Real Estate market corrections have been likened to slow moving train wrecks and I couldn't resist the analogy to the new home development in Fort Langley called Bedford Landing. I have been quite interested in the $400,000,000, 378 home, 78 acre Bedford Landing development in Fort Langley for two reasons:
1) I like Fort Langley, its charm and historic significance, wouldn't even mind owning a home there someday and
2) I think it is a barometer for sentiment in Fraser Valley Real Estate.
Check it out here: www.bedfordlanding.com
I had the opportunity to tour the discovery centre, sales centre, and showhomes recently and I have followed the press on the development for a couple years now.
Here are some of my observations about what most people see:
1) Lots of local press dedicated to how 'fantastic' the development is and what a 'great impact' it will have on the area.
2) Plenty of press about the 'pent up demand' for the homes
3) Enthusiastic public officials, developer staff, and newspaper articles
4) The obligatory overnight line up for the 'opportunity' to put a deposit on a home
5) Insane stories about people travelling from far away places to live there
6) Townhomes are $375,000 to $400,000 and Single Family Homes are $475,000 to $600,000 with the next release having homes up to $1,200,000.
Here are a few other observations that don't get the press:
1) The development is right beside the main CN Rail line which has 16 freight trains per day traveling past at 80-100 km/h. Two trains went past while I was touring the show homes and the homes shake as the train goes past.
2) The development was built hastily on top of 5 - 8 metres of sand infill dredged from the Bedford Channel.
3) Its on an old mill site - who knows what's underneath the ground?
4) Only half of the homes available for sale have actually sold now - where did the line up go? What about all that pent up demand?
5) Where will all of these people (1000+) shop, drive, go to school, etc? There are no plans for increased amenities in the area and Fort Langley has significant development restrictions.
My take on these observations is that the potential buyers are not so enthusiastic about the homes at current prices and thus that ‘pent-up’ demand has dried up, the demand was false and fabricated, or the people causing the demand are unable to afford the homes at the asking prices. We will see how long it takes before the developer lowers prices to meet potential buyers.
So, is our Real Estate market a slow moving train wreck?