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January Market Update

Under Market Update


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Written on January 5th, 2021

“Robust December sales outpaced long-term averages in what’s traditionally the quietest month of the year in real estate. This was part of an unusual seasonal pattern the market followed last year, which can be attributed in large part to the pandemic,” Gerber says.

“When the pandemic began in March, the housing market came to a near standstill. We knew, however, that shelter needs don’t go away in times of crisis, they intensify,” Colette Gerber, REBGV Chair said. “The real estate community worked closely with our regulatory bodies and public health officials in the spring to ensure appropriate precautions and protocols were implemented so BC REALTORS® could help residents safely meet their housing needs.”

“After adapting to the COVID-19 environment, local home buyer demand and seller supply returned at a steady pace throughout the summer, fall and winter seasons,” Gerber said. “Shifting housing needs and low interest rates were key drivers of this activity in 2020. Looking ahead, the supply of homes for sale will be a critical factor in determining home price trends in 2021.”

Market Predictions for 2021? 

Several banks and institutions have predictions about what the real estate market has in store for 2021. Mortgage Broker News has collected and commented on a few 2021 projections in their recent article. Here are a few key points or you can read the article in it’s entirety here!

CIBC’s base-case scenario: Canadian home prices rise by 2.4%

“Even though businesses will continue to falter as COVID-19 lockdowns drag on, the majority of the people who will be affected will be renters, not homeowners, so the possibility of a surge of inventory hitting the market and keeping prices in check is not one to bank on. Dwindling supply might hamper the number of sales that take place, but it will only increase prices. CREA expects the average home price to increase by 9.1% in 2021.”

“Supply shocks” could devastate Vancouver, Toronto markets

“Considering the fact that borrowers have been exiting deferral programs left and right since September and have yet to desperately flood the market with supply, there is little evidence that even 5% of deferred mortgages, let alone 10% or 15%, will prove so problematic that borrowers will have to liquidate their properties.”

“By October 31, the number of deferred mortgages at Canada’s largest banks totaled less than 70,000 and was 86.3% lower than in the previous quarter. In December, RBC announced that as of the end of October 2020, 90% of the deferrals offered through the bank’s client relief program had expired. Only 2% of RBC’s deferred mortgages had slipped into delinquency at that point, and a third of those were delinquent prior to the deferral being put in place.”

“Regarding investors, some will have to crash out of the condo market, particularly those who were using their properties as Airbnb’s and are now painfully cash flow negative each month.”

Ex-urbs will see more activity than major urban cores

“This projection comes courtesy of, among others, Moody’s, who said in late 2020 that it expects to see “greater resilience in lower-density markets outside Canada’s large urban cores,” driven by demand for properties with more space for working from home. Smaller, more affordable markets, Moody’s said, “will particularly benefit from this trend.”

“Remote work has simply juiced a trend that was already intensifying in Canada’s most active real estate markets: drive until you qualify. Now that remote work has freed so many Canadians from having to live within commuting distance of their jobs, they are able to purchase the properties they want essentially anywhere they feel comfortable living.”

MBN’s call

“After 2020’s feeding frenzy, we expect the overall number of sales to suffer this year, not because of a lack of demand but because of a lack of available inventory. Long-time single-family owners who refinanced at today’s lower rates are sitting quite pretty and may have even less reason to sell.”

Bank of Montreal

Better Dwelling weighed in on the BMO projections for 2021. Basically, Canadian home prices will be higher in 2021 and things should cool off in the second half of the year. Prices in the fourth quarter should be similar to the first. Click here to read the Better Dwelling article.

Thoughts on Assessment Value? 

“Despite COVID-19, the Lower Mainland residential real estate market has been resilient,” said B.C. Assessment deputy assessor Bryan Murao. “For the most part, homeowners can expect relatively moderate increases in value. This incredible strength is a stark contrast to last spring when the market came to a temporary standstill whereas the remainder of the year had a very steady and rapid recovery.”
According to a recent Vancouver Sun article, BC Assessment reports that the City of North Vancouver and the District of North Vancouver detached home prices are both up 7%. The City of North Vancouver and District of North Vancouver Strata are up 5% and 6% respectively.
“Assessments on strata-titled properties, condominiums and townhouses, also rose for 2021, but Yan said the largest increases occurred in the District of North Vancouver, at six per cent to a median of $732,000, and the City of North Vancouver at five per cent to $690,000. Yan said those represent areas where units tend to be larger, and people are beginning to “value the importance of space.”

“COVID-19 might have interrupted real estate sales, but the pandemic’s unequal impact on society didn’t disrupt the economic conditions that helped push values up.”

In a recent Vancouver Sun article, Andy Yan, SFU’s City Program Director, provides contrarian evidence to the “Great Dispersion” theory put forth by New York University’s marketing researcher, Scott Galloway, explains the current relevance of our assessment values with respect to the current real estate market and details who has been affected by the pandemic and why. Notable highlights from the article are below. You can read the full article by clicking here. The “Great Dispersion” theory is worthy of reading. It outlines what Galloway believes is the cultural affect of society disperses itself to away from populated areas.

“Is COVID-19 the catalyst for the ‘Great Dispersion’?” said Yan, referring to a theory posed by New York University marketing researcher Scott Galloway that the pandemic is changing the physical distribution of people and products.

“Murao said intra-provincial migration numbers aren’t officially available, but assessments don’t appear to show a dispersion effect yet, because urban assessments continue to rise”.

“I know, anecdotally, that some people are moving from urban areas to non-urban areas, but they appear to be being replaced (by other buyers),” Murao said.

“Yan cautioned about reading too much into assessment data, since it essentially only captures sales information up until July 1, the cutoff for B.C. Assessment’s official calculations, which represents just the first few months of the pandemic.”
We are always cautious about reading too much into the assessment values. They are a market snapshot from 6-9 months ago.

“You’ve also got to remember, COVID-19 has affected the population very unevenly,” Yan said.

The service sector, particularly tourism, has been hard hit, but workers in those industries weren’t likely on a track toward home ownership to start with.

Professionals who were in a position to work from home before the pandemic likely haven’t lost jobs, Yan said, so “the economic foundations for some people were interrupted, but not disrupted.”

“It’s not as if prices are suddenly soaring, but they’re just slowly increasing to something that is perhaps more normal,” and not the steep increases experienced in 2015 or 2016, Yan said.

Thinking of Buying?

Buyer demand still exceeds current inventory levels. We are seeing 30+ showings at homes within a weekend that lead to multiple offers on a Monday or Tuesday. Serious buyers are doing inspections prior to offering. Please remember to do your due diligence when competing. It is paramount to know what you are buying and if any repairs or deferred maintenance are required. Call us, if you are curious or have questions. We are always happy to hear from you and keep you informed.

We want buyers looking at the home that are truly interested in purchasing the home. Our current COVID protocol when showing homes is in keeping with the REBGV and the Real Estate Council mandate.

  1. Buyers have already listed or sold their current home,
  2. Buyers are working with a realtor,
  3. Buyers are prequalified or have the means to finance the purchase.

Sabeena had a great article regarding bridge financing. Many buyers think this is a viable financing term to use in order to purchase first and sell later. It can be expensive and there are requirements for approval. Click here to read Sabeena’s article or give us a call if you have questions about buying or selling first. Every situation is unique. Good information will help you make an informed decision for your family. Call us, we are available and happy to help!

Thinking of Selling?

Inventory is LOW. Mortgage rate holds last 90-120 days. These rate holds will be expiring soon. In order to secure their low mortgage rates, buyers need to buy now or lose their rate holds. It’s a great time to get ahead of the Spring market. January and February are a great time to leverage buyer demand, less competition and low interest rates to capitalize on a home sale. Call us to find out more!

Open or by appointment?

We are still not holding open houses. We do not feel it is in the best interests of our clients to open the doors to their home without measures of control and safety in place. Your safety and the safety of the public is of paramount concern to us.

As realtors, it is our job to prequalify the buyer viewing our seller’s home. We want buyers looking at the home that are truly interested in purchasing the home. Our current COVID protocol when showing homes is in keeping with the REBGV and the Real Estate Council mandate.

  1. Buyers have already listed or sold their current home,
  2. Buyers are working with a realtor,
  3. Buyers are prequalified or have the means to finance the purchase.

Thinking of selling but not sure about doing so during COVID-19?

If you are curious about selling at this time, call us. We have the answers you need and you will never feel pressure from us to make a move. We are here to support, inform and advise.

We are passionate about real estate and driven to do the best for you – our clients, family and friends. The most important part of our business are the relationships we create and continue long after our clients and friends have sold or purchased their homes. It has been our absolute pleasure to watch your families grow and friends thrive in changing circumstances.

What a wonderful end and start to the year, thank you!

We love your referrals! We love meeting and working with your dear friends and family. Referrals keep our business thriving. Referrals and repeat clients are the core of our business.

We love to hear from you! Thank you for your many referrals, inquiries and phone calls last year and so far this year.

Last month was busy in a wonderful way! We loved seeing our friends / clients move into their new homes in time for the holidays and new year. For us, it was a very heartwarming and fulfilling ending to 2020.

We look forward to helping your loved ones and our amazing clients find a home this year.

What about the numbers?

From the REBGV, “Generally, analysts say downward pressure on home prices occurs when the ratio dips below 12 per cent for a sustained period, while home prices often experience upward pressure when it surpasses 20 per cent over several months”.

Overall…

The MLS® Home Price Index composite benchmark price for all residential properties in North Vancouver is currently $1,122,600. This represents an increase of 9.1 per cent from the MLS® HPI over the last year and 2.6 per cent increase in the last 3 years, up 32.6 per cent over the last 5 years and up 86.3 per cent over the last 10 years. These numbers are consist with last month. 10 year increase is up from last month. Prices are stable-the index increased slightly last month by 0.5 per cent. The index increased over the last 6 months by 4.6 per cent.

Buyer demand is intense. Inventory can’t keep up.

There were 81 detached sales in December 2020, down slightly from 94 detached sales recorded in November 2020 up from the 56 sales in December 2019.

The benchmark price for detached properties was $1,702,600 in December. Up 1.9 per cent from November 2020 and up 12.5 per cent from December 2019.  This represents an increase of 8.9 per cent over the last 6 months and an increase of 1.7 per cent over the last 3 years (peak of the market), an increase of 25 per cent over the last 5 years and an increase of 99.6 per cent over the last 10 years. Meaning, if you are thinking about selling your home and have owned it for 10 years or more, you will do exceptionally well. We are encouraged to see the 1 and 10 year figures increasing from last months numbers. Great news for anyone thinking about upsizing!

If you are thinking about a move, call us to discuss. You can do well given the rapidly changing market. Our goal is to make sure you make the best financial decision for you and your family. We provide information, knowledge and options so you can do that!

The detached market is a sellers market with a sales ratio of 58.3 per cent and a build up of just under 2 months worth of inventory. This tells us that just nearly 6 out of 10 homes were priced correctly for the market yet nearly 4 homes out of 10 were not priced properly and did not sell. The average detached listing sat on the market for 46 days – about 18 days longer than last month. Homes are selling on average for nearly 97.7 per cent of list price, a decrease of 1.3 per cent from last month.

The detached inventory peaked in June at 344. Inventory was at 139 listings last month. Inventory is down from 234 in November 2020.

It’s a great time for sellers to leverage low interest rates, high demand and low inventory to capitalize on their sale price. The pandemic is not deterring buyers from making a move. We are seeing homes list and sell quickly when priced correctly. Consumers feel safe with the process of buying and selling and are proceeding with their plans.

North Vancouver saw 124 apartment sales in December 2020 consistent with the 128 sales in November 2020. The benchmark price of an apartment property is $585,800, a 6.1 per cent increase from December 2019 (down from 7.3 per cent last month). This represents an increase of 1.9 per cent over the last 6 months and an increase of 4.3 per cent over the last 3 years (up from 2.7 per cent last month), an increase of 47.7 per cent over the last 5 years and an increase of 74.0 per cent over the last 10 years (up from 69.1 per cent last month). While the 1 year prices have decreased slightly since last month, the 3 year and 10 year figures have increased.

Curious about buying  or selling a condo? Call us! Every situation is unique and we have all the information you need.

The condo market is a seller’s market with a sales ratio of 55 per cent and a build up of nearly 2 months worth of inventory. The average condo listing sat on the market for 34 days on par with last month. Condos are selling on average for 97.8 per cent of list price. Just over 5 out of 10 sellers priced their condos correctly for the current market while nearly 5 out of 10 sellers did not. Buyers are informed, savvy and value driven. Buyers also have access to funds they could not acquire before given the low mortgage rates. Lots of first time buyers are getting into the market which is great!

Attached property sales in December 2020 totalled 38 (on par with November 2020). The benchmark price of a North Vancouver townhome property was $1,010,000 in December 2020 which represents an 9.2 per cent increase from December 2019 (down from 10.1 last month). This represents an increase of 2.1 per cent over the last 6 months (down from 5.9 per cent last month), an increase of 2.8 per cent over the last 3 years (down from 4.9 per cent last month), an increase of 36.1 per cent over the last 5 years (down from 42.5 per cent last month ) and an increase of 84.5 per cent over the last 10 years (down from 83.6 per cent last month).

Curious about buying or selling a townhome? Call us! Townhomes are in demand and inventory is low. Many buyers are looking for space but cannot afford a detached home. This is the time to sell and maximize your return. 

The attached market is in a seller’s market position with a sales ratio of 57 per cent and a build up of nearly 2 months worth of inventory. The average attached listing sat on the market in December for 24 days which is on par with November 2020. Attached properties are selling for just over 99 per cent of list price. Nearly 6 townhome sellers out of 10 priced their homes appropriately for the market while 4 did not.

We are seeing speedy sales for townhomes. Call us to find out which neighbourhoods are in demand!

Looking for more info? Call us! We are always happy to help and provide the information you need to make an informed decision.

Data courtesy of the BCREA, REALTOR® ReportREALTOR® Report, REBGV and SnapStats®

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