Friday, May 28, 2021

Vancouver Neighborhoods All Over the Board

Neighborhoods do matter. People will pay a premium to live in a neighborhood that offers something extra over another. Better schools, closer to services and shopping, views, access to highways or closer to major employment centers, and so on. Vancouver is a large enough city that it has a full range of neighborhoods across every urban and suburban subset. Just out side of town Vancouver even has some semi-rural neighborhoods with homes on small acreage.

But neighborhoods are hard to measure without a local real estate pro. Simply looking at a map or stat sheet with median prices will not tell the tale. Sometimes a better neighborhood has a lower median price. For example a neighborhood like Fairway Village in Vancouver has a lower median price than Felida. But pound for pound or foot for foot, Fairway Village is spendier. You see, Fairway village is a subset of Cascade Park East and it is entirely comprised of homes aimed at retirees and most are two bed units. These are smaller homes and thus tend to be a bit less expensive than the much larger homes typically found in Felida. 

Often times the median price of a neighborhood is driven by the fact that the area is confirming with lots of similar houses either big ones or smaller ones and thus one is lower than the other. Other times one neighborhood may have very similar styles of homes yet be priced very different, here is where the classic "location" issue arises. One mind find that lower priced areas are not always undesirable. The Esther Short neighborhood is one of the hottest neighborhoods in the city, yet the median price in that neighborhood is well below the citywide median at only $350k. What gives? Esther Short is downtown and the waterfront. The bulk of the homes in the area are mid-rise and high-rise condos or apartments with an average size of less than 1000 square feet. So the median price per square foot is really high at more than $350 per foot. Contrast that with the expensive Riverview area the most expensive area at a median price over $1,000,000 but an average home is around 3000 sf. That neighborhood averages about 300 per foot. I wrote about price per foot and how it is rarely a good indicator of real value, but it shows that median pricing alone is only part of the neighborhood equation. 

Below is a map of Vancouver with pricing as of last month for broad neighborhood areas in and around the city. The overall median price for Vancouver was $423,000 at that point. 

Friday, May 21, 2021

Despite Craziness in Market, Buyers Won't Bite on Overpriced Listings

The title says it all. Buyers are getting desperate in the market as any home that is priced near its market value is quickly inundated with offers often well above asking. Yet a home priced 5% over received market value sits for weeks without offers. This is a bit of an unusual situation as the bidding war often leads to a final price several points over ask anyhow. Buyers seeking to avoid the crazy auction style offer scenario should look at houses they "feel" are overpriced as these could be an opportunity to avoid giving up inspections and all of that in favor of a traditional negotiation with the seller. Maybe offer a little less than asking. Buyers should embrace homes that are priced a tad higher as they may end up with a better deal without the hassle of losing five or six deals being outbid before finally paying too much in a bidding war.  

A good buyer's agent can guide buyers through the process of evaluating value and suggesting offers that have a good chance of success. Buyers should not be afraid of writing an under ask offer on a home that is overpriced. Writing such an offer on a property that is priced well is a fool's errand. Too many buyers are giving up vital protections such as the important inspection contingency to strengthen their offer against a half dozen others and if they simply look at a home that is a bit overpriced, they have a stronger negotiation position with the seller and will not have to give up important protections.

Buyers should embrace slightly overpriced listings as an opportunity to avoid the crazy auction style offer systems and remember that if a buyer is using a loan product the bank will not allow them to overpay for the house. The purpose of the appraisal in a transaction using a mortgage loan is in fact to protect the bank's position. It also in effect protects the buyer from overpaying for a property. 

Buyers can navigate this challenging market under the good service and advice of a local expert agent.

Friday, May 14, 2021

Spring Listings are Here, but not in Typical Numbers

That classic spring perk in listings has definitely happened, I am noticing more and more new listings showing up on the MLS. However there does not seem to be that heavy load of inventory that traditionally hits the market when the sun starts shine each spring.

Spring is also when many buyers come to market and they may be disappointed to find little options. That said, I feel like the spring rush of buyers is also a tad lackluster and that could be a blessing in disguise. Buyers have had a hard go of it over the last year, a little less competition might help those frustrated with the situation to finally get their home.

This is not to suggest that things are not tight, they are as tight as I have ever seen it. According to the data we are measuring inventory not in months or even weeks but DAYS! 12 days of inventory for the classic 3 bed 2 bath home in Clark County. Yikes! I ran a report on the local MLS showing the last three months of homes that are classic starter homes. Three bedrooms, two bathrooms with 1200 to 1700 SF. All across the county. Take a look at the results:

You may notice that the gap between new listings and sales did widen just a bit suggesting that a little extra inventory is now available. Maybe we can start using weeks agin to describe inventory in the next month or so. The second chart shows that the average list price is a tick higher than the average sold price. That shows market pressure is high. Remember most closed sales are 30 to 45 days behind the current market. A classic starter home in Clark County will set the buyer back about $400,000 that's just where we are right now. It is hard to see but the closed price is a tad higher than the list price showing that market pressure is getting sellers more than asking in general.

Buyers looking for a "deal" are headed straight to disappointment. Having an experienced agent that can guide buyers has never been more important. Some sellers are overpricing their homes and some are pricing to move. Buyers need to know when to be aggressive with the offer and when there is some flexibility in price. A house priced for quick sale will have multiple offers in the first day and likely be in contract in a matter of hours or a couple days. Overpriced homes will still get a lot of looks but may not get multiple offers or may have multiple offers under asking. 

Buyers are well advised to use a local experienced pro to help guide them through this process. Even the best and most experienced Realtor® can't guarantee their buyer will win the day, but the best agents can give sound advice to ensure that if you don't win the offer you are possibly better off without it. There are many strategies buyers can use and some agents tend to focus on just one. I like to give my buyers the full range of options with a cost - benefit analysis and a "pros and cons" approach so the buyer can feel optimistic that they may lose a battle but they will win the war.

Friday, May 7, 2021

May is here, will the listings arrive with it?

The ultra tight inventory locally remains an issue for battle weary buyers. May is traditionally a month that see a boost in listings so let's hope that holds true in 2021. Buyers should continue their quest for the elusive home. But buyers should also be sure to look at home priced at least 3-5% lower than their maximum affordable price. With multiple offers the norm, buyers will have to bid properties up a bit to get their offer to the front of the sellers list. A buyer approved for a $400,000 house will need to consider shopping in the $380,000 to $390,000 price range so they have wiggle room in multiple offer scenarios. That strategy will help speed up the chance of landing a house, but it is no guarantee.

I have a few listings coming up this month so if that is true among my colleagues as well, then perhaps a wee bit of relief is on the way for beleagured buyers. Sellers in the mean time are comfortably perched in the proverbial 'catbird' seat. Sellers should also be mindful of trends in listing activity. If things begin to perk up for buyers the window for that top dollar opportunity may tighten.

Stay on top the news and don't get too greedy, the market can be fickle and the crazy state of world affairs means things could change direction at a moments notice. What is relief for buyers could be misfortune for sellers. Happy hunting.