We’ve Moved!

After some serious thought and a lot of hard work we’ve retooled and relaunched our website incorporating a blogroll.  New blog postings can be found at http://www.macmarketingsolutions.com/blog/.

We hope you enjoy the new site and thank you for your support.

Happy Selling,

Cameron McNeill

Olympic Village

A great deal of ink has hit newsprint of late regarding South East False Creek and Olympic Village. Some of it very positive, some of it very negative. In one far camp is the naysayers who believe our city has been burdened with a generational albatross that will pull down the economic ability for our city to move forward. In the other far camp is a group who believe that a visionary urban village is being created, one that will become a hallmark of sustainability and a much studied blueprint for visionary planning and potentially provide rippling economic dividends to the city.

I for one lean to the later.

What has been accomplished at South East False Creek is nothing short of extraordinary, and I believe that this community will be the envy of cities around the world once completed. Am I unhappy about the bad deal the city struck? Yes. Am I mad about the tax burden likely to impact the city? Yes. But given the task to develop this area on an insanely tight timeline and with incredibly demanding sustainability initiatives was difficult in and of itself. Throw in a global economic meltdown and the hurdle, for a time, must have seemed insurmountable.

But I challenge any naysayer to visit the sight and see for themselves the truly outstanding community taking shape. This is only a small part of what is a larger plan for the entire area. Let the debate rage if one must, but the true answer will only come once this community comes fully to life. My bet is that the City of Vancouver will stand vindicated for it commitment to South False Creek. In time (it’s already happening) a global community of Urban Planners and strategist will see an urban community that will broaden Vancouver’s vibrancy and international appeal, and position us as a world leader in creating sustainable and livable urban environments. And in this particular instance, it took a lot of courage and faith to make it happen.

Happy selling!

Cameron McNeill

www.macmarketingsolutions.com

The future is growth.

The nice things about being in the business of marketing and selling real estate is the reality that our expanding population will continue to need homes in which to live.

The City of Vancouver’s history of consistent population growth is a reflection of the appeal of the unique west coast living found here. Since the end of the Second World War, the City has grown steadily by 15 percent every 10 years with the exception of a downturn in the early 1980s.

Vancouver is set to grow another 15 percent by 2011 and 6 percent by 2021. If these projections are true, a major planning challenge for the City will be where to put the next 120,000 new Vancouverites in the next 12 years.

With the new laneway housing initiative and an already entrenched urban densification mindset in place, the future for available condominium inventory to sell in the city is promising.

Happy selling!

Cameron McNeill

www.macmarketingsolutions.com

Signs of a recovering real estate market

Much has been said about the strong summer real estate market in Vancouver. This past July we saw record numbers of real estate sales, primarily in the re-sale area of the market. August numbers are also expected to be strong.  As the global financial storm lingers we have, however, seen few new condominium project come to market.

That is beginning to change. A few projects showed strength in sales over the summer,  and now with market fundamentals realigning themselves we are starting to see developer confidence in bringing new projects to market. One such project that MAC is marketing and selling this fall is The District from Amacon.

The District will be located in Vancouver’s South Main neighbourhood – one of Vancouver’s trendiest and hippest communities. Read last week’s feature article at CBC News, or view last week’s television news coverage  here, or register to learn more at www.southmaindistrict.com

Happy Selling.

Cameron McNeill

www.macmarketingsolutions.com

HST – How will it affect the purchase of a new home?

We’re less then 11 months away from its implementation and you can be sure there will be many round table debates, lobbying and changes to come; that said we do know 2 things: it’s called the Harmonized sales tax (HST) and we’ll all be paying it in the Province of British Columbia starting July 1, 2010.

What I think:

Unless the B.C. Provincial Government is willing to accept more credits, concessions and higher price thresholds for the rebates, the price for ALL housing stock will increase and the consumer will be hurt yet again.  I actually support the HST in principle, but how it works within the new housing industry requires very careful consideration and adjustment.  The HST, as proposed, will simply hurt ALL home and land owners – current and future.  It’s really very simple….the real estate development industry cannot supply new housing unless the price it can reasonably expect to sell exceeds the sum of all inputs including land, hard costs (construction), and soft costs (financing, architectural fees, marketing and sales fees, etc). 

Prices will have to go up or input costs will have to go down.  The HST would apply to the total retail cost of a new home, and yet, credits could only be received on hard costs which is a fraction of the total housing cost.  And in Vancouver, where overall Real Estate costs are the highest in Canada, the HST impact will be the greatest due to the fact that it is the LAND component only that differentiates value between locations (i.e. a new kitchen sink costs the same in Burnaby as it does is Williams Lake). The bottom line: as it stands now the cost of real estate is going to increase significantly on July 1, 2010 unless the current offering set forward by the Provincial Government experiences some changes.

The continued long-term pressure on our housing stock due to increasing population growth and international demand will continue to place housing at the forefront of BC’s economy. The BC Government needs to look long and hard at protecting the equilibrium between consumer affordability and developer profitability.

Happy Selling,

Cameron McNeill

www.macmarketingsolutions.com

Value Proposition: What is it and how do you create it?

The summer is always an interesting time of year.  Including decisions on how active to be and how much money to spend, developers and suppliers are also busily preparing for the fall market.  Whether you are gearing up for a project launch, re-launching an existing project or changing direction altogether, preparing for these events should be done months in advance to accommodate planning and lead times.

Regardless of your market situation, the campaign needs to address the issue of the value proposition.  What benefits are you providing to your buyers and at what price?

Before you answer this, you need to know who your buyer is.  What do they value?  What are the features they are looking for?  What has been holding them back from buying until now (if it’s an existing project)?  What is needed to get them off the fence and how can you offer it to them?  If you don’t know who your target market is, you will never be able to meaningfully speak to that audience about the value your product can bring.

A common mistake is to just scratch the surface.  Telling yourself that your buyer is an empty-nester although identifies them, is not nearly enough of a description to understand what they are looking for.  Are they active and therefore don’t care about master on the main? Are they likely to have boomerang children and therefore a coach house is required?  Have they been saving all these years to finally buy their dream home in which case high end materials may be of more importance?  I could go on, but the bottom line is that you need to dig deep and don’t be afraid to really identify your buyers. 

At MAC, we involve our salespeople in these types of discussions as they are on the front lines, building relationships and are holding far more delectable information then they realize sometimes.  Pick their brains!  Use purchaser surveys once people have bought – they are typically more willing to offer detailed information once they have invested in the community.  From here, you can identify the features, benefits and deepest desires of your buyers and understand their pricing threshold thereby improving your value proposition. 

A word of caution: Value proposition is not necessarily the most for the least.  In order to be successful (meaning homes sold and profit margins in tact) it is about focusing on the hot buttons (the most important benefits including deal-breaker benefits and that 1 or 2 special item that they didn’t even realize they needed but now that you are offering it to them can’t imagine living without!) and understanding their affordability level in order to meet their budgets. 

Happy Selling,

Cameron McNeill

www.macmarketingsolutions.com

The Summer Market – To Spend or Not to Spend?

In general, I think everyone in the real estate industry has turned to a more optimistic outlook on the market.  We’re still a long ways away from the height of the markets’ activity but things have certainly improved over the last few months, particularly as compared to the beginning of the year.  Amazing how half of 2009 is already behind us.  The days definitely seemed longer back in December.

So with this new found optimism, the question on developer’s minds these days is how active to be during the summer.  Before 2004 I would say that everyone took off in July & August.  Opening a project during the summer months or even into June was like the Canucks winning the Stanley Cup – it just didn’t happen (ouch, too soon?).  It was an unwritten rule and everyone knew it.  When the market became buoyant it didn’t matter when you opened, we even started selling a project in December not that long ago.  With the slide in the market but recent improved activity, developers are wondering whether it makes sense to spend money during the summer on events, advertising, signage, incentives, and more.  The answer is as usual, it depends.

Each market (municipality, product type and pricing) changes the answer.  There are still some markets which are over-saturated and therefore even the most value-oriented product is not selling like it is in other areas.  Spending dollars during the summer for this type of product is therefore a bit of a coin toss because although you don’t want to be a self-fulfilling prophecy, everyone is demanding high accountability on cash out.  If you’re able to hold off and save a few bucks it may be worth doing.  Having said that, ensure you put yourself in a position to act quickly if it hurts you more than you thought it would.  Flexibility is key.

Standing inventory with reduced pricing and at an entry-level position is definitely the most active at the moment.  If you’re selling this type of product then pushing through the summer can pay dividends. Recently, the Beasley set the tone with a very successful sellout and proved that a pre-sale situation was possible if you’ve got the right pricing and location.  Richards on Richards followed that up with their own successful “re-launch”.  Even single family housing on the North Shore has seen multiple offers and back-up offers which is a vast improvement from just a few months ago.  Concord Pacifics’ Cosmo is the most recent to open after revamping their strategy although it still remains to be seen as to how successful it will be.  Fingers are crossed because it helps all of us in the industry if they do well.

So as usual, you need to look at the market you are in, the type of product you’re selling, price level, and other variables to decide how active to be in the summer.  Every situation is different so be prudent, ensure those glasses are not overly rose coloured, but look for the opportunity.

Happy Selling.

Cameron McNeill

www.macmarketingsolutions.com

MACBULK.COM – What’s Happening in Liquidation Real Estate

Throughout 2008 we witnessed the global economic downturn and watched the Canadian real estate market follow.  By late 2008 all metrics were down significantly…values, absorptions – we were living in entirely different market conditions.  MAC acknowledged that in the months ahead we were unlikely to be busy with new projects so we started to identify new opportunities.  Essentially, the opportunity was to assist developers with existing projects – either standing inventory (completed projects with unsold homes), or pre-sale projects that have started construction and have remaining inventory to sell.  In good times, these developers have alternative solutions for sales and marketing, but when the market conditions changed, MAC has the experience and sophistication to assist.  Often, by simply treating an existing project as if it is “new” and examining every facet of the project with fresh eyes can make all the difference.

MAC’s first major opportunity was to assist the Onni Group (www.onni.com) to market and sell their remaining inventories from seven different projects scattered throughout the Greater Vancouver area. Of course, with the market as it was, it needed a shove!  There was (there is) still a great deal of demand waiting on the sidelines…waiting for the right home, the right deal, and someone to say “It’s OK, go ahead and buy.  Everything will be alright.”  MAC and Onni embarked on an aggressive PR and advertising campaign – as usual Onni showed tremendous leadership at a time when much of the industry became paralyzed.  ”HOPE is not a strategy” I like to say. Within the first two weeks we successfully sold over 200 units and over 250 within three weeks – this was a huge feet given the “frozen state” of the market.

The second phase of what is now known as the MAC Bulk program (www.macbulk.com) saw MAC Marketing Solutions combine the completed inventory of three developers in the lower mainland in an effort to maximize marketing buying power under the MAC Bulk brand. This allowed each developer to contribute to the marketing spend, in turn creating more buying power and increasing the reach and frequency of their marketing efforts.

These two strategies have worked because the conditions were right.  We were working with developers who were willing to discount and willing to be bold about it and who had inventories that made sense.  These same strategies would not have necessarily worked with just any developer or just any project and won’t necessarily work again.   We knew there would be lots of copy cat campaigns but few achieved significant results.  As I’ve said before, no two projects are the same.  It’s about finding the right strategy for the right project at the right time which often means innovative thinking is needed.

So what’s next?  MAC Bulk still has tremendous residual demand for the right product at the right price.  We will selectively align ourselves with developers and groups where we can apply some fresh thinking into these competitive market conditions.

Happy Selling.

Cameron McNeill

www.macmarketingsolutions.com

Profile – The 2009 Investor

In Marketing 101 you learn about the most basic yet most important factor when selling any product in any industry - target market.  Knowing who will buy your product and catering to their needs and desires should direct every decision you make.  Due to market conditions or external factors however, your target market can change over the course of time – even if classified with the same label.

In the height of real estate sales, say 2005-2006, our Investor Target Market looked and sounded very different than the Investor Target Market we will see in 2009.  Let me start by qualifying my definition of the Investor Target Market.  Real estate is an investment and therefore many people would like to fancy themselves an investor, but my definition of investor refers to those who are looking to add to their investment portfolio.  These are people not intending to live in the home themselves; they are looking to likely rent it out, “flip-it” prior to completion, have their kids live in the home for some time, possibly renovate and increase its value and will sell it at some point when they feel they can make a profit. 

In 2005-2006 our Investor Target Market demographic ballooned.  Many people entered into this demographic as they heard cocktail party story after cocktail party story about people purchasing real estate, flipping it quickly (often before completion) and making a handsome profit.  This was especially true in the pre-sale condominium market where all one needed was a small deposit and there was little perceived risk of having to close on a property with so much demand in the market.   Many of these people were inexperienced, made the decision to purchase quickly and never intended to own the home for more than 2 years.  What was important to these buyers was getting in early, having good selection and in some cases, just getting their hands on a unit.

In 2009 our Investor Target Market will be a small group of generally experienced and sophisticated individuals – likely with other properties in their portfolio.  These people will have done their homework, know what else is selling in the market and be able to identify good value easily. They will likely take their time deciding but be confident when they make a decision ensuring closing won’t be an issue.   They will plan to hold onto the property as a mid to long-term investment - certainly longer than 2 years.  These buyers will take the time to fully understand the details of the home and make sure the numbers work (rental values or vacancy rates in the area for instance).     

In Vancouver 2009, the major driving force for the condominium investor will be perceived long-term capital appreciation (or capital preservation) rather than yield.  The great majority expect to have a negative monthly cash flow situation – feeding the investment slightly per month. 

Target markets change; this is clear in the case of the Investor Target Market which shows very different traits today than just a couple of years ago.  This should also act as a reminder to ALWAYS ask ourselves that Marketing 101 fundamental question ‘who are we selling to?’. 

Happy selling,

Cameron McNeill

www.macmarketingsolutions.com

PRE-SALES…can it work in 2009?

Well it already has!  On March 17th, MAC sold pre-sold all remaining condos in the Beasley project in Downtown Vancouver (over 100 sales in just a couple of weeks).  And the market will see more (albeit only a few) successful pre-sale efforts in 2009.  With construction costs down, developers with reasonable land cost and efficient targeted product may be successful.

Affordability will be key, and after years of escalating spec and finishes, we’ll see for the first time in a long time, reduced (less costly) interior specs.  Very “smart” design and execution will be paramount to meet the needs of the new High Expectation Consumer.  Developers will have to work very hard with architects, municipalities and consultants to keep projects efficient, cost effective and economically viable.  Municipalities may need to re-visit recent changes to policy (added constraints), DCC’s, etc. if they want to encourage development in the medium term.

And the market has changed significantly.  Gone are the days of low deposits (construction financing will likely require 20% deposits from buyers).  Buyer expectations will adapt as the requirement for high deposits will become norm.

The market will see the supply inventories diminish greatly throughout the year.  Buyers that purchased pre-sale condos in 2007 and 08 are less likely to attempt to resell into a down market and therefore much of the newly completed supply will end up in the rental pool.  It is very possible that we’ll see supply shortages in some market segments and some minor price escalation in some select product types.  MAC tracks the gap between supply and demand and we have identified a few key areas and product types that will significantly out perform over the next 24- 26 months.  These projects will not really represent a significant amount of supply, but it will continue to press a psychological impact into the market.

We will see more successful pre-sale projects in the Vancouver area in 2009.  But unique conditions must first be met: prime location for certain target markets; first time buyers seeking relative affordability; investors seeking lower price points in all categories.  Prime location will also be a key, C+ locations will just not cut it this year.  The luxury real estate condo products will remain sluggish. The major absorptions will be seen in the affordable product category.

And let’s not forget two other major factors: 1) the 2010 Winter Olympics that will bring increased energy and excitement toward year end. We will see a positive impact in the local economy and reciprocally the real estate market, and 2) the upcoming BC provincial elections will have a huge impact on the health of our economy and the real estate market,  (or more accurately the medium to long term effects post election) .  A change in the ruling political party could usher in an environment of cautious business investment that could eventually result  in a significant negative impact to our economy, thereby reducing the real estate purchasing power of all working people.

Vote and Happy Selling!

Cameron McNeill

www.macmarketingsolutions.com