Skewing the Numbers

The end of another month and total sales are down again. It's five months in a row now where sales are down dramatically from last year AND where the total numbers are among the lowest in over 10 years.

Yet, for the second month in a row, the average single family house value is once again topping a million dollars.

How can this be?

Largely because some of those houses that are selling are 'high value' homes. When their value is factored into the mix, the numbers are skewed.

In October one of Vancouver's top five estates sold for $17,500,000: 3489 Osler Street.

But even at the upper end, the sale gives a glimpse of the current state of the market.

We are constantly told about 'Hot Asian Money' (HAM) and how HAM is driving our market.

Wealthy Asians are, supposedly, snapping up the high end properties and driving this 'world class market' in ways local money cannot support.

Oh?

Let's look at this property, 3489 Osler Street.

In many ways the house is a poster child for the housing bubble.

In 2005 the assessed value of the property was $11,882,000.

In 2006 that assessed value lept to $13,804,000, a stunning 16% increase.

Hoping to cash in on the growing real estate bubble the mansion's owner, Song Leung, put it up for sale in 2007 (just as the American real estate market was starting to collapse).

His asking price? $25 million.

According to an August 2007 Vancouver Sun article:

• SUPER DIGS: If million-dollar "fixer-upper" houses are too down-market for you, take a boo at Song Leung's 18,600-square-foot mansion on an acre-plus lot at 3489 Osler St. Malcolm Hasman has it listed for $25 million, and, for once, that realtor's inevitable "magnificent" description seems warranted.
  
  According to Great Estates list-maker Anton Abramovich, the house is number 1 on the B.C. market and relatively good value at $1,344 a square foot. The next city home on the list is number 4, the 6,900-square-foot penthouse at 1000 Beach Ave., for which owner Randy Bishop is asking $18.2 million -- or $2,637 per foot.
  
  Designed by the local Ernest & Collins firm, the house will likely appeal to offshore buyers.

Even in 2007 the media was beating the 'offshore buyer' drum, but those offshore buyers didn't come running to buy. This property failed to sell.

The property was pulled off the market and relisted in October 2009 for $22,000,000... $3 million off the asking price buy still well over the 2008 assessed value of $15,595,000.

For 3 years this 'top five' Vancouver mansion has been flogged on and off the market. But vastly overpriced, none of the infamous 'HAM' came rushing in to snap it up.

The current assessed value of the property according to BC Assessments is $16,887,000.

After one solid year of being on the market (in the latest listing), the property finally sold on October 22, 2010 for $17.5 million, an additional $4.5 million off the latest asking price - $7.5 million of the original asking price.

Like all commodities, a home is only worth what someone will pay for it on any given day.

It sold for $7.5 million below the original asking price but $613,000 over the current BC Assessment value of the property.

And it has taken over 3 years for the property to sell.

In the process it also skewers this month's average SFH price in Vancouver.

What to make of it?

It's a collection of paradox's and a window into the current real estate situation here in the Village on the Edge of the Rainforest.

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Email: village_whisperer@live.ca

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