The media continues to report on the competitive nature of today’s real estate market and the “frenzied” atmosphere among buyers. And while this “seller’s market” seems to make the news continuously I think many previous purchasers are familiar with and have experienced this type of market. The fact is that since the year 2000 Metro Vancouver has typically been in a fast paced seller’s market versus a market that is flat or deceasing (“buyer’s market”). Buyers in general tend to purchase a property when the market is in an upswing which adds momentum to the seller’s market.
How is today’s competitive market unique?
What’s unique in today’s market place is the actual number of offers being presented on properties for sale. For example, in the past a desirable home or condo would have fetched 5 – 8 offers. In today’s market an attractive property will easily fetch 12 – 18 offers. This is due to the sheer number of eligible buyers in the marketplace. In today’s robust market an open house at a desirable property can attract upwards of 80 qualified buyers over a period of 2 open houses. And while in the past it was possible to arrange a private showing outside of the open house schedule, this is nearly impossible today. As a result of the large number of buyers competing to purchase, many buyers have attempted upwards of 5 offers before successfully security a home.
The other significant change in today’s market is the purchase offer itself. In order for an offer to be a serious contender against other offers it must be subject free with the standard 5% deposit available immediately upon acceptance. This is essentially called a subject-free offer. The high majority of offers in today’s market are in fact subject-free offers. Typical due diligence aspects of a purchase such as home inspections, financing approval, reviewing documentation, are being addressed prior to offer presentation. What is so unique about subject free offers in today’s market is the pricing component. It’s common to see a final sale price at 10% above a fair asking price, or a sale price of up to 20% above a low priced listing.
At the end of the day the successful buyer is often one who has attempted several offers recently and has offered a price which exceeds the most recently recorded sale price for a comparable property. This is resulting in the record breaking price increases recorded so far this year.
I believe that with the volume of active buyers in the market place today, we’ll see these market conditions continue throughout the summer.
If you have any questions about today’s market or would like a complimentary evaluation of your home please contact me.
Wishing you a wonderful summer,