An Oversupply And Investors Are No longer As Interested
680 News reports from Canada. “A study by Angus Reid found that nearly half of millennials living in Toronto consider leaving because of high housing prices. In the survey, 45 per cent of people aged 18-34 agree they are ’seriously thinking of leaving the GTA because of the cost of owning a home here. ‘I would have loved to buy my own place in Toronto, but I ended up having to rent a place in Etobicoke,’ said Mona Khabaz, 26. Khabaz said when she’s ready to buy, she wants a two-bedroom, two-bathroom home, and that location is a big factor. Saving now could allow her and her boyfriend to have that in the future. ‘I can’t wait for the bubble to burst,’ laughs Khabaz. ‘I am looking forward to the one day that I can say I own this place.’”
From CTV Toronto. “Condo fees are rising to an unaffordable level for residents of an Etobicoke apartment building. After years of neglect, Eight million dollars’ worth of repairs were completed at a 200-unit condo building at 40 Panorma Court in Etobicoke. The building still needs another $600,000 in of work to repair mold problems. Many residents in the condo building are already paying $1,200 per month in fees but with the new renovations expected, prices could rise to $2,000 per month.”
“Unit owners like Wansa Hamo, who lives in the building, are struggling to pay the condo fees. Residents are also concerned because when condo fees rise, the units fall in value. ‘Either we will pay or they will put a lien on the unit and we will lose it to the power of sale,’ Hamo told CTV Toronto.”
The Montreal Gazette. “Federal election campaign signs have now been in place for three weeks. couple the appearance of these signs with a daily visual onslaught of other temporary signs in the neighbourhood and you get what can be referred to as sudden and substantial visual pollution. I refer to what appears to be hundreds, if not thousands of real estate and realtor agent signs that randomly clutter the landscape locally. Those are on the increase with no sign; pardon the pun, of letting up. On just one stretch of road here in front of a residential townhouse and condo development, there are at least 20 signs.”
From CBC News. “The frenzied condo-building boom in Ottawa appears to be waning and in its stead some developers are changing their plans to target renters instead of buyers. Ben Myers of Fortress Real Developments said a few years ago a condo project launch in Ottawa led to brisk sales. Now he says there’s an oversupply of units and investors who once snapped them up are no longer as interested.”
“The market shift led Myers’s company to change its plans for a 21-storey condominium tower on Bronson Avenue, instead constructing a rental building. ‘We felt we needed a change because we didn’t want to go through a prolonged pre-sale process and build a sales office and all that fun stuff if the sales weren’t there,’ he said.”
From Global News. “Declining sales coupled with elevated inventory levels has turned Saskatoon’s housing market into a buyer’s market. ‘The reality is that our market is feeling the effects of slower economic times,’ said Jason Yochim, CEO of the Saskatoon Region Association of Realtors (SRAR). ‘If someone is serious about selling their home, they need to sharpen their pencil regarding price to ensure a successful sale.’”
“According to SRAR, sales are down in nearly every price range, but most notably in the $450,000 to $500,000 and the $750,000 to $900,000 ranges. There are currently over 2,000 listings in Saskatoon, up 26 per cent from a year ago. Total sales are down 12 per cent so far this year, with 329 homes changing hands in August. Housing starts have also been affected, with construction started on 510 new single-family homes this year, down 28 per cent from the same period last year. There has been a slight upswing in multi-family starts, an increase of 10 per cent to 798 units.”
“‘It’s important to keep in mind that regardless of the market conditions, homes still sell, provided they are properly priced to the market,’ said Yochim.”
The Calgary Herald. “During August, new listings of 2,733 homes of all types outpaced sales of 1,643 units by 66 per cent in the Calgary residential resale market. Those 1,643 sales represented a drop of 27 per cent from 2,250 sales in the same month last year. As a result, the total inventory of resale housing on the market rose 12 per cent during the month to 5,146 units at Aug. 31. At the current pace of sales, the Calgary Real Estate Board (CREB) said this equates to 3.13 months of supply of resale homes, up from 2.54 month’s supply in July.”
“‘It’s higher than we’ve become accustomed to in Calgary, but it’s not a cause of concern, as of yet,’ said CREB chief economist Ann-Marie Lurie.”
“So far, the benchmark price (for an average resale home) is down just $400, or 0.09 per cent, to $456,300 from $456,700 in August 2014, after staging a modest recovery during the summer months. And Lurie noted that price gains in 2014 far surpassed this year’s declines. ‘We haven’t yet worked off all the price appreciation we had last year,’ Lurie said. ‘Those gains in 2014 were fairly steep.’”
“Hardest hit by energy-sector retrenchment has been the apartment market, where resales have dropped 39 per cent to 279 units from 456 in August of 2014. Lurie said there’s more selection in the apartment market, more vacancies in the rental market and very little upward pressure on rental rates, so potential condo apartment buyers are taking their time.”
From Macleans. “When it comes to the oil and gas industry’s hunger for new, cost-saving technologies, literally everything is on the table—particularly now, with oil having plunged to a recent low of just US$38 a barrel for West Texas Intermediate, the North American benchmark for light, sweet crude.”
“Yet while such investments make perfect sense for oil executives charged with keeping their operations afloat, the trend is collectively threatening to perpetuate the very oversupply problem that caused prices to falter in the first place: the more they can drive costs down, the less incentive there is to cut back on production. It’s also one of the reasons so many forecasters failed to predict how deep oil’s slide would ultimately become.”
“That’s bad news for Canada because, while cheap energy is generally seen as an economic tailwind, the country has become reliant on expensive-to-extract oil sands in northern Alberta to fuel GDP growth and create jobs in recent years. Now, Alberta leads the country in Employment Insurance applications. Not surprisingly, the once-hot housing markets of Calgary and Fort McMurray are also cooling rapidly with double-digit declines in home sales this summer. If prices follow suit, that could create a fresh round of pain for many local families.”
The Macleans article is worth reading in full if you have the time.
‘Residential developers have been feeling the pinch associated with the sliding price of oil. Essex Developments, Solid Rock Developments and Trimount Developments have all purchased land from the City of Estevan in recent years to develop residential subdivisions. And while all three are forging ahead with plans, they say the price of oil has slowed interest in their projects.’
‘Trimount Developments president Jason Fleury said they have seen a slowdown in sales in the last two quarters, particularly with their North Point Condominium development. Seventeen of the 39 condominiums are still available.’
“We’re actually changing a bit of our strategy,” said Fleury. “We’re selling and now starting to rent out some units just to get them occupied and create a little bit of revenue.”
‘Phase 4 is currently being evaluated due to the state of the economy. Fleury said they’re discussing whether this is the best time to put additional properties on the market.’
“We were scheduled to go this year, but that’s been put on hold,” said Fleury.’
‘He doesn’t know what will happen with Phase 4, thanks in part to the number of other single-family developments in the city already underway. Phase 4 is all single-family projects – the type of housing that Fleury said has been very successful for Trimount in the first two phases in Dominion Heights. Once some of the lots are purchased, then Trimount will decide whether it makes sense to move forward.’
“I think there is steady interest out there,” said Fleury. “It’s just that people right now are uncertain about their jobs. Buying a home is a large purchase; one of the largest purchases you make. And so they’re just a little more cautious in light of oil being around $40 per barrel, and not knowing whether they’re going to be in employment.”
2047 Nicholson ROAD
2051 Nicholson ROAD
2049 Nicholson ROAD
‘Trimount Developments third phase of Parkview Townhomes on Nicholson Road are currently under construction with a completion date of January 7/16. Your brand new 3 bedroom home with attached single garage will back onto Estevan’s newest premier park,..$299,900′
http://www.remax.ca/sk/estevan-real-estate/#queryText=Estevan,+SK&minPrice=50000&coordinatesFor=Estevan,+SK&mode=Box&province=SK&cityName=Estevan&zoom=12&south=49.06893942102183&west=-103.23957443237305&north=49.2530382022583&east=-102.8193473815918&maxPrice=&mainlist.listingPageSize=20&mainlist.groupByCities=true
I think there will be plenty of developer defaults in Alberta.
$249,900
‘New Estevan home in “The Ridge.” New construction, 1120 square foot, modular style bungalow featuring 3 bedrooms, 2 full baths, open concept living/kitchen/dining area, fridge/stove/dishwasher/washer/dryer, 3 parking spots, buyer owns the lot, community association fee consists of management/snow removal/garbage/sewer and water. Investment opportunity also available with multiple unit packages.’
http://www.remax.ca/sk/estevan-real-estate/na-164-williams-way-na-wp_id110596912-lst/
Look at how these are lined up. Only 250k! How can you Californians resist? They’re giving it away.
A $30K trailer on a $10K lot—what a steal at $240K!!
Centreville(DC Metro), VA Housing Prices Crater 16%
http://www.movoto.com/centreville-va/market-trends/
Close to home
‘re taxes going up soon
Now here’s a nifty “Gotcha” situation:
“Condo fees are rising to an unaffordable level for residents of an Etobicoke apartment building.”
The monthly payments of the bank loans may be fixed and affordable but apparently the condo fees aren’t - they aren’t fixed and aren’t any longer affordable.
“After years of neglect, Eight million dollars’ worth of repairs were completed at a 200-unit condo building at 40 Panorma Court in Etobicoke. The building still needs another $600,000 in of work to repair mold problems. Many residents in the condo building are already paying $1,200 per month in fees but with the new renovations expected, prices could rise to $2,000 per month.”
After eight years of neglect the condo fees are now going up in order to do some much-needed repairs … so, what ever became of those eight years of condo fees?
“Unit owners like Wansa Hamo, who lives in the building, are struggling to pay the condo fees. Residents are also concerned because when condo fees rise, the units fall in value. ‘Either we will pay or they will put a lien on the unit and we will lose it to the power of sale,’ Hamo told CTV Toronto.”
Hence, a Gotcha!
People: Dumb ‘em down, and profit.
The Canadian Dollar is now at a 33% discount to USD. Food prices are up significantly, yet their government’s official line is that CPI is only going up 1%. It is a very tough time to be heavily in debt on an overpriced Canadian house with hungry kids to feed.
“299″ Listings Match Your Search Criteria
http://www.coldwellbankerfortmcmurray.com/listings.asp?PAGE=1&SORT=price_down&PAGECOUNT=10
“299″ Listings Match Your Search Criteria
http://www.coldwellbankerfortmcmurray.com/listings.asp?PAGE=1&SORT=pricereduction_up&PAGECOUNT=10
‘Four Bedrooms, Loads of Parking, RV Parking, Across from the greenbelt and Birchwood Trails, all this and NO CONDO FEES. This spacious modular home has the space for the family to grow and is located in the heart of Thickwood, close to schools, shopping, bussing and the Birchwood Trail System. The main living area is a large open concept living, dining and kitchen area. The Master bedroom has a walk- in closet and private ensuite bathroom with jetted tub. The three additional bedrooms and the main bathroom are at the other end of the home, for privacy.’
Building type Mobile Home
$489,900
http://www.remax.ca/ab/fort-mcmurray-real-estate/na-109-tamarack-way-na-wp_id123455795-lst/
At least it’s cheaper because of the currency.
Relocating to Fort McMurray
‘Have you decided that it is time to relocate to a community that is thriving. A community that will provide your family with the opportunities that they deserve? Moving to the City of Fort McMurray has proven to be a great decision for many people across the country. Adjusting to our booming community can prove to be a difficult experience however the RE/MAX Wood Buffalo Property Group has made it their mission to make this process as smooth and comfortable as possible. Let one of our knowledgeable 7 agents help find you the perfect home. Take a look through our user friendly website to view homes for sale in Fort McMurray.’
‘Purchasing a home in Fort McMurray could serve to be a dauting idea for many. However the continuous flood of people and the lack of residential land has kept Fort McMurray Real Estate prices stable. Prices in the area are a true reflection of the high paying jobs and the strength of the local economy.’
http://www.fortmcmurrayrealestate.com/
I wonder if the phones are still on.
This guy is screwing up the comps:
‘$50,000 , AMAZING PRICE , AMAZING STARTER HOME ! This loaded Triple E mobile offers you 3 bedrooms , 2 1/2 baths , spacious kitchen , family room and to warm you up on those cold winter nights , a corner gas fireplace in the livingroom. The livingroom features newer flooring , the kitchen boosts ample cupboards space , open concept , natural light from it’s skylights , updated appliances and your own jetted tub in the master ensuite. Let’s not forget the large 10′x36′ covered deck and garden shed out back. Just a hop , skip and a jump to shopping , bus routes and Greely Road School. When you need to fly the coup you’re 10 minutes to the new Fort McMurray International Airport.’
http://www.royallepage.ca/en/property/alberta/fort-mcmurray/124-greenwich-lane/3596946/mlsfm0068202/
Compare to this:
$559,900.00
‘All the comforts of home in this 2 bedroom 2 bath double wide mobile home on a large lot. As you enter this home you are greeted with open concept living which includes cozy living room with corner gas fireplace , modern kitchen with pantry , stainless steel appliances , 2 skylights and a dining area with access to a private deck. There are 2 bedrooms with a large master which includes sitting area , full ensuite and walk in closet. Outside the grounds are nicely landscaped with a fire pit and a garden shed. The detached double garage is a grand slam’
http://www.royallepage.ca/en/property/alberta/fort-mcmurray/109-malcolm-bay/3578032/mlsfm0066408/
OMG, the world has gone completely insane—a double-wide for more than half a mil??!?
(though note that it must include the property that it sits on, since they did mention a detached double garage that is heated/cooled.
“Thickwood”
Snerk
“Yet while such investments make perfect sense for oil executives charged with keeping their operations afloat, the trend is collectively threatening to perpetuate the very oversupply problem that caused prices to falter in the first place: the more they can drive costs down, the less incentive there is to cut back on production. It’s also one of the reasons so many forecasters failed to predict how deep oil’s slide would ultimately become.”
Big miss for obsessive bean counters who believe rig counts somehow tell the whole story.
“Rig count” is meaningless.
Prices are getting kinda wild:
$89,900.00
‘Home with many features found in for more expensive homes. From the corner mounted gas fireplace in the over-sized living room , to the spacious front kitchen quality workmanship shine throughout. This custom built home has a unique floor plan that is smart and practical. With 3 bedrooms and 2 full bathrooms of this home provides the new owner with options to purchase the lot at a later date while gaining ownership at a very low price.’
http://www.royallepage.ca/en/property/alberta/fort-mcmurray/109-greenwich-lane/3572970/mlsfm0067701/
This doesn’t look like a “custom built” house to me.
Maybe it was “built to order” at the trailer factory.
It is blocked up about five feet to accommodate the snow pack.
I stumbled across Ben’s blog a couple of weeks ago. I lean towards this view and find the blog educational and interesting. I would appreciate the author’s and audience’s take on the proceeding news article found this morning.
Canadian housing markets mostly stable; hot pockets in Toronto, Vancouver: banks
Business
by The Canadian Press
Posted Aug 31, 2015 8:05 am PDT
Last Updated Aug 31, 2015 at 9:00 am PDT
TORONTO – The cost of owning a home has been holding steady in most parts of Canada, but affordability declined during the second quarter in the two most expensive markets, Vancouver and Toronto, a report by Royal Bank says.
In its latest analysis of housing trends, RBC also said Monday it expects prices will continue to rise in Toronto and Vancouver in the short term because of tight supplies of detached homes for sale.
The bank said supply and demand are more balanced in other Canadian markets and affordability has been close to the long-term average since 1985.
In a separate report, TD Bank (TSX:TD) said it expects a decline in Canadian borrowing rates in the first half of 2015 will likely boost demand into the early fall, but then have a waning effect in the late stages of this year.
It says the low-rate environment has helped to keep markets “humming” in hot markets and reduce the impact of low commodity prices in other markets, particularly in Alberta and Saskatchewan.
TD said commodity-dependent regions such as Edmonton, Calgary, Regina and Saskatoon “have weakened considerably so far this year, but to a lesser degree than was originally anticipated.”
“Elsewhere, markets that had embarked on soft landings over the last few years, including Ottawa, Montreal and Quebec City, have seen activity either stabilize or perk up,” TD said.
The RBC quarterly report takes into account income, property prices and the typical costs of home ownership, such as mortgage payments, utilities, taxes and fees when calculating its affordability measure.
“The central theme for housing affordability in Canada continues to be the wide divide between stretched conditions in Toronto and Vancouver, and fairly neutral conditions in the rest of the country,” RBC said in its report.
“The split, in fact, widened during the second quarter of 2015, with strong price increases for single-detached homes in Toronto and Vancouver squeezing affordability further in these markets, whereas a slow pace of appreciation — at best —kept the cost of home ownership mostly stable in the majority of other markets.”
RBC said there was evidence that buyers were more confident in Alberta than they had been in the previous two quarters as a result of the dramatic decline in oil prices, but “prices still remained under slight downward pressure for the most part . . . “
“The picture was a little different in Saskatchewan where a recovery in single-detached home prices negatively affected the affordability of bungalows and two-storey homes.”
In Quebec, RBC said home prices were “quite stagnant” and that contributed to improved housing affordability.
“Widespread improvements similarly took place in Atlantic Canada, although there remain few indications that housing demand is turning a corner in the region.”
Just like we’re seeing in the US. The complete failure of tinkering with demand.
‘It says the low-rate environment has helped to keep markets “humming” in hot markets and reduce the impact of low commodity prices in other markets, particularly in Alberta and Saskatchewan.’
Because that’s what houses are for; propping up the economy. This juicing of house prices is going to be greatly regretted everywhere it’s been done. Canada is in a worse place than most of the US, and I don’t see a soft landing ahead.
‘What does $450,000 worth of real estate look like in Canada?’
‘Starting up north, where the average house price in June 2015 was $449,567, winters are long but lots are large. This Yellowknife home listed for $459,000 features three bedrooms and one-and-a-half bathrooms. The kitchen boasts granite counters and stainless steel appliances. The sprawling backyard has a large deck, a firepit and appears to back onto a wooded greenspace.’
http://globalnews.ca/news/2159095/see-what-450k-of-real-estate-looks-like-across-canada/
“a wooded greenspace”
Greenspace, like it was a planting or something. That’s called the bush. But we guess they aren’t making any more Canadian bush.
I know. I spent an afternoon and a night in Yellowknife once. It took me 3 days to drive across British Columbia and the Yukon on the way to Alaska. And they have $500,000 houses with 1.5 baths? I made that trip in 2001. I already had the idea that there was a bubble from 1998. I looked at the prices then in Prince George, Dawson, and eventually Anchorage and I started to understand how widespread it was.
I hadn’t thought about Prince George in a long time, so I looked at some houses online. Check out this monstrosity, empty and it looks new:
http://www.century21.ca/Property/BC/V2N0B7/Prince_George/4609_GANNETT_RD
‘Bright and beautiful, ground level entry home in Tyner Ridge Estates. Modern fixtures and colour scheme throughout. Upstairs features 3 bedrooms with an amazing master ensuite, a custom white kitchen with access to a covered patio and a liv ing room with 12 ft ceilings, gas fireplace and custom shelving. Eating area has oversized sliding glass doors to the front covered deck. Located steps away from major shopping and bus routes. RV parking. Large backyard. Exterior hardi-plank siding.’
$479,900
http://www.century21.ca/CA/BC/Prince_George
‘When any area has a booming economy, real estate opportunities are sure to follow, and you’ll discover that this truth will be very evident in the lovely area of Prince George, BC. You’ll find that there are lovely homes for sale in this beautiful area. Whether you are looking for two, three, four or five bedroom homes, you’ll find all that you require in Prince George. What makes this area even more attractive is the fact that many of these homes are extremely affordable.’
1,317 Active Listings
$302,340 Avg. List Price
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“Check out this monstrosity, empty and it looks new”
That pole in the basement… mom can stay limber.
“Canadian housing markets mostly stable…”
Meanwhile oil has tanked by 50% or more, and Canadian pipeline oil imports are the U.S. largest, Mexico next and then the Saudi tanker crude. Don’t forget the demographic retirement/entitlement wave underway in Japan, Europe and north America.
These are not good times to be deeply in debt.
Politics and home renovation collide:
http://www.nydailynews.com/news/politics/canadian-candidate-caught-urinating-coffee-mug-article-1.2350811
he said in a statement to CBC. “I take great pride in my work”
‘A stock-market crash could erase as much as $170.3 billion from major cities’ gross domestic product in the U.S. and Canada and is the biggest threat to their economies, Lloyd’s of London said.’
‘The losses, which represent about 2 percent of combined GDP for the 35 cities studied, surpassed estimates for the impact of natural disasters such as floods and earthquakes as well as terrorist attacks, the London-based insurance market said Thursday in a report.’
“Market crash puts the most GDP at risk globally — representing nearly a quarter of all cities’ potential losses,” Lloyd’s said. “Man-made threats are becoming increasingly significant.”
http://www.bloomberg.com/news/articles/2015-09-03/market-crash-could-cost-north-america-170-billion-lloyd-s-says
170 billion? that seems very low. I read the losses in the US r already 2 trillion. Could be 10-20 trillion when this settles out.