Sat Post #1: Is this what 'flat' looks like?

The spin from the R/E propaganda machine is that sellers would rather pull their properties off the market than sell for less than their house is 'worth.'

The reality, naturally, is that some sellers simply allowed their listings to lapse during the traditionally slow Christmas selling period... a pattern we see every year.

Other sellers have kept their homes on the market.  And they are demonstrating they are quite willing to accept far less than their house is 'worth' in order to find a greater fool.

The latest example to come our way is this home in West Vancouver:

1083 Duchess Avenue located in Ambleside in West Vancouver was listed in March of 2012 for $3,299,000 (V922019).

It's 2012 assessment value? $3,224,000 (click image to enlarge):

1083 Duchess Ave sold yesterday for $2,626,000.

That's $598,000 below assessed value or -18.5%.

Doesn't exactly meet the definition of a 'flat' market now, does it?

(hat tip VMD and Observer)

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Is Macleans correct? Is Vancouver already crashing?

Saturday's post about Maclean's magazine's cover story is clearly the hot topic in real estate circles right now.

Besides bringing the collapsing housing bubble issue front and centre, the real estate industry is all a tither about the defacto way in which Macleans presents it's argument.

The angst is best summed up by this tweet from the website Canadian Mortgage Trends (click image to enlarge):

The industry is pissed Maclean's didn't allow access to their spin.

Local Richmond realtor, Arnold Shuchat even popped by our little corner of the internet and offered the following response to the article in our comments section:

As usual, the general press when trying to get into the specifics of a particular industry without any detailed knowledge of same creates eye popping headlines which are of more relevance to its business than to the target of its supposed study.

Faithful readers have been jumping all over 'Alphabet Arnie' (a moniker one commentator dubbed him with for using his education credentials after his google ID), but it is worthwhile noting that Mr. Shuchat is one of our local real estate agents who has been very upfront about the evolving maket conditions during the past year.

Shuchat regularly provides copious market data about price declines.

Every week Shuchat will post the top 10 price declines for properties in Richmond as well as keeping track of notable price declines in various neighbourhoods around Richmond.

As he notes:

The average observer may have had his head in the sand in Vancouver, but the market has already moved down some 25% depending upon the particular sector.

When was the last time you saw a realtor come out and tell you the market has already dropped 25% in places?  Instead all we hear from most is that the market is 'flat'.

Shuchat is from Richmond and as we know all too well, Richmond has been ground zero for last year's implosion ever since the images of the Japan Tsunami spread around the globe.  

[One wonders how Friday night's Tsunami warning might jar memories for prospective buyers considering the delta lands in the coming months, but that's a topic for another post]

Notwithstanding, Shuchat acknowledges he is in the eye of the current collapse.  But going forward he see's things starting to turn around:

Being right in the middle of it, I detect a renewed vigor among buyers as of the end of November... I see prices holding firm and buyers coming back in. The effect of all this now, is that garbage will not sell as fast as it would have and properties will have to be better prepared for the sale.

Shuchat says many Richmond properties are owned by people who "do not have to sell."

Finally Shuchat notes:

Frankly, from the inside of this industry, I think MacLeans missed their call by about 8-11 months in the west coast market, and, short of producing additional fear into the market by their article, signals to me that additional opportunities can be reaped in the existing climate by betting against broad brush articles with incendiary pictures produced by newsmaking press.

The incendiary pictures being painted by the newsmaking press are their attempt to capture what is actually happening.  With that in mind, I can't help but focus on a key point Shuchat makes: that Macleans has missed their call by about 8-11 months.

Has the market been 'flat' the last half year or has it been crashing for about 8-11 months?

Fellow blogger Observer, at his blog Vancouver Price Drop, brings this question to the forefront  in his latest post and offers a stunning comparison between Vancouver  (at our current stage of our collapse) and with what has happened in the United States.

How does Vancouver compare with other US cities at the same stage of the popping of their real estate bubble?

In Vancouver, the peak looks to have been May 2012.  

If we look at the westside of Vancouver, 6 month into the unwinding we are down -8.6%.  

After 8 months we are down -11.1%. 

At this rate it's not a stretch to believe it will be down 15% after 12 months. 

Using the Case-Shiller data for single family homes, how does this drop stack up against our US counterparts? (click on image to enlarge):

6 months into our drop, Vancouver's westside had dropped 50% faster than ANY AMERICAN CITY! And we are on track to be ahead of all cities, except Miami, after 12 months.

As Observer notes, this is not a "flat housing market" nor is it a "soft landing."

Maclean's is really the first mainstream media to report on what is happening.  Given the dynamics of the recent mortgage rule changes, current evolving economic conditions and levels of Canadian household debt... they don't see the conditions that will put the brakes on this slide.

How can you blame them for forecasting anything but a crash?

It will be interesting to see their cover six months from now.

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We now have an entry in the -60% below assessed value category

Even I have to admit that it's a surprise to see an entry in the -60% below assessed value category this early into the collapse of our housing bubble. I wasn't expecting the first one until at least late spring of 2013.

Naturally it is another property with 'issues' that breaks this barrier.  As we have noted before, these are the properties that will lead the way.

That doesn't mean their dropping value isn't impressive. A year ago it would have been unthinkable to even conceive they would listed for 25% below assessed, let alone -30%, -40%, -50% and now... -60%.

And today's entry is a new one for us.

Courtesy of Observer and Vancouver Price Drop, this is 28241 108th Ave, Maple Ridge (click on image to enlarge):

As the description notes, this 16 acre parcel with a slight slope sits in an area of nicer homes.

It only has a 1 bedroom, 1 bathroom 1,200 square foot structure on it, so the interest is - obviously - in the 16 acres of land.

This is a court ordered sale. And not a simple foreclosure, either.

As the listing notes, you can't get a mortgage for this property because the site is in violation of Ministry of the Environment, the Agricultural Land Commission and the District of Maple Ridge's Regulations and Bylaws because the property has been used as a dump site.

But for those who are liquid enough to take advantage (and can cover the cleanup costs) this property - assessed at $800,000 - is currently listed for $300,000.

Will it get bid up in the foreclosure process?

Or is this another property which will dance the price limbo to see how low it will go?

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Did we say -40% below assessed value? Correction... it's now -50% below assessed value.

Last week we told you about a White Rock condo that had breached the 40% below assessed value mark.

Located at 1371 Foster Street, Unit #306 was for sale last week with an asking price -47% below it's $228,200 assessed value (last week's asking price $119,000).

Well the asking price has been cut again.

Now it's down to $109,900, a stunning -52% below assessed value with no buyer in site.

As we noted last week, this building has an upcoming strata repair assessment of $63,000 that will be levied against owners. But notwithstanding this, we have seen condo units with large levies before that have sold.

The fact it's not moving is a reflection of the current market, a Lower Mainland market that now has it's first entry in 50% BELOW assessed value club.

(hat tip Observer and Vancouver Price Drop)


Meanwhile on the -30% front

Speaking of the current market, Observer notes we have two more entries in the -30% below assessed value category.

The first is 32913 14TH Ave in Mission which clocks in with an asking price -33% below assessed value:

And the second is #125- 3411 Springfield Dr. in Richmond which now has an asking price -32% below assessed value:

Like rats on a sinking ship, speculators bailing on the west side of Vancouver

Finally Observer shares another fascinating stat which I couldn't resist highlighting.

The west side of Vancouver has long been held as the epicentre of our stunning housing bubble and the  bastion of HAM (Hot Asian Money). Because of this speculators have been buying houses to flip like it was the one day shoe sale at Army/Navy.

But in what is another sign the bubble is bursting in the Lower Mainland, Observer notes that over 20% of listed homes in Shaughnessy right now were purchased just one year ago (this is not including new builds, so the figure is actually higher).

These are speculators desperate to get out and cut their losses.

Profiled is this listing at 1029 Devonshire Crescent, Vancouver:

This home last sold on June 25, 2011 for $2,499,888 .

The current list price is $2,380,000 (assessed value is $2,401,000)

IF the house sold for list price, there would be $125,238 in transaction costs and a $119,888 loss on the sale for a total loss of  $245,126.

So this specker is looking at a quarter million loss and no buyer in sight.

Guess you gotta know when to hold... and know when to fold.

And the speculators on the west side are folding, big time.

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Wed Post #1: We now have a property being offered for more than 40% below assessed value.

Last week, in one of our posts, we made note of how it was becoming common to see listings where the asking prices on properties was over 30% below assessed value.

We asked, "how much longer until we have a property priced or selling 40% below assessed value?"

Naturally it is Observer (and his excellent blog Vancouver Price Drop) who serves up the first one for  us.

This is an apartment block in White Rock at 1371 Foster Street.

Unit #306 is for sale with the following description:

2 bed, 2 bath top floor unit in the heart of White Rock. This unit boasts a large master bedroom, walk thru closet, lots of storage and an Ocean View. Great extra’s such as in suite laundry, updated kitchen, fresh paint, attractive crown mouldings and large balcony with ocean views. Walking distance to shopping dining and the beach, no rentals, 19 plus and pets allowed with restrictions.

Assessed value? $228,200.

Current asking price? $119,900.

That's a stunning 47% below current assessed value.

Now it must be noted that this building has an upcoming strata repair assessment of $63,000 that will be levied against owners.

But notwithstanding this, we have seen condo units with large levies before and it is a reflection of the current market that even with an asking price almost 50% below assessed value, there are no takers.

Hovering near this 40% below assessed value level is a unit in this White Rock complex at 15369 Thrift Avenue:

Unit #206 is described as:

a freehold unit in the heart of White Rock, just steps to new town developments, shops, restaurants, library, hospital and beach! The unit has been totally updated and looks/feels like new. Wellmaintained complex with new roof, pet friendly and free laundry! Low maintenance fee includes heat and hot water. Live near the beach in this prestigious location for way less than the assessed value!

Assessed value: $140,800.

Current asking price: $89,000.

That's an asking price 37% below assessed value... and there's no looming strata repair bill hanging over the purchaser's head.

Right now many homeowner's, instead of heeding advice to aggressively cut asking prices, are pulling their homes off the market for winter to re-list in the Spring. They are doing this in the hope of a post-winter market resurgence.

Meanwhile other homeowners are in the process of aggressively slashing asking prices.

Will those who choose to wait, come back in Spring to a market that is even in worse shape than it is now?

We have one property (that we have come across) that is more than 40% below assessed value and many others in the +30% range.

It will be interesting to compare those numbers with levels in the Spring.

If you come across other properties 40% below assessed value, let us know and we will profile them.

At the start of the year people laughed at the concept that we would see ANY properties 10% or greater below assessed value. And now we are talking about some being 40% below assessed value.

Was it really only as recently as June 8th of this year when speculating on drops of 30% was dismissed as something out of the Twilight Zone?

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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?

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Thought of the day - How bad is it in Burnaby for high end sales?

A brief, quickie post for you tonight.

Interesting statistic for you from Observer, who puts together the blog Vancouver Price Drop.

The Vancouver suburb of Burnaby sold 5 "high-end" homes in July that were valued at $1.4 million or higher.

There are currently 154 homes in Burnaby listed at $1.4 million or more.

That's a shocking 30.8 month of inventory for these "high end" homes.

Meanwhile VMD has grouped together the July 2012 sales data and taken the total inventory and divided it by the published sales figures. Here is what he gets for Single Family Houses (SFH) and months of inventory (MOI):

Richmond SFH: 19.5 MOI
Van West SFH: 12.5 MOI
West Van SFH: 11.5 MOI
Burnaby SFH: 10.5 MOI
Coquitlam SFH: 8.2 MOI
Van East SFH: 6.7 MOI

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