Asking price versus assessment

This Kelowna home is among those currently for sale at less than their assessed value. The house at 731 Coronation Ave. is listed at $525,000, but its assessed value is $551,000. Assessments were based on a property’s valuation on July 1, 2018, but average home prices have fallen 17 per cent since then.

Kelowna homes may not be worth as much as newly delivered assessment notices suggest.

The assessments, now being mailed to homeowners across B.C. and already available online, are based on a market valuation done on July 1, 2018.

However, that was near the peak of a long run-up in house prices. The price of a typical single-family Kelowna home has fallen 17 per cent since then, according to sales figures from the Okanagan Mainline Real Estate Board.

So homeowners may get a false sense of their property’s value, and thus their overall net worth, if they go only by the valuation shown on their notice from BC Assessment.

In a stable or modestly rising real estate market, it’s normal for home sellers to try to get as much as 15-20 per cent above their property’s assessed value.

But the gap between asking price and assessed value has narrowed considerably, and in some cases Kelowna homes are selling for below their assessed value.

On Wednesday, The Daily Courier looked at the asking price for 15 randomly selected single-family homes currently for sale in areas of Kelowna. That number was then compared to the property’s assessed value, as indicated on the BC Assessment website.

Four of the 15 homes are currently listed for below their assessed value. A home in the 700 block of Coronation Avenue downtown is listed for $525,000, considerably below its assessed value of $551,000.

A home in the 900 block of Fuller Avenue is listed for $525,900, slightly below its assessed value of $529,000.

The asking price for a 3,200-square-foot home built in 1970 on Glenwood Avenue is $679,000, almost $30,000 below its assessed value. It has been for sale since October.

A home on Selkirk Drive on Dilworth Mountain is currently listed for $644,800, compared to its assessed value of $657,000.

For several of the other 11 homes, there is little difference between the current asking price and the assessed value.

For example, a three-bedroom, three-bath home in Magic Estates, built in 1991, is for sale at $598,000, just $10,000 above its assessed value. A house on Cobble Crescent in the Upper Mission is listed for $729,000, just two per cent above its assessed value.

And a house on James Hockey Place in Black Mountain is listed for $655,000, also just two per cent above assessed value.

Some homeowners are still hoping to sell their property for far above its assessed value.

A home in the 800 block of Bernard is listed at $900,000, well above its assessed value of $779,000. And a home on Cactus Road in South Rutland is listed at $488,800, 16 per cent above its assessed value. The owners of an updated heritage home in East Kelowna hope to sell for $785,000, or $90,000 more than the assessed value.

Housing analysts and real estate agents say prices have fallen because of a combination of factors, including higher interest rates, tougher lending rules for borrowers and the dampening effect of the B.C. government’s new housing speculation tax.

In its outlook for 2019 and 2020 for Kelowna, the Canada Mortgage and Housing Corporation says the average price for a home — based on all types of residential listings — will drop to $580,000 from $584,500.

Following are the five most expensive properties in the Kelowna area, according to BC Assessment. The first value is this year’s assessment, and the second is the value from last year:

1. 4538 Hobson Rd.,

$10.55 million ($10.03 million)

2. 1683 Pritchard Dr., West Kelowna, $9.788 million

($9.09 million)

3. 18250 Juniper Cove, Lake Country, $9.5 million

($9.2 million)

4. 2523 Whitworth Rd., West Kelowna, $8.59 million

($8.04 million)

5. 4594 Fuller Rd. $8.336 million ($7.913 million)