Hidden price drops now called ‘incentives’

Looking for a new condo?

If you are it looks like you’re getting to be a rarer species and to catch your eye marketers are trying all sorts of things short of just dropping the price.

How about a ‘free’ car or $1000 off your monthly payments for a year?

Or if you’re a believer in the power of a good sales person, then a $5000 bonus to the realtor might do it.

These are just a few of the incentives that developers and marketers are using to get attention or avoid going directly to the price drop.

But are these hard sell techniques working? And will they help kick start a sagging industry?

“We have to be careful before saying ‘the sky is falling,’” says Diana McMeekin of real estate marketing firm Artemis. “What we’re seeing in the market today is a response to the shift from speculators to long-term investors. The kinds of people that are buying now are owner-occupiers as opposed to ‘flippers.’”

For that demographic, real estate is “less of a commodity and more of a home. Their decisions are often more measured,” she says, and they are more likely to be enticed by deals. “Their decisions are more emotional and less about dollars and cents.”

While Ms. McMeekin says our condo market is not as glutted as Toronto’s, she still advises clients that in a competitive market, especially in areas such as Metrotown and Richmond, “you need to have a promotion or special offer every day – just like in the retail business.”

Read the full article in the Globe and Mail.

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alfie
Guest

Fantastic Post.many thanks for share… expecting more.

Many Franks
Member
Active Member

The soft-landing squeeze: Ottawa’s mortgage fixes one year later:

Jonathan Coe is anxious to get out of his west-end Toronto apartment and into his first house, but that dream was put on hold again last year when the federal government changed the rules.

[…]

Jonathan Coe, a self-employed website developer, is almost 40, single, and anxious to move out of his apartment in Toronto’s west-end Parkdale neighbourhood and buy his first house.

[…]

Jonathan Coe, a self-employed website developer, is almost 40, single, and anxious to move out of his apartment in Toronto’s west-end Parkdale neighbourhood and buy his first house.

And at the top of the page, an advertisement urging me to pay for this Groundhog Day experience.

Son of Ponzi
Guest
Son of Ponzi

I know, oil is going through the roof . Of rail cars.

Larry
Guest
Larry

Oil is still over 100 buck, no worries for RE in Canada.

canadian
Guest
canadian

I know this is off topic but if you do buy a home ,make sure its not located close to a rail line .Unbelievably trains are left unattended idling all the time in Canada .

Romeo Jordan
Guest
Romeo Jordan

pace of the decline is frustrating.

but the direction is invigorating – down!

Son of Ponzi
Guest
Son of Ponzi

Serene 42,
Shadow inventory = units for sale but not listed on MLS.
Example: Townhouse project with 24 units for sale, but only 2 are listed on MLS.
Other examples: Presale assignments, Private sales.

barb rennie
Guest
barb rennie

In Richmond today:

50 new listings
33 new price reductions

We keep going like this on a daily basis, the inventory will be going through the roof. What was that thing I heard about supply and demand?

Serene
Guest
Serene

Post 42

Shadow inventory?? Was there a crash i missed and Banks are holding onto millions of foreclosures? Let’s get back to reality son.

Son of Ponzi
Guest
Son of Ponzi

1,800 rent for a condo in New West, the Congestion Capital of the Lower Mainland!
Either there are some really stupid renters out there, or this story is a fake.
I go with the latter one.

RE Canary
Guest
RE Canary

Wow 163 price reductions.
Remember what I predicted a month ago, that the number of price reductions is the one to watch.
Lower prices lead to even lower prices as sellers are realizing that the buyers are in the driver’s seat now.
Over 18,000 of units on the market, as per MLS.
No one knows what the shadow inventory is, but a guesstimate of about 5,000 seems reasonable.
The buyers have lots of choice and can be patient.

emmi
Guest
emmi

@39 Inventory is a measure of churn without choice, desperation, and future outlook. It takes 18 months for a turn in the real estate market to take hold in the general consciousness. Given that the last time the market fell, it went right back up again, I’d guess that there will be more resistance to seeing the turn in the market this time around.

emmi
Guest
emmi

@29, maybe they want to leave room to have a big “price reduced” promotion on it.

George Soros
Guest
George Soros

Inventory on July 9 of last year was 19,053 or about 5.5% higher than today.

Inventory July 31/12 19,188

Inventory Aug 30/12 18,899

It will be interesting to see if we can make up ground and actually be above the July 31/12 level by the end of the month. A few more days like today and it might happen.

@YLTNboomerang
Guest
@YLTNboomerang

wow, cool story bro. now if only the name of this blog was calgarycondo.info, we’d have something.

YLTNboomerang
Member

Sorry for poor grammar and spelling above; I don’t type well on apple products

YLTNboomerang
Member
So I’m in Calgary this week, not for stampede, but to introduce our newest hire to key customers and had the following conversation that started after I explained the accrual of dividends on our corporate option awards at our end of day de-brief over a pint: Me: dividend accrual is a great perk but it scares the crap out of me how much I am exposed to the company…paycheck, rsp, dsu’s, options etc and I just don’t have the time to do my own research anymore so I keep buying company shares as I know we are still on a good trajectory Him: what about mutual funds? Me: ugh, largess! I went with a fee based advisor, no transaction fees, I provided my guidelines (do not invest in precious metals for example) and check back every 6 months tomre-assess strategy… Read more »
JD
Member
JD

Seems to me that rents are coming down in Richmond. Not sure about the new west market.

JD
Member
JD

Happy 18k!
When did we hit 18k last time?

JD
Member
JD

Even at 1800 without subtracting strata, we get 150 x 1800 = 270k for 1000 sft. Prices sure have come down if this is available.
Which development is this?

Best place on meth
Member
Best place on meth

Happy 18K…..again.

paulb
Member

New Listings 326
Price Changes 163
Sold Listings 165
TI:18022

http://www.paulboenisch.com

The Helmet
Guest
The Helmet

JD28, I am assuming $1800/month rent. This is not cap rate, this price divided by gross rent. Compared to a few years ago it was over 200. With recent drops, rent increases, and the added incentive, prices are coming down. I still think there is a ways to go but I also think we are on the trail.

mosesupposes
Guest
mosesupposes

So there’s this property (V1015028)that is first listed last week for $1.19m (I think, it was definitely under $1.2m)that is now listed for $1.225m less than one week later.

What’s the deal? I figure either they got a bunch of action and are simply trying to keep a bidding war going or they got a bunch of what they thought were low ball offers and they think low balling from $1.225m is going to result in a better number than low balling from $1.18m.

Any thoughts why a listing would go up $40K or so after one week?

JD
Member
JD

@the Helmut
How do you get 150?
My math is as follows:
Nice new west place at 1000sft is about 1800 ish / month.
Subtract 250 for strata is 1550.
150 x 1550 = 232,500.
Seems low for new west?