Condo Crunch: Navigating the New Westminster Market

Jamie: A few weeks back we did an episode on pre-sale panic and what’s going on in pre-sales, and just kind of painting the picture of new construction and the new condo outlook for the next few years. That was one of our most popular episodes. We had a lot of views on it and so we wanted to maybe just kind of chat about the resale side and be really specific on the New West condo environment and just what’s going on in terms of inventory, sales volume, where opportunity is in the condo resale market, and how much inventory there is.

So, we’re doing this podcast in June. We’re in our New Westminster office in Glenbrook North. We are talking about New Westminster condos and what’s been going on in them. And New West is a city that’s kind of — it’s a smaller city in the Lower Mainland, but it is a city that has a lot of condos for its size. So it’s a good condo market in terms of options, different ages, different sizes. You’ve got the low-rises on the Quay, you’ve got high-rises in downtown New West, you’ve got a lot of different options for a small city. So we think — and it’s also a city that we know well. If you Google search “New Westminster realtors,” I’d like to think we’ll show up.

But let’s go into it because this is a market that’s tough and we always tend to find that New West offers good value and good product options and there’s certain historically hotter properties in New West and historically softer ones. So, our hope with this episode is to give you a good picture of what’s going on in New West and know that it’s not just New West specific. New West kind of resembles a lot of Coquitlam, Port Moody, and Burnaby in some areas. So what you’re hearing from what New West is going through is a similar story to the surrounding cities as well.

So let’s start, Denny. I mean, New West condos, just a good big bold snapshot. Current active listings: 410 listings. The May sales that came through in the real estate board report was 50 sales. So 50 condo sales out of 410 active listings. Not the best. What is that? Just over eight months of inventory. Average active listing price is $727,600 and the average sale price has been $672,500. Denny, what does a, let’s call it a $700,000 condo in New West get you?

Denny: That gets you a 10 to 15-year-old two-bedroom that is 850 to 950 square feet.

Jamie: Yeah, you might get a low-rise. You might get a 1,000-square-footer in certain buildings that might translate to 800 feet in other ones depending on the caliber of building, concrete versus wood frame, neighborhood, and age built. There’s such a variation of building age in New West. So, like in the Quay, for example, $700k gets you probably 1,200 or 1,300 square feet in an original condition unit in a 1980s building versus Victoria Hill, it gets you a 10-year-old wood-frame building that’s 950 square feet that you don’t have to do renos to.

I have one example here that gives a really good picture. So, there was a Victoria Hill sale that happened at 271 Francis, a 1,007-square-foot two-bedroom corner unit built in 2016, so 9 years old, and it sold for $735,000. So that’s pretty good value. I mean, builders can’t build it… and it feels new. It’s 2016 built, 1,007 square feet, corner unit, two bed for $735,000. I mean that’s what it sold for. That’s where the market’s at today and I don’t think that will become $650,000 tomorrow. I think that will stay around $735,000 and hopefully go up to $800,000 if things improve.

I did a little bit of a deep dive in Victoria Hill because it is a market where we have a few listings right now and it was also when I looked at the sales… well, one, there were 50 sales in May, but I kind of looked at the last 60 and 90 days just to see if there were any patterns. In May, there were 12 condo sales in Victoria Hill, which isn’t bad. Out of 48 listings. So, in theory, Victoria Hill has 4 months of inventory, which is far less than the market average right now. That’s actually statistically on the seller’s market side, but it’s definitely not a seller’s market.

The average sale in Victoria Hill was $757,000 in May, and I gave you that example of a 1,000-foot corner unit. The median price per square foot is $740 a foot. So you can’t make 10-year-old condos, but you know, new construction is a thousand-plus a foot. So a really good value play right now is a community like Victoria Hill that’s 10 years old. I mean I say it’s 10 years old but it ranges from 20 years old to 5 years old, maybe less. But not buying brand new, $740 a square foot for something that feels new is good value. And that’s what the median price per foot in the sale prices that have happened is. Denny, you have a Victoria Hill listing.

Denny: I got three. Yeah.

Jamie: You got three. I guess we have four total. So we’re active in the area and they are getting showings. The particular one that you have that’s a higher price point is getting a lot of action, but people are seeing it and it’s just not amounting to offers like we would expect. So, there are good opportunities in Victoria Hill. We can tell you right now there are some good opportunities in Victoria Hill right now.

Denny: It’s a funny neighborhood that right now is pretty similar to other condo areas in Greater Vancouver, is if you slightly overprice, you’re going to sit for a long time. The last I looked was like a few days ago, but I think there were 27 two-beds for sale. And last month, in the last 30 days, there were four or five sales of two-bedroom units. So, you need to… I heard someone on another podcast say this and I thought it was really interesting, is pricing homes right now is very difficult because you can look at the last sales in the last 3 to 6 months and price accordingly. But it’s almost more important to look at the active inventory because there’s such high inventory. And if you’re pricing in line with sales, but there are five units that are priced below you or below those recent sales, guess what? You’re not going to sell.

Jamie: Totally. To go into a couple of developments for what’s going on… and I guess I’ll say that the high sale in New West for a condo in May was $934,000 for a 1,672-square-foot waterfront condo in the Quay, an older, like 35-year-old, early ’90s built building.

Pier West, we’ve talked about in the past, Bosa’s waterfront towers, had five sales in May and 44 active listings currently. These are higher price points. Five sales in May isn’t bad for this market. Those sales were in lower price points. The median price per foot is $825. Those sales are happening below what those people paid for 5 years ago.

Denny: Yeah, they’re selling for about 5% less of the pre-GST price they paid in pre-sale.

Jamie: So, let’s call it a 10% hit.

Denny: And when did they go for sale? How long ago?

Jamie: January 2018.

Denny: So, you bought it in January 2018. Gold was worth how much then? Six bars. So, you got it for one gold bar in 2018. In Canadian currency, you’re taking a 10% hit, and in gold bars, you’re down to half a bar.

Jamie: A couple of other developments in New West… The News, that’s three towers in downtown New West. They’re built in the early- to mid-2000s. They had 15 active listings and in the last 60 days, zero sales. In the last 90 days, zero sales. The last sale in The News development was in March.

618 Carnarvon, a new condo downtown New West: 22 listings active. In the last 60 days, one sale. In the last 90 days, two sales. Both of them were one-bedrooms under $600,000.

Ovation downtown New West: 12 listings, a little more action. Two sales in the last 60 days.

Plaza 88, those three towers on Carnarvon overlooking the SkyTrain that don’t have enough elevators and have too many floors of parking… sorry, Plaza 88, I shouldn’t bash them so much. I mean, it’s a location. You’re close to the SkyTrain, you’re very conveniently located.

Denny: It’s funny how things change over a decade, because 10 years ago, 11 years ago when I started, The News and then Plaza 88, the three towers above the SkyTrain, were like the go-to investor condos.

Jamie: They probably still arguably are, you know, it’s just you don’t want to live there.

Denny: Yeah. Well, The News is better for elevators.

Jamie: Plaza 88, just to be clear, just has a lot of movement at certain times of the month and those elevators get tied up. Sorry, Plaza 88. But on a Plaza 88 story, just to show you the value of the discount that you’re getting, one of the sales, a 1,151-square-foot two-bedroom and den sold for $686,000. That’s $596 a square foot for a 2009-built concrete condo.

Denny: It’s pretty low. Those are the ones that are right on the water, too. Those are the front-facing units. And they’re funky floor plans. So, what is it? 1,100-something feet?

Jamie: 1,151 square feet.

Denny: 1,151 square feet feels like 950.

Jamie: You like big hallways. Give it… it feels like 980, right? Not 950.

Wesgroup’s Brewery District, 258 Nelson’s Court: 11 listings, one sale in the last 60 days. Just to give you an example sale, these are a 2020-built condo. Unit 204 sold for $710,000, which is $810 a foot. That’s one of the most recent sales. So buying a 2020-built concrete condo at $810 a foot…

Denny: Pretty good deal, below replacement cost.

Jamie: Yeah. Murano Lofts, my favorite old loft community. Guys, there’s some good deals in the lofts right now. There is not a lot of movement. Seven listings right now and one sale in the last 60 days. Pretty funky places. They’re never going to build lofts like those again. If you’re looking for a loft, now is a good time.

In the last 60 days, kind of isolating a set of developments, just looking at one-bedroom, one-bath condos built after 2000 in New West. You know, that’s a big market between one-bedroom, one-bath, between $500,000 and $600,000 that are built after the year 2000 because that’s a really common kind of category for some first-time buyers. And in the last 60 days, there have been 10 sales out of 52 listings. So, that’s arguably one of the more active price ranges. We’re talking about 5 months worth of inventory. That’s not a seller’s market or a buyer’s market; that’s pretty balanced. When you isolate the more active price points, it’s more of like a one-in-four to one-in-six [sales to active ratio], versus the macro is one-in-nine. So, nine months of inventory versus 4 to 6 months of inventory when you isolate the products.

Two-bed, two-bath between $600,000 and $700,000: 11 sales out of 38 listings. That’s less than four months of inventory. So, if you’re looking for a two-bed, two-bath in New West right now between $600,000 and $700,000, you’re not in a buyer’s market. You’re actually statistically more in a seller’s market, but let’s be realistic, it’s more of a buyer’s market as a whole.

Denny: Do you have the number from $700k to $800k?

Jamie: $700k to $800k wasn’t as terrible as I thought. Okay. Eight sales in the last 60 days, 48 listings. So that’s about a 10% sales ratio… well, sorry, I’m saying last 60 days, so just to be clear, it’s probably missing most of the sales in the last two weeks, so the last 60 days of sales probably reflects a month and a half worth of data. So eight sales out of 48 listings, that’s probably closer to 10 months worth of inventory when you adjust it.

Denny: Because one of the things I was going to summarize your neighborhoods with, which you just basically proved saying one and two bedrooms and the price points, is the low price points are much more active than the more luxury condos. Pier West is a good example of that. Saying that there are five sales in there and the highest sale in New West last month was nine-thirty-something you said, and that wasn’t in Pier West. So that means none of the more luxury, higher-end units in Pier West, which there are a lot of for sale, sold last month.

Jamie: Now, and just like that was a blip where Pier West didn’t have a high sale; there have been lots of months where they had a sale over a million. But you know, just kind of looking at the high inventory levels, it gets more bleak as you go up. Like two-bedrooms that are between $800,000 and a million: 53 listings, eight sales in May, so 7 months of inventory. Over a million: zero sales in May. There were no condo sales over a million in May, and 25 listings over that. So that’s infinity months of inventory.

Isolating three-bedroom condos: four sales in May, eight sales in the last 60 days, 40 active listings. So 10 months of inventory for three-bedroom condos.

Three-bedroom townhouses, arguably a more desirable product: 46 listings, eight sales in the last 60 days. Seems like a bit higher inventory for when you isolate three-bedroom townhouses. But what I did is, I took out Queensborough from that equation and the stats skew a little bit more. So when you take out Queensborough — well, with Queensborough, it’s 9 months of inventory. Without Queensborough, townhouses in New West go to 5 months of inventory. So townhouses are sitting a little bit more in Queensborough than in the rest of New West. Yeah, that’s my stats. That was a mouthful. I don’t know if I painted a picture for people on what to expect when buying a condo in New West.

Denny: Yeah. But Denny, what are you seeing? What do you got in front of you? You mentioned most of it. I think when you look at it comparatively to Burnaby and Coquitlam, which are often very similar sales ratio numbers, they’re pretty similar right now. Burnaby has a ton of condos for sale, 254 condos for sale, a sales ratio of 11%. So that’s just over or around 9 months of inventory. Coquitlam is pretty similar: 552 condos for sale, a sales ratio of 10%. There were 54 sales last month, so that’s 10 months of inventory.

Jamie: I’m a buyer and I want to buy a condo. What is like… are you saying no, never buy a condo? Are you saying be specific about what you’re looking for?

Denny: I have a few people right now that are overwhelmed with the high inventory. They’re like, “I just don’t know what to look for anymore because there are 622 units that come up on my search.” It’s overwhelming. And what I’ve heard recently, which is really interesting, is, “I see a unit. I really like that unit. It checks a lot of the boxes. But what if something comes up better tomorrow?” There’s no urgency on the buyer’s side right now. A lot of buyers are feeling like they have a lot of time and the market is not improving. So, if they wait 3 months to try to find the perfect unit, they’re not going to pay more for it. They might pay less for it. That’s the sentiment right now on the condo side.

Jamie: You know, I think we forget. It’s easy to forget, with the way the market feels right now, it’s tempting to wait, just because of uncertainty. There are so many times in the past where these little lulls of quiet come and they go, and it changes really quick. Now, I don’t know if we’re in for a quick change next year, but there’s a good chance that anyone that doesn’t buy now or in the next while… the market is probably like this for the tail end of this year. If there is a significant market shift, it usually happens in a spring market. And the reason why is because over Christmas and over winter, the listings dry up and then the inventory is down. And then when they start trickling in in January and February, the good ones start getting bidding wars and those bidding wars start improving prices, and then by the time we get to March or April, there’s a little bit of a jump in prices.

So, I am a little bit less optimistic that we’re going to see that shift next spring because I kept on thinking we were going to see it this spring and last spring. So, I’m just no longer optimistic, Denny. But what I will say is like everyone thinks alike and once the news headlines start being positive, the wave of buyers is going to show up in a storm. And if we get some rate cuts throughout the fall or for the tail end of this year and the news turns, next year might be completely opposite of the conditions that we’re experiencing now. Not for brand new condos, I think that’s going to take some time. But for a lot of these condos, townhouses, and houses sitting on the market right now… there’s good product sitting on the market. There’s product that we have listed that in any of… like last year, which we thought was bad, would have sold. The year before that would have sold. The year before that, it would have sold with 10 offers. So we see good listings that aren’t selling.

It’s just now is a good time to be a buyer. And if you wait and wait and wait, I think if you wait till the fall, yeah, it might amount to a better deal, but it’s going to have less selection. So, you’re going to have better selection now and over the summer. If you wait till the fall, you’re reliant on more hardship happening in the next few months. And if they do happen to do a rate cut, I just don’t know if that’s going to come. I think if rate cuts start coming in, there’s going to be more of an optimistic feel and most sellers might just push it to next year. But the ones that have to sell quickly, those are the goal for the buyers. How do you weed out, out of these 200 listings, which seller is desperate?

Denny: That’s the challenge. That’s the challenge because as we talked about on the last podcast, a lot of sellers right now are selling first and they don’t feel a lot of anxiety. Yes, maybe the media says there’s a lot of turmoil on the seller side, but from what we’re seeing, a lot of people are just electing to switch that transition around and sell first versus buy first like they have done in the past, which puts pressure on you to sell. If you’re selling first and it doesn’t sell in 3 months, a lot of people are okay with that right now.

Jamie: Yeah. The difference of vibe… you know, when you have a seller that’s making a move and they’re buying, the buy is so important, you know, especially whether it’s someone that’s later in life, an elderly couple looking for their last place that they just don’t want to have to leave, or whether it’s someone buying up to a house. The purchase is crucial and if they have to sell something to get there, the conversations we’ve had the last few years are, “I need to find the perfect place before I sell.” And you take them out to see a bunch of places, they get comfortable with what’s out there, they see something they like and that motivates them to list their place to get it sold. And then they realize how hard it is to sell and that idea of teeing up the perfect place before they sell slowly subsides. Whereas before, everyone would want to know where they’re going before they sold. Now it’s, “Yeah, I want to know where I’m going,” but then once I get in the process I realize, “Oh, the hardest part is selling my place, then the other part’s easy comparatively.” You just have to go through the process, and the process is yeah, everyone has a dream of a path. “Yeah, I want to go there, I’m going to sell tomorrow and it’s going to close two months from now and I’m going to get to that next place.” But the reality is it’s not going to your timeline. Often that timeline has changed and that two months turns into six, or turns into a price that you didn’t expect, or it turns into, “Yeah, let’s try again next year.”

Condos… this was a condo and New West podcast, Denny. Any closing notes for listeners that made it this far on considering buying or selling a condo right now?

Denny: On the selling side, price correctly. There is a lot… I mean, this is a funny thing to look at and there’s no stat to back it up, but maybe we can guess. There are 410 condos for sale in New West right now. How many of them are priced correctly?

Jamie: Well, there were 50 sales in May, so I’m going to guess 50.

Denny: So, that is… what’s that, that’s like 10%-ish, roughly. Maybe we could give them 15%. Yeah, that’s pretty accurate. I was going to say like 75% are priced too high.

Jamie: Yeah, that’s probably right. For today’s market, maybe they were priced correctly last year, but today’s number to sell, because there’s more inventory and more that is listing below what you’re listing at, just doesn’t have much of a chance to sell. So when you look at days on market and how many are for sale, understanding as a buyer that yes, overall it sounds like much better buying conditions, but 75% of those listings roughly are just priced too high and are sitting for that reason alone.

And as a buyer, don’t hesitate to put offers out there. You know, there are sellers that are stuck on recouping their cost and there are sellers that are realistic on taking market value, and you don’t know. Sometimes the list price doesn’t tell you how a seller’s going to respond to that and you have to try an offer. So just if you end up in a negotiation and you realize that the seller wants a certain number, you just move on to the next right away. Don’t hesitate. This is a market where you can put more offers out and move on to the next. You’re typically in a position of power. And if you’re after a desirable one that’s in week one and you love that place and it’s priced well, don’t expect to get a big discount in week one. There are still places selling. Not everything is distressed. Don’t assume that everyone has to take a hit. So, days on market tell you a lot. Look at the listing history and also just look at the price per square foot because in general, higher price per square foot properties are struggling more right now.

Denny: That’s a good point of don’t be hesitant to write an offer if you do like something, regardless of what the list price is. There are a lot of seller conversations that I’ve had in the last couple of months and their question is, “Why hasen’t somebody written an offer? We’ve had 15 groups come through. Why isn’t somebody writing an offer?” And in some cases, it’s because buyers are scared to write $75k, $100k below list price when in reality, the seller would maybe not accept that, but would be willing to work with it and counter and come off their list price $50k, $60k, $70k, $100k in some cases. But a lot of buyers are just hesitant to write that because they don’t want to piss somebody off.

Jamie: Well, I’ve said this a few times, “We’ve had six showings on your place. We’ve had 12 showings on your place today, and why haven’t they written an offer?” I’m like, “I don’t think any of those buyers have written an offer, period.”

Denny: Yeah, fair.

Jamie: And I think a lot of them are just looking. If I follow up with an agent that showed a listing two months ago or a month ago, oftentimes that buyer still hasn’t purchased. So, yeah, people don’t just offer. You’re lucky to get an offer right now. Treat it like gold if you get an offer, and expect it to be a 50% chance to be an insulting lowball, but don’t be as insulted in this market.

Denny: And on the seller’s side, that’s such a good point is don’t be insulted when you get an offer. Like try to take your emotion out of it and it’s an offer, it’s something to work with. You don’t have to accept it. If it’s $100k below your list price, just counter at what number you feel is reasonable. But yeah, the emotional side of real estate is very tricky to balance out with sellers right now. But getting an offer is… for some reason, the word “privilege” came to mind and that sounds a bit extreme, but getting an offer is like getting chosen as a puppy at the SPCA, you know, like you’re getting rescued.

Jamie: That is a pretty good way to end this. Good, let’s leave it at that.