Chapter 1: Know What's Selling
Springtime; typically one of the busiest seasons for Real Estate. I’m incredibly curious to see what the April statistics have in store for us. We see so many posts, on so many mediums, casting a very dark light on the market. Everyone seems to be getting inundated with information without knowing exactly how to perceive what they are taking in. We hear the stories from clients who speak with their coworkers, and the public that attends our open houses, everyone has heard different and conflicting options. So what properties are actually selling successfully in a down market?
The answer is simple. The well priced, quality homes are still selling quickly and for fair market value. We are still seeing quite a few properties receiving multiple offers. In the last 2 weeks, we have been in 4 multiple offer situations, on properties ranging from Kitsilano condos, to a Burnaby townhouse, and even a 2 million dollar detached in Strathcona. For reasons detailed in this post, its the quantity that has greatly decreased; but quality properties are still moving.
Without a doubt, you can certainly feel the shift that has occurred over the last year. We see a great difference in our clients' mentality when they are buying and selling now versus 2 years ago. Buyers and Sellers alike have erred on the side of caution over the last year, and we see that continuing for the foreseeable future. Buyers are taking longer to weigh their options and watch the market. Sellers are reluctant to reduce listing prices with the market downturn, afraid to leave money on the table from the sale of their home.
We see that housing demand isn’t aligned with our growing economy and low unemployment rates. The market trends we’re seeing are largely policy induced. For three years, governments at all levels have imposed new taxes and borrowing requirements on to the housing market. But what policymakers are failing to recognize is that these demand-side measures don’t eliminate demand. That demand is ultimately satisfied down the line because shelter needs simply don’t go away. Using public policy to delay local demand in the housing market just feeds disruptive cycles that have been so well-documented in our region.
The number of homes for sale continues to climb as sellers try to offload their properties in what is traditionally a busy spring market, while buyers hold back. There were 4,949 homes newly listed for sale on the MLS in March 2019. This is an 11.2% increase from March 2018 and 27.2% higher than February 2019. This shows us that the market is picking up as we transition out of winter.
The overall sales-to-active listings ration for all property types is teetering between a balanced market and a buyer’s market, and currently standing at 13.5%. The improvement in sales in March brought this figure back into balanced market territory, which is generally between 12 and 20%.
However, the market varies greatly by property type, as the ratio is 9.4% for detached homes, which is firmly a buyer’s market. It’s a balanced market for townhomes/duplexes/rowhomes at 15.9%, and for condos at 17.2%.
The benchmark price for all residential properties in Metro Vancouver stands at $1,011,200, which is a 7.7% drop from March 2018, and a 0.5% slide in the month since February 2019.