“Colleague at work bought a new 2BR 1200 sq ft townhouse in North Delta (Van suburb) for $330K. Now has 2 kids under 3 and has decided said townhouse is too small for his growing family; they want to rent for a couple of years and then “vultch” a house after prices have come off current peaks. Back in March this year he listed his place at $399K. On the market for a couple of months, only one serious offer, I believe $379K or so, they turned down that “insulting lowball offer”. Pulled the listing to try again later in the year.
Re-listed after Labour Day — this time at $409K. I know, why do they list (doesn’t sell), pull, then re-list later at a higher price?! Well, here is his and his realtor’s reasoning: felt in part that the place didn’t sell/attract offers last time for what it was “worth” because they had low-balled on price and therefore were attracting the “wrong perspective buyer” and were cheating themselves out of a deal at what the place was really “worth”. This is how these people think! And my colleague has a math and accouting background, totally understands numbers……
The townhouse is still on the market today — price drops to $405K, $399K, and currently $389K have not attracted any offers. Some young-ish couples have I gather expressed an interest in the high $370s (the price they poo-poo’d in March!), but in all cases (3-4 times I think), the parents of those folks, who are apparently ponying up the downpayment money, have said they think the price is too high for the location — specifically, within a block or so of a major arterial highway (which one might think would be a selling point given the traffic in the Van area – my colleague’s place does not actually hear traffic apparently).
There are so many units listed, buyers do really have a lot more time and options to shop around. I did try to talk to my colleague (he asked for my view as he knows I follow the RE market, even though I am a renter!) about getting ahead of the price reduction curve, to avoid chasing the price down, languishing on the market and STILL not getting a deal…. when it didn’t get any sniffs back at $409K, I said, given what he had told me about last March’s experience — drop the price to $379K, you want to sell, something “drastic” like that could precipitate an offer, multiple offers maybe and perhaps a price in the low $380s? He does have significant equity in the place about a third, depending on what the place actually is “worth”, so he is not at risk of being underwater….needless to say, he did the slow water torture price changes instead…..
I think he will be lucky to sell in the $360s…. and if this goes on until the spring, which it looks like it will if he is still listed, he will be looking at something in the $350s or even lower….which with breaking the term on his mortgage and paying the commission and transactions costs will leave him at net proceeds likely below what he got in at…he bought new in spring 2009…he is very frustrated that he can’t get a sale, but does not think that the problem is price! He thinks he just hasn’t found the right buyer yet…..”