"Reluctance amongst Metro Vancouver home sellers is impacting sale, or price activity across the region. Let's take a closer look by reviewing our three key housing market indicators (Sales, Listings, and Prices).
The first is home sales. We just registered over 2,400 sales on our MLS in February. This is down over 40% of the record-breaking sales of one year ago. This is about 7% below the 10-year average for the month.
The second indicator is home listings to supply housing market demand. The number of homes for sale in our region was about 7,600 homes last month. That's up by about 5% from January and is 4% higher than this time last year. New listings, however, are at a historic low for the month. Only 3,600 homes were newly listed for sale in Februrary. This is the lowest February total in 14 years.
The third key indicator is home prices. The benchmark price for all residential homes in Metro Vancouver is $906,700. This is up 1% over last month, but remains 14% higher than this time last year. As you can see, the modest price increase we saw from January to February is the first price gain we've seen in the last six months.
Home Prices (left): The modest increase from January to February (yellow dots on far right) is the first price gain we've seen in the last six months.
To understand why this happened, we exame the relationship between supply and demand in our market using the sales-to-active listing ratio. That ratio today is 31%. This is up 10 points from last month (21%).
Downward pressure on home prices can occur when the ratio dips below the 12% mark for sustained period.
Home prices can experience upward pressure when it surpasses 20% over several months.
This brings us to our REALTOR® View segment. This month we're looking at Market Cycles of Supply and Demand. Basic economics tells us that prices are set by supply and demand. The concept is simple - if the supply of a product struggles to keep up with consumer demand, the value of that product will go up.
This is what we've seen in the Metro Vancouver housing market over the past year. During the first half of 2016, record sales and dwindling supply caused record price growth. Demand gradually began to recede as the year went on.
Let's put on some downward pressure on prices leading to the traditional slow months of December and January. While sales in the first two months of 2017 remained below the record-breaking activity from one year ago, home seller supply is still struggling to keep up with today’s demand. This is why we’ve seen so little to no downward pressure on home prices this year, particularly in the condominium and townhome markets.
It’s important to remember that supply-and-demand can vary significantly depending on neighborhood and property-type. To navigate these markets, it’s important to work with your local realtor.
For further housing market information go to the news and stats section of this website (www.rebgv.org). From the Real Estate Board of Greater Vancouver, I'm Dan Morrison."
For all your residential, commercial and real estate services, feel free to contact:
Karson Wong 黃家駿 | RE/MAX City Realty Personal Real Estate Corporation
Phone: (604) 307-8183