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  • Chinese Buyers – Are Taking Over The US?
  • The Numbers, The Numbers – Vancouver
  • The Numbers, The Numbers – Fraser Valley
  • Real Estate Outlook Conference 2014
  • Hot Property
  • Best Mortgage Advice

INTERNATIONAL: US Housing Starts Surprise – Forecasters See A Downturn

The July 17 housing starts report showed an unexpected plunge in starts (US Census Bureau). The Census Bureau reported that starts
for June dropped 9.3% versus May. 893,000 starts versus the 1.03 million that was expected. It shocked the market and the Dow Jones Home Construction index (DJUSHB) plummeted 16 points, or 3.3%, which was 3x more than the 1.1% decline in the S&P 500 that
day.

There are some other reasons to be concerned (somewhat). A look at the month-to-month stats sees the new construction market in a downtrend since the
beginning of the year …

But also

  • Mortgage applications have come down sharply.
  • Housing starts take a big drop in June.
  • The increase in the homebuilder sentiment index is deceptive.
  • Homebuilder stocks are negatively diverging from the S&P 500.

Further on July 25th, the Mortgage Bankers Association reported a further decline in
purchase applications. Purchase applications dropped 8% week-to-week vs. the previous week, and 16% year-over-year for the same week. This is despite mortgage rates which are lower now than the same time last year. (Source: Bankrate.com)

Also Zillow (
which was in the news as merging with its biggest competitor Trulia) released their June 2014 National Real Estate Market Overview. Here it features data that says: ” … this paints a very sobering picture for real estate, though their summary expects that prices will continue to rise … .analysis of the
data that they present, however, leads (Zillow) to quite the opposite conclusion.”

Further Zillow says: “Looking at mortgage payments and rents, Zillow data show that mortgage affordability is still relatively high, while rental affordability is at
all-time lows.”

To us at JREI that means the opposite … it means that the market well has a way to go higher.

However, Zillow says that ‘rates will rise’ significantly from 4% now to between 4.6% and 5.1% by 2016.

To JREI that would be a moderate increase and given the still low, low current house prices could be quite easily absorbed.

Finally, Zillow says that inventory is rising, sales are slowing and concludes that we are at ‘ already be near the peak of housing prices.’ It also quotes the Case-Shiller Data that apparently showed large decreases
in homes sold in May.

Finally Zillow says: “Either way, limit your exposure to housing unless you are betting against it.”

Major Point:
We also have quoted the Schiller report often since 2010 – mainly in demonstrating how far they are behind the market and how often they
were wrong … always expecting a negative outcome and missing the upturn altogether.

We think there is nothing to worry about at this point, but for US investors these stats are something to keep your eyes on.

Chinese Buyers – Are Taking Over The US?

Chinese buyers
are now the biggest international players in the U.S. housing market spending on U.S. homes during the 12 months ended in March. Over half was spent in
California, Washington and New York, according to the National Association of Realtors (NAR).

Top U.S. states for Chinese homebuyers:

Chinese buyers are spending billions of dollars on homes in these states.

State
Market Share
California
35%
Washington
9%
New York
7%
Pennsylvania
6%
Texas
6%
All other states
3 6%

Source: National Association of Realtors

The hottest markets:
Los Angeles, San Francisco, San Diego, New York and Seattle, according to Juwai.com, a Hong Kong-based website that connects Chinese buyers with U.S. properties.

Major Point:
Well, most of these markets are in our “buy” recommendation already … This is another reason to be interested.

C A N A D A: The Numbers, The Numbers – Vancouver

Rumours of higher interest rates notwithstanding, July turned in a respectable performance right across the Lower Mainland. The monthly ‘new price’
sections are substantially higher (look at note below), but the overall increases are in line with or just ahead of the (official) inflation rate.

We have had several long term subscribers asking to bring back the year to date number sections (as we always did before, because they feel – quite
rightly! – that the y-t-d numbers are often more relevant, while the monthly numbers may presage changes. We also have a lot of support for including
the last 4 years stats – a measurement against the highs of 2011 (so as to not lose perspective on how good the market actually is or isn’t). So we are
doing both…

Major Point:
This July was a winner on many fronts. First: sales are higher both over 2013 (+03%) and the previous high year of 2011 (+12%), as well
prices are up and listings down over the last 3 Julys of 2011, 2012 and 2013. Detached SF home prices are higher over the last three years
as well. As are condo prices (up between 4-5%). It is always good to check out the y-t-d numbers particular where new sales are concerned.
Thus new condo prices are up 19% on the month but on a y-t-d- basis only 6%. Likely some high priced units made it across the lawyer’s desk distorting the
average.

The Numbers, The Numbers – Fraser Valley

1,615 sales in July represented an increase of 11 per cent compared to the 1,456 sales in July of 2013 and are even 1.4 per cent above the
10-year average for the month.

Active listings
in the Fraser Valley stand at 9,636, a decrease of 8 per cent compared to the volume available in July 2013.

Fraser Valley Board president Werger
says:

“When demand starts to exceed supply it puts upward pressure on prices and in areas such as White Rock/South Surrey, North Delta and Langley we’ve seen
an increase in benchmark prices of single family detached homes ranging from 3 to 6.6 per cent over the last year. It’s a different story for condos.
In most of our market, there’s an excellent selection and prices are lower than they were one year ago offering tremendous opportunities for buyers.”

In July, the benchmark price, of a ‘typical’ single family detached home was $568,300, an increase of 3 per cent compared to July 2013 when it was $551,000.

The HPI benchmark price of Fraser Valley townhouses increased by 0.2 per cent; going from $297,800 in July 2013
to $298,500 in July 2014.

The benchmark price of apartments
was $194,700 last month, a decrease of 3.6 per cent
compared to $202,000 in July of last year.

Major Point:
Also a good July. Sales up 11%, prices July over July the same. However, the average price in June was higher clocking in at $514,500 and is down by 3%
this month … The same goes for condos where prices stood at $234,000 in June. Detached prices home stayed the same in Abbotsford and Delta ($457,000/583,500). They were up 7% in Mission ($411,600), dropped by 3% in White Rock
($1,001,900!), and were 18% higher in Langley ($638,200!). Surrey Central rose by 3% ($615,200),Cloverdale by 4% but Surrey North dropped by 5% (581,000). Condo prices show a different story … Surrey North – 6%, Cloverdale -9%, Delta – 28%. However, Abbotsford, Mission, Langley are all higher. A fine summer month
overall. We expect the market to be ‘steady as she goes’ for August.

HOT PROPERTY:

Cash flow on this duplex in Maple Ridge. Currently rented out for $2600 total! The Tenants pay the utilities! This duplex
is situated on a ¼ acre lot, it also could be turned into a Tri-plex! The Owner is willing to carry up to 10% financing on a second mortgage. This
means you would only need 10% down to purchase this property! Price: $475,000.

Anyone could have their deal featured here. ALL can featured their deals

on the password protected website and also place their preferred contact info there. There are no guarantees or warranties here. Please review the
disclaimer on your deal section.

BEST MORTGAGE ADVICE

Helping self-employed borrowers qualify for rental properties.
“Although the majority of the changes we have been feeling in the industry have been bad news for investors, one lender recently opened the door to
making it easier for self-employed borrowers to finance up to 80% of a purchase or refinance by “stating” their income,”

says Kyle Green of Mortgage Alliance (778-373-5441, kgreen@mortgagealliance.com).

“The unique part of the program is that with most lenders when going over 65% financing they usually want to charge the client a CMHC insurance premium
or a fee, which this lender does not. The program also allows us to use bank statements to support our stated income amount instead of the usual 2
years of tax returns. It’s very rare for lenders to allow us to use stated income to qualify for a rental purchase or refinance, so we expect to be
using the program a fair bit for qualified investors.”

The product also allows for a 35 year amortization and standard pre-payment penalties. The catch is that rates are discretionary and are based off of their
posted rates and discounted or surcharged based on risk. If you are running into difficulties qualifying for a rental property because you are
self-employed, this could be a great program to consider. Contact Kyle Green for more details.

REAL ESTATE OUTLOOK CONFERENCE 2014

On September 13, 2014 we will have our 23 annual Real Estate Outlook conference at the Renaissance The in downtown Vancouver. We will tackle inflation,
deflation, demographics (yes), mortgages, interest rates, niche markets … but also … The Smith Manoeuvre and a number of investor type workshops.
This will be the best conference yet.

As always – if you are in the real estate industry umbrella – this can be an opportunity for you to exhibit your expertise and become a sponsor. We offer
booth space to subscribers at a discount. So book your development, your service or your product booth early to benefit.

Our audience is paying to be there to be informed of the latest, up to date news in the Real Estate market by top notch Presenters. They are serious Real Estate Investors.

Our conference is different in terms of having a smaller number of booths and a full room of serious Real Estate Investors – not loads of booths and a few
freebie attendees.

The OUTLOOK Conference is also proven as this will be our 23rd year. It is BOOKED OUT every year.

Please let me know if you would be interested in this Sponsorship Opportunity as interest for the OUTLOOK Conference is always high (more so in these
times).

Don’t miss out on this year’s Subscriber Early Bird Special, available only until August 15th! Book early and save!

We’d be happy to send you more details on our OUTLOOK Conference 2014 Sponsorship packages, just reply with ‘INTERESTED’
in the subject line, alternatively please don’t hesitate to contact Marc Jurock with any questions or comments marcjurock@gmail.com or 778.288.6798

 

To subscribe to Jurock’s Facts by Fax ($177 p.a.) call 1-800-691-1183 or 604-683-1111 or fax 604-683-1707. 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, JREI cannot assume
responsibility for any subscriber’s actions