Detached properties across Greater Vancouver have risen over 14% in the past 12 months. January began 2021 with an average sales price of $1.814 Million. Just 1% below the historical high of $1.830 achieved during May 2017.

Technically speaking the 14% increase uplifted values from the middle threshold to the peak. During 2016 – 2017 multiple attempts to increase home values beyond 1.830M had failed. Can the current market conditions hold tight to surpass the our previous highs? Possibly, but very little room for error. Inventory would have to remain at abysmal levels, interest rates remain around 1%, stimulus needs to keep flowing and the sales totals have to remain or improve. Any wavering of inventory, interests rates, stimulus, or sales and the market could reverse the current trajectory.

For comparison sake you will notice in the chart below the dramatic difference between the supply and demand metrics of 2016-2017 and todays market environment.

Other analysts tout the how strong the demand was during 2020. The supply & demand chart does not corroborate their claims. The less than average sales totals was enough to completely overwhelm the anemic inventory.

During the initial market peak during 2016, sales which translates into demand, were through the roof and recorded a 2.805 data point while the supply was worn down to a -1.160 data point. The supply demand spread during 2016 was an impressive 3.965. During January 2021, the demand data point comes in at -0.7625 and the supply sits at -2.088. resulting in a 1.827 spread between the two market metrics. This leads to a straw which broke the camels back scenario, if the inventory returns, it is unlikely the demand will be able to continue to out pace the supply, which would have a deleterious effect on sale prices.

As a result of the increase to the average home sales price, sellers could return with gusto during 2021. With multiple offers prevalent again, owners who put selling their property on the back burner during 2020 will likely revisit the notion of listing. Owners looking to downsize have an amazing opportunity as the average detached home now sells for over 2.5 times more than the average condo. This is the first instance in 4 years where the divergence of the average detached property has reached over two and a half times the value of the average condo.

For an example longtime owner of a Vancouver East home, can sell their property on average for $1.827 Million. The average 1 bedroom condo in West End is selling for $533,694. That implies the sale of a single detached property would enable you to buy 3.4 West End 1 bedroom condos.

What makes this example intriguing is if one chose to downsize they would be selling their East Vancouver home at the peak of the Vancouver East market’s cycle. The purchase of the West End condo is currently selling at a 21% discount compared to West End market cycle peak prices. The 21% discount on each 1 Bedroom condo is akin to savings of $140,000 per purchase resulting in over $420,000 savings on the 3 condo properties. The $140,000 savings per purchase is nice but also the timing of the Vancouver East property would net you over $250,000 additional proceeds compared to January 2020. Add it all up and one could have netted $670,000 in gains, through selling at market peaks and purchasing during the market lows.

Just one example of the many opportunities that exist for home owners looking to downsize. Get in touch with Eitel Insights for your individual actionable intelligence market analysis.

Inventory through January broke above 3000, which is the lowest data point on record. 2020 finished the year down 28% below the yearly historical precedent. January 2021 begin the year with 37% less inventory compared to 16 preceding January data points. That said the aggressive downtrend (red line) which began in 2019 will likely be broken during 2021. If inventory can amass another 1000 active listings to break the 4000 level in the next few months, the market could become very interesting by the summer.

Inventory through January broke above 3000, which is the lowest data point on record. 2020 finished the year down 28% below the yearly historical precedent. January 2021 begin the year with 37% less inventory compared to 16 preceding January data points. That said the aggressive downtrend (red line) which began in 2019 will likely be broken during 2021. If inventory can amass another 1000 active listings to break the 4000 level in the next few months, the market could become very interesting by the summer.

Sales dipped back into the sales channel that held the market during 2017- 2019. The January sales were 751, the highest total since 2016 when sales totalled 1,049. Compared to the preceding January average sales began the year up 19%.

Individual markets vary, contact Eitel Insights to gain actionable intelligence about your neighbourhood.