Kirkland Tower is Underway

After breaking ground in June and erecting a 'coffer dam' last month, Kirkland began digging a 30 foot hole in the ground this month. Over the next several weeks the crews will pour concrete into what will ultimately be a couple of levels of underground parking and other underground infrastructure for two new buildings on the Vancouver Waterfront. A tower crane should be erected shortly thereafter to aid in the construction of this exciting property.

Rendering from Kirkland website

Kirkland Tower is a 12 story residential building that will have 40 luxury condos with 1, 2, and 3 bedroom floor plans. The tower will be erected immediately adjacent to the new Indigo Hotel which will be an 8 story open atrium structure. The Kirkland condo owners will have access to some of the hotel's amenities and that is a unique arrangement here in America's Vancouver. 

Although Kirkland Tower is far from the tallest building planned at the waterfront, it is the tallest one so far under construction. The 12 story Timberhouse project has not broken ground yet. I wrote an article a few weeks back, about the potential value opportunity to buy a condo downtown as these new condo units start coming online over the next few years. Even waterfront properties further upstream such as the units in Columbia Shores may be vacated to take up residency in the new Waterfront Project.

11th Floor View, Kirkland website

Kirkland's website has renderings and other tidbits about the development including a view shot from every floor in three directions. This view is listed as the North View from the 11th floor. This viewpoint will offer a cosmopolitan view of downtown and even Mount St. Helens.


Although I don't see a glut of condos coming so long as the economy continues to chug along at a healthy clip. New jobs and higher pay will lead to real estate mobility and that leads to the move-up market enjoying success.

Rendering from Kirkland website

The waterfront properties such as Columbia Shores has always been hard to get as there are few units right on the water. The massive Vancouver USA Waterfront will add units to the list. Those looking for both an urban experience and a waterfront experience can do it all on the new waterfront. 

Although these condos at Kirkland are likely to be very expensive, other projects in this massive $1.5 billion development will be priced a little more in reach of upper middle class earners. Condos already built in developments such as Vancouver Center, may become available and some of those units are well priced especially in Vancouver Center 3 which overlooks Esther Short Park.

Things are looking up here in America's Vancouver and the real estate market is moving with a roar, particularly with these high density projects underway. 

The Gap Between the Bottom and Middle is Tight, For Now

Have you felt trapped in your house over the last few years? Biding your time waiting for the real estate market to correct so you can sell? 2015 may be the year for you. Over the last two years here in Clark County we have seen a roughly 20% increase in the median sale price. Many people that were not able to sell now may find themselves in a positive situation. We very well could be at a turning point of opportunity. For people that are making a move up in price, selling their less expensive house now for a slightly lower amount than they might get next year could prove advantageous. The more expensive house they want will also likely be more expensive. So selling a small house for less to get a big house for less sometimes makes sense.

I saw prices on entry level houses flatten a bit in the second half of 2014. I believe that the market for the 40 year old 3 bed 2 bath home is just about as high as the economy will support right now. Barring any dramatic improvement in the overall economic condition 2015 is a great time to sell an entry level home. Where the market continues to see improving prices is that middle move up. Last summer I ran into situations where a simple 1400 foot ranch home would sell for $220k and a gorgeous 2100 foot home in the same area was fetching just 10% more. I believe that the gap in those market segments should widen this year as the entry level could be flat and the middle will continue to swell in values. Selling the little house to get a big one is prime for 2015. Some people may even find that their house payment is only marginally higher since rates are quite low right now.

Generally a real estate market rebound will begin at the bottom. The bottom of the market can drive the middle. If the bottom is soft so will the middle be. When the bottom begins to move up in value the middle is going to trail behind for at least six months. So that leaves a window to move from the bottom to the middle with the move up house feeling like a bargain. Once the bottom hits the high plateau then there is only a six month window of opportunity to capitalize on the middle lagging behind on growth. This is the gap between the market segments. As an example, entry level homes that were fetching $160,000 two years ago are now selling for $200,000. But the middle houses that were getting $220,000 two years ago are running about $260,000 now. The 25% gain at the bottom and a 16% at the middle translates into a relative deal for the move up buyer. This year there is a good chance the $200,000 house will only rise a little maybe to $210,000 but that middle market is showing signs of activity suggesting the 260,000 house will get to $285,000 this year. So holding out for an extra ten to buy a house that will cost an extra 25 may not be the best approach.

Keep an eye on the real estate trends. Have your favorite Realtor® send you listings so you can keep your finger on the pulse of the market. I can only see trends, I am no Nostradamus, so anything can happen. Real estate is however a very trend based market and it typically follows modestly predictable patterns. Let me know if you have any questions and feel free to comment below.

The Investment Trap

Many buyers fall into a trap when looking at homes. This trap is especially common during a market that is robust and appreciating. This is what I call the "investment trap". I wrote about this in a chapter of my first book in 2010 (Don't Panic, Now is the Time to Supercharge Your Portfolio, America Star Books, 2010). What is the "investment trap"? Read on...

To understand what I mean by this we first must look at the core reason people choose to buy a home rather than rent. There are many advantages to home ownership but there are some disadvantages too. So buyers are making a choice between the two. Today I am skipping the reasons for and against and working under the presumption buyers have made the choice to buy. Most buyers however, and there are a great many surveys that validate this, buy over renting because of the "investment" opportunity in the house.

First of all understand that there is a legitimate investment opportunity in buying a home. The opportunity lies in the creation of equity through appreciation and reduction of principle over time. But many buyers spend way too much energy worrying about the investment angle rather than the suitability of the property for its intended use. All too many buyers treat the purchase process as if they are buying an investment property to rent out rather than a property for which they will live.

In the book I query the notion that if a buyer wants to treat a home as an investment then they should be renting out rooms to tenants to maximize the investment. This may seem extreme, but many buyers miss out on the perfect house because they low ball offer in a seller's market, looking for an investment deal. The real estate market is a commodity market like any other. It is cold and ruthless and does not care about the plight of those who ply its roads. There is nothing wrong with looking for a deal but at some point buyers need to take the counsel of their trusted real estate professional. If a buyer does not trust their agent, then perhaps they need a new agent.

If a buyer is seeking a house to live in, then that house is first and foremost their home. It is designed to provide safe and comfortable shelter for their family. That is the primary function of the home. It is secondarily an investment opportunity. Those that insist upon seeking a "deal" often miss out on the best value of all, which is the perfect home for their family and lifestyle. In an appreciating market the equity advantage is near parity across the whole of the market. Don't get me wrong here; a trusted professional should be looking out for buyers by helping them negotiate the best terms possible once the buyer has chosen a home. Buyers need to be aware that some houses are priced right.

Owner occupant buyers are well advised to look at homes that will provide them with the most comfort and convenience within their budget. Once that home is found they can work out the best terms possible in the marketplace. In my experience appreciating markets do occasionally produce overpriced listings from sellers trying to capitalize on the upswing in values. A professional agent that knows the market well, can help buyers identify an overpriced listing and advise them on a solid offer that gives them an opportunity to get the lowest price possible on that particular property. A well priced property in this market will likely get sold at full price and rather quickly. Under priced homes are often selling instantly with multiple over asking offers. There are some nuanced exceptions, but like I said before, the market is cold and ruthless.

Those buyers caught in the "investment trap" that place the investment value of a listing in front of the value it can provide as a "home" often miss the best opportunity of all. There is a secondary "trap" as well. In an appreciating market prices will likely get higher rather than lower. Every time a buyer misses out on a home the next one that comes on the market may be more expensive than the one they passed over or lost in the bidding exchange. They are also at risk of unfavorable interest rate changes that create greater expense and reduce the investment value. These buyers may end up "settling" for something less than ideal when the best option was missed.

The investment trap often keeps buyers from getting the very best house for them. Sometimes the ideal house is not the best "deal". In the end buyers will find that almost any home they choose over a long term will be a solid investment. I believe many a great opportunity is lost when buyers buy a house instead of a home because they put investment value first rather than second where it belongs.

Jumbo Loans are Cheap, Think Big!

If you are able to consider homes in the 500k plus price range, this could be the best opportunity in a lifetime to own the home of your dreams. Prices have been on the upsurge in most markets all year. The high end market tends to trail the bottom.  Prices on the big houses are still pretty competitive. Now word has it, Jumbo loans are priced better than conventional right now! That 1.2 million dollar home from 2007 is still priced at 799k. With rates in the proverbial basement, why not make the move up. Below you will find an article written recently by NAR President Gary Thomas, with some insight.

By NAR 2013 President Gary Thomas

If you’re considering how nice it would be to own a larger home, this may be the time to buy.For the first time in history, interest rates on jumbo mortgages actually fell below the interest rate of conforming 30-year fixed-rate loans.

As REALTORS® well know, jumbo loans are those over the local limit that can vary from $417,000 to $729,750, depending on the county.Traditionally, consumers who needed a home loan bigger than a conforming mortgage would pay a higher rate of interest for the privilege of borrowing more money—often a quarter of a percent or greater, and for a brief period it was nearly two percentage points. But with mortgage rates much higher than a year ago and declining profits from refinances, banks have become more aggressive in pricing mortgages. As a result, it is now cheaper to borrow in the jumbo market which is currently dominated by private lenders.

With interest rates at historic lows, more buyers are willing to stretch to buy bigger properties and more buyers are able to qualify for a jumbo loan. But even non-jumbo home buyers should look into the competitive rates at banks and credit unions.

There’s no telling how long it will continue, but this unusual circumstance may offer an opportunity for REALTORS®. Think big!

Published 10-2-2013. Source, National Association of Realtors "Super Size It"