This from Barbara Samson at robchipman.net 18 Nov 2009 1:45 pm -
“The tiny slice of market (Upper Lonsdale) that I follow is right now critically short of properties under $900,000, but glutted with properties over $1 mil. 60% of the listed homes are over $1 mil when maybe 6% of the sales since Sept 1 [2009] have been over $1 mil. Right now you could buy a crack house for $800,000 or spend 25% more for something really nice. And all the buyers are opting for the crack house?? This is not a balanced market and I can’t believe there are many who are spending their own money in it.”
Purp added the following 18 Nov 2009 8:37 pm -
“I’ve heard some anecdotal info that homes in the $800-900K range in the Main street corridor have also been selling with multiple offers, while more expensive properties close by on the West side are sitting longer.”
Asalvari adds 18 Nov 2009 10:45 pm -
“[I am seeing a similar effect] in Dunbar, Point Grey and Kitsilano. The most prolific selling realtors are moving from Dunbar and PG to Kitsilano townhomes.”
One thing I noted in the run up (say, 2005), was that the homes in traditionally expensive areas like Shaughnessy were more reflective of their actual value – for example, 800K would buy a sagging, older, average sized home on average lot in Kits or Dunbar, and half a million for something in need of attention on the East side, vs. a million for more for a large, treed lot and gorgeous, well maintained place in Shaughnessy.
At the time, I said that if I did suddenly come into extraordinary money, I would only consider purchasing in Shaughnessy, since it seemed to make sense: the houses were worth it architecturally and in regards to lot, rather than dropping a huge chunk on another neighbourhood’s completely average single family home.
I’m not sure that value has maintained (I’ve not run numbers on neighbourhoods for awhile), but even still, that was the price compression that made me realize we were in trouble!
Thanks for the observation, Arwen. I think you’re right. However, there appears to have been an intervening period where the high-end really did take off, and those well-built Shaughnessy type homes ran up to $2M, then $3M.
With the effect now being described by the posters above (a FTB or mortgage financing threshold effect at $1M?) we’d perhaps expect the high end to start dropping back.
As you point out, different layers of the market don’t always move in concert.