I hope you’ve enjoyed a pleasant year and have a warm and exciting winter season ahead.
It will come as no surprise that for about the past 16 months we’ve seen real estate prices decreasing from their peak of June 2018. The most dramatic reductions occurred quickly between June 2018 and February 2019. Depending on the type of property and community, these price reductions varied between approximately 20 percent for detached homes in West Vancouver and the west side of Vancouver, and between 5 –and 15 percent for townhouses and condominiums. However, it appears that this trend has turned a corner as we have seen price reductions of less than 3 percent in the past six months. Also, over the past three months prices have stabilized, and there have even been marginal price increases in some communities.
It appears that the price reductions of early 2019, coupled with low interest rates, have generated sufficient consumer confidence to result in a steady increase in sales volume since February 2019. October finished with a sales volume that is 10 percent above the 10-year average for the month. These results are quite different that what we observed at the beginning of the year.
We are ending the autumn season with a sales-to-active listings ratio of 17 percent for detached homes, 26 percent for townhomes and 29 percent for condominiums. This metric reflects the number of available listings that were sold by month’s end. Generally, analysts say that downward pressure on prices occurs when the ratio is less than 12 percent, and that upward pressure on prices is observed when the ratio reaches 20 percent.
What’s on the Horizon?
I believe that over the coming months we’ll see a continued increase in sales volume. Historically, this has resulted in price increases. However, I think that consumers will be wary of price competitions or multiple-offer situations. I expect we’ll see continued price stability and marginal price gains for attached and condo properties in some communities over the next six months.
If you would like to discuss your home or property, or have questions about the market in your area, please contact me.
Wishing you a safe and happy winter season.