Buyer hesitancy continues to shape the June market.
With a dash of uncertainty, a promise of more interest rate cuts yet to come and buyer hesitancy the main ingredients, June saw a real estate market with fewer sales and fewer new listings. Activity levels were less than ideal in June, and after a slower start to 2024 it’s not as if everyone needs a break. But that could lead to a more active fall market, like in 2019 when the first half of the year produced fewer sales than the second half of the year, resulting in a consistent recovery leading up to the early part of 2020. Interest rates will be coming down, and even if it’s not as quick as we anticipated or as impactful in terms of affordability, it will still provide a boost for some buyers who’ve been playing the waiting game.
Sales continue to dip, setting us up for an interesting fall season.
There were 2,418 properties sold in Greater Vancouver in June, after seeing 2,733 sold in May, 2,831 in April and 2,415 in March this year. This was a 19 percent decrease from June 2023 following a 20 percent decrease in May of the same year. For the second consecutive month, sales dropped month over month in the region. As new listings remained elevated in June, active listings continued to rise – albeit at a slower pace than the last two months.
Hitting 3,000 sales in a month in Greater Vancouver remains elusive with that level being achieved only once in the last 26 months. The last time this happened was 2012/2013 and 2018/2019. Buyer demand continues to build up and that will eventually unleash into the market. We could see that happen at the beginning of this fall as interest rates continue to decline.
Sales in June were 24 percent below the 10-year average after being 20 percent below in May, 12 percent below in April and 30 percent below in March. Consistently inconsistent is the theme of the current real estate market. Not just month by month but area by area. Some regions/product types are showing significant increases in listings while others are struggling to keep up with buyer demand.
If this market continues like 2019, we can expect to see a much busier fall. In fact, sales in July and August 2019 were higher than June that year. It’s not impossible to think that buyers are starting to take notice of the increase in listings and opportunities in the market.
With the increase in new listings and overall absorption remaining at 42 percent, the months of supply in Greater Vancouver moved up again, now at six months (on the border of balanced to buyer’s market). North Vancouver, Burnaby North, New Westminster and Port Moody are the only cities at four months supply, while Pitt Meadows remains at three months. These areas, while technically in seller’s market conditions, are showing signs of shifting closer to a balanced market.
New listings still high despite month on month declines.
New listing totals declined in Greater Vancouver, much like the number of sales. After seeing 7,229 in April, and 6,484 in May, the total for June dropped down to 5,821. Much like the cool spring weather, maybe some heat in the summer will warm up the market for buyers after sellers ignited the listing counts.
While the number of new listings in June were less than May, they were still higher than the total of 5,468 that came out in June 2023 and the 5,410 in June 2022. Total new listings were slightly below the totals of June 2021 which saw 5,981 come on the market in a year with significantly more sales. Pent-up supply continues to feed the new listings surge we’ve seen, and much like the inconsistencies of the real estate market, the location and property types are varied.
The increase in new listings has really surfaced over the last three months. Year-over-year, active listings are up 41 percent in Greater Vancouver, with the increase in the last three months alone at 35 percent. What exactly is driving the increase in listings is difficult to pinpoint and is likely a collection of triggers. Be it capital gains changes, tenancy regulation changes, short term rental changes, or elevated interest rates, all are likely motivating owners to list their homes. And that’s not to mention typical moves that have seemingly been on hold over the last two years.
It’s not a surprise to see the number of new listings decline in June as sellers prepare for the end of the school year and look to summer holidays and fun. But in comparison to what we’ve seen in the two months prior, June showed fewer sellers engaging. Could this be the peak of listing activity for 2024? With the spring market typically being the most active time to list, we aren’t likely to see the number of new listings at the same levels in the fall market. Expect to see 20 to 25 percent fewer new listings in the fall.
Active listings up 41 percent compared to last June.
There were 14,180 active listings in Greater Vancouver at month end, compared to 13,600 at the end of May and 12,491 at the end of April. Compared to this time last year, listings are up 41 percent, after being up 46 percent year-over-year at the end of May. Detached active listings are up 30 percent year-over-year, while townhouses are up 52 percent and condos are up 53 percent. Are detached homeowners feeling the pinch of higher interest rates? Perhaps not in West Vancouver where detached sales jumped to 43 from 34 in May.
The detached market overall in Greater Vancouver jumped up to eight months supply from six - a buyer’s market. Townhomes and condos moved up to five months supply from four – shifting both to balanced market conditions in Greater Vancouver. There is a wide variance of supply in the market with some areas like North Vancouver sitting with three months supply in condos and townhomes and four months supply in detached homes, while Vancouver has eight months supply of detached homes available.
Overall, the trend is a balanced market; how long that remains is what we’ll see through the rest of 2024. Interest rates and economic conditions will feed into the mindset of buyers and provide signals on when to purchase. Those that take advantage before everyone else could find themselves with the best buying opportunity this decade. While prices will fluctuate with supply and demand changes in the market, overall downward pressure on prices could be limited. And for those areas where listing inventory is still low, prices may be firm and be subject to buyer competition.
Read the full Dexter Realty report and see data from each Lower Mainland community.
