On September 30, 2008, the Real Estate Board of Greater Vancouver (REBGV) had a total of 22,605 active listings. This recent high may have caused some panic because there were only 13,574 listings exactly one year earlier.
Yesterday, January 16, 2009, I did a search for all REBGV active listings and this is what I found:
As David Clayton-Thomas lyricized,”What goes up must come down”; to 14,258!
The selection that was available to buyers just 3 1/2 months ago has now diminished considerably (as in a 36.9% drop).
Speaking to some of my Realtor colleagues who have been through a market downturn or two, there’s a general consensus that this sudden drop was mainly as a result of expired and terminated listings of sellers who weren’t really selling at all.
These owners were “feeling out the market” to see if they could get unrealistic prices on the tail of the long sellers market we went through, and it seems that many Realtors accommodated their false hopes by accepting over-priced listings.
Where are we now?
As a part of the supply and demand equation we should keep our eye on, new stock coming to market, new permits being issued, and in-migration. Personally I think that builders need to be regulated to prevent excessive over-supply and the economic chaos this condition causes.
I regularly ask for and respect the different opinions of the office sages, and factoring that the Springtime often brings new sellers to the market, a realistic figure for active listings seems to float in a predicted range of 15,000 listings +/- 10%, so at this level of supply we are probably bordering on a balanced market.
With regards to market values, the predictions coming from my informal sources are that we could see anything up to another 10% drop, but there seems to be reluctance predicting anything exceeding that.
Although buyers may not have as good a selection now (as compared to September 2008), at least they know that asking prices should be more reasonable, the actual selling prices compared to list prices indicates there is still room for negotiation, and they do have very favourable financing available still.
If buyers are waiting for things to “bottom out” then we may not be too far away, and if they are waiting to enter the market for the long-term now is the time for fence-sitters to get off the fence.
There also seems to be a general agreement that owners expecting anything more than marginal appreciating values over the next two or three years in Metro Vancouver are probably going to be disappointed, at least according to my water cooler sources.
How do you think this March 7th sell-off: http://www.MacBulk.com will affect the local market?
Good question and good timing Chris.
As I teach in my Buyer Beware seminars, potential buyers need to know that walking into the developer’s pre-sale office without a professional REALTOR® is compromising their position by automatically limiting their representation. I’ll need to do a blog post on this.
This promotion will probably drain some of the qualified buyers presently in the re-sale markets because the prices for new will now be similar.
Keep in mind that some of these listings are in the area of the Fraser Valley Real Estate Board so the numbers are probably inconsequential from an inventory perspective when split between the FVREB and the REBGV.
Your timing is interesting Chris because I registered for the March 7th sale in the event any of my buyers should need representation. This afternoon I’ve just learned via email that the rules have changed and the orchestrated “frenzy” is about to start.
“…we will give everyone an equal opportunity to write an offer at our “Equal Opportunity Sales Events” this week. Each site has been assigned a different evening this week. We are confident that we will be able to offer a higher level of service by focusing on just one development per evening. To those people without reservations, offers will be written on a first come, first served basis. So, for best availability, please arrive early and don’t forget your cheque book.
Here is the Equal Opportunity Sales Event schedule:
Monday (Jan 19) 5pm – Flo, Richmond
Tuesday (Jan 20) 5pm – US Presidential Inauguration Day – No event
Wednesday (Jan 21) 5pm – Suter Brook, Port Moody
Thursday (Jan 22) 5pm – Victoria Hill, The Grove & The Point, New Westminster
Friday (Jan 23) 5pm – Verde & South Verde, Port Coquitlam
Each site will be closed on the day of its event. You are welcome to visit the sites and view homes prior to Wednesday, Thursday and Friday’s events.
All remaining unsold inventory will be sold at the March 7th Sales Event.”