As buyers continued to drag their heels and sellers rushed to list their homes for sale last month, we see 2 schools of thought – each with its own fan club. In almost all of our local market areas from west to east, the stats showed dramatic inventory increases alongside a greater slow down in sales. Single family sales remain well below those of last year and dramatically below 2021. Who knew that a pandemic would cause that kind of real estate activity? Just one more example of what we didn’t know and possibly a herd mentality!
With a 25% increase in the cost of groceries, stores & restaurants closing, the inevitable insurance hikes and general cost of living, our banks are waiting with some trepidation for the expected renewal of mortgages. This may be an additional nudge to the Bank of Canada to reduce the borrowing rate more, as well as the 30 year amortization. Andrew Lis, Greater Vancouver Real Estate Board’s spokesperson, points out that “It can take a few months for improvements to borrowings costs to materialize into higher transaction levels”. Another, less discussed effect on the market, is the flight to Calgary of many of our citizens in search of a more affordable lifestyle.
Port Moody’s condos and townhomes were the winners for last month with 3.6 in 10 homes selling, closely followed by the Pitt Meadows attached market with 3.4 in 10 homes selling. While clearly buyers are finding condos and townhomes the most affordable and best bang for their buck, we are seeing many recently completed condominium buildings where there appears to be a struggle to get them sold. They are offering reductions in price and inclusion of extras. Whatever the real estate product, pricing will be the most difficult moving forward.
While speculating minus the crystal ball, we can look back at real estate history and realise our summers were often very quiet in the real estate world and picked up considerably at the end of September after kids were settled back in school. This is when buyers and sellers contemplating a move seemed to suddenly decide that Christmas was a likely timeline and therefore geared up our market again. Our summer this year has also seen the largest number of people leaving town for extended holidays.
Investors too have flown the real estate coop thanks to new rental laws favouring tenants and as local real estate guru, Ozzie Jurock, says “outright punishes the owner investors”. He goes on to report that currently “there is total negative cash flow in all rental markets”.
If we leave you with more questions than answers, please use our combined considerable real estate experience to help you. We have many ways to be of assistance to you whether a move is imminent or in the distant future – always better to be prepared!
Enjoy the dog days of summer!
We remain your Generations Real Estate Partners: Michelle Hawthorne, Scott Johnson, Shane Goutsis, Ray Harris and Sheila Francis – Team Ambassador!