In early September we asked 550 Lower Mainland residents if they thought this is a good time to sell a home. The result: 58 per cent No, and only 34 per cent Yes. These people weren't real estate experts, just folks who own or rent here. But they certainly seem to have anticipated the latest Real Estate Board of Greater Vancouver stats.
MLS® Sales and Listings
Here's one of the most telling: "September sales were 41.6 per cent below the 10-year September sales average of 2,597."
A total of 1,516 Greater Vancouver homes sold last month. For reference, that's 4.3 per cent fewer sales than in September 2008, during the last big market correction. Compared to last September, sales were down by 32.5 per cent.
Nonetheless, September generally brings a surge of new listings, and this year was no exception. Despite the fact that home sales have been declining since April, optimistic owners piled on 31.6 per cent more new listings after holding off through the summer. (Interestingly, Richmond had the fewest new listings, and that's where the most survey respondents -- 73.5 per cent -- said it's not a good time to sell.)
With the influx of new listings there's now 12 months of inventory on the Greater Vancouver real estate market, compared to 10.6 months in August. If buyers sit back and wait to see if prices plummet, that number should rise. And it looks like that's exactly what buyers are doing. As a rule, sales go up in September after the summer lull. That didn't happen this September.
What's Up, What's Down - At a Glance Sept 2012/August 2012 Sept 2012/Sept 2011 Overall Sales -8.1% -32.5% - Detached -4.7% -37.9% - Townhome -18.0% -33.0 % - Apartment -6.8% -26.7% New Listings +31.6% -6.3% Current Listings +4.5% +14.1%
So are the dismal sales being reflected in prices yet?
Benchmark Price (MLS® Home Price Index)
Well, yes and no. Benchmark prices are starting to move down, but we're still in the lag time between when the sales drop and when sellers realize they'll have to drop their prices or their home will sit on the market for a year.
The overall benchmark price has gone down 2.3 per cent over the last three months, and now it's more or less even with benchmark prices in January of this year.
What went wa-a-a-y up has come down accordingly. Vancouver West, home of the $2 million bungalow, has seen benchmark prices decline by 5.2 per cent since June and 6.3 per cent since March. It's also seen consistent drops in townhouse and condo prices. On the other hand, Maple Ridge, Squamish and the Sunshine Coast, the least expensive areas in the REBGV's domain, have remained stable. Check the MLS® Home Price Index pages in the REBGV's detailed stats for a region-by-region breakdown.
Back to our survey -- when we asked people if the coming three months are a good time to buy, 50 per cent said Yes and 38 per cent said No. But when we asked why, the biggest reason given on both sides was that house prices are going to fall. The Yes side think they'll see a big drop within three months and the No side think it's worth waiting longer to see how low house prices will go.
The thing to remember is that prices in some areas of Greater Vancouver are so off-the-charts compared to the rest of Canada, and this market has been experiencing such an unprecedented upward trend since 2001, that something had to give.
A real estate market is made up of people, after all, and when enough of them expect house prices to fall, a new cycle begins. Interesting times ahead.
Greater Vancouver Benchmark Prices % Change Sept 2012 August 2012 Sept 2011 Detached $935,600 -0.7% -0.5% Townhome $458,600 -0.8% -2.7% Apartment $368,600 -0.4% -0.7%
You can read the REBGV full stats package here.
You can read more about our REW.ca Consumer Survey here.
