experts: real estate column Tuesday, September 08, 2009

Can the media make the market?

Certain media's propensity to 'create' news by highlighting the horror of the 'worst case scenario' - best case scenarios are never used...

By Alan  Skinner

Before I launch into the "state of the North Shore union" commentary, I want to talk about certain media's propensity to "create" news by highlighting the horror of the "worst case scenario" best case scenarios are never used no mouth-dropping effect only "logical" skepticism! To illustrate this I'll use the Cover page of MacLeans' magazine, which, at time of writing is dated almost exactly six months ago (March 2/09) - and an article. First the headline "House Prices The Good News The Bad News". Incidentally, the other secondary 'headlines' on this cover were "One Tough Mother. The Spectacular Rise of M.I.A." (the Grammy nominated, hip-hop, garage rock, politico singer) and also "Face It Quebec: France is just not that into you". Typical "new genre /new age" headlines for our metamorphosing "wannabe edgy" 'official (?) magazine' of Canada.

So, to continue, MacLeans' "good news" in a sentence was, "Canadian real estate will soon be much more affordable". The "bad news" was the ominous proposal, that, "The value of your home is about to drop another 20%". Wow, great magazine selling rhetoric! The first issue the magazine buyer faces, turning to the article (described incidentally as a "SPECIAL REPORT" all caps) is that the author cites as evidence for his proposal, one buyer's "devastating" story. Space is limited so I'll only quote the first paragraph in full "There are still people out there who don't believe Canada is about to be hit by a devastating housing crisis, but ... (name omitted) ... isn't one of them. For him the crisis has already arrived." The following one and a half columns proceed to describe this unfortunate buyer of a (to be built) $1,500,000 penthouse condo in Yaletown. To bind both parties to this contract, the buyer advanced an $80,000 deposit. After this contract was confirmed (although how long after, is not stated) he put his current home on the market and after lowering the price "again and again", (a total of $120,000 below the original asking price) had been unable to find a buyer. It would be interesting to know if this buyer had representation from a Realtor (or legal advice) or if he chose to buy directly from the Developer's agent with limited (or no) representation (advice). While the article is 'riveting reading' in its entirety we'll move on (use above URL links or get access via September Update at www.AlanSkinner.com and follow the link in the article). Of greatest significance here is the amazing inaccuracy of these predictions for us here in Vancouver (which incidentally was the "poster child" of the article). Since Mar/09 when this was published, Greater Vancouver values which had already dropped some 20 30% have likely bounced back to within about 10% of the "high point". As I've said in previous updates, the best deals were to be had in the Jan March time frame and these are becoming like "hen's teeth" with the dramatic drop in overall inventory and rampant sales figures of the past few months.

So, you be the judge as to MacLeans' dramatic mileage six months ago and the actual evolving scenario based on the sales, average prices and inventory picture below.

The YTD 2009 [first eight months] vs. corresponding 2008 figures for the North Shore. North Van detached homes sold are now up by 11% from last year; attached (t/homes) are up by 27% and apartments up by 7% from '08. Detached average prices down 11% and inventory Aug 31st, down by 29%. Average prices down 6% (t/hse) and down by 12% (apts). Inventory (t/hse) 38% lower than '08 and (apt) down from '08 by 15%. Again, as at last report, all N/Van inventory is way lower than the preceding year. Demand is maintaining strength and the general level of sales continues to increase month by month.

In West Van, detached number of sales YTD is now up from '08, as of Aug 31st by 11% (the second consecutive month in about a year). Average price down 17% and inventory Aug 31st down 26% from '08. On the condo side attached (t/hses) sold have dropped to 27 vs. 44 units last year; average price down 11%. Active listings are down from '08 by 8%. Apartments sold now reflect a 3% increase YTD vs. '08 (109 vs. 105); with average price down 17% and active listings now down 27% from end of Aug '08.

Overall North Shore demand maintains its strengthening trend and all inventories continue to drop month over month. Note if this demand continues, prices will edge up further.

Again, visit my website to see and "hear" the new developments. I continue my commitment to keep you... www.OnTopOfTheMarket.ca - the "go to" site for North Shore Real Estate analysis and jumping off point for FULL market listing information.

To join the group getting the e-mail version of this "update" - send a request now toalanskinner@shaw.ca and you'll be assured receipt; phone me at (604) 988-7368 or visit www.OnTopOfTheMarket.ca




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Recent Articles by this columnist:

Keeping Realtors Honest
Tuesday, August 12, 2014


How well do we stack up?
Tuesday, July 29, 2014


Resistance to change and compliance delay
Wednesday, June 04, 2014


Of urban planning and municipal wisdom
Thursday, April 17, 2014


Yes, it's official - demand is rising
Tuesday, March 11, 2014


All articles by Alan  Skinner

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