Market Update - November 2018
Condo Market Update
There were 85 sales of condos in Richmond for November 2018, down 55% compared to November of last year, while active listings were up 56% over the same time frame. Compared to last month, Condo sales were down 31%, while the number of active listings were virtually unchanged at 627. Up until recently, Richmond’s condo market has held its value, but if supply continues to outpace demand, we can expect to see the price of Condos in Richmond to follow the trend of detached homes. The HPI Benchmark price of a condo in Richmond fell to $658,500 for November, down 6% from the all-time high in April of 2018, but still showing a year over year gain of almost 5% compared to 2.3% gains for Condos in Metro Vancouver.
It should be noted, that of those 85 sales in November 2018, only 10 were at or over asking, while the rest sold under asking price. If you are looking to buy or sell, these stats matter - contact Madeleine Wareing to find out more.
Detached Home Market Update
There were 51 detached properties sold in Richmond, compared to 59 properties last month (down 14%) and 75 properties in November 2017 (down 32%). Of these 51 homes, all but two sold under the asking price. The reality of Richmond’s detached home market is that prices are falling. This underlines the need to be competitively priced right from the start when you list your home. In a falling market, it is important to capture the current state of the market, or risk the market slipping further, requiring additional price adjustments.
Fun fact: Richmond’s detached sales this month included a float home which sold for $89,000. Float homes are considered as detached homes in the stats, but in general require regular monthly fees for moorage and hookups. In this way they are similar to a strata property, though the monthly fees are much higher, and additionally, they require much more annual maintenance. If you are considering a float home for yourself, let’s chat. There are many factors to consider, including financing, but if nonstop water views and the gentle rock of the sea speaks to you, perhaps we can get you into your dream home.
Outliers such as this example, as well as multimillion-dollar mansions are why we use tools like Benchmark Pricing rather than Average or Median pricing. Benchmark pricing is a model built upon what a fictitious home with average features located within a specific zone would sell for at a specific time. Benchmarks allow for better tracking of the market and eliminates the ‘noise’.
Townhome Market Update
The market in Richmond for townhomes has been favouring sellers the past few years, only recently entering a balanced/buyer’s market. Not coincidentally, benchmark prices for Townhomes in Richmond continued to rise, reaching peak levels in July. As prices rose, the number of active listings also rose, but actual sales have tapered off significantly. In November there were only 42 sales of townhomes, down 51% from the same time in 2017. There appear to be fewer active buyers willing to pay the prices demanded by sellers, HPI Benchmark Townhome price has dropped to 840,200 in November, and of 42 sales, all but 4 were under asking.
There is some seasonality to the number of listings, with many being pulled prior to the holidays. It is normal to see a decline in the number of active listings at this time, while homeowners enjoy time with family, before sprucing up their home and relisting in the new year. If you are curious what that means to you, call Madeleine at 604-809-5410.
In Richmond, Condos and Townhomes have held value more than detached homes.
Buyer vs. Seller’s Advantage
With over 15 months of inventory for sale, the Richmond house market remains in deep buyer’s market territory. With the power to negotiate prices down and ask for concessions, this continues to be great time to be a buyer of a detached home in Richmond. The continued power of Buyers over Sellers has shifted the market, with benchmark home prices having dropped 9% since the most recent high in March.
The market for condos is balanced, but trending towards a buyer’s market. With 7.5 months of inventory on the market, both parties have similar negotiating power.
Those looking to purchase townhomes are also in a balanced market, where just over 7 months of inventory.
In the real estate industry, there are metrics used to indicate when buyers and sellers have more negotiating power. As a rule-of-thumb, less than 5 months of inventory (i.e., homes for sale) means it is a “Sellers Market” and the seller has the upper hand in a price negotiation. When there’s more than 9 months of inventory for sale, it’s a “Buyers Market” and buyers have more negotiating power. The theory is that buyers know that it could take over 9 months to sell the home, so the seller should probably drop the price to make sure the buyer in front of them purchases the home, or they could potentially be having open houses and showings for 9 more months.
Now appears to be a good time to act if you are looking to sell your condo or townhome and move into a larger, single family home. Prices of condos and townhomes have held value so far compared to detached homes in Richmond, so acting sooner rather than later may help you transfer any gains towards a larger home. There are some interesting neighbourhoods in Richmond as well as in Ladner where you may be interested in purchasing your first detached home. If you would like to learn more, get in touch with Madeleine Wareing at (604) 809-5410