Welcome To A New Year/New Order?

Welcome to a new year/new order?

As I started analyzing the YTD ’08 vs YTD ’07 figures attempting to come up with something meaningful, I got a call from one of the folk who regularly receive my e-mail update questioning the Vancouver Sun article (Jan 6) entitled “Real Estate sales slide more than one third in 2008”.

Two concerns emerged – i) disbelief that the value of his home could possibly have dropped by over a third and  ii) that the Tax Assessment notice received the day before clearly contradicted the headline. We had a lengthy discussion and I asked if he’d mind my using his questions (and conclusions) in this Update – not disclosing his identity. He kindly agreed.

Firstly, the “more than one third” referred to the number of sales ’08 vs ’07 for Greater Vancouver (that mixed herd of properties including Whistler ski lodges, downtown investment condos, Tsawwassen waterfront mansions, cabins in Indian Arm, co-ops in Coquitlam, building lots in Maple Ridge etc…  pardon my attempt to drive home the diversity of “products” in this supply/demand bag). As an aside, I find it very interesting that most markets (e.g. stock market, commodities etc) don’t dwell on the number of deals (or sales) but rather the resulting ‘supply/demand’ transaction value.

Who should care if  I choose not to accept an offer on my home and if others choose not to buy current offerings. Only the “value” established by the willing seller/willing buyer is meaningful – the number of transactions is simply a product of supply/demand factors.

The Tax Assessment value on the other hand is nothing more than a somewhat imperfect attempt to ascribe a relative value to the individual pieces of the property stock of the province by the Provincial Government in the form of the B.C. Assessment Authority. The more pertinent issue here is “are we paying a fair proportion of the local municipal tax budget?”  It seems evident and somewhat amazing that well over 50% of taxpayers feel they are shouldering an unfair proportion of that budget. All that one can hope is that the owner of a property that would sell for $500K pays roughly half of the tax paid by the owner of the $1MM one. Otherwise an appeal of that assessment based on verifiable evidence may be in order.

What do we know for sure? …. Clearly there is a drop in that magic level at which one’s home would have sold at the height of the Vancouver market (Mar/May ’08 ??) and a sale today. AND equally clearly there is a (fairly significant) increase in what one would have sold one’s North Shore home in early 2006 vs early 2008 (estimates would place this at  anything from 15 to 25%).  The actual 2008 drop is difficult to ascertain with any accuracy but I’ll go out on a limb and guess that it may be in the 10 to 20% range. Some homes could be higher/lower based upon prevailing supply/demand factors and specific variables such as condition (maintenance) or urgency of sale. Remember that the relatively few sales we are seeing in the Oct-Dec stats likely have the ‘must or need to sell’ group over represented.

The question is oft repeated “what would my home sell for if I had to sell it now (say by end of January)?” My advice, at the risk of appearing facetious, is “don’t think about it” unless you absolutely have to sell now OR if you are wishing to “trade up”. It is as academic a question as…”what would my house have sold for in Mar/May ’08 with low inventory and high demand”. This masochistic negativism will only depress you! We are in the throes of an inevitable cyclical correction exacerbated significantly by international economic ills (largely US initiated). What we do have in spades though is a major dose of pessimism regarding the immediate future. I’ve heard this “buyers’ market” described as one in which very few buyers have any conviction to buy. As I’ve noted before, the fact is that nobody really “has to” buy. Douglas Coupland’s commentary in a recent Globe and Mail article is particularly pertinent – it’s entitled ‘Gloomageddon’ and the article’s byline is “What’s extraordinarily different with this downswing is society’s collective neural response to it”. View it at

http://www.theglobeandmail.com/servlet/story/../specialComment/home   –  well worth some considered thought.

After the foregoing, I believe that wishes for a Happy New Year are all the more important,  as is a personal belief that we must not succumb to the “Gloomageddon factor”.  Positive thinking for a positive year!

 

Again, visit my website to see and “hear” the new developments.  Continue my commitment to keep you…www.OnTopOfTheMarket.ca – the “go to” site for North Shore Real Estate analysis and jumping off point for FULL market listing information.

 

To join the group getting the e-mail version of this “update” – send a request now to alanskinner@shaw.ca and you’ll be assured receipt; phone me at (604) 988-7368 or visit www.OnTopOfTheMarket.ca

January 09 Numbers

January 09 NumbersNow to the full 2008 vs. 2007 picture (on our North Shore, that is)  – North Van detached homes sold down 30% from last year

attached (t/homes) down 32% and apartments down by 36% from ‘07. Detached average prices +8% and inventory Dec 31st, up by 227%. Average prices up 5% (t/hse) and up by 3% (apts). Inventory (t/hse) 226% higher than ‘07 and (apt) up from ‘07 by 38%. This relatively high inventory and low demand will continue to keep sales prices down.

n West Van, detached number of sales has dropped by 38% from ‘07.  Average price up 5% and inventory Dec 31st up 73% over ‘07. On the condo side – attached (t/hses) sold are down 20% from 2007 at 49 vs 62 units; average price down 11% YTD. Active listings are down from Dec ‘07 (31 vs. 35).  Apartments reflect 135 sold vs. 205 during ‘07; with average price up 6% from ‘07 and active listings up 101% from Dec ‘07.  Overall North Shore demand since about September has been sluggish with inventory significantly higher than 2007.  Yes, folks, the average prices for ’08 vs. ’07 are still up in all segments except for the “small sample” t/hses in W/Van

 

After the foregoing, I believe that wishes for a Happy New Year are all the more important,  as is a personal belief that we must not succumb to the “Gloomageddon factor”.  Positive thinking for a positive year!

 

Again, visit my website to see and “hear” the new developments.  Continue my commitment to keep you… www.OnTopOfTheMarket.ca – the “go to” site for North Shore Real Estate analysis and jumping off point for FULL market listing information.

 

To join the group getting the e-mail version of this “update” – send a request now toalanskinner@shaw.ca and you’ll be assured receipt; phone me at (604) 988-7368 or visit www.OnTopOfTheMarket.ca

Podcasts

North Shore Real Estate Radio

This year I pledge to continue my personalized service and further reduce my business ecological “footprint”. A new initiative is the radio (podcast) library which I am creating.

All North Vancouver Real Estate “Updates”, reports and information articles, checklists etc. will be archived on my website and available for download or desktop listening 24/7. You can access the information you seek when the spirit moves and not when someone pushes yet another flyer into your mailbox. I am most excited about these developments. Input as to the topics for “programming” you feel would be of interest is strongly sought. Please e-mail This email address is being protected from spam bots, you need JavaScript enabled to view it or call me 604 988-7368

Click on the “Launch Podcast Player” Icon in the top right of this website to listen now

North Vancouver Real Estate

Podcasts

8 Costly Mistakes When Selling Your Home

8 Costy Mistakes When Selling Your Home

8 Costly Mistakes when selling your home.
Basing asking price on needs or emotion rather than market value. Often sellers base their pricing on how much they paid for or invested in their home. This can be an expensive mistake. Ifyour home is not priced competitively, buyers will reject it in favour of other larger or better homes for the same price. At the same time, the buyers who should be looking at your house will not see it because it is priced over their heads. The result is increased market time, and even when the price is eventually lowered, the buyers are wary because “nobody wants to buy a house that nobody else wants”. The result is low offers and an unwillingness to negotiate. Every seller wants to realize as much money as possible from the sale, but a listing priced too high often eventually sells for less than it might have.Failing to “Showcase” the home. A property that is not clean or well maintained is a red flag for the buyer. It is an indication that there may be hidden defects that will result in increased cost of ownership. Sellers who fail to make necessary repairs, who don’t spruce up the house inside and out, and fail to keep it clean and neat, chase away buyers as fast as Realtors can bring them. Buyers are poor judges of the cost of repairs, and always build in a large margin for error when offering on such a property. Sellers are always better off doing the work themselves ahead of time.

Over-improving the home prior to selling. Sellers often unwittingly spend thousands of dollars doing the wrong upgrades to their home prior to attempting to sell in the mistaken belief that they will recoup this cost. If you are upgrading your home for your personal enjoyment – fine. But if you are thinking of selling, you should be aware that only certain upgrades are cost effective. Always consult with your Realtor BEFORE committing to upgrading your home.

Choosing the wrong Realtor or choosing for the wrong reasons. Many homeowners list with the agent who tells them the highest price. You need to choose an experienced agent with the best marketing plan to sell your home. In the real estate business, an agent with many successfully closed transactions usually costs the same as someone who is inexperienced. That experience could mean a higher price at the negotiating table, selling in less time, and with a minimum amount of hassles.

Using the “Hard Sell” during showings. Buying a home is an emotional decision. Buyers like to “try on” a house and see if it is comfortable for them. It is difficult for them to do this if you follow them around pointing out every improvement that you made. Good Realtors let the buyers discover the home on their own, pointing out only features they are sure are important to them. Many sales are lost by overselling. If buyers think they are paying for features that are not particularly important to them personally, they will reject the home in favour of a less expensive home without the features.

Failing to take the first offer seriously.Often sellers believe that the first offer received will be one of many to come. There is a tendency not to take it seriously, and to hold out for a higher price. This is especially true if the offer comes in soon after the home is placed on the market. Experienced Realtors know that more often than not the first buyer ends up being the best buyer, and many, many sellers have had to accept far less money than the initial offer later in the selling process. The home is most saleable early in the marketing period, and the amount buyers are willing to pay diminishes with the length of time a property has been on the market. Many sellers would give anything to find that prospective buyer who made the first, and ONLY, offer.

Not knowingyour rights and obligations.The contract you sign to sell your property is a complex and legally binding document. An improperly written contract can allow the purchaser to void the sale, or cost you thousands of unnecessary dollars. Have an experienced Realtor who knows the “ins and outs” fully explain the contract you are about to sign, or retain a lawyer to review it before acceptance.

Failure to effectively market the property.Good marketing opens the door that exposes the property to the marketplace. It means distinguishing your home from hundreds of others on the market. It also means selling the benefits, as well as the features. The two most obvious marketing tools (open houses and print advertising) are only moderately effective. Just 1% of homes are sold at open houses, and advertising studies show that only 3% of people purchased their home because they called on a print ad! Agents use these tools to attract future prospects, not to sell the house. The right Realtor will employ a wide variety of marketing activities, emphasizing the ones believed to work best for your home.

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