Slow Learner at greaterfool.ca 21 Apr 2011 12:26am -
“Things look like they are cooling fast in Victoria. Seafront place down the street from our (rented) home, an ordinary 20-year old house with the original appliances, faded carpet, and a bad roof. It has been up for sale for over 200 days, started at 1.8 million, which was high for last summer but seemed possible as real estate was white-hot then.
Walked through a couple of weeks ago, lonely realtor was friendly, and slightly desperate. The price was down to 1.3 million, no bites. Seems insane, dropped the price half a million dollars, HALF A MILLION DOLLARS, rather than do some basic upgrades to make it more presentable. Shows contempt for the buyers, trouble is , nobody is biting. Sellers are out of step.”
The RE market in Victoria has softened with a 17.5 per cent drop in the number of sales in March 2011 compared with March 2010 and the dollar volume off 21.8 per cent. Prices are down 2.8%. [timescolonist.com, 19 Apr 2011].
The article contains some informative quotes regarding how buyers start to act in a flat to falling market. Excerpts:
“Carol Crabb, president elect of the Victoria Real Estate Board, said locally there was no one factor affecting monthly statistics. Instead, she noted several factors – confusion over the harmonized sales tax, interest rates and changing borrowing rules – likely played a role.
“Personally, I’m finding in working with my buyers that there’s so much selection out there they are taking their time to make a decision. Having 4,100 listings in a market the size of Victoria is a lot,” she said. That will likely mean flat growth for the next few months at least. “There’s nothing to push prices up because there’s so many properties and there’s nothing to push buyers into making a decision as there’s lots to choose from and lots of time to make decisions.”
“there’s so much selection out there they are taking their time to make a decision”
Ahh the old “paradox of choice” saw. vreaa, you didn’t cut/paste this from HBB in 2007, did you? At least she ‘fesses up: people are waiting because there is no danger of being “priced out forever”, and greed and fear occupy the same overlapping space in the human brain.
In Generation X, Douglas Coupland called it Option Paralysis: The tendency, when given unlimited choices, to make none.
“confusion over the harmonized sales tax, interest rates and changing borrowing rules – likely played a role.”
What a lot of CODS WALLOP! Seriously, what sort of a percentage of buyers have ever understood these things? Good grief most of the realtors don’t even have a clue.
Confusion over taxes, IR and borrowing rules?- SNAFU.
As a related anecdote, from HHV this was before March 18th:
2168 Bartlet sold on March 15:
ML No: 288650 List $: $779,900
Status: Sold Orig $: $779,900
DOM: 32 Sold $: $755,000