A stagnant real estate market is never a good thing -- not for home buyers, home sellers, investors or the general economy. It is almost always possible to take advantage of market trends and come out ahead. But there's a big difference between taking a smart approach and a dishonest one, as a recent example demonstrates.
Recent trends in the Greater Vancouver real estate market have some worried. In large part, this fear has prompted inaction -- what chef economist at the B.C. Real Estate Association, Cameron Muir, described as “a wait-and-see approach.” .
In fact, the fear-derived lull in the housing market due to a showdown between consumers and sellers has caused a 14.3 percent decrease in the number of homes sold in Greater Vancouver in January compared to sales for the same month of the previous year, according to The Globe and Mail.
And, although the Fraser Valley real estate market remains strong, overall sales in the Greater Vancouver area fell again in February -- a decline of 29.4 percent compared to February 2012, according to the Vancouver Sun.
Market Anxiety Fuels Scam
However, not everyone has chosen to participate in wait-it-out approach to real estate. For some, anxiety over the housing market has prompted action. Unfortunately, the particular action taken by Vancouver-based real estate marketing firm, MAC Marketing Solutions, was deceitful and fraudulent.
Two female employees of MAC Marketing Solutions posed as sisters interested in purchasing a condo in Vancouver. The ruse was captured on a televised newscast that aired February 19. MAC Marketing Solutions instigated the newscast as promotional material in order to help market the condo development, according to a February 21 article in The Globe and Mail.
The company has admitted to masquerading its employees as real estate investors. Presumably, the goal of the guise was to elevate the closing price of the company’s property. MAC Marketing Solutions is currently being investigated by The Real Estate Council of B.C. for using “dishonest tactics”. CBS News reports that the head of MAC Marketing Solutions himself, Cameron McNeill, is also being investigated by the Council and is facing up to $25,000 in fines for engaging in misleading marketing ploys.
McNeill has issued a public apology for the incident, telling The Globe and Mail, “it was wrong and I take full responsibility”.
Posing employees as prospective home buyers appears to be a desperation tactic fueled by panic over the state of the housing market.
Vancouver Real Estate Prices Expected to Increase in Spring
But experts predict that the Greater Vancouver real estate market will experience ongoing relief in the near future. Even though the year-over-year sale of Vancouver homes has decreased – about 5.2 percent in January and 29 percent in February– prices remain high and are expected to slowly increase, according to a February 15, 2013 statement by the Canadian Real Estate Association.
Additionally, Mr. Muir says that the dwindling number of new listings for home sales in Greater Vancouver is positive indication of the area’s impending recovery. There is more of a drought than glut of homes. The number of new listings in the Greater Vancouver area has been steadily declining since June. And the year-over-year report for January was an impressive drop by 10.9 percent compared to 2012.
Canada's housing market will flourish come springtime, says CIBC World Markets economist Benjamin Tal. Tal says that “the spring will surprise on the upside” in part due to a decrease in mortgage rates – in fact, just over the weekend, Bank of Montreal lowered the cost of its five-year, fixed rate from 3.09 percent to 2.99 percent.