When people get started with their property searches, there is often a period where buyers need to compare relative values in different area. That’s because, while some individuals are firmly committed to a very specific area for the purchase of their home or investment property, most are willing to consider a few different options as far as neighbourhoods go, depending on how much further their dollar will stretch in second or third-choice areas.
Ideally this period doesn’t last too long, since it’s actually quite difficult to focus on multiple areas and property types at the same time. It’s better to have laser-like focus on a particular property type for a particular area, at least as far as efficiency is concerned.
All that said, recent turbulence suggests that those who have been looking for a prolonged period, let’s say more than six months, may benefit from performing the exercise again.
This is because market movements have been uneven across Greater Vancouver and the Fraser Valley.
For example, if a person had begun their condo search about a year ago, thinking they might like to be in West Vancouver, but having turned their attentions to Squamish after comparing relative values, would be interested to know that benchmark prices for Squamish condos are flat over the last year, while West Vancouver condo values have dropped by almost 20%. In other words, relative values between the two areas, which helped to determine where the individual would focus their efforts a year ago, have shifted dramatically.
Those looking for townhomes in a particular area will often try to see how far out they would need to go to get into the detached market. Port Moody townhomes are down less than 5%, while detached is down more than twice that in areas like Coquitlam and New West, among others. That difference translates into tens of thousands of dollars of purchasing power. If the Port Moody townhome seemed like the better (or only) option twelve months ago, the Coquitlam detached property may now be more appealing.
Price brackets are also behaving in an equally uneven fashion, which only adds an extra layer of potential reconfiguration for relative values, and suggests a fresh start approach may be warranted even if you are entirely focused on one area. The properties in the price block directly above the one you've chosen to look at may look different than it did when you set your budget.
If you’ve been property hunting for a prolonged period and think it might be time to reassess relative values, make a strategy with your agent for getting a refreshed perspective on things.
Finally, such considerations are not only important for buyers. Sellers who have had their properties listed for prolonged periods should be doing consistent reassessments of market conditions to maintain a realistic appraisal of the relative value of the home they are trying to sell.