Vancouver Detached Sales Rise 60% on Weak Base Effects

Steve Saretsky -

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Greater Vancouver detached sales increased 60% year-over-year in November. Again, weak base effects are responsible for the head turning increase, as November 2018 recorded the fewest detached sales since November 2008. What we can see in the chart below is that despite the huge increase in sales this month, detached sales for the month of November were still 4% below the 10 year average. 

November detaches sales in Greater Vancouver
Greater Vancouver detached sales in November

Meanwhile, as sales volumes have increased, new listings have plummeted. New listings were 11% lower than last November, and continue to fall on a 12 month moving average basis.

vancouver detached home listings
12 month average of new listings for Detached Homes.

So why are new listings falling? There’s likely no one answer but a couple do come to mind. First, we aren’t building a whole lot of new single family housing. Second, sellers aren’t being forced to sell. Interest rates and economic prospects remain accommodative for sellers to hold-out if they can’t get their price. We are not in a “Big Short” situation where interest rates are rising, credit taps have turned off, and foreclosures are flooding the market. In fact it is quite the opposite, at least right now. 

As a result, with sales picking up and new listings falling, we have witnessed a drop and further stabilization in the months of inventory for sale. As of today, there is 5.9 months of inventory for sale, which teeters on the edge between a balanced market and one that still favours the buyers. The later being the most reflective of overall market conditions today. 

Keep in mind, inventory is growing in higher price brackets. The luxury housing market, ie  homes priced above $3M, has a whopping 19 months of inventory for sale. 

As inventory conditions fluctuate, so too will prices. For example, we are still seeing healthy activity and stable prices for entry level detached homes. But again, as you begin to increase in price, market conditions soften significantly. Overall, the MLS home price index shows detached homes declined 5.82% from November 2018 but recent momentum points towards positive growth in the near future assuming conditions remain constant.

Detached prices in Greater Vancouver
Home price index annual percent change for Detached Homes in Greater Vancouver.

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The Saretsky Report. December 2022