Wednesday, December 14, 2011

Residential Housing Ready to Awaken?

CNBC – Fri, Dec 9, 2011 1:06 PM EST

After half a decade of withering sales and slumping prices, there are strong and diverse signs that the single-family housing market is poised for a rebound.
In some metropolitan areas, the market has bottomed, with both sales and prices on the rise and foreclosures on the decline.
This contrarian - and largely overlooked - thesis flies in the face of the persistent gloom that has nagged the industry since 2007, when the subprime crisis flared.
Industry analysts and players cite a number of reasons - some traditional (employment), others unique to the post-credit bubble era (foreclosures) - for the long-awaited sea change. An analysis of industry and government data also support the forecast.
"It has become increasingly apparent to us that the pieces for a housing rebound next year are beginning to fall into place," declared Barclays Capital analyst Stephen Kim in a recent note to investors.
Proponents admit that the nascent rebound could easily be derailed, but stress that after years of government efforts to support sales and prices as well as the volatile impact of foreclosures, the market has regained a measure of normalcy.
"With the exception of really hard-hit markets, the vast majority is ready to turn around," adds Jerry Howard, president and CEO of the National Association of Home Builders, NAHB. "The Washington, D.C., area is not only ripe for recovery, they need to start building units."
The iShares Dow Jones US Home Construction Index Fund (NYSE), for example, is up some 38 percent, while the S&P 500 is up about 21 percent.
Nevertheless, skeptics overwhelmingly outnumber the optimists, given the false-starts of previous years, the economy's sub-par performance, a new wave of distressed properties and the capacity for the European debt crisis to spook business, consumers and investors.
"I think it's premature," says Richard Smith, CEO of Realogy, the nation's largest real estate company, whose brands include Century 21, Coldwell Banker and Sotheby's International. "We see little indications here and there. Transaction volume is improving. Prices are still under pressure. This isn't going to be one of those spiked robust recoveries."
Smith is echoing the conventional industry calculus: that price increases follow sales growth amid consistently strengthening demand.
There's been little conventional, however, about this housing slump, which is one reason it's had so many false bottoms. Among its many firsts - housing starts fell through 1 million annual units, foreclosures topped 2 million in three consecutive years, and home prices declined on a national basis.
The catalysts to recovery are mostly the same: for potential buyers, residential rents have now risen enough to consider buying; existing-home inventory is the lowest in five years, while that of new homes is at a 40-year low; affordability is at a record high; delinquencies have peaked; consumer confidence is on the rise ; and job growth is accelerating.
For investors, with a continuation of the gold rally in question, real estate is beginning to look like a viable inflation hedge alternative, while rising rents mean greater profits.
That thinking may help explain why the iShares Dow Jones US Home Construction Index Fund (NYSE), a broad barometer for the housing market, is up some 38 percent from the stock market's October bottom, while the S&P 500 is up about 21 percent.
Finally, there's the intangible fatigue with bad news, and a desire to end the negative feedback loop.
"We believe there is sizable housing demand that could be released into the market," says Lawrence Yun, chief economist of the National Association of Realtors, NAR.
The NAR is forecasting existing home sales will rise 5 percent in both 2012 and 2013; prices will edge up 2 percent in each of those two years, then 4 percent in 2014.
The NAHB is forecasting a 5.1-percent increase in new home sales and a 10-percent increase for new home starts in 2012.
Jobs, Jobs, Jobs
A turnaround in the housing market will require continued improvement in the job market.
The economy has created jobs 13 months in a row for a total of almost 1.9 million. Weekly jobless claims have been routinely below the key level of 400,000, and the national jobless rate is down to 8.6 percent.
There are already signs in some markets that an improving employment picture is boosting housing demand and sale prices.
In cities such as Tampa, Fla., South Bend, Ind., Grand Rapids, Mich., Raleigh, N.C., Wichita, Kan., and Green Bay, Wis.., the median sales price of an existing single family home increased 1-2 percent in the third quarter, during which time the jobless rate and/or payrolls growth improved dramatically.
Even in the Cape Coral-Fort Myers, Fla. metropolitan area - considered the epicenter of the foreclosure crisis a few years ago - prices were just 1.4 percent lower in the third quarter than the previous year.
A new index by the NAHB and First American, the Improving Markets Index, IMI, launched in September, tracks housing markets throughout the country that are showing signs of improving economic health. Thirty cities - including San Jose, Pittsburgh, New Orleans and Winston-Salem, N.C. - are showing growth in permits, sales and employment.
In San Diego - where in the last year the jobless rate has fallen from 10.4 percent to 9.7 percent and 24,000 jobs have been added - home inventory is down to two months; in some areas of San Francisco (9.4 vs. 10.3 percent), it is one month.
More broadly, 40 percent of all states showed existing home sale increases on both a quarterly and annual basis in the third quarter, according to National Association of Realtors data. That includes high foreclosure-rate states, such as California, Georgia, Michigan and Utah. All but six states showed double-digit gains year over year.
Location, Location, Location
There's even a strong case to be made that the foreclosure crisis is easing.
"The pipeline of distressed property is plentiful but less than last year," when foreclosure activity hit a record 2.18 million, says Yun.
For the first nine months of 2011, foreclosure activity is down sharply from the same period last year (26.59 percent), whether it is the worst-off states - (Florida, 54.98 percent; California, 31.51 percent; Utah, 27.41 percent) - or better-off ones (New York, 46.57 percent; Mississippi, 33.25 percent; South Dakota, 26.59 percent), according to RealtyTrac, which tracks the data.
Third-quarter foreclosures (610,337) were up 1 percent from the previous quarter but down 34 percent from the year-ago period.
The wild card right now is an impending wave of new foreclosed properties on the market, following the removal of state moratoria and the settlement of state and federal lawsuits with lenders and loan servicers.
It's unclear how many properties will hit the market, but conservative estimates put the number at over a million.
Still, of the top 20 markets in the new wave, nine are in California, five in Florida and two in Ohio, according RealtyTrac, so the impact will be fairly concentrated.
Another question is whether that wave will be a tsunami or merely a breaker. If the market is in fact recovering, why would banks want to weaken it again by deluging it with cheap properties.
"You could see them trying to gauge the market like speculators," answers Howard.
Kim of Barclays is among those who say the threat is exaggerated, perhaps misunderstood. He estimates that 40 percent of the foreclosed properties haven't had a payment made on them in two years, which means they are in poor condition and thus unattractive to many buyers.
"The deterioration has been great," he says. "It flies in the face of all the bearish arguments."
Kim's thesis is that there are now two kinds of buyers in the market; those who'll take a chance on a bargain-priced, distressed property and those who'll only make a conventional transaction. He says it helps explain why the Core Logic data he used for his latest report shows non-distressed prices flat or slightly higher in the past year.
"Even if the banks decide to move their inventory more aggressively, and I suspect they will, it's OK because the buyer is making a distinction," explains Kim.
"There's a ready appetite for it," adds Smith of Realogy, who agrees that there's substantial pent-up demand for housing in general but also great uncertainty. "If you can relieve consumers of some of that uncertainty, then I can see a nice little recovery."
That's the psychological dimension of the wild card - the negative feedback loop that has plagued housing.
Optimists say most of the uncertainty and fear is gone.
"The major driver of negative sentiment was that prices were going down across the market by large amounts," says Kim of Barclays. "Buyers need to see a stabilization."
A contributing element to that is the unwinding of government intervention - whether to artificially spur demand - as was the case with the first-time buyer tax incentive program of 2009 and 2010 - and/or to retard and prevent foreclosures.
Many regard those efforts as largely ineffective, if not counter-productive because they delayed the inevitable - a deep descent to a market bottom, which has finally been touched.
"The numbers you're looking at you can trust," says Kim. "There are no exogenous factors."
Though tight lending conditions and forthcoming regulations of the Dodd-Frank legislation are still an issue for some, sweeping housing finance reform is off the agenda for at least the next year.
"You're back to the natural forces of the market," says Howard of the builders association.

Déjà Vu in November Housing Market

The British Columbia Real Estate Association (BCREA) reports that Multiple Listing Service® (MLS®) residential unit sales in the province remained relatively unchanged in November compared to the same month last year. A total of 5,640 units were sold last month compared to 5,647 units in November 2010. The average MLS® residential price was up 1.1 per cent to $529,140 in November compared to the same month last year.

"BC home sales continued to gain ground in November,” said Cameron Muir, BCREA Chief Economist. “After waning during the first half of the year, consumer demand has steadily increased since the summer months, bringing home sales within seven units of the November 2010 level."

"Low mortgage interest rates remain a key driver in the housing market, helping to maintain affordability and purchasing power,” added Muir.

Year-to-date, BC residential sales dollar volume increased 15.5 per cent to $41 billion, compared to the same period last year. Residential unit sales increased 3.2 per cent to 72,632 units, while the average MLS® residential price rose 11.9 per cent to $563,991 over the same period.

Copyright BCREA reprinted with permission

Tuesday, November 29, 2011

BC Commercial Leading Indicator Moves Higher

The BCREA Commercial Leading Indicator (CLI) increased 1.1 points to 109.8 in the third quarter of 2011, reversing the downward trend observed in the first half of the year. The trend in the CLI, a more reliable indicator of future activity, points to a flattening out of commercial real estate activity over the following two to four quarters.

The strong rebound in the CLI in the third quarter was driven largely by strong manufacturing activity and job growth. Given the heightened risk environment in financial markets, the CLI's financial component (composed of risk-spreads and REIT index returns) made a negative, albeit small, contribution to the index for the first time since the fourth quarter of 2008.

The CLI peaked at a level of 116.1 in the second quarter of 2007 before the onset of the financial crisis pushed it to 98.1 in the first half of 2009. The CLI has since recovered 95 per cent of its previous peak level.

"A strong rebound in the BC manufacturing sector lead the CLI higher last quarter," said Brendon Ogmundson, BCREA Economist. "However, rising tension in financial markets and slowing global economic growth may create significant headwinds in coming months."

Copyright BCREA reprinted with permission

Tuesday, November 15, 2011

Home Sales Climb Higher Outside Vancouver

Vancouver, BC – November 15, 2011. The British Columbia Real Estate Association (BCREA) reports that Multiple Listing Service® (MLS®) residential unit sales in the province rose 6.5 per cent to 5,865 units in October compared to the same month last year. The average MLS® residential price was up 2.6 per cent to $535,695 last month compared to October 2010.

"BC home sales rose three per cent in October compared to September on a seasonally adjusted basis," said Cameron Muir, BCREA Chief Economist. "While consumer demand in Vancouver edged lower last month on a year-overyear basis, strong increases were recorded in the Fraser Valley, Kamloops, Kootenay, the North and on Vancouver Island."

"Total active residential listings in the province declined by 3,360 units in October from September. However, active listings were up 6.9 per cent from October 2011," added Muir. "Market conditions remained slightly in favour of home buyers last month."

Year-to-date, BC residential sales dollar volume increased 16.8 per cent to $38 billion, compared to the same period last year. Residential unit sales increased 3.5 per cent to 66,922 units, while the average MLS® residential price rose 12.9 per cent to $566,925 over the same period.

Monday, November 14, 2011

BCREA Housing Market Update (October 2011)

Housing Forecast Points to Market Stability in 2012

BCREA 2011 Fourth Quarter Housing Forecast  
BC Multiple Listing Service® (MLS®) residential sales are forecast to rise 3.2 per cent from 74,640 units in 2010 to 77,000 units this year, increasing a further 3.9 per cent to 80,000 units in 2012.

“Low mortgage interest rates are expected to persist through 2012 keeping affordability on an even keel,” said Cameron Muir, BCREA Chief Economist. “However, headwinds on the economic front will constrain consumer demand over the next year to below the ten-year average of 87,600 units.” A record 106,300 MLS® residential sales were recorded in 2005.

“Moderate consumer demand combined with larger inventories of homes for sale means BC housing markets will experience little upward pressure on home prices through 2012,” added Muir. The average MLS® residential price in the province is estimated to rise 11.8 per cent to $564,600 this year, and is forecast to decline 2.5 per cent to $550,500 in 2012.
Copyright BCREA: reprinted with permission.

Wednesday, November 2, 2011

Exploring Eclectic Nelson, BC. Tourism British Columbia "Field Reporter Mike" Project

One of a five segment series shot in the Kootenay Rockies region of BC for Tourism British Columbia.
These 5 segments were shot in standard definition on a small consumer camera. The 'Tourism BC Field Reporter Mike' project is an ongoing series developed for Tourism British.

Tuesday, October 25, 2011

Bank of Canada Interest Rate Announcement - October 25, 2011

As was universally anticipated, the Bank of Canada opted to hold its target overnight rate at 1 per cent this morning.  Ongoing uncertainty in the Euro-zone continues to weigh heavily on the Bank's outlook. In its statement accompanying the interest rate decision, it was noted that the bank is now projecting a contained Euro-crisis, but also a brief recession in the Euro-area due to ongoing deleveraging and fiscal austerity. The Bank also expects continued weakness, but no recession, in the United States through the first half of 2012 before a resumption of stronger growth. Given various challenges in the global economy, the Bank of Canada trimmed its outlook for Canadian economic growth to 2.1 per cent in 2011, 1.9 per cent in 2012 and 2.9 per cent in 2013 which is in line with our own forecast. On inflation, the Bank now expects slack in the economy to persist longer than originally forecast, leading to a closing of the output gap at the end of 2013. This implies softer than expected inflation in coming quarters, with consumer price growth moderating before returning to the Bank's 2 per cent target by the end of 2013.

Overall, this morning's statement shows a very cautious Bank of Canada that is unlikely to make any significant movements on interest rates over the next two to three quarters. Further monetary tightening will be highly contingent on a brighter growth outlook in the United States and a credible solution to the Euro sovereign debt crisis. Therefore we expect the Bank of Canada to remain on the sidelines through the end of 2011 and the first half of 2012. 

Copyright BCREA reprinted with permission

Tuesday, October 18, 2011

Canadian home sales pick up in September

According to statistics released today by The Canadian Real Estate Association (CREA), national resale housing activity picked up in September 2011.

Sales activity rose 2.7 per cent in September from the previous month.
  • Holding in line with the ten-year average, activity during the first nine months of this year pulled ahead of sales over the same period last year.
  • The number of newly listed homes held steady when compared to the previous month.
  • The national housing market tightened in September from the month before, but remains firmly entrenched in balanced territory.
  • The national average price posted the smallest year-over-year increase since January.
National sales activity rose 2.7 per cent in September when compared to August, and follows three months of stable activity. September’s increase reflects strengthened activity in a number of major markets, led by Toronto. The monthly increase pushed national sales to its highest level since recently tightened mortgage regulations dampened sales earlier this year.

Actual (not seasonally adjusted) national sales activity came in 11 per cent above levels in September 2010. As was the case over the summer, the year-over-year increase reflects weakened activity one year ago.
A total of 361,749 homes have traded hands via Canadian MLS® Systems to date this year. This is 1.2 per cent above levels for the same period in 2010, and in line with the ten-year average.

“The Canadian housing market remains a bright spot against a backdrop of mixed headline news about the global economy,” said Gary Morse, CREA President. “Low mortgage rates continue to draw buyers to the housing market, while recently tightened mortgage regulations are working as intended. That said, housing market trends often diverge from national trends due to local factors, so buyers and sellers should talk to a local REALTOR® to understand housing market trends at play where they live.”
The number of newly listed homes nationally was little changed from each of the previous two months. New listings were up from the previous month in a number of major markets including Toronto, Montreal, Ottawa, Oakville and Vancouver, offset by fewer new listings in other markets including Edmonton and the Fraser Valley.

The monthly rise in sales resulted in a tighter national housing market that remains firmly planted in balanced territory. The national sales-to-new listings ratio, a measure of market balance, stood at 52.8 per cent in September, up from 51.6 per cent in August.
Based on a sales-to-new listings ratio of between 40 to 60 percent, nearly two-thirds of all local markets in Canada were in balanced market territory in September, with an even split of buyer’s and seller’s markets among the remainder.

The number of months of inventory stood at 6.1 months at the end of September on a national basis, little changed from the end of August (6.2 months). It represents the number of months it would take to sell current inventories at the current rate of sales activity, and is another measure of balance between housing supply and demand. Months of inventory have held steady at about six months since April.
The actual (not seasonally adjusted) national average price for homes sold in September 2011 stood at just under $352,600, remaining below record level heights reached earlier this year. While up 6.5 per cent from September 2010, the year-over-year increase is the smallest since January.

“Canada’s housing market remains stable amid continuing financial market volatility, contributing to Canadians’ confidence in the economy and providing support for Canadian economic growth,” said Gregory Klump, CREA’s Chief Economist. “Interest rates are expected to remain low for longer, and evidence suggests that recent changes to mortgage regulations are preventing the kind of excesses they were designed to avert. Both of these developments are good news for the housing market.”
Copyright CREA reprinted with permission

Sunday, October 16, 2011

Nelson, Canada, in living color

Nelson, a picturesque mountain hamlet in British Columbia, was built on mining 125 years ago. Today it's known for its spectacular fall foliage, outdoor sports and relaxed, artistic vibe.

Summer may be Nelson, Canada's busiest season, but "fall is the most beautiful time," says Virginia Wassick, co-proprietor of Grand Lakefront Bed & Breakfast on nearby Kootenay Lake. Nelson is about 150 miles north of Spokane, Wash. (Graham Edwards)

By Christopher Reynolds Los Angeles Times staff writer

October 16, 2011

Reporting from Nelson, Canada ——

Up in the northwest forest where Washington, Idaho and British Columbia converge, there's a lazy little international border crossing called Nelway, about the size of a gas station.

"Where are you headed?" a Canadian border patrol agent asked when my family rolled up a few months ago, heading north from Washington.

"Nelson," I told him as he began his search of our car.

"It's OK," said the officer, unenthusiastically. "Kinda hippie-ish. Very laid-back."

Not a problem, sir. The town of Nelson, semi-Victorian, substantially bohemian, sportier and more artsy than your average hamlet of 9,700 souls, sits in the Selkirk Mountains of British Columbia, about 30 miles north of the U.S. border. Picture a college town that has misplaced its university.

It has dramatic leaves in fall, skiing in winter, swimming and boating in summer, hiking and mountain biking much of the year. Thousands of American draft resisters and back-to-the-landers chose this area as a haven 40 years ago, and hundreds are said to remain, but it gets barely a trickle of U.S. tourists.

Just below the town lies the west arm of photogenic Kootenay Lake. Just above town rises Toad Mountain, where the discovery of silver prompted the founding of Nelson about 125 years ago. Nelson's stone and brick Victorians, once the province of off-duty miners and loggers, now house or neighbor eccentric shops, galleries and restaurants. The Sacred Ride (on Baker Street) peddles bikes. Downward Dog (Front Street) offers pet supplies. The Funky Monkey (Front Street) grills burgers. ROAM (Baker Street) promises gear for rivers, oceans and mountains.

Summer may be the busiest season, but "fall is the most beautiful time," said Virginia Wassick, who, with her husband, Duncan, runs the three-room Grand Lakefront Bed & Breakfast in a rambling old house near the lake's edge. In September and October, Wassick said, the guests "come and stay a week or two and sit on the deck, look at the colors and read books. I love the September-October people. They're so laid-back."

Nelson — about 150 miles north of Spokane, Wash., more than 400 miles east of Vancouver, Canada — is too little and isolated to stand as a major destination by itself. But you can fly into Spokane or Castlegar, British Columbia (about 25 miles south of Nelson), and spend a few days driving a 135-mile loop from Nelson past the mountains, lakes, rivers, meadows and towns of Kaslo, New Denver, Silverton and Slocan. Or follow the 280-mile International Selkirk Loop (, which includes handsome chunks of Idaho and Washington.

For us, Nelson was a three-day respite at the northernmost point of a 1,200-mile road trip that began in Seattle and ended in Portland, Ore. We window-shopped on Baker Street; bought many "Magic Treehouse" volumes in Otter Books for our 7-year-old daughter, Grace; paced the little pier that juts into the lake; took a skiff for a buzz around on the water; and drove across the big orange bridge — which locals call "BOB" because, remember, it's a Big Orange Bridge — toward the postcard views at Pulpit Rock overlook and Kokanee Creek Provincial Park.

With more time, we would have soaked at Ainsworth Hot Springs (about 30 miles northeast) and caught the free ferry at nearby Balfour (a 35-minute ride across the lake to Kootenay Bay). But we did ride an antique streetcar along the Waterfront Pathway to Lakeside Park, where you'll find an organic concession stand (summer only) and busy playground. Downtown, we shared a good but pricey brunch at BiBO, followed by a great (and pricier) dinner at the All Seasons Café, Nelson's top restaurant. Uptown, I took a ride on old BNSF railroad track that has been converted into a mountain-biking trail.

One day I drank hemp ale. Another, I ate a hemp cookie. But there were no purchases at the hemp boutique on Ward Street, so no hemp hat trick.

We stayed at the Prestige Resort, a pricey hotel at the water's edge that should be the greatest place in town, given its location. Instead, it felt like an opportunity squandered — a dull, dark building best suited to the housing of Dunder-Mifflin business travelers. Next time we'll look more closely at the New Grand Hotel (more character, lower rates) or a local B&B.

This being Canada, the town has a hockey team and a curling club, both busy from fall through late winter or early spring. The Whitewater Ski Resort, about 20 minutes outside Nelson, is a small operation (three chairlifts, 1,184 skiable acres, no lodgings) that gets big powder — an average of 40 feet of snow per winter. The resort's Fresh Tracks Café is a favorite among B.C. foodies, many of whom revere the "Whitewater Cooks" cookbook by former resort chef Shelley Adams.

"I just moved here to retire," Aza Samchuck told me one afternoon as he sat astride a bicycle and watched teenagers leap from a piling into the chilly water. He is 35, Samchuck said, but because he's done well in his profession, he can arrange a few lucrative days of out-of-town work per month, then hang loose in Nelson the rest of the time. Of course, I had to ask his profession.

"I tattoo people," he said.

For a less bohemian, more Victorian Nelson, head to Vernon and Ward streets, where you can nurse a drink inside the stone-faced Hume Hotel (1898) and gaze north to the old ivy-cloaked courthouse (1902) or east to the Touchstones Nelson Museum of Art and History (1902 again). Nearby on Victoria Street, there's the restored Capitol Theatre (1927) and the old jail, now Selkirk College's Kootenay School of the Arts. Near Latimer and Ward streets, there's the big, old red-brick fire hall (1913) and the old brewery (1899), now home to the new Nelson Brewing Co., which specializes in organic ales.

Uncommon heritage

As the buildings were going up, Nelson and environs were getting more than the usual influx of miners and woodsmen. A Pacific agrarian sect of Russian Christians known as Doukhobors also arrived, about 5,000 of them, and with them a militant fringe group, the Sons of Freedom, that staged hundreds of nude marches, arsons and anti-government bombings. Then during World War II, the Canadian government set up internment camps and imprisoned about 8,000 Japanese Canadian men, women and children.

As the Vietnam War stretched from the 1960s into the '70s, came the Americans — perhaps as many as 10,000 draft resisters (a.k.a. draft dodgers, a.k.a. conscientious objectors) by some estimates, along with others eager to start communes in the countryside. Most of the communes fell apart fast, and President Carter pardoned the draft resisters in 1977. But like many Doukhobors and Japanese Canadian families before them, many of these immigrants stayed, raised families and worked as farmers, artisans or entrepreneurs.

In the late '70s, Nelson boosters started tidying up the town's then-bedraggled old buildings. By the summer of 1986, the renewed downtown was fetching enough to attract Steve Martin, who arrived with a prosthetic nose and film crew to work on "Roxanne." The film, released the following year, features Martin as the big-nosed chief of a bumbling small-town fire department and Daryl Hannah as the bespectacled astronomer of his dreams.

Controversial statue

After learning all that, it was a letdown to meet no avowed draft resisters, Doukhobors, Japanese Canadians or movie stars. But I did hear plenty about the furor of 2004, when Isaac Romano of Nelson proposed a monument to the draft resisters, stirring scorn from many sides, prompting denunciations from local business leaders and inspiring a New York Times headline that dubbed Nelson "Resisterville."

The monument idea was quickly shelved, but in 2006 a reunion of resisters was staged (with Doukhobor help) in nearby Castlegar. Locals say a 3-foot-high bronze model of artist Naomi Lewis' proposed draft-resister memorial now resides at the Vallican Whole Community Centre in the nearby Slocan Valley, a favored haunt of countercultural folk.

Yet when author Ernest Hekkaman and his partner, Margrith Schraner, were looking to relocate from Vancouver 11 years ago, Hekkaman told me, they chose Nelson "because it's a small town with an active arts community and literary community.... I didn't realize there was such a large antiwar population here, so many draft dodgers from the '60s and '70s."

But since Hekkaman is a draft dodger himself — having moved from Seattle to Vancouver in 1969 — that was hardly a problem. He helped underwrite the 2006 reunion and briefly housed the model draft-resister sculpture at his home-gallery. When I reached him by phone after our visit, he estimated that perhaps 300 draft resisters remain in Nelson and surrounding areas. But good luck spotting them among the other free spirits.

On our last morning in town, we grabbed breakfast at the Kootenay Bakery Café (vegetarian), then watched as the real firefighters of Nelson — an entirely competent-looking bunch, noses unremarkable — fanned out from their truck, shut down Baker Street and sent a man skyward on the ladder. His task: to string up a banner for an upcoming event.

Half an hour later, amid nods of approval from a dozen sidewalk superintendents, they reopened the street. Through it all, traffic was unaffected, and you could nearly hear, on the surrounding slopes, a billion leaves fluttering in the Sunday morning breeze. Nelson was at peace, and we were due to head south again.

Copyright © 2011, Los Angeles Times

Home Sales Edge Higher in September

The British Columbia Real Estate Association (BCREA) reports that Multiple Listing Service® (MLS®) residential unit sales in the province rose 8.8 per cent to 5995 units in September compared to the same month last year. The average MLS® residential price increased 6 per cent to $523,568 last month compared to September 2010.
"MLS® home sales edged up 3 per cent in September compared to August on a seasonally adjusted basis,” said Cameron Muir, BCREA Chief Economist. “Housing demand last month was bolstered by persistent low mortgage interest rates and a surge in employment."
"Despite a modest gain in unit sales, total active residential listings in the province remained elevated in September,” added Muir. A total of 55,616 homes were listed on the MLS® in the province at the end of September.
Year-to-date, BC residential sales dollar volume increased 17.5 per cent to $34.8 billion, compared to the same period last year. Residential unit sales increased 3.2 per cent to 61,127 units, while the average MLS® residential price rose 13.9 per cent to $569,922 over the same period.

Copyright BCREA reprinted with permission

Thursday, October 6, 2011

Nelson rental market remains tight

By Greg Nesteroff - Nelson Star

Renters in Nelson can expect to pay an average of $776 per month for a one-bedroom apartment, according to the latest market survey by the Nelson Committee on Homelessness.

The organization conducts a snapshot each spring and fall of rental prices in the city.
Recently-hired coordinator Katie Tabor says the new figures are “quite similar” to last year’s.
“If somebody’s living in a place, there are rent controls around how much it can go up if they continue to live there,” she says. “But once a place opens up, the landlord has discretion over what to charge.”
The average price for a two-bedroom suite was $1,038 and for three bedrooms, $1,320, the survey found.
Conducted over a week in early September, it relied on ads in the Nelson Star and Pennywise, websites including craigslist, kijiji, and discovernelson, plus Coldwell Banker’s rental list, and calls to apartment buildings.
Suites, apartments, and homes within city limits were included in the survey.
In total, they found three bachelor suites, ranging from $550 to $650 per month; 16 single-bedroom apartments going for $625 to $1,000; 19 two-bedroom apartments between $700 to $1,300, and 18 three-bedroom apartments for $950 to $1,650. Some prices included utilities, but most didn’t.
The figures are comparable to last spring’s survey, which pegged one-bedroom rents at an average $850, and two and three bedrooms at $1,000 and $1,500, respectively.
A Canadian Mortgage and Housing rental market survey of the southern interior conducted a year ago found slightly lower figures for Nelson — an average of $542 for a bachelor suite, $610 for one bedroom, $719 for two bedrooms, and $1,007 for three bedrooms.
However, it only looked at apartments in buildings of three or more units, and included prices for currently rented units, which Tabor says may reflect units held by the same tenants for a long time.
“In comparison, the numbers in the September snapshot from our office reflect the cost of rentals actually available on the market, and the prices are much higher,” she says.
Even so, the CMHC report found rentals in Nelson were the highest in West Kootenay. In Castlegar, the average one-bedroom rented for $565 per month and in Greater Trail (not counting Rossland), $512.
Only Revelstoke had even higher rents, with one bedrooms going for $690 per month and two bedrooms $902.
Nelson’s vacancy rate was also the lowest by far at 1.8 per cent in 2010, compared to 19.5 per cent in Revelstoke, 11.8 per cent in Rossland, and 5.4 per cent in Cranbrook.

Tailwinds point towards a soft landing

  • Tailwinds include low mortgage rates, relatively low unemployment and strong immigration
  • Headwinds include high prices, elevated household debt and slowing employment
  • More buyers are turning to variable rate mortgages on expectations that rates could stay low for some time, or even decline.
  • Average Canadian house prices were a record two-thirds more than average U.S. house prices

TORONTO, September 30, 2011 – After a decade of strong growth in the Canadian housing market, residential real estate is headed for a “soft landing” with prices moderating in the months ahead, according to a Special Report from BMO Economics.

Low interest rates have fuelled Canada’s housing market in the past decade, pushing prices to new highs in most regions. Sales are now close to their past-decade norm, and well below pre- and post-recession peaks, while residential mortgage demand has also moderated. However, a weaker economy and new mortgage rules have dimmed activity recently.

“Since the prudent and timely mortgage rule changes announced early this year by Finance Minister Jim Flaherty, Canadian house prices have moderated,” said Sal Guatieri, Senior Economist and Vice President, BMO Capital Markets. “House price gains are slowing. Although average resale prices rose a brisk 7.7 per cent year-over-year in August, the rate of increase has slowed from nearly 9 per cent earlier this year.”

Mr. Guatieri noted in the report that housing activity should remain moderate in the year ahead, with tailwinds including low mortgage rates, relatively low unemployment and strong immigration. Furthermore, a weak global economy and Europe’s debt crisis will likely keep the Bank of Canada on the sidelines until early 2013, while further easing measures by the Federal Reserve should suppress long-term rates in both countries, thereby supporting affordability.

On the flip side, Mr Guatieri noted that the housing market also faces several challenges, including high prices, elevated household debt and slowing employment.

“Prices have risen twice as fast as incomes in the past decade, lifting the current ratio 16 per cent above its norm. Although the current overvaluation is below levels that triggered price corrections in Canada in 1989 and the U.S. in 2006, it will remain a thorn in the side of first-time buyers,” said Mr. Guatieri. He added that for bargain hunters, Canadian houses, on average, cost a record two-thirds more in local currency terms than properties in the U.S.

The upshot is that home sales are likely to remain steady in 2012 and prices should also stay put. However, the resource-rich provinces, notably Alberta and Saskatchewan, should outperform other regions since their economies are expected to grow the fastest. Because housing is moderately overpriced in most regions (and considerably so in Vancouver), it’s vulnerable to a correction.

“Regardless of the current low interest rates, it is still important for homeowners or potential buyers to be prudent and stress-test their mortgage against a higher interest rate to ensure they can afford what they signed up for. Total housing expenses should not consume more than one-third of total household income,” said Katie Archdekin, Head of Mortgage Products, BMO Bank of Montreal.

Ms. Archdekin added that Canadians need to be continually examining ways to reduce overall housing costs. “BMO has developed products, such as the low rate mortgage with a maximum 25-year amortization, that we believe are directly relevant to today’s environment and specifically designed to help Canadian consumers manage their debt. Furthermore, the lower amortization can significantly reduce the amount of interest paid over the life of the mortgage.”

Additional factors expected to affect the future of Canada’s housing market:

  • The biggest threat stems from the perceived one-in-three chance of a recession, and the attendant loss of jobs.
  • Another risk, though far smaller, is if interest rates spike higher next year. Even a moderate 2 percentage point increase in rates would severely impact affordability. Low rates are a threat too, since they could cause the market to heat up again, only to correct when rates eventually rise.
  • Mortgage growth is expected to moderate as Canadians turn more cautious in managing their debt. Despite slower personal credit growth, household debt hit a record 1½ times disposable income in Q2, as residential mortgages continued to outrun income.
  • Meanwhile, job and income growth should moderate next year, as the economy is expected to grow just 1.8 per cent versus about 2.2 per cent this year.
  • More buyers are turning to variable rate mortgages on expectations that rates could stay low for some time, or even decline.