What do expect of the housing market in Richmond?

January 13, 2013

 A stand 0ff that will not last

Vancouver West homes for saleLike in other parts of Greater Vancouver, the current real estate market in Richmond can be best described as “a stand off” between home sellers and buyers. A typical area to track home prices is Terra Nova, a newer housing sub-division located to the north west corner of Richmond. Terra Nova is better known by the local residents as one of the most prestigious and desirable neighborhood in Richmond. The chart below tracked the home prices for single detached homes with built-up area between 2,600 to 2,900 sq ft. These homes are generally consisted of 5 bedrooms and 3 to 4 full baths, with lot sizes from 5,000 to 6,000 sq ft.

Spot light on Terra Nova detached home prices

The huge drop off in active listings in Richmond the last 2 months of 2012 could be temporary. Seasonally, active listings tend to be at it’s lowest level at the end of December. A surge in active listings from mid January 2013 onward can be expected as home sellers hope to catch on to the spring selling season. The hope for many sellers will likely be dashed as most of these sellers are unlikely to discount their homes too much. Homes that were sold the past few months were mostly homes that were priced to sell. These sellers were prepared to accept offers 10% to 15% lower than comparable homes that were sold a year ago.

Richmond Terra Nova home prices
In Terra Nova, the collapse in home prices in 2008 did not have an effect on the selling prices of homes in the area. The current situation has changed. The absence of new immigrant buyers, tight lending and negative market sentiment have resulted in a much smaller pool of buyers willing to enter the market. Home buyers who are ready to buy are reluctant to commit unless they see good values in the homes they want to buy. Most buyers prefer to wait it out for home prices to fall further.

Guessing the pricing trend for 2013 and beyond

It will take a major collapse in the housing market to bring home prices to the 2006 level. If this happens at all, it will take many years for home prices to correct to that level. If the housing market continues it’s decline, home prices in Terra Nova (with the above specifications) could take a few years to drop to the million dollar level. 

High real estate prices all over the world were the result of the massive creation of money by Governments all over the world the past 10 years. At the 2007 price level of $1.0 million, Terra Nova single family  detached homes would still be out of reach by most home buyers in Richmond. 

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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