Hearing about Vancouver-area home price increases can be exciting, or perhaps worrying, depending on your perspective. On average, Metro Vancouver home prices are up 19% over a year ago. As long-time readers of my newsletter know, I’m not a huge fan of averages. What's more important are the factors affecting the value of one particular property, whether house, condo or townhouse. Following are a few observations.
While recently conducting a comparative market analysis for a Kitsilano condo, the disparity between market “stats” and market reality was striking. The raw stats for Kitsilano condos over the past five years shows just a 3% increase in average values. But this particular unit is clearly worth close to 20% more than when it was bought five years ago. Many Kitsilano condo buildings are relatively old; many also have relatively unfavourable depreciation reports and/or have deferred major work. (Of course, there are exceptions!). In contrast, the current owner of the condo in question bought very well five years ago. The condo is in a very desirable area of Kitsilano; in a quality concrete building; is well-run with a proactive strata council; and has a healthy contingency fund, with no deferred maintenance. The unit is sure to sell quickly when I list it in September; most likely for far more than the owners expect. Always buy the best that you can -- i.e., as many "best" attributes as possible -- and you're likely to be well above any "average" years down the road.
A five-year average sales price increase of 39% for Mt Pleasant condos on Vancouver's east side seems impressive, but is there more to the story? Mt Pleasant includes an up-trending section of Main St., very popular with first time, generally younger and relatively prosperous condo buyers. Five years ago most condos bought and sold in Mt Pleasant were in older buildings, with few amenities. The rapid development of new, large condo buildings with much higher price points over the past five years has increased the average sales price, contributing to the impressive 39% gain. While a blurring of the traditional west side - east side divide and a shift to condos for those priced out of houses is also at play, it would be erroneous to assume that, on average, a condo in Mt Pleasant is worth 39% more than it was five years ago.
North Vancouver single family house prices have increased, on average, 17% in just the past year. While price increases for individual properties can vary substantially, it's interesting to note that only 10% of homes currently on the market are priced at less than $1 million. Unlike West Vancouver and Vancouver's west side, however, prices at the upper end are not yet regularly topping $3 million -- at least for now.
I’ve recently sold a couple of homes in Port Coquitlam. The competition for entry-level single family homes is fierce, with sales prices often 15% over asking prices. Many young families -- as well as property speculators -- are buying into parts of Coquitlam and Port Coquitlam as they realize this is one of the last relatively affordable single-family areas relatively close to Vancouver. A new Skytrain line will also help with accessibility. Home values are rising so quickly that sales numbers are not relevant even just two weeks after a sale. When listing a home, Realtors have taken to contacting other Realtors before the latter's sales are even processed for the actual selling price, which may be well over the asking price. It all feels somewhat like the Wild West.
Welcome to another active and unpredictable fall real estate market! If you plan to make a move, now's the time. I'm happy to help and ready to go as well. Feel free to contact me anytime - a quick email or phone call at 604-328-9006 is all we need to get started!