For the third month in a row, the sales in Greater Vancouver have decreased from the prior month, while continuing to be strong when viewed in terms of the 10 year averages. April was down 14% from March; May was down a further 13% when compared to April; and now we have the numbers for June: down 11.9% from the sales recorded in May. While this downward trend may be troubling for some sellers, we are still seeing a very strong sellers' market for now. June sales were still 18.4% higher than the 10 year average for June.
While home buyers continued to buy homes at a pretty good rate last month, we have now seen this 2nd quarter of 2021 trending much differently than the first quarter. The first quarter of 2021 was insanely strong-the best sellers' market we have seen. As noted in last month's email, there are now a number of factors at play pushing sales down. These include the number of homes for sale having increased, reducing the pressure on buyers to move fast and "take what they can get"; many buyers have decided if they wait they will see much better prices (based in part on the incredible number of articles in the media suggesting a severe market correction); mortgage rates have increased slightly although they remain very low at just over 2%; and the mortgage stress test, which came in on June 1, 2021, has reduced the buying power for most buyers by approximately 4.5 percent.
In May, and even more so last month, we saw a significant reduction in the number of offers we received on each property listed AND we also saw the return to offers with buyer subjects. Many homes are now not selling quickly even if the prices seem quite good.
However, while not as good as the first quarter, the market is still seller favourable. In June 2021 we saw:
-sales of all types of homes were still up 54% over June 2020. However this is of course due to the fact that in June 2020 people were just starting to buy again after the almost complete shutdown from Covid.
-sales of detached homes were up 45% over June 2020 (again, June 2020 was when we saw buyers just feeling comfortable out buying again).
-sales were down 11.9% for June 2021 compared to May 2021.
-sales were up 18.4% over the 10 year average for June (still very good for sellers who are prepared to sell for what buyers will now pay).
-June was the second month where we have not seen a new record high number of sales for quite some time. April was the last month where we saw a "highest on record" for the month; Neither June nor May 2021 had the highest sales on record for those months.
-new listings for June were 17.9% lower than what we saw in May. New listings for May and for April were the HIGHEST on record for those months. This significant number of new listings pushed the critical supply and demand metric in favour of buyers. However June did not continue that trend....we are still in a sellers' market.
-the benchmark price for detached homes in June was up .2% over May 2021. However this is an average and there are significant variations, higher and lower, depending upon where one is selling.
Obviously, most sellers are still doing very well when they sell. However there are many sellers who are likely to lose money by not accepting good offers, wanting to see the bidding wars, and associated (often crazy) prices they would have obtained just 2 short months ago. We also know that July and August can be very slow months for real estate. This year, with people now finally being able to get out of town, we may see an unusually slow summer. Hopefully that will lead to a lot of activity in the fall.
Timing is EVERYTHING in real estate....and the best time for this cycle has likely come to an end. Sellers are still doing very well if they are willing to sell for less than they would have received in March. The sellers who think they will get more if they wait are likely to leave money on the table. As we know from past markets, what starts as a gradual slowdown can become pretty dramatic quite quickly. Hopefully if we see a big summer slow down we will also see a great fall recovery.
If you have been thinking of selling your home or if you would like to discuss the current market (or anticipated future market) and how it may affect you, please let me know.
