Vancouver Real Estate Market Report

  

Market Profile: Vancouver Metro Area M  

onday, May 31, 2011

Vancouver Real Estate Market Report By Gilbert Mohtes-Chan, Matt Carter, Steve Bergsman

This 20-page report highlights real estate market statistics and trends in the Vancouver, Canada, metro area, and includes commentary from real estate professionals. (Flickr image courtesy of Dekaritae.)

INSIDE:

Summary: Vancouver housing prices climb to global heights........................................................................ page 2

Market Data: Vancouver market statistics ......................................................................................................page 5

Q-and-A: Vancouver real estate professionals share their insight on market conditions, trends ................. page 6

News and Views: A collection of real estate news articles and columns focusing on Canadian markets .. page 11

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Vancouver Real Estate Market Report

 

Vancouver housing prices climb to global heights

By Gilbert Mohtes-Chanr May 31, 2011

Home prices in Greater Vancouver, Canada, continue to rise as the region's spring homebuying season got off to a strong start.

Buyers flocked to the market during the first quarter, fueled by heavy sales volume in the Richmond and Vancouver West areas. Although housing sales slowed in April, the benchmark housing price increased, topping $620,000.

Recent changes in mortgages rules could make it even tougher for first-time homebuyers to enter the market, considered one of the priciest housing markets in the world.

This report highlights real estate market statistics and trends in the Vancouver metro area and includes a chart with detailed market data and commentary from local real estate professionals.

Overview

Greater Vancouver housing sales cooled off in April after moving at a red-hot pace the previous two months.

Canada's third-largest metropolitan area saw residential sales of single-family detached, attached and condominium properties decline 21 percent to 3,225 year-over-year, according to the latest report from the Real Estate Board of Greater Vancouver. Sales were off 8.2 percent from March. The board attributed the April sales decline to a slowdown in condo sales.

The board's benchmark Housing Price Index for all residential properties rose to $622,991 in April, up 5 percent from $593,419. The benchmark represents the sales price of a typical property within the market and is considered a more accurate reflection of prices.

A sales spurt of multimillion-dollar homes in some parts of Vancouver skewed the average sales price of a home nationally, pushing it up to $372,544 in April, according to the Canadian Real Estate Association.

An influx of homebuyers from mainland China in the past six months has triggered a wave of seven-figure housing sales, especially in the Richmond and West Vancouver locales.

The Canadian Real Estate Association reported the average sales price in April for a Vancouver residential property at $815,252, easily outpacing the average sales price tracked for 15 other major Canadian cities.

Neighboring Victoria ranked second nationally, at an average sales price of $508,005, followed by Toronto at $477,406. Vancouver real estate officials say April's residential sales reflect typical spring activity and indicate a better balance between the supply of housing on the market and demand from homebuyers.

In fact, sales were up 8.8 percent compared to the same period in 2009, and were unchanged from 2008.

In contrast, the number of homes sold and added to the market moved at a near-record pace in February and March.

Fewer new properties came onto the market in April than the year-ago period -- 5,847 compared with 7,648 in April 2010, a 23.5 percent drop. New listings were down 14 percent from the previous month.

"We are sitting on a good, strong, stable market. The consumer out there is always more comfortable with a normal, stable market," said Rosario Setticasi, president of the Real Estate Board of Greater Vancouver. "Right now we are sitting at that edge. If sales pick up, it's a seller's market again."

Here's the April sales breakdown by housing type:

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1,402 single-family detached homes, up 2.3 percent from a year ago; the benchmark price of $879,039 is up 7.4 percent year-over-year.

1,201 condos, down 21.3 percent from a year ago; the benchmark price of $409,242 is up 2.9 percent year-over-year.

622 attached homes, up 1 percent from a year ago; the benchmark price of $514,670 is up 2.4 percent year-over-year.

Unlike many of their counterparts in the U.S., Vancouver real estate professionals are seeing a steady housing market in a post-recession recovery. Because of tighter and more conservative lending practices by the nation's financial institutions, Canada's housing market isn't burdened by a glut of distressed properties as in the U.S.

"Our banking system tends to be a little more conservative in providing loans for homes. That (mortgage) meltdown did not have any affect in our banking industry." Setticasi said.

"Bank foreclosure properties are not spiking. There's the usual amount of bank foreclosures that seem to be related just to personal issues," said David Hutchinson, an agent at Century 21 In Town Realty in Vancouver.

"Foreclosures rarely are really good deals in Vancouver. There is a system in place to ensure market value of the sales price."

In British Columbia, only 0.49 percent of all residential mortgages were at least three months in arrears in February, according to the latest figures from the Canadian Bankers Association. That's up slightly from 0.41 percent during the same period a year ago, 0.27 percent in 2009, and 0.16 percent in 2008.

Canada's economy sputtered in the second half of 2008, fell into a recession, and then began to rebound by the end of 2009. Last spring, the British Columbia Business Council predicted the province would become one of the country's growth leaders over the next couple of years.

The council's British Columbia Economic Index continued to rise in the first quarter of 2011, signaling moderate growth for the province.

"Our economy seems to be clicking pretty good out here," Setticasi said. "The West Coast is a desirable area."

Desirability comes with a price, as Vancouver is one of the world's least affordable housing markets.

In a February Housing Trends and Affordability report, Royal Bank of Canada senior economist Robert Hogue wrote, "In our view, the area's poor affordability -- the RBC measures for Vancouver are still far above their long-run average -- will continue to weigh on local demand and cause a high degree of stress within the market."

Compounding the affordability issue, Hogue said, is the cost of borrowing, which is expected to rise in the next two years.

"With prices rising, there is always a concern about affordability," Setticasi said.

Yet Vancouver and British Columbia, in general, remain attractive markets for Canadians looking for better job prospects or a place to retire. Statistics show more Canadians are moving to the province than leaving, the British Columbia Business Council reports.

Considered Canada's gateway to the Pacific, Vancouver increased its global visibility as host to the 2010 Winter Olympics. It has seen a recent wave of foreign investors, especially homebuyers from mainland China, who are purchasing properties in areas such as Richmond and the west side of Vancouver.

To seize this opportunity, some brokerages have formed Mandarin-speaking real restate teams.

"The Vancouver West detached home market is red-hot with mainland China foreign investment. Some homes (are selling at) a half-million dollars over asking price," Hutchinson said.

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"The Vancouver West market is now pushing the same trend eastward to traditional blue-collar East Vancouver. It's now pushing these usually affordable, older-type homes into the $1 million range."

Gilbert Mohtes-Chan is a freelance writer based in California.

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Market Data Vancouver Metro Area    Population (2010 estimate)  2,374,628 million  Population growth (2001‐10)  +19.5% Total closed sales (2010)  30,595 % change closed sales (2009‐10)  ‐14.2% % change closed sales (April '10‐April '11)  ‐8.2% Sales per person  1 sale per 78 people Benchmark sales price (April 2011)   $622,991 % change benchmark sales price (April '10‐April '11)+5%  % mortgages in arrears (British Columbia, Feb. '11)  0.49% % of sales distressed (March 2011)  +60% % household income needed to afford a house  77.8% % unemployment (April '11, 3‐month moving avg.)  11.8% Walk Score  72 Rent‐vs.‐ownership ratio (% households in 2006)  35%/65% 

Sources: Statistics Canada, British Columbia Ministry of Citizens' Services, Real Estate Board of Greater Vancouver, Canadian Bankers Association, Walk Score and RBC Economics Research. 

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Q-and-A Inman News asked some area real estate professionals to share their insights on the latest real estate market trends in the Vancouver, Canada, metro housing market.

Q: What types of properties are selling fastest and slowest in your market area?

Susan Keevil Agent Re/Max Select Properties In regard to the downtown attached markets, we continue to see high activity in the entry-level price points, with one-bedrooms in the $399,000 to $499,000 range moving well, especially in the core areas.

Susan Keevil

Similarly, entry-level two-bedrooms in the $500,000 to $625,000 range continue to move at a good pace. Westside neighborhoods with proximity to the downtown core have also seen transaction volume increases over the past few months.

Renovations have been the flavor of the day on the Westside, with many owners opting for full upgrades in hope of tapping into the demographic of first-time buyers who seem to prefer "new and contemporary."

Luxury properties continue to move at a more moderate rate, with a number of relatively recent project completions. Westside detached homes continue to move at a great pace; the market has displayed resounding stability over the past year or so with entry-level homes.

Andrew Peck Vice president and general manager Royal Pacific Realty The Westside of Vancouver and West Vancouver are hot for single-family property pChinese immigrant buyers are driving this market. Since Jan. 1, for West Vancouver hpriced from $3 million to $10 million, there have been 74 sales, with the top price being $6.5 million, whereas in the same period last year there were only 32 sales for that same five months.

Andrew Peck

urchases. omes

Interestingly, the new-house market in the Vancouver Westside area is slow due to anticipation that there may be a tweaking of Harmonized Sales Tax (a combination of the federal and provincial sales taxes) in the upcoming referendum. Also the buyers are purchasing older properties with the intent to have a custom home built for them at a later date, thus saving the HST on the land component.

Scott Russell Managing broker Sutton Group Seafair Realty Richmond, Canada The fastest-selling properties in our market are single-family homes ... where the new buyer will be redeveloping in the near future to accommodate a new home.

Scott Russell

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Matthew Collinge Agent Royal LePage Westside Single-family homes are selling fast. This is being driven by in influx of buyers from mainland China who are looking for a safe place to invest in real estate. The condo market is slower. There is a ... growing supply of condos. They aren't building any more single-family lots in the city of Vancouver.

David Hutchinson Agent Century 21 In Town Realty I feel Vancouver is now going through its real estate renaissance. I have seen the dynamic changes that have taken place over the years: Expo '86, 2010 Winter Olympics, and the huge influx of foreign investment over the years from all over the world.

Matthew Collinge

Dan Scarrow Vice president, corporate strategy

Macdonald Realty Group Single-family homes in the city proper are the best-selling asset class. Apartments and townhomes are still strong; however, the market is more "normal" and less "heated" the further outside of Vancouver you go.

David Hutchinson

Q: Is anything changing about the demographics of buyers and sellers in your market area? KEEVIL: Vancouver has long been a very global market, with participants ranging all the way from mainland China and Hong Kong to the Middle Eastern areas, as well as Europe and the United States. Along with these very worldly market actors we have the local Vancouverites, including many first-time buyers who quite often operate under the dual-income models, who help fuel much of the entry-level condominium activity.

Dan Scarrow

Overall, the Vancouver markets have remained a steady mix of many people from many places; though we have seen a bit of a tail-off in the luxury international "jet setter," markets with very-high-value properties often taking a bit longer to sell, with a slight downward pressure on prices.

PECK: I have seen a very strong immigrant market from Asia and ASEAN member countries, particularly those whose economies are quite sound and where there might be political uncertainty. As the region comes out of recession, we see more employment, particularly of young new immigrants, and they are very keen to be homeowners quickly.

Because of tightened mortgage entry standards, a lot of buyers were jumping early to get their mortgage qualified sooner and to hold rates. Most expect there to be some shift upward in the Bank of Canada prime rate -- slowly, over the balance of the year.

This is also causing new buyers to be very conscious of rates. While most commissions we see being charged on paper are quite typical, we do see a lot of discounting on closing deals, with rebates to both buyers and sellers. This is quite typical of new immigrants expectations in this marketplace.

HUTCHINSON: I'm seeing more first-time homebuyers purchasing homes with the help of their parents.

SCARROW: Locals are being priced out of the single-family home market in Vancouver and are looking more at apartments and townhomes, as well as outlying suburban areas.

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Q: What are recent trends with prices, sales and inventory?

KEEVIL: Downtown attached condominium and townhouse sales continued to be a strong point for the Vancouver market. Entry-level activity has been especially busy (in) ... the False Creek North corridor and Yaletown proper areas. We have, however, seen a bit of a peak in a recovery wave we have been riding for the greater part of the past year.

Westside detached homes have continued to demonstrate stability, with much of the product still moving in good time, and quite close to asking prices.

PECK: Prices will continue to rise over the balance of this year, but not nearly as rapidly as they did in those first three months. We haven't seen too much movement upwards in condo prices, particularly in the high end, but new condo projects continue to have a speculative market for people who purchase with the intent to eventually flip for a small profit. We are also seeing a large number of sales (more than 50 percent in the key market areas) selling for more than the asking price.

The other thing we have seen this year is the number of days on the market is very short for preferred areas. Good locations have only been on the market for mere days, whereas last year we would see properties on the market for 30 to 90 days for the same area. This might modify as the spring market settles down with more listings.

HUTCHINSON: There's a marginal higher inventory of homes for sale, but prices are not declining. Richmond, which is a predominately Asian community where street signs are in Chinese and English, has skyrocketed 20 percent in price over the last year.

SCARROW: Prices have increased significantly in the past year, predominantly for single-family homes in the more tony neighborhoods of Vancouver. Some areas have experienced price gains in excess of 30 percent in the past 12 months. Sales have remained brisk for the past couple of years, consistently beating the 10-year average, while inventory is low.

Q: What worries you most about the current state of the market, and what represents a sign of optimism and opportunity for the real estate market?

KEEVIL: As far as the central Vancouver West real estate markets are concerned (including downtown and the Westside neighborhoods), there should be room for optimism grounded in stability. We have been riding the post-recession wave for the greater part of 12 months,

And though it may "crest" to a degree, we feel confident in the markets' sustainability and insulation from potential shocks. Alongside a strong contingent of global investors and part-time residents, we see a strong push from our local buyers and sellers, with first-timers fueling much of the entry-level condo market, new families moving up to starter homes, and empty nesters downsizing -- plus, just about everything in the middle.

Healthy banking conditions and mortgage considerations make for predominantly stable and solid ownership, with minimal risk of foreclosure or short-sale activity in our core markets.

RUSSELL: Affordability is always a concern in a rising market. With interest rates trending upward, it will only provide more pressure on first-time buyers.

PECK: Affordability and government intervention to try to quiet a market (particularly in mortgage markets) tend to have a short-term flurry effect, which drives prices up further. I also think that governments are not paying attention to the fact that we are overly taxed in the real estate sector.

COLLINGE: My biggest concern is the high prices and affordability for the average Vancouver homebuyer. This past month has shown a calming of the Vancouver real estate market, and it is approaching a more balanced market.

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SCARROW: Prices have been increasing at an unsustainable rate for the past 12 months, while local buyers are being priced out of the market. Chinese immigration has always played a large role in the health of the Vancouver real estate market and this trend is expected to continue for the foreseeable future.

Q: Where are sellers moving to, and where are the buyers moving from in your market area? Does this represent a change?

KEEVIL: Our markets tend to act in tandem much of the time with the interactivity between the downtown attached and Westside attached markets also influencing the detached markets as families move from condos in Yaletown to starter homes in Cambie or Mount Pleasant.

We continue to see the influence of the global actor, with many potential buyers still coming from areas like mainland China and the Middle East. Recent developments in the Fairview and Cambie areas, including the new Canada Line, have assisted in linking many areas of Vancouver and have drawn buyers to new developments and older condominiums in these areas due to the ease of travel around the city.

RUSSELL: Many sellers are downsizing or leaving the city as they are taking advantage of lower prices in surrounding communities. This is probably pretty typical of a seller's market.

PECK: Local sellers are seeing the opportunity to cash out of single-family properties and move to a condo lifestyle, particularly in the high-end downtown core. Also, some are sitting on cash, waiting for what some speculate (will be) a course correction. However, that may not be proven in the long run.

An informal survey of the Okanagan retirement areas of Kelowna and Penticton has not seen a flood of Vancouver buyers who are seeking a retirement home. I don't expect too many buyers coming from other areas of Canada or the United States. The Asian market will remain the strong market influence.

HUTCHINSON: Sellers are moving to the suburbs, where they can get more bang for their buck. For example, a couple just sold their house in Vancouver West Kitsilano, and bought another house in Vancouver East; and could put $500,000 cash in their pocket. Also, with SkyTrain, some young couples starting new families are moving from downtown along to the SkyTrain line to New Westminster and Surrey, making a lateral move cash-wise, but into larger homes.

SCARROW: Locals are looking to downsize, switch asset classes, or move to other, cheaper areas of the province. A recent Macdonald Realty study found that Chinese buyers purchased 78 percent of homes priced over $2 million. And while $2 million represents a luxury home in most other jurisdictions, it is the benchmark price for an average home on the Westside of Vancouver. Q: How have you changed your business to mirror the market and to capitalize on market trends?

KEEVIL: The Internet continues to offer a progressive and constantly changing marketing landscape with limitless potential for lead generation, client maintenance, and social media. Still, we remain committed to our clients and referral system, with many of our new listings and buyers coming from recommendations from past clients, friends and family.

The Internet continues to develop and be an important tool for us as well, though we do still participate in some targeted paper marketing and ad campaigns aimed at augmenting our other marketing types.

RUSSELL: Our marketing plan is traditional real estate: Build strong relationships, encourage sellers to list at realistic levels, and have a healthy communication plan with your clients.

PECK: We have had to hire significantly more support staff to keep up with the increased number of transactions. We have seen a surge in the number of new Realtors joining the profession as well, and they are younger than before -- particularly those from Asian countries. Brokerage models have not adapted too much to changing demographics, meaning that large brokerages with several hundred agents remain core to the business.

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While sales prices might be skyrocketing, commissions have not kept similar pace. Those new entrants are willing to do more work for less money in order to get a foothold into the market. The conventional paper mail-out through the local postal service is now being superseded by social media and Internet advertising.

This represents less cost, but is a more time-consuming approach to marketing; which, naturally has an increased labor cost. So, there is a trade-off there.

SCARROW: Many companies now have an "Asian" strategy to try to capitalize on this market. These brokerages have hired Mandarin-speaking agents and staff to meet this growing demand.

Q: What are some overall economic trends you are seeing in your market area that will guide the real estate market?

KEEVIL: Vancouver remains a unique market due to the international variables that see a large amount of foreign capital flowing both into and out of the city; as such, the core Vancouver West markets tend to be a bit more sensitive to fluctuations in global economics. Anything from commodity prices to currency exchange rates can have an immediate or delayed impact on real estate activity in the city.

The stability of the Canadian banking system, election of a new Conservative majority government, and progressively strong commodity valuations will all assist in making Vancouver a desirable area in which to own real estate assets, and assist in spreading the perception that Canada as a whole is better equipped, from a financial standpoint, to deal with possible shocks and economic downturns in the future.

PECK: British Columbia has come through the recession relatively unscathed. However, the shining market is really in the Vancouver metro area rather than in other areas that have been traditionally more resource dependent on export to the United States and other places.

We don't expect any significant changes in the mortgage rates, which remain a good sign. However there remains concern that if buyers are overextended and once rates finally do shift upward, that some will feel shrinking disposable income once their mortgage debt is serviced. With rising energy prices in the region (second-highest gas prices in the country) consumers will continue to seek housing closer into the central core, which will trend prices upward.

SCARROW: Canada remains a strong personal and investment destination for overseas buyers. The immigration consultants I work with believe that Canada is now the No. 1 desired destination for Chinese immigrants, ahead of the U.S. and Australia, with Vancouver absorbing the most investment-category immigrants. These factors will ensure that the Vancouver real estate market will remain buoyant in the near term and midterm.

Gilbert Mohtes-Chan is a freelance writer in California.

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N ews and Views 

Regulators' lawsuit seeks real estate VOWs Toronto Real Estate Board says it's moving to implement rule change By Matt Carter May 27, 2011

(Flickr image courtesy of Abel Cheung.)

Canadian regulators have sued the Toronto Real Estate Board (TREB), saying it's denying agents the ability to share in-depth listing information with consumers through password-protected Virtual Office Websites, or VOWs.

TREB -- which with 31,000 members is the largest real estate board in North America -- says it's working to implement rules governing VOWs by the end of August, and that the suit by Canada's Competition Bureau amounts to little more than political grandstanding.

Technology-based U.S. brokerages like ZipRealty and Redfin employ VOWs to provide consumers with access to deeper listings data, rivaling what brokers and agents see when they log in to their multiple listing service (MLS).

VOW sites let consumers see previous listing and sale prices, historical prices for comparable properties in the area, and the amount of time a property has been on the market, for example.

While agents who belong to TREB can provide detailed MLS listings information to customers by hand, mail, fax or email, "there are currently no VOWs operating in the Toronto real estate market that enable customers to search a full inventory of listings," the Competition Bureau said in announcing the suit.

In its complaint, the Competition Bureau said real estate boards and associations in other Canadian jurisdictions, such as Nova Scotia, allow members to provide Internet-based services.

VOW brokerages "have lower operating costs and are able to offer markedly reduced commission rates or significant rebates to their customers, a practice denied to would-be innovative brokers" in the greater Toronto area, the complaint said.

In 2007, the Competition Bureau alleged in its complaint, TREB went to court to enforce its right to terminate a prospective VOW operator's access to the MLS.

"TREB has cultivated a reputation for shutting down any broker who develops an innovative service that is prohibited by the TREB MLS restrictions, including VOWs," the complaint states. The board "has created a hostile environment for VOWs" in the Greater Toronto area, "resulting in a chilling effect on any broker who would otherwise wish to invest the time and money (including legal fees) necessary to begin operating a VOW."

TREB President William E. Johnston said the board sees allowing VOWs "as a reasonable thing to do," and began a process for implementing the necessary changes to MLS policies in July.

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TREB's board of directors has signed off on the concept, and an MLS committee is drafting proposed rules, Johnston said. Under TREB's bylaws, the proposed rules would be subject to member comment for 60 days before the board of directors votes on them in August.

Johnston said the rules will be similar to those adopted by the National Association of Realtors in 2008 to settle a lawsuit filed by the U.S. Department of Justice.

The settlement gave brokers and agents who belong to NAR-affiliated MLSs the right to operate VOW sites, and many non-Realtor-affiliated MLSs also offer such capabilities.

"It's heading in a good place -- as a board we're fully in favor of VOWs, we just want to make sure it's done properly," with consumer protection in mind, Johnston said.

Canada has "very strong privacy laws and laws around identification of financial transactions," said TREB board member Richard Silver.

"We have been using the NAR VOW policy as a model and are on track moving forward but sadly, not fast enough for the Competition Commissioner," Silver said, referring to the Competition Bureau's head, Melanie Aitken. "As you know, member organizations don’t have the flexibility the corporations may have."

A spokesman for the Competition Bureau said regulators have been in discussions with TREB since early this year, with the goal of achieving a "mutually agreeable voluntary resolution."

Eventually, the spokesman said, "it became clear to us that (TREB) was not willing to make substantive changes to (its) practices" to address the bureau's claims that the board's policies amounted to anticompetitive restrictions.

Johnston called that assertion "totally ridiculous," saying TREB was engaged in good faith discussions when the Competition Bureau filed a "headline grabbing" lawsuit with Canada's Competition Tribunal, an administrative court that decides disputes over issues ranging from mergers to restrictive trade practices.

Asked whether other Canadian real estate boards restrict members from operating VOW sites, the Competition Bureau spokesman said it took action against TREB after receiving complaints about that board's practices.

"Should any other real estate board be engaging in similar activity, we'd like to know about it," the spokesman said.

The Competition Bureau and the Canadian Real Estate Association last year entered into a consent agreement that ended a 3 1/2-year battle over rules that the bureau alleged were aimed at restricting competition from flat-fee, limited-service brokerages.

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North America's newest real estate renaissance Natural resources fuel housing, population boom in North Dakota, Saskatchewan By Steve Bergsman March 11, 2011

Six years ago, my wife and I took a car ride through the center of Saskatchewan, Canada, spending a few days in the capital city of Regina and the small, isolated town of Moose Jaw. We preferred Moose Jaw.

At least Moose Jaw had some quirky things going for it, such as an underground town trail. Regina seemed beat-up and despondent. I guess I arrived two years too early, because around 2007 the province of Saskatchewan caught economic fire, uplifting its two biggest cities: Saskatoon and Regina.

When the U.S. and Eastern Canada began slipping into recession and residential real estate values collapsed like deflated balloons, home prices skyrocketed in Saskatoon and Regina and investors partied like it was 1999 in a Miami Beach condo. They are still partying today, but more moderately.

"In Regina, three-bedroom houses that sold for about $110,000 in 2006 saw prices climb to $270,000 before leveling off," reported Rod Spence of Century 21 Conexus Realty Ltd. in Regina.

Things were even better in Saskatoon, where the $160,000 average home price in 2007 vaulted to $300,000 by the spring of 2010, said Norm Fisher with Royal LePage Saskatoon Real Estate. Prices have leveled off there, too, with average homes prices now fluctuating between $275,000 and $300,000.

The person who clued me into the Saskatchewan renaissance was Bill Madder, executive vice president for the Association of Saskatchewan Realtors. "Saskatchewan used to be known for cheap houses and not many people," he said.

For the past decade, I'd been visiting Canada at least twice every year and that was my impression as well. Next to Newfoundland, Saskatchewan was the most disparaged province in the country. Ask about Saskatchewan and the first thing someone would do is repeat the painful canard that the province is so flat you can watch your dog run away -- for days.

Realtors and homebuyers suffered. "The way it used to be in Regina was you would buy a house for $150,000 and five years later it was worth $150,000," Spence joked, but the comment had a strong grain of truth to it.

What changed for Saskatchewan were two things: one temporal and the other of more sustenance.

As in the U.S., home prices were quickly escalating in most major Canadian cities since the mid-1990s so investors looking around for cheaper playing fields discovered Saskatchewan, which had completely missed the residential run-up. Investment dollars poured in.

"In 2007, we had 4,000 transactions -- that was a 33 percent increase over the year before," Spence said about Regina. (In 2010, 3,500 homes were sold through November.) In Saskatoon, during that wacky 2007, home prices jumped 20 percent. (Prices are still rising but at a much more moderate rate, said Madder, probably at a 4 percent to 5 percent pace in 2011.)

As prices escalated, pure investment interest in residential housing waned, which is OK because sustainable investment capital has taken its place.

Although mostly known for its agriculture, Saskatchewan has blossomed because demand for its natural resources skyrocketed, attracting billions of dollars in investment and immigration from other provinces. Saskatchewan boasts 51 percent of the world's deposits of potash, which is used in fertilizers.

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Less known is the fact that Saskatchewan is Canada's second-largest producer of oil behind Alberta. However, much of Alberta's oil comes from tar sands; in Saskatchewan you can get the product the old way, by pumping it out of the ground.

With the development of natural resources came jobs and people to fill those jobs. "We have been running about 60,000 new immigrants a year across the province over the last couple of years," said Fisher. Most of those folk settle in or near Saskatoon or Regina.

Saskatoon's population has grown 10 percent since the start of 2007 and today is around 225,000 people, slightly more than Regina, which has a population of about 210,000. The latter city boasts one of the lowest vacancy rates in the country, under 1 percent for rental housing.

Both cities are playing catch-up. According to the Canada Mortgage and Housing Corp., during the first 11 months of 2010, 650 single-family houses were built in Regina, up from 569 units the year before. In Saskatoon, 1,522 detached single-family units were built over the same time period, up from 1,004 units in 2009.

Apparently, Saskatchewan's good fortune has spilled south of the border into North Dakota. The Wall Street Journal, with a headline screaming, "Resource-Rich States Surge," reported, "The states that weathered the recession best were the energy-rich states of North Dakota and Alaska."

I gave a call to Dan Deutsch of www.fargohomes.com to see what was happening in North Dakota's largest city.

"Our economy is good; unemployment is close to 3 percent; the state budget is in the black; we have few foreclosures; and homes on the market close in three months," he said.

The median home price in Fargo stands at $160,000, about where it was last year, and very close to peak, said Deutsch. While appreciation isn't great, the good news for Fargo homeowners is the last time the market saw a significant downturn in residential values was back in the 1970s.

From 1990-2000, the city of Fargo grew just over 20 percent, to about 91,000 people. In the past decade, Fargo grew another 10 percent to about 100,000. (The metro area counts about 200,000 people.)

According to Deutsch, business has been good, as he closed an average two home sales a month in 2010. "Loans are easy to get here," he said. "The banks aren't afraid to lend money."

For a long time, North Dakota, like Saskatchewan, had not been on anyone's radar as place to find work and live, but the northern Midwest states and provinces are finally having their day in the economic sunshine.

Steve Bergsman is a freelance writer in Arizona and author of several books. His latest book, "After the Fall: Opportunities and Strategies for Real Estate Investing in the Coming Decade," has been ranked as a top-selling real estate investment book for the Amazon Kindle e-reader.

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Vancouver Real Estate Market Report

 

Real estate tales from the borderlands Sizing up capital cities along U.S.-Canada boundary By Steve Bergsman Nov. 29, 2010

About two months ago, I took a look at how the housing markets in two of North America's capital cities -- Washington, D.C., and Ottawa, Canada -- fared in the recent downturn.

As it turned out, both markets saw some slight downturn, but with a stable employment base of federal workers and government lobbyists, the cities came through the global recession without the bruising real estate market maladies experienced in other major cities.

That got me thinking about state and provincial capital cities, so I abstractly chose a region in North America along the Canada/U.S. border to take a peek at municipalities where smaller but equally prevalent government bureaucracies were a key factor in the local economies.

My region of choice was northern New England and the province of Quebec, which borders my three states of focus: Vermont, New Hampshire and Maine.

It was interesting to throw the province of Quebec's capital city, Quebec City, into the mix because of the four locations it is really the only one of significant size with a population of almost 500,000 (the metro population is more than 700,000).

In comparison, the three northern New England capital cities are tiny. The largest is Concord, N.H., at 43,000 people, and then we get to two of this country's smallest capital burghs: Augusta, Maine, at 19,000 people; and Montpelier, Vt., at 7,800.

While the three U.S. capital cities experienced minor economic tremors from the global recession, Quebec City probably did as well, if not better, than most major metropolitan areas in North America. Of course, these are all older cities where the local housing markets saw modest gains during the boom times and didn't really expect too much disappointment in the bust.

As a provincial capital city, Quebec City is extremely dependent on its government bureaucracy, which accounts for 30 percent of jobs. Toss in a big, still-expanding insurance industry presence and that's about 50 percent of all jobs.

There is also a growing manufacturing sector. Earlier this year, Quebec City boasted the lowest unemployment rate in Canada, at below 4 percent.

After extrapolating that cursory employment information, you might hazard a guess that the housing market in Quebec City rests on very stable ground. And you would be right.

"The market is strong today, and prices continue to rise," reported Jeannette Casavant, an independent real estate agent in the city.

However, the one sign of weakness in the market is that it is taking longer to sell a house today. "Before, if a house was on sale you would immediately have three offers at the same time. Now, it sells within 60 days. There are still a lot of buyers out there," said Casavant.

Going back a decade, Canada suffered an economic slowdown and housing prices weakened across the country, including in Quebec City. So back in 2002, if you were lucky you might have a found a two-bedroom condominium in a great Old Town location for $200,000. Today, if it went on the market it would sell for $500,000.

"Prices have appreciated quite a bit lately and that means we have gained back what we lost 10 years ago," Casavant said. "Prices will continue to rise."

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Vancouver Real Estate Market Report

 

In 2008, the unemployment rate in New Hampshire was a mere 4.3 percent. A year later, unemployment spiked upward to 7.2 percent, the state's highest rate in 17 years.

That wasn't felt too severely in Merrimack County, where the capital city of Concord can be found.

"It always seems as if the state has a lot of job openings," said Karen Hatch, regional development manager for The Bean Group in Bedford, N.H.

"If you are looking for employment, go to the state site -- there are always listings for jobs," she said. "I haven't heard the state was laying off; it seems as if we are not at capacity for jobs."

As for the housing market in Merrimack, the downturn has been very mild.

"In 2009, the average selling price in Merrimack County was $206,000; it was $201,066 in 2010," Hatch reported. "As for the average amount on time on market before a house sells, it's averaging 146 days this year, about the same as the year before."

Things are looking even better in Kennebec County, Maine, home to the capital city of Augusta and a population base of 117,000 folks.

The median sale price of a home from January 2010 to July 2010 was up 2 percent over the same period the year before, noted Anne-Marie Haywood, regional development manager for The Bean Group, in Portsmouth, N.H.

"The number of units sold from January 2010 to July 2010 hit 560 -- that's up from 507 units, again for the same period of time in 2009."

Both the private and public sectors cut jobs in Kennebec County, said Haywood. She suspects the salubrious numbers in the first part of 2010 had something to do with the tax incentive. It will take a few more months, post-ending of the tax credits, to see if the local market has indeed held strong.

One troubling sign for Kennebec County and the surrounding region: After government, the biggest industry is tourism, and visitation numbers are down.

The one regional capital city where the housing market noticeably softened was Montpelier, Vt., which is the smallest capital city in the country. The shire is located in Washington County, home to 58,000 very independent citizens.

"Our major industries are government, government-associated industries and insurance," said Tim Heney, a principal with Heney Realtors in Montpelier. All that couldn't bolster the housing market.

Average home prices peaked in 2006 at $242,600 and then fell to $188,100 in 2009. Back in 2006, homes sold briskly with an average time on market of about 40 days. Today, it takes 120 to 140 days to sell a home.

The numbers look worse than they are, said Heney, because what has been selling has been lower-end homes.

"Montpelier is very stable," he stressed. "People are buying homes -- there are just not as many buyers as we would like."

More than 200 years ago, the English kicked the French out of North America. Today, the economy in the former colony of New France outpaces neighboring New England. Revenge is sweet, even if it is a bit late.

Steve Bergsman is a freelance writer in Arizona and author of several books. His latest book, "After the Fall: Opportunities and Strategies for Real Estate Investing in the Coming Decade," has been ranked as a top-selling real estate investment book for the Amazon Kindle e-reader.

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Vancouver Real Estate Market Report

 

Cashing in on capital city real estate Investment qualities that make these areas good buys By Steve Bergsman Aug. 20, 2010

(The Parliament House in Ottawa, Canada. Flickr image courtesy of spettacolopuro.)

Anyone lucky enough to be living in or near the national capitals in the U.S. or Canada over the last four years lived through something few other homeowners in those countries experienced: home-price stability.

Sure, in certain sections of city metros surrounding national capitals, home values softened, but for the most part homeowners saw little price deflation. That's because capital cities boast a very stable workforce of government bureaucrats and a panoply of private-sector consultants, lobbyists and contractors that feed the federal bureaucracies.

In addition, in recent years, a number of companies have shifted major closer to their government paymasters.

"The largest m

operations to capital city areas just to be

ovement of people occurs with the shadow government, which relates to government contractors,"

umman, Hilton and Volkswagen International have moved headquarters or key operations to the

ons of dollar in contracts, and they

cause in early summer I had the opportunity to

e places -- usually it's Vancouver, Toronto or Old

re strongly among Canadians, .

would choose their home city, which mixes

cities. In Ottawa, six of 10

politicians rent. In Washington, D.C., the Republicans of the Bush administration were buyers of homes, but the Democrats arriving with the Obama administration have been renters.

said Pauline Thompson, president and founder of Tysons Realty Inc., in the Washington, D.C., suburb of Tyson's Corner, Va.

"Northrop GrD.C. area. And there are so many computer companies coming here because they are getting huge contracts. Thecomputer firms are looking to hire thousands of employees."

She added, "We are still in a war so military contractors are being awarded billibring in 200 to 400 subcontractors. They all need a place to live."

The salubrious capital city home markets occupied my attention bevisit Ottawa, Canada's lovely, but often overlooked, capital.

Americans who travel often to Canada end up having favoritQuebec. Those with a yearning for the great outdoors go to the Canadian Rockies.

No one ever chooses Ottawa, the country's capital. It's a prejudice probably felt mothemselves. In the U.S., almost all Americans will at some point in their lives make the hegira to Washington, D.CCanadians fly over Ottawa on their way to somewhere else.

However, ask Ottawans where they prefer to live, and nine out of 10cultured urbanity with an accessibility to the great outdoors. It also has good politics.

The Ottawa housing market resembles, but not too closely, that of Washington, D.C.

The global recession also hit Canada, but Ottawa suffered less than other big Canadianworkers are employed by the federal government, education (four universities) and health care.

Changes in administrations generally cause minor housing-market tremors. In Ottawa, incoming

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Vancouver Real Estate Market Report

 

The population of District of Columbia proper stands at about 600,000, with the metro area at 5.3 million. The population of Ottawa city now totals 900,000, but the metro is much smaller than D.C. at 1.4 million.

The average cost of a home in the Washington, D.C., metro is around $500,000, Thompson said. In Ottawa, the

t

s "a challenge."

oes the prime minister and the governor general," Rhodes

tly sold for $8 million."

owner was in high tech, as is the new owner.

are d

id, as

the

nd he lit up.

r, me.

-end neighborhood on the west side of Ottawa.

ance writer in Arizona and author of several books. His latest book, "After the Fall:

average home is $333,000, reported Chris Rhodes of Coldwell Banker Rhodes in that city.

Although, Rhodes adds, the "average" home price is misleading. Unlike Washington, D.C., Ottawa is nosurrounded by vast suburbs but by a large rural area where homes are much cheaper. The city of Ottawa boasts agood population density and, as Rhodes points out, finding a home in the $333,000 range i

At the high end, homes are still cheaper in Ottawa.

The most prominent high-end neighborhood in Ottawa is called Rockcliffe Park, which can be found about two miles from the center of the city.

"The leader of the opposition has a house here, as dsaid. "It's a very pretty area and not a lot of homes under $1 million. Many homes fall into the $3 million to $4 million range, although one recen

That home had some history, as Princess Juliana of The Netherlands lived there during World War II. Recent owners acquired the neighboring property, so the grounds now total more than an acre, part of which sits on a small lake. No politicians were involved in this purchase. The past

"Rockcliffe now represents just one-third of the high-end transactions in the city, as million-dollar home sales occurring in different areas," Rhodes said. "The other sales have occurred along the waterfront of the Ottawa anRideau rivers and in a nice (actually, one of the hippest core city locations) neighborhood called The Glebe."

Ottawa's original condo market began developing back in the 1970s and then fizzled out until around 2000, when another huge spurt of construction created mid-rise condo developments in or near the downtown. Although some high-end condo sales have been near the seven-figure mark, this is a market that is unstable, Rhodes saabout 50 percent of recent sales have been to investors, not end-users.

Of course, both the Washington, D.C., and Ottawa metros have lower-end neighborhoods. Ottawa was built onbanks of the Ottawa River and once you cross the bridge to the other side, you enter French-speaking Quebec, where the population is generally poorer.

In the D.C. area, Thompson reported many foreclosures in markets like Woodbridge, Manassas and Sterling in Virginia, and Gaithersburg in Maryland, where there was a higher proportion of subprime loans.

I asked Rhodes how he, personally, was doing, a

Back in 2005, he sold 25 homes. In 2009, which was a low point for U.S. home sales, he sold 35 homes. This yeahe thinks he will hit the same high-water mark. Last year, his high-priced deal was a $950,000 ho

This year, he has a listing on a $975,000 property in another higherBy the time you read this column, that home could already be sold, as homes are selling briskly, often turning over within 40 days of listing.

"We have been blessed," said Rhodes. "We have a low unemployment rate here; prices have been climbing steadily; and from a Canadian standpoint, we are reasonably priced."

Steve Bergsman is a freelOpportunities and Strategies for Real Estate Investing in the Coming Decade," has been ranked as a top-sellreal estate investment book for the Amazon Kindle e-reader.

ing

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Vancouver Real Estate Market Report

 

Westmount: Canada's Beverly Hills? Montreal borough has celebs, multimillion-dollar homes By Steve Bergsman April 14, 2011

(Homes in Westmount, a Montreal borough. Flickr image courtesy of Peter Blanchard.)

This past winter, my wife and I were taking a tour of Montreal when our guide mentioned that Westmount, the area of the city we had just passed, was probably the only place in Canada where homes hadn't lost value during the global recession of the past four years.

My attention, which had been waning, suddenly perked up and I asked the guide to give my wife and me a quick swing through the area.

My guide, a lovely, informative Montreal native, Annique Dufour, was absolutely right on about all things Montreal -- except for Westmount homes not losing value -- but she is forgiven since Westmount's recession barely lasted 12 months and the homes lost value in the single digits, at most.

Westmount, which is really a borough of Montreal, experienced a drop in prices of 5 percent from 2009-10, notes Marie-Yvonne Paint, a broker

with Royal LePage Heritage in Montreal. "2009 was the year of the global economic crisis, and people stopped buying because they were waiting to see what would happen. They were holding back, but by 2010 Canada's and Montreal's economy appeared to be fine and everyone came back to the market."

The years 2002-09 were excellent years for Westmount, and 2009 weakened only because of the economic crisis, Paint adds. "By 2010, sales were flying. There was such a demand for Westmount homes that the number of homes sold in 2010 increased by more than 17 percent."

Paint, who specializes in high-end properties, does about 80 percent of her business in Westmount because "this is where we have the most expensive homes."

In 2010, Paint boasted an extraordinary year, personally selling over $100 million in properties. She's hoping the market stays hot, hot, hot through 2011, although realistically she doesn't think it can maintain that kind of momentum.

Westmount begins (or ends, depending on your perspective) near the crest of Mount Royal, the iconic mountain park at the center of Montreal. Most of the expensive homes, with values in the multimillion-dollar range, are close to the higher elevations because of the extraordinary views of the St. Lawrence River in the distance.

As the neighborhood eases into the flatlands, it becomes more urban looking and instead of large single-family dwellings there are more duplexes, triplexes, condos and apartments.

Dufour's parents lived closer to the heart of Westmount, while she and her daughter lived in an apartment building where the land eases into the city proper.

The homes attract a lot of attention because of prices, but it's the urban part of Westmount that has been very active lately because properties are cheaper and demand has been strong -- especially from young professionals looking for a more citified experience, i.e., walking distance to shops, services and restaurants.

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Vancouver Real Estate Market Report

 

Westmount has all types of properties, and some of those in the flats, although somewhat standard, have seen very strong prices, observes Thomas Castle, also a Royal LePage broker. He recently sold half a duplex for $250,000.

ge, but they need a lot of and and no garage, Paint says. Also, condominiums in Westmount are selling

"Right now in Westmount, there's a feel g that there should be more product on the market, but what is presently on the market is being looked at and purchased," Castle says. "Real estate prices are the result of the balance

e

een the 1850s and 1930s, most of the English-ve

he in o

e t s .3

n

W unt fetched $3.5 million -- that home has 4,500 square feet, "This home sits on the top of the mountain with an incredible view of the

cing driver Jacques Villeneuve,

nicipality (borough) you pay a little more in taxes, but

ontreal can take upward of two weeks."

Homes closer to the flatlands can still be found in the $600,000 to $700,000 price ranwork, and have little l very well, at about $700 to $800 a square foot.

in

between supply and demand, and in W

During the intense growth years of Montspeaking, wealthy families of the city li

Then, by the turn of the 20th century, ton the west side of Mount Royal. The wan area that is called Outremount. To s

Outremount home prices can challengpriciest neighborhood. Still, Paint's momillion to a couple from Paris.

That house totaled 8,000 square feet ahomes that sold above $2 million, were

The highest-priced home Paint sold in nestled on 11,000 square feet of land. river and the city," she says.

stmount the demand is stronger than the supply."

real's history, betwd closer downtown, in an area called the Golden Square Mile.

e adult children of the wealthy began settling in Westmount, which was althy French-speaking families preferred the east side of Mount Royal,me extent, that language divide still exists today.

hose in Westmount, although on a general level Westmount remains thet expensive deal in 2010 was an Outremount home that sold for $5

d rested on a 20,000-square-foot plot of land. Paint's other big deals, in Westmount.

estmo

Generally, you have good company in Westmount. Former motion picture actress Norma Shearer and singer Leonard Cohen were born in this neighborhood. Today, you can find a smattering of Montreal Canadian hockey players, former Prime Minister Brian Mulroney, Quebec Premier Jean Charest, raand fashion magnate Lawrence Stroll (Michael Kors).

As its own borough, Westmount has a few other desirable advantages, says Dufour.

"My parents moved to Westmount because as its own muthe services are phenomenal," she says. "We get six months of winter, and even in a huge snowfall the streets are plowed within 36 hours, whereas the rest of M

Steve Bergsman is a freelance writer in Arizona and author of several books. His latest book, "After the Fall: Opportunities and Strategies for Real Estate Investing in the Coming Decade," has been ranked as a top-sereal estate in

lling vestment book for the Amazon Kindle e-reader.

20