Looking at the October numbers, in their latest news release The Real Estate Board of Greater Vancouver (REBGV) stated, “Housing market sees slight changes in October.” People tend to see markets going one way or another but in this case we had a slight bump through October in the MetroVancouver area housing market. There was a small jump up in the number of homes sold, coupled with a slight decline in the number of listings, along with a softening of prices during the month of October (in comparison to the summer months). What does this mean? The sales-to-active-listings ratio rose to 11% compared to 8% in September. Typically the fall season is our second busiest time of year, and yes this still came true to a certain extent as we have experienced a slight, very slight, tick up in activity before the winter doldrums set in.
October Sales are up from September, 2012, but down from last October
The REBGV indicated there were, “1,931 residential property sales of detached, attached and apartment properties on the region’s Multiple Listing Service® (MLS®) in October.” Putting this information in context shows a 16.7% drop across residential home sales when compared to the 2,317 sales in October, 2011, and a significant 27.4% jump over the 1,516 home sales in September, 2012. These demonstrate the push and pull factors existing in the market as consumers try to time the market and find the right deal. When looking at the ten year average the October sales numbers were 28.5% below the average of 2,700. This still signals opportunity for Buyers.
Often times buyers like buying in a sellers’ market. This is because even if they win in a competing offer situation (i.e. where the buyers have to bid over the listing price), the buyers feel they have won something that others want, which gives them confidence in their purchase. However, the real saving and money to be made is in softer markets, like this one, because you have the ability to negotiate prices down with little competition to bid prices up. If you can find a home you want, you may find yourself getting it at a good value market price.
Sandra Wyant, REBGV president-elect said, “Buyer demand increased slightly in October compared to the previous few months…Overall conditions in today’s market remain in favour of buyers, with low interest rates, more choice, and less time pressure in terms of decision-making. This translates to a calmer atmosphere for those looking to buy a home and it places more onus on sellers to ensure their homes are priced to compete in today’s marketplace.”
When looking at the supply side, new listings for detached, attached and apartment properties in Metro Vancouver added up to 4,323 in October. This represents a 1.2% slide down from October of 2011, when 4,374 new properties were listed for sale on the MLS®. Furthermore, this is an 18.8% decline compared to the 5,321 new listings in September, 2012. When looking at the total number of listings on the market across Metro Vancouver, we get a grand total of 17,370 residential property listings on the MLS®. When compared to last year, this is an increase of 12% and a drop of 5.3% compared to September, 2012. Note! The supply is shrinking. This will effectively bring the market back to a balanced state over time.
The peak of the market for all residential properties in Metro Vancouver was in May with an MLS Home Price Index® (MLS HPI®) composite benchmark price of $625,100. Since that time the market has declined 3.4% into October with a benchmark price of $603,800. This represents a 0.8% decline compared to the same time last year. These numbers need to be evaluated with caution as the market is broad and very different from location to location and between property types. Wyant further stated, “There have been modest price changes since they peaked in the spring. The largest reductions have occurred in the areas and property types that experienced the biggest price increases over the last few years.” Volatility of large expensive million dollar homes will have an effect on these numbers more so than smaller single bedroom condos as they sell, or not, versus the rest of the market. This is well noticed in the contrast of prices since the highs reached in the spring, and the reduction of the benchmark price for detached homes on the Westside of Vancouver by 8.6%, while detached homes in Richmond and West Vancouver have seen similar declines of 6% respectively over the same time period.
Sales of detached properties in October, 2012 for Metro Vancouver:
– 790 units – ↓18.9% compared to 974 sales in October, 2011.
The benchmark price of detached properties ↓ 4.1% from the year before to $927,500.
Sales of apartment/condo properties in October, 2012 for Metro Vancouver:
-803 units – ↓ 16.2% compared to 958 sales in October, 2011.
The benchmark price of an apartment property ↓ 2.9% from the year before at $368,800.
Sales of attached property/town homes in October, 2012 for Metro Vancouver:
-338 units – ↓ 11.5% compared to 382 sales in October, 2011.
The benchmark price of an attached property ↓ 2.9% from the year before to $457,700.
Source: News Release, REBGV, November 2, 2012.