Richmond Housing Report For August, 2012

September 15, 2012

Housing Report for Richmond, August 2012

Data Source: RealtyLink Online

Housing Type Active Listings August Sales Av. 3 mth No. Months Average Price
Detached 1175 60 65 18.08 $1,125,000
Townhouse 502 54 56 8.96 $530,000
Condominiums 1000 65 93 10.75 $352,000

Richmond Housing Report For August, 2012Richmond Housing Report For August, 2012Richmond Housing Report For August, 2012August home sales in Richmond turned out to be worst than in July and the month before in June. The number of homes sold for the month was 179 which was 17% lower than the previous month sales of 216 homes. Active listings for detached homes, townhomes and condos/apartments in Richmond at the end of July, 2012 totalled 2,677 units, was marginally lower than the previous month’s listings at 2,700 homes. August was another disappointment for many home sellers who were  hopeful of selling their homes. Homes that were sold were mostly found to have aggressively cut their prices, or sellers accepting low-ball offers. View Richmond homes for sale here. The real estate market in Richmond deteriorated further in August. The supply of homes in Richmond reached 12.51 months compared to the previous month of 11.02 months of supply. The lack of buying activities and large number of listings continued to exert pressure on home sellers to cut their prices in order to sell their homes. There are many more homes listed at or below their city assessment values. Richmond real estate market outlook There are no signs of the market in Richmond getting better. With the onset of the seasonally slower months in the fall, it is unlikely the last 3 months of 2012 will bring any relief to home sellers who are desperate to sell. Many homes that were priced according to the market, failed to generate much interest from buyers. Many of the homes that were sold were homes that offer better values, or priced significantly lower than comparable sales in the past 3 months. Market sentiment is now working to reverse the gains in home prices. Condo prices in Richmond had stagnant for more than two years. Similarly, townhome prices remained at about the same level a year ago. For sellers who have to sell, the only way out is to cut prices… not just 5%, a much deeper cut of 10% to 15% is required. A prolonged period of low sales, and declining home prices could take many years to play out. Declining home prices will erode seller confidence, resulting in more motivated home sellers to cut prices to sell before home prices drop further.

A real estate down cycle is already in motion, and just like from 1995 to 2001, the real estate market in Richmond will have a persistent high level or homes for sale, and few buyers willing or able to buy due to tighter lending rules.  

Richmond detached homes over $1,000,000 are not seeing much buying interest. With total active listings of 721 and average sale around 26 homes the past 3 months, there are 26 months supply of homes. For detached homes over $1,500,000, there are currently 366 homes for sale. With an average past 3 months sale of 12 homes, this translates into 30 months supply of homes. Even a small percentage of these sellers having to slash prices to sell, it will result in prices cascading downward. Early sellers would consider themselves the smart ones, cashing out long before others! Low mortgage rates to continue  The current low mortgage rates at just over 3.00 for 5-year fixed rate mortgage are expected to remain at current levels for some time. You can use the link here to view homes available for sale in Richmond. For more information on Richmond real estate, you are welcome to contact James Wong at 604-721-4817 or send James an email.months of inventory (MOI) is a ratio based on total supply against the average 3 months sale. A ratio of 6 MOI is considered a “market in balance”. A ratio much higher than 6 will result in home prices under pressure to go lower and a ratio much under 6 will result in home prices under pressure to go up.

Disclaimer: The writer assumes no liability whatsoever, for errors and/or omissions and any consequences arising either directly or indirectly from the use of information provided by this website. Any data provided are strictly for guidance and planning purposes only and may not be applicable due to ever changing market dynamics.

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