Sale and Listing Activity Below Ten Year Average in Metro Vancouver
Everyone has an opinion on the Vancouver real estate market. “The bubble is going to burst!” “Vancouver real estate prices cannot continue this way forever!” and so on. Well, we have been witnessing a correction in the Metro Vancouver Market and here is what The Real Estate Board of Greater Vancouver (REBGV) had to say December 4, in their news release:
“Greater Vancouver residential property sale and listing activity below ten year averages in November… Over the past six months, the Greater Vancouver housing market has seen a reduction in the number of homes listed for sale, a gradual moderation in home prices and a decrease in property sales compared to historical averages.”
The question everyone wants to know is, how long will this last and where is the market going? Nothing happens in a vacuum. There area many reasons for the market to be responding the way it is…such as: the changes to the mortgage rules, seasonal slowdowns and the cyclical nature of the market topping out and slowing things down.
Home Sale Numbers are Down
The REBGV reported residential property sales across all sectors (detached, attached and apartment) totalled 1,686 in Metro Vancouver’s Multiple Listing Service® (MLS®) for November. (Interestingly of those 1,686 homes 273 of them (16%) sold at or above the $1 million dollar mark.) This represents a 28.6% decline compared to the 2,360 sales in same month a year before and a 12.7% down shift from the busier month of October with 1,931 home sales. When looking at the ten year average November is 30.3% below the average of 2,420.
While October provided a minor respite from the downward trend things have continued to slow but hardly could be ladled as a collapse. Eugen Klein, REBGV President said, “Home sellers appear more inclined to remove their properties from the market today rather than lower prices to sell their properties. On the other hand, buyers appear to be expecting prices to moderate.” As the supply in the market starts to dry up market forces will turn market pressures to shift back to a more balanced state.
Listing Numbers Trending Down
New listings across the board for residential properties in Metro Vancouver totalled 2,758. This was a 14.4% drop compared to the year before when 3,222 properties were listed for sale on the MLS® and a 36.2% decline compared to the 4,323 new listings in October 2012. When looking at the ten year numbers, new listings were 12.9% off the benchmark average of 3,168.
When looking at the total listing numbers, 15,689 residential properties were listed on the MLS®. This was an increase of 13% from the same time last year, and a decrease of 9.7% when evaluated relative to October, 2012. The REBGV noted, “Total listings in the region have declined by nearly 3,000 properties since reaching a peak of 18,493 in June.” So while there are more listings on the market than the year before the trend of inventory is declining into the winter months.
Breaking it Down
The REBVG broke down the numbers and shared that, of the 15,689 homes currently for sale on the MLS® in Metro Vancouver just under half (49.6%), are listed for $600,000 or less. Of that half only 1,321 are detached properties, 5,039 are condominiums/apartments and 1,419 are town homes/attached.
Home Prices See Modest Declines
So, you may ask, “What of the big price declines?” Well, Klein noted, “Home prices in Greater Vancouver have generally declined between three and five and a half per cent, depending on property type, since reaching a peak six months ago…Changes in home prices vary per municipality and neighbourhood. It’s good to check local market statistics with your REALTOR®.”
While June was the peak of inventory on the MLS®, May was the peak in prices. In May we were soaring with the MLS® Home Price Index composite benchmark price at a high point of $625,100, for all residential properties in Metro Vancouver but have since seen an imperial drop 4.5% to $596,900 in November. When compared to last year this only represents a 1.7% decline in prices. From a selling perspective the market has hit a soft spot but from a buying perspective things are looking better if you can find what you like in the shrinking market of the winter.
Sales of detached properties in November, 2012 for Metro Vancouver:
– 629 units – ↓ 31.3% compared to 916 sales in November, 2011.
The benchmark price ↓ 5.5% from the peak in May to $915,500.
Sales of apartment/condo properties in November, 2012 for Metro Vancouver:
-750 units – ↓ 25% compared to 1,000 sales in November, 2011.
The benchmark price ↓ 3.9% from the peak in May to $364,900.
Sales of attached property/town homes in November, 2012 for Metro Vancouver:
-307 units – ↓ 30.9% compared to 444 sales in November, 2011.
The benchmark price ↓ 3.6% from the peak in April to $454,300.
Source: Real Estate Board of Greater Vancouver News Release Dec. 4, 2012