Realestock Blog

Is the doom and gloom in the media getting you down? Have you stopped reading newspapers or surfing the net for fear that your house is now worth little more than pocket change? Never fear, here at Realestock we have some reasons why you shouldn’t get upset - whether you’re a home seller, home buyer, an agent, or a developer.

Mortgage companies are still offering competitive loans, and rates are going down. The media continually reports that mortgages are unavailable. We don’t know where they are looking, because we know first hand that you still can get funding, and even better, rates are dropping. If you are a first time buyer, this is an excellent opportunity to jump in. Why? Low interest rates mean your mortgage may turn out to be less than the rent you are paying now. Think of it as an investment. I’d rather be paying my mortgage than someone else’s.

You can get a really good deal, depending on where you are buying. Areas that may have been overpriced before the crisis may have come down to a more reasonable price – and this is where you can jump in. Always wanted that waterfront condo in Vancouver, but never been able to afford it? Now the price has dropped by 25%, you might be able to.

A decline in new home sales and a lack of building will mean that your ‘old’ property will be in demand. Fewer developments are in the works, and many condo developments are unable to complete construction. This means that there will be a couple of years when there will be a real lack of brand new homes for buyers who want to move in, without having to update their property. This is where you can jump in. The current crisis gives you enough time to renovate your 1980s condo just in time to catch those buyers who want to move in to a new place. Cha-ching!

There is a surge of demand for rental properties. If people don’t buy – they rent. Got a new development that you can’t sell? Why not try implementing a rent to buy model? Bought a house to flip and sell? Why not flip and rent? When the market comes back around, you’ll be able to sell to your renters. I love it when a plan comes together.

Overseas investment is still happening. Where you and I see “Argh! My house is worth less than it was last year”. Overseas buyers might think “What a great deal”. Obviously, not all properties and developments will appeal to overseas investors, but it you are selling in a popular tourist area, or own a waterfront property, you might find that you have something original to offer someone who’s looking for a nice vacation home.

Niche properties are still selling. Are you selling an environmentally aware development? Or something by the water? Maybe your townhouse community offers facilities that make it different and innovative, such as a fitness centre, or access to a golf course. If you are offering something that differs from the norm, you might find your property sells before similarly priced ‘little boxes’.

If you don’t have to sell, what’s the problem? If what goes up must come down, then hopefully what comes down, must go up. If you don’t intend to move from your home, and you can still pay your mortgage, then just hang tight. Remember, eventually you’ll make the money back. Maybe it won’t be at the same rate that you made it last time, but slow and steady wins the race. And maybe you won’t have to wait that long, because….

Many economists and world leaders are predicting that the major crisis period will be over in 2010. If this is the case, that’s not that far away. Think about how long ago late 2006 was? Not that long ago, eh? If you can afford to ride out the crisis, you can still come out with a great investment or properties to sell.

Your home is not just collateral. It is a living breathing thing. OK, maybe I’m going too far, but something that is really important to remember is that a house is not just an investment. – You spend your life there. Think about what you love about your home and what makes it special. Maybe it was your son taking his first steps in the den, or your parents’ 40^th wedding anniversary dinner that took place in the dining room. Don’t you feel better already?

We are learning from our previous mistakes. As Oscar Wilde once said: Experience is the name we all give to our mistakes”. The whole world can now see where mistakes were made, and how we can avoid this happening again. Whether we blame over-speculating, or subprime mortgages, or everyone living on the never-never, it doesn’t matter. But we can learn from what has happened, and prevent a worldwide disaster from occurring again.

So you can finally pull yourself out from behind the sofa. Yes, things could be better, but they could be much worse, particularly if we let ourselves get caught up in this situation again. Real Estate is still a great investment, and while people are apprehensive now, the market will eventually recover.

Do you think that it is only a matter of time before the market corrects itself? Or do you think that we are in for many more years? Let us know what you think below, on our twitter page or in our community forums

The views expressed on the blog portion of this site represent only the opinions of the author and may not necessarily be the opinions of Realestock.com

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It's another monumental week in the real estate world. Once again, Taking 'stock supplies you with some interesting tidbits to keep you up to date on various world developments (no pun intended). If you read anything in the news that you think should be in next week’s blog, feel free to comment on the posting. Alternatively, if you want to comment on any of the stories listed here, let us know what you think!

Luxury Real Estate News/Views

Neighbor says Golf is a Sport Too Close (New York Times)

A lot of people want to be near to their favourite golf course...but how near is too near? A resident whose house is next to the 6th hole (a par 3) at the Winged Foot Golf Club is sick of golf balls hitting his property, breaking his windows, scaring his children, and making his dog sick. The hole is currently closed due to a restraining order brought against the club. You know it has to be serious when Donald Trump is offering to mediate.

It's not Easy Being Green - If You are Buying a Luxury Home...

This week's Realestock blog entry looks at how many luxury buyers are not concerned about their homes being environmentally sound. However, some developments are managing to combine good living with good style.

America's Luxury Homes, Downsized (Forbes)

On a similar theme, Forbes.com has written this interesting article about how many popular luxury properties are smaller than traditional 'luxury' housing. This is partially due to the lack of space, growth of environmentalism, worries about reselling the property in this less than buoyant market, and, more importantly, because it isn't 1987, and big doesn't necessarily mean classy. After all, is it better to have Foie Gras, or a Big Mac?

Worldwide Property News/Views

China's Homeowners Feeling Little Pain (Newsweek)

Here in North America, we are all on tenterhooks, fearful to hear what will happen to the property market next. However, in China, people are not feeling the pinch as we are. According to Newsweek, the cost of an average home has increased fourfold in the past eight years, and China's 80-million strong middle class are clambering to get on to the property ladder. Whether the market will eventually deteriorate like ours is still uncertain, but for the moment, things are looking sunny for the Chinese market.

Have I Got the Candidate For You! How the Real-Estate Market Could Turn Florida for Obama (Slate.com)

We are all now acutely aware how politics can affect house prices. However, in Florida, the real estate market could affect the choice of candidate. Voters are looking at which candidate will save them from getting into negative equity. This choice could be crucial as to who becomes the next president: because as Al Gore knows, Florida can change an election.

Rise in Property Re-structuring, Recovery and Debt Business Expected (PropertyWire.com)

According to PropertyWire.com, many international real estate groups are moving into the restructuring and recovery business - due to the large amount of real estate developments and projects that are falling through due to a lack of funding, in addition to the large amount of foreclosures and other loan difficulties that are occurring.

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Originally I was going to write all about the latest developments in green living. I read a number of articles on and offline about how developers are adding green features, how some real estate agents are biking to viewings and open houses (How do they transport clients? Do they sit on the crossbar? In the basket?), and how many buyers are asking about energy efficient appliances and baulk at the idea of marble counter tops.

However, a couple of weeks ago I read an interesting article in Canada’s Globe and Mail (www.globeandmail.com), where writer Terrence Belford illustrated that in Toronto, despite the fact there are more homes being built to LEED (Leadership in Energy and Environmental Design - the Green Building Rating System) standards, there are very few in the ‘luxury market’ (which the Globe and Mail describe as being anything that sells in Toronto for over $600 a square foot). It appears that while the mid to low-range buyers are interested in energy star appliances and recycled materials, luxury buyers are not. In fact, luxury buyers are going in the exact opposite direction – buying huge energy-zapping fridges, asking for counter tops made from nonrenewable stones, gas-fueled stoves and hardwood floors made from rare woods. The writer of this article suspects that “…environmental concerns are not on their list of priorities”.

This, to me, is rather worrisome. We are at a time in history where how we deal with environmental concerns is critical. Everyone, irrespective of their income, should be doing their part – even if it is just recycling their bottles and using reusable shopping bags to buy groceries. The writer of this article comments that most luxury buyers are in their 40s and 50s, and that it is younger buyers and developers who are interested in saving energy, not those who to whom utility bills are something that you ‘don’t pay much attention to”.

I don’t believe that this generalization is entirely the case. Many luxury condo buyers downsize from larger houses, and so there must be an element of that choice that relates to the fact that condos are easier and cheaper to maintain than houses are. Also, ask anyone on the street about their opinions on the environment, and most people will tell you we need to become more energy efficient in our general lives.

However, someone must still be buying those fridges that are bigger than my bathroom – but can’t energy efficiency and luxury go hand in hand? Can’t you have the counter top you’ve always wanted without decimating a small forest? Some developments have the answer.

The Dockside Green Development in Victoria, British Columbia (www.docksidegreen.com) combines luxury with green living. Prices range from a mid range $289,900 to a luxury $1,233,900 for one to two bedroom (plus den) townhouses and condos. This popular development combines high end products with environmentally friendly additions, including:

- 100% fresh air through central or individual heat recovery ventilators

- Low, or no volatile organic compounds, paints, sealants, adhesives, and avoidance of the use of urea-formaldehyde composite wood products

- High-end energy efficient appliances (they do exist!)

- Sewage Treatment: 100% of the sewage is treated on site – and the treated water will be used for flushing toilets, landscape irrigation and water features

- Alternative transportation, which will be readily available through: A car share program, upgraded bike trails, bike racks in the building, harbor ferry dock, transit, and a mini-transit shuttle bus – the point of this being the elimination of a car, or at least of a second car

- Bamboo flooring and kitchen cabinets (there is also an option for cork flooring)

- Salvaged wood products will be used

- Biomass heating, with a back up natural gas fueled boiler – which will make the building greenhouse gas neutral

One look at the interior and exterior shots of this building will show you that this is definitely geared for the high medium to luxury market, and it is paying off – already many units have been sold, including the commercial spaces for a restaurant/pub, a café and a bakery.

At the end of the Globe and Mail article, a developer is quoted as saying that it doesn’t matter what changes are made now, as the changes that are slowing coming through will eventually become the standard, and possibly even law. Therefore anyone who is resistant to these transformations will be left behind. This is an interesting point, but I feel that legal changes may not be as influential as social ones. By this I mean that being environmentally unaware is almost regarded as a stigma, and those who drive SUVs, don’t recycle, and have a freezer as big as a horse may find themselves being scorned by their peers, which is much more damning than any law could every be.

Whatever the reason – social or legal – environmental building is here to stay. And what to say of those changes that I wanted to mention earlier on? Here are some green changes and events that are happening around the world:

- At the University of Wisconsin-Madison, The Wisconsin School of Business Graaskamp Center for Real Estate will host a conference on Sustainable Real Estate Development

- Ecobroker (the first and largest provider of green real estate training for realtors and other licensed real estate professionals) celebrated its 4,000^th member this August

- In Chicago Agent Magazine, K.K.Snyder Reports that in Chicago, the amount of clients who want environmentally friendly homes dramatically outweighs the number of energy efficient houses and condos. People are taking an interest because these houses are not drafty, don’t have ‘hot’ or ‘cold spots’, and are more comfortable for owners, in addition to helping the environment

- Green building rules are to come into effect in Abu Dhabi, in January, 2009. According to Propertywire.com, Abu Dhabi’s Urban Planning Council aims to set new standards for sustainable development, and hopes that this will encourage similar plans throughout the Middle East region

So whatever your budget, consider going green, particularly when choosing your appliances. Being efficient doesn’t mean being cheap. Yes, you may think that people will love your top-of-the-range stainless steel 20ft fridge, with 6 water dispensers, but secretly they’ll be thinking that you’re as bad as those people who drive their Hummers ten meters to mail a letter. There are a number of stores and designers who specialize in creating high-end, environmentally friendly products, so while you may have to search a little harder, it’ll be well worth it in the end.

The views expressed on the blog portion of this site represent only the opinions of the author and may not necessarily be the opinions of Realestock.com

Do you have a view on green building? Do you think that luxury buyers shouldn't care about the environment? Let us know by posting below!

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Welcome to our newest Realestock feature. Every week, Taking 'stock will give you a roundup of the news and views that have arisen in the past week.

Luxury News

What's on the market: While new record looks unlikely, Palm Beach primed for big deals (The Real Deal, NY)

Looks like luxury homes in Palm Beach are still doing well. Multi million dollar homes are still on the market, and are selling!

Young guns driving enviro-condo push (Globe and Mail)

The Green Movement is growing…but is the luxury market lagging behind? Why aren’t luxury buyers going green?

General North American Real Estate News

Economist debate whether US property market plunge will cross into Canada (Property Wire)

Housing market could soften more but not crash: CIBC (Globe and Mail)

Prudent Canada won't experience a U.S.-style housing collapse (Vancouver Sun)

There’s been a couple of articles on this in the last week. The bad news? House prices will go down. The very good news? Most economists, including those at CIBC, BMO, and Desjardins, assure us that Canada will not suffer the same crash that the US is currently experiencing.

Loonies find a second home in U.S. real estate (National Post)

Many Canadians are taking advantage of the US property market…by buying vacation homes in the States. But is this a wise buy?

Bailout plan offers vague help to homeowners (Associated Press)

It looks like the bailout may not help those US home owners who are currently losing their houses, but may help to stop a rapid drop in house prices…

Miscellaneous and Fun News

A Million Reasons to Look Globally?

This week on our Realestock Blog: What does your million buy around the world? Will it go further in Paris, London or New York?

Sex and the City' Writer Bushnell Probes Real Estate (Bloomberg)

Candice Bushnell, famed writer of “Sex and the City” has set her newest novel in the backdrop of Manhattan’s booming real estate market. OK, so she’s a little out of date…but it sounds like a fun read…maybe something to take your mind off the current real estate woes?

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