Monthly Archives: April 2012

Issue 14 – April 2012

GREATER (METRO) VANCOUVER

APR 2012 QTLY UPPER-TIER REAL ESTATE UPDATE

LESS HOMES SELLING AND A GROWING INVENTORY

A quick glance at the “numbers” area below will tell the factual story of a 1st quarter that has not replicated the 1st quarter we experienced last year (2011).

A quote from a recent press release put out by the Economic department of the Real Estate provincial body, British Columbia Real Estate Association, puts this in perspective. Although their purview is BC in aggregate the reference to ‘high end home sales’ reflects largely the picture in Greater Vancouver.

“….the dollar volume of homes sold through Multiple Listing Service (MLS®) in BC declined 26.5 per cent to $3.8 billion in March compared to the same month last year. A total of 6,882 MLS® residential unit sales were recorded over the same period, a decline of 20 per cent. The average MLS® residential price was $545,959 in March, 8 per cent lower than March 2011.”

The spike in consumer demand recorded a year ago was not repeated last month, said Cameron Muir, BCREA Chief Economist. A marked increase in high-end home sales a year ago pushed up unit sales and skewed average prices higher, so it is no surprise to see fewer home sales and lower average prices in March of this year.”

The philosophical discussion considering the worldwide economic (or indeed that dwelling on the “tighter” local one) resurfaces whenever a cycle threatens to (or in fact gives evidence that it has undergone) change. Are those with higher net worth/income who represent the core players in this market, less affected by the cycle change? Does being a member of this “core” mean that one has been largely unaffected financially? Or does the overall market psychology have a dampening effect on this group’s outlook too? The certainty factor of ‘intuiting’ the return to an economic well-being by a majority must logically impact the making of decisions. We propose no mind-elevating solutions only some topics for consideration.

Another area for consideration at a future date is the presumptuous defining of just what the Upper Tier for, say, Greater Vancouver (or any other city or conurbation) is. We work loosely with a Detached Residence that is valued by the market place at in excess of $2 million and call that ‘upper tier’. Somewhat arbitrary, we do admit, as it can be easily criticized when, say, a half-acre lot with a modest sized (dated) home sells for $2.2 million. The clarification here comes with the consideration of lot value and that of the so called ‘improvements’ added to that lot. Concepts of “highest and best use” come into play as does the potential for further development as controlled by the local jurisdiction – (municipality) and too by physical attributes (e.g. watercourses, stability of the land, land use restrictions etc.) We shall discuss this further in upcoming updates.

When looking at stats, the most important message to consider is, which way is inventory trending and the same for number of sales in each market segment? Future quarters will reveal more and more relevant YTD statistics.
Now the first quarter 2012 figures extracted from the REBGV database upon which we have based these comments.

Detached homes sold [$2MM and above] 2012 – 354 listings sold vs. 2011 – 518 sold (a decrease of 32%). Highest sale $19.8MM (’12) vs. $16.8MM (’11). This property – Belmont Ave, Pt.Grey sold in Jan ’12 after 97 days on the market, originally listed at $25MM. 8 bed/8 bth it is a 10,734 sq ft structure on a serene, park-40,434 sq ft lot – majestic, Point Grey view mansion with a 50 ft indoor/outdoor pool w. hot-tub. Tax Ass $15.114MM. Indeed a home of provenance.

Attached homes, those best described as townhomes and duplexes [$1MM and above] 2012 – 77 units sold vs. 2011 – 103 sold (a decrease of 25%). Highest sale $3MM (’12) vs. $7.138MM (’11). This property at 1337 The Crescent which sold in Mar ’12 after 35 days on the market was listed at $3.288MM. An impressive Character (2bd/3bth) Shaughnessy townhome with views of the city and extra-large terrace. 4,278 sq ft of finished living space. Also an amazing Home of Provenance.

Apartments [$1MM and above] 2012 – 126 units vs. 2011 – 158 sold (a decrease of 20%). Highest sale was $5.9MM (’12) vs. $7.1MM (’11). This Coal Harbour property [Two Harbour Green] is 3 bed/4 bth, 3636 sq ft., on one level with a 3 car garage and astonishing views.

As alluded to in the earlier mentioned press release, the exceptional activity 1st Qtr 2011, was spurred on by high international demand. This has not in any way collapsed but is certainly more restrained. As 2012 progresses we will see whether this sector will see a return to those significant sales levels.

Here again are the current inventory (listings) figures:

Detached (>$2MM – 1211) –(>$10MM – 45) Highest $39.9MM
[3 separate homes on 5+ acre West Van estate (Chartwell)]

Attached (>$1MM – 180) – (> $3MM -10 at) Highest $8.96MM –
[8243 sq ft fully restored Shaughnessy half duplex 3437 Osler St]

Apt (>$1MM – 303) – (> $5MM –19) – (>$10MM -4) Highest $28.8MM
[6434 sq ft /2 level – Penthouse #1 Fairmont Pacific Rim]

Note: We do not place too much store on “asking” prices, as the only true measure of a market is a “sale” price. These are however included because they are obviously of interest. It does underline the fact that unique properties are often challenging to price and that, in certain markets very few of these offerings are sold.

Again, visit the website to see and the new developments. We continue our commitment to keep you up to date on Vancouver’s … www.HomesOfProvenance.com – the “go to” site for Upper Tier Real Estate analysis and jumping off point for market listing information.

To join the group getting the e-mail version of this “update” – send a request now to info@HomesOfProvenance.com and you’ll be assured receipt; phone us at (604) 626-2526 or visit www.HomesOfProvenance.com