Fri Post #1: Celebrating the Curling and Women's Hockey Gold @ Vancouver's Olympic Cauldron

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Canada vs USA Women's Olympic Gold Medal Game - Let's go Canada!

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Olympic Gold in Curling, Congrats Ladies!

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Ron Paul launches online petition for clemency for Edward Snowden

Edward Snowden shocked the world when he exposed the NSA’s illegal and abusive spying program. Instead of applauding him for his bravery and patriotism, the U.S. government labels Snowden a traitor.

Former Congressman Ron Paul has launched a petition to attempt to garner clemency for NSA whistleblower Edward Snowden.

Paul calls on supporters to sign the petition in an attempt to bring Snowden home to the US safely before his temporary visa in Russia expires in July. Join Ron Paul in demanding that Edward Snowden IS granted clemency.

By signing this petition, Paul notes on his Channel's website, "you are telling the US government that Mr. Snowden deserves the right to come home without the fear of persecution or imprisonment."

You can sign the petition here.

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Canada Housing Market: Prolonged correction coming

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China's CCTV: Canada's real estate market may be overpriced and could be headed for brutal correction

Hat tip: southseacompany.

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Kelowna's Big White feeling the real estate pain?

Seems Kelowna's Big White ski community is feeling the real estate pain.  A quick search of some online listings show there's red ink galore on the slopes.

Above is 200 Moonshine Crescent, Unit #12. Advertised as an "outstanding value" the listing says:

OUTSTANDING VALUE for Stand Alone Deluxe cabin priced $120,000 less than current owner's original purchase price! Features 1347 sq ft, largest of all the 2 bedroom cabins, 2.5 baths, sleeps six. Nestled amongst the trees of White Forest Estates.

$120,000 loss? Ouch.

There's this 'opportunity' where we are told:

"Developer of the prominent and very successful “SUNDANCE AT BIG WHITE SKI RESORT” says “SELL the REMAINDER of the LAND allowing another Developer to LIVE THE DREAM!”

Hmmm… more like share the loss.

How about this one (click on all images to enlarge):

"JUST REDUCED $140,000" screams the copy and now selling for $259,900? Ouch again.

Other real estate advertisements trumpet that Condos being sold in receiver liquidations are going for 60% off original launch price:

According to this article titled, B.C. ski resorts a “buyer’s market”: Reductions of 50 to 60 per cent from peak may stir flat ski-condo sales, the carnage is everywhere.

A buyer's market will greet potential buyers of ski condominiums at B.C.'s finest winter resorts this winter, with prices off as much as 60 per cent from the peak of four or five seasons ago.

"It's a buyer's market all right," said Bill Hanrahan, a real estate agent with Sun Peaks Real Estate near Kamloops. Real estate prices at the popular ski hill have been declining since 2008, Hanrahan said. As for sales, "We have been bouncing along the bottom for six to eight months."

As an example, he points to a selection of two-bedroom, two-bath Sun Mountain Villas that sold recently for from $230,000 to $247,000, with one recent listing at $195,000. Those prices would have started at $335,000 during the fat years before an international monetary crisis flattened ski-mountain sales. Some Sun Peak hotel-condos, which restrict usage by the owners and normally are pooled into rentals, have sold for as low as $20,000 this year.

At Big White ski resort near Kelowna, the remaining inventory at the super-deluxe Edge development - built in 2009 and now in receivership - has seen prices reduced 60 per cent. An example is a three-bedroom, 2,000-square-foot duplex in the complex that had $399,000 knocked off the property, which is now listed at $599,000. This pencils out to less than $300 per square foot, which would have once been considered a screaming deal for such high-end recreational property.

That price would be welcomed at Red Mountain near Rossland in the Kootenays, said Red's vice-president of sales and marketing Jim Green, who notes that most of the 15 ski condos for sale are listed from $225 per square foot. 

A three-bedroom luxury suite at Red bought in 2004 for $450,000 is now on the market at $275,000. 

Green points to even bigger price discounts: a 1,600-square-foot suite valued at $700,000 is now at $359,000 and has been on the market for at least six months; and ski-in, ski-out townhouses are listed at $270,000, or about half the original price

One local realtor described the general Kelowna market this way:

Although inventory levels dropped, (as many frustrated sellers took their homes off the market due to a lack of success) we still remain at levels that are over 20% higher than the average of the last 13 years. Sales rose due mainly to some sellers finally coming to grips with the prices that the buyers were able to qualify to pay.

But positive enthusiasm is the mantra of this business. Check out the 2014 market outlook from these two who could obviously be up to their armpits in manure and would still keenly enthuse, "Gee, there must be a pony around here." 

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2290 Saxony Court, the latest fake mansion poster child, sells at auction.

On Thursday we told you about 2290 Saxony Court, the latest fake mansion picture poster child, which used photoshopped pictures to create the impression of a sprawling mansion out of an overbuild monstrosity on a cramped lot.

Originally listed at $11 million, this developer's folly languished on the market with price cuts in May 2012 to $8,900,000 and in June 2013 to $7,500,000.

After going belly up, the house was put up for auction and the same misleading photos were used in another campaign where the presstitues allowed themselves to be used to create a the impression of a rocking 50% off deal.  Would overseas buyers step in to engage in a bidding war for a property, sight unseen?

Well today the hammer fell and the final selling price was $6.2 million.

I wonder if famed photos of the non-existant front yard were included?

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TD's Mortgage Clause change creating big stir. Catches mortgage industry by surprise.

A recent story over on Mortgage Broker News is creating a bit of a stir.

It seems TD Bank has quietly changed the fine print on its Variable Rate Mortgage contracts for conventional mortgages – specifically around when a spike in loan to value triggers demand for a lump-sum payment or a new appraisal.

Under the terms of the new clause, if, at any time and for any reason, the loan-to-value on a conventional mortgage exceeds 80 per cent, the bank has the right to direct the borrower to bring it under that 80 per cent threshold or to obtain an appraisal proving the fair market value is indeed higher. The new wording replaces a similar clause that sets that trigger at 75 per cent but limits the scenario to instances where interest rate fluctuations have driven LTV over that 75 per cent mark.

Patrick Mulhern of Invis Mulhern Mortgages, who tried to get an explanation from TD without success, suspects that change is really a hedge against any future price correction for Canadian real estate.

Under the terms of the new clause, if, at any time and for any reason, the loan-to-value on a conventional mortgage exceeds 80 per cent, the bank has the right to direct the borrower to bring it under that 80 per cent threshold or to obtain an appraisal proving the fair market value is indeed higher. The new wording replaces a similar clause that sets that trigger at 75 per cent but limits the scenario to instances where interest rate fluctuations have driven LTV over that 75 per cent mark.

Mulhern believes that new, wider clause speaks to the lender’s concerns about a possible market correction and its power to drive down property values.

“In the new clause, it states that if at any time the principal balance exceeds the max LTV.” he said. “This protects the lender in case of property devaluation."

The amendment took place sometime last year, according to Mulhern, and he was only made aware of it because of an increase in variable rate mortgages he recently arranged.

“Unless I’m reading it incorrectly this type of clause has nothing to do with rate fluctuations and everything to do with loan-to-value,” Mulhern said. “Property value decreases would have a huge impact on all TD variable rate mortgages.”

Garth Turner, who covered the story in a blog post today, noted the impact this change could have:

If, at any time or for any reason, the value of your house drops to a level less than 80% of the amount of mortgage debt, then the bank can demand you write a cheque to cover the difference. If you don’t, your mortgage goes into default. You also have the right to have your property appraised (at your cost) to prove it’s worth at least 80% of the loaned amount, whenever the bank demands such proof.

The old limit was 75%, and the former wording also limited the nightmare scenario to situations in which rising interest rates triggered the action. This time anything – like unemployment triggering a highly local market decline – means you have a problem.

One realtor Turner spoke to had this observation:

“I think it’s preparation in the event of a price melt down and they want a 20 % cushion instead 25% to minimize the bank’s exposure to non CMHC mortgages.”

Garth Turner agreed and said:

"Exactly. The bank is preparing its non-insured portfolio against what might be inevitable, if the Bank of Canada is correct.

It’s only prudent, if you’re the lender. 

It’s a potential hell on wheels, if you’re the borrower."

The clauses are compared side by side. First the old (click image to enlarge): 

and the new:

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Memories of Cam Good?

Faithful readers will recall Cam Good, the former MAC Marketing employee famous for his yellow helicopter escapades, China real estate pandering and local real estate scandals.

Perhaps his most outrageous headline grabbing foray was in April 2011 when Good wrote an Op Ed piece talking about media Hot Asian Money (HAM) flowing into the Village on the Edge of the Rainforest:

Buyers from Mainland China are a driving force in our real estate market. The staggering truth is we’ve seen just the tip of the iceberg… A recent story in the Wall Street Journal reported that Chinese are 'stampeding to Vancouver and Toronto, two of Canada’s hottest markets.' For that, we should be grateful. Chinese have made owning real estate in Canada more rewarding than any of us expected and they have made our society distinctly richer by bringing their values and culture to Canada and sharing them with us.… But instead of gratitude, I see growing fear and resentment that foreign buyers are inflating prices and pricing 'us' and 'our children' out of the market... Let’s look at what this global trend is doing to benefit us: It’s driving demand and creating a real estate industry that is the envy of the entire world. Our land, homes and businesses have become more valuable and Chinese investment is a big reason we weathered the global economic storm as well as we did”

Good wrapped up his Op Ed lecture in true R/E sales fashion with a lecture to locals to get in on the market. Naturally it was the 'buy now or be priced out forever' manta whose moral, of course, was to call Cam and use his real estate sales services.

“If you suffer from real estate impotence, don’t blame Chinese people. Besides, getting all worked up about it will only make it worse. Have a glass of wine. Relax. Stop feeling sorry for yourself and pick up the phone to call a realtor or a mortgage broker, either of whom will be more than happy to show you how easy it can be to get your real estate groove on. Real estate is the best investment you’ll ever make, but don’t take my word for it. Ask any of the 70% of Canadians who are already owners. Or a Chinese person. 

Good had also, supposedly, set an office in China to enhance locals to use his real estate services, but that initiative seems to have whithered on the vine.

Bear blogs marvelled at how Good seemed to use the media and HAM to garner free advertising for his real estate services. But he's been quiet the last year or so.

Enter Macdonald Realty Ltd and Dan Scarrow, Macdonald's 30-year-old vice-president of corporate strategy.

In an article in the Globe and Mail, we learn Scarrow has heard enough anecdotal evidence of well-heeled home buyers with roots in China that he has decided to 'act'.

He wants to capitalize on those buyers by investing in a Shanghai office.

In February, Mr. Scarrow will start the first of two three-month assignments in 2014 in Shanghai. After his fact-finding mission, he plans to hire Mandarin-speaking staff in China to keep the overseas branch office going.

Umm… if you already plan to hire staff in China to keep the office going, why bother with two "fact finding" assignments?

But we digress. Sparrow is determined to disprove claims that there isn't large amounts of HAM out there:

While real estate experts have estimated the proportion of foreign buyers in the Vancouver region’s housing market at only 1 to 3 per cent, Mr. Scarrow said if the statistics were to include recent immigrants with origins in China, the influence of rich Chinese buyers would be greater, especially on single-family detached homes in pockets of Vancouver’s West Side.

Most high-end transactions occur on Vancouver’s West Side and the Municipality of West Vancouver. In the luxury market, there were 644 properties that sold for $3-million or higher in the Vancouver area last year, up 47 per cent from 439 homes that traded hands in 2012, according to data compiled by Macdonald Realty. Of homes that sold last year, there were 148 that fetched at least $5-million, compared with 107 sales in that category in 2012.

Mr. Scarrow said it is hard to determine how many of those elite sales went to recent immigrants from China, noting that the ripple effect due to an influx of new money can easily be exaggerated. Still, he believes the proportion was significantly higher than 3 per cent last year.

“There isn’t this wave of offshore investors with no ties to Canada who are coming in to buy, but the genesis of their wealth is from mainland China,” said Mr. Scarrow, a Canadian who speaks Mandarin fluently. “Most of these people land in Canada first as investor-class immigrants.”

He dismisses tales circulating of wealthy offshore buyers snapping up Vancouver properties sight unseen as false, emphasizing that he will instead seek to nurture a market in which China-Canada family ties are crucial.

The 30-year-old Mr. Scarrow said that as a product of a mixed-race marriage, he is acutely aware that the issue of foreign shoppers is a sensitive one in British Columbia. “The perception among some sellers is that mainland Chinese money is driving the luxury real estate market here,” he said.

Of course, just like with Cam Good, Sparrow offers the the real hook. After all, one of the keys for real estate sales is securing listings:

Scarrow cautions homeowners against hiring real estate agents based only on ethnicity, stressing that the best representatives know Vancouver’s neighbourhoods well, no matter what their race. Scarrow said there will be opportunities to tap into the Chinese market during his stay in Shanghai. Besides seeking contacts who are interested in single-family residential properties, he will be on the lookout for investors in Vancouver’s commercial real estate market and also new condo projects.

In other words, you want to list with Sparrow, lol.

Once again, it looks like a major newspaper's article is nothing more than a giant, free ad for a real estate agent trying to drum up business.

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January Real Estate Report for Richmond from James Wong

Upfront and frank Richmond real estate agent James Wong is out with his January report:

Home sales in Richmond for December, 2013 totaled 249 units were 14% lower than previous month’s sales of 288 homes.

Seasonally, housing activities were winding down due to poor weather conditions and many home buyers putting off their house hunting activities until after the new year. The drop in active listing from 2,045 to 1,700 units represented a 17% drop in total active listings compared to the month before. When compared to active listings the same time last year, current active listings were 13% lower.  

The supply of homes for sale in Richmond as measured by months of inventory (MOI) dropped from 6.25 to 5.20 could be a short temporarily year end display. More listings are expected to hit the market in the coming weeks in January and February. 

The MOIs for the three housing types, all improved due to significant drop in active listings for detached homes, townhouses and condos. Home sellers are more positive now that the supply of homes had tightened, and home prices overall appeared to be holding their ground. Compared to a year ago, total Richmond home sales in December at 249 units were 48% higher than the 138 units posted a year ago. 

Richmond housing market outlook 

Home sales in Richmond for January is expected to remain subdued, with slight increase in sales for February. The lack of sufficient inventory and new listings will tamper buying activities until later part of February when more listings are expected to show up. Well priced properties are expected to be well received and sell readily. 

Although home sellers of million dollar homes are under pressure to drop their prices, many sellers are holding on to their asking prices hoping to cash out at prices meeting their price expectation. Sellers were turning down offers falling short of sellers’ prices. 

The current statistics for Richmond detached homes are:

• Single family detached homes listed for sale - 642 homes 

• 446 (71%) of these homes are over $1,000,000. 

• The average past 3 months sales for homes over $1.0 million was 52 homes. 

• MOI for detached homes over $1,000,000 is 8.58 months of supply. 

• Total single family detached homes for sale over $1,500,000 - 260. 

• The average 3 months sales - 21 units with 12.38 months of supply.

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Thurs Post #2: Lower Mainland Real estate developer starts accepting Bitcoin

Abbotsford developer Quantum Properties says they are accepting Bitcoin for a deposit on any of their residential developments.

The company is currently marketing more than 400 condos in Abbotsford and Port Coquitlam.

President and CEO of Quantum Properties Diane Delves says she has been following the digital currency for a while and thinks it is the way of the future.

“I was fascinated by the concept. We have been looking at it for a while. Finally as of today, we made it official that we are going to accept Bitcoin.”

Delves says they have yet to see what the buying public thinks of it.

“We wanted to offer it as an option. It was sort of like –let’s throw it out there and see."

Delves says as far as she is aware, no other developer is accepting Bitcoin.

The average value of a condo that Quantum Properties is marketing is $250,000, and the deposit is usually within a 10 per cent range.

Delves says she is aware of just how volatile Bitcoin can be, but it is not a big concern for them.

“We might win some, we might lose some. We will convert it to currency and if we suffer a loss, we will count it as a marketing cost.”

Source: Global BC

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Thurs Post #1: 2290 Saxony Court: the latest fake mansion picture poster child

Yesterday we highlighted the barrage of news stories promoting the upcoming auction of 2290 Saxony Court in Mississauga, Ontario.

Languishing on the market since it was constructed, the builder has turned to an auction to hawk the home that originally carried an $11 million price tag.

As part of the hype, in which Richie Brothers outwardly admit they hope a lower price will trigger a bidding war, the $5.5 million opening bid is promoted as half price.

Our interest in the property was piqued when a reader in this online Windsor newspaper story noted something was amiss. 

The comment says, "the front of the property has been Photoshoped; the sidewalk and curb are where the pillars and fence are. There is no more setback to this monstrosity than there is to a bungalow on Bloor. I hope no one is bidding online based on those pictures. Unless there is a disclaimer along with the description and photos of this place it constitutes fraud."

Really?

The main nighttime entrance photo above is featured prominently in photo gallery for the house. As is this daytime photo:

There's also this 3D rendering of the overall property:

Look at the wide, sweeping driveway.  Look at that lush, huge front yard.

Wow.

The builder, Ambassador Fine Custom Homes, has a masthead on their website that proudly proclaims: "Building Trust."

When you see the interior pictures, images of caviar wishes and champagne dreams abound.

All of which is surely designed to catch the eye of intending international buyer (a Ritchie Bros spokesman outwardly admit their market here is beyond the Mississauga area - probably overseas).

But take a closer look at this 'house' via google street view. Because when you do, Ambassador's slogan of 'building trust' suddenly takes a vicious beating:

As you can see 2290 Saxony Court isn't some wide open country estate, it's a large house squeezed into an end-of-cul-de-sac residential property (click on all images to enlarge).

Umm… what the hell happened to the sprawling front yard? Back to the 3D rendering, check out the sweeping driveway and the way it wraps around the side of the house.  Look at all the space…

Err…. what space?

(Isn't the google image of the garbage bag plunked next the encroaching neighbour's driveway priceless?)

Now let's take a look a real aerial view and compare it to the 3d rendering:

vs

Do you get a sense of how compact the property is from any of the pictures in these photos?

What about in the pictures from the Toronto Star spread?

Not only do the news stories fail to give us any perspective on the real layout of the actual property, none make note that in May 2012 this house was listed at $8,900,000. Nor do they tell us that in June of 2013 the house was pimped for only $7,500,000.

So why is the inflated $11 million figure prominently bantered about?

To say these photos bear a passing resemblance to the reality of the property is beyond generous. And if the builder is wiling to mislead buyers with photoshopped promotional exterior pictures, you have to wonder what other surprises await on the inside.

Yet our gullible media, rather than expose the false pictures for what they are, simply regurgitate the press release and provide free advertising for a builder who seems to do everything but 'build trust'.

Sigh.

Of course why would we expect mainstream newspapers like the Vancouver Sun or the Toronto Star to ferret out truth and protect the public interest?

It's not like they have had to rationalize publishing fake mansion pictures before, right?

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