The latest Real Estate Board of Greater Vancouver statistics confirm that we are in a transitional market, with sales down 30% from this time last year and 29% below the 10-year average. With fewer buyers active in today’s market, we’re seeing less upward pressure on home prices across the region. This is most pronounced in the detached home market, but demand in the townhome and condo markets is also relenting from the more frenetic pace experienced over the last few years.
On the Westside, detached home prices are down between 10-15% from the high water mark of July 2017, with a sales-to-active ratio of just 6.6%, firmly in buyer’s market territory. Houses priced over $3.5M are most affected by the shifting tides, with buyers in the driver’s seat. Condos and townhomes have been less affected so far, with average prices still up between 5-10% from where they were a year ago, although month-over-month we’re starting to see some slippage – reinforcing the transitional nature of the market. Sales-to-active ratios for strata housing is trending towards balanced market territory, with condos at 24% and townhomes at 19%. Generally, analysts say that downward pressure on home prices occurs when the ratio dips below the 12% mark for a sustained period, while home prices often experience upward pressure when it surpasses 20% over several months.
On the Eastside we’re seeing a similar pattern, although lower prices have mitigated the impact, so far. Year-over-year, detached homes on the Eastside are down about 2%, with the current sales-to-active ratio at 8%. Average condo and townhome prices are up 8.4% and 4.4% respectively, although we have seen recent month-to-month declines in all housing types here too. Sales-to-active ratios for Eastside condos are currently at 35%, and at 22% for Eastside townhomes.
Both buyers and sellers seem to be in a wait and see mode, with sellers largely unwilling to relinquish paper gains and buyers reluctant to overpay in anticipation of a further softening in the market. We’ve seen this pattern before, most recently after the BC Liberals announced the introduction of the Foreign Buyer’s Tax in July 2016. Six months passed before sales started to pick up, and prices followed suit shortly thereafter. This time feels different. The combination of new legislation introduced by the NDP government in February, the tightening of mortgage qualification rules by the federal government in January, and rising interest rates have all put the brakes on the market. Possibly the greatest impact has been to chase the speculators from the market, leaving those who actually need housing to be the primary purchasers. In spite of some uncertainty as to what happens next, this can only be a good thing in the longer term.
As always, there are opportunities in any market.
For sellers, it is important to be priced competitively, and to have a professional high quality marketing plan to ensure that your property is a prospective buyer’s first choice. Having some flexibility in final terms and dates can be the key to a successful sale. Remember, all real estate is local – the value of your property is specific to your neighbourhood, block and improvements, and to the number of other similar properties competing for buyers’ attention. Call me for an up to date market evaluation and to find out how our proven marketing system can get you top dollar, quicker.
For buyers, having the very latest sales information to determine comparative value, and the ability to receive listings as soon as they are posted on the MLS system is key to getting the quality home you want. Pre-qualification for financing and the ability to fast track due diligence will make your offer more attractive. I’ll work with you to make sure you see the latest listings for properties that match your needs and budget. Once you decide on a place, I’ll guide you through the process and work with you to craft an offer that gives you the opportunity to secure it on your terms.
Give me a call to get started; I’d be pleased to help!
You can access the latest Westside stats here:
You can access the latest Eastside stats here:
For any other neighbourhood, just drop me a line and I’ll email you the latest stats.
BUILDING COSTS & AFFORDABLE HOUSING
This article appeared in the Globe & Mail a couple of weeks ago and I thought it made some very good points about both some new policy initiatives and the cost of building new housing in Vancouver, separate from the actual cost of acquiring the land. If you have a few minutes, I think you’ll find it interesting. You can access it via this link:
NEW DISCLOSURE RULES FOR REALTORS
As you may have heard, since June 15th the rules have changed for representation and disclosure in BC. All REALTORS are now required to present both clients and members of the public with a new Disclosure of Representation in Trading Services form, prior to providing anything other than general information about the market or a listing. This means that before you share any information regarding your own personal situation, I must provide you with the new form, signed and dated by me. I can provide the form in person, or by email. I’ll be posting a copy of the new form on my website FYI – and will make sure you get a signed copy before we discuss your own circumstances and specific real estate goals.
Also effective June 15th, Limited Dual Agency – where one REALTOR represents both a buyer and a seller in a transaction is prohibited. This means that if you have an interest in purchasing a property I have listed, I cannot provide you with any agency representation. I can either refer you to another REALTOR, you can find one on your own, or you must agree to be an unrepresented party in the transaction. There is also a new mandatory disclosure form to explain this, if the situation arises I must provide it to you without delay.
This dual agency ban also affects circumstances where a REALTOR has two different clients who both wish to make offers on the same property, as well as situations where a previous client, even if represented by another REALTOR, wishes to make an offer on a listing. You can count on me to make sure your best interests are always protected and to promptly inform you in the rare event that either of these circumstances occurs.
As always, if you have a question about the new regulations or anything else regarding our local market, just give me a call.