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Is it over? Is this the top?


The age old question of Vancouver Real estate for many years has been – is the bubble “finally” popping? (or, from a homeowner – “are our values going to plummet?)  Unfortunately, we’re not going to be able to answer that question definitively today – but I will tell you what we’re feeling now and what we expect to see.


The Numbers 

 

Let’s start with the usual stats - the numbers shown are a ratio of the number of active listings (at end of month) over the number of sales in that month.  Numbers above a 20% are considered to be sellers’ markets, below a 15% are buyers’ market and in-between are considered balanced.  Beside the number, we’ve indicated the direction the inventory on market moved when compared to the previous month. (Contact me for stats for other lower mainland areas).

 

AREA

SALES RATIO

INVENTORY + VARIANCE

AVERAGE

SALE PRICE

DOWN TOWN

Attached

51%

 

446 - Up 20%

 1% above list

VAN WEST

Detached

10%

705 - Up 6%

3% below list

VAN WEST

Attached

44%

472 - Up 20%

2% above list

VAN EAST

Detached

14%

768 - Up 3%

1% below list

VAN EAST

Attached

81%

225 - up 10%

3% above list

NEW WEST

Detached

            22%

90 - Up 10%

2% above list

NEW WEST

Attached

80%

162 – Up 18%

% above list

BURNABY

Detached

11%

 515 - Up 10%

2% below list

BURNABY

Attached

63%

369 – Up 25%

3% above list

NORTH VAN

Detached

26%

 

 308 – n/a

List price

NORTH VAN

Attached

61%

 191 - Up 31%

3% above



Some Context 

 

It’d be hard to ignore the fact that all 18 product categories above all trended towards buyer’s (or “slowed down”).  However, before you spring to any conclusions, I would point out that for the attached and condo segments, the numbers basically had no choice but to go up.  It would have been mathematically extremely challenging for them to remain as slanted towards sellers as they were last month.  Indeed, the evidence we’ve seen on sales pricing over the last couple of weeks supports that we are still very much in a seller’s market in all areas in the attached and condo segments. Multiple offers are still very much the norm (with the vast majority of offers being made subject free) and pricing week after week continues to increase.


Are Houses still Hot?

 

The detached segment of the market is a very different story – though perhaps not the obvious one based on the numbers.  Interestingly, some houses are still seeing multiple offers (admittedly not as many) – and those places do appear to be setting new record high prices.  However, houses that are listed at market or slightly above market (or have no super unique selling characteristic) are having a much tougher time selling and we’re seeing pricing going down a bit on those.  The only explanation I’ve been able to come up with is that buyer’s (and/or their agents) are allowing the strata market to impact the way they are acting when buying detached homes and are thus whipping themselves into a frenzy in the multiple offers that are developing (and thus potentially making a mistake by not choosing one of the many other options that are now available).  Interestingly, despite the buyer’s market conditions, pricing on detached still increased month over month by 1.5%.

 

What’s next?


There’s been several major changes in the marketplace recently – a change in provincial government (to a coalition of parties who have stated an interest in making Vancouver real estate more affordable), an increase in the Bank of Canada interest rate and a proposed change in mortgage qualification criteria for uninsured mortgages.  Given these larger forces, it is reasonable to expect that the detached market will continue to be slanted towards buyers for some time.  Lower priced detached homes continue to sell quickly, but as their prices rise, they too will slow and prices overall will thus decline (the current growth in pricing is because while the top end of the detached market is extremely slow, the bottom end remains reasonably active for the most part).  Attached and condos will eventually feel the same dragging force – however, when that actually happens is anyone’s guess (and there’s just no evidence of it yet).  It is our expectation, however, that despite the overall slowing in our marketplace, prices will remain reasonably sticky and we won’t see substantial price decreases in any of our markets.  

 

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