The city of Vancouver’s detached housing market followed up a miserable 2018 with another decline in home sales. Detached sales
for the month of January fell 9% from last year, this marked the worst January on record since data started being collected in the early 1990s. It’s hard to see detached home sales declining much further, we are likely to see a seasonal uptick from here as we head into the spring market.
However, given that sales are historically weak and will almost certainly remain sluggish in the near term, new listings will continue to outpace sales and rising inventory will adjust home prices lower. As of the end of January there was 15 months of inventory for sale.
This is approximately double what would be considered a balanced market. While many sellers remain anchored to peak prices those who need to sell are having to realize the clearance price is significantly lower than what we are used to. While there are a barrage of price metrics none of them are completely accurate nor reflect current market prices. When studying comparable sales it is safe to conclude luxury home prices are about 25% lower than peak prices achieved back in early 2016. Entry-level detached homes are not quite as soft, particularly those with basement suites which can be used as mortgage helpers to help subsidize interest payments. The official home price index as per the real estate Board of greater Vancouver now shows detached homes in the city of Vancouver have declined 11.4% year-over-year. The median sales price shows a more aggressive and perhaps overly volatile decline of 23%, the average sales price is showing a 17.3% decline when compared to January 2018.
Because there are so few home sales prices are bouncing around with very little rhyme or reason other than buyers are looking for substantial discounts and aggressively negotiating asking prices. This should come as no surprise considering the sales active ratio came in at a paltry 6% in January, the lowest recording since November 2008.