CONDO MARKET UPDATE
Summerland BC August 24 2011
With 82 active listings in this category, this market segment has been a one sided solo dance for quite some time. The sellers have shown up, but have sat quietly waiting for a buyer to show up!
The supply side in Summerland looks pretty dim for sure, with over 80 active condo units for sale. However, by scratching a bit beneath the surface…there comes to mind one simple question: “What happens when you try to sell something that no one wants?”
Well, owners at the waterfront resort sure have found out how this feels…there are 27 units for re-sale in there, and has been for some time. There are another 25 for sale in the new construction Rosedale building uptown. So, if we remove these from the discussion, well, there goes 63% of the supply problem in the Summerland condo market!
Now, let’s examine the “real supply” of condos. Let’s look at product that has a history of demonstrated demand.
First, though, we need to note two other “projects” in Summerland: There are 5 listed in Victoria Place and 5 listed on Main St. These represent “normal” supply of some newer product, other than Main St with its silly age restriction across from a High School! They are affordably priced small square footage units that have been renovated into really nice looking apartment units. Well located right across from the High School and nearby soccer fields, swimming pool, arena…and the developer has placed an age restriction forbidding any school age children from living there! go figger.
Anyway, that leaves us with the traditional Summerland supply of age restricted apartment style condos in the Linden/Silverbirch area. These buildings are well run, well established and offer owners a good location and beautiful grounds. These are real options for those wanting to retire in Summerland without the work and effort that comes with detached home ownership. For many years now, these have been sought after, well loved, and in tight supply! It was always a pretty simple equation: list the house you’ve enjoyed for years, put in a subject to sale offer on a nice condo, and then, after 90 days or so, voila! the condo is transferred to a lucky new owner, who then lives there and awaits the next cycle when THEY will want to sell to someone who will sell a house and so on…
But wait, what has changed? Why is this equation not working? As discussed above, when we graciously remove 60 some percent of the available market, why are these condos with traditionally strong still sitting unsold? Sure, we can understand that there is more supply than there has been for many years, the market is soft…but still, why is nobody buying?
Mostly, the missing link is that the “house seller” is not being successful. And that has dried up the demand for these condos completely. There has been only ONE unit in these complexes that has sold since May 24 2011! And there are still 11 for sale! That is very weak demand. (or ability, more to the point!)
It must be because the buildings are in financial trouble? Are the grounds being let go? Did some rowdy people move in? Was a toxic waste dump built nearby? NOPE. It’s all about and ONLY about price: the one sale the last 90 days was for $169,000. As simple as that. And so, as HOUSE sellers must take a lower price in the REAL market, in order to then become a condo BUYER, they just are NOT willing to pay and more importantly not ABLE to pay the prices these condos USED to sell for.
Call me to get clear info on pricing, Patrick Murphy 250 486 2529 or email firstname.lastname@example.org
RE/MAX Orchard Country
10124 Main St Summerland