The Globe and Mail: “The bloggers had it right”

An excerpt from Timothy Taylor’s column “The City: A biweekly look at life in Vancouver” on page L5 of the B.C. edition of The Globe and Mail:

Gallows humour, but no denying it: The bubble has now burst. And in B.C. real estate, it’s almost certainly not finished deflating. In a December, 2008, economic update, Royal Bank of Canada described the B.C. real estate market as being in “full-blown correction mode” and “unravelling fast.”

Meanwhile, bloggers are gloating. I’m talking about those real estate death watch sites such as Vancouver (un) Real Estate and Condohype.

After the Real Estate Board of Greater Vancouver called off its 2009 conference and trade show two weeks ago because of the downturn, the blogger-in-chief of Condohype wrote, “Too bad the party’s canceled because that activity sounds awesome. In my book, it’s an invitation to show up in my ‘The Blogger Was Right’ T-shirt with my dogs Case and Shiller. I’m devastated this can’t happen now.”

The sarcasm is perhaps a little undignified, but you can hardly blame them for feeling satisfied. They diagnosed market madness. And, with varying degrees of insight and eloquence, they were correct.

[“The upside to the bubble bursting: Sanity returns,” The Globe and Mail, December 22, 2008]

For the record, I agree with Mr. Taylor’s assessment except for one thing: I’m not sure if seeing the collapse has left me feeling satisfied. At least not on a personal level. (Personally, I wish the whole bubble never happened.) Sure, my blogger persona has nothing but self-appreciation pumping through his veins, but that’s part of the joke.

From the first post, Condohype has offered exuberant criticism in response to irrational exuberance.

I encourage everyone to read Mr. Taylor’s column. He’s a fine writer.

Image: Adapted from a photo by kootenayvolcano

The lifestyle is 40% vacant

Vancouver’s rental vacancy rate ranks up there with the career of Nicolas Cage as one of the great mysteries of the modern age. (Did you see Wicker Man? If you didn’t, don’t.) The Canada Mortgage and Housing people tell us the vacancy rate is 0.5 per cent. The CMHC are also the same folks who say it was “prudent” to introduce the 40-year mortgage.

Me, I have no idea what the real vacancy rate is but I’ll say it’s higher than 0.5 per cent. A walk in the West End or a search on Craigslist and you’ll discover a plethora of apartments for rent. Trust me, search “available now” and you have to be careful not to crash your browser.

The Rise is one of the few rentals in Vancouver advertised as if it were a condo. Unfortunately, the prices are owner-inspired rather than rental-inspired. To live “above it all” prepare yourself for at least $1,800 a month for a one-bedroom-and-den.  Be advised, by “above it all” I mean above the Cambie Street Home Depot. Granted, the green roof is cool. Still, what person would rent at that price when the same money can rent so much more?

As for the vacancy rate, The Rise is 60 per cent occupied. That’s a marketer’s way of saying it’s 40 per cent vacant. There’s also a free rent deal when you sign a one-year lease. Not exactly evidence we’re in a market of high demand.

But hey, what do I know? I’m just a renter.

REBGV cancels trade show website

The Real Estate Board of Greater Vancouver has taken my advice and pulled the plug on its trade show website. It’s now no longer possible to become a sponsor of an event that isn’t going to happen.

The image above is an artistic rendering of a Board official building up the courage to hit delete.

In other news, it’s cold outside. When I complained about this to my condo-marketer friend, he asked me not to talk about it. He said “negative speculation” will only make things worse. Bob and I soon parted ways.

Yes, I recognize that’s a soft joke. Keep in mind I spent the better part of an hour getting Lionel Hutz and the REBGV plaque into the picture. That’s all for today.

It’s Brooklyn because it’s “funky”

Vancouver condo marketing is in “prorogue” mode. Developers are holding on to ad dollars like banks holding on to bailout money. But much to my reading pleasure, the Sun has yet to retire Westcoast Homes. In fact, the latest installment takes a look at Brooklyn Abbotsford, a condo with a most unlikely name that we laughed about last month.

A question about the Abbotsford condo’s association to New York City leads the Sun’s coverage. Those looking for proof of creative bankruptcy in condo marketing should look no further than the “strategy” for this brand:

Sales representative Donna Lou Gilbert says she (sic) the marketing team came up with the name Brooklyn primarily because the interior of the main lobby “with all the granite and tile reminded us of a New York hotel lobby.”

“I just love the name. It just sounds funky. I thought it was very contemporary,” she says.

[“An offer of ‘affordable elegance'”, The Vancouver Sun, December 13 2008]

Stuff like this makes me embarrassed about the marketing industry. When people say marketing is full of hacks and point to something like this, it’s hard to prove them wrong. And I want to prove them wrong, because lots of smart people work in marketing. Where’s the strategy here? How does this even make sense? Come on, my peers, you can do better than this.

RBC compares housing to hangover

“The situation is unraveling fast in British Columbia….further price correction should be expected in the near term.” -RBC Economics Research, “Housing Trends and Affordability,” December 2008

A new report by RBC economist Robert Hogue says B.C. is in “full-blown correction mode” with more price declines expected in 2009. This isn’t breaking news now that “negative speculation” is all the rage but this report is notable for its colourful use of language. It’s not every day a bank economist writes about the Canadian housing market in the context of parties, hangovers and digestion.

The report is available here for your reading pleasure.

How to lose friends and alienate people

Being in the right is not what always counts when it comes to public relations; what matters is what the public comes to understand. From a PR strategy perspective, the Real Estate Board of Greater Vancouver exercised poor judgment in its minor dispute with Vancouver Condo Info.

Inherent in public relations is the notion of relationship. This implies a respectful engagement with your audience. Hence, when contacting a blogger, spam is not good PR, hate mail is not good PR, but maybe a short email with a fact sheet attachment is.

In the matter of the REBGV v. Vancouver Condo Info, the blogger posted a graph with a potentially confusing title — one that the board thought infringed on its trademark. But rather than have a staffer send a quick email suggesting a correction, the REBGV calls on lawyers to make demands of the blogger with the intent of issuing a cease-and-desist.

Sure, the REBGV was in the right to do this since it’s no crime to hire a lawyer to do anything, whether it’d be to fold your laundry or pen your email. But if public perception is relevant to an organization, one wonders how “bringing out the barristers” is the best first choice to take. It’s needlessly confrontational and disproportionate to the objective — a crow bar in lieu of a toothpick.

It’s like your neighbour parking his car in the wrong spot and rather than ask him to move the vehicle, you call the police. Then you wonder why everyone in the neighbourhood doesn’t like you. But hey, you were in the right…

Over 4,000 people read Condohype yesterday. Welcome to the neighbourhood.

The party’s over… literally

“The party’s over” is a popular expression to describe a real estate boom gone bust. It’s the market that follows a bubble boom — one of falling prices and declining demand. What it isn’t is a call to end all parties. Just because the party’s over doesn’t mean you cancel your party.

The REBGV didn’t get the memo. They’ve gone ahead and canceled their 2009 conference and trade show. Due to “economic conditions”, the industry can’t bring itself to have a good time. Yet in a move I call “pulling a V6A”, the REBGV isn’t notifying the public. If it weren’t for a news story by Derrick Penner, we’d know nothing about the conference shutdown.

At last check, the 2009 conference website is still running, complete with details on the “great benefits” of becoming a sponsor. There’s a full agenda including a three-and-a-half-hour activity labeled “Fun Night on the Trade Show Floor.” Too bad the party’s canceled because that activity sounds awesome. In my book, it’s an invitation to show up in my “The Blogger Was Right” t-shirt with my dogs Case and Shiller. I’m devastated this can’t happen now.

PR advice to the REBGV: It’s good to update your website and news releases when news goes public. Just a thought.

Hat tip to the now-defunct Vancouver Condo Info. Thanks for all your hard work, Pope. You will be missed.

You’re not richer than you think

Scotiabank’s “You’re richer than you think” campaign is a potent reminder of the ideology driving Vancouver real estate into oblivion. You see, it turns out you’re not richer than you think. Not even close.

With this cat out of the proverbial bag, Vancouver home values are dropping at about two per cent a month. Suddenly, a corporate promise of limitless luxury comes across as insult rather than opportunity.

To see this first hand, go the movies and wait for the Scotiabank ad to draw the crowd into a fury. At the screening I attended, a pack of moviegoers shouted obscenities before one hurled his beverage in revulsion. (The “thrower” soon picked up the cup and got a free refill. Classy guy, I know.)

A doom with a view

This ad’s pulled from my archives. It’s a classic for the “mid-century modern inspired” Jacobsen condos in East Vancouver. I’m sure you agree the ad has new meaning now that Vancouver condo prices are in the tank. The latest official stats have prices down 12.2 per cent since May. You can bet the whole industry would’ve loved to hit the pause button on those May prices. Too bad that pesky supply-and-demand thing got in the way.

So, what do you suppose Armchair Man is thinking? Maybe in 2007 it was glory of the view from the rooftop. Today, it’s likely the jump from the rooftop.

Be ready for more price declines.

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.