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An intermission in Seattle: Obama politics, job losses and Bob Rennie

January 24th, 2009 · 15 Comments

Sorry to disappoint those of you who thought I’d gone dark because I was in the midst of a deep investigation. Instead, all I’ve done is escape to Seattle for a couple of days — always a great way to get a new take on cities, people, art and the economy.

It’s been great to eavesdrop on people at the tables next to us and listen to the passionate talk about politics. (What, you don’t eavesdrop? What’s the point in going out if you don’t do that?)

At Cafe Campagne near Pike Place Market, the young woman at the next table was going through her whole trip to Washington to see Obama get inaugurated, detail by detail, to an older female friend. (“And when Mom asked me what I wanted for my birthday and I said, ‘To go to Washington for the inauguration,’ she burst into tears.”) We just had to interrupt to get a few more details — was it hard to get a place to stay (she camped on a friend’s couch), what was the security like where she was (there wasn’t any), what was it like (amazing). We let them eat in peace when she started talking about her upcoming wedding, who the bridesmaids are going to be and the rest.

Then, the next night, at Dinette, the two men next to us talked non-stop about the CIA and terrorist attacks and U.S. failed foreign policy over their choucroute and duck confit with cherry sauce and pureed parsnips.

(For my foodie readers: Cafe Campagne sucked, fake French food for tourists; Dinette, on Capitol Hill, was lovely, definitely recommended.) 

They don’t have an Olympic village hanging over them down here, but it’s not fun. The headline yesterday was that Microsoft is laying off 1,400 people, the first-ever layoffs for that company. Today, it’s that Starbucks is shedding another 1,000 on top of previous layoffs. When I was at Starbucks this morning, a guy buying the paper commented to the barista, “Don’t worry, you’ve still got your job.”

At least one local company is doing well: Costco, which is based in Issaquah (who knew?), where apparently sales of luxury items are up. Just another tiny part of our contradictory economy. 

House prices are down, people are having trouble refinancing their mortgages with skittish banks, but the New Homes section is still running pin-up pictures of condo projects with eerie B.C. references. One, in Issaquah (shades of Spy magazine, how that name keeps popping up) refers to the houses as having a Whistler-like quality. And there, I see, is a familiar Vancouver name: Bob Rennie, being quoted about a condo project in Ballard (one of the several gentrifying neighbourhoods down here outside the central core) that he’s marketing. “This is the fastest-selling project in Seattle, and, quite possibly, in the United States,” says Rennie. “This is the time to buy and they are choosing Canal Station.” Apparently, 80 per cent is sold. Ah, some things never change.

Although sales statistics in New Homes sections can’t always be trusted, I wouldn’t be surprised if they are selling, even though condo sales in Vancouver have dropped dead. The problem in Vancouver, it seems to me, is that prices rose so high and then the market collapsed so fast that no one wants to buy because they’re not sure any more what a reasonable price is. Adding to Vancouver’s problems, construction costs skyrocketed, in part because the province and city were awash in Olympics-related projects. Contractors had their pick for their last few years, more than Seattle contractors would have had.

Seattle never achieved Vancouver’s craziness. I remember when we came here a year and a half ago on a house exchange, we stayed in the nicest section of Capitol Hill, a neighbourhood filled with meticulously cared for grand old homes. When we asked a neighbour there what they would sell for, she said, as though she wanted to break the shocking news to us gently,” Oh, they would be at least a million dollars.” We just laughed. At that point, that’s what nice houses on the east side, in neighbourhoods that still have crack shacks and street prostitution within walking distance, would sell for.

Although their house prices are down too, they’re down from less dizzying heights than what Vancouver achieved.

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  • Denis

    Maybe you should have dropped down to Seattle a short time ago, when the Canadian Dollar was at or near par. Nice city and lots to see and hear.

    The constant fear of some terrorist attack makes them sort of easy to manipulate.
    The University District is always a nice place to spend some time. Individually nice people, as a group much harder to take.

  • VHB

    ““This is the fastest-selling project in Seattle, and, quite possibly, in the United States,” says Rennie. “This is the time to buy and they are choosing Canal Station.” Apparently, 80 per cent is sold. Ah, some things never change.”

    Thank you for the ‘apparently’ hedge. Let’s not use the word ‘sold’ here. At best, he has 80% signed to a presale contract. As anyone following the US bursting bubble knows, once market prices fall below presale prices, people will try anything to squirm out of their contract. We are now observing this in Vancouver too. (Gee, who could ever have predicted that.) This means that a large proportion of the ‘sold’ condos are never actually sold.

    It’s one thing for condo shills to blab about how much has been ‘sold’ (e.g. in Millennium Water), but I am disappointed that so many in the local press take Rennie and his ilk at their word about the presales.

  • VHB

    Example: Wall Centre False Creek. When it was being presold, the Sun’s Malcolm Parry quoted Rennie saying the following:

    “Sales of Wall Financial Corp’s 400-unit Wall Centre False Creek development kicked off Tuesday, when Bob Rennie and staff wrote up 110 sales. The compact condos — one-and-two-bedroom units run 560 to 875 square feet — fetched an average of $800 a foot, with penthouses at $1,000.”

    So, 110 of the 120 units presold Bob? Interesting, because when the project was canceled this week we learned that only 30% (ie 36) had presold.

    “In its last quarterly financial results, Wall Financial said it had sold almost 30 per cent of the Wall Centre Creek’s units, 120 in all, but that sales had come “to almost a complete stop” during the quart”

    So Bob, what happened to the 110-36=74 other presales?

    Question for Frances and the other local media types: Why on earth do you give any credibility to what comes out of Bob Rennie’s mouth?

  • VHB

    whoops. My bad. Bad math. 30% of 400 units is 120. I take back the previous posts.

  • VHB

    Actually, no. I take back post 3 since I can’t do math, apparently. That’s bad, particularly when one is making a sanctimonious post about credibility. Yowzers.

    Post 2 stands. We should not be equating marketers’ claims about ‘sold’ units to actual sold units.

  • Joseph Jones

    Bob Rennie, huh? The guy who said:

    “THE HILLS adds value to the neighbourhood … The neighbourhood adds value to THE HILLS”

    Everything adds to everything, both ways! The on-site billboard disappeared on November 12, 2008. But you can still check it out (with choice comments) at

    http://www.slanted.ca/blog/2008/03/08/welcome-to-meltdown/

    Meanwhile, Holborn now appears to be stuck with a flipped property, where a lot of value has already been extracted by the developer who finagled rezoning and then vamoosed.

    In the spring of 2006 City Council gave unanimous approval to the rezoning request, after gulping guff about how the neighborhood would benefit from a grocery-store tenant. Guess what disappeared from the plans by the time the project went past the Development Permit Board in October 2008. On that occasion, city planning said, “Oh, the rezoning wasn’t conditional on that grocery store? Too bad for the neighborhood!”

    To compound the insult, a one-phase proposal morphed into a two-phase. Who knows, down the line maybe that empty portion of the site can provide an opportunity to finagle even more density — after sitting around long enough to get claimed as a green feature.

  • VHB

    “but he is doing his job and he is good at it. ”

    Great. I agree. If I had condos to sell, I’d hire him.

    The question is, why do the media quote him unquestioningly and fawn on his every word about the direction of the market? If you and I can see he is a self-interested marketer, then why can’t the ‘hard nosed’ journalists among us see the same?

    And on the Parry thing–oh to have a delete function on comments. I over-reached with the numbers and with the vitriol. My apologies to all.

  • LP

    “The question is, why do the media quote him unquestioningly and fawn on his every word about the direction of the market? If you and I can see he is a self-interested marketer, then why can’t the ‘hard nosed’ journalists among us see the same?”

    I’m not sure many journalists could ever be classified as hard-nose or investigative for that matter. I think you need to look at each individual journalist and determine what role they play in the format with which they are published.

    Parry for example is meant to write fluff – that’s all he ever does – hence my ‘on his knees’ comment. He isn’t paid to write any substance, just the bs spewed at parties around the city. I like to call Malcolm Parry Vancouver’s Chief Fluffer. (for anyone who isn’t sure what that is, do a wiki search, its probably there)

    For other journalists, they have a specific role to fill in their organization. If their role isn’t to be ‘investigative’ I doubt their story will flow past the top line stuff.

    Lastly, it’s not easy to be the lone voice crying out that the sky is falling, when everyone else is saying the opposite. It’s much easier to go with the flow as we’ve all seen the majority of media do on any topic. Hence the avalanche of reporting that comes when any story becomes worthy enough to drive the headlines.

  • LP

    Just to get VHB’s blood boiling on a Sunday morning, here’s a link to The Province and his buddy Rennie along with Cameron Muir, and a few developers talking about what a great time it is to buy:

    http://www.theprovince.com/Homes/Current+property+decline+last+long+Rennie/1216264/story.html

    I’d wait for a bit yet. The deals will become even sweeter. Just keep in mind each of the guys quoted with exception to Cameron have a shitload of inventory to sell. Of course now is the time to buy, it always is when you’re the seller.

    According to some bankers I know, seller prices are still high and need to come down. They figure another 3-6 months before that happens but still warn to exercise caution as many sellers are buying into the hype to sit and wait for the upside to return. The longer it doesn’t return, the better deal down the road.

  • It is a well known fact amongst those in retailing that a salesman sells something he HAS to someone who NEEDS it….

    A great salesman sells something he DOESN’T HAVE, to someone who DOESN’T NEED IT!

    This is why many consider Bob Rennie a great salesman when it comes to pre-sale condominiums.

    Now Frances, are you heading down to Portland where I understand a major scandal has erupted? According to one of my colleagues… the best, most progressive mayor the city has had in 20 years is about to resign as a result of a sordid sex scandal–and he’s only been on the job 15 days!

    So sometimes we have to count our blessings.

  • paul

    VHB,

    The Van Sun quoting Rennie as he pumps the market is akin to The Tyee looking to “local real estate bloggers” to time the recovery of the market.

    Same poop, different pile.

    LP is right, caveat emptor.

    P.

  • Not to get too heavy into media theory, but corporate news gathering practices privilege certain opinions over others. I don’t lay much blame on media institutions and even less on individual reporters. The failure is systemic. Journalistic process favours official sources. Bob Rennie is Vancouver’s leading condo seller. Cameron Muir is the chief economist of the B.C. Real Estate Association. Condohype is an anonymous analyst who may or not be a comedian. I know where I stand in the land of officialdom. I’m comfortable with it.

  • Westender

    I’m surprised to hear that Bob Rennie is involved in marketing the “Canal Station” project in Ballard. I spend quite a lot of time in Seattle and have seen endless “Canal Station” sandwich boards signs littering Ballard – I think it’s been a long haul to get to the purported 80% pre-sales. It’s also been quite amusing to see the signs vandalized with the removal of the “C”… makes one wonder whether a different name for the project might have been a better choice?

  • jesse

    It is not ALL local reporters who mindlessly quote the likes of Muir, Rennie, etc. David Baines comes to mind, yet somehow I think the Sun would be loath to stick THAT pit bull on someone producing such lucrative ad revenue for the paper. But hey, prove me wrong.

  • Bill Lee

    Linkname: Seattle home prices see another record fall
    URL: http://seattlepi.nwsource.com/local/397623_housing28.html
    The Seattle area set new records for monthly and annual house price
    declines in November, according to a national index.

    The value of a typical house in King, Pierce and Snohomish counties
    fell 11.2 percent in November from a year earlier and 2.5 percent from
    October, Standard & Poor’s S&P/Case-Shiller Home Price Indices
    reported Tuesday.

    It was the 10th consecutive record annual drop for the Seattle index,
    which goes back to the start of 1990. The previous record monthly
    ….