Thanks for checking out my latest real estate update for Ladner, Tsawwassen and the Real Estate Board of Greater Vancouver (REBGV).
Here is a link to the complete set of charts and graphs – it may be useful to refer to them as you read through this piece!
Here is a link to the Real Estate Board of Greater Vancouver media release.
April 2018 posted the lowest sales levels in 17 years and were 22.5% below the April 10 year average; clearly the various government policy actions are having an effect!
“Market conditions are changing. Home sales declined in our region last month to a 17-year April low and home sellers have become more active than we’ve seen in the past three years,” Phil Moore, REBGV president said. “The mortgage requirements that the federal government implemented this year have, among other factors, diminished home buyers’ purchasing power and they’re being felt on the buyer side today.”
Despite the slow market condo prices continue to rise and detached prices are remaining pretty much level.
For some rationalization for this the REBGV explains past experience with the ratio between sales and active listings:
“For all property types, the sales-to-active listings ratio for April 2018 is 26.3 per cent. By property type, the ratio is 14.1 per cent for detached homes, 36.1 per cent for townhomes, and 46.7 per cent for condominiums. Generally, analysts say that downward pressure on home prices occurs when the ratio dips below the 12 per cent mark for a sustained period, while home prices often experience upward pressure when it surpasses 20 per cent over several months.”
Average versus Typical Prices
My recent observation has been that the ‘typical house’ prices – the ones measured by the House Price Index – have not seen much movement but more expensive properties have decreased more significantly. Thus average (or more accurately ‘mean’) prices have decreased while typical (or more accurately ‘median’) prices are staying level.
Bottom Up versus Top Down
The hot market of 2015/2016 saw increased levels (believed to be around 5%) of foreign capital entering our market, driving up prices especially of detached homes and condo presales. 5% doesn’t seem like much but when one considers that each sale involving external funds may set off a chain of further transactions (maybe 3 – 6 or more!) there is a multiplier effect that is substantial.
During that time the price gap increased between condos (TH and apartment) and detached homes. Since then that gap has begun to narrow and we are finding the support for a price floor of ‘typical’ detached homes is being driven by the ‘move up’ market (Gen X and Millenials) rather than by the downsizing demographic (Baby Boomers).
Where this will go in the coming months will be interesting to watch but I must say that I am personally gratified to see some young families able to realize their dream of home ownership.
The current ‘level’ market provides a ‘low stress’ time to make a move.
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