Lack of jobs & affordable house, pushing some to leave

[twobits]

For affordable homes, perhaps a return to smaller homes on smallish lots. Under 1000sf on main floor for level-entry ranchers (optional finished bsmt) and under 700sf on main floor for 2-sty and houses with developed attics. Newer versions of the old houses east of IGA and the new development north of Rona come to mind. Make them well-designed, but small and with quality finishing/design. These would give new home owners and retired people, affordable, manageable, quality homes, with their own-four-walls. They could even have carports that could be converted to garages later. Lot price $140,000 and (hse at $160/sfx900=$144,000) = $284,000 plus tax, profit and fees. Plant lots of deciduous trees for aesthetics and cooling.

Exactly what I was pointing out Nepal. Take a drive up Carmi and about a Kilometer past the water tank at the hairpin there is a plywood sign on the side of the rd overlooking Sendaro and you will see exactly the concept you have illustrated here.

[nepal]

If the houses are small and affordable, they won't need the uncertainty, liability and added cost of suites.

[twobits]

If the houses are small and affordable, they won't need the uncertainty, liability and added cost of suites.

Absolutely correct but having that flexibility and potential mortgage kicker makes it acheivable to an even greater income demographic. Your post with the concept illustrations was perfect!

[Corneliousrooster]

List price: $284000 Rate: 5%
Down payment: $28000 Amortization period: 25yrs


Monthly: $ 1488.91
This calculator is for demonstration purposes only. The Canadian Real Estate Association does not guarantee that all calculations are accurate. Always consult a professional financial advisor before making personal financial decisions.


$1500 a month (not including tax/fees/property tax) doesn't sound very realistic for most young families in Penticton and area that I am aware of (that is after a 10% down payment of $28000 - which is unheard of by the vast majority)

I would not expect those lots to be selling anytime soon - and they will most definitly go down before they do sell - the market changed before the plan for the development could be seen through.

i hope all these developers budgeted the excess profits while times were good......

[XT225]

List price: $284000 Rate: 5%
Down payment: $28000 Amortization period: 25yrs


Monthly: $ 1488.91
This calculator is for demonstration purposes only. The Canadian Real Estate Association does not guarantee that all calculations are accurate. Always consult a professional financial advisor before making personal financial decisions.


$1500 a month (not including tax/fees/property tax) doesn't sound very realistic for most young families in Penticton and area that I am aware of (that is after a 10% down payment of $28000 - which is unheard of by the vast majority)

I would not expect those lots to be selling anytime soon - and they will most definitly go down before they do sell - the market changed before the plan for the development could be seen through.

i hope all these developers budgeted the excess profits while times were good......

I agree with your comments. Real Estate is slowing down, drastically. People are afraid for their jobs. It was on the news yesterday that the bottom COULD fall out of the Canadian Real Estate market this year, if interest rates rise just a few points..and they ARE expected to. People will wait, as prices will fall and I can't blame them at all. If some of these wingnuts had their way, we'd all be working for $8 per hour...and living with our parents or lining up down at the soup kitchen, while THEY just get richer. Some people thought that I was joking when I suggested that Sendero Canyon should be the location of a prison. I was semi serious. It would be a guaranteed real estate sale for the developer and anyone working there MIGHT be able to afford a house in one of the many homes/condos lower down in the city that are for sale. Ok...maybe you think Im a nut...but so be it. A few of you (one has gone away til monday..yipeee) think that Sendero is gonna be a hot seller. What kind of tobacco is in that cigarette you are smoking? If you think that they are gonna sell like hotcakes; think again. The power is cut off to the grill so the batter isn't going to do a thing except sit there. It has been suggested that some may have suites in them to help pay the mortgage. Good plan but many are 32.8' lots; that will be a challenge to build properly AND have off-street parking. Basement suites in this town are EVERYwhere and most (I'm serious here) are illegal and unlicensed. Why? Partly because of the cost of upgrading to required standards and secondly because income has to be claimed on your taxes. Its sad but a true situation. Sendero MAY work out differently as if building from scratch, suites CAN be made legal, but not sure how they can get around the off-street parking requirements. I do wish them well, though. Time will tell if it will come to fruition. I just hope it doesn't end up like that half-built apartment (with the crane) on Winnipeg Street. I wonder who is paying to rent that tower crane?

[Corneliousrooster]

Time will tell if it will come to fruition. I just hope it doesn't end up like that half-built apartment (with the crane) on Winnipeg Street. I wonder who is paying to rent that tower crane?

Yes, in Summerland we enjoy many empty condos and commercial lease space - (and the commercial that is filling up as the few new tenants, just moved from down the road or across the street leaving behind vacant space) So now we have a brand spanky new option or "yesterdays" slightly less expensive neighbour - both types are empty and no sign of new industry/residents comin to summerland.

oh yes - we have a brand new dirt parking lot in the heart of downtown that is the fruition of dreams that won't be being realized anytime soon.

Sedaro and the like - wait til 2012 and see the prices return to some what normalcy - until then there are going to be plenty of residential deals popping up everywhere as a large chunk of the "first time" home buyers of the last 5 years come to refinance their mortgage and the realization that the job and financial situation they based the purchase on has dissapeared the times they are a changin...... sorry sedaro......

[twobits]

List price: $284000 Rate: 5%
Down payment: $28000 Amortization period: 25yrs


Monthly: $ 1488.91
This calculator is for demonstration purposes only. The Canadian Real Estate Association does not guarantee that all calculations are accurate. Always consult a professional financial advisor before making personal financial decisions.


$1500 a month (not including tax/fees/property tax) doesn't sound very realistic for most young families in Penticton and area that I am aware of (that is after a 10% down payment of $28000 - which is unheard of by the vast majority)

I would not expect those lots to be selling anytime soon - and they will most definitly go down before they do sell - the market changed before the plan for the development could be seen through.

i hope all these developers budgeted the excess profits while times were good......

I agree with your comments. Real Estate is slowing down, drastically. People are afraid for their jobs. It was on the news yesterday that the bottom COULD fall out of the Canadian Real Estate market this year, if interest rates rise just a few points..and they ARE expected to. People will wait, as prices will fall and I can't blame them at all. If some of these wingnuts had their way, we'd all be working for $8 per hour...and living with our parents or lining up down at the soup kitchen, while THEY just get richer. Some people thought that I was joking when I suggested that Sendero Canyon should be the location of a prison. I was semi serious. It would be a guaranteed real estate sale for the developer and anyone working there MIGHT be able to afford a house in one of the many homes/condos lower down in the city that are for sale. Ok...maybe you think Im a nut...but so be it. A few of you (one has gone away til monday..yipeee) think that Sendero is gonna be a hot seller. What kind of tobacco is in that cigarette you are smoking? If you think that they are gonna sell like hotcakes; think again. The power is cut off to the grill so the batter isn't going to do a thing except sit there. It has been suggested that some may have suites in them to help pay the mortgage. Good plan but many are 32.8' lots; that will be a challenge to build properly AND have off-street parking. Basement suites in this town are EVERYwhere and most (I'm serious here) are illegal and unlicensed. Why? Partly because of the cost of upgrading to required standards and secondly because income has to be claimed on your taxes. Its sad but a true situation. Sendero MAY work out differently as if building from scratch, suites CAN be made legal, but not sure how they can get around the off-street parking requirements. I do wish them well, though. Time will tell if it will come to fruition. I just hope it doesn't end up like that half-built apartment (with the crane) on Winnipeg Street. I wonder who is paying to rent that tower crane?

XT-I still think there will be a decent market for them given that Penticton basically has ZERO for a single family home lot inventory. At least ones that don't cost 349k like in upper Pineview. The secondary suite off street parking issue is addressed by the rear lane on each lot. Parking for suite is to be off rear lane.
Ask Mr Singla if you want to know about that crane. I guess since he owns it he figures he's got to store it somewhere anyway lol.

Corn- You seem very jaded about the market. I don't think we'll return to a hot market again in any big hurry but I am still optimistic about real estate anywhere in the Okanagan. Things are picking up in Alberta again and that has always been an indicator for our market. I recall you saying in another thread that your house in Summerland is up for sale. Have you had bad experiences with people lowballing?

[Corneliousrooster]

Corn- You seem very jaded about the market. I don't think we'll return to a hot market again in any big hurry but I am still optimistic about real estate anywhere in the Okanagan. Things are picking up in Alberta again and that has always been an indicator for our market. I recall you saying in another thread that your house in Summerland is up for sale. Have you had bad experiences with people lowballing?

Have to have people comin through the doors to look to get low ball offers..... (we have recently changed listing companies and lowered the asking, fingers crossed....)

Summerland had the biggest population drop in the province - packing house, kettle valley dried fruits, katana, the forestry seedling place - summerland NEEDs to get something going for industry here or i foresee the trend continuing.

its not so much that I am jaded on the market - the prices will begin to fall and things will move, penticton as well - i just don't think that empty lots in empty subdivisions is the market that will return first - not until some (paying)jobs return to the area.... and it will be the segment that probably drops the largest percentage in the quickest amount of time depending on how much the "future plan" was being financed.

[Static]

Real estate across Canada will get slaughtered, the Okanagan-similar to Florida-will be one of the worst hit. Numbers dictate that it will. A price collapse would do wonders for our local economy.

[chillybrew]

There is work out there, maybe not in Osoyoos but there is in Ft.McMurray. When I needed money for a down payment on a home for my family I repeatedly applied and finally landed a job north of Ft.Mac in the Oil sands where they would fly me for FREE every 2 weeks to and from camp and pay me a travel allowance to drive from kelowna to penticton it's a good gig and it meant survival in these hard times start applying at Ledcor, Flint, JV Driver, MMR, etc.... you can be a Labourer, Painter Insulator, Pipefitter, Electrician, Ironworker, Welder, carpenter, Carpenter's helper, Instrumentation Tech, Haul truck driver etc.... Or if you don't have a trade, call the carpenter, electrical, ironworker, scaffolding unions in alberta and see about joining its great money and awesome work experience. If you keep applying you will get through, that's what I did and that's what people I know have done and we ALL pay a mortgage in the Okanagan and are pretty much debt free (not incl. mortgage). 2 weeks on, and 1 week off is not that bad if it means providing for your family, instead of moving to Cranbrook where the economy is not any better neither is the housing get a resume and start applying today!
Sorry but the truth hurts sometimes, I remember when being a husband and a father meant being a provider,
Don't punish your family by moving get out and do your duty.

Sometimes you have to sacrifice

[twobits]

Real estate across Canada will get slaughtered, the Okanagan-similar to Florida-will be one of the worst hit. Numbers dictate that it will. A price collapse would do wonders for our local economy.

I would love to see the numbers that show a slaughter or how the Okanagan will be a Florida. That's a pile of dung. Canada has some exposure to variable rate mortgages that might squeeze some buyers if rates climb two points but our mortgage market is nothing like what transpired down south. Not even close and the requirments were just tightend further still. Short term consumer debt is too high but no mortgage meltdown.

[Static]

Money always travels to the highest return. Currently there is zero return on the asset which is evident by the supply and the drop in average sale prices.

The population of the valley is shrinking.

The high prices are a joke when compared to prices in Nevada, Arizona, and Florida. Lets be honest, what would you rather have a $800,000 in Naramata with 2 months of sold weather, or six months in Florida or Arizona for $200,000?

Real Estate needs to have falling interest rates in order to realize the price gains we have. Without this the benefits of leverage could not take place. Assuming interest rates remain flat indefinately, the average price can only increase with wages. Throw in the threat of rising interest rates and the 2% average annual income does not take long to be eliminated.

No matter what the situation, it is far more profitable to rent today.

As much as everyone likes to claim the Okanagan a retirement destination, it still relies on the local economy to provide a price floor for the surrounding real-estate. Afterall, I would guestimate a minimum 60% of the inhabitants are working age.

Ownership levels are at a peak.

The fall is always respective of the climb. This has been proven time and again.

The list is endless. You are sadly mistaken if you beleive the Okanagan is not going to get slaughtered. History provides ample evidence that you will be wrong.

[twobits]

Money always travels to the highest return. Currently there is zero return on the asset which is evident by the supply and the drop in average sale prices.

Disposable income after shelter moves to the highest rate of return. Many people buy homes because they want there own home. Historically, despite what most would think, home ownership is not a stellar investment but all long term averages are positive. Returns could have been higher elsewhere but they have still been positive. I maintain that will remain true ong term

The population of the valley is shrinking.

With a snap shot of last year to this year yes. Again you cannot make a policy on near term events in isolation. If you think the valley population is going to be less in 10 yrs than now, I've got swamp land in Florida for ya.

The high prices are a joke when compared to prices in Nevada, Arizona, and Florida. Lets be honest, what would you rather have a $800,000 in Naramata with 2 months of sold weather, or six months in Florida or Arizona for $200,000?

Devastated markets due to subprime meltdown and fraudulent lending. These prices will correct in time. Buy your snowbird destination now if you are able. Residency requirments will require a home in Canada to move back to.

Real Estate needs to have falling interest rates in order to realize the price gains we have. Without this the benefits of leverage could not take place. Assuming interest rates remain flat indefinately, the average price can only increase with wages. Throw in the threat of rising interest rates and the 2% average annual income does not take long to be eliminated.

What you say is partially true. Many things influence the price of finite assets such as real estate. Capital has never moved more freely internationally than it does now. Do you think favourable interest rates and wage gains are the sole reasons for the price of real estate in Vancouver and Toronto?

No matter what the situation, it is far more profitable to rent today.

That arguement has been made for decades and probably is closer to truth with todays snapshot than ever before. As discussed early, many do not view home ownership as a per investment and for many it is a forced savings plan. I will grant you that for a person that is extremely financially savy and doesn't care to set roots, better gains can be had elsewhere. But we're talking 2% of the population here and I know far more seniors who never bought a home and regret it than ones that were happy they didn't. For many it is their major nestegg.

As much as everyone likes to claim the Okanagan a retirement destination, it still relies on the local economy to provide a price floor for the surrounding real-estate. Afterall, I would guestimate a minimum 60% of the inhabitants are working age.

40% is more realistic. The real estate prices here have never moved in tandem with the local economy and likely never will. All rational economics go out the window when you have a desirable location with a weak economy. It does create a serious problem for affordable housing and a situation that needs some creative thinking to resolve.

Ownership levels are at a peak.

Can't agree with that. Net migration is still positive long term and the majority moving here come from a position of positive net worth

The fall is always respective of the climb. This has been proven time and again.

That is a rather obvious statement that prooves nothing except my position. Cyclical fluctuations have been evident ever since man started keeping records. What is also undeniable is that each succesive peak has been higher than the previous one. You are somehow predicting the last peak as being the end of the pattern and the sky will permanently fall?

The list is endless. You are sadly mistaken if you beleive the Okanagan is not going to get slaughtered. History provides ample evidence that you will be wrong.

I wouldn't preclude some volatility and short term price variability but slaughter, no way. Tell me, just when is this slaughter of yours is going to begin, what's the duration, and what's the depth? I suspect you are not invested in real estate and are trying to justify why. I keep a diversified portfolio that includes real estate. Good luck with yours.

[Corneliousrooster]

40% is more realistic. The real estate prices here have never moved in tandem with the local economy and likely never will. All rational economics go out the window when you have a desirable location with a weak economy. It does create a serious problem for affordable housing and a situation that needs some creative thinking to resolve.

Population Age Distribution
Okanagan-Similkameen Regional District
Age Grouping (years) Male Female Total
0 – 14 5,315 5,390 10,695
15 – 24 4,185 3,965 8,155
25 – 44 7,060 7,940 15,000
45 – 54 5,985 6,620 12,600
55 – 64 5,790 6,355 12,145
65 + 9,830 11,040 20,870
Total 38,165 41,310 79,475


looking like 60% would be more accurate....

[twobits]

40% is more realistic. The real estate prices here have never moved in tandem with the local economy and likely never will. All rational economics go out the window when you have a desirable location with a weak economy. It does create a serious problem for affordable housing and a situation that needs some creative thinking to resolve.

Population Age Distribution
Okanagan-Similkameen Regional District
Age Grouping (years) Male Female Total
0 – 14 5,315 5,390 10,695
15 – 24 4,185 3,965 8,155
25 – 44 7,060 7,940 15,000
45 – 54 5,985 6,620 12,600
55 – 64 5,790 6,355 12,145
65 + 9,830 11,040 20,870
Total 38,165 41,310 79,475


looking like 60% would be more accurate....

Thanks for the numbers. Taking 24-65 as working class it is actually split right down the middle at 50%. It really dosen't change anything I said however.