Is it Over? Is this the Top?
For many years, the age-old question of Vancouver Real estate has been whether the bubble is “finally” popping? Or from a homeowner: Are our values going to plummet? Unfortunately, we aren’t able to answer that question definitively today, but I will tell you what we’re feeling now and what we expect to see
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 to be buyer’s markets, below a 5 are seller’s 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|
It would be hard to ignore the fact that all 18 product categories above all trended towards buyer’s markets (or “slowed down”). Before you jump 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 challenging for them to remain as slanted towards sellers as they were last month. Indeed, the evidence we’ve seen on 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 the norm (with the vast majority of offers 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 homes 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 buyers (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%.
There have been several major changes in the marketplace recently including a new 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, I think 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.
Listen to our Latest Podcast Episodes on The Vancouver UnReal Estate Show
- Episode 26 – Vancouver Housing Reset – Will it Work?
Is the proposed Vancouver housing strategy going to work or is this just a ploy by the mayor to get re-elected? This week, friend of the show Chris Thompson and I review the City’s “housing reset proposal.”
- Episode 25 – Vacant Homes, Rate Hikes and Robots – A Q&A with Keith
This week we open up the proverbial mailbag and answer some listener questions…and there’s a lot to talk about. Keith addresses the new vacancy tax, rate hikes and once again answers the question, “Is Vancouver in a bubble?”
- Episode 24 – How to Fix The Vancouver Housing Crisis
After 6 months of doing this show and looking at home ownership in Vancouver, have we managed to figure out how to make this city more affordable? We highlight some of our most popular interviews in the show this week, and review some of the best ideas we’ve heard so far.
- Episode 23 – Tony Joe on Foreign Buyers and The Victoria Real Estate Market
In this episode we talk about who’s moving to Victoria, whether or not foreigners are to blame for unaffordable housing and some of the racism and challenges Tony has faced as a Chinese Realtor in British Columbia.
Featuring Tony Joe, a man with many titles including: past president of The Victoria Real Estate Board, host of The Whole Home Show, long time Victoria Realtor, real estate coach and president of The Asian Real Estate Association.