Older Detached Home Prices - West Richmond
An analysis on older west Richmond detached homes showed that the home prices followed the general housing market. The homes selected for this study were based on older homes located in West Richmond. The homes were over 25 years old and with lot sizes between 7,000 to 9,000 sq ft. These homes were sensitive to demand from home builders, and they helped to set the pricing trend based on builders' activities.
When home builders' were competing for building lots, they pushed up the selling prices for these west Richmond odler homes. Up until April 2008, home builders were actively buying up these older homes. These homes were torn down to be replaced by million dollar homes. Home prices for resale west Richmond older homes peaked in the first quater of 2008.
City assessment value
The city assessment value of a home is derived from sales transacated after the previous year's assessment. The value is an aggregate value of homes in the neighborhoods, and it is a lagging indicator. City assessment value tends to be lower than the market value in a rising market. During the boom years from 2005 to 2007, the selling prices for most fo these west Richmond detached homes were found to be 12% to 15% above the city assessment values. Conversely, when home prices drop for a time period, the market values for homes sold may be lower than their city assessment values.
The following table helps to track the housing market values for older detached homes in west Richmond in relation to their assessment values.
| Time Period | No. Homes | Av. List Price | Av. Sold Price | Av. City Value | % Var. Sold vs
List price | % Var. Sold vs
City value |
| Oct-Dec/07 | 24 | $689,100 | $680,100 | $638,400 | -1% | +7% |
| Jan-Mar/08 | 27 | 652,800 | 683,900 | 600,800 | +5% | +14% |
| Apr-Jun/08 | 14 | 691,100 | 687,700 | 609,400 | -2% | +13% |
| Jul-Sep/08 | 7 | 672,100 | 633,400 | 607,200 | -6% | +4% |
| Oct-Dec/08 | 13 | 614,500 | 574,400 | 614,500 | -7% | -7% |
| Jan-Mar/09 | 24 | 608,200 | 578,400 | 635,000 | -5% | -10% |
| Apri-Jun/09 | 53 | 677,100 | 653,300 | 629,700 | -4% | +4% |
Market Value Vs City Assessment Value
In the above study, the average home selling price for the the last quater of 2007, first and second quarter of 2008 were 7%, 14% and 13% higher than their average city assessment value respectively. By summer of 2008 with home prices dropping, these odler homes were selling at just around 4% above their city values. The market down turn ithat started in the spring of 2008 and into the first quater of 2009 resulted in these older homes selling at 7% and 10% below their city assessment values respectively.
The recovery in the spring of 2009 had resulted in the housing market rebounce. Home prices made a dramatic recovery from minus 10% to and average of 4% above their city values. The strength in the market rebounce is projected to result in these homes selling at about 10% or more above their city assessment values in the second half of 2009.
We will continue to monitor and report on the pricing trend each quarter.
Current real estate news for metro Vancouver and Fraser Valley can be viewed here.
Return to Homepage.