Tag Archives: real estate market

Real Estate Activity Picked Up as Price Decreases

 

This summer, real estate activity increased as compared to the first half of 2019.

“Home sales returned to more historically normal levels in July and August compared to what we saw in the first six months of the year,” said REBGV President Ashley Smith.

Buyer activity had increased, although sale is still below the 10-year aveage.

The sales-to-active listings ratio for August 2019 is 16.7%, a slight decrease from the 18% in July 2019 in Metro Vancouver. The ratio is in the balanced market range. For a breakdown of ratios for different property types, please see the table below:

The ratio also varies in different areas in Metro Vancouver. For example, we are seeing the condos in Brentwood are sold fairly quickly if priced well.

For condos, the sales-to-active listings ratio for both July and August 2019 had surpassed the 20% market.

According to analysts, if the ratio surpasses 20% for several months, we often see an upward pressure in price.

Sales of condo increased 8.9% in August 2019 compared to the same month last year. The benchmark price of condo decreased 7.4% from same month year to $771,000. Although sales went up, inventory was also up, making sales-to-active listings ratio lower as compared to the heated seller’s market a few years ago (hence the lowering in price).

Condominium remained in higher buyer demand as compared to other property types due to its lower price point.

Buyers still benefit from the low interest rates, increased inventory and reduced prices in this balanced market.

On September 4, 2019, Bank of Canada left the benchmark interest rate unchanged at 1.75% as trade war between China and the US was doing more damage on Global economy than forecasted in July 2019.

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Increased Home Supply and Below Average Demand from Home Buyers in February

We are seeing the effect of increase mortgage interest rate and government involvement on curbing the rapidly rising of home prices in Greater Vancouver.

Compared to the same month last year, we saw a 32.8% decrease in homes sale. But compared to the previous month, we see a 34.5% increase in sales.

The market is not as hot as last year but it is picking up as Spring is approaching. Year over year, the market usually does better between March and June. We still see some multiple offers in Downtown Vancouver and Burnaby’s condo market but we also see a lot of price reductions.

As we can see in the sales-to-active listings ratios for February 2019 below, the townhouse and condo markets are now in the balanced market, meaning home buyers have more choices and face less pressure to act very quickly and sellers can still expect too sell if the home is reasonably priced. As for single family homes, buyers now still have more advantages over sellers. It is a great time to buy single family houses.

Sources: Real Estate Board of Greater Vancouver

If we look at the sales-to-active listings ratio for the past 10 years (graph below), we can see that the most recent seller’s market in 2017 did not reach the height it did in 2016!

People often ask us which way the market is going in all kinds of markets. Our answer is always “we don’t know in the short term”. As we can see from the graph above that ratio dropped suddenly at the 2nd half of 2016 and jumped up sharply at the beginning of 2017. It was only half an year in between that the supply and demand changed direction and then changed again.

If we look at the HPI price over the past 10 years, we see that the price has dropped to around the level in June/July 2017 which is still higher than at the peak of the market in 2016. For seller’s I think it is still a good time to sell because the price is still as good as back in summer 2017 when the ratio was at its most recent height.

People generally want to buy at the bottom and sell at the peak of any given market but as we can see above, the tide can change very quickly and selling anywhere near the peak is good enough for me.

As for buyers, when the price bottom out in January 2017, it never went below the price in May 2016 when the price was still rising steadily. I don’t think the price will ever go back to the level 10 or even 5 years go when the average home price for all property types in Metro Vancouver was about $600,000.

Even during the world financial crisis in 2008-2009, the price bottom out at $500,000 which was still higher than merely 4 years earlier in 2005 at $400,000. So for the longer run (5 years and more), real estate prices generally go up. So for buyers, it is usually better to buy earlier than later if you are buying and holding on to the property long term and the numbers make sense for your particular financial situation.

For the February stats package from the Real Estate Board, click here.

Real Estate Market Activity Slows

Although buyers still had to compete for condos last month, we are seeing less people coming through open houses and less number of offers in each multiple offer situation. There are signs that the market is slowing down.

“High prices, new tax announcements, rising interest rates, and stricter mortgage requirements are among the factors affecting home buyer and seller activity today.” Phil Moore, REBGV president said in the statistics report released last week.

The sales-to-active ratios for March 2018:

  • For all property types, the ratio was 30% (up 2%, still in seller’s market)
  • For detached home, the ratio was 14% (up 1%, entering balanced market)
  • For townhomes, the ratio was 40% (up 2%, still in seller’s market)
  • For condos, the ratio was 62% (up 2%, still in seller’s market)

Although there were less demand from buyers and a 30% decrease in home sales in March 2018 compared to a year ago, the Sales-to-Active Ratios were still increasing across all property types.

Phil Moore explained “Even with lower demand, upward pressure on prices will continue as long as the supply of homes for sale remains low. Last month was the quietest March for new home listings since 2009 and the total inventory, particularly in the condo and townhome segments, of homes for sale remains well below historical norms.”

Read REBGV’s March 2018 Market Highlight’s here

Market activity picks up in May

Real Estate Board of Greater Vancouver released their monthly stats report today click here to read.

Home sale last month (May 2017) is reaching the “all-time record sales number” of May 2016 and an 23% increase from April 2017 (see infographic below).

“While sales are inching closer to the record-breaking pace of 2016, the market itself looks different. Sales last year were driven by demand for single-family homes. This year, it’s clear that townhomes and condominiums are leading the way,” said Jill Oudil, president of the Real Estate Board of Greater Vancouver (REBGV).

She said first-time home buyers and people who are downsizing from single family houses are both competing for condos and townhomes while the numbers of homes available for sale remained low.

This is pushing the sales-to-actives ratio for condominium to 95%, meaning almost all (95%) of condos listed are sold. The days a property remains on the market remains low. Buyers have to take action right away or risk losing out. It is often looking at the property today and make offer this or the next evening, often with little or no subjects. We are seeing sold price almost $30,000 to $100,000 above asking price for condos!

Single family houses are also returning to sellers market from buyers market at the end of last year with sales-to-actives ratio reaching 31% last month.
The sales-to-actives ratio for townhomes remain strong at 76%.
All property types are now in sellers market. AGAIN.