On March 3, the Real Estate Board of Greater Vancouver (REBGV) released the Metro Vancouver Market Highlights for February 2019. It gives further evidence that Metro Vancouver is definitely not in a seller’s market anymore.
As we have mentioned in several previous posts, analysts generally agree that when the sales-to-active listings ratio dips to below 12% for an extended period of time, the market falls into a buyer’s market. And in a buyer’s market, we also see downward pressure in housing prices. As of February 2019, the sale-to-active listings ratio for all property types was 12.8%. Though that barely misses the threshold for a buyer’s market, it does fall squarely into balanced market territory. But there’s enough evidence to suggest that ratio will continue o drop.
First of all residential sales in the region for the month of February 2019 totalled 1,484 units, a 32.8% decrease from February 2018, which had a total of 2,207 sales. To put that decrease into perspective, last month’s sales were 42.5% lower than the 10-year February sales average.
While the total number of home sales did go up by 34.5% from January to February, from 1,103 to 1,484 units, the report is not seasonally adjusted. Home buyers tend to wait until it gets warmer before going into home showings.
Rising housing inventory may indicate we are headed towards a buyer’s market
The total housing inventory in the region saw a significant increase on a year-over-year basis. The total number of units for sale on MLS® in February 2019 was 11,590. That is an increase of 48.2% compared to February 2018 where the total number of units for sale sat at 7,822.
Regarding the shift towards a buyer’s market, Phil Moore, REBGV president said, “For much of the past four years, we’ve been in a seller’s market. Conditions have shifted over the last 12 months to favour buyers, particularly in the detached home market. This means that home buyers face less competition today, have more selection to choose from and more time to make their decisions.”
While it’s true that conditions are more favourable for buyers, they are not exactly flocking to the market. The report shows that the MLS® Home Price Index composite for all property types is currently at $1,016,600. This is a 6.1% decrease over February 2018. But it has become more difficult to qualify for a loan, and this keeps buyers at bay. “Homes priced well for today’s market are attracting interest, however, buyers are choosing to take a wait-and-see approach for the time being,” Moore said. “REALTORS® continue to see more traffic at open houses. We’ll see if this trend leads to increased activity during the spring market.