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Real Estate Investing Sunshine Coast Style: Life's a Wakefield Beach.
08-26-2013, 09:34 AM, (This post was last modified: 08-27-2013, 07:57 AM by Skook.)
#1
Real Estate Investing Sunshine Coast Style: Life's a Wakefield Beach.
In the summer of 2008, a Wakefield Beach resident when asked about her decision to buy and move in offered this thought, “Life is now truly a beach.” Five years later, she and others who invested in this now iconic Sunshine Coast high density oceanfront development are likely muttering to themselves, “Life is now truly a bitch” as unit prices drop hundreds of thousands of dollars compared to the original purchase prices.

I and other coast residents watched with interest at this project which billed itself as the first “deep green” development on the SC began to take shape on the former 3.8 acre site of the old Wakefield Inn. The building of Phase 1 with its 31 residences (single homes, duplexes and townhomes) commenced in the summer of 2006 and was move-in ready by fall 2007. The homes offered geothermal heating and cooling, low-flow plumbing, high-performance window glazing, etc. However, what truly intrigued us all were the curving roofs and the fact that their flat portions would be planted with grass - becoming the first ‘living’ roofs on the SC.

The development garnered a lot of media attention and eventually a few design awards. Due to the development’s success, its West Vancouver-based developer, Lance Sparling, packed up and moved to the SC setting up Wakefield Home Builders Inc. with offices in Sechelt and West Van. The company is currently constructing the new Watermark at Sechelt condo development in the heart of town.

I have put together an image collage for the development. The three pics at the top show a single ‘triplex’ unit (3 townhouses), a single detached home and one residence in a duplex unit. The site plan shows how the units were configured for Phase 1 with the townhomes near the highway - billed as Oceanview (OV), the duplexes in the middle - billed as Oceanside (OS), and the single detached homes along the waterfront - billed as Oceanfront (OF). The bottom row offers images of the completed development (Phases 1 &2).

[Image: attachment.php?aid=352]

I will begin by looking at Phase 1 - from its 2006 pre-construction pricing to current 2013 MLS listing prices. The seven year time span makes it impossible to post an image of the spreadsheet so I am going to tackle this differently from previous development posts. I have begun by creating a table (see below) divided into three blocks following the developer’s unit numbering and type: Oceanview townhomes (1-15), Oceanside Duplexes (16-25), and Oceanfront Homes (26-31).

The Wakefield Beach website went online in April 2006 and it included a .pdf file showing the developer’s asking price for each unit and, unbelievably, I managed to snag it - a rare feat after so long a time. The 15 townhomes were priced from $525,000 to $570,000 with most at $550,000. The ten duplexes fell in the range of $775,000 to $825,000 and the six detached homes were priced from $1,100,000 to $1,350,000.

Seven months later in November, Wakefield updated its website price list. That new .pdf file indicated the development had almost sold out and on the remaining available units Wakefield increased the prices by $45,000 to $100,000. The one remaining oceanfront house sold on November 21st at that new asking price of $1,300,000.

[Image: attachment.php?aid=347]

Now, let’s get to the fun stuff and see how the prices of these Wakefield Beach units in Phase 1 have fared since April 2006. The following information comes from Wakefield website pricing up to June, 2010 when the website was shut down; from MLS sold data (Jan, 2010 - July, 2013);from current MLS listings.; and from Google searches (cached data).

(Note: The developer began offering a few unit “resales” on its website in 2009)

Townhouse Units:

3 - 5394: Sold 2006 ($550,000). Listed (2012) $589,000. Listing dropped March/13.

4 - 5392: Sold 2006 ($550,000). Listed (05/03/13-V1005763) $519,000. June/13 ↓$499,000. Difference from 2006: -9.3%

6 - 5388: DL (06/07) $595,000. Assume sold for asking by 2008. Listed (07/25/13-V1020030) $459,000. Difference from 2007: -22% Note: this empty unit has also been listed for rent - available Sept 1/13 at $1500/mth.

7 - 5386: Sold 2006 ($550,000). Sold(02/14/11) $489,000. Difference from 2006: -10.9%

14 - 5372: Unsold by Nov 2006. Price ↑$595,000. Still unsold by Jan, 2010. Developer ↑ price to $679,000. June/10: ↓$655,000. No record of unit ever selling.

Duplexes:

16 - 5399: Sold 2006 ($800,000). Sold (02/21/12) $760,000. Difference from 2006: -5.0%

17 - 5397: Sold 2006 ($825,000). Developer lists for resale (06/10) at $995,000. Disappears from MLS. Listed (08/19/12-V968456) $789,000. March/13 ↓$699,000. Price difference from 2006: -15.3%

18 - 5393: Sold 2006 ($825,000). Sold (09/19/12) $622,500. Price difference from 2006: -19.7%

22 - 5381: Sold 2006 ($775,000). Listed(07/12-V9693000) $729,000. Listing dropped. Price difference from 2006: -5.9%

25 - 5373: Unsold by Nov 2006. Price ↑$875,000. Developer relists(10/1/08) $899,000. 2009 ↓$849,000. Unit sells 2009. Sold, again (09/23/11) $728,000. Price difference from 2009: -14.3%

Detached Homes:

29 - 5348: Sold 2006 ($1,125,000). Sold (Prior to 2010 - List $1,250,000). If sold for asking: +11.1%

31 - 5340: Sold 2006 ($1,350,000). Developer lists for resale on website 2009 - $1,595,000. June 2010 ↓$1,555,000. MLS listing removed. No sale data found.

It is highly likely that any investor who flipped their unit prior to 2010 made money (as Unit 29 shows); however, other than on the development’s website, I have not been able to find any resale listing data via Google from 2007 up to the end of 2009 which makes sense since this was the time span of the stock market meltdown.

******************************

It’s now onto Phase 2 and pre-construction sales got underway in February, 2007. Unlike Phase 1, I was not able to find any developer price list for this phase. I have had to use deductive reasoning to come up with my presale pricing and it is based on the following:

1) In 2007, prices for all property types on the Sunshine Coast took a huge jump and in most cases by at least $100,000.
2) I have found two print articles that mention pricing at Wakefield Beach:

a) ‘Green is the New Blue’, The V List Magazine, Fall 2007, pg. 46 (.pdf file).

Quote:Homes range in size from 1,431 to over 2,200 square feet and in price from low $700,000’s to over $1.5 million. A small number of the 46 homes are still available for purchase.

b) ‘Going Green on the Sunshine Coast’, Edmonton Journal, June 1, 2008.

Quote:Only six of the 46 units are still available, ranging from 1,431 to 2,200 square feet and from $700,000 to $1.5 million.

3) Developer website pricing for unsold townhomes in January, 2010 ($679,000; $669,000; $649,000).

So, if townhomes according to the print articles were priced in the low $700,000’s then those who bought in during Phase 2 pre-construction sales (2007/08) are today in 2013 facing stunning equity losses. However, since I cannot prove that pricing, I decided to play it conservative and go with the higher 2010 developer price of $679,000 and have based my calculations on that figure.

As for the three new oceanfront detached homes in Phase 2, it should be remembered that Phase 1 unit 27 sold in November, 2006 for $1,300,000 and the developer likely did price the new Phase 2 units at $1,500,000; if so, those who bought in at that price are weeping. In my table below, I decided to be conservative and use $1,300,000 as the presale asking price.

[Image: attachment.php?aid=348]

Now, let’s see how these units in Phase 2 have a fared in value since February, 2007.

Townhouses:

2 - 6492 Ember: List (DWBS-developer website) Jan/10 $649,000. Sold(Apr/10-DWBS). Listed(2012) $595,000. Listing removed. Price difference from 2010: -8.3%

3 - 6494 Ember: Sold 2007 ($679,000). Listed(01/14/13-V985854) $469,9000. June/13: ↓449,900. Listing removed. Price difference from 2007: -33.7%

5 - 6498 Ember: Sold 2007 ($679,000). Listed(2011-V873479) $569,500. Sold(05/16/11) $552,000. Price difference from 2007: -18.6%

7 - 6490 Wildflower: Sold 2007 ($679,000). Listed(2012-V928080) $575,000. Listing removed. Price difference from 2007: -15.3%

8 - 6492 Wildflower: Sold 2007 ($679,000). Listed(01/10/12-V928080) $565,000. Mar 23/13 ↓$549,000. As of Aug 25/13: 593DOM. Price difference from 2007: -19.1%

10 - 6496 Wildflower: Sold 2007 ($679,000). Listed(03/26/13-V997905) $539,000. Listing removed. Price difference from 2007: -20.6%

Detached Homes:

13 - 6491 Wildflower: Sold(Dec/09 - DWBS) $1,300,000?. Sold(07/21/10) $1,100,000. Price difference from 2009: - 15.4%. Listed(06/08/13-V1012937-Sotheby’s) $1,190,000.

If I have overestimated the pre-construction sale price, then the value loss on these properites is still amazing. However, if these units did sell at the levels indicated in those 2007/08 print articles (low 700,000’s to $1.5 million), then the equity loss is staggering. Now, with the changes to mortgage rules, what hope do these owners have of selling without losing even more? Also, as these units continue to lose value, what do owners face when they go renew their mortgages? This has to be a nightmare scenario for all unit owners.

In my Google searches, I have come across some of the townhomes and oceanfront homes (about three in each case) listed as vacation rentals going for $169/nt (4nts min), $799/wk, $3200/mth (townhome) up to $2550/wk and $9420/mth for the oceanfront homes. It is obvious then that these units are not primary residences and in an early news article the developer said the majority of buyers for Phase 1 were coming from Vancouver and the lower mainland. I should think real soon there will be others renting out their money losing dream investment.


******************************

Well, if you found the above riveting, I have more and it’s a hoot. While on my Google hunt for all things Wakefield Beach, I came across some bankruptcy docs. The bankruptcy filings involve a Vancouver woman named Rashida Abdulrasul Samji. In her list of assets, are five Sunshine Coast properties. She has a 50% stake in 3 vacant lots and guess where they are? Trail Bay Estates! ROFLOL…God, it’s no wonder that development is a wasteland. Those lots are 22, 43 and 51.

Samji is also the sole owner of two properties at Wakefield Beach - a townhouse and a duplex. Well, guess she won’t be the owner for much longer. Here is the listing history of those two properties:

Unit 1 - 6490 Ember Place (Townhouse): Failed to sell during pre-construction. Listed on development website January, 2010 $669,000. June 2010 ↓$649,000. Sold 2010. Listed(12/15/12-V985854) $539,900. Feb/13 ↓499,900. Apr/13 ↓$469,900. Price difference from 2010: -27.6%

Unit 19 - 5391 Wakefield Beach Lane (Duplex). Sold 2006 ($825,000). Listed(2012-V986379) $644,400. Relisted(03/13-V1007872) $625,500. May/13 ↓$609,900 ↓569,000. Listing removed. Price difference from 2006: -31.0%

In addition to her bankruptcy filings, Samji was investigated by the BC Securities Commission (2012) for promoting an investment scheme through her notarial practice. The BCSC has passed on its findings to the RCMP. Now a number of the investors have filed law suits against her and others claiming they are victims of a Ponzi scheme.

A January 3, 2013 ‘Trustee’s Preliminary Report to Creditors’ (.pdf) prepared by Boale, Wood & Company Ltd. gives a good synopsis of what has transpired in addition to assets and liabilities (in the millions).

A September 22, 2012 Supreme Court document, ‘Receiver’s Second Report to the Court’ offers more insight as to the other parties involved in the scheme and a more in depth history.

Boale, Wood & Company Ltd has set up a webpage just for Ms. Samji (updated this month) with links to lots of legal documents spawned as a result of her activities - perfect reading for those who have trouble sleeping at night.

******************************

What do you think? Does it get any better than this?



Update:
I want to make available the Wakefield Price List for April, 2006 and November, 2006.

.pdf   wakefield_pricelist April2006.pdf (Size: 58.04 KB / Downloads: 460)

.pdf   wakefield_pricelist Nov2006.pdf (Size: 69.89 KB / Downloads: 452)

You will notice that in the November price list that the square footage of the duplex suddenly increased by 253 sf. What happened here is that by November, the developer decided that the crawl space (253sf) should now be included in the "finished interior livable" square footage. I guess the thought being that if you can store stuff in the area then you're living in it...LOL.

I will add my spreadsheet and a few other Wakefield documents in another post in a day or two.


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Real Estate Investing Sunshine Coast Style: Life's a Wakefield Beach. - by Skook - 08-26-2013, 09:34 AM

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