It seems not long ago the Vancouver Real Estate market was mired in a frenzy, a widespread panic ensued over rising home prices and buyers eagerly bid up prices in emotional bidding wars.
According to a CMHC report released in June 2017, 55% of Metro Vancouver respondents confessed to engaging in a bidding war to secure their recent home purchase. A behaviour which award winning economist Robert Schiller likens to “irrational exuberance”.
However, those days appear to be a thing of the past. With the abrupt shift in the housing market having pushed sales to an eighteen year low through the first nine months of this year. The fear of missing out has turned to a sense of nervousness as potential buyers fear home prices could slide further in the months ahead.
This appears to be reflecting in the MLS data from the Real Estate Board of Greater Vancouver. The data shows the number of listings across Greater Vancouver which sold above the asking price has slid from a peak of 51% in April 2016 to just 11% this September.
While 11% still sounds high, it’s worth noting that even during the bear markets of 2008 and 2012, the number of listings sold above the asking price was still at 9%. What this metric doesn’t account for is all the listings lingering on the market going no bid. And perhaps accounts for the few listings which are sometimes offloaded in a fire sale.
By all accounts it appears both detached homes and condos have plunged from their recent highs. While detached homes currently sit at 11%, Greater Vancouver condos have recently dropped to just 12%.
This slowdown has also emerged in the Fraser Valley where the market has come to a screeching halt. Particularly in the number of condos selling over the asking price which has plunged from a once red hot 63% in March of this year down to just 10% in September.
While headlines of euphoric bidding wars once helped stoke the flames of a mania, one can’t help but notice the now growing chorus of negative sentiment drifting into the market.