Is It A Good Time To Sell Vancouver Real Estate

– Hey guys, Mark Parsons here with Remax. Just want to do a quick
overview on what’s going on in the Vancouver market here now. I’m going to cover a
lot so I’m going to try and keep it quick and concise but there’s a lot of questions. Not our prices up or down
because across the boards, it’s pretty much we know prices are down but where are they going
and what’s happening in these markets here now. I’m going to try and cover
all of Greater Vancouver or Lower Mainland or
whatever you want to call it because the truth is, there
is no one blanket statement for that market. In fact it’s broken down into
over 20 different sub markets that are all performing differently. So I’ll get right into it. The first slide that you’re
seeing here is looking at detached homes. The difference between May
2018 and May 2019 and prices. So everything that is circled
in red, prices are down. Now that’s no surprise, it’s
pretty much across the board except Port Moody, it
shows Moody detached homes up three percent year-over-year. Now I don’t make the stats,
I’m just reporting them and that’s where they
are, but keep in mind when we look at these numbers,
they are not all the same. For instance for detached homes, well you’ve got Port Moody up
three percent there so it says but there’s huge variances. For instance New West and Burnaby are down 18%
year-over-year for detached homes where Cloverdale and
Abbotsford, you’re down one or one and two percent. So those are very, very big differences that you want to be aware of
when you’re thinking of buying or selling your home. You want to know what’s happening
in your specific region. So if we move forward to attach, so this is where you see that
picture changed a little bit. So this is the same thing, annual variances from May 2018 to May 2019 for condos and townhomes
and again across the board, the majority of it is red,
representing that prices are down but again, you can’t paint
it all of the same brush. For instance, in West
Vancouver for attached units, condos and townhomes, prices
are down 28% year-over-year but if you go just across
the water there to Burnaby, although it is in the
red, prices are down, it’s only down three percent
so big, huge variances. And if we look there’s even
pockets for condos and townhomes where prices are actually up. You’ve got Mission, New West, Surrey. Mission’s up 10%, Abbotsford
is up four percent and then you have Langley and Ladner where prices haven’t really changed. So when I say that, they’ve
probably gone up and down but you know, they’ve
leveled out basically around the same thing. That’s why when I’m looking at prices, I never want to look month over month because prices are
always going up or down, one way or the other,
they’re always moving. So when I’m looking at prices, I always want to look at trends over time. So these two slides show
you really what’s happened over the last year. It’s no surprise that
the majority of markets, prices have gone down over the last year but how much varies hugely
from market to market. So you really want to be in tune with whatever market is relevant to you. Whether you’re buying or selling into it. So the next thing I want to look at is what are the precursors. If you’re only looking at
prices, you’ll never know when prices have hit their high until they’ve already
come down and gone away or you’ll never know when
prices have bottomed out until they’re already up
and you’ve seen them gone. So price isn’t a good way to
see where the market is going. What we look at to see
where the market is going, we look at what is called
the absorption rate. Now the absorption rate measures how quickly homes are
taken off of the market through successful sales. So for instance, a seller’s
market is anything above 20% or a better way to say
that would be five months or less of inventory of
20% of homes are selling in any given month. That means there would be
five months of inventory. So if the absorption rate
or sale ratio was 20% or above, you’re in a seller’s market. A balanced market is between 12% and 20% and that’s about five to
eight months of inventory. In the Lower Mainland though, when we’re in a balanced market, often because we’ve been spoiled with such a strong seller’s
market for so long, it feels like a buyers market and people are expecting prices
to drop more than expected because it feels like
a strong buyers market but in a balanced
market, if you’re sitting at about five to eight
months of inventory, that actually statistically,
I mean tested and proven in most markets across North America, when you have that inventory sitting in about five to eight month range, prices will be relatively stable and then below 12% absorption rate or anything eight or nine
months or above of inventory, this is when you’ll see prices start to, if the market stays with
that much inventory, over time prices will start to decline and again if you’re in a seller’s market, 20% or above or less than
five months of inventory, over time if it stays there,
prices will start to increase. So let’s get into the market here. So what we’re looking at now here, now this shows a much different picture than if you’re just looking over at prices over the last years. If you’re looking at prices, you’re just waiting to see what happens and a lot of people say, we’re
waiting to see what happens. Well if you’re just looking at prices, by the time it’s moved,
the boat has sailed. So what you want to do is not
waiting to see what happens but watching to see what happens. So what do you watch? You watch the absorption
rate or the sales ratio to see what type of market you’re in. So what we’re looking at
here and in this statistic, you want to look over month over month so you can see what’s
happening and where it’s going. What we’re looking at
here is detached homes month over month from
April 2019 to May 2019 and which markets are
in a balanced market, a seller’s market or a buyers market and you can see this tells
a completely different story than whether prices are up or down. Now if we would have looked
at this six months ago, we’ve got green representing
the buyers market, yellow representing a balanced market and red representing a seller’s market. So if we look at this
over the last six months, many of these markets here, it would have been covered
in green and yellow meaning pretty much buyers
markets or balance markets as we watched prices come to
decline over the last years, but as we sit right
now for the first time, we’re starting to see
seller’s markets pop up and in fact buyers markets
are not the majority, they’re actually the minority. So if we look what markets have over eight to nine months
of inventory or above, I know it’s strong buyers markets, we’ve got West Vancouver, Richmond, Tsawwassen, South Surrey. If we look at what would be
considered a balanced market which is anywhere between about five to eight months of inventory, we’ve got Coquitlam,
Burnaby, Westside Vancouver, Eastside Vancouver, New
West Surrey, North Delta, Pitt Meadows and Langley. Now a one month snapshot won’t tell you where prices are going but
if those markets stayed in a balanced market, chances
of any big price increases or big price drops are relatively small. When a market stays in that territory of five to eight months,
you’re in a balanced market, prices should stay relatively stable. Now, in the areas where
we’re in buyers markets, if it is prolonged, prices
should start to decline though. Then we look to seller’s market right now. Last month in North
Vancouver for detached homes, Port Moody, Port Coquitlam,
Cloverdale, Mission, Maple Ridge in Abbotsford
were all in seller’s market. Now does this mean that prices
are going to go up there? No, not necessarily, but when
you are in a seller’s market, chances of prices going
down are almost minimal and let’s say if you
had three or four months where it stayed in the
seller’s market territory, then yes, you could
expect prices to go up. So this is just very interesting
what we saw last month. So something, if you are
waiting to see what happens, you want to make sure you’re
watching to see what happens and this is what you should be watching. To see when to act and
when to make your moves and it really depends on the
the market area that you’re in. So that’s the detached market. So you can see it’s pretty
balanced for the most part. If more than anything, it’s balanced and then definitely
second is seller’s market and the actual smallest
area is the buyers market just in a few of those sub markets. So now if we go into condos and townhomes. So this was last month again for attached from April 2019 to May 2019. This is for condos and
townhomes, so not detached homes and you can see across the
board it’s a sea of red. The majority of markets
were in sellers markets. Now does this mean that
prices are going to shoot up? No, but any place in the red
chances of prices going down are very, very small unless
that changes month over month. So we’ve got the only buyers market, official buyers market with eight to nine or more months of inventory for condos and townhomes
was in West Vancouver. For balance markets we
had downtown Vancouver, Richmond, Tsawwassen and Mission and for seller’s market
it was everything else and that just means that there
was less than five months of inventory but some of these, I mean in Pitt Meadows at 53%, those are numbers that
represent when we were in an extremely hot market. Port Coquitlam was at 43%. These are numbers that we were
seeing a year and a half ago. Now again, this is just one month, but if you’re watching
to see what happens, this is what should be
getting your attention and then watching it as it goes forward because if you get three
months of you know, 40 plus percent on an absorption rate, it’s almost impossible for
prices to stay the same. They would more than likely go up, but at the very least
anything you see in the red, don’t be expecting
prices to be going down. Right now there’s still a lot
of breathing room for buyers but this, everything I’m
showing you right now is the signals that there
has been a bit of a shift. Now, could it go back to where
it was next month, of course and that’s what we watch for but if it continues in this direction for two or three months for the people who have been waiting to see what happens, all of a sudden you’ll be
watching to see what happens, but this is why you’re maybe not seeing the massive price drops that you were expecting to see because a lot of the time we feel like we’re in a buyers market when in fact we’re lolling
through imbalanced markets. So prices have come
down and then they start to flatten out and balance. So anyway if anybody
wants any of these sheets that I have on the screen
here, feel free to message me and I can get you these specifically or if you would like to stat
specifically on your market, let me know but at the end of the day, the market is shifting and moving. There’s opportunity out there right now, but to got to understand the market where are the buyer’s
market, the seller’s market and can you act before all
of the others are rushing on those doors. So that’s it for today guys. If you have any questions
about the market, the buying or selling process
or any particular properties, don’t hesitate to reach out
if I can help in any way, that’s what I’m here for. Bye for now.

Stephen Childs

Leave a Reply

Your email address will not be published. Required fields are marked *