Vancouver Condo Info

As Mac pointed out this weekend, the most effective Vancouver real estate marketers know how to reap the benefits of free advertising provided by our local media.

Some of them are a bit too ham-fisted with their approach and get called out for generating obviously fake stories with fake buyers or fake houses.

But there’s one guy who really knows what he’s doing.

Bob Rennie isn’t referred to as the ‘condo king’ for nothing, he knows just the right way to keep the media interested.  Here’s how Mac put it:

Here is the depressingly effective PR strategy Rennie has used for years to effectively make the newspapers (and TV news) his free ad agency.

1. Start with a hook that splits the audience: either one hopes for it or is dying to refute: Boomers will finance the real estate market.

2. State a belief supported by your “insight” as an expert and mix with some facts. Leave it to the reporter NOT to know how to ask hard questions:

Boomers own their homes outright.

Feds have a hard time understanding our market.

Vancouver RE buyers are not entirely dependent on only their incomes to buy their homes, he noted. Just 4.9 per cent of Metro Vancouver residents make more than$100,000 [≈ Small rural house (2011)] a year, while 65 per cent earn less than$55,000 [≈ Median US household income (2009)] a year.

3. Plug your other projects: scaled down VAG and [fill in the blank] condo development

4. Recap with an example that is a tautology: someone sold in Shaughnessy for a bit less, therefore they will be buying their kids houses and financing the real estate market

5. Don’t address the other side of that argument (probably because the journalist can’t figure it out)…as in ‘What if the Shaughnessy seller had plans for the higher sold price and now feels “poorer” because they sold for less and gives less to their kids? Is there any trickle down effect on prices from that? And what if we do’t use Shaughnessy–the most $$$ neibhbourhood– as an example but use another neighbourhood instead where the price drops may be more significant and the family net worth, and negative wealth-effect might be less and maybe even they have more kids to “support” into their late adulthood?

6. Bring up an obvious example of something that has nothing to do with the main point you’re trying to prove to re-inforce your “expertness”: people like dens. They like them as extra bedrooms. (This was also true for every generation of grannies and grandpas). But my God! It’s true! So if you are right about dens, then you must be right about the Boomers, and the VAG, and RE being supported by these den-loving boomers who will take less rooms but want more room. (???)

7. Side your argument with the masses: “They won’t pay for crazy green initiatives or crazy lofts.” Same effect as no. 6 above. Gosh! You are right. Utilitarian condo for the kids. Luxury for the parents! And TA DA! You have proved the hook! Boomers will finance the RE market! And I don’t need to ask how, if the market has already declined, this will effect their net worth because I know they will use dens and prefer to visit Grouse Mountain over wanting to visit a proper Art Gallery that makes the Rennie Gallery look small.

Thank you Rennie, and thank you Vancouver media!

There’s another one of those semantics question articles in the Financial Post:

Canadian Housing: Bursting bubble or gentle landing?

Here’s one chunk of that article with a few asides that always seem to be missed:

Lewandowski believes Canada will not suffer a U.S.-style housing crash simply because policymakers had the benefit of watching it happen next door.

“What we experienced here in the U.S. with housing markets and regulators goes directly to the attitude and changes the minister of finance has made in Canada. A regulator who is being proactive is taking Step One in making sure the housing market doesn’t find itself in a bubble,” Lewandowski said.

So often it seems that ‘bubble’ is used as if it refers to the collapse in prices. It doesn’t. The ‘bubble’ is the inflation of prices beyond reason. By the time the collapse comes the damage is already baked in, falling prices are a correction of the problem, not the problem itself.

Both Bank of Canada Governor Mark Carney and Finance Minister Jim Flaherty have been on the march against a housing bubble for years, aware how low rates and loose lending standards in the United States ignited a boom and bust there.

Well, Carney and Flaherty have definitely been ‘warning’ of consumer debt levels for a while, but government policies like following the US into 40 year zero down mortgages didn’t help to prevent a housing bubble.

The central bank has held rates low since the global financial crisis because growth remains tepid and global woes weigh on Canada’s export market, and Canadians can find a five-year mortgage rate below 3%.

Meanwhile in the states you can lock in to a 30 year mortgage for 3.35%. In fact, while house prices in the US were correcting, interest rates were falling as well.

But the government’s gradual tightening of rules for borrowers — a firm admission that the market was hotter than anyone was comfortable with — has taken some steam out of the market, and economists, like Carney, seem to believe a soft landing may be at hand.

“We’re encouraged by the fact the level of housing starts has come down to slightly below demographic demand, as we see right now, there’s still more adjustments to go,” he said in testimony to Parliament last week. “We’re encouraged by the evolution of house prices in a number of markets. We’re on the path to a balanced evolution of the household sector and we all have to continue to be vigilant.”

Ok, we’ll continue to be vigilant then.

The Vancouver Observer has some good articles from the Real Estate trenches.

This one looks at what it’s like to shop for your first apartment in Vancouver.

What does $350k get you?

Not insuite laundry.

She lined up four apartments, all under $350,000. The cheapest is $250,000. None of them have ensuite laundry. If you think that giving someone a third of a million dollars would get you a washer/dryer, then clearly you’ve never apartment-shopped in Vancouver.

East Vancouver is heating up, because nobody who works for a living can afford to buy in the West End anymore. Rising rents make an investment property in East Van a more viable option than it once was, though proper houses remain out of reach for anyone on a Canadian wage. This keeps the pressure up in the apartment/condo market.

My Realtor says that the sales market is slower than it’s been in a long time: properties will sit for an average of 70 days. Still, there are vacant units that she won’t touch with a ten-foot pole: “I’m afraid to sell in Olympic Village, to be honest. I steer my clients away.” Dead neighborhood, small units, renovations that “probably won’t stand the test of time”.

Read the full article here.

Well here’s a counterpoint to the huge number of Canadians that own homes:

According to RBC, the number of Canadians planning on buying a home in the next two years has dropped to a record low.

Sean Amato-Gauci, senior vice-president of Home Equity Financing with RBC, says current economic and industry trends are consistent with this bleaker homebuying forecast.

But an overwhelming majority of those polled (84 per cent) still see real estate as a sound investment. While 52 per cent say now is a good time to get into the market.

Nearly half of those surveyed (49 per cent) say they expect mortgage rates to be same this time next year, while 43 per cent admit they believe home prices will continue to climb.

All clear? Fewer people than ever are planning on buying, but a majority still see ‘real estate’ as a sound investment and more than half of them think now is a good time to get into the market.. but only 15% are actually planning on buying.

Will they still be planning to buy if prices keep dropping?

Canada hasn’t got a Zillow yet, but that might be changing.

Rogers is making moves into the Real Estate business now:

The mobile and cable giant has applied to become a licensed real estate brokerage right across Canada and is aiming to relaunch its five-year-old website Zoocasa.com in May as a unique, one-stop-shopping site for homebuyers.
It’s aimed at going far beyond U.S.-based property listing services such as Zillow and Trulia which have revolutionized house hunting south of the border by providing critical data that can help potential buyers assess the value of a property from the comfort of their home computer.

Read the full article in The Star.

What is going on in the mortgage world?

Now Flaherty is personally calling up banks and asking them to raise their mortgage rates.

On Tuesday, Manulife Bank dropped its posted interest rate for a five-year fixed-rate mortgage to 2.89 per cent. That’s the lowest posted rate for that time frame the company has ever offered. But in an about-face later in the day, the company pulled the offering and reverted to its former rate above three per cent.

“After consulting with the Department of Finance, Manulife Bank has withdrawn the promotional campaign and reverted to our previous posted rate,” the company said in a statement.

Read the full article over at the CBC.

Are a few pips in mortgage rate really driving people to run out and overpay?

Could our market get any more surreal?

As if marketers pretending to be buyers wasn’t weird enough now there’s a pretend house as well.

Last week there was the story about the 2nd most expensive property ever listed in Canada

(spoiler alert: it’s a teardown in West Van).

It turns out those pictures of a weird gaudy Barbie palace that looked like it was built out of frosting and gold plastic were not of the actual home.

The Sun has since learned that the photos on the listing realtor’s website are artist’s renderings and not photos of the actual home on the property. The home on the property is a rancher/bungalow built in 1964. Realtor Laura McLaren says the images on her website depicting a mansion “are renderings of what could be built on this property.”

Yep, they’re ‘artist renderings’ of the sort of thing that could be built on that property.

Design is subjective, but if you had $38 million and enough left over to build a dream home would this be your ideal style?

The second most expensive property ever listed in Canada is a teardown in West Vancouver.

It’s like an itty-bitty Versaille on a waterfront lot.

But there’s something special about this waterfront lot:

Asked how the home has changed since 1964, Tsavdaris answered: “It hasn’t.”

The current owners, who have lived on the West Bay property since 1978, are looking for something smaller, according to McLaren. “They just want to pull the value out of the land. It’s the last piece of flat waterfront,” she said.

That’s right, it’s the absolutely last piece of flat waterfront until the next waterfront teardown comes onto the market.

..And what exactly is the magic of the Trump brand?

If you’ve been paying attention to the Vancouver condo market for a while you might remember an interesting twisty tower planned for downtown – the Ritz Carlton was going to be a high end tower with a Arthur Erikson inspired twist.

But in the dark days of 2008 the global economy all of sudden realized it had to pay some bills after a big ‘ol credit binge.

Many projects were affected and the Ritz Carlton was one of the larger ones in Vancouver to be put on hold.

Well, news from CBC says it’s back, but it’s no longer the Ritz Carlton as the developers have purchased the Trump name to stick on it now.

It’s a curious strategy as most of the news from the recently constructed Trump tower in Toronto has been overwhelming negative.

It all started with ‘investors’ complaining they were misled and trying to get out of their contracts by suing the developer who then sued them back.

Buyers then complained to the OSC but were told there would be no action on the matter.

Then there’s the falling glass.

It will be interesting to see if the Trump brand has a more magical successful effect here on the west coast.

Hopefully so because I for one would like to see some towers that vary from the standard clones on our skyline.

A few random tidbits today:

First off we’re right up around 15,000 listings for sale and we’re not even half way through the month. According to numbers from inventory we’re at 15,007 but Paulb’s numbers show 14,993.

So today will either be a record breaking sales day or we’ll get nudged over the 15k mark no matter how you count it.

If you’re the sort that just can’t wait, VHB is hosting a 15k party over at the Vancouver Peak now.

In other news earlier this week the question was “hey, isn’t that supposed foreign buyer on the evening news a local condo marketing employee?”

Turns out the answer is yes, according to Village Whisperer.

Over on the MAC Marketing Facebook page a CBC reporter is asking for clarification on this issue.

Matthew Black I was the CBC reporter on this story and feel some clarification is in order:

*Can you confirm that Amanda is the employee you refer to in the post above?
*Is Chris Lee (from the TV pieces) actually Amanda Lee’s sister?
*Is Chris Lee a genuine prospective buyer from China, or, is she also a MAC employee?

I trust you still have my contact information…