It seems every other week it’s slow then busy, slow then busy… last week I reported rather stagnant transaction situation, the week before was busy and lo and behold, there was a fair bit of activity in the local urban condo market this past week. Yes the spring real estate yo-yo is in effect. There was a positive gain to inventory last week for the first time in quite a while and that will help keep the reigns on a very hot market. Take a look at the individual activity for any of the condo projects in the urban core a see where it’s popping’ and where it’s not. Activity is picking up at Tidewater and Shorewood which lie at opposite ends of the pricing spectrum. It seems the market is showing little preference for price.
Meanwhile activity in the construction market Downtown continues at a robust pace. I still worry a bit about the local bureaucrats taking too long to approve projects as capital is drying up in this inflationary cycle. One of the ways that Seattle weathered the horrific recession 12 years ago was due at least in part to the huge pipeline of projects with funds already committed to construction. Projects under construction during economic down cycles can provide much needed high paying jobs that can help carry a region through with lesser economic pain. Vancouver is in a very good spot to get projects committed before any economic downturn can dry up resources.
Our fair city has invested large sums of taxpayer money into infrastructure and tax deferrals to help generate this amazing boom. In fact the city has done an admirable job in this regard through multiple mayoral administrations. But there remains a duty to the public to ensure that those funds result in the fruition of the ideas presented to the public when taking these steps and making the public investment. It is here, where the city can act quickly to secure projects that can carry us through a slower economic cycle that may be lurking on the near horizon. This will allow the city in return to collect far more taxes on the increased value of real estate in the area.
They have been taking run down former industrial sites that were providing little or no taxes to the city and in some cases even creating a liability for the taxpayers, then converting them into powerhouse revenue generators allowing the city to fund needed upgrades to city services that benefit all Vancouver residents. This is a good thing. Taking the lesson from 2009-2011 when the recession hit and construction all but died for five years, is well advised. A few projects that opened in those years were those that were funded prior to the market collapse. The city is in a prime position to get public and private projects funded prior to any downturn. These projects can literally carry a city through slower economic times. Cities are also equally capable of delaying projects to the point of eliminating them all together. The salty stock market right now is pushing cash into other investment vehicles including real estate. City officials and developers need to get in gear and grab that capital while they still can. Large real estate projects have been known to capture capital and carry it through a recession.
Here’s hoping for a soft landing at ‘Economics International’ 🙂