Tuesday, December 11, 2012

Richmond records a property sale at -50% below assessed value.

Last Thursday we asked: How low will it go?

#204-3411 Springfield Drive, a foreclosure sale in Richmond, had dramatically dropped it's asking price. 

Listed as a spacious 3 bedroom, 2 bath, end unit condo overlooking the courtyard, it has languished on the market since May.

Assessment value: $265,900.

The asking price two weeks ago?: $185,000... 30% below assessed value.

Last Thursday another $45,100 had been chopped off that asking price and was now listed for  $139,900

(click on image to enlarge):

That's $126,000 below assessed value or 47% under assessed value.

In the comments section we were urged not to get excited because this was a marketing strategy.  Wait until the offers came into court and then see what happens. (the argument being a bidding war in court would push the value up significantly from that 47%  below assessed value listing price).

Well... #204-3411 Springfield Drive has posted at sale now (hat tip: bopeep @ Vancouver Price Drop).

No bidding war, though.

It sold for $135,000.

That's $4,900 below the last listing price and a full -50% BELOW assessed value.

Good thing we waited to see what would happen in court because now we know that Richmond has officially recorded a sale of a property at -50% below assessed value.  

For those who complain that these dramatic drops only represent the 'shit properties' (as one contributor observed yesterday), foreclosure court in Richmond has another sale on Monday.

This is #135-8880 Jones Road in Richmond.

The listing describes the property this way:
North-West corner large one bedroom with windows on 2 sides. Huge sundrenched 300 sq ft patio, gas fireplace, insuite laundry. Less than 10 steps to elevator & courtyard. Central location, just 5 blocks away from bus stop & 2 blocks from shopping mall. PCDS dates October 26, 2012. Parking stall #220, 2 small pets (cats or dogs) allowed. Rentals restricted to 15 currently at maximum. Priced over $50,000 below city assessed value for immediate sale.

#135-8880 Jones Road is assessed at $249,000.

It posted a sale in foreclosure court on Monday for $195,000 ($5,000 below the listing price, a listing price which was $50,000 below assessed value).

Was the low asking price part of a strategy?  If so, there were no bidding wars in foreclosure court on this property either.

Now this sale price is only -22% under assessed value.  Buy think about that for a moment.  Only -22% under assessed value?

Let's recall that it wasn't even 12 months ago we were telling you about properties in Richmond engrossed in bidding wars and selling for $200,000 - $300,000 over asking prices (which in themselves were hundreds of thousands over assessed value).

#135-8880 Jones Road is the new reality.  As bopeep reminds us, this condo sold in 2007 for $215,000.

This condo may have "only" sold for 22% below assessed value, but it sold for $20,000 less than what the condo exchanged hands for in 2007.

That's five years of so-called real estate appreciation wiped out in a heartbeat.  The seller LOST $20,000 in the actual transaction, not to mention five years of condo fees, interest on mortgage, realtor transaction fees and lost income by not investing elsewhere.

Doesn't real estate always go up?

The melt gathers momentum.


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  1. I have a friend who bought a house at the tippy top for $800K and also had a renter in another RE "investment" property also in Richmond. Never has there been a time when taking on debt seemed like such a fantastic idea as in before the tipping point. I wonder how long it will take before Langley starts recording below assessment sales.

  2. Whisperer, Exactly right on the fact that it's 22% below assessed value, and that is remarkable.

    So much to talk to - What I'd add is to consider the time-frame of the decline. A year ago would have this gotten assessed value? Probably yes, and if so, that 22% in one year. Declines will go on for years and years. My opinion has been that a 10-15% YOY decline has impact because measured on a 3-5 year horizon could be as much as 75%.

    To think a 20% or so decline in one year or so. This is truly astounding and portends an ultimate reset of immense proportion. By all accounts the market is on track for a 50-70% reset from peak as I have previously called.


    p.s. - The idea that a buyer in 2007 is at risk, isn't accepted by mainstream yet - wait until that takes hold - buyers hold off even more for fear of losing their hard earned money.

    1. I saw something today from Scotiabank declaring that we are in a soft landing. That's like saying we are going to have soft landing because the decent from 30k to 20k was smooth heading into Las Vegas. Their ignorance about the effects this is going to have on the BC economy is incredible.

      There are some commenters on Van Price Drop upset about the number of non-Van proper properties in the recent listing. I think what people fail to understand is that this falls apart outside in and that these are the leading edge properties. By the time you look at Van proper and average SFH it's too late.

  3. Whisperer you are having too much fun!

  4. The listing realtor just re-posted a new sale price today of $153,500. Don't know what happened when the other day it was already posted at $135,000. Still waaaay below assessed.

    6139 Dunsmuir Crescent, in prestigous Terra Nova of Ditchmond sold $1,060,000.00, assessed at $1,470,000.

  5. Prices are undeniably down and falling. It starts with the marginal properties though, on the geographic edges and in less desirable condition/area, with distressed properties leading the way, because their owners were much more likely to have over-stretched to buy. The Jonas Road unit does not look like a "shit property" to me.

    But we can now point to properties changing hands with loss taken on the purchase price. For now most of those were bought either very recently, or around 2007, the previous peak, when feeding frenzy was at the highest, and many are foreclosures. Sale prices set comparables, and the trend is clear. In places like Maple Ridge, Richmond, etc, barely anything sells over assessed, buyers can see this.