Consistent with the national performance, B.C. home sales increased in October following a normalizing trend through most of the summer.
Multiple Listing Service sales surged 8.6% from September to reach a seasonally adjusted 9,719 units. This was strongest monthly gain since March and lifted sales to a five-month high.
While down 30% from the spring and lower than a year ago, this speaks more to the unsustainably strong performance over the past year. October marked the second-highest same-month sales on record next to 2020 and was nearly 40% above the average October pace from 2010 to 2019.
Robust demand has continued despite rapid home price growth during the pandemic. Low interest rates continue to motivate buyers alongside high investor demand, shifts in preferences and likely some fear of missing the homeownership boat as prices increase.
Modest population growth and recovery trends are further supporting demand. That said, rising interest rates have likely triggered a rush by buyers to lock in their rates through a purchase – even if the property was less than desired.
Among regions, the sharpest rise in sales came in the Lower Mainland-Southwest with Chilliwack (up 24%) and the Lower Mainland (up 7%). Sales in the Okanagan rose 17%. Year-to-date provincial home sales have already exceeded 2020 full-year activity.
While new listings edged up, sales momentum reduced resale housing inventory to record-low levels. Active listings declined nearly 6% on a seasonally adjusted basis and fell 40% from a year ago. Inventory sits just below two months’ supply compared with 2.9 months a year ago, and trends at the lowest level on record. Seller’s markets are pervasive throughout most of the province, with tight conditions on Vancouver Island and in the Fraser Valley/Chilliwack regions. Not surprisingly, home values reignited. The average price rose 3% to a record $963,269. Benchmark home values also accelerated.
Market conditions are expected to soften as affordability pushes more households off the market although lack of inventory will remain supportive of prices and rotate demand for lower-priced homes and apartments. •
Bryan Yu is chief economist with Central 1 Credit Union.