Today we are going to talk about the current state of the Greater Vancouver Real Estate Market.
The good news is that the Greater Vancouver market showed some life in the month of May. Market activity and statistics were better than I have seen since last summer. It is way too early to say that the market is turning around as it could just be a blip but there are some interesting indicators that show signs that this market might actually be starting to turn around.
Here are some things that I know for sure. There is pent up demand out there for buyers and the reason I know this is because there have been 78 properties in the Downtown, Eastside, Westside, Richmond or Ladner areas that sold with multiple offers in the month of May. The 1990’s were the last time we saw the market so dead for a sustained amount of time. During the 1990’s there were never multiple offer situations because there was just not as many buyers around. It is a different feeling this time and buyers are around. Since inventories have risen, the only properties that get these multiple offers are the ones that are priced very well and are considered great value by buyers.
A lot of these buyers are waiting around for the market to bottom out. But how do you know when the market has bottomed out? You would only know the bottom has occurred when it is on the way back up and you’ve already missed it! It is impossible to predict and time “purchasing at the bottom” and everyone wants the best value. What I will tell you is that house and condo prices have been the best they have been in years.
Three times in the last 20 years the markets have slowed down like this; in 1998/1999, 2008/2009, and 2012/2013. In ’98/’99 and ’08/’09 there were over 20,000 listings at the peak. In 2012 and 2013 there were 17,000 to 19,000 listings. This time there is only 15,000 listings. What that means, is that when the market starts to turn around and new buyers enter the market, it won’t take as long to work off that inventory to change things back to a seller’s market. Again, I am not saying this market is turning around, I am saying there are some indicators that could make it look that way.
We also have interest rates that are at 2-year lows, which will help to some degree and may have impacted the market last month. We have a federal election this fall, and both the Conservatives and Liberals are after the millennial vote. You have to think that one of them, or both of them, in their platform will be talking about the stress test to make it easier for millennials to get into the market and to entice them to vote for them.
I want to talk about these multiple offers and market conditions that we spoke about earlier. On the Westside, the condo and townhouse market is busy and it is a seller’s market. 42% of the properties listed under $800,000 sold last month, which is an extreme seller’s market. On the Eastside, 32% of homes below $1,250,000 sold. The Eastside condo/townhouse/duplex market is just plain busy and is a seller’s market. In the Downtown condo/townhouse market was 28% for homes below $900,000. In Ladner, the entire condo/townhouse market is busy with 30% sold. The Richmond market conditions have been the slowest out of all the ones we have spoken about, with the under $600,000 at 23%.
For detached houses, it is the same thing. Westside May sales were 25% for homes under $3,500,000, which is a seller’s market, and you don’t hear the press talking about it! Eastside was at 30% for homes below $1,750,000, Ladner 20% for homes below $1,250,000 and Richmond 33% under $1,250,000. These numbers also tell me that there is pent up demand in the market.