Did you know that, for 7 months now, westside Vancouver houses have been dropping value at the rate of over $1,000 per day? - Updated

Post updated with info on Richmond home sale

Faithful readers know that the charting of the housing bubble has changed over the course of 2012.

We have seen a dramatic reversal from houses that were selling for hundreds of thousands of dollars over asking price (asking prices which were, of themselves, way over assessed value)... to one where we charted by how much sellers were cutting asking prices (which when cut, were still over assessed value)... to one where properties are listed below assessed value... to where we are now: were we charted the biggest drops below assessed value.

That is a MASSIVE change in the market.

Does it mean the market has crashed? Nope - not yet.

And because it has not 'crashed' yet, many express frustration at where were are.

In many ways it is like watching a pot boil.  The over all process is not that long, but because we hang on results every day it seems to take forever.

When we profile properties 40% and 50% below assessed value, some express disappointment that these are properties many would consider a POS.

How quick we are to discount what is happening in the broader market.

Many other properties, like this one at 6139 Dunsmuir Crescent in Richmond, are selling for more than 30% below assessed value.

6139 Dunsmuir Crescent is a 5 bedroom, 4 bath 2,,351 sq ft single family house in the prestigious Terra Nova neighbourhood in Richmond.

A newer home, it was assessed in 2011 at $1,470,000.

While on the market this year, the seller dropped the asking price as low as $1,188,888.

6139 Dunsmuir sold last week for $1,060,000... or 27% under assessed value (hat tip to one of the anonymous contributors to the comments section). We have since been advised that the home sold with HST included in the final sale price.

According to the calculator below, this means the house sold for $985,000 (click on image to enlarge):

The end result is that this home actually sold for 32% under assessed value.

We have shown you real estate agents like James Wong who are very honest and upfront about market conditions. They will tell you bluntly - if you aren't listing for at least 10-15% below assessed value right now, no one is looking at your home.

As this example shows you, brand new homes in Richmond are selling for more than 30% below assessed value. This is a stunning sea-change from the start of 2012.

Let's look at another set of statistics to put things into context.

The peak for the industry's franken average HPI (Home Price Index) for single family homes on the westside of Vancouver occurred in April 2012.  At that time the HPI was $2,268,500.

Last month (at the end of November 2012) that number had fallen to $2,029,300.

You may glaze over at those numbers - or dismiss them as still wildly insane - but that's a drop of $239,300 in 7 months.

Single family houses on the west side of Vancouver are losing value at the rate of $34,186 per month! 

Or phrased another way... $1,140 per day! 

(hat tip VMD @ VCI).

The unwinding of a bubble takes a long time to play out.  In the United States things started to drop in late 2005/early 2006, but the collapse of the housing market really didn't enter our consciousness until 2008.

We are only in the early stages here... but the early stages have already produced some dramatic results.    If those dramatic results continue into the Spring, the next phase of the collapse will kick into gear.

==================

Email: village_whisperer@live.ca
Click 'comments' below to contribute to this post.

Please read disclaimer at bottom of blog.

Will this be the next Richmond property that sells for -50% below assessed value?

Yesterday we told you about a condo in Richmond which sold for -50% below it's assessed value.

It was Unit #204-3411 Springfield Drive.

There's another court-ordered sale in the building, this time it's Unit #125. 

This one seems to be a little better looking than #204, which probably explains why it's assessed at a higher value:

#125 is assessed at $289,400.

As we mentioned with #204, there are no special assessments pending in this older building (built 1972) and amenities do include an outdoor pool.

Like #204, this one is a 3 bed, 2 bath unit.  However #125 is larger by 140 square feet (1345 vs 1205). So will #125 fair better than #204?

Assessed at $289,400, the current asking price is $195,000 - $94,400 and 33% below assessed value.

Will this unit sell for 40-50% below assessed value now that #204 has sold so low?

Meanwhile Scotiabank has declared the threat of a housing collapse over saying the Canadian housing market appears to have achieved "a soft landing"... so far.

==================

Email: village_whisperer@live.ca
Click 'comments' below to contribute to this post.

Please read disclaimer at bottom of blog.

A 'Softening' Market

It's the second Sunday of December and time to trim the Christmas Tree.

But before I settle down for some steamed eggnog and an evening of holiday memories, I'll quickly type out a Sunday missive for you.

Did you get a change to see yesterday's post about the West Van home that was originally listed for $4.2 million, was assessed at $3.4 million and  just sold for $2.5 million - 27% below assessed value ($912,000 below) and $400,000 less than what the seller paid for the property in 2009?

Keep that in mind as you check out this treatise from real estate agent Mike Stewart, posted in the Vancouver Observer on Friday:

Vancouver real estate market crash? Not so much...

by Mike Stewart Posted: Dec 6th, 2012

For quite some time, many in the media have been predicting doom and gloom for Vancouver’s real estate market. The predictions are for a flood of new listings and falling demand; the reality, though, is it’s just not that bad.

The November 2012 REBGV statistics confirm that supply is contracting and Sellers are actually pulling out of the market, as illustrated by the large drop in the amount of properties listed for sale across the region.

A common assumption among more alarmist and less informed commentators is that recent softness in the Vancouver market is the beginning of a huge drop in prices. They contend that deeply indebted sellers will be forced to sell and buyers will not be able to buy. Many predict or allude to Canada experiencing a housing crash, not unlike what happened in the United States.

Thankfully the data is proving these theories wrong. Sellers in Vancouver are sitting on a significant amount of equity (value in the home after subtracting the mortgage balance). Many property owners who have been trying to sell have decided to take their properties off the market to wait for better market conditions. They are doing this because they can. This suggests we are not seeing panic in our current market.

Unemployment remains relatively low in Vancouver, interest rates are at all time lows, mortgages are easy to get, and the economy in BC is performing quite well.

This all means that buyers can and are able to buy property. Many are waiting to buy, but Vancouver is not in a situation where buyers cannot buy.

What all this means for buyers and sellers is that the Vancouver real estate market is softening gradually. Buyers are able to negotiate a far better deal than they could have 6-18 months ago. Sellers are able to get their property sold, though it may take longer and they may have to concede a bit more in negotiations than in previous markets.

Sorry doom and gloomers, the market is just not crashing.

Mike Stewart is a Vancouver realtor

Don't be too hard on Mike, he's actually bang on with that assessment.

The market is softening gradually.

This time last year pundits were adamant that the market 'might' go down 5% - 10% at best.

Now listings with asking prices below assessed value are commonplace.  In Richmond real estate agents tell us you must 10% - 15% below assessed value if you even want to have people look at your house.  Many Richmond single family houses are selling 25% below assessed value.

Listings 30% below assessed value are popping up.  Sales 30% below assessed value are not surprising anymore.

When all is said and done, people will look back and say that those lucky enough to have gotten out now (at 30% below assessed value); they were getting out just as the market was 'softening'.

Stewart is right, the market is not crashing.

The real crash is yet to pick up steam.

==================

Email: village_whisperer@live.ca
Click 'comments' below to contribute to this post.

Please read disclaimer at bottom of blog.

Realtyland - where prices don't fall, they 'flatline'

As November comes to a close, sales continue to lag despite some shrinking of the massive inventory that has built up since the start of the year.

And you can sense the desperation.

If the average home price had increased almost 6% since last year, the headlines would be screaming that prices continue to shoot upward.

But they're not shooting upward.  As the month comes to a close the average price is down 5.7% - so will headlines claim prices are falling?

Of course not.  In Realtyland prices aren't falling at all... they're 'flatlining'. Now 'flatlining' is a most interesting choice of words, don't you think?

But this is the spin as we see in the press today.

Housing market has 'flatlined'

The average home costs about 5.7 per cent less than 2011

Housing market has 'flatlined'

VANCOUVER (NEWS1130) - If you've been staying out of the housing market, waiting for a big drop, you might be in for a long wait.

Metro Vancouver's housing market is in a 'flatline' pattern, according to the numbers.

The Conference Board of Canada's latest look finds the average home costs less than last year, by about 5.7 per cent. Resales are up 3.9 per cent over the previous month but still down more than 20 per cent compared to last year.

Tsur Somerville of the Sauder School of Business says the signs don't show a collapsing market. "They're more suggestive of a leveling out, but looking at a period where the housing market is at a slower, calmer place."

Somerville says that should give people the chance to look around without major stress. 

"There's not a lot of pressure or worry that somehow if you miss a house now, that there won't be any next month, or prices will be out of your reach."

Somerville says it would take a major change in interest rates or an economic shock for the housing market to plunge dramatically.

As always, it's Tsur Somerville telling us those declining prices aren't declining prices (?) and if you're waiting to buy, don't... cause those declining prices (which aren't declining) won't keep declining.

Speaking of declining prices, earlier this week Observer had some new additions to the 30% below assessed value club for us on his blog Vancouver Price Drop.

In Abbotsford #1411-34909 Old Yale Rd is listed for 32% below assessed value:

In White Rock, #302-15342 20th Ave has dropped it's asking price to 32% below assessed value:

In Richmond, #204-3411 Springfield Drive is now 30% below assessment:

And in Pemberton, 7306 Clover Rd joins the 40% below assessment club:

Somerville says it would take a major change in interest rates or an economic shock for the housing market to plunge dramatically.

I guess that means the 30% and 40% below assessment club would become the 60% and 70% club at that point.

==================

Email: village_whisperer@live.ca
Click 'comments' below to contribute to this post.

Please read disclaimer at bottom of blog.

Now it's a westside Vancouver home that sells for more than 30% below assessed value

On November 1st we told you about a Richmond single family home that had sold for more than 34% below the government assessed value.

On November 5th we profiled an Olympic Village condo which claimed to be offered for 34% off the original list price.

Then we came across some resale Surrey condo's that were for priced more than 30% below assessed value, plus some new developments that were slashing prices 30%.

Well it appears the '30% off' craze has come to Vancouver's west side too.

This is 2107 West 36th Avenue in Vancouver (click on images to enlarge):

This 5 bedroom, 3 bathroom 3,351 square foot house sits on an 8,040 square foot lot.

Assessed value?  $1,993,100.

Just over 3 months ago it was originally listed for sale for $2,098,000.

Recently the asking price was slashed to $1,888,888 (presumably to appeal to the long gone HAM buyer):

After 110 days on the market this house has now sold for $1,350,000.

That's a collapse of just over 32% in 'supposed' value.

Some critics have argued that we will see price drops in the suburbs but there won't be any such collapse in Vancouver, particularly on the west side.

Until now, that is.

(hat tip Lurker on VCI)

==================

Email: village_whisperer@live.ca
Click 'comments' below to contribute to this post.

Please read disclaimer at bottom of blog.

30% off new developments too?

Seems that re-sale real estate isn't the only property being discounted 30% or more right now.

Above is a flyer for the condo development 'Headwaters' in South Surrey. It's a multi stage development in the mushrooming condo zone that is currently transforming the South Surrey area, a suburb of Vancouver.

As you can see from through the windows of one of the units, the street is one big orgy of development.

Yesterday faithful reader CJM posted in the comments section that he had received an email announcing 30% off new units in the development. From the text of the announcement, it seems the developer is desperate for more pre-sales to move forward with construction:

SAVE UP TO $140K ON NEXT 5 HOMES SOLD 

Anxious to break ground this Spring on the final phase of Headwaters in desirable South Surrey, the developer has just decided to offer even more SIGNIFICANT savings on the next 5 homes SOLD.

Here's a Sampling of our Limited-Time Savings. Act Now!

HOME HOME TYPE 2012$ SALE$ YOU SAVE 

#111-  3 Bed $469,900 $329,900 $140,000

#216 - 3 Bed $459,900 $359,900 $100,000

#316 - 1 Bed $269,900 $219,900 $50,000

#311 - 2 Bed $345,600 $274,900 $70,700

#412 - 2 Bed $385,000 $319,900 $65,100

Amazing Design Finishings, Listed at Unbelievable Prices!

The developer says he's "anxious to break ground this Spring on the final phase?"

Sounds more like he's desperate to get this thing done and get out before the market gets really bad come spring.

How long before 30% off turns into 40% off?

==================

Email: village_whisperer@live.ca
Click 'comments' below to contribute to this post.

Please read disclaimer at bottom of blog.

Properties 30% or greater below assessed value becoming common?

As we watch real estate here on the wet coast, the focus has moved from properties that are greater than 25% below assessed value to those greater than 30% below assessed value.

We have profiled the house in Richmond that sold for 33% below assessed value. There was the Olympic Village 'penthouse' advertised as asking 34% below original sale price.

And now some recent Surrey properties now have shown up with asking prices more than 30% below assessed value.

Observer had his Surrey profile on Vancouver Price Drop this past week and these properties were notable:

14896 60th Ave, Surrey (click on images to enlarge)

A 16,600 sq ft property with a  large 3 level split family home featuring 4 bedrooms and recreation/games room is assessed at $1,287,000.

Current asking price?  $900,000.

That's an asking price $387,000 below assessed value or 30% below assessed value.  And still no buyer is in sight! Meaning it will probably sell for less.

#105-9632 120A Street, Surrey

At the other end of the price spectrum is this 1,354 sq ft 2 bedroom condo with no rental restrictions and pet friendly building near Scott Rd and 96th.

Assessed value: $203,000. Current asking price: $139,900.

That's an asking price $63,100 below assessed value or 31% below assessed value and no buyer in sight!

Critics contend citing these examples is 'cherry picking' to create a misleading assessment of the market. But the fact is a year ago the idea you could even FIND properties selling below assessed value (let alone with an asking price below assessed value) was considered impossible.

Six months ago finding properties 20% below assessed value was criticized as rare and 'the exception'.

Now properties with an asking price below assessed value is the accepted practice, 20% below accepted value relatively common and numerous sightings at 30% or greater below assessed value.

How much longer until we have a property priced or selling 40% below assessed value?

==================

Email: village_whisperer@live.ca
Click 'comments' below to contribute to this post.

Please read disclaimer at bottom of blog.

Mon Post #1: A Vancouver condo for 34% off original sale price?

We've posted an example of a Richmond home selling for 33% below assessed value and now are we seeing similar 30%+ plunges in Vancouver?

According to this Craigslist ad (click on above image to enlarge) from Rennie Associates, an Olympic Village penthouse now has an asking price 34% below the original asking price.

Not as spectacular, but now less significant, the add notes that the asking price is 25% below original purchase price:

Penthouse suite, 2 bedroom and den, over 1,000sf in Olympic Village. Priced reduced by $370,000 for immediate sale!! Huge deck with a nice view of the water. Perfect for entertaining. Make an offer now and get a nearly new Penthouse condo at a 25% discount from the original purchase price!! Call today for a private showing.

Will the final sale come in at 30%+ below the original sale price?

Tuning into Global TV the past few days might convince you it would.  First the most bullish of TV stations talks about the 'Death of the Condo Presale in Vancouver':

And then a story on 'Vancouver's Deflating Real Estate Bubble' (hat tip to GreenhornRET for posting the clips):

I wonder if IAMWILL is going to question Global's agenda?

==================

Email: village_whisperer@live.ca
Click 'comments' below to contribute to this post.

Please read disclaimer at bottom of blog.

Thurs Post #2: A Richmond home sells for 33% less than assessed value

Faithful readers will recall that back on October 10th, 2012 we told you about 6691 Gibbons Drive.

The property is assessed at $1,258,600 (click on image to enlarge):

And the realtor's description of the listing is priceless:

VALUE HAS AN ADDRESS and it is this fabulous custom designed 4 bedroom, 3 bath (plus den, family room and wrap around decks on both levels) home ON BEAUTIFUL GIBBONS DRIVE, AREA OF MILLION DOLLAR HOMES!

Area of million dollar homes?

As we mentioned in our original post it would appear that "Million Dollar Homes" aren't what they used to be, at least in terms of financial value.

Here is a screenshot of the property listing so you can see it for yourself (click on image to enlarge):

So despite being currently assessed at $1,258,600, the asking price of 6691 Gibbons Drive had dropped to $898,800.

On October 10th this represented a plunge in value of $359,200 or 29% from the last government assessed value of the property... with no buyer in sight, meaning it would probably actually sell for even less.

We are told the million dollar home of 6691 Gibbons Drive has now sold... for $845,000.

That's another $53,800 off the latest asking price; an end result of a plunge in value of $413,600 below ASSESSED VALUE!!

That's a collapse of 33% in 'supposed' value.

Still think the Boomer Trigger is a myth?

(hat tip 900KCrackHouse on VCI)

==================

Email: village_whisperer@live.ca
Click 'comments' below to contribute to this post.

Please read disclaimer at bottom of blog.