The number 1 question I get once I inform people that I am a realtor is “how is the market”?
Well, my answer is usually long-winded and accompanied by speculation from other parties, which I always welcome. Here, I will try to use statistics collected from the Real Estate Board of Greater Vancouver, information gathered from some of the top mortgage agents in the city, and Re/Max Crest Realty data to break down where we are headed in this crazy housing market.
This year, we have certainly seen the market slow down. We are in a period of correction, where the times of multiple bidding wars, subject free offers, and property values increasing by 40-50 percent are seemingly behind us. Buyers are able to take a moment to breathe, to solidify their financing terms, and also ensure that the property is to their standard. When it comes to the largest investment most families will ultimately make, it should be staring down the barrel of a shot gun competing against 5 other families. It seems that the times of more educated, concise buying are upon us… for now.
What are housing prices doing?
Well it depends on the property type, each are experiencing different levels of change. Greater Vancouver continues to see strong activity in the townhome and condominium market. RE/MAX predicts that it will decrease by 3%, given the high supply and low absorption rates heading into the new year. However, we did see a 4% and 5% increase in the number of condos and townhomes sold in October comparative to last year. So it's up for now, but trending down. One thing we know for sure that 1 bedroom condos win the popularity contest. Given that the condo market attracts first time buyers and investors, it's no surprise that prices hold true.
But the greater question is, who will be most affected?
- Luxury homes
- Land value
- Busy streets or prominent negative features
- Condo’s under $1M
- Suburb condos under $700k
- Townhouses in Vancouver under $1.2M
- Suburb townhouses under $900K
- Houses under $1.6M
- In terms of cities, less expensive suburbs to Vancouver seem to be holding up well
- Pre-sales for new condo developments remain hot. We’re still seeing pricing at its peak and quick sell outs in this sector
- In particular, we’re referring to the more affordable price points in desirable locations with easy access to public transit
So.. what’s next?
New mortgage stress test and higher interest rates! Basically purchasing power has decreased as lending is getting tighter. This coupled with a 1% increase in interest rates will slow things down in the new year.