Thurs Post #2: Lower Mainland Real estate developer starts accepting Bitcoin

Abbotsford developer Quantum Properties says they are accepting Bitcoin for a deposit on any of their residential developments.

The company is currently marketing more than 400 condos in Abbotsford and Port Coquitlam.

President and CEO of Quantum Properties Diane Delves says she has been following the digital currency for a while and thinks it is the way of the future.

“I was fascinated by the concept. We have been looking at it for a while. Finally as of today, we made it official that we are going to accept Bitcoin.”

Delves says they have yet to see what the buying public thinks of it.

“We wanted to offer it as an option. It was sort of like –let’s throw it out there and see."

Delves says as far as she is aware, no other developer is accepting Bitcoin.

The average value of a condo that Quantum Properties is marketing is $250,000, and the deposit is usually within a 10 per cent range.

Delves says she is aware of just how volatile Bitcoin can be, but it is not a big concern for them.

“We might win some, we might lose some. We will convert it to currency and if we suffer a loss, we will count it as a marketing cost.”

Source: Global BC

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Red Pill or Blue Pill? Median Price data and spinning the numbers to boost buyer confidence.

In pop culture the blue pill and its opposite, the red pill, are symbols representing the choice between the blissful ignorance of illusion (blue) and embracing the sometimes painful truth of reality (red).

The terms derive from the 1999 film The Matrix. 

In the movie, the main character Neo is offered the choice between a red pill and a blue pill. The blue pill would allow him to remain in the fabricated reality of the Matrix. The red pill would lead to his escape from the Matrix and into the "real world".

Realtor Larry Yatkowsky plays off the pop culture pill reference in his latest post which gives us the median price data from May, a contrast from May's average price data a few days ago.

Removing the skewed data of high sales and low volume, the charts show most area prices dropping last month.

Of course data is meaningless without the right spin and the real estate spinmeisters are in overdrive this month as the battle for 'consumer confidence' is endlessly waged.

May is often considered the bellwether month for real estate sales. And while the number of home sales last month is still well below the 10 year average, the numbers are up from last month and there is an increase year-over-year in some categories.

Of course 2012 was a dreadful year so any increase, no matter how small, is cause for celebration right?

For example there were 1,212 detached property sales in Vancouver in May, up from April’s 1,064. 

But those sales are down 22.8% compared to May 2012.

Detached unit sales in May 2013 totalled 534, an increase of 3.3% compared to the 517 sales in May 2012.

That figure, however, is down 7.8% from the 579 attached properties sold in May 2011.

So it all comes down to how you want to look at it.

The real estate industry (naturally) see's great potential in this data. Toss in the fact that a condo listed for $28 million in downtown Vancouver - which has languished on the market for almost 2 years - has now sold for $3 million below it's asking price (yet still setting a record for the most expensive condo sold in Vancouver) and the fodder is there for the spinners to declare the correction over and real estate taking off towards a new housing boom!

It's all about confidence and massaging that theme is sure to take on prominence in the coming weeks.

Perhaps the coming glut of 'good news' will perk up these sellers? Observer's Vancouver Price Drop is back after a three week break. He has the monthly drop for May 2013 for us and and the top 20 properties this time around combine for a stunning $98 million in price cuts from their original asking prices. If there's a group that needs confidence and massaging it's this bunch.

Presumably they are still depressed from reports, like this one, which trumpet that Canadian homes remain the most overvalued in world wide rankings.

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Are bloggers Public Enemy No.1 in an attack on the fundamentals?

Watching the news this week, you can  can see the real estate industry mounting their latest counter offensive to spin their message.

And that message will be... 'fundamentals don't matter'.

Despite having rejigged they way the benchmark price is calculated (twice this year, actually), the reality of the market is becoming hard to ignore.

Sales in May for all forms of housing across the Multiple Listing Service were down over 15.5% from last year, and the lowest for the month of May since 2001. For detached homes sales, the news is  even worse: They were down 25% for the same period last year.

While sales have fallen, the number of listings has risen. In the Vancouver westside, which is held up as the main beachhead for the Asian invasion, the total of active listings — those homes for sale that haven’t sold — has risen to 1,100 properties at present from 600 a year ago.

The pathetic attempts to neutralize the impact of these figures prompted Vancouver Sun columnist Pete McMartin recently to state the obvious:

Commenting on these numbers, the resolutely sunny Real Estate Board of Greater Vancouver decided this was “indicative of balanced market conditions.” But then the board would have viewed the crash of the Hindenburg as the result of “normal deflationary conditions.”

Yesterday we drew your attention to one of the latest piece by Global TV (Global reports the facts, concludes ours is now a 'depressed market', but then claims we're 'different').

 Global has also been unable to ignore the obvious:

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... and buyers are getting the pick of the crop with buyer reduced signs popping up all over the place.

They were even forced to admit that Vancouver is now "a depressed market".

So if the spin no longer works and the ugly numbers cannot be ignored, what do you do?

Invalidate the usefulness of the numbers, of course.

You could see the strategy launched when Bob Rennie spoke to the Urban Development Institute on May 17, 2012. Rennie said:

I joked with the CHMC’s board a couple of years ago, that the Vancouver market never went up on fundamentals, so why would we go down on fundamentals.  

However, our market really does have fundamentals but our fundamentals cannot be captured in a 90 second elevator conversation, at the water cooler, in a sound bite, and especially not on a blog or 140 character tweet.

And what are those fundamentals that cannot be captured in a 90 second conversation?

I think we saw that in the Global TV piece yesterday as well.

The spin we are going to see is the same as we have heard over and over before. "Rich people wanna live here.  We have limited area due to the mountains and the ocean.  And we have the scenic and lifestyle advantages of those same mountains and ocean." 

This is basically what Global TV said when they trotted out Tsur Sommerville:

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.

I suspect this will be the theme for the foreseeable future.

Claim prices simply can't go down here.  Tell everyone that wealth wants to be here. And desperately try to convince you to "buy now or be priced out forever".

And to the one segment of the community that the industry can't influence the peddle this message - the blogosphere - Rennie summed up his frustration in that May 17th UDI speech:

I do have a huge concern over what Tracie McTavish, the president of our company calls, your “Keyboard Courage”, referring to what is becoming a dangerous and apparently acceptable practice which is, negative market commentary that is nothing but speculation.

Speculation made by spineless, signature‐less, individuals on a blog, on a blog that in most cases has less than 500 followers.

Then the next thing you know, the mainstream media picks up on the negative as fact and all of a sudden, it’s breaking news and our industry spends the next 6 months attempting to dispel the rumors and sound bites.

The dispelling of the "rumours and sound bites" of the basic market fundamentals (ie. the inescapable reality of the hard sales data) has begun.

And it would appear that in this attack on the fundamentals, the blogosphere is being cast as Public Enemy No.1.

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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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Mon Post #2: More on the latest Cam Good/Global TV scam - updated

In our earlier post today we made note that our good old buddy, Cam Good, who was in the news promoting selling Condos in a fashion similar to the wildly successful Groupon coupons.

Cam gained notoriety last year when he hired a helicopter and flew supposed realtors from China around White Rock promoting condos he had for sale there. The suggestion was HAM was moving south to White Rock as well.

Turns out those realtors from China were actually Canadian realtors of asian descent from Vancouver.

Is Cam up to similar tricks again?

Did you note the interview with one of the prospective investors, Tara Fluet? That's a screenshot of her above from the Global TV interview.

Tara is identified as a ‘White Rock Investor.' What does she have to say about her experience?

“With Groupon, and the way it exploded, you do get great deals on there, so, why wouldn’t it work with condos, the developer here wants to sell the last few units, so if 20 people come in and buy them all at once, they’re obviously going to get a better deal than coming in one by one.”

To refresh your memory, here is the clip:

Interestingly if you a google search for Tara Fluet you get the following:

Apparently she's works as one of the realtor 'sales representatives' for Cam Good in the marketing of those very White Rock condos. (hat tip VREAA).

One of the commentors on the thread at VREAA said:

I phoned Global TV to complain about this and spent 10 minutes trying to point out why the lack of information about Ms. Fluet’s connection to Cam Good might mislead viewers into thinking her views as an “investor” were impartial.

The woman I spoke to at Global could not for the life of her understand what I was objecting to, even though I tried repeatedly to explain it. In fact, she grew indignant. She insisted that if Ms. Fluet is an investor, it was perfectly appropriate for her to comment even given her connections to Cam Good.

Faithful readers will recall that while discussing Marine Gateway, I mentioned that I had been told it is common practice to strike a deal with realtors that, if they want to be an exclusive agent to sell in a development, they had to pick up 5 to 10% of those options each. Once the development is finished, and all the developers suites are sold, then those realtors could sell the units they picked up to be a part of the sales team. It means that these exclusive agents could by buying up half of the pre-sales at an offering themselves.

As a sales representative for Cam Good's White Rock development, she probably had to pick up a few units herself.

Technically that makes her an 'investor' and, as far as Global TV is concerned, can be portrayed on their broadcast as an ordinary investor.

Riiight!

Real estate investor? Or real estate con artist?

You decide.

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