More speculator panic? - Updated

In our last post we related that CIBC economist Ben Tal had come out with some very bearish comments about Real Estate.

He had said his bias leans towards...

"an expectation of more significant price declines. This is basically a stagnating housing market, not a housing market that is going to be on fire. This is a housing market that you'll see activity moderating and prices actually going down. In Vancouver, prices are already falling from sky high levels a year ago, especially in the once bustling condominium market."

So you have to wonder if there is any signs of concern amongst speculators.

Last week we profiled speculators who had bought a west side home to renovate and flip... but were desperately seeking to bail mid-renovation.

But what of those condo speckers, the ones who signed up for pre-sales.  As some of them see their completion dates near (and the balance beyond their 10-15% downpayment looms), are any of them affected by the plunge in sales and explosion in listings we have seen so far this year?

Let us turn to craigslist.

Here we have a CL posting from someone who is trying to dump a pre-sale assignment for a townhouse at 277 Thurlow Street in the very upscale Coal Harbour of downtown Vancouver by Stanley Park. (click image below to enlarge)

Due for completion at the end of this month, it seems he is most certainly feeling the heat of those 'falling prices' Benny Tal was referring to.

The craigslist headline screams:

"Panic Sale - Reduced to Cost"

Offered is a luxury townhouse at the new Three Harbour Green development. With a closing date of March 31st, 2012 fast approaching, the burden of moving a 2,303 sq ft, 2 Bedroom + Den (with private roof top Patio and 2 full, 1 half bathrooms) seems to be weighing on our dear specker.

Asking price (which is advertised at being at cost): $3,500,000.

Promoted as 1 of only 2 townhouses available in the development, it seems our eager specker is in worse shape than you might have noticed at first glance.

Not only did he snap up this unit in the presale, but the CL notes he also has the 2nd townhouse for sale as well (listing for $3,000,000).

Yikes!

The contact person is in the CL ad goes by the first name of Alok (contact number 604-664-9915).

A search of that phone number comes back as belonging to Alok Kansai, a manager of the Vancouver (Surrey) branch of the countertop, flooring and cladding company Hari Stones Limited.

So it seems our speculator works in the R/E construction industry.

Clearly, as he services the real estate bubble, he couldn't help but try to grab himself a piece of the speculator pie.

But with the market turning, and with only 15% down for the assignment, one can only wonder at the mounting stress as he grapples with coming up with the remaining 85% of the $6.5 million due on these two townhouses.

Interestingly the CL advises that the GST is included in the advertised price on "these units only".

How many other units is this supplier is dabbling in, I wonder?

How will he be affected by the changes to the Canadian 'liar loans' to the self employed as banks no longer accept undocumented statements as to their 'income'?

Even if he can managed to pull off following through on the $6.5 million in new mortgages these two town homes require, what happens when he has to complete on the other units he has acquired in pre-sales?

More importantly... if Tal's predictions of "more, significant price declines" come to fruition how ugly are things going to get for him and other speculators in similar positions?

Me-thinks the 'panic' is only just starting to set in. I suspect we will be seeing a lot more of these 'panic sales' in the months ahead.

(ht to SunBlaster in Vancouver Condo Info comments section)

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