Olympic Village & Southeast False Creek Updates Discussion

[mr.x]

Originally Posted by deasine

Oh shut up. When you become a moderator, and if, you can make the rules. The last article you posted was all about politics.

When pigs fly.

[ravman]

Originally Posted by mr.x2

When pigs fly.

[hollywoodnorth]

Originally Posted by jlousa

I'm not so sure why all of a sudden Millennium is a backwaters developer, why they have not done much in this city they are certainly up there with the big dogs. Not Concord pacific big obviously but definitely with Wall and others. And lets be honest had Concord received the contract and everything did go smoothly we'd have people complaining about Concord having the city in their pocket and how the process must of been corrupt because their was a larger bid on the table.

the thing I really dont like here is all the sudden BOOM no one from Millennium is anywhere to be seen and not doing any press...........

where as if itw s the other way around like awards were being handed out for the project or when the sales push started etc etc........they were all over the place doing feature stories with every media outlet that would have em.


and now? ................... nothing?


this is the time to save face and step up and tell your side of the story, etc....not let other people hold ALL of the bag.


and yes I agree Millennium is a big dog and does some great stuff.... L'Hermitage for example is an absolute PALACE and is just amazing all around.


That being said they sure are going to be taking a beating in the public eye and it will effect their future and rightfully so to some degree.

[mrjauk]

If any of you here believe that condo prices will only drop 20%, I've got a DTES condo to sell you for $1 million.

Take a look at the nature of the world economy presently, and we're not even close to bottoming there yet (shipping costs between Asia and Europe dropped to 0$--yup, that's not a misprint).

If the average condo price in Vancouver (the city proper) doesn't fall at least 50% from the 2008 highs (the top hit in April of last year), I will watch a Canuck/Wild game for punishment.

Just look around, people. We are coming off the bursting of the largest speculative bubble in world history.

So what happens if the value of total sales for the Olympic Village drops to 50% of the expected? How much do we owe then?

[sacrifice333]

Originally Posted by mrjauk

So what happens if the value of total sales for the Olympic Village drops to 50% of the expected? How much do we owe then?

I guess that'd put revenue at a shortfall of approx. $300-400M

[TwoFace]

Originally Posted by hollywoodnorth

That being said they sure are going to be taking a beating in the public eye and it will effect their future and rightfully so to some degree.

Based on the latest news, this adventure could cost them $270 Million (they may not survive this).
Can’t blame them for having more important things on their mind.

[mr.x]

Originally Posted by ravman

....and with good reason.

[johnjimbc]

I think if you want to play "worst case scenario" then have at the 50% figure. But that hasn't even happened in the US, nor is it expected to. it is estimated Arizona, Las Vegas metro, parts of Florida and California might end up being down 33% (in total, including additional expected drop), but most parts of the US will see far less.

The DC area, from which I moved, is down less than 5% after nearly 4 years of the market correction. I've seen mixed analysis for the coming year, from one analyst who thinks DC may already be past the bottom (since inventory has been dropping for several months) and another that expects another year of moderate losses.

I know the sky is falling is the new chant of the day, but I have seen NOTHING to suggest real estate will fall by 50% in Vancouver or anywhere in Canada. Does anyone care to post some analysis or reporting behind that assumption?

[mrjauk]

Originally Posted by johnjimbc

I think if you want to play "worst case scenario" then have at the 50% figure.

50% off for condos is NOT a worst-case scenario; it's probably a best estimate. Worst case would be anywhere from 60-70%. Once again, the world has witnessed the largest financial/real estate bubble in its history! A recent article in the Irish Times has an analyst (who has been right about the Irish RE bubble) predicting Dublin prices to drop about 75% from their all-time high. Sounds about right to me.

But that hasn't even happened in the US

[Once again, you're just flat-out wrong. Prices in the six-county region of Southern California (with a population of close to 20 million), had dropped by 40% as of September 2008. They have continued to drop in the intervening 3.5 monhts.



, nor is it expected to. it is estimated Arizona, Las Vegas metro, parts of Florida and California might end up being down 33% (in total, including additional expected drop), [see the chart above] but most parts of the US will see far less.

The DC area, from which I moved, is down less than 5% after nearly 4 years of the market correction.

4%! Methinks you better look at those stats again. They're down about 25% since the high. [Edit: I don't know why the image won't embed; here's a link to the chart.http://2.bp.blogspot.com/_3bGnkNeoPxk/SW...1600-h/Washington+MSA+housing+prices.PNG]

I've seen mixed analysis for the coming year, from one analyst
[this wouldn't be from a self-serving real estate agent, or CEO of a home-building company, or somebody else who lifeblood is tied to increasing real estate prices?]

who thinks DC may already be past the bottom (since inventory has been dropping for several months)

Inventory fluctuates seasonally and is expected to drop in the winter months. Wait until spring and we'll have a much better idea.

and another that expects another year of moderate losses.

I know the sky is falling is the new chant of the day,

It may be the "new chant of the day" (actually, it isn't as many have seen this coming since about 2004/2005) but it still isn't the predominant view amongst the population. I don't know how many times I've heard lately (from friends/family members/co-workers) that real estate prices have just about bottomed out in Vancouver and the spring may be a good time to buy "at the low." Needless to say, I think they'd be catching falling knives were they to buy this spring.

but I have seen NOTHING to suggest real estate will fall by 50% in Vancouver or anywhere in Canada. Does anyone care to post some analysis or reporting behind that assumption?

Well, I won't provide any analysis but I will ask you to go and look at a chart of historical real estate prices in Vancouver. Then go and look at a historical chart of median household income/median price of a home in Vancouver. Then go and look at a historical chart of real estate prices in any country/city in the world ending with January 2009.

Now answer me this question: why do you believe that "this time is different?" In other words, why do you believe that the drops in real estate prices that Vancouver has itself witnessed in the past, and that have recently occurred in every single city/country in the world, will not happen here again as well?

Finally, have a look at this graph; Vancouver's benchmark (which is equivalent to the Case-Schiller criterion in the US) has dropped more steeply from its peak (April 2008) in the first seven post-peak months than any city in either the US or Canada (except for Edmonton strangely enough). Even bubblicious Miami, as of seven months post-peak had seen only a drop in benchmark price of 7.5%, while Vancouver has seen a price drop in 7 months of 15%. We still have a long, long, long, way to fall.

[Edit: I don't know why the image won't embed, but here is a link to the chart.]

http://4.bp.blogspot.com/_rt16FZ_z1N8/SV...Case+Shiller+Total+Decline+From+Peak.jpg

[fever]

The last link shows that Vancouver was the last city on the list to reach its peak. We have been able to see the rapid drop in house prices in American cities before they started to drop here. With this and other information, you'd have to be at least mildly retarded to have been shopping for real estate over the last few months. It's obvious that prices will be lower in the future than they are today. If few people are buying, the prices listed and the rate of decline don't give much information about the perceived value of real estate.

[johnjimbc]

What the heck is a "monthly percentage of sales price change"? It certainly is NOT the same thing as the price change. Prices were never climbing at 20% annually year after year as the chart indicates for Washington DC. And prices have never fallen that once in one MONTH either. The interesting thing is the data they purport to use comes from the MRIS system, which is the multiple listing service for DC. So the best I can figure is they are creating some statistic from the data which seems one derivative too far to be too meaningful in judging what average or median prices really are.

Here are the links to the PDF of median and average prices for Washington, DC for the past few years. Most of the PDF images shows the activity for the month, and then shows the past few years. The first is for condos and coops, the second is for single family homes:

http://gcaarrocks.com/WorkArea/showcontent.aspx?id=5494

http://gcaarrocks.com/WorkArea/showcontent.aspx?id=5496

DC has not seen a 40% drop in prices, and that is a market I know intimately and in depth. So it does make me question the statistics of that research entirely - not just for DC. Though I cannot claim expertise on the other jurisdictions.

Data is a wonderful thing when applied properly. When someone shows me a unit in a single building that sells for 50% of the peak of a truly comparable unit in the same building, and then replicates that comparison for a dozen buildings, I'll believe prices have dropped 50%. And I have seen nothing of the sort or even close in DC. I seriously doubt we will see it here in Vancouver either, particularly in the downtown core.

That is NOT to say there is not a downturn, or that there won't be a sustained downturn. I just don't believe the 50% statistic, unless someone is playing with the numbers or pulling selective statistics together.

I will look for a link when I have time, but the best analysis I've heard on this in recent weeks talked about 30 - 35% off peak for the worst markets in the US from peak to anticipated bottom. It seemed like a balanced analysis without alarm bells OR rosy glasses. They weren't promoting anything except a rational discussion of the economy and how the slow housing market fits into it.

[Yume-sama]

Canada is a lot different than the USA, we will not be hit as hard. There are a lot of factors, but, it's not even a comparable situation. We really aren't having that big of a credit crisis here, people aren't losing their homes, they are not being foreclosed on by the dozens, whole neighborhoods are not selling for $50,000 like in Detroit. If you look at Las Vegas, Phoenix, etc., they are primarily "vacation" destinations for people who live in "colder" places, and now people are finding themselves not able to afford a vacation home. These homes are being foreclosed on, and as a whole, dragging the price of all the homes around it down. When people in Canada (not just Vancouver) start losing their homes... then we will have a problem. But don't expect that to happen, because in the land of the "True North Strong and Free", credit did not come "free" and you always had to QUALIFY to buy something. Few people live horribly above their means!

The only problem with the Canadian market is consumer confidence. It will rebound eventually when people stop being so stingy.

[mrjauk]

Originally Posted by Yume-sama

Canada is a lot different than the USA, we will not be hit as hard. There are a lot of factors, but, it's not even a comparable situation. We really aren't having that big of a credit crisis here, people aren't losing their homes, they are not being foreclosed on by the dozens, whole neighborhoods are not selling for $50,000 like in Detroit. If you look at Las Vegas, Phoenix, etc., they are primarily "vacation" destinations for people who live in "colder" places, and now people are finding themselves not able to afford a vacation home. These homes are being foreclosed on, and as a whole, dragging the price of all the homes around it down. When people in Canada (not just Vancouver) start losing their homes... then we will have a problem. But don't expect that to happen, because in the land of the "True North Strong and Free", credit did not come "free" and you always had to QUALIFY to buy something. Few people live horribly above their means!

The only problem with the Canadian market is consumer confidence. It will rebound eventually when people stop being so stingy.

There is so much to take issue with here, but since it's late I'll address your point about the availability of credit in Canada and it not coming "free". Well, for one, it wasn't "free" in the US either, which is why we're seeing the catastrophic home foreclosure figures. Second, and more importantly, beginning sometime in 2006, Canadians were able to "buy" homes with a zero-down, 40-year mortgage.

When Harper's government (which, by the way made the decision to allow the CMHC to guarantee these types of bank loans) realized the folly of this policy, they rescinded it. Too late, since tens (if not hundreds) of thousands of Canadians "bought" homes using this type of mortgage product. When these loans begin resetting, then the mortgagees will have to pony up cash or they will not be able to refinance. And what is the probability of these individuals having cash to pony up, when they used a zero-down mortgage to "buy" the home in the first place?

I'll know it's time to buy in Vancouver when either

i) The rent-equivalency calculation works in my favour (with a small ownership premium factored in) and/or

ii) Most of the people I meet in every day life are telling me that real estate is the worst investment in the world and that I'm nuts thinking about buying real estate.

Unfortunately, I think that we're at least two years away from either of i) or ii) above coming to fruition.

[mrjauk]

Originally Posted by johnjimbc

What the heck is a "monthly percentage of sales price change"? It certainly is NOT the same thing as the price change. Prices were never climbing at 20% annually year after year as the chart indicates for Washington DC. And prices have never fallen that once in one MONTH either. The interesting thing is the data they purport to use comes from the MRIS system, which is the multiple listing service for DC. So the best I can figure is they are creating some statistic from the data which seems one derivative too far to be too meaningful in judging what average or median prices really are.

Here are the links to the PDF of median and average prices for Washington, DC for the past few years. Most of the PDF images shows the activity for the month, and then shows the past few years. The first is for condos and coops, the second is for single family homes:

http://gcaarrocks.com/WorkArea/showcontent.aspx?id=5494

http://gcaarrocks.com/WorkArea/showcontent.aspx?id=5496

DC has not seen a 40% drop in prices, and that is a market I know intimately and in depth. So it does make me question the statistics of that research entirely - not just for DC. Though I cannot claim expertise on the other jurisdictions.

Data is a wonderful thing when applied properly. When someone shows me a unit in a single building that sells for 50% of the peak of a truly comparable unit in the same building, and then replicates that comparison for a dozen buildings, I'll believe prices have dropped 50%. And I have seen nothing of the sort or even close in DC. I seriously doubt we will see it here in Vancouver either, particularly in the downtown core.

That is NOT to say there is not a downturn, or that there won't be a sustained downturn. I just don't believe the 50% statistic, unless someone is playing with the numbers or pulling selective statistics together.

I will look for a link when I have time, but the best analysis I've heard on this in recent weeks talked about 30 - 35% off peak for the worst markets in the US from peak to anticipated bottom. It seemed like a balanced analysis without alarm bells OR rosy glasses. They weren't promoting anything except a rational discussion of the economy and how the slow housing market fits into it.

Where did you see that DC has had a 40% drop in prices? The metropolitan area has fallen more than 20% since peak according to Case-Schiller. You're correct that the district itself hasn't fallen by that much...yet. (By the way, I know DC fairly well and was just there last week talking to some real estate agents in Georgetown.)

The Case-Schiller index is the best index to track real estate prices as they do not use median or mean pricing of houses sold as they understand that the median and mean can shift dramatically based on the composition of houses being sold. They adjust their figures so that their index reflect comparable sales.

[johnjimbc]

It's not a big deal really, and certainly not worth the ink.

You think prices in Vancouver will go down 50% (or even 60 or 70%, it appears since you regard 50% as a best case scenario) from their peak.

I don't.

I point out that DC hasn't experienced anything close to that, and you belatedly acknowledge that (with an ominous . . . yet ; ). You seem to question the motives of any other possible analysis or analysts yet quote "DrHousingBubble" as if the motivations there are unquestionable.

The one point I would make is a vast majority of Canadians did not refinance into 40 year mortgages with 0% down. You make it sound like a program that was in place (actually I never heard of 0% down programs at all, just the 40 year amortization) for what - 18 months? - irrevocably changed the nature of property ownership in Canada while all experts I've heard or read agree without argument that mortgages in Canada were and have remained far more conservative than US mortgages during at least the past decade.

I don't really care to piss about this all day (or night). I have a project due tomorrow and it's been fun and all on breaks. It is simply your unwavering certainty that there can be no other outcome than your dire predictions (more dire than anything I've heard) that strikes a nerve with me.

What gives? Is it even remotely possible that your prediction might, just maybe, be a bit too pessimistic?

[TwoFace]

^^^^^^^^^^
Isn’t this a tread highjack?
Doesn’t this never-ending market analysis and opinion argument belong on some other forum.

[Rusty Gull]

^ http://www.realestatetalks.com

[wrenegade]

I am assuming that VANOC's contract for the Olympic Village includes occupation for the Paralympic games as well? If that is the case, it is going to be a little while before owners are going to take possession of their spaces. I am also assuming that there will be a fair bit of deficiency construction work to be done after the athletes leave, so it could be safe to say that Millennium/Rennie (or whoever is doing the sales/marketing by then) will be waiting until at least after the Games end before they are marketing this again. That is still 14-16 months away. That is a long time. We are really only 4 months into this disaster in Canada and look how much has changed. My feeling is that by the time sales start happening again, while prices may not be at their peak, they should be at decent levels, surely enough to break even. And if that is not the case and the city takes a little bit of a bath, perhaps it serves them right selling the land for tens of millions above market.

Also, politics aside, it is completely irresponsible of the media to be throwing this $1 billion figure out there. It's $800 odd million, $200 million is NOT a drop in the bucket. Secondly, being responsible or "being on the hook" for whatever figure is different than losing that much money. And I don't care how you argue (especially Ravman) the way this is being displayed to the public is terrible. They see that huge figure and assume the city is losing that much money. Of course, they should know better, but they don't. The optics are terrible.

[mr.x]

Originally Posted by awvan

Also, politics aside, it is completely irresponsible of the media to be throwing this $1 billion figure out there. It's $800 odd million, $200 million is NOT a drop in the bucket. Secondly, being responsible or "being on the hook" for whatever figure is different than losing that much money. And I don't care how you argue (especially Ravman) the way this is being displayed to the public is terrible. They see that huge figure and assume the city is losing that much money. Of course, they should know better, but they don't. The optics are terrible.

Agreed....people like Ravman aren't able to distinguish and analyze for themselves. They eat everything the media (and in this case, the NDP as well) feeds them.

It's their campaign of ignorance and misinformation.

[mrjauk]

Originally Posted by TwoFace

^^^^^^^^^^
Isn’t this a tread highjack?
Doesn’t this never-ending market analysis and opinion argument belong on some other forum.

Sorry about that. I have been appropriately admonished. However, there does seem to be a consensus that the final financial burden of the Vancouver taxpayer will ultimately be determined by just how far real estate prices fall. I just think that the worst-case scenario estimates being thrown around by many experts are much too sanguine given what has--and will-occur in the world economy.