The theory of supply and demand usually assumes that markets are perfectly competitive. This implies that there are many buyers and sellers in the market and none of them have the capacity to significantly influence prices. Quite often, a sophisticated analysis is required to understand the demand-supply equation of a good model. However, the theory works well in situations meeting these assumptions.
A measurement closely watched by the real estate industry is known as the sales-to-active-listings ratio. This ratio is important to any individual in the real estate market because it defines if the market is in favour of the buyer or seller. It is deemed a buyers’ market below 15 per cent and a seller’s market above 20 per cent in the Vancouver region. B.C. real estate agents consider it a ‘balanced market’ when the ratio ranges from 15 to 20 per cent. This percentage is found by taking the total number of sales and dividing it by the total number of listings.
This is the sales-to-active-listings stat sheet for August 2013, for all attached units within the downtown core. As seen, the majority of properties under the one million price range are holding a high sales-to-active-listings ratio. This defines the current market as a clear sellers’ market.
High demand, low inventory and a slight increase in mortgage rates have influenced today's market status.
The number of properties sold on the Multiple Listing Service reached 2,514 in August, up from 1,689 sales in the same month a year earlier, the Real Estate Board of Greater Vancouver said Wednesday. The increased activity marks the fourth consecutive month that Greater Vancouver has experienced a year-over-year gain in monthly sales, following a 19-month slump in volume.
For more information on our current market or any property details, please feel free to contact me.