Welcome back. Just going through some numbers and I thought - with all the press, questions, comments and client inquiries, it would be interesting to see just where we actually stand regarding the Vancouver Real Estate market - with just over a month to go. Most certainly I am hearing terms like "slow down", "balanced", "quiet", "new normal" - almost daily.
Attached sales for the year - up to the date of this posting - are showing signs of that sensed reduction, in activity. Note here - activity - not so much on the pricing front. The West End has posted 427 sales for the year to this point. In 2011 for the same period - sales were 582 units. So yes we are seeing a reduction in activity by almost 25%. This rate is also holding fast for the downtown core area and Yaletown - within a couple of digits. Coal Harbour - with its higher end and waterfront homes - is posting about a 40% decline in activity between this year and 2011.
Looking back at 2007 [before the world was shaken by the financial crisis which resulted in the stark realization of just how interconnected we really are] it holds the strongest market numbers in the last 5 years. In Coal Harbour there were 400 sales in 2007 - coming off a market on fire and new waterfront homes completing construction. Foreign investment was a major factor in that area. 2008 saw a dramatic drop to 233 sales but as those in the game looked for other areas to invest their earnings - real estate became a go-to investment vehicle - for those who lost faith and trust in the stock market. The following year, total sales increased to 348 units in the area. Not bad considering the doom that was forecast even after a slight recovery.
The West End showed pretty much the same trend. Sales in 2007 were 700 - with a drop to 428 units in 2008. But a cough and a momentary "held breath" and it bounced back to 716 sales in 2009. [Both of these recoveries were no doubt influenced by historic interest rate reductions.] This year we are down to the 2008 level again.
Why? What is holding back the current real estate market.
Many theories can be found but talking to both buyer and seller - it can be condensed to a couple of reasons. Buyers - to keep it simple - are nervous. They are still out there - believe me. And if a hint of a mortgage rate increase hits the horizon - then I suspect the streets will get quite active again. But with the current activity levels - many believe values have to follow - sooner or later. Catch here is - this will affect only those that have to sell.
Sellers, on the other hand, are either accepting offers - reflecting the current market and moving on to new homes or new locations - or are happy to sit and see what the market will produce. Of course the hardest pill to swallow is - a current list price for their home reflecting 5-15% less than what the neighbours got for theirs in 2011 - oh what a difference a year makes.
On many fronts its a waiting game. But for some this "new normal" - if and when it settles out - is not worth the wait. Life goes on. Families either grow or the nest starts to empty. Job situations change - quality of life and health for those in the "boomer" years (and those right behind them !) all play a part in the market. Its give and take. The main point here is - never wait until you reach a point where you have to give - or take.
Contact me anytime for a chat about the market. Straight talk. Straight answers.