Community Snapshot – Coquitlam

Community Series Coquitlam

There are 6 days before Halloween and the end of October 2010.

In this month’s community count down series we take 6 days to visit seven communities that together are the Vancouver Real Estate market. As usual we’ll look at the Coquitlam, Burnaby, Vancouver East, Vancouver West, North Vancouver, West Vancouver and Richmond markets. The goal – to get an sense of where Vancouver’s October real estate is headed.

All communities are canvassed from MLS® data on the same day, Oct. 25, 2010, in order to offer as fair a representation as possible. The snapshot periods are August 25,2010 – September 25,/2010 and September 25, 2010 to October 25/2010.

We begin with Coquitlam’s detached market.

During the two periods noted above detached properties in the Coquitlam community tabulated the following results.

Listings

Total Listings decreased from Aug/Sept’s 574 to Sept/Oct’s 545.

Sales

CPR Bridge – Port Coquitlam

Sales decreased Aug/Sept’s 77 to 58 in Sept/Oct.

Expired, Reductions, Increases, Days on Market

  • Aug/Sept’s had 53 listing mandates expire which slowed to 34 in Sept/Oct.
  • Price reductions in Aug/Sept’s were 174 bumping up to 176 in Sept/Oct.
  • There were 5 price increases in each period.
  • The time it take to sell a home has shortened. It took an average of 54 days to sell a home in Aug/Sept. That decreased by 10 days to 44 in Sept/Oct.

Average and Median Prices

  • Aug/Sept’s Average Ask price was $683,551. The Average Asking price increased in Sept/Oct to $723,992.
  • The Median Asking price in Aug/Sept was $649,000. The Median Ask price increased to $679,450 in Sept/Oct.
  • The Average Sold price in the Aug/Sept was $660,262. In Sept/Oct this climbed to $703,502.
  • The Median Sold price in Aug/Sept was $636,500. In Sept/Oct the Median Sold increased to $650,000.

Thoughts

Within the sample size listings have held as did the price reductions while expired mandates dropped. In addition, the time to sell dropped leaving higher prices on the table even though the total number of sales dropped.

It’s becoming a bit of a rant and a theme that I suspect that will continue for some time as the homes I see selling are those that offer fewer problems mechanically and structurally. They are probably more esthetically appealing for location and neighbourhood and for any number of other reasons are perceived by buyers as better value. Not surprising, it is those homes that meet all these criteria which are slightly more expensive and therefore may explain the price increase.

About Larry Yatkowsky

Larry is a recognized real estate expert. A veteran professional, his experienced counsel leads Vancouverites in his west side community to place their trust in a man passionate about his work. Uncompromising ethics bring a balanced approach to realizing your real estate dreams.

When Life Moves You - contact Larry:

*Disclaimer: Statistics Courtesy REBGV. While believed to be accurate they are not guaranteed.
**Numbers provided may vary as they are dynamically posted by the REBGV.

Reader Comments:

Whitebear Says:
October 26th, 2010 at 6:23 pm

So much for the doom and gloom. Remember how Larry was sensing a change in the tone of the market around 1.5 months ago. Now, we have had two days within the last week where the sales/list for Vancouver (West/East) and Vancouver exceeds 100%.

Well done Larry for predicting the change so far ahead. Well. You would have known things are turning badly for the bears when we were still seeing sold over ask for a number of the SFHs as highlighted by Larry.

Whitebear Says:
October 26th, 2010 at 10:05 pm

Ok. This property http://www.realtor.ca/propertyDetails.aspx?propertyId=10018645&PidKey=882202858 sold only a little below asking within 3 days. My inquiring mind would want to know why someone is willing to plough out that amount of money for this house.

This is a house built in 1994; and in fact you can still see its before-the-renovation look with Google Street View. There were two recent transactions on Quesnel Dr with similar views.

One was on a 38 lot that got sold at 1.85M
The other was on a 45 lot that got sold at 2.4M

This house, before renovation, should only be in the range of 2.5M-2.8M given how its style (from 1994) is already out of fashion and the depreciation would pretty much eat up much of the building value. If you take a look at the recent renovation, I would estimate that to be in the realm of 500k. If you add 500k to the estimated cost of the pre-renovated estimated price, it would rough out to around 3M-3.3M. Now, the house got sold at 4.5M, That means a heftly profit of around 1.2-1.5M, or least 1M.

If you assume what I have just said are accurate estimates, my question is why a meticulous person would pay that amount for this house? Why doesn’t he buy an older house, renovate, and end up with a similarly renovated house at a substantially lower price?

If you were in the buyer’s realtor’s shoes, why would you agree to the buyer overpaying that much?

Whitebear Says:
October 26th, 2010 at 10:20 pm

***I edited out the first part as you seem to have repeated the statement from your first comment.***

Another question deals with the upside from paying 4.5M for this house.

Contrary to the bears, I don’t see a crash coming even though we’re seeing mortgage debt for Canadians and price/income at record high level. That said, all the upside has already been exhausted.

1. Interest rate lowered from 7% to recent low
2. CMHC guaranteeing MBS since 2008 financial crash
3. Mortgage debt already up to the brim for Canadians
4. First time buyers put in a lot of purchases last year

Let’s say the market won’t crash, but stagnate and remain flat for the next few years, what makes this 4.5M purchase a reasonable bet?

You look at the financial situation of Vancouver and you will only see property taxes exploding, with the high-end SFHs taking most of the share of the new tax increase. Plus, buildings depreciate over time while land value increases. The land has to increase much faster than the building depreciating before a property can returns positive. With this 4.5M purchase, I just don’t see how this will return positive for the foreseeable future.

The only choice that I would make, if I were in the buyer’s shoes, is to buy an old house with similar view but only do internal renovation. That way, assessment value won’t go up that much and the share of the new property tax burden won’t increase that dramatically. Plus, I have the added benefit of not losing that much from depreciation of the building.

October 26th, 2010 at 10:29 pm

@Whitebear
$500k for a major reno seems very low. You could have a kitchen worth $250k or more without trying hard. Most plain jane bathrooms start at $10K so I think you may be short on the $500K.
This is not meant to sound glib but maybe the sister, mother or brother live on the block and that buyer wanted to be close. When that happens establishing a value goes out the door. I know you are thinking I’m nuts, but how do you value proximity to family?

As for being in their shoes – that is an impossible question to answer if the above circumstance prevailed. Bottom line, life is short and if your money can buy you pleasure, comfort or peice of mind then who am I to say it is wrong.

October 26th, 2010 at 10:38 pm

@whitebear
“That way, assessment value won’t go up that much and the share of the new property tax burden won’t increase that dramatically.”

If you apply for permits (which of course you will because you want it done right and are honest) the value of the permits is added to the value of the building. So much for the tax savings.
If you do the reno’s without permits, when you sell you better be ready to declare that all the reno’s are patent defects (no permits) which of course will decrease the value.

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