The Million Dollar Question

July 17, 2013

How much lower?

So far, after 2 years of lackluster demand, Richmond detached home prices remained at lofty level. The drop in median price in Richmond according to data from the real estate board of Greater Vancouver registered a mere 5% decline. But, in Seafair neighborhood, older homes with lot sizes between 7,000 to 8,000 sq ft had dropped in price from $1.0 million in 2011 to the current level around $850,000 – a drop of 15%. Some recent sales showed that sellers were taking offers below $800,000.

Tracking the rise in detached home prices in Richmond

By the middle of 2005, Richmond’s detached home median price surpassed $500,000 and reached the peak in 2011.  In 3 short years, Richmond’s detached homes  gained 49% from $504,000 in 2005 to $749,000 by mid 2008.  The credit crunch in 2008 knocked off 9% of the gain when the market experienced decline for about 12 months. Richmond median home prices

When fear subsided, and fueled by easy credit and low interest rates, Richmond median price gained another 42% from 2009 to $980,000 by 2011. In total, Richmond’s detached homes gained an incredible 94% in value within 6 short years from mid 2005 to the middle of 2011 as illustrated by the graph above.

Gradual price decline to continue

By the middle of 2009, over 50% of the detached homes listed for sale in Richmond were over $1.0 million. Currently, homes over $1.0 million dollar represent 63% of the total detached home listings in Richmond. Richmond million dollar homes

The lack of buying interest and tighter lending will continue to exert pressure on home prices in Richmond. The trend for lower prices can be expected as there are still too many homes in the market competing for buyers.

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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