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Bowen Island/Gulf Islands - help please?
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03-22-2014, 10:15 AM,
(This post was last modified: 03-22-2014, 03:33 PM by Skook.)
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RE: Bowen Island/Gulf Islands - help please?
Jimmy,
You posted in the thread ‘Sunshine Coast Price Drop: How low will they go?’ Quote:I've made this point on Vancouver Price Drop and it may not apply to Sunshine Coast places, but I honestly believe we are going to see drops of up to 80% in certain areas of the Lower Mainland BUT (and that's as big a but as I can make it) the drops are misleading in a sense, because the asking prices were such fantasy... e.g. a house went from 1.75 mil in 2007 to an asking price at peak of 8.888 (etc) mil in 2012 - now being offered for 5 mil 2 years later, and assessment is 3.5 mil. Thinking about your post, I believe the MLS HPI and Benchmark Price may help explain why a house sold in 2007 at $1.75 mill is then listed in 2012 at $8.888 mill. The REBGV has been using the MLS Home Price Index method of reporting for years and, in fact, was the first real estate board to do so. According to the MLS HPI Guide, it is considered the best method for indicating market trends - is it rising or falling. So, if you bought your house when the market was at a certain level and then you go to sell it after the market has seen a substantial rise then you will price your property based on the current market conditions - and, tack on a bit extra to give you negotiating room. Now, if the market has peaked and you go to list when its declining you more than likely won’t want to accept that decline - in your mind you should still be able to sell at those peak prices. RFM looks at the pitfalls facing sellers regarding this situation in his excellent post: ‘Pricing Property in a Declining Market’. Last August, I made an attempt at understanding the HPI and Benchmark Price as it pertains to the Sunshine Coast in the thread ‘Interpreting Sunshine Coast Real Estate Sales - The 3 Amigos’. I was attempting to understand why Boards were reporting sales by Average Sale Price, Median Sale Price, and Benchmark Price. That thread is a looooong read, but it might be worth it and besides there are some interesting graphs especially the one for the SC showing the benchmark price from 2003 to 2013. When I was putting together that thread, I did some comparisons with other markets; however, I've never posted them. One area I looked at was Bowen Island, so I have just updated the data and here it is: The REBGV began to offer separate Bowen Island Benchmark Price data in January 2012; my guess is that prior to that the figures were tossed in with West Van data. So, based on what data we have, we can see the BI Benchmark price peaking in May, 2012. The trendline is from that month to the present. If you look at this February’s SC Benchmark Price chart, you will see the Benchmark Price peaked in July, 2010 and judging by the graph I don’t think the message really sunk in with sellers until mid-2012. I think the Bowen Island graph is showing the same pattern and, if so, reality will kick in mid or late 2014. I will plot the Benchmark Price each month for BI and post it to this thread. Now, as I mention in my ‘3 Amigos’ thread, the Benchmark Price is based on a ‘typical’ Benchmark property in each market. It just so happens that Vancouver Realtor Kevin Wong has posted the ‘MLS Home Price Index Benchmark Properties Guide’ for the REBGV to his website stats page (scroll down to the bottom). There are 648 pages in that pdf, but Bowen Island leads the pack with 1-storey homes on page 2 and 2-storey homes on page 3. Wong has also posted the ‘Home Price Index Guide’ which explains in great detail how it works; however, if you are like the majority of us, even with the guide the mechanics behind the MLS Home Price Index will remain a mystery. |
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