More on the $1 Condo for sale in Richmond and other realtor gimmicks

Yesterday we told you about a Richmond condo that had slashed it's asking price from $355,000 to $1.

Hoax?  Data entry error?

Adding to the mystery was the fact that various sites and realtors had updates with the 'new price'. Richmond realtor Arnold Shuchat  even commented on his blog about the listing.

Shuchat said:

I've just uploaded this listing for a condo at the Laguna in Richmond. And I always thought 1% Realty referred to some commission arrangement! This ranks as one of the largest price reductions ever: From $355,000 down to $1!

We asked if anyone knew what this was all about?

Was it an error? Or was it legit?

In case you missed it, Arnold Shuchat posted a reply to our comments section on that post.

(the post came minus the academic credentials after his name in his google blog signature. Does that mean we should stop referring to him as 'Alphabet Arnie' ?).

Shuchat tells us: 

Well, after getting a few calls on this one, I checked in with the listing realtor. It turns out the one of the owners is a Toronto based realtor and there has been a trend there to list properties for $1 to create some attention. They have no intention of selling for $1 but expect to have offers presented on Sunday night....etc. 

Based on a lot of negativity on some of these blogs, it would be an interesting wager as to whether a multiple offer scenario will materialize.

It will get sold because I think the owners will do what has to be done to sell it. 

I also predict a post-sale advertisement claiming "Sold $315,000 over asking price"!

We thank Arnie for the info and look forward to hearing from him with what the outcome on this little bit of realtor games is.

And Shuchat is right, you can almost see the press release sent out by the selling agent trumpeting just as Shuchat joking predicts: "Sold $315,000 over asking price!"

But let's face it, if it draws attention and the bids come in... it is a creative advertising gimmick to list the property for $1 and set a deadline to sell to the highest bidder.

And there's nothing wrong with that (providing they actually sell to the highest bidder).

Which is more than I can say for this next example.

As everyone is well aware, the federal government moved last year to eliminate the various ways banks had been helping home buyers skirt the 5% down payment requirement (ie. up to 7% cash-back offers).

We also know, all to well, that the biggest lament in the real estate industry right now is how significantly the new mortgage regulations have impacted entry-level buyers... effectively cutting the knees out from those looking to climb the 'property ladder.'

Check out the latest weasel manoeuvre to circumvent the new mortgage regulations.

(although I'm sure they would prefer the more politically correct analysis of 'creative accounting').

The latest ploy comes to us via this pamphlet for a Langley condo development.

The pamphlet outlines how first-time buyers can receive, from the provincial government, a $10,000 first-time home buyer grant.

Their suggestion (as you can see the the third picture above - click on image to enlarge): "Borrow the down payment from your favourite Uncle and pay him back when you get the $10,000."

The key to that $10,000 can be seen here:

With units starting at $179,900... the $10,000 would cover your 5% down payment to buy in this Langley development.

Nothing like watching some elements of the real estate industry actively encouraging home buyers to evade regulations eliminating those derisive 'zero-down' lending practices.

Who says we're all that different from the Americans?

(hat tip Tom)

Of course aren't liar loans, zero down, government R/E handouts and an industry that relentlessly pumps these options how we ended up at this apex where living in a van becomes a lifestyle choice?:

(hat tip GreenhornRET for video)

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Sat Post #1: Global TV reports Vancouver Real Estate Prices To Fall 10% in 2013

Buried in a piece of about the economy, Global reports that Vancouver Real Estate will drop another 10% in 2013.

Naturally is is couched with the rationalization that this drop will be - at best - a correction, not a crash because interest rates aren't heading up anytime soon.

But it's significant to note we have now moved from the "prices are flat" mantra to this is a "correction, not a crash" mantra.

(hat tip GreenhornRET)

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The media barrage about real estate continues

In conjunction with the Maclean's story, the media barrage about the dismal real estate market continues.

The latest is Global TV, whose intro to the news story above starts:

The image may be attractive, but the reality sure is ugly when it comes to Vancouver real estate. New numbers for December show a bloodbath for residential sales.

To provide 'balance', the real estate industry gets to add the spin denied by Macleans.  And the message is the same: there is no bubble.

The ray of hope being proffered?  HAM will return!

Global ends with the R/E mantra that while sales are down and prices are holding firm.

Which brings us to the 2nd Global clip which focuses on the release of the new assessment values:

And it's the Global commentary that catches the breath of the bear observer used hearing the pro-R/E mantra from Global TV:

Your property assessments are now in the mail. And for the first time in years, house values in some of the Province's hottest markets have actually declined. While most assessments will reflect a slight change from last year, others will come as a quite a shock, reflecting a definite 'cooling-off' of the real estate market in places that were once white-hot.

Naturally the real estate 'experts' are trotted out to tell you prices are actually 'flat' and not falling... and that the 'fundamental's' mean real estate can only go up.

Curiously even our buddy Tsur Somerville let's slip that we are seeing a "slight easing of prices."

With Global TV now clearly highlighting the bearish style of the equation, it's clear the media can no longer simply gloss over what is going on.

(hat tip to GreenhornRET for the archiving of the video clips)

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"The price increases of the last decade are long gone."

You've got to wonder just how significant the shifting mindset amongst the public is regarding real estate when even Global TV is now openly saying the following:

"... there hasn't been a crash, thankfully, but Ottawa and the Bank of Canada are desperate to raise interest rates once the economy improves. Economists are expecting the rates to start inching upwards by late 2014 - meaning the price increases of the last decade are long gone."

Kinda kills the whole campaign to get people to buy the current dip, doesn't it?

Of course the same talking heads who want you to buy the current dip also want to insist there is no dip - prices are just flat and will remain flat (real estate never goes down, don't you know?).

Meanwhile Cameron Muir wants you to know that:

Last year’s figures must be taken “with a grain of salt,” Muir said because the prices were inflated by a large number of luxury homes for sale in West Vancouver, Richmond and Vancouver’s West End.

Really?

In all the breathless monthly reports we saw last year from the BCREA, does anyone recall being told to take those figures with "a grain of salt?"

Muir also wants you to know that:

"The federal government’s decision to reduce the maximum amortization period for a government-insured mortgage to 25 years from 30 years also affected home sales.

That could add up to $160 on the monthly payment of a $350,000 house.

That no doubt has squeezed some potential buyers out of the market."

So buyers are extending themselves so thin that an extra $160 a month collapsed the real estate market?

If so, imagine what a few interest rate points might do?

(hat tip to LM and GreenhornRET)

On another note, isn't the world supposed to end tomorrow?

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Mon Post #1: A Vancouver condo for 34% off original sale price?

We've posted an example of a Richmond home selling for 33% below assessed value and now are we seeing similar 30%+ plunges in Vancouver?

According to this Craigslist ad (click on above image to enlarge) from Rennie Associates, an Olympic Village penthouse now has an asking price 34% below the original asking price.

Not as spectacular, but now less significant, the add notes that the asking price is 25% below original purchase price:

Penthouse suite, 2 bedroom and den, over 1,000sf in Olympic Village. Priced reduced by $370,000 for immediate sale!! Huge deck with a nice view of the water. Perfect for entertaining. Make an offer now and get a nearly new Penthouse condo at a 25% discount from the original purchase price!! Call today for a private showing.

Will the final sale come in at 30%+ below the original sale price?

Tuning into Global TV the past few days might convince you it would.  First the most bullish of TV stations talks about the 'Death of the Condo Presale in Vancouver':

And then a story on 'Vancouver's Deflating Real Estate Bubble' (hat tip to GreenhornRET for posting the clips):

I wonder if IAMWILL is going to question Global's agenda?

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Wed Post #2: Global TV Reporter declares "Vancouver Asset Bubble has burst"

Global is out with a story covering the dismal September real estate sales numbers and the Vancouver market is portrayed as having entered 'the Big Sleep'.

But as you check out the clip, take note of the reporter's comments near the end of the story:

"Many have felt Vancouver is overdue for a dip. The frenzied demand from last year is long gone possibly, some believe, because foreign demand has waned. Whatever the reason, the asset bubble that many worried was building - has clearly burst."

How many thought you would ever hear a reporter on Global TV make that statement?

(hat tip to LM. Thanks to GreenhornRET for uploading the clip to You Tube)

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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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