As good as your last sale

You’re Only as Good as your Last Sale

Steve Saretsky -

Why Your Neighbours Price Reduction Has a Ripple Effect

The Vancouver real estate market has changed drastically over the last couple months. We used to see multiple offers on basically every property, now you’re lucky if it sells (for detached houses anyways).

Despite the dramatic slow down in sales which I’ve talked about previously in articles such as Demystifying the latest Vancouver Market Stats and Staggering Numbers Show Impact of Foreign Buyer Tax sales prices remain relatively the same. At least to the untrained eye…

The price drops have already begun. In fact they started in areas like Tsawwassen & Ladner months ago. Now they are becoming more and more evident in other areas. Including much of Metro Vancouver.

I tweeted the staggering price increases of areas like Tsawwassen and North Delta which saw the biggest price gains year over year. When I tweeted these numbers back in June it showed Tsawwassen detached homes had a price gain of 48% year over year compared to June of 2015. North Delta had a 47% price increase vs June of 2015.

These numbers were pulled using Median sales price from REBGV (Real Estate Board of Greater Vancouver).

Real estate price increase
Tsawwassen and North Delta price gains

Now let’s look at July stats from the board.

Tsawwassen year over year gains dropped to 44%. North Delta dropped to 31%. That’s a 16% drop in one month for North Delta. Again this is Median Sales price which is considered more accurate than average and MLS HPI Benchmark. I discussed this in article written by the Vancouver Sun. 

Real estate price gains
Tsawwassen & North Delta Price gains July 2015

As you can see this market is highly volatile and can change on a weekly basis. If you want a good example of this check out the graph below.

Tsawwassen price increase
Tsawwassen Median Sales price $927,500 in September 2015.

Tsawwassen detached house prices jumped from $927,500 in September 2015 to $1,359,500 in January 2016. A $432,000 price increase in 4 months!

Similar price jumps can be seen in other areas. I just like to pick on Tsawwassen because it saw the largest price jump at one point. It’s also where I got my real estate start and where my Mom has been doing her business for the last 12 or so years.

So what does this all mean? With the market slowing and the announcement of the tax we are starting to see some serious price reductions. And as a seller you’re only as good as the last comparable in the neighbourhood. So once your neighbour reduces his price and sells low it sets a new precedent in the area. This then starts a domino effect.

A saw couple Realtors bantering bank and forth on Facebook the other day saying sellers simply won’t sell if they don’t get the price they want. Maybe, but when has that ever happened? People always need to sell for various reasons. And if they need to sell they’ll have to accept what the current market is willing to pay. And it appears the current market is willing to pay less and less.

Here a couple recent price reductions..

Tsawwassen price reduction
Recent Price reduction in Tsawwassen

Or how about this nearly $300,000 reduction in East Van.

Price reduction East Vancouver
East Van Price Reduction

If you want to sell your house then your price will have to be competitive.

So just like when your neighbour sold his house several months ago for a record high price, instantly raising the value of your home, this time the reverse will be done when he sells low.

You’re only as good as your last sale.

Join the Monday Newsletter

Every Monday morning you'll receive a short and entertaining round-up of news on the Vancouver & Canadian Real Estate markets.

"*" indicates required fields

The Canadian Economy

Steve Saretsky -

Happy Monday Morning! We got a string of new data this past week confirming inflation in consumer goods, and housing are proving to be more than transitory. Canada’s consumer price index continued to drift higher with prices hitting an 18 year high, up 4.7% from last October. The recent floods in BC...

Steve Saretsky -

The calls for impending interest rate hikes continues. CIBC’s chief economist, Benjamin Tal, was out recently suggesting the Bank of Canada could hike its benchmark interest rate at least six times beginning in early 2022. “I think there is a risk of getting into the market at today’s rates,” noted Tal....

Steve Saretsky -

The BC Government announced it is looking at several cooling measures for the housing market in 2022. They have highlighted two measures. The first is an end to the blind bidding process, and the other is a mandatory “cooling off period” which will allow any buyer a 7 day recession...

Steve Saretsky -

The Bank of Canada continues to slowly drain liquidity after flooding the system with a firehose of cash during the pandemic. Bank of Canada governor Tiff Macklem announced the end of Canada’s QE program (also known as money printing). Furthermore, in Macklems words, “We expect to begin increasing our policy...

Steve Saretsky -

Consumer price inflation ripped higher in September, surging 4.4% year-over-year, the fastest pace of price increases in 18 years. Let’s discuss this further. We have an inflation problem and the Bank of Canada remains of the view that inflation will be transitory. Although they really can’t say otherwise, for if...

Get the Saretsky Report to your email every month

The Saretsky Report. December 2022