House listed for less than $1M shows Vancouver's softening market
It has a grungy pink bathtub, worn out hardwood floors and tiles falling off the exterior, but a house in Vancouver is attracting lots of attention.
That’s because it’s listed for less than $1 million, a psychological barrier in a city where out-of-control real estate prices are finally starting to fall.
In fact, the two-bedroom home in Vancouver’s East Side was originally listed at $1.2 million but didn’t attract any offers.
“In December, we saw that the market had shifted and we adjusted the price to where we are now at $998,000,” said Realtor Shelly Smee.
“We have seen a drop in the level of transactions,” she added. “The listings that do come on are coming on at the adjusted new market price.”
Sales of detached homes in Metro Vancouver plunged in 2018. There were only 348 homes sold last month compared to 617 in December 2017.
Prices fell too, down 7.8 per cent year over year to an average of $1.479 million. RBC predicts that prices will fall even further this year.
“Current demand-supply conditions are consistent with moderately falling prices,” the bank said last month. “Downward price pressure could intensify, however.”
The bank blames the slowdown on poor affordability, the 15 per cent foreign buyer’s tax introduced in 2016, new federal “stress test” rules that make it more difficult to qualify for mortgages, and rising interest rates.
“Real estate’s a very slow, sticky market where everybody always wants to hold out and get the best price,” said Vancouver Realtor Steve Saretsky. “It’s just a matter of changing expectations.”