Buyers must complete

I’m back with old-school condo hype!  Forget the civic politics, liquidation economics or journalistic hyperbolics.  (Still deciding what that means.)  Forget it all because it’s time for Calera at Clayton Village.

If you’re part of the real estate armageddon set, you’ll get a kick out of the Calera legalese.  For all those who find “pleasure” in lawsuits against deadbeat pre-sale buyers, you’ll enjoy this background on the mortgage promo:

Payment does not include interest, GST, CMHC fees, property tax, bank administration fees, and is based on interest only 3 year fixed term mortgage at 5.15%.  Promotion is non-transferable and original purchaser must complete on home.

Message to flippers, stay away.  Please.  We don’t want to have to sue you.

According to the web copy, Calera is a quiet community that “beats an exhilarating modern pulse.”  Any idea on meaning here?  It could be cardiovascular or a fiesta of word garbage.  This is harsh sounding, I know, but I’m ultra-sensitive to waste words.  (Keep in mind I’m guilty of unnecessary verbosity so please do criticize me in the comments.)

I’ve always had a thing for ads with thought bubbles.  I look at them as a fun challenge.  If I could draw a third balloon, what would it be?  For this one, I’d have a bag of money and the paperwork for a TFSA.

There’s nothing wrong with saving money.

Coffee’s for closers only

“Put. That coffee. Down. Coffee’s for closers only.” –Blake, in David Mamet’s Glengarry Glen Ross

If coffee’s for closers only, specuvestors better get used to tea.  Across Metro Vancouver, condo flippers are flipping builders the bird by refusing to complete on their pre-sales.  At least seven would-be buyers have pulled the chute at Surrey’s Morgan Heights, forcing the developer to sue.

In the boom years, condo assignments were the golden ticket.  Rising prices and high demand made reselling pre-sales a breeze.  All it took to buy pre-sale was a small deposit.  Often times buyers would take on pre-sales with no intention of buying the place.  By the time the condo was ready for move-in, their pre-sale contract would’ve been sold, at a profit, to someone else.

The game-changer for flipping is when prices decline.  This scenario requires the flipper to do the unthinkable — they actually have to buy their condo.  In a choice between closing the deal and walking away, many buyers are hitting the bricks.

Morgan Heights is just the beginning.  Expect 2009 to be the Year of the Pre-Sale Deadbeat.  And the best will come last:  Woodwards is scheduled to complete in December.  Lawyers, be ready.

Buy townhouse, maybe win car

Two points to understand about Vancouver real estate and the global financial crisis: 1.) Nobody’s buying real estate, and; 2.) nobody’s buying cars. Not that this stops the marketing mavens from putting the two together.

Today’s pitch, for the Lotus Townhomes in Surrey, is buy a townhouse and win a car. Well, this isn’t exactly the pitch because if you buy a townhouse you don’t get a car for sure — what you get is a *chance* to win a car. How this is an incentive to buy $330,000+ Surrey townhouse is beyond me.

Also beyond me is the odd combo of the car prize and the “condo couple” drinking wine. And what’s with the arrow pointing out the car? Was there confusion in the design studio as to what part of the image depicted the car?

This ad ran in the Westcoast Homes and Design Magazine published November 19. I haven’t seen it anywhere since. Maybe the developer realized the promo is a waste and killed it. As of today, there’s no mention of the “deal” on the Lotus website. Hmmm.

Condo burns, buyers happy?

The media firestorm over the Surrey Quattro is burning hot. The local rags gave it major front-page treatment. Metro Vancouver — that “other” McPaper you read to avoid being social on the bus — used its headline to ask the only question that counts: Will buyers be getting their money back?

The answer is no, but this didn’t stop wishful thinking on the part of the speculators. Quattro buyer Claus Sandhack says it best:

The realtor who sold it to us phoned us up and told us the unit was on fire. We were happy. We thought we’re going to be able to get out. It cost me $308,000. In two years is it going to be worth $200,000? A $150,000?

As much as this comment is sad — really, Claus, you were “happy” the building was burning? — it’s an accurate reflection of what many pre-sale owners were probably thinking when they saw the flames. This is the nature of speculative markets. Nobody cares so long as money’s being made. Now that the party’s over, everybody’s looking for an exit.

Expect more of this.

Westcoast Homes shocked by price drops, trauma counselors called in

It’s unlikely any reasonable person has ever confused the Sun’s Westcoast Homes as anything other than a shameless advertorial for developers. Still, one can’t help but be shocked when its editors admit they’ve never observed a fall in real estate prices. Here’s the bomb they dropped in the Saturday edition:

Prices for the residences at Enclave at Morgan Heights, a townhouse project under construction in south Surrey, have been significantly reduced — something not before observed on the pages of Westcoast Homes. In June, the two-bedroom Enclave townhomes were advertised as starting at $359,900, but in July the starting price was dropped by $35,000 to $324,900.

[The Vancouver Sun, “Builder drops townhouse prices by as much as 10 per cent,” August 23 2008]

If there was ever any debate as to the quality of information in Westcoast Homes, this excerpt settles it. It makes you wonder if the W.H. editors read their own paper. In the same section, Sophia is advertising a “court-ordered” 10 per cent price cut, and on another page, a Richmond townhouse boasts of “fire sale” prices.

I wonder how much longer than Sun is going to keep Westcoast Homes alive in its current form. I imagine things will have to change once the market really starts to tank. There comes a point where descriptions of Kohler faucets and wood-like cabinets aren’t satisfying.

New condo comes with market value guarantee

If 20,000 listings, near-zero sales and word-on-the-street consensus isn’t enough to convince you that Vancouver real estate is in the thralls of meltdown, maybe this will turn your opinion: A local developer is now offering a “market value guarantee” to all buyers of the “European-inspired” Surrey condo, Morgan Crossing.

Details of this so-called guarantee are contained in a comic-book style speech bubble in the Morgan Crossing ad. Here’s how it reads:

Morgan Crossing. A community, so different, so right that its value is here to stay. And to prove it, Larco Investments Ltd, the same people who brought you The Village at Park Royal, will confidently guarantee the market value of your home by up to 10%*. So if there are any downward value fluctuations, you’ve covered by a healthy margin.

Even if you read the fine print after the asterisk, it’s difficult to say how much protection this actually provides. I’d ask the marketer for the specifics, but I suspect an email from me would go unanswered. (If you have a copy of the guarantee details, please feel free to send them my way.) Update: Additional information about the guarantee has been provided by the marketer and can be read in the comments.

As for 10% being a “healthy margin” against depreciation, I guess it depends on your definition of healthy. In China, Olympic officials define the air over Beijing as “good.” Meanwhile, Ozzie Jurock hints at the possibility of a 17% drop based on historical patterns.

But really, who cares about percentages at this stage of the game? The party’s over. Those who bought to make a quick buck are going to lose, and lose big. The Vancouver real estate elevator, once ascending to such great heights, is now on the verge of a furious free-fall.

Have a good day.

Nuovo kids on the block

Found this ad in my archives under the heading “Bad Ads to Write About Later.” It’s a stinker but you’ve probably come to that conclusion already. I don’t need to tell you that the models laid out on the grass look like victims of gang violence.

Perp on this one is Fifth Avenue Real Estate Marketing.

On coffee and affordability

Hot frothy beverages just don’t sell condos like they used to. These days, mention of affordability has replaced the stock shot of the latte as the condo marketers’ cliche of choice.

So to get to the point, please take a heavy sip of this condo copy crappucino:

Finally a place in South Surrey that offers the space and comfort of a single family home without the price tag or the maintenance. No more cutting the grass or doing those pesky home improvements. With the detached strata, you’re left with the time you deserve to spend doing the things you love. And with these incredibly stylish homes – with quality finishes like granite, hardwood and stainless steel as the standard – Skylands is a home you can afford to love.

Skylands – not only the new way to live. It’s also the smart way to live.

So, yeah, this is the “information” about the Skylands project in South Surrey. In terms of insight, you’d be better off seeking real estate advice from a barista. Heck, your average barista probably has as good a sense of the market as anyone out there, now that every owner/mortgage slave in the region considers themselves a condo mogul.

At least the coffee slinger wouldn’t insult your intelligence by calling a $679,900 home an “affordable” option for living.

Affordable? What a joke.

Quattro and the forgotten city of gold

Quattro may be the name of a razor but it’s also the brand of “affordable luxury” in North Surrey. I caught an ad for a new phase of this “starter market project” on a billboard but haven’t been able to find out much new info about it.

In an article appearing last year in the Journal of Commerce, the Quattro condo is described with the kind of enthusiasm you’d see in a press release republished as a news report. My favourite comment is that of the condo marketer who describes the “lower side of middle income earners” as an “old forgotten gold mine, where known residual ore still exists.”

In the marketer’s defence, the reporter paraphased the remark but there’s something hilarious about mining metaphors getting mixed up in real estate promotion. Sooner or later, we’ll be seeing ads for Klondike Kondos, the coolest lofts this side of Whitehorse — coming soon to Scott Road.

As for the “luxury” of Quattro living, it’s interesting that once again luxury is the packaging of stainless steel appliances and granite countertops. How original. Isn’t luxury supposed to be rare?

Max out your credit

If Kitsilano’s Lady Pulse wasn’t your kind of condo hottie — I admit, her watermelon fetish kinda creeped me out — perhaps you’d fancy a date with her more suburban strata sister? If so, grab yourself a three-zone bus ticket and make your way to Guildford Mall — you’ve got a date with Max.

Max is a girl of “elegance and style” brimming with “heady urban energy” beneath those sexy shades. For Max, life is all about “lap[ping] up the urban dynamics” of the Surrey lifestyle. Max enjoys single-occupancy vehicles, long walks across parking lots and is big into commitment — especially the 25- and 40-year variety. If long-term relationships aren’t your thing, Max is open to flipping. She’s a modern girl, after all.

Oh, one thing about going out with Max. When it comes to paying the bill, be sure to bring your VISA. No matter what happens, you’ll be paying in full.