PLEASE NOTE: ON THE SHARP MARKET SLOW DOWN JREI WILL DO A SPECIAL EDITION ON ‘THE END OF THE MONTH’S NUMBERS’ ON THURSDAY. They should show a clearer picture.
IN THIS WEEK’S FACTS BY EMAIL:
- QUESTIONS, QUESTIONS
- HOT PROPERTIES
- ASSIGNMENTS FOR DEVELOPERS
- BCREA REMAINS BULLISH – SEE PRICES HIGHER BY 11% NEXT YEAR
- US INVESTING – YES OR NO
Questions, Questions, Comments
Comments: Yes! How quick we forget. The early eighties were full of terrible news. I remember the largest real estate companies (NU-WEST) going broke and my uncle had a car loan at 18%. 2009 saw the Lehman Bros. collapse which was accompanied by the direst of forecasts. Likely we will look back at this time also and realize that we came through it. As you say: “We have a propensity to muddle through.”
Q: The review of downturns was VERY interesting. You say – imagine you sold then. Quite right, but what if you sold, locked in profits and then bought back after the collapse?
A: Yes, that is the most asked question. When would you see the bottom? Should I sell now? To which there is no satisfactory answer. One subscriber wrote: If I sell now, I can semi-retire, but will I leave money on the table? Honestly? I do not know. I do know that what you have now is a great personal situation – and only YOU can decide what is best for you.
Q: You recommend still to buy the US. What about the Canadian dollar? What if it recovers?
A: Yes, there is a currency risk if you buy anywhere in the world. We at JREI (and me personally) are on record with Victor Adair, that the US dollar will rise more and the Canadian fall more. (That will help our investments.) We are also with Josef Schachter that forecast last week a possible $30 oil! (That would mean a crushing Canadian dollar too.) Why these gentlemen? Search our website and look at what they said last year and the year before. Great track record. I don’t know currencies, but whether you buy in Canada or elsewhere the most important thing is that you have a GOOD DEAL that fulfills YOUR personal objectives.
Q: I am confused by the new ‘non-flipping’ assignment regulations. As an owner that is looking to pre-sell a 10-plex can I not assign?
A: The regulation is primarily for realtors. Writes Brian Taylor from Bull Housser LLP in a recent BC Real Estate Association memo: “In May 2016, in response to public concern over the flipping of single family residential properties in a surprisingly robust residential market, the provincial government amended the Real Estate Services Regulation concerning the assignment of Contracts of Purchase and Sale (CPS). The amendment is designed to ensure that buyers and sellers are properly advised about the implications of the potential assignment of the CPS. With that disclosure, the parties will be able to negotiate terms and conditions that best suit their particular circumstances. Section 8.2 of the Regulation requires a licensee who prepares a contract for the purchase and sale of property to include in that CPS clauses providing that the CPS may not be assigned without the written consent of the seller and that the seller is entitled to any profit resulting from an assignment of the CPS. This requirement applies to a buyer’s agent who prepares the CPS on behalf of a buyer/client or a listing agent who prepares the CPS for a buyer/customer. Note that development presale contracts under the Real Estate Development Marketing Act are specifically exempted from the requirements of section 8.2.”
BCREA Remains Bullish
“The introduction of a 15 per cent tax on foreign national home buyers in Metro Vancouver is expected to accelerate a moderating trend in the market that began earlier in the year,” said Cameron Muir, BCREA Chief Economist. “However, other regions of the province are performing above expectations and at the provincial level, largely offsetting Metro Vancouver’s deceleration.” The average MLS® residential price in the province is forecast to increase 11 per cent to $706,900 this year and a further 5.2 per cent to $743,700 in 2017.
I get asked often on whether the US still is a good bet? In a nutshell, the answer is yes! Why? There is still cash flow PLUS real capital gain potential in many USW markets. Now we at JREI have a preference for Phoenix, but we stand by our recommendations from January 10 for Portland and in particular Seattle (Chinese are coming!) as well. In fact, I get told every week from one of our members that they are interested in this or that US city and what do I think? Yes, there are a half dozen cities that would be good for both the short and the long term. And a lot of places that would be bad. Remember, just because it is cheap – you still should stay away. We like Phoenix because we have been there for 6 years and we know it. But it is indeed not the only one.
Here are some reasons why we still like it:
- 5 million population
- All major national sports teams
- Large snowbird component (additional buyers to sell to if needed)
- Companies migrating to Arizona – A job that pays $150,000 in California can be had for $86,000 in Phoenix. Employers love it.
- Phoenix predicted to grow by 24% – Arizona state government 2015
- Highest job growth in last 3 years in US – Arizona state government 2015
- Multi-level vacancy dropped from 12% to 4.8% – Colliers International
- Highest average rent increase in USA – up 13%
- Rents from $734 – $861for 1-bedroom apt
Major Point: I am also asked on where – which suburb in Phoenix. We have not changed our mind from our January 2016 (2014/2015) issues, where we asked you to analyze Arcadia, Glendale, Gilbert, Tempe and other areas. (Same for Vegas) For instance, Tempe was named the best college town in the nation this month with ASU 76000 students and 8700 faculty. We’d love to have a building next door. Oh we do. If interested, write me for an info summary. In places like Surprise you can buy a nice house with a pool for $250,000 – $350,000, great place to retire, wide boulevards with medians, lots of golf and sun, sun, sun.
I am re-reading: THE BLACK SWAN by Nassim Nicholas Taleb. His black swan theory describes an event that comes as a surprise, has a major effect, and is often inappropriately rationalized after the fact with the benefit of hindsight. The theory was developed to explain the disproportionate role of high-profile, hard-to-predict, and rare events that are beyond the realm of normal expectations in history, science, finance, and technology. It is an eye opener that makes you realize that both in our business and (yes) personal lives, the major events were not predictable and indeed Black Swans. BC tax was a black swan!
1. Phoenix – Surprise, 3-bedroom house $188,000;
2. Surprise, 3 bedrooms, 3 baths, pool $265,000.
WE RESERVE THE RIGHT to accept or not to accept a specific deal. What makes it a deal? We look for: Low down payments, special discount, and owner carries mortgage, etc. Also note…we do not vet any deal, we just think it may be of interest. You MUST do your own due diligence. Please get contact info from your password-protected website or e-mail Max at firstname.lastname@example.org … and read the disclaimer!
REAL ESTATE OUTLOOK 2017
MARK YOUR CALENDAR – JUROCK REAL ESTATE OUTLOOK 2017 ON SEPTEMBER 24, 2016 IN VANCOUVER.
Our 24th annual Outlook could be the most important ever. Twelve expert speakers will tell where the opportunities – and the dangers – lie in Canada and the United States in the year ahead.
For early bird tickets (your guests only $30), special seating and more information, click onto www.reoutlook.ca
Remember: Subscriber discount for becoming a sponsor with display table booth.
WONDERING ABOUT THE HOTLINE?
Hotline Text Alert System and Hotline Code Changed
To get on the Hotline Text Alert System and receive a text update when the Hotline is ready, please text ‘Jurock‘ to the number ‘393939‘ and you will be added to the system. You will receive no more then one text a week.
The Hotline Code has also been changed. Our new Hotline access code is 8080. The Hotline phone number is still 778-328-8887.
To subscribe to Jurock’s Facts by Email 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.