The market stats for September have now been released and the market is yet again on an up rise; which is contrary to the massive drop that CMHC was calling for in March. The number of homes sold this past month was up 19.6% from August of this year and a whopping 56.2% from September of 2019.
This past September for number of homes sold also happened to be the highest ever recorded for that month.
While pent up demand was partially driving the market, low interest rates have been a major factor. The low interest rate has created more potential buyers to enter the market and thus the competition becomes fiercer and results in prices experiencing upward pressure.
The market hasn’t been exhibiting signs of slowing either as more properties keep arriving on the market. This past month newly listed homes across Greater Vancouver were up 10.1% from August, showing that homeowners are becoming more aware of what is occurring in the market and thinking to place their home on it. The total listings for the month combined are a total of 13,096 which is a 2.3% increase from August.
All home types are now in the seller’s market and are coupled with price changes to detached homes rising 1.1%, apartments down 0.3% and townhouses up 0.4%.
With the market appearing to be flowing, one has to wonder where this market crash predicted by CMHC is coming from. It is of note that they had made this prediction and then suddenly tightened their own mortgage rules… Was this an effort to make that prediction a reality in an effort to slow an already intense real estate market? While it would be ill-advised to think that there will not be a market correction as we are definitely due for one in the Greater Vancouver area, it seems that calling for the biggest market drop ever is also a little over the top.
We have all heard of this real estate “bubble” I am sure and here is some slight personal perspective on it (while anecdotal of course). I am a 3rd generation realty advisor. My Grandmother was one, my mother still is one and here I am… One of the things that have stood steady through the generations is the “bubble”… If there is this massive bubble is must immense as it has been building for 3 generations; yes, there will be market corrections but this fire and brimstone prediction I just don’t see happening.
The bottom line in my personal opinion is this: try to view a home as a place to live and try not to view it as a stock investment. Real estate can (and usually does) make you money IN THE LONG RUN; this is not HGTV. If you purchase for what you need (or as a start to get you to what you need) and stick around, you will usually end up ahead… Here is a graph from the Real Estate Board of Greater Vancouver to aid in what I am saying about sticking around for at least the first term of an average mortgage (5 years):