Saturday, May 19, 2007

OH HAPPY DAY!

Yes, I did mean to yell that.

Picture this, I'm going through my morning ritual of reading the paper while sipping my coffee, and what do I see? Yet another full-page add for a condo development that hasn't sold out yet. This one promises a taste of European charm on the corner of one of Victoria's busiest intersections.

For the last 6 weeks or so, Tuscany Village has had a discount for buying during their special grand opening sale. It's a bit funny that nothing is open up there, or even close to it, but that's irrelevant for marketing anyway.

But today. Oh, today! I am greeted by that same add except, with a twist.

Ready for it? Make sure you're sitting down:
Priced well below appraisal.
Sweet mother of gawd. A $440,000 luxury 2 bed 2 bath condo, in Victoria, where everyone wants to be, hasn't sold itself out yet with its grand opening discounts, so now, they have to advertise that it's well below appraisal. Whose appraisal is irrelevant. It certainly wouldn't be the same as assessment via BC Assessment. Seems their listings agents with whichever realty company they have marketing for them didn't get the prices right.

Maybe this will inspire a new realty game show... Come on down Suzy Hahn, you're the next contestant on the Listing Price is Right. Set the pricing right, you win a big fat 9% commission, get it wrong and we'll end that contract and head over to Darren Day and his Day Team jingle singers.

19 comments:

Vicguy said...

The one thing I noticed about the Tuscany is it seems like a very bad corner to get in and out of. You have to be driving west from UVIC in order access the complex,rules out driving from 3 other directions unless they have built a back driveway off of Shelbourne. Plus the general traffic is brutal there. Maybe the courtyard thing is a noise creater rather than a buffer ? Throw in the gouge price on top of it all and maybe some people are waking up.

hhv said...

Can we say wrong development for that neighbourhood? That should have been more of the same type of units located across the street from it.

High-density, no frills, decent places to live that can attract students and visiting professors alike for rent. A development in that neighbourhood makes sense to me to be a rental first, owner second type place. No way that's the case with those prices.

Vicguy said...

Agreed HHV, a rental potential building would have been the ticket. I guess the builder gets more profit for excess granite and stainless steel. That one has always made me scratch my head.

Vicguy said...

My buddy who lives in the west end of Vancouver was telling me about the unit across the hall in his high rise condo rental has just gone on the market at $440,000 and is 600 Sq Ft one bed room. Great view of Vancouver on the 17th floor but even he said he would never pay that for a shoe box. He works downtown and needs to live there but finds the place claustraphobic with him and his girlfriend. When friends come over it is even worse.

hhv said...

If I had a place that small for that price, I wouldn't have time for friends for the three jobs I'd be working to pay for it...

the love affair with downsizing and the green-feel it gives potential buyers may prove to be a very short lived fad indeed.

olives said...

I like to think that the original appraisal WAS correct, but that the market value has simply dropped. The advertising sounds a bit desperate.

Anonymous said...

i'm sorry, kind of an unrelated question here. How do you access the BC Assessment #'s after the March freebe? I tried last night and didnt get far with BCOnline. Has anyone else done it to check out properties up for consideration (post 15-20% correction of course).

Thanks

Stormy

hhv said...

stormy, not sure if its public free info anymore or where it can be found. But the MLS listings sheets for individual properties will have it. You have to go through a realtor for those now.

Vicguy said...

Drove by it this afternoon since I was goin that way,there is a big back route driveway off of Shelbourne but man,looks like there aren't many balconies and if there are, the view of a busy intersection and exhaust spewing up constantly was a turn off for me to spend $440,000.

JMK said...

I agree. And its wood construction to boot. For that money you can get the same square footage in steel and concrete downtown with a view. Its too bad, because I think the idea of combining commerical with residential is great. But they are going to have trouble making a success of it with those prices. Hopefully it doesn't discourage other developers from trying the same format without pushing the affordability envelope.

Roger said...

jmk wrote:
Hopefully it doesn't discourage other developers from trying the same format without pushing the affordability envelope.


jmk - Why are you concerned about affordability? It is only 8-9 times median income. From your previous posts this is not a factor for Victoria: everyone wants to move here and prices will continue to rise. Folks just need to jump in and watch their "investment" increase as the years go by.

As far as the format goes. Don't worry - the developers will be happy to develop concrete/steel shoeboxes with commercial on the ground floor. There is a still a good supply of investors from out of town that believe in the bigger fool theory. My question is how many fools are left?

Anonymous said...

Roger my dear,
There are still more fools than you can imagine.

I just heard about an EXPENSIVE house that has an offer after one year on the market.

It was mentioned in a "boo-hoo" tone that the offer came in below assessment.

They did not mention that the assessment amount was arrived at by the city , when they saw the asking price! Several neighbours also got zapped, and were understandably p---ed off!

The house-owner had thought that the city assessors were 'oh-so-smart' to come up with the correct VALUE. So now they thought they gave the house away!

JMK said...

Hi Roger,

everyone wants to move here and prices will continue to rise. Folks just need to jump in and watch their "investment" increase as the years go by.

No, I don't agree with any of those things. No one should jump in if they can't afford it. As HHV and Siobhan showed, if all you have is 10% down, you are better off renting at todays rents and home prices. Fair enough. I've shown that at 25% down you come out ahead. Counting on future housing gains to break even, particularly when leveraged 90%, is dangerous.

So of course affordability is a problem. You particularly shouldn't jump in on a product that is overpriced relative to other product in the market by a hefty margin.

The main point of my posts is that I am deeply skeptical of the 20-30% correction you uber-bears keep claiming. I would no more base a financial decision on that than I would on the idea that houses will keep rising at double digit rates forever.

Prairieboy said...

I just visited the Tuscany Village showroom. IMHO, the units are still overpriced by a mile, even with the current reductions. The cheapest - $302k for 698 sq ft. The most expensive - $563k for 1192 sq ft. They were selling agressively - the salesperson was following me around the showroom. They would have given me a hard hat and steel toe boots to show me a suite under construction.

Roger said...

I have updated my Website Needs Analysis with the April VREB numbers.

Hope you find it interesting.

Roger

hhv said...

thanks roger, we've missed your commentary lately.

Roger said...

hhv I have not been on the Internet lately. Been busy packing - sold my house!! Back to renting and lovin' it.

Anonymous said...

roger

Please tell us who you sold your house to. If you want to, of course.

I would love to know the demographics of who is still buying out there.

S2

Anonymous said...

I was an original buyer of Tuscan Village, back in 2004. I didn't complete my purchase because of a bad I got from the developer and the real estate team. My price was about $229,000 for the 1bd plus den. I now see it's being listed for in high three's.

I'm glad I got out when I did. Especially learning of the fact that the Developer ran out of money and had to refinance the project.

Just so you know the developer is building about 100, I think, rental units alongside this project for his own personal ownership.

Frankly the Developer and greedy Real Estate Team of DFH made a mess of this site.