The market is certainly changing – and for anyone who reads the real estate news, that certainly won’t be a shock. What might be a shock is how different the market conditions have become depending on the product type under consideration.
As usual though, let’s start with the numbers. The numbers shown below are a ratio of the number of active listings (at end of month) over the number of sales in that month. Numbers above 7 are considered to be buyers’ markets, below 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|
First, it’s clear that generally speaking the market has become a little more reasonable for buyers. I should note, though, that none of our areas are officially “buyers’ markets” yet. The media has made a lot of the slowdown that has happened over the last 5 weeks and, yes, it has been a dramatic shift from the conditions we’ve observed over the last eight months. However, I would like to point out that while our year-over-year sales and month-over-month sales figures are down dramatically (21% and 28% respectively), total listings are still down when compared to this time last year (28% fewer listings) and are virtually unchanged compared to last month. Also interesting is that the number of new listings this month is almost identical to the July numbers for 2015 and 2014.
The net effect of all of these numbers is that our markets are continuing to move strongly towards more balance and, should the trend continue (and we think it will), will ultimately likely end up in markets favouring buyers in the not too-distant future). I do think it is important to note that our market is still very healthy. The last 8 months have conditioned sellers (and some realtors) to believe that multiple offers are automatic and certainly those market conditions are over, but sales volume is actually still strong and balanced markets are typically considered desirable.
I think it is also important to tease out the growing gap between the detached housing market and the attached/condo markets. Given the remarkable growth on pricing that the detached markets have seen in the last eight months, it should not be too shocking that prices have simply hit a point of unaffordability for most and thus stagnation was somewhat inevitable. Condos and townhouses, however, remain more attainable to more buyers and those markets continue to be extremely strong. I would point out that the market is (despite what some would want you to believe) relatively rational and so while strata continues to be highly competitive, a slowdown in this segment is inevitable once the gap between detached and attached narrows.