Happy New Year !!!!
I hope you are having a great start to the year. As mentioned last month we are officially in a balanced market in Downtown Vancouver ( in a balanced market the sales-to-active listings ratio is between 12% and 20% meaning 1.2 to 2 homes out of 10 are selling ). The current ratio is at 13% and is slowly moving towards a Buyer’s Market but we have a long way to go before that.
I’m sure you have all been getting mixed messages on what 2019 will look like for homeowners. The independent news reporters are saying to expect a softer market for 2019, yet, those who make money off of real estate (eg. national real estate brokerages, real estate boards, and money lenders etc) seem to be releasing reports suggesting markets will be stable or go up. My advice is to pay attention to who is writing the article and question their angle. As for my opinion, all indicators show that the market will continue to soften in 2019.
Internationally, the housing markets in the US and China are having the same troubles as we are. Here are 3 articles that you should read. Very interestingly, the article about Manhattan having the worst year since the financial crisis seems very similar to the Vancouver market.
Regarding the December 2018 SnapStats packages attached, and focusing on the Downtown Vancouver market, the trend of a slight downward slide continues.
As you can imagine, 80% of the sales were under $1,250,000, 20% of the sales were between $1,250,000 and $3,000,000 and there were no sales over $3 million.
The median price decreased 7.5% from November 2018 and is down 21% from the peak in January 2018 yet the average price per square foot is only down 1% at $1,034 per square foot.
There were 77 sales (4 per day) in Downtown Vancouver in November which was down 48% from December 2017. The units that are selling are selling 6% off the asking price in 34 days, up from last month’s 24 days on the market.
Active listings in Downtown Vancouver are down 27% (586 active listings) from the month before and up 110% from December 2017 (278 active listings). As always, the inventory levels off in December as most people cancel their listings or they expired at the end of December and we should expect to see a jump to approximately 800 listings by the end of January.
Despite the varied predictions and opinions for 2019, some things to remember are, that the mortgage rates will continue to increase, qualifying for mortgages will get tougher, our governments will continue to punish international investors with a 20% tax and the global outlook isn’t looking positive. On the positive, we have to remember is Vancouver is a world class city with a strong rental market and long term investing will always pay off. We just need to stop looking at real estate as a short term stock-like investment and think long term.
I hope you find this helpful, but should you have any questions please don’t hesitate to ask.
Wishing you all the best for a safe and prosperous 2019.