Nuts and Vancouver Real Estate Prices

No Time For Coffee

We were supposed to get together for coffee to talk about the Vancouver’s detached home market. Rallying the troupe the response was “too busy, no time.” “Ok, Ok I get it”, I say but before you run off, “what is your view of the detached market?” The response – “it’s nuts!”

Case in Point – 2763 Franklin

Franklin

You can’t go much further East on the East Side than this. To many, Franklin would be considered a beautiful home replete with character, charm and updating. The owners were asking $1,349,000. You might think this is a pie in the sky asking price for a 33 X 122 lot unless you understood that you are in a market that is nuts.

How Nuts?

Some lucky local buyer wrote a cheque for $1,611,000 – seven days after it was listed!

Nut Kicker

Assuming that buyer had a 30% down payment equaling $483,000, this would result in a mortgage of $1,127,700. At the time of this posting, RBC offered a 5 year fixed rate term of 4.64%. Sticking with that rate for the full 25 year amortization – an unlikely possibility, the total monthly payment is $6,329.59. That’s just the mortgage payment! Now add taxes and maintenance. The nut kicker – total interest to be paid over the next 25 years is $771,172.92. Imagine what that sum will be when mortgage rates increase.

How Come?

It doesn’t get more simple than this. Right now there are more buyers for detached homes than there are homes for sale. It is strictly a guess to suggest that those buyers are thinking ‘if they don’t get into the market today they never will.’ The way prices are rising in the current market which has tripled in the last 10 years there statement may bear truth.

Lack of Product

The limited inventory of homes for sale in Vancouver is a strange phase. Not alone the overall lower mainland market stretching from Pemberton to Hope is suffering in equal proportion.

Cron-IDX-Graphs-2015-06-17

How Bad Is It?

hex nuts, nutty pricing

On this day in June of 2013 there were 26,464 homes for sale. On the same day in 2014 there were 25,249 homes for sale.

Now this year, that total is 19,651 – a 25% decrease in listing inventory which graphically seems almost ready to begin an early decline into the equivalent of a fall market. Unless there is an outside force to alter the outcome the resulting inventory/price picture will not be pretty. Expect further nutty sale prices.

Just In Case

If you are thinking of selling your Vancouver detached home and want to go nuts give me a call.

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.

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