Challenging Market Dynamics
The November Vancouver housing market experienced a continued decline in sales and prices, marking a seven-month downward trend. Sales plummeted by 52.9%, hitting the lowest point since 1967, with prices shedding over 10% since the peak in spring.
Economic Factors and Interest Rates
The real estate landscape faces challenges with the upcoming seventh interest rate hike on December 7. Despite the grim data, some experts believe the market might be nearing its bottom, urging potential buyers to seize opportunities presented by the current conditions.
Expert Opinions
Brian Yu, Chief Economist at Central 1 Credit Union, suggests that sales may have reached or are close to their bottom. Higher mortgage rates are pricing out some buyers, but lower preapproved rates and steady fixed rates, coupled with lower prices, could attract new buyers.
Local Market Dynamics
Kevin Skipworth, Managing Broker at Dexter Realty, highlights that certain markets, like Vancouver’s Westside, North Vancouver, and Richmond, are showing steady or increasing sales despite a shortage of listings. He characterizes the current situation as a “stuck market,” with buyers and sellers adopting a wait-and-see approach.
Condo Market Resilience
The condominium market, accounting for half of November sales, appears more resilient than expected. Ben Smith, President of Avesdo, notes that Metro Vancouver condos have proven to be a solid investment, with price gains of up to 150% for new units in the past three years.
Steady Decline in Prices
While residential home sales in November 2022 recorded a substantial decrease of 52.9% compared to the same period in 2021, the benchmark prices for different property types exhibit a slow decline. Detached houses see a 1.7% decrease, apartments show a 3.5% increase, and townhouses experience a 2.7% increase from a year ago.
Future Predictions
Andrew Lis, REBGV’s Director of Economics and Data Analytics, suggests that low supply and increased immigration could lead to renewed price escalation, indicating the market’s sensitivity to demand surges despite inflationary concerns and elevated mortgage rates.
Conclusion
While market data reflects challenges, the dynamic interplay of economic factors, interest rates, and local market dynamics creates a nuanced landscape for the Vancouver housing market. Buyers and sellers are advised to navigate the real estate market with strategic considerations, as waiting for significant price drops might prove elusive in the current environment.
Please contact Jared Gibbons, your local realtor, should you have any questions!