All eyes are on the March 8th rate announcement. The January announcement indicated that they were taking a wait and see approach with regards to any future increases, though I’m hearing from the financially inclined that some of the numbers are indicating that inflation is still too high and another rate hike is likely. Another rate hike might put a minor damper on the activity we’re seeing, but the consensus that rates are stabilizing is enough for many Buyers to jump back into the market. If my clients are any indication, there are a lot of Buyers out there who weren’t technically affected my the interest rate increases. Last year they were approved for, say, $1.2-million, but only wanted to spend $1-million. Well now with the rate increases, their approval is at $1-million…. it may be at the top of their budget but they can still get what they want, and likely for a bit of a discount off the price compared to last year. If they lock into a shorter amortization, they can renew their mortgage at a lower rate in the next few years.
February was seeing some of the same trends as January – the market seems busier than expected in many areas, particularly properties suitable for families, properties on the low end of value for their particular market and properties that are move in ready. Reno projects, buildings with major work coming up and overpriced properties are sitting on the market. As much as I tell my Buyers to submit low offers if something has been sitting on the market or is obviously over priced, a lot of Buyers don’t want to play those games – I don’t know what kind of psychology prevents buyers from wanting to negotiate or maybe they and their agents are too used to competing in multiple offers (and want to know that other people are interested in a property as well before jumping on it) but pricing your property too high and waiting for Buyers to negotiate is not a strategy that often works. Sellers are better to be priced low or reasonable, though pricing low in this market is also a bit risky. If you have questions on a particular kind of property and what’s happening in that market, get in touch with me!
I’m starting to get more calls from people who are interested in selling – if they can find something to buy. Therein lies the issue: inventory is low because inventory is low. The market is too active for “subject to sales” to be common place so for the most part they will need to decide if they want to buy first or sell first – both have their pros and cons. The market is not busy enough to guarantee that property will sell quickly and for a decent price, so they should anticipate a lower sale price when considering their calculations, just in case they need to guarantee themselves a sale, but they need a good price on their current property in order to afford the move. With inventory being somewhat low, there is some worry that if they sell first they won’t find something to buy, and will end up renting for longer than anticipated.
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:
The Real Estate Board of Greater Vancouver (REBGV) reports that residential home sales in the region totalled 1,808 in February 2023, a 47.2 per cent decrease from the 3,424 sales recorded in February 2022, and a 76.9 per cent increase from the 1,022 homes sold in January 2023.
“It’s hard to sell what you don’t have, and with new listing activity remaining among the lowest in recent history, sales are struggling to hit typical levels for this point in the year,” said Andrew Lis, REBGV’s director, economics and data analytics. “On the plus side for prospective buyers, the below-average sales activity is allowing inventory to accumulate, which is keeping market conditions from straying too deeply into sellers’ market territory, particularly in the more affordably priced segments.”
“While we continue to expect home price trends to show year-over-year declines for a few more months, current data and market activity suggest pricing is firming up. In fact, some leading indicators suggest we may see modest price increases this spring, particularly if sales activity increases and mortgage rates hold steady,” Lis said. “In the somewhat unusual market environment we find ourselves in right now with higher mortgage rates, fewer sales, and inventory that is inching higher but remains far from abundant, working with a Realtor who understands your local market conditions and has experience navigating challenging markets is paramount.”
For all property types, the sales-to-active listings ratio for February 2023 is 23 per cent. By property type, the ratio is 16.8 per cent for detached homes, 30.1 per cent for townhomes, and 25.8 per cent for apartments. Generally, analysts say downward pressure on home prices occurs when the ratio dips below 12 per cent for a sustained period, while home prices often experience upward pressure when it surpasses 20 per cent over several months.
Onto the stats:
Vancouver West Real Estate Stats up to and including February 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 February 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 3 year mortgage amortization, porting your existing mortgage or understanding how any further changes to interest rates will affect you. Times are changing quickly so you need a broker who takes the time to understand your goals and current financial outlook. Email me if you need a referral to a great mortgage broker.