March 2010 came and went in a flash. Vancouver's real estate activity, in general, was more or less reflected by similar levels of activity in the Coal Harbour area. Market activity was typified by a sharp increase in active listings and lower sales rates accross all price categories. The REBGV April Stats Package shows an overall increase in active listings of 60% from March 2009 and 52.1% over Feb 2010. Neither of these stats should be all that surprising given the almost complete market shut-down in early 2009 and the Olympic disruption in Feb 2010, nor do these stats realy say much given the weakness of both comparison periods. What can be gleaned from them is that a sharp increase in listing inventory is under way.
Active listings in the Coal Harbour area have increase steadily from 109 in January to 216 as of April 1. We saw an increase in active listings of 35% from March 1 to April 1 2010. For specific listings and sales stats for Coal Harbour click:
CH Monthly sales stats.xls
Sales activity for March increased 35.8% accross the Board in general, from March 2009 and 26.8% from February 2010. In the Coal Harbour area, we saw an increase of 25% in total sales from Feb 2010 to March 2010. Given 216 active listings in Coal Harbour and a total of 25 sales in March, Coal Harbour is looking at approx 8-9 months of active inventory right now, with more expected and arriving on MLS daily. As a rule of thumb, anything over approx 8 months of active inventory, in Vancouver, suggests downward price pressure.
Price Reductions and Seller Motivation
Given the number of competing listngs in each price category paired with the growing perception that we may be heading for a real estate correction, the more motivated sellers are starting to tip their hands in the form of price reductions. Normally price reductions are few and far between in the Spring and Summer months, however, they are starting to appear with startling frequency now. This is not necessarily an indication that sales prices are crashing or even contracting right now, but rather it's a clear indication that buyers are not reacting to the recent trend of pushing prices to seemingly limitless new heights. Properly priced listings are selling while "optimisticallly" priced listings are dying on the vine. I know, what's new?
I'm sure you've all heard by now that interest rates have begun their march upward. The old saying, "Interest rates take an elevator up and en escalator down" is about to be tested. Last week, several of Canada's big banks raised their 2,3 and 5 year rates by .6%. Predications vary as to where they'll stop but everyone seems to be in agreement that they will continue to increase through 2010 at least. The good news is that this should motivate Buyers to take action sooner than later. April should be a good indicator of where the year is going to land in terms of values and actual sales activity.
With the Loonie at par with the $USD, some of those of you who bought in years past have an increadible opportunity to capitalize on an exchange rate that in many cases, off-sets your capital gains liability upon sale.
It's simple, we are again at dizzying heights in the market, with increasing supply and somewhat soft demand (at least so far this year). In fact, in many cases, prices are above previous record-heights set in 2008. Given the inexorable approach of further interest rate hikes, media focus on the possibility of a Canadian housing bubble, affordability issues and the perception that a market correction may be imminent, I would advise serious sellers to get off the fence and list their properties as soon as possible at a price that makes sense. There's another old saying, "The bigger the party, the bigger the hangover", and from where I sit, the party seems to be raging on.
Please contact Shaun directly firstname.lastname@example.org to discuss whether it's a good time for you to buy or sell and please feel free to comment on this or any of my other Blogs or visit me at my Century 21 In Town Realty website.