What Happened in Vancouver's Real Estate Market in 2011? What I Predict for 2012....
A year in Vancouver real estate that had been predicted by the media and many economists to be slow and filled with doom and gloom, once again, prevailed and proved the sceptics wrong.
There were several reasons that contributed to the successful market we experienced in 2011, here's a few key drivers, in my opinion:
1) Low Interest Rates - owning in many cases actually proved to be less $$ than renting.. especially in the Downtown & East Side condo market.
2) A Growing Population - Immigration from other parts of Canada and BC - Greater Vancouver's population grows on average by 1000 people a week
3) A Baby Boom?! - I helped numerous couples move from condos to houses, every couple that upsizes results in a minimum of 2 sales.
4) An Aging Population - Downsizers! Kids are gone, yard is too big, time for a dream CONDO or RANCHER.
5) Overseas Buyers - yes, it's true, they do contribute to our positive market, especially in the Downtown Vancouver, Westside, Burnaby and Richmond markets.
6) We live in an absolutely incredible place. There is a huge demand to live in Vancouver and there is only so much dirt available. The detached home market had an amazing year and markets within 20 minutes of Downtown Vancouver thrived, as people, including investors, saw value in LAND and rushed to scoop it up!
My predictions for 2012:
A balanced market with minimal to moderate price increases in the areas I specialize in - Downtown Vancouver, East Vancouver, West Side, North Vancouver, West Vancouver and Burnaby.
I am working with more buyers than usual for this early in the year and expect January - March to slightly favour sellers over buyers (based on a lack of supply right now). After March, I expect to see a balanced market for the remainder of the year.
As long as interest rates remain reasonable and the world economy doesn't completely self destruct, I see no reason for our market to slow much. I also don't expect to see prices drop, sorry for those of you who were hoping for this. Some words of advice I heed myself "don't wait to buy real estate, buy real estate and wait". Especially in Vancouver.
One quick note on Vancouver Homeowner debt loads and Vancouver's affordability, or lack thereof. Sorry, but I have to mention this as it's been driving me nuts. Sure, our home prices look completely out of whack in terms of what Vancouverites make for annual income ON THE SURFACE. But PLEASE, analyse all the information being presented by the media before you panic and move to Alberta. There is a factor that is not being taken into account by our housing affordability reports and it affects anywhere from 30-40% of Vancouver homeowners (approx, could be more). Here it is....... INCOME SUITES IN DETACHED HOMES
This income is not taken into account in these reports. In the markets I work the average 2 bedroom suite rents for $1400 a month, that's an additional $16,800 a year of income and covers almost $300,000 of a mortgage payment (based on today's rates). Once suite income is included, all of a sudden our market gets a whole lot more affordable.
In summary, I strongly suggest you talk to a Realtor about the market if you are thinking of buying or selling a home in 2012. We have different views and opinions on Vancouver's real estate market than many economists and media outlets. We have the facts and the true data to back up what we tell you.
I live, eat, and breathe this business every single day. I feel changes far before the media ever picks up on them and advise my clients accordingly, that way they are always ahead of the game.
Wishing you a happy, healthy and successful 2012.
Here's to another positive, prosporous & steady year in Vancouver Real Estate.
Century 21 In Town Realty