Introduction:
The residential housing market in British Columbia (B.C.) experienced significant growth in May, defying expectations in the face of high mortgage rates. Despite rising interest rates, home sales in Metro Vancouver and across the province surged by 10% compared to May 2022. The average home prices have rebounded from the decline observed last year and have surpassed the $1 million mark for the first time since April 2022. This article highlights the unexpectedly strong performance of the B.C. housing market in May and provides insights into the key factors contributing to its growth.
Robust Residential Home Sales:
According to data released by the B.C. Real Estate Association, there were 9,191 residential home sales recorded on MLS in May, representing a 10% increase compared to May 2022. This surge in sales was deemed “surprisingly strong” by chief economist Brendon Ogmundson, as it defied expectations of a more negative impact from rising interest rates.
Recovery of Average Home Prices:
Average home prices have recovered from last year’s decline and have exceeded the $1 million mark for the first time since April 2022. The B.C. Real Estate Association reports that the housing demand is particularly strong in the Lower Mainland.
Resurgence in Metro Vancouver:
Residential home sales in Metro Vancouver rose nearly 16% compared to the previous year, reaching levels close to the 10-year seasonal average. Andrew Lis, the director of economics and data analytics at the Real Estate Board of Greater Vancouver, expressed surprise at the price increases, which have surpassed the forecasted modest growth of around 2% for 2023. Prices have already risen by approximately 6% or more across all home types in Metro Vancouver during the first half of the year.
Shrinking Inventory and Seller’s Market:
The market’s rebound is occurring alongside a decrease in inventory. May listings were 10.5% lower than the previous year, and approximately 20% below the 10-year seasonal average. The sales-to-active listings ratio, which indicates the proportion of available listings sold, remains high at 28.5% for detached homes and around 45% for townhomes and condos, indicating a seller’s market. The limited supply of resale homes continues to drive price increases.
Regional Variances:
The Fraser Valley Real Estate Board experienced a substantial surge in May sales, with a nearly 26% increase compared to May 2022. However, Victoria and Vancouver Island witnessed a slower recovery, with year-over-year sales growth of 2.5% and 2.3% respectively.
Conclusion:
The B.C. housing market demonstrated remarkable strength in May, with residential home sales surpassing expectations and average prices rebounding to new heights. Despite rising mortgage rates, the market remains firmly in favor of sellers, driven by high demand and shrinking inventory. The robust performance in Metro Vancouver and the Fraser Valley contributed significantly to the province’s overall sales growth.
Please contact Jared Gibbons, your local realtor, should you have any questions.