The improvement in the Months-of-inventory (MOI) in Richmond from 12 months to 10 months was due to the 10% reduction in total listings. Many sellers either pulled their listings off the market or allowed their homes expired. The decline in listings is expected to continue for December. Seasonally this is not the time for home sellers to list their homes for sale.
Sales in Richmond for November at 207 homes were slightly lower than the previously month sales of 225 units. Price discounting continued as motivated sellers tried to attract buyers.
Many people in the real estate industry are hopeful that home sales will improve after January, 2013. An up-stick in sales can be expected in spring next year, but the overall market sentiment will likely remain subdued.
There is a marked difference for 2013 and 2012 as the number of active listings at the beginning of 2012 was around 1,655. The supply in 2013 is expected to take off from a higher base at around 1,950 homes by January 01, 2013. Many more new listings are expected to be added to the market after the new year.
The large number of listings in Richmond will result in more sellers lowering their prices to sell their homes. Current market sentiment is not expected to change much. Buying activities are likely to remain subdued. Many homes in Richmond are expected to sell below their city assessment values.
More price erosion can be expected as many home buyers are expected to stay on the sideline. Majority of these buyers know that it is to their advantage to wait for the market to continue its correction. Buyers when making offers, typically test sellers’ motivation by making low ball offers.
The market situation for Richmond detached homes remained depressed. There are currently 540 homes for sale at prices above $1,000,000. With average past 3 months sale around 33 homes, the MOI is at 16.36 months.
This is a slight improvement from 17.88 months in October, partly due to expiry and 10 homes reducing their prices to below $1,000,000. There are 293 homes over $1,500,000 in Richmond. At an average sale pace of 12 homes the past 3 months, this translates into 24.42 months of supply.
2013 will be another difficult year for Richmond.
The absence of home buyers, dampened market sentiment, and tightened lending rules are expected to continue into 2013.
The current MOI though better than the past 2 months, will likely be reversed when more new listings hit the market the next few weeks.
There are no signs of the Government changing or relaxing the current lending directives to Canadian Banks. Richmond’s market for 2013 is expected to have persistently high number of homes for sale and below average buying interest.
Speaking of dealing with the current market dynamics, have you seen real estate agent Owen Bigland's reality check for seller's when it comes to listing you home for sale in today's market?
(video posted 2 days ago):
"Let's talk about pricing. One of the biggest mistakes people make, or seller's make, is they price the home according to their needs as opposed to what the market is dictating.
In other words they say we paid $800,000 for the home 3 years ago, we need to net $800,000 today.
Well, unfortunately, the market doesn't work that way. A home is priced based on the current fundamentals."
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