September Market Update Full Analysis
Just the other day I was accused by a fellow Realtor that the numbers I released were ‘fear mongering’ and that I should be advising on clients on “trends” not a small 11 day sample. He was referring to my recent post September Sales on Pace for Record Lows.
Advise on trends? If I advised you on trends, which is what the REBGV MLS HPI benchmark does, then my clients would be grossly overpaying for any purchase. Following trends shows detached house prices were up in August.
As I mentioned in my post Detached Housing Market Takes Heavy Blow In August prices were not up in August. In fact far from it.
As seen by the announcement of the foreign buyers tax, all it takes is one day to change the real estate market. So relying on “trends” is highly irresponsible.
But I digress. Below is a full break down of mid September numbers. These are pulled directly off the MLS system. If you find these numbers to be fear mongering then I suggest you look away.
Detached Housing Market
Sales from September 1-15
Vancouver East- 21
Vancouver West- 36
Richmond- 35
Burnaby-22
New Listings from September 1-15
Vancouver East- 136
Vancouver West- 105
Richmond- 112
Burnaby- 84
Current Inventory as of September 15
Vancouver East- 650
Vancouver West- 598
Richmond- 782
Burnaby- 464
So what does this all mean? If we double sales to account for the remaining 15 days of September, it will be the fewest amount of sales in September over the last 10 years for Vancouver East & West.
Projected Sales to Actives Ratio for End of September
Vancouver East: 5.5%
Vancouver West: 11%
Richmond: 8%
Burnaby: 8.4%
Here’s August 2016 sales to actives ratio for comparison.
Months of inventory:
Vancouver East: 18.2
Vancouver West: 9.26
Richmond: 12.27
Burnaby: 11.95
As per the Real Estate Board, anything over 6 months of inventory is considered a buyers market.
Condo Market
Sales from September 1-15
Vancouver East: 40
Vancouver West: 155
Richmond: 57
Burnaby: 78
New Listings from September 1-15
Vancouver East: 93
Vancouver West: 285
Richmond: 94
Burnaby: 93
Current Inventory
Vancouver East: 203
Vancouver West: 865
Richmond: 380
Burnaby: 315
Projected Sales to Actives for End of September
Vancouver East: 31%
Vancouver West: 31%
Richmond: 27%
Burnaby: 47%
Sales to actives ratio is down quite a bit when comparing to August.
However, anything over 20% is still considered a sellers market. Which from what I’m seeing on the ground it is still a sellers market for condos. Many first time homebuyers are still trying to get a foot into the housing market.
Months of Inventory
Vancouver East: 3.2
Vancouver West: 3.2
Richmond: 3.7
Burnaby: 2.1
In summary although condo sales are down quite a bit, inventory remains quite low and demand is still strong for entry level condos. It remains a sellers market but is slowly trending more and more towards a buyers market.
Townhouse Market
Sales from September 1-15
Vancouver East- 8
Vancouver West- 16
Richmond- 27
Burnaby- 13
New Listings from September 1-15
Vancouver East- 25
Vancouver West- 35
Richmond- 48
Burnaby- 25
Current Inventory-
Vancouver East- 60
Vancouver West- 90
Richmond- 226
Burnaby- 112
Townhouse sales will be below August numbers. We are also on pace for more new listings than in August. This is continuing to widen the gap and shift the townhouse market more towards a buyers market. Although sales to actives ratios still show it’s slightly a sellers market (Anything above 20%)
Sales to Actives Ratio:
Vancouver East: 21%
Vancouver West: 29%
Richmond: 22%
Burnaby: 21%
Again, this is a pretty big change in the sales to active ration when comparing to August.
Months of Inventory:
Vancouver East: 4.8
Vancouver West: 3.4
Richmond: 4.57
Burnaby: 4.8
According to the Real Estate Board a market with 4-6 months of inventory is considered a balanced market.
The townhouse market is now seeing price reductions. You will still see some multiple offer situations but for the most part it is a relatively balanced market which has shifted quickly from what was previously a sellers market.
Summary
In summary, across the board, September numbers appear more like August numbers. Could this be a delayed effect from the tax? The detached market is clearly in a buyers market. It’s flooded with backed up inventory. The condo market remains a sellers market however the gap is narrowing. It will take an increase of inventory to really move things there. As for the townhouse market, sales are slowing significantly, the sales to actives ratio has been dropping about 20% each month since June.
