Vancouver Realtor Update
ACCORDION EFFECT PULLING THE MARKET
What does Vancouver real estate, an accordion and domino’s have in common? Every market has a trigger. This year single family homes have surged ahead – leaving condos and for a while there, townhomes and duplexes almost standing still. The headlines tell us that all homes in Vancouver are too expensive. Analysts say that local salaries are inadequate. They never mention that a large percentage of singe family homes have secondary suites and they seldom talk about the wealth transfer from one generation to the next. Truth is, with some exceptions, condo pricing (approximately 70% of properties in Vancouver) has changed little in 2 years, property taxes and monthly condo fees in Vancouver are among the lowest of large cities in North America. If we are to be compared to New York, London or Sydney, then let the total cost of ownership be factored in. Even in Toronto and Calgary, monthly condo fees and property taxes are twice as high as Vancouver.
Looking at the big picture – Vancouver is constantly rated as one of the most livable cities in the world. Shouldn’t we have one of the most expensive real estate markets in the world? As the world population grows, Vancouver grows by about 35,000 people per year, this means increased demand for real estate ownership.
Reflecting back 25 years ago the Washington Post referred to Canada as Mexico with sweaters – we had large national debt at the time. We’ve come along way. Canada’s finances and banking system are the envy of the world – this is new! Vancouver is influenced by China, this is not new. Chinese influence has been in the making since 1850 with first arrival of large numbers of Chinese immigrants. Today Chinese money is flowing to a place of safe keeping – Vancouver property. Why? Trust. This has helped cause our single family home market to open wide like an accordion this year. As single family homes became more expensive a gap in the market was created. The gap between single family homes and other property types, duplexes, townhomes and condos are temporary, the market has started to re-balance itself. Either single family homes were to become more affordable or by an accordion effect, the market will pull up the duplexes, then townhomes and finally condos as the sellers for single family homes become the buyers for these other property types and so on, trickle down effect with a lag period.
Looking back 3 years after the world financial crisis of 2008, single family homes in Vancouver had declined by up to 25% and condos by up to 15%. Buyer demand was pent up, first time buyers and investor buyers saw the opportunity and they pounced making a huge impact during 2009 regaining back the previous decline. Entry level buyers have been quieter since. They are not gone, they have just been on the sidelines. But they rebuilt the market from the bottom up in 2009 – domino’s – with record sales volumes all spring and summer. Then 2010 came along and as predicted, a surge of listings followed the Olympics – mostly condos, nothing serious, just enough to take the steam off the market and flatten things out till November 2010. This is why, generally speaking, the attached housing market has been relatively flat since the summer of 2009, with some exceptions of course – those being the really good properties.
Now a change is in the wind, as the accordion effect pulls, (and it is) this pull from above is about to converge with the people who have been on the sidelines (aforementioned) becoming more active in the entry level market again, causing a simultaneous push from the bottom. What remains to be seen is, how powerful will this convergence be? One thing is clear, supply and demand factors are powerful influences in the market and we are currently seeing steady supply of listings and growing demand. This is highly qualified based on neighborhood and price range. Check with me about your area of interest.
Vancouver real estate. A broad perspective is required to succeed. I hope I have helped you with this today! It takes me a while to compose this timely information so that I am presenting accurately. If you like the way I describe our market, lets work and succeed together! You’ll receive excellent service and expert advice from me. Thank you very much, I look forward to hearing from you!