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It’s a little bit late this year, but I thought it time to analyse the assessed value placed on Pender properties for 2014 and see how this reflects our market and the current trends.
As usual, I have taken a random sample of 5 current listings in each property category to gain an average change and although not entirely scientific it does show some occurring trends
|Category||2014 Residential compared to 2013||2013 Residential compared to 2012|
|Non-View||Minus 6.23%||Minus 8.77%|
|Lakefront||Too little data||Minus 10.79%|
|OceanView||Minus 4.92%||Minus 6.66%|
|Waterfront||Minus 8.8%||Minus 4.91|
|2014 Bare Land compared to 2013||2013 Bare Land compared to 2012|
|Non-View||Minus 4.8%||Minus 9.70%|
|Lakefront||Too little data||Too little data|
|OceanView||Minus 2.78%||Minus 5.42%|
|Waterfront||Minus 11.46%||Minus 5.43%|
Again, like last year, every category is a minus figure over 2013. This means that the correction in our market is still occurring and we have indeed seen a correction in the last two years of approx. 20-30% overall. Looking at the figures above it also shows that all categories, with the exception of waterfront, has had less of a reduction than the year before implying that the correction is working and value reductions are slowing. Waterfront, on the other hand, has been more overpriced since 2008 than any other sector being reflected in assessed values that are almost double the reduction from 2013.
Knowing our Pender market this is generally correct, with those 5 waterfront sales so far in 2014 being sold under $750,000. Waterfront sales have been challenging recently because list prices were out of step with the market, but with another drop in assessed value and lower sale prices it seems this sector is rapidly coming in line with the rest of the market.
In the good news column I can say, with some reservations, that our Pender market appears to be getting better. We have had good sales volume so far in 2014 with 13 sales compared to 6 from the same time in 2013. Our inventory is also decreasing over time which you can see from the charts below showing that month to month the volume of current listing is less from 2012/13/14YTD.
A drop in inventory puts downwards pressure on choice and upward pressure on prices as our market goes from a buyer’s to more balanced. It is often evidence of the start of a recovery but I will wait to see what happened for the rest of 2014 before I declare the down market on Pender to be over. It does, however, look much better than it has for the last 5 years. To maintain this more ‘upward’ trend, pricing real estate is still the key to making a sale. Click on images below to enlarge
Howard Sanders March 2014
This pristine 3 bed,2 1/2 bath, 2000sq.ft south-facing ocean and lake view home has it all! View decks in large living room & kitchen, generous dining room with European woodstove, loft master bedroom with private view deck & ensuite with underfloor heating, office, 2 car garage, auto start generator, 2 sheds -- one with hydro, plus low maintenance landscaped garden with greenhouse & irrigation system make this a move-in ready island dream. It even has dedicated off-road parking space for boat or RV! New roof 2008. All windows & sliding doors replaced in 2008 with high quality Euroline thermal units with steel inserts for security. On sewer, municipal water & with internet access. All measurements to be verified by buyer.
Once again most of us have received our property assessments for this year so I thought I would do another quick analysis to see if any trends are emerging which may confirm what we have been seeing in the general real estate market over the last 12 months.
To do this I took 5 random samples of currently listed properties on Pender in each of the categories below and averaged out any change from last year. Again, this is not a definitive analysis but it does show some interesting trends.
2013 Residential compared to 2012
2012 Residential compared to 2011
|Non-View||Minus 8.77%||Minus 4.85%|
|Lakefront||Minus 10.79%||Minus 4.08%|
|OceanView||Minus 6.66%||Minus 2.73%|
|Waterfront||Minus 4.91||Positive 4.32%|
2013 Bare Land compared to 2012
2013 Bare Land compared to 2011
|Non-View||Minus 9.70%||Minus 4.83%|
|Lakefront||Too little data||Minus 5.45%|
|OceanView||Minus 5.42%||Minus 3.47%|
|Waterfront||Minus 5.43%||Positive 5.2%|
The first thing to notice from last year is that every category is a minus figure, meaning that assessment values on Pender seem to have universally corrected. Of course there are always exceptions, but the purpose of this exercise is to identify any overall trends and any 2013 assessments that were higher than 2012 were also included to achieve the above averages.
Another obvious trend is that both waterfront residences and waterfront bare land have both gone from a positive increase in 2012 to a negative decrease in 2013, a swing of close to 10% in both categories. Also, if you average out the percentage change for all categories over the last two assessment periods we get an average of Minus 9.61% for Residential and a minus of 7.88% for bare land.
Interestingly, this ties in nicely with a drop in our market value within the last 12 months on Pender Island of approx. 10%. So, whereas individual assessments are sometimes wildly inaccurate on the Gulf Islands, the overall trend of the assessed value correction seems to be in line with our current market value.
The above analysis goes to the heart of what is happening here at present. There has been a major correction in the Canadian Real Estate market, felt from coast to coast. Sales volumes are dropping everywhere, despite a small average increase in prices. This always happens in a correction. Sales volume is always the first to be affected with price drops always lagging behind, but they are catching up fast.
Most of the assessed values that we are seeing on Pender for 2013 are in line with 2006-2008 values, showing what damage the financial meltdown of 2008 did to our real estate values and proving that real estate is like any other risk based investment. In fact it is this very fluctuation year to year that allows for profit taking in this business, just as in the financial markets.
What can we take away from this? For the seller, list price is key. Overprice your home in this market and it will languish until the price comes down to current market value. Buyers know this and they are not stupid. It is those sellers who can recognise this trend and price appropriately who will attract offers at present. For buyers wanting to get into a recreational property, or who are selling in an urban market and coming to a rural one such as Pender to retire, this is a great opportunity and one they shouldn’t miss out on!
And what about the future? I wish I had a crystal ball and could make some definite predictions but everything is so volatile that it would only be an educated guess.
You still want it? Okay then. I think that those properties listed with the above information in mind will most likely sell this year, but I do feel that 2013 will still be flat in terms of the amount of properties sold. I feel it may get better in Q4 of this year, with a slight improvement in 2014, but it may take a while to come out of this dip so plan accordingly.
Please join me in an updated walkthrough of this attractive 750 sq.ft., 2 bed, 1 bath waterfront home on 1.1 acres close to the ferry terminal at Lyall Harbour on Saturna Island, part of British Columbia’s Southern Gulf Islands.