From the Office - March 2020

Where to begin. This month’s numbers for Greater Vancouver real estate are a tale of what could have been, not so much what will be. The way sales on a given day are counted by the Real Estate Board of Greater Vancouver are by looking at the day when that sale is reported by a real estate company to the Board, regardless of when the date the contract is written. So, there is a time lag between when the contract is written and when it is reported. This will be important in looking at sales figures for March as a degree of that activity came from transactions that were initiated prior to mid-March.  There were 2,562 homes sold of all types in Greater Vancouver in March this year compared with 2,185 homes sold last month, 1,745 sales in March last year and 2,551 homes sold in March 2018. Sales in March were 19 per cent below the 10-year average for the month of March. The number of sales in March were 47 per cent higher compared to March 2019, continuing the trend for the ninth straight month where year-over-year sales were up. This trend is likely to stop in April as the effect of the COVID-19 Virus impacts the real estate market. Some highlights from March: 
  • North Vancouver was one of the few areas that saw a decline in the number of sales in March compared to February and the number of detached homes sold was below that of March 2019
  • Year over year, the increase in detached homes sold was the greatest at 61 per cent, townhouses followed at 51 per cent with apartments at 35 per cent
  • Year over year the decrease in the number of active listings for detached homes was the greatest at 28 per cent, followed by townhouses at 27 per cent and then apartments at 19 per cent
 Beyond the Pandemic:
The COVID-19 crisis will continue over the next number of months, a timeframe which is impossible to determine at this time. The numbers show that Greater Vancouver was in the stages of a market gaining momentum. While the market was still reaching for average, it was still vastly improved from last year which was a very challenged real estate market. Pent up demand was coming to the market, and from the provincial numbers identifying a very small number of foreign buyers, these were local buyers. While the real estate market takes a pause for the short term, there are many reasons to think it will be very active when we see some relief from virus, and in some cases why we may see activity over the next few months. 
  • Detached/townhouse will be more attractive and in greater demand after this as people want dwellings with social distancing – people will make personal and financial sacrifices for health
  • Those in sectors where the most job losses are occurring in higher numbers aren’t the typical buyers in the market
  • After isolation people will grow tired of their homes and want a change
  • Unfortunately, some marriages may not survive after this hence people will need to move
  • In 9 to 12 months there likely will be a mini-baby boom hence people will need to move
  • Having not spent disposable income as much, people are in saving modes and that will carry on beyond this and will add to what’s available for home purchasing (even with reduced incomes, many of the home buyers are still earning an income)
  • Interest rates will be low for the foreseeable future, lowest we’ve seen
  • With so many sectors in the economy suffering that are important to government revenue, and as they struggle to recover, the government will need investment and revenue from real estate
  • There will be a shortage of homes available coming out of this and continuing so prices will not be dropping to any great degree, and new construction will suffer which will perpetuate the shortage in the years to come
  • Stock markets will continue to be volatile, pushing money into real estate, especially at higher price points
  • Canada’s response to Covid-19 is showing it a favourable place to be – immigration and investment will likely flourish with the United States potentially being a source of those coming to Canada.
   The number of homes for sale in Greater Vancouver saw a slight increase in March. At the end of March there were 10,338 homes for sale in Greater Vancouver, compared to 9,894 at the end of February and 13,408 at the end of March 2019. While it may be surprising that we had that many new listings during the current pandemic, April will be more telling of the effects. But we saw 2,511 new listings up to March 15 and then 2,010 after that. The number of new listings per day did start to decline in the days leading up to the end of the month, but we are still seeing listings coming on (233 in Greater Vancouver in the last two days of the month.) Current market conditions are still producing some multiple offers – in all product types. While it may seem like a high number of new listings for current conditions, it is still well below what we would see for March in Greater Vancouver. There were 4,421 new listings during March in Greater Vancouver, down 11 per cent from March last year. The number of new listings in March were 22 per cent below the 10-year average for the month.  The first two weeks of the month were the busiest days of the year for our region with heightened demand and multiple offers becoming more common,” Ashley Smith, REBGV president said, “Like other aspects of our lives, this changed as concerns over the COVID-19 situation in our province grew. “Many of the sales recorded in March were in process before the provincial government declared a state of emergency. We’ll need more time to pass to fully understand the impact that the pandemic is having on the housing market,” Smith said. East of the Fraser River, the Fraser Valley Real Estate Board processed 1,441 sales of all property types on its Multiple Listing Service® in March, an increase of 7 per cent compared to sales in February and a 18 per cent increase compared to the sales in March of last year. According to the Fraser Valley Board, during the first 7 business days of the month, property sales were tracking 60 per cent higher compared to the same period in March of last year, however finished significantly lower.   Active listings for the Fraser Valley finished 6 per cent higher month-over-month and decreased of 13 per cent when compared to March 2019. There were 2,666 new listings in March, a 4 per cent increase compared to February 2020 and a 7 per cent decrease compared to March 2019. Above all else, right now is a time to focus on staying safe and healthy. There will be real estate activity while we are under these unprecedented times, some people’s financial wellbeing may depend upon it. Others just need a home to isolate in. What’s important is that we all act in a way to help bring back normalcy to our lives – as much as that can be. Be safe and be careful.