Vancouver home for sale

Vancouver Detached Sales Fall 24.6% in February

Steve Saretsky -

As reported last month, Vancouver detached sales had their worst January dating back to 1990. This same phenomenon repeated in February. The city of Vancouver recorded just 98 sales, a 24.6% decline from last year and the lowest total we have on record. Yes we will see more sales in March as the spring market gets underway, however that is a normal seasonal uptrend and unfortunately is likely nothing to get too excited about.

City of Vancouver Detached sales in February

The bump in sales expected for the spring market is likely to be crowded out by an increase in new listings and quite frankly an overwhelming build in inventory. As of the end of February there is 14 months of inventory for sale, well above a healthy balanced market of 4-6 months of inventory.

Months of Inventory Vancouver Detached housing market.

As a result, sellers are having to slowly and surely lower their prices (remember the analogy of a cruise ship turning). The price correction in Vancouver’s detached housing market has been a slow bleed, it has been nearly three years since prices peaked out in the spring of 2016. There are economic/housing studies which illustrate sales volumes peak two full years before prices start to fall, and Vancouver seems to be a real life example of this psychological phenomenon in which sellers stubbornly anchor to peak prices. In the psychology realm this behaviour is known as an “anchoring bias” and is part of the reason price corrections can be long and drawn out as we are witnessing today. The official home price index now suggests Vancouver detached home prices have fallen 11.5% year-over-year, although the reality is prices have fallen significantly more, particularly for more expensive homes on the West Side which have dropped closer to 30% from peak valuations.

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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