Happy Holidays East Van! We hope you’re enjoying the holidays! As expected, the market has slowed down since the start of December. It happens every year while everyone enjoys the festivities before things pick up again in the New Year. Expect listings to be taken off the market now, possibly to be re-listed in the New Year, along with an increase in new inventory that we often see as things pick up near the Spring.
This year has already been slower than the last few years. We saw fewer sales which allowed the amount of inventory to increase giving buyers more options without the rush to buy in a competitive situation. As always, the condo, townhouse and house market in East Van has responded differently to the change though I’m still seeing good properties sell fairly quickly as long as they’re priced right (I’ve seen multiple offers for properties that are *priced to sell*). The detached house market has seen the biggest change in price, to no one’s surprise given the higher cost. The townhouse market has dropped in price but looks to be steadying and condo prices seem to be fairly stagnant though I have seen some significant price drops for some listings. I’m seeing some drops in price this month but that often happens in December (it’s the best month to find a deal if you want to buy). The numbers only give you one side of the story as the market feels a bit different out there – I’ve definitely seen prices drop from their high last year. Properties are taking a couple weeks to sell and Buyers are keen to negotiate. The Sellers who are priced appropriately to the market are selling quickly while Sellers who over price their property find their home sits on the market until they drop their price. I’ve seen Buyers pick up a few deals over the last few weeks, and I expect there to be some good opportunities over the next few weeks for buyers who are still looking (if a property is listed over the holidays, the Sellers are likely pretty keen).
Along with an increase in inventory in the Spring, I anticipate there to be an increase in prepared Buyers as well so competition between listings (especially good ones, though I don’t expect multiple offers aside from unique situations) will be something to look for in the Spring. I don’t expect prices to drop much more for condos and townhouses, but I do anticipate that Buyers will be able to be more picky – good properties in good buildings will retain their value but properties in bad buildings won’t be able to push the envelope on price (while the market was busy the last few years I saw a few too many units in bad buildings sell for prices that didn’t make sense). Detached houses that are updated and livable will retain their value but major reno projects or tear downs will see a decrease in price given how hard it can be to get financing for the purchase and reno. I feel like we’re going to see a lot of Sellers test the market.. if they don’t get a price that makes sense they won’t sell.
With interest rates remaining stagnant right now (another increase is expected soon) I anticipate Buyers taking advantage while they have the chance since the stress test doubles the impact of an increase and really does affect buying power.
If you’re looking to sell your property, think about the difference between what you’re selling and buying rather than the fact that your property might not be worth as much as it was last year. Even if you’re selling for less now, what you’re buying next will also be cheaper than before.
As always, let us know if you have any questions. We are happy to help over the holidays, if anything to make sure that you are on the right path if you’re interested in buying or moving next year. Contact Pinksy Mortgages to get started on your financing approval since the simple “Mortgage Calculators” on the internet don’t tell you the full story.
All the best over the holidays and a very happy new year to everyone!
East Vancouver Condo Market Update for December 2018
The condo market in East Van has been slow moving but things are still happening. This market is often first time home buyers so there is a lot of natural hesitation, then throw in a changing market and people step back until everything settles. It certainly felt like a Buyers market this fall. Our listings still sold it was just a matter of how long it took and how much the price was negotiated. That’s the thing though.. you’ll never know how much the Seller will negotiate until you try an offer.
Buyers wanted to know that they were getting a good price and with the drop in prices we’ve seen, they often were. Prices, based on average price per sqft) have dropped 5.8% this year for 1 bed condos, 3.2% for 2 bedroom condos and less than 1% for 3 bedroom condos (though this skewed by luxury 3 beds near downtown and leasehold units in South Van). I expect to see a lot of new Buyers in the New Year now that things have settled and we’ll see an increase in new and better inventory along with the opportunity to make slower decisions. Aside from expected interest rate increases, I don’t anticipate any big changes in how mortgages approved nor do I foresee an increase in prices so I’m looking forward to a cool calm and collected market (i.e. a normal market!). I’ve seen some really great prices for some units, including some that would offer a great cap rate potential landlords, it just doesn’t seem like there are many buyers looking right now.
The Sales to Active ratio still shows a strong market for 1 and 2 bedroom condos, though it certainly feels a lot slower out there. Prices have dropped, though some of the price change you’re seeing here is because we’re seeing fewer premium sales (and bigger price drops for those premium units) thanks to fewer investors in the market and lower mortgage approvals for buyers. Inventory has increased this year thanks to fewer sales. Inventory will drop over the holidays but increase again in the new year.
Sellers, keep in mind that Buyers will have a bit of time on their hands so be patient and make sure your property shows well and is priced right. Buyers, do your research, start learning about buildings and construction and start working with an agent. You don’t need to pay a Buyer’s agent working with you so use our knowledge, skills and work ethic to your advantage. We’ll be able to tell you if something is a good deal or is to be avoided.
East Vancouver Townhouse Market Update for December 2018
Similar to the condo market, the townhouse market has seen a drop in price and an increase in inventory that has since dropped for the Holidays. Just like the 3 bedroom condo market, the numbers for the townhouse market is skewed by leasehold units in South Van, though there is something to glean from the numbers.
Prices have dropped, based on price per sqft, 17.3% for 2 bedroom townhouses and 9.3% for 3 bedroom townhouses. A lot of the drop in the townhouse market, especially 2 bedrooms, is due to the higher prices: a 2 bedroom townhouse could easily go for around $1-million while a 2 bedroom condo is typically a lot cheaper (though you’re giving up size and lifestyle with the condo). Inventory for 3 bedroom townhouses increased significantly this year while 1 and 2 bedroom options remained fairly steady. A lot of the increase in inventory for the townhouses was newer developments.
With prices for detached still high despite their own increases, I expect this market to retain its value, especially for the entry level townhouses under $1-million.
For potential Sellers who own townhouses, consider the fact that detached houses have dropped in price and how much mortgage helper suites contribute to affordability. A $1.2-million townhouse is similar to a $1.5-million house with a suite.
East Vancouver Detached House Market Update for December 2018
The East Van detached market saw a 3.4% drop in average sales price this year for re-sale homes and a 52% increase in price in new construction (though new construction numbers are highly skewed based on the fact that it’s typically 5 homes or less that contribute to the averages, and homes with laneways, etc can be a lot more expensive).
Inventory for detached houses increased this year, though we’re back down to the levels we saw in mid-2017. I expect inventory to increase after the new year, though this market is saturated by tear downs and major reno projects that a lot of buyers don’t want.