JUROCK’S Facts by Fax
Jurock Publishing Ltd. #200-1311 Howe Street, Vancouver, B.C. V6Z 2P3 Tel: (604) 464-0808/Fax (604) 683-1707/E-Mail: ozzie@jurock.comWorld Wide Web: http://www.jurock.com/
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Proverb
IT’S THE BEST OF TIMES, IT’S THE WORST OF TIMES…
But either way, we won’t be here. The festive computer screens, our
stockings hanging up by the toasty-warm fax machine, chestnuts in
cyberspace … none of it is enough to keep us here. Santa Claus is coming
to town, but we at JREI won’t be here to greet him. Instead we’ll be off
for the next two weeks, schussing the slopes, studying our navel and
(still) seeking profundities at the bottom of a beaker or two of eggnog.
To you, our beloved subscribers and your significant others, we wish a
very merry Christmas and an eventful, colorful, challenging, exciting,
prosperous and, above all, healthy 1997. Hotline and Fax will be back
January 8, 1997.
WHISTLER UGLY?
At least in the words of one visitor from Atlanta. He called Whistler a
giant “construction zone” while whizzing up the lift to ‘heaven’. Having
blinders on (simply loooove skiing), I must say, I hadn’t noticed. But,
prompted by the visitor, I did take a long walk through the old and new
village and -reluctantly- must agree. Buildings are being stomped out of
the ground – with hammers, blowtorches, steel clanking and trucks
everywhere. You can see the grand design though. Give it a couple of years
and the village and village north will be a fine cohesive area … but in
the meantime … well, it isn’t pretty. Thank goodness for the snow cover.
STILL WHISTLER… and GREAT NEWS!
With Intrawest Corp, Whistler Mountain Corp., and Copper Mountain Inc.
combining forces under the Intrawest banner, (a $260 million dollar deal)
watch for more development to take place. We advised last year that the Whistler Creekside area may become a good investment because
of the new gondola. Intrawest announced that it will begin work IMMEDIATELY
to complete the village plan for the Creekside. Under the first class
leadership of Intrawest, look for great things to happen there.
WHERE THE GOVERNMENT AND PRIVATE INDUSTRY PLAY BALL
With pressures continuing for all government to lower costs, private-sector
financing, either in co-operation with government or alone, will create
many new projects that otherwise wouldn’t happen. The partnership deal at
Mt. Washington Ski development allowed for the building of the road NOW
rather than later. Now, a major highway interchange at Furry Creek by the
Tanac Development Canada Corp., will add a grade-separated interchange on
Highway 99 south of Squamish to provide access to its $227-million Furry
Creek residential and recreational development. It will be aided by a $4.8
million secured commercial loan guarantee. A new way of doing things that
otherwise wouldn’t get done. Well, Furry Creek is selling better, the Golf
course remains a world wonder and this new addition will serve it well.
SETTING A RECORD
As we predicted at our October conference, U.S. housing starts soared for
November as well as year-to-date, outperforming most projections. Also as
reported last month, most areas in the United States are experiencing a
price increase (from a low of .9% in California to a high of 11.4% in
Utah). The cycle is slowly turning.
NIMBYS, YUPPIES, DINKS AND DINS
Real estate consumers were labelled as ‘Not In MY Back Yard’, ‘Young Urban
Professionals’, ‘Dual Income NO Kids’ in the past. Now we have the ‘Dual
Income NO Sex’ crowd driving the market. This later group according to
Jerry Jackman, CEO of Windermere Realty is “so stretched for time that
research shows that they spend only 12 minutes a day on average talking to
each other.” At the fine UBC Real Estate Outlook Conference, Jackman
further pointed out that the new stressed out consumer (I guess, having no
sex…) is looking for ‘voluntary simplicity.’ Jackman takes that to mean
shorter or no commute times, smaller mortgages, plenty of recreation and a
quieter, less stressful pace of life generally. Polling his 30 brokers
throughout B.C., he projected that 65% of his trading area is looking for a
price increase, with 35% looking for a decrease in 1997. 85% of his
brokers projected also a strong sales unit increase. He pointed to Richmond
as the area of the steepest decline in volume (down by 500 unit sales).
However, with the DINS drive to this “voluntary simplicity”, he does not
expect the ‘buy-up’ market in Vancouver to be strong. The primary source
driving the market in 1997 will still be the first time buyer. We do not
disagree.
WE COULDA BEEN A SOMEBODY…or A LEGEND IN OUR OWN MIND?
We have arrived. Last year we made USA Today. Last week our outlook on the
Canadian Real Estate Scene was featured in the Financial Times of London.
Oh, well, ho hum.
SO, YOU WANT TO BUY AN APARTMENT BUILDING? Or…1992 WAS A VERY GOOD YEAR…
As in the residential area, the total number of sales of apartment
buildings from Vancouver to White Rock have declined sharply since 1992.
According to David Goodman of McDonald Realty values haven’t done so well
either. Says Goodman: “Statistics suggest that the average investor who
purchased a building in 1992 would have been better off to buy Canada
Savings bonds.” Indeed. First nine months statistics for last 5 years:
Total sold Buildings Units Dollar Volume
Average price per unit 1992 131 3,724 $281,024,000 $75,460
1993 109 3,611 $292,735,000 $81,070
1994 62 2,303 $198,198,000 $86,060
1995 57 1,709 $138,410,000 $80,989
1996 54 1,905 $150,958,698 $79,322 Goodman reports the average price per unit (where the whole building was
sold) in the Westend at $98,075 (includes a building on Beach Avenue
selling at $135,700 per suite), in Kerrisdale at $122,200, Eastside at
$76,700. Now compare that with buildings in Edmonton at $20,000 to $40,000
per suite, Calgary at $35,000 to $65,000 per suite and Toronto at $35,000
to $90,000 per suite.
PRINCIPLED BUYING
In our September JREI newsletter, we featured 28 real-estate buying
principles and we pointed out that buying in the 1990’s is not as easy as
it was in the 80’s (You paid to much, you just bought it too soon).
However, buying remains worthwhile and profitable, if one follows some
basic principles. Clearly, as an investor you make your biggest profit on
the day you buy, not sit and hope for the best. Timing is far more
important than location, location, location. Buying in the Trend line
(where are the DINS moving to?) is vital and making offers (lots of them)
will pinpoint the special deal. In 1997, Calgary and Toronto prices will
move higher (but remember the principle of buying local, selling long
distance!’), Edmonton will bottom, Vancouver and the Fraser Valley will see
some price pressure in the lower price ranges but the middle to upper end
will stay sluggish. The interior and Vancouver Island regions are turning
(slowly) but some areas will still see further price declines. But overall
we see 1997 as a ‘stabilizing ‘ year. With asset price inflation back in
1998, 1997 maybe the last year to bottom fish. Driven to finding you the
best trend and timing areas, we will be right here with you looking for
opportunities and trends to profit from.
Subscribers’ Plots of the Week: 1. Port Alberni, 3 Bedroom Townhouse,
rented at $600, appraised at $78,000, reduced to $68,000; 2. Paradise Lake,
55 km east of Merritt, one of 28 building sites on a 10 acre parcel of land
abutting the lake. Common property includes a 6 bedroom log house, Price
$39,000; 3. Quesnel, 80 acres, previously logged, Price: $58,000. Call
Liesl or Lin at 464-0808 (All SPOW’s are for you to evaluate, just look
interesting to us. No guarantees).
RESIDENTIAL MORTGAGE RATES: Canada Trust went up by 3/10th of one percent
this week. Watch what happens by other lenders. We still have the best
rates in 40 years. Get pre-approved…the ‘ides’ of January are approaching.
Best rates 6 mos. 1 yr 2 yr 3 yr 4 yr 5 yr 7 yr 10 yr High Ratio 4.60 4.80 4.95 5.60 5.85 6.20 6.75 7.25 Conventional 4.50 4.65 4.95 5.60 5.85 6.20 6.75 7.25
Mortgage rates based on a weekly survey of 65 major financial institutions.
The lowest rate posted may be conditional to the borrower meeting certain
requirements and conditions. For Lower Mainland rates try: Nova Financial
Services (John Ribalkin or Jaeson Robinson direct tel: 251-6682); The
Mortgage Source (Rick Robertson cell: 377-6985/toll-free 1-800-465-6275);
Canada Trust (Brad Currie (604-816-5198).To subscribe to Jurock’s Facts by
Fax ($125 per annum) call 683-1111/464-0808 OR fax 683-1707. While the
above information is compiled from sources believed to be reliable, its
accuracy cannot be guaranteed. Any type of investing carries inherent
risks; as such we cannot assume responsibility for any subscriber’s actions
or choice of investment.
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