The latest news focuses on increasing interest rates (several more are anticipated for 2022), inflation and economic uncertainty with indications that our economy could be heading into recession. This has a significant impact on the housing market. Source: https://capital.com/amp/bank-of-canada-interest
Despite market changes, try to keep in mind that when most people purchase property, they are in it for the long game. If it’s a long term purchase you plan to make, historically things balance out over time Source: Is Buying A House During A Recession A Good Idea? (advisorstream.com) If you are planning to sell, it is not a bad time either, as you could sell and buy at the tipping point. I’ve made my best real estate investments by paying attention to market shifts. It would be great to share my thoughts with you.
My thoughts- interest rate increases mean there are less people able to qualify for mortgages. Typically, less demand leads to:
1) a balanced market or buyers’ market. We are starting to see the re-entry of ‘subject to sale’ clauses in offers. Last year these were close to non-existent because it was a sellers’ market.
2) a decrease in sale prices
3) increased demand for rental units
July year-over-year sales in Greater Vancouver decreased 36.4% (condo market) and 43.3% (detached home market). Why? This is because homebuyers are exercising more caution in today’s market in response to rising interest rates and inflationary concerns. Over the last three months, this has resulted in the selection of homes for sale to increase and prices to trend downwards. Keep in mind that listings compared to July 2021 have increased. “After two years of market conditions that favoured home sellers, home buyers now have more selection to choose from and more time to make their decision.” (Source: Metro Vancouver Market Highlights, JULY 2022, REBGV) :
What type of market are you in?
BUYERS MARKET: 0-11% SR BALANCED MARKET 12-20% SR SELLERS MARKET: 21%+ SR
Sales Ratio (SR) = Sales to Active Listing Ratios ie. 110% SR means that there is not enough inventory to satisfy buyer demand (this was the market in 2021).
In the Fraser Valley the market has SHIFTED to a BALANCED MARKET (18% sales ratio)! The number of listings rose from 3581 in July 2021 to 5024 in July 2022 HOWEVER, sales decreased from 1801 in July 2021 to 887 in July 2022. Overall, sale prices still increased 8%. (Source: Fraser Valley Real Estate Board, August, 2022).
In Greater Vancouver the market has changed however, it REMAINS a SELLER’S MARKET (26% sales ratio)! The number of listings rose from 2562 in July 2021 to 2752 in July 2022. Sales decreased from 1254 in July 2021 to 705 in July 2022. Overall, sale prices still increased 8%. (Source: REBGV, August, 2022).
**Curious how your city is performing? Click on the links below**
The Condo & Townhome market is holding stronger than the detached housing market as more people can afford to purchase. The best markets to be selling in now are New West, POCO & N. Van, whereas the best deals for buying are in Mission, Vancouver, W. Van, Surrey & Ladner. Many people are choosing to wait a while longer before they purchase and that is helping to drive up the demand for rentals. Click here to see the attached housing market.
The detached housing market has changed immensely. The best markets to be selling in now are POCO, Port Moody, Burnaby or North Van, whereas the best buys should be in S. Surrey, Mission, W. Vancouver and Eastside Vancouver. Click here to see the detached housing market.