One month into 2017 and it's looking like a continuation of the record low supply numbers seen in the last half of 2016. Below are some excerpts from the full SlideShare report.
Last month I wrote a blog post that guaranteed double-digit price growth for January house prices on a year-over-year basis. It was easy to guarantee because the price run-up four 416 Houses over the course of 2016 was $207K, as you can see below. That meant, unless the prices dropped $110K from December to January, double-digit gains were going to happen. That seemed extremely unlikely to me since the previous 5 Januaries all increased over December, and this market is hotter. As it turned out, the January YoY increase was 27.1%.
Condo prices were also up over December (+$9K) and last January (+$63K, or 15%). As you'll see in a minute, it was the short supply driving these increases.
Demand for re-sale Houses, measured by the number of sales transactions in the month, has been fairly consistent in the last 6 years, and this January it was down 3% off the average of the previous 5 years. Demand for re-sale Condos has been increasing each January, and this year, sales were +26.0% over last year and +41% over the 5-year average. So you've got all those extra buyers, but check out how low the supply is. The continuing story is you've got the more shoppers looking at way less units available for sale. That's translating into more offers on those available properties, which is driving up the prices. It also means the units "fly off the shelves" more quickly.
Below are the active House listings in the at the end of each month in the last 6 years. You can see December and January were well below 1,000 Houses available. December and January are the only two months below 1,000 in the 22 years of available TREB data. The 679 units this January are down 42% over last year.
The drop in Condos available for sale was even steeper, down 56% from January of last year. You will notice each month in 2016 had a lower re-sale Condo supply than the equivalent month in 2015, and by the last several months of the year you were seeing 2,000 units less. Last year there were actually 18% more Condos sold despite an average of over 1,400 less active listings each month. So it makes sense there is upwards pressure on prices.
WHAT SHOULD WE EXPECT IN FEBRUARY
Anecdotally, I'm seeing no slowdown in demand, but at least an uptick in supply. I'm expecting a further increase in prices in February, especially for houses. As you see in the picture below, house prices have risen sharply in February in recent years. I did further research, and the last 20 Februaries have all seen increases, to the tune of an average increase of 9.3% over January. With the current average 416 house price at $1,218K, that would mean an increase of $113K this month if the pattern repeats itself. Read my blog post on this "February bump" here.
As per usual, these are just excerpts from the . Visit to see how Condo months of inventory (MOI) is 3 times less than last year, and how they are selling over two weeks faster on average versus the same time last year. The extreme seller's markets for Houses and Condos continue...