Typically we see a pattern of relatively quiet market activity heading into a provincial or federal election, with a burst of activity post-election once the distraction dies down. This year, however, things are different. It's definitely not "business as usual", either on the real estate front or the political front. On the political side, we're faced with continuing uncertainty. And once election results are confirmed, we may have a relatively fragile and compromised government. As soon as a contentious issue becomes the centre of attention, say the LNG issue, we'll likely see a showdown. Which may lead to another distracting election cycle with uncertain outcomes and consequences for the real estate market.
On the real estate front, the election distraction seemed to have had little affect on market momentum (or lack thereof). In general, the condo market has been surging since earlier this year; the detached homes market, not so much. In fact, Metro Vancouver is seeing a strong disconnect between the condo/townhome market and the detached home market. The market movement of relatively affordable condos and townhouses is quite the opposite of single family houses in most areas.
The "sales ratio" is often used to indicate market activity. The ratio indicates the number of sales as a percentage of the number of listings at a specific point in time. A sales ratio of 16% - 20% is considered a balanced market. A ratio above 20% is considered a sellers' market. At this time. it is not uncommon to see sales ratios of 60, 70, 80% in many condo sub-areas throughout Metro Vancouver. This indicates a quickly declining inventory; new supply not keeping up with demand; and quickly rising prices. Conversely, in some sub-areas and price ranges you’ll see detached home ratios at less than 20%, indicating low demand and price declines.
The disparity described above could be called a de-coupling of the condo and house markets. Each market is now operating in its own world. This makes sense, as a home or investment at a lower price point is bound to have a much larger pool of ready buyers – both locals and from around the world – than a home or investment that appeals to a relatively tiny percentage of buyers with different motivations and potentially world-wide options.
Following are a few examples of recent activity. This is simply a snapshot to show just how wildly different things are when you dig into the details of “the market”. And it's important to note that even within these sub-markets the supply-demand for individual properties may vary substantially based on property features, location, price point, and other factors.
West Side Vancouver detached: The number of home sales this year so far are less than half vs. the same period last year – 336 vs. 806. Not surprisingly, most activity is at the relatively low end of the market. The overall sales ratio is 20%; however, this can be quite misleading. The sales ratio in the $2.25m - $2.5m bracket is 108%; a dramatic difference from the 17% sales ratio for $3.5m - $4.5m homes. Once again, these numbers are made up of the full West Side market; the individual sub-areas, house age, quality, lot size, neighbour attributes, etc. can make the reality for a specific property a completely different story.
West Side attached: We're seeing sales ratios of close to 170% in the $300k - $400k range and nothing less than a 100% sales ratio up to $800k. Even properties up to $1.75m are seeing a strong seller's market, with sales ratios of 50% - 80%. This is a hopping market! There are definitely not enough properties for the available buyers for West Side condos and townhouses, particularly if you keep in mind that some are not worth buying and won't sell for one reason or another. Once again, while overall sales ratio numbers give a broad indication of activity within given price ranges, the individual sub-areas, building age, quality and perception, etc. can be a whole other story.
North Vancouver detached: The number of sales so far this year are approx. 58% of the same period last year. Sales ratios in price categories between $1.25m - $2.75m range from 50% to 35% – a strong sellers' market. The average sale price in January 2017 was virtually the same as January 2016; now, prices are almost 20% higher than either January. As always, the actual sales price is dependent on the specific factors such as sub-area, property condition, etc. as described above.
North Vancouver attached: Sales ratios in price categories up to $1m range from 72% to 158%! The latter ratio represents the $600k -$700k price range; relatively affordable for a fairly wide cross-section of buyers. The individual home value story will vary, keeping in mind the drilled-down factors for any particular home, as described above.
West Vancouver detached: Total sales so far this year are just 1/3 of the number sold during same period in 2016, with just 156 sales as of the end of April. The sales ratios for various price ranges are all over the place; from 3% to 30%. Realistically, with so few sales the sales ratios are meaningless. It all comes down to the individual merits of a home and the buyers for that specific home, and of course how and with whom the home is marketed!
I can analyze the numbers for any area in Metro Vancouver. If you'd like to see more, just send me a note. However, if you really want to drill down to the reality today for a particular property, whether selling or buying, we’ll need to do some more work on the specifics of the property in question. Contact me to discuss.