Real estate coverage takes a shift

Vancouver Sun - B.C. housing sales slow

Now you can bet your granite countertop the real estate industry wasn’t happy to see B.C. housing sales slow bursting across the cover, above the fold in Tuesday’s Vancouver Sun.

For the last half decade, the local news nursed the impression that Vancouver real estate only goes up. The exuberance in the reportage was so overwhelming, it became impossible to distinguish condo news from condo ads. But with the latest market figures so irrefutably negative — sales are down by over 30 per cent — the media find themselves with no choice but to be the bearers of bad news.

Don’t expect radical changes in what you read in the paper or watch on TV — the hype is far from dead. Instead, be on the lookout for a shift in tone. Expect editors to be more comfortable with sensationalizing the negative. For example, the Sun headline I’ve mentioned bluntly emphasizes slowing sales. In the old universe of real estate coverage, the headline could’ve been “B.C. returns to a balanced market” or some other lingo-laden horsepucky. Not anymore. This is what I mean by a shift in tone.

Going forward, I’ll be keeping a closer eye on the growing tension between media coverage and industry spin.

25 Responses to “Real estate coverage takes a shift”

  1. jesse Says:

    75% of the headlines on the front page are obvious innuendos for the coming crash. Does the Sun editor have a sense of humour?

    “Know your limit. Play within it”
    “It all came down”
    “A deep malaise south of the border”

    But the ad at the bottom gives me spirits:

    “BUY TODAY before they fly away”

    only to be crushed when I learned I can’t rely on my normal ED remedies any more. Needless to say yesterday was a writeoff.

  2. s.p. Says:

    not sure if its foreshadowing – interesting juxtaposition of the photo…crash looming?

    s.p.

  3. TheVancouverManifesto Says:

    I’m excited by this.
    It’s about time speculation has stopped.

    I wish we knew more concrete numbers of what percentage is buyer spec because I still can’t say there will be a crash/burst in the bubble. It will deflate some, but it won’t be nearly as devastating as the states.

    only time will tell…

  4. sidelines Says:

    Well, VM, Remax estimates that 50% of downtown condos are bought by speculators (see this link http://www.remax-western.ca/cgi-bin/9000_news.cgi – Nov 17/07 article), does that help?

    So why the hell would these speculators hold on to their investment? Do you think they’ll just sit there, watching their investment bring flat to negative returns? Of course not. Once it dawns on them (and by the looks of skyrocketing inventory – I think downtown has about double the inventory from this time last year – it’s already dawning on a few), they will be rushing to unload their investment, trying to meet weakening demand by lowering their price (no choice, that good ‘ol supply and demand), and lowering their prices further, as they compete for sales.

    So, I’m not sure why you can’t say there won’t be a “crash/burst?” Maybe you just don’t like does particular words, VM? ‘Cause, you know, the writing, it’s there, right on the wall. Have a look see.

  5. Disbelief Says:

    That statement is highly speculative… There will be blood and tears. It will be ugly

  6. yoword Says:

    If i bought my house in 1985 for $70,000 and this year its worth $678,000, what will i ever do when it comes crashing down to $450,000? What will i ever do only making $380,000 in profit? oh the insanity! 😉

  7. Van-zee Says:

    yoword you thank god that you won the generational lottery.

  8. robbennie Says:

    Van-zee
    You too could benefit from a generational lottery, just follow the
    advice of Tom Vu

  9. rocker guy Says:

    yoword: You bought at a GREAT time. 1985 was just after the crash of 1982:

    Housing starts were at a low as well, indicating speculation was all but non-existent:

    1985 will recur, and we will all rejoice as we buy cheap homes while former speculators rant about how owning real estate is a terrible idea…

  10. arbitrage Says:

    Any one want to do the math and compare yoword’s pot’l house profit vs hypothetical stock index investment profit.

    Not wanting to debate a house as an investment vehicle or just a place to live in (still an investment i guess) – just that if you’re going to brag about how much you’re house made you, you should really compare it to other possible investment you could have made at the time.

  11. arbitrage Says:

    whoa, please excuse the missing “?” at the end of first sentence, and the you’re/your mixup 😛

  12. Brittanny Spears Says:

    Sept. 08 Canadian RE crash will look alot like
    Sept. 07 US RE crash.

  13. rational Says:

    Q: What do most of the posters on this site and christian evangelicals awaiting the rapture have in common?

    A: Both are waiting for a cataclysmic event that they KNOW will happen and look for signs of it everywhere.

    If I see any familiar shapes in my grilled cheese sandwich I will let you know.

    Hallelujah!

  14. RE Owner Says:

    I’m so amused that I stumbled upon this website! THANK YOU! It’s so refreshing to read the “experts” on this site who are predicting the real estate bubble will crash in Vancouver!

    Let me guess that more than half of these people are ones who do not own any property! It evident that there’s a lot of complaining going on about prices and its coming from those who arent in the market.

    I’m not saying that real estate is the safest investment, but you cant argue with the facts.

    Among the wealthy, nine out of ten own some sort of real estate investment accounting for one-third of their portfolio, and most (52 percent) report that despite a softening housing market, their real estate investments have increased over the last year.

    Please note that the wealthy arent just buying any piece of property. They’ve done their homework and found true locations which will not take a large hit even when the market softens. You need to use your money/investment to make more money.

    So dont’ hate owners or people who are willing to take a risk to get ahead. You may just learn something from them along the way! Happy speculating!

  15. sidelines Says:

    RE Owner:

    You’re amused? Well, thanks for amusing me! Your “expertise” is good for a laugh! 😀

    So, are the “wealthy” buying in Vancouver right now, you think? Would they say it’s a good time to buy? With sales down over 30% year over year and listings up over 60% YOY, I wonder… How do you think they evaluate whether a particular piece of RE is worth investing in? Have they put all their “wealthy” eggs into the Van RE market?

    And how about a definition of “wealthy,” for some more laughs.

    Looking forward to your response!

  16. RE Owner Says:

    Sidelines,

    Thanks for the comments!

    If you actually read my post, owning RE is one type of investment, there are always ups and downs with any investment. However, if you diversify and chose a good location, you will ride out any of these fluctuations in the LT.

    As for your questions, they all depend on the individual’s pesonal situation. What is the indivual’s age, income, family situation, propensity for risk, real estate knowledge. You cant generalize what every person should or should not do. Whats right for me, may not be right for you.

    For example, I dont have any problems renting our investment condo based on its location. In fact, there’s still a waitlist with the property Manager for our building. And even if it becomes vacant after its 1 year lease, the mortgage is already accounted for. Its all about the planning. Soon it will be mortgage free and I could care less if it drops, as I’m in it for LT, I know it’ll will only go up and I can always pass it on to my kids if need be.

    Again, this is s not right for everyones situation. If you are counting on that renters income to make ends meet, you may not be so comfortable.

    So are there some still any good buys in Vancouver? Sure, there are still some really good buildings/property to still purchase in Vancouver.

    Back to this “wealthy” definition. I dont consider myself wealthy, but to others they may think so. I can only attribute that I’ve done well based on my decisions in RE.

    So, lets not argue with the facts, when I say a significant amount who are wealthy have done so via RE.

    By the way, sales down 30% in 2008 in GVRD is corrrect, but year over year? Please do some research first, even if its using Google, before you start putting numbers on your comments.

    Thanks for your feedback sidelines, lets just ensure we dont keep it personal!

  17. RE Owner Says:

    PS: Condohype, keep up the good work! Love the site~!

  18. Montery Says:

    Ok, I took a look at the numbers that yoword put up:
    $75K invested 1985
    According to Bank of Canada website inflation calculator http://www.bankofcanada.ca/en/rates/inflation_calc.html, that 75K is worth $127,942.58 today after the effects of 2.66% inflation annualized over 23 years. So your “profit” is really only 551K, and this ignores the cost of borrowing and all that. So if you sell at any point where you are above the 127K line, you’ve either broken even or have made a profit. Congratulations! You’ve learned the value of investment: buy and HOLD.

    Now lets look at it another way…

    The S&P 500 recorded an annualized 748% return since 1985. (I used Google finance and then selected a stock that has been around since ’85. In my case I used KO – Coca cola, and then selected the “compare” feature and checked S&P 500. The graph then shows you the % yield of your selected stock and the S&P. By the way, Coca Cola returned 2235% since ’85!)

    $75000 x 748% = $561000

    So, if you had taken your 75K house (assuming you paid cash, but you probably didn’t…whatever) and instead invested that same amount in the S&P 500 you could have $561K in profits. If you had invested in Coca Cola you would have earned an even more impressive $1,676,250!! Not to mention that Coca Cola would have paid you nice dividends during that time too. 😉

    So, way I see it, it’s a wash. If you did good (and matching the S&P 500 is considered “good”) in the stock market you would have earned a little bit more. Course you still need a roof over your head, so I suppose your investment isn’t really a investment, but a “cost of life”!

    I prefer to keep my cost of living down to a minimum and try to invest as much as I can in quality stocks for the long-run. So when I look at the current Vancouver housing market, I’m sorry, it’s not a wise investment choice given historical averages at the moment.

    In 2011, when I expect to see 20-30% real decline in prices, THEN I’ll be seriously on the lookout for quality homes. Until then, I’ll be happy renting and investing. 🙂

  19. Van-zee Says:

    hey re-owner.

    “there are still some really good buildings/property to still purchase in Vancouver.”

    Can you show us one? It seems that the price to rent ratios are quite out of wack making investment reliant on speculative price increases.

  20. yoword Says:

    well, dammit, i wish i had my crystal ball in 1985, and invested in coca cola. For fu.ck sakes, i could be a millionaire now!

    thanks for ruining my day Montery 😦

  21. sidelines Says:

    RE Owner:
    “By the way, sales down 30% in 2008 in GVRD is corrrect, but year over year? Please do some research first, even if its using Google, before you start putting numbers on your comments.”

    Right, well, what do you make of this, then?: http://tinyurl.com/3ovcu8

    So, maybe YOU need to do some research, right?

    As far as not keeping it personal, no problem. Remember, though, you’re the one who came on here loaded up on sarcasm, referring to the “experts” commenting on this blog.

    Even still, what’s the point of your posts? “wealthy people own real estate” Ummm…. okay. “the wealthy made gains on real estate.” Nice for them, I guess… What is you’re point?

    “They’ve done their homework and found true (“true?”) locations which will not take a large hit even when the market softens.”

    Which market(s) are you talking about? Not the GVRD, right? I mean, what, the omniscient “wealthy” are buying “magical” properties these days that are/will be impervious to the laws of supply (up) and demand (down)?

    “So, lets not argue with the facts, when I say a significant amount who are wealthy have done so via RE.”

    WHO IS ARGUING WITH THIS NONSENSICAL PIECE OF CRAP! Not me. Why would I? Who cares how some made money. The market is on its way to tanking. What logic are you putting forth here? “Some people made money on Vancouver RE; therefore, buying RE is good” Yes, well, some “wealthy” people made a sh*tload during the tech boom, too. I mean, come on. Are you for real?

    Still, keep it coming, friend. It’s funny as hell.

    I’m off to have a drink and a giggle. G’night!

  22. mk-kids Says:

    Well said sidelines… I was thinking some of those very thoughts while reading RE Owners post…

  23. Hold Off Buying That New Home | Discovering The Secrets Of Vancouver Says:

    […] BC Housing Slows […]

  24. Atom Says:

    Just because wealthy people OWN real estate, it doesn’t mean it’s the source of their wealth.

    Wealthy people own real estate for the same reasons non-wealthy people do. Everyone needs a place to live, and owning a place gives you more freedom.

  25. JoJO Says:

    Vancouver better be careful…. this market does not look good… The economy is not doing well enough to sustain these prices.. and we don’t want to head into a major recession!! All one has to do is look up information regarding previous recessions in Vancouver… The great depression being the most disadvantageous.
    For example, a large house in Shaughnessy would have cost $30,000 in 1920 (Glen Brae House) -$820,556.25 in todays dollars taking into account inflation… 19 years later, that same house sold for $7500 in 1939 ($118,065.65 in todays dollars).
    That is an enormous decrease!! The real estate market is NOT a sure bet… this is what people have to remember! House prices do… and WILL drop.

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