Richmond Housing Report For December, 2012

January 19, 2013

Housing Report for Richmond, December 2012

Data Source: Real Estate Board of Greater Vancouver

Housing Type Active Listings Dec Sales Av. 3 mth No. Months Average Price
Detached 800 44 66 12.12 $1,160,000
Townhouse 380 40 50 7.60 $515,000
Condominiums 765 54 73 10.48 $351,000
Total Sales 1945 138 190 10.24

Richmond detached homesRichmond townhomesRichmond condos apartments

Home sales in Richmond for December at 138 homes were almost matched by the 10-year low of 84 homes that were sold in November, 2008. Richmond’s December homes sale was 9% lower than the previous month sale of 207 homes. Price discounting continued as motivated sellers tried to attract buyers, while many homes went expired unsold or taken off the market. There were 195 lesser homes listed for sale in Richmond at the end of December, 2012.  The overall months-of-inventory (MOI) at 12.24 for December was relatively unchanged compared to 10.65 months in November. The drop in active listings was matched by a drop in sales for the month. View Richmond homes for sale here.

Richmond real estate market outlook

The Months-of-inventory (MOI) in Richmond from at current level is as low as it can get for now. The reduction in active listings due to expiry and homes removed from the market helped to keep the MOI at current level when sellers either pulled their listings off the market or allowed their homes expired. A surge in active listings in Richmond is expected the next few weeks.

Many people in the real estate industry are hopeful that home sales will improve after January, 2013. An up-stick in sales can be expected in the next few weeks. The overall market sentiment will likely remain subdued.

There is a marked difference in the number of active listings between January 2013 and 2012 which had just 1,655 at the beginning of January. The supply of homes in Richmond for 2013 will now take off from a much higher base of 1,945 homes… 18% higher than the beginning of 2012. The surge in listings and moderate sales the next few months will once again result in the MOI reversing. It will result in Richmond’s MOI surpassing 12 months of inventory. A repeat of high MOI for detached homes similar to 2012 can be expected for 2013.

We are likely to see further price erosion in home prices in Richmond. The post
Spot Light On Home Prices In The Hollys” is a typical representation of home prices in Richmond’s neighborhoods. With high supply of homes, weak demand and negative market sentiment, lack of qualified buyers and high home prices will likely take its toll on home prices. Detached homes in The Hollys and elsewhere in Richmond could undergo another 5% to 10% price drop in 2013.

During the period from Dec 01, 2012 to Jan 15, 2013, a study revealed that nine of the ten Richmond detached homes that were sold with 5,000 to 8,000 sq ft land aged between 5 to 30 years, were sold below their assessment values. These homes were on average selling 11.7% below their assessment values.

More price erosion can be expected as home buyers stay on the sideline waiting for home prices to drop some more. Serious buyers when making offers, typically test sellers’ motivation by making low ball offers.

Richmond detached homes are expected to suffer the most in price erosion.

There are currently 576 homes for sale at prices above $1,000,000. With average past 3 months sale around 30 homes, the MOI is at 15.76 months. There are 278 homes over $1,500,000 in Richmond. At an average sale pace of 10 homes the past 3 months, this translates into 27.80 months of supply.  

2013 will be another difficult year for Richmond

The absence of home buyers, dampened market sentiment, and tightened lending rules are expected to result in further price erosion in 2013. The current MOI though better than the past 2 months is expected to reverse when more new listings hit the market the next few weeks. Richmond’s market for 2013 is expected to have persistently high number of homes for sale and below average buying interest.

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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