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2013 Pender Island Assessments – A quick analysis

By Howard Sanders • January 16th, 2013

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.

Category

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.

Comments

Will you be posting an update vis a vis the 2014 assessmens?

 

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