HOUSING MARKET UPDATE
Balanced increases create stable marketplace
The Greater Vancouver housing market has enjoyed four consecutive months of balanced market conditions. This comes on the heels of a frenetic “seller’s” market period to close 2009, which saw inventory consumed at a near record pace.
Activity is strong in today’s market, but increases are occurring evenly between listings and sales, which has kept the market in a balanced state.
A housing market enters “balanced” territory when demand, represented by sales activity, reaches an equilibrium range with the supply of homes for sale. Most analysts believe the market reaches this equilibrium range when the sales-to-active listings ratio is between 18 and 22 per cent for a sustained period.
The Greater Vancouver market entered this range in January 2010 and has maintained this balance to present day.
“We’re in the midst of another strong spring season thanks to high levels of activity on both the buyer and seller side of our market,” Jake Moldowan, Board president said. “The number of homes coming on the market has increased significantly in recent months, which is providing a healthy level of choice for those looking to buy during this busy period.”
The strength of demand in the market since the economic downturn has resulted in rising home prices. In the last 12 months, increases in home values have eliminated the approximately 15 per cent decline seen during the recession and propelled home prices in the region to new heights.
The MLSLink® Housing Price Index (HPI) benchmark price for a residential property in Greater Vancouver today is $593,419, an increase of 4.4 per cent from the pre-recession peak of $568,411in May 2008.
Last month, the average price of a detached home in Greater Vancouver surpassed $1 million for the first time in the Board’s history. This created significant discussion about affordability in the region.
“While home values have now eclipsed the previous peaks, a diverse range of available properties and low interest rates continue to present opportunities for first-time and move-up buyers,” Moldowan said. “The product mix today is as varied as it has ever been in our market.”
The graph pictured here shows the distribution of recent home sales in the region by price point. Of all residential properties purchased in Greater Vancouver in the first quarter of 2010, 48 per cent sold for less than $500,000 and just 14 per cent exceeded the $1 million mark.
Today’s market, at all price points, is operating at a rapid pace. In April, it took members, on average, 31 days to sell a home in Greater Vancouver, which is one day less than the March 2010 average, but 29 days faster than the 60-day average in April 2009.