The Village Selling Well

This blog has highlighted many of the stories surrounding the Vancouver housing market with a bearish tinge. But often I find myself cheering for the other side, most notably with the sad state of affairs over at the Millennium Water Village at False Creek development, where thaumaturgist Bob Rennie and a maniple of marketeers have been tasked with selling the remaining units to recoup some of the money the City borrowed to complete the project. I provided some estimates of projected losses a few months ago, based on average price per square foot. Hoodsurf provides the quicksheet of the approximate pricing.

Well wonder of wonders, it looks like the opening weekend was a stupendous success. The BC forum/Gong Show Realestatetalks has filled in some anecdotes from the front lines. Apparently over 70% sold over the weekend with an additional waiting list of 100.

Is this a bullish sign for Vancouver? Well I don’t know about that. A look across the water from the development yields well over 1000 condo units for sale. Here’s a map search of a small smidgen of the downtown core courtesy MLS map search:

Why aren’t these units selling? Was the Village at False Creek well-priced, or was it simply the red “30% off” stickers on the unit doors? What we do know is that there are now over 100 fewer people who will be available to buy these units already for sale. The weekend was marvelous for showing, a crisp sunny weekend, and that couldn’t have hurt.

It’s useful to pay attention to the tactics employed by Mr. Rennie, including

  • Withholding specific price information, only ranges
  • Pre-selling certain units to “insiders”, giving the pricing some semblance of acceptability
  • Blitzing the print and TV media in the week leading up to the event
  • Telling City Hall to go into a room and talk to nobody

Heavens knows what went on behind closed doors…

I commend Bob Rennie for ostensibly pulling this matzo ball out of the fire, at least in part. The discounts were significant and apparently “aggressively priced” compared to comps. That certainly helped, along with his ability to tap into the local media and his many years of experience punting real estate. In my view, based on cap rates alone, even at current price the development is significantly overpriced, as are most if not all condos in Vancouver these days.

This development was facing off the taxpayers of Vancouver — and the public services it offers — versus individuals who can afford to buy expensive real estate. In speculative bubbles like this one, for me it’s not about who wins and who loses, it’s the depraved entertainment of seeing wild animals fight over scraps of meat. But on this specific occasion, I was rooting for Bob from day one and, for today, to him I tip my hat. Well done.

Sincerely,

A bearish blogger

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Canadian Wiggler
Canadian Wiggler
9 years ago

New Capital Economics report out about the Canadian economy and the fallout of the housing bust which they assert is now inevitable.

http://bit.ly/erqHmc

trackback

[…] at vancouvercondo.info February 21st, 2011 at 5:28 pm – “I don’t know why, but for some reason it doesn’t matter how intelligent, […]

Anonymous
Anonymous
9 years ago

@Extremely rich Van house owner.:

…..Oil price will only affect US and weaken its military and econiomic power,while ……..

Can someone translate that for me: I'm, afraod I don't speak moron.

Extremely rich Van h
Extremely rich Van h
9 years ago

Oil price will only affect US and weaken its military and econiomic power,while China will subjugate US in next decade with a lightening strike once it has completed it economic and military build up. Middle East will soon be falling into Muslim fundamantalists' hands and tuned into a Islamic dictatorship in parliamentary disguise like the one as Iran. Once the whole region has completed its Talibanization,will u expect those Arabian be nice to Us and its Cronies? Luckily,Vancouver is blessed with Chinese Money which wisely guided and channelled to Vancouver to supportted Van RE which in turn props up Canada economic;due to Van's Chinese donminance,Chinese government is encouage its citizens buying all sort of properties to establish a beachhead in future Canadian and Chinese alliance against American Imperial agression.So I don't see there is any minor downwad collectinon in this… Read more »

Keeping An Eye On Th
Keeping An Eye On Th
9 years ago

"Home prices hit post-bust lows in most big cities"

>> Home prices in a majority of major U.S. cities tracked by a private trade group have fallen to their lowest levels since the housing bubble burst<<

http://www.google.com/hostednews/ap/article/ALeqM

Of course we can't draw a comparison, after all US does not have oceans, mountains,and Asians.

But it does have David Lereah, but then again we have RealtyRadio98, and The Vancouver Sun- Rennies Marketing Arm.

patriotz
9 years ago

@Anonymous:

Actually, Patriotz himself implicitly implies market psychology is what changes as well. He says able and *willing* to pay.

No, what I meant is that as the ownership rate increases the market runs out of people who are willing to buy. I didn't mean that people who were previously willing to buy change their minds (although they may become unable to buy as prices increase).

It's not until prices are down 20% or more that people get the message and start thinking that buying is a bad idea. Of course buying is a better idea at 20% off the top than at the top – people get it wrong both on the way up and on the way down.

VHB
VHB
9 years ago

@McLovin: Bingo. We have an orgy both of sales and new listings right now. This will continue until the 18th of March. The important thing is the growth of total inventory–THAT will be the post-March 18th hangover. So long as we keep accumulating inventory, things will be interesting.

observer
observer
9 years ago

OV marketing seems to be in full swing, teaser prices, crowded openings, hints at sell outs, and limited inventory remaining. Possibly it's true, possibly it's hype. Eyes wide open.

McLovin
McLovin
9 years ago

Another day Another net 100

Keeping An Eye On Th
Keeping An Eye On Th
9 years ago

@lost hope bear:

I'm going to have to keep an eye on you, as you know I have been keeping an eye on the pimps for some time, and I must tell you your story doesn't add up.

It sounds like something Dave would make up, it's a bit infantile.

Why would a real bear be prowling open houses?

Why haven't you posted here in the last 5 years?

And you wanted to be the sheriff?

CRASH JPMorgan-Chase
CRASH JPMorgan-Chase
9 years ago

Watch Live……Christchurch Devastated, many trapped
http://www.abc.net.au/news/abcnews24/

Anonymous
Anonymous
9 years ago

@oneangryslav2: Actually, Patriotz himself implicitly implies market psychology is what changes as well. He says able and *willing* to pay. "Willing" means to me that even if people could afford to buy they would not. Isn't that a change in psychology over what we see now?

Colin
Colin
9 years ago

Still the average property tax bill on those condo's will only make the available for offshore investors.

Anonymous
Anonymous
9 years ago

@lost hope bear:

I was at many open houses in van west this week end and saw a shortage of buyers. Many houses without sold stickers which convinces me to beleive that there will be a crash in vancouver real estate, giv'er! MARCH 18 will have an affect on the market. I have been waiting it out for the last 5 years and am finally giving thanks!

Best place on meth
Best place on meth
9 years ago

@YLTNboomerang:

>>>The term REALTOR® has come to connote competency, fairness, and high integrity resulting from adherence to a lofty ideal of moral conduct in business relations. No inducement of profit and no instruction from clients ever can justify departure from this ideal.

In the interpretation of this obligation, REALTORS® can take no safer guide than that which has been handed down through the centuries, embodied in the Golden Rule, “Whatsoever ye would that others should do to you, do ye even so to them.”<<<

Haaaaa ha ha ha ha……..

YLTNboomerang
9 years ago

@Yalie:

It's weird human nature, just like in those tv ads running right now for RSP's commenting how much time people spend doing things like reading gossip but then they are too busy to pay attention to their finances. I think people are generally lazy and would rather believe the BS the "experts" are feeding them than take the time to research themselves and potentially develop a contrarian view.

I personally love the NAR's mission and feel it is a pretty good place to send people who trust REALTORS (R):

National Association of Realtors

lost hope bear
lost hope bear
9 years ago

Thats fine enjoy yourself as wiil I. Well your wrong as in the correction you are predicting has not happened and if it does why would I have to sell? Look, I understand your points and your logic makes sense but thats the the problem, the market tells a different story.

oneangryslav2
oneangryslav2
9 years ago

@lost hope bear:

LOL, keep dreaming, aren’t you tired of being wrong?

Please explain to me how I am wrong? I'm currently renting at about half the cost compared to paying a mortgage. I just had the landlord replace my carpet and curtains. Cost to me? Zero. Oh, and while the work was being done I was out enjoying myself at a public lecture.

Aren't you supposed to be out house-hunting? 😉

oneangryslav2
oneangryslav2
9 years ago

@kansai92:

I dunno, patriotz…

The change in psychology pretty much comes with the territory.

All part of the same feedback loop on the way down.

I have to disagree with you, kansai, and agree with patriotz. Human (individual and mass) psychology is the effect, changes in facts on the ground are the cause.

Mass psychology allows individuals (and collectives) to suspend reality for a while (hence the delayed reaction) but eventually the evidence becomes so overwhelming–the loan officer at the bank informing you that your mortgage is now larger than your home's assessed value–that psychology changes. In the absence of changes on the ground, there is no reason for psychology to change.

lost hope bear
lost hope bear
9 years ago

LOL, keep dreaming, aren't you tired of being wrong?

oneangryslav2
oneangryslav2
9 years ago

@lost hope bear: Congratulations, LHB! Just make sure that you've bought a decent place–a heritage-type house, even–and please put in a few hundred thousand in renos–the roof, drain tiles, kitchen, new heating system, etc.

Then I'll buy it from you in a few years for a huge discount. 😉

kansai92
kansai92
9 years ago

@patriotz: "RE busts are caused by not enough buyers willing and able to pay the current price, not a change in psychology."

I dunno, patriotz…

The change in psychology pretty much comes with the territory.

All part of the same feedback loop on the way down.

lost hope bear
lost hope bear
9 years ago

I was at many open houses in east van this week end and saw no shortage of buyers. Many houses already have sold stickers which convinces me to beleive that there will be no crash in vancouver real estate, ever! MARCH 18 will have no affect on the market at all. I have been waiting it out for the last 5 years and am finally giving in and am going to buy!

4444
4444
9 years ago

@Yalie:
Not a good idea to mention ms by name you may be aiding the POS with getting his name out.

Also you can't use reason when someone is horny on RE.

It's like trying to tell a gambler to stop gambling when he is winning.

4444
4444
9 years ago

@Yalie:
Not a good idea to mention ms by name you may be aiding the POS with getting his name out.

Also you can't use reason when someone is horny on RE.

It's like trying to tell a gambler to stop gambling when he is winning.