Real Estate News in a Changing Market
You can’t hold a good man down for too long and that’s exactly how I feel about Greater Vancouver real estate. May sales volumes across Greater Vancouver jumped by more than 45% compared to April and up more than 50% from February and March. Total listings are flat lining with just very moderate growth; it seems that buyers have sat on the sidelines for long enough. We sold over 2,650 homes in May, even though a typical spring month is about 3,300 sales, it’s still the best month in the last year and a big improvement.
So, how is the Market Doing and what has been Selling this Spring?
Appropriately priced entry level houses in every area and neighborhood are selling well. There is strong buyer demand for detached housing. For condos and townhouses, it’s been different story so far, anything that ticks all the boxes and is really nice is selling quickly, and quite often with multiple competing offers. However, it’s not always the highest price that wins, more recently, it’s the cleanest offer with the fewest conditions that wins the day. The increase in residential MLS sales in May indicates that buyers and sellers are finally interpreting market conditions similarly after 12 months of being on different pages.
Why the Sold Statistics Matter Less this Spring?
First, for detached houses, the sold statistics reports do matter, and they are largely accurate because all buyers recognize the value in land regardless of the condition of the house. However, for attached listings, as we have seen, it’s mostly been the best listings which have been selling and those selling prices are still pretty high, so it follows that the sold statistics are reporting a pretty strong trend because they only report on what has sold! They don’t report on the unsold. However, as more sellers of attached listings price reduce in order to attract a buyer, then those lower selling prices eventually catch up under the sold statistics and in the coming months and the sold statistics reports should show a downward trend which is to be expected as the less desirable inventory slowly sells.
Detached Housing - What it Was at the Market Peak, and What it is Now
- For Kitsilano, what was $2.7 is now about $2.2
- For Vancouver’s west side, what was $3.6 is now about $2.9
- For East Vancouver, what was $1.588 is now about $1.395
- For North Vancouver, what was $1.7 is now about $1.55
- For West Vancouver, what was $3.3 is now about $2.6
Townhouses - What Was and What Is
- For Vancouver’s west side, what was $1.250 is now about $1.180
- For East Vancouver, what was $950K is now about $870K
- For North Vancouver, what was $1 mil is still about $1 mil
- For West Vancouver, inadequate inventory supply
Condos - What Was and What is
- For Vancouver’s west side, what was $825k is now about $735K
- For East Vancouver, what was $590K is now about $540K
- For North Vancouver, what was $665k is now about $630K
- For West Vancouver, what was $1.1 is now about $1 mil
The Market’s Bright Spot
The above information shows that North Vancouver is the tightest market, where the supply of inventory for sale is the lowest and where buyer demand is the strongest. North Vancouver in its entirety, rivals much smaller Kitsilano in terms of the average number of days on market it takes to convert a property asset into cash. That North Vancouver is much larger geographically than Kitsilano, is why this is remarkable.
When you consider that 2017 and 2018 pretty much marked the end of an extraordinary 15 year up market cycle, it’s hard to imagine that home values will incease again this year or next. However, as the cost of new construction is so high and that many new real estate projects are now being postponed and that financial contributions to municipal governments by developers for new projects are so huge, these are clearly governing factors which limit declining home values.
A 45% increase in sales volumes in one month does not establish a trend and May will probably be the busiest month this year but given that total listings are also flatlining, this may signal that the market decline is best seen in your rear view mirror. There is definitely pent up demand, the busy month of May will trigger more buyers to become more active.
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