The Crash Ain’t Coming
Going back a few months, our market was fairly quiet and some were declaring an imminent crash. In reviewing this month’s numbers, it’s reasonably clear that any threat of an imminent crash has disappeared.
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 7 are considered to be buyers’ markets
- Below a 5 are sellers’ market
- In-between 5 and 7 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|
The incredible thing about these numbers is how quickly and how strongly the detached markets have rebounded. Admittedly, the west side of Vancouver is now “only” in a balanced market, but it is important to remember that a short two months ago, we were reporting 15.6 months of inventory in that market (the strongest buyer’s market conditions we’ve seen in any of our markets since January of 2009). Similarly, detached markets in other regions (which had been trending in the 7 to 9 months range) are all squarely back in seller’s markets. Realistically, the attached/condo markets didn’t really have much “recovery” to make (as anyone who regularly reads this newsletter will know). They have mostly all remained in seller’s market conditions. That said, it is still striking to see that it has gotten even tougher on buyers than in the last few months.
A Closer Look
The question is what is driving these conditions? For the most part, the answer continues to be a lack of inventory. Homeowners simply don’t seem to be selling their homes in as large numbers as our market has/had become accustomed to. Excluding 2016, we are seeing inventory levels at ½ of what we would in the month of March for any of 2011 to 2015. Sales numbers are also down when compared to those years, but not in nearly the same percentages (generally closer to 25% to 30% less sales in any comparable March).
What Does This all Mean?!
It means that as long as these pressures remain for any sustained period of time, we’ll see prices increasing again. We had seen prices decrease through last Fall. Most of the pricing graphs for these markets are now showing prices levelling off and, in some cases, price increases again.