James Wong Richmond Realtor

The sales of older homes in Richmond Seafair follow the market trend for Richmond. Home prices in the area reached the peak around the end of 2008. The soft housing market in Richmond in early 2009 had resulted in home prices in the Richmond Seafair area declining significantly.

Click here for the latest Richmond housing market update.

The homes selected for the above study were based on homes that were over 25 years old and with lot sizes between 7,000 to $9,000 sq ft. During the period form 2001 to end Nov/2008, the monthly average sale for old homes in prime locations was around 36 a month.

Home Prices Declining Since May/2008

The drop in demand for these older homes since May, 2008 had resulted in significant price reductions by home sellers. Homes similar to those previously sold at $600,000 to $650,000 are priced much lower now.

There are some homes in the Seafair area being priced at the $500,000 range now. There were 2 recent sales in this area that were done at $450,000 to $488,000. The soft housing market is expected to continue into next year, and home prices are likely to continue the decline.

Rental Income & Cap Rates

Buyers interest is epected to improve when home prices become more attractive. An acceptable price range is when investors are able to buy revenue properties at 4.5% to 5% cp rates. Current gross yearly rental income for these homes is around $21,600.

Based on investors expectation of 4.5% to 5.0% cap rates, buyers will become more active when the selling prices for these homes are in the $432,000 to $480,000 range.

If you like to have more information on homes for sale around Richmond Seafair area, you can contact me at 604-721-4817 or email me.

This could be the best time buying your ideal home. The current real market is adjusting to the uncertainty in the market place. The market has changed from the go go years to an unusually slow buyer's market. Seller expectations are now tempered, and more willing to look at your offer.

In the two previous downturns, one in the 1980s and the second one in 1994 to 2000 the market factors affecting sales were different. We now have low interest rates, and reasonably positive economy and low unemployment rate. Home prices are now 10% to 12% lower than those at the end of last year.

More Chocies

We have much more inventory on the market now than we have had in the past and sales have drop off a cliff. Now, may be a great time to invest in real estate because of the low interest rates, lower prices and a low vacancy rate.

For home sellers whose home prices had doubled in price over the past 7 years, the recent price adjustment of 10% to 12% is not such a big deal. If you are buying and selling in the same market, it doesn't matter if you sell at the absolute peak or purchase at the absolute bottom.

Home Ownership

The reasons for buying and selling houses continue, and home owners will continue to sell or buy depending on their circumstances. The market goes up and it goes down. It's up to each of us to take advantage of each swing.

The market now has a lot more choices for home buyers. You have a better chance of finding the home you like and at a price you can afford. If you are comfortable with your own finances and the home is the right one for you, then buy it. It is your home you live in and enjoy with your family. It does not matter if home prices go up or go down as over a time period you build equity through home ownership.

If you are looking for the latest Metro Vancouver housing market information or like to view homes for sale on the MLS system, visit my website at www.james-wong.net. Or, search for homes listed for sale using the Google MLS Listing Search below:

The reasoning for trading up in a down Richmond housing market is best summed up by Sebastian Albrecht, a Vancouver Realtor at Royal LePage Westside.

The housing market in Richmond is similar to the markets in other Greater Vancouver Municipalities. Home prices had come down by 10% to 12% from the peak towards the end of 2007.

Trading Up

Obviously, you must have the need for trading up to a newer or larger home, a better neighborhood and you can afford to make the move.

If you are in a similar situation wondering whether you should trade up, the post helped to explain why you should do it:

"Not only is our young couple saving money, they are also more likely to find the home that they want in this market. There are lots of choices and you have the luxury of finding the right home for you in this market. That’s not a luxury you’d have in a seller’s market".

You can read Sebastian's full article here.

Richmond Housing Market

You can view the most recent sales and pricing activities in Richmond by following my on-line real estate postings on Richmond Housing Report.

If you like to have more information on buying or selling your home in Richmond, you can contact me at 604-721-4817 or send me an email.

CMHC predicts shallow real estate correction

The correction in Greater Vancouver and British Columbia real estate markets should be shallow, according to Canada Mortgage and Housing Corp., provided the province maintains projections for weaker economic growth and doesn't go into a full recession.

CMHC released its fall market forecasts Thursday, which predict lower housing sales to the end of 2008 and on through 2009, with price declines to the end of 2009 in the range of seven per cent provincially and nine per cent in Metro Vancouver.

Read the full article here.

What I think:

Month-over-month housing price trend

Recent month's home selling prices had dropped significantly. The price decline for Greater Vancouver going forward on a year-over-year could be as much as 10% to 12%.

Most of the homes sold the past 3 months registered heavy price discounting from prices recorded in early 2008. Some home prices are now listed for sale at 2007 level. In general, the average price could have dropped 10% to 12% from the peak.

CMHC's projection for 9% drop in price for Metro Vancouver could be too optimistic as current market sentiment is pointing to a larger drop in home prices. The drop in price for 2009 is likely to be in the range of 12% to 15%.

Canada's Economy & Employment

The anticipated US recession will affect Canada's economy and employment. The slow down in construction activities and loss of manufacturing jobs in Canada will impact consumer confidence.

Speculative home purchases pushing up home prices the past 3 years will work in reverse. Speculators and home sellers will unload their investments, pushing home prices down in 2009.

Market value vs city assessment value

Many homes sold in the past 3 months were selling below the city assessment values. Average selling price as compared to the city assessment value dropped from around 13% the 2 previous quarters to 4% in the third quarter of 2008. Further price erosion will result in Metro Vancouver homes selling at or below city assessment values.

There are some good buying opportunities in today's market. You need to find the real good deals with the help of your local realtor.

Whether you are planning to trade-up, trade-down or buying your first home, you should discuss your needs with your realtor. You can get the latest real estate market information by following my monthly real estate market up-date.

You can email me if you have any questions on your real estate needs.