From the Office - February 2020

Average is the new up! Vancouver prices have gone up and will rise even more. What seemed like a very exuberant real estate market in Greater Vancouver in February produced an average volume of sales. With multiple offers a consistent theme, less so with detached homes, one would think it was a record month for total number of sales – especially with 42 offers on a house in Kitsilano. But funny, that supply and demand equation still rings true, when there isn’t enough supply to meet the demand, prices shift up and competition occurs.  British Columbia’s finance minister said that she is cautiously optimistic that real estate will become affordable for the average citizen over the next year, even though demand is expected to keep eclipsing supply. Think about that for a second. The number of buyers is increasing more than the number of sellers. What happens when there is scarcity of something? people compete for that item. Greater Vancouver’s real estate market is seeing the number of homes available dwindle to a level not seen in over two years in all property types and a spring market is emerging that has buyers wanting what there isn’t enough of – housing. And these are very much local buyers. This is most evident in the apartment and townhome segment of the market under $1,000,000. Since January 1st, in Downtown Vancouver there have been 89 MLS® sales reported – 43 of which sold at list price or above. There have been 18 townhouse sales on Vancouver’s Westside since January 1st and 9 of those sold at list or above. What happens when apartment buyers can’t find townhomes to buy? They don’t sell and there are less apartments in lower price ranges available. But what’s really telling in this market is that while the number of home sales are just below the 10-year average; prices are rising… incidents of 18 offers, 25 offers, 68 offers on listed properties are occurring. What part of that signal’s affordability? There were 2,185 homes sold of all types in Greater Vancouver in February this year compared with 1,602 homes sold last month, 1,512 sales in February last year and 2,241 homes sold in February 2018. Sales in February were 17 per cent below the 10-year average for the month of February but only 7 per cent below the 10-year average if the 4,254 sales from February 2016 were excluded – an all-time record amount of sales for that month. The number of sales in February were 45 per cent higher compared to February 2019, continuing the trend for the eighth straight month where year-over-year sales were up. Yes, home sales are up but they are still reaching for the average. Imagine what could happen to prices once buyers engage even more, and the number of homes for sale continues to decline. Some highlights from February: 
  • The number of sales in Richmond in January were only up 11% compared to January of last year with townhouses once again leading the way, up 103% year over year – the number of new listings in Richmond for all property types were down year over year
  • The number of detached homes currently listed in Vancouver continues to decline – with 517 Westside houses available at the end of February – which is lower than the end of January and 27% fewer than February 2019; on the East Side there are 36% less houses available compared to February 2019 with sales of detached houses up 59% year over year
  • Average prices for townhouses and condos in the majority of areas in Greater Vancouver increased significantly in February as buyers competed much more for these types of properties (Average prices are a calculation based on the total dollar volume of sales and the number of homes sold)
  • Detached homes showed higher year over year gains in the number of homes sold compared to townhouses and apartments in most areas as buyers continue to take advantage of the closer gap between the price of detached homes and attached properties
  • There have been 47 sales of homes under $3,000,000 on Vancouver’s Westside since January 1st and 16 of them have sold at list price or above 
  The number of homes for sale in Greater Vancouver saw limited growth in February, with a similar number of new listings for the month of February over the last three years. At the end of February there were 9,894 homes for sale in Greater Vancouver, compared to 9,307 at the end of January and 12,207 at the end of February 2019. This limited number of homes for sale is producing more multiple offers than we’ve seen in the last few years and is pushing prices up in some areas and product types. There were 4,101 new listings during February in Greater Vancouver, up 3 per cent from February last year. The number of new listings in February were 17 per cent below the 10-year average for the month of February. And with reports that there are significantly less new developments that will be coming out over the next few years, the supply of homes available to purchase will cause prices to rise. Again, what part of that signal’s affordability? “Home buyer demand again saw string year-over-year increases in February while the total inventory of homes for sale struggled to keep pace,” Ashely Smith, Real Estate Board of Greater Vancouver president said. “This was most pronounced in the condominium market.” East of the Fraser River, the Fraser Valley Real Estate Board processed 1,352 sales of all property types on its Multiple Listing Service® in February, a decrease of 39 per cent compared to sales in January and a 38 per cent increase compared to the sales in February of last year. Active listings for the Fraser Valley finished at 5,741, increasing 12 per cent month-over-month and a decrease of 10 per cent when compared to February 2019. There were 2,557 new listings in February, a 15 per cent increase compared to January 2020 and a 15 per cent increase compared to February 2019. “Supply is a challenge currently in some areas and for certain property types. In February, in Langley for example, for every 10 active townhomes, six sold. In Cloverdale, there were 26 active condo listings last month; and 20 sold. We are seeing more traffic at open houses, more multiple offers and a slight increase in year-over-year prices,” said Darin Germyn, President of the Fraser Valley Real Estate Board. “Another indicator and in February, the three main residential property types sold on average six days faster than last year.”