In the early days of Condohype — which I’ve now renamed with a capital “c” as a sign of blogger puberty — every post was a dissection of a condo ad. In the marketing I found clues of a meltdown in the making. I put it under the microscope to make it easier to see, and for the possibility of a few laughs.
The ads are more or less gone, a victim of a real estate market bust that “nobody saw coming.” Across the League of Extraordinary Economic Gentlemen — in the world of “experts,” sadly, it’s mostly men — almost all opined the market was headed for the heavens.
The experts were wrong. This we know. But the problem isn’t so much that they were wrong, but that they had no basis upon which to be right. The chorus of opinion that prices would keep rising was informed by the chorus of opinion that prices would keep rising. It was a feedback loop.
Today, the key message of the elite is that “no one” predicted the Vancouver real estate collapse. Some quotes, all from the last seven days:
- “No one would have imagined the market would have changed as drastically as it did.” –Chris Evans, Executive Vice-President, Onni Group of Companies
- “No one was able to predict the unprecedented real estate market meltdown…” –Peter Ladner, Former NPA Mayoral Candidate
- “Everyone thought that in three years, prices would be up. Absolutely. We knew there might be a dip, but nothing like this.” –Austin Gangur, North Vancouver Realtor
The quotes are laughable but also scary. They remind us of how potent the hype ideology is. It’s not for lack of prediction that we find ourselves in this mess; many sounded the alarm bells of the crash. In 2005, the world’s leading real estate academic declared Vancouver “the most bubbly city in the world.”
So what is it? The problem is psychological. No matter how convincing the evidence, people will not waiver in their conviction. They want to believe, maybe even need to believe, that their one “investment” condo is worth more than the GDP of Spain. Real estate is Vancouver’s religion. You do not question God.