The Inconvenient Truth about Greater Vancouver Real Estate

Posted by Dane Eitel

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The October data has come in and has been touted as a signal of strength from the Real Estate Board and optimistic analysts. The truth in the matter is prices are down almost 100 Thousand from October 2018. Over 300 Thousand from the peak. In addition the detached market produced an average sales price of $1,533,135, signaling no pricing momentum over the past quarter. Simultaneously falling behind the 10 year uptrend. What this means to us is the market is holding on for dear life. Eitel Insights anticipates seeing another drop in prices for the first quarter of 2020, likely testing the 1.4 million prices point on an average sales basis.

If you go back and look at the Real Estate Board of Greater Vancouver outlooks over the past few years while the market has been falling. Each outlook is anticipated for the upcoming year to be in recovery mode. Not to mention they never caught any market top. Eventually this forecast will be correct just not in 2020. The board has never once anticipated anywhere near a 20% correction, Eitel Insights on the other hand absolutely predicted this outcome.

As we have always advised not all markets are created equal, some markets inside of Greater Vancouver have dropped 30%+ and are close to their technical bottom. While other markets still have much further to go and will bottom in 2021. The markets that are nearing their bottoms will hover at the low end of the market cycle. The lagging markets will continue their evolution lower. With no increase to the leading markets, the Greater Vancouver Average sales price will be forced lower as well.

The sales numbers have rebounded from paltry levels however no where near recovery territory. The market is experiencing is need based buying. What the analysts are missing out on is the purchasing activity is largely tied to the mortgage stress test mitigation that is occurring in many markets across Greater Vancouver.  Prices have hovered around 16% – 18% correction over the past quarter.

Unfortunately there hasn’t been too much newly listed inventory over the past quarter causing purchaser to battle over the newly listed properties that are in line with the actual market trajectory, lower. In 2020 listings will pile back onto the market, unfortunately the buyers that had a need, will have already purchased. The purchasers who have held back will be rewarded. Investable markets are still rare but there are a few gems out there that Eitel Insights can guide you to.

Noticeable is the lack of growth in the inventory market, expect that to change again in the early part of 2020. When prices decrease back to the 1.4 million price threshold that will have eroded any equity gains over the previous 5 years. Signalling a tough time during mortgage renewal conversations. Not only this factor will start to become prevalent but the market has been holding off with the optimistic hope that 2020 will be better. Now that there has been a blip of buyer activity, you will see a rush of new listings come to the market in 2020.

Sellers are advised to take advantage of the fall market before the spring market is yet another disappointment. It is very difficult for any market to go up or even base when there is a market upcoming with need based sellers. Just wait you’ll see what we mean.

Money saved is money earned. Since our initial forecast that the Greater Vancouver Market had indeed topped out and prices would begin to trend lower. The market has realized a $360,000 price loss. For an individual report please visit