2022 is already shaping up to be a busy year in the Vancouver housing market. With early predictions showing that we can expect home prices to increase another 7.5 to 13 percent, with the majority of price gains to occur in the first half of 2022. We managed to avoid an interest rate hike in January, however an interest rate hike in March is beginning to look all but certain. There could also be new legislation coming out later this year that would see the introduction of a cooling-off period for residential purchases and the end of blind bidding.
From a market perspective, it seems that this year has picked up where 2021 left off…. with very few sellers and many “willing” buyers. With over 6.9% fewer new listings on the market compared with January 2021, and a total of 31.8% fewer total listings on the market compared to January 2021.
I was fortunate to sell several homes in January, however, each one has been via a multiple offer situation, and primarily dictated based on the seller’s terms. There is a glimmer of hope for hungry buyers… as active listings were up month over month, interest rates are poised to climb, and word on the street is that more listings are coming. I anticipate the second half of 2022 to see a surge of supply going into summer. I don’t anticipate a decrease in home values, I just foresee many new listings coming onto MLS as sellers cannot believe the value of their home and look to capitalize. Many sellers will also be looking to downsize, or buy properties in the interior, as they attempt to “cash-out” of Vancouver and the Fraser Valley, while others will use their home equity to assist the next generation to enter the market.
I have one more tidbit for you before I jump into the market report. I was in a presentation with the REBGV’s economist Keith Stewart last month, and he showed us some slides that I wanted to share with you. For those of you who read my weekly observations newsletter, these will be familiar to you, for those of you who missed it I wanted to share them again.
Of particular interest is this last slide showing the total number of active listings on the market dating back to the 1980s. What I found fascinating was that although our population has increased by 1 million people since 1980, we still have the same amount of active listings in 2021 then we did in the 1980s.
Market Report
The first month of 2022 saw home sales come down from last year’s record-setting pace, while low supply continued to cause home prices to edge higher across Metro Vancouver.
The Real Estate Board of Greater Vancouver reports that residential home sales in the region totalled 2,285 in January 2022, a 4.4 per cent decrease from the 2,389 sales recorded in January 2021, and a 15 per cent decrease from the 2,688 homes sold in December 2021.
Last month’s sales were 25.3 per cent above the 10-year January sales average.
There were 4,170 detached, attached and apartment properties newly listed for sale on the Multiple Listing Service in Metro Vancouver in January 2022. This represents a 6.9 per cent decrease compared to the 4,480 homes listed in January 2021 and a 114.4 per cent increase compared to December 2021 when 1,945 homes were listed.
The listing inventory on MLS is less than half of what would be optimal to begin the year. As a result, hopeful home buyers have limited choice in the market today. This trend is causing fierce competition for a scarce number of homes for sale, which, in turn, increases prices.
The total number of homes currently listed for sale on the MLS® system in Metro Vancouver is 5,663, a 31.8 per cent decrease compared to January 2021 (8,306) and an 8.2 per cent increase compared to December 2021 (5,236).
As we approach spring, we’ll keep a close eye on the impact of rising interest rates on buyers’ willingness to buy and on whether more home owners will opt to become sellers in what’s traditionally the busiest season of the year. With home prices reaching new highs in recent months, the need has never been greater for government to collaborate with the building community to expedite the creation of housing supply and provide more choice for those struggling to buy a home today.
For all property types, the sales-to-active listings ratio for January 2022 is 40.3 per cent. By property type, the ratio is 28 per cent for detached homes, 51.6 per cent for townhomes, and 49.7 per cent for apartments.
Generally, analysts say downward pressure on home prices occurs when the ratio dips below 12 per cent for a sustained period, while home prices often experience upward pressure when it surpasses 20 per cent over several months.
The MLS Home Price Index composite benchmark price for all residential properties in Metro Vancouver is currently $1,255,200. This represents an 18.5 per cent increase over January 2021 and a two per cent increase compared to December 2021.
Sales of detached homes in January 2022 reached 622, a 15.9 per cent decrease from the 740 detached sales recorded in January 2021. The benchmark price for a detached home is $1,953,000. This represents a 22.7 per cent increase from January 2021 and a 2.2 per cent increase compared to December 2021.
Sales of apartment homes reached 1,315 in January 2022, a 10 per cent increase compared to the 1,195 sales in January 2021. The benchmark price of an apartment property is $775,700. This represents a 14 per cent increase from January 2021 and a 1.8 per cent increase compared to December 2021.
Attached home sales in January 2022 totalled 348, a 23.3 per cent decrease compared to the 454 sales in January 2021. The benchmark price of an attached home is $1,029,500. This represents a 24.3 per cent increase from January 2021 and a 2.5 per cent increase compared to December 2021.
