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The problem with looking at one piece of data out of context is that, all too often, the context is what renders the data useful.  This month’s Real Estate board press release is a terrific example of that very fact.  And the problem with the Real Estate Board not doing a thorough analysis is that the media blindly reprints the board’s press release.

 

Now that we’ve set the stage, 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.

  

 

AREA

SALES RATIO

INVENTORY + VARIANCE

AVERAGE

SALE PRICE

DOWN TOWN

Attached

78%

 

370 - Up 6%

 at list price

VAN WEST

Detached

33%

528 - Up 1%

1% below list

VAN WEST

Attached

82%

395 - Up 2%

4% above list

VAN EAST

Detached

27%

448 - Up 1%

3% above list

VAN EAST

Attached

94%

227 - Up 7%

6% above list

NEW WEST

Detached

 

52%

92 - Up 33%

3% above list

NEW WEST

Attached

85%

177 - Down 3%

2% above list

BURNABY

Detached

37%

 349 - Up 30%

2% above list

BURNABY

Attached

93%

369 - Down 1%

3% above list

NORTH VAN

Detached

65%

 209 - Up 28%

3% above list

NORTH VAN

Attached

100%

 147 - Down 3%

3% above

 

 

 

 

Our regular readers will quickly see that almost all of the markets moved further into sellers’ market conditions over the last month (and the few that did move upwards, didn’t really do so by any significant enough amount to be relevant.  In fact, we are now in sellers’ market conditions in all of the areas we track for this report.  These market conditions are not new for condos and townhouses (which have been experiencing sustained sellers’ market conditions long enough that pricing is driving upwards).  The detached market, on the other hand, has been a much more balanced market over the last few months and it’s only recently (the last 3 weeks) that we’ve been experiencing seller’s market conditions on the detached side of things. 

 

Imagine then our surprise when the Vancouver Sun reported that “buyers looking for a detached home will soon have more options to pick from and less competition to out-bid”.  We then remembered that journalism isn’t what it used to be and that they were probably not doing their own analysis, but were getting their information from the Real Estate board’s press release (which we then went to find) which stated that “Home buyers are beginning to have more selection to choose from in the detached market..”.  One of the biggest problems we have with this report is that it doesn’t take into account the number of active listings which are not actually homes available for purchase by buyers looking for a home to live in. As of May 4th, there were 749 detached homes listed in Vancouver. Of those listings, 219 were land assembly properties. That means 30% of the inventory that is being counted as available by the real estate board, and consequently by the media, are not actually available to anyone other than developers.

 

To further illustrate the increased pace of the detached market we will share a story from a sale last week.  An older house (56 years old) with no updates and an unfinished basement on a 33×109.4 lot was listed for 1,200,000 two weeks ago. The closest comparable sale was a month previously of a 29-year old house on an identical lot with a suited basement a block down the street that had sold for 1,368,000.  The older, un-renovated house without a suite ended up selling for 1,333,000 – not nearly enough of a difference to make up the difference in finishing between the two (let alone the extra kitchen and income potential offered by the 29 year old house).

 

We’d be remiss not to mention the impact the changing political climate may have on the housing market.  Opinions on the topic are wide-ranging – with some speculating that if/when the NDP/Green coalition take power, the economy will suffer and housing prices will fall and others speculating that the market demand is too strong to have a noticeable impact on housing prices for any sustained period of time.  However, the changing political climate has already had the impact of everyone wondering what will happen to housing prices.  Generally speaking, the slightest uncertainty has been enough to slow the market – and so it is fairly reasonable to expect that the market will likely slow for some period of time in the not too distant future.

 

For full reports for Metro Vancouver, Greater Vancouver and Fraser Valley market activity by neighborhood and price point, contact me and I would be happy to share. 

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