Hi, it's Cari Mai and this is your Vancouver real estate market update for February 2023.
At the start of the year, only 1,624 homes sold in the MLS across Greater Vancouver, making it the 10th consecutive month of declining sales. Though it is normal for January to be quiet, this year’s was the 2nd slowest January since 2001. Economists mention that overall low inventory and high borrowing costs have really slowed sales down over 55% from last January.
This past December, housing inventory was definitely very low and January 2023 didn't get much better as the total number of homes listed for sale only increased by 1.3%. Curiously, newly listed homes for sale actually decreased 21% compared with January 2022, though the total number of homes for sale jumped 32%. This indicates that homes are taking longer to sell AND homes were simply being taken off the market during the holidays and were being re-listed again in the new year!
The MLS benchmark price is $1,111,400 across all home types in Greater Vancouver. This is almost a 7% decrease from January 2022 and a negligible decrease from December. Home buyer activity has picked up as we’re seeing multiple offers and plenty of showings on certain home types in various neighbourhoods across the region!
The million dollar question is "how far will prices drop and when will they start to rise again?" Now let's be real, if we all knew the answer to this question, none of us would ever have to work again! So let's take a look at some statistics and see what economists are predicting.
The MLS benchmark price fell 9% for condos from its peak in April 2022. Detached homes fell 15% from their peak in February 2022. Both home segments showed shallower declines than between 2008-2009 AND 2017-2018. Economists predict that prices won't be tumbling much more and this is due to 4 key reasons:
1. low inventory + pent up demand from home buyers
2. a strong job market;
3. increased migration to the Greater Vancouver region; AND
4. a better rate environment to come in late 2023
Now from what the experts are telling us, we're not expecting a housing crash if that's what you're waiting for me to say.
Now another type of home sale that isn't as closely documented as MLS home sales is presales. A presale is when a Developers sells a property to the Buyer even before it is built or completed. Tracking presale activity is a great gauge of Buyer and Developer sentiment.
In the 1st half of 2022, over 11,100 presale units in Greater Vancouver sold. In the 2nd half of 2022, less than 1/3 of that amount of presale units sold! Last year overall, the number of presale units sold was 4% below the 10 year average amount.
In 2023, the amount of presale units sold is expected to improve with economists predicting falling mortgage interest and a recovering resale market. Buyer confidence appears to be higher at the start of this year as presale releases in multiple towers in the Burnaby and Coquitlam markets have sold out after overwhelming interest!
There are several incentive programs offered to Buyers like high cash-back credits, low deposits, and upgrade inclusions that can still be taken advantage of!
I hope that gives you a glimpse into Vancouver's real estate market this month! Feel free to DM me or leave a comment if you have any questions about what you just heard.
Thanks for tuning in!