Last July marked the fewest detached sales in Greater Vancouver since data was collected back in 1991. It should be no surprise that this year marked a noticeable uptick with sales jumping 31% year-over-year. As you’ll see in the chart below, this year was still one of the slowest from a historical context. Dating back to the year 2000, there have only been two other years with fewer detached sales in July (2012 & 2008).
It is much too soon to conclude the sharp bounce in sales year-over-year is indicative of a housing market that has “bottomed”. As we will highlight further in our report, sales increased on lower prices. The benchmark price of a detached home slipped further in July, now down 10.5% year-over-year. The benchmark price has now been in contraction for twelve consecutive months, the longest correction period since 2012/13.
It does appear that the sharpest annual price declines are behind us, at least for now, as we are seeing the year-over-year rate of price declines bottom, and begin to trend higher. This could further be solidified through the reduction in inventory, the number of homes for sale actually fell year-over-year, dropping 8% from last year. Sellers are choosing to take their house off the market, with new listings also falling by 8%. Time will tell if this turns out to be a wise decision or not. One of our preferred metrics, months of inventory, also fell and now sits at 7.5 months. This is still indicative of a buyers market but the trend is worth keep an eye on.
Overall, the detached market remains significantly weak at higher price brackets, with much more local demand concentrated at entry level price points, particularly those with basement suites (aka mortgage helpers). There is also significant weakness for teardown homes as single family home builders move to the sidelines.