Of all the numbers you might see regarding real estate activity none are more telling than "days on market" and "sales to active" statistics.
"Days on market" indicates how many days a listed property is on the market before a firm contract is reached. During this listing time period the price may be reduced as necessary (or even occasionally increased!) and in most cases much effort would have expended to find a buyer. In 18 years and some 600 sales, my average days on market has been 14 days.
When a property is listed it's automatically sent out to often hundreds of potential buyers who've had alerts set up by their Realtors for similar properties. Additionally, many more potential buyers are actively searching for the latest listings that meet their criteria. By the end of the first week or ten days, the majority of all these potential buyers have become aware of the property, they've considered it, made decisions on it, possibly viewed it, and have most likely come to a conclusion that it is appropriate, or not. If everything aligns, they will make an offer. In a perfect seller scenario more than one buyer will offer on the property and a deal could be made under a seller-favourable multiple offer condition. This was a common occurrence when the Metro Van market was extremely active one, two, three years ago. And it still occurs occasionally. After the first ten days or so primarily just the few buyers new to the market will show interest. Likely hundreds of potential buyers have become aware of the property in the first week, but after that the number of potential buyers for whom the property is new will slow to a trickle.
The "sales to active" ratio shows the percentage of the average number of homes on the market in a given area which sell within one month. A sales to active ratio of 10% indicates 10% of the average number of active listings in that area sold in a particular month. Conversely, it also means 90% did not sell. At the height of the Metro Vancouver market activity some two years ago, we were seeing ratios of 150% for some sub-areas and property types. Essentially, this meant inventory would soon be exhausted as 15 homes would sell for every ten new ones listed. This was clearly not sustainable. These days we'll still see occasional pops in this ratio in some areas and property types, but generally the ratio is under 20%, and in some cases as low as 3.9%.
If a property is priced appropriately for today's market, and well marketed by a professional Realtor, it will likely sell within a couple of weeks or so. I've written in previous newsletters about the seller tendency to want a "yester-year" price for their home, while looking to buy their next property at today's relatively deflated prices. This strategy typically doesn't work. By pricing too high, time and market interest are working against the seller. And as true sale prices decline, the gap between a realistic sales price and the seller's original expectations widens. We currently see many properties on the market for months and months, often with no price reductions. Few people want to view a home that's been on the market for three months with no significant price reductions. These sellers aren't realistic. In a generally declining market like we're seeing today, get it sold fast, and lock in today's value. Then take your time, if possible, to buy your next home in the market of a couple months or more from now, and you might make some gain on the sell/buy scenario. At the very least your next property has likely declined as well, so the absolute dollar difference may be no different than two years ago.
Have a look at some of the numbers below comparing average days on market (a/d/m) and sales to active ratios for June 2018 vs. June 2019. Note that by June 2018 the market had started its turn downwards; these numbers would be more dramatic if I went back to June 2017. Keep in mind these are relatively broad breakdowns; the scenario for your particular situation could be dramatically different depending on type of property, location, price level, and a slew of other variables.
North Vancouver detached: Average days on market June 2018 = 26; June 2019 = 42, a 61% increase. Sales to active ratio June 2018 = 16%; June 2019 = 18.6%
North Van condos: a/d/m June 2018 = 17; June 2019 = 32; an 88% increase. Sales to active ratio June 2018 = 34%; June 2019 = 22%
West side detached under $4M, a/d/m June 2018 = 31; June 2019 = 41; a 32% increase. Sales to active June 2018 = 15.5%, June 2019 = 13.2%
West side detached over $4M, a/d/m June 2018 = 82; June 2019 = 72. Sales to active June 2018 = 3.5%, June 2019 = 3.9%. The high-end detached market was well into its downturn this time last year; this year's similar numbers show this market continues to be at a more or less standstill. An average of 359 west side homes over $4M were available for sale in June; 14 homes sold.
West side condos: a/d/m June 2018 = 20; June 2019 = 37; an 85% increase. Sales to active June 2018 = 26%, June 2019 = 15%.
Now more than ever you need the right Realtor on your side. And you need to deal with reality as it is, not how you wish it should be. All this being said, more than 2000 Metro Vancouver properties sold in June 2019. As indicated above, if you and your Realtor do all the right things, there's no reason for your home not to sell fairly quickly, at its appropriate and fair market value at this time. And you can move on the next stage of your life sooner rather than later.
I'm always at the ready to help! And on another note, summer looks to be finally here! I do hope you and your family can take some good time this summer to relax, recharge, and enjoy beautiful BC.