Metro Vancouver’s real estate market got off to a slower than usual start, but has since heated up and has experienced a price increase for the 6th month in a row.
The total number of homes that sold in the region was 3,411 for May 2023. This is a 15.7% increase from May of last year and a 1.4% drop from the 10-year seasonal average.
“Back in January, few people would have predicted prices to be up as much as they are – ourselves included,” Andrew Lis, REBGV’s director of economics and data analytics said. “Our forecast projected prices to be up modestly in 2023 by about two per cent at year-end. Instead, Metro Vancouver home prices are already up about six per cent or more across all home types at the midway point of the year.”
During May 2023 there were a total of 5,661 home newly listed on the MLS system across all types (detached, attached and apartment) in Metro Vancouver. This is an 11.5% decrease from May 2022 and is 4.3% below the 10-year seasonal average.
Currently the total number of homes that are actively listed on the MLS system sits at 9,263. This is a 10.5% decrease from May 2022 and a 20.6% decrease from the 10-year seasonal average.
The sales-to-active ratio for May 2023 is 38.4% and breaks down by property type as follows:
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.
“You don’t have to squint to see the reason prices continue to increase. The fundamental issue remains that there are more buyers relative to the number of willing sellers in the market. This is keeping the amount of resale homes available in short supply,” Lis said. “And in a surprising twist, MLS® sales in May snapped back closer to historical averages than we’ve seen in the recent past, despite mortgage rates being where they are now, and new listing activity having been slower than usual this spring. If mortgage rates weren’t holding back market activity so much right now, I think our market would look a lot like the heydays of 2021/22, or even 2016/17.”
The benchmark price for all residential properties across Metro Vancouver is $1,1188,000. This is a 5.6% decrease from May of last year and a 1.3% increase from April 2023.
The total number of detached homes that were sold in May 2023 was 1,043. This is a 30.7% increase from May of last year. The benchmark price for a detached home in Metro Vancouver is $1,953,600; which represents a 6.7% decrease from May 2022 and a 1.8% increase from April 2023.
There were a total of 608 attached homes sold in May 2023. This is a 16.7% increase from May 2022. The benchmark price for an attached home reached $1,083,000. This is a 4.7% decrease from May 2022 and a 0.2% increase from April 2023
Sales of apartment units reached a total of 1,730 for May 2023, which is a 7.9% increase from May 2022. The benchmark price for an apartment is $760,800. This is a 2% decrease from May of last year and a 1.1% increase from April 2023.
As there has been for quite some time, there is a severe lack of homes that are available to purchase for those that are in the market. This is creating heavy competition for the homes that are available and causing upward pressure on prices. Even with the Bank of Canada again increasing their overnight rate again, it seems to not dampen the desire to own. We will see more of this as detached homes go up in price. This will cause people to be pushed out of the detached market and into the Townhome market which is already getting hot and eventually will push into the apartment sector of homes as those that were looking for a townhouse are now getting into the same ring with those that used to be looking for detached houses.
There are still some pockets of homes that are of some great value and if you are thinking to try to get into the market you should. While the prices keep gradually climbing, the equity they produce will generally out run any savings that you are trying to bank up.
This upward pressure will likely pour over into the rental markets as well due to there being both more competition for rental units as well as with the (what seems to be) ever increasing cost of borrowing, owners will transfer this to asking rents.
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