Vancouver Detached house in December

City of Vancouver Detached Home Prices Drop 10% in December

Steve Saretsky -

The city of Vancouver’s detached housing market continues to turn heads. Detached sales fell 38% year-over-year in December. It was the fewest December sales in recent history, with MLS data dating back to 1992. There’s really not much else to say, I believe the data speaks for itself.

Vancouver Detached Sales for December
City of Vancouver detached home sales for December

Buyers are hesitant to pull the trigger, and sellers are somewhat reluctant to adjust their asking prices, although the very few homes that are selling are taking a substantial discount. As with  all housing markets, price discovery becomes very difficult in a down market. Part of this reason is because there is no one price metric that you can look at to determine how much prices have fallen. The official MLS benchmark now shows prices have declined 10% from last year.  However in certain pockets and at certain price points some detached homes are down as much as 25%.

Despite weak home sales and falling prices, new listings remain quite low and dropped 16% from last year.  Again, this suggests sellers might not be panicking just yet, there is no flood of new listings hitting the market.  There is however, a backlog of stale inventory failing to sell. There is currently 15 months of inventory for sale.

Vancouver detached homes months of inventory.
Months of Inventory in the Detached housing market.

The prevailing sentiment in the detached housing market is frustration amongst sellers. After several price reductions many sellers are taking their property off the market with the plan to re list in the spring when housing activity seasonally ramps up. However this could create a situation where new listings far exceed buyer demand, which could push inventory higher and accelerate price declines.

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The Canadian Economy

Steve Saretsky -

Happy Monday Morning! We got a string of new data this past week confirming inflation in consumer goods, and housing are proving to be more than transitory. Canada’s consumer price index continued to drift higher with prices hitting an 18 year high, up 4.7% from last October. The recent floods in BC...

Steve Saretsky -

The calls for impending interest rate hikes continues. CIBC’s chief economist, Benjamin Tal, was out recently suggesting the Bank of Canada could hike its benchmark interest rate at least six times beginning in early 2022. “I think there is a risk of getting into the market at today’s rates,” noted Tal....

Steve Saretsky -

The BC Government announced it is looking at several cooling measures for the housing market in 2022. They have highlighted two measures. The first is an end to the blind bidding process, and the other is a mandatory “cooling off period” which will allow any buyer a 7 day recession...

Steve Saretsky -

The Bank of Canada continues to slowly drain liquidity after flooding the system with a firehose of cash during the pandemic. Bank of Canada governor Tiff Macklem announced the end of Canada’s QE program (also known as money printing). Furthermore, in Macklems words, “We expect to begin increasing our policy...

Steve Saretsky -

Consumer price inflation ripped higher in September, surging 4.4% year-over-year, the fastest pace of price increases in 18 years. Let’s discuss this further. We have an inflation problem and the Bank of Canada remains of the view that inflation will be transitory. Although they really can’t say otherwise, for if...

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The Saretsky Report. December 2022