12 Month Rolling Average Highlights Massive Plunge in New Listings
Many are still trying to make sense of the detached market. If you read the Vancouver Real Estate Detached Market Report April 2017 then you’re well aware this segment of the market has regained some traction. The sales/actives ratio, which is a key indicator of demand vs supply, is climbing upwards and prices appear to be inching higher.
So the question becomes, what is causing this sudden resurgence? A recent report from Josh Gordon, professor of public policy at SFU, noticed some intriguing data over the past several months.
As we know, sales have been anemic ever since the foreign buyers tax. Sales have been dropping by nearly 50% year over year. The most recent data from a 12 month rolling average highlights the steep decline.
As sales dried up, inventory started to recover from it’s unhealthy lows. Inventory slowly began inching upwards, and stability started to return to the detached market. A once hot detached market turned cold. Houses were taking longer to sell and it appeared listings would continue to pile up.
Then, unexpectedly, the detached market was thrown a life line. New listings plunged, sellers refused to sell. It was as if sellers coordinated to stop the bleeding. In February, new listings tanked by 48% year over year. A trend which continued over the following months. Suddenly stale listings became appealing once again. Within a few months the market had flip flopped from a buyers market back to a sellers market.
The question now becomes, how sustainable is the drop in new listings? Should sellers regain the desire to sell and new listings recover to normal levels, will the demand be there to meet it? Time will tell…