The news for months now has been home sales are down, and prices are dropping. Still, you might be surprised to find out that when it comes to condos and townhomes in both the Greater Vancouver and Fraser Valley Real Estate boards, we are firmly entrenched in a seller’s Market with a 27% sales-to-active ratio!
This is just the tip of the iceberg when it comes to some of the most interesting statistics that I cover in today’s Vancouver and Lower Mainland Monthly Market update!
Welcome back to your Vancouver and Lower Mainland market update, where I cover the latest monthly statistics from both the Real Estate Board of Greater Vancouver and the Fraser Valley.
As I mentioned in my intro, despite the news and the headlines that sales are down, interest rates are on the rise, and inflation is hurting many people, our stats paint not a rosy picture but certainly not a bleak one as the media does.
So, back to what I opened with. When it comes to condos and townhomes in both the Greater Vancouver and Fraser Valley Real Estate boards, the numbers indicate that we are in a seller’s Market with a 27% sales-to-active ratio!
As for detached homes, the story is very different. On that side, in the Greater Vancouver and Fraser Valley Real Estate boards, the sales to active ratio is 16% which technically is a Balanced market.
I talk a lot about the sales-to-active ratio, so here is a quick recap of what that means.
The sales-to-active ratio is the speed at which the current inventory of homes is selling.
And it is calculated by taking the sales for the month and dividing them by the Active Listings, and then you get the percentage of the rate at which homes are selling.
There are three markets that we talk about in real estate, and they are the Buyer’s Market, the Balanced Market and the Seller’s Market.
In a Buyer’s Market, the sales ratio is 11% or less. To be in a Balanced Market, the sales ratio must be between 12% and 20%, and finally, the seller’s Market must be 21% and over.
So, let’s talk numbers. Keep in mind when I tell you this, there were two interest rate hikes that should have affected the September home sales numbers. July 13th, a 1 % increase and September 7th, a .75% increase.
But despite those hikes, entry-level properties are dominating sales. One might assume that the people affected the most by the interest rate hikes would be the entry-level buyer, but that does not seem to be the case.
If you follow my Monday Market Monitor, then you will know that I have been talking about the strength in the condo and townhome market for weeks and this data just backs it all up.
The lowest sales-to-active ratio for condos and townhomes is Mission, coming in at 13%, which, if you remember what I just mentioned, is still considered a Balanced market.
The highest was Ladner at a whopping 56%.
Some notable mentions were Cloverdale coming in a 40%, North Delta at 38% and North Van and Port Coquitlam both at 36%.
It would seem that there were still people taking advantage of selling their condos and townhomes in a Seller’s Market and making the move to buy a detached in a Balanced Market where they are able to get a deal!
If you have a condo or townhome and you think that you might want to make a move up to a detached, this is the time to do it, in fact, I don’t know that there has been a better time in YEARS.
So, let’s look at the detached side of the coin.
Remember, the detached sales-to-active ratio for the Greater Vancouver and Fraser Valley Real Estate Boards is 16% total, a balanced market, and unlike in the condo and townhome space, we have areas that are 100% Buyers Markets.
Not a huge surprise, but the areas that had the highest sales ratios for detached homes and are all in Seller’s markets were on the North Shore and out to the Tri-Cities. North Van hit 30%, Coquitlam hit 25%, Port Moody was 27%, and Port Coquitlam got up to 35%.
Contrast that with the areas that found themselves in buyer’s markets. Surrey at a 10% sales ratio, New Westminster at 10%, and the lowest number goes to….drum roll, please…..
West Vancouver at 7%.
Last month West Van had 390 homes on the market and a dismal 28 sold. When I look at the properties on the market in West Van, I am floored right now, no one seems to have a great pricing strategy. What do I mean by that?
Simple. The agents have no idea who the target buyers are, what matters to them, how to market to them or how to price properties appropriately for a successful home sale.
If you are considering selling in this market if your agent does not understand those very basic pieces of the strategy, good luck because you might end up stuck on the market and catching a falling knife.
Lastly, I want to just touch on a couple of interesting numbers related to historical statistics.
Something that I find very interesting is the Days on Market for a successful sale. In 2021 the average time that it took across all products, so detached, townhomes and condos, was 14.88 days.
And 2022 Year to date is 12.27%.
So homes are selling faster than last year.
In a slowing market, you would expect that properties would sit on the market longer, but that is clearly not the case here.
Now, this could be because people are pricing more aggressively or they are a better understanding of value in this market, or it could be a better understanding of the buyer pool.
What I can tell you from my experience on the ground is that the properties that have not adjusted to the new reality of value are just sitting on the market, as well as properties where sellers think they can get February’s pricing. But good properties are moving because, in reality, there is diddly squat good inventory out there so we are still seeing properties sell at or above list price.
I actually reported this number in My Real Estate Board of Greater Vancouver Monday Market Monitor that 19% of the properties sold last week sold at or above list price, so there is still competition out there.
While it is true that prices have come down significantly since February, inventory remains low and will continue to trend downward as we move toward the holiday season.
I am curious to see if prices into 2023 hold or continue to be chipped away at, given the latest rate hike, the fact that there will undoubtedly be one on December 7th, and the fact there is a foreign buyer ban looming.
It all remains to be seen, and you can tune in here every Monday to get the most up-to-date happenings in the Real Estate Board of Greater Vancouver with yours truly.
Thank you so much for tuning into this month’s Vancouver and Lower Mainland market update, and we will see you in the next video!