Summer is predicting to be hot and it looks like the Metro Vancouver real estate market is going to follow along with that same expectation.
Does anyone remember when we used to talk about bubbles? Everyone wanted to know when it was going to burst; when it all would come crashing down. Now we hear talk about run away pricing and people stepping up to ask the politicians to restrict foreign ownership.
So what gives? What are prices going to do? For now, I think we will continue to see a climb in pricing as the basic supply of the market (total listings down 23% in Metro Vancouver compared to last year) is being under supplied to the large demand of confident buyers. Over the course of a year, what this has done is created upward pressure on pricing, seeing the price of houses, also known as detached homes, rise 14.1%, while attached dwellings, such as townhomes are up in market value 6.4%, and condos 4.6%.
This translates into people looking for other options. Anecdotally, working with buyers on the Eastside of Vancouver this spring, it was not uncommon to see anywhere from 11 to 20 offers on a single house. Given this predicament, realtors are observing a change, or shift, in some buyer’s strategies and expectations.
Contrary to the media hype, affordable housing options are out there. It may just take you an extra step of owning one home before you get to a more preferred or ideal option. Some buyers will look “farther out,” some will look more to attached housing, the likes of townhomes and half duplexes, and others will look to wait things out and hope the market changes, or that they can save more money…
For a video review of these details check out the Real Estate Board of Greater Vancouver’s (REBGV) Video that talk to these numbers by clicking here.
The “crystal ball” questions people continue to ask me are:
· When will the housing market change?
· How long can this real estate price escalation keep going?
Well, I think the next slowdown will have more to do with interest rates. If we see a shift up that will signal to buyers to “get in” while their rates are locked. In turn, this will pull future buyers off the fence and have a short term “boom” with a following “bust”. We know from experience that the market does not go in one direction forever. To see what rates are doing check out the latest forecast, which does not indicate an increase expected for the rest of 2015. Click here to read the British Columbia Real Estate Association’s (BCREA) forcast on mortgage rates.
As always, if you want to talk options, I am always happy to help, give me a call!