November 2018 Statistics for Downtown Vancouver Condos
As the market changes, corrects and heads back to the first normalized market we have seen in over 5 years, we need to get one thing clear in all of our heads - this is not a bad market - this is the new normal.
We are officially in a balanced market in Downtown Vancouver. Just to be clear, 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) and a balanced market means that there is enough demand from buyers to equal the supply from sellers.
For the first time in a long time, buyers are having an equal say in the outcome of a negotiation. However, sellers are still believing they are richer than they think. Remember your condo is only worth what someone is willing to pay. What I am finding, is that sellers who are still trying to dictate the outcome are getting in the way of the sale and the deals aren’t coming together. Everyone has taken a hit in this market and we all need to readjust our thinking and our net worth.
Focusing on the Downtown Vancouver market, as you can imagine, 83% of the sales were under $1,250,000, 14% of the sales were between $1,250,000 and $2,750,000 and 3% were above $2,750,000.
In Downtown Vancouver, Studios and 1 bedrooms have seen a slight correction but they are always going to be the most stable as there are more buyers, more renters and less inventory in proportion to the number of sales. On the other end of the spectrum are the $5 million plus trophy properties, where this is just one property in the owners’ larger portfolio. I wouldn’t say this bracket is stable and not effected by the changes in the market, but there are just too few transaction to get a read on what’s actually happening. The worst hit is the middle of the market - the 2 bedrooms from $1.5 million to $5 million range and I predict this bracket will see the most significant decrease in prices as this is the price range most affected by the foreign buyers tax.
The median price increased 8% from October 2018 (still down 15% from the peak in January 2018) thanks to 4 sales that were reported in November https://bcres.paragonrels.com/publink/default.aspx?GUID=86531756-5d23-4b31-9f41-fe2938a82d11&Report=Yes and these sales helped pull up the price per square foot 6%.
There were 117 sales (5.5 per day) in Downtown Vancouver in November which was down 18% from the previous month and down 44% from November 2017 and the units that are being sold are selling 3% off the asking price in 24 days.
Inventory is levelling off. Active listings in Downtown Vancouver are up 4% (804 active listings) from the month before and up 103% from November 2017 (396 active listings).
As we all readjust to this new balanced market and as financing is getting harder to obtain, we need to accept that most offers will be with a subject sale. Days on the market will continue to increase and prices will soften if inventory increases. This is the new normal and until we see a change in the government’s foreign buyers tax this is how Vancouver real estate will remain - a local market with local money.
I hope you find this helpful, but should you have any questions please don’t hesitate to ask.