East Van Market Update for May 2018

The market certainly feels like it’s shifting, though it’s happening slowly and the differences really depend on the market. The last few years have been insane, with ever increasing prices and multiple offers on just about everything, so it’s nice to see things slow down a bit allowing Buyers the chance to submit conditional offers. The high end of the market (and that goes for expensive condos, expensive townhouses and expensive houses) doesn’t have much urgency to it, which is leading to a Buyer’s market. However, the lower end of the market (i.e. the affordable homes in each category) are still moving pretty quickly (as long as they’re priced right and well kept).

This past month, we’ve seen some units still sell in multiples while some units only receive one offer. I’ve seen a few units not get an offer on the offer day then get one the day after once a Buyer realizes they don’t have to compete. I’ve seen some units drop their price (these ones were all over priced from the start anyways) and others increase their price when they didn’t get the offer price they were hoping for (this strategy never works). I’m curious to know how many Sellers won’t sell if they don’t get the price they think their property is worth.

 

When the market starts to shift, there are going to be some Sellers who bought before they sold, and become a bit more desperate to sell as their completion date closes in. Most of these Sellers have arranged their life so they can carry two properties if needed, but it’s never ideal. It’s rare that you’ll ever find out exactly which Sellers are desperate to sell, but if a property has been on the market for a couple weeks without getting an offer, it could be a good opportunity to throw a low offer at them to see how they respond!

Sp I bet you’re wondering if prices will drop (and considerably at that)? It depends.

Prices have been going up so quickly in the last few years, that stagnant prices will be a win. There are still too many Buyers out there for prices to really drop, and not enough outside sources that will force many Sellers to sell. The Vacancy Tax will affect some smaller markets, but not a big market like Vancouver. The school tax applied to properties over $3-million may have a small affect the more expensive Westside market, but that market has already been down for a bit now. Rental rates have had a hard time keeping up with purchasing costs, so we’ll see fewer investors clog the future market, but I don’t see them rushing to unload their properties either. The interest rates have gone up again so the “stress test” Buyers have to face before getting mortgage approval will hurt their affordability, but this will likely lead to Buyers needing to adjust their expectations sooner than Sellers would be willing to drop their price significantly. Buyers, we might be entering into a period where you have a bit more negotiation room on price, dates or terms, so embrace it.

One of the biggest issues facing this market is still the snowball effect – if people who own townhouses can’t afford/find a detached house, they won’t sell their townhouse, and if people who own a condo have no townhouses to buy, they won’t be able to sell their condo, so the market ends up stalling. The fact that people still need a good price on their existing property in order to afford the next rung on the ladder is what leads me to believe that prices won’t drop, though I don’t expect them to continue going up in the way they have been. Spring (right now!) is the time of year when we see the most amount of inventory, so here’s hoping that gets everyone moving.