Detached sales surged 48% from last year. Despite the large uptick, sales were still slightly below the ten year average for the month of October. We believe detached sales are structurally below normal as they remain unaffordable for most Vancouver residents. It seems hard to fathom we will ever return to peak sales volumes seen in 2015/16 unless we see another mass exodus of capital flight from overseas.
Instead, what we are seeing is detached sales picking up as sellers adjust their prices lower and buyers come off the sidelines. However, because of affordability issues, most of the increase in detached housing activity is concentrated in the lower end, more affordable segments. In some cases we are seeing multiple offers for entry level detached houses with basement suites. Meanwhile, the high end of the detached market continues to suffer. For example, here we can see that for detached homes priced between $1M and $1.499M has a sales to actives ratio of 27.6%. Technically indicating a sellers market. Meanwhile, for homes $2M and above the sales to actives ratio is a paltry 7%. If you’re a buyer looking to spend more than $2M the options are plentiful.
While it can be hard to pinpoint exact price declines by price bracket, what we can say for sure is that price declines are mostly concentrated in the high end of the market at this time. From a broader perspective we can see that detached prices across Greater Vancouver fell 7.5% year-over-year, although the pace of those declines is easing.
The pace of price declines is easing in part because new listings remain subdued. Sellers are not listing their homes for sale. New listings fell 17% from last year prompting months of inventory to fall to 5.8. This is the lowest number since June 2017 and is indicative of a balanced market.
To summarize, the detached market remains soft at the high end, particularly anything above $2M. However, the market looks much more balanced once you get below that. Inventory will need to grow to see further price declines.