Multiple Offers on Downtown Condos Plummet. Prices fall 5%.
There’s been a lot of questions lately asking me how the condo market is doing. Especially since the announcement of the latest lending policies. I wrote a post last week How The Stress Test Could Curb Demand. While it’s still too early to tell if I’ll be right there are clear signs of a slowdown.
I’ve said it before, and i’ll say it again. Condos will not be exempt from any sort of correction if the market turns. Think about it, if a detached house and or townhouse price comes down what would be the value in buying a condo?
So what am I seeing with downtown condos? A huge drop in multiple offers. Or, rather a huge drop in condos selling over asking price.
I went back and researched condos sold in the downtown area for the first 8 days of each month. Areas included (Yaletown, Downtown, West End, Coal Harbour). I counted how many sold for over asking price. Here’s what I found:
April- 44/86 condos (51%) sold over asking
May- 44/72 condos (61%) sold over asking
June- 58/89 condos (65%) sold over asking
July- 40/62 condos (58%) sold over asking
August- 27/50 condos (54%) sold over asking
September- 12/42 condos (29%) sold over asking
October- 6/43 condos (14%) sold over asking
So downtown condos went from 65% of condos selling over asking price in June to a measly 14% in October.
Downtown Vancouver Condo Prices
It should come as no surprise that multiple offers drive prices way up. You get into a bidding war, you get competitive, and your emotions get the better of you. The winning buyer almost always overpays. Perhaps a coincidence that as the number of multiple offers dropped the prices followed?
The chart above shows Downtown Vancouver condo prices have dropped 5% since June. This was determined using the boards benchmark. Even using median sales price shows a 7% decrease.
It appears sanity is being restored to the downtown condo market.