February was another record month and that should come as no surprise for anyone who listens to the news (or my Weekly Observations). If you remember a couple of weeks ago in my weekly report, I told you about a house that sold for $500k over the asking price, ludacris right? I thought so too, until this week when a house sold for $870k over the asking price. Wait what? Is this true? How can this be?
I had those same questions, so I looked up the house on MLS to see what kind of house fetches that price (after only 8 days on the market) and I have to tell you, it is a nice house. How nice? well nice, but not that nice. Built in 1991 and located on Victoria Drive close to Trout Lake it is 3382 sq ft and renovated 6 years ago so not bad, but is it worth the $2.6m it eventually sold for? Well to someone it is, but this is the market we are in and it is a seller’s market so get used to it. I will dive into this subject and more in this month’s market report, but first, let’s see what is happening in and around Vancouver in March.
Too long, Didn’t Read
- It is a sellers market with houses selling absurdly over the asking price
- Home sales are up 73% in the Vancouver area compared to last February
- Home sales are up 108% in the Fraser Valley compared to last February
- Vancouver deserves these high prices, this is the price we pay for living in one of the worlds most livable cities
Vancouver Events This Month
In this exhibition, visitors of all ages discover a new way of reconnecting with the work of this great master. The very concept of Imagine Van Gogh is grandiose: visitors wander amongst giant projections of the artist’s paintings, swept away by every brushstroke, detail, painting medium and colour. Immersed in an extraordinary experience where all senses become fully awakened, viewers will be truly moved by such spectacular beauty. Visitors discover more than 200 of Van Gogh’s paintings, including his most famous works, painted between 1888 and 1890 in Provence, Arles and Auvers-sur-Oise.
Enjoy a virtual beer pairing event with Canadian Craft Tours. Learn a little about the history of craft beer in Vancouver and try 4 new beers paired with a carefully curated cheese pairing. This event is open to guests in Metro Vancouver and includes delivery of your tour supplies, as well as a hosted tasting event for 90 minutes
The DVBIA proudly presents “BRIGHT Downtown,” a public outdoor activation digitally projecting artwork and animations onto Fairmont Hotel Vancouver in the heart of downtown. Taking place during a traditionally dark and wet time of the year, the project intends to bring joyful and bright imagery to downtown that will “Light Up Your Night” – helping to create a positive and uplifting feeling for the year ahead. This year’s theme is “Tangled,” exploring the relationship between art and community, visually defining how art is intrinsically interwoven into every step of the human experience.
The Real Estate Board of Greater Vancouver (REBGV) reports that residential home sales in the region totalled 3,727 in February 2021, a 73.3 per cent increase from the 2,150 sales recorded in February 2020, and a 56 per cent increase from the 2,389 homes sold in January 2021. Last month’s sales were 42.8 per cent above the 10-year February sales average.
If you happen to live in the Fraser Valley and you are thinking to yourself wow those Vancouver folks are out of their minds, I’ve got news for you. For the sixth consecutive month, the Fraser Valley’s real estate market experienced property sales at levels never seen before in the 100‐year history of the Fraser Valley Real Estate Board. In February, the FVREB processed a total of 2,815 sales on its Multiple Listing Service® (MLS®), an increase of 108 per cent compared to February 2020 and 64 per cent more than were processed in January 2021. To provide a historical perspective, sales in February were 88 per cent above the 10‐year average for that month; and 18 per cent higher than the previous record of 2,387 sales in February 2016.
So, is there a consensus on how long these numbers can keep climbing? It is hard to say for sure but generally from my research and the various experts I listen to is that the market is expected to stay hot through the spring and perhaps into the 3rd quarter of 2021. After which we may see the market start to cool off, by how much though? It is impossible to say. If you are starting to think we have another 2016 on our hands you are not alone, so let’s take a deeper dive into the numbers and see what they say.
Metro Vancouver’s housing market is experiencing seller’s market conditions. The supply of listings for sale isn’t keeping up with the demand we’re seeing. Competition amongst home buyers is causing upward pressure on home prices
There were 5,048 detached, attached and apartment homes newly listed for sale on the Multiple Listing Service® (MLS®) in Metro Vancouver in February 2021. This represents a 26.1 per cent increase compared to the 4,002 homes listed in February 2020 and a 12.7 per cent increase compared to January 2021 when 4,480 homes were listed.
The total number of homes currently listed for sale on the MLS® system in Metro Vancouver is 8,358, a 9.1 per cent decrease compared to February 2020 (9,195) and a 0.6 per cent increase compared to January 2021 (8,306). This is 21.2 per cent below the February 10-year average for new listings.
For all property types, the sales-to-active listings ratio for February 2021 is 44.6 per cent. By property type, the ratio is 41.8 per cent for detached homes, 61.8 per cent for townhomes, and 41.7 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. Low interest rates remain a key driver in today’s market. We’re seeing steady numbers of first-time homebuyers and move-up buyers entering the market
The MLS® Home Price Index composite benchmark price for all residential properties in Metro Vancouver is currently $1,084,000. This represents a 6.8 per cent increase over February 2020 and a 2.6 per cent increase compared to January 2021.
Less populated communities within the region continue to experience the largest year-over-year price increases across all property types. Examples, according to the MLS HPI®. include Bowen Island (34.4 per cent increase), the Sunshine Cost (32.7 per cent increase), West Vancouver (16.1 per cent increase) Maple Ridge (14.8 per cent increase) and Ladner (13.7 per cent increase).
Sales of detached homes in Metro Vancouver reached 1,231 in February 2021, a 79.7 per cent increase from the 685 detached sales recorded in February 2020. The benchmark price for a detached home is $1,621,200. This represents a 13.7 per cent increase from February 2020 and a 2.8 per cent increase compared to January 2021.
Sales of apartment homes reached 1,759 in February 2021, a 65.8 per cent increase compared to the 1,061 sales in February 2020. The benchmark price of an apartment is $697,500. This represents a 2.5 per cent increase from February 2020 and a 2.5 per cent increase compared to January 2021.
Attached home sales in February 2021 totalled 737, an 82.4 per cent increase compared to the 404 sales in February 2020. The benchmark price of an attached home is $839,800. This represents a 7.2 per cent increase from February 2020 and a 2.9 per cent increase compared to January 2021.
Yes, it is crazy out there and if you are a seller, rejoice! If you are a buyer, well batten the hatches because things are about to get ugly. If you are a buyer be prepared for bidding wars, and if you are thinking “well I don’t want to get into a bidding war” then start looking for houses in Manitoba, I hear it is nice this time of year. In all seriousness though, does Vancouver deserve these sort of housing prices? I would argue yes, for several reasons. We live in an international city in one of the best countries in the world. Our government is stable, our local economy is diversified, and we have the mildest weather in the country, apparently even milder than Texas. With 400k new immigrants expected to arrive in Canada per year over the next several years where do we think they will go? Well if I was a betting man I would wager Vancouver and the lower mainland will get their fair share.
So what does the future of Vancouver and the surrounding region look like for the housing market? Do we end up like New York where many people never own a house or apartment and rent their entire lives? Quite possibly. Are we in a housing bubble that is ready to burst? That is possible as well, although I think a little less likely. I feel confident enough to say that by the end of this year there are going to be some people who come out on top, those that can get into the market either as investors or able to use their equity to upgrade, or downgrade and be able to spend so of their money. As for all of you, well as usual please send me an email or give me a call if you want to talk real estate. Follow me on Instagram or Facebook to stay up to date with all of the latest news, and as usual, I will see you all next week!