So this is what a soft landing looks like. Sales are still well below the 10-year average as we move out of the main home-selling season, but they're higher than last year at this time... and that hasn't happened in a while.
New listings are down from last month, while active listings have stayed basically the same. The sales-to-active-listings ratio remains in balanced territory. Benchmark prices are up marginally in all but six of the Real Estate Board of Greater Vancouver's areas.
And according to the latest Conference Board of Canada economic forecast, the balanced conditions we've been experiencing since March indicate that house prices should remain stable for at least the next year.
The message seems to be: "Boring, but get used to it."
If you're looking for excitement, better check out mortgage rates, which took an unexpected upswing in June because of good economic news and bond yields. This may nudge some buyers into high gear as they try to protect themselves from higher mortgage rates by getting rate holds and trying to find something to buy before the hold agreements expire.
Sales and Listings
In Greater Vancouver, 2,642 homes sold on the MLS last month, up by 11.9 per cent from 2,642 sales in June of 2012. This is the first time in two years that there's been a substantial year-over-year increase.
Home sales were down by 8.3 per cent from May's total of 2,882, but that's typical of the seasonal sales trend. April or May tend to be the highest months of the year for home sales, as you can see from the chart.
Active listings were about the same as in May: 17,289 properties in June compared to 17,222 the month before.
Divide those active listings by the sales and you get 6.5 months of inventory-the average time it takes to sell a property. That's right at the border between a balanced and a buyer's market.
New listings have been declining month-over-month for a full year. A consistent drop in new properties coming on stream-along with a gradual rise in sales this year-has taken the sales-to-active-listings ratio from a buyer's market to a balanced market, where it's been since March.
What's Up, What's Down – At a Glance
June 2013 / May 2013
June 2013 / June 2012
"As the term suggests, a balanced market means that many of the key housing market indicators, such as price, are stable and conditions therefore don't tilt in favour of buyers or sellers," says REBGV president Sandra Wyant. "If you plan to enter the market today, identify your needs, consult your REALTOR and work to build a 'win-win' scenario with the people on the other side of the sale."
Benchmark Price (MLS Home Price Index)
June's benchmark prices are down by 3% from a year ago, but they've risen in most REBGV markets since the start of 2013, and they tend to be within one percentage point up or down from May prices. Benchmark prices are based on the price of a typical home for its neighbourhood for each housing type.
This was the most expensive condo in Vancouver. It sold in June for $25 million.
An interesting development is the return of high-end buyers.
In a national study of luxury home sales, Sotheby's International Realty Canada found that the local high-end residential real estate market is entering the second half of 2013 with "positive momentum."
The Metro region saw 1,239 sales of properties listed at over $1 million in the first half of this year. This is a 57 per cent increase over the second half of 2012, but a 6 per cent decline from the first six months of 2012.
Of course in REBGV territory, that $1 million mark doesn't necessarily mean luxury. In the last assessment roll, 54 per cent of all single detached homes in Vancouver proper were at or above $1 million. Basically, that price now buys a decent detached house anywhere in Vancouver, the North Shore, Richmond or western Burnaby. You don't hit anything that could be truly called high end until you get up over $2 million. Wait a minute! $2.070,200 is the benchmark price for a house in Vancouver's west side... Anyway, there have been more buyers in that range.
The biggest increase was seen in sales of homes with list prices over $2 million. Sales of residential properties between $2 million and $4 million increased by 78 per cent, and home sales over $4 million went up by almost 70 per cent.
According to the Sotheby's report, high-end home sales by type from January to June of this year were:
Condominiums: 131 units sold-an increase of 26 per cent over the second half of 2012
Attached homes: 102 units-an increase of 36 per cent
Single-family homes: 528 units-an increase of 56 per cent
The Sotheby's study found that 60 per cent of $1 million-plus buyers were locals, while 40 per cent were international buyers. The latter were primarily from China, but include a "recent surge" in buyers from Iran and the United States.
Buying at the high end pays off, statistics show. The typical increase in value in the Lower Mainland's three most expensive housing markets over the past five years was 27 per cent, compared to 11 per cent for the market as a whole.
Here's the video wrap-up of June's house prices and sales with REBGV president-elect Ray Harris.