Home resales have declined, but make no mistake about what’s going on.
As the Real Estate Board of Greater Vancouver recently reported, the market remains in seller’s territory.
This simply means that the market is strong enough that sellers are in control when it comes to prices.
Longtime realtor David Hutchinson notes that a “bit of an anomaly of a hot market is sellers’ expectations”.
“Sellers want as much money as possible, which is not unreasonable,” Hutchinson told the Straight.
What happens sometimes is when a property is listed and no buyers come immediately, the seller does not do what is traditionally expected, which is to reduce prices.
To the contrary, the seller simply increases the asking price.
Hutchinson cites 380 West 62nd Avenue as one example.
The Marpole area home came on the market on April 21, 2021 with a listing price of $2,990,000.
No buyer came to pick up the two-storey home with four bedrooms and two baths.
But instead of reducing the price, the seller jacked up the price on June 3 to $4,380,000.
This means an increase of $1,390,000 on the asking price.
There’s another thing that Hutchinson, an agent with Sutton Group-West Coast Realty, noted about the 380 West 62nd Avenue listing.
The property was listed $2,990,000 on April 21, which was below the home’s 2021 assessed value of $3,130,000.
Speaking generally and not specifically about the circumstances of this listing, Hutchinson said that in an “attempt to get as much money as possible”, sellers may instruct a realtor to price a property below assessed value.
This move is expected to get multiple offers, and over-the-asking price.
“This can be very discouraging for good, reputable buyers that see a sticker price on a property, and in good faith, go to see the home, and make an honest offer,” Hutchinson related.
Unfortunately, the realtor continued, what their offer in good faith does is push the price up.
“If there are no offers, and buyer can expect to negotiate on an asking price,” Hutchinson said.
“But once the buyer hears there is another offer, then they're in a multiple-offer situation, and feel they must offer more than the asking price,” he continued.
The phenomenon of sellers jacking up asking prices doesn’t happen only on the west side of Vancouver.
It happens as well on the east side, and 3218 East 18th Avenue is one example.
The Renfrew Heights property came on the market on May 17 for $1,488,000.
On June 18, the seller raised the price by $200,000, bringing the listing tag to $1,688,000.
This thing happens as well with properties other than single-detached homes.
Hutchinson cited as example a condo unit at 803-5629 Birney Avenue.
The seller listed the studio on June 7 for $499,600.
When the unit went unsold, the owner boosted the price by $116,400 on June 18. It is now listed for $616,000.
Hutchinson said that the strategy of increasing prices sometimes can be effective.
“They have already tried to lower price to entice buyers. It didn't get the desired result, so they can't lower the price again. It won't work. So they increase the price, and hope they get somewhere between the original ‘bait and switch’ price and the new asking price.”
Hutchinson went on to note that the strategy can also backfire.
“A lot of buyers are now deciding to wait until after the deadline to present offers, and see if it's still available to make an offer when there isn't any competition,” Hutchinson said.
Details of price changes cited in this story were tracked by real-estate information site Zealty.ca.