Peering into the 2011 housing picture

By Bob Ransford, Special to the Sun December 31, 2010
At this time of the year, I am always tempted to try to make a prediction about how the year ahead might unfold in terms of real estate markets and housing prices. The “price” question is always a topic of public conversation in our part of the world, regardless of whether we are cursing untouchable prices during boom periods or commiserating about the dwindling value of our precious investment in our homes during market slumps.
But I’ve avoided the temptation to make a prediction in years past and will do so again this year because I am conscious of the reality that housing prices are all about supply and demand. I simply don’t track market statistics close enough to reliably analyze supply and demand.
I am also reminded that it has usually been forces external to our market that have tipped the supply-demand balance noticeably in one direction or another. Those tips have been small ones, either spiking the long, steady upward trend line in prices for a number of months or twisting the line down for a few months before it recovers again.
What I am trying to say, without actually making a prediction, is that I don’t see ahead any huge and long-lasting departure from the trend of rising residential real estate prices in Metro Vancouver. We’re either currently at the end of a small recovery surge, in which the trend line will level out somewhat for a short period, or we may be at the beginning of a new steady upward climb, likely one slower and more normal than we experienced during the most past real estate booms.
In short, people from around the world continue to want to settle in Metro Vancouver, and many of them consider our housing prices still relatively very affordable. Meanwhile, the largest cohort of the population already living here continues to age and those within it are reaching a point in their lives where new and more appropriate forms of housing are on their list, or will soon be. As economic cycles continue to change, we will once again see even more promising job growth, also creating further demand for housing among first-time buyers.
Finally, we have a limited supply of land that can be developed and a population still blind to the reality that we will need to welcome greater density in our suburbs, as well as our inner cities, if we want to preserve our quality of life.
This all points to my belief, rather than my prediction, that investment in residential real estate today in Metro Vancouver is a pretty solid investment that will pay off over the long term.
Now, I want to move on to make a few other predictions about what we might see in the year ahead with real estate, development and urbanism in Metro Vancouver in the year ahead. I am going to give you my quick list of predictions, together with my personal wishes and hopes related to them. A year from now, we can review all of this and you can then determine whether I was hoping and dreaming or seeing some signs and trends.
First, the relaunch of the sale of condominiums homes in the Olympic Village will see buyers jump at some real bargains, and this sales campaign will make an impressive dent in the inventory that remains with this beleaguered, but important, inner-city urban renewal project. I hope this first round of price adjustments won’t lead to political pressure for a full-on fire sale. Patience will bring better prices — perhaps prices not high enough for the city to recoup its significant investment, but prices that should at least compensate for current holding costs.
My second prediction is that over the next year, you will hear Vancouver city councillors talk about a new process of engaging citizens in discussions about change in their neighbourhoods. They will talk about empowering citizens in an effort to try to move beyond the rancour and distrust that has erupted over the last four or five years, every time the planning department has tried to plan for change or review a new development application.
This coming year is a civic election year, so most of what you will hear around this will only be talk, rather than action. The last thing politicians want to do is incite even more rancour and distrust by implementing a change in process, even though they know this change is long overdue.
My hope is that we move quickly from the talk stage to the action stage and totally revamp the way the city does its planning. As I have said in previous columns, we need a city-wide master plan for Vancouver, and it needs to be one that is drafted in collaboration with citizens. It also needs to be a plan that is graphic and detailed enough for people to see what change looks like in their neighbourhoods. It has to be a realistic plan that recognizes forces of change beyond anyone’s control and it has to be one that has both enough certainty and regulatory power that citizens working with city hall can begin to manage change, especially in Vancouver’s first ring suburbs.
My last prediction relates to how Metro Vancouver will try to manage change in the region. Metro Vancouver’s regional growth strategy will get adopted this year. The product of at least half a decade of circular talk, horse trading and less than creative or ambitious planning will end up getting adopted simply because everyone is exhausted talking. The local politicians who make up Metro’s board can’t seem to see beyond their local boundaries and visualize the region as a whole.
At the same time, those same local politicians who gather as regional “leaders” will continue to try to unload the responsibility for funding regional transit to the province, not accepting that sound metropolitan planning requires land-use and transportation planning to be inseparably tied together and, yes, planning and funding do go together.
My hope is that a new provincial government will perhaps see long-term housing affordability and regional sustainability threatened by the adoption of this cop-out regional plan and by the stalemate over transit funding. I hope they will act on what was supposed to be the second phase of the Community Charter reform of seven years ago and create a new model of regional governance that is effective and accountable.
The urban agenda remains an important one as 2011 dawns. There is no better urban place in the world to debate that agenda than here in Metro Vancouver where our urbanism is the envy of many.
My final prediction is that Metro Vancouver will remain one of the best urban places on the earth to live.
Happy New Year!