It’s been a wild ride.
It would seem interest rates and inflation have made for a bit of a roller coaster ride in real estate with numbers showing we’re likely at the bottom of this rough ride we’ve been on over the last 2 years. And while people will line up for Disney’s roller coaster, buyers and sellers chose to avoid the ride this year and the numbers certainly showed that. With near record lows for the number of new listings and sales volume declines for the second year in a row, the line up is forming for all those buyers and sellers that want to jump on a smoother ride in real estate. While we may have achieved balance in the real estate market by the end of 2023, will that continue in 2024? Once the Bank of Canada starts to decrease its rate, that will bring more buyers off the sidelines and create competition. Fixed rates have already started to decline. So, for those buyers ready to buy now, this is your buying signal.
Shifting property values.
January rings in the new year and with that comes every property owner’s assessed value from B.C. Assessment. It’s a topic that’s perhaps talked about more than new year resolutions as everyone looks to see how their properties scored compared to others. It’s important to remember, though, that these assessments may not accurately reflect market value and these valuations were done up to July 1, 2023. In the Lower Mainland, the total assessed value of properties was up 3% compared to 2023. Vancouver saw a typical property up 4%, one of the highest in the region along with Burnaby and Coquitlam, while most other suburbs were at 2% and municipalities in the Fraser Valley showing a decrease of 2% to 3%. Hope had the highest decline at 13%. BC Assessment Assessor Bryan Murao said, "Most homeowners can expect only modest changes in the range of -5% to +5%. These assessment changes are notably less than previous years."
Overall sales are down but buyers are ready.
At least we beat January, as the 1,345 properties sold in December were higher than the 1,030 sales at the start of 2023 in January. That can be seen as a positive after a year where the real estate market limped along. This after there were 1,702 properties of all types sold in Greater Vancouver in November and 1,996 sales in October. But at least there were more sales this December compared to last year where 1,303 properties sold in the last month of 2022. But still, sales in December were 37% below the 10-year average after November’s sales were at 35% below the 10-year average.
Overall, there were 26,249 sales in 2023 which was down from the 29,227 in 2022, and much less than the 44,944 sales in the fast-paced 2021. Total sales for the year were 23 per cent below the 10-year average. The last two down years were 2018 and 2019 with 25,051 and 25,679 sales respectively in those years. Like 2022 with the first six months having the majority of sales, 2023 was no different due to interest rate hikes having their way. In the last half of 2023 there were 11,720 sales compared to 10,348 in the last half of 2022. While it’s early to call it, there is a sense of momentum change. What’s needed to help that shift in the market is more listings. There will be real estate transactions in 2024, just how many will be a function of the number of listings that come on. Sellers, buyers are waiting for you!
With current sales, we are in a balanced market with seven month’s supply of homes overall in Greater Vancouver, ticking up from 6 month’s supply in November. With such a low volume of sales, it’s not surprising to see this. Vancouver’s West Side and West Vancouver are showing numbers above seven months, which indicates a buyer’s market. Meanwhile, North Vancouver, Burnaby, Coquitlam, Port Coquitlam and Pitt Meadows continue to see a shortage of listings resulting in seller’s market conditions with less than five month’s supply.
New listings slow to appear.
There were only 1,355 new listings in December after 3,440 new listings in November, 4,752 new listings in October, and 5,557 new listings in September. This is still slightly higher than the number of new listings in December last year at 1,240. For the year, there were 50,883 new listings in Greater Vancouver, which was below the 55,028 in 2022, and 63,711 in 2021. It was also lower than the two previous down years of 2018 and 2019 where there were 55,057 and 53,267 new listings respectively.
The number of new listings in December dropped to 25% below the 10-year average after being close to or above the average in the last 3 months: 3% below the 10-year average in November, 5% above the average in October and 6% above the average in September. For the year, new listings were 11% below the 10-year average. With this few listings, it’s not surprising to see prices climb 5% year-over-year in Greater Vancouver even amid sales that were 23% below the 10-year average. A resilient market indeed.
There were 8,802 active listings in Greater Vancouver at the end of December after November finished with 10,931, compared with 11,599 active listings at the end of October and 11,382 active listings at the end of September. After several listings expired at the end of December, January started with 7,828 active listings. Last year at the end of December there were 7,791 active listings and January 2023 started with 6,853. While we do have more listings to work with currently, there are less than the 10,907 at the end of 2018 and far below the 13,902 active listings at the end of 2012. The detached market overall remains in buyer’s market territory with 9 months supply of inventory but during the month of December the absorption rate was at 91%. Townhomes and condos continue to sit just above 5 months supply of listings on the border of a seller’s market with 106% of new townhome listings selling in December and 104% of condo new listings selling that month.
We do not have a speculation problem; we have a holding problem. More and more real estate is held instead of sold. After 25 years, the number of listings should be higher, the number of transactions should be higher. With our population growing and demographics shifting to produce more buyers, discouraging homeowners from selling will do more harm than good. The proposed anti-flipping tax tabled by the B.C. NDP along with other demand side policies will produce less listings for buyers and put more pressure on prices to increase. Government needs to entice sellers to come to the market, and until policy shifts in that direction, we’ll continue to have a holding problem and with limited supply.
Read the full Dexter Realty report and see data from each Lower Mainland community.
