Canada's Housing Bubble

Feb 16, 2011 Shelley Fralic Vancouver Sun

The average new homeowner is purchasing a fixer-upper on the edge of the city that 20 years ago would have been a teardown

Some major truths about Metro Vancouver real estate today, or what you might hear if you eavesdropped on first-time homebuyers pacing the waiting room of a mortgage broker's office.

There is no good time to buy, because the market is always hot, even when it's not, and prices never go down much, even when they're supposed to be slumping.

In fact, there is no such thing as an affordable Vancouver house any more, unless seven figures don't faze you, because no matter what economists have been saying for decades, the local bubble refuses to burst.

And then there's this: Even if you manage to come up with a down payment, you'll likely be a single-digit interest rate hike away from bankruptcy, and someone you don't know will be renting the basement suite you had to build in order to quality for the mortgage in the first place.

Oh, and a fixer-upper is the new black.

That's because most houses for sale on the MLS for the Vancouver region, at least the ones still in the six figures, the ones that don't require an inheritance or a bank heist to purchase, require, well, a little work.

Many are found on the edges of Vancouver, to the east and south, small postwar stucco bungalows and turn-of-the-century wood-frame piles that are short on bathrooms and bedrooms and need insulation and sometimes foundations because they've been long listing to starboard.

These are houses that first-timers who can't bear to leave the city are investing in, to raise their families and build their futures. Houses like the 100-year-old Vancouver east-side fixer-upper that recently sold for $800,000, which was $151,000 over its list price after a bidding war.

They are houses with history, of course, and not all of it is good, and if they have been updated at all, it's often not pretty, or legal, or safe.

The wiring is old, the roof is four layers thick, the windows are single-paned and the drain tiles -- well, there often aren't any.

The taps drip, the linoleum's curling, the front porch is rotten and there are mouse droppings all over the cold concrete basement where the new tenant will be sleeping.

Twenty years ago, these houses would have been teardowns.

Today, the average new homeowner in Vancouver is buying a reclamation project.

James Burton is here to help. He's a Vancouver architect and fixer-upper veteran.

That's why this weekend he will once again be teaching shell-shocked new property owners just what lies beyond that paint-peeling front door.

It's fitting that his course, part of the Vancouver Heritage Foundation's Old School lineup, is titled Avoid the Money Pit: Planning and Managing Your Renovation Budget.

The daylong $125 seminar, being held Saturday at the Strathcona community centre, is about being prepared for the financial abyss that is a fixer-upper, as well as about vision and planning and expectations versus realities, about dealing with the trades and city hall and managing the art of the compromise, about repair versus replacement, and the critical path that is the time line.

For one thing, there is much vocabulary to learn, like what it means to preserve, rehabilitate or renovate a property, because they're all something different, with specific rules and regulations and esthetics to apply.

To provide visual incentive, Burton will present several rehabilitation case studies, one of them the Japanese Hall on Alexander Street, and the other a walkabout visit to his own Georgia Street old-timer.

And although the money pit course does attract professionals, such as contractors, more and more homeowners seem to be seeking reno information, says Burton, a trend he's noticed both in past seminars and in his architectural practice.

And he has some basic advice for those contemplating the purchase of a hurting house.

For one thing, as the course emphasizes, it's important to "relate the work to what the city would want to see in terms of heritage conservation and character," Burton said.

For another, "less is more. There are things about old houses and buildings that don't suit modern living ... but usually you don't need to go crazy in terms of tearing out things."

An important tip from the expert, because if you have just sold your soul for a local patch of dirt and fir floorboards, you'll soon discover that the only sure thing about real estate in the Vancouver area these days is that, like death and taxes, you're now the proud owner of a money pit.

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