An eventful year in the Vancouver real estate market has finally come to a close – and what a ride it was. Records were set through Spring as prices increased at mind-blowing speeds. Fall had a very different feel with some observers calling the beginning of a major crash. Yet, as we start another year, the evidence for a more significant crash just doesn’t seem to be there.
Crunching The Numbers
Let’s begin with our usual numbers. The numbers presented 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|
We’ve always subscribed to the belief that detached home sales on the west side of Vancouver are the bellwether for the rest of the Greater Vancouver market. September numbers saw an inventory level of 11.0 months of supply, primarily driven by a significant decrease in the number of sales, but also partially driven by low inventory. Interestingly, sales since then have remained reasonably steady, but inventory has continued to shrink, causing that segment of the market to inch itself back to what are now balanced market conditions. Inventory levels remain historically slow (driven by a significant decline in new listings coming online), but sales figures are also dragging from their historical norms. By and large, the same trend has been echoed throughout the detached segment in all of our markets.
Condos and Townhouses
Condos and townhouses, on the other hand, have followed a different trend. When the detached segment “froze up” in August (our Market Updates from that era speak about the causes of the freeze in detail so feel free to contact us if you would like to read any back issues), condos and townhouses really didn’t. Sales tracked down slightly in year-over-year analyses, but available listings did in very similar percentages causing those markets to remain hot. To buyers shopping in the craziness of our Spring market, the Fall brought relief, but the pressures of the Fall were similar to what we would expect in a historically typical “Spring market.” In other words, through the Fall, we continued to see multiple offers on condos and townhouses with regularity.
Having recapped the year, we can turn our attention to what is to come. All of the indicators we’ve seen are that 2017 will bring price stability to the region. Detached home pricing (which has trended downwards by approximately 10% to 15% since their Summer peak) seems to be stabilizing now and the ongoing media speculation of an impending crash will help to keep this segment quiet but steady. Condo and townhouse pricing will likely see some increases – the First Time Home Buyer loan program will help bring more buyers into a segment that remains extremely active.
Interest rates remain reasonably low and while we expect them to rise somewhat through 2017, we’re not expecting them to rise enough to drastically change the market conditions.