USA prof: Don't judge areareal estate market by national trends

Don't judge the local real estate market by what's going on nationally, advises Don Epley, real estate professor at the University of South Alabama.

Mobile's economic activity is at its highest point since 1990, and the area economy is projected to grow almost 9 percent annually, according to a report released by Epley, director of the Center for Real Estate Studies at USA.

Plus, he said, "We're showing 8 to 9 percent nominal growth in Baldwin County, which is very good for what is basically a rural county that has been branded as a retirement and commuter area to Mobile."

When evaluating the health of the real estate market, Epley urged attention to local trends, not the gigantic swings in home appreciation and sales in states such as Nevada and California.

Mobile and Baldwin are lumped together with areas in the Northwest, regions of the Northeast and southern Florida in most national real estate surveys, when the local market should be compared to similar coastal regions, according to Epley.

Over the years studied, Mobile had no dramatic changes in appreciation rate, except for the time after Hurricane Katrina in August 2005 when the appreciation rate hit 18 to 20 percent, Epley said.

"But that was not normal," he said.

Mobile's housing stock has appreciated at an average 6.6 percent for the past three years, the report showed.

"In Mobile, our real estate market is very steady, but steady is beating all the other real estate economies in the nation." said Richard Weavil of The Weavil Co., who is chairman of the real estate center's 31-member advisory board.

Quarterly reports

Sunday, October 28, 2007

By KATHY JUMPER

Real Estate Editor
Source: http://www.al.com/business/press-register/index.ssf?/base/business/1193563720221640.xml&coll=3#continue

A 3-point strategy for better housing

TheStar - Canadians really didn't need a United Nations envoy to tour the country and announce that Canada urgently needs to tackle its affordable housing crisis. The signs of it are everywhere, from homeless beggars on the streets of Canada's major cities to overcrowded shelters and rotting public housing buildings.

But the visit last week by Miloon Kothari, the UN's special rapporteur on adequate housing, did shine a spotlight on the shocking lack of affordable housing options in a country as rich as Canada. Successive federal and provincial governments have pledged to address the problem, but all have fallen far short of meeting the growing demand for reasonably priced housing for low-income families and individuals.

What is lacking is a co-ordinated federal-provincial housing strategy, in effect a national plan that would ensure every Canadian has a decent place to call home.

Such a blueprint must take a three-pronged approach: new construction of affordable homes, rent subsidies and renovation of existing homes.

The three areas need to be tackled together, not in isolation or in any prescribed order. Rather, a holistic approach is best suited to addressing the problem.

As a key leg of the three-pronged strategy, it is imperative that Ottawa kick-start a renewed national housing program with a goal of building up to 200,000 affordable and co-operative housing units over the next 10 years. The homes are needed in cities, rural areas and native reserves.

Ottawa effectively got out of the affordable housing sector in 1993 when it downloaded the area to the provinces. Because of that, only a few major programs have been funded. The result is that in the past decade, fewer than one new affordable rental unit has been built for every 100 new homes. And overall rental construction is lagging. Across Ontario, up to 12,000 new rental apartments are needed annually, three times what has been built each year between 2000 and 2005.

The consequences are felt most acutely in the Greater Toronto Area where only 2,000 new affordable rental units have been built in the past five years, while more than 67,000 people remain on waiting lists.

The second leg of the strategy should be a greatly expanded rent supplement program. Obviously, new affordable housing cannot be built fast enough to meet existing demand. That's why paying subsidies to put low-income residents into vacant rental units is necessary. While some housing advocates view rent supplements as a short-term measure that does not solve the overall problem, such subsidies do provide temporary support and needed housing for those in desperate need.

Currently, a family of four receives a shelter allowance of only $544 to cover rent. However, the average market rent in Toronto has risen to $1,052 for a two-bedroom apartment. During the recent election campaign, Premier Dalton McGuinty promised a new $100-a-month rent supplement program to help 27,000 Ontario families. That is a welcome first step, but it should only be an initial step. More assistance will be needed because McGuinty's plan will still leave thousands of families scrambling for help to pay their rent.

The third part of the strategy would be a major commitment to renovate public housing that is aging and falling into disrepair. In Toronto alone, the city's 58,000 units of public housing require an estimated $300 million in repairs. Many of those buildings are now more than 50 years old, with plumbing that leaks and ceilings that are cracked.

The preferred way to deal with this issue is for Queen's Park to upload the cost of renovations. When the Conservative government under Mike Harris downloaded the cost of social housing to municipalities in 2001, it refused to give the cities the money needed to deal with repairs. McGuinty should make reversing this policy the first priority of his re-elected government.

Together, these measures would form the basis of a federal-provincial affordable housing strategy that would go a long way toward helping the neediest among us – those who cannot work, single parents and the working poor – have a better life.

Vancouver has the most expensive housing market in Canada

VANCOUVER: On a recent Wednesday evening at the Gotham Steakhouse in the city center here, about 100 people gathered around an open bar for a party given by Ian Watt, a Century 21 broker, who had invited clients to thank them for buying property in the city.

One of the guests was Annu Gill. With her fiancé, Rick Gill, who coincidentally has the same last name, she had bought a 1,200-square-foot, or 110-square-meter, condominium at the Sheraton Wall Center, a 42-story hotel with 74 units in the center of Vancouver. The condo cost 1 million Canadian dollars, or $1 million.

"When I try to explain to friends in the States how much it costs here, they don't believe me," Annu Gill, 29, who is a real estate broker, said of the city's high prices. "They say, 'You're lying.' "

But 830 dollars a square foot - which is how much the couple paid for the condo - is not unusual these days.

The center of Vancouver is the most expensive housing market in Canada, according to a survey of 21 cities worldwide released last April by Century 21. The average sales price for a condo in Vancouver has been about 408,500 dollars this year, up 14.6 percent from last year, according to Royal Le Page Real Estate Services. The average sales price in Toronto, Canada's largest city, was about 235,300 dollars, up 15.7 percent from last year, and in Montreal, 196,400 dollars, up 4.6 percent.

The number of homes in Vancouver selling for almost 2 million dollars also rose this year, by 48 percent, according to Re/Max Associates. The higher prices reflect years of price gains of 15 to 20 percent, according to Helmut Pastrick, the chief economist for the Credit Union Central of British Columbia.

Not everybody is enthusiastic about Vancouver's growth. To make room for some projects, hundreds of single-room-occupancy hotel rooms for low-income residents have been lost, said David Eby, a lawyer with the Pivot Legal Society, a legal advocacy group. High prices are pushing out middle-income renters and buyers, he added.

Gordon Price, the director of the City Program at Simon Fraser University, said the city had erred in abandoning its commitment to maintaining a 33 percent low-income housing mix in the Southeast False Creek site. The development is being built initially to house athletes during the Olympics. Later, it is to be converted into condominiums and town houses selling for 584,000 dollars to 5.8 million dollars.

The city reverted to a 20 percent low-income housing mix because of concerns about cost, said Jennifer Young, a city spokeswoman, explaining that there had been a drop in government financing for low-income housing.

Darek Cole, for one, said he felt lucky to afford a home in the city. "Vancouver is a difficult place to get into, compared to other cities," said Cole, 26, who works for a marketing company. He paid almost 263,000 dollars for a 600-square-foot condo in the city's Downtown Eastside neighborhood.

"I knew it would be a good investment," he said.

Linda Baker / International Herald Tribune