Does the drop in new listings signal a gradual recovery for Vancouver Real Estate?
During the month of January 2013, we saw a reduction in the number of new listings from the same month in 2012, a 10.2% reduction. This was the 8th consecutive month where the year on year figures for new listings declined, and while we still have plenty of active inventory that will take a while to sell or come off the market, these statistics could point to a slight recovery as the amount of active inventory declines.
“Sales levels in 2012 were quite low from a historical perspective…” says Cameron Muir, the chief economist at the BC Real Estate Association.
He also highlighted that since Ottawa tightened the mortgage rules in July we saw the already decreasing number of sales accelerate further in August as a result.
“The evidence that we see is that Greater Vancouver home prices have edged down 2 to 3 per cent over the past year. Some potential buyers are taking a wait-and-see approach in anticipation of a deflationary spiral, but I don’t believe that a substantial price correction is going to happen,” he said.
When we look at the average sales prices over the past 12 months, we see only a small decline, rather than a large decrease that some pundits were calling for. As we discussed in our January 2013 Real Estate Statistics article sales in Greater Vancouver for January 2013 declined 14.3% from the year before, while out in the Fraser Valley, we saw a 23% decline.
“Once consumers in this spring’s market realize that prices have not dropped substantially, they will likely get into the market and get on with their lives. Buying a principal residence is just as much a lifestyle decision as it is a financial decision,” he said.
The economist forecasts a soft landing for Vancouver Real Estate, expecting slightly lower prices this year, before an expected modest price climb in 2014.
We use a measurement known as the sales-to-active-listings ratio to determine what state the real estate market is in. During January this figure was sitting at 10.2%. when this ratio is between 15 and 20% we consider a balanced market. When we see figures below 15% we consider it a Buyer’s market, and above 20% a sellers market.