The Gamblers: Know when to hold. Know when to fold. And they're folding.

On December 23rd we talked about 5575 Elm Street, a Vancouver westside property that had seen it's asking price reduced by over 20% but was still listed over $400,000 above the assessed value of the property.

We mentioned that 2013 will be the year many begin to accept that the values established over the past year are not coming back and that to sell, homes will have to be listed below assessed value.  

As Global TV noted, the price increases of the last decade are long gone.

Driving this new reality is that fact so many properties are already selling below assessed value. 

In November we told you about a westside house that had sold for 32% below assessed value. December hasn't seen a replication of this type of drop, but there have been numerous sales 5%-20% below assessed.

And when you have conditions where sales are down almost 30%, it shows you in which direction the market is heading.

Seeing the writing on the wall, more and more speculators getting out the market at a loss.

2171 S.W. Marine Drive is one of those properties:

Originally listed at $2,180,000, the house is assessed at $1,885,000. It just sold for $1,570,000 or -17% below assessed value. More significantly, the seller originally paid $1,700,000 in February 2011.  That's a loss of $130,000 (not including commissions and Property Transfer Tax or PTT) in only 22 months.

Then there is 1706 W. 59th Avenue:

The seller originally bought the house in August 2011 for $1,700,000.  It was listed for $1,790,000, it's assessed at $1,697,000 and it just sold for $1,600,000.

That's only -5% below assessed value but it's a loss of $100,000 (not including commissions and PTT) in only 16 months... and this seller' is counting his lucky stars he only lost that much.

There is 3721 W. 16th Ave:

They were asking $1,288,000, it is assessed at $1,200,000 and it just sold for $1,030,000 or -14% below assessed value.

How about 2718 W. 24th Ave:

Assessed at $1,864,000 it was on the market for $1,750,000 and recently sold for $1,580,000 or over -15% below assessed value. (A faithful reader advises this house sold in 1998 for $455,000, sold again in 2004 for $700,000.  With no changes to the house whatsoever, it has now sold for $1,580,000.)

Finally we bring you 4118 W. 13th Ave:

This house is assessed at $2,529,000.  The seller was originally asking $2,900,000 and accepted $2,308,000 earlier this month or -9% below assessed value.

As we go into 2013, homes on the westside of Vancouver are routinely selling for 5%-20% below assessed value.

In this environment, asking prices above assessed value are a non-starter. Is it any wonder speculators continue cut their losses and get out while they can?

Earlier this year pundits insisted Vancouver westside properties would hold their value. Then some told us the market would see a 5%-10% correction - at best while others were adamant that sellers would never sell for less than what their property was worth, let alone less than what they initially paid for it.

All of these claims were dead wrong.

All eyes are now firmly focused on the upcoming Spring market.

(hat tip timber2012 on RET)

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Email: village_whisperer@live.ca
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Tues Post #1: Number of properties where asking prices are below assessed value are growing

Yesterday our friends over at the blog Vancouver Price Drop released their weekly list of properties that have slashed their asking prices significantly.

It's always an intriguing read.

The intrepid Observer notes that it wasn’t that many weeks ago when a 20% cumulative drop would have you in the top 10 of a list of properties that had dropped their asking price. Two weeks ago a record was broken – 20 listings hit a 20% drop during that week.

This week that number was 28 listings with a 20%+ cumulative drop and 12 listings with a 25%+ drop.

Ultimately asking prices are irrelevant.  It's what the property sells for that is important.

But after so many years of seeing homes caught up in bidding wars and selling ABOVE asking prices, it certainly is a harbinger of the market when asking prices are slashed week after week after week.

And while some would argue that many of those listing prices are products of wild expectations, a curious development is the growing number of listings where asking price has been slashed BELOW the assessed value of a property... a clear sign the market is turning.

In this weeks list, 8 of the 18 properties with valid assessment information are now listed below assessment, 5 of those 20% or more below assessment.

7 of the 8 properties listed below assessment were originally listed above assessment – the only exception was originally listed $400 below assessment.

A few of note...

First up is # 2601 1499 W PENDER ST, Coal Harbour, Vancouver West

March 09	V918446	$2,680,000	$0	0%
April 17	V918446	$1,900,000	$-780,000	-29%
July 09	V918446	removed
July 12	V961484	$1,770,000	$-910,000	-34%
Open House: Jul 12

Assessment: $2,289,000

Next is : 2404 MATHERS AV, Dundarave, West Vancouver

March 29	V939748	$1,798,000	$0	0%
April 13	V939748	$1,698,000	$-100,000	-6%
May 01	V939748	removed
May 03	V947249	$1,598,000	$-200,000	-11%
Open House: Jun 17, 24
July 09	V947249	removed
July 11	V961286	$1,349,000	$-449,000	-25%
Open House: Jul 15

Assessment: $1,387,200

And here we have: 13799 20TH AV, Elgin Chantrell, White Rock

March 09	F1128278	$1,165,000	$0	0%
May 04	F1128278	removed
May 16	F1212743	$999,900	$-165,100	-14%
June 06	F1212743	$950,000	$-215,000	-18%
Open House: Jun 10
June 30	F1212743	removed
July 11	F1217909	$859,000	$-306,000	-26%

Assessment: $891,000

And finally: 3577 ROSEMARY HEIGHTS CR, Morgan Creek, White Rock

March 29	F1207805	$1,015,000	$0	0%
April 13	F1207805	$998,000	$-17,000	-2%
May 09	F1207805	$899,800	$-115,200	-11%
May 28	F1207805	removed
Open House: Jun 03
June 01	F1213906	$828,000	$-187,000	-18%
Open House: Jun 03, 10, 16, 30
June 30	F1213906	$800,000	$-215,000	-21%
Open House: Jul 07, 08, 14
July 12	F1213906	$789,900	$-225,100	-22%

Assessment: $808,000

Four examples from around the Lower Mainland of what is sure to become a growing trend.

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