To start off with some good news, the Greater Vancouver market showed some life in the month of May. Market activity and statistics were better than we have seen since last summer. It is way too early to say that the market is turning around as it could just be a one off month, but there are some interesting indicators that show signs of light in this market.
The Real Estate Board of Greater Vancouver reports that residential home sales in the region totalled 2,638 in May 2019, a 6.9% decrease from last year May 2018, but a 44.2% increase from the last month April 2019.
Last month’s sales were still 22.9% below the 10-year May sales average and was the lowest total for the month since 2000.
What this shows us there is pent up demand out there for buyers and the reason we know this is because there have been 78 properties in the Downtown, Eastside, Westside, Richmond or Ladner areas that sold with multiple offers in the month of May. Since inventories have risen, the only properties that get these multiple offers are the ones that are priced very well and are considered great value by buyers.
We also have interest rates that are at 2-year lows, which will help to some degree and may have impacted the market last month. We have a federal election this fall, and both the Conservatives and Liberals are after the millennial vote. You have to think that one of them, or both of them, in their platform will be talking about the stress test to make it easier for millennials to get into the market and to entice them to vote for them.
A common theme we’ve been seeing is that the desirable properties are still selling and still selling fast, if priced well. By desirable property we mean, properties in good locations, good buildings, good layouts, nice views, etc. What’s not selling is a lot of the higher end luxury properties, anything priced over 4 million dollars, for condos anything over 2 million dollars is still on the slower side. Ultimately pricing is very important in this market right now.
Sales to Active Ratio
For all property types, the sales-to-active listings ratio for May 2019 is 18%. By property type, the ratio is 14.2% for detached homes, 20% for town homes, and 21.2% for apartments.
This is for all of Greater Vancouver, if you’d like to know your specific neighbourhood stats please email us and we can send those to you.
According to analysts generally when the sales-to-active listings ratio is around 12% or less for a period of time this creates downward pressure on housing prices. As a result you will see price drops in the Vancouver Real Estate market. When the sales-to-active listings ratio is upwards of 20% or higher for a period of time, this will create upward pressure on home prices. Between 12% to 20% is a balanced market.
For further information about the real estate market in Vancouver and current trends, contact Pravin Khara at 778-558-9957 or hit reply to this email.