Friday, October 12, 2012

Are Vancouver homes starting to melt below assessed value like they are in Richmond?



On Wednesday we showed you more million dollars homes in the Vancouver suburb of Richmond selling for below their government assessed value (by about 25%).

Richmond, along with the City of West Vancouver and the west side of the City of Vancouver, had for years been HAM (hot asian money) hotspots.

So it begs the question that if values are melting in Richmond, how are things going in Vancouver right now?  

For a summary of market conditions, let's check in with realtor Andrew Hasman who reminds us in his October Update that "the media always seem to be somewhat behind what is really happening on the front lines," which is interesting because the media 'experts' have been insisting the market is flat right now.

Here's his latest:
After several months of slowing sales and increasing supply the new media have made it official. That Vancouver’s Housing Market is now officially slowing and it’s a “Buyer’s Market”. 
September sales activity (on the Westside) continues to remain at levels not seen since the late 1990’s. We now have over 12 month’s housing supply and home prices were down (on average 6% ) in September this year’s verses last year. 
This all being said, a correctly priced home that presents well will still attract offers and a sale within 30 days. There’s a lot of supply and choice for buyers right now. It’s critical for sellers to make their home stand out from the crowd. Pricing and Presentation is now more important than ever. 
Here’s how the numbers stack up: 
Westside Single Family Homes: During the month of September there were 86 homes sold compared to 104 last September. Year to date the sales are down by 39% from 1683 homes sold in 2011 to 1013 sold this year. 
The average selling price of a home was down 6% this September verses last year to $2,259,214. Year to date the average selling price is up 2% to $ 2,434,759. There were 1044 homes listed for sale at September 30th this year verses 823 one year ago. That’s an increase of 26% 
Months of supply has climbed from 7.91 last year to 12.13 this year. We are very much in a Buyer’s Market.
Dismal numbers, to be sure.  Months of supply up from 7.91 to over a year! 

Wow.

But as Hasman says, a 'correctly priced home' will sell in this market.

So what is the 'correct' price on the west side right now given that the 'correct' price in Richmond is 25% below assessed value?

Perhaps this house at 3888 W. 30th Ave in the prestigious Dunbar neighbourhood will give us an idea.



Described in the realtor listing as a custom built, 2,548 square foot, 5 bedroom home, it has a sunny south facing backyard and is billed as being close to the best private and public schools (Lord Kitchener, Lord Byng, and one block to St. George's).

Original asking price: $1,790,000.

The assessed value of the property: $1,751,000

The property sat on the market for just over three months during which the owners cut their asking price to $1,640,000.

It just sold for $1,540,000.

That's 15% below the original asking price and 12% below assessed value.

Is this what market shills like Tsur Somerville mean when they say the market is 'flat'?

(Hat tip to Lurker on VCI)

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12 comments:

  1. Does anyone know if the methodology for the Teranet-National House Price Index has been changed since the last crash in 2008-2009? At that time, it seemed that their index more accurately reflected what was happening in the market compared to what real estate boards reported.

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  2. Five years ago that place would have been about $800,000...

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    Replies
    1. Do you have the sale history of this place (or comparable in the same area) before making such claim?

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    2. Yeah, if it was in Burnaby

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    3. Do you have any info to the contrary?

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  3. "This all being said, a correctly priced home that presents well will still attract offers and a sale within 30 days."

    That's just saying there exists a market for homes and it hasn't gone "no bid".

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    Replies
    1. yeah, it's a worthless comment. A crack house with squatters who have chained themselves to the pillars, built on a native burial ground with runoff from toxic creek nearby will attract offers and sell within 30 days if it is priced correctly.

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  4. There are a lot of van west homes currently listed well below assessment, here are a few:

    V963157 $4.488M assessed $5.203M in Shaughnessy
    V974579 $3.98M assessed $5.145M in Shaughnessy
    V971765 $2.98M assessed $3.313M in Arbutus
    V970521 $1.498M assessed $1.892M in Dunbar
    V960296 $1.475M assessed $1.902M in Kitsilano

    Also note that assessment = assessed price as of June 2011

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    Replies
    1. Thanks for this... will profile tomorrow.

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  5. I think we are all going to have a good time with this one the next several months. Observer, queue this one up!

    http://www.vancouversun.com/homes/Photos+Gated+estate+million+Squamish/7380472/story.html

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    Replies
    1. Thanks JR. Delusion doesn't begin to describe this one.

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  6. Sad thing is that this is a boiling frog type problem. If home value declines 10-15% in a year, there will be people who will point out that this was just a nice needed reset to normal pricing. What they miss is that this can will likely happen for multiple years. At each point in time there will be market price and people who price at or below that can sell their home - just like we're hearing now. What won't be seen by most until retrospect is that 3yrs x 10-15% is a 30-45% decline, likely with more on the way, though the rate may change.

    Personally some of the price changes documented in Richmond which seem to indicate a 25% off sale from last year are startling and are indicative of a larger imminent decline than outlined above.

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