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Equilibrium in real estate: Is it possible, or a rare thing indeed?


Blog by Robert Matthews | November 24th, 2014


Equilibrium in the real estate market is good, for both buyers and sellers. Equilibrium is simply “balance”: balance between demand and supply. Equilibrium lessens the potential for rapid or unexpected price swings, helping both buyers and sellers to better plan. Whether buying for the first time, or buying after selling a current home, a buyer can feel more at ease that they can buy for the amount they planned for, rather than entering into a runaway multiple offer situation. And sellers can rest assured that if their home is priced to the market at the moment, the home will not sit for an excessive amount of time.

But real estate equilibrium is a rare thing in our part of the world. As this is written in late November, sales activity for Metro Vancouver homes – and therefore relative sale prices – depends on the area in which the home is located, the type of property, and, of course the deal itself – primarily, the price relative to the perceived market value of that home. Some single family neighbourhoods in Metro Vancouver are currently experiencing multiple offer scenarios, with resulting sale prices setting new highs.

Yet some property types and homes in other neighbourhoods receive very little interest, with average sale prices drifting and in some cases dropping over the past couple of years. So many factors are at play from week to week and month to month, some of them quite fleeting and fickle. The simple summary? It comes down to supply and demand for that one property, at one moment in time.

That’s why, when people ask me about the “state of the market”, they need to be prepared for a bit of a discussion. A generalized answer just does not tell the whole story.

If you'd like to discuss specifics relevant to your siutation, or simply chat about possbilities, please do feel free to contact me at any time. I'm here to help.