Realtor/Speculator On ‘The National’ “Trying To Sugar Coat The Ugly Reality That Prices Are Tanking”

CHRIS BROWN: “At first glance Philip Chan’s property in popular Kitsilano would seem to support those who believe the crash is upon us. It’s a very nicely finished 1,700 square foot newly built unit in a triplex. Back in March it came on the market for $1.79 million, including sales tax. It’s now 1.57 million. That’s an almost 12 percent price drop.”

PHILIP CHAN: “I think the market actually during the last six months has adjusted downwards. I think everybody know about that. And it went up too fast and it’s just taking a little bit of an adjustment.”

CHRIS BROWN: “Describing a $200,000 price drop as an adjustment is just the kind of thing those who believe the market is unsustainable seize on. They argue it tries to sugar coat the ugly reality that prices are tanking. Chan, who built this home is a realtor who’s also trying to sell it, doesn’t believe that.”

PHILIP CHAN: “Unit like this, I think you can find no more than 10 on the market at this moment. How much can it drop?”

CHRIS BROWN: “At his Kitsilano property owner and realtor Philip Chan is sounding confident the market won’t slip much further from the 10 or 12 percent it already has.”

PHILIP CHAN: “Nobody can predict the future, so if you see that the market is healthy enough and you can afford to do it, do it. You can either sit by the ballpark and you watch the game or you can go down and play the game. You might get hurt or you might win.”

– excerpted from ‘Vancouver Housing: Bubble or Bust?’, The National, 20 Sep 2012. [Transcription generously provided by ‘AP’.]

Noteworthy for the following:
1. Another realtor who is also a real estate speculator. (How many people in Vancouver have their livelihood and their investments all tied up in the RE sector?).
2. Strongly biased commentator being presented by the media as a potentially valid source of information about the market.
3. “It’s just taking a little bit of an adjustment.” = ‘It’s Only A Flesh Wound’. Price drops thus far are significant because, along with high inventory and dropping sales volumes, they herald far larger price drops to come.
4. “How much can it drop?”. Well, triplexes like this in Kits will perhaps sell for about 500K-600K in the trough, so the answer is “more than 66%”.
5. “Nobody can predict the future…” Faux market agnosticism, and weasly self-contradiction. He’s already predicted the future by saying “How much can it drop?”, now he says “Nobody can predict the future”. Thinly veiled CYA?
6. “…so if you see that the market is healthy enough and you can afford to do it, do it.” What does ‘afford’ mean? Afford the monthly payments? Or afford to watch your net worth drop by $1,000,000?
7. “You can either sit by the ballpark and you watch the game or you can go down and play the game.” Noteworthy for:
(i) the sporting metaphor (Vancouver RE is, after all, “a sport“), and
(ii) the kind of bravado that has been very common amongst the bulls all the way up. (Have you got what it takes to play the game?) It’s looked silly to those of us who saw what it was on the way up. It is now an appeal of last resort.
8. “You might get hurt or you might win.” Love the lottery innuendo (“Hey, You Never Know!”). Quite alright for a couple of bucks on a flight of fancy; less so for a $1.57M bet.
– vreaa

33 responses to “Realtor/Speculator On ‘The National’ “Trying To Sugar Coat The Ugly Reality That Prices Are Tanking”

  1. Aw, ya gotta link to Mr. Chan’s website to show his listing that “isn’t going to drop” with a price drop to $1,373,000 as has been pointed out by many others:

    http://www.philipchan.net/ActiveListings.php/Details/373#viewdetail

    • He knows what’s going on. He needs to get out before its too late. I’d lie too, if I were him. Maybe a sucker will bite.

  2. I’m surprised that someone like Phillip Chan who is not new to the industry would get caught up in the hype and become a amateur developer. Looks like he’s been selling since the 80’s according to his linked in profile. Same deal with the “Kavanagh” group he joined as their “Asian Language Agent”.

    What really creeps me out though when reading realtor bio’s are all the prices they give themselves for making sales like Andrea Kavanagh’s:

    RE/MAX Lifetime Achievement Award
    RE/MAX Platinum Club for 12 consecutive years
    RE/MAX Chairman’s Club
    RE/MAX Circle of Legends
    RE/MAX Hall of Fame
    MLS Medallion Club for 25 consecutive years

    It truly is cult like. And lets be honest, every realtor ranks themselves in the top x%

  3. I wonder who did the factchecking for CBC… This might be a good topic to bring up to Office of the Ombudsman for CBC. As many others have pointed out, the property was never listed at 1.57M and at the time of the interview had already dropped to 1.373M. Seems like a rookie journalism to let such a claim go unchecked.
    Perhaps it didn’t fit in the Vancouver RE narrative because a 23% price drop would be nearly double the yearly price drop from August 2012.

  4. The place your bet or get off the table bravado is dirty emotional manipulation. Shame on him.

  5. I wonder what his break even is?

  6. He may be a specker, but he’s trying to make a few $’s. There’s nothing wrong with that. at the same time, he’s taking risks and I’d he loses, it the chance he took. He likely made $ elsewhere in the past. You win some, you lose some. The ones that will be hurt are the ones that didn’t take this opportunity to cash in off someone else’s new debt.

  7. PHILIP CHAN: “Nobody can predict the future”

    not true, people can and do predict the future, correctly, often. Right now the predicament of the West Coast is known to many people.

    • Nobody can predict the future.
      People can come up with ‘probability weightings’ for future possible occurrences, though, and some are better at doing that than others.
      Positive predictive capacity has evolutionary advantage.

      • Most of life is decided by microdecisions. Run the yellow light or yield to the guy making a oncoming left turn? What we’re all talking about here are macrodecisions. The train is visible 10 miles away, blaring its horn the whole way and they are standing on the tracks with no plans to move. I know I blow the horn on Facebook, 4 times a day, everyday for 14 months now. If they can’t hear it, God help them.

  8. “How much can it drop?” – Mr. ‘Circle of Legends’ Chan

    Chubby knows…

    [NoteToEd: Philip ‘CircleOfLegends’ Chan will doubtless have plenty of company to cheer him on as he masters the RealtorLimbo™. Hmmm… I sense a new phrase… A disturbance in the popular lexicon… A powerful new negotiating idiom in the Parlance ‘O Property ‘Purloiners’…]

  9. @yltnboomerang and bo xilai – I believe the 1.57 number is the asking price *including taxes*. If you note the original quote from Chris Brown “Back in March it came on the market for $1.79 million, including sales tax. It’s now 1.57 million”. If you look at the listing for 1.373M, it clearly says price does not include HST.

    1.373M + HST is not quite 1.57 however, so there is still a 40K math error somewhere. But the numbers are effectively correct.

    Hopefully you didn’t write into the ombudsmen yet…

  10. I agree, its not common – which is why realtors tend to highlight it in the general description, when the vendor is going this route. Its samples like these that lead me to be skeptical of sites like vancouverpricedrop – reading the fine print can gets in the way of sensational headlines.

    It looks like this home asking about 12-15% less than it was in March, which is consistent with general averages price drops in the LM in that time, and consistent with the article. It certainly does not seem to be 23% down in that time.

    • whoops, meant for this to be a reply to the previous.. admin, please inline correctly 🙂

      [Beyond editor’s capacity… still reads fine. -ed.]

    • Fair enough about the HST in the original price and not in the latest price. but what do you honestly believe how the figure 1.57 came about.

      • I honestly don’t know – the current asking price + HST would be 1.537M, not the 1.57 that the article quotes. 1.57M incl HST would imply an asking price of 1.4M – perhaps the asking price has dropped from 1.4 to 1.37 in the time the article was written or the interview took place? Or a typo (1.57 instead of 1.537)? Or simply bad reporting with regards to the numbers?

        Regardless, the differences in the inclusion of HST in the asking price have skewed the perceived drop in asking for this particular property by nearly double. I wonder how many other listings have done something similar in recent months?

      • 4SlicesofCheese

        Yah it is a shame if people are misinformed about the amount a property has dropped by. That downward psychological death spiral is a toughy.

        Oh well, I once heard that you cant win if you don’t play.

  11. I think there is a human aspect here, a developer friend of mine is in and out of medical care with physical and mental stress-related issues because her latest spec property isn’t selling. It’s been 8 months complete and officially on the market, about 20 months since she bought the teardown to redevelop. The last dinner conversation was a terse one with lots of complaining about Gregor Robertson and the City of Vancouver’s planning department.

    • There’s always a human aspect out there.. but what does that mean?
      Anybody buying from current distressed sellers will be setting themselves up for future suffering.
      There is a certain amount of pain that is going to have to go around with the reversal of the spec mania… who best to shoulder the burden?

      • “who best to shoulder the burden?”
        “Not I,” barked the lazy dog.
        “Not I,” purred the sleepy cat.
        “Not I,” quacked the noisy yellow duck.

        It burns my emotional savings having to listen to it, something I would have rather earmarked for sick kids. But I can’t say that, so I’ve been told.

    • Is it human nature, but it seems developers always attribute success to their own brilliance, verve and entrepreneurship, whereas failure is always a function of some other organization or individual’s failings.

  12. So you get beaten up by a few baseball bats on the field–who hasn’t?

  13. Excellent post, VREAA host.

    We too discovered that many local realtors line up to buy properties for speculation purposes.

  14. tanking? Even with the price drop it’s nearly $1000/sqft.
    If someone wants $50 for a chocolate bar then drops the price to $10 does it mean the run on chocolate bars is over?
    When I start seeing 50 cents a chocolate bar I’ll be more convinced.

  15. what do you expect when you walk in futureshop and ask for a “printer cable”, of course the sale will advice you to buy “gold plated monster brand” . no difference here , it’s the buyer who made the final call

  16. Pingback: Vancouver West Spotlight – October 1, 2012 « Vancouver Price Drop

  17. Looks like he is now offering a Fiat to sweeten the deal. You better not already have a car cause there is only 1 parking spot!

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