February is here and it is time for our monthly newsletter and market updates. As usual, before diving into our monthly report, I would like to take a moment to point out a few events that are happening around Vancouver this month, as well, if you are in a rush and this email is too long, I have a solution for you below in our too long didn’t read summarization points, which highlights some of the key messages in this months newsletter.
Too Long Didn’t Read:
- January home sales up 36.4 percent from the 10-year average.
- Interest rates may rise sooner than expected.
- We are still in a seller’s market.
- Sales to active listings is a 28.8% percent, which tells us there is upward pressure on home prices.
Events Happening Around Vancouver:
Dine Out Vancouver
As I mentioned last month Dine Out Vancouver is happening this year in February and not surprisingly, has the largest turnout ever for participating restaurants. I would encourage anyone who can safely do so, to support your favourite restaurants during this time. DOV is an excellent time to do so and our local restaurants can use all the help we can give them right now. For more information on dine out click here.
Museum of Anthropology: A Future for Memory: Art and Life After the Great East Japan Earthquake.
The exhibition coincides with the 10th anniversary of the 2011 triple disaster that saw a 9.0 magnitude earthquake, tsunami and nuclear meltdown hit the eastern region of Japan. A Future for Memory highlights nature’s destructive impact on humans and its regenerative potential and explores how humans live in harmony with nature. It also examines how new connections and relationships have developed in the aftermath of this tragic event. For more information about this event click here.
The Chan Centre’s Spring 2021 Dot Com Series- Online
The Chan Centre’s Spring 2021 Dot Com Series features eight all-new performances which will be delivered 100% online and recorded around the globe—from Mexico to Montreal to our very own Chan Centre stage. Click here for more details about this unique event.
With January behind us, we can now begin to take a closer look at what to expect from the spring housing market. As most of you already know, I am hesitant to forecast too far into the future, however, at this point, we have enough data to see where trends are pointing and to make some predictions. I would like to emphasize that these are only predictions, and in our ever-changing environment, things can happen quickly, so be prepared.
On Monday I posted a report on my Facebook page from the Bank of Canada which you can read here which states that while the second wave of COVID-19 is hurting Canadians now, the economy should rebound strongly later in the year. The Bank is forecasting growth of around 4 percent this year and close to 5 percent in 2022.
What could this mean for the housing market? Well, it is possible that we may see interest rates increase sooner than expected, especially if the Federal Government moves ahead with another stimulus plan. If the economy is in better shape than expected, that extra spending may simply add to the pressure on the Bank of Canada.
2021 also marks the end of the five-year mortgage rates that many people acquired during the 2016 real estate boom. If homeowners who have been stretching to keep up with mortgage payments since buying their homes in 2016, possibly for more than what they are worth now, see current rising values as an incentive to put their properties on the market rather than continue holding them, it could increase the supply of detached homes for sale and temper price gains. The B.C. Real Estate Association is forecasting B.C. home sales numbers for 2021 that approach those during the boom years of 2015-17, and the first six months of 2021 will be crucial to setting up the sales and price and trends for the next years.
A look back at January
In a month that is usually one of the quietest in real estate, the Greater Vancouver market, as well as the Fraser Valley market continued at a breakneck pace, producing the strongest January sales on record, as well as a modest uptick in new listings. Although, despite the uptick in new listings, we are still seeing active listings below their normal levels for this time of year. The reason for this? A number of things, however, the high volume of home sales in the preceding 3 months, combined with the second wave of Covid-19 have kept the volume low, as well, shifting housing needs during the pandemic and historically low-interest rates have been key drivers of demand in our market over the last six months. That being said, we are certainly not seeing a shortage of buyers right now, affirming that we are for the time being, in a seller’s market.
The Real Estate Board of Greater Vancouver (REBGV) reports that residential home sales in the region totaled 2,389 in January 2021, a 52.1 percent increase from the 1,571 sales recorded in January 2020, and a 22.8 percent decrease from the 3,093 homes sold in December 2020.
Last month’s sales were 36.4 percent above the 10-year January sales average.
There were 4,480 detached, attached and apartment properties newly listed for sale on the MLS in Metro Vancouver in January 2021. This represents a 15.7 percent increase compared to the 3,872 homes listed in January 2020 and an 86 percent increase compared to December 2020 when 2,409 homes were listed.
The total number of homes currently listed for sale on the MLS® system in Metro Vancouver is 8,306, a 3.6 percent decrease compared to January 2020 (8,617) and a 2.7 percent decrease compared to December 2020 (8,538).
For all property types, the sales-to-active listings ratio for January 2021 is 28.8 percent. By property type, the ratio is 26.3 percent for detached homes, 37.6 percent for townhomes, and 27.8 percent for apartments.
Generally, analysts say downward pressure on home prices occurs when the ratio dips below 12 percent for a sustained period, while home prices often experience upward pressure when it surpasses 20 percent over several months.
The MLS® Home Price Index composite benchmark price for all residential properties in Metro Vancouver is currently $1,056,600. This represents a 5.5 percent increase compared to January 2020 and a 0.9 percent increase compared to December 2020.
Sales of detached homes in January 2021 reached 740, a 68.6 percent increase from the 439 detached sales recorded in January 2020. The benchmark price of a detached home is $1,576,800. This represents a 10.8 percent increase from January 2020 and a 1.4 percent increase compared to December 2020.
Sales of apartment homes reached 1,195 in January 2021, a 46.8 percent increase compared to the 814 sales in January 2020. The benchmark price of an apartment home is $680,800. This represents a 2.2 percent increase from January 2020 and a 0.6 percent increase compared to December 2020.
Attached home sales in January 2021 totaled 454, a 42.8 percent increase compared to the 318 sales in January 2020. The benchmark price of an attached home is $815,800. This represents a 4.3 percent increase from January 2020 and a 0.2 percent increase compared to December 2020.
To say the market is hot right now would be an understatement, however, I do expect to see more and more listings come on the market over the next couple of months, which as I stated earlier, may help temper the demand. If you are considering listing your house now would be an excellent time in order to get ahead of the wave of properties that could be coming on the market soon. Like always, if you have any questions or concerns I am available 7 days a week. Please feel free to email me at any time, or give me a phone call. I encourage everyone to follow me on Facebook and Instagram for up to date postings on the market.
You can follow me on both my accounts at @boothrealestate604.
If you are thinking of selling I would encourage you to click here to get a free home assessment.