The ‘right price’ keeps changing

Yesterday we heard from a Vancouver Realtor about why condos aren’t selling.

They’re overpriced.

And now there’s this article in the Vancouver Sun Buyers on the Sidelines as Market Slows.

Its all about the market slowdown – we’re now seeing the lowest number of sales since 2000 in Vancouver.

Nice houses that are priced right are selling within days, some in bidding wars. But anything priced too high or considered undesirable is apt to sit idle in this market, which is, according to the Real Estate Board of Greater Vancouver, witnessing the lowest total sales for the region since July, 2000. The Board reported 2,098 property sales in July, a drop of 11.2 per cent compared to June. It’s a drop of 18.4 per cent compared to July, 2011.

There are many anecdotal stories around the Lower Mainland about houses that have sat on the market for months, priced too high for the more price-conscious market. A six-year-old West Vancouver home on a 21,000-square-foot lot overlooking Capilano Golf & Country Club was originally listed at $3.695-million three months ago. The owners have reduced the price by $400,000 and it still hasn’t sold.

“There is a lot of product but it’s not selling for the price that people expected or hoped for,” says real estate finance expert Tsur Somerville, who is director of the University of B.C.’s Centre for Urban Economics and Real Estate. “People aren’t buying at the prices that are being set.”

Well here’s a funny thing about ‘the right price’ in a correcting market: it keeps changing.

I live in a BC market that is several years into it’s correction and I can tell you that the places that are selling are moving only at prices that are lower than the ‘right price’ a year ago and far lower than the ‘right price’ several years ago.

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gokou3
Guest
gokou3

“A six-year-old West Vancouver home on a 21,000-square-foot lot overlooking Capilano Golf & Country Club was originally listed at $3.695-million three months ago.”

Example of an creme-de-la-creme needing to drop price?

specuskeptic
Member

An extension of the “It’s different here” argument is the “my property is special” one. This cruise ship is turning around and very few people have noticed it so far. When they do, the rush for the lifeboats will get interesting and you can forget about ladies and children first chivalry.

HipsterBear
Guest
HipsterBear

Just going to float this one: maybe few are buying because there are few buyers. On a related note, I’m a pedestrian when I’m pushing my fixie up a hill, but when I’m riding it down the other side, I’m not really a pedestrian.

Moivng to the States
Guest
Moivng to the States

Living is Vancouver is getting stupid now. Same job paid more in the states, houses are cheaper in the states, cars are cheaper in the states, pretty much everything are cheaper in the states as I found myself buying everything online now. Time to move instead of waiting for Vancouver to sink…

G
Guest
G

This is off topic. I saw someone complained about Chinese women wearing visors on the street.

Watch out for the new trend in China. This might come to Vancouver soon. It’s full body swimming suit with face mask.
http://news.xinhuanet.com/local/2012-08/13/c_112710330.htm

patriotz
Member

Tsur:“People aren’t buying at the prices that are being set.”

Um Tsur, a price is set when someone buys. People aren’t buying at the prices that are being asked.

#3:”maybe few are buying because there are few buyers.”

If by a buyer who mean someone who actually buys, well of course that’s tautological.

If by a buyer you mean someone who would like to buy, there are always more people who would like to buy than people who would like to sell. Houses don’t sell because the latter are asking more than the former are willing to pay.

registered
Member
registered

@6 patriotz: Spin is versatile. The housing market for Tsur isn’t overpriced; some members of that market have unrealistic expectations. implying fundamentals are fine. Pastrick pushes an HPI he didn’t when the average painted a much rosier picture, adding an unsupported note of hope: “I think in 2013, we’ll also begin to see sales pick up as well.” Hold the line citizen, the market will return next year. I think.

Not one of these ‘academics’ suggests the most expensive market in Canadian history, on the tail of the most corrosive real estate bubbles in history, might simply be inflated. How do these pricks sleep at night?

Makaya
Member
Makaya
Loon
Guest
Loon

I just woke from a nightmare. In it, I had a speckerfriend (a real person), come over yelling at me if I want to help make 12 million bucks. I said how? he replied building a mansion in Whistler. I face palmed and said haven’t you seen vancouverpricedrop ? He’d never heard of it, I told him he would be lucky to get 8 mill in this market. A desperate look came over him, I asked how much to break even ? He said 3 million, I told him I would think about it ….and then I woke up !

If this were real, I would tell him to take a flying f@ck. I’ve got to stop reading these articles just before sleep.
Anybody else experiencing this at night ?

Proud and extremely rich Chinese home owners
Guest
Proud and extremely rich Chinese home owners

@patriotz: If all Chinese don’t sell the price still holding firm until the next up swing.That is the past history of Van and more and more wealthy Chinese come to this city so price won’t go back to 2007 level period. 60% of Vancouver house owner are Chinese.

stupid logic
Guest
stupid logic

@Moivng to the States: good luck to you. another relief on the medical system!

patriotz
Member

@stupid logic:
Until he gets really ill or retires, and comes back. And acute and elder care account for the great bulk of Medicare costs.

Vote Down The Facts
Guest
Vote Down The Facts
Makaya
Member
Makaya

@Vote Down The Facts:
“Two other Canadian cities —Toronto and Calgary — followed Vancouver in fourth and fifth place, respectively”

Yeah right…

UnagiDon
Guest
UnagiDon

@patriotz:
The Canadian government makes no effort to stop “Canadians of convenience”. Is it unethical to take advantage of that? Or is it simply the rational choice?

patriotz
Member

@UnagiDon:
I wasn’t saying it was unethical. I was commenting on “stupid logic”‘s comment that it would be a “relief on the medical system”. In fact Canadians becoming non-resident during their peak earning years and then returning represent a net burden.

stupid logic
Guest
stupid logic

@patriotz: how do you know he would last until retiring?

an observer
Guest

If he’s moving to the US he most likely has a good job and good income. If that’s the case he’ll be receiving MUCH better health care at an overall MUCH lower price when you factor in how much of our tax dollars goes towards health care. And as far as a relieve to the medical system, again, if he is making a decent salary he is contributing way more to the system than taking from it.

Piklishi
Guest
Piklishi

For the Canadians who buy all the milk( the whole pallet as they say) the solution is that Costco should open a store right at the border, if possible at the peace arch so no border crossing necessary. It will look ugly but our American friends will park they big cars freely horizontally.
Ps: I can’t believe the newspapers have nothing important to deal with.

On topic: BNN headlines had the following this morning” July average Vancouver home pricing drop by 12%”

patriotz
Member

@an observer:
“If that’s the case he’ll be receiving MUCH better health care at an overall MUCH lower price”

That is, as long as the insurers consider him to be a good risk. If Obamacare goes through that will mediate things somewhat, but not fully I think.

Of course as I said, as a Canadian he can have his cake and eat it too by coming back.

Makaya
Member
Makaya
Prices were going up? Chinese fault! Prices are going down? Still Chinese fault… The Globe and Mail in full spinning mode again: @Listing chill hits Vancouver housing market My preferred part of the article: “But a closer look at the Multiple Listing Service (MLS) Home Price Index, which tracks the change in prices for same-home sales in the five major real estate markets in Canada, shows prices in Vancouver are actually 0.64 per cent higher than last year. The MLS index measures price differences over time between comparable homes — townhouses to townhouses, mansions to mansions and so on. Using this metric, home prices fell a modest 0.74 per cent between June and July . What this means is the kinds of homes now being sold in Vancouver is changing. Fewer multi-million-dollar properties are finding buyers, and it’s more modest… Read more »
gokou3
Guest
gokou3

@Vote Down The Facts: #3, ouch. But why do we have more expensive RE than Vienna and Melbourne, which is #2 and #1 on the most livable list (according to Demographia)? OTOH, why isn’t HK #1 on the most livable list with its highest RE price?

Livable and RE prices aren’t really correlated, is it?

Anonymous
Guest
Anonymous

@G: “Watch out for the new trend in China. This might come to Vancouver soon. It’s full body swimming suit with face mask.
http://news.xinhuanet.com/local/2012-08/13/c_112710330.htm

Looks like a promo for the Avengers

Anonymous
Guest
Anonymous

@gokou3: “But why do we have more expensive RE than Vienna and Melbourne”

Not so sure about Melbourne, but I suspect the HAM is not too keen on having to learn German.

Bag it and tag it
Guest
Bag it and tag it
There was a comment yesterday about how most stuff that’s selling on the West Side is going for 10% below assessed. This got me thinking. Instead of relying on avg, median or HPI to determine price drops, it seems to me the best way to get a sense for price change from month to month is to compare sale price to assessment value, then avg that out. In a simplictic example, if we have 2 houses that sell in month 1. One at 5% above assessed and one at 5% below assessed…this would avergage out to being equal to assessment. Then in month 2, we have two different houses that sell. Once at 10% below assessed, and one at assessment value. This obviously would average out to 5% below assessment. We could then say that prices dropped 5% from month… Read more »
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