The city of Vancouver’s detached housing market continues to turn heads. Detached sales fell 38% year-over-year in December. It was the fewest December sales in recent history, with MLS data dating back to 1992. There’s really not much else to say, I believe the data speaks for itself.
Buyers are hesitant to pull the trigger, and sellers are somewhat reluctant to adjust their asking prices, although the very few homes that are selling are taking a substantial discount. As with all housing markets, price discovery becomes very difficult in a down market. Part of this reason is because there is no one price metric that you can look at to determine how much prices have fallen. The official MLS benchmark now shows prices have declined 10% from last year. However in certain pockets and at certain price points some detached homes are down as much as 25%.
Despite weak home sales and falling prices, new listings remain quite low and dropped 16% from last year. Again, this suggests sellers might not be panicking just yet, there is no flood of new listings hitting the market. There is however, a backlog of stale inventory failing to sell. There is currently 15 months of inventory for sale.
The prevailing sentiment in the detached housing market is frustration amongst sellers. After several price reductions many sellers are taking their property off the market with the plan to re list in the spring when housing activity seasonally ramps up. However this could create a situation where new listings far exceed buyer demand, which could push inventory higher and accelerate price declines.