Taking a quick look at Greater Vancouver’s detached-home market last month, you might have the creeping sensation that the market is at risk of overheating (yet again).
After all, as local realtor Steve Saretsky notes in a recent blog post, detached home sales surged 31 percent on a year-over-year basis in July.
Such pronounced double-digit increases can be a bellwether of strong price gains.
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But Saretsky points out a key difference between this summer’s home-sales surge and the frenzied activity of yore.
“This year was still one of the slowest from a historical context,” writes Saretsky.
This July was the third-slowest for detached home sales activity dating back to the turn of the last century. Only the Julys of 2012 and 2008 were weaker.
Chart: Steve Saretsky
And while the big jump in transactions was likely welcome news for realtors and homesellers, Saretsky cautions against taking it as a sign that the market has found its bottom.
Prices continue to fall, he notes. The benchmark price of a Vancouver area detached home was $1,417,000, declining 10.5 percent from a year ago and 0.5 percent from the previous month, according to the Real Estate Board of Greater Vancouver.
On a more positive note, Saretsky highlights how the rate of annual price declines has been easing in recent months. As some sellers decide to pull listings waiting for better market conditions, tightening supply might further mute price drops.
But for the time being, the detached market is not displaying a widespread turnaround.
“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),” Saretsky writes.
“There is also significant weakness for teardown homes as single family home builders move to the sidelines.”