experts: real estate column Monday, April 06, 2009

How It Should Be Done

Why would sellers contract the services of a Realtor when desiring to sell their home in the current market?

By Alan  Skinner

Why would sellers contract the services of a Realtor when desiring to sell their home in the current market? The answer, in general terms, likely follows this argument to obtain advice as to the current market value, advice as to timing, and advice as to how best to position the property (market it) to achieve a sale at the best price in a realistic period of time.

Now consider this actual case of a property which was marketed during the last two weeks of March this year. This West Van home is located in Gleneagles and has an Assessed Value of just over $3,900,000. The listing price agreed upon was $2,995,000 (almost $1,000,000 below the tax assessment). After 9 days and more than one offer, the property was sold for $3,050,000. The goal of achieving a sale and achieving current market value was met. The two Realtors concerned provided excellent advice and successfully delivered the desired outcome for their client. These are North Shore colleagues I respect and certainly "get it right" in advising the appropriate strategy in this current market.

Following this train of thought, please humour me as I dwell for a moment on a few of my favourite concepts supply and demand and market value. Not too 'Mary Poppins', I hope. Most accept as fair comment that a sale occurs when a willing buyer agrees upon a contract price and certain conditions (dates, deposit amount etc) with a willing seller. This constitutes the notion of market value. I know that I am not alone when I say that I find it intensely annoying when I hear of claims of property being offered for sale at terms such as "below market value" or, as a recent marketing campaign appearing in various publications including a number of full page ads in the Vancouver Sun, claims that you can "own a brand new home in Greater Vancouver for far less than market value". This is a fallacy as the foregoing (dare I say) "definition" clearly points out. If a group of buyers were able to negotiate prices "far less" than other willing buyers would pay, why would that seller ignore those willing buyers? Only, I propose, because those "other willing buyers" do not exist. Please don't get me wrong, I do applaud the developer who is clearly realistic enough to be offering those properties for sale at current market value (yes, at prices which may well be "far less" than another period's 'market value').

Next month we'll discuss our historically low mortgage interest rates!

Now the YTD 3mth 2009 vs. 2008 picture on our North Shore [first quarter of our "correction cycle" year] - North Van detached homes sold down by 45% from last year, attached (t/homes) down 43% and apartments down by 51% from '08. Detached average prices -25% and inventory Mar 31st, up by 48%. Average prices down 22% (t/hse) and down by 23% (apts). Inventory (t/hse) 41% higher than '08 and (apt) up from '08 by 14%. These higher inventories and evident lower demand continue to keep sales prices down.

In West Van, detached number of sales YTD has dropped, Mar 31st by 47% from '08. Average price down 24% and inventory Mar 31st up 24% over '08. On the condo side attached (t/hses) sold has dropped to 1 vs 15 units last year; average price down 35% - the average price of the 15 sold last year was $1,049,060 vs the single $675,000 sale to date in '09. Active listings are up from '08 (37 vs. 33). Apartments sold reflect 45% drop YTD vs '08; with average price down 21% and active listings up 77% from '08. Overall North Shore demand continues at a lower level with all inventories higher than this time last year. Activity (property showings and attendance at Open Houses) is however markedly up in the past month.

Thank you to the folk who have contacted me of late with comments, suggestions and input on the Update. This is truly appreciated. I estimate that we are up over double the communications occurring this time last year. A special thank you to Frank for his input and astute observations.

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




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Recent Articles by this columnist:

Keeping Realtors Honest
Tuesday, August 12, 2014


How well do we stack up?
Tuesday, July 29, 2014


Resistance to change and compliance delay
Wednesday, June 04, 2014


Of urban planning and municipal wisdom
Thursday, April 17, 2014


Yes, it's official - demand is rising
Tuesday, March 11, 2014


All articles by Alan  Skinner

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