Activity in October increased significantly, and active listings are down. Sales numbers actually put the market into a seller’s market, where technically we should see an increase in prices. What is causing this sudden change and what will happen in the future?
The Real Estate Board of Greater Vancouver (REBGV) reports that residential home sales in the region totalled 2,858 in October 2019, a 45.4% increase from the 1,966 sales recorded in October 2018, and a 22.5% increase from the 2,333 homes sold in September 2019.
Last month’s sales were 9.8% above the 10-year October sales average.
“Homebuyers have more confidence today than we saw in the first half of the year. With prices edging down over the last year and interest rates remaining low, hopeful home buyers are becoming more active this fall.” – Ashley Smith, REBGV president
What we’re seeing is the cause of pent-up demand. Buyers for the past year or so were hesitant to get into the market. Buyers and sellers are finally agreeing on price and transactions are starting to happen.
There were 4,074 detached, attached and apartment homes newly listed for sale on the Multiple Listing Service® (MLS®) in Metro Vancouver in October 2019. This represents a 16.4% decrease compared to the 4,873 homes listed in October 2018 and a 16.3% decrease compared to September 2019 when 4,866 homes were listed.
The total number of homes currently listed for sale on the MLS® system in Metro Vancouver is 12,236, a 5.8% decrease compared to October 2018 (12,984) and a 9% decrease compared to September 2019 (13,439).
Sales-to-active listings ratio
For all property types, the sales-to-active listings ratio for October 2019 is 23.4%. By property type, the ratio is 17.3% for detached homes, 26.2% for townhomes, and 29% for apartments.
Generally, analysts say downward pressure on home prices occurs when the ratio dips below 12% for a sustained period, while home prices often experience upward pressure when it surpasses 20% over several months.
“The recent uptick in home sales is moving us into a more historically typical market,” Smith said. “Both sale and listing activity is trending around our long-term averages in recent months.”
The MLS® Home Price Index composite benchmark price for all residential properties in Metro Vancouver is currently $992,900. This represents a 6.4% decrease from October 2018, a 1.7% decrease over the past six months, and a 0.2% increase compared to September 2019.
Sales of detached homes in October 2019 reached 938, a 47.3% increase from the 637 detached sales recorded in October 2018. The benchmark price for a detached home is $1,410,500. This represents a 7.5% decrease from October 2018, a 1.3% decrease over the past six months, and a 0.3% increase compared to September 2019.
Sales of apartment homes reached 1,384 in October 2019, a 40.5% increase compared to the 985 sales in October 2018. The benchmark price of an apartment home is $652,500. This represents a 5.9% decrease from October 2018, a 2.2% decrease over the past six months, and a 0.2% increase compared to September 2019.
Attached home sales in October 2019 totalled 536, a 55.8% increase compared to the 344 sales in October 2018. The benchmark price of an attached home is $771,600. This represents a 5.8% decrease from October 2018, a 0.4% decrease over the past six months, and a 0.5% increase compared to September 2019.
