James Wong Richmond Realtor

Pre-sale buyers who are not able or willing to complete their contracts can be sued by the developers. Some of these buyers are leaving large deposits and walking away from sums as high as $40,000.

There is no accurate figure as what proportion of these pre-sale buyers are speculators. Some people in the industry estimate that as high as 70% of these pre-sale condo buyers could be speculators. With banks tightening on lending, some buyers are not able to get financing, while others simply no longer want to complete the deals.

"There's a lot people there to make a quick profit, and it backfired on them," said Mario Mainella, a vice-president at Bowra, whose firm is now contemplating legal action against some of those owners.

"The way most contacts are written, the developers can pursue a damages claim if the unit is sold for less than what it was sold for originally," Mr. Mainella said.

Read the full article here on "Cracks appearing in condo land".

Another recent report by Merrill Lynch & Co "Housing market ‘alarms' Merrill" quoted:

"Falling prices, overbuilding and too much unsold inventory in Canada are creating a trend similar to that in the United States a couple of years ago, Merrill economists David Wolf and Carolyn Kwan said in a research note.

Merrill made headlines recently with a report suggesting Canada's high household deficit level could make it vulnerable to a U.S.-style housing collapse".

Analysts agree that B.C.'s housing market is taking a beating, with sales slowing and inventory rising in the wake of global economic upheavals.

The extend of the price correction is opened to debate. Some are predicting a 30% or more price correction. The tight credit situation, cautious lending by the banks, over-extended borrowers, slumping stock market and over supply of housing units all will exacerbate the housing market.

If you are thinking of selling or buying, you need to know how best to deal with your situation. Not selling now could result in further erosion in the price you can get for your home. If you are buying, you need to know if you should wait a little longer or get ready and look out for a great deal coming your way.

For more insights on the current real estate market in Greater Vancouver, you an email me or call me at 604-721-4817 for a discussion.

Richmond Real Estate Pricing Trend

The most common question asked by home buyers on the value of a home is the relationship between current market price and the city assessment value of a property.

The market value of a detached home is affected greatly by the location, home condition, and improvements done to the house. Homes that are more desirable will command higher selling prices. The city assessment value being an aggregrate valuation of similar homes in the neighborhood, will not reflect the dsirability of a home to a buyer.

What can the city assessment value tells us?

The city assessment value being a previous year's value is a lagging indicator. City assessment value tends to be lower than the market value in a rising market. During the boom years from 2005 to 2007, the selling prices for most homes were found to be 12% to 15% above the city assessment values. Conversely, when home prices drop for a few months, the market values for homes sold may be lower than the city assessment values.

The following table helps to track the housing market values in relation to the assessment values.

Selection Criteria for comparison

The homes selected for this comparison were based on older homes located in West Richmond. The homes were over 25 years old and with lot sizes between 7,000 to 9,000 sq ft. These homes were sensitive to demand from home builders, and they helped to set the pricing trend based on builders' activities.

When home builders' were competing for building lots, they pushed up the selling prices for these homes. Up until April 2008, home builders were still actively buying up these older homes. These homes were torn down to be replaced by million dollar homes. Home prices for resale older homes peaked in the first quater of 2008.

Sample Size Limitations

The small number of sales registered for Jul-Sep/2008 could have skewed the comparison between market value and city assessment value. The average selling price showed a drop of around 8% compared with the previous 3 qaurters.

Market Value Vs City Assessment Value

The average city assessment value for Oct-Dec/07 was skewed by more higher valued homes being sold during the period. The average home selling price for the the first and second quarter of 2008 were 14% to 13% higher than the city assessment value.

From March 2008 onwards, declining sales and widespread price reductions had resulted in the average selling price for these homes in the Jul-Sep/08 quarter averaging just 4% higher than the city assessment value. With housing trend continuing its decline, home prices are expected to slide lower. It is likely that many homes will be sold below city assessment values.

We will continue to monitor and report on the pricing trend each quarter.

Current real estate news for metro Vancouver and Fraser Valley can be viewed here.

* Updated on February 13/2009 - homes sold at 7% below city assessment value by the 4th quarter of 2008.

Richmond Housing Trend from total sales recorded since 1998 reached the highest number of homes sold in 2005. That year, the total number of homes sold were 4,335 units with a monthly average of 470 units. The 2-year moving average trend line indicated sales momentum was slowing down in 2006 and 2007. The trend line as shown on the chart below (up to September 2008) showed that 334 average monthly sale was 12% lower than the 380 trend line units.

The September home price decline as reported for Greater Vancouver was around 8%. Richmond will follow the general market, and a decline in the median price can be expected in the next few months. There are no positive news in the market and BC economy that will help to reverse this housing price decline.

Tracking The Sales

The July, August and September 2008 sales figures at 287, 178 and 234 units respectively were way off the mark, and fell to the 1998 to 2000 sales figures. Current market sentiment has changed dramatically from last year, and buyer confidence is lacking. More bad news are expected from the housing market. The media are expected to continue reporting the bad news, and the housing market will continue to adjust to current over-supply and dwindling demand from home buyers.

Prices Are Dropping

The housing market in Greater Vancouver is now in a buyer's market. Prices are trending down and there are many great buying opportunities for home buyers. Many sellers have reduced their asking prices to sell their homes. Those that are reluctant to reduce their selling prices and priced their homes according to today's market, will have a tough time selling their homes. Many areas are already reporting home prices coming down by as much as 10% to 15% compared to 2007 home prices.

Should You Buy Now?

You should position yourself to make a quick move if and when you can get a great deal. There are definitely many more buying opportunities now. Whether you should buy now or wait a little longer depends on your own comfort level. You should watch the market closely. Only when you are feeling comforatable with the market, you make your move to buy.

For more information on the market, you can contact me at 604-721-4817 or email me.

Richmond BC Real Estate

Declining Market

Since April, 2008, home sales activities in Richmond dropped significantly. Home prices were trending down as there were more sellers than buyers in the market place.

Another housing market tracking and pricing charts presented by Brian Ripley showed that Edmonton's home prices peaked in May, 2007 and Calgary followed in June, 2007. Vancouver's top was recorded in June, 2008 and since then prices had been declining significantly for July, August and September.

The price correction will continue until demand picks up. This will happen when prices reach a level when home buyers are feeling comfortable to get back into the market.

Presently, Richmond inventory is still very high, with around 11 months supply of homes. Unless sales improve or the number of listings drop significantly, the list/sale ratio will take a while to reach a more balance market... around 6 months inventory.

Data from Real Estate Board of Greater Vancouver

Market Update

Greater Vancouver housing sales were down 43.2% in September from a year earlier, while the average sale price dropped 8% to $535,598 over the last year.

Greg Klump, chief economist with CREA said "As the Canadian market continues to cool, houses will stay on the market longer. Canadian sellers are not under financial duress to sell so many will just pull their homes off the market if they don't get their price and that will result in a continuing decline in listings.

Canadian homebuyers should not expect to see the kind of price correction that's underway in the U.S. where overly indebted homeowners are selling into a housing market where foreclosures and the number of newly constructed unoccupied homes are increasing."

Click here to read the article.

What you should do in a buyer’s market?

If you are a seller, you have to be realistic with your expectation and adapt to the market. You need to know the sales and inventory in the market place. Before you list your home on the market, find out how many months an average home takes to sell, and monitor the market activities closely.

If there are 2,500 properties on the market and 250 are selling, only 10% of the properties are selling for the month. Your home has to be at the top 10 % in the marketplace in order for your home is sold. When there are 10-month inventory in the market, your home priced priced similar to other homes will take 10 months to sell.

So, to sell your home in a buyer’s market, it has to be priced right and marketed well. A well-priced home get sold more quickly. Click here to find out how I can help you sell your home in 30 days or less.

If you are a home buyer, you need to know whether the home you are buying is a good buy. This could be a good buying opportunity as there are more choices, sellers are more motivated to sell and home prices are more attractive now.

For more information on the real estate market in Greater Vancouver, and Richmond Vancouver and Burnaby in particular, you can follow my blog postings here.

Mellinium Water Vancouver's Olympic Village - Trouble Ahead?

As the credit crisis south of the border begins to creep north, concerns are mounting over the impact it may already be having on construction of the athletes' village for the 2010 Winter Games.

Last week, members of Vancouver's city council held an emergency, in-camera meeting to get an update on the project. Much of the discussion revolved around the city's obligation in the event the developer, Millennium Development Corp., can't meet demands from the bank because of massive cost overruns, according to sources briefed on the meeting.

Click here to read the full article.

Another article in the Vancouver Sun "2010 Games in Crisis" raised concerns that B.C. taxpayers could be on the hook for about $1.5 billion.

Just a week ago, Denis Du Bios on October 03, 2008 published in Energy Priorities a glowing report "Vancouver 2010 Olympic Village" as a model for urban sustainability.

This South East Fales Creek land - once a mishmash of shipyards, sawmills and municipal incinerators had many past controversies. NANCY MACDONALD at Maclean's Magazine published on November 19, 2007 "New Condo Will Double as Vancouver's 2010 Olympic Village" gave an account on the project when the condos were released for sale in October 2007.

For more information on Millennium Water Condos, kindly contact James Wong at 604-721-4817 or email me.