Premature declarations

In probably the most famous premature declaration in modern history, W declared mission accompished in Iraq long before the war even began.

Today, Carney declared the recession is over before it even hit bottom. Of course, that's CanWest's headline. Over at Real Financial News Central (Bloomberg) the headline is a wee bit different: "Bank of Canada says Recovery Muted by Strong Dollar"

The definition of recession is two consecutive quarters (or 6 months) of negative growth. Apparently the definition of "recession over" is the prediction of one quarter of positive growth.

I'm advocating a level playing field. At HHV, you will not hear "recession is over" until we have 6 months of positive economic growth. I'll keep calling it like it is, not like you tell me to see it. Take that W, er, Carney.

Carney says: "HHV, if you don't accept my definition of 'recession is over,' I will squish your little head!"

Chek 6 bubble burst

I'm only writing this post because I want to be part of the Google search bonanza AND THAT SHOULD BE THE FIRST CLUE IN AND OF ITSELF!

If you believe that local news is the right of a tax-paying Canadian citizen, sign up here, and get ready to be disappointed, as you already have a dysfunctional news drain on your tax-paying pocket working overtime to save jobs with no tangible results for anyone involved except the taxpayer who pays more for less to support a corporation who made $80M last year on revenues of $1.6B. Now granted, the CBC isn't really meant to make money per se, but one shouldn't be faulted for thinking "rainy day fund" around here should one?

CanWest spent themselves into the graveyard by buying up a whole bunch of poorly performing media assets in a time of declining revenues using cheap debt to do it. You and I and every other taxpayer has already bailed them out to the tune of hundreds of millions of loonies. Do you really want to continue to chase bad money with good?

I liken this analogy as a perfect metaphor for exactly what has occurred in the housing market: cheap credit has fueled a buying frenzy of poorly performing assets. Should the taxpayer have to bail out these fools who spent more than they should have ever been given access to?

This wasn't the first failed media story in Victoria. Nor will it be the last. It's sad, depending on your viewpoint, but it's a harsh lesson in the new media world that old media better hurry up and learn.

Now, when will new home buyers be taught their own harsh lesson in foolish economic practices?

Spinning wheel of death

If you use a Mac, you'll understand this post's title. When that little spinning wheel of death appears and just spins and spins, you end up having to shut down your system to make it end. Who would have thought it such an apt metaphor for the MSM and real estate reporting?

CanWest stock closed today at a measly dime. That's down 99.4% since its 2005 peak of $15/share, and almost not worth calculating its drop from its 10 year high of $21.35. There's all kinds of theories out there that suggest advertising revenues are down because the Internet is eating into earnings, and so on. I call bullsh&t. Ad revenue is down because no one wants to pay for the crap passed off as news these days. If I can get the press release faster directly from the VREB online (and for the record I do, and I beat the TC to publishing it consistently because I don't have editors who need to "sign off" on my ability to regurgitate it) why the hell would I pay the TC to get it for me if all they are going to do is repeat its content word for word?

Here's my theory:

Media laid off a lot of quality writers in favour of a lean and mean content generating machine and dropped any semblance of quality investigative journalism because it cost too much. Many good writers opted to join PR firms or start their own and sell their insider knowledge of media and how to generate stories. And then the quality of writing and editorial ability degenerated into what we've witnessed over the past week: 3 separate regurgitation's of real estate "news," each of them barely newsworthy to provide 3 days worth of crappy "everyone is buying now, the recession is over, you're an idiot for not buying last year, boy you should feel stupid for not taking advantage of lower prices and interest rates sooner" spin. No balance, no news, no investigation into the credibility of the sources, no quotes from arms length economists, no nothing, just republished press releases.

The VREB has a director of communications, heck, they even have a communications task force who meet monthly (if not more frequently) to craft ways to influence the consumer to consume their products and services. The VREB is a member organization of the BCREA which in turn has more communications officers and likely a provincial communications task force who meet together solely for the purpose of crafting strategies to influence consumers to consume their products and services. The BCREA is a member organization of the CREA who has even more communications staff and likely a national communications task force who get together to craft, you named it, strategies to influence consumers to consume their products and services.

And the MSM publishes their press releases on a weekly basis, verbatim, as news without any fact checking, without any investigative journalism, without any arms length expert opinion and without any consistency of balance. Why no stories of how the real estate industry works to influence the consumer to consume services and products? Is that not news? Should the consumer not be made aware of the systems and coordinated efforts, not to mention the amount of money spent, to influence them with numbers and statistics which no one can quality control nor idependently verify? Why no stories about what an average sales price truly is, and what it truly reflects?

I'm no cheerleader of doom, but the sooner the market presses the off button on this spinning wheel of death that is the "reporting" of real estate market "news" and ends it, the better.

There are no winners in this situation, just a bunch of losers, and I fear the whole sh&tshow can be traced right back to the consumers who just buy anyway--well, at least they used to buy the news when it was news, now, not even the advertisers are willing to pay for the paper.

I've given credit where credit is due in the past, but not this week. CanWest, TorStar, G&M (even though you're private) and CBC (even though you cost me money), you deserve to get hammered by the market. Someone please, end the spinning wheel of death, and soon.

June stats

The sales continue. Here's the unofficial stats, press release is out:

New Sales: 946
New listings: 1436
Total active listings at June 30th: 3794
Sales to new listings ratio: 66%
Sales to active listings ratio: 25% or 4 months of inventory.

H/T to Tim Ayres on Twitter for the numbers.

Last month's numbers:

New sales: 879
New listings: 1362
Total active listings: 3789

Sales up, new listings up, total listings up. Clearly Victoria is in an overall SELLER'S market being driven by the low-end and move-up buyers.

The average price for single family homes sold in Greater Victoria last month was $588,186, up from $573,442 in May. The median price also rose to $529,900. The six-month average was $559,827. The overall average price for condominiums was $298,200 month, down slightly from $306,971 in May. The average for the last six months was $294,725. The median price for condominiums in June was $275,000. The average price of all townhomes sold last month was $413,218, up from $400,788 in May. The median price remained unchanged at $375,000. The six month average was $401,829.

Prices aren't going up, 26 properties over $1 Million drove the average higher. Consumers keep preferring SFH's over condos and townhouses:

MLS® sales last month included 539 single family homes, 242 condominiums, 104 townhomes and 18 manufactured homes.