Home listings increase while buyers remain in holding pattern
In metro Vancouver buyer activity continues to remain under historical averages. While this may be the case, home listings continue to increase. What does this mean for the Vancouver market? Is this a buyers market?
The Real Estate Board of Greater Vancouver (REBGV)
REBGV reports that residential home sales in the region totalled 1,103 in January 2019. That is a 39.3 per cent decrease from the 1,818 sales recorded in January 2018. And a 2.9 per cent increase from the 1,072 homes sold in December 2018. We can see that the market is slowly shifting, at least there is slightly more activity.
Last month’s sales were 36.3 per cent below the 10-year January sales average and were the lowest January-sales total since 2009.
“REALTORS® are seeing more traffic at open houses compared to recent months, however, buyers are choosing to remain in a holding pattern for the time being,” Phil Moore, REBGV president said.
Along with the decrease in sales over the past year, MLS is showing an increase in listings.
“There were 4,848 detached, attached and apartment homes newly listed for sale on the Multiple Listing Service® (MLS®) in Metro Vancouver in January 2019. This represents a 27.7 per cent increase compared to the 3,796 homes listed in January 2018. And a 244.6 per cent increase compared to the 1,407 homes listed in December 2018.
The total number of homes currently listed for sale on the MLS® system in Metro Vancouver is 10,808. That means a 55.6 per cent increase compared to January 2018 (6,947) and a 5.2 per cent increase compared to December 2018 (10,275).”
What does this influx of listings mean?
For all property types, the sales-to-active listings ratio for January 2019 is 10.2 per cent. By property type, the ratio is 6.8 per cent for detached homes, 11.9 per cent for townhomes, and 13.6 per cent for condominiums.
Generally, analysts say that downward pressure on home prices occurs when the ratio dips below the 12 per cent mark for a sustained period, while home prices often experience upward pressure when it surpasses 20 per cent over several months.
“Home prices have edged down across all home types in the region over the last seven months,” Moore said.
“Today’s market conditions are largely the result of the mortgage stress test that the federal government imposed at the beginning of last year,” Moore said. “This measure, coupled with an increase in mortgage rates, took away as much as 25 per cent of purchasing power from many home buyers trying to enter the market.”
Yes, stats are showing that home sales and condo sales have decreased significantly over the past year. However in these statistics we can see that the price of homes and condos have not dropped as drastically. And that homes listings have increased. Prices of attached homes have dropped about 8-9% over the past year, with condo & apartment prices dropping less than 2% since January 2018. This means that prices are slightly lower, however there is more inventory to choose from. This is a plus for people looking to enter into the market or add to their real estate investments.
A Buyers Market?
If home listings continue to flood the market while buyers are holding, we may see another decrease in home prices. This would be a great advantage for those looking to enter into the Vancouver real estate market at a lower price. The drop in prices may be the push that needed to get buyers out of this holding pattern. Stay tuned!
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For more information contact Top Vancouver Realtor Leo Wilk