Thursday, March 8, 2007

Panic Selling?

This week has been an odd one for the properties we're watching (mostly 2 bed condos under $250K and houses under $425K). The start of the week was very slow, no sales, no new listings, we were getting kind of worried that this was going to become a trend and possibly signal a shift in this market back in favour of sellers.

Well, over the past two days, a completely different trend has emerged: price reductions and increased back-on-the-markets. A listing can be pulled off the MLS anytime. Then, the realtor can re-list it at a different price and reset the days on market stat back to 0. It's a shady deal, but then again so is the RE market eh?

So I check in this afternoon with the listings to look for sales. Instead what greets me in the system is several significant price reductions; in more than one case 10%+ reductions in condo asking prices (all around 220K). That to me is a significant discount. If I was buying, I'd be thinking I drove a hard bargain getting that kind of price reduction out of the seller.

What's the trigger? Well, some people could have conditional offers on other places and could see themselves losing their new homes because they can't sell their old one. Or, I prefer to think the market is shifting, especially with condos. But I'm seeing it with houses too. One house that we looked at twice and did the math on at least a dozen times, sold for $25K under its asking price. Had we made an offer, we thought this kind of low-ball as borderline insulting. Not so apparently.

So are we seeing that places are priced too high for the market? Are we seeing some panicky selling? Or, and most likely, I'm describing circumstantial, anecdotal evidence that we can't possibly extrapolate into the market. But for us bears, I'm holding out hope.

Tomorrow I'll do an update of our list of watched homes and condos and do the math like in our previous post here.

On another note: watching the CBC as I type this, and get this, the business update included a brief discussion of a housing slowdown across Canada fuelled by overspending due to increased real estate values. Or in plain english, people have re-mortgaged their homes to buy new cars and expensive furniture and other goods, and have now realized their debts are significant and are changing their spending ways so as to pay down debt which in turn means less buying of homes which means a decline in housing values... ah, the market fuelled by idiocy.


VictoriaREBear said...

This IS a bit odd, especially for the kick-off of the busy spring selling season. I wonder if the subprime meltdown in the USA has actually been noticed by our populace, and has made them a bit edgy? OTOH, Vancouver's market still seems incendiary, so I'll reserve any stabs at analysing the market until May or June. All very interesting, though, and good entertainment!

Village said...

I hope this is the equivalent of a marathon runners last push to the line. A short sprint to the finish line and a falls over gasping for breath.

"It's different here."
"The Olympics are coming."
"The baby boomers are coming."
"The Albertan's are coming."

Lots of quotes, but I never see numbers to back up the statements.

Vicguy said...

Very interesting stuff HHV. I tell ya my gut is telling me this is spring 1990 all over again. Even though the market then was red hot,you had to have your place priced to perfection cause of the FTB affordability.
I remember being at odds with my realtor (who was very experienced in the Victoria market) with what price I should list at as I was moving out of town and needed to sell quick. I wanted the price about $5000 cheaper to have an edge on the competition I knew would be coming on stream. $5000 back then translates to about $12-15,000 now. He insisted I'd get it,low and behold it did not get one bite after a frenzy of lookers and several open houses.As I have said before it ended up costing me another $20,000 in reductions(about 15%) over 4 painful months.
I would be in no hurry here to buy and any low ball offers on something that needs a major reno would not be inappropriate to me.

Vicguy said...

Was doing a little 649 fantasy daydreaming clicking thru the million dollar houses on the Peninsula and notice a fair amount of empty houses. Have noticed a few in the lower ranges in the crappy areas but was suprised at this price range as none appeared to have no renos mentioned so no flippers by the looks of it. Have you noticed any trend on houses sitting empty ? Are the big bucks cashing out ?

VictoriaREBear said...

I've been hearing about American speculators dumping their Vancouver investment condos in order to offset losses on holdings in Florida, Vegas and Cali. Are some of our big, empty peninsula houses perhaps owned by these poor hurtin' souls?

HouseHuntVictoria said...

I haven't done any looking at the high end market other than headturning as I drive by.

When papers and exams are done, maybe I'll start gawking into the daddy warbucks market a bit.