New Listings and Sales Plunge in March
Further uncertainty looms about where the Detached market is heading. Similar to last month (February 2017 Detached Market Report) sales and new listings are way off pace from a year ago. The market appears to be digesting the foreign buyers tax as homes in the detached market begin to move again. Of course this varies by area and price point. Let’s break it down.
Detached sales appear to returning to a more normal pace after a record setting March 2016. Detached sales plopped by 46% year over year, and remain 15% below the 10 year average for the month of March. Some areas did much better than others, a good rebound in Vancouver East, whereas the more expensive areas such as Vancouver West continue to struggle, recording the fewest sales of any March on record.
Vancouver East- 251
Vancouver West- 188
Last month new listings were down 50% year over year, and were well below the 10 year average. This helped spark the detached market in March as it capped inventory from increasing. New listings remain low in March, recording a 37% drop year over year. There appeared to be a sizeable uptick near the end of the month which could be encouraging moving forward. However, should new listings not increase soon it could certainly put pressure on prices to rise again.
Sales to Actives Ratio
Vancouver East- 24%
Vancouver West- 17.5%
As you will see in the chart below the sales to actives ratio is trending upwards over the last few months. This would indicate that the market is heating up. However, this is more of a seasonal trend than anything. As you can note in the graph below, the sales/actives ratio in the Spring is always quite high, even during March 2009 it was 14% despite the abysmal year we had following the financial crisis.
Months of Inventory
Vancouver East- 4.2
Vancouver West- 5.7
A months of inventory between 4-6 months is considered a balanced market. This feels more accurate of current market conditions.
As I like to remind everyone, average and median sales prices fluctuate each month. The average sales price dropped slightly this month, while the median sales price stayed exactly the same at $1,400,000. Overall prices appear to be flat. Circumstances vary by area and price point.
The detached market has definitely picked up a bit, however it’s partly an attribute of normal season fluctuations. With that being said, a rising sales/actives ratio and falling new listings is reason to be nervous about the direction the market is heading. Prices are basically flat, more affordable homes that are priced well are selling quickly, while more expensive homes above $1.5 million are more challenging and tend to linger on the market with some flexibility on price.