2013 will be a challenging year for home sellers
The current supply of homes for sale in Richmond at over 10 months of inventory is putting pressure on home sellers who want to sell their homes in a hurry. It is very challenging for home sellers to deal with when buyers are in no hurry to buy. In spite of low interest rates at all-time-low of 3.0% or less for 5-year fixed mortgages, buyers are staying on the sideline. Many resale homes are languishing on the market due to buyers not willing to pay the prices sellers are expecting from their homes.
The first salvo from Parc Riviera
Parc Riviera, a riverfront project in north-east Richmond is a 20-acre master planned community with five acres of parks and riverfront trails. The project featured a Clubhouse and a Daycare is planned for the area. The developer is now offering pre-construction sale of condos starting from the mid $200,000’s. The selling prices for the first phase of condos and townhouses at Parc Riviera could set the stage for Richmond home prices to come down. The ad placed in Vancouver 24 Hrs and Richmond News boldly advertised townhouses selling from $369 per sq ft and condos from $386 per sq ft. With condos starting at $277,900 and townhomes starting at $399,900. Current selling price per sq ft for resale wood-frame condo in Richmond is around $405 to $420 per sq ft. There is a price advantage for home buyers to consider buying their new homes at Parc Riviera instead of the more expansive resale homes elsewhere in Richmond.
How resale condos and townhouses compared?
Home prices at Parc Riviera are priced some 10% to 15% lower than the selling prices of resale condos and townhouses transacted the past 3 months. Current resale lowrise wood-frame condos and townhouses are priced from $435 to $475 per sq ft. Recent condos in Richmond were sold at prices from $400 to $450 per sq ft.
The overhang of too many homes chasing too few buyers could only mean lower selling prices for sellers. Motivated sellers would take low-ball offers to sell their homes. A likely scenario is for condo and townhouse prices to come down to $400 per sq ft or lower. Condo owners who bought the past 3 years when selling in today’s market, stand to lose thousands of dollars.
Disclaimer: The opinions expressed herein are not intended to be a forecast of future events, a guarantee of future results or real estate market patterns, and are subject to change based on market and other conditions. The information and discussion on topics of interest are not intended to be a comprehensive discussion of the strategies or concepts mentioned.