Condo Advisory Team

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Onni and Mac Marketing are working together to help spur sales in a number of lagging developments. They are advertising that this is the largest real estate liquidation event in Vancouver.

Well this is probably a great strategy that MAC has come up with, it puts some excitement back in the real estate marketing game which I am sure has been hurting, as well it gives developers a chance to move product that is not going to move otherwise, and it gives buyers a chance to buy new product at a reasonable price rather than at prices that have not been reasonable for longer than the market decline.

Lets face it, New Developments have been overpriced for 2 to 3 years now as developers have tried to build in some of the expected price increases and building costs, so to drop prices by 25-40% is a bit misleading to the average person. Those prices were probably 10% above where they should have been at the height of the market, and now that we have seen the  market come down about 15%, we are really looking at these properties being priced at market to maybe 15% below.

Don’t get me wrong, that is a good thing as people will now be able to consider new properties as a very viable option.

But we must remember than many of the sales that are happening today are below market value as that is what it is taking to get buyers to make the move in these conditions.

In any event, I think this is smart angle and good for buyers, but just want to put in perspective as the numbers being tossed around are the type of things that the media loves and adds to the fear and hype that the market is in a fee fall which is not exactly a fair analysis.

I find it interesting in the Georgia Straight article on this topic, upscale condo realtor Nahid Aghamolla states that buyers in these upscale condos don’t care about childcare, don’t have children and never ask about it. Well As I do not have experience in that market I cannot argue the point, but seems to me that is a narrow point of view to take, I am sure people with money also have children form time to time and will care about such facilities at some point. I assume they are normal people as well, even if they are marketed to as something other than normal.

At any rate, I think this is a great initiative and hope to see more of it.

The developers of the Westin Grand have been found liable for providing unreasonable financial projections to investors when they sold the project back in 1999. You may recognize the name of one of the developers, “Cressy” For more information read the Vancouver Sun article “Developers found liable in investor suit”.

Of course it is not nice to see any situation like this, but it is nice to know that you can challenge a developer and win if you have been wronged. I imagine there will be more such cases.

But before all the investors out there who have lost in the current market get any ideas, you won’t get to far with greed as your defence when trying to have a developer take the fall for you.

This week it is Jameson House, a High end high rise development in Vancouver’s Business District. You van read the full story in the Globe and Mail, November 14th.

Seems that it is once again the loss of financial backing that has caused this development to stop. The lack of confidence we are seeing in the individual buyer/seller markets are not limited to the individuals, it is spreading across financial institutions, etc. This is a perfect example, a majority of the condos had been sold already and construction was underway, but apparently a Canadian Financial Institution pulled out as a backer citing poor market conditions.

Until we see confidence restored, this will not be the last story like this. When things go in one direction they often spin out of control. At this moment it seems like all forces are working against restoring confidence, but remember, when things change they often change fast so keep aware because the direction will change at some point and things will get better.

This applies two fold to buying pre-sale condos because it is often a couple years out and things can change as we have seen in numerous recent incidents. You want to make sure you know how things are going to be handled when changes take place.

A perfect example of this is the recent fire at a Surrey Development, Quattro. Buyer found out that after it was destroyed by fire the developer has the right to extend the completion by the time it takes to re-build. So if it will take an extra year for example, buyers will be out of a home for an extra year and they cannot get their deposit back an move on.

Like anything, make sure you know what you are getting into, and use a professional like a realtor and even a Lawyer to make sure the contract has been fully looked over and explained.

http://www.ctvbc.ctv.ca/servlet/an/local/CTVNews/20081019/BC_Quattro_Money_081019/20081019/?hub=BritishColumbiaHome

I think many of us brush this type of talk off and look at the development as a good thing, it will clean up the area and make it a place we will all enjoy going. I admit, this is very close to how I have looked at it. After reading this article Social Conflict in East Vancouver I realized that it is a much larger issue.

I can’t say I have the answer, I do still think the development of condo projects and other projects are a good idea, but maybe it is worth a closer look on a project by project basis.

If you are looking to buy/invest in such a development, you may want to give it more thought as this could effect your re-sale value as well as quality of life while living in such a development. A great example of this for me is the Woodwards project, many poeple bought into this project for a pretty penny and I think much of it was based on the hype and extraordinary marketing efforts for the development. I am not sure how many people have considered what it will be like to live there and how the other area residents feel about it.

Just food for thought, I would love to know what others think and feel about this.