Sleight of Hand?

The Craigslist Ad is enticing, alright.

• "This is it! An affordable opportunity to own in beautiful downtown Vancouver in Yaletown at way less than original purchase price."

Peaks your interest doesn't it? Especially since the condo market appears to be softening up in the Village on the Edge of the Rainforest.

More from the Craigslist ad:

• "Suite #1405 at the "Beasley" (named after former city planner, Larry Beasley)is the highly sought after "E" plan and originally sold for $547,900. We are offering it for sale at an incredible price of $459,000 (assignment of contract). The "E" plan is one of the very few plans in all of Vancouver that are a corner suite taking advantage of the natural light. It includes a stone granite kitchen island that opens up to the spacious living and dining room area, heated tile bathroom floors, Stainless Steel Kitchen Aid appliances and engineered hardwood floors. Not only does it have a den but also an extra flex space thereby smartly utilizing its spacious 678 square feet. The added amenities include a fully equipped fitness centre, meeting and library rooms and not to mention the unique 8th floor, 60 foot out door dog run area. The building is currently under construction from reputable local developer, Amacon who is responsible for building many beautiful properties within the city for the last 40 plus years such as the "Brava", the "501" and the "Melville" to name a few. Completion date is set is on target for a November 2011 completion... I was also one of the original sale people on this development. I look forward to hearing from you."

Wow!

So one of the original sales people is (apparently) cutting his losses and is willing to offer you one of the suites that he had secured for himself (presumably to flip), cutting the price from an initial $547,900 to $459,000: a loss for him of $88,000 (about 16%).

Or is it?

Keen local market watchers may recall an initiative launched by Amacon Development in 2009 called the 'pass it on' campaign. MAC Marketing Solutions trumpeted this campaign and rolled out the first version with the stalled Yaletown condo development 'The Beasley'.

In this campaign, Amacon offered reductions on the prices of their condos ranging, on average, from $100,000 - $250,000 off the initial purchase price. And these 'savings' were even extended to those who had already signed pre-sale agreements to purchase at the higher 'initial purchase price'.

It means no one ever actually bought a Beasley unit at the 'original purchase price'.

In all likelihood our Craiglist sales person paid, at best $447,900 for his Beasley condo. As a salesman associated with the project, he no doubt paid less than that.

Caveat Emptor, as they say, because these condos at the Beasley have already seen 'cuts' from their initial purchase price of at least 22%.

So it this a deal in a downturning market to offer the unit at $88,000 off the 'original purchase price' when the units actually sold at a minimum of $100,000 off that original price?

You decide.

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Email: village_whisperer@live.ca

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Semantics?

.

They say advertising can sell anything.

And as we have discussed recently, the media blitz by the R/E Industry is in full swing to convince you that 'now... is a great time to buy'.

And although current statistics for March are still showing sales down by almost 30% from March last year, active listings up almost 25%, and months of inventory up an astonishing 71%; it appears there is a bit of resurgence in the Lower Mainland real estate market.

Some R/E Pollyanna's are even declaring that the bottom of the market has arrived and we are back on an upswing.

The cheerleaders point out that despite the ongoing and dire negative news about the economy and job losses, daily housing sales in the Village on the Edge of the Rainforest average about 100 sales per day.

And in the midsts of those sales come reports that some of those sales are closing with offers higher than the original asking price!

But before we go out and declare a new R/E 'bull run', let's temper the enthusiasm with a reminder that sales are still DOWN 30% from this time last year and months of inventory has shot up 71%.

Perhaps a more poignant reality check for the real estate cheerleaders is the announcement yesterday by MAC Marketing Solutions of a new marketing campaign for the Yaletown condo development 'The Beasley'.

In an initiative called the 'pass it on' campaign, Amacon Development is offering reductions on the prices of their condos ranging, on average, from $100,000 - $250,000 off the initial purchase price.

Remarkably Amacon is also offering the same reductions to the pre-sale buyers of 'The Beasley' who have already committed to the original purchase price.

According to their press release, Amacon reviewed the construction costs they were saving in this down market and readjusted their prices to pass on the savings to the consumer.

"We are in a very different market than a year ago; when we negotiated our construction costs and realized the savings we made, we were happy to pass on that savings to our purchasers. We're putting everything out into the open as we see it's a win-win-win situation," says Cameron McNeill, president of MAC.

It's a shrewd campaign.

But let's face it, if the real estate market was truly rebounding, would Amacon be cutting prices by $100,000 - $250,000?

Do you think - with losses hitting every developer in the city - that Amacon would flush away a profit margin like that just to project an aura of altruism?

The cold, hard reality of the business world is that months of inventory is up over 70% in the Vancouver Real Estate market. Furthermore there is a plethora of new condos coming onto the downtown market this summer & fall.

Competition for the condo sales dollar is going to be intense.

And in the ever-upbeat world of positism that is real estate, a 'pass it on' sale is far more palpable than an 'inventory liquidation' sale.

Doesn't quite project the same stench of desperation that way.

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Email: village_whisperer@live.ca