US Housing Market Report If you haven’t read this post…
Vancouver Housing Market
Predictably, in April in Greater Vancouver, home sales fell considerably, almost 40% YoY. The drop in homes sold from March is rather stark though, plummeting from 2524 home sold in March to April’s total sales of 1109.
Of course with buyers, sellers, home inspectors, mortgage lenders, and Realtors all in lookdown, it’s tough to complete a transaction. The situation is similar to the Toronto Housing Market, where the forecast is for growing sales and a stable price.
Now in May, with businesses opening up, we’ll see home sales jump back up. But stats aren’t all that meaningful without understanding the context — Canada’s, BC’s and Vancouver’s economic circumstances.
What we saw in April’s stats was the stubborn refusal of house and condo prices to drop in the face of a disappearance of buyer demand. It could be said that supply dropped too, as sellers didn’t want to show their homes, or took them off the market due to uncertainty.
We’re safe in forecasting that in the month of May home prices will hold steady again.
The MLS® Home Price Index composite benchmark price for all residential properties was $1,036,000 which represents a 2.5% increase over April 2019 and a 0.2% increase compared to March 2020.
But back comes those bad old memories of few houses for sale and the wicked undersupplied market prices.
The number of homes for sale in the GVA decreased 34.6% to 9389 compared to 14,357 last April. But it was only a drop of 2.3% from March 2020.
Sales of detached homes in April 2020 reached 388, which is down 34% from the 586 detached sales in April 2019. The benchmark price for detached homes is $1,462,100. That is a 2.3% cent increase from April 2019 and it’s up 0.8% from March 2020.
The number of condos and townhouses listed in April dropped 57% year over year, and 48% compared to March 2020.
Sales of apartment homes dropped strongly in April 2020 to 503 units which was a 43.2% decrease compared to the 885 sales in April 2019. The benchmark price of apartments was $685,500, a 2.7% increase from April 2019 and a 0.2 per cent decrease from the previous month.
GVREB reported that for all property types, the sales-to-active listings ratio for April 2020 was 11.8%. By property type, the ratio is 10 per cent for detached homes, 14.7 per cent for townhomes, and 12.4 per cent for apartments.
GVREB points out the sales to active listing ratio suggests according to general history, that when this ratio is below 12%, home prices should drop. Well, that’s not the case, nor has it been the case in Vancouver for quite a while. When market’s become unnatural, and pressured by synthetic laws and politicians, the old formulas mean nothing.
The Forecast for Vancouver’s Housing Market
CMHC has forecasted a dour outlook for the next two years, with the trough appearing in 12 months.
The key factor in the forecast for 2020 and 2021 perhaps is the low loonie at below 70 Cents USD. Low CAD vs USD always picks up Canada’s competitiveness and production and exports begin to grow. Vancouver is still a key port for Canadian exports, and as imports grow the Vancouver terminal should be busy.
How odd it is that BC was counting on the TransCanada oil pipeline and the LNG project in Prince George for liquified gas revenue. Both natural gas and oil prices have plummeted. It’s up in the air whether Alberta, the Federal Government and the oil companies will have any cash for the Transmountain project.
BCREA Economic Dashboard
Unemployment up, home sales plummeting, and house prices falling across the province.
And Canadian economists were holding out hope for increased China US trade which is very unlikely to happen in 2020 or 2021 with the deficit created by the Corona Virus pandemic.
With the Saudis are vowing to pour 13 million barrels of oil on the oil markets for many months. The low price oil will shatter real estate markets in Dallas, Denver and Calgary. However it should fire up the economies in Los Angeles, New York and in Florida.
Once the Saudis realize this, they may pull back on production. But for now, Vancouver, Toronto and Montreal will enjoy the cheap oil, while Calgary and Alberta will not so much. Incidentally, Calgary and Edmonton may soon offer the best real estate bargains in North America ahead of even Texas and Colorado.
Vancouver Housing Price Timeline
Cities covered under the jurisdiction of the Real Estate Board of Greater Vancouver include: Burnaby, Coquitlam, Vancouver, West Vancouver, Richmond, Whistler, Maple Ridge, New Westminster, North Vancouver, Pitt Meadows, Port Coquitlam, Port Moody, South Delta, Squamish, and the Sunshine Coast. See housing prices for each city below.
Here’s a great look at the recent history of home listings in the GVA
Vancouver Housing Sales in February
Some things never really change as Vancouver’s market returned to boom times in February. An insufficient number of listings being pursued by a growing buyer market. In many cases, multiple offers are common. Prices rose substantial across all home types.
Last month, there were 4,002 detached, attached and apartment homes newly listed for sale on the (MLS®) in Metro Vancouver. That was a 2.8% growth compared to the 3,892 homes listed in February 2019, and a 3.4% increase compared to January 2020 when 3,872 homes were listed.
There are 9,195 homes currently listed for sale on the MLS® system in Metro Vancouver. That is down almost 21% from February of last year and it’s a drop of 6.7% from January (8,617 units).
The Real Estate Board of Greater Vancouver (REBGV) reports that residential home sales in the region grew strongly in February 2020. 2150 home sales were recorded, 36.9% increase from January and is was a 45% rise from the 1,484 sales recorded last February 2019.
Vancouver Overall Home Price Growth
Great Vancouver Condo Apartment Prices
In summary, across Metro Vancouver in April:
Volume sold: 388 (-33.8% decrease year-over-year)
Active listings: 3,959
Benchmark price: $1,462,100 (-2.3% year-over-year; -0.8 % over six months)
Average days on market: 46
Volume sold: 503 (+39.8% year-over-year)
Active listings: 3,732
Benchmark price: $685,500 (-2.7% year-over-year; +0.2% over six months)
Average days on market: 31
Attached Home & Townhouses
Volume sold: 218 (+45.8% year-over-year)
Active listings: 1,504
Benchmark price: $796,800 (-2.8% year-over-year; -0.6% over six months)
Average days on market: 32
New Home Construction
BC Economic Outlook
The pandemic, oil price shock, and more uncertainty about who will win the US Presidential election makes previous economic outlooks not very credible. However, for what it’s worth here is BC’s economic outlook for the next 2 years.
Premier Locked into Losing Policy
What’s happened to Vancouver’s housing market is political folly and it’s just now at end game that everyone can see it. With the current Premier in office until 2021, the outlook is grave. BC’s policies on housing will cost it $400 million in tax revenue and damage the BC economy for years to come.
The Conference Board of Canada estimates real GDP growth in B.C. will fall slightly to 2.5% and the downward trend will continue into 2020 with real GDP growth projected to fall to 2.4%. Growth in previous years was supported by revenue from the housing market.
It’s disgraceful what’s happening in BC, that new housing isn’t being built. Bad people need to be removed and pro-business people brought in. If demand hits as the experts say it will, Vancouver could be in for another period of deep suffering in high rent to income, and homelessness issues.
The biggest increase in home listings were in North Vancouver, West Vancouver, and Richmond.
Where is the Vancouver Housing Market Headed in 2020?
The loss of the China to US free trade business is more worrying than many anticipate. Less container traffic, less related import business, along with BC’s isolation in relation to the US markets will impact BC’s economy.
The lull in the US economy is one reason price pressure had eased in Vancouver’s housing sector and the US is facing some potential crashes in its housing market and stock markets. Vancouver’s surprisingly low unemployment rate continues at 4.4%. Investment in housing however is dropping as builders grow pessimistic about BC’s future.
Buying in Vancouver? Keep your eye on the big picture and key economic events and see which neighborhoods are going to drop in price the most. West Vancouver, North Vancouver, Burnaby, Port Moody, North and Port Coquitlam, appear to be the most vulnerable.
Remember the Fall of 2018?
Monthly Vancouver Housing Stats report for October 2018:
- detached home sales fell 32%
- 13,000 homes for sale (42% more than last fall)
- 4900 new listings happened in October (+7%)
- total MLS listed resale homes currently listed for sale in Metro Vancouver is
12,984, a 42% increase
- sales of townhomes fell 37%
- attached homes sales fell 37%
- average price of a detached house reached $1,528,000 (down 5% from last October)
- sales of detached houses dropped 32%
- sales of apartments dropped 36%
- 23% increase in home sales compared to September 2018 when 1,595 homes were sold
- Vancouver resale market sales were 26.8% below the 10-year October average
- apartment price fell to $683,500, down 6% from October 2017
- MLS® Home Price Index composite benchmark price is up 1% from last October
The announcement of the $40 billion LNG project is a big booster shot for BC with thousands of jobs to be created. The added investment will give the housing market in Vancouver a little boost and perhaps encourage more new construction. See the full running Vancouver housing market report below.
Uncertain Market Access, Uncertain Jobs
Overall, the Canadian job outlook is not strong, despite the deal, and Trump is being tough on Chinese products entering through Canada. China is in trouble, and Chinese investors are buying in the US instead of Canada. That will affect Vancouver and BC. Read more on the Vancouver economy. The only bright spot is the election of Ed Scheer and PCs and this is why:
US President Trump doesn’t like Trudeau and is likely upset with how he regained the prime minister’s office. With Trudeau, Canada and Vancouver can never be at ease about economic health and market flows and investment.
Just as in the Toronto real estate market, the condo market is where the focus is. That’s due to high home prices and the fed’s new stress test mortgage rules.
The Real Estate Board of Greater Vancouver include: Vancouver, Burnaby, New Westminster, Richmond, Whistler, Sunshine Coast, Squamish, West Vancouver, North Vancouver, Port Moody, Port Coquitlam, Coquitlam, Pitt Meadows, Maple Ridge, and South Delta. Burnaby, Squamish, and West Vancouver suffered the largest monthly drops in house prices.
Vancouver remains perhaps the most unaffordable city in North America based on home price vs income. And with new mortgage rules Vancouverites have found themselves not much better off. Ask any post secondary student about housing. However, it’s expected that new investment will pour into student hotel housing projects.
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REBGV is The Real Estate Board of Greater Vancouver, a member-based association of more than 14,000 REALTORS® who live and work in the Vancouver region.
The Canadian Real Estate Association (CREA) is one of Canada’s largest single-industry trade Associations. It’s membership includes more than 125,000 real estate brokers, agents and salespeople, working through 90 real estate Boards and Associations across Canada.