September 2021 Vancouver Real Estate Update
Gooooood Afternoon everyone! We hope everyone is primed and ready to go for Thanksgiving this weekend! It seems like just last week it was Summer and we were in the midst of that crazy heat dome. Dare I say it, Christmas is coming around the corner. A regular battle Jay and I lose each year.
So where does that leave us in the world of Real Estate? Covid is still a thing, vaccines are out to the masses, the election is done. It’s safe to say things have changed in our market. One thing for sure, the extreme heat of the market is no longer there. Take a peak at the bad boy below:
September 2020: 6,402
This is a slightly misleading tabe. Down almost 20% over a year seems quite a lot. But current new listings to market are actually sitting around the 10-year average of what we usually see. Infact, they are only down 1.2% from the average.
This is the part where mainstream media comes in and does not deliver the full story. If you solely just look at the above, you’ll see inventory levels are down 29.5%. This is where headlines come in that causes market panic. See how this changes with the below:
Take a look at Detached Houses over the course of a year. Down 28%! That means demand has dropped almost as much as inventory has! In fact, the only increase in demand year-over-year has been in Apartment sales. Apartments were dead this time in 2020.
That’s not to say that is still the full picture of the market, because it’s not. You see why we always preach about getting the full story?!
STR * STR - Sales-to-active listings ratio
Now upward pressure on prices tends to take place when these numbers stay consistently above 20%. Which the market has done for a while now, hence the combined price increase year over year for Vancouver property sitting at +13.8%.
So if the supply and the demand is down (when discussing year over year), how are these ratios still so high and kicking around in the sellers market areas, yet prices only went up 0.8% vs August 2021? The answer is pockets. Yes, pockets.
Not the warm things you put your hands into when it’s cold. But pockets of real estate are going through different phases right now. The entire market is not bleeding for more inventory, certain areas of the market are - Development Lots for example. However, other areas are noticeably slower. These pockets show us that the market is not frantic, and just looking to jump on anything it can.
Demand still outweighs supply in the market, that’s for sure. However not so much that we are seeing everything go, and prices start to rocket upwards like before. We’re getting to the ceiling of this type of phase. Detached housing prices have gone up 20.4%, Apartments 8.4%, and Attached homes 17.5% over the course of 12 months. Common sense tells us there are less people out there than a year ago able to afford these prices. So the market will not just throw money at a property for sale because it’s there. This was echoed by a vancouver Real Estate Board Economist recently:
“The summer trend of above-average home sales and historically typical new listings activity continued in Metro Vancouver last month. Although this is keeping the overall supply of homes for sale low, we’re not seeing the same upward intensity on home prices today as we did in the spring,”
With the above being said, that means whatever product you are in the market of buying/selling, you need to do a deep dive into what that micro market looks like. Similarly to what you had to do this time last year (unless you were looking for a Detached Home). You may still be competing in a busy market, or you may find yourself trying to sell in an area of the market that has more inventory that you’re competing with.
One thing for certain, whether buying or selling, is the market will not overpay right now. Even with buyer demand being above supply, there are homes across the board that are just sitting due to price. Make sure you are getting those prices on point. It’s likely you may even be setting the new normal if a comparable sale has not taken place in the subject building lately. That’s just the effect of a changing market.
Thanks for joining us again this week! Don’t forget to Subscribe and check out our YouTube channel for tons more content here. You can also listen to the podcast version of the blog here!
Until next week,
Gooooood Afternoon everyone! We hope everyone is primed and ready to go for Thanksgiving this weekend! It seems like just last week it was Summer and we were in the midst of that crazy heat dome. Dare I say it, Christmas is coming around the corner. A regular battle Jay and I lose each year.
So where does that leave us in the world of Real Estate? Covid is still a thing, vaccines are out to the masses, the election is done. It’s safe to say things have changed in our market. One thing for sure, the extreme heat of the market is no longer there. Take a peak at the bad boy below:
Newly Listed Properties
September 2020: 6,402
September 2021: 5,171
% Difference: -19.2%
This is a slightly misleading tabe. Down almost 20% over a year seems quite a lot. But current new listings to market are actually sitting around the 10-year average of what we usually see. Infact, they are only down 1.2% from the average.
Total Listed Properties
September 2020: 13,096
September 2020: 13,096
September 2021: 9,236
% Difference: -29.5%
This is the part where mainstream media comes in and does not deliver the full story. If you solely just look at the above, you’ll see inventory levels are down 29.5%. This is where headlines come in that causes market panic. See how this changes with the below:
Detached Sales
September 2020: 1,317
September 2020: 1,317
September 2021: 950
% Difference: -27.9%
Apartment Sales
September 2020: 1,596 September 2021: 1,621
% Difference: +1.6%
Attached Sales
September 2020: 730
September 2021: 578
% Difference: -20.8%
Take a look at Detached Houses over the course of a year. Down 28%! That means demand has dropped almost as much as inventory has! In fact, the only increase in demand year-over-year has been in Apartment sales. Apartments were dead this time in 2020.
That’s not to say that is still the full picture of the market, because it’s not. You see why we always preach about getting the full story?!
STR * STR - Sales-to-active listings ratio
%Detached Homes: 25.5%
Apartment Homes: 36.7%
Attached Homes: 53.1%
Combined: 34.1%
Now upward pressure on prices tends to take place when these numbers stay consistently above 20%. Which the market has done for a while now, hence the combined price increase year over year for Vancouver property sitting at +13.8%.
So if the supply and the demand is down (when discussing year over year), how are these ratios still so high and kicking around in the sellers market areas, yet prices only went up 0.8% vs August 2021? The answer is pockets. Yes, pockets.
Not the warm things you put your hands into when it’s cold. But pockets of real estate are going through different phases right now. The entire market is not bleeding for more inventory, certain areas of the market are - Development Lots for example. However, other areas are noticeably slower. These pockets show us that the market is not frantic, and just looking to jump on anything it can.
Demand still outweighs supply in the market, that’s for sure. However not so much that we are seeing everything go, and prices start to rocket upwards like before. We’re getting to the ceiling of this type of phase. Detached housing prices have gone up 20.4%, Apartments 8.4%, and Attached homes 17.5% over the course of 12 months. Common sense tells us there are less people out there than a year ago able to afford these prices. So the market will not just throw money at a property for sale because it’s there. This was echoed by a vancouver Real Estate Board Economist recently:
“The summer trend of above-average home sales and historically typical new listings activity continued in Metro Vancouver last month. Although this is keeping the overall supply of homes for sale low, we’re not seeing the same upward intensity on home prices today as we did in the spring,”
With the above being said, that means whatever product you are in the market of buying/selling, you need to do a deep dive into what that micro market looks like. Similarly to what you had to do this time last year (unless you were looking for a Detached Home). You may still be competing in a busy market, or you may find yourself trying to sell in an area of the market that has more inventory that you’re competing with.
One thing for certain, whether buying or selling, is the market will not overpay right now. Even with buyer demand being above supply, there are homes across the board that are just sitting due to price. Make sure you are getting those prices on point. It’s likely you may even be setting the new normal if a comparable sale has not taken place in the subject building lately. That’s just the effect of a changing market.
Thanks for joining us again this week! Don’t forget to Subscribe and check out our YouTube channel for tons more content here. You can also listen to the podcast version of the blog here!
Until next week,
Jay Mcinnes - jay@mcinnesmarketing.com - T: 604.771.4606
Ben Robinson - ben@mcinnesmarketing.com - T: 604.353.8523