Metro Vancouver May 2012 Market Update

Vancouver Real Estate Market Starting to Turn?MarketUpdate

The Real Estate Board of Greater Vancouver (REBGV) released its monthly news report on the April numbers – trying to keep a positive outlook while indicating through their headline, “Greater Vancouver housing market maintains a steady spring pace,” and further noted, “…has helped create balanced conditions for the region’s housing market.” But their attempt to spin the market rings hollow when analyzing the market statistics.

While we do want to evaluate the market as a whole and the positive sentiments of the REBGV as they do deserve some merit, the numbers are starting to paint more of a turning market. The REBGV’s report illuminated that residential property sales in Metro Vancouver reached 2,799 on the Multiple Listing Service® (MLS®) in April, 2012, which is a 13.2% drop compared to the April before in 2011 at 3,225. Furthermore, month over month again we observe a dip in the number of sales, as there was a 2.6% decline from 2,874 sales in March of this year. In fact, the April sales numbers were the lowest total for April in the region since 2001 while being 16.9% under the 10-year sales average of 3,369 for April. While this is not great news for sellers this does indicate a strong opportunity for buyers to have the best selection of properties typically available at this time of year with more motivated sellers than the recent past and mortgage rates currently at record low levels for now.

Eugene Klein, REBGV President defended their headlines while indicating, “Although April sales were below what’s typical for the month, we continue to see, with a sales-to-active listing ratio of nearly 17 per cent, a balanced relationship between buyer demand and seller supply in our marketplace.”

The total number of homes listed for sale on the region’s MLS® increased 8.5% to 16,538 in April over March and jumped 16% from April, 2011. Again these numbers indicate a shift in the market that represents a positive trigger for buyers.

Klein also stated, “Recent activity has had a stabilizing effect on home prices at the regional level, although pricing can vary depending on area and property type… [To] best understand conditions within your area of interest, it’s important to do your homework and consult a local REALTOR®.” This is always good advice.

Overall the MLS® Home Pricing Index (HPI) benchmark price (which should only be used as a broad indicator) for all residential properties in Metro Vancouver is sitting at $683,800, which is up 3.7% compared to last April. Moreover, this is an increase of 2.8% over the last 3 months. We now seem to be in a more realistic real estate regime where we are no longer expecting or anticipating double digit price growth.

Anecdotally it is interesting to see the effect of foreign buyers slowing down in our market which can be observed in the detached and attached properties. Many off shore buyers were not as interested in condos and so we see that the domestic market has been continuing on year over year with very little change in the numbers while the previously heavily demanded detached properties have seen a significant shift in their demand.

Sales of detached properties in April, 2012 for Metro Vancouver:

– 1126 units – ↓19.7% compared to 1402 sales in April, 2011.

The benchmark price ↑ 6.3% from the year before to $1,064,800.

Sales of apartment/condo properties in April, 2012 for Metro Vancouver:

1,190 units – ↓ 0.9% compared to 1,201 sales in April, 2011.

The benchmark price of an apartment property ↑ 6.3% from the year before to $371,500.

 

Sales of attached property/town homes in April, 2012 for Metro Vancouver:

– 483 units – ↓ 22.3% compared to 622 sales in April, 2011.

The benchmark price of an attached property ↑ 1.7% from the year before to $487,300.

Source: REBGV New Release May 2, 2012
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