Tuesday, March 12, 2019

Falling house prices, taxes and innovative designs spook West Vancouver sellers and buyers.

Vinson House was featured in this 1918  poster of West Vancouver  most spectacular homes.
     In late 2014, a West Vancouver planner introduced me to Vinson House, a 1913 house that  heritage advocates described as "an unusually intact Craftsman style home that provides a valuable link to the early architecture and history of West Vancouver."
The Vinson family pose on the front steps of their recently finished home. At the time, it was located on a five-acre lot!
     It was originally the home of Reeve Valient Vinson, who was elected to West Vancouver council numerous times between 1918 and 1929, and then owned by an assistant in the West Vancouver Archives. She, along with her husband, had lovingly restored many parts of the house over the years, but the time had come for them to sell. Since the house was sitting on a very large Ambleside lot, both the owner and planner feared that any new buyer would likely knock it down in order to build a large new house.
    Given the success of Hollyburn Mews, my first small, innovative West Vancouver infill development, which replaced three older single-family houses across from West Vancouver United Church, I was offered the opportunity to buy the house before it went on the market.
Hollyburn Mews replaced 3 single-family houses with 6 duplexes and West Vancouver's first 3 legal coach houses.
The duplexes were designed to look like large single-family houses. Access to the coach houses is from both the street and lane.
Hollyburn Mews took 5 years to get approved. But once completed, even the objectors agreed it offered much-needed new housing choices. Recently, West Vancouver approved a new OCP to permit more similar developments.
Some of the Hollyburn Mews residents pose in front of their development. As is the case with the Vinson House project, it combines the neighbourliness of yesterday with the modern conveniences of today!
    In return for protecting and conserving the house, the planning department would support a Heritage Revitalization Agreement  (HRA) that would allow me to build two additional infill homes on the property. As a proponent of 'gentle densification, and someone who appreciated older houses it seemed like a wonderful opportunity.
   However, I was concerned about the construction challenges and costs for such an undertaking. I therefore approached Trasolini Chetner, the company that had built Hollyburn Mews, to see if they were interested in partnering with me on the development since they had previously been involved with numerous heritage restorations in Vancouver.
Trasolini Chetner has been involved with numerous heritage projects including the Two Dorothies, featured on the cover of this special book.
     We created a new company and in November 2015 made an application to the District of West Vancouver to move and restore the old house, in return for approval to subdivide it into two homes, and build two additional detached houses on the lot. The detailed plans were prepared by Formwerks, a highly regarded architectural firm with considerable experience with heritage houses and infill development.
     In May 2015, as noted in the North Shore News, the project was approved.  https://www.nsnews.com/news/heritage-homes-preserved-in-west-vancouver-1.2262093
     Like most heritage conversions, the project took much longer than expected, and cost significantly more than budgeted. But our lender, Canadian Western Bank was understanding, and agreed to increased the loan, and extend the repayment period, in return for additional fees of course!
    During the construction, we pre-sold the single-level garden suite on the lower level of the Heritage House. However, we were not too aggressive about selling the other homes since we thought it would be better to allow the new buyers to see the completed product.
The heritage house was moved 30 feet on the lot, in order to create room for four new garages. The two new detached houses are at the side of the large lot.
     The project was initially scheduled for completion in November 2017. However, it was not finished until July 2018. By then the provincial government had introduced its so-called School and Speculation Taxes, and prices were beginning to drop. The heritage house came to market at $3.3 million, a price which reflected our acquisition and restoration costs, including top-of-the-line appliances and finishes, and what the neighbours thought it should sell for.
Vinson House looks like it would be more at home in Shaughnessey than West Vancouver. Some realtors have suggested I should be advertising it in Vancouver, not West Vancouver, since it represents such good value compared to Vancouver $$$.  
Vinson House was recently staged in order to help a new buyer imagine how it might look with furniture.
     We priced the two detached houses around $2.5 and $2.7 million which equated to approximately $1100 per square foot, well below the price of comparable new houses in Vancouver and West Vancouver.
     In July, we organized a garden party to present the three remaining homes to the neighbours and broader community.  Most people loved the homes and told us they were just what West Vancouver needed. However, this was the first HRA development offered for sale in West Vancouver, and the concept of strata-infill was new to the District.
    To cut a long story short, 9 months later, the three homes are still on the market. Because of falling house prices, new provincial government taxes, and great uncertainty about the future of the housing market, we are waiting for offers.
   Last month, in an effort to sell the houses before the bank calls the loan, we brought in a new sales team. Tom Hassan, Eric Christiansen and Eric Latta were each given one of the listings. At their urging, we have reduced our prices. The Heritage House, which first came to market at $3.3 million is now $2,695,000. https://sothebysrealty.ca/en/property/british-columbia/greater-vancouver-real-estate/west-vancouver/389578/
     The Coach House has dropped to $2,298,000 http://www.ericchristiansen.com/listings/?listingId=1099 and the Garden Residence, is $2,498,000 https://www.royallepage.ca/en/property/british-columbia/west-vancouver/1419-gordon-avenue/9139312/mlsr2341448/
The kitchens in both the Coach House and Garden Residence are designed to appeal to someone who wants lots of space and brightness.
     This represents a price reduction of over $1 million on the three homes. Moreover, our realtors tell us that we may have to be willing to accept further reductions if we want to sell in this market. Why? Because the West Vancouver market has been so spooked by falling prices and uncertainties caused by the new provincial taxes, no one knows whether now is a good time to sell or buy.
Like the heritage house, the Garden Residence features a large front porch along with three private outdoor spaces, that can be fenced off if so desired.
    In writing this column I was surprised to discover that Vinson House was recently listed for sale in the New York Times. https://www.nytimes.com/real-estate/can/bc/west-vancouver/homes-for-sale/1425-gordon-avenue/2836-55E655. This is no doubt due to Eric Latta's association with Sotheby's and the fact that it is such a unique property. It's also less expensive in US dollars!
     While no doubt someone will criticize me for this, the fact is we have given Vancouver area buyers every opportunity to buy these homes!
     Yesterday, we accepted an offer on one of the houses. Unfortunately, it is subject to the sale of another house. But our realtors are optimistic that the other sale will go through, and we will just be left with two houses for sale.
     I am sharing this story because as builders, Trasolini Chetner and I have poured our hearts and souls into this project. While we wanted to make some money doing this, it was also a labour of love. While I appreciate these very special homes are not for everyone, I find it hard to believe that there aren't local buyers for a beautifully restored West Vancouver heritage house and two brand new 2500 sq.ft. +/  thoughtfully designed houses, especially at the reduced prices.
     In the media (and Twitter) many delight at the falling house prices, especially at the top end of the market. Of course, these people do not own homes they are thinking of selling.
     I am well aware that for too long, housing prices escalated far too quickly. But now I am concerned that while we often talk about the need for heritage conservation and 'missing middle' housing choices, as long at the market remains so uncertain, we won't see many of these projects get underway, especially in West Vancouver, and other municipalities that desperately need more housing choices.
      To see what I consider the excellent floor plans and finishes at Vinson House Residences, go to www.vinsonhouseresidences.com. Let me know what you think.

Posing with former owner Carol Howie for a North Shore News story about the history and restoration of this significant heritage property.


Anonymous said...

Even North Shore residents who already own a mortgage-free detached house / 7000 sq ft lot could not raise enough from the sale to purchase one of these strata units. Downsizing then becomes a matter of “Upsizing,” and few are able or willing to do so. Perhaps less luxury would have made it possible to keep prices more affordable for locals.

Unknown said...

I commend you, Mr Geller, and T&C (we indirectly worked on a project in the Okanagan together that, alas, did not work out well financially, either) for offering creative housing solutions and of course preserving a valuable piece of West Van history. As someone in his early 60s (but who likes to 'think young' as it were) - West Van is just a terribly uncool place to live right now compared to projects in downtown, False Creek NE etc. Maybe the realtors would know, is ANYONE taking on renos in West Van or Vancouver, of this vintage of house? Heck, they've even torn down Hollingsworths here in North Van. We all love our passion projects, and I do hope this works out for you but the absorption rate just seems bad for even something as stylish and unique as this place is.

Michael Geller said...

Thank you Steve Threndyle. As for Anonymous comment, when you consider the cost of land and construction and other related costs, adding a granite countertop and good quality bathroom fixtures is nominal. Perhaps another $5 per square foot, when the overall costs are $800+ per square foot.

Unknown said...
This comment has been removed by the author.
Unknown said...

Hi Michael. These are luxury homes. Why didn't you put central air conditioning in them. Air conditioning is a must have in a home these days. I would never consider a house without air conditioning in this day and age.

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