Friday, June 29, 2012

Global reports the facts, concludes ours is now a 'depressed market', but then claims we're 'different'

If you are new to reading blogs which focus on the Vancouver or Canadian Housing Bubbles, you probably aren't aware of the complete distain many in the community have for the uncomfortable relationship that seems to exist between those work in the real estate industry and the mainstream media.

Critics pinpoint advertising dollars as the foundation of what appears to be a symbiotic relationship between the two and complain the media isn't giving the Canadian public a proper, critical view of the dangers - or existence - of the growing real estate bubble.

Worse... critical media is subjugated and transformed into nothing more than a public relations arm of the real estate industry.

And when it comes to television, no one station seems to epitomize that corrupt relationship to the critics like Global TV.

Bearish Real Estate blogs rail against the fluff pieces that Global TV seems to generate. 

In fact, when it comes to Real Estate stories, Global always seems to be the ultimate optimist.

Like the man who is finds himself standing in horse sh*t up to his waist - Global TV is the station that looks around and proclaims, "Gee... there must be a pony around here somewhere!"

This belief is hammered home by a story which aired earlier this week.

Unable to ignore the impact of market conditions, Global TV starts off it's latest examination with hard facts that would have most in the Real Estate 'bear' community believing Global is finally presenting a balanced picturet:
Vancouver Real Estate had defied trends and showed steady growth for far longer than anybody believed possible. The evidence is not in the polls, which very often contradict one another, but on the ground, in the neighbourhoods where plum properties have always sold quickly and at a profit.

Sellers are finding the days of multiple, over-asking offers have disappeared. At least in the condo market. And buyers are getting the pick of the crop with buyer reduced signs popping up all over the place.
A real estate agent takes the Global reporter to several upscale apartments in choice Vancouver neighbourhoods and highlights their desirable selling points. Viewers are then told the units are being reduced in price, an action completely unheard of through most of our ballooning housing bubble.

The take on the situation from the realtor?
"If you want them (condo's) sold, you have to reduce."
This view is identical to the one we shared with you yesterday from Richmond realtor James Wong. And the Global TV reporter summarizes the real estate situation in Vancouver succinctly:
It seems to be a growing trend in Greater Vancouver. Drop you asking price to get results. With listings up over 15%, and sales down by the same amount from May this year to last year, 1 in 5 sellers have reduced their price.

What's different is the frenzy created with the flood of Asian buying has cooled.
Global rounds out the state of the current market by next showing you that even single family houses are seeing prices slashed.

But it's at this point where Global seems to change direction - dramatically.

Sales are down, listings are soaring, realtors are saying if you want to sell you must slash your prices.  A declining market, right?

Not according to the real estate industry... err, Global TV.

Global trots out their favourite apologist, Tsur Sommerville.  And suddenly Global TV makes the case that Vancouver is different. And that the fundamentals of the market simply don't apply here:
Sommerville: Now we have a situation where prices aren't rising, they're flat. We have a situation were listing are rising, sales are falling and there isn't any of the kind of angst or anxiety out there in the marketplace. Instead what it's replaced with is less worries about people driving prices up and more worries about Greece blowing up the world economy.

Global Reporter: Vancouver is that market that is way different than any other kind of market.

Sommerville: Vancouver is very hard to figure out because so much of the purchases are done by wealth. Either people immigrating with wealth or people receiving wealth from parents or relatives so the normal 'what are incomes doing and what are prices doing', that just doesn't work out here well.

Global Reporter: And that may explain that while there are price reductions, average selling prices just aren't going down. Unlike other depressed markets in the world, there's no pressure to sell. And with our geography, the mountains and the ocean, it's not likely to change.
Did you catch that?

Global TV slips in that ours is now a 'depressed market'.

Then they quickly gloss that over by saying that we're "unlike other depressed markets", that ours is different. Then they imply that the inevitable outcome for depressed markets won't happen here.

What drives observers crazy is that it's not Sommerville, a supposed expert, making these statements.

These are the conclusions of the Global reporter.

It's as if Global is trying to reassure the market instead of reporting on what's going on in the market (and possibly triggering panic).

Is it balance reporting or manipulative massaging of the facts?

When Global TV puts out pieces like this, and makes these types of conclusions, few in the blogosphere think 'balanced' even enters the vocabulary.

(Hat tip to GreenhornRET and Liam for the video clip)

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  1. Brilliant and bang on Whisperer! Excellent post.

  2. Excellent analysis whisperer. But be aware - as you identify - this is exactly what happened in the UK. They're trying to engineer a bounce by telling people they're getting value with a 5% off.

    Remember UK is now down 35% from peak and still (gently) falling.

  3. further to my last comment, if things should follow the UK/US experience, then expect to see sharp declines of around 15% between now and year end (my guess would be Q4 12 Q1 13) followed by a very slow wobbly decline for a few years thereafter. Personal indebtedness in Canada might well be the straw that breaks the beaver's back, given that it's now higher than it was in the US or UK before their crashes... let's see!

  4. It is obvious that the Global reporter, Brian Coxford has a huge mortgage.

  5. I have never tuned into a Global news report - except for these clips that get posted on sites like this. I don't have time for their crap.

  6. Media in Vancouver is the worst of anywhere...

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  8. Its all a bunch of crap,all of the airwaves are owned and run by a $elect few telling you what to think what to eat what to wear and where to live. They tell you if you are a success or not. It's actually called mind control. GLOBAL MELTDOWN, don't buy the lie it will waste your life, and time is priceless.

  9. Inventory at almost all time highs all over the city. Price reductions ALREADY all over the city, the average 1ml house has de valued 10% or 100k in the past few months. But its all good,oceans of bad economic news and mountains of individual debt... GLOBAL AGENDA TV.

  10. I love the set-up in the first para too with the "plum properties have always sold quickly and at a profit."

    Always?! Um, no. They haven't.

    1980's anyone? Why don't they ever report on what happened the last time property prices veered wildly off a cliff?


  11. 1 in 5 sellers having reduced their price is a lie... Pretty sure they are only counting a price reduction on a single MLS number so the countless people that pull and relist lower does not get captured in this. I'll be running a report shortly on this

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    2. 38%

  12. Depressed housing markets has all their different stories as to why their market keeps going down and never actually recover. This is something, like in Texas, that realtors who took their Texas mce online and other as well, shall attend to and make solution.