Well I delayed getting this out and BOOM the expected big rate increase...obviously that will affect the market and I will send out more on that but for now, here is the monthly market update.
As I mentioned last month, we have been seeing pretty steady declines in sales in almost all markets across the country. Until last month, we hadn't seen much in the way of price drops. However, as sales volume decreases continue, price decreases are becoming more common.
Although May sales were still slightly above the ten-year average, in June sales in Greater Vancouver were down an incredible 23.3%. More homes have been coming on the market BUT less buyers are wanting to jump in fearing price drops after they purchase (more on that later). In addition, with the recent interest rate increases, some buyers have been knocked out of the price point they were previously looking at. Interest rates are continuing their upward trend and as predicted today we saw a 1% increase in the overnight rate. This will significantly impact many buyers.
As I mentioned last month, recently there have been a lot of changes in the factors that can have a big impact on the real estate market and we are expecting this to continue as the provincial and federal governments are marching forward with legislative changes which will further impact the market. For now things are not as bad as one might think looking at what is being reported in the news.
In June we saw:
-sales were down 35% from June 2021
-sales were down 16.2% from a month earlier, May 2022
-sales were 23.3% lower than the 10-year average for June even though 3 months earlier, sales had been up 25.5% when compared with the 10-year average for March
-the number of homes listed for sale was down 10.1% when compared with June 2021
-the number of homes listed for sale was down 17.6% when compared to a month earlier, May 2022
-detached home sales were down 48.3% from June 2022
Obviously the trend in the market is not as good as it was for sellers in terms of sale prices nor for buyers in terms of interest rates. However, having said that, prices are only down slightly by about 2% based on the benchmark price AND prices are up 12.4% when compared to June 2021-when it was a very strong sellers’ market. So, while sales may be slower and the process less frenzied, those selling are still doing VERY well.
On the buying side, yes interest rates are up BUT they are still at very, very low rates. We have had a long run of low rates but placed in a historical context, the current rates are still very low. Rates as of the beginning of this month are still lower than they were at the beginning of 2020 (when all were very happy with our low rates). Even with today's huge rate increase coming out of the Bank of Canada announcement, we are still at extremely low rates for the foreseeable future.
So what should you do? Well, if it were me....
-as a buyer, if you can afford to buy, I think you buy. I bought my current house at the peak in 2008. I knew that prices would fall (and they did temporarily) but I wasn't buying my house to flip-I was buying it to live there. I prefer to pay myself (mortgage payments) than pay a landlord. I am happy I bought it and while the prices did go down after I bought, of course they popped back up. More importantly, I got a house because I was willing to buy as others were pulling out of the market thinking prices were heading down. Over the past two years, buyers have had to fight for homes, paying questionable prices and taking big risks just to "win" a house. Now that there is time to breathe, it doesn't make sense to me for people who can afford to buy to be slamming on the brakes. And as I said above, in the same situation, I chose to buy, and I have not regretted it for a second!
-as a seller, yes you have missed the very, very top of the market. But prices are only down slightly in most areas. It is true that you may not sell your house in the first week (although for the right house, at the right price, we are still seeing bidding wars and the odd crazy price) but if you are reasonable, you should still be able to sell your home for an amazing price. If you are moving up, the "gap" now favours you as the more expensive homes have usually come down more on a dollar basis than the lower priced homes (happy to explain in detail). If you were trying to "get out of Dodge" and have been shocked at some of the prices in less urban areas, we are definitely seeing those homes sit longer and offer greater value to those buying than what we saw during the Covid exodus!
So while the media headlines suggest otherwise, our current market remains pretty good. There are lots of opportunities for participants who are looking forward and not holding on to the market that we are now transitioning out of....
If you would like to discuss the market or the upcoming changes in more detail or have any questions, please contact me. And of course, if you or anyone you know would like to discuss real estate, I am more than happy to meet or chat on the phone.
Patricia Houlihan, LLB
Coldwell Banker Prestige Realty
cell (604) 376-7653; Office: (604) 971-2683
#1 in Canada, Coldwell Banker International
Top 1% of Greater Vancouver Agents for 3 years (Top 10% for over 15 years)
