The rules of assessment have changed and today more than any other time in our market, predicting the value of particular property can feel like taking aim at a flying bat.  The reason for this can be attributed to one fact:  the buyer.  We understand value is in the eye of the beholder, in the past, we could count on certain characteristics of the buyer and the significance of how certain features affected their perceived value of a home. 

However, since the foreign buyer, now the most prolific of all purchasers, has been the dominant driver over the past 2.5 years, naturally a different set of values has overtaken our previous system.  As with any shift, the result is a new direction.   Complicating matters further is we now have 2 or even 3 distinct set of buyers and a moving market. 

The result? A bit of mayhem.  How does one value a property that has differing values to differing segments of the market. At the risk of offending some, but in the spirit of what this newsletter is all about (honest and reliable market information), we can categorize the buyers into 4 types in no particular order:

 

  1. Typical Canadian buyer
  2. Foreign Asian
  3. Foreign Persian
  4. The builder – who is then sub-catagorized into
    1. Building for himself
    2. Canadian Spec
    3. Persian Spec
    4. Asian Spec

Valuing the property

Let’s review some of the key features which drive buyers:

Way out in first place is THE VIEW – this is usually considered by all, but ability to pay for this feature may have been won out by the Asian buyer.  10 years ago a view might be worth 50,000 to 100,000, but today, that same view can likely be worth$ 200,000 to $1,000,000 or dare we say more?

  1. The view has become so important to the buyer that in many cases, lovely homes, just won’t and don’t sell without one. Selling a non-view property in this market takes a lot more time and those sellers may have to be prepared to take less than what seems fair.  The dump down the street with a good view will sell before their higher priced immaculate home.  When it comes to views there are categories which we have tried to rank by popularity (being popular is money in the bank)
    1. Huge panoramic views – Mount Baker to Vancouver Island
    2. South facing views which include downtown (the bridge in particular)
    3. Close in water views (south)
    4. Westerly views
    5. Partial views (some obstruction)
    6. Peekaboo views – these hardly count for anything at all these days, infact maybe considered as no view and a disappointed buyer
    7. River views – rivers tend, in general, to turn more people off than on
    8. Mountain views – nice but no more money for this feature

  1. Location:  We all know location is critical, but area out of favour with the Foreign buyer have been left behind in this market.  Ambleside, British Properties then Dundarave (though several Persian builders recently jumped into multiple offers on 2285 Ottawa – listed at 1.99 and sold for 2.311 with 11 offers for an 8,890 sq. ft lot with a view of course.  Of late there has been movement to the west with many of the view properties in Bayridge proving to be desirable and also a progress as far out as Gleneagles with pockets of that area such as Summit Drive being bought up and replaced with very large new homes.  It’s fair to say this area is still more preferred by the typical Canadian buyer though.
  2. Size of land– Obviously the bigger the better, the bigger land the bigger the house, the bigger the house, the more money.   Asian buyers typically like larger lots.
  3. Schools/Neighborhoods – Great schools have buoyed up the price of real estate for years, but good schools are extremely important to the Asian population.  Many of those buying real estate are coming here for the excellent schools and a western experience for their children.  In West Van, High rankings of Ridgeview, West Bay, Sentinel & West Van High.  North Van’s Edgemont village has always enjoyed the highest prices of homes due to Handsworth High School and Canyon Heights, Highland & Montroyal all have excellent ratings as does  French Immersion at Cleveland.  Getting into the catchment of these areas is paramount for buyers from all categories
  4. Specific streets in specific neighborhoods – Occasionally we see a run on a certain street – for examples the 1100 block of Haywood in Ambleside in 2011 or Millstream in the British Properties. This has spurred homeowners to put their homes on the market to gain additional $250,000 or more dollars that just wasn’t there the year before.  We have seen this sort of madness hit a street with the buyers buying them up for their friends, driving prices to the point of ridiculousness. 
  5. Side of the street - North Side of the street is preferred by Asian buyers, completely debunking the southside which ruled for years.  This is a Feng Shui thing..  Feng shui has affected many other aspects of the property that if favorable will increase value, but if unfavorable the opposite will be true.  Just look at any home or property that happens be located at the end of a T intersection.  It’s like the kiss of death in this market.  Things like the number of the house, the location of trees, water etc, can play a large part in who much a home may or may not get.
  6. Situation &  floor plans– Door on the north side, view to the southside is best.  Facing any other way means a discount on price.  Front doors opening to the view is a big no no – as belief is your wealth goes right out the window.  Some of these flaws can be corrected by erecting walls or mirrors and such.  Still most prefer 3 to 4 bedrooms up with en-suited master, office on the main, large family room off kitchen, potential to suite down for nanny and a great guest and office area would satisfy most – oops forgot the media room, wine room and 3 car garage…
  7. New homes – Though everyone likes something shiny and new, Canadians and Persians can appreciate a good renovation.  Chinese however make a point of the age of the home as being an issue.  Even 7 to 10 years is considered old.

 

Valuations that take these points into consideration are likely to be more accurate.  Depending on the property we take upwards of 2 hours to put together a full evaluation including several other important factors such as

  1. Tax assessed value – here we note what properties in the neighborhood are selling at in conjunction to their assessed values
  2. Comparable properties (listed, sold and what didn’t sell, along with days on market, and features)
  3. Yearly trends in the neighbourhoods and schools
  4. Historical statistics on market value and where we are today
  5. Just knowing what’s selling an what’s not.

So you can see it takes a great deal of knowledge to get an accurate price on a home and even then, another buyer will come along and throw all that common sense out the window;)