Okanagan – 2005 Prices; Selling Strategy In A Falling Market

thirdlittlepig at RE Talks 26 Jul 2010 5:55 am and 6:33 am

“I happened to be looking at some properties that I made notes on here in the Okanagan about 18 months ago. Nice house, not lavish, a country mile from mine, 6 bedrooms, 5 baths, 5 acres, quiet semi-rural area, but close to town, built 1980, was listed for $849K 18 months ago. Asking $599k now. I’d say that’s at least close to 2005 prices. There are a lot of others that haven’t sold over that time, delisted, then relisted. In fact the local paper recently had an article where the RE agent was suggesting that because the market had slowed people who really wanted a good price for their place should delist and try again some other time. This in a market which is obviously not going up and could easily slide for the next few years or who knows how long. I don’t get the logic on that, because in the case of this home this approach would have just delayed the inevitable price drop and probably made it worse. If they had priced aggressively in the first place they might have sold sometime in the last 18 months because places were moving albeit slowly. Last year a three acre place in this area and $599 price range sold (asking originally $660k), slightly better view but not outstanding over the lake. Anyhow my point is, if people are selling, shouldn’t the RE advice be to face reality, price aggressively, take your money and run?”… “If sellers are pricing too high because they haven’t realized yet what has happened to the market they are less motivated and aren’t going to sell anyway, so the realtors have to run around showing their place or beating the bushes for buyers, but there is no point until they sharpen up their price. If the seller won’t do that , they think the realtor just isn’t trying or somehow there’s a buyer there somewhere. Life was just do much easier for realtors when buyers thought they were going to get priced out and spent less time looking for and deciding on a house than they do a big screen tv. And sellers were so much happier thinking they had a $849k home that probably would sell than a $599k home that still isn’t selling. I am just really curious where these prices would actually be if sellers priced to sell and not to have their place sit there listed for 18 months.”

3 responses to “Okanagan – 2005 Prices; Selling Strategy In A Falling Market

  1. According to a realtor I know in the Okanagan, the market is dead this summer. And someone I know has a house listed for $398k…got an offer for $375k…and refused!!! Jeepers, I think they might end up chasing the market down.

  2. There really isn’t that much fog in the data. House prices are unsustainable over the long term as a home owner needs a massive income to service the mortgage. Everyone knows that mortgage rates are rising and will continue to rise, albeit maybe slowly, for some period of time yet. Clearly a “correction” is coming, call it a bubble if you want. And often when the market drops, it over-corrects on the way down before it reaches a balance. A buyer should be in no rush to purchase as they will lose a lot of after-tax money. A seller should price aggressively and get out. To sell now, rent and wait -maybe a year, maybe three or more, means to put yourself in a very good position once the market drops. For my two cents worth, I think the market in Vancouver and Victoria will drop 30% or more. To think otherwise may be very dangerous. If you think the market has a tinker’s hope going up more, you are really in trouble.

  3. We have a house for sale in Vernon with the intention to return to the lower mainland. Our home, purchased less than a year ago and after renos etc at the current price we will lose over 30,000…if we get an offer. As I watch other listings closely what I see is, it doesn’t really matter if a house is well priced, there are just very few buyers and those that have purchased in our neighbourhood have offered close to asking.
    I agree with the Real Estate agent in Vernon who wrote, sellers would be advised to list when the market has changed. The buyers market is created because there are too many lisings creating more supply than demand; same is true in reverse for a sellers market – more buyers than listings. the ideal is a balanced market which we have not seen in BC for almost 40 years.
    This is our 12th house since 1980 and we have had first hand experience with falling and rising markets. The concensus is always that prices can not go up further…but they always do eventually. Interest rates in the 70’s were over 10% which we would not hope for again no matter what the home price tag.
    Historically the RE market is full of valleys and peeks. In the past a valley and the following peek spaned several years whereas the current trend is yearly valley and a peek movement. The Bank of Canada announces each June its intention to increase interest rates. This year though the interest rate rose the mortgage rate went down in June and has edged up slightly since but still lower than the early part of this the 21st century when mortgage rates were over 6%. Many economists are blaming the HST in BC and Ontario for the latest economic crisis…

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s