The start of a new year always brings the question: Where will the market go this year? The Real Estate Board of Greater Vancouver (REBGV) reported the headline, “The Prices hold firm as home buyers and sellers conclude 2012 from the sidelines.”
I don’t think it is a surprise that in 2012 the Metro Vancouver housing market experienced below average home sales activity, compared to traditional markets of prior years, as well as modest declines in sales’ pricing.
Sales Volumes Were Down
The REBGV reported that total sales across all residential property types (detached, attached and apartment properties) in 2012 reached 25,032, a 22.7% drop from the 32,387 sales recorded in 2011, and an 18.2% decrease from the 30,595 residential sales in 2010. When looking at the ten year average last year’s home sale were 25.7% below the ten-year average for annual Multiple Listing Service® (MLS®) sales.
Listings on Average are Up but Not Compared to the Year Before
The number of residential properties listed for sale on the MLS® in Metro Vancouver declined 2% last year to 58,379 compared to 2011 when 59,539 properties were listed on the MLS®. 2012’s listing totals were 6.1% higher than the ten-year average for annual MLS® property listings in the region. This would stand to reason why prices in Metro Vancouver have softened. This sentiment is further supported by Eugen Klein, president of the REBGV. He stated, “For much of 2012 we saw a collective hesitation on the part of buyers and sellers in the Greater Vancouver housing market. This behaviour was reflected in lower than average home sale activity and modest fluctuations in home prices.”
December Sales Volumes and How They Stacked Up
Metro Vancouver’s total residential property sales equalled 1,142 in December, 2012; a sharp decrease of 31.1% from the 1,658 sales recorded the year before, and a 32.3% decline compared to the month before when 1,686 home sales occurred. So the market held to its strong seasonal decline in December and enjoyed the holiday season with number of sales 38.4% below the 10-year December sales average of 1,855.
Prices Compared to the Height of the Market and the Year Before
Statistics can be tricky to follow. So when looking at price adjustments consider that we are 5.8% below the highest peak of the market (reached in May 2012 with the MLS® Home Price composite benchmark of $625,100) in Metro Vancouver currently, and sitting at a bench mark price of $590,800. Year over year however, there is only a 2.3% per cent decline when compared to this time last year. Klein further commented with, “We saw home prices come down a bit during the latter half of the year. During the same period, we saw fewer home sales and listings.” It is understandable when prices are falling less people want to sell which in many cases helps create a bottom or levelling off to the market.
Sales of detached properties in December, 2012 for Metro Vancouver:
– 425 units – ↓32.5% compared to 630 sales in December, 2011.
The benchmark price ↓ 6.5% from the peak in May to $904,200.
Sales of apartment/condo properties in December, 2012 for Metro Vancouver:
-504 units – ↓ 34.9% compared to 774 sales in December, 2011.
The benchmark price ↓ 12.8% from the peak in May to $361,200
Sales of attached property/town homes in December, 2012 for Metro Vancouver:
-213 units – ↓ 16.1% compared to 319 sales in December, 2011.
The benchmark price ↓ 4.4% from the peak in April to $450,900
Anecdotally, the broader condo market has been flat for the past 2 years and is not likely to see lift off in 2013 so we will continue to see a relatively balanced market, depending on the area of interest. Houses in some neighbourhood pockets are still seeing ups and downs. Most of last year’s relisted inventory are holding on to prices when relisting but acknowledge a drop in price in the negotiation process and selling for less. Due to better affordability, areas such as the Eastside of Vancouver and the North Shore have remained relatively buoyant (compared to the Westside of Vancouver and area’s farther out).
This time of year may see a slight boost in sales activity from Chinese New Year as it is considered a “lucky” time of year so we may see a slight push (mostly in the detached market). “Activity continues to vary depending on area so it’s important to work with your REALTOR® and other professionals to understand the trends in your area of interest,” Klein said.
Source – Real Estate Board of Greater Vancouver; January 3, 2012, News Release.