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Wednesday, October 10, 2012

Richmond: another example from ground zero for the real estate collapse in Greater Vancouver



Richmond, for those outside B.C, is a suburb community of Vancouver (and home of the Lower Mainland's largest airport).

Situated on a river delta, Richmond's geography averages just one metre above sea level. Prone to flooding, especially during high tide, the City has grown up surrounded by a system of dykes, which, although not as massive as those in the Netherlands or the levees of New Orleans, serve to protect the City from anticipated sources of flooding.

But will residents of the infamous HAM suburb soon find themselves underwater in another sense of the word?

Last Saturday we profiled yet another property in what may well become ground zero for the bubble collapse in the Lower Mainland.

The topic that day was 3900 Francis Road. Assessed at $1,020,000, the current listing price for the house is down to $799,000 - with no takers yet.

Before that we showed you 7920 Shackleton Drive. Assessed at $1,010,000, reduced several times until it reached $799,000, the house finally sold last month for $765,000.

Earlier this year, back in March, we started it all off with 6231 Gibbons Drive. Originally listed on February 28th, 2008 for $2,388,000, the property stagnated on the market until if finally lowered the asking price to $1,888,000. In March of 2012, the property sold for $1,428,000. That's $960,000 off the original asking price or 40% lower.

Yikes.

And the carnage continues.

In this week's version of the Weekly Drop, the blog Vancouver Price Drop gives us our next collapsing asset to profile from the island delta and it's back to Gibbons Drive again.

6691 Gibbons Drive, to be precise.

Assessed at $1,258,600, the realtor's description is priceless:
VALUE HAS AN ADDRESS and it is this fabulous custom designed 4 bedroom, 3 bath (plus den, family room and wrap around decks on both levels) home ON BEAUTIFUL GIBBONS DRIVE, AREA OF MILLION DOLLAR HOMES!
Here is a screenshot of the property listing so you can see it for yourself (click on image to enlarge):


What did they just call Gibbons Drive - area of million dollar homes?

It would appear that Million Dollar Homes aren't what they used to be, at least in terms of financial value.

For, as you can see from the screenshot, despite being currently assessed at $1,258,6000, the asking price of 6691 Gibbons Drive has now dropped to $898,800.

That's a plunge in value of $359,200 or 29% from the last government assessed value of the property... with no buyer in sight, meaning it will sell for even less.

Richmond, BC: a real estate disaster unfolding before your very eyes.

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11 comments:

  1. This article in The Tyee today seems to coincide with much of what has been posted here in the past.

    QUOTE:

    "Did China cook the debt books?

    Many reports have suggested that Chinese cities created financing entities to push the cost of this infrastructure off the books. According to a recent report by Northwestern University's Victor Shih, China's cities have taken on between 15.4 trillion yuan to 20.1 trillion yuan (or 40 to 50 per cent of China's GDP) leading some to question if China is hiding the mother of all debt bombs. While Western governments have provided stimulus through federal balance sheets, most of China's stimulus since 2009 has come through banks which took on $5.4 trillion in debt, 73 per cent of China's GDP in 2011."

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  2. All of these falling RE prices and there is apparently a construction boom happening as we speak. Approximately 135 tower cranes in the city and more every week. Amid suggestions that developers/speculators need or want to cash in on the outrageously high RE by building more, as prices are already starting to tumble! Interesting recipe.

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    Replies
    1. Those cranes represent developers that have bought land already (maybe at inflated prices), spent a few years and $ getting rezonings, sold about 80% of pre-sales in order to get financing. All that momentum began before prices started falling.

      They have little choice but to keep moving.

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    2. ...and will that be part of the final bursting equation!

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  3. No debating what's happening in Richmond real estate. It's a race to the bottom.

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  4. they better buy now before they are priced into the market! Hahahahah.

    Humans.....only think of what happens 2,3,4 years. Not realizing that real estate is a 20-25 year (or longer) time frame.

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  5. with no buyer in site should be with no buyer in sight

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  6. @Anonymous

    Very encouraging words for any house horney 40 year olds.
    Lets work our asses off for 20 or 30 years and hopefully then we can enjoy it, when we're 70.

    FAIL


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  7. Good timing on this article form my perspective Whisperer. I had the opportunity to drive up to Richmond from Seattle this week on Tuesday.

    Some Ancedotal Observations:
    * There seemed to be good quantity of for-sale signs, though I can't say it seemed terribly overwhelming. Kind of thing every couple blocks something was for sale- what's the limit when it moves from a lot offered for sale to a flood? Not sure on that but my take is it's not the flood yet, but getting close - perhaps in the new year it will be.
    * I drove around south side of town, south of Williams between 1 rd and 5rd. I was suprised at how non-remarkable and slightly down-troddened it looked with old homes in need of upkeep. Hardly speaks to the value of $1million+ Richmond that everyone reads about. Probably there's some better areas, but it didn't seem super desirable other than perhaps proximity to Vancouver for someone that has a need to go there. I currently live in the Redmond, WA area, and what I saw in Richmond doesn't compare.
    * RE was all over the radio like is not heard in the US at all. Bill Good had an hour on housing. After that on another show I think on CBC Radio, callers kept turning the conversation to residential Real Estate, even though it wasn't even the topic at hand directly.

    Some history on my side, I was born and grew up in greater Vancouver, and have lived / worked in Richmond for a good deal of time and remember it well.

    By contrast a nice home in suburban WA around Seattle, in a decent school district would be $300-$400k range tops, quite possibly lower. Be clear, you can buy a new constructed home, in a great school district, good area in Seattle burbs in the lower $300's quite easily - this is no super deal. Homes that cost $525 in 2007 can be had for $299 in the burbs. This isn't a trade-off scenario but a 2nd home move-up for people. If you spend $500k now you will be amazed at what can be had in the Seattle burbs. I've had friends in Vancouver come and down to visit be absolutely perplexed and begin to try to understand the difference in price. There is however one topic that people steer away from, I assume for emotional reasons - The Vancouver Bubble. I'm heading up for a dinner with friends on the Canadian side of the border this weekend. It'll be interesting to observe if Real-Estate is topic #1 as has it was last year.

    CanAmerican

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  8. I'm involved in politics and I remember hearing last fall in Vancouver, from people door to door canvassing that the demographics since the 2008 Municipal elections had noticeably changed in just 3 years. People who "apparently" can now afford to live in Vancouver, who are they? Not really sure, but suffice to say the price of land is changing the community. Many restaurants can't afford the rents anymore, new more agile ones may take their place? Before we even get used to the changed or changing demographics, we're sliding back down to where we were. The whole process is quite disturbing.

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