Realtor likens the price fluctuation to reverse FOMO
Canada’s housing market continues to cool amid rising interest rates this year, with an outlier sale in a 36-storey condominium of The Pinnacle a testament to lowered prices.
Located at 939 Homer Street in Yaletown, each of the “02” units at The Pinnacle has the same layout and measurement with a northwest view that features two bedrooms and one bathroom.
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According to Carlito Pablo of the Georgia Straight, three 02 units were sold within the $745,000-$765,000 price range in the fall of 2021. When the first interest hike rolled in, in January 2022, a 02 unit was sold for $815,000. The realtor behind the sale – David Hutchinson – told Georgia Straight that the sold price for that unit had exceeded that year’s property assessment of $766,000.
Less than three months later, the BoC announced another rate increase from the pandemic-low 0.25% to 0.5% in March – and unit prices were not spared. However, an anomaly was found: a 02 unit listed for $799,000 was sold six days later for $630,000.
“Compared to the four other previous sales, one might say the deal for unit 3302 is an outlier,” Pablo wrote in the Georgia Straight.
Its status as an outlier was confirmed when another 02 unit was listed for $799,900 but ended up selling above its asking price of $825,000 that same month.
Hutchinson suggested that the outlier sale could be a “narrow indication of the recent fluctuation in prices due to the sudden changes in the market” – somewhat like a reverse fear of missing out. Last week, the Canadian Real Estate Association (CREA) reported that the national benchmark price of a home slipped for the third consecutive month. The 1.9% price deprecation over the previous month has become the most significant month-over-month drop since 2005.
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Of course, Hutchinson also acknowledged that the outlier sale could have been affected by other market and non-market factors that have nothing to do with a cooling market, Pablo wrote.
“It could be a special situation with the seller, like a family situation,” Hutchinson told Georgia Straight. “In any case a sale like this affects the market numbers, and, coincidentally, I now have clients that were looking for one-bedroom-plus-den condos now looking for two-bed condos, and they seem to be happy with the new inventory that is coming on the market.”
