In California the real estate collapse first started to show at the top end of the market with high end properties suffering dramatic drop offs.
Are we starting to see that here?
It's possible. How else to explain the British Columbia Real Estate Association's chief mouthpiece, Cameron Muir. coming out this week to pump the high end of the market with this puff piece on Global TV:
Muir tries to calm the market with the rational that investor class Asians are keeping the market up and protecting real estate values here. This follows several other news stories this week promoting the same viewpoint.
That, btw, is you first clue that the 'story' is being engineered as an R/E PR operation. We saw this last year when the market dropped... real estate associations begin their PR campaign to re-assure sellers to prevent them from panicking and setting off a cascade of price reductions.
Personally I love this phase and find the whole gamut of media manipulation fascinating.
There are reports, on various real estate blogs, of high end R/E sales completing at anywhere from 5% - 14% below asking prices... a far cry from the tales of bidding wars of the last few months with houses selling far above asking.
But perhaps the most telling sale is this one documented on Larry Yatkowsky's site. A 15,000 square foot home on almost an acre of land at 3639 Osler Street sold last month.
In January the asking price was $16,800,000.00.
It sold in May for $11,080,000.00 - $5,720,000 less than asking or 34% less than what the seller originally wanted.
Did he grab an offer for 34% less than what he was asking because the market is clearly starting to tank?
It's still early in the process yet, but with Cameron Muir doing his Blue Oyster Cult impression already, events are clearly starting to show a shift in fortunes.
Asian money didn't prevent a collapse in California and it won't here either. Let's face it. Why buy a property at full value if you sense in a year you might get it at half off?
The 'wealthy Asian investors' are wealthy... not stupid. Which explains the R/E PR machine's need to begin trying to calm the panic amongst sellers.
Go ahead... take Cameron's hand. "You'll be able to fly."
Click 'comments' below to contribute to this post.
Please read disclaimer at bottom of blog.