on getting it's first woody. Ha!

I have little against coins (I still pick up pennies) - they are probably worth more intrinsically than notes, and cost more to produce. It's funny though, because notes were originally introduced to lighten the burden of carrying gold and silver around. That's a whole other discussion in the offing.

Anyhow, I always call my coins Loons and Doubloons. I just think it's more classy. A five dollar coin ought to be called a ducat, and we could call the $8 coin a deux-quatre (doo-catra).

I was just looking for some Loony Tunes imagery, and made some astounding discoveries. You can get loony tunes cheques, wallets, and Hasbro games cheques - including Monopoly cheques! For real. That is unflagging ridiculous.

Am I on to something, or what?

I will leave you with these disturbing images;


Our National Currency?





Warner punishes Canada by reducing the currency to a cartoon. The cheques (or "checks" in the US - there are no balances) are for real. You can get them yourself!
Don't forget your handsome checkbook (sic) wallet!


Here - print some of these up, and buy a couple of CONdo's, or get that address in Shaughnessy.





I wonder if that disc, offered by these Warner execs, is a copy of Matrix?

Hope you liked our show!

Disclaimer:
I have modified and used these images for entertainment and illustrative effect only. My use of them is under the Fair Use Policy - as described by Wikipedia. I have no affiliation with Warner Brothers, and they have not endorsed, n'or agreed with the content of this article or site.

collapsing?

OK, this is anecdotal, but I wonder if it is a sign of the beginning of the end.

My "neighbour", whose property I have written about here, here, and here (and maybe a few other places), told me today that his deal to sell his house had collapsed. It seems that the RE agent (he is also an agent) who was going to buy his place for $795K, has backed out of the deal because the person that was supposed to buy her place (another realtor perhaps?), couldn't sell their place (and so on).

The price point is in the high "low end", so I wonder if this is a sign of shaky knees in the market. Finally.

I must say that I do have a certain schadenfreude about it, as I and my family have been living in a construction zone for the past 9 months. Flat tires, noise, damage to my (rented) property, etc. It is unlike me to have those types of emotions, but...

It will be interesting to see if he can flog it without losing too much money. I will keep you up to date (whether you are interested, or not), and will probably feature the monster in the curb appall series.

ADDENDUM:

So, the BoC hiked rates by a quarter point today, and the reaction was interesting. I don't know if it was a reaction, or just the normal inscrutability of the markets, but the Dow was down, TSX was down, and the dollar was down a half cent. I don't know about oil. It was interesting to me that the dollar actually went down.

The BoC is kind of stuck - with over a quarter million jobs lost in the Ontario and Quebec manufacturing sectors in the last three years (some 39,000* jobs lost just in June), while the West continues to be smoking hot. Alberta is hot on oil and gas, and BC is hot in ...construction (those Microsoft jobs are meaningless in my HO).

The housing market in the US is still in the process of shaking itself out, and I think that it is starting here.

I wonder if rates will rise again in September. I'm not sure that they will, because the East is kinda hurting, and receives more attention in these things than does the West. It's further interesting that the East has lost so much with rates low - that should have dinged the dollar a while ago, no? (presuming that it was the high dollar hurting exports)

I have a feeling that things are about to get really interesting. The bankruptcy rate is double what it was a couple of years ago, and it won't be just mortgage rates going up. How about all those HELOC's, LOC's, credit cards, etc. being hiked too.

Gotta go and pay off my credit card, and look for the best plan for my cash.



*working from memory - it might have been 31,000 jobs lost in June.

I grabbed the picture from this blog - red guy blue state - who grabbed it from somewhere else. The red guy is blogging on RE in the US, and is worth perusing.

I like the "Doh!" take on Munch's The Scream, which I have used somewhere here before.

a lighter side

I've been doing the curb appall/appeal series for a bit now, and it's been fun, but it is starting to depress me. Maybe I'm already depressed. Maybe I'm just tired and brain-dead.

Anyhow, laughter is the best medicine (or so it is said), and it's always more fun to laugh at one's self. ulsterman provided the link (over at vancouvercondo.info) to Rick Mercer's take on Vancouver being pronounced one of the top cities to live in in the world. I am embedding the video here for some comic relief.

The woman who paid $585k seems a bit embarrassed to admit it, and she ought to be IMHO.

Gotta love Mercer and his way of getting people to laugh at themselves (or make fools of themselves...). Enjoy.

curb appeal - humble houses

I reckon it's time to move the San Andreas Champagne engagement ring love shack grow-op down on it's way into the memory hole, and good riddance.

Call me crazy, but I have always liked this little house near Trout Lake. Nothing ostentatious about it, just a simple little house with some character, on a fairly quiet street. It's the kind of place that I would be willing to pay $250k for, plus another $50k, plus some sweat, to fix it up and live in it.

But alas, I'm sure that it will be bull-dozed, and some hideous Vancouver Specious will take it's place. That monster will have a bunch of suites in it, and the area will start on a slow decline.

It's all about "eco-density" (TM - Sam Sullivan). There's not much ecological friendliness in sending hundreds (if not thousands) of these houses to the land-fill, and bringing in machinery to tear things apart, and more machinery to haul it away, and more machinery to make it look "pretty" again.

There will be trees and shrubs and hedges torn out, and the yards will be paved with concrete. Painters will dump their paints and solvents down the sewers, and the streets will be littered with screws and nails that will find their way into our tires.

I'm sure that a lot of people would be glad to get a place like this for 300 - 350K$, but the more voracious have their eyes on it as a vehicle of profit, and they will build some junk on it.

I really hope that this madness ends soon.

curb appall - petit pink prison

This one has caught my eye a few times.

At first blush it is very innocuous, and I only really noticed it because of the lack of window space. One tiny window on the western wall, and there would actually be a nice view from the upper story. I don't get it. I like lots of glass to provide natural interior light and exterior vistas, and can never fathom why builders/buyers cheap out on windows.

And it's pink.

Who would want to live in a place like this? It's nice and big, and the lines aren't bad, but one would have to be suffering some kind of light sensitivity to have a need for such interior gloom. On top of that, the windows that are there are tightly blinded. What's up with that?

And it's pink.

I heard years ago that there were builders building custom grow-ops off-plan. I never knew the veracity of that, but this place looks like a perfect candidate.

And it's pink.

It is somewhat ironic that this place reminded me of a petit penitentiary, and only later did I surmise the nefarious possibility.

And it's pink.

Maybe vampires live there.

curb appeal - the love shack

Back to my favourite subject of late (there really seems so little to comment on).

I found this quirky little gem that stands out like a diamond ring on a sore thumb. It does not fit into the neighbourhood at all - surrounding houses are post-war, Vancouver Specious, or Vancouver Specials.

I don't know if it is old or new, but I like the look of it, and would like to see more of such. I do have the idea that it is newer construction.

Let's call it the love shack.

Sorry for the crappy photo', I took it on the fly.

obituary

A friend sent this to me this morning. I thought that it was pertinent to the RE market. After all, it is a lack of common sense that has driven Vancouver RE to such heights that it requires 68-odd % of the median income to buy a median home in Vancouver. Mixer mortgages, etc.

I will leave you now, that I may spend the day in lament.

My parents told me about Mr. Common Sense early in my life and told me I would do well to call on him when making decisions. It seems he was always around in my early years but less and less as time passed by. Today I read his obituary. Please join me in a moment of silence in remembrance, for Common Sense had served us all so well for so many generations.

OBITUARY: Common Sense

Today we mourn the passing of a beloved old friend, Common Sense, who has been with us for many years. No one knows for sure how old he was since his birth records were long ago lost in bureaucratic red tape. He will be remembered as having cultivated such valuable lessons as knowing when to come in out of the rain, why the early bird gets the worm, life isn't always fair, and maybe it was my fault. Common Sense lived by simple, sound financial policies (don't spend more than you earn) and reliable parenting strategies (adults, not children are in charge). His health began to deteriorate rapidly when well intentioned but overbearing regulations were set in place. Reports of a six-year-old boy charged with sexual harassment for kissing a classmate; teens suspended from school for using mouthwash after lunch; and a teacher fired for reprimanding an unruly student, only worsened his condition. Common Sense lost ground when parents attacked teachers for doing the job they themselves failed to do in disciplining their unruly children. It declined even further when schools were required to get parental consent to administer Aspirin, sun lotion or a sticky plaster to a student, but could not inform the parents when a student became pregnant and wanted to have an abortion. Common Sense lost the will to live as the Ten Commandments became contraband; churches became businesses; and criminals received better treatment than their victims. Common Sense took a beating when you couldn't defend yourself from a burglar in your own home and the burglar can sue you for assault. Common Sense finally gave up the will to live, after a woman failed to realize that a steaming cup of coffee was hot. She spilled a little in her lap, and was promptly awarded a huge settlement. Common Sense was preceded in death by his parents, Truth and Trust; his wife, Discretion; his daughter, Responsibility; and his son, Reason. He is survived by three stepbrothers; I Know my Rights, Someone Else is to Blame, and I'm a Victim. Not many attended his funeral because so few realized he was gone. If you still remember him, pass this on. If not, join the majority and do nothing.

Author unknown

psychological factors

David sent me a link to this article at Salon.com.

I felt that it was worth re-printing (even though it is not Vancouver specific). Thanks David.

The article:

No one wants to buy a home. Whose fault is it?

At the end of May, 4.43 million "existing homes" were available for sale in the United States. That's the largest such number ever recorded. At May's existing-home-sales rate, it would take 8.9 months to burn off the excess inventory. That's the highest figure for "months of supply" since 1992, at the tail end of the last big housing downturn.

The immediate import of the numbers is unarguable. The median sales price for existing homes has declined for 10 straight months and will continue to do so. This is good news for buyers still waiting in the wings, but may not be the best tidings for the larger economy.

But what about those would-be buyers, cautiously watching the carnage from the sidelines?

Lawrence Yun, the staff economist for the National Association of Realtors who has replaced our favorite whipping boy, David Lereah, as the Man Who Must Be Quoted in all stories about the real estate market, complained that the housing market was "underperforming" given what he considered the general overall health of the economy.

"Psychological factors," he said, explained buyer reluctance to jump into the market at the present time.

How Yun and his ilk are able to cite "psychological factors" as the reason for anything is an exercise in tautological meaninglessness that continues to baffle How the World Works. If you're going to blame consumer psychology when the market is headed down, then in all fairness you should blame it when the market is going up. But back in the go-go days, we never heard anyone from the National Association of Realtors say anything along the lines of: "The real estate market overperformed this month, as home buyers, irrationally convinced that home prices would continue to appreciate beyond all rhyme or reason, stepped up their splurging on new and existing homes, rashly confident that they would be able to sell their purchases at a 25 percent markup in just one year."

Psychological factors are always in play, whether a market is going up or down. We've been giving Yun a chance to establish some street cred, but with each whine about buyer psychology, our willingness to give him the benefit of the doubt takes another hit.

-- Andrew Leonard

Goes both ways, huh?

curb appeal - modern architecture

I've been disdainful of residential construction as of late, and some may wonder what do I like?

I like this one on Semlin Dr. in East Van. I don't know a lot about it, and my Internet search for information has turned up nothing. If anyone has any info. on it, I would be glad to read it.

What I do know about it is that it was bought some years ago by an acquaintance's land lord and restored - with grants from the City and/or provincial gov'ment. It has a heritage designation ("B" list is my understanding) as one of the few examples of Modern Architecture in Vancouver. It was completely "restored" some years ago. I wonder what it's worth?

This place merits the solipsist seal of approval (TM).

curb appeal - the teal townhouse

Here you are - the teal townhouse.

This one is just off Commercial Dr. I give them a "C" for the effort to spare the aesthetic of the neighbourhood, but there is something "off" with it. It looks as if it has been transplanted from the East Coast somewhere - Halifax or St.John's. That's not a bad thing, but I can't quite give it the solipsist seal of approval.

The dormer-on-dormer is interesting, even bold, but they could have more, and larger, dormer windows on the front - which would have made it look a little less stark IMHO. The entrance treatment on the left unit is a bit odd. It would have been nicer without the blind dormer (gable, whatever), and a big covered porch. Might as well tear it down and start over.

I know - I'm a nit-picker, but I just don't get the lack of imagination and attention in the construction of these new places. It is much better than the new Vancouver Specious (which I am dubbing manifestations such as the mandarin monster) though.

And what's with the ersatz rock everywhere these days?

Gack. This is turning into the Architectural Digest. It's kind of like a critique of the Hyundai Pony (easy to find fault with). The difference is - Hyundai Ponies were cheap, and these houses are really, really expensive.

curb appall - the mandarin monster

This one is nice. A little awkward, what with the fake rock and incongruous colour scheme, but someone likes it. Not me though. I'm glad that I don't live anywhere with that in my view.

To complement the Creamsicle Cookie Cutter Castle aspect, there is not a shred of vegetation on the lot. The yard is "lawned" with rocks. That's pretty zen man. I guess you don't want to be giving up navel gazing for yard maintenance. Get a shrub or something.

To each his own, but what are these guys thinking? Perhaps they are visually compromised, and need a bright paint job in order to distinguish their house from all the colonic clones nearby. Maybe they have a lot of parties (yeah, just turn left at the mustard coloured place, drive 'til you see the Emptyville horror, take another left at the Manure Mansion and keep going. You can't miss it, it's the only bright orange house on the block)

Coming soon - the Blood Red Bastille.

flailing

Not Li'l solipsist

I read an interesting article over at The Republic relating to forecasts of economy, human behaviour, triggers to calamities, etc. It is redacted below.

The conclusion that I drew was: don't listen to the boffins! They are just flailing like little babies.

Theoretical physicist Mark Buchanan’s Ubiquity: The Science Of History . . . Or Why The World Is Simpler Than We Think (Phoenix, 2000), is a book whose implications are so powerful they’ve given me vertigo. Buchanan makes a very strong argument that, despite all appearances to the contrary, human history may be governed by very simple mathematical laws. Unfortunately, those laws would guarantee history’s complete unpredictability, and they would also fundamentally contradict the economic and political theories informing our decision-makers.

The study of non-equilibrium statistical physics shows that critical states seem to emerge whenever systems are kept far from equilibrium in conditions where the forces of chaos and order are in constant flux, and where the components of the system exert some influence on each other’s behaviour. It seems that at least some features of our collective behaviour can be reasonably explained by these concepts.

Might as well just guess

Research suggests that both stock market fluctuations and the distribution of global wealth follow power laws. This is an unnerving finding, as it flies in the face of traditional economic theory,...the effects of a relatively minor economic variable may produce anything from unnoticeable effects to such calamities as the 1929 stock market crash and the collapse of the “tiger” economies of Southeast Asia in 1997.

This helps explain why economic forecasts are so consistently proven wrong. Buchanan writes that in 1993 the OECD “analyzed forecasts made between 1987 and 1992 by the governments of the USA, Japan, Germany, France, Italy, and Canada, as well as those of the International Monetary Fund and the OECD itself. Their conclusions? Not only were each of these organizations’ predictions abysmally inaccurate, but they would have made better predictions for inflation and gross domestic product if they had scrapped all their sophisticated economic models and simply guessed that the numbers in each year would be unchanged from the last.” Similar studies have produced the same results. This has grave implications. Given that the study of economics presupposes equilibrium, and given that our nations’ powerbrokers rely upon economists for their understanding of the world, it seems that our leaders’ most basic assumptions about the economy are dangerously wrong-headed.

Indeed.