Could things be turning around for the real estate market? We think so and here’s why. Low interest rates, low unemployment, strong economy, stronger sales and banks get creative with lending products.
With the increase in supply, comes an increase in choice. It is a great time to buy. The government policies of late will contribute to pent up demand. We do not expect this window of opportunity to last.
After analyzing the stats, it is becoming apparent that gaps and decreases are beginning to shrink. This combined with the factors above leads us to believe that things are beginning to stabilize.
From Rafferty Baker, CBC News, More choice, lower prices: why now may be good time to buy real estate.“This housing market assessment is an early warning system for vulnerabilities in the housing market,” said Eric Bond, market analyst with CMHC. “The degree of imbalance between home prices and the local economy is narrower than it has been at any point in the last several years.”
“In many ways this is an opportunity for them to explore more options, and also to take their time making a purchase and putting reasonable conditions on that offer,” said Bond.
We find discounts have been felt in the $3m+ range, especially in Edgemont. The rest of the market appears to be stabilizing. However, Mortgage stress tests are severely affecting first-time buyers and curtailing move-up activity. Open market pricing is for well-maintained homes requiring little improvement then the fair and equitable price for a property requiring repairs is less. Do not defer maintenance on your home for this reason. If you need a tradesperson, call us. We have an excellent working relationship with a large network of professional local trades to draw on.
Highest employment growth among the provinces, BC’s employment growth is up to 3.2% compared nationally at 1.8%. B.C.’s unemployment rate of 4.7% remained the lowest in the country. According to Canadian Real Estate Magazine, interest rates are not expected to go up in 2019. Last month had the smallest monthly sales decline and the strongest month of sales since October.
We are seeing a return to 30-year amortizations and the banks are beginning to offer net worth mortgage lending. To find out about unique borrowing opportunities available to you, call us. We know the experts.
With respect to the B-20 mortgage rules, Benjamin Tal said, “it doesn’t take into account the rise in average personal income in Canada, or that a person gains more equity over the course of their mortgage term. Tal also said B-20 doesn’t consider the lower risk of longer-term mortgages and is partly to blame for the rise in alternative lending.”
What does the new vacancy tax translate to in the market? Students and other renters in Vancouver are finding sweet rental deals in luxury homes.
North Vancouver was a balanced market in April. March Break, Easter and fabulous sunny weather didn’t slow things down last month. Opens were busy, offers are being negotiated with terms and there were several sales above asking. On average, most homes are selling for 4 per cent below list. Sellers in Edgemont did well last month while buyers found good opportunities in Upper Lonsdale. On average, it took 34 days to sell a home in April. The sweet spot for sales was between $2,000,000 and $2,250,000 followed by $1,500,000 to $1,750,000.
“Government policy continues to hinder home sale activity. The federal government’s mortgage stress test has reduced buyers’ purchasing power by about 20 per cent, which is causing people at the entry-level side of the market to struggle to secure financing,” Ashley Smith, REBGV president said. “Suppressing housing activity through government policy not only reduces home sales, it harms the job market, economic growth and creates pent-up demand.”
“There are more homes for sale in our market today than we’ve seen since October 2014. This trend is more about reduced demand than increased supply,” Smith said. “The number of new listings coming on the market each month are consistent with our long-term averages. It’s the reduced sales activity that’s allowing listings to accumulate.”
After analyzing theREBGV stats, the North Vancouver market experienced price declines from January to April. The aggregate median price of a detached home decreased 8.6 per cent to $1,590,000 from the same time last year. Meanwhile, the aggregate median price of a condominium decreased 9 per cent to $605,000 from 2018. The median price of a townhome decreased 1.5 per cent to $1,010,000 from the same period in 2018. The townhome decrease was consistent with the numbers last month while the decline shrunk slightly for detached homes and condos. If this trend continues, it illustrates the window of opportunity for buyers beginning to close.
The North Van Detached is currently in a balanced market position with 18 per cent of homes selling and 82 per cent of homes not selling. The homes that sold were priced appropriately for the market and demonstrated value. Price is paramount as we were in a declining market. Declining markets cost sellers dearly when their home is not priced correctly. The longer the home is on the market the lower the value.
As long as you are buying and selling in the same market, the outcome is relative. Markets go up and down. We do not expect to see the double-digit gains of the past few years. Our economy is thriving, interest rates are low and so is unemployment. Plus, it’s such a desirable place to live. Would you want to live anywhere else!?!
We are great at what we do because we are passionate about real estate and driven to do the best for you – our clients, family and friends. We love your referrals. Referrals keep our business thriving. Referrals and repeat clients are the core of our business.
The MLS® Home Price Index composite benchmark price for all residential properties in North Vancouver is currently $1,019,500. This represents a decline of 9.6 per cent from the MLS® HPI over the last year but an increase of 13.1 per cent over the last 3 years, 54.1 per cent over the last 5 years and 88 per cent over the last 10 years.
There were 53 detached sales in April 2019, less than the 78 detached sales recorded in April 2018. The benchmark price for detached properties was $1,499,400, demonstrating a 12 per cent decrease from April 2018. This represents a decline of 6 per cent over the last 6 months and a decline of 0.3 per cent over the last 3 years, an increase of 51.2 per cent over the last 5 years and an increase of 93.5 per cent over the last 10 years.
The detached market is a balanced market with a sales ratio of 12 per cent and a build up of over 8 months worth of inventory. This tells us that 1 out of 10 homes were priced properly. Nearly 9 homes out of 10 were not priced properly and did not sell. The average detached listing sat on the market for 34 days consistent with April 2018 at 29 days. Homes are selling on average for 92.8 per cent of list price. The detached market has been building steadily since December 2018. Prices will go down if inventory builds over a sustained period of time.
North Vancouver saw 64 apartment sales in April 2019, a 36.6 per cent decrease compared to the 101 sales in April 2018. The benchmark price of an apartment property is $567,500, an 8.6 per cent decrease from April 2018’s benchmark of $620,900. This represents a decline of 2.5 per cent over the last 6 months but an increase of 32 per cent over the last 3 years, an increase of 56.3.3 per cent over the last 5 years and an increase of 80.4 per cent over the last 10 years.
The condo market is a balanced market with a sales ratio of 15 per cent and a build up of almost 7 months worth of inventory. The condo inventory is building which will push prices down, if sales do not clear out the inventory. The average condo listing sat on the market for 23 days compared to the brisk market of March 2019 at 35 days. Condos are selling for 3.2 per cent less than list. 1.5 out of 10 sellers priced their condos correctly while 8.5 sellers out of the 10 did not.
Attached property sales in April 2019 totalled 29, an decrease from the 35 sales in April 2018. The benchmark price of a North Vancouver townhome property is $957,700, which represents a 7.1 per cent decrease from March 2018. This represents a decline of 6.7 per cent over the last 6 months, an increase of 21.7 per cent over the last 3 years, an increase of 58.2 per cent over the last 5 years and an increase of 88.4 per cent over the last 10 years.
The attached market is in a slight sellers market position with a sales ratio of 21 per cent and a build up of nearly 5 months worth of inventory. The average attached listing sat on the market for 23 days on par with April 2018. Attached properties are selling for 3.2 per cent below list and nearly 8 townhome sellers out of 10 did not price their homes appropriately for the market. Click here for the REBGV’s Realtor Report
Looking for more info? Call us, we are always happy to help.
Data courtesy of the REBGV, BCREA and SnapStats®