New data released by the Vancouver real estate board shows that home prices are down 9.2 per cent from last year, but have quickly rebounded 4.9 per cent in the last month. It seems that Vancouver home prices are now back on their linear path.
In February 2023, the benchmark price for homes in greater Vancouver was $1,123,400. This represents a 4.9 per cent increase over the previous month and a 9.2 per cent decrease over the previous year. Over the past three years, the benchmark price has increased by 21 per cent.
The average home price in Greater Vancouver was $1,220,469 in February 2023. Townhouse prices decreased by 6.3 per cent year-over-year to $1.04M and condo prices decreased by 3 per cent year-over-year to $732k.
In January 2023, new "cooling-off period" legislation came into effect in British Columbia, allowing homebuyers to back out of a home purchase for three days after the sale. It is hoped that this change will make the home-buying process less stressful for consumers, which might allow first-time buyers to get into the property market.
The number of properties sold is lower
Residential home sales in Vancouver are significantly lower compared to the previous year, with only 1,808 sales recorded in February 2023, down 47.2 per cent from 3,424 sales in February 2022. Despite this, there was a 76.9 per cent increase from January 2023, when only 1,022 homes were sold.
Keep in mind that the number of houses sold in a month does not directly correlate with property prices.
The below-average sales activity in February is primarily due to the continued reluctance of prospective sellers to engage in the market. This has led to an increase in the number of available homes for sale in the region, which is keeping market conditions from straying too deeply into seller's market territory, particularly in the more affordable segments. Many sellers, half of whom have no mortgage, are waiting to see what happens with the market.
The low sales activity is also a result of the low new listing activity, which has been among the lowest in recent history. As a result, sales are struggling to hit typical levels for this point in the year. February's sales were 33 per cent below the 10-year February sales average.
Despite the slow sales, the increased inventory accumulation is a positive sign for prospective buyers. This provides more options to choose from, which is helping to keep prices from skyrocketing. Prospective buyers can benefit from the increased inventory accumulation.
Properties currently for sale
The total number of homes currently listed for sale on the MLS system in Vancouver is 7,868, a 16.7 per cent increase compared to February 2022 (6,742) and a 5.2 per cent increase compared to January 2023 (7,478).
The sales-to-active listings ratio last month was 23 per cent for all property types. By property type, the ratio is 16.8 per cent for detached homes, 30.1 per cent for townhomes, and 25.8 per cent for apartments. When the ratio dips below 12 per cent for a sustained period, downward pressure on home prices typically occurs, while home prices often experience upward pressure when it surpasses 20 per cent over several months.
Despite the decrease in new listings, the market activity suggests pricing is firming up, and some leading indicators suggest we may see modest price increases this spring, particularly if sales activity increases and mortgage rates hold steady.
In the current market environment with higher mortgage rates, fewer sales, and an inventory that is inching higher, working with a real estate agent who understands the local market conditions and has experience navigating challenging markets is crucial.
Significant decrease in new listings
Vancouver's housing market has seen a significant decrease in new listings, leading to an increase in the total number of homes listed for sale. However, the market activity suggests that pricing is stabilizing, and we may even see modest price increases in the upcoming months.
I asked Jova Xu of Jovi Realty, and she said that the sales of detached homes in February 2023 were 514, a 49.1 per cent decrease from the 1,010 detached sales recorded in February 2022. The benchmark price for detached properties is $1,813,100. This represents a 12 per cent decrease from February 2022 and a 0.7 per cent increase compared to January 2023.
Sales of apartment homes in February 2023 reached 928, a 49.9 per cent decrease compared to the 1,854 sales in February 2022. The benchmark price of an apartment property is $732,200. This represents a 3 per cent decrease from February 2022 and a 1.6 per cent increase compared to January 2023.
Attached home sales in February 2023 totalled 366, a 34.6 per cent decrease compared to the 560 sales in February 2022. The benchmark price of an attached unit is $1,038,500. This represents a 6.3% decrease from February 2022 and a 1.8% increase compared to January 2023.
The sales-to-active listings ratio for Vancouver's housing market remains relatively stable, with some variations by property type. While the benchmark price for all residential properties has decreased over the past year, it has increased slightly compared to January 2023. The benchmark prices for detached, attached, and apartment properties have all seen fluctuations, with some modest increases compared to January 2023.
So, it is still a great time for buyers to get into the market, but beware, house prices in Vancouver are starting to go back up again, so don’t drag your feet.
Alistair Vigier is the CEO of ClearwayLaw, a website that allows the public to leave reviews for all lawyers in Canada, including real estate lawyers.