Detached Sales Falling, Inventory Piling Up
Continuing the trend, detached sales fell again for the tenth consecutive month. January was more of the same, as the detached market continues to favour the buyers. With fewer and fewer sales, inventory continues to pile up and placed added pressure on sellers to reduce prices.
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As per the table, detached sales fell 47% in Vancouver East, 72% in Vancouver West, 66% in Richmond, 58% in Burnaby, and 57% in REBGV. For further context, REBGV detached sales were 34% below the 10 year average for the month of January.
New Listings & Absorption Rate
Vancouver East- 220
Vancouver West- 308
New listings this January were right on par with the 10 year average for REBGV. With that being said, the absorption rate indicates demand is not keeping up with supply. The absorption rate for January 2017 was 24% for REBGV detached homes.
(List/sells of over 75% tend to lead to price increases. Times, when our market is slowing tend to have list/sells below 50%.)
Sales to Actives Ratio
Vancouver East- 9%
Vancouver West- 7%
All areas are in a buyers market. This has been the trend for the past 6 months. Once again, this creates further pressure on sellers to reduce prices and allows buyers more room for negotiation.
Months of Inventory
Vancouver East- 11.4
Vancouver West- 14.7
Anything above 6 months of inventory is considered a buyers market. Inventory continues to pile up as a lack of sales is creating a backup in the market.
As I always like to remind people, median and average sales prices fluctuate month to month and are not always a perfect way to gauge prices. However, with that being said it can still give you a very good idea of a trends. For the detached market that trend remains on the downwards swing.
The detached market remains a buyers market for the sixth consecutive month. As sales continue to fall year over year it is causing inventory to pile up. As inventory continues to grow this will continue to put downwards pressure on prices. Generally, as sales go, prices follow. Demand is simply not there to meet the current supply and is a cause for concern as more supply is added in the coming months. This is reflected in our very low absorption rate of 24%. Real estate prices are sticky and do take time for sellers to adjust to a new reality. With that being said there still appears to be a 15% decline in prices from the peak back in the spring of 2016. Some areas are experiencing a greater decline.