I've just created a couple of interesting graphs (below) using KREB data to show Rossland real estate trends over the last 3 years. The trend shows general decline in sales prices (ie if you could have sold it for $310,000 in 2009, you should think more in the $280,000 range now). Of course, it is a small market and individual properties may perform differently than the overall market, if they are a special property. As expected, we have also seen that the LIST prices of the properties which actually sold has also dropped. The list and sale trends pretty much parallel each other, with an average 4% difference between list price and sale price.
What is interesting though, is how that compares with the trend in the list prices of ALL properties - including the properties which have NOT sold. The list price trend has INCREASED during the same timeframe - and the 3 year average of all listed properties is about 8% higher than the average list price of the properties which sold. Some sellers just aren't sellers; they may think that they're sellers, but they're speculators, and their properties are languishing on the market for months.
What does this mean for sellers? You have to get realistic about your asking price, or you property just won't sell. You may have heard stories about increasing housing prices in Canada, but let's be clear: that is NOT the case in Rossland. If the average sale price in Rossland in the last 3 years was under $260,000, and dropping, and your house is "worth" over $500,000, it will take longer to sell - because the market isn't there. You may have to re-evaluate what your property is really "worth" if you really want to sell it. Want to keep your prices up and "wait for the market to come back"? Good luck with that. That said, if you have a large, beautiful, and modern home, of course you don't list it for $260,000 - but be prepared to be patient, because there aren't a lot of buyers at the high end at the moment, and there are other options for them.
What does this mean for buyers? Clearly, some sellers have their heads in the clouds, but there are still plenty who are willing to be reasonable. There may be some pricier homes which have been listed for a while, and you may be able to make some low offers and negotiate aggressively. At the very least, their salesperson will be happy that you're giving them a reality check. At best, you could get yourself a nice property which other buyers thought were out of range.
Rossland Sold List vs Sale Price, and All List Price, 3 years ending Sep 2011:
Rossland Sale Price Trend, 3 years ending Sep 2011:
(Blue is house prices, Red is unit prices, including Red Mountain units. Trend line is for houses, as there is insufficient data for a reliable unit trend. Houses in Rossland are very different from each other, so some months may be comparing apples to oranges - the trend line only measures sale price, not what you can get for that price)
*disclaimer: Rossland is a small market, and the value of one or two "outliers" (expensive or cheap) properties can skew the average. For this reason, I used the "median" list price for all properties rather than the average. The median is a bit lower, because it isn't pulled up as much by the million-dollar homes on the market.
If you would like access to the raw data in order to study in more detail, or in information on a particular range of properties, contact Paula Gaul at paula.gaul@century21.ca