Sales Plummet But Inventory Still at Historic Lows
Quite the contrary to the sinking detached market (January 2017 detached market report) condos and townhouses remain quite stable. Despite a significant drop in sales, inventory remains at historically low levels preventing prices from moving much. The divergence from the detached market is really quite remarkable.
Condo sales across Greater Vancouver slumped year over year. For January sales fell year over year by 14% in Vancouver East, 30% in Vancouver West, 18% in Richmond, 39% in Burnaby, and 24% in REBGV. Despite sales falling year over year, they remain above the 10 year average. REBGV condo sales were 11% above the 10 year average for January. Except for Vancouver West which was 11% below the 10 year average.
Vancouver East- 155
Vancouver West- 493
New listings remain at historic lows across the board. New condo listings in REBGV were 22% below the 10 year average for January. The lack of new listings is keeping total inventory at all time lows. Total condo inventory in REBGV fell 36% year over year. Here’s where we currently stand.
Vancouver East- 42%
Vancouver West- 31%
Anything above 20% is considered a sellers market. These are still very high but well off their June peak of 70% for REBGV.
Months of Inventory
Vancouver East- 2.4
Vancouver West- 3.2
Condo prices vary by area. However, for a quick and generic analysis they are essentially flat. Some areas such as Vancouver West experienced a very small decline from the peak, however because inventory is so low prices appear to have rebounded somewhat and are comparable to what they were in the summer of 2016. I’ve included the REBGV average sales price below. It can fluctuate quite a bit from month to month but the overall outlook appears that prices have levelled. However, because we are still experiencing multiple offers and inventory remains low, there remains a possibility for prices to increase.
The condo market has definitely cooled off from last January. However, with that being said it’s still very active and there remains competition and multiple offers at the lower end of the market. Despite sales falling, inventory is stuck at record low levels. It’s hard to see prices declining until either demand completely falls off or inventory rises. As a full blown correction ensues in the detached market there is a possibility that it could trickle down. However, that remains to be seen as of right now and the divergence between the two markets has never been wider.
The townhouse market appears to be next in line for a correction. Following a substantial correction in the detached market it appears townhouses are in the crosshairs. Sales fell again in January, new listings are rising and the recovery to normal inventory levels has begun.
Townhouse sales took a substantial step backwards. Townhouse sales fell year over year by 20% in Vancouver East, 39% in Vancouver West, 33% in Richmond, 44% in Burnaby, and 31% in REBGV. Further, townhouse sales for REBGV fell 12% below the 10 year average for the month of January.
Vancouver West- 61
REBGV new listings increased by 2.4% year over year. Inventory levels also increased by 14% year over year. This is definitely good news for buyers of townhouses, however inventory levels are still critically low. Still a good start towards regaining balanced levels.
Vancouver East- 23%
Vancouver West- 22%
All areas are above 20% which indicates it’s still a sellers market. However, the trend appears to be edging towards a balanced market. See recent movement on the sales/actives ratio below.
Months of Inventory
Vancouver East- 4.4
Vancouver West- 4.6
Here’s where things get interesting. Some of these markets are in what’s considered a balanced market. This is a first for the townhouse market in quite some time. With that being said it’s more of a result from very low sales than from an excess of inventory. Which again is also quite telling. It could suggest that buyers are holding out, or demand is subsiding.
Again, hard to quantify on a month to month basis. However, I still have townhouse prices down about 7% from the peak. More interestingly, the townhouse median and average sale price are showing a year over year growth of 2% and 3% respectively. So the year over year gains are quite minimal when prices at one point had increased by 20% or more. This is not to suggest prices have declined by 17% but it’s a telling sign that there are fewer high end townhouses being sold, and a much greater desire at the lower end, more affordable townhouses.
Keep a close eye on the townhouse market. As detached prices fall 15-20% townhouses are under some pressure. There’s a shift away from more expensive townhouses and the lower-mid range priced townhouses are still doing quite well. Sales are below historical normal levels, however low inventory is keep prices from moving too much. However, as sales/actives ratios and months of inventory continue to shift in favour of the buyer this could move prices downwards. Don’t expect that to happen overnight if it does happen. However, all in all it’s hard to argue that sellers still have the upper hand. Boots on the ground it appears to be a balanced market in certain areas.