Vancouver is Changing
“Change is not to be feared, change is an opportunity.” There are numerous variations of that quote; but the message is clear – that whenever something is changing, a new opportunity is presenting itself.
Before we get into why we might discuss change though, 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’ markets, 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|
The Vancouver Real estate market has long been subjected to immense scrutiny by observers the world over. Indeed, all three levels of government have engaged in some degree of hand wringing over the price of Vancouver real estate. Over the last 24 months, all have used different levers to try and slow the pace of the market and/or bring down pricing. With every different policy announcement, some spectators have engaged in another round of discussion about the “imminent” crash of the market.
With the fear side of the equation laid out above, let’s delve into what is happening today. Our two markets (detached and attached/condo) continue to function seemingly independently and are experiencing very different conditions. On the detached side of things, inventory is down and sales are up. As is evident in the numbers presented above, the detached markets are generally fairly balanced markets with occasional examples of multiple offers, but many more examples of one offer eventually coming or houses even just sitting on the market. The amount of days a home spends on the market is currently a fairly “typical” (for the long-term) 21 days. Condos and Townhouses, on the other hand, continue to be very active. Multiple offers are still far more the norm (though – not always, and not as often as even 3 months ago) and the amount of days a home spends on the market sitting at around 10.
As we head into what has traditionally been some of the slowest months of the year, we’re faced with what can best be described as a fragile market. The amount of conversation around governments implementing more rules to slow the market has grown to a dull roar. With those conversations, we’ve seen lenders taking more conservative positions than they would have a few months (even a few weeks) ago and we’re seeing buyers and sellers increasingly unsure as to what to do. Over the last month, our team has seen several deals fall apart because a pre-qualified buyer was unable to secure a loan at the agreed upon purchase price (literally unheard of in our market in many years). Despite this, we’re still seeing a strong demand from buyers’ across the spectrum. Today, the opportunity lies on the fringes – the product that for one reason or another isn’t easy to get financing for. In a market with the current level of fear, if you can be the buyer who is able to get that deal financed, you’ll be rewarded handsomely whenever the market is more secure in its footing. The other (perhaps more obvious) opportunity is for owners of condos. There are very few condo/townhouse owners now whose homes aren’t worth more (often substantially more) than they paid. Thus, the current opportunity is to either lock those equity gains away by selling and/or parlay those equity gains into a detached property (while the detached market is a bit slower).
At the end of the day, the current fear in our market is just this month’s version of change. It won’t be too long before we once again are talking about the allure of living in Vancouver and the continuing lack of homes available for people who are choosing to do so.
Listen to our Latest Podcast Episodes on The Vancouver UnReal Estate Show
- Episode 38 – Foreign Money in Vancouver Real Estate with SFU’s Joshua Gordon
- Episode 39 – Loopholes and Band-Aid Housing Policies
- Episode 40 – Sam Sullivan on Solving the Housing Crisis (REPLAY)