James Wong Richmond Realtor

Condo buyers are faced with the question whether this is the right time to buy a downtown Vancouver condo. What is certain is that prices have definitely come down. While selling prices are expected to continue to decline, it is difficult to know when will condo prices hit the bottom. If you feel comfortable buying, you can then commit yourself to look for the condo you like.

Up until the spring of 2008, the demand for Vancouver condos remained strong. Condos in downtown Vancouver continued making price gains through 2007 and the first 3 months of 2008. Since then, the real estate market ran out of steam and sales took a dive in April, 2008. Demand for condos in downtown Vancouver dropped significantly in April, 2008 and continued into May and June, 2008. By July and August, condo sales were down as much as 40% compared with the previous year.

Prices Are Dropping

The condo market in downtown Vancouver is now in a buyer's market. Prices are now trending down and there are many great buying opportunities for condo buyers. Many sellers have reduced their asking prices. Recent sales of 1 bedroom and 2 bedroom condos were found to be down by as much as 10% to 15% as compared to similar units sold at the end of last year.

Should You Buy Now?

You should position yourself to make a quick move if and when you can seize a great deal. If you missed the opportunity to buy in 2006 or 2007, you should get yourself ready to jump at some great buying opportunities. For many buyers, the attraction in of Downtown Vancouver is the proximity to all the interesting events and activities only Vancouver City can offer. If you work in Vancouver City, this may be your chance to get into the market as you can buy your condo at a reasonable price now.

Why Commute When You Can Live In Downtown Vancouver?

Commuting from Richmond or Burnaby to downtown Vancouver will take over 30 minutes daily - Monday to Friday. The time spent commuting, or if you own your car... the cost of gas, maintenance, parking and financing add up quickly. You can ditch owning a car and use the money for your mortgage and live a lifestyle you compromised for owning a car.

Although Burnaby and Richmond are good alternatives for most condo owners, why go for the second best if you can afford the best. You do have the option now with so many great buying opportunities around downtown Vancouver.

A Second Look At Living In Downtown Vancouver

Condos in Burnaby and Richmond offer amenities like storage lockers and parking stalls. These amenities may have to be scarified in exchange for living in downtown Vancouver. When you compare the selling prices, condos in Richmond and Burnaby are not much cheaper than those in Downtown Vancouver.

Paying around $500 a sq ft for condos in the City of Vancouver is doable. When the pros and cons of living in downtown Vancouver City is compared with other metro Vancouver cities like Burnaby and Richmond, it makes sense to live in downtown Vancouver.

Higher Rental Rates In Downtown Vancouver

The attractiveness of Downtown Vancouver can be illustrated by comparing rental cost - rental in downtown for a new d1 bedroom is around $1600 to $1,900. For similar condos in Burnaby and Richmond, the rental is between $1,400 to $1,500. So for about the same price, you a getting a better deal buying in Vancouver City.

There are some very attractively priced resale new condos available for sale at Spectrum Towers, near to GM Place Stadium. Click here to read the story about the Spectrum project.

For more information on buying a 1 bedroom or 1 bedroom + den condo at Spectrum at prices from $295,000 to $350,000, kindly contact James Wong at 604-721-4817 or send me an email.

Housing Marlet Update From England

"The fall in house prices has accelerated in England and Wales, according to the Land Registry".

Its latest report shows that prices fell by 1.9% in August, taking the annual rate of price deflation to 4.6%.

The figures mean that the average property now costs £174,493; £8,320 less than a year ago, with £3,871 of that drop occurring last month.

Prices in London fell by 3.2%, the first monthly fall since the Registry started publishing its figures in 2000.

Read the full report here ...

Asset Price Deflation?

Canada had been experiencing a low down in residential real estate sales for the past 5 months, with many provinces registering price declines year-over-year. This trend on real estate price decline that started in the USA, has spread over to Australia, New Zealand, UK, Spain, Turkey and other countries.

Over Supply Of Condos in BC?

Canada may be able to withstand the price decline better than the US and UK. The extend of the price correction eventually is determined by the supply-demand by home buyers. With the large supply of homes currently available for sale, coupled with huge price gains over the past 6 years, double digit price correction may be expected.

In BC, the biggest build-up in inventory is multi-family condos and townhomes developments. The slowing down in sales for resale new condos in Downtown Vancouver is now showing up in price weaknesses. One bedrom new and near new resale condos at Spectrum Towers that sold for $350,000 to $360,000 last year can now be bought at $290,000 to $320,000 range.

Good Time To Buy Now?

If you are planning to buy a condo, this can be the best time to start looking at the deals available around you. You may be lucky to buy a Downtown Vancouver resale new or almost new condo at $500 per sq ft or less. There are many condos that are priced significantly less than their selling prices a few months ago.

Please contact me at 604-721-4817 for more information on finding a great deal in downtown Vancouver. Or send me an email me on available condos for sale in Downtown Vancouver.

The following table summarized the August sales of condos in Richmond:

At the beginning of 2008, Richmond's housing market was strong, registering list/sale ratios at around 4 months. Since April, the collapse in the real estate market in B.C. had resulted in Richmond's list/sale ratio increasing to 12.8 months in August.

The housing market is now a Buyer's market. There were many media articles in the past few months that could have contributed to many home buyers staying on the sideline.

The above analysis showed that the fastest selling condos in Richmond were those priced under $300,000.

Affordability could be the main reason for these lower priced condos accounting for more than 50% of the total condo sales. Condos priced in the $400,001 to $500,000 registered the higherst list/sale ratio. These condo sellers will have to price their condos accordingly to attract buyers.

Sales By Age Group

When the age group was analyzed, the following interesting data emerged:

The data showed that there was a large supply of new condos under 2 years old - around 33% of the total condo listings.

The sales for condos under 3, 5 and 10 years old all were exceeding 16 months. For a condo seller, this is as good as facing a 6% chance of selling his or her condo! The alternative for condo owners who are not prepared to reduce their prices to sell, is to rent out their condos until sales pick up.

Will condos in Richmond return to a balance market?

A balanced market is when the list/sale ratio is around 6 months. This will only happen when sales pick up and double the present sales from 77 to 164 units a month. This may only happen when more buyers are getting back into the market. This may not happen unless condo prices declined significantly.

during the height of the housing boom in Richmond, the average sales for condos in 2006 and 2007 were 167 and 171 units per month. Not only prices have to be more affordable, the minimum 5% down payment requirement for CMHC hig-ratio financing effectively eliminated many first time home buyers from getting into the market.

Over Supply Of New Condos

Based on the current new developments coming on stream, and the large over-hang of condos for sale, the market is flooded with too many condos and not enough buyers. It is inevitable that condo prices will be under a lot of pressure to come down.

How far prices will decline is anybody's guess.

The collapse in condo prices has not happened yet in Richmond in spite of the past 4 months huge drop in unit sales. The prospect is not looking good as financial problems in the US and elsewhere will likely spill over, dampening consumer confidence in Canada.

Multi-family high-rise and low rise projects in Richmond

Click here to view the various new condo projects under construction in Richmond. Currently Prado is reported to be offering 5% discount to limited number of buyers. The offer is for 10 condos on first come first serve basis, and buyers can select their own condos at the published selling prices for the units.

The Flo by Onni are entertaining buyers' making their offers on the selling prices for the remaining units. The MLS sales over the past few weeks showed that some of the remaining condos at Garden City Residences On a Park that were "competitively priced" were selling well.

What to expect when developers are clearing their condos?

The time will come when developers are forced to sell off the remaining condos they own. There will be incentives, discounts or the GST being absorbed in the selling prices for new condos as happened in the last housing downturn in 1995.

This will obviously pose a problem for buyers who bought at the developer's prices. Effectively, some of them are already losing 5% of their condo values while these condos are still under construction.

We will continue to monitor and post our findings on Richmond's housing sales and pricing trends in the coming months.

NOTE: This representation is based in whole or in part on data generated by the Real Estate Boards of Greater Vancouver

The following table summarized Richmond's August sales:

Detached Home Sold In Richmond - August 2008

An analysis on the types of detached homes sold in Richmond revealed some very interesting data.

It can be seen from the sales summary here that detached homes under $650,000 formed 45% of the detached homes sold for the month.

About one-quarter of the homes sold were mid-level homes between $650,000 to $800,000 price range.

The higher priced excutive homes over $800,000 accounted for about one-fifth of the single family homes sold. Those between $800,000 and $999,999 made up just under 10% of the homes sold. The million dollar homes accounted for 11% of the total detached home sold for the month.

Typical detached home $500,000 to $650,000

Better value detached home $650,000 to $800,000

Executive detached home $800,000 to $950,000

Million dollar new detached luxurious home

Trading-up Market Opportunities

The slower sales for detached homes and high number of homes listed for sale in Richmond is showing around 18 months of supply. This will put pressure on selling prices, a drop in the median price for detached homes.

For home owners who are trading up, this is a good time to seriously consider a move. More homes were sold under $650,000 as the demand for homes in this price range is the highest. A home owner whose price is in this range will find it easier to sell his or her home.

In a soft market, higher priced properties takes longer to sell as can be seen from the data below. The probability of a move-up home buyer negotiating and buying a home at a good price is high. In a seller's market, sellers will be reluctant to make the price concession to sell their homes.

Solving The Dilemma - Sell Or Buy First

The advice any experienced Realtors give to their clients is to act decisively on preparing the home for sale, and at the same time looking out for the right home within the price range.

The basic requirements to sell a home fast have to be followed... price right, prep the home in tip top selling condition and have full market exposure to sell the home.

The Reasons For Trading Up In A Buyer's Market

A buyer's market present an excellent opportunity for a trade-up home owner to buy a better home in a more desirable neighborhood.

If the market price has dropped 10%, a home that previously can be sold at $650,000 will now sell for $585,000. The a list/sale ratio around 8.4 months, makes selling at this price range easier. For homes over $800,000, the supply demand ratio at around 22 months is much higher, and takes much longer to sell. Home sellers are more inclined to drop their prices more than 10% to find buyers.

Should You Make The Move?

You should discuss your options with your local Realtor whether trading up make sense to you. If moving to a better home in a more desirable location is feasible to you, your have better opportunities to do so in a buyer's market. For details on how you can make this possible, you can contact James Wong 604-721-4817 at Sutton Realty West Coast or email me.

NOTE: This representation is based in whole or in part on data generated by the Real Estate Boards of Greater Vancouver

Richmond welcomes Microsoft Canada Development Centre

Microsoft's software development centre is located at Crestwood Corporate Centre in Richmond BC. The Microsoft Canada Development Centre will focus on software development and will eventually employ 700 highly-skilled and well-paid workers from around the world. The centre consisting of two buildings totalling 80,000 square feet in the Crestwood Corporate Centre.

Crestwood Business Park

The Crestwood Business Park is acknowledged as one of the leading business parks in the Greater Vancouver area. Richmond is already home to some of Canada's leading international technology firms including MDA, Sierra Wireless, Sage Software, Ventyx and McKeeson Medical Imaging. The addition of Microsoft will ensure Richmond continues to develop as a nexus for technology industries in Western Canada and the Pacific Northwest.

Why Richmond?

The main reason for Microsoft establishing its Software Development Centre in Richmond is as a result of a cap on working visas for the skilled workers required by Microsoft. The Microsoft jobs are in computer software development, requiring the specialized skills of designers and programmers that are in high demand around the globe. Read here for a write up on why Microsoft chosed to locate its Canada Research Centre in Richmond B.C.

In addition to location and access to global markets, Microsoft cited quality of life for its employees as an important consideration in its selection of Richmond. A modern city with a full array of recreational, cultural and commercial amenities, Richmond was recently named as "Canada's Healthiest City" by Canadian Living magazine and is one of Canada's most culturally diverse cities.

Real Estate Values and Microsoft

The presence of Microsoft's employees in Richmond has a direct effect on the real estate values in Richmond. The additional demand from Microsoft's employees and their families for housing will boost rental rates. For those who want to own instead of rent, they will add to the pool of home buyers for Richmond.

Some Microsoft employees may apply to become permanent residents in Canada. These skilled workers will add to the skilled immigrants Canada is trying to attract under it's present immigration policy guidelines.

Rental Rates Heading Higher

The rental rates for new condos in Richmond jumped substantially by 30% to 50% from 2 years ago. It was reported that relocation companies involved with finding accommodations for Microsoft's employees were reported to be offering up to $1,500 a month for a 1 bedroom new condo. The higher rental rates are partly the result of the doubling in real estate prices over the past 6 years.

The planned developments and densification of Richmond City Centre in conjunction with the Canada Line Skytrain system connecting Richmond to Vancouver City is an important factor contributing to the strong new Condos market in Richmond.

New Condo Prices Are Holding

In spite of the slower real estate market in Richmond over the past 4 months, higher rental rates are helping to support new condo prices at the $450 to $550 per sq ft level. Currently, investors are able to rent out their new 1 bedroom condos at $1,300 to $1,500 and $1,600 to $1,800 for their 2 bedroom condos. These rental rates are sufficient in helping new condos holding to their prices.

The effect of the financial market meltdown in the US in recent weeks will definitely dampen the real estate market in British Columbia. The extend of the US down turn and stock market decline may only be known on a much later date.

If you like to have more information on buying a home in Richmond, you can contact James Wong 604-721-4817 or email me.