Richmond realtor's June market report: "price erosion evident as more sellers motivated to reduce prices"

Last month we introduced you to Richmond realtor James Wong.

Mr. Wong was the first of a growing legion of realtors we profiled in the Greater Vancouver area who have been telling you that if you want to sell "deep price cuts are needed."

About the middle of each month, Mr. Wong summarizes the sales data for the real estate market in Richmond and now Mr. Wong is out with his monthly report for June 2012.

And as you will see, the situation in Richmond has declined since May 2012:

Home sales in Richmond for June turned out to be just as lacklustre as in May.

The number of homes sold for the month was 248 which was 8% lower than the previous month sales of 271 homes.

Active listings for detached homes, townhomes and condos/apartments in Richmond at the end of June, 2012 totalled 2,730 units edged 2% higher than the previous month’s total of 2,680.

The month also registered a large number of homes expiring or taken off the market by home sellers.

There are current 9.93 months supply of homes in Richmond. The increase in the supply of homes and slower sales in Richmond continued to put pressure on home sellers to reduce their selling prices. They are hoping that lowering their prices will help in the sale of their homes. Many homes were selling at prices below their city assessment values for 2012.

Richmond real estate market outlook

Both the condo and detached homes markets are facing pricing pressure to go lower. There are more sellers trying to sell than buyers wanting to buy. Higher inventory and adverse media reports are causing buyer concerns and hesitation to buy now. Detached homes are having a much tougher time to attract home buyers.

Homes over $1,000,000 are not seeing much buying interest.

The worse affected by the market slow down are homes (over) $1,300,000. With current level of supply, price erosion is evident as more sellers are motivated to reduce their prices to sell their homes.

Home sellers are taking their homes off the market, or allowing them to go expired unsold.

Sellers who need to sell will have to cut their prices more deeply to attract buyers.

Isn't it funny how the press releases from the Real Estate Board of Greater Vancouver (REBGV) don't seem to paint quite the same picture as this frank assessment by a realtor on the front lines?

Go figure.

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Tues Post #2: How bad is Richmond right now? "If you have to sell, much deeper price cuts are needed."

Meet James Wong.

Mr. Wong is a realtor in Richmond who publishes a monthly report on the health of the market.

On June 16th, before huge mortgage rule changes were announced by Federal Finance Minister Flaherty cutting million dollar homes off from CMHC high ratio mortgage insurance, Wong came out with this report for Richmond real estate.

Richmond’s total home sales for May, 20, 2012 at 271 units was 11% lower than the previous month sales of 306 homes.

The total number of detached homes, townhomes and condos/apartments listed for sale at the end of May at 2,680 units was 6% higher than the previous month’s total of 2,525.

The total active listings for the 3 types of homes in Richmond now surpassed the highest listings registered in September, 2008.

The supply of homes in Richmond at the end of May at 9.08 months edged higher compared to the previous month’s figure at 8.07 months of inventory. The supply of detached homes, townhomes and condos increased further in the month as more listings were put on the market. Overall, the housing market in Richmond is in favour of BUYERS, with a great selection of homes to choose from.

Daily price reductions are common as sellers adjust their selling prices to try to sell their homes.

Richmond real estate market outlook

Both the condo and detached homes markets are facing some challenges. Resale condos have to compete with presale and new homes that are competing for buyers.

Similarly, detached homes are having a tougher time to attract home buyers especially for detached homes that are over $900,000. 

Homes over $1,300,000 and new homes that are over $1.80 million are not selling well. With current level of supply, price erosion is evident when more sellers are reducing their prices, and transaction prices are trending down.

Homes under $900,000 in Richmond and those priced realistically are getting more showing activities

There are 566 homes over $1,200,000 listed for sale in Richmond. With past 3 months average sale of 32 units, there are now 17.7 months supply of homes.

The slow sale pace will result in home sellers either taking their homes off the market, or allowing them to go expired unsold.

Some seller’s who must sell will have to resort to much deeper price cut to sell their homes.

Did you catch that?

For the 566 homes priced over $1,200,000 it is expected you will have to wait 17.7 months to sell.

And if you are in a position where you have to sell, you will "have to resort to much deeper price cuts to sell your home!"

And this rosy analysis, which comes from a realtor, came out before Flaherty cut all of these homes off from CMHC high ratio insurance eligibility.

Reports over the summer and into the fall from Mr. Wong should be interesting.

Perhaps even more interesting will be watching to see what sort of price cuts will be required if current conditions intensify.

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