Earlier this spring, when Allison and Regan Janz went looking for a scenic backdrop for their wedding photos, by chance they discovered their dream condo in a transitional neighbourhood in New Westminster.
The sprawling 50-acre Port Royal riverfront development is located in the otherwise nondescript suburban neighbourhood of Queensborough, an overlooked spot that holds potential because of its Fraser River views. It's one of the Lower Mainland's biggest developments, the kind that can transform the look and feel of a community.
There was an open house that day the pair visited, so they checked it out and quickly fell for the partial river view, floor-to ceiling windows, high-end appliances, and the fact that, at 1,200 square feet, it was double the size of their Burnaby condo.
It had an asking price of $449,000.
"From what I've seen, a lot of new development is going in there - you do have to go over a bridge to get there, but it's central to Burnaby, Richmond and Vancouver," says Ms. Janz, who did her research on the area. "To me, Queensborough is great."
They hadn't planned to purchase so quickly - they were going to move in the fall. But their wedding was a month away and they were anxious to get on with their lives and start a family, so the couple - both elementary-school teachers - decided to make an offer. They thought the owner might be desperate to sell, because the two-bedroom unit plus den in the two-year-old building had been on the market for two months, and the owner had already come down $20,000 from an initial asking price of $469,000. Their offer on the property would be the first.
So the couple came in with a lowball offer of $415,000 which offended the buyer, who counteroffered at $1,000 below asking. The couple waited a couple of weeks and made another offer after the price had come down to $435,000. Their offer of $433,000 was accepted, but the couple made it subject to the sale of their one-bedroom 650-square-foot Burnaby condo, which is where they sit at this moment - waiting to sell their condo so that they can purchase the Port Royal unit. The subject removal date is June 15, and after more than a month on the market, they haven't had one offer. The couple's wedding came and went two weeks ago. Their honeymoon is in July. Only one person has shown serious interest, but he's also interested in another unit in their building. They are waiting for him to decide.
"We are waiting on pins and needles to hear," says Ms. Janz.
Ms. Janz, 30, was single when she purchased the unit on her own for $269,000 two years ago, at the peak of the market. She hoped to get that same amount when she sold it. However, soon after she listed, several other people in her building followed suit, at far lower prices. In order to sell her unit, she has had to adjust her asking price to $259,000. Yes, she's asking less than she paid. The economic reality of that bitter pill is often lost on Vancouverites, who've witnessed so many crazy peaks they might forget that in real estate too there are no guarantees.
"I'm disappointed," says Ms. Janz. "I think the problem lies in that there is so much inventory right now - It seemed to come out of nowhere. It's not just our building, it's so many buildings in our area. The market seems to be flooded right now with so many different options. If you really, really need to sell, people are putting their prices at rock bottom. But we don't want to go too low."
Ms. Janz says when she first bought two years ago, she would never have been given the option to make an offer that was subject to sale. She didn't even have a subject-to-inspection clause on her offer back then.
"It was so hot, I pretty much had to bid against somebody else for my place. [The deal]happened in 24 hours. It has really changed since then. It's a total buyers' market, I feel."
She's right about the glut of inventory. Overall, prices haven't dropped off yet, but buyers have more room to negotiate because of volume. One east-side realtor who preferred to remain anonymous said, "It's a very changing market. There will be multiple offers, but with subjects. There are reductions after inspections, collapsed deals. It's hard to explain."
The supply of condos in Burnaby alone has gone from 500 in January to 800 active listings in April, says realtor Scott Warren.
"Some people are getting too greedy on prices and that's why inventory is increasing, because they've heard the market has recovered. People believe their home should be worth more."
But it's not a market on the upswing, he adds. If your neighbour sells their identical house for $500,000, you're not in a position to ask $520,000 for yours. You'd price it at $500,000 or slightly less.
Helmut Pastrick, chief economist for Central 1 Credit Union, explained the forces at work in a market that softened four months ago and will continue to soften for several more months.
There's worse affordability, he says, for low-equity buyers because of higher prices and mortgage rates. There's less pent-up demand from the pre-recession and recession period, and there are tighter new mortgage rules. As for supply, Mr. Pastrick says more listings have definitely come onto the market.
"This combination is leading to lower prices following the run-up out of the recession."
Ms. Janz and her husband have a low mortgage rate on their side. She says they'll stick with their variable rate, at prime minus 0.5 per cent, and they won't consider locking in until toward the end of the year.
As well, if their new home purchase does go through, they'll be comforted with the fact that it was also reduced in price.
"We said all along if it doesn't work out, it wasn't meant to be," says Ms. Janz. "But at the same time, you do get invested in it with all the time and effort put into open houses and showings and keeping the place spotless and looking good.
"We would love to get this place."
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