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Low Supply and Snow Limit Vancouver-area Home Sales in February – Vancouver Sun


Scotiabank CEO Concerned About Correction in Vancouver, Toronto Housing Market –Global News

 

Imagine reading those headlines and then having us tell you that you’re going to be competing against 5 other buyers for the home that you want to live in.  That is exactly what happened for three of our buyers in the past week.  Which begs the question – why is the media reporting the “end of the Vancouver Real estate bubble”? And, more importantly, what is actually happening in the market?

 

We’ll 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 7 are considered Buyers’ markets, below a 5 are Sellers’ and in-between are considered balanced.  Beside the number, I’ve indicated the direction the market moved when compared to the previous month.

 

Months Supply

Van West

Van East

North Van

Richmond

Burnaby

New West

Detached

6.1

Down

7.9

Down

2.6

Down

7.2

Down

8.2

Down

9.1

Up

Attached

3.0

Down

3.7

Down

1.2

Down

2.9

Down

3.6

Down

2.3

Down

Condo

1.8

Down

1.7

Down

1.3

Down

1.7

Down

2.0

Down

1.4

Down

 

It’s certainly true to say that some segments of our market are slow (even incredibly slow in some cases), but the vast majority of homes in the Vancouver area are in fact experiencing Sellers’ market conditions.  Statistically, the only “line” we can really draw would be loosely defined as the “luxury market”.  That is, homes at the top end of whatever segment we’re looking at (Eastside detached homes over $2.0Million, Westside detached over $3.5Million, New West homes over $1.0Million).  In virtually all cases, homes in the “luxury” segment have experienced a dramatic slowdown and a steady (if not steep) decline on pricing since Summer 2016.  The unwritten story (at least, uncovered by the media) is that the rest of the market is actually incredibly strong with multiple offers and price increases being the norm in those “affordable” segments.  For instance, just last week, we saw an east side house priced at $1,338,000 sell with 11 offers for $1,650,888.  Or, the week before a 1 bedroom condo in Fairview priced at $530,000 sell with 4 offers for $590,000. 

 

Other than the segmented market, the other interesting observation to note has been the complete lack of inventory in virtually all areas of the market.  While sales volume remains lower than the last two years, a comparison of sales volumes for February show that February was a strong month when compared against 2012, 2013 or 2014.  However, Buyers are simply not seeing the kind of variety/choice that we typically experience in this season.  If you ignore last year’s Spring, the current inventory is running at approximately ½ of what we saw in February of 2012, 2013, 2014 or 2015.  Obviously, when the supply side of a market equation isn’t sufficient, the market pressure will cause an increase in pricing – and that’s certainly what we’re seeing in markets outside of the “luxury” end of the market.

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