One of the interesting takeaways from the Q3 real estate industry reports issued from reputable sources here in Canada was that there’s only one city in the entire country where the trend of slowed homes sales across Canada bringing down median home prices hasn’t applied. Most people would guess that to be Vancouver or Toronto, and if so you’re on the right line of thinking given how that’s where the greatest demand is for homes in the country. You’ve also got a 50 / 50 chance of being correct, and if you guessed Vancouver you are right.
It would also be natural to assume that the geographical constraints of the Vancouver area preventing new home builds would be the primary reason for this, and while that is true it’s also because so much of the land that is available for development in the Vancouver isn’t suitable for residential. That is true elsewhere too, but it’s a very pressing reality in Vancouver. The city has a lot of potential for people who want to see profitability working in real estate, but it’s equally common for new realtors to struggle with getting their foot in the door in a profession where so many people are already hanging their hat in Vancouver.
This is in part what makes our online real estate lead generation system here at Real Estate Leads so beneficial for anyone new to real estate in hot markets who wants an added advantage when it comes to prospecting new clients. It works, and when utilized by an ambitious and studious realtor who works to better themselves and become more of an industry professional everyday it can be immensely helpful in getting their real estate business thriving as soon as possible.
So what is it specifically about Vancouver that has made it immune to price drops on homes caused by a nationwide slowing of sales? That’s what we’ll get to with this week’s entry here.
Demand WAY Outstripping Supply
Metro Vancouver real estate sales are still significantly slowed from the scorching pace seen all through 2020, but that hasn’t meant much in the way of deals for homebuyers because demand continues to outstrip supply. The REB of Greater Vancouver reported 3,149 homes being sold in September, which works out to a 13.6% drop from the 3,643 sold in September 2020 and down 0.1% from the previous month.
Plus, even though sales were up quite a bit compared to the same time last year they were 20.8% above the 10-year September average. At the same time the number of newly listed homes dropped 19.2% compared to September 2020, but went up 28% compared to the previous month. New listings came up short 1.2% of the 10-year average.
What is more expected was that the summer trend of above-average home sales and historically typical new listings activity were seen in Vancouver last month. This is working to keep the overall supply of homes for sale low, and the same upward intensity on home prices today is not being seen like it was in the spring. Property type and neighbourhood type are also much more of factors here, and people and their entire home buying decisions (and selling ones to a lesser extent) are adjusted by this.
Floor on Home Prices in Vancouver
The MLS Home Price Index composite benchmark for homes for sale in Vancouver is up 13.8% (currently) year over year and 0.8 per cent month over month to $1,186,100. This type of percentage value has been standard for many years now, and it works to reinforce the reality that the demand for Vancouver homes will always insulate this market from nationwide real estate market trends and give Vancouver Home Prices a higher floor to the extent that it makes for a higher ceiling too.
Add bidding wars to that equation and it’s all too easy to have median prices for home sold to stay high in the face of influences that would pull them down in any other location of the country, except maybe the GTA. Low mortgage rates definitely factor in too, and of course nothing is as pivotal to all of this like the shortage of homes on the market in contrast to the demand for them. The total number of homes listed for sale is 27.7% below the 10-year September average.
In Vancouver, detached homes have had a 20.4% increase year over year and 1.2% rise month over month to $1,828,200 compared to August 2021. The total number of homes currently listed for sale is down 29.5% compared to September of last year.
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