Wednesday, March 18, 2009



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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