Bigger New Home Discounts Coming?


Blog by Arnold Shuchat | April 17th, 2013


Price Bracket #of Properties  #sold last 30 days  % of those listed
  <$700,000 9 1 11
  $701-800k 42 5 12
  $801-900k 73 3
$901-1000k 88 2
$1001-1100k 57 0
$1101-1200k 58 3 5
  $1201-1300k 50 3 6
  $1301-1400k 49 0 0
  $1401-1500k 36 0
$1501-1600k 42 2 5
  $1601-1700k 39 1 3
  $1701-1800k 31 0 0
  $1801-1900k 23 0 0
  $1901-2000k 23 0 0
  $2001+ 96 3 3* (larger category of pricing)
The following table looks at the new home (single family dwelling) market for the different neighbourhoods in Richmond. Restricting the search to homes less than 2 years old yields the following interesting numbers:  The lowest priced "new" home is $898,000 at 11440 Williams Rd. while the most expensive one is at: 6331 Gibbons.  You can search them from the Property tabs on our main page.  The median price from the 196 listings was $1,905,000 for a 2753 sq. ft home in a new waterfront development complete with your own boat dock.  The property has been for sale since January of 2011 and was originally priced at: $2,338,000. These 196 listings of new homes represents 20% of the single family dwellings listed for sale on the MLS for single family dwellings.

And what about the HST/GST.  Word on the street was that people were writing and re-writing deals subsequent to the HST amendment in order to save taxes.  Well the recent sales for houses in this category break down as follows:

34 houses sold since Feb 1, 2013
21 houses sold since March 1, 2013
and only 3 have sold (that have been entered into the Real Estate Board's system) since April 1 when the HST was repealed for BC.  It is now April 17! So far, I don't see the hoped for impact of the HST elimination. I am hoping that this is a data reporting issue, although I don't imagine the data being that far behind.

Neighbourhood Properties For Sale   #Sold in April to date  % of those For Sale

Sea Island 1 0 0
Bridgeport 1 0 0
West Cambie 3 0 0
East Cambie 8 0 0
Terra Nova 2 0 0
Riverdale 11 0 0
Quilchena 8 0 0
Granville 11 1 9.1
Seafair 45 0 0
Boyd Park 2 0 0
Lackner 8 0 0
Steveston Village 3 0 0
Steveston North 8 0 0
Steveston South 3 0 0
Westwind 6 0 0
Woodwards 7 0 0
Broadmoor 24 0 0
Garden City 5 2 40
Saunders 17 0 0
Southarm 3 0 0
Brighouse 0 0 0
Brighouse South 0 0 0
McLennan North 0 0 0
Gilmore 1 0 0
McLennan 3 0 0
McNair 5 0 0
Ironwood 5 0 0
East Richmond 1 0 0
Hamilton 5 0 0
Totals: 196 3 1.5%

Here is the statistical information on the units that sold:

The average selling price per square foot was: $467.63.
Property #1 (Garden City) entered the market in July 2012 priced at $2,188,000 and sold for $1,588,785
Property #2 (Garden City) entered the market in September of 2012 priced at $2,180,000 and sold
for $1,760,000.
Property #3 (Granville) entered the market on January of 2013 priced at $2,188,000 and sold
for $1,830,000.

For arguments sake, and all this would change when examining a particular property in detail, given that the
average listing price across the board on these 196 homes is: $2,060,416 and the average sale price per square foot
is $467.63, sellers must start to discount their new homes by at least 15% more to move them if they are of average build quality
in an average site location. And, that assumes that they don't all do it at once, in order to get them to move. Why?
because the current asking price per square foot is at $556. Something has to give barring no change in demand, and I'm
saying on average, that it will be about $300,000, depending upon how fast builders get their numbers there. It could be more!

One more thing: Of the 196 houses on the table listed for sale (the new stuff), 96 or 49% of them are vacant!

If you or any of your friends are thinking of buying or selling a property, please
email me at: ashuchat@shuchatgroup.com or call me at: 778-227-7325 to discuss
a detailed purchasing or marketing plan which could save thousands of dollars.