The Background
As I mentioned in an earlier post, the current Vancouver real estate market is the ideal market for trade up real estate buyers. I’ve received some inquiries from you readers asking me to explain exactly what I mean. Of course, as a Vancouver realtor I’m happy to oblige answering any and all of your Vancouver real estate questions.
Your wish is my command.
The Situation
Let’s take a situation where someone is currently living in a small one bedroom condo in East Vancouver. The owners are having a child and need a larger home as a result. They’d like to buy a two bedroom condo in Grandview (Commercial Drive).
The Details
The Vancouver real estate market peaked in March, 2008. So, we’ll compare our example scenario from March, 2008 to today. Let’s say that the market declined exactly 12% in this time period.
$300,000 x 88% = $264,000 (-$36,000)
$450,000 x 88% = $396,000 (-$54,000)
Home A (the current home) was worth $300,000 before the decline. Home B (the desired home) was worth $450,000. The 12% decline hits both homes equally resulting in Home A now being worth $264,000 and Home B $396,000.
The Bottom Line
$54,000 – $36,000 = $18,000 found money!
The difference in the price variation between Home A ($36,000) and Home B ($54,000) is $18,000 in the buyers pocket.
That’s real money. Our young example couple would actually be able to cover the costs of their move from the savings of trading up in the down Vancouver real estate market (real estate fees, lawyer’s fees, moving costs) and be in their perfect new home.
One More Thing
Not only is our young couple saving money, they are also more likely to find the home that they want in this market. There are lots of choices and you have the luxury of finding the right home for you in this market. That’s not a luxury you’d have in a seller’s market.
Right now we have a lot of homes for sale in Vancouver. Listings piqued in September and they’ve been coming down since (something that needs to happen for the Vancouver real estate market to stabilize). Who knows how much longer this situation will be ideal for the trade up buyer?
Want to Trade Up?
If you are considering trading up, thinking of buying or selling, or just have questions, contact me here or send me a quick email.
More Info on Vancouver Real Estate
Should you want to learn more about the Vancouver real estate market generally you can check out this page. You can also review all of the statistics for Vancouver East and Vancouver West broken down for you here:
Enjoy Vancouver real estate statistics? You can find all of the latest stats by area right here:
Copyright © 2008 by Sebastian Albrecht, Vancouver Realtor with Royal LePage Westside ”Trading Up in a Down Vancouver Real Estate Market”
The Board’s new release is out. Note that all benchmarks are up, as are most median prices.
REBGV September Stats
Buyer demand remains strong while home listings increase
Greater Vancouver home sales remained strong last month, with the second highest number of residential sales ever recorded for the month of September.
The Real Estate Board of Greater Vancouver (REBGV) reports that residential property sales in Greater Vancouver totalled 3,559 in September 2009, an increase of 3.4 per cent from the 3,441 sales recorded in August 2009, and an increase of 124.5 per cent compared to September 2008 when 1,585 sales were recorded.
“As homes sales in Greater Vancouver continued at an elevated pace in September it’s encouraging to see that more homes were listed on the MLS® in the month than any other so far this year,” Scott Russell, REBGV president said.
New listings for detached, attached and apartment properties in Greater Vancouver totalled 5,764 in September 2009. This represents a 6.2 per cent decline compared to September 2008 when 6,142 new units were listed, but a 26.8 per cent increase compared to August 2009 when 4,544 properties were listed on the Multiple Listing Service® (MLS®) in Greater Vancouver.
At 12,596, the total number of property listings on the MLS® increased 5.5 per cent in September compared to last month and declined 36 per cent from the 19,852 homes listed for sale during the buyer’s market that was experienced at this time last year.
“During this period of renewed demand in our marketplace, home values have gradually recovered from the declines that occurred in 2008,” said Russell.
Since the beginning of the year, the MLSLink® Housing Price Index (HPI) benchmark price for all residential properties in Greater Vancouver has increased 13 per cent to $547,092 from $484,211, while home prices compared to Septembers 2008 levels are up 1.6 per cent.
Sales of detached properties increased 160.6 per cent to 1,423 from the 546 detached sales recorded during the same period in 2008. The benchmark price, as calculated by the MLSLink Housing Price Index®, for detached properties increased 2.1 per cent from September 2008 to $741,632.
Sales of apartment properties in September 2009 increased 94.9 per cent to 1,489, compared to 764 sales in September 2008. The benchmark price of an apartment property increased 1.5 per cent from September 2008 to $374,686.
Attached property sales in September 2009 are up 135.3 per cent to 647, compared with the 275 sales in September 2008. The benchmark price of an attached unit increased 0.4 per cent between Septembers 2008 and 2009 to $466,276.
Download complete stats package by clicking here.
The Real Estate industry is a key economic driver in British Columbia. In 2008, 24,626 homes changed hands in the Board’s area generating $1.03 billion in spin-offs. The Real Estate Board of Greater Vancouver is an association representing more than 9,400 REALTORS®. The Real Estate Board provides a variety of membership services, including the Multiple Listing Service®. For more information on real estate, statistics, and buying or selling a home, contact a local REALTOR® or visit www.rebgv.org.
