The earlier monthly increases in prices observed in the Metro Vancouver housing market subsided in September. This shift was attributed to a seasonal decrease in sales and a slight uptick in inventory levels throughout the region.
According to the Real Estate Board of Greater Vancouver (REBGV), residential home sales reached 1,926 in September 2023, marking a 13.2 percent rise from the 1,701 sales noted in September 2022. However, this figure was 26.3 percent lower than the 10-year seasonal average of 2,614.
“A key dynamic that we’ve been watching this year has been the reluctance of some homeowners to list their homes given that mortgage rates are the highest they’ve been in over ten years,” Andrew Lis, REBGV’s director of economics and data analytics said. “With fewer listings coming to the market earlier this year than usual, inventory levels remained very low, which led prices to increase throughout the spring and summer months."
In September 2023, there were 5,446 detached, attached, and apartment properties newly listed for sale on the Multiple Listing Service® (MLS®) in Metro Vancouver. This marks a 28.4 percent increase compared to the 4,243 homes listed in September 2022, exceeding the 10-year seasonal average by 5.2 percent (5,179).
The current total of homes listed for sale on the MLS® system in Metro Vancouver is 11,382, reflecting a 9.2 percent increase from September 2022 (10,427). Despite this rise, it remains 6.2 percent below the 10-year seasonal average of 12,136.
Considering all property types (detached, attached, and apartments), the sales-to-active listings ratio for September 2023 is 17.7%. Breaking it down by property type, the ratio are as follows:
Detached homes: 12.6%
Townhomes: 21.6%
Apartments: 21.3%
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.
Detached homes: 12.6%
Townhomes: 21.6%
Apartments: 21.3%
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.
“In contrast to the spring and summer, the September data suggests there may be a renewed interest on the part of sellers to participate in the market, with new listing activity rising back in line with long-term historical averages. This upward shift in new listings has allowed overall inventory levels to recover modestly from the low levels we saw earlier this year,” Lis said. “When we pair this dynamic with the slowdown in sales that typically occurs in the fall as a result of seasonal patterns, the outcome is more balanced market conditions overall.”
The current MLS® Home Price Index composite benchmark price for all residential properties in Metro Vancouver stands at $1,203,300. This signifies a 4.4% increase over September 2022 and a marginal 0.4% decrease compared to August 2023.
In September 2023, sales of detached homes reached 572, marking a 7.5% increase from the 532 detached sales recorded in September 2022. The benchmark price for a detached home is $2,017,100, reflecting a 5.8% increase from September 2022 and a slight 0.1% decrease compared to August 2023.
For apartment homes, sales in September 2023 totaled 988, which is a 11.3% increase compared to the 888 sales in September 2022. The benchmark price for an apartment home is $768,500, representing a 5.8% increase from September 2022 and a negligible 0.2% decrease compared to August 2023.
Attached home sales in September 2023 totaled 352, marking a substantial 28.5% increase compared to the 274 sales in September 2022. The benchmark price of an attached home is $1,098,400, representing a 5.3% increase from September 2022 and a 0.5% decrease compared to August 2023.
THE TAKE AWAY:
The continual rising of the mortgage rates has aided in cooling off the market as typically prices go down slower than they go up (think gas pricing). The current rates have made access to the money needed to match the pricing of previous months and thus slowing down sales. Even though the rates held at the last opportunity for the Bank of Canada (BoC) there is another opportunity to raise them on Oct 25th which will help govern the rest of 2023’s sales market.
While there is always people that are trying to claim about a “bubble” in Greater Vancouver, they are missing one of the main issues missing for said bubble. Many of the homes that are owned in Greater Vancouver have no mortgage on them. This results in those owners being unaffected by mortgages and doesn’t force them to sell. Not being forced to sell is what maintains that there is in fact no bubble. Upcoming corrections sure, that is the ebb and flow of real estate.
If you would like to have to some real world advice about how to navigate this shifting market feel free to reach out to me at 604-522-4777 or e-mail directly at: haze@hazerealty.com or join us at our Facebook Page (www.facebook.com/HazeRealty) and we see what the best move can be.
(Source: https://members.rebgv.org/news/REBGV-Stats-Pkg-Sept-2023.pdf)