Happy Summer everyone! I’m always a happy camper when the sun is shining and the days are long. I hope you carve out some time in your schedule to enjoy summer this year.
Onto the market – the Real Estate Board indicates that June was the 7th consecutive month with an increase in prices. Last month also saw 21% more sales than June 2022. The good news is we’ve seen the activity levels in the market pull back a bit over the last month, which is thanks to a recent increase in interest rates (and speculation of another rate hike this week) as well as a normal summer slowdown (we typically see low inventory and low buyer motivation in July and August). In general the market is still busy, but I’m not seeing as many multiple offer situations right now so Buyers have the chance to buy in a less competitive market than it has been this year.
I expect another interest rate hike to cool any further price hikes. Historically, summer has always been a good time to find a “deal” compared to the rest of the year because most Buyers are busy enjoying their summer: weekend weddings, family vacations, camping out of cell service, etc. The best time to buy is when no one else wants too: you can do so without competition and with a little more negotiation power as a Buyer.
I have a lot of Buyers who still want to make a move and are actively looking, but low inventory has been a big issue. I don’t expect that we’ll see a big increase in inventory this Fall or even early next year, so I expect to see the market operate in a similar way to what we’ve seen this year. A lot of people may be wondering – why isn’t inventory higher given how expensive it must be to own? A few reasons:
(1) many people have a fixed rate mortgage which hasn’t changed with these increases,
(2) housing is the last thing you’re giving up in an expensive economy,
(3) rent prices are high, so you’re financially not much better off if you’re renting,
(4) buying and selling costs are high, so you would be spending a lot of money to move into a cheaper/smaller home,
(5) a lot of people who live in houses have no plans to move now or in the reasonable future (I’m thinking of my parents here) which means people who own townhouses can’t move up, which means people who own condos can’t move up, etc… so the climb to the next rung on the real estate ladder is halted, and inventory remains low.
I believe we’ll see an increase in inventory (and also an increase in the number of Buyers) when interest rates start dropping and those who bought in 2020-2021 with fixed rates need to renew. So I expect late 2024-2026 to be an active market with lots of real estate changing hands.
Here’s a snippet from the Real Estate Board’s Monthly Update:
Across all detached, attached and apartment property types, the sales-to-active listings ratio for June 2023 is 31.4 per cent. By property type, the ratio is 20.9 per cent for detached homes, 38.5 per cent for townhomes, and 39.4 per cent for apartments. Analysis of the historical data suggests 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.
The MLS® Home Price Index composite benchmark price for all residential properties in Metro Vancouver is currently $1,203,000. This represents a 2.4 per cent decrease over June 2022 and a 1.3 per cent increase compared to May 2023.
Sales of detached homes in June 2023 reached 848, a 28.3 per cent increase from the 661 detached sales recorded in June 2022. The benchmark price for a detached home is $1,991,300. This represents a 3.2 per cent decrease from June 2022 and a 1.9 per cent increase compared to May 2023.
Sales of apartment homes reached 1,573 in June 2023, an 18.6 per cent increase compared to the 1,326 sales in June 2022. The benchmark price of an apartment home is $767,000. This represents a 0.5 per cent increase from June 2022 and a 0.8 per cent increase compared to May 2023.
Sales of attached homes in June 2023 totalled 547, a 17.6 per cent increase compared to the 465 sales in June 2022. The benchmark price of an attached home is $1,098,900. This represents a one per cent decrease from June 2022 and a 1.5 per cent increase compared to May 2023.
Onto the stats:
Vancouver West Real Estate Stats up to and including June 2023
Check out the number of sales of 1 ands 2 bedroom apartments – a quick increase from the low in January. I wonder if this has anything to do with the lack of housing available for students at UBC. One Bedroom Condos on the Westside has a 48.5 sales to active ratio, which is very active.
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 June 2023
The detached market has really perked up the last month or so. It has been busy, but now it’s starting to feel a little more competitive. The reason for this is detached inventory is at the lowest it’s been in the last few years. There are quite a few new listings each week but they all get snapped up. All in all, buyer activity levels are high which is leading to the increase in competition, thus price.
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
The market always slows down in the summer and it feels like that’s already starting to happen. If you’re looking for real estate – keep looking! You won’t have as much inventory to choose from but lots of other buyers stop looking as well, so it’s typically a good time to find a bit of a deal with little competition. And If you’re looking for a deal, look to areas outside of Vancouver: they slow down first in a down market and pick up last in an increasing market, so you can still find some deals in areas like Squamish, White Rock, Coquitlam, etc. If you have questions on a particular kind of property or location, get in touch with me!
As for Sellers, 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 an ever-changing market.
Considering that the market is busier than expected, make sure your mortgage approval is up to date and that your mortgage broker can work quickly, if you need to submit a competitive offer. 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.