Went for a nice trip around recreational property land. The Gulf Islands and Sunshine Coast..looking for deals. Well we are a long way from getting deals as of yet.
Met a few Real Estate Brokers and saw some properties. Even stuff that has been on the market for a year or more without a sniff from a buyer are stubbornly over-priced.
On Saltspring Island, they are sitting on (7 x 4 months) 0f supply = 28 Months. Total inventory/YTD sales. They had a front page article on how the market had changed and sellers need to wake up to this. Despite this prices are inching down v-e-r-y slowly.
The same in the Sunshine coast.
The Real Estate Brokers all admitted things were slow. ('Dead' one of them said)
However they were all certain there would be no significant drop and one suggested that I not bid any less than 10% under listing to be sure I get the property.
Huh!?
No one else is interested but I should still pay 90% of the asking price, on something that the listing agent and seller have probably over-priced by 20% expecting the market to keep going up..
I mention to some that I was looking as assessed as a starting price. This drew some laughs..surely I must know that assessed and market are two separate things...
I then mentioned that:
1) The assessed value is decided by a fairly uninterested party. In fact they will likely err to the up-side, since the higher the assessed the more taxes that are assessed.
2) I had done my home-work and showed up with info on several recent sales which went at the assessed value.
Everyone can have an opinion..but when you back up your opinion with facts it is harder to refute it.
Recreational property has not rebounded as much as Vancouver. The further from the centre, the weaker the bounce back. I think we are in a full-out buyer's market. That is the only way you can describe any market that has over TWO YEARS of inventory. However there is a LOT of denial out there and buyers may find sellers need some more time to come to terms with the new realities.
In fact there are now some listings UNDER assessed on the Sunshine Coast.
................................
As many of you know, I have a special distaste for Conrad Black. He basically threw his Canadian citizenship away. Then he gets convicted for multiple cases of fraud and one of obstruction of justice, and is being sued for unpaid taxes by the IRS.
He then pays enough lawyers to get him out of jail on bail pending an appeal and now he is suing his former Hollinger colleagues in Canada who accused him of looting the company. He is suing in Canada because we have stricter libel laws. Nice to see Canada has something he wants.
Ah will the machinations of the naughty rich never end..
What did Bob Rae say about Black.."that most symbolic representative of bloated capitalism at its worst"
HEY CONRAD if you ever read this post surfing google for mentions of your name..make sure you listen to Todd Butler's song, which is just about you:
Music - click on 'Conrad' if it takes you to another song first.
What does assessed value have to do with anything? That I'm willing to pay what some other idiot just paid? No thanks.
ReplyDeleteThose high MOI numbers seem to jive well with reports out of the BCREA where province-wide MOI, Vancouver/FV included, is terribly high. In fact, Vancouver/FV's relative strength is making the rest of the province look better than it actually is.
From the data I've looked at, high MOI in some regions won't produce price drops like were seen in Vancouver in the latter part of '08. That said, when we're in the 20 MOI region, I'd be very surprised if that can maintain itself for more than 3-4 months without massive price weakness.
The thing about assessed value is that the property owner is agreeable to pay property tax based on it, but wants considerably more when it comes time to sell. I'd say since they are willing to pay their taxes based on assessed value they should be willing to sell based on assessed value. but naturally, they want to have their cake and eat it too.
ReplyDeleteRight you are anon.
ReplyDeleteHere's something funny I saw on the Gulf islands. Now that the market is weakening, buyers are looking at the assessed value as a more reliable measure of value than the wishful pricing of yesteryear.
One Agent told me, when i mentioned the huge discrepancy between assessed and listed, that his seller intended to APPEAL and ask for an reassessment higher, since prospective buyers were all saying the same thing I had.
Never heard that one before.
Just in time for the buyer to pay the higher taxes - nice!
If everyone's assessed value goes up by 100%, do property taxes go up by 100%? In BC? No. If you appeal, you're appealing that your specific property is unduly inflated compared to its peers. IOW you have to prove that your property is markedly dissimilar and inferior to properties around it that recently sold that were used as comparables by the city/municipality/district. I've been surprised at how uninformed many people, including homeowners, are of how the authorities actually use assessed value.
ReplyDeleteI still think using assessed value during negotiations is really just a gimmick, a false negotiating point that forms the excuse for Realtors to convince sellers to lower their prices. What happens when list prices fall lower than assessed value (like in parts of the US)? Do you think buyers would be using it to their advantage then? NFW.
Hey Jesse- i would be happy to get back to assessed for now :)
ReplyDeleteUntil now the agents have completely ignored it, and just used the last house that was sold as a launch pad and up from there.
Some assessed based reality would be nice..as a starting point anyway.
Fish- some major price reductions in the Okanagan. here's one I saw on Craigslist http://tinyurl.com/26ysf42
ReplyDeleteWell Anon it had to happen. 28 MOI gets you there.
ReplyDeleteHowever 600K at first swipe is a good reduction. Now just imagine if a person had told the agent when it was the old price..'I want to offer 625K under the list price'..you would have been laughed off the phone.
A lesson to those, agents, owners and buyers who think RE has some 'fundamental' value set in stone which can never be breached.
Do a search on MLS.ca for Salt Spring and it looks like the whole island is for sale....
ReplyDeleteBut I'm sure prices will hold steady under those conditions.
;-)