experts: real estate column Monday, April 10, 2006

The 'Dark Side' of Affordability

Buyer origin data is a dangerous and very disturbing idea.

By Alan  Skinner

A recent Pete McMartin article in the Vancouver Sun addressed some issues regarding the affordability of homes in Greater Vancouver. Comments like "for whom are we building this city?" ... and questions raised as to the origin of the buyers with whom our "local buyers had to compete..." are, I believe, unfortunate. He did go on to say that we could be "wading in to the quagmires of ethnicity and nationality". Indeed, the suggestion that the Real Estate Board "try to put together a database that would track buyer origin" is disturbing. To what end? Is this data intended to assist us to find a "solution" to the "problem" – reworking immigration and real estate investment guidelines at Federal levels??

I like analogies! Suppose a city decided to revamp its uninspiring golf course and create the quintessential course. This leads to golfers coming from far to use the facility (indeed some even move to the city to retire there and become members of the club!) Now, rather than 2/3000 rounds per month, the course boasts 12,000 with long waiting lists and high demand for bookings. Suppose the cost of a round (which was, say $35) now stands at $220. Henry Brown (retired), a 3 round a month man, was comfortable with that $100 or so expense. Today one round more than doubles that monthly budget. I'm sure we would all have an opinion (some a strong one) as to how we feel about this. This "victim of its own success" dilemma is a tough one to rationalize. Apparently, in our fable, there is no affordability problem (obviously there is a goodly supply of those that can afford) ... but for Henry Brown and his ilk, there is a problem. I am not giving any opinion here (we all have the right – obligation ? - to our own), but will remain focused on the Supply and Demand issue. My analysis, however callous this may seem, will focus only at that level. This is not a sociological or moralistic exercise. All I will say is that "buyer origin data" is a dangerous and very disturbing slope on which to "teeter".

A comment on the value of floor plans in home marketing. I have, of late, received extensive feedback from buyers regarding my OBEO™ - Space Designer feature which goes way beyond the static "layout" format. It employs an interactive furniture (and appliance) placing capability – excellent for "test driving" the home and seeing how your furniture fits. Also for giving direction to movers on moving day! Visit my website and give it a try. An excellent selling tool!

And now our 1st Qtr figures. Number of N/Van detached sales are up 5%. Average prices +19% and inventory basically the same as last year. On the attached (t/hse) front, sales numbers down 6% while apt sales were down 29%. Average prices up 25% (t/hse) and up by 12% for apartments. All prices clearly remain up. Inventory, both (t/hse) and (apt) consistent with 2005. Demand (buyers) seems to be continuing at a healthy level.

W/Van detached up in number of sales (+11%); average price +34% YTD and inventory stands at 15% lower than 2005. On the condo side – attached (t/hses) saw 20 vs 13 units sold; average price change +4%. Active listings now down 9% from last year. Apartments reflect 39 sold vs. 61 in ‘05; with average prices up 49% and active listings now 6% higher than 2005.

The North Shore appears to be maintaining its sales pattern and my belief in the gentle upward price curve for 2006 is unchanged.

Remember that OnTopOfTheMarket.ca is the place to visit for North Shore R/E information. This work in progress strives to be the "go to" site for North Shore Real Estate analysis. A jumping off point for FULL market listing information, it offers a "no obligation" estimate of value for your personal Real Estate. Please use it and continue your valuable feedback.

To join the group subscribing to the e-mail version of this "update" - send a request now to alanskinner@shaw.ca and you’ll be assured receipt; phone me at (604) 988-7368 or visit www.OnTopOfTheMarket.ca

Questions regarding the market, decisions, contemplations, opinions of my musings, are welcomed via e-mail (or phone) – hey, pop-in and say "Hi" to me at an open house – I’d love to see you.




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Recent Articles by this columnist:

Keeping Realtors Honest
Tuesday, August 12, 2014


How well do we stack up?
Tuesday, July 29, 2014


Resistance to change and compliance delay
Wednesday, June 04, 2014


Of urban planning and municipal wisdom
Thursday, April 17, 2014


Yes, it's official - demand is rising
Tuesday, March 11, 2014


All articles by Alan  Skinner

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