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)
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Wow. Only 1.35 million dollars. Wake me up when the average family can afford the average home.
ReplyDeleteConsider what $1 Million+ will buy you in pretty much any American market except for Manhattan or San Fransisco... and no, as much as Vancouverites would like to tell you otherwise, the city is neither Manhattan or San Fransisco. Hell, it's barely the Canadian equivalent of Seattle or Portland, and look at the housing prices there.
DeleteThis one is across the street from Bill Gates' house.
Deletehttp://www.zillow.com/homedetails/1885-77th-Ave-NE-Medina-WA-98039/48800936_zpid/
Or you could live across the street from Dave Matthews, that would be fun!
Deletehttp://www.zillow.com/homedetails/4912-Wallingford-Ave-N-Seattle-WA-98103/48920249_zpid/
"Some critics have argued that we will see price drops in the suburbs"
ReplyDeleteBut Vancouver West IS a suburb (away from the inner city, accessed by car, single family homes, predominantly residential, affluent, etc...).
This is what an illiquid market can do. We don't know the story behind this sale, so it is a bit premature to say market has crashed based on this transaction alone.I am all in favour for a decent correction but this kind of reporting is misleading at best. Last time I checked realtylink newspaper....prices are still ridiculous on average.
ReplyDeleteMisleading???
DeleteAre you kidding? A year ago folks were lined up in bidding wars for just this kind of property. Price drops were unheard of. Homes were being flipped within 30 and 60 days of initial purchase for hundreds of thousands of dollars profit. Anyone who went in to bid asking for conditions was laughed right out of the realtor cubicle and scoffed at as a lunatic.
In some cases people were buying houses sight unseen based on postal codes alone and nobody ever asked for an assessment let alone an inspection.
My, my, my, how things have changed.
In a very short period of time vendors have finally awoken to reality. Buyers are walking away from overhyped and overpriced "deals". Realtors are heading for the unemployment line in many cases or losing their office chair if they can't perform while listings surge and sales have crashed.
Yes. Sales crashed and homes now languish where before they were snapped up in a frenzy of paperwork and high pressure gimmmicks. The arrogant dorks behind the assault on buyers sensibilities were none other than your friendly neighborhood realtors who often made disgusting profits at the expense of a herd of fools who had no idea of the dangers.
And you are here suggesting that when there are homes selling at 30% below assessment that it is misleading? I beg to differ my friend. This is just the beginning of a correction that will see 40% stripped off the average price of Vancouver homes if not more.
What you are witnessing is the beginnings of a major shift in sentiment.
Amen
DeleteWe took a look at this listing: http://www.realtor.ca/propertyDetails.aspx?propertyId=12426197&PidKey=-569642465 . The realtor's selling technique seemed to be all about making us feel sorry for the sellers - ie, the "you can't offer less because they need this money in order to buy another property" after we suggested we might be interested, but would offer less since the amount of Asbestos tile all over the home would need considerable remediation.
DeleteYES, I do understand this really is a teardowner! (Looking at it shows just how desperate we are not to live in a strata condominium, faced with years of assessments put off by owners that took their money and ran.)
It beats me how someone can actually live for 7 years in a "home" like this, with walls covered in soot, rotting floors and a leaking roof, without picking up a cloth & some TSP - maybe just anticipating the huge profit to made even listing as a 'tear-downer'....but judgement aside, the realtor pitch makes me super angry, because really, WHY should I feel sorry for these people? the profit made on this home, even if they sell low, means they can actually buy into a better neighborhood than we can coming into the market approved for the price they are able to ask, just because of speculation driving up land values.
I think that it will be a wake-up call to realtors, if the tide of HAM is stemmed, that we don't actually feel any moral obligation AT ALL to give another person our age an easy $50 to $100 grand to get them into a place better than what we are approved to buy.
It never ceases to amaze me that the angry and bitter people are always outsiders looking in. People have a right to voice their displeasure but perhaps one has to disclaim what their current situations are. 99.999% certainty that they weren't able to participate in the bubble and they are trying to sound like the voice of reason. Buddy, you gotta be in it to win it. Just know when to get off the train. The market will do what it will do, you can never talk it up or down so calm down and take a diplomatic stance and look at the situation carefully and place your bets.
DeleteOf course it is relevant - how does this sale not impact every other property in the area, the region and the entire province. Who will pay $2 million for a $2.2 million assessed home nearby when this $2 million assessed home went for $1.35M? This is how crashes begin
DeleteIt may affect it , it may not. Like I stated before, this could be an anomaly or it could be the start of the bigger decline, but to deduce that the market is crashing is a bit premature. This could have been a forced sale, trying to get liquid or some other reason. Frequenting these bear sites may be therapeutic to the ones that want the market to go down for selfish reasons and one must realize that these are anecdotal evidences only and will not make my financial decisions based on them.
DeleteI don't want it to go down for selfish reasons, I want it to go down because it's the only path forward for a healthy lower mainland/vancouver economy. Who is going to come live here, or stay for that matter, when they can't afford to live here.
DeleteHere is an example. I am a computer developer. This is a well paying professional which I would call by most world standards upper middle class income. Do I a) work here or b) work in a place like Seattle, where the pay is better, there are 10x as many jobs, housing is 1/3rd of the price for an equivalent home, cost of living is lower, and there is a useable transit system.
Lol u crack me up. Why not move to Seattle then?
DeleteAnyone ever scratch their bum and smell heir finger after?
Deletewhy do you sound so bitter my friend?
ReplyDeleteI am also waiting to get in as I have sold couple years ago, but you my friend have a personal vendetta of some sort. It's all one big casino, sorry you missed the last ride, maybe next time eh?
My friend, you seem to have drank too much douche!
DeleteI wish I could keep track of which annonymouse was insulting which other annonymouse. Can you insulters please refer to the time of the post to help me out a little....
DeleteHar Har.
As a curious side note to the discussion today it is worth noting that CMHC may have hit the wall and be near to issueing the last of its capped limit mortgage insurance. At the end of the second quarter 2012 total issuance was at a lofty 576 billion which was just 24 billion shy of the cap. This amount could easily have been consumed in the past 5 months even when taking into account mortgage retirements. We shoud be looking forward to the third quarters report in interest but for now we can puzzle over whether the end is indeed in sight or not........
ReplyDeleteCMHC not going to hit the 600 billion wall. Mortgages taken out 15-25 years ago being paid off in record numbers...$60 Billion this year alone.
ReplyDeleteMortgages from the past are always contributing to some new cap room. This has always been the case.
DeleteIn 2006, CMHC's had $100 B in mortgages on its books, today that total is almost $600 B. To keep the party going, CMHC will have to keep adding NEW money to the situation. If they do not (and they likely will not) then prices will obviously crash.
Yup, CMHC could easily hit the wall. Retirements of past mortgages were estimated to be 65 billion this year but that is not the concern as every year sees some of the old portfolio drop off.
DeleteThe problem is with how fast they have been adding new commitments and the lengths of the guarantees issued in the past 5 years.
Remember those 35 and 40 year mortgages? Those will be on the books a long long time. Also keep in mind that the values and volumes for places like Vancouver were abnormally high while also recalling that sales have tanked in that city.....you cannot retire a mortgage insurance guarantee without a sale.
So the slowing of market activity is itself going to create a bottleneck in the mortgage retirement process.
The last point to make here is that CMHC acknowledges it was within a slim 4% of the cap limit at June 30th and that it had increased its portfolio beyond estimtes for the first two quarters. That means tey have been adding mortgages faster than they have been retiring them. They are accelerating into the wall.
Still think they are not at the limit?
It Sucks to be the one left holding the bag.
ReplyDeleteYou mean the general public? I agree.
DeleteI've never seen so many Anonymous bulls on this blog before, baffling!
ReplyDeleteWhen it comes to sales/salespeople there are a couple of standard axioms:
ReplyDeleteaxiom #1 - always say that business is great.
axiom #2 - if it does not sell, then the price is too high.
I can imagine the drama playing out in the lower mainland between listing agents and buying agents. The Lister is compelled to sell at the highest price possible (as he should)at the request of the home owner. The Buyer agent also wants the highest price so he achieves the highest commission possible. But - now it is coming to 'a bird in the hand is worth two in the bush'. If I were an agent I definitely would be pushing clients towards the 'price adjusted (downward)' listings just to ensure money is coming in.
CJM
I think that is exactly what we are now seeing. I have heard anecdotally that Realtors are in no hurry to do open houses and make big efforts where greedy vendors demand prices that are out of sync with the new reality. If they can't make a sale they don't get paid so the pressure is now on those listing to conform to what the market is saying.
DeleteLandbaron: I've never seen so many Anonymous bulls on this blog before, baffling!
ReplyDeleteNot Bulls. Just don't want to give a false hope...like many times in the past. If a crash happens, it will benefit renters. If it doesn't, lets not get hopes up prematurely. Just saying.
To take a page from the R/E Booster's Handbook; "it's different this time". Why? Because all the cumulative changes made to the CMHC insurance and bank lending requirements are taking effect. Add in the record debt levels people are dealing with and you have the perfect cluster fcuk of a storm/crash.
DeleteFrom bidding wars and sellers getting $50K+ more than asking price to sellers accepting offers 30% below asking price! The tide has definitely changed! Only idiots will buy in a falling market. Keep up the great work on your blog!
ReplyDeleteInteresting to see such a reaction to the decline hitting home in Vancouver
ReplyDeleteThe thing cost all of 6G new
ReplyDelete30% is just remarkable but the thing is vancouver bc real estate is now a days declining so have to think a lot for investing "http://www.thevancouverrealestate.ca/"
ReplyDelete