April 2009

Market outlook for Richmond million dollar homes

In view of the softer market and reduce sales activities, new home builders and sellers are bracing for lower selling prices for their million dollar homes. When the sales data of million dollar homes (under 5 years) sold in the first quater of 2009 were analysed, the drop in average market value for these homes was found to be just around 5% below similar homes sold at the peak in late 2007.

Very similar new homes that previously sold for $1.5 or more in late 2007 and early 2008 are now being priced lower. New homes with around 3,600 to 3,800 sq ft living areas are now selling at $1.2 to 1.4 million price range.

Market Price and City Value

Homes sold in the first quarter were found to average around 11% above their city values. The rate of price decline for these newer homes were relatively small compared with older homes that were found to be selling at 4% to 7% below city values.

Market Outlook over the next few months

The decline in home builders’ demand for building lots has a major impact on the selling prices for prime building lots. Building lots that used to sell in the $700,000 to $800,000 range are now adjusting to much lower prices below $650,000.

Prime building lots with older homes are selling well at prices around $550,000 to just over $600,000. Reent market activities help to prop up home builders' interest to enter the market to buy older homes in prime west Richmond locations.

You can view Richmond's million dollar homes listed for sale on the MLS System by following this link.

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