Want to upgrade to a larger home in Richmond? Now may be the time.
Condo Apartments
There were 85 condos bought (and sold) in Richmond in November 2018, down 55% compared to November of last year, while active listings were up 56% over the same time frame. Compared to last month, 31% fewer condo were bought, while the number of number of homes for sale stayed the same.
Up until recently, Richmond’s condo market has held its value, but if supply continues to outpace demand, we can expect to see the price of Condos in Richmond to follow the trend of detached homes. The HPI Benchmark price of a condo in Richmond fell to $658,500 for November, down 6% from the all-time high, but still showing a year over year gain of almost 5% compared to 2.3% gains for Condos in Metro Vancouver.
It should be noted, that of the 85 purchases in November 2018, only 10 were paid over asking, while the rest negotiated price concessions.
Detached Single Family Houses
There were 51 houses sold in Richmond, compared to 59 properties last month (down 14%) and 75 properties in November 2017 (down 32%). Of these 51 homes, all but two sold under the asking price. The reality of Richmond’s detached home market is that prices are falling. This underlines the need to be competitively priced right from the start when you list your home. In a falling market, it is important to capture the current state of the market, or risk the market slipping further, requiring additional price adjustments.
Richmond house prices look poised to drop further in 2019.
Fun fact: Richmond’s detached sales this month included a houseboat which sold for $89,000. Houseboats are considered detached homes in the reported stats, but in general require regular monthly fees for moorage and hookups. In this way they are similar to a strata property, though the monthly fees are much higher, and they also need much more annual maintenance. If you are considering a houseboat for yourself, there are many factors to consider, including financing, but if non-stop water views and the gentle rock of the sea speaks to you then your dream home may float.
Outliers such as houseboats and multimillion-dollar mansions are why we use tools like Benchmark Price rather than Average or Median price. Benchmark price is a pricing model built to calculate the price of a theoretical home with the most common features, located within a specific city or region. Benchmark prices allows for better and more normalized tracking of the market price and eliminates the statistical ‘noise’ introduced outliers.
Townhome Market Update
The market in Richmond for townhomes has been favouring sellers the past few years, only recently entering a balanced/buyer’s market. Not coincidentally, benchmark prices for townhomes in Richmond continued to rise, reaching peak levels in July.
As prices rose, the number of homes for sale also rose, but actual purchases have tapered off significantly. In November there were only 42 purchases of townhomes, down 51% from the same time in 2017. There appear to be fewer active buyers willing to pay the prices demanded by sellers. The benchmark townhome price dropped to $840,200 in November, and of 42 sales, all but 4 were under asking.
There is some seasonality to the number of homes listed for sale since many people don’t like hosting open houses over the holidays. It is normal to see a decline in the number of active listings at this time, while homeowners enjoy time with family, before sprucing up their home and relisting in the new year
In Richmond, Condos and Townhomes have held value more than detached homes.
Buyer vs. Seller’s Advantage
With over 15 months of inventory for sale, the Richmond house market remains in deep buyer’s market territory. With the power to negotiate prices down and ask for concessions, this continues to be great time to be a buyer of a house in Richmond. The continued power of buyers over sellers has shifted the market, and benchmark home prices have dropped 9% ($100,000) since the most recent high in March.
The market for condos is balanced, but trending towards a buyer’s market. With 7.5 months of inventory on the market, both parties have similar negotiating power.
Those looking to purchase townhomes are also in a balanced market, where just over 7 months of inventory.
In the real estate industry, there are metrics used to indicate when buyers and sellers have more negotiating power. As a rule-of-thumb, less than 5 months of inventory (i.e., homes for sale) means it is a “Sellers Market” and the seller has the upper hand in a price negotiation. When there’s more than 9 months of inventory for sale, it’s a “Buyers Market” and buyers have more negotiating power. The theory is that buyers know that it could take over 9 months to sell the home, so the seller should probably drop the price to make sure the buyer in front of them purchases the home, or they could potentially be having open houses and showings for 9 more months.
Conclusion
Now appears to be a good time to act if you are looking to sell your condo or townhome and move into a larger, single family home. Prices of condos and townhomes have held value so far compared to detached homes in Richmond, so acting sooner rather than later may help you transfer any gains towards a larger home. There are some interesting neighbourhoods in Richmond as well as in Ladner where you may be interested in purchasing your first detached home.
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This market update is brought to you by Madeleine Wareing. She is a real estate agent specialized in Richmond and Ladner homes.
