As predicted: it's happenning... Condos at 40% off

[Cosmo]

Buckle up folks... the real ride is about to begin.

Omni Group is going to offer their condos at 20-40% off asking price (getting a jump on the huge glut about to devastate the Vancouver market this spring).

2009 is the start of some real ugly times in Lower Mainland Real Estate.

Watch for more developers to start undercutting this offering.

http://www.cbc.ca/canada/british-columbia/story/2009/01/14/bc-onni-condo-sale.html

On sale: $350M of real estate in Lower Mainland
Wednesday, January 14, 2009

A Vancouver real estate developer is making an unprecedented move to offer a liquidation sale of $350 million worth of its condominiums throughout the Lower Mainland.

The marketing strategy by Onni Group of Companies is aimed at selling off hundreds of condos in its inventory.

About 375 unsold condominiums in cities such as Richmond and New Westminster will be offered at 20 to 40 per cent off, a real estate insider told CBC News.

It is not known whether the big discounts are based on prices when the condos were completed or current market values. Onni was to hold a media event Thursday to announce details.

Onni's marketing tool might nudge some reluctant homebuyers off the fence, said Tim Silk, an assistant professor at the University of British Columbia's business school.

"If you see the units being priced below comparable units, then you might see people jump in," Silk said Wednesday. "But there's still that hesitation of, 'Have we reached bottom?' "

Home prices in the Vancouver real estate market dropped almost 11 per cent between December 2007 and the end of 2008, according to a special price index updated earlier this month by the Real Estate Board of Greater Vancouver.

And the number of homes sold in 2008 fell more than 35 per cent from 2007 sales of more than 38,000 homes.

=================

BTW, the answer to the question 'have we reached bottom yet' is... Not by a long shot!

 

[BJhunter]

I agree! the economy's not getting better; as long as there's talk of companies downsizing, esp. at the corporate level, no one's buying real estate even at these interest rates, plus car sales are the lowest in a decade or so, the prices will keep on dropping, which is good for buyers. Obviously not if someone bought last year, but hey, who's got the crystal ball???

 

[InTheBum]

Great News!!!

This is great news for me...now I just need the stock market to recover before the real estate market does...and I will be laughing!!!

 

[InTheBum]

Great news for your mom too....you will finally move out at age 40!!

Nah, gonna move in with my Granny, you know...change her diapers, feed her apple sauce and creame corn, and of course those board games! Sound familiar HH????

 

[mclovin76]

Next to get a big hit wil be detached homes since they froze assesments this year, the dive will come right after the olympics as last years assesments read 550 on an average for detached homes they were selling for 600 plus now this years assesments are the same as 2008 so that taxes are paid and the cities budgets dont get fucked up but they are realistically 10 percent down and plunging. By the end of the olympics you will b looking at 25 - 30 percent decrease from their highs.

 

[mclovin76]

latest global studies found industrialized nations housing prices are inflated and they are xpected to come down incrisingly and drastically. They are saying a 550000 dollar home should b in the 150 range .

 

[ChineseDude]

latest global studies found industrialized nations housing prices are inflated and they are xpected to come down incrisingly and drastically. They are saying a 550000 dollar home should b in the 150 range .

Thats what they say, there will always be a fresh supply of fresh off boaters from India, China or Iran seeking a better place in Canada. The quality of life in Vancouver is just so much better than the old world. Prices gonna drop right now, and after Olympics, then gonna rise again. time to stack chips.

 

[mclovin76]

they are trying to scam people because they froze the assesments this year, they read the same as last years assesmnets if anyone doesnt know this.The bottom will hit when the new assesments come in next year after the olympics, shit will b dirt cheap. All those condo prices are what theya re asking for, im sure you can low ball them if you wanted too but who the hell does right now? Dont buy unless you get it for half as much as its peak price, so if last january the price of a home was 650000 in new west dont buy it for anymore then 325000, but they wont sell it to you that cheap so dont buy at all.

 

[TheGuy]

There are some interesting problems here. During the last building slowdown developers like BOSA headed to Souther California and built huge developments down there. Others did similar.

This time there is nowhere to go. Developers are going to dump inventories to get the cash needed to stay in business.

I think a 40-50% drop from the high is about right.

 

[jimbo2006]

During the last building slowdown developers like BOSA headed to Souther California and built huge developments down there. Others did similar.

This time there is nowhere to go. Developers are going to dump inventories to get the cash needed to stay in business.

With the new stimulus package, maybe the Bosa's and Onni's can come renovate your kitchen and bathroom as a package deal for $10K

 

[jimbo2006]

I personally think the maximum anyone should pay is between 3 and 4 X median income which would mean median prices for single family homes at between $150,000--200,000

Reddog, you might be able to find those kind of prices in Mission if you look hard enough......or..... are you waiting for West Van and Westside to eventually reach that level?

I'll be your realtor and I'll go to work for ya, just fork over $25K first as a deposit and I'll put it in the trust account. Soon as I find something in your price range in Shaughnessy, I'll give you a ring ok?

 

[FunSugarDaddy]

My take on investment real estate

Ask FunSugarDaddy...apparently he's got the right answers. Where are ya buddy???

The right answer, is that a reasonable price to pay for a house, condo, townhouse etc. is about a 6-8% cap rate, which is essentially net income excluding finance charges. So if a property rents out for 1400/mo and there's 400 a month in expenses for insurance, property taxes, strata fees whatever, then the net annual rent is about $12,000.

A reasonable price range is 12,000/.08 = $150,000 $12,000/.06 = 200,000

Unfortunately though, the market doesn't always co-operate with this formula, which has certainly been the case here for a number of years, because formula or not, supply and demand ultimately rule.

But if someone asked me about what they should pay for investment property ignoring the possibilty of any capital gains, this would be about the range I would suggest.

FWIW, I have a client who's a VP of a fairly large company and he only invests in commercial real estate where the cap rate is close to 10% or higher.

 

[FunSugarDaddy]

Misleading

Buckle up folks... the real ride is about to begin.

Omni Group is going to offer their condos at 20-40% off asking price (getting a jump on the huge glut about to devastate the Vancouver market this spring).

2009 is the start of some real ugly times in Lower Mainland Real Estate.

Watch for more developers to start undercutting this offering.

http://www.cbc.ca/canada/british-columbia/story/2009/01/14/bc-onni-condo-sale.html

On sale: $350M of real estate in Lower Mainland
Wednesday, January 14, 2009

A Vancouver real estate developer is making an unprecedented move to offer a liquidation sale of $350 million worth of its condominiums throughout the Lower Mainland.

The marketing strategy by Onni Group of Companies is aimed at selling off hundreds of condos in its inventory.

About 375 unsold condominiums in cities such as Richmond and New Westminster will be offered at 20 to 40 per cent off, a real estate insider told CBC News.

It is not known whether the big discounts are based on prices when the condos were completed or current market values. Onni was to hold a media event Thursday to announce details.

Onni's marketing tool might nudge some reluctant homebuyers off the fence, said Tim Silk, an assistant professor at the University of British Columbia's business school.

"If you see the units being priced below comparable units, then you might see people jump in," Silk said Wednesday. "But there's still that hesitation of, 'Have we reached bottom?' "

Home prices in the Vancouver real estate market dropped almost 11 per cent between December 2007 and the end of 2008, according to a special price index updated earlier this month by the Real Estate Board of Greater Vancouver.

And the number of homes sold in 2008 fell more than 35 per cent from 2007 sales of more than 38,000 homes.

=================

BTW, the answer to the question 'have we reached bottom yet' is... Not by a long shot!

This whole thing is very misleading. What exactly is market price, these are new units so it is the asking price they were hoping to get? All they've done is lower it that's not the same as a market drop. Secondly I had one client e-mail me a link and Omni was saying they were having auctions.

Well auctions are auctions, that means by definition they don't know what the prices are going to be other than perhaps a reserve price they've set and people actually bid on the price.

However, it appears in this case auctions are really liquidation sales.

And a 40% drop in the market, is really them setting their prices lower than they expected.

So this is primarly marketing hype, not necessarly an accurate reflection of the market in it's entirety. There might be some great deals to be had, but good deals or not, this is marketing hype plain and simple.

http://www.vancouver-real-estate-di.../breaking-news-condo-liquidation-sale-by.html

 

[Horse99]

"selling below market price"

I heard this shill on the radio ad.....market price IS what it's selling for at that time....fracking liars....oh wait, that's marketing