Upward Pressure On Home Prices Remain As Low Inventory Continues For Vancouver

January home sales were down 4.4% from that of January in 2021 across Metro Vancouver. This is also at 15% decrease from the number of homes sold in December of 2021.
The Multiple Listing Service (MLS) reported that there were 4,170 newly listed homes in Metro Vancouver across all types (Detached, Attached and Apartment/Condo). This is a 6.9% decrease from that of January 2021 and a 114.4% increase from December 2021.
The total number of homes currently listed on the MLS system for Metro Vancouver sits at 5,663 which is an 8.2% increase from December 2021.

As we approach spring, we’ll keep a close eye on the impact of rising interest rates on buyers’ willingness to buy and on whether more home owners will opt to become sellers in what’s traditionally the busiest season of the year,” Keith Stewart – REBGV
The Sales-To-Active listings ratio currently sits at 40.3% for all property types combined and is broken down as follows:
Detached Homes: 28%
Townhomes: 51.6%
Condo/Apartment: 49.7%

Analysts generally state that downward pressure on home prices occurs when the sales-to-active ratio moves below 12% for a sustained period, while prices of homes will often have upward pressure when it surpasses 20% over a sustained period.

Currently the composite benchmark price for all properties combined in Metro Vancouver is $1,255,200. This is an 18.5% increase from January 2021 and a 2% increase from December 2021.
The sales of Detached home for January 2022 reached 622. This is a 15.9% decrease from January of last year. The benchmark price for Detached homes is $1,953,000. This is a 22.7% increase from January 2021 and a 2.2% increase from December 2021.
Attached home sales reached a total of 348; this is a 23.3% decrease from that of January 2021. The benchmark price for this type of home is $1,029,500 and represents a 24.3% increase from January 20211 and a 2.5% increase from December 2021.

Apartments reached a total of 1,315 sold in January 2022 which is a 10% increase from January 2021 and attained a benchmark price of $775,700. This is 14% increase from January 2021 and a 1.8% increase from December 2021.

The Takeaway:

Simply put we still need more inventory or the laws of supply and demand will keep on working as they have been and driving prices up. With the Bank Of Canada not increasing the interest rates was not of service to those that are trying to purchase in our current market state and as the adage goes from Albert Einstein goes “The definition of insanity is doing the same thing over and over and expecting different results”. Something needs to change. We either need a sudden rush of homes to hit the market or purchasing power needs to be reduced (which in turn will have to soften the prices of homes being sold).

I get asked at least weekly “should we buy? When will the market cool off?” 

Something that is always seemingly skipped over when the topic of real estate is discussed is that of STABILITY. While no one wants to lose money on their investment, people have to try to think about the purchase of their home as THEIR HOME, not just a stock to be traded. If you own your own space, you will not have to ever be concerned about the market increasing (like it currently is) and then a landlord deciding to cash out; resulting in you and your household having to suddenly scramble to find a home.
Over time, your home will appreciate in value and each payment you put on it has some the goes to the principle of the purchase. Take a look at the graph below of pricing… If someone purchased in 2014, the market dipped right after… But then returned to the same level in 2015 and never lowered since. So in a nutshell is that if you purchase and stay put chances are you will end up ahead in the long run monetarily and you will be more at ease knowing that the only way you will have to move is if you decide to; which only you can put a price tag on that.

If you would like a more targeted analysis for your particular area or needs, please feel free to contact me via phone at 604-522-4777 or e-mail directly at haze-hartwig@coldwellbanker.ca or join us at our Facebook Page (www.facebook.com/HazeRealty)