REAL ESTATE Richmond records a property sale at -50% below assessed value.

REAL ESTATE  Richmond records a property sale at -50% below assessed value.

Tuesday, December 11, 2012

Last Thursday we asked: How low will it go?

#204-3411 Springfield Drive, a foreclosure sale in Richmond, had dramatically dropped it’s asking price. 
 
Listed as a spacious 3 bedroom, 2 bath, end unit condo overlooking the courtyard, it has languished on the market since May.
 
Assessment value: $265,900.
 
The asking price two weeks ago?: $185,000… 30% below assessed value.
 
Last Thursday another $45,100 had been chopped off that asking price and was now listed for  $139,900

(click on image to enlarge):

That’s $126,000 below assessed value or 47% under assessed value.
 
In the comments section we were urged not to get excited because this was a marketing strategy.  Wait until the offers came into court and then see what happens. (the argument being a bidding war in court would push the value up significantly from that 47%  below assessed value listing price).

Well… #204-3411 Springfield Drive has posted at sale now (hat tip: bopeep @ Vancouver Price Drop).

No bidding war, though.

It sold for $135,000.

That’s $4,900 below the last listing price and a full -50% BELOW assessed value.

Good thing we waited to see what would happen in court because now we know that Richmond has officially recorded a sale of a property at -50% below assessed value.

For those who complain that these dramatic drops only represent the ‘shit properties’ (as one contributor observed yesterday), foreclosure court in Richmond has another sale on Monday.

This is #135-8880 Jones Road in Richmond.

The listing describes the property this way:

North-West corner large one bedroom with windows on 2 sides. Huge sundrenched 300 sq ft patio, gas fireplace, insuite laundry. Less than 10 steps to elevator & courtyard. Central location, just 5 blocks away from bus stop & 2 blocks from shopping mall. PCDS dates October 26, 2012. Parking stall #220, 2 small pets (cats or dogs) allowed. Rentals restricted to 15 currently at maximum. Priced over $50,000 below city assessed value for immediate sale.

#135-8880 Jones Road is assessed at $249,000.
 
It posted a sale in foreclosure court on Monday for $195,000 ($5,000 below the listing price, a listing price which was $50,000 below assessed value).
 
Was the low asking price part of a strategy?  If so, there were no bidding wars in foreclosure court on this property either.
 
Now this sale price is only -22% under assessed value.  Buy think about that for a moment.  Only -22% under assessed value?
 
Let’s recall that it wasn’t even 12 months ago we were telling you about properties in Richmond engrossed in bidding wars and selling for $200,000 – $300,000 over asking prices (which in themselves were hundreds of thousands over assessed value).
 
#135-8880 Jones Road is the new reality.  As bopeep reminds us, this condo sold in 2007 for $215,000.
 
This condo may have “only” sold for 22% below assessed value, but it sold for $20,000 less than what the condo exchanged hands for in 2007.
 
That’s five years of so-called real estate appreciation wiped out in a heartbeat.  The seller LOST $20,000 in the actual transaction, not to mention five years of condo fees, interest on mortgage, realtor transaction fees and lost income by not investing elsewhere.
 
Doesn’t real estate always go up?
 
The melt gathers momentum.
==================================================================================
COMMENT:
QUOTE:
#204-3411 Springfield Drive
Assessment value: $265,900.
It sold for $135,000.
Good thing we waited to see what would happen in court because now we know that Richmond has officially recorded a sale of a property at -50% below assessed value. 
Years ago, our youngest got caught up in one of those card collecting crazes. We were paying $ 5 for a pack of 10 aka  50 cents per card. I cautioned him that I’ve seen this craze before, and that the ” boom  ” won’t last long, and soon you won’t be able to give these cards away.
I am an auction fan, and it is a good reflection of how a market works. If it is a general auction, there is a wide variety of items. The price of any item is reflective of the demand of those present. Sometimes there is a bidding war….sometimes there is ZERO interest….and everything in between. Auctions are generally a selling point of last resort, the market of auction buyers determines the final price
In the case of  #204-3411 Springfield Drive,  there was no interest by any buyers in the normal market. The seller hoped to avoid the auction, but lost control..ie foreclosure. I am not aware of the particulars, ie the shape, or any lingering legal or physical issues…but one would think that someone would have spotted a chase the market down deal and took a chance at a higher price. Only one bid came in.
The feeling that I am getting is this is just the tip of the iceberg, and there are many similar situations that will flood the market and depress the prices in the multi family category which will get hit the hardest.
QUOTE:

#135-8880 Jones Road is assessed at $249,000.

It posted a sale in foreclosure court on Monday for $195,000 ($5,000 below the listing price, a listing price which was $50,000 below assessed value).

This unit is newer, and probably more desirable. Yet, no bidding wars, another foreclosure. Quite the market turnaround.

These  seem to be cases of ” Jingle Mail”….that the owners walked away and handed/mailed  in the keys….Foreclosed on usually implies the banks are on the hook with an asset that is rapidly depreciating, and are cutting THEIR losses..right?

NO, if these units were bought in the last few years with that 5%  down mortgage scam, WE the TAXPAYERS will eat these losses, as the Gov’t owned CMHC was the insurer for the banks.  We see what happened in the US….major fraud and mass of depreciated Real Estate and foreclosures….and the massive bank bailouts.  IMHO, it is about to commence here…..there are all the warning signs.

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