"The local person is completely out of this market," he said. While skyrocketing prices have made business good, Hasman said that the current market, with housing prices rising 10-15 per cent each year, is unhealthy.
"Anytime you have extremes in markets, it's never healthy," he said. "You end up with a bubble. If the local economic base can't support these levels, then at some point you're going to have a lot of people burned big time. It's not sustainable."
This feels like the first Normal Real Estate market in many years. That is if you can even define or remember what 'Normal' really feels like. Gone are the bidding wars and gone (for now) are the days when homes were selling in mere days. For buyers there is now good selection and no pressure to make that big commitment... Sales of homes across the Greater area of Vancouver are at levels not seen since 2000!
Overall, prices still seem to be holding with some price softening in specific markets only. Vancouver’s Westside looks to be one of those markets. Fewer buyers from China, tougher mortgage regulations and concerns over the global economy are all weighing on consumer confidence. I predict these market conditions will continue through the balance of 2012 with further price softening.
Take note of the statistics about Single Family Homes on both Vancouver's west side and Greater Vancouver. They are quite striking:
Wow!As expected ( after four months of declining sales ) the Summer market continues to chug along with house sales at levels not seen since 2009. There are now 12.5 month’s supply of houses for sale on the Westside which technically puts us in a Buyer’s Market. This is quite a change from where we were one year ago when we had 4.5 month’s supply. I expect the level of homes on the market to remain stable though August with sales hovering around 70 to 90 sales for the month.
September and October typically bring an increase in demand but also an increase in inventory. This year may see many home owners de list their properties not willing to sell at prices the market is willing to pay. If this is the case we should see inventory levels remain stable.
On Vancouver’s Westside home prices continue to be far out of line with economic fundamentals meaning we have become fully reliable on foreign buyers supporting our current price levels. If we continue to see an absence of these buyers then prices ( in my opinion) will trend lower. You only have to look at the High End of the market above $ 3 million and there is a glut of homes for sale. Where have all the buyers gone?
Here’s how the numbers stack up for Vancouver’s Westside:
Single Family Homes:
- During the month of July there were 83 homes sold versus 139 one year ago. A decline of 40%. Year to date home sales are down by 41% compared to 2011.
- Average selling price of a home was $ 2,397,045 almost unchanged from 1 year ago. Year to date the average sale price is also even with last year at $ 2,415,050.
- There were 1038 homes listed for sale at July 31st this year compared to 632 1 year ago. That is an increase of 64%
- There were 12.5 month’s supply of houses at July 31st versus 4.5 month’s one year ago.Greater Vancouver Real Estate Market (single family houses)
- Sales of all detached properties on MLS in July fell 28% from 1101 units last July to 790 units this year. Year to date sales are down 26%.
- Average selling price has fallen by 8% from $ 1,133,357 to $ 1,041,325.
- The supply of houses has increased by 24% and the month’s of supply has increased from 5.8 to 10 month’s this year.Overall our market seems to be gradually cooling . That being said, it is summer and this is probably what a “Normal Summer” market should feel like. For most Vancouverites this market feels slow but remember so many of the past years we have had booming conditions. A Booming market is only sustainable for so long.
Westside Single Family Home (SFH) inventory has increased 64% from a year ago. The months of inventory (MOI) has increased from 4.5 MOI to 12.5 MOI in that time period.
In Greater Vancouver the SFH inventory has increased from 5.8 MOI to 10 MOI.
Imagine what it will be like if the traditional post-summer inventory surge materializes?
Click 'comments' below to contribute to this post.