Many micro-markets at play, wildly varying from buyer’s to balanced to seller’s markets, even within housing types and neighbourhoods
In my role as editor of this website and host of the Real Estate Therapist radio show, one of the questions I get asked a lot these days is, “So, do you think the Vancouver real estate market is cooling, or just as strong as ever?”
To which I infuriatingly reply, “Yes.”
Because the truth is, the answer is yes, to both. It just depends what sub-market you’re talking about.
People have a tendency to think of the Greater Vancouver real estate market as one single entity. I’m frequently guilty of presenting it as such myself, writing articles about the big, headline-grabbing figures from the latest board stats, like this week’s.
In that article, you’ll see that home sales last month were way up from the previous month, but way down from a year ago, so what does that even mean?
The truth is, those numbers are just averages, or medians, or benchmarks. Sure, they can be a useful guide as to trends, one way or another. But as far as you, the Vancouver home buyer or seller, are concerned, those over-arching figures matter not one bit.
That’s especially true right now, as our many micro-markets are doing all kinds of wildly varying things. A $5 million detached house on the West Side, for example, is in a totally different market than a $500,000 condo right now – even one also on the West Side.
My most recent guest on the Real Estate Therapist show, top-producing East Vancouver REALTOR® Keith Roy, explains what’s going on in the different micro-markets brilliantly. If you’re interested, check out the interview here(and scroll to the 28-minute mark).
“Everybody can point to an example that supports their case, whether they are saying that the market is crashing or going crazy,” Roy tells me. “And everybody’s right.”
To summarize, the $3 million-plus detached home market on Vancouver’s West Side has a large supply compared with current sales. That means that it has flipped from year-ago levels to being in a strong buyer’s market, with prices coming down correspondingly.
Now, still looking at detached houses, and still on the West Side, but priced under $3 million, and the supply is much more level compared with demand, so it’s now a balanced market.
On the East Side, detached houses of $2-3 million are in a buyers’ market, $1.5 to $2 million houses are in a balanced market and $1-1.5 million houses are in a seller’s market. All three market scenarios, all within one area and one housing type.
Then look at Vancouver condos, which from $500K to $1 million are in a strong seller’s market with limited supply – and under $500K there are so few available that there are more being sold than coming on the market. There are simply not enough condos being sold for the demand – which of course is leading to the kind of bidding war frenzy that we were seeing in the detached house market last year.
The moral of my story? Don’t look at big-number headlines and think that the trend suggested will necessarily apply to your own home buying or selling situation. You can have one person or media outlet telling you that the market is cooling, but if you took that to mean your $500K condo budget is going to get you more condo than a year ago, you’d be sorely mistaken.