* CMHC Insured
* Non-CMHC Insured

People with healthy down payments frequently ask why they’d ever want to pay the CMHC premium if they can simply get a conventional mortgage.

Let’s take a $500,000 loan at 75% LTV, for example, on a 5-unit building. CMHC’s premium is 2.25% for a 25-year amortization. That’s $11,250—not exactly chicken feed.

But here’s the thing. Lenders consider multi-unit financing to be much safer when it’s insured. That means there’s less of a risk premium and borrowers get better rates on CMHC-backed deals. “There is a 200 basis point difference between that and a conventional loan,” First National’s, Jeremy Wedgebury, told BrokerNews.ca.

What many don’t realize is that this 2% rate differential translates into big dollars. On that same $500,000 mortgage, a 2% lower 5-year rate would save almost $34,000 after accounting for the $11,250 premium and CMHC’s $750 application fee. Moreover, the property cash flows better because the payment is 16% lower.

In sum, with multi-unit apartments, “pay to save” is often a good motto.

http://www.canadianmortgagetrends.com/canadian_mortgage_trends/2009/07/cmhc-insured-multi-residential-financing.html

reviewed by MOISHE ALEXANDER, CFC Canadian Funding Corp CEO

Here’s the latest News Release from the Calgary Real Estate Board…

Calgary, July 2, 2009 – The number of single family homes and condos sold in June in Calgary metro are both up from the same time a year ago.
MLS® sales activity of single family Calgary metro homes was 1,837 in the month of June 2009, showing an increase of 16 per cent from 1,584 sales in May 2009, according to figures released by the Calgary Real Estate Board (CREB®).
This is the sixth consecutive month home sales have increased in Calgary Metro. This was an increase of 28 per cent from June 2008, when single family home sales were 1,439. The number of condominium sales for the month of June 2009 was 738, an increase of 13 per cent from the 653 condominium transactions recorded in May 2009, and an increase of 33 per cent from June 2008, when 556 condominiums changed hands.

“This is the third consecutive month we are seeing our inventory return to a balanced market,” says Bonnie Wegerich, President of the Calgary Real Estate Board. “Our inventory turnover for single family homes and condos in metro Calgary is now just over two months. This is a remarkable shift from the nearly 11 months of inventory we saw in January of this year.”
“A rise in demand along with fewer listings has helped bring supply in balance with demand,” says Wegerich. “Affordable prices, low interest rates and pent-up demand continue to fuel this gradual rebound. Should this trend continue, I think we can confidently say the bottom of the market has come and gone before many buyers had a chance to notice.”

The average price of a single family Calgary metro home in June 2009 was $447,142, showing an increase of 2 per cent from May 2009, when the average price was $436,427, and showing a decrease of 6 per cent from June 2008, when the average price was $473,774. The average price of a Calgary metro condominium was $285,595 showing a 4 per cent increase from May 2009, when the average price was $275,212 and a decrease of 9 per cent over last year, when the average price was $315,042. Average price information can be useful in establishing trends over time, but does not indicate actual prices in centres comprised of widely divergent neighbourhoods, or account for price differentials between geographical areas.

“It is not the buyer’s market we saw in January of this year. As our inventory trends lower, choice and selection will decrease. Nonetheless, there are still great opportunities out there for buyers,” says Wegerich.

“The good news is pricing remains relatively affordable,” says Wegerich. “We are not liable to see significant price gains in 2009, but more likely a gradual and steady improvement in home values.”

Single family Calgary metro new listings added for the month of June totaled 2,244, no change from May 2009 when 2,235 new listings were added, but showing a decrease of 19 per cent from June 2008, when 2,787 new listings came to the market. Calgary metro condominium new listings added in June 2009 were 927, down 7 per cent from May 2009, when the MLS® saw 998 condo listings coming to the market. This is a decrease of 25 per cent from June 2008, when condominium listings were 1,234.

The median price of a single family Calgary metro home in June 2009 was $399,000, showing an increase of 2 per cent from May 2009, when the median price was $390,000, and down 2 per cent from June 2008, when the median price was $408,000. The median price of a condominium in June 2009 was $265,500, up 4 per cent from May 2009, when the median was $255,000, and down 6 per cent from June 2008, when the median price was $282,000. All Calgary metro MLS® statistics include properties listed and sold only within Calgary’s city limits. The median price is the price that is midway between the least expensive and most expensive home sold in an area during a given period of time. During that time, half the buyers bought homes that cost more than the median price and half bought homes for less than the median price.

“We are encouraged by this upward trend in sales but there are still some economic fundamentals needed before we will see a full recovery in the housing market,” added Wegerich. “A rebound in employment and oil prices will have a significant impact on the housing market in Calgary-we expect this won’t fully take effect until the beginning of 2010.”

http://yourhomeincalgary.blogspot.com/2009/07/its-july-2009-and-weather-is-fine-so-is.html

viewed by Moishe Alexander, canadian funding corp CEO

“Given the grim shape that Canada’s real estate market was in this past winter, the turnaround we have witnessed in the second quarter is really quite remarkable. We believe this improvement represents a sustainable change across the country. While seasonally weaker conditions are to be expected in the fall, the plucky Canadian real estate market is stabilizing and a healthy level of activity is forecast for the second half of 2009,” said Phil Soper, president and chief executive officer, Royal LePage Real Estate Services.

During the second quarter, average house prices across most Canadian markets began to appreciate, recovering from the lows experienced during the winter months. Average national prices remain slightly behind those posted during the same period in 2008. Of the housing types surveyed, the price of detached bungalows declined to $327,964 (-3.5 per cent), two storey property prices decreased to $392,378 (-3.7 per cent), and standard condominiums price points fell slightly to $237,112 (-3.8 per cent), year-over-year.

Soper observed, “With our industry’s busiest quarter behind us, we feel comfortable revising our 2009 forecast to the positive. When the anticipated market decline struck last winter, it was with greater speed and intensity than predicted, but the strength of the rebound was equally surprising. If general economic conditions continue to improve, as we expect they will, 2009 will be characterized as a period of moderate housing market correction after several years of above average price growth.”

The 2009 national average house price is forecast to decline marginally by 2.0 percent, to $297,500 by end of year and unit sales are projected to fall slightly by 1.0 percent to 430,000.

“Improved affordability, driven by flat or lower home prices and inexpensive mortgage financing, has been the principle catalyst in this recovery. Pent up demand is also a factor in the lift we see in the second quarter numbers. For six months straddling the year’s beginning, buyers stayed away from the market in an understandable, emotional reaction to very unsettled global economic conditions. Canadians appear to be stepping beyond these fears and are once again moving onto and up the home ownership ladder,” stated Soper.

In early 2009, the precipitous drop in unit sales remains the most dramatic indicator of the recession’s impact on Canada’s real estate market. With spring, consumers appeared ready to believe the worst was behind them and returned to the market in force, driving increased activity across each housing type. Couple this with historically low interest rates and leveling unemployment, Canada’s residential real estate market got back on track during the quarter.

Undergoing an inevitable cyclical correction, price adjustments can be seen with marked variances across Canada’s provinces. As expected, British Columbia and Alberta posted the most significant price modifications, as home values in those markets retreated in the wake of several mid-decade years of unsustainable price inflation, and have now evolved to a more balanced state. Prices appear to have stabilized and it is expected that these regions will continue to see improvements into 2010. In particular, the impact of lower home prices has improved affordability to the point that people are buying homes again on the West Coast, where sales activity has increased substantially.

Alternatively in Atlantic Canada, homes continue to appreciate due to strong local economies, which have helped to shelter the region somewhat from the turbulence witnessed in other provinces.

As well, the region’s generally moderate home prices have helped keep demand strong. Newfoundland, in particular, stands out as a region that continues to see significant home price appreciation, as supply cannot keep up with the demand driven by vibrant and growing industries such as those in the province’s oil and gas sector.

Meanwhile, home prices in Toronto declined slightly in the second quarter, reflecting the national average trend. In the early spring, it was first-time buyers who triggered the increased activity levels, now those looking to move up are also active in the market. Similar to the situation in other large cities in central Canada, the most desirable neighbourhoods experienced supply shortages, which put upward pressure on prices.

“Looking ahead to the second half of 2009, year-over-year price comparisons will likely appear increasingly more favourable. It is important to remember that the baseline for the latter half of 2008 was unusually low, particularly in the fourth quarter when the full impact of the global financial crisis was felt. Our expectation is that most Canadian regions will experience stable housing prices through into the spring of 2010,” concluded Soper.

REGIONAL MARKET SUMMARIES

Halifax

In Halifax, a stable economy has contributed to a healthy real estate market where average house prices increased modestly despite a slight dip in sales activity. The market is beginning to pick up following a slow first quarter. Pent up demand will see a return to a more active market in the last half of the 2009 with the anticipation of a slight boost in sales activity and average house prices growing at a leisurely pace.

Montreal

The housing market in Montreal experienced a solid second quarter, with average house prices for most property types expected to increase for the remainder of 2009. Higher inventory levels resulted in balanced market conditions seeing the number of new listings equal to the number of sales. Low interest and unemployment rates will help maintain the strength of the real estate market through to the end of the year.

Ottawa

Ottawa continues to remain a steady market for residential real estate, with sales activity in the second quarter coming out strong from a slow first quarter. Ranked number two among Canada’s large cities for affordable real estate and coupled with low interest rates, all types of buyers were drawn to the market. House prices are expected to remain stable throughout the remainder of year with numbers slightly higher than anticipated.

Toronto

In Toronto, the real estate market witnessed significant second quarter gains. The return of consumer confidence and an upswing in spring market activity brought house prices and unit sales down as buyers emerged to take advantage of affordable properties and low lending rates.

As the market begins its transition from a buyer’s market to a balanced market, with indications of a seller’s market arising, it’s anticipated that the market will stabilize by the end of year.

Winnipeg

Winnipeg’s real estate market has remained relatively resilient in the second quarter with average house prices in key housing segments increasing from the first quarter of 2009. Real estate in

Winnipeg is modestly priced when compared to other cities in Canada, creating ideal conditions for buyers in the province. Looking ahead, average house prices are anticipated to stabilize for the remainder of the year.

Regina

Regina’s real estate market started on the road to recovery in the second quarter of 2009 and is expected to further improve through the remainder of the year. An increase in unit sales helped diminish the city’s high inventory levels as buyers are beginning to initiate deals. Recovering manufacturing and resource sectors, new construction activity in Regina, and low interest rates have also helped to improve buyer confidence.

Calgary

With the economic downturn and the oil and gas industry struggling, the housing market in Calgary has been on the decline since 2008, after many years of price inflation at the beginning of the decade. Quarter one of 2009 revealed some signs of price increases and stabilization in certain areas in Calgary, but the second quarter reveals fluctuations in the market. These price fluctuations are occurring across Calgary in all housing types with the market forecast predicting price reductions for the remainder of 2009.

Edmonton

Housing market conditions in Edmonton were characterized by lower inventory levels and moderate house price increases. Buyer demand was strong during the second quarter as most buyers felt a sense of urgency to capitalize on the recent market conditions. This has led to a slight tightening in Edmonton’s housing market with appreciation in average house prices expected for the last half of

2009.

Vancouver

Vancouver’s real estate market stabilized in the second quarter of 2009 following a price correction that started last fall moving towards a balance between supply and demand. Properties priced at, or below, market value are generating multiple offers from buyers. Average house prices throughout the last half of the year are expected to inch upwards, but increases will likely be in the low single digits.

Royal LePage’s quarterly House Price Survey shows the following annual change of prices for key housing segments in select national markets:

The Royal LePage Survey of Canadian House Prices is the largest, most comprehensive study of its kind in Canada, with information on seven types of housing in over 250 neighbourhoods from coast to coast. This release references an abbreviated version of the survey, which highlights house price trends for the three most common types of housing in Canada in 80 communities across the country.

A complete database of past and present surveys is available on the Royal LePage Web site at www.royallepage.ca. Current figures will be updated following the complete tabulation of the data for the second quarter. A printable version of the second quarter 2009 survey will be available online on August 7, 2009.

Housing values in the Royal LePage Survey are Royal LePage opinions of fair market value in each location, based on local data and market knowledge provided by Royal LePage residential real estate experts. Historical data is available for some areas back to the early 1970s.

While housing starts ticked up slightly in March on a national basis, builders in B.C. started work on 2,517 new homes in the first three months compared with 8,532 in 2008.

“Developers and homebuilders in B.C. are starting fewer new homes in response to a well-supplied resale market and weaker housing demand,” Carol Frketich, Canada Mortgage and Housing’s regional economist for B.C., said in a news release.

The declines in starts ranged from almost 93 per cent in Kelowna, where builders started on 72 new homes compared with 985 in the first quarter last year, to 31 per cent in Nanaimo, where builders started on 170 new homes vs. 247 in the same months a year ago.

And the pace of new-housing construction slipped in March to a pace that would see builders across urban B.C. start work on 10,000 units in 2009, compared with a pace of 12,000 units seen in February.

In the Lower Mainland, Metro Vancouver saw starts fall by two-thirds, 1,829 units compared with 5,131 in the first quarter of 2008.

Across Metro Vancouver, West Vancouver saw the steepest drop in the first quarter at 92 per cent, with the Tri-Cities and Surrey not far behind at 91 per cent.

Delta was the only municipality to see an increase in housing starts. Builders there started work on 81 new housing units, an increase of 55 per cent in the first quarter from a year ago.

“The slowing housing starts trend that began in the last part of 2008 will continue,” Robyn Adamache, Canada Mortgage and Housing’s senior analyst for Metro Vancouver, said in a news release, also citing well-supplied resale markets and a growing inventory of unsold new homes as the reasons builders are holding off on new development.

Across Canada, home construction rose unexpectedly in March, led by Ontario and Quebec, Canada Mortgage and Housing Corporation said Wednesday.

There were 154,700 housing starts on an annualized basis during the month, up from a revised 136,100 units in February, the government agency said.

Many economists had expected housing starts to dip to 130,000 units in March.

“Higher multiple starts in Ontario and Quebec were the main contributors to the rise in new construction activity in March,” said Bob Dugan, CMHC’s chief economist. “While the multiples segment experienced the largest increase, the overall boost in starts was broad based, encompassing the singles segment as well.”

http://housing-analysis.blogspot.com/2009/04/from-vancouver-sun-housing-starts.html

reviewed by Moishe Alexander, CFC CEO

Royal LePage survey – Vancouver’s real estate market is still witnessing a course correction, as prices continued to decrease in the first quarter of 2009, according to Royal LePage’s quarterly House Price Survey. The average price for homes on Vancouver’s West side and East side, North Vancouver and West Vancouver saw an average year-over-year decline of 12%.

West Vancouver home prices witnessed the largest change, seeing an overall decline of 16.3% year-over-year across key housing types surveyed, however prices stabilized in the first quarter of 2009. Average prices for bungalows dropped 16.2% year-over-year to $880,000, standard two-storey homes dropped 17% to $930,000, and standard condominium prices declined 15.8% to $400,000.

“Prices are definitely down from a year ago,” said Bill Binnie, President of Royal LePage Northshore in North Vancouver. “But prices are starting to stabilize in the middle price range.” Binnie said first time home buyers are accounting for the bulk of sales activity in Greater Vancouver, although home sales are beginning to pick up in the high-end housing market.

In North Vancouver, prices for standard two-storey homes are stabilizing, with the average price of $660,000 unchanged between the fourth quarter of 2008 and first quarter of this year. Standard condominium prices have also stabilized, up 3.6% from last quarter to $290,000. However, prices for key housing types in North Vancouver are down a year-over-year average of 14.2%.

Homes priced according to recent sales in desirable areas are selling quickly, Binnie said. In the first quarter of 2009, the West side of Vancouver saw an increasing number of million dollar home sales. “This increase in activity gives us a parameter we can use to analyze the market,” Binnie said. “Now we have a sense of what people are willing to pay. In January, there were very few sales – so we didn’t have a frame of reference.”

Binnie believes the time is right for buyers looking to move up into a more expensive property. “If you’re moving up, I’ve got great news for you. The spread between the property you want to buy today and your current home is a lot smaller than it would have been a year ago. Secondly it’s going to cost you a lot less to carry a mortgage because of the low interest rates.”

Meanwhile, Victoria home values proved to be somewhat more resilient, with an average year-over-year depreciation of 4.6%. Bungalows in the capital city bucked the trend by increasing both annually and within the first quarter of 2009. Overall, Victoria homes in key segments saw average first quarter price gains of 0.5%.

Carol Geurts, Managing Broker for Royal LePage Coast Capital Realty, believes Victoria is weathering the economic storm better than other parts of the country. “We still have a vibrant local housing market that’s better than in most other cities,” she said. “We’re seeing a lot more activity than last fall. There’s optimism in the market, and that translates to transactions.”

Inventory in Victoria is up, particularly under the $500,000 price point. “The supply of inventory has continued its upward climb early this year, so buyers will have lots of choice this spring. Low interest rates and the departure of winter weather mean a return of consumer confidence.”

While prices in other housing segments have increased this year, Geurts has noticed a decrease in condominium prices. “An interesting trend is that many new condo units are being reconfigured to target first time buyers. We’re also seeing things like cash bonuses and auctions for buyers, so sellers are getting creative.”

Victoria is still seeing multiple offers for homes, which is unusual in a buyer’s market, Geurts said.

Royal LePage’s quarterly House Price Survey shows the following annual change of prices for key housing segments in select Vancouver markets:

————————
National

Consistent with current economic trends, Canadian residential real estate prices declined during the first quarter, according to a quarterly House Price Survey released today by Royal LePage Real Estate Services Ltd. As the market correction unfolds, year-over-year home prices were lower, as was expected. Increased buyer activity at the end of March suggests that spring will bring its typical increase in unit sales activity as buyers target summer moves.

Regional disparities in quarterly housing prices showed markets in Atlantic Canada outperforming other areas of the country as hardy local economies spurred house price growth across the three housing types surveyed.

Markets in central Quebec and eastern Ontario held steady with areas of modest growth and limited declines. In the balance of Ontario, and in particular the Greater Toronto Area, prices retreated from the record levels set in the first quarter of 2008, with most trading areas showing mid to low single digit declines. With the exception of Manitoba, western provinces saw significant changes as the rapid run-up in prices experienced earlier in the decade gave way to double-digit declines in most regions. As market corrections in B.C. and Alberta were underway well ahead of the full impact of the current economic crisis, it is suggested that these areas may be first in Canada to stabilize.

“We expected a sharper decline in house prices across Canadian markets during the first quarter,” said Phil Soper, president and chief executive officer, Royal LePage Real Estate Services Ltd. With economic hardship dominating our global consciousness, it was predictable that dwindling consumer confidence would continue to drive prices lower. But markets were relatively resilient during the period. Soper continued, “Canadians in most regions should not expect the prices of their homes to begin appreciating again until the overall economy begins to stabilize, likely in the first half of 2010.”

The report shows that the average price of a two storey home in Canada declined 6.5% to $379,636 compared to the same quarter last year. In Vancouver, the average price declined 12.6% year-over-year to $828,750 while in St. John’s prices climbed 15.6% to $265,000. With consumer confidence bolstered following investments by Vale Inco NL and Hebron, Soper commented: “Using house price change as a gauge, Newfoundland is Canada’s sole remaining seller’s market.”

Moderate growth occurred for detached bungalows in Montreal (up 2%) and Ottawa (up 1.9%), while Toronto saw a decline of 6.3% compared to the same period in 2008. Prices in the prairies and in western cities declined with the average price for a detached bungalow down 8.1% in Saskatoon and 11.2% in Edmonton.

The nation’s condominium market waned with the average price of a standard unit dropping 3.4% to $232,877 compared to $241,152 in the first quarter of 2008. Calgary saw a 12.8% drop in average price of condominiums, but declines were less severe in Vancouver (down 5.3%) and in Toronto (down 3.1%). “Condominiums are generally the most affordable housing option, especially in urban centres,” Soper said. “With record low lending rates and new government initiatives aimed at encouraging first-time buyers to enter the market, ownership at the entry level is becoming increasingly accessible.”

Noting recent global efforts to address the economic crisis, including the coordinated response from the world’s leading economies coming out of the G20 meeting and stimulus package announcements at home and in the United States, as well as what appears to be the beginning of equity market recovery, Soper commented, “These glimmers of economic hope are coinciding with a time of year that typically brings renewed interest in the housing market.

Traditional spring trends – increases in open house attendance, calls to brokers and viewing appointments – tell us that potential buyers are stepping off the sidelines and an increase in purchase activity is likely to follow.”

As described by Moishe Alexander, CFC CEO

Balancing that, average prices of residential properties sold here rose 8.7 per cent from the same period last year, according to statistics released Thursday by the Canadian Real Estate Association (CREA).

National sales and price declines were smaller than expected and seem to reflect a stronger-than-expected rebound in real estate in B.C. and Ontario, CREA said.

“It’s marginally good news,” said Dale Ripplinger, the Regina realtor who is president of CREA. “It does show that we’re moving in the right direction.”

Compiled from national Multiple Listing Service (MLS) data, the statistics show the “dollar volume” of residential property sales in Canada’s top 25 metropolitan areas in the first four months of this year fell by 25.2 per cent from 2008. The actual number of sales dipped 20.2 per cent and average prices dropped by 6.3 per cent.

Locally, the total “dollar volume” of sales fell by 15.3 per cent and the number of sales dropped by 22 per cent from 2008.

But for Regina, that’s not as bad it as it seems because 2007 and 2008 were extraordinarily busy years in the Regina residential market, where traditionally modest prices and sales volumes were suddenly pushed up, said Gord Archibald, executive officer of the Association of Regina Realtors.

If you scissored out 2007 and 2008, then prices and sales volumes are still above the long-term trend that goes back a decade, he added.

By April, the average price of residential properties changing hands in Regina was $247,907, virtually the same as a year ago. And that’s good news for potential home-buyers because that suggests relatively steady demand — as opposed to rapidly rising demand that provoked bidding wars over the last two years.

Also, the refusal of the average prices of local residential properties to fall — contrary to gloomy predictions by outsiders — means people who already own homes generally see their value holding steady.

Reinforcing this is another statistic that shows a rise in the ratio of residential properties for sale compared with properties that actually sell.

Recently, this ratio was around 1.5:1. Archibald said it has risen to the traditional ratio of about 2:1, meaning there is more choice for potential buyers, who therefore should feel less pressure to make an offer or bid prices up.

Looking ahead, CREA predict 2009 will see sales of 8,700 residential units in Saskatchewan, compared with 10,203 last year.

In 2010, it predicts 9,100 units will be sold in Saskatchewan at an average price of $218,400. That would be down from this year’s forecast average price ($220,900) and last year’s ($224,586).

Nationally, CREA predicts the number of homes sold next year will rise by 7.2 per cent, with average prices rising by 1.7 per cent to $292,600.

http://www.leaderpost.com/Business/Real+estate+sales+decline+Regina/1597400/story.html

The Corvallis Gazette Times reports from Oregon “Morrie and Colleen Slay didn’t want to sell their house. But after they both got laid off, the Albany residents fell behind on their payments. Faced with foreclosure, they discussed their options with a counselor and decided to put their modest two-bedroom on the market, pay off their mortgage and walk away. With real estate values falling, they owed more than the house was currently worth, so they opted to pursue a short sale. The Slays had a willing buyer and an experienced real estate agent who helped them file all the required documents. But every time they thought the sale might close, the lender said there was a problem with the paperwork and closed their account.”

“Last week, after months of frustration, their buyer pulled out of the deal. ‘We’ve got to start all over,’ Morrie Slay said.”

“Anna Balkema, the Willamette Neighborhood Housing Services program’s lone full-time counselor, said she’s seen very few of the subprime or fraudulent loans that have hogged the headlines. Most of the homeowners she works with have conventional fixed mortgages with reasonable interest rates.”

“So what’s pushing them into foreclosure? In most cases, it’s a layoff or a major medical expense. ‘The most typical scenario we have is one or double job losses,’ Balkema said. ‘I’m not seeing any 10 or 11 percent (interest rates). We’ve had people in foreclosure with a 5.25 — they lost their job and couldn’t make the payment.’”

“Wells Fargo, one of the nation’s largest mortgage lenders, is an enthusiastic supporter of the Making Home Affordable initiative, according to Judith Olsen, a community development officer in the bank’s Portland office. ‘The foreclosure and resale process is expensive — it’s expensive for the bank, but it’s also expensive for communities. We really don’t want the houses back, trust me. We’re not in the real estate business, we’re in the lending business,’ Olsen said.”

“Morrie Slay wishes his lender had the same attitude. If the short sale had gone through, the mortgage company would have lost about $12,000. But compared to going through foreclosure, that could end up looking like a bargain. ‘They’re still going to end up losing. It’s going to take time, it’s going to take money — I just don’t understand,’ Slay said.”

“‘It’s just very frustrating for both of us,’ added his wife, Colleen. ‘If you know anybody that wants a house …’”

The Oregonian “Allan Smith doesn’t know the stories behind the foreclosed homes he sells each weekday morning on the Multnomah County Courthouse steps. His job is to sell houses, not ponder why. Besides, these days everyone he encounters has some sort of financial problem or complaint, even the banks doing the foreclosing and the speculators hoping to find a deal in someone else’s suffering.”

“‘You’d think, with the financial crisis, things would be hopping,’ he said. ‘But if I sell three or four, that’s a solid week. We’re frozen here’”

“In the last quarter of 2008, homeowners defaulted on 1,054 loans in the Portland region. That’s more than half the total for all of 2007 and almost as many as in all of 2006. Several hundred homes come up for sale each week in Multnomah County. Yet most of Smith’s auctions get postponed as antsy investors decline to bid on artificially overpriced houses or banks give borrowers more time to make payments on loans they never should have taken out.”

“‘The banks and the investors are both in the business of making money,’ Smith says. ‘Buying a house you’re not going to be able to sell for a year or two isn’t a great way to do that.’”

“Affordable-housing advocates have protested a few auctions this year, arguing that banks and lax regulators are responsible for the rash of people losing their homes. Smith’s work is fairly grisly when you ponder it. Each week, he provides play by play for dozens of financial apocalypses.”

“That doesn’t depress him: ‘This is the system,’ he says. ‘You buy a house, you promise to pay it off.’”

“Tom Moyer dug a hole deep under downtown Portland last year, betting that buyers, lenders and renters wanted 32 stories of luxury real estate. He found renters to fill the offices and shops. But Moyer — a 90-year-old self-made millionaire, owner of 9 million square feet of real estate and builder of the Fox Tower — couldn’t get a loan to get out of the ground.”

“Moyer’s four decades of empire building smacked into a wreck of a recession April 10, when he halted construction on his $170 million Park Avenue West tower. That morning, Moyer paid 100 workers in the pit spiked with rebar. On Wednesday, the final three workers climbed out of the hole for the last time.”

“Park Avenue West was supposed to show off the city’s rising wealth. It was to be Portland’s fourth-tallest building at the city’s center, passed every seven minutes by a MAX train. The condos, offices and retail shops were designed to set new standards of opulence for a town wrapped in fleece. ‘This will be a sentinel to downtown,’ Lloyd Lindley, former chairman of the city’s design commission, declared in 2007.”

“Instead, the pit shows off the depths of Oregon’s economic troubles, No. 2 in the country for unemployment. For now, the economy makes the pit a civic eyesore. Plywood, barbed wire and Jersey barriers provide their own kind of sentinel. The top concrete parking floor — 40 feet below ground — stops in midspan. One column pokes up wearing a coat of concrete, then the next is naked rebar.”

“The site is framed as a snapshot of the era when easy credit and booming real estate busted. Even for Tom Moyer.”

“The crews working for Mark Sorensen’s company, R2M2 Rebar & Stressing, made their money threading rebar and wires together for the concrete column that would run up the center of the building. The company helped build Intel plants in Hillsboro, most of the Pearl District’s condos, the aerial tram and all seven buildings in the South Waterfront District. But the housing market collapse and credit crisis hit R2M2 as well.”

“Work on the core was picking up April 10 when the call went out. ‘It was just becoming a full-time deal,’ said Stan Campbell, Sorensen’s general superintendent. ‘Then it ended.’”

“Rob Frederiksen was deep in the pit when he got the call over his radio about 2 p.m.: ‘Tell everyone to grab their tools and come up out of the hole.’ I got on the job and I thought, ‘I’m pretty lucky to be here,’ he said. ‘I thought, ‘I’m here for another 18 months.’ Then ka-pow.’”

“Oregon lost 20 percent of its construction jobs between April 2008 and April 2009, far more than the national average of 13 percent. The state’s construction industry has shed 35,000 jobs since the August 2007 peak. The job cuts frustrate workers, but Frederiksen wondered: ‘Who do you blame? You think Tom Moyer, he owns half of Portland, it seems like. It just goes to show you it doesn’t matter how much pull you got or how much money you got. Everyone’s susceptible.’”

The Idaho Statesman. “The declining Treasure Valley housing market is either nearing bottom or nearing a cliff, depending on which statistic you look at. Pending sales – contracts that have been signed but not closed – are way up: 27 percent in Ada County and 39 percent in Canyon County, according to Jere Webb, an agent with Coldwell Banker who publishes…monthly statistics for real estate professionals.”

“Pending sales usually close within 45 days, so Webb expects the number of homes sold to rise significantly in the next couple months. Of course, there’s a catch. ‘A number of these could be short sales and bank-owned properties which take longer to close, and are less definite than sales of homes that aren’t distressed,’ Webb said.”

“If a significant number of these pending contracts are for distressed homes, sales prices will likely continue to fall, since such homes tend to sell below market prices. According to Webb, 37 percent of sales in Ada County and 64 percent in Canyon County in May were distressed.”

“Loan originator Doug Adams with Idaho Street Mortgage said he expects rates to stabilize. Adams said he was inundated with refinancing applications in March and April, but the pace will slow if rates keep rising. Another factor slowing closings is a raft of new government regulations and lender requirements.”

“‘What used to take four to five days to underwrite is now taking three to four weeks,’ Adams said.”

The Columbian in Washington. “A formal plan to build a Vancouver waterfront community with almost 5,000 residents and 3,500 workers was submitted to city planners. Gramor Development of Tualatin, Ore., and its local investors filed a master plan for redeveloping the former Boise Cascade paper mill site along the Columbia River. Gramor President Barry Cain called the project ‘a once-in-a-lifetime opportunity to connect the community with the river.’”

“City officials have long coveted the waterfront project, not only for its potential to create jobs and generate taxes, but also for the prestige of having a prominent project on the West’s mightiest river. The overall project would include 3,000 to 3,300 residential units.”

“Residential units would be a mix of condominiums, apartments, senior housing and so-called ‘affordable’ work force housing for people earning modest wages. Cain said the first phase of construction likely would include five or six buildings offering 1 million square feet focusing on affordable and senior housing, a reflection of a sour market for luxury condominiums.”

“‘No one is going to plan on … regular condos right now,’ he said. ‘We are probably a few years away.’”

The Edmonton Journal in Canada “Economic woes, rising unemployment and a glut of condos caused the Edmonton region’s apartment vacancy rate to inch up by 1.3 per cent in April. The vacancy rate for rental apartments in the Edmonton census metropolitan area rose to 4.7 per cent in April from 3.4 per cent in April 2008, says the national housing agency’s spring rental-market survey.”

“Wood Buffalo, which includes Fort McMurray, had Alberta’s biggest vacancy increase, rocketing to 6.9 per cent from 0.1 per cent in a year. Rent for an average two-bedroom suite fell to $2,165 from$2,350. In the Calgary area, the apartment-vacancy rate more than doubled to 4.3 per cent from two per cent in the same period last year.”

“‘A lower level of employment is affecting the demand for units the rental market,’ said analyst Lai Sing Louie. ‘Landlords are responding to rising vacancies by providing incentives.’”

“‘With elevated levels of supply and inventory on the existing and new condominium markets, some investors have decided to rent out their units rather than sell them at reduced profits,’ said Richard Goatcher, senior market analyst for Edmonton.”

http://thehousingbubbleblog.com/?p=5481

Canadian Funding Corporation – CFC – posts CMHC update. Mr. Greg Rickford, Member of Parliament for Kenora, joined with Naotkamegwanning First Nation and Chief Warren White to celebrate the grand opening of a new 10-unit seniors residence today, which was officially opened by Chief Warren White and will be home to more than 30 elders.

“The Government of Canada is committed to creating safe and affordable housing for Aboriginal people in Ontario and across the country.” said MP Rickford, on behalf of the Honourable Diane Finley, Minister of Human Resources and Skills Development Canada and Minister Responsible for Canada Mortgage and Housing Corporation (CMHC). “This project provides area elders with access to safe, quality housing at an affordable cost.”

CMHC provided a housing loan of $1,064,000 to facilitate the construction of this seniors residence. CMHC will also provide housing subsidies for this project, which are estimated at $2.1 million over the term of the 25-year loan agreement.

“It’s been a long, prosperous journey and now we can express the wishes that our elders voiced years ago to develop a seniors residence in Naotkamegwanning First Nation,” said Chief White. “Through hard work, determination and negotiations with CMHC, it has become the greatest accomplishment for our community. We’re a community that believes dreams can become reality when we work very hard to achieve them.”

CMHC’s On-Reserve Non-Profit Housing Program assists First Nations in the purchase, construction, rehabilitation and administration of affordable on-reserve rental housing, and provides subsidies for First Nations people living on-reserve. The Government of Canada provides approximately $270 million in on-reserve funding each year to address housing need.

In April, the Government of Canada announced as part of Canada’s Economic Action Plan that it is providing $400 million in additional funding over the next two years to support on-reserve housing. These funds are dedicated to new social housing projects, the remediation of existing social housing and complementary housing activities through programming from CMHC and Indian and Northern Affairs Canada (INAC). This funding will also provide an economic stimulus for many First Nations and rural areas by creating jobs, developing skilled trades and supporting small businesses.