Greater Vancouver Real Estate Market: August 2013


August was a steady month for the Greater Vancouver housing market. Sandra Wyant, president of the Real Estate Board of Greater Vancouver, noted that ”We've seen a healthy amount of demand in the marketplace this summer compared to the number of homes listed for sale. The market today is much stronger than we saw last year and is consistent with our long-term averages for this time of year.”

Sales and Listings

After an unexpected sales surge in July, the Greater Vancouver housing market settled down a bit in August, as it usually does at the height of summer. Sales continued to hover around the 10-year average. In July they beat the average by 1 per cent, but they dropped to 4.6 per cent under in August.

 

 

Throughout Greater Vancouver, 2514 homes sold on the MLS last month. The  statistic you'll see quoted gleefully is the year-over-year increase: sales were up 52.5% from August 2012. Well, that was one of the slowest years since the lull of the late 90s, so its not worth getting excited about. Whats more impressive is that sales were up 3.1% from August 2011, a more representative year.

Meanwhile, sales, new listings and active listings all declined from July. Sales experienced a (typical) drop of 14.7% per cent from 2,946 in July. New listings declined to 4,186, which was 13.8% fewer than the July total. New listings have been dropping steadily since April. Active listings were also down month over month. At the end of August there were 16,027 homes for sale in the Greater Vancouver region.

What's Up, What's Down – At a Glance

 

August 2013 / July 2013

 August 2013 / August 2012

Overall Sales

-14.7%

+52.5%

- Detached

-15.7%

+69%

- Townhome

-8.8%

+48%

- Apartment

-15.9%

+40.4%

New Listings

-13.8%

+3.5%

Current Listings

-3.6%

-8.8%

That puts the sales-to-active-listings ratio at 15.7 per cent, which is considered a market with a healthy balance between supply and demand. It's been consistently over 15 per cent since March of this year. In July it was 17 per cent.

There are 6.3 months of inventory, which means it would take 6.3 months to sell every property now available at the current rate of sales activity. That number also indicates a balance of supply and demand.

Benchmark Price (MLS Home Price Index)

“People entering the market should not confuse stronger sales activity with rising prices,” says Sandra Wyant. ”Home prices have been quite stable and consistent for much of this year.”

Benchmark prices (based on the price of a typical home for its neighbourhood) were within one per cent of where they were in July in almost every area of Greater Vancouver. Overall, prices have increased by 2.3 per cent since the beginning of 2013, but they lag August 2012 prices by 1.3 per cent.

Greater Vancouver MLS Benchmark Prices % Change

 

August 2013

July 2013

August 2012

Detached

$923,700

+0.4%

-2%

Townhome

$457,000

+0.1%

-1.1%

Apartment

$366,100

-0.6%

-1.1%

Financial Post article titled “Why Real Estate Doomsayers Continue to Be Wrong” quotes real estate experts from bear to bull, all remarking on the surprising stability of Canadian markets. Many of them note that buyers and sellers are ignoring dire predictions in the media and just going ahead and doing business.

A healthy Canadian economy and signs of renewal in the US economy contribute to that optimism. But there's a downside to the good economic news.

Five-year mortgage rates have risen from under 3 per cent closer to 4 per cent since June. This is not because of any change in the Bank of Canada interest rates. Exactly three years ago it set its trendsetting overnight interest rate at 1 per cent, and once again the bank let it ride.

The current mortgage rate hikes are a  response to bond yields and strong economic indicators. They are the work of the banks and other lenders, and they respond to news on those fronts.

Considering that Greater Vancouver housing is the most expensive in Canada, continued low rates are a vital concern for anyone who'll need a new or renewed mortgage in the next few months. The extra percentage point could drive some house hunters toward less-expensive areas or housing types, and it could cause some to back away altogether.

But despite that one issue, the Greater Vancouver real estate market is acting remarkably stable.

See detailed Real Estate Board of Greater Vancouver stats for August