So how many different stories have you heard about the Real Estate Market in Greater Vancouver? A Bubble, Buyer or Seller’s Market, Balanced Market, Interest Rate Changes and a Mainland Chinese Buyer Serge? Just to cite a few topics that has come up. So what is really happening?
- After peaking in March 2011 at 4,137 units (3,190 in March 2010) that month in Greater Vancouver, we have seen the number of units sold fluctuate to a total of 2,299 in September 2011 (2,254 in September 2010) with prices up 1.9% in that period. During the 6 months up to September, total units sold were up 10.3% on average per month. Since August 2010, prices are up 8.5%.
- Residential sales in Greater Vancouver will likely finish 2011 up 6 to 7% above sales in 2010 at 33,000 units
- The number of active listings in Greater Vancouver has increased moderately since March 2011 at 14,100 to 17,206 in September 2011 (16,593 in September 2010)
- Currently in Greater Vancouver, there is a 7 month supply of inventory (homes for sale). In March 2011, there was a 3 month supply. Typically balanced market conditions exist when there is 5 to 7 months supply.
FACTORS THAT HAVE AFFECTED OUR REAL ESTATE MARKET:
- HST – once again, the tax that attacks has affected and continues to affect the real estate market – uncertainty as to what the transition away from the HST will be has created a wait and see approach with buyers of brand new homes. Note – HST is only charged on brand new homes.
- As always weather continues to be a focal point in Vancouver, with a delayed summer until August through into September – market activity was curtailed when the sun finally came out.
- Interest rates have remained at historically low levels, fluctuating slightly in the spring with a drop going into the fall – all signs pointing to continued low rates through 2012; thereby creating a lack of motivation to buy
- Global uncertainty surrounding European and United States debt concerns, slower moving economies and
- Strong demand from Mainland Chinese Buyers created a boom in detached homes in Vancouver’s West Side, Richmond and West Vancouver – skewing average prices (imagine getting the average price of a car when you include Ferraris and Toyota’s)
WHAT IS HAPPENING IN TODAY’S REAL ESTATE MARKET?
- Fixed Interest rates have again declined to their lowest levels, increasing affordability for buyers
- Active listings have remained just above 17,000 in Greater Vancouver to date and with buyer demand increasing balanced market conditions are occurring (in some cases Buyer’s Markets are occurring – not enough though to cause downward pressure on prices)
- No more than 6% of homes have less than 20% equity – a strong equity position will prevent the possibility of foreclosures should interest rates rise
- Greater Vancouver continues to be a destination for national and international migration which fuels demand both in the long and short term
SO WHAT TO EXPECT?
A balanced and normalized real estate market will occur with prices and sales to remain relatively flat over the next 2 years. FLAT IS THE NEW UP! We went through the biggest shock to the Global Economy since the Great Depression in 2008– and our real estate market did not collapse. So then what could cause this dramatic drop that so many media outlets predict? The fundamentals in Greater Vancouver are very strong which will keep our real estate market even.
Buying or selling? Call me today and I would be happy to discuss market conditions in your neighbourhood. And please do not hesitate to pass on my name to anyone you know who is looking for real estate assistance!