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