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Thursday, November 8, 2012

Properties 30% or greater below assessed value becoming common?



As we watch real estate here on the wet coast, the focus has moved from properties that are greater than 25% below assessed value to those greater than 30% below assessed value.

We have profiled the house in Richmond that sold for 33% below assessed value. There was the Olympic Village 'penthouse' advertised as asking 34% below original sale price.

And now some recent Surrey properties now have shown up with asking prices more than 30% below assessed value.

Observer had his Surrey profile on Vancouver Price Drop this past week and these properties were notable:

14896 60th Ave, Surrey (click on images to enlarge)



A 16,600 sq ft property with a  large 3 level split family home featuring 4 bedrooms and recreation/games room is assessed at $1,287,000.

Current asking price?  $900,000.

That's an asking price $387,000 below assessed value or 30% below assessed value.  And still no buyer is in sight! Meaning it will probably sell for less.


#105-9632 120A Street, Surrey


At the other end of the price spectrum is this 1,354 sq ft 2 bedroom condo with no rental restrictions and pet friendly building near Scott Rd and 96th.

Assessed value: $203,000. Current asking price: $139,900.

That's an asking price $63,100 below assessed value or 31% below assessed value and no buyer in sight!

Critics contend citing these examples is 'cherry picking' to create a misleading assessment of the market. But the fact is a year ago the idea you could even FIND properties selling below assessed value (let alone with an asking price below assessed value) was considered impossible.

Six months ago finding properties 20% below assessed value was criticized as rare and 'the exception'.

Now properties with an asking price below assessed value is the accepted practice, 20% below accepted value relatively common and numerous sightings at 30% or greater below assessed value.

How much longer until we have a property priced or selling 40% below assessed value?

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16 comments:

  1. The first example is actually 16,600 sq feet (not 6,600) which explains the high valuation. At 6,600 that property would be around $500,000.

    ReplyDelete
  2. >How much longer until we have a property priced or selling 40% below assessed value?

    Wait until the spring.

    Remember that this is a positive feedback loop situation.

    ReplyDelete
  3. This percentage of drop is truly stunning to me. My belief is that annualized drops of 10-15% YOY will result in impact similar to housing drop in the US. Living through it there, the take-away I have seen is that drops in the 10% or so range will result in realtors and the like attempt to spin as removing the froth and bringing back order. However, the drops can and will continue year on year. Hindsight will show large drops in aggregate. So - The US drop wasn't instant and the GVR by these numbers seems to be coming off peak with extreme and rapid decline, beyond anything imaginable. Then again, the prices asked for homes are beyond comprehension.

    CanAmerican

    ReplyDelete
  4. It will be tempting when we finally get to 70% below, which is where it's headed. Maybe lower! Many today may think that at those prices when Kits condos are starting at 100K and Surrey at 50K, buyers would be lined up from Stanley Park to Horseshoe bay, do not understand mass psychology. RE is going to become so repugnant to people that they may actually lynch some realtors and Global News anchors. That will be the time to buy!

    The BC drop, particularly GVA will be far more extreme than the US, pot alone cannot sustain an economy and when the smoke clears (no pun intended), there is no economy in Vancouver that can sustain even 50% off prices, they need to drop by 60-70%!

    ReplyDelete
    Replies
    1. Bubbles normally over correct. The magnitude of the bubbles in Vancouver and Victoria will only be appreciated once these markets over correct. You may very well be correct with your 70% off peak prediction. Where and I mean where are the fundamentals that support today's prices: Where are the fundamentals that will support 50% off prices? Vancouver and Victoria are both in the range of 8 to 10 on the price/income scale.

      Look out below.

      Delete
  5. One can calling it "cherry-picking" or one can consider that it is simply a slice of the current market conditions. It is an observation.

    Meaning: there are segments in this market that are performing absolutely horribly which cannot seem to attract buyers at any established price points (if there is such a thing right now). Hence there are some properties in this Greater Vancouver market that are essentially in free-fall territory. The only question is how big is this segment, and is it expanding or deepening.

    ReplyDelete
  6. In reference to Sandhu's comments, wonder how the legalization of marijuana in Washington and Colorado is going to impact the housing market in BC. One article I read sugguests that it's going to cut the Mexico drug trade revenue by 50% due to significant price drop expected once marijuana is legalized. What does this mean to the grow-ops in BC? Will there the price be attractive enough to sustain those grow-ops? What will it mean to those houses that are currently use for grow-ops? Will be interesting to see how it will unfold.

    ReplyDelete
  7. Legalization in these states will kill both the Mexico and Canada drug trade. It is a stroke of genius to immobilize crime elements in both foreign countries while boosting GDP internally.

    God Bless America

    ReplyDelete
  8. The effect of the tightening of mortgage rules is nothing...wait until interest rates rise.

    ReplyDelete
  9. F1224577 in White Rock

    Assessed at $228K
    Listed in Oct 2011 for $225K
    Price dropped in Nov 2011 to $220K
    Listing finally pulled Sep 2012

    Relisted Oct 4, 2012 for $119,900
    Almost 50% BELOW assessment!
    Also admitted to $63K special assessment coming up - I guess they were hoping to find a sucker

    An Observer

    ReplyDelete
  10. Whisperer:

    Great blog. Love your posts.

    The information about sold/listed vs. assessment is very valuable. Can you link me up with a way to find similar information for Victoria? I would like to present it on their blog.

    Much appreciated.

    ReplyDelete
    Replies
    1. The information comes from various sites or is sent to me by different readers.

      The assessment information comes BC assessment online. You can google BC assessment and then enter any address into the site to find the assessed value.

      Delete
  11. Is Rennie building/marketing MORE condos in Richmond....Globe online??

    ReplyDelete
  12. the Federal Reserve has refused to allow German inspectors to even view the country’s massive gold reserves “in the interest of security and of the control process“. NOW i am 100% sure the federale reserve is a criminal organisation, soon, the rest of the world will realize it too. Got physical gold!

    ReplyDelete