Mixed signals in the U.S. housing market recovery suggest the beginning of affordability issues: “A number of housing indicators – including new home sales, housing starts, and new purchase mortgage applications – have softened in recent months relative to their trend over the past year,” confirmed Goldman Sachs in a note to clients this week (see Here’s What to Make of All the Ugly Housing Data at Business Insider).
Meanwhile in Canada, an RBC report addressing the affordability of Canadian housing is being digested this week (see Owning a Home Becoming Less Affordable at CBC News). In the report, RBC Chief economist Craig Wright notes that the deterioration in affordability here in Canada didn’t scare many homebuyers from jumping feet first into the housing market during Q2; sales actually surged by 6.4 per cent.
Wright notes that affordability has been flat-lined over the past few years as low rates helped to offset rising prices. With mortgage rates rising however, Canadians could face even more difficulty affording a house. Wright adds that the situation of affordability is more complex than simply interest rates. A sharp spike in rates will cause problems, yet most, including the Bank of Canada, anticipate the increases will be modest and gradual. Also, the bank will likely only start a monetary policy tightening phase as the economy improves, meaning higher rates might be offset by an improvement in employment and incomes, which could offset the negative impact on household finances. Higher rates might also lead to lower real estate prices, which also improves affordability.
This Labour Day Weekend, that’s the way it is…
Labour Day thoughts…
“A Labour of Love will eventually pay for itself.”
It’s assumed that most of us are naturally predisposed to respecting wood. The question gets some serious attention in one “Curb Your Enthusiasm” offering (see video below, or click here) when Larry deals with ringed stains left by coffee cups on a wooden table. In drawing attention to the issue, I’m still not so sure that there’s a heightened awareness, or sensitivity to using coasters under coffee cups around the Dakeryn office.
In advance of torrential rains last evening, the sun poked through the clouds as if on cue, when the first of sixty golfers teed off at the 26th Annual B.C. Wholesale Lumber Association’s Golf Tournament yesterday. I made it to the UBC Golf Club in time for the camaraderie over refreshments, an excellent BBQ dinner, and remarks by BCWLA President Chris Sainas (Dakeryn Industries). The winning foursome is pictured below after posting an eleven under 61 in the scramble format: Chris Beveridge (Skana Forest Products), Bill Thomas (Livingston International), Mike Michaud (SMFP), and 2011 BCWLA Lumberman of the Year, John Bennett (Livingston International).
By all reports – a great day!
I guess it’s true that I was born to be a lumberman. Some have even asked if I was named after Paul Bunyan, which suggests an alignment more closely tied to a lumberjack. And as if anyone needed proof, now comes scientific confirmation that there’s a certain manliness tied to being a lumberjack. Time reports here that researchers at the University of California have discovered that chopping wood increases testosterone production by over 40%. In fact the results indicated a 46.8% increase in testosterone levels after cutting wood, “a full 17% higher than the testosterone bump caused by playing soccer.” Evidently testosterone not only increases your desire and ability (to chop trees), it also helps increase lean muscle mass and bone density, and can help ward off conditions like depression and osteoporosis.
Of course none of this discovery minimizes the pain I’ve endured with a badly sprained ankle as result of a soccer mishap last week – meaning a suddenly wide open field at the 26th Annual BCWLA Golf Tourney this afternoon – and bringing into serious doubt any aspirations for an eventual call-up to the MLS Vancouver Whitecaps.
“I got into the woods industry ‘cause I heard good things come in trees.”
An early mill visit to Stuart Lake Lumber, with brother Matt (left) and my dad Ernie
From the Dakeryn office here in North Vancouver, we often wander to the foot of Lonsdale Avenue for lunch, near the Burrard Dry Dock Pier. This site once housed the largest shipyard in Western Canada. Originally opened in 1906 as Wallace Shipyard, it was renamed Burrard Dry Dock in 1921. Tugs and barges for the lumber industry, ships for the war effort, ferries for coastal travel, and icebreakers to aid in developing the North, all reportedly set sail from this historic location (Source).
John Bryson & Partners was the structural consultant for the entire restoration project; a good friend was the engineer in charge. After learning from him that Phase Two of the project was recently completed, I took my camera along for a closer look earlier this week. It’s an impressive site. Many heritage items for the city have been preserved. While there are no tenants yet, the shipbuilding facilities (with red roofs) have now been restored to accommodate retail and commercial space. The exteriors of these two buildings are all new, while the interiors continue to feature all of the original, beautiful wood posts and beams. The cost alone of painting/restoring the signature piece – a spectacular crane – was $500,000! A heavy duty, industrial-looking stage was designed in keeping with the shipbuilding theme. What a space – and what a tribute – to the city’s rich history of shipbuilding.
During the war years, men and women worked in three round-the-clock shifts, and the noisy thud of riveting echoed throughout North Vancouver at all hours. Each ship required 383,000 rivets to hold it together.The number of Shipyard employees increased exponentially during the World War II shipbuilding period. To keep track of the huge workforce, each Burrard Dry Dock employee was given a numbered brass badge which was linked to his or her pay packet and employment record. Thousands of these badges were found in the company’s office after the Shipyard closed in 1992.The Burrard Dry Dock Pier was built in 1940 for the wartime shipbuilding effort, once extended much further into Burrard Inlet.
– City of North Vancouver
The “Ten Legitimately Fascinating Facts About the Shipping Industry” in this post at The Atlantic are pulled from a new book entitled Ninety Per Cent of Everything, by Rose George. George wrote the book after spending months at sea “on various massive ships the length of football fields and the height of Niagara Falls.” The title of the book is based on the fact almost 90% of everything we buy arrives by ship; there are at least 20 million containers travelling across the ocean at this moment. And similar to how it’s presently cheaper to ship Canadian softwood lumber to China than on a flatbed to the Dakotas, it’s also reportedly “less expensive to ship Scottish cod 10,000 miles away to China to be filleted and then sent back to Scotland than it is to pay Scottish filleters to do the job.” Among other things, I was interested to learn that shipping is the ‘greenest’ mass transport: “Compared to the energy expended moving goods by plane or truck, shipping is far less damaging in terms of greenhouse gases released.”
Upon forwarding this story to a shipbroker friend here in Vancouver, he replied “China imports about 750 million tons per annum of iron ore – over two million tons per DAY. In addition, domestic production is a further 640 odd million tons. Approximately 25 million tons each of coal and grains are shipped through B.C. ports alone.” Recent data for B.C. lumber shipments to China is available in an earlier post here.
The forest surveillance state has gone global, according to a report here from CNBC. Many of us have used Google Earth technology at least once, if only to to check out the bird’s eye view of our own neighborhoods. But soon, “anyone, anywhere in the world will be able to use a computer to zoom in on forests around the globe, in real-time and in high resolution, and down to the level of one meter of physical space, watching what an orangutan in Borneo is up to in the trees. In other words, all the world’s environmental data will be captured by NASA and private satellites and crunched by Google Earth Engine into a living and breathing model of the planet.”
Presently the view of the world forest is limited by a tedious government process, requiring a formal request for access. Now, “everyone everywhere will have access to what is happening in the forest, at resolution never seen before, and with an interface website that is as simple as using a Google map.” The significance of this new technology is seen as a major tool in oversight of forest practices that are illegally ravaging woodlands in many developing areas of the world.
See related post: Wild West.
Right here in River City. When I played the role of Winthrop in The Music Man many, many years ago the Wells Fargo Wagon comin’ down the track brought all kinds of goodies to Gary, Indiana. Except, no offerings of $1.00 homes – until now, that is (see full story here). Efforts aimed at restoring livability conditions in that city include $1.00 homes. Certain conditions apply. The benefit for the city is that the new homeowners would pay taxes, remove the homes from the city’s list of derelict buildings, and improve the character of the neighborhoods.
While it sounds like a no-brainer for buyers, many of the estimated 10,000 unoccupied homes in the city have been hit by vandals and arson – so you might have to buy your own truckload of SPF studs to make that fixer-upper livable.
I’ve “reblogged” this post from the National Association of Home Builders which asks why the U.S. Housing Market Index has been increasing at a significantly faster pace than starts recently. Money quote: “single-family starts have increased 67% from the trough and are expected to double from their low point by mid-2014. ” – Paul
In the face of all the cautionary headlines surrounding a slowing Chinese economy in recent weeks, there’s certainly been some major upticks in China’s forest products imports. According to a fresh report this week from Mark Kennedy, CIBC Forest Products Analyst, China imported 2.200 million m3 lumber last month, up a whopping 28.7% compared to July 2012 when they were 1.710 million m3. YTD lumber imports are 13.120 million m3 compared to 11.880 million m3, an increase of 10.4%, over the same period a year ago. Interestingly, softwood lumber exports YTD from B.C. are actually down 7.1% compared to the same period in 2012 (3.490 million m3 vs 3.756 million m3). In fact B.C. exports of softwood lumber to China in June were down hard 19.5% from June 2012. Mark attributes this significant decrease to the higher lumber prices this spring. “Seeing record lumber pricing from North America, Chinese buyers responded by seeking supply, if available, from other regions. In some cases, Chinese buyers also switched to purchasing logs rather than lumber, which could explain log imports being nearly 20% higher this June over June 2012.” While China’s lumber imports from Germany, Chile, and New Zealand have reportedly increased significantly, “Russia provided the volume that offset the decline from Canada.” Mark suggests a reversal in this trend is underway, noting that Chinese orders from B.C. “have picked up considerably” in July and August.