Thursday, November 1, 2012

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)


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  1. my god what a beauty!

  2. Wow! 33% and were just getting started with the price reductions. I bet they think they got a great deal too.

    What are the new owners going to think when their $845k home is worth $700k next year?


  4. Sadly, the previous owners may never get to fully enjoy this wealth - elderly, not well and in a home. Lived in this neighborhood, sold last year and now watching this falling knife from the sidelines shaking my head as a renter.

    1. In this type of market there are always those that have to sell and, in this case, it explains why have such a significant drop.

  5. That one hell of an ugly house. I love modern but that is just bad.

  6. Bid: $1

    It looks more like something out of a Tim Burton movie.

  7. I appreciate the authors frustration with house prices; however, this is propaganda.

    There was 972 homes sold last year in Richmond (oct 11-Sept 2012)
    I took a random sample of 18 homes:
    Sold Tax Assessment $ above TA %
    1) 520K 482,300 +$37,700 + 7.25%
    2) 640,000 633,000 +$7,000 +1.09%
    3) 678,000 648,000 + 30,000 + 4.4%
    4) 673,800 626,000 +47,800 + 7.09%
    5) 685,000 666,000 +19,000 + 2.78%
    6) 730,000 813,000 - 83,000 -11.37%
    7) 748,000 674,800 +73,200 +9.8%
    8) 733,000 718,900 + 14,100 +1.9%
    9) 747,000 779,000 - 32,000 -4.3%
    10) 775,000 793,300 -18,300 -2.4%
    11) 762,000 842,000 -80,000 -10.5%
    12) 757,683 727,800 +29,883 +3.9%
    13) 805,000 817,000 -12,000 -1.5%
    14) 780,000 759,000 +21,000 + 2.7%
    15) 810,000 740,800 +69,200 +8.5%
    16) 785,000 826,000 -41,000 +5.2%
    17) 798,000 858,000 -60,000 -7.5%
    18) 833,000 856,200 -23,200 -2.8%

    So take an average, and you can figure it out.

    1) Understand the argument the author is saying...

    House prices will fall because we all can't afford it.

    Problem with Argument
    1) Circumstantial evidence IE: 1 house

    You need to take a random sample of all houses or take all 972 homes and take an average. The results will differ. The higher number of the sample, the more accurate is the results
    2) The Author assumes that there is a correlation between Tax Assessment and market value. Wrong- It has to do with Mill-Rate (Money needed to be raised by the government. (Google it)
    3) Tax assessments are done by an assessor looking at the outside of the home. They do not take it account for renovations, even if it is done with a permit; therefore there is no correlation.
    4) Tax assessments cannot take in account for View,craftsmanship, or any unique features that are inside the house.
    5) Check your T.A.-Houses do not appreciate it. Land Appreciates
    6) The Author assumes that we are in a closed economy. - Wrong
    Check to see how many people are coming into BC vs going out. (There are many more people coming into BC, then leaving, and not just immigration statistics)
    7) Everything is a result of supply and demand. These two forces work dependently and interdependently.
    Let me give you an analogy:
    Very few local people can afford to ski with their family in Whistler.
    So my question is, has the prices of ski passes dropped? If not , why not?
    The demand is coming outside of Canada. ie Tourist

    So how does this correlate to housing?

    Just look at the immigration statistics for people coming to BC, both inside the country and from outside. If the population is rising then the demand will increase, if the supply cannot be maintained.

    The Author is correct about Condos. The supply does go out of balance sometimes, and this certainly affects the prices in the short-run, but they get adjusted in the long-run because of supply and demand.

    What the Author is doing is writing an story, then finding circumstantial evidence to support the story. No offence.

    An argument has to be supported with empirical data. It has to be evidence based and done prospectively, not retrospectively ,
    (You can take any statistics and manipulate the information to support a story, if done after the fact- retrospectively)
    Should be double-blind ( In others words the author and the "study" should not know the outcome. In this case single blind study would be sufficient.

    What is the take home message?
    Be careful what you read, question the Author's motive for writing the story and challenge everything.