February headline from the Real Estate Board of Greater Vancouver reads:- ‘Low supply keeps upward pressure on home prices across Metro Vancouver’s housing market’. Last month’s sales were 25.3% above the 10 year January sales average in spite of the fact that the Board also reported that the listing inventory on the multiple listing system was less than half of what they would consider “optimal” at the start of a new year. Net result – limited choices causing buyers to compete for a purchase resulting in price increases.
When delving into the stats for our specific market region we see a really interesting trend – rising inventory levels in every housing category in every area, except for the Port Moody detached market. Some levels rising more gently than others, but definitely sends a positive message to buyers. Perhaps more hesitant home owners will become sellers this Spring – historically our most active time of year.
Year of the Tiger begins February 1st this year and ends January 21st 2023. But this is no ordinary tiger – it is a water tiger, and a water tiger year occurs only once every 60 years. So..you water tigers seize the moment – it is an auspicious year for a wedding and single tigers may meet a lifelong partner. But their horoscope warns of many challenges this year and next, and advises caution in undertakings. This is wise counsel to us all in these uncertain times.
Caution is not a word which has been much associated with real estate sales and purchases these past 2 years. However, the impending rise in interest rates is a cautionary tale all by itself. For would be buyers out there, feeling confident with a mortgage pre approval in hand, this is the moment to have your broker / banker lock in your interest rate for as long as possible (normally 60 – 90 days) at today’s rate, to avoid being caught up in a raise in rates. This is your last chance to experience an interest rate this low, so if you can stretch it out for the next 5 years why not? The devil is in the details and one of those vital details is insurance. When purchasing make sure that your home / condo insurance starts on completion day – the day you pay your money and title changes hands, not the day you move in. We just heard the horrific tale of a buyer who moved into her new home a week earlier than originally planned, but her insurance did not kick in until the original possession date. That week was the week of a flood affecting the buyer’s new home and she had no insurance in place – a costly oversight. If you tie the insurance to the completion date, you are safe with no large gaps.
Knowing what has gone wrong in the past and could go wrong in future is the valuable experience of a seasoned realtor whose job it is to be prepared and avoid those land mines. That is the mandate of the Generations Real Estate Partners – to protect our clients from unintended consequences and succeed in safely achieving their housing goals. If you have questions we are here to answer and help. We still have you covered.
So….Go get ‘em tigers! This is your year.
Best wishes from the Generations Real Estate Partners:
– Michelle Hawthorne, Scott Johnson, Ray Harris, Shane Goutsis and Sheila Francis.
Interest rates have continued to be low and buyers have continued to buy! Last month’s home sales were 22.4% above the 10 year October sales average. There was a 27.3% decrease in number of properties listed for sale last month compared to the numbers for the same time period last year. “Home sale activity continues to outpace what’s typical for this time of year and the pool of homes available for sale is in decline. This dynamic between supply and demand is causing house prices to continue to edge up across the region”, Keith Stewart, Real Estate Board of Greater Vancouver economist said. Given the prospect of rising interest rates at some point in the not too distant future, buyers with a guaranteed interest rate on hold will continue to be serious buyers even now at a time of year when we would normally anticipate a slow down.
Canadian real estate market sees higher share of condos in 2021, in wake of rising detached housing values; affordability shifts demand for condominiums into high gear in 2021
Staggering gains in detached housing values have sent condominium sales soaring throughout the first eight months of 2021 in major Canadian real estate markets, according to a new report by RE/MAX Canada
The RE/MAX Canada 2021 Condominium Report, which examines trends and developments in five major Canadian real estate markets and more than 100 sub-markets, found that buyers turned to condominiums in 2021, as freehold housing values escalated beyond their reach. The strongest gains in sales were made in the West, where Greater Vancouver and Calgary saw condominium sales rise 87 and 83 per cent respectively between January 1 and August 31 of 2021, compared to the same period in 2020, which experienced a notable downturn in condo sales. The Greater Toronto Area (GTA) led the East in terms of percentage increases in condo sales at 71 per cent, followed by Halifax-Dartmouth at 36 per cent and Ottawa at 29 per cent. The greatest upswing in pricing occurred in the East, with both Halifax-Dartmouth and Ottawa posting double-digit price gains of 30.0 per cent and 18.0 per cent respectively. More moderate appreciation was reported in Greater Toronto (seven per cent), Vancouver (6.7 per cent) and Calgary (three per cent).
We hope that Thanksgiving was a day this year when we could feel gratitude for our families and friends as we got together, whether in person or virtually. Zoom is the wonder connector where regardless of where home is, everyone can join the chat – truly something to be grateful for.
There has been a lot of chatter about the real estate market reaching “balance”, but that is not exactly what the actual statistics for September told us. As pointed out by Keith Stewart, economist for the Greater Vancouver Real Estate Board – our September inventory of homes showed a 90% decrease from last year’s inventory in the same time frame. Translated that meant there were insufficient homes to meet the continued high demand. A step towards balance came with the fact that yes, the overall supply remained low, but without the same extreme pressure on the prices. With an absorption rate of 34%, it remains a seller’s market for yet another month.
Looking locally, it remains the same story as for the past few months – as we move east, the sale numbers increase even though the inventory decreases in most cases. In the detached category, Pitt Meadows experienced a higher number of sales than inventory with homes selling on average 3% above list price. Maple Ridge detached had the exceptional absorption rate of 7.5 in 10 selling on average 1% above list price. Port Coquitlam’s seriously dropping inventory in detached homes resulted in a 67% sales ratio average with homes selling 3% above list price – a clear indication that inventory affects price.
Our lowest absorption rates occurred in the westerly locations – Burnaby, New Westminster & Coquitlam, specifically in detached homes. Overall throughout the Vancouver Board area townhome sales are the strongest with no exception locally. Port Moody’s statistics are interestingly different in that the sales in detached and attached homes are pretty similar: 53% sales ratio in detached homes selling on average 7% above list price and 59% sales ratio in attached category, but selling 2% below list price.
With our next time line being Christmas and all eyes on the interest rates, our crystal ball becomes cloudy! There will still be those serious buyers who are determined to buy the “right” home – but will sellers come on stream in any kind of numbers any time soon?
Those who have been tempted by the rapid increase in sale prices have already taken advantage of the strong market – impossible to guess how many potential sellers are waiting until this pandemic is over. For some, the idea of having unknown buyers in their homes – regardless of rigorous sanitary protocols, is to be avoided for now. Only time will tell…watch this space.
One thing we can forecast is that, whatever the climate, Generations Real Estate Partners will be ready to keep you covered as always. Ready any time to answer your questions and give you the latest from our local “boots on the ground” experience.
Continuing in our long tradition of trust and caring, we are:- Michelle Hawthorne, Scott Johnson, Ray Harris, Shane Goutsis and Sheila Francis
Hope Labour Day weekend gave a feeling of normalcy even while still in the midst of abnormal times. Ferry lineups told the tale of us all longing for a change of scenery. While kids readjust to a different kind of school life, we realtors are longing for an increased inventory to give our buyers more choice and relief from multiple offers.
Looking at the August stats between Burnaby and Maple Ridge, almost all categories in all areas have a steep decline in available homes on the market. This needs to change in order to reverse escalating prices. Over the years, we have experienced these market fluctuations which ebb and flow with inventory increases & declines – eventually resulting in the desired balance for a while. This is not something politicians can “fix” immediately post election – or indeed any time!
It would be perfect if this Fall, we returned to pre pandemic “normal” times, when many people decided September was a great moment to sell their homes with a view to move by Christmas. Only the next 2 months will give us an answer.
Highest sales ratio in our region was in Port Coquitlam townhome and condo category with 9 in 10 homes selling with an average of 8 days on the market. It coincided with a steep inventory decline. Maple Ridge showed the best overall sales numbers with a 75% sales ratio in both detached and attached categories. Interestingly, in Port Moody detached homes with only a 32% sales ratio, the successful sales happened within 12 days of coming on the market.
As the dog days of summer roll on and become shorter the most overused word (possibly with the exception of “unprecedented”) is “crisis”. The second favorite topic of conversation across the country is “unaffordable housing” with the word crisis often thrown in. Then there follow all the suggested solutions – severely tax foreign buyers, ease the ‘stress test’ for mortgage applicants, increase the capital gains tax, incentivize 1st time home buyers with government funds, ban “blind bidding” etc. etc. on and on….
This is the one “crisis” with an obvious solution which has become significantly clearer over the past 18 months. Brisk sales during this time have revealed that during this time of escalating prices, our buyers have been local – foreign buyers almost non existent (unless you count those from far off eastern Canadian provinces!) and our team has seen no ‘flippers’. These buyers were local residents reassessing their priorities as they had time to reflect on their lives – missing family in other parts of the country, working from home, longing for a quieter lifestyle, – a myriad of very personal reasons. Yet – prices increased and people continued to buy – competing with each other to purchase what they wanted.
After all the real estate price increases between 2020 and this year, 2021 saw a spring spike, followed by a summer settling. Moderation is the order of the day now as pretty much universally across our region we are looking at falling inventory with corresponding falling numbers of sales, while prices remain pretty stable. Low interest rates are still encouraging some buyers to take advantage of them.
While most of the wild talk about the “housing crisis” has made no sense whatever, this week we received a refreshing common sense response from the CEO of CMHC. He said that the “best way to combat soaring home prices is building new housing” – genius!
But, we seem to be tied up in red tape causing projects to be stalled due to duplicate red tape, staff working from home and a bureaucratic log jam. This is the real cause of delay rather than so called “greedy companies” and non existent foreign buyers. Watch out for the fast approaching moment when “delayed due to Covid” is no longer an acceptable excuse! We, the voters, have to hold our elected officials accountable for what happens at City Halls and get the balls rolling at a reasonable pace.
The June report from the Real Estate Board of Greater Vancouver states that sales have “eased back from the record setting pace seen in March and April of this year”. But at the same time recognizes “strong seller market conditions”. Keith Stewart, REBGV economist declares that “The past 2 months have shown a market that’s shifting toward more historically typical conditions”. This may have some small merit in a particular market sector, but in no way shows up in our local stats from Burnaby and east to Maple Ridge and can be a misleading generalization when it comes to our market.
While the market may have lost some of its intensity in spots, our recent ‘boots on the ground’ experience has been one of competing buyers and multiple offers. Looking at the local stats gives us the reason – in almost every home category in every location, inventory has dropped significantly. New Westminster and Port Moody attached markets are the only ones showing an inventory increase. As choices dwindle, competition results.
