Fake news

Remember Shannen?

Sure ya do. Any marketing goddess that’s done so well at dishing up babes for corporate ad functions, as well as helping boost testosterone levels with a snowy bikini publication, deserves national recognition. Days ago this desexed blog featured the latest from the boss of Calendar Girl Productions – her Facebook posting looking for pseudo condo buyers in Burnaby.

Shannen offered to facilitate a gig paying $1,800 for someone to sit in a lineup and look horny to buy a pre-sale. Maybe it was to hold a place for an actual buyer who couldn’t be bothered. Unclear. Anyway, the point Shannen helped us make here is that in a rapidly-turning real estate market, perception is reality. People lining up outside in December to buy something is news. So the easiest way to get on the news is to have people lining up outside in December.

Apparently it worked. The Global TV dudes, too busy applying pancake and eyeliner to read any blog full of, like, words, sent a camera to cover. It made it to air. Shannen, 1. GreaterFool, 0.

But how long will it take for the meme of growing real estate risk in Canada’s most expensive housing market to spread via the mainstream media? Apparently it’s started. Check this out:

When it gets into the media, it usually gets real. As we all know, reporters and anchorettes played a major role in helping to create the greatest speculative property bubble in modern history. They were willing, if not enthusiastic, participants in developer scams like having local sisters of Asian heritage masquerade as hot young buyers from Mainland China. They piled into a big yellow helicopter to film ‘Chinese realtors’ flying over suburban properties making airborne buying decisions for clients who never existed. Those agents were from the burbs of YVR.

Manipulated, massaged and messaged by the Van real estate complex, local media played a pivotal role in making everyone believe Chinese dudes were snapping up all available houses and pricing locals out. The data didn’t support that (90% of Vancouver buyers were found to be locals), and just last week the head of CMHC spoke out against the myth. If anyone knows the numbers, it’s him.

So pervasive was the belief, so intense the FOMO created, that the provincial government succumbed. While the VYR market had already been rolling over in terms of sales for four months, the politicians finished it off with a punitive 15% foreign buyer tax. They accomplished two things – massive public support, and an event that will strip billions in equity out of the marketplace.

Cue Shannen. This is getting serious.

CTV’s report this week is among the first of many you will see – now in Vancouver, later in Toronto. “CTV News found a number of East Vancouver homes priced under then $1 million mark during a search of MLS listings on Monday,” reported the network, “including one that sold for $560,000 below the initial asking price. Detached houses are selling for hundreds of thousands of dollars less than owners are asking.”

This is the story on the ground – not the one in the official monthly Frankenumber release of the real estate board. Street by street sellers are reducing prices, taking offers for less than list, enduring empty open houses and scanning the street for elusive buyers. Multiple bids are all but gone. Not only has interest from foreigners waned, dampening some top-end hoods, but the big mortgage changes announced by the feds two months ago are starting to bite. Meanwhile two major banks have raised mortgage rates, and you know what’s coming next Wednesday, right?

In short, the melt is on. Like most corrections, it will be uneven across neighbourhoods, sporadic in its impact, stealthy in its approach and inevitably devastating for those who mistake it for a brief hiatus on an endless journey up.

Do you wait and gamble on a recovery, or sell now to save what’s left of the windfall?

Regret. Can’t fake that.