The real estate sales stats from Metro Vancouver seems slightly better than September’s but still weak. The October sales number is 34.9% below last October, while the September numbers were 43.5% below last September. The October sales were 26.8% below the 10-year October average which is better than September’s sales which were 36.1% below the 10-year average. And most of the numbers follow this pattern.
There is a 7.7% decrease in homes listed compared to September which indicates last month’s sales were able to reduce inventory. The sales-to-active listings improved for all categories: 10.3% for detached homes, 17.3% for townhomes and 20.6% for condos. Generally, analysts say that downward pressure on home prices occurs when the ratio dips below the 12% mark for sustained period.
The monthly drop in benchmark sales price for single family detached homes slowed from 1.6% to 0.7%. Over the last 3 months, the drop was 3.7%. For townhouses the monthly price drop increased to 1.2% versus 0.7% last month and totalled 3.2% over the last 3 months. And for condos, the monthly price drop went from 1.1% to 0.7%. Over the last 3 months, the total drop was 3.2%. The price drop seems to be equalizing between the categories.
Where does the market go from here? The BC Real Estate Association is predicting a bounce back in sales and price appreciation in 2019 for BC real estate. They are predicting sales above the 10-year average in 2019. A 12% increase in sales and a 2.9% increase in average prices.
This is somewhat more optimistic than the Canada Mortgage and Housing Association’s forecast. While CMHC believes sales numbers would improve over 2018, they believe prices will soften over the next two years. I feel CMHC is somewhat more realistic at this time.
However, there are a lot of other factors that can alter the market. For example, the economy of the US, their central bank policy, their overnight bank rate, our economy and how we deal with US policies. There are other factors less obvious such as foreign buyers. A major international real estate website in China has reported that there has been a spike in inquiries into Vancouver real estate in the 3rd quarter of 2018. It jumped 131% after hitting a 3 year low the previous quarter. Whether these inquires will result in purchases is anybody’s guess at this time. The next testing point is the Spring market. The rest of the year should remain slow.
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