Garth Turner reports on the Vancouver market turning cold [at greaterfool.ca 16 Dec 2011]:
In May a 66-by-160 lot in a hot neighbourhood in Richmond (if such a thing exists) went to market for $1.3 million. Had it been listed two months earlier, I heard, it would have been snapped by some horny Asian for $1.5. But, too bad. The moment passed. A month later is was $1.1 million, then an even million and finally $900,000. It sold this week for $790,000.
“It goes to show,” says one of my BC insiders, “that in a buyer’s market, sellers have to get their price to where the buyers are willing to pay. When buyers are few, and sellers are many, you can see prices fall quickly and each new low sets the bar.”
Speaking of Denial City, seems sales on the steamy west side are cooling fast, and will be 40% below year-ago levels by the end of the month. Plus, January will start with more inventory on the market than at any time in three years (nine months now in Richmond). “Buyers are disappearing,” says Deep Listing.
We are setting up for an interesting spring of 2012. – vreaa
Indeed, spring time is really an indicator of where the market is headed. Only when bears can declare spring sales a failure, can we begin to look at the possibility of a trend change.
Its always hard to tell with Vancouver, too many years in a row now the fall has bad news, yet the buyers continue to crawl out of the wood work each spring.
Trends is a trend, until its not.
I still think this is too early to tell weather this is disaster or just seasonal trend. Inventory isn’t high enough.
Whether it’s $1.3M or $790k lot in Richmond, it’s still overpriced.
One word.
Liquefaction.
I would love to know what the seller paid for the lot. That is a true indication of what is going on.
It’s like that ridiculous house on The Cresent that was purchased for 6 million, listed a couple of years later for $17 million (and failed to sell) and the seller has relisted it for $31 million.
If it sells for $18 million… is it a stunning drop in value of 45% from the $31 million asking price or evidence of a continuing housing bubble where a seller tripled their return from their $6 million buying price?
Marginal pricing is awesome.
We are setting up for an interesting spring of 2012. – vreaa
hypothetical: what if the foreigners start dumping stuff for 50c on the dollar? – i mean it’s not that outrageous. if a few needed to unload in a hurry, who would they sell to at today’s prices? will they get blamed?
We wouldn’t be surprised to see this happening. It’s unlikely to occur as early as the spring of 2012, though.
As we’ve said elsewhere, ‘the foreigners had to sell’ may well end up being one of the (many) ‘stories’ of the bust.
(Like on the way up, the ‘stories’ will not be primarily causative, as all that’ll have happened is that a speculative mania will have ended; the way it always does.)
I’d say the most likely outcome will be what we just witnessed in Sydney’s “spring surge” – a flood of new listings accompanied with a moderate decline in prices.
Hi – for what it’s worth, I’m a Canadian citizen who moved to Europe at the age of 15 with his parents and I’m now looking to come back (with wife and child) to YVR. I grew up in West Van and I found the prices incredible when I paid a visit in April 11 – more expensive per square foot than central London!
If Europe’s experience is anything to go by, you *might* see 15%-20% drop (mostly in marginal areas) over the next 18 months followed by a subsequent slow decline of 2-5% per year. But of course, the Canadian economy is in nothing like the same mess as the US/UK, so… maybe not.
Can anyone recommend decent areas without nuts pricing on the North Shore, or am I just being totally ignorant?
With thanks –
Craig Sterling
Thanks for your observation and request, Craig. We’ll headline your post.
Hire a realtor instead of asking opinion of anonymous blogger who has been priced out!
On the Internet, nobody knows if you’re priced out or not.
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it was purchased in 2003 for about half of the 2011 selling price. It is well located, has a tear-down on the property and comparable sized lots in the same area sold for close to 1.5Million in February. It sold close to assessed value which is not anything close to what has been happening in Richmond (30-40% over assessed most of the year).