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Collective Communiqué - Vancouver Real Estate Housing Update, August 2022


Collective Communiqué - Vancouver Real Estate Housing Update, August 2022

“With inflationary pressure and interest rates on the rise, home buyer and seller activity shifted below our long-term seasonal averages this summer. This shift in market conditions caused prices to edge down over the past four months.” Says Andrew Lis, REBGV Director, economics and data analytics.
So, if prices are falling, does that also mean that the sky is falling on all Real Estate in Vancouver and the Lower Mainland?
Stay tuned while I unpack the latest sales numbers and try to answer that very question in our Collective Communique.

If you have been watching the news today and they were talking about the latest stats from the Real Estate Board of Vancouver, then you *might have heard that home sales dropped 40 percent year over year. And while that sounds pretty bad, is there no hope for prospective buyers and sellers in this market? Let’s unpack some of the numbers, and you decide.

I want to start by talking about the number of sales. In Aug 2022 there were a total of 1,884 sales. Now, there have been two other times that we have seen sales under the 2000 mark in the previous ten years. Aug 2012, which was the lowest number of sales at 1645 and August 2018 at 1940 sales. Interestingly enough, those two years had much higher inventory than we currently do. In August 2012 there were just under double the number of properties on the market that we have now in August, and in August 2018 there was 34% more inventory than today. So despite the numbers being low, you still have a better chance to sell your property now than in the last two moderating markets.

Let’s talk about townhomes and condos in the Real Estate Board of Greater Vancouver.
Sales of condos hit 998 in August 2022, a 38.8 percent decrease compared to August 2021. The benchmark price of a condo is $740,100, which is an 8.7 percent increase from August 2021. Not too bad.

Attached or townhome sales in August 2022 topped out at 355, a 38.4 percent decrease compared to the 576 sales in August 2021. The benchmark price of an attached home is $1,069,100, which is a 12.7 percent increase from August 2021.

What is interesting to note here is that ALL Real Estate Board of Greater Vancouver areas are still considered sellers’ markets for condos & townhomes except Vancouver’s downtown, which is a balanced market.
So, Vancouver Westside, East Van, Richmond, Burnaby, New West, Coquitlam, PoCo, PoMo, Pitt Meadows, Tsawwassen, Ladner, North Van, West Van, and Maple Ridge areas are all seller’s markets.

In fact, the same can be said about the Fraser Valley. Only Mission and Abbotsford have balanced markets, and the rest: North Delta, Surrey, South Surrey, White Rock, Cloverdale, and Langley, are all seller’s markets for condos and townhomes.

Turning now to the detached market. This is where we see the real lag in the numbers. In the Real Estate Board of Vancouver, there are three markets that are firmly entrenched as Buyer’s markets. They are Vancouver’s Westside, West Vancouver and Tsawwassen, coming in at 9%, 7% and 8% sales ratios, respectively.

In the Fraser, Valley Mission is down all the way to a 6% sales ratio, the lowest by far.

If you are a potential seller in any of these four areas I have mentioned, you and your agent will have to work hard to get you a successful sale in this 4th quarter. That means truly understanding your potential buyer avatars and designing marketing and a pricing strategy that will attract them… you can not leave a sale up to chance or in the hands of an inexperienced agent. You need an agent with a mature understanding of the market! So, don’t shortchange yourself. But I digress…

There are only three areas where detached homes are still in seller’s markets, and they are Coquitlam at 21% and Port Coquitlam at 36% and Burnaby at 22%. Seller’s in Coquitlam East, Oxford Heights, and Willingdon Heights, who have 3-4 bedrooms to sell, are the ones that experienced all the luck in August.

When it comes to the Fraser Valley, there are two areas in seller’s markets: North Delta and Cloverdale.

Now just because these five areas are in seller’s markets does not mean that a seller can take the market for granted. Pricing is King, and marketing is Queen in this moderating market, and sellers would be wise to remember that.

So, what does all this mean for the average home seller? Great question.

For anyone looking to sell a condo or townhome and move to a detached property, this is a great time to do so. You would be in a seller’s market to sell your property and maximize the value on that side. Then in a buyer’s market to, purchase your next home. So if you are looking to upsize, you may want to consider this as a strategy now.

If you are looking to get into the condo market you should know that the bulk of the sales that happened in August were under $1M. If you follow my Monday Market Monitor videos, you will be familiar with what I am talking about.
Entry-level properties are still in hot demand. In fact, most of the properties that have sold at or above the list price in August were under $1M, another tidbit of info that I report on in my weekly videos.

So, if you are considering a purchase under $1M, then you could very well be in the competition, so it is still essential to have all your ducks in a row. You need your pre-approval done, You need to have your deposit ready, your down payment sorted out, and the Best Agent possible on your side!

Now I do not have a crystal ball, but I do know that this summer was one of pent-up demand for travel and where I usually see half the buyer pool go away on vacation and take a break from Real Estate this year, it was more like 75%. Everyone and their dog was away, and the whole buyer pool is not expected to return till the third week of September. Traditionally our August is slower for Real Estate Sales, and September and October get a boost, and I feel as though I can safely say that we will see that typical market cycle play out this fall it just may be muted.

Keep in mind the Bank of Canada will raise rates again at the next sitting, which is right around the corner, and that will affect purchasers; how much remains to be seen especially given that inflation is still taking a bite out of potential purchasers’ savings.

How do you think the Bank of Canada’s next sitting will affect purchasers? Toss your thoughts in the comments below.

The one thing that I do know is that in Real Estate markets like this, where there is uncertainty in the marketplace, there is a flight by the consumer to quality, experience, and knowledge. Whether you are a buyer or a seller, make sure you have a Realtor in your corner that is a student of the market, someone following the weekly stats, the local economy, and has seen some shit so that they can best advise you. The last thing you want is someone playing fast and loose with what is most likely your largest financial asset.

On that note, thank you for tuning into the Collective Communique. And remember, I am always here to help you Reach Your Real Estate Goals.

Thank you again, friends, and we will see you in the next video.

    Rhiannon A. Foster

    Rhiannon Foster has received numerous production accolades from previous brokerages and Century 21 In Town Realty. Most recently, she was the featured cover story in Top Agent Magazine for July 2022.