Early sales data from the Real Estate Board of Greater Vancouver (REBGV) and anecdotal reports from the street suggest that a nine-month slide in the housing market may be coming to an end.
And, despite fears of a listing shortage, there were 8,072 homes of all types for sale as of mid-February, which is about one-third higher than in February of last year before the first of eight straight interest rate increases began.
The market bottom may have been seen in January 2023, when residential sales through the REBGV plunged down more than 55 per cent from a year earlier and were down 21 per cent from a month before, to just 1,022 transactions.
January sales were 43 per cent below the 10-year January sales average.
Things have changed this month.
At the mid-point of February, there have been 878 sales in Greater Vancouver, far higher than the 334 that had sold at the mid-point of January, and about 100 more sales than the mid-point of November and December of last year, REBGV data reveals.
“The numbers show a definite shift in activity, and the shift is also heard in the chatter amongst realtors, who are commenting on the number of offers being received on new and existing listings,” said Kevin Skipworth, managing partner at Dexter Realty in Vancouver.” Sales are picking up; showings and open houses are busier.”
Skipworth noted that one premier Richmond condo listing attracted 11 offers.
Data for the first two weeks of February shows the sales-to-new-listing ratio hit 48 per cent, double the level in January, when just 24 per cent of new listings sold. This means that, so far this month, nearly one of every two new listings found a buyer.
There is a correlation to the sales ratio and home prices, according to the REBGV. Generally, home prices experience upward pressure when the sales-to-listing ratio surpasses 20 per cent over several months, and prices decline when the ratio is consistently below 12 per cent.
Based on REBGV mid-February data, which Dexter Realty released to Western Investor, the following are the markets with the most sales action.
- Burnaby North, Burnaby South and Coquitlam posted more sales in the first two weeks of February than in all of January 2023.
- Vancouver East saw the sales-to-new-listing ratio for condominium apartments hit 69 per cent so far in February.
While a two-week sales increase may not be a harbinger of a long-term recovery of housing sales, the BC Real Estate Association is forecasting that 2024 will be a banner year for residential real estate right across the province.
“We expect a strong recovery, boosted by an expected decline in mortgage rates and record high immigration that will carry significant momentum into 2024,” said BCREA Chief Economist Brendon Ogmundson.
The Bank of Canada has also hinted that its 25-basis-point increase in lending rates on January 25 may be the last one for this year.
Skipworth suggests that the stronger February sales may reflect that some homebuyers and investors see 2023 as a “positioning year” in expectation of higher prices and demand in 2024.