It wasn’t all that long ago that the prospect of buying a detached home in the City of Vancouver for under $1 million seemed like a dream from another era.
The so-called “million dollar line” that used to divide Vancouver’s east and west side has now crept well into the suburbs, and back in January there was just one such property in the city listed and sold for under the $1 million bar.
That appears to be changing, as B.C.’s real estate market enters what some analysts believe is a sustained downward trend.
As of Oct. 26, there were at least six detached homes in Vancouver with a sub-$1 million sticker price.
PHOTOS: Six Vancouver detached homes listed for under $1 million
“I think we’re in the midst of a correction right now,” said Vancouver realtor Steve Saretsky.
“When one or two start to sell like that it sets a new benchmark, it’s what buyers start to expect or anticipate.”
Saretsky said rising interest rates and new housing taxes have helped to bump inventory in the City of Vancouver to levels that haven’t been seen since 2012.
Those numbers are reflected in data from the Real Estate Board of Greater Vancouver, which reported listings across the region were up 38 per cent year over year, and 10 per cent since August.
WATCH: In this map, Metro Vancouver turns red with $1-million single-family homes
With all of those listings stagnating on the market, the psychological dynamic has flipped and buyers are now waiting longer to pull the trigger — helping push prices even lower, according to Saretsky.
Real estate board data showed September sales were 36 per cent below the 10-year average.
“Everybody fears paying too much now, as opposed to prior it was the fear of missing out, the prices were rising every month, and now it’s kind of the opposite where people think next month prices are going to be slightly lower,” he said.
“When they’re able to purchase under $1 million they’re able to qualify for an insured mortgage, which in today’s market does have lower interest rates,” she said.
“And so it does reduce the overall cost of borrowing.”
However, she cautioned buyers about trying to wait out the correction and cash in when it bottoms, saying a better strategy is to craft a plan about what they want, how much they can afford and shop with the intention of finding a secure home.
As for what buyers can afford, Saretsky said now is a good time for them to flex their muscles at the negotiating table, as rising inventory puts sellers in competition with one another.
“Every listing agent is trying to coach their clients that you have to be prepared to negotiate and the buyers are ultimately in the upper hand right now,” he said.
Amid the news about Amazon’s HQ2 announcement—the e-commerce giant chose New York’s Long Island City and northern Virginia’s Crystal City as the victors of its nationwide search—there’s the question of who in the real estate world is jumping for joy at the new opportunities. That likely includes a pair of low-profile billionaire brothers and real estate titan Jerry Speyer.
The Elghanayan family, which was worth more than $2 billion in 2015 when Forbes last estimated their fortune, traces their wealth back to Nourollah Elghanayan, an Iranian-native who started buying land in Manhattan in the 1950s and 1960s. His three sons, Tom, Fred and Henry, expanded the family business throughout Manhattan and Queens, acquiring and developing iconic buildings such as FBI’s former New York City headquarters and the Carnegie Hall Tower. In 2009, the family split up their holdings amid disagreements over succession plans. Henry reportedly won a coin toss and chose the Rockrose name and a portfolio of development sites and residential buildings; Tom and Fred took the rest, including more than 5,000 apartment units and properties in Long Island City, and rolled them into an entity called TF Cornerstone.
Since then, Tom and Fred Elghanayan have capitalized on New York’s up-and-coming neighborhoods, building gleaming luxury rental apartment towers in Manhattan’s Hell’s Kitchen and in downtown Brooklyn. But it’s their bet in Long Island City that may prove to be the most prescient. In addition to two rental apartment towers the Elghanayans transferred to TF Cornerstone, the brothers have purchased or built four more rental buildings in the past six years, giving them over 3,000 rental units in Long Island City’s waterfront community of Queens West.
In July 2017, TF Cornerstone furthered its move into Long Island City, winning a proposal to redevelop two city-owned sites in Anable Basin, a waterfront district neighboring Queens West. Its winning bid calls for a 1.5 million square feet mixed-use project with 1,000 rental units, commercial, retail and light industrial spaces, and public park areas. Just months later, Plaxall—another family firm that manages over one million square feet of real estate—submitted plans to rezone nearly 15 acres of the Anable Basin into a mixed-use development spanning almost 6 million square feet.
Now the sketches of glass towers and open air parks have been fast tracked to reality as Amazon sets its sights on the Anable Basin. According to the Seattle company’s memorandum of understanding with New York, it has circled the Anable Basin area as its target site for HQ2. TF Cornerstone confirmed that it will partner with Amazon to build out its project. “As a family-owned company founded by Queens natives, TF Cornerstone is proud to welcome Amazon to Long Island City, bringing new jobs to the borough and preserving significant public benefits,” says Jake Elghanayan, a principal at TF Cornerstone and a son of Tom Elghanayan.
With Amazon planning to take up 4 million square feet of office space over the next decade (and bringing on 25,000 workers), the Elghanayans are in prime position to take advantage of the increasing demand for office real estate and new apartments. With excitement already building in Long Island City, Tom and Fred’s fortune looks to be getting a boost in the near future.
Another big winner in Amazon’s decision is real estate firm Tishman Speyer’s billionaire chairman Jerry Speyer. Speyer started the real estate giant, which has developed over 167 million square feet of space from Chicago to Berlin, in 1978 with his father-in-law Robert Tishman. Son Rob Speyer is now CEO and oversees the company’s operations. While famous for redeveloping iconic skyscrapers like Manhattan’s Chrysler building and Rockefeller Center, Tishman Speyer has also become a major player in the transformation of Long Island City. The firm claims to be the area’s most prolific residential and office developer and says it will have completed construction on 3.7 million square feet in the neighborhood by end of next year.
A decade ago, the New York firm broke ground on Two Gotham Center, a 22-story office tower just a 20-minutes stroll from Anable Basin. Tishman Speyer sold the completed building to Canadian firm H&R REIT in 2011 but continued on, partnering with H&R and Qatar’s sovereign wealth fund to develop two office and retail towers named the JACX, and three rental apartment towers named Jackson Park.
With Amazon planning to begin hiring for HQ2 in 2019, the tech behemoth has agreed to lease one million square feet of office space at One Court Square, a 50-floor tower only blocks away from Tishman Speyer’s JACX and Jackson Park. Now the JACX, scheduled to open in 2019 with Macy’s and WeWork taking up 800,000 square feet of its 1.2 million square feet space, may not need to look far for new tenants to fill the rest of the floors. And Jackson Park, with amenities like indoor and outdoor swimming pools and a 1.5 acre private park, could be the new place to be for relocating Amazon executives.
WASHINGTON — Amazon has just sparked a real estate frenzy to rival Cyber Monday.
A three-bedroom condo with Manhattan views that had sat on the market for months, priced at $1.7 million, is suddenly drawing would-be buyers now that Amazon has announced plans to build part of its new second headquarters in Long Island City.
Online searches for homes in the Long Island City — long an industrial area in the Queens borough of New York — soared 248 per cent last week, real estate brokerage Redfin said. Searches in the other winner of Amazon’s sweepstakes, Crystal City, Virginia, jumped 84 per cent. Real estate agents say they’re hearing from investors who’d like to become landlords and from sellers who’ve decided to pull their homes off the market and wait for prices to rise.