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Everything you need to know about Vancouver’s Real Estate Market –
Selling in the Declining Vancouver Real Estate Market
Below is a transcription of the above video
Today we are going to talk about how to sell your home and to maximize the dollars you take away from it in this declining market.
Let’s talk about what is happening in the market in general. We are still seeing a softening trend and it has been going on in the detached housing market for a couple of years and now it is starting to take hold of the condo/townhouse market as well.
Let’s look at the last 6 months. For the entire Real Estate Board of Greater Vancouver, the detached sales value is down 5.8%, townhouse values are down 4.2%, and condos values are down 5.6%. These are all numbers put out by the Real Estate Board of Greater Vancouver, they are not my numbers and they are not Remax numbers.
Where we are seeing the greatest decrease in the detached market is in the Westside where it is down 9.3% in the last 6 months. That is quite a decrease. The lowest decrease was Port Moody at 2%. For townhouse, the greatest decrease (which surprised me) was East Vancouver, which was down 10.3%. The lowest decrease for townhouses was in Richmond, which was under 1% at0 .7%. For the condo market, the greatest decrease was again the Westside , at 7.5% (that does include downtown as well). The lowest decrease for condos was in Ladner at 1.7%.
With this in mind, now we are going to talk about what you need to do in a declining market. Some mistakes do get made, and the only reason I know this is because have I worked in a declining market before. From 2001-2018 we have had a market that has shot pretty much straight up except for a couple of blips, one being the US Banking Crisis in 08-09, and then we had a little slow down in 2011 as well. Pretty much for 17 years, this market has gone straight upwards. Back in the ’90s, we had a declining market in 1993-2001 and it is bringing back a lot of things that I remember now on what you need to do to get your house sold.
There are 2 things to remember here – number one is if you paid $300,000 for your property in 2006, and last year it was worth $800,000, and now this year it is only worth $700,000, well you didn’t lose a $100,000 . You are still $400,000 ahead on the property! You have to look at it from that way. It is like a stock. if you bought a stock that went from $1 to $4, then you ended up selling it for $3.50, well you made $2.50 a share – you didn’t lose that $0.50 a share because you didn’t sell it 6 months earlier. That is really important to remember because if you are selling in a slow market and you are going to buy again, it doesn’t make any difference if you sell or buy in a slow market. If you sell in a hot market, you are going to buy back in in a hot market.
Let’s talk about how Real Estate marketing has evolved. If you go back to the 1960s and listed your home for sale, you would call a realtor and only that realtor could sell your home. The one that you called was responsible for finding a buying and selling your home. How the realtor did it in those days, is they would put up a “for sale” sign in your lawn, put a classified add in the newspaper, and they would do open house’s to find buyers. Well, that has completely changed, and yet some people still think that is what we need to do to get your house sold.
Technology has changed a how business is done in almost every business in the last 50 years, and it has changed Real Estate as well. Nowadays there is a lot more pre-planning involved to get your home sold. The first thing I would do if I were going to sell my home, is get it professionally staged. You can get staging done now at affordable prices. I just staged a 900 sq ft condo for $2000 and that included the first 2 months of the furniture rental. It’s the same as if you were going to sell your car, you would get it detailed first. The reason it is so critical is that your first showing isn’t when people come into your home, the first showing online. So, you want to have the pictures pop which is critical because you are going to have a lot of competition out there.
What most people do when they are looking at the properties online, is they scroll through, and when they find a good one it draws their attention. The pictures need to be taken by a professional photographer. You don’t want someone in there with their I-Phone taking pictures. Very few realtors are qualified as photographers. When people are shopping for homes, well over 90% of the buyers go online the first time when thinking about buying a property. So you want all of the information to be there, you want a video tour, photographs, and everything about the area to be on the MLS and your website.
The number one thing is price! You cannot overprice your home in this market and expect to have success. You have too much competition out there. In a hot market if you over-price your home by 5%, well the market keeps climbing for 2 or 3 months and you have overpriced it and you are sitting there 90 days later, the market will eventually catch up with you, and you probably will be able to get your price. In a slow market, it works the other way. Remember prices are going down. If you don’t get an offer right away and you wait 3 months and it goes down 5% you have even less chance of getting sold. I want to give you a little example of this.
Back in the 90’s, I had a close family member of mine who wanted to sell their property. We both agreed the property was worth $1.25 million, and the family member asked me what we should list it at and I suggested $1.295 million to give a little bit of room to negotiate. The family member agreed with me it was worth $1.25 but hadn’t sold a house for a long time and was really uncomfortable with that listing price. The family member listed it for $1.4, and the problem was that he has immediately set himself up for failure. If someone goes to look at 4 or 5 properties in one day, and the first 4 they see are worth $1.35-$1.4, and the 5th one they come to see is ours, that isn’t really worth that, we don’t compare.
We are being compared to those other properties that are priced at $1.4 and these people can afford more. We’ve got the wrong people looking at our house. Where are the people that can afford $1.25 which was actual value of the home? They aren’t coming in because they don’t think they can afford it. So what happened here is we set out on a 2-year journey to get this house sold. Remember we are in market conditions very similar to our market today. We had 2 showings a week on this property for over 2 years -that is over 200 groups looking at this home! It was a nice house for $1.25, but not a nice house for $1.4. Six months later we reduced the house to $1.35, but don’t forget the market is declining, so his house is not worth $1.25 anymore its only worth $1.20. 12 months later we reduced it to $1.30, and I tell him that a house identical to his just around the corner just sold for $1.10. So what is he doing here?
He is chasing the market down. In his mind he has reduced it 2 times and now it is at $1.30 and it should sell, but that was the price from a year ago. This continued on for 1 more year, with over 200 showings Buyers do not care about your schedule, they are only concerned about their own. They will be calling Sunday at dinner- time, Saturday morning at 9:30 am, it is a big inconvenience to have that many people walking through your home. The end of this story is that 2 years later, we were now listed at $1.20, which was $200,000 less than we had listed it before, and we wound up selling it for $1.050. In today’s dollars, if you had done what my family member had done back then, you would have lost $200,000 for over-pricing your home.
Price your home properly!
If the market is still declining, price it exactly where the last one sold!