THE LOW DOWN ON LOW FEES

The common cents of strata fees
Keeping costs low may put future building maintenance, repairs at risk
By Tony Gioventu, The Province
June 19, 2011

Q: Our strata council is under a lot of pressure from our owners to keep our strata fees down, but it means we are going to have to reduce maintenance and services to our building.

We have been checking out strata fees in the Abbotsford area, and while we are a bit on the higher side, we do have some additional services that other apartment complexes do not.

Is there some way to compare our strata fee rates in a 61-unit woodframe building with other regions of the province? It would be helpful if there was some way of knowing whether our fees are in line or not.

We had a real estate agent at our AGM in May who recommended we keep our fees low and simply have special levies when we needed them for repairs, but that appears to us to be self-serving for the agents and not realistic for the strata corporations to be able to operate; and if we maintain strata fees at exactly the same rate as last year, we will likely be facing a

A: Comparing your fees to another strata corporation will only establish a comparison of the amount, but will not take into consideration any of the services, amenities, maintenance or operational functions, geographic variations, landscaping functions, or even the basic building construction and durability of each of the properties.

Strata fees are set by approving the annual budget. The annual budget is proposed by the strata council to the owners at the annual general meeting, and based upon the amount approved in the annual budget and the contribution to the contingency reserve fund, that amount is used to calculate the monthly contribution of each strata lot.

We did a research comparison in 2008 between two almost identical properties in Richmond and Nanaimo.

Both were approximately the same age, design, number of units, basic construction, and offered the same services. Both had central heating and hot water which were included in the monthly strata fees and had a comparable history of operations. The one main difference was that strata fees were almost 50-per-cent higher historically in the Nanaimo strata, and the main influence was an integrated maintenance and operations plan in their annual budget.

At the time, the Nanaimo strata was not facing any special levies for major repairs, while the Richmond strata was facing two levies for roofing and balconies.

The process of annual budgeting really has little benefit if a strata corporation has not created a maintenance and operations plan and simply agrees that last year's budget seemed to work because it balanced at year end.

What you should really assess is: "What did we leave out last year?" A basic inventory of your major building components and an understanding of the maintenance and inspection requirements each year will have an overwhelming benefit to your strata corporation if you provide enough funding to meet those obligations.

With an aging strata inventory, the grim reality of neglected maintenance and repairs is rapidly setting in. Much of that problem is caused by underfunded budgets and low strata fees, the genesis of which was often created by the development industry showing artificially low budgets to make new housing more affordable and attractive.

Consumers are now faced with rising special levies for the replacement and renewal of major building systems that have not served out their full life expectancy, often due to neglect; and that neglect is usually linked to lack of funding with no planned maintenance and operations plan.

In addition, rising energy costs are absorbing the desperately needed increases for maintenance and renewals.

If you show a simple graph of a building aging and the costs to operate, both lines should run on a rising parallel.

For every year a property increases in age, the life of the roof, windows, balconies, plumbing, elevators, proportionally decreases until they are renewed. The more important question ever yone should ask: " Are our strata fees high enough?"

Tony Gioventu is executive director of the Condominium Home Owners' Association.

SOME WILL BURN A HOLE IN YOUR POCKET!

Pocket-(Sized) Listings: Homes Under 550 Square Feet for Sale

Jun. 17 2011
FORBES MAGAZINE

Size is not everything, especially if you ask a small, but mighty movement of people who prefer 400 square feet of real estate over 4,000. People who choose to live in smaller-sized homes cut down on living costs and since the recession and housing bust, the trend is really catching on, says Kent Griswold author of TinyHouseBlog.com.

These small homes can encompass a range of sizes, all the way down to a 84-sq ft home in Olympia, WA that was featured in NPR’s “tiny house movement” video.

"People are trying to downsize their lives, get rid of debt,” Griswold said. “Your cost of living is lower, your utilities don’t cost nearly as much. It changes your whole attitude — you’re in a small space, you only have room for so many items, it’s a lifestyle change.”

While some people purchase land and build their own small homes through kits, like, Cusato Cottages, others just choose to buy or rent homes that are smaller in size. Interested in downsizing your life? We rounded up a few small homes for sale, each with dimensions around 550 square feet or below:

6559 Beach Dr. SW Seattle, WA
For Sale: $335,000
Square Footage: 460

This romantic and private bungalow is nestled on prime Seattle real estate along the Puget Sound in the West Seattle neighborhood of Seaview. Built in 1926, the log cabin has original leaded windows, a claw-foot tub, stone fireplace and darling nook-sized bedroom.

15 Napier Ln San Francisco, CA
For Sale: $1,230,000
Square Footage: 550

Own a piece of San Francisco history by purchasing this piece of Telegraph Hill real estate. Built around 1884, this home is one of the few Telegraph Hill homes that survived the 1906 earthquake and fire. The two-story cottage was remodeled in 2002 and 2003. The 2-bedroom, 2-bath home has partial views of the bay and an open floor plan that makes it feel more spacious than its 550 square feet.

741 Wilcox Ave Los Angeles, CA
For Sale: $549,000
Square Footage: 528

It’s no secret that Hollywood real estate is pricey and this 2-bedroom, 1-bath bungalow is one prime example. Despite the home’s small size, it boasts a variety of amenities that up its home value, including a large entertainment-sized deck with hot tub and pergola, as well as a gated courtyard at the entrance of the home and hardwood floors throughout. Built in 1921, this little house was last sold in 2009 for $265,000.

9 Lincoln Ave Hampton Bays NY
For Sale: $599,000
Square Footage: 488

This updated piece of Hampton Bays real estate is a tiny alternative to a vacation condo. Set on Tiana Bay, the cottage has 50 feet of private beach access. Built in 1991, the home has undergone a complete remodel with updates to the kitchen, bath, electric and plumbing systems. With an open floor plan and high ceilings, the 1-bedroom, 1-bath house is a perfect summer hideaway.

7 S Maine St Kennebunkport, ME
For Sale: $385,000
Square Footage: 280

With only 280 square feet of living space, this piece of Kennebunkport real estate makes some New York studios look spacious. A part of Cabot Cove, a cottage beach community, this cottage has been professionally landscaped and furnished. The cottage has views of the cove and river and can be used as a primary residence, or summer rental.

527 Berkley St Berkley, MA
For Sale: $67,600
Square Footage: 478

Built in 1921, this 1-bedroom home is listed on the Berkley real estate market as a “great condo alternative.” The 478-square-foot cottage sits on a wooded lot just over half an acre just four minutes from Berkley’s city center, and about an hour’s drive from Boston.

507 N 21st St Wilmington, NC
For Sale: $119,900
Square Footage: 500

Sitting at 500 square feet, this World War II-era bungalow is within minutes of downtown and a local beach. The “move-in ready” 2-bedroom, 1-bath home was previously listed for $127,000 on the Wilmington real estate market.

2702 N. Ardmore Ave Manhattan Beach, CA
For Sale: $685,000
Square Footage: 498

Listed on the prestigious Manhattan Beach real estate market, this 2-bedroom, 1-bath home has been completely updated since its construction in 1954. The 498-square-foot cottage has a slate fireplace and brand new kitchen and bath. The house includes a breakfast nook, extra room, and gated front yard.

ALOHA CANUCKS!

Hawaii's house prices grab Canadians' attention
Foreclosures driving the market
By Grania Litwin, Postmedia News
July 2, 2011

Snorkelling, swimming, surfing and suntanning aren't the only reasons Canadians visit Hawaii these days.

They're saying aloha to condos and homes that have plummeted in price as much as 60 per cent since January 2008, while the Canuck buck soars. Why buy a cottage on a lake in B.C. or Alberta, when you can laze on a beach with gardenia breezes?

"What's really driving the market is foreclosures," says Re/Max Resort Realty's Howard Dinits, who lives on Maui.

"Many island properties here were bought as second homes by speculators in the States. In the economic downturn people used revenue from these holiday rentals to make payments on their main homes -then defaulted on the island properties. "In some areas prices have dropped 40 to 60 per cent and it's as bad as Phoenix."

He gets calls and emails from Canadians daily. "Some are waiting for a bell to ring that says we have hit absolute bottom," he jokes. "Others have pulled the trigger because in Maui we're having a half-off sale."

The loonie, valued at 62 cents US almost a decade ago, hit $1.05 in April. That means a million-dollar property in Hawaii, that would have cost a Canadian about $1.6 million in 2002, is now under a million.

The best values are on the big island. "In Maui, you need two wallets -on Hawaii you can survive on one," Dinits says. "You can get a nice house on Hawaii today, six blocks from the ocean, for $66,000. That would be a bank owned foreclosure, or REO (Real Estate Owned) deal."

The Hawaiian capital, Honolulu, is on Oahu, where property values declined only 7.1 per cent in the last year thanks to a more stable population and U.S. military base.

While cheaper homes sell fastest, on Maui more than 250 homes sold for over $1.8 million last year. A typical condo now sells for about $250,000, while a typical house is $480,000.

Dinits sold Ottawa businessman David Renfroe, 38, a two-bed, two-bath condo in the Maui town of Lahaina last year for his growing family. "We went over looking for a bank foreclosure," Renfroe says. "With our strong dollar it seemed like a no-brainer."

After doing his due diligence, he made a lowball offer and was shocked when he got it. "We paid $245,000 for a condo previously priced at $550,000. We were thrilled."

He has reserved several months for family and friends and rents it the rest of the time.

"Everybody here is looking at Florida, but there's hurricanes and 20 per cent unemployment there. I think the Hawaii market will come back quicker."

Dinits recently sold two oceanfront condos to a Lillooet couple: a one-bedroom for $250,000 and a two-bedroom for $300,000. Both are available for vacation rental, which is important, as strata fees can be $800 a month.

Another young Canadian family recently bought a vacation home in Lahaina for $245,000. "It's managed by a company that rents it, cleans it and had it 90 to 100 per cent rented all winter at $195 a night." The unit was worth $500,000 in 2005.

The best deal he has seen most recently was a $123,900 condo previously valued at $289,000. Located at the north end of Kihei, a block from the beach, it had a recent $40,000 renovation and features two bedrooms, two baths and two parking stalls.

"There's no pool, but it's a block from the 'big' pool. And strata fees are under $400 because of that," says Dinits, who closed 67 deals last year.

The most affordable living is in Hilo or Puna, on the lush (rainy) side of Hawaii. Here a three-bedroom, two-bath, 1,200-square-foot home, built five years ago goes for $125,000 to $175,000. Not all neighbourhoods allow vacation rentals, however.

"Raw land sold for $75,000 an acre in Puna in 2008. Today I just sold some for $19,000."

There are deals at the top end, too. A Lahaina house was just listed for $1.25 million. Completely remodelled, it has a pool, ocean views, four bedrooms and 2,600 square feet; it was $1.88 million three years ago.

Hawaii has a 10 per cent federal and five per cent state withholding tax, to force people to pay the 15 per cent tax on capital gains. It does not apply if a person sells for a loss, or reinvests in more U.S. property.

Dinits doesn't see prices strengthening any time soon.

"I don't think we'll see irrational appreciation in the next five years, although Americans do have amnesia."

Oahu real estate agent Kalama Kim agrees. Kim is with Coldwell Banker and specializes in Waikiki, where the median price for a condo is $296,000.

"Canadians now make up 15 per cent of the traffic at open houses and there's lots of inventory," says Kim, noting there are 487 condos for sale in Waikiki.

Jay MacMillan, of the MacMillan Team in Edmonton, is doing brisk business in Maui these days.

He has made three sales this year, in addition to his father, who bought a condo six months ago, and his brother, who bought two.

"All of them are cash flowing." Strata fees are steep because pools, barbecue areas and lush landscaping are expensive to maintain, "but there is money to be made.

"Prices have dropped while the rental market is still extremely good -and it is so easy to hop on WestJet and get there.

"Instead of buying recreational properties on lakes here or in B.C., people are getting places in Maui for the same price."

Photo by: Altus

CELEBRATE GOOD TIMES

Calgary MLS sales top year-ago levels

First time since April 2010
By Mario Toneguzzi 
June 30, 2011

CALGARY — For the first month since April 2010, MLS sales in both the single-family and condominium markets in Calgary will show year-over-year increases in June.

According to preliminary data by realtor Mike Fotiou, of First Place Realty, from June 1 to June 28, there were 1,267 single-family MLS transactions in the city and 531 condo sales, topping the entire month of June 2010 sales for each category.

A year ago this month, there were 1,061 single-family home sales and 445 condo sales.

Christina Hagerty, a realtor with RE/MAX Realty Professionals, said the industry started feeling a resurgence in the real estate market in the last quarter of 2010.

“Unlike many other parts of the world, Canada, and in particular, Alberta is a safe and stable place to call home,” she said, adding demands in the oil and gas industry will lead to more people coming here for work.

“The inner city is usually the last to feel any downturn and the first to recover. Now, more than we’ve felt in a while, people are moving. Expats from the U.K., U.S. and other areas across the country ... are coming here.”

So far in June, the average MLS sale price for a single-family home is $476,413, down slightly from June 2010’s average of $481,964, according to Fotiou’s preliminary, unofficial data. The condo average sale price this month was $297,984, up from $292,238 a year ago.

Hagerty said phones are busier today. Builders are confident to start building homes again. And conditionally sold and sold stickers “dot the streets.”

Photo By: Cuppojoe

THOSE ARE RESULTS

Resale Flexes Muscles
By Marty Hope
Calgary Herald June 11, 2011

May was a relatively strong month for resale residential activity in smaller centres surrounding the city, says the Calgary Real Estate Board.

There were 395 sales in May, an increase of nearly 17 per cent from the 338 for the same month last year, it says.

But from January to Mary, 2,386 homes changed hands, down from the 2,676 deals for the same period in 2010.

In terms of average price, both the May and the five-month averages trail year-ago figures.

Last month, the average was $343,071, down from $363,231 a year ago -while the five-month figures are $348,840 and $358,879 respectively, says the board.

LRT - LONGER RIDE TOLL-FREE

Calgary considers expanding downtown LRT free-fare zone
By Richard Cuthbertson
Calgary Herald June 13, 2011

CALGARY — Extending the LRT free-fare zone to the Stampede station could create security headaches at the platform, and may encourage commuters to park in the area and then cram onto busy trains travelling into downtown at peak hours.

This is according to a report heading to a city committee on Wednesday that looks at the advantages, and the drawbacks, of broadening the section of the LRT network where people can ride without a ticket.

The report also confirms Calgary Transit will lose up to $2 million a year in revenue if the free zone, which currently stretches along 7th Avenue, grows to include the Victoria Park/Stampede station.

But the proposal still has merit for the organizer of a major expo this coming weekend, who suggests some middle ground can be found in the whole debate.

“Ultimately, what does every special event, what does every convention need? They need people,” said Kandrix Foong, the organizer of the Calgary Comic and Entertainment Expo, to be held at the Stampede’s BMO Centre.

“If you add a couple extra elements to your show that can tilt the favour of whether they’re going to come out to your show or not, then obviously it’s worth it.”

He suggests something be worked out where people attending conventions at the Stampede grounds could to ride the LRT for free.

The report looks at a proposal spearheaded earlier year by three aldermen to create a “seamless event package” by connecting Stampede Park with the Telus Convention Centre through public transit.

The proponents on council said in their motion the change would lead to economic spinoffs by attracting bigger events and raising the appeal of Calgary as a host of conventions and conferences.

The problem, according to the report, is it is difficult to quantify how economic benefits of major events relate to transportation.

Meanwhile, the financial hit to Calgary Transit of extending the zone is pays for between 40,000 and 50,000 transit hours.

The report also suggests extending the free-fare zone would bring questionable characters to the Stampede platform, and transit security would have to be adjusted.

“These individuals can cause disruptions and make other customers uncomfortable,” the report says.

“Extending the free-fare zone would provide a greater range for these individuals to operate.”

Making it free will also encourage more people to park in area and then take the train into the downtown for work, creating “operational issues,” according to the report.

That will lead to complaints of bad service when people at the Stampede platform can’t get on the LRT because the trains are full heading into downtown, the report says.

Ald. Druh Farrell said extending the free-fare zone is a bad idea, adding the current zone along 7th Avenue has become a hub for vagrancy.

“To extend that outside the free-fare zone would be problematic,” Farrell said.

“It would just extend the problems outside of the downtown and make it very difficult for the police to monitor.”

Farrell said she also worries that if the free-fare zone is extended outside of downtown, those affected communities will turn into park and ride lots.

If the city wants to boost tourism, it could introduce a multi-pass giving admission to various sites in Calgary, with public transit included, Farrell said.

VACATION TIME!

Recreational property markets bouncing back: Re/Max
John Morrissy
Jun 13, 2011

OTTAWA — Canada’s recreational property market appears to be bouncing back from a recessionary lull as buyers seek to capitalize on equity and stock-market gains, Re/Max says in a report Monday.

Demand rose 78% in the 46 markets across the country covered by the realtor’s Recreational Property Report, while sales had risen or were on par in 41% of those centres.

“Buyers who held off during the recession are back in recreational property markets from coast-to-coast,” says Pamela Alexander, chief executive of Re/Max for Ontario-Atlantic Canada. “Their patience has been rewarded with more affordable recreational values and greater inventory levels.”

While prices have remained stable in many markets, values could be found for higher-end properties, pushing luxury sales higher in almost half of the markets examined, Re/Max said in its report.

Opportunities were also to be found in Western Canada.

“Prices are down as much as 20% from peak levels reported in 2006-2007, bringing ownership within reach to many potential purchasers,” said Elton Ash, regional executive vice-president of Re/Max in Western Canada.

On British Columbia’s Salt Spring Island, for example, starting prices for oceanfront properties have fallen to $669,000 today from $1.3-million in 2008.

In the North Okanagan Valley, a three-bedroom, winterized recreational property on a standard-sized waterfront lot — the common measures used in Re/Max’s report — that sold for $1.5-million in 2008 now sells for $995,000.

Starting prices for similar properties on Alberta’s Sylvan Lake are now at $800,000 from $1.25-million previously and in the Rocky Mountain resort town of Canmore, a two-bedroom condo has fallen to $229,000 from $320,000.

“The strengthening oil sector has . . . brought Albertans back into mix, driving demand for both local and coastal B.C. properties,” Ash said.

Another factor influencing the recreational property market has been that Americans who bought when the Canadian dollar was at 65 U.S. cents are now cashing out, boosting inventories.

The report found that there has been some tightening for entry-level properties in about one-third of the markets covered. As well, it noted, the supply of properties has tightened considerably at the lower end in Ontario, Quebec and Atlantic Canada.

It also noted that recreational properties are moving more toward year-round homes, with fewer traditional cottages available for sale.

“These waterfront properties are disappearing from the landscape. Meanwhile, today’s average recreational getaways are truly earning the distinction as the “home away from home,” with many of the bells, whistles and comforts of their residential counterparts.
 

Photos: The Shores In Tofino

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