Time is flying by, and as someone desperate for warmer weather, I couldn’t be happier about it! We’re into February already and the market is moving along as expected. Myself and my clients are finding inventory to be really low, especially good inventory. The start of the year is always slow to get started – the listings that hit the market are often properties that didn’t sell in the Fall, so it often takes some time to see an exciting increase in new inventory. I’ve seen a handful of multiple offer scenarios, many other properties selling quickly and some that are sitting on the market (I’m usually not surprised at which properties end up sitting on the market!). If you have questions on a particular market, get in touch with me!
There was a 0.25% interest rate increase in January which was generally expected. The Bank of Canada indicated that these rate hikes are working so they will be taking a wait and see approach going forward. I would personally be surprised if they increased again, but it will depend on the country’s inflation indicators over the next month. This increase affects anyone on a variable rate and new approvals (prime rate is 6.45% with this increase). On the flip side, bond yields were decreasing so fixed rates started dropping. Generally speaking, variable rates are based on data from the past, while fixed rates are based on data from today, so fixed rates continuing to drop are indicative that rates may have peaked. Talk to your mortgager broker about securing a 1-3 year fixed rate as it’s more than likely that rates will settle somewhere between 3-4% in the next couple of years.
The January market showed some signs of life. I’ve been getting a lot of calls from Buyers starting to think about buying. These are both Buyers who would be new to looking and other Buyers who have been looking over the past few years. I think this is due to a few reasons: (1) high interest rates aren’t a surprise anymore, so after a few months of this new reality, it’s easier to accept as the norm, especially if they’re thinking creatively like getting a short term fixed rate, (2) Some people have been on the sidelines long enough and want to move up and into their next property… the market didn’t slow down because people didn’t want to buy, it slowed down because of interest rates, so once interest rates flatline or start decreasing, Buyers will be back, and (3) prices have dropped, which makes the short term higher interest rates a little more palatable. I have a lot of clients who have been searching for real estate well below their actual affordability, so even though interest rates increased and their affordability dropped, they haven’t actually been affected. For example, say in 2021 someone was looking for real estate: they were pre-approved for up to $1.2-million but wanted to buy for $1-million or less. Now in 2023 with these new interest rates, their pre-approval has dropped to $1-million but prices have dropped as well – they can get a better property than they could before despite the higher rates. They may have to pay a couple years of higher rates compared to someone who locked in at 2.5%, but the lower price of the property makes up for it, and hopefully they can secure a lower rate in a few years.
As a Buyer, how can you find the best deal? Well, you have to be offering! There are a lot of Sellers out there who won’t drop their price to a low number, but they’ll accept it if it comes. I always like to remind Buyers that you need to find the balance between a good deal and a property you actually like, because it costs a lot of money to buy and sell real estate so if you buy a “deal” but want to sell it in 2 years, it could end up costing you more than if you bought the property you really liked that was a little more expensive. You live in your home every day and it has a serious affect on your lifestyle – make sure you choose wisely!
As for Sellers and inventory – I think we’ll see an expected increase in inventory this Spring – but I don’t think it’ll be higher than average. Buyers are still looking for the good properties: anything that is a reno project or just plain odd will have trouble selling (unless it’s priced low) though Buyers still recognize and appreciate the really good properties in good locations. If you’re thinking about selling your property, give me a call to chat about value, pricing strategy and the sale process. There are plenty of details to chat about – including timing, value, staging and your potential purchase – so don’t hesitate to contact me if you’d like to get started kristi@realestatevancity.ca or 778-387-7371. The better you understand your current value and what Buyers may be looking for, the more successful your sale. There is a finesse to dealing with a slowing market.
Here’s a snippet from the Real Estate Board’s Monthly Update:
“Due to seasonality, market activity is quieter in January. With mortgage rates having risen so rapidly over the last year, we anticipated sales this month would be among the lowest in recent history,” said Andrew Lis, REBGV’s director, economics and data analytics. “Looking forward, however, the Bank of Canada has said that it will pause further rate increases as long as the incoming economic data continues to support this policy stance. This should provide more certainty for home buyers and sellers in the market.”
Sales of Metro Vancouver detached homes in January 2023 reached 295, a 52.6 per cent decrease from the 622 detached sales recorded in January 2022. The benchmark price for a detached home is $1,801,300. This represents a 9.1 per cent decrease from January 2022 and a 1.2 per cent decrease compared to December 2022.
Sales of Metro Vancouver apartment homes reached 571 in January 2023, a 56.6 per cent decrease compared to the 1,315 sales in January 2022. The benchmark price of an apartment home is $720,700. This represents a 1.1 per cent decrease from January 2022 and a one per cent increase compared to December 2022.
Attached home sales in Metro Vancouver in January 2023 totalled 156, a 55.2 per cent decrease compared to the 348 sales in January 2022. The benchmark price of an attached home is $1,020,400. This represents a three per cent decrease from January 2022 and a 0.8 per cent increase compared to December 2022.
Onto the stats:
Vancouver West Real Estate Stats up to and including January 2023
HPI Price for Vancouver West
*Unfortunately HPI Price can’t be any more specific than Condo/Townhouse/House*
Average Sales Price for Vancouver West
Median Percentage of Original Price for Vancouver West
New Listings for Vancouver West
Total Inventory for Vancouver West
Total Sales for Vancouver West
Sales to Active Ratio for Vancouver West
Median Days on Market for Vancouver West
East Vancouver Real Estate Stats up to and including January 2023
HPI Price for East Vancouver
*Unfortunately HPI Price can’t be any more specific than Condo/Townhouse/House*
Average Sales Price
Median Percentage of Original Price for East Vancouver
New Listings for East Vancouver
Total Inventory for East Vancouver
Total Sales for East Vancouver
Sales to Active Ratio for East Vancouver
Median Days on Market for East Vancouver
What questions do you have? Send me an email or give me a call: kristi@realestatevancity.ca or 778-387-7371. I love thinking critically and answering questions, so I’m always happy to help.
If you haven’t yet spoken with a mortgage broker, get that process started. It’s helpful to know your options when it comes to owning two properties via a bridge loan, getting a 1 to 2 year mortgage amortization, porting your existing mortgage or understanding how any further changes to interest rates will affect you. Email me if you need a referral to a great mortgage broker.