Buyers Hold the Power in This Market…Why?
Here’s the thing, we’ve got people wondering…is it a buyer’s market or seller’s market? Well, prices have come down slightly, let’s say that multiple offer situations on desirable homes is no longer the ‘norm’. Homes are not selling as fast, and I’ll be clear here that this is a general statement. The higher end products, think $2 million + are having a bit of a harder time leaving the shelf., but that’s not to say they’re not selling. Homes under the $1 million mark, as long as they are priced right and marketed well, are still seeing lots of movement. The market, as we see it now, looks relatively balanced. The current housing market comparative to what it was last year at this time and in 2017 definitely looks more like a buyer’s market.
What is a buyer’s market?
A buyer’s market is where goods, in this cases houses, are plentiful, giving buyers lots of options and no need to keep prices so high.
When there is limited inventory and a big demand for product, we call this a seller’s market. In this situation since the demand for product is so high and not much of it, prices can be raised and the demand for homes met at an increased price. This is in favour of the seller, and not the buyer.
What is happening NOW?
“Metro Vancouver’s home sellers took the opportunity of the New Year to list their properties, with new listings in the region up 244.6 per cent month over month, and nearly 28 per cent higher than the same month last year.” Vancouver Courier
Check out this graph here to see a comparative snap shot of the last few years.
REBGV president Phil Moore stated that there many be more activity at open houses, however buyers are choosing to be in a holding pattern. He added, “Economic fundamentals underpinning our market for home buyers and sellers remain strong. Today’s market conditions are largely the result of the mortgage stress test that the federal government imposed at the beginning of last year.”
When is it a buyer’s market?
When the sales-to-listings ratios is around 11% or less, this is seen as a buyer’s market.When that ratio climbs above 11% or so until about 15-25% we see this as a balanced market. When the ratio is over 20% this is a firm seller’s market. As ever, the level of market strength or weakness varies between each property type. The sales-to-listings ratio is currently 6.8 per cent for detached homes (very much a buyer’s market), 11.9 per cent for townhomes (recently turned into a buyer’s market), and 13.6 per cent for condominiums (still a balanced market, but weakening towards a buyer’s market).
The region’s composite benchmark price for all home types combined is currently $1,019,600. This is a 4.5 per cent slide since January 2018, and a drop of 1.2 per cent from December 2018.
So the stats are in, and there you have it, according to the sale-to-listings ratio we are in a buyer’s market. That being said, if you are not currently in the high end luxury market and are looking to sell your home, working with an experienced knowledgable realtor can ensure that you are priced right, giving you the upper hand in a market like this.
If you are a buyer and looking to purchase a home. Start looking and picking out your favourite place. Seller’s are in a position to negotiate now since things are moving a little bit slower. So if you find yourself in a place that is open to negotiation, you will definitely have more wiggle room that this time last year. Even though the stats put us in a buyers market, if a place is priced right, it will trigger some action. So buyers, make sure you are aware of what’s out there if you are interested in buyer and when you find something that fits your requirements at a good price, take action.
For further information about the real estate market in Vancouver and current trends, contact Top Vancouver Realtor Leo Wilk.